Murat Kristal, AI and business analytics expert at Schulich School of Business, says it’s time Canada accelerates the development of an AI strategy to stay competitive.Thomas Bollmann
Canada can be a world leader in artificial intelligence, but our AI future depends on developing the right strategy now, experts say.
“AI offers solutions for all kinds of sectors, whether it’s infrastructure, transportation, manufacturing, health care, energy or banking and finance,” says Ceren Kolsarici, director and associate professor of marketing and analytics at the Scotiabank Centre for Analytics at Queen’s University’s Smith School of Business in Kingston, Ont.
According to an International Monetary Fund report, released earlier this year, 40 per cent of jobs worldwide and 60 per cent in developing countries will be impacted by the advance of AI. It’s expected to change the nature of all kinds of work, from flipping burgers to performing heart surgery.
Citing a recent global report by the Centre for AI and Digital Policy on Artificial Intelligence and Democratic Values, Prime Minister Justin Trudeau said at the One Young World Summit in September: “Canada is a leader in the responsible adoption of AI, and was ranked No. 1 among 80 countries, tied with South Korea and Japan.”
Dr. Kolsarici emphasizes that a successful AI strategy hinges on securing substantial resources, including dedicated funding and federal support. “Making sure that Canada is an AI leader is going to need startups, established companies and government working together,” she says.
One significant step forward, she says, is the federal government’s spring budget announcement to earmark $2-billion over the next five years to launch an AI Compute Access fund and a Canadian AI Sovereign Compute Strategy.
This funding and strategy aim to provide Canadian researchers and AI companies with a made-in-Canada plan and the tools to remain competitive in a fast-changing global landscape.
“The federal consultations inviting input from researchers and policy-makers can be helpful if they lead a good working relationship between governments and their policies, academic institutions and private corporations,” she says. “The goal should be a strong working infrastructure that encourages everyone to collaborate, keeping their headquarters and their talent in Canada.”
Although Canada was the first country to come out with an AI strategy in 2017, its ranking on AI infrastructure dropped from 15th to 23rd from 2021 to 2023 out of the 61 countries, according to Innovation, Science and Economic Development Canada (ISED).
Committing $2-billion may sound like a lot, but demand for an AI computing infrastructure, referred to as “AI Compute,” has increased globally.
“Leading estimates indicate that the global market spent US$46-billion for high-performance servers and generative AI servers in 2023. This is forecast to grow to US$77.6-billion in 2027, reflecting increasing prices and usage,” says ISED research.
With AI’s capabilities and potential growing every day, it’s time to do more, says Murat Kristal, professor and special adviser of AI and business analytics at York University’s Schulich School of Business in Toronto.
“In addition to the United States competition, we’re facing great competition from other countries. China launched its AI plan shortly after we did in Canada, with huge funding, and goals it hopes to achieve by 2030,” he says. “It’s important to bring together stakeholders in business, research, the provinces and Ottawa to look at all the questions and come up with answers.”
To help develop the strategy, the government invited submissions through the summer on how to build and grow Canada’s AI computing infrastructure.
“The questions that need to be addressed include: is our information technology (IT) infrastructure ready to handle AI and the increasing burden of data transfer? Do we have the energy infrastructure to support AI? If we’re adding data centres, can we power them on an electricity grid that doesn’t increase greenhouse gas emissions?” Dr. Kristal says.
The consultations should also explore what’s needed to recruit and retain the best AI developers and software engineers, Dr. Kolsarici says. Canada currently has 10 per cent of the world’s top-tier AI researchers, the second most in the world, according to ISED.
It also notes that the number of AI patents filed by Canadian inventors increased by 57 per cent in 2022-23 compared to the previous year – nearly three times the G7 average of 23 per cent over the same period.
This momentum needs backup from government, through strategy and policies that have been well thought out, Dr. Kolsarici says.
“We need the right tax structure and business conditions to attract and keep people who work on AI,” she says.
“People talk about going to work in the most tax-friendly countries. Many of my students say that when they graduate, they’re going to work in the Persian Gulf states, for example, where personal and business taxes are minimal,” she says.
Industries and sectors that are embracing AI are also facing questions about how it will change the way they work and affect their employees, clients and customers.
“The commercial real estate industry, like many non-tech sectors, is exploring how to leverage AI,” says Victoria Papp, senior director, strategy and innovation at BOMA Best, the national certification program for building owners and managers.
“As with any new technology, government investment in building infrastructure and advanced tech can help our industry better harness its benefits,” she says. “Even in its infancy, AI is transforming our work and lives. Yet, as we integrate AI into our buildings and operations, we must also consider the environmental footprint of these technologies,” she adds.
For example, the energy needed to power AI is substantial – in September, Microsoft and Constellation Energy made a deal in the U.S. to reopen the Three Mile Island nuclear plant, partly to provide energy for its AI operations.
Other sectors, such as the financial industry, are also looking for ways to balance AI’s benefits and its perceived negative effects.
“It’s essential that we don’t lose sight of the human element in banking,” says Matthew Seagrim, chief digital and marketing officer at Ontario-based Meridian Credit Union.
While financial institutions are now deploying AI tools, such as chatbots for transactions that used to involve tellers or call centres, it’s not necessarily popular with customers, he says.
“A recent survey we did found that many Canadians feel like just a number in their interactions with financial institutions,” Mr. Seagrim explains, adding that AI can add efficiency and improve customers’ experience if it’s deployed together with backup from service representatives who can help.
“We believe AI has the potential to enhance – not replace – those personal connections,” he says. “AI can free up time for more meaningful and informed one-on-one interactions with people.”