We must rebuild Canada for the new technological order

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Don Tapscott (CM) is the co-founder of BRI and Chancellor Emeritus at Trent University. He and Alex Tapscott are the co-authors of the institute’s report Rebuilding Canada for the New Technology Order, published June 16.

As most Canadians know, the country is at a hinge point in its history.

Two tectonic forces are stressing the foundations of our prosperity, power, and society itself. One is what Canadian Prime Minister Mark Carney calls “a new world order,” as the relative stability of the postwar system gives way to competing hegemons and transactional interest-based alliances.

The other force is artificial intelligence, the rise of machines that can learn from, reason over, and act on data in their environment. Early in the digital age, low-cost technology expanded access to computing power, information, and mass collaboration. In this next era, the very human capabilities of creativity and ingenuity are becoming abundant, programmable, and agentic. AI can represent, move, and transform value in real time. Scale increasingly derives not from physical assets but from data, networks, and intelligent systems that learn, decide, and act.

Call it the new technology order.

While less visible than geopolitical upheaval, this force will have a deeper impact on Canada’s economic success and national power. It will restructure every institution in society, from companies and markets to education, health care, and government. And it will transform the lived experience of citizens – how they support their families and engage with the world, for better, worse, or both.

In the face of this, Canada’s challenge is not a lack of talent, entrepreneurship, capital, or even natural resources. It is the lack of a digital-first architecture for generating economic value and global power.

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Promising initiatives are under way. Canada is investing in artificial intelligence, quantum computing, modernized payments, and data governance. The appointment of a minister of Artificial Intelligence and Digital Innovation signalled that AI was more than a sector, an industry, or a government portfolio. The federal government’s “AI for All” strategy, launched earlier this month, aims to provide free AI literacy training to Canadians, establish a Canadian tech growth fund to take equity stakes in AI companies, and expand Canadian businesses’ AI adoption from 12 per cent today to 60 per cent by 2034.

While these programs catalyze initiatives across the country, no single ministry can manage a transformation of this magnitude. Canada must engage the whole of society: Governments at every level, businesses large and small, educational institutions, labour organizations, and civil society. The goal is not simply to adopt AI faster, but to manage the disruptive transition as best we can so that it creates broad-based prosperity and benefits all Canadians.

To catalyze a national conversation around this transformation, the BRI conducted an extensive study of how foundational technologies and geopolitics are reshaping Canada’s economy and society. We interviewed more than 50 leaders of business, government, academia, and civil society to identify new ideas, expose gaps in current thinking, and frame the scale of change.

One theme emerged clearly: Canada requires nothing short of a moonshot – not a set of incremental policies, but a national mission for realizing intelligence, data, and networks as our primary sources of value.

Together, five core goals define this national moonshot.

Building a sovereign digital infrastructure

Infrastructure is central to sovereignty. In the industrial age, no serious country would permit a foreign rival to own and operate the country’s electrical grid. Yet, in the AI age, an estimated 90 to 95 per cent of countries already depend on foreign-controlled cloud infrastructure, AI systems, payment rails, operating systems, and data ecosystems.

The leading AI companies are explicitly pursuing a future in which intelligent systems do human cognitive labour. If they succeed, even in part, then Canadian companies may end up paying licensing fees to foreign AI platforms rather than wages and salaries to Canadian workers. Call it the techno-economic route to becoming a 51st state.

The danger is not merely economic dependence. It is the existence of a “kill switch” problem: The possibility that critical digital infrastructure or services could be restricted, degraded, or withdrawn during a geopolitical or economic conflict.

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In the new technology order, Canada must think of infrastructure as far more than roads, railways, bridges, automated tellers, phone networks, or even power grids. It consists of a sovereign compute capacity achieved through decentralizing the AI stack and asserting Canadian legal authority over the data that underpins AI systems and critical services. Canada needs a sovereign data and AI commons – a shared national digital infrastructure that curates, governs, and facilitates access to critical data and AI capabilities in the public interest.

We also need a national digital identity framework, not merely a system for identification or surveillance, nor one owned and controlled exclusively by the government, but a citizen-centric digital identity ecosystem that empowers Canadians to securely manage and benefit from their own data.

Turning Canadian technological ingenuity into global businesses

Canada originates world-class research, startups, and early innovation, yet too rarely cultivates them into global giants that base their operations in Canada. The country’s capital markets, procurement systems, investment incentives, and outdated legislation thwart technology-intensive, long-horizon growth. As a result, Canada repeatedly cedes value creation to foreign platforms and acquirers.

We can finally solve this problem. The AI for All strategy includes a new $500-million Canadian Tech Growth Fund to help Canadian AI entrepreneurs and scale-ups access growth capital, compete globally, and keep talent and intellectual property anchored in Canada. A good start.

Canada should extend its flow-through share model, which gives investors tax write-offs for funding high-risk resource exploration projects and helps startups raise early-stage capital, to investments in technology companies.

Canada could also mobilize the hundreds of billions of pension fund capital by changing their governance conditions so that their stewards can invest funds without abandoning their fiduciary duty to Canadian workers.

The massive increase in defence spending planned for the years ahead could also become a powerful engine for Canadian entrepreneurship if Canada directs investments toward dual-use technologies such as AI, robotics, cybersecurity, drones, quantum, and advanced manufacturing.

Solving the productivity crisis through investment in next-generation technology

Canada’s productivity crisis is threatening long-term living standards and competitiveness. Output per worker has stagnated for years, business investment lags that of most OECD countries, and Canada now ranks near the bottom of advanced economies in productivity growth.

While large companies in sectors such as banking, telecommunications, and manufacturing often invest at levels comparable to global peers, small and medium-sized enterprises that account for nearly half the private sector’s GDP and two-thirds of its work force lag in adopting advanced technologies. Structural factors, including limited competition in key sectors, regulatory complexity, and barriers to scaling, further constrain performance.

To address this challenge, Canada must co-ordinate efforts to accelerate technology adoption, modernize manufacturing, equip workers with advanced tools such as AI, and transform public-sector productivity.

It requires tough decisions. Rather than prioritize saving an increasingly uncompetitive industry like automotive, how about negotiating new trade agreements with China, South Korea, Japan, and other countries with next-generation robotics? Those could bring advanced automated production systems, robotics expertise, and industrial AI capabilities to Canadian facilities in exchange for market access, natural resource supply chains, and research collaboration.

Preparing national defence for an age of algorithms and connected machines

Canada designed its military for the industrial age, with centralized command and control, massive physical platforms, and large numbers of human soldiers operating in hierarchies. Today, however, warfare increasingly involves AI agents, cyber capabilities, drones, and real-time machine intelligence operating at digital speed.

While investing sensibly in traditional defence hardware like jets and submarines, Canada should treat autonomous systems and cyber defence as central national security initiatives, with strong domestic capabilities in secure software, encryption, and rapid response. We must also build industrial capacity in autonomous and counter-autonomous systems, including drones, sensors, and electronic warfare, all decisive in military conflict and domestic security.

Forging a new social contract

Evidence points to a startling future where, in many industries and job types, humans are simply not economical. Income tax will no longer be the dominant source of government revenue. A universal basic income, while necessary, will be insufficient as people gain meaning, structure, and fulfillment through work. Rather than tinkering with government bureaucracies, Canada can build an agentic government where AI agents deliver services, improve decision-making, automate operations, and help citizens navigate public systems more effectively and personally.

Canada drafted its social contract – the agreements between government, the private sector, and citizens – for the industrial age. We must make countless major revisions for this digital era, not just to govern AI, but to reconstruct almost every institution so that our legal and governance systems sustain democratic legitimacy and equip citizens to thrive alongside intelligent systems and share in the economic gains from technological progress.