Dvai Ghose is the principal at Ghose Investment Corp. He is the former head of global research and strategic development for Canaccord Genuity Group.
In his address to the Liberal Party’s national convention last month, Prime Minister Mark Carney stressed two things. The foundations of the international order, which has served Canada well for decades, is crumbling. And as technological change accelerates, we can either shape our future with artificial intelligence or let it control our destiny.
The two issues are closely intertwined, and as Mr. Carney rightly pointed out: “Hope is not a plan and nostalgia is not a strategy.”
So what is Canada’s road map to balance national sovereignty with the considerable potential benefits of AI, a field United States companies dominate, while mitigating risk? This is far from simple.
Technology lends itself to globalization, and Canadian customers are heavily reliant on global vendors. Foreign communications providers such as Elon Musk’s Starlink, for example, are allowed to operate freely.
Starlink now has more than 500,000 Canadian subscribers and is the sixth-largest internet service provider in Canada. The Ontario government even committed $100-million to fund equipment for northern subscribers. As we shifted last year to a “Buy Canadian” mentality in the face of U.S. tariffs, Ontario Premier Doug Ford cancelled that contract.
In theory, the solution to maintaining sovereignty is simple: Ban all foreign input in areas deemed strategic in favour of made-in-Canada solutions.
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In practice, though, Canada is a small country that has to leverage international vendors and lacks the scale for cost-effective, Canada-only solutions. Of course, Canada can also aim to export technology, but the move to increase technological sovereignty is a global phenomenon at play for potential buyers.
Sometimes an imported option is necessary. It is highly unlikely that Starlink will be outright banned, despite its association to Mr. Musk, as there is no obvious broadband alternative for many Canadians.
Not surprisingly, the U.S. government opposes our “Buy Canadian” policy, especially when it comes to technology. U.S. Trade representative Jamieson Greer specifically identified Canada’s interest in sovereign cloud technology as a trade irritant in his March trade estimate report.
But as Mr. Carney warned, if we stand still during this rupture, we will surrender our future to others. In order to balance Canada’s sovereignty with technology and AI advancement, there are a few areas that the government should prioritize.
First, it should establish sovereign AI infrastructure standards, anchored in full jurisdictional control.
Current policies that only focus on work force and branch presence in Canada risk placing giants such as Microsoft Corp. and Meta Platforms Inc. in the same category as genuinely Canadian companies, just because they have operations here.
A definition of AI sovereignty would allow the government and private-sector buyers to make the right decisions, recognize that some foreign companies have invested more in Canada than others, and only use outside solutions when there is no Canadian alternative.
To this end, the government should introduce a tiered AI certification program.
The gold standard would be reserved for infrastructure demonstrating end-to-end Canadian operational control; silver would go to foreign-headquartered companies with significant operations, a substantial work force and meaningful investment in Canada; and bronze would be for companies meeting basic Canadian presence requirements.
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Such views are echoed by Canadian tech leaders on the government’s own AI task force.
Ian Rae from CloudOps argues that “sovereign is supply chains,” and calls for legislation requiring foreign cloud services to delegate authority over operations to a Canadian entity. Michael Serbinis from League recommends the government define sovereign AI as being anchored in Canadian control of operations, data and infrastructure.
Government policy that meets this critical moment – or doesn’t – will have significant implications for Canada’s sovereignty, prosperity and even protection of free speech.
An anonymous Canadian plaintiff represented by the American Civil Liberties Union recently sued the U.S. Secretary of Homeland Security, in an attempt to stop U.S. officials from obtaining personal and location information from Google. The lawsuit alleges the summons came after the plaintiff criticized U.S. President Donald Trump’s administration online.
Canada’s government must enshrine regulations that prevent companies from handing over information about Canadians to a foreign power.
It must also protect the Canadian economy.
A recent PwC Canada report estimates AI could add $760-billion to our GDP by 2035. Data from the Canadian Space Agency show that for every dollar the government invests in home-grown tech, the space sector generates $3.60 in additional revenue.
But as things stand, a foreign firm building a Canadian data centre will use its own global supply chains. It will rely on Silicon Valley for hardware engineering and high-level research and development. That leaves Canada to provide connectivity while retaining none of the intellectual property.
It is imperative that Mr. Carney and his government get this right.