AI on the Horizon: October 2026

The budget bankrolling the AI for All strategy

Canada’s latest AI news on the economy, society, and policy. In this issue of AI on the Horizon, we look ahead to the federal budget landing on November 5 and the AI commitments to be funded by it.

From promises to paper

The date is set. The government has confirmed that Budget 2026 lands on November 5. It’s the second budget from the Carney government and the second to drop in the fall. The media advisory focuses on a more independent and resilient economy, with measures to unlock investment, housing, and job creation, and to move nation-building projects forward.

For anyone tracking AI policy in Canada, this budget needs to deliver on some potential commitments planted in Spring 2026. The AI for All strategy previewed that the government was exploring ways to give Canadians the opportunity to reinvest gains from successful tech companies into new Canadian AI startups by the 2026 budget announcement. Currently, the government has two mechanisms to take an equity stake in the AI ecosystem and support domestic growth: a flexible-growth capital fund of $500 million (aptly named the Canadian Tech Growth Fund) and the $25 billion Canada Strong Fund.

Recently, the federal government announced an additional $750 million on top of its original $1 billion to fund existing venture funds and help firms scale. New details show that $75 million of the $750 million will go to pre-seed and seed companies, with the majority directed to growth-stage companies. The Regional Artificial Intelligence Initiative picked up a $500 million top-up on October 14, bringing its total to $700 million over five years. In the spring, the feds announced the AI Compute Access Fund has distributed $66 million to 44 small and medium businesses out of a $300 million total.

The social contract to sovereign compute

But the billion-dollar question remains since applications to build Canada’s public AI supercomputer closed on June 1. The program, which provides $890 million, still hasn’t announced whether the funds have been awarded.

Currently, the Compute Access Fund subsidizes 50 cents on the dollar for foreign compute and 67 cents for Canadian compute. That larger discount for Canadian suppliers is the main lever for a Buy Canadian compute policy. But some argue the discount is not enough. Given that seven of the eight cloud vendors approved for federal use are American, Canadian compute providers still face an uphill battle competing for public service contracts. We recently covered the details of several provincial frameworks for data centre buildouts, and the local concerns of these projects.

From the regulatory perspective, some progress has been made on AI governance in the form of data protections and safer digital media. Critics suggest five of the six pillars in the AI for All’s strategy focus on investment and adoption rather than governance. Fortunately, the proposed bills would enable a Digital Safety and Data Protection Commission of Canada to administer fines and recognize AI under automated decision-making in the bill.

On the Horizon: five things we are watching on November 5

Here’s the top five things we’ll be watching for on the fifth:

We will be reading it with a calculator in hand.