AI on the Horizon: September 4, 2025 

Canada’s latest AI news on the economy, society, and policy. In this issue, we examine the implications of AI for the Canadian government and public services. 

Canada’s Public Sector AI Strategy 

At this year’s G7 summit, Canada committed to unlocking AI’s potential in the public sector. That promise is taking shape through the introduction of a sovereign AI public compute plan and the appointment of a dedicated AI minister. But in the face of a proposed program spending reduction and weakening economic growth, is it possible to deliver better public services with fewer resources?  

Public Sector Deals  

The Canadian government is partnering with Cohere to help build out Canada’s AI ecosystem and explore operational use cases for AI. While Canada’s ability to create digital IP has underperformed its peers, a move to public procurement of Canadian AI is a step in the right direction.  

Public Sector Service Delivery 

The federal government has piloted AI for several internal and external-facing services. Recent research indicates that AI use cases primarily affect federal employees, primarily because provincial and municipal duties are often more front-line or physically demanding, and thus less exposed to AI. Our research suggests that investing in AI adoption could prove to enhance productivity and provides commercialization opportunities that our innovation system has called for.  

On the Horizon: Public Transformation on a Budget 

For Canada’s public service, adopting AI requires considerable transformation and risk assessment. With the pressure of impending spending reductions, public sector AI adoption is not a matter of if, but how quickly. The question is: can we prove that Canadians are receiving better or the same public services for less? Stay tuned. 

To learn more about Canada’s AI workforce and skills demand, please visit Signal49 Research’s report on Artificial Intelligence Talent in Canada.