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Tech experts hope federal AI funding will help quicken adoption, commercialization

TORONTO — Tech experts are hopeful that more than two billion dollars in federal funding for Canada's artificial intelligence industry will accelerate the adoption of technology and help businesses commercialize AI products and services.
Experts say they are hopeful about the federal government's pre-budget announcement regarding artificial intelligence. The Peace Tower on Parliament Hill in Ottawa on Monday, March 18, 2024. THE CANADIAN PRESS/Sean Kilpatrick

TORONTO — Tech experts are hopeful that more than two billion dollars in federal funding for Canada's artificial intelligence industry will accelerate the adoption of technology and help businesses commercialize AI products and services. 

The federal government announced Sunday that its upcoming budget will set aside $2.4 billion to help bolster Canada's AI sector. 

Krista Jones, chief delivery officer at the MaRS Discovery District innovation hub in Toronto, says the announcement is exciting for the industry.

She said it will help the industry move from researching AI to more widespread commercialization.

"We were so ahead of the game on the research side and focusing on the talent that it took a while for us to focus on the next level, which is the adoption piece," she said. "It's better late than never."

Jones said developing AI in Canada and the potential for it to become more affordable is also exciting for businesses.

However, she added, Canadian businesses have historically been risk-averse and financially conservative when it comes to adopting new technology. 

Sometimes, she said, "people get hung up on the things about AI that are not happening today, and they miss what we call applied AI and applied AI adoption which will enhance the productivity of those sectors."

"(The funding) is a badly needed kind of injection," Jones said. 

A study from consulting firm KPMG showed 35 per cent of Canadian companies it surveyed had adopted AI by February last year. Meanwhile, 72 per cent of U.S. businesses were using the technology.

The funding shows the urgency and seriousness of the government on the AI sector, and helps regain global momentum, said Karim Bardeesy, executive director of the policy and leadership think tank The Dais at Toronto Metropolitan University. 

But, he added, the public funding alone will not be enough.

"The public sector is putting a lot of dollars in, but we need to see that the private sector and institutional investors play their part as well," Bardeesy said.

He said Canada once had a strong lead in AI technology and that won't be regained if the industry only relies on governments to pave the way.

The federal government says the bulk of the AI funding will go into a fund that will aim to provide access to computing capabilities and technical infrastructure. 

Prime Minister Justin Trudeau announced Sunday that $200 million will go toward boosting the adoption of AI in sectors like agriculture, health care and clean technology.

He said during the pre-budget tour that the federal government will begin consulting with industry soon on a new AI Compute Access Fund and an accompanying strategy to expand the sector in Canada.

The government also plans to launch a $50-million AI safety institute to protect against what it calls "advanced or nefarious AI systems." Another $5.1 million will go toward an office of the AI and Data Commissioner to enforce the proposed Artificial Intelligence and Data Act.

The funding will help startups bring new technology to market and accelerate AI adoption, an area where Canada has been struggling, said Carole Piovesan, managing partner with INQ Law. 

However, if Canada is going to have a dedicated AI and data commissioner, more funding will be needed, as $5.1 million isn't going to give the office "enough of the expertise and enough budget to respond to industry demand for guidance on responsible AI,” she said. 

The Canadian Chamber of Commerce also praised the announcement but called on the government to improve Bill C-27, the first federal legislation specifically aimed at artificial intelligence.

“We can’t continue to layer on additional red tape that will stifle and undermine private sector investment,” said Ulrike Bahr-Gedalia of the Canadian Chamber of Commerce in a statement. 

“While this announcement makes way for new opportunities for AI in Canada, the truth of the matter is that the government needs to fix Bill C-27, which will drive productivity and adoption away from Canada if not addressed.”

Bill C-27 would update privacy laws and introduce new obligations for "high-impact" systems.

This report by The Canadian Press was first published April 8, 2024.

Ritika Dubey, The Canadian Press