How Canada wants to compete with the U.S. for A.I. supremacy

Canada’s tech sector, despite the country’s well-regarded universities and robust government-funded research, has long been made up primarily of regional offices for U.S. tech giants such as Microsoft, Google and Amazon, with only a few homegrown tech powerhouses to call its own—notably Shopifyand the once-dominant Blackberry. But with the Trump administration imposing additional hurdles for visas for top tech talent, the Canadian government sees a chance to break that cycle. And its representatives are talking a big game about making the country a wellspring of world-class A.I. companies.

Government officials at the city, provincial, and federal levels made their case for tech investment last week at the ALL IN A.I. conference in Montreal. A cornerstone of the federal government’s plan, announced last month, is to team up with Toronto-based large–language model developer Cohere, invest in it and offer it a ton of government contracts, and thereby create a made-in-Canada ecosystem that will then support smaller, up-and-coming A.I. players.

“We believe that this could be our global Canadian champion, and we won’t let it become a Blackberry or Nortel, no way,” Canada’s industry minister Mélanie Joly told Fortune on the sidelines of ALL IN. “So we will be behind the company. We will promote it, we will push it around the world,” (Blackberry lives on as a cybersecurity company at a tiny fraction of its size when it was a leading maker of mobile devices 20 years ago, and the telecommunications company Nortel has long since gone bankrupt.)

The Canadian government sees an opening to attract more tech talent to the country in the wake of the $100,000 fee being imposed on new special skills H1-B visa applications by the Trump administration. It is also betting on global investors tiring of the many U.S. initiatives that seem to come out of the blue and create uncertainty for corporations. Joly argues that Canada’s calmer climate right now is just what talent, as well as investors, are craving.

“People are looking for stability, and there’s a lot of instability right now,” she said. “What we’re seeing right now is that capital is trying to hedge itself, so a lot of of investors don’t want to be overexposed to certain markets, including the U.S.”

During her closing speech at ALL IN, the minister avoided taking direct swipes at the U.S. Her colleague Evan Solomon, a former news broadcaster hired in May by Canadian Prime Minister Mark Carney to fill the newly created role of minister of Artificial Intelligence and Digital Innovation, even praised the U.S. as a key partner in his speech.

Still, Solomon made clear that the goal was for Canada’s tech sector to be seen as “the A.I. head office, not as the branch plant.” And in her speech, Joly said pointedly that in Canada “we believe in science and we believe in research.”

Can Canada finally have its own real Silicon Valley?

The tariffs-fueled trade war the U.S. waged on Canada earlier this year, along with President Trump’s repeated claims that Canada should become the 51st state, have led to a major chill in relations between the historically friendly and deeply economically intertwined neighbors. They also sparked a kind of existential crisis in Canada, and an outpouring of Canadian patriotism. In that climate, the push by Carney’s government for the country to become less reliant on the U.S. and seek to create most its own tech industry is not unexpected.

Joly and Solomon see this moment as an historic opportunity to turn Canada into an incubator of tech giants. But the country faces quite a slog to achieve that. For one thing, however much money the Canadian government pumps into A.I. ($4.4 billion so far), those funds as well as those from provincial governments and Canadian venture capitalists, pale in comparison to the funding available in the U.S. where the government funds about $3 billion in research a year across agencies. (And U.S. venture capitalists invested some $100 billion of private capital in AI-related start-up in the first half of 2025 alone.)

Toronto, North America’s fifth largest urban area, is only its 8th largest venture capital community, trailing much smaller cities such as Austin, Texas. But a big problem for Canada is brain drain—the propensity for its most promising start-ups to decamp south of the border once they start seeing success. A new study by Toronto venture-capital firm Leaders Fund found that just 32.4% of highly promising Canadian-led startups launched last year were headquartered in Canada.

The funding is plentiful south of the border and so is the skilled labor, drawn by much higher U.S. salaries. “That top talent is really, really hard to keep here on a Canadian salary,” says Kevin Bryan, an Associate Professor at the University of Toronto’s Rotman School of Management, who has argued that efforts to cultivate tech in Canada have not yet yielded “an eco-system.”

Still, at ALL IN, Solomon and Joly’s speeches had the air of a pep rally, encouraging Canadians to come out from under America’s economic shadow, and celebrating the 2,500 or so Canadian A.I. companies.

“I’m here because Canada needs every single one of you,” Solomon told the crowd of 6,000 delegates. “You are Team Canada. And if you’re here from abroad, so are you—because Canada is the place to be on all this.”