AI for All: health, data, innovation, and capital

This bulletin is part of a series about AI for All. For more in the series, read our previous publication.

The federal government’s National Artificial Intelligence Strategy: AI for All (the Strategy) made one thing clear: Canada is behind on artificial intelligence (AI) adoption, but has the talent, tools, and structure to catch up and seize the opportunities that this age of innovation has to offer. The Strategy sets out the federal government’s plans for bolstering AI investment and innovation, including through a list of dedicated measures intended to support Canada’s start-up ecosystem. The Strategy identifies the health sector as a key vector for Canada’s future AI success.

What you need to know

• The Strategy proposes to concentrate investment in Canada’s health and life sciences sector, building on Canada’s key strengths in these fields.
• The Strategy proposes a series of investments and initiatives to keep AI talent and capital in Canada, including establishing a $500 million Canadian Tech Growth Fund, providing SMEs with greater resources (such as access to sovereign compute and resources to protect intellectual property) and stimulating private sector investment in venture capital.
• While a promising start, it remains to be seen whether these key areas of the Strategy have the intended effects of building public trust in AI and growing Canada’s startup ecosystem.

A keen focus on healthcare

In its list of priority areas for the government’s investment in Canada’s AI ecosystem, the Strategy proposes to first concentrate on Canada’s health and life sciences space, citing our country’s universal healthcare system, strong research institutions, and fast-growing life sciences sector as foundational strengths.

The inaugural AI Missions Program involves a $200 million federal commitment to healthcare and promises to deliver targeted, high-impact projects to specific healthcare sectors. The initial healthcare mission seeks to expand access to primary care, advance upstream care, reduce ER wait times, and alleviate administrative burdens on healthcare professionals.

Another area of targeted investment lies at the intersection of healthcare and data. The Strategy commits $100 million to launching a Health Sector Data Space in partnership with the Canadian Institute for Health Information to build out and standardize datasets to bolster healthcare research. Similarly, the Strategy commits $100 million to expand VITAL, a Canadian health data platform connecting clinical data from hospitals across the country to support research and accelerate care.

The rationale for the government’s focus on healthcare is plainly laid out: Canada should leverage its existing strengths to emerge as a global leader. The significant data available within Canada’s universal public healthcare system can make Canada a leader in the adoption of technology that is dependent on available and accurate data. However, the Strategy emphasizes that this data must be secure, private, and standardized to ensure Canadians’ sensitive health data is properly protected before enabling any kind of widescale innovation.

Less explicit in the Strategy—though likely part of the government’s rationale—lies in the Strategy’s overarching emphasis on building trust in AI. Using AI for a public good, for purposes that may address oft-held grievances with our healthcare system (such as long ER wait times), may aid in building public trust in the use of these systems.

More money, more innovation, more Canadian?

The Strategy acknowledges a long-held view within Canada’s startup ecosystem: that although Canadian research may lay the groundwork for innovative development, founders often flock to the US to gain access to the capital they need to scale up and commercialize. While the Strategy highlights a few key Canadian successes, it acknowledges that broader success will depend on increased investment and greater emphasis on developing a stronger Canadian venture capital ecosystem.

In addition to leveraging its previous $1.75 billion Budget 2025 commitment to stimulating private sector investment in venture capital, the Strategy commits to a $500 million Canadian Tech Growth Fund that would provide growth capital and investment to early-stage AI companies and enable the government to take equity stakes. The Strategy also suggests that the federal government won’t just be an investor: it will also be a “strategic anchor customer” for domestic scaleups.

For founders, the Strategy commits to providing small and medium enterprises (SMEs) with access to affordable sovereign compute through the Compute Access Fund, and will leverage $159 million Elevate IP and IP Assist commitments to support SMEs in protecting and commercializing their intellectual property. The Strategy further focuses on commercialization through a new $130 million commitment for National AI Institutions.

For investors, the Strategy suggests the Department of Finance will work with experts to explore mechanisms for Canadians to reinvest gains from successful technology startups into new startups.  

Looking forward

These commitments signal a start at implementing what appears to be a key focus for the federal government: investing in talent early so that innovation can thrive in Canada. The question remains—is it enough? Investors are likely interested in the government’s commitment to discussions on reinvesting realized gains, but tax treatment generally is a large reason why capital may prefer other jurisdictions over Canada. Founders are likely intrigued by the government’s commitment to injecting capital into the space, but the rate at which AI companies raise and burn through capital means this commitment needs to be serious and sustained to keep up with the pace of innovation.

Canadian founders, healthcare practitioners and providers, and investors should keep an eye on the implementation of the Strategy and other developments in this space.