News
Reflections on Canada’s 2025 Federal Budget
Nov 6, 2025
On November 4, the Government of Canada released its annual budget, presenting a vision of Canada focused on investing in critical infrastructure and economic sovereignty amid widespread geopolitical and technological disruption.
We’ve evaluated the Budget 2025 with careful attention to measures that will advance the responsible stewardship of emerging technologies such as AI, invest in learners and workers, and safeguard our democracy.
- A Bold, New Idea: The government is betting big on investments to fortify our sovereignty in the face of economic hostility from our biggest ally.
- What We’re Watching: Measures that advance AI and Canada’s digital economy, support learners at all stages, and safeguard our democracy.
- Related Reading: Our recent submission the Canada’s AI consultation, research on public sector AI adoption, commentary on digital sovereignty and a how-to guide for understanding a government budget.
A Bold, New Idea
The government is betting big on investments to fortify our sovereignty in the face of economic hostility from our biggest ally.
But are measures focusing on infrastructure and defence enough to realize Canada’s nation-building ambitions?
What We’re Watching
Advancing AI and Canada’s Digital Economy
The government is reaffirming its commitment towards AI, but are in a holding pattern awaiting feedback on its AI consultation
The government tabled its Budget 2025 days after wrapping up its 30-day “sprint” consultation on a renewed AI strategy (see our submission).
We were pleased to see that the government is taking input seriously by not announcing new programs–yet. In fact, almost 90% of the budget’s direct funding in AI is not net-new. Rather, it draws on $800 billion previously announced for public AI compute infrastructure in the 2024 Fall Economic Statement. A further $25 million will be redirected within Statistics Canada toward an Artificial Intelligence and Technology Measurement Program (TechStat).
On TechStat
We are encouraged to see the government prioritize the creation of much-needed intelligence through TechStat, and are excited to continue and expand our close collaboration with Statistics Canada, Innovation, Science and Economic Development Canada (ISED), and Employment and Social Development Canada (ESDC) to generate insights from their research. However, we are concerned by the lack of new funding and overall cuts to Statistics Canada, particularly with other departmental cuts likely impacting StatsCan’s cost recovery capacity.
Expecting Statistics Canada to do more with less will impact its overall capacity to deliver high-quality, timely, and reliable data that benefits Canadians. Previous reductions in funding, for example, resulted in the discontinuation of key surveys that track AI adoptions such as the Survey of Digital Technology and Internet Use (SDTIU) and the Canadian Internet Use Survey. Access to good, accurate and timely data is essential to making effective policy. We also urge Statistics Canada to collaborate with academic and research organizations to maximize the values that result from new data collection.
On AI Adoption Inside Government
AI adoption requires capacity, yet Canada’s budget does not invest in AI literacy training or skills development for public servants — nor does it offer signals that the public service will hire much-needed technical talent (developers and designers, for example) to bridge the gap, with the notable exception of hiring tech executives as part of a reprofiled Canada Interchange program.
This budget also proposes to cut internal training capacity from the Canada School of Public Service, and there appears to be no dedicated budget allocated for the newly announced Office of Digital Transformation, which will impact its ability to effectively deliver productivity gains across government.
On Growing the Digital Economy
The budget reflects the government’s focus on nation-building through the resource and goods-trade economy, with big bets on major projects in energy, mining and trade infrastructure. Yet, there are important measures for growing the digital economy. We welcome the announced changes to the Scientific Research and Experimental Development (SR&ED) tax incentives. Others include accelerated write-offs for intangible assets like patents and data infrastructure and R&D to spur business investment, support for intellectual property protection and venture capital, funding for Canada’s quantum ecosystem, and plans for clean economy investment and financial services innovation. The government should also be prioritizing strategic digital infrastructure as essential “nation-building” projects for the 21st century economy, to be advanced through the Major Projects Office.
On Canada’s AI Strategy
We await the government’s new AI strategy, and further investments to implement it. While we laud the government’s eagerness to grow Canada’s AI economy, and advance responsible adoption, a key theme of our submission to government called for building public trust through effective AI governance, as well as critical interventions to grow AI literacy and prioritize firms and sectors that face resource challenges to invest appropriately in AI training, such as SMEs, nonprofits, and civil society organizations.
Supporting learners and workers at all stages
Budget 2025 responds to the workforce disruption of today — but no comprehensive strategy to prepare the workforce for tomorrow
The government has made one message clear: Budget 2025 is a response to a changing economic reality, and is intended to set Canada on a path toward trade diversification and sovereignty.
It rightly focuses on supporting trade-impacted workers with significant funds for provincial and workforce-led retraining programs and temporary Employment Insurance (EI) enhancements, and youth facing high levels of unemployment through initiatives like the expansion of Canada Summer Jobs. Yet more consideration must be given to long-term workforce planning and reinforcing and reforming critical safety net programs, like EI, to prepare for disruption that will result from deeper economic realignment and technology.
On AI Literacy and Skills
The digitization of Canada’s economy and mainstreaming of AI technology is almost certain to shift jobs and skills demands. The changing world of work requires intentional planning to ensure that the benefits of AI are felt equitably across our economy, instead of deepening existing divides. This necessitates AI literacy for Canadians at all ages and stages—to prepare them to use AI technologies safely and productively at work, in school and everyday life.
As students are the fastest adopters of tools, like ChatGPT, there is added urgency to develop Canadian frameworks for AI literacy in K-12 schools, with supporting high-quality and adaptable learning materials and teacher training.
On International Talent
We welcome targeted investment to attract top researchers through the research granting councils — an international talent strategy that directly responds to the current geopolitical climate that has dissuaded many workers from pursuing opportunities in the United States.
Yet, cutting in half international student admissions is an alarming and short-sighted policy. International students, especially those pursuing degrees in research institutions, are a vital part of Canada’s academic, talent, and research infrastructure. These proposed cuts damage Canada’s reputation in international education and undermine long-standing efforts to address labour shortages and attract talent.
Safeguarding and Building Democracy
Sovereignty and security are built on democratic foundations
Despite strong language on Canadian sovereignty and defence, Budget 2025 offers no new programming to safeguard our democracy and leaves the future of critical initiatives, such as the Digital Citizen Contribution Program, uncertain.
Despite rising risks facing Canadian democracy, efforts to protect the integrity of our elections and our information ecosystem are entirely missing from Budget 2025. As the tsunami of authoritarian populism, foreign interference and public distrust crashes against democratic institutions worldwide, the government must recognize democratic renewal as both a short-term national security imperative and a long-term competitive advantage for Canada.
On Renewing Democratic Infrastructure
This moment requires a strong Canadian civil society to build and renew democratic infrastructure, platform bold, new ideas, and re-engage Canadians in civic participation. That is why we support new efforts that invest in this work, including the proposal to launch a Canadian Endowment for Democracy.
Democratic infrastructure is an essential component of nation-building, alongside energy and digital infrastructure projects. Canada’s enduring commitment to plurality, strong public institutions and principled innovation equips us to build a fair economy that works for everyone – a key theme of our DemocracyXChange 2026 Summit, taking place in April next year.
In fact, we believe bold action on building democracy will be central to the government’s success in advancing its proposed economic transformation. When democracy weakens, prosperity slips out of reach.