Canada’s advantage for AI: An ecosystem fuelled by talent and innovation

Karicia Quiroz, Research Manager & Anam Elahi, Business Analyst, Invest in Canada

Woman Coding on Computer

We use artificial intelligence (AI) in our daily lives, from receiving Netflix movie recommendations and crafting out searches where Google simply “knows” what we are looking for, to finding solutions to the COVID-19 pandemic. AI is also being used by companies to help them be more efficient, productive, and solve problems, leveraging subsets of AI such as machine learning, deep learning, and natural language processing to create innovative solutions. AI is transforming the way that we live and work. As AI is a rapidly developing space that will impact businesses, industries, and society worldwide, countries will have to quickly adapt to and continuously drive AI developments.  

Canada is a leader in the global AI landscape, recognized internationally for the quality of its research, skilled talent pool, and its contributions to AI innovation. To remain a leader in this constantly evolving landscape, Canada must continue to leverage its current strengths and foster the best conditions for AI companies to easily scale up and for global companies to invest in the industry. 

Canada’s position in the global AI landscape

Canada is globally recognized for its competitive AI business environment that enables companies to thrive and compete. A strong operating environment, innovation ecosystem, and positive investment climate give AI companies the support, tools and resources that they need to grow in Canada. It is no surprise that Canada ranks 4th (out of a study of 54 countries) in the Global AI Index for its global competitiveness in AI implementation, innovation, and investment.    

Within a globally competitive business environment, there are ongoing innovations fuelling the growth of Canada’s AI industry. Canada’s industry is innovating at a faster pace than its international peers, driving further technological developments, and creating future opportunities for new AI companies. For instance, between 2015 and 2018, Canada produced the highest number of AI patents per capita amongst the G7 and China, demonstrating Canada’s relatively higher output of AI innovations. And to support these continuing innovations, there is a significant amount of academic research being done in Canada.  In fact, Canada is recognized as a world-leading AI research hub and is within the top five countries in the world for its production of innovative AI research. Canada’s leading position is also supported by the country’s national AI strategy and talent value proposition. 

What’s happening in Canada’s AI industry

In 2017, Canada became the first country in the world to release a national AI strategy: The Pan-Canadian Artificial Intelligence Strategy. The federal government commissioned $125 million over five years to advance research and innovation in the AI field, develop a skilled talent pool, and enhance thought leadership. The strategy has been instrumental in making Canada a first mover and one of the leading global players in the AI space. Through the strategy, created by global research organization CIFAR, funding has been allocated to three of the largest AI research institutes of Canada—Amii in Edmonton, Alberta, Mila in Montréal, Québec, and Vector Institute in Toronto, Ontario (all located amongst Canada's top AI hubs)—and to another 80 CIFAR Chairs. The goal is to recruit and retain the world’s leading researchers in AI and provide them with long-term, dedicated research funding to support their research programs and help them train the next generation of AI leaders in Canada.  

In addition, the federal government’s Scale AI Supercluster initiative anticipates that it will add more than $16 billion to the Canadian economy and create more than 16,000 jobs over 10 years. The Supercluster is comprised of home-grown and international companies in Canada that are actively accelerating the integration of artificial intelligence across industries. Members of the Supercluster are recognized for their innovation, tech novelty, competitiveness, and market potential.   

Canada has a strong talent value proposition to support the growth of the AI workforce. Canada has the highest educated workforce in the world. Four Canadian cities—Toronto, Vancouver, Ottawa and Montreal—rank amongst the top 20 cities in North America for the availability, concentration, and compensation of tech talentToronto has the highest concentration of AI start-ups in the world, and Montreal has the highest concentration of academic researchers in deep learning. In these cities and others across Canada, companies can find the expert talent that they need to establish, grow and commercialize their AI technologies.  

Emerging Opportunities

Canada’s leadership, global research strengths, and government backing support the current success and innovation of AI companies, which became particularly evident during COVID-19. The pandemic has reinstated the importance of strengthening the Canadian healthcare system and the economy. Canada’s national effort to respond and react in a timely manner to the spread of COVID-19 has demonstrated that artificial intelligence companies in Canada and their tech talent are a powerful source for combatting complex challenges.  

For example, BlueDot, a Toronto-based start-up that uses AI, machine learning, and big data, was able to track and predict the outbreak of the ‘unusual pneumonia’ spreading from Wuhan, China, in December 2019—before COVID-19 was declared a pandemic. BlueDot was able to notify the Canadian government and the private sector about the spread of the infection, alerting them to take immediate action. Another AI global leader, Korbit Technologies (Montreal)—amongst the 100 most promising startups in CB Insights' rankings—has introduced a personalized AI-powered learning tool that helps students learn faster and better through their forced remote learning circumstances. Canada’s AI industry has and will continue to make a positive societal impact, domestically and internationally, backed by the country’s comprehensive public-private AI network, talent, research, and innovation, serving as drivers of future global investment.  

Global Companies’ Perceptions of Canada’s AI Ecosystem

In ICTC’s 2020 AI study, 20 industry experts from global companies in more than 8 countries were asked about their perceptions of Canada in the AI space, and as a possible destination for global investment.   

Most interviewees (95%) knew about Canada’s AI developments, and almost half of all interviewees were aware of the Scale AI Supercluster initiative, illustrating that Canada’s AI efforts are being recognized worldwide. Interviewees were familiar with Canada’s leading AI hubs, including Toronto, Montreal, Edmonton, Vancouver and Ottawa—demonstrating that these cities stand out for their established ecosystems, deep talent pool, educational institutions and research advancements in AI.   

Yoshua Bengio and Geoffrey Hinton, thought leaders in the Canadian AI space, were also recognized by interviewees as key figures to further driving Canada’s AI presence and influence internationally. In addition, an attractive immigration system and skilled workforce were identified as major strengths that Canada offers investors that are looking to expand and grow. In terms of challenges, only two-thirds of interviewees mentioned specific barriers to investing in Canada’s AI industry, which included unclear AI regulation, competition for talent, and lack of scaleup success. 

Investing in Canada’s AI Industry

To date, artificial intelligence has been an important contributor to Canada’s economy and has received interest from investors. In 2019, Canadian AI companies received 57 VC deals and 658 million USD in venture capital, an increase of almost 50% from 2018.  

Canada’s ecosystem includes more than 800 AI companies and 670 AI start-ups. The province of Ontario has the largest number of pure-play AI firms with 361 companies, compared with 131 in Quebec, 103 in British Columbia, and 49 in Alberta. Many international firms and tech giants have chosen Canada to establish new AI research labs. These include: 

  • Ericsson (Sweden): In May 2019, Ericsson chose Montréal, Québec as the location to install its new global artificial intelligence accelerator to focus on innovative R&D work in cutting-edge AI and automation. 
  • Facebook (US): In September 2018, Facebook announced the expansion of its Montréal, Québec AI lab, doubling its researchers, with the goal to benefit from the city’s “academic AI community, the ecosystem of start-ups and the promising government policies to encourage AI research.” 
  • Fujitsu (Japan): In November 2018, Fujitsu founded a new subsidiary in Vancouver, British Columbia, Fujitsu Intelligence Technology, with the objective of hiring local talent to develop AI products and services. 
  • Google DeepMind (US): In July 2017, DeepMind announced its first international AI research office in Edmonton, Alberta in partnership with the University of Alberta. 
  • HSBC (UK): In May 2019, HSBC opened its Global Data & Innovation Lab in Toronto, Ontario, aiming to employ over 50 people in AI-related roles. 
  • Microsoft Research (US): In June 2019, Microsoft partnered with the University of Waterloo’s Artificial Intelligence Institute (Waterloo.ai) to expand its research capabilities. 
  • Samsung (South Korea): In 2018, Samsung announced the opening of a research centre in Toronto, Ontario for the development of AI technologies. 
  • Uber (US): In 2018, Uber announced an investment of $200 million in a new engineering hub in Toronto, Ontario, to benefit from the city's “terrific engineering talent base.” 
  • Zesty.ai (US): In February 2020, Zesty.ai announced the opening of an AI centre in Montréal, Québec. The new lab will be focused on research and developments of AI technologies in the insurance industry.  

The future of AI in Canada

With the constantly evolving nature of the technology industry, innovative new entrants and investors, Canada must remain agile in the future to sustain its position as a first mover in the global artificial intelligence industry. Canada certainly has a unique combination of public investment, private capital, research capacity, and tech talent to support the success and growth of its AI ecosystem, but other countries around the world have committed to strengthening their AI industries as well

Moving forward, it will be important for Canada to develop and maintain a world-class AI ecosystem, which enables its research strengths, tech talent pool and innovative companies to capitalize on their current position and continue leading globally through the AI-driven world. To remain competitive, global and local players in Canada will need to work together to further expand research capacity, and develop and implement AI responsibly. And this presents a tremendous opportunity for investment. 

If you are a global investor looking to invest in Canada, contact us to discuss your artificial intelligence project.