Make Canadian Government Services AI-First

The Goal

Canada should become an AI-first nation. By aggressively integrating AI, the government can supercharge service delivery and become a leader that helps build the Canadian AI ecosystem driving increased productivity and innovation across the Canadian economy. Our targets:

• Cut Government Processing Times by 50% across key services including immigration, benefit delivery, and tax processing.
• Use new AI capabilities to dramatically reduce the use of external consultants to fund our investments in AI and create $10 billion in annual savings.

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Summary 

Canadian scientists such as Geoffrey Hinton, who recently won the Nobel Prize in Physics for his achievements in AI, pioneered the AI revolution. But today, we are failing to adopt our own innovations and risk having the best AI talent leave Canada. 

Our government is a prime example of the ways we have dragged our heels on this technology. Slow and complex procurement processes, reliance on foreign technology, and inefficient spend on external consultancies is holding us back. To regain our lead, we must overhaul how Canada adopts AI. By creating AI-first government services we will improve service delivery, empower the civil service, save money, increase economic productivity, and build a culture of innovation.

Right now, Canadians wait weeks or months for services that existing AI tools could handle in seconds. AI could: 

• Process tax returns at the Canada Revenue Agency (CRA) to identify errors and reduce fraud while eliminating unnecessary audits and delays. 
• Automatically screen Immigration applications at Immigration, Refugees and Citizenship Canada (IRCC), to cut processing times and allow qualified applicants to contribute to Canada’s economy sooner. 
• Manage employment insurance applications faster, ensuring Canadians in need get support without frustrating bureaucratic wait times. 

The list of potential areas where AI adoption could empower the public service is endless*.

By transforming our government to become AI-first we will not only improve service levels but also ensure Canadian AI companies thrive. Canada already develops world-leading AI, but too often, foreign companies win contracts while homegrown innovators struggle to cut through a risk-averse bureaucracy. By prioritizing Canadian AI firms in procurement, we will spark a domestic industry of firms who are specialized in AI in government. These products will be in demand by governments everywhere, creating jobs, increasing innovation, and keeping AI talent and technology in Canada. 

Just as China and the U.S. heavily invest in their domestic AI ecosystems, Canada must do the same to stay globally competitive. Canada led the world with CANDU nuclear technology and successfully sold it internationally – we now have the opportunity to do the same with AI in government. 

To fully seize this opportunity this transformation must start immediately. We can rapidly reform procurement, build world class AI capabilities in-house, and have pilot projects launched in every major agency with full implementation in 6 months.

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Current Problem 

Canada is losing its AI leadership due to slow adoption and bureaucratic inertia.

• AI represents the greatest opportunity to support human flourishing in generations but today Canada is lagging behind. As Sundar Pichai put it “AI is one of the most profound things we're working on as humanity. It's more profound than fire or electricity,”. But Canada is investing half as much as countries like the US, Singapore, and Estonia are spending, proportional to GDP. If we do not catch up, Canada will be left behind in the last century.

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• Canada’s productivity is lagging. Our worker productivity is 30% lower than the U.S.¹, largely because Canadian businesses and government agencies have been slower to invest and adopt advanced technology. We consistently do the equivalent of running a business with typewriters while competitors use high-speed computers.
  
  
• Consultant spending is draining resources. The government spends $15.7 billion annually on professional consultants²—many of whom provide outdated or manual solutions to sort data, manage systems, and prepare reports by hand. This is like using candles when we have electric light available. Since 2017, the government has stated a desire to grow the Canadian AI ecosystem but they have invested less than $5 billion in total³ with only a tiny fraction used for government services. We can rapidly increase investment in the ecosystem and decrease costs by using Canadian-made AI tools rather than outsourcing work to complacent contractors.
  
  
• Government procurement is a bottleneck for adopting Canadian AI. Current procurement processes are characterized by excessive bureaucracy, risk aversion, and a bias towards large, established firms. This creates a significant barrier to entry for Canadian AI startups and SMEs offering cutting-edge solutions.
  
  
• AI is a geostrategic imperative. The race to lead in artificial intelligence is not just about economic opportunity; it is a defining factor in global power competition. As Russian President Vladimir Putin warned, “Whoever becomes the leader in [Artificial Intelligence] will become the ruler of the world.” The United States, China, and the European Union are aggressively funding AI research, defense applications, and domestic ecosystems to maintain their geopolitical standing. AI is essential to defensive preparedness across intelligence, border security, and cyber. It is also an opportunity to raise our defense spending to achieve our NATO targets. If we do not invest in our own AI ecosystem, we risk becoming technologically dependent on foreign powers. If we do, we can meet our obligations to our allies and maintain our sovereignty and strength.

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Real-World Solutions 

Estonia proves that government leadership with advanced technology can transform a country. After seperating from the former Soviet Union, the country made a society-wide commitment to digital transformation, driven by government leadership with a focus on citizen-centric design. Today 100% of government services are available online 24/7. These systems save Estonians over 1,400 years of working time every year⁴. Just the introduction of e-signature system alone amounts to the equivalent of saving ~2% of GDP⁵. 

Today, China and the U.S. are taking leadership positions investing billions in AI-driven governance and defense and using automation to enhance economic growth. Meanwhile, smaller nations like Singapore have agile procurement models that allow government agencies to rapidly adopt AI solutions by accelerating approval timelines, enabling faster implementation to improve public services. If our government takes a leadership position similar to how Estonia did with digitization we can join the nations at the forefront of adopting this new technology. 

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What Needs To Be Done

To establish Canada as an AI-first nation, implement a targeted strategy that ensures AI is integrated across federal agencies, top global AI talent is embedded in the federal government, procurement processes are reformed, and Canadian AI companies are prioritized.

• New Mandates: Ensure every federal agency adopts an AI filter. At every stage they should ask the question how can the speed and quality of a function be improved by AI. This will include automating processes in taxation, immigration, employment and social development as well as  modernizing back-office operations like call centres. 
• Legislative Changes: Update federal procurement laws to fast-track AI adoption, removing outdated regulations that delay implementation and discourage innovation while creating a new process for essential novel technologies that will allow the government to take decisions in a way that is fast and effective. 
• Buy Canadian: To build up the Canadian AI ecosystem ensure that we prioritize AI procurement from Canadian-owned and operated companies, with foreign solutions only considered if no viable Canadian alternative exists.
• New Government Positions: Eliminate wasteful external consultancy spending and redirect funds toward hiring a CTO for each major department. This new role will have a mandate to track process efficiency quantitatively and use AI to improve those metrics. The largest agencies will also hire AI expert teams to drive rapid development and adoption of AI solutions. These roles will be staffed with world-class data scientists, software architects and AI engineers selected with the highest performance and hiring standards and compensated at globally competitive levels. 
• Measuring Success: Track AI-driven improvements using specific metrics, aiming to create 50% faster response times across all major process driven services like immigration, benefit delivery, and taxation services. Target AI-driven cost savings of at least $10 billion annually through reduced reliance on external consultants.
• Accountability and Oversight: Implement quarterly AI progress reports to Parliament and create a public AI performance dashboard looking at both the speed and accuracy of AI enabled processes to ensure transparency and track AI deployment across government services.
• Rapid Implementation Timeline: Pilot projects launched in every major agency with full implementation in 6 months. Based on the success of these first pilots we can move on to a full-scale government-wide deployment.

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*AI Applications

AI is a true general purpose technology and the potential applications are near endless. To test integration and rapidly observe improvements we will lead with proven AI applications that offer high-impact, low-risk deployments. 

For example, we can use AI for tax research and compliance to reduce unnecessary audits and lower dispute rates. In this deployment AI should augment, not replace, human decision-making, particularly in tax disputes. We could roll out AI in a determined and safe manner with a three phase approach:

• Phase 1: Internal CRA research support
• Phase 2: Internal audit workflow enhancement
• Phase 3: External taxpayer guidance tools

Beyond these initial pilots we must reward departments for widespread adoption. To truly become an AI-First country we will need to have a habit of deploying these technologies on a regular basis to constantly improve the quality of government services. To give just some examples of what this could look like, AI can be used to: 

• Streamline immigration application processing
• Modernize call centres for federal agencies to reduce wait times 
• Improve benefit delivery for programs like Employment Insurance (EI), Canada Pension Plan (CPP), Old Age Security (OAS), and child benefits 
• Enhance translation services for official bilingual communication across government 
• Conduct media monitoring for public policy and crisis response 
• Transcribe and analyze proceedings in the House of Commons and Senate 
• Process Access to Information requests more efficiently 
• Enhance surveillance and reconnaissance for national security through AI-powered image and signal analysis
• Automate threat detection and response in military cybersecurity operations
• Optimize procurement and contract management to reduce costs 
• Develop autonomous systems for search and rescue missions in challenging environments
• Strengthen cybersecurity threat detection and response for federal IT systems 
• Improve emergency response coordination through AI-driven risk assessments, optimize transportation and infrastructure planning for federal projects 
• Optimize logistics and supply chain management for the Canadian Armed Forces (CAF)
• Automate the review and approval of grants and funding applications 
• Streamline regulatory compliance checks for industries under federal jurisdiction 
• Enhance border security and customs processing at the Canada Border Services Agency (CBSA)
• And much more…

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What This Means for the Future

An AI-First Canada will be a safer, stronger, more agile country; prepared for a changing world and better able to defend ourselves. By making these changes:

• Canada will become a global leader in AI-driven governance, where Canadians will be able to get answers fast, have their tax returns done in days, and new Canadians will get instant answers about the immigration process. These services will set a model for other nations.
• Our government will save over $10 billion annually through reducing external consulting fees and improving service efficiency. This money can be used to reduce our deficit and provide more services to Canadians. 
• We will accelerate an ecosystem of Canadian AI innovation and commercialization increasing productivity and creating jobs throughout the country.

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Common Questions

• How will the government ensure AI decisions are transparent, ethical, and fair? AI integration comes with real risks around algorithmic bias, privacy concerns, and the unintended consequences of automation. To address this, the new AI teams will be staffed by industry leaders including those recognised as experts on precisely these issues. They will oversee deployment, ensure transparency, and implement clear human oversight protocols to solve these problems practically and pragmatically as we build new systems.
• Won’t AI lead to job losses? AI will reduce the reliance on external contractors and help to provide more efficient services. Research shows that virtually no jobs can be fully automated and AI supplements existing jobs rather than displacing them. By empowering the civil service we will make government workers more productive. By investing in the Canadian AI ecosystem we will create new high-value AI development jobs and ensure a stronger economy overall with more jobs for Canadians.
• Is AI reliable for government services? AI errors will be managed with the same standards as human decision-making, with oversight mechanisms in place. Any new AI process must have the same or lower error rates otherwise it will not be deployed.
• Is a 6-month timeline for full AI deployment realistic? While ambitious, this timeline is designed to drive action. We will begin with pilot projects in select departments, gradually scaling AI integration based on lessons learned. Civil servants will receive comprehensive training, and technical contingency plans will be in place to address challenges.
• How will the government protect against cybersecurity risks in AI systems? AI-driven systems require strong security. The government will invest in robust cybersecurity infrastructure, continuous monitoring, and regular vulnerability assessments to safeguard sensitive data and prevent AI-driven cyber threats.
• What evidence supports the projected $10 billion in annual savings? AI can drastically reduce consultant spending and improve efficiency. These savings will come from the $15.7 billion that is currently spent on external professional services each year

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Conclusion

We can secure Canada’s position as the world’s first AI-first government. This will supercharge government services and save us money while positioning our AI industry to create world-leading solutions. We have done this before with CANDU nuclear technology and we can do it again. We led the world in the initial development of AI technologies. Let's reclaim our position as a leader to help secure prosperity for our country for decades to come.

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