Canada’s recent debate over digital sovereignty has moved from theory to urgency. The proximate cause is not abstract regulation or a white paper from Ottawa. It is the unexpected reality that access to advanced AI systems may be shaped outside of Canada’s control. Antropic said on Jun 12th had been ordered by the US government to suspend access to it Fable 5 and Mythos 5 models to foreign nationals, a move that led to a broader shutdown for all customers while the company came into compliance. That episode, whether temporary or not, exposed a strategic vulnerability for countries that depend on foreign AI infrastructure, foreign cloud providers and foreign policy decisions on tools that are becoming central to economic life.
That’s the background to a new report from the Blockchain Research Institute, Rebuilding Canada for the New Technology Orderby Don Tapscott and Alex Tapscott. The report argues that Canada is facing two simultaneous upheavals: a fractured geopolitical environment and the rise of artificial intelligence as a general-purpose technology that is reshaping state productivity, sovereignty and capacity. Its main claim is straightforward: Canada cannot assume that intelligence, computing and digital infrastructure will remain abundant, neutral and globally accessible. The country should design for resilience, not for convenience.
This framing is sharper than the usual Canadian rhetoric of innovation, and rightly so. For years, Canada has been comfortable celebrating strengths in AI research while underperforming in commercialization and scale. The BRI report identifies five priorities: sovereign digital infrastructure, stronger pathways to build globally competitive Canadian firms, AI-led productivity gains, modernizing defenses for algorithmic conflict, and a renewed social contract for work, identity and democratic sustainability. Taken together, these are less a shopping list than a warning that the old model – great universities, modest capital and dependence on American platforms no longer seems adequate.
Designing the AI strategy
There is empirical support for concern over productivity. Statistics Canada reported that 12.2 percent of Canadian firms used AI to produce goods or provide services in 2025, double last year, with another 14.5 percent planning adoption over the next 12 months. However, the same analysis sets this against Canada’s long-term productivity weakness, linked to weak business investment, slowing R&D and delayed development of intangible assets. Bank of Canada has also argued that AI can materially improve productivity, wages and investment – but only if widespread adoption and complementary skills are built. Canada’s challenge is not to invent AI; it’s injecting it into the entire economy.
This is where the report’s call for sovereign infrastructure deserves serious attention. Ottawa has already moved in this direction with Canadian Sovereign AI Computing Strategywhich is built around public and commercial computing capacity, an AI computing challenge and new supercomputing infrastructure. The federal government says the strategy aims to keep Canadian data and intellectual property in Canadian hands while giving domestic researchers and firms access to the computing they need. This is not techno-nationalism for its own sake. It is recognized that the computer has become a strategic resource, closer to energy or telecommunications than to the usual procurement of software.
Canadian firms lead the way
A real-world Canadian example already exists. In 2025, TELUS opened what it described as Canada’s The first fully sovereign AI factory in Rimouski, Quebec: a Canadian-controlled facility designed to hold data within national borders and aimed at supporting Canadian businesses, researchers and public institutions with domestic AI computing. The CBC later reported that sovereign data centers have become a focal point of Ottawa’s broader AI infrastructure push, with policymakers increasingly distinguishing between infrastructure simply located in Canada and infrastructure currently controlled here. This distinction is important. A server in Canada is not the same as sovereignty if the governance, commercial leverage or legal exposure resides elsewhere.
based in Toronto time provides one of the clearest signs of maturity. Focused on large enterprise-level language models, the company has built a global customer base while pursuing a distinctly different strategy from consumer-facing AI firms.
Infrastructure, however, is only half the story. Canada also needs firms that can convert research excellence into sustainable economic value. Here, Toronto-based Cohere is one of the clearest examples of what success can look like. CNBC reported as of February, Cohere had achieved approximately $240 million in annual recurring revenue, exceeded its growth target, and climbed to an estimated valuation of about $7 billion. This matters because it shows that Canada can produce AI companies of global relevance in enterprise markets, not just academic prestige. The BRI report is correct to focus on commercialization pathways and capital allocation. Without them, Canada will continue to nurture the best talent only to see the biggest profits captured elsewhere.
The defensive pillar of the report may strike some readers as more speculative, but that would be a mistake. The same episode involving limited access to border models shows that advanced artificial intelligence is now intertwined with national security, export controls and cyber capability. Anthropic itself said the US directive was linked to concerns about bypassing safeguards in a powerful model. Once intelligence becomes operational infrastructure, states no longer treat it as a consumer-neutral service. Therefore, Canada needs to think beyond startup policies and ask tougher questions about cyber resilience, autonomous systems, procurement and the role of indigenous technology in strategic sectors.
The element of the social contract is equally important, although it is often treated in vague terms. Canada doesn’t just need more AI; there is a need for institutions that extend the benefits. Statistics Canada the work shows that firms with cloud capability, data analytics, robotics, R&D and ICT training are more likely to adopt AI effectively. This suggests that the real dividing line won’t simply be between firms that buy AI and those that don’t. It will be between organizations with the managerial depth, worker training and digital infrastructure to make AI productive, and those that fall behind as the technology spreads. Canada’s policy response must bridge that gap or risk deepening regional and sectoral inequality.
If a decision in Washington could disrupt access to advanced AI for Canadian users overnight, then digital addiction is no longer a theoretical concern. Canada already has parts of the answer: sovereign computing planning, data center investments and upstart firms like Cohere. What remains uncertain is whether these pieces will be assembled into a coherent national strategy before addiction turns into permanent disadvantage.
