Canada stands at a pivotal moment in its AI journey. New research from Strand Partners, conducted on behalf of AWS Canada, reveals that 650,000 Canadian businesses have embraced artificial intelligence—a 33% increase year-over-year that outpaces the global adoption of the internet. 

With one business adopting AI every three minutes, the momentum is clear. Yet the choices we make today – as policymakers, business leaders and technology partners – will determine whether this momentum translates into broad-based prosperity or a divided economy where only some companies thrive.

The findings from Unlocking Canada’s AI Potential show significant economic benefits: 89% of AI-using companies report revenue growth, averaging a 26% increase tied to AI-enabled improvements, and 73% report significant productivity gains. Optimism is high, with 81% of leaders expecting AI to boost growth this year.

However, to unlock AI’s full potential, Canada must tackle three critical issues: creating a pro-innovation environment that attracts global investment; closing the digital skills gap; and accelerating adoption across sectors through public sector leadership.

Uneven Adoption Risks Sparking a Two-Tier Economy
AI adoption is accelerating, but how organizations use it still varies widely.

Most businesses (65%) remain focused on basic applications like workflow automation, content generation, which deliver value but only incremental gains.

Fewer (20%) are integrating AI across multiple functions, and only 15% are using it to redesign operations and launch new products.

Startups are moving much faster, with 31% leveraging AI for its most advanced uses. Free from legacy systems, they embed AI into their business models from day one and are more confident AI will reshape their industries within five years.

If this gap continues to widen, Canada risks a two-tiered AI economy – one that could undermine long-term competitiveness.

Barriers to Deeper Adoption
Despite rising interest, four barriers continue to slow AI adoption in Canada:

• Skills Gaps – The biggest hurdle is talent: More than half say skills shortages prevent them from adopting or expanding AI, and only 29% feel prepared. Companies expect AI literacy to be critical for 40% of jobs within three years.
• Rising Compliance Costs – Businesses estimate $36 of every $100 in tech spend goes to compliance (higher than many G7 peers) and three-quarters expect those costs to keep rising.
• Regulatory Uncertainty – 56% worry new regulation will hinder innovation, and 46% cite a lack of legal clarity for deploying AI.
• Perceived Costs – Nearly half of respondents cite upfront costs and want clearer ROI—despite 89% of adopters reporting revenue gains averaging 26%.

Together, these barriers risk slowing Canada’s AI momentum unless businesses and policymakers working together to build skills, reduce uncertainty, and accelerate responsible adoption.

What Canadian Businesses Prioritize When Adopting AI
Canadian businesses are being strategic in how they adopt AI, prioritizing choice and flexibility. 

Four in five leaders view access to both Canadian and global AI providers as essential, and two-thirds prefer a hybrid model that blends domestic tools with those built or hosted internationally. They want the freedom to choose the right tool for each task and adjust those choices as needs evolve.

Key Steps to Unlocking Canada’s AI Potential Now
Canada’s momentum is real but scaling it requires coordinated effort. We need policymakers to prioritize four key measures:

• • Strengthen AI and digital skills: More than half of Canadian businesses say skills shortages are limiting progress. Expanding access to flexible, job-aligned training is essential.
  • Turn research strength into commercialization: Canada excels in AI research but must better convert it into scale. Improving funding access and helping innovators reach global markets will ensure Canadian technologies are built and scaled here.
  • Create a predictable, pro-innovation environment: Government policies should support responsible adoption without adding friction that slows innovation or competitiveness.
  • Lead through public sector adoption: 64% of businesses say they are more likely to adopt/expand their AI use when government leads, and 53% of startups say public sector adoption is crucial to their ability to scale. When we modernize services with responsible AI, we build trust, accelerates adoption and improve the services Canadians rely on.

Enhancing Canada’s AI Competitiveness

We’re committed to working with Canadian governments to build a competitive environment and support broad AI adoption. This includes investing approximately $24.8B in building and operating our Montreal and Calgary data centre hubs by 2037—supporting more than 9,300 FTE Canadian jobs annually and adding $43.02 billion to Canada’s GDP.

Since 2017, we’ve trained over 300,000 Canadians in sought-after cloud and AI skills.  To help researchers accelerate discoveries with AI, AWS and the University of Alberta launched the Artificial Intelligence Discovery Place (AIDP). Programs like AWS Activate support with credits, funding and mentorship, helping startups build in Canada and scale globally. Canada’s AI opportunity is time sensitive. The businesses adopting AI today are already seeing measurable results. But to ensure this success extends across our economy, we need policy frameworks that reduce barriers, build skills, and encourage innovation. The foundation is strong. Now is the time to build on it.

Read the full report: Unlocking Canada’s AI Ambitions.