Experts appearing before the House of Commons Standing Committee on Industry and Technology highlighted Canada's strong reputation in artificial intelligence research. However, they warned that many Canadian businesses have been slow to adopt AI technologies, limiting the country's ability to convert research excellence into economic growth and productivity gains.
Experts Detail Severe Structural Barriers Preventing Local Companies From Upgrading Corporate Tech Stacks
OTTAWA — Canada’s heavy structural reliance on small and medium-sized enterprises is creating a critical barrier to national artificial intelligence adoption, threatening the country’s long-term economic competitiveness, industry experts told a parliamentary committee on May 7, 2026.
Appearing before the House of Commons Standing Committee on Industry and Technology, policy analysts and technology executives warned that while the nation produces top-tier AI researchers, its broader business ecosystem lacks the scale and technical capacity to adopt these tools at an industrial level.
Laurent Carbonneau, vice-president of policy and advocacy at the Council of Canadian Innovators, testified that Canada’s economic framework inherently limits technology scaling and skill development.
“Canada’s economy is structurally reliant on small and medium-sized businesses that struggle to grow into larger entities,” Carbonneau explained. He noted that the domestic regulatory and economic landscape often fails to provide local firms with the competitive advantages needed to expand inside the country.
“When we ask our companies why they are in Canada, they almost never say this is the best place for them to grow their businesses,” Carbonneau told MPs. “They care about the country and want to stay here… At CCI, we want to get where people say this is the best place to do it. That’s a policy question, not a culture question.”
The committee heard that this adoption logjam is particularly acute in traditional industrial sectors, where many Canadian firms remain generations behind in basic digital infrastructure.
Kulbir Colin Singh Dhillon, executive director of the Centre for Designing Change, testified that Canadian manufacturing operations have historically struggled to adapt basic sensory technologies and internet-of-things devices. Without these foundational digital layers, upskilling the current workforce to utilize advanced, physical AI applications becomes an uphill battle.
“Canada does not lack ambition in Al; we lack infrastructure to execute it,” Dhillon stated, emphasizing that a coordinated national policy framework is essential to accelerate technology adaptation across strategic industries.
Daniel Perry, director of federal affairs at the Council of Canadian Innovators, added that domestic delays in deploying a clear national strategy are compounding the competitiveness crisis, preventing local firms from scaling fast enough to anchor and retain their top tech talent.
“The continued delay in releasing Canada’s Al strategy is not neutral,” Perry testified. “It is actually putting Canadian firms further and further behind in a race where speed, scale and early market positioning determine long-term winners.”
The witnesses concluded by urging parliamentarians to shift focus from merely funding upstream academic research to actively incentivizing downstream commercial adoption and workforce upskilling. They warned that without a massive push to help domestic enterprises adopt local tech, Canada’s highly skilled workforce will continue to migrate to more tech-forward global markets.
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