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The countries who benefit the most from AI are not necessarily those who invent it, but those that are able to diffuse it across their economies, workforces, and SMEs. Canada currently ranks 44 out of 47 countries in AI training and literacy, according to the KPMG-University of Melbourne global trust study. Through the new strategy, Canada seeks to change that.

The strategy is organized around six pillars:

• Protecting Canadians and safeguarding democracy;
• Ensuring AI empowers Canadians
• Powering shared prosperity;
• Building the Canadian sovereign AI foundation; and
• Building and scaling Canadian AI champions.

It recognizes Canada’s AI adoption rate of just 12 per cent and aims to increase it to 60 per cent by 2034, bringing the country more in line with India, Singapore, and the UAE where adoption is at or above 50 per cent. To do this, the government aims to focus on AI literacy through a National AI Literacy Initiative, targeting kindergarten – grade 12 students, teachers, and entry-level post-secondary students.

The strategy focuses on creating jobs through AI and upskilling the workforce. It aims to create 250,000 jobs by 2031, and 90,000 AI-related jobs and workplace opportunities for young Canadians. It commits to scaling employer-led upskilling, with post-secondary institutions positioned as applied AI delivery partners. It looks to support workers at all stages of their careers, from equipping students with the skills needed to enter the workforce, mid-career workers with pathways and reskilling opportunities as roles evolve, and training for frontline workers.

To support SMEs, the strategy commits to financing programs that will help Canadian businesses scale. It aims to create workforce alliances in key sectors such as healthcare, energy, and manufacturing to identify skills gaps and later creating training programs for workers to address those needs.

Canada also commits to deploying an open-source AI model, developed in the public interest with like-minded countries, local AI institutes, researchers, civil society, industry, and global open-source organizations. Open-source AI accelerates adoption by offering more affordable and easier to deploy options, thereby lowering discovery and use barriers. It will seek to limit dependency and vendor lock-in, while strengthening transparency.

To make adoption possible, Canada is focusing on trust and safety. To do this, the government commits to putting forward legislation to modernize its consumer privacy laws and introducing online safety laws in alignment with international standards. Lastly, the Canadian government seeks to lead by example by transforming public service delivery with AI and acting as an early adopter.

By prioritizing AI diffusion, scaling the workforce, and investing in SMEs, Canada will catch up to those leading in adoption and realize the economic benefits of AI across its economy.

Find Canada’s national AI strategy here.

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Through the declaration, the ministers reaffirmed their support for an open and innovation-friendly digital economy that supports AI openness, adoption, and trust-based data governance. The declaration commits to advancing secure, responsible, and human-centric AI while improving cooperation on AI risk assessment, synthetic content detection, and international reporting frameworks.

The ministers also emphasized AI’s economic potential, particularly for small and medium-sized enterprises (SMEs), and announced initiatives such as a G7 SME AI Readiness Tool and a shared vision on AI openness to help businesses adopt AI technologies, improve productivity, and develop workforce skills.

Under its pillar of boosting AI adoption for economic growth, the declaration emphasizes that the potential of AI to drive productivity, competitiveness, and economic growth relies on adoption. It notes that adoption rates remain uneven, particularly among micro, small and medium-sized enterprises (MSMEs). To address this, G7 economies, in collaboration with the OECD and building on prior presidencies, are prioritizing AI openness and MSME digital readiness. By establishing clear terminology and principles around AI openness, the initiative aims to enhance trust, accelerate innovation, and promote access to open-source solutions while managing potential risks.

To help small and medium-sized businesses overcome adoption barriers, G7 countries will be introducing the G7 SME AI Readiness Tool on the G7 AI Training Hub. It will aim to provide actionable support to assess digital maturity, foster AI literacy, and empower the MSME workforce for future growth.

As AI reshapes the global economy, the declaration recognizes that the economic potential of AI depends upon wide-spread adoption across workforces, businesses, and the public sector. Find the full declaration here.

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On May 20, 2026, in Washington, DC, the AI Adoption Initiative hosted a happy hour for industry leaders and policy makers to reflect on key lessons from these events. As countries work to capture the economic opportunities presented by artificial intelligence, there is a growing need for policies that can help accelerate the adoption of productivity-enhancing AI across the private and public sector. We look forward to bringing industry, government, and civil society leaders together from across the world as we continue this conversation at future AIAI events.

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This year’s survey introduced an expanded assessment of AI integration using the OECD G7 AI Taxonomy developed under Canada’s 2025 G7 presidency, alongside analysis of digital maturity, cybersecurity, sustainability tools, financial technology, employee well-being, and government support.

Key findings from this year’s report include:

• 61 per cent of SMEs now use at least one AI-enabled application;
• 76 per cent of AI-using SMEs are “AI novices”, relying on off‑the‑shelf tools used for isolated tasks;
• 22 per cent have experienced a digital security breach; and
• 65 per cent of non-beneficiaries are unaware of available government support.

While AI adoption is widespread, the report finds its use is shallow and concentrated in basic applications. 61 per cent of surveyed SMEs reported using AI, with the vast majority relying on basic off-the-shelf tools for isolated tasks. Of those using AI, 70 per cent use the technology for marketing content, 56 per cent use it for drafting documents, 46 per cent use it for idea generation, and 34 per cent use it for translation or language support.

Only 3.6 per cent were found to be deploying customised or agentic AI enterprise-wide. 21 per cent report significant or transformational impact, though evidence from Japan shows that broader organisational deployment increases the likelihood of transformational outcomes, rising from 2 per cent for isolated use to 23 per cent for enterprise-wide deployment.

The report found digital maturity among those surveyed to be uneven. One in five firms remain at a basic digital stage with only 49 per cent having reached advanced integration. The firm-size gap in AI adoption widened to 35 percentage points between small and large firms in 2025, up from 23 points in 2023, suggesting larger businesses are accelerating faster.

Despite 60 per cent of firms having a formalised digitalisation strategy, the report found most rely on informal channels such as internet searches and personal networks to fill skills gaps. Only 21 per cent use generative AI to address skills needs, citing a lack of time for training and maintenance costs being the top barriers to adoption.

The survey found the gap between digital exposure and security readiness to be a growing concern that many SMEs say deters further digitalisation. Nearly half of SMEs have no or only minimal cybersecurity measures. Secure passwords and two-factor authentication at the most common protections, with less than 13 per cent conducting regular access reviews and 7 per cent engage an external expert annually. These findings come as AI assisted phishing accounted for over 80 per cent of social-engineering activity in 2025.

While public digitalisation programmes exist, 65 per cent of respondents reported being unaware of government support. The support that does exist is primarily financial, despite 24 per cent of SMEs calling for affordable training options.

The 2026 D4SME Survey showed that while AI uptake among SMEs is rising, its use remains surface-level. The policy challenge ahead is not to drive adoption alone, but to ensure AI integration within SMEs moves beyond isolated tools and into the core of how businesses operate. Find the full 2026 OECD D4SME Survey here.

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The report found that 98 per cent of Canada’s financial sector occupations are exposed to AI technologies, much higher than the national average where 56 per cent of the total workforce is exposed to the technology. The report examines which roles in the sector are likely to be augmented by AI versus those at risk of replacement. It finds senior management positions are more likely to be supported by the technology, while a much larger share of jobs, particularly in administration and customer service, face a higher likelihood of being replaced.

While generative AI in the financial sector poses opportunities for augmentation and overall productivity, the report emphasizes that the technology is not well suited for core financial tasks due to risks of inaccuracy. For example, conducting financial analyses, ensuring regulatory compliance, tax calculations, examining financial records, and more, where precision is required and small errors can have significant consequences. AI is not currently well suited to support in these tasks due to reliability concerns.

AI is found to be most effective in areas such as customer service, communications, and routine business support. Based on real-world usage data, AI is increasingly being used for answering customer questions, drafting materials, and internal support rather than for financial analysis.

The report recommends a cautious, targeted approach to adoption, prioritizing low-risk tasks while maintaining strong human oversight, data privacy protections, and regulatory compliance. Adoption should focus on areas where companies can safely improve productivity without introducing significant risk, such as front-line customer service interactions, drafting communications, and summarizing information, rather than core financial activities that require complete accuracy and numeracy.

As companies undergo AI adoption, strong data privacy protections must be upheld, ensuring compliance with regulatory standards and establishing clear accountability for errors or misleading outputs. It also calls for ongoing human oversight, including quality monitoring and safeguards to step in when AI systems fail. Financial institutions are encouraged to avoid overreliance on AI by continuing to develop employee skills and judgment.

Ultimately, generative AI is expected to deliver incremental productivity gains rather than transformative change, with success depending on responsible implementation and workforce adaptation. Read the full Banking on AI full report the Toronto Metropolitan University here.

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It outlines Canada’s AI strengths into economic results, it requires a sharper focus on adoption and diffusion: expanding access to data and compute, building AI literacy and complementary skills, and reducing the practical barriers that firms face when integrating AI into day-to-day operations.

AIAI looks forward to continuing to work with partners across policy, industry, and civil society to ensure Canada and the world’s AI moment translates into broad-based productivity gains.

AIAI’s report AI, Everywhere, All At Once authored by Marc-Etienne Ouimette, Ed Teather, and Kevin Allison, partners of the AI Adoption Initiative, was developed as part of AIAI’s work in helping organizations turn AI investment into productivity gains.

The C.D. Howe Institute is an independent, non-partisan public policy think tank based in Toronto that focuses on economic and social policy issues in Canada. Its research is national in scope, and it is widely regarded as a leading source of evidence-based analysis for governments, businesses, and civil society.

Find the full report here.

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Canada’s AI adoption rate sits at just 12 per cent, trailing far behind countries like India, Singapore, and the UAE, where adoption is at or above 50 per cent. To close the gap, AIAI recommends Canada’s strategy focus on five key priorities:

First, invest in applied AI skills. Productivity gains depend on workers across sectors combining domain expertise with accessible AI tools. Canada needs stronger applied training pathways, particularly for SMEs, alongside a strategy that supports both advanced researchers and an AI-ready workforce capable of deploying AI in real-world settings.

Second, the strategy should emphasize supporting adoption through applied research by ensuring access to state-of-the-art infrastructure, incentivising cross-disciplinary R&D aligned with industry strengths, and enabling access to domain-specific datasets. The government should prioritize targeted investments in digital infrastructure, expand industry access, and reduce regulatory barriers to innovation and adoption.

Third, the Canadian government should continue to lead through public sector AI adoption, using strategic procurement, clear departmental roadmaps, and leadership to improve service delivery and stimulate private-sector demand.

Fourth, Canada should modernize and expand incentive frameworks to support applied AI, focusing on investments in fine-tuning, integration, and deployment, and expanding programs to facilitate adoption across SMEs, academic institutions, and public and private sector entities.

Finally, Canada should pursue targeted, interoperable regulation that enables adoption through regulatory clarity, alignment with international standards, and sector-specific approaches for SMEs.

The economic impact of AI depends on diffusion. If the Canadian government prioritizes adoption in its AI strategy, it will translate the country’s AI leadership into productivity growth, better public services, and shared economic prosperity.

Find the full article from AIAI co-founder, Nicole Foster, here.

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