The Cautious Giant: Canada Pioneered the AI Revolution. Why Are We Now Watching From the Sidelines?

Canada, as a nation, has a deep-seated cultural aversion to risk. With a long history of prioritizing stability over disruption, a new and grave problem has emerged for Canadian businesses and their leaders: a growing failure to bridge the gap between brilliant research and the bold commercialization necessary to not only thrive in today’s challenging economy, but to survive the rapidly changing technological landscape.

This failure to adapt has conspired to leave Canada — an AI pioneer — dangerously behind in the global race for AI adoption. The question is no longer just why has Canada been so cautiously slow, but what will be the cost of our inaction?

In the quiet, climate-controlled labs of Toronto and Montreal, Canadian researchers architected the very foundations of the modern AI revolution. It was here that the godfathers of deep learning, Geoffrey Hinton and Yoshua Bengio, forged the intellectual keys that would unlock a new era of economic and technological transformation. In this sense, Canada, by all rights, should be at the epicentre of the AI boom, a global leader not just in theory, but in application.

Instead, as the world careens into an age of AI-driven change, Canada is standing largely still; watching from the sidelines while others reap the benefits from the groundwork they laid.

The data paints a stark picture of a nation on the verge of a self-inflicted productivity crisis. A recent report from the Macdonald-Laurier Institute reveals that while Canadian GenAI users see transformative efficiency gains—reporting average time savings of 73.4 percent on AI-enhanced tasks—the country as a whole is failing to capitalize on this potential.

One alarming finding is the adoption chasm between Canada and its largest trading partner. According to the report, only about one in five (21.2 percent) of Canadian workers have integrated AI tools into their professional lives.

The United States, in contrast, has surged ahead, into a second wave of adoption. Nearly one in two (45.6 percent) professionals are using GenAI in their workflows. This gap represents a widening productivity chasm that could compound over time, as American workers become vastly more efficient than their Canadian competitors.

Canadian businesses remain tentative, while American companies train entire divisions in prompt engineering, text generation, and AI-assisted coding. Meanwhile, a concerning number of Canadian firms have yet to issue their first internal AI policy.

The authors suggest that factors like firm size and wealth may play a role, as "larger, richer firms in the US can more easily invest in Generative AI subscriptions than poorer and smaller Canadian firms." However, they conclude this is "no excuse not to invest in productivity-enhancing technology."

This hesitation is what we at Bold New Edge see as an “imagination failure.” Leaders who use AI dozens of times a day on their personal devices often struggle to envision its transformative application within their own organizations. This deficit of imagination is reinforced by a corporate culture that habitually rewards safe, incremental gains over transformative—but mistakenly risky—leaps.

The Ghost of Revolutions Past

In an attempt to understand why Canadian business leaders aren't just failing to leap, but are failing to even see the opportunity, one must look deeper—into the nation's cultural DNA, its historical precedents, and the structure of its economic incentives.

Historically, Canada's relationship with transformative technological change has been one of cautious, often late, adaptation rather than bold implementation. Canada’s identity was shaped by a counter-revolutionary impulse: a preference for order, good government, and institutional stability.

During the first Industrial Revolution, Canada’s development was methodical. We focused on building the foundational infrastructure—canals, railways—necessary for a resource-based economy. A similarly slow and cautious pattern repeated with the emergence of the internet. While Silicon Valley was fostering a culture of "move fast and break things," Canadian policy focused on ensuring equitable access and building regulatory bodies.

As 2025 nears its end, it is abundantly clear that AI is not only transforming the world, but rapidly. The slow, careful Canadian pace in manufacturing and industry has never been so out of step as it is now.

This cultural predisposition is starkly reflected in our economic structure. Canada is caught in what BDO Canada calls a “productivity paradox,” where despite a highly educated workforce and significant talent, the country lags in innovation and growth.

This isn't a new trend; it's a chronic condition. For instance, in 2021, Canadian investment in information and communication technology (ICT) was only 2.5 percent of GDP, significantly trailing the 3.7 percent invested by the United States.

This underinvestment has direct consequences for technological adoption. Among G7 countries, Canada has the second-lowest AI adoption rate at just 22 percent. The urgency of this situation was captured by Carolyn Rogers, Senior Deputy Governor of the Bank of Canada, who stated, “You've seen those signs that say, 'In emergency, break glass.' Well, it's time to break the glass.” 

While statistics reveal Canada‘s productivity is falling far behind, it must be acknowledged that the reasons for this hesitation and complacency are complex. Beyond the cultural and leadership challenges, many Canadian firms face high costs associated with initial AI implementation, a persistent shortage of specialized and accessible talent capable of leading these projects, and a state of poor data readiness, leaving them without the clean, organized data required to effectively train and deploy AI models. These factors create a powerful inertia, reinforcing a cautious "wait-and-see" approach.

The Paradox of Potential and the Courage Deficit

There is an interesting paradox to Canadian innovation: we are brilliant at generating ideas but chronically unskilled at commercializing them at scale. Our universities produce world-class research, but a gravitational pull toward the larger, more dynamic U.S. market often means our best ideas, and our best talent, end up elsewhere.

For the modern boardroom, this crisis is a potent cocktail of cultural caution and individual fear that paralyzes decision-making.

Avi Goldfarb — economist, Rotman Chair in Artificial Intelligence and Healthcare at the University of Toronto, and co-author of Prediction Machines and Power and Prediction — states in a Canadian Chamber of Commerce publication, “AI isn’t magic, it’s prediction and that prediction lowers the cost of decision-making across sectors. It’s not about replacing people. It’s about improving how we make decisions.”

He went on to add, “Companies tell us, ‘We believe AI matters, but we don’t know what to do with it.’ That delay is costly. Once someone else figures it out, they’ll scale fast and take your customers.”

Bridging the Imagination Gap

It is precisely this combination of an imagination deficit and professional fear that spurred our direct response at Bold New Edge. Recognizing the chasm between Canada's untapped AI potential and its lack of application, we spearheaded the AI for Decision Makers program.

We created this program in collaboration with Adrián González Sánchez, world-renowned Senior Cloud, Data & AI Specialist at Microsoft, industry lead at the Spanish Observatory of Ethical AI (OdiseIA), and Concordia University educator.

Our initiative is engineered to directly address the hurdles holding businesses back. Its mission is to firmly bridge the gap from theory to practice, creating a tangible opportunity for organizations to de-risk AI implementation.

By connecting leaders with Canada's top AI minds, the program helps them move from a state of cautious inaction to one of strategic confidence, often leveraging government incentives to mitigate the financial risk, and in many cases completely subsidizing the cost.

The Trillion-Dollar Question: Why Now?

This leaves the most perplexing question. With government R&D incentives like SR&ED and IRAP available to remove any financial risk, why isn't every CEO in the country racing to implement AI into their business?

The answer may be the most Canadian of all: a deep-seated skepticism toward government programs perceived as complex, and a business culture that is often more focused on short-term cost management over long-term growth.

Many leaders see programs like SR&ED as an administrative burden to be managed by accountants for past activities, and not as a strategic tool to fund their future.

This is the final, frustrating hurdle. The technology is mature, programs exist to de-risk the journey and guide the vision, and financial risks can be lessened. Yet it will require a generation of leaders willing to break with a long and storied history of caution. They must recognize that in the exponential age of AI, the greatest risk is not in taking bold action, but in standing still while competitors harness AI and leap far ahead. 

From Caution to Courage

While the hurdles laid out are real, they are not insurmountable. This is not a story of failure, but of potential. The Canadian tendency toward caution can be seen as an advantage. In an era where the world is grappling with the rapid deployment of AI, Canadians are predisposed to thoughtful, deliberate action.

The goal should not be merely to adopt AI, but to build systems that are not only efficient but also equitable and safe. Our legacy of innovation is not a proud history to look back on, but as a launchpad for our future ahead.

At Bold New Edge we understand the urgency not only for Canadian companies to close the growing AI divide, but to provide them with real solutions. There’s pressure to justify ROI, personal risk of championing a new technology, and the challenge of getting organizational buy-in.

That’s why our AI Adoption Program starts by building a strategic mindset to first close that 'imagination gap'. Quickly, we move from theory to practice, guiding you to build a tangible, investment-ready asset for your business. At the end of the program, you come away with a functional prototype. Our entire mission is to empower Canadian companies and ensure their organizations are firmly on the side of success.

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Works Cited

Abdou, Marwa. AI Can Strengthen Canada’s Economy — If We Let It. 26 06 2025.

BDO. “canada's-productivity-paradox.” https://www.bdo.ca/insights/canada-s-productivity-paradox, 24 02 2025, https://www.bdo.ca/. Accessed 15 October 2025.

Billy-Ochieng, Rannella, et al. “Artificial Intelligence Technologies Can Help Address Canada’s Productivity Slump.” https://economics.td.com/ca-AI-tech-can-help-productivity-slump, 28 05 2024, https://economics.td.com/Canada. Accessed 15 October 2025.

Hartley, Jonathan S., et al. “Canada’s generative AI wake-up call – From leader to laggard.” The Macdonald-Laurier Institute, 14 October 2025, https://macdonaldlaurier.ca/canadas-generative-ai-wake-up-call-from-leader-to-laggard-jon-hartley-filip-jolevski-vitor-melo-and-brendan-moore/. Accessed 15 October 2025.

Rogers, Carolyn. “Remarks Carolyn Rogers.” Time to break the glass: Fixing Canada’s productivity problem, 26 03 2024, https://www.bankofcanada.ca/2024/03/time-to-break-the-glass-fixing-canadas-productivity-problem/. Accessed 15 October 2025.