85% of Canadian firms face a two-year modernization hurdle

Most Canadian organizations have moved AI into the core of how they operate, and now they’re planning to spend the next two years rebuilding the systems it runs on.

CGI’s 2026 Voice of Our Clients research for Canada was drawn from 278 interviews with business and IT executives at 179 organizations. According to the report, 64% of respondents say they’re applying AI to core business and operational processes, past the pilot stage. But 49% say legacy systems significantly challenge their digitization, data, and AI strategies, and 85% plan to modernize more than 20% of their core business application portfolio over the next two years.

It’s a familiar spot for anyone accountable for delivery. The AI is already in production, and the foundation under it is actively being built. CGI frames this as a move from experimentation to readiness. 

“For Canadian organizations, the AI conversation has become one about foundation readiness,” says Michael Godin, president of CGI’s operations in Canada. “As organizations move beyond experimentation, they’re prioritizing investments in cloud, data, governance and modernization to scale AI responsibly and achieve their digital transformation outcomes.”

61% say they’re quantifying results from AI, which seems like progress until you separate measuring from earning. Quantifying a result isn’t the same as booking a return, and CGI’s own summary concedes that many organizations still struggle to quantify outcomes and scale value. Only 38% report a company-wide AI strategy. The rest are running AI in core operations without a coherent plan for the whole.

The sovereignty thread runs underneath all of it. 65% cite security and cyber risk as a cloud priority and 51% cite data sovereignty and localization, both of which make the modernization decision heavier, because rebuilding on a trusted, controllable foundation costs more and takes longer than moving to whatever’s cheapest.

For the person carrying the AI mandate, keeping AI running in the business while the ground beneath it gets rebuilt, without stopping either one, is the current concern.

Final Shots

• 64% are running AI in core operations, but only 38% have a company-wide strategy for it. Deployment got there first, governance is catching up.
• Security at 65% and data sovereignty at 51% are shaping cloud and modernization decisions, which makes the rebuild slower and costlier than a straight lift-and-shift.