Support for Canadian AI is already part of public-sector policies

Canada’s public servants are bringing sovereignty to the front of their AI procurement decisions.

In new research from KPMG Canada, 76% say their organization’s procurement policy stipulates buying AI products from Canadian firms whenever possible, a preference sharpened by Canada-U.S. trade disputes and a wider push to protect the country’s economic independence.

As the federal government continues moving forward with its AI for All strategy, 94% of respondents say that safeguarding Canadian data and intellectual property is an urgent need.

“But data sovereignty is only one piece of the puzzle,” says Michael Klubal, national industry leader for infrastructure, government and healthcare at KPMG Canada. “To realize the full potential of AI, governments also need the right skills, governance frameworks and workforce capabilities in place.”

Public servants are making use of AI tools, with 66% of respondents saying they use the technology, compared to 48% last year. Almost seven in 10 believe using AI will lead to quicker public services that are more responsive.

“What we’re hearing now is a growing recognition that success depends on much more than technology,” says Klubal. “Governments need governance, workforce readiness, trusted data foundations and clear guardrails if they want to move from pilots to sustainable adoption.”

On the governance side, 89% want a comprehensive AI policy covering both the public and private sectors. This does come with the caveat that they’re concerned about Canadians’ information, as 89% cite worries about the protection of personal or sensitive information while it’s being handled by an AI-enabled government.

To that end, 86% worry the public will lose trust if citizens’ information gets stored outside the country. 

“Trust remains the currency of the public sector, with strongly governed sovereign data at its core,” says Ven Adamov, KPMG Canada’s partner in risk services and national leader for data and analytics. 

“Strong governance over AI models, their actions and the data they access is no longer optional,” he says. “It is foundational to building trust and realizing AI’s full benefits.”

While AI enthusiasm is on the rise among public-sector employees, preparedness is a concern. 

The survey found that 72% say their organization doesn’t have enough specialized data and technology talent to guide ethical data use and establish governance frameworks. 

Respondents also report gaps in staff knowledge, with 84% saying AI literacy among public- sector employees is low, while 83% say AI fluency is low. 

KPMG defines literacy as knowing how to use AI safely and effectively, and fluency as how to think and work with AI.

To get around this, 86% of respondents call for greater investment in training and education.

Adamov says leaders can support adoption by training employees and explaining how they plan to use the technology. He also advises that a clear change management plan can help staff adapt to changes in their work and see the benefits of having these tools in place.

Final shots

• Canadian AI suppliers have a potential opening with public-sector buyers whose purchasing rules favour domestic firms.
• Public servants want stronger AI governance, and most say their organizations don’t have enough specialists to guide ethical data use.