Canada wants more of the computing power behind artificial intelligence to sit on Canadian soil and under Canadian control. Budget 2026, tabled on 5 November, pledges financial support to deliver 500 megawatts of sovereign computing capacity for Canadian AI companies, according to analyses of the budget, including one by the law firm Gowling WLG. The support is to come through tools such as loan backstops and purchase agreements.

The big numbers

  • 500 MW of sovereign compute: support aimed at helping domestic AI firms get access to capacity in Canada.
  • Bell's Saskatchewan hub: the budget cites Bell's planned 1.2-gigawatt AI data centre hub in Saskatchewan, representing $52.5 billion in capital investment.
  • Cohere: an equity investment of up to $1.6 billion in Cohere, the Toronto-based AI company, according to Gowling WLG.

What came before

The budget builds on the Canadian Sovereign AI Compute Strategy, announced with $2 billion over five years. According to the OECD's policy database and industry summaries, its three parts are:

  • up to $700 million for the AI Compute Challenge, which supports commercial data centres;
  • up to $1 billion for public supercomputing infrastructure;
  • up to $300 million for the AI Compute Access Fund, which helps smaller firms buy computing time.

An early deal under the strategy backed Cohere's purchase of computing capacity from CoreWeave's data centre in Cambridge, Ontario, with up to $240 million in federal money.

The criticism

The Institute for Research on Public Policy argued in Policy Options that a large share of the strategy supports private infrastructure, and it recommends rebalancing toward capacity that is truly public, for example for universities and public research.

The local question

Large compute projects need land, power and cooling, and they are increasingly meeting local resistance. In Nova Scotia, protesters are calling for a moratorium on AI data centres after a 95-megawatt facility was proposed at Point Tupper in Cape Breton. As Ottawa pushes for more capacity, provinces will have to decide where these sites go and on what conditions.

Several budget measures still need legislation and program details. Readers should check the official budget documents and Innovation, Science and Economic Development Canada for the final rules.