TORONTO — The Liberal government plans to expand its new stricter Buy Canadian policy to digital infrastructure, and is considering mandating that firms receiving federal funding use Canadian-made technology where possible, AI Minister Evan Solomon has said.

The forthcoming update to the national AI strategy will include “a Buy Canadian element,” Solomon added. He was speaking to reporters in Toronto on Monday, following two events at which he touted budget measures designed to help federal departments spend more with homegrown suppliers.

Ottawa has long had a softer policy that officials should try their best to buy Canadian. In September, Prime Minister Mark Carney announced stricter rules, requiring federal departments and agencies to purchase from domestic suppliers first, and if they can’t find any, to make foreign firms use local content. 

Right now, the policy currently covers steel and lumber for defence and construction projects above an as-yet unspecified value. The requirement “will apply eventually to digital infrastructure,” Solomon said.

Ottawa currently houses and processes its own data in both legacy data centres and with the cloud arms of tech giants like Google, Microsoft and Oracle. Those ties may be hard to break. As The Logic reported, the innovation department estimated that switching its own compute usage away from Amazon Web Services would take up to three years, with other hyperscalers the only likely alternative.

Still, some Canadian firms are opening new data centres or partnering up to offer what they say is sovereign AI infrastructure. 

The Liberal government has also promised to extend its Buy Canadian requirement to companies and other organizations that receive federal grants, loans and other forms of public funding. 

In September, Industry Minister Mélanie Joly told The Logic she had stipulated that Volkswagen’s battery plant in St. Thomas, Ont., use Canadian steel and aluminium as a condition of federal support. The German automaker is in line for up to $13 billion in production subsidies.

Solomon said Ottawa could impose similar requirements on firms receiving public funding to buy Canadian if they’re spending any of the money on AI and digital products. Members of the AI task force appointed to provide advice on the refreshed AI strategy have recommended such a measure, he said. 

Solomon said that buying Canadian did not mean “isolation,” adding that firms can use technology and innovations from around the world that meet security and encryption standards. 

Last week’s federal budget included $105.9 million in fixed-term funding for the procurement department and Treasury Board Secretariat to implement the new domestic purchasing policy. It also allocated $79.9 million over five years to the innovation department to launch a procurement program for small and medium-sized businesses. And it committed to a new Office of Digital Transformation to help find opportunities for the public service to adopt new technologies, including AI. 

Ottawa’s previous attempts to buy more from startups and innovative companies have seen limited success; it shrank the last such program after departments consistently failed to meet their spending obligations. 

The budget also gave Solomon a mandate to negotiate deals with firms building and financing digital infrastructure. On Monday, he reiterated that the government has been sent a lot of data-centre proposals. “We’ve calibrated Canada’s own sovereign compute needs,” he said. “So we’re not here to be backstopping everybody.”

Still, the federal government plans to incentivize the building of enough data centres to satisfy the compute and cloud usage of its departments and agencies. That could include offtake agreements or backstops, Solomon said. Under the former, Ottawa would purchase a certain amount of processing power; under the latter, it could guarantee financing for projects. 

“We want to make sure that we’re building our economy in the future with Canadian products and Canadian companies,” he said.