TORONTO — Widespread AI adoption could help Canada ride the waves of economic and geopolitical turbulence roiling the world, but businesses and governments both need to get on board, executives said at an event in Toronto on Thursday.

The knowledge: Post-ChatGPT, “there was this idea that, ‘Once I have [AI], it will work,’” said Michael Pelosi, Canada country manager of Cohere. “But you also need the motivation to use it.” 

Pelosi was speaking at an event in Toronto focused on AI adoption put on by Western University’s Lawrence National Centre for Policy and Management featuring executives from major firms.

Legal and compliance risks have slowed businesses’ adoption of AI, Pelosi said. Firms that run pilots with the technology have typically restricted them to small departments, and kept large language models (LLMs) and other AI tools away from their clients. 

Studies have found that Canadians have particularly low trust in AI. More public education about how the technology works and what it’s capable of could help alleviate those worries, and once consumers get comfortable, businesses will follow, Pelosi said.

Executives at Thursday’s event also dismissed an MIT study that found 95 per cent of corporate pilots using generative AI pilots produced no return. They insisted their firms are already feeling and measuring the benefits of the technology. Bank of Montreal requires that any new applications of the technology generate one basis point—a hundredth of a percentage point—of improvement in the firm’s revenue or costs, said Kristin Milchanowski, the bank’s chief AI and data officer. “We’ve been effectively using AI very successfully.”

The backdrop: AI and other digital technologies will form the basis of a fourth industrial revolution, former Bank of Canada governor Stephen Poloz said. That will produce stock market bubbles and crashes, rising income inequality and the rise of political populism and polarization. The trade war touched off by the Trump administration’s tariffs is also a drag on economic growth, he said. 

Canada has “lagged other countries in this productivity game,” Poloz said, but AI can help close the gap. “Facilitate it, speed it up in every way that we can,” he said.

The public sector: Lots of panellists called for Canadian governments to do more to incentivize AI adoption, starting with their own operations. The public sector should “lead the way and actually buy this stuff,” Poloz said, also calling for financial and tax incentives to get companies using AI tools.

Ottawa is listening, senior federal officials said at the event. The federal government plans to overhaul its procurement system as part of its new AI strategy for the public service, said Kara Beckles, executive director for privacy and AI policy at the Treasury Board Secretariat, adding that right now, “we have the exact same process for buying a helicopter as we do for buying an LLM.” Government contracts give companies a “cash infusion into their technologies,” but also a big-name customer they can use to sell to other clients, Beckles said.

Bell Business Markets president John Watson said the government should become “an anchor tenant” for Canadian companies building AI data centres, and encourage businesses to use homegrown compute over foreign cloud services. “It’s not easy to go and build a sovereign stack,” he said. Bell recently announced major data centre building plans, and is working with Cohere to sell AI tools to businesses and governments.

The counterpoint: Canadian tech firms have long complained about the difficulty of selling to the public sector. But startups shouldn’t be chasing government customers in the early stages of their growth, because they don’t generate enough revenue to justify all the work needed to service them, said Dayforce CEO David Ossip. He was speaking Thursday at a different event just down the street, put on by the Council of Canadian Innovators for a crowd of CEOs from prominent Canadian scale-ups.

Dayforce, which is going big on AI, recently landed a major contract to replace the payroll system for the federal public service. “You have to get a certain scale before you start to work with government,” Ossip said. 

Instead of procurement, he called for policymakers to offer tax credits for Canadian companies to buy Canadian technology. “Everyone inside the room here should be buying everyone else’s products,” Ossip told the audience.