Amid heightened political and economic uncertainty with the United States, neoliberalism continues unabated in Canada with the election of former central banker Mark Carney as Prime Minister in 2025. Despite today’s crisis stemming from decades of erosion under the neoliberal economic paradigm, through austerity, wage suppression, and cuts to public benefits, the Carney government’s push to make artificial intelligence (AI) a central part of Canada’s economy would accelerate that erosion.
In the name of protecting Canada’s economic integrity from U.S. instability, Carney has increasingly positioned AI as a pivotal piece of Canada’s future economic growth. Canada’s bet on AI, only if successful as an inflator of growth, would represent another manifestation of trickle-down economics: hype-driven, top-heavy, and disconnected from the lived realities of Canadians.
Canada’s first-ever Minister of Artificial Intelligence and Digital Innovation, a new invention of the Carney government, pledged $925.6 million over five years to support large-scale AI infrastructure and ensure Canada’s global competitiveness in this sector. Such overwhelming enthusiasm for AI investment, nevertheless contributes to an AI boom that generates “hype,” leaving Canadians vulnerable to busts wherein the impact of a novel technology is exaggerated and inflated, much in the same way as recent bubbles related to blockchain technology.
The Carney government’s approach amounts to acquiescence to the American-led AI industry, which neither challenges capitalist inequality nor dismantles monopolies. By caving to increasing pressure to capitalize on AI due to the massive private investment in the sector, its approach sidelines worker protections, safety, and environmental responsibilities in the name of innovation meant to protect the Canadian economy.
The Myth of Productivity
Canada’s economy has been often scrutinized by its business class for suffering from a productivity deficit. Minister Evan Solomon’s emphasis on deploying AI in an attempt to boost productivity responds to Bank of Canada Deputy Governor Nicolas Vincent’s argument that Canada’s affordability challenge is, at its core, a productivity problem. However, treating AI as a panacea to solve Canada’s so-called productivity deficit is rooted in hype rather than fact. To secure funding, tech companies must pitch their technologies to potential investors, often exaggerating their capabilities. Pitches ranging from startups to Big Tech firms such as Google and OpenAI, in some capacity, all claim that their AI technologies will exponentially increase productivity at scale.
Yet, putting blind faith in the market should be met with skepticism. As Ed Broadbent put it presciently in 2016, “If a blind faith in unfettered markets continues to prevail, I believe the social foundation for our democracies will continue to be shaken.” The inflated value of AI technology relies on very shaky foundations. The MIT Media Lab recently found that 95% of organizations that implemented AI saw no measurable return on their investment. Further, the report highlighted that AI-generated output is unreliable compared to human workers, as it lacks the substance to meaningfully advance a given objective. Workers must then spend additional labour correcting mistakes or entirely redoing tasks that AI underperformed.
Big Tech Monopolies, but Make It Canadian
In the face of the U.S.’ economic war with the world, federal budget 2025 called for strengthening Canadian digital sovereignty by building a national technological infrastructure. Additionally, the Pan-Canadian AI Strategy includes three pillars: commercialization, standards, and talent and research. While standard-setting and fostering research are essential to AI development, the commercialization of AI technologies risks centralizing profit-seeking, and not the public good, as the primary motivation for innovation.
Canada should reduce its dependence on U.S. Big Tech platforms, particularly reliance on U.S.-based cloud infrastructure, through built and based-in Canada cloud infrastructure. However, current efforts largely mirror the U.S. model by remaining private-sector driven, reinforcing corporate concentration with Canadian characteristics. While members of Canada’s small telecom oligopoly like Bell and Telus have already committed to building the first national data centre “supercluster” and other data centres in Canada, with or without government funding, the Carney government’s new strategy risks further entrenching the market power of corporate giants that have long exploited Canadians.
Instead of leading industry, the federal government is also calling on other Canadian private companies to participate. Although the government claims these large investments will create high-quality jobs and position Canada as an AI leader, data centres mostly generate only short-term construction and engineering jobs and require minimal long-term labour. Jobs in this industry would be limited, while private corporations capture most of the profits, leaving Canadian workers with few lasting benefits despite the drain on public investment and resources.
An Economy for Whom?
The implementation of the government’s Pan-Canadian AI Strategy is about the technology’s commercialization, rather than advancing research or serving the public good. Its primary use case is enterprise software, where adoption is often uneven and top-down, where employees are pressured to incorporate AI into daily work. Canadian tech commentator Cory Doctorow cautions that this imbalance reflects broader patterns in the tech industry, where profit-driven deployment reshapes labour conditions; the gig economy where workers would be increasingly managed by AI would be an example. By pushing for management by “digital Taylorism”, AI models would oversee workers with the main goal of maximizing efficiency.
The impact of novel technologies are shaped by social and economic conditions, and AI designed around profit-driven commercialization will prioritize corporations over workers.
With over 500,000 tech workers laid off globally in the past three years, Canada must give special attention to workforce and social protections in current AI governance initiatives that it currently neglects. More concerning than the neglect are the government’s selling narratives on AI, framing adoption as essential to Canada’s economic success and cultural integration through entrepreneurship. Such rhetoric is counterproductive to addressing Canada’s economic problems head-on. In 2025, affordability and the cost-of-living were top concerns for Canadians, but there are no initiatives to directly address them. A neoliberal approach to AI prioritizes corporate efficiency and market growth over the structural crises facing the working class, including surging rents, food inflation, and job precariousness. Though austerity has bottomed out in a time of polycrisis that demands massive intervention, the made interventions continue a failed logic of trickle-down economics, assuming these tech-driven profits will eventually benefit those at the bottom.
The neoliberal approach appears again in Minister Solomon’s call for “light” regulation to promote AI-driven innovation, placing only minimal oversight on the sector which risks exposing workers to exploitation and fostering environmental harm. While Canada has about 239 small-scale data centres, the federal policy favours the large-scale facilities being promoted by business interests, which are energy and water-intensive. In the U.S. which has seen an acceleration of new data centre construction, flush with cash derived from the technology’s inflated value, electricity bills rose by 7.4 percent for consumers in neighbourhoods near data centers. Canadians might not care whether these centres are Canadian or American-owned if they face higher utility bills or water insecurity, with public investments going to profit-making instead of job creation. Rapid data centre expansion also threatens climate goals and risks escalating the long-term costs of climate change, which already burden Canada with billions in damages.
There are Alternatives
Canada cannot bet on AI for economic reform. The impact of novel technologies are shaped by social and economic conditions, and AI designed around profit-driven commercialization will prioritize corporations over workers. Canada has an opportunity to build digital infrastructure that serves the public interest rather than private monopolies. Without this shift, cost-of-living pressures will persist while corporate concentration deepens and profits remain concentrated among the rich and powerful.
