Canada lacks the leverage to push back or the ability to control
In an era when artificial intelligence is quietly redrawing the boundaries of sovereignty, Canadian Prime Minister Mark Carney has placed a name on a fear many nations share but few have acted upon: that dependence on foreign AI platforms is not merely a commercial inconvenience, but a structural vulnerability that can be turned against a country's own people. Speaking at Davos, Carney unveiled legislation, domestic infrastructure, and a proposed coalition of democracies — a recognition that in the age of intelligent machines, the question of who owns the data and who trains the models is inseparable from the question of who holds power.
- Canada's reliance on foreign AI infrastructure has reached a point where sensitive data, government operations, and competitive advantage all flow across borders Canada does not control.
- With only 12 percent of businesses using AI and the country ranking near the bottom globally in literacy and adoption, the gap between Canada and dominant tech powers is widening by the day.
- Carney is moving on two fronts simultaneously — new legislation to constrain how foreign platforms operate on Canadian soil, and a public supercomputer to give researchers and companies a domestic alternative.
- A national AI literacy initiative will bring free training to schools and community centers, aiming to close the trust and skills deficit before it hardens into permanent disadvantage.
- Beyond its own borders, Canada is reaching toward other mid-sized democracies, proposing a coalition that could pool computing power and purchasing decisions as a counterweight to US-led tech hegemons.
Mark Carney arrived at the World Economic Forum in Davos with a warning that smaller nations have been slow to voice aloud: the AI systems reshaping global life are concentrating power in a handful of dominant players, and countries that depend on them risk losing the ability to push back. On Thursday, he turned that concern into policy.
The vulnerability, as Carney described it, runs deeper than economics. Foreign AI platforms could access Canadian data, deploy products that shape Canadian lives without reflecting Canadian values, and tilt competitive conditions against domestic firms — all while Canada lacks the leverage to respond. The government's own strategy document put it starkly: AI is a game of scale dominated by hegemons and hyperscalers, and nations that fail to act risk becoming subordinate to them.
Carney's answer is structural. New legislation will establish guardrails around how foreign platforms operate within Canada. A world-class public AI supercomputer will give researchers and companies a place to train models without sending their work abroad. The federal government has committed to building sovereign capabilities domestically wherever possible, and partnering with trusted allies when it cannot.
The domestic challenge is equally pressing. Only 12 percent of Canadian businesses currently use AI, with small enterprises lagging further still. To close the gap, Carney announced a free literacy initiative delivered through schools and community centers, teaching Canadians to identify bias and misinformation and to use AI tools for their own advancement.
Looking outward, Carney is proposing a coalition of aligned democracies — middle powers willing to pool research talent, computing resources, and purchasing decisions. The goal is not to outcompete American hyperscalers directly, but to preserve enough autonomy that Canada and its partners can shape how AI enters their societies, rather than simply receiving it on terms set by others.
Mark Carney stood before the World Economic Forum in Davos with a warning that has become increasingly familiar to world leaders: the artificial intelligence systems reshaping global commerce and communication are concentrating power in the hands of a few dominant players, and smaller nations risk becoming dependent on them. On Thursday, the Canadian Prime Minister made that concern concrete, unveiling his government's strategy to reduce Canada's reliance on foreign AI platforms and build sovereign technological capabilities at home.
The risk, as Carney framed it, is not merely economic. Foreign AI systems could be weaponized against Canadians—used to access sensitive data, to deploy products that shape national life without reflecting Canadian values, to tilt competitive advantage away from domestic firms. "That creates real risks that foreign entities could access Canadian data, deploy AI products that shape Canadian lives without reflecting our values," Carney said. "And tilt the playing field against Canadian firms — while Canada lacks the leverage to push back or the ability to control." The concern echoes a pattern Carney has observed before: the way economic integration, whether through supply chains or digital infrastructure, can become a tool of coercion in the hands of larger powers.
The problem is structural. Most of the data that trains AI systems crosses the Canadian border. Canadian researchers rely on foreign cloud platforms to develop their models. Canadian companies store sensitive information in foreign jurisdictions. Government operations depend on infrastructure Canada does not own. The government's own strategy document frames this plainly: "AI is a game of scale that is dominated by hegemons and hyperscalers," it states, and this "poses a significant security and economic challenge as countries around the globe risk becoming subordinate or reliant on them."
Carney's response is two-pronged. First, legislation. The government will introduce new rules to better protect Canadian data and privacy, attempting to establish guardrails around how foreign platforms can operate within the country. Second, infrastructure. Canada will build a world-leading public AI supercomputer—a domestic facility where researchers and companies can train models without sending their work across borders. The strategy commits the federal government to "building its key sovereign capabilities domestically whenever possible, while partnering with trusted allies or buying existing market solutions when appropriate."
But the challenge extends beyond government and research institutions. Canada has a severe adoption gap. Only 12 percent of Canadian businesses are currently using AI, and the figure is even lower among small and medium-sized enterprises. Globally, Canada ranks near the bottom in AI training, literacy, and public trust. To address this, Carney announced a literacy initiative that will offer free AI training through schools and community centers. The learning kits will teach Canadians to identify bias and misinformation, and to use AI tools for their own learning and career development.
Carney is also proposing a broader coalition—a gathering of aligned democracies willing to pool their research talent, computing power, and purchasing decisions. Such a coalition, the strategy suggests, could offer a credible alternative to the dominant market actors that increasingly define the global AI landscape. It is a vision of middle powers banding together, not to compete directly with the United States and its hyperscale tech companies, but to preserve some degree of autonomy and choice in how their citizens interact with AI.
The stakes are high because the technology is moving fast. AI is reshaping how information flows, how decisions are made, how economies function. For a country like Canada, the question is whether it can build the domestic capacity and the international partnerships to shape that transformation according to its own values, or whether it will simply be shaped by it.
Notable Quotes
Foreign entities could access Canadian data and deploy AI products that shape Canadian lives without reflecting our values, while Canada lacks leverage to push back— Prime Minister Mark Carney
A coalition of aligned democracies pooling research, talent, compute and procurement power would offer a credible alternative to dominant market actors— Canadian government AI strategy document
The Hearth Conversation Another angle on the story
Why does Carney frame this as a security issue rather than just a business competition problem?
Because data is sovereignty. When your citizens' information, your companies' secrets, your government's operations all live on foreign servers, you've essentially handed over leverage to whoever controls those servers. In a crisis or conflict, that becomes a weapon.
But Canada already has trade relationships with the US. Why is AI different?
Scale and invisibility. A supply chain you can see and negotiate. An AI system that shapes what your citizens see, what they believe, what they buy—that operates at a level most people don't even notice. And it's controlled by three or four companies, not a government you can talk to.
The literacy initiative sounds good, but will it actually move the needle if only 12 percent of businesses are using AI?
It's a start, but it's addressing the symptom, not the disease. The real problem is that Canadian companies don't have access to the compute power or the talent pipeline to build competitive AI products. Training people to use AI doesn't help if the tools they're using are all made elsewhere.
What does a coalition of democracies actually accomplish that Canada can't do alone?
Pooling. A single country can't build a supercomputer that competes with OpenAI or Google. But ten countries together, sharing research, sharing compute, sharing procurement—that creates real alternatives. It's the only way a middle power survives in a game dominated by scale.
Is Carney essentially saying Canada should be afraid of the US?
Not afraid. Realistic. He's saying that when you depend entirely on another country's technology, you lose the ability to make your own choices. That's not about fear—it's about autonomy.