‘The Regional Artificial Intelligence Initiative will help Canadian businesses adopt AI and Canadian AI firms scale from here’
The federal government has added $500 million in AI funding for Canadian businesses, expanding a regional program that helps employers adopt artificial intelligence and bring Canadian-made AI products to market.
Evan Solomon, federal Minister of Artificial Intelligence and Digital Innovation and the minister responsible for the Federal Economic Development Agency for Southern Ontario (FedDev Ontario), announced the five-year expansion of the Regional Artificial Intelligence Initiative (RAII) yesterday. The new money brings total federal funding for the initiative to $700 million.
The RAII is part of AI for All, Canada’s National Artificial Intelligence Strategy, released in June 2026.
HRD Canada previously reported on the federal AI strategy that put workforce transformation at the centre of Ottawa’s plans.
How will the AI funding be delivered?
Delivered by Canada’s regional development agencies, the RAII has three goals, according to FedDev Ontario. It aims to help businesses and organizations adopt and integrate AI to improve productivity, competitiveness and resilience. It aims to help Canadian AI companies commercialize and scale. And it aims to strengthen organizations that connect businesses with specialized AI support.
The agency said the focus will be primarily on health and life sciences, energy and natural resources, transportation, agriculture, and manufacturing and robotics. It will also support broader access to AI’s benefits for Indigenous Peoples, youth and underrepresented groups.
In southern Ontario, applications are open until Jan. 19, 2027. Proposals for projects with eligible costs before March 31, 2027, must be submitted by Nov. 24, 2026.
In the FedDev Ontario release, Solomon said: “The question is not whether AI will reshape our economy. It is whether Canada will capture the opportunity. The Regional Artificial Intelligence Initiative will help Canadian businesses adopt AI and Canadian AI firms scale from here, so that the technology, talent and economic value we create remain anchored in Canada and under Canadian control.”
FedDev Ontario also announced more than $1 million toward a project worth over $2 million at Deep Breathe Inc. The London, Ont., company is scaling and commercializing an AI-powered lung ultrasound system.
“FedDev Ontario’s support is helping Deep Breathe accelerate the commercialization of our AI-enabled ultrasound technology across hospitals, emergency medical services and military medicine,” said Dr. Rob Arntfield, CEO and founder of Deep Breathe Inc.
Atlantic Canada opens call for proposals
The Atlantic Canada Opportunities Agency (ACOA) said the region will receive nearly $40 million of the new national funding. In total, ACOA is delivering more than $55 million under the RAII in the region.
Sean Fraser announced an Atlantic-wide call for proposals the same day. Fraser is federal Minister of Justice and Attorney General, minister responsible for ACOA, and Member of Parliament for Central Nova in Nova Scotia.
The call is open to eligible small and medium-sized enterprises (SMEs) with AI projects valued at $1 million or more. Projects must be able to deliver measurable outcomes, such as productivity gains, increased competitiveness, commercialization success or business growth. The call closes Nov. 20, 2026. ACOA said possible projects include managing inventory or spotting problems on a production line.
ACOA said the investment responds to the Atlantic Economic Panel’s recent report, Bolder Ambitions: Greater Prosperity for All.
“AI is changing how businesses compete, and we can’t afford to see Atlantic Canada fall behind,” Fraser said in the release.
Training measures run alongside adoption funding
RAII funding goes to businesses and organizations. Separately, Ottawa has launched a National AI Literacy Initiative. According to Innovation, Science and Economic Development Canada, it includes a training stream for workers and job seekers through Employment and Social Development Canada’s Job Bank. HRD Canada covered it in its report on Canada’s new National AI Literacy Initiative for workers.
Research published in Canadian Public Policy and cited in HRD Canada’s analysis of whether Canadian workers are adopting tech fast enough found that skilled workers and adaptable workflows are decisive in turning AI investment into productivity gains.
