OTTAWA — The federal government has made an additional $500 million available over five years to expand a program designed to help Canadian businesses adopt artificial intelligence and commercialize Canadian-made AI products.

The new funding raises total federal support for the Regional Artificial Intelligence Initiative to $700 million, according to a release issued Tuesday by the Federal Economic Development Agency for Southern Ontario.

What the program will fund

Canada’s regional development agencies will deliver the money. The government says support will focus on helping businesses and organizations integrate AI into their operations, while also helping Canadian AI companies find customers, attract investment and scale products from Canada.

Priority sectors include health and life sciences, energy and natural resources, transportation, agriculture, manufacturing and robotics. Regional agencies can also support areas tied to their own local economies.

The announcement says applications are open now. In southern Ontario, the application window runs until January 19, 2027. Projects with eligible costs before March 31, 2027 must be submitted by November 24, 2026.

Program began with $200 million

The Regional Artificial Intelligence Initiative was launched in 2024 with $200 million. The government says 218 projects have since been approved across Canada, creating or maintaining more than 1,100 jobs and leveraging about $1.77 for every federal dollar approved.

Those figures come from the federal program and have not been independently audited for this report. Funding availability also does not guarantee that every applicant will qualify.

The expansion is part of the national AI for All strategy announced in June. That strategy includes separate measures for financing, AI expertise and access to secure computing infrastructure.

Why it matters

The investment puts public money behind two related goals: increasing AI use among small and medium-sized Canadian businesses, and keeping more Canadian-developed technology, talent and economic activity in the country.

Minister of Artificial Intelligence and Digital Innovation Evan Solomon said the program is intended to help Canadian companies adopt AI while allowing domestic AI firms to scale from Canada. The government has not yet published a regional breakdown of how the additional $500 million will be distributed.

Sources: Federal Economic Development Agency for Southern Ontario, October 13; Regional Artificial Intelligence Initiative program page; Innovation, Science and Economic Development Canada: AI for All strategy.

Lead image: Flag of Canada via Wikimedia Commons, public domain. Illustrative image.