Ottawa adds $500M to regional AI program, now $700M

The federal government is adding $500 million over five years to the Regional Artificial Intelligence Initiative, lifting the program’s total federal funding to $700 million, according to a Government of Canada news release issued Oct. 13.

AI Minister Evan Solomon announced the money in Ottawa. The initiative is part of the federal AI strategy, called AI for All, and is delivered by Canada’s seven regional development agencies rather than from a single national fund.

“The question is not whether AI will reshape our economy,” Solomon said in the release. BetaKit reported that he went on to say the question is whether Canada will capture the opportunity.

The release said priority sectors include health and life sciences, energy and natural resources, transportation, agriculture, and manufacturing and robotics.

The program has three streams, according to Innovation, Science and Economic Development Canada. One helps small and medium-sized businesses and not-for-profits adopt AI. A second helps Canadian AI start-ups and scale-ups commercialize and sell their products. A third supports incubators, accelerators and other regional groups that give businesses technical and advisory help.

Since the program launched in 2024, it has backed 218 projects that created or kept more than 1,100 jobs, the release said. Those projects drew about $1.77 in other funding for every federal dollar approved.

The department’s program page does not state the original funding amount. By subtraction, it was about $200 million.

Each agency runs its own intake, so deadlines differ by region. For southern Ontario, projects with eligible costs before March 31, 2027, must be submitted by Nov. 24, 2026, and applications are accepted until Jan. 19, 2027, the release said.

Businesses elsewhere apply through the agency that serves them: the Atlantic Canada Opportunities Agency, Canada Economic Development for Quebec Regions, the Canadian Northern Economic Development Agency, FedNor for northern Ontario, FedDev Ontario for southern Ontario, Prairies Economic Development Canada, or Pacific Economic Development Canada for British Columbia.

BetaKit cited two earlier regional examples. PrairiesCan put $7.9 million into Saskatchewan’s Co.Labs to support local AI firms, and PacifiCan added $1.8 million to the Innovate BC initiative for AI projects.

The top-up comes as business use of AI is still growing from a low base. BetaKit, citing Statistics Canada, reported that adoption among Canadian businesses rose from six per cent in 2024 to more than 19 per cent in 2026. It also noted that AI literacy, workplace training and trust in the technology still lag.

Neither the release nor the program page, as read by Canada News Media, said how the $500 million will be divided among the seven agencies or in which fiscal years it will be spent. Those details will determine how much reaches smaller regions, including the North and Atlantic Canada, compared with the larger southern Ontario and Quebec economies.

Earlier rounds under the program have been smaller. The Atlantic agency announced $8.5 million for 40 AI projects in March.

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Sources: Government of Canada news release (Oct. 13, 2026); Innovation, Science and Economic Development Canada; BetaKit (Oct. 14, 2026).