Evidence of meeting #27 for Industry and Technology in the 45th Parliament, 1st session. (The original version is on Parliament’s site, as are the minutes.) The winning word was companies.
A recording is available from Parliament.
Liberal
Karim Bardeesy Liberal Taiaiako'n—Parkdale—High Park, ON
Professor Scassa, you made the case for a broad-based—
Liberal
The Chair Liberal Ben Carr
Mr. Bardeesy, you're 35 seconds over already, so I'm going to have to cut you off. I apologize.
Mr. Ste‑Marie, you have the floor for six minutes.
Bloc
Gabriel Ste-Marie Bloc Joliette—Manawan, QC
Thank you, Mr. Chair.
I'd like to welcome the three witnesses and thank them for being with us.
Mr. Billot, your company doesn't work on general artificial intelligence, such as chatbots, but rather supports businesses that want to integrate artificial intelligence into their activities to improve productivity. You do follow-ups. You said that, to date, you've supported 200 companies.
Is the process lengthy for each company?
Chief Executive Officer, Scale AI
The process is lengthy because it begins with a business assessment for a company. Artificial intelligence is ultimately just a tool, so before integrating artificial intelligence into its operations, a company really needs to think about its business processes based on two elements: productivity gains and ease of implementation. It must then properly select the processes to be transformed, that is, the ones with the greatest potential and that are the easiest to transform.
So it begins with a business assessment. That's why I'm often asked which companies use this tool. In fact, it has a lot to do with the management and leadership of these companies, who may or may not have a clear understanding of their business processes and a willingness to improve them using artificial intelligence.
In general, it's a process that takes several months, if not several years.
Bloc
Gabriel Ste-Marie Bloc Joliette—Manawan, QC
A few months ago, we conducted a study on productivity to find out how to increase productivity gains for local businesses. I think you're providing a very important solution. It's a lengthy process. When you invest in a business, it mobilizes resources, including financial resources. Would you say you've hit your cruising speed?
Would you have the capacity to do more and support more businesses? If so, what's limiting you right now?
Chief Executive Officer, Scale AI
We have been around for seven years, so I think we have hit our cruising speed.
We could do a lot more. I would say that we have barely scratched the surface of what we can do to help businesses. In 200 projects, we have helped a few hundred businesses out of the tens of thousands that exist in Canada.
To do more, it's simple: It takes money. It's as basic as that. We could do at least 10 times more projects in the next five years. It's a purely financial challenge. It's also a challenge for us to work with the provinces even more than we already do. Historically, we have had a great working relationship with the Province of Quebec. We can do a lot more with provinces that are starting to take an interest in artificial intelligence. For us, these are key ingredients to accelerate development.
Bloc
Gabriel Ste-Marie Bloc Joliette—Manawan, QC
There's much higher potential in terms of what can be done, then. You're limited by money, as you said.
You mention great working relationships with the provinces. What about working with Ottawa, with the federal government? I'd like to take this opportunity to talk about the new artificial intelligence strategy. Looking ahead, do you know of any supports that could help you, or do you expect to receive support?
Chief Executive Officer, Scale AI
We obviously have a very good working relationship with the federal government, which created our company in 2019 and has been refinancing it since 2019. We had extremely in-depth discussions on the new artificial intelligence strategy.
We have done our part, but we don't know the outcome yet, so we're obviously waiting. We have hope, given the value we bring, the importance of productivity and economic sovereignty for Canada, and the need to build a local artificial intelligence industry. We obviously hope that the federal government will continue to provide support as part of this new strategy.
Bloc
Gabriel Ste-Marie Bloc Joliette—Manawan, QC
Does the fact that there's a waiting period temporarily jeopardize the number of businesses, the number of projects you can support and the stability of jobs in your company, among other things? What's the impact of a delay in that response?
Chief Executive Officer, Scale AI
Delay is always a problem for an industry. When we fund projects, people have to be able to deliver them. To deliver them, they need labour, and they need to develop solutions, so people need to have visibility. It's extremely important to give economic players visibility so that they can launch investment plans over a number of years to recruit and train people and invest in technological solutions.
What's important for the industry at this stage in the development of AI adoption is to provide visibility. There has been a lot of work in recent years for a whole bunch of reasons, year after year. It was very good and very well managed. Now, there has to be visibility. That's why this artificial intelligence strategy, which should provide visibility over several years, is so important for our ecosystem and our industry.
Bloc
Gabriel Ste-Marie Bloc Joliette—Manawan, QC
Thank you very much, Mr. Billot.
Ms. Scassa, thank you very much for your opening remarks and the answers you are giving us.
Regarding the federal AI strategy, you—I think rightly—criticized the government's consultations: they were too short, the deadlines were too tight, and there was a lack of diversity in the advisory committee. People could answer the online survey multiple times, and bots could have answered it.
Do you think the government should start afresh and hold real consultations with the public about the future of artificial intelligence?
Canada Research Chair in Information Law and Policy, Faculty of Law, Common Law Section, University of Ottawa, As an Individual
I think it's right to make sure that the strategy moves forward. As we're hearing, there's an element of urgency here. That said, I believe that conversations with Canadians have to continue in a number of forums and in a number of ways. It isn't enough for there to have been one consultation in the fall of 2025. It's important to continue to consult, educate and engage the public. That's important.
Bloc
Gabriel Ste-Marie Bloc Joliette—Manawan, QC
Thank you very much, Ms. Scassa. I'll have more questions for you in the next round.
Liberal
The Chair Liberal Ben Carr
Okay.
Thank you, Mr. Ste‑Marie. Unfortunately, again, we don't have much time left.
We're going to go to Ms. Borrelli, followed by Mr. Bains and then followed, again, by a minute for yourself, Monsieur Ste-Marie.
We need to continue the work on our report.
With that, Ms. Borrelli, the floor is yours for five minutes.
Conservative
Kathy Borrelli Conservative Windsor—Tecumseh—Lakeshore, ON
Mr. Billot, many AI systems require massive power and data storage.
Is it true that most of the computing and data storage that Canadian companies use today is owned by large multinational firms, which are primarily based in the U.S.?
Chief Executive Officer, Scale AI
To be clear, not all AI systems require a lot of energy. That was my initial point. We mix AI up with large language models.
Large language models, obviously, require a massive amount of energy and computing power, but that's not at all the AI we are working on. AI for industry doesn't typically require a lot of cloud services, energy or computing power because it's very basic AI. AI for industry, which is critical for productivity gains, is not raising any issues in terms of power or water resources.
Foreign players can absolutely be hosted in Canada with very limited computing power. When we talk about large language models—aside from Cohere—most of the players operating here are hyper scalers. They are the ones requiring a massive amount of energy.
That's why we always argue, from Scale AI's industry perspective, that it's nice to build data centres, but it's like building highways and having Korean cars on those highways. If you build data centres, you need to have a Canadian-based application to run on them so that this energy, at least, which belongs to Canadians, serves the creation of Canadian IP and Canadian companies.
Conservative
Kathy Borrelli Conservative Windsor—Tecumseh—Lakeshore, ON
Are fewer foreign companies involved in storage and the power we need to run AI?
Conservative
Kathy Borrelli Conservative Windsor—Tecumseh—Lakeshore, ON
All right.
In the meantime, how do we ensure that the data we're storing is secure?
Chief Executive Officer, Scale AI
There is a difference between data security and storage by foreign companies. Typically, in the European Union, there are agreements that, even if the data is in data centres owned by Microsoft or others, it remains in the European Union and has some protection. There are ways to control this.
From our perspective, it's impossible to replace these hyper scalers. It's impossible for any Canadian industry to not use, at one point, Microsoft, Google or Amazon. The question is this: Do we at least force data to be hosted in Canada when it's about Canadian companies? That's feasible. My understanding is that this is what Europe is doing. You cannot be absolutely sovereign by yourself. We cannot hope to control everything in Canada.
What we argue is that we should at least try to control what we can. Even if we control 20% to 30% of the full value chain, it's much better than 0%. Let's try to do that. Legislation can help, investment in the right companies can help and investment in infrastructure can help. It's a sum of actions that will help Canada be more sovereign than it is today regarding AI control.
Conservative
Kathy Borrelli Conservative Windsor—Tecumseh—Lakeshore, ON
Thank you.
Ms. Scassa, Canada has produced many foundational breakthroughs in artificial intelligence research.
When those discoveries go to the market, who typically ends up owning the patents?
Canada Research Chair in Information Law and Policy, Faculty of Law, Common Law Section, University of Ottawa, As an Individual
One of the challenges that Canada has faced is this: Even if a Canadian company begins by owning a patent, that patent can be sold or transferred. Companies can be sold. We often see our start-ups snapped up by larger, U.S.-based companies.
The patent side is not really my forte, but there are a lot of issues around the ownership management of patents in the Canadian context.
Conservative
Kathy Borrelli Conservative Windsor—Tecumseh—Lakeshore, ON
We see the results of our funded research being sold off to other countries. Often, we see a brain drain. People who have been trained in Canada take jobs in other countries.
Is there something the government can do to keep companies here, and to keep the educated students who have graduated here, rather than have them go elsewhere?
Canada Research Chair in Information Law and Policy, Faculty of Law, Common Law Section, University of Ottawa, As an Individual
Yes, and I think this brain drain problem is one that has been going on for a long time in Canada. I think that it's lately become more attractive for Canadians to stay in Canada, so that might help to some extent, but this is a challenging thing.
Also, it's going to become more challenging if the economy gets worse, if young people have trouble finding jobs and if they have trouble finding jobs that pay well enough.
These are economic challenges that we're going to have to face. I think they're complex problems.
Liberal
The Chair Liberal Ben Carr
I'm sorry, Ms. Borrelli. That's all the time.
Mr. Bains, the floor is yours for five minutes.