Industry and Technology Committee on May 7th, 2026

[Simon Ahdoot]

I agree that it's a bit early to see results. It's especially important to understand that, in the IT sector, it's really about everything related to graphics processing units, or GPUs, and artificial intelligence that's growing significantly. We haven't seen many government projects in this area over the past year.

In my view, government procurement is a way to ensure that Canadian firms are more competitive internationally. It's not just about the volume of purchases or the products entering Canada; it's about fostering the maturity of Canadian companies so that we can succeed abroad.

One of the witnesses, Mr. Perry or Mr. Carbonneau, said that if we go abroad to bid on major contracts and say that we don't do much business with the Canadian government, that we don't work on these products, it creates a certain issue. Being able to position ourselves for government contracts will go a long way toward ensuring maturity and market positioning.

[Gabriel Ste-Marie, Bloc, Joliette—Manawan, QC]

That's very well understood. I hope it will be understood within the government.

Thank you very much for your answers.

Thank you, Mr. Chair.

[The Chair, Liberal, Ben Carr]

Thank you, Mr. Ste‑Marie.

There will likely be one minute remaining after Ms. Borrelli and Mr. Bains have spoken. If you'd like to use it, please let me know.

Ms. Borrelli, the floor is yours for five minutes.

[Kathy Borrelli, Conservative, Windsor—Tecumseh—Lakeshore, ON]

My question is for Daniel Perry. As you likely know, Jim Balsillie came to committee on April 30. When asked about the Liberal government's performance over the last year with AI, Mr. Balsillie stated, “I would score that it did not attend. You have to understand this is a race, and we haven't gotten out of the locker room.”

What would your grade be for the current government, and do you believe Mr. Balsillie's comments reflect a broader concern that Canada is falling behind in the global AI race?

[Daniel Perry]

It's always hard to go up against Jim, so I'll let him speak for himself.

I do think we find ourselves in a real moment and a real challenge here. As I said in my opening remarks, the delay from the government on the AI strategy is putting our firms behind. We are seeing other countries scale up and innovate faster, and we are falling behind. This really is a moment for a generational change, not just for our generation but for future ones as well.

Once the AI strategy does come out, we are going to have to hit the ground running. Groups like the CCI and others are here to champion all Canadian companies to make sure they can meet the moment. We have a lot of great talent, great ideas and great companies, and we really want to make sure they are in the best position possible. We believe the AI strategy will be a good step towards this. We just need to see the details.

[Kathy Borrelli, Conservative, Windsor—Tecumseh—Lakeshore, ON]

Adoption remains a challenge, particularly among small and medium-sized businesses. What are the biggest barriers preventing Canadian firms from integrating AI into their operations today? What role should government play in accelerating that adoption?

[Daniel Perry]

Government really needs to be on the forefront of this. Government has the tools and capabilities to be an early adopter and to signal to the market that AI is not something we should be scared of; it is a tool to help our productivity.

The government should be the first customer in the door. They should move forward first. When the private sector sees the government moving, that is a sign to them, a green light.

I would like the government to be that first customer, to find Canadian companies to work with and provide solutions. We have a number of great Canadian companies. We have the privilege of representing 175 of them, but there are many more out there.

[Laurent Carbonneau]

Just to add one thing, I think you've put your finger on the problem: Canada's economy is structurally extremely reliant on SMEs. SMEs are great, but our problem is that we can't grow these SMEs into larger businesses.

This is the challenge that CCI is here to address. We want to turn start-ups into big scale-ups that can compete internationally with the biggest of the biggest. That's what we struggle to do as a country because too many of our scale-ups get bought out and move to the States.

When we ask our companies why they are in Canada, they almost never say this is the best place for them to grow their businesses. They care about the country and want to stay here. They're invested here. Their families are here.

At CCI, we want to get where people say this is the best place to do it. That's a policy question, not a culture question.

[Kathy Borrelli, Conservative, Windsor—Tecumseh—Lakeshore, ON]

Do you have any other practical recommendations that government could use to improve Canada's AI ecosystem?

[Daniel Perry]

A big part of it is the buy Canada piece, being the first customers and getting those purchase orders out the door to companies. Grants are great, but what really helps businesses is having those contracts. They can not only be given better terms when they go to banks but also be reassured when they sell abroad.

As I said, the first thing to find out is why the Canadian government is not buying from them. Instead of having to do that awkward dance, they can confidently say that the Canadian government is buying from them, and others should as well.

That is one of the first steps. I think it would create an environment for capital to grow here and would make it easier to invest.

[Kathy Borrelli, Conservative, Windsor—Tecumseh—Lakeshore, ON]

Thanks so much.

[The Chair, Liberal, Ben Carr]

Mr. Bains, the floor is yours for five minutes.

[Parm Bains, Liberal, Richmond East—Steveston, BC]

Thank you, Mr. Chair.

Thank you to our witnesses for joining us in this discussion.

Ms. Simmons, there have been challenges around scaling for decades, when businesses want to expand. Can you shed some light on how the modularity of Photonic's industrial design appeals to global markets?

[Stephanie Simmons]

It's wonderful. I think the whole landscape is shifting. We can hit bigger scales because of the tools we have. This is now a global marketplace, and Canada can compete.

There are glimmers of exactly what was shared in the previous comments. This is a wonderful place to build a business—almost. We have amazing talent. We have an amazing quality of life and a competitive spirit that can win if we double down on it.

The world wants to buy from Canada. We have a brand that is a competitive place to start from. I agree with the other comments—we need to buy Canada in a way that lets the rest of the world buy Canada.

One of the programs accelerating the entire quantum industry is the U.S. DARPA QBI. We should look to it, and we have looked to it. I'm so proud of the Canadian response to build a Canadian quantum champions program and to use those same kinds of instincts, which are to learn and to buy from Canadian businesses, and to put them into the position where they are then able to sell not just to the Canadian government, but also to other allied nations and beyond.

These programs are just getting started, and they're phenomenal.

[Parm Bains, Liberal, Richmond East—Steveston, BC]

Ms. Simmons, you mentioned the U.S. There was a report by Bloomberg indicating that “Almost half of the US data centers planned for this year are expected to be delayed or canceled...[largely due to] the shortage of electrical equipment...transformers...and batteries.”

How will the architecture of Photonic's design be able to manage these kinds of shortages and bottlenecks? Maybe you can expand on that, and then speak to the challenges that exist in scaling AI-ready data centres in Canada.

[Stephanie Simmons]

I can speak to how quantum will help with a piece of that puzzle. I will give you an interesting data point. It would take more classical bits than there are atoms in the universe...than it would to encode 300 qubits. Just from a pure information density...quantum unlocks something that we have never ever seen before. Moreover, for Photonic's architecture, it would take less than 30 kilowatts to drive that kind of computing capability. Let's just think about what that means. This is what nature uses to compute, and we are going to be leveraging that for humanity's benefit. It does still take some time. We have some work to do, but the energy conversation shifts dramatically on a quantum platform.

[Parm Bains, Liberal, Richmond East—Steveston, BC]

I'll go to Mr. Perry. In budget 2025 the government announced $1.7 billion to recruit top international researchers. What federal programs or policies could further strengthen recruitment and retention in the AI space, in your mind?

[Daniel Perry]

We are proud founding members of the global talent stream. That is a program that helps companies bring highly skilled individuals into the country to address the very specific challenges that they're having. I think it's leveraging programs like that and finding places where we can attract Canadian talent back to Canada. Like I said, we have really great institutions here. I think of the Waterloo region, for instance, with the presence that BlackBerry created; it really has become a hub for engineering. We see lots of those graduates go south of the border. A little bit changed just recently, but broadly speaking we need to find a way to bring them back.

That is creating opportunities for them here to create businesses that allow the businesses to scale here, but also allowing for competitive compensation packages as well. Also, it's just ensuring that we have an environment that entices them to stay here and build a business here.

[Parm Bains, Liberal, Richmond East—Steveston, BC]

I'm from British Columbia. We have a lot of strength in B.C. in this space. How do federal investments in research, infrastructure and talent contribute to what we ultimately want to achieve as a commercialization and industry success?

[Daniel Perry]

I think what we need to do on that front is not just look at the amount of money we're spending, but look at the outcome—going back to the intangible assets of where IP is being generated, where it is being stored, where the data is being stored—and understanding how we are building for the economy of tomorrow. We do have lots of those strong assets, but when they reach the point of scaling and growing, they're leaving Canada. We need to find opportunities and ways to keep them here that create a better environment for them to grow.

[The Chair, Liberal, Ben Carr]

Thanks, Mr. Bains.

Witnesses, thank you very much for availing yourselves to us today. We appreciate your input.

Colleagues, this is the end of the fourth week of four in a row. We get two at home and then four or so back here. Rest up. We're going to continue this conversation when we return with some other businesses before us, but I think it's been an incredibly productive month's worth of meetings here. I appreciate everybody's collaboration and contributions as always, and I'll look forward to picking this up when we return in a few weeks.

Thanks very much to all members of the House of Commons support team as well.

The meeting is adjourned.