As a key component of Canada’s technology and innovation policy, artificial intelligence (AI) is quickly transforming a variety of industries, including manufacturing, agriculture, healthcare, and finance. By 2026, it is expected that global AI spending will have surpassed US$300 billion. Canada is establishing itself as a leader in this field with its top-notch research facilities, such as the Vector Institute in Toronto and Mila in Montreal, as well as robust public investments like the Pan-Canadian AI Strategy. In addition to improving productivity and decision-making, AI is establishing a new benchmark for how Canadian companies and government agencies function in a data-driven environment by fusing state-of-the-art research with early industry use. This article explores the trends of AI in Canada for 2025.
1. AI Reasoning & Agentic AI
Next-generation AI technologies that go far beyond basic automation are being quickly adopted by Canadian enterprises in 2025. With their emphasis on AI thinking, these new models can make judgments on their own, understand complicated situations, and optimize processes with little assistance from humans. As a result, there is a shift toward agentic AI, or systems that are capable of handling financial transactions, monitoring compliance, and answering client questions on their own.
According to KPMG’s 2025 poll of business executives, 64% of Canadian companies are testing or piloting agentic AI, while 27% have already started using the technology. Citing advantages including quicker information access, increased productivity, and immediate cost savings, nearly 60% of respondents said they intend to invest in agentic AI within the next six months. However, the majority concur that workforce upskilling is necessary for successful adoption, and 72% of leaders identify a knowledge gap regarding how agentic AI fits into their operations.
2. AI-Driven Customer Experience
In addition to speed, Canadian customers today demand emotionally intelligent digital encounters. To provide human-like, sympathetic support, AI-powered systems anticipate needs, tailor recommendations, and even decipher emotional signs. Customer sentiment is driving an AI-powered revolution in support systems, as evidenced by the 66% of Canadians who anticipate AI to understand emotional cues, according to a ServiceNow-Opinium survey.
The foundation of this revolution is agentic AI. Autonomous agents are being used by Canadian companies for 24/7 customer support and dynamic pricing, among other tasks. Toronto-based businesses are implementing AI chatbots and recommendation engines that use browsing and purchase history to customize each interaction. Previously unattainable scalability and customization are now possible for small and medium-sized businesses thanks to these AI technologies. The benefit? Increased levels of client happiness, loyalty, and retention.
3. AI Adoption: The Canadian Picture
The usage of AI is rapidly expanding in Canadian sectors. By 2025, 12.2% of Canadian companies said they were utilizing AI to create products or provide services, which is a doubling from 2024. 21.5% of professional and technical enterprises view AI investment as “extremely critical,” particularly for increasing productivity in the face of ongoing labour shortages. Nonetheless, 41% of Canadian businesses still believe AI is “not relevant” to their operations, indicating a nationwide problem in bridging the knowledge gap regarding AI’s advantages.
Smaller companies are trailing behind larger companies in AI adoption and agentic AI trials, in part because of a lack of clarity regarding the labour impacts and operational benefits. Experts advise taking a stepwise strategy to get around this: begin with well-defined use cases (such as AI-powered marketing or sales automation), spend money on rudimentary training, and gradually progress toward integrated, agentic processes.
4. Challenges & Workforce Transformation
Despite widespread enthusiasm, Canadian businesses face significant challenges in fully implementing AI. Data quality, privacy, and cybersecurity are the three primary concerns, as suggested by a KPMG survey. More than half of the respondents admit that their staff is not ready to work with AI agents, and over 90% say that significant upskilling is necessary before widespread deployment. It is reasonable to be concerned about job displacement: Even though 82% of leaders believe that agentic AI would reduce the number of employees, many are also aware that if adoption is rushed, there is a risk that institutional expertise will be lost and staff morale will suffer.
According to experts, the future of the workplace will involve creating human-agent teams rather than replacing humans, with AI handling routine jobs and staff members assuming more creative and strategic responsibilities. Businesses that are prepared to spend money on ethical AI frameworks and training stand to gain a significant amount of increased profitability, which survey participants estimate to be between 5 and 15%.
How Canada’s AI Path to Global Leadership Is Shaping the Future For Innovation and Prosperity
The goal of Canada’s transformative AI revolution is to completely reshape how sectors function, compete, and provide value, not just use state-of-the-art tools. The nation is transitioning from experimentation to scalable, practical AI integration thanks to top-notch research centers, progressive public policy, and growing enterprise use. Closing the knowledge gap, encouraging human-AI cooperation, and investing in workforce-skilling investments will be critical to success. If these conditions are met, Canada will be in a position to lead the world in AI innovation and guarantee that the advantages are widespread, long-lasting, and economic revolutionizing.
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