The AI economy is booming in the U.S., but Canada is struggling to keep up. While the U.S. is investing heavily in data centers and AI-related infrastructure, Canada is lagging behind in terms of construction projects and business adoption. This disparity is reflected in the trade front, with Canada largely sitting out the rush to secure AI-related equipment from overseas. The U.S. is spending more on data center construction than ever before, with a 180% increase in annualized spending in just three years. In contrast, Canada's data center construction activity is limited, with municipalities issuing just $188 million worth of permits for all types of communication buildings in the last 12 months. This is despite the growing public backlash over water and energy-use fears. Canada's smaller size and the difficulty of securing semiconductors are partly to blame for the lag, but the larger bottleneck is access to power in Canada's heavily regulated electricity market. Alberta is the only fully deregulated power market, but even there, developers face opposition to their data center plans. Canada needs to be realistic about its data center goals and avoid using the U.S. as a yardstick to compare itself against on AI. The U.S. is in a world of its own when it comes to AI's effect on the economy, with a widening gap in business investment and a growing antipathy toward AI in Canada. The AI gap between Canada and the U.S. is concerning, and it's not just about data center construction. It's about the yawning disconnect between business investment in innovative technologies between the two countries. Canada's poor track record and the widening gulf in business investment don't bode well for the future.
