In October, the federal government added $500 million over five years to its regional artificial intelligence initiative, bringing the program’s total to $700 million. A month earlier, it launched a $13-million national AI literacy initiative with Amii, the Alberta Machine Intelligence Institute.
The national strategy names rural communities as a priority and both programs deliver through regional networks. However, regional is not the same as rural and neither program sets aside a defined share of funding for rural communities, which is essential.
Ottawa’s national AI strategy sets a target of 60 per cent of Canadian businesses using AI by 2034. Statistics Canada reported in June that 21 per cent of urban businesses had used AI in the previous 12 months, compared with just 9.9 per cent of rural businesses.
According to the OECD report Enhancing Rural Innovation in Canada, about one in five Canadians lives in a rural region. A national target of 60 per cent is not attainable while this one-fifth of the country adopts AI at less than half the urban rate.
The common explanation for the low AI uptake in rural regions is that businesses there are simply less innovative. My work and other research both point instead to a problem of policy design.
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Ottawa should change the way it measures innovation in rural areas to get a clearer picture of what is actually happening, and allocate a defined share of its existing AI and literacy funding through rural organizations that can reach local problem-solvers. This requires no new spending, only a fairer share of existing funds.
Measuring rural innovation and routing funding through rural institutions would let rural Canada contribute fully to national targets – as a partner rather than a host.
Other countries do better
I lead Southeast TechHub, a rural innovation centre in Saskatchewan named the 2025 Project of the Year by the Saskatchewan Economic Development Alliance. Its RISE program is a first-of-its-kind regional startup incubator, and the hub also strengthens the ability of rural communities to adopt and benefit from new technology. I am also writing a thesis on rural innovation.
The OECD’s report found an “inherent urban bias” in federal innovation policy, attributing it partly to the large share of federal funding that flows through city-based universities.
Other countries counter that tendency with dedicated institutions. The European Union has for more than 30 years reserved a portion of its rural development fund for community-led delivery. The United States operates a permanent rural development agency with 47 state offices.
Ottawa introduced a rural lens in 1998 to assess federal policy as part of its Canadian rural partnership, but the Rural Secretariat that administered it was dissolved in 2013.
Measuring the wrong things
Rural Canada is not an innovation desert. It is an innovation blind spot.
Patents and research spending remain the standard innovation measures, but the OECD’s Oslo Manual, the international standard for innovation statistics, is broader than those measures. The late Fred Gault, who chaired the OECD’s expert group on science and technology indicators, explained (page 619) that an innovation is any new or significantly changed product or process that an organization puts into use or makes available to users.
Craft brewers in the Gaspé told the OECD that patenting each new product would cost more staff time than they had. They innovate without patents.
Direct surveys tell a different story. In a 2026 study of 172 firms in regions of Quebec far from major cities, David Doloreux and Richard Shearmur found that 74 per cent (page 13) had introduced a technological innovation and 44 per cent had introduced a product new to their market.
They needed their own survey here because Statistics Canada reports this only at the provincial and metropolitan level.
In England, a matched comparison of rural and urban small businesses found “no systematic or consistent evidence that an urban location stimulates higher rates of innovation.”
Nonetheless, distance still matters. Doloreux and Shearmur also found that the most remote firms are less likely to produce radical innovation. But less likely is not unable.
The OECD has already specified the remedy for Statistics Canada: publish harmonized innovation statistics separately for rural and urban areas. Policy cannot support innovators it does not measure.
The step before innovation
Rural communities contain many people who already solve their own problems, such as farmers who modify equipment.
In her teaching, Sharon McIntyre, my professor at Royal Roads University, describes the stage before formal innovation as “innovation level zero” – the point at which creative problem-solvers begin to see themselves as innovators and to share what they have made. Most innovation policy engages only after that transition. Rural Canada needs support earlier.
AI has shortened that stage. Software once required a development team, typically in a city. Today, anyone who understands a problem can build a solution with AI, wherever they live. I built a working system in a heavily regulated field in about five weeks of part-time work. But access is only half the equation. AI literacy turns access into capability.
That is why Amii’s delivery design matters. Its public stream will run through community partners while the national strategy commits to working through libraries and community organizations, especially those in “rural, remote, and northern regions (pillar 2).”
Rural hubs are ready to be those partners. Southeast TechHub, the rural innovation hub I lead, runs AI workshops and Promptmasters, a free peer group modelled on Toastmasters, where members practise with AI on real problems and critique each other’s work.
Our gameathon teaches rural youth to build software with AI through competition. Next come classes and support for local governments and firms adopting AI. A defined share of the new federal literacy money should reach rural tech hubs and rural colleges doing this work.
Routing funding through rural institutions
The federal regional artificial intelligence initiative is delivered through the regional development agencies but without a rural allocation. So rural delivery depends on individual decisions, not design.
Canada already has a suitable delivery mechanism. Since 1985, the community futures program has operated through 256 locally governed organizations serving small and remote communities. Its national evaluation found a strong need for the program in the communities it serves.
Ottawa should use the program and rural tech hubs to deliver a rural share of the funding.
What communities can’t see
AI infrastructure is also headed for rural land. Bell’s planned data centre in the Rural Municipality of Sherwood outside Regina could grow to 1.2 gigawatts. At the other end of the debate, a hyperscale proposal south of Winnipeg drew more than 13,000 signatures opposing it in an online petition before Manitoba’s premier rejected it. Both are legitimate outcomes.
In my rural community, people ask why we would host a data centre. Once built, data centres offer few jobs for their size, so residents have a case on that point.
What the digital divide hides is what else is on the table. The opportunities for local business can be harder to see when AI training is scarce. In 2021, Canadians living outside cities and larger towns made up 15 per cent of the workforce but only three per cent (author’s calculations) of its computer and software professionals.
In Saskatchewan, nine in 10 of those professionals live in Regina or Saskatoon. Why? Many rural communities have no computer-science training facilities. When my hub opened in 2022, no college in Saskatchewan south of the Trans-Canada Highway offered any.
Before the regional-development agencies allocate the new funding, rural members of Parliament should ask what share will reach communities of fewer than 10,000 people.
If no one can answer, the blind spot remains.
Disclosure: In May, Innovation Saskatchewan committed $149,000 over three years to the hub led by the author. He also teaches the kind of AI literacy he’s recommending.
