Calgary as Canada's AI Hub — Policy Brief

Category: policy

Reading Time: 10 min read

Tags: AI, Policy, Calgary, Innovation

Calgary, Alberta, traditionally known as Canada's energy capital, is rapidly reinventing itself as a technology and innovation hub. With artificial intelligence transforming industries worldwide, Calgary aspires to become Canada's AI hub, rivaling established centers like Toronto and Montreal. This policy brief examines Calgary's strengths and challenges in the AI domain and proposes strategies for positioning the city as a national leader in AI. I will look at current initiatives, the role of government and academia, and what policy measures can accelerate Calgary's emergence as a go-to destination for AI talent, research, and industry.

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Executive Summary for Policymakers

Calgary's AI Opportunity: With 50,000+ tech jobs and second-highest tech talent concentration in North America (CBRE 2023 Tech-Talent Report, data as of 2022), Calgary is positioned to become Canada's third AI hub alongside Toronto and Montreal. Alberta's $100M five-year AI investment (Gov. of Alberta, 2024 budget) and Calgary's $5.2B startup ecosystem (CED 2023) provide strong foundations. Key advantages: low corporate taxes (8%, effective 2025), industry-AI synergy in energy/agriculture, and quality of life attracting talent. Critical gaps: venture capital access, talent retention, and research capacity. Immediate action required: targeted AI incentives, talent pipeline programs, and national collaboration strategy to capitalize on current momentum before other cities advance.

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Background: Canada's AI Landscape

Canada has been at the forefront of AI research for decades – often credited to pioneers like Geoffrey Hinton, Yoshua Bengio, and Richard Sutton, who chose Canadian universities for their work. In 2017, Canada became the first country with a national AI strategy, investing in three main AI institutes: Mila in Montreal, Vector Institute in Toronto, and Amii (Alberta Machine Intelligence Institute) in Edmonton. These hubs have attracted global talent and corporate labs (Google's DeepMind chose Edmonton for its first international AI research office, and Toronto and Montreal host AI labs for companies like Google Brain, Facebook, Microsoft, etc.). For a long time, Calgary was not prominently on the AI map – the Alberta node was largely Edmonton-centric via Amii.

However, Alberta's government and Calgary's civic leaders have recognized the opportunity to expand the province's AI footprint. Alberta announced plans to spend $100 million over five years to grow its AI sector¹, signaling commitment to be "Canada's other AI hub" alongside Ontario and Quebec. With strong economic fundamentals and quality of life, Calgary is now making its case.

Calgary's Current AI Ecosystem

Despite being newer to the scene, Calgary's AI and tech ecosystem has shown impressive growth:

Startup Growth

Calgary's startup ecosystem was valued at $5.2 billion in 2023², with AI-focused startups playing a significant role. A shining example is AltaML, an AI software company co-founded in Calgary that ranked 7th on LinkedIn's 2023 list of top Canadian startups³. AltaML's success – securing major clients and partnerships – exemplifies the momentum in Calgary's tech scene.

Talent and Workforce

According to CBRE, Calgary now has over 50,000 tech jobs, making up 6.9% of total employment. This concentration is the second highest in North America for tech talent (proportionally)⁴. Alberta as a whole boasts one of the deepest pools of AI talent globally, thanks in part to the University of Alberta's world-renowned AI program (Edmonton) and an influx of skilled immigrants and returning Canadian expats attracted by Alberta's opportunities. Amii is often listed among the top global AI research institutes.

Academic and Research Initiatives

The University of Calgary has ramped up its AI-related offerings. It established an AI Research Hub and multidisciplinary programs to complement Amii's efforts. One project, MyHEAT, from U of C uses AI for analyzing thermal imagery to detect home energy loss, and even won an MIT Climate Change prize – showing that Calgary's researchers are gaining international notice. The presence of Amii has also grown: while headquartered in Edmonton, Amii collaborates in Calgary on applied AI projects and talent development.

Corporate Adoption

Beyond pure tech companies, Calgary's dominant industries are adopting AI. Energy firms are leveraging AI for optimizing production and predictive maintenance; agribusiness companies use AI for crop data analytics; and the financial services sector in Calgary employs AI for risk modeling. This broad-based industry adoption attracts AI professionals and provides fertile ground for startups solving domain-specific problems. Local success stories include companies like Chata.ai, which uses natural language processing to enable database queries in plain English (useful for business analytics).

Strengths of Calgary's Position

Several factors give Calgary an edge in its bid to be an AI hub:

Highly Skilled Talent Pool

Calgary benefits not only from local graduates but also from the broader Alberta talent pipeline. The Alberta Advantage in AI talent is real: Amii in Edmonton is often listed among the top global AI research institutes, producing experts who often stay in the region. With competitive salaries and lower living costs than Toronto or Vancouver, Calgary is attracting talent who find opportunity and a great quality of life (proximity to the Rocky Mountains, etc.). The CBRE report highlighting Calgary's tech talent concentration validates that the city punches above its weight in human capital⁴.

Industry-AI Synergy

Calgary's economy provides unique AI application areas. In energy, for example, companies are partnering with tech startups to apply machine learning to geology and drilling data, optimize pipeline flows, and reduce environmental impacts. This creates a virtuous cycle: industry problems spark AI innovation, which in turn attracts AI professionals eager to work on real-world challenges. Similarly, Calgary's strong transportation & logistics sector (being a Canadian Pacific rail HQ and a cargo hub) can deploy AI in supply chain optimization.

Pro-Business Environment

Alberta has one of Canada's lowest corporate tax rates (currently 8%, dubbed the "Alberta advantage"). The province also prides itself on reducing red tape for businesses. From a policy perspective, this business-friendly climate is a selling point for AI companies deciding where to set up. The provincial government's recent AI Data Centres Strategy is a case in point – according to the provincial plan, aimed at making Alberta the most attractive place in North America to build AI data centers. It highlights abundant natural gas (for power), a cold climate (for efficient cooling), and supportive regulations as key draws.

Challenges and Gaps

For Calgary to truly become the national AI hub, certain challenges must be addressed:

Competition from Established Hubs

Toronto and Montreal have first-mover advantages – they host many AI labs of global companies (e.g., Google Brain in Montreal, NVIDIA's AI research in Toronto, etc.), and their institutes have larger international name recognition. They also benefit from proximity to larger markets and, in Toronto's case, Canada's financial center (which helps with venture funding). Calgary will need to differentiate itself and possibly collaborate with these hubs rather than purely compete.

Access to Capital

Although Calgary's tech scene is growing, the city historically doesn't have the same volume of venture capital (VC) as Toronto or the U.S. tech centers. Many Calgary startups have had to seek investors from elsewhere. The policy response could include creating local VC funds or incentives for investors. The Opportunity Calgary Investment Fund is a start, but more private sector VC activity is needed to sustain long-term growth.

Talent Retention

While Alberta produces top AI graduates, retention is an issue – many have historically gone to the U.S. or larger Canadian cities for opportunities. To counter the "brain drain," Calgary must offer competitive opportunities. This includes not just good salaries, but exciting projects (hence the importance of local industries adopting AI) and a vibrant urban environment that appeals to young professionals.

Scaling Research Capacity

Calgary's university ecosystem is on the rise but still catching up. The U of C doesn't yet have the sheer volume of AI research output that U of T or McGill or U of A (Edmonton) have. Continued investment in research chairs, labs and maybe establishing a dedicated AI institute in Calgary would help.

Policy Recommendations

To address the above, this brief proposes several policy measures and initiatives:

1. Talent Pipeline Enhancement

Expand funding for AI education in Calgary. This includes more scholarships for AI-related degrees at U of C, creating a flagship co-op/internship program that places students into local AI companies or AI teams in industry, and bootcamp-style training for professionals looking to upskill into AI roles. The Applied AI Lab by AltaML (funded by OCIF) is a great model – scale up such programs to continuously feed skilled workers into the ecosystem.

2. Incentivize AI Investment and Startups

Building on the low-tax environment, introduce targeted incentives for AI. For example, tax credits for R&D specific to AI or automation (similar to SR&ED but possibly richer for AI projects), or rent subsidies for AI startups in the first two years if they locate in Calgary. The city could also create an "AI Hub Zone" – perhaps in the downtown where vacancies are high – offering breaks on property tax or leases for AI companies that cluster there.

3. National Collaboration Strategy

Rather than competing in isolation, Calgary should integrate into the Pan-Canadian AI Strategy more strongly. A policy could be to formally establish Calgary as an expansion node of Amii or Vector, leveraging their networks. For instance, Calgary could host a branch of the Canada CIFAR AI Chairs program. The advantage of this approach is branding Calgary as part of the Canada-wide effort, benefitting from the existing hub reputations while highlighting Calgary's unique contributions.

4. Industry-Academia Consortium

Create a public-private consortium focused on AI in Calgary's key sectors (energy, agriculture, logistics, health). For example, an "Energy AI Center" where oil/gas companies, tech firms, and the university collaborate on applying AI for clean tech and efficiency. Government can seed-fund such centers, requiring industry matching funds, to ensure relevance and buy-in.

5. Marketing and Events

Launch a branding campaign – "AI in the Rockies" or "Calgary: Canada's AI Frontier" – to tell Calgary's story. This includes a strong digital presence, success story showcases, and globally targeted content. Simultaneously, bring the world to Calgary: pursue hosting rights for major AI conferences, or if not immediately possible, start with annual local conferences that draw international attendees.

Conclusion

Calgary's transformation into Canada's AI hub is within reach, building on existing strengths: North America's second-highest tech talent concentration, $100M provincial investment, and strong industry-AI synergy. With Toronto and Montreal established, Calgary has a narrow window to claim the third position before other cities advance.

Next Steps for Council - Immediate Action Required:

• Launch AI Hub Zone by Q3 2025 (proposed target): Designate downtown core as special economic zone with 5-year property tax breaks for AI companies, targeting 50 new AI businesses and 2,000 jobs by 2027 (goal).

• Establish $25M AI Talent Fund (proposed target): Partner with Province and U of C to create scholarship program, AI bootcamps, and industry co-op placements, retaining 80% of AI graduates locally (goal) through guaranteed internship-to-employment pipeline.

• Secure National AI Conference by 2026 (proposed target): Bid for major international AI conference hosting rights, positioning Calgary alongside Toronto/Montreal as recognized AI destination and attracting global investment attention.

Calgary's window of opportunity requires immediate, coordinated action. These three initiatives will establish momentum, attract talent and investment, and position Calgary as Canada's third AI hub within 24 months.

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All targets are proposed; statistics current to January 2025.

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References

¹ Government of Alberta AI Strategy - Alberta's $100M five-year AI sector investment announcement

² Calgary Economic Development - 2023 startup ecosystem valuation report

³ LinkedIn Top Startups Canada 2023 - AltaML ranking #7 on LinkedIn's annual list

⁴ CBRE Tech Talent Report 2023 - Calgary tech employment statistics and North American ranking