The 2024 Canadian Federal Budget & Implications for Engineering Innovation

With substantial allocations directed towards artificial intelligence (AI), climate action, international assistance, housing, and the research sector, the budget lays out the possibility of a foundational blueprint for innovative growth and societal advancement. The new budget is our opportunity to work with developing countries through the lens of true partnership and capacity building, leading to sustainable development and a larger world economy, but that is where it falls short.

As an engineer who has worked in Canada’s technological innovation space for over 25 years, I see this budget as a late but essential acknowledgement of our imperative to compete in the global race to innovate while preserving the standards of living Canadians have come to expect. As a Canadian working in international development, I am disheartened by our government’s lavish domestic spending in innovative sectors without simultaneously leveraging that spending to disseminate that invaluable home-grown knowledge, experience and investments to countries that are in much greater need of innovation boosts. It’s time for Canada to not only invest in our own future but also to support those who stand to benefit the most from our advancements.
– Brian Harrigan, CEO, Engineers Without Borders Canada

While the new budget signifies a step forward in positioning Canada as a leader in technological innovation, how will it actually translate to Canadian-led tech transfer and technical assistance, desperately needed climate reform and the country’s international impact, particularly through the lens of the engineering community? Will the most marginalized people and communities benefit in an equitable way?

Artificial Intelligence (AI)

To begin, the budget mentions productivity 63 times. In fact, it dedicates $7 billion to it, the bulk of which is headed for AI. Prime Minister Trudeau emphasized the government’s commitment to enhancing AI adoption across pivotal sectors such as agriculture, healthcare, and clean technology, with an investment of $200 million aimed at democratizing the benefits of AI innovations. This new investment intends to bolster Canadian engineering capabilities, fosters innovation, and support startups and SMEs to facilitate development. Finance Minister Freeland highlighted Canada’s competitive advantages:

“We have a natural edge: we have abundant and clean electricity; we have skilled and experienced engineers; we have the cold climate needed to help cool supercomputers; and we are physically close to the world’s largest market which has vast data processing needs.”
– Chrystia Freeland, Deputy Prime Minister and Minister of Finance

Earmarks include:

• $2.4 billion investment in the AI Compute Access Fund and the Canadian AI Sovereign Compute Strategy to enhance computational capabilities.
• $405 million to support AI startups and safety initiatives, including the establishment of the AI Safety Institute of Canada.
• Enforcing the Artificial Intelligence and Data Act to ensure responsible AI deployment.

The new funding for AI underscores the need for a collaborative approach in technology transfer and international tech engagement to amplify Canada’s global impact. Successfully integrating AI technologies requires far more than just tech deployment. Adopting a digital-first approach to decision making and upskilling is essential for any of this to be legitimately equitable for all. The youth training investment trend throughout the new federal budget exemplifies this equitable intent, though the budget also falls very short in relation to the Indigenous infrastructure gap. With $349 billion needed – $5 billion of which is specifically related to digital connectivity – only $918 million over five years will be used to support this in the new budget.

On top of those gaps that will heavily impact marginalised communities most in need, there are still no details on how most of these initiatives will be implemented, underscoring the value of the government’s commitment to engage with industry researchers and technologists, who are uniquely positioned to effectively build out those plans.

EWB Canada emphasizes the need to collaborate with universities, technical institutes, research centers, and industry sectors for innovation, as well as other stakeholders, to advance AI research and development. Making sure engineers and technologists, particularly those who can add an international lens and approach, are an active part of the process is how Canada can truly leverage the impactful work that is already being done.

Climate Action & International Assistance

Despite the escalating urgency of climate change, the budget’s climate-related allocations have not proportionately increased, with only $2 billion designated for new climate initiatives over the next five years. This represents a stark contrast to the increasing impacts of environmental and economic challenges posed by global warming, which don’t stop in the absence of funding.

“Considering Canada’s leadership position in international climate finance negotiations, we were disappointed to see the budget’s failure to focus on the climate investments necessary to support the most vulnerable and marginalised. While it was positive to see the push for AI access and infrastructure, without more effectively leveraging Canada’s powerful pool of technical knowledge to develop impactful tech for good, we are undermining any chance of meeting critical climate goals.”
– Shivani Patel, COO, EWB Canada (See what our civil society partners had to say about this.)

For example, the budget highlights:

• Only $2 billion in net new climate spending, a decrease from previous years.
• Over $14 billion shortfall in committed versus actual climate investments over the past decade.

New humanitarian funding of $350 million over two years to the International Assistance Envelope, is welcomed. We applaud the additional spending, signalling an important step towards global humanitarian efforts, including in the capacity for infrastructural resilience in crisis-hit regions.

EWB Canada encourages the government to align this focus with the urgent need for increased resources to adequately address climate challenges, and involve engineers who are pivotal in deploying these funds efficiently and innovatively.

Housing

Where the budget is making significant strides is in the substantial investments aimed at enhancing housing affordability and infrastructure. The budget presents multiple opportunities for engineering innovations in construction technologies.

“This budget is a positive step for Canada’s engineering profession…The budget contains important new investments that aim to grow our economy in sectors where engineers play a leading role, like construction and artificial intelligence. We look forward to further consultation with the federal government on the implementation of these measures.”
– Gerard McDonald, CEO of Engineers Canada

This includes:

• $15 billion in new loans through the Apartment Construction Loan Program to support over 30,000 new homes.
• Public land acquisitions to facilitate housing projects.
• $400 million to expedite the development of 12,000 new homes via the Housing Accelerator Fund.

Still, the housing sector is notorious for its significant contribution to the climate crisis. Its greenhouse gas emissions are second only to transportation, with energy inefficient housing lacking any substantial climate resiliency exacerbating these emissions. Despite a funding cut from the now inaccessible Greener Homes Grant, the new $800 million Canada Greener Homes Affordability Program presented in the budget aims to improve energy efficiency, particularly for lower-income households. We see that this more targeted approach means this lesser-funded program could still yield a greater impact than its more robust predecessor, and we are excited to see the potential it has.

Engineers will play a crucial role in integrating sustainable practices and modern construction technologies into these developments. This presents an important opportunity to address growing affordability and access concerns with the necessary climate resiliency that must be baked into every plan.

Research, Education, and the Engineering Profession

The budget additionally increases funding for Canada’s research ecosystem, particularly in engineering and technology sectors, which are instrumental in driving national productivity and innovation.

• $2.6 billion in core research grant funding, scholarships, and fellowships.
• $734 million for research infrastructure and institutes.

These investments, including the strengthening of the Natural Sciences and Engineering Research Council (NSERC) to support basic and applied research and enhancements to the SR&ED program and new tax incentives to foster research and development, will bolster the engineering sector’s capacity to lead advancements in AI, clean technology, and infrastructure development.

What’s Next

The 2024 Canadian Federal Budget presents the beginnings of a robust framework for technological and economic growth, with substantial investments in AI, climate action, housing, and research. As these sectors are intrinsically linked to engineering innovation, there is a critical need for engineers to collaborate closely with the government, not only in implementing these initiatives but also in future policy formulations.

By leveraging their expertise, engineers can ensure that Canada maximizes its technological and societal impact both domestically and internationally. This impact extends beyond our borders, as engineers play a pivotal role in addressing global challenges facing marginalized communities and the environment. As stewards of innovation, engineers can help spearhead initiations that support significant sustainable development and social equity worldwide.

Moving forward, it is imperative for the engineering community to engage proactively with governmental bodies to amplify Canada’s contributions to global challenges, aligning with national goals and international responsibilities. Through collaboration and innovation, Canada could lead the charge in creating an equitable future for all.

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