New Munk School Report Maps Canada’s AI Sovereignty Vulnerabilities, Offers Strategic Options for Action

First comprehensive assessment of Canada’s entire AI technology stack identifies cloud infrastructure and compute hardware as critical chokepoints, and lays out realistic options for protecting Canadian AI sovereignty

TORONTO, March 10, 2026 /CNW/ – A new report from the Munk School of Global Affairs and Public Policy at the University of Toronto provides the first systematic, layer-by-layer assessment of Canada’s position across the entire artificial intelligence technology stack. The report finds that critical gaps in cloud infrastructure and compute hardware leave the country vulnerable and weaken its competitiveness at a moment of unprecedented geopolitical uncertainty.

Sovereign by Design: Strategic Options for Canadian AI Sovereignty, authored by Sean Mullin and Jaxson Khan, argues that sovereignty in the AI era means freedom from coercion, not digital isolationism. The report presents a practical, risk-based framework of strategic options that would allow Canada to continue to participate fully in global AI markets while preserving choice, reducing foreign leverage, and ensuring that Canadian data and infrastructure remain governed by Canadian laws.

“Canada can no longer rely on widely-accepted rules to protect its interests in the physical or the digital realm,” said Professor Janice Gross Stein, Founding Director of the Munk School of Global Affairs and Public Policy and University Professor at the University of Toronto. “Sovereign by Design provides a rigorous, comprehensive assessment of Canada’s assets and vulnerabilities across the AI technology stack, and a clear menu of strategic options calibrated to the risks we face. The window for action is open, but it will not remain open indefinitely.”

Key findings:

The report analyses Canada’s position across seven layers of the AI technology stack and evaluates each against five dimensions of digital sovereignty. The resulting vulnerability assessment identifies two critical chokepoints: cloud infrastructure and compute hardware. Canada is largely dependent on foreign providers for access to advanced AI compute and many Canada-based data centres may be subject to the laws of other countries, exposing them to potential geopolitical risk.  Second, extreme supplier concentration in compute hardware creates technological dependencies that no single country can resolve alone.

But the report also finds that Canada has genuine strengths to build on: clean energy that attracts global data centre investment, world-leading AI research talent, a growing ecosystem of Canadian-owned infrastructure providers, and one of very few commercial foundation model companies outside the United States and China. Open-source AI models and multinational collaboration among like-minded middle powers offer additional pathways to reduce dependency without sacrificing capability.

Strategic options:

Rather than prescribing a single course of action, the report offers policymakers a structured menu of options calibrated by data sensitivity, cost, and institutional context. Priority interventions could include:

• Sovereign cloud infrastructure as a high-priority action, with three models (self-hosted, juridical, and contractual sovereignty) calibrated to workload sensitivity.
• A managed dependency strategy for compute hardware, linking Canadian energy and critical minerals to technology access and diversifying supply chains across allied nations.
• Procurement reform to align government cloud and AI purchasing with explicit sovereignty tiers
• Security classification reform to ensure that governments classify information appropriately and within the parameters of what truly constitutes sensitive information.
• A multinational frontier AI partnership with allied democracies and like-minded nations to pool compute resources and produce open-source foundation models,
• Machinery of government consolidation to address the current fragmentation of digital and AI governance across at least six federal departments and agencies.
• A defensive CUSMA strategy ahead of the July 2026 review, protecting Canada’s policy space on digital sovereignty from US trade pressure.

Timing and context:

The report arrives at a critical juncture. Hundreds of billions of dollars in global AI investment are being committed over the next several years, and the compute infrastructure decisions being made now will shape the technology landscape for a generation.

“The debate about AI sovereignty too often gets stuck between two extremes: build and buy everything domestically or accept total dependence on foreign providers,” said Jaxson Khan, Senior Fellow at the Munk School and co-author of the report. “What this analysis shows is that there is a practical middle path. By identifying exactly where our real vulnerabilities lie and calibrating our response to the level of risk, Canada can make smart, targeted investments that protect what matters most without cutting itself off from global innovation.”

“Canada is the birthplace of modern AI, yet it controls neither the major firms that dominate AI deployment nor the critical infrastructure that powers it,” said Sean Mullin, co-author and Senior Fellow at the Munk School. “This report shows that we have options to strengthen our AI sovereignty, but only if we act deliberately and strategically while the window remains open.”

About the report:

Sovereign by Design: Strategic Options for Canadian AI Sovereignty was produced as part of the AI Competitiveness Project at the Munk School of Global Affairs and Public Policy, University of Toronto. The research draws on extensive interviews with senior government officials, industry leaders, and international experts, as well as a comprehensive analysis of international models for digital sovereignty.

The full report and an accompanying policy briefing note are available at www.aicompetitiveness.ca or https://munkschool.utoronto.ca/ai-competitiveness-project.

The Munk School of Global Affairs & Public Policy’s mission is to be a leader in contributing innovative ideas to help solve major issues facing the global community.

SOURCE Munk School of Global Affairs & Public Policy