‘Recession is not the word I would use’: Bank of Canada governor

ByRachel Aiello
and

Spencer Van Dyk

Updated: June 10, 2026 

Bank of Canada Governor Tiff Macklem. (The Canadian Press)

Amid weeks of debate in the House of Commons on Canada slipping into a technical recession, Bank of Canada governor Tiff Macklem says that based on the data he’s seen to date, this country’s economy is weak, but “it is not clearly in recession.”

“There’s been a lot of volatility, month to month, quarter to quarter, but when you look through the bumps, I mean the economy hasn’t really grown in the last year, but it hasn’t shrunk either,” Macklem said Wednesday following his interest rate announcement, when asked if he believes Canada is in a recession.

Canada’s economy saw a contraction of GDP on an annualized basis in the last two quarters — by 0.2 per cent in the end of 2025 and by 0.1 per cent in the beginning of 2026 — meeting the definition of a technical recession.Is Canada’s economy in trouble? What the latest GDP and job numbers mean for you

Macklem noted, however, that while economists typically define a recession as “a significant broad-based decline in economic activity that lasts for more than one quarter,” what is happening in Canada currently doesn’t meet that threshold, in his estimation.

“The first quarter was just barely negative after the decline in the fourth quarter last year,” he said. “If you look across industries, what you see is that, in the first quarter, more than half of industries actually grew, expanded on a year-over-year basis.”

“And as I mentioned, the unemployment rate has been relatively stable in the six-and-a-half to seven per cent range,” he also said. “So far, we have not seen a significant broad-based decline in economic activity.”

Partly contributing to the GDP contraction is that while oil exports are up, other exports, such as cars and trucks, are down, with the auto sector being one of many that is heavily reliant on the United States.

Doubling down, the central banker explicitly stated that “recession is not the word (he) would use,” while noting the Bank of Canada continues to assess all factors and is “prepared to respond as needed.”

Bank of Canada senior deputy governor Carolyn Rogers has also warned not to put too much weight on the technical recession definition, but the issue has dominated debate in the House of Commons

.

Conservative leader Pierre Poilievre rises in the House of Commons in Ottawa, Tuesday, April 14, 2026. THE CANADIAN PRESS/Adrian Wyld

Issue dominating political debate

The governing Liberals have downplayed the data, pointing to a stellar jobs report Friday, as the Opposition Conservatives continue to press on the issue.House Speaker denies Poilievre’s request for emergency debate on Canada’s economy

“There’s nothing technical about coming home from work and telling your kids that you no longer have a job and that you’re going to have to sell the house because Canada has the second highest unemployment in the G7,” Conservative Leader Pierre Poilievre said in the House of Commons two weeks ago. “That is not technical, it is real. This is a full-blown Liberal recession.”


In response, Finance Minister François-Philippe Champagne pointed to the Liberals’ “generational investment in infrastructure, in housing, in productivity and innovation,” and said the federal government is supporting Canadians with affordability measures.

Despite Macklem’s declaration, Poilievre continued to criticize the government in question period Wednesday for what he’s been calling a “Liberal recession,” and seizing on the Bank of Canada governor’s use of the word “weak” to describe the economy.

“That translates into lost jobs, lost homes, and bigger lineups at food banks,” Poilievre said. “Will the prime minister stand today, reverse the Liberal policies that caused this recession?”

Energy and Natural Resources Minister Tim Hodgson, meanwhile, accused Poilievre of “cherry picking” his points by leaving out Macklem’s assessment that Canada is not in a recession.


Rachel Aiello
National Correspondent, CTV News

Spencer Van Dyk
Writer & Producer, Ottawa News Bureau, CTV News

Bank of Canada holds key rate steady in fifth consecutive decision

By

The Canadian Press

Opens in new window

Published: June 10, 2026 

Bank of Canada governor Tiff Macklem doesn’t think the economy is in a recession, but he does acknowledge some recent weakness -- something other economists argue should give the central bank more leeway to keep its key interest rate steady for the rest of the year.

The central bank’s policy rate remains at 2.25 per cent Wednesday after the central bank’s fifth consecutive hold, a move that was widely expected by economists.

The Bank of Canada’s rate decision arrived after days of debate over whether the country is in a recession, triggered by a second straight economic contraction in the first quarter of the year.

Macklem said Wednesday that the economy was weaker than expected in the first quarter as U.S. trade policy and the war in Iran spur geopolitical uncertainty.

Asked whether he thought the economy was in a recession, Macklem said that label isn’t yet warranted -- echoing the chorus of economists who argue the current downturn fails to meet that bar.

“Based on the data we’ve seen to date, the economy is weak, but it is not clearly in recession,” Macklem said.

In its April forecast, the Bank of Canada called for growth of 1.5 per cent in the first quarter of the year. Macklem chalked much of that miss up to an unexpected pullback in government spending, which he said can be choppy from one quarter to the next.

While there’s been some volatility in the economy and labour market over the past year, Macklem said the wider trend is of flat growth, not a pronounced decline. More than half of Canadian industries were also growing in the first quarter of the year despite the marginal headline decline, he noted.

Recent economic data, including a strong May jobs report, signals the economy could rebound in the second quarter of the year, Macklem said.

“So far, we have not seen a significant, broad-based decline in economic activity,” he said.

“Recession is not the word I would use.”

Macklem highlighted that the upcoming review of the Canada-U.S.-Mexico agreement, or CUSMA, comes with significant risks for the economy. An outcome that sees current tariff levels ratchet up, or that sees uncertainty persist into the second half of the year, would hamper Canada’s economic recovery.

Michael Davenport, senior economist at Oxford Economics, said he believes Macklem has the right interpretation of recent data, including sharp risks around the upcoming CUSMA renewal.

“The Canadian economy is definitely a little bit weaker than we had thought, say, a couple of months ago, but we don’t think that the Canadian economy’s currently in a recession,” Davenport said.

Global oil prices -- driven higher by the Middle East conflict -- are meanwhile staying higher than first thought in the Bank of Canada’s April forecast. Opposing pressures on prices and economic growth put the central bank in a dilemma, Macklem said.

“Raising rates to dampen inflation could further slow the economy. Easing rates to support growth increases the risk that higher inflation becomes persistent,” he said.

“For now, holding the policy rate unchanged balances those risks.”

Annual inflation rose to 2.8 per cent in April, in part because of the global energy shock. The Bank of Canada now expects inflation to hold around three per cent in the coming months before easing back toward the central bank’s two per cent target.

Macklem said there has so far been “limited evidence” that higher energy prices are passing through into broader inflationary pressures.

He said the Bank of Canada will keep looking through the short-term rise in inflation tied to the oil price shock. He also reiterated the central bank will act to prevent price pressures from becoming entrenched.

Core inflation -- a group of metrics the Bank of Canada uses to track underlying price trends -- has cooled in recent months despite the rising headline rate. Macklem said the central bank “might have to take some action” if that trend were to reverse course.

Financial market odds call for the Bank of Canada to hold rates steady again at its next meeting on July 15, according to LSEG Data & Analytics. But markets are pricing in a quarter-point hike before the end of the year.

“We think that misses the mark. We think the Bank of Canada is more likely going to remain on hold for the remainder of this year,” Davenport said.

In order for the central bank to raise its policy rate this year, he argued core inflation would have to pick up steam and price pressures would have to broaden across the consumer basket. Long-term inflation expectations from businesses and consumers would also have to rise, but those have so far been grounded in the wake of the Middle East oil price shock.

“None of that, we think, is likely given the current weak macroeconomic backdrop,” Davenport said.

KPMG chief economist Ali Jaffery said in a media statement that the focus on recent economic weakness gave Macklem’s remarks a “dovish” tone -- suggestive of looser monetary policy rather than any tightening.

Risks of persistent inflation seem low in the face of a soft economy, Jaffery argued.

“Even if the economy perks up in Q2 -- which it likely will -- there is a lot of room for non-inflationary growth when an economy is coming out of a hole like this,” he said.

CIBC senior economist Andrew Grantham said in a note to clients that Wednesday’s rate decision reflects a “very patient central bank” content to wait and see how the risks play out.

He said CIBC continues to expect no change to the policy rate in 2026 as the current rate level supports a modest recovery in the economy starting later this year.

This report by The Canadian Press was first published June 10, 2026.

New Canadian tracker measures the real impact of Indigenous businesses

Digital Journal Staff
June 9, 2026 

Photo by Etienne Boulanger on Unsplash


The Canadian Council for Indigenous Business and the Canadian Chamber of Commerce’s Business Data Lab have launched the Indigenous Business Insights Tracker, an interactive dashboard designed to give Indigenous entrepreneurs, policymakers, and communities a clearer, data-driven picture of Indigenous economic participation in Canada.

The tracker, hosted on CCIB’s website and updated quarterly, pulls from Statistics Canada data combined with direct insights from Indigenous businesses. It maps demographic distribution, business outlooks, anticipated obstacles, and trade activity, including cross-border sales volume and expected tariff exposure.

“Indigenous businesses are now engaged in every sector of the Canadian economy,” says Matthew Foss, VP Research and Public Policy, CCIB. “It’s vital that we measure this progress and strengthen the evidence based on Indigenous economic performance. By doing so, we can continue to tell the stories of Indigenous participation, highlighting the success stories alongside the remaining obstacles.”

Indigenous entrepreneurs have historically been underserved by traditional data reporting, meaning decisions about investment, procurement, and policy often got made without accurate information about where Indigenous businesses actually operate and what they actually need.

“By combining Statistics Canada data with insights from Indigenous businesses, the dashboard provides a sharper, more nuanced picture of how Indigenous entrepreneurs are navigating trade pressures and where opportunities exist to support continued growth,” says Jasleen Kaur Trehan, Economist, Business Data Lab, Canadian Chamber of Commerce.

“At a time of heightened uncertainty, having access to this kind of granular, community-informed data isn’t just useful, it’s essential.”

Indigenous businesses trade across borders and operate in sectors, from natural resources to professional services, that are directly in the path of current tariff disruptions.

With the dashboard helping close the data gap, it also hands Indigenous communities the ability to tell their own economic story, with evidence behind it.
Final ShotsThe Indigenous Business Insights Tracker is hosted on CCIB’s website, updated quarterly, and freely accessible to businesses, policymakers, and communities.
The dashboard covers trade activity including cross-border sales values and anticipated tariff impacts, making it directly relevant in the current trade environment.
Indigenous businesses have historically been undercounted in standard economic data; this tracker combines Statistics Canada data with community-sourced insights to address that.

Retooling for a new era: How Canada’s aerospace sector is quietly reshaping production

Dr. Tim Sandle

DIGITAL JOURNAL
June 8, 2026 

 

Air Canada says its chief executive will retire by the end of the third quarter, after backlash over his failure to issue condolences in both French and English for a fatal airport disaster – Copyright AFP/File TIMOTHY A. CLARY


Canada’s aerospace sector has long been defined by engineering excellence, global supply chain integration and a steady, if sometimes understated, role in the production of both commercial and business aircraft. Yet beneath this continuity, a more subtle transformation is underway: manufacturers are retooling production systems to respond to shifting demand, emerging defence priorities, and the need for greater efficiency and resilience.

Unlike the abrupt industrial pivots seen during the COVID-19 pandemic, a time when factories were repurposed almost overnight to produce ventilators and protective equipment, the current phase of retooling is slower, more strategic and ultimately more structural. It reflects a deliberate repositioning of capabilities across Canada’s aerospace cluster.

One of the clearest examples of this transformation can be found in Bombardier’s recent investments. In early 2026, the Montreal-based company announced plans to develop a new manufacturing centre in Dorval, representing a significant capital commitment and a recalibration of its production model.

The move is driven by renewed global demand for business jets, particularly in the ultra-long-range segment. However, the response is not simply to increase output. Instead, Bombardier is redesigning how it manufactures aircraft. This embraces streamlining workflows, improving throughput and embedding more advanced production systems within its facilities.

This type of change typifies modern industrial retooling. Rather than altering the product line, it focuses on how products are made: reducing inefficiencies, integrating digital processes and ensuring that facilities can scale production without a corresponding rise in cost or complexity.

A similar philosophy underpinned Bombardier’s earlier transition from its historic Downsview site in Toronto to a new purpose-built campus near Pearson International Airport. That relocation was not only about geography; it represented a rethinking of the entire production chain—from aerostructure assembly through to testing and final integration. The result is a facility designed for precision manufacturing in a globalised aerospace market where margins are tight and quality expectations are unforgiving.

Retooling by expansion and specialisation

Elsewhere in Canada’s aerospace ecosystem, retooling is occurring in more targeted ways. Boeing’s Winnipeg operations, for example, have undergone incremental upgrades to support composite component manufacturing. The introduction of enhanced materials handling systems, such as expanded temperature-controlled storage, may initially appear modest, yet these changes directly affect production rate, product quality and energy efficiency.

This type of retooling highlights a key feature of the aerospace sector: production is often constrained not by final assembly, but by upstream processes. Improvements in these areas can unlock capacity across the entire manufacturing chain. More broadly, such investments reflect a shift towards specialisation and high-value production. Canadian facilities are increasingly focused on complex components, advanced materials and niche capabilities that align with global demand for lighter, more fuel-efficient aircraft.

The emergence of new manufacturing hubs, such as those dedicated to unmanned aerial systems (UAS), illustrates a further shift. Companies are investing in facilities capable of producing defence-grade drones at scale, marking a departure from traditional aerospace activity centred on large aircraft. This represents a different kind of retooling: one that is market-driven rather than purely technological. Firms are adapting to new demand signals, moving into adjacent sectors and building capabilities that align with national and allied defence priorities.

Underlying these developments is a broader lesson from recent global disruptions. The aerospace sector experienced significant shocks during the pandemic, followed by supply chain instability and fluctuating demand. In response, manufacturers are placing greater emphasis on resilience and flexibility. Retooling therefore involves not only physical infrastructure, but also organisational capability: the ability to adjust production rates, reconfigure supply chains and respond quickly to changing conditions.

This can be seen in the way new facilities are designed. Modern aerospace plants are typically more modular, allowing different production processes to be integrated or reconfigured with relative ease. Digital technologies, ranging from advanced analytics to predictive maintenance, are also playing a larger role, enabling more precise control over manufacturing operations.

A distinctly Canadian pathway

Canada’s approach to retooling differs in important ways from that of larger aerospace producers such as the U.S. or the European Union. While those regions often emphasise large-scale technological innovation—such as hydrogen-powered aircraft or radical new airframe designs, Canada’s strength lies in incremental, high-value transformation. This reflects the structure of its industry. With a strong base in business aviation, regional aircraft and specialised components, Canadian firms tend to compete on quality, reliability and integration rather than sheer scale.

As a result, retooling is often less visible but no less consequential. Investments in productivity, facility design and process optimisation may not attract the same attention as headline-grabbing new aircraft programmes, but they are essential for maintaining competitiveness in a demanding global market. Looking forward, several trends are likely to shape the next phase of retooling in Canada’s aerospace sector.

First, the continued growth of business aviation, particularly in emerging markets, will sustain demand for high-end aircraft and support further capacity expansion. Second, defence spending will create new opportunities, particularly in areas such as surveillance, autonomy and Arctic operations. Third, the push towards sustainability will require ongoing improvements in manufacturing efficiency, as well as the integration of greener materials and processes.

At the same time, challenges remain. Labour shortages, supply chain fragility and the need for sustained investment all pose risks to the sector’s trajectory. Addressing these issues will require coordination between industry, government and educational institutions to ensure that the necessary skills and infrastructure are in place.

In other words, Aerospace is an industry that is quietly but decisively preparing for a different future—one in which productivity, flexibility and strategic alignment will be as important as engineering excellence.

Canadian payroll is getting both smarter and shorter-staffed

Digital Journal Staff
June 8, 2026

Photo courtesy of Getty Images on Unsplash

The people who make sure everyone gets paid on time are in short supply.

New research from the National Payroll Institute, in collaboration with Deloitte Canada, found that the Canadian payroll workforce is aging and the pipeline behind it is thin.

The report, Beyond Paydays: The Evolution of Payroll in Canada, found that 73.5% of payroll professionals expect the adoption of new technologies and automation to have the greatest impact on their role, more than regulatory change (61.4%) or data security pressures (37.9%). Modern payroll touches compliance oversight, workforce analytics, and strategic decision-making, and the skill set required has moved in tandem.

The findings show that organizations need to strengthen both their talent and technology investment, focusing on upskilling in areas like cybersecurity, AI oversight, data storytelling, and change management.

Globally, Canada is roughly in the middle when it comes to payroll maturity, explains the Institute’s press release. There’s strong compliance, but the country lags on digitalization, cloud adoption, and AI-enabled payroll. Where the function is heading and where the workforce is today sit far apart.

Survey results, combined with membership data from the Institute, show that most respondents are over 45. As that generation moves toward retirement, organizations may find themselves with teams that are understaffed, underskilled, or both.

“Payroll is no longer just a back-office function — it is becoming a strategic business capability, and the talent needed to support that shift is becoming harder to find,” said Peter Tzanetakis, President and CEO of the National Payroll Institute.

“Organizations need to act now to build future-ready payroll teams with the skills to navigate AI, cybersecurity, compliance and change.”

For technology leaders, when payroll can’t keep up, there’s little organizational data that can, in turn, feed strategic decisions. The report frames modernization as a choice, with payroll talent upskilling needing to include cybersecurity, AI oversight, data storytelling, and change management.

“From our research findings, it’s clear that as payroll continues to evolve, organizations will have to invest in both modern technology and talent development to keep pace with changing business needs and support long-term success,” said Keegan Castrillo, Partner, Technology and Transformation, Deloitte Canada.

“The future of payroll will require a combination of technology, adaptability and skilled professionals. Organizations that recognize payroll as a strategic, data-driven function will be better equipped to navigate change and respond to evolving workforce needs.”

Final Shots

The Canadian payroll workforce skews heavily over 45, with succession planning gaps that organizations haven’t fully addressed.

The top forces reshaping the role: automation and AI adoption (73.5%), regulatory change (61.4%), and data security (37.9%).

Canada has strong payroll compliance but lags in cloud adoption, digitalization, and AI integration compared to leading global markets.

Canada’s infrastructure billions are falling short

The workforce pipeline is the constraint nobody is planning for. Canada doesn’t currently produce enough tradespeople to build what it’s already committed to.

Digital Journal Staff
June 10, 2026 

Photo by Harrison Haines on Pexels

Canada has enough concrete ambition, but the delivery system needs work.

According to a new PwC report, the country needs to spend US$34 billion more per year on infrastructure by 2050 just to keep pace with its highest-performing peers, currently ranking fourth globally in annual infrastructure spending at US$145 billion. As the Mobilizing Canada’s US$4.7T infrastructure opportunity report explains, that only amounts to 6.6% of GDP, well below the 7.4% invested by peers.

The full forecast, built on Oxford Economics data, projects US$4.7 trillion in cumulative Canadian infrastructure spending from 2024-2050.

Canada’s largest sector, resources, leads with US$1.6 trillion, followed by transportation at US$912 billion, and power at US$605 billion. Defence is Canada’s fastest-growing sector, projected to climb 389% on the back of NATO commitments and Arctic security spending. Digital infrastructure sits at US$237 billion, which is significant on paper, but the report projects Canada will trail both the UK and Australia in cumulative data centre investment by 24 to 28%, despite natural advantages in land, water, renewable power, and climate.

Canada needs to plan differently, says PwC. The country has been planning its infrastructure priorities (energy, defence, digital, transportation, critical minerals) as separate projects. PwC says the opportunity, and the risk, lies in whether those investments come together as connected systems or remain isolated assets.

“Canada’s energy strategy, its defence commitments, its critical minerals potential, and its digital ambitions are being treated as separate conversations. They’re not. They’re one infrastructure challenge,” says Johanne Mullen, Partner and National Leader of Real Assets at PwC Canada. “Canada can exceed its US$4.7 trillion forecast or fall short of it. The difference will come down to the decisions being made now on how we plan, fund, and deliver together.”

Canada also doesn’t produce enough tradespeople to build everything on its wishlist. The report points to Germany’s dual-track programs and Singapore’s dedicated technical institutes as models worth studying.

“We’ve been tracking how value is moving across traditional sector boundaries, and infrastructure is where that shift becomes physical” says Nochane Rousseau, National Managing Partner, Clients and Markets at PwC Canada.

“The rails, grid connections, and digital infrastructure Canada builds over the next 25 years will either accelerate that transformation or hold it back. Mobilizing Canada’s US$4.7T infrastructure opportunity is more than an infrastructure report, it’s a reinvention roadmap for how Canada builds its economic future.”

Final Shots

Canada ranks fourth globally in infrastructure spending, and still falls short. The gap is in how projects connect, not how many get announced.

Defence is the fastest-growing sector at 389% projected spending, but NATO commitments and Arctic security pledges are driving that, not a strategic infrastructure vision.

The workforce pipeline is the constraint nobody is planning for. Canada doesn’t currently produce enough tradespeople to build what it’s already committed to.

HCLTech plants cybersecurity operations in Ontario

Digital Journal Staff
June 9, 2026

Photo by Getty Images on Unsplash

HCLTech has opened a Cybersecurity Fusion Center (CSFC) in Mississauga, Ont., part of its global network of 10 centres. The facility brings together AI-driven security operations, real-time threat intelligence and cyber defence capabilities for enterprise clients, all housed on Canadian soil.

Canadian organizations are paying closer attention to where sensitive data and security operations are housed as concerns around cross-border access under the U.S. CLOUD Act grow. HCLTech is positioning its Mississauga operation for clients that want cybersecurity capabilities supported from inside Canada.

“Our Cybersecurity Fusion Center in Mississauga reflects our strategic commitment to building resilient digital ecosystems for clients in Canada,” says Jagadeshwar Gattu, president of digital foundation services at HCLTech.

Stephen Crawford, Ontario’s minister of public and business service delivery and procurement, called the launch “a strong step for Ontario’s leadership in cybersecurity and digital innovation,” adding that the investment would “help protect Canadian businesses and infrastructure while creating good jobs and strengthening our digital economy.”

The Mississauga facility is the latest in a sustained Canadian build-out for the India-headquartered company. HCLTech opened a Calgary office in November 2025, inaugurated a Calgary AI lab on June 3 and has committed $100 million to Alberta over five years.

The company operates delivery and innovation centres in Mississauga, Moncton and Vancouver, supports more than 50 major Canadian enterprises and reported $14.7-billion USD in consolidated revenue for the 12 months ending March 2026.

The timing tracks with Canada’s cybersecurity regulatory picture. Bill C-8, which includes the Critical Cyber Systems Protection Act, is advancing through Parliament with mandatory cybersecurity obligations for designated operators in federally regulated sectors including telecommunications, finance, energy and transportation.

When a 227,000-employee global IT firm puts a cybersecurity facility on Canadian soil, it’s telling you something about where it thinks the demand is headed.
Final ShotsHCLTech’s Mississauga Cybersecurity Fusion Center is the company’s 10th globally, built around data sovereignty for enterprise clients.
The launch extends a Canadian expansion that includes a Calgary office, a new AI lab and a $100-million, five-year Alberta commitment.
Bill C-8, which would create Canada’s first mandatory cybersecurity framework for critical infrastructure, is advancing through Parliament.

Agentic AI takes centre stage in Canada’s next tech wave

Dr. Tim Sandle

DIGITAL JOURNAL
June 9, 2026

Image: © AFP


Canada’s artificial intelligence sector is entering a new phase. After years of leadership in machine learning and generative AI, attention is increasingly shifting to “agentic AI”. These are systems capable not only of producing outputs but also of autonomously taking actions, coordinating workflows, and pursuing defined goals. This transition is already reshaping the country’s innovation strategy, enterprise landscape, and policy thinking.
From generative to agentic

Agentic AI builds on the capabilities of generative models but introduces autonomy. These systems can sequence tasks, interact with digital tools, and execute decisions within defined constraints. In practical terms, this means software that doesn’t just suggest actions but performs them — scheduling operations, managing supply chains, or even executing financial trades. Globally, this shift is viewed as the next major computing paradigm, with AI evolving from passive tool to active collaborator.

Canada, already home to world-leading AI research institutions, is well positioned to capitalise on this transformation. For instance, the Canadian government has moved decisively to embed AI, including agentic systems, into economic and public-sector priorities. In June 2026, Ottawa launched its new national strategy, “AI for All,” committing billions of dollars to scale adoption and strengthen domestic capabilities. The plan aims to deliver substantial economic gains, targeting up to $200 billion in GDP growth and 250,000 new jobs over five years.

Policymakers recognise that agentic AI introduces new risks. Because these systems can act autonomously, governance frameworks must extend beyond traditional AI oversight, incorporating stronger controls around accountability, auditability, and unintended system interactions. This reflects a broader shift: innovation is now being paired with a “safety-first” approach, grounded in privacy, transparency, and public trust.

Canada’s strength lies in its integrated AI ecosystem. Cities such as Toronto, Montreal, and Vancouver combine academic excellence with startup activity and enterprise adoption. Plus, institutions like Mila, the Vector Institute, and Amii continue to produce cutting-edge research while feeding talent into commercial ventures. This foundation is now supporting a rise in agentic AI companies developing autonomous systems for real-world applications. Canadian firms are deploying AI agents in sectors ranging from healthcare diagnostics and logistics optimisation to cybersecurity and financial modelling.

The impact of agentic AI is becoming visible across industries. In cybersecurity, agent-based platforms are now capable of conducting investigations autonomously, reducing the need for manual intervention.

In retail and finance, AI agents are beginning to execute transactions on behalf of users — from purchasing goods to managing investment portfolios — albeit with safeguards to limit risk.

Manufacturing and logistics are also being transformed. Agentic systems can manage complex workflows, dynamically adjust supply chains, and optimise production processes in real time.

Government investment is reinforcing this growth. In May 2026, for example, nearly $16.5 million was allocated to AI-focused businesses in the Greater Toronto Area to accelerate commercialization and adoption.

Challenges and caution

Despite the momentum, significant hurdles remain. Research suggests that current AI agents still struggle with reliability, achieving professional-level task completion only a small fraction of the time. [cbc.ca] This gap between potential and performance is fuelling debate. While some organisations are investing heavily in agent-based systems, others warn of overhype and the risk of premature deployment.

Agentic AI is powerful but its autonomy introduces new risks in control, security, reliability, and accountability, requiring stronger governance, monitoring, and human oversight than previous AI systems.

Trust will be critical. For agentic AI to reach mainstream adoption, users must be confident that these systems can act safely, transparently, and in alignment with human intent. The result is a national ecosystem attempting to do two things simultaneously: lead in technological capability while setting global standards for trustworthy AI.

Privacy commissioner to release results of Grok deepfake investigation

By

The Canadian Press

Opens in new window

Published: June 11, 2026

Privacy Commissioner Philippe Dufresne listens to a question during a news conference in Ottawa, Wednesday, May 6, 2026. THE CANADIAN PRESS/Adrian Wyld

OTTAWA — The federal privacy commissioner will today release the results of his investigation of sexual deepfakes created by Elon Musk’s Grok AI chatbot.

Philippe Dufresne launched an investigation in January to examine the proliferation of sexualized deepfakes created by Grok and shared on the X social media platform.

He said at the time the non-consensual use of personal information to create deepfakes, including intimate images, is growing and poses serious risks to privacy rights.

The investigation looked at whether the companies involved are complying with privacy law and whether they obtained “valid consent” to collect, use and disclose personal information to create deepfakes, including explicit content.

The wave of images drew a global backlash, with the U.K., the European Union and California launching investigations of their own.

In Canada, the Liberal government has introduced legislation that would criminalize non-consensual sexual deepfakes.

This report by The Canadian Press was first published June 11, 2026.

Anja Karadeglija, The Canadian Press

Canada moves to ban under-16s from social media, regulate AI

AFP
June 10, 2026 

Canada’s culture minister Marc Miller argued the new legislation would protect children from online harms – Copyright AFP Lars Hagberg

Canada’s culture minister on Wednesday introduced legislation that would ban children under 16 from having social media accounts and require AI chatbot services to limit production of harmful content.

The proposed Digital Safety Act makes Canada the latest in a wave of countries cracking down on social media platforms over concerns of harm to children.

“We have seen the very serious consequences that online harms can have…The safety of children cannot be an afterthought,” said Culture Minister Marc Miller in a statement announcing the proposal.

The legislation would ban social media accounts for children under 16 years old, the statement said, adding that there be an exemption “pathway” for companies if they can demonstrate “sufficient safeguards” for children.

Social media services, including adult content platforms, would also face new requirements under the law to “mitigate risks associated with exposure” to various categories of harmful content and apply labels to synthetically generated content.

The eventual regulations would be enforced by a Digital Safety Commission, with possible fines on companies not in compliance of up to three percent of their global revenue or CAD$10 million.

“This legislation will provide a safer environment for young Canadians and empower them to connect in-person, build friendships, focus in school, and learn real-world skills so they can thrive,” Health Minister Marjorie Michel said in a statement.

Sachin Maharaj, an education professor at University of Ottawa, called the proposal “a step towards the right direction,” with a “recognition that social media is associated with behavioral and social issues.”

“Obviously, kids will find their way around” restrictions, he told AFP. “But the real challenge is to change the way the apps work.”
AI rules

In addition to the social media ban, the new law would also regulate increasingly ubiquitous AI chatbots by requiring companies to “mitigate the risk of the chatbot communicating harmful content.”

Companies would also face requirements for transparency around “reporting thresholds in crisis situations,” such as when a user intends to harm themselves or another person.

The issue has been particularly sensitive in Canada following a mass shooting in April that left nine people dead in the small mining town of Tumbler Ridge, including the shooter.

OpenAI has faced intense criticism after it banned the shooter from its platform in June last year over the user’s troubling conversations on ChatGPT, but did not report the account to Canadian police because it said it saw no evidence of an imminent attack.

In December, Australia became the first country in the world to require TikTok, YouTube, Snapchat and other top sites to remove accounts held by under-16s or face heavy fines.

Indonesia began enforcing its own social media ban for users under the age of 16 in March, while several European governments have announced their desire to make similar moves.

 How would Canada’s social media ban work? Platforms, apps not sure

By

The Canadian Press

Opens in new window

Published: June 11, 2026 

A teenage girl uses her phone to access social media in Sydney, Friday, Nov. 8, 2024. (AP Photo/Rick Rycroft)

As countries including Canada move toward social media bans in an attempt to keep youths safe online, tech companies are in a tug of war over who should be the gatekeepers.

Executives from Snapchat and Meta, the owner of Instagram, Facebook and Threads, have argued it should be app stores rather than platforms charged with verifying the ages of users when they try to add a platform to their phones.

Apple and Google, which run the App Store and Play Store respectively, have introduced some age-gating measures but appear to be at odds with social media platforms over whose responsibility those measures should be.

Experts say trying to put the onus on either side is pointless because app store owners, platforms, governments and parents all have to step up to keep kids safe online.

“I don’t think it’s fair for any company to say, ‘We’re just the host, it’s their problem,’” said Kaitlynn Mendes, a sociology professor at Western University and the Canada Research Chair in inequality and gender.

“It’s all of our problem.”

The battle over who should police youth access to platforms has been simmering for years while child safety advocates called for help addressing the evolving harms young people are encountering online.

The tension hit a crest late last year, when Australia banned anyone under the age of 16 from using social media. A study has since suggested 70 per cent of the country’s Instagram, Snapchat and TikTok users under 16 have held onto their accounts despite the crackdown.

The United Kingdom, France, Poland, Indonesia and now Canada are among the countries taking similar action to Australia.

The federal government announced Wednesday that social media companies will eventually have to block access to their platforms to Canadian users under 16 unless they follow unspecified safeguards.

Social media companies largely oppose youth bans, but say if they are implemented then app stores should do the heavy lifting rather than each individual app.

“We’ve advocated for age verification by app stores instead of individual apps — not because we support under-16 bans, but because if this policy exists it needs to have uniform implementation that safeguards privacy and security for users,” Snapchat CEO Evan Spiegel said in February opinion piece published in the Financial Times.

His sentiments were echoed by Meta, which has been pushing the Canadian government to implement age verification at the app store level since at least last year.

Google doesn’t like that pitch.

Kareem Ghanem, senior director of government affairs and public policy at Google, has framed it as part of a consistent pattern of “advancing policy proposals that demonstrate more interest in shifting responsibility than in taking responsibility.”

“Time and time again, all over the world, you’ve seen them push forward proposals that would have app stores change their practices and do something new without any change by Meta,” he said in November.

Earlier this week, Apple introduced some new features to its child accounts, which can limit access to adult websites and set age-based restrictions for the App Store. Child accounts are required for children under 13 and available for children up to 18.

Apple CEO Tim Cook attributed the move to Australia’s social media ban.

Mendes said that some companies try to weasel out of taking responsibility for administering bans by pointing the finger at others because they’re difficult to enforce.

Kids are “incredibly crafty,” she said. In Australia, she said they’re using technology that obscures their location to maintain accounts, having older siblings or even parents open accounts for them or turning to other apps that aren’t included in bans.

“Kids are way more motivated to find ways to bypass them and then ... we end up spending our time policing children, whereas I think that energy is better spent forcing the companies to design products that are safe,” Mendes said.

The difficulty in enforcing bans is why both app stores and platforms have to step up, said Jenna Poste, the national technology impact adviser at Unplugged Canada, a grassroots organization encouraging parents to consider delaying their child’s access to phones and social media.

App stores alone can’t age-gate because kids can still access social media on browsers or non-Google and Apple devices, Poste said. Kids could use a web browser instead, for example.

This report by The Canadian Press was first published June 11, 2026.

Tara Deschamps, The Canadian Press