Canada’s ‘Sovereign AI’ Pitch Hides $44 Million in Secret Palantir Contracts

Three weeks ago, Prime Minister Mark Carney launched “AI for All”, Canada’s new national AI strategy, and named the federal government as the “strategic anchor customer” for Canadian artificial intelligence. The pitch: Ottawa will buy from sovereign Canadian businesses and drag a lagging country forward. Only about 12 per cent of Canadian businesses use AI, and barely eight per cent of small firms do. The strategy targets 60 per cent adoption by 2034.

The inconvenient part is that the government is already a serious AI customer. It just buys American, and it buys quietly.

🔍 THE BOTTOM LINE

Canada’s “AI for All” strategy is loud about building a sovereign AI base and silent about the foreign systems already running inside Defence and policing. The Department of National Defence has spent $44.4 million on Palantir’s Gotham platform through a contract that was never disclosed — a contract that only surfaced after a Conservative MP pressed the government on its AI spending. A strategy that promises sovereign procurement while running secret foreign contracts is a slogan, not a policy.

What $44.4 Million Actually Buys

The Department of National Defence signed a contract with Palantir’s Canadian arm in March 2020, starting at $14.4 million. It was never disclosed. More than a dozen amendments later, the value had climbed to about $44.4 million by October 2025, with roughly $46.8 million actually spent. A separate $3.7 million Defence contract surfaced only after a Conservative MP pressed the government on its AI spending, as the Toronto Star reported.

The Ontario Provincial Police have run Palantir’s Gotham platform since 2015. These are precisely the data-fusion and decision-support systems the new strategy says Canada must own. Ottawa is buying them. From a foreign vendor. Behind a wall of “not for public disclosure.”

The Gap Between the Pitch and the Procurement

Look at what the strategy actually funds: $500 million to take equity stakes in promising businesses, $700 million more for compute power, a Trusted AI Certification program, and a missions program starting in health. Notice the common thread. Not one of those is a purchase order.

A government reaches for equity and certification schemes precisely when buying is hard, because writing a clean contract to a small sovereign vendor is the one thing its procurement machinery is built to slow down. Grants and equity are what you offer when you cannot, or will not, simply buy the product. Even the one procurement promise arrives wrapped in process: the strategy routes faster AI buying through a new Office of Digital Transformation — an office, not a mandate to write cheques to Canadian vendors.

As Al Vigier, founder and CEO of Caseway, a Vancouver-based AI company, writes in The Line: “A state that takes a stake in your company takes a seat at your table and plants a doubt in the mind of every allied investor who might otherwise back you. Government-built national champions have a long record of becoming wards of the state rather than competitors in a market.”

Why Starting in Health Is Choosing to Stall

Then there is the choice to launch the missions program in health — the most privacy-bound, risk-averse, slowest-procuring corner of the state. If you wanted to prove that public AI buying can work, you would start where decisions are already high-consequence and where the law already demands an audit trail. There are the courts, public safety, and defence. Beginning in health is choosing the venue most likely to stall in pilots for three years, then call the delay a lesson learned.

The test of an anchor customer, as Ottawa wants to be, is binary. Did it buy, in the open, from Canadian firms? There are other things it can do. Make the source lists usable by companies under 50 people instead of treating a security questionnaire as a moat for incumbents. Set a hard floor with a fixed share of every department’s AI budget spent on Canadian-controlled products, not foreign platforms or Canadian-flagged consulting. Hold those Canadian systems to the same auditability the public never got to see in the Palantir files. Then publish the receipts every quarter.

NZ Angle

New Zealand faces the same structural problem on a smaller scale. The NZ government’s public-sector AI toolkit was updated in 2026, but procurement transparency for AI systems remains a gap. If Ottawa — a G7 government with a $200-billion-AI-growth strategy — cannot bring itself to disclose its defence AI contracts, Wellington’s odds of doing better with a fraction of the budget and no sovereign compute strategy are slim. The lesson for New Zealand is that sovereign AI is not about owning the model. It is about owning the contract — and being willing to show the public what you signed.

❓ FAQ

What is Palantir’s Gotham platform?

Gotham is Palantir’s data-fusion and decision-support system, optimised for law enforcement, military, and government users. It is not a surveillance company per se — its primary business is providing software tools that help organisations make connections between internal data sources. The Canadian Department of National Defence and the Ontario Provincial Police both use Gotham, as The Logic reported.

How much has Canada spent on Palantir contracts?

The DND contract started at $14.4 million in March 2020 and climbed to approximately $44.4 million by October 2025 through more than a dozen amendments, with roughly $46.8 million actually spent. A separate $3.7 million Defence contract was only uncovered after a Conservative MP pressed the government, per the Toronto Star. The OPP has run Gotham since 2015.

What does Canada’s AI for All strategy actually promise?

The strategy targets $200 billion in economic growth, 250,000 new AI-related jobs, and a rise in AI adoption from 12 per cent to 60 per cent by 2034. It includes $500 million for equity stakes in AI companies, $700 million for compute infrastructure, a Trusted AI Certification program, and a health-focused AI Missions Program. It does not include a mandate to buy Canadian AI products in the open, which is the gap Al Vigier’s critique exposes.

Why does this matter for sovereign AI globally?

Canada is not alone. Every government that has declared a sovereign AI strategy — the EU, France, India, Japan — faces the same contradiction between the sovereign pitch and the foreign procurement reality. The Palantir case is a concrete instance of the pattern: the strategy says “sovereign,” the contracts say “foreign,” and the public never sees the difference. Sovereign AI that does not survive contact with procurement is not sovereign AI. It is a press release.

🔍 THE BOTTOM LINE

The gap between Canada’s sovereign AI pitch and its actual procurement record is the story. Ottawa has spent $44.4 million on Palantir’s Gotham platform through a Defence contract that was never disclosed, and the OPP has run the same system since 2015. The “AI for All” strategy responds to this by offering equity stakes and certification programs — everything except the one thing that would prove sovereignty: buying Canadian AI in the open, with receipts. Until that changes, “AI’s first customer” is a slogan stapled to a country that has been someone else’s customer all along.