Did the budget forget the internet… again?

The federal government’s 2026 budget was titled “Masters of our destiny” with a majestic photo of some high-voltage power lines cutting through the Canadian wilderness.

In the actual spending plan, there is a lot of attention to big infrastructure projects and tax credits for capital investments.

But what about the internet? What about the vast flows of digital commerce and online culture? 

Are Canadians masters of our destiny in the digital realm? 

Last year, we wrote that Prime Minister Carney’s first federal budget seemed to have forgotten the internet. Budget 2025 spent a whole lot of time on nation-building projects but largely neglected the digital foundations on which the modern economy now runs.

This year, we couldn’t help but notice the same thing in Budget 2026.

The biggest new spending related to digital systems in the budget falls under a package of measures related to Digital Transformation Canada — a new federal entity that promotes the adoption of technology in the public sector and aims to “strengthen Canada’s digital sovereignty.”

Under Digital Transformation Canada, the government has committed $1 billion to establish a Government Transformation Fund that will accelerate IT projects. Another $21.8 million will fund a fellowship program to recruit experts to support the work of Digital Transformation Canada.

The idea of transformative IT projects is certainly promising, but we have no further details as to what might be included. If the funding supports the development of in-house digital infrastructure solutions, working with Canadian providers — as France has done with its secure communication platform for its public service — then it will meaningfully support digital sovereignty and resilience. The potential for this funding is certainly there. However, “digital transformation” could also just mean more funding for our status quo as perpetual renters of foreign digital services and infrastructure.

Budget 2026 also includes a new commitment to “enable Canadian AI companies to access 500 MW of sovereign AI compute through new financial tools, such as backstops and offtake agreements, to mobilise private capital and expand compute capacity.” However, the budget documents offer no clear definition of what sovereign AI compute actually entails, and we do not have the best track record as a country when it comes to making sure that sovereign compute capacity excludes the dominant American providers.

The budget document mentions connecting Canada and Europe through secure digital infrastructure, and developing digital credential tools, but there’s no actual funding associated with these ideas.

As far as digital governance goes, the budget mentions the new privacy and online harms bills and proposes $176.3 million in funding over five years to establish the new Digital Safety and Data Protection Commission of Canada, which will oversee the implementation and enforcement of both these new bills. 

These are all important ambitions for the government to be pursuing, but the scale of the funding reveals Prime Minister Carney’s actual priorities.

The government is allocating $50 billion to upgrade the electricity grid, and $6.5 billion to transform Canada’s forestry sector. As we wrote recently, digitally deliverable services are actually a much bigger part of our trade picture than forestry, steel, potash and aluminum. 

The digital economy is huge. The government’s attention and funding has not been equally huge.

To truly be “Masters of our destiny” we need to do more to establish strategic control and assert governance over the essential digital infrastructure and services that our economy relies on.