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Checking Ottawa's AI Receipt
Canadian Procurement Pulse: AI Special Edition
Joe Noss
January 13, 2026
The federal government's artificial intelligence investments have grown from modest experiments to a substantial procurement category. Our analysis of 36 confirmed AI contracts totalling $59.1 million reveals who's winning, who's buying, and where the opportunities are heading.
But first, an important caveat: this $59 million represents only directly identifiable AI contracts. The real number is significantly higher.
What This Analysis Captures (And What It Doesn't)
A substantial volume of AI development happens through TBIPS (Task-Based Informatics Professional Services) contracts, where resources are engaged to build AI solutions as part of broader IT work. Those procurements don't show up as "AI contracts" in any searchable database. When a department brings in TBIPS resources to develop a machine learning model or integrate AI capabilities into existing systems, that spending is invisible to market analysis. At the same time, there AI features in most software products today, such as SAS or Microsoft, which the government buys a lot of. This includes only custom AI solutions procured by the gov to solve specific problems.
This means the federal AI market is materially larger than the $59 million we can confirm. How much larger is difficult to quantify, but contractors should understand that AI development is happening across government through multiple procurement channels, not just dedicated AI solicitations.
What's Happening
Federal AI spending has increased fivefold in three years, jumping from $4.6 million in 2022 to $23.2 million in 2025. The market is maturing rapidly, with 2024-2025 representing a shift from pilot projects to operational deployments across multiple departments.
Top 10 AI Vendors by Contract Value
Rank | Vendor | Total Value | Contracts |
|---|---|---|---|
1 | Levio Conseils inc. | $10,600,000 | 2 |
2 | Thales Digital Solutions | $10,300,000 | 2 |
3 | TTEC Solutions Canada Inc | $7,190,000 | 1 |
4 | Louis Tanguay Informatique Inc. | $5,750,000 | 1 |
5 | Run:AI | $3,200,000 | 2 |
6 | Deloitte | $2,890,000 | 3 |
7 | IBM Canada | $2,450,000 | 2 |
8 | CGI | $2,100,000 | 2 |
9 | Accenture | $1,890,000 | 2 |
10 | Various ISC Recipients | $2,400,000 | 5 |
What It Means For You
The Levio Playbook
Quebec-based Levio Conseils has established itself as the clear leader in federal AI procurement, and their success offers a blueprint for other Canadian firms. They secured the single largest AI contract in our dataset: $10.35 million for predictive threat analytics with DND, running through 2030. Their expertise in explainable AI for command and control applications has positioned them as DND's primary AI partner.
Levio's success reflects years of deliberate relationship building with defence stakeholders. They understood that winning in this space requires more than technical capability. It requires security clearances, domain expertise in military operations, and the patience to build trust with procurement officials who face enormous scrutiny on technology investments. Other Canadian firms looking to break into federal AI should study their approach closely.
Thales Digital Solutions holds the second position with $10.3 million across cyber mission assurance and ML engineering contracts. As a multinational defence contractor, their presence reflects the reality that some specialized capabilities still require global expertise. But the door is open for Canadian companies who can build comparable credentials.
The Buyers: Where the Money Flows
Defence dominates. DND-related contracts through PSPC represent over 60% of high-value AI investments, focused on predictive analytics, cyber assurance, and machine learning engineering.
AI Procurement by Contracting Entity
Department/Agency | Total Value | Contracts | Primary Focus Areas |
|---|---|---|---|
PSPC (for DND) | $31,200,000 | 12 | Threat analytics, cyber, ML engineering |
Shared Services Canada | $11,400,000 | 8 | Infrastructure, contact centres, platforms |
Transport Canada | $4,200,000 | 5 | NLP, aviation safety, regulatory automation |
Innovation (ISC) | $2,400,000 | 5 | R&D challenges, emerging tech |
Crown Corporations | $3,100,000 | 4 | Analytics, OCR, financial automation |
Other Departments | $6,800,000 | 6 | Various applications |
Shared Services Canada has emerged as the second major buyer, investing in AI infrastructure including Run:AI platform licensing and AI-powered contact centre solutions. Transport Canada shows growing appetite for NLP applications in regulatory platforms and aviation safety analytics.
Technology Categories: Following the Money
The data reveals clear patterns in what the government is actually buying.
AI-Powered Analytics & Decision Support Total: $17,077,265 across 8 contracts
Contract Description | Vendor | Value | Period |
|---|---|---|---|
Predictive Analytics for Threat Anticipation | Levio Conseils inc. | $10,350,000 | 2025-2030 |
Litigation Analytics Platform | Deloitte | $1,890,000 | 2024-2027 |
Aviation Safety Analytics System | CGI | $1,650,000 | 2024-2026 |
Operational Intelligence Dashboard | IBM Canada | $1,420,000 | 2023-2026 |
Regulatory Compliance Analytics | Accenture | $1,020,000 | 2024-2026 |
Other Analytics Contracts | Various | $747,265 | Various |
Analytics represents the largest category and the highest average contract values. Defence applications dominate, but the litigation analytics and regulatory compliance contracts signal growing demand across civilian departments.
Intelligent Automation Solutions Total: $12,864,603 across 7 contracts
Contract Description | Vendor | Value | Period |
|---|---|---|---|
Contact Centre as a Service (CCaaS) | TTEC Solutions Canada Inc | $7,190,000 | 2023-2028 |
Intelligent Document Processing | IBM Canada | $1,030,000 | 2024-2026 |
Chatbot Development & Deployment | CGI | $450,000 | 2023-2025 |
RPA Implementation Services | Deloitte | $1,000,000 | 2024-2026 |
Other Automation Contracts | Various | $3,194,603 | Various |
The TTEC contract stands out as the largest single automation investment. Their CCaaS platform incorporates AI chatbots, predictive analytics, intelligent routing, and ML-powered customer interaction management for up to 5,000 agents. This contract signals SSC's direction for citizen-facing service modernization.
Machine Learning Engineering & Services Total: $5,700,000 across 1 contract
Contract Description | Vendor | Value | Period |
|---|---|---|---|
ML Engineering & Scientific Services | Thales Digital Solutions | $5,700,000 | 2025-2028 |
AI Services for Cyber Mission Assurance Total: $4,599,000 across 1 contract
Contract Description | Vendor | Value | Period |
|---|---|---|---|
AI for Cyber Mission Assurance | Thales Digital Solutions | $4,599,000 | 2024-2029 |
ML Platforms & Infrastructure Total: $4,336,039 across 4 contracts
Contract Description | Vendor | Value | Period |
|---|---|---|---|
Run:AI Platform Licensing | Run:AI | $2,100,000 | 2024-2027 |
ML Platform Infrastructure | Run:AI | $1,100,000 | 2025-2027 |
GPU Computing Resources | Various | $1,136,039 | Various |
AI R&D (Defence) Total: $5,750,000 across 1 contract
Contract Description | Vendor | Value | Period |
|---|---|---|---|
AI Algorithm R&D | Louis Tanguay Informatique Inc. | $5,750,000 | 2024-2029 |
Computer Vision & OCR Total: $3,374,364 across 5 contracts
Contract Description | Vendor | Value | Period |
|---|---|---|---|
Satellite Imagery Analysis | ISC Challenge Winner | $750,000 | 2024-2026 |
Document OCR Processing | BDC Vendor | $890,000 | 2023-2025 |
Quality Inspection Vision System | ISC Challenge Winner | $634,364 | 2024-2026 |
Other Vision Contracts | Various | $1,100,000 | Various |
Natural Language Processing Total: $598,773 across 2 contracts
Contract Description | Vendor | Value | Period |
|---|---|---|---|
Regulatory Text Analysis | Transport Canada Vendor | $398,773 | 2024-2026 |
Citizen Correspondence NLP | SSC Vendor | $200,000 | 2024-2025 |
NLP remains surprisingly underdeveloped relative to the volume of text the federal government processes daily. Given regulatory complexity and citizen service demands, this category likely represents significant latent demand.
The Pipeline: Where Future Contracts Will Come From
Two procurement vehicles are poised to reshape federal AI procurement over the next 12 to 18 months.
Innovative Solutions Canada: 160 Companies in the AI Cohort
The ISC program accepted 160 companies into its AI stream, creating a substantial pipeline of potential federal AI suppliers. These companies can receive funding up to $1.15 million for civilian applications or $2.3 million for defence products to develop and test solutions with federal departments.
The matching process between these 160 vendors and government departments is actively underway right now. This means a significant wave of new AI contracts is coming as departments identify solutions that fit their needs and move into testing and implementation phases. Companies in this cohort have a structured pathway to federal work that bypasses the traditional relationship-building barriers.
Full disclosure: Publicus is one of the 160 companies in this ISC AI cohort.
ISC AI Projects (Sample)
Project | Vendor | Value | Phase | Focus Area |
|---|---|---|---|---|
AI for Space Object Detection | TBD | $750,000 | 2 | Computer Vision |
AI-Powered Cryptanalysis | TBD | $634,364 | 2 | Security/Decryption |
Manufacturing Defect Detection | TBD | $500,000 | 2 | Computer Vision |
Predictive Maintenance AI | TBD | $315,000 | 1 | Analytics |
NLP for Policy Analysis | TBD | $200,000 | 1 | Natural Language |
The AI Source List: A Sleeping Giant
The AI Source List is a standing offer arrangement with approximately 150 qualified companies across multiple capability bands, with contract values up to $37.5 million at the highest tier. Despite being established as the dedicated vehicle for federal AI procurement, it has seen minimal use to date.
That's expected to change. We're hearing from contacts within government that the AI Source List will see significantly increased activity in the next fiscal year. Departments that have been procuring AI capabilities through TBIPS or other workarounds may shift to this purpose-built vehicle, which offers a more streamlined path to AI-specific expertise.
For contractors not currently on the AI Source List, the next qualification window represents a strategic priority. For those already qualified, ensure your capabilities are clearly articulated and your pricing is competitive. This vehicle may finally deliver on its intended purpose.
The Top 5 Contracts: Where the Big Money Went
#1: Predictive Analytics for Threat Anticipation
Value: $10,350,000
Vendor: Levio Conseils inc.
Buyer: DND via PSPC
Period: 2025-2030 (5 years)
Scope: Development and deployment of predictive analytics capabilities for defence threat anticipation and early warning systems
#2: Contact Centre as a Service (CCaaS)
Value: $7,190,000
Vendor: TTEC Solutions Canada Inc
Buyer: Shared Services Canada
Period: 2023-2028 (5 years)
Scope: Cloud-based contact centre with AI chatbots, predictive analytics, intelligent routing, and ML-powered customer interaction management for up to 5,000 agents
#3: AI Algorithm R&D
Value: $5,750,000
Vendor: Louis Tanguay Informatique Inc.
Buyer: DND via PSPC
Period: 2024-2029 (5 years)
Scope: Research and development of artificial intelligence algorithm applications for defence operations
#4: Machine Learning Engineering Services
Value: $5,700,000
Vendor: Thales Digital Solutions
Buyer: DND via PSPC
Period: 2025-2028 (3 years)
Scope: Machine learning engineering and scientific services for military science and research applications
#5: AI for Cyber Mission Assurance
Value: $4,599,000
Vendor: Thales Digital Solutions
Buyer: DND via PSPC
Period: 2024-2029 (5 years)
Scope: Applications of AI in cyber mission assurance for defence cyber operations
A Note on AI Procurement Models: Outcomes Over Hours
Here's an uncomfortable truth for the traditional IT services industry: charging by the hour for AI development is increasingly difficult to justify.
The productivity gains from AI-assisted coding are substantial enough that hourly billing models create perverse incentives. A developer using modern AI tools can accomplish in hours what previously took days. Billing clients for "developer hours" when those hours now produce dramatically more output raises obvious questions about value alignment.
Government procurement is slowly recognizing this shift. The most forward-thinking departments are exploring outcomes-based contracting for AI solutions, where vendors are compensated for delivering working capabilities rather than logging billable hours. This model better aligns vendor incentives with government objectives and acknowledges the reality of how AI development actually works in 2025.
Contractors positioning for the next phase of federal AI work should develop pricing models that emphasize delivered value and measurable outcomes rather than time and materials. The TBIPS-style hourly model served government IT procurement for decades, but AI changes the math fundamentally.
Market Outlook
Federal AI procurement will continue growing, driven by Treasury Board's AI strategy, Responsible AI framework requirements, and operational modernization priorities. Based on current contract patterns and policy direction, watch for growth in:
Generative AI governance and implementation: The government will need tools to manage GenAI deployment safely
AI for regulatory compliance: Automating the interpretation and application of complex regulatory frameworks
Cybersecurity AI: Threat detection and response capabilities beyond current investments
Computer vision for border security: CBSA modernization will drive demand
NLP for citizen services: The current underspend in this category seems unlikely to persist
The combination of the ISC AI cohort matching process and anticipated activation of the AI Source List suggests the next fiscal year will see a meaningful acceleration in identifiable AI contract awards. The $59 million baseline we've documented here is likely to grow substantially.
Your Procurement Action Plan
Prioritize Security Clearances: Over 60% of high-value AI contracts flow through DND. Without appropriate clearances, you cannot compete for the largest opportunities. If you lack them, start the process immediately. Timelines often exceed 12 months. All contracts are going to require Protected B among other certs.
Get on the AI Source List: If you're not already qualified, prioritize the next intake window. This vehicle appears poised for significant increased usage in the coming fiscal year.
Target Automation Demand: Contact centre modernization and intelligent automation show consistent demand. The TTEC contract provides a template for what SSC wants: integrated AI capabilities within broader service platforms, not standalone point solutions.
Develop Outcomes-Based Pricing: As AI transforms development productivity, hourly billing models become harder to defend. Build pricing approaches that emphasize delivered capabilities and measurable results rather than time invested.
Leverage Canadian Ownership: Levio's success demonstrates that Canadian companies can win the largest federal AI contracts. Document your Canadian ownership, employment, and R&D activities clearly. Sovereignty concerns increasingly influence evaluation criteria.
Publicus helps government contractors find, qualify, and win more contracts with less effort. Our AI-powered platform monitors every opportunity across all government levels, with analytics on pricing and competition so you can understand your market like never before.