Canadian AI procurement a priority as public sector pushes ahead with adoption

The survey suggests public servants support greater investment in and adoption of AI but want stronger safeguards in place.

Nearly nine in 10 respondents (89 per cent) say Canada should develop and deploy a comprehensive AI governance policy for both the public and private sectors. The focus on governance is accompanied by significant concern about how Canadians’ information will be handled as governments deploy AI.

Eighty-nine per cent of respondents are worried about how personal or sensitive citizen information will be protected when AI tools are used by governments. Additionally, 86 per cent are concerned that the public could lose trust in government if personal citizen information is stored outside Canada.

“Trust remains the currency of the public sector, with strongly governed sovereign data at its core,” says Ven Adamov, Partner, Risk Services and National Leader for Data and Analytics, KPMG Canada.

“As governments explore more advanced AI capabilities, including generative and agentic AI, Canadians will expect transparency, accountability and responsible stewardship of data. Strong governance over AI models, their actions and the data they access is no longer optional; it is foundational to building trust and realizing AI’s full benefits.”

While enthusiasm for AI continues to grow, respondents point to workforce preparedness as a major challenge.

Two-thirds (66 per cent) say they are excited about AI’s potential to streamline slow or manual government processes. However, 84 per cent say AI literacy among public-sector employees is low, while 83 per cent say AI fluency is low. AI literacy is knowing how to use AI safely and effectively; AI fluency is knowing how to think, work and lead with AI.

More than eight in 10 (86 per cent) say greater investment in AI training and education is needed. Meanwhile, 72 per cent say their organization lacks sufficient specialized data and technology talent needed to help shape the ethical use of data and establish robust governance frameworks.

Respondents also see important limits to AI’s role in government. An overwhelming 92 per cent believe AI should support public servants’ judgment rather than replace it. Meanwhile, 73 per cent are concerned that AI could reduce the need for some public-service roles over time.

“Addressing these concerns starts with people. Public-sector leaders can support adoption by equipping employees with the right training and providing a clear vision and guidance on how the technology will be used, the benefits it can deliver, and the change management plans being put in place to support the realization of such benefits,” adds Mr. Adamov.

The survey also points to a public awareness challenge as governments move toward broader AI adoption.

Nearly nine in 10 public servants (87 per cent) say Canadians do not truly understand how the public service will develop and use AI, highlighting the need for greater transparency and public education as scaling accelerates.

“Moving from AI experimentation to adoption at scale will require governments to address several challenges simultaneously: building workforce capabilities, establishing clear governance and accountability, protecting Canadian data and intellectual property and maintaining public trust as AI becomes more embedded in government operations and service delivery,” says Mr. Klubal.

KPMG Canada surveyed 519 federal, provincial and municipal public servants across Canada between July 29 and August 26, 2026, using Sago’s business panel and its Methodify online research platform. Fifty-three per cent of respondents were male and 46 per cent were female. Forty-six per cent were from Ontario, 11 per cent from Quebec, 34 per cent from Western Canada and eight per cent from Eastern Canada. For comparison purposes, a probability sample of this size would have a margin of error of +/-4.3 percentage points, 19 times out of 20.