The top Canadian tech stories of 2023

In a year of ups and downs, Canada rolled out its first home-made electric vehicle, a major bank went bust and U.S. tech workers looked north.

From Twitter rebranding as X, to more breakthroughs in nuclear fusion and scientists figuring out how to make computers from brain cells (next stop: cyborgs!), it has been a big year in tech. And in Canada there have been big investments, big moves and big new policies that will reshape the country’s tech landscape. To look back on an eventful year, here are some of the top Canadian tech stories of 2023.

The first all-Canadian EV hit the mark

The first electric vehicle entirely produced with Canadian parts was unveiled at the Consumer Electronics Show in January. The prototype car, called Project Arrow, was created with 3D printing and advanced composite materials and has a range of 500 kilometres, enough to drive from Toronto to Ottawa. Conceived as a showcase for Canadian automotive engineering, it contains components from more than 50 suppliers across the country. After debuting at CES, the vehicle embarked on a tour of North America, with stops in Germany and Japan also planned.

In November, the Automotive Parts Manufacturers’ Association announced it was planning a follow-up: Arrow 2.0. It will include a fleet of 10 to 20 vehicles to demonstrate different technologies.

Bank failure rocked the tech sector

Silicon Valley Bank, the tech sector’s favoured financial institution, suddenly collapsed in March after being caught out by rapidly rising interest rates. Canadian startups experienced less disruption than their American counterparts, as SVB was a much smaller player here. Regulators quickly divvied up SVB’s assets and sold them off, with National Bank picking up the Canadian loan portfolio. Though the fallout was less severe than initially feared, the failure seemed to confirm that the curtain was coming down on an era of easy money and eye-popping startup valuations. Companies now have “more realistic expectations and are prepared to tighten the belt a little bit,” says Emil Savov, managing director of the MaRS Investment Accelerator Fund. “Investors are now focusing on the quality deals. And those quality deals are harder to do.”

Ottawa tried to rein in AI

It was a breakout year for generative AI, with models like ChatGPT and DALL-E notching up ever more impressive creative feats. But despite the technology’s capacity to sometimes “hallucinate” and completely make things up, a report from the Canadian Institute for Advanced Research found that Canadians were in a carefree “play mode” around AI, with few users pausing to consider the risks.

The federal government attempted to install some guardrails by creating a voluntary code of conduct for responsible AI development. The code provides guidance in six broad areas, including accountability, risk management, fairness and transparency. Nineteen organizations, including BlackBerry, Telus, Protexxa and Coveo, have signed the code. “For companies that sign on, it’s mostly an indicator of commitment to support a responsible AI ecosystem in Canada,” says Ebrahim Bagheri, a professor at Toronto Metropolitan University who leads a program on the responsible development of AI. “The best form of innovation is when you have responsible technology that is innovative, benefits society as a whole and respects individual privacy and human rights.”

Feds splashed the cash on cleantech

After Joe Biden rained subsidies on American clean energy companies in his blockbuster Inflation Reduction Act, Ottawa hit back with some green of its own. It unveiled cleantech tax credits worth $83 billion in the budget, with support for clean electricity generation, advanced manufacturing and efforts to develop hydrogen fuels among others. According to Tyler Hamilton, a cleantech expert at MaRS, this spending will help Canada attract and retain innovators who might have been tempted to go to the U.S. “If Canadian companies see opportunities and projects getting capital in the U.S., they’re more likely to relocate.”

Canada rolled out the red carpet for U.S. tech workers

In July, the federal government launched a fast-track immigration program aimed at wooing highly skilled workers from the U.S. The new work permit allows holders of a U.S. H1-B visa for specialty occupations, including tech, to work in Canada for up to three years. The policy was partly a response to mass layoffs by tech companies south of the border. With foreign workers there scrambling to find new jobs to stay in North America, the government hoped to entice some of them to join Canadian ventures. It worked: It took just one day for the program to hit its limit of 10,000 visa applications.

Other newsmakers:

• Canada’s first-ever training facility for drones and robots opened at Area X.O in the nation’s capital.
• Canadian crypto companies WonderFi, Coinsquare and CoinSmart merged to form a mega-trading platform with 1.6 million users.
• Toronto-Waterloo, Vancouver and Calgary were named among the top 50 regions for cleantech innovation globally. Meanwhile, Atlantic Canada was rated the world’s eighth-best area for startups linked to the ocean economy.
• The first clinical study looking into whether psychedelics could help people experiencing persistent feelings of hopelessness and meaninglessness was approved by the FDA.

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Photo illustration: Monica Guan. Photos: Unsplash; Project Arrow; RingtailedFox.