In June 2025, Prime Minister Mark Carney unveiled a new partnership with Cohere – a Toronto-based AI company. The government billed it as a “Made in Canada” innovation to modernize the public service. Cohere is set to receive $240 million in federal funding under this strategy.
But the story behind the announcement looks very different. Cohere relies on American firm CoreWeave to run its data centres, tying up Canadian taxpayer dollars in US operations. When asked to name specific government projects that justify the hefty investment, AI Minister Evan Solomon couldn’t provide a single example. And the promised public registry of government AI projects that was meant to ensure accountability still hasn’t been delivered.
Compounding our concern is the fact that unions like PIPSC – which represent the workers most likely to be impacted by these decisions – have been excluded from discussions and the government’s AI Advisory Committee. Yet, corporations are given seats at the table. This imbalance demonstrates whose needs are shaping this policy.
A partnership built on secrecy
The federal government’s AI partnership with Cohere was announced last month, but the details remain secret. Ottawa says AI won’t cost jobs, yet Cohere’s “North” tool is already replacing office tasks at Bell and RBC.
When the UK made a deal with Cohere, the scope was public and clear – it included hiring and defence. Why can’t we get the same transparency here? Canadians, including public servants, deserve to know what’s being planned behind closed doors – and unions must be at the table.
Where is the promised public AI registry? Why are unions excluded from the AI Advisory Committee while corporations get privileged access? If the government wants to use smart technology, it should be smart enough to tell Canadians how it will affect jobs, tasks, and the future of public services. Keeping this deal secret only creates more questions – and less trust.
Outsourcing and the looming threat of privatization via AI
This partnership with Cohere is giving $240 million to a company that generates 90% of its revenue outside Canada and uses the US company CoreWeave to operate its data centres. Meanwhile, Canada’s in-house IT professionals, including 20,000 PIPSC members, continue to be sidelined.
Cohere isn't just partnering with government – it's also cutting deals with private telecom companies to sell AI services back to that same government. Bell Canada has signed a revenue-sharing agreement to market Cohere's AI tools to government and enterprise customers, with both companies splitting the profits from public sector contracts.
This creates a circular profit scheme: taxpayers fund Cohere's development through the $240 million government investment, then pay again when Bell sells Cohere's services back to government departments.
This approach transforms public services into revenue streams for private companies – a dangerous precedent that threatens the independence and integrity of federal operations.
This isn't Canadian AI leadership or modernization – it's privatization with a Canadian flag on it.
Public service cuts and the Phoenix parallel
The government wants PIPSC members to trust that AI won't be used to replace jobs, but this partnership comes as Ottawa is ordering 15% cuts to public services – the deepest cuts in generations and breaking its first promise to the federal workforce. It raises real concerns that AI will be used to replace workers.
What’s more, the government is cutting budgets while expecting new technology to magically do more work for less money. We've seen this before with the Phoenix Pay system: it promised savings but instead, replacing humans with technology continues to cost billions of dollars and cause harm nearly a decade later.
Rushing AI implementation without proper safeguards, regulation, or worker consultation risks repeating those costly mistakes on an even larger scale.
It’s a tough time for this government to ask for trust.
What PIPSC wants to see
We support AI that helps civil servants do more and better work. But federal workers and the Canadians we serve deserve better than AI policies driven by corporate interests and profit-sharing agreements. We need transparency, genuine consultation, and protections that ensure AI serves the public interest – not just private balance sheets.
What we need:
- Transparency: Deliver the promised public AI registry so citizens and workers know how AI is being used
- Real consultation: Include union representatives on the AI Advisory Committee, and commit to ongoing consultation, including at the bargaining table
- Canadian expertise: Use our own federal IT professionals to develop AI tools instead of outsourcing to companies with foreign operations
- Worker protections: Include AI provisions in collective agreements with guarantees for training and protection against mass layoffs
- Independent oversight: Establish AI regulation and oversight to protect workers and all citizens
Cohere may be valued at $6.8 billion, but that valuation is built largely on revenue from outside Canada and partnerships that prioritize corporate profits over public service delivery. The federal government's secretive approach to AI implementation, combined with massive spending on outside contractors while sidelining our own professionals, looks more like privatization than modernization.
When we outsource critical government functions to foreign-operated data centres and exclude our own experts from decision-making, we weaken Canadian sovereignty and undermine the very public services that define us as a nation. At a time when other countries are questioning Canada's strength and independence, we should be investing in Canadian expertise and transparent governance – not handing over public services to profit-driven partnerships with foreign operations.
This isn't how you build a resilient, sovereign country. It's how you dismantle one, one contract at a time.