Canadian firms link AI progress with strong privacy focus

Canadian businesses are embracing artificial intelligence (AI) while maintaining a strong commitment to data protection, according to new research commissioned by Zoho Corporation and conducted by Arion Research. The study, The AI-Privacy Equation: How Canadian Organisations Navigate AI Adoption with Privacy Leadership, surveyed 349 business professionals across industries and company sizes to understand how Canada's enterprises are integrating AI while safeguarding privacy.

The findings reveal that a significant 84.5 per cent of Canadian organisations are actively exploring or implementing AI. Despite this momentum, leadership involvement remains limited - only 26 per cent of AI adoption initiatives are led by CEOs, presidents or owners, while the majority (52 per cent) are being driven by teams aged between 31 and 50.

The report highlights that Canadian organisations view privacy not as a constraint but as a strategic advantage. In total, 71 per cent of respondents rated their privacy investment as "adequate to excellent", and almost half (47 per cent) allocate between 11 and 30 per cent of their IT budgets to privacy initiatives.

"As Canadian organisations integrate AI into their operations, it's encouraging to see them embrace privacy as an enabler," said Chandrashekar LSP, Zoho Canada's Managing Director. "The proprietary data that businesses feed into large language models may not remain proprietary, and AI agents and chatbots can expose sensitive company data. So, including strong privacy foundations with AI implementation is essential. Without a privacy-first design, the value of proprietary data can quickly be overshadowed by the risk of losing it."

The study shows that 72 per cent of Canadian businesses now have dedicated privacy officers, with only 8.8 per cent considering their privacy investment inadequate. This reflects a growing maturity in privacy governance across Canadian enterprises.

While the adoption rate is high, only a small proportion, seven per cent, report advanced integration of AI systems. The largest share of organisations, at 23 per cent, are in the early exploration phase, while 19 per cent are using AI on a limited departmental basis and 17 per cent report widespread implementation.

These figures point to a staged and thoughtful approach to AI adoption. Canadian firms appear to prioritise risk management and data protection over speed, reflecting what the report calls a "measured progress" strategy.

Despite optimism, the research identifies several barriers that continue to hinder AI progress. Privacy and security concerns remain the most significant, cited by 39 per cent of respondents, followed by cost concerns at 35 per cent, data quality challenges at 33 per cent, and lack of technical expertise at 32 per cent.

However, these challenges have not dampened confidence. More than half (50 per cent) of organisations said they have strengthened their privacy measures since adopting AI, and 59 per cent of respondents reported that their organisations have a clear understanding of the privacy implications of their AI systems.

The research underscores the growing importance of governance frameworks for AI use. Among Canadian organisations surveyed, 43 per cent have documented AI use policies, 38 per cent conduct regular privacy audits of AI systems, 34 per cent practise data minimisation for AI training, and 33 per cent have implemented explainability requirements to ensure accountability.

These structured approaches to AI governance indicate that Canadian organisations are embedding privacy into the fabric of innovation. This privacy-first mindset helps mitigate risks associated with the use of sensitive data while reinforcing stakeholder trust.

The study outlines three central insights shaping Canada's AI trajectory:

1. Privacy-first AI – Privacy is being treated as an enabler of innovation rather than a barrier.

2. Measured progress – Organisations are taking a deliberate, step-by-step approach to AI adoption.

3. Trust advantage – Canada's strong privacy culture and regulatory environment position it for global leadership in responsible AI.

Arion Research identifies five key national strengths contributing to Canada's leadership in responsible AI: educated workers, innovation capability, global reputation, technology hubs, and social policies. These factors collectively provide what the report calls a "trust advantage" for Canada in the global AI economy.