Canada is launching its first provincial hub dedicated to physical artificial intelligence, a strategic move to strengthen the country's ability to compete globally in robotics, intelligent automation, and autonomous systems while keeping high-value talent and intellectual property at home. The Physical AI Centre of Excellence (PACE) Ontario, a partnership between the Centre for Designing Change (CDC) and Ontario Tech University, represents the opening salvo in a national effort to position Canada as a leader in technologies that bring AI into the physical world.

What Is Physical AI and Why Does It Matter for National Competitiveness?

Physical AI refers to artificial intelligence systems deployed in the real world through robotics, intelligent automation, autonomous systems, and advanced manufacturing. Unlike AI models that process text or images on computers, physical AI technologies actually build things, move goods, manage infrastructure, and operate in sectors ranging from manufacturing and logistics to defense, healthcare, energy, and mining. As countries around the world invest heavily in sovereign AI capabilities, networks like PACE help Canada retain the talent and intellectual property that fuel the physical AI economy, rather than watching those resources migrate elsewhere.

"Physical AI represents the next frontier of industrial competitiveness, reshaping how nations innovate, manufacture, secure critical infrastructure and compete globally. Canada cannot afford to be a spectator, or simply a pipeline for the talent and companies that fuel the physical AI economy elsewhere," said Sumit Bhatia, Chair of the Board at the Centre for Designing Change.

Sumit Bhatia, Chair of the Board, Centre for Designing Change

How Will PACE Ontario Strengthen Canada's Physical AI Ecosystem?

PACE Ontario will operate across four interconnected areas designed to build a complete national infrastructure for physical AI development and adoption:

• Applied Research and Commercialization: Advancing physical AI technologies including robotics, intelligent automation, autonomous systems, and advanced manufacturing through collaborative research, testing, validation, and knowledge exchange between academia and industry partners.
• Industry Adoption: Helping Canadian organizations evaluate, adopt, and scale physical AI technologies in ways that deliver economic and societal benefits while maintaining human oversight and control over critical decisions.
• Talent and Workforce Development: Creating experiential learning, upskilling, and reskilling opportunities that prepare students and workers to thrive alongside rapidly evolving technologies in the physical AI space.
• National Ecosystem Leadership: Convening Canada's physical AI community to advance responsible innovation, foster collaboration across sectors, and ensure emerging technologies remain focused on improving outcomes for people and communities.

Ontario Tech University will serve as the Founding Academic and Research Partner for PACE Ontario, bringing its strengths in applied research, experiential learning, and deep industry partnerships to the initiative. The university's internationally recognized ACE research and testing facility will serve as an anchor site for future programming, technology demonstrations, and collaborative research efforts.

"Ontario Tech was built for this moment. Through PACE Ontario, we will mobilize our research expertise, talent and innovation infrastructure to solve real-world challenges and better the lives of Canadians. Physical AI must be developed in service to people, with human oversight and people-centred decision-making at its core," explained Dr. Steven Murphy, President and Vice-Chancellor of Ontario Tech University.

Dr. Steven Murphy, President and Vice-Chancellor, Ontario Tech University

Why Is This Launch Significant for Canada's Sovereign AI Strategy?

PACE Ontario is the first regional hub within the CDC's national PACE network, signaling a coordinated national vision for physical AI development. The Centre for Designing Change, a national not-for-profit innovation agency, established the network to accelerate the responsible development and adoption of physical AI across Canada by bringing together government, industry, academia, and technology leaders. This approach recognizes that physical AI competitiveness depends not just on research breakthroughs, but on the ability to translate those breakthroughs into real-world applications and to retain the skilled workforce needed to sustain innovation over time.

"Canada has all the ingredients to lead, but our success will depend on how effectively we connect our strengths into a coordinated national ecosystem. PACE was created to build that platform, and PACE Ontario represents the first step in that national vision," noted Kulbir Colin Singh Dhillon, Executive Director of the Centre for Designing Change.

Kulbir Colin Singh Dhillon, Executive Director, Centre for Designing Change

The timing reflects a broader global recognition that physical AI represents a critical frontier for industrial competitiveness and economic sovereignty. By establishing PACE Ontario now, Canada is positioning itself to participate actively in shaping how these technologies develop and are deployed, rather than simply adopting solutions created elsewhere. The partnership between CDC's national leadership and Ontario Tech's applied research capabilities creates a model that can be replicated across other provinces, building a distributed network of physical AI expertise and capacity throughout the country.