The State of Automation and AI in Quebec in 2025: What SMBs Need to Know
- Simon Cousineau
- 2 days ago
- 4 min read
2025 marks a decisive turning point for Quebec businesses. Between structural labor shortages, persistent productivity gaps, and new funding opportunities, automation and artificial intelligence are no longer optional — they're survival imperatives.
Here's a clear picture of the situation, and more importantly, what you can do right now to take advantage of it.
The Context: Why 2025 Changes Everything
The labor shortage is here to stay
Forget traditional economic cycles. The worker scarcity in Quebec is no longer cyclical — it's demographic. The massive retirement of baby boomers has created a gap that neither immigration nor new generations can fill.
The numbers speak for themselves:
59% of SMBs cite labor shortages as the primary trigger for their automation investments (up from 45% in 2023)
Hydro-Québec anticipates needing 35,000 workers annually by 2035
Remote regions are hit even harder
The consequence? Automation is no longer a cost-reduction strategy. It's a business continuity strategy.
The productivity gap persists
Hourly productivity in Quebec stands at $56.40, below the Canadian average of $59.20 and far behind the United States. This gap limits our ability to raise wages without sacrificing competitiveness.
The good news? 81% of companies that have automated their processes report significant productivity gains. SMBs often see proportionally faster gains than large enterprises — a median improvement of 17%.
Where Does AI automation Adoption Stand in Quebec?
The real numbers (not the hype)
Despite all the buzz around AI, reality is more nuanced: only 12.2% of Canadian businesses use AI to produce goods or services. That's double from the previous year, but it means 87% of companies still operate without it.
Adoption varies drastically by sector:
Sector | Adoption Rate |
Information and Culture | 35.6% |
Professional Services | 31.7% |
Finance and Insurance | 10.9 - 20% |
Accommodation and Food Services | 1.5% |
Agriculture, Forestry | 1.8% |
Transportation and Warehousing | 1.8% |
An interesting Quebec specificity
36% of Quebec businesses use AI for sales and marketing, compared to only 16% in Ontario. Quebec entrepreneurs see AI primarily as a revenue growth tool before considering it for cost reduction.
The Obstacles: Why SMBs Hesitate
Four major barriers consistently emerge:
The financial barrier — 50% of SMBs identify upfront costs as the main obstacle. Yet 62% report ROI in under 3 years.
Lack of strategic vision — One-third of businesses don't use AI simply because they haven't identified clear needs. You don't automate for the sake of automating.
Data maturity — AI feeds on data. Many SMBs suffer from information silos and non-standardized Excel files.
Unawareness of available support — A troubling fact: two out of three SMBs don't know that funding programs exist for them.
Funding Opportunities in 2025
End of CDAP: A transition to navigate
The Canada Digital Adoption Program (CDAP) is coming to an end. Stream 1 (the $2,400 grant) ended on March 31, 2025, and Stream 2 (the $100,000 interest-free loan) is no longer accepting new applications.
But Quebec has stepped up with robust programs.
ESSOR: The new cornerstone
Administered by Investissement Québec, ESSOR is now the go-to program:
Stream 1: Grant covering up to 50% of expenses for digital diagnostics (max $20,000) and implementation plans (max $50,000)
Implementation: Loans with favorable terms for equipment purchases and deployment
Grand V Initiative: For larger projects
This program offers loans with a capital repayment moratorium of up to 48 months — crucial for automation projects where gains materialize gradually.
Other options to consider
OTN via ADRIQ: Up to $25,000 (50% of costs) for expert consulting services
C3i Tax Credit: For equipment and software purchases
Desjardins Fonds C: 25% of project costs, up to $10,000 (stackable with government programs)
Law 25: Constraint or Competitive Advantage?
You can't discuss AI in Quebec without addressing Law 25, one of the strictest data protection legislations in North America.
What you need to know
For any automated decision (candidate screening, credit approval, pricing), you must:
Inform the person concerned
Provide the information used upon request
Offer the possibility of human review
The practical implication
"Black box" AI models become risky for critical decisions. Prioritize explainable AI where the logic can be audited and justified.
The strategic flip
Rather than viewing Law 25 as a burden, forward-thinking companies are turning it into a brand asset. Compliance becomes a trust argument with customers.
Action Plan: Where to Start?
Here's a pragmatic roadmap for 2025-2026:
1. Audit before you automate
Don't automate inefficiency. Use subsidized diagnostics (ESSOR Stream 1) to clean up your processes first.
2. Secure funding now
With CDAP ending, pivot quickly to provincial programs. Funding envelopes aren't unlimited.
3. Start with generative AI
Tools like ChatGPT or Copilot represent "soft automation" — immediate gains without infrastructure overhaul. It's often the ideal entry point.
4. Invest in people
The most powerful tool remains a competent employee equipped with AI, not AI alone. Change management accounts for 80% of an automation project's success.
5. Make compliance an asset
Integrate Law 25 from the design phase of your projects. It's simpler (and cheaper) than fixing things after the fact.
Conclusion: The Opportunity Is Now
Quebec has all the assets: world-class research (Mila, IVADO), robust funding programs, and a high-performing local solutions ecosystem.
The labor shortage challenge can become an unprecedented modernization opportunity — if you act now.
The question is no longer "should you automate?" but "where do you start?"
Want to identify which processes to automate in your business? [Contact us for a free diagnostic.]
Key Takeaways
59% of SMBs automate because of labor shortages
Only 12.2% of businesses use AI — the opportunity is massive
The ESSOR program offers up to 50% subsidies for diagnostics
Law 25 requires human review for automated decisions
Average ROI: under 3 years for 62% of companies
Length: ~1,400 wordsSuggested SEO keywords: AI automation Quebec, SMB automation funding, Law 25 AI compliance, ESSOR Investissement Quebec, Quebec business productivity
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