A once in a lifetime macro-opportunity for U.S. investors.

The Trend Is Your Friend, why Toronto’s AI ecosystem might just be a once in a lifetime macro-opportunity for U.S. investors.

As a US citizen and the CEO of a Canadian AI startup, I am often asked how I feel about the current cross-border tensions, especially when it comes to my personal finances. In my experience, few things are more powerful than aligning with a major macro trend. That is the idea behind the saying, "the trend is your friend." From where I sit, Toronto-based Canadian AI companies may represent a once-in-a-lifetime macro investment opportunity for investors, particularly those based in the United States, given the current geopolitical climate.

1. Talent Density: Silicon Valley’s Rival, Without the Baggage

The University of Toronto and the University of Waterloo are global leaders in AI research. Both focus on practical skills and offer outstanding co-op programs that rank among the best in the world. These schools are top sources of talent for Silicon Valley, but many graduates now choose to stay in Canada. More Canadians are also returning from Silicon Valley, drawn by greater stability, lower costs, and an exceptional quality of life. These returning professionals bring hard-won experience from leading tech firms. As a result, the Toronto region offers a talent concentration that rivals Silicon Valley, but with significantly lower costs. Salaries, real estate, and operational expenses are more affordable, allowing each venture capital dollar to stretch further.

2. Frictionless Global Scaling: Unique Economic Tailwinds

Canadian AI startups enjoy several structural advantages that support international growth:

a) No Tariffs on Software

Software and services are not subject to US tariffs, unlike physical goods. This allows startups to expand internationally with minimal trade barriers.

b) Broad Market Access

Close proximity to the US and trade agreements such as CETA with the European Union provide access to major global markets. Toronto startups can sell to Dallas or Frankfurt just as easily as to Montreal.

c) Currency Advantage

With the Canadian dollar roughly 30 percent weaker than the US dollar, companies that raise capital in USD and spend in CAD gain a cost advantage. For US investors, this means more favorable valuations and potentially stronger returns.

d) CanExport Support

The Canadian Consulate offers hands-on support to help companies grow internationally. This includes customer introductions and grants to help open new markets.

At a time when tariffs and trade barriers can limit growth, Canada offers a rare model that supports global scale.

3. Non-Dilutive Funding: A True Multiplier

The Canadian government provides an exceptional level of non-dilutive capital that fuels startup growth without requiring equity. At Illuminex AI, we have successfully accessed programs such as:

• Scale AI, which funds projects in the $2 million and up range to accelerate the adoption or commercialization of AI across value chains

• OVIN, which provides up to $1 million for developing, testing, and commercializing innovative mobility technologies

• IRAP, which offers up to $10 million to support innovation-driven growth through R&D and technology development

• SR&ED, which delivers significant refundable tax credits on eligible R&D spending, with additional support from provincial programs

  
  

For example, a Toronto-based AI startup that raises 1 million US dollars, equivalent to roughly 1.4 million Canadian dollars, could access an additional 500,000 to 2 million dollars in grants and credits. This can double the company’s financial runway without diluting ownership.

The Case for Canada

In a world marked by rising geopolitical risks, increasing costs, and slower growth, Canada offers a compelling alternative. Toronto combines strong talent, stable conditions, scalable infrastructure, and financial upside. For US investors, this is more than a geographic hedge. It is a sound investment thesis hiding in plain sight. The fundamentals are strong, the timing is right, and the macro trend is clear.

The next great AI company may not come from Menlo Park. It might just emerge from Yonge Street.