The High Cost of 'Efficiency': Who is Being Consulted in the Smart Cities AI Rush?

### Opinion: The Innovation Blind Spot

When the tech industry speaks of "efficiency" and "operational problems," they are rarely talking about the people living in the cracks of the urban landscape. As we prepare for the ALL IN 2026 gathering in Montréal on September 16-17—and as BetaKit first reported on the event's focus—the narrative is centered on a thrilling race to deploy Canadian AI solutions within our cities. But as a columnist focused on access and inclusion, I have to ask: who is actually in the room when these "real-world needs" are identified?

Innovation is often used as a shield for automation that can lead to surveillance and displacement. When a city seeks to "automate routine tasks" or optimize "public safety," the result is rarely a neutral upgrade. Without explicit mandates for community consultation—specifically from marginalized neighborhoods—these AI-powered solutions risk becoming high-tech tools for exclusion, deployed under the guise of municipal progress.

### The Push for Domestic Deployment

According to reporting from BetaKit, the City of Toronto is betting on Canadian AI startups to solve municipal hurdles through the Smart Cities AI Challenge. This competition, held in collaboration with the City of Toronto at the ALL IN 2026 event, is designed to bridge the gap between startup innovation and actual municipal deployment.

Isabelle Turcotte, the Co-Founder and CEO of ALL IN, argues that the path to a globally competitive Canadian AI industry requires creating opportunities for technology to be deployed at home. Turcotte notes that while cities possess sprawling infrastructure and complex service demands, their procurement systems are often rigorous and time-intensive, making the public sector a difficult market for startups to penetrate.

By connecting identifiable use cases—such as social services, public safety, sustainability, urban mobility, and infrastructure coordination—with AI solutions, ALL IN aims to help these companies secure critical first public-sector clients to accelerate their growth trajectories.

### The Finalists and the Focus

BetaKit reports that the Smart Cities AI Challenge has narrowed its applicants down to six finalists. These companies span a variety of sectors, including cybersecurity, cleantech, and education. The shortlisted firms include:

* **Lawtonica**: A Kingston-based firm providing AI-assisted workflows for building professionals, designers, and city planners to research codes and check zoning. * **Cyberdefence AI**: A Montréal-based AI-native cybersecurity lab specializing in preemptive defense. * **Scentroid**: A firm focused on odour and air sampling technology. * **Industrio AI**: A Vancouver-based company providing software for critical operations. * **Readocracy**: A Toronto-based edtech platform. * **Tbmaestro**: A Montréal-based firm specializing in asset management.

These companies will present their solutions on stage at ALL IN 2026, hoping to secure collaboration opportunities with innovation partners, public organizations, and cities. Turcotte emphasized that the goal is to move beyond mere experimentation to deliver measurable results that can scale across Canadian communities.

### Automating the Citizen Experience

Toronto is not the only government entity leveraging the event to streamline operations. BetaKit notes that the City of Montréal has partnered with the Reinventing the Citizen Experience AI Challenge. This specific initiative focuses on how residents report issues that require city intervention, such as damaged infrastructure, cleanliness concerns, graffiti, or potholes.

The city is seeking AI systems capable of processing these reports via photos, written descriptions, or voice messages. The goal is to automate routine tasks, accelerate the processing of requests, and support better decision-making at the municipal level.

While this may sound like a convenience for the average resident, the shift toward automated reporting systems raises questions about accessibility. If the interface for reporting urban decay is filtered through AI, does it prioritize the neighborhoods with the most digital literacy or the most affluent residents, while further silencing those already ignored by city hall?

### A Global Pattern of AI Integration

The trend of integrating AI into public and industrial sectors extends beyond Canada. BetaKit reports that the AI for Real Impact Challenge is a collaboration between the German digital network de:hub and Germany’s Federal Ministry for Digital Transformation and Government Modernisation. Germany serves as the 2026 country of honour for ALL IN.

This challenge seeks AI systems that are already producing measurable outcomes across a wide array of sectors, including security, healthcare, sustainability, business operations, public services, and manufacturing.

This appetite for "real impact" is a continuation of previous efforts. BetaKit reports that ALL IN conducted an AgriTech AI Challenge last year, which was won by Miraterra and Sollum Technologies. Those companies developed AI-driven technologies for supply-chain efficiency, productivity, and soil and crop management, eventually presenting their work at the United Nations Food and Agriculture Organization's World Food Forum.

As the City of Toronto brings a 40-strong delegation to Montréal, the momentum is clear: the public sector is open for AI business. However, as these systems are deployed to manage our streets, our zoning, and our safety, the lack of transparency regarding community consultation remains a glaring omission. Efficiency is only a virtue if it serves everyone—not just those who can afford the software.