This document provides a summary of the global regulatory landscape for artificial intelligence and proposes principles for responsible AI leadership in Canada. It discusses how the EU, UK, and US are regulating AI and the lessons for Canada. The key principles for Canada are: putting trust first by building public trust in AI systems; providing regulatory clarity and certainty for innovators; developing regulations at a fast pace to establish Canada as a leader; and gearing Canada's framework for export to influence international standards. The document aims to help Canada define itself as a leader in responsible AI development that balances innovation and protecting rights.
2. Introduction
01
The Challenge for Canada
02
Global Regulatory Landscape for AI
03
AI Leadership Principles
06
Acknowledgements
08
About the Council of Canadian Innovators
09
Contents
3. Introduction
Artificial Intelligence (AI) will be a defining
challenge for policymakers in our time. As a
new, and genuinely general-purpose family
of technologies, AI has the potential to
radically impact the economy and society in
profound ways — on a scale equivalent to
the Industrial Revolution and electrification.
What is unlikely to change, however, are the
fundamental economic structures that
enable firms to be successful.
Waves of economic and technological change built the knowledge-
based economy, where more and more value is derived from
intangible assets like intellectual property rights and data. Today,
network effects and vast data assets drive outsized success for a
few firms. As a result, today’s innovation economy is characterized
by superstar firms equipped with the data and IP assets they need to
fend off competitors.
AI-driven businesses will thrive based on the freedom to operate
granted by their control of key IP, as well as their access to data,
replicating the winner-take-most pattern we’ve seen in previous
generations of digital technology. Policymakers focused on creating
lasting and inclusive prosperity should prioritize domestic Canadian
firms, and embrace policies that support their growth to become
global champions. By leveraging their success, we can realize
broad-based gains for Canadians.
PREPARED BY
Laurent Carbonneau
Nicholas Schiavo
Wenny Jin
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4. The Challenge
for Canada
The broad AI sector is currently valued around $200 billion
dollars and by 2030 will likely expand to around $2 trillion.¹
Canada is well-positioned in the industry in terms of highly-
qualified personnel and leading research, but Canadian
companies face significant barriers while scaling.²
A lack of scaling Canadian companies
means that many of the benefits created
from public investment in research and
training, including intellectual property, are
accruing to firms outside of Canada – for
example, nearly 75% of intellectual property
rights (IPRs) generated through the federal
government’s AI Strategy are owned by
foreign entities, including American tech
giants such as Uber, Meta and Google.
The significant challenge in Canada will be
constructing a policy and regulatory
framework that encourages the rapid
growth of domestic companies into global
leaders. The Council of Canadian Innovators
believes that scaling innovative companies
need access to talent, capital and
customers, as well as strong marketplace
frameworks that enable success, including
law and regulation.
Canada should create and
implement a Responsible AI
Leadership roadmap, based on
four principles: cultivating citizen
and consumer trust, regulatory
clarity and agility, and an export
focus to international rule- and
standards-setting.
¹ https://www.grandviewresearch.com/industry-analysis/artificial-intelligence-ai-market
² Scale AI, “AI At Scale: How Canada Can Build an AI-Powered Economy,” 2023, 3. CCI | 2
5. Global Regulatory
Landscape for AI
The Canadian federal government tabled the Artificial Intelligence
and Data Act (AIDA) as part of the broader Bill C-27, the Digital
Charter Implementation Act. If passed, AIDA will regulate the design,
development, and use of “high-impact” AI systems in the private
sector. Other countries have already taken steps to regulate AI. As
Parliament and the government consider AIDA, they should weigh
how other jurisdictions have approached regulating AI in their
deliberations, especially in avoiding pitfalls that add complexity and
erode trust as international norms continue to evolve.
European Union
The first category includes uses like ‘social
scoring’ or constant facial recognition
tracking in public, and such uses are simply
banned.
The law focuses on ‘high-risk’ systems,
including systems used in products covered
by EU product safety laws, as well as a
broad family of other uses cases where
automated decision-making is directly and
significantly consequential to individuals
with the potential to unfairly discriminate or
cause harm – including job applications,
admission to educational institutions, and
biometric identification.
The European Union’s AI Act passed a
significant legislative milestone in June
2023, setting it on a path to coming into
force in 2026. The EU Single Market is
significant and regulations and standards
that apply in the European market often
become global leaders.
The AI Act centres around four tiers for AI
systems based on their risk to human
safety, livelihoods and rights: unacceptable,
high, and low or minimal (which are not
regulated at all beyond existing privacy and
consumer protection rules).
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6. High-risk systems require risk management
measures to identify, evaluate and mitigate
negative impacts, and maintain public
technical documentation and decision logs
to show compliance. The law mandates
human oversight and adequate
cybersecurity, and providers of high-risk AI
services must notify national governments
that they are making it available. The EU will
also maintain a union-wide database of high-
risk systems.
AI systems that present limited risk will not
be as tightly regulated. Instead, they will
require simple notification and transparency
to users.
The Act creates a limited carveout to
promote innovation through the creation of
regulatory sandboxes. The Act also creates
a European AI Board, made up of national AI
authorities and the EU Data Protection
Supervisor, to advise the Commission on AI
issues and promote best practices. Despite
the fairly far-reaching requirements in the
legislative text, the EU law, in an important
step towards making compliance simpler,
allows for the development and recognition
of standards to govern regulated activities
rather than prescribing methods through
regulation.
United Kingdom
In 2021, the UK government published its
National AI Strategy, which sets out a plan
for the responsible adoption of AI
technologies. The high-level strategy
focuses on ethics, transparency, and
accountability. The UK also established an
AI Council in 2019 to advise the government
on AI policy and regulation as well as the
Centre for Data Ethics and Innovation, an
independent advisory body that provides
guidance on the responsible use of data-
driven technologies.
In March 2023, the UK government
published a white paper staking out what it
called "A pro-innovation approach to AI
regulation." The white paper sets out a
"flexible" approach to regulating AI that is
intended to both build public trust and make
it easier for businesses to grow.
Rather than creating a new, dedicated
regulatory body or single legal instrument
for AI, the UK Government is encouraging
regulators and departments to tailor
strategies for individual sectors, with the
goal of maintaining support for innovation
and adaptability. The white paper outlines
five principles that regulators must consider
to facilitate the safe and innovative use of AI:
safety, transparency, fairness,
accountability, and redress. The
government has indicated that the door to
legislation remains open should it be
needed, and also recognizes the
complementary role played by standards.
United States
US AI law is mostly being made at the state
level — to date, there is no comprehensive
federal law in place. California and Illinois
have passed laws focused on data privacy
and the use of AI.
Federal action is starting to take shape,
however. In December 2022, the White
House’s Office of Science and Technology
Policy released a blueprint for an AI Bill of
Rights to define principles for the
development and deployment of AI in the
US. This document will guide future federal
AI-related policy in the US and could help to
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7. address some of the key challenges
associated with AI development and
deployment.
The US is also moving through the National
Institute of Standards and Technology to
create technical standards like the AI Risk
Management Framework.
The American government has also been
proactive in working at the international
level to secure commitments on AI
standards and rules. For example, at the
end of May 2023, the US and EU announced
their intention to draft an AI code of
conduct. In June 2023, the UK and US jointly
announced the Atlantic Declaration, a broad
bilateral agreement that includes (as part of
a long list) a commitment to closer
cooperation on AI regulation, ethical
standards, and sharing best practices.
The White House also announced at the
end of July 2023 that they had secured
commitments from significant private sector
actors on AI safety – including Alphabet,
Amazon, Meta and Microsoft.
Lessons for Canada
The approach that Canada is taking, embodied in the Artificial Intelligence and Data Act, most
closely resembles that of the European Union by creating in legislation categories of AI
technologies to be regulated. Canada is also participating in several international AI
governance fora, including the G7’s Hiroshima Process.
Without the market size and international leadership weight of (especially) the US or the
European Union, Canada should take care to ensure that its eventual governance model does
not stray too far from the emerging global norm – an outlier policy mix in Canada would
drastically harm the efforts of Canadian-headquartered companies to scale globally and to
contribute to Canadian economic and productivity growth and innovation.
In creating a legal framework, CCI believes that Canada can succeed by adopting a strategy
of responsible AI leadership that leverages high trust, clear rules, fast action and global
leadership to pave the way for commercial success at home and abroad for Canadian
companies.
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8. Responsible AI
Leadership
Principles
Canada has an opportunity to define itself
as a leader in responsible AI development
and deployment and export a flexible
approach that allows for innovation while
protecting citizen and user rights.
Put Trust First
Innovators in AI recognize that unlocking the
economic potential of AI technology
requires trust and buy-in from the public that
their products and services are safe and
produce fair results for end users.
Canada’s AI framework should build trust
and certainty for the public that products
and services are safe and reliable through a
clear statement of user and citizen rights
with regard to automated decision systems.
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Build an institutional home for public interest
technology expertise by creating an
independent, public-facing Parliamentary
Technology and Science Officer to advise
Parliament and Canadians about
technological issues in the public interest as
part of AIDA, as a complement to the planned
Artificial Intelligence and Data Commissioner
housed within the executive.
Build trust for Canadians by including a
preamble that enumerates AIDA’s protections
for citizens and users with regard to AI
systems, such as protection from biased
outputs or harms.
9. Clarity and Certainty
Innovators and investors are looking for
rules that are clear and consistent, while
recognizing that one size cannot fit all use
cases, companies or end users.
The federal government’s existing Directive
on Automated Decision Making, like the
EU’s AI Act, includes a tiered structure. This
could be the basis for a private sector
regulatory model, with a sliding scale of
compliance and disclosure obligations
based on self-assessed tier with an
accompanying mechanism for public
complaints and audit. AI regulations should
also allow for supervised ‘sandboxes’ for
novel use cases.
Ensure that AI regulations, where regulations
are the right approach, are sensitive to a
range of uses and potential impacts, and
potentially incorporate a tiered structure with
corresponding rules and responsibilities for
specific applications of AI.
Ensure that the rules and standards
innovators must comply with are clear and
easy to understand.
Allow for regulatory sandboxes or pilots for
novel use cases.
Develop at Speed
As major peer and competitor countries
accelerate their efforts to build policy
frameworks for the development and use of
AI, Canada should move to be among the
first countries with a durable and trusted
framework to establish a global brand as a
leader in responsible AI.
Move up the schedule for regulatory
development and implementation if AIDA
passes (12 months after Royal Assent) and
aim for a ‘minimum viable product’ approach
that allows for flexibility and iteration.
Allow for and prioritize the development of
standards for AI governance wherever such
an approach would represent an
improvement in speed over regulation while
adequately protecting citizen and user rights.
Prioritize the creation or adoption of
governance measures around higher-impact
AI use cases or technologies first and provide
for an enforcement ‘on-ramp’ that is sensitive
to industry learning curves.
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10. Gear for Export
If Canada promotes rights for the public,
certainty for innovators, and is among the
first countries to publicize a clear and
replicable set of rules, responsible AI
leadership will be a competitive advantage
for Canada and for Canadian companies.
Just as GDPR increased consumer
confidence and created a global gold
standard for privacy, Canada’s AI rules
should aim to be the world’s most copied.
Ensure that Canadian companies have simple
means to get regulatory recognition in other
markets by continuing to shape international
policy direction and standards setting through
forums like the Global Partnership on Artificial
Intelligence, the OECD AI Principles, and the
G7 Hiroshima Process.
Ensure that our regulatory framework is clear
and useful ‘out of the box’ to inspire other
countries to use it.
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Acknowledgements
Tara Dattani, Director of Legal, Ada
Nicole Janssen, Co-Founder & Co-CEO, AltaML
Humera Malik, CEO, Canvass Analytics
Dr. Alexandra Greenhill, Founder & CEO, Careteam Technologies
Ronak Shah, Privacy and AI Product Counsel, Cohere
Laure Lalot, Director, Legal Compliance, Coveo
Nabeil Alazzam, CEO, Forma.ai
Amir Sayegh, AVP, Data Product Discovery, Geotab
Rebecca Wellum, Vice President, Compliance, Geotab
Julia Culpeper, Senior Program Manager, Innovation Asset Collective
Mike McLean, CEO, Innovation Asset Collective
Peggy Chooi, Strategic IP Specialist, Innovation Asset Collective
Geoff MacGillivray, CTO, Magnet Forensics
Ehsan Mirdamadi, Partner and CEO, NuBinary
Sina Sadeghian, Co-Founder & CTO, NuBinary
Adolfo Klassen , CEO, Paladin AI
Ian Paterson, CEO, Plurilock
Yvan Couture, President & CEO, Primal
Sam Loesche, Head of Policy and Public Affairs, Waabi
Mathieu Letendre, Legal Advisor, Workleap
This report was created in
consultation and collaboration
with CEOs and commercialization
experts from Canada's AI
ecosystem. We thank them for
participating in roundtable
discussions and interviews that
have provided the necessary
details to develop a credible
roadmap for responsible AI in
Canada.
11. Established in 2015, the Council of Canadian
Innovators represents and works with over 150 of
Canada’s fastest-growing technology companies.
Our members are the CEOs, founders, and top
senior executives behind some of Canada’s most
successful ‘scale-up’ companies. All our
members are job and wealth creators, investors,
philanthropists, and experts in their fields of
healthtech, cleantech, fintech, cybersecurity, AI
and digital transformation. Companies in our
portfolio are market leaders in their verticals,
commercialize their technologies in over 190
countries, and generate between $10M - $750M
in annual recurring revenue. We advocate on their
behalf for government strategies that increase
their access to skilled talent, strategic capital, and
new customers, as well as expanded freedom to
operate for their global pursuits of scale.
Learn more about our members and our initiatives
at www.canadianinnovators.org.
About the Council of
Canadian Innovators
Laurent Carbonneau
Director of
Policy & Research
lcarbonneau@canadianinnovators.org
Nicholas Schiavo
Director of
Federal Affairs
nschaivo@canadianinnovators.org
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Wenny Jin
Research Assistant
