Exploring the Impact of Artificial Intelligence on Canada's Future

Artificial intelligence (AI) is reshaping industries and daily life around the world. Canada stands at a unique crossroads where AI technology promises to influence its economy, society, and global standing. Understanding how AI will affect Canada’s future helps citizens, policymakers, and businesses prepare for the changes ahead.

Canadian city skyline with AI data visualization

Canada Federal System

Canada has a federal system, which means that jurisdictions over policy areas relevant to AI – including privacy, health, education, environment and transportation – are shared with or under provincial/territorial governments. The federal government works with local governments to develop national standards and policy frameworks, but depending on policy areas, following these will depend on provincial/territorial governments.

AI Regulatory & Governance Status in Canada

Today, Canada has no comprehensive federal legislation or regulatory measures specific to AI. The Parliament recently tabled the Digital Charter Implementation Act (DCIA), which aims to reform Canada’s private sector data protection legislation and propose specific provisions to regulate the industry’s use of automated decision-making systems. Additional initiatives include department or sector-specific guidelines. For instance, the Treasury Board Secretariat released the Directive on Automated Decision-Making (DADM) and an accompanying Algorithmic Impact Assessment tool to guide the use of automated decision making within federal public service.

For instance, the federal government’s Personal Information Protection and Electronic Documents Act (PIPEDA) has set the national standards for the private sector; but in Alberta, British Columbia, and Quebec, provincial privacy laws that are ‘substantially similar’ to PIPEDA are applied instead.

There is no single body designated to enforce AI-related policies, and the relevant laws and regulations largely address the use of data. In this context, the OPC and the Competition Bureau are the two main Canadian federal entities that will play the most significant role in regulating AI until more AI-specific regulations are introduced.

AI governance is still largely left to self-regulation by the industry, informed by principles and frameworks such as the Canadian-led Montreal Declaration for a Responsible Development of Artificial Intelligence and the Toronto Declaration: Protecting the rights to equality and non-discrimination in machine learning systems. In October 2019, the CIO Strategy Council published the world’s first national standards on AI, followed by other standards on data governance and digital trust and identity.

The government has published guidance documentation and white papers to help inform how laws need to evolve to cover specific AI-related opportunities and challenges. Examples include:

·       the Department on Innovation, Science and Economic Development’s white paper Strengthening Privacy for the Digital Age: Proposals to modernize the Personal Information Protection and Electronic Documents Act;

·       the Office of the Privacy Commissioner’s (OPC) paper A Regulatory Framework for AI: Recommendations for PIPEDA Reform;

·       the Law Commission of Ontario’s (LCO) The Rise and Fall of AI and Algorithms in American Criminal Justice: Lessons for Canada (October 2020); and

·       the LCO’s Regulating AI: Critical Issues and Choices

Canada AI Global Coverage

Over the past few years, there have been several bilateral and multilateral initiatives on AI, which have largely served as forums for discussing larger directions, information sharing and policy coordination. These initiatives at the G7, the G20 and the Organization for Economic Co-operation and Development (OECD) have resulted in key ministerial statements on AI, such as the G7 Innovation Ministers’ Statement on Artificial Intelligence (2018), the G20 AI Principles (2019) and the OECD Principles on AI (2019), which reflect the consensus about the need to promote ‘responsible AI’ and general policy directions AI governance among developed economies. While these forums do not impose ‘hard’ regulations, they provide the space to develop consensus on broader principles and shape global norms, which eventually translate into concrete legislation and regulatory measures at the national level.

Canada has been not only an active participant, but also a leader in these international initiatives. For instance, Canada hosted the G7 Multi-stakeholder Conference on Artificial Intelligence in 2018 and, building on its work, launched the Global Partnership on AI (GPAI) in partnership with France in June 2020. The GPAI is a multi-stakeholder initiative that seeks to become “a global reference point for specific AI issues” and has 15 founding members, including the European Union and the United States. In this context, Canada’s domestic policies on AI are expected to align with the directions set by forums such as the G7, the G20 and the OECD.

AI in the following sectors from a regulatory perspective

Healthcare

The Canadian Institute for Advanced Research’s AI for Health Task Force has identified the potential of AI to:

improve the effectiveness, efficiency and safety of healthcare delivery; and

contribute to better public health policies and the development of innovative tools and treatments in Canada.

Public sector

The government of Canada released a Directive on Automated Decision-Making, which sets out the purposes, objectives and goals of employing AI to make or assist in making administrative decisions to improve service delivery, and an accompanying Algorithmic Impact Assessment tool. While the directive offers helpful insights, Canada does not currently have regulations specific to the use of AI in the public sector.

Professional services

The use of AI in professional services includes risk mitigation analysis, applied in industries such as consulting and regulatory compliance. As of April 2021, British Columbia and Ontario have approved regulatory sandbox pilots for innovative legal services, which would allow companies to get a provisional approval for operation, subject to risk-based monitoring and reporting requirements. However, Canada does not have regulations specific to the use of AI in the professional services sector.

Agriculture

Agriculture is another key economic sector for Canada and the government will be investing up to C$153 million in the protein industries supercluster, based in the Canadian prairie provinces. AI could be applied in all stages of agricultural production (planting, seeding and harvesting) and farm management. Specifically, AI applications in predictive analytics could help with weather predictions, farm efficiency and early detection of risks. The application of AI in agriculture raises potential ethical concerns over algorithmic transparency, data and privacy, animal welfare and the environment, which could lead to regulatory issues. However, Canada does not have regulations specific to the use of AI in the agricultural industry.

Manufacturing

Some 10% of Canada’s economy depends on manufacturing and the government of Canada has invested in advanced manufacturing to maintain its global competitiveness. For instance, one of the five superclusters is dedicated to advanced manufacturing, with total funding of up to C$230 million. In advanced manufacturing, AI can be integrated into all stages, from production to quality control. Currently, Canada does not have regulations specific to the use of AI in the manufacturing sector.