Canada’s AI regulations: An overview of the Artificial Data and Intelligence Act (AIDA)
As artificial intelligence (AI) use continues to increase across the globe, including Canada, AI regulations become crucial. The Canadian government launched the world’s first strategy for AI in 2017 and has been exploring the potential, risks and ramifications ever since.
What is the current state of AI regulations in Canada?
AI governance in Canada is a work in progress. While current measures related to health and financial rights may apply to AI, no AI-specific sweeping framework yet exists for the nation. One piece of proposed legislation has been drafted to fill this void: the Artificial Data and Intelligence Act (AIDA).
Amid this activity, the Canadian government has made AI oversight a top priority, declaring: “Great strides have been made in ethical AI development methods. While this work continues, common standards are needed to ensure that Canadians can trust the AI systems they use every day.”
How does Canada define AI?
In its AI strategy, the Department of National Defence and Canadian Armed Forces define AI as “the capability of a computer to do things that are normally associated with human cognition, such as reasoning, learning, and self-improvement,” while acknowledging that this definition is narrow, by no means universal and open to change in a field that’s constantly shifting and expanding.
Meanwhile, the Canadian government’s current guidance for the responsible use of AI places a heavy focus on two areas: generative AI and automated decision-making AIDA outlines specific definitions for artificial intelligence system, general-purpose system and machine-learning model.
Understanding Canada's Artificial Intelligence and Data Act (AIDA)
In June 2022, Canada’s Minister of Innovation, Science and Industry, along with the nation’s Minister of Justice and Attorney General, introduced the Digital Charter Implementation Act. This sweeping piece of legislation included provisions related to consumer privacy, the protection of personal information and data and artificial intelligence.
The latter, AIDA, “set the foundation for the responsible design, development and deployment of AI systems that impact the lives of Canadians,” the Canadian government writes, “[ensuring] that AI systems deployed in Canada are safe and non-discriminatory” as well as “[holding] businesses accountable for how they develop and use these technologies.
In terms of governance, AIDA: established an AI and Data Commissioner to monitor company compliance and order third-party audits, sharing information with other regulators and enforcers as appropriate.
In terms of approach, the language the Canadian government uses in talking about AIDA is instructive. Prohibitions and penalties, for example, cover:
- “The use of data obtained unlawfully for AI development”
- “Where the reckless deployment of AI poses serious harm”
- “Where there is fraudulent intent to cause substantial economic loss through its deployment”
When developing AI, what data are you using and by what means was it gathered? When deploying AI, do you have the appropriate guardrails in place to mitigate negative consequences? Finally, intent matters.
The use of the words “serious” and “substantial” suggest a pragmatic approach — acknowledging that this is a new technology and that perfect should not be the enemy of the good in its deployment. “The idea is to have a flexible policy, where safety obligations are tailored to the type of AI systems,” the Canadian government writes.
While “economic loss” is specifically pointed out in the bullet points above, other language by the Canadian government extends governance beyond the sphere of finance. Emphasis of “fairness” and “safety” is one example. Another: “ensuring high-impact AI systems are developed and deployed in a way that identifies, assesses and mitigates the risks of harm and bias.”
AIDA risk categorization
“The more risks that are associated with a system, the more penalties there will be,” the Canadian government writes in its online information about AIDA, going on to explain that “businesses will be held responsible for the AI activities under their control.”
With a focus on “high-risk systems,” such requirements will include:
- Identifying and addressing AI risks during the design of AI systems
- Assessing intended uses and limitations — in a way that users understand — when deploying these systems
- Developing appropriate risk mitigation strategies and continuous monitoring
Enforcement and penalties
AIDA outlines types of penalties for regulatory non-compliance: administrative monetary penalties and prosecution, along with a separate mechanism for criminal offences. The Minister of Innovation, Science, and Industry, supported by the new role of an AI and Data Commissioner, would enforce parts of the Act not involving prosecutable offences.
In cases where a system could result in harm or biased output, the Minister would also have the power to order records demonstrating regulatory compliance or an independent audit—or, in the case of imminent harm, order the system to be shut down.
Compliance requirements
“AIDA adopts a detailed approach to compliance requirements,” according to global law firm White & Case. Obligations will include written accountability frameworks with a description of roles, responsibilities and reporting structure and policies and procedures for risk management.
“The proposed Act is designed to provide a meaningful framework that will be completed and brought into effect through detailed regulations,” the Canadian government writes. “These new regulations would build on existing best practices, with the intent to be interoperable with existing and future regulatory approaches. By drawing on common standards, the government is hoping to ease compliance.”
Stay up-to-date with regulatory developments
The introduction of the AIDA marks a pivotal step in ensuring the responsible development and deployment of AI systems. As businesses and organizations navigate this new terrain, it is crucial to stay informed about the latest regulatory developments.
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Looking for more? We invite you to explore our regulatory roundup, where you can find detailed insights and updates on AI governance and other topics important to organizations today. Stay ahead of the curve and ensure your AI practices align with the latest standards and requirements.
