Canada’s new minister of artificial intelligence (AI) and digital innovation says he plans to focus on AI’s economic benefits instead of “over-indexing” on regulation, marking a shift away from the previous government’s attempts to strike a balance between the two.
One of the key aspects of regulating AI is not to put a saddle on “the bucking bronco called AI innovation,” Minister Evan Solomon said at the Canada 2020 conference, put on by the progressive think tank of the same name, in Ottawa this week. “But it is to make sure that the horse doesn’t kick people in the face.”
“My fear is that there are other states that will leapfrog ahead of us on a competitive advantage.”
Evan Solomon
Solomon’s remarks come as Prime Minister Mark Carney’s new government takes a pro-adoption stance on AI, in both the public and private sectors. Prime Minister Mark Carney’s mandate letter stated that cabinet members should be “deploying AI at scale” to boost productivity. During his election campaign, Carney promised another $2.5 billion for broadband and data centres.
The new government’s tack departs from former Prime Minister Justin Trudeau’s approach. Before leaving office, Trudeau emphasized the need for AI guardrails and transparency, signed the first legally binding international AI treaty, and signed a joint statement on inclusive and sustainable AI. His government also proposed Canada’s first-ever AI legislation, Bill C-27, which was never signed into law.
Solomon said the legislation is “not gone,” but that the government will “have to re-examine it” to determine the best course of action. This doesn’t mean there will be no regulation, he said, but it must be taken in steps, starting with privacy and data concerns.
“What we won’t do is go into a little black box, do a consultation with 5,000 people, study best practices around the world, come up with the Canadian regulatory solution, and go it alone,” Solomon said, calling it a “waste of time.”
The federal government regularly invites input from the public and specific stakeholders during the legislative process. In the case of issues that affect Indigenous treaty and land rights, this consultation is a legal obligation. According to an analysis of public records by Andrew Clement, a professor emeritus of computer science at the University of Toronto, the Trudeau government conducted consultations on the since-stalled Bill C-27 with 216 businesses and industry groups (including giants like Cohere and OpenAI), 28 academia organizations, and nine civil society groups. This led to widespread critique that the consultations were skewed toward business interests.
To Solomon, technical ingenuity (AI innovation) and social ingenuity (laws and regulations) must go hand in hand, but “the balance is incredibly tricky,” he said. He added that if laws and regulations constrain innovation, then Canada could face a “terrible productivity loss.”
Solomon claimed that AI adoption across the Canadian economy could boost the country’s gross domestic product by up to eight percent. A recent Microsoft Canada and Accenture study noted a similar boost that generative AI could have on labour productivity by 2030. However, a study of 7,000 workplaces by the National Bureau of Economic Research found limited productivity gains from AI chatbot use.
The four priorities for Solomon’s new ministry are as follows: scaling up Canada’s AI industry, driving AI adoption, ensuring that Canadians trust the technology, and ensuring AI sovereignty in Canada.
Beyond getting large businesses to adopt AI, Solomon said Canada should encourage small and medium-sized businesses to adopt the technology as well, through policy levers such as tax credits and flow-through shares.
At the international tech conference VivaTech in Paris today, Solomon said in conversation with Julien Billot, the CEO of Scale AI, Canada’s federally funded AI supercluster, that he believes Canada and Europe need to work together on AI to avoid getting left behind.
“My fear is that there are other states that will leapfrog ahead of us on a competitive advantage,” Solomon said. “My biggest fear is that everyone tries to do something alone.”
However, Solomon added that he fears “unconstrained development without any ethics and values.”
Benjamin Bergen, president of tech lobby organization the Council of Canadian Innovators, welcomed Solomon’s approach but cautioned that promoting AI adoption is not enough.
“While there are productivity improvements to adopting artificial intelligence, there’s even more economic benefits in making sure that Canadian companies are leading vendors of AI tools and systems,” Bergen told BetaKit. “We need to ensure that Canadians own this technology.”
Solomon said at Canada 2020 that the government plans to execute on his ministry’s priorities through “billions of dollars in investment.” Some of this is already in motion through the $2-billion Canada Sovereign AI Compute Strategy put forward by the previous administration, which has committed up to $240 million toward an AI data centre for Toronto-based AI startup Cohere.
Solomon also discussed the possibility of boosting AI adoption within government. One example was cutting down on hold wait times for Canadians calling government agencies such as the Canada Revenue Agency. He cited Canadian AI startup Ada’s agentic AI customer service software as an example of how the government could cut down on labour and wait times.
“This shift from regulation to adoption is exactly what Canada’s AI ecosystem needed,” Adithya Rao, investment director at SCALE AI, wrote in a LinkedIn post in response to Solomon’s comments. “Solomon’s focus on government procurement as a validation mechanism is particularly smart.”
Ada CEO Mike Murchison wrote in a memo for pro-business, entrepreneurship-focused online policy platform Build Canada that risk aversion by both government and business is causing Canada to lag behind. Murchison argued for what he called increased AI literacy and widespread adoption. Build Canada memos are drafted and published with assistance from AI tools.
Murchison added that Canada should reintroduce Bill C-27, with provisions to treat AI as a public good and promote AI access alongside risk regulation. The memo recommends an advisory committee on AI adoption and more stringent transparency requirements for government AI systems.
Defence spending, Solomon said at Canada 2020, is another way the government plans to put its money towards supporting Canadian tech.
“In the US, their military is their form of industrial policy,” Solomon said. “Under the auspices of national security, they essentially support tech companies everywhere.”
He cited Carney’s recent commitment to meet NATO’s target of two-percent of GDP spent on defence procurement this year, and said that building up industrial defence policy in Canada will involve “working closely” with Canadian companies and the Department of National Defence.
Feature image courtesy VivaTech via YouTube.