A new report on the artificial intelligence (AI) sector warns that while Canada is well-positioned with personnel and leading research in the area, Canadian companies face significant barriers as they scale up.
The Council of Canadian Innovators (CCI) contends that a lack of Canadian companies scaling up is leading to many of the benefits created from public investment in research and training in AI flowing to firms outside of Canada.
The significant challenge in Canada will be constructing a policy and regulatory framework that helps domestic companies grow into global leaders.
For example, nearly 75 percent 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 CCI 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.
Established in 2015, the CCI 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.
The CCI currently values AI opportunities at around $200 billion dollars and by 2030 will likely expand to around $2 trillion.
The significant challenge in Canada will be constructing a policy and regulatory framework that encourages the rapid growth of domestic companies into global leaders.
However, 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.
According to the CCI, Canada’s AI framework should convey trust and certainty for the public. Products and services need to be seen as safe and reliable through a clear statement of user and citizen rights when it comes to automated decision systems.
The CCI calls for the creation of an independent Parliamentary Technology and Science Officer to advise Parliament and Canadians about technological AI issues. Specifically, the officer would address issues related to the Artificial Intelligence and Data Act (AIDA).
AIDA is part of the broader Bill C-27 introduced in 2022, the Digital Charter Implementation Act. that if passed will regulate the design, development and use of AI systems in the private sector. AIDA is meant to protect Canadians by ensuring high-impact AI systems are developed and deployed in a way that identifies, assesses and mitigates the risks of harm and bias.
Bill C-27 has already received broad support from a number of Canadian startups and companies eager to adopt the new technology. An open letter in support of Bill C-27 comes just as a survey in April showed that adoption of the technology is growing among Canadian companies. More than one third (37 percent) are now using AI.
As market hype grows over the emerging technology, sizable Canadian tech firms such as Unbounce, Hootsuite, Alayacare and Ada have all rolled out new AI innovations in the past year.
In terms of the officer, the CCI proposes that individual would complement the planned AIDA Commissioner, and would 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.
An AI and data commissioner will support the minister of innovation, science, and industry in ensuring companies comply with the act. The commissioner will be responsible for monitoring company compliance, ordering third-party audits, and sharing information with other regulators and enforcers as appropriate.
Canada already collaborates on AI standards to some extent with a number of countries. Canada, France, and 13 other countries launched an international AI partnership to guide policy development and “responsible adoption” in 2020.
The federal government also has the Pan-Canadian Artificial Intelligence Strategy for which it committed an additional $443.8 million over 10 years in Budget 2021. Ahead of the 2022 budget, Trudeau had laid out an extensive list of priorities for the innovation sector, including tasking Champagne with launching or expanding national strategy on AI, among other things.
Innovators and investors will be looking for clear and consistent rules, while recognizing that one size cannot fit all use cases, companies or end users. The federal government will need to ensure that AI regulations are sensitive to a range of uses and potential impacts while possibly incorporating a tiered structure with corresponding rules and responsibilities for specific applications of AI.
The rules and standards for innovators will need to be clear and easy to understand, and for novel use cases it will be necessary to allow for regulatory sandboxes or pilots.
It will be necessary to 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, the CCI proposes.
The CCI advocates moving up the schedule for regulatory development and implementation if AIDA passes (12 months after Royal Assent). Taking into account citizen and user rights, CCI recommends allowing for and prioritizing the development of standards for AI governance where such an approach would represent an improvement in speed over regulation.
The CCI also calls for the creation or adoption of governance measures around higher-impact AI technologies, and providing for an enforcement on-ramp that is sensitive to industry learning curves.
Finally, CCI recommends getting ready for export by ensuring that Canadian companies have the 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.
The CCI said Canada needs to ensure that its regulatory framework is clear and useful out of the box to inspire other countries to use it.