AI Policy and Regulations in Canada (2020-2025): A Comprehensive Overview

Canada stands at the forefront of global AI governance, combining a long-standing legacy in research with evolving regulatory frameworks and major investments in compute infrastructure. This report provides an in-depth look at the country’s AI ecosystem from 2020 to 2025, covering legislation, strategy, intellectual property, investment, and legal decisions.

Recent Legal Regulations (2020-2025)

Canada's regulatory journey reached a milestone with Bill C-27, which includes the proposed Artificial Intelligence and Data Act (AIDA). AIDA introduces a risk-based regulatory framework for “high-impact” AI systems, setting requirements for oversight, risk mitigation, and accountability. It also proposes criminal sanctions for misuse of AI, including the use of illegally obtained personal data in model training.

Although political transitions in 2025 have slowed its passage, several provincial frameworks have stepped in. Quebec’s Bill 64, Ontario’s Trustworthy AI Framework, and Alberta’s Amii-led partnerships demonstrate regional leadership in responsible AI deployment.

Ethical AI also has strong roots in Canada, with the Montreal Declaration gaining over 2,500 signatories and continued input from the Advisory Council on Artificial Intelligence guiding federal policy updates.

Government AI Action Plan

Canada’s public sector AI strategy, AI Strategy for the Federal Public Service (2025-2027), lays out a framework for ethical and effective use of AI across government. Its goals focus on:

• Centralizing AI expertise via a new Centre of Expertise

• Investing in cloud infrastructure and approved models

• Launching AI ethics review boards

• Creating public disclosure and accountability mechanisms

• Developing an evergreen AI talent pipeline

Pilot projects—like the Translation Bureau’s self-serve language hub—are being used to identify best practices for AI adoption in federal services.

Intellectual Property & Data Usage

Canada is actively reassessing its copyright and privacy laws to address generative AI’s impact. A central debate is around text and data mining (TDM): should rights holders be compensated when their content is used to train AI?

While Canada’s Copyright Act does not clearly address TDM, fair dealing provisions may apply in limited contexts. Meanwhile, a 2023 consultation titled “Copyright in the Age of Generative AI” explored how to protect creators while enabling innovation.

On privacy, Canada’s watchdog launched an investigation into how platforms like X (formerly Twitter) use personal data for AI training—underscoring the country’s proactive stance on data governance in AI development.

AI Outputs & IP Protections

Canada became a global outlier in 2021 when its Intellectual Property Office (CIPO) registered copyright for the AI-generated artwork “Suryast.” The case, now under Federal Court review, has sparked nationwide debate over whether AI can hold authorship rights.

In 2025, CIPO clarified its stance: AI-assisted works may be protected if they are significantly shaped by human creative choices. However, AI cannot be listed as an inventor under current Canadian patent law—a position affirmed by the Federal Court of Appeal.

The government is now considering three legislative paths: affirming human-only authorship, attributing authorship to AI system arrangers, or introducing a new rights category for AI-generated works.

AI Investments & Computing Power

To address its compute shortfall, Canada has announced over C$2.4 billion in AI-related infrastructure and innovation funding. This includes:

• $700 million for domestic AI data centers

• $705 million for a national supercomputing system

• $300 million to help SMEs access AI compute resources

• $240 million in support of Cohere’s large language model infrastructure

Despite these efforts, Canada still trails G7 peers in public compute power. Reports show the U.S. has 90 times more raw compute, prompting calls for accelerated investment.

On the plus side, clean energy in Quebec and British Columbia gives Canada an edge in sustainable AI infrastructure—a critical asset as compute-intensive applications grow.

Judicial Decisions on AI

Canadian courts have begun setting legal precedents for AI-related accountability. Key rulings include:

• A British Columbia court penalizing a lawyer for submitting ChatGPT-generated fake case citations

• A tribunal holding Air Canada liable for chatbot misinformation

• Lawsuits involving CanLII v. Caseway AI and media outlets vs. OpenAI, focusing on unauthorized use of legal and journalistic content for AI training

The Canadian Judicial Council also issued official AI use guidelines in 2024, requiring human oversight in all decisions and banning automated judgment-making without public consultation.

Conclusion

Between 2020 and 2025, Canada has advanced its AI agenda through layered legislation, public strategy, and global infrastructure ambitions. While federal regulations are still being finalized, regional efforts, ethical leadership, and strong investments in talent and technology give Canada a robust AI foundation.

With growing legal precedent and stakeholder engagement, Canada is navigating the challenges of generative AI while aiming to maintain its leadership in trustworthy innovation.

Explore the full report for detailed legal analysis, policy strategy, and investment trends: AI Policy and Regulations of Canada - A Comprehensive Report.