Transformative AI technologies have enormous potential for Canada. Crucially, AI presents the possibility of unlocking rapid productivity gains — an essential ingredient to future competitiveness and economic growth. To date, Canada has rightfully earned a globally recognized place among the leading AI-innovating countries. We welcome the Government of Canada’s ambition to continue driving this leadership, while also cautioning against unintendedly discouraging new discoveries and new investment into Canadian AI.
Last week’s announcement by Minister François-Philippe Champagne on the introduction of the Voluntary Code of Conduct on the Responsible Development and Management of Advanced Generative AI Systems is a welcome development. The Code of Conduct will promote ethical industry practices and safeguard Canadians by ensuring AI technologies are responsibly applied, doing so without undermining innovation or economic opportunity. Safe and responsible applications of AI, and a shared commitment to stewardship is a priority for the industry.
Additionally, the government’s proposed amendments to the Artificial Intelligence and Data Act which seek to clarify the scope of high-impact systems, would equally assist in reducing uncertainty for innovators and the investors who back their ground-breaking discoveries.
Nonetheless, in a fast-evolving landscape, the Canadian Venture Capital and Private Equity Association is concerned over the negative impacts that a rapidly emerging regulatory framework could pose on: 1) new and existing Canadian innovators who may choose to go elsewhere when faced with complex or overly restrictive rules; 2) the subsequent chill on investment that could follow as investors weigh risks and uncertainty; and 3) stifling Canada’s global competitiveness and interoperability if regulations develop asynchronously with peer innovating countries, adding substantial compliance costs.
In view of these, the CVCA recommends that the government of Canada considers the following, as the proposed Act integrates new amendments:
- Carve-outs for Start-Ups and Experimental Systems: to continue enabling Canada’s thriving AI innovation ecosystem, it is crucial that the definition of regulated systems specifically allows early-stage AI developers to innovate and experiment in a safe and predictable environment.
- Importance of a global playing field: moving regulations in lockstep with peer country innovators will ensure a sustained Canadian advantage on a global stage. Alignment and timing are crucially important to ensure greater predictability of investments in AI.
- Encourage rather than penalize AI innovation: tone is, and will be increasingly important, as guidelines emerge. The preamble in the legislation should emphasize the enormous economic and societal benefits of AI, not just the harms, guiding subsequent regulations in a way that encourages innovation and considers the budding downstream industries in the ecosystem.
We encourage the government to fully consider the impacts of AIDA on AI start-ups and investors and ask for greater clarity on the direction of downstream regulations that will eventually make or break this crucially important industry. Likewise, we hope policymakers and legislators will strive for balance, promoting trust by safeguarding the public while at the same time encouraging innovation, and acknowledging the transformative potential of AI and sustained investment flows.