- Canada’s Artificial Intelligence and Data Act (AIDA) died on the order paper in January 2025 when Parliament was prorogued following Prime Minister Justin Trudeau’s resignation.
- The government pivoted to a voluntary code of conduct, now signed by 46 organizations, and earmarked CA$925 million over five years for sovereign AI infrastructure in Budget 2025.
- Minister of Artificial Intelligence and Digital Innovation Evan Solomon has announced plans to table new AI legislation that will not replicate the failed AIDA approach.
- Canada remains without a federal AI statute, relying on existing privacy and consumer protection laws alongside voluntary industry commitments.
What Happened
On January 6, 2025, Prime Minister Justin Trudeau’s resignation triggered the prorogation of Parliament, killing Bill C-27 and its embedded Artificial Intelligence and Data Act (AIDA). The bill had been working its way through Parliament since June 2022, facing sustained criticism from industry groups, civil society organizations, and legal scholars over its scope, enforcement mechanisms, and heavy reliance on future regulations to define key terms.
In the absence of legislation, the federal government has pursued a two-track strategy: maintaining a voluntary code of conduct for responsible AI development and directing large-scale public investment toward AI infrastructure and institutional capacity building.
Why It Matters
AIDA’s failure left Canada as one of the few G7 nations without a dedicated AI governance framework at a time when global regulatory activity is accelerating. The EU AI Act is in force, South Korea’s AI Basic Act took effect in January 2026, and Japan passed its AI Promotion Act in May 2025. Canada’s regulatory gap has raised concerns among trading partners, civil society groups, and the Canadian AI research community about accountability for AI systems developed and deployed in the country.
The Schwartz Reisman Institute at the University of Toronto identified several structural reasons for AIDA’s failure: the bill delegated too many critical definitions to future regulations, lacked clarity on how enforcement would actually work, and struggled to balance innovation incentives with meaningful safety requirements.
As the McInnes Cooper law firm noted, the Act’s reliance on “regulations that had not yet been drafted” meant that “businesses and other stakeholders had limited ability to assess what compliance would actually require.”
Technical Details
The Voluntary Code of Conduct on the Responsible Development and Management of Advanced Generative AI Systems, originally launched in September 2023, now has 46 signatories including startups, scale-ups, world-leading research organizations, and Fortune 500 companies. The Code covers six areas — accountability, safety, fairness, transparency, human oversight, and robustness — but carries no enforcement mechanism or legal consequence for non-compliance.
Budget 2025 committed CA$925 million over five years to sovereign public AI infrastructure, including expanded compute capacity for Canadian researchers and companies that reduces dependence on foreign cloud providers. The budget also created an Office of Digital Transformation to lead AI adoption across federal government departments and agencies.
Minister of Artificial Intelligence and Digital Innovation Evan Solomon, appointed in May 2025 following the April federal election, has stated his intention to propose new AI legislation. Solomon, a former journalist and broadcaster elected as MP for Toronto Centre, has emphasized the new bill will not replicate AIDA but will instead be “its own regulatory initiative,” signaling a fundamentally different approach to AI governance than Canada’s first attempt.
Who’s Affected
AI developers and deployers in Canada currently operate under a patchwork of existing federal and provincial laws — the Personal Information Protection and Electronic Documents Act (PIPEDA), the Canadian Human Rights Act, provincial privacy statutes, and sector-specific regulations in finance and healthcare. Without AIDA or its successor, there are no AI-specific transparency requirements, mandatory risk assessments, or deployment notification obligations at the federal level.
International AI companies serving the Canadian market face less regulatory friction than in the EU or South Korea, but also less certainty about future requirements. The 46 signatories to the voluntary code have accepted reputational accountability but no legal obligations beyond what existing laws already impose.
What’s Next
Solomon is expected to table new AI legislation in 2026, though no specific timeline has been confirmed publicly. Provincial governments, particularly Quebec and Ontario, may move ahead with their own AI regulatory frameworks if federal action continues to stall. Canada’s participation in international AI governance forums, including the G7 Hiroshima AI Process and bilateral discussions with the EU on regulatory interoperability, continues to shape the country’s policy direction, but domestic legislation remains the critical missing piece.
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