Artificial Intelligence Regulation

Issue at a Glance

Artificial intelligence (AI) is an increasingly important tool leveraged to support several aspects of marketing, from data analytics to ad personalization. At the same time, AI systems have the potential to pose risks to individuals and society (e.g., if they are used in bad faith or poorly designed/trained). Best practices for the ethical development and use of AI have been widely developed in recent years, and some countries have begun to legislate in this area.

The federal government’s Bill C-27, tabled in June 2022, proposes to create Canada’s first ever attempt at AI regulation, the Artificial Intelligence and Data Act (AIDA). The bill intends to promote the responsible use of AI by ensuring high-impact AI systems are developed in a way that mitigates the risk of harm and bias. It would prohibit conduct that could result in material harm to individuals or their interests, including when AI systems unlawfully obtain data or are used in a reckless way. AIDA would create an AI and Data Commissioner to monitor compliance with the Act and issue audits to non-compliant organizations, with penalties of up to 5% of global revenue, or $25 million, for serious violations.

In March 2022, the government released a companion document with more detail on their proposed approach. AIDA, which is currently being debated and studied in the House of Commons as part of Bill C-27, has been split away from the rest of Bill C-27 for voting purposes, so its trajectory is uncertain.

Once AIDA passes, the government intends to conduct a broad and inclusive consultation to inform its implementation and regulations. This is expected to include:

• The types of systems that should be considered as high-impact;
• The types of standards and certifications that should be considered in ensuring that AI systems meet the expectations of Canadians;
• Priorities in the development and enforcement of regulations, including with regard to new financial penalties;
• The work of the AI and Data Commissioner; and
• The establishment of a new AI advisory committee.

This would provide a period of at least two years after the bill receives Royal Assent before companies are faced with enforcement.

The CMA will keep members informed of relevant updates. In the meantime, the CMA’s AI Regulation Working Group, consisting of AI and data trust experts, has been set up to inform the CMA’s feedback on the bill from a marketing perspective.