Canada’s first attempt at an Artificial Intelligence and Data Act (AIDA) has taken its final bow. Bill C-27, which housed the AIDA, died in Parliament in January 2025 without ever becoming law. If you were waiting for a single, clear law to govern AI in this country, the curtain has already fallen.
The good news is that Canada is not without AI rules. The challenge is that they are spread across multiple frameworks, and figuring out which ones apply to you takes some working through.
What happened to the Artificial Intelligence and Data Act?
The Artificial Intelligence and Data Act (AIDA) was introduced in June 2022 as Part 3 of Bill C-27, the Digital Charter Implementation Act, 2022. It was packaged alongside two laws:
- the Consumer Privacy Protection Act
- the Personal Information and Data Protection Tribunal Act
AIDA, as the act became known, targeted “high-impact” AI systems used in the course of international and interprovincial trade. The government also published an AIDA companion document to explain how regulations would develop after the bill passed.
Bill C-27 passed second reading in April 2023 and moved to the House of Commons Standing Committee on Industry and Technology for detailed study. When Prime Minister Justin Trudeau prorogued Parliament on January 6, 2025, the bill died on the order paper. Thus, the Artificial Intelligence and Data Act was never passed.
Proposed framework under AIDA
Under Bill C-27 or the AIDA, businesses that are designing, developing, or deploying high-impact AI systems would have been required to:
- assess and address risks of harm and biased output
- keep records of how their governance measures worked
- publish plain-language descriptions of how their systems operated
- notify the federal government if a system caused, or was likely to cause, material harm
Had AIDA been signed into law, its proposed penalties would have included:
- fines of up to the greater of $10 million or 3 percent of global revenue for regulatory offences
- fines of up to the greater of $25 million or 5 percent of global revenue for the most serious violations
- criminal liability for reckless or fraudulent AI conduct
This 2022 discusses the developments in the regulation of AI in Canada and the US at that time, which included the AIDA:
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Why did the bill on Artificial Intelligence and Data Act fail?
The Artificial Intelligence and Data Act attracted criticism from two very different directions, and that, arguably, is what made it so difficult to save.
Lexpert’s July 2025 coverage of the health and life sciences sector captured the divide plainly. Companies argued Bill C-27 would “stifle innovation,” while civil rights groups said the act was vague and its enforcement measures lacked teeth. In practice, both sides had a point.
On AIDA being too vague
The main contention on the AIDA was that the bill was too vague. Its text was left most of its critical definitions to future regulations that were never drafted. What qualified as a “high-impact” AI system, how penalties would be set, and how audits would be conducted were all to be decided later, by regulation.
For businesses, that meant planning around obligations that did not yet exist. For those seeking protection from AI-related harms, it meant safeguards that existed only on paper.
On the regulator’s independence
Second contention was that the proposed watchdog had no independence. The proposed AI and Data Commissioner was to operate from within the same ministry responsible for supporting Canada’s AI industry. There was no security of tenure, no independent mandate, and no clear separation between the role of promoter and the role of regulator.
What AI laws apply in Canada today?
With no single AI statute in force, Canadians are covered by a patchwork of existing laws, regulatory guidance, and voluntary commitments.
The Personal Information Protection and Electronic Documents Act (PIPEDA) governs most commercial AI use involving personal data at the federal level. Working as the Canada’s data privacy law, the PIPEDA primarily regulates the collection, use, or disclosure of personal information.
Québec’s Law 25 sets the tightest AI-related standard in Canada right now. Since September 2023, organisations handling personal information about Québec residents must:
- notify individuals before a purely automated decision is made about them
- explain the factors behind that decision, on request
- provide a pathway to human review
Penalties reach up to $25 million or 4 percent of worldwide turnover, with no small-business exemption.
Common law governing AI systems
Courts are also beginning to draw the lines on AI systems. In Moffatt v. Air Canada, 2024 BCCRT 149, the BC Civil Resolution Tribunal found Air Canada liable for a chatbot that gave incorrect information about bereavement fares, awarding the customer $812.02 in damages.
What lawyers advise on AI use
Roland Hung, a partner in the Corporate/Commercial, Technology and Privacy and Data Management Groups at Torkin Manes LLP in Toronto, writes in his Lexpert piece that “liability may fall on the deployer of the technology” when an AI technology causes harm.
Canadian businesses tend to have three immediate questions when they start mapping their AI exposure: who needs to consent before data is used for AI training, who bears liability when AI outputs cause harm, and whether AIDA’s collapse changes anything in practice. Technology lawyers from Fasken Martineau DuMoulin LLP tackle all three in Lexpert’s coverage of common AI adoption questions for businesses.
Here’s how Canadian data privacy laws can still be used to regulate AI, such as when OpenAI broke Canadian privacy laws in training ChatGPT:
Head over to our list of the best technology transaction lawyers in Canada as ranked by Lexpert for the top-ranking lawyers and firms in this practice area.
What are the AI laws that are coming to Canada?
In May 2025, Canada appointed Evan Solomon as its first-ever minister of artificial intelligence and digital innovation. Solomon has signalled that new legislation is on the way, though it will not be a revival of the Artificial Intelligence and Data Act.
Two bills were tabled in June 2026:
- Bill C-34, the Safe Social Media Act: This bill was tabled on June 10, 2026, and targets online safety. It covers social media platforms and AI chatbot services and would create a new Digital Safety Commission of Canada. Fines could reach 5 percent of gross global revenue or $20 million, whichever is greater.
- Bill C-36, the Protecting Privacy and Consumer Data Act: Tabled on June 15, 2026, this bill has broader implications for most Canadians. It would replace PIPEDA, and add explicit rules around automated decisions, requiring:
- disclosure when AI makes significant decisions about an individual,
- an explanation of the reasoning, on request, and
- a clear pathway to human review of automated outcomes
Both bills were at second reading as of October 2026 and are not yet law.
Provincial laws on AI
Provinces are not waiting for federal legislation. Ontario’s Bill 194, governing AI use by public institutions, received Royal Assent in November 2024. Manitoba’s Public Sector Artificial Intelligence and Cybersecurity Governance Act received Royal Assent in June 2026.
For a ground-level look at how AI issues are surfacing sector by sector, check out his Lexpert’s article on AI-powered medical scribes, which shows the legal questions already being raised in clinical settings.
Artificial Intelligence and Data Act: is there a second act?
Canada’s Artificial Intelligence and Data Act may have had its final curtain, but the regulatory stage is far from empty. New bills are making their way through Parliament, existing laws are being enforced more aggressively than before, and the provinces are not waiting for Ottawa to catch up. Much like the opera it shares a name with, AIDA ended dramatically, but the story of AI law in Canada is still very much in progress.
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