OTTAWA – At the Paris AI Action Summit in February, world leaders, including then-Prime Minister Justin Trudeau, witnessed a significant moment when U.S. Vice President JD Vance criticized AI regulation. His address, projected on a large screen at the historic Grand Palais, heralded a shift in global approaches to AI governance.
This shift resonated in Canada shortly thereafter, when Mark Carney succeeded Trudeau and signaled a pivot in the nation’s AI policies. Under Trudeau’s leadership, the government, with then-Industry Minister François-Philippe Champagne, had positioned Canada to potentially be the first country to enact AI regulatory legislation. However, Carney’s newly appointed Artificial Intelligence Minister Evan Solomon emphasized a more cautious approach. He stated that Canada would not “over-index” on regulation, suggesting that if the U.S. and China were not pursuing AI governance, Canada would refrain from taking unilateral action.
In less than a year, the federal government’s stance transitioned from constraining AI development to embracing the economic potential of the technology, particularly within the public sector. As 2025 drew to a close, Solomon announced new cooperation agreements on AI with Germany, the U.K., and the European Union during the G7 industry, digital and technology ministers’ meeting in Montreal. He maintained that Canada’s strategic approach had not altered, despite the memorandums signed with pro-regulation Europe.
“Our position is exactly where we have been,” Solomon told The Canadian Press, reiterating his belief in striking a balance between the EU’s perceived over-regulation and the more laissez-faire attitudes of the U.S. and China. Henna Virkkunen, executive vice-president of the European Commission, echoed the need for a human-centric approach in AI development that aligns with democratic values.
Despite the EU’s criticism of overregulation, Virkkunen affirmed that they aim to implement their AI Act in a manner that fosters innovation while minimizing bureaucratic hurdles. Both Solomon and Virkkunen acknowledged that U.S. opposition to AI regulation is complex, pointing to ongoing regulatory efforts at the state level. Just days after their dialogue, however, U.S. President Donald Trump signed an executive order blocking states from regulating AI.
As Canada navigates its relationship with U.S. and European AI policies, Virkkunen noted the importance of Canada’s forthcoming decisions on its regulatory framework. Solomon indicated his intention to introduce a new privacy bill when the House of Commons reconvenes after the holiday break. He plans to revive privacy components of Bill C-27, which sought to update Canada’s private sector privacy laws and impose new requirements for “high-impact” AI systems, but with a focus that intentionally excludes comprehensive AI regulation.
“This is not going to be the exact same piece of legislation as C-27,” Solomon clarified, emphasizing that the bill would include provisions to protect children and address issues related to deepfakes. He has hinted at potential age restrictions for chatbot access and the right for individuals to delete deepfake content, although he has not provided extensive details.
Heidi Tworek, a history and public policy professor at the University of British Columbia, expressed skepticism about the government’s focus on regulatory measures, citing the current political climate. “Passing regulation is going to be more challenging… this government doesn’t seem to be as focused on doing that because it’s much more concerned about the sort of innovation piece,” she said.
Under Carney’s leadership, the government has prioritized AI as a driver for economic growth, emphasizing its commercial applications. This strategy is reflected in the composition of Solomon’s advisory task force, which has faced criticism for being heavily oriented toward industry perspectives. Carney’s vision includes fostering “sovereign AI,” aimed at developing and controlling AI technologies within Canada’s borders.
Paul Samson, president of the Centre for International Governance Innovation, noted that Carney seeks AI-driven productivity growth as a solution to challenging economic conditions. “He needs economic growth and productivity growth, and AI is an area that can deliver some of that,” said Samson.
Despite the urgency expressed by experts, Carney has yet to allocate substantial public funds toward his AI vision. Trudeau’s 2024 budget designated $2.4 billion for AI development, primarily to enhance computational access and infrastructure. In Carney’s first budget introduced in fall 2025, only $925.6 million was allocated for sovereign AI infrastructure, with much of it sourced from previously earmarked funds. While the government cites the aim of establishing a “sovereign cloud,” none of the announced projects have focused on its realization.
Looking forward, it remains uncertain how Carney’s funding strategy will evolve with the unveiling of Solomon’s updated national AI strategy in the new year. Samson noted a desire from various countries for Canada to play a more proactive role in international AI governance, particularly regarding security concerns such as the intersection of AI and nuclear capabilities. “Canada’s a little bit shy to stick its head out there too much because of the Trump factor and the U.S. factor of big tech,” he said, adding that there exists a global expectation for Canada to facilitate crucial international conversations on AI.
See also
EU AI Act Faces 2025 Deadline as Companies Adapt to New Regulatory Landscape
Trump’s AI Executive Order Revamps Policy, Prioritizing Deregulation Over Oversight
Top European Law Firms Deploy Generative AI for First Drafts, Enhancing Efficiency and Quality
Trump Signs Executive Order to Preempt State AI Regulations, Promoting National Framework
