Bill C-27

Digital Charter Implementation Act, 2022

An Act to enact the Consumer Privacy Protection Act, the Personal Information and Data Protection Tribunal Act and the Artificial Intelligence and Data Act and to make consequential and related amendments to other Acts

Part 1 enacts the Consumer Privacy Protection Act to govern the protection of personal information of individuals while taking into account the need of organizations to collect, use or disclose personal information in the course of commercial activities. In consequence, it repeals Part 1 of the Personal Information Protection and Electronic Documents Act and changes the short title of that Act to the Electronic Documents Act . It also makes consequential and related amendments to other Acts.
Part 2 enacts the Personal Information and Data Protection Tribunal Act , which establishes an administrative tribunal to hear appeals of certain decisions made by the Privacy Commissioner under the Consumer Privacy Protection Act and to impose penalties for the contravention of certain provisions of that Act. It also makes a related amendment to the Administrative Tribunals Support Service of Canada Act .
Part 3 enacts the Artificial Intelligence and Data Act to regulate international and interprovincial trade and commerce in artificial intelligence systems by requiring that certain persons adopt measures to mitigate risks of harm and biased output related to high-impact artificial intelligence systems. That Act provides for public reporting and authorizes the Minister to order the production of records related to artificial intelligence systems. That Act also establishes prohibitions related to the possession or use of illegally obtained personal information for the purpose of designing, developing, using or making available for use an artificial intelligence system and to the making available for use of an artificial intelligence system if its use causes serious harm to individuals.

[Ryan Turnbull, Liberal, Whitby, ON]

I want to make a few points on the record about this. Hopefully, we can deal with this fairly quickly. There are many things to say about this, but there are some factual inaccuracies in the actual motion that concern me. Mr. Arya made some really good comments about this.

The green industrial revolution is not stopping because the Conservatives deny that climate change is a reality or deny that there's any need for that industrial transition. It's kind of shocking to see how they can't see the global trends that are going on around the world and that Canada is actually doing really well in terms of building out and attracting investment.

Canada is competing in the North American market for the EV battery supply chain. The fact is that we're number one in the world when it comes to.... BloombergNEF rates Canada as number one for the EV supply chain, which is fantastic. We've seen billions of dollars of investment that would not have come into our market.

We also see this as a really large transition that's global. Companies are going to have some challenges along the way. They're going to adjust their schedules. Some of that is to be expected.

The one factual inaccuracy that really strikes me here is that this motion.... I'm not sure who wrote it. I know Mr. Perkins moved it, but I don't know who wrote it. Maybe he didn't have a chance to read up on this.

The new numbers on ZEV sales in Canada show that there's a 30% increase, quarter over quarter, as of the last quarter. There were 65,733 new EVs registered in Canada in quarter two of 2024. Sales saw a rise and jump to 12.9% of market share, with Manitoba and Quebec actually leading the way. There was a 30% increase, quarter over quarter. That's significant. We want that to continue to rise. I think Canadians, rightfully, are showing interest in wanting to drive more EVs.

Globally, there are other trends that we could cite. There's an acknowledgement that this movement to electric vehicles is happening, whether the Conservatives like it or not. It's going to happen.

The question is, will Canada be competitive in that space? Will Canada actually be able to leverage all of its strengths and natural resources to truly be a global player and to be a player in the North American market, in the integrated supply chains that we have?

Obviously, we know that the United States and its Inflation Reduction Act changed the conditions in terms of Canada's being competitive. The things that the Canadian government has done have made us competitive and have drawn in investment.

The other factual inaccuracy is very small, but “Unicore's” is not “Unicore's”, it's “Umicore's”.

The other thing that we've heard, very quickly, is that Northvolt has said publicly that its Sweden restructuring doesn't impact the work here in Canada. Its production schedule and construction schedule haven't been impacted. We also know that no federal funding—the minister has been clear about this—has actually gone to Northvolt yet.

The structure of these deals is done in such a way that a lot of the subsidy portions are related to production. It's related to the sales of EVs. If these companies don't follow through and don't sell EVs, they don't get the subsidies that were promised. If the Inflation Reduction Act doesn't continue or somehow is repealed in the United States, those production subsidies are no longer in place. This makes Canada competitive with the United States. It makes Canada competitive globally. It really is the reason we've seen this amount of massive investment come in.

All of that is to say that the motion is flawed in multiple ways. In terms of what our committee has said, we all agreed on a schedule, which includes hearing from the minister, having four meetings on the credit card study, which Mr. Masse put forward and we all agreed to, and then getting back to Bill C-27.

If we have other considerations for studies, they should be after Bill C-27. This is just not the right time for this particular study.

I also worry about putting the industry on trial here. It needs flexibility in order to manage its operations and make these very large investments. If it needs to slightly reschedule things, I think that's perfectly reasonable.

I don't agree with this motion. I think it's deeply flawed in terms of how it's been written.

I think there's a great story to tell about the auto industry in Canada and the supply chains that we're building here. The frame of this motion is not one I can support. I think we should move past this and get on with our committee work.

Thank you.

[The Chair, Liberal, Joël Lightbound]

I'll give it a few more minutes to see how this motion goes, because I got scared by Mr. Perkins with the intermission on Bill C-27. We'll see how it goes, but we'll liberate the witnesses earlier if need be.

[The Chair, Liberal, Joël Lightbound]

Thank you, Mr. Perkins.

You have moved your motion. Thank you, too, for the short intermission on Bill C-27. You broke the ice this session, so it's appreciated.

There's a motion on the table.

I have MP Arya, Brian Masse and Ryan Turnbull.

[The Chair, Liberal, Joël Lightbound]

Are there any other comments on the motion as amended?

Seeing none, I would ask the clerk to put it to a vote.

(Motion as amended agreed to: yeas 6; nays 5 [See Minutes of Proceedings])

Thank you, colleagues.

This would bring us back to Bill C-27.

(On clause 2)

We were at CPC-9.

We had left it at a subamendment by Mr. Perkins on CPC-9, so I'm looking at Mr. Perkins.

[The Chair, Liberal, Joël Lightbound]

Good afternoon, everyone.

It is now 8:18 a.m., and I call this meeting to order.

Welcome to meeting number 136 of the House of Commons Standing Committee on Industry and Technology.

Before we begin, I would ask you to consult the cards on the table for guidelines on the use of microphones and earpieces. These guidelines were put in place to ensure the health and safety of interpreters.

Pursuant to the order of reference of Monday, April 24, 2023, the committee is resuming consideration of Bill C-27, An Act to enact the Consumer Privacy Protection Act, the Personal Information and Data Protection Tribunal Act and the Artificial Intelligence and Data Act and to make consequential and related amendments to other Acts.

I'd like to welcome the witnesses who are here again. They haven't been asked a lot at the last few meetings, and I have little hope that they will be asked anything during today's meeting. Having said that, I'd still like to thank them for being here.

From the Department of Industry, we have Samir Chhabra, director general, marketplace framework policy branch, and Runa Angus, senior director, strategy and innovation policy sector.

As I mentioned, we are continuing our study of Bill C‑27.

Mr. Perkins, you have the floor.

Opposition Motion—Confidence in the Prime Minister and the Government

[Julie Dzerowicz, Liberal, Davenport, ON]

Madam Speaker, to the first hon. member who mentioned me, first of all, I am glad he listened so intently, but he missed the intentional indication that I made at the outset of my speech that I will not be supporting the opposition day motion. I believe we are talking about confidence in this government, and I would say that I have enormous confidence in our government. I am giving the member examples of why I have so much confidence in it and am talking about our AI strategy. I see all of this as very relevant and I am going to continue.

In 2018, the government launched the global innovation cluster program. This program is an ambitious coinvestment with industry that will create collaborations across the country to promote intellectual property creation and commercialization and to ensure that we have a very strong AI business ecosystem that will remain the most vibrant in the world. I believe we have a lot of work to do to create a culture of IP here in Canada, and we need to continue to invest very strongly in IP education and make sure we are patenting and trademarking the unbelievable ideas created here in Canada.

Going back to Canada's AI, to date, Scale AI has announced 151 projects representing a total coinvestment of $610 million. These projects have helped Canadian start-ups launch new products, find partners and grow. Scale AI has supported many Canadian AI successes, such as Routific in B.C. and AlayaCare in Montreal. With many more projects under way, Scale AI will continue to deliver on the promise of advancing AI innovation and driving economic growth across Canada.

As our domestic AI capacity has grown, Canada has leveraged this to shape global norms on AI. With France, we developed and launched the Global AI Partnership on AI in 2020, which is now the premier forum where countries can collaborate and advance the development of AI for good and for all. With allies in the Council of Europe, we developed the first binding treaty to ensure the respect of human rights, the rule of law and democracy in the use of AI. With G7 allies, Canada has developed cutting-edge principles and best practices for responsible AI.

This experience allowed Canada to be an early mover in developing clearer rules for developing and operating AI systems. In 2022, our Minister of Innovation tabled Bill C-27, which included a component entitled the artificial intelligence and data act. If passed, it will make a new law aimed at ensuring proper risk management and transparency for AI systems in order to promote trust. This act would ensure that firms developing or deploying AI systems play critical roles in the lives of Canadians, such as those determining access to credit or employment, and that they meet the minimum standards for transparency, assessment and mitigation of risk. This will ensure that Canadians can trust these systems to operate safely and fairly. The act would also create a new regulator, the artificial intelligence and data commissioner, to oversee compliance, with strong penalties for non-compliance. Canada was one of the first countries in the world to introduce comprehensive AI legislation, and many other countries are now going down the same path and following our leadership.

With the advances of generative AI that took place in 2022 and 2023, our federal government took action to ensure that businesses have the tools they need to adopt advanced AI in a trustworthy and responsible manner. Our government introduced a voluntary code of conduct on advanced generative AI. This code is voluntary, and those who sign on to it commit to set in place concrete measures, which include expectations for AI transparency, safety, accountability and testing. To date, 30 organizations have signed on to the code, and we expect more signatories in the future.

Most recently, our government continued its leadership in this space through budget 2024, which announced an ambitious package of measures totalling $2.4 billion over five years, starting in 2024-25, to secure Canada's AI advantage. This includes $2 billion in funding for a new AI compute access fund and an AI sovereign compute strategy, $200 million to support the adoption of AI across Canada's economy and $100 million to support small and medium-sized enterprises that are seeking to develop and scale their AI product offerings.

I want to finish off by saying that we have laid a strong foundation for future successes to come with the strategy and investment we have made in AI, and with the support we are putting into place for our world-class researchers. What we are doing now is doubling down on investments in compute and adoption and upscaling to make sure Canada remains at the forefront of the AI revolution. We are proud of the work we have done to support Canada's AI ecosystem and proud of the work we are doing to protect Canadians as we enter into the digital and AI-enabled age.

I am thankful for the opportunity to speak to this important motion today on behalf of the residents of my riding of Davenport.

[Ryan Turnbull, Liberal, Whitby, ON]

I feel that we're spinning our wheels here. We had the officials here today. We could have been productive on Bill C-27. It's unfortunate that they're no longer here.

I understand that Mr. Perkins has more motions that he wants to pass. I honestly don't see the need for document production going back to 2018, which is the amendment Mr. Généreux introduced. It's counter to the whole argument the Conservatives were making in the first place.

What is this really about? It just doesn't seem like it's consistent with the arguments that were made at the outset, so it's making me question the motives behind this motion.

[Ryan Turnbull, Liberal, Whitby, ON]

I thought the argument the Conservatives were making for why this is necessary was to move forward and ensure that the organization was accountable and abiding by certain guidance, etc., from the Auditor General's findings. However, Mr. Généreux is now requesting documents going back to 2018. We also have another committee that's looking into this. I don't understand why we would need to do this in this committee.

We just agreed as a committee, and we all came together in consensus, on a motion about what we were going to study. Remember, we did this earlier. We allotted time for the request the Conservatives made in the last meeting, which was to have the minister for two hours. We said, “Let's make that a priority. Let's get the minister here.” Okay.

They want to hear from the minister. In the last meeting, we had a debate. The minister is likely going to need to appear numerous other times, but no, they wanted the minister on his mandate for two hours, so we made that happen. Then we had Mr. Masse bring forward a good-faith motion to study a topic we all said was important. We said, “Let's pause Bill C-27. Let's do some of these other things.” Now, today, right after we finished that, we have another motion to go back to studying SDTC again.

Just a few months ago, the Conservatives called a Standing Order 106(4) meeting in the middle of the summer. Do you remember that? I don't know if you remember that day, but we all came together to have a meeting. It wasn't all that productive, I would say. We still scheduled the first meeting when we came back to have two hours with Annette Verschuren and an hour with the Ethics Commissioner. Again, we showed and signalled we were willing to get to the bottom of this and willing to work together as a committee

Where do we draw the line? We just keep going down this path of more and more. This issue has been studied. There's another committee looking into it. Why do we need to do this here? If public accounts is already doing this work, I don't see why we need to duplicate its efforts—

[Rick Perkins, Conservative, South Shore—St. Margarets, NS]

With that in mind, I move the following motion:

That, in relation to the committee's ongoing study of conflict of interest breaches at Sustainable Development Technology Canada (SDTC), and given that

(i) Minister François-Philippe Champagne has issued a press release stating that “effective immediately, SDTC will also resume funding, under a reinforced contribution agreement with ISED, for eligible projects”; and given that

(ii) the SDTC whistle-blower has told the public accounts committee that “new project approvals have now started” under these agreements;

the committee therefore orders SDTC and ISED to produce copies of each reinforced contribution agreement signed since June 4, 2024, without redactions, in both official languages, within 14 days following the adoption of this motion, in order to monitor the department's compliance with the Auditor General's recommendations.

The reason is that earlier last week, the whistle-blower gave information about the old secretive contribution agreements, which have not been released publicly yet, or ever. They're not available anywhere. Those are the agreements between the industry department and the green slush fund as to what they can and cannot spend money on. Part of the Auditor General's report dealt with the fact that $58 million was spent outside of those contribution agreements. I believe we need access to more than those contribution agreements.

The whistle-blower testified not only that the new, interim, part-time, temporary board overseeing the fund had started to issue money again to companies; he also said the contribution agreements have been amended retroactively to include within the contribution agreement all of the projects that were previously illegal and outside of the contribution agreement. It's taking an eraser and trying to get rid of the old contracts that SDTC and ISED had agreed to and are refusing to release publicly, and we need to see this as soon as possible.

With regard to these agreements and having them out within 14 days, one presumes they're already written, since they've been done. The minister said that funding would start immediately. We need to make sure, since there has been a lot of discussion about repayment and payment of the money. The now-retired deputy minister—there are a lot of people retiring around SDTC—said that some of this money should be repaid, as have other parties at the committee. This morning the NDP were questioning and asking in the public accounts committee discussions why the money wasn't being repaid.

I would say that in order to ensure these companies.... We know that 82% of the board members who received this money were conflicted and that another $58 million was illegally spent outside the contribution agreements. This committee needs to know, and Parliament needs to know, which companies that received that money are getting money once again. In other words, nothing has changed.

We don't know that—it may have changed—but we got rid of the old SDTC process. Apparently, the new SDTC process is not really that much different from the old SDTC process, except for one thing. If you go to the SDTC website, which I did a year and a half ago—which started this whole thing off—the old SDTC was very transparent. Every quarter, they updated an Excel spreadsheet there of every grant that SDTC had given out, with a great deal of detail about when and how and the industry the company was in. Since its founding in 2001, every single transaction was available.

In this open and transparent process we have now under the minister, there's actually no public list available anymore about what SDTC is doing in giving out money. In fact, we've had testimony from the president of the National Research Council, where SDTC eventually will be housed before it gets again punted to another organization after the National Research Council has it. At the National Research Council, they don't actually publish absolutely any of their grants.

They put out a quarterly report that says that they spent so much on this program and so much on that program, but they do not put out a list of where that money goes. The organization was actually disclosing what they were spending the billion-dollar Liberal green slush fund on, so you could do the work and find out which directors were feathering their own beds, as it were, to the tune of $390 million, according to the Auditor General. Now, with the minister's open and transparent process, you can't even do that. You can't even see that on SDTC's website, on the NRC website, on anybody's website. It's a super-secret society. It looks to me like they're just trying to cover up everything that they're doing now.

We're asking for the basics here, which are the contribution agreements that have been altered in order to make bad wrongdoings positive, and also to understand what the new temporary interim board—before they punt it over to NRC—is actually spending money on now. That's the purpose of this motion. We need to continue to get to the bottom. It is one of the reasons I'm concerned about the previous motion we passed, and thank you for allowing the statement of the obvious to be put in, which is that the committee can interrupt deliberations on Bill C-27 if it deems it necessary, because we have to get to the bottom of this billion-dollar scandal.

I know that the government doesn't want us to do that, and I can understand that, since their appointees were found to be in conflict of interest. The chair was found.... I know it said two times in the Ethics Commissioner's report, but they also admitted in committee that the two were rolled up. It was 24 times that the chair hand-picked by the Prime Minister, Annette Verschuren, who—and I will introduce the subject so that MP Turnbull can introduce the letter—three times in committee when I asked her, said that she did not apply. I made it very clear and very simple. I asked, “Who contacted you?”

She said that Minister Bains had contacted her twice.

I asked, “Did you apply?”

She said no.

I asked if she was sure, because both the PCO and Minister Bains said that they only operate from lists of people who had applied.

She said that no, she had not applied. In fact, in the ultimate arrogance we often see from her, she said that she had never applied for anything in her life. It all lands in her lap.

Miraculously, a week after PMO had a chance to talk to their hand-picked appointee, her lawyer—not her—sent a letter saying something like, “Oh, I guess I was wrong when I said three times that I've never applied for anything in my life, including this job,” which she now remembers. She had her lawyer—not her—write a letter to the committee saying something to the effect of, “Oops, I said three times that I didn't apply, that I'm too important in Canada to apply for anything. Everybody comes to me and asks me to do things, including the Liberal government.”

I actually believe her original testimony, because it's consistent with what the former president, Leah Lawrence, said when she was before the hearings in committee on this. She said that the minister's office had directed specifically that Annette Verschuren be appointed over the objections of management of SDTC, who said that we cannot appoint somebody for the first time in our history who is conflicted. The Prime Minister's Office, through the Privy Council Office and Minister Bains, proceeded anyway, and Annette Verschuren admitted that they had hand-picked her. They moved outside the normal process. That is all—

[The Chair, Liberal, Joël Lightbound]

We're on Bill C-27, technically, but....

[The Chair, Liberal, Joël Lightbound]

We're on Bill C-27. I don't think, given that the communication's been sent to all committee members, that it's necessarily—

[Jean-Denis Garon, Bloc, Mirabel, QC]

Very quickly, I want to say I intend to vote in favour of Mr. Perkins’s motion. I think it’s pragmatic.

I think what we experienced at committee shows that certain elements, such as amendment CPC‑9 and the tribunal, are problematic. We therefore need time to think about it if we all want to attain the same objective, especially regarding the first part of Bill C‑27, which protects personal data. We may have some differences of opinion when it comes to the ways of attaining this objective, but I think we can do it.

I want to thank the parliamentary secretary, Mr. Turnbull.

I think it’s a great sign of openness, especially since we will be able to use our time intelligently for a study that, in my opinion, is nonpartisan and consensus-based. So, that’s already a very good thing.

I hope this spirit of openness on everyone’s part will remain active so that we can find a way forward. We are all thinking about it. I still think we can do it.

[Rick Perkins, Conservative, South Shore—St. Margarets, NS]

Thank you, Mr. Chair, and thank you, MP Turnbull.

From our perspective, obviously, we always say that the committee is master of its own domain. It can always change this if it wants to, and I'm okay with the first three items.

I believe we need to find time in the schedule to do two things on MP Masse's credit card study. One would be to have the time to determine whether or not we need more than four meetings, because we did say—and the motion for the credit card study says this—at least four meetings. I think we have the flexibility in this committee to say, “Okay, we have more witnesses and more testimony we want to hear.” Plus, obviously, there is the planning of the report; the development of that study needs to be built in as well.

On the fourth item, I would be more comfortable if, after the part of the sentence that says “uninterrupted by any other study”, I could propose an amendment that says, “unless otherwise determined by the committee” so that it's clear the committee has options and that we've not agreed to just block ourselves out ad infinitum on Bill C-27 when we have other items that come up on the credit card study or may come up in the future.

Mr. Chair, I would propose that amendment to this motion, just off the top of my head. I don't know if we have anything that we can send to the clerk so that it's in both languages.

[Brian Masse, NDP, Windsor West, ON]

Thank you, Mr. Chair. I'm going to support the motion.

We had some informal discussions, and I know there's a concern about the last part and making sure we focus on that, but it won't stop us if there is an emergency or if something else comes up. I appreciate the parliamentary secretary bringing this forward, given that we could go around in circles on some of this material, and we'll be stopped from doing that.

Also, obviously, I'm very interested in the credit card study. It's something I've been after for a while in terms of having more accountability, and I appreciate the time that we'll put into that.

I also try to appreciate that we've worked a lot on Bill C-27. I think that all parties here have been trying to find their way through this. It's historic, especially the issue of artificial intelligence. That aside, we've done a lot of stuff on the privacy aspect and we seem to be stuck at one particular point on the tribunal. If there's time to fix that in a way that's comfortable, I think that is better than trying to work through it with the officials here in real time, as opposed to a proper plan coming back.

For those reasons, I'll support the motion. I appreciate the nature and tone of this discussion, because this committee has historically worked really well together. We've had some moments recently on a few things, but at the same time, I'd like to spend my time here wisely, and I think this is a good program for going forward, so I'll be supporting the motion. If we do have an emergency or something else pops up in the interim, this doesn't stop a member from raising that issue.

I get the intent and why it's in there, and we'll deal with it as we go forward.

With that, I say thank you, Mr. Chair.

[Ryan Turnbull, Liberal, Whitby, ON]

Thank you, Chair.

In an effort to hopefully work very productively today and on other days, and in consideration of some of the other motions that have been put forward, in particular the one from Mr. Masse, which I think we all supported last time, I would like to move the following motion, which is to suggest a program or schedule for some of our time over the coming weeks.

I'll read it into the record, and then we will send it to the clerk. We will also send this all by email shortly after that, with translation in both official languages.

I move:

As relates to the committee's future business, it be agreed that:

i. The committee dedicate its regular meetings on September 23 and 26, 2024, to consideration of Bill C-27;

ii. The Minister of Innovation, Science and Industry, and officials, appear at committee no later than Thursday, October 10, 2024, for two hours, on the subject of the minister's mandate;

iii. Notwithstanding the minister's appearance, that the committee dedicate its regular meetings during the weeks of September 30 and October 7, 2024, to the study proposed by MP Masse, on the issue of credit card practices and regulations; and that witness lists be submitted by each party by Friday, September 27, 2024, by 4 p.m. EST; and,

iv. That the committee resume consideration of Bill C-27 as of Monday, October 21, 2024, and that consideration of the bill be uninterrupted by any other study until the completion of clause-by-clause by the committee.

That's what I would like to propose. I think it accommodates two of the requests that were made by other committee members, which I thought were quite reasonable and around which I think we, as a committee, achieved a relative degree of consensus. One was the appearance of the minister for two hours, which, committee members will be happy to hear, we've identified we would be able to do before October 10. The other is to have no less than, I think, four meetings on Mr. Masse's motion on credit card practices and regulations, which we also agreed with and thought would be good, but we don't want it to take away from moving forward on Bill C-27, given that we've been at a bit of an impasse.

We are working and looking to hopefully use the time away from Bill C-27 for a couple of weeks to work with other parties constructively and negotiate a path forward on Bill C-27. All of us, over many months, have remarked how important that bill is, so we are looking to use that time constructively and, in the interim, to have the minister appear and also prioritize Mr. Masse's suggested study.

That's the effort here: to work constructively with all of our colleagues and account for some of the other priorities that were brought up in the last meeting. I hope the motion will be well received by the committee. We'll send it around by email.

Originally, we had in the motion that we would, hopefully, move past amendment CPC-9 temporarily, but given the way we worded it in our draft, we realized that wasn't going to be consistent with procedural practice because we would have to move past the whole clause, which we didn't feel was important. I have made the deletion myself. We'll send around the final wording to you in a few moments.

Thank you very much.