Industry and Technology Committee on March 9th, 2026

[The Chair, Liberal, Ben Carr]

I call the meeting to order.

Good afternoon, everybody. Welcome back. I hope everyone enjoyed a good constituency week back home in your ridings.

It's an exciting day for us, because we are starting something new for the first time in a little while.

We are starting a new study on AI.

Welcome to our witnesses.

As a quick note for the one witness in the room, if you haven't been here before, you have to make sure that you have this plugged in. When it's not in use, place it on the sticker in front of you to protect the health and well-being of our interpreters.

I note that all of the tests have taken place as well.

Colleagues, we're joined by three witnesses today. Before I introduce them, we have dedicated the final few minutes of the second hour, as previously negotiated, to finishing version two of the defence industrial strategy report that we were working on in the previous week.

With us today, appearing as an individual, we have David Duvenaud, an associate professor of computer science. We have Dugan O'Neil, vice-president of research and innovation at Simon Fraser University, and he's joining us by video conference. Here with us in the room, from AI Governance and Safety Canada, we have Wyatt Tessari L’Allié, founder and executive director.

We will provide time for opening remarks of up to five minutes from our witnesses.

Mr. Tessari L’Allié, the floor is yours.

[Wyatt Tessari L'Allié, Founder and Executive Director, AI Governance and Safety Canada]

Mr. Chair, committee members, thank you for inviting me to speak to you today. I'm honoured.

AI Governance and Safety Canada is a non-partisan not-for-profit organization and a community of people across the country. We start by asking the following question: What can we do in and from Canada to ensure that AI is safe and benefits everyone?

Since 2022, we've been making public policy recommendations to the federal government, such as our submission on the AI and data act bill and our many appearances before parliamentary committees.

Two years ago, in the context of the AI and data act, I testified before this committee that while early forms of AI, like facial recognition and chatbots, require some regulation, there were much more powerful forms of AI on the horizon that Canada needed to get ready for. We made the case that certain AI capabilities pose an unacceptable risk because they could lead to dangerous weaponization or loss of control scenarios: systems that, without the instruction or authorization of their users, can detect and evade monitoring, rewrite their own code, make copies of themselves, spawn other AI systems, commandeer resources or refuse shutdown.

In the last few weeks, a major jump in AI capabilities has produced such systems. We have now entered the new paradigm of AI called “AI agents”. Unlike chatbots, which simply respond to a prompt, AI agents are systems that can take actions in the real world, working autonomously for hours and overcoming hurdles along the way. Think of them as an employee that you sit down at a computer and tell to accomplish a goal such as building a software program or launching a cold-calling campaign. They come up with a plan, navigate the files and tools they'll need, send and receive emails and phone calls, make and receive payments and debug any issues they come across.

Last week, we found out that hackers manipulated Claude Code to break into Mexican government systems and steal data on over 100 million people. The tool didn't just write code or perform odd tasks for the hackers. It planned and executed most of the sophisticated campaign itself.

Also, now we're starting to see loss of control incidents. These include agents stealing passwords, harassing developers and modifying themselves to evade shutdown in order to achieve the often mundane goals they have been given. Over the weekend, we found out that Chinese tech giant Alibaba produced an agent that, unbeknownst to their engineers, had created an elaborate hack to mine cryptocurrency for itself, despite being given a completely unrelated goal.

These loss of control incidents are concerning because they are the precursors to agents that could permanently evade human control and act adversarially in ways that we cannot detect or stop. This is why hundreds of leading scientists, business leaders and policy-makers are calling AI an “extinction risk”.

What needs doing? In October, we published our white paper titled “Preparing for the AI Crisis: A Plan for Canada”. In light of this latest jump in capabilities, we now focus on three actions Canada can take.

Number one is to pivot to meet the AI crisis. AI development is now a national security emergency and needs to be treated as such. Given its impact on a wide range of files, success will require coordination across cabinet, parties and jurisdictions.

Number two is to spearhead global talks. AI development is global, and no country can manage it on its own. At Davos, Prime Minister Carney showed that Canada can lead. Our strongest card is to convene talks, propose solutions and lay the groundwork for an AI treaty that the U.S. and China might sign when they wake up to the crisis and realize that they have no alternative.

Number three is to build Canada's resilience. Canada needs multiple lines of defence against weaponized and malfunctioning AI agent systems.

This includes, first, prevention. Per our AI and data act recommendations, capabilities that pose an unacceptable risk must be made illegal in Canada. This means that you need to place an immediate moratorium on the latest generation of AI agents. Note that heads of Anthropic and Google DeepMind recently stated that they are willing to pause AI development if other companies do the same.

Second is monitoring. Currently, governments have little to no visibility into AI agent populations or activity. This means the incidents that have been publicly reported are very likely just the tip of the iceberg. Ottawa needs to urgently work with AI companies, data centres and Internet service providers to gain a clear picture of what is happening on Canada's digital infrastructure.

Third is defence capacity. Our national security teams need to rapidly develop defence strategies and containment and shutdown protocols to neutralize weaponized or malfunctioning agents.

Last is emergency preparedness. We urgently need scenario planning and joint exercises to ensure readiness for potential large-scale attacks, corrupted communication lines and shutdowns of critical infrastructure.

To make a COVID analogy, the release of the latest AI agents is like that initial outbreak in the wet market in Wuhan, China. Most of the world is still unaware of its implications, but if Canada acts quickly and decisively, we can not only prepare ourselves and help mitigate the emerging global crisis but also ensure that Canadians share in the benefits of this transformational technology.

Thank you.

[The Chair, Liberal, Ben Carr]

Thank you very much.

We're going to go to Mr. Duvenaud.

You have up to five minutes.

[Professor David Duvenaud, Associate Professor of Computer Science, As an Individual]

Thank you.

My name is David Duvenaud. I'm a professor of computer science at the University of Toronto, where I used to specialize in deep learning and generative models. In 2023 and 2024, I led Anthropic's alignment evaluation team. Our task was to test whether the company's AI was capable of pursuing hidden agendas—for instance, by subverting human oversight or decision-making.

I'm also an author on the “International AI Safety Report” and a member of the safe and secure AI advisory group for the federal Advisory Council on Artificial Intelligence. I am a co-chair at the Schwartz Reisman Institute for Technology and Society.

Today, I'm speaking in a personal capacity. I want to concur with Mr. Tessari L'Allié, in that very capable models raise serious security and loss of control risks. However, I want to address another challenge.

Large language models in particular, and their successors, are on track to becoming a competitive or superior replacement to humans in almost all of our important white-collar and decision-making roles over the next five to 10 years, roughly. In the slightly longer term, we're on track to make almost all humans economically obsolete, permanently. This will, in turn, cause a permanent loss of bargaining power for workers. Citizens will switch from being necessary for growth to becoming troublesome wards of the state and will have little recourse if they are then further marginalized and disempowered. We face a much larger problem than simply managing a temporary labour disruption.

I realize that this sounds similar to incorrect predictions made about previous labour disruptions, like the Industrial Revolution. Much wealth and many new jobs will be created as a consequence of improving AI capabilities. However, AI will, at some point, also be able to fill these new jobs better than humans. Eventually, each of us will have to compete with machine workers at least as capable as us but also faster, more responsive, more reliable and cheaper. This is the stated goal of the largest artificial general intelligence, AGI, companies, and they're well on their way to achieving it. Many of my former students are working at these companies, making fortunes, and many of them also believe that this is probably their last chance to have a real job. Teaching at the university is becoming depressing as students see the value of their skills decreasing month by month.

You might expect the major AI companies to have an answer to the question of how AGI development is supposed to ultimately benefit the average person economically, even if indirectly. However, their consistent stance has been that this is a huge problem they don't know how to address. For example, Dario Amodei, the CEO of Anthropic, said, “in the long run AI will become so broadly effective and so cheap that [comparative advantage] will no longer apply” and “At that point, our current economic setup will no longer make sense”. OpenAI's CEO, Sam Altman, was recently asked, “How will people survive economically?”, to which he replied, “I don't know; neither does anyone else.”

Over the past few years, I've systematically asked my colleagues in industry labs, research institutes and other academic disciplines for any coherent vision of how our civilization could robustly serve human interests once we are no longer competitive. The only consensus is that the window for individuals to compete and contribute is closing.

What does this mean for you, as MPs?

The main thing I'd like you to keep in mind, going forward, is that people are right to fear being replaced. This isn't just a period of disruption, after which things will return to something like business as usual. The default path is that we all become unemployable, except in mandated make-work contexts, and then marginalized in favour of a machine economy oriented towards growth for the sake of competitiveness.

The second thing to keep in mind is that we should expect governments to generally become much less responsive to the needs of their citizens after this happens. The need for human labour by the state aligns the state with its citizens. Right now, investment in education, and human capital more broadly, pays off for everyone in the long run. However, soon, fiduciary duty will require investing instead—mainly in data centres, power plants and robotic factories.

Finally, there is no way to address these problems without global coordination. Human replacement can happen even if everyone involved would prefer to prioritize human interests. It's just going to be the only way to remain competitive. Every country, industry and worker faces a choice between adapting to AI as fast as possible or being out-competed. No one can unilaterally do much to slow or soften the blow of eventual human irrelevance.

Thank you.

[The Chair, Liberal, Ben Carr]

Mr. O'Neil, the floor is yours for up to five minutes.

[Dugan O'Neil, Vice-President, Research and Innovation, Simon Fraser University, As an Individual]

Thank you.

Good afternoon, Mr. Chair and members of the committee. Thank you for the opportunity to contribute to your study on artificial intelligence and Canada's strategic industries. I'm pleased to represent Simon Fraser University here today.

Artificial intelligence is rapidly becoming foundational to economic competitiveness, industrial productivity and national security. Countries that control the infrastructure, talent and intellectual property behind AI will shape the next generation of global innovation. For Canada, this creates a clear strategic imperative to build sovereign AI capacity that ensures Canadian research, data and technologies remain anchored in Canada while supporting our companies and industries.

Canada begins from a position of strength. Our researchers helped pioneer modern machine learning, and our universities continue to produce world-leading AI talent, but global competition is accelerating quickly. Maintaining leadership will depend on whether Canada can connect research excellence to sovereign infrastructure and domestic industrial adoption. Universities are central to that effort.

Institutions like Simon Fraser University operate at the intersection of discovery, infrastructure and commercialization. We train highly skilled AI talent, host advanced computing infrastructure and partner with Canadian companies to translate research into deployable technologies. At SFU, our innovation model brings together researchers, technology developers, start-ups and industry partners to move innovations more quickly from discovery to application.

This model is already supporting collaborations with Canadian industry partners working to strengthen Canada's digital and energy infrastructure. For example, we are working with Bell and Hypertec to support the development of sovereign computing infrastructure and AI capabilities here in Canada.

We also collaborate with Canadian companies including Cerio, Corix and Moment Energy, which are applying advanced technologies, including AI-enabled analytics and optimization, to improve energy systems, infrastructure management and clean technology deployment. These partnerships are critical because sovereign AI capacity is not only about research; it's about ensuring that Canadian companies have the tools and infrastructure they need to compete globally.

Another area in which Canada has a unique opportunity to lead is the convergence of artificial intelligence and quantum technologies. Simon Fraser University has played a major role in Canada's quantum ecosystem. One prominent example is Photonic, a globally recognized quantum computing company that originated as an SFU spinoff and continues to grow within Canada's innovation landscape.

As AI models become larger and more computationally intensive, the relationship between AI supercomputing infrastructure and quantum computing and networking will become increasingly important. Co-locating these capabilities can accelerate breakthroughs in computing, communications and cybersecurity.

At SFU, we are actively advancing research at the intersection of AI, quantum technologies and next-generation communication systems, helping to lay the foundation for future computing architectures that will support Canadian science, industry and national security.

This brings me to four brief observations for the committee.

First, sovereign AI capacity requires sustained investment in research institutions that already have the infrastructure and partnerships needed to scale innovation quickly. Truly sovereign infrastructure is critically needed.

Second, Canada must ensure that advanced computing capacity, including AI supercomputing, remains accessible to Canadian researchers and companies. Compute infrastructure is becoming as strategically important as energy infrastructure.

Third, Canada should leverage the convergence of AI and quantum technologies to build globally competitive innovation hubs anchored in Canadian institutions and companies.

Fourth, the rapidly changing technology landscape requires a flexible, adaptable national talent pool. The post-secondary system needs support to graduate students who can adapt to a changing work environment. We must also provide opportunities for the workforce to upskill and retrain for new opportunities if we want to create conditions for success for Canadian companies.

If Canada can align long-term investment, strong regional ecosystems and partnerships with domestic industry, we have a real opportunity to lead not only in AI research but in the industries and technologies that will define the next generation of economic growth.

Thank you again for the opportunity to appear before the committee. I look forward to your questions.

[The Chair, Liberal, Ben Carr]

Thank you very much to all three witnesses for your introductory remarks.

Colleagues, I'm going to let you know that because of that late start, we're going to have to cut the final slot. On my list from each party, I have Madam Borrelli and Mr. Bardeesy. I'm letting you know now so that if you want to make some changes, you'll have the ability to do that. We have to be on time given that we have the report to deal with at the end of the second hour. I'll let you figure that out internally.

For now, Madam Dancho, the floor is yours for six minutes.

[Raquel Dancho, Conservative, Kildonan—St. Paul, MB]

Thank you.

Thank you to the witnesses.

Thank you to our Bloc Québécois member for bringing forward this important study. It's a critical time for government to be looking at this. I think our committee here is undertaking important work.

There was excellent testimony, though a bit foreboding. Obviously, it's not a laughing matter. It's a very serious matter. I did want to clarify a few of the things to provide context for those who are watching and are interested in this.

Mr. L'Allié, thank you for being here. You provided excellent opening testimony. You stated that there was some sort of AI breakthrough in the last number of weeks. That's really changed the game, if I could put it in my own words.

Can you just describe, in very basic terms, what this change was and why it's so relevant to the discussion we're having today?

[Wyatt Tessari L'Allié]

Absolutely. Very simply, up until now, we had AI that could talk. We now have AI that can act. In practice, we've had various forms of AI agents for many years, but the technology wasn't there to make them useful. In particular, previous agents were very limited because the technology wasn't there yet, allowing them to troubleshoot, interact and use computer tools on the fly.

Since December, there has been a jump in the base model capability. A whole new infrastructure, like OpenClaw, was developed, which helps give control of a computer to an AI assist agent.

We're now in a world where you're not just talking to a chatbot and getting an answer, but you're telling an AI assist agent to go and do this in the real world for you.

[Raquel Dancho, Conservative, Kildonan—St. Paul, MB]

In your plan for Canada paper from your association, you talk about artificial general intelligence, which you describe as the industry's term for first systems that can match or out-compete human beings in the real world.

Is that what you're talking about, that leaps have been made, or is it that it's just one step closer to that?

[Wyatt Tessari L'Allié]

We're getting so close to AGI that it's becoming a matter of semantics. Depending on your definition of AGI, some people have it as systems that can do every economic task that a human being can do. We're not quite there yet, probably another six, 12, 18 months for that. Another definition is that there are systems you can permanently lose control of. We're probably not there yet with that, but possibly soon, depending on which system you're looking at. It's a bit like driving towards a city. When you start getting to the suburbs, you're not officially in the city yet, but you're kind of in the area, so we're basically very close to AGI.

[Raquel Dancho, Conservative, Kildonan—St. Paul, MB]

You mentioned the national security risk associated with this, so applying these new developments with AI and thinking that AGI is just around the corner. We're in the suburbs; we're not quite downtown.

Can you describe in a little bit more detail a real-world scenario on the security impacts that Canada should be preparing for? My understanding is that this just makes cyber-hackers that much more competent. It just increases their capacity and the damage they can do.

Is that correct?

[Wyatt Tessari L'Allié]

That is correct, but there's also the added new risk of loss of control. This is where you have a system that can—

[Raquel Dancho, Conservative, Kildonan—St. Paul, MB]

I'm sorry to cut you off.

They're acting on their own. Is that what you're saying?

[Wyatt Tessari L'Allié]

Exactly. They're able to independently self-sustain, basically. Whether it be to steal resources, rent a service or rent themselves....They copy themselves in different formats. It becomes more of an electronic disease, living in your networks, that you can't control versus purely a tool you can use for cyber-attacks.

[Raquel Dancho, Conservative, Kildonan—St. Paul, MB]

In the same paper I mentioned earlier, you mentioned that one of your recommendations for preparing the country for this was to establish a permanent task force on AGI chaired by the Prime Minister. That's an interesting recommendation.

Given your testimony, you're saying the security risk is so considerable now. I know your colleague, Mr. Duvenaud, also outlined for the committee in his opening remarks the potential labour impact.

Given that significance, is that where that position is coming from, that this is so important?

[Wyatt Tessari L'Allié]

There's a very legitimate case to make that this is a bigger deal than COVID. In that sense, for every file the government is going to work on, whether it be national defence, energy, culture or the environment, everything is going to be disrupted by AI. This has to be coordinated from the top. Given the time it takes for government to put meaningful solutions in place and given the speed at which AI is moving, you're basically dropping everything and working in AI mode.

[Raquel Dancho, Conservative, Kildonan—St. Paul, MB]

Mr. Duvenaud, on that same question, regarding the recommendation to establish a permanent task force on AGI chaired by the Prime Minister, what would be your biggest argument of why we should do that?

[Professor David Duvenaud]

Honestly, I haven't thought much about this question at this particular committee. It's going to be necessary to have expertise on call. Things are just going to keep moving faster and faster. Like Mr. L'Allié said, this is one of the main things that people just want to talk about. They are going to have to react on a shorter time scale than usual going forward.

[Raquel Dancho, Conservative, Kildonan—St. Paul, MB]

Your position is that there'll be tremendous job losses, first in white-collar jobs and possibly, with robotic automation combined with AI, we could be losing blue-collar jobs. We're talking about five or 10 years for white-collar jobs and perhaps 15 to 20 years for blue-collar jobs.

Is that your position?

[Professor David Duvenaud]

It's really hard to predict. It's already starting to bite, but it will bite especially over the next two or three years. The claims about there not being any place to retreat to are maybe more in the five- or 10-year time frame.

I'll say those kinds of issues are more suited to the usual legislative pace than the kinds of risks Mr. L'Allié is talking about.

[Raquel Dancho, Conservative, Kildonan—St. Paul, MB]

What I'm hearing from the two of you gentlemen is there's certainly a very considerable increase in national security threats because of AI's capabilities and the rapid development of it, and then Mr. Duvenaud talked a lot about considerable labour risks, as well, that are coming. I mean risks....I'm not sure if you'd qualify it as that, but I think all of our constituents would be very concerned, so I'll call it a considerable risk. I appreciate your feedback.

I believe I'm out of time, but I appreciate the recommendation you've made through the association you represent, Mr. L'Allié, about a permanent task force chaired by the PM on this.

[The Chair, Liberal, Ben Carr]

Thank you very much.

Mr. Ma, the floor is yours for six minutes.

[Michael Ma, Liberal, Markham—Unionville, ON]

Thank you.

I am a computer science graduate. I'd like to start with questions for both Dr. Duvenaud and Dr. O'Neil.

How are your institutions connecting with the industry, especially in terms of how you're utilizing federal government funding for this research and development, and how are you ensuring that we're advancing the technology, but that public safety is at the heart of all these?

We'll start with Dr. Duvenaud.

[Professor David Duvenaud]

I have some federal funding through the Vector Institute, some through a CIFAR AI chair and also some through the Schwartz Reisman Institute. These have been very successful initiatives in terms of retaining talent and just letting researchers do blue-sky research with a long-term view. I'm really happy with how this has all gone.

For some of the risks, it's been slightly awkward. The Vector Institute wants to work closely with industry and says, “We're going to disrupt. We're going to adopt as fast as possible,” and then Geoff Hinton will come in and say, “Also, there are all these horrible risks, and this is going to change everything and maybe ruin lots of things.” It puts them in a bit of an awkward situation.

Right now, the Schwartz Reisman Institute is doing a good job of thinking about the big picture, while at the Vector Institute, we're doing a good job of trying to get the short-term benefits rolled out to industry, health care and stuff like that.

I don't want to go on and speculate. If you have more specific questions, I'm happy to elaborate.