Industry and Technology Committee on April 30th, 2026

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

From a number of the tables and data that you provided, it looks like the U.S. is moving, at least recently, quite aggressively to modernize, you could say, their approach to capitalizing on AI and and other emerging and influential technologies.

Are they a leader in this? Who's doing well, and where could we be looking for examples? Is it the EU or China? Who is bringing in policy that's helping them?

[Jim Balsillie]

Many nations in Southeast Asia, Europe, South America and elsewhere, and the U.S., understand that the intangible economy is not a production economy of co-operative trade. It's a rentier economy wherein somebody is the landlord and somebody is the tenant. Nobody's going to look after Canada. Nobody's going to be our economic partner, because nobody is anybody's economic partner in this system. It has to be us looking after ourselves. I've not seen a country with more potential pay less attention to this than Canada. The South Koreans are doing sovereign compute. All the Europeans are doing it. They're doing the AI governance. South Americans are doing their own payment rails and systems. There's a big contention on the compute and digital sovereignty the Mexicans are doing. The U.S. of course....

I'm really concerned about our lack of attention to this as a country. It's moving fast, and we're putting negative points on the board, not even a positive point.

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

What would be one of the first steps to take to put us in the right direction?

[Jim Balsillie]

The first thing we have to do is orient to the fact that this stuff matters. We don't participate in any of these standards bodies. There's a war going on in standards bodies. What's happened is this: Basically, CEN, CENELEC and IEEE are the European ones. They booted out ISO because it's too U.S.-centric. The U.S. doubled down on ISO and IEC, as I talked about when those structures.... It exited 66 global organizations. ISO and IEC are joint in AI governance. We're not there. We don't understand that the rules and structures, and winners or losers, are happening on these committees right now, every single day.

What would I do? I'd build capacity. I'd demand orientation, and I'd map out implementation plans on all these specific things I've outlined. I'm just giving examples from the last year. I could double this list if you want me to, but I only have five minutes.

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

Thank you very much. I'm out of time.

[The Chair, Liberal, Ben Carr]

Thanks, Ms. Dancho.

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

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

Thank you, Mr. Chair.

Thank you to the witnesses. My first question is for Ms. Lambert.

You mentioned that AI and quantum are on converging timelines and that Canada has the room to lead. Even though you wish AI and quantum were treated separately, how would you recommend the government incorporate quantum into our AI strategy?

[Lisa Lambert]

Thank you for the question.

I think it's really important to understand the nuance between the two. A lot of the time, emerging tech is treated as a broad bucket. They are different platforms with different considerations, and they're also at a different stage of development right now, where AI is further along and quantum is a bit more nascent.

Here in Canada, we have a number of world-leading quantum computing hardware players competing at the highest levels, with diligence. Three of the 11 companies in stage B of DARPA's quantum benchmarking initiative, or QBI, are Canadian companies, which is a great testament to our strength in this. It was also Canada, through 1QBit, that founded the global quantum software industry. We have a number of significant assets here.

Canada is really at a key point right now. We may have overlooked some policy considerations in terms of AI. Mr. Balsillie pointed out a number of those. I would argue that quantum is the canary in the coal mine for a number of the decisions we make going forward and for seeing what the path will be for commercializing this technology.

Canada has a history. It's been commented on already. I've said it before in this committee as well. We do very well in the early innings. We're great pioneers of these emerging technologies. Then, when it comes to commercialization, we give the value capture away. For quantum, we're at this decision point right now. Looking at this very seriously, it is a bit of a different path than it is for AI. With AI and compute infrastructure, we want to be skating to where the puck is going with this, rather than looking at one class of compute in isolation.

These really are going to be orchestrated systems, going forward. That's how we work with compute today. We use GPUs and CPUs. This all happens seamlessly behind the scenes. It will be similar with frontier compute and the different systems we're talking about. We need to make a concerted effort to work on developing these systems, ensuring that we have companies at the forefront of this space and understanding that orchestration, because we can't be sovereign over what we don't understand.

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

Thank you.

Ms. Lambert, you co-wrote an article last November entitled “Cyber Resilience: The Cornerstone of Canada's Digital, AI, and Quantum Future”. In the article, you stressed the importance of treating the intersection of AI and quantum computing as central to Canada's digital future and ensuring that cybersecurity remains at the forefront of the discussion.

Can you share with us what you see as the largest vulnerability Canada faces if cybersecurity does not keep pace with development in AI and quantum computing?

[Lisa Lambert]

Our entire economy is built primarily on a digital backbone. What we're talking about is vulnerability to the foundational cryptographic systems that keep that backbone secure. If we're not looking at updating those systems.... A lot of the cryptographic layer that's protecting our systems right now goes back to the 1970s. It's due for a refresh, to say the least.

With the opportunity right now with the quantum threat, which we've known about since 1994, there have been a number of Canadians advocating for the need to prepare for this and leading the development of solutions that are now standardized in this space and ready for deployment. We have truly a generational opportunity to be not just migrating over to quantum-safe solutions, but to be fundamentally refreshing our cryptographic layer and ensuring we have that protection over the digital backbone that is going to underpin our entire economy, national security systems, government systems and pretty much everything that we transact over now.

The potential risk for this is quite frankly catastrophic. It's something that we know about. We need to take action and move forward with urgency and ensure it's not just the government that's protected, but all of society.

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

Thank you.

What concrete steps should the Government of Canada take to ensure our cybersecurity keeps pace with these emerging technologies?

[Lisa Lambert]

Engaging with the developers of this, both of the technologies and of the countermeasures, is really key. It's moving very quickly right now. You can only be at that forefront by having engagement as the first piece.

I did mention that the cyber centre released their post-quantum migration road map back in June 2025, which is a good first step with that. I think the government should look at department plans. They are due by end of day today. Are those department plans filed? Are they credible? Do we have an inventory of our assets? It's very hard to protect your cyber-assets if you don't actually know what they are and where they are.

Getting the inventory layer in place is a key piece for that. I think government has a role to play and a responsibility. Government knows about this threat. To be able to convey that to Canadians, Canadian businesses and Canadian public institutions and ensure they have the support and the coordination needed to migrate over is a key piece as well.

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

Ms. Lambert, you also wrote an op-ed in The Globe and Mail, entitled “The future is quantum. Canada must seize...it”, in which you stated that quantum technologies are the future. In particular, since quantum computing is the future, how can Canada position itself to be the leader at the intersection of AI and quantum?

You also talked about how “Canada led groundbreaking AI research” and said, “But too often we've stopped short of translating scientific leadership into lasting economic and strategic advantage.” In your view, how did Canada fall short in fully commercializing and scaling its AI advantage?

[The Chair, Liberal, Ben Carr]

Answer quite concisely, please, Ms. Lambert, because we're over time.

[Lisa Lambert]

I think we lost sight that we were in a race. We continued to treat AI as a research project and not as a foundational technology platform that was moving forward and moving into commercialization and industry, and our policy tools were completely mismatched for that.

[The Chair, Liberal, Ben Carr]

Thank you, Mr. Ma.

Mr. Ste‑Marie, you have the floor for six minutes.

[Gabriel Ste-Marie, Bloc, Joliette—Manawan, QC]

Thank you, Mr. Chair.

I'd like to welcome the three witnesses and thank them for being here.

First, I have a comment for you, Ms. Lambert. Again, I repeat, the quantum industry is a really important industry. I hope the best for you. I think that, in the future, the committee could examine that industry in greater detail.

I had some questions for you, but my colleague Mr. Ma asked them all. I took note of your answers, and I thank you for them.

By the way, I want to point out that the Turing award was won by Mr. Gilles Brassard from the Université de Montréal, whose work focuses specifically on cryptography. We are following that closely.

Mr. McKelvey and Mr. Balsillie, my first question is about the AI act passed by the European Union in 2024. Should Canada draw inspiration from it? Can this framework lay a good foundation or would that be a mistake?

Mr. McKelvey, you may answer the question.

Mr. Balsillie, you may answer afterwards.

[Fenwick McKelvey]

Thank you.

Certainly, one of the key concerns of the EU AI Act is its implementation. It was first moving in the launch of a high-risk system, which is quite distinct from AIDA. I think it was something we wanted to see better implemented in Canada as a way of assessing and trying to understand where the applications of AI could be. Certainly, as an educator, the fact that AI in education was a high-risk application is a good example of how this act was developing a literacy to try to process and triage human rights risks for new AI technologies.

I think the concern has been the move towards generative AI models, which I think elude regulation strategically because they're meant to be all things at once. I think that is one of the things we need to be mindful of: both the way the EU AI Act has stalled around generative and foundational models and the way that the assessment and the techniques of assessment were largely delegated to third parties, meaning that there wasn't institutional capacity at the government or state levels to make these kinds of classifications.

I think those were two key gaps that we could learn from.

The third—to emphasize—is, in Europe, the development and proliferation of open models and the opportunity we have, in collaboration with other developed nations, to work towards more digital solidarities and stacks that allow us to take advantage of these complex technologies that one nation alone might not be able to create.

[Gabriel Ste-Marie, Bloc, Joliette—Manawan, QC]

Thank you very much.

Mr. Balsillie, it's your turn to answer.

[Jim Balsillie]

Thank you for the question.

It's a multi-faceted challenge. Europe's ahead of us in many respects, not the least of which, as I've mentioned, is its privacy legislation, which is rooted in human rights. It's also deeply involved in the regulations to govern AI.

Professor McKelvey is right that learning models threw everybody sideways, and there are also enormous intellectual property issues that everybody is racing to on these things.

Europe has a lot more latitude to govern itself because we got shackled under USMCA. If you noticed, the way we're trying to get ourselves out of this is through a little bit more sovereign compute, and the moment we talk about it, it's introduced as a trade irritant.

My point is that there's no silver bullet in this. We're going to have to understand the economic statecraft that's at play here. It's all very legal, and it's very technical. Europe is a full participant, including the privacy legislation and institutions to respond to that.

We're literally doing nothing. I just want us to get oriented to this and to start doing these things. Definitely, the standard setting on the AI Act, the privacy of GDPR and certainly starting to look at the governance of it and what they're doing on sovereign compute are very good places to start.

[Gabriel Ste-Marie, Bloc, Joliette—Manawan, QC]

Thank you very much.

I have a second question for you both.

We talked about generative AI.

Prior to the last election, alongside the debates about Bill C‑27, the government published the voluntary code of conduct on the responsible development and management of advanced generative AI systems. Today, more than 40 businesses have signed the code.

Is that enough to properly regulate the use of AI?

Please answer in under a minute each, if you can.

Mr. McKelvey, you may go first again.

Mr. Balsillie, you'll go after.

[Fenwick McKelvey]

Briefly, no. One part, to echo Mr. Balsillie's comments, is that when I was co-director of the Applied AI Institute at Concordia University, we tried to participate in standards organizations, but we lacked resources and capacity.

There is a gap for researchers with an expertise in understanding the social impacts of digital standards to participate at these levels. I think the formation of the code of conduct is another example of a largely industry-led initiative trying to whitewash the social risks of AI with a non-binding agreement. It's more of a photo op than anything about actual lived impacts, as we've seen play out most recently in Canada.

[Gabriel Ste-Marie, Bloc, Joliette—Manawan, QC]

Thank you.

Mr. Balsillie, it's your turn to answer.

[Jim Balsillie]

Same thing.

[Gabriel Ste-Marie, Bloc, Joliette—Manawan, QC]

That's great. Thank you.

I still have 30 seconds left. Mr. Balsillie, could Bill C-27 from the previous Parliament form a good basis for legislation governing AI?