Industry and Technology Committee on April 30th, 2026

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

Thank you.

Mr. Beer, in my last minute, I have a similar vein of questions for you.

On the data centres, do you see similar security concerns, given the amount of Canadian data that goes through foreign and particularly American data centres that are operated by Americans? It could be any country. If it were any country, should we be concerned? Do you have a similar area of concern in this?

[James Beer]

Absolutely. Whether it's network inspection, which is technically possible and you know you can intercept traffic...I think that's a very real concern.

The other element we haven't touched on much is that of foreign entities clogging up our power interconnection queues, such that we can't drive digital innovation for Canadian companies and for very legitimate Canadian services. AI is wonderful, but the foundations of technology today are the energy and health care customers and financial services customers.

We have to be very careful to ensure, from a power perspective, that we're not turning away all of our power to international companies and depriving Canadian companies of being able to digitally innovate. Whether that's traditional CPU-based applications or GPU and AI, it's an increasing risk for Canadians.

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

Thank you very much.

[The Chair, Liberal, Ben Carr]

Thanks, Ms. Dancho.

Ms. Begum, again, I'll take the opportunity to welcome you to the committee, congratulate you on your recent election and give you the floor for the first time here at the industry committee.

You'll have five minutes.

[Doly Begum, Liberal, Scarborough Southwest, ON]

Thank you very much, Chair.

Good morning, everyone.

Thank you to all of my colleagues. It's wonderful to be here. It's also a pleasant surprise to see colleagues I've worked with in the past. I know we worked together to both.... We're talking about having a nice balance. It's about digital sovereignty, worker sovereignty and making sure we stand up for a growing economy, a growing market and, of course, the growth of this nation. It's a pleasure to be here. As a provincial member, I did similar work, so it's not too new. Of course, this is a much different platform.

Mr. Mandryk, it's great to have worked with you representing workers who do the tough work of making sure people are connected across the country and the world. Thank you for everything you do.

It is great to have a study on how we move forward, because I know the government has a strong mandate to really bring the country forward and catch up with what Mr. Sanders talked about. We can't just have a pause and be behind in what's happening. At the same time, how do we do this wisely? Who do we make friendships with? How do we make sure we are representing our workers well?

One thing that is going to be a key component is.... I feel you have already answered a bit of this, but I'll give the opportunity to anyone who would like to answer: Do you feel we have digital sovereignty right now, at the stage we are? If not, what are some of the things we can do to make sure we create that nice balance to get to that point?

I know they haven't spoken as much as Mr. Beer and Mr. Sanders, so maybe I'll ask Ms. Blais or Mr. Leblanc.

I know Unifor is big on this, so go ahead.

[Roch Leblanc]

Yes, Unifor is big on national sovereignty. We talk a lot about auto, but when we talk about the other sectors we represent, our vision is for Canadians, by Canadians and operated by Canadians.

I think some of the examples we've heard recently from colleagues are concerning. We ought to turn our minds to what we want as a country. We believe that with the proper criteria set in place, this industry can be developed and can thrive because we are able, as Canadians, to do so. Our examples of the day concern the end-user component, but overall we cherish the thought and vision of expanding AI. We want to do so, but we want to make sure there is the right strings attached, going forward, so that it benefits Canadians and has the proper goal—a higher goal than simply capitalization. That is one of the key components for our unions.

[Doly Begum, Liberal, Scarborough Southwest, ON]

Thank you very much, Mr. Leblanc.

Mr. Mandryk.

[Corey Mandryk]

To expand on that, it's about the Telecommunications Act. Being governed federally is important, as it binds Canadians together. We communicate with each other across provincial borders.

Those of us in this room are probably old enough to remember, back in the day, the telephone companies owning the telephone in your house. We are at a place right now where these telecommunications companies are quickly moving towards a dumb-pipe business model that would be working at the behest of hyperscalers, most of which exist in the States. We're going to be relying on the services of the Amazons, the Googles and the ChatGPTs of the world, which are moving through the telecommunications infrastructure that Canadians built over decades. Now the jobs are being lost.

Regulation needs to keep up with what's going on. Technology is moving extremely fast. I believe one of my colleagues here mentioned that regulation is not moving fast enough, and that's just the nature of the beast. We have telecommunications companies moving from telcos to “techcos”. We need to follow that and make sure the regulations are tight enough to ensure that the infrastructure built by Canadians still serves Canadians through Canadian jobs and Canadian sovereignty.

[Doly Begum, Liberal, Scarborough Southwest, ON]

Thank you very much.

I believe my time was way over, so I appreciate the indulgence.

[The Chair, Liberal, Ben Carr]

It was not way over. You were just on the mark, Ms. Begum.

[Doly Begum, Liberal, Scarborough Southwest, ON]

That's perfect. Thank you very much.

[The Chair, Liberal, Ben Carr]

Witnesses, thanks very much for making yourselves available to the committee today. We appreciate the input and the guidance. It's very useful in terms of the next steps we will take to provide some advice to the government on where we think we need to go, moving forward.

Colleagues, we're going to suspend briefly as we transition to the second hour.

[The Chair, Liberal, Ben Carr]

Colleagues, we are going to move forward with the second hour of testimony today.

We have one witness with us in person and two witnesses joining us virtually.

By video conference, we have Fenwick McKelvey, associate professor in information and communication technology policy at Concordia University. From Quantum Industry Canada, we have Lisa Lambert, chief executive officer. From the Centre for International Governance Innovation, we have Jim Balsillie, founder and chair.

I can confirm that all tests have been done to ensure visual and sound quality.

To begin, I'm going to give the floor to you, Mr. McKelvey. You'll have five minutes, followed by Ms. Lambert and Mr. Balsillie here in person

The floor is yours, Mr. McKelvey.

[Fenwick McKelvey, Associate Professor, Information and Communication Technology Policy, Concordia University, As an Individual]

Thank you very much for the opportunity to be here today.

I'd like to begin by acknowledging that I'm speaking from unceded indigenous lands. The Kanien'kehà:ka nation is recognized as the custodians of the lands and waters on which I speak today.

My name is Fenwick McKelvey. I'm an associate professor in information and communication technology policy at the department of communication studies at Concordia University.

My remarks today draw on over 10 years of experience in algorithmic and AI governance in Canada. In that time, I've been a lead on major national and international research projects, a co-director of an AI research institute and a frequent commentator on Canada's AI strategy. I've also been a witness, critic and occasional participant in the pan-Canadian AI strategy.

I want to begin by emphasizing that Canada has a right to regulate AI. These technologies are inherently public technologies. In the same way that railways, highways and cellphones have required public regulation, so does AI.

AI regulation should not just be economic but social as well. The production and use of AI inherently interacts with human rights. The government has a duty to protect those rights, especially the growing gender-based impacts. Canada's branch plant industrial policy on AI, so far, has moved too slowly to protect these rights. We cannot focus on productivity while ignoring quality of work, or economic opportunity without seeing the winners and losers. Such myopia puts Canadians and governments at risk. Politicians and parties need to read the room and understand the growing public sentiment against the AI industry today.

AI regulation requires new approaches to commons management and protection of public knowledge systems. AI is a commons management issue. We are already feeling the strain generative AI has put on our collective institutions, like our media systems and our public knowledge infrastructures as well. We have a history of building public media in this country and also an opportunity to build public AI. We need to define a vision for the future of this technology that works for all Canadians. Future policy must ensure we have the regulatory capacity, independence and financial means to achieve this vision.

Universities are critical to steward the knowledge commons but are in crisis. The pan-Canadian AI strategy must extend beyond its three research centres and include greater participation from the social sciences, arts and humanities. If AI is truly a problem for all of Canadian society, that challenge demands the participation of all of Canada's public institutions and facilities from coast to coast.

Canada must do better with public participation when developing its AI policy. Sprints and AI-assisted “what we heard” reports undermine the ethos of democratic participation, contributing to consistent public opinion polls reporting low trust by Canadians around AI.

By contrast, a coalition of civil society organizations launched the People's Consultation on AI last year in French and English. The consultation received over 70 submissions. My fellow researcher Joanna Redden and I are working on analyzing these comments. At first glance, we were struck by the depth and the sophistication of the responses. To build Canada's capacity to regulate AI, we need to hear more from these voices from civil society and from those most affected by AI. They need better inclusion in how Canada listens and understands the impacts of this technology, both social and economic.

Indigenous voices need special consideration in Canada's AI governance. Canada's true potential with AI can only happen through reconciliation and respect for nation-to-nation governance that understands and celebrates the distinct knowledge systems contained within our shared territories along with their influence and significance for understanding these technologies we call AI.

The challenge ahead is daunting and is exacerbated by long-term regulatory gaps. We are now trying to deal with AI empires when in the past we have struggled with social media platforms and even newspaper barons. The task is great, but now is the time to act towards a more inclusive, social approach to AI governance that meets the challenges of our time.

Thank you very much.

[The Chair, Liberal, Ben Carr]

Thanks very much, Mr. McKelvey.

Ms. Lambert, we will turn the floor over to you for up to five minutes.

[Lisa Lambert, Chief Executive Officer, Quantum Industry Canada]

Mr. Chair and committee members, thank you for the opportunity to appear today.

You're studying artificial intelligence. Let me start by clarifying something that is often blurred in policy discussions: AI and quantum are distinct technologies. Grouping them as a single category creates real risk in both policy and execution. AI is about learning from data, identifying patterns, making predictions and automating decisions using today's computing hardware. Quantum is categorically different. It's a fundamentally different way of processing information on new hardware, making certain classes of problems approachable in entirely new ways, including problems that are effectively out of reach today. Quantum also includes sensing and communications, enabling new ways to detect, navigate and secure our world.

For this discussion, I'll focus mainly on quantum computing. If AI is about extracting insight from data, quantum computing is about expanding what is computationally possible. These are distinct technologies with different capabilities, timelines, risks and policy needs. If we group them together wholesale, we risk misjudging those risks, misapplying regulations and missing the specific opportunities and vulnerabilities each presents.

They're also complementary. AI is accelerating quantum development. The future of compute is not replacement but convergence—with AI, high-performance computing and quantum computing working in concert. As AI scales, limits are emerging in energy, cost and sheer compute. Quantum computing offers, over time, potential paths through some of those constraints.

Other countries are already making coordinated investments in this convergence. Canada has the ingredients to lead—strength in AI, a world-class quantum ecosystem, deep computing expertise—but today we lack a fully integrated strategy that looks across these technologies rather than treating them in isolation and fully leverages our quantum strengths. That means integrating and scaling Canada's quantum champions as a core part of our frontier compute strategy.

Let me turn now to an issue that cuts across everything you're studying: cybersecurity. Quantum and AI are on converging timelines that already threaten the integrity of our systems today. AI is already changing the nature of cyber-attacks. At the same time, adversaries are harvesting encrypted data today—government communications, financial records, sensitive intellectual property—with the expectation of decrypting it once quantum computers mature. This is not a future threat. It's a present one.

Canada has taken an important step. In June 2025, the Canadian centre for cybersecurity released its road map for migration to post-quantum cryptography. Departmental migration plans were due this month, effectively by the end of today. High-priority government systems must be completed by 2031. The question now is execution, because this isn't just a migration. It's a generational opportunity to strengthen our cryptographic foundations, making them more agile and resilient against a rapidly evolving threat landscape.

The cyber centre's road map covers federal IT infrastructure, but Canada's economic and national security depends on a far broader ecosystem—critical infrastructure, financial systems, supply chains and the small and medium-sized enterprises across them. In an interconnected system like digital infrastructure, the weakest link defines the risk.

Government must now clearly signal, with urgency, that this transition extends across the entire economy, not just federal departments. That means using procurement already identified in the road map to pull the market forward. It means extending expectations to critical infrastructure and ensuring that Canada is equipped to execute—not just to set direction, but to build the capacity and coordination to act. If we get this right, we do more than mitigate the quantum threat. We build a foundation of trust that underpins AI adoption, quantum deployment, economic resilience and national security.

Many Canadian firms are leaders in developing the quantum-safe solutions required. This is both a security imperative and a commercial opportunity.

I have three points to leave you with.

First, AI and quantum are distinct technologies and must be treated as such in policy and regulation while recognizing their evolving convergence.

Second, the future of compute lies in the convergence of AI and quantum. Canada has the ingredients to lead if we move at pace to scale our quantum strengths so that early leadership translates into ensuring advantage.

Third, on cybersecurity, federal plans were due this month. The window for preparation is now. This committee can ensure that execution and accountability follow across government and the entire Canadian economy.

I look forward to your questions.

[The Chair, Liberal, Ben Carr]

Thank you very much.

Mr. Balsillie, welcome. The floor is yours for five minutes, sir.

[Jim Balsillie, Founder and Chair, Centre for International Governance Innovation]

Thank you very much for the invitation to appear today.

The global economy has undergone an unprecedented 40-year transformation where wealth, power and security are rooted in the ownership and control of the intangible assets of intellectual property and AI data. These assets behave differently than tangible goods do, and they require different strategies. Today, they dominate, comprising 92% of the S&P 500's $55-trillion value, as shown in figure 1 of the annex to my brief.

Canada's economic thinking remains rooted in the 1970s, which was a tangible production economy era. Due to this—as shown in figure 2—Canada has been in a structural 40-year decline, ranking last in the G7 in productivity per capita, and it is projected to remain the worst-performing advanced economy in the OECD for the next 40 years.

I illustrate in figure 3 that Canada's original sin was missing the geopolitical shift in 1994 with its highly publicized “orange book”, which reinforced policies unfit for the emerging knowledge economy. Canadians are experiencing this decline in their everyday lives, especially during the emergence of the AI data-driven economy over the last 15 years.

Figure 4 shows the trillion-dollar-per-year GDP divergence to the U.S. over this period, which is equivalent to $100,000 annually per family of four. Figure 5 shows the exfiltration through Canada's outdated FDI strategies. Figure 6 summarizes how Canada's prosperity and security—especially in the intangibles economy of IP, data and AI—are restricted due to poorly negotiated trade agreements that focus on a 1970s economy.

My remarks today focus on three linked strategies that Canada must employ for its data and AI policy. Number one is fit-for-purpose privacy legislation. Number two is expertise to perform economic statecraft via regulatory frameworks. Number three is sovereign commercial alternatives.

Privacy and AI governance is a human rights issue. Figure 7 illustrates how inadequate governance in Canada of AI and data enabled a surveillance economy that caused a litany of harms to Canadians. They manipulate economic outcomes, enabling algorithmic pricing and wage suppression, which raises costs while lowering incomes, as my recent op-ed explains, which is in figure 8. Surveillance models also circumvent the knowledge rights I list in figure 9, which I map in figure 10 to failing Canada's commitments under the ICCPR. Figure 11 summarizes the big-tech capture and ensuing failure of the two recent attempts to upgrade PIPEDA. Canada cannot afford a third such misfire.

Canada’s policy-thinking never understood the central role of economic statecraft that created the intangibles economy for AI and more. The ensuing appendices briefly summarize examples from the last year where the U.S. deployed sophisticated capacity and strategies to utilize legal frameworks of economic statecraft to advance its prosperity and security.

Figure 12 shows that Canada is essentially absent in the three million AI patents issued globally, despite our taxpayers' funding foundational research. The resulting large and growing deficit on IP payments and receipts would be much larger if data flows were included.

Figure 13 shows the U.S. advancing its interests through coordinated policy instruments, including the AI white paper, the GENIUS Act, IEEPA tariffs and IP march-in rights. Figure 14 shows the U.S. push toward unified digital asset frameworks to control and capitalize on emerging tokenization opportunities. Figure 15 shows how the U.S. national security strategy integrates standards, IP and resource security into a single doctrine. Figure 16 summarizes how the USPTO established a working group that embeds U.S. patents into global standards bodies to convert IP into market power.

Figure 17 shows that when the U.S. exited multiple organizations, it deepened participation in three key standards bodies to drive more control over value chains. Figures 18 and 19 show how the U.S. and EU use standards setting to embed value capture and condition market access, especially for AI. Figure 20 details the recently released U.S. AI legislative framework. Figure 21 shows how the USPTO patent adjudication has been updated to favour domestic interests.

Figure 22 shows how the U.S. advisory structures integrated industry feedback into USMCA negotiations and how restrictions on Canada were a feature, not a bug. Canada is not participating in any of this statecraft, which is technical and requires expertise and capacity. This urgently needs to change.

In closing, we cannot do developing economy strategies and expect developed economy outcomes. In Figure 23, I list examples of sovereign commercial alternatives the government can and should support to ensure that AI delivers more sovereign prosperity, security and public good. This includes sovereign compute, national digital rails and unified ledger, a sovereign ad stack and a sovereign job board.

Thank you, and I look forward to your questions.

[The Chair, Liberal, Ben Carr]

Thank you very much, Mr. Balsillie.

Ms. Dancho, the floor is yours for six minutes.

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

Thank you, Mr. Chair.

Thank you to the witnesses for your excellent testimony.

Mr. Balsillie, I have questions for you. I appreciate your considerable expertise in this area and also the evaluation of what Canada needs to do to really catch up so that we can even hope to compete in this space and ensure that we're protecting our IP for the benefit of generations.

My first question for you is a simple one. If you were to evaluate the federal government's performance over the last year on AI, what grade would you give them?

[Jim Balsillie]

I would score that it did not attend. You have to understand this is a race, and we haven't gotten out of the locker room. The only thing that I've seen is giving $240 million to a foreign company under a sovereign compute program, which is kind of like giving cigarettes out to a school health program. It's the opposite. It takes our scarce money away from this urgent objective.

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

I believe you were talking about CoreWeave and the interaction that Cohere sort of hired or did hire CoreWeave to build their data centre and operate it. Can you give us a bit more detail? What are some of the consequences to Canadian IP, if any, amongst other issues with that?

[Jim Balsillie]

That contract could have been a company maker for half a dozen great potential Canadian companies in sovereign compute, and now the wealth effects and the IP all flow to CoreWeave and its shareholders. Plus, it's governed under the U.S. CLOUD Act so that we don't have sovereignty over the data that's there. That's not inattention; that's an own goal of the most severe proportions.

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

What do you think some of the core issues are? You did outline them in your in your opening remarks, and thank you for the detailed report that you provided to the committee. There are some excellent tables and figures in here that I think are very pertinent to the AI study, especially where the issue is our lack of capitalizing on our inherent success of having some of the fathers and founders of AI.

Why do you think that the performance, in your estimation and frankly in others', has been has been so weak on AI?

[Jim Balsillie]

All the thinking is from the 1970s, and I don't say that pejoratively. It behaves differently. It behaves opposite. I gave a keynote in November, and some very senior people were there, on the future of work and so on, and I was pleading to praise the budget. I was pleading to praise this spring update, to just show some signal.

Sometimes when people have a stroke, they deny that they have a right arm. It's called an agnosia. We have agnosia on the policy of intangibles. So many very smart, thoughtful people come to me and ask what's going wrong. I just say, “They're stuck; they're blind”. No conscientious person—and I do believe there are many conscientious people—would behave like this if they were cognizant of the consequences of inattention.

I was severely disappointed in the spring economic statement. We were involved deeply prior to the budget. This trillion-dollar divergence is going to get worse. The harms are going to get worse until we update our approaches and start attending to the real battle lines of the 21st century.