Industry and Technology Committee on June 1st, 2026

[The Vice-Chair, Conservative, Raquel Dancho]

Welcome to meeting number 41 of the House of Commons Standing Committee on Industry and Technology.

I will remind you that if you are using your earpiece and it's plugged in but not on your ear, please make sure to place it down on the coaster in front of you. That's to protect the hearing of our interpreters.

Pursuant to Standing Order 108(2) and the motion adopted on September 22, 2025, the committee is resuming its study of the opportunities, risks and regulation of AI in Canada's strategic industries.

With us today is an esteemed panel of guests. I'd like to welcome Barry Sookman, senior counsel, McCarthy Tétrault; Ewan Reid, founder and chief executive officer, Mission Control Space Services Inc.; and of course Brian Gallant, chief executive officer, Space Canada.

Welcome to all of you. As you know, you will each have up to five minutes for your opening remarks. Then we will proceed to rounds of questioning.

Mr. Sookman, the floor is yours for five minutes.

[Barry Sookman, Senior Counsel, McCarthy Tétrault, As an Individual]

Thank you, Madam Chair and members of the committee, for the opportunity to appear today.

I'm senior counsel with the law firm McCarthy Tétrault and a member of its technology, cyber-data and intellectual property groups. I'm also the author of several books, including an eight-volume book on computer, Internet, electronic and AI law. I've also been an adjunct professor at Osgoode Hall Law School on intellectual property.

I've been a technology lawyer for 30 years. I've negotiated hundreds of agreements. Many of these have been negotiated with the backdrop of laws and regulations that include those related to privacy and data protection, guidance from such regulators as OSFI, and AIDA, when it was being proposed. I have seen how laws governing the uses of technologies, including AI, affect the costs, willingness and timing of their deployment. This is what I want to speak about today.

First, new laws to regulate AI technologies will slow down their deployment in Canada. Organizations, both Canadian and foreign, need to assess whether these technologies will comply with Canadian law. Canada is not the most important market for technology companies that would deploy AI in Canada. Many international companies roll out their technologies by selecting jurisdictions with the greatest market potential and ease of meeting regulatory and localization requirements. Having unique Canadian requirements will slow or chill deployment of AI in Canada.

Second, the development and deployment of AI systems most frequently involve global supply chain agreements with many parties. When technologies, including AI technologies, are regulated by specific or prospective laws like AIDA, the contracting process becomes protracted, and sometimes very considerably. Sometimes—I can tell you this from experience—it just grinds to a halt when parties can't agree on allocations of risk, standards and flow-down terms. This is especially the case when the parties are not Canadian.

We need to take this realpolitik into account when deciding whether and how to regulate AI in Canada, especially given the divergence in approaches internationally. The reality is that a disproportionate amount of cutting-edge technology in AI is built in the United States. If our regulatory structure is excessively prescriptive or misaligned with other innovation-intensive jurisdictions of our trading partners, we should expect talent, capital and product deployment to migrate elsewhere. The result would not be safer AI in Canada. It would simply mean less Canadian participation in AI.

My central submission is that decisions on how AI should be regulated in Canada must recognize the need to foster and not unduly slow down or create impediments to innovation. I have some recommendations for the committee on what the principles should be, but given that I have five minutes, I won't have a chance to get into them. I will say, though, that a plethora of state laws in the United States would be useful here in Canada as well. Those would not unduly burden AI companies, because they have to comply with them in the major market anyway. If you have some questions about that, I'd be glad to go over it.

I do want to say that on the lack of trust in AI because of inadequate regulation and uptake, those are not generally correlated, as is sometimes said. Canadians and organizations worldwide have worried about AI reliability, but that has not stopped them from deploying AI. In fact, they've done so increasingly in the absence of specific legislation, including in Canada, the U.K. and the U.S. Nor is it true that AI-specific regulation necessarily produces a trust premium that spurs adoption. You can look at the European Union as a perfect example of that. A good example is also in the legal profession related to its use of AI. If the committee has any questions on that, I'd be glad to tell you about it.

Where I do think caution is warranted is in relation to the increasingly autonomous frontier systems that have the potential to create catastrophic risks, and in critical AI controlling critical infrastructure. There is legislation in some U.S. states to deal with that.

I'm not minimizing the risks of AI—

[The Vice-Chair, Conservative, Raquel Dancho]

Thank you, Mr. Sookman.

[Barry Sookman]

Because I'm going to speak about Pope Leo, I'm sure I'll get an extra 30 seconds, Madam Chair.

[The Vice-Chair, Conservative, Raquel Dancho]

Mr. Sookman, I'm so sorry to interrupt, but we do have to stick a little bit close to the timeline today because we were unfortunately delayed for votes. However, I'm confident that one of the esteemed members here will provide a little bit of time to finish, if that's all right with you.

We'll go to Mr. Reid for five minutes.

Go ahead.

[Ewan Reid, Founder and Chief Executive Officer, Mission Control Space Services Inc.]

Thank you, Madam Chair, for the opportunity to appear before this committee.

I'm Ewan Reid, founder and CEO of Mission Control.

Mission Control is a 100% Canadian-owned, 11-year-old start-up headquartered here in Ottawa that develops intelligent space systems. We are among the world leaders in deploying AI on spacecraft.

In 2023, we became the first organization in the world to send a deep-learning AI to the moon. Later that year, we deployed AI in a European Space Agency earth observation satellite. Last year, we launched Mission Persistence, Canada's giant leap for AI in space. Persistence is a year-long demonstration of using deep learning at the edge on the spacecraft itself to downlink actionable insights, instead of spending millions to send raw data.

Currently, we're under contract with the Canadian Space Agency to develop the technology to use AI on the spacecraft to detect the location and direction of an active wildfire from orbit. We're also a prime contractor on what could be Canada's next flagship space program for the development of a lunar utility rover, leading a consortia of companies from across Canada. This rover will have to survive and operate on its own on the moon, requiring a vast amount of onboard autonomy.

While Mission Control is a leader in AI, it is important for me to stress that the type of physical AI we develop is fundamentally different from what most people think about when they think of AI. Unlike large language models, which consume enormous amounts of power and train with datasets as vast as the Internet, our deep-learning models are specifically designed to operate on the type of very limited computing platforms that can be sent to operate in space.

The deep technical problem that my company solves is enabling the use of AI when computing power is limited. I'm not talking about server farms in space. I'm talking about relatively small spacecraft, incredibly far away or moving incredibly fast. Physics imposes limits on data transmission: constrained bandwidth and high latency. With spacecraft sensors increasingly designed to generate more and more data, onboard intelligence is key to unlocking the most from space missions.

Training data for algorithms and space applications is also very hard to come by. In the case of operating on the moon, we simply don't have tens of thousands of images of the lunar surface to train a model. That's why we built a 4,000 square-foot moon yard right here in the nation's capital and captured thousands of images to create our own proprietary dataset before we sent AI to the moon.

Like Canada's water and minerals, Canadian data is a key national resource that must be protected and stewarded to realize benefits for Canadians and to prevent abuse by bad actors. The world's largest AI chatbot companies are foreign entities, but so are the companies that provide the services and infrastructure that this AI relies on, companies such as Amazon Web Services and Nvidia. It creates risks for Canadian companies and Canadians when they are forced to rely on foreign entities to provide key services.

For example, our company's AI workflow was recently disrupted when OpenAI bought a company that was key to providing AI training services for our models. Even though our models are trained exclusively in Canada and we maintain ownership of all the training data, we had no say and no recourse when OpenAI shuttered the service we were using.

In upcoming regulation and procurement, Canada should preference fully Canadian-owned AI solutions and provide tools and support to companies, universities and individuals to rigorously defend their IP and copyrights against foreign entities, particularly those that use them to train AI models. Here, the Remote Sensing Space Systems Act, used to regulate data generated by space systems that perform earth observation, may serve as a guide. Incidentally, this act is due to be reformed, and the use of AI on board spacecraft to parse data should be taken into account.

Any AI company, but in particular a foreign AI company, should be regulated and required by its regulator to produce training data, training logs and proof that sensitive Canadian data is maintained on servers in Canada. Canada does world-leading work when we pick specific areas where we want to excel. Examples in space include space robotics and synthetic aperture radar.

Rather than trying to replicate successes elsewhere, focusing on physical AI, AI that interacts directly with sensors and robotics, is key to unlocking the benefits of this technology for globally competitive manufacturing, serving remote Arctic communities and responding to the effects of climate change. Canada's next billion-dollar space exploration mission with a lunar utility vehicle, is an excellent north star under which to advance these technologies, inspire Canadians and reap the benefits in terrestrial sectors.

[The Vice-Chair, Conservative, Raquel Dancho]

Thank you, Mr. Reid. There are three seconds to spare. Well done.

Mr. Gallant, you're up for five minutes.

[Brian Gallant, Chief Executive Officer, Space Canada]

Thank you, Madam Chair.

It's an honour to appear before this committee for your study on the opportunities, risks and regulation of artificial intelligence in Canada's strategic industries. Thank you for the invitation.

Space Canada represents over 100 Canadian space innovators. Collectively, these organizations play a key role to protect the environment and the fight against climate change, bridge the digital divide, human capacity to explore beyond our planet and to protect Canada's security and sovereignty while representing a huge economic opportunity.

Given all that and since space systems and solutions are a critical part of Canada's defence strategy, contributing directly and indirectly to virtually all defence operations, the space industry is certainly a strategic industry.

Some say a sign of wisdom is when a person knows what they don't know. I don't know if I know that, so I will be relying heavily on suggestions and comments from members of Space Canada. There are many thoughts for each of the sections established by the framing of your study, and I look forward to sharing those insights with you today.

I would therefore like to start with a few general remarks.

Canada is in a moment. Like many other countries, we are trying to figure out how to deal with some complex and massively impactful trends, most of which will be made more complicated by the rise of AI. AI can exacerbate the challenges stemming from a changing geopolitical landscape. It can displace workers and place more wealth in the hands of a few. It can create extra pressures on our environment, and it can further divide people through misinformation and disinformation. The work you are doing is important, and I thank you.

I submit that Canada's lagging productivity is one of the economic data points we should all collectively be seized with here in Canada, given the strong correlation between the productivity of a country's economy and that country's standard of living.

There are a few explanation for Canada's productivity challenges. I have a sense that people in this room would have their thoughts on that, and I'll leave that debate to you. One of the reasons, however, that is relevant to your study is that Canada needs to do a better job of adopting innovative technologies. This, to me, is one of the reasons the responsible adoption of AI will be important to Canada's economy, prosperity and standard of living moving forward.

That said, Space Canada members emphasize that successful adoption of AI will require safeguards, trust, digital modernization, international collaboration and the right governmental support and intervention. De-risking the adoption of AI is an important role for the government to play.

Space Canada members consistently frame data protection as a broader issue of national sovereignty and stress the need for trusted Canadian AI infrastructure, sovereign data processing and validated Canadian datasets. We also need stronger safeguards to reduce dependence on foreign-controlled systems and to mitigate risks to Canadian strategic, economic and security interests.

Space Canada members agree that Canada possesses world-class AI research capacity, talent and emerging industrial strength, including in the space sector. However, our country continues to struggle with commercialization, scale-up, infrastructure access and retaining companies' talent and IP domestically. Our members emphasize that Canada's opportunities lie in enabling widespread industrial adoption, sovereign infrastructure, collaborative ecosystems, workforce readiness and the growth of globally competitive Canadian AI firms rooted in strategic sectors, space being one of them.

Many members of our organization emphasized that regulation should focus more heavily on data governance, infrastructure integrity, transparency and interoperability with allied frameworks. They stressed the importance of transparency around all training datasets, potential compensation mechanisms for creators, protection of Canadian intellectual property and strategic data, and safeguards against unauthorized foreign access to valuable Canadian research, industry and government information.

Space Canada members acknowledged positive federal initiatives, such as the defence industrial strategy and Canada's increasing investments in AI research, while some members called for a more coordinated national approach that aligns AI policy with broader industrial, defence, space, productivity and economic resilience objectives.

I look forward to chatting with you about all of these concepts and themes throughout the session.

[The Vice-Chair, Conservative, Raquel Dancho]

Thank you, Mr. Gallant.

Thank you for the excellent opening remarks, from each of you.

We'll now go to questioning.

Mr. Falk will start us off for six minutes, please.

[Ted Falk, Conservative, Provencher, MB]

Thank you, Madam Chair.

Thank you to all of our witnesses for coming to committee today. I'm sure you're going to contribute to our study here.

Mr. Sookman, I would like to begin with you. During the Liberals' last attempt at presenting AI legislation, Bill C-27, you were quite critical.

Can you name the specific items you found most egregious in that legislation?

[Barry Sookman]

Yes. Thank you very much for that question.

The prior Liberal bill was introduced without consultation and without input from the general public. It had a structure that had concentrated all the regulatory authority within just one ministry—industry. It didn't recognize that, in fact, AI is like electricity, microchips and other technologies that are pervasive throughout the economy.

As such, it tried to regulate the technology as opposed to regulating the uses. If you're regulating uses, Health Canada might deal with AI and health, OSFI might deal with AI and financial institutions and there may be certain cases where there wasn't one particular department that would have been useful, but that wasn't the approach that they took. They tried to model it on just an outline of a bill with everything being left to regulation, which in my view undermined the importance of Parliament making a decision about AI policy. It would have been all in the hands of the people who were promoting regulation. In my view, this was not the appropriate model.

I had looked to the U.K. at the time, which had a decentralized model with a centralized coordination structure. I think that's a much better model for AI legislation. Bill C-27 created uncertainty because nobody knew what exactly was going to be regulated.

[Ted Falk, Conservative, Provencher, MB]

I believe you said, back in 2024, that the wisest choice for Canada would be to take a wait-and-see approach and to look at some of the countries that are leaders in this field, like United States and the U.K.

From your observations in the last year, or even the past six months, which jurisdictions do you think are at the top of the game?

[Barry Sookman]

It all depends on what you mean by “the top of the game”. It all depends on what the priorities are with respect to national policy.

Federally, the U.S. has a policy of “hands off”. That's because they're extremely concerned about their geopolitical competitors, including China and Russia. They absolutely don't want to jeopardize national security by falling behind.

We may not be in that position, but that is the greatest market for Canadian innovators. The U.K. has taken a similar approach. I think the U.K. model is a good one. My view has not changed. In fact, my view, particularly looking at the G7, is that the best approach for Parliament right now is to have policies that promote innovation, which this government is actually doing right now or trying to do, rather than to introduce an AI bill when there still is not consensus on what the model can be. There are specific areas where there are specific harms, and it wouldn't unduly affect innovation.

I think the government should pick and choose in the way U.S. states have done for things like protecting children online, imposing transparency requirements in certain cases and dealing with critical potential catastrophes. I think that's the right approach.

[Ted Falk, Conservative, Provencher, MB]

Thank you very much.

Mr. Reid, your company has received considerable amounts of public funds.

What kinds of guarantees or parameters need to be in place for companies to protect Canadian IP and Canadian talent, after having received substantial funds from the Canadian public?

[Ewan Reid]

I think many requirements are in place right now to protect that.

In fact, in the majority of funding that we would have had through contributions from the Canadian Space Agency, as an example, there are clauses that are to some degree—I'll be honest—to my chagrin, stating that if we were to change ownership percentages of our company by a certain amount, I would need the approval of the agency. The reason they're there is to protect the investment and make sure that this intellectual property doesn't go to the wrong jurisdictions internationally.

Incidentally, to my mind, it can impose a constraint, because we are now somewhat limited in future fundraising and other changes to our equity structure, but some of those requirements are in place already to protect intellectual property.

[Ted Falk, Conservative, Provencher, MB]

Do you think they're adequate? Do you think the government should have ownership stakes in the companies it provides significant funding to? I think your company has received $10 million, roughly.

[The Vice-Chair, Conservative, Raquel Dancho]

Just give a brief response. That's all we have time for.

[Ewan Reid]

I would like to see a model where the Canadian government explores having equity stakes in companies, yes.

[The Vice-Chair, Conservative, Raquel Dancho]

Thank you very much, Mr. Falk.

We'll go to Mr. Bains for six minutes.

[Parm Bains, Liberal, Richmond East—Steveston, BC]

Thank you, Madam Chair.

Thank you to the witnesses for joining us today on this important study.

My hometown of Richmond, British Columbia, is also home to MDA Space. We know that's one of Canada's most advanced space companies.

I'll begin with Mr. Gallant first, if I could.

How is AI fundamentally changing the economics and capabilities of the space sector today?

[Brian Gallant]

Thank you very much for the question, and thank you for acknowledging one of the companies in your community. I'm certain that there are others around this table who have companies that are space-related or space-adjacent in their communities or provinces.

For us, what's incredibly important is the idea that we're going to have physical assets with AI. We're going to have language-model types of AI companies. We certainly want to make the distinction that my esteemed colleague here made in his opening remarks—the important points around some of those differences. For us, what's going to be incredibly important is this committee recognizing those differences and recognizing that the accelerated rise of AI will have different challenges presented, given which fear they fall under. Of course, the opportunities will be different. I'm not a technical expert by any stretch of the imagination, but one thing I suggest to my other esteemed colleague is that consultation is going to be incredibly important.

I can't thank you enough for inviting me and all the panellists to discuss this with you. I would certainly encourage the government, through the House of Commons, committees and different departments, to continue that dialogue. I think one thing we can all recognize is that AI will exponentially change things as we move forward. It's about being in lockstep with industry, academia and researchers. We represent all of these, as an organization. It will be crucial for us to be as nimble as possible to ensure that we're reacting appropriately.

I'm happy to be here. I'll go out on a limb and say that I'm happy to continue the dialogue for many months to come.

[Parm Bains, Liberal, Richmond East—Steveston, BC]

Thank you for that.

We can look at the global picture of AI and how we compare, as a country, with others in the space domain—the strengths and gaps we may have. Could you talk about whether we're trending the right way, or about the gaps?

[Brian Gallant]

If you'll allow it, I'm going to put a different hat on here and not necessarily speak as a Space Canada representative but as a Canadian watching this and watching the important work you're all doing.

One thing I feel is, from the outside, that we have incredible AI researchers and thought leaders here in Canada. By extension, we have incredible institutions that can support everything we want to do with AI in this country as well. I feel very lucky that Canada has those foundations.

At the same time, I think we're a little timid about it. Hopefully, the hearings here will help us galvanize, as a country, and take the actions we need to, whether it's to try to enable the adoption of AI in order to increase productivity in our economy, as I mentioned, or to ensure that we're putting in the appropriate safeguards. I am a little worried that we're sitting around a bit more than other countries—if I'm being honest—but I reserve lots of hope based on the work you're doing. Having these consultations might help us propel and make the right investments, the right policy choices and, of course, the right safeguards framework to help ensure that AI adoption in Canada is a positive story—that we're able to reap the benefits and mitigate the challenges it could represent.

[Parm Bains, Liberal, Richmond East—Steveston, BC]

Thank you.

I have a quick question for Mr. Reid.

You had the deployment of MoonNet. What did you learn from its deployment in lunar orbit that surprised you or changed your approach to space AI?

Madam Chair, I'm going to share some of my time with Mr. Bardeesy afterwards, if—

[The Vice-Chair, Conservative, Raquel Dancho]

You have a minute and a half.