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—