Science and Research Committee on Feb. 12th, 2026

[Maxime Blanchette-Joncas, Bloc, Rimouski—La Matapédia, QC]

You just said some very important things. There's uncertainty, gaps and no oversight.

The government tells us that AI could help people. In your opinion, who stands to benefit from this uncertainty and lack of oversight?

[Jim Hinton]

We'll see job losses with AI as people replace somebody making, let's say, $50,000 or $100,000 per year with an AI system that costs $25,000 or $50,000. That $25,000 or $50,000 goes to those who own AI. Canada does not own AI, so we replace a Canadian worker with an AI system. AI adoption is a folly if we don't own the AI technology. We push AI adoption, but then, because we don't own the technology, we're replacing the worker with a digital system where the profits are maximized outside of the country. That's why we're going to become a developing nation.

[Maxime Blanchette-Joncas, Bloc, Rimouski—La Matapédia, QC]

Let's look at what's happening elsewhere. Do international best practices recommend a clear separation between economically promoting AI and regulating it? I'm asking you, because right now the minister can do anything. He's attracting investors and regulating legislation, but you're telling me there's already a shortage.

Based on your expertise, what do international best practices tell us?

[Jim Hinton]

We don't.... I'm not defeatist. We can do well. I look to South Korea as a great example. I look to the Nordic countries as other strong examples. We can make our own sovereign systems, but at the core we have to have Canadian firms that we can control and that we can govern.

It's like me telling you what you can do with your backyard pool. Google's not going to have ethical AI or unbiased AI if we tell it to. What happened with the digital sales tax? That didn't work. The Online News Act.... We can't regulate these digital systems that we don't own or control. We have to build Canadian domestic firms that we can use to advance our Canadian values. Then, once we have those, there's a huge market globally for them.

[The Chair, Liberal, Salma Zahid]

Mr. Hinton, the time is up for MP Blanchette-Joncas.

We will start our second round of questioning, and we will go to MP Mahal for five minutes.

Please go ahead, MP Mahal.

[Jagsharan Singh Mahal, Conservative, Edmonton Southeast, AB]

Thank you, Madam Chair.

Thank you to all the witnesses who came to testify before this committee. I'm going to start with Mr. Hinton.

AI systems are increasingly trained on massive datasets that often include copyrighted books, music, images and news, frequently without the consent of or compensation to the creators. Canada still lacks a clear legal framework on whether that constitutes copyright infringement.

From your perspective as an IP lawyer, how exposed are the creators right now? Why has the Liberal government failed to provide certainty for artists, journalists, rights holders, etc.?

[Jim Hinton]

There's no update on what happened. There were consultations that took place years ago, and there's really no result from those consultations.

Inaction means that Canadian creators and global creators under copyright systems are having their data scraped, taken and then appropriated and value-extracted for those large AI companies, predominantly foreign companies. It's an economic choice to use Canada's economy to extract value. That really is because I think we have captured systems here that would prefer to advance U.S. interests—they have those big AI systems—over Canadian interests.

[Jagsharan Singh Mahal, Conservative, Edmonton Southeast, AB]

Thank you.

There's a growing confusion around who owns AI-generated outputs, whether it's code, images or written content. That uncertainty makes it harder for Canadian start-ups to commercialize their products or attract investments.

Does Canada's current IP regime give businesses and innovators the clarity they need, or is Ottawa leaving Canadian firms at a disadvantage compared to the U.S. and other competitors?

[Jim Hinton]

There is no clarity around that from a copyright perspective in Canada and also from a patentable subject matter perspective in Canada. What is patentable? What is not? What is protectable? What is not? Canadian firms are left to the international rules. We're taking what the U.S. patent office says, what the U.S. says, about copyrighted works and AI-generated works. Instead of setting a standard that the globe can adopt and that advances our economic position and our national security positions, we're basically ceding that to the U.S., to China and to other jurisdictions.

[Jagsharan Singh Mahal, Conservative, Edmonton Southeast, AB]

That seems like a gross act of failure on the part of the government.

We heard from Dr. Creutzberg as well that there is a legal ambiguity when it comes to AI retention. We can talk about the lack of having parallel legislation to the U.S. CLOUD Act and other parallel or friendly legislation in regard to property rights, etc.

What are your recommendations for steps that we as government need to take to ensure that we have that parallel legislation, so that Canadian data is protected, Canadian integrity is protected and taxpayer dollars are spent in the right direction?

[Jim Hinton]

First, we need to have that capacity. We need to build sovereign capacity, and then we need to switch over to that sovereign capacity.

From a legislative perspective, we need to build the guardrails that we need to have for our innovation and data-driven economy. We need to have some say, participation and leadership on all of the harms that we're seeing come out of AI. It's across the board, whether it's health, financial, online harms or the rest of it. We need to move swiftly with that based on global standards.

[Jagsharan Singh Mahal, Conservative, Edmonton Southeast, AB]

Earlier in your testimony you mentioned that there have been hundreds of thousands of IP patents issued globally. Can you shine a light on how many we have generated as a country?

[Jim Hinton]

Canada owns about 12,000 of those 2.7-plus million AI patents. We're an insignificant and decreasingly significant player in that area.

[Jagsharan Singh Mahal, Conservative, Edmonton Southeast, AB]

What do you think is the reason behind the contradiction that when it comes to the researchers and innovators, we have the best talent in the world, but when it comes to patent security and generation, we lag so far behind?

[Jim Hinton]

In the fall budget, we said we're going to put $1.7 billion into attracting foreign researchers to Canada. There are no guardrails on who gets the benefit of that research. If you don't say upstream, “Look, we need to make sure we capture these economic benefits”, then we won't get the economic benefits. We don't govern. We don't have any pieces in place to make sure that the outputs of Canadian-funded research end up benefiting Canada.

[The Chair, Liberal, Salma Zahid]

I'm sorry for interrupting. The time is up for MP Mahal.

We will now proceed to MP Rana for five minutes.

Please go ahead, MP Rana.

[Aslam Rana, Liberal, Hamilton Centre, ON]

Thank you, Madam Chair.

Thank you to all the witnesses.

Mr. Hinton, what are a few changes this government could implement to make it easier for Canadian universities and research centres to scale AI IP in Canada?

[Jim Hinton]

It is this industry and university collaboration that needs to happen. Right now there's a big deficit of trust with Canadian firms and Canadian universities. The advice that I give to companies I'm working with that are looking to collaborate with Canadian universities and Canadian companies is, “Don't do it. It's going to lead to problems down the road.”

Right now, if you're a small Canadian start-up company and you work with the university, as soon as you get validation, the university will push you aside and look for some U.S. firm to get a $1-million or $2-million funding program. Then, basically all of the work that you've done as a Canadian firm to advance this technology gets swooped up by this large international firm. You're giving your competitive advantage to the university, which then goes and leverages that to work with a foreign firm.

[Aslam Rana, Liberal, Hamilton Centre, ON]

If the federal government enforces strict expectations and regulations on funding this research, do you foresee any difficulties or trade-offs?

[Jim Hinton]

We look to the U.S. and the Bayh-Dole Act. They have explicit provisions to make sure that the U.S. benefits economically from it. We see this in other jurisdictions, like Finland, that say they need to make sure they have the economic benefit. Other jurisdictions put these rules in place, and we should do the same. We're not going to lose researchers. We're going to increase our competitiveness with other jurisdictions.

[Aslam Rana, Liberal, Hamilton Centre, ON]

Thank you.

How are the current R and D support programs, such as the scientific research and experimental development tax incentives and the industrial research assistance program, helping to alleviate challenges for Canadian AI firms. What do you suggest?

[Jim Hinton]

There was a SR and ED review ongoing. I don't know what happened to that. That was a year or so ago. We need to see what happens. We need to augment SR and ED to make sure that Canadian firms benefit. As I said before, more than half of it goes to foreign firms, so we need to have that corrected.

There's a disproportionality. There are great programs like ElevateIP, the Innovation Asset Collective and IP Ontario, for example—publicly funded ones—and they received renewed funding in the fall. They're subscale, though. We put $57 billion into battery branch plants and then $50 million over five years. You spent more on scaffolding for this building here than we did on intellectual property.

[Aslam Rana, Liberal, Hamilton Centre, ON]

Are there countries that do a better job than Canada of retaining publicly funded IP that Canada should study and adopt...?

[Jim Hinton]

The Americans do it very well. China does it very well, and we can adopt things from them. However, small, open economies like South Korea do it extremely well. I have a Samsung phone. We have a Hyundai hybrid vehicle. There's no reason. This small Korean country does so well at innovation, so we can do the same thing.

We have strategic resources and energy resources, and our talent is fantastic. We need to take that foundation, in critical minerals, for example, and then build that in and capitalize on that.

[Aslam Rana, Liberal, Hamilton Centre, ON]

Thank you.

Dr. Creutzberg, how attractive is Canada to international researchers? What steps could we take to attract talented researchers to Canada?