OTTAWA – At the Paris AI Action Summit in February, then-Prime Minister Justin Trudeau and other world leaders watched as U.S. Vice President J.D. Vance took to the stage to slam AI regulations.
Vance's speech, his face projected onto a large screen between the intricately carved columns that line the stage of the historic Grand Palais, marked the beginning of a global shift in governments' attitudes toward AI governance.
The shift hit Canada a month later, when Mark Carney replaced Trudeau as prime minister and signaled a new approach to artificial intelligence in the country.
Under Trudeau's Liberals, then-Industry Minister Francois-Philippe Champagne was able to boast that Canada could become the first country to introduce legislation to regulate AI.
However, Carney's new Artificial Intelligence Secretary, Evan Solomon, took office vowing that the government would not be “over-indexed” in regulating AI. Solomon said if the U.S. and China aren't interested in AI governance, Canada won't tackle it alone.
In less than a year, the federal government's focus has shifted from locking in AI development to pursuing the economic opportunities presented by innovative technology and expanding its adoption, particularly in federal public services.
As the year drew to a close, Mr Solomon announced new agreements on AI with Germany, the UK and the EU at the G7 Industry, Digital and Technology Ministers' Meeting in Montreal. He insisted Canada's approach has not changed despite the pro-regulation decision to sign a memorandum of understanding with Europe.
“Our position is exactly the same as it has always been,” Solomon said in an interview with The Canadian Press during a meeting earlier this month.
“What I have said from the moment I became minister is that there is a sweet spot between the EU and China's over-regulation that stifles innovation,” he said.
Hena Virkunen, executive vice-president of the European Commission for technological sovereignty, security and democracy, said humans, not machines, must be in the driver's seat as both Canada and the European Union push forward with AI development.
“It has to be based on our democratic values, and we have a human-centered approach. So I think we have very similar ideas in that respect, in terms of how we want to develop technology. That's why it's important that we work together now,” Virkunen said.
Virkkunen noted that the EU takes criticism of overregulation seriously. While he remains a strong supporter of the current approach and the AI Act, he also said he wants the policy to be implemented in a way that is innovation-friendly and eliminates red tape and bureaucracy.
In an interview with the Canadian Press, Solomon and Virkunen argued that U.S. opposition to AI regulation is nuanced and that efforts to regulate AI continue at the provincial level. But days later, US President Donald Trump signed an executive order blocking US states from regulating AI.
So how does Canada fit into the dynamic between the United States and Europe?
“Of course, I think Canada will decide in the next few months… what kind of rules they want to set,” Virkunen said.
Solomon said he plans to introduce a new privacy bill once the House returns from vacation. When Champagne was industry minister, he tabled Bill C-27, which would update Canada's private sector privacy laws and introduce new obligations for “high-impact” AI systems.
Mr. Solomon plans to reinstate the privacy portion of the bill, but not the broader AI regulatory elements.
“This is not going to be exactly the same bill as C-27, which was a much more comprehensive attempt to regulate AI,” he said.
He said the bill includes measures to protect children and combat deepfakes.
Solomon said he is considering including age restrictions in the bill for access to chatbots and the right to remove deepfakes. In an interview with The Canadian Press in early December, he declined to provide details about what would be included.
“We need some way to protect our people, and we need some way to enforce it,” he said.
Given the Trump administration's stance, “regulations are going to be harder to pass in this political environment,” said Heidi Turek, a professor of history and public policy at the University of British Columbia.
“But also, this government doesn't seem to be as focused on that because it's much more concerned with the sort of innovation part.”
Under Carney, the government has prioritized AI and “placed it within a framework that prioritizes commercial applications of AI,” Turek said.
She said there was clear focus on the composition of the “task force” Mr Solomon had put together to guide the update of the national AI strategy. The group has been accused of giving too much weight to industry voices.
Carney also emphasized pursuing “sovereign AI,” a strategy that develops and controls AI within national borders, which ties in with a focus on major projects and national infrastructure, Tourek added.
Paul Samson, director of the International Center for Governance Innovation, said Prime Minister Carney is looking at AI as a way to improve Canada's productivity.
“He needs economic growth and productivity improvements, and AI is an area that can do some of that, but it's hard to get there these days,” he said. “So I think he’s very interested in that.”
Western University professor and chief AI officer Mark Daly said it was “absolutely essential” for the government to appoint an AI minister.
Daly said the move sends a signal to the world that AI “is a priority for us,” and it also sends the right signal within Canada and the federal government.
He added that the government “deeply understands that AI and computing is the infrastructure platform for nation-building. This is the railway of the 21st century.”
But Carney has yet to invest significant public funds into his AI initiatives.
Under Prime Minister Trudeau, the 2024 budget allocated $2.4 billion for AI development. Most of the funding went toward building access to computing power and developing a sovereign AI infrastructure.
When Carney announced his first budget in fall 2025, it included $925.6 million for sovereign AI infrastructure to increase the availability of AI computing. But only a small portion of it was new money. The $800 million was raised from previously allocated funds.
Mr. Carney also spoke of building a “sovereign cloud” (a cloud computing setup that is restricted to national borders and subject to the laws of the country) in the context of advancing major national projects. Although the government has listed a sovereign cloud as one of its goals, none of the major projects announced so far have focused on building one.
It remains to be seen whether Mr. Carney's funding approach will change after Mr. Solomon's latest national AI strategy is released in the new year.
Samson said many countries would be happy to see Canada play a more active role in pursuing international AI governance, for example by banning AI from accessing nuclear weapons.
“Canada is a little hesitant to be too aggressive because of President Trump factors and big U.S. technology companies,” he said.
Samson said he has been speaking with representatives of other countries and major international organizations who would like to see more of Canada's efforts but cannot say so publicly. This includes representatives from non-G7 countries who are looking for “a slightly more active catalyst, like the G7 countries,” to start a dialogue.
“There aren't many countries that can facilitate these international conversations,” he says.
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