June 17, 2022 - Private Sector

New Federal AI Framework Introduced

New Federal AI Framework Introduced

The Federal government introduced Bill C-27 yesterday. In addition to setting out a new privacy legislative framework, Bill C-27 would enact the Artificial Intelligence and Data Act, the first law in Canada regulating the creation and use of artificial intelligence systems. The Act would create potentially severe penalties for non-compliance.

Key elements of the proposed framework for regulating AI systems include:

  • A mandatory assessment to determine whether an artificial intelligence system is a high-impact system, a term that will be defined in the regulations. 

  • A requirement to mitigate the risks of harm or biased output from the use of a high-impact system. 

  • An obligation to publish a description of a high-impact system, together with an explanation of the intended use, types of content that it is intended to generate, the decisions, recommendations or predictions that it is intended to make, and risk mitigation measures. 

  • A self-reporting requirement if the use of a high-impact system results or is likely to result in material harm. 

  • Rules governing the processing or use of anonymized data

  • Ministerial powers to order production of records, conduct an audit, publish warnings and cease use or distribution.

  • The appointment of an Artificial Intelligence and Data Commissioner to assist in the administration and enforcement of the Act. 

The new Artificial Intelligence and Data Act would also introduce significant fines for non-compliance:

  • Administrative monetary penalties to be set out in regulations;

  • Penaltiefor contraventions of the Act, up to 3% of global revenue or $10 million CAD; and

  • Penalties up to 5% of global revenue or $25 million CAD – or imprisonment, in the case of an individual – for more serious offences, including:

    • Possessing or using personal information obtained through criminal or other unlawful means for the purposes of creating an AI system,

    • Using an AI system knowing (or being reckless as to whether) the system is likely to cause serious or psychological harm or substantial damage to property, and

    • Using an AI system with intent to defraud the public and cause economic loss, if such loss occurs.


Special Monthly Call:

  • Join us for a special 1-hour AccessPrivacy Webinar next Wednesday, June 22 at 11:30 a.m. EST for an initial commentary on key features of the proposed new federal privacy and AI rules, as well as the proposed critical infrastructure cyber security act. Please register for free on the event page.
  • Additionally, the AccessPrivacy team is working to provide our Knowledge Portal subscribers with a suite of resources considering the impact of the new legislation. In our Legislative Reform Portal, you can access detailed analyses of the 2020 iteration of the federal privacy Bill (C-11), as well as all provincial privacy legislative reform activity.