Canada’s AI Strategy: A Year of Progress on Transparency, Stalled on Regulation

OTTAWA, January 28, 2026 – As artificial intelligence becomes further embedded in the Canadian economy and public service, the nation’s approach to governing the technology remains a complex patchwork of voluntary measures, public transparency, and a significant legislative void. A review of 2025 reveals a year where the federal government made substantial progress on voluntary codes and opening its own AI use to public scrutiny, but failed to pass its cornerstone regulatory proposal.

Voluntary Codes & Public Transparency

In March 2025, the government announced a series of initiatives to support what it termed “responsible and safe AI adoption.” The centrepiece was the expansion of its Voluntary Code of Conduct on the Responsible Development and Management of Advanced Generative AI Systems, which gained six new major signatories, including CIBC and Intel Canada. By the end of the year, the code counted 46 signatories from the private sector.

More concretely, on November 28, 2025, the Treasury Board of Canada launched the Government of Canada’s first public AI Register. This initial version, published by the Honourable Shafqat Ali, President of the Treasury Board, provides Canadians with information on over 400 AI systems currently being explored, developed, implemented, or deployed across 42 federal institutions. The register is part of the ongoing implementation of the federal public service’s AI Strategy, which guides adoption across government.

Statistics Canada data released in June 2025 highlighted the rapid growth in business adoption. The report showed that 12.2% of Canadian businesses reported using AI to produce goods or deliver services in the second quarter of 2025, a notable increase from 6.1% in the same period a year earlier.

Key Facts & Developments from 2025

The Regulatory Void

The most significant development of the year was the legislative failure. The much-debated Artificial Intelligence and Data Act (AIDA), which was intended to be Canada’s first comprehensive federal AI law, did not survive the political turbulence and prorogation of Parliament. Its death leaves the country without a specific regulatory framework for AI, a gap that the government acknowledges creates “uncertainty for developers” and leaves the public “unprotected.”

In the absence of AIDA, the government’s primary regulatory tools remain a series of voluntary and transparency-based measures. These include the aforementioned Voluntary Code of Conduct and the AI Register. At the provincial level, only Ontario and Quebec have begun to implement specific AI guardrails for the public sector, through Bill 194 and Law 25 respectively, creating a patchwork of requirements.

Voluntary Measures vs. Regulatory Gap

The following table outlines the current state of AI governance in Canada, highlighting the progress made through voluntary initiatives and the critical gap left by the lack of formal regulation.

Frequently Asked Questions

What is the status of the proposed AI law (AIDA)?

The proposed Artificial Intelligence and Data Act (AIDA), which was part of the larger Bill C-27, is not law. It died on the Order Paper when Parliament was dissolved for the 2025 federal election. The government has not reintroduced the bill or any successor legislation.

What is the Voluntary Code of Conduct?

It is a set of six principles (Accountability, Safety, Fairness, Transparency, Human Oversight, Validity) that organisations can sign to demonstrate their commitment to the responsible development and management of advanced generative AI systems. It is a temporary, voluntary measure intended to operate until formal regulation under a new AI law is enacted.

What does the Federal AI Register show?

The register, which is publicly available on the Open Government Portal, shows that AI has been in use within the Government of Canada for decades, with systems dating as far back as 1994. The current version includes systems from early research and proof-of-concept projects to fully deployed tools supporting operations and service delivery.

What are the main criticisms of Canada’s current AI approach?

Critics, including professional associations like the Professional Institute of the Public Service of Canada (PIPSC), argue that the reliance on voluntary measures and the lack of a comprehensive, enforceable federal law creates significant risks. They point to the absence of an independent AI regulator, insufficient worker protections in collective agreements regarding AI-driven surveillance, and a continued over-reliance on foreign (particularly U.S.) AI technologies and infrastructure despite Canada’s world-leading AI research talent.

Outlook for 2026 and Beyond

The federal government has signalled that its immediate priorities remain on the “responsible adoption” track, focusing on expanding the AI Register through public consultations in 2026 and refining the voluntary code. However, pressure is mounting from industry, civil society, and provincial governments to clarify the long-term regulatory path. The government has stated that the development of a “new Canadian AI strategy” is a key priority, with consultations launched in September 2025.

For Canadian businesses and organisations, the current environment means navigating a complex landscape where demonstrating commitment through voluntary codes and public transparency is increasingly important, but where the hard rules of liability, safety, and data sovereignty remain largely undefined at the federal level.