“Light, tight, right” regulation: Minister Evan Solomon unpacks how Canada plans to support domestic AI and quantum computing

Solomon says Canada must keep quantum industry and IP in Canada at CDL Super Session talk.

During a private CEO lunch yesterday at Creative Destruction Lab (CDL) Super Session, Minister of Artificial Intelligence (AI) and Digital Innovation Evan Solomon said the Government of Canada plans to provide more targeted support to the country’s AI and quantum computing companies.

“We can’t run a sprinkler system on innovation,” Solomon argued, eliciting applause from a room full of Canadian technology leaders. “We need to be competitive on the world stage.” To do that, Solomon said Canada needs to “champion” its AI winners and help them grow.

“AI is not fashion. It is not FOMO. It is a necessity to grow.”

At Toronto Tech Week, Solomon has been sharing more insight into how the Liberals plan to regulate and support the country’s AI and quantum sectors. He unpacked that vision in greater detail at CDL and in a follow-up interview with BetaKit.

Solomon’s tour continued today. At MaRS Discovery District, he announced that applications for the $300-million CAD AI Compute Access Fund (part of the $2-billion package the previous Liberal government committed to expanding Canadian businesses’ access to AI computing power) are now open. At the Vector Institute, Solomon disclosed that the feds are investing $3.5 million to help Vector deliver a healthcare AI initiative that will provide startups and scaleups with training, mentorship, and other support.

Scaling Canada’s AI winners is just one of Solomon’s priorities. Some of the other items on his to-do list include boosting AI adoption, increasing trust, building sovereign data centres to power the tech, and figuring out how best to regulate it.

“We shouldn’t abandon risk mitigation … but we have to also not choke off our innovators and make sure that you have a framework to innovate,” Solomon told CDL CEO lunch attendees, echoing his recent remarks expressing concern about overdoing regulation.

As to what that might look like, Solomon told BetaKit that Canada’s current Liberal government is not planning to revive the previously proposed Artificial Intelligence and Data Act (AIDA), introduced as part of Bill C-27, but said the feds are considering which aspects of AIDA to carry forward as they develop an updated regulatory framework for AI.

“We are not going to just repeat what happened,” Solomon said, stressing that Canada needs “light, tight, [and] right” AI regulation going forward.

Solomon confirmed to BetaKit that this framework will include rules as to how copyright will apply to AI. He said “the principle of protecting our cultural sovereignty and our cultural creators” is “foundational” to this government.

RELATED: AI minister Evan Solomon wary of overdoing regulation but says Bill C-27 “not gone”

Speaking more generally about why Canada needs to retain its intellectual property (IP) during his remarks at CDL, Solomon described losing IP as like “giving away oil,” adding that Canada doesn’t want to be the  “farm system to other countries.”

On the AI copyright front, Solomon told BetaKit the feds are waiting to see how ongoing legal matters associated with this conclude before making any final decisions. “The big issue for us is these court cases have to play out so we can figure out what the market signal on compensation might be, and so we want to be in step with that,” he said.

In light of the United States (US) Department of Defense’s Quantum Benchmarking Initiative program and the threat of losing quantum companies to the US, Solomon confirmed that Ottawa also plans to introduce new policies to help keep these firms in Canada.

“A matter of national priority for us is making sure that our robust and global-leading quantum industries remain robust and Canadian, including the IP, the headquarters, and the innovation,” he said. “We are working on a process to make sure that happens.”

Solomon expects that part of Canada’s increased defence spending will go towards supporting Canadian AI and quantum computing companies developing dual-use technologies. He argued to BetaKit that sovereign computing capacity and data, and cybersecurity, quantum, and AI capabilities are “not just an economic imperative, but a national security imperative as well.”

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“The idea that our ramp up in defence spending will include, and must include, dual-use of civilian and defence capabilities from our industry, with … Canadian innovation, Canadian companies, is essential,” he said.

Solomon told CDL attendees that Canada’s increased defence spending commitment offers the country a chance to do what the US does—use procurement and its “national security as a form of industrial policy” to drive domestic innovation.

At the CDL event, Solomon argued that Canada is “at a hinge moment in history” featuring both significant geopolitical disruption and “an extraordinary technological paradigm shift” as AI and quantum reorient the world. “This has presented us with a crisis and an opportunity,” he said.

“AI is not fashion,” Solomon added. “It is not FOMO. It is a necessity to grow.”

“It’s very difficult to make every part of that [AI] stack Canadian.”

Evan Solomon,
AI minister

Solomon noted that Canada has a trust deficit at the moment when it comes to AI, and needs to drive greater adoption, arguing that the country’s economic productivity is at stake. He reiterated that the feds plan to help with this in multiple ways, including by introducing a 20 percent tax credit to encourage small and medium-sized businesses adopting the tech.

But even with this urgent emphasis on sovereignty, Solomon told BetaKit he anticipates that Canada will need to work with foreign companies and partner with other countries to secure the capital required to build out its AI sector. “You don’t take all your toys and go home alone,” he said, indicating that Canada is taking “a pragmatic view” to building AI sovereignty, and “sovereignty does not mean solitude.”

“It’s very difficult to make every part of that [AI] stack Canadian,” Solomon added, noting that this is part of the reason why Canada has been partnering with other countries, including France, the United Kingdom, and Germany. 

Solomon emphasized that Canada is open to more international AI partnerships and investment, including from American firms—provided they come with the right protections.

“We do have to do it on terms that make sure that we guard Canadian-headquartered companies, Canadian innovation, Canadian jobs, using Canadian equipment, and [use] those partnerships to scale the capabilities of our industry and our champions,” he said.

Feature image courtesy Creative Destruction Lab.