OTTAWA — The lobby group representing Canadian scale-ups is calling for the federal government to move faster to regulate AI, but give companies more freedom to roll out less risky applications and test new ones. 

The proposals from the Council of Canadian Innovators (CCI) come as lawmakers prepare to consider AI-focused legislation. Here’s what you need to know:

The backstory: The Liberal government’s Bill C-27, introduced in June 2022, includes a new Artificial Intelligence and Data Act (AIDA), which sets requirements for anyone developing or deploying “high-impact” AI applications. Innovation, Science and Economic Development Canada will spend two years developing regulations to set the criteria for what qualifies as “high impact,” and to detail what it will require of those making and using such technologies.

Timelines and guidelines: In a report released Friday, the CCI—which represents more than 150 of the country’s highest-profile scale-ups, including leading AI firms like Ada and Coveo—called on the government to implement AIDA faster, rolling out the regulations in 12 months instead of 24. 

It’s also borrowed some ideas from the EU AI Act. One is a sliding scale that would apply fewer requirements to firms using AI for less risky purposes, like gaming, than to those building systems that make significant decisions—about personal credit, for example. Another idea borrowed from the continent: regulatory sandboxes, in which companies trying new uses for AI work with authorities to set boundaries.

The CCI is also recommending that Ottawa let industry set standards where doing so would be as effective as having government do it, and faster.

Home and away: Canada can’t have an AI industry unless people feel there are rules to uphold their rights and protect them from the technology’s harmful impacts, said Laurent Carbonneau, the CCI’s director of policy and research. 

In addition to its regulatory proposals, the CCI is also recommending Parliament appoint a new technology and science officer whose job will be to stay up to date on disruptive tech and advise lawmakers and the public on it. (Some MPs and Senators launched a study group this year with similar aims.)

The CCI wants Canada to keep its AI regulations in line with those of larger jurisdictions, such as the U.S. and EU. But Carbonneau hopes Ottawa’s rulemaking can also set some helpful precedents. “We’re creating a model that ultimately could be exported to other countries,” he said, noting that plenty of places have legal and parliamentary systems similar to Canada’s. The benefit: “Much more market access for Canadian companies.” 

The bottom line: Tech executives have expressed concern that AIDA is too vague, while digital rights advocates have said it doesn’t adequately address the technology’s harms. The CCI’s report doesn’t recommend specific changes to the bill; Carbonneau said the group is waiting for the government to propose its own amendments.

Still, regulatory uncertainty around AI risks driving promising innovators out of Canada, he said. “It’s comically easy for companies to just decide, ‘It’s too much hassle [so] we’re just going to go to the U.S. and try our luck there.’”