On January 6, 2025, when Parliament was prorogued and Canada’s Artificial Intelligence and Data Act (AIDA) died on the order paper after two years of painstaking work, it felt like a catastrophe. Critics called it a regulatory failure. Policy experts worried about Canada falling behind in the global AI race. The timing couldn’t have been worse—or so it seemed.
Let’s break it down with some help from AI:
- The original AIDA (as part of Bill C-27) = over two years of work, consultation, and policy prep
- January 6, 2025: Parliament prorogued, killing AIDA mid-review just before final amendments
- Happy accident?
Reset Moment
- But then March 14, 2025 happened. Mark Carney became Prime Minister, and instead of rushing to revive AIDA as-is, his government announced they wouldn’t. They were starting fresh. A clean slate. A reset.
Learning from the EU’s Growing Pains
- While Canada was dealing with political transition, the European Union was wrestling with the real-world implementation of their groundbreaking AI Act. Meta and Google won’t sign off on the practical guidelines for compliance with EU AI Act, and some of the most prominent artificial intelligence models are falling short of European regulations in key areas such as cybersecurity resilience and discriminatory output.
Canada had a front-row seat to watch how comprehensive AI regulation works in practice—the compliance challenges, the industry pushback, the implementation hurdles. Maybe we could learn from the EU’s test run without having to endure the growing pains ourselves.
The American Chaos Machine
Meanwhile, south of the border, the United States was charting a completely different course. On January 23, 2025, President Trump issued a new Executive Order titled “Removing Barriers to American Leadership in Artificial Intelligence,” which replaces President Biden’s Executive Order and signals a significant shift away from oversight, risk mitigation and equity toward a framework centered on deregulation.
By February, the Trump administration’s approach became even more clear. US Vice President JD Vance told heads of state and CEOs gathered in Paris that “excessive regulation of the AI sector could kill a transformative industry just as it’s taking off” and directly criticized the EU AI Act.
The Americans weren’t just deregulating—they were actively opposing international cooperation on AI safety. The US was noticeably absent from an international document signed by more than 60 nations, including China, making the Trump administration the glaring outlier in a global pledge to promote responsible AI development.
Innovation freedom, yes—but at what cost? The volatility was making long-time allies nervous about relying on U.S. leadership for setting global standards.
The World Realigns
- Trump’s volatility didn’t just create instability—it created opportunity
- Long-time allies aren’t waiting on U.S. leadership anymore
- June 23, 2025: Canada and the EU announced a major pact on defence, digital trust, AI regulation, and secure supply chains
The Strategic Advantage of Perfect Timing
Whether AIDA’s death was a happy accident or strategic masterstroke may never be fully known. But the outcome is undeniable: Canada now has the luxury that’s rarest in AI policy—time used wisely.
While the U.S. prioritizes rapid deregulation and the EU works through implementation challenges, Canada is positioned to create what could become the gold standard for AI governance: comprehensive but workable, protective but innovation-friendly, internationally aligned but practically effective.
The Trump administration’s criticism that “excessive regulation of the AI sector could kill a transformative industry” isn’t entirely wrong—but neither is the EU’s approach to ensuring AI systems are trustworthy and safe. Canada has the opportunity to find the sweet spot.
What Canadian Business Leaders Need to Know Now
The window for preparation is closing. While the exact details of Canada’s new AI framework remain to be seen, the direction is clear: we’re aligning with international standards that prioritize safety and transparency.
Start preparing now by:
- Understanding EU AI Act principles – even if our final rules differ, the fundamental risk-based approach will likely be similar
- Auditing your current AI applications – categorize them by risk level and impact
- Building transparency into your AI systems – documentation and explainability will be crucial
- Establishing governance frameworks – the companies that succeed will be those with strong AI oversight processes
The businesses that view this transition as an opportunity rather than a burden will be the ones that thrive in Canada’s new AI landscape.
The Reset Advantage
In chess, sometimes losing a piece sets you up for a much stronger position. Canada’s AIDA “failure” may have been exactly that kind of move—a sacrifice that positioned us perfectly for the next phase of the game.
