Canada: Legislative Update: Minister Of Innovation, Science And Industry Releases Proposed Amendments To Bill C-27 Regarding Artificial Intelligence And Privacy Laws

On September 26, 2023, François-Philippe Champagne, Minister of Innovation, Science and Industry (the "Minister") appeared before the federal Standing Committee on Industry and Technology ("INDU") where he proposed substantive amendments to Bill C-27, the Digital Charter Implementation Act, 2022 ("Bill C-27") to respond to stakeholder and parliamentarian concerns. INDU passed a motion for the Minister to provide his proposed amendments in writing so that they could be studied by INDU. On October 3, 2023, the Minister sent a letter to the Chair of INDU containing the substantive proposed amendments in response this motion.¹

Background

Bill C-27 proposes reforms to Canada's federal privacy laws by introducing the Consumer Privacy Protection Act (the "CPPA"), the Personal Information and Data Protection Tribunal Act ("PIDPTA") and introduces Canada's first legislative framework for the regulation of artificial intelligence ("AI"): the Artificial Intelligence and Data Act (the "AIDA"). For more information on Bill C-27, please refer to our articles, Proposed Privacy Bill Introduces Fines and New Requirements for Private Organizations and Canada's First AI Act Proposed.

The Minister's Proposed Amendments

The Minister proposed that the CPPA would be amended to (1) establish privacy as a fundamental right for Canadians in the Purpose clause of the CPPA, and (2) further reinforce the protection of children's privacy by requiring organizations to consider the special interests of minors when determining the purposes for which they use personal information. Moreover, the Minister also proposed that the Office of the Privacy Commissioner of Canada ("OPC") enter into compliance agreements with organizations that would have financial considerations. This would enable the OPC to issue financial penalties outside of the Personal Information and Data Protection Tribunal.

In regard to Québec's Act Respecting the Protection of Personal Information in the Private Sector ("Law 25"), the Minister affirmed that such law would likely be deemed as "substantially similar" to the CPPA, as it has been under the Personal Information Protection and Electronic Documents Act. As such, entities in Québec should comply with the obligations under Law 25 rather than the CPPA and PIDPTA when enacted.

The Minister proposed the following amendments to prioritize AIDA's longevity as a broad regulatory framework as opposed to a purely prescriptive law:

• Revise the definition of "high impact" AI systems to include specific classes, namely those related to the use of an AI system related to (1) employment; (2) the provision of services and their costs; (3) biometric identification; (4) content moderation of online platforms; (5) healthcare and emergency services; (6) courts and administrative decision making bodies; and (7) criminal law enforcement;
• Amend AIDA to align with the EU AI Act²and other international jurisdictions and international frameworks, including that of the Organization for Economic Cooperation and Development, by amending key definitions (definition of AI) and clarifying certain requirements for developing, marketing, and managing the operations of high impact AI systems;
• Differentiate the roles and obligations for actors within the AI value chain: namely the obligations of developers, those making available the high-impact system and those managing the operations of high impact systems;
• Introduce obligations for actors within the AI Value Chain for "general purpose" AI systems, such as ChatGPT, and impose an obligation to ensure that the content of such AI systems can be identified by Canadians as generated by such AI systems; and
• Clarify the role of the proposed AI and Data Commissioner, specifically with respect to its independence from the Ministry of Industry Science and Economic Development.

The Minister's officials and Department of Justice are currently drafting the legislative language of the foregoing prior to their being tabled and finalized at INDU. According to the Minister, his proposals are not exhaustive, and Parliament is open to suggesting further changes pending upcoming deliberation and consultation.

Next Steps

The Minister's proposals demonstrate that the federal government is actively responding to the recent developments regarding AI, as well as the concerns of other stakeholders and parties. This October, INDU will continue to hear from witnesses in the upcoming weeks. Torkin Manes will continue to provide updates with respect to the content and status of Bill C-27 as it progresses through the legislative process.

The author would like to acknowledge Torkin Manes' Articling Student Herman Wong for his invaluable contribution in drafting this bulletin.

Footnotes

1. Letter from François-Philippe Champagne to Joël Lightbound (3 October 2023), online: (https://www.ourcommons.ca/content/Committee/441/INDU/WebDoc/WD12600809/12600809/MinisterOfInnovationScienceAndIndustry-2023-10-03-e.pdf).

2. See also European Parliament, "EU AI Act: first regulation on artificial intelligence" (last modified 14 June 2023), online: (https://www.europarl.europa.eu/news/en/headlines/society/20230601STO93804/eu-ai-act-first-regulation-on-artificial-intelligence).

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