Canada

Legal Framework

Canada has no overarching federal AI law. The Artificial Intelligence and Data Act (AIDA), introduced as part of Bill C-27 in 2022, died on the order paper when Parliament was prorogued in January 2025. The current Liberal government under PM Mark Carney appointed Canada's first Minister of Artificial Intelligence and Digital Innovation (Evan Solomon) and launched a national AI strategy sprint in fall 2025, with a renewed strategy expected in 2026. The government has signaled it will regulate AI through privacy legislation rather than standalone AI law. AIDA may be reintroduced. Existing regulation comes from PIPEDA (federal privacy law), the Directive on Automated Decision-Making (government use, 2019), voluntary codes of conduct for generative AI, and provincial laws. Ontario requires AI disclosure in hiring (March 2024). No DAO-specific legislation exists in any Canadian jurisdiction — DAOs risk being treated as general partnerships with joint and several liability. Canada was the first country with a national AI strategy (2017) and founded GPAI (2020). The Canadian AI Safety Institute (CAISI) launched November 2024.

Key Laws & Regulations

• ◆PIPEDA — Personal Information Protection and Electronic Documents Act
• ◆Directive on Automated Decision-Making (2019, government use)
• ◆Bill C-27 / AIDA — Died on order paper Jan 2025, may be reintroduced
• ◆Ontario Working for Workers Act — AI disclosure in hiring (2024)
• ◆Ontario Enhancing Digital Security and Trust Act (2024)
• ◆Quebec Law 25 — Modernized privacy law with AI implications
• ◆Voluntary Code of Conduct for Responsible Generative AI (ISED)
• ◆Consumer Privacy Protection Act (CPPA) — Expected reintroduction 2026
• ◆Canada's National AI Strategy (2017, renewed 2021)

Business Formation

Standard entity types: Federal or provincial corporation (Inc./Ltd./Corp.), general partnership, limited partnership, sole proprietorship, cooperative, not-for-profit corporation. Canadian Controlled Private Corporation (CCPC) is preferred for accessing SR&ED tax credits. No DAO-specific entity types — DAOs operating in Canada may be treated as general partnerships under provincial Partnership Acts with joint and several liability for members. British Columbia and Ontario are leading tech hubs. Federal incorporation costs ~CAD $200; provincial varies.

Tax Implications

Federal corporate tax rate: 15% (small business rate: 9% on first CAD $500K for CCPCs). Provincial rates vary (combined effective rate ~25-27% for large corporations, ~12-13% for small businesses). SR&ED tax incentive program is Canada's largest innovation credit — Budget 2025 doubled the expenditure limit from $3M to $6M, enabling up to CAD $2.1M/year in refundable cash back for qualifying R&D. Capital expenditure eligibility restored for SR&ED (retroactive to Dec 2024). New Productivity Super-Deduction allows immediate expensing of patents, data infrastructure, and computers. Provincial R&D credits stack (BC IDMTC, Quebec multimedia credits, Alberta IEG). No crypto or DAO-specific tax provisions — crypto is treated as commodity for tax purposes.