Canada risks being left behind in the artificial intelligence race if it doesn’t step up quickly on issues like privacy and data sovereignty, the former CEO of BlackBerry told members of Parliament in a series of blunt warnings Thursday.
Jim Balsillie, who now chairs the Centre for International Governance Innovation, told the House of Commons industry and technology committee that Canada’s economic strategy remains “rooted in the 1970s” and is ignoring the realities of the current data-driven economy, which prioritizes sovereign ownership of intellectual property over tangible traded goods.
He and other experts testifying in Thursday’s hearing said Canada is simply not moving fast enough to harness AI’s economic opportunities or provide public and market confidence through strong regulation.
“You have to understand this is a race, and we haven’t gotten out of the locker room,” Balsillie said.
He called the decision by Canadian AI company Cohere last year to contract U.S.-based CoreWeave to operate a new data centre in Ontario — using a $240-million federal investment through the Canadian Sovereign AI Compute Strategy — an “own goal of just the most severe proportions” that reflects the missteps in Canada’s approach to date.
“(It’s) kind of like giving cigarettes out to a school health program,” he said.
“That contract could have been a company-maker for half a dozen great potential Canadian companies in sovereign compute. And now the wealth effects and the IP all flows to CoreWeave and its shareholders. Plus it’s governed under the U.S. Cloud Act, so that we don’t have sovereignty over the data that’s there.”
Asked what grade he would give the federal government’s performance over the last year on AI, Balsillie replied: “I would score it as ‘did not attend.’”
Multiple experts who spoke to Global News this month voiced varying degrees of concern about the lack of tangible progress on AI since Prime Minister Mark Carney created the position of a minister responsible for artificial intelligence a year ago.
A “refreshed” national AI strategy has yet to be released, although AI Minister Evan Solomon and his office have promised this week it is coming “very soon” and “shortly.”
Tuesday’s spring economic update outlined six “pillars” the strategy would be built around, with safety and privacy at the top of the list. Sovereign AI infrastructure, accelerated adoption and scaling up the domestic AI industry were among the other pillars.
But Balsillie said he was “severely disappointed” that the overall fiscal update, as well as last fall’s federal budget, showed Canada is still lagging behind the U.S., Europe and Asian allies in reorienting the economy around data and IP sovereignty.
“Sometimes … people get a stroke and they deny they have a right arm. It’s called an agnosia, and we have an agnosia on the policy of intangibles,” he said.
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“Many other nations … understand that the intangible economy is not a production economy of cooperative trade. It’s a rentier economy where somebody is the landlord and somebody is the tenant. Nobody’s going to look after Canada. Nobody’s going to be our economic partner, because nobody is anybody’s economic partner in this system; it has to be us that looks after ourselves, and I’ve not seen a country with more potential do less attention to this than Canada.”
Balsillie urged governments to engage more with the industry and research sectors to ensure they stay in Canada and can grow and thrive, while also pursuing robust regulations around privacy, online harms, digital and infrastructure sovereignty and Canadian identity and culture protections.
He also suggested that international free trade agreements, including the Canada-U.S.-Mexico Agreement (also known as the USMCA), need to be rethought to ensure Canada industry is “enabled” to have ownership, or landlord powers, over its industrial sectors rather than be reliant on foreign investment and supply chains.
“Europe has a lot more latitude to govern themselves because we got shackled under USMCA,” he said. “And if you notice, the way we’re trying to get ourselves out of this is through a little bit more sovereign compute. And the moment we talk about it, it’s introduced as a trade irritant (by the U.S.)”
When asked if he felt listened to when he brings these concerns to government officials, Balsillie responded: “It’s not that they’re adversarial, it’s that they don’t understand.”
Earlier in the hearing, union representatives from Canada’s telecommunications sector warned about the risks AI posed to both the security of telecom networks and the industry’s workforce.
Officials from the Canadian Union of Public Employees, Unifor and United Steelworkers said AI adoption across the telecom sector had raised the possibility of Canadians’ data falling into foreign hands in the event of a data breach.
“We know that generative AI systems now being used are mostly south of the border, and as a result our data, when we use those systems, are going through telecommunications networks that are not Canadian,” said Nathalie Blais, a research representative from the Canadian Union of Public Employees.
The union officials also said the industry is beginning to rely on AI chatbots for customer service and that “at least one Big Three” telecom company is using AI to disguise offshore call centre agents as Canadian — allowing firms to further offshore or reduce their workforces.
Rogers Communications this week confirmed it was providing “voluntary” buyout packages for employees across much of the company, with CEO Tony Staffieri highlighting investments in AI tools “to reduce costs” and improve “operational efficiency.”
Companies are becoming more transparent about citing AI as the reason for laying off large portions of their workforces, creating concern in multiple industries.
“You can’t have a conversation about AI without it eventually leading to, ‘Yeah but it’s going to take away my job,’” said Corey Mandryk, lead organizer of United Steelworkers National Local 1944, which was formerly the Federation of Telephone Workers.
“A proper AI framework from the government and the regulations that will come with it are important to adopt quickly.”
Mandryk, Blais and the other witnesses testifying alongside them said the government needed to do more consultation with union officials and workers’ advocates and provide clear answers on how AI adoption and regulation will protect against widespread job loss.
Asked during the second hour of the hearing about the union officials’ testimony, Fenwick McKelvey, an associate professor of information and communication technology policy at Concordia University, said automation and resulting job losses in the telecom industry is a trend that long predates AI.
“The fact that we’re catching up to this is, I think, one of the reasons I have concerns about the Canada’s AI strategy so far,” he said, citing the need for proactive consumer rights protections and “robust” Competition Bureau investigations into corporate AI practices.
