AI Regulatory Compliance & Risk Management

The Regulatory Environment Is Not Waiting

Canadian AI regulation is accelerating. AIDA is moving through Parliament. The Office of the Privacy Commissioner has signalled that AI uses of personal information are a priority for enforcement action. OSFI's expectations for AI in federally regulated financial institutions are becoming more explicit. The Treasury Board Secretariat continues to extend the reach of its Directive on Automated Decision-Making.

Organisations that assess and address their compliance position now will be better positioned than those that wait for enforcement action or mandatory compliance deadlines to initiate the work.

The Canadian Regulatory Landscape for AI

Artificial Intelligence and Data Act (AIDA). Canada's proposed federal AI legislation introduces a risk-based framework: high-impact AI systems will be subject to mandatory risk assessment, risk mitigation measures, monitoring, and incident reporting obligations. Penalties for non-compliance are substantial. We track AIDA's development and help clients understand their likely obligations.

PIPEDA and Provincial Privacy Legislation. The Personal Information Protection and Electronic Documents Act governs how federally regulated organisations collect, use, and disclose personal information — including information used in AI training datasets and AI inference. Quebec's Law 25 and British Columbia's PIPA impose equivalent and in some respects stricter requirements. We assess AI systems for compliance with applicable privacy legislation and identify where consent, purpose limitation, or data minimisation requirements are not met.

Directive on Automated Decision-Making. Federal institutions using AI in administrative decisions are subject to this Treasury Board directive, which requires impact assessment at four risk levels, human oversight mechanisms proportionate to risk, and notice to affected individuals. We conduct impact assessments under the directive's framework and design the oversight mechanisms the directive requires.

OSFI Expectations for Financial Institutions. The Office of the Superintendent of Financial Institutions has incorporated AI risk into its supervisory expectations for model risk management (E-23) and technology and cyber risk (B-13). We assess AI deployments in financial institutions against these expectations and produce the documentation that OSFI expects to see in supervisory reviews.

Provincial Health Privacy Legislation. PHIPA (Ontario), HIPA (Saskatchewan), HIA (Alberta), and equivalent legislation in other provinces impose specific obligations on health information custodians using AI to process personal health information. We assess AI deployments in healthcare organisations against applicable provincial legislation and identify compliance gaps.

What the Compliance Audit Covers

Regulatory Mapping. Identifying every applicable regulation, directive, and guideline — federal, provincial, and sector-specific — that applies to your AI systems. This mapping forms the foundation of the compliance assessment.

Gap Analysis. Assessing each AI system against applicable requirements and identifying gaps: missing documentation, absent controls, inadequate consent mechanisms, insufficient human oversight, or undisclosed use of personal information.

Risk Prioritisation. Not all compliance gaps carry equal risk. We assess each gap by the likelihood of regulatory attention, the potential consequences of a finding, and the effort required for remediation — and produce a prioritised remediation plan accordingly.

Remediation Design. Designing the specific changes — technical controls, documentation, process changes, governance structures, contractual amendments — required to close identified gaps. Remediation plans are specific, not generic: we specify what needs to change, who needs to change it, and by when.

Ongoing Compliance Monitoring. Regulatory requirements change. AI systems change. We establish ongoing monitoring arrangements — typically under an Evolve phase engagement — that ensure compliance is maintained as both the regulatory environment and your AI deployments evolve.

Working with Regulators

When organisations need to engage proactively with regulators — the Office of the Privacy Commissioner, OSFI, a provincial regulator, or a law society — we support that engagement with documentation, compliance assessments, and remediation evidence that demonstrates the organisation's good faith and progress. We have experience preparing the kind of materials that regulators find credible.