AI Compliance in Canada: PIPEDA, Quebec Law 25, Ontario Rules
AI Strategy & Governance

AI Compliance in Canada: PIPEDA, Quebec Law 25, Ontario Rules

AI compliance in Canada means matching each AI use to the rules that apply: PIPEDA for personal information, Quebec Law 25 for automated decisions and transfers, Ontario rules for job postings and public bodies, and federal directives for government systems.

In short

  • Canada has no stand-alone federal AI act in force: AIDA died with Bill C-27 in January 2025. Privacy, employment and public-sector rules govern AI use today.
  • Quebec Law 25 sets the most specific AI-related duties in force: notice of decisions made exclusively by automated processing (s. 12.1), privacy impact assessments for new systems (s. 3.3) and before personal information leaves Quebec (s. 17).
  • Ontario employers with 25+ employees must disclose AI use to screen, assess or select applicants in public job postings, since January 1, 2026.
  • Federal institutions must publish an Algorithmic Impact Assessment before an automated decision system goes into production (Directive on Automated Decision-Making, 2025 version).
  • Remolda maps your AI uses to these rules and prepares the operational documents; legal opinions come from your counsel. Start: AI Readiness Review, $490 CAD + HST.

Your situation

Compliance questions usually arrive with a concrete trigger:

  • A client or insurer questionnaire asks how you control AI use and where data goes.
  • A Quebec customer base. Your chatbot, scoring or triage tool makes decisions about Quebec residents.
  • Hiring in Ontario. You use AI to screen or rank applicants and post jobs publicly.
  • A public-sector contract. A department, municipality, hospital or school board asks for impact assessments and documentation.
  • Staff use AI with client data. Nobody has checked the vendor terms or where prompts are processed.

The rules that apply in September 2026

RuleWho it coversWhat it means for AIStatus
PIPEDAPrivate-sector organizations handling personal information in commercial activityLegal authority and valid consent, limited purposes, openness, accountability; the privacy commissioners' nine principles for generative AI (Dec. 2023) apply them to AIIn force. Replacement Bill C-36 tabled June 15, 2026, awaiting second reading
Quebec private-sector Act (Law 25)Enterprises handling personal information in QuebecNotice and explanation of decisions made exclusively by automated processing (s. 12.1); PIA for new or overhauled systems (s. 3.3); PIA and written agreement before personal information leaves Quebec (s. 17)In force since Sept. 22, 2023
Ontario ESA, job postingsOntario employers with 25+ employeesPublic job postings must state whether AI is used to screen, assess or select applicantsIn force since Jan. 1, 2026
Ontario Bill 194 (EDSTA and FIPPA changes)Ontario public-sector entitiesThe Act allows the province to require AI accountability frameworks, risk management, disclosure and human oversight; regulations made so far cover cyber security and student data. FIPPA institutions must do PIAs and report breachesFIPPA changes in force July 1, 2025; EDSTA regulations from July 1, 2026
Directive on Automated Decision-MakingFederal institutions under the Policy on Service and DigitalPublish an Algorithmic Impact Assessment before production; requirements scale with impact levels I–IVCurrent version June 24, 2025; existing systems had until June 24, 2026
AIDA (Bill C-27)—Would have regulated high-impact AI systemsDied on the order paper, January 2025

Sector regulators add their own expectations, for example in financial services and health; we include them when they apply to your organization.

What Remolda does

AI use inventory. Every tool and workflow that uses AI, the data it touches, who owns it and which vendor processes it.

Obligation map. For each use: which rules apply, what is already in place and what is missing. The table above is the starting point; your sector adds to it.

Operational documents. Draft notices for automated decisions, PIA inputs for Quebec and Ontario public bodies, job-posting wording, vendor data-location records and an AI use policy for staff.

Vendor terms and data location. Where prompts are stored and processed for each tool. Details differ sharply between vendors; see AI vendor selection.

Fixes in the build. When we build a chatbot or an automation, notices, review points and logs are part of the design.

Remolda handles the technical and operational side. Legal opinions come from your counsel, and we work with them.

How long it takes

The one-week AI Readiness Review gives a first view of current AI use. In our experience a full obligation map with documents usually takes two to four weeks. It depends on the number of AI uses, the provinces involved and the review cycle with legal and privacy.

What it costs

The AI Readiness Review is $490 CAD + HST: current AI use is covered in the session and privacy questions are flagged in the summary. The two-week AI Opportunity Audit ($2,900) adds risk notes per use case. A full obligation map with documents is quoted after a call. See the pricing page.

Staff rules usually come first. Our AI use policy template turns these Canadian rules into a 12-section policy in Word and PDF.

Why Remolda for AI compliance work

  1. Every rule with its source. Each regulatory point on our documents links to the official text, with the date it was checked.
  2. Current status tracked. Bills that died, bills in Parliament and rules in force are kept apart.
  3. Compliance built into delivery. Remolda designs the AI workflow together with its notices, review points and logs.
  4. Quebec and federal ready. Work and documents in English or French.
  5. Clear role split. Operational work by Remolda, legal opinions by your counsel.

How the work runs

Compliance work runs through Audit, Strategy and Evolve in the Remolda Cycle.

  1. Inventory. AI tools, workflows, data and vendors.
  2. Map. Rules per use, gaps ranked by risk.
  3. Documents. Notices, PIA inputs, policy, vendor records.
  4. Review. With your legal and privacy leads.
  5. Monitor. Under a monthly engagement, rule changes are tracked and the map is updated when a bill such as C-36 advances.

Frequently asked questions

What AI laws apply to businesses in Canada in 2026?

As of September 2026 there is no federal AI act in force. AI use is governed by privacy law (PIPEDA federally, Quebec's private-sector Act as amended by Law 25, and other provincial laws), employment rules such as Ontario's job-posting disclosure, sector regulators, and for government bodies the federal Directive on Automated Decision-Making and provincial directives.

Is AIDA (Bill C-27) in force?

No. Bill C-27, which contained the Artificial Intelligence and Data Act, died on the order paper when Parliament was prorogued in January 2025. In June 2026 the government tabled Bill C-36, a privacy reform that includes transparency for automated decision-making, and launched the national AI strategy AI for All.

What does Quebec Law 25 require when AI makes decisions?

An enterprise that uses personal information to make a decision based exclusively on automated processing must inform the person no later than when it informs them of the decision. On request, it must tell the person the information used and the reasons and principal factors. The person must also be able to submit observations to staff who can review the decision.

Do we need a privacy impact assessment for an AI project?

In Quebec, yes, for any project to acquire, develop or overhaul an information system involving personal information (s. 3.3), and before communicating personal information outside Quebec, including to a cloud or AI vendor (s. 17). Ontario public institutions under FIPPA must complete PIAs before collecting personal information since July 1, 2025.

Can our staff use ChatGPT or Copilot with personal information?

Only under a business contract and rules that fit your obligations. Check where data is stored and processed: for example, OpenAI offers storage at rest in Canada for eligible Enterprise and API customers, while processing happens outside Canada. For Quebec personal information, that transfer triggers the s. 17 assessment.

What are the penalties under Quebec Law 25?

Administrative monetary penalties for enterprises reach $10 million or 2% of worldwide turnover, whichever is greater. Penal fines range from $15,000 to $25 million or 4% of worldwide turnover, and double for a subsequent offence.

Does the federal Directive on Automated Decision-Making apply to private companies?

It applies to federal institutions subject to the Policy on Service and Digital, for automated systems used in administrative decisions about clients. Private companies are outside its scope.

How much does an AI compliance review cost?

The entry point is the one-week AI Readiness Review at $490 CAD + HST, which covers current AI use in the session and flags privacy questions in the summary. A full obligation map with documents is quoted after a 30-minute call.

Sources

  1. Office of the Privacy Commissioner of Canada — Principles for responsible, trustworthy and privacy-protective generative AI technologies (Dec. 2023)
  2. Office of the Privacy Commissioner of Canada — Annual report 2024-25 (Bill C-27 status)
  3. Parliament of Canada, LEGISinfo — Bill C-36 (45th Parliament, 1st session)
  4. Prime Minister of Canada — AI for All, Canada's national AI strategy (June 4, 2026)
  5. LégisQuébec — Act respecting the protection of personal information in the private sector (ss. 3.3, 12.1, 17, 90.12, 91)
  6. Commission d'accès à l'information du Québec — Principaux changements de la Loi 25
  7. Legislative Assembly of Ontario — Bill 194, Strengthening Cyber Security and Building Trust in the Public Sector Act, 2024
  8. Ontario — Enhancing Digital Security and Trust Act
  9. Information and Privacy Commissioner of Ontario — Bill 194 guidance
  10. Ontario — Requirements related to publicly advertised job postings (ESA guide)
  11. Treasury Board of Canada Secretariat — Directive on Automated Decision-Making
  12. OpenAI — Business data privacy, security and compliance
  13. OpenAI Help Center — Data residency and inference residency for ChatGPT

Facts checked:

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