Canada’s AI Future in a Whirlwind of Change
In the Trusteeship Council Chamber at the United Nations, a room originally designed to oversee the transition of colonies to independence, the world gathered last September to discuss a new kind of sovereignty.
The occasion was the launch of the Global Dialogue on AI Governance, a crowning initiative of the 80th General Assembly. Secretary-General António Guterres heralded the moment as a triumph of agile, inclusive multilateralism—a move from high-minded principles to the gritty machinery of practice. It was, he suggested, a North Star for a fractured world.
However, stepping outside the UN and into briefing rooms in Washington or Beijing, this North Star is obscured by storm clouds. As we entered 2026, the diplomatic optimism of early autumn felt like an artifact from a different era.
The Governance Paradox
We have entered the year of the governance paradox: just as the UN has finally erected the scaffolding for a global AI architecture, America, the center of gravity for big tech, is retreating aggressively behind national borders.
This dissonance is acutely felt in Ottawa. For decades, Canadian foreign policy relied on a comfortable syllogism: what is good for the international rules-based order is good for Canada, and what is good for the United States is usually manageable. This logic has now collapsed.
Under Donald Trump, the United States explicitly rejected centralized international authority over artificial intelligence, favoring a muscular, mercantilist AI sovereignty that views multilateral rulebooks as impediments to American AI dominance.
Impact on Canada
The recent executive orders from the White House, designed to preempt state-level regulations and consolidate a unified America First AI market, signal a retreat from the collaborative safety regimes advocated at the G7 Summit in Kananaskis last summer.
Canada finds itself politically tethered to the UN’s inclusive vision while negotiating economic integration with a neighbor that is actively defunding the institution tasked with housing the Independent International Scientific Panel on AI.
The UN, facing a severe liquidity crisis precipitated by American budget cuts, is forced to do less with less as the governance challenge expands. Meanwhile, nations from Nigeria to Indonesia, including China, Russia, Iran, Cuba, and Belarus, are rapidly adopting DeepSeek, an open-source model from China, which offers high-performance tools without the steep licensing fees or moralizing guardrails typical of Silicon Valley.
A Distinct Policy Incoherence
This new landscape necessitates a humbling strategic pivot for Canadian development professionals. They can no longer assume that the digital infrastructure of partners will resemble their own or adhere to the same norms.
Domestically, the abstraction of AI policy collides with the hard physics of the Canadian landscape. The narrative that AI is a weightless, cloud-based asset has dissolved, revealing that the cloud is, in reality, a heavy industrial sector with a voracious appetite for electricity and water.
In Quebec, Hydro-Québec projects that data centers will demand an additional 4.1 terawatt-hours of power by 2032. In Nanaimo, British Columbia, the water requirements for cooling these facilities have become a municipal flashpoint.
This physical reality creates a distinct policy incoherence. The federal government’s Budget 2025 push for sovereign compute—an attempt to ensure Canada isn’t merely a client state of U.S. tech giants—risks undermining the country’s climate commitments.
The Canadian Union of Public Employees (CUPE) has noted that the rush to power these facilities is driving pressure to bring natural gas generation online, potentially doubling emissions in some regions. The digital revolution, it turns out, has a smokestack.
Technological Ground Shifts
Technologically, the ground is shifting beneath regulators’ feet. The focus of 2024 was the chatbot; the reality of 2026 is the AI agent. These systems are capable of executing complex workflows—planning, reasoning, and acting without human intervention. AI experts refer to this as shadow autonomy.
Recent developments include the U.S. Secretary of War embracing Elon Musk’s controversial Grok AI to operate within the Pentagon’s networks, classified and unclassified.
This emergence of shadow autonomy, where high-capability agents operate within critical infrastructure without adequate oversight, has rendered retrospective compliance frameworks obsolete.
Policy experts at the U.S. Center for AI Policy are advocating for an Autonomy Passport, a regulatory instrument that would require high-capability agents to be registered and subject to a statutory recall or kill switch.
Public Consent Crisis
Amid this technical and geopolitical fracturing, a crisis of public consent has emerged. Over 85% of Canadians believe AI threatens their livelihoods, creating a widening gap between the government’s productivity-focused boosterism and the citizenry’s deep-seated anxiety.
As we move through 2026, the dream of a single, harmonized global AI governance regime appears to be fading, replaced by a complex regime of overlapping, sometimes contradictory frameworks.
The Path Forward for Canada
For Canada, the path forward cannot be mere imitation of the EU’s rigid rulebook or the US’s deregulation. It will require what the UN AI Advisory Body calls agile governance, moving from static legislation to continuous, real-time assurance.
It will require mandating transparency on the energy and water usage of the machines we invite into our territory. And it will require a clear-eyed recognition that in the race to build the fastest model, the most valuable asset may be the institutional capacity to govern it.
