Editors note: With the Liberals returning to power following the 2025 federal election with a minority government, we’ve updated this piece to reflect the current political landscape and what tech leaders should be watching for in the months ahead. While key legislative priorities are expected to return to the agenda, the government’s minority status may influence the pace and shape of what moves forward.

With the Liberals returning to power following the 2025 federal election, tech leaders across Canada are watching closely to see how the new minority government will advance its unfinished legislative agenda. Several major bills—including those touching on artificial intelligence, cyber security, privacy, and fintech—were left in limbo before Parliament was prorogued in January

Now, as the new government reconvenes, the decisions it makes could significantly reshape how technology companies operate and innovate. 

AI regulation reboot: Preparing for AIDA 2.0

The Artificial Intelligence and Data Act (AIDA), introduced as part of the shelved Bill C-27, aimed to regulate how businesses design, develop and deploy AI systems. It faced scrutiny for its broad scope and structure, but the new government under Prime Minister Carney may bring forward a revised or standalone version.

AIDA proposed a risk-based framework. High-impact systems—used in areas like hiring, healthcare and content moderation—would come with obligations for human oversight, risk assessment and transparency. General-purpose tools would also face documentation and audit requirements. Businesses using or developing AI should anticipate stricter accountability, with increased reporting and compliance demands. To help you decode AIDA, please see our primer.

AIDA was one piece of the puzzle in the federal government’s artificial intelligence strategy. Ottawa had also announced last April a $2.4-billion package of measures to secure Canada’s AI advantage (see our previous summary here), including $2 billion focused on AI compute and the development of a new Canadian AI Sovereign Compute Strategy. With the Liberal government now renewed, it remains to be seen whether the initiatives previously announced will move forward as originally proposed, or whether we’ll see a more targeted or phased approach emerge.

Now is the time to assess how AI is used in your operations and prepare for what’s next. Building a governance framework early can help your team stay ahead of new rules and reduce disruption down the line.  You can gain further insight into the future of Canadian AI legislation with our ongoing AI series, including a recent webinar with Mark Schaan of the Privy Council Office and Deputy Secretary to the Cabinet on artificial intelligence, dealing with what businesses can expect next and how they should prepare in a changing legal environment following the shelving of AIDA, as well as a recent webinar on how legal departments can effectively leverage AI.

Privacy and cyber security legislation return to the forefront

With the Liberals returning to power, both privacy and cyber security legislation are expected to remain priorities—though the exact path forward remains to be seen. As outlined in our analysis of prominent privacy and cyber bills following prorogation, several major initiatives are likely to reappear in revised form.

A revised version of Bill C-27 could maintain the proposed overhauling of Canada’s private sector privacy regime through the Consumer Privacy Protection Act (CPPA) and the creation of a new tribunal under the Personal Information and Data Protection Tribunal Act (PIDPTA). The CPPA sought stronger individual rights, new consent standards, rules for children’s data, and expanded enforcement powers for the Privacy Commissioner of Canada.

Meanwhile, Bill C-26—which introduced the Critical Cyber Systems Protection Act and amended other Acts—was set to impose obligations on operators of vital services and systems to report cybersecurity incidents and comply with cybersecurity standards. Though it was close to passage, it too died with prorogation.

The next Parliament is also expected to revisit online harms legislation. Bill C-63, which targeted harmful content online, would have imposed new responsibilities on digital service providers and introduced broad enforcement powers through a new Digital Safety Commission. While not a key priority during the election campaign, the need to address online harms is clear, making it a likely area of focus for the new government.

Businesses in tech, communications and other data-reliant sectors should watch how this legislation re-emerges—particularly where obligations may shift around data governance and digital platform responsibilities. 

Fintech crossroads: Open banking momentum interrupted, but not gone

Canada’s move toward open banking took a major step forward in 2024, with part one of the legislative framework passed. But the second half—needed to bring open banking to life—remains on hold. With the election just days away, the direction of travel depends on which party forms government. The Liberal-led government is expected to build on existing progress.

It is clear that the shift to consumer-directed finance is coming. Financial institutions and fintechs should be reviewing their data-sharing models, preparing for new regulatory obligations, and thinking strategically about how to turn compliance into opportunity.

The broader digital finance agenda also remains in flux. While global financial hubs are moving quickly on crypto and blockchain regulation, Canadian policymakers have yet to set out clear priorities. That uncertainty presents both a challenge and an opportunity for businesses working to shape Canada’s role in the future of digital assets.

Read more about what to expect from upcoming financial sector reform.

Carrot and stick taxes anticipated

Canada’s Digital Services Tax (DST), effective since June 2024, imposes a 3 per cent levy on revenues from certain digital services, including online marketplaces, social media platforms and targeted advertising. Notably, the DST is retroactive to January 1, 2022, with the first payments due by June 30, 2025.

While the DST aims to ensure that digital service providers contribute their fair share of taxes in Canada, it has elicited concerns from the United States, which argues that the tax disproportionately affects American companies. This has led to trade tensions and discussions about potential retaliatory measures. Large businesses with some part of their operations in the digital space should assess their exposure to the DST. Prepare for Canada’s DST with our step-by-step guide.

Technology companies adjusting transfer pricing to mitigate U.S. tariffs risk audits due to potential deviations from arm’s-length profit margins, customs valuation conflicts (e.g., retroactive price adjustments) and outdated contractual risk allocations. Tax authorities may challenge unilateral cost-sharing measures or obsolete benchmarking studies, leading to double taxation or penalties. Mitigate risks by updating policies, aligning intercompany agreements with tariff cost-sharing terms, maintaining dual tax/customs documentation, and pursuing bilateral APAs to pre-empt disputes. Read more about APAs.

Technology companies should also monitor the evolving landscape of federal incentives, including the expanded refundable clean technology investment tax credits and potential enhancements to the SR&ED program, which may see increased rates and improved refundability to stimulate R&D and commercialization of intellectual property in Canada.

Additional election promises included credits for qualifying AI adoption projects and a focus on innovation and digital sovereignty. To pay for all of this, expect increased compliance scrutiny.

Legal foresight is your competitive edge

Change is on the horizon—and those who act now will be best positioned to adapt.

Ask us how we can help you anticipate what’s ahead, assess your risk exposure, and build flexible, forward-looking compliance strategies. When the new government gets to work, the businesses that are prepared won’t just be meeting new requirements—they’ll be setting the pace.

Please feel free to contact the authors or a member of our Artificial Intelligence Law, Privacy & Cyber Security, Financial Services & Technology (FSxT), National Tax or Tech groups.