Canada to adopt U.S.-led pro-innovation, AI guidelines but will face continued pressure to side with Trump

Canada agreed to adopt the U.S.-led Carolina Principles for Emerging Technologies at the G20 summit in Chapel Hill, N.C., endorsing a light-touch approach to AI regulation, but experts say this alignment is unlikely to ease trade tensions with Washington. AI and Digital Innovation Minister Evan Solomon said Canada supports pro-innovation mechanisms while upholding sovereignty, as analysts warn of continued U.S. pressure to conform to its regulatory stance and technology bloc.

Technology policy researchers say Canada's alignment with a United States-led pro-innovation and artificial intelligence blueprint at the Group of 20 meeting last week is unlikely to help thaw their trade dispute and Ottawa will continue to face growing U.S. pressure to follow its stance on technology policy. G20 member nations agreed to adopt the Carolina Principles for Emerging Technologies proposed by the U.S., which champion a light-touch approach to regulating AI and emerging technologies, at the G20 innovation and technology summit in Chapel Hill, N.C. The broad guidelines endorse accelerating the development and adoption of AI and emerging technology and reducing "unnecessary barriers" on innovation by expediting approval processes and providing regulatory exemptions in select cases. It also asks countries to "consider the opportunity cost" of delaying AI adoption. AI and Digital Innovation Minister Evan Solomon said Canada supports pro-innovation mechanisms that remove unnecessary barriers while upholding Canadian sovereignty to act where needed to protect its citizens. "We are open to AI's extraordinary opportunities and candid about the risks," he said. The G20 agreement to adopt the non-binding framework shows most countries view AI as a technology that requires time and fewer constraints to mature, said Daniel Araya, a senior fellow at the Centre for International Governance Innovation CIGI who is focused on AI and technology policy. "There was mutual self-interest to sign on and it gives everyone a bit of freedom to do what they want," he said, adding that Canada's decision is unlikely to help smooth friction or move the needle on trade talks between Ottawa and Washington. Jaxson Khan, a senior fellow on AI at the University of Toronto and chief executive of consultant Aperture AI, said the bigger question is whether the alignment pulls Canada closer to a U.S.-led technology bloc. "The principles read like a first step in that direction without pinning us down," he said. At the same time, Canada will continue to face growing U.S. pressure to conform to its regulatory stance and worldview on AI and tech, one that the country sees as a zero-sum game and advocates for U.S. tech domination, said Michael Karanicolas, the James S. Palmer chair in public policy and law at Dalhousie University in Halifax and a former director of the University of California, Los Angeles's Institute for Technology, Law and Policy. "The broader American posture since Trump's re-election has explicitly aimed at advancing America's economic interests at the expense of its partners and allies," he said. Karanicolas said this larger U.S. effort to push for regulatory alignment and for countries to "pick a side" is concerning for Canadian digital sovereignty, which requires diversifying Canada's dependence away from the U.S., including technology. "The Trump administration is explicitly trying to head this off," he said. White House officials at the G20 meeting urged member nations to take a hands-off approach to AI regulation and to develop rules to allow U.S. AI giants to train their models on copyrighted work. Canadian tech policy leaders have previously expressed concerns about the U.S.'s push for digital trade alignment as a key part of any trade deal. The U.S. has also been encouraging countries to join its Pax Silica Initiative, a State Department effort launched last year to secure AI supply chains for semiconductors to critical minerals and curb countries' reliance on China. Twenty-five countries have signed on as of last month, including the United Kingdom, South Korea and European Union nations. "The U.S. is desperately afraid that China will dominate all the lower rungs of the AI supply chain," Araya said. "They want to stay at the top of the value chain forever, so they're trying to create a parallel system." He said Canada can and should play a role in that, but it would be smart to branch out instead of exclusively focusing on supporting the U.S. tech ecosystem. Karanicolas said Pax Silica should be understood in the context of the larger trade war and the U.S.'s intensifying push for regulatory alignment. " This is about forcing Canada to accept long-term American domination of our economic and technological development by threatening severe short-term pain if we don't fall into line," he said. Canada is still assessing the U.S.'s invitation to endorse the non-binding initiative, Solomon said, and Ottawa will base its participation on whether the deal strengthens Canadian technology supply chains, supports domestic industry and workers and preserves Canadian sovereignty. Canadian tech policy watchers say that Ottawa is unlikely to make a decision until tariff and trade issues with the U.S. are resolved. That allows it time to watch how the initiative plays out and to think about its role as a leader in the global AI ecosystem rather than just a supplier, said Daniel Wigdor, a computer science professor at the University of Toronto and founder and chief executive of AI venture studio AXL Inc. Canada has enough leverage — in critical minerals, energy and tech talent — that it should be able to insist on terms before joining, he said. "The mistake would be joining as a raw materials and clean power supplier to an American technology stack while the applied work and the intellectual property stay south of the border," he said. If Pax Silica is collaborative and respects Canadian and other countries' sovereignty, the U.S. can build a winning AI coalition, Khan said. "If it's one-sided, that's a much harder sell," he said.