Healthcare AI 2025

CANADA Trends and Developments Contributed by: Martin Lapner, Vanessa Carroll, Taryn C Burnett and Robert Sheahan, Gowling WLG (Canada) LLP

As artificial intelligence (AI), including the rapid rise of generative AI (GAI), becomes more embedded in Canadian healthcare – encompassing medical diag - noses, virtual nursing assistants, medication manage - ment, robotic surgery and healthcare data manage - ment, to name a few – clear sector-specific regulation remains a work in progress. The Regulation of AI The principal federal proposal, the Artificial Intelli - gence and Data Act (AIDA), died on the Order Paper when Parliament was prorogued in January 2025, and no successor bill has yet been introduced. Provinces continue to rely on existing statutes, guidance docu - ments and voluntary codes to guide the use of AI in healthcare. Federal Landscape The Government of Canada published its Digital Charter in 2019 and followed up with Bill C-27, the Digital Charter Implementation Act of 2022. Although Bill C-27 passed second reading, significant criticism was levied at its reliance on future regulations and its limited sectoral tailoring, which led to delays at the committee stage, and the Bill ultimately died on the Order Paper when Parliament was prorogued. In this legislative vacuum, the federal government announced a series of initiatives to support responsi - ble and safe AI adoption, including a refreshed mem - bership of the Advisory Council on AI, establishment of a Safe and Secure AI Advisory Group, release of the Guide for Managers of AI Systems applicable to federal institutions, and expansion of signatories to the Voluntary Code of Conduct on the Responsible Development and Management of Advanced Genera - tive AI Systems. Health Canada continues to regulate many clinical AI tools as software as a medical device (SaMD) under the Medical Devices Regulations. Using the Interna - tional Medical Device Regulators Forum risk clas - sification, the department mandates more rigorous evidence and post‑market surveillance for software whose malfunction could directly compromise patient safety. In February 2025, Health Canada issued its Pre‑market Guidance for Machine‑Learning‑Enabled Medical Devices, detailing expectations for algorithm

change protocols, transparency, and cybersecurity measures. Software that is limited to administrative functions remains exempt, as do applications that merely sup - port, rather than supplant, clinical judgment. Provincial Initiatives Provincial legislation applicable to AI in healthcare generally remains in the early stages, with many prov - inces relying on existing frameworks, such as privacy laws and healthcare regulations, to address AI-related concerns. Some provinces have taken steps to modernise legis - lation and specifically contemplate AI. In Ontario, Bill 194, the Strengthening Cyber Security and Building Trust in the Public Sector Act, 2024, received Royal Assent on November 25, 2024. The statute empow - ers future regulations that will require public sector entities, including hospitals, to disclose their use of AI, implement accountability frameworks, adopt risk management measures, and adhere to prescribed technical standards. In prescribed circumstances, institutions may be required to ensure an individual provides oversight of AI use. In Québec, An Act respecting the protection of per - sonal information in the private sector (applicable to the private sector), An Act respecting Access to docu - ments held by public bodies and the Protection of per - sonal information (relevant to the public sector), and the Act respecting health and social services informa - tion (applicable to healthcare organisations) require organisations to notify individuals of automated deci - sions, disclose the personal data and principal factors relied upon, and provide a right to human review. Professional Regulatory Guidance Canadian health professional regulators have released preliminary, high-level guidance regarding the use of AI, emphasising that AI must augment rather than replace professional judgment. The guidance consist - ently urges caution when using AI with three dominant themes:

• ensuring the work product is accurate; • protecting client/patient privacy; and

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