Canada’s sovereignty could be threatened by AI and digital healthcare

Canada’s federal National AI Strategy Task Force was appointed on September 26, 2025, by Ministers Evan Solomon and Mélanie Joly to update the country’s approach to artificial intelligence. The panel will run a 30-day sprint through October to consult and deliver actionable recommendations aimed at restoring Canada’s position in global innovation.

Solomon asserted: “Advancing the safe adoption and accelerated development of AI in Canada – while strengthening our digital sovereignty – is essential to building the strongest economy in the G7.”

The Task Force’s report is expected in November 2025. What are the likely implications? What specific healthcare questions need to be answered?

The easy predictions: Bill C-27 (Artificial Intelligence and Data Act, AIDA) and Bill C-72 (Connected Care for Canadians Act, CC4C) both died on the order paper in the last Parliament. Those bills will likely serve as inputs to the Task Force’s review. They will be refreshed in the context of the new digital nationalism and advanced AI.

The Pan-Canadian AI for Healthcare Guiding Principles (AI4H), finalized earlier this year, will also inform the healthcare portion. Together, AIDA, CC4C, and AI4H provide a solid legislative and regulatory foundation to build upon.

Many of these updates are long overdue and have now become urgent. Canada’s privacy framework, PIPEDA (2000), is a generation old and predates social media and cloud computing. We need coherent rules for responsible AI and interoperable digital health systems.

While the EU advances under GDPR and the U.S. expands frameworks under the 21st Century Cures Act, Canada risks lagging behind. Competitiveness, data sovereignty, and trust now depend on modern rules at the intersection of AI, health, and privacy.

As Trevor Jamieson and I argued in our earlier C.D. Howe Institute paper, “A National Digital Health Architecture Is Long Overdue,” stronger federal coordination and clear standards are essential for safe, interoperable adoption. The Task Force will now need to deliver those structural reforms through an AI and digital-sovereignty lens.

The commission will almost certainly be urged to recommend five priorities:

• Patient data rights, comparable to GDPR and the Cures Act.
• Mandated interoperability and anti-blocking standards akin to Bill C-72.
• Harmonized, enforceable privacy protections across provinces.
• Secure digital sovereignty, ensuring Canadians’ data remains under Canadian legal control.
• An end to fax-based communication by mandating digital exchange.

That’s the easy part, thanks to years of groundwork by clinicians, health IT professionals, and officials. The system is ready. Now Parliament must be.

The hard questions: The difficult work lies in adapting to new market realities shaped by digital sovereignty and AI nationalism. Borders are hardening due to new concerns about trade and national security that may create opportunities for national economic development and the creation of non-tariff barriers that could encourage national innovators. Some questions:

• Will Canada allow healthcare data to be stored abroad and outside the reach of Canadian courts? If not, who will host it here, and at what cost?
• U.S. vendors Epic, Oracle, and MEDITECH dominate inpatient EMRs. Will that continue under stricter sovereignty rules?
• Will AI clinical decision support and AI scribe tools be bundled with these platforms and trained on U.S. data? If Canadian training data are used, will they remain resident in Canada?
• Can we ring-fence legacy EMRs as systems of record while building modern AI layers nationally?
• Both Oracle and Epic have shown an ability to open windows or APIs to U.S. scribes (for example, Abridge) and clinical decision support integrations (announced but not yet implemented). Can Canadian companies plug into this modular design?
• Will provinces finally agree to federal-provincial health data sharing? Quebec and Alberta have resisted pan-Canadian frameworks for decades. If stalemate continues, should Ottawa proceed with a “Rest of Canada” strategy?
• Should health data, like defense, banking, or currency, be recognized as a national responsibility rather than a provincial asset? The fact that an industry is delivered provincially does not mean its data must be housed provincially.
• Cohere has announced its broad agentic AI platform North (as in “we the…”) and TELUS opened Canada’s first “fully sovereign” AI factory. What role will new nationalistic offerings play in healthcare?
• Are we prepared to produce and host Canadian training datasets for AI? Today, innovators often rely on imported data because domestic sources are scarce and fragmented.
• Where we rely on U.S. or global datasets, how will we ensure that they do not reproduce poor past practices from those jurisdictions? How will we update them to reflect Canada’s population?
• Looking forward to November: Answers will come. The foundation remains AIDA, CC4C, and AI4H – an AI-positive framework that embraces Canadian diversity while guaranteeing strong individual data rights and enforced interoperability.

These are not universally popular principles. Some fear surveillance and oppose electronic data rights. Others seek to monopolize data and resist portability. Still others distrust private-sector participation in health innovation. We need clear decisions to unlock our strong AI and healthcare capabilities.

As Solomon said when announcing the Task Force, this is an exercise in nation-building. Healthcare is one of our largest and most important industries – it deserves a modern national AI infrastructure. It’s time to move beyond the pre-AI debates on digital health and build a cohesive, sovereign, and interoperable AI strategy for the health of Canadians. I am looking forward to Solomon’s decisions.

Will Falk is a retired management consulting partner who spends his time with start-ups and as a public policy fellow at four institutions. He is a contributing editor at Canadian Healthcare Technology magazine.