Making AI work for your business

Sarah Dever Letson and Lauren Agnew

Interested in understanding the impacts of AI on your business? Looking to understand how these intersect with concerns around privacy and cybersecurity? Curious about the impacts of AI on marketing practices?

Join lawyers from our Privacy Group in an upcoming webinar – Tuesday, April 29 at 10amAST – discussing these topics and more.

For more information, and to express an interest in attending, email events@stewartmckelvey.com.

AI use and its repercussions continue to be a hot topic.  In a recent decision of the British Columbia Civil Resolution Tribunal, Moffatt v. Air Canada, 2024 BCCRT 149, Air Canada was found to be bound by an interaction between its AI powered chat bot and a bereaved passenger.

The chat bot told the passenger that he could apply for a bereavement fare retroactively. Relying on this information, the passenger booked a regular fare. When he applied for the bereavement fare approximately one week after his travel, Air Canada denied the refund on the basis that it was contrary to their policy (found elsewhere on the website). The Tribunal found that Air Canada did not take reasonable care to ensure its chat bot was accurate, that the passenger had reasonably relied on the chat bot, and therefore the passenger was entitled to a partial refund.

This case highlights that businesses will be held liable for how they use AI systems. With AI and its use by Canadians and Canadian businesses outpacing Canadian legislative developments, and with case law like the Moffatt v. Air Canada decision developing, what do Canadian businesses need to know about using AI?  

Canada was one of the first countries in the world to signal its intention to regulate AI systems through the tabling of the Artificial Intelligence and Data Act (“AIDA“) in June 2022.

However, since then, AIDA has stalled in legislative committee in the face of concerns about the lack of a public consultation process, and has been overshadowed by the European Union’s new, more comprehensive Regulation Laying Down Harmonised Rules on Artificial Intelligence, which came into force on August 1, 2024. 

In the absence of a comprehensive legislative regime, AI in Canada is governed by existing legal principles and case law under, for example, privacy law, contract law, consumer protection law, employment law, intellectual property law, human rights law, etc.

There are also voluntary guidance documents, including the joint guidance published by the Office of the Privacy Commissioner of Canada and the provincial privacy regulators.  

If you want to use AI in your business, here are some of the factors you should consider:

• Risk Assessment: What is the use case and what are the potential risks? What type of AI system is being proposed? Does the AI system meet your organization’s information, privacy and security requirements?
• Policy Development: Develop an internal policy around AI system use in your organization that offers a clear set of standards and expectations for employees and an approved list of AI systems.
• Privacy and Confidentiality Concerns: Consider whether you will be inputting personal information or other sensitive data into the system, and whether you have consent for this use. Also consider whether the AI system will be trained on your organization’s data and whether this has further privacy or confidentiality implications for your organization.
• Training and Oversight: Consider the level of training your employees will need in order to use the AI system appropriately. Also consider the level of human oversight required to vet the work product or output of the AI system and ensure it is accurate.
• Transparency: Consider industry standards and regulatory guidance on to what extent you need to identify content that has been produced using AI, particularly generative AI.

Lawyers from our Privacy Group are regional leaders in connecting privacy, AI, and the legal requirements for businesses, and are well positioned to provide strategic advice.

This client update is provided for general information only and does not constitute legal advice. Click to view our team, and contact them today to learn more about the best approach to incorporating AI into your business.

Click here to subscribe to Stewart McKelvey Thought Leadership.