A senior federal official says closing Canada's AI literacy gap starts in the workplace
Canada's approach to AI regulation must be built on public trust rather than prescriptive rules, according to a senior federal AI architect.
Speaking at the Nrth Festival in Toronto on Sept. 23, Mark Schaan, Associate Deputy Minister at Innovation, Science and Economic Development Canada (ISED) in Ottawa, told industry leaders that the federal AI for All strategy will only succeed if government and employers first earn the confidence of a workforce anxious about data security, job displacement, and national sovereignty. He was joined in the discussion by Jaxson Khan, Senior Fellow at the University of Toronto's Munk School of Global Affairs and Public Policy in Toronto.
The stakes are as much about Canada's workforce as they are about technology companies, according to Schaan. "Your most anxious Canadian is worried about their data in an AI world," he said. "They're worried about their job, and they're potentially worried about their sovereignty."
Mark Schaan (left) and Jaxson Khan at the Nrth Festival in Toronto on Sept. 23, 2026.
Trust as the first pillar
Canada's AI for All strategy, launched in June by Prime Minister Mark Carney, named trust as its first pillar – a decision Schaan described as both deliberate and grounded in social reality.
"It was intentional and clear that trust was the first pillar, and that's in part a reality check on the amount of social licence that we actually feel we have with Canadians," he said. "It was also a determining factor of making sure that AI was actually going to serve people and be able to drive the kinds of outcomes that we know that it needs."
The strategy targets an additional $200 billion of economic growth and the creation of 250,000 new AI-related jobs over the next five years, with a goal of lifting business AI adoption from just over 12 per cent to 60 per cent by 2034. The launch took place at the University Health Network in Toronto, a calculated signal about what responsible AI deployment can look like in practice. Canada has already brought together clinical health data from three provinces under the VITAL project, with additional provinces set to join, and a Health Missions Fund has been created to attract innovators into the sector.
"There is no more tangible or palpable example for Canadians than in the healthcare system about the ways in which AI can actually help them see a doctor quicker, let them have less wait times, actually improve their overall material outcomes," Schaan said.
The same logic, he added, applies across natural resources, energy, transportation, logistics, and financial services – sectors where AI adoption has lagged and where the government is pushing for urgent movement.
The workforce literacy gap
One of the sharpest data points raised during the discussion came from Khan: Canada ranks 44th out of 47 countries on AI training and literacy, and 42nd on trust in AI systems, according to Trust, Attitudes and Use of Artificial Intelligence: A Global Study 2025 by the University of Melbourne and KPMG International — a finding cited in Canada's AI for All strategy. The finding carries direct implications for Canadian employers navigating AI adoption inside their organizations.
Schaan's answer is a national AI literacy program, beginning with post-secondary students and educators before expanding to workers and employers across the country.
"We need to combat the literacy and fluency that Canadians have in the technology itself," he said, framing the initiative as essential groundwork alongside any formal regulatory action.
The literacy gap is already a pressure point for people and culture teams. As Canada's AI adoption rate sits well below global peers, closing that gap will require employers to move on internal upskilling, not just wait on government programs. Organizations that invest now in structured AI learning, clear internal use-case guidelines, and open communication about what this technology means for roles and workflows are better placed to earn the employee buy-in Schaan identifies as a precondition for meaningful adoption.
Regulation that enables, not impedes
The panel examined whether Canada can regulate AI meaningfully without placing domestic companies at a disadvantage. Schaan pointed to the Canada-Germany Sovereign Technology Alliance – anchored by a business arrangement between Canadian AI company Cohere and German firm Aleph Alpha – as a model for how mid-sized nations can build regulatory credibility collectively.
"Going it alone is a potential threat to competitiveness, while also ensuring that we're not eroding our own sovereign choices around what we know we need from a government's perspective," he said.
On formal regulation, Schaan argued strongly for principles-based approaches over prescriptive rules, citing the pace of technological change as the reason.
"There's no point in hardwiring some sort of obligation that actually is going to be obsolete six seconds from now," he said. "The technology… needs to be adaptive to how things are actually moving forward."
Canada has signed on to a declaration put forward by the Finnish government ahead of the United Nations General Assembly, which calls for frontier AI companies to participate in model evaluation, for governments to develop standards including incident-reporting protocols, and for nations to join an international AI governance body. Prime Minister Carney has also proposed a Tech Stability Board modelled on the Financial Stability Board he led as a central banker – a collective mechanism for managing systemic AI risks that cross national borders, particularly around critical infrastructure.
Trust a competitive asset with responsible AI
Schaan was direct about the responsibility that does not rest with government alone.
"The responsible use of artificial intelligence is going to be driven by the use cases that actually create benefit," he said. "That diffusion needs to be in more hands, in more use cases that actually are empowering decision makers, companies, citizens to be able to understand the potential of this technology to make real improvements."
He also challenged the assumption that regulation and growth are fundamentally in tension, arguing that trust is itself a competitive asset.
"If we believe that responsible AI goes further, that you actually get greater diffusion and greater opportunity because you've actually ensured that you have a standard of security and you have a standard of trust that actually lives behind your deployment and your diffusion," Schaan said, "we actually think you get greater diffusion, you get greater penetration, and ideally that creates the scale and champions that actually can fuel growth."
A government consultation on additional AI transparency measures closed on the day of the Nrth Festival panel. The Canadian Artificial Intelligence Safety Institute (CAISI) continues to advance the science of AI safety in collaboration with international partners, working to ensure governments are well-positioned to understand and act on the risks of advanced AI systems. Its mandate around research, testing, and policy is set to expand as Ottawa responds to the feedback gathered.
People leaders building AI-ready HR strategies for Canadian workplaces in 2026 and beyond should watch for further government announcements as Canada's policy framework firms up over the rest of 2026, according to Schaan.
