An AI A Day Keeps The Doctor Away?: Regulating Artificial Intelligence In Healthcare – Healthcare

Artificial Intelligence (“AI”) promises to transform
many aspects of everyday life for Canadians. AI tools are predicted
to dramatically improve the provision of heath care by improving
the quality, safety, and efficiency of diagnostic tools, treatment
decisions, and care. Although AI innovations are, in many cases,
still years away from general deployment into the Canadian health
care ecosystem, AI is already used in some circumstances to read
medical images, allowing machine learning to support diagnosticians
in their decision-making.

Like many other jurisdictions, Canada’s health governance
systems currently lack the appropriate legal and regulatory
mechanisms to effectively deal with the challenges that AI poses.
There is currently uncertainty with respect to key issues such as
the related legal requirements for health privacy, medical device
regulation and liability for AI-related harms. In Canada,
regulation of AI in health care involves the additional challenge
of navigating constitutionally fragmented jurisdiction over health
care, which results in layers of governance and the need to
coordinate multiple different actors.

This blog post highlights some of the legal challenges and
issues that need to be addressed in order for Canada to have a
robust and well-regulated governance structure for the use of AI in
health care, including:

  • Coordination of federal and provincial authority;

  • Privacy and oversight with respect to the use of AI in

  • Promotion of Equity through AI; and

  • Liability for AI-related harms.

Coordination of Federal and Provincial Authority

Canada’s federal system and constitutional division of
powers pose unique challenges for the regulation of AI in health
care.1 Under the Constitution, health care is under
provincial jurisdiction. Although similar, each province has its
own set of regulatory frameworks addressing the safety and quality
of health care, health information privacy, informed consent, human
rights and non-discrimination, and licensing of health care
professionals. With respect to the adoption of AI, provincial
legislation and regulation will be the primary legal structure that
governs the end users of AI technology and its application to

However, despite health care being primarily a provincial
concern, the federal government plays a significant role,
particularly through its spending powers under the Canada
Health Act
,2 and its responsibilities for
Indigenous Peoples, federal prisoners, and the military. The
federal government is also a significant player in the regulation
of drugs and medical devices. 

Health Canada is the key regulatory authority at the federal
level that controls which medical devices are available for sale
and may be included in the public insurance plans of the provinces
and territories. Health Canada’s primary mode of regulation is
through the licensing process applicable to all medical devices.
This licensing process requires manufacturers to classify their
devices according to risk (e.g., invasiveness, risk of erroneous
diagnosis, and intended medical purpose) under the Medical
Devices Regulations
,3 and obtain approval from
Health Canada. If a device is licensed, the Medical Device
Directorate continues to monitor the safety and efficacy of the

A significant challenge for the licensing and regulation of
AI-technology is the application of machine learning, which is
often referred to as “black-box” decision making, because
the relevant algorithms are often proprietary and commercially
sensitive and decisions and impacts of the algorithms cannot be
fully explained. A question that is being asked by regulators
around the world is “how can a regulator verify and validate
machine learning algorithms to ensure that they do what they say
well and safely?”5 Another question is: what role
should machine learning and automated decision making have in
health care?

Other key actors in the regulatory framework of Canadian health
care are the professional bodies that provide oversight and
self-regulation. Ensuring coordination between these regulatory
bodies, the provincial and federal legislatures, and Health Canada
to minimize or eliminate regulatory blind-spots will be a challenge
that must be overcome to ensure good governance of AI in health

In April 2021, the European Commission released a 108-page
proposal to regulate AI. Although the European Union has yet to
reach consensus on the final text of the legislation, the proposal
has received significant interest, and the question of how the
European model could inform the development of AI governance in
Canada is being considered by thought leaders in Canada.

Privacy and Oversight

Even though the European Union has not yet implemented an
overarching framework for AI regulation, the rules in its General
Data Protection Regulation (“GDPR”) provide significant
guidance for the European medical community with respect to
regulation of medical AI.7 For example, under the GDPR,
any controller of an AI-system based solely on automated processing
must provide the subject with information about the existence of
the automated decision-making, meaningful information about the
logic involved, and the significance and consequences of such
processing.8 The GDPR also provides a robust regulatory
framework that governs the data privacy of citizens whose data may
be used in machine learning algorithms. In Europe, the GDPR also
requires that medical AI have human oversight.9 Further,
the training data for the AI must be checked for bias and the
ongoing operation of AI must be constantly monitored for the
occurrence of bias to ensure that use of AI does not
unintentionally result in discrimination.10 

Recent changes to Canada’s provincial privacy landscape
suggests that Canada will not only follow the European example, but
also seek to enforce robust privacy rights in its own way. For
instance, on September 22, 2021, the province of Quebec’s
landmark legislation, the Act to Modernize Legislative
Provisions respecting the Protection of Personal Information

(“Bill 64”), received Royal Assent. Bill 64 will impose a
duty to inform with respect to technological tools that enable the
identification, location or profiling of an individual in order to
collect personal information from an individual. From September 22,
2023, organizations will also be required to inform the individual
when a decision is made based solely on automated processing of his
or her personal information, no later than the time the
organization informs the individual of that decision. Organizations
shall also give the individual the opportunity to make
representations to a member of their staff who is in a position to
review the decision. For more information about Bill 64, consult
our blog series here.

Similarly, the federal government’s Directive on Automated
Decision Making (“Canada ADM Directive”),11
indicates that Canadian regulatory frameworks will also likely
require that any health-focused AI technology provide for human
intervention in the decision-making process, and ensure that all
data be tested for bias and non-discrimination.12 The
Canada ADM Directive is a risk-based governance model that
establishes four levels of risk, judged by the impact of the
automated decision. Certain risk-mitigating requirements are then
established for each impact level, including: notice before
automated decision making decisions and explanations after
automated decision making decisions; peer review; employee
training; and human intervention.

Promotion of Equity

Arguably the most significant concern associated with the use of
AI and automated decision making in health care is their potential
to amplify bias and discrimination. Canada’s health care system
already grapples with the problems associated with inequities in
health care – from differential resource allocation between
communities, to differential treatment of individuals based upon
their gender or race.

The current legal framework for funding health care in Canada
(i.e., the Canada Health Act) only protects universal
coverage for “medically necessary” hospital and physician
services.13 Due to the current novelty of AI-assisted
medical services, it is unlikely that many AI-assisted medical
services would currently be considered medically necessary.
Therefore, only patients who have the means to afford add-on fees
or private or boutique health care would gain access to this
sophisticated technology. Further, if only larger medical centers
have the infrastructure and access to such computer science
programs necessary to develop AI-assisted medical programs, access
to AI-technology may be limited, even if cost is not a barrier.
Therefore, regulating AI through the appropriate legal frameworks
to ensure that it is developed and deployed in an accessible manner
will be an important matter for legislatures to consider and

In addition to potential inequities of access, there are two
main sources of concern relating to discrimination in AI systems:
(1) bias in the data used to train the system; and (2) bias in the

If the data used to train the AI system is flawed or incomplete,
for example by failing to include sufficient data from a certain
population, the AI system may be ineffective or dangerous for
patients of the underrepresented population. For example,
AI-assisted cancer screening tools that are trained primarily on
images of light-skinned patients are more likely to misdiagnose
cancer lesions in patients with skin of colour.14 Bias
in the AI-training data, while easier to identify, poses serious
questions relating to access to data, data transfer, and consent.
The importance of training AI systems with data from diverse
populations will have to be balanced with laws relating to data
collection, use, transfer and storage across multiple
jurisdictions, so that diverse patients residing in areas with less
diverse populations are not at risk of being harmed by treatments
based on a lack of diverse data.

Bias in the algorithm of an AI system may be impossible detect,
particularly where machine learning techniques are employed. When
the decision making of the AI is a “black box”, due to
the opacity of how the AI is identifying patterns (and potentially
to changes in the algorithm over time as the machine learns), it
can be a challenge to ensure that discrimination is not occurring.
To combat this, several jurisdictions are considering explicit
legislative commitments that ensure AI systems are compliant with
anti-discrimination and human rights legislation.15
Paired with robust monitoring requirements, these types of
provisions would provide greater legal certainty, accountability,
and public confidence in AI-assisted health care.

Liability for AI-Related Harms

Another considerable hurdle in the adoption of AI technologies
in health care, particularly in the medical community, is the
continued uncertainty regarding the potential liability attached to
the use of AI. Who do you sue when AI goes wrong?

Although AI has been used for various applications over the past
few years, it remains unclear where liability should fall when an
AI system fails. In 2020, the question of who (if anyone) is liable
when an AI-powered trading investment system causes substantial
losses for an investor, was before the English courts for the first
time.16 Unfortunately for the development of tort law in
this important area, the parties reached an out of court
settlement, leaving the question to be answered another

In Canada, medical harms may be dealt with under the law of
negligence.18 How AI-technology changes the standard of
care expected of a medical practitioner and, in particular, the
acceptable level of decision-making delegation to the AI system,
are questions that must be considered.19 Further, the
courts must query whether an AI company has any liability to a
patient that is misdiagnosed. Could an AI company contract out of
its liability to a hospital, if harm results from the use of its
technology? Is an AI company only liable if bias is found in the
data or algorithm? What type of consent is needed from patients
before AI technologies are employed?

Another area where AI may cause significant harm to Canadians is
through breaches of private health care data, which could harm the
public’s overall confidence in the health care system. In the
recent Supreme Court of Canada decision, Reference re Genetic
Non-Discrimination Act
(2020 SCC 17), the majority held that
the federal government had the power to make rules combating
genetic discrimination and protecting health through its
jurisdiction over criminal law:

Many of this Court’s decisions illustrate how the criminal
law purpose test operates. A law directed at protecting a public
interest like public safety, health or morality will usually be a
response to something that Parliament sees as posing a threat to
that public interest. For example, prohibitions aimed at combatting
tobacco consumption and protecting the public from adulterated
foods and drugs were upheld because they protect public health from
threats to it…

Parliament took action in response to its concern that
individuals’ vulnerability to genetic discrimination posed a
threat of harm to several public interests traditionally protected
by the criminal law. Parliament enacted legislation that, in pith
and substance, protects individuals’ control over their
detailed personal information disclosed by genetic tests in the
areas of contracting and the provision of goods and services in
order to address Canadian’s fears that their genetic test
results will be used against them and to prevent discrimination
based on that information. It did so to safeguard autonomy, privacy
and equality, along with public health. The challenged provisions
fall within Parliament’s criminal law power because they
consist of prohibitions accompanied by penalties, backed by a
criminal law purpose.20

This case demonstrates that the federal government’s
regulatory power is not limited to health care spending. However,
it is unclear how effectively criminal law can be used to govern AI
and, as AI technology becomes more common in health care, the
legislatures and the courts will have to carefully consider how the
current private and criminal law frameworks can be adapted to deal
with attributing and apportioning liability arising from AI


AI poses both risks and opportunities in the health care space.
AI systems aim to democratize health and provide superior patient
care. However, regulators must contend with the challenge of
ensuring that AI technology does what it is intended to do, does it
well, and that there remains legal accountability for any harms


1 Colleen M. Flood and Catherine Régis,
Régis, Catherine and Flood, Colleen M., AI and Health Law
(February 1, 2021). in Florian Martin-Bariteau & Teresa Scassa,
eds., Artificial Intelligence and the Law in Canada (Toronto:
LexisNexis Canada, 2021), Available at SSRN:

2 Canada Health Act, R.S.C., 1985, c.

3 Medial Devices Regulations, SOR


5 W. Nicholson Price II, “Artificial Intelligence in
Health Care: Applications and Legal Issues” (2017) The SciTech
Lawyer 14:1; David Schneeberger et al., (2020) The European Legal
Framework for Medical AI. In: Holzinger A., Kieseberg P., Tjoa A.,
Weippl E. (eds) Machine Learning and Knowledge Extraction. CD-MAKE
2020. Lecture Notes in Computer Science, vol 12279. Springer, Cham.

6 Law Commission of Ontario, “Comparing European and
Canadian AI Regulation” (November 2021).

7 Regulation (EU) 2016/679 of the European Parliament and
of the Council of 27 April 2016 on the protection of natural
persons with regard to the processing of personal data and on the
free movement of such data, and repealing Directive 95/46/EC
(General Data Protection Regulation) [GDPR]

8 GDPR, ibid, Arts 13, 14.

9 GDPR, ibid, Art 22. Scheenberge, supra
5, 211.

10 Schneeberger, supra note 5, at

11 Canada ADM Directive.

12 Federal Government’s Directive on Automated
Decision-Making: Considerations and Recommendations

13 Canada Health Act, R.S.C., 1985, c. C-6., s.
2 sub nom “hospital services” and “physician

14 Adamson AS, Smith A. Machine Learning and Health Care
Disparities in Dermatology. JAMA Dermatol. 2018 Nov
1;154(11):1247-1248. doi: 10.1001/jamadermatol.2018.2348. PMID:

15 Law Commission of Ontario, “Regulating AI:
Critical Issues and Choices” (April 2021) at 38-39.

16 Minesh Tanna “AI-powered investments: Who (if
anyone) is liable when it goes wrong? Tyndaris v VWM”
(November 2019).

17 Jeremy Kahn, “Why do so few business see
financial gains from using A.I?” (October 20, 2020).

18 In Quebec, civil law liability principles would

19 Mélanie B. Forcier, et al., “Liability
issues for the use of artificial intelligence in health care in
Canada: AI and medical decision-making” (July 2020) Dalhousie
Medical Journal 46(2). DOI:10.15273/dmj.Vol46No2.10140

20 Reference re Genetic
Discrimination Act, 2020 SCC 17 at
paras. 73, 103

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