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The European Union's new artificial intelligence transparency rules, designed to make AI-generated content and systems easier to identify, came into force this week. Experts are now urging Canada to adopt similar measures without delay, as the line between authentic and AI-produced material continues to blur.
As of Sunday, AI systems operating within Europe must be designed to explicitly inform users when they are interacting with an AI rather than a human. In addition, platforms and services utilizing these systems are now required to clearly label AI-generated or manipulated content, including deepfakes intended to appear genuine.
Canada has initiated public consultations on developing its own AI transparency framework. AI Minister Evan Solomon emphasized that this issue matters "more than ever" as AI becomes increasingly integrated into daily life. However, AI researchers warn that time is of the essence as AI systems grow more sophisticated and the distinction between reality and fabrication becomes harder to discern.
The new European regulations are part of the EU's comprehensive AI Act, which came into effect in August 2024 but provided a two-year grace period for these transparency obligations to be implemented.
The rules apply differently to providers, such as companies like OpenAI that create AI systems, and deployers, which are the platforms and entities that use those systems. Some companies, including Meta and xAI, fall into both categories.
Providers are required to ensure their systems are designed to notify users when they are interacting with AI. They must also ensure that content generated or manipulated by their AI systems includes "machine-readable" marks, allowing it to be detected as AI.
Deployers of AI systems must clearly label deepfake videos, images, and audio files, as well as AI-generated or manipulated text related to "matters of public interest." Only deepfakes involving real and existing people, places, events, or objects need to be labelled.
The European Commission has introduced a set of icons that can be used depending on the extent of AI involvement in creating a deepfake. For instance, a fully AI-generated video would use the "AI Generated" icon, while an authentic photograph with a politician's face swapped using AI would require the "AI Modified" icon. The basic "AI" icon can be used in text labels to specify which part of a deepfake was generated with AI, such as voices or audio.
Some platforms like TikTok and Instagram have already begun labelling AI-generated and manipulated content with their own icons and text disclaimers. The EU rules clarify that these existing labels would suffice. While the EU icons themselves are optional and can be used instead of platforms creating their own, "the labelling requirements … are not," according to the commission.
Deployers of AI-based emotion recognition and biometric categorization tools must also clearly inform users that they are interacting with AI.
The new transparency rules carry strict penalties. Companies that fail to comply could face fines of up to 15 million euros ($24.2 million Canadian) or three per cent of their global annual revenues. EU institutions and agencies risk fines of up to 750,000 euros ($1.2 million).
The rules also emphasize that "artistic, creative, fictional or satirical works" created with AI do not need to be labelled, or face "limited disclosure requirements."
Teresa Scassa, a professor and Canada Research Chair in Information Law and Policy at the University of Ottawa, noted that the EU has worked to balance different interests, such as avoiding "disclosure fatigue" where too many disclosures cause people to stop paying attention. She added, however, that it remains to be seen whether the balance is right, as the EU is "out on the forefront" and the rules will likely be evaluated over the next couple of years to determine if adjustments are needed.
Canada's new AI for All strategy, launched in June, promised action on improving transparency as part of its first pillar focused on safety and "protecting Canadians." The strategy specifically mentioned watermarks for AI-generated content as a capability the government would work on.
Last month, Ottawa launched a public consultation on the issue, with Canadians asked to submit their thoughts by Sept. 23.
The consultation focuses on five areas where "further action may be warranted" to address transparency:
A discussion paper from the federal government says the consultation will seek feedback on how best to enact transparency rules through "the range of policy instruments available," including legislation or regulations.
A spokesperson for AI Minister Solomon's office told Global News it was too early to speculate on the specific policy instruments the government may use, or when they might be introduced, while the consultation is underway.
"Canada is closely examining the European Union's AI transparency requirements that took effect this week, alongside work underway through the G7, OECD and other international partners," the office said in a statement. "Canada's approach will reflect Canadian needs and values and will be informed by what we hear through the consultation."
Brian McQuinn, an associate professor at the University of Regina and co-director of the Centre for Artificial Intelligence, Data, and Conflict, said the consultation could help the government address uniquely Canadian concerns, like Indigenous issues and French language requirements, when developing its own transparency rules.
He stressed that work needs to be focused and accelerated to keep pace with both rapidly developing AI technologies and bad actors' efforts to circumvent these rules. "This stuff is moving so fast that we just need to put the legislation into place, because we're going to need new legislation in a year because things are going to exist that we don't even know about now," he said. He added that the legislative process "is not designed to tackle problems that are as profound and as fast-moving as these are."
Both McQuinn and Scassa said Canada would be wise to use the EU's rules as a model, not just to ensure they can be drafted and adopted quickly, but also to follow what Prime Minister Mark Carney has called the "middle powers" approach of banding together to create influence in the global debate around AI regulation.
"The EU is large enough to carry some influence on this type of thing," Scassa said. "Canada isn't big enough or consequential enough to set its own rules on some of these things that would require [AI] companies to change their practices, but they can certainly piggyback on the efforts of jurisdictions like the EU."
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