Tackling the Future of Legal Innovation
The Future of Law Lab and the Investor Protection Clinic are two forward-thinking clinics at the Faculty of Law. Working groups at these clinics have spent the past year researching and developing innovative solutions to novel challenges faced by modern legal systems and investor protections. This piece explores the cutting-edge work of these two groups—ranging from safeguarding the rights of investors in a globalizing world to navigating the complexities of artificial intelligence (AI) governance.
THE FUTURE OF LAW LAB
AI Safety & Liability—A Literature Review of Regulatory Approaches
Members: Christopher Gardner, Justin Lim, Cindy Lu, Erika MacKenzie, Duncan McHattie, Derek McVey, Adam Wang, and Tony Chen
As AI advances, governments are debating how to regulate its risks while maintaining innovation. California’s Safe and Secure Innovation for Frontier Artificial Intelligence Models Act, mandates strict safety measures for companies investing over $100 million in AI. Supporters argue it mitigates catastrophic risks, while critics warn it could stifle innovation. This raises a key question: should Canada adopt similar legislation?
The AI Safety & Liability working group conducted a literature review on regulatory models, industry concerns, and global AI governance strategies. Canada’s AI and Data Act (AIDA) was intended to regulate high-impact AI systems, but its legislative progress is uncertain. Ontario currently relies on general privacy laws, which lack AI-specific oversight. The research reviews two key regulatory approaches: use-case-based regulation, which targets high-risk applications like healthcare, finance, and transportation, and computational-power regulation, which restricts AI models based on their processing capabilities. The EU AI Act adopts a risk-based classification model, while U.S. regulations vary by state, with the Colorado AI Act focusing on algorithmic discrimination.
This review highlights the trade-offs between regulatory clarity, innovation, and public safety. While some advocate for pre-emptive safety measures, others argue for a flexible, adaptive approach. Canada must decide whether to pursue a proactive or reactive strategy, ensuring AI accountability without hindering growth. This literature review serves as a foundation for future discussions on AI safety and liability.
Data, Privacy, and Canadian Healthcare
Members: Ivy Chen, Kyle Cheung, Matthew Grace, Aidan Mitchell-Boudreau, Emma Mundy, Yebin Shin, Erica Walter
The Data, Privacy, and Canadian Healthcare Working Group is examining how privacy-enhancing technologies (PETs) can improve patient data security in Canada’s healthcare system. Despite increasing digitization, sensitive medical information is still frequently transferred via unencrypted methods such as fax and email. Hospitals are also partnering with third-party vendors to improve efficiency, raising concerns about unauthorized data access and cybersecurity risks. This research aims to assess existing privacy challenges, analyze global best practices, and provide recommendations for integrating PETs into Canadian healthcare while ensuring compliance with privacy laws.
The group has explored how PETs, such as Multiparty Computation (MPC) and Homomorphic Encryption, could enhance patient data protection. Research on the U.S. healthcare system highlights concerns about the lack of patient consent in the distribution of de-identified data. Existing frameworks, such as HIPAA, do not explicitly support PET adoption. The UK’s National Health Service (NHS) has begun implementing PETs to integrate data across separate systems securely. However, challenges persist, including regulatory uncertainty, technical complexity, and the need for clear implementation guidelines. In both the U.S. and UK, national agencies are increasingly supporting PETs, signaling a shift toward privacy-centric solutions. The working group will apply these insights to Canada, evaluating legal and technological barriers while proposing strategies to modernize healthcare data privacy.
The Investor Protection Clinic
Collaboration project with the Financial Services Regulatory Authority of Ontario (FSRA)
Members: Rachel Bernardo, Tsahai Carter, Keaghan Croke, Sahib Grewal, Zedain Kara, Maggie Shi, Alexander Tower, Malka Younas
This research examines the evolving landscape of artificial intelligence (AI) regulation in financial services across multiple jurisdictions, including the US, UK, Canada, Australia, China, Japan, Ireland, and France. It explores the balance between fostering innovation and ensuring consumer protection, analyzing sector-specific regulatory frameworks, emerging legislation, and governance challenges such as algorithmic bias, transparency, and risk management. The study provides a comparative assessment of regulatory bodies and approaches, highlighting key principles, gaps, and trends in AI oversight. The findings contribute to the discussion on best practices for Ontario’s Financial Services Regulatory Authority (FSRA) and the Investment Protection Corporation (IPC) as they consider AI governance.
Students conducted detailed jurisdictional analyses, evaluating AI regulation in financial services through the lens of existing and proposed legislation, sector-specific policies, and regulatory trends. They examined key challenges such as bias, third-party dependencies, compliance enforcement, and international cooperation. Their research provided insights into the regulatory evolution of AI, from voluntary frameworks to structured oversight, and assessed the role of financial regulators in shaping AI governance. Some students focused on specific legislative measures, such as Canada’s AIDA and the UK’s sectoral approach, while others explored broader trends, such as AI’s integration in investment advisory, banking, and insurance. Additionally, students reflected on their findings, noting unexpected gaps in AI regulation, the tension between innovation and oversight, and the future direction of global AI governance. Their research not only strengthened their analytical and comparative evaluation skills but also contributed meaningful recommendations for regulatory frameworks in Ontario and beyond.
Collaboration project with the International Human Rights Program (IHRP)–Examining the Human Rights Impacts of Mining Development in the Ring of Fire
Members: Hyun Tae Kim, Alexander King, Robin Kovacs, Mehvash Saiyed, Selena Ying Sun, Julia Tillman
This working group aims to investigate and document the human rights impacts of mining development in the Ring of Fire, in collaboration with the International Human Rights Program (IHRP) at the University of Toronto Faculty of Law. By examining corporate and government compliance with Free, Prior, and Informed Consent (FPIC) under the United Nations Declaration on the Rights of Indigenous Peoples and Treaty 9, the group seeks to highlight systemic issues in consultation processes, environmental risks, and Indigenous governance challenges. Research has already revealed legal gaps that allow corporations and governments to bypass meaningful consultation, as well as the significant environmental threats posed by mining, including water contamination, biodiversity loss, and peatland destruction. Additionally, findings show that corporate engagement often prioritizes business risk management over Indigenous inclusion, and policies such as Bill 197 further weaken Indigenous participation in decision-making. Legal cases, such as those involving the Eabametoong First Nation, further illustrate the broader failures in upholding Indigenous rights.
Moving forward, the group will refine its research by updating the timeline of key events related to mining activities, drafting sections of the final report—particularly on corporate and government responses—and conducting interviews with selected mining companies to assess their consultation practices. They will also analyze the financial risks associated with inadequate Indigenous consultation, exploring cases where companies have faced losses due to mismanaged relationships. Their findings will contribute to a comprehensive report featuring case studies that support advocacy efforts by the Anishnawbe Business Professional Association, with the goal of raising awareness, promoting corporate accountability, and strengthening legal protections for Indigenous rights and environmental sustainability.
Open Banking in Canada
Members: Emily Miller, Juyoung Ban, Talha Mahmood, Glenn Howard, Pe’er Krut, Dima Kiwan
This working group explores the potential benefits and challenges of open banking in Canada, particularly its implications for financial inclusion, consumer protection, and market competition. One focus is on how open banking could enhance financial literacy for underprivileged groups while also posing risks such as data security and regulatory concerns. Another perspective highlights the necessity of strong safeguards to maintain consumer trust, proposing a decentralized yet accountable liability model and improved whistleblower protections across various regulatory frameworks. From a legislative standpoint, Canada’s recent Consumer-Driven Banking Act is examined, comparing the country’s developing framework to international experiences and noting both the benefits and challenges observed in other jurisdictions. Additionally, the group analyzes fintech, banking, and government claims regarding open banking’s impact on financial literacy, while also investigating barriers to implementation and the actual effects on vulnerable populations, finding mixed evidence regarding its purported benefits.
Overall, the research underscores that while open banking has the potential to improve financial literacy, consumer choice, and market competition, its success depends on effective regulation, consumer awareness, and industry cooperation. Findings suggest that while some vulnerable groups may benefit from open banking tools, there is limited empirical evidence supporting broader claims of financial empowerment. Key challenges include regulatory fragmentation, privacy concerns, and the reluctance of traditional banks to share data with competitors. By comparing Canada’s developing approach with models in the UK, Australia, and the US, the group provides insights into both the promises and pitfalls of open banking, emphasizing the need for strong oversight, consumer protections, and clear accountability structures.