What Every Ontario Business Owner Needs to Know in 2026

What Every Ontario Business Owner Needs to Know in 2026

By Bob McTaggart

Artificial intelligence is becoming part of everyday business across Ontario.

If you're running an accounting practice in London, a manufacturing company in Windsor, a technology firm in Waterloo, a construction company in Sudbury or a family business in Ottawa, AI is already changing how work gets done.

The challenge isn't whether organizations will use artificial intelligence.

It's whether they can demonstrate they are using it responsibly.

That's where AI governance enters the conversation.

Like cybersecurity twenty years ago, AI governance is moving from being a technical discussion to becoming a leadership responsibility.

The difference is that this transition is happening much faster.

Ontario's AI Landscape Is Still Evolving

One of the biggest misconceptions I hear is that Ontario has "an AI law."

Not exactly.

What we have today is an evolving framework made up of legislation, regulatory guidance, employment requirements, privacy obligations, human rights law and international influences.

That framework will almost certainly change over the coming years.

Some legislation will be amended.

New laws will likely be introduced.

Court decisions will clarify how existing laws apply to artificial intelligence.

Regulators will continue issuing guidance.

Insurance companies will develop new underwriting standards.

Large organizations will raise procurement expectations.

It is my opinion, this is exactly how mature governance develops.

It isn't created overnight.

It evolves.

The Direction Is Becoming Clear

Ontario has not introduced a single comprehensive AI law for private businesses, several important developments point toward where expectations are heading.

Ontario's Enhancing Digital Security and Trust Act (EDSTA) establishes governance expectations for much of the broader public sector, including hospitals, universities, school boards and provincial agencies.

Among other things, it promotes transparency, accountability and documented risk management for artificial intelligence systems.

While private businesses are generally outside its direct scope, legislation like this often signals the direction governments are moving.

The Information and Privacy Commissioner of Ontario (IPC) and the Ontario Human Rights Commission (OHRC) have also published principles encouraging organizations to use AI responsibly.

Those principles focus on privacy, fairness, accountability, transparency, safety and meaningful human oversight.

Again, these are not simply technical issues.

They're leadership issues.

Ontario employers should also remember that provincial employment legislation already requires disclosure when artificial intelligence is used in recruitment and hiring processes.

That requirement alone demonstrates something important.

Governments increasingly expect people to know when AI influences decisions affecting them.

I don't expect that principle to become less important over time.

AI for All Changes the Conversation

Earlier this year, the Government of Canada launched AI for All, its national strategy for encouraging responsible adoption of artificial intelligence.

To me, the strategy sends a very practical message.

Government is no longer asking whether Canadian organizations should adopt AI.

It assumes they will.

The conversation is shifting toward helping organizations use AI responsibly while maintaining public confidence.

That aligns closely with what I'm seeing in business.

Companies aren't asking whether AI is useful anymore.

They're asking how to use it without creating unnecessary risk.

Ontario Businesses Don't Operate in Isolation

Even organizations that serve only Canadian customers may be influenced by international governance.

The best example is the European Union's AI Act.

Many Ontario companies assume European legislation doesn't affect them because they don't have offices overseas.

Sometimes that's true.

Sometimes it isn't.

If your products, software or AI-generated outputs are used within the European Union—or you supply organizations that do business there—you may encounter governance requirements originating in Europe.

Even if you never deal directly with the EU, multinational customers often apply the same governance standards to suppliers around the world.

That means Ontario businesses increasingly find themselves answering questions about AI governance long before Canadian regulators ask them.

Procurement Is Already Changing

One of the most significant developments isn't legislation.

It's procurement.

Organizations are beginning to ask suppliers:

Do you have an AI policy?

How do employees use AI?

Who reviews AI-generated work?

How do you protect confidential information?

Can you demonstrate meaningful human oversight?

How do you reduce bias?

Can you explain your governance process?

Those questions are becoming part of doing business.

Years ago, cybersecurity questionnaires became standard.

I believe AI governance questionnaires are heading in exactly the same direction.

Insurance Is Watching Too

Insurance companies don't wait for legislation before evaluating emerging risks.

Artificial intelligence introduces new questions.

How reliable are AI-assisted decisions?

How are confidential records protected?

Who remains accountable when AI contributes to business decisions?

Can the organization demonstrate reasonable governance?

Good governance doesn't eliminate mistakes.

It demonstrates that leadership acted responsibly based on the information available at the time.

That distinction may become increasingly important as AI-related claims begin working their way through Canadian courts.

Good Governance Doesn't Need to Be Complicated

Many business owners assume AI governance requires enterprise software, consultants and thousands of pages of documentation.

I don't believe that's true.

Good governance begins with understanding.

Know where AI is being used.

Understand what information employees are sharing.

Decide which business decisions always require human judgment.

Train people.

Review important work.

Document why important decisions were made.

Improve the process over time.

Governance isn't about bureaucracy.

It's about leadership.

Where I Believe Things Are Heading

In my opinion, Ontario is entering the early years of AI governance.

We're still learning.

Governments are learning.

Businesses are learning.

Courts are learning.

That's completely normal.

If my experience with other regulatory frameworks is any guide, the legal landscape we see today will look different five years from now and almost certainly different ten years from now.

That doesn't concern me.

It's how common law develops.

Legislation is introduced.

Real-world situations test it.

Courts interpret it.

Regulators respond.

Businesses adapt.

The cycle repeats.

Organizations that wait for every question to be answered before acting may discover they spent years standing still.

The organizations that begin building good governance today will already have the culture, documentation and experience needed to adapt as expectations evolve.

Five Things You Can Do This Month

You don't need to wait for another Act of Parliament or another provincial regulation.

You can begin today.

1. Find out where AI is already being used.

The answer may surprise you.

2. Develop a practical AI Use Policy.

Keep it understandable.

People follow policies they understand.

3. Decide where human review is mandatory.

Not every decision carries the same consequences.

Identify the ones that matter most.

4. Train your managers.

Technology changes quickly.

Leadership responsibilities don't.

5. Begin documenting governance decisions.

Good documentation demonstrates good-faith management and provides evidence that your organization took responsible steps based on what was known at the time.

Moving Forward From Today

Artificial intelligence isn't waiting for governments to finish writing legislation.

It's already changing how Ontario businesses compete, hire, communicate and make decisions.

Over the coming years we'll almost certainly see additional legislation, regulatory guidance, court decisions and evolving insurance expectations.

Some of today's assumptions will prove correct.

Others won't.

That's simply how governance matures.

The organizations that succeed won't be the ones trying to predict every legal outcome.

They'll be the organizations that build a culture of responsible innovation.

They'll understand where AI is being used.

They'll involve people where judgment matters.

They'll document important decisions.

They'll remain flexible as expectations evolve.

Most importantly, they'll recognize that governance isn't about slowing innovation.

It's about building enough trust that innovation can continue with confidence.

I believe Ontario businesses have an opportunity to lead.

The organizations that begin building trust today will be far better prepared for whatever tomorrow's legal landscape becomes.

Editor's Note

Artificial intelligence governance continues to evolve rapidly across Ontario, Canada and internationally. This article reflects publicly available legislation, regulatory guidance, government announcements and other publicly available information available at the time of publication. Future legislation, court decisions and regulatory interpretation will continue shaping AI governance over the coming years.

Legal Disclaimer

This article is provided for educational and informational purposes only and reflects the author's opinions based on publicly available information available at the date of publication. It is not intended to constitute legal, regulatory, insurance or professional advice. Artificial intelligence legislation, regulatory guidance and judicial interpretation continue to evolve. Organizations should obtain advice from qualified legal, privacy, regulatory or insurance professionals before making decisions relating to AI governance or compliance. References to legislation, government initiatives and international frameworks are intended to promote awareness and should not be interpreted as definitive statements of legal obligation.

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