AI Tools That Comply With Quebec's Law 25

Quebec's Law 25 creates specific compliance obligations when AI tools process personal information. Under sections 12 and 14, organizations must obtain explicit consent and implement technical safeguards before deploying AI systems that handle Quebec residents' data. The Commission d'accès à l'information du Québec (CAI) has enforcement authority with penalties reaching C$25 million or 4% of worldwide turnover under section 91.

Compliance requires architectural decisions about data residency, processing controls, and vendor relationships that most AI platforms don't address.

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Understanding Law 25's AI requirements

Law 25's modernization of Quebec's private sector privacy law creates distinct obligations for AI deployment. Section 63.1 requires privacy impact assessments for automated decision-making systems. Section 67 mandates that organizations using AI for profiling obtain explicit consent and inform individuals when automated decisions affect them.

The law treats AI tools as information processing systems subject to the same data protection requirements as any other technology. This means AI platforms that process personal information must comply with Law 25's consent, residency, and security requirements under sections 8-18.

"Law 25 section 17 requires that personal information transferred outside Quebec receive protection equivalent to what the law provides. Most US-based AI platforms cannot meet this standard due to the CLOUD Act's requirement for US government data access, regardless of storage location."

The CAI's guidance published in 2023 clarifies that uploading documents containing personal information to AI chat systems constitutes "communication" under section 17. Organizations must ensure the receiving system provides adequate protection equivalent to Law 25's standards.

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Data residency and cross-border transfer restrictions

Section 17 of Law 25 prohibits transferring personal information outside Quebec unless the receiving jurisdiction provides equivalent protection. This creates immediate compliance issues for popular AI platforms hosted in the United States.

US platforms operating under the CLOUD Act (Clarifying Lawful Overseas Use of Data Act) allow US government access to data regardless of where it's stored. The CAI considers this incompatible with Law 25's protection requirements under section 17.

Quebec law firms using ChatGPT or similar platforms for document analysis face particular risk. Client information uploaded to US-based systems creates potential Law 25 violations under section 17 and ethical concerns under Barreau du Québec guidance on technology and confidentiality.

"Under Law 25 section 17, organizations must demonstrate that foreign jurisdictions provide 'equivalent protection' to Quebec law. The CLOUD Act's extraterritorial reach means US-based AI platforms cannot meet this adequacy standard without additional contractual safeguards that most providers don't offer."

Organizations need AI tools with genuine Canadian data residency. This means Canadian corporate control, Canadian infrastructure, and freedom from US legal obligations that could compromise data protection under section 17's adequacy requirements.

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Consent requirements for AI processing

Law 25 sections 12 and 14 establish Quebec's consent framework, requiring explicit consent for personal information processing. Section 13 specifies that consent must be manifest, free, and informed. AI tools processing personal information require explicit consent that specifies the processing purpose and any automated decision-making.

Generic terms of service don't satisfy Law 25's consent requirements under sections 12-14. Organizations must provide clear information about:

• What personal information the AI system will process (section 8)
• The specific purposes for processing (section 12)
• Whether the system makes automated decisions affecting individuals (section 67)
• How long information will be retained (section 10)
• Whether information will be shared with third parties (section 17)

Section 13 allows withdrawal of consent at any time. AI tools must support consent withdrawal and provide mechanisms to delete personal information when consent is revoked, as required under section 28's right to erasure.

Law firms face additional complexity under solicitor-client privilege rules. The Barreau du Québec's guidance on technology requires that client confidentiality protections exceed Law 25's minimum standards.

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Privacy impact assessments and automated decisions

Section 63.1 requires privacy impact assessments (PIAs) before implementing systems that pose elevated privacy risks. AI tools often trigger PIA requirements due to their capacity for automated profiling and decision-making affecting individuals.

The CAI's PIA framework evaluates several factors under section 63.1:

• Volume and sensitivity of personal information processed
• Automated decision-making capabilities under section 67
• Data sharing arrangements under section 17
• Security measures and breach risks under section 25
• Individual rights protection mechanisms under sections 27-33

Organizations using AI for hiring, credit decisions, or client assessment typically require PIAs under section 63.1. The assessment must identify risks and mitigation measures before system deployment.

"Section 67 specifically addresses automated decision-making, requiring that individuals be informed when AI systems make decisions affecting them and providing rights to obtain human intervention. This applies to any AI tool that processes personal information to make decisions about individuals, including recruitment, credit, or service delivery systems."

PIAs must be submitted to the CAI for high-risk processing activities under section 63.1. AI systems processing health information, biometric data, or making significant automated decisions usually meet this threshold.

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Enforcement and penalties

The CAI has broad enforcement powers under Law 25's penalty structure. Section 91 establishes administrative monetary penalties reaching C$25 million or 4% of worldwide turnover—significantly exceeding federal PIPEDA's C$100,000 maximum penalty.

Recent CAI enforcement actions demonstrate active oversight. In 2024, the Commission issued C$2.8 million in penalties for privacy violations involving automated systems under sections 89-91. The CAI specifically noted inadequate consent mechanisms under section 12 and cross-border transfer violations under section 17.

Organizations face several enforcement risks under sections 89-91:

• Individual complaints triggering CAI investigations under section 77
• Systematic audits of AI system deployments under section 70
• Data breach notifications revealing non-compliant processing under sections 63.1-63.2
• Professional regulatory body complaints (particularly for law firms and healthcare providers)

The CAI's 2023 annual report indicated increased focus on AI and automated decision-making systems under section 67. Compliance violations involving AI tools represent a growing proportion of enforcement actions.

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Sector-specific compliance considerations

Different industries face varying Law 25 compliance complexity when deploying AI tools. Quebec's legal sector operates under both Law 25 and Barreau du Québec confidentiality rules that often exceed statutory minimums.

Legal services: Solicitor-client privilege requires that client information remain under lawyer control. US-based AI platforms subject to CLOUD Act access requests cannot maintain this control standard required under section 17.

Healthcare: Section 19 of Law 25 creates special rules for health information. AI tools processing patient data require enhanced consent under section 12 and additional security measures under section 25.

Financial services: Quebec's financial institutions must comply with both Law 25 and federal PIPEDA under section 2. AI tools for credit decisions or customer profiling trigger multiple regulatory frameworks requiring compliance with the stricter Law 25 standards.

Professional services: Quebec SMBs in accounting, consulting, and engineering face the same Law 25 requirements but may qualify for simplified compliance procedures under CAI guidance for smaller organizations.

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Practical compliance architecture

Law 25 compliance requires AI tools built with privacy-by-design principles under section 3.2. This means Canadian data residency, explicit consent mechanisms, and processing controls built into the platform architecture to satisfy sections 12-17.

Augure addresses these requirements through sovereign Canadian infrastructure. The platform operates under Canadian corporate control without US parent companies or investors that could create CLOUD Act exposure, ensuring compliance with section 17's adequacy requirements.

Key architectural features for Law 25 compliance include:

• Data processing within Canadian borders (section 17)
• Explicit consent collection and management (sections 12-14)
• Individual rights fulfillment - access, correction, deletion (sections 27-33)
• Audit trails for regulatory compliance (sections 63.1, 70)
• Integration with existing privacy management systems (section 3.2)

Organizations evaluating AI tools should assess vendor compliance capabilities before deployment. Post-implementation compliance remediation is significantly more complex and costly than selecting compliant tools initially under Law 25's privacy-by-design requirements.

"Law 25 section 3.2 requires privacy-by-design implementation, meaning organizations must choose AI tools architected for compliance rather than attempting to retrofit privacy protections after deployment. This fundamental requirement makes vendor selection critical for avoiding section 91 penalties."

The compliance conversation often focuses on policies and procedures. But the foundational requirement is AI infrastructure that makes compliance possible through Canadian sovereignty and privacy-by-design architecture under sections 3.2 and 17.

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Quebec organizations need AI tools designed for Law 25 compliance from the ground up. Augure provides sovereign AI infrastructure that eliminates cross-border transfer concerns under section 17 while supporting the privacy rights and consent mechanisms Law 25 requires under sections 12-33. Learn more about compliant AI deployment at augureai.ca.