Artificial intelligence has made it faster and cheaper to build software, launch new products and automate parts of a business. It has not changed who answers for the result. For a British Columbia business, the legal questions are often settled by decisions made early, usually before anyone thinks to call a lawyer.
We see the same issues arise whether a company is building its own platform, hiring a developer or adding an AI tool to its operations. Four of them deserve attention before the technology goes live: ownership, confidential information, responsibility for what the technology says and does, and a regulatory landscape that is still moving.
Make sure you own what you are paying for
Paying for software does not, on its own, make you the owner of its copyright. An employer will generally own work an employee creates on the job. An independent contractor is a different matter: without a signed written assignment, the developer you paid may still own the code.
AI adds a second layer of uncertainty. Canadian law has not settled whether, or to what extent, copyright protects work generated by a machine. Until it does, a business should not assume that purely machine-generated code, content or designs carry the same protection as human work.
The practical response is straightforward. Have every employee and contractor sign intellectual property terms before work begins, including an assignment and a waiver of moral rights. Ask developers to disclose where AI tools were used and to confirm that open-source components are compatible with your plans. Those records also matter later, as investors and buyers will want to see a clean chain of title.
Know where your information goes
Every prompt is a disclosure to someone. Before staff paste a customer list, a draft contract or a financial model into an AI tool, the business should know whether the provider stores that information, who can access it and whether it may be used to train a model. Consumer and enterprise versions of the same tool can have very different terms.
Personal information raises the stakes. British Columbia's private-sector privacy rules apply whether or not the technology involved is new. Canada's privacy regulators, including the BC commissioner, have also published joint principles for generative AI, which show how they expect organizations to approach these issues.
A short written AI policy goes a long way. It should say which tools are approved, what may never be entered into them and who is responsible for checking the output. The vendor's terms and your own privacy policy should then be reviewed to confirm they match what the business actually does.
Expect to answer for your technology
This is not a theoretical risk. A BC tribunal has already held a business responsible when the chatbot on its website gave a customer incorrect information, and it rejected the argument that the chatbot was somehow separate from the business.
The amount awarded was modest, but the reasoning is what matters. It also did not help that the correct information appeared elsewhere on the website. A business that puts automated tools in front of customers should test them, monitor them and be ready to stand behind what they say.
Your contract with the vendor deserves the same scrutiny. Technology agreements often limit the provider's liability to a small amount and disclaim the accuracy of the output, which can leave the customer carrying most of the risk. Before signing, look closely at ownership of inputs and outputs, data use, security, service levels, indemnities and what happens to your data when the relationship ends.
Plan for rules that are still taking shape
Canada has no comprehensive federal AI statute, and that should not be mistaken for an absence of law. Existing rules on privacy, contracts, negligence, consumer protection and intellectual property all continue to apply. Our earlier article, Canada Has No AI Law - not yet. Your Business Still Has AI Obligations, looks at those obligations in more detail.
New rules are also on the way. The federal government has signalled a targeted approach rather than a single AI law, and proposals on privacy reform and on certain AI chatbot services are already before Parliament. Any business building in this area should keep an eye on them, as they may change before becoming law.
The best preparation is ordinary good governance: know what technology you use, what data it touches, who is accountable and how a person can review an automated result. A company that can answer those questions will adapt more easily as the law develops, and will be better placed when a lender, investor or buyer starts asking.
How we can help
Whiteboard Law's senior lawyers advise British Columbia businesses on technology, artificial intelligence, corporate matters, capital raising and M&A. Whether you are commissioning new software, negotiating a vendor agreement or preparing your technology for investment, an early conversation is usually the least expensive one. Contact us at 250-300-4652 or admin@whiteboardlaw.com.
This article provides general information only and is not legal advice. It reflects the law as of November 2026. Please consult a lawyer about your particular circumstances.