AI and Law 25: Compliance Guide for Professionals

Quebec’s Law 25 on personal information protection is now in effect, and it imposes significant new obligations for organizations using artificial intelligence. As an AI transformation consultant, I’ll walk you through the key issues and the concrete steps you need to take.

Understanding Law 25 and Its Implications for AI

Law 25 considerably strengthens personal data protection and introduces several new requirements. For organizations using AI, this means increased accountability regarding data provenance, usage, and retention. AI systems, whether developed internally or acquired from external providers, must meet stricter compliance standards.

Consider a Quebec financial institution deploying a chatbot for customer service. If that system processes personal data—names, account numbers, transaction histories—it must comply with Law 25. That includes explicit consent documentation, minimizing collected data, and the ability to honor access or deletion requests.

Five Pillars of AI Compliance

1. Data Mapping
Identify precisely which personal data your AI system processes. Document its source, retention period, and usage. A Montreal telemedicine clinic, for example, must document how its diagnostic algorithms use medical records.

2. Explicit Consent
Consent can no longer be implicit. Users must know that an AI is analyzing their data and agree to it clearly. This applies even to secondary analyses—if an AI system discovers new patterns in the data, this new usage may require fresh consent.

3. Model Governance
Document how your AI model was trained. Which datasets? Who collected them? Do they contain personal data? A law firm using generative AI to analyze contracts must ensure that AI wasn’t trained on confidential client data.

4. Access and Deletion Rights
Individuals have the right to request access to their data and its deletion. If someone asks for their information to be erased, the organization must be able to do it—even if that data was used to train an AI model. This raises significant technical challenges.

5. Impact Assessment
Before deploying an AI system that processes personal data, conduct a Privacy Impact Assessment (PIA). Identify risks and implement mitigation measures.

Case Study: Quebec Manufacturing SMB

A Montreal SMB plans to implement a predictive AI system to optimize its supply chain. The system would analyze employee data (work hours, performance) to better plan production. Here’s how to ensure compliance:

Obtain consent from employees before any analysis
Document usage: explain precisely what the AI does with the data
Secure: implement encryption and access controls
Establish a process to honor access or deletion requests
Train your team on compliance issues

The Technical Challenges of AI Compliance

The biggest challenge? Modern AI models, particularly large language models, are “black boxes.” It’s often difficult to explain precisely how they use data. Yet Law 25 demands transparency and traceability. This means some “plug-and-play” approaches—using a generative AI API without verification—can be risky from a compliance standpoint.

For a Quebec accounting firm looking to automate tax return preparation with AI, the safest approach would be to use local models that you fully control, rather than cloud services where you don’t know exactly how data is being processed.

Immediate Action Plan

Audit: Identify all AI systems in production and the data they process
Classification: Categorize by risk level (high, medium, low)
Documentation: Document compliance for each system
Update: Implement missing measures (consent, deletion processes, etc.)
Training: Educate your team about Law 25
Monitoring: Establish an ongoing compliance process

Conclusion

Law 25 isn’t an obstacle to AI innovation—it’s an opportunity to build trust. Quebec organizations that embrace compliance now position themselves as responsible leaders. They also attract top talent and demanding clients, for whom data protection is a priority.

Book your 30-minute discovery call to discuss how to ensure compliance for your AI initiatives. Visit laeka.org/services/