DeepSeek and Canada’s Geopolitical Challenges: Policy Responses, Trade Relations, and Security Concerns

Published On: March 2025Categories: Editorials

Author(s):

Leisha Toory

Leisha Headshot – Leisha Toory
Disclaimer: The French version of this text has been auto-translated and has not been approved by the author.

The rapid advancement of artificial intelligence (AI) has introduced complex challenges for nations worldwide, including Canada. A notable development is DeepSeek, an AI model developed by a Chinese startup, which has garnered international attention for its sophisticated capabilities in data analysis, cybersecurity, and automation (Reuters, 2025a). As the geopolitical landscape evolves, Canada faces significant policy decisions regarding its engagement with such AI technologies, trade relations, and national security.

DeepSeek’s emergence raises concerns about AI governance, intellectual property, and technological dependency. The Government of Canada has proactively issued comprehensive policy guidance to ensure the responsible deployment of AI in its operations (Government of Canada, 2024). Examples include guiding principles for the use of AI in government, a framework outlining ethical and responsible practices for integrating AI technologies into government operations to ensure transparency, accountability, and public trust. However, the rise of AI models developed outside North America introduces new complexities regarding data sovereignty and foreign influence. Canadian policymakers must navigate the intersection of economic opportunity and security risks when considering collaborations with or restrictions on AI technologies originating from non-Western states (Department of National Defence and Canadian Armed Forces, 2024).

Trade relations between Canada and China have experienced fluctuations due to political tensions, human rights concerns, and economic policy shifts (Reuters, 2025b). DeepSeek adds another dimension to these dynamics, as its applications in financial modeling, medical research, and cybersecurity could be attractive to Canadian industries seeking innovation. However, AI trade partnerships come with risks, including potential reliance on Chinese-developed AI models for critical sectors such as healthcare and finance. This raises the question of how Canada can balance economic engagement with China while safeguarding domestic AI innovation and ensuring that Canadian technology remains competitive on the global stage (OSFI, 2024).

Security concerns surrounding DeepSeek extend beyond trade into intelligence and national defense. The Canadian Centre for Cyber Security has warned about the vulnerabilities associated with foreign-developed AI models, particularly those capable of advanced data collection and autonomous decision-making (Canadian Centre for Cyber Security, 2025a). Given that AI is increasingly utilized in military applications, surveillance, and critical infrastructure management, the adoption of AI models like DeepSeek must be scrutinized within the framework of Canada’s national security policy (Canadian Centre for Cyber Security, 2025b). The federal government may need to strengthen its cybersecurity protocols, impose stricter regulations on AI imports, and collaborate with intelligence partners, such as the Five Eyes alliance, to mitigate risks associated with foreign AI dominance.

Canada’s policy response to DeepSeek and similar AI technologies must involve a multi-faceted approach. First, investment in domestic AI research and development is crucial to ensure that Canadian companies remain at the forefront of technological advancements. Public-private partnerships and increased funding for AI startups could help reduce dependence on foreign AI solutions while fostering innovation within Canada’s technology sector (NSERC, 2024). Additionally, establishing clear regulatory guidelines on AI ethics and data protection will be essential in maintaining Canada’s reputation as a leader in responsible AI governance (Government of Canada, 2024).

Diplomatic engagement with China and other AI-leading nations will also play a role in shaping Canada’s approach to AI trade policies. Rather than outright restrictions, Canada could adopt a framework of selective AI collaboration, where partnerships are pursued only in non-sensitive industries while imposing safeguards on AI applications that pose security risks. This approach would align with Canada’s broader trade strategy, which seeks to diversify economic partnerships while maintaining national interests (Reuters, 2025b).

At an international level, Canada should advocate for global AI governance standards that address ethical concerns, data transparency, and security risks associated with AI development. Working alongside allies in the G7 and the Organisation for Economic Co-operation and Development (OECD), Canada could push for agreements that regulate AI trade and limit the proliferation of high-risk AI applications, similar to existing frameworks for nuclear non-proliferation and cybersecurity (Canadian Centre for Cyber Security, 2025b).

The intersection of DeepSeek’s emergence and Canada’s geopolitical strategy underscores the growing importance of AI in global affairs. Policymakers must navigate the opportunities and risks presented by foreign AI models, ensuring that Canada remains a leader in AI innovation while protecting its national security and economic stability. Through strategic investment, regulatory oversight, and diplomatic engagement, Canada can position itself as a key player in shaping the future of artificial intelligence governance on the world stage.

References

Leisha Toory  is the founder of the Human Rights Award-nominated Period Priority Project, a consultant with the United Nations Institute for Social Development and United Nations Institute for Training and Research, an Amnesty Canada Gender Rights Specialized Team member, and holds a BA in Political Science from Memorial University.