Automated and Connected Vehicles (ACVs) are reshaping modern transportation by using advanced sensors, machine learning, and artificial intelligence to reduce the need for human input. The potential for effortless driving and increased productivity has generated interest among both road users and businesses in the sector. Yet, regulatory responses across Canada, the European Union (EU), and the United States (U.S.) remain inconsistent, with no standardized approach to ACV governance. In Canada, for example, ACVs are regulated separately by federal and provincial governments, requiring adherence to both levels. For businesses, understanding the nuances of ACV governance is required to ensure compliance with evolving regulations and industry standards at all times.
This bulletin outlines the legal framework governing ACVs in Canada and beyond. As the first of a series to come, it offers a starting point for businesses and users navigating this space.
The 6 Levels of ACV Automation
The Society of Automotive Engineers (SAE) defines six levels of automation to guide governments in developing individualized ACV-related regulations [1]. These levels range from no automation (Level 0) to full automation (Level 5), showing a gradual shift from human control to system-driven operations. As regulators take distinct approaches—some imposing restrictions on certain levels while others welcome broader integration—interpreting ACV requirements demands familiarity with the levels outlined below.
| LEVEL | AUTOMATION | DESCRIPTION | HUMAN ROLE |
|---|---|---|---|
| 0 | No Automation | The driver controls everything. | Full control |
| 1 | Driver Assist | The vehicle has basic support like cruise control. | Steering and monitoring |
| 2 | Partial Automation | The vehicle's system manages acceleration, braking, and steering, while the driver monitors. | Driver oversight |
| 3 | Conditional Automation | The ACV’s system controls functions but requires humans to take over when needed. | Standby monitoring |
| 4 | High Automation | The vehicle operates autonomously in conditions without human input. | Occasional intervention |
| 5 | Full Automation | Human input is not required under any condition. | No intervention |
Responses to Automated and Connected Vehicles (ACVs) in Canada
ACV regulation in Canada is shared among federal, provincial, and territorial authorities, necessitating compliance across multiple jurisdictional levels. At the federal level, the Ministry of Transportation oversees ACV integration and road safety, specifically handling:
| FRAMEWORKS | REGULATION | DETAILS |
|---|---|---|
|
Key Legislation |
The Motor Vehicle Safety Act (MVSA) governs manufacturer compliance for vehicle safety. |
Lacks specific ACV provisions; existing standards still apply across all jurisdictional laws [2]. |
|
Testing Guidelines |
2018: Transport Canada issued Guidelines for Testing Automated Driving Systems, updated to Version 2.0 in later years. |
Refines testing protocols and clarifies governmental roles; non-binding but signals regulatory direction [3]. |
|
Long-Term Goals |
Canada’s Safety Framework for Automated and Connected Vehicles outlines a roadmap for ACV integration on public roads. |
Sets foundational principles for future regulation and safe deployment [4]. |
|
Proposed AI Regulation |
Bill C-27 (abandoned) included the Artificial Intelligence and Data Act (AIDA) to govern AI. |
If revived, would likely classify ACVs as high-risk AI systems, imposing stringent compliance obligations. |
Complementing federal guidelines are provincial initiatives tailored to their unique transportation needs and regional contexts.
| PROVINCE | REGULATION | DETAILS |
|---|---|---|
| Alberta |
Alberta does not include specific ACV legislation within its Traffic Safety Act but the province has conducted trials on semi-autonomous systems. |
The Alberta Motor Transport Association (AMTA) leads these pilot programs, supported by $2.3 million in funding from Transport Canada [5]. |
| Atlantic Provinces |
Provinces like New Brunswick, Prince Edward Island, Newfoundland, and Labrador have not yet enacted specific ACV laws but participate in federal initiatives. |
N/A |
| British Columbia |
British Columbia regulates ACVs through its Motor Vehicle Act, enforcing strict limits on higher-level automation [7]. |
As of April 2024, Level 3 and above ACVs cannot operate on public roads without prior approval through a pilot project or new regulations. Unauthorized operation is considered an offense, with penalties including fines or imprisonment. |
| Ontario |
Ontario has a well-developed regulatory framework for ACVs, governed by the Highway Traffic Act and complimented by the Automated Vehicle Pilot Program (AVPP). The Act regulates the public operation of SAE Level 3 ACVs, while the AVPP oversees a pilot project to assess ACV use on Ontario highways [8-9].
Any vehicle that fails to meet all requirements of the federal Motor Vehicle Safety Act cannot undergo testing unless Transport Canada grants a specific exemption. |
To qualify for testing Level 4 and 5 ACVs, applicants must: (1) Declare the technology is safe and effective, with proof if requested. (2) Accept full liability. (3) Provide information about the vehicle’s operational design parameters. (4) Ensure the ability to monitor and control the vehicle if needed. (5) Ensure the ability to safely stop the vehicle and explain how. (6) Place a signed approval form visibly in the vehicle and with the remote operator. (7) Provide a “work zone and first responders’ interaction plan” to authorities. (8) Inform affected municipalities about testing locations and get approval for provincial highways; and (9) Have signs indicating the vehicle is a driverless automated vehicle being tested. |
| Québec |
Québec leads in ACV regulation and developments with its Highway Safety Code and initiatives for Levels 3,4, and 5 vehicles [10]. |
With government funding, Québec launched Canada’s first self-driving electric shuttle pilot to test fully electric ACVs on public roads. Level 3 ACVs can operate publicly with authorization, while Levels 4 and 5 require special approval from the Ministry of Transport, the Société de l’assurance automobile du Québec (SAAQ), and other authorities. |
| Manitoba |
In Manitoba, the Vehicle Technology Testing Act provides exemptions from highway regulations to support advanced vehicle technology testing [11]. |
The Minister of Transportation can issue ACV testing permits under controlled conditions. |
| Nova Scotia |
Nova Scotia’s Traffic Safety Act was introduced six years ago but has yet to receive royal proclamation. The Act modernizes highway traffic legislation concerning ACVs and grants the Minister of Transportation and Infrastructure Renewal the authority to develop and enforce regulations governing their use [12]. |
The Act distinguishes between “autonomous vehicle” and “autonomous mode,” highlighting the unique operational capabilities of ACVs. |
| Canadian Territories |
The Canadian territories—Yukon, Northwest Territories, and Nunavut—do not have specific laws for ACV regulation. |
N/A |
The European Union (EU) and United States (U.S.) Responses to ACVs
| REGULATION | DETAILS |
|---|---|
|
The General Safety Regulation |
The EU has improved vehicle safety and road standards. While the regulation does not set specific technical requirements for ACVs, it acknowledges that human error causes 95% of road accidents. Instead, it requires compliance with other legislative measures, such as the Commission Implementing Regulation and the UN Economic Commission for Europe’s (UNECE) global standards [13-14]. |
|
EU’s Strategy on Automated Mobility |
The European Commission has also introduced many regulations and publications relating to ACVs [15]. |
|
AI Act (EU 2019/2144) |
Under the AI Act (EU 2019/2144), AI systems used in ACVs are categorized as high-risk, which encourages careful regulatory oversight for manufacturers and users [16]. This legislation works alongside UNECE standards to provide a comprehensive regulatory framework. |
|
eCall |
Since April 2018, all new cars in the EU have been required to include eCall: a system that automatically dials 112 and transmits location data in the event of a severe accident [17]. Only during serious collisions will the system become active. To protect user privacy, it does not continuously track vehicle movements. |
| LEVEL | REGULATION | DETAILS |
|---|---|---|
|
Federal |
The Federal Motor Vehicle Safety Standards (FMVSS)—enforced by the National Highway Traffic Safety Administration (NHTSA)— regulate ACV safety [18]. |
The NHTSA oversees vehicle safety, crash prevention, and automated driving systems to ensure compliance with motor vehicle laws [19]. Under its authority, manufacturers can produce only 2,500 ACVs per year unless regulations increase this limit. This year, the Trump administration is shifting focus toward accelerating ACV deployment. The NHTSA’s annual production cap of 2,500 ACVs per manufacturer will be lifted, allowing for greater production capacity, and a proposed “no tax” policy on the consumption of U.S.-made vehicles is set to increase their demand. |
|
State |
There are currently no federal statutes governing ACVs in the U.S., leaving states to regulate them individually. Some state laws currently focus on ACV testing and operation, while others will apply once a national standard is in place. |
Currently, 34 states have passed ACV legislation, while 16 have not. |
The Road Ahead
Understanding the variations in ACV standards and regulations—knowing how, when, and why to comply—is necessary for both users and businesses to remain compliant and successfully navigate the market. For businesses, this means not just meeting safety and testing rules, but also managing supply chain risks, securing permits, and avoiding liability as ACVs roll out. Our team at Fasken is dedicated to keeping you up to date on the latest ACV developments. Contact one of our experts for further insights or assistance.
