Can Governments Foster Innovation Without Stifling Growth?

For tech companies planning their next phase of growth, all these regulations require much more than simple checking compliance boxes - foresight and adaptability are key here. At Pender and Howe, we work with leadership teams who anticipate these shifts, not just react to them. 

Whether it’s AI governance, compliance costs, or competition laws, the key question remains: how can companies thrive when the rules are still being written?

AI regulations and ethical considerations

It seems like AI is already moving faster in 2025 than it did in all of last year, and that’s saying a lot. Regulators can barely keep up with this pace. 

In Canada, the Artificial Intelligence and Data Act (AIDA) is set to introduce new rules for AI governance, focusing on transparency, accountability, and ethical considerations. Meanwhile, the U.S. is in flux about how to regulate AI. A Biden law has since been rescinded, so the county must decide whether to regulate through broad federal oversight or state-by-state policies.

For companies using AI, these regulations could mean greater scrutiny of their models, stricter guidelines on bias mitigation, and increased reporting requirements. While the goal is to prevent harm and ensure fairness, heavy-handed oversight could slow down innovation, making it harder for companies - especially startups - to develop cutting-edge AI solutions without running into compliance roadblocks.

What this means for leadership

Tech leaders essentially have no choice but to build regulatory awareness into their AI strategies. That means developing internal policies now, rather than waiting for mandates to roll out. Companies that can demonstrate responsible AI usage early on will be better positioned when the rules inevitably tighten.

What this means for leadership

Compliance needs to be perceived as beyond merely avoiding penalties and more of an opportunity to strengthen consumer confidence. Companies that take privacy seriously and prioritize transparency will always stand out in a business environment where trust is often as valuable as technology itself.

Big tech antitrust and competition

Regulators are turning up the heat on Big Tech. In the U.S., antitrust lawsuits against giants like Google and Amazon signal a growing effort to curb monopolistic behavior, while Canada is rethinking its own competition laws.

For smaller tech firms, these shifts could create new opportunities, especially if they actually lead to a more level playing field. But there’s also a risk that overly broad regulations could make it harder for mid-sized firms to scale, limiting the very competition that regulators aim to protect.

What this means for leadership

Growth-stage tech companies should keep a close eye on these legal battles. If regulators push for structural changes - such as breaking up monopolies or enforcing stricter market access rules - there could be new avenues for smaller players to compete. On the flip side, compliance with new laws could add an unwanted layer of complexity for emerging firms.

Cross-border tech policies

For tech firms operating across North America, regulatory fragmentation (not to mention the potential for tariffs) is a headache. While Canada and the U.S. share economic ties, their approaches to tech policy are not exactly aligned. The result? Companies face conflicting rules, differing compliance timelines, and extra complexity when expanding into new markets.

As governments try to harmonize policies - or, in some cases, move in opposite directions - tech leaders must stay ahead of these shifts to avoid regulatory surprises.

What this means for leadership

A cross-border mindset is no longer optional. Companies that keep regulatory differences in mind and incorporate them into their expansion strategies will have a much smoother path to scaling across North America.

The Pender and Howe bottom line

Regulation is inevitable. The challenge for tech leaders goes beyond simply following the rules and must be about shaping business strategies that allow for innovation despite them.

At Pender and Howe, we work with companies that are growing in a complex regulatory landscape. Our global and local expertise helps leadership teams identify individuals that support their organization in staying ahead of these changes and make informed decisions that drive both compliance and long-term success.

The key takeaway here is that regulations will evolve, but tech leaders who stay ahead of them will not only evolve but thrive.