Karsten Wenzlaff, Advisor
August 26th, 2025
Karsten Wenzlaff is a Crowdfunding and Fintech Expert from Germany. He is Secretary-General of Digit[...]
California AI Law and U.S. Visa Fees Open Doors For Canada
Regulation | Sep 30, 2025
New U.S. Policies Could Redirect AI Growth and Skilled Workers to Canada
On September 29, 2025, California Governor Gavin Newsom signed the Transparency in Frontier Artificial Intelligence Act into law (Senate Bill 53), the first binding U.S. law directed at frontier AI developers.
Overview
The law requires companies with the largest models to:
- Publish safety frameworks and update them within 30 days of any change
- Issue transparency reports before deploying new or substantially updated systems
- Report incidents including crimes committed without human oversight or deceptive model behaviour to California’s Office of Emergency Services within 15 days, or within 24 hours if there is an imminent threat
- Whistleblower protections and civil penalties of up to $1 million are also part of the framework, enforceable by the Attorney General’s office
See: What Toronto Can Learn from Tel Aviv’s Start-Up Scene
Unlike last year’s failed SB 1047, the new law does not require third-party audits or shutdown mechanisms. Instead, it focuses on transparency. Starting in 2027, anonymized summaries of incidents will be published annually to inform the public.
Who's in Scope?
Developers that cross the extreme compute threshold of 10^26 FLOPs (computer system that can process a hundred trillion trillion mathematical operations) OR exceed $500 million in annual revenue.
How Companies and Countries Are Responding
The response has been mixed. Anthropic backed the compromise version after negotiations, while Meta set up a state-level PAC and OpenAI pushed for federal or international alternatives.
Critics warn that duplicative state rules could fragment compliance.
See: CMA Lessons on Competition and Growth for Canada
But still, California has a history of rules spreading nationally, from privacy to environmental standards. OpenAI, Anthropic, Meta, and Google DeepMind are among the large AI labs likely affected by SB 53. Three of which are based in California with DeepMind is headquartered in the UK but parent company Alphabet is in Cali.
Globally, the EU AI Act regulatory framework is already in force and more comprehensive, applying risk-based obligations across industries. Canada’s Artificial Intelligence and Data Act stalled earlier this year, leaving the country with a voluntary code of AI ethics. Other U.S. states may also look to California’s model as a template for their own AI laws.
For AI finance fintechs, it's pretty clear to see that California has drawn a line in the sand to publish safety processes, disclose updates, and prepare reporting systems. Canadian startups and scale-ups serving California clients will need to align to ensure compliance, and these same steps could form the basis of a future Canadian law if Ottawa revives its AI plans. NCFA has published numerous articles on how AI is reshaping fintech to highlight opportunities and risks.
Rules and Visas Could Impact North America’s Talent Flows
California’s new AI law shows how U.S. states are moving ahead with governance while Washington is moving in the opposite direction on immigration. The two policies together are forcing companies to rethink where they build and hire.
On September 21, 2025, USCIS raised H-1B visa fees for the first time in nearly two decades. The registration fee jumps from $10 to $215, the petition filing fee increases to $780, and employers must also pay a $600 asylum surcharge on each petition. In addition, a $100,000 payment applies to every new H-1B petition filed after September 21, 2025.
See: Cohere Adds $100M as Ottawa Launches AI Sprint
For large technology firms submitting thousands of registrations, lottery costs alone now reach six figures (i.e. registration, petition and asylum fees), and with the $100,000 payment layered on top, sponsoring one skilled worker requires an unprecedented financial amount before salaries are even considered.At the same time, Senate Bill 53 requires large AI developers in California to comply with the AI transparency and safety law. For startups and scale-ups already facing higher labour costs from the visa changes, the compliance load makes expansion in California more expensive than some alternatives.
For Canada, this combination creates an opening. The federal government has kept immigration channels and recently launched Canada's first ever tech talent strategy in 2023, while luckily leaving it's own AI governance as a voluntary code of conduct instead of a binding law. Companies that find U.S. rules and visa costs too heavy can find both talent and policy breathing room north of the border. WELCOME TO CANADA!
Canada’s Startup Visa Faces Long Delays
As a caveat to the message that Canada welcomes top entrepreneurs, the reality is that Canada’s Start-up Visa (SUV) program which was created to bring global founders into the country is currently plagued with a backlog of more than 42,000 applications as of July 2025 with wait times longer than four years as reported by Betakit. As a result, the government added a three year open work permit so entrepreneurs can start working while waiting for permanent residency, but the backlog itself remains a major barrier. Ottawa also introduced a cap of 2,000 SUV applications in 2025 and plans to reduce it further to 1,000 in 2026. By comparison, Canada’s Innovation Stream under the Tech Talent Strategy remains far more flexible and designed with urgency in mind; it's LMIA (Labour Market Assessment Impact) exempt and can be processed in weeks.
Instead of blunt national cuts, Ottawa could manage qualifying organizations application caps that grow or shrink depending on their results. Incubators, angel groups, and venture funds with stronger records of scaling companies, creating jobs, and raising capital could endorse more entrepreneurs, while newer or weaker ones would be limited until they prove outcomes. This approach would raise quality of applicants while keeping the door open to founders from diverse regions. Coupled with the open work permit, it could restore SUV as a credible and inclusive option for entrepreneurs choosing where to build.
Outlook
Canada now has a limited window to attract both talent and innovation by pairing flexible immigration with a pragmatic approach to AI governance. Ottawa's next steps will determine how long that window stays open.
The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create aa vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, artificial intelligence, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
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