A business that pays a contractor to produce something with the help of an AI tool can still end up not owning what gets delivered — for the same reason it can happen with custom-built software.
Short answer
Usually, yes. Canadian copyright law's default rule is that the person who creates a work owns it — the Copyright Act makes the author the first owner unless they made it as an employee, which an independent contractor is not. Without a written assignment, a contractor's AI-assisted deliverable can belong to the contractor, not the business that paid for it.
Section 13(1) of the Copyright Act is blunt: “the author of a work shall be the first owner of the copyright therein.” That default only shifts to the employer automatically where the author made the work “in the employment of some other person under a contract of service” — an independent contractor works under a contract for services, not of service, so that automatic transfer never triggers. Ownership only moves with a written assignment: “no assignment or grant is valid unless it is in writing signed by the owner.”
This isn't a new problem AI created — it's the same gap custom software has always had. “An independent contractor developer is not your employee, which means that without an explicit written assignment clause, the developer may own the copyright in the code they wrote for you — even though you paid for it.” The same logic reaches whatever a contractor produces with an AI tool's help — a report, a design, a piece of marketing copy — not just code. A present-tense assignment clause, not a bare licence to use the deliverable, is what actually moves ownership.
A contractor feeding a client's files into their own personal AI subscription is, functionally, handing that data to a sub-processor the client never chose. PIPEDA's vendor-accountability principle — the business stays responsible for information transferred to a third party for processing — doesn't stop at the first hop. A contract that says nothing about which tools a contractor may run client data through leaves that decision entirely to the contractor.
Whose tools a worker uses is itself one of the factors Ontario law weighs when deciding whether someone is really a contractor or really an employee — a contractor who “uses their own equipment and bears those costs” is a contractor signal, while a business dictating exactly which AI platform must be used and how starts to look more like direction over method. A clause that lets the contractor choose their own tools, within limits, keeps that distinction intact.
See also: the equivalent question for staff rather than contractors, the accountability rule this contractor scenario is really a variant of.
Deciding upfront who owns what a project produces belongs in the planning stage — ai-strategy-roadmapping covers that ground.
