By the new year, Ontario drivers may be sharing the road with driverless cars.

The province is set to become the first in Canada to allow companies to test their self-driving vehicles in a 10-year pilot project that can be tweaked or extended by Ontario's Ministry of Transportation (MTO) as new technology is developed.

The pilot project will benefit not only technological innovation in the industry by giving driverless cars a new place to test their chops, but also Ontario's economy, road safety and ability to attract top notch researchers, experts say. So much so, that one researcher hopes to convince other provinces and territories to follow suit.

Ontario Transportation Minister Steven Del Duca announced Tuesday that the province will allow companies to test self-driving cars on its roads, starting Jan. 1, 2016.

'We need to step up'

Other districts in the United States, as well as certain areas in Europe and Asia already allow some degree of testing of autonomous vehicles on their roads.

Some U.K. cities have experimented with low-speed, self-driving shuttles on streets closed to regular traffic. In the U.S., certain states have passed legislation allowing driverless cars on the road. California, Florida, Michigan, Nevada and Tennessee all allow this to some degree.

[It] really helps make the case that we should be operating here and help keep talent and technology here. - Alex Rodrigues, Varden Labs CEO

"We need to step up," Del Duca said during a news conference held at the University of Waterloo.

In Ontario, the self-driving cars will be allowed on any public road from Toronto's busy Highway 401 to less congested, residential cul-de-sacs during any time of the day or night, wrote Bob Nichols, a spokesman for Ontario's Ministry of Transportation (MTO).

Not every wannabe engineer can put their makeshift contraption on the road, though. Participants, which are limited to companies that originally manufactured the vehicle, technology companies, academic or research institutions, and manufacturers of parts for automated vehicles, must apply to take part in the pilot.

Each vehicle must have a human, with a valid driver's licence, behind the wheel, wrote Nichols, who is able to take over should anything go awry. They must also have at least $5 million in liability insurance.

This "groundbreaking" pilot puts Ontario at the forefront of innovation, said the province's minister of economic development, employment and infrastructure, Brad Duguid, at Tuesday's conference.

"We're now going to be able to test these vehicles in real-life circumstances, take them on roads and highways," he said.

Canadian weather good for testing

That's "really, really exciting for the industry," says Alex Rodrigues, a mechatronics engineering undergraduate student at the University of Waterloo and CEO of Varden Labs, a company developing autonomous vehicles.

Many companies have already been testing their cars in the United States, but now they'll have a whole new set of driving conditions to operate under.

"We have ... some of the most challenging environments for driving cars," says Steven Waslander, a University of Waterloo associate professor and the director of WAVE laboratories, the university's autonomous vehicles laboratory. "Winter driving, rainy weather, fog, poor road conditions, potholes and what not."

Varden Labs CEO Alex Rodrigues, left, and co-founder, Michael Skupien, right, hope to bring their first product to the market by the end of this year. (Varden Labs) Companies will likely be drawn to testing their creations in Ontario to help ensure their programming is safe under all these conditions, and not just those found in the U.S., observers say.

Ontario's technology industry will be made even stronger by this, says Barrie Kirk, executive director of the Canadian Automated Vehicles Centre of Excellence.

He attended some of the MTO's consultations about this pilot over the past two years.

There are nearly 100 companies and institutions somehow connected to the automated vehicle industry in Ontario, according to the MTO. Kirk expects that the companies testing in the province "will include some Ontario components," like software.

The at-home testing is bound to benefit Canadians even more, says Rodrigues, as it'll mean that when autonomous vehicles are commercially available, they'll likely be safe to use in Canada and arrive here faster than they would under current testing conditions.

Once automated vehicles are more mainstream, they're expected to significantly decrease traffic accidents and the corresponding injuries and fatalities. Kirk predicts an 80 per cent reduction in such collisions then and argues every self-driving car on the road helps increase safety because of its superior technology.

"You simply cannot replicate that level of awareness with a human, " he says. "Anybody who is in a self-driving car will be a lot safer." Though, not everyone agrees that humans are inferior drivers to the types of driverless cars currently available.

Keeping tech industry in Ontario

The pilot will also give Ontario-based companies the opportunity to test their products at home.

Rodrigues hopes to launch his company's first product, a self-driving shuttle system for closed communities, like university campuses or retirement centres, by the end of the year. Because the product isn't geared for main roads, Rodrigues says, the team was able to test it in private communities with their permission.

But their technology is geared towards moving onto roads, he says. Eventually, Ontario's pilot project will make it easier for his company to test their vehicles.

"The fact that Ontario is supportive of this technology really helps make the case that we should be operating here and help keep talent and technology here," he says.

All these positives make the decision to run the pilot an easy one, says Kirk. In fact, he's pushing for the MTO to eventually extend the regulations to include driverless cars without a driver in case things go wrong.

He's also hopeful other provinces and territories, as well as the federal government, will take note of Ontario's progressive view and enact similar allowances for driverless cars.

So far, Kirk admits, there hasn't been much interest outside of Ontario. But he remains optimistic.

"I think what MTO is doing will stimulate interest."