The Canadian government is trying to profit from the National Security Agency spy scandal south of the border by luring frustrated American web titans such as Google and Facebook into storing sensitive banks of personal information outside the United States, the Toronto Star has learned.

The revelations by whistleblower Edward Snowden last year have left the world’s leading technology companies desperate to bolster the confidence of web users whose emails, web searches and other sensitive information is mainly stored in warehouses of computers servers in the United States.

While Google, Microsoft, Amazon, Facebook and others have launched a pressure campaign to have Washington rein in the NSA, the electronic spy agency, Canada is hoping to profit from the discontent, said Robert Hart, founder and chief executive of the Canadian Cloud Council, an industry association representing data centre firms in this country.

“There are governmental agencies right now in Canada who are actively trying to recruit Silicon Valley companies like Google and Facebook and trying to convince them to build cloud infrastructure in Canada,” Hart said in an interview Wednesday. “I would say there’s a lot of movement right now at a political level to convince some of these larger software companies ... to host their software in Canada to get that data away from the NSA for optical reasons.”

Asked about the claim, Industry Canada said in a statement to the Star: “Industry Canada routinely meets with stakeholders in the information and communication technology industry. Canada is open to businesses who create jobs and help grow our economy.”

There is great profit to be reaped from the confidence crisis sparked by the invasive intelligence-gathering methods employed in the U.S. One estimate claimed businesses that choose to store their sensitive data on computer servers outside the U.S. could end up costing the American economy up to $35 billion in lost revenues over three years.

Canada, with its proximity to the United States, its skilled workforce, cold climate and relatively cheap sources of electricity, is in an ideal position to benefit, said Hart, although many countries around the world are competing for a piece of the market.

“I think right now Canadian and international organizations have a monumental opportunity to capture a lot of business from organizations that no longer want to deal with the States,” he said.

The documents pilfered and leaked by Snowden, a former NSA contractor, show how intelligence agencies use top secret court warrants domestically and more nefarious means around the world to cast a spy net that captures not only terror suspects but law-abiding Americans, foreign businesses and citizens, and even world leaders.

The most direct access to supposedly confidential online information has come from the data centres that store companies’ digital information. These servers — housed in giant climate-controlled warehouses — are the backbone of the cloud-computing industry.

“Companies are looking to move and think about how they’re storing their data, where they’re storing their data, who has access to it and under what conditions,” said Daniel Castro, a senior analyst with the Washington-based Information Technology and Innovation Foundation.

Based on the rapid collapse in global confidence, Castro has estimated that the United States stands to lose as much as $35 billion of the cloud-computing market, which is anticipated to be worth more than $200 billion by 2016.

“There’s two sides to the story. One is what does it actually mean to move your data somewhere else — do you have more protection or not?” said Castro. “The other story is that even if you don’t have more protection, you can market it to your customers ... That’s why I think there is maybe an opportunity there.”

No one will say which companies have decided to flee the U.S., but they are said to vary from European banking and insurance firms with operations in the U.S. to American oil and gas companies and retail outlets, according to Canadian industry representatives interviewed by the Star.

“There’s a real tendency, especially among foreigners like European companies operating in the United States,” said Martin Bouchard, a principal with 4Degrés, a Quebec City data centre that is opening for business in March.

“It’s also a question of perception. The Europeans want to say to their clients that their information is not in the United States even though it stays in North America.”

Toronto is the data-centre capital of Canada and home to an unassuming seven-storey palace of cloud computing at 151 Front St. W. Montreal runs a close second, and Bouchard said that Quebec, with its cheap hydroelectricity, has a natural leg-up on other Canadian jurisdictions in an industry whose primary costs are air conditioning and power.

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Despite the boom underway, everyone acknowledges that information stored in Canada or any other country may, in the end, be no more safe from the prying eyes of American spies than it was before.

“The NSA hires probably the smartest hackers on the planet Earth,” said Hart. “If they want to get into somebody’s data, they’re going to get it, no doubt about it.”

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