In Spring 2019, Innovation, Science and Economic Development Minister Navdeep Bains announced a Digital Charter for Canada. Much of the Charter speaks to data and its importance to the economy and Canadians, but a number of critical specifics require further elaboration. The Charter focuses on Federal issues, yet the data economy involves provinces and municipalities as well. One of the major applications of a Data economy will be in Smart City initiatives, especially in the priority areas of Government, Mobility, Health and Wellbeing, Environment and Energy, Infrastructure, and Regulations. This blog addresses a few of the most essential imperatives to build a thriving pan-Canadian data economy.

Where’s the Data?

The road from start-up to scale-up is not one free of speedbumps or hurdles. One notable challenge Canadian innovators face on this journey is access to the data necessary to build and commercialize globally competitive products and services. The burgeoning Canadian AI sector is a good example of this challenge—in order to be trained and perfected, machine learning models need access to large supplies of well-structured and reliable data. In Canada, this is a complex endeavour due to some of the design flaws of open data sites, slow adoption of digitization by Canadian businesses, and the lack of clarity around how the national data strategy will play out in real business applications.

Innovators in countries like the U.K. have an advantage over Canadian businesses when it comes to the availability of data for things like facial recognition software. The U.K.’s use of CCTV provides AI start-ups like Sensing Feeling a data foundation to build leading-edge technologies. On the far side of the spectrum to Canada are more extreme examples of countries like China, where companies have open access to data collected by ubiquitous surveillance technologies. While this poses significant privacy and ethical considerations, places like China have a notable advantage in developing technologies like facial recognition. This advantage applies not only to surveillance or law enforcement products but extends to business and consumer products as well.

One of the central reasons that Canada falls behind many of its international competitors when it comes to national transactional and demographic data is the nature of our federal construct. That is, the data needs of many businesses exist at the federal, provincial/territorial and municipal levels simultaneously. In the absence of a reliable framework to shape the siloed data into a single, common source, Canadian innovators face extensive barriers to develop world-class, data-driven products and services.

Data Trusts: What are they and why are they important for Canadian innovators?

In September 2019, the Ontario government published the second of three discussion papers focused on the province’s data economy. This paper covered topics such as sharing Ontario government data and expanding digital infrastructure but neglected to discuss the pivotal need for federal, municipal and other Canadian data to complement Ontario’s data. Despite mounting discussion of the potential value of data, the quality of data-sharing models tends to be pushed to the wayside or forgotten altogether.

While there is no “magic bullet” that can be applied to this data-sharing challenge, the concept of a data trust is one that can generate significant inroads and enable the innovation potential of Canadian businesses. Integrating holistic national data sources and other data-governance concerns, a data trust is “a legal structure that provides independent stewardship of data.”[1] For data stewards, data trust can help alleviate provincial and territorial concerns about having to participate in a federally operated data portal. In essence, data trust can function to provide all Canadian innovators with access to valuable data assets.

The benefits of such a construct don’t end at access. When designed and implemented properly, a data trust can balance the competing needs for responsible data access, individual and group privacy, the management of sensitive data such as medical and social services research, and the development of commercial products. A newly-minted Canadian company, Element AI, is exploring an interesting kind of data trust driven by the data subjects, not the users. As explained by the University of Birmingham professor Sylvie Delacroix and University of Sheffield professor Neil Lawrence, this construct represents a “‘bottom-up’ approach to data trusts, in which data-subjects pool their own data into a legal structure—the “trust”—for a social or economic benefit of their choosing. In this approach, data-subjects tend to be both the settlors as well as the beneficiaries for whom the trust and its terms have been established.[2]

The benefits of data trust can be applied to a variety of stakeholders across the Canadian digital economy. There is a unique opportunity to leverage Canada’s supercluster initiatives as data generators for further innovation. Reflecting regional needs while having national reach, Canadian Innovation Superclusters could collect data and use it to measure the success of the initiatives, grow local ecosystems and expand partnership opportunities and investment. To do so, each supercluster could have a corresponding data trust that collects data for select Canadian businesses, which could then be used to develop products or services that complement the supercluster as well as explore new, parallel markets.

Ramping up Small to Medium-sized Enterprises (SMEs)

To date, Canadian discussions of data governance have mostly been driven reactively by external developments with multinationals like Facebook and Google, instead of proactively generated to support and promote Canadian businesses. With small and medium-sized enterprises (SMEs) making up 52.5% of all private-sector contribution to the Canadian gross domestic product (GDP),[3] a thriving data-driven SME ecosystem is necessary for a strong Canadian data economy. Without these constructs and support networks in place, Canadian firms will continue to be slow adopters of new technology,[4] compared to their international equivalents.

For example, cloud-based computing and platforms can help Canadian SMEs accelerate their data-driven digital adoption without significant capital outlay. The Digital Accelerator for Innovation and Research (DAIR) Cloud is an ISED-funded service by CANARIE that provides SMEs with “access-free cloud-based resources to rapidly design, evaluate, and demonstrate new products or test and validate new features on your existing products.”[5]

Services like DAIR complement existing cloud offerings like Microsoft’s Azure, Amazon’s Lightsail, and Google’s Cloud to assist Canadian SMEs in the process of going digital. However, while services like these are essential, ultimately Canadian SME innovators still need guidance on how to navigate all of the data-driven digital service offerings available to them, presented in one easy-to-access tool. Such a tool would address the following topics:

How to assemble a digital transformation strategy

How to identify and exploit IP opportunities

How to access data

How to navigate data privacy rules and regulations, including: PIPEDA and provincial equivalents GDPR Free flow of non-personal data under CETA and USMCA

How to protect against the impacts of data breaches

An all-encompassing resource like this is essential to helping Canadian SMEs ramp up, scale-up, and compete in the global digital economy.

Snapshot: Cybersecurity and Canada’s opportunity to lead in responsible AI

Cybersecurity skills and competencies are increasingly in-demand not just in Canada but in the world. Yet, many Canadian SMEs struggle to implement the cyber-infrastructure needed to navigate an increasingly interconnected world economy. Data-breach protection could be provided to SMEs in the form of knowledge, information and support, including insurance for data breach protection. In its submission to the Canadian Federal government’s 2020 budget, the Electronic Transactions Association raised the suggestion of a 15% non-refundable tax credit for small businesses to purchase cybersecurity insurance.[6] This proposition is both interesting and compelling as it stands the chance of accomplishing two key goals: providing small businesses with an incentive to acquire cybersecurity and data breach insurance; and offering a highly visible vehicle for educating small businesses on their data and cyber risks, along with information on how to protect themselves.

This kind of knowledge and awareness are essential to helping Canadian SMEs safeguard themselves and showcase their inherent strengths and leadership. To return to the example of AI, Canadian SMEs have the opportunity to lead the world in a sustainable market segment: responsible AI. Canada’s public sector is already a recognized leader in this space as a result of developments such as the federal government’s Algorithmic Impact Assessment tool, Directive on Automated Decision-Making; the Montreal Declaration for a Responsible Development of Artificial Intelligence; the latter being a globally-recognized framework for the development of responsible AI. Other notable developments at regional levels include the Quebec government’s International Observatory on the Societal Impacts of Artificial Intelligence and Digital Technologies, whose mandate is to monitor and promote responsible use of AI across all professional, social and private spheres. Through the use of data trusts as a foundation for responsible AI development coupled with learnings from the broader set of Canadian responsible AI initiatives, Canadian SMEs can lead the generation of products and services for markets that demand responsible AI solutions.

Securing Trust

Robust standards can provide a foundation for privacy and trust—the two essential cornerstones of the Canadian data economy. A very promising standards-based solution is the development of Personal Digital IDs, which link physical people in the real world to their online activity. While this concept raises inevitable questions of data security or privacy, Digital ID systems actually enhance privacy “[by putting] greater control of identity back into the hands of the consumer….unlike physical documents, a digital ID can be standardized and used between entities with the ability to adapt by adding new information. Moreover, only one version of your identity exists, significantly reducing the potential for misinformation, identity theft, or the use of outdated data that does not reflect your current identity….”[7]

Countries like Sweden and Estonia have been using digital IDs for years. According to Sweden’s Agency for Digital Government (DIGG), the “Swedish eID system is a success story. Most citizens have an eID and over 4 billion transactions in various private and public e-services are made every year.”[8]

The Digital ID and Authentication Council of Canada (DIACC) has taken a leadership position on this front by establishing the Pan-Canadian Trust Framework (PCTF). Its mandate is to provide a set of Canadian standards that support open government principles and enable Canada’s full and secure participation in the global digital economy by leveraging Digital IDs. In October 2019, DIACC published results from a pan-Canadian survey it conducted on digital identity. One key finding of this survey was that more than 70% of Canadians want to see governments and the private sector come together to collaborate on a joint-digital-identity framework in Canada.[9] Such a collaboration could enable increased and inclusive access to government benefits, healthcare, e-commerce, and financial services.[10]

Pieces of this trust framework are coming together. Several provinces, including British Columbia, New Brunswick and Quebec, are implementing Digital IDs, and seven of Canada’s major financial institutions in cooperation with private-sector business SecureKey Technologies Inc. developed a tool (VerifiedMe) to help Canadians verify their identity online. While these are notable developments creating significant inroads for Canada, rapid realization of the Pan-Canadian Trust Framework (PCTF) will provide all Canadian innovators a secure platform to develop new and exciting data-driven services.

A Data-driven economy for Canada: What’s next?

With the 2019 Canadian Federal election behind us, the resultant cabinet and ministerial re-alignment made, and associated mandate letters released, new opportunities can emerge for the Canadian digital economy. With public-private collaboration and the development of key frameworks and concepts, Canada can revamp and reshape its role in a future economy that is increasingly data-driven.

Early in 2020, look for a new Information and Communications Technology Council white paper on the data economy, this time focussing on how Smart Canadian cities can leverage these concepts across various verticals, including healthcare, energy, and transportation.