One of Canada’s best known high-tech entrepreneurs told a Commons committee Thursday morning that Google and Facebook are companies “built exclusively on the principle of mass surveillance.”

Jim Balsillie, former co-CEO of Blackberry and the current chair of the Council of Canadian Innovators, said he believes Google and Facebook to be misusing personal data online.

“Their revenues come from collecting and selling personal data, in some instances without a moral conscience,” he said in an appearance before the ethics committee.

He further added that the Facebook-Cambridge Analytica scandal is not a privacy breach nor a trust issue, but rather a “business model issue,” one that exists because of a lack of government regulation.

“We are cascading toward a surveillance state,” he said. “[These companies] are capitalists and the job of the government is to regulate them.”

Balsillie said the model for regulation can be found in the European Union’s General Data Protection Regulation (GDPR) framework which is to be implemented later this month.

“GDPR offers valuable lessons and a point of departure for Canada’s legislators and regulators,” said Balsillie. “It is a universally acknowledged advance in privacy protection and control of data.”

Google Canada executive, Colin McKay, was also at committee Thursday. He said in helping Canadian businesses to grow, add sales are a key element of the company’s toolkit but that it’s done lawfully.

“I’d like to underline that, despite what Mr. Balsillie said, we do not sell the personal information of our users. We’ve built a business model that delivers services and products to users that relies on a personal relationship.”

McKay noted the advertising techniques Google employs are targeted at aggregated groups not individuals, and with no exchange of personal information between the company and the groups that use the data to place ads.

“It’s simply recognizing that there’s an economic transaction that needs to happen to provide those services and advertising is the most common and convenient way to deliver that,” he said.

He added that the company has taken “extreme efforts” to provide transparency to its users and are making a concerted effort to adhere to current privacy standards.

“We’ve recently announced a pilot project in the United States that attempts to bring some transparency to who’s placing an ad and how it was placed and provide some accountability to electors.”

The project has not yet rolled out in Canada.

Later in the discussion, NDP MP and vice-chair of the committee Charlie Angus noted Google’s “enormous” power in the U.S. to undermine patent law, and its impact on Canadian innovators.

“I know as an entrepreneur that [this issue] has got a deeply negative spillover effect to our innovation outputs,” said Balsillie.

Canada’s drop in worldwide innovation ranking is directly tied to “the fact that we have not created sovereign innovation positive spill over approaches,” Balsillie said. “I think we rush into these things and I’m directly aware that they’re done with no economic analysis.”

The committee chair Tory MP Bob Zimmer ended the meeting with a final question posed at the tech mogul.

“The whole reason why we’re here today started off a potential voter fraud, somewhere across the water in another country. If we don’t change our laws in Canada to deal with surveillance capitalism, is our democracy at risk?”

To which Balsillie responded: “Without a doubt.”