MONTREAL—Canada’s pitch to have Google, Facebook and other American technology giants battered by the National Security Agency spy scandal store sensitive date in this country would be a great economic driver, but do little to concretely safeguard delicate personal information, Internet and privacy experts say.

Close co-operation between Canadian and American spy services and the relative lack of oversight and information into the operations of the NSA’s counterpart, Communications Security Establishment Canada, means such information would remain easily accessible to American spies.

“We’re essentially joined at the hip. I sometimes say we’re their little brother but in fact we punch above our weight in this area, which many Canadians aren’t really aware of. So if there’s any information in Canada that’s of interest to the NSA, they just get it from the Canadians,” said David Fraser, a leading intellectual property lawyer in Halifax.

The Star reported Thursday that the domestic spying efforts laid bare by former NSA contractor Edward Snowden has prompted the federal government to try to lure the Silicon Valley titans to Canada and have them establish data centres where their user information can be stored, ostensibly outside the reach of U.S. intelligence.

Industry Canada owned up to the effort, saying: “Canada is open to businesses who create jobs and help grow our economy.”

Cashing in on the worldwide web crisis could do just that. Estimates suggest companies that decide against storing their data on American computer servers could cost the U.S. economy up to $35 billion in lost revenues by 2016.

“It’s certainly something we would encourage Industry Canada to do, to find reasons why Canada is a great place to invest — we have a number of them,” said Scott Smith, the Canadian Chamber of Commerce’s director of intellectual property and innovation policy.

Working in Canada’s benefit is the strong economy, cheap sources of hydroelectricity, skilled workforce and cooler climate.

Industry players have been reluctant to name individual firms that have already shifted their data storage from the U.S. to Canada but they are said to vary from European insurance and banking firms that operate in the U.S. to American oil-and-gas and retail companies. For the most part, they want to store their data in North America but outside the U.S., in order to assure wary customers that their private information is in safe hands.

Even if that’s not exactly true, the perception that companies are reacting to the spy scandal may be enough to bolster consumer confidence.

“I think there is certainly opportunity in Canada for setting up these types of data farms. There are some in existence but I think we need to be a little bit cautious in saying that setting up in Canada would be an improvement over what exists in the U.S.,” Smith said.

“I think Canada really needs to do something about transparency in what we do with data protection. I don’t think it’s clear right now that data is any safer here than it is in the U.S. It may be. It’s just not clear.”

Facebook, Google and Yahoo did not respond to interview requests about the Canadian government efforts to woo them north. In the meantime, the companies have joined forces with other leading technology firms like Microsoft, AOL, Amazon and Apple to pressure Washington to rein-in the NSA domestic intelligence collection efforts.

Loading... Loading... Loading... Loading... Loading... Loading...

That, rather that slapping national borders around Internet data accustomed to zipping around the world in fibre optic cables — a measure that could turn the World Wide Web into a series of disconnected country-wide webs — may the only solution to the surveillance fears the world is now facing.

“Not just in Canada but elsewhere they should be focusing on surveillance, government surveillance,” said Fraser. “If that’s the problem what we need to be looking at (are) laws about surveillance, accountability, supervision and transparency.

Read more about: