Canadian Press Privacy Commissioner Daniel Therrien waits to appear at the House of Commons information, privacy and ethics committee in Ottawa on Thursday.

OTTAWA — Well before Statistics Canada set out to scoop up private banking information from 500,000 Canadians, it had already collected reams of corporate and individual tax forms and health records — part of its growing reliance on "administrative data" sources instead of traditional surveys.

But the uproar over the banking data threatens more than one project: the chief statistician warns the future path of the agency — whose data analysis drives policy decisions on everything from taxes and interest rates to seniors' benefits — is on the line.

Anil Arora said the debate is really about whether Canadians want timely information in a rapidly changing digital world.

"To me that's really what's at stake," he said in an interview.

"Canadian society is better served with that than the alternative, which is to put Statistics Canada on the backburner in saying, 'You guys are doing an OK job, but don't use the tools that are now available today or where Canadians kind of live and operate,' which is more and more in the digital world."

Using new tools

Statistics Canada is already using some of those tools.

For example, it collects information from every province on cancer patients to feed a database on incidence and survival rates. The tax filings of every person and business develops census income data. And the agency is on the verge of replacing the short-form census every Canadian is required to fill out every five years by merging data from existing government holdings — a massive project years in the making.

By law, the agency can ask for any information it wants from any source. During a briefing with reporters last month, senior officials said they planned to test the limits of the Statistics Act to tap new sources of information as survey response rates decline, undermining the accuracy of the agency's findings.

Three senior officials — one overseeing information technology, a second in charge of labour, education and income statistics, and a third in charge of income statistics — defended the agency anew on Thursday during an online chat about the latest financial projects, outlined in privacy assessments posted to the Statistics Canada website, trying articulate why the data was needed.

One participant lamented that the lack of a clear explanation fuelled public skepticism about the project.

Agency has government support

The Liberals stood behind the agency again Thursday under continued questioning from the Conservatives in the House of Commons, where allegations of state surveillance and authoritarian rule peppered the debate.

Arora said the concerns people have expressed with the banking information project require the agency to do a better job communicating with Canadians about what information it collects and how it protects it from release. He said Statistics Canada has worked with the privacy commissioner's office for the last year on the design of the project, but is willing to take more advice.

Former officials at the agency describe a culture where safeguarding data is drilled into every worker. Identifying information is separated out of files to protect privacy, and only a small group of analysts are able to access the data when it is needed to merge various data sets. But that might not be enough.

"Any record linkage is a de facto invasion of privacy," said Michael Wolfson, a former assistant chief statistician who left the agency in 2009. "You knew that, but there was an offsetting public good. I think the world is changing, though."