Technology companies clash on cross-border flow of digital data under NAFTA
Mexico's Secretary of Economy Ildefonso Guajardo Villarreal, (left to right) Canada's Foreign Affairs Minister Chrystia Freeland and United States Trade Representative Robert Lighthizer attend a news conference on the NAFTA negotiations in Ottawa on Wednesday, Sept. 27, 2017. THE CANADIAN PRESS/Sean Kilpatrick
Mike Blanchfield and Andy Blatchford, The Canadian Press
Published Thursday, October 5, 2017 5:46AM EDT
OTTAWA -- Some Canadian information technology companies are pushing back at warnings that the personal information of Canadians is being compromised in the renegotiation of the North American Free Trade Agreement.
They see nothing wrong with a proposal by the United States that would forbid the storage of sensitive data in computing facilities on Canadian soil.
They say data should be allowed to flow freely across borders, like other products, and that the privacy of Canadians would not be compromised.
"Privacy and national security elements are part of the discussion, but they shouldn't be seen as the entire discussion," said David Messer, a vice-president of the Information Technology Association of Canada.
"It's about allowing businesses to operate how they see fit and not necessarily fragmenting the internet."
That view is clashing with another industry group, the Canadian Council of Innovators, which is calling on the government to resist the U.S. proposal, citing concerns over the U.S. Patriot Act and "less stringent" restrictions on access to data for U.S. companies.
The council's chair, Jim Balsillie, the former head of Research in Motion, said Wednesday in an interview that he worries the government is weak at the bargaining table when it comes to data -- an issue he argues is "existential" for Canada.
Balsillie has met Canadian negotiators in his role as chair of the council, which represents some of the country's fastest-growing tech firms and investors.
"Based on my interactions, I remain deeply concerned about the lack of sophistication for the 21st century economy with our NAFTA team, and most especially and including data," said Balsillie.
"My fear is our trade negotiators are guided on data policy by the big U.S. tech firms who tell us what's good for Silicon Valley is good for Canada."
The council wants the government to back "data localization," which would protect the sensitive personal information of Canadians especially health and financial records -- from unwanted American intrusion, by storing it in on servers in Canada.
The U.S. rejects that idea, and so do a number of Canadian technology firms.
"To me, free trade and NAFTA, it's all about free flow of people, goods, services, capital and now the fifth one is data," Dirk Schlimm, executive vice-president of Oakville, Ont.-based GeoTab Inc., said in an interview Wednesday.
"What is being proposed here is protectionism, because it now makes it impossible for a global player, like GeoTab, to use our scale and say 'I want to have central data storage and to sell our system."'
The company markets a digital tracking system that is being used in 750,000 vehicles around the world to track the movements and performance of commercial fleets. It tracks the route of a vehicle as well as providing engine diagnostics, predicting maintenance needs and measuring fuel consumption. It can detect the speed of a vehicle and whether its driver is wearing a seatbelt, he said.
The product helps companies improve transportation safety and efficiency, he added.
While some data is clearly private, there's a vast trove of "non-critical data" that can and should be shared across borders, said Altaz Valani, director of research of Toronto-based Security Compass.
"If we talk about everything in terms of, 'it's too risky to take the next step,' the challenge is at what point to we begin to say we're actually inhibiting businesses from what they need to do?"
Widespread global concern has been stoked by fears of U.S. surveillance on private citizens. The post 9-11 Patriot Act gives American law enforcement access to data stored in U.S. facilities. Revelations by whistleblower Edward Snowden about the U.S. National Security Agency's covert surveillance programs have also raised concerns.
Schlimm said Canada has strong privacy laws and can't afford to let those standards slip because firms such as his do business with European firms, which are also subject to the continent's stringent digital privacy provisions.
His company has been able to negotiate higher privacy standards with U.S. companies because "they want to keep the Europeans as clients and that's why they're willing to do it for us."
But Canadians have to recognize, especially in light of the Snowden revelations, that being able to protect their data from the NSA is a "fallacy" because Canada shares information to fight terrorism with its Five Eyes allies in the U.S., Britain, Australia and New Zealand, said Schlimm.
"If you look at the level of co-operation that is going on now in the international intelligence community ΓÇª there is a tremendous amount of intelligence sharing going on between Canada and the U.S."