In the era of digitization, it is crucial that private sector businesses understand data sovereignty, yet many leaders don’t think about it until it’s brought up—and then you can almost see the lightbulb go on.
Canada’s Privacy Act is world-renowned for its hard line on securing public sector data and protecting it from foreign interference. That protection keeps our citizens safe when transacting with the government, but what about the private sector? Is data sovereignty any less precious or vulnerable when it’s in private hands?
PIPEDA (the Personal Information and Protection and Electronic Documents Act) regulates how private sector organizations in Canada manage consumer and employee information.i Canadian sovereignty laws surrounding data governance are much stricter than many other countries. That’s why businesses here and in other countries opt to host their applications in Canada.
However, the increased use of software as a service (SaaS) tools can pose risks. Even if your SaaS provider is Canadian, your data may not be stored domestically. For instance, Hootsuite is a Canadian company, but they store data globally using Amazon Web Services (AWS). Their privacy policy states:
“The social networks and third-party apps that you choose to integrate with our services will collect, store, and process your data from various locations around the world. At Hootsuite, we host your content on Amazon Web Services’ (AWS) highly secure and reliable data centres in the United States.”ii
This highlights the importance of ensuring that your data is stored securely and managed according to Canadian regulations, protecting your business from potential risks.
Understanding data sovereignty: A Canadian superhero to the rescue
Did you know that the co-creator of Superman was Canadian? We have a long history of wanting to protect our fellow citizens and make the modern metropolis a better place to live. To do that in today’s cyber world, we need to make data protection a priority—not just for governments, but for all our businesses and the people they serve.
What is data sovereignty?
Data sovereignty means that data is controlled by the laws of the country where it’s stored or processed. It ensures that businesses must follow local regulations about how their data is handled, which is especially important when using cloud services across different countries.
Data sovereignty is about preserving ownership, and that’s important when it comes to data. Keeping data in its place of origin is a sovereign right. Doing so protects the people who trust your business to keep their data private and secure it from nefarious purposes.
Cyber villains leap tall borders in a single bound
Have you considered what would happen if your data was stolen or corrupted? How would your customers and employees be impacted? Would your business suffer costly downtime, loss of reputation, PR and legal costs, and compliance penalties that could devastate or even topple your business?
You may not have considered these risks, but cybercriminals have. They are merciless in their attacks on private businesses and can leap borders faster than a speeding bullet. Recent attacks targeted businesses in healthcare, finance, and tech, and it doesn’t stop there.
The Business Development Bank of Canada (BDC) warns that it’s never been more important to be concerned about data privacy in your business, “Turning a blind eye to data privacy can be costly for businesses. In June 2022, the Superior Court of Quebec approved a $200.9 million settlement in a class-action lawsuit against financial cooperative Desjardins. The company was found to have allowed gaps that enabled an employee to steal the personal information of 4.2 million people.”iii
Data sovereignty laws in Canada
As new, more stringent, data sovereignty laws are considered—to protect data privacy and penalize businesses that have not done enough to protect sensitive data—Canadian businesses could face fines of up to five percent of global revenue or $25 million.iv
Challenges in data sovereignty: There’s no Google Maps for data
As data moves from one location to another, it could be crossing borders without you even knowing it—regardless of its ultimate destination. The minute it hops across the border, it is subject to foreign laws that may contravene Canadian privacy acts.
According to CIO Magazine, “It’s easier to think about data sovereignty when the information isn’t moving. After all, if data is in a massive, Canadian-owned computing centre in Toronto, it’s clear that Canadian privacy laws would apply. But it becomes more complicated when that data needs to move from point A to point B… Even if the information is being sent from Canada to Canada, it could flow south of the border.”v
Data security challenges: Innovation vs. security
Technology is a double-edged sword in the business world. On one hand, digital transformation has led to acceleration of business, advanced consumer insights, improved customer interactions, and employee empowerment. On the other hand, wherever there are superheroes, supervillains rise out of the shadows to threaten our progress.
According to Athens CEO, powerful technologies with the power to fuel cyber threats, like AI and quantum computing, are a key concern for CIOs in 2024 with 95 percent of them facing barriers to implementing digital transformation. “CIOs are facing the challenge of how to drive innovation and growth, while protecting their organizations from the evolving digital threat landscape.”vi
Global regulatory compliance laws change rapidly. Managing cloud services across borders adds layers of complexity. Technological advances challenge cloud security practices. Lack of transparency in cloud services and data supply chains imperils data sovereignty. How do you cope with this evolving digital landscape and balance innovation with cloud security? Fortunately, there’s a data superpower to lend a helping hand.
Regulatory compliance: A superpower against cyber threats
Canadian enterprises have a moral and legal obligation to safeguard data collected from Canadians. CIRA explains the imperative, “Simply put, you are responsible for protecting any and all information collected from Canadians by your company, and you will be held liable and accountable for it.”vii
Regulatory compliance can be a rapidly evolving proposition, so understanding your obligations and the tools required to fulfill them can ease the burden and reduce risk. AI technologies enabling automated compliance audits, reports, tracking, and alerts assist Canadian businesses with the onerous task of keeping up with ever-changing laws and potential regulatory compliance breaches.
Advanced expertise from a Canadian CSP that specializes in data management, regulatory compliance, data governance and data sovereignty is a good resource for Canadian organizations doing business at home or abroad.
Empower your data with a sovereign cloud
A Canadian sovereign cloud ensures that all data is stored and processed within Canada’s borders, meeting the Canada’s privacy and compliance regulations. With a sovereign cloud, Canadian companies can innovate and scale without worrying about cross-border data privacy concerns, ensuring both regulatory compliance and cloud security.
A true Canadian sovereign cloud guarantees transparency, compliance, data protection from foreign interests, and a supply chain that is owned, operated, and managed by Canadians—in Canada. If your cloud provider cannot offer this level of protection, your data may not be as secure as you think.
Data sovereignty should not only matter for government data—it’s in the best interest of Canadian enterprises to keep data safe at home, where foreign governments cannot force your CSP to expose your data. You are liable to secure Canadian data. Don’t send it out in the world where even Superman won’t be able to protect it.
Learn more about protecting your Canadian Data with ThinkOn’s sovereign cloud here.
[i] Office of the Privacy Commissioner of Canada. “Summary of Privacy Laws in Canada.” https://www.priv.gc.ca/en/privacy-topics/privacy-laws-in-canada/02_05_d_15/
[ii] Hootsuite. Privacy Notice. https://www.hootsuite.com/trust-center/privacy#:~:text=The%20social%20networks%20and%20third,centres%20in%20the%20United%20States.
[iii] BDC. “5 steps to improving data privacy in your business.” https://www.bdc.ca/en/articles-tools/blog/5-steps-improving-data-privacy-in-business
[iv] Ibid.
[v] CIO. 2022. Emily Jackson. “What every Canadian CIO needs to know about data sovereignty.” https://www.cio.com/article/305461/what-every-canadian-cio-needs-to-know-about-data-sovereignty.html
[vi] Athens CEO. 2024. https://athensceo.com/news/2024/03/logicalis-2024-cio-report-ai-and-security-are-top-priorities-driving-transformation/
[vii] CIRA. 2022. https://www.cira.ca/en/resources/news/cybersecurity/just-how-valuable-cybersecurity-data-sovereignty-canadian-organizations/