Canada can be a cloud leader thanks to PIPEDA

TORONTO–Canada has a competitive advantage over other countries, particular the U.S., that will enable it to become a leader in the cloud service market, said a legal expert.

“Location matters and where the cloud exists matters an awful lot when it comes to issues around privacy and compliance related concerns,” said Michael Geist, law professor at University of Ottawa.

Among the advantages is privacy legislation that addresses compliance and data concerns that businesses entertain when considering having their information in the cloud, said Geist.

For instance, the issue of privacy has featured this past year in public consultations, white papers and frameworks at various levels of government. Currently, Bill C-29 endeavours to amend PIPEDA, the Personal Information Protection Electronics Document Act, by requiring that owners of data be notified of data breaches or leaks.

“We’ve got rules situated around that sort of thing which makes a difference,” said Geist.

There is the concern that a Canadian-based cloud service provider will outsource to another jurisdiction where privacy laws may be more lax. The risks to a business heighten as data is transferred outside of Canada but while you can’t quite hermetically seal the information, the law already tries to account for that,” said Geist.

But Geist warns that Canada’s ability to become a cloud leader is hindered by reforms that threaten to change privacy legislation for the worse, such as one that could require service providers to disclose customer information without informing the customer. Mandatory surveillance could re-shape how network providers operate in Canada, fears Geist.

Geist was one of several speakers at a panel, hosted by Islandia, New York-based CA Technologies Inc., on the state of cloud computing in Canada. Results of a new study polling about 500 respondents were also revealed that showed concern among IT and business professionals for privacy practices of service providers. Specifically, 40 per cent of IT professionals and 30 per cent of business executives named privacy a top concern.

Geist said if privacy legislation does not adequately address business leader concerns for service provider privacy practices, Canada risks losing its cloud advantage.

“You are going to increasingly see people engaging in jurisdiction shopping in terms of trying to find places where there are privacy assurances and compliance systems in place,” said Geist.

Continuing to review PIPEDA every five years and developing a digital economy strategy for the country are ways that Canada can provide that confidence to businesses, said Geist.

Another speaker, Mostafa Zommo, associate chief information officer with Human Resources and Skills Development Canada (HRSDC), said approaching cloud computing entails figuring out whether your data will be in the hands of a service provider that is situated in the “right or wrong” country.

“I would want to go to the country where there is fantastic protection and fantastic IT practices,” said Zommo.

While privacy is handled a little better in some jurisdictions than others, Zommo said he believes it is evolving for the better. “Everyone is working on it. It’s not going to stay static, that’s for sure,” said Zommo.

Earlier this week, WikiLeaks, an organization that publishes and provides commentary on leaked government documents alleging government and corporate misconduct, did a bit of jurisdiction shopping after it its service provider, Amazon, was pressured by the U.S. government to drop the site. WikiLeaks now hosts its site with a Swedish provider.
Privacy aside, Geist said Canada’s competitive advantage as a cloud leader is in its geography.

The study unveiled at the panel discussion also revealed cost savings as the top reason for companies wanting to move to a public cloud.

Geist was surprised that the environment did not factor in higher among respondents. “Not only is that critically important but also offers a tremendous critical advantage as well,” he said.

Canada has the potential to build server farms in northern regions where cooling costs will be greatly offset by ambient cool air and fibre optic high-speed networks can transport that compute power to businesses, said Geist.

“The opportunities that we have is that much of the cost of running these server farms is keeping things cool,” said Geist. “We’ve got a lot of cool when it comes to the north.”

Follow Kathleen Lau on Twitter: @KathleenLau

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