The ministerial mandate letters are clear: there is a need to establish a new set of online rights focused on data use for Canadians. Three ministers, in particular, are charged with the main task of coordinating these new rights: innovation, science, and industry; heritage; and justice. Why such a focus on data? Simply put, there are substantial societal issues related to the use and monetization of personal data.
As we set rules and regulations in this area, we also need to be mindful of the broader, and complex, picture: data is at the heart of the innovation process, where the rules of the game are very different from those of the tangible economy and where a global battle is taking place on what those rules could look like. Canada’s values should be reflected in those rules and we need to take charge now. Our prosperity depends on it.
Data is the feedstock for the algorithms that power artificial intelligence (AI) and digital platforms where both large quantities and varieties of data are necessary. Together, data and AI are a powerful force that has disrupted existing industries and led to new types of business models, work arrangements, and industries. Not surprisingly, governance arrangements have struggled to keep up. The focus has generally been on setting the rules for our tangible assets like steel and lumber, given the trade wars over the past few years. But, we now need to shift that focus to the rules for intangibles and data.
Data is extremely valuable. Experimental estimates from Statistics Canada have placed the value of Canadian data at almost two-thirds the value of our oil assets—or about $217-billion. And while large, the value pales relative to other countries. While not strictly comparable, the market cap of the U.S.-based Facebook, Apple, Amazon, Netflix, and Google is around US$4-trillion. This high valuation results from their monopoly positions and huge data stores.
These companies are further cementing their advantageous positions each and every minute, with continued acquisitions of data through user engagement and fierce protection of their assets by a combination of de facto rule setting in the absence of national regulations: trade deals that enshrine open data flows; strong intellectual property protection of their data and AI assets; takeovers of innovative firms through their vast reserves of cash; the acquisition of top talent; and the powerful information asymmetries that drive out competition.
There is a tangled web of interconnected national and international governance issues around big data, AI, and digital platforms that pervade all aspects of society. They include surveillance, privacy, cybersecurity, competition and trade, foreign direct investment, online speech, and even democracy.
Against this background, what could a Canadian strategy look like? First, we need to get our domestic framework right. The elements of a successful strategy are already in place, including the National Intellectual Property (IP) Strategy, National Cyber Security Strategy, a Pan-Canadian AI Strategy, and a Patent Collective. These initiatives reveal both the strengths and weaknesses of our current approach—each department brings a set of experts, but the danger is a lack of coordination across them. We, therefore, need to ensure that there is a horizontal focus on data governance with all relevant departments at the table to ensure a coherent set of policies. Second, we need coherence across levels of government and a multi-stakeholder dialogue given the important societal concerns around data. Third, the government can, and should, be a powerful incubator to test out governance arrangements both for its own operations and within the industry.
There is no one-size-fits-all approach and a combination of standards, regulations, and laws will be required. An essential element of this approach is standard-setting. Standards not only help to set the rules of the game, but they also embed societal values for the use of new technologies such as online rights. They can also be used to embed Canadian IP. Importantly, we can guide international discussions on global governance. Even as de facto rules are being set by the platforms or by other regions, the scene is chaotic and there are no internationally agreed-upon rules—and they are sorely needed. We should not underestimate the ability of Canada to be a global leader. We are a recognized leader in AI research, we have the talent, we have a reputation for good governance, and there are many countries looking for guidance.
This article was originally published in The Hill Times.
The opinions expressed in this article/multimedia are those of the author(s) and do not necessarily reflect the views of CIGI or its Board of Directors.
ABOUT THE AUTHOR ROBERT FAY
Robert (Bob) Fay is the director of the global economy at CIGI and is responsible for research direction and related activities. He has extensive experience in macro and micro-economic research and policy analysis.