The new digital border
Data now accounts for 15% of Canada’s economic activity, yet 70% of cloud infrastructure is foreign-owned. As data localization laws multiply globally, Canada faces a strategic imperative to develop its own trusted-data ecosystem.
| Indicator | 2020 | 2025 | Source |
|---|---|---|---|
| Share of digital-sector GDP | 9.2 % | 15.0 % | Statistics Canada |
| Data hosted on foreign servers (%) | 68 % | 70 % | ISED 2025 |
| Cyber incidents (annual) | 4,800 | 6,200 | CCCS |
Key challenges
- Fragmented provincial privacy laws complicate compliance.
- Limited domestic data-centre capacity raises sovereignty risk.
- AI training datasets increasingly regulated as national assets.
What leaders can do
- Map data jurisdiction. Identify where every byte is stored and processed.
- Adopt “digital twin” architecture for compliance portability.
- Engage in Canadian data-trust initiatives. Shape standards early.
- Leverage data sovereignty as brand value. Trust is a competitive moat.
Arcus Insight: Digital sovereignty is economic sovereignty. The next generation of competitive advantage will be measured in trusted data, not GDP.