As Canada prepares for comprehensive trade and security negotiations with the United States, Ottawa faces a fundamental question: will we enter these talks with a coherent, digital-governance strategy, or will we continue surrendering technological control to foreign powers piece by piece?

The current approach isn’t working. Our recent retreat on the Digital Services Tax demonstrates a troubling pattern of reactive policymaking. While we debate, American tech giants consolidate their grip on this country’s markets; Chinese-owned platforms harvest our citizens’ data; and European regulations increasingly set the global digital agenda without Canadian input.

Traditional trade policy was fixated on tangible commodities physically crossing borders—lumber, autos, grain—but while we debated softwood quotas, the true source of Canada’s wealth quietly migrated into the cloud. Since 1975, unnoticed by conventional trade thinking, our economic sovereignty has increasingly hinged upon owning intellectual property and governing data flows. Today’s economy is algorithmically governed, digitally mediated, and platform-driven—yet Canada’s trade apparatus remains stubbornly analogue, clinging nostalgically to a pre-digital past.

Consider the mismatch: our negotiators excel at managing lumber disputes and agricultural quotas, but struggle with questions of algorithmic transparency and data sovereignty. Meanwhile, our American counterparts arrive armed with teams of technology lawyers who understand that controlling digital infrastructure means controlling economic relationships.

This isn’t just about technology; it’s about power. Nations that write the rules for artificial intelligence, data governance, and digital commerce will dominate the next century’s economy. Those that don’t will find themselves implementing other countries’ standards and serving other nations’ interests.

This country’s passive approach to digital governance is already imposing real costs. When social media platforms blocked Canadian news content, our government was forced to negotiate from a position of weakness. When we needed to address TikTok’s data practices, we lacked clear regulatory frameworks. When Canadian AI firms need training data, they depend on datasets controlled by foreign platforms.

These aren’t isolated incidents, but are symptoms of a broader strategic failure. Canada has world-class digital talent, innovative companies, and strong democratic institutions, yet we consistently punch below our weight in international digital governance because we lack co-ordinated policy frameworks.

The upcoming negotiations with Washington present both risk and opportunity. If done well, they could establish Canada as an equal partner in shaping North American digital standards. If done poorly, they could lock us into permanent technological dependence.

A policy framework for digital sovereignty

To succeed in these negotiations, Canada needs a comprehensive digital governance strategy. This means moving beyond reactive responses to proactive policy leadership.

Overall, we need to stop creating advisory committees that produce reports while foreign platforms write our rules. This can be accomplished by establishing a digital sovereignty council with actual regulatory teeth—authority to audit algorithms, mandate transparency, block problematic acquisitions, and enforce compliance.

A new policy must include: 

• Data governance framework: Establish clear rules for cross-border data flows that protect Canadian interests while enabling legitimate commerce;
• Algorithmic accountability standards: Require transparency and auditing for AI systems that affect Canadian citizens, from credit scoring to content moderation;
• Digital competition policy: Update competition laws to address platform monopolies and prevent anti-competitive practices in digital markets;
• Strategic technology investment: Create frameworks to nurture Canadian digital champions and prevent premature acquisition by foreign entities;
• Cybersecurity requirements: Implement robust security standards for critical digital infrastructure, including cloud services handling government data;
• Digital rights protection: Ensure Canadian privacy laws and democratic values are respected in any trade agreement provisions; and
• Regulatory capacity-building: Train government officials in digital governance and create specialized units within key departments.

But success requires more than good policy—it demands skilled negotiators and policymakers who understand the digital economy. This means recruiting legal technologists, algorithm auditors, and trade specialists versed in platform economics.

Government alone cannot deliver digital sovereignty. We need partnerships with universities, civil society groups, and the private sector to build the expertise base required for effective digital governance.

The upcoming negotiations with the U.S. will reveal whether Canada is serious about digital sovereignty or content to remain digitally dependent. The choice is ours, but the window for action is closing.

We can enter these talks as equal partners with our own vision for digital governance, or we can arrive as supplicants hoping for favourable treatment. The approach we choose will determine whether we control our digital future, or remains forever dependent on others’ technological infrastructure.

The future belongs to nations that master digital governance. The question is whether Canada will be among them.

Professor Barry Appleton is a distinguished senior fellow and co-director of the Centre for International Law at New York Law School; an international law adviser on trade, technology, and global regulation at Appleton & Associates International Lawyers in Toronto; and a fellow at the Balsillie School of International Affairs in Waterloo.

The Hill Times