Canada should follow the EU’s lead in asserting digital independence and building resilient national infrastructure.
by Natasha Tusikov. Originally published on Policy Options
May 10, 2025
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Canada’s relationship with the United States is undeniably, perhaps permanently, fractured because of President Donald Trump’s threats of annexation and the economic damage resulting from his imposition of tariffs that violate the CUSMA free trade agreement negotiated during his first term.
In this era-defining moment – in which the United States is no longer a reliable ally, either economically or militarily – what tech policies should the re-elected Carney government prioritize? This is an opportunity to think ambitiously about the kind of Canada we want to build.
Like most countries, Canada relies heavily on U.S. technology companies, including those in social media, online commerce, search, cloud services, content distribution networks, mobile operating systems, app stores and data centres.
Much of Canadian digital communications infrastructure is under the control of U.S. companies and thus potentially the U.S. government. In the Trump 2.0 era, this raises critical economic, political and national security concerns.
Federal and provincial policymakers should therefore consider a suite of approaches to exert greater sovereignty over the country’s digital communications infrastructure. As experts have recommended, this should entail developing a domestic capacity to build, operate and govern Canada’s digital infrastructure, as well as ensuring that Canadian data remains under Canadian jurisdiction and control.
Canada must also ensure that its digital laws which are disliked by American companies are not relaxed or abandoned as the Trump administration desires. The capacity to enact and enforce domestic laws – whether on taxes, cultural policy or ensuring a healthy media ecosystem – is core to autonomy.
The EU shows the way ahead
The European Union provides a roadmap to stronger digital sovereignty.
For example, the Netherlands parliament recently approved a series of motions calling on the government to reduce the country’s dependence on U.S. software and hardware. These include proposals to halt the use of U.S. cloud services such as Amazon AWS for government data, create an independent cloud service under Dutch control and replace U.S. tech providers with Dutch companies to service government systems.
Digital sovereignty requires heavy state investment, as evident in the European Commission’s announcement in March of €1.3 billion (slightly more than C$2 billion) to strengthen the EU’s tech sovereignty. These funds, part of the €8.1-billion (C$12.6-billion) Digital Europe Programme, will improve generative AI applications in health care, support climate adaptation technologies and strengthen the cybersecurity of critical infrastructure such as hospitals.
More ambitiously, there is also the EuroStack initiative, a blueprint crafted by a coalition of European academics for a digital-sovereign Europe across interconnected layers of technologies from semi-conductors and artificial intelligence to cloud computing.
This initiative sets out a modern industrial policy that emphasizes “geo-economic agency” to reduce dependence on foreign, especially U.S., technology. Whereas “operational agency” is intended to enable the EU to leverage its internal market, the goal of geo-economic agency is to reduce the EU’s dependence on foreign technologies and foster sustainable interdependencies with other nations while maintaining autonomy.
In Canada, some provincial and territorial governments are considering whether to renew contracts for Elon Musk’s Starlink, which provides critical internet and emergency communications services, especially to rural communities, and instead prioritize Canadian alternatives.
In addition, during the recent federal election, the Council of Canadian Innovators published a letter signed by 150 tech executives calling on the leaders of all federal political parties to outline their plans “to build a more sovereign, more resilient, and more prosperous Canada” in the face of the “greatest economic crisis our country has faced since the Second World War.”
The tech leaders specifically demanded reform of federal strategic innovation fund rules to exclude rich foreign multinationals from benefiting; “buy Canadian” rules for government tech procurement; and funds to support tech firms in AI, cybersecurity and quantum computing.
An economy-wide, whole-government approach needed
Prime Minister Mark Carney’s election promises speak to these demands, including the creation of a federal bureau of research, engineering and advanced leadership in science for the Canadian military and security services. The aim is to build domestic research capacity in quantum computing, cybersecurity technology, artificial intelligence and other advanced technologies.
While undoubtedly valuable to military research and development, this needs to apply to other areas and should include an economy-wide and whole-of-government approach.
A vital component of digital sovereignty is a country’s capacity to set and enforce rules that serve its interests and public goals.
How Canada could achieve digital sovereignty
Canada and Europe need a talent hub to overcome Trump threats
The Trump administration, along with the U.S. tech sector, has been pressuring Canadian legislators to weaken or even abolish laws that the firms find burdensome and costly, with similar efforts under way against European laws. To be clear, the U.S. government’s dislike of some Canadian tech and other laws precedes Trump 2.0.
However, the U.S. trade representative 2025 report on foreign trade barriers (pages 44-45) specifically calls out Canada’s Digital Services Tax Act (2024), the Online News Act (2023) and the Online Streaming Act (2023).
The first law ensures that digital platforms pay tax in Canada on their Canadian revenue, while the second requires major social media firms and search engines to compensate Canadian news organizations for distributing their content. The last applies longstanding Canadian content rules from the Broadcasting Act to the digital version of content providers, namely major social media and streaming platforms such as Crave, Amazon, Netflix, Spotify and YouTube.
Canadians may differ as to whether these laws achieve their goals, but Canada needs autonomy and a domestic regulatory capacity to tax and regulate companies operating in its jurisdiction.
Canada also needs to prepare for a more economically and militarily aggressive United States that negatively views virtually any regulation on American software and hardware.
This is happening at a time when major U.S. tech companies, particularly Meta and X, have pledged allegiance to Trump and have dismantled their content moderation and factchecking policies, thereby allowing hate speech and misinformation to flood their platforms.
The re-elected Carney government needs to invest in building new regulatory infrastructure to address current and emerging digital governance challenges.
One key element could be a national independent regulator with the resources and mandate to monitor and govern digital issues.
Such an office, which expands a provision proposed in the Online Harms Bill, could resemble Australia’s e-safety commissioner or Brazil’s office of data protection – both of which have regulatory and supervisory power, as well as an advisory role for private companies and law enforcement, and awareness building for the public.
We have an opportunity to fundamentally remake the tech landscape in Canada. Let’s not waste it.
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This article first appeared on Policy Options and is republished here under a Creative Commons license.