Tech, tariffs and Trump: Canada lost in the digital world.
Digital disarray
Last December, the Canadian Senate amended an error in Bill C-26 (national cybersecurity) and sent it back to the House of Commons (who missed the error the first time). Senators fixed an numbering error which would have invalidated the entire second half of the bill. The numbering error was a result of Bill C-70 (the foreign interference act) being rushed through the House and parts of that bill were meant to supersede one part of Bill C-26.
Even if Trudeau hadn’t prorogued parliament, it is unlikely the Commons would have time to pass the amended bill before a federal election. Other digital laws that died when Trudeau prorogued parliament: the new privacy and AI bill (Bill C-27), the online harms bill (Bill C-63) and the age verification bill (Bill S-210).
One of the few Liberal digital policies to make it into law? The digital services tax which was under attack by U.S. legislators even before Trump took office.
The Liberals, after sitting on their hands for five years, rushed out poorly thought out digital laws. Classic example: they paired the overdue privacy update with AI legislation into one bill. They doubled the work for the parliamentary committees, doubled the witnesses and submissions, and now we still don’t have a badly needed updated privacy law.
For more info on Canada lost in the digital world, read Why Years of Canadian Digital Policy Is Either Dead (Prorogation) or Likely to Die (Trump).
Tech, tariffs and Trump
Today (February 27th) Trump declared 25% tariffs will take effect against Canadian products March 4th. Meanwhile after Trump’s tariffs on China and Mexico, two large computer manufacturers, Dell and Acer, announced price hikes on American computers of 10%. Expect other manufacturers to follow and expect even higher hikes.
Why the price hikes on US computers?
Most computers contain Chinese chips. And manufacturers like Lenovo have been trying to get around US tariffs by having their computers with Chinese chips assembled in Mexico (Mexico being a part of NAFTA).
What does this mean for Canadian businesses? If you need to order a server or router that comes from the United States that contains Chinese chips and was assembled in Mexico, expect a big price increase. Eventually the higher price of servers and network equipment will lead to higher cost of cloud services from US companies.
In tech laws and tariff troubles with the US, Canada definitely brings a hockey stick to a gunfight. Now that we have settled the Whisky War with Denmark, it’s time Canada allies itself with the European Union and copies their digital legislation to present a united front to the United States. While the EU digital legislation is not perfect, it is better aligned with Canadian values regarding privacy.
Despite parliament prorogation the Canadian government is still quietly negotiating a bilateral law enforcement data-sharing agreement with the U.S. under a piece of U.S. legislation called the Clarifying Lawful Overseas Use of Data Act (“CLOUD Act”) that guts Canadian privacy laws. Under this proposed act, US police could request personal information on Canada citizens without a warrant. And it gets worse. More details on this stormy CLOUD act here. These CLOUD act negotiations should cease until after a federal election.
