Data stored in Canada can be subject to foreign courts, government paper warns

OTTAWA – A new government white paper on digital sovereignty says Ottawa can’t maintain full control over its data if its data storage supplier is subject to the laws of another country.

It warns the federal government can only maintain full legal control if it delivers the service itself, or uses service providers that operate completely under Canadian jurisdiction.

The paper, prepared for the Treasury Board, notes providers must follow the laws of each country in which they operate, which can create competing obligations.

It also says storing data in Canada, or using a Canadian supplier, would not guarantee foreign courts wouldn’t have jurisdiction.

“Most countries, including Canada and the United States, have laws that allow their authorities to request access to information held by organizations within their borders,” it says, citing the U.S. Cloud Act as an example.

The Cloud Act also allows the U.S. government to ask American companies that have offices or infrastructure in other countries to hand over data they hold abroad if it’s required for law enforcement.

The federal Liberal government and Artificial Intelligence Minister Evan Solomon have been pushing the idea of digital sovereignty and Prime Minister Mark Carney has mused about the idea of building a “sovereign cloud” in Canada.

A sovereign cloud is a computing environment companies use to run services which can be set up to comply with a specific country’s laws or core values.

Ottawa has spent almost $1.3 billion on cloud services provided by U.S. companies Amazon, Microsoft and Google since 2021. They include “mission-critical” defence applications hosted by Amazon Web Services.

Solomon’s office did not reply to a request for comment Monday afternoon. While the minister has called digital sovereignty “the most pressing policy and democratic issue of our time,” he also has said the government is still working out the definition.

In an interview with CBC’s Ottawa Morning last week, Solomon acknowledged concerns about the Cloud Act and American access to Canadian data. 

“The rules of the road, just to be clear on that, is you need a judicial warrant and it has to be a very specific kind of data, one time,” he said. “So it’s not like you can just poke a hole in it and the data funnels down.

“Nonetheless, it is imperative, Canadians have told us, and our task force… is coming back with this.”

Solomon announced that 27-member “task force” in late September and gave it a month to draft recommendations for an updated AI strategy. Critics have claimed the group is too skewed toward industry.

On Monday, a group of experts and civil society organizations issued an open letter asking the government to reconstitute the task force and extend the deadline for a parallel public consultation.

“The current consultation process suggests serious disregard for the Canadian public’s known and wide-ranging concerns about the demonstrated risks and harms of technologies currently classified as AI,” it says.

In a social media post Monday, Solomon said the consultation is now closed after having received 11,000 submissions from Canadians.

Last week, Solomon told the CBC that digital sovereignty, among other elements, means that Canadian data isn’t subject to foreign law.

In late October, Solomon did not rule out participation by U.S. companies in Canada’s sovereign cloud strategy, tech publication BetaKit reported.

Canada’s traditional telecos have been jockeying for a piece of the federal government’s push for digital sovereignty, with companies like Bell and Telus pointing to their own AI data centre projects.

Jennifer Pybus, associate professor and Canada research chair in data, democracy and AI at York University, said there could be issues even with U.S. access to those facilities, noting Bell uses chips from the U.S. company Groq.

“If the U.S. wants access to data that a U.S. company has, they can get it,” she said in an email.

This report by The Canadian Press was first published Nov. 3, 2025.