Navigating Cross-Border Data Flows and Security in the Digital Economy

Ottawa, January 30, 2024 — The absence of standardized regulations and governance over cross-border data flows has created a complex and unpredictable landscape that, if not addressed, poses risks to Canada’s economic growth, according to new research from The Conference Board of Canada.

“The digital economy relies on the seamless movement of data across borders,” stated Michael Burt, Vice President at The Conference Board of Canada. “However, amid the uncertainty regarding the regulation of cross-border data flows, there is a looming risk of developing non-interoperable and disconnected networks, posing a threat to Canadian businesses and the broader economy.”  

Cross border data flows are crucial to the contemporary digital economy. Yet, even their foundational aspects, such as the definition of data itself, remain poorly understood within this context. With trade agreements failing to define “data,” there is a need for Canadian governments to eliminate ambiguity and clearly outline which data fall under the purview of cross-jurisdictional regulation and governance.

“As Canada anticipates its pivotal role as a hub in global data transfers, it is imperative to establish a cohesive framework that ensures the smooth and secure flow of cross-border data,” according to Matt Malone, author of the report and Assistant Professor at Thompson Rivers University.

The prevailing challenge lies in the divergent approaches adopted by different jurisdictions to regulate these data flows. Despite concerted attempts, trade agreements have been unsuccessful in standardizing disparate approaches, leaving jurisdictions with the difficult task of harmonizing their regulatory frameworks.  

Given this patchwork approach, privacy and security issues have emerged as a key concern. Without unified standards for privacy and data protection, individuals face the risk of losing control over their personal data, which could render them vulnerable to a myriad of security threats.