A Plurilateral “Single Data Area†Is the Solution to Canada’s Data Trilemma

With its relatively small population, Canada faces a challenge in terms of the amount of high-quality data that it can generate to support a successful data-driven economy. As a result, Canada needs to allow data to flow freely across its borders. However, it also has to provide a high-trust data environment if it wants individuals, firms and government to participate actively in such an economy. As such, Canada (and other countries) faces what can be called the data trilemma, whereby it is not possible to have simultaneously data that flows freely across borders, a high-trust data environment and a national data protection regime; one of these three objectives has to give so that only two are effectively possible at the same time. To resolve the data trilemma, Canada should work with its key economic partners — namely the European Union, Japan and the United States — to develop a single data area that would be managed by an international data standards board. The envisioned single data area would allow for all types of personal and non-personal data to flow freely across borders while ensuring that individuals, consumers, workers, firms and governments are protected from potential harm arising from activities such as the collection, processing, use, storage or purchase/sale of data. If Canada and its economic partners share similar norms and standards for regulating data, then allowing data to flow freely across borders with these countries no longer risks undermining trust, which is crucial to a successful data-driven economy.