Canada: 2018 Federal Budget: Focus On Data And Data-Driven Technologies

Last Updated: March 8 2018
Article by CyberLex Blog, Kirsten Thompson and Carole J. Piovesan

Most Read Contributor in Canada, September 2018

A strong theme in the 2018 federal budget ("Budget") released last week was its emphasis on data and data-driven technologies...and the corollary theme, keeping data and data-driven technologies secure.

Below are some of the data-focused highlights of the Budget.

Open Banking

"Open Banking" refers to an emerging financial services business model that focuses on the portability and open availability of customer data, including transactional information. The open banking model has been mandated in the European Union and the United Kingdom, and is being reviewed in Australia. The Canadian Government first noted the potential benefits of reviewing the merits of "open banking" in Canada in the second consultation paper respecting the review of the federal financial sector framework which was released in August 2017. More recently, the Competition Bureau has expressed support for open banking in its final report on its market study into technology-led innovation in the Canadian Fintech sector.

The Budget confirms that the Government proposes to undertake a review of the merits of open banking in order to assess whether open banking would deliver positive results for Canadians with the highest regard for consumer privacy, data security and financial stability.

As in other jurisdictions, open banking is positioned in the Budget as having the potential to increase innovation and competition, and increasing financial inclusion as specific customers or markets (e.g. small and medium sized businesses) are better served.

A key theme is also "empowering consumers" to share their financial data between their financial institution and other third party providers through secure data sharing platforms. In this manner, financial service providers will be enabled to offer more tailored products and services, on a more competitive and innovative basis.

Open banking is also touted as having the potential to provide consumers with greater transparency on the products and services offered by financial institutions, thus allowing them to make more informed decisions, and makes it easier for consumers to move and manage their money.

Big Data

With the rise of data-driven technology such as predictive analytics and artificial intelligence, the Budget recognizes the need to invest in both the technologies and skills required to capitalize on the opportunities in the area of big data. Big data has become an essential tool for progress in science, underpinning world-class research across all disciplines. Improved technologies, such as cloud computing and faster networking, allow for new opportunities to address scientific challenges.

The Budget proposes investment in support for researchers, in big data and in the equipment Canadian researchers need to succeed and lead.

This includes more than $1.7 billion over five years to support the next generation of Canadian researchers through Canada's granting councils and research institutes. It also includes over $1.3 billion over five years for investments in the laboratories, equipment and necessary infrastructure.

Digital research infrastructure is the collection of connectivity, computing power and storage services needed to support data-intensive and computationally-intensive research.

The Budget proposes to provide $572.5 million over five years, with $52 million per year ongoing, to implement a Digital Research Infrastructure Strategy that will deliver more open and equitable access to advanced computing and big data resources to researchers across Canada. The Government intends to work with stakeholders to develop a strategy to provide more streamlined access for Canadian researchers, including how to incorporate the roles currently played by the Canada Foundation for Innovation, Compute Canada and CANARIE,

Artificial Intelligence

Last year's Budget made several specific commitments to advancing research and innovation in the area of artificial intelligence (AI), including investments in a Pan-Canadian Artificial Intelligence Strategy.

This year's Budget proposes a number of investments that are likely to fuel AI research and innovation, without naming AI specifically. The Budget seeks to "transform Canada's innovation programs—making them easier to access and to use, and expanding support for Canadian companies that want to scale up and sell their innovations in the global marketplace." It also aims to "make business regulations more efficient, and seeks to promote greater awareness and use by Canadian entrepreneurs of intellectual property, important assets that can fuel the growth of innovative businesses in the modern economy." Below are some examples of how the Government seeks to achieve these goals under the Budget.

First, the Budget proposes heavy investment in research. Some of these investments include $925 million over five years as follows:

  • $354.7 million over five years ($90.1 million per year ongoing) to the Natural Sciences and Engineering Research Council (NSERC).
  • $354.7 million over five years ($90.1 million per year ongoing) to the Canadian Institutes of Health Research (CIHR).
  • $215.5 million over five years ($54.8 million per year ongoing) to the Social Sciences and Humanities Research Council (SSHRC).

The Budget also announces $275 million to create a new tri-council fund to support research that is international, interdisciplinary, fast-breaking and higher-risk. This fund will be administered by SSHRC.

Colleges and polytechnics will receive $140 million over five years to increase support for collaborative innovation projects involving businesses, colleges and polytechnics through the College and Community Innovation Program.

The Budget proposes investing in technologies that will advance AI innovation. Specifically, The Institute for Quantum Computing in Waterloo will receive renewed funding of $15 million over three years to continue undertaking high-calibre quantum research.

The Budget is also targeting investment in simplifying programs and regulations impacting entrepreneurs. For example, the Budget proposes consolidating the total number of business innovation programs by up to two-thirds, but is increasing the total overall funding available to entrepreneurs, small business owners and other enterprise. The goal of this reform is "to create a suite of programs that is easy to navigate and will respond to the challenges and opportunities facing Canadian businesses today and into the future."

The Budget has earmarked $4.6 million over five years to enhance the Start-up Visa Program. These monies will focus on the client-service experience by ensuring applicants, private sector partners and immigration officials are able to process applications electronically and more efficiently.

The Government will also propose measures to support a new Intellectual Property Strategy to "help Canadian entrepreneurs better understand and protect intellectual property, and get better access to shared intellectual property."

Finally, the Budget proposes providing $11.5 million over three years to pursue a regulatory reform agenda focused on supporting innovation and business investment. The stated goal is to "make the Canadian regulatory system more agile, transparent and responsive, so that businesses across the country can explore and act on new opportunities, resulting in benefits for all Canadians."


New Cyber Security Strategy

With data comes data security. The Budget proposes implementing a comprehensive cybersecurity plan for Canada, consisting of investments of $507.7 million over five years, and $108.8 million per year thereafter, to fund a new National Cyber Security Strategy. The Strategy focuses on three principal goals:

  • Ensure secure and resilient Canadian systems.
  • Build an innovative and adaptive cyber ecosystem.
  • Support effective leadership and collaboration between different levels of Canadian government, and partners around the world.

New Canadian Centre for Cyber Security

They Budget also proposes a strong federal cyber governance system to protect Canadians and their sensitive personal information, and proposes to commit $155.2 million over five years, and $44.5 million per year ongoing, to the Communications Security Establishment to create a new Canadian Centre for Cyber Security.

This new Canadian Centre for Cyber Security is envisioned to establish a single, unified Government of Canada source of unique expert advice, guidance, services and support on cyber security operational matters. To establish the Canadian Centre for Cyber Security, the Budget notes that the Government will need to introduce legislation to allow various Government cyber security functions to consolidate into the new Centre (although federal responsibility to investigate criminal matters will remain with the RCMP).


The Budget proposes to provide $116.0 million over five years, and $23.2 million per year ongoing, to the RCMP to support the creation of the National Cybercrime Coordination Unit. The National Cybercrime Coordination Unit is envisioned as creating a coordination hub for cybercrime investigations in Canada and working with international partners on cybercrime. The Budget also proposes that the Unit establish a national public reporting mechanism for Canadian citizens and businesses to report cybercrime incidents to law enforcement.

Other Measures

The Budget also proposes investments in Shared Services Canada and the Communications Security Establishment to ensure that these organizations are properly resourced to address evolving IT needs and opportunities, and proactively address cyber security threats. This includes:

  • $2.2 billion over six years, starting in 2018–19, with $349.8 million per year thereafter, to improve the management and provision of IT services and infrastructure within the Government of Canada, and to support related cyber security measures.
  • $110 million over six years, starting in 2018–19, to be accessed by Shared Services Canada's partner departments and agencies to help them migrate their applications from older data centres into more secure modern data centres or cloud solutions.

The Budget also proposed enhancing the security of taxpayer information held by the Canada Revenue Agency, and proposed providing the CRA with $30.0 million over five years to enhance the security measures that protect this information.

The Budget proposes to provide Public Safety Canada with $1.4 million in 2018–19 to continue operations of the Regional Resilience Assessment Program and the Virtual Risk Analysis Cell, programs which support assessments of critical infrastructure facilities, such as energy grids, information and communication technology networks and hospitals. The Virtual Risk Analysis Cell also promotes online information sharing across the critical infrastructure community.

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