By: Maisha Hasan, Local Journalism Initiative Reporter, Burlington Local-News.ca
Microsoft plans to invest $7.5 billion in Canada’s AI infrastructure over the next two years, a move announced in late 2025 that the company says will strengthen Canada’s digital sovereignty.
Brock University data governance expert Blayne Haggart disagrees. Haggart says the idea that Canada would be in charge of its own digital information remains a vague promise with a U.S.-based company involved.
“Microsoft is a U.S. company, and they are subject, above all, to the U.S. cloud,” Haggart said.
The CLOUD (Clarifying Lawful Overseas Use of Data) Act, passed in the U.S. in 2018, requires that all U.S.-based technology companies provide all stored data upon legal warrant, even if that data is stored in or outside the U.S.
Microsoft claims that it would try to fight against any legal request it thinks is unlawful.
“The problem is we’d be leaving it up to Microsoft or any company to decide whether or not something is lawful or not, and it’s worth fighting. The [Trump administration] does not respect the rule of law domestically or internationally; there’s nothing stopping them from putting pressure on companies to basically say, “Give us this information or else,’” Haggart said.
In September, the U.S. Department of Justice (DOJ), in its claim that the 2020 election was rigged, demanded voter information and sued 24 jurisdictions for not handing it over.
“[The U.S.] had a history of pressuring companies before, and with Trump, to be subject to investigations or worse, is even stronger,” Haggart said.
However, Haggart says there are Canadian or other alternatives. The only issue is getting people to go along with them.
“This is kind of a systemic thing that the government has to address. It is huge because over the past 25 years, we’ve allowed these companies to establish themselves as kind of foundational players in our digital infrastructure.”
Finding substitutes and effectively using them would take time, money, and a fundamental desire for change that Canada may not have — but that is what Haggart deems necessary.
“There is no excuse for just ignoring the fact that if we keep [Microsoft] in our country, like they are right now, and we continue to incorporate them into the fundamental essential infrastructure in government, in the military, in our universities, in our businesses — the risk is still going to be there.”
Alternatives don’t necessarily have to be Canadian. The main fear is the Trump administration and how the U.S. has historically operated in terms of access to data. There would be less concern with European companies.
“Protecting sovereignty alone isn’t quite the thing that we should be focusing on. It should be working with partners that we can trust and that aren’t compromised by having to deal with a very problematic government down south,” Haggart said.
The issue extends beyond Microsoft. With companies like Meta and Grok AI, questions about who owns this data and where it is stored are becoming increasingly urgent.
“We should have treated digital infrastructures differently than we had. We should have recognized their centrality to understanding power and control and the influence that they can have. As we saw with Meta and the news blockade, companies that are capable of monopoly powers can also decide that [they] don’t want those services anymore, and that hurts Canada.”
In 2023, Meta removed news from its platforms (i.e. Facebook and Instagram) due to Canada’s Online News Act, requiring platforms to compensate all news publishers for use of their content. To this day, Meta still remains in talks with Canada to restore news.
There is still hope to dissolve Microsoft and find a solution before it gets to the same point as Meta.
“The first year of the Carney government has been generally characterized by trying to kind of have it both ways, to distance Canada from the United States while not annoying the United States too much,” Haggart said.
Canada’s current AI policy includes 151 approved AI suppliers, including Microsoft and Palantir — companies often linked to the concept of a “sovereign cloud.”
However, their presence in Canada’s digital infrastructure also introduces foreign influence.
“[The government] needs to realise this is an issue…at the top level, recognizing that they need to have control over social media, which is a huge source of news and culture for Canadians. You need to secure that to make sure it’s healthy. Then, preventing things like companies cutting off services that we depend upon, whether it’s email or something like that. You have to think about, for instance, what parts of our data infrastructure are so essential that they need to be protected?” Haggart explained.
Since Bill C-27, the Digital Charter Implementation Act, ended last January, which ensured regulations for ethical AI systems, Canada has kept AI and its regulations in the private sector.
“France and Germany are collaborating on an alternative to Google Docs, moving away from Microsoft and other tech giants [for data sovereignty]. All the government agencies and the Canadian military that use something like Outlook, Google Docs or, especially, Microsoft Word, create a huge vulnerability when they don’t have control over the software. It’s not enough to control the physical infrastructure; it comes back to who controls the computer programs and who controls the data.”
Even though it would cost a lot of money and understanding for Canada’s own sovereign data, Haggart says it is worth it. Microsoft cannot protect Canadians; only Canadians can.
“These companies are making promises [they can’t make] because they don’t want to lose market share…if they don’t go along with what U.S. policymakers want, U.S. policymakers have ways of compelling them to do so,” Haggart said.
Haggart will be holding a virtual symposium via Brock University on March 13, 2026, to facilitate further discussion on this issue.
Discover more from The Milton Reporter
Subscribe to get the latest posts sent to your email.
