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OTTAWA – Some Canadian information technology companies are pushing back at warnings that the personal information of Canadians is being compromised in the renegotiation of the North American Free Trade Agreement.They see nothing wrong with a proposal by the United States that would forbid the storage of sensitive data in computing facilities on Canadian soil.They say data should be allowed to flow freely across borders, like other products, and that the privacy of Canadians would not be compromised.“Privacy and national security elements are part of the discussion, but they shouldn’t be seen as the entire discussion,” said David Messer, a vice-president of the Information Technology Association of Canada.“It’s about allowing businesses to operate how they see fit and not necessarily fragmenting the internet.”That view is clashing with another industry group, the Council of Canadian Innovators, which is calling on the government to resist the U.S. proposal, citing concerns over the U.S. Patriot Act and “less stringent” restrictions on access to data for U.S. companies.The council’s chair, Jim Balsillie, the former head of Research in Motion, said Wednesday in an interview that he worries the government is weak at the bargaining table when it comes to data — an issue he argues is “existential” for Canada.Balsillie has met Canadian negotiators in his role as chair of the council, which represents some of the country’s fastest-growing tech firms and investors.“Based on my interactions, I remain deeply concerned about the lack of sophistication for the 21st century economy with our NAFTA team, and most especially and including data,” said Balsillie.“My fear is our trade negotiators are guided on data policy by the big U.S. tech firms who tell us what’s good for Silicon Valley is good for Canada.”The council wants the government to back “data localization,” which would protect the sensitive personal information of Canadians especially health and financial records — from unwanted American intrusion, by storing it in on servers in Canada.The U.S. rejects that idea, and so do a number of Canadian technology firms.“To me, free trade and NAFTA, it’s all about free flow of people, goods, services, capital and now the fifth one is data,” Dirk Schlimm, executive vice-president of Oakville, Ont.-based GeoTab Inc., said in an interview Wednesday.“What is being proposed here is protectionism, because it now makes it impossible for a global player, like GeoTab, to use our scale and say ‘I want to have central data storage and to sell our system.’”The company markets a digital tracking system that is being used in 750,000 vehicles around the world to track the movements and performance of commercial fleets. It tracks the route of a vehicle as well as providing engine diagnostics, predicting maintenance needs and measuring fuel consumption. It can detect the speed of a vehicle and whether its driver is wearing a seatbelt, he said.The product helps companies improve transportation safety and efficiency, he added.While some data is clearly private, there’s a vast trove of “non-critical data” that can and should be shared across borders, said Altaz Valani, director of research of Toronto-based Security Compass.“If we talk about everything in terms of, ‘it’s too risky to take the next step,’ the challenge is at what point to we begin to say we’re actually inhibiting businesses from what they need to do?”Widespread global concern has been stoked by fears of U.S. surveillance on private citizens. The post 9-11 Patriot Act gives American law enforcement access to data stored in U.S. facilities. Revelations by whistleblower Edward Snowden about the U.S. National Security Agency’s covert surveillance programs have also raised concerns.Schlimm said Canada has strong privacy laws and can’t afford to let those standards slip because firms such as his do business with European firms, which are also subject to the continent’s stringent digital privacy provisions.His company has been able to negotiate higher privacy standards with U.S. companies because “they want to keep the Europeans as clients and that’s why they’re willing to do it for us.”But Canadians have to recognize, especially in light of the Snowden revelations, that being able to protect their data from the NSA is a “fallacy” because Canada shares information to fight terrorism with its Five Eyes allies in the U.S., Britain, Australia and New Zealand, said Schlimm.“If you look at the level of co-operation that is going on now in the international intelligence community … there is a tremendous amount of intelligence sharing going on between Canada and the U.S.” read more

HALIFAX – Federal Crown prosecutors argued on Tuesday that two of Nova Scotia’s most notorious white-collar criminals should be sentenced to 10 to 12 years in prison, prompting a judge to ask: “Where’s the body?”Nearly 17 years after the dramatic collapse of Halifax educational software company Knowledge House, lawyers put forward sentencing recommendations for two architects of the sophisticated multi-million-dollar stock market scheme.Mark Covan, one of three Crown attorneys handling the criminal trial, admitted that up to a dozen years in prison is a “harsh and significant” sentence. But he said it’s justified given the gravity of the offence.“A sentence that doesn’t recognize that someone has used their office, their education and their training to commit crime is an affront to the administration of justice,” Covan told the court.“This type of crime could not have been conceived of by the average person, let alone carried out.”Former Knowledge House president and CEO Daniel Potter and lawyer Blois Colpitts were found guilty in March of carrying out fraudulent activities in a regulated securities market.The high-flying technology company traded on the Toronto Stock Exchange before a 2001 collapse that cost investors millions of dollars.In a 207-page ruling in March convicting the pair, Nova Scotia Supreme Court Justice Kevin Coady said they artificially maintained the company’s stock price while securing new investors, who would make investment decisions based on a misleading impression of the stock demand.On Tuesday, Coady questioned the lengthy sentence sought by the Crown, saying “denunciation and deterrence doesn’t necessarily mean throwing away the key.”“When I read your brief, and the position you took … you came down to a 10- to 12-year range that you’re going to be advancing to the court,” he told the court. “To be frank, my thought was ‘Where’s the body?’”However, Covan said there is precedent for the sentence. He cited similar cases in which hefty sentences were imposed.Meanwhile, defence lawyer Brian Greenspan recommended a sentence for Potter of three to four years, arguing that there have been significant delays since the Halifax e-learning firm shut down.He said his client has lived “under the cloud of a criminal charge” for several years and that the considerable toll it has taken on his life must be considered when imposing a sentence.“The demise of (Knowledge House) occurred when Potter was 49 years of age. He’s now 66,” Greenspan told the court.He said his client has faced a stigma in the community as a result of the drawn-out regulatory, civil and criminal proceedings.Greenspan added that letters written in support of Potter offer insight into “agony sustained by Potter and his family over this very, very long period.”Potter and Colpitts are expected to be sentenced July 25.The trial began in November 2015 and heard from 75 witnesses over more than 160 court days, and 184 exhibits were received — including thousands of documents.The downfall of Knowledge House, once the star of the East Coast tech scene, has long dominated discussion in the business and investment community in Nova Scotia.The company was founded in 1984, and was reinvented under Potter in the late 1990s to become a learning and information technology company.The vision was “the complete overhaul of the K-12 and post-secondary education system through the introduction of collaborative, problem-based learning programs,” Coady said in his ruling in March.Knowledge House quickly began acquiring companies through share options, and cashing in on government contracts.By late 1999, the company had grown to 120 employees, and was closely followed in the local press.Shares in Knowledge House, which began trading publicly for a few cents, skyrocketed to more than $9.But in 2001, a series of events led the stock price to plummet, from which it never recovered. read more