about the security of data on Canadian citizens held in the United States.167
For some Canadian businesses, assuring customers that their data remained
in Canada, and not stored in the United States was seen as a competitive
advantage.168 Despite an opinion from the Canadian Attorney General
determining that the PATRIOT Act posed “minimal” risk, this political
controversy resulted in four provinces enacting legislation that restricted data
exchange, including health data, between these provinces and the United
The effect of these provincial laws was very dramatic because these laws
affect a wide range of public services that constitute about a third of the
Canadian economy.170 For instance, in these provinces, Canadian physicians
could not consult with their American counterparts effectively on cases if it
involved sharing medical images across the border, and American medical
imaging and diagnostic equipment manufacturers could not service their
equipment remotely because a technician would have temporary access to
Canadian patient data.171 In order to fulfill a health benefits contract with
British Columbia, the American company MAXIMUS had to create three
subsidiaries to achieve arm’s length distance and place the shares of its
subsidiary’s stock in trust with the threat of loss of the stock, and a financial
penalty if the data held by MAXIMUS’s subsidiary was breached.172 The
Information Technology Association of Canada described this province’s
data law as “the most stringent public sector privacy laws in the world—
creating an invisible wall beyond which personal information cannot be
167. FRED CATE, PROVINCIAL CANADIAN GEOGRAPHIC RESTRICTIONS ON PERSONAL DATA
IN THE PUBLIC SECTOR 1–3 (2008); Timothy Banks, Cloud Computing and the USA Patriot
Act: Canadians Implications, INTERNET & E-COMMERCE LAW IN CAN. 20, 22–23 (July 2012).
168. Robert Gates, Privacy, Power Concerns Drive Canadian Data Center Growth,
TECHTARGET (Feb. 18, 2016), http://searchdatacenter.techtarget.com/news/4500273368/
Privacy-power-concerns-drive-Canadian-data-center-growth; see Shane Dingman, Microsoft
Opens Cloud Services to Select Canadian Clients with New Data Centres, THE GLOBE &
MAIL (Mar. 14, 2016), http://www.theglobeandmail.com/technology/microsoft-opens-cloud-
services-to-select-canadian-clients-with-new-data-centres/article29225256/ (referencing an
opinion by the president of Microsoft’s Canadian division that many business feared storing
their data outside Canada because of provincial restrictions on storing public data in the United
States); Brian Jackson, Canadian firms shy from cloud because of Patriot Act, ITBUSINESS.CA
(May 20, 2010), http://www.itbusiness.ca/news/canadian-firms-shy-from-cloud-because-of-
patriot-act/15164 (noting that many Canadian firms are basing their decisions on information
storage in part on fear of the PATRIOT Act).
169. CATE, supra note 167, at 3–8 (discussing the laws passed in Alberta, British
Columbia, Nova Scotia, and Quebec).
170. Id. at 13.
171. Id. at 14–15.
172. Id. at 16–17.
173. Id. at 13.