Digital Identity: Driving the Economic Participation of Canadians

As Canada’s economy drives towards growth and expansion, businesses and citizens are grappling with massive change on many fronts.

From employment shifts to increased cyber threats, we’re living in an era of rapid market disruption as employees and customers. Technologies like AI are advancing industries faster than many businesses can adjust to, leading to uncertainty in the marketplace and an environment with the conditions needed for innovation.

Underpinning much of this change is an emerging need for technology’s fuel: data. Businesses need to anticipate sector shifts and improve customer experiences to maintain their market position. Citizens want more control over their personal data and more ease in their digital interactions. Taken together, these data services, processes, and policies make up Canada’s data governance approach.

Advancing Canada’s data architecture and systems is certainly complex and will require contributions from government, businesses, and citizens. But there’s one emerging market that has the potential to stitch many of these aspects together: digital identity.

Digital identity is already the lifeblood of a Canadian citizen’s operating system. Applying to university, setting up a bank account, and renewing a driver’s license all require identity verification in some form. For businesses, onboarding and transacting with customers require identity verification, which is increasingly done online. As technology is becoming more prevalent in every sector, so is the need for a robust digital identity system that serves individual citizens as the primary beneficiary. 

I believe that in the same way that the movement of money experienced globalization, where transactions became streamlined across borders and payment systems, there’s an opportunity to steer digital identity in the same direction. There’s a future where data flows easily and securely across government and business entities, while identity ownership is kept firmly in the hands of Canadian citizens, and I believe that future is within reach.

Canada’s Current Digital Identity Landscape

Several shifts lie ahead for Canada’s social and economic development that place digital identity as a priority initiative.

Immigration is set to hit all-time highs in the coming years as Canada aims to welcome over half a million immigrants annually. From getting set up with permanent residency status to applying for a mortgage, job, or university program, identity data will play a major role in helping immigrants get situated as citizens and participants in the Canadian economy.

The rise of AI is also rapidly demonstrating the need for more robust digital identity verification tech, identity credentials, and new standards of user-driven privacy to protect individuals against rising identity fraud and privacy violations.

With these shifts underway, Canada’s existing digital identity standards are overdue for an upgrade. Currently, there is no national digital ID framework to connect disparate sources of data. This means that common tasks for Canadians, such as opening a bank account, changing a surname, or applying for insurance, require a large amount of emotional labour, time, and energy from its citizens. 

Typical tasks like changing a legal name after marriage or updating a passport often take weeks to complete and add a heavy administrative burden on top of Canadians’ existing economic (work), social (family), and personal (health) demands. The burden is on citizens to continually share and authenticate their personal data across a range of vendors, forms, and tools in the absence of federal regulation that protects their privacy.

A more unified digital identity framework would help expedite these processes while providing even higher levels of security than the current system.

Moves by regulatory bodies like the Digital Identification and Authentication Council of Canada are working towards establishing a more robust, secure, scalable, inclusive, and privacy-enhancing digital ecosystem in Canada. This move is supported by Canadians, who have expressed a desire for updated policies that enable better privacy and ownership regarding their personal identity data.

Moving towards more unified identity verification policies, technology, and experiences is essential for all citizens and residents in Canada to be able to fully participate in the digital economy.

Future Opportunities and Next Steps to Unify Digital Identity

The path to innovation, let alone to a national digital identity framework for Canada, is anything but a straight line. But one thing is clear: it will require alignment from the private sector, citizens, and government. 

At the government level, there’s an opportunity to advance federal policy to steer innovation around identity identification down a focused path. Initial steps have been outlined in the Inclusive Innovation Agenda, including the need to compete in a digital world with a more unified approach to make doing business easier.

In addition to government action, the private sector plays an important role in driving widespread adoption. Current methods of verification are centralized and isolated to each unique interaction, making routine operations for customers like onboarding or requesting account information disjointed and clunky. Creating secure links via identity credentials would maintain data quality from separate sources while keeping privacy intact, mitigate fraud, and enable more streamlined user experiences for customers. 

Through collaboration between policymakers and private sector adoption, Canada has an opportunity to work toward a more interconnected framework around digital identity. From the citizen perspective, this framework would enable Canadians to verify their identity online using a combination of digital credentials that have already been verified at the identity’s inception, such as bank account ownership, biometrics, and other distinguishing personal identifiers.

A great example of this kind of interconnected system is seen in Estonia, where they rolled out a national digital ID program 20 years ago. Starting with public policy, lawmakers created legislation to cement widespread adoption, holding businesses and citizens accountable for digital identification requirements.

Along with a major investment in technology and system infrastructure, the private sector and government worked together to educate citizens on how to engage with available ID tools. These digital IDs enable Estonians to conduct a wide range of tasks, like voting online, paying bills, updating health information, or even registering a new business.

While Canada will need to carve a unique program approach to align with its federal objectives, culture, and policies, the benefits of doing the work are undeniable: Citizens enjoy more ownership and ease when it comes to their personal data, and businesses can innovate on the services and offerings they specialize in, with confidence of their alignment to policies set by government.

Canada is well-positioned to make strides towards a federal digital identity framework. Moving towards a future where data moves seamlessly through secure identity solutions for citizens and businesses is possible. As social and economic development continues to spur innovation in this area, collaboration between policymakers and private sector leaders will be crucial. 

Rapid digital transformation brings unique challenges, but it also presents an opportunity to embrace a new paradigm around identity data: a national standard that elevates how we protect and enable Canadians’ privacy and agency.