Lead With Governance: Shield's Pre-Budget Message to MPs

The following presentation was delivered by Shield Chief Economist Kaylie Tiessen to the House of Commons Finance Committee on the first day of their 2026 pre-budget consultations. You can read Shield’s full pre-budget submission to the federal government here.

Chair Gould, Vice-Chairs Hallan and Garon, and members of the House of Commons Standing Committee on Finance, thank you for the opportunity to present today on priorities for the 2026 federal budget.

I am here today representing the Canadian Shield Institute for Public Policy. We are an organization devoted to policy ideas that strengthen Canada’s economic prosperity and sovereignty.

Between 2016 and 2024, Canada’s budgets used the word “sovereignty” an average of three times per year.

Last fall, when Finance Minister Champagne tabled his budget in the House of Commons, the document mentioned sovereignty 57 times.

We will have to wait a few months to find out what the number is in 2026, but it’s a safe bet that the federal government will still be working to bolster Canada’s sovereignty in a volatile world.

But what does sovereignty really mean?

At the Canadian Shield Institute, we would argue that governance is the root of sovereignty. We need to govern our territory, our economy, and our society to truly be sovereign.

By this measure, digital sovereignty must be the most urgent priority for the federal government.

Too often, we have seen governments respond to digital sovereignty concerns with data residency requirements. If the data centres are on Canadian soil, that’s a job well done, right?

Unfortunately, it’s not so simple. Digital platforms require digital policies and governance institutions that engage with the data, IP, technical standards, and platform economics that define the digital realm. Canada doesn’t govern the activity that happens inside the data centres and in the cloud today, so it doesn’t matter where the servers are physically located.

Canada has spent decades ceding control of our digital infrastructure to foreign private actors. Our daily communications, cloud storage, software systems, productivity tools, AI platforms and public-sector technology stacks are overwhelmingly owned and operated by foreign firms. This dependency has direct economic, privacy, national security, and democratic consequences.

Canada has world-class researchers, strong universities, and deep reserves of AI talent.

Yet the most commercially successful AI systems are owned and scaled elsewhere. Canada funds research, but the intellectual property ends up owned by foreign firms. Canada generates valuable data, but foreign platforms monetize it. Canada procures technology, but that procurement frequently entrenches foreign hyperscalers rather than building domestic capacity. In fact, we often count wholly-owned foreign subsidiaries as being “Canadian” firms.

This is a profound fiscal and economic strategy failure. Existing and future public expenditures must build Canadian-owned capacity or we will compound the problem.

In The Canadian Shield Institute’s written submission, you will find detailed policy recommendations for how Canada can better govern the digital economy, and through clear governance, we can capture the value of our own innovations.

We explore these ideas in even more detail through our ongoing policy series, Foundations of Digital Sovereignty.

In brief, we recommend that the Government of Canada act on six priorities:

1. Establish a whole-of-government digital sovereignty strategy;
2. Create a national data trust;
3. Modernize federal privacy and data legislation;
4. Establish an innovation asset bank;
5. Create a strategic sovereign compute entity;
6. Build a strategic standards agenda;

The common denominator among these recommendations is governance. In order to meaningfully engage with the digital economy, in order to drive prosperity and productivity growth, we need to govern how Canadians engage with the digital realm.

This ethos must be suffused in our national institutions, in our trade agreements, and our approach to governance systems like technical standards and trade agreements.

Digital sovereignty cannot be an afterthought. We are long past the point where technology was just one sector of the Canadian economy.

Tomorrow, from coast-to-coast-to-coast, when Canadians get up and go to work, their job will involve a screen. Whether you’re a plumber, a farmer, a banker, child care worker, a musician or a Member of Parliament, your job today involves using software systems, databases, and other technology tools.

If Canada is content to let the digital realm be governed by foreign hyperscaler companies, or by other governments around the world, we will all be poorer for it. We believe Canada is ready to meaningfully assert our sovereignty in the digital realm, and we are proud to present specific policy ideas for how to move forward in the 2026 federal budget.