Outrage over NSA spying sends data clients to Canada
TORONTO — In Kamloops, arid as a desert with cool summer nights, Telus Corp. only has to turn on the air conditioning about 40 hours a year to keep its computer servers from overheating.
The chilly temperatures are part of Canadian companies’ sales pitch to businesses looking for places to store their growing troves of digital information as cheaply as possible. They also boast of inexpensive hydroelectric power and low seismic activity. And now they’re touting what they say is a new advantage: less snooping.
Revelations that the U. S. National Security Agency ( NSA) has spied on data networks run by American companies have given Canadian data- centre operators an opportunity. They’re telling customers from Europe and Asia that laws north of the border are more protective of privacy. Sales of storage services in Canada are growing 20 per cent a year at Telus and Rogers Communications Inc. U. S.based technology companies, meanwhile, complain that the NSA scandal has hurt their business.
“There is a structural advantage in Canada in that the data is here and the privacy protection is more stringent,” said Lloyd Switzer, who runs Telus’s network of data centres.
The company has 10 data centres in Quebec, Ontario, Alberta and B. C., where it opened a $ 75- million, 20,000- square- metre facility in Kamloops last year. That site has room for six more modules of expansion, which would increase the investment into the hundreds of millions of dollars.
Data privacy came under scrutiny in the U. S. in June after former NSA contractor Edward Snowden revealed that his employer was monitoring phone and email traffic emanating from the United States.
International outrage over NSA surveillance may cost U. S. companies as much as $ 35 billion US in lost revenue through 2016, according to the Information Technology & Innovation Foundation, a policy research group in Washington whose board includes representatives of companies such as International Business Machines Corp. and Intel Corp.
Rogers, which competes with Telus for phone and Internet customers, gets about $ 70 million Cdn in annual revenue from data storage — still tiny at less than one per cent of total sales. The unit has had more inquiries in the past 12 months from companies outside North America than in the entire previous decade, A. J. Byers, who heads up the business, said.
“A lot of international companies trying to gain access to the U. S. used to go directly to the U. S.,” Byers said. “Now we see a lot of European and Asian companies talking to us.”
Still, the data- centre sales pitch glosses over the long history of intelligence- sharing between Canada and the U. S. The governments have collaborated as far back as the 1940s, said Ron Deibert, an Internet- security expert who runs the University of Toronto’s Citizen Lab.
“Anyone who would look to Canada as a safe haven would be fooling themselves,” Deibert said. “Canada would be one of the poorest choices as we have a long- standing relationship with the NSA.”