OTTAWA -- The federal government has received a batch of recommendations on how to make Canada a global hub for an emerging digital platform known as "blockchain."
The nascent technology has been widely hailed as a game changer, with the potential to transform everything from financial transactions to how democracies vote to a music lover's ability to buy a favourite tune straight from the artist.
And Canada is well-positioned to be leader in blockchain development, argues a report released Friday that received funding from the federal government.
"If we do this right, blockchain technology can usher in a halcyon age of prosperity for all, and Canada will lead the way," reads the report, entitled "The Blockchain Corridor: Building an Innovation Economy in the 2nd Era of the Internet."
"Canada today has a head start and thus a rare opportunity to be that global hub or, at least, one of a handful of such hubs."
The report was prepared for and funded, in part, by the federal Department of Innovation, Science and Economic Development, says its author, the Tapscott Group -- the high-tech think tank founded by innovator Don Tapscott.
To be sure, blockchain has the full attention of the Trudeau government, which has frequently stated its core goal of boosting innovation as a way to help inject some life in the country's ho-hum economy.
Innovation is expected to be a theme of Ottawa's budget, which will be released in the coming weeks.
Much like a global bulletin board, blockchain offers a digital ledger where information can be shared, moved and maintained on a huge, transparent network. It's viewed as far more secure than the Internet and more protective of an individual's privacy.
Viewed by some as the foundation of the second generation of the Internet, it's still so new that its full potential remains unknown.
Its peer-to-peer design aims to cut out the middleman, reducing costs for businesses and everyday consumers alike. Many predict blockchain, the underlying technology of the digital currency bitcoin, will eventually help counter inequality and deliver more benefits to poorer regions of the planet.
The advice in the 49-page report was developed following a December roundtable where public- and private-sector stakeholders explored ways to turn Canada into a global hub for the blockchain "revolution."
Academics, business leaders, regulators and senior officials from the public service, including then-international trade minister Chrystia Freeland, participated in the meeting.
Here some of the proposals laid out in a draft version of the report, obtained by The Canadian Press:
- Establish a digital economy commission. The commission should be tasked with developing solid recommendations on how Canada can become a leader in developing technologies such as blockchain, quantum computing, artificial intelligence and self-driving vehicles. It would be made up of stakeholders from financial institutions, the research community, tech entrepreneurs, civil society and consumers.
- Get governments using blockchain. The report says governments at all levels should use the technology to transform their own operations to provide examples of how the technology can benefit public sectors in Canada and abroad. Governments could use blockchain to collect taxes and manage public services more efficiently.
- Create a blockchain centre of excellence. Universities and colleges in Canada should be closely involved in blockchain development, just like efforts that have been made in other countries. They can also test blockchain applications; electronic voting, for example, could be tested in campus elections.
- Support a blockchain research institute and a centre of excellence. The report says the Tapscott Group is launching a not-for-profit institute with a goal to "unlock" the potential of blockchain in different industries as well as within organizations. It says global experts will undertake research to lay out the blockchain road maps.
- Extend "flow-through" financing to the tech sector. This would give entrepreneurs access to large pools of funds to advance research and development in the tech sector, particularly in blockchain. It would also enable ordinary investors to get involved in the sector. The system could be set up on a blockchain ledger, increasing accountability and transparency.
Many challenges remain, however, before blockchain is ready for "prime time" in many applications, the report said.
Those include "user-unfriendly" interfaces, unsustainable levels of energy consumption to perform secure tasks and the lack of a blueprint on how to regulate the technology.
Federal departments are examining blockchain and are at the early stages of building policies around it, particularly in areas such as privacy, banking and cybersecurity, said one government source familiar with the discussions.
"Blockchain is a great example of innovative technology, and Canada has the opportunity to become a leader in its development," Economic Development Minister Navdeep Bains is quoted in the report as saying.
"My goal is to support innovation in Canada by creating an environment where emerging technologies such as blockchain can flourish, while at the same time protecting consumers when they use new and innovative technologies."
