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Hosting in Canada

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Download the PDF version of this whitepaper here.

Premise

The Internet was once a nation unto itself, with no borders and effectively no rules[1] . When choosing hosting in the early days of the Internet, the only real consideration was the speed of the server and its connection; the physical location didn't really matter at all. This is no longer the case. Today, nations around the world have asserted their laws and inserted their spies, and these days any Internet company must consider those and other factors when deciding where to physically host their Internet presence[2] . In this paper, eSecureData will make an impartial assessment of Canada and its value proposition to the Internet hosting industry.

First World Infrastructure

Canada is a first-world G8 nation with first class Internet connectivity. By any standards of comparison, websites hosted in Canada have equal or better connectivity than websites hosted in the United States or other first world nations, and much better connectivity than sites hosted in less developed nations[3] . Canada has multiple direct undersea[4] and overland[5] fiber optic connections to all major internet hubs around the world, and is among the leaders in all areas of Internet infrastructure development. There are no indications this will change in the foreseeable future[6] .

No Patriot Act and Less Spying

Spying has become part of our Internet reality in recent times and must be considered in choosing where to physically host a website, web service, web business or web application[7] . The United States, with its Patriot Act, is generally acknowledged to have the world's most intrusive laws in this area. The biggest challenges posed by the US Patriot Act and other US laws lie in the restrictions that prevent hosting companies from informing their clients when their data is seized, copied or investigated by government[8] . This doesn't apply to all cases, of course, but as a general rule, in the US, if government wants your data, it can take it and it can do so without your knowing about it. Canada is not free from spying at all, and it generally cooperates with the US, UK and Australia and New Zealand under what is known as the "Five Eyes" agreement[9] . This being said, as a general rule it is much harder for data to be seized in Canada without the client knowing about it and, in the vast majority of cases, an Internet host is free to inform their client when data is seized, copied or investigated by governments in Canada[10] .

Non-Litigious Legal Climate

One of the biggest challenges faced by companies with a web presence is the threat of lawsuits. In the US and other nations, these suits are common and judgments can be astronomical due to the common implementation of what are known as punitive damages[11] . Punitive damages are intended to punish the defendant for their infraction, rather than compensate the victim for damages suffered. In Canada, while the concept of punitive damages exists, they are generally only available where there is proof of malicious conduct on the part of the defendant. In real terms, significant punitive damages are rarely awarded and legal judgments in Canada are usually based on actual damages suffered[12] . As a result, since there is far less likelihood of winning a multi-million-dollar judgment in Canada, lawsuits are far less common and less likely to cause material hardship to a company than in the United States or other jurisdictions where punitive damages are common[13] . Do note, there is no guarantee that a non-Canadian court will not agree to hear and adjudicate a case where a site is hosted in Canada.

Restrictive Free Speech Laws

All major industrial democracies, including Canada, have some guarantees on freedom of speech and expression. Canada is no exception, and freedom of expression is guaranteed in the Canadian Charter of Rights and Freedoms[14] . This being said, all such laws are subject to restriction and Canada's are generally more strict than those of the US. For instance, the concept of hate speech is entrenched in Canadian law, and such speech is forbidden[15] . In practical terms, this consideration usually only affects sites that promote hatred or violence. In such cases, there is much greater protection afforded to those sites by US courts than by Canadian courts. On the other hand, where such sites are found to violate law, the penalties in Canada will usually be much less severe than those in the US[16] .

Minimal Censorship

Many nations require Internet hosting companies to proactively censor content deemed objectionable. Both Canada and the US have come down on the other side of this debate, preferring instead to implement minimal controls on the publishing of content, and instead relying on the court system to punish those who publish illegal material[17] . Any company with a significant web presence should consider the possibility of their hosting company being forced by governments to proactively censor the content they publish, a risk that isn't currently significant in either Canada or the US but could be material to any company hosting in developing nations.

Moderate Copyright Law

In the US, copyright law is a common area of litigation. In many high-profile cases, copyright lobbies in the United States have successfully convinced courts to force internet hosting companies to divulge information regarding their users and their activities, and have sometimes won huge judgments based on that information. On paper, Canada's copyright law is similar to that of the United States, but in practice, the ability of copyright lobbies to force internet hosts to divulge information is far lower in Canada, and Canadian privacy law protects end users in most case. Beyond this, actual judgments awarded to date in Canada are far lower than those awarded in similar cases in the United States[18] . Again, there is no guarantee that a non-Canadian court will not agree to hear and adjudicate a case where a site is hosted in Canada.

Easy Physical Access if Needed

In cases of colocation, it is sometimes necessary to physically install or retrieve equipment in the hosting data center. All major centers in Canada are serviced by world-class airports[19] , hotels and roads, and access is straightforward at all times. Beyond this, Canadian cities generally have very low crime rates and present no safety hazards to visiting technicians[20] . This is true for all G7 nations, but should be considered when hosting in developing nations.

Stability

Canada is among the wealthiest nations in the world, and its economy is extremely stable with among the lowest debt and deficit levels of any first world industrialized democracy. While the downturn of 2008 hit the US and other nations hard, Canada was relatively unscathed, with no significant bank failure. There is no material political unrest in Canada and the risk of instability in Canada's political structure appears minimal. Even the threat of Quebec separation appears to have subsided[21] . Winters are severe in much of Canada, but Canada is well equipped to deal with it and weather-based disasters are very rare[22] . Beyond this, the Internet hosting hub of Vancouver has a mild climate with almost no snow[23] . There are never any guarantees when choosing a place to host but, from a stability perspective, Canada appears to be as good a bet as any.

Summary

Challenges presented by hosting in the United States and other countries have forced companies that rely on their Internet presence to look for alternatives. For companies that publish highly controversial or illegal content, or that actively permit violent or hateful speech on their websites, Canada's hate-speech laws will make it difficult to operate. For the rest, Canada is clearly hosting destination worth considering. If you're interested in exploring that alternative, take a look at the eSecureData website at www.esecuredata.ca.


You May Also Be Interested In:

“Canadian court decision on illegal downloading protectsagainst ‘copyright trolls’ but not against breaking the law,” by Gillian Shaw, The Vancouver Sun, February 21 2014, http://blogs.vancouversun.com/2014/02/21/canadian-court-decision-on-illegal-downloading-protects-against-copyright-trolls-but-not-against-breaking-the-law/

“Why cold Canada is becoming a hot spot for data centres,” by Jonathen Stoller, The Globe and Mail, January 8 2013, http://www.theglobeandmail.com/report-on-business/economy/canada-competes/why-cold-canada-is-becoming-a-hot-spot-for-data-centres/article6598555/

“Timeline of Edward Snowden’s Revelations,” by Joshua Eaton and Ben Piven, AlJazeera Americahttp://america.aljazeera.com/articles/multimedia/timeline-edward-snowden-revelations.html

“Internet links not libel, top court rules,” by Meagan Fitzpatrick, The CBC, October 19 2011, http://www.cbc.ca/news/politics/internet-links-not-libel-top-court-rules-1.1064340

“Enemies of the Internet 2014,” Reporters Without Bordershttp://12mars.rsf.org/wp-content/uploads/EN_RAPPORT_INTERNET_BD.pdf

“The World’s Most Reputable Cities,” by Susan Adams, Forbes, November 17 2013, http://www.forbes.com/sites/susanadams/2013/10/17/the-worlds-most-reputable-cities/


Footnotes

[1] David R. Johnson, and David G. Post, “Law and Borders - The Rise of Law in Cyberspace,” Stanford Law Review, no. 48 (1996): 1367, http://papers.ssrn.com/sol3/papers.cfm?abstract_id=535
[2] “Beset by online surveillance and content filtering, netizens fight on,” Reporters Without Borders, March 29 2012, http://en.rsf.org/beset-by-online-surveillance-and-12-03-2012,42061.html
[3] David Belson, Jon Thompson, Martin Mckeay, Michael Smith, Svante Bergqvist, Mathias Sintorn, and Geoff Huston, “3rd Quarter, 2013 Report,” The State of the Internet, no. 3 (2013), http://www.akamai.com/dl/akamai/akamai-soti-q313.pdf?WT.mc_id=soti_Q313
[4] “Submarine Cable Map,” TeleGeopgraphy.com, accessed March 27 2014, http://www.telegeography.com/telecom-resources/submarine-cable-map/index.html
[5] “Global Internet Map,” TeleTeopgraphy.com, accessed March 27 2014, http://www.telegeography.com/telecom-maps/global-internet-map/
[6] “Priorities,” PM.gc.ca, accessed March 27 2014, pm.gc.ca/eng/priorities
[7] Antonio Regalado, “Spying Is Bad for Business,” MIT Technology Review, March 18 2014, http://www.technologyreview.com/news/525526/spying-is-bad-for-business/
[8] “Introduction to Module V: Effect of USA Patriot Act, Foreign Intelligence Surveillance and Cyberspace Privacy,” (from the course “Privacy in Cyberspace,” offered by The Berkman Center for Internet and Society at Harvard Law School, 2002),http://cyber.law.harvard.edu/privacy/Introduction%20to%20Module%20V.htm
[9] Paul Farrell, “History of 5-Eyes - explainer,” The Guardian, December 2 2013, http://www.theguardian.com/world/2013/dec/02/history-of-5-eyes-explainer
[10] Craig Forcese, “10 questions about Canada’s internet spying,” The Globe and Mail, June 11 2013, http://www.theglobeandmail.com/globe-debate/10-questions-about-canadas-internet-spying/article12468197/?page=all
[11] W. Kip Viscusi and Alison F. Del Rossi, "The Changing Landscape of Blockbuster Punitive Damages Awards," American Law and Economics Review, Oxford University Press, vol. 12(1), pages 116-161, http://www.nber.org/papers/w15571.pdf
[12] John Y. Gotanda, “Punitive Damages: A Comparative Analysis,” Villanova School of Law Working Paper Series, Working Paper 8, August 2003, http://law.bepress.com/villanovalwps/art8/
[13] John Y. Gotanda, “Punitive Damages: A Comparative Analysis,” Villanova School of Law Working Paper Series, Working Paper 8, August 2003, http://law.bepress.com/villanovalwps/art8/
[14] Canadian Charter of Rights and Freedoms, s 2, Part I of the Constitution Act, being Schedule B to the Canada Act 1982 (UK), 1982, c. 11
[15] Canadian Human Rights Act, 1985, RSC, 1985, c. H-6, http://laws-lois.justice.gc.ca/eng/acts/H-6/FullText.html
[16] John Y. Gotanda, “Punitive Damages: A Comparative Analysis,” Villanova School of Law Working Paper Series, Working Paper 8, August 2003, http://law.bepress.com/villanovalwps/art8/
[17] “United States and Canada,” OpenNet Initiative, accessed April 2 2014, https://opennet.net/research/regions/namerica
[18] “United States and Canada,” OpenNet Initiative, accessed April 2 2014, https://opennet.net/research/regions/namerica
[19] Skytrax, “The Worlds Top 100 Airports in 2013,” World Airport Awards, accessed April 2 2014, http://www.worldairportawards.com/Awards_2013/top100.htm
[22] “The Canadian Disaster Database,” www.publicsafety.gc.ca, accessed April 2nd 2014, http://cdd.publicsafety.gc.ca/srchpg-eng.aspx?dynamic=false