Not coming to you online anytime soon

As life becomes increasingly virtual, governments around the world are developing national digital IDs (NDI) to help citizens prove who they are and reduce “friction” as they move around online.

Unlike a driver's license or passport, a digital ID isn’t attached to a single card or number. Instead, it draws on verified information stored in digital credentials to prove who you are online.

They can be helpful in various situations, from setting up accounts to accessing government services and even voting. When implemented properly, advocates say such systems can also help prevent fraud, cut costs, and increase efficiency. 

These IDs have been operational in several jurisdictions, ranging from small to large, including Estonia, the Nordic countries, and India.

‘Bucking a global trend’

However, don’t expect similar offerings from Ottawa. Experts mostly blame flagging enthusiasm on the current existential threats, both economic and political, and the federal government’s minority status. They say policy makers here have yet to make a convincing case to the public that NDI should be a priority.

David Elder, chair of the communications and privacy group at Stikeman Elliott, says separate laws may be needed to launch such a system, but “in an era of populist, slogan-based politics,” it’s difficult to bring forward this kind of legislation.

“The current government has got other fish to fry,” he says.

In fact, Canada is moving backwards in this space, as previous attempts to create an NDI have been downgraded. 

Meanwhile, other jurisdictions are racing ahead, even some that have historically resisted such schemes. The United Kingdom has announced plans to roll out a digital ID scheme, and in September, voters in Switzerland backed the idea in a close referendum. The European Union aims to roll out its digital identity wallet (eID) by the end of 2026.

For these jurisdictions, the benefits outweigh potential problems, such as substantial upfront costs and the possibility of cyberattacks on what’s described as a “honeypot” target.

“We seem to be bucking a global trend,” says Brent Arnold, founder of Captsan Legal, chair of the Canadian Internet Society and vice-chair of the CBA’s privacy and access section.

While the development of an NDI in Canada is likely inevitable, it’s a long way away.

“As things get more digital, as the efficiencies become more obvious and the public becomes more technologically literate, I think we will get there eventually,” he says. 

“But not now.”

While it’s unclear what Canadians think about NDI, observers notethat voters are wary of handing government too much surveillancepower. Conservative Leader Pierre Poilievre is tapping into this sentiment in opposing a mandatory digital ID for Canadians and urging others to do the same through an online petition to ban it.

However, research by the Digital Identification and Authentication Council of Canada has found that many Canadians would like a convenient and safe way to prove their identity.

Lack of ecosystem to protect privacy

Given their centralized nature, NDI systems could offer governments and companies a way to track every interaction on the internet, says Tamir Israel, director of the Canadian Civil Liberties Association’s privacy, surveillance, and technology program.

Moreover, firms will likely request increasingly detailed private information, given the power imbalance between consumers and providers, as well as the weak enforcement of consent rules. 

“We have not developed an ecosystem that is able to preserve privacy,” he says. 

Even if the public and politicians were to embrace NDI suddenly, there are many obstacles in the way. Elder says the federal government has a laundry list of things that would first need to be in place. For starters, Ottawa would need to pass or amend rules that govern how federal institutions and private firms handle personal information. 

As NDI systems “smack of government surveillance,” there’s a definite need for guardrails to control access to information.

“Job one is the Privacy Act,” he says of the legislation which governs how the government deals with personal data. 

“They would have to have legislation establishing what [the government] can and what they can’t use it for.”

The Personal Information Protection and Electronic Documents Act, which governs how private-sector organizations collect, use, and disclose personal information, would also need to be updated, as the creation of NDIs will likely include for-profitcompanies.

So far, policymakers have repeatedly failed at modernizingCanada’s decades-old privacy rules. However, Arnold believes the federal government will take another swing in 2026 and expects it will likely resemble the previous effort, Bill C-27, without the artificial intelligence component.

However, he doesn’t expect there to be any direct mention of NDI in whatever new legislation is put forward.

A lack of funding and framework

Ironically, Canada was at one point a leader in digital governmentdevelopment, ranking third on the United Nations’ E-government Development Index 15 years ago. In 2024, Canada was ranked 47th, nearly at the bottom among G7 countries, which some have said should serve as a wake-up call for technology and public policy leaders.

In 2010, the federal government established the Task Force for thePayments System Review, which called for the development of a national digital identification and authentication framework. That recommendation led to the creation of the Digital ID & Authentication Council of Canada, a non-profit coalition tasked with developing national standards for secure digital identity and bridging the gap between public and private sectors, as well as federal and provincial governments.

In 2022, the government announced a public consultation on afederal digital identity framework, but it never advanced beyond the initial planning phase. Earlier this year, a report by the Auditor General of Canada concluded that progress in developing an NDI has been hindered by a lack of adequate funding and the absence of an updated privacy and data protection framework.

Over the years, responsibility for developing a federal digital ID has been shared among several departments and agencies, includingthe Treasury Board Secretariat and Innovation, Science and Economic Development Canada.

It’s unclear where ultimate responsibility will rest if Ottawa regains its keenness for NDI. The Treasury referred questions to the Canadian Digital Service, which is part of Service Canada. CDS says it is working on a system that will allow people to “have onesign-in method to gain seamless access to a variety of services,saving time and reducing unnecessary hassle.”

But the bigger issue of an NDI is a question for another day. During a visit to the UK in September, Prime Minister Mark Carney, who once served as the governor of the Bank of England, was asked by a reporter whether Canada would follow Britain in developing an NDI. He pointed out that the situation in Britain is somewhat different.

“The UK is relatively unique in not having other forms of identification. Canadians, we have various forms of ID, a driver's license, and social insurance.”

While he acknowledged there may be merits to having a common digital identification for government or financial services, “We don't have current, current plans for that.”