The government introduced Bill C-39, the Building Canada Strong Act, last week, and while it emphasized faster project approvals, public discussion has focused almost entirely on the implications for collective bargaining rights. Given those twin issues, it is perhaps unsurprising that the creation of an entirely new digital trade statute has gone unnoticed. Buried toward the end of a 232-page bill, the Enabling Digital Trade Act would be the first federal law on electronic trade documents such as bills of lading, an issue with real implications for bringing digital technologies to shipping and supply chains. Because these digital issues are unlikely to attract much attention, this post unpacks the provisions and their implications.

The Act implements the UNCITRAL Model Law on Electronic Transferable Records, adopted in 2017 to bring international trade into the digital era. Trade has long relied on paper, with documents such as bills of lading and warehouse receipts operating through physical possession. The right to claim the goods, or to transfer that right, has been linked to paper for a reason: an ordinary electronic file can easily be replicated, so a digital version needs a legally reliable way to establish who controls the entitlement and how it passes to someone else. The model law, enacted in a host of countries including the UK, Singapore, France, and Bahrain, seeks to solve that problem by substituting exclusive control for physical possession. Canada committed to promoting compatible legal frameworks on this issue back in April 2021, when it joined the other G7 members in a ministerial declaration. While several provinces have limited carriage-of-goods rules in their electronic commerce statutes, nothing equivalent exists federally.

The provisions closely track the UNCITRAL model law but are limited by federal jurisdiction. Section 8 provides that where a federal law requires a paper trade document related to trade in goods, an electronic record is sufficient if it meets several conditions. These include that it contains the same information, can be identified by a reliable method as distinguishable from any copies, is capable of being controlled by a reliable method throughout its life, and is protected by a reliable method against unauthorized alteration.

Section 13 states that a requirement to possess a paper trade document “is met with respect to an electronic trade document if a reliable method is used to (a) establish exclusive control of the electronic trade document by the person, and (b) identify that person as being the person in control,” with transfer of possession met by transfer of control. The Act also includes rules on writing, signatures, endorsement, amendment, conversion between paper and electronic form, and a restriction on treating a document as invalid solely because it was issued or used abroad. As with other e-commerce statutes, the use of electronic documents remains voluntary, and consent can be inferred from conduct. It also provides for dealing directly with government, such as permitting import and export information to be provided electronically “by any electronic means specified by the Minister.” If much of this sounds distinctly like longstanding e-commerce laws grounded in another UNCITRAL model law, it is because it is.

Despite the familiarity, the bill raises some questions. The Act applies only where a federal law requires or permits a paper trade document, with a definition that covers Acts of Parliament, regulations and other rules of law within federal jurisdiction. This presumably captures the rules on possession for bills of lading and bills of exchange given federal jurisdiction over navigation and shipping and over bills of exchange and promissory notes. But warehouse receipts, documents of title more generally, and the sale-of-goods consequences of transferring a document fall largely within provincial jurisdiction. Countries such as the UK did not face such limitations and have created a comprehensive legal framework. By contrast, Canada’s Enabling Digital Trade Act is much narrower, and businesses may want to know whether existing provincial rules are sufficient before fully adopting digital alternatives.

As has become all too common, the government also left some essential issues to future regulations. For example, the Act imposes reliability requirements but contains no factors to assess whether a method is reliable. The UNCITRAL Model lists factors for assessing reliability and provides that a method is reliable if it in fact did what it was supposed to do. The Canadian bill includes neither, which leaves room to contest reliability even where the method demonstrably worked, and section 21 instead gives Cabinet the power to make regulations on assessing reliability. In fact, the bill also gives the Minister the power to exempt any category of trade documents from the electronic document rules and to switch off the paperless filing and disclosure provisions “in any circumstances that the Minister may specify.” In other words, a bill designed to address digital trade uncertainty leaves much of it in place.

The bill also raises troubling data-sharing concerns. The government envisions establishing a “Tell Us Once, Tell Us Digitally” system that would allow businesses to file once and have the same information shared among multiple departments. However, section 26 of the Act gives the government far broader powers to share data, opening the door to disclosure of any import or export-related information received from anyone to any federal official authorized to collect it with no requirement that the disclosure serve the purpose for which the information was originally provided. Moreover, section 26 requires no consent, notice to the affected business, or reporting. The Act’s schedule lists specified confidentiality provisions in nine statutes (the Customs Act, the Income Tax Act, the Excise Tax Act, the Special Import Measures Act, the Safe Food for Canadians Act, the Canada Transportation Act, the Transportation of Dangerous Goods Act, the Pest Control Products Act and the Canadian Environmental Protection Act) and permits disclosure notwithstanding all of them, with Cabinet able to add further statutes by order without returning to Parliament. The bill includes no review clause and no dedicated oversight.

Canada should have legislated electronic trade documents years ago, and the model law provisions in the Act are a reasonable starting point. But given the shortcomings and concerns, the bill requires real study at committee on provincial coordination, reliability criteria and the limits of the disclosure power, not the few minutes it is likely to get as it becomes overshadowed by other aspects of yet another government omnibus bill.