By Richard St-Pierre

September 15, 2026

On September 10th in Calgary, Prime Minister Mark Carney and President Volodymyr Zelensky signed a declaration of partnership framed to last 100 years.

Its centrepiece is industrial. Canada will build the capacity to produce millions of drones within two years, a third of them destined for Ukraine, with Canadian firms learning directly from what Carney called the most battle-tested developers on earth.

Most of the coverage focused on what Ukraine receives from this arrangement. The more revealing question is “What did Ukraine ask for?”

A country under daily missile fire did not ask for the factory to be built on its own soil. It asked for the factory to be built somewhere it cannot be struck.

That is not a surrender of sovereignty. It is the most sophisticated expression of sovereignty available to a state under threat. No defence planner confuses concentration with control. Under sustained attack, resilience comes from dispersal, from redundancy, from supply chains shielded by geography.

Ukraine understands these truths better than we do, because it has been tested on them.

In the digital domain, Canada’s policy has run in precisely the opposite direction.

The Territorial Reflex

Across Europe, the Persian Gulf and much of Asia, digital sovereignty has been legislated as a question of coordinates. Data must reside within the national territory. Compute must sit on national soil. The instinct is understandable. Territory is what governments know how to defend, and a border is politically legible in a way that a cryptographic key-management architecture is not.

But the solution that is easiest to defend politically is often the most fragile technically.

Consider a small European state on NATO’s eastern flank. Its population registry, its land titles, its tax records, its health data, its proprietary AI algorithms and its continuity-of-government systems all sit within a territory measured in a few hundred kilometres. Every one of those assets is inside the same blast radius.

A localization mandate (a government-imposed regulatory mandate restricting certain data location and processing within national borders), in that geometry, does not protect the national memory. It co-locates the national memory with the missiles aimed at it.

This is not a thought experiment. It is a documented case.

Before Russia invaded in February 2022, Ukrainian law required government data to be held on servers inside Ukraine. Days before the invasion, the Ukrainian Parliament repealed its own data localization law in order to remain sovereign. In the weeks that followed, more than ten petabytes of state data — the population register, land and property ownership, tax payments, education records — were moved out of the country and into distributed infrastructure abroad. Russian forces conducted wiper attacks designed to erase the Ukrainian state’s records. The records survived.

Residency is Not Control

The standard objection arrives immediately: Surely a country that places its most sensitive data abroad has handed its sovereignty to whoever hosts it.

That objection describes commercial cloud outsourcing. It does not describe what is technically and legally available today.

Sovereignty exposure is a function of control, not geolocation coordinates. Control means who holds the encryption keys, under whose law the data sits, who is cleared to operate the facility, and what happens when a foreign court comes asking.

Each of those is an engineering and treaty question, and each has an answer: national key custody in hardware security modules that the host country cannot access, confidential computing that keeps workloads encrypted in memory, operator separation, post-quantum cryptography for archives that must survive decades, and a binding bilateral instrument governing the premises.

Estonia solved this nine years ago. In 2017, it signed an agreement with Luxembourg, later ratified in legislation, establishing the world’s first data embassy: a dedicated facility in Betzdorf hosting the databases required for the continuity of the Estonian state.

It is not a disaster recovery centre. Estonia retains jurisdiction over the data, and the premises carry immunities and privileges built on the model of the Vienna Convention. It is a novel instrument in international law, and it works. Monaco followed in 2021.

Luxembourg has no energy advantage, no landmass and no strategic depth. It simply had the legal imagination to move first.

Why Canada, and Why Now?

Canada’s case rests on geometry before it rests on virtue.

Our allies in Europe, the Baltics, the Gulf and East Asia face a category of risk we do not: an adversary within reach who is willing to destroy infrastructure outright. That is a risk no legal instrument and no encryption can answer. Only distance answers it.

That risk asymmetry is not a tribute to Canadian character; it is a fact about the map, and it makes distance an invaluable asset in this rapidly evolving status quo.

Distance from markets was the defining Canadian economic liability of the twentieth century. Distance from missiles is a 21st-century asset, and it is one that cannot be manufactured, subsidized or legislated into existence by any of the countries that need it.

On top of our geography sit the other Canadian advantages I have described before: some of the cheapest clean electricity in the OECD, a climate that halves cooling costs, stable institutions and a legal system that allied governments already trust. Those make Canada a credible host. Geography is what makes Canada a necessary one.

Canada is not without exposure of its own. Our neighbour has shown a willingness to treat economic and technological dependence as leverage. But that is a risk of a different kind, the risk of pressure for access rather than of physical destruction and it is precisely what this thesis resolves.

When the sending state holds the encryption keys and the premises carry treaty status, Canada cannot be compelled to surrender what it cannot read. The asset is designed to be worthless to a coercer, wherever the coercion comes from.

The comparison that matters is not to a world without risk. It is to the present: in most cases, allied governments already hold their most sensitive data on American infrastructure, under American law, at the maximum possible exposure to American pressure. Canada, with allied-held keys, is the improvement on that arrangement.

And the logic runs both ways. If Canada’s own exposure is real, and it is, then a portion of Canada’s sovereign core belongs in Europe, on the same terms. Middle powers holding one another’s crown jewels is not a concession. It is what the vanguard looks like.

That vanguard is assembling faster than most Canadians have noticed. In February, Canada became the first non-European country to join the EU’s Security Action for Europe initiative. This month, the Prime Minister addresses the European Parliament to open discussions on what he calls a unique alliance, short of membership, and the Parliament has answered by opening an office in Ottawa. None of these instruments was designed with data in mind. All of these instruments fit the current argument seamlessly.

Three Further Qualifications

First, Canada is a Five Eyes member, and European ministries will ask what that means for lawful access. The answer has to be structural rather than rhetorical: Canada has no extraterritorial production instrument comparable to the US CLOUD Act, and any credible offer must pair hosting with national key custody, so that access is a cryptographic impossibility rather than a diplomatic promise.

Second, some will argue that distance itself creates technical difficulty. It does. But this is a design constraint, not a disqualification. Time-sensitive functions can remain close to home while the assets a state cannot afford to lose sit out of reach. Distance is managed, not eliminated, and the objective survives intact.

Third, subsea cable is itself a chokepoint, as recent incidents in the Baltic have made clear. That is an argument for route diversity and for multiple allied hosts. It is not an argument for putting everything back inside the blast radius.

The Win-Win and the Financing it Unlocks

This is where the drone logic completes itself.

The Calgary agreement is not charity in either direction. Ukraine gains manufacturing scale and shielded supply. Canada gains an industry it did not have, technology transfer from the world’s most experienced practitioners, and a position in a theatre of warfare that will define the next decade. Both parties are better off, and neither is a client of the other.

Sovereign compute follows the same structure.

Frontier AI and quantum infrastructure are capital-intensive at a scale that 41 million people cannot amortize alone. That is the same financing arithmetic that put foundational AI model training beyond our reach; only here, it runs in our favour.

The demand for an Allied anchor settles a business case that domestic demand cannot. It lets Canada build AI and quantum capacity at a scale our own economy would never justify, and then use that capacity against our own productivity gap, which remains the most serious economic problem this country has.

Exposed allies get survivability. Canada gets scale it could not otherwise finance, and deeper ties with the partners who matter most.

What it Takes

Four things, and none of them require a decade:

1. Legislate data embassy status:

Canada needs the enabling framework to offer allied governments jurisdictional guarantees over data held on Canadian soil. Again, Luxembourg has had one since 2017. We have none.

2. Set a national key custody standard:

Post-quantum, hardware-anchored, and designed so that the sending state holds the keys. This is what converts a hosting offer into a sovereignty offer.

3. Resolve grid interconnection inside the window on Canada’s terms:

Hyperscalers are committing to global sites through 2027, and the power and permitting decisions made now will fix the physical shape of Canadian compute for a decade. American infrastructure on Canadian soil remains American infrastructure under American law. Not every builder carries that exposure. Bell Canada’s Saskatchewan project, expanded this week to $52 billion with a pathway to a 1.2-gigawatt AI hub and an explicit data-sovereignty mandate, shows that the physical layer can be built under Canadian custody. What such a project still lacks is the layer above it: allied-held keys, separated operators, treaty-eligible premises. The window is Canada’s leverage to require those from the start, not retrofitted after the concrete has cured.

4. Name a first partner:

Ukraine is the obvious candidate. The partnership is signed, the requirement is proven, and the reconstruction of Ukrainian digital infrastructure is a 100-year project that has already begun.

The Archive and the Arsenal

In my last piece for Policy, I argued that Canada risked becoming a digital colony without losing an inch of soil. The escape from that condition is not the hermetic self-sufficiency of autarky. Autarky is the trap — it is what a localization mandate sells as independence while quietly concentrating everything a hostile state would aim to destroy.

The escape is alliance, built on infrastructure rather than borders, with control engineered rather than assumed.

In Calgary, Canada agreed to build the arsenal for a partner’s survival. The harder and more lasting version of that commitment is the archive.

Richard St-Pierre is Quantum and Ai Sovereignty Senior Advisor at Levio. He previously served as Managing Director of the Quantum Innovation Zone in Canada.