Canada’s Digital Markets Are Growing Faster than Ottawa Can Explain Them

Technology tends to move fast, and bureaucracy can rarely keep pace. As many sectors of the economy continue to migrate into virtual worlds, the government still struggles to even define all the new forms of online activity, let alone properly regulate them. As a consequence, we are witnessing the emergence of new digital markets all over the economic spectrum, but it’s still unclear which ones are here to stay and how they fit with the Canadian mainstream.

We will take a closer look at some of the sectors where innovation is running far ahead of official recognition by the powers that be:

Gig Economy and Remote Services

This was one of the first large-scale consequences of globalisation meeting digitalisation. Skilled workers of all profiles, residing both inside Canada and half a world away, could suddenly compete with local service providers for jobs without having to travel anywhere. Online task completion platforms and e-wallet services provided the necessary online infrastructure for this type of exchange to become routine, while simple laws of supply and demand did the rest. Ottawa recognises income derived through online means as self-employment, and in the 2020’s is taking more proactive steps to tax it. However, it could certainly do more to support gig economy workers and help them build sustainable businesses while protecting their rights.

The Rise of iGaming Markets

People always used the internet to gamble, but over the last couple of years this market has gone supernova. There are all kinds of iGaming casino platforms, sports betting websites, prediction markets, and other chance-driven services available legally in Canada and their popularity is constantly on the rise. Since the potential for abuse in this sector is considerable, the government would be wise to monitor the industry very closely. While the Canadian iGaming market is widely considered to be among the best regulated in the world, there is still a lot of room for improvement. Lately, the main focus has been on preventing compulsive gambling and mitigating its most destructive psychological and social consequences.

The Attention Economy and Social Media

The government is even less sure what to make of all the influencers and social media stars who are increasingly able to affect the macroeconomic picture with a single post. Modern attention economy is measured in clicks more than in dollars, and this concept doesn’t fit neatly into traditional definitions. Online creators often have complex arrangements with each other and/or the brands they promote, and it can be difficult to keep track of all the transactions within these informal networks. To make matters even worse, a deluge of AI-generated content is flooding the social media platforms and clouding the issue of authorship and accountability even further. Just dealing with deep fakes and fraud will be a challenge for the institutions that were not built for it.

Cryptocurrency and Decentralised Banking

There is no single technological invention that has been more confusing to the business establishment than crypto. The existence of a reliable cross-border payment mechanism that almost completely bypasses the banking channels represents both an opportunity and a serious threat. With a whole ecosystem of financial services and derivatives based on crypto coins sprouting up in just a few years, the central government is playing catch up. Canada has so far been conservative in this space, opting to regulate so called ‘stablecoins’ strictly whereas some other nations are issuing their own, government-backed versions of digital coins. This is illustrative of the country’s attitude towards digital markets in general: keeping things secure takes precedent over chasing maximum gains or pushing technological transformation to the limit.

D. Welsh writes on tech and digital currency.