OTTAWA — The technology industry needs government spending in order to prosper, according to some Canadian executives.

“The public sector is a hugely important customer for the Internet industry in Canada,” said Peter Nicholson, chief strategist of Montreal-based BCE Inc., Bell Canada’s parent company. “That, in my view, is the kind of industrial policy, if I can use that somewhat discredited term, that this country needs to build scale. It needs a very large, highly sophisticated, very demanding customer.”

Nicholson made his comments during a keynote address titled “Industry Enabled E-government” on Tuesday at Technology in Government Week, held at the Ottawa Congress Centre.

Ed Kilroy, president of Markham, Ont.-based IBM Canada Ltd., echoed Nicholson’s comments.

“The future of the digital economy within Canada, I believe, not only rests on the private sector, but absolutely rests heavily on the government,” said Kilroy, who also spoke at the keynote.

IBM and BCE are major contractors in the federal government’s Secure Channel project, which is designed to help the government offer services through several channels, including the Web and over the phone. The awarding of the contract for the project was announced last June.

The terms of the deal give the contractors considerable creative freedom, said Nancy Desormeau, director-general of e-government services for Public Works and Government Services Canada’s Government Telecommunications and Information Services group (PWGSC/GTIS).

The project’s vendors, include CGI Group Inc., a Montreal-based integrator owned by BCE, and Entrust Technologies Inc., an Ottawa-based IT security firm spun off five years ago by Nortel Networks Corp.

The government plans to use Entrust’s public key infrastructure (PKI) technology in order to help keep transactions secure. Desormeau said about 10,000 government workers currently have PKI keys and within the next year, the Feds plan to deliver keys to nearly 250,000 workers.

PKI helps ensure transactions are not intercepted and altered midstream by hackers and ensures non-repudiation – meaning workers cannot deny that they made certain transactions.

For some transactions, less advanced security measures, such as secure sockets layer (SSL), will be sufficient, said Desormeau, who made her remarks at a presentation titled “Government of Canada Common Infrastructure for GOL.”

Using PKI does not present a major technical hurdle, she added.

“The issue is not the PKI technology itself,” she said. “It’s been around for a while. The issue is building it into your applications.”

Keeping transactions secure is not the only issue in government services, said Carl Ledbetter, chief technology officer of Salt Lake City-based Novell Inc.

“Which information is available under which circumstances is something that has to be managed by policy,” he said. “The real issues are not the technology issues.”

He cited as an example a hypothetical scenario in which Canada issues a national all-purpose identification card, which citizens could use to get permits, such as drivers’ licenses and fishing permits.

“I think it might be great to be ale to walk in, hand your card to somebody at a kiosk, have them swipe your card and give you a fishing licence or a driver’s licence, but the last thing you really want is when they hand over your driver’s licence and say, ‘By the way, how’s your cholesterol (level) doing?'”

Ledbetter made his comments at the e-government keynote. The fourth speaker, Industry Minister Brian Tobin, did not show up due to cabinet business.

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