The Financial Post
Friday, October 2, 1998

Ottawa's encryption policy wins plaudits all round

by Jill Vardy

OTTAWA -- Business leaders praised the federal government's new cryptography policy, released yesterday, saying it's exactly the right balance needed to let the industry grow while protecting information.

The policy was unveiled by Industry Minister John Manley in preparation for next week's ministerial meeting of the Organization for Economic Co-operation & Development. The meeting in Ottawa is expected to lay the groundwork for international co-operation on rules governing business conducted over the Internet.

Business groups praised the policy, which allows Canadians to develop or import whatever cryptography software they choose. Cryptography is a set of technologies that makes electronic transmissions private and secure.

"Canada is an example that you can have legislation and still have a viable and vibrant electronic commerce industry", said Eric Iankelevic, electronic commerce specialist for the Canadian Chamber of Commerce.

Manley said the Canadian policy includes "light legislation - what the best of business is doing already, with an enforcement mechanism".

The chamber was especially happy the government took its advice and decided not to impose mandatory key recovery requirements or a licensing regime for cryptography products. These would have essentially given Ottawa a master key to unlock any encrypted information, including personal data.

Manley told reporters at a briefing yesterday he doubts the ability of any government to prevent criminal activity on the Internet. But the policy does include measures to help law enforcement agencies crack encrypted criminal information.

Encryption software makers were also happy with the new policy.

"We are extremely pleased to see the policy recognizes that procedures such as mandatory key recovery will stunt the growth of Canada's e-commerce industry, and has not imposed any such mandatory key recovery requirements", said Brian O'Higgins, executive vice-president and chief technology officer at Entrust Technologies Inc., which makes and exports encryption software.

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