Compliance Criteria
What does it take to be Sovereign Compliant?
The Canada IT Sovereignty Standard evaluates a technology provider against defined criteria relating to ownership, control and accountability.
The criteria
Five criteria for sovereignty compliance
The assessment examines five connected dimensions of ownership, decision-making, taxation, governance and operational accountability.
01
Canadian Ownership
The ultimate ownership of the provider must be demonstrably Canadian.
The assessment looks beyond the Canadian operating company where ownership is held through parent companies, investment entities or other corporate structures.
We Ask:
Who ultimately owns the organization?
02
Canadian Decision Centre
Ultimate strategic decision-making must reside within Canada.
Canadian employees or local management do not necessarily establish a Canadian decision centre.
We Ask:
Where are the organization’s most important strategic decisions ultimately made?
03
Canadian Tax Domocile
The organization’s ultimate tax domicile must be demonstrably Canadian.
Tax domicile is evaluated independently rather than inferred from a company’s Canadian headquarters or operating presence.
We Ask:
Where is the organization ultimately domiciled for taxation?
04
Canadian Governance
Governance and accountability must remain meaningfully within Canada.
This includes consideration of ownership governance, corporate oversight and the authority to determine strategic direction.
We Ask:
Who ultimately governs the organization?
05
Canadian Operational Accountability
The provider must maintain meaningful operational accountability within Canada.
This considers the organization’s ability to manage customer relationships, service delivery and operational decisions without inappropriate dependence upon an external controlling organization.
We Ask:
Who is ultimately accountable for the service your organization depends upon?
Ongoing considerations
Ownership Events Matter
Sovereignty is not necessarily permanent.
A provider can change ownership through:
- Acquisition
- Private equity investment
- Recapitalization
- Merger
- Corporate consolidation
- Sale to a strategic buyer
The Standard therefore considers ownership history and the most recent ownership event.
A provider’s status should be reconsidered when a material ownership or control event occurs.
