The Canadian government is increasingly overwhelmed by information asymmetries as the data of intergovernmental agencies have not been amalgamated. Currently, Canadian government records are fragmented, with each department constructing individual silos of data and corresponding information management protocols. Consequently, provincial and federal agencies that provide social services lack access to vital information concerning clients and their interactions with other public agencies.

Information asymmetry within and among federal and provincial government agencies significantly undermines the interactions among, organizations, communities and individuals at the local level. There are growing calls for governments to modernize and streamline their information systems. Given the advantages and widespread popularity of blockchain technology, the Canadian government should modernize its information systems by overhauling provincial and federal government data onto a blockchain platform. Bureaucracies can benefit from using this technology, as it effectively protects critical data, enforces digital property ownership and promotes smart incorporation. A blockchain platform will empower provincial and federal governments by creating central repositories for sharing information across agencies.

Blockchain, which is most notable for its role as the underlying technology behind bitcoin, is a digitally distributed ledger composed of individual blocks of data which are managed using a peer-to-peer network. Blockchain technology has four key characteristics that make them suitable for deployment in the Canadian public sector; it creates a distributed database, allows for peer-to-peer transmission, establishes transparency with pseudonymity, and ensures the irreversibility of records.

The modernization of state cybersecurity strategies has been an uphill struggle, facing inadequate infrastructure and funding. This emphasizes the need for government bureaucracies to transfer government data onto a blockchain platform as it, protects critical information by encoding individual pieces of data using unique cryptographic keys. Estonia recently streamlined all public health records onto a blockchain platform which safeguards information using hash values. This pilot project—called Keyless Signature Infrastructure— is effective as it, simultaneously allows information access and prevents data manipulation.

Public institutions can streamline their process of record keeping by digitizing information related to asset ownership onto blockchain registers. This is beneficial as a blockchain provides a digital ownership certificate for physical assets and aggregates data on individual financial accounts. In both Sweden and Georgia, land-registry authorities are pioneering a blockchain registry for all real-estate transactions using a mobile phone application—this revamping is expected to save CAD $3.5 billion annually. Hence, blockchain platforms promote accountability and efficiency by eliminating unnecessary paper transactions and dubious practices.

Another benefit for Canadian bureaucracies from transferring government data onto a blockchain platform would be the promotion of smart incorporation. Provincial and federal governments in Canada can facilitate economic growth and attract investment by digitizing the incorporation process as private companies increasingly have sophisticated equity structures. The complex nature of these contracts can be easily imported onto a blockchain platform using smart contracts. Thus, blockchain technology can automate the voting procedures and compliance mechanisms associated with individual shareholder rights and obligations.

Although a blockchain platform empowers the Canadian government by improving the efficiency and cost of managing enormous quantities of data, there still remains various challenges. Technological challenges to the adoption of blockchain technology include data standardization, platform scalability and systems integration. In the context of managerial limitations, there is still uncertainty surrounding the lack of political incentives for stakeholders to deploy blockchain technology and ambiguity surrounding the sure-fire effects of blockchain on business transformation. Emerging technologies such as blockchain are context specific and cannot be universally deployed in every situation.

In addition, governments will have difficulty in assessing the quality of blockchain solutions, as there is a lack of generally accepted standards for blockchain technologies or networks. Even if governments do manage to identify potential private partners, there is no guarantee that ambitious blockchain projects can be seen to completion. This is due to the fact that a large portion of blockchain service-providers are small start-ups who lack significant cash flow to ensure long-term stability. Likewise, another looming concern is that data being shared across public networks through the use of blockchain technology would have to be safely encrypted. Unless current and future encryption methods are resilient and up-to-date, individual privacy could be undermined through persistent cyberattacks.

There have been some early attempts at experimentation using blockchain by stakeholders in the public sector. The Bank of Canada attempted a blockhain-pilot named Jasper and came to the conclusion that blockchain technology is not ‘mature enough’ to act as an effective platform for a “national interbank payment settlement system”. In contrast, state governments in the United States have been proactive and enthusiastic about experimenting with blockchain technology. Two states leading the charge on public-sector transformation using blockchain technology are Delaware and Illinois. Delaware recently awarded a $738,00 contract to IBM to develop a blockchain based corporate filing system. Therefore, the Canadian federal and provincial governments will have to invest significantly if they are to remain competitive in an industry that is evolving rapidly.

Blockchain technology is best-suited towards modernizing government records as its core attributes—transparency, security and control—run parallel to the administrative goals of bureaucracies. Adopting a blockchain platform would revolutionize societal interactions between citizens and organizations by effectively, protecting assets and set organizational boundaries, establishing and verifying identities and guiding managerial and social action. However, stakeholders in the public sector will still have to navigate through the uncertainty and limitations surrounding blockchain technology.