Canada's Department of National Defence holds multimillion-dollar contracts with Palantir Technologies, a U.S. data analytics firm that has become a central figure in global debates over digital sovereignty. Recent documents obtained by the Investigative Journalism Foundation indicate that DND has utilized Palantir's Gotham software since 2020. The agreement, which was initially valued at $14 million, could reach a total value of up to $63 million. Notably, the contract was internally flagged as not for public disclosure.
DND maintains that the Gotham system operates on closed, classified networks within secure Canadian facilities. The department states that no government data, prompts, outputs, or metadata are stored, accessed, or processed outside of Canada. However, the department declined to specify exactly what information the software processes, citing national security concerns.
Critics argue that the location of the servers may not be sufficient protection under U.S. law. Barry Appleton, an international lawyer who practices in both Canada and the United States, points to the U.S. CLOUD Act. This legislation allows American authorities to compel U.S. companies to produce data within their possession, custody, or control, regardless of where the data is physically stored. Appleton suggests that any data held by Palantir could be subject to such orders, as they are decided by American courts under American law.
DND has stated that the CLOUD Act does not have authority over servers located in Canada. Appleton disputes this interpretation, emphasizing that the act focuses on the company's control of the data rather than the physical location of the hardware. He expressed concern about potential surveillance of Canadian strategic information during periods of trade tension.
Palantir, co-founded in 2003 by CEO Alex Karp and Peter Thiel, has drawn attention for its role in U.S. military and immigration operations. The company's involvement in Project Maven, an artificial intelligence program for targeting operations, has been described by journalist Michael Steinberger as extensive. Palantir has also faced criticism for its role in U.S. immigration enforcement and its alignment with certain political views, including statements by Karp regarding the superiority of Western values.
The controversy over Palantir is part of a broader trend in Europe aimed at reducing reliance on foreign technology providers. France and Germany recently ended their intelligence contracts with the company to explore domestic alternatives. In the United Kingdom, members of parliament have called for the termination of a $619 million contract with the National Health Service, citing concerns about data access and governance.
Vass Bednar, managing director of the Canadian Shield Institute, warns that Canada is growing a digital dependency that enriches a U.S. company at the expense of its own sovereignty. She highlights the risk of relying on foreign suppliers for critical military infrastructure, referencing recent disruptions to Starlink satellite internet services in Ukraine as an example of how such dependencies can affect military operations.
Jennifer Evans, a policy researcher, noted that DND should clarify its security measures, such as whether it uses air-gapping to isolate networks. While few Canadian companies currently offer the same breadth of services as Palantir, Evans pointed to local firms like Caseway and Anvil. Bednar argues that Canada should invest in developing domestic technology to build and own its necessary digital infrastructure for defence.
