BusinessA new report calls the market for cloud computing in Canada "broken" and warns that without requiring compatibility between shared processing providers, domestic alternatives to U.S. tech giants risk Canadians buying into "maplewashed dependencies."Researchers say making it easy to switch cloud computing providers is more criticalAnis Heydari · CBC News · Posted: Jun 02, 2026 4:00 AM EDT | Last Updated: 1 hour agoListen to this articleEstimated 4 minutesThe audio version of this article is generated by AI-based technology. Mispronunciations can occur. We are working with our partners to continually review and improve the results.A typical data centre at a small company. They account for about 50% of data centre electricity use. (Kim Brunhuber/CBC)A new report calls the market for cloud computing in Canada "broken" and warns that domestic alternatives to U.S. tech giants could still leave Canadians trapped in "maplewashed dependencies" unless providers are required to be compatible.The Canadian Anti-Monopoly Project's latest report describes cloud computing as "core infrastructure" and says there is already a lack of competition in Canada, with U.S. tech giants Amazon, Google parent Alphabet and Microsoft controlling 85 per cent of the Canadian market by one estimate.Cloud computing involves renting software, processing power and storage from a provider and accessing the output through the internet. It underpins everything from government services and bank transactions to streaming video and social media. A significant majority of Canadian cloud computing being held by only three companies is cause for concern, said Joel Blit, a University of Waterloo economics professor and senior fellow at the Centre for International Governance Innovation."Anytime that we have very high concentration in any industry, we should be worried about whether those companies can exercise market power," said Blit, whose research focuses on innovation and innovation policy.Curtis McCord is a policy analyst with the Canadian Anti-Monopoly Project, who says more competition is needed for cloud computing in Canada. (CBC)Switching providers can be costlyCurtis McCord, policy analyst with the Canadian Anti-Monopoly Project and co-author of the report, said simply adding Canadian "sovereign" providers would not fix the problem if customers cannot easily switch. "The costs for their clients to move from one provider to another ... is extremely high," McCord said. ExclusiveDraft federal AI strategy aims to scale up adoption, offer literacy training by 2031What tech CEOs want from the new federal AI strategyWithout rules encouraging or forcing companies to be compatible, customers risk being locked in to whatever provider they already use, he said."The root of the problem wouldn't necessarily be addressed." The report says domestic alternatives could still create "maplewashed dependency" if customers remain locked into incompatible systems. Can Canadians switch today?Google Cloud says online that its products allow Canadian users to "control where their content is stored and processed." Google and Amazon both offer free data transfers in some cases when customers leave their cloud services, while Microsoft Azure offers credits, including for customers in the European Union.Those moves followed pressure from European and U.K. regulators, who raised concerns about barriers to switching cloud providers.WATCH | New data centres bring support and criticism:The fight over Canada’s AI futureMay 14|Duration 1:51The federal government and Telus are backing new AI data centres in Vancouver and Kamloops. Supporters say they’ll boost Canada’s AI capacity, but critics are raising concerns about power, water and environmental oversight.But McCord said being able to export data does not necessarily mean it will work easily with another provider's system. The report calls for Canada to pursue international standards that would make cloud companies compatible with each other, saying that could increase competition and reduce dependence on a few U.S. firms.CBC News has also reached out to Microsoft and Amazon for comment on potential international standards.Federal AI strategy may offer cluesA draft version of Canada's national AI strategy obtained by CBC News mentions working on shared standards with partners. The draft, which was not final and could still be revised, also says significant investment is needed to reduce Canada's reliance on foreign technology companies for cloud computing.WATCH | AI funding announced in British Columbia:Ottawa announces funding for AI, new data centres in B.C.May 12|Duration 3:13Artificial Intelligence Minister Evan Solomon says the federal government will provide $66 million in funding for Canada's artificial intelligence sector. On Monday, Solomon said there would be three data centres built in B.C.The Canadian Anti-Monopoly Project's research paper discourages Canada and other "middle powers" from developing new standards, and to instead rely on existing technologies that are widely adopted. McCord called cloud computing "a pretty essential infrastructure" as AI becomes more widely used.Blit said concentrated control of cloud computing could also shape access to AI. AnalysisCanada wants sovereign AI data centres. What does that actually mean?"If you have hyperscalers that are very concentrated, where switching costs are really high ... They are going to control access to AI and that is potentially a huge problem for our country," he said.Blit said compatibility could boost competition, but warned it may also limit companies’ ability to offer unique products."If you impose a standard too early ... you could lock in VHS instead of Beta." ABOUT THE AUTHORAnis Heydari is a senior reporter covering business and economics for CBC News. He was a founding producer of CBC Radio's "The Cost of Living" and has also reported for NPR's "The Indicator from Planet Money" and the BBC World Service. He's lived and worked in Edmonton, Edinburgh, southwestern Ontario and Toronto, and is currently based in Calgary. Email him at anis@cbc.ca.With files from Kate McKenna