Microsoft outage highlights Canada's digital vulnerability, experts say

A widespread outage of Microsoft services this week left many Canadian businesses and government offices unable to communicate digitally, and experts say the event highlights the country's dangerous dependence on a single U.S. technology provider. The outage affected Microsoft 365 offerings including Outlook, Teams and the Copilot AI assistant, disrupting work for countless users. Microsoft said most services had been restored by Friday afternoon but fixes were ongoing, with no timeline for full restoration. The company reported its 365 suite had nearly half a billion paid subscriptions as of January, and the outage spanned regions from North America to the Asia Pacific. "The fact that Canada basically closed for business because one U.S. company had a glitch on some servers shows how dependent we are, how vulnerable we are," said Joshua Pearce, who holds the Thompson Chair of Innovation at Western University. Emily Osborne, a policy research associate at the Canadian Shield Institute, said she was shocked by the extent of the disruption. "I was just shocked how much white collar work depends on the single Microsoft product, and when it’s down, really lots of people weren’t able to do their jobs," Osborne said.

She added that organizations were powerless during the incident. "There was nothing we could do to sort of address the outage as it was happening, we were just helpless to Microsoft’s control," she said. "We depend on so few providers, and when the services of one of them stops working that has a huge impact on our economy." The federal government confirmed it was impacted by the outage. "The Government of Canada experienced impacts from the Microsoft service outage. Ensuring government digital services are secure, reliable and resilient is a priority, and we continually assess our systems and dependencies with that objective in mind," said AI and Digital Innovation Minister Evan Solomon in a statement.

Experts say diversifying reliance on different providers and expanding beyond major American firms can give businesses and consumers more options when problems arise. Osborne said having more sovereign digital providers is something Canada could work on, pointing to actions in the European Union. "We’ve seen lots of governments in the EU making the very active and strategic choice to move away from products delivered by American firms. So that’s certainly something that Canada could consider doing to increase our resilience," said Osborne. She suggested starting with a government communication platform as a sovereign, privacy-preserving alternative to Microsoft products.

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In the EU, a service called Euro-Office is a suite of cloud-based digital sovereignty initiatives launched this year as an alternative to platforms like Microsoft 365. "It’s an open source office suite that does everything Microsoft Office does, but it’s developed by the European Union. It’s open source, it’s free, and it’s meant to be a project to sort of decouple the European Union from these tight, vulnerable things to American software," said Evan Light, an associate professor at the University of Toronto's faculty of information. Light said such systems can be tailored and scaled to individual organizations, limiting the impact of any single outage to a smaller group of users.

Brett Caraway, an associate professor of media economics at the University of Toronto, said businesses and institutions need backup plans for technology failures. "Thinking in terms of multi-homing and then having sort of multimodal forms of communication at your disposal rather than just getting into the habit of using one service all the time over and over and over again," Caraway said. He advised organizations to game out what they would do if they lost a critical service. "There’s a lot of convenience and a lot efficiency that comes out of having a centralized coordination system, but it also exposes you to a great deal of risk." Global News sent a request for comment to Shared Services Canada, the federal government's IT provider, asking if sovereign digital communications software is being developed or considered. A spokesperson acknowledged the request but did not provide a response by publication.

With files from Global News