Canada has a rich history of innovation, but in the next few decades, powerful technological forces will transform the global economy. Large multinational companies have jumped out to a headstart in the race to succeed, and Canada runs the risk of falling behind. At stake is nothing less than our prosperity and economic well-being. The Financial Post set out explore what is needed for businesses to flourish and grow. You can find all of our coverage here.“I don’t think I’ve ever said anything about smart cities,” says Dan Doctoroff, chief executive of Sidewalk Labs, Alphabet Inc.’s urban innovation arm. “I really don’t like the term.”That dislike is a little bit unfortunate, because, whether Doctoroff likes it or not, he happens to be in charge of Canada’s most high-profile smart city project: “Google’s smart city” — as it is called in one news story after another — on the Toronto waterfront.Just how smart the Sidewalk Toronto project will ultimately become is still a bit hazy. It might be a technology-infused, data-driven, futuristic neighbourhood “reimagining cities from the internet up” as the company was once fond of saying. Or, critics say, it could turn into a company town that subverts the democratic will of governments and sets bad precedents for data collection, privacy and digital surveillance.At this point, Sidewalk Toronto is largely open to interpretation, which is precisely what makes it such a perfect example of a smart city project: it’s big, ambitious, technology-driven and, most importantly, still an idea, a vision, a proposal that hasn’t been realized yet.Even something as seemingly straightforward as planning to use self-driving cars causes confusion. Will the project close all the streets in the neighbourhood and only allow autonomous vehicles? That doesn’t make much sense for an area that covers only about 12 acres and can be walked from one end to the other in just 10 minutes. Instead, it might plan the streets and parking spaces in a way to accommodate self-driving cars, which is a little less groundbreaking.Proponents also talk about “tall timber” construction, using wood in innovative ways to make new kinds of buildings, and a radically different approach to public space in the buildings. Concept drawings generally feature hexagonal paving stones, allowing for flexible streetscapes that can be changed to suit different kinds of usage. Read our full Innovation Nation series Remember the internet of the ’90s? That’s what Canada’s outdated data protection laws were meant to handle Cryptoassets will revolutionize financial services — for those who play the long game The goal: Made in Canada, stayed in Canada, proudly Canadian But Doctoroff and the rest of the Sidewalk Labs team consistently say everything is a work in progress and all the ideas are open for discussion, consultation and revision until a final Master Innovation and Development Plan (MIDP) is submitted — supposedly by the end of June — to Waterfront Toronto, the federal-provincial-municipal governing agency.Even after the MIDP is published, years of permit approvals and construction plans await before any buildings are ready for occupancy. Of course, there’s also the matter of the money — likely billions of dollars — to implement that plan. Sidewalk Labs has already committed $50 million to just get this far in the process.But whatever the Sidewalk Toronto project becomes in the years ahead, the drive for smart cities isn’t going anywhere, even if a lot of urbanists would really appreciate a little rebranding.Doctoroff isn’t alone in his distaste for the “smart city” term. Most people who work in urban technology and innovation cringe because it’s become an annoying buzz term such as “the internet of things” or “blockchain.”The term also implies that today’s cities are dumb, but tomorrow they’ll be smart, which belies the enormous engineering, planning and management already embedded into every modern city.Nevertheless, the prospects for smart cities have captured the public’s attention. According to an October Surveymonkey poll for the Financial Post, 35 per cent of respondents are excited for Canada to partake in smart city projects during the next decade. By comparison, only 18 per cent of respondents were excited about artificial intelligence, and just 13 per cent were excited about self-driving cars.The federal government is also on board, having launched the Smart City Challenge in 2017 to fund municipalities that apply technology in novel ways to make life better in their communities.The case for smart cities at its core goes something like this: urbanization has steadily intensified for years, putting them at risk of grinding to a halt and collapsing under their own weight. The solution, evangelists say, is to apply innovative technology and thinking to do things such as route traffic more quickly, use energy more efficiently and make residents healthier and happier.Of course, the devil is in the details, or, more specifically, the data.Through the second half of 2018, Sidewalk Labs has faced mounting opposition from activists who want to know who will own the data associated with the Toronto project.Privacy is the most obvious concern, but policy advocates prefer to talk about data governance, which is a catch-all for questions about who owns and operates the urban data sensors, who has access to the data they collect and what the data can be used for.For example, sensors embedded in buildings could dynamically control heating and cooling systems to improve energy efficiency, but also track people as they move around. Should that system be operated by a private company or the government? If the data is anonymized, should it be available — either sold or freely given away — to third parties that could mine it for other purposes? Should police have access to the data if it would help their investigations?In China, authorities are using cameras and facial recognition software to automatically identify jaywalkers and send them instant fines by text message. Many Canadians might think that crosses the line from a smart city to an authoritarian, state-run city, but the line is increasingly fuzzy.Kurtis McBride, chief executive and co-founder of Kitchener, Ont-based Miovision Technologies Inc., which makes systems to manage traffic flow in urban environments, has spent a lot of time thinking about these data and technology issues.McBride said he’s still waiting for a consensus “architecture” for how smart city systems fit together. Right now, he said, companies are hoping to dominate urban technology the way America Online (AOL) became king of the internet before an open system based on web browsers and pages took over.“When an ultimate architecture and protocol emerges for the smart city, the impact and the possibilities are going to be so much more profound,” he said.McBride said the tussle to define future smart city standards is part of why the Sidewalk Labs project is so contentious and controversial: people worry that it will help set a precedent for how data is managed across myriad future projects in Canada.As a result, he said, government should be taking the lead in making data governance rules.“It’s very dangerous if we assume that the private sector is responsible for thinking about privacy with respect to data,” McBride said. “That’s the opposite of democracy. The people should set the rules about how data can be used and not used, and then corporations should follow those rules.”Finding a common architecture also addresses bigger issues than just traffic lights and public infrastructure, said Matthew Boukall, vice-president of product management and data solutions at real estate adviser Altus Group Ltd.Boukall said he is seeing plenty of smart city-type innovations embedded into new buildings, but each building at this point is essentially an island. Eventually, he expects a network of connected buildings will manage things such as energy consumption.In the case of Sidewalk Toronto, the company has proposed that an independent “civic data trust” would analyze and approve all urban data proposals to help ensure transparency and privacy.Kristina Verner, vice-president of Innovation, Sustainability and Prosperity at Waterfront Toronto, which has been helping to facilitate the Sidewalk Toronto public consultation process and will ultimately provide oversight on the final MIDP, said a lot of the issues around privacy can be addressed by anonymizing data right from the beginning.“All of the personally identifiable information that could be collected here needs to be de-identified and delinked from the broader data sets, so that you don’t run into a situation where there’s a bit of a surveillance city kind of involvement happening,” she said. “It should be a neighbourhood that’s really grounded in privacy.”But de-identified data collection isn’t the norm in the rest of Toronto. Subways, streetcars and buses have CCTV cameras and that video footage allows people to be identified. Moreover, the Toronto Transit Commission and other public transit agencies in the Greater Toronto Area use Presto cards and have handed over personal data about users to police on dozens of occasions.Doctoroff believes Sidewalk Toronto will define a higher standard when it comes to urban data collection.“We want to go much further than the status quo, which is essentially kind of the Wild West out there in terms of the collection of data in the public realm,” he said. “With CCTV cameras proliferating everywhere now, sensors all over the place, we actually believe at the end of the day that we need a stronger data governance regime.”Teresa Scassa, Canada Research Chair in Information Law and Policy at the University of Ottawa, and a member of the Waterfront Toronto Digital Strategy Advisory Panel, said policymakers will likely continue wrestling with these policy questions for a long time as the technology develops.“We are tinkering and fiddling. There’s more reform probably coming,” she said. “It’s urgent on one level, but at the same time, it’s just going to constantly be a work in progress.”Several critics following the Sidewalk Toronto project said the most useful thing to come out of the whole process might be to spark a serious policy discussions, even if it means Sidewalk Labs becomes a lightning rod for criticism along the way.However, Sidewalk Labs is likely an anomaly in the real development of smart cities. A single company doesn’t usually get to develop a sweeping master plan for a swath of prime real estate.A normal smart city company might look more like Uber Technologies Inc., which started as a simple ride-sharing app, but has since expanded into a broad spectrum of urban transportation services: taxis, carpooling, electric bikes in some cities, Uber Eats food delivery and even a minibus service, which recently launched in Egypt.Instead of being a planned, government-driven vision, Uber grew organically, sometimes clashing with governments that wanted to regulate the company.Andrew Salzburg, Uber’s global head of Transportation Policy and Research, said Uber Pool is a good example of how the company was able to use its data and product delivery abilities to create a service that allows people to share rides when they’re going in the same direction.“Data is part of it, but it’s also the whole platform, and the ability to handle millions of requests at the same time,” he said. “It’s actually very hard to get to scale and have enough people going in the same direction to then make it possible to offer a carpooling service.”Uber has also launched a system called Uber Movement, which provides aggregated, anonymized data on travel times within urban centres, based on data pulled from millions of rides.Salzburg said Movement is a bit of an olive branch to demonstrate the company is interesting in working cooperatively with municipal governments, instead of doing battle with them as it has in the past.“Fundamentally, we built a layer technology to move riders around, move food around and for services,” he said. “But now that we have that in place, there’s an opportunity to go back to governments in cities of all sizes, and say, ‘Hey, what are the problems that people have been working on for a long time that technology can help solve?’”It’s entirely possible that Sidewalk Labs is mired in controversy precisely because it is taking a more thoughtful approach, asking permission to build a smart city, whereas Uber is begging forgiveness for barging in and disrupting urban transportation after the fact.But as the technology develops, organic, piece-by-piece urban innovation — by companies, services and tools such as Uber, Presto and Google Maps and Street View — will likely be far more important in shaping policy, data and governance in the future of cities.