By Jan Rose

As the new economy matures, electronic documents and digital signatures will likely become common business tools. Both were recently given legal standing by the federal and select provincial governments. Yet businesses are taking a wait-and-see attitude to these e-commerce instruments.

Edmonton-based Shana Corp., an e-forms management company, often deals with the topic. President Don Murphy says electronic documentation is easier to implement within and between partnering companies where people are known to each other. But on the Internet and with the general public, "it's still a difficult thing to implement in a real trusted fashion."

The trust factor, built into the second part of the federal government's Personal Information Protection and Electronic Documents Act that came into force on May 1, 2000, allows electronic communication of documents with the federal government.

The Act defined "electronic document" and also legalized cryptography without narrowly specifying the technology or methodology. The Canada Evidence Act, amended to allow electronic documents into evidence (but only those involving communications with federal governmental agencies) was one of a number of amended acts.

At the provincial level, Saskatchewan, Manitoba, Ontario and the Yukon passed similar enabling e-commerce legislation. British Columbia introduced Bill 32 last year, Alberta is considering the issue and Newfoundland and Prince Edward Island have no legislation.

For now, interpretations remain elusive. "Although the law is currently uncertain regarding electronic contract enforceability in Canada, the closer an electronic document functions to a paper equivalent the more likely it will be successfully upheld in a court of law," says Jason Kitts, a lawyer with Macleod Dixon LLP's technology enterprise group in Calgary.

An indication of how the courts will lean was evidenced in a ruling by the Ontario Superior Court of Justice in the case Rudder vs. Microsoft in 1999, when the software giant was sued for $75 million in a class-action suit. The court said the action couldn't be brought in Canada because the contract-an electronic document-originated in King County, Washington and was subject to Washington State law.

The court said that to give effect to the "plaintiffs' argument would lead to chaos in the marketplace, render ineffectual electronic commerce and undermine the integrity of any agreement entered into through this medium."

Digital signatures, which are pieces of encrypted computer code that act as unique online identifiers linked with specific documents, are designed to authenticate online transactions and contracts. Solutions, or keys, are used for decryption. In secret key cryptography, one of two major methods, the same key (or a copy) is used to encrypt and decrypt the data. In public key cryptography, there are two different but related keys; what is encrypted with one can only be decrypted by the other.

Ottawa is encouraging a public key infrastructure to spur e-commerce and move toward digital government. But it is up to businesses to choose and sanction certification authorities (CAs) to establish identity, as well as ways to prove the origin, receipt and integrity of information.

To gain wide acceptance, says Murphy, the incomplete infrastructure needs directories that contain a list of CAs. "Directory services are not robust and large enough in a trusted manner [to] support this yet."