Jella Ohnesorge is pursuing a Master’s degree in Political Science at Freie Universität Berlin and works as a student assistant in the DSA Research Network at the Humboldt Institute for Internet and Society.
Digitalization policy is characterized by its dynamic development and cross-cutting qualities, as well as the fact that many countries are overwhelmed by it. During the COVID-19 pandemic it became very clear how important digital governance is and how beneficial effective digitalization policy can be for citizens and public administration alike. Digitalization can mean a significant reduction in costs and effort – if done right. This is particularly true for federal systems, where citizens often face uncertainty regarding which and how responsibilities are assigned across government levels (Roy, 2021). For example, Canada’s federal structure complicated the rollout of COVID-19 contact tracing apps. Several provinces, such as Alberta, launched their own apps and initially refused to adopt the federally developed COVID Alert app, leading to a fragmented approach across the country. This highlights how impactful the structure of a federation can be for digitalization policy. The approaches to digitalization in Canada and Germany are as unique as their federal designs, and a comparative exploration of practice in both countries can help us advance understanding of how federal governance dynamics shape integration of technology in government.
How Different Federal Systems Shape Digital Policy in Germany and Canada
Canada and Germany’s federal systems are often seen as being at opposite ends of a spectrum. While Canadian federalism is characterized by an emphasis on self-rule mechanisms, i.e. a high autonomy of individual federal units, Germany emphasizes cooperative decision-making and shared rule. As a result, Germany is approaching digitalization as a cooperative project, with varying degrees of success. The German federal government generally has strategic oversight of digitalization policy, while states and municipalities are responsible for implementing federal laws. However, the particular challenge of cross-cutting digitalization policy in German federalism is that some policy areas that were originally strictly under the jurisdiction of the states (the Bundesländer) are now affected by digitalization, most notably education. Historically, this area is purely a competence of the Länder. A few years ago, however, a federal government investment package for the digitalization of schools (DigitalPakt Schule), which required an amendment to the constitution, sparked a heated debate about federalism and the distribution of competencies in Germany. So, although a centralized approach makes sense for digitalization policy because it affects so many areas and is easier to implement in response to rapid and dynamic developments in digital technology, it often faces challenges due to the institutionalized distribution of competencies in federal systems (Scholta et al., 2019).
Germany’s central legal instrument for digitizing the administration is the Online Access Act (Onlinezugangsgesetz), which was adopted in 2017 and obliges the federal, state and local governments to offer their administrative services digitally in a standardized, user-friendly and safe manner. The original goal stated in the act was to digitize 575 e-government services (e.g. applying for parental allowance or child benefits) by 2022. By that time, however, Germany lagged so far behind that an updated version was adopted in the beginning of 2024 (Krempl, 2025). The update no longer contains a deadline, but instead a legal entitlement of citizens to digital services. Therefore, citizens can theoretically take legal action against the state if certain services are not offered digitally (Menhard, 2024). Implementation seems to have picked up a little more speed since the 2024 update to the Online Access Act. An interesting development is that the new government in Germany has created a Federal Ministry for Digitization and State Modernization. In addition to overseeing the implementation of the Online Access Act, the new ministry been entrusted with many other aspects of digitalization that were previously under the purview of other ministries and institutions, such as the management of the federal government’s IT infrastructure and the promotion of digital economy and digital sovereignty. However, it is far too early to tell how effective this attempt to pool digitalization competences will be, as the new ministry doesn’t even have a budget yet.
In Canada, on the other hand, there are about as many approaches to digitalization as there are provinces and territories. This does not mean that there are no initiatives for a more unified approach. Canada is a member of the Open Government Partnership, an international organization striving to implement the principles of “transparency, public participation, and collaboration”, centering citizens’ needs and their right to government information (Longo, 2020). The Canadian federal government thus strives to standardize and unify digital public service delivery (Government of Canada, 2025), which is currently organized in a very decentralized manner (Champagne et al., 2023). For example, social security numbers and passports are issued at the federal level, while birth registration, driver’s licenses and health cards are managed at the provincial level (Roy, 2021). The fact that each province and territory has created its own approach to digital service delivery, including its own tools and platforms, makes standardization very challenging.
A clear example of Canada’s decentralized approach to digitalization is the development of digital identities. While the federal government has recognized the need for a unified, secure digital identity system and is working on national platforms like GC Sign In and GC Issue and Verify to allow Canadians seamless access to federal services, the reality is far more fragmented. Many provinces have developed their own digital identity solutions, such as British Columbia’s BC Services Card or Alberta’s digital ID which can be used to access provincial services. This patchwork approach leads to several challenges. For one, it creates the risk of Canadians needing to manage multiple digital identities for different levels of government, potentially complicating access and undermining the user experience. It also makes interoperability and standardization more difficult, as provinces and territories have established their own technical standards and platforms, creating new path dependencies that are hard to unwind. Recognizing these issues, the federal government has initiated efforts to coordinate a national digital identity framework, aiming for a single, trusted digital ID that could be used across all jurisdictions and public services. The Office of the Auditor General has highlighted the importance of federal leadership and cross-jurisdictional collaboration to achieve this goal, emphasizing the need for a solution that allows Canadians to use one digital identity for both federal and provincial services (Office of the Auditor General of Canada, 2024). Organizations like the Digital ID & Authentication Council of Canada (DIACC) are also pushing for a Pan-Canadian Trust Framework to ensure consistency, security, and public trust in digital identity systems. In summary, while Canada’s provinces have made significant progress in developing their own digital identity tools, this decentralized innovation has come at the cost of fragmentation and inefficiency.
Innovation vs. Inertia?
The most common argument for a decentralized approach to digitalization is that of innovation through competition (Scholta et al., 2019). Innovation through decentralization and common standards are often assumed to be mutually exclusive, but this doesn’t have to be the case. In implementing the Online Access Act, Germany is attempting to combine competition and standardization. In the so-called digitalization laboratories (Digitalisierungslabore), diverse teams, including IT experts and citizens, develop user-friendly prototypes for online services. These teams also provide an implementation plan for federal states, local authorities, and nationwide use. Additionally, the one-for-all principle (Einer für Alle-Prinzip) is supposed to enable a sustainable, division of labor structure for intergovernmental cooperation. The basic idea is that federal states and local authorities should not have to independently develop every new digital service, but rather, they should be able to benefit from the digitalization projects of other constituent units through an efficient division of labor. Therefore, each state should digitize its services in a way that allows other states to adopt them. The federal government provides a virtual “marketplace” as a platform for exchange of already developed software.
A Canadian project with a similar goal in mind are the Joint Councils, an intergovernmental institution with high-ranking officials from federal, provincial and municipal governments consisting of the Public Sector Chief Information Officer Council (PSCIOC) and the Public Sector Service Delivery Council (PSSDC). Its goals are essentially the same as those of Germany’s Online Access Act: improving the efficiency of public services, creating uniform standards for digital services, and providing a platform for exchange to avoid the unnecessary duplication of digital services that have already been developed by the federal government or another province. Recent efforts of the Joint Councils include accelerating the development of a Pan-Canadian Trust Framework and providing leadership on digital trust and credentials. Progress is slow, however, as provinces continue to emphasize their autonomy and unique approaches.
Conclusion
Germany and Canada represent two contrasting models of federalism that significantly shape their approaches to digitalization policy. In Germany, cooperative federalism prevails: the federal government sets strategic direction and legal frameworks, such as the Online Access Act, while states and municipalities are responsible for implementation. This model aims to standardize digital public services and promote cooperation through initiatives like the one-for-all principle, which encourages states to share digital solutions across jurisdictions. However, the institutionalized distribution of competencies and the necessity of finding compromises can slow down progress. In contrast, Canada’s federal system emphasizes the autonomy of provinces and territories. Each province develops its own digital strategies and tools, resulting in a highly decentralized landscape. While the federal government has launched efforts to unify digital service delivery and promote best practices through bodies like the Joint Councils, there is little political momentum for a truly cooperative national strategy. This decentralization can foster innovation through competition, but it also risks fragmentation and inefficiencies, as provinces may duplicate efforts or pursue incompatible solutions.
Ultimately, both systems face trade-offs. Germany’s cooperative approach can enable standardization but may be hindered by bureaucratic inertia, while Canada’s decentralized model encourages innovation but struggles with coordination and consistency. The effectiveness of digitalization in federal systems depends on finding the right balance between autonomy and collaboration, ensuring that both innovation and interoperability are achieved for the benefit of citizens and public administration alike.
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