My understanding is that that was, at least in part, what the B.C. government legislated; that is, the data has to remain in Canada and all the processing has to be done in Canada.
I think Statistics Canada learned a lesson the hard way with the Lockheed Martin outsourcing. To my recollection, the result is that they allowed the foreign company to engage in consulting with respect to the software but not to actually handle the census information.
I agree with you. I think those are ways to deal with the problem.