The sky is the limit for how new technologies might be deployed, Baird said.
"What we want to do is identify where we should be first movers, promote freedom in the spaces we're most concerned about, " the minister told a forum on cyber-issues hosted by Google in Ottawa.
"We've got to realize it's not going to change things overnight; the Cold War wasn't won in a few weeks or a few months. But I think the more we promote freedom and give people the capacity to get alternative information, create a democratic space, that's what digital diplomacy is all about."
Digital diplomacy has become a buzzword of late in policy circles, used most often to reference the way governments are using social media tools for outreach.
But the issue goes farther than setting up blogs for ambassadors.
Cybersecurity and Internet freedom have become key issues for debate on the global stage as technology companies like Google and Facebook morph from mere economic actors to political ones, driving legislation and national policies on Internet privacy and access.
Canada dipped its toe into the digital diplomacy waters a few years ago, encouraging embassies to use social media to reach out to the local population. More recently, formal steps were taken to use technology to advance a particular foreign policy cause — that of freedom of speech in Iran.
While Canada cut off formal diplomatic ties with Iran last year, the government said it wanted to keep a connection with Iranians and decided using the web was the way to go.
Earlier this month, the government co-hosted a series of debates on Iran at the University of Toronto that were widely distributed online as a way to provide Iranian activists a morale boost ahead of that country's June elections.
Baird said Thursday more than 360,000 people have seen the content generated by the Toronto event.
"If the biggest threat to the regime is information that will facilitate a challenge function, then I think this is going to play an increasingly bigger role in diplomacy," he said of the use of new technologies.
A similar end-run approach was in play Wednesday with the news of new sanctions against Iran: Canada applied a near-blanket ban to exports and imports to the country, but made an exemption for technology.
Iranian activists had complained that the rounds of sanctions levied on the country in response to its nuclear program were having the unintended consequence of cutting off access to the tools they need to speak out against their leaders.
But meanwhile, the sanctions have appeared to have little effect on Iran's approach to its nuclear program, which it argues is for power generation despite global concerns it is for weapons development.
"Sanctions were very effective in Burma; they were very effective, I believe, in South Africa with apartheid. They've proven to be ineffective at this stage with the Supreme Leader and those close to him," said Baird.
"So this is another tool in our arsenal."
The U.S. announced similar exemptions from its sanctions on Thursday.
Baird's remarks come as issues of cybersecurity and Internet freedom have been occupying larger places in global economic and political talks.
The issue of data sharing, for example, has become a sticking point in negotiations for the Trans-Pacific Partnership, a multinational trading bloc of which Canada is hoping to be a part.
Meanwhile, some countries are increasingly seeking greater control over the Internet in order to suppress uprisings and dissent like those seen in the Arab Spring revolutions, which were largely fuelled by modern technology.
Canada and other countries recently refused to sign a UN communications treaty over concerns that the language would make it easier for countries to restrict access to the Internet.
The economic and political sides of the digital world shouldn't be treated separately, David Drummond, Google's chief legal officer, argued Thursday during a separate panel discussion.
Access to the Internet has been framed as a human rights question, and rightfully so, he said.
"But if you're thinking about practical ways to push for Internet freedom and to make sure the Internet stays open ... saying to countries, 'Look, if you want to be part of this world trade system, you need to sign up to this, you need to make sure you keep the Internet open,' I think is a good way to do it."