The Canadian chapter of the International Institute of Communications held their annual conference in Ottawa this week, headlined on Thursday by back-to-back appearances from Canadian Heritage Minister Melanie Joly (in a question and answer session with Jennifer Ditchburn) and Innovation, Science and Economic Development Minister Navdeep Bains.
Both ministers spoke primarily about their key policy initiative, namely digital cancon (Joly) and innovation (Bains). Joly’s cancon discussion again emphasized the benefits of exports and foreign investment, but she also indicated that all policies are still on the table, including an ISP tax and efforts to bring Internet companies such as Netflix “into the system.” Joly was followed by Bains, who used his speech to sketch out the foundation of his forthcoming innovation strategy. His focus included universal, affordable Internet access and telecom competition (which raises real doubts about whether the government will approve Bell’s proposed purchase of MTS).
Both ministers noted that their public consultations are ongoing, yet the reality is that sooner or later the government will have to make some policy choices. An export-led cancon strategy that focuses on foreign participation would mesh nicely with an innovation strategy that envisions similar benefits from embracing the digital environment. However, many of Joly’s comments and the pressures from some stakeholder groups point to the prospect of new Internet fees or regulations to support the domestic industry. Should that happen, it is increasingly likely that Bains and Joly will present dramatically different visions of Canada’s digital future with policy proposals that are fundamentally incompatible with one another.
The most obvious example involves the issue of universal, affordable Internet access which pits Bains’ vision of an innovative economy that has affordable Internet access as its foundation against Joly’s potential support for an ISP tax. The two policies tug in opposite directions as Bains is looking for ways to lower Internet costs and increase access, while an ISP tax would increase costs and reduce access.
There is a similar conflict with respect to a Netflix tax or new Internet regulations designed to bring Internet companies into the system. While Joly may envision new regulations on Internet companies, Bains told the conference that “the digital economy is the economy” and extolled the benefits of Canadian IT companies becoming global players by venturing into every sector in the company. Those goals may conflict with new Canadian-specific regulations that will make it harder to attract technology companies and to keep domestic success stories at home.
In fact, the potential sources of policy conflict extend beyond new cancon tax or levy schemes:
- If Joly hopes to use spectrum proceeds to fund cancon, she will likely find Bains opposing the proposals as he will want to allocate the money toward building Canadian networks.
- If Joly wants to use copyright reform to increase liability for Internet companies or to scale back fair dealing, she will find Bains arguing that changes to the liability rules or user rights will place Canadian companies at a competitive disadvantage.
- If Joly promotes changes to Internet advertising rules that eliminates tax deductions for digital advertising with foreign companies (ie. Google), Bains will express concern that the changes are likely to reduce e-commerce adoption in Canada and limit growth of the digital economy.
Digital cancon and innovation strategies premised on competition and the benefits of the networked environment would offer obvious synergies. The concern, however, is that proposals that focus on ways to take money out of the Internet economy to support the cultural sector will lead to an inevitable policy collision between the two ministers.