Columns

Office of the Privacy Commissioner Memorandum, October 28, 2014

Secret Memo Reveals RCMP Records on Requests for Subscriber Data “Inaccurate and Incomplete”

Last fall, Daniel Therrien, the government’s newly appointed Privacy Commissioner of Canada, released the annual report on the Privacy Act, the legislation that governs how government collects, uses, and discloses personal information. The lead story from the report was the result of an audit of the Royal Canadian Mounted Police practices regarding warrantless requests for telecom subscriber information.

The audit had been expected to shed new light into RCMP information requests. Auditors were forced to terminate the investigation, however, when they realized that Canada’s national police force simply did not compile the requested information. When asked why the information was not collected, RCMP officials responded that its information management system was never designed to capture access requests.

While that raised serious concerns – the RCMP has since promised to study mechanisms for reporting requests with recommendations expected in April – my weekly technology law column (Toronto Star version, homepage version) reports that documents recently obtained under the Access to Information Act reveal that the publicly released audit results significantly understated the severity of the problem. Indeed, after the draft final report was provided to the RCMP in advance for comment, several of the findings were toned down for the public release.

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March 2, 2015 6 comments Columns
Sun News Network Interviewing Justin Trudeau by Alex Guibord (CC BY-ND 2.0) https://flic.kr/p/o3pCLp

Why the Demise of the Sun News Network May Be a Preview of Things to Come

The abrupt end of the Sun News Network – its owners pulled the plug on the all-news channel without warning earlier this month – sparked considerable commentary with many lamenting the lost jobs, others examining the quality of the content, and some celebrating the end of a service that was controversial from the moment it launched. Largely left unsaid, however, is that its demise signals the beginning of a new era in Canadian broadcasting in which services are allowed to fail rather than being propped up through regulatory or government support.

My weekly technology law column (Toronto Star version, homepage version) notes the Canadian broadcasting system has long been shielded from market forces through a broad array of regulations that offer both financial compensation and marketplace protection. Those rules have been a boon to broadcasters, who have seen some services succeed with limited viewers and original content.

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February 24, 2015 43 comments Columns
Trio by Ian Muttoo (CC BY-NC-SA 2.0) https://flic.kr/p/ij51E8

Why Bell’s Targeted Ad Approach Falls Short on Privacy

In October 2013, Bell announced the launch of a targeted advertising program that uses its customers’ personal information to deliver more “relevant advertising.” The announcement sparked hundreds of complaints with the Privacy Commissioner of Canada and a filing by the Public Interest Advocacy Centre over the same issue with the Canadian Radio-television and Telecommunications Commission.

My weekly technology law column (Toronto Star version, homepage version) notes that nearly a year and a half later, the complaints and filings remain unresolved. The CRTC case has succeeded in placing considerably more information on the public record, however, offering a better perspective on what Bell is doing and why its privacy approach falls short.

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February 17, 2015 14 comments Columns
Canada Revenue Agency (CRA) national headquarters in Ottawa by Obert Madondo (CC BY-NC-SA 2.0) https://flic.kr/p/oWPkF8

Is the Digital Taxman Headed to Canada?

While some of these claims stem from the ongoing fear of marketplace disruption from Netflix, the tax fairness argument is a good one. In fact, many other countries or tax jurisdictions have either instituted sales taxes on foreign digital services or are in the process of doing so. For example, the City of Buenos Aires in Argentina last year passed a resolution forcing debit and credit card issuers to withhold three per cent from payments made to streaming service providers. The levy was specifically targeted at Netflix subscribers in the city and was reportedly designed to make local streaming services more competitive.

Interestingly, technically there is tax equivalency since Canadians are supposed to self-report the applicable sales tax in a self-assessment. In reality though, few are aware of the obligation and even fewer do so. Indeed, with an annual HST bill of $12.46 for a 12-month Netflix subscription, the missing dollars seem insignificant on an individual level.

Those individual bills can add up to millions of dollars, however, which may provide enough incentive for the federal government to conveniently forget the fall promise of “no Netflix tax” (which referred to a fee for creating Canadian content, not sales tax) and establish a system to require foreign digital operators to collect and remit sales tax on their Canadian sales.

Should the government embrace extending sales taxes to foreign services, the big question will lie in the implementation.  The issue of creating a global sales tax system that requires foreign provides to register and remit sales taxes is fraught with complexity.

Registration requirements alone create new costs that some businesses may be unwilling to bear. In fact, some may simply decide to avoid or block the Canadian market altogether, leading to even more services that either decline to sell to Canadians or which increase their prices to account for the regulatory cost burden.

In order to avoid burdening small businesses, countries may set a revenue threshold before registration and collection requirements kick in.  For example, Switzerland requires foreign digital service providers to register and collect an 8 per cent tax provided that they earn more than C$140,000 annually in income.

Even with a threshold to limit collection to larger businesses, the complexity associated with digital sales taxes is difficult to avoid.  Will the collection apply solely to consumer purchases or also business-to-business sales? Will all digital sales – including virtual property in games or cloud computing services – be subject to a levy?

Given the ever-changing digital environment, the digital taxman may be on the way, but identifying what is subject to sales tax will be easier said than done.

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January 27, 2015 7 comments Columns
The Grand Budapest Hotel by Doug (CC BY-NC-ND 2.0) https://flic.kr/p/qcZQxt

Stream On?: How Canadian Law Views Online Streaming Video

The misuse of Canada’s new copyright notice-and-notice system has attracted considerable media and political attention over the past week. With revelations that some rights holders are requiring Internet providers to send notifications that misstate the law in an effort to extract payments based on unproven infringement allegations, the government has acknowledged that the notices are misleading and promised to contact providers and rights holders to stop the practice.

While the launch of the copyright system has proven to be an embarrassment for Industry Minister James Moore, my weekly technology law column (Toronto Star version, homepage version) notes that many Canadians are still left wondering whether the law applies to Internet video streaming, which has emerged as the most popular way to access online video.

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January 20, 2015 12 comments Columns