One of the first Canadian digital-era laws was the Uniform Electronic
Commerce Act, a model law created by the Uniform Law Conference of
Canada in the late 1990s. The ULCC brings together officials from
federal, provincial, and territorial governments to work on model laws
that can be implemented in a similar manner across all Canadian
jurisdictions.
While a federal e-commerce law may have been preferable, the
constitutional division of powers meant that it fell to the provinces
to enact those laws.
The provinces took the lead on e-commerce legislation in the late
1990s, but over the past decade it has been the federal government that
has led on most other digital rules, including privacy legislation, the
anti-spam statute, and proposed digital copyright reform. Those efforts
are now in constitutional limbo following the Supreme
Court of Canada’s
recent ruling that plans to create a single securities regulator
are
unconstitutional.
The December securities regulator decision concluded that the national
approach to securities regulation stretches the federal trade and
commerce clause too far into provincial jurisdiction. The court ruled
that most of the securities regulatory activities deal with day-to-day
contractual regulation within the provinces and that "these matters
remain essentially provincial concerns falling within property and
civil rights in the provinces and are not related to trade as a whole."
My weekly technology law column (Toronto
Star version, homepage
version) notes the repercussions of that decision may be felt far
beyond just
securities regulation. For example, federal privacy law may now be
particularly vulnerable to challenge since it relies on the same trade
and commerce provision.
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Appeared
in the Toronto Star on January 8, 2012 as Are Canada’s Digital Laws
Unconstitutional?
One of the first Canadian digital-era laws was the Uniform Electronic
Commerce Act, a model law created by the Uniform Law Conference of
Canada in the late 1990s. The ULCC brings together officials from
federal, provincial, and territorial governments to work on model laws
that can be implemented in a similar manner across all Canadian
jurisdictions.
While a federal e-commerce law may have been preferable, the
constitutional division of powers meant that it fell to the provinces
to enact those laws.
The provinces took the lead on e-commerce legislation in the late
1990s, but over the past decade it has been the federal government that
has led on most other digital rules, including privacy legislation, the
anti-spam statute, and proposed digital copyright reform. Those efforts
are now in constitutional limbo following the Supreme Court of Canada’s
recent ruling that plans to create a single securities regulator are
unconstitutional.
The December securities regulator decision concluded that the national
approach to securities regulation stretches the federal trade and
commerce clause too far into provincial jurisdiction. The court ruled
that most of the securities regulatory activities deal with day-to-day
contractual regulation within the provinces and that "these matters
remain essentially provincial concerns falling within property and
civil rights in the provinces and are not related to trade as a whole."
The repercussions of that decision may be felt far beyond just
securities regulation. For example, federal privacy law may now be
particularly vulnerable to challenge since it relies on the same trade
and commerce provision.
There have been questions about the constitutionality of PIPEDA,
Canada’s private sector privacy law, since its inception. Quebec
launched a constitutional challenge in 2003, pointing to its
longstanding provincial privacy statute and the constitutional
limitations on a federal privacy statute. The Quebec challenge has
remained dormant for many years, but State Farm Insurance revived the
issue in a privacy case in 2010.
The Supreme Court decision seems likely to stoke the fires for a
constitutional challenge, particularly given the Privacy Commissioner's
call for stronger enforcement powers. Indeed, the prospect of a
challenge may hamper the Commissioner’s enforcement efforts as
companies reluctant to comply with Commissioner findings may opt to
challenge the validity of the legislation instead.
PIPEDA is not the only digital law placed at risk by the Supreme Court
decision. Anti-spam legislation, which is still awaiting final
regulations before taking effect, may face similar questions since it
too relies heavily on the trade and commerce clause.
The decision also places the spotlight on the constitutional questions
that have dogged Bill C-11, the copyright reform bill. Those questions
do not arise from the trade and commerce clause, but rather involve
similar questions about whether the digital lock rules move too far
away from conventional copyright law (a federal power) by encroaching
into provincial jurisdiction over property and civil rights.
The government's own analysis of the bill obtained under the Access to
Information Act confirms that the digital lock rules envision potential
violations of copyright even when there is no copyright infringement.
By removing the link to actual copyright infringement (breach of the
digital lock rules may occur without a copyright infringement and
without regard for traditional copyright defences), the law ventures
into the provincial domain over property and civil rights.
The Supreme Court decision throws a monkey wrench into more than just
plans to create a single securities regulator. It may also hamper
the development of a single national digital legal strategy. This
suggests a need to rethink the digital lock rules, and engage the
provinces on digital legal issues sooner rather than later.
Michael Geist holds the Canada
Research Chair in Internet and E-commerce Law at the University of
Ottawa, Faculty of Law. He can reached at mgeist@uottawa.ca or online
at www.michaelgeist.ca.
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