In June 2017, the Standing Committee on Canadian Heritage committee recommended implementing tax on Internet services in a report on media. Within minutes, Prime Minister Justin Trudeau was asked about the proposal at a press conference in Montreal. Trudeau’s answer – which literally came as committee chair Hedy Fry was holding a press conference on the report – was unequivocal: No. The government was not going to raise costs of Internet services with an ISP tax. The committee recommendation was minutes old and the government wasted absolutely no time in killing the proposal.
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Canadian Heritage Minister Steven Guilbeault on Regulating Foreign News Sites: “What’s the Big Deal?”
In the closing months of the last Liberal majority government mandate, I spoke to a government official about the lessons learned from the prior four years. Their response? If we knew then what we know now, we would have moved much faster on policy. The four years moves very quickly and if you don’t manage to lay the groundwork and introduce proposed legislation within the first 12 – 24 months, it becomes very difficult to enact given competing policy priorities, demands on committee time, Senate review, and a myriad of other challenges.
As I think about what comes next for Canadian digital policy under the new Liberal minority government, those words strike me as more relevant than ever. Even if the government runs more like a majority than a minority (which certainly seems likely on digital policy as no one is forcing an election over privacy or wireless pricing), the same ministers return to their portfolios (which may or may not happen) and the same committee structures return largely unchanged (which will not happen since that INDU chair Dan Ruimy was not re-elected), picking up where the government left off in June will not be easy. Further, the Liberal platform provides the roadmap for future reforms, but moving rapidly on these issues – particularly given expectations that a minority government’s mandate may run shorter than a majority – suggests that quick wins will be preferred to extensive legislative reform.
So what are likely next steps on digital policy?
The prospect of new digital taxes and regulation to fund the creation of Canadian content continues to attract attention with cultural groups leading the charge. For example, the Canadian Independent Music Association recently called for the regulation of digital services and ISPs including mandated contributions to support the development of Canadian content, while ADISQ has previously lobbied for a similar policy approach.
With mounting coverage of the issue, Canadian Heritage Minister Melanie Joly appeared last weekend on CTV’s Question Period, spending most of the nine minutes dodging questions from host Evan Solomon. Joly started by clearly stating that “there will be no new Netflix tax”, but spent the rest of the interview making the case for one. The discussion featured speaking points that seemed to contradict the no Netflix tax approach, emphasizing that everything is on the policy table and that the government is looking at all scenarios. Solomon noted the inconsistency of the comments and Joly struggled to respond.
For the past two decades, it has been the Internet’s never-ending story. Established, successful businesses face Internet upstarts who leverage the advantages of a global network and new communications technology to offer better prices, more choice or innovative services.
In the 1990s, it was online retailers such as Amazon, who presented more selection at lower prices than most bookstores could offer. In the 2000s, Wikipedia brought the decades-old encyclopedia business to an end, online music services provided greater convenience than conventional record stores, and Internet telephony technologies used by companies like Skype changed the rules of international voice and video calls. Today, services such as Uber, AirBnB, and Netflix have upended the taxi, hotel, and broadcast worlds.
My weekly technology law column (Toronto Star version, homepage version) notes that in these David vs. Goliath type battles, the established businesses don’t quietly fade away. Using their remaining influence, they often look to laws and regulations that increase costs, prohibit activities, restrict consumers, or regulate pricing to create barriers for the new entrants.
Appeared in the Toronto Star on March 1, 2014 as Do We Still Need the CRTC? The regulation of Internet video services and the prospect of pick-and-pay television channels headline the second phase of the Canadian Radio-television and Telecommunications Commission’s future of television consultation which launched late last month. The […]