The Quebec Superior Court has ruled that the provincial rules creating a mandated ISP blocking system for unlicensed online gambling sites is unconstitutional. The provincial government introduced the rules in 2015, which create a list of unlicensed sites that ISPs must block or face financial penalties. While the government tried to frame the blocking system as a health and safety measure, it was always obvious from its own documentation that the plan was primarily focused on increasing revenues of Loto-Quebec, a provincially licensed online gambling site.
Post Tagged with: "quebec"
Government officials and cultural groups in Quebec have been banging the drum for much of the past year for the imposition of digital sales taxes on services such as Netflix. The debate is often framed around the notion that Netflix and other Internet companies should be collecting sales tax like any other service provider. Supporters argue that other countries have begun to levy sales taxes on digital services and Canada should do the same.
My Globe and Mail op-ed notes the federal government has sent mixed signals to date, with Prime Minister Justin Trudeau rejecting new taxes on the grounds that Canadians “pay enough for the Internet”, Canadian Heritage Minister Mélanie Joly seemingly keeping the door open to new taxes, and Finance Minister Bill Morneau committing to studying the issue while international standards develop.
With little fanfare, Quebec passed website blocking legislation last week. Bill 74 took effect on May 18th, setting up a likely court showdown between the Quebec and federal governments. As discussed in several articles and posts over the past year (here and here), Quebec’s Internet blocking legislation requires Internet service providers to block access to a list of online gambling sites to be identified by the government-backed Loto-Québec. The government now characterizes the legislation as a matter of consumer protection, but it did not initially hesitate to emphasize that its primary goal was to increase revenues for Espace-Jeux, its officially sanctioned online gambling service.
Last year, the Quebec government introduced legislation that would require Internet service providers to block access to unlicensed online gambling sites. It provides that “an Internet service provider may not give access to an online gambling site whose operation is not authorized under Québec law.” The Quebec bill, which is currently before the provincial legislature, is a terrible idea that has been opposed by ISPs and consumer groups. The government views this initiative as a revenue enhancing measure because it wants to direct gamblers to its own Espacejeux, the Loto-Québec run online gaming site. The mandated blocking legislation is unprecedented in Canada and if enacted, it will surely be subject to legal challenge, including the possibility of a constitutional challenge.
The legal challenge may not be limited to constitutional issues, however. The Quebec bill may also be blocked by the TPP, which may be a good outcome, but raises the question of whether a trade agreement is the right way to dictate provincial laws.
How might the TPP apply to provincial online gambling regulation?
If there is a first rule of the Internet in Canada, it is “thou shall not block.” Canadian Internet service providers face a wide range of policies that have implications for accessing content including net neutrality rules and the copyright notice-and-notice system. Yet in virtually all cases, blocking or removing content is simply not done (the lone exception is a limited, private sector led initiative to block child pornography images).
My weekly technology law column (Toronto Star version, homepage version) notes that unlike other countries which have dabbled in mandated takedowns or Internet filtering, Canada has largely defended an “open Internet”. Canadian law does not mandate that Internet providers take down content due to unproven allegations of copyright infringement or allow them to alter or change content. In fact, the Telecommunications Act stipulates that “a Canadian carrier shall not control the content or influence the meaning or purpose of telecommunications carried by it for the public.”