Canadian Finance Minister Bill Morneau released his government’s 2017 budget today and while the spending promises may be underwhelming for some, the documents sets out an ambitious agenda for digital policy review. In fact, with changes to copyright, patent, broadcast, telecom, net neutrality, digital taxes, fintech, Canadian media, and Cancon all under consideration, the coming year will have enormous implications for the future of Canada’s digital policies.
The budget does include several spending promises, including $13.2 million over five years to support an affordable Internet access program, $50 million for kids coding programs, $29.5 million over five years for digital literacy, and $14.9 million for digitization of Indigenous language and materials. There is also new money for the growth of artificial intelligence sector and the much-anticipated revamping of innovation funding programs.
Yet the biggest digital implications may ultimately come from the policy reforms. First up may be new digital sales taxes. The budget includes a commitment to extend sales taxes to ride sharing companies such as Uber, a move that seems likely to ultimately lead to a broader extension of sales taxes to digital services such as Netflix.
A review of the Copyright Act was already planned for November 2017 as required by the law. However, the government is throwing open an even bigger review of intellectual property laws as it seeks to develop a new IP strategy:
In recognition of the importance of a well-functioning intellectual property regime, Budget 2017 announces the Government will develop a new intellectual property strategy over the coming year. The strategy will help ensure that Canada’s intellectual property regime is modern and robust and supports Canadian innovations in the 21st century.
Canada already meets international standards on IP and has some one of the world’s toughest anti-piracy measures. As I noted earlier today, what has been missing are rules to better support innovation and the need for Innovation, Science and Economic Development Minister Navdeep Bains to assume the policy lead on the issue. The review and strategy exercise offers the chance to adopt fair use rules that have been critical for innovative economies such as the United States, Israel, South Korea, and Singapore. When coupled with the restrictive digital lock rules that suffer from narrowly interpreted exceptions, the Canadian copyright law environment is supportive of cracking down on infringement but lacks the flexibility needed for new creativity and innovation.
The review of Cancon in a digital world conducted by Canadian Heritage Minister Melanie Joly also makes its way into the budget with a promise for policy reforms that could dramatically alter the Internet in Canada. The budget places all the big issues up for grabs:
To ensure that Canadians continue to benefit from an open and innovative Internet, the Government proposes to review and modernize the Broadcasting Act and Telecommunications Act. In this review, the Government will look to examine issues such as telecommunications and content creation in the digital age, net neutrality and cultural diversity, and how to strengthen the future of Canadian media and Canadian content creation. Further details on the review will be announced in the coming months.
This guarantees that the major policy fights of the past year will continue into the next, with some viewing this as an opportunity for an ISP or Netflix tax, reform to net neutrality rules that prioritize Canadian content, new Internet regulations as the Internet is folded into broadcast regulation (as opposed to bringing broadcast into the Internet to better reflect what is actually happening), a reshaping of how telecom and broadcast are regulated in the Internet age, and new schemes to support mainstream media. I’ve written a lot about these issues in recent weeks:
- how foreign funding has actually surpassed funding from Canadian broadcasters and distributors for English language TV production
- why tax schemes for online advertising to support Canadian media won’t work
- why copyright reform is not the answer for Canadian media
- how Canadian copyright law is now one of the world’s toughest on piracy
- why fair dealing in Canada and the shift to digital has been a success story
- how Canada’s patent system has been upheld in a major NAFTA challenge involving Eli Lilly
- why an ISP tax is the absolute last thing a government committed to universal, affordable Internet access should consider
Budget 2017 leaves no doubt that digital policy will be a major issue in the coming year (a consultation on fintech retail payments followed by regulation is also promised). When twinned with the digital policy implications of the NAFTA renegotiation, Canada’s digital policy future will hang in the balance.