Last week, I wrote about the need for the Canadian government to reboot its digital agenda, arguing that less than 12 months after the 2019 national election, the policy agenda had gone off the rails with a reversal on affordable telecom services, delays in broadband support and privacy reform, as well as plans for extensive online regulation. The Speech from the Throne, which sets out the government’s agenda, suggests that rather than rebooting the digital agenda, the government has largely deleted it altogether.
The speech was the longest throne speech since the Liberal election in 2015, yet there was apparently no time to reference privacy reform, intellectual property, wireless, or innovation (innovative appears once). Instead, beyond catching up on unfulfilled promises on rural broadband and promising action on online hate, the government’s digital agenda is – as Canadian Heritage Minister Steven Guilbeault said last week – now distilled primarily down to “get money from web giants.” That isn’t a digital agenda, it’s anti-digital agenda, with technology companies cast as both a foreign enemy to be regulated and an ATM for free cash to fund pet projects in the cultural sector.
What makes the government’s position so disappointing is that there are critical policies that could be addressed with respect to the Internet companies. The government could prioritize competition laws and take the companies to task where there is misuse of power. It could enact long-overdue privacy reforms with real enforcement powers to ensure that the companies do not abuse Canadians’ personal information. The government could bring in transparency and algorithmic disclosure requirements so that misuse of information and online harms could be curtailed. It could seek to hold the companies liable for failing to enforce their own policies and establish further restrictions on misleading advertising. It could ensure greater competition for access to telecom services that provide the gateway to the Internet and lead by example on ethical uses of data.
In fact, many of these policies can be found in the mandate letter for Minister of Innovation, Science and Industry Navdeep Bains released last December. The fact that these issues were included in the mandate letter but are not found in the Speech from the Throne signals that the government now has other priorities, namely “get money from web giants.” The speech notes:
Web giants are taking Canadians’ money while imposing their own priorities. Things must change, and will change. The Government will act to ensure their revenue is shared more fairly with our creators and media, and will also require them to contribute to the creation, production, and distribution of our stories, on screen, in lyrics, in music, and in writing.
The Government will also identify additional ways to tax extreme wealth inequality, including by concluding work to limit the stock option deduction for wealthy individuals at large, established corporations, and addressing corporate tax avoidance by digital giants.
These issues were also in the mandate letters for both Bains and Guilbeault. Bains has remained silent on these digital issues in recent weeks, but Guilbeault has left little doubt that the government intends to mandate Canadian content payments and discoverability by empowering the CRTC to regulate online services, mandate licensing to link to news articles by social media companies, and institute new digital taxes.
These policies will come at a significant cost. For example, contrary to the suggestion that new digital taxes will address tax avoidance, the most likely outcome is simply applying digital sales taxes to foreign services. Those taxes are paid by Canadian consumers, not the companies who merely collect and remit on behalf of the government. Mandating licensing for linking to news articles is likely to lead to Facebook blocking news sharing on the site, hurting Canadian publishers and increasing the prominence of questionable sources. The mandated Cancon requirements raise a host of costs, not the least of which is the likelihood of tariff retaliation against sensitive Canadian business sectors such as dairy and steel.
While it could be worse (copyright is not mentioned despite Guilbeault telling a publisher town hall earlier this week that he hoped to introduce copyright reform within months), the government’s anti-digital agenda is fraught with risk and unsupported by industry data. It is likely to increase costs for Canadian consumers, undermine the competitiveness of the Canadian broadcast sector, hurt net neutrality, threaten trade sanctions, and perversely leave U.S. companies as the guardians of Canadian content.