Reboot... by Jonathan Lanctot (CC BY-NC-ND 2.0)

Reboot... by Jonathan Lanctot (CC BY-NC-ND 2.0)


Why It’s Time to Reboot Canada’s Failed Digital Agenda

The government’s decision to prorogue Parliament and launch a new legislative agenda later this month offers more than just an opportunity to recalibrate economic priorities in light of the COVID-19 global pandemic. My Globe and Mail op-ed notes that less than 12 months after the 2019 national election, Canada’s digital policy agenda has gone off the rails and is badly in need of a reboot.

The Liberals identified consumer telecom pricing, privacy protection and a modernized internet legal framework as priorities, but have struggled to develop an effective approach. Navdeep Bains, the Innovation, Science and Industry Minister, surprisingly backed a reversal on the affordability of communications services last month and has done little on privacy reform. Plans from Minister of Rural Economic Development Maryam Monsef to accelerate rural broadband development have stalled. And Canadian Heritage Minister Steven Guilbeault is gearing up for a regulatory fight with the global technology sector that could result in trade battles and content blocked from the Canadian market.

Concerns around consumer pricing for telecom services sparked election campaign promises to support increased competition. In light of that commitment, the recent cabinet decision casting doubt on the Canadian Radio-television and Telecommunications Commission pricing for wholesale broadband services came as an enormous disappointment. The technical details behind the wholesale broadband market are difficult to follow for most Canadians, but the upshot of a ruling quietly released on a summer Saturday morning was that independent internet providers have been forced to raise prices.

The government could have simply sent the CRTC decision back to the commission without substantive comment given that it is already under review. However, by concluding that the previously established rates “may undermine investment in high-quality networks, particularly in rural and remote areas,” the government adopted the claims of the major telecom companies as its own and increased the chances the commission will raise the prices paid by independent providers and, ultimately, by consumers. Further, the government’s approach seems particularly troubling given that the Federal Court of Appeal last week upheld the CRTC decision, ruling that many of the telecom company arguments were “of dubious merit.”

The sting of the cabinet decision is particularly acute given the government’s inexplicable failure to follow through on promises to inject hundreds of millions into rural broadband funding. As work-from-home and online schooling becomes the norm, affordable, fast internet access is a must for all Canadians. The government committed billions to supporting rural broadband, but despite promising to accelerate spending in light of the pandemic, only a fraction of that funding has been allocated to date.

The broadband failure is matched by endless delays in reforming Canadian privacy law. Mr. Bains has launched consultations, released blueprints for future reforms and indicated that updating the law is a priority. Yet as the months pass by, several Canadian provinces have decided they can no longer wait for the federal government to act. British Columbia has a special committee working on privacy changes, Quebec tabled privacy legislation that adopts many European-style reforms in June and, last month, the Ontario government launched a public consultation with proposed reforms to establish a provincial privacy law that could include new rights and tougher penalties.

The provincial developments point to the possibility of competing private-sector privacy rules across Canada that could result in conflicting rules, increased costs and business uncertainty. There is unquestionably a role for provincial privacy laws (constitutional barriers limit the federal government’s jurisdiction in the area), but a strong national law is essential, and Mr. Bains now finds himself lagging rather than leading on the issue.

He has similarly been largely absent from policy debates over internet regulation, which have been framed as a cultural issue under the purview of Mr. Guilbeault. Yet just as the government rejects the CRTC’s approach to internet pricing, it stands ready to vest new powers in the commission to establish regulations and mandated payments for internet companies such as Netflix, Facebook and Google. The regulatory framework could lead to the regulation of online news sites and services from around the world under the guise of mandated contributions to Canadian culture.

There is certainly a need to update Canada’s tax rules to ensure internet giants pay their fair share, yielding general tax revenues that could support the culture and news sectors. However, narrow cross-subsidy programs for news organizations or broadcasters to be overseen by the CRTC run the risk of undermining competition and sparking a trade backlash from the United States given Canada’s commitments under the U.S.-Canada-Mexico Agreement.

Moreover, Facebook’s recent indication that it will block all news services in Australia in response to government plans to mandate payments for including links to articles suggests that Canada could face the same fate should Mr. Guilbeault proceed with his legislative plans. The combination of Facebook blocking news sharing and other services (such as Netflix, Spotify and Skype) facing new mandatory payments and content restrictions could leave Canadians confronting a highly regulated internet with limited access to some popular tools.