In recent months, Canadian Heritage Minister Steven Guilbeault has emerged as the de facto digital policy lead minister in Canada with Navdeep Bains largely silent on the race to regulate everything from online linking to how Canadian content is promoted on digital streaming services. New legislation is still forthcoming, but recent comments to industry town halls and press reports provide a good sense of what Guilbeault has in mind. In short, it appears the government will establish an extensive regulatory structure for digital services with registration or licensing requirements and mandated payments for a host of online activities. The amounts payable will be established through hearings at the CRTC and the Copyright Board of Canada. The government would retain the power to fine companies that fail to comply with the payment requirements and use a policy direction to the CRTC to make its policy intentions clear.
The likelihood of the CRTC leading the charge to regulate online streaming services has been readily apparent for some time, particularly since the Commission made clear its support for a new regulatory model in 2018. Guilbeault has confirmed that his top priority is “get money from giants” and his approach will be to mandate that Internet streaming companies pay into a fund to support the creation of Canadian content. In addition, those companies will face registration or licensing requirements to allow the CRTC to require increased disclosure of their Canadian activities that will drive new “discoverability” requirements. Those would allow the CRTC to establish requirements for how Canadian content is promoted on foreign streaming services.
I have previously posted on why this approach could lead to either a trade challenge and the possibility of tariffs against key Canadian sectors such as dairy and steel or a reform to the system that would open things up to foreign providers and in the process undermine the competitiveness of Canadian broadcasters who are more reliant on tax credits and funding programs. Further, while Guilbeault has suggested that this is the fastest way to address the issue, the reality is that the resulting regulatory process will take years to unfold with a call for public comment, a lengthy hearing, the initial decision, applications to review and vary the decision, judicial reviews, cabinet appeals, and potential judicial appeals. If any of the appeals are successful, the CRTC would be required to re-examine its decision and the process starts anew. In other words, the entire sector will face uncertainty for years until a final resolution is reached.
Yet the CRTC approach is a rocket docket compared to the Copyright Board, where tariff hearings, judicial reviews, appeals and subsequent board decisions can last over a decade or more. With considerable speculation over the creation of a mandated licence to link to news articles (a policy that could lead to companies such as Facebook blocking all news article sharing in Canada), Guilbeault told iPolitics that the licence fees would be established as tariffs by the Copyright Board of Canada. Guilbeault added that the government would retain the power to levy fines for failure to comply with tariffs.
The prospect of using copyright and the Copyright Board to address linking to news articles (a practice Guilbeault has described as “immoral”) raises a host of concerns, including the fact that these reforms were not recommended as part of the government’s copyright review. To establish a new right would have a significant impact on the Canadian copyright balance and raise the need to address other concerns such as the absence of fair use or the overly restrictive digital lock rules in Canada. Further, copyright is a shared responsibility with Minister Bains and has typically required consensus from both departments. Invoking the Copyright Board, which despite increased government funding remains a source of persistent criticism, would create a costly administrative structure for addressing a non-issue that would take years to resolve.