Deputy Prime Minister and Finance Minister Chrystia Freeland released the government’s 2023 budget yesterday with a raft of new spending initiatives and subsidies for “clean tech” to match developments in the United States. Budgets have become policy mapping documents where the government identifies its priorities for the coming year, often accompanied by plans to incorporate them into the Budget Implementation Act, where they are virtually guaranteed to pass with limited Parliamentary overview and debate. I’ll identify some of the most notable developments below, but want to focus on a commitment to establish a standard charging port in Canada which I think is emblematic of a government that has increasingly lost the plot on digital policy.
What was in the budget from a digital policy perspective? First, there are two significant reforms planned for the Budget Implementation bill. Patent reform arising from CUSMA was buried at the end of the budget since apparently sneaking in IP reform is going to be an annual tradition. In this case, Canada will implement patent term adjustment rules that could extend the duration of some patents. The budget also promises notable privacy reform involving political parties with changes to the Elections Act. There are no details on precisely what is coming, but that could represent a long-overdue change to ensure that political parties are subject to binding privacy obligations.
Second, unlike last year, there were no copyright surprises. The reference in Budget 2022 that some suggested would lead to a re-examining of fair dealing is gone, replaced by a commitment to introduce a copyright right to repair. It is unclear whether a private member’s bill that addresses that precise issue and has been the subject of considerable study at the Industry committee will be used or if the government plans to start from scratch.
Third, there are some leftovers from 2022 including renewed commitments to protections for gig workers and a promise that a digital services tax will start in 2024 if an international agreement at the OECD fails to take effect. On that front, the language used is slightly softened as the document as a whole lightens up last year’s bashing of tech companies.
While those are some of the most notable measures, it is the dongle that really captured my attention. I know that Europe has established a standard port for 2024, but I’m not sure why requiring uniform adoption of USB-C is a national priority worthy of inclusion in a budget. As a lifelong Apple user, I have more than my fair share of useless connectors, but this is hardly a major source of e-waste and the relative cost to consumers is minor compared to Canada’s uncompetitive wireless and Internet costs. Moreover, Canada is far too small to influence anything on port standards. This really just means we will follow the European standard, which will anyway become the defacto market standard until something better comes along and regulators are pressured to change it.
The dongle made the budget, but incredibly innovation, intellectual property, artificial intelligence, cyber-security, quantum computing, and university research scarcely did. There may be ongoing funding for some of these initiatives, but the government seems to be sending a signal that its priority interests lie elsewhere. Trying to become a world-leader in these sectors is a long-term ambition that requires significant regulatory (and potentially financial) support alongside the patience to allow the technologies, market, and nascent companies to develop. Instead, Canada seems to jump to the next shiny object each year, changing the priority areas even faster than Apple seems to switch ports.
Indeed, the dongle promise is so irrelevant that it is baffling that the government would think it worthy of inclusion as a measure to “make life more affordable.” So why is it there? It may be that the government just doesn’t have many things to put in the policy window, so somehow a common charger rose to the top. More troublingly, it may be that government felt that it needed to include some connection to the digital economy and saw risk everywhere. It can’t focus on wireless issues because it is almost surely about to approve the Rogers-Shaw merger. It can’t focus on Bill C-11 implementation because that bill will increase consumer costs and decrease choice. It can’t focus on privacy reform because it has languished for months as a non-priority. And it can’t focus on online harms legislation because its consultation on the issue resulted in a 90% rejection rate from Canadians. So that left the dongle and a Canadian digital policy that is discouragingly becoming as useful as my old discarded computer connectors.