With the introduction of the government’s plan to regulate Internet streaming services, Canadian Heritage Minister Steven Guilbeault has touted new rules that will require companies such as Netflix and Spotify to make mandatory payments in support of Canadian content. The government’s bill also paves the way for the companies to both tinker with what they show to subscribers, so as to increase the “discoverability” of Canadian content, and open their books to Canada’s telecom and broadcast regulator by granting access to confidential corporate information.
The Broadcasting Act blunder series continues today with my recent Hill Times op-ed which notes that although Mr. Guilbeault argues that the changes are long overdue and merely establish a level playing with conventional broadcasters, much of the policy that underlies the new bill rests on shaky ground ((prior posts in the Broadcasting Act Blunder series include Day 1: Why there is no Canadian Content Crisis, Day 2: What the Government Doesn’t Say About Creating a “Level Playing Field”, Day 3: Minister Guilbeault Says Bill C-10 Contains Economic Thresholds That Limit Internet Regulation. It Doesn’t, Day 4: Why Many News Sites are Captured by Bill C-10), Day 5: Narrow Exclusion of User Generated Content Services, Day 6: The Beginning of the End of Canadian Broadcast Ownership and Control Requirements).
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Canadian Heritage Minister Steven Guilbeault was recently asked about his plans to mandate licensing of links to news articles on social-media sites such as Facebook. While the policy is often referred to as a link tax, Mr. Guilbeault insisted that it was not a tax, stating “some people think every time the government acts, it’s a tax. What I’m working on has nothing to do with tax.” Instead of a government tax scheme, Mr. Guilbeault explained that he intends to have the Copyright Board of Canada set a fee for the links to articles, backed by government power to levy fines for non-payment.
Leaving aside the semantic debate over what constitutes a government tax, my Globe and Mail op-ed argues that the comments are notable because when it comes to addressing the concerns associated with the large technology companies, Canada should be working on taxation. Mr. Guilbeault has said his top legislative priority is to “get money from web giants,” yet rather than focusing on conventional tax policy, his preference is to entrench cross-subsidy programs that keep the money out of general tax revenues and instead allow for direct support to pet projects and favoured sectors.
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It was just five years ago that the Liberal party, then mired in third place nationally, made innovation a centerpiece of its electoral strategy. The 2015 Liberal platform referenced “innovation” 10 times with promises to establish a national innovation agenda that would touch on everything from agriculture to the everyday work of government. Within weeks of the election, the role of industry minister was recast as the innovation, science and economic development minister, armed with a mandate letter peppered with instructions to pursue an innovation agenda.
Fast forward to 2020 and innovation has largely disappeared from the government’s radar screen with the word banished from the 2019 election platform. My Globe and Mail op-ed notes that the response to COVID-19 has understandably emerged as job one, but the disappearance of innovation as a government policy priority raises serious concerns about how Canada will foster the economic growth needed to help recover from the devastating effects of the global pandemic.
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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.
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Canadian media organizations face difficult challenges in an age of virtually unlimited Internet competition, a dramatic shift toward digital advertising, and an unprecedented global economic and health crisis. That has led media groups to urge the federal government to “take on” Google and Facebook by requiring them to fund local media. Prime Minister Justin Trudeau has thus far declined to do so. That may spark criticism in some quarters but claims that government-mandated payments from Internet companies will solve the sector’s ills are unconvincing.
My Financial Post op-ed notes that everyone agrees the media sector is more competitive than ever. News organizations such as the New York Times and Washington Post, digital media companies like The Athletic and The Logic, podcasters competing with mainstream media audio offerings and the CBC’s continued digital expansion all offer compelling and competitive news alternatives. This breadth of choice for Canadian news consumers isn’t the fault of Google or Facebook. It is a reflection of low barriers to market entry and a proliferation of services that often do a better job than many established media companies of serving specialized content.
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