Fair Dealing by Giulia Forsythe (CC BY-NC-SA 2.0) https://flic.kr/p/dRkXwP
The past year has been an incredibly active one for Canadian digital law and policy with legislative battles over Bill C-10, controversial consultations on online harms and copyright, important Supreme Court decisions, new digital taxes, and an emerging trade battle with the United States. For this final Law Bytes podcast of 2021, I go solo without a guest to talk about the most significant trends and developments in Canadian digital policy from the past year and to think a bit about what may lie ahead next year.
Should Have Seen This Coming: U.S. Raises Prospect of Retaliation Over Canada’s Digital Services Tax Plans
For the past two years, Canadian digital tax policy has been on a collision course with Canadian trade policy. The Liberal government committed in the 2019 election campaign to a digital services tax primarily designed to target large U.S. technology companies that generate significant revenues in Canada from online advertising and user data. The policy has been adopted in several other countries, repeatedly sparking a response from the U.S. that threatens to retaliate with tariffs on sensitive sectors of the economy. For example, after France announced plans for a similar tax, the U.S. threatened to levy billions in tariffs on French products.
As the trade threats escalate, the effort to strike an international agreement on the issue has gained increasing traction (my Law Bytes podcast last February with Professor Itai Grinberg provides a great backgrounder into the issue). After a preliminary deal was struck in October on an international approach, the U.S. dropped the tariff threat against several countries. Yet as efforts to finalize and implement the deal continue, Canadian Finance Minister Chrystia Freeland announced this week that new legislation will be introduced to create a Canadian digital services tax (this is distinct from digital sales taxes, which are currently in effect).
Canada Threatens to Delay Copyright Term Extension in Response to U.S. Electronic Vehicle Tax Credit Plan
Trade tensions between Canada and the U.S. have been rising in recent weeks with the U.S. Build Back Better Act proposing to create a tax credit for electronic vehicles that Canadian officials argue violates the Canada-U.S.-Mexico Agreement. The U.S. plan is said to be the equivalent of a 34 percent tariff on Canadian assembled electric vehicles. While trade disputes are not particularly noteworthy, the Canadian government response certainly is. Last week, Finance Minister Chrystia Freeland and International Trade Minister Mary Ng wrote to eight U.S. Senators with the following warning:
Beyond possible retaliatory actions, if the U.S. proceeds with the tax credit provisions as drafted, we would see this as a significant change in the balance of concessions agreed to in the USMCA. As such, we would consider the possible suspension of USMCA concessions of importance to the U.S. in return. Those concessions could include suspending USMCA dairy tariff-rate quotas and delaying the implementation of USMCA copyright changes.
The right to repair, whether consumer electronics, farm machinery or even health and medical equipment, is an issue that affects everyone. Given the implications for consumer and property rights, the sustainability of the agricultural sector, and protecting the environment, ensuring a right to repair would seem like an obvious political winner. Yet the issue has lagged, not the least of which because of restrictive copyright laws that can limit the ability to repair personal property.
Aaron Perzanowski is a law professor at Case Western Reserve University School of Law in Cleveland, Ohio and the Associate Director of the Spangenberg Center for Law, Technology & the Arts. Professor Perzanowski is the author of the forthcoming book, The Right to Repair, to be published by Cambridge University Press early next year. He joins the Law Bytes podcast to explain why the right to repair matters, how copyright fits into this, and what reforms are needed to address the issue.
The Canadian Government’s Groundhog Day Copyright Consultations: The Never-Ending Lobbying Battle for Website Blocking and Weakened User Rights Continues
Copyright did not figure prominently in either the government’s election platform or the Speech from the Throne, but the two departments responsible for copyright policy – Innovation, Science and Industry led by Francois-Philippe Champagne and Canadian Heritage led by Pablo Rodriguez – have both been actively consulting on a myriad of issues this year. The departments just released the submissions they received to one of three consultations on copyright, this one on intermediary liability issues. There was a prior consultation on copyright term extension (expected in some form in 2022 given the obligations under the USMCA) and another on innovation policies such as an exception for text and data mining to support the development of artificial intelligence. I submitted responses to all three consultations (term extension here, AI will be posted shortly).
My submission in the intermediary liability consultation focuses on two main points.