The state of big tech regulation in Canada, from privacy to tax policy

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For years, Canadian government policy toward big tech companies was essentially a hands-off affair: getting in the way not only threatened to hurt the economy, but voters might rebel as well. But as foreign tech platforms such as Google and Facebook have grown, governments here and around the world have begun to seek out ways to rein in their outsized influence and power. Here, the Post’s Barbara Shecter breaks down the state of big tech regulation in Canada, from privacy to tax policy and everything in between.

What are the key issues?

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The state of big tech regulation in Canada, from privacy to tax policy Back to video

The key areas where Canada is moving to regulate foreign tech platforms fall into four main buckets: harmful content such as hate speech; consumer and data privacy; taxation; and broadcasting/telecom and content. It involves a number of government officials, departments, and agencies including the Department of Canadian Heritage, the Ministry of Innovation, Science and Industry, and the Department of Finance. The Canadian Radio-television and Telecommunications Commission and the Canada Revenue Agency are also involved.

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What about hate speech?

The high-profile ejection of former United States President Donald Trump from Twitter and other social media platforms sparked a major debate on how to police hate speech and prevent disinformation on social media while at the same time preserving freedom of speech and the right to political expression. The Canadian government has said it will soon introduce legislation that would make good on Prime Minister Justin Trudeau’s pledge to force the tech platforms to promptly remove illegal content including hate speech. “Our goal is to table … legislation this winter on online harms,” a spokesperson for Heritage Minister Steven Guilbeault’s office said Friday. The law, if passed, would require social media firms to monitor and eliminate illegal content including hate speech, terrorist propaganda, violent acts and child pornography. The department said the law also aims to respect freedom of speech.

What about digital taxation?

A few years ago, any mention of a “Netflix tax” sent consumers and voters into a tizzy and elected officials running for cover. Not anymore. The favourable tax status of foreign tech platforms is now squarely in the government’s sights. In the fall economic statement in November, finance minster Chrystia Freeland said the federal government intends to implement a “tax on corporations providing digital services” in Canada beginning Jan. 1, 2022. Canada has been working the OECD and more than 100 other countries on a co-ordinated approach to global tax reform that could include a taxing right for countries where multinational corporations are providing digital services to consumers — but there have been delays and Canada said it intends move ahead on its own with the new measures expected to increase federal revenues by $3.4 billion over five years.?Canada also plans to begin requiring “non-resident vendors” supplying digital products and services to Canadian consumers — such as Netflix — to collect and remit sales tax (GST and HST).

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What about data and privacy?

In November, Navdeep Bains, then Minister of Innovation, Science and Industry, introduced Bill C-11, the?Digital Charter Implementation Act, which will overhaul the law governing the privacy of Canadians. The bill promises hefty financial penalties — more meaningful to giant tech platforms such as Google, Facebook, and Amazon — for breaches, and gives more power to consumers when it comes to the transfer of personal information from one organization to another and the disposal of personal data. If passed, the law will restrict the collection of personal information and require companies to document the purposes for which personal information is collected, used, or disclosed (with continuous updates if new purposes arise).

What about broadcasting?

Guilbeault introduced Bill C-10, the first major legislative amendments to the?Broadcasting Act?since 1991. The bill would put “online undertakings” that transmit programs over the Internet within the purview of the Canadian Radio-television and Telecommunications Commission. “Including online activity within Canada’s broadcast regulatory framework signals a major policy shift,” according to lawyer at DLA Piper. However, the law firm noted, it remains to be determined what conditions and requirements the CRTC will impose on online providers once the bill becomes law.

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What about news?

Guilbeault’s office has taken the lead when it comes to finding a way to get big tech firms to pay for news content they feature on their platforms. Guilbeault has said he is looking into models adopted by France and Australia. “We are currently exploring options for a made-in-Canada formula that would ultimately lead to a comprehensive, coherent and equitable digital framework for both Canadian news publishers and digital platforms,” a department spokesperson said Friday.?France is extracting payment through copyright laws, while the Australian Senate is scrutinizing proposed legislation — already passed by the lower house — that would mandate a compulsory bargaining code between the country’s media publishers and big tech platforms such as Google and Facebook. The proposed code contains non-exclusion and arbitration mechanisms and would be overseen by Australia’s competition authority.

Where does the opposition stand?

NDP heritage critic Alexandre Boulerice said he is disappointed a couple of items didn’t make it into Bill C-10, notably provisions governing social media platforms Facebook and Youtube. In addition, Boulerice said he had been under the impression the Liberal government was going to include a mechanism in the Broadcasting Act overhaul to compensate news content creators whose work is featured on large tech platforms Google and Facebook. That didn’t happen. “Newspapers are struggling. They have to get some compensation for the real journalistic work they are doing.”

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NDP MP Charlie Angus, a member of the standing committee on access to information, privacy and ethics, said the Liberal government is making progress with the promise of larger, more meaningful penalties for to rein in tech platforms that failed to participate or comply with Canadian efforts in the past. But he said Ottawa should be doing more to hold the international tech giants responsible for how their algorithms feed information to users. “You would see the algorithms cleaned up real fast if they were held liable,” Angus said.

The Conservative party has been critical of the pace of the Trudeau government’s action when it comes to the protection of consumer data and cyber security. But there has been support for some of the tax issues, such as requiring foreign digital players to collect and remit GST. In their election platform in 2019, the Conservatives proposed a three per cent tax on Facebook, Google, and Amazon that would be waived only if the tech companies invested and built on their operations within Canada.