Digital economy has created great wealth, but governments have been slow to update rules
Toronto Star, 2 Oct 2019. TONY WONG TECHNOLOGY REPORTER
Social media has become the battlefield for politicians in the upcoming October federal election.
The Liberals are leading in Facebook ad spending, followed by the Conservatives as the two parties try to woo voters in the digital age. According to estimates from Facebook’s ad library, the Facebook pages of the Liberal Party of Canada and Prime Minister Justin Trudeau spent $454,179 in the last 30 days.
The Conservative party page and leader Andrew Scheer’s page racked up $285,031in ad spending. The NDP spent $99,846.
Here’s the irony: The very platforms the main political parties hope to regulate are the ones they depend on in getting their message out.
The digital economy has created unprecedented wealth and promise, allowing consumers and voters access to a dazzling array of information, services and products.
The world’s most valuable technology companies — Facebook, Apple, Amazon, Netflix and Google (known collectively as FAANG) — have been the innovators. But progress has not come without cost.
Governments have been slow to implement regulatory changes to bring their laws into the digital age.
Issues such as policing fake news and content, avoiding taxes, remunerating artists and publishers, contributing to Canadian culture, creating an unlevel playing field for domestic players and legacy media, including broadcasters and the publishing industry, have been cause for concern. Some say Big Tech is too big and should be broken up.
Others say what’s needed now is urgency by governments to implement regulations. The European Union has been at the forefront, legislating sweeping changes aimed at online platforms in the areas of copyright and creating a more equitable market. Meanwhile, prosecutors for 50 U.S. states have launched an antitrust investigation into Google, and Facebook was fined a record $5 billion this year by the U.S. Federal Trade Commission over privacy violations.
The increased scrutiny has caused public attitudes to shift. A Ryerson Leadership Lab poll says a majority of Canadians want regulation of social media platforms. But critics say Canada has been slow to respond.
The Star asked the four main political parties — the Liberal, Conservative, New Democrat and Green parties — for their thoughts on the need for legislative reform in the digital age.
One thing is for sure: After the October election, what the next government implements will affect future generations of taxpayers and chart the course for Canada in the 21st century.
1. The European Union has imposed stringent privacy and copyright laws on social networks and digital platforms. Do you think Canadians need to have more control over their personal data? If so, how would you propose to regulate this?
Liberals: Canadians’ trust in the digital world is shaken; they’re understandably anxious about how digital technologies and data will affect their lives.
Our Digital Charter will ensure Canadians have the capacity and tools to know who is using their personal data and for what purposes, with clear penalties when rules are not respected, and that they are ultimately the ones to benefit from it. Social media platforms are already subject to Canada’s commercial privacy law, PIPEDA, which we took steps to strengthen in the fall to ensure Canadians are made aware if their data has been placed at risk. We know more needs to be done and that’s why we unveiled the charter, which was characterized by renowned privacy expert Michael Geist as “a sea change in Canadian privacy law.” Conservatives: Ensuring that the personal data of Canadians is protected is a priority of Canada’s Conservatives. Unfortunately, the Trudeau Liberal government has been particularly careless on this front. It’s past-time the federal government did something to protect Canadians’ information online.
A Conservative government would take a three-pronged approach to this issue: sensible regulation; standards and education to ensure that consumers can make informed decisions; and strong oversight at the highest levels of government.
We will ensure that plain language-use agreements are put in place so that companies collecting electronic data must receive informed consent from Canadians.
We will apply regulatory standards for the ethical and secure use of artificial intelligence and the internet of things and create the Canada cybersafe brand to ensure that consumers know when products have met rigorous security standards.
An expert committee with industry leaders will define binding cybersecurity standards for critical infrastructure sectors and penalties for non-compliance.
Additionally, Canada’s Conservatives will also establish a cabinet committee on cybersecurity and Data Privacy and conduct periodic cybersecurity penetration testing on all government departments and establish performance benchmarks for senior public servants
NDP: Recently, the Privacy Commissioner of Canada found Facebook had failed to take basic precautions or have adequate policies in place to protect users’ information. More surprisingly, Facebook has refused to implement the Commissioners’ recommendations, and the Commissioners warn that there is still a high risk that Canadians’ personal information can be used and shared without their knowledge or consent.
Facebook has been under the spotlight for over a year now for their privacy and business practices, from the Cambridge Analytica breach to the UN accusing the platform of having played a determining role in inciting a genocide in Myanmar. That they are refusing to actually improve their privacy policies at the direction of our regulators shows more cavalier disregard for not just Canadian laws, but for their own users’ privacy rights.
This Liberal government’s cosy relationship with the American tech giants and their lobbyists means that they always put Canadians’ privacy rights second. We need a government that will be willing to implement the all-party recommendations of the Ethics Committee and stand up to the web giants and their disregard for Canadian law.
It’s wrong that the Liberals and Conservatives always prefer to let private companies self-regulate instead of requiring them to do the right thing by putting the safety and privacy of Canadians before profit. New Democrats will prioritize the safety and privacy of Canadians.
Green party: The Green party believes that all Canadians have an inherent right to privacy, including online. Successive Canadian governments have failed to adequately modernize privacy protection digitally.
We support the EU General Data Protection Regulation (GDPR) and Greens plan to modernize the existing Personal Information Protection and Electronic Documents Act to the GPDR Standards. We do not believe that political parties should be exempt from these laws and will apply the same standards to parties’ collection and use of Canadians’ data. We will regulate all tech companies, including tech Giants like Facebook and Google. We will make the penalties severe enough to get all companies’ attention, and convince them to follow the law.
Maximum fines per violation would be set at a percentage of a company’s global turnover.
We will: Ensure companies that are not located in Canada, but are operating here, pay the same taxes as Canadian companies and have social media companies ensure that racist and other discriminatory pages are not allowed to be posted, consistent with Canadian laws.
Also, all companies that have experienced a breech of their data must notify the Canadian government and the individual Canadians who have been affected. In addition, companies that sell programs or games must allow the buyer to own a copy of the program or game, in the event the company goes out of business.
We will apply Canadian laws to all digital companies, including those companies based in other countries. We will force them to change their practices, to allow individuals to confirm what data they are willing to allow a company to collect. Canadian citizens must be able to access and download all the information any company has on them and if they want their information deleted, they can ask the company to delete all their personal data and the company must comply. It is essentially the right to be forgotten. 2. Quebec and Saskatchewan have required online foreign companies to collect provincial sales taxes since the start of the year. This has not happened at the federal level. So far, Facebook has said it will start to collect the tax. Google and Netflix have said they will collect the tax when required by law to do so. An Auditor General report said in 2017 Ottawa could have collected $169 million in GST alone.
Would you require digital companies who have no substantial physical presence in Canada to collect the GST and PST on sales of subscriptions to Canadians?
Liberals: We are committed to ensuring that Canada’s tax system is fair and supports an innovative economy. The issue of how to appropriately ensure web giants pay their fair share is not a uniquely Canadian problem — it is a global issue.
That’s why Canada is working with our international partners and the OECD to come up with a consensus-based approach. One that ensures every company pays their fair share, while also continuing to foster innovation and attract investment in the digital sector. With this in mind, we will continue to work with the OECD to develop an approach that is concerted, prudent and fair for the middle class.
(Note: This answer was given before the Liberals announced as part of their election platform that they would introduce a three per cent tax on the income of large digital companies operating in Canada. The party would ensure “multinational tech giants pay corporate tax on the revenue they generate in Canada,” according to a statement released by the party.)
Conservatives: While we do not believe Canadians should pay more to watch Netflix, we know that services on the internet represent a growing part of the Canadian and global economy and foreign-owned technology companies aren’t subject to the same regulations as Canadian companies.
Conservatives believe in a level playing field and that public policy should keep up with a rapidly changing marketplace.
We will have more to say on this as the campaign unfolds. NDP: The NDP is proposing a level playing field for all, where large foreign multinationals must pay their fair share. New Democrats will stand up to web giants and make sure they play by the same rules as Canadian companies. By taking this bold action, the government would recoup billions of dollars that could be used to make life more affordable for all Canadians, protect our content and culture, save local media, and create good quality jobs for the future.
Greens: We will tax online companies federally, not just on subscriptions. 3. In the European Union, some countries have required on-demand video services contribute investment into local content. Legacy Canadian broadcasters are required to put five per cent of their gross revenue into the Canadian Media Fund to produce Canadian content. (The CMF is a not-for-profit corporation that supports the Canadian television and digital media industries to produce original content.) Should foreign online platforms such as Netflix, Amazon and YouTube be required to put a percentage of their revenue into content?
Liberals: For 10 years, all the Conservatives did for culture was to cut. They ignored the struggles the industry was going through. The result is that our laws and tools predate the internet. We have committed to modernizing them to protect our culture on the web and that’s what we’re doing. We created an independent experts panel to help us bring the Broadcasting and Telecommunications Acts into the 21st century. Our end goal is clear: all players that participate in the system must contribute to the system. There will be no free rides.
Conservatives: While we do not believe Canadians should pay more to watch Netflix, we know that services on the internet represent a growing part of the Canadian and global economy and foreign-owned technology companies aren’t subject to the same regulations as Canadian companies.
Conservatives believe in a level playing field and that public policy should keep up with a rapidly changing marketplace.
We will have more to say on this as the campaign unfolds.
NDP: The Minister of Canadian Heritage has failed to assume his responsibility in establishing a framework regarding the rise of on-demand video services. Rather than fixing this injustice, Justin Trudeau and his team went even further by signing a secret deal with Netflix without any consultation and without any guarantee of creating French content. The NDP think that Netflix and others should play by the same rules as other broadcasters and companies that operate in Canada. Greens: In consideration. 4. Cable service providers have had shrinking revenue in the digital age as competition from online platforms means fewer subscribers. Those providers place a percentage of their revenue into producing Canadian content, and the pot is shrinking. Would you support a move to have internet service providers, who have benefitted from the increased use of streaming services, also make similar financial contributions? Liberals: (Same as answer 2) Conservatives: We need to take action to review how innovative market solutions can help address these problems.
NDP: The main focus of the NDP would be to ensure that foreign multinationals are treated equally with Canadian companies and to make sure that internet services are affordable.
We are paying some (of ) the highest prices for broadband subscriptions in the world. This is wrong. The NDP has a clear vision for Canadian arts and culture including: protecting our heritage, supporting key Canadian institutions and providing an opportunity for our Canadian talent to thrive on digital and traditional platforms. We need more Canadian content. For this reason, we will find innovative ways to increase the funding of the Canada Media Fund. Greens: In consideration. 5. Under Section 19 of the Income Tax Act, domestic marketers who place advertisements in Canadian publications qualify for a tax deduction. But if they placed that ad in a foreign print publication, they wouldn’t qualify. But the new digital reality means that if you advertise in the print edition of the New York Times, you wouldn’t get a tax deduction, but if you did so in the online edition, you would. This has created an unlevel playing field for legacy publishers, diverting millions to major platforms like Google and Facebook. Would your party close that loophole?
Liberals: Canada is working with international partners and the OECD to examine the impacts of digitalization on some key aspects of the existing tax framework and to work toward a consensus-based approach.
Conservatives: A healthy democracy relies on an independent press, free of political influence. It should never be up to any government to determine which media outlets receive government support and which media outlets do not. Justin Trudeau has failed to create good policies. Conservatives will have more to say about our plan for a free, fair and sustainable press as the campaign continues.
NDP: Yes. There are many things that the federal government could and should do now to help solve this media crisis and closing the loophole at Section 19 of the Income Tax Act is clearly one of them.
Section 19 was introduced in 1965 to encourage advertising spending in Canadian media — but instead it is now being used to support American multinationals like Facebook and Google that don’t need it. Section 19 needs to be updated or reinterpreted to take into account online advertising. That idea was one of many recommendations made to the federal government in two different reports on the future of media, released in December 2016 and in June 2017. Many months of consultation went into those reports, and thousands of people were consulted, but the Minister of Canadian Heritage, Pablo Rodriguez, and the Minister of Finance, Bill Morneau, have chosen to ignore the vast majority of those recommendations. This can’t continue. The Liberals must act now to protect our medias, our democracy and our communities.
Greens: Yes. 6. Would you continue to provide ongoing and stable funding to the Canadian Broadcasting Corporation, maintaining or increasing current levels?
Liberals: After 10 years of cuts and partisan games under the Conservatives, we are proud to have reinvested $675 million to better support our public broadcaster, in our first budget. We also put in place the first ever independent appointments process for CBC, and appointed accomplished individuals like Michael Goldbloom, Suzanne Guèvremont, and Sandra Singh, rather than Conservative cronies. We firmly believe in the importance of CBC/Radio-Canada and of local news in all communities across the country. Andrew Scheer and the Conservatives have openly said that they don’t like journalists and could axe the CBC News division because they don’t like the media calling them out for their inconsistencies.
Conservatives: When we look and see how much coverage is devoted on CBC to U.S. politics, the inner workings of U.S. politics, making sure that it’s focused on the things that are going on here in Canada — Canada’s Conservatives think that’s something that many Canadians have said we should ensure that it’s focused on the core mandate of being concentrated on Canada.
NDP: The CBC is an essential public service in a country like ours, where minority-language communities require regional news coverage in their own language. The NDP has a proud history of promoting our public broadcaster. In the last Parliament our MPs fought hard against the Conservatives’ $115 million cut to CBC/RadioCanada. We will release our vision for CBC in the near future.
Greens: We would continue, and expand funding for Canadian culture and the CBC.
7. If the CBC were to discontinue advertising, would your party support an advertising-free environment, supported by taxpayers?
Liberals: The CBC is an autonomous Crown corporation responsible for managing its own operations.
Conservatives: We have to make sure the CBC’s impact in that is not creating an undue hurdle against those privatesector entities that are trying to stay afloat and now have to compete with a governmentsubsidized entity that is also going out into the market to sell ads to get viewership NDP: An advertisement-free CBC is a fantastic idea in principle, but it does require further study. The main impediment is the revenue shortfall that would transpire. Current estimate reveals that this idea would cost $533 million annually. Greens: Yes, we would. 8. Do you support federal aid for newspapers. If so, what measures would you propose?
Liberals: Canadian newspapers are taking a big hit by the media crisis. They have lost half of their jobs since 2010. We are going to the root of the problem and are creating concrete measures to support Canadian newspapers, big or small. Recently, our government announced the plan to introduce three new tax measures to support Canadian journalism estimated to provide approximately $595 million in support over five years. We must protect journalistic independence and that’s why an independent experts panel will assist in implementing our investments. Journalism is at the core of our democracy, but Conservatives aren’t one to miss an opportunity to attack its independence. The only type of media they’re interested in are ones they control, like the Rebel, 24Seven, and Ontario News Now. They are into conspiracy theories and it’s insulting to the intelligence of Canadians and the professionalism of journalists.
Conservatives: A healthy democracy relies on an independent press, free of political influence. It should never be up to any government to determine which media outlets receive government support and which media outlets do not.
NDP: In the wake of fake news, a strong, healthy and independent media industry is essential to our democracy. Our local newspapers have been put in a difficult financial position because of Liberal and Conservative governments refusal to equal the playing field and take away the tax holiday given to Facebook, Google and other internet giants. Our Quebec MPs, like Pierre Nantel, are the only ones who have been demanding action from the government for months. We believe any support package for the news media needs to be efficient, transparent and fair. The NDP will always fight to save our local medias while Liberals and Conservatives are playing partisan political games. You can expect further details in the near future. Greens: In consideration.