#CyberFLASH: Why Navdeep Bains and Melanie Joly Are on a Collision Course on Digital Policy

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The Canadian chapter of the International Institute of Communications held their annual conference in Ottawa this week, headlined on Thursday by back-to-back appearances from Canadian Heritage Minister Melanie Joly (in a question and answer session with Jennifer Ditchburn) and Innovation, Science and Economic Development Minister Navdeep Bains.

Both ministers spoke primarily about their key policy initiative, namely digital cancon (Joly) and innovation (Bains). Joly’s cancon discussion again emphasized the benefits of exports and foreign investment, but she also indicated that all policies are still on the table, including an ISP tax and efforts to bring Internet companies such as Netflix “into the system.” Joly was followed by Bains, who used his speech to sketch out the foundation of his forthcoming innovation strategy. His focus included universal, affordable Internet access and telecom competition (which raises real doubts about whether the government will approve Bell’s proposed purchase of MTS).

Both ministers noted that their public consultations are ongoing, yet the reality is that sooner or later the government will have to make some policy choices. An export-led cancon strategy that focuses on foreign participation would mesh nicely with an innovation strategy that envisions similar benefits from embracing the digital environment. However, many of Joly’s comments and the pressures from some stakeholder groups point to the prospect of new Internet fees or regulations to support the domestic industry. Should that happen, it is increasingly likely that Bains and Joly will present dramatically different visions of Canada’s digital future with policy proposals that are fundamentally incompatible with one another.

The most obvious example involves the issue of universal, affordable Internet access which pits Bains’ vision of an innovative economy that has affordable Internet access as its foundation against Joly’s potential support for an ISP tax. The two policies tug in opposite directions as Bains is looking for ways to lower Internet costs and increase access, while an ISP tax would increase costs and reduce access.

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#CyberFLASH: Beyond a Netflix Tax, Why Melanie Joly’s Comments Point to Regulation of Internet Services

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The prospect of new digital taxes and regulation to fund the creation of Canadian content continues to attract attention with cultural groups leading the charge. For example, the Canadian Independent Music Association recently called for the regulation of digital services and ISPs including mandated contributions to support the development of Canadian content, while ADISQ has previously lobbied for a similar policy approach.

With mounting coverage of the issue, Canadian Heritage Minister Melanie Joly appeared last weekend on CTV’s Question Period, spending most of the nine minutes dodging questions from host Evan Solomon. Joly started by clearly stating that “there will be no new Netflix tax”, but spent the rest of the interview making the case for one. The discussion featured speaking points that seemed to contradict the no Netflix tax approach, emphasizing that everything is on the policy table and that the government is looking at all scenarios. Solomon noted the inconsistency of the comments and Joly struggled to respond.

Most troubling was the exchange on new regulations, taxes or fees for Internet companies and services. Solomon specifically asked whether the only digital tax that Joly was willing rule out was a Netflix tax. Joly’s response:

I’ve said that we’re willing to have a conversation with digital platforms. Netflix is one of them. There are Amazons, Hulus, Apple. There are big companies that are part of our ecosystem, that are used and liked by Canadians. This is why we want to make sure that we know that they are using a large part of our spectrum that we can have a conversation with them to see how they can participate.

While it is somewhat difficult to fully decipher Joly’s comments, the references point in the direction of a tax or regulation on Internet services and service providers.

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