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The new legislation would expand the CRTC’s powers so that its jurisdiction over traditional broadcasters would be extended to also include the foreign-owned digital-content providers.

Regis Duvignau/Reuters

The federal government is planning to introduce new legislation in the next few months that would give Canada’s broadcasting regulator power over foreign tech giants, such as Google and Netflix.

The government is drafting legislation to modernize the Broadcasting Act and the Telecommunications Act, which are enforced by the Canadian Radio-television and Telecommunications Commission. The CRTC’s powers include control over broadcast licences, the power to levy fines and the ability to compel companies to provide commercially sensitive information.

However, the acts were written in a time before internet use was widespread and the entry of foreign-owned tech giants have left Canada’s cultural industries feeling threatened. Unlike traditional broadcasters, those digital entrants don’t require licences to operate, which means they don’t have to abide by requirements, such as the amount of Canadian content they serve to viewers.

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The office of Heritage Minister Steven Guilbeault said the new legislation would expand the CRTC’s powers so that its jurisdiction over traditional broadcasters would be extended to also include the foreign-owned digital-content providers. Details of the new capabilities are still being worked out, but would be similar to what the regulator can do to Canadian companies.

The minister’s office said the goal is to table the legislation by June.

The new powers would align with what the CRTC itself requested in a submission to cabinet in 2018. That was followed by the Broadcasting and Telecommunications Legislative Review, which was released last month. The review’s expert panel, led by telecom lawyer Janet Yale, recommended imposing conditions on tech giants related to the amount of money they spend in Canada and how easy it would be to discover Canadian content on their platforms.

Reynolds Mastin, who heads the industry group that represents independent content creators, said that federal regulators need to play an active role.

“It’s about the future of the entire industry,” said Mr. Mastin, president of the Canadian Media Producers Association. "It’s not about any one particular streamer or studio. That’s why we encourage the government to have as many tools available as possible so that we have flexibility in a new-and-improved Broadcasting Act that can adapt to this fast-changing, dynamic market.”

In its submission to the expert panel, Google Canada suggested that the new regulations should take into account the business models of the different platforms. For instance, while Netflix actively commissions shows, YouTube provides a platform for any user to upload content – which would make it tricky to track, let alone guarantee, a certain amount of Canadian content.

“We’re deeply committed to the Canadian creator ecosystem and look forward to working collaboratively with the government and industry,” Google spokeswoman Maria Cortellucci said in a statement to The Globe.

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The danger to the federal government would be that the regulations could be so stringent that the companies could pull one or more products out of Canada, rather than live with the new law. For example, when the federal Liberals changed the elections law before the 2019 vote, companies adapted in contrasting ways. Facebook introduced new transparency tools in Canada to fulfill its obligations, while Google decided it would ban political ads on its sites in the country so it wouldn’t have to deal with the new rules.

While the Heritage Ministry works with tech giants on cultural policy, the Finance Department is moving ahead in other areas. The federal government is expected to announce in its coming budget that it will require foreign-owned digital companies to collect and remit federal sales tax on their services. Quebec and Saskatchewan recently required the same for provincial sales taxes.

Finance Minister Bill Morneau has said that the government will wait on imposing any extra corporate taxes on the tech companies until after Organization of Economic Co-operation and Development countries come to an agreement on how to tax international companies that operate outside the country in which they are based.

The minority Liberal government will require the support of one of the opposition parties to pass the CRTC legislation.

Both the Bloc Québécois and the NDP have called for higher taxes on the tech companies. “If Mr. Guilbeault really wants to help our industries, he and the Liberals can work with us to make sure that web giants pay their fair share,” NDP MP Alexandre Boulerice said.

The Conservatives did not respond to a request for comment.

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