No internet tax for Canadian media

I agree with Conservatives who reject an internet tax to support Canadian media but for different reasons.

    Heritage Minister Melanie Joly. Image: Huffington Post

Conservatives reject taxes do so because they reject government intervention in what they see as a commercial enterprise. If media corporations can’t stand on their own without support from taxpayers, then they should fall.

But media are not only an enterprise; they are reflection of who we are and necessary for an informed citizenry. The goal of all legitimate media is to report unfiltered news and if my taxes go towards achieving that end, then it’s money well spent.

Use of an internet tax to support Canadian media is controversial. Politicians who are normally on opposite sides of the issue agree on this one. Two lobby groups that I support are on opposite sides. The Friends of Canadian Broadcasting supports the internet tax. Open Media rejects it.

A parliamentary committee recently recommended the internet tax, which Prime Minster Trudeau promptly rejected. The recommendations weren’t even unanimously supported among committee members. Predictably, Conservatives rejected the tax and some Liberals supported it. Prime Minister Trudeau sided with the Conservatives (again, for different reasons).

Before decided which side you’re on, it’s useful to know what it is. It’s a tax on streaming content over the internet as opposed to a tax on cable or satellite content, or over-the-air broadcasting.

What it’s called is determined by which side you’re on. Opponents call it a Netflix tax. “Applying the 5-per-cent levy to broadband distribution, that’s a Netflix tax,” said Conservative committee member Peter Van Loan. “Efforts to turn back the clock to an earlier era are doomed to failure.”

Prof. Michael Geist agrees with Van Loan but doesn’t find it necessary to call it a Netflix tax. It’s an internet tax because it applies to all internet content and as such, it’s a bad idea. Geist, a law professor and Canada Research Chair in Internet and E-commerce Law, sees the internet as more than a source Canadian content:

“A taxation system such as the one used for cable and satellite companies is highly inappropriate given the Internet’s importance for communication, electronic commerce, Web banking, education and tele-health. Given its integral role in virtually every aspect of modern life, it is wrong to treat network access as little more than an ATM for the cultural sector.”

Geist points also points out that such a tax is inconsistent with the Broadcasting Act because internet providers are not “broadcast undertakings” under the act.

Trudeau took the line that he was protecting the middle class: “We’re not going to be raising taxes on the middle class through an Internet broadband tax. That is not an idea we are taking on.”

Canadian media deserves support. Open Media suggests that the proceeds from the sale of cell phone wireless spectrum could go to Canadian content. Tax revenue should be used to support public and private broadcasters as suggested by Friends of Canadian Broadcasting. Small market broadcasters like CFJC in Kamloops should continue to receive funding from the CRTC.

Canadians pay one of the highest internet rates in the world. The best way to support Canadian media is to ensure that Canadians have an affordable, high speed internet where innovators can create content.

Canada’s internet remains flat, despite challenges

Canada remains a world-leader in keeping our internet equal for all. Challenges to tilt the internet in favour of special interests come from at home and abroad. Last month, Canada’s telecomm regulator ruled that all online data be treated equally.

The ruling comes after Videotron, a music streaming company, offered their wireless service to subscribers at no charge for data used. This practice, called “zero-rating,” is violation of net neutrality because content would be biased in favour of their service. Subscribers to other music streaming services would pay more. The Canadian Radio-television and Telecommunications Commission ruled the practice illegal.

In his ruling, the CRTC chair Jean-Pierre Blais suggested a less disingenuous tactic for Videotron:

“Rather than offering its subscribers selected content at different data-usage prices, Internet-service providers should be offering more data at lower prices,”

The ruling is a victory for the little-lobby-group-that-could, OpenMedia.ca (which I support financially).

“We just won again!,” they crowed in an email to me, “The Canadian Radio-television and Telecommunications Commission (CRTC) just decided in favour of historic Net Neutrality rules that prevent Big Telecom from unfairly manipulating data caps to discriminate against certain apps and services.”

Michael Geist, professor of Internet and E-commerce Law, was equally enthused but more muted in his response:

Most notably, Canadian consumers and creators will benefit in the long term from the Net-neutrality policies.”

Canada’s firm support of net neutrality extends beyond a level playing field. Without it, giant telcomms could start to collect browsing habits of unsuspecting customers and sell them to advertisers for the purpose of targeting specific demographics.

The concept of a flat internet is vital to free expression and innovation. In an earlier column, I argued that net neutrality is fundamental to democracy:

Canadians must stand on guard for a free and democratic internet.”

Net neutrality in the U.S. has been tilting back and forth. In 2014, the U.S. appeals court ruled that the internet was not a “common carrier.” A common carrier is like a telephone line, simply a conduit to carry information. If telephones weren’t a common carrier, telephone companies could make it easier for businesses to access your phone than your friends and family.

The designation of common carrier is vital to net neutrality. Without that designation, internet service providers could effectively suppress content by making it more costly to view.

Sensibly, President Obama restored the designation of common carrier in 2015.

Now President Trump’s appointees to the U.S. telecomm regulator, called the FCC, intend to overturn net-neutrality in the U.S.

Canada faces a mixture of faux worry and resistance from the U.S.  A Trump-appointed advisor to the FCC, Roslyn Layton, said “My biggest concern for Canada is that you continue to add regulation that deters the incentive to invest,” Her fake concern for Canada not believable. Many big U.S. giants such as Netflix oppose the Trump initiatives because they don’t want their subscribers paying more than competitive video-streaming. They fear that U.S. telcomms will do what Videotron tried to do and tilt the internet in favour of their own services.

I have a feeling that Layton’s real concern is that U.S. tech start-ups will move to Canada where innovative technologies still have unbiased access to the internet.

Thank you, Mr. Trump, for killing the TPP

It’s a rare thing when the views of president-elect Trump and Canadian activists align as in their opposition to the Trans-Pacific Partnership. Trump has vowed to kill the deal the day he is sworn in.

However, the source of loathing couldn’t be more different. Canada is a trading nation and we depend on the flow of goods for jobs. Trump wants to set up barriers to trade and regards such deals as “job-killing.”

Unlike the deal between Canada and Europe, the Comprehensive Economic and Trade Agreement (CETA), we were on the sidelines when the TPP was negotiated. The TPP had little to do with reducing trade barriers. Law professor Michael Geist of the University of Ottawa outlines the other provisions:

“Much of the TPP focused on economic regulation, such as intellectual property enforcement, health regulation and environmental standards. Trade agreements are a poor place to negotiate these issues, which have traditionally fallen within the purview of international organizations that develop consensus-based treaties with broad stakeholder participation (Globe and Mail, November 16, 2019).”

Trump has NAFTA within his sights, too. With the North American Free Trade Agreement threatened by the belligerent president-elect, it’s vital that Canada look elsewhere. Canada already reached a deal with South Korea in 2014 and has engaged in talks with Japan, India and China regarding similar agreements.

Ongoing irritants plague all of these trade deals because corporations insist on corrupting them with their own interests under the label of “free trade.” One of those irritants is the investor-state dispute settlement provisions (ISDS) which allow companies to seek damages from governments when local regulations interfere with profit making.

Canada was stung by an ISDS under NAFTA in which a Delaware-based company proposed expansion of a quarry in the Bay of Fundy. Nova Scotia rejected it on environmental grounds. The federal government rejected it. Then a secret NAFTA tribunal approved it and we are stuck with a bill of hundreds of millions in compensation.

Tribunals aren’t a necessary part of trade agreements when you consider we have a court system. It’s not like we’re dealing with developing countries whose court systems are unknown or viewed as dodgy. CETA is a slight improvement over NAFTA. Members of the tribunal will be appointed by countries instead of corporations giving it the aspect of an international court.

One way to bypass trade deals is for unions to negotiate international agreements that are not susceptible to tribunals. Canadian auto unions have recently bargained deals with the big 3 auto manufacturers worth $1.6 billion. Jim Stanford, former economist for the Canadian Auto Workers and Unifor, and now professor McMaster University is thrilled with the deal which acknowledges superior productivity in Canada:

“Most Canadian auto plants operate at or near full capacity. Combined with advanced technology and work organization, that gives the Canadian industry an important productivity advantage. Output per worker is 10 per cent to 15 per cent higher than it is in the United States (November 21, 2016).”

Trade deals have been muddied by the addition of non-trade provisions, although I doubt that’s what motivates Trump.