Ottawa’s honeymoon with Silicon Valley may be ending
Stricter regulations considered amid concerns over privacy, culture
OTTAWA— Justin Trudeau stood in the old Canada Post office in Vancouver to take part in Amazon’s announcement. The prime minister needed some good news in British Columbia, where he was facing heat for supporting the Trans Mountain pipeline. So when the massive online retailer revealed in April that it was bringing 3,000 new hightech jobs to the Lower Mainland, it was a happy coincidence.
“There are many reasons industry giants like Amazon choose to settle and grow in Canada,” Trudeau told the crowd.
“Our workforce is highly educated, skilled and diverse. Folks across the country are ready to take on the jobs of tomorrow and help companies like (Amazon) shape the future. A future where innovation drives economic growth and helps improve the lives of middle-class Canadians and people working hard to join it.”
Away from the podium, the narrative around Amazon was slightly different.
Timed toilet breaks. Workers putting in 55-hour weeks, collapsing on the job. A company owned by the world’s richest man fighting Seattle city hall over taxes aimed at reducing homelessness, while cities across North America compete to offer him better deals for the company’s new headquarters.
That’s a far cry from the Liberals’ oft-stated goals of inclusive growth, support for the middle class and emphasis on labour rights in trade discussions.
But it highlights a tension in the Liberal government’s approach to Silicon Valley and the tech sector.
Trudeau was elected in part on a pledge to bring high-tech jobs to Canada, promoting the country as a hub in the new knowledge economy. But pressure is mounting to address the influence internet giants such as Google, Facebook, Amazon and Netflix have on Canadian life.
Concerns about privacy, the integrity of elections and the culture industry are leading Trudeau’s ministers to openly muse about stricter regulations.
Prof. Taylor Owen, who teaches digital media and global affairs at the University of British Columbia, said luring Silicon Valley investment to Canada was a key part of the Liberals’ economic agenda.
“They perceive it in Canada’s economic interest to incentivize and convince foreign direct investment from the tech sector to invest in Canada. That’s clearly part of their industrial strategy,” Owen said.
“That’s a response to the decline of the manufacturing sector, a legitimate concern for jobs for the middle class. Right? It fits in with their economic agenda.”
The Liberals want to be “as connected as possible to hightech issues,” said Fenwick McKelvey, who researches digital media issues at Concordia University.
But many observers argue that the expanding reach of these companies into virtually every part of Canadian life and the threats they pose are not getting the public policy attention they deserve.
“We keep calling this a digital issue. But basically these platforms are … integral to our social fabric these days,” McKelvey said.
“And there’s really been an absence of even incremental steps to think about these companies, more broadly than just Facebook, as part of the Canadian landscape.”
“The question is,” Owen said, “are there kind of negative externalities to these companies?”
Canada is not alone in struggling to apply existing laws — or develop new ones — to “disruptive” internet companies. But unlike jurisdictions like the European Union, whose aggressive new data protection rules come into effect this month, Ottawa’s approach has been largely to wait and see if the tech giants will fix their own problems.
Elizabeth Dubois, a University of Ottawa professor studying digital governance issues, said these companies have evolved so quickly that it’s understandable governments are struggling to keep up.
“Everyone is trying to figure out how to deal with the incredible fast pace of technological innovation and how to deal with the privacy implications or other regulatory issues,” Dubois said.
“Yes, we are lagging behind, (but) it’s not as if there’s a perfect solution already available for us.”
The tech world’s speed, however, isn’t the only barrier to regulation. Internet giants are actually delivering on the economic promise the govern- ment has so often touted.
They wield incredible influence, investing hundreds of millions in Canadian companies — $500 million from Netflix for Canadian production, 3,000 new jobs from Amazon (which is also considering Toronto for the location of its next headquarters), a $2-billion investment from Californiabased Salesforce, millions from Facebook for election integrity and journalism initiatives.
Google has invested almost $30 million in research and Canadian universities, $50 million in its Sidewalk City proposal in Toronto, and $10.1 million in philanthropic projects, according to the company.
But whatever the economic benefits, the controversies around democracy, privacy and labour issues that have hit these companies in recent years are clearly changing the relationship between the government and Silicon Valley.
For instance, high-tech firms are stepping up their already significant lobbying efforts in Ottawa. Four companies — Facebook, Google, Amazon and Netflix — contacted public office holders at least 179 times between November 2016 and November 2017, up from 118 times the previous year. Meanwhile, the informal coziness that once marked the relationship no longer seems politically tenable. Facebook Canada’s public policy lead, Kevin Chan, after insisting that his meetings with such senior cabinet ministers as Finance Minister Bill Morneau did not constitute lobbying, recently had a change of heart and registered as a lobbyist.
The government, too, seems to be having a change of heart. A senior government source, who spoke to the Star on the condition of anonymity, maintained Ottawa is seized with the question of regulation. And the Liberals have taken some small steps in that direction.
Bill C-76, the government’s proposed election law overhaul, forbids companies from accepting foreign money to purchase election ads aimed at influencing Canadian politics. The move appears directed largely at Facebook in light of the disinformation that spread on that platform during the 2016 U.S. federal election.
The Liberals have also enacted new private-sector privacy rules, requiring businesses to notify their users — and Canada’s privacy commissioner — of data breaches that present a “real risk of significant harm.”
The Liberals have also asked the CRTC to review the Broadcasting Act, including how Canadians are likely to consume news and entertainment content in the future.
But Owen said that although there has been more discussion in Ottawa about regulating the internet giants, he still thinks that’s the Liberals’ “Plan B.” And “Plan A” still seems to be hoping the companies address their problems themselves.
“I don’t think they’re ready to pull the trigger (on regulations), I think they’re still waiting to see what Facebook and Google do,” Owen said.
“The question is whether that will be seen as enough.”