The regulatory agenda in 2023 promises to be busy for the global technology, media and telecommunications sector, and Canada is no exception. There are strong indications that the Government of Canada intends to follow through on major legislative and policy initiatives in the TMT space, ranging from content regulation and compensation schemes, new cyber-security breach reporting and compliance initiatives and a continuing focus on mandated wholesale telecommunications access and broadband expansion funding initiatives. When added to new federal and provincial private sector privacy initiatives (see Dentons’ analysis of Bill C-27, An Act to enact the Consumer Privacy Protection Act, the Personal Information and Data Protection Tribunal Act and the Artificial Intelligence and Data Act and to make consequential and related amendments to other Acts and of Quebec’s Act respecting the protection of personal information in the private sector), there will be no shortage of new items to watch for on the horizon in the sector. 

I. New regulation of online streaming and news compensation

The Government of Canada is currently pursuing two legislative initiatives proposing new regulation of online streaming on the one hand, and online news content on the other. 

In Bill C-11, an Act to amend the Broadcasting Act and to make related and consequential amendments to other Acts, aka the Online Streaming Act, the Government of Canada proposes to amend Canada’s Broadcasting Act to clarify that it applies on the Internet, and to add online undertakings as a distinct class of broadcasting undertaking that is subject to regulation and oversight by the Canadian Radio-television and Telecommunications Commission (the CRTC or the Commission). The primary purposes of the proposed Online Streaming Act are to vest the Commission with new powers to regulate online undertakings, as well as to update the Commission’s toolkit in relation to traditional broadcasting undertakings. Bill C-11 has been passed by the Senate of Canada and returned to the House of Commons with amendments. It is expected that the amended legislation will be promulgated into law later this year. Once enacted, we expect that the Government will issue a new section 7 Policy Direction to the CRTC, and the heavy lift of implementing the revised broadcasting policy for Canada will commence in earnest for the CRTC.

The CRTC’s powers may also be expanded through the enactment of Bill C-18, An Act respecting online communications platforms that make news content available to persons in Canada, aka the Online News Act. Through Bill C-18, the Government of Canada proposes to require digital news intermediaries that assemble and provide access to news stories online to compensate Canadian news outlets for the use of their content. While modelled after 2021’s Australian News Media and Digital Platforms Mandatory Bargaining Code, Bill C-18 could potentially empower the CRTC to impose obligations on a broader scope of digital news intermediaries than the Australian legislation. Bill C-18 passed third reading in the House of Commons and is currently being considered by the Canadian Senate. This legislation is expected to be enacted in 2023.

In 2023, we are also expecting to see the Government of Canada undertake further action to implement a new regulatory framework to address hate speech on social media platforms and other online harms. Over recent years, the Government has undertaken two consultation processes with respect to potential legislative responses to online harms, including a national public consultation in 2021, and the engagement of an Expert Advisory Group on Online Safety in 2022. A summary of the views of the Expert Advisory Group on Online Safety was published in July 2022. Although the Government has not set out its intended next steps, we could see a new legislative proposal to address online harms in Canada in 2023.

II. Increasing the reliability and security of Canadian networks

Following a major national network outage impacting more than 10 million customers for over 15 hours in July 2022, the Government of Canada is promoting a Telecommunications Reliability Agenda that is aimed at improving the resiliency of Canadian networks. The Canadian Government has required all major telecommunications service providers to formalize their emergency assistance measures through a memorandum of understanding, and tasked the Canadian Security Telecommunications Advisory Committee (CSTAC), which regroups federal government stakeholders and representatives from major Canadian satellite, telco and cable carriers to prepare and deliver a report with recommendations to improve the reliability of Canada’s infrastructure by March 2023. Further actions to implement the recommendations from CSTAC are expected to follow later this year.

The Minister of Public Safety has also introduced Bill C-26, An Act Respecting Cyber Security, to amend the Telecommunications Act to better promote the security of Canadian telecommunications networks. Among other things, Bill C-26 would provide the Governor in Council and the Minister of Innovation, Science and Industry with broad powers to direct any telecommunications service providers or classes of telecommunications service providers to undertake actions related to the security of Canadian telecommunications. Bill C-26 also proposes to enact a new Critical Cyber Systems Protection Act that would enable Ministers to be named to impose cyber-security reporting and compliance program requirements on designated operators or classes of designated operators to be named by the Governor in Council. The introduction of Bill C-26 followed closely on the heels of the Government’s announcement that it intends to prohibit the inclusion of Huawei and ZTE equipment within Canadian networks. Bill C-26 is currently undergoing second reading in the House of Commons and could become law later this year.

III. A renewed focus on wholesale competition and consumer protection at the CRTC

Effective January 5, 2023, senior bureaucrat Vicky Eatrides, who previously served as Senior Deputy Commissioner of the Competition Bureau of Canada, will become Chairperson and Chief Executive Officer of the CRTC. Broadcasting veteran Alicia Barin and another senior bureaucrat, Adam Scott, who previously oversaw terrestrial spectrum management (including auction processes) at ISED, have been appointed as Vice-Chairpersons.

The changing of the guard at the CRTC coincides with an apparent refocusing, on the telecom side of the CRTC’s house, on wholesale measures to promote competition and consumer protection. In June 2022, Innovation, Science and Economic Development Canada (ISED) published a notice of a proposed Order Issuing a Direction to the CRTC on a Renewed Approach to Telecommunications Policy (Proposed Telecommunications Policy Direction), which would guide the CRTC in exercising its regulatory mandate. Numerous comments were filed concerning the Proposed Telecommunications Policy Direction, and it has not yet been promulgated into law. As originally proposed, it evinces the desire of the Government of Canada to see the CRTC take a more proactive approach to its consumer protection work, and to use effective wholesale regulation to support meaningful competition in the fixed Internet service and mobile wireless service markets in Canada. A finalized version of the Proposed Telecommunications Policy Direction is expected in 2023.

The themes set out in the Proposed Telecommunications Policy Direction were affirmed to the CRTC in the mandate letter issued jointly by the Minister of Canadian Heritage and the Minister of Innovation, Science and Industry on February 3, 2023 to the new Chair of the CRTC (Mandate Letter). The Mandate Letter also encourages the CRTC Chair to restore public trust in the CRTC by improving the speed at which it issues decisions and by improving public access to its processes.

In 2023, we expect the CRTC to prioritize decisions to further its wholesale regulatory frameworks in the following matters:

1. Wholesale Rate Setting: The CRTC is evaluating the methods it will use to set rates for wholesale services. Clarification of the CRTC’s rate setting methodology may stimulate new proceedings to re-assess the rates that currently apply to various wholesale services.
2. Fixed Internet: The CRTC is reconsidering how competitive providers will interconnect to gain wholesale access to the fibre-to-the-home (FTTH) networks of large carriers. Following a decision on this file, we can expect the CRTC to expand mandated wholesale access to FTTH networks of large carriers across Canada.
3. Mobile wireless: In 2023, the CRTC is expected to finalize tariffs for new mobile virtual network operator (MVNO) services from large mobile carriers. Once finalized, MVNO services will be available for a period of seven years, and are intended to be accessed by regional mobile providers to immediately offer services in areas where they will build their own network facilities. The availability of MVNO services may help foster significant market changes, such as the expansion of services from Quebecor into Western Canada, and Cogeco’s anticipated launch as a mobile wireless provider.
4. Access to poles and Barriers to rural deployment: In these two proceedings, the CRTC is considering changes to its framework governing access to poles owned and managed by carriers and whether regulatory intervention is required to facilitate rural broadband deployments.

Important consumer initiatives to watch in 2023 include:

1. Telecommunications in the Far North: The CRTC will hold a public hearing concerning actions to improve telecommunications services within northern Canada starting on April 17, 2023, in Whitehorse, Yukon.
2. Next Generation 9-1-1 services (NG9-1-1): In 2023, we may see provincial emergency services take advantage of new NG9-1-1 functionalities and enable Canadians to communicate with 9-1-1 using advanced text/photo/video capabilities.
3. Botnet blocking: The CRTC has determined it will establish minimum standards for botnet-blocking for Canadian carriers. Work to establish these standards is expected to take place in 2023.
4. 9-8-8 dialing for mental health crisis and suicide prevention services: Three-digit dialing will go live as early as November 30, 2023.
5. Wireless accessibility: The CRTC has been assessing whether wireless plans available from mobile providers are meeting the needs of persons with disabilities. A decision is expected in 2023.
6. Accessible Canada Act: Large service providers are required to publish accessibility plans under the Accessible Canada Act by June 1, 2023.
7. Price increases for basic TV packages: A number of service providers have requested that the CRTC permit an increase in the maximum retail price for the CRTC-mandated basic TV service from CA$25 to CA$28 per month (and for this to increase each year). A decision is expected in 2023.

IV. Universal access to high-quality networks and investment in 5G services

Coming out of the global coronavirus pandemic, the deployment of high-speed connectivity to areas of the country that continue to lack access to advanced broadband and mobile wireless services remains a key Canadian priority. We expect to see significant activity continue from all levels of government to support network deployment projects that promote universal access for all Canadians:

1. In late 2022, the Government of Canada committed an additional CA$475 million to its Universal Broadband Fund (UBF). Established in 2020, the UBF is now set to provide a total of over CA$3.2 billion to support rural connectivity and, in particular, the build-out of networks that will support broadband services with speeds of 50 Megabits per second (Mbps) download and 10 Mbps upload and/or mobile services providing a minimum of 4G LTE technology.
2. The CRTC has also recently launched a third call for applications to its Broadband Fund. To date, the CRTC has awarded CA$226 million of the CA$750 million allocated to the program.
3. The federal UBF and CRTC Broadband Funds are complemented by provincially-sponsored broadband funding programs in a number of provinces.

The federal spectrum regulator, ISED, will continue to support 5G network deployment in Canada through planned releases of critical mid-band and millimetre wave spectrum, and policies to promote improved and timely access to underutilised spectrum:

1. 3800 MHz: Building on its allocation of 3500 MHz spectrum in 2021, ISED will auction spectrum in the 3800 MHz band in October 2023.
2. Millimetre wave: ISED held a consultation process in 2022 concerning an auction process to allocate frequencies for flexible use in the 26 GHz, 28 GHz and 38 GHz bands in the near term. A decision announcing the structure and timing of this auction is expected in 2023. The millimetre auction will complement ISED’s recent decision to allow licence-exempt operations in certain frequency ranges above 95 GHz.
3. Access to spectrum: ISED is undertaking measures to provide increased access to spectrum to smaller providers and entities wishing to build private networks, including establishing a new non-competitive local licensing framework and a potential access licensing framework, whereby licences may be granted to allocated spectrum where the primary licensee has failed to deploy the resource. Decisions are expected on these matters in 2023.

These ISED initiatives are being rolled out in the context of increased public scrutiny of the powers of the Minister of Innovation, Science and Industry under the Radiocommunication Act. While it is difficult to say whether it will be made into law, Bill S-242, An Act to amend the Radiocommunication Act, first introduced in the Senate of Canada on March 23, 2022, continues to wend its way through the legislative process. Bill S-242 seeks to implement changes to the Radiocommunication Act to require spectrum licensees to achieve coverage to a minimum of 50% of the population of a relevant licence area within three years of licence issuance, or for existing licences, within three years of Bill S-242 coming into force, on pain of licence revocation should this condition not be met.

ISED has not supported the adoption of blanket deployment requirements, as proposed in Bill S-242, instead favouring the use of customized deployment requirements for individual licence types. As part of the 3500 MHz auction, held in 2021, for example, ISED imposed progressive deployment requirements to ensure that spectrum use is expanded and maintained over the duration of the licence term. Similar progressive deployment milestones are set to be imposed as part of the upcoming 3800 MHz auction.

As evidenced from the above, 2023 will see a full Canadian regulatory agenda for the TMT sector, marked by a series of new and high profile regulatory decisions and initiatives. As these ambitious policy initiatives are generally controversial in nature and subject to opposition, it is unclear how these matters will ultimately unfold. Historically, major policy initiatives, and especially those implemented by the CRTC, have been subject to legal challenges and appeals, delaying new regulatory obligations from coming into effect. As a result, while 2023 will be marked by regulatory ambition and is likely to witness the adoption of significant new legislation and important regulatory decisions, there may still be hurdles ahead for regulators tasked with implementing new frameworks.

The authors gratefully acknowledge the contribution of Oliver Flis, Student at Law.

To read other articles in the Dentons’ Pick of Canadian Regulatory Trends to Watch in 2023 series, click here.

Stay up-to-date with all insights and guidance from our Regulatory team by visiting our Canada Regulatory Review blog here and signing up for future alerts here.