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Canada must regulate and tax U.S. social media and tech giants
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Canada must regulate and tax U.S. social media and tech giants

Written by
Daniel Bernhard
Published by
Toronto Star
September 7th, 2018

FRIENDS' Executive Director asks if Canadians are ceding our democratic authority to Silicon Valley corporations.

The monopolistic tech empires of Silicon Valley dominate our social and economic lives.

But in truth, their power rests on a fragile innovation fantasy, which holds that these businesses are unlike anything the world has ever known before. If this were in fact the case, then perhaps the demand to be exempt from the laws and regulations that predated these corporations would be appropriate.

But in reality, these companies are not nearly as unique as they claim to be, and their insistence on sidestepping our laws and rules is nothing less than a full-frontal assault on our democracy.

For too long, Canadian governments of all stripes have been happy to play along with this fantasy.

But that may be changing.

On Tuesday, federal NDP leader Jagmeet Singh announced a slate of policy measures that would go a long way toward restoring Canada’s democratic sovereignty over these foreign corporations and their shareholders.

In a nutshell, the NDP is arguing that the web giants should be subject to the same treatment as any other business. They should collect sales taxes like everybody else, pay corporate taxes like everybody else, and follow the same laws and rules as everybody else.

Of particular importance was the promise to close the internet advertising tax loophole. It allows Canadian advertisers who do business with media companies, like Google and Facebook, to claim $1.3 billion in tax benefits that are supposed to be reserved for companies placing ads with Canadian media, which enrich our society and secure our democracy.

Notwithstanding the move by Quebec’s government, supported unanimously by all parties in the National Assembly, to force Netflix to collect provincial sales tax, the most striking thing about the NDP proposal is how radical it feels when compared to the status quo.

Few would argue that all businesses should not be treated equally under the law, yet today’s political consensus delivers the exact opposite result: a two-tiered system where Canadian businesses are subject to Parliament’s will and foreign internet giants are allowed to write their own rules.

In 1984, Orwell depicted the final conquest of totalitarianism with characters who had come to believe that “War is peace, Freedom is Slavery, Ignorance is Strength.” The innovation fantasy maintains its power by normalizing exactly this type of absurd language. The “sharing economy” involves no sharing. “Social media” empowers the most anti-social elements in our society.

This isn’t just euphemistic branding: it’s an end-run around our democratic right to decide which laws and rules will govern our country.

Silicon Valley wants us to believe that their hotels aren’t hotels, their taxis aren’t taxis, their broadcasters aren’t broadcasters, their publishers aren’t publishers. Because hotels and taxis and broadcasters and publishers are all critically important, and therefore highly regulated, and Silicon Valley appear determined to avoid costly inconveniences, such as safety standards, cultural policy, or hate speech law.

It all boils down to one simple question: will we decide how Canada is run, or will we cede that power to pathological, unaccountable foreign tech companies who will claim that up is down if it’s profitable to do so?

Will Canadian law determine what is acceptable for mass publication, or will we surrender that power to Facebook and be governed by their “Community Standards” instead?

Will Canadian law establish cultural policy and set standards for broadcasters, or will we surrender that power to Netflix and simply hope that they put Canadian stories on screen?

With their proposal to end the special treatment for the internet monopolies, the NDP has introduced a new narrative to counter the innovation fantasy. The absolute dominion of the web giants is not inevitable. Other countries have chosen to brush aside this fantasy, and so can we. We can take back democracy if we choose.

I sincerely hope that the other parties in Parliament will do the right thing.

Will we write the rules, or will we let foreign companies call the shots? It’s an existential question. For me, the choice is clear. One option is called democracy. The other, not so much.

Daniel Bernhard is executive director of the watchdog group Friends of Canadian Broadcasting.

© Toronto Star

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