Industry Committee on Nov. 23rd, 2023

[Michael Beauvais]

I mean that the concerns could be dealt with in terms of prescribed requirements issued by the minister instead of having them solidified into the legislation itself. I think it's unreasonable to say that absolutely no data used should possibly engender any sort of harm to any specific user. That would be treating privacy as an absolute. That, to me, as someone who consistently advocates for robust privacy protections, seems unreasonable.

[The Chair, Liberal, Joël Lightbound]

Thank you.

MP Van Bynen, the floor is yours.

[Tony Van Bynen, Liberal, Newmarket—Aurora, ON]

Thank you, Mr. Chair.

My first question will go to Mr. Beauvais.

Do you feel that Bill C-27 gives the Privacy Commissioner of Canada enough tools to ensure that firms implement data management practices, considering the sensitive nature of personal information about minors?

[Michael Beauvais]

I would say that the bill specifically gives the Privacy Commissioner the ability to issue administrative monetary penalties, which is a very welcome addition.

The one thing that strikes me, which I would like to highlight, is the fact that at the moment the OPC cannot issue an AMP for breaches of proposed section 12. I think this is quite an important section, since the purposes of data processing are the pillar for determining what is or is not a legitimate use of data. Therefore, I would recommend including proposed section 12 as a kind of enforceable ground for the OPC.

[Tony Van Bynen, Liberal, Newmarket—Aurora, ON]

Mr. Goldfarb, what are your thoughts?

[Prof. Avi Goldfarb]

I'm sorry, but what is the particular question?

[Tony Van Bynen, Liberal, Newmarket—Aurora, ON]

Do you feel that Bill C-27 gives the minister and the Privacy Commissioner of Canada enough tools to ensure that firms implement data management practices, considering the sensitive nature of personal information?

[Prof. Avi Goldfarb]

I will be careful, a little bit, about my expertise in terms of the operations of it. That is not what I know well, but in my view, the bill is clear about what it gives the commissioner. If anything, I came in thinking that the commissioner is getting a lot of power out of this bill to potentially interfere with how small businesses and start-ups operate. I do think that, if anything, it does get the balance right.

[Tony Van Bynen, Liberal, Newmarket—Aurora, ON]

Let's come back to an article that you co-authored and published in September, “The Economics of Digital Privacy”, in which you state that digital privacy regulations can “have negative consequences on market outcomes, particularly with respect to competition, innovation, and both producer and consumer surplus.”

Do you think that Bill C-27 should be amended to protect the competitiveness of Canadian businesses?

[Prof. Avi Goldfarb]

My view is that, in many ways, the most important thing about a policy—and, to some extent, a privacy policy—is to ensure that we protect competition.

At the same time, I don't know what an amendment to this act would look like in terms of protecting competition for the next generation of technology. A vigorous antitrust enforcement by the Competition Bureau and the continued vigilance on how large tech companies and others are potentially using their existing dominance in some markets to connect to and take advantage of new markets is worth protecting.

I'm not sure that belongs in Bill C-27, in the sense that things like ensuring interoperability between existing systems and new technologies are very valuable.

[Tony Van Bynen, Liberal, Newmarket—Aurora, ON]

We're looking at some pretty significant imbalances in the economy where we have dominant players in relation to big data and financial resources.

What things should we be considering that level, or at least bring into better balance, the competitiveness of those imbalances now? The concern that I'm hearing through the HUMA committee is that this will be a polarization of capital and that the gap between the haves and the have-nots will become quite significant.

How can we address some balancing there?

[Prof. Avi Goldfarb]

When we think about technology and technological change, information technology is capital, so the owners of that capital have done better and better. This whole literature on the decreasing labour share and the increasing capital share of the economy is partly related to the ability to scale through information technology.

The impact of these particular data-driven technologies on market power is more subtle. The reason is that, in a Stats 101 sense—and I don't know if and when you took statistics—there are decreasing returns to scale and data in a formal technical sense. It's like this: If you have 10 people and you get an eleventh, you learn a lot; if you have a million people and you get one more, you don't learn that much. In an explicit technical sense, there are no economies of scale in data.

On data-driven and machine-learning technologies, there are reasons not to expect monopolization. There are, importantly, other forces going in the other direction, and those are the things that we should keep an eye on and regulate. The forces going in the other direction are things like.... The ability to use data requires certain other technologies or can benefit from certain other markets where there is dominance. The ability to use data, and use it well, requires computing, so if the cloud services market is monopolized or has strong market power, that's going to impede innovation and be a real competition worry. Also, if media, in some ways, are monopolized, and therefore the ability to understand users as they interact with media becomes monopolized, that's another way that could [Technical difficulty—Editor] in terms of competition.

In my view, those are related, but only tangentially related, to most of the content of Bill C-27.

[The Chair, Liberal, Joël Lightbound]

Mr. Van Bynen, I'm afraid you're out of time.

That concludes our third round of questioning, and we'll be ready to adjourn the meeting.

Mr. Masse, go ahead.

[Brian Masse, NDP, Windsor West, ON]

Thank you, Mr. Chair.

I don't get my last spot, and that's okay, but I want to say thank you. I appreciate your decision on the ruling. I think it's the right ruling in terms of the practice I've seen here.

I want to express my concern about the situation on the topic of jobs. When I came here on Monday, I was mocked by some members in the House of Commons because it was said that one job was going to be for workers from South Korea. We learned on Tuesday that it was 100 jobs. We learned today that there may be another 900 jobs that are possible—it's breaking right now. There was also the question of 1,600 jobs before that. We still don't know the jobs for building, tech transfer and operating.

I think those are all public trust issues that we should be getting to at some point. I appreciate your efforts to steer us through this. In my opinion, these are important investments to be made, but there needs to be some confidence and public trust, because it's not only about the plant that's local in my community, but the three that come after that.

I appreciate your ruling. I want to put on the record, though, that I think it was the appropriate reading given the practice, and the importance of the matter next week.

Thank you, Mr. Chair.

[The Chair, Liberal, Joël Lightbound]

We're not opening a debate. Mr. Masse agreed to forfeit his last two minutes of questions because we ran out of time, so I recognized him.

To be clear, I'm hoping that we're going to get the contracts very soon. I understand that they're being worked on by the department.

On that note, thank you very much to the witnesses for your presence here today.

I'd like to thank the interpreters, the support staff, our clerk and the analysts.

The meeting is adjourned.