Canada: New Legislation Targets Criminal Investigations Involving ISPs, Other Telecom-Related Operators

Last Updated: June 30 2009
Article by Bram Abramson, Hank Intven, Charles S. Morgan and Lorne P. Salzman

Most Read Contributor in Canada, September 2018

On June 18, 2009, the Canadian government introduced legislation designed to facilitate criminal investigations involving ISPs and other telecommunications-related operators (referred to as "telecommunications service providers" or "TSPs"). Bill C-46 grants extensive new investigative powers to Canadian police forces, while Bill C-47 imposes new obligations on TSPs to ready their facilities so as to be able to cooperate with police investigations when they occur. While law enforcement officials are likely to applaud what is intended to give them investigative tools for the digital era, privacy advocates will question the need to expand police surveillance powers in this manner, particularly when weighed against inherent risks. TSPs, meanwhile, will want to become familiar with these new requirements and take steps to prepare for their implementation.

Background

The proposed legislation arises from Canada's participation in the 2001 Cybercrime Convention, an international treaty sponsored by the Council of Europe. The Convention commits participating jurisdictions to act against illegal activities including computer-related forgery and fraud, child pornography and copyright infringement. It also commits countries to acquire the capacity to collect, preserve, intercept and produce "specified computer data, including traffic data." The United States, Australia, United Kingdom and New Zealand have all adopted enabling legislation.

Canada made an earlier, unsuccessful attempt to update its investigative powers involving TSPs. The Government tabled the Modernization of Investigative Techniques Act (MITA) in 2005, but it never became law. Bill C-47 is substantially similar to MITA, with minor changes that address some of the criticisms that were levelled at MITA. However, the companion measures set out in Bill C-46, in effect, enhance the impact of MITA by clarifying and expanding the investigative powers of law enforcement authorities.

TSPs Must Ready Their Facilities

Bill C-47's key requirement is that TSPs be able to intercept communications traffic and permit access to authorized officials. It targets anyone who provides any "telecommunications service," whether basic or enhanced, and includes wireless service providers, Internet access providers, and most Voice-over-IP providers. Its scope is broad enough to also cover many non-access providers like e-mail application providers, web hosting facilities, and cloud computing services. TSPs are required to operate their "transmission apparatus" — essentially, any network device operating at any layer, including a switch, router, gateway, network storage device, or server — in order to enable multiple simultaneous interceptions and to isolate each communication intended to be intercepted.

TSPs must also meet certain ancillary obligations. They must provide police officers and employees of the Canadian Security Intelligence Service (CSIS) and the Royal Canadian Mounted Police (RCMP) with information about their facilities and the services they provide; help law enforcement officials assess or test the TSP's facilities; and provide the officials, upon request, with a list of the TSP's upstream suppliers and downstream customers. The RCMP and CSIS may also request a list, and conduct a security assessment, of all employees or consultants who may assist in communications interception.

Bill C-47 contains some exemptions and transitional delays that will assist some service providers, notably the following:

  • TSPs with less than 100,000 subscribers will have three years to meet operational requirements.
  • Backbone network services will be exempt from many requirements.
  • Post-secondary institutions, libraries, community centres, restaurants, and temporary or permanent lodgings like hotels and apartment buildings will be exempt from most requirements.
  • Financial institutions, charities, places of worship, most schools, hospitals, retirement homes, research networks and broadcasters will be exempted altogether, although it should be noted that many of these are regulated under other industry-specific rules.

The Government will also be able to exempt other classes of TSPs from most requirements for two years. Moreover, a TSP can ask for an exemption of up to three years. An application will require, among other things, a plan to show how the applicant will come into compliance with the requirements of the law.

TSP Disclosure Obligations

Bill C-47 imposes obligations on TSPs to provide certain subscriber information to the authorities upon demand. This subscriber information, which Bill C-47 describes in greater detail than did MITA, includes name, address, telephone, e-mail, IP address, SIM card number, and a number of other identifiers. The RCMP, CSIS, Commissioner of Competition, and provincial police services may each authorize five people — or, where their agency has less than 100 employees, up to five percent of their staff — to whom TSPs must grant warrantless disclosure of identifying information. A police officer may also act as an authorized person and obtain this information, provided the police officer: a) deems it necessary to do so in order to prevent an unlawful act that would cause serious harm; and b) reports back to an authorized person within their agency within 24 hours. Various audit requirements are imposed on agencies that make such requests for subscriber information.

Bill C-47 imposes certain self-reporting obligations on TSPs. A TSP must file a compliance report with the Minister within six months of the statute's coming into force. Also, whenever a TSP acquires any part of another TSP's operations and continues to operate them, the acquirer must file a similar compliance report with the Minister. The regulations can be expected to extend this reporting obligation to new entrants.

Expanded Investigative Powers

Bill C-46 updates several laws that grant investigative powers to police and other authorities, including those that enforce the Competition Act. The purpose of these amendments is to give these authorities better tools to deal with investigations where the Internet and other new communications technologies are involved, including the ability to use the powers granted and capabilities acquired under Bill C-47. At the same time, Bill C-46 expands several criminal laws to cover evolving technology-oriented methods of perpetrating criminal activity.

The new investigative powers that are added to the Criminal Code include the following:

  • Police will be able to obtain a judicial warrant allowing them to remotely track the location of a mobile phone, vehicle or other device, and to compel the production and disclosure of such tracking information.
  • If police have reasonable grounds to suspect that an offence has been or will be committed, they will be able to make a short-term demand that will obligate a telecommunications service provider to maintain data relating to a specific communication or customer until a formal search warrant or production order can be obtained. Bill C-46 also expands the circumstances when such production orders can be obtained.
  • Police will be able to obtain an order compelling the disclosure of "transmission data": that is, data on the dialing, routing, addressing or signaling related to a communication or similar functions related to computer service that enables communication.

Bill C-46 includes a provision that allows the police to request that a TSP preserve data or provide a document (unless prohibited by law) even without a preservation order or other legally sanctioned mechanism. Bill C-46 also provides a liability shield for TSPs in this regard, stating that a person who engages in such cooperative activity will not incur criminal or civil liability. This limit on liability will provide a degree of comfort to TSPs that cooperate with police in circumstances where they are uncertain about whether doing so will expose them to liability. If adopted, the liability shield would prevail over CRTC rules that, ordinarily, prohibit regulated TSPs from divulging subscriber information.

The new offences created by Bill C-46 include the following:

  • Possession of a computer virus for the purpose of committing the offence of mischief will become an offence, in addition to the current offence of spreading, or attempting to spread, a computer virus that causes mischief.
  • Using a computer system, including the Internet, to make arrangements with another person to sexually exploit a child will become a new offence.

These new offences are consistent with Canada's commitments under the Cybercrime Convention described above.

Costs and Compensation

TSPs will understandably be concerned about the costs of compliance with Bills C-46 and C-47, particularly in light of last year's Supreme Court of Canada decision (Tele-Mobile Co. v. Ontario, [2008] 1 S.C.R. 305) holding that telecom operators have no right to compensation for the costs of complying with legal obligations to assist investigative authorities outside of what is stipulated in the legislation. The bills provide both good and bad news in this regard.

Service providers are required to take steps to meet the interception and disclosure requirements of Bill C-47. Where a TSP can already meet those requirements, it must continue to do so. Where it starts up new services, it must continue to comply. Where it installs new transmission apparatus, it must ensure that it meets the requirements of Bill C-47 to the extent that the software from the manufacturer is able, even if that means that the service supplier must install additional software modules. Although not stated explicitly, the cost of these compliance activities, both initial and ongoing, will be borne by the TSP.

The details of some cost-causing activities await further guidance from the Government, including:

  • whether related technological upgrades being undertaken now to implement new Enhanced 9-1-1 rules for wireless and Internet Protocol geolocation will meet Bill C-47's requirements;
  • whether Bill C-47's requirements can be satisfied by equipment that meets the
    J-STD-025 family of standards in use in the United States, and already available in off-the-shelf equipment; and
  • whether TSPs will have to register and interact with a separate regulatory body in addition to the CRTC.

With respect to legacy systems, or any new system installed by a TSP that is not sufficiently functional, the Minister has a residual power to order a TSP to comply with the interception and disclosure requirements. Where the Minister makes such an order, the TSP may be able to claim some compensation. The Minister will determine the amount of compensation, applying the test of what is both reasonable and necessary for the TSP's initial expenses of compliance.

Bill C-47 provides that TSPs will be paid for other compliance activities, including providing subscriber information such as a telephone number or IP address to the police, or providing certain to-be-defined support services to the police. The amount the fees will be set out in regulations to be released later.

Comparing the Canadian and US Approaches

Bill C-47 is analogous to the United States Communication Assistance for Law Enforcement Act (CALEA), which came into force on January 1, 1995. There are a number of similarities between the Canadian bill and the US legislation. Just as Bill C-47 imposes on TSPs an obligation to maintain interception capability, CALEA requires providers to have the capability to:

  • intercept and isolate a communication;
  • simultaneously intercept the communications of multiple users;
  • isolate a user's transmission data;
  • provide the intercepted communication and transmission data to law enforcement agencies; and
  • ensure that all interceptions are kept confidential.

Moreover, under both CALEA and the proposed Canadian regime, the government establishes maximum-capacity requirements, so that providers know how many simultaneous interceptions they must be able to carry on at one time.

There are a number of key differences between CALEA and the proposed Canadian regime, including the following:

  • CALEA requires telecommunications carriers to consult, as necessary, with manufacturers of their transmission and switching equipment and their providers of telecommunications support services. Bill C-47 does not.
  • CALEA states explicitly that the US Attorney General will consult with the telecommunications industry in order to implement technical standards for interception. Bill C-47 does not contain such a requirement, although something analogous may be included in the regulations.
  • CALEA includes a "safe harbour" provision such that, if a telecommunications service provider uses devices that comply with recognized industry organization, standard-setting, or regulator-mandated standards, they are deemed compliant. Bill C-47 leaves for possible regulations the issue of any technical standards and compliance with them.
  • CALEA permits an interception to be carried out only with the affirmative intervention of an individual officer or employee acting in accordance with prescribed regulations. The Canadian approach requires judicial consent for most interception activities.
  • CALEA does not make the acquisition of a portion of another TSP's operations a reportable transaction. Bill C-47 does.

TSPs that operate in both Canada and the US will want to consider the impact of these differences.

Next Steps

Bills C-46 and C-47 were given first reading in the House of Commons on June 19, 2009. The House of Commons adjourned the following day. When the House reconvenes in September, the Bills are likely to be referred for study and review to a parliamentary committee. Parliamentary committees often hold public hearings at which interested parties are able to express their concerns and recommend changes. TSPs will want to use the intervening period to study the two Bills, and assess whether they want to make submissions requesting changes in the proposed legislation.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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