Online Safety in Canada

The members of the Safer Online Spaces Coalition — Amanda Todd Legacy Society, Canadian Centre for Child Protection, Children's Healthcare Canada, Canadian Medical Association, Canadian Paediatric Society, SickKids Child Health Policy Accelerator, and Inspiring Healthy Futures — see every day how an unregulated platform environment affects Canadian children, youth, and families. The Coalition engaged Meredith Boessenkool & Phillips, a policy consultancy, to undertake an estimate of the economic cost of inaction on online safety in Canada. This paper makes the fiscal and policy case to establish a Canadian online safety regulator with real enforcement powers.

Independent economic modelling estimates the annual cost of platform-facilitated harms to Canadians from birth to 24 years at $2.0 billion to $4.8 billion in 2026 dollars. Of this, $1.7 billion to $3.0 billion falls directly on Canadian governments through publicly-funded health care, education, and justice systems and through lost tax revenue due to reduced productivity. This is a cost being borne today in emergency departments treating youth self-injury and eating disorders, in police services investigating online child sexual exploitation, in schools managing cyberbullying, and in gambling treatment programs serving young Canadians.

Voluntary platform compliance has been tried and has failed. Internal industry records disclosed under oath in the K.G.M. social media addiction trial in California1 confirm what clinicians and whistleblowers have testified to for years: the vast majority of the documented psychological harms to young users are produced not only by user-generated content but by deliberate platform design. The addictive features driving those harms are central to the platforms' business model. Only statutory authority over platform design can correct this. That means duty-of-care obligations (including a special duty to protect children and youth), mandatory researcher data access, and the financial penalties to make compliance inevitable.

Canada's peer democracies have built substantial enforcement capacity and, in some cases, adopted platform-funded cost-recovery models to support regulatory oversight. The United Kingdom's Ofcom Online Safety Group consists of hundreds of staff with an approximate annual budget of £92 million in 2025–26 (approximately CAD $171 million, and up from £71 million the previous year). This budget is recovered through fees levied on platforms with global revenue above £250 million. The European Commission's Digital Services Act (DSA) Enforcement Team collected approximately €58.2 million in DSA supervisory fees (approximately CAD $93.6 million) from designated Very Large Online Platforms in 2024 to fund its digital services enforcement work.

Against these benchmarks, the Parliamentary Budget Officer's costing of the previous Online Harms Act framework at $50–60 million annually (about 300 FTEs) is modest. It represents about two to three percent of one year's low-end harm cost ($2.0 billion) falling on Canadian children and youth. It is also about four to nine percent of the federal share of that fiscal burden ($676 million to $1.2 billion).

Even a modest reduction in the recurring annual harm-cost burden would return public value many times the regulator's full annual operating cost. Early post-implementation evidence from the UK and EU confirms that meaningful reductions in targeted harms are achievable.

The Coalition calls on the Parliament of Canada to pass a law that establishes, fully funds, and empowers an independent Canadian online safety regulator with statutory enforcement authority, modelled on the duty-of-care framework now operating in peer jurisdictions.

The international comparators are clear. The return on investment is evident. And the cost of inaction is being paid every day, in dollars and in lives, by Canadian children, families, and all taxpayers.

Date

June 1, 2026

Re

Economic and cost analysis of online harms – final report

Submitted to

Safer Online Spaces Coalition

Submitted by

Tyler Meredith Meredith Boessenkool & Phillips, Make Better Policy

While Canada has tried multiple times to pass into law a formal regulatory regime for online harms, despite years of promise and attempted legislative action, we are still without a legal regime. Other countries have acted.

The lack of regulation externalizes harm. The costs of addictive design, algorithmic amplification of damaging content, and inadequate age controls are not borne by the platforms that generate them but by society as a whole. For children and youth this is a particularly acute challenge as the rise of cyber-bullying, self-harm and online gambling — to name a few forms of harm to which young Canadians are increasingly exposed — can result in traumatic mental health disorders and eventually delay and degrade human capital acquisition. When aggregated at the household and societal level these costs become significant. Governments, households and businesses bear these costs. But platforms who in part enable the distribution of harmful content do not.

Regulating online harms and in particular taking action to prevent the dissemination of hateful and harmful material to under-age children and youth is both necessary and popular. Recent public opinion research from Leger shows that 90% of Canadians want social media platforms to be held accountable for the impact of the content they help make available and how it affects children and youth; 80% want to create a public regulatory regime in this regard; and 90% agree there should be some minimum registration age for access to these platforms.2

Recently, the Canadian government has signalled its intention to regulate online harms, but Parliament has not yet received a formal legislative proposal. Provincial governments are also exploring their own regulatory tools3 and a landmark policy was recently adopted at the 2026 Liberal Party of Canada national policy convention calling on the government to consider regulation with a minimum access age rule.4

In anticipation of policy action, this memo sets out to help quantify the extent of knowledge about the economic and fiscal impacts associated with online harms in a Canadian context. At present, no comprehensive estimate exists in the public domain of what that inaction is costing Canada's children and youth. This paper attempts to begin filling in some of these gaps by establishing a framework for how to quantify these impacts and takes a preliminary effort in doing so.

For clarity, this paper is not nor was it intended to provide new primary data collection. Rather, it attempts to establish a model for how different costs appear across society and attempt to quantify these based on different sets of information available in either a Canadian-specific, or where that is unavailable, an international context. This should not be understood or positioned as a singular set of impacts, since as we note further on, it only looks at a subset of harms applicable to the current public policy discussion on potential reform. It also focuses exclusively on children and young adults (up to age 24). This youth focus is intentional and is driven by the government's primary regulatory interest in protecting children and youth from platform-facilitated harm. Throughout this paper, all cost estimates — including incidence bases, attribution fractions, and cost multipliers — are scoped to this age group.

Where national surveys or studies report statistics for broader populations (such as all Canadian residents), those figures are used solely to establish context; the underlying calculations always apply them only to the youth cohort relevant to each harm category. The extant impact of online harms in a full adult and multi-generational context, including the cumulative effects of how these harms will play out as new technological forces such as generative AI take hold, is not known nor attempted in this paper.