The parliamentary budget officer estimates that staffing up the new regulators in the Liberals' Online Harms Act will cost around $200 million over five years.
The federal government wants to establish a Digital Safety Commission to regulate social-media companies and force them to limit harmful content online.
If the government legislation passes in Parliament, that commission would establish a set of regulations and have the power to levy fines against companies that break the rules.
The online harms bill also proposes creating a Digital Safety Ombudsperson that Canadians can bring their concerns to, as well as a new Digital Safety Office.
In a report published Thursday morning, the PBO says the Heritage Department estimates those new entities will employ about 300 people when they're fully up and running.
"The PBO estimates that from 2024-2025 to 2028-2029 the total operating costs will be $201 million, minus any possible administrative monetary penalties, fines … or regulatory charges collected by the commission, ombudsperson and office," it reads.
The report notes the government may collect revenue by fining companies that don't comply, but the estimated costing does not include an analysis of what that could look like.
"There is a high degree of uncertainty in the revenues that will be generated since it depends on the willingness of outside enterprises to follow the requirements set out by the commission and the Online Harms Act."
Costs may also be higher if the new entities decide to use outside consulting services or legal support, the report says.
The watchdog notes that the government's staffing estimates are based on other Canadian and international regulators.
Justice Minister Arif Virani introduced the online harms bill back in February, saying social-media giants must take accountability for harmful content.
But the Opposition Conservatives have been critical, saying it will create a new bureaucracy.
Conservative MP Michelle Rempel Garner requested the PBO analysis on the costs that would be involved in setting up the new system.
She has argued the government could instead modify existing laws and regulators to ensure Canadians are better protected online.
"The Liberals' controversial legislation has received significant criticism from concerned Canadians and raised alarm amongst legal experts and civil rights advocates," she said in a statement.
"Now we learn Trudeau will spend over $200 million of taxpayers' money on his useless 330 person censorship bureaucracy instead of using that money to hire police, protect Canadians and lock up criminals."
Virani's office has not yet responded to a request for comment about the costing analysis.
The file landed on his desk after being previously assigned to the Canadian Heritage minister, years after Prime Minister Justin Trudeau first promised to legislate against online harms during the 2019 election campaign.
Experts widely panned a consultation paper released around the time of the 2021 federal vote, which proposed a 24-hour takedown rule for content flagged as harmful — an approach they said risked censoring legal content and chilling free speech.
That feedback prompted the government to return to the drawing board and assemble a new expert advisory group.
The current bill has prompted criticism by civil society advocates and legal experts over its criminal justice reforms, which include proposing stiffer sentences for hate-related crimes and reinstating a controversial section of the Canadian Human Rights Act that would allow Canadians to lodge complaints about hate speech.
