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The proposed Safe Social Media Act is drawing sharp criticism over provisions that would allow Ottawa to impose fines exceeding 3% of a company's global revenue for failing to comply with new online safety rules.

Heritage Minister Mark Miller has said the legislation is intended to protect children online and curb the spread of graphic material, with enforcement relying on international cooperation and existing legal agreements to pursue judgments abroad.

The proposal risks becoming a major point of tension with the United States, where Secretary of State Marco Rubio has already suggested that Canadian attempts to regulate or censor American platforms could become a trade issue.

Beyond enforcement, the legislation could discourage investment and prompt technology firms to limit or withdraw services in Canada. Previous disputes over online regulation have led some platforms to block Canadian news content and companies have already signaled concern about operating under increasingly restrictive rules.

Supporters of the bill say stronger measures are needed to address online harms and hold large platforms accountable. As the legislation moves forward, it brings forth questions about its constitutionality, economic impact and international enforceability continue to surface.