The bill would continue to exempt Internet service providers from liability for copyright violations by their subscribers, requiring them only to pass on notices of violations rather than to take down offending material as required in the United States.
It would also allow consumers to record television and radio programs for viewing at a later time (time-shifting), but would prohibit people from keeping them in a personal library of recordings.
One online group, Fair Copyright for Canada, was set up on Facebook in advance to protest against the government's copyright plans and has 40,000 members.
The bill would reduce Canadians' individual liability to C$500 ($490) from a maximum of C$20,000 for making illegal copies of music or movies for private use.
Penalties up to C$20,000 per infringement would apply if digital locks were hacked, for example to make an unauthorized copy of a computer game.
These higher penalties would also still apply for posting music using the Internet or peer-to-peer technology, or for posting a copyright-protected work, such as a picture or video, onto a website such as Facebook or YouTube.
The bill would also make it illegal to provide, market or import the hacking tools used to circumvent digital locks.