Rehtaeh Parsons hanged herself in April and was taken off life-support three days later.
Her family alleges the 17-year-old was sexually assaulted by four boys and a digital photograph of the incident was passed around her school.
Ottawa and the provinces and territories released a report Friday that says the law as it stands doesn't go far enough to protect victims of this type of online exploitation.
"There is a gap in the Criminal Code's treatment of this conduct," the report says.
"The working group recommends that a new criminal offence addressing the non-consensual distribution of intimate images be created."
The new law would come with amendments that cover the seizure of items used in the crime, and restitution to compensate victims for any costs they bear to have photos taken off the Internet, the report adds.
It also recommends bringing the investigative powers of police into the digital age.
"However, any time police investigate crimes, many of which involve new technologies or crimes, they are mostly using investigative powers that are out of date and have been barely modernized since the advent of the Internet," the report says.
"The investigation of offences committed via the Internet, or that involves electronic evidence, would especially benefit from the availability of modern investigative tools."
Newly appointed Justice Minister Peter MacKay will now study the report.
"For my part, I will consider the report and its recommendations, which will help guide the way forward to ensuring our children are safe from online exploitation," he said in a statement.
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