Proceedings of the Standing Senate Committee on
Transport and Communications
Issue No. 41 - Evidence - October 23, 2018
OTTAWA, Tuesday, October 23, 2018
The Standing Senate Committee on Transport and Communications met this day at 9:31 a.m. to examine how the three federal communications statutes (the Telecommunications Act, the Broadcasting Act, and the Radiocommunication Act) can be modernized to account for the evolution of the broadcasting and telecommunications sectors in the last decades.
Senator David Tkachuk (Chair) in the chair.
[English]
The Chair: Last June, the Senate authorized the Standing Senate Committee on Transport and Communications to examine and report on how the three federal communications statutes, the Telecommunications Act, the Broadcasting Act, and the Radiocommunication Act, can be modernized.
This morning we continue our special study. I would like to welcome our witnesses. From the Canadian Communication Systems Alliance, Jay Thomson, Chief Executive Officer. Welcome. From the National Ethnic Press and Media Council of Canada, Thomas S. Saras, President and Chief Executive Officer. Welcome, Mr. Saras. Thank you for attending our meeting.
The floor is yours, Mr. Thomson.
Jay Thomson, Chief Executive Officer, Canadian Communication Systems Alliance: Thank you and good morning, everyone. The Canadian Communication Systems Alliance represents some 115 communications providers who offer Internet, video and telephone services to more than 1,200 communities across Canada. Our members connect Canadians in some urban areas, but mostly in rural and remote communities throughout Canada, including across the North. Often, they provide service in areas that do not and will not attract investment from the large providers.
We appreciate this opportunity to share some of our thoughts regarding the future of Canada’s communications legislation.
Of utmost importance, in our view, is that the legislation remains flexible enough to deal with continuing technological and market changes, and ensures that all Canadians benefit from competitive, innovative and affordable communications services, wherever they live in this country.
In that respect, we believe it is very important for members of this committee to appreciate that even in the context of rapid technological change, independent communications companies — especially those in rural and remote areas — will continue to play a vital and irreplaceable role in the communications distribution sector for a long time to come.
To ensure that this is the case, we have three recommendations.
First, Canada’s communications legislation should address the competitive problems created by industry consolidation and vertical integration.
As I expect members know, the largest cable companies in this country, Bell, Rogers, Québecor and Shaw, through Corus, also own almost all of the Canadian television services that they and our members carry. Bell and Shaw own the satellite delivery systems. In many cases, the large communications companies own the fibre transport networks. That is, the large, vertically integrated companies in this country control all of the upstream inputs to the businesses of our smaller, independent members, their direct distribution competitors.
Our members’ most pressing concern on the broadcasting side is the potential for anti-competitive behaviour by those large, vertically integrated companies because of their market dominance. Such anti-competitive behaviour can limit the communications choices available and frustrate competition, innovation and affordability of services in the smaller markets which our members serve.
Indeed, the CRTC has found as fact that the large, vertically integrated companies have both the incentive and the ability to act anti-competitively in their broadcasting activities. In 2016, the CRTC implemented a binding industry code, known as the Wholesale Code, to limit such behaviour.
It would likely not surprise you that the large companies do not like the Wholesale Code. In fact, as you likely have heard, Bell successfully challenged in court the basis on which the CRTC first established that code. Fortunately for us, in 2017, the CRTC imposed the key provisions of the code on the vertically integrated broadcasters as conditions of their broadcasting licences. Those conditions of licence remain in effect until at least 2022, notwithstanding the court’s decision at the beginning of this month.
Elimination of the Wholesale Code’s protection would be disastrous for smaller communications companies and the customers they serve.
Therefore, and regardless of the current practical impact of the court’s recent decision, we ask that the Broadcasting Act make it perfectly clear that the regulator has the power to limit anti-competitive behaviour by the large, vertically integrated companies, whether through something like the Wholesale Code or by using other means.
Our second recommendation is that the legislation should preclude the possibility of ISPs, Internet service providers, being required to make financial contributions to support the creation of Canadian content.
In our view, any benefit that might flow from requiring ISPs to contribute to Canadian content production would be greatly outweighed by the negative impact it would have on the provision of affordable broadband Internet services to all Canadians, wherever they may live.
It is universally accepted that, because of already high capital and operating costs due to location and low population density, ISPs serving rural and remote areas need government support in order to provide or extend broadband Internet services in their communities. Absent such government support to supplement what local providers can invest from their own resources, there is simply no business case for making broadband available in many rural and remote areas of this country.
As is the case with many other goods and services they rely upon, Canadians living in remote and rural communities typically must pay more for their Internet services than Canadians living in urban markets.
Therefore, any requirement for ISPs to allocate revenue to support Canadian content production would not only divert money away from investing in broadband rollout to improve services to many unserved and underserved communities, but could also increase the cost of Internet services for Canadians living in those communities.
Our third recommendation is that the legislation should promote the competitive delivery of broadband services, including mobile services, especially in rural and remote markets.
Perhaps the greatest challenge most of our members face today on the telecommunications side is their inability to offer wireless voice or data services to their customers. This means that, while Canadians are streaming more content to more devices, those living in many of the markets our members serve lack a choice in wireless providers and miss out on the benefits of competition.
The current Telecommunications Act identifies nine public policy objectives. Without discounting any of the other seven, I’d like to emphasize the importance of maintaining two of them, particularly subsection 7(b), which speaks to rendering “. . . reliable and affordable telecommunications services of high quality accessible to Canadians in both urban and rural areas in all regions of Canada . . .,” and the objective in subsection 7(c), which, in part, speaks to enhancing the competitiveness of Canadian telecommunications at the national level.
I emphasize keeping these two particular objectives because of the regulatory and policy decisions that could and should flow from them. One of those decisions should be the introduction of a mobile virtual network operator or MVNO model, to promote both wireless competition and the availability of wireless services in rural Canada.
Current availability of the MVNO model in the U.S. has created a $20 billion market which offers many attractive packages there and alternatives for both residential and business customers. The MVNO model could do the same for Canadians, if it were permitted here.
Finally, in order to promote access to reliable and affordable broadband Internet services, particularly in rural areas, we recommend that the Telecommunications Act be amended to authorize the CRTC to act as the single regulator for all support structure attachments.
To deliver their services, communications providers must attach their wires to support structures such as telephone and hydro poles.
Currently, the CRTC sets the rates for attaching to support structures owned by federally regulated telecom companies, while provincial utility regulators set the rates for provincial hydro-owned structures. The rates the provincial regulators set are escalating dramatically and can be as much as four times the rates that the CRTC sets. This increase in our members’ operating costs, which results from that differing rate-setting treatment, has become a real threat to the success of the federal government’s rural broadband initiative.
Unlike the CRTC, the provincial regulators have neither the expertise to set support structure rates nor the mandate to advance broadband connectivity for all Canadians. That is why the CRTC should be the single regulator for all support structure attachments in Canada.
Members of the committee, those are my comments. Thank you for your time. I would be happy to try to answer any of your questions.
The Chair: Thank you, Mr. Thomson. Mr. Saras.
Thomas S. Saras, President and Chief Executive Officer, National Ethnic Press and Media Council of Canada: I want to thank Mr. Thomson for his presentation. My presentation will not be about technical details. I am appearing on behalf of about 170 members of ethnic radio and television programs. Very few stations belong to the ethnic communities. My organization, usually, as you likely understand from the title, represents the ethnic media and ethnic publications. We have about 850 publications members from all over the Dominion of Canada and about 150 members and broadcasters in radio and television.
I came to see you today because I want to bring to your attention and also ask you to change a few things in the daily life of these people.
They have to work with big corporations, the ones who got their licences from the CRTC. Unfortunately, they have to work according to the rules those corporations are imposing upon them.
To give you an example, a broadcaster in the Afghani language in Toronto got a time slot from midnight to two o’clock in the morning, and he had to pay $500 for every hour. The problem is to pay you $500, how will I get that amount if you put me in a slot from midnight to 2 a.m.? Who will advertise within that time slot for this program? We are facing this on a daily basis, either on the radio or on television.
Keeping in mind that we are a multicultural society where multiculturalism is the official policy of the country, I believe that it is time for the law-makers to change a few things and see the market with a broader eye and also look at the way Canadians are getting their own news, news about the Government of Canada or international news.
Mr. Thomson referred to rural Canadians. This is another problem. There are people from all over the world living in areas outside of the big metropolitan cities, and they need to get information about life, culture and views in Canada on a daily basis. They don’t have this ability because there are no networks that can serve them. No big network, not Rogers, Shaw or anyone else, is giving time to ethnic journalists in radio or television. As a result, these people are staying there, and for many years they don’t even know what is going on in the country. I believe this is a serious matter not only for them but also for Canada.
Besides that, the current law deprives them of a basic right, the right to know, the right to learn and the right to understand and get the news in a language that they best understand. I believe this is the most serious problem the industry and the sector are facing.
In today’s culture, the way the structure of our industry has been set, most of the radio and television stations are in the hands of a very few Canadians or corporations, and they control the life of all of us. They decide what they will put in their programming and how they will present it to the people. The result is that this affects everyone we call a new Canadian or someone who came to this country a few years back and is still using his mother tongue from when he came to Canada.
This is my main concern. I want to bring that to your attention.
Another thing is that the people with the licences for radio stations give the program to one man who wants to broadcast in a language other than English or French, and he has to sign that contract. That contract states that during his hour of the show, the broadcaster or the corporation has the right to put three, four or five government advertisements in the show in his own language. This means he will have to translate the message and put forward the message during his time on the air, but he will not get a penny from the government for carrying this advertisement.
This way, he will never succeed in responding to the needs of whatever he is doing because the money is going to go to the broadcaster, the corporation, and he is just giving out the message without any other reason.
I believe those are basic things that the committee has to take into consideration to ensure that, eventually, we can change the culture and change the way we are doing this business. Otherwise, they cannot continue this way.
A new immigrant usually faces many problems. The people who are involved in radio, television and print in other languages are people who were journalists back home. For whatever reason — either because the government went against them or because they had no way to survive there — they left and came to Canada. They love their job. They try to survive in the job, and they try to inform their own people and their own communities about what is going on, but, at the same time, in a free country like Canada, they will do whatever is possible to bring to their own people the benefit of that democracy our system is giving. The only problem is that, financially, they cannot withstand those things under the circumstances.
Honourable senators, Rogers in Toronto has 16 or 17 radio stations that they own. They have the licence. They have licences for seven television stations. They have applied for another five now, I believe, next month. They own three licences for 10 years, Omni 1 and Omni 2 for the so-called multicultural channels. Two years ago they fired 280 people from the multicultural communities. They changed the nature of the channels and inserted sports in English or French.
About 35 or 40 per cent of our population don’t speak English or French, or they don’t come from cultures that are familiar with the Western world. Most of all, they need the ability to know about the culture and the political structure of the country and to know about democracy.
I am making this appeal to you for the future. I trust that you understand and realize the need for those things to be done. Thank you very much.
The Chair: Thank you.
Before we go to our list, Mr. Thomson, can you give me an example of the kind of community that your companies that belong to your association would serve? Also, what is an MVNO model?
Senator Dawson: That was my question.
The Chair: There are a few people who watch this, and I am as clueless as they are, so I am a good person to ask.
Mr. Thomson: Some of the larger communities our members would serve include Regina, Brandon, the outlying areas of Quebec City. Some of our members are in Toronto, but for the most part we are in the areas outlying the major centres. This could include Moosonee, Iqaluit, the interior of British Columbia, smaller communities on Vancouver Island and southwestern Ontario as well, such places as Oxford and Zurich.
The Chair: Are you a cable provider or telecom or both?
Mr. Thomson: Our organization was formed 25 years ago to represent the smaller independent cable television companies, but as the industry has evolved and cable companies have moved to become Internet providers and also telephone providers — and telephone providers have moved to become Internet providers and cable television providers — we represent companies that provide all three of those services.
To move to your next question, they would also like to provide mobile phone service, which they typically can’t do right now because they cannot afford to buy spectrum like the large players do. The large players don’t make the large spectrum available to smaller players to lease so that they can offer competitive service in their own markets.
What the MVNO model would do is require the large providers to open up their networks to allow smaller providers to lease components of it and therefore offer those services to their customers. The smaller providers would not have to invest in spectrum and infrastructure, which they can’t. They can’t afford to do that. However, they would be able to get access to infrastructure in order to then offer services to their customers.
The Chair: Okay. Mr. Saras, I would like the same kind of clarification. When you talk about the ethnic press, do the ethnic companies have their own cable channels through the CRTC, or do you use the community channels that are provided by Shaw, in my case in Saskatoon, perhaps Rogers here in Toronto and Ottawa, and you get pieces of it for ethnic programming that you pay for? Is that how it works?
Mr. Saras: They are getting one hour, half an hour weekly. I don’t think they can do more than an hour per week in their own language. Of course, they have to pay whatever the company is charging them. This is only for the big communities, for metropolitan Toronto, Montreal and Vancouver, where there is a concentration of new immigrants in their communities. They can do that. But in smaller communities, there is no way that someone can produce a program and also buy the program from the company. They are asking an enormous amount of money and putting whatever they want.
The way our democracy works, it gives us the ability of free expression. When we bring someone here either from Southeast Asia or from Europe and he doesn’t speak either of the official languages, he speaks his own language, I don’t understand why he doesn’t have the ability to get to learn the news in his own language. It is part of the system.
The Chair: Thank you very much. I am intrigued by both your presentations.
Senator Cormier: Thank you very much for your presentations.
[Translation]
My question is primarily for Mr. Thomson. Thank you for the work you are doing to make broadband accessible in very remote regions. My question is about your second recommendation, which is not to require Internet service providers to contribute to the creation of Canadian content. Among your members are Acadian Communication Limited, located in Chéticamp, Nova Scotia — a community I am very familiar with — where Canadian content is essential to the community’s preservation of culture, identity and economic and social development.
Can you elaborate on the reasons why Internet service providers should not be required to make financial contributions to Canadian content? Does that apply to all providers? Finally, what kind of cooperation is there between your members that are located in those small regions and, for instance, local cultural industries that help discover Canadian content?
[English]
Mr. Thomson: Thank you for the questions.
We recognize that as the industry changes and the environment changes, there is an ongoing need to find ways to support the production of Canadian programming and to make it available and discoverable by Canadians.
Unfortunately, the easy answer, for some, to that changing environment, in order to find ways to continue to support Canadian content, is to look from the existing players to whoever else might be out there that could potentially make a contribution. The argument they make is that the Internet is a delivery system for broadcasting, without recognizing that the Internet is also a delivery mechanism for all kinds of other programming, content and uses well beyond the delivery of the video type of programming.
They say it’s a duck and should be treated like a duck, but the Internet is not a duck, it’s a space ship. There is no connection, really, between cable television companies and what they do to deliver Canadian programming and what Internet service providers do with respect to all kinds of content.
The concern is that attaching a contribution regime to Internet service providers would increase their costs, particularly in the smaller markets, and not really be appropriate because it would undermine the delivery of other kinds of content available on the Internet.
You asked about the distinction between our smaller and larger members. In principle, we are opposed to an ISP contribution regime. In practice, we would admit that exempting smaller, independent players from that regime would address the concerns we have about the impact on rural broadband.
Your other question was about the contributions made in smaller communities.
Senator Cormier: The relationship between cultural industries and your members.
Mr. Thomson: In many ways, because our members are very locally based, they are plugged in very closely to their cultural communities. They also, in many cases, operate a community channel which provides access to opportunities for volunteers in the community and opportunities to learn about TV production and to communicate with community members on issues of importance, whether political, social or cultural.
[Translation]
Senator Cormier: Previous testimony we have heard seems to indicate that it has become more difficult to distinguish content vehicles from content producers. In other words, the main cable companies are providing more and more content, and the distinction between the vehicle and the content has become less clear.
As for the issue of requiring providers to fund Canadian content, there is a logic that I think comes from that change to the system. Right?
[English]
Mr. Thomson: With respect, I would disagree in terms of the melting of the distinction between content and delivery. I would suggest that it’s the exact opposite and that we still have a system whereby content gets produced and then delivered, and that the content producers — the creators of the content — are looking to whatever opportunity they can find to make that content available and are therefore searching across all kinds of media and distribution mechanisms in order to do that.
There is no longer, as there has been in the past, the close connection between content and distribution because of the closed nature of the cable industry, where the regulator was able to impose obligations on the distributor or the cable company because they were so closely tied into the regulated system.
The Internet is outside that regulated system and is really just a delivery mechanism without any reference to what kind of content is being delivered. It’s back to questions about net neutrality, which I know this committee has focused on, and because of net neutrality, that actually separates content from distribution, in my mind.
Senator Wetston: So, Mr. Thomson, should the Internet be regulated?
Mr. Thomson: It’s a very big question. The Internet is regulated.
Senator Wetston: Take all the time you need.
Mr. Thomson: The Internet is regulated and is subject to the laws of general applicability. Internet providers are subject to laws that relate to any other Canadian company.
Senator Wetston: My question is, should it be regulated like a utility? Should the CRTC regulate the Internet?
Mr. Thomson: So the CRTC regulates the Internet in terms of its imposition of net neutrality obligations. If the question is whether the CRTC should regulate the Internet with respect to content delivery, our answer is definitely no.
Senator Wetston: Let me ask you a question about market power. I notice you avoided completely any reference to the Competition Bureau and the Competition Act and its important responsibility with respect to anti-competitive behaviour and dealing with market power associated with corporate concentration. You have avoided that, probably purposefully; or do you not believe they have a role?
Mr. Thomson: Historically, the Competition Bureau has ceded its jurisdiction in competitive questions to the CRTC when it relates to companies under the CRTC’s jurisdiction. Frankly, the bureau’s processes and focus don’t lend themselves to addressing the issues that we’re concerned about; the CRTC is really in a much better position to do that.
Senator Wetston: Can you help me with that?
Mr. Thomson: The CRTC regulates the entities that we wanted to deal with. They come before the commission every few years for licence renewals. They are subject to the commission’s regulations and dispute resolution process when there is a battle between a cable company and a programmer. The commission has years and years of experience dealing with these. It just doesn’t have the teeth to do it.
Senator Wetston: I will ask Mr. Saras a question and then come back to you.
I found your presentation very interesting. Obviously, multiculturalism is important in Canada, and we have a lot of ethnic groups to deal with. I think in Toronto alone there are 200 different languages and dialects spoken. Can you help me with the practicality of how to address this issue to ensure that ethnicity is addressed through broadcasting and other means?
Mr. Saras: For the past 10 years, my organization has worked with various communities, and we are accepting journalists that are coming to Canada. There are about 287 publications in various languages printed in Toronto. There are about 200 publications in various languages printed in Vancouver; in Montreal there are 178 or 179; in Alberta, about 80; and in Manitoba, between 60 and 70.
The reason I cannot give you the exact number is very simple. Some of those publications are dying overnight, and some are born overnight. The fact is that they cannot concentrate in a market that is very small, and if the market cannot support them economically, they cannot sustain themselves.
Senators, 30 or 40 years ago, we used to get a number of advertisements from the Canadian government that went out advertising government programs. Some of those advertisements were going to the ethnic press. In the last five years these advertisements went down to zero. Last year, this year, the previous year, we did not receive even a penny.
In the spring the present government promised an amount of $50 million in the budget to help the so-called community papers, which include the ethnic press. Unfortunately, as of today we haven’t received a penny. When I made inquiries to the officials about this supposed $10 million a year for five years, $50 million in total, they told me they have no idea. I made inquiries with the office of the Minister of Finance, and I haven’t yet received anything back.
It seems that the program has died. It was in the budget — it was approved in the budget — but I don’t know what happened after that, and the program stopped.
With the help of Canadian Heritage, my organization is organizing educational seminars to support these people. We bring in professionals from various schools of journalism, and they teach Canadian journalism and Canadian law, but this is only in some areas, for example in Toronto where there is a concentration of people. We cannot bring 200 people from Montreal; it is expensive, and nobody pays. Neither from Vancouver.
There are many, many problems, and at the same time I want to bring to your attention a very serious matter. Foreign governments are funding Canadian publications. If that happened 20 years ago, everyone would be very concerned that foreign governments are giving money to Canadian publications to get their message to Canadians. Now you have governments, like the Italian government, giving a lot of money to Italian publications in Canada, and the same thing with the Chinese government. There are papers that are produced in China that are transferred and reproduced in Canada, and money also flows with that.
There are others. I don’t want to go into them one by one, but those are very serious problems. We are a divided society. We have so many problems, and yet we are unable to understand what exactly our roots are and what exactly we are facing.
Toward the mainstream media, as Mr. Thomson said — Mr. Thomson referred to volunteers. It’s another point that is unacceptable. Young Canadians, Canadian-born children from the ethnic community, finish school and then go to one of the Rogers channels — excuse me for referring only to this company, but it’s the one that gives me trouble — and they stay three, four, five years. The company promises them, “You volunteer, and eventually we are going to hire you.” They spend three, four, five years, and they don’t get a job. This is slavery. They are working four or five years, young kids, in a big corporation without pay, and finally the company will say they received Canadian experience.
The Chair: Thank you, Mr. Saras.
[Translation]
Senator Miville-Dechêne: Welcome, I have a clarification question for you, Mr. Thomson. You talked about the Wholesale Code. I would like to know how that code benefits small and medium-sized providers like you in the market. I did not understand from your presentation what that leads to. Do you want to keep that code fully or you want to transform it?
[English]
Mr. Thomson: By way of background, the relationship that our members have with the large, vertically integrated companies is that our members buy programming and then retail it to their customers. They buy programming from Bell, Rogers and Québecor in terms of channels that those companies offer, whether a sports channel or a news channel, whatever. That’s a wholesale relationship. And then our members retail those services to their customers.
The prices that our members pay to access those channels is negotiated.
Senator Miville-Dechêne: Beforehand. So you don’t have to negotiate it.
Mr. Thomson: We negotiate it. We have to sit down with Bell and negotiate the price and terms of the contract in order to carry TSN, for example. Because we are small and they are big, the classic arrangement at the negotiating table is that they have all the power and can insist on terms that will benefit them and not necessarily us or our customers. They can insist on tying their services together — if you carry TSN you have to carry CTV News; if you carry X, you have to carry Y. You have to put them together in this package because it’s the most popular package. You have to charge this rate for it.
The Chair: Just like they do to customers, right?
Mr. Thomson: We are treated in a similar manner, yes.
The Chair: They have all the power, exactly.
Mr. Thomson: What the Wholesale Code that the CRTC established does is set parameters for negotiations. It says you can’t insist on tied selling;you cannot insist on having your service in a particular package; you cannot insist that it not be made available in small packages or on a stand-alone basis, which they would do if they were able.
Senator Miville-Dechêne: But the pricing is left to negotiation?
Mr. Thomson: The pricing is left to negotiation, but the Wholesale Code also provides that the rates have to be reasonable and defendable in the marketplace. So if it comes to a dispute, which the CRTC will then deal with, the CRTC will look at what the market will bear and what other prices exist in the market and decide whether the rate is fair or not.
Senator Miville-Dechêne: I suppose it’s the same kind of arrangement that exists in what is called in French the ERMV, the American system that you —
Mr. Thomson: The MVNO.
Senator Miville-Dechêne: Yes. I’m wondering what would prevent the organization from renting their equipment to you by setting a price that is so high that you wouldn’t be able to use it. Is that what is happening in the U.S. — they are controlling the prices? I’m a bit surprised.
Mr. Thomson: In the U.S. there seems to be more of an openness to the model, and the larger providers recognize that there is a wholesale business opportunity to make their spectrum available to smaller providers. It’s a business opportunity for them. Here it appears the larger providers see it more as a competitive threat. Therefore, while they could negotiate with us, either they won’t at all, or if they do they will insist on prices that are just unbearable for our members.
Under this model we are proposing, the CRTC would actually regulate this relationship between the smaller providers and the larger providers to ensure that there are fair rates and terms, similar to the way in which the Wholesale Code applies to programming.
Senator Dawson: First of all, I want to apologize for being absent last week.
[Translation]
I want to congratulate Julie Miville-Dechêne for her election to the executive branch.
[English]
I think that this morning’s presentations are a good example of how we will pretty soon have to start to narrow the spectrum of our study. Even though I’m fascinated by issues of multi-language and am obviously very interested in the MVNOs of this world, somewhere down the road we will have to focus on that.
My question addresses the elephant in the room: money. These are profitable companies. We give permits to them, and they want to decide how to share it. They don’t want to share with Senator Cormier because they don’t want to invest in culture in his community. You don’t want us to charge your ISPs with a part of the bill so that Netflix and Amazon pay their part of the share of cultural production in Canada. Basically it is the elephant in the room — the sharing of money, the big ones, the small ones, the non-profit and the regional.
If it’s not going to be you or the ISPs paying for these costs, who will?
Mr. Thomson: Just a point of clarification, if I might. With our position, the Internet service providers shouldn’t be making a contribution to the production of Canadian content, but the Netflix and Amazons of the world who are in Canada making money from Canadians and providing programming services here should. We support the notion of a level playing field in that respect — so they should make contributions as other programmers like them make contributions.
It ultimately comes down to a balance on where the money is best allocated. Our argument to you is that given the need to roll out broadband services across Canada into areas that don’t currently have it or where the service is not good, on balance a finite amount of money from our members should be reinvested in their communities to extend broadband services, as opposed to being invested in Canadian content. It’s one or the other because it is a limited pool, and we have to decide where it will best support Canadians.
Senator Dawson: You are given permits to make money, and we are saying some of this money should be reinvested. You say you are reinvesting it in broadband to make more money. I think Senator Cormier is saying that you should, at the same time, be investing in developing cultural content. I think most Canadian production companies would say we want to be able to compete with the Netflix of the world, but we need money to do that. You are saying not to take your share of the money, and that’s the elephant in the room. Someone has to decide, and that will be our challenge: How do we share that cost and money?
You use terms like “provide delivery services.” Well, delivery service is an objective of selling it to make money, and I’m saying that permit was given to you in exchange for participation in the community, yes, and expansion of the service is nice, but the objective of the expansion of the service is to make more money, and I’m just saying that some of that money should be passed on to the production companies of Canada.
I’m just saying we still have to find that money. If you don’t want to take part of it, how do we tax the other guy so that they get to pay for it?
Mr. Thomson: I recognize the challenge. I recognize that it’s going to involve some new thinking and looking to other sources potentially for support, but again it comes back, on balance, to the fact that there is a finite amount of money in the system; where is it best allocated in order to best serve Canadians?
Senator Gagné: Thank you for your presentations.
In Canada, we have different approaches in offering Internet services to rural and remote areas. For example, we have municipalities that operate the utilities that provide the Internet services within their communities, such as Stratford, Ontario; Olds, Alberta; and Thunder Bay, Ontario.
We also have the Eastern Ontario Regional Network where a group of municipalities has developed regional telecommunications networks, and in Manitoba there is the city of Morden. With 8,000 people, it is located 100 kilometres southwest of Winnipeg, and last spring they started phasing in what they call Morenet. It’s a 5G Internet service built and maintained by the city through property taxes and offered at no extra cost to the user. The user will pay $400 for installation and for the router and that’s it: 5G in a small community.
It was quite interesting when they discussed this with one of the city’s representatives. They mentioned, first of all, it’s very good for business, and second, they have a very strong immigrant program, and it’s a way to make sure that the new immigrants integrate well into the community but also always stay connected with their home country. It’s part of their strategy.
I was wondering if you could comment on these different approaches. What is your view on this?
Mr. Thomson: Thank you. We embrace all of these kinds of approaches because we need cooperation and we need partnerships involving as many players as possible that can make a contribution in order to find the best way to extend service to Canadians who don’t have it now. Whether it’s working with municipalities, working with other provincial organizations, the private sector, the public sector or across jurisdictions federally, provincially and municipally, these are all areas that need to be explored to ensure we have the resources, both financial and human, to achieve the goal.
I would say that your references to Thunder Bay and Olds, Alberta, are areas in which our members are located. Tbaytel is a member, as is Olds Fibre, and they are working within their communities to embrace the opportunities they have.
Mr. Saras: Well, I want to answer this question by going back to one of the answers Senator Dawson received.
Money can be found by taxing the big elephant corporations, like Amazon and Google. The Government of Canada spends $350 million on advertising programs to Google and to Amazon, and both are American companies. They don’t pay tax. We do have corporations here. We do have services here, but we don’t receive a penny from the Government of Canada. Why can we not tax Amazon and Google and other big companies and use that money to better the service we are doing up here?
To your question, senator, I want to tell you that the people who are in those areas, they are forgotten by the guard if they don’t speak English or if they are living in an area that is out of their own touch. They don’t know anything. This is the reason we are coming here and saying that it is time for the CRTC to change the culture. It’s not only the businessmen in the francophone and anglophone communities. The ethnic communities should also start building themselves in order to better serve the community.
I am an old man. I have been in this profession for 55 years. I have seen so many changes in Canada, but we have failed up to this point. We are bringing people here and we promise them a paradise. They are coming here, and sometimes they are facing hell because they don’t understand, and no one wants to help them. Please, gentlemen and ladies, please, it’s time. I believe the right time is now. You can make the difference.
Senator Galvez: Thank you very much for this interesting conversation we are having. Every time we listen to a new witness, the situation gets more complex.
I have a question for Mr. Thomson and one for Mr. Saras.
I agree with your third recommendation that the legislation should promote the competitive delivery of broadband services. You suggest that the Telecommunications Act be amended to authorize the CRTC to act as a single regulator for all support and structure attachments. However, you then explained that currently the CRTC sets the rate attachments to support structures owned by federally regulated telecom companies while provincial utility regulators set the rates for hydro-owned structures.
This is new to me. Can you explain that a bit more? We are just talking about the hardware, the tangibles, the structures. Can you explain how this works presently and why it is like that?
Mr. Thomson: Prior to 2003, the CRTC acted as if it had jurisdiction over telephone poles and provincially owned hydro poles. No one questioned that, and for decades it regulated the rates and the terms for telephone companies or other telecommunications companies to get access to those poles.
In 2003 there was a court case that made it all the way up to the Supreme Court. The Supreme Court ruled that there is nothing in the Telecommunications Act that gave the commission power over the provincial utility poles. It still had power over the telecom poles because it was a telecom regulator, but there was nothing in the act that specifically gave it jurisdiction over provincial hydro poles. At that point, the jurisdiction moved to the provinces to deal with those poles, and the provinces took on that role and deal with poles in their own different ways.
The Ontario Energy Board is the regulator for hydro poles now in Ontario. They recently approved an increase in the rates, from $20 to $40 — a 100 per cent increase in the pole rates, which is problematic. That means that it is an increased cost and an ongoing operating cost for telephone companies and telecom companies, like our smaller members, in order to provide services to their customers. That is why we are saying the Ontario Energy Board is the best example because it is the most recent one. It is focused on energy prices. It doesn’t have the expertise to deal with attaching to hydro poles. It doesn’t have any mandate to deal with that broader policy objective of extending broadband services across the country, so it doesn’t pay attention to those matters, but it sets a rate. The CRTC has 40 years of experience in this area and has the mandate to deal with telecom and broadband issues. Therefore, our argument is that the act should say that the CRTC has jurisdiction over all poles.
Senator Galvez: Can I ask you, chair, to ask the analysts to make a document explaining this situation? Because I think this is important. Money and rates are involved, and also the poles and the way it is working right now.
Mr. Thomson: We would be happy to work with you to provide you that information.
The Chair: That would be terrific if you could.
Senator Galvez: I come from Peru. I speak Spanish. I lived in Italy. I speak Italian. I like to be in contact, and I like to know what is going on in Latin America, and I am a fan of soccer. If I want to know anything, wherever I am in the world — even when I visited the North — I go to the Internet and I read. I am worried about what is happening in Brazil right now with the next election. I read Portuguese. I have access, through the Internet, to newspapers, TV and everything. What is the problem for these people? Why can’t they get access? Is it because the Internet doesn’t get there? What is the real problem, and what is the most efficient way of solving this problem?
Mr. Saras: Senator, people are coming to Toronto. Sometimes they have two, three, four kids. They work in jobs that pay $14 per hour, the minimum wage, for many years. They have to educate themselves. Do you think it is easy for them to have an expense of $200 every month to pay for the Internet or to buy a computer or anything else?
Let’s be realistic. I am an immigrant. You are an immigrant. I have been through this hell, and you have been through this hell. I cannot accept this question from someone who suffers the same thing as I suffered. People are coming here, and some of them don’t know how to deal with their own kids. It is an entirely new culture. Don’t tell me that the Brazilian culture is equal to Canadian culture. It is entirely different. It is a new planet. They are coming to Canada, and they don’t understand many things because down there are different things. I come from Greece —
Senator Galvez: Don’t get me wrong. I just want to solve the problem, but to solve the problem we have to know what the problem is. You are saying it is that the immigrants that arrive don’t have enough money to get a connection to the Internet.
Mr. Saras: Yes. Correct.
Senator Galvez: Okay.
Mr. Saras: Let me tell you something. With respect to my household, I pay about $300 every month for the telephone, Internet and TV. For the last 40 years, the CRTC has been giving licences to valued businessmen, and they are bringing channels directly from other countries, from Brazil, Greece and Italy. They are specialty channels. To get that channel you have to pay $35 a month to have access to it.
Senator Galvez: I think the problem is not getting access to a program in a different language. I think what you want also is that the people here develop their own content, that is what you want?
Mr. Saras: Correct.
Senator Galvez: There is an issue with a higher Internet cost that not everyone can pay, and the other problem is that there are no funds for immigrants here to develop their content.
Mr. Saras: Correct.
Senator Galvez: Okay. I don’t think we are looking at all of that here, but it is important that we understand the problem. Thank you.
Mr. Saras: Thank you.
The Chair: I think it is very important.
[Translation]
Senator Boisvenu: I thank our witnesses. My first question is for Mr. Thomson. On October 2, the committee heard from Mr. Hutchison from the University of Toronto, who talked about wireless access. I would like to read to you what he said, so that you can comment:
The fact is that if you read independent studies of us nationally. . . we will be sitting, in various measures, at number 20 in the world.
— he is talking about wireless access.
We used to be down around number 30. We are not in the top tier when the OECD or Harvard or other organizations do national measures.
That ranking is a few years old. Where does Canada currently sit compared with other OECD countries in terms of access to wireless networks?
[English]
Mr. Thomson: I’m afraid I don’t have that information.
[Translation]
Senator Boisvenu: Mr. Saras, if I have understood correctly, foreign media are using Canadian media to provide opinions or their position on various topics. Did I understand what you said?
[English]
Mr. Saras: Yes. The ethnic media is the way that daily events in Canada are reaching the ethnic communities. For example, two years ago the government accepted 35,000 refugees from Syria. Yesterday I was with a gentleman from Syria who is the head of an organization. He told me that the biggest problem the community is facing is that many of the young kids that came to Canada will be illiterate because the government stopped helping them with money, and so on. These people don’t know what to do.
In the last few years, especially last year and this year, in the streets of Toronto, I found the number of people begging for money went up five to six times more than previously.
We brought people here. For one year the government supported them, and then they let them go on their own. They don’t know the language. They don’t know anything. They don’t even understand what is going on around them. The Syrian community doesn’t have even one publication or one radio program because they cannot afford it. They are not established.
[Translation]
Senator Boisvenu: Is one of its causes the fact that the government has not upheld its promise to invest $50 million in ethnic media?
[English]
Mr. Saras: Yes, I believe it is not only this one. The moment the ethnic press receives support and can sustain and continue. The whole industry is going into crisis, not only the ethnic press, but the Toronto Sun, the Toronto Star, The Globe and Mail, all the big publications of the country. It is the same for Quebec.
I want to remind you that last month the community papers of Quebec ran an editorial — all of them — accusing the Government of Canada of spending less than 2 per cent of its budget for advertisements to support the community papers of Quebec. This is even worse in the other provinces. If the government cannot stand to support the industry, what are we going do?
Remember the big crisis 10 or 15 years ago with the banks? The Government of Canada stepped in with $25 billion to support the banks. The same thing was done with GM. They gave them $25 billion. There are 1,000 papers and another 200 radio and television stations with more than 15,000 people making a living from this sector or industry. If we don’t support them, all of them are going down, and this will be another 10,000 people looking for jobs.
Senator Wetston: Mr. Thomson, I want to follow up on Senator Galvez’s question. CRTC jurisdiction, provincial regulatory jurisdiction, poles are obviously electricity distribution infrastructure for obvious reasons. I understand your statement.
Remind me of the following: Has there been any constitutional decision since the one you referred to regarding the constitutional authority over poles that you are aware of?
Mr. Thomson: No, there has not been, but we have done some investigation in that area, and we believe it is a jurisdictional issue that can be solved by giving it to the commission.
Senator Wetston: I understand that. I have some experience in that area myself. There are differing opinions about that, but that is not my point here.
I was trying to understand one thing about your suggestion. I thought the OEB did a major comprehensive review of the policy framework associated with attachments to poles. Isn’t that correct?
Mr. Thomson: It did undertake a lengthy investigation, yes.
Senator Wetston: It concluded that they had authority under a section of the Ontario Energy Board Act because it is part of the electricity framework and the extension of those services. I think that was one of the conclusions. But my question is this: I thought they relied on market rates and didn’t set the rates for those attachments. Wasn’t that the case?
Mr. Thomson: They did an investigation and looked at a number of different inputs and ultimately set the rate, yes.
Senator Wetston: No, I am saying they didn’t set the rates. They are relying on market rates. What I would like you to confirm is whether the OEB is setting those rates or relying on market forces to determine those rates. That is my question. I don’t have the answer to that, but I have some familiarity with it.
The Chair: That is in Ontario?
Senator Wetston: Yes, the Ontario Energy Board. You would have one in Saskatchewan as well.
The Chair: I don’t know whether we do.
Senator Wetston: I am sure you have something there.
The Chair: We have a Crown corporation.
Mr. Thomson: The rates are regulated. The notion of there being market rates out there is a question mark for me.
Senator Wetston: We will find out when you provide that document to this committee, and I will do my own investigation since I have familiarity with it. We will compare notes.
Mr. Thomson: Thank you very much.
The Chair: Mr. Saras, you mentioned Rogers and Omni. Was there a commitment by Rogers to provide a community service to the ethnic community as far as cable is concerned when they applied for the licence?
Mr. Saras: Rogers received from the CRTC two licences for Omni 1 and Omni 2, which are supposed to be multicultural channels serving only the various communities. After three years of service and by the time they received the licence, they made a business decision that the channels will be much more profitable if they changed to sports in English. So they fired all 280 people. Some of them were volunteers for five or six years and they worked for a short period of time until Rogers said that they cannot sustain them and they fired them.
Then they went back to the CRTC and submitted a new plan and said that, yes, in prime time we will broadcast sports, which are much more profitable.
They retained one or two ethnic programs with the big communities, namely the Chinese and Italian communities, in order to make more money and to keep the licence. They applied to the CRTC again for another five multicultural channels. Last year, I believe the CRTC gave them a licence for one year. Next month, they will have hearings to renew the term. Of course, I am the one who will stand against Rogers again next month. I will be in Ottawa for those hearings because this cannot be done.
It is very simple. This society is evolving. We should understand this. We cannot say that we are multicultural and talk about multiculturalism, yet we cannot provide anything to various cultures. We have to help these people integrate into our culture. By isolating them, they will never integrate.
I come from a culture and a society where in my very first years, I knew the hell of a civil war. Many times —
The Chair: Where are you from?
Mr. Saras: I’m from Greece. I lost sleep many times thinking about the future of this society. I hope neither you nor your kids will know those circumstances. But, please, we have to take action to ensure that this will never happen in this country. Thank you.
The Chair: Thank you, Mr. Saras. We have just had a good meeting. Any further questions, senators?
If not, gentlemen, thank you very much for a very interesting hour and a half.
Senator Dawson: I was absent last week, but I noticed that we were referred Bill C-64 on shipwrecks.
The Chair: It did get referred, yes. We will deal with that ASAP, I would think. It has precedence, so we’ll have to figure out what to do with the rest of the people we have invited for future meetings.
Thank you very much, witnesses and senators.
(The committee adjourned.)