THE STANDING SENATE COMMITTEE ON TRANSPORT AND COMMUNICATIONS
EVIDENCE
OTTAWA, Wednesday, September 14, 2022
The Standing Senate Committee on Transport and Communications met with videoconference this day at 6 p.m. [ET] to examine the subject matter of Bill C-11, An Act to amend the Broadcasting Act and to make related and consequential amendments to other Acts.
Senator Leo Housakos (Chair) in the chair.
[English]
The Chair: Honourable senators, I am Leo Housakos, senator for Quebec and chair for this committee. I would like to have my colleagues quickly introduce themselves, starting from my left.
Senator Pate: Kim Pate, Ontario.
Senator Miville-Dechêne: Julie Miville-Dechêne, Quebec.
Senator Dawson: Dennis Dawson, Quebec.
Senator Harder: Peter Harder, Ontario.
Senator Simons: Paula Simons, Alberta, Treaty 6 territory.
Senator Dasko: Donna Dasko, Ontario.
The Chair: Thank you, colleagues. We are meeting for the second time today to continue our examination of the subject matter of Bill C-11, An Act to amend the Broadcasting Act and to make related and consequential amendments to other Acts.
[Translation]
In our first group of witnesses, we have the pleasure of welcoming those who will be joining us in person and by video conference.
[English]
We’re joined by Mr. Tim Denton, Chairperson, Internet Society Canada Chapter; Len St-Aubin, Policy Committee Member and Former Director General, Telecommunications Policy, Industry Canada, who is with us via video conference; Matthew Hatfield, Campaigns Director, OpenMedia, also with us by video conference. We have with us John Lawford, Executive Director and General Counsel, Public Interest Advocacy Centre.
Welcome this evening.
Mr. Denton, we’ll begin with your opening remarks, followed by Mr. Hatfield and then Mr. Lawford. The floor is yours when you are ready.
Tim Denton, Chairperson, Internet Society Canada Chapter: Thank you very much. Good evening, everybody. I’ll read my speech off the computer. It’s more convenient if I do it that way.
Good evening, senators. I used to be a national commissioner of the Canadian Radio-television and Telecommunications Commission, CRTC, and spent a good portion of my career in internet governance institutions. The ISCC itself — the Internet Society Canada Chapter — is a network of volunteers concerned with internet policy. Many of us have served in senior positions in government. With me today, of course, is Len St-Aubin, the director of the Internet Society and former director general in the department of industry concerned with telecommunications, broadcasting and internet policy.
Here is what we believe: We oppose Bill C-11 because it embodies a fundamentally illiberal idea of communications, because it constitutes a vast overreach of governmental authority and because it threatens the engine of innovation and economic growth, which is the internet.
What we object to is the nearly boundless extension of governmental regulatory authority over communications. The bill excludes content that is predominantly alphanumeric. Otherwise and with only a few exceptions, it captures virtually all online audio and video.
In the annex to our formal submission, we have proposed changes to limit the harm that Bill C-11 poses. I would highlight in particular the following recommendations.
One, exclude from the act — and therefore from any regulation or obligation to contribute to Canadian content production — any online service that earns less than $150 million in Canada annually.
Two, exclude from the act all user-generated content. This does not exclude social media platforms that stream user-generated content and whose revenues exceed the $150-million cap that would be subject to the act.
Three, amend the policy’s objectives in section 3 to ensure that CRTC regulation respects user choice and recognizes that competition and market forces are contributing to achieving the objectives of the act. Bill C-11 implicitly assumes that in a large measure the burden of Canadian program production is to be taken up by foreign — read American — streamers competing with Canadian broadcasters. Yet nowhere in this bill do we read of competition and consumer choice.
Four, remove the amendments in clauses 7 and 8 of the bill so as to reinstate the current act’s limitations and parliamentary oversight safeguards on the authority of the Governor-in-Council to issue policy directions to the CRTC.
Bill C-11 is fundamentally flawed. Bill C-11 vastly exceeds the government’s stated objectives and then leaves entirely to the CRTC the ability to determine its own mandate and the extent of its intervention in the online economy and in Canada’s ability to access content of our choice.
In our view, Bill C-11 invites fears of undue and harmful intervention.
We believe that it is entirely possible to obtain a reasonable contribution to Canadian content from global streamers without Bill C-11’s massive intervention in the digital economy and in Canadians’ freedom to access online content of our choice.
Internet streaming is not broadcasting. Let’s look at two basic features of broadcasting. The first, which Bill C-11 retains, is that you broadcast by permission of the state. Broadcasting is a licensed activity, and the CRTC is the licensing authority. The second was a set of characteristics, business and technical, that limited who and what broadcasters were. Those characteristics were largely based on the scarcity of radio waves. Bill C-11 eliminates those characteristics nearly completely.
The assumption that justified broadcasting regulation was that a very few speakers would have a captive audience of many tens of thousands of listeners and, later, viewers. The direction of traffic was one way. The audience had highly limited choices.
In exchange for highly detailed regulation, the traditional broadcasters have benefited from a host of measures that have created a walled garden and sought to protect broadcasters from competition so they could fulfill their Canadian content and other obligations.
Bill C-11 declares all audiovisual and audio content on the internet to be broadcasting. It’s a kind of reverse takeover of the internet. The tiny Canadian broadcasting system can take on the world of the internet by the mere trick of redefining broadcasting. Bill C-11 is that bold and that absurd.
Bill C-11 is about protecting the economic interests of an obsolescent niche of Canada’s music and video industries. It is not about bringing broadcasting regulation up to date. It is not even about streaming. It is about controlling content on the internet, the persons who transmit content and what reaches the persons who access internet content.
Instead of introducing an actual online streaming act — one that would have considered the unique nature of internet-delivered content and the functioning of the markets for that content — Bill C-11 tries to stuff the most vibrant and adaptive marriage of technology and culture within a stultifying embrace of the regulated broadcasting system. Bill C-11 seeks to prolong and reinforce the supply-side dynamics of broadcasting regulation. Bill C-11 fails to affirm or even acknowledge the primacy of the audience and its right to choose the programming that suits it. Bill C-11 embodies a set of bad ideas that ought to be rejected.
In the time available, we’ve had to concentrate our comments on the essentials. Our formal submission covers other issues that are also significant, which you will have received earlier.
The Chair: Thank you.
Next up is Mr. Hatfield.
Matthew Hatfield, Campaigns Director, OpenMedia: Good evening. I’m Matt Hatfield, campaigns director of OpenMedia, a grassroots community of over 220,000 people in Canada who work together for an open, accessible and surveillance-free internet. I’m speaking to you from the unceded territory of the Tsleil-Waututh, Squamish and Musqueam Nations.
I’m going to recap some of Tim’s themes, but I’m here to speak for ordinary Canadian internet users. Because Bill C-11 was not written for us. Respecting the freedom of expression and experience of ordinary Canadians should have been the first principle of this bill. It’s not.
As the House of Commons has handed it to you, Bill C-11 continues to give the CRTC the power to set broadcast regulations that limit the posts of millions of Canadians if it chooses to. It gives it a carte blanche to demand every public playlist, feed and search result on our internet be adjusted to feature content the CRTC chooses and remove content it doesn’t. These enormous powers make the bill a breathtaking case of regulatory overreach unlike anything seen anywhere else in the world.
As Tim mentioned, Bill C-11 starts from a fundamentally wrong idea — that the internet is similar to traditional broadcasting and should be regulated in the same way. It isn’t and it shouldn’t.
Traditional broadcast was a radically top-down system. If you turned on your radio or television set, you could select between a few dozen programs that a small set of broadcasters had pre-selected for you, and that was that. That extremely narrow system led the 1960s Canada to develop the broadcasting content regulation that it did.
Does that system sound like the internet to you? Every day, each of us makes hundreds of choices between millions of channels and pieces of content online. That hasn’t made us a U.S.-dominated monoculture. It is the next incredible step in being a multicultural country. Young Canadians enjoy cultural content with roots all over the world from K-pop to telenovelas to Nordic crime mysteries and, of course, to a huge amount of content made here at home.
Many of us share our words and passion back onto the internet through the same distribution channels. We’re not passive recipients of the internet. We’re active participants in crafting the feeds we want, we follow the individual creators we like, and we use platforms like Patreon or YouTube to contribute to and earn revenue from our fellow internet users.
Too much of Bill C-11 is written from a position of fear of user choice and a desire to turn back the clock on how Canadians receive information and communicate. That has led to an enormous overreach in what the bill attempts to regulate, overreach we hope you will now correct.
First, the posts of ordinary internet users must be plainly and fully excluded from regulation as broadcasting. Some people will tell you section 4.2(2) does this. It doesn’t. The three criteria in that section — whether content makes anyone revenue, or (not “and”) whether it has a unique identifier, or whether it includes content that has ever been on a broadcast platform — are so broad that they include essentially all of our user audiovisual content on every platform.
Bill C-11 may not be intended to be a user-censorship bill, but unless you fix it, with the wrong government appointing the wrong CRTC, it could easily become one.
We recommend striking 4.1(2) and 4.2 altogether or much more narrowly scoping the criteria in section 4.2(2). Either way, it needs to be fixed now in this chamber before Bill C-11 becomes law. A policy direction from cabinet that sets limits can be easily changed or retracted. Exclusion of user content must be clear in the bill.
Second, Bill C-11 must not give the CRTC the power to manipulate the results of algorithms on platforms. We would never tolerate the government setting rules specifying which books must be placed in the front window of our bookstores or what kinds of stories must appear on the front pages of our newspapers. But that’s exactly what the discoverability provision in section 9.1(1) currently does. This dictatorial approach is not needed or appropriate. Striking the discoverability language in 9.1 while keeping the language asking platforms to showcase Canadian content would be a reasonable compromise. That change could make it easy for users to explore Canadian cultural content when we want to but not have our feeds overwritten by content the government chooses for us everywhere we go online.
Lastly, you must introduce a Canadian revenue threshold for which platforms are asked to pay into or produce for the Canadian content, or CanCon, system. It’s nonsensical for Bill C-11 to place obligations on platforms with a few thousand Canadian subscribers, but right now they face the same obligations as everyone else and they’re likely to opt out, blocking service in Canada. It would be a very cruel consequence of this bill for diasporic Canadian communities to be cut off from the invaluable cultural lifeline provided by foreign streaming services.
Since last year, OpenMedia community members have sent nearly 82,000 emails to our representatives on Bill C-10 and Bill C-11. I speak for them in saying we wish the House of Commons had done a better job of respecting our online expression and choices and appropriately limited the scope of Bill C-11. They didn’t. They let Canadians down. Now the baton has been passed to you. It is the Senate’s responsibility to pass amendments that do a better job of balancing between the bill’s aims and our fundamental rights. Thank you and I look forward to your questions.
The Chair: Thank you very much. Now, Mr. Lawford, you have the floor.
John Lawford, Executive Director and General Counsel, Public Interest Advocacy Centre: Thank you very much. The Public Interest Advocacy Centre, or PIAC, defines the consumer interest in broadcasting as ensuring that consumers benefit from access to a wide variety of programming in the broadcasting system that offers choice in an affordable manner.
Unlike in 1991, consumers now pay for almost all broadcasting, whether with money or with personal information, including online subscriptions, cable TV, video on demand delivered by a broadcasting distribution undertaking, or BDU, or over the top via the internet. Consumers are now a key stakeholder. We are equal in importance to creators, platforms and producers.
We believe granting the CRTC discretion to set financial and potential other obligations of online undertaking registrants, no matter their size or type, provided they are distributing programs which the CRTC decides to regulate, will be overbroad and involve even small users and creators.
To solve this problem, we support an amendment to the bill exempting online undertakings below a Canadian revenue threshold at $150 million and a separate revenue threshold exempting from regulation programs of users or creators who do not make more than $50 million for audiovisual or $25 million for audio-only content. These exemptions would be from the financial or other content conditions, and the thresholds would not affect the administrative or registration requirements.
Consumers naturally resist the insertion of CanCon in their automated plays or algorithmic suggestions of platforms such as YouTube, and digital-first creators are concerned that such discoverability tools will backfire and reduce their audiences.
PIAC believes that this user-generated content problem can be addressed by redefining discoverability as not just one concept, but two: static and dynamic discoverability.
Bill C-11’s only new mandatory broadcasting policy requirement is new section 3(1)(r):
online undertakings shall clearly promote and recommend Canadian programming, in both official languages as well as in Indigenous languages, and ensure that any means of control of the programming generates results allowing its discovery;
Clearly, discoverability is key to the drafters of this bill and must stay in some form. This policy objective mandates both static and dynamic discoverability. The first half could be satisfied by a banner on YouTube that simply links, upon a consumer click, to selected CanCon. It is static, unobtrusive and very likely unobjectionable to consumers, but still clearly promotes and recommends CanCon.
The second half of the new policy objective is dynamic. It requires artificial intelligence, or AI, prediction tools to insert a CanCon video or song into a user’s auto play feature or to dynamically suggest links. It is intrusive. It is disruptive to the consumer’s expectation and experience. It is overkill to achieve the goal of promoting and recommending CanCon.
It is even more intrusive than the exhibition requirements on traditional broadcasters because in the online world there is an abundance of consumer choice, not scarcity, where mandated exhibition makes much more sense.
Digital-first creators are rightly concerned that the bill’s requirement to use dynamic discoverability will backfire and actually demote the importance of — and likely user engagement with — their content as Canadian users who are involuntarily exposed to these discoverability links avoid or react negatively, thereby signalling to the AI, globally and in Canada, to demote that content.
The solution is to require only static discoverability tools and to require any exempted creator of Canadian content who wishes to have their content promoted, even by static discoverability, to apply to a new CanCon authorization authority, likely part of the CRTC. This will allow the smaller digital-first creators the choice to continue to operate untouched by the entire regime, which PIAC believes they want, or to have their content promoted in the limited sense of static discoverability.
PIAC recommends, therefore, amending section 3(1)(r) to remove the last 15 words, thereby directing CRTC to satisfy the bill’s discoverability requirement with only what we call static discoverability tools. Thank you and I await your questions.
The Chair: Thank you to Mr. Lawford and to all our witnesses.
I will start off the first round. My question is for the Internet Society Canada Chapter witnesses. In your submission to the House of Commons committee examining Bill C-11, you stated:
Internet streaming services are simply not broadcasting. A level playing field between over-the-air broadcasters and online streaming services is illusory.
Can you further expand on this statement?
Do you see Bill C-11 as an attempt to regulate the internet? If so, what do you see as the primary consequences of attempting to enact a bill whose primary objective, as you described it, is illusory?
Mr. Denton: The essential question. I’m going to refer in a moment to Len St-Aubin, whose ideas are more precise than mine, but I would simply say that the internet establishes a worldwide market in programming, video, sound and everything else. It exists. It is the main and real thing in the world today. The closed world of Canadian broadcasting is a national-based industry with extensive regulation to protect it from competition. This competition has arrived, and essentially Bill C-11 is a scheme to try to take things that are utterly different and somehow give them the same regulatory treatment. The internet does not really need regulatory treatment, and the broadcasting system needs to adapt to the internet, not the internet to the Broadcasting Act. I pass it over to Len St-Aubin for further precision.
Len St-Aubin, Policy Committee Member and Former Director General, Telecommunications Policy, Industry Canada, Internet Society Canada Chapter: Thank you, Tim. First, with respect to this whole notion of a level playing field, as we said in our submission, the concept is a myth. The internet and traditional broadcasting are fundamentally different markets, and Bill C-11 does not foresee a level playing field. It would not, for example, extend to online undertakings the kinds of market and content rights protections that apply to existing broadcasters, and nor should it. It also appears not to have taken into account the impact on traditional broadcasters of actually requiring foreign undertakings to compete with them for the most highly cultural, sensitive, expensive and subsidized Canadian content. In that sense, Bill C-11 kind of turns on its head decades of broadcasting policy by requiring foreign entities to compete with Canadian broadcasters.
You asked about why it’s so problematic. Bill C-11 reflexively applies to audio and video on the internet, which is arguably the most dynamic engine of innovation, competition, opportunity, economic growth and creativity. It applies to that engine policy and regulatory frameworks that were designed for 1950s radio and television. And then Bill C-11 leaves it to the CRTC to determine what online entities will be regulated, whether by category or by individual streamers.
In that sense, it’s the CRTC, not Parliament, that will determine the scope of regulation and therefore the extent of intervention in the internet market and Canadians’ freedom to access the content of their choice. The amendments we’re proposing are intended to mitigate those negative impacts of the bill.
The Chair: Thank you. My last question has to do with the CRTC chair, who came before this committee a while ago and was asked the question by Senator Wallin whether Bill C-11 was not regulating user content indirectly by compelling the platforms to do it. To that specific question, the commissioner responded, “You are right.”
What do the witnesses — and anyone is free to answer this — see as the likely outcome of this? How do you see user creators ultimately responding to this in their everyday activities, if you can give us specific examples?
Mr. Denton: I’ll speak from the experience as the CRTC commissioner. At the time, we dealt with whether the internet ought to be broadcasting back in 2009. Essentially, the bureaucracy seeks to fill up the last cubic inch of its regulatory authority with regulation. The tendency over time is for regulation to get more minute, more comprehensive, more exhaustive and more thorough. So, if the possibility can be foreseen now that the internet will be regulated as to content, you may be certain that it is already regulated as to speakers, who shall speak and under what conditions, and it externalizes some of the censorship to the Canadian Broadcast Standards Council, but it still regulates content. We can imagine a future, quite easily, where this regulation of content is more specific to individuals, more specific to what people might want to say and more exhaustive and comprehensive than it is now.
Mr. St-Aubin: If I were a producer, a digital-first creator of user-generated content looking at this legislation, I would be looking at choosing to upload my content from outside Canada. I would be looking at contemplating ways in which to avoid the kind of regulation that we’re talking about. As was said before, the notion that user-generated content is excluded is overtaken by all of the exceptions to the exclusion. Essentially, if you make any money, either directly or indirectly, from your user-generated content through any social medium, you are potentially regulated under this act.
If you are a Lilly Singh or one of the many Québécois or Québécoise artists creating for social media, you might be looking at finding a way to make sure your stuff is uploaded from outside Canada. That’s one thing. That is a significant impact on the future creativity of this country.
This piece of legislation really is intended to favour incumbent broadcasters and those traditional independent producers who supply subsidized content to them. It really was not conceived with the digital-first creators in mind — creators who are generating, in the thousands, revenues and audiences worldwide outside the framework of the Canadian content subsidized supply management system.
Mr. Lawford: I’ll say this is a correct answer for Senator Wallin, and in our view it’s gaslighting users to say, “You’re not regulated, but your programs are.” It’s like saying to a guitarist, “You’re not regulated, but you can’t use your guitar.” What can we do about that? My concern is that if it’s left in, there will be proceedings. It will take a number of years at CRTC, but they may have regulations that get into things like what appropriate speech is, how successful a station is, or whether there’s some sort of political bent that is not in favour at that time. It’s possible. But we will have to, in the meantime, recommend to users of YouTube that they self-censor, and I think they will do it even without our recommendation. That would be my concern.
Senator Wallin: Just a quick point for Mr. Denton. To begin, you were indeed a national CRTC commissioner. I agree with you that you can’t impose a legacy broadcasting regulatory system on the internet. That’s not the issue. Let’s say this legislation goes ahead. Is the CRTC even capable of this?
Mr. Denton: Is the Inquisition capable of being an inquisitorial agency? The CRTC — it will certainly try a lot. I’m sorry; the idea is risible.
Senator Wallin: We got that sense.
Mr. Denton: The CRTC is composed of ordinary reasonable human beings trying to do a good job in light of a statute which is enormous and which carries with it highly intrusive powers, and they are being sent to regulate the terms and conditions under which people shall communicate across the internet for most of the purposes for which we use the internet.
It is not humanly possible, even if the CRTC were composed of double doctorates in communication, law and philosophy, for the staff to do the job that they are being called upon to do. The staff themselves are not capable. This is not because they’re dumb or bad or misled. It’s because they’re human beings, and there is no sufficiently enlightened body of people able to carry out the delicate and subtle tasks that are required. That is my belief.
I’ve been there, and all I can say is we’re just human, and there are plenty of times when we’ve made significant mistakes. You don’t want to be making significant mistakes when it comes to the range of human speech and freedom of speech across any communication medium. That’s what I want to say.
Senator Wallin: Thank you. My next question is for Matt Hatfield, if we could. I actually spoke less than 24 hours ago to a young person who has a very successful site online dealing with finance and other related issues. That person has already made the decision — even though this legislation has not yet passed — to upload outside of Canada for these precise reasons that Mr. Lawford and others have raised.
Is that your sphere in the world that you operate in and the kind of content producers that you’re in contact with?
Mr. Hatfield: It’s definitely something that some producers will be looking at doing. I think it really speaks to the impoverished vision this bill has of what the market for Canadian cultural content is — this vision that only people within Canada could possibly be interested in what we’re doing, and we have to fight so hard to preserve that little bubble. There are many Canadian creators making amazing content for a global market. For many of them, actually, the market is primarily global.
One of our concerns, particularly for francophone creators, is that, for those creators, the majority of their market may be global. If another country did a similar thing there — if France did a similar thing within their market — they could actually lose far more than they would gain. They could lose a huge portion of their audience if cultural preferencing were happening in larger countries.
We’re a small successful player for cultural content in the global market, and we should know ourselves that way and celebrate that. I so wish we were here discussing a bill that actually recognized the success of Canadian cultural content on the internet and was looking at reinforcing that — not this fear-based “let’s batten down the hatches” view.
Senator Wallin: Do you agree that the static-versus-the-dynamic requirement would mitigate?
Mr. Hatfield: Yes, I think it’s an angle worth exploring. What we want to see is the CRTC not having a comprehensive power across every single thing users do online, and that means taking the algorithm power out. Algorithms create almost everything we do online currently. It’s too broad a power to give to the CRTC, especially on such broad terms.
To respond to what we were talking about earlier, there is a huge gap between the damage the CRTC could do here and the good they could accomplish. The power of the law is so broad, they could certainly do some damage, but, to Tim’s point about capacity, we work with the CRTC a great deal on telecom issues. There are many good people there, but they have really floundered in recent years, even to do the basics of their current duties in a timely manner. So the idea that they’re going to take on magnitudes more complexity and scope and really knock it out of the park is unlikely in our view.
[Translation]
Senator Miville-Dechêne: Mr. Denton, you say that users have absolute freedom in this marvellous system. However, online businesses decide what we hear and what we see. Of course, we have preferences, but these businesses can put anything in these algorithms. So, talking about individual freedom seems a bit much.
I will tell you about something that affects me more closely: I am a former journalist and I very much believe in freedom of expression. However, in Quebec — and you didn’t say much about minority culture — , we listen to only 5% of Québécois and francophone songs, even though we know that language is transmitted largely through culture.
I think that you are overlooking a significant part of this reality. Of course, Bill C-11 is not perfect; all sorts of things in the bill are not perfect. I know that there are Québécois content creators who are popular abroad. However, the culture we currently find on the internet is not French. That means that for a large part of Canada, its language and culture are at stake. That is not part of your argument and it troubles me.
[English]
Mr. Denton: I’m not sure that’s a question. That’s a statement of the relative problems of the French language on the internet, which I am incapable of solving and which are not really going to be solved by this act.
Chaining everybody to production quotas and subsidies is the genius or the presiding spirit of the Broadcasting Act. The internet is a worldwide market, for which I see plenty of French content — which I read and use for improvement of my own French — but I don’t think that there’s a problem that can be solved by this act.
The liberty of expression, whether in French or in English, is not going to be assisted by constraining the algorithms by which people’s choices are influenced. The point of the algorithm is to suggest for your consideration programs, music and ideas that you might like to explore further. I don’t know about you, but I shift my YouTube choices constantly to things that interest me, not to what is suggested by the algorithmically generated list of videos.
While I can agree with your concerns for the French language, which, of course, will always be a concern, I’m not sure that there is a connection between the increased level of control that this bill envisages and the solution to the problem you are looking for.
[Translation]
I see a gap between the problem described and the solution proposed in Bill C-11.
Senator Miville-Dechêne: You are right to say that we are not sure that this is a solution, but it is an effort. As you know, music quotas in Quebec had a certain effect — 30% of music heard on the radio at a time when people listened to the radio — and that created a vibrant culture. To say that it won’t work, we don’t know. What should we do instead? If we wait, we risk becoming Americanized.
[English]
Mr. Denton: I’m sorry; I’m not buying it. It’s a perfectly valid concern, but turning Canada into a controlled-media state in order to deal with a worldwide problem of French-language music on the internet hardly strikes me as a reasonable solution to the stated problem. The real question is the gap between what you want to achieve, which is, say, more French-language music, and the degree of control that would be necessary to achieve that against people’s wishes.
I don’t see a problem which is worth turning ourselves into if not an authoritarian state then an authoritarian agency directing people’s choices to solve that problem.
[Translation]
Mr. St-Aubin: I also think we have to recognize that radio and television quotas are completely different from internet services. In the case of the internet, it’s more the consumer who chooses what content they want to consume, whether it’s music, videos or the online equivalent of radio or television.
So to say that because quotas have worked, that they had some success with radio and television, means we will have the same success on the internet, frankly, I agree with Mr. Denton: it’s crazy and it doesn’t work the same way. The idea that we can interfere with algorithms and their effects, which are designed to give consumers content that they want, essentially, so the quotas that will have the effect of trying to circumvent —
Senator Miville-Dechêne: If I may, I’ll interrupt you. Why this blind trust in online companies that are there for your welfare and to give you what you want? It’s unbelievable, these are private companies! Algorithms are not only and necessarily giving you what you want to hear. It seems that, for you, the fact that private companies choose what you will listen to by algorithm, that’s freedom. It seems unbelievable to me, because you know very well that it also involves a form of manipulation.
Mr. Denton: Just a moment, Madam Senator. I object to your “blind trust” in the powers of the state and the CRTC to manipulate choices.
We are talking about a universe of music, information and intelligence sources that national legislation cannot control. The powers of the Canadian state to manipulate francophones’ choices in music must be judged fairly when trillions of sources of information, music and opinion exist on the internet.
Senator Miville-Dechêne: Thank you, gentlemen.
[English]
Mr. Hatfield: It’s true that algorithms don’t perfectly represent our preferences, and the legislation I wish we were talking about is one that would be giving us more control over those algorithms — more ability to see how they work and more ability to edit and see our own preferences. That’s a bill that would respect the choices of Canadians. That’s not Bill C-11.
So if people in Quebec are choosing to listen to 5% of French-language music, that’s a choice that predominantly French-language speakers are making. The solution can’t be attempting to manipulate that choice. That doesn’t belong in a democracy.
I also want to make a point that it’s worth considering how much deeper the manipulation power granted to the CRTC under this bill is than quotas on the radio. They have the power to edit custom feeds and to edit custom search results to a certain outcome. That’s editing people’s ability to find what they’re actively searching for. It’s not just editing what is passively out there for them; it’s a much deeper form of intervention in our choices.
Senator Simons: Mr. Hatfield, you put it very well when you talk about fear of user choice because — perhaps because I’m an Albertan, perhaps because I attended journalism school in California, perhaps because I’m an old journalist — I very much fear that compelling people to absorb CanCon like it’s kale or tofu because it’s good for us turns people off of the excellence of the programming we already produce.
However, as senators, we don’t have the luxury of rewriting the bill. I don’t get to write the bill I want to write; I have to work with what is in front of me.
My questions are for Mr. Lawford. You have offered a pretty clear set of amendments to proposed clause 4.2(2), which is the problem child of this bill. Proposed clause 2 purports to exclude user content and platforms that host user-generated content. Proposed clause 4.2(2) “unpicks” all of those exclusions.
I’m wondering where you came up with the ideas for the $150-million, $50-million and $25-million thresholds. When I suggested thresholds to the department, the department said that this bill may be on the books for decades; how can we put in a number when the economy is going to change?
Mr. Lawford: Thank you for the question. It’s a big one. We are trying to find something of a middle ground to preserve the existing cultural supports in Canada in the new environment because consumers do like CanCon and they do want culture supported, but they also want their freedom of choice.
Our idea for the thresholds is to only put in those companies that are going to make a material impact. The $150-million threshold is basically getting you Amazon Prime Video, Netflix, Spotify — the big platforms at this time. That can be adjusted up or down. Perhaps the provision could be rewritten so it’s not a number — $150 million — but a number with a formula that is supplied purely mechanically to go up or down, or perhaps you could leave it to the CRTC to adjust up or down if they’re not capturing enough and making enough with whatever obligations they’ve put on registrants.
Senator Simons: So that would allow, say, a small Punjabi streamer or a small Nigerian streamer to come into the market and not worry?
Mr. Lawford: The example I’ve been using is a cricket website from Pakistan that is popular in Canada but only makes $2 million a year and has a few thousand viewers. Probably they’re going to block their stream, because there’s no point in going through the effort of going through the hoops of the CRTC if there are big requirements.
The second one — the $25-million and $50-million with audiovisual content — is meant for Canadians who use YouTube or other streaming platforms as a distribution system rather than going with Bell Media or one of the traditionals. In that case, if they get big enough, they look a lot to me like, say, Blue Ant Media. So if they’re making $50 million — Skyship Entertainment came before the House, and I don’t know how much they make, but they’re probably close to bumping over — when someone gets to $100 million in revenue, I think you should be contributing at a different level. But before that, the vast majority of Canadians can have their own streams. They may be taking home $100,000 or $200,000 a year if they’re lucky, but they’ll never make $25 million or $50 million.
Senator Simons: I wonder if $25 million is enough if we’re talking about someone like Sony Music or Warner Bros., who are using YouTube as a competitor to Spotify as a de facto music feed.
Mr. Lawford: But they would be covered as a platform.
Senator Simons: But they’re not a platform. If Sony Music releases on YouTube, $25 million seems like a low threshold.
Mr. Lawford: I use those numbers because the CRTC has a survey, and they require those who make $25 million or more in Canada on audio to report on their business activities. So I’m taking that as a threshold where they believe materiality starts. Then it’s $50 million also for audiovisual. Again, I’m relying on the expertise of the CRTC for those numbers.
Senator Simons: I really like your distinction between static and dynamic discoverability. One of my problems with this bill is that it does not define “discoverability” at all.
Mr. Lawford: Yes.
Senator Simons: Static discoverability, it seems to me, would solve a great number of our concerns that we discussed with the Privacy Commissioner earlier today about the collection of data.
Mr. Lawford: I would hope that when you speak to Disney and other streamers coming before you, you might want to ask them about this. I understand that it’s maybe slightly more complicated. For example, on mobile, there might not be a lot of places on the screen that don’t have algorithmically induced content, but it’s worth a discussion.
It’s aimed at trying to replace what Senator Miville-Dechêne was talking about in terms of supporting culture where there was previously 30% of radio play for francophone content. How do you replace that lost revenue online? You give them spots on the static, and that’s meant to replace the guaranteed radio play. It’s a place where you will get some sort of exposure, but you’re not interfering with the algorithm, which is going to suggest the next song to play. So you won’t suddenly hear a French selection if you have listened to 30 English songs in a row.
I hope that makes it clear.
Senator Dasko: I hesitate to ask this question because I know that we are focused on the online streamers, but I did want to ask Mr. Denton and Mr. Hatfield: What do you think about the existing Canadian content requirements in broadcasting in our Canadian broadcasting system? Do you feel they’ve been of value? Do you think they should remain? Should we throw them out the window? Should they be changed? What is your view of our system which, of course, is very significant. It has directed our broadcasting system for many decades now. Can I ask both of you what you feel about that, Mr. Denton and Mr. Hatfield? I have a question for Mr. Lawford as well.
Mr. Denton: I think the success of the Canadian content is muted, put it that way. It has been successful in the sense that stuff has been produced by government subsidy. Whether it has found the same adherence of the Canadian population to it is another matter. But that’s a question within a closed national system of protected sources and subsidized production. They haven’t been able to subsidize the consumption part of it.
I’m cynical, but attempting to transfer such an idea to a global system of production, which is manifestly producing Canadian content as well as Danish, Qatari, Yemeni, American, French, et cetera, content is a misapplied idea, and I think Bill C-11 is a misapplied idea at the start of it.
Yes, I approve of Canadian content. I watch it myself, but I get my stuff off the internet and from all over the world. If we want to continue to subsidize Canadian production, we have no problem with that whatever. Go ahead. It’s going to make my day. Subsidize it. Everybody else does. Let’s have Canadian content. But on the internet, it faces a real market of people with real choices, and the problem we have with this idea of Bill C-11 is that really competition and consumer choice are nowhere mentioned. We’re in a different world now, and the rate of adaptation to that world is slow; Bill C-11 is the evidence of that slowness of transition.
I guess that’s what I would say.
Senator Dasko: So you would keep the system we have now in place, pretty much?
Mr. Denton: I’m terribly wicked. I think eventually the regulated broadcasting system will be no more important than the Royal Tours office of Canadian Heritage. It may be more important than that, but we dump millions of dollars into it over time. I think we will still be dumping lots of money into Canadian production even if the idea of a regulated broadcaster, which is really only a distributor, even if regulated distributors disappeared, we would still be subsidizing production. It’s important to dissociate the idea of a regulated transmission of a programming through the so-called broadcaster in the cable industry to the internet, where we can have subsidized production, but it reaches a market and must satisfy a market of millions of people, none of whom necessarily are in Canada.
Senator Dasko: Mr. Hatfield, would you keep the Canadian system as it exists within the Canadian broadcast system as we’ve developed it? The Canadian content requirements for expenditures and exhibition and so on.
Mr. Hatfield: The mandate I have from our community and OpenMedia’s focus is really on internet issues and digital issues, so I don’t want to speak too far out of turn on that. Part of why I reviewed the history of the system very briefly in my speech, though, is I think at the time it was designed it made a great deal of sense. Our issue is that it makes very little sense for how the internet works today. Whether we formally keep the system in some sense, it’s going to require a lot of change to make any sense in the future. So part of what’s complicated with this bill, even though we’re theoretically at a late stage of it, is we haven’t really answered this question of what really CanCon is. We have this point system that hasn’t been adjusted in almost 40 years now, I think, that in no way reflects what I think is really Canadian storytelling. Is the CRTC going to fix that? Well, maybe. My answer about whether they should keep the system really depends upon how successful they are in that adjustment.
Senator Dasko: Thank you. Mr. Lawford, you made the distinction between static and dynamic modes of exhibition. Now, the terminology I might actually quibble with because static sounds pretty dull and boring, and dynamic sounds really dynamic and exciting. If you wanted to pick a stream, which stream would you be? Hello, it’s pretty clear.
Wouldn’t it be possible for creators to be in both? Can’t they say they’re going to be in the — let’s call it the non-algorithmic stream versus the algorithmic stream. It’s not a perfect distinction, but couldn’t you be in both if you were a Canadian creator? Say, “Well, I want to show up on this list if I’m relevant for whoever the viewer is, and can’t I also show up in this other stream?” You suggested they would have to choose. Well, why would they have to choose? Let’s just be in everything?
Mr. Lawford: No, it can’t be both.
Senator Dasko: Why not?
Mr. Lawford: Because it destroys my model. They can’t because what we are trying to do with our suggestion is to avoid having Canadian content influence the algorithmic delivery because the user-generated content crowd is saying that if that comes up in users’ feeds and if it doesn’t get as much attention as the hopeful producer of that CanCon would like, then the algorithm will downgrade that content and actually harm both that content which is trying to be promoted and, more importantly, their expression, their station where they’ve got a flow.
The way algorithms work is you get into a flow watching them and you’re watching a thing after thing for hours and hours, and that is what YouTube wants to protect. That’s what earns the channel money. If anything breaks the spell, right? Better than a random inserted content. I can’t think of anything that is more so.
Senator Dasko: But if you wanted to be in both streams.
Mr. Lawford: You couldn’t be in both streams because you’re then interfering with — what you’re getting is a boost into someone’s feed who is not interested in seeing Bell’s Crave product, and they have a new show. It goes into someone’s random feed that has some connection that YouTube thinks is similar or the government is under this thing trying to insert it to people who don’t want to see it.
Bell, for example, with Crave, could say, “We have new content.” They give it to the CRTC, and the CRTC says to YouTube, “You must have part of your screen display — which is what we call static — and you have to roll those Canadian-approved content lists into those spaces one after the other.” And that’s what static is. So no, they couldn’t have both.
Senator Dasko: Thank you.
Senator Clement: Mr. Lawford and all of you, thank you for appearing as witnesses before us. Mr. Lawford, you used the word “disruptive,” like disrupting the consumer experience. I actually like the word “disruption.” It appeals to me to disrupt the sort of cozy echo chamber that is being created by these algorithms.
In response to Senator Dasko’s disruption of your model, do we have data to support that people will swipe away from Canadian content if it is put in their feed?
Mr. Lawford: I can only give you hearsay from having spoken to certain platforms myself, and they say, “Yes, absolutely.” They do have data for that. You will have to ask, for example, if Disney comes, to see if that happens, or one of the other more interactive platforms if you can get hold of them.
You should also know that the static discoverability that we’re putting forth — again, we had pushback from the platforms when we spoke to them. Again, I’m doing hearsay for you here. They said, “We don’t even like that because what you’re calling static is more available on the desktop because there is more screen real estate,” so there are areas where they have banners saying, “new movies” or whatever. They could put a script, “CanCon, please try it out,” right? But they say even that they tailor to you as a particular viewer. However, it’s the most minimal intrusion we can do to disrupt their business model to promote Canadian content. It’s in the least jarring place for the user. What’s jarring, I believe, to the average YouTube user is you get another roll of the next video or the next song or whatever, and that’s where people click away if they don’t hear something they like.
That feeds the algorithm to dislike whatever has been fed to them, and also there is a chance they will quit the program and stop listening. That’s YouTube’s big concern, I believe.
I don’t know if that’s answering your question, though.
Senator Clement: It is and it’s discouraging to hear that, of course. I find myself, as a consumer, trying to trick the algorithms so I can get something that doesn’t make me feel happy and cozy and that looks exactly like me. What is the point of that all the time? It’s a concern.
The other concern I have — and this may be more for Mr. Hatfield — is that Canadians don’t know much about algorithms and how they work. How do we get to that? I hear you guys. The CRTC is bad. Okay, got it. If we’re not looking at the CRTC, what are you proposing in terms of dealing with these issues? Are you proposing anything? I understand, Mr. Lawford, the banner piece and the static versus dynamic. That was good. What are we doing to talk to Canadians about algorithms and how they work so we all know what we’re talking about?
Mr. Lawford: I will leave that to these guys. Perhaps they will have better ideas. That hasn’t been well put out there by Canadian Heritage and the folks that have been pushing the bill hard, I believe. The minister could do more to explain this and to talk in that register. I think that would help if this is going to go back to the House and to be amended.
Senator Clement: Thank you.
Mr. Denton: The function of algorithms is to get you to continue to listen or watch. It’s suggesting things that will maintain your stream of interest, which is an attempt to say, “You like fresh fruit? We have more fresh fruit. You like steak? We have certain kinds of steak.” The attempt to influence the algorithms is the broccoli and yogourt selection. That is, you need more broccoli and yogourt in your diet, to which the consumer says, “No, I don’t.” I think there may be a case for education on the uses of algorithms. It certainly would be helpful if people who drafted this bill had a better understanding of algorithms.
Mr. Hatfield: I would say disruption is a good thing. I’m with Senator Clement on that. Unfortunately, I don’t think the Government of Canada getting a broad right to interfere with what people would see online is a healthy disruption. I think it’s a concerning level of power. If we were here with a bill that was about, “let’s crack open the algorithm; let’s make the information it has on people transparent to them; let’s let people edit those choices,” and — as we’re on a fast food versus crummy veggies metaphor here — if I could make my own choices, then this week it’s all veggies; next week it will be junk food. That would be great. That’s not the legislation we have. Unfortunately, we can only act on the legislation we have here. The point is not that algorithms are wonderful and always good. The point is that we don’t want the government to co-opt them to manipulate people further. We prefer to see people empowered here.
Senator Clement: Thank you.
The Chair: My question is for any and all members of this panel. From your experience and your understanding, how are the Americans tackling this issue? How are other democracies in the EU or in Australia dealing right now with the ever-changing platforms and streaming? How are they managing it? Where does Bill C-11, in your opinion, fit in in comparison to what other allies and democracies around the world are doing or have done?
Mr. Lawford: I believe Canada is way out in front on this one, way over the skis. The French have had their difficulty with online arms legislation and have had to pull things back because of their constitutional court, so I think they’re being a little more careful in this area. Australia, France and Spain would likely be places that would start doing this, but we’re even ahead of them. It’s really uncharted territory unless others on the panel know of places that have tried this. I haven’t seen anyone take this quite as far.
Mr. St-Aubin: I’m aware of Australia. Some time ago — and I haven’t followed up on it — they were looking at something that was targeted at the major online players with a significant domestic revenue in the country. I believe the proposal at the time was 5% of gross revenue as contribution that they could either make to a fund or spend it themselves — they could invest in domestic Australian content. That was it. It was quite targeted, quite limited, quite focused on, to use the phrase the ministers have used, web giants. It was only tailored and targeted at very large players.
Mr. Denton: In fact, no one has attempted to make the existing scheme of broadcasting regulation the conceptual basis of understanding the internet and of regulating the internet as if it were broadcasting — no one in the world. This is just a lazy continuation of a dumb idea, and it needs to be rejected. The Australians have introduced appropriate measures to get streamers to contribute. If the bill were about appropriate measures to get streamers to contribute, we would be singing an entirely different tune. The fact is the bill is not appropriate, targeted measures. It is a general power grab over human communication across the internet. Therefore, it deserves our distinct disdain.
Mr. St-Aubin: To go back to a question that was asked about the appropriateness of thresholds in the legislation, ISCC is also recommending that there be a provision in the bill such that it would be reviewed in three years. We believe that’s important because, as I’ve said in another context — as has Tim — this bill really overshoots the mark in many respects. It is at the bleeding edge of legislation, one might say. The notion of having a threshold would fit very well with the notion of a mandatory review after three years, which would be a logical thing to do given how far out ahead of the curve this legislation is internationally.
The Chair: Colleagues, if there are no more questions for the panel, I’d like to thank all our witnesses for coming before the committee. It is very much appreciated.
[Translation]
Honourable colleagues, we are now resuming our pre-study of Bill C-11.
For our second panel, we are pleased to welcome Ms. Eleanor Noble, National President of the Alliance of Canadian Cinema, Television and Radio Artists, as well as Ms. Marie Kelly, National Executive Director. We also welcome Ms. Annick Charette, President of the National Federation of Communications and Culture.
[English]
We have with us from the Directors Guild of Canada, Dave Forget, National Executive Director; and Warren P. Sonoda, President.
[Translation]
Welcome and thank you for joining us this evening. We will listen to your opening remarks before moving on to members’ questions, starting with Ms. Noble, followed by Ms. Charette and representatives of the Directors Guild of Canada.
Ms. Noble, you have the floor.
[English]
Eleanor Noble, National President, Alliance of Canadian Cinema, Television and Radio Artists: Thank you chair, deputy chair, committee members and staff. I’m Eleanor Noble, a professional actor and National President of ACTRA, the Alliance of Canadian Cinema, Television and Radio Artists. Accompanying me is Marie Kelly, ACTRA’s National Executive Director.
ACTRA has been among the strongest supporters of government efforts to modernize the Broadcasting Act, ensuring online streaming services contribute fairly and equitably to the production of Canadian programs. This does not mean the bill is perfect. Today, we are here to address and propose two essential changes to strengthen Bill C-11.
Our first significant concern is the amendment introduced during clause-by-clause consideration at the House of Commons Standing Committee on Canadian Heritage that would exempt online undertakings from the provisions of the Status of the Artist Act, or the SAA.
For almost 80 years, ACTRA has worked to ensure performers in recorded media productions across Canada receive fair compensation for what we do. Performers are the original gig workers. The median income of actors, singers, dancers and other performers is between $15,000 and $18,000 annually, well below the average of all artists and only 36% of the average income of all other workers.
This amendment removes a minimal protection our members and other industry artists currently have and will disrupt stable labour relations in our industry and create different standards for broadcasters doing the same things.
The audiovisual production industry is diverse. It includes domestic and foreign producers working across Canada. ACTRA’s SAA certifications directly apply to producers operating in federal jurisdiction, like broadcasters and federal agencies. The mere existence of these certifications has underpinned all bargaining activity in the sector for more than 25 years.
Because of ACTRA’s SAA certifications and historic bargaining practices, our national agreements ensure all producers may participate in the bargaining process and must then abide by the minimum rates and fair production standards. This has brought labour relations stability to the industry.
All significant domestic and foreign producers, including major U.S. studios, Netflix, Amazon Prime and other online undertakings are already parties to collectively bargained agreements.
Broadcasting is federal jurisdiction because broadcasters provide services across provincial borders. Like traditional broadcasters, online streaming services make, acquire and distribute programming across provincial borders. The SAA must continue to apply where any of them engage artists in Canada.
Simple.
Nine associations, in Canada and Quebec, representing 71,000 creators — virtually all the artists who work in the production industry — have joined together to urge the Minister of Canadian Heritage to remove the amendment.
If the objective of this legislation is to maintain the status quo in an industry that generates $11.3 billion in GDP and supports 217,000 jobs, then we ask you, senators of this committee, to remove the section in Bill C-11 that excludes online undertakings from the SAA.
Second, we urge this committee to strengthen Bill C-11 by maximizing the use of Canadian talent.
ACTRA also works to ensure Canadian artists, including our 28,000 members, are empowered to bring Canadian stories and music to life.
The fundamental goal of the Broadcasting Act is to guarantee Canadians have access to original Canadian entertainment programs, music, information and news.
Bill C-11 creates two classes of broadcasters: Canadian broadcasting undertakings and foreign online undertakings. This is fine until you place different requirements on the two classes of broadcasters. As it stands, Bill C-11 both weakens the current requirement for Canadian broadcasters to use Canadian talent and establishes a lesser standard for foreign services. This is wrong on both accounts.
ACTRA proposes clause 3(1)(f) be amended to say:
each broadcasting undertaking shall make maximum use, and in no case less than predominant use, of Canadian creative and other resources in the creation, production and presentation of Canadian programming, and shall contribute significantly to the creation, production and presentation of Canadian programming to the greatest extent that is appropriate for the nature of the undertaking;
As well, clause 3(1)(f.1) should be deleted altogether.
ACTRA believes this standard is appropriate, fair and flexible enough to allow the CRTC to apply equitable requirements on all domestic and foreign services.
We have the support for this amendment from the Directors Guild and Writers Guild of Canada, the Canadian Media Producers Association and the Coalition for the Diversity of Cultural Expressions. We welcome the opportunity to continue to work with senators and government as this legislation moves towards Royal Assent to find a solution to these issues, which directly impact tens of thousands of professional artists.
Marie Kelly and I would be pleased to discuss this further during the question-and-answer session. Thank you for the opportunity to appear today. We look forward to our discussion.
The Chair: Thank you.
Next we have the National Federation of Communications and Culture.
[Translation]
Annick Charette, President, National Federation of Communications and Culture: Good evening. My name is Annick Charette, and I am the President of the National Federation of Communications and Culture, which represents all media workers and unions in Quebec.
We are very pleased to be able to speak to you this evening. I’ll to start my presentation by saying that the digital age has profoundly changed the way information and entertainment content enter our lives. In fact, we have the whole world in our hands, everything, everywhere, all the time, on a small phone and on big screens in our living rooms, depending on what we are watching and what we are looking for.
This has changed not only the way we consume content, it has also obviously shaped our relationship to ourselves and who we are as a society, our values and our uniqueness. What reflected us 20 years ago, made us recognize ourselves and reconnect, is now diluted in a multitude of attractive options. Seductive, certainly, but their codes are created elsewhere in high-rolling backrooms, so to speak, to the detriment of a sense of culture and vision of a distinct society. In fact, it is what distinguishes us in all this wonderful content, and how we distinguish ourselves as a society and as a product.
This is a critical issue for Quebec, certainly, but it should be no less so for Canada, because the threat of becoming diluted in the cultural media ecosystem, and in the American perspective of the ecosystem, is just as significant.
What will be left of our own ecosystem, our cultural and media ecosystem, in this world of international competitiveness, with its near-infinite budget?
This is the central question of what we are discussing today. Five issues seem truly essential to us in this bill: defining Canadian programs, regulating social media, using Canadian artists and workers, maintaining a public hearing process and preserving the authority of the Governor-in-Council.
Defining Canadian programming is truly essential. Currently, the CRTC defines “Canadian programs” by imposing three conditions: the producer must be Canadian and have real decision-making responsibilities; creative functions must be performed by Canadians — lead actors, directors, artistic directors, etc. — and services costs must be incurred in Canada. However, in Bill C-11, guidelines for defining Canadian programming make no reference to the issue of costs incurred with Canadian companies for service fees and post-production.
In fact, Bill C-11 does propose guidelines that the CRTC must meet to decide on a new definition of Canadian programming. However, they seem to lack detail and do not guarantee that Canadian decision makers make decisions about commitment, production and artistic content.
We do not wish to become a new kind of sweatshop where homegrown talent simply puts itself at the service of products conceived and developed elsewhere, even if the rights are granted to Canadian producers. We therefore recommend that the current definition of “Canadian programs” be maintained.
Regulating social media: Social media is not just an extraordinary venue for interpersonal exchange and dissemination of amateur cultural content. Bill C-11 proposes that, in general, uploaded amateur programs or videos should not be subject to the Broadcasting Act. We support this approach.
However, social media are increasingly becoming essential platforms for the promotion, dissemination and widespread consumption of professional cultural content. This turns some users into profitable businesses, unquestionably on par with traditional broadcasters.
In this regard, an exception would be appropriate to ensure that broadcasting undertakings that already have regulatory obligations set by the CRTC, or undertakings that broadcast third-party video and audiovisual content on a social media platform, are subject to some form of regulation.
Using Canadian artists and workers is, for us, really at the heart of the issue. As it stands, the law contains provisions requiring broadcasters and distributors to use as many Canadian artists and workers as possible.
In this matter, amendments proposed by Bill C-11 are problematic, as they create a different and less stringent obligation for foreign digital giants compared to Canadian companies. We do not see the relevance or fairness underlying this provision.
While Canadian companies are required to use Canadian artists and workers to the maximum extent possible and, in all cases, to use them predominantly, foreign giants are only required to do so to the extent possible. Why, based on what criteria, when they are operating in the same Canadian production context for the Canadian market?
The Canadian Radio-television and Telecommunications Commission’s mission must be to resolutely increase the use of Canadian artists and workers. Otherwise, legislative reform is nothing but a smoke screen and will jeopardize the survival of many Canadian artists and artisans.
Keep the process open and transparent through public hearings: Currently, the licence renewal exercise is a high point in terms of corporate accountability and citizen participation. This is when stakeholders can ask questions and make plans and recommendations to help the CRTC make better decisions.
As proposed in Bill C-11, licences for conventional broadcasters could be set for fixed terms and online services would not have to apply for a broadcasting licence. The public hearing process then becomes obsolete. Citizen participation and transparency are strong principles of the law that should not be weakened. That is why issuing an order to impose conditions of service on a company or group of companies should inevitably lead to public hearings.
Preserve the authority of the Governor-in-Council: Currently, the Governor-in-Council may rescind or refer for review a CRTC decision affecting broadcasters’ licences if it considers that the law’s objectives are not being met. This is what happened in 2017, when it was decided that licence conditions initially imposed on major French-language television groups did not sufficiently protect French. We see that it can be useful.
This authority must be extended, namely to cover CRTC decisions setting out the responsibilities and obligations of digital companies not governed by licence conditions. It is therefore an essential mechanism for guaranteeing our cultural sovereignty, while at the same time preserving the principle that the government acts from a healthy distance when implementing regulatory processes that apply to the media. The Governor-in-Council’s authority must therefore apply to CRTC orders. This is not about granting new authority, but about preserving the existing one.
Thank you for your indulgence.
The Chair: Thank you.
[English]
Warren P. Sonoda, President, Directors Guild of Canada: Thank you, chair, deputy chair and members of the committee. My name is Warren Sonoda. I am a Canadian filmmaker and the National President of the Directors Guild of Canada, or DGC. With me today is Dave Forget, the DGC’s National Executive Director. We are both Zooming in from Toronto, which is the territory of the Mississaugas of the Credit, the Anishinaabe, the Chippewa, the Haudenosaunee and the Wendat peoples. It is now home to many diverse First Nations, Inuit and Métis people, and we appreciate the committee’s invitation today.
The DGC is a national labour organization that represents over 6,000 key creative and logistical professionals in the film, television and digital media industries, covering all areas of direction, design, production, logistics and editing.
The DGC supports the modernization of Canada’s broadcasting system, which we believe is in the interest of all Canadians and is fundamental to foster the development of the creative community. Moreover, Bill C-11 sets regulatory standards for the 21st century and is a conduit to assert Canada’s cultural sovereignty.
However, there are two provisions in Bill C-11 that we find problematic, as they create different standards between foreign online undertakings and their licensed Canadian counterparts. We are deeply concerned that this may impact the future careers of Canadian artists and storytellers.
We were surprised to see a last-minute amendment to exempt online undertakings, in this case both foreign and domestic, from the provisions of the federal Status of the Artist Act, or SAA, introduced in Bill C-11 in June. This is a setback for labour relations and constitutes the loss of a fundamental right for artists to associate and be fairly compensated for their work. What’s more, no rationale was provided to explain the introduction of this amendment.
Enacted 25 years ago, the SAA has guaranteed the right to bargaining and enshrines the status of artists because of the precarious nature of our artistic work. Removing these protections contradicts Canada’s Broadcasting Act objectives and would threaten future collective bargaining, especially given the power imbalance between Canadian artists’ unions and global online undertakings.
Dave Forget, National Executive Director, Directors Guild of Canada: The DGC has already entered into collective agreements with major U.S. studios and, of course, Canadian producers. But altering the SAA status quo would result in a two-tiered legislation, potentially undermining the existing agreements and leading to further imbalances in terms of rates and workplace standards. With this SAA exclusion, online undertakings could choose to hire artists who are not protected by collective agreements. Canadian directors, writers, performers and composers may find themselves in a divided system, faced with the choice of different working terms and conditions. Simply put, Canadian artists would be treated inconsistently and unfairly. We are looking forward to working with you to find a solution in order to eliminate this double standard from the bill.
The legislative intent is that Bill C-11 be applied in an equitable manner to all broadcasters, regardless of the means of delivery. By the same token, the act should also apply equitably to all Canadian artists.
While we are on the theme of two standards, we would also like to call your attention to another inconsistency, in this case with regard to section 3(1)(f) of the act. Once again, we are concerned by the prospect of two classes of regulation, one for domestic broadcasters and one for foreign streaming platforms. This unnecessarily reduces opportunities to hire Canadian creators and artists when they should actually be incentivized.
Canadian storytelling is fragile and represents a funding and investment challenge. In recent years, investment in funding original Canadian stories has decreased, according to the CRTC, by approximately 10% each year. The new legislation has the potential to reinvigorate support for Canadian storytelling, but it is essential that we do not diminish the use of Canadian creative talent. With this in mind, the guild proposes that the committee strike subclause 3(1)(f.1) altogether and amend subclause 3(1)(f) of the bill as follows:
each broadcasting undertaking shall make maximum use, and no less than predominant use, of Canadian creative and other resources in the creation, production and presentation of Canadian programming, and shall contribute significantly to the creation, production and presentation of Canadian programming to the greatest extent that is appropriate for the nature of the undertaking;
Clause 3(1)(f) is an essential policy component that provides enough flexibility to broadcasting undertakings and is adaptable to various business models and types of programming. Members of the committee, we thank you for your time and will be pleased to respond to your questions.
The Chair: Thank you very much.
[Translation]
Senator Miville-Dechêne: Thank you all for being here. My first question is for the spokesperson of the Alliance of Canadian Cinema, Television and Radio Artists, or ACTRA. I was as surprised as you were that the Status of the Artist Act was withdrawn. As I understand it, the government willed it so. Do you understand why? In Quebec, the Union des artistes does not understand it either. They seem to be saying that it’s a matter of jurisdiction. Does that mean they think provincial legislation, such as the Status of the Artist Act, should apply instead of national legislation? I’m not sure, though, that all provinces have this type of legislation.
You must have looked into the matter. How do you explain what happened with this somewhat last-minute amendment, so that Bill C-11 would not be subject to the Canadian Status of the Artist Act?
[English]
Marie Kelly, National Executive Director, Alliance of Canadian Cinema, Television and Radio Artists: I would say that we don’t know why the government brought forward this late-night amendment to the legislation. What we can say is that our understanding is that the workers in the industry, the unions that represent them and the production or the industry end of it are all looking for stability. Important to our industry is stability. That’s what brings work in from other parts of the globe into Canada. It creates thousands and thousands of jobs, billions of dollars in revenue for the Canadian governments and for the Canadian population. Everybody wants stability. Our understanding is that there might have been a misunderstanding about the use of the Status of the Artist Act federally or correct. Not every province has a status of the artist act, and many of our collective agreements are provincially based. However, the fact that we have the Status of the Artist Act federally is actually one of the pillars that supports the provincial system that many of the producers, studios and productions utilize for their work provincially.
We want to make sure that we maintain the status quo and that we don’t unnecessarily and maybe unknowingly open a door to allow for, as Dave said, non-union work to come to our shores, and for there to be instability about what the rules are around artists when they’re performing.
I know, like the DGC, ACTRA is very proud of the fact that for over 80 years, as a group of artists and gig workers who often have no protections under some of the provincial laws, we’ve been able to build a minimum standard that protects artists. Our collective agreement gives RSP protection, it gives them benefits, et cetera. There is a whole ecosystem of minimums that we’ve been able to build for over 80 years, and we want to make sure that ecosystem isn’t disrupted by an amendment that was brought in at the end of the day, that maybe isn’t going to provide the stability it was intended to provide, and we’re hoping that through the conversation today and throughout we’ll be able to work with you on putting together something that better addresses the intentions.
[Translation]
Senator Miville-Dechêne: Thank you. I will try to understand; we still have a few weeks left in this study to try to understand the reason behind this amendment.
I don’t know who would like to answer my other question, but several of you have criticized the fact that there are fewer appeals. In other words, Bill C-11 does not provide as much room for appeals to the Governor-in-Council when CRTC decisions are challenged.
I’d like to hear from you on that, because it seems to me that Bill C-11, in and of itself, is a politically motivated bill and, to a certain extent, leaving the decision in the hands of the CRTC depoliticizes decisions about broadcasters.
Why are you so set on having an appeal to the Governor-in-Council, which risks repoliticizing these decisions? Especially because, of course, everything depends on the government of the day.
Mr. Forget: Thank you for the question.
[English]
That’s an excellent question. Our view on the option to appeal to the CRTC to the Governor-in-Council should be something that only happens very rarely, for exactly the reasons that you just described. Having an arm’s-length agency responsible for dealing with these regulatory matters creates an independence. We believe that’s in the public interest. But from time to time there are decisions that are troubling to the industry or troubling to Canadians, as the case may be.
We think of the option to appeal to the Governor-in-Council as a safety valve. As an example, a number of stakeholders, including the DGC, recently appealed to the Governor-in-Council on the licence renewal of CBC/Radio-Canada just last year.
Once again, it’s something we do rarely. There should be a very high bar on the substance of that request and, obviously, that gets taken into consideration. As in many of these issues, it’s finding the balance between an independent authority who is reviewing these matters and a transparent and open process at the CRTC, but also having recourse to have decisions reconsidered if it’s in the public interest.
[Translation]
Senator Miville-Dechêne: Thank you.
[English]
Senator Wallin: Witnesses earlier today — but certainly on other occasions as well — have made the point that most broadcasters these days are simply distributors because the cost of union production is too expensive in an industry that is declining in terms of revenue and viewership. The CBC would be an example of that.
The internet is not a broadcaster, and therefore trying to impose the rules and conditions that we have seen imposed on broadcasters over the years won’t work on the internet, which is a very different creature. There are no writers or directors or union requirements for lighting or set design on a TikTok video or somebody’s podcast.
I’m not sure if we’re talking about two separate worlds here, or if you’re talking about changing the regulation in the legacy broadcasting industry as opposed to the reality of the internet. Because many of the things that each of you have said would seem to apply only in a traditional legacy broadcasting situation and not online — not on the internet — in terms of user-generated content in the broadest definition.
Would anyone like to explain?
[Translation]
Ms. Charette: We sense that there are two options in the senator’s question, that the internet is one thing and traditional distribution is another. However, as things stand, the over-the-top, or OTT, service means that TV is distributed through the internet. The convergence that we will experience with 5G will once again bring things together in one medium. Are we here talking about user-generated content, which is not a professional production and which people can produce? TikTok productions are personal productions posted online, which is one thing, but the internet includes any broadcasting done through those media. That includes Netflix, Crave and even CBC, which provides internet streaming and pay-per-view products on selectable media that enable people to consume what they want, when they want. It’s all on the internet.
How should the difference in production with a professional production, whether it’s delivered through an Internet medium or a traditional medium, be seen in a different way? Those are two traditional productions in a framework and a production ecosystem that already exist and that are providing work for both craftspeople and artists. That is what we want to maintain because this production framework puts forward all the cultural proposals of Quebec, but also of Canada.
If we want to say that culture is now only content generated by people, we can do that, but I don’t think that is what we want for the future. We want to maintain a standard of production that does not come to us only through decisions or productions that are made outside of Canada. The internet is not the distribution of this, it is the mode of production and what it implies.
[English]
Senator Wallin: I don’t know why you’d be limited to watching foreign content.
You obviously support the bill — with a couple of objections. I’m trying to sort out why you think the rules surrounding a broadcaster or their production companies or the broadcasters or the legacy producers of content are the same as people who generate all sorts of content online and are not subject to union. You can’t say to someone who creates their own podcast or does a TikTok video that they are obliged to use Canadian actors or Canadian directors for user-generated content. I’m just not sure how those two worlds would meet.
Mr. Forget: Thank you. Actually, it’s a good opportunity to clarify. I guess I’d begin by saying two quick things. I agree with the summary that Ms. Charette provided just a second ago. The broadcasters themselves — CBC, CBC Gem, Crave, Bell — are already online. They’ve been online for many years now, and consumption and audiences are migrating online. We realize that. So I begin by saying the broadcasters themselves, who are operating online, see themselves as being broadcasters. They don’t need us to make that claim for them.
With regard to user-generated content, it’s been clear to us from the beginning that the intention of the bill is precisely to exclude — for all the reasons that you described so well — user-generated content, digital-first content from the scope of the bill.
Certain activities, for example, are being delivered to the home on online services, and we’re talking about Crave or CBC Gem or HBO. That is clearly broadcasting.
Other transactions and activities that take place on the internet should not be within the scope of the bill. I think the intention is that they not be.
It was an interesting conversation that we listened to a few minutes ago. What it comes down to is an effective methodology for ensuring that there is a distinction in the online world between what is broadcasting — what you might consider to be conventional broadcasting that is now being delivered on an online platform — versus user-generated content, banking and any other activity that goes on on the internet. I think that’s the framework for looking at this. What we need to get right is making sure that distinction is made.
I hope that helps to clarify our position.
Senator Wallin: But anyway you look at it, content creators, whether they’re making a TikTok video in their basement or they’re an independent production house, have different rules than the broadcasters and the distributors. Those are two different functions.
Mr. Forget: The TikTok video producers are different. The user-generated content is different. What we’re focused on is when it is broadcasting activities. The reality, though, is some platforms are delivering media that include a component of what we would call activities — TikTok may be an example, or YouTube — and some of the content — not all of it — is media content. So then you’re left with the question — and these are the criteria that are set out in the bill — of how to distinguish that content from content that is more appropriately considered user-generated content and is therefore excluded from the scope of the bill.
Senator Wallin: But as we’ve heard from other witnesses, it’s not clear whether user-generated content — whether it’s described as amateur or professional — is excluded. We’re all looking for some ways to define that. Is it about the amount of money they generate or earn for themselves or someone else? Is it about how many Canadians are on the screen or involved? That’s what’s not clear here. I can’t see how you take long-standing union productions at large broadcasters or even at older-school production houses and compare that to where we are today with how content is created.
Mr. Sonoda: If I may, senator. I don’t believe we are. I believe the argument for regulating user-generated content in this act is a false narrative. The act compels online undertakings — let’s call them “streamers,” both foreign and domestic — to contribute to Canadian cultural creation. User-generated content is exempt.
Senator Wallin: Unfortunately, we’ve had testimony to the contrary on that, so it’s not black and white. That is why we’re trying to wrestle this. Because you can’t really then impose the same kind of regulatory standards on a high-cost, union-shop production that you would on smaller, user-generated content. “Users” — we don’t even have a definition of that, never mind Canadian content, in this bill. So you can see why we’ve got so many questions about this.
Ms. Noble: We’ve used the example many times that there’s nothing stopping people from posting their cat videos or things like that, and it shouldn’t be mixed with online streaming in our sense.
Ms. Kelly: Early on, the questions began with an assertion in your question that the cost of union production is resulting in declining use of unions in our industry. I just want to point out that’s actually not true. Union productions have been going really well in our country in the last couple of years because we have great talent. We have great crews; we have great directors. They come across the border from a variety of other countries in order to utilize our stages, our talent, et cetera.
So it’s not that the costs of our union agreements are overpriced by any stretch of the imagination. In our union, we set minimums, and I would suggest that it is the role of government in a social democratic society to make sure there are minimum protections for its people, including when its people are at work.
I just want to point out that I don’t think that it’s fair to suggest that it’s not appropriate, when people are at work, to have minimum protections for them.
Senator Wallin: We won’t get into that; it’s another topic. I’ve done in-house production and I’ve done independent production, and I know what the broadcasters say and what they are prepared to pay. It’s a different world. Anyway, I will hand over to the next person. Thank you all very much.
Senator Sorensen: Thank you, everybody, for being here and joining us this evening. I understand the explanation given for deleting subsection 3(1)(f.1). I do understand that, but I want to understand a little further the changes in the wording of the proposed subsection 3(1)(f). Could ACTRA and Directors Guild comment on the change of the intent with the way you’ve wordsmithed that?
For my purposes, as I look at it, it seems the predominant change concerns the words in the proposed subsection 3(1)(f):
. . . unless the nature of the service provided by the undertaking, such as specialized content or format or the use of languages other than French and English, renders that use impracticable . . . .
To me, the rest of it seems to follow pretty clearly the original wording. Maybe then elaborate on how your version improves the bill from your perspective.
Ms. Kelly: I’ll step in first for ACTRA. I would say you’re absolutely right. We would suggest that you delete proposed subsection 3(1)(f.1). We don’t believe that two systems — one for Canadian broadcasters, another for streamers — are appropriate. We think we have a system in Canada that has been long-standing, and it has honoured our culture and protected our culture. It has brought a lot of work to Canada. We think that system should be preserved.
So in taking out the two-system approach, we then go to the language in proposed subsection 3(1)(f). Rather than saying “each Canadian broadcasting undertaking,” we would take “Canadian” out because it should be “all broadcasting undertakings shall” — and then we would say:
. . . make maximum use, and in no case less than predominant use, of Canadian creative and other resources in the creation, production and presentation of Canadian programming, . . .
We then would delete the rest of that because we believe that the test should be as it is now, “. . . and shall contribute significantly to the creation, production and presentation of Canadian programming . . . .” And then we wanted to give some flexibility in our language, hence, “. . . to the greatest extent that is appropriate for the nature of the undertaking.” We think that gives some flexibility to allow for decisions to be made that are appropriate.
We are strongly of the view that, in our country — we’re a proud country and a talented one, but our population is about one tenth of that of our neighbours to the south — it’s very important for us to continue to preserve and protect our culture. It brings in lots of economic benefits to our country, which is important to our tax base and to workers in this country.
If you give us an opportunity to participate on the world stage, I would say creating shows like “Schitt’s Creek”— we’re obviously very proud of that show — it just shows that when you support Canadian talent and storytelling, we can show Canada and showcase Canada on the world stage.
Senator Sorensen: Thanks. That was a great explanation. Unless somebody else wants to jump in, I am happy with those comments.
If anyone else at the table was wondering about the clause in Bill C-11 that excludes online undertakings from the SAA, the Status of the Artist Act, it is clause 31. I was trying to find that. Thank you.
Senator Simons: The comments from Ms. Kelly a moment ago about the success of unionized production and then the comments from Mr. Forget about the decline in original Canadian productions telling Canadian stories make an interesting contrast because I think that we would all acknowledge that, barring the disruptions of COVID, this has been a golden age for Canadian film workers — perhaps not for independent producers, but for all of the people who work on film in Canada.
The presence of companies like Disney and Netflix doing production work in Canada has been a bonanza for the people who work in film to the extent that I have heard from some Canadian independent producers and directors that they find it very hard to get crews because the crews are all so busy working on internationally funded productions.
So it raises an interesting question for me. Is the concern here to support the film industry, which is extremely healthy at the moment, versus the need to protect Canadian intellectual property and Canadian storytelling? Then, what is a Canadian story? We all know all the anecdotal examples of productions where the IP, the intellectual property, is owned by the American streamer, but the content is manifestly Canadian, telling Canadian stories.
Mr. Sonoda: I’m sorry, senator. What is the question?
Senator Simons: The question is what you think the better goal should be. In some ways, there have never been more Canadian film professionals at work, whether they are making Hallmark Christmas movies, a zillion a year, in places like Victoria and Ottawa or whether they’re making big-budget productions in Vancouver and Toronto and Calgary.
My question is this: Is there not a contradiction in what we’re attempting to do here at a time when you’re decrying the lack of Canadian stories? But there are all kinds of big production companies filming Canadian stories — clearly Canadian stories — in Canada. What is the problem that we’re trying to solve?
Mr. Sonoda: Clearly, the decline of 10% per year of Canadian stories tells us that there is an imperative to protect the Canadian voice, the cultural sovereignty of our nation. Certainly, I think we can do both.
I think we are very good at both of those things, telling our stories and being artists, creators, technicians and cast members of people that come here to tell their stories.
I don’t think they’re separate things.
Senator Simons: I’m perplexed by this claim that there’s a 10% decrease in the telling of Canadian stories when it seems to me that there are more Canadian stories than ever being presented to us, not just in big-budget film and television production but in all of the content that’s being created by independent digital producers on YouTube.
Ms. Noble: I’m not 100% sure about that, but it’s great to be a service industry here in Canada, but that’s not all we want to do. We want to be able to produce our own productions. Having big media giants come up and not pay their fair share — if they paid their fair share, it would go back into our system to help fund ourselves to create Canadian stories with Canadian producers, Canadian directors, Canadian talent. At the moment there is much more of a service industry where we provide the platform for foreign films and movies of the week and things to come up to Canada to do that, and then they get all the crews, but then the talent is smaller. Sometimes their own directors come up. We want to change that and support Canadian creatives across the board, across the country.
Ms. Kelly: I agree wholeheartedly with what Eleanor and Warren both have said. I don’t think this is “you can only pick one of these items from the shelf” kind of situation. I don’t think we should pick money over culture. I think as a country you can never suggest that you want to take money over culture. I would say this to you. First of all, we’re happy to follow up after this meeting and get you some statistics because the statistics are showing exactly what Dave was talking about regarding the decline of Canadian content. We’re happy to follow up on that for you.
What I would say is that it is so very important for us as Canadians for a variety of reasons, not just economic, but our stories put Canada on the global stage. When we do that, we are helping our Canadian government when it is going around on diplomatic trips talking to other governments because we are creating the image of Canada. We are telling our stories. We are making sure that our stories are important across the globe, and that across the globe people understand Canada and who we are as a country. That gives us some stature as our government goes around doing the important work that our government does.
It is also important for Canadians to not lose our culture. It’s important for my grandchildren to grow up on stories that talk about the things that are important to me as a Canadian and that were important to my parents as Canadians.
There are so many benefits that result from having Canadian content and good Canadian stories on our screens. It is economic for sure, but it’s also so much more fundamentally important than that to us as a sovereign nation and to us as Canadians.
[Translation]
Ms. Charette: I would like to thank Ms. Kelly for the diversity of her remarks because that means a lot to me. I would also like to make the point that deciding what product to put out, even if it tells a Canadian story — because telling a Canadian story is not just about using Canadian technicians and American actors — is about choosing what to produce and how to produce it. Large producers like Netflix use many parameters to make their production choices, which are based on consumer analysis and on references that can reach the entire planet because their market is the planet. So they don’t necessarily help bring forward the full range of our values and what we would like to see reflected of ourselves. There is an essential interest in having control over what we are going to put out, how we are going to do it, and what we choose to be “left field,” because we don’t talk about it. We talk about the big hits, the big productions, but the small productions that need to be put out there with government support is what makes us grow; that is what represents the fullness of what we have: professional productions and not just ones made on TikTok. So the whole ecosystem has to be maintained. Yes, the competition has been very tough for Canadian producers when faced with the big American production sites because they couldn’t find as much staff. We must continue to maintain Canadian production and give it a place in this ecosystem. That is essential, especially for Quebec production.
[English]
The Chair: Thank you, Senator Simons. I want to follow up on Senator Simons’ line of questioning.
I heard Ms. Noble, Ms. Kelly and Ms. Charette loud and clear. I think one of them pretty much said it shouldn’t be a question of money over culture, but the bottom line is you can’t build your cultural industries without money, and the federal government has finite amounts of money. At the end of the day, it’s all about money. If we are going to continue to build our cultural capacity, our film industry, our music industry, our production industry, our artistic industry of all segments across this country, we need to make sure they’re funded. I totally agree.
I look at our CanCon definition over the years in this country, and it actually diametrically works opposed to that objective. Because you look at something like “The Handmaid’s Tale,” that’s a product produced by an icon of culture in this country, Margaret Atwood. If you look at the definition of CanCon, it’s not considered Canadian culture.
I’d like everyone to comment on this example. A corporation, a production company based in Buenos Aires, Los Angeles, Paris, London that decides to invest a billion dollars in a production here in the Ottawa area, and they take a Canadian writer’s script, a Canadian director, a Canadian executive producer; all the actors are Canadians and they tell a Canadian story; that isn’t Canadian content based on our definition. So if our objective is to grow our culture and have it expanded around the world, yet we’re telling investors from the cultural industry, “If you come to Canada and you use Canadian artists, Canadian actors, Canadian producers, Canadian stories, Canadian locations because you believe in that Canadian product and all those Canadian elements and you invest in them, well, we don’t consider you a Canadian production.”
So I really can’t wrap my head around that. I don’t come from the arts industry. My background is business, but I know that, for example, if you’re a Canadian athlete and you’re playing tennis — and we have quite a few super athletes in the tennis circuit in the world — they’re sponsored by New Balance. Some are sponsored by Nike. Does that make any one of those Canadian tennis players less Canadian because the money that comes to sponsor their Canadianism and athleticism comes from somewhere else around the world, comes from Boston or Washington? All of a sudden that’s not Canadian content? I really can’t wrap my head around that. Somebody explain it to me.
Ms. Noble: In that regard, you would get sponsored by Netflix or Disney+ to do what you’re saying. A tennis player is Canadian but they’re sponsored by whomever from outside — same thing — and paying into our system so the government doesn’t have to pay out for everything.
The Chair: Again, those investors, Ms. Noble, when they come here, they’re creating jobs. Those jobs are generating taxes. The corporation itself is paying corporate taxes. The script writers they’re hiring are being employed and paying taxes, and that revenue that’s coming into the stream of our country is revenue that otherwise wouldn’t come here unless we give them something back for their investment. That’s how it works in business. That’s how it works in art. An artist will put on a fantastic show. A consumer will pay for it. The artist gets paid. The location gets paid. Everyone is happy.
Mr. Sonoda: I agree, senator, but without the intervention of the 1991 Broadcasting Act, what we’re talking about with Canadian television simply wouldn’t exist because without intervention these stories we’re talking about right now simply wouldn’t occur.
Listen, private companies don’t want regulation. That’s their goal. The goal of the government is to ensure the future cultural sovereignty and the equitable treatment of Canadian creators.
I know, Dave, you probably have another follow-up with this.
Mr. Forget: Thank you, Warren. I think it’s an excellent question, senator. I think really there are two pillars that we’re talking about here. We made reference to it. We brought up the subject of who makes it and who owns it. That’s what it comes down to. Who’s financing it, who owns it, and then who makes it?
Our shorthand for what makes something Canadian is something is Canadian when it’s Canadians who make it. Having the R&D done here, the development of the script done here, not written in another part of the world, working with Canadian artists, Canadian writers, directors, performers and so on to create that, with some flexibility, as is already provided for and built into the system.
I think what you’re alluding to is what we spoke about a few minutes ago about online broadcasting, reconciling a world that now includes online broadcasters. We all know that some of those players are foreign-based. We’re now bringing them into the system. One of the virtues of Bill C-11 is that it levels the playing field and brings the online players, both foreign and domestic, into the fold. They are generating revenue through advertising and subscriptions and can reinvest some of that into content that will appeal to their Canadian audiences that is made with Canadian crews and Canadian artists.
The last horizon is to say at the end of the day, if the financing is from an entity outside of Canada, and provided that all the things I just described are still in place, how do you reconcile that with the technical definition of whether something is CanCon or not?
“The Handmaid’s Tale” is an example many people use, and I think it’s appropriate for that reason. It’s a great question, and that’s exactly the kind of thing we’re dealing with here. What we’re hoping for is to create a situation where there is more flexibility to allow for more investment in the creation and support for original Canadian storytelling.
But the fundamental building block of that is who the storyteller is. Who are the artists who are creating those stories? From our perspective, as unions who represent artists — spoiler alert — it should be no surprise that we feel that process begins with the artistic process. It begins with authors. Writers and directors are the authors of audiovisual work. There is, as our former president used to like to say, “the ways and means”: how the financing comes together, how we’re able to mount a production, where we decide to film it and all the things that go with it.
You raise an excellent question, and that’s what we’re seeking to achieve in reconciling the broadcasting world, bringing the conventional in with the online players, bringing the foreign players into the fold and then dealing with the question of, all right, who is financing it, what the mechanism for financing is, and then who is making it.
I’ll come back to the first principle. In our view, Canadian content is content that’s made by Canadians. I hope that helps to clarify a little bit and gives you some comfort that we’re kind of on the same page.
The Chair: I can’t really say that we are, but I do appreciate the effort, though. I will turn it over to my colleague Senator Dawson, who has been patiently waiting.
Senator Dawson: I was hoping you weren’t on the same page. I was a little bit worried there.
First of all, I want to agree on the fact that when we modernized the legislation in 1991, it was to bring it up to date. But that’s many years ago, so now we have to do it again. Because if we are a successful production centre, if we do have a successful industry, it’s because we had coverage, that protection and promotion by governments to do it. That’s what we have to continue doing, not go back into a Wild West where the market will do it. If the market had decided — and here I’m speaking in English and I’ll be addressing the Quebec issue. Today, this week in Quebec, it’s the biggest week of independent production in French in the last 30 years and all done under the existing framework. The competition between all the foreign networks in Quebec means that a lot of shows this week in Quebec have a million people listening to them. It’s a different society than the rest of the country, obviously. It’s a different world. We’ve been doing that. Yes, there’s a protection because of language.
[Translation]
We have natural protection owing to our language, but we have it because successive governments, Conservative or Liberal, have supported and protected the Canadian cultural industry to become sponsors. We see this in Quebec: It is a success.
We also see that this does not prevent us from being players on the international stage. At the Toronto International Film Festival, Canada is recognized as an international competition centre because we are actors; we are actors because we do production in Vancouver, in the Rockies, in Quebec, in Montreal.
Someone said earlier that we would be provided with the numbers on the percentage drop. I would like you to share that data with all of us, Mr. Clerk. There is a decrease and there is an increase. In 1991, when the legislation was passed, the internet and Netflix did not exist. All these organizations are now the largest producers and they are not subject to our regulations. We need to ensure that the future is protected as we have done in the past. When the CRTC was created, people said that we didn’t need it, that we could just let the market take care of this. It wasn’t the market forces that made Canada successful. It was government intervention.
Ms. Charette, I think you said earlier concerning your membership that there has been a decline. This week in Montreal, I said that programs are competing in a small market. That must be good for your members.
Ms. Charette: I did not say that our membership had declined.
Senator Dawson: Oh, okay, I apologize. One of the witnesses said earlier that there has been a decline over the past 10 years in terms of production. The Quebec industry’s health is a good example, after all. A decline is being experienced. What worries me is not the present, it is the future, because of Netflix and Amazon. If we do not modernize our legislation, we may fall into the same trap as the witnesses who appeared earlier by thinking that market rules will protect us, as that is false. We are experiencing success because we adopted legislation — of course, I am here speaking as the sponsor of the bill.
Concerning the right of the artist, we will have to look at some amendments that were adopted at the last minute and determine how they could be provided with a framework or at least clarified when the minister appears before the committee, and find out why we have abandoned our artists. I apologize, Ms. Charette, as I thought you were the one who talked about a decline.
[English]
Whoever mentioned the fact that there’s a decline, I think the health of our industry is quite clear. But the threat to our industry in the last two years — because we’ve been debating this for four years, and the legislation has been in front of us for two years, and we have been losing market share. We’ve been losing money during those two years. We have to act.
I’m starting to ask questions like the chair. I’m making a speech instead of asking a question. The question is: What do you think about that, honourable witnesses?
Mr. Sonoda: Thank you, senator. I appreciate the question. The 10% reduction was a quote from our submission and intervention, and it’s from the CRTC, from your commission. We’ll get those numbers for you.
I will also say as a director in Canada, as linear broadcasters migrate to online undertakings, that’s where this reduction is coming from. Without a Bill C-11 enabled to protect the telling of these stories, we will see this basically fall to almost nothing. That’s what we’re trying to protect here.
Also, there’s an imbalance of production budgets, which is a completely different conversation. But an infusion of support for Canadian stories and storytellers will help us tell these stories at a competitive level when you go up against huge shows that are $15 million, $16 million an episode, and I myself am making episodes at half a million dollars or $1 million, if you understand that sort of imbalance.
Ms. Kelly: I’d like to add that we agree completely that modernizing the Broadcasting Act is long overdue. We are pleased that Bill C-10 didn’t just die on its own, and Bill C-11 has come to light. As you’ve heard us say, we think there needs to be a couple of changes to it. But like you, senator, we believe we need this legislation passed, and we need it passed as quickly as we can.
Mr. Sonoda: The DNA of Bill C-11 is from the original Broadcasting Act, which stood for 31 years and also stood the succession of different governments. We believe in this as a way to preserve what you talked about, the integrity and the robustness of Canadian storytelling. It’s here because of what happened before, 31 years ago.
What you’re tasked with now, senators, is to make sure the next 31 years work to advance the Canadian voices and Canadian talent who want to tell these stories.
Ms. Kelly: Just look at our forestry system and you see what happens when there’s inaction of government to protect an important resource or industry in our country, so I 100% agree with you, Warren.
Ms. Noble: I’ll add that it helps grow our industry here rather than having people leave the country to make it as a director, producer or writer. I’m a performer. I left for a while to L.A. I chose to come back because I wanted to work here in my country, which I love, on Canadian stories that are important to us — as Marie said, stories that reflect who we are and our country, and that we can share globally.
It truly is the time. If we don’t pass this soon — this is truly our time to stand on the global stage right now — it would be a shame to miss our opportunity and have everybody advance before us, and we just become a service industry here in Canada and lose our Canadian content altogether.
[Translation]
Ms. Charette: I would like to add that, from Quebec’s point of view, we feel that it is absolutely essential for this legislation to be passed to protect the industry and to protect Quebec culture.
The Chair: Thank you so much.
[English]
I indulged a little bit in comments more than questions, as did my colleague Senator Dawson. I’m sure that he as the sponsor and I as the critic will continue to carry on the debate at second and third reading.
I can tell you that every Canadian parliamentarian is very proud of our arts and culture industry. I think we all have the same objective here, and that is to continue to strengthen it. Sometimes, we have different opinions — Senator Dawson wants to protect it; I want to open it to the world — but I’m sure we will find a common ground somewhere at the end of the debate.
Thank you very much to the witnesses for coming before the committee. We will continue our work. If there’s any additional information throughout the course of our study that you want to offer us in writing to our clerk, feel free to do so.
Colleagues, thank you for a good day’s work today. We will be back tomorrow at 10 a.m. to continue our study. Thank you.
(The committee adjourned.)