THE STANDING SENATE COMMITTEE ON TRANSPORT AND COMMUNICATIONS
EVIDENCE
OTTAWA, Thursday, September 15, 2022
The Standing Senate Committee on Transport and Communications met with videoconference this day at 1:31 p.m. [ET] to study 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: Good afternoon. I am Leo Housakos, a senator from Quebec and chair of this committee. I would now like my colleagues to briefly introduce themselves.
[Translation]
Senator Miville-Dechêne: Julie Miville-Dechêne, senator from Quebec.
Senator Dawson: Dennis Dawson, senator from Quebec.
[English]
Senator Harder: Peter Harder, Ontario.
Senator Simons: Paula Simons, senator from Alberta, Treaty 6 territory.
Senator Sorensen: Karen Sorensen, senator from Alberta, Treaty 7 territory.
[Translation]
Senator Clement: Bernadette Clement, senator from Ontario.
[English]
Senator Dasko: Donna Dasko, representing Ontario.
Senator Wallin: Pamela Wallin from the province of Saskatchewan.
[Translation]
The Chair: We are meeting 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. For our first panel this afternoon, we are pleased to welcome the following witnesses: Carol Ann Pilon, Executive Director of the Alliance des producteurs francophones du Canada; Hélène Messier, President and Chief Executive Officer of the Association québécoise de la production médiatique; Amélie Hinse, General Director of the Fédération des télévisions communautaires autonomes du Québec; and Catherine Edwards, Executive Director of CACTUS, the Canadian Association of Community Television User Groups and Stations. Welcome.
[English]
Thank you for joining us today.
[Translation]
Carol Ann Pilon, Executive Director, Alliance des producteurs francophones du Canada: Thank you, Mr. Chair and honourable senators. Thank you for this opportunity to contribute to the process leading to the passage of Bill C-11. I am Carol Ann Pilon, Executive Director of the Alliance des producteurs francophones du Canada, an organization representing Canadian independent francophone producers of the official language minority communities, the OLMCs. Since 1999, the alliance has enhanced the vitality of the francophone screen industry and contributed to its spread across Canada and around the world. Our work consists in promoting the outstanding content produced by our members and defending its cultural and economic value to public policy makers, thus ensuring that a diverse range of francophone voices can be heard across the country.
APFC welcomed Bill C-11’s historic focus on the Canadian audiovisual ecosystem, particularly its formal consideration of the OLMCs and the objectives it set for the broadcasting system as a whole to reflect the specific needs and interests of those communities. We were even more pleased when it was passed on third reading because it is a bill that, when first introduced in November 2020, contained no provision to ensure that content would be created by and for the OLMCs or to guarantee access to that content.
The representatives of both OLMCs, those of francophones outside Quebec and anglophones in Quebec, worked together to ensure that provisions concerning them were included in the bill. The members of the Standing Committee on Canadian Heritage voted unanimously for the amendments the OLMCs had proposed, and no objections were raised to those amendments during the debates in the House of Commons. The provisions in question set clear directions on which the CRTC may rely in introducing specific and effective measures to enhance the vitality of the OLMCs. One of the Senate’s roles is to protect minorities. It is essential that these provisions be maintained in full in this bill.
Pressure is mounting on the audiovisual sector and the situation is increasingly unfair. More and more services are produced outside Canada, online streaming is expanding at breakneck speed, and not all undertakings that benefit from this transformation are required to make significant contributions to Canadian expression or to further Canadian broadcasting policy objectives.
Suddenly subject to a regulatory framework, every undertaking that carries on broadcasting activities in whole or in part in Canada is now essential to ensuring a truly inclusive, equitable and diversified system. In the last evening of debate on Bill C-11 in the Standing Committee on Canadian Heritage, an amendment was adopted that would effectively end political support for independent production in Canada, which has been a key component of our broadcasting system since 1991.
The amendment, which was never discussed in committee, was adopted by 6 votes to 5 in less than five minutes. The economic impact of that amendment will be devastating for the independent Canadian production sector because the new wording would equate its value with that of production affiliated with broadcasters and online undertakings, and the policy driver of 30 years of licensing conditions imposed by the CRTC would evaporate.
Given the serious nature of the amendment and the total absence of informed debate on its impact, we ask that the committee restore subparagraph 3(1)(i)(v) to Bill C-11. APFC is a member of the Coalition for the Diversity of Cultural Expressions, the CDCE, and we support the demands it has made to improve Bill C-11.
Our first request is that fairness be restored between foreign and Canadian online undertakings in their use of Canadian talent. Differential treatment could result in lower requirements for foreign online undertakings regarding spending on Canadian programs, contributions to content development support funds and efforts to promote Canadian programs and in a decline in the role of creative resources in programming creation, production and presentation. Our second request is that the option of appealing to the Governor-in-Council from CRTC orders, not merely licensing decisions, be expanded.
Our third request is that the public hearing phase be included in the process for making orders setting conditions for the services of broadcasting undertakings, as is currently the case for licences.
Lastly, we believe that the approach taken to social media in the bill should not be further restricted so as not to limit the CRTC’s ability to regulate social media broadcasting activities.
The modernization of the Broadcasting Act is long overdue and must be implemented to avoid greater negative impact on the sector. The bill must be rooted in reality. Thank you for your attention, and I’ll be pleased to answer your questions.
The Chair: Thank you very much.
Hélène Messier, President and Chief Executive Officer, Association québécoise de la production médiatique: Good afternoon. Thank you for having me here today. My name is Hélène Messier, and I am the President and Chief Executive Officer of the Association québécoise de la production médiatique. AQPM advises, represents and supports more than 160 independent Quebec film, television and web production companies. Our members also produce content such as documentaries and web series for online platforms.
Consequently, many of them are also digital first creators, creators who earn a living from content they share online. National Canadian production, which represented 56% of audiovisual production spending committed in Canada in 2017, has declined in recent years and now accounts for slightly more than 42%.
As a result, undertakings headquartered outside Canada now account for 58% of spending in the Canadian audiovisual sector. While the level of broadcasters’ domestic production, mainly of news, public affairs and sports programs, has remained more or less stable, independent production companies have suffered over the years and now represent 31% of production volume compared to 40% in 2017.
However, independent production companies are central to the broadcasting ecosystem and ensure that many basic objectives of Canada’s broadcasting policy are met. These companies provide all Canadians with varied programming by producing what are known as national interest programs: drama series, documentaries, music and variety shows as well as youth programs. They produce in original French, English and Indigenous languages and are broadcast in all regions of Canada.
Until last June, this fundamental role of production companies was acknowledged in subparagraph 3(1)(i)(v) of the Broadcasting Act, which provided that the Canadian broadcasting system should “include a significant contribution from the Canadian independent production sector.” That provision served as the basis for the obligations imposed on broadcasters with respect to independent production for more than 30 years. The CRTC thus required that all broadcasters allocate at least 75% of their national-interest program spending to independent production companies. As a result of those measures, tens of independent production companies have been established over the past few decades and have provided the equivalent of more than 82,000 jobs annually. Unfortunately, in the expedited consideration of amendments to Bill C-11 by the Standing Committee on Canadian Heritage, that provision was amended and now reads as follows:
(i) the programming provided by the Canadian broadcasting system should . . .
(v) include the greatest possible contribution from the Canadian production sector, whether it is independent or affiliated with or owned by a broadcasting undertaking;
By including all types of producers in this provision, without distinction, Parliament, in barely five minutes, without preliminary debate or consultation of the main interested parties, undermined the basis of the current system, which enabled Canadian undertakings independent of broadcasters to develop, to provide diverse programming and to hold intellectual ownership of their television works. Furthermore, the English and French versions of this amendment differ significantly and may give rise to sharply different interpretations.
AQPM therefore requests that the initial wording of this provision be restored.
Like the other member associations of the Coalition for the Diversity of Cultural Expressions, AQPM also supports three amendments. We believe that Canadian talent — this relates to paragraph 3(1)(f) — should be preferred in creating, producing and broadcasting Canadian programming, but that Canadian and foreign broadcasting undertakings should not be treated differently. We also think the government should subject the CRTC to greater oversight by allowing appeals to the Governor-in-Council from CRTC orders and by providing that mandatory public hearings be held for establishing the conditions of orders that are imposed on broadcasting undertakings. This concerns sections 18 and 28.
In addition, the use of social media to broadcast original and professional audiovisual content and thus reach audiences that have abandoned the legacy media is a phenomenon that will grow. It is therefore essential that the bill allow the CRTC to include in its area of jurisdiction both subscription streaming services such as Netflix, Amazon Prime Video and Club Illico and social media companies such as YouTube, Facebook and TikTok. It should not be forgotten that TikTok is now one of the platforms with the largest youth audience, which has grown 55% in the past year.
Thank you very much. I am now ready to answer your questions.
Amélie Hinse, General Director, Fédération des télévisions communautaires autonomes du Québec: Thank you very much for inviting us to appear today. As directors of two community television associations, we will mainly be commenting on community television. We have worked closely upstream with our community radio colleagues, and many of our requests overlap, although they aren’t necessarily worded the same way.
To begin with, we are very satisfied with the definition and description of the role of the community element that were added on third reading of the bill. For us, the definition and description of roles were problematic in the previous acts. Community radio is defined in the CRTC policy as being non-profit and belonging to the community. The number of community radio stations has essentially remained the same, at approximately 200, with some 60 Indigenous stations. On the other hand, community television was traditionally managed by the private sector and subsequently suffered from the massive consolidation of ownership and the technical interconnection of cable systems.
More than 300 community channels used to be managed by the private sector. Only 10% of that number remain today. The vast majority were shut down in the smaller communities. The remaining stations, in the more populous regions of the country, have become regional specialty channels, like the sole provincial Rogers channel in New Brunswick.
Last week, Vidéotron informed eight independent community television stations that it would terminate 100% of their funding. That’s $1.2 million that won’t go into community and local production in the municipalities of the greater metropolitan region that are virtually never covered by the major private networks. The cable companies argued before the CRTC that they were closing the stations for profitability reasons. However, the communities were never consulted, and that’s the problem.
True community media, as they are known internationally, are owned and operated by non-profit organizations established in their communities. We are trying to fill this gap for our members, in both the federation and at CACTUS. We represent more than 60 independent community television associations that are supported in Quebec by the Ministère de la Culture et des Communications.
[English]
Catherine Edwards, Executive Director, Canadian Association of Community Television Users and Stations: The Canadian Radio-television and Telecommunications Commission, or CRTC, asked us whether community television is still necessary in an age when you can shoot videos on your phone and upload them to YouTube, and the result of their thinking was that in 2016, the CRTC diverted the vast majority of Canada’s community television budget — at that time over $150 million — to support private news networks. The value of community television is being rediscovered thanks to programs like the Local Journalism Initiative, as we realize that essential democratic and civic coverage is not happening on social media, as concerns about fake news grow and as we grapple with the need to make our society more inclusive.
Community media are recognized by the CTRC and are accountable to locally elected boards of directors. They are safe spaces where minorities who fear attack on social media can seek production support and visibility. They are an antidote to the silos created by social media. They are a common platform for the whole community. For these reasons, we are really pleased that the community element is finally clearly defined in the act. Community-owned television, where all members of a community can express themselves, is recognized as a viable, democratic and sustainable broadcasting model.
Community television has long been neglected in policymaking because the Broadcasting Act was silent regarding its role. The new paragraph 3(1)(s) finally highlights the work done on the ground by communities and complements the descriptions of the roles of the public and private elements that were already there in the 1991 act.
In conclusion, we want the amendments to Bill C-11 as reflected in third reading — which define and describe the role of the community element — to be retained. We are seeking no further changes.
The only issue we would flag to you all is that the definition for the “community element” that now stands depends on the definition for “broadcasting undertaking,” which in turn depends on the definition of “online undertaking.” Since various parties are questioning the definition of an “online undertaking,” if it were amended, it could affect the community element. The community element is the original publisher and aggregator of user-generated content locally. We are incorporated and accountable with ongoing programming commitments to the CRTC and to our audiences, and we are therefore broadcasters. Our own legal counsel and Heritage’s legal team have assured us that those of our members that distribute only online — there’s a minority of them that are online only — will be caught by the new Broadcasting Act. We want them to be so that new policy making that flows from this act will apply to them. So if the definition for “online undertaking” were to change as a result of the work of this committee, we would just ask that we be consulted so that our online-only members won’t be left out.
Thanks a lot for your attention, and we welcome your questions if anything wasn’t clear. Thanks a lot.
[Translation]
The Deputy Chair: Thank you, everyone, for your presentations.
[English]
Senator Wallin: I want to go back if I can to Hélène Messier, just to ask her a question. She talks about having digital-first creators in her membership.
What is it that those folks do? What are they creating?
[Translation]
Ms. Messier: Producers are currently urged to create media content that is digital content. My producers make web series and digital magazines that are broadcast on various platforms. They also contribute professionally to developing those platforms. We also realize that conventional broadcasters increasingly want to break into social media such as TikTok, for example. They ask producers to produce content for that type of platform or to do it internally. The people who appear before you on behalf of digital creators aren’t the only ones. There are others in our organizations, both that of Carol Ann Pilon and my own.
[English]
Senator Wallin: Yes, that’s why I was asking, really, because you have independent people that are creating their own TikTok videos in their living rooms.
We heard some of this testimony yesterday as well, and I would like to hear from all of the participants today, really. It sounds to me as if your real concern is with the legacy and more traditional broadcasters, as we know them, and the regulatory process around them. Is that true, and are you looking to have exactly the same kind of relationship with the internet? Because I’m puzzled as to how that might happen.
[Translation]
Ms. Messier: The internet is two things. On the one hand, it comprises on-demand online streaming broadcasters such as Netflix, Crave and Prime. These platforms are regulated in many countries around the world. Yesterday someone asked whether there were any other examples around the world. I believe Mr. Denton answered that no one has tried to transpose the conventional model to the digital world. That’s not entirely true. For example, all European Community countries have incorporated or adopted in their national legislation measures respecting on-demand online broadcasting platforms such as Netflix and Amazon.
What’s newer are the social media. We aren’t saying it’s easy, but we are saying it’s necessary to include them in the framework of the present act. Failure to include them will deprive us of access to information on their business models and business habits. We don’t want to transpose the existing model to those sectors; we think the spending and discoverability measures that must be required have to be tailored to the type of service and broadcasting they provide. We don’t want the same system; we simply want to be able to regulate them and learn more about their practices so we can legislate where we should.
[English]
Ms. Edwards: I could comment on that.
If I understand your question, you want to know if we are intervening to try to preserve an old structure.
I guess the way we look at it is that some of our members — not-for-profit, community-owned TV stations — still broadcast over the air. Some are on cable. Some are only on cable. Some are OTA and cable. Some are on satellite. All of them also stream, and some of them only stream. So we are very much taking advantage of the new environment to distribute content.
I guess what we see is important and why we want to be recognized in a new Broadcasting Act is that we see the Broadcasting Act as a public service commitment to have a Canadian media ecosphere. The platforms change, but what doesn’t change is the importance of community ownership and the public service commitment that we have to communities to let them have a voice, to help them have a voice, and give them access to distribution platforms.
Our basic structure and commitment haven’t changed. It is just how to migrate that to new platforms. That’s why we want to be part of the Broadcasting Act so that we can continue to have a public service relationship with Canadians that is recognized by the CRTC.
Senator Wallin: Yes, I think the issue there is that you are supported in one way or the other through government funds or local media funds that are distributed locally. How do you apply those rules to people who have no such relationship with government or funding sources?
As I say, the individual, independent producer creating something in their own kitchen or living room doesn’t have access to any of the funds that are out there or any of the productions that are provided. I’m surprised that you, who work in an industry or in a part of the industry which is very low income, if I can put it that way, want to be subjected to the rules and potentially even the punishments that this legislation talks about.
Ms. Edwards: It’s not punishment. It is about discoverability of Canadian content, or CanCon; we are CanCon.
And just for the record, the first federal program that has ever offered any funding to not-for-profit community broadcasters is the Local Journalism Initiative. The reason there are only 25 in Canada from a high of 300 in the old cable community days is because there is no funding for them; they survive on bingo and things like that. We have 40 in Quebec alone, because the Quebec provincial government supports them. So we are virtually outside that funding structure as well.
In 2011, the CRTC published a document. There was a think tank. They invited a lot of people to the industry to ask, “How are we going to manage maintaining public service broadcasting?” Meaning, broadly speaking, the private sector has public service commitments; Radio-Canada, CBC has public service commitments; the community sector has public service commitments. How are we going to maintain that in an over‑the‑top environment? They flagged at that time that it might be more difficult to regulate the private sector and that the role of the public and community sectors would have to increase with government support.
That’s the way we see this environment evolving. To have CanCon, there is going to need to be more government support.
Senator Wallin: That’s the model I’m asking about. We are also watching governments fund not just community broadcasting, but support and subsidize mainstream “journalism.”
Is that really a model that you see as productive, that gives journalism the separation between church and state that is so necessary and fundamental?
Ms. Edwards: Well, the Local Journalism Initiative, we have been finding, is working really well so far. CACTUS and the Fédération are one of the six administrative organizations chosen to be between the news organizations and government, so they are at arm’s-length, and we have found it has been working really well so far.
When we ask Canadian Heritage for direction on, “Hey, should we do this; should we do that?” they always say, “Well, really, it’s up to you to implement it, because we are not to have any say on editorial decisions.”
So we have been finding it is working really well. We have 25, roughly, small community TV stations in remote parts of Canada where there was no, sort of, hard core, investigative civic journalism before the program started, and now there is. There was no commercial way to fund it, and now they have journalists.
[Translation]
Ms. Hinse: I don’t think the future is simply a matter of getting funded by the government. It’s also important to maintain journalistic independence. However, for us, being recognized in this act means we can then be included in the next one. Today we’re discussing Bill C-11, but we’ll be discussing Bill C-18 in six months. If we aren’t part of all that, we won’t be entitled to the funding that will be coming directly from the platforms that earn the money that the broadcast distribution undertakings, the BDUs, previously made through TV advertising. So I think that’s very important since it’s all intrinsically linked together. We think that’s obvious.
I’d like to go back to the example of Vidéotron, which will be terminating funding for independent community television in the coming weeks. This all stems from the 2016 regulation, when CRTC asserted that too much money was being invested in community television. Why did they say that? Because no distinction was made between community television belonging directly to the BDUs and independent community television governed by citizens in their own communities.
However, in the absence of a clear distinction, perhaps the CRTC felt that too much money was being invested in the community television sector. I don’t think that’s the case, but that’ll be the basis for cutting funding to community television stations, which will then have to lay off half their employees in the coming weeks and stop covering local news.
We know there’s a current local news crisis as a result of funding, because funding now comes from elsewhere and the BDUs won’t be able to recover that funding, whereas they previously could. As a result, there will be fewer journalists and less media coverage on the ground. The smaller communities will be the first to suffer because it’s impossible to be profitable in that sector.
[English]
Senator Wallin: I’m always surprised when I hear the concerns and criticisms you raise about the CRTC, but you support this bill, which will put the CRTC in charge of everything. It’s very costly and this is a very limited, if any, ability to appeal those decisions.
Ms. Edwards: I agree with that. We’ve had a tough time raising any issues to do with community TV at the CRTC for ten years because, frankly, we find it extremely cable industry dominated. But the reason that they were able to make so many decisions which we felt weren’t in the public interest as far as local news and media service to communities is because there was nothing in the 1991 Broadcasting Act about the role of community TV and what it should do.
For example, CBC has a big, developed section of what it should do and its roles. There wasn’t anything. They were making it up as they went. So we feel that it’s important that the act have sufficient guidance as to what the role of our element is so that the policymaking that flows from it will be informed, and wise, so to speak.
Senator Wallin: What we’re seeing here is that groups like yours, and others that we’ve heard from, seriously want reform of the Broadcasting Act, and I don’t disagree with that. It’s just that I don’t know that you can end up regulating the internet to accomplish that. I think we have two parallel streams here.
Thank you for all your comments, I appreciate it.
[Translation]
Senator Miville-Dechêne: I want to question Ms. Pilon and Ms. Messier to be sure I’ve understood. I want to be sure we’re talking about the amendment you don’t like.
Are we in fact talking about the amendment on page 7, in subclause 3(5.2) of Bill C-11, subparagraph 3(1)(i)(v)?
Are we in fact talking about the amendment that begins with “include the greatest possible contribution from the Canadian production sector, whether it is independent or affiliated with or owned by a broadcasting undertaking”?
Ms. Pilon: Yes, we’re referring to that provision.
Senator Miville-Dechêne: I really want to understand. I understand that the former version simply concerned independent producers and that there’s a difference in the new version, where the same rights are granted to all producers.
Having said that, if my understanding is correct, the purpose of Bill C-11 is to favour Canadian production. So I’d like you to explain to me how increasing the number of producers who must be picked first hurts Canadian production. I’d briefly like to hear what both of you have to say on the subject.
Ms. Pilon: Actually, the independent production sector has to share that obligation or objective with companies affiliated with the broadcasters and, by extension, with online undertakings as well.
So the former provision specifically concerned independent producers and ensured, through licensing, that broadcasters had specific obligations with regard to independent production. Now those obligations would be, as it were . . .
Senator Miville-Dechêne: Diluted?
Ms. Pilon: Yes, absolutely.
Ms. Messier: In fact, the policy would be meaningless because everyone would be subject to it, whereas the Broadcasting Act is designed to develop Canadian programming. What we wanted to build in 1991, and what we wanted to develop, was a strong broadcasting sector. What this says is that all producers will be on the same footing irrespective of who engages in Canadian production.
It took 30 years to build independent broadcasting undertakings. Under the new regime, affiliated producers would be producers that in fact belong to broadcasters in whole or in part.
Senator Miville-Dechêne: I understand what you’re saying, but we’re still talking about Canadian producers. These are the biggest producers because they’re associated with broadcasters, but they’re still Canadian producers. Am I wrong?
Ms. Messier: They may belong to broadcasters entirely or they may produce internally. So we’re going back to the time, for example, when Radio-Canada produced all its soap operas and variety programming internally, and we wanted to distinguish ourselves on that basis.
In French, it says “producteurs canadiens,” whereas, in English —
Senator Miville-Dechêne: It refers to the Canadian production sector.
Ms. Messier: We had some discussions yesterday, particularly about what the Canadian production sector was. Is a foreign undertaking that produces in Canada part of the Canadian production sector? As you’ll recall, questions were asked yesterday about whether we’re referring to the industry as a whole, the production industry in Canada, or about Canadian producers.
Since the English and French versions of this new subparagraph are very different, that might mean that, if a foreign undertaking has a production company in Canada, that constitutes a contribution to the Canadian production sector by a producer that will thus be the property of a broadcasting undertaking.
So it’s not really clear, and that has the effect of undermining the objectives we’ve set because the independent production companies develop talent and projects. They do a lot of things that other production companies don’t do.
For example, when a major production company came to recruit Jean-Marc Vallée or Denis Villeneuve to make a movie, those were talents that were developed by independent Canadian producers that reinvested their profits in developing creators. That’s what we wanted to develop in Canada, and that’s what the Broadcasting Act aimed to support. Now we’re adding another direction by putting all producers on an equal footing, possibly including, according to the English version, foreign producers who produce in Canada.
Ms. Pilon: The independent production sector guarantees a diversity of voices. The affiliated production companies are built in the major centres, and what independent production guarantees is really a representation on the screen because these are people who are not necessarily affiliated and who may be dealing with the broadcasting undertakings. These, of course, are our clients. It is important to support this content and to ensure that it has a special and predominant place in the act’s objectives.
Ms. Messier: Indigenous production companies are independent production companies. Production companies owned by people from communities seeking equity are independent production companies, and that’s what we wanted to develop and promote here in Canada precisely to ensure this diversity of voices.
Senator Miville-Dechêne: I understand. Could you tell me how many independent Canadian producers there are, as a percentage of all producers, to give me an idea of your weight in the market?
Ms. Pilon: Are you referring to production volume?
Senator Miville-Dechêne: The number of independent producers, or their position in the production system, compared to affiliates and entities that actually belong to broadcasting undertakings.
Ms. Messier: It’s hard to say because we aren’t necessarily aware of all the agreements the broadcasters have entered into with production companies. I can tell you the number’s trending higher. In recent months, several independent production companies have become less independent, or not independent at all, because they’ve been acquired in whole or in part by broadcasters. So it’s very hard to say.
As for internal production volume, for the moment, since there haven’t necessarily been any incentive to do more, we mainly see news and information programs, news produced by broadcasters, precisely because the other types of programs, dramatic series and other programs, are produced by independent producers.
Will we return to an earlier model in which broadcasters had studios and produced internally? I don’t know, but that would be extremely harmful for the industry.
Senator Miville-Dechêne: Thank you very much for providing those details.
Senator Clement: I’d like to thank all the witnesses. My question is for Ms. Pilon.
[English]
But I would like to thank Ms. Edwards for her comment around community television being an antidote. I’ve been saying repeatedly that I’m worried about these too-cozy silos where we get our information, where we experience creative content and where, quite frankly, emerging artists and racialized and Indigenous artists have had trouble accessing. Thank you for that.
[Translation]
Ms. Pilon, my question pertains to clause 5.2 of the bill, about consulting Canada’s official language minority communities when the CRTC is making decisions that could adversely affect them. Why is this clause important for official language minority communities? Can you explain why it needs to be included in the bill?
Ms. Pilon: Thank you for the question. I was expecting it because I looked over the CRTC chair’s testimony in June. We did some research, and I’m going to give you a fairly exhaustive answer to explain the logic behind it.
The consultation process described in clause 5.2 of Bill C-11 repeats the requirements articulated by the Supreme Court of Canada in Haida Nation v. British Columbia to ensure that there is “meaningful consultation,” which is what is it is called in English. It’s a consultation framework that OLMCs have been demanding for a long time in connection with Bill C-10, and it is now incorporated into Bill C-11 and the Official Languages Act modernization process.
To begin with, in litigation between the CRTC and the Alliance nationale de l’industrie musicale before the Federal Court and the Federal Court of Appeal, the CRTC publicly argued that the Official Languages Act, a quasi-constitutional statute, did not apply to it, including matters pertaining to the consultation process, and that the Broadcasting Act took precedence. Accordingly, to avoid any future judicial debates in which the CRTC might argue that the new Official Languages Act provisions with respect to consultation ought not to apply to the Commission, the government has added them to the Broadcasting Act in Bill C-11 and in its previous version, Bill C-10. The House of Commons has adopted these provisions twice.
As for the justification, linguistic rights and procedural equity — because that’s what was discussed in the testimony provided by the CRTC — are completely distinct concepts. It is important to recall at the outset that the Supreme Court of Canada has for decades tirelessly repeated that linguistic rights are completely distinct from the equity process, because these language rights have a totally distinct origin and role, and their purpose is to protect Canada’s official language minorities and provide equal status for French and English. Indeed, the Supreme Court has clearly underscored the fact that it would be a mistake to link the requirements of natural justice to linguistic rights, or vice versa, or bind one type of right to another. These two types of rights are conceptually different and linking them would distort rather than strengthen each of them.
In view of the distinct constitutional origin of linguistic rights and their quasi-constitutionality, it is important to recall that Canada’s Constitution is the supreme law of Canada. Any incompatible provisions in any other act, regulation, rule or policy has no force or effect. The provision with respect to the consultation of OLMCs in Bill C-11 is not only justifiably compatible with Canada’s constitutional framework, but it was also given effect in the Reference Re Secession of Quebec. The Supreme Court of Canada explained that the Constitution was more than a written document, and that it also included the constitutional principles upon which its wording was based. They are not simply descriptive, but imbued with a powerful normative force leading to specific and precise legal obligations that place substantial limitations on government action.
The Supreme Court of Canada has already recognized that federal institutions, including the CRTC, are required to consult OLMCs. The Federal Court of Appeal very clearly drew this conclusion recently under part VII of the Official Languages Act. The purpose of the consultation provision proposed in Bill C-11 is to structure these consultations and ensure that the parties involved know what to expect. The absence of a clearly stated process would lead to court challenges, and to delays in the process, because the OLMCs would find themselves having to continually call upon the courts to rule on whether the consultations were real and effective, on a case-by-case basis.
Senator Clement: That’s a very complete answer, Ms. Pilon. Have you sent it to the CRTC brass?
Ms. Pilon: Yes, we asked to meet them because we were very surprised over the testimony given by Mr. Scott, the CRTC chairperson, in June. The amendment had been put forward in Bill C-10, and then proposed and unanimously adopted by the standing committee, without any later debate or objections in the House. It was afterwards kept in Bill C-11.
When the CRTC appeared before the Canadian Heritage Committee, there was no mention of its objection to this section; it was therefore adopted in the House of Commons. Here it is again and there is an objection. We were very surprised, particularly as we were never approached. That’s one more reason. It shows clearly that the wording needs to be spelled out in the bill to amend the Broadcasting Act, particularly with the CRTC arguing in court that its act should take precedence. Let’s include that in the bill. Let’s be clear about it to prevent any further uncertainty.
Senator Clement: Thank you, Ms. Pilon, that’s it for me.
Senator Simons: I have a question for Ms. Messier. I believe you said that there were differences between the English and French versions of the bill. Could you tell me where the differences are? I only have the English version in front of me.
Ms. Messier: It’s clause 5.2 of the bill, with reference to subparagraph 3(1)(i)(v) of the act, which is replaced by the following… If you look at the French version, it says “faire appel au maximum aux producteurs canadiens” and in the English version it says “include the greatest possible contribution.” That’s very different from “faire appel au maximum” and it’s not an accurate translation.
Then it says “from the Canadian production sector” instead of “from Canadian producers.” That’s not the same as the “production sector.”
Given that the amendment was proposed in French, I would suggest that the English version was incorrectly translated from the original text submitted.
Senator Simons: Do you prefer the French version or the English version?
Ms. Messier: Neither. We’re asking to reinstate the original clause, which encouraged a significant return to independent producers. If one or other of the versions had to be picked, then the French version is clearly more useful and less dangerous, because it does not necessarily include production in Canada by foreign companies. That gets us back to our discussion yesterday, about whether we are trying through this bill to protect the entire audiovisual industry, or whether the goal is to protect Canadian production of Canadian content.
Senator Simons: Thank you. I apologize for my poor French, but I need to practise every time I get the opportunity.
Ms. Messier: The pleasure is all mine. Your French is excellent, and better than my English.
[English]
Senator Simons: I will take myself off the hook and ask a question in English.
We had the chance to meet back when this was Bill C-10. It seems like a long time ago. We talked about the role of community television. Since then, the bill has been rewritten and amended to really underline the importance of linguistic minority communities, Indigenous communities, racialized communities and other marginalized communities in this country.
I wonder, Ms. Hinse and Ms. Edwards, if you could speak to the role you think community television could play in helping to realize some of the very ambitious objectives laid out in Bill C-11 in terms of representing those communities.
Ms. Edwards: I think that one of the important roles of the community sector has always been to provide a place where minorities could have a voice even if they didn’t have a big enough portion of the population to make a commercial company take notice of them.
It’s not just always about having a voice. Sometimes the most challenged communities among us, particularly immigrant communities, don’t have the tools to express themselves. So it is a safe place where they can learn with support. That is very important.
Historically, our sector has been very good at making modifications to broadcasting so that marginalized communities can participate. For example, we always talk about access to the broadcasting system for persons who don’t have full hearing. “Access,” in the CRTC’s language, they think it means just putting some signing on the news so that deaf people have a window into the hearing world. That’s not what they wanted. They came to us and said, “We want access. We want to express ourselves in our own language.” We actually rewired our studio for them. They couldn’t use audio headsets for their deaf director to talk to their deaf crew in the studio. We put a fourth camera in the control room to videotape what the director was signing. There was an extra monitor in the studio for the deaf camera people to follow. I will never forget the look on that deaf director’s face at the end of the program when he went “Cut.” He was so happy.
That doesn’t happen anywhere but on community media, where we can accommodate the specialized needs of many different groups. That’s our role.
Senator Simons: Thank you. That’s a beautiful example.
Senator Dasko: I’d like to follow up on your comments, Ms. Edwards, precisely what you were just speaking about with Senator Simons.
One of the goals is to represent diverse voices in the community. How are editorial decisions made in this respect, or in any other respect, to the other goals of community television? Also, how are they assessed? How do you assess whether these goals are being achieved? Who assesses it? On what basis is the output of what community television does assessed?
Ms. Edwards: Assessment and standards come from a couple of places. Since well before the 1991 act — and it’s still in force — the CRTC has a published code of standards for the community channel. In fact, we were looking at them yesterday in terms of how to handle online, live call-in programming to make sure it’s balanced and different voices have a chance to be aired.
The power of the community channel model — and I think this was one of the deficits of a cable-managed model — is that the community didn’t have any input. The point of not-for-profit community TV that’s managed by community boards of directors is that they can set their own community standards.
For example, paragraph 3(1)(o) talks about the rights of Indigenous groups to program for themselves. Most small Indigenous communities are never going to get a commercial broadcaster there, but they may get a community broadcaster, because we do have resources to train any group to make its own content.
The point is that when you have a not-for-profit board, the community can generate its own standards. It still has to function within the CRTC framework of defamation, journalistic codes and all of those things, but if there is a complaint from someone in the community that some standard hasn’t been met or there’s a perception of imbalance, they have a board of directors that’s local that they can go to for reference. It’s not coming from a group outside that may not be familiar with cultural norms.
Senator Dasko: I see. That’s how the assessment is done, by the community. So the CRTC plays no role in assessing?
Ms. Edwards: They do, too, because they give out licences. They function at the local level, but it’s within the framework of the CRTC. That’s why I started out by saying that the community channel standards, which were published pre-1992, are still in force. That’s a global, national document that anyone who is licensed has to follow. Within that, there is local accountability if there are perceived particular problems of balance at the local level or imbalance in access to resources, for example, or anything like that.
Senator Dasko: You’re saying, for example, that it wouldn’t be possible for a particular group in the community to take over the community television.
Ms. Edwards: It would go to the local board. If it was felt that for some reason the local board was imbalanced — There have been instances where the CRTC has removed community channel licences. It has happened a couple of times. I think there was a radio station in Toronto that lost its licence a few years ago, which was fairly controversial. So it can happen. We’re licensed entities with federal oversight as well, most of us.
One of the things that CACTUS does as a national association is we have recommended board of director structures for new entities that are launching. We recommend, for stability, that there be representation on the board of permanent entities in the community, such as a member of the Chamber of Commerce or a member of the municipal council or the local library or school boards. We recommend that half the board is made up of stable cultural, business, educational organizations, and then the other half is made up of user groups to be responsive to user issues.
We can’t force a corporation to set up the board with what we think they should have, but we certainly provide guidance. The guidance has weight, because we do administer funding programs.
Sometimes if we think that someone is making a funding application to us and we don’t think that they represent the whole community, those are questions we would ask before we would give them funding.
It’s three levels: the not-for-profit local board, the national associations just as they function in the private sector, and then there is the CRTC.
Senator Dasko: Thank you. That’s very helpful.
[Translation]
Senator Quinn: I’m from New Brunswick, a bilingual province. I’d like to know whether any organizations from New Brunswick are members of your organization.
Ms. Edwards: We currently have two not-for-profit community television stations in New Brunswick that are managed by the community; the first has its headquarters in Saint Andrews, in Charlotte County. It was recently awarded a provincial prize in recognition of its role in covering the pandemic. Its coverage was carried out with funding from the Local Journalism Initiative. Then there is an entity called the NB Media Coop. It’s basically a group of independent journalists seeking greater visibility by working together. Until now, its members have been mainly from print media, but they have just received video journalism funding from us for the first time.
St. Andrews Community TV is supporting their growth. It’s a sector that needs to be developed. The fact is that in the so-called Rogers community network — I don’t know a whether you are aware of this — there used to be 36 community television stations available on cable to serve small communities. All but six were shut down by Rogers as part of the process of interconnecting the entire province. It’s really now just a large‑scale provincial network that sometimes broadcasts city council meetings from Miramichi or elsewhere, but doesn’t really do so for every community. The purpose of our national association is to bring back community television stations to fill the enormous gaps left all over the place by the withdrawal of the cable operators. Efforts are being made, very gradually, to replace them with community organizations.
Senator Quinn: We have a rather large francophone population in New Brunswick, and its members are sometimes also members of Quebec organizations. Are any members of these organizations here with us this afternoon?
Ms. Pilon: Yes, the Alliance des producteurs francophones du Canada represents independent producers located and working outside Quebec who produce French-language content. Approximately one-third of its members are in the western provinces, a little over a third in Ontario, and the remaining third in the Atlantic provinces, mainly in New Brunswick, and especially in Moncton.
This region has in fact been growing, particularly because, together with the CRTC, we have been able to require some broadcasters to spend money on Canadian programming with independent producers in these regions. This has helped to consolidate the sector, and new production companies have sprung up since these spending requirements were introduced.
These production companies have been successful. It so happens that our members received more than 21 Gemini Award nominations this year. That’s a record, more than twice the number of nominations they’ve ever had in the past. It clearly demonstrates that concrete measures introduced by the CRTC can help the sector develop. And it’s not just the independent producers who benefit, but all the creators and technicians who work on these projects, the entire cultural sector, and of course the community as a whole, which is entitled to see itself reflected in the programming made available.
Those then are other reasons for establishing a legislative framework applicable to all online companies, to ensure that Canadian broadcasters are not solely responsible for supporting diverse and inclusive production in Canada, and that it is also the responsibility of all those affected by the new legislation.
The Chair: I have a few comments and a few questions. I’d like to hear the views of our witnesses here today.
For a long time now, I’ve had trouble with the definition of Canadian content I have frequently heard, both today and at previous meetings, to the effect that it was essential to protect Canadian culture and Quebec culture.
I want to promote Canadian culture and Quebec culture. Generally speaking, when people say that something needs to be protected, it usually means protecting something weak, that lacks strength, as if we had doubts about our ability to compete internationally or about whether we had the resources. That’s not what I see, however, and I take a great deal of pride in Canada’s, and especially Quebec’s cultural and artistic community. We have had some remarkable success stories. I see this bill and the definition of Canadian content as something that restricts our ability to use all the various networks and platforms available to us in 2022 to promote our cultural and artistic wealth.
I’d like to give you an example. In your community, when someone has strong enough beliefs and says: “I live in London or Paris and I want to invest in a project in Montreal, Quebec or Toronto. I want to invest $5 million, and you know what? I would like to spend my money on hiring Canadian and Quebec writers, actors and actresses. I also want to hire Canadian and Quebec directors and producers.” But with this bill, the person who wants to invest comes to Canada and all of a sudden the government says, on the basis of this definition, that it’s not Canadian content, because the person who believes in us and our sector lives in Los Angeles or New York.
What’s the logic behind that?
Wouldn’t you agree that it’s also a way of discriminating against and hindering Canada’s artistic and cultural sector?
Ms. Messier: I can’t agree with what you’re saying, Mr. Chair. My view is that there is a significant difference with respect to Canadian content that needs to be considered. I think that it’s important, as you were saying, that when people come to produce in Canada, if a foreigner decides to come here for production in Canada… You were asking why that could not be considered Canadian content. I would say that most of the time, there are no Canadian scriptwriters or directors. You have a script written in the United States, for example, and it is shot in studios in Canada, with Canadian technicians — that much is true — but usually with few Canadian actors, and the scriptwriters and directors are usually American. I believe that what’s needed is a creative core, consisting of a Canadian director, scriptwriter and producer.
Why is it important for it to be a Canadian producer, and should that producer own the intellectual property? I’ll give you an analogy, even though it’s not a very good one. When a Japanese car is built in an Ontario plant, it’s still a Japanese car. It doesn’t become a Canadian car because it was built in Canada by Canadian employees. In the cultural sector, if a foreigner believes that there is a good business opportunity here because of the exchange rate, tax incentives and skilled workers, and decides that it would be worthwhile to invest in a production made in Canada, then all of a sudden we seem to want to call it “Canadian content.”
It’s an important economic sector, and there are also good business opportunities. They come here to do business because it’s a favourable environment. But intellectual property is just as important. That’s why the concept of Canadian content is ultimately bound up with who holds the rights, who will be able to market the work, who will be able to earn money with it and reinvest it, as I was saying earlier, in developing Canadian content.
An American company coming to shoot here may well use the best of Canadian talent, but it will not necessarily invest in developing the talent or in growing its business in Canada. That’s what we want to encourage: the growth and development of companies here in Canada.
I believe that the distinction has to do with intellectual property, meaning who holds the rights. When a Swedish drug company comes to manufacture pills here in Canada, it doesn’t make them Canadian. If the patent is Swedish, the product is still Swedish; it’s not Canadian just because it happens to be made here.
The logic would never be applied in another economic sector, but simply because what’s involved is culture, the impression created is that we are prepared to lower the amount of Canadian content to keep foreign investors happy. It’s an economic sector, but I see it as part of the audiovisual ecosystem. There is production in Canada, but it’s not production of Canadian content.
The Chair: As I understand it, if we have three Canadians who own three different Canadian projects and three films, and they are making three films in Canada, that’s fine and it’s a good investment. It will create jobs for artists, writers, directors and everyone in the sector. What’s wrong with having, let’s say three or four other investors from elsewhere who come and create more jobs for the sector? It will add competition, but in a good way, because it will become possible to promote not just three Canadian projects, but seven Canadian projects.
Why does it matter, from an artistic standpoint, whether the investment comes from elsewhere? From a business standpoint, it’s true that the intellectual property will be controlled abroad, but it will nonetheless be possible to promote a Canadian project, which will be good for the sector.
Ms. Messier: When an American studio comes here to shoot a film, let’s say a Disney movie… For example, X Men was shot here. I’m sorry, but it’s not Canadian content simply because the movie was shot in Montreal. Simply because a movie of one kind or another is made in Canada doesn’t mean that it should be defined as Canadian content. I’m not saying that there’s anything wrong with it. It has been very good, economically speaking, to welcome these people. It’s part of an attractive economic sector, but it’s not Canadian content; it’s audiovisual content produced in Canada that is beneficial to a number of people, and that’s fine. As Ms. Pilon was about to say, we can do both. Absolutely.
It’s what’s called service content, and in life, we can choose between simply making service content or being in control of it. That’s the distinction. It’s all very well to provide services for others, but it’s also good to be the master of your own house. Being able to affirm one’s cultural sovereignty is what I believe is meant by providing Canadian content. It’s being proud of our culture and producing our own content independently.
Ms. Pilon: I would add that it’s important to acknowledge the distinction between Canadian content and service production. These types of content coexist, as Ms. Messier mentioned. Without a clear definition that makes a distinction between service production and content created and produced by Canadians, we’ll end up with the short end of the stick, because in order to get exposure for our content, we have to have the means to produce it. We need a system that promotes this content and makes it possible for us to create it, produce it, design it and have the capacity to express what we have to say and to have ongoing support to do so. There is a genuine risk of backsliding and ending up with homogeneous content that doesn’t reflect us and has nothing to do with who we are. It’s important to say this.
Ms. Messier: I would add that it rarely involves francophone content. It means producing a certain type of content in English.
[English]
The Chair: I want to put on the record that I’m not saying by any means just because somebody comes here and shoots or films here it’s Canadian content.
However — I want to be clear, and I’ll use specific examples to put on the record — when Celine Dion or Bryan Adams records an album outside of Canada and the investors, for example, are not Canadian, to somehow say that Celine Dion and Bryan Adams are not Canadian, which is what we are saying according to our current CanCon definition, I find it ludicrous.
I find it equally ludicrous when we consider The Handmaid’s Tale, written by none other than Canadian icon Margaret Atwood, to be non-Canadian content.
Look, the debate continues and the exchange continues.
[Translation]
Thank you very much for coming. We on the committee appreciate it.
[English]
For our second panel, we are pleased to welcome our witnesses who are both joining us in person and by videoconference. We have in the room with us, from the Canadian Association of Broadcasters, Kevin Desjardins, President. From the Canadian Media Producers Association, we welcome Reynolds Mastin, President and Chief Executive Officer; and Haydn Wazelle, President of Tabula Dada Productions. We also have with us from the Independent Broadcast Group, Joel Fortune, Legal Counsel; and Luc Perreault, Strategic Advisor, Stingray Group.
Welcome. We will begin with opening remarks from Mr. Desjardins.
[Translation]
Kevin Desjardins, President, Canadian Association of Broadcasters: Thank you, Mr. Chair and members of the committee, for giving me the opportunity to speak to you today in connection with this important bill.
The CAB is the national voice of Canada’s private broadcasters, representing more than 800 members across Canada, including the vast majority of Canadian private radio and television stations, and specialty services.
[English]
The Broadcasting Act is fundamental to the way broadcasters are regulated in Canada. The legislative process in which we are currently engaged will determine whether broadcasting in Canada will be guided by and for Canadians in the future. As we sit in limbo, between the passage of this critical legislation and the status quo, the Broadcasting Act continues to fall further out of step with the technological change that has rapidly transformed the way that Canadians receive and consume audio and video content.
Unregulated platforms have had a decade to enter the Canadian marketplace without hindrance or oversight, and Canadian broadcasters compete directly with them for subscribers, the rights to content, for advertisers and for audiences. Moreover, Canadian broadcasters operate within a substantial regulatory framework that dictates how much we must spend on specific types of programs, among many other things.
Foreign players have all the economic benefits of operating in Canada, yet Canadian broadcasters continue to carry the entire burden of supporting the audio and visual creative sectors. Simply put, Canadian broadcasters play by the old rules and unregulated foreign platforms play by their own rules. It’s well past time for a system that is fair, equitable and flexible.
Bill C-11 was introduced to acknowledge the presence of foreign digital media companies and would require them to contribute to Canada’s broadcasting policy objectives. This is a necessary step toward far-reaching broadcasting policy reforms.
Canadian broadcasters are desperate for regulatory clarity and certainty. They need to know the rules they and their foreign competitors will be operating under to plan their businesses, and they need to know the rules will be fair and equitable. Canadian broadcasters are willing to compete, but they cannot do so in a system that allows increasingly dominant players to take as much as they want and only give back as much as they like.
Currently, Canadian broadcasting companies must look several years ahead when planning how to invest in Canadian content and talent. Faced with long production cycles, increasing costs and unrelenting competitive pressures, modern media businesses cannot afford to make last-minute decisions.
What’s at stake for Canada is significant. It’s the jobs of more than 60,000 Canadians across the country that depend on our broadcasting sector and, critically, it’s the $681 million that TV and radio broadcasters invest in news and community information every year.
Maintaining professional newsrooms in communities across the country is a fundamental commitment of Canada’s broadcasters. For most Canadians, the most important Canadian stories they see and hear every day come from our newsrooms. It is critical that we continue to support newsrooms that reflect Canadian communities, hold our leaders to account and report information in a timely and professional manner. We know that digital streamers have neither the interest nor the wherewithal to do this.
Unfortunately, broadcast news is not self-sustaining; it depends largely on the support of entertainment programming that draws large audiences in Canada. Allowing foreign streamers to continue skimming all the financial benefit from the Canadian market without giving anything back will ultimately reduce the number of Canadian voices being heard, and there will be fewer Canadian artists and, critically, fewer Canadian journalists.
Broadly, Bill C-11 achieves the goals that were set out for the legislation. In fact, the amended version of the bill that passed through the House of Commons included critical improvements that would help to promote fairness in the system. Those include ensuring that Canadian broadcasters are not assessed millions of dollars in fees that foreign broadcasters are not. It also includes helpful recognition of the role of Canadian broadcasters as creators and producers of Canadian content.
As to some of the more contentious discussions around how Bill C-11 applies to social media platforms, we believe that the current legislation provides an appropriate response in this area. The exemptions provided in the legislation for the individual users of the platforms is appropriate. Enshrining blanket exemptions for the platforms in the legislation is not appropriate. These platforms have already demonstrated that they can and do compete in the Canadian broadcasting marketplace, including the acquisition and exhibition of exclusive programming and the streaming of music. It is not appropriate to allow these powerful global social media platforms to circumvent Canada’s rules in the future while continuing to exploit Canada as a market.
Bill C-11 will provide necessary, long overdue updates to the Broadcasting Act. It is vital for Canadians that we move forward on this legislation and usher in a broadcasting system that reflects today’s realities.
Thank you, and I look forward to any questions you may have.
The Chair: Thank you very much. Mr. Mastin, you have the floor.
Reynolds Mastin, President and Chief Executive Officer, Canadian Media Producers Association: Good afternoon, senators.
The CMPA represents more than 600 independent production companies across Canada engaged in the production of Canadian programming. With me today is Haydn Wazelle, President of Tabula Dada Productions, a Vancouver-based production company. He is a national board member of the CMPA, as well as the Black Screen Office and the Canadian Independent Screen Fund for BIPOC creatives. Thank you for inviting us to appear before you today.
The growth of digital technologies and the globalization of content distribution can be a huge opportunity for Canadians. But to truly seize that opportunity, we must modernize our Canadian broadcasting system. That’s why the CMPA strongly supports the passage of Bill C-11.
An updated policy framework that includes the participation of foreign streaming services is critical to preserving our national sovereignty and establishing a more inclusive system that will better serve all Canadians. An updated framework must also uphold the foundational regulatory principle that those who benefit from our system should also contribute to it. Failure to do so would not only prevent Canada from fully seizing the opportunities of the digital age, but it could also become an existential threat.
While we support the adoption of Bill C-11, we are proposing three amendments.
Haydn Wazelle, President of Tabula Dada Productions, Canadian Media Producers Association: Our first amendment seeks to restore a core policy objective. The Broadcasting Act states that the Canadian broadcasting system should “include a significant contribution from the Canadian independent production sector.”
However, the House’s Heritage Committee adopted an amendment that burdens this language to also include broadcaster in-house and affiliated production. Unfortunately, the committee’s amendment reflects a misunderstanding of why the act specifically calls for a contribution from the independent production sector. At its core, it is about programming diversity. That is the underlying policy rationale.
Not all of the programming should be both created and distributed by broadcasters; at least some of it should be provided by producers that are independent from those broadcasters. A specific reference to the independent production sector ensures a greater diversity of voices and broader representation and participation in the production of Canadian programming. It also counterbalances the overwhelming dominance of broadcasters.
There is no need to also recognize the content produced by broadcasters. The purpose of this policy objective is not to list the things that broadcasters already do to benefit themselves but instead identify what broadcasters should do to contribute to our system. We therefore urge the Senate to reverse the House committee’s amendment and reinstate the current language of the act. Programming in our system must include a significant contribution from the Canadian independent production sector.
Mr. Mastin: Our second proposed amendment relates to paragraph 3(1)(f) and the obligation to use Canadian resources in the creation, production and presentation of programming. Bill C-11 proposes a different standard as between foreign streamers, on the one hand, and Canadian broadcasters, on the other, when it comes to the use of Canadian resources.
The foreign streamers benefit from distribution in Canada. They should also meaningfully contribute to Canadian programming, and they should do so in a way that makes maximum use of Canadian resources, just as Canadian broadcasters and online services are required to do under paragraph 3(1)(f).
There is no sound policy rationale to have two different standards. This would defeat the primary purpose of the bill, which is to create a level playing field between foreign streamers and Canadian broadcasters.
Mr. Wazelle: Our third proposed amendment emphasizes the need to implement terms of trade. The buyer side of content production is concentrated in the hands of Canada’s large, vertically integrated telecom companies and foreign tech giants. They hold an outsized advantage in rights negotiations. Producers often face a “take it or leave it” proposition: give up their rights in the program or risk it not being made at all. There is a real need to correct this market imbalance. Canadian production companies must be able to retain an ownership stake in their content and provide the market conditions needed for longer-term sustainability and investment. Bill C-11 should ensure that the CRTC is empowered to require and enforce collective terms of trade between buyers and producers — a code of baseline conditions to be applied in good faith negotiations between the buyers and sellers of content. This is not by any means a novel solution. It has already been adopted with success in the U.K., France and Germany.
Mr. Mastin: Thank you for your time. We look forward to answering any questions you may have.
The Chair: Thank you. Now I call upon the Independent Broadcast Group to make their presentation.
Joel Fortune, Legal Counsel, Independent Broadcast Group: Mr. Chair and honourable senators, I am joined by Luc Perreault, Strategic Advisor for Stingray Group, which is a member of IBG, along with 12 other Canadian independent broadcast and digital media companies. These companies are active in all types of broadcasting on established and newer digital platforms and in related media and production activities.
Independent broadcasters are commercial entrepreneurs and social entrepreneurs. They are the diversity that we often think of when we say we want the Canadian broadcasting system to reflect Canada’s true diversity. This includes linguistic diversity, reflection of persons with disabilities, ethnocultural diversity and the meaningful participation of Indigenous peoples in the broadcasting system.
Certain key broadcasting policy objectives are included in the bill that speak directly to the vital role played by independent Canadian broadcasters in that broadcasting system.
[Translation]
Luc Perreault, Strategic Advisor, Stingray Group, Independent Broadcast Group: We support Bill C-11, but targeted changes are needed to ensure that the CRTC has the specific powers it will need to achieve the objectives of the act.
First of all, the CRTC should have the power to determine the terms and conditions for distributing certain programming services on digital platforms. Currently, paragraph 9.1(1)(i) of the Broadcasting Act, in its amended version, would allow the CRTC to require that certain services be distributed on digital platforms without any specified conditions, as is currently the case for services like APTN, TV5 Québec Canada, UNIS and others.
Secondly, the CRTC now has the authority to settle disputes in the cable and satellite environment. This same authority should apply to the online environment.
It’s essential for it to play a role in standardizing the rules and providing for substantive remedies to Canadian services, particularly small independent broadcasters, when they have dealings with digital platforms. These digital platforms could eventually be Canadian companies like Bell, Telus or Rogers, in addition to global platforms like Amazon, Roku and YouTube.
The CRTC must have the authority to establish the regulatory framework to ensure that Canadian services are distributed and made available on an equitable basis in an online environment. Currently, the CRTC can regulate the distribution of all foreign programming or other undertakings via cable and satellite services.
That is the authority currently used by the CRTC to ensure that local television services are distributed locally; ensure that French-language services are available, because, as you are no doubt aware, the overwhelming presence of English-language online services has become a growing concern. It is also this authority which allows it to require access to Canadian multicultural programming services, and to ensure equitable treatment of services when there are disputes, including the status quo rule that prevents a service from having to shut down during the dispute settlement process, and to provide protection for consumers, for example when changes are being made to existing services.
At best, Bill C-11 creates a cloud of uncertainty with respect to the CRTC’s powers to take action in the online environment. A minor proposed change to subsection 9.1(1) of the Broadcasting Act would deal with this serious problem.
[English]
Mr. Fortune: Without the changes that we are proposing, we’re concerned that the CRTC will not have the authority it needs to support the Canadian broadcasting policy objectives. Put as directly as possible, the act sets out bold objectives for Canadian broadcasting, but it does not give the CRTC the actual, specific authorities it will need in the future to do its job properly.
The first two targeted changes we have proposed, which were specifically supported by the CRTC when they appeared before you in June, and the third, which is similar, will go a long way to close this gap.
Thank you for the opportunity to appear today. We would welcome any questions you may have.
The Chair: Thank you. I will turn it over to Senator Simons to launch off the Q & A.
Senator Simons: After having met with Mr. Desjardins and Mr. Fortune an infinite number of times in tiny streams, it’s very nice to have you here and see you living and breathing.
My first question is for Mr. Mastin and Mr. Wazelle. The previous witnesses highlighted for us, Ms. Messier, that there’s a problem in the translation of subclause 3(5.2) of the bill, which proposes an amendment to subparagraph 3(1)(i)(v) of the act. It doesn’t say the same in English as it does in French. I believe that is the amendment that you’re referring to, the one that adds the phrase “whether it is independent or affiliated with or owned by a broadcasting undertaking.”
Am I correct? That’s the amendment?
Mr. Mastin: That is correct, yes.
Senator Simons: The original language in French, which my friend Senator Miville-Dechêne had before me just moments ago, said:
[Translation]
(v) include a significant contribution from the Canadian independent production sector;
[English]
Would you like to revert to the original language in both English and French?
Mr. Mastin: Yes, senator, to the language that is currently in the Broadcasting Act.
Senator Simons: So your concern here is that by adding the phrase “with or owned by a broadcasting undertaking,” you’re diluting the position of privilege that the original language granted to independent production?
Mr. Mastin: That is correct, yes.
Senator Simons: Thank you. That is noted and for the record.
Mr. Desjardins, we heard earlier today from your colleagues at CORUS and Quebecor who raised many of the same questions that you did. My concern is that when we level the playing field, you can do that either by raising people up or by digging a hole and lowering people.
With the amendments that were made in June to Bill C-11, I understand they eliminated the licence fees for private broadcasters. Is that correct?
Mr. Desjardins: There was an amendment that we believe would eliminate Part 2 licence fees. Part 1 licence fees are the licence fees that go towards sustaining the CRTC. Part 2 licence fees went directly into the Consolidated Revenue Fund. That was to the tune of $120 million a year taken out of the Canadian broadcasting system, put into government coffers and not reinvested in any way, shape or form, at a time when certainly the Canadian broadcasting system really can’t afford to have that sort of fee drawn from them.
Senator Simons: So that money wasn’t going to the Canada Media Fund; it was going into general revenues.
Mr. Desjardins: Right. It wasn’t tied to any other spending.
Senator Simons: Eliminating that $120 million, what will that mean for your members? It sounds like a lot of money in aggregate, but I imagine for each individual player it doesn’t end up being quite that much.
Mr. Desjardins: It’s not transformative. It is important. It’s the sort of things that will keep journalists in newsrooms, potentially, but it’s not going to be the thing that saves the Canadian broadcasting sector alone. I think that for all of our members, that is meaningful money to their bottom line. Again, it’s money that is effectively a tax. It’s very important for us that those fees are eliminated, but it is not by any means a silver bullet for our industry.
Senator Simons: So there’s nothing here that relieves you from your duty to pay into the Canada Media Fund or to commission Canadian work.
Mr. Desjardins: That Canada Media Fund is more the broadcast distributors. They pay into that.
Senator Simons: Okay. So, more than the broadcasters themselves.
Mr. Desjardins: Yes. In terms of the discussion that’s come up about the amendment that came through the last time in regard to subparagraph 3(1)(i)(v) of the act, I would have to say I’m profoundly disappointed. At this moment, we should be focusing on the global giants that are at our door, that are, as I said, absolutely skimming all of the profit out of the Canadian system, who are massive competitors for audiences, for advertising. All of the streaming platforms have said they’re going to come out with advertising tiers. They’re going to insert themselves into the Canadian advertising market at a time when Canadian broadcasters certainly can’t afford to have that. I think the focus should be on making sure that we have a fair and equitable system with these giants.
What I’m disappointed to see is that we’re going to have this discussion that is more about making sure that we can maintain Canadian broadcasters as that backstop, to make sure that, yes, there’s going to be new money coming into the system, but we also want Canadian broadcasters to have all of the same obligations and requirements they’ve always had. If you take a look at what happened over the decade leading up to COVID, the independent production sector in Canada grew every year over that decade. The goal of recognizing the independent production sector in that legislation 30 years ago was about building up an independent production sector. Now we have independent producers who are bigger than broadcasters, and we’re all facing global streamers who are bigger than all of us.
For me, this discussion in terms of flipping that amendment back so that we’re not recognizing the broadcasters’ role as content creators in Canada, I don’t understand why the energy is being placed there, aside from trying to ensure that people maintain Canadian broadcasters as a backstop if they don’t believe that they’re going to be able to extract what they need out of the foreign players.
Senator Simons: Thanks very much.
Senator Miville-Dechêne: Thank you very much, Mr. Desjardins.
I would like to ask Mr. Mastin to briefly answer Mr. Desjardins, who voiced an interesting criticism of your demand. Should we discuss who is the most Canadian, less Canadian, the most deserving Canadians, or should we focus on the foreign players? Can you answer this? Because I find it interesting.
Mr. Mastin: Thank you very much for the question. To be responsive to your question and the comments of Mr. Desjardins around the change to this objective relating to the independent production sector, the reason why that objective is in the act is not only because we want to ensure a diversity of programming in Canada, although that is an absolutely key one. It’s also to recognize — particularly today, in a system that is hugely consolidated in Canada on the broadcasting side — that we have independent broadcasters here and they have multiple challenges competing with the large, vertically integrated broadcasters in this country. We want to ensure that those broadcasters are not able, within the domestic market, to completely dominate with their choices and engage in anti-competitive behaviour. The independent production sector objective is intended to be a check on all of that.
In addition, the policy objectives that are enumerated in section 3, where this objective is found, are not intended to list the things that broadcasters and streamers will do as a matter of course. They are intended to ensure that certain key elements that make up a healthy, diverse and modernized broadcasting system are there and are upheld and are sustained. That is why there has been this specific reference and support for the independent production sector in the act.
Broadcasters, Canadian or foreign streamers, already do in‑house production. They also already do affiliated production. They will continue to do it. They have their own incentives to do it. The policy objectives in the act are to address where they may not do certain things that we need them to do because of their role in the system to ensure a healthy, balanced and diverse system.
Senator Miville-Dechêne: I think you will continue to disagree, but let me jump to another topic. The terms of trade. This is a pretty big change you’re asking for in the way contracts are negotiated. It looks to me like you want to take some of what Bill C-18 will be doing and applying it to Bill C-11 in terms of having the CRTC decide in the end what would be a fair contract.
We were discussing with Disney and they said to us that if they go in the country and they finance 100% of a production and it’s their idea or whatever, obviously they will take away from it all of the intellectual property, or IP. Do you see things differently? These terms of trade — it’s a pretty huge change you’re asking for, and not only with the foreign house of production, but also with the broadcaster. Tell me about that. Tell me about the IP. Shouldn’t the person financing the production be entitled to the IP?
Mr. Mastin: Thank you for the question. I’m going to turn it to Mr. Wazelle in a moment as an independent producer. He can speak to what the realities are like negotiating right now with these players and what impact the terms of trade would have on his company.
The one thing I’d like to say with respect to Disney’s testimony earlier, the scenario that you just described, senator, where the IP for a show is originating with Disney, so it’s originating in Hollywood, and Canada is essentially being used as a manufacturing platform for that IP, that’s a service production show. That is certainly not the focus for us or, we would argue, for Bill C-11. That’s a totally different category.
What we’re talking about is a scenario where the IP isn’t originating with Disney. It’s originating with a Canadian producer working with Canadian creators, and they are looking to partner with Disney on the production of that show for their mutual benefit. In that scenario, in our view, what’s important is that where a show is successful, all the partners in the show share in that success. In this example, it would include the Canadian production company, Canadian creators and Disney. Terms of trade are a framework that enables the industry to recalibrate what is otherwise a huge imbalance in negotiating power between either the foreign streamers and independent producers or the Canadian broadcasters, especially the large ones, and our members. We want to ensure that whatever negotiations ultimately result in an agreement, the agreement is fair to all concerned and everyone benefits from the success of a hit show.
Haydn, would you like to add to that?
Mr. Wazelle: Yes. Thank you for the question, senator.
Many producers, and particularly producers from underrepresented communities, often find themselves in a position of “take it or leave it.” They can sometimes be offered an inadequate licence fee and requirements of exclusivity for many years. In most cases, when working with our American friends and neighbours who benefit from our globally competitive tax incentives, there is very little opportunity to retain any IP at all, even if the IP originates in Canada. That means all profits are going south of the border with little or no positive impact on our GDP.
From our perspective, terms of trade are light-handed regulatory tools to help fairly rebalance negotiating power between broadcasters and streamers and the independent producer.
I personally consider myself to be Canadian independent media and entertainment. I co-founded zeddrive.ca, which is a 100%-Canadian-owned-and-controlled software company that has serviced over 400 media and entertainment productions, overwhelmingly Canadian clients. I have 17 years working producer side here in B.C. on exclusively Canadian productions, and I regularly see the challenges we face in not only retaining IP but in the desired goal of exploiting that IP around the world with the intention of bringing those profits home to Canada to grow our businesses and to employ more Canadians.
Senator Miville-Dechêne: I’m getting it, but I want to know if you make a difference in negotiating IP in a situation where the idea originates from Canada, or the IP is in Canada, but it’s 100% financed by a foreigner. In this situation, do you think that a fair deal should give you some of that IP? Or is it a question of proportionality in terms of financing of the movie or the documentary?
Mr. Mastin: I have a two-part response to that question, senator. First, it is extremely rare that a broadcaster or a foreign streamer finances 100% of a production. Sometimes the number “100%” gets thrown around, but that’s, generally speaking, not the case. At a minimum, usually tax credits are invested in the financing of that show. That’s number one.
Number two, we also have a number of members who have distribution arms. Core to their business as Canadian companies is to meaningfully retain at least some of the global distribution rights to the content that they produce in partnership with broadcasters and the foreign streaming services. What they do in order to ensure a fair and equitable deal for everyone is they put distribution advances — so hard cash money — into the financing of those shows, and in exchange, they retain some of those global distribution rights.
But what frequently happens, particularly with the foreign streaming services, is they say, “The only way we are making this show is if you leave your money off the table because we want to own and control, lock, stock and barrel, globally, the IP that you have brought to the table.” Those are the kinds of issues that we’re trying to address through terms of trade.
Senator Dasko: I’m getting a little more confused about this amendment issue, but maybe I’ll just put that off for a second. I do want to get back to the topic of the level playing field with Mr. Desjardins.
The goal is to create a level playing field, but the bill does not create a level playing field. It just brings the online streamers into a regulatory framework.
Tell me, is there anything in the bill that is specifically targeted to the Canadian broadcaster? What is there, besides bringing this group of competitors and people outside the system into the system? Is there anything else for the broadcaster? You obviously support the bill strongly. Is it all just looking ahead to changes? What does this do for you now, just in sort of plain language?
Mr. Desjardins: Yes. The one thing I would say is I wouldn’t minimize this idea of bringing the foreign players into the Canadian regulatory framework. That’s the point of this bill. That’s the critical piece of this bill, getting them integrated. There will be two regulatory processes that follow from this, and those will be critical in terms of figuring out what the future of Canadian broadcasting looks like. But you need to start with this legislation and you need to start by bringing these foreign players within that regulatory framework.
It’s not a small thing. I appreciate the question in terms of the “how,” because I hear that a lot: “Tell us how.” Those are regulatory framework questions, and we can’t move to that point until we deal with this legislation.
I was listening this morning, and I heard one of the people from one of the streaming services say, “Just give us an extra year, and we’ll have a little more data to be able to tell you how we think things will work.” It’s been six years, really, since we started the discussions on getting this bill done. In those six years, again, it’s about giving these foreign players an extraordinary head start. They’re building market share here.
Like I say, you’re going to have Disney+ and Netflix selling ads in Canada. At present, 50% of the Canadian advertising market is taken up with foreign digital players. We are allowing so much of our media money to leave the country, and this is part of why I get a bit frustrated about some of the discussions that we’re having here.
For instance, for us, this bill is really about strengthening the ability of Canadian media companies to be able to create Canadian content and about making sure that we have a broadcasting system so that you do have those dinner-hour newscasts from Lethbridge and Victoria and Moncton and Regina. It’s about making sure we have a strong broadcasting backbone that serves Canadian communities.
Senator Dasko: Let’s say the streamers are being required to pay into a fund. Would Canadian broadcasters benefit from that fund?
Mr. Desjardins: I don’t think we have an answer for that at this point.
Senator Dasko: But potentially?
Mr. Desjardins: I couldn’t say. I couldn’t say what that’s going to look like. Ultimately, though — and I do appreciate Senator Simons and you both focusing on this idea of the level playing field — for my members, it’s about this idea that if you are benefiting tangibly from the Canadian media market, then you have obligations to help sustain that media market. At present, that is all falling on the backs of broadcasters, broadcasters who have seen their revenues, both in terms of subscribers and in terms of advertisers, plummeting over the last five years.
Senator Dasko: At the risk of getting back into the issue of the amendments — because I’m getting more confused; maybe everybody else is all cleared up — with regard to the amendments that were made at the late hour in the other place, can you describe in clear language what it does for Canadian broadcasters? What does it do for you?
Mr. Desjardins: I’ll start and I’ll see if my colleagues want to supplement. It gives the opportunity for Canadian broadcasters — Again, coming back to that concept of who owns the IP, when our broadcasters work with independent producers, by and large, that IP remains with the independent producer. Money goes out the door from the broadcasters, but they don’t have the opportunity to exploit that IP down the road. They are investing money; it is effectively leasing something, not owning it. This would give broadcasters the opportunity to have a greater role in producing content. They can then invest in and see the benefit of that investment.
Canadian broadcasters are going to continue to work with independent producers. They’re going to continue to collaborate. There are going to be co-productions. I think the larger piece of this is not about Canadian producers versus Canadian broadcasters, because we’re getting stuck into these silos, and meanwhile, like I say, we have these global giants who dwarf all of us, and that’s the point of this bill.
Mr. Fortune: I appreciate where Kevin is coming from. When I look at that section, I see it as a benefit to Canadian broadcasters because we’re recognizing that Canadian broadcasters are also producers. That is not to take away from Canadian independent producers, who play a different role in the system. But in this environment that we are involved in now, there is a difference between a production that’s made by a Canadian broadcaster — that’s a Canadian production by a Canadian entity in Canada, like local news, documentaries or whatever it may be they are producing — compared to a production that is made by a non-Canadian streamer. That’s a different sort of entity.
I guess what I like about this section — and I’m sensitive to the criticisms of the independent producer — is that it does recognize that Canadian broadcasters are also producers. They are not just a blank slate where content comes in and goes out. They are responsible for production.
I appreciate the independent production point of view, but I like mine as well.
Senator Dasko: Thank you, Mr. Chair.
Senator Wallin: I think you all agree that the biggest players are no longer the traditional broadcasters in this country. You seem to be suggesting the streamers from primarily America are out there. It seems to me that this is about funding and protecting Canadian content and forcing the concept of discoverability on those big players by so-called regulating the internet. That’s kind of the premise of where I’m coming from.
My question is really straightforward because we have heard testimony on this as of last night most recently. Is the CRTC — and you have all had plenty of experience with this body — the appropriate body to regulate the internet? Does it have the staff, ability and range to conduct the task and provide affordable and timely mechanisms to challenge their decisions so we don’t have the CRTC regulating themselves or policing themselves?
I don’t know who wants to jump in on that. Go ahead, Mr. Fortune.
Mr. Fortune: The short answer is yes, it absolutely is the right organization. They’ve been doing this for many decades. They have the expertise, and they are a Canadian institution. So they are absolutely the correct organization to be doing this activity.
Senator Wallin: To what degree would they have to ramp up if they were going to start regulating the internet?
Mr. Fortune: Yes, they need proper resources. They need to do the work. The entirety of the internet is not being regulated by the commission, and it will be done incrementally, in the best Canadian tradition: incremental.
I’m not worried about the commission’s ability to take on this bill. It’s going to be work. It’s going to require resources, but they are absolutely the right organization.
Mr. Desjardins: I would echo that. We are a regulated industry, and we oftentimes have creative tension with our regulator. Having said that, 100% the CRTC is the right organization. To your point, they have already begun to ramp up. I think you have people who have the knowledge base and skills, especially since we are not talking about regulating the entirety of the internet. We are talking about a very slim tranche of the internet, which is something that very much looks like the distribution they have always regulated.
Senator Wallin: I think if you want to impose discoverability on Canadian content, you are going to actually have to regulate the internet in its entirety, even though that seems an impossible task. You will never know where you are going to discover Canadian content.
Mr. Desjardins: Discoverability is not one of our lead concerns. Having said that, the challenges that have been put forward in terms of people saying how impossible that’s going to be — I don’t think discoverability is always about algorithms. It’s not about managing or regulating algorithms. I have heard a number of witnesses already say that it can be as simple as making sure Canadian content is findable on home pages or what have you.
I honestly find the discussions around discoverability to be a bit of a canard.
Senator Wallin: Do our other witnesses want to jump in?
Mr. Perreault: We are not talking about regulating the internet. We are talking about regulating platforms. If you look at the largest distributors in this country right now — Shaw, Rogers, Vidéotron, Cogeco, Bell and Telus — they are all moving toward IP distribution. They are moving their actual technology — that used to be called cable — to delivering content, through the same wire, to platforms that are able to receive it through the internet. So what we are regulating, or trying to talk about regulating, is the platform itself.
For example, when I’m at home in Montreal, and I take my remote control from Vidéotron, which is based on the Xfinity platform — which is a U.S.-owned platform by Comcast — and I say “musique,” what shows up is Stingray Music. If I say “sports,” — in French “sports” — well RDS, TSN, Sportsnet and what have you will pop up. So, content discovery happens when the platform is adjusted to the market in which it operates, because this platform — don’t get me wrong — is controlled by Comcast in Philadelphia. But it is adapted for the market.
Senator Wallin: But there is a reason that Stingray pops up. That’s what I’m saying.
Mr. Perreault: It is decided by who the music service that serves this market is.
Senator Wallin: That is affiliated with your provider. Yes. Could we hear from the other witnesses?
Mr. Mastin: We can’t miss the opportunity to be on the record expressing our complete agreement with our broadcaster colleagues on this point, particularly in relation to our confidence that the CRTC is well equipped to handle the renewed mandate it would be given under Bill C-11.
One note, senator. You referenced in your question the notion of ensuring that the CRTC is not regulating itself. In that respect, one thing we would just note is that under the Broadcasting Act, Canadians have long had the ability to appeal CRTC decisions directly to the federal cabinet where the view is that the CRTC may have made a misstep. These appeals have not happened very often in the past 30 years because I think the general perception is that the CRTC has done a very good job. On occasion it has occurred. That does provide a bit of a political override mechanism.
One thing that is missing in the bill is extending that political override mechanism with respect to the conditions of service agreements that the CRTC would be empowered to enter into with the foreign streaming services. In our view, the appeal mechanism has worked well, and there is no reason not to extend it to foreign streaming services when we are bringing them into our system.
Finally, I just wanted to turn it to Haydn to speak to discoverability from an independent producer’s perspective.
Mr. Wazelle: I also echo that we are not talking necessarily about policing the entire internet to find Canadian content. The only thing that has changed is the delivery mechanism.
I would be remiss if I did not point out that if our children can’t log on to large streaming services and easily — not reasonably, but easily — find themselves represented, easily find stories depicting our values, then whatever it is that comes to mind when you think of what it means to be Canadian will erode and decay over time and be replaced with another country’s values and ideals.
Our colleague testifying today spoke to the large streaming services adding advertising to their platforms. You can imagine that if they are adding advertising to their platforms, which includes their ability to create their own content, they will naturally be advertising their content in a way that will make it very difficult for anything Canadian and Canadian content to be discovered that is not directly affiliated with those large streaming services.
Senator Wallin: With advertising, we are talking about their ability to push, which is why the algorithm part of this whole discussion is so important.
We heard yesterday from witnesses that the mechanism for appeal is through the court system, and these are issues that perhaps all of the big players that have been represented have access to and have teams of lawyers.
But when we are talking about regulating user-generated content, that doesn’t just mean big players. It means individuals. That’s why this whole process of appeal has to be looked at from a slightly different vantage point on that. Anyway, like the chair, I too am giving statements instead of asking questions so I’ll be quiet. Thank you.
The Chair: We still live in a free society, senator, for now.
I have heard the panel here on a couple of occasions talk about how this bill is taking steps forward to save Canadian culture and to push forward Canadian content. Frankly, I’m more of the opinion that the only thing this bill is trying to do is save legacy broadcasters from competition and trying, as a result, to limit the choice of consumers.
I have a couple of young people at home. I’m an old guy, so I sit in front of my TV and I watch TVA and even Radio-Canada and CTV. My kids, who are 25 and 22, keep walking by the family room, looking at me every so often, laughing. In between coming back and forth and laughing at me, they keep giving me news of what’s going everywhere in the world, particularly in their backyard, because they always seem to be getting it quicker than I am. They are streamers. I guess that’s what the term is for this generation.
Mr. Desjardins, earlier you talked about how we need a regulatory framework to bring everybody in line. Wouldn’t you say that what we need is a regulatory framework to create an equal playing field? Would you be amenable to having less regulation to untie your hands and create that equal playing field?
A lot of young people are telling me this will reduce consumer choice, and many people are saying it will also put at risk future investment into the Canadian industry. Those are the two issues I raise for anybody on the panel.
Since I called you out, Mr. Desjardins, I will allow you to respond first.
Mr. Desjardins: I’m happy to respond. In terms of protecting Canadian broadcasters from competition, the competition is already here. There is nothing in this that protects us from these global competitors.
In terms of what you were saying about the regulatory burden, I would concur with what Mr. Péladeau said this morning, which is that there needs to be a rebalancing of the regulatory burden.
Right now, we have massive players who have more than half of the market and are growing in part because they have access to all of the global capital in the world. We are Canadian-owned broadcasters who have limitations in terms of where we’re able to get capital and invest that capital and who have obligations in terms of what we invest it on. So if you are asking me if I would like to see the regulatory burden more flexible and lightened — yes. What I’m also saying, though, is that there is not a stitch of regulatory burden on these other players.
If we continue as is, there will not be a Canadian broadcasting system owned by Canadians showing Canadian content. This is what I’m trying to get across. And that means there aren’t those Canadian stories, especially news, that will be shared with Canadians. Canadians aren’t going to see themselves reflected back to themselves.
In terms of consumer choice, I’ve heard a little bit about people saying that certain services will pick up and leave Canada. All of these services, when they go to the analysts, state Canadian and American subscribers together. There is not a chance they will ever take 12 to 15% of their subscribers and throw them overboard, because they know how important that subscriber base is to financial markets.
There is nothing I see in this that is about protecting Canadian broadcasters. “Level playing field” is the line people say. I think we just want something that is fair and equitable. Those are the words we have continued to say. The words that got taken out of paragraph 5(2)(a.1), we would like to see them reflected back in paragraph 5(2)(a.1) that say, “fair and equitable.” That’s all we are asking for.
Mr. Fortune: Level playing field, competition, those are all about — There are some services that I would be remiss if I didn’t mention them. There are some services that are supported by our broadcasting system because they achieve certain objectives, and they are not commercial services. These are services like APTN, TV5Unis, AMI and so on. These services have a role to play in our system. Without support, there is no doubt the constituency they reflect would not be reflected in Canada, and certainly no globally based streamer is going to reflect Canadian culture back to Canadians. There is no way that a global streamer is going to create Indigenous content the way APTN does, period. Plus, it is not owned by Indigenous people.
There is a competitive environment, of course, for broadcasters, but there are also public interest services that are supported in our Broadcasting Act. An important factor in terms of equity is that, right now, our established players, the cable and satellite companies, support those services through wholesale feeds. Global platforms do not, and that’s a concern we have raised to this committee. That’s a level of equity that does need to be introduced into the bill.
Mr. Mastin: With respect to the question relating to foreign investment and the impact of the bill on foreign investment, it’s notable that over the past couple of years we have seen, for the first time, the U.S. streaming services opening production offices in Canada. In our view, that is not coincidental with the prospect of Bill C- 11 being adopted. It is in large measure because Bill C-11 is expected to be adopted, and, for the first time, those services will not be using Canada solely as a manufacturing platform for their own IP but will be expected to make contributions to the health and long-term sustainability of the domestic production industry.
In that respect, it is also worth noting that we, as a domestic production industry, have worked incredibly hard over the past 25 years not only to build a domestic industry but also to attract service production. You had representatives from ACTRA and the DGC testify before you yesterday evening. We work with them and a range of domestic industry stakeholders, including, for example, owners of studio space, to go on what we call “trade missions” to Hollywood expressly for the purpose of attracting more service production to Canada. In that respect, I think we have been successful beyond anyone’s wildest dreams. Last year, foreign-location service production equalled $5.27 billion in production volume.
However, that success has come with some unintended consequences. One of those consequences is that it has put ever greater inexorable pressure on the domestic production industry.
We fully support service production, it is why we are constantly seeking to bring more service production to Canada. We see Bill C-11 as a tool to ensure we have a balanced production portfolio as between service and domestic which, up until about five years ago, was long the case and worked very well for both service production and domestic production. My members do both.
We would not be sitting here before you urging you to adopt this bill if we had any material concerns about its impact on service production. What we are actually seeing is the prospect of even greater investment in Canada, but for Indigenous storytelling rather than the opposite as a result of the adoption of the bill.
Haydn, is there anything that you would like to add to that?
Mr. Wazelle: I would echo everything that you said. I think that we can look to other countries, in particular the U.K., where once the codes of practice were introduced, it increased independent production sector revenues from $1.3 billion in 2005 to nearly $3.1 billion by 2013. They have not seen a drop from foreign investment and the streamers remain very active in their production sectors.
France and Germany also have codes of practice in place, and they have continued to have a strong domestic sector as well as a service production sector.
Senator Dawson: Just to be clear, chair, sometimes I have also been known to make statements and turn them into a question at the end. That is what I am probably going to be doing now.
I have no shame in admitting, as sponsor of the bill, that this bill has the objective of protecting Canadian independent producers, writers and broadcasters. I have no shame. It’s not going to be done on the back of consumers. Consumers are not being attacked by this bill. Let’s be clear on that part of it.
I have no shame in believing that the CRTC, even though I have been known to criticize it in the past, is by far the best tool to do it. It could also do the arbitration on the terms of trade. There are all kinds of opportunities. We should not shy away from the fact that historically the CRTC and Canadian broadcasters have done a good job.
As Mr. Perreault mentioned, I was on the board of TV5 as a volunteer many years ago. TV5 would not exist if we did not have the Canadian broadcasters supporting it. If we want to look towards the future, we have to find a way in which these streamers — whether they are Canadian streamers, because the producers are going towards streaming — have to participate in financing these services: APTN, TV5, et cetera. I have no shame in admitting that that is the objective of the bill. You can be accusing me of doing that, so I’ll live with that problem.
What do you think about that, Mr. Desjardins?
Mr. Desjardins: I think it was well put.
Senator Dawson: I know, and I am not ashamed. Contrary to you, I don’t shake my head every time I don’t agree with something.
As sponsor of the bill, I am always a little bit careful because sometimes I have to think about the interests of the bill but I also, as a Canadian —
The Chair: Senator, no one is taking away from you the right to express your —
Senator Dawson: Well, madame is certainly commenting when you are not listening. I never comment on madame when she is speaking; I would like to have the same respect from her. I am talking about Senator Wallin, for those who are not seeing it on television.
The Chair: We are all being respectful here, and everyone has their time to express themselves. It is called democracy. So the panel can respond to Senator Dawson’s comments, questions and perspective.
Mr. Desjardins: The only part of what you said in your very passionate defence of the Canadian broadcasting system, and maybe you would guess that I would object to it, is that I think any question in terms of trade between Canadian broadcasters and Canadian independent producers is not a light-handed touch; I think it would be profoundly problematic for broadcasters, especially at this time when they are facing all of the competition in the world.
That is my one, tiny quibble in what was a very spirited and passionate defence of the Canadian broadcasting system.
Mr. Mastin: If I may, first of all, echo thanks for your support and sponsorship of the bill but also — because we can’t agree with Mr. Desjardins for too long — say that terms of trade are essential and have been proven to work in other jurisdictions. Haydn referenced the U.K. where it tripled the size of the independent production sector in less than a decade.
I want to correct something for the record. Mr. Desjardins was talking earlier about how when a Canadian broadcaster partners with a producer on a show, the broadcaster does not derive any of the economic benefits from the show because it’s a licence fee that’s paid and the producer owns the show. I think that we have to be very careful here.
Because of the imbalance in negotiating power between these large broadcasters and producers what, in fact, happens is that, while the producer may own the show on paper, in reality the broadcaster has secured the vast, overwhelming majority of the rights and revenues associated with that show and, to add insult to injury, often has the producer go and sell the show around the world with the revenues flowing to the broadcaster.
Broadcasters actually accrue very significant benefit from the deals that they are doing with producers because it is not a level playing field. There are multiple playing fields that need to be levelled here: the ones between Canadian broadcasters and streamers, but also the one between independent producers, on the one hand, and Canadian broadcasters and streaming services on the other, so that when a show is a success, everyone shares in that success. That is what we are trying to achieve, representing entrepreneurs in this industry, is that when a show is a hit, everyone shares in the success of that hit — whether it is the broadcaster as the partner or the streamer as a partner — with our members.
Senator Clement: I’m still new to this process, still trying to figure things out. I want to come back to newsrooms.
I’ll comment that I appreciate that Mr. Wazelle mentioned the U.K. example twice. It sounds like there is a lot of data there that is interesting, more data there than what we might have access to here. I may want to follow up with Mr. Wazelle or that group on that issue.
Mr. Desjardins, we are in a world of increasing misinformation. Canadians are relying on our newsrooms, even younger Canadians like the children of the chair who probably get their news through CTV and CBC but faster through Twitter and through all of the platforms that newsrooms are using.
Can you lean more into how it is that the threat to programming and access to programming is connected to newsrooms?
Mr. Desjardins: Sure. I’ll pick up first on this idea that you have expressed and Senator Housakos’ discussion earlier; I don’t want people to think of my members as the bunny ear crowd. These are really dynamic, innovative Canadian media companies. They are in all of those places where there are audiences of all ages, so they are on YouTube, Twitter and Instagram.
There are a couple of my members where I usually see their stories through one of the social media platforms, but then I can also go and find it on their streaming platforms they have also built. I’m a New Brunswicker. I can watch Global Maritimes on the Global TV app. This is not just about an old, linear model. Our members are everywhere.
To your point about programming rights, what we have now is an ultra-competitive market for programming rights in Canada. Part of what used to help subsidize the newsrooms on the one side was the very popular shows, a lot of times American shows. But Canada is a unique market in the world, in that there is no market where there is another country’s content that has as much of a foothold in it as Canada’s has. Going back to the days when you had 15 cable channels, and that was the biggest package that you could get, four of those cable channels were the American networks. So they have always had this foothold in our market. Being able to access that content that Canadians are looking for is really important.
The point is that now that you have these global streamers that are coming in and basically a lot of the programming is not necessarily available. If it is available, it is more expensive. That’s at the same time that, again, our subscriber numbers are going down because people are skinny cord cutting or never cording and the advertising market is now being shared with all of these global players.
You have a whole bunch of places where we are seeing stressors in terms of our revenue, in terms of how much we have to spend. Where does the squeeze come on that? The squeeze comes in the newsrooms, the squeeze comes internally within the organizations. There is still $681 million spent annually by Canadian broadcasters on news and community information programming. It is significant but it’s what’s at stake.
Senator Clement: Thank you.
The Chair: I would like to start by thanking our witnesses and a particular warm thank you to all of you because we have gone way over our time. I appreciate you indulging the committee. It was a useful exchange.
Colleagues, we’ve gone in each meeting over our allocated time. I was very generous to all my colleagues in terms of time for questioning. That was because this week we are the only game in town in the Senate. Next week, I want to remind colleagues that when we get back to our regularly allotted time, the chair will be a little bit more rigid. It will be more four to five minutes per individual because we will only have the time we have allocated to us. I want to be fair to everyone. We will also inform our guests as we continue our work next week that we would like succinct answers to succinct questions. I think we did some great work yesterday and today.
Thank you to all. We’ll see you all next week.
(The committee adjourned.)