THE STANDING SENATE COMMITTEE ON TRANSPORT AND COMMUNICATIONS
OTTAWA, Tuesday, October 18, 2022
The Standing Senate Committee on Transport and Communications met with videoconference this day at 9 a.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.
The Chair: Good morning, honourable senators. I am Leo Housakos, senator from Quebec and chair of this committee. I would like my colleagues to briefly introduce themselves.
Senator Quinn: Jim Quinn, New Brunswick.
Senator Miville-Dechêne: Julie Miville-Dechêne, Quebec.
Senator Simons: Paula Simons, Alberta Treaty 6 territory.
Senator Manning: Fabian Manning, Newfoundland and Labrador.
Senator Klyne: Good morning and welcome. Marty Klyne, from Saskatchewan, Treaty 4 territory.
Senator Plett: I will not take exception to somebody from Saskatchewan thinking he should be ahead of Manitoba, but he is not. Don Plett, Manitoba.
Senator Sorensen: Karen Sorensen, Alberta.
Senator Dawson: Dennis Dawson, Quebec.
Senator Gagné: Raymonde Gagné, Manitoba.
Senator Clement: Bernadette Clement, Ontario.
Senator Dasko: Donna Dasko, Ontario.
Senator Wallin: Pamela Wallin, Saskatchewan.
The Chair: Thank you, colleagues. We’re meeting this morning 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.
Joining us for the first panel, I’m very pleased to welcome Vivek Krishnamurthy, Director, Samuelson-Glushko Canadian Internet Policy and Public Interest Clinic and Professor at the University of Ottawa. We also have with us Gregory Taylor, Associate Professor, University of Calgary, who is joining us via video conference; and Dwayne Winseck, Professor, School of Journalism and Communication and the Global Media & Internet Concentration Project, Carleton University.
Welcome to our panellists. Each of you will have five minutes for opening statements and then we will turn it over to my colleagues for Q and A.
Vivek Krishnamurthy, Director Samuelson-Glushko Canadian Internet Policy and Public Interest Clinic, University of Ottawa, as an individual: Thank you very much. It is truly an honour to be here today to share some of my thoughts on Bill C-11.
My testimony will focus on those provisions of the bill that seek to regulate the distribution of audiovisual content on the internet. In my view, these provisions are vague, overly broad and pose a serious threat to the right to free expression in Canada and beyond.
The starting point of my testimony today is the fact that almost all broadcasting regulation in this country needs to be understood as a form of restriction on the right to free expression. We know this from George Carlin’s classic comedy routine about the seven words you can’t say on TV, but it’s perfectly legal to write these words in print or perhaps say them in the Senate — I’m not going to try, however. How and why is that the case? Why can we restrict certain forms of expression in broadcasting but not in print or, again, in a public place?
We don’t have a lot of law on this in Canada, but we know from the way that the right to free expression has been interpreted in other rights-respecting democracies that there are two reasons why more onerous regulations are justified in a broadcasting context and in other contexts. The first is spectrum scarcity. There is only so much electromagnetic spectrum available for linear broadcasting or bandwidth on a traditional cable connection, so certain kinds of restrictions on content are more justifiable in a broadcasting context than an internet or print context.
The second is the invasive nature of broadcasting. Much like Forrest Gump’s box of chocolates, you never know what you’re going to get when you turn on the TV, which is why every democracy understands that you can restrict what kind of programming is shown at different times of day so that, for example, a child doesn’t see something that’s inappropriate. These rationales fall apart in the online context. There’s no spectrum scarcity in the online world. You can watch as many cat videos as you want on YouTube without affecting the ability of other people to see content online and streaming services aren’t pushed into your home in the same way as conventional broadcasting signals are.
Despite these differences, Bill C-11 seeks to apply broadcasting law hook, line and sinker to services that delivery audiovisual content online. That raises serious constitutional human rights concerns. The first is overbreadth. Bill C-11 defines broadcasting in terms of transmitting programs for public reception using a telecommunication system. The existing Broadcasting Act, in turn, defines programs basically as sounds, visual images or a combination thereof that are meant to inform, enlighten and entertain.
Taken together, these two provisions seek to regulate practically all audiovisual content distribution on the internet. Prima facie, the law says the CRTC can regulate the content and the provisions that apply to traditional broadcasters apply to the online distribution of content. Now, the only thing that saves that is proposed section 4. I’ll talk about that in a moment.
We shouldn’t be enacting laws that seek to sweep so much content into a regulatory scheme. Surely there are problems with internet content distribution, but those require a different kind of response. We shouldn’t just say that everything is in except for these few things that are out.
Let’s look at the exceptions in proposed section 4. I’ve been a lawyer for the better part of 15 years and this section is about the most confusing thing I’ve ever encountered. Let’s break it down.
Proposed subsection 4.1(1) says that the act doesn’t apply to programs uploaded to social media, but there are two catches: The first is that “social media” is left undefined; and second, clause 4.1(2) creates an exception to the exception, including for programs that generate revenue directly or indirectly. All social media enterprises are profit-making entities, so, of course, every piece of programming that they carry is going to directly or indirectly generate revenue for them because it ties to their business model. So really, there’s nothing that prevents the CRTC from imposing regulations on the full stack of online audiovisual content distribution.
Now, supporters of the bill will point to two things, I’m sure. The first is the provisions in the bill that say the CRTC must take free expression into account, and the second is we can trust our institutions not to be overly broad. That’s not good enough for three reasons. The first is the basic principle in a democracy that legislation needs to be narrowly tailored to achieve its objectives. We need to specify in the law exactly how things apply and not leave it to the discretion of a regulatory agency. That’s especially important because Canada is not immune to the whims of populist authoritarianism that are howling around the world. We cannot be sure that our institutions will perform as well in the future as they have in their past. We need only look at the inquiry into the events going on in Ottawa in February for proof of that proposition.
Like it or not, other countries are watching and they will emulate our example. If we, in Canada, can say our cultural policy promoting the voices of Canadians is so important that we can regulate all online content, what is to prevent Viktor Orbán’s Hungary, or India’s Narendra Modi, who have their own particular views of whom is Indian or Hungarian, from imposing similar views and pointing to our example? All this behooves us to be more careful.
I realize I’m out of time. However, I do have a solution that will fix about 80% of the problem, but perhaps I’ll save that for the Q and A. Thank you.
The Chair: Thank you, Mr. Krishnamurthy.
Gregory Taylor, Associate Professor, University of Calgary, as an individual: Thank you very much for having me in today.
I wish to start today by challenging some established myths that we have regarding contemporary Canadian media. The first one is that broadcasting and so-called old media are dying. September 2022 data shows that nearly 70% of Canadian households still subscribe to a broadcasting distribution service. Can you imagine another industry with that level of penetration that would be crying that it is somehow in dire straits? The framing of this issue usually cites the dramatic one in five people who have cut the cord, which means they have stopped receiving the cable signals or satellite, as a sign of an industry in peril. My response to that is generally, is that all? If the number is only one in five, Canada has now had Netflix for 12 years. I think that we’ve known that this change has been coming for more than 10 years. At that point, cable had 85% penetration in Canada. It’s in decline, but it is still by no means an industry that is dying.
In Bill C-11 hearings thus far, broadcasting has been called “an obsolete artifact of the 20th century.” However, to me, the real story remains the incredible resilience of the sector after 12 years of streaming wars going on in Canadian living rooms. This matters for a couple of sides of the Bill C-11 argument.
First, media industries who own distribution and are crying for protection need to be taken with a substantial grain of salt. My colleague Professor Winseck, who will be speaking momentarily, has demonstrated in his research that some areas of old media, such as distribution, are actually doing quite well and regulatory assistance is unnecessary, but other areas, such as ad-supported local television, are clearly in difficult times right now.
Also, for those who argue that Bill C-11 is a regulatory mistake and that we’re protecting a relic of some other age in the modern day of the internet, I argue that broadcasting is far from dead. This is something that continues to have impact for people.
The problem is that distribution is tied to how we fund our creation in this country, and distribution is clearly on the decline, and there is likely no stopping it in the near future. It is a very slow decline. I think this is what Bill C-11 admirably tries to rectify by making streaming services now contribute to the production of content in Canada.
Another myth is that Canadian private broadcasters are defenders of Canadian culture. Any cursory glance at a prime-time TV schedule in Canada will demonstrate that Canadian conventional private television’s very existence relies on the rebroadcasting of American programming. It’s been like this for a long time. I think if they are in need of regulatory protection, they have to do a much better job at proving their value to Canadians. It’s always the first part of the act, and if “the Canadian broadcasting system shall be effectively owned and controlled by Canadians,” we have to emphasize why this is important. Part of this should be that the private broadcasters are making a real contribution to the national cultural sector. This will be something the CRTC will need to consider.
The third myth is that public broadcasting was necessary in the era of limited choice but is no longer justifiable. I argue the exact opposite is true. We have more media choice by far, but Canadians clearly still place trust in the CBC. I have included links in my submission to their significant online presence and how they have higher visitations to their news site than any other site in Canada.
Other people have written that the CBC should now be a subscription service; we don’t need it. I argue that is entirely wrong and the wrong direction to be going for Canadian media right now.
The fourth myth is that government will assume a “Big Brother” role to control media and/or content or restrict freedom of speech. The CRTC is the very body that chose not to regulate online content in 1999. There was never anything in the online media exemption order that said the CRTC did not have legal grounds to do it if they chose to regulate, but they didn’t. I think that a lot of the hyperbole around “Big Brother” and government watching you hasn’t really played out in the real world.
That said, I think Bill C-11 is not perfect. It tries to do too much. It punts too much power to the CRTC. I see this as a common thread throughout a few of the presentations. However, to keep the current act as it is would be a recipe for turning over the Canadian system built over a century to economic powers beyond our control. I’m not concerned about an elusive Canadian identity. I think the Canadian identity is fine. I’m worried about political sovereignty.
These amendments as presented to the Broadcasting Act build a far more inclusive act as well. This is a point that I think is undersold in a lot of the discussion around Bill C-11. It builds a much more inclusive act than its 1991 predecessor. You can see that in paragraphs 3(o) and (p) where it talks about inclusion of minority groups. In particular, Indigenous groups are recognized far more specifically in this act than they ever were in 1991. It emphatically opens the door to greater involvement by Indigenous and visible minority groups in Canada, and that is certainly a welcome step forward.
That is where I will stop today. Thank you very much.
The Chair: Thank you, professor.
Dwayne Winseck, Professor, School of Journalism and Communication and the Global Media and Internet Concentration Project, Carleton University, as an individual: Thank you very much for having me here. It’s very nice to be with you today to talk about Bill C-11.
We need to recognize that we’re at a critical juncture, at a moment in time when the internet we once had no longer is. Today, instead of a “free and open internet,” we have a centralized internet that is ruled by a relatively small number of access network operators, search engines, social media services and digital media content aggregators and distribution platforms.
Consequently, many democratic and non-democratic governments alike are reasserting their authority to regulate internet services and to deal with enduring communication and media policy issues. Some of these efforts are good. Some are terrible. Some of the best have been well thought out from the beginning and are being revised as they evolve.
Unfortunately, the online streaming act can be one of the good ones, but there are seven areas that I will spell out today where there are fundamental flaws that hold it back.
First, as Professor Krishnamurthy, Professor Taylor and others have pointed out, the bill’s intent to maybe deal with the streaming services is laudable, but the problem is that the lines around who and what is in and what is out are convoluted and unclear. This needs to be fixed. The definition of a broadcast program sweeps far too diverse a range of human expression into the reach of this act and leaves it up to the CRTC to decide who it will regulate, what it will regulate and what it will not.
At present, section 4 is at war with itself on account of these problems and with the rest of the bill. Consequently, users could end up being regulated instead of capturing the large streaming services and platforms as a good bill would.
Clear thresholds based on market capitalization, revenue and audience size are needed to draw lines between which streaming services are covered and which are not. The European Commission’s Digital Markets Act and Digital Services Act and several before bills before Congress in the U.S. offer useful guidance on this point.
Bill C-11 does not deal with market and gatekeeping power, but it should. We live in a country that has the eighth-largest media economy in the world based on revenue. We do not have a tiny media economy. The media economy in Canada has more than doubled in size from 2000 to 2021 from $45 billion to $94.5 billion.
Many sectors are thriving and vibrant. There are a few sectors that are in dire straits, as shown in my handout, which shows the general trends.
Online aggregators and distributors have emerged as significant players in Canada; on this, there is no doubt.
In 2021, Google, Amazon, Apple, Facebook, Microsoft, Netflix and Disney had combined revenues of $15 billion from their media and internet services in Canada, which was about a 16% market share of that $94.5 billion market.
They have been steadily chipping away at the high levels of concentration that have defined the media economy in Canada for a very long time, especially in the last decade and particularly in the TV marketplace, giving people more choice and also giving program services more doors to knock on when they want to distribute their programming.
They have also, however, snuffed out competition in other areas, for example, online advertising, where the big three American tech giants — Google, Facebook and Amazon — now account for about 90% of the market.
That said, let’s keep things in perspective. The big six Canadian companies — Bell, Telus, Rogers, Shaw, Quebecor and the CBC — had combined revenues last year of $65 billion, or about 70% of the market share, four and a half times the footprint of the U.S. tech giants in the media and internet sectors. Again, in my handout, you can see a ranking of the biggest 20 players in Canada.
In short, there are both new and well-established instances of substantial market and gatekeeping power in Canada. Bill C-11 should confront this reality, but it does not. Just as the CRTC regulates the terms of trade between vertically integrated broadcasting distribution undertakings, or BDUs, and programming services, Bill C-11 should expand the commission’s capacity to do the same for online aggregators and distributors. This could include thresholds, for example, on asymmetric obligations for players with significant gatekeeping power, subject to periodic review. This goal would be to create something we might call “fair carriage,” a selective picking of principles from common carriage, and must carry rules that we already have. It would deal with terms of posting, access, carriage and distribution, distribution of revenue and a redefined concept of discoverability that, unfortunately, has been hijacked in the debates and in the discussions in this chamber around this bill to mean simply that it’s all about promoting Canadian content.
Instead, a better view of discovery would mean opening up and discovering what’s inside the complex technical and economic black boxes that now comprise our communication systems. The idea that companies’ algorithms and source codes should be off limits should be a non-starter. The principle of fair carriage would aim to constrain gatekeeping power while promoting access to the content of small players and furthering the democratic values of pluralism and diversity. Similar principles could also apply to the internet advertising system and serve as a unifying thread to the online news act, Bill C-18.
Here are a few closing points.
Bill C-11 sets out some minimal information disclosure requirements but punts the details to the CRTC to work out. The bill needs to be much more specific in terms of what information should be disclosed and who is to get access to that information — not just the regulator but also scholars, journalists and the public at large who have access.
Data and privacy protections should also be enshrined in the act given how valuable personal and audience information is. I’m a big fan, actually, of the CRTC, believe it or not, but Bill C-11 greatly overestimates the commission’s ability, its independence from corporate influence and its commitments to the public interest. Punting so much to the CRTC also means that the contentious debates taking place in this room and around this country are now just going to be brought inside the CRTC and left to play out in a much more closed environment. It will not be subject to the scrutiny and will therefore be deprived of the same levels of legitimacy that this bill will need for the long haul.
Finally, I think Bill C-11 unwisely expands the scope of ministerial intervention in matters before the commission, and that should be drawn in. Thank you very much.
The Chair: Thank you to our panellists.
Colleagues, we have a long list of questioners who would like to participate. Because of the constraints of time, I’m going to try to be disciplined today by not going over four minutes, including for me as the chair, who will start the questioning.
My question is for anyone on the panel. You have written, Professor Taylor, that the bill endeavours to do too much, and have suggested that it be narrowed in scope, and many have said the same thing. Unfortunately, I don’t think that is likely to happen, but it does speak to serious concerns over implementation — serious, flawed implementation — that affects the bill. They are concerns echoed by the CRTC themselves, which has argued that the regulatory responsibilities envisioned for the CRTC in this bill are simply beyond the capacity of this organization.
First, how concerned are you that the implementation of this legislation might become unmanageable? What would be the possible fallout from that? And second, should this committee and the Senate insist upon the government providing regulatory directives attached to the bill?
The questions are for Professor Taylor and anybody else who wants to weigh in.
Mr. Taylor: Thank you very much.
Do I have concerns about this being unmanageable? Yes, I do. This bill, as written, will need to be accompanied by a major overhaul of the CRTC itself. That is not unprecedented. When the U.K. realigned a lot of its media policy 15 years ago, they also developed a brand-new media regulator, Ofcom. I’m not saying we need a new regulator, although it’s something to be considered. I believe we should have one communications regulator instead of this split between ISED in some areas of communication and the CRTC in others.
Is it unmanageable? Potentially. It will depend on how the CRTC decides to go about this. However, like everybody has said so far, we find that this places too much responsibility in the hands of the CRTC by leaving some things to be determined, and “to be determined” always means “we’ll let the CRTC figure it out.”
I’m not sure it’s always necessarily a closed shop at the CRTC. Like Professor Winseck, I’m a big supporter of the CRTC. One of the things I like about it is that it does have public hearings on these things. When you’re having public hearings, though, it’s slow. Like this right now, democracy is slow. The CRTC is a democratic institution. It does fairly well that way, but it does pose problems.
To the second point you raised as to whether this should come with mandates from the government itself, I have hesitations around that. That would then compromise the arm’s-length institution of the CRTC itself. It should not be dictated to by the government, and that’s why it’s always been designed as something that operates beyond thinking about the next election cycle.
So I do have some difficulties with the idea of leaving it to the government to tell the CRTC what to do. I think this bill — because it’s going to be around for a long time as well — needs to be clarified. I get that perhaps that’s not going to happen at this point, but it is something to be considered.
The Chair: There are 30 seconds left, if anybody else would like to weigh in on that. If not, we’ll move on.
Mr. Krishnamurthy: I would say that the bill should be the regulatory direction. Instead of issuing self-standing regulatory directions to the CRTC, we should fix the bill and make sure it’s fit for purpose.
The Chair: Thank you.
Senator Miville-Dechêne: My first question is for you, Mr. Winseck. You’ve talked about the threshold to correct subsection 4.2(2). Can you give us an idea of what threshold you’re thinking about? We have heard here $100 million and $150 million. What do you think?
Mr. Winseck: I’m not sure if I want to go out on a limb and peg a particular number right now. It’s a number that we would have to look at using market share, the revenues they have in Canada and the size of the audience relative to the other major Canadian players and find a cut-off between large, medium and small users. However, the idea we should be aiming for is that maybe the bill would be the best place to set out the thresholds, and then we can argue whether they’ve got it exactly right.
Senator Miville-Dechêne: Second, I would like to address this question to both of you, Mr. Winseck and Mr. Krishnamurthy.
Freedom of expression — you’ve mentioned that. You probably know well that in the bill, on page 10, there has been an amendment saying that the act applies in a manner that is consistent with freedom of expression. I didn’t quite follow your argument about restrictions being freedom of expression, and you mentioned protecting kids. Obviously, as you know, freedom of expression as a right is not absolute, and there are reasonable limitations. There have been some in the history of this country.
Isn’t it somewhat of a scare tactic to say the bill restricts freedom of expression?
Mr. Krishnamurthy: With regard to section 4.2, the invocation of freedom of expression in the bill does no work, regardless of that statement. Of course, the CRTC, the government or whoever else would have to respect freedom of expression; otherwise, the courts will strike them down. That’s how things work.
So what is the nature of my concern? The problem is with the government giving itself the authority, or vesting the authority in the CRTC, in the first instance to regulate a great deal of human expression using a structure that is purpose-built for broadcasting. The limitations on freedom of expression in the broadcasting context are stronger. There are more grounds for a government to do that. That is what our constitutional law and the laws of other countries that are democracies have held.
My concern is with the government, in the first instance, sweeping all of this in and then creating narrow exclusions that are not very strong but which could be. Our institutions are fallible, and my view is that when we are crafting legislation, we should not sweep more broadly than we need to.
If you would allow me, I can propose my simple solution to 80% of the concerns I raised. The solution is simply to recast the exception in 4.2 so that it does not apply in respect of user-generated content, or it could be framed in terms of editorial control.
When a service like Apple TV+ decides what to put on its service, the act could apply. When YouTube has its own created content that it uploads to its service, the act could apply. However, when I upload to YouTube the video of my very cute cat, the act would not apply. It would not apply to things that the platform does not have editorial control over.
This would cure many of the concerns about free expression that I and others have with the bill, and I think it would also set a positive example in the international debate. I want to set out the international stakes here.
Canada is the chair of the global Freedom Online Coalition. A free and open internet is central to Canadian values and to Canadian foreign policy, and we have taken that leadership role in the world. When we are regulating the online sphere, we need to be very clear about what we are doing and what we are not doing and to send the signal to say that we think that broadcasting is different.
Senator Sorensen: Thank you, Senator Miville-Dechêne. That was the first part of my question on revenue thresholds, so I’m going to move to the second part.
I will direct my question to Professor Winseck, but I’m also interested in hearing from others. Regarding your suggestion on thresholds, is that consistent with what other jurisdictions have done?
On a broader scope, to everyone, I really appreciate the reference to other jurisdictions. I’m pretty confused. We have had lots of witnesses say this is the first country to ever do this and there will be terrible consequences to it. We have had other witnesses, and I think everyone made reference to other jurisdictions.
Could I get some clarity on what “other jurisdictions” means? Are there other Bill C-11s or is it alternate forms of that?
Mr. Winseck: Right now, internationally, we are seeing an enormous amount of activity — in fact, so much that it makes my head spin. About two years ago, a colleague of mine in Switzerland and I decided to tally these things up so we can keep track. I was trying to write articles and cite sources, and I couldn’t remember if it was this version or that version, or this country or another country. Our list is now two years old. It has gathered up major public inquiries, bills, legislative and regulatory decisions over the last five or six years and is now 120 entries long. This is soil that is becoming very well tilled.
Our most proximate reference points are the European Union’s Audiovisual Media Services Directive and the Digital Services Act and Digital Markets Act, the latter two of which have clear thresholds for what they call very large online platforms that I’m suggesting we can use as a guide.
The United States has a suite of half a dozen bills taking up various angles of the big-tech industry, from market power to interoperability to privacy, and all sorts of other things. One or two of those bills also have specific criteria for what they call covered platforms, and that’s what I’m thinking we need here in Canada.
I’m hesitant to put forward a concrete number because you have to be careful about this. I don’t want to put out a number that will make me look silly afterwards. Basically, we can talk about numbers.
Netflix in Canada had $1.3 billion in revenue last year and about 7.5 million subscribers, or half of Canadian households. That would clearly be in. What about Disney+? I would think on the basis of its revenues, absolutely. Amazon Prime Video, based on revenues and number of users, absolutely. Maybe CBC Gem would not be because it is so tiny and has a small revenue and audience base.
There are lots of examples and clear guidance. We can do this. The ceiling will not fall. What we have to start from is that this is not your parents’ internet. We do not have the free and open internet anymore.
The free and open internet has been recentralized in line with a recurring pattern that tends to happen to new communication technologies. They go through a phase of 20 to 25 years when they are characterized by what we can call methodless enthusiasm. There are hundreds of thousands of various players and no clear sense of where things are going. Then they go through a period of consolidation, which begets institutionalization of the industrial, technological and regulatory forms. That’s where we are today. Many countries around the world are now trying to nail down what the institutional parameters will look like. We have to do that too.
Senator Sorensen: Thank you.
Senator Manning: My question is for Professor Winseck and any other witnesses who would like to answer.
Many of the witnesses who have appeared before our committee have argued for a more flexible definition of Canadian content, one where multiple factors can be considered with no one factor being determinative. They have pointed to many productions that, although they may be produced in Canada, employ Canadians, are written by Canadians and even be about Canada, they are not regarded as Canadian productions because the production company is not owned by a Canadian.
Do you believe it is time that we adopt a more flexible definition of Canadian content and would you support such an amendment to Bill C-11?
Mr. Winseck: In some ways, this is one more element of this bill that is kind of like kabuki theatre or shadowboxing. What this debate is about is that people drag it down to CanCon and then the cultural nationalism rabbit hole and everybody can squabble and beat one another up down these two holes.
What this is really about is television and film finding their models. Two basic models are in play. One is the commission model where you basically hire a group to produce a film and you own all the rights. The other is a finance for partial rights model.
What the streamers are doing and what the big American film and television studios have always done in Canada is relied upon the commission model. They pay you, you produce the programs and you give up the rights forever — across any medium, across all time and across all geographies.
There are other models, including in the United States, in which independent producers take some financing from a distribution studio, from financial investors and from other sources, and they trade off partial rights for distribution in certain windows.
What I think is really at stake here in Canada is that we are trying to get more control for producers over the distribution rights of the programming. All this stuff about Canadian content is a diversion, like so much other stuff, and it muddles people’s heads so they can’t think straight about the real money, control and power issues on the table.
Senator Manning: All the witnesses this morning have raised concerns about Bill C-11, as have other witnesses. If the bill is passed as it stands today, what are major repercussions for Canadian content, Canadian TV and Canadian radio? I’m concerned that if the bill is passed without the amendments that you, Professor Krishnamurthy, and others have put forward, talking about a rabbit hole, what hole are we going down now? Next year or the year after, we could be coming back and trying to make amendments to Bill C-11 to correct the problems you people have put forward this morning as a possible issue that we have to deal with.
Mr. Winseck: The point I made earlier about Canada being the eighth-largest media economy in the world means that companies are not going to bypass Canada because they get a piece of legislation that they don’t like or crimps their style or power. I think we can put that to the side as a bogey.
However, I do share Professor Krishnamurthy’s concern that if we try to force-fit this diverse range of human expression into the broadcast program mould, we will set a bad precedent that will not serve Canadians well. It will be prone to judicial challenge and I think it does not do us well on the international stage.
I disagree about the free and open internet, but I think Canada can set a good model with Bill C-11 if it properly regulates these new services and the old ones.
The Chair: Thank you, professor.
Senator Wallin: On the Canadian content question, Mr. Winseck, I understand your point that sometimes it is a cover. However, we are seeing the government use that in an ill-defined way. I just spent a couple of hours with some of these smaller content creators last week who walked me through this. They have a business proposition; they make money. But they cannot figure out what would qualify them or disqualify them from Canadian content because that’s so core to them. It’s about what gets pushed up and what gets pushed down. If that’s not clear, they will get pushed down.
Mr. Winseck: This is the knot that is so hard to get out of. I really think their concerns are misplaced. I don’t think they have these things to fear. In fact, they might find it beneficial to open up and discover what’s inside that black box that is shaping who sees their content, how it’s distributed and, more importantly, how they’re paid. That is the idea that there is going to be some magic picture of what constitutes Canadian content and that’s going to be the North Star that they now have to approximate in order to go up or down in the rankings.
Senator Wallin: These are successful businesses. They are trying to figure out at what point they are defined as Canadian content or not because it will impact their bottom line or their discoverability — I hate that word as well — on the system. They are successful. They have a targeted audience. It is not wild cat videos. It’s educational content and they need it defined.
Mr. Winseck: I know the person you are talking about. I read her thread last week and listened to part of her testimony. I thought it was excellent, so I don’t want to be seen as disparaging or belittling anyone. I think what she has done and what many other people have done here is great. I do think that part of section 4 is a real problem. It does sweep them in because of the conditions it sets out there with respect to licensing, agents, making money and so on. I see their content being redefined as a broadcast program as fundamentally flawed. Clearly, this should be excised from the bill and dealt with elsewhere. The idea that, somehow, they’ll have to harness what they do in either their educational or their gaming programming into a cramped conception of Canadian content is something I’m not buying. I think they, just like the federal government, are both playing this.
Mr. Krishnamurthy: On this particular point, I think this points out the pernicious aspects of using the Canadian content model to deal with user-generated content that is uploaded to online platforms.
You heard from the Privacy Commissioner, who expressed some serious privacy concerns. In order to benefit from the boost one would get from the discoverability provisions, you need to identify who you are and show how you comply with those requirements. For certain kinds of programming, we are talking about large, multi-million-dollar productions. Large companies are exchanging rights. Maybe we don’t care so much about the definitions because they are easy to meet. However, when we are talking about individuals who are small business people making content or expressing themselves in a democratic way on those platforms, which is what they’re used for, then we get into a free expression problem.
That’s my pitch for exempting anything that a user uploads themselves from these regulations. Certainly, there are things we need to do there. Platforms need regulations. There are lots of interesting international models. I’m happy to answer questions about those, but it’s a different set of issues that needs different legislation.
Senator Simons: Professor Krishnamurthy, you have suggested we should just carve out all user-uploaded content from subsection 4.2(2). Here seems to be the one challenge: The government has said to us repeatedly that they need that because of giant record labels like Warner and Sony who use YouTube as a distribution streaming platform to compete with Spotify. They have said it is not fair to Spotify if we have free range on YouTube because it is Warner and Sony who uploads. If you are exempting user-created and uploaded content, you might exclude really big international entertainment behemoths.
Monica Auer of Canada’s Forum for Research and Policy in Communications has said to just get rid of section 4 altogether. YouTube has a complicated set of amendments to section 4 that would try to carve out just those big record labels. I would like to bring an amendment to proposed subsection 4.2(2). What amendments can I bring forward that will make sure that smaller players are allowed to use that platform but will not exempt the giant record labels? Then maybe we don’t need to have the thresholds and the money. We would just have clear language around who is in and who is out.
Mr. Krishnamurthy: I guess the question is how much can a single piece of legislation solve for without contorting itself.
All user-generated content platforms such as Facebook, and so on, have diverse users and provide multiple forms of functionality. The answer to your question, which is perhaps unsatisfying, is the economic problem posed by record labels who, frankly, own the copyright to these things. It is kind of their business where they make their copyrighted material available. That needs to be addressed through different legislation. It is perhaps a Copyright Act issue. It is perhaps a question of trade fairness and anti-competitive practices. Is it an abuse of your copyright monopoly, as a record label, to go head to head against this streaming service in this manner by making your copyrighted catalogue available on a platform like YouTube? We need to deal with that problem on its face as an economic problem rather than using a means to deal with it that sweeps in a lot of protected expression and creates free expression problems.
Senator Simons: What do you think of Monica Auer’s suggestion to get rid of section 4 completely?
Mr. Krishnamurthy: I think it is a bit of a problem because of the breadth with which online undertakings and programming have been defined. If we are going to get rid of section 4 — and I think there is a lot to be said for that — we need to refine those definitions. We need to build some other kinds of limiting principles to say a GIF on my website, which is audiovisual content, is not covered by this. We need to have other clear, limiting principles as to whom the bill applies and to whom it doesn’t apply.
Senator Simons: She would argue that section 2 does that.
Mr. Taylor: I think this is a change that was made between Bill C-10 to Bill C-11. I think Bill C-11 is clearer when it comes to the exclusion of amateur-uploaded content. I think we are spending a lot of time on something that is really addressed in the bill. Subsection 2.1 is pretty explicit that way.
The other thing I wanted to point out concerns Mr. Winseck’s idea of setting tiers for this. We are not reinventing the wheel. The CRTC already does this for broadcasting distributors in Canada. If you are a broadcasting distributor and you only have 20,000 subscribers, you have different regulatory obligations than if you are Bell or Rogers. I wanted to jump in and say that there is precedent for this. What Mr. Winseck is putting forward already exists in the broadcasting environment.
Senator Simons: Thank you. That is very helpful.
Senator Quinn: Thank you to all our witnesses. This has been very interesting. It underscores the importance of hearing from folks who have expertise in this area. I am not one of them, yet I will be asked to vote on this.
One of the themes that is clear to me is there need to be some modifications to the bill — not a complete overhaul, but there are some areas that need to have clarity so that the CRTC has greater direction from the law.
We have heard a lot of concern from various witnesses about the powers of the CRTC. A few panels ago, I mused about whether there was a methodology that would allow the CRTC to create regulations but, before they are enacted, they come back to committees of the House and the Senate for 30 days so they can be reviewed and have witnesses come to talk about those changes so there is some certainty that those changes are bona fide and correct and make sense. I’m just wondering what your views might be on that kind of an approach. That question is addressed to all of the witnesses.
Mr. Krishnamurthy: I’m not an expert on the administrative law challenges that might pose. My initial reaction is that it is a good idea insofar as I guess I’m in favour of regulatory agencies like the CRTC having as much transparency in their processes as possible, and it seems like a parliamentary committee or a Senate committee is a great place to talk about those things. Of course, we have a model of an independent regulator in Canada. The CRTC is supposed to be independent of politics to some extent. These are great places to study things. I think it is an idea worth exploring.
Mr. Winseck: I would be hesitant about this idea of the CRTC coming back to some parliamentary or Senate committee to run something by them. I think what we need is bright-letter law. I think that’s what it is called. I’m not a lawyer. The language of the text needs to be very clear. I think Ms. Auer has been clear on this point, and I defer to her judgment on this.
So there needs to be more clarity on the specification of the law, and I think Professor Krishnamurthy is making the same point. I think certain definitions at the start are ham-fisted. This idea of forcing this range of human expression in a broadcast program really sticks in my gullet. Historically, broadcasting has been a small carve-out of a much larger concept of communication at a distance by electrical means. That’s the master concept. It’s a grand concept. Broadcasting has been selectively excised from that beginning in the 1930s and then treated to special rules because of its special characteristics, some of which Professor Krishnamurthy outlined at the beginning. What we are seeing with Bill C-11 turns things on its head. It is the tail wagging the dog.
I think this is a big problem that ends up sweeping way too much into the bill’s potential reach and that of the CRTC. It is driving us into these acrimonious debates between those arguing on behalf of free speech and those arguing on behalf of a strong national culture. Again, I’m not a lawyer, but I think it would be susceptible to legal and constitutional challenges. The idea that what we say, how we express ourselves and how we act online can somehow be shoehorned into the notion of a broadcasting program, I think is just — this has got to go, in my view.
Mr. Taylor: I don’t necessarily see this as all being shoehorned into broadcasting, but I get Professor Winseck’s point of the tail wagging the dog. It is perhaps putting too much significance on the broadcasting sector. I have tried to emphasize broadcasting is by no means dead, but it is absolutely in decline. The emphasis should be on the online model.
Will there be challenges to this in the future? Of course there will be. I don’t see any way around that —
The Chair: Thank you, Professor Taylor. I’m the bearer of the bad news, trying to keep track of the clock here.
Senator Klyne: I have a couple of quick questions for Mr. Taylor and Mr. Winseck.
We heard references to the Canadian media economy’s admirable growth. We also heard that distribution is on the decline. Regarding Canadian broadcasting, we heard that rebroadcasting is a sizable percentage of programming that originates outside of Canada. Those could be counterintuitive, but maybe there are three different buckets that are being referred to.
Canadian broadcasters typically reach their CanCon quotas by including domestic sports and news broadcasts. Those are not options available to foreign entities. Also, the current system relies on a few conditions that must be met to be considered Canadian. How does this landscape and the trends change with this legislation and the definition of “Canadian”? And do film and media tax credits influence Netflix, particularly filming here, and if something disrupts that, will they look for other local scenes to shoot?
Mr. Taylor: If I can address the first one, I believe you asked if trends change under this. I don’t see that right now. As far as your point, senator, about the rebroadcasting of American films or television shows, no, I do not see that changing under this. I don’t see any incentive, necessarily. That’s why I emphasized my points of if we are sending things off to the CRTC, I think this is a real area where it’s going to take some reimagination. If we do it right, this could revitalize the sector, because it is in decline because people can get these shows anywhere. It served us well for decades as far as an industrial and economic model. It never added much to Canadian culture whatsoever. So do I see this changing under this bill? My short answer is no.
Mr. Winseck: To my mind, the key thing this bill should be doing with respect to Canadian cultural policy is getting access to money as in investment in Canadian television and film productions here in Canada; distribution — that is, access — through a fair carriage regime to both traditional BDUs and the new online content aggregators and distributors; and rights. We should loosen our ties to trying to specify what is and what isn’t CanCon. I have been an academic now for close to 30 years. I started out when the debates over this concept were acrimonious, and they continue to be acrimonious today, and I see no way out of that. Let’s put that aside and focus on money, distribution and rights.
Netflix basically comes around. Whenever a jurisdiction, whether it is Australia or the European Union or anywhere else, puts in place new rules, Netflix swings into action and they suck it up. This is their thing.
In 2014, they told the CRTC chair to, basically, “bugger off.” Those days are over, and that’s a good thing, in my view.
The Chair: Colleagues, unfortunately, we are out of time, and I have a couple of our colleagues still in the queue. On behalf of the committee, I would like to thank Professor Krishnamurthy, Professor Winseck and Professor Taylor for your participation and insight. We very much appreciate it.
For our second panel, we are pleased to welcome from Union des artistes, Sophie Prégent, President, and Christine Fortin, Deputy Director of Labour Relations. They are both joining us by video conference.
From the Coalition for the Diversity of Cultural Expressions, we have Marie-Julie Desrochers, Executive Director.
From the International Alliance of Theatrical Stage Employees, John Lewis, International Vice-President and Director of Canadian Affairs.
You will each have five minutes for your opening remarks. We will then move into questions and answers. Starting us off will be Sophie Prégent. The floor is yours, Ms. Prégent.
Sophie Prégent, President, Union des artistes: Thank you and good morning. My name is Sophie Prégent, and I have been the President of the Union des artistes, or UDA, since 2013. The UDA is the voice of more than 13,000 artists, ranging from dancers, opera singers and pop singers to actors, hosts, comedians and circus performers. We represent entertainers who work in French in Quebec and elsewhere in Canada, as well as all artists in Canada working in a language other than English. Thank you for inviting me to appear today. Ours is a very important voice. Without artists and creators, there is no culture.
Bill C-11 deals with broadcasting and is hugely important for artists. It is high time that Canada’s broadcasting rules apply to the web giants. Encouraging online broadcasting undertakings to support the creation of original Canadian content is paramount. Another piece of legislation is, however, just as important for artists, the Status of the Artist Act, or SAA.
This federal statute and the fact that it applies to all Canadian and foreign undertakings is imperative. Why? Because it sets out minimum conditions of engagement for the provision of artists’ services. Unfortunately, the proposed amendment to section 31.1 introduced this summer seeks to exempt online undertakings from the SAA. That is totally senseless from our standpoint because it negates the scope of the act. It would mean that any online undertaking that produces or broadcasts programs over the internet could be exempt from the act.
The bill’s definition of an online undertaking is too broad: “an undertaking for the transmission or retransmission of programs over the internet for reception by the public by means of broadcasting receiving apparatus.”
I’ll give you some examples, starting with Canadian broadcasters: the Canadian Broadcasting Corporation, or CBC, TVA and TFO. Those broadcasting undertakings already have CRTC licences and are currently subject to the SAA. The UDA has collective agreements with all three of those undertakings to ensure minimum conditions of engagement for artists.
The addition of subsection 3 to section 6 of the SAA, “does not apply to online undertakings,” exempts Canadian broadcasting undertakings such as CBC, TVA and TFO from the SAA. CBC is a Crown corporation that satisfies the definition in Bill C-11 of an online undertaking; after all, more and more, the public broadcaster produces and broadcasts podcasts and other online works. If, in the near future, CBC were to produce and broadcast those works only online, the artists working there would not be entitled to minimum conditions of engagement and would lose their benefits flowing from the collective agreements we fought so hard for. Closing this loophole is imperative so that Canadian broadcasting undertakings continue to be subject to the SAA.
Now let’s turn to digital platforms, Crave, Amazon, Netflix and so many others. Are those undertakings coming to Canada, or are they already here? They, themselves, produce and broadcast their content on their platforms using the services of Canadian artists. Under the new amendment, those undertakings would not have to ensure minimum conditions of engagement for artists.
If the SAA did not apply to those platforms, every artist association in Quebec and elsewhere would have to try to make the web giants comply with provincial SAA legislation, and that wouldn’t come easily. Inevitably, a lengthy constitutional debate would ensue because the platforms would argue — and rightfully so, for that matter —that they are federal undertakings subject to Bill C-11. In that situation, who would be the biggest loser? The artists we represent, artists who would not be entitled to minimum conditions of engagement on either end.
In conclusion, if the amendment is not withdrawn, it will inevitably have fatal consequences for artists. As we know, the broadcasting of content exclusively online is already happening. Accordingly, the amendment to section 31.1 set out in Bill C-11 must be withdrawn for the sake of artists and their future. Thank you.
The Chair: Thank you very much, Ms. Prégent. We will now hear from Marie-Julie Desrochers.
Marie-Julie Desrochers, Executive Director, Coalition for the Diversity of Cultural Expressions: Mr. Chair, honourable senators, good morning and thank you for giving the Coalition for the Diversity of Cultural Expressions this opportunity to share our views on a piece of legislation that is vital to the future of Canadian cultural sovereignty, Bill C-11.
My name is Marie-Julie Desrochers, and I am the Executive Director of the coalition, which brings together 49 organizations representing more than 360,000 creators and professionals and over 2,900 businesses in the book, film, television, new media, music, performing arts and visual arts sectors across the country, in both the English-language and French-language markets.
For more than two decades, our members have come together to protect and promote the diversity of cultural expressions. We regularly participate in UNESCO meetings in support of the objectives set out in the 2005 Convention on the Protection and Promotion of the Diversity of Cultural Expressions, which Canada was the first to ratify, as I’m sure you know.
At the end of September, as the general secretary for the International Federation of Coalitions for Cultural Diversity, I had the opportunity to take part in MONDIACULT, UNESCO’s world conference on cultural policies and sustainable development. It was the first such gathering in 40 years. At the event, 150 states adopted a final declaration calling for, and I quote:
substantial regulation of the digital sector, notably of the major platforms, for the benefit of online cultural diversity, artists’ intellectual property rights and fair access to content for all.
Yes, all over the world, states are trying to protect and promote the diversity of their cultural expressions in a universe dominated by an oligopoly of companies with unmatched access to consumers and citizens, companies that operate without regard for the cultural policies or regulatory frameworks in place. The steps Canada is taking in the form of Bill C-11 could not be more legitimate.
With a few amendments we wish to propose, this long-awaited and necessary bill will benefit Canadians. It will promote freedom of expression among members of the public and creators, contrary to what some have argued. It will give consumers more choice and better access to a diversity of content, while supporting the independent structure of our industry.
The Broadcasting Act is at the heart of our cultural sovereignty, but as we all know, its effects have been waning over the past 20 years. Canada has been slow to adapt its regulatory framework, supposedly so as not to undermine the innovation of disruptive companies — companies that gradually inserted themselves in our lives and now dominate them. It may not be too late to do something about it, but action must be taken immediately. To modernize legislation whose objectives are still relevant but whose impact is less and less tangible does not mean we are looking backwards or indulging in nostalgia — quite the opposite.
The coalition has four recommendations that are universally supported throughout Canada’s cultural sector, recommendations that would allay some of the fears people have often expressed regarding Bill C-11. First, to bring balance back to our ecosystem, the government must ensure that Bill C-11 is as technology-neutral as possible. That way, all businesses carrying out broadcasting activities, regardless of their business model, would be subject to the bill. The objectives laid out in the bill should be the same for all services. It would then be the CRTC’s responsibility to determine which services and which activities have a significant enough impact on our ecosystem to be regulated. That is laid out in the bill. The CRTC could finally collect evidence and data to help it determine what that regulation should look like.
The CRTC has always taken into account the specific nature and reality of each of the services it regulates. That would not change. In practical terms, we are recommending that foreign online undertakings not be held to a lower standard than Canadian broadcasting undertakings, as set out in proposed paragraph 3(1)(f). This is a well-thought-out consensus-based proposal that would avoid that pitfall, while taking into account the realities of the marketplace.
Similarly, we are recommending that the provisions pertaining to social media remain as they are. They do not apply to users, and the CRTC will not be regulating activities that do not have a significant impact. Nevertheless, limiting the scope of the bill poses a number of risks, especially when it comes to access to data and fairness across the ecosystem.
Our next recommendations concern the CRTC, which tends to draw criticism from all sides. Ensuring that Canadians continue to have confidence in the CRTC is essential, and we believe the return of two key mechanisms would help tremendously.
The first thing that must be preserved is the ability to hold public hearings during regulatory processes that have an impact on the funding and marketing of Canadian content. The second thing that must be preserved is the ability to appeal to the Governor-in-Council, which makes it possible to challenge decisions relating to those same elements; the party challenging the decision would have to show that it contravened the objectives of the act.
Given the magnitude of the task before the CRTC in the years to come, it is more essential than ever to preserve an appropriate forum for consideration and debate before decisions are made, as well as a mechanism to challenge those decisions when necessary. I would be happy to answer any questions you have. Thank you.
The Chair: Thank you very much.
Mr. Lewis, you have the floor.
John Lewis, International Vice-President and Director of Canadian Affairs, International Alliance of Theatrical Stage Employees: Thank you for the opportunity to appear. I’m here on behalf of the IATSE, which is the largest union in the entertainment industry representing 34,000 workers in Canada.
We support the federal government’s efforts to modernize the Broadcasting Act through Bill C-11. To the extent that Bill C-11 aims to create a flexible framework that will enable the CRTC to recognize the different ways that individual online services contribute, tailor conditions of service applied to online undertakings and modernize the definition of Canadian content, we believe that is the right approach. Flexibility is needed in an industry that is constantly changing as new delivery platforms are being introduced.
The industry is growing, but we are in competition with production centres around the world. We need to ensure Canada remains a viable destination for investment, supporting all Canadian creative workers who are increasingly becoming leaders in technological innovation and creative excellence.
There is much to support in Bill C-11. We agree that all players in the industry, including foreign streamers, should contribute to the domestic industry. In our view, a vibrant film industry requires both a strong foreign sector and a strong domestic sector.
We do get concerned when we hear that Bill C-11 must level the playing field and address free riders by ensuring that foreign studios and streamers contribute fairly to domestic producers. The fact is international streaming companies and major studios already do support the Canadian industry. Global studios are now the second-largest source of financing for Canadian-owned content production, with foreign presales and advances accounting for 15% of total financing. By comparison, the Canada Media Fund accounts for 9%, and Telefilm for 2%.
Financing isn’t the only contribution these entities bring to Canada. Minister Rodriguez referenced creating good middle-class jobs as an objective of Bill C-11. Global studios are now the largest employers of Canadians working in film production. This employment boom on big-budget global productions has also meant that Canadians will be able to stay in Canada, learn and work with the latest technology and that Canada’s highly skilled crews are now recognized as world-class film technicians.
While we support global entities contributing meaningfully to Canadian products and stories, to subject them to the same CanCon broadcast standards as domestic entities is unreasonable. Canadian broadcasters typically reach their CanCon quotas by including domestic sports and news broadcasts. That option is not available to foreign entities. Further, Disney+, for example, shows only Disney productions. It’s simply not possible for them to meet this bar within their business model under the current definition of Canadian content. Flexibility again has to be a guiding principle.
That brings us to our next concern, which is Canadian content. We wholeheartedly support the telling of Canadian stories, but that shouldn’t be confused with CanCon. The current system wrongly relies on a few conditions that must first be met, such as IP — or intellectual property — ownership, and then adds a 10-point ranking system in which films must score at least 6 to be considered “Canadian.”
You’ve all heard about the issues in relation to the “The Handmaid’s Tale,” but the problem becomes clearer when looking at “Jusqu’au déclin.” This was Netflix’s first original feature film in Canada. It’s a Canadian storyline, created by Canadians and was filmed in Canada with Canadian crews. It’s also a French-language story written by French Canadians and featuring Québécois actors. Netflix dubbed it into 31 different languages, and it has been watched by audiences around the world, with 95% of viewers located outside of Canada. It’s a huge success story in promoting Canada to the world. Like “The Handmaid’s Tale,” it doesn’t qualify as Canadian. The only thing not Canadian about this production is that Netflix funded it.
We need a fair system to determine which productions should be considered Canadian and to do that, two changes should be made.
First, the four conditions that are currently mandatory, such as IP ownership, should be considered but not determinative. You cannot find any country — although I was here for the previous panel and I am a little nervous when I say we couldn’t find any country, because it sounds like there’s a lot going on around the world — that uses IP ownership as a mandatory factor in determining the nationality of a production.
Next is the 10-point system. A Canadian director or screenwriter will get you two points each. The costume designer? Zero points. Head of makeup or hair? Also zero. These are creative positions that are recognized with awards such as Oscars, Emmys, BAFTAs and the Canadian Screen Awards, but Canadians working in these creative positions — and more — don’t count.
The U.K. uses a much more expansive 35-point cultural test, and the Netherlands uses a 200-point system. These countries and many others demonstrate that a stronger, fairer system is possible.
Our members work on both domestic and foreign service productions, and we want to ensure a balance is struck whereby both sectors can succeed. We are confident that’s the intention behind the bill, and the IATSE fully supports its passage, but we must ensure we have a system that best serves and promotes Canada, all its creative workers and its stories.
The Chair: Thank you, Mr. Lewis.
The Chair: I’d like to go first. My question is for the Union des artistes representatives. You expressed your support for Bill C-11, saying it was important to
encourage online broadcasting undertakings to support the creation of Canadian content while ensuring the protection of French and recognizing its special status as a minority language in North America.
You also said that it was up to the CRTC to introduce a regulatory framework for the promotion and discoverability of content. I have three questions for you. First, were you concerned that this new authority would go to the CRTC, given what some witnesses have described as an internal secret process that tends not to be transparent? Second, how long does it take the CRTC to go through the regulatory process? Third, how much time should the CRTC have to make regulations?
Ms. Prégent: I’ll start with the first part of your question. In terms of the CRTC and its credibility, the focus is largely on digital media because there is nothing in place right now.
Given that fact and given that conventional television broadcasters are already subject to quotas and oversight, we used that as our basis because we felt it could easily transfer to digital media. Why not? Some sort of regulation or oversight could be put in place.
I’m not claiming that the CRTC is perfect, but we took into account the fact that there was nothing out there — in fact, the digital space is referred to as the Wild West. We felt it was important to put something in place, so why not apply the requirements for conventional television broadcasters to the digital space and, then, see what happens in the short or long term?
In our view, it was necessary to start somewhere and to put a foundation in place and work from there, so we thought the CRTC might be the way to go.
I’ll turn the floor over to Ms. Fortin now.
Ms. Fortin: I’m going to ask Ms. Desrochers to comment, because that is more her area.
Ms. Desrochers: We have heard witnesses say previously that they were fans of the CRTC. You can be a fan of the CRTC and appreciate the demographic tool that informs broadcasting policy regulations, and still criticize the CRTC from time to time. That’s certainly true for the cultural sector.
You make an excellent point about transparency. In fact, an amendment to the bill was made to encourage the CRTC to be proactive and transparent in communicating with the public. That’s something new in Bill C-11, and it’s worth pointing out.
Nevertheless, as we mentioned in our brief and in our opening remarks, there is a way to address the lack of transparency the CRTC is sometimes criticized for. That is why it’s essential to keep public hearings, which would make it possible for the public, stakeholder groups and Canadians who have a keen interest in those matters, as we see, to participate in every public process that is launched to regulate new services.
Senator Miville-Dechêne: I want to thank all the witnesses, especially the Union des artistes, for making their positions so clear. I won’t ask you about them because you were very clear on where you stood. My question has to do with user-generated content.
You said you represent creators. One of the creators we heard from was a French-speaking YouTuber, Fred Bastien. He’s a proud francophone who makes his living on YouTube, and he’s very concerned about the possible standards for Canadian content and algorithm changes. Do you also represent YouTubers like Fred Bastien?
Clearly, we are hearing two different messages when it comes to Bill C-11 and its risks.
Ms. Prégent: It’s true that there’s a wide variety of content on YouTube, with people exploring all kinds of things. The last thing we want to do is prevent the creation of that content. It’s funny you bring him up because Fred Bastien is actually on the UDA’s board of directors.
No, senator, we don’t represent YouTubers as a group. We’d like to. As I mentioned in my opening remarks, the UDA’s membership encompasses actors, hosts, singers, dancers and everything in between, but not YouTubers. I would like us to represent them one day. Moving in that direction seems like an obvious necessity to me. I’m not saying that that proliferation of artistic and creative content should stop, quite the contrary. I don’t think Bill C-11 targets that underlying diversity. I would say it targets the big players, the giants in the space that are....
Senator Miville-Dechêne: I don’t have much time, Ms. Prégent, so I’m going to stop you there.
If the bill targets only the big players, why aren’t the UDA and the Coalition for the Diversity of Cultural Expressions in favour of eliminating new section 4.2.2? That is, after all, the provision in dispute because it could impact small YouTubers.
Ms. Desrochers: I’ll answer that in broad terms, senator.
Let me begin by saying that I listened carefully to Fred Bastien’s remarks when he appeared before the committee. He said something else worth noting: he, too, would like to see the platforms contribute financially and would appreciate benefiting from that contribution. He is someone who fears that the discoverability provisions, provisions that have not yet been defined and do not currently exist — so hypothetical discoverability provisions — could hurt him because that’s what the platforms told him would happen.
We are talking about a scenario that is entirely hypothetical. Obviously, I can’t blame him for being afraid of losing his audience, but there is absolutely no evidence of that. Once the CRTC has the facts and information and once YouTube has demonstrated how it works, it will be up to the CRTC to find measures that are favourable to those being regulated.
All of this is still entirely hypothetical, because the minister, Mr. Rodriguez, said that those who do not wish to be subject to the discoverability provisions would be excluded by order-in-council.
Something else I would point out is that the bill, as it currently stands, stipulates that the CRTC must avoid imposing obligations that do not contribute in a material manner to the implementation of the broadcasting policy. Therefore, all of this will have to be determined on the basis of facts. That’s the first problem we have with the platforms: right now, we don’t have any available data on the impact they are having on the system.
For that reason, I was very glad to hear Mr. Bastien talk about the percentage of people who watch his channel from Europe, but that data applies to him individually. Not until we have aggregate data on the impact of those services, on the role of those individual players, will it be possible to make informed decisions. In the meantime, we need a bill that covers everything; otherwise we won’t have that data.
Senator Miville-Dechêne: Thank you very much. I think I’m out of time.
Senator Simons: Thank you. My question is for John Lewis of IATSE.
There’s a lot of denigrating language used to talk about service productions. Could you give us a sense of what the scale of internationally funded production in Canada has meant for your members? How many good middle-class jobs are there? Professor Winseck talked about the growth in the sector economically, but what does that mean on the ground for your members?
Mr. Lewis: We’ve been in a position with COVID — unlike live performance and theatre, which is still struggling to come back — where motion picture and television production came back very quickly and at great expense in terms of testing protocols and everything else.
It does more than just employ our members. We can’t find crew right now, it is so busy. That’s a problem, and we’re addressing those issues.
It also creates infrastructure that helps the entire industry. It creates sound stages. It allows equipment suppliers like William F. White — and looking at the sound stages going up in Alberta right now and in British Columbia, Montreal, Toronto and elsewhere. It helps build the infrastructure that helps the entire industry.
The most recent numbers I’ve seen is that foreign service is almost $5.27 billion and domestic is $2.7 billion. That shows you the size and the growth.
But, in my case, it also means work for technicians. It’s rare now to see American technicians come up on productions. It happens from time to time, because, over time, we’ve worked with the best, quite frankly, and we’ve been able to increase the knowledge of our local crews; 97% or 98% of the crew are Canadian on these big productions, and then they can use those skill sets when working with domestic producers. So it’s just a bonus.
It’s not like the foreign service sector is taking away; it’s not like there’s a limited amount of funding and that if money is geared toward foreign service it somehow takes away from or is detrimental to domestic producers. That’s not the case.
There were some questions earlier about tax credits. The definitions we are talking about are really in terms of broadcast policy but not tax credit policy, because I don’t think there is any attempt to change that policy and get more funding.
Tax credit does make a difference. Bill C-11 will make a difference. Again, we need to be careful to distinguish between broadcast versus content production. That also goes toward the Status of the Artist and those kinds of provisions.
There are two different business models. One is a distribution model, and one is a content production model. Both are equally important.
If we don’t get this right, there are places to go. It is a global competitive marketplace, and we have to be careful that there are not unintended consequences in terms of the production decisions that get made.
Senator Simons: Let’s stick with the unintended consequences question. I was speaking a couple of months ago with Val Creighton from the Canada Media Fund, who raised this concern. It was the first time it had been flagged for me that there literally aren’t enough people to make all the films and television shows that are being shot in Canada right now. We don’t have enough of your members. We don’t have enough directors. That’s how great the demand is.
Mr. Lewis: That goes for accountants, too. My son is an accountant working in the industry in Vancouver. He mainly works in Toronto and Montreal right now because we have a lack of accountants in the industry. Go figure.
Senator Simons: I guess the question becomes: At what point does it get more difficult for smaller-budget Canadian productions to compete if the big American streaming services are snapping up all of your members?
Mr. Lewis: There is always that issue. In Quebec, we just merged with AQTIS, which was a Quebec-based technicians’ union. One of the great things is that there is a larger pool of technicians now available to work both on the larger foreign-sector work but also the domestic work.
There will always be room for working on domestic. We have younger technicians, and then there are personal relationships. People have grown up with certain producers and will always go back to that producer even though it means less money. But the difference isn’t sizable in terms of our collective agreements, distinguishing between domestic and foreign service. We have been able to deal with it, but it is an issue across the board, and we are working mightily to make sure we can address some of those gaps in crewing.
Senator Simons: My daughter has a number of friends who work full time making Hallmark Christmas movies.
Mr. Lewis: We don’t have enough of those, I agree.
Senator Simons: They were all English majors together, and now they’re working as IATSE technicians on films. This is a side note, but do we have enough training programs in this country?
Mr. Lewis: No, and the industry funds all of it. The provinces have been generous in terms of tax credits to lure production, but there has been very little in terms of training.
We have training funds through collective agreements. In Quebec, they have the 1% training tax that goes on collective agreements and that is helpful, but predominantly, the training takes place privately with the unions working in collaboration with our employers.
Senator Simons: On the job.
Mr. Lewis: On the job. We have training facilities now as well.
Senator Simons: Thank you very much.
Senator Klyne: I have a couple of questions for Mr. Lewis regarding the comment that the four conditions that are currently mandatory should be considered but not determinative of the nationality of a film production. With that, you say that suggests discretion versus a clearly defined process. For some, discretion is the bogeyman, in the wrong hands. I would like you to comment on that.
If we need a definition of what is clearly Canadian content, how do we work with discretion? Maybe we have to come up with a Canadian solution, which is not a bad thing, because we normally do come up with good ones, but that sets a precedent globally to define “nationality.”
Mr. Lewis: It was identified by earlier witnesses. These questions are being addressed globally in many different countries. I’m not a cheerleader for the CRTC, but the CRTC process does allow input from all industry stakeholders. I don’t know if it is discretion, but it is just another factor to be included. You either check the box or don’t check the box, and it becomes a factor in making that determination, just as shooting in Canada should be a factor. It’s not right now. The whole crew being Canadian should be a factor and it isn’t right now, only very specific positions. All of those should be factors.
It is an evolving process. To me, it is one that really cries out for the CRTC to have input from the industry and not have a hard, fixed determination in a statute that will be very difficult to change down the road.
Senator Klyne: In your opening remarks, you gave a great example around a couple of films, and, particularly, it sticks with me on Netflix, which, under the proposed definition of “Canadian,” that wouldn’t fit, which seems wrong if you take “The Handmaid’s Tale,” for instance, and think about all the Canadian content below the belt and above the belt, jobs that are created and shot locally. How would that discretion come into play there?
Mr. Lewis: Again, I don’t think it would be discretion. It would be one other factor. As a comparison, the Hallmark Christmas shows that are designed to be “Anywhere, United States,” they are all Canadian. There is nothing Canadian about them in terms of their storylines.
Senator Klyne: My second question is around the observations of the 10-point ranking system. I reference or reflect on this when we had a thriving and revered sound stage and film tax credit program in Saskatchewan.
Mr. Lewis: Hopefully it’s coming back soon.
Senator Klyne: When that left, so did the revered below-the-belt jobs and the impact to the economy. It went to B.C. and Toronto, largely speaking.
Mr. Lewis: Alberta and Manitoba as well.
Senator Klyne: I don’t know if Alberta still has the tax credit.
Mr. Lewis: A very generous one, yes.
Senator Klyne: So we are leaking off a lot of talent plus economic impact. In that regard, to have a thriving and sought-after production and distribution, we need to have a thriving film industry. We need to recognize and give credit to below-the-belt jobs and not just above-the-belt and the creative people that go into that. You referenced the accountants, but there are also the makeup artists, costume designers and the people who actually look after getting the cars for shooting scenes that get all demolished and have to be put together three or four times to make more scenes. It’s a significant impact. They are all local jobs primarily, and we are not going to give credit to those in this definition.
Mr. Lewis: To be fair, those definitions were established decades ago, and it needs to change. My members have probably won more Oscars in Canada than any other organization, but those people are not considered content creators for the purposes of determining Canadian content. That is not right, and that needs to be changed.
The industry talks about Canadian stories, and it is important, but to harken back to an earlier witness, it is a little bit of a mug’s game. It is really about a financing model. Everyone uses “Canadian content” because you can get very passionate about it, but really, we are talking about financing models. That’s really what this is about.
Senator Klyne: Thank you.
Senator Gagné: My question is for the Coalition for the Diversity of Cultural Expressions and the UDA representatives. We’ve heard little from French-speaking artists in the music industry about Bill C-11. Are you able to speak to that? Why do you think that is? What do you say to those who fear the regulations will have a negative impact on Canadian creators?
Ms. Desrochers: I don’t want to contradict you, but I would say that the voice of Canada’s French-speaking creators is being heard thanks to the associations that represent them. It is true, however, that no artist has appeared before the Senate committee as an individual, at least not that I’m aware of. That may be due to a number of reasons, the first of which is that artists need these platforms, so they’re afraid of what would happen if they were to voice their position.
Second, these are very complicated issues, and people aren’t necessarily comfortable participating in a technical process like this one. That’s what we’re here for. That’s the job of the Coalition for the Diversity of Cultural Expressions and other such associations. The committee has heard from the Association québécoise de l’industrie du disque, du spectacle et de la vidéo, the Association des professionnels de l’édition musicale and, today, the UDA. They have all appeared on behalf of artists to express positions that were arrived at democratically and that represent the collective voice of their members, in other words, the majority of artists. When someone appears as an individual, they are speaking only on their behalf, not for their sector as a whole.
What we bring is the collective view. I can talk about referencing and site visibility. It’s understandable that people would have fears around that. The idea that Bill C-11 could hurt the discoverability or promotion of Canadian artists is predicated on two falsehoods.
The first falsehood is based on the assumption that regulations will be made in a certain way. Before they can be made, the CRTC must understand how services work and what mechanisms will be available to artists. The second falsehood is unfortunately based on the assumption that Canadians will not like the Canadian content presented to them. What I can tell you is that the platforms know a lot about us; they have a huge amount of information on us. However, they may not be familiar enough with our content to present the wealth and extensive diversity of Canadian-made content in all languages to Canadians who would enjoy it. We need to have more confidence in ourselves than that. We need to believe that, if we do things right, Canadians will like the content we provide and that our content will simply gain more visibility.
Ms. Prégent: I have a few things to add. I am pretty much in agreement with Ms. Desrochers. It is true that the cultural sector is special; it has its own biodiversity and its own way of operating. That said, if you would like to have more details on the subject and it would be helpful for your study, we could send you a document on music only. That would be no problem.
Senator Gagné: That would certainly be helpful. Thank you.
Ms. Desrochers: Great.
Ms. Prégent: We will endeavour to get you that document quickly.
Senator Gagné: I would like to go back to Ms. Desrochers. You mentioned the fact that Canada is a signatory to the UNESCO Convention on the Protection and Promotion of the Diversity of Cultural Expressions and that you are participating in related discussions.
You also explained how Canada can meet its obligations set out by the convention in the digital age and how Bill C-11 sets out the criteria to do so. Would you like to tell us more?
Please explain why it is necessary to protect the local production ecosystem.
Ms. Desrochers: That is an excellent question, because we sometimes hear in discussions a distinction being made between protecting our culture and protecting our entrepreneurial ecosystem. To my mind, those two things go hand in hand because they constitute a foundation for diversity of cultural expressions. Having an independent local ecosystem allows our local artists to have many doors on which they can knock in order to get help in developing their careers.
If we take music, for example, the major labels are responsible for most of the music produced everywhere in the world. In Quebec, however, 95% of the music produced is the work of independent labels. That allows our artists, who wouldn’t necessarily be able to have a viable career in the eyes of the major labels, to build up their career in a smaller market. By supporting an independent local business ecosystem, we are protecting a huge diversity of voices and are allowing Canadians to recognize themselves in very diverse content.
Senator Gagné: Thank you.
Senator Clement: Thank you to all our witnesses. I would like to congratulate Ms. Desrochers for stating that we should be confident that Canadians will like a Canadian product. We should even presume that this is real.
I have two questions. The first is for Ms. Prégent and it concerns the amendment seeking to limit the scope of the federal Status of the Artist Act or even nullify it. I’m trying to understand why the government would propose such an amendment. We know that stakeholders have expressed their surprise, and I myself was astonished. Could you explain why? That would help me to understand this discussion better.
Ms. Desrochers, you spoke of the CRTC and the fact that it will play a bigger role by virtue of this bill. However, you indicated that there is a lack of trust towards the CRTC. You spoke of increased transparency, but how can we do more given the general lack of confidence or diminished confidence in our federal institutions? What more should the CRTC be doing? I would ask Ms. Prégent to go first.
Ms. Prégent: Thank you.
You should know that we asked politicians this very question because you are right, this amendment came out of nowhere in the middle of the summer, in June or July, something like that. We hadn’t seen any such amendment up until now, whether during the Yale commission, or in Bill C-10 or Bill C-11. It popped up out of the blue, and we don’t really understand why. When we ask the politicians, we are told that there was a jurisdictional issue due to the existence of provincial, territorial and national laws. According to the politicians, the bill was encroaching on Quebec’s Act Respecting the Professional Status of Artists. That is why everything was changed suddenly and they said they would not enforce the federal Status of the Artist Act and respect Quebec’s jurisdiction in this area. I will now ask Ms. Fortin to take over because this is in fact untrue: we believe that it is an erroneous, simplistic and reductive interpretation.
Ms. Fortin: This amendment took all stakeholders by surprise and was cooked up one night by a Liberal MP. No one was consulted. That was the first surprise. Public servants working for the minister have said that it is a question of jurisdiction under the Constitution, because Netflix and all the other online undertakings are subject to provincial status of the artist laws anyway. We don’t think this is the case, because if Bill C-11 purports to regulate online undertakings, that means that those online undertakings come under federal jurisdiction, including all labour laws, and not only those which apply to artists, but also to employees. There is something wrong here if the bill only excludes the federal Status of the Artist Act, but not the federal Canada Labour Code. It’s not clear.
They are telling us that if Netflix has a production in mind, artists in Quebec can negotiate with Netflix under Quebec law, which is false. There will be a constitutional debate before the Administrative Labour Tribunal and Netflix will claim, and probably rightly so, that it is under federal jurisdiction, because it is a foreign business, is streaming everywhere in Canada, is subject to Bill C-11, has a CRTC license, etc. Netflix will probably win that case. We, the artists, will find ourselves without minimum conditions of engagement, whether provided for by Quebec or federal legislation, which is nonsensical.
Senator Clement: I put a question to Ms. Desrochers earlier.
Ms. Desrochers: As for the CRTC, I would say that the first answer is probably not quite in the bill, but obviously, we have to give the CRTC more resources by giving it a new mandate. The government has announced its intention to do so. In order for Canadians to regain confidence in their democratic institutions, and this could be seen as a worldwide issue at the moment, we certainly need to see transparency, information being shared and decisions that are based on facts; that is incredibly important. With more resources, the CRTC will be able to produce studies and undertake research like Ofcom and AFCOM, the Agence française de communication. At least I hope so.
Obviously, by regulating new services, we will better understand our ecosystem and to that end, Bill C-11 will finally allow us to get the necessary data. Afterwards, we are looking to bring back public hearings when orders are made. Bill-11 does include a public hearing process which is basically meaningless, because it is only for licenses. We can see that people are interested in these issues. We have to allow interest groups and Canadians that want to have their say on the subject to do so before the CRTC.
Public hearings allow various points of view to be expressed as part of a dialogue. As Professor Winseck stated earlier: democracy is slow. I think it is important to render informed decisions in order to maintain citizens’ confidence.
Finally, the Governor in Council appeal process will allow us to appeal an order in clearly defined circumstances when we believe that a decision goes against the spirit of an act. This is a very important process because it is a last line of defence. If we believe that the CRTC made a wrong decision, we can request that the government direct the CRTC to review its decision, rather than ask the government to do so. Rather than having the government decide what will happen, the government directs the CRTC to review its decision and render a new one.
We don’t understand why this process is absent from the current bill, because many representatives from the cultural sector have asked for it recently after an unfortunate decision involving Radio-Canada. The process worked and the CRTC will have to review its decision. I think this speaks eloquently to the need to bring the process back with the current bill.
Senator Clement: Thank you.
Senator Dasko: My question is for Mr. Lewis. Senator Klyne did ask part of the question that I was going to ask with respect to what you said about CanCon.
A lot of witnesses have talked about the definition of CanCon and how it is faulty and needs to be changed in whichever way, with different points of view about how that would be done and what that might look like in the end.
I wanted to focus on what you said about intellectual property and how that is dealt with and should be dealt with in CanCon, in your opinion.
To backtrack a bit, you are arguing that more activities in the industry should be considered as part of CanCon. With respect to IP, how would you propose it should be dealt with in CanCon?
Second, how would you propose that Bill C-11 be changed to deal with any of this?
Mr. Lewis: First of all, I think it is a very restrictive, elitist and exclusionary list that currently exists in terms of what professions and categories get factored in. To me, IP should be just like any other factor in terms of it is a factor but not a determining factor. Maybe you give it more weight. Maybe it is worth more than a director of photography. My members might disagree with that, but there should be some weight to it, and maybe it is a higher weight, but not so that if you don’t have it, everything gets thrown out the door. Let the industry work with the CRTC. The industry is comfortable with that process. That’s where it should be dealt with as opposed to trying to enshrine something in legislation.
I keep saying the industry is changing. We have been talking about SVOD, or subscription-based video on demand. I negotiate these agreements across North America, and they are complicated. Now we are going to have to introduce a new complication with ad-based video on demand, which is coming. Six years ago we were told that will never happen; the model for that is untenable. Well, it is here and it is coming.
The budgets are astonishing. It used to be that a big budget was $3 or $4 million per episode. “Star Trek” is doing a couple of series in Toronto, and they’re about $10 million per episode. The studios never give us the hard numbers because we need them. Then you have the new “The Lord of the Rings” show. It is $54 million an episode. That one series is probably bigger than a lot of provincial marketplaces, and it’s one show. Those are the kinds of numbers that are being invested.
Senator Dasko: Thank you. The importance of this industry to my city is huge. Films are made on every street corner of Toronto. We are blessed to have all of these jobs in Toronto.
You may have heard Professor Winseck’s earlier testimony. He spoke about partial IP and how that should be considered a factor. Do you have any thoughts about how that might look? I don’t know if you heard his testimony.
Mr. Lewis: I did. I gave him my card because I thought a lot of his evidence was compelling.
Do you sell complete worldwide geographic distribution rights or only partial, and is there a time limit attached to it? Should the CRTC have a role in terms of trade? It sort of backed out of that in terms of traditional broadcasters dealing with independent producers. I don’t know how you impose it on foreign streamers if you are not imposing the terms of trade model or enforceability by the CRTC in terms of dealing with traditional broadcasters.
I think all of that should be taken into consideration. We should take a look at that, and maybe the format or structure of the IP should be looked at as well. Maybe it is not an easy answer as to whether IP is held here or not here.
Senator Dasko: Right. This is not a bimodal distribution form of financing. There are a lot of different forms of financing. I think that is the point.
Do you think the CRTC should be dealing with this, essentially?
Mr. Lewis: Yes, I do. It is the body that is in place.
Senator Dasko: Should we not try to put anything in the legislation, in your view?
Mr. Lewis: I agree with that.
The Chair: If there are no questions, I will thank our panellists for their participation.
Colleagues, we will continue our study in the days and weeks ahead. Thank you.
(The committee adjourned.)