THE STANDING SENATE COMMITTEE ON TRANSPORT AND COMMUNICATIONS
EVIDENCE
OTTAWA, Wednesday, October 19, 2022
The Standing Senate Committee on Transport and Communications met with videoconference this day at 6:46 p.m. [ET] to study the subject matter of Bill C-11, An Act to amend the Broadcasting Act and to make related and consequential amendments to other Acts.
Senator Leo Housakos (Chair) in the chair.
[English]
The Chair: My name is Senator Leo Housakos, and I am representing the province of Quebec. I’d like senators to introduce themselves.
Senator Simons: Senator Paula Simons, Alberta, Treaty 6 territory.
[Translation]
Senator Miville-Dechêne: Julie Miville-Dechêne, Quebec.
[English]
Senator Busson: Bev Busson from British Columbia.
Senator Klyne: Marty Klyne, senator from Saskatchewan, Treaty 4 territory.
[Translation]
Senator Gagné: Raymonde Gagné, Manitoba.
[English]
Senator Tannas: Scott Tannas, Alberta.
Senator Quinn: Jim Quinn, New Brunswick.
Senator Manning: Fabian Manning, Newfoundland and Labrador.
[Translation]
Senator Clement: Bernadette Clement, Ontario.
[English]
Senator Dasko: Donna Dasko, senator from Ontario.
Senator Wallin: Pamela Wallin from the province of Saskatchewan.
The Chair: Thank you, colleagues. We are meeting to continue our examination of the subject matter of Bill C-11, An Act to amend the Broadcasting Act and to make related and consequential amendments to other acts.
Joining us for the first panel this evening, I am pleased to welcome, from the Macdonald-Laurier Institute, Peter Menzies, Senior Fellow, who is with us by video conference, and Communications Médias Inc., Mr. Robert Armstrong, President, who is also with us via video conference. Both of our guests will have five minutes for their presentations, to be followed by questions and answers with senators.
Mr. Menzies, you have the floor.
Peter Menzies, Senior Fellow, Macdonald-Laurier Institute: The development of the internet has caused a good deal of disruption to a number of enterprises, while at the same time allowing for a great many others to flourish. That is the story of progress. That is the story of change.
This isn’t the first time it has happened, and it won’t be the last. In the case of Canada’s film and television production industry, it has created an unprecedented period of prosperity — roughly 80% growth in a decade. Not only that, but tens of thousands of Canadians can now make a living via YouTube and other online platforms that give them unfettered access to global audiences.
Bill C-11 puts that prosperity at risk. At a time when Canada needs forward-looking legislation that will equip it to succeed in the 21st century, Bill C-11 looks backwards to something called the Broadcasting Act managed by something called the Canadian Radio-Television Commission.
At a time when Canada needs to inspire innovation and adaptation to have its creative and other industries flourish, Bill C-11 seeks to stuff the infinite opportunities of the internet into an act designed for a world of limited resources and scarce opportunity.
In doing so, it is creating uncertainty, and uncertainty depresses investment, and less investment means fewer jobs and opportunities for Canadians. Bill C-11 seems to be inspired by a desire to assist those whose business models are having difficulty adjusting to the internet age. That’s an understandable desire, but to the extent this overly broad legislation will assist those groups, it will do so at the expense of those who have adapted and succeeded.
As time is brief, I will focus on three points. The first is that I urge you to amend Bill C-11 to make it absolutely clear that under no circumstances will the CRTC have jurisdiction over user-generated content, neither directly nor through platforms that depend upon it. I can’t say I have been able to read every submission but, as near as I can tell, only the Quebec music industry strongly favours it. If the government wishes to provide additional support to francophone music producers, it needs to look for less invasive ways to do it.
I think it would do the majority of creators and citizens in Canada a favour by rejecting this bill and asking the government to work on a 21st-century approach to communications. But with respect, I don’t think the Senate is going to do that. What you could do, though — and this is my second point — is further amend this bill to ensure it only applies to streaming companies with annual Canadian revenue of $150 million or more. Not only will this simplify the original intention of the legislation to get money from web giants, it will minimize the volume of lengthy CRTC processes involved, lessen uncertainty, reduce risk of stalled or stranded investment and allow for a speedier flow of money to those to whom the government wishes money to flow.
Significantly, it will allow those creators whose goal is to operate freely in a market-based entrepreneurial environment to continue their success and innovation. In other words, if the government wants money from web giants, just go get money from web giants. If it wants to protect certain groups from change, go ahead and try, but not at the expense of those who are thriving through innovation and adaptation.
Narrowing scope will also limit interference with Canadians’ freedom to choose what they watch and listen to through unnecessary discoverability provisions to within the walls of major streaming apps.
Last, pay no heed to those who admit that issues before you exist but are best settled by the CRTC. They are not. Contentious matters will bog down in years of regulatory haggling, court actions and cabinet appeals.
Most recently, as we have seen, cabinet ordered the CRTC to review its licensing decision for CBC. Just to give some context, the last time the CRTC renewed CBC’s licence was 2013. Since 2018, the licence was repeatedly renewed administratively until a hearing was held in January 2021. It took the CRTC 18 months to post a decision, and 16 groups then appealed that decision to cabinet. So now the CBC is unlikely to get certainty on its conditions of licence until 2023, 10 years after it was last licensed — 10 years — and that is for a CBC licence which, compared with what Bill C-11 puts before the CRTC, is a walk in the park.
There are also issues regarding the inherent advantages enjoyed by those experienced in navigating the regulatory system and who speak the language of the CRTC over those who will be regulatory rookies.
I urge you to act now and, for the sake of all involved, to narrow the scope of this legislation before it’s too late. Thank you for the opportunity.
The Chair: Thank you, Mr. Menzies. Now we turn the floor over to Mr. Armstrong.
[Translation]
Robert Armstrong, President, Communications Médias Inc.: Good evening, Mr. Chair and members of the committee. Thank you for inviting me to appear.
I’m a broadcast consultant to francophone audiovisual content creator associations. My presentation today is personal and doesn’t necessarily represent the views of the organizations I advise.
Bill C-11 is primarily intended to integrate the web giants into the Canadian broadcasting system to ensure that they contribute to Canadian culture, and to meet the needs and interests of the multiethnic and multicultural communities the broadcasting system serves. It provides a major and necessary revision that has the potential to improve the volume and quality of programming available to Canadians. At the same time, it seeks to respect internet users’ freedom of expression. In principle, it will not apply to social media, although the CRTC may use its discretion in certain exceptional cases.
Notwithstanding its importance, Bill C-11 creates a double standard by treating Canadian and foreign businesses differently. I therefore support it with a few minor amendments.
Unlike the current legislation, which stipulates the following:
(f) Each broadcasting undertaking shall make maximum use, and in no case less than predominant use, of Canadian creative and other resources in the creation and presentation of programming . . .
— Bill C-11 proposes separate targets for domestic and foreign businesses.
However, subsection 3(1)(f) of the current legislation already provides a loophole for foreign undertakings, where appropriate, by conceding that the use of creative and other resources may turn out to be “impracticable” due to “the nature of the service.” In such cases, broadcasting undertakings will be required to use such resources to the maximum extent practicable. I therefore recommend either adopting the wording proposed by the Coalition for the Diversity of Cultural Expressions or striking out section 3(1)(f) from the bill and retaining the wording in the current legislation.
Bill C-11’s dual approach extends to the regulatory framework seeking to govern traditional and online businesses, especially those based in the United States. Bill C-11 would give new powers to the CRTC to regulate them by order, with the powers being primarily aimed at large online businesses. However, such orders would not require public hearings, whereas the granting, revocation or suspension of any licence held by an existing Canadian company would be subject to subsection 18(1) of the bill. This unequal treatment between orders and licenses may shield online businesses from public scrutiny, and this should be rectified.
This same duality also applies with respect to appealing CRTC decisions with the cabinet. While the current legislation allows members of the public to request that cabinet refer a decision back to the CRTC for review, Bill C-11 does not allow for the referral of an order. Once again, foreign-dominated online companies would gain a privilege that would not be available to licensed Canadian companies. The Senate should correct subsection 28(1) of the bill by making it apply to any CRTC decision.
Also, as a related amendment, Bill C-11 proposes making an addition to section 6 of the Status of the Artist Act so that it does not apply to online businesses. Online businesses, especially the Canadian-based tech giants, should not be exempt from negotiating with our creators, while the Canada Labour Code and the federal Status of the Artist Act would continue to apply to license Canadian businesses. The Senate should reject this addition.
Finally, the current legislation already allows the government to give directions of general application to the CRTC related to the legislation’s objectives and regulating the Canadian broadcasting system. Through Bill C-11, the government appears to want to almost completely take control of system regulation at the expense of the CRTC’s independence. It shows in the amendments to subsections 7(1) and 10(12) and section 34.995 of the Broadcasting Act regarding directions that cabinet may give to the CRTC.
These subsections reduce the CRTC’s autonomy in favour of directions from the federal cabinet, which is a very political move. The Senate should eliminate these three subsections.
To sum up, I am proposing the following changes, and they are very straightforward: Strike out section 3(1)(f) of Bill C-11 and retain the wording of the current legislation; add subsection 9.1(1) to the wording of subsection 18(1) of Bill C-11 to ensure that both orders and licences are subject to public hearings by the CRTC; in subsection 28(1) of Bill C-11, replace “a decision under section 9 to issue, amend or renew a license” with “any decision”; strike out the addition to section 6 of the Status of the Artist Act proposed in Bill C-11; strike out subsections 7(1) and 10(1.2) and section 34.995 of Bill C-11 and retain the wording of the current legislation to maintain the CRTC’s independence from political authority.
I thank you for your attention, and I would be pleased to answer any questions you may have.
The Chair: Thank you very much, Mr. Armstrong.
[English]
Senator Wallin: My questions are for Mr. Menzies, and I’ll ask you to put on your hat as a former vice-chair of the CRTC. I know you have many, but it gives you a specific qualification on this. I’ll put two questions forward, and you can divide the time.
First, you have stated that the government is motivated through this bill with the intent of extracting more money from big platforms, but section 4 in its different forms will also allow them to extract money from smaller content creators. Does that trouble you?
Second — and I’ll use the words of a former witness this week — almost all broadcasting regulation in this country needs to be understood as a form of a restriction on the right to free expression; do you agree? Thank you.
Mr. Menzies: I might ask you to repeat the second question, because I’m not taking notes as I manage this.
The tricky part is that, yes, this is what the ministers were saying right from the beginning. The intent was to make sure the system gets money from web giants. There is a threat to the traditional system — and we can debate that, because there has been lots of private investment — as cable companies are less able to contribute to traditional sources of revenue because of the success of streaming companies.
If that’s the problem, my suggestion is to just address the problem. There is no need to get into user-generated content and all these other areas and start dealing with small businesses, advancing businesses or people who are taking advantage of the beauty and wonder of the internet and finding success. There’s no need to shut that down. If you want to get money from the big companies and ensure that, in some fashion, they contribute to these traditional funds, which have always been two thirds anglophone, one third francophone — but the current statement in terms of guidance to Heritage is to make it 40% francophone and 60% anglophone.
If it’s the traditional funds that you are after and the big web giants, just focus on that. There’s no need to get into the rest of it.
Senator Wallin: My second question was related to a quote from one of our earlier witnesses that almost all broadcasting regulation in this country needs to be understood as a form of restriction on the right to free expression. Do you agree?
Mr. Menzies: Yes, I do. With Bill C-11, people see no threat to freedom of speech within that. But the difficulty is that Bill C-11 is an amendment to the Broadcasting Act, and in the Broadcasting Act, the CRTC is told to ensure that the system is of good standard or high standard — sorry if I have got the word wrong — but that gives it lots of leeway. It used that in the “N‑word” decision recently with SRC in managing that. It used it to help justify the decision on RT.
You may agree or disagree with those decisions. People can debate those. At the same time, there is no question that the CRTC is instructed, through the Broadcasting Act, to exert itself where it disapproves. So yes, there is.
In terms of freedom of choice, it’s not just in what we say; it’s in what we choose, what we hear and what we speak. Personally, I have never had any problem with discoverability. There is a search tool on Netflix. I type in “Canadian,” and there it is. We have to be really careful about that.
Senator Wallin: Thank you.
[Translation]
Senator Miville-Dechêne: Mr. Menzies, I’m going to take you to a slightly different arena, that of pornography. I want to know whether, in your opinion, the big pornography platforms are affected or covered by Bill C-11 or, more generally, whether they could be regulated by the CRTC. We know that this industry is currently migrating online and that it exists; that changes the situation a lot in terms of protecting children. I’d like to hear from you on that.
[English]
Mr. Menzies: For about 25 years, the CRTC has been licensing adult content, commonly known as pornography. They have done that through cable companies, and it’s been available there for a very long time. So it’s completely within the CRTC’s jurisdiction. It actually started because satellite companies were providing it to people, and it proved to be immensely popular. Then cable companies got into it. They manage it, so the CRTC licenses it. It oversees it.
Through Bill C-11, I can’t imagine that it would not be captured. I think it would be actually exceptional. I can’t imagine the CRTC saying, “Okay, we’re going to do all this, but we’re going to leave online porn untouched.” They would get a lot of pressure from the cable companies that have lost a lot of money, I’m guessing — a lot of revenue — because of the fact that pornography is available online for free rather than through having a cable subscription. So my answer is “yes.”
[Translation]
Senator Miville-Dechêne: Given your past experience as a CRTC commissioner, do you feel that a possible and potential mandate for the CRTC could also include a requirement for age verification on pornography sites, much like what happened with the regulation of pornography through cable companies?
[English]
Mr. Menzies: I’m not completely up to date with cable, but if I recall, it’s generally up to each cable company to file with the CRTC — their standards, insurance and that sort of stuff. A lot of that access is done within the home. I’m not sure there is a verification of age that takes place. I’m happy to be corrected if that has taken place since my tenure there.
Yes, if that’s what you wish, senator, you would probably have to take that case to the CRTC in a hearing, make an application to have that done and then I would expect that would put the CRTC in the position of trying to say, “Okay, if we’re going to apply this rule to online pornography, should we not have the same rule for cable?” Maybe they already do; I’m not certain. But I can’t see anything online about that.
Senator Miville-Dechêne: Could it be in the mandate of the CRTC to ask online platforms to do age verification or whatever method to prevent kids —
Mr. Menzies: Bill C-11 gives the CRTC authority over all audio and visual content on the internet, so that would be an opportunity for the CRTC to take that. And I’m pretty sure, even from my point of view, the $150-million figure would capture online pornography because Canada probably has the globe’s leading online pornography companies.
The Chair: My question is for Mr. Menzies.
You have said in the past that Bill C-11, with the powers that it gives the CRTC, would put at risk 100,000 content producers in the country who are presently using YouTube. You mentioned that it would put those content producers at risk. Can you elaborate what exactly you mean by that? Do you mean there’s a risk of them leaving Canada, or are there some other repercussions if this bill passes?
Mr. Menzies: Chair, I think there’s a risk of them just getting captured in this regulatory maze. Years ago, I remember looking at a YouTube video of a couple of Gwich’in guys up on the Yukon River, just west of Dawson City. One guy had a fiddle and one guy had a guitar, and they were singing their tunes. That YouTube video went to an Indigenous community globally.
I remember looking at these two guys and saying, “Man, imagine all the work they would have to do to go through a regulatory system to be able to tell their story and sing their songs — from Dawson City, way up there, a couple of Gwich’in guys.” This will intimidate that process. The CRTC still has to make the decision whether that’s commercial or whether it’s in or out, that sort of stuff.
Those guys don’t have a chance. They don’t have GR people. They don’t have regulatory affairs people, that sort of thing. Those are the people I’m thinking about. The Indigenous groups and other under-represented groups will have to go through this maze of bureaucracy that involves the CRTC, funding and that sort of stuff. All these guys want to do is tell their story and play their music.
That’s probably the best example I can give of that. There are larger companies that are facing more of a threat, but that’s the broader picture I was looking at.
Mr. Armstrong: There are many misconceptions around what Bill C-11 is doing, what it proposes. In this case, I don’t think it will have any effect on small players. I think the CRTC will have the good sense, as it has done in the past, to simply exempt all of the small players. “Small players” will be defined at a public hearing, hopefully, which the commission would hold. All of the people who are producing less than $30 million a year in revenues — let’s take that as a potential threshold; it could be higher, it could be something else — simply won’t be affected. It will simply pass over their heads, and it will have no effect.
The Chair: Thank you for that answer, Mr. Armstrong. I have a follow-up question. Should this committee and should Parliament leave the legislation up in the air when it comes to protecting small, independent content producers, or should we make amendments to make sure the CRTC is not given an option on this issue? I believe to most Canadians it’s important.
That’s the first question, and this is my attachment to that question: Do both of you think it would be helpful to attach regulatory directives to this piece of legislation before we pass it? That would give more rigid guidelines to the CRTC. I’m curious to hear both of you on that.
Mr. Armstrong: My answer very simply is no and no. I think this kind of issue should be left to the discretion of the CRTC. There is an attempt in Bill C-11, with proposed subsections 4.1 and 4.2, to control to some extent. Unfortunately, the paragraphs are difficult to understand and confusing, but I think they’re adequate. If they are not adequate, then, as a couple of other people on previous panels have suggested to you, you should simply remove them and leave everything to the discretion of the CRTC.
I have confidence in the CRTC. It occasionally makes mistakes, as it may have done in the case of the CBC decision on the N-word, but all of our regulatory bodies and institutions make mistakes occasionally. I think the CRTC, by and large, has exercised its discretion appropriately and adequately. Let’s put it that way.
Mr. Menzies: The problem with that is that if you leave the door open, sooner or later, one aggrieved group or another will appear before the CRTC and ask for that to change. The $30 million sounds reasonable — or $150 million — we’re just arguing over price then. But, sooner or later, that will occur. Somebody will come and ask the CRTC to exercise that jurisdiction because it works for them.
The people I’m talking about will have no voice in front of the CRTC. So, the CRTC will deal with the evidence in front of it. Those two Gwich’in guys from Dawson City won’t have a chance in terms of being able to represent and make their case before the CRTC. They probably won’t even know what’s going on. The next thing they know, they will not be able to upload to YouTube.
Exercise your discretion. Draw a line as quick as you can.
Mr. Armstrong: But hundreds of people like them will have the opportunity to —
Mr. Menzies: No, they won’t.
Mr. Armstrong: They will.
The Chair: I am sure you’ll have opportunities to elaborate on this important question. We’ve heard a lot about the CRTC, but we have to move on.
Senator Klyne: My question is for Mr. Menzies. It’s good to see you, Peter. It’s apparent that you’re very concerned about the amount of power that this bill purports to give to the CRTC. From what I can gather, your position is that regulation of online companies is unnecessary.
Many witnesses have referenced the fact that Canada is in a golden age, in terms of investment and job opportunities in our media sector, due in part to investment by major online companies such as Netflix and Disney Plus. Do you think that this level of investment will decrease if this legislation passes, or are these companies producing content at such a rate that this legislation won’t have much of an impact at all?
Mr. Menzies: I will answer that question directly. First, it’s not like I don’t think online companies should be regulated at all. There are lots of areas in terms of algorithms, privacy data collection and that sort of stuff that a modern framework should deal with. But, yes, if you’re investing — let’s pick a number — $800 million a year privately in Canada, and then you’re mandated to spend — I guess the request is for 30% of revenues or something like that, through funds, you run out of money, right? You have to take it from somewhere. You might take it from unofficial, unapproved investment funds and switch it to approved funds. It’s not like there’s going to be more money. You’re just going to move money around.
Senator Klyne: Thank you.
[Translation]
Senator Simons: My question is for Mr. Armstrong, but I’m going to ask it in English.
[English]
I have in front of me section 7(1) of the existing Broadcasting Act and the proposed subsection 7(7) if amended. Here’s where I run into a problem because the proposed subsection says:
For greater certainty, an order may be made under subsection (1) with respect to orders made under subsection 9.1(1) or 11.1(2) or regulations made under subsection 10(1) or 11.1(1).
Can you explain to us, in English or French but not in gobbledegook, what does proposed section 7(7) do to the Broadcasting Act? What does that mean?
Mr. Armstrong: Proposed section 7(7) basically expands considerably the power of the government to give directions, the nature of the directions that the government can give to the CRTC. So it reduces significantly the power that the CRTC has. In this sense, Bill C-11 reduces enormously — potentially — the powers that the CRTC has and hands them over to the Government of Canada. By the way, the directives that the government now can — according to the bill, the directives will no longer have to be presented to an appropriate committee of the House of Commons. They will be published and read out in the House of Commons, but they will not be presented to a committee of the House of Commons.
Senator Simons: Does this politicize decision making and deny people a right to appeal? Does it have the potential to do that?
Mr. Armstrong: The denial of the right of appeal is elsewhere in the bill. But yes, there is a denial of a right to appeal on directions to the CRTC. The problem is that the current wording of the act allows the government to give directives of a general nature.
Senator Simons: Broad policy matters, yes.
Mr. Armstrong: Yes, broad policy matters. I’ve actually written an article that has been published in Policy Options on this issue. If you look in detail at what the government is giving itself through this particular clause, it’s giving itself a whole series of very detailed opportunities to, in my view, interfere with the normal functioning of the CRTC. Virtually all of the decisions that the commission can be made, whether by condition of licence or by regulation, are included in a potential directive from the government. I think that is inappropriate.
Senator Simons: We’ve had one witness before us already, Monica Auer, who suggested simply deleting proposed section 7(7), and I’m wondering if you would concur.
Mr. Armstrong: That’s exactly what I said in my presentation.
Senator Simons: Every time I think I understand all of the issues and pitfalls in this bill, I discover something new and exciting to think about. Thank you very much.
Senator Manning: Thank you to our witnesses this evening. My question is for Mr. Menzies as well as Mr. Armstrong, if you would like to answer.
As former vice-chair of the CRTC, you know about the capacity of the organization, as Senator Wallin touched on earlier. You’ve expressed concerns similar to those raised by some of our earlier witnesses stating that the challenge of implementing this bill by the CRTC will be considerable.
What do you see as the commission’s most serious shortcomings in that regard? If Bill C-11 is passed without amendment, how long do you think it would take for the CRTC to build the capacity required to manage what new responsibilities it will have with the passage of Bill C-11?
Mr. Menzies: I think the CRTC will handle all the duties that are given to it through Bill C-11. First of all, it needs a new chair, which they’re having difficulty finding. It depends on the experience of that person. My own thought is that person should just be purely a change management person who has to put in new structures and that sort of stuff.
There are a lot of things involved, like user-generated content, that are entirely new to the CRTC that they have to educate themselves on and get themselves around. I would think it would take them two and a half years — not counting court appeals and court challenges to Bill C-11 — to come out with a decision that even dealt with scope in terms of what Mr. Armstrong and I have been talking about, whether it’s $30 million or $150 million or something like that.
For definitions, they’re looking at deciding what actually is a commercial enterprise, et cetera. Just the basic stuff, two and a half years.
During that period of time, everybody involved in trying to invest in the system doesn’t know what the rules are. That’s a problem. I think that answered your question. I hope it did.
Senator Manning: Thank you. I also have a question for Mr. Armstrong. I’d like to talk about the extent of the power that clause 7 of the act gives the cabinet when it comes to both policy matters and specific activities of the CRTC. Mr. Armstrong, I’ll quote you from a recent Policy Options piece in which you stated that:
. . . the extension of the powers of the cabinet opens the door to a politicization of the regulation of broadcasting in the country, which the creation of the CRTC was intended to avoid.
Under this context, do you believe that it would be helpful, if not imperative, for the government to share its policy directive on Bill C-11 sooner than later?
Mr. Armstrong: I’m not sure that I understand the question. What do you mean by sharing it? I think this clause should be simply deleted.
The CRTC was created as an arm’s-length institution. I think that the problem with this particular paragraph, 7(7), is that it reduces the arm’s-length distance that cabinet or the government should have with an independent agency like the CRTC.
Senator Manning: So the uncertainty that is caused and that we’ve heard from witnesses here over the past number of weeks you believe would be taken care of with the removal of clause 7?
Mr. Armstrong: What uncertainty are you talking about? I’m not sure what uncertainty you’re talking about.
With this particular paragraph, the government would have the power to give very specific and detailed instructions to the CRTC as to how to conduct its affairs. There would be no public hearing. Normally, this kind of issue is treated through a public hearing at the CRTC where any member of the public can present himself or herself and make their views known. This would not be the case if directives are given to the CRTC. The directives would reduce the margin of discretion that the CRTC currently has.
Senator Manning: So the CRTC would have to follow the directives of the government to the T?
Mr. Armstrong: Absolutely. That would be the law. This would be an extension of the law, always within the framework of the legislation. But the CRTC would have to follow the directions of the cabinet, and I think there’s a potential significant reduction in the authority and independence of the CRTC as a result of that. That clause, 7(7) but also paragraph 34.997 and the other one that I mentioned in my presentation, 34.995.
Senator Dasko: Thank you to both witnesses for being here. I have a question for Mr. Menzies, and it goes something like this: You don’t like Bill C-11. You don’t like the bill. You wouldn’t go ahead with the bill if it were up to you.
At the same time, you said that you think the Senate will pass the bill. In that scenario where the Senate would pass the bill, should I understand that the only thing you would change in the bill would be to put a threshold in? That’s what I picked up from your introductory comments; you would deal with or perhaps take out section 4.2 and put in a threshold. Is that the only change you would make to the bill if indeed it’s going to go forward by the Senate in that scenario? I wondered what you might say about that.
Mr. Menzies: No, senator. You can assume that I had five minutes to pick two or three things that I could focus on, and those were the ones I focused on.
I think Mr. Armstrong has made some excellent points regarding the independence of the CRTC and the importance of it being distanced from government. This goes back to the Railway Safety Act over 120 years ago, when government created regulators so that government wasn’t making political decisions over who was using telegraph and who wasn’t and that sort of stuff. So it’s extremely important that the CRTC be at arm’s length, and long arms. The arms are pretty short right now and they’ve been getting shorter all the time. This bill makes the arms non-existent in terms of that.
For the CRTC to have credibility with the public and with the industry, it needs to know that people can’t play political games and run around them and go to cabinet, no matter which party or who is in power, and make their case and get an order-in-council written telling the CRTC what to do. It creates a cloud over the CRTC’s head, where they are second-guessing themselves every time, trying to figure out, “Okay, if we make this decision — like happened with CBC — is someone going to run to cabinet and come back and tell us we’re wrong?” You are going to be wrong sometimes.
Senator Dasko: Basically, you are saying you would go through the bill and cross out some stuff.
Mr. Menzies: If I could do everything all over again, we would actually have something such as was in the Broadcasting and Telecommunications Legislative Review Panel where we have a Canadian communications commission that was built around the understanding that the internet is now our central communications platform. But I’m kind of a loser when it comes to those sorts of arguments, so I’m trying to focus on the things you can do that will make this better and less dangerous.
Senator Dasko: And your main priority would be dealing with 4.2 and putting in a threshold.
Mr. Menzies: And Mr. Armstrong’s point too. It’s really important that the CRTC remain independent.
Senator Dasko: Thank you.
Mr. Armstrong, I’m afraid I didn’t quite understand a couple of things that you were saying. I wonder if you could just clarify for me your comments with respect to sections 18.1 and 9.1(1), which were related to public consultations, I believe. Could you clarify that? I’m sorry; I missed it in the translation.
Mr. Armstrong: With respect to consultations, the problem is very simple. At the present time, the commission is required to make decisions after holding a public hearing with respect to issuing licences, revoking licences and amending them significantly.
Bill C-11 introduces a new regime with a parallel track where there would not only be licences but, for online players, there would be ordinances or orders that, without a licence, would give the online players the ability to function. Those orders will not be subject to public hearings, according to the way in which Bill C-11 is presently written.
So all I suggested in my presentation was to make those kinds of orders subject to public hearings, just like decisions on licences are presently required to go to a public hearing.
Now, those public hearings don’t have to be face-to-face public hearings; they can be what are called “paper hearings.” But they are opportunities for the public to intervene and make their point of view known.
Senator Dasko: When you say “public,” do you mean stakeholders mainly, or is there another —
Mr. Armstrong: No, they are public hearings. Anybody from the general public can make interventions, and a large number of people do. If you look at the recent public hearings, there are a large number of interventions by email, presentations and so on. If you come to the commission in person, it’s commonly believed that you have more influence on the commission’s decisions.
But they are public decisions. They are published, and the commission goes to some trouble to make them publicly known. There is an opening and a window in which the public can intervene on issues.
Senator Dasko: Okay, thank you. That clarifies it for me. Thanks very much.
Senator Clement: My question is for anyone who cares to answer.
I want to react to the comments made about the CRTC, by you and other witnesses, that it’s a cumbersome process, that it’s not necessarily accessible or streamlined. Maybe that speaks to a lessening of the trust we have in our public institutions. I don’t know.
But should Canadians then trust the platforms and the streamers to properly curate Canadian productions and content, especially since a lot of Canadians don’t have that much access to information as to how those platforms and streamers work? Mr. Menzies, you said, “I just go to the banner that says Canadian content.” Is that enough? Should we trust the streamers? We don’t necessarily trust the CRTC, according to witnesses. Should we trust the platforms?
Mr. Menzies: I don’t think it’s a matter of whether you trust the CRTC or not. The people there are trying to do the best job they can, but there are processes that involve broad consultation. One of the things you’ll notice about the Broadcasting Act is that the word “consumer” doesn’t exist inside it. It is an act that’s designed to redistribute income gathered by cable companies to artistic groups in order to create Canadian content. None of it is market based. You can have a big debate about that if you want, but it’s largely an industrial subsidy. I need to be careful, because I don’t want to insult anybody, but it’s not about creating content that’s going to be popular; it’s making sure that Canadians stay in the game, in that sense.
So there is a long process involved, and many stakeholders are involved. As Mr. Armstrong just said, if you show up, you are going to have more influence than if you don’t. So if you are from Montreal, you are a two-hour drive away. If you are in Prince George, British Columbia, you are not going to show up, and your voice is going to be less well heard.
It’s really about being targeted. That’s the point I’m trying to make with you with this bill. It’s about targets. Decide what you want to do. If it’s the big streaming companies you want to have, that’s fine. Why should Canadians trust big streaming companies? There is no reason why they should trust them any more than they trust CTV or CBC, which are all making content decisions on their behalf, but they’re making them based on what they think people want to watch. Conversely, the CRTC will make decisions based on what they think people should watch. That’s a big difference.
Senator Clement: Should we assume that Canadians want to watch Canadian stuff?
Mr. Menzies: They always say they do but —
Senator Clement: I feel that nobody is making that assumption.
Mr. Menzies: They say they do, if you poll them. They want to have good Canadian stuff. But do they watch it? According to the broadcasters, no, they don’t. The broadcasters have worked for years to have Canadian content out of prime time. Canada is one of these weird countries where our broadcasters aren’t even really in charge of their programming. Whatever the Americans are doing to switch their programming around to their prime‑time shows impacts our programming decisions for prime time. We are not a sovereign nation when it comes to programming our television in terms of that.
That’s the way it has been, and I am not sure that’s going to change anytime soon, unless you let Canadians free to serve Canadian audiences. But that’s tricky.
Senator Clement: Would Mr. Armstrong care to comment?
Mr. Armstrong: I will, only to say that we can trust the web giants to pursue their own interests; we can certainly trust them to do that, as most companies do. The difference between the web giants and licensed Canadian broadcasters is that the licensed Canadian broadcasters are obliged to offer certain types of Canadian content by the nature of their licences. The primary intention of Bill C-11, as far as I can see, is to bring the web giants into the ambit of Canadian regulation in a very loose, flexible way — that is the intent — so that they will not only pursue their own self-interest.
Senator Quinn: Thank you for being here this evening.
I have a few short questions. It has been interesting to hear your different perspectives. You have brought forward information that has underscored some of the earlier things we have heard with respect to concerns with some areas of Bill C-11, user-generated content and the role of the CRTC.
First, should we not bring clarity to the act? My understanding is that the big guys, the streamers — outside of my field of expertise here — the big guys are in the act and the little guys, user-generated content folks, are out of the act. Shouldn’t that be made clear in the act? Should there not be amendments to bring that particular aspect forward so that it’s very clear, so that there is no chance that a regulatory body can have a different interpretation than what the government intends to do? I would like a response from both witnesses, please.
Mr. Armstrong: Right. Well, I think the intention of 4.1 and 4.2 of Bill C-11 is to basically eliminate user-generated content, except in exceptional circumstances, where the user-generated content or the entity that’s providing the so-called user-generated content is, in fact, behaving like a web giant. So that was the intention of 4.1 and 4.2. And I don’t think you are going to get anywhere trying to play more with that language. I think it’s about as good as you can get. It’s very confusing; that, I admit.
I think there are two options. One is to leave those two paragraphs in and accept that it will take a year or two to figure out exactly how to put them into effect, and the other possibility is to take the two of them out and leave the question to the discretion of the CRTC.
The CRTC has had the potential since 1991 to regulate online services. Bill C-11 gives them nothing new in terms of the power to regulate except certain tools. But it doesn’t change materially the definition of broadcasting.
The CRTC could have entered into the regulation of online broadcasting years ago. It chose not to do so. It exempted online broadcasters. And this bill attempts to prod them in that direction. I think if they were given the opportunity — even if 4.1 and 4.2 were not present in the bill — that they are certainly not going to try and regulate user-generated content in the usual sense of the word.
Senator Quinn: Before you reply, can I have a supplementary for Mr. Armstrong, You have touched on the nub of the issue, I guess, from the perspective of a lot of people we have heard from that 4.2 in particular is confusing, direct income or whatever. If we don’t clarify that and leave it in, then the fear is that the CRTC will have powers within their authority to bring in rules that may in fact cause the user-generated content providers to be touched by this.
Mr. Armstrong: But the CRTC has no interest to do that. In fact, subsection 9(4) of the existing Broadcasting Act gives them the power, tells them not to regulate where the regulation does not have a material effect or impact on the realization of the objectives of the act in section 3.
Senator Quinn: Thank you. I would like to jump to Mr. Menzies —
The Chair: Unfortunately, senator, we ran out of time and we even have a couple of senators on second round waiting. But the time is up. And I would like, on behalf of the committee, to thank Mr. Armstrong and Mr. Menzies for being before us and sharing with us your perspectives.
For our second panel, I’m pleased to welcome Stewart Reynolds, also known as Brittlestar, and Jennifer Valentyne, television host, producer and content creator, and Darcy Michael, content creator who is with us by video conference. Welcome. Thank you for joining us. Each of you will have a five-minute opening statement and then over to my colleagues for questions and answers.
Mr. Stewart Reynolds, you have the floor.
Stewart Reynolds, (Brittlestar), Digital Content Creator, as an individual: Thank you very much. I’m Stewart Reynolds, though I’m better known online as Brittlestar. I’m honoured to be asked to testify here today. I really am. I create and publish comedic videos on social media, which includes YouTube, Twitter, Facebook, Instagram, TikTok and more.
I have been creating social media videos as a full-time job for the past nine years. I have been able to support a family of four thanks to social media. I have done all this from my home in Stratford, Ontario. That’s pretty great, and I would like to continue doing so.
I need to make it really clear that I cannot speak to the benefits or drawbacks of Bill C-11 in regards to the Netflixes and Disney+’s of the world. Those streaming platforms are very different from social media platforms. I can’t make a video in my garage and post it on Netflix. They are gated. They decide what is uploaded to their platforms. YouTube, TikTok and the like are not gated. They do not decide what is uploaded to their platform.
However, I can speak to the benefits and drawbacks in regards to digital first creators like myself. Forcing or attempting to force YouTube, TikTok or other platforms to prioritize Canadian content may be well intentioned, but it is naive for two main reasons. First, forcing people to view content because it’s Canadian does not encourage people to like that content. It is more likely, I feel, to breed negative perceptions of Canadian content from the user. If they know a video is being shown to them primarily because it’s Canadian and not because it is what the user is searching for, it can make the video seem inferior regardless of whether it is or not. It’s like going to a restaurant with corn content or corncon rules. Even though you order the Alberta sirloin, you receive a bowl of corn. Good, perhaps, but not what you wanted.
Second, the social media platforms are all foreign-owned. The Canadian offices are little more than satellite offices that operate at the command of the head offices outside of Canada.
I have been told by an employee at one of the social media platform’s Canadian offices that when the spreadsheet plan comes from head office, Canada is last on the list. We’re tiny. The notion of CanCon for radio, although colouring a lot of the artists with the same negative perceptions, was easier to implement because you were working with a radio station, for example, in Kingston, Ontario.
Bill C-11, in its current form in regard to digital-first creators like me, is like trying to force that radio station from Syracuse, New York, which you can hear in Kingston, to play more Canadian music. It’s a nice idea, but the chances of it happening are slim.
Make no mistake, though: Thinking Canada’s digital-first creators can thrive and maintain their Canadianness without any help is foolhardy. We live next door to a massively influential market. Of course, there are standouts that have succeeded, but there are many Canadian creators who don’t have millions and millions of followers yet who can be adding to and growing this digital-first industry in Canada.
The key is to focus on making incidentally Canadian content — content that appeals to a broad audience but is evidently Canadian in location, detail or any way whatsoever. The goal should be creating content that is incidentally Canadian, exporting it to the world and bringing back that money into Canada.
Bill C-11 runs the very real risk of cutting us off from the world, making us big fish in a little pond when we should be focusing on just making great fish.
I agree that Canada does offer a tremendous amount to the platforms in the form of creators and consumers. That has real value. However, instead of asking them to prioritize Canadian content, which I feel is futile at best and counterproductive at worst, why not have them invest in Canadian digital-first creators? When monetization becomes available on a platform, Canada is often not first in line. In 2016, I watched my peers in the U.S. and the U.K. evolve from one-person operations into full production houses with many employees when Facebook offered monetization for videos. I had similar view counts on my videos, but as I was in Canada, I was not eligible to be monetized, so I made zero dollars. Further, TikTok just announced today that they are monetizing creator videos but seemingly not in Canada, at least not yet.
Why not have the Canadian government work with the platforms to ensure Canadian digital-first creators have the same opportunities as the U.S., the U.K. and other countries? Why not have the social media platforms, instead of paying out fees to just traditional broadcasters, fund incentives, programs and support for Canadian digital-first creators, like helping francophone content creators find global audiences and ensuring important Canadian stories in any language can be told? Otherwise, we’re leaving a potentially massive industry needlessly under-developed. It’s like having a booth at a farmer’s market, but it’s hidden.
Canada is the best place in the world to create in. We have a quality of life that is far above many other countries. Let’s work to make Canada a content-production powerhouse. Let’s work to make the world want to watch Canadian content, not just because it’s Canadian but because it’s the best. For that reason, I feel it is in Canada’s best interest to modify the existing Bill C-11.
Thank you.
The Chair: Thank you, sir. Ms. Valentyne, you have the floor.
Jennifer Valentyne, Television Host, Producer and Content Creator, as an individual: Good evening. I have worked in radio and television for most of my life. I began my career at MuchMusic when I was still in school for broadcasting and eventually moved over to a Toronto local morning show. I loved my job. I worked hard. I was there for 23 years, until I was told by a man that another job would be a good transition for a woman my age. It wasn’t the first time that a man in a corner office mentioned my age in this business, and it wasn’t the last. It’s a tale as old as time: A woman gets pushed out because she is almost past her expiry date, with so much more to contribute.
That morning show erased every one of my video segments from their website and social platforms, as though I never existed. Those videos were about highlighting the community, not me — the community stories that legacy media and this legislation claim to care so much about.
It’s a cruel business, and if this happened years ago, people would have said, “Remember Jennifer Valentyne? I wonder what happened to her?” But it’s a new world that is moving forward. The news of my firing was announced on the morning of April Fool’s — no joke — not on the television station I had dedicated half my life to but by a small post on social media that read, “We have cancelled the Live Eye segment to focus more on what the public wants: News and information.”
It’s no surprise that the public didn’t like being told what they wanted and what they didn’t want. They voiced their opinions. That Facebook post was shared thousands of times, and thousands of comments came in from all over the world. The post went viral, and they erased it, hoping it would go away.
I then created my own post on my own Facebook, and an amazing thing happened: That post went viral and users followed. I spent countless hours answering people’s comments and words of support. Women told me about their own stories of ageism, and within a few weeks, my numbers went up by 30,000.
Facebook saved me, like so many others. Social platforms are where people relate to one another, and during the pandemic, people across the world related to each other. Throughout my time in broadcasting, I was often approached by journalism students who would say they wanted to do what I was doing on TV and asked for advice. I told them to apply for broadcasting jobs but get on YouTube. Be in control of your own destiny. Don’t let executives tell you that you are not good enough, smart enough or talented enough. If your content is good, people will follow you.
So after I found myself at 48 without a job, I took my own advice. I started producing my own content that I posted myself, and no one could erase it except for me. It felt good, and people followed. People engaged, shared, “liked” and saved. That’s what boosted my content even more: the algorithm. My content was now reaching an audience that was interested in what I was producing. I would eventually work at another TV station and find myself in one of the worst toxic environments you could imagine. It was a situation that four other women came forward to expose.
I have recently been very vocal about gender discrimination in the workplace, especially in broadcasting, and I’m not alone. Many other women are starting to speak out and tell their stories. Recently, Lisa LaFlamme took to Twitter to announce that she was let go at 58 — another woman with so much more to contribute. The hashtags #keepthegrey and #greyisbeautiful went viral across the world.
So where will women turn to make a living when they age out of legacy media, according to men? They’ll go to social platforms where there are no such barriers based on age and gender.
But now creators like me will once again face an uphill battle to survive or thrive to our potential, even if only as an unintended consequence, all in an attempt to once again lift up legacy media, which spend less on local stories and more and more on syndicated foreign content, syndicated news and sports.
The government is hoping Bill C-11 will save legacy media, saying that they want to make it a level playing field for everyone. But in doing so, they will hurt thousands of content creators across our country who will lose everything they have worked so hard to build if user-generated content and algorithm manipulation is left out of this bill.
In broadcasting, an executive holds a magic wand and decides who the winners are, how much they get paid and how they are treated. For example, it would have taken me 10 years to make what my male radio co-hosts made in just one year. Now the baton is being passed to the CRTC to decide who wins and who loses on the internet, instead of the users, the Canadian people, holding their own wands and deciding what content they want to watch.
Why are we going backward? I’m asking for myself and every other content creator and user to please change section 4.2 and write it in a way that leaves no doubt that user-generated content is exempt from this legislation. Thank you.
The Chair: Thank you, Ms. Valentyne. I will now turn the floor over to Mr. Michael. You have the floor, sir.
Darcy Michael, Content Creator, as an individual: Thank you for taking the time today to hear me. To be honest, I’m tempted to save all of our time and just say “ditto” to Stewart and Jennifer’s testimony.
For 16 years, I have been a Canadian comedian and actor. I have had many traditional successes in both film and television in Canada, with 10 televised galas at Just for Laughs, I starred on CTV’s sitcom “Spun Out” for two years, and I have my own one-hour stand-up streaming special on Crave called “Darcy Michael Goes to Church.” It’s highly recommended viewing.
After our sitcom “Spun Out” ended production, I spent four years developing and writing my own sitcom with Bell Media, only to be told at the end of four years that they didn’t think there was an appetite for it. And yes, I’m foreshadowing.
In Canada, when one television network says no, there are really only two other gatekeepers left to talk to. After all three networks declined to make the show, I was told to try getting it made in the United States first and then come back. Something we love to do with artists in this country is to send them elsewhere to find success only so we can lay claim to them later.
When COVID hit, filming and the stand-up industry rightfully shut down. As comedy, for some unknown reason, is not recognized as an art form in Canada — unlike musicians, dancers, writers — comedians are not eligible for grants, which meant the pandemic left no option to help me or my family. So I pivoted. I decided to take the concept of my sitcom to digital platforms like TikTok, partly to entertain myself during those dark days of the pandemic but also because I wanted to prove the concept of the show. It was not in hopes of the networks changing their minds but because I’m bitter and I wanted to prove them wrong — and I did.
Fast-forward to two years later, across all platforms, I have over 3 million followers online. Our TikTok channel alone averages 30 to 60 million views per month. For the first time in my career, I’m finally reaching Canadian households that I could have only dreamed about before. Not only that, I own 100% of my content, and I’m in 100% creative control. With platforms like YouTube and TikTok, artists can be in control of their creations and their businesses.
Becoming a content creator online has single-handedly been the best decision I’ve ever made. At the end of the day, user‑generated content is democracy at work. If something becomes successful online, it’s because that’s what the audience wanted. I strongly feel that the decision for what is pushed online should remain in the hands of the audience. Although I understand that the CRTC may not change the algorithm, I think it’s pretty clear that that is currently open for interpretation, and I believe my business deserves legislative protection.
I’m speaking to you today as a proud, queer digital creator with content that celebrates conversations around mental health, body positivity and human rights. These are all the things I tried to do with traditional networks, but three gatekeepers didn’t think there was an appetite for it. Three million people disagreed with them. I have a career today in spite of the industry.
All this said, I actually do support most of Bill C-11. As an actor, I believe streaming giants should have to contribute more to Canadian culture. I just don’t believe Bill C-11 is the answer for the social media component. Thanks so much for your time.
The Chair: Thank you to all three of you for very compelling testimony. My question to launch this off is for Ms. Valentyne.
As a former television and radio personality who has found resounding success in the digital world — and I’ve been following you the last little while on social media — you’re quite an inspiration, I have to say, particularly given how you were sort of forced to this transformation. It wasn’t something you were looking for; it was forced upon you. You took a terrible situation and turned it into a great success. As a woman, I’d like to have your perspective on this because the government professes that this bill protects people like yourself and so on and so forth. I’d like to get your point of view. Do you feel that you need protection in this legislation? Do you need the government to interfere in order to protect the success you’ve managed to reach?
My other question is with regard to this intervention and this bill. Is it something that will help you continue in terms of your success? What obstacles are you afraid of? At the end of the day, individual content producers are worried that this bill is launching obstacles in your way. Can you elaborate on some of those?
Ms. Valentyne: The one thing I’ve heard from most of the content creators who have spoken is that they’re losing sleep. And they’re not alone; I’m losing sleep as well. We’re all worried that if algorithms are manipulated, our content won’t hit the right audience. I’m also hearing from the Senate that they want to know how the algorithms work. I just don’t understand why they can’t figure that out before they pass a bill that will change everything for Canadians — not only for the content creators but the users as well.
The algorithm seems to be working amazingly. I’m not a huge content creator. I don’t have millions and millions of followers, so I think I am a smaller content creator who was able to generate some sort of income to make a living, to pay my bills, to pay my mortgage. It’s amazing that we can do this in Canada.
Years ago, we’d have to go to the United States to be successful, and now we don’t. We can live in the country that we love. You can stay in Stratford, Ontario, have your computer and do your digital content and take care of your family. Isn’t that what we want? We don’t want to leave Canada. We love Canada. At the same time, we’re promoting Canada across the whole entire world. We have a worldwide platform, which could potentially mean more money, and that is great for everyone.
I’m just afraid that it will push down content creators — myself — push down my content and that of so many others. Right now I feel that the algorithm gets to the audience that you want to get to, whether it’s here in Canada or whether it’s across the pond.
The Chair: My next question is for Mr. Michael. You made a case about how successful you’ve been in your business and your concerns about this bill, but you said there are parts of the bill you do support. My question is a very simple and succinct one. What do you propose as amendments? I know you’re not necessarily a legislator, but what parts of the bill do you think are the most fixable to make it palatable in order to achieve some of the things the government wants to achieve without destroying this generated content industry, which is clearly growing in spades?
Mr. Michael: I appreciate the question. With all due respect, I think it’s important to know that I am not the smartest person in this room, so I don’t have the answers to all of that. I genuinely believe that, right now, this bill is trying to mix two industries that shouldn’t be mixed. When we are looking at entertainment on streaming platforms like Netflix, Disney, Apple, I absolutely believe that they should be held to the same accountability as CTV, CBC, Global. When it comes to social media, I genuinely don’t think they should be involved in the bill, if I can be as simple as that.
The Chair: Anybody else want to weigh in on that, or do we move on?
Mr. Reynolds: I completely agree with Mr. Michael. They’re oil and water. They’re totally different, absolutely different.
The Chair: Thank you.
Senator Wallin: I think you summed it up really well there, Darcy Michael. We are trying to put two very different creatures together. As we’ve tried to argue over time here, the internet is not a television network, and so it needs a different process.
All of you have asked, in one way or another, why does everybody want us to be big fish in small ponds? Our content is great. People seek us out and find us, and the algorithm rewards that. And you are Canadian. That fact is kind of an incidental bonus, not key to your actual talent. The talent stands alone. And, Darcy, success is what the audience tells you it is by responding to you.
From each of you, can we hear some thoughts on why you think, in 2022, governments want to constrain this, control this, restrict you, make you into those big fish in small ponds? Mr. Reynolds, why don’t you begin?
Mr. Reynolds: I think the intention of the bill — at least to give it the benefit of the doubt — is to make sure that Canadian culture isn’t steamrolled by American culture. As Mr. Menzies said earlier, we’re at the mercy and the whim of American culture. It’s a huge market next door that we can’t ignore. Protecting Canadian culture is smart, but forcing it down people’s throats is not smart. There’s no need to do that. It’s good enough on its own. We should be investing in it. We should be trying to create the best content we can. That may mean helping content creators to create more things. Not just myself but many other content creators could use the help to sort of get Canada out into the world.
You mentioned that incidental Canadian aspect of the content. If I’m filming something in Vancouver or Toronto or Banff or in Dawson City or somewhere, I’m showing Canada to the world. That becomes very appealing. That has many uses and benefits for Canada. Of course, as Jennifer said as well, I get to bring money back into Canada, which turns into tax dollars, which is not a bad thing.
Senator Wallin: Jennifer, I starred in the movie before you did, an earlier version. Why don’t you tell me a little bit about your relationship with the audience and why you think it’s actually a relationship that’s more real and more genuine than what you often get on a television screen?
Ms. Valentyne: I think every content creator would agree that the content comes first, the creation comes first and money comes second. That’s why these creations are doing so well all over the world. It is because it’s a passion. The money is a bonus.
Isn’t it amazing that the term “starving artist” may disappear? Our kids’ kids may never know that term. There are so many artists in Canada that are now able to make a living. I’m not everybody’s cup of tea. When you have a bigger audience, your content will reach the audience that cares about your content.
There are so many examples, but one example that I think is great is Lee Howard. He does horror art. There’s a very small market for horror art. He does teddy bears where he sort of mutilates them and puts vampire teeth. He’s so creative. He draws and he produces movies. Now that he has been on TikTok, I think one of his TikToks has 1 million followers and the other has 2.7 million. I don’t even know about his YouTube or Facebook, but now he’s able to support his family. He’s able to sell all across the world through his TikTok. So this is a Canadian success story.
Isn’t this amazing that there are only so many television jobs? I’m never going to get another one. I’ve aged out. You never know. But I think this is a wonderful thing for Canada. There are so many stories. I could tell you a million.
Senator Wallin: I want to give Darcy a chance so he doesn’t get to just say, “ditto.” I want you to talk a bit about the comedy side too, because you do not benefit from the production funds in the same way. This really is an important outlet for you.
Mr. Michael: Absolutely, yes. I don’t have the benefit of being able to apply for any of the funding or the grant programs with the Canada Council for the Arts. That’s a meeting we should have another day. But we’ve always had to work creatively within the confines of the industry.
Now in January, my husband left his six-figure job to work for me full time. We were able to pay off my daughter’s student loan, so she’s now out in the workforce debt-free because of our success online.
I like to use the anecdote, my first special for Comedy Network was 13 years ago, I was paid $2,000 one time. It is still aired almost weekly to this day. Now I’m billing in 15-second intervals because of the success.
Senator Wallin: Thank you all very much.
Senator Simons: I’m going to start with Mr. Reynolds. You and I had the chance to speak in a smaller group setting where you explained your business model to me. I found it interesting and I think others might too. Could you explain how exactly you monetize your videos, and what the importance of your international markets is to your overall business plan?
Mr. Reynolds: Sure. There are a couple of ways I monetize what I’m doing. The basic way of monetizing through YouTube or Twitter means that when ads play before or during my videos, I get a cut of that ad revenue. That’s a small part of our revenue.
A larger part of our revenue is for branded content, and that’s where brands come to us and say that we would like you to create some content, would you like to include our brand? They pay us a fee for that content.
Finally, there’s an offshoot of that, which is merchandise and stuff, the other half of what we do, which is based on people who follow and enjoy the content I create. And then that is used as a pedestal for the merchandise that the people can be aware of it and buy it and help support us.
I think I mentioned earlier to you in our other meeting that up until fairly recently I had to rely on American brands. Our first brand content deal was with Disney back in 2013. Up until about 2017, the Canadian market wasn’t really aware they could do that, and now they are thankfully. Now we’re working with more Canadian brands, which is great.
It’s essential for me to have maximum reach. When I do a video that has appeal — it could be about something provincial government-wise, but even that video will get shared in Ohio or Texas. They say, “That looks just like our governor,” and that turns into ad revenue and helps me. If it only stayed in Ontario, I would get paid $40 to $50 and it wouldn’t be enough for me to continue doing them.
It’s incredibly important to have access to that market and to bring Canada out to the world and to get Americans used to the idea of the word “province” over “state.” That’s worth it on its own.
Senator Simons: Mr. Michael, how are you able to monetize videos on TikTok? This is something I still find perplexing.
Mr. Michael: It is very similar to Stewart’s business model. We have brand partnerships and brand deals where we’ll do sponsored posts on our channel, both on TikTok, Instagram and YouTube. Believe me, if it was up to my husband, I would look like a race-car driver in every video and I would be covered in logos from every company that wanted to pay, but we try to limit it to a few ads per month because we still want people to come for our content.
Again it’s something I get to work with. We have a mandate that Jeremy and I, my husband, set that we try to work with 75% Canadian brands and then leave the other 25% to American because we want to be driving business back into the Canadian economy. Part of what we’re doing is exporting our Canadian culture to the world now. Our reach is global. I think it’s exciting. I want to share that with people in and outside of Canada.
Similar to Stewart, we have merchandise, we have brand deals. We get paid per view on things like YouTube and stuff. But it’s also trickle economics. When people enjoy the comedy, they go and buy my album on iTunes or Apple or they watch my stand-up special on YouTube, further driving more ad revenue and bringing more income to us.
Senator Simons: This is my concern, and it’s not something that Bill C-11 fixes. All three of you are riding a wave right now where the algorithm is working for you. The algorithm is not an agnostic thing. It is being manipulated by companies to their benefit. And you will do well as long as they are benefiting.
If they decide, even in an absent-minded way, to change the algorithm in a way that does not benefit you, you will have no control, even less control than you did when you were working for companies or trying to get broadcasting deals.
I don’t know if there’s anything that can be done about it. I do worry that fascinating content producers like yourselves are at the mercy of big international companies — American, Chinese, what have you — and that once you’re hooked and dependent upon them, you will have no recourse.
I used to post all kinds of videos to Facebook that used to get thousands and thousands of views, and now that Facebook has made a public decision to stop boosting the algorithmic reach of political news and news in general, I’m not getting anything like the same views because I suspect Facebook won’t unless I buy ads, which doesn’t seem a prudent use of Senate funds, so I don’t do it. That’s enough about me. I don’t know how you feel about the situation where you have such a power imbalance with these companies.
The Chair: Very short answers because we’re over time.
Mr. Reynolds: I’ll say that I despise the algorithm. I’ve succeeded in spite of the algorithm. Social media has allowed me to create a brand around myself so people recognize me. I can take that brand to any platform and people will know it’s me. That’s the value of digital-first creation for me.
Senator Simons: Thank you. That’s helpful.
Mr. Michael: I’ll throw in a quick ditto there.
Ms. Valentyne: Me too. Ditto.
The Chair: Thank you for the succinctness of the answers.
[Translation]
Senator Miville-Dechêne: First, I’d like to tell you how much your successes mean to me. I have to say that, as a feminist, I’m especially moved by Ms. Valentyne’s success, because I was a television journalist, like her. What a wonderful story!
I want to echo some of the comments, because unfortunately, my colleague and I sometimes think alike.
I’m going to ask Ms. Valentyne the following: Everything is going well so far. You have people watching you and following you, but the algorithms are designed to make money for YouTube. It’s commercial revenue, and you could be let go at any moment. This seemingly almost blind trust in a commercial system that favours you for now . . . I’m sure you are thinking about that, because you know how things work. Actually, no one knows, because the algorithms and their profits are kept secret, but I’d like to hear from you on that.
[English]
Ms. Valentyne: I really do think that every piece of content has a home, and if you create good content, it will find its home. You’re right, I don’t really know how the algorithm works, but I do know that if people like your content, people engage in your content, people share your content, people save your content, that — [Technical difficulties].
I believe that content will find its home. I do believe that it is all about engagement, such as sharing, liking and commenting. But again, I don’t really know how the algorithm works. I’ve said it before: Wouldn’t it be great if we could all figure that out before we pass this bill?
I don’t think the algorithm is favouring me. I think that a lot of creators work seven days a week, and we really work hard on content. I’ve studied it. It’s not like I get up in the morning and I just sit around and then I’ll just say something funny on social media. I do research. I work well over eight hours in a day, and I think it will show with your content. If you produce good content, you will find an audience and your numbers will grow.
Senator Miville-Dechêne: You’re not afraid that the audience will get tired of it at some point?
Ms. Valentyne: I think so. I do think that some people will get tired of it, just like they get tired of television shows. How many times have you watched a television show and you’re in, you’re invested. “This is Us” is a great example. I lasted two seasons and then I just stopped watching it.
Everybody gets to the point where they get a bit bored, even in relationships. Sometimes you get a bit bored, but you find something else. I had great viewers at one time. They moved on to somebody else’s content. They’re like, “I’m sick of that Jennifer Valentyne.” But then you get new followers, whether they are from Canada or from around the world. That’s just life.
So no, I’m not afraid at all. I love social media. I think it’s a great time, especially for musicians. Back in the day, Canadian bands that we loved so much, like Chalk Circle — I’m talking about maybe the smaller ones — they didn’t have success in the States. All those bands — I had no idea — couldn’t survive on just their music. They had to have full-time jobs.
Isn’t it great that we live in Canada now where we can produce music that has the potential of being heard in other countries, and musicians can actually survive? They can actually make a living, living in Canada. They don’t have to leave this country. I think it will hurt the musicians more than anyone.
Senator Manning: Thank you to our witnesses. I want to go back, if I could, to Ms. Valentyne. First of all, congratulations on your life so far. You’re doing very well.
Ms. Valentyne: Thank you.
Senator Manning: Without asking you to get into the technical aspects of writing and amending legislation, what’s the best-case scenario for you with this bill, as you see it? And what is the worst-case scenario for you, as you see it? Other witnesses are free to answer as well.
Ms. Valentyne: The worst-case scenario for every content creator is if the CRTC has control of the algorithm. I just don’t think that is fair. I don’t think it’s good for anyone. We’re all afraid of that because we want to keep growing, and I think it will prevent us from growing. I don’t think there’s anything wrong with having a worldwide audience. It keeps our artists in Canada, where they belong. The worst-case scenario is if the algorithm is controlled.
The best-case scenario is if the algorithm isn’t controlled, if it was just taken out of there altogether, because I think it gives everyone a chance to thrive. It is a level playing field.
Senator Manning: What are your options as a creator if the algorithms are controlled? What are your options to get around that or to rise above that?
Ms. Valentyne: You mean am I going to leave the country? I don’t know. I haven’t thought about it. If it’s controlled, I don’t know how it’s going to affect me or the thousands of other content creators. I think you just take one day at a time.
I think it will be very stressful for a lot of people and it’s going to cause a lot of depression with content creators here in Canada. It’s not like we’ve just been doing this for the last year. Content creators have been creating content, making money and performing in front of a worldwide audience for years. How old is YouTube? How long has YouTube been around?
Senator Manning: Do either one of the other witnesses want to comment?
Mr. Reynolds: Sure, I can quickly weigh in as well. I think the worst case is that it’s just going to muddy the waters and it’s going to make Canadian content and content creators look inferior, that they’re offering a lesser product that needs help by having an audience forced to it.
I think the idea that the bill will somehow gain control of YouTube’s or TikTok’s algorithm is laughable. I think that we won’t win. We’re not really much of a going concern for the platforms that are foreign owned, and I think we should try to play our cards better. We should try to work to our own advantages as opposed to trying to bend them to our will.
Mr. Michael: I agree. The promotion of one inherently means the demotion of another. So when we’re looking at manipulating the algorithm, the potential worst-case scenario is that we no longer have a platform to make money from. And not only that, but as an artist, to be able to perform the art that I enjoy making, not to mention I’d probably have to go and beg Bell Media’s forgiveness after all of this.
I think the best-case scenario is that we work toward finding solutions. Do I think that TikTok, YouTube, Instagram and Facebook should be paying its creators more fairly? Absolutely. Is this bill the answer? Absolutely not. This bill will potentially ruin our careers, without sounding too dramatic. Selfishly, I don’t want that to happen.
Senator Manning: Thank you very much.
Senator Dasko: It is really wonderful to have the three of you here and to listen to your stories. It’s really fascinating. I am going to stick to the topic of algorithms, which I find extremely interesting and important.
What about the fact that this bill says that the CRTC cannot tamper or give orders related to the algorithms? You’re all speaking as if they’re going to come along and change algorithms, but it does state here very clearly in the section on discoverability that:
The Commission shall not make an order under paragraph 1(e) that would require the use of a specific computer algorithm or source code.
Now, does that not give you comfort that they’re not going to do it if it says so right in the bill? Please, anybody, all of you, comment on it. What’s your take on that?
Mr. Reynolds: You are right; it clearly states they are not going to make any effort to modify the algorithm. That’s why I say it’s a bit laughable to think that they would. It’s a bit like saying, “Hey, neighbour, I’m going to come over and rearrange your furniture,” and the neighbour is locking the door. Good luck with that.
We don’t have any control over what foreign-owned companies do, and they don’t want us to have control over it. When I say it’s going to muddy the water, it’s not so much that they are going to change the algorithm. There is this notion of trying to profile Canadian content first. I have met with the platforms. I have spoken with the platforms. They basically said, “Listen, it’s going to be a global algorithm. It’s going to work as normal.”
If we have to put something else there that says this is Canadian and that’s suddenly a qualifier, that means that Canadian label becomes your first keyword, for lack of a better term, for how it’s going to be found. That will negate you for a lot of other stuff. I’m not worried about them messing with the algorithm. I’m worried about it just becoming a pain to the platforms as opposed to working with the platforms to get the maximum benefit for Canada out of it.
Ms. Valentyne: They could tell the different companies, like YouTube, to manipulate the algorithm. They don’t do it themselves, but they could request it could be done; correct?
Senator Dasko: No. The bill says the commission is not going to be able to make orders to change algorithms. It says so here.
Ms. Valentyne: But they are allowed to make rules for discoverability; correct?
Senator Dasko: Yes, but not to change the algorithm to —
Ms. Valentyne: But the only way you could make a change to discover an artist is to change the algorithm. How else are you going to make an artist discoverable?
Senator Dasko: No. There are many other ways. That is the idea, that the platforms will come up with other ways, because the commission cannot change the algorithm. I’m just looking for your response to it.
Ms. Valentyne: Why can’t they just word it in a way so it assures everyone that it will not happen?
Senator Dasko: Well, I mean, it does say so in the bill.
Mr. Michael, do you have any response to this?
Ms. Valentyne: I think if they took out “discoverability.”
Mr. Michael: Exactly. I was going to chime in with the same idea.
Ms. Valentyne: If they just took out that word.
Senator Dasko: “Discoverability” is there, but they can’t change the algorithm as a means to promote discoverability.
Mr. Michael: I believe it’s open to too much interpretation, because simply by allowing the word “discoverability” in there, it’s essentially manipulating the algorithm. Whether the wording is different, it’s just a matter of fact. You are going to ask YouTube to say you have to push this video because it’s Canadian content. They’re not going to go in and rewrite the algorithm behind the scenes, but they are now pushing that Canadian content, which is, therefore, manipulating the algorithm.
We’re comparing apples to apples here, unfortunately. It’s the same thing. The wording is manipulative, if I can be so blunt. That’s why I can’t stress enough that the CRTC doesn’t need to be involved. The bill doesn’t need to involve social media.
Also, if we’re talking about algorithms, Netflix and Disney have an algorithm. If you and I were sitting beside each other and opened up our Netflix, our feed is completely different.
Senator Dasko: Absolutely. You have your list and they have some crazy list for me.
Mr. Michael: Exactly. In essence, we need to separate these two businesses, because they really are different. But when you’re asking a company — whether it’s Netflix or TikTok — to push discoverability, you are manipulating the algorithm.
Senator Dasko: So you don’t believe there are other ways to measure discoverability, even though the bill says that algorithms are not to be changed?
Mr. Michael: I don’t. I don’t necessarily know if — I’m trying to be as respectful as possible to everyone involved in writing the bill, and I don’t think —
The Chair: And I have to respectfully interrupt. We’re way over the allotted time.
Senator Sorensen: Thank you very much. This panel has been super interesting and engaging. It’s like you’re entertainers or something. If your followers go up tonight, you can thank all the people watching SenVu. It’s a well-viewed station.
Bill C-11 is attempting to update an existing act, after 30 years with no change, to address a current situation. The challenge is also attempting to create legislation for the future. Of course, none of us know what that is going to look like.
I’m going to ask my question to Mr. Reynolds, mainly because he gave a shout-out to my hometown of Banff.
Mr. Reynolds, in a meeting I had with you, you elaborated to me about your son’s perspective on Bill C-11 and perhaps explained his age and that he is also a creator. I know he is not here with you, but could you comment a little on his thoughts as a young creator?
Mr. Reynolds: Certainly. His name is Gregor Reynolds. He is actually watching on SenVu right now. But he already follows me, so that’s worthless.
He is a very successful social media creator on his own. He does his own brand deals. He has a very large following, over half a million followers on TikTok. He has been doing it since he was 11. He’s been very passionate about this notion.
One of the things we have found, and that he has found, is that we’re already at a disadvantage being in Canada because things come to America first. Monetization comes to America first. TikTok Pulse, which is the new ad rev-share, which happened today, is in America first. His peers, who he knows and has worked with before in America, are going to benefit from this, while he waits until it eventually drains down to Canada.
He has said to me, “If this happens and it messes up what I’m doing, maybe I’ll just leave. Maybe I’ll just get out of Canada. Maybe I’ll go to L.A. and I’ll just stay and work down there instead.”
That’s a shame. First of all, as his father, I don’t want him to go that far away because it’s expensive to visit, though I like L.A. I would rather that he and other creators of his age group — he is 20 years old — stayed in Canada and created amazing Canadian content that they really wanted to do.
I think he is concerned that Canada is not really much of a concern for the platforms as it is currently, and becoming a pain in the behind is not going to help that; it’s not going to speed things up. We have talked about this many times. My wife is sick of hearing about Bill C-11. We both decided it would be much better for the government to work with the platforms to say, “You know what, Canada should move up on the spreadsheet. It should be up on the top of the spreadsheet.” So when you get monetization on TikTok, Facebook, Twitter or whatever for the U.S., it should be happening in Canada. There should be a CUSMA for that, or USMCA. There should be that free trade aspect to it. That would be an incredible boon to Canadian content creators in the industry.
Senator Quinn: I want to briefly come back to the question of algorithms and whether they can be changed and what the act says and doesn’t say.
Earlier we talked about having clarity in the bill. I’m trying to distinguish what each of these categories means. The CRTC, as I understand it, can issue orders and directives, and they can create regulations. What it says in the act is “orders.”
Would it be more comforting to add the words “orders, directives and regulations,” if it was to stay in? Would that bring greater clarity to that particular area? Any of the witnesses can answer.
Ms. Valentyne: I think we all want it taken out.
Senator Quinn: But if it can’t be taken out or isn’t successful in being taken out, would the thing that I proposed bring greater certainty for you?
Mr. Reynolds: To me? Possibly, I think. I like the idea of being much clearer in the language as to saying this is just a no‑go area. I think for the platforms, maybe. I can’t speak for them. But I don’t know if that’s necessarily the main issue. That’s the worst-case scenario.
I think looking at 4.2 is a case of, well, this gets a bit sketchy here and it’s foggy and not very clear. But I think that language like that wouldn’t hurt. I think the bill has good intentions, but it just needs to be amended.
Mr. Michael: I agree with Stewart. I think if you are going to add that wording, it could help. But at the same time, if you are basically writing a bill that says the CRTC can’t have any control over this stuff, then why bother having that as a part of the bill at all? Take it completely out.
Ms. Valentyne: I agree.
Senator Quinn: Thank you.
The Chair: On second round, my concern is consistent with that of the witnesses.
Despite some of my colleagues, I continue to insist that there will be no algorithm manipulation. There are a couple of red flags for me. We have had the CRTC chair before this very committee state clearly, publicly, that this bill gives them the authority to drive algorithms and force platforms to manipulate algorithms to bring out a certain outcome. That’s problem number one. Problem number two, the sponsor of this bill, my colleague Senator Dawson — in his speech in the chamber — said that it does have that capacity.
At the end of the day, if we’re having this debate, it’s a debate about protecting Canadian culture from streamers; the only way to do it is to drive algorithms. That is a concern I share, and I hope some of my colleagues share it as well. That was more of a statement.
In light of the questions you got from a couple of my colleagues here tonight, I’ll ask the question from a different perspective.
If these international platforms, these international corporations that are profit-driven, as my colleagues say, are creating algorithms to create profits, they can only create profits if they have great content from content providers like yourselves. If they are making money, it’s because you are making money. That relationship is symbiotic.
We have created millions of jobs, it seems, tons of revenue for the Treasury Board of this country. People like yourselves are successful, paying into the Canadian film legacy fund, for example, with your taxes that you have no access to. If these platforms had not existed, legacy broadcasters in this country, what opportunities would they have provided for the three of you in 2022?
Mr. Michael: Not much, not much. I am a member of ACTRA. I actually had to turn down three non-union jobs this year because the union wouldn’t let me do it. If I count those three jobs, I would have had zero income this year from legacy media.
The Chair: Does anybody else want to add to that? Not that I like picking on legacy broadcasters or anything.
Ms. Valentyne: For me, I have been very straightforward. I do believe that I have aged out. Age doesn’t matter on any of these platforms. If you are watching TikTok, you will see creators who are in their seventies, in their eighties and in their nineties creating with millions of followers. The followers are all over the map. It’s a beautiful thing to see.
I was watching one woman on one of the social platforms, and she was crying. It’s a woman who was in her sixties. She said her whole life she wanted to be an actor. She wanted to be a comedian. Now these platforms are giving her the chance. She thought it was over. She thought it was too late. With social media, it’s not too late for anyone. There is no competition. There are two ways to succeed in life. You could work hard or tear down your competition. Most of these creators are choosing to work hard. There is no competition. Everyone is equal.
The Chair: Thank you. The last word goes to Senator Simons on second round.
Senator Simons: Thank you very much. I wanted to talk to Mr. Michael about intellectual property. This is a concern that we have heard raised on both sides, about the definition of Canadian content, who should own the intellectual property.
I’m wondering, based on your experience with Crave, with conventional broadcasting, how important is it, do you think, for Canadian creators and producers to own their IP?
Mr. Michael: It’s impossible. No one is going to do it. No one is going to give it to you. You know, I have had two full specials filmed in Canada. I don’t own any of the intellectual property. That’s all owned by Bell Media.
My last special, the one that is streaming on Crave, I spent five years touring and writing that show, and time away from my family to create that piece. If I want to post a clip of it from TikTok, I have to beg Just for Laughs and Bell Media for permission. Most of the time I’m told, “no.”
Then I have to go and do that piece in my living room directly to the camera, post it and watch millions of people enjoy it. After that, I have to put a comment saying, if you want to watch the full special, go to Crave.ca, which is geoblocked outside of Canada as well.
Senator Simons: If Netflix came to you and said we’re done with John Mulaney, we want you to do our next stand-up special —
Mr. Michael: They would never.
Senator Simons: Not never. It’s possible. If you and Stewart get offered a double bill on Netflix, and they own the intellectual property, would it still be, in your mind, Canadian content?
Mr. Michael: Yes, I do. I think I’m Canadian. I’m Canadian content. I said in my last testimony, I don’t know how much more I can say. I’m a married, gay stoner. You can’t get more Canadian. I am the leaf. That’s the thing that drives me nuts. I don’t want to ask the CRTC to prove that I’m Canadian.
Sorry about that.
The Chair: Well, you are all Canadians and we are very proud of you. Thank you for your thoughtful testimony and appearing before us today.
Colleagues, we have come to a close. We will continue our deliberations on C-11 next week. Thank you very much.
(The committee adjourned.)