THE STANDING SENATE COMMITTEE ON TRANSPORT AND COMMUNICATIONS
EVIDENCE
OTTAWA, Wednesday, October 26, 2022
The Standing Senate Committee on Transport and Communications met with videoconference this day at 6:45 p.m. [ET] to study 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.
[Translation]
The Chair: Good evening everyone.
My name is Leo Housakos, I am a senator from Quebec, and I am the Chair of the Standing Senate Committee on Transport and Communications.
[English]
I will now ask my colleagues to introduce themselves.
Senator Simons: Senator Paula Simons, Alberta, Treaty 6 territory.
[Translation]
Senator Cormier: Senator René Cormier, from New Brunswick.
Senator Gagné: Raymonde Gagné, Senator from Manitoba.
Senator Dawson: Dennis Dawson, from Quebec.
[English]
Senator Klyne: Good evening. Marty Klyne, senator from Saskatchewan, Treaty 4 territory.
Senator Tannas: Scott Tannas from Alberta.
Senator Sorensen: Karen Sorensen, senator for Alberta.
Senator Plett: Don Plett, Manitoba.
[Translation]
Senator Clement: Bernadette Clement, from Ontario.
[English]
Senator Dasko: Donna Dasko, senator for Ontario.
Senator Wallin: Pamela Wallin, senator from Saskatchewan.
The Chair: Colleagues, as a reminder, before asking and answering questions, I would like to ask members and witnesses in the room to please refrain from leaning in too close to the microphone, or remove your earpiece when doing so. That will avoid any sound feedback that could negatively impact the committee staff in the room.
[Translation]
Honourable senators, last night, Bill C-11 was referred to the Standing Senate Committee on Transport and Communications.
[English]
We are meeting today to study Bill C-11, the online streaming act. It has passed second reading, so we are in full study. We have with us our first panel. From the Canadian National Institute for the Blind we have Mr. Robert Fenton, Board Chair, via video conference; from h264, Jean-Christophe Lamontagne, President and Founder; and from ICI Television, Sam Norouzi, Senior Vice President and General Manager.
Welcome to all of you. Each witness on the panel will get five minutes for opening remarks, and then we will turn it over to question and answers with my colleagues. We will start off with the Canadian National Institute for the Blind. Mr. Fenton, you have the floor. Welcome.
Robert Fenton, Board Chair, Canadian National Institute for the Blind: Thank you, Mr. Chair. I am pleased to present today on behalf of CNIB, one of the largest groups in Canada that works with people who are blind, partially sighted and deaf-blind.
One of our mandates when dealing with these populations is to work with the rest of society to remove existing barriers and prevent the creation of new ones. Bill C-11 moves us along that journey by removing many barriers to the broadcasting system that exist today. We would like to thank the Canadian government for beginning along this road.
However, we have not gone far enough. I’m going to talk to you about a few improvements that we can make to ensure this legislation benefits people who are blind and partially sighted even more.
As you know, access to media is an important part of Canadian culture. It allows us to debate issues around the water cooler or in public forums. It allows us to discuss the latest triumphs of our favourite sports teams, and yes, it even allows us to disagree with journalists we like, respect and sometimes don’t.
At the same time, it is also important for people who are blind to be able to access information in a meaningful way so that we can participate in public discourse.
Bill C-11 opens the door for changing the scope of the CRTC’s jurisdiction in a way that is more representative and accepting of people with disabilities. But we want you to go further.
First, we need to point out that the broadcasting system needs to be more accessible. Yes, there are set-top boxes out there that talk, but they only talk after a sighted person enables them for those of us who can’t see. We need to have technology that we can make work as soon as we take it out of the box without having to resort to help from a sighted person.
Next, we need to make sure that the applications and the menus in the boxes speak to us so that we can choose the appropriate programs or access the appropriate sites we would like to access.
Third, while described video is available four hours per day on prime time, we believe there should not be exceptions for news and sports programming. There are ways that these programs can be made more accessible, and we believe that as a long-term goal, every program shown on the broadcasting system or aired on the internet through Prime, Netflix or any other services has described content.
The last significant point I want to make is that the Broadcasting Act only regulates cable regulators. We also need to make sure we understand that the internet is also accessed by companies that are regulated by the Telecommunications Act. Bill C-11 needs to provide that when people are accessing the internet, there should be one common piece of legislation so that all carriers are bound by the same accessibility rules and all other rules for accessing the system.
Finally, we need to talk about accessible print content as well. As you know, the internet and technology changes rapidly, and access to information in a digital format is becoming more and more important as time goes by. As such, we need to make sure that people who are blind and partially sighted are not left behind and that they have the same opportunities to access all printed materials just like we’re asking for in terms of broadcast media. Although it is beyond the scope of Bill C-11 itself, we would urge the Senate and other areas of government to study how the CRTC’s jurisdiction could be increased to deal with the copyright issues related to print literature shown over the internet so that people who are blind and partially sighted can access this material.
In looking over the other presentations that have been made to this committee, CNIB is also quite prepared to publicly support the submissions made by the AEBC. That group represents the views of CNIB as far as described video is concerned, and we are happy to endorse those submissions. Those are my comments subject to any questions from the Senate. Thank you very much.
The Chair: Thank you, Mr. Fenton.
[Translation]
Jean-Christophe J. Lamontagne, President and Founder, h264: Thank you very much. Good evening everyone. Thank you for giving me the opportunity to speak to you this evening. I am the president and founder of h264. Our company was founded in 2015, is based in Montreal and is involved in distribution and aggregation.
I would like to take a few moments to explain how aggregation works, because it is intrinsically linked to the emergence of digital platforms. In the early 2000s, when the major platforms launched iTunes Store and all the others, the web giants understood the importance of issuing licences to certain companies that would act as intermediaries between the digital platforms and the rights holders — whether they are producers, distributors or others — just to simplify the process of putting content on line and to ensure that what was put on line was appropriate in terms of content, but above all in terms of technical standards.
When we launched the company seven years ago, we realized that there were very few and actually just a handful of Canadian aggregators, and that is why we decided to become aggregators. We obtained the various licences and since 2019, we have been acting as the so-called gatekeeper between mainly independent rights holders. I will talk about independent producers and distributors in this niche market. We serve as the gatekeeper between them and digital platforms. We work mainly with platforms such as Apple, Amazon, Google and Netflix.
Upon becoming an aggregator, we recognized that discoverability is of critical importance not just for the film and audiovisual industry, but also for the economic development of our activities. Why? Because it is a real issue for us.
Just imagine having access to all Quebec films and making them available on every digital platform. If at the end of the year we were told that we had about a dozen views, all that effort would have been a waste of time. The notion of discoverability presented itself as being key to the development of our activities.
We therefore attended many conferences, panels and webinars on discoverability. We attempted to develop and understand how to apply it in our business, to see how this practice works within the industry so we could take measures to influence the infamous algorithms of digital platforms and help foster optimal placement.
For example, when you go to a bookstore such as Chapters or Renaud Bray, it is much more likely that you will purchase a book from the display at the entrance or in the store’s “bestsellers” section than one found in the back aisles in sections A through Z. That is exactly what our industry is facing. It is no longer about simply putting things online and having a web presence. What we are really faced with is the problem of improving content and discoverability of Canadian and francophone content on the web.
We developed an expertise to address the following question: On Monday morning, what do I, my team and our industry do to ensure discoverability? We tried to understand how algorithms work and how we could improve placement of our content on the web. Naturally, maintaining close ties with platforms plays a vital role in the positioning of our content on these platforms.
We work with these platforms not just in Canada, but internationally as well. That is another challenge we are facing, the export of our content. Discoverability of content is an even bigger challenge abroad. We also have opportunities to meet these stakeholders at markets and festivals, and we often notice a keen interest in Canadian and francophone content. Unfortunately, this often does not turn into anything concrete.
Year after year, Quebec films account for approximately 10% of total earnings. Our content does not represent 10% of all films and television series on the web, and that is the challenge for the sustainability of our culture.
I encourage the committee to examine the different recommendations that are made, but I fundamentally believe that digital platforms must fall under the legislation; the platforms must be invited to participate in and to finance the production of Canadian content; we must ensure a minimum of discoverability both with the impenetrable algorithms to which we do not have access and also by equipping the Canadian industry to develop this expertise in discoverability; and, finally, we must explore the option of quotas, which have been implemented in France and have protected the place of French film on the platforms.
I am here this evening as a digital distributor and aggregator. I thank you for giving me this opportunity and would be pleased to answer your questions.
The Chair: Thank you very much, Mr. Lamontagne. Mr. Norouzi, you have the floor.
Sam Norouzi, Senior Vice President and General Manager, ICI Télévision: Good evening Chair and honourable senators. Thank you for inviting me to talk to you about Bill C-11.
My name is Sam Norouzi, and I am here this evening representing ICI Télévision.
ICI is an independent multiethnic television station based in Montreal that offers original programming in 15 languages and serves more than 18 ethnic communities. ICI is available on all basic cable and satellite services, in addition to being available on Hertzian waves in Greater Montreal.
Since September 1, 2017, in partnership with OMNI Regional, ICI has been available on all basic services across Quebec. For many ethnic communities, ICI Télévision is the only source of locally developed television programs available in their language at little or no cost.
Our programs are developed by a network of independent local producers who have deep ties to their communities and dozens of years of experience in the production of quality television shows.
[English]
I am here to speak to a critical gap in Bill C-11 that places Canadian public interest TV at grave risk unless that gap is fixed. You have heard from some of these channels, such as APTN and AMI-tv. I’ve been following your deliberations carefully, and I’d like to focus on three areas where some clarification may be helpful. The first is the issue of mandatory carriage and the CRTC’s ability to set terms and conditions, the second is who could be subject to these terms and conditions, and the third area is the issue of trade risk with the United States.
On the issue of mandatory carriage, you’ve heard how the CRTC plays an essential role in supporting Canadian public interest TV. This support takes the form of 9(1)(h) orders that require cable and satellite providers to carry certain channels — that’s the mandatory carriage part. These 9(1)(h) orders also set terms and conditions, which cover items like payment. How these terms and conditions are set is key.
Bill C-11 includes mandatory carriage, but it doesn’t allow the CRTC to set terms and conditions for online streaming. Instead, issues like payment will be left to good-faith negotiations. Public interest TV is a public service for Canadians. It’s not commercial programming. Global web giants like Amazon, Google and Apple know they won’t make money off our content. They have no real incentive to negotiate. And we can’t compete with their legal departments. They could draw out these negotiations until we have to shut down our operations. That’s why we need the CRTC as a backstop. When CRTC chair Ian Scott appeared before you, he recommended that you amend Bill C-11 so the CRTC can set these terms and conditions. We strongly urge you to make that amendment.
The second issue I want to highlight is who could be covered by these terms and conditions. This change isn’t just required to bring international streaming services into the fold. Canadian broadcast distribution undertakings are moving their services online, where they will be subject to fewer rules under Bill C-11. We need this amendment to Bill C-11 so the CRTC can continue to set terms and conditions for Canadian broadcaster distribution undertakings.
The third issue I want to address is the idea that allowing the CRTC to set terms and conditions will increase Canada’s trade risk with the U.S. We believe this issue is a red herring. There is nothing in CUSMA that prevents you from amending Bill C-11 to allow the CRTC to set terms and conditions. There is no clear trade risk with the amendment. But if you don’t amend the bill, you are risking the future of Canadian public interest TV.
Allowing the CRTC to set terms and conditions is needed to help APTN continue to tell Indigenous stories with Indigenous voices. It’s needed to help CPAC keep its lights on so that Canadians can follow the work of the Senate and watch committee meetings just like this one. It’s needed by AMI-tv to provide accessible programming to Canadians living with disabilities and it’s needed to help the racialized and marginalized communities that rely on ICI Television.
[Translation]
Thank you. I would be pleased to answer your questions.
[English]
The Chair: My question is to you, Mr. Norouzi. Welcome to our committee. Thank you for your testimony. If I understand correctly, you support what the bill is trying to do, but you’re basically saying it’s not really getting it done.
Mr. Norouzi: We support wholeheartedly Bill C-11, but there is an important gap for public interest television such as ourselves, and we are bringing this gap forward so it could be addressed through an amendment and it could secure a future for us.
The Chair: Now, the terms and conditions that you’re talking about — and I’m slowly getting up to speed about the Broadcasting Act, the study has helped a lot — are already within the purview of the CRTC, correct?
Mr. Norouzi: Yes.
The Chair: They determine on what dial your programming lands, correct?
Mr. Norouzi: Not exactly what dial, but it mandates the — I hesitate to call them cable or satellite companies, because essentially nothing is through cable any more. I’m from Quebec so the two big players are Bell and Vidéotron. Their services, essentially, are IP based through the internet. So Bell Fibe and Vidéotron Helix is an internet streaming service, essentially.
Right now they do mandate these carriers to carry us and they also set terms as to a payment that is made to these channels.
The Chair: That’s the question. I am very sympathetic to your product because my late mother used to watch her Hellenic shows on your product. For that alone, I’m very empathetic. My question to you is with regard to the current terms and conditions. Is the amount of money you get paid by the cable carrier determined by the CRTC or do you negotiate that with your cable provider?
Mr. Norouzi: How it works, essentially, is when we go from the first step if you apply for a 9(1)(h) licence or any renewal of a licence in front of the CRTC, the broadcaster proposes a set fee, but it’s up to the CRTC to determine if that fee is appropriate and, if not, to change it.
The Chair: Now, how do the streamers and the new digital guys come into your product? I’m trying to understand that.
Mr. Norouzi: The effect is, as more and more people are cutting cords or cutting the cable, if you want to see it that way, and transition to online streamers, we want to be able to be available on these streamers. Also, we’re asking that the streamers pay their fair share into the Canadian system because they’re doing business here and they’re making revenues from here. We just believe that it’s fair they contribute to the Canadian broadcasting system the same way Canadian distribution undertakings do.
The other threat we’re seeing down the line, as I mentioned in my opening remarks is a lot of these Canadian broadcasting distributions have transitioned to internet-based distribution. So in the future they can say we’re a streamer now and we don’t need to abide by the rules and regulations of the CRTC that apply to conventional distributions. We’re streamers.
The Chair: Now you’re going exactly to my concern. Those cable providers, doesn’t matter if it’s Canadian Broadcasting Corporation, Radio-Canada, CTV, Bell, they’re all going digital. They seem to be going digital more and more. So if your model doesn’t transform as well, and it seems to me if you don’t make an arrangement with those streamers, wouldn’t you be left behind?
Mr. Norouzi: I think Bill C-11 right now already deals with the issue of carriage. The issue of carriage is there already. And our service is already available digitally in terms of ICI Television you can stream it anywhere on our website. The feed is there, it is digital. It’s available. The only issue we’re having is the determination of the conditions under which we can be distributed, and also to be available, to be discoverable and also have these streaming services pay their fair share into the Canadian system.
The Chair: Now that you are streaming is your revenue up because of streaming?
Mr. Norouzi: No.
The Chair: Why wouldn’t that be? That’s essentially my last question.
Mr. Norouzi: We’re essentially a free service. Whether it’s streaming online — that is the key. Our service is meant to be accessible as much as possible. In the greater Montreal area, people don’t even need to be subscribed to cable. They can simply have a digital antenna and they can get our signal for free.
[Translation]
Senator Miville-Dechêne: I would like to thank our witnesses for their testimony. My question is for Mr. Lamontagne, because this is the first time I have heard about Canadian aggregators. I find it very interesting.
Mr. Lamontagne, could you elaborate please. You mentioned that as an aggregator you speak with platforms to ensure that there is a certain level of discoverability through algorithms, among other things. Do you have some power, are you influential? What are you able to achieve given what we know about the number of views of Canadian or Quebec films on these platforms?
Mr. Lamontagne: Thank you for your question.
Yes, we do have a certain influence. We lobby the platforms. It is important to understand the business model of the platforms.
I will digress for a moment. There are digital platforms such Apple TV, iTunes and Google Play, where the licence we and certain other companies allow us to put content on these platforms without editorial barriers because this content is consumed piecemeal. You rent or purchase a film, and there is no licence that comes between you and the platform. However, on platforms such as Netflix or Crave, you purchase a licence for a specific amount of time and the work itself is not purchased or rented.
Therefore, we have an influence on platforms known as transactional VOD, where films can be rented or purchased one at a time. Yes, lobbying and influence are required. The work we do with respect to discoverability probably has the greatest impact on the viewing of our works. If you do some research on discoverability, you will learn about the semantic web and optimization, which are pillars of discoverability. As you know, the real issue is how we consume content. We sit in front of our television or computer, we open the platform and we will probably view what is presented to us.
When we work with iTunes or AppleTV to put a film on line, we discuss with the company, by email or over the phone, the relevance of the work. That is why we became an aggregator. Before h264 became an aggregator, there were virtually no Canadian aggregators. That meant that the rights holders who wanted to put a film on line on a platform had to deal with foreign corporations. With respect to the lobbying and representation, an American company might not have the understanding required to defend content. The content would thus be in an algorithm.
In closing, I will give you another example. We put on line a documentary on André Forcier. We explained to Apple the importance of this filmmaker for our national film industry. Not only did Apple put the film on line, it created a complete section to honour André Forcier. About a dozen other Canadian films were placed in the algorithm on the home page. That is one example of the influence we can have when we have ties to the platform.
Senator Miville-Dechêne: I understand that what you talked about does not apply to platforms that buy and distribute material, such as Netflix, because it is a little different.
You stated at the very end of the presentation that France has quotas. It seems to me that the quotas exist to ensure French works are produced. Are there also quotas for what French or national works can be viewed in France?
Mr. Lamontagne: Some of the platforms we work with in Europe have told us that there are two types of quotas. There are quotas for francophone content and quotas for EU content. These are not productions but acquisitions. One of the issues concerns the fact that platforms are currently making huge investments in the creation of original content. However, right now, acquisitions of independent works are in free fall and even nonexistent.
Senator Miville-Dechêne: You are saying that there are quotas in order to have a certain number of French works on platforms such as Netflix. Is that right?
Mr. Lamontagne: Yes, that’s right. I cannot speak for Netflix, but I am talking about platforms that we have had discussions with, such as UniversCiné, and these quotas are in place right now.
Senator Miville-Dechêne: Thank you.
[English]
Senator Simons: My first question will be for Mr. Fenton.
I want to understand how the number of described video programs in the Canadian universe compares to what’s actually happening in the American streamers. I’ve had somebody suggest to me that perhaps the Americans are actually ahead of us in this. Has that been your observation?
Mr. Fenton: That has absolutely been my observation, senator. Much of the content that we see in Canadian prime-time hours on Canadian TV that’s described is actually a feed that’s picked up from the United States.
One of the issues that we run into in the described space is that multiple countries are producing the same content at the same time for their own viewers. One of the things that CNIB would like to see to reduce the amount of duplication in the system is that Canadian networks be required to obtain the rights for descriptions that are produced from other countries as well — other French or English-speaking countries — so we don’t have this duplication. Without this duplication, we may actually get access to more content.
Your observation is very valid and quite correct.
Senator Simons: Thank you. My next question is for Mr. Lamontagne and Mr. Norouzi together. I think when we began the process of understanding Bill C-11, a lot of us were thinking about services like Netflix and Disney, which show their proprietary content. What has happened, even over the course of our study of this bill, is that we’ve seen the rise in aggregating services offered by platforms like Prime and Apple, which produce some of their own content but who are also showing lots of everybody else’s content.
I would ask each of you to speak to the shift that is happening with these online aggregating services. I don’t know, Mr. Lamontagne, if you have had the same experience as Mr. Norouzi, being told that it’s a CUSMA issue to have some kind of free, fair-market carriage agreement. Because we tried. We had people from Global Affairs here to try to understand what the CUSMA issue is, and I still, despite many attempts, do not quite understand what it is that they think is in violation.
Mr. Lamontagne: Thank you for your question. I’m not sure if I’m aware of the CUSMA effect. I’m not sure I heard correctly. Maybe you can explain more about this.
Senator Simons: When we’ve listened to proposals to have some kind of requirement for American aggregators to carry, whether it’s in the public interest content — like ICI or OMNI or APTN, or what you’re talking about, where you have French-language stuff where you’re acting as an agent to get sold to these aggregating services — the issue seems to be a concern that we would be creating some sort of unfair trade advantage for Canada, I guess. But my staff had another meeting with Heritage officials this week, and we still can’t get clarity on what exactly we think the CUSMA friction point is.
Mr. Lamontagne: That’s a good question. I think one of the issues is that things are evolving at such a high and fast pace. First, the emergence of new platforms and the death of others; there are new ones coming up every month. There are platforms merging or dying every month. So that’s an issue.
The second issue is their production strategy or acquisition strategy. A couple of years ago, it was only acquisition. Then they moved to production only. Then they realized that it was too expensive and now they’ve gone back to acquisition. Now also they are moving to a free VOD model, fast channels.
They’re all trying to figure out what works, and I don’t think anybody has found the right spot for it. What I can say to my experience is that every platform I’ve met was interested in Canadian content, but I haven’t seen any results.
I’ll give you an example. Last year, Amazon decided to stop acquiring documentaries and short fictions. That’s kind of an example where all documentaries we had were simultaneously removed all of a sudden. They still own everything, and they choose what’s going on on the platform, and it has a difficult effect, especially on independent producers and distributors to try to keep up with the pace.
What I’ll add to finish is that it’s also more and more difficult to get ahold of them and try to have at least the opportunity not to have your film on the platform, but just to have a channel of communication. Because what the pandemic has caused is that people were now looking for a way to make money. Some international sales agents were not selling to distributors. They had to sell to platforms. For smaller and independent players, it’s almost impossible to reach out to these platforms. The effect is they do acquire some content, but it’s a very high-profile content. The independent content that could reach millions of people is not getting onto the platform.
I’m not sure if I fully answered your question, but that would be to my experience.
Senator Simons: That’s a good chunk of it. Mr. Norouzi might be able to take us home.
Mr. Norouzi: If I could address CUSMA first, senator, same as you, I don’t know what the issue is. I know it was first brought up by the previous parliamentary secretary back when this was Bill C-10 without really explaining what the issue was.
I know that my colleagues at CPAC have commissioned a legal opinion from a major law firm in Canada that didn’t find an issue. So this issue keeps coming up that they’re saying there’s trade barriers, CUSMA, but nobody seems to want to explain what it is, and when we’ve come up with explanations that there isn’t any, we don’t go beyond that. We really don’t know what the issue is.
We firmly believe there is no issue. But for some reason, it just keeps coming back up.
Second, when you refer to online streamers, we were very specific in the amendment that we’re bringing forward that it’s not a blanket amendment that universally covers all streamers. For example, you mentioned Disney and Netflix. Disney and Netflix would not be affected by this streamer bit. This only affects what it calls “online broadcast undertakings” that provide the services of other broadcast undertakings. It has nothing to do with Netflix or Disney. I hope that answers your question.
Senator Simons: It’s the aggregators that are functioning in quite a different model than we had when we started on Bill C-10 three or four years ago. Thank you.
Senator Wallin: I won’t get into the trade issue, but I think it has to do with subjecting foreign-based companies to domestic laws, because we’ve seen this fight play out on a lot of issues.
I have a quick question for Mr. Norouzi. The chair of the CRTC told us here in this committee that he will require streamers to make you discoverable. So really, what we’re talking about is the money component. You want money mandated into your pockets by the CRTC from the streamers.
Mr. Norouzi: Yes.
Senator Wallin: How would you judge it? Because it’s not the same as the CBC or CTV’s contribution.
Mr. Norouzi: It’s not the same. Obviously, streamers have different business plans, so it’s not a blanket coverage. What we’re essentially asking is that the CRTC have the ability to mandate that, for the CRTC to determine that your business model is X, Y and Z, and this is what we find appropriate for you to be able to do.
Senator Wallin: That’s almost a separate issue from Bill C-11. They can require your carriage, but forcing streamers to contribute to funds wouldn’t happen regardless.
Mr. Norouzi: I don’t like the word “forcing.”
Senator Wallin: Asking.
Mr. Norouzi: It’s requiring streamers to play by the rules that apply to broadcasting undertakings in Canada. They do business in Canada, they get revenues in Canada. In the same way, for example, Bell or Vidéotron contribute to the broadcasting system, they should do the same.
Senator Wallin: I’ve got it. The money piece is what you’re concerned about.
Mr. Norouzi: Exactly.
Senator Wallin: Then my next question is for Mr. Lamontagne. I think part of the confusion here is that we’re talking about aggregators and platforms. You call yourself an aggregator, but you’re not a platform. You are kind of a service for content providers to negotiate with platforms. Is that correct?
Mr. Lamontagne: Exactly. The role of an aggregator, as we act, is acting as a gatekeeper between the platforms and the content owners, simply to simplify the process of uploading.
Senator Wallin: You referred to some of the platforms as aggregators too, right? That’s where the language gets confusing.
There are different kinds of platforms. Obviously, when you’re negotiating with Netflix, that’s very different than having a conversation with YouTube. These are two very different creatures.
Mr. Lamontagne: Yes, 100%. Depending on the business model of the platform, the way we’re going to negotiate and interact with the platform is going to be very different. If a platform has a TVOD model, we’re going to be delivering the content without having to negotiate because they don’t acquire the content. And platforms that we call SVOD, which are subscription-based video-on-demand, such as Netflix and Crave, we pitch the content to them, but then it’s their prerogative to acquire or not acquire the content.
Senator Wallin: But for any of us who have been content creators, that’s what we’ve always done. What do you want the government role to be in that discussion you’re having with platforms of all different kinds to get you a better price?
Mr. Lamontagne: I don’t think it’s a question of price. I think there are three main things. First, there are some platforms that do not work directly with Canadian aggregators or content owners, or too few.
For instance, we tried to get a hold of Google and they literally refused to work with us and referred to only American companies. I explained earlier the importance of having Canadian representatives to defend the content and try to lobby and make sure we get good placement on the platforms. So having Canadian aggregators —
Senator Wallin: That’s the distinction I’m looking for. There’s a different issue about placement on the platforms. You want discoverability and you want your content pushed forward so that people can more easily find it, but that’s separate from the money issue.
Mr. Lamontagne: Exactly. That’s the first issue. And accessibility to those platforms. It’s not just a question of placement, it’s having the ability to place content.
Senator Wallin: Okay, but how do you want the government to make your negotiations with Google go better?
Mr. Lamontagne: Being able to communicate with them. They refuse to work with most Canadian companies.
Senator Wallin: But what law? What would you want government to do, phone Google and say, “You must talk to these people and the 500 or 5 million other people in Canada who are content creators?”
Mr. Lamontagne: No, I don’t think it’s a question of phoning them. I think it’s a question of making sure they are able to deliver content to them. I’m not a lawmaker, unfortunately, but I think there are ways to facilitate having Canadian companies that can deliver to Google. There are too few. Google is the second-biggest transactional platform in Canada, so I think that would be quite important.
The second part of your question was in terms of the negotiation. I think it’s very difficult to sign licences with big platforms. I don’t know if quotas are the sole solution, but what we definitely see is that most of the deals are signed with really big distributors. Independent content owners, which represent a big part of the creators of this country, are not represented on the platforms, unfortunately, because none of them have access to these streamers.
Senator Wallin: But if you want content on YouTube and if you want French-language content, you can just put it up.
Mr. Lamontagne: Yes and no. You can put it up if you want for free, but the YouTube transactional part of it, where you can rent or buy, you can’t do that yourself. You need to become a Google-approved aggregator.
Senator Wallin: I’m just trying to figure out what exactly you think this bill or some other bill would do that would force companies to negotiate over content. I don’t see how that would happen. Platforms get to choose, not YouTube, but the other platforms get to choose what they put up, what they buy, what they invest in and what they show. That’s their model.
Mr. Lamontagne: Yes, it is. I think having a minimum of representation on the platform — quotas — would be a solution. Asking Google to acquire Canadian content through Canadian companies would be the way to go.
Senator Wallin: Thank you.
[Translation]
Senator Cormier: Thank you to our three witnesses, but my questions will be for Mr. Lamontagne.
I’d like to know more about your business model. I understand that there are different types of platforms, but I thought your role was to act as an intermediary between these platforms and artists, creators, and producers.
I’d like to know more about how the business model works, although there may be more than one, but how do artists and producers earn money through the work that you do? How do you as an aggregator finance what you do? What do the platforms contribute? What is this business model? Can you explain things a bit more clearly?
Not only that, but I’m particularly concerned about the creators who develop the content, and I’d also like to hear what you have to say about intellectual property in an aggregating services context. Are there any intellectual property issues?
Mr. Lamontagne: Thank you for your question, senator.
The way the business model works, for us and for the creators, is very simple. Our business model involves a commission or a percentage on sales and rentals for transactional platforms, in addition to a commission on comprehensive licences for platforms that operate on a subscription basis.
That’s more or less how we get paid, and then the highest percentage, the largest amount, goes to those who hold the rights, whether producers, distributors, or sometimes even the creators themselves.
Senator Cormier: If we’re talking about percentages, can you tell me approximately what percentage it represents in the chain?
Mr. Lamontagne: For transactional platforms, it’s approximately 20% for the aggregator and 80% for rights holders; for SVOD platform licences, it’s approximately 30% for the aggregator and 70% for those who own the rights.
Senator Cormier: What intellectual property issues do you see coming up in these transactions?
Mr. Lamontagne: There are none at all, because we don’t acquire rights. So the rights remain the property of the producer or distributor, and we act as the intermediary whose role is to handle representation with platforms, meaning that rights and intellectual property remain with the creators.
Now for geo-location, it’s very easy to do some geo-blocking, depending on the rights and territories available. Sometimes a creator has only Canadian rights, and sometimes world rights. What we do then is negotiate with the platform to comply with the rights available in order to ensure that distribution of the work has been geo-blocked in locations where the rights holders don’t own the rights.
Senator Cormier: You said at the beginning that you worked with the platform to gain a better understanding of how the algorithms worked, for discoverability purposes.
What in fact might you have discovered in your research with these platforms? Is there anything we don’t know about here around this table? Can you tell us how the algorithms are managed, for example, and whether that could promote discoverability? Do you have anything you can tell us about that?
Mr. Lamontagne: Of course. I’ll limit myself to 30 seconds, because I could go on for a couple of hours.
The first thing I would say about algorithms is that they are hermetic. So we can’t understand exactly what the mechanisms underlying the Netflix, Disney and Apple algorithms are. They differ from platform to platform. You can try to understand and study them but you can’t get access.
What we do know, on the other hand, is that these algorithms draw data from public platforms. For example with Amazon, we don’t entirely know the comings and goings of their algorithms, but their metadata, which fuels the robot that generates the algorithm, draws its information from databases like Wikidata, Wikipedia and IMDb. There is one thing that we, the creators, producers, distributors and aggregators, can do to promote the discoverability of our content, and that is to populate the digital databases used by the robots to generate their algorithms. That’s one example of how we work in terms of discoverability.
Another very straightforward example has to do with attempts to study the impact of metadata. We’re talking about metadata and film-related information. One of the issues for Quebec films is that the word “Quebec” is not an item of metadata recognized by the platforms, because Quebec is not a country. So searching for Quebec films on platforms is an issue, and you get around by include the word “Quebec” in the synopsis. That means that someone on Amazon who is searching for Quebec films will be able to find it. I have dozens of examples like that. We’re trying to understand.
Senator Cormier: Hence the importance of Canadian aggregators in the system, as you were saying.
Thank you very much Mr. Lamontagne, for your answers.
[English]
Senator Dasko: Actually, Senator Cormier asked both of the questions I wanted to ask you. I do want to probe the algorithm question more. You said you could talk for hours, so I’m going to ask you to talk about for four minutes on the topic.
You said that you spent a great deal of your time trying to understand how they work. So I want you to talk a little bit more about that, in particular, how they might differ from each other. Like, for example, Google Play, Apple, Disney and so on. In all the work that you’ve done on algorithms, have you found differences between the platforms? And please tell us what you found. I’m really interested in this.
Mr. Lamontagne: We found many things. First and foremost, our work was mostly to understand how we can affect them. So I couldn’t, for instance, make a presentation about how the Netflix algorithm works and how the Disney algorithm works. What we try to do is what we can do with the resources that we have to try to influence these kinds of algorithms.
One of the things we found was what I previously mentioned was to really be mindful of all the data that you’re going to be putting online about your film, whether it’s on the official website, whether it’s on Google, Wikidata, Wikipedia, IMDB and all those platforms. They do consist of the bases of the algorithms.
What we did is we took different films. For instance, we took one film and put it online in Canada and we put the same film online in France. We activated our action in discoverability to try to increase the reference on the platforms and on Google and then we compared the results. What we discovered is that only the database in which you enter the data has some sort of effect, but also the media with which you work, so the external media that gives out reviews will affect the reference, not only in the algorithms but precisely on the search engines.
One of the conclusions we came to is that you can influence them. You can increase your chance of being included in that algorithm, but the reality is the biggest tool that we have to influence the algorithm is, again, lobbying and giving out a phone call to the platform.
Unfortunately, most of the algorithms are based on the genre. So if you do your work and some of the good metadata and you sign a deal with the platform, you most likely will have a good placement. But to ensure that good placement, you need to have a channel of communication with the platforms. The biggest issue that we’re facing right now that the direct line of communication with big streamers is extremely difficult to maintain, even for us as aggregators.
Senator Dasko: This is interesting. You said earlier the algorithms were airtight and now you’re saying you can influence them.
Mr. Lamontagne: In some way. To make sure that if you want your film to be part of the algorithm, there is action you can put in place to increase your chance, but can I explain how they work? That’s the difference. But there are still actions you can do to increase your chance of being well proposed by the algorithms. But you still can’t understand them. It’s like a secret these companies have and keep close to their hearts and will not divulge, unfortunately.
Senator Dasko: I’ve been trying to study the Netflix algorithm, and one of the things they say is that they don’t use any demographic data. Have you been able to determine if others use demographic data, like age, gender and so on?
Mr. Lamontagne: I was not able to obtain that information, unfortunately.
Senator Dasko: Thank you.
Senator Manning: Thank you to our witnesses. My question is for Mr. Lamontagne and any other witness who would like to answer.
We keep hearing that foreign streamers like Netflix aren’t paying their fair share, especially for francophone productions in Canada, with some putting that number as low as 0.3%. However, in their submission to our committee a while ago, Netflix told us that since 2017, they have invested more than $3.5 billion in Canada for films. And “Jusqu’au déclin” was shot in the Laurentians with an all Quebec cast and crew that resulted in $5.8 million direct investment into the province of Quebec. The film was apparently viewed by 21 million subscribers within the first four weeks of its release to global audiences.
How do you see that investment in French-language films improving when Bill C-11 is enacted and becomes law?
Mr. Lamontagne: Thank you for your question. I am hoping to see more and more of these productions. The film you gave out is a great example. The streamers are often seen as the big menace and can contribute to a more diverse production in Canada. I’m hoping to see more of these productions, which represent an alternative to financing content, so I’m welcoming a new Bill C-11 that will enforce this and give out incentives to platforms to continue to do so.
The public and the audience are connecting with these kinds of content, but I would still put a warning on the importance of producing original content, but there’s also a similar importance to acquiring local content that has been produced elsewhere, because the content that the streamers are producing are made for a really specific audience and have a certain genre and signature to it.
If you look at different series, they have certain signatures that are similar, but to have content that is made and created by Canadian creators, you need to have a balance and acquire independent content. Otherwise, you look at documentaries and smaller-budget films, which presents the bread and butter of our culture. If you look at festivals across the world, it is independent content that is one of the biggest sources of pride of Quebec and Canada. Unfortunately, not all this content is ending up on these platforms.
This idea of producing content is important, but let’s not forget the sequencing of content. Maybe for this content that we’re producing and putting out in theatres and then going to CBC for television or broadcast, is there an opportunity for this content to also then end up on the platform? I think this needs to increase.
I mentioned earlier that the box office in Quebec is 10% of Quebec films mostly every year, and that 10% is not what we’re seeing on the platform. You cannot obtain that 10% by just producing original content. You need to acquire more independent content. That applies not only to Netflix, but all the big streamers. I think that’s going to have a huge impact on our Canadian industry.
Senator Manning: I know that much of our discussion here is trying to get Canadian content but also French-language content. It seems to be a concern of many of the people around the table here. I’m just trying to ascertain what level of investment would you conclude and agree that we have reached a level of sufficient French-language content? How do we measure that? You mentioned 10% a few moments ago. I’m wondering, is there a percentage? Is there a dollar value? How do we measure that to reach a sufficient level that would be at least comfortable to you and to others that are involved?
Mr. Lamontagne: That’s a really good question. In terms of how much needs to be invested for original content, I’m not an expert in producing, so I won’t be able to give a dollar figure.
I think one of the biggest issues is just the number of titles. If you look at how many feature films are being produced in the French language, I think a ratio of those feature films that are produced — I think we’re roughly talking about 30 each year — at least 25 or 30% of that content can end up on the big streamers. These are rough numbers, and I think I would work around making sure that our production ends up on a big platform, but I’m not able to provide a dollar figure, unfortunately. We do not sign deals with Netflix yet, so we don’t know the extent of how much they’re paying for certain content.
Senator Clement: I have two questions. One is for Mr. Fenton. We speak increasingly of gender-based analysis and running legislation through that lens. I wonder if you could comment on whether we have that type of analysis for accessibility and running Bill C-11 through that kind of lens.
[Translation]
My second question is for Mr. Lamontagne. Your testimony is staggering. As for the algorithms, we’re told that inserting Canadian content would not ruin, but rather affect the experience of consumers in their viewing area.
What have you seen? You’ve been lobbying on behalf of Canadian content. When content is placed by the platforms, do people like that? Are the trends positive or is it true that Canadians prefer not to be forced to watch Canadian content?
[English]
Mr. Fenton: Thank you, senator. I have to tell you that there is no formal accessibility lens to run legislation through. This issue has been talked about since 1999 or 2000 when Minister Bennett was in charge of the office for persons with disabilities, but it hasn’t gotten off the ground since then.
We had hoped that the Accessible Canada Act could be used to some extent in this way to provide some guidance to legislative drafters and government departments around rules of accessibility, but that challenge has not been picked up yet. If the Senate wanted to make a recommendation that this accessibility lens be explored, we would enthusiastically support you, because this is long overdue.
Senator Clement: Bam. Thank you, Mr. Fenton.
[Translation]
Mr. Lamontagne?
Mr. Lamontagne: Thank you for your question. I’m not at all in agreement with what the person you cited said; I believe quite the opposite. The public needs to see Canadian content because it will improve their experience.
I would say that the past few years have shown that the public is more intelligent than we think. If a film like Parasite can win the best film Oscar and the public is willing to view subtitled content, it’s because people have access to such a diversity of content that the provenance, even when subtitled, is not a variable in the equation. The Canadian public is not necessarily searching for Canadian content.
Is there anyone here who ever sat in front of their television set saying that they wanted to find Canadian content to watch? That’s not how we choose our content. What we choose is the particular emotion we wish to experience, and something may have been recommended to us by friends, or we may have read about it in the media and acquired a desire to view this or that content.
When I go onto a platform, I need to have that option. It’s true for Canadians and it’s true in terms of international exports. We have to stop thinking that Canadian content is only watched by people who are looking for Canadian content. If the content is good, it’s going to be watched, no matter where it was produced.
The issue is to ensure that there is a basic level of content representation, and I’m convinced that would improve the experience of not only Canadians, but all subscribers around the world.
We were talking earlier about the movie Jusqu’au déclin. It’s a Quebec film that was subtitled, and watched in dozens and dozens of countries with a viewership of millions. I think that needs to be used as an example, and that we shouldn’t be afraid of promoting our content.
Senator Clement: Thank you.
[English]
Senator Wallin: I just wanted to come back to that question with Mr. Lamontagne. You talk about people searching out the genres they want, the emotions they want, so they go and choose that. That seems to be what drives the algorithms, yet you said you spend most of your time and money on the lobbying effort, which is for the platforms, rather than trying to drive the audience, which is what dictates how the algorithms function. Have I got that correct?
Mr. Lamontagne: I am not sure I fully understand the question. Would you mind maybe rephrasing it? Are you asking if I am working more toward the lobbying as I should probably work more toward the audience? Is that what you’re saying?
Senator Wallin: Yes. You’re talking about what drives algorithms, and it’s the viewers, it’s the consumers. They’re looking for, in your words, the emotion or the genre they like and respond to. They go and look for that and seek it out, and then the algorithm feeds that back. The next time I turn it on, it shows me the movies I want or dramas, cop shows or whatever it might be. But you said the most effective way to influence the algorithm is not through viewership, but through lobbying.
Mr. Lamontagne: That’s a really good point you’re making, if I can explain. Ideally, I would be putting all my efforts toward the audiences and drive them toward the platform or wherever our content is. The reality is that the mission we gave ourselves when we became aggregators was to fight to first get our content on the platform and then drive the audience to choose it.
The big problem we are facing is that we have now been in talks with big streamers for two or three years, regularly pitching them content on a monthly basis and they do not acquire anything except the big films. That’s the mission we’ve given ourselves. Once we have a sufficient amount of Canadian content on these platforms, then we will be able to work toward the platform less and will probably try to bring the audience to watch more Canadian content. The first step is to work with having the content online.
The Chair: Mr. Lamontagne, Mr. Norouzi and Mr. Fenton, thank you for coming to the committee and for your contribution to the study.
For our second panel, we have with us Vanessa Herrick, Executive Director, English Language Arts Network, who is with us by video conference; and Jay Thomson, Chief Executive Officer, Canadian Communication Systems Alliance. We will commence with the English Language Arts Network, Vanessa Herrick. You have the floor.
Welcome to both of you. You will both have five minutes for opening statements and then we will turn it over to my colleagues for question and answer.
Vanessa Herrick, Executive Director, English Language Arts Network: Good evening. Thank you very much for this invitation and allowing me to join via Zoom. You can tell by my voice, unfortunately, that I am fighting off the tail end of a COVID infection, so I was really pleased to be able to join via the internet.
My name is Vanessa Herrick and I am the executive director of the English Language Arts Network. We’re a not-for-profit working in Quebec to support English-speaking artists and to help them thrive and succeed in this environment and province. We work with artists of many different disciplines.
This bill is of particular interest to us. Again, I want to thank you for the opportunity to express why this is of interest and importance to our community. I first want to say how happy I was to hear that you’ve passed the second reading. That was really encouraging and excellent news. This is particularly important for artists of many different kinds of work, because many artists are cross-disciplinary; they have to be in order to be able to make a living doing their work.
Many of the projects and productions being done in Canada are an excellent source of revenue for artists, allowing them to continue their work in often less commercially successful kinds of work. I’m thinking of things like visual artists working as scenic painters or working as designers, for example.
We, as an organization that supports an official-language minority community, have a particular interest in ensuring that this space remains open and available to Canadian artists, to Quebec artists, and that official-language minority community interests are respected during this process.
It has come up in past committee hearings that there is a challenge to section 5.2 of the particular bill. I would like to express extreme concern that the official language minority communities of Canada would lose the right of consultation in any kind of process with the CRTC under anything under Bill C-11.
I do have past decisions having been made by the Supreme Court of Canada that have reiterated that substantive equality is the standard applied to language rights in Canadian law, and that the Supreme Court has made it clear that equality requires that official language minorities be treated differently if necessary according to their particular circumstances and needs. I can go on and on and quote it. I’m sure it will be up for debate and I should leave it to the lawyers, but I want to reiterate how important that is to our community.
The space must be made for Canadian content on the internet. That is what this bill is about. That is why this is incredibly important to those that I represent, as well as many others. Then within that space we have to ensure that there is room for official language minority communities because, like many other minority communities, that space is not guaranteed. That is really the biggest message I want to reiterate.
I also want to echo a few things that have been mentioned by other witnesses. I have been following some of the hearings, so I’m not going to repeat too much what you’ve already heard. It’s really important that we clarify what qualifies as Canadian content.
It’s quite important that for the definition or those guidelines, that whatever is arrived upon is arrived upon with the participation of the community — and by “the community” I mean different sectors, other stakeholders — and that it does not just fall to the Senate committee itself, or the CRTC, but that it is really a collaborative definition.
I understand that’s not a simple thing to do. But I do think that it will fall to that question, again, of representation and creating space for what is Canadian content; why is it a priority to Canadians? I’d like to offer our expertise in having that conversation, helping in that conversation.
Again, I want to thank you for the opportunity. I’m sure I’m forgetting something important, even though I’ve written it in my notes. I look forward to having a discussion and hearing your questions. Thank you.
The Chair: Thank you.
Mr. Thomson, you have the floor.
Jay Thomson, Chief Executive Officer, Canadian Communication Systems Alliance: Thank you, chair, and thank you to the committee for inviting me to appear today. My name is Jay Thomson and I am CEO of the Canadian Communication Systems Alliance, or CCSA. We are the national association for our over 100 Canadian independent cable TV and IPTV providers, also known as broadcast distribution undertakings or BDUs. So I am a cable guy, perhaps the only one you’re going to hear from.
To date, in the debates over this bill and its predecessor, there has been much talk about the impact of streamers on creators and broadcasters. But there has been scant attention paid to the impact of streamers on BDUs, and their customers, particularly those located outside Canada’s urban centres.
That is despite the central role that BDUs play in achieving Canada’s broadcasting policy objectives, as clearly identified in the current Broadcasting Act and, in fact, enhanced in Bill C-11.
To date, it appears that the drafters and those debating this bill have perhaps bought into rumours of cable TV’s impending death and so have ignored us. The data proves those rumours are false. In fact, the data shows that two thirds of Canadians still subscribe to cable television. It also shows that Canadians spend more hours watching TV programs through a cable TV subscription than via streaming.
At CCSA, we are experiencing unprecedented membership growth. That is because more and more formerly pure internet service providers see a future for cable TV-like video services and want our help to get into that business.
So cable TV is far from dead. It’s still a vital service within the Canadian broadcasting system and will continue to be so for some time.
You have heard a lot about the need to level the playing field between Canadian broadcasters and streamers, and it seems that this bill supports that goal. BDUs — specifically, smaller BDUs, which typically serve Canadians outside the big cities — need the field to be levelled too, namely between those smaller BDUs and the larger, big ones, regarding fair access to streaming services.
Here’s a story to explain. Last week I was in Toronto and stayed in a downtown hotel. Like many, one of the first things I did once I unpacked was turn on the TV. I scrolled through the onscreen guide to see what channels were available through the hotel’s cable TV service. I didn’t have to scroll down far, and there in the guide was the listing for Netflix. So using the channel guide and my remote, I could click on and go to Netflix the same way I could go to any other linear service. It’s a very easy and very user-friendly way to access Netflix. But only if you’re in a hotel or live in a big city like Toronto.
If I was a subscriber to Access Communications serving Regina and other smaller communities in Saskatchewan, I could not have that same easy, user-friendly access to Netflix through my cable subscription using my remote and via my cable channel guide.
Someone in Toronto can get easy, one-click access to Netflix through their cable subscription because Netflix makes its app available for integration to big cable companies serving big markets.
But Netflix refuses to make its app available to smaller cable companies because they’re small. Smaller cable companies typically serve Canadians living in smaller communities. Hence, Netflix’s behaviour in working only with big-city, big cable companies while refusing to work with smaller communities, smaller cable companies discriminates against Canadians based on where they live.
Such big city/small community discrimination in the provision of broadcasting services is contrary to long-standing Canadian broadcasting policy. Thus, as Bill C-11 is intended to bring the streamers into the Canadian broadcasting system, it needs to preclude Netflix and other streamers from engaging in this kind of discriminatory behaviour.
What’s the big deal, you may ask, about making sure streamers make their apps available to smaller cable companies, since there are other ways to access those streamers, whether through the internet, a smart TV or using a connected device like an Amazon Fire TV Stick? Because if you’re one of those two thirds of Canadians who is a cable subscribers, accessing streamers through your cable subscription offers more potential benefits than any of those other methods — benefits that small town Canadians deserve to have as much as their big city counterparts.
As I’ve described, those benefits include the ability to switch from one service, be it a cable channel or a streamer, to another simply with one click of your remote. Plus you could pay for all your services through one single bill. Plus, you may be able to bundle different services together at a discounted price. And you could search for a program you want across all your service — cable channels and streamers — through one interface.
Urban Canadian cable subscribers can or will be able to do these things. Small-town Canadians can’t, and never will, unless you amend the bill to give them that chance. We have provided some sample language for accomplishing that important goal. Thank you, and I welcome your questions.
The Chair: Thank you very much, Mr. Thomson.
Senator Cormier: My question is for Ms. Herrick. First, thank you for your presentation. I want to better understand the relationship that artists from the English minority in Quebec and the producers have historically with the CRTC. What can you tell us about that and — considering 5.2 but other provisions in the bill — how this bill would help that relationship so that the needs of the artists you represent and the producers you might represent be well considered by the CRTC?
Ms. Herrick: Thank you for the question. I think it’s multi-faceted. I’m not an expert in the history of the relationship of the CRTC, but I know that there have been questions as to a lack of communication and a lack of understanding, and I believe that perhaps that is why the bill was written the way it was in the first place.
I do believe that ensuring there is a procedure to follow that access to the CRTC — when they are being given a significant amount of responsibility under this bill and some would say more responsibility — and that those procedures and that access to conversation and to understanding the impact on official language minority communities be respected and that it be official, that it be put in a place whereby there is a procedure that can’t be questioned and cannot be reduced.
The importance of that, as I said, is it allows for the creation of a voice for official language minority communities that I know many Canadians are very concerned about. I speak as much for my French-speaking colleagues across Canada as I do for the English speakers of Quebec. It is a key, a critical time for the survival of our cultures, our languages and our stories; that they are given that space and that space is protected and that conversation is ensured. Thank you again for the question.
Senator Cormier: We’ve heard a lot of French-speaking artists from the French minority in Canada. We see how it’s difficult to discover French productions. Is there an issue for the English minority in Quebec to make sure their productions are discovered online?
Ms. Herrick: This conversation comes up quite often when it comes to official language minority communities, and where do English speakers of Quebec fall into that conversation, because, of course, the language itself is not under threat. English is not going anywhere. It’s not a threat, although as we sit in Quebec in this current day and age, there is a question as to how it will be used in our province.
That aside, that does not mean that the stories of the English speakers of Quebec — and what they can bring and contribute to the culture of Quebec and the culture of Canada — is respected and seen. That is overlooked a lot. Of course, Canadians understand this because we are trying to find a place when we live next door to a neighbour that very much dominates production and broadcasting.
English speakers in Quebec face many of the same challenges as others across the board. But I think that because this particular community has to compete on many different levels in a province that can create issues around accessibility, we have to compete with the French producers as well as international and American productions that come in. English-speaking producers in Quebec or English-speaking content makers in Quebec face a lot of challenges.
Senator Cormier: Thank you, and thank you for your work.
Senator Simons: Thank you very much.
My questions are for Mr. Thomson. I understand why it’s prejudicial to your companies if you can’t bundle a Netflix app with the cable product. I’m having a little trouble understanding why this is such a great loss to consumers who could just “cut the cord,” as they say, and switch to streaming services. I have a Samsung smart TV, and my remote control lets me go instantly to Netflix, Amazon Prime and YouTube but not to Apple or Disney. Every technology is going to have a preference, and I’m not quite sure where you think, legally, a company like Netflix should be required to let you have its app as part of your bundle.
Mr. Thomson: There are a couple of questions there, senator. I’ll start with the second point about the obligation to make a service available.
As I said in my opening remarks, it’s a long-standing part of Canadian broadcasting policy that, regardless of where you live in this country, you get equal access to broadcasting services. So whether you live in the Far North — maybe it’s harder in the Far North — in rural parts of Canada or you live in downtown Toronto, you still get the same access to the CTVs, CBCs and their specialty services. That is, again, regardless of where you live.
If it’s not a legal requirement right now, it’s certainly a long-standing policy requirement that Canadians should have fair access, regardless of where they live. That should apply to streamers now that they’re being brought into the broadcasting system.
In terms of what difference it makes, I think we’ve had this conversation before. I tried to explain that there’s so much more convenience for a cable subscriber to be able to stay within their cable subscription or the system and move back and forth between the services, whether they’re regular channels or streamers. You can’t do that, I don’t believe, on your smart TV. You can go to your streaming services, but you can’t go directly from your streaming services to CBC, for example, if you wanted. And you can’t search CBC, CTV and Global channels at the same time you’re searching Netflix and Prime. That’s what you can do through your cable subscription.
Senator Simons: I don’t watch any of those things on TV. That’s the thing. The television is a piece of technology. I only have cable now because my husband needs to watch MSNBC. He needs to know what is happening to Donald Trump at every minute. Otherwise, we wouldn’t have any cable, because that is not how we consume television anymore. He needs to have Al Jazeera, too. He’s an eclectic dude.
You’re arguing that they should have to allow you to bundle their product with yours because then it’s easier to sell your product to a declining audience, no?
Mr. Thomson: We want fair treatment in the sense that because they’re selling their apps to the Rogers, Bells and Vidéotrons of the world, they should be obliged to sell to the smaller companies like CCAP outside of Quebec City and Access in Regina. It’s simply a matter of equity, not just for our members, but our members serve customers. They serve Canadians who are cable subscribers, and they’re cable subscribers because they value that service. To increase the value, to make it a service that’s contributing to their enjoyment, is something that should be part of policy.
Senator Simons: Thank you. I don’t think I’m going to get a different answer if I ask the question another way.
The Chair: One never knows sometimes.
Senator Manning: My question is for Ms. Herrick.
In your opening remarks, you talked about Canadian content. Many of the witnesses who have appeared before our committee have argued for a more flexible definition of “Canadian content,” one where multiple factors come into consideration with no one factor, such as IP, being determinative.
Would you support an amendment that states that although IP may be considered in the point system, it should not be a determinative factor that makes something automatically not Canadian out of the gate?
Ms. Herrick: That’s a tricky question. I don’t think it’s an issue to have it be part of the consideration. What weight it should carry and that sort of approach and perspective would be better argued by people with more expertise than I.
I do understand that it is a complicated conversation to have. It’s not like “this many Canadians showed up for work today, therefore, tick, we are Canadian content.” But I do appreciate what you’re saying, and yes, I think it can carry some weight in the conversation.
Senator Manning: I realize it’s complicated. That’s why many of my questions to other witnesses have been along the same lines. I’m trying to determine how we, as a country or the powers that be, determine the level of Canadian content that satisfies the government and users. How do we determine that? Is an actor that’s Canadian part of that addition? Is the makeup artist that’s on-site part of it? Is it the rental of property services here in Canada? How do we determine, first, what is real “Canadian content,” and what’s the measurement? How do we measure that we’ve reached a level where we’re satisfied that the level of Canadian content that we would like to see is there?
Ms. Herrick: It is a tricky thing.
What is being asked needs to serve many different purposes for Canadians across the board, from different elements. Is it about providing employment for Canadians? Absolutely. Is it about bringing money into the economy to different levels of artists, be they producers, actors, creative designers — whoever and however they participate? Of course it is.
However, I also think there’s a great deal of value — and I think I speak for many Canadians — in that it has to be a place whereby this is representative of the Canadian experience. That is perhaps the trickier part to measure, because it isn’t a number count of how many dollars have come in or how many jobs have come in or been created.
It is a bigger conversation that can perhaps be had once you’ve reached that point of needing to sort it out exactly, because there are many different things to be considered.
Senator Manning: Mr. Thomson, do you have any comments you’d like to make? I realize that a cable company brings in shows from other countries that run through the cable stations. I’m wondering how you look at how we reach a level where we’re satisfied that we’re getting enough Canadian content on our TV screens.
Mr. Thomson: That’s a very subjective question in terms of how we decide we’re satisfied that we’re getting enough Canadian content. We have rules in place to make sure there’s a minimum amount of Canadian content. How we define “Canadian content” is another question that has been a big one debated around this table. I heard Ms. Creighton say yesterday that it’s an area for the CRTC to handle. I would agree with that. I also agree that it’s the CRTC’s role to determine the level of Canadian content that should be made available to our system.
Senator Manning: Is there a concern by either one of our witnesses that we pass Bill C-11 but the regulations come after the fact, and that many of the things we’re talking about here will be left in the hands of the CRTC? Are our witnesses comfortable with that?
Mr. Thomson: That’s exactly the way it should be. The legislation should set the framework for the independent regulator and the expert regulator, which will then hold the public processes and hear from thousands of witnesses from all walks of life and all areas of work within the creative sector and the business industry, and make a determination, as it has throughout its history.
We’ve worked with the CRTC as an industry since our beginnings, and we’re not always happy with the decisions it renders. However, it’s a much better process to follow, and it ends up ultimately with a better and more thought-out decision that could possibly be decided upon around a table like this, with all due respect.
Ms. Herrick: I think a lot of people would be a lot more comfortable with it going to the CRTC if there had been less pushback from the CRTC being open to having consultation with different sectors of the community, such as official language minority communities. I know I speak for a lot of people in our community who wouldn’t mind if the CRTC, of course, played a part or led the discussions, but this is a bigger conversation that shouldn’t fall just to the CRTC nor just to the Senate, in my opinion.
Senator Wallin: To the cable guy, I have concerns about the service that you get in rural areas, obviously, because I live there. My concern is more about reliable access to Wi-Fi and internet. Everybody is going over to Mr. Musk, since he’s actually allowing people to drive their tractors and combines. But I want to come back to this issue of small BDUs.
Correct me if I’m wrong; can I get Access anywhere in Saskatchewan?
Mr. Thomson: No, you can only get Access in the communities that it is licensed to serve and where it has a cable plant infrastructure.
Senator Wallin: Right, so that’s limited as well. On the question of the platforms refusing to negotiate with you, bargain with you or even giving you access to buy access to the app, what is the reasoning on that? Why would they consider Access in Regina some kind of threat?
Mr. Thomson: My understanding is it’s not because they’re a threat; it’s because they’re small and it takes a lot more work for a big company like Netflix to work with a small provider than with a large provider with millions of subscribers like a Rogers or a Bell.
Senator Wallin: So it’s just a numbers game. You have to show them that they have an audience that makes it worthwhile for them.
Mr. Thomson: That’s our understanding of their rationale. This is despite the fact that our members are willing to pay the cost associated with whatever work is required to integrate the app. So it’s not necessarily a cost factor. It’s ultimately, I guess, a breadth of distribution factor.
Senator Wallin: I’m trying to figure it out. If I’m sitting at Fishing Lake, I can get Netflix, I can get access to CTV, CBC or the American cable options. Why would they care if there’s no cost imposed on them whether you’re small or large?
Mr. Thomson: If they come back before you, I’d ask you to ask them that question, because we don’t understand it ourselves. We are offering them more subscribers, and at a time when Netflix has gone through a period where their stock has gone down because of subscriber losses, you would think they would be interested in finding any kind of way to add to their subscriber base, but they’re not.
Senator Wallin: What exactly do you want either the government or the government through the CRTC to do? Is it to actually say to Netflix, “You must do a deal with small BDUs?” I’m only using Access because it’s what I’m aware of in the province. Is that what you’re looking for?
Mr. Thomson: You must make your app available on a non-discriminatory basis, on fair terms and conditions, to any distributor within Canada who wishes to have access to that app.
Senator Wallin: Is that a reasonable proposition? This is where it comes back to the trade bill and the trade issues. They have a business model, they have an operating model, and the Government of Canada is going to say that we want them to change all of that ,whether it’s in their financial interest or not or their business plan that they don’t want to deal with smaller operators. I’m concerned when the government starts dictating whom a foreign company must do business with as opposed to who they must serve as a customer.
Mr. Thomson: I can’t speak to the trade issues, but to the policy issues, it’s an obligation that is imposed on Canadian broadcasters now. The streamers are coming into the Canadian broadcasting system. Much of the debate about this bill is about ensuring there’s a level playing field between Canadian broadcasters and the foreign streamers, and that’s one way to do it.
Senator Wallin: When you talk about levelling the playing field, you’re actually talking about levelling the playing field with the larger BDUs in Canada, not so much the streaming services.
Mr. Thomson: That’s right. That’s ultimately the endgame so that our customers get the same services and benefits as large-city customers do and our members get to compete on the same basis with the same kind of services as the large companies do. The way to do that is to impose the obligation on the Netflixes of the world to make their services available on a non-discriminatory basis.
Senator Wallin: Or for you to grow your viewership so you’re not as small. We’re kind of, through the back door, trying to mandate more people to watch something they may not choose to watch.
Mr. Thomson: Cable companies by their nature serve various specific markets, so their ability to grow is limited, particularly in smaller markets because there are only so many people. It’s more about serving customers. It really is ultimately about being able to provide the same level of service. Our members want to provide that service to their customers that their neighbours in the big cities can get. That’s ultimately what it is.
Senator Wallin: Do you make any contributions to the variety of Canadian media funds or other subsidies that are provided to producers and artists? Are the small players required to do that in the same way that CBC and CTV are?
Mr. Thomson: Larger cable companies are obliged to contribute 5% of their revenues to the CMF and other production funds. Our members are under 20,000, under 2,000, even under 100 subscribers sometimes, and because of their size they don’t have the same obligation. But they also have the option to do it, and many of them also have community channels and they contribute to Canadian programming and to the development of Canadian talent through their community channels.
Senator Wallin: So you are not looking for a direct exchange of cash from the streamers to you; you want it to go through the other funding mechanisms?
Mr. Thomson: We’re not looking for cash from streamers. We’re looking for the streamers.
Senator Wallin: To have access and to be mandated to provide that access to you?
Mr. Thomson: Yes.
Senator Wallin: And you will pay the bill.
Mr. Thomson: We will pay the bill to them, and then we can pass the service on to our customers.
Senator Tannas: My questions are for Mr. Thomson. Generally, what percentage of subscribers with your companies would have both internet service and cable TV in their account?
Mr. Thomson: I don’t know the exact number. I’m guessing that it would be the vast majority of them.
Senator Tannas: Yes. So if it is the vast majority, one of the things that occurred to me is that if you can tie the streaming into your cable, I think you’re probably also encouraging new customers for your internet service, and you’re also probably in some ways hardening the defence against other internet providers that might be in the marketplace or come into the marketplace. Would that be fair to say? Is that part of what this is about? Because my next question will be the economics.
What is really the issue? I know it’s customer convenience, but is there another advantage? Because I can’t imagine with the number of folks that being an agent for Netflix is really going to be that big of a money-maker. It’s got to be for convenience. But in the big cities, don’t you think it’s also to protect this idea that we want to protect the internet service provider part of our business and this is a great way to do it? It feeds on both of those things. Is there anything to that?
Mr. Thomson: It’s a competitive issue, for sure. In markets where there are competitors, it’s the ability to be able to offer the same level of service as your competitor does in order for you to be able to continue to operate and to make a profit. In smaller communities, there isn’t necessarily a competitor. In those circumstances, it’s really about convenience, customer service and fairness.
Senator Tannas: In most of your communities, there is no alternate internet provider. I suppose there would be one, the phone company, but that would be it.
Mr. Thomson: That’s often the case, yes.
Senator Tannas: This may be outside your comfort zone, but my understanding is that — and you’ve voiced this — with respect to the CRTC, there are areas where they are very strong and expert, and there are areas where there’s more of a bureaucracy and things move slowly, and so on.
You’ve spoken highly of those folks and called them the expert people. I believe that’s the case. You’ve said that the decision making around this needs to reside with them as opposed to us trying to figure out how, exactly, to tell them what to do and to try and conceive of every situation when, on the face of it, TikTok probably didn’t exist when they began writing this bill. No one knew it was coming and now it’s at 50%.
Looking at it from all your years of experience, do you have any concern about how the CRTC will manage an ecosystem that is changing so rapidly compared to a system like yours that has the cable in the ground for 50 years? How good do you feel as an expert witness here about the CRTC’s ability to move quickly, both when they’re making a mistake and they’re killing something off and when they see something good that’s for the benefit of Canadians and they move to foster it?
Mr. Thomson: I think there are a couple of questions there too. First, do they move quickly? We’ve seen that they don’t move quickly, which is a problem. It’s a problem on the telecom side and it’s a problem on the broadcasting side. There is a proposed direction on the telecom side to the commission that would include a provision regarding the speed of their decisions. This is another point that we made in our submission. On the broadcasting side, it would be nice to see something in Bill C-11 that would allow the commission to render decisions in a faster way.
Second, are we confident that the commission has the resources and the expertise to deal with a rapidly changing industry? Yes, we have concerns about their resources, for one, because not only will they be getting extra responsibilities under this bill, but there are other bills that are proposing that they have additional workload as well. But when we sit back and think about who else would be better at it, we don’t see anyone else.
Senator Tannas: Well, they’re going to have to be good at it is really the point, isn’t it?
Mr. Thomson: They’re going to have to stay good and get better.
The Chair: Before we go to second round, I have a couple of questions myself.
I’d like to ask this of both witnesses. First, I think I heard either one or both of you say that the CRTC needs to weigh in and speak to some of the issues that need to be addressed in terms of regulations and so on.
We’ve heard from a lot of witnesses who are concerned that the CRTC has been very flexible when it comes to those that have huge bandwidth, a lot of influence in this town, and that they listen to independent content producers and streamers far less than they do some of the giants. How confident are you that the CRTC will be transparent in their public consultation process and will be able to address, invariably, many of the loose ends that many of the witnesses have brought up before this committee?
Mr. Thomson or Ms. Herrick, whoever wants to go first.
Mr. Thomson: We’re a small organization, so we’re up against large players who have an interest in finding ways to get decisions that benefit them, sometimes at our expense. We have faced that challenge all through our history. We continue to make an effort.
Ultimately, I’m not at the CRTC. I’m not trying to sell the CRTC, but we respect the organization. We believe that they act with integrity, and we will continue to work with them as best we can. We believe that their processes are open, public and transparent and give everyone an opportunity to make a presentation and be heard.
Ms. Herrick: Thank you for the question. The CRTC has been around a long time, and I do believe that they operate with integrity. I do believe that it is important that aspects of the bill, like 5.2, remain in place to ensure that the voice of all aspects of our communities are heard.
While I can appreciate that speed is always needed, and that many people wait on these decisions, I think it’s equally important, in the interest of transparency and of representing Canadians properly, that these consultations and community conversations are encouraged and are made official. I think that’s where Bill C-11 could really take some leadership and ensure that the CRTC is held to a standard of consultation and hearing public voice on important issues.
The Chair: Would it be helpful if this committee, if not in an amendment but in an attachment to the bill, made it clear that the policy guidelines that the CRTC follows in their public consultations are a bit narrower than the broad scope this bill gives to the CRTC currently?
Ms. Herrick: Any guidance that can be provided by the Senate through this bill would be beneficial to all. I think that the government is moving toward transparency and inclusion. The CRTC should be encouraged to do the same. As a society, we are trying to promote open discussions about equity, inclusion and all of these things. A lot of these questions are going to be raised in these bills that cover huge swathes and sectors of our communities.
Yes, I absolutely 100% encourage the Senate to include any and all guidance.
The Chair: From all I’ve heard and seen from this bill, it seems like streamers and all these new platforms have created an enormous amount of energy over the last decade for artists, Canadian producers and content producers in this country.
Is it fair to say that Canadian artists, actors, producers and the movie industry has never been more robust in this country as it has in the last few years in large part because of these platforms?
Listening to testimony after testimony — and we’ve had hours of it; this committee has done robust work — it seems that, at the end of the day, it’s a debate about cutting the pie up. That is, who gets what? It seems like there is a group of people who are very successful because they’ve come up with an innovative business idea and there is a group in this industry that is not doing as well and they’re saying to the group that’s doing well, “We need to continue to do what we’re doing and we want you to pay your fair share.”
Is that statement fair? If it isn’t, I’d love to hear your perspectives in about a minute.
Mr. Thomson: I come at it from a different perspective. I think the bill looks at who pays and how much as opposed to who gets the benefit from those payments.
I think we’ll create a system whereby once we have the rules in place that everyone has to make equitable contributions to the production and creation of Canadian programming, and that’s the most important step. Then we determine how much that should be. The next decision is how to allocate it fairly. I don’t think it comes from the other way around. I don’t think we’re looking at this from who gets to split the pie, because there is no pie yet to split.
Ms. Herrick: From our perspective, this is a really interesting question. I agree that this is an exciting time when it comes to creation and artistic contribution. I hate to say this, but I would credit the pandemic with enabling and empowering many artists to learn how to monetize and move online.
I do have fears about over-regulation — we have to ensure that we create and protect a space for individual content creators and individual expression in these questions of regulation.
To me, it’s not as much a question of funding and finance. There are other experts who can speak to that. I think it’s important that we find that balance of ensuring that in this explosion of content and expression, we do not lose our sense of having a voice, as Canadians, where we can speak to one another, where we can allow space for our different communities to connect — speaking about Indigenous communities and other equity-seeking communities — and that we embrace and empower this amazing explosion of creativity of Canadians, who are already incredibly talented people, as we’ve seen, and that we encourage and allow that to thrive.
Senator Wallin: To be clear, I meant no disrespect in referring to you as “the cable guy.” It was my feeble attempt at humour.
Mr. Thomson, on this question, you’ve said that in your experience, even though you do not always agree with the CRTC’s rulings as they impact your world, you believe they are the organization in this country with expertise. But, as we’ve heard from many witnesses, they do not have the manpower, the person power. They do not have the budgets to deal with this. The CRTC would have to be expanded greatly if they are going to bring in monitoring of the internet and all the platforms, because the expertise comes from years of monitoring and regulating the BDUs, the television industry and the radio industry. These platforms and the internet are not TV channels. They’re not BDUs. So what gives you confidence that they have the expertise to deal with this?
Mr. Thomson: The answer, again, is who else would? They’ve got the background to develop the necessary expertise going forward. No doubt it will be a challenge, but my understanding of this bill is that if it passes, it’s going to create a system for bringing streamers into the broadcasting system and making them contribute, and somebody is going to have to administer it.
Senator Wallin: That’s the issue. We’re going to be monitoring an endless number of hours. It’s not like a television station where there’s 24 hours, seven days a week, and you can manage that. The internet is infinite. And we’re now going to ask the CRTC to monitor all of the output for things like Canadian content or the discoverability of Canadian content. That’s a massive task when we don’t even have, according to Ms. Herrick and others — and I certainly agree — a clear definition of what Canadian content is.
Mr. Thomson: I think it will be much easier for the commission to monitor and enforce rules related to expenditure obligations, but such matters as discoverability will be a real challenge. I totally agree with you.
Senator Wallin: Ms. Herrick, do you have a comment on that, about the ability of the CRTC to handle the workload? This is only one bill we’re talking about. As Mr. Thomson said, there are others in the pipeline.
Ms. Herrick: Absolutely. It’s not a simple thing, of course. Do we expect the CRTC to regulate all activities of everyone on the internet? No. We don’t expect the police to be able to monitor what everyone is doing in society all the time either.
It’s up to us and yourselves, and the CRTC as well, to ensure that what is permissible and allowable and Canadian is clear. Then it has to operate to a certain degree on a level of honour system, because no one can police the internet. Heaven knows I wouldn’t put that on anyone. I think that clear parameters of operation are what we’re really hoping for.
The Chair: Thank you so much to this panel. We’ll see you all next week.
(The committee adjourned.)