THE STANDING SENATE COMMITTEE ON TRANSPORT AND COMMUNICATIONS
EVIDENCE
OTTAWA, Wednesday, November 2, 2022
The Standing Senate Committee on Transport and Communications met with videoconference this day at 6:46 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.
[English]
The Chair: Honourable senators, I am Leo Housakos, a senator from Quebec and chair of this committee. I would like to invite my colleagues to introduce themselves.
Senator Simons: Hello, I’m Senator Paula Simons from Alberta, Treaty 6 territory.
[Translation]
Senator Miville-Dechêne: Julie Miville-Dechêne, Quebec.
Senator Gagné: Raymonde Gagné from Manitoba.
Senator Cormier: René Cormier from New Brunswick.
Senator Dalphond: Pierre Dalphond from Quebec.
[English]
Senator Klyne: Good evening. I’m Marty Klyne from Saskatchewan, Treaty 4 territory.
Senator Manning: Fabian Manning, Newfoundland and Labrador.
Senator Sorensen: Karen Sorensen from Alberta.
[Translation]
Senator Dawson: Dennis Dawson from Quebec.
Senator Clement: Bernadette Clement from Ontario.
[English]
Senator Dasko: Donna Dasko from Ontario.
Senator Wallin: Pamela Wallin from Saskatchewan.
[Translation]
The Chair: Honourable senators, we are meeting to continue our study of Bill C-11, An Act to amend the Broadcasting Act and to make related and consequential amendments to other Acts.
Joining us for the first panel this evening, we are pleased to welcome, by video conference, from the Association des réalisateurs et réalisatrices du Québec, Gabriel Pelletier, President, and Mylène Cyr, Executive Director. From the Société des auteurs de radio, télévision et cinéma, Pauline Halpern, Executive Director; by video conference, Luc Thériault, Treasurer and Robert Armstrong, Consultant.
[English]
Welcome to you all for joining us this evening. We’ll begin this panel with opening remarks from Gabriel Pelletier followed by Pauline Halpern, then Jay Goldberg, Ontario Director, Canadian Taxpayers Federation, who is also with us. Welcome, Mr. Goldberg.
Each of you will have five minutes for opening statements and then we will go to questions and answers.
[Translation]
Gabriel Pelletier, President, Association des réalisateurs et réalisatrices du Québec: Honourable senators, thank you for giving the Association des réalisateurs et réalisatrices du Québec (ARRQ) the opportunity to speak before you today.
My name is Gabriel Pelletier, and I’m president of the ARRQ, an artists’ association and craft union. Our association has been accredited and legally recognized under both federal and provincial status of the artist legislation to represent and defend the interests of all directors working in Quebec, in French or any other language than English, in film, television, web and animation. Our association has over 850 members and we will celebrate our fiftieth anniversary next year.
The study of Bill C-11 directly concerns directors since, among other things, it governs the licences and obligations of the broadcasters that air our work. It’s the foundation of our cultural sovereignty, and it also secures its funding.
This legislation provides structure for our sector and it will play a decisive role in the future of our culture and our Canadian cultural creators. In a digital realm currently dominated by an oligopoly of foreign businesses, we’re facing a real and immediate threat to the survival of francophone audiovisual production. Our various audiences are increasingly leaving traditional television behind, especially the younger generation, who get most of their audiovisual content through foreign platforms.
Bill C-11 is an opportunity to protect our cultural sovereignty by maintaining a strong Canadian audiovisual production ecosystem. It’s important and urgent that this bill be adopted, and we’re very much in favour of that, but we’d like to propose a few amendments that we believe are essential given the context.
In paragraph 3(1)(f), we feel that maximum use wherever possible and predominant use of Canadian creative resources in the creation, production and presentation of Canadian programming is one of the essential keys to ensuring the sustainability of our sector.
To maintain and foster a lasting balance in our ecosystem, we believe that all businesses, Canadian or foreign, should be subject to the act on an equal footing. Foreign platform businesses should therefore be subject to the same obligations as Canadian businesses when it comes to human resources.
We therefore propose that the wording of paragraph 3(1)(f) refer to “all broadcasting undertakings” rather than distinguishing between Canadian and foreign undertakings. I will now turn the floor over to Mylène Cyr.
Mylène Cyr, Executive Director, Association des réalisateurs et réalisatrices du Québec: Thank you, Gabriel. Mr. Chair, honourable senators and committee members, thank you for this opportunity to provide our recommendations for possible amendments to Bill C-11. My name is Mylène Cyr and I’m the executive director of the ARRQ.
An amendment was introduced in the final reading of section 31.1 in the House of Commons. It has the effect of exempting all online undertakings, both Canadian and foreign, from the federal Status of the Artist Act.
We question the scope and purpose of this amendment. If it was introduced to protect sharing of legislative jurisdictions, the state of the law and jurisprudence show that it’s superfluous. However, its effects are highly detrimental to established and future working conditions, particularly in sectors where they may be precarious. It’s crucial that the gains made in terms of working conditions and wages for artists be perpetuated and they must not be limited to broadcasting undertakings that are not online.
For these reasons, we ask that section 31.1 be withdrawn to avoid the devastating effects this amendment would have on artists’ conditions of engagement.
The passage of Bill C-11 will bring its own set of challenges in the face of a new dynamic, given the arrival of new players. The CRTC will play a primary role in applying the bill. We therefore believe that it’s essential to maintain the public hearing process before decisions are made, but also the public’s right to appeal decisions.
Therefore, Bill C-11 should allow for public hearings to be maintained when the CRTC grants licences, but public hearings should also be provided for in the event of orders to broadcasters and digital platforms, since the terms of these have an impact on the funding and development of Canadian content. The same logic applies to appealing the Governor-in-Council, to allow Canadians to challenge a decision where these same conditions are at issue.
We believe that these forums for discussion and debate will be more than necessary in this context of paradigm shifts.
In closing, we maintain our support for Bill C-11 and ask that you make these few crucial amendments to protect our creators and our Canadian culture.
We thank you for your attention and we’d be pleased to answer any questions you may have. Thank you.
The Chair: Thank you very much. We will now go to Pauline Halpern for five minutes.
Pauline Halpern, Executive Director, Société des auteurs de radio, télévision et cinéma: Actually, I’m going to let Mr. Thériault address the committee.
Luc Thériault, Treasurer, Société des auteurs de radio, télévision et cinéma: Good evening. Honourable senators, thank you for taking the time to hear us. My name is Luc Thériault, and I’m the treasurer of the Société des auteurs de radio, télévision et cinéma, or SARTEC. With me are executive director Pauline Halpern and Robert Armstrong, our consultant on this matter. We represent francophone screenwriters and we have about 1,600 members. We have provincial and federal accreditation and we administer a number of collective agreements governing the activities of Radio-Canada, TVA and the NFB, among others.
Bill C-11 is an important step forward, and we support it for the enhanced protection of Canadian culture that it provides. That said, the current version sets out troubling unequal treatment between online undertakings and Canadian broadcasters.
As a member of the Coalition for the Diversity of Cultural Expressions (CDCE), SARTEC supports the Governor-in-Council demands.
In addition, subsections 7(7), 10(1.2) and 34.995 give cabinet the power to issue very specific directives to the CRTC, which would allow for the potential politicization of cabinet decisions. We therefore respectfully ask that you support the withdrawal of these subsections and retain the existing wording in the act to maintain the CRTC’s independence.
Having said that, we’d like to focus our remarks on another topic of particular concern. Section 31.1 of Bill C-11 excludes online undertakings from the Status of the Artist Act. However, the Status of the Artist Act gives artists’ associations the power to negotiate for production activities carried out by certain federal institutions and broadcasting undertakings under CRTC jurisdiction.
First, we wondered what the motivation might have been for this section. We were told informally that the amendment was in response to a division of powers issue under constitutional law.
However, the Supreme Court has recognized that broadcasting is a federal jurisdiction. Therefore, if the main activity of a broadcasting undertaking or group falls under federal jurisdiction, the incidental activity, production, also falls under federal jurisdiction. Quebec’s status of the artist legislation therefore doesn’t apply.
Of course, we’re not calling for universal regulation of online undertaking productions, because the federal legislation has no extraterritorial reach. However, when a Canadian or foreign online undertaking hires a Canadian artist or permanent resident to work on a Canadian production, the Status of the Artist Act should allow that artist’s association to negotiate minimum terms and conditions for that artist.
However, section 31.1 of Bill C-11 does not require compliance with any division of powers, nor does it exclude only foreign productions from the Status of the Artist Act. It does exclude from the act all productions, Canadian or foreign, produced by online undertakings — TOU.TV and CBC Gem, as much as Netflix.
If this section were to stand, online undertakings and Canadian television broadcasters licensed for their online activities would have no obligation to sit down at the negotiating table with artists’ associations. No government mediation would be available in the event of an impasse. Online undertakings would be able to intimidate our members with impunity, or deny them contracts simply because they are members. Finally, if an agreement were ever reached with an online undertaking, its scope would be limited to members of the artists’ association involved.
That’s why it’s crucial that online undertakings be subject to the Status of the Artist Act. We need the leverage it gives us to successfully negotiate minimum terms for our artists with powerful international businesses that won’t negotiate with us unless they have to and whose current contracting practices are far removed from our best practices.
Therefore, we respectfully ask that you support the withdrawal of section 31.1 from Bill C-11. Thank you for your attention and we’d be happy to answer any questions you may have.
The Chair: Thank you very much, Mr. Thériault.
[English]
Jay Goldberg, Ontario Director, Canadian Taxpayers Federation: Thank you very much for having me.
I first want to thank this committee for giving Bill C-11 a thorough examination. I am very pleased to see that this bill is being properly scrutinized in the Senate in a way it was not in the House of Commons.
I’m grateful to be here today to speak on behalf of tens of thousands of Canadians. In fact, well over 100,000 Canadians have signed our petition calling on the government not to move forward with Bill C-11.
The Canadian Taxpayers Federation is concerned by this bill for three key reasons. First, the government’s “empower the CRTC now, give guidance later approach” raises major concerns about accountability. There are many Canadians — and I’ve spoken to many — who are asking why the government is trying to give such unprecedented power to an entity like the CRTC without first sharing with Canadians exactly how much power and exactly on what basis it plans to do so.
The government has said repeatedly that instructions and guidance will come later, but in our view, that’s a backward approach when it comes to accountability. The government should release the regulations it plans to implement and instructions with regard to the CRTC’s full mandate before and not after Bill C-11 is considered and approved.
Second, contrary to the government’s assertions, the CRTC has determined that user-generated content will be regulated by the CRTC under Bill C-11 through broadcast regulation. Professor Michael Geist has said that “. . . no other country in the world seeks to regulate content in this way . . .” and to do so is a major threat to individual freedom. Again, there are many Canadians asking why the government wants to give the CRTC the power to regulate user-generated content while at the same time telling Canadians that it is not doing that very thing.
Let me point out as well, before I get to the third point, that Mr. Scott, the chair of the CRTC, told the House of Commons committee that “. . . section 4.2 allows the CRTC to prescribe by regulation user-uploaded content subject to very explicit criteria.”
I believe the very fact that user-generated content would be on the table demonstrates that this bill is not just, as the minister and others have suggested, all about Canadian culture.
Third, we think this would set a dangerous precedent for the future. Today, this new government regulatory machine is being built to filter content based on what the government considers to be Canadian, but this could be repurposed in the future for other means. Not being able to hold the CRTC accountable in determining what is or is not Canadian content may concern some, but not being able to hold it accountable on future issues, such as social cohesion, as Minister Mendicino alluded to in the online harms conversation, is even more concerning. If the government gives bureaucrats the power to filter what we can see online for one reason, mission creep on other issues is very easy to foresee.
There are also deep concerns about the process of this legislation, the lack of debate in the House of Commons and the government failing to genuinely listen to Canadians. We saw well over 100 amendments voted on within a single day without politicians having a chance to even fully understand them. Our right to free speech and free expression has to be sacred, and we should not be in a situation in which a bill like this is pushed through the House of Commons as it was, with such limited debate and opportunity for thorough consideration of amendments. I’m grateful we’re seeing that here.
Finally, let me speak about the intention of the bill itself. The government claims that Bill C-11 is necessary to protect and promote the interests of Canadian content creators, but there are dozens of groups that represent content creators, including over 400 through Digital First Canada, which have said that this bill would be detrimental to their interests. YouTube, when they were before this very committee, warned that audiences outside of Canada will see Canadian content less, which is the complete opposite of what the government says its intent is. If 90% of Canadian content creators’ audiences are outside of Canada on platforms like YouTube, as they’ve told us, this makes the foreign market less accessible and will be detrimental to some careers.
The bottom line is the government doesn’t really have a legitimate leg to stand on here. The bill promotes censorship and government control without actually delivering on the very thing that the bill’s creators are supposedly trying to address here. Given that reality, I would implore senators not to move forward with this bill. Bill C-11 is dangerous, it threatens our ability to hold the government to account over the long term and it could allow for a big expansion of bureaucratic power to regulation going forward.
I want to thank you all for having me here, and I look forward to future questions.
The Chair: Thank you, sir.
My question is for Mr. Goldberg, and you have expressed concerns echoing those of several other witnesses that have come before this committee in regard to user-generated content and specifically section 4.1(2), and it has been an ongoing debate. The government continues to insist that this bill does not touch user-generated content, and we’ve had people arguing that there will not be attempts to manipulate algorithms, but yet, as you stated in your testimony, we’ve had the chair of the CRTC himself who had a very different interpretation of the issue. We’ve also seen on the House side, when it was time to amend the bill, an unwillingness on the part of the government to deal with section 4.1(2), or really put an end to this debate by putting in a clause that clearly excludes user-generated content, and then we move on to other subject matter.
Why do you think that the government simply does not want to be clearer on this issue? Do they think that nobody will notice? That’s my first question. Second, what do you think is the relationship between Bill C-11 and Bill C-18 that’s right now before the House and the online harm bill, which is certainly coming down the pipe. I have some concerns, and I’d like to know what your perspective is.
Mr. Goldberg: Thank you for those questions.
Fundamentally, we have to listen to the very person who will be empowered by this bill if it gets through. The government is repeatedly saying that user-generated content won’t be regulated, but if Mr. Scott is the one leading the organization that will be regulating that very content, we have to take his word very seriously. Ultimately, the government repeatedly refusing to acknowledge this, despite the fact that Mr. Scott says it will be regulated, indicates that the government wants to regulate user-generated content. It could very simply and very easily, as you said, make an amendment and take that section out, should it choose to do so at any time. The government has been insistent on leaving that in. It has been a concern about government control.
As you have noted, Bill C-11 is part of a broad swath of bills that the government is introducing, Bill C-18 with the online news act, and we’ll see the online harm bill. I think there’s a long track record here of the government introducing legislation that is not properly thought out, that doesn’t properly tend to the concerns that Canadians have about making sure we have autonomy online and about making sure that the government doesn’t interfere with our ability to access things online and doesn’t filter what we can and cannot see. We think this is all very concerning. Bill C-18 is also very concerning.
I would say this is the first bill of a pattern of bills that we’re going to see, and it’s just a clear demonstration of a big rush on the part of the government, a failure to consider properly how individuals and how Canadians want to freely access and see what we can see online without the government influencing that, and I think these concerns have to be taken very seriously.
Senator Simons: Mr. Armstrong, I’m delighted to see you back with us, and if it’s not a bit rude, I want to take advantage of your presence here to come back to the question you raised when you were last with us about section 7(7).
Putting together the impact of this section is a bit like playing a game of snakes and ladders. You have to look from here to the legislation and then to sections 9, 10 and 11.
I hope, since you’re back with us, you can help us to sort out the swamp. What exactly would section 7(7) do that is not already in the Broadcasting Act, and what would be the effect of striking it from the bill?
Robert Armstrong, Consultant, Société des auteurs de radio, télévision et cinéma: The Broadcasting Act at the present time gives the government — basically the cabinet — power to issue policy directions on broad policy matters, end of story. What section 7(7), 10(1) and (2), and 34.995 do is basically retake all of the powers that the bill would give to the CRTC and makes them susceptible to policy directions. This is a very detailed list of potential orders or ordinances of regulations, very minute. What proposed section 7(7) and the other two paragraphs would allow is for the government to basically direct the CRTC on a very large number of issues.
What I see is a huge transfer of power in this bill from the CRTC to the cabinet, and the cabinet would have an ability to direct the CRTC on a long list of very detailed issues. By removing that, we would come back to what is in the act at the present time, which is the ability to issue directives on broad policy matters.
Senator Simons: Does 7(7) do something specific to give the government direction over streaming services or would it, in fact, give it more direction over everybody who is in the ambit of the Broadcasting Act?
Mr. Armstrong: It gives more power over everybody, particularly those who are related to orders. In the first instance, the orders will be directed, as I understand it, toward the streaming services. But eventually, nothing would prevent the CRTC, and I would expect the CRTC, over the medium to long term, to move to a system of orders for all broadcast undertakings. The power of direction in 7(7) doesn’t specify online undertakings. It does give power to give orders and make regulations in those areas.
Senator Simons: Do you feel that undermines the authority and the autonomy of the CRTC and makes it more susceptible to political changes in the wind or does it, in fact, make the system more accountable because it gives people a link to an elected official rather than an appointed body?
Mr. Armstrong: I think it gives too much power to the cabinet. I think the power that they have in the existing act is adequate. It allows them to issue orders or directions on broad policy matters, such as the definition of foreign broadcasting, and Canadian broadcasting and other issues like that. It has done so. It has used that power usefully, and I think it should have a power of direction. These three paragraphs go far too far toward giving cabinet the ability to direct the CRTC on very specific policy issues.
Senator Simons: I am glad to have spoken with you again on the subject. I’m grateful.
[Translation]
Senator Miville-Dechêne: My question is for both the Association des réalisateurs et réalisatrices du Québec and the Société des auteurs de radio, télévision et cinéma. I won’t discuss your requests for amendments or your demands, because we’ve heard them several times. We’re well aware of them, as the Coalition for the Diversity of Cultural Expressions and a number of organizations have told us about them over and over again. There is obviously a great deal of consensus among francophone players on this issue.
I’d like to discuss something a little more touchy with you. You are united in your demands. However, there are two divides when it comes to Bill C-11: There’s a generational divide — some of you are younger than I am, while others are around my age. We’re seeing that this idea of clearly choosing not to have recommended content is very popular with young people. It’s a generational thing, but I’m even noticing it in Quebec, there seems to be a generational divide on this issue.
There’s also a divide in Canada, that is, there’s a great deal more support for Bill C-11 in Quebec and among francophones than in the rest of Canada. It’s not scientifically proven, but that’s what we’re seeing. I’d like to hear what you have to say about these two phenomena, over and above your demands, which are clear. I want to know how you see this from your perspective.
Mr. Pelletier: In my opinion, the generational divide speaks to a misunderstanding to some extent of the Broadcasting Act. If there’s a generational divide, it’s because people don’t understand the benefits this law has given us so far. The fact that we have a thriving industry today with 255,000 workers and artists in broadcasting and we’re able to have an industry that creates Canadian programming with so much talent and creativity, that’s because the Broadcasting Act has brought adequate recurring funding and has helped our creative industry flourish. What we’re doing today is prolonging that effect and including new players in the legislation.
We’re not making any big changes in terms of the intent of the law. If young people don’t get it, it’s because they haven’t experienced it. I don’t feel it will hurt young people’s creativity on YouTube and other platforms. On the contrary, again, it’s about fostering Canadian content.
Senator Miville-Dechêne: Does anyone else have anything to add?
Ms. Halpern: We agree with Mr. Pelletier’s and his association’s remarks. I’d just like to ask you to clarify your question. Are you talking about user-generated content or recommended content on platforms?
Senator Miville-Dechêne: I’m talking about both. I really didn’t specify, but yes, the ones who came out against the bill the most were YouTube creators, and to them, the idea of being recommended could hurt them on the international stage. That’s why I brought up the divide. Clearly, we heard from a lot more anglophone YouTubers. I wanted to know if you had any thoughts about that.
Mr. Pelletier: I heard some of that testimony. Those individuals are working together with YouTube. They share the profits. Platforms like YouTube really don’t want any rules imposed on them. Their partners, those who consider themselves business partners but are sharing revenue directly with them, will side with YouTube and other platforms.
I believe those creators, for YouTube, are going to be favoured in a system that fosters Canadian content. The fears — because they’re only fears — of having rules imposed and thinking that it will infringe upon freedom of expression are unfounded, in the same way that YouTube, with its algorithms, is going to recommend a certain type of production or creator and is going to continue to recommend them in the same way.
They want users, consumers, to be there on the other side of the screen and stay there. So quite simply, they’re going to recommend offering a more diverse selection of Canadian YouTubers or the same types of productions, the kinds of shows that are already being watched.
Senator Miville-Dechêne: Thank you.
Senator Cormier: My questions are for the ARRQ and SARTEC representatives. First I’d like to say that if there seems to be a generational divide, you could also say that there’s a divide in the types of artistic and cultural practices, and that’s making people perceive the bill differently.
My first question is about section 31.1, the inclusion of the section, and the exemption for Canadian online undertakings and foreign undertakings. My understanding is that there’s currently a legal gap, and that Canadian online undertakings and in-house production by foreign online undertakings lie there because they aren’t subject to provincial or federal legislation in their working relationships with artists. Have I understood correctly?
What’s your understanding of what an in-house production is, and what do we mean by that when we talk about foreign online undertakings? Ms. Halpern, Ms. Cyr, go ahead.
Ms. Cyr: Go ahead, Pauline. I’ll go after you.
Ms. Halpern: Mylène, stop me if at any time you don’t agree. I confirm that your understanding is correct. If this section is maintained, we won’t have a Status of the Artist Act applicable to our dealings with foreign online undertakings and Canadian broadcasting companies for their online undertakings. This is indeed the case.
Could you rephrase your second question?
Senator Cormier: What is your definition of “in-house productions”? What do you mean by that, so that we understand what we’re talking about?
Ms. Halpern: A broadcaster broadcasts content; the producer is the master of the production. In that sense, the broadcaster has three ways of interfering with the content. The first is simply to acquire the licence for content that has already been produced; the second is to acquire the licence for content that is being produced, to support it financially during production; the third, which you define as in-house production, is to be the producer of the work, that is, the broadcaster itself hires the artists. This is where the federal Status of the Artist Act comes into play.
If we look at the second case, where we finance the production, but we acquire a licence from a producer, in that case, our interactions will be with the producer, because the producer is the one who will hire the artists.
Senator Cormier: Why is in-house production not subject to provincial legislation?
Ms. Halpern: That’s because the main activity is broadcasting, which is purely federal in nature. We have a lot of case law that confirms this. I believe that the Library of Parliament online also confirms this. When a company’s main activity is federal in nature, the secondary activity — that is, production — is also federal. There can be no divide in that context. There are a number of legal precedents that confirm this. This leads us to the conclusion that this activity falls under federal jurisdiction.
I would go even further: This is the very reason why the federal Status of the Artist Act exists. We have such legislation in Quebec, but we need the federal Status of the Artist Act to negotiate with Canadian broadcasters licensed by the CRTC and, of course, federal agencies such as the NFB.
Senator Cormier: Thank you. If I have time, I have a question about the public hearings that, based on the requests, would not just be for licensing, but for orders too. We’ve heard arguments that it would be too cumbersome for the CRTC to have to hold public hearings for orders, that there’s already a consultation on the website, and that it’s difficult to get stakeholders to appear at public hearings here in Ottawa. I’d like to hear what you have to say about the real challenges, because these arguments seem weak to me to justify the idea that hearings should not be assigned to orders.
Mr. Pelletier: If I may, democracy takes time. It may seem cumbersome, but that’s the price of democracy. For us and for Canadian society, C-11 is just the beginning. We will need to hear from stakeholders across the broadcasting system so that the CRTC can make informed decisions. Public hearings allow us to hear from other stakeholders and respond to interventions.
This cumbersomeness is a small price to pay for, ultimately, improving the understanding of our new broadcasting system, including digital platforms for the CRTC and for Canadian society as a whole.
Ms. Cyr: I’d like to add to that, if I may. It’s certainly a good way to take into account the various viewpoints of stakeholders, especially since they have different experiences and tools. Not everyone can take part in online consultations; public hearings, in their current form, are more accessible to some people. They ensure a level playing field for everyone, so that’s another benefit of public hearings.
Senator Cormier: Thank you. It will have to wait until the second round.
[English]
Senator Manning: Thank you to our witnesses this evening. I wanted to make sure I heard correctly. I believe it was Mr. Pelletier — if I heard the translation correctly — that said YouTube is in partnership with the digital creators. Did I hear you correctly?
[Translation]
Mr. Pelletier: YouTubers and the platform, itself, share the profits and revenue. That’s what I meant when I referred to a partnership earlier. It’s not an equal partnership; they simply share the revenue.
[English]
Senator Manning: Thank you. Over the past number of weeks, we’ve heard the efforts by everyone to ensure that creators in Canada get paid for the work they do. So if the digital creators are getting paid from YouTube for the work they do, how is that any different than anyone else getting paid under the current system that’s in place now?
[Translation]
Mr. Pelletier: It’s in relation to creators in the traditional system, for instance, creators who produce dramas that are now broadcast on digital platforms such as Netflix or ICI Tou.tv.
In a nutshell, it’s about protecting the promotion of Canadian productions and their funding — because conventional television is in decline, and revenues and reinvestments in Canadian productions should include platforms such as Amazon Prime and Disney+. That will provide a financial boost, so more money for Canadian productions and a choice of programming by and for Canadians. It’s really just about providing a wider range of Canadian content and would not in any way hinder the freedom of expression of YouTubers and other such creators.
[English]
Senator Manning: Just so I understand, how is that different in the people whom you represent? How are they paid differently than YouTube paying the creators? Is there a difference? I’m just trying to understand.
[Translation]
Mr. Pelletier: Yes, there’s a difference. We negotiate collective agreements with independent producers mainly, but sometimes with broadcasters who make homegrown content, as Senator Cormier mentioned. That means advertising revenue isn’t being shared directly with the broadcaster. Instead, contracts are paid by independent producers who have been commissioned to make content that will be broadcast on digital platforms or by traditional broadcasters.
The difference lies in how the productions are funded. In other words, under the current system, broadcasting undertakings put money back into the system so that original Canadian content can be produced. That’s the only difference, and that’s what we want from digital platforms. We want them to contribute to the system, either by putting in money or by promoting our productions.
[English]
Senator Manning: The main thing is that we’re all advocating for creators to be paid for their work. Thank you.
My next question is for Mr. Goldberg of the Canadian Taxpayers Federation. Several witnesses have raised the spectre of retaliation as a result of the potential cross-border impact of this legislation. Konrad von Finckenstein noted, for example, that requiring foreign platforms to pay into Canadian programs from which they themselves don’t benefit will be a likely violation of the Canada-U.S.-Mexico free trade agreement, or CUSMA. I wonder if you share that concern. Do you have a sense in which Canadian sectors U.S. retaliation is most likely to fall on if Bill C-11 is passed as it is today?
Mr. Goldberg: Thank you for the question. I definitely share those concerns. We’ve already seen the Americans — representatives of the Biden administration and others — who have indicated they believe this legislation is dangerous and could have very negative consequences for the relationship between Canada and the United States, that we very well could see sanctions and that those sanctions could hit the creating sector as well.
Senator Manning: Thank you.
Senator Wallin: My questions are for Mr. Armstrong. I will till some of the same soil that Senator Simons did.
As I see these proposed changes, 7(7) and the other two related ones, this goes back to the very raison d’etre of the CRTC back in 1968. If you want to have an independent regulatory body that is separate from the government, which is clearly what they wanted and is why they created the CRTC, this seems to undo or undermine that very fundamental issue of an independent arm’s-length regulator. Is that how you see it?
Mr. Armstrong: I agree with you. The CRTC was set up in 1968 as an independent agency at arm’s length from the government. I think Bill C-11, at least in these paragraphs that we’re talking about, would result in an important transfer of power from the commission to the cabinet. They’re all the more dangerous because many of these orders, at least all of these orders that would potentially be subject to directives, would not be subject to public hearings the way licences are and would not be subject to appeals to the cabinet the way licence decisions are currently. I think that these three areas all work together and that in all three cases these passages should be either suppressed or amended.
Senator Wallin: I raise it too, because I would like your opinion on this. There has been lots of speculation on this, but why do you think the government is so intent on this? Mr. Thériault said it’s the “politicization” of this, and certainly an awful lot of people have suggested that it would give cabinet political control over content matters. Do you think it’s a question of them not trusting the CRTC? With the current people involved, there have been some concerns raised publicly about the relationship between the chair and officials and big legacy players. What is your theory?
Mr. Armstrong: I don’t have inside information on the motives of the government. I think one concern is that they are very wary of the relationship with the United States. They’re concerned that the CRTC might make mistakes in terms of the orders that it would issue for online undertakings, which could create problems between Canada and the United States, and therefore they want to be in a position to establish a framework themselves in the area of orders or ordinances.
Senator Wallin: The other issue — and you’ve just touched on it briefly — is that this would take the decisions made by the CRTC, or by cabinet via the CRTC, out of the appeals process and therefore undermine accountability. We’ve heard that the appeals process for a CRTC decision is already very expensive and very complicated. You actually have to be prepared to go to court, hire lawyers and spend a lot of money. There’s that side of it, but there’s also public accountability. Other than elections every four or five years, how would you say we disagree with the kinds of decisions you’re making here? The whole point of having public hearings and people being able to participate seems to be a more direct form of accountability than having cabinet make decisions.
Mr. Armstrong: Yes, I agree. I think that public hearings are a very important instrument for the CRTC in its decision making, and it makes the whole decision-making process much more open. At the same time, the CRTC can make mistakes from time to time — every agency does — and there has to be an appeal process.
At the present time, there are two appeals processes. One is through the courts on a matter of administrative law. If a decision of the CRTC is deemed by somebody to infringe administrative law, then it goes the way of the Federal Court. If it’s more of a policy disagreement over the decision, then that decision can only be appealed to the federal cabinet, and that’s the way the system works. For instance, the appeal by a number of associations and unions of the CBC decision was an appeal to cabinet, and cabinet accepted and endorsed the appeal and referred the CBC licence renewal decision back to the CRTC for a rehearing.
Senator Wallin: But that’s not a route that’s particularly open to user-generated content producers, people who create for YouTube or other platforms that are small, independent operations.
Mr. Armstrong: In a formal way, it is open to anyone. Of course, the government cabinet doesn’t want to be dealing with decisions on a day-to-day basis, doesn’t want to be accepted. So they very rarely accept appeals and there’s actually a list of all the appeals available on I think it’s Canadian Heritage’s website. The vast majority of them are refused by the cabinet, and I can understand why. It’s just not feasible.
The Chair: Thank you, Mr. Armstrong. Time has run out.
Senator Wallin: Thank you very much.
Senator Dasko: Thank you to the witnesses.
I too am very pleased to see Mr. Armstrong back with us, and I would like to continue with this line of questioning.
Mr. Armstrong, you talked about the greater powers that are given to the government under the clauses that you would like to see removed. Some of the government people have said to me that it really doesn’t change their powers that much, but let’s just leave that aside.
I wonder if you could give me some examples — a lot of examples if you could — of possible decisions that can be overturned in this legislation that would not be overturned without the clause or in the existing framework. Give me some examples of what would be your biggest fears of what would be changed, if you don’t mind. Dig a little deeper. I’m trying to understand this.
Mr. Armstrong: I’m a little confused by your use of the word “overturned.” There would not be any overturning. We’re talking about two separate things, or we have been up until now talking about two separate things.
One is the potential power of the cabinet to — and it’s only a potential power, they might not exercise it — direct the CRTC on a number of very detailed issues; and the other is the power to an appeal decision, which the CRTC can currently do on licensing decisions, but it would not be enabled to do on orders given by the CRTC to online undertakings, for example. Those decisions, those orders by the CRTC, could not be appealed to the cabinet.
That’s why I say there’s a process where the federal cabinet could give orders to the commission. The commission could then give orders to online undertakings, and those orders that the commission gives would not be subject to appeal.
Senator Dasko: Can you give me some examples of what you think could happen with the legislation that is there now, with the way the act is written?
Mr. Armstrong: I would have to look up, to give you very precise examples, but basically they’ve taken all of the powers that have been given to the CRTC, in terms of orders and regulations, and said all of those things can now be subject to directives from the government.
I did write an article in Options politiques on this issue, and I did go into some detail. It’s only available in French at the present time, but if you can Google translate it or whatever you will see it —
Senator Dasko: I read French very well.
Mr. Armstrong: You can see it; it’s on the web.
Senator Dasko: Okay, that’s great. Thank you.
The Chair: Mr. Armstrong, if you’re willing to table that with the committee, I think it would be helpful to the committee.
Mr. Armstrong: Yes, certainly.
The Chair: Thank you.
Senator Dasko: My next question is for Mr. Pelletier.
If the amendments that you are looking for are not made — the changes that would treat foreign entities the same as Canadian entities — tell me what the impact would be on your members. Are you still in favour of the bill? Does the bill still help you? Describe that for me, if you don’t get what you’re looking for.
Mr. Pelletier: The short answer is yes.
[Translation]
Yes, we are in favour of the bill’s passage.
If the amendments we are calling for aren’t made, the transparency of CRTC decisions is at stake. It’s important to have the ability to appeal the CRTC’s decisions regarding the orders it makes, especially for digital platforms. We are looking for a mechanism to reverse or review CRTC decisions. On one hand, it’s about being able to appeal the orders. On the other hand, it’s about public hearings and the ability to participate in the process before decisions are made; all stakeholders should be able to have their say in a transparent process.
Those are two of the measures we are calling for because we believe they would improve Bill C-11, even though we would still support the bill. The other measure we would like to see pertains to amendment 31.1. We touched on it earlier. Basically, we don’t think online undertakings should be exempt from the Status of the Artist Act.
Ms. Cyr: With respect to the amendment in clause 31.1, allowing the changes to stand would create two classes of artists: those who are entitled to minimum fees and benefits and those who are not. That would mean two types of producers, two types of undertakings. In our view, there absolutely needs to be consistency on that front. Another consequence of this measure is that it would undermine the rights we have been enjoying under the Status of the Artist Act for 25 years. If the amendment in clause 31.1 stands, existing collective agreements could have no legal basis. That would weaken the scope of the act and prevent associations like ours from being able to give notice to bargain.
As Ms. Halpern said, it is highly unlikely that digital companies that are under no obligation to comply with the act would agree to sit down at the bargaining table with us.
The Chair: Thank you.
Senator Clement: Thank you to the witnesses. I have a quick question for Mr. Pelletier. In response to a question from Senator Miville-Dechêne, I believe, you said that a lack of understanding of the current act has led to a false debate, one that does not represent the reality that emerged thanks to the act. How did we get to that point? What do we have to do to improve that understanding?
Mr. Pelletier: The first thing to do, I think, is to educate people to foster an understanding of the act, plain and simple.
Certainly, some disinformation was floating around. The purpose of the bill is not to restrict freedom of expression, on the contrary. The purpose is to support Canadian voices and expression. That includes not just the creators we represent, whether it be screenwriters or directors, but also YouTubers. They, too, represent Canadian voices and expression that will benefit under the bill.
Those creators seem to be afraid, but their fears are unfounded. The only way to change that thinking is through education, in other words, an understanding of how the system works. We are here to discuss the bill, and even we need to have certain provisions explained to us. Imagine, then, what it’s like for regular folks; it’s hard to understand.
The act has been around since 1968, and was meant precisely to encourage Canadian creative expression, our culture and our cultural sovereignty, in the face of the giants of the day, ABC, CBS and others. Today, there are new players, but it’s still the same game more or less.
Senator Clement: Thank you.
The Chair: Mr. Pelletier, among the many witnesses the committee has heard from are content producers who are very concerned. In fact, a lot of content producers in Canada are very concerned — Canadian content producers.
You said earlier that what YouTube and the other platforms were concerned about was profits. However, everyone is concerned about profits, because, without money, artists, producers, actors and singers can’t survive. To produce and promote Canadian content, you need profits.
At the end of the year, platforms like YouTube make money when their customers make money, and all their customers who are very concerned right now are producers of Canadian content. Currently, the platform is working from the premise that consumers decide on the future of the product.
You’re saying that someone else should decide how the algorithms are used, a group of bureaucrats, associations or people at the CRTC. At the end of the day, I’m quite comfortable with consumers driving the algorithms, but not so much when it’s the chair of the CRTC.
How do you respond to that?
Mr. Pelletier: I’m like you, Mr. Chair. I, too, believe in profits, and I think that businesses should make a profit so they can survive and that people who work with those businesses should also make a profit.
However, it’s not about manipulating the algorithms; it’s about an obligation to produce results. In the end, all we want is to give the Canadian public more choice and more Canadian choice. That’s all it’s about.
Consumers can still pick what they like. As producers of Canadian content, we simply want that content to be showcased, so that consumers can have the choice, so that consumers can have a wide array of choice depending on the type of programming they want to watch. That’s it.
The idea is to offer more choice, so consumers can see what’s available to them and still choose the type of program they want to watch.
The Chair: My sincere thanks to our witnesses this evening. We were obviously very interested in everything you had to say since we’ve gone over our 60 minutes, and I still have four senators on the list for the second round.
Once again, thank you very much everyone.
[English]
Thank you so much for your presence. Mr. Armstrong particularly, second round for you, thank you for your patience and your participation.
Honourable colleagues, we are now resuming our study on Bill C-11, the online streaming act. For our second panel, I am pleased to welcome Mr. Alan Willaert, Vice-President from Canada, American Federation of Musicians, who is with us by video conference; Mr. Luc Fortin, President, Guilde des musiciens et musiciennes du Québec; and Mr. Alexandre Alonso, Executive Director, Société professionnelle des auteurs et des compositeurs du Québec.
[Translation]
Welcome and thank you for joining us this evening.
[English]
Mr. Willaert, you have the floor, sir.
Alan Willaert, Vice-President from Canada, American Federation of Musicians Canadian Federation of Musicians: Hello, everyone. I’m Alan Willaert, vice-president from Canada of the American Federation of Musicians of the United States and Canada. I thank you for the opportunity to address this committee.
I would like to begin by stating the obvious, things you already know. The Broadcasting Act came into existence in 1936, in part to recognize and mitigate the overwhelming influence of radio beamed into Canada from the United States. Fast forward 86 years, and here we are with internet streaming.
The Status of the Artist Act was a solution to the problem that artists, being classified as independent contractors, were unable to collectively bargain an agreement under the Canada Labour Code. In the backgrounder I provided for you, we have outlined what we fear will be catastrophic results for artists, should the Status of the Artist Act not be applicable to online undertakings. I won’t rehash that document, but I’ll give you some other perspectives.
The companies we are talking about have wealth now measured in the trillions. I can’t even imagine how much that is. And yet, they are the most difficult to deal with because their motivation is entirely insatiable corporate greed. What I’m about to say makes no sense, but even the biggest, most expensive, theatrically released movies have music budgets that generally sit somewhere south of 0.5% of the total budget — less than half a percent. That includes all licensing, and yet musicians have the most difficult time of anyone negotiating a fair wage.
These companies would rather pay the star’s dog walker more than a musician — even including them in the credits — than they would pay a fair wage to musicians. Imagine a world where a musician on their own is trying to negotiate with these companies. They are exploited for their craft, and their normal royalties, such as publishing rights for the composer, are expropriated by using U.S.-style work-made-for-hire contracts. If they refuse to be so badly manipulated, they are swept aside in favour of someone who is more willing to demean themselves. The SAA is the only tool available to level the playing field on behalf of all artists. If rendered ineffective through the amendment, there is no future for musicians in the scoring industry. They may as well become dog walkers.
You will have received legal opinions stating that both online undertakings and derivative online undertakings are definitely federal jurisdiction. To arbitrarily determine that they are provincial jurisdiction will undermine the scoring industry completely. Only one province currently has SAA legislation that contains a collective bargaining component. While you may presume that therefore productions in Quebec are covered, this is not the case. The work will migrate to a province where there is no legislation, no collective agreements in place and once again, the Wild West will ensue.
In conversation I had with U.S. session musicians, I was made aware of some realities. First of all, music sessions are part of post-production, so when the stars’ salaries, the CGI or the catering trucks run over budget, these large non-union productions will look to see what can be cut. In one example, they cancelled the recording session entirely. However, they engaged an offshore orchestra in London, but it was also necessary to fly the conductor and selected key musicians — first violin, first trumpet, et cetera — with first-class airfare and hotels, to assist with the recording. When I asked, didn’t this cost way more money than the single afternoon session would have in Los Angeles? The answer was, of course. But the bean counters were happy because it would reallocate this to the travel budget not the music line. Nothing upsets producers more than spending money on musicians, regardless if they are critical to the creative value of the production.
We ask that you please eliminate amendment 31.1 for the sake of our artists. Thank you for your time.
[Translation]
Luc Fortin, President, Guilde des musiciens et musiciennes du Québec: Good evening. I want to start by extending my deepest thanks to the Standing Senate Committee on Transport and Communications for inviting me to appear, especially at this late hour. We are all working hard here.
My name is Luc Fortin, and I am the President of the Guilde des musiciens et musiciennes du Québec, as well as the head of local 406 of the Canadian Federation of Musicians, or CFM. You just heard from the CFM’s vice-president. The musicians’ guild was founded in 1905 and represents nearly 3,100 professional musicians in Quebec. We are recognized under both the federal and provincial status of the artist acts.
I want to point out that we have supported Bill C-11 since it was introduced, and we endorsed the findings in the Yale report, which preceded the bill. Bill C-11 is tremendously important for Canadian culture, as well as artists and creators. It is paramount that multinational corporations broadcasting media and cultural content play by the same rules as Canadian companies. For that reason, Bill C-11 is a major step forward.
I do, however, want to draw your attention to two aspects of the bill that require amending, so that the web giants like GAFA and Canadian companies are really treated equally. Let’s turn to proposed new paragraph 3(1)(f) of the act, which concerns the use of Canadian human resources. It’s clear from the provision that foreign online undertakings are not treated the same as Canadian broadcasting undertakings.
Canadian broadcasting undertakings are required to make maximum use of Canadian creative and other human resources, whereas foreign undertakings are required to make the greatest practicable use of Canadian human resources. It’s a subtle — yet important — difference. There’s a big difference between making maximum use and making the greatest practicable use of Canadian human resources. Inevitably, foreign producers will find ways to justify spending less on Canadian labour, claiming that they tried to make practicable use of Canadian human resources.
It will be easy for Amazon, Netflix and other web giants to subcontract movie soundtrack recordings to orchestras in Eastern Europe for cheap, only to argue that they had no choice because of the price difference. That amounts to taking jobs away from first-rate Canadian musicians.
All undertakings should be required to make maximum use of Canadian human resources, not just practicable use. Why make Canadian undertakings do something that foreign undertakings do not have to do in Canada? I also want to highlight the amendment to the Status of the Artist Act, which my colleague Alan Willaert just talked about and which has captured the attention of many of my counterparts in artists’ associations.
It’s a surprising amendment that was added at the eleventh hour, back in June, without any consultation of those it affects most. The application of the Status of the Artist Act gives unions the authority to negotiate fair working conditions for artists, who are self-employed workers.
Taking that right away from us will lead to poorer working conditions for artists, while creating a two-tier system, depending on whether the undertaking is foreign or not. Netflix, for instance, could decide to become its own producer-broadcaster to be exempted from the application of the act. Even CBC could opt to do that. CBC, which produces online content, TVA, in Quebec, and the National Film Board could now decide that, instead of subcontracting work to independent producers, they should open their own in-house studios for productions so they no longer have to abide by collective agreements. Poof, their obligations to unions, the assurance of minimum working conditions, would vanish.
The Status of the Artist Act must be left alone. It must remain intact so that all Canadian artists and undertakings are treated fairly.
Thank you.
The Chair: Thank you very much.
Alexandre Alonso, Executive Director, Société professionnelle des auteurs et des compositeurs du Québec: Good evening, distinguished members of the committee. My name is Alexandre Alonso, and I am the Executive Director of the Société professionnelle des auteurs et des compositeurs du Québec, or SPACQ for short. Thank you for this opportunity to speak with you today.
Founded over 40 years ago, the SPACQ is a professional artists’ association with approximately 600 members, songwriters and composers who work on musical, audiovisual and dramatic productions in Quebec and in French in the rest of Canada.
Global digital platforms are enjoying record increases in revenue, while artists are experiencing a widespread decline in their revenue. Why? Because consumers are moving from traditional media to digital media, but compensation for artists is not following that same trend.
In Europe, they refer to it as the “value gap.” Passing Bill C-11 would help to reduce that value gap: in order for our cultural content to generate more revenue, more people have to consume it. While global digital platforms benefit from the value we, as artists, governments and citizens create, the platforms refuse to share that value with us.
Behind a so-called desire to encourage personalization, global digital platforms are actually trying to achieve — in conjunction with the multinational entertainment companies — a single global market that consumes a single standardized product. Those companies are not loyal to any country, government or population, on the contrary. They see our national differences as a barrier to their development, so their goal is to erase them to more effectively ensure a single content offering all over the world.
It comes down to demographic weight and time: eventually, what the largest number of people consume will become what everyone consumes unless we do the right thing and protect our cultural health for future generations.
Here’s a situation you know well. In order to have legitimacy and be able to give people what they need, politicians have to reflect the people they represent. The same is entirely true for culture. We need the public to see themselves in our cultural content. When we identify with something, it unites us, shaping our national identity. Bill C-11 paves the way for just that: ensuring Canada’s culture is alive, vibrant and unique.
Let’s not let our identity be erased. Let’s not let the finance departments of international digital platforms and the marketing departments of multinational entertainment companies decide for us and erase our national identity to serve their goal of establishing a single global market for culture and entertainment.
Today I appeal to your cultural patriotism. Let us preserve our culture and our identity. Bill C-11 is the first step towards affirming Canada as a great cultural and digital nation on the world stage.
Let’s not be blinded by the myth of export barriers either. I know from experience that in order to export our music, we need external relays, organizations and people on the ground abroad who believe in our music; but for that to happen, we must first demonstrate strong local consumption, otherwise these foreign partners will not take the risk of importing a fragile product into their own territory.
Bill C-11 is also a fundamental tool to strengthen our freedom of expression and to make our voice as Canadians heard in the larger global conversation.
Let’s trust each other by allowing the CRTC to examine facts and regulate in a rational and balanced way, without giving in to intimidation from foreign companies and without letting our self-confidence falter. Let us trust and stand up to protect our children from cultural interference.
By maintaining section 4 as it stands, removing the new amendment to section 31.1, which allows online businesses to opt out of the Status of the Artist Act, and passing Bill C-11 as quickly as possible, together we take on the challenge of continuing to exist as a culture in the vast global marketplace.
In closing, like many other organizations, we recommend that you accept the minor amendments requested by the Coalition for the Diversity of Cultural Expressions.
Thank you for listening and I am at your disposal for any questions. Thank you.
The Chair: Thank you, Mr. Alonso. We will now proceed to the question period.
[English]
Senator Klyne: My first question is for Mr. Fortin. Of course, other panellists can offer their comments as well. The question relates to clause 31.1 of the bill, which affects the Status of the Artist Act.
Several groups — including a couple this evening — that represent small and independent artists have already expressed their concern with this clause of the bill and have stated that exempting online enterprises from the provisions of the Status of the Artist Act will have a negative impact on the working conditions and wages of performers who are contracted to work for online productions.
Mr. Fortin, could you quantify for us what you expect those negative impacts will be? Is it due to reduced wages or worsened working conditions or is it some other consideration that we should be aware of? Maybe you’d like to elaborate on the example you gave about NFB changing out employees in a studio. It’s not that easy to do.
Mr. Fortin: First of all, we have to make a distinction between federal institutions like the NFB or CBC or a broadcaster in Quebec like TVA, and a foreign online undertaker. Those are two separate things.
That’s talk about the NFB or CBC. We have collective bargaining agreements with these corporations under federal law.
Let’s talk about CBC. CBC, French and English, in the past produced a lot of programming and musical content. After a while, they decided to subcontract to independent producers. In Quebec, we have independent companies. There are a lot of them. They are represented by the AQPM in Quebec and the CMPA in Canada. They produce the content for the broadcaster. Then they are submitted in Quebec to collective bargaining agreements with the artists’ associations.
But if the NFB or CBC decide to open their own studio [Technical difficulties] right before, or online undertaking, then the law does not apply to them for that online undertaking, because they’re now back to the old days when they were producers. We still have a collective bargaining agreement with them when they produce, but for the online undertaking, we cannot.
Then all the collective bargaining agreements that we negotiated, painfully, over the years to get minimal conditions for our artists would be made void by this amendment — for the part with online undertakings.
There is a lot of online production. In Quebec we have TOU.TV and something else in English Canada. This is a real threat.
Senator Klyne: You’re telling me that your CBA would not prevent that from happening because it’s online producers versus in-house producers?
Mr. Fortin: Yes, because Bill C-11 would give power to the producer, the broadcaster, to get out of the law — being himself an online undertaking production company.
Senator Klyne: There are no survivor rights? If NFB was bought, that CBA doesn’t just disappear.
Mr. Fortin: The CBA will stay for the productions that are not online. But everything that is solely online would be exempted from the law. There are more and more online productions, so that’s a real threat.
For Netflix and the GAFA, it’s almost the same thing. They would be tempted to create their own productions and be exempted from the Status of the Artist Act. That would even be a threat for independent productions, because suddenly there will be unfair competition from Netflix because, oh, you cost more because you have to deal with the unions. We don’t have to, so it will cost less. That’s not hypothetical; that’s a real problem.
Senator Klyne: I understand.
I have a quick question for the Canadian Federation of Musicians. Your website refers to your organization as a complementary office of the American Federation of Musicians in the United States and Canada. Does that mean your office is owned by an American organization or do you have independence from them and can operate autonomously?
Mr. Willaert: We are an international union. I’m the director of the affairs in Canada, and we have a fair amount of independence, although everything is, of course, under the oversight of the international president.
Senator Klyne: Maybe you’re the person that I would ask this directly of. Have your American counterparts — and you’re one and the same, you’re telling me — expressed to you any concern about the implications of Bill C-11, and if not, my question was going to be — I didn’t realize you were as close to both of these as you are. I was going to ask if there was a sense of whether this bill is on your American counterparts’ radar screen, but if you’re wearing two hats, it’s on your radar screen.
Mr. Willaert: We have had no negative comments at all about Bill C-11 from American musicians or our office in the U.S.
Senator Klyne: Okay. Thank you.
Senator Simons: My question is also for Mr. Willaert. The day before yesterday we heard from John Welsman, the president of the Screen Composers Guild of Canada. He raised an issue at the end of his testimony that we didn’t have a chance to ask him about, and that was the question of post-production.
He said oftentimes international companies will come here to shoot the film and use all Canadian talent on the ground, whether those are the supporting actors or the grips or the film editors or whoever is working on-site, and he said then they will often take the film back to the United States for post-production, including scoring.
I’m wondering if you could comment, from your perspective representing the musicians rather than the composers, what does it mean when those productions spend so much money here but then take the film back to the United States for the music that goes in it post-production?
Mr. Willaert: It’s a problem. First of all, most of the big production companies such as Paramount, MGM, Castle Rock are under one of our American agreements. So for us that’s fine. If the production, if the scoring goes back to the U.S., it’s still our members; it’s still our organization. The vice-versa can happen as well.
Where it is a problem is when you have the non-union productions coming up here and they take advantage of the tax breaks and they take advantage of the lower costs and the lower wages because of the American dollar, and then those nonunion productions score elsewhere such as the U.S., but more often Prague or Bratislava or London.
Senator Simons: It’s not just that we’re competing with American musicians. Our musicians are competing against musicians who might be, as you say, in Prague or Taiwan or someplace where there would be accomplished musicians, especially classical musicians, who are doing that.
Mr. Willaert: Yes. One of the problems we’ve had in Canada is with the treaty films where you have a coproduction with a different country such as Canada-Ireland, Canada-France, Canada-Germany or whatever. In those particular cases, oftentimes there is a split of where the production takes place. They may shoot in Canada, in which case the post-production may take place in a country in Europe, or they may shoot in Europe and the post-production happens here. It’s a switch. Those things happen.
Specifically with the United States, there is no treaty with the U.S. in that regard. This is why we desperately want Status of the Artist Act in place so we can negotiate those terms and conditions.
Senator Simons: I have one more question, if I have time. It’s a little bit of a tangent, but it makes me curious. So many things in the field of broadcast and film production used to be extremely labour intensive, and lots of those things have become much less labour intensive because of digital technology. I’m wondering if you’re also seeing musicians losing out because people are able to score now using synthesizers and other technology to make actual musicians playing violins and oboes and saxophones perhaps not as necessary as they were 10, 15 or 20 years ago.
Mr. Willaert: Certainly. That has been going for 30 years. As soon as synthesizers came into place, that reality came into place. Now there are digital audio workstations. There is new one called KeyComp, which is a recording of the original instruments. There are lots of ways where musicians can be displaced by technology. We live with that, and we have to consider those things within our collective agreements and do the best we can for the musicians who are employed.
Senator Simons: Thank you very much.
[Translation]
Senator Cormier: I do not have a question for SPACQ, but I would like to take this opportunity to acknowledge the exceptional contribution of Mr. Luc Plamondon, Ms. Diane Juster and Ms. Lise Aubut, who founded SPACQ several years ago to help authors.
I see that the demands you are making, Mr. Alonso, are in line with other demands that we have heard and for which we have obtained answers. I just wanted to highlight the work of the founders of SPACQ.
My question is for Mr. Fortin, from the Guilde des musiciens et musiciennes du Québec. I was a member of this guild for years. I would like to make it clear to everyone that I have special knowledge of the guild from having been a member.
My question relates to paragraph 3(1)(f) on the difference that is required of Canadian online businesses versus foreign businesses in the use of Canadian human resources. Canadian companies are asked to make maximum use of Canadian human resources, while online companies are asked to make the greatest practicable use of Canadian human resources.
We had Mr. Ripley, the Assistant Deputy Minister of Canadian Heritage, here in committee and I raised this issue. At the end of his testimony, in answering the question about the difference between the two requirements, he said:
That is why the CRTC’s job will be to determine, considering the business model of all these services, the appropriate contribution they can make to the Canadian broadcasting system.
Do I understand from that statement that the CRTC, in any event, will have to assess the type of business, whether it’s a foreign online business or a Canadian online business, to determine the requirements? In other words, would it not be conceivable that both types of businesses could be subject to the same types of requirements? The CRTC will have to take a look at these two companies. My question is a bit long, but is it clear?
Mr. Fortin: Yes, your question is clear, but I would point out that the premise for assessing this contribution will not start from the same criteria. One refers to the maximum use of resources, and the other, “the greatest practicable use.” What does “the greatest practicable use” mean? I have budgetary constraints, I can imagine all sorts of things that mean I can’t do more than I do, but I go as far as possible. Whereas maximum use is not the same premise.
Senator Cormier: I apologize for interrupting you, Mr. Fortin, but that is the point of my question. Couldn’t we ask for maximum use of Canadian resources for the two types of companies that will then be assessed by the CRTC, anyway?
Mr. Fortin: We understand each other on that. Everyone in the field of artists’ associations wants it. It’s the same requirements for everyone. You can always do as much as possible and it will be up to the CRTC to assess whether the maximum has been done, but in order to do so, we must all start on an equal footing. We can’t start from two different premises.
Senator Cormier: I have another question that is as much for Mr. Fortin as for Mr. Willaert.
Here’s the scenario: If a Canadian songwriter whose songs are Canadian, he or she is Canadian, and he or she goes to the United States or another country to have his or her album recorded, in your opinion, does the work produced remain a Canadian work or is it tainted because it was recorded in another country?
What do you think about this thinking?
[English]
Mr. Fortin: Alan, you know much more than me about the Canadian content rules.
Senator Cormier: Mr. Willaert, do you have an opinion on that?
Mr. Willaert: I’m sorry, I missed the question.
Senator Cormier: The question is if a Canadian singer who writes their songs goes to the United States or another country to produce the album, is it considered by you as a Canadian product or work, even though it’s produced elsewhere than in Canada? Does it have to be produced in Canada to make it Canadian content?
Mr. Willaert: Canadian content goes to the maple rule still, where it’s manufactured, who the artist is, the lyrics and the composition. All these things come into play as to how much of it is Canadian content. It can be produced overseas but be written by Canadians and performed by Canadians, therefore it’s considered Canadian content.
Senator Cormier: Thank you.
Senator Manning: Thank you to our witnesses. I have a question for Mr. Willaert, and if any of our other witnesses want to answer that, feel free to do so. Those who have expressed support for Bill C-11 have argued that it will encourage online broadcasting companies to support the production of Canadian content while ensuring the protection of French, recognizing the particular status of a minority language in North America. It will be up to the CRTC to impose a regulatory framework with respect to the development and discoverability of content.
I have two questions. Do any of you have any concerns about leaving that level of authority to the CRTC, given what some witnesses have described as a closed-door process within the CRTC that often lacks transparency? And how concerned are you that years of potential uncertainty are introduced into the process?
Mr. Willaert: I don’t have a lot of concern about leaving it with the CRTC.
This is the Wild West in terms of the internet, and it’s a learning process. As we go along and if things are found to not be workable, I’m sure that things can be adjusted so that they are workable. I think that’s a process that has to take place.
Senator Manning: Would any other witnesses like to comment on that?
[Translation]
Mr. Fortin: The public hearings process will have a role to play in all of this as well, because restoring them will allow us to listen to Canadians, to act with transparency, to maintain trust between citizens and institutions.
Since the CRTC has a great responsibility, it is important that interest groups and citizens continue to have a voice. I think that in this way, we will be able to resolve complex issues in the interest of everyone, but with transparency.
Mr. Alonso: I’d like to add, if I may, that as a Canadian, I’d rather have the decisions that affect us made by an institution that represents and belongs to us than by the marketing or finance departments of foreign-based multinational entertainment companies. That’s a first point.
As a second point, the CRTC clearly needs resources. It needs resources to implement complex processes and it needs to build trust. Trust is attracted by using sufficient resources. The government should evaluate the resources it allocates to the CRTC to carry out this complex mission.
On the other hand, democratic processes can take place before the CRTC; public hearings — we’ve talked about that — which never happen when we hand this responsibility over to foreign companies whose headquarters are completely out of our control.
[English]
Senator Manning: Thank you. Another question for Mr. Willaert. I believe you’ve argued that an amendment to section 6 of the Status of the Artist Act, which states that “(3) This Part does not apply in respect of an online undertaking, as defined in subsection 2(1) of the Broadcasting Act” and potentially exposes artists to exploitation and erodes protection for artists.
Over the past number of weeks, we’ve had a number of artists and creators appear before us, who have not raised this as a concern that I can recall. I’m wondering, are not individual artists themselves the best judge as to whether they are being exploited or having their protection eroded through this bill?
Mr. Willaert: No, I don’t believe they are. The problem we have with musicians is they don’t know the agreements that are in place on their behalf. Musicians just want to play. If they’re offered a minute amount of money to do so, they will jump at every opportunity because they think it will lead to stardom. Unfortunately, we have to have these collective agreements in place to protect them. The original performance has to be protected. The reuse of those performances have to be protected. When it’s moved to a different medium or a different platform, there should be some kind of residuals for those musicians and their royalties. So many musicians don’t know what is available to them. They don’t know about the royalties that are under copyright. They don’t use paperwork. They don’t find out what revenue streams are available to them. They just want to play. It may be a huge educational thing, but it’s a constant battle that we have, getting the musicians to understand what is available for them, if they just look at the agreements that are in place, so no.
I’ll give you an example of some of the stuff that goes on. It used to be that — and our composer friend will back me up on this — a composer would get a package of $60,000, $70,000, $80,000 to deliver a final score and then he would hire the musicians to do the work. Now for some of these online episodes, where they only want one, two, three, four, five episodes of something just to see if it will fly in a niche market, they’ll offer a musician $50 and a credit line to deliver a theme song and play it. They figure if it’s terrible, it doesn’t matter, because it’s only going to last five or six episodes; but if it’s great, we’ve saved all kinds of money. Not only that, they expropriate the royalties. They want the publishing as well. They want to own the whole thing. That’s the problem with the big tech companies. They want to eat up all of it, they won’t give any of the rights, royalties or share of the profits with the musicians or the creators.
[Translation]
The Chair: Mr. Alonso, I listened carefully several times to what you said, that international companies are the ones who decide what we’re going to listen to, what we’re going to see, and that you’re much more comfortable when Canadian institutions make those decisions, such as the CRTC, a group of public servants, or the like.
When I look at the modern platform that’s out there, these people don’t decide anything at all, it’s just a platform. Wouldn’t you agree that it is open to all artists around the world, including Canadians? It gives them a chance to promote their products to a larger market than just Canada.
And in addition, the platforms’ model is based on potential. If their products, what they sell or what they put on their platform is listened to by a lot of people, it generates a bigger audience. Is it better to let the market and the audience decide if a product is good or not or if a product is prioritized, if there are high ratings?
Isn’t it better to have this platform, rather than a few bureaucrats, decide what is good for Canadians and the Canadian market?
Mr. Alonso: I will answer you using my daughter as an example. If a company that makes pizza wants to sell pizza to my daughter every day and she is used to eating pizza every day, she will ask me if she can eat pizza at every meal. As a parent, I will say no. As a parent, I know it’s bad for her health, I care for her and protect her; even if she wants to eat it and the company wants to sell it to her, I’m going to have to refuse. Our interests are not aligned with these companies that want to sell pizza and I want my daughter to experience something other than pizza.
The other phenomenon is convergence. As I was saying, these companies have an international reach; what they do is observe the international market. For example, a few days ago, I was talking to a marketing director of a multinational entertainment company. He told me that the two most popular music styles worldwide are Latin pop and Afrobeat. So we, in Canada, choose artists who do Afrobeat and Latin pop and then invest heavily in those artists.
I have no doubt that Latin pop and Afrobeat contribute to the richness of our Canadian culture, but the will of these multinationals is not to account for this Canadian richness and diversity; their will is to be able to sell to the greatest number what the greatest number listen to. It is therefore to create a single market that makes consumption homogeneous by erasing our particularities. We don’t have the same interests, and behind customization is standardization and therefore the obliteration of our national and cultural identity.
The Chair: Thank you very much. If there are no further questions, I think we’re done for tonight.
Thank you very much to our witnesses.
[English]
Colleagues, there’s great news I found out this week. Our good friend and colleague Senator Dawson has joined a very distinguished club of being a first-time grandfather. This week, he welcomed baby June, so there you go. Senator Dawson, congratulations. I knew one day you would reach many pinnacles, but that is a pinnacle of pinnacles. Congratulations.
(The committee adjourned.)