THE STANDING SENATE COMMITTEE ON TRANSPORT AND COMMUNICATIONS
EVIDENCE
OTTAWA, Tuesday, June 21, 2022
The Standing Senate Committee on Transport and Communications met with videoconference this day at 9 a.m. [ET] to study the subject matter of Bill C-11, An Act to amend the Broadcasting Act and to make related and consequential amendments to other Acts.
Senator Leo Housakos (Chair) in the chair.
[Translation]
The Chair: Good morning, honourable senators. I am Leo Housakos, senator from Quebec and chair of this committee. I would like to introduce the members of the committee who are taking part in this meeting: the deputy chair, Senator Miville-Dechêne from Quebec; Senator Clement from Ontario; Senator Cormier from New Brunswick; Senator Dasko from Ontario; Senator Dawson from Quebec; Senator Klyne from Saskatchewan; Senator Manning from Newfoundland and Labrador; Senator Quinn from New Brunswick; Senator Wallin from Saskatchewan; Senator Simons from Alberta; Senator Sorensen from Alberta.
[English]
We are meeting to continue our examination of the subject matter of Bill C-11, An Act to amend the Broadcasting Act and to make related and consequential amendments to other Acts.
For our first panel and first witnesses on this bill, we will have with us two distinguished Canadians. But before I introduce them, I would like to address something that occurred during the last meeting, because it is very important to correct it for the record so it doesn’t reoccur or set an unintentional precedent. The rules governing committees do not require that motions or notices of motions be given to the clerk, chair or members of this committee prior to being moved. Any such advance notice is merely a courtesy.
It is further a courtesy that motions be provided in writing to be distributed to members in both official languages. Motions, unlike documents, are read into the record when moved, with all members of the committee being provided simultaneous translation, thus satisfying official languages requirements. Therefore, a motion being distributed in writing in one language only is actually in order, and as such, Senator Richards’ motion last week was in order.
I wanted to set the record straight. As the chair, I assume responsibility for the error that was made. I thought it was important that it be addressed and that, like I said, it doesn’t become a precedent. My apologies to Senator Richards, and I hope, colleagues, that we all do a better job in the future remembering the rule. Thank you.
Without any further ado, I will introduce our witnesses: Mr. Konrad von Finckenstein, former chair of the Canadian Radio-television and Telecommunications Commission and former commissioner of competition, and Mr. Michael Geist, Canada Research Chair in Internet and E-commerce Law, Faculty of Law, University of Ottawa. I welcome you both and thank you for being here and launching off this study.
I will give our witnesses each six minutes for their presentations, and then we will go to questions and answers. I will be uncharacteristically very rigid today with the time. Each senator will have four minutes to ask the questions, and within those four minutes, guests will be required to answer. I will ask colleagues to be succinct in questions and our panel to be succinct in answering.
I will turn the floor over to Mr. Konrad von Finckenstein.
Hon. Konrad von Finckenstein, former Chair, Canadian Radio-television and Telecommunications Commission, as an individual: Thank you very much for inviting me to comment on Bill C-11, as passed by the House of Commons.
As former chair of the CRTC, I commend the government for tackling the problem of integrating streaming services, or streamers, into the regular Canadian system for broadcasting. They are clearly broadcasting in Canada, can earn large revenues and are presently exempt from the regulatory system.
However, I certainly do not agree with the way it was done and the concept behind it. I think more targeted legislation dealing with the specific problem of streamers would have been preferable versus potentially encompassing any transmission of music or video or both over the internet. This approach results in giving the Canadian Radio-television and Telecommunications Commission vast new powers to impose conditions or exempt online undertakings based on the vague concept of whether they “ . . . contribute in a material manner to the implementation of the broadcasting policy.”
However, the government chose this course, and the question now arises of how to improve Bill C-11 to make it workable and limit any collateral damage to the great engine of innovation of the internet that this may cause.
I have five points to make.
One, vesting such large powers with such vague parameters will prove extremely onerous for the CRTC. Every single stakeholder will come forward with specific requests for exemptions of conditions and argue they fall within the vast powers given to the CRTC. One cannot forget that the CRTC is a court of record that identifies issues, either on its own or via petitions; seeks input from affected parties and stakeholders; holds hearings, live or on paper; and then issues a decision. All that has to be done in accordance with due process and can be judicially appealed.
Consequently, narrowing the powers will allow the CRTC to make good, timely and targeted decisions. The goal, of course, is to protect and strengthen Canadian broadcasting and foster Canadian production. Hence, the legislation should target only large streamers who can meaningfully compete with established broadcasters. Small innovative internet players should be able to give their innovative drives full rein to contribute to the overall productivity of the Canadian economy.
Consequently, I would urge you to amend the bill to add subclause 2(4), which would state as follows:
This Act applies only to online undertakings which have more than 100 000 subscribers in Canada or revenue in excess of 100 million from Canada.
Two, there is no intention to cover user-generated content and thereby restrict the freedom of speech of Canadians. User-generated content, while it is generally exempted, can be made subject to the act by an exception to the exemption built into subclause 4.1(2) of the bill. Clearly, this subclause was meant to deal with hybrid streamers, such as YouTube, but there are great fears that it may affect other so-called “digital first” broadcasters who produce programs solely for the internet as well as ordinary Canadians uploading videos or music.
Consequently subclause 4.1(2) should be amended by adding the following limiting language:
2.1 Regulations made under sub section 2 (b)
i) apply to online undertakings with paid subscriptions or embedded advertising that transmit, both their own or commercial content and user generated content, and
ii) must be constructed in such a manner that user generated content is not affected.
Three, while the act is to protect, promote and foster Canadian broadcasting production, the Canadian Radio-television and Telecommunications Commission, or CRTC, should not forget it is Canadian consumers who choose what they want to watch. This choice is driven by market forces and only modified when necessary by regulatory mechanisms. This principle should be included in section 3 of the act, which spells out broadcasting policy of Canada.
Subsection 3(1) of the Broadcasting Act should be amended to provide the following:
It is hereby declared as the broadcasting policy for Canada that
(d) the Canadian broadcasting system should
(i.1) reflect and be responsive to the preferences and interests of its audiences;
(i.2) to the extent possible rely on market forces to ensure that Canadians obtain the programming of their choice;
Four, subsection 9(1) of the Broadcasting Act gives the CRTC basically the same powers regarding online undertakings as it does regarding licensed broadcasters, while sections 10 and 11 apply both to online and licensed broadcasters. When exercising these powers, the CRTC must keep in mind the difference between these two types of broadcasters. Licensed broadcasters offer programs on a fixed schedule, and their program offerings are driven by such factors as audience appeal, time slots and potential advertising. Their programs are only received over television sets via cable or satellite. Online broadcasters, on the other hand, offer programs for subscription or for free with embedded advertising. However, when, where and on what device the programs are viewed are totally in the hands of viewers. This difference must be borne in mind when imposing conditions on or making regulations regarding online broadcasters with the purpose of fostering the offering of Canadian programs. In no way should the ascertainment of viewers’ choices be influenced by conditions or regulations. However, the CRTC can compel online broadcasters to offer Canadian program alternatives, particularly when it comes to discoverability and showcasing.
I would, therefore, suggest an amendment to section 11 by adding a subsection 2.1, which would read:
2.1 Conditions imposed or regulations made by the Commission regarding online undertakings pursuant to sections 9.1, 10 or 11
1) shall
a) not compel on line undertakings to change the methods by which they ascertain viewer’s choice
b) respect viewers choices and leave them unaltered
2) may however require online undertakings to offer Canadian program alternatives as an addition to viewers’ choices
Five, the CRTC has the power to make regulations requiring undertakings to make expenditures and contributions to funds for the production of Canadian content. Most likely, this requirement will be to make contributions something like the Canadian Media Fund, which we have right now. Entitlement to the benefits from such expenditures should not be limited to Canadian ownership or control of producers or Canadian ownership of intellectual property rights —
The Chair: Mr. von Finckenstein, your time is over.
Mr. von Finckenstein: I have half a page, senator.
Under the Canada-United States-Mexico Agreement, or CUSMA, such restrictions, while falling under the cultural industry exception and, thus, technically allowed, allow our partners to take retaliatory measures of equivalent commercial effect. Since most streamers are U.S.-based, you can expect that to happen.
I would, therefore, suggest you add a subsection to section 11, reading:
(5.1) Where a foreign owned online undertaking is required pursuant to section11.1 to pay an expenditure to a person or organization, or into any fund, that undertaking shall be eligible to the benefits available from any such person, organization or fund as if it were Canadian owned and controlled.
Meaning, if you pay into the fund you are entitled to benefits from the fund.
That’s all, senators. Thank for you listening. Sorry for going over time.
The Chair: Thank you. Of course, I hate shutting down debate, and your presentation was certainly worthwhile. Mr. Michael Geist, you have the floor.
Michael Geist, Canada Research Chair in internet and E-commerce Law, Faculty of Law, University of Ottawa, as an individual:
Good morning. I’m a law professor at the University of Ottawa where I hold the Canada Research Chair in Internet and E-commerce Law, and I’m a member of the Centre for Law, Technology and Society. I appear in a personal capacity, representing only my own views.
I’d like to focus on two Bill C-11 issues today: the regulation of user content and the absence of thresholds that leads to an expansive regulatory approach. However, before I do, I’d like to make two broader points.
First, the House of Commons committee review was inadequate in my view, and the review that this committee is likely to be asked to undertake is, therefore, essential. While there is talk about the equivalent of five weeks of hearings, the reality is that in the race to rush through all witnesses in the span of a few days, many voices were excluded. These include Indigenous perspectives, such as the Aboriginal Peoples Television Network, community radio, and platforms such as TikTok and Spotify.
Further, the imposition of a motion that limited full clause-by-clause review to a single day meant that over 100 amendments were voted on without public disclosure, debate, questions to officials or the opportunity for subamendment. In fact, we will never even know the contents of many of those amendments.
Second, I would like to emphasize that criticism of the bill is not criticism of public support for culture nor of regulation of technology companies. I think support for culture is valuable and that one of the core problems in this area is that our current Canadian content rules are not aligned with our policy objectives.
Further, I agree with former Supreme Court Chief Justice Beverley McLachlin, who recently noted with respect to the internet platforms, that there is a need for legislated transparency, accountability and rules on data governance and privacy.
Given my limited time, I’d like to focus on two main issues: Bill C-11’s regulation of user content, as well as its overly broad regulatory approach and the need for greater certainty.
First, the regulation of user content. When Heritage Minister, Pablo Rodriguez, introduced Bill C-11, he stated, “ . . . we listened to the concerns around social media and we fixed it.” With respect, many of the concerns remain intact. While the section 4.1 exception for user content was reinstated, the addition of subsection 4.1(2) and section 4.2 — which together provide for the prospect of CRTC regulations on user content — were added. The bottom line is that user content is treated as a program, and the CRTC is empowered to create regulations applicable to programs that are uploaded to social media services.
The mantra that we hear that “platforms are in and users are out” is misleading. It is true that users are not regulated like broadcasters, but their content is subject to CRTC regulatory power. This is not, as some government MPs have taken to dangerously say, misinformation.
More than one third of the witnesses who appeared before the House committee raised this as a concern, representing the overwhelming majority of comments on this issue. That included digital-first creators, experts, industry associations and internet platforms. Further, CRTC chair Ian Scott confirmed that “ . . . section 4.2 allows the CRTC to prescribe by regulation user-uploaded content subject to very explicit criteria.”
You may ask why any of this matters. Some may say that the CRTC doesn’t regulate user content and isn’t interested in doing so. Yet, the CRTC also says that it makes decisions based not on its own interests, but rather on the public record. However, there are groups that want this content regulated — it wouldn’t be in the bill if there weren’t — and leaving the door open to regulation is a real risk, not a hypothetical one.
I want to be clear that the risk isn’t that the government will restrict the ability for Canadians to speak, but rather that the bill could impact their ability to be heard. The bill permits the creation of regulations on the “presentation of programs and programming services for selection by the public,” and since it treats all audiovisual content anywhere in the world as a program, the potential regulatory scope is vast.
Those regulations identify but are not limited to discoverability, which has rightly attracted attention since applying it to user content is both unworkable, as we do not have a mechanism to determine what qualifies, and potentially harmful to Canadian creators who may find their works harder to find globally.
The solution is obvious. No other country in the world seeks to regulate user content in this way, and it should be removed from the bill because it does not belong in the Broadcasting Act. Alternatively, remove the regulatory powers associated with user content but leave in the potential for contributions by the internet content platforms.
Second, I have a few comments on the overbreadth and uncertainty with this bill, which, as currently structured, covers any audiovisual content anywhere in the world. As a Canadian Heritage department memo on the issue noted with then Bill C-10, that includes video games, news sites, niche streaming services and even workout videos. The government says that some of these will be excluded in a policy direction, but it won’t release the direction until after Royal Assent.
Further, last week, government MPs voted down multiple amendments that would have established thresholds, including one as low as $25 million in annual revenue in Canada, well below what we just heard from Mr. von Finckenstein.
I believe there is a clear need for thresholds and limitations in the legislation itself. Without it, services may regard the regulatory uncertainty — which the House committee heard will take years to sort out — to block Canada, leading to less choice and higher consumer costs.
If the goal is to target the large streaming services or to exempt video games or niche streamers, say so in the legislation. While we’re doing that, borrow from the European Union approach of distinguishing between curated and non-curated services and use that as a way of establishing more targeted regulatory requirements or exemptions.
There is much more to discuss, but I’ll stop there. I look forward to your questions.
The Chair: Thank you so much, Mr. Geist.
My question is to both of you or any one of you who chooses to answer. When the current CRTC chair appeared before the standing committee in the House of Commons on this bill, he was quite frank in acknowledging that the provisions of the bill permitted the CRTC to regulate user-generated content. Mr. Scott stated he is not interested in doing that, but he did acknowledge that the bill provides the power to do so.
From my knowledge of the bureaucratic process, it seems logical that a principal reason that such a provision is in the bill is because the CRTC made sure it was there when the bill was drafted.
In your view, why would such an opinion be written into the legislation if, as the current chair has stated, there is no desire to regulate user-generated content?
Mr. von Finckenstein, I’m particularly interested in your point of view on this.
Mr. von Finckenstein: I’m sure Mr. Scott has no intention of regulating user-generated content. The problem is if you run the CRTC, the tighter the regulations are and the more specific they are, the easier they are to administer. If you have wide discretion and vast powers which you have to determine, everyone will try to squeeze themselves into these powers. So it is in their interests to have them precise.
They did not draft it. It was drafted by the department. I have no idea to what extent there was consultation between them. Usually there is limited consultation. From my experience at the CRTC, you give input and make suggestions, but they may not be taken onboard.
Why are they so wide? Presumably because it is difficult to amend the act. It hasn’t been done for 30 years. The idea is just in case the internet evolves into something that we don’t know, et cetera, it would be nice to have the powers. We won’t use them, but they are there, and we can control the direction and exercise direction given by the ministers. That, I assume, is the rationale behind it.
Mr. Geist: I have no idea what the CRTC wants or doesn’t want or its influence on the legislation. I don’t think it is a future-proofing issue. I think it’s an issue for today.
As I mentioned in my opening remarks, the CRTC says it makes its decisions based on the public record. When that record is developed, there are a number of groups that have gone to the government and said they do want to have these discoverability rules apply to this kind of content. So I don’t think it is by accident that it is there. It is quite clearly explicitly there because there is a desire to incorporate some of these groups.
Some of the witnesses who did appear before the House committee are major players and major exporters of Canadian content. They are deeply concerned about the potential for these regulations to harm their business models, but they may also be viewed by some Canadian players as competition, and the prospect of regulating within that space may seem attractive.
I don’t think it is inadvertent. It may well be the CRTC doesn’t have the intent at this moment, but if the CRTC is indeed driven by what it hears on the public record — and let’s face it, ordinary users are not going to show up to Gatineau to appear at a hearing — it is going to be the lobby groups that appear, and some of those groups have said they want to see these kinds of provisions included within the bill.
Senator Manning: Thank you to our witnesses this morning. It is a very interesting start to our study.
This question for Mr. von Finckenstein or Mr. Geist. Clause of the bill adds the following to section 4 of the act:
For the purposes of paragraph 4.1(2)(b), the Commission may make regulations prescribing programs in respect of which this Act applies, . . . .
There are a number of matters that the commission is obligated to consider in making such regulations. Based on your understanding of what this means, can the commission consider matters not specifically listed in the bill, and do you see any limits to what the commission may consider when it makes its regulations?
Mr. Geist: There are three prescribed elements that the CRTC is required to examine when it engages in setting regulations. The minister has described this as a sandbox; others have called this it a Sahara Desert.
It seems to me that the provisions themselves are potentially so broad as to encompass a very wide range of content. While it says that doesn’t include non-commercial user-generated content, at the same time, it speaks specifically to direct or indirect revenues.
To give you an example of just how broad that potentially is, TikTok has come to the conclusion from their analysis that it includes all videos that include music. We are talking about millions upon millions of videos that would all be incorporated within these regulations based on the way it is worded at the moment.
Mr. von Finckenstein: I would point out that subclause 4.1(2) says, “ . . . the Commission shall consider . . . ” What that means is if you actually have a hearing like that and someone brings forward that something should be included, you are obliged to consider it. You are obliged to consider the arguments for and against, and you then make the decision, and you have to justify why, after having considered this, you still decided to include this user-generated content or whatever. The main criteria will be because it reflects the policy under subclause 4.2(3).
So while this is essentially a procedural procedure, you have to address and consider these matters, but it doesn’t tell you what decision you have to make. As long as you can come forward with a justification, someone will always provide rationale you can effectively ignore these restrictions, or the sandbox, as Mr. Geist calls it.
Senator Manning: After considering the matters listed in the bill, in your view is the commission limited in its ability to prescribe programs, and would it be legally required for these matters listed in the bill to be met for the commission to prescribe programs in relation to how the bill applies?
Mr. Geist: My read is that it is exceptionally broad. It may well be that a policy direction that the government says is forthcoming, should the bill receive Royal Assent, will prescribe some limits, although, of course, that is just a direction. It is not in the legislation itself.
The act is, by intention, very broad, and any audiovisual content located anywhere in the world that touches on Canada is conceivably included as a “program.”
Mr. von Finckenstein: As a decision maker, the CRTC will not prescribe individual programs, but they will prescribe types of programs that get caught. As Mr. Geist said, it is very broad. If you want to, you can include anyone you want, and direction won’t help. If you want to exclude it, it should say so in the legislation. The legislation, by saying “shall consider,” does not include. It just forces you to take procedural steps before you can do what you want to do.
Senator Wallin: I have a question to Mr. Geist first. You have touched on this, but I would like you to expand in the following way: You have described Bill C-11 as a fatally flawed gateway to government censorship. On the other hand, we get the sense that it is already allowed for in the bill. What is your distinction there?
Mr. Geist: I think I called it fatally flawed. I’m not sure I referred to it as government censorship.
As I mentioned off the top, my view is that it doesn’t limit what people can say, but it does limit their ability to be heard. The reason for that is these discoverability regulations.
To give you an example in the context specifically, let’s say, of digital-first creators and how this works, when we watch videos — and I’m sure all of us watch videos on YouTube or some of the other services — the system looks at what we watch, how long we watch it and what we choose not to click on. The problem is if the CRTC effectively requires these companies to insert Canadian videos — however that gets defined as part of a regulation — these videos are not something that viewers’ behaviour has indicated they want to watch but are there by regulation. Then, if people don’t click on this content and don’t watch it, which is fairly likely because it is just not something they would typically be watching, the signal to the company is that this isn’t good content, that people won’t want to watch it.
The problem is that for many of those creators who earn the vast majority of their revenues outside the country, they may be getting more exposure in Canada due to CRTC regulation but they will get far less globally, resulting in a significant decline in revenues and their success online.
Senator Wallin: I would like you also to comment on testimony that was given at the House of Commons by a young YouTuber, J.J. McCullough, and I’ll quote his comments:
. . . it is simply impossible to regulate a platform like YouTube without also regulating creator content. It’s like promising not to regulate books while regulating what can be sold in bookstores.
Mr. Geist: I think he makes an exceptionally important point here, and that speaks to this claim that we regularly hear. Platforms are in and users are out. Of course, when platforms are in, what they are regulating or being asked to affect is that user content. He’s right in the sense that once you establish discoverability rules, the ultimate impact is on that user content. Of course, that’s by design. That’s what this legislation is designed to do. It is designed to have that influence, at least as currently structured, on user content, despite the fact that we regularly hear it’s out of the bill.
Mr. von Finckenstein: I’m sorry. I can’t agree with the comment you quoted, Senator Wallin. Let’s face it. This act is about getting money from the streamers to pay for Canadian content production. YouTube presents a specific problem because it has both user-generated content and commercial content. Therefore, this exception to the section that has been carved out, they might as well have called it “YouTube exception,” saying: “We want to be able to pick up money from YouTube from the commercial side, maybe even get it from embedded advertising for user content, but not influence the user content.” Leave it.
So the CRTC has to prescribe. If this bill passes in its present form, I’m sure the first thing they’re going to say is: “YouTube, come forward to the prescription that makes us get some money out of you but leaves user-generated content in peace.” The amendment I have suggested was exactly to that effect. Make that clear. I know that will happen, but it could in the future go much further. Limit this prescription to a YouTube situation in which you touch the money but not the user-generated content.
[Translation]
Senator Miville-Dechêne: First of all, I’d like to thank both of our witnesses for being here, especially Mr. von Finckenstein, who has worked at the CRTC and therefore has an intimate knowledge of this system.
I would like to follow up on Senator Wallin’s question, which is that — this is what I understand from your amendments — you would like that not only small players be excluded from the regulations, but YouTube as well because, as you say, it would have to be organizations that have paid subscriptions.
How can YouTube be excluded from such legislation, given that it is an important broadcasting platform for Canadian culture and francophone Quebec culture? Not trying to promote Canadian or francophone content on this platform deprives us of a large area of intervention.
Mr. von Finckenstein: Thank you for the question, senator.
I don’t think I was suggesting that we exclude YouTube, I was talking about excluding part of YouTube. YouTube has to pay its contributions to Canadian production, but I would like to see the non-commercial content that YouTube presents to Canadians not be subject to regulation. What can be discovered or presented is between you, the users and YouTube. I would like to see only the commercial part of YouTube affected.
We are not changing the way the platform operates; we’re focusing instead on the part of the legislation that will be applied to YouTube.
Senator Miville-Dechêne: Thank you, so perhaps I misunderstood the nuance.
I would like to ask my second question to Mr. Geist, still on the same subject.
I’m aware of what you know about francophone culture in particular and of the fact that, at the moment, you are against this form of regulation in Bill C-11, but after all, young francophone Quebecers are listening to less and less francophone music, which is quite a serious problem since culture is also transmitted through listening to music. I know that you are critical of this bill and you say “let’s fill up the funds and help Quebec musicians,” but that is not enough. For the culture to survive, people must listen to music.
I have a hard time understanding your position, which is quite radical on this issue, given that a minority culture like francophone culture needs visibility.
[English]
Mr. Geist: Thank you so much for the question, senator. I don’t believe my position is a radical one, which is how it came out in the translation.
I would say, based on what I said in my opening remarks, that there is the opportunity — and it is consistent with what we heard from Mr. von Finckenstein — for the prospect of ensuring these companies do make contributions. They can do it through tax. We can set up a system that ensures they are treated as platforms that have to make contributions that help fund the creative sector, but, at the same time, leave aside the discoverability rules that simply don’t fit in a user-generated content world.
I’m sure you would not point to countries like France or others as being radical or offside, but the entire European Union approach to this issue excludes these platforms from this kind of regulation. They recognize that there is a difference between a curated service, a service that makes choices about what people have the opportunity to see, that makes them more like a broadcaster, perhaps like a radio station, and thus can be subject to some of those discoverability rules, and a non-curated service that is wholly dependent on what users themselves are posting. The European Union approach does not include these kinds of rules for the very reason that it is almost impossible to identify who would qualify for this, much less interfere in this way in user choice. I think we should be ensuring that there are great opportunities for all creators, whether francophone or anglophone. But this approach, the discoverability rules imposed on user content, is not the way to do it.
[Translation]
Senator Cormier: My questions are for both witnesses.
My concern is the employability of Canadian cultural resources, both for Canadian broadcasting undertakings and foreign online undertakings.
Subclause 3(4) of the bill amends the wording of paragraph 3(1)(f) of the act and specifies, among other things — and this is important — that Canadian broadcasting undertakings must employ Canadian human resources in the creation, production, and presentation of their programming.
As for foreign online undertakings, they are required to “make the greatest practicable use of those resources.”
So I’d like to hear your thoughts on this difference between the two types of undertakings. Is this a challenge for the future employability of Canadian resources?
[English]
Mr. Geist: I think this is less about a discoverability issue and more about a CanCon system, Canadian content system, that, frankly, is no longer fit for purpose and needs to be addressed. One of the realities is that the large platforms already spend huge amounts of money in Canada. I think Netflix told the committee over $3 billion was spent on production and licensing in Canada over the last number of years. It makes them one of the largest contributors in the country. Disney said Canada was fourth on their list for production.
Part of the problem when we’re making an apples-to-oranges type of comparison is that those companies have identified productions they have funded. For example, Jusqu’au déclinwas made in Quebec by Netflix and had Quebec directors, actors and personnel. Everything about it was Quebec except for the fact that Netflix was the funder and owned it, so it doesn’t count as Canadian content. The same is true for Turning Red, the Toronto-based film that Disney recently produced or the Amazon series they produced on the Toronto Maple Leafs or, more recently, The Kids in the Hall.
The reality is that there is a great deal of Canadian content that is being produced by these companies that does not count as Canadian content.
It seems to me that one of the things we need to do to ensure the success of this kind of bill and legislation is to re-examine how we determine what counts as Canadian content, because it’s quite clear that the system doesn’t work as intended right now.
[Translation]
Mr. von Finckenstein: I completely agree with Mr. Geist. Our rules are outdated and do not work. There are other countries, like England, for example, that use a point system. If you use a Canadian production assistant, it is 10 points, if you use a Canadian actor, it is a certain number of points, and so on.
The goal is clear: we want to facilitate the use of Canadian resources and talent to make Canadian productions. However, the policies we have adopted at the Canadian Audio-Visual Certification Office, or CAVCO, at Telefilm and at the Canada Media Fund have as their objective the employment of Canadians, not Canadian production, which reflects Canadians and their values. This must be changed. I hope that once this legislation is in place, the CRTC will re-examine the rules and that if it applies them, it will do so consistently based on the representation of Canada rather than on the employment of individual Canadians.
As I said in my presentation, in the last point, we must ensure that if we ask for foreign contributions, foreigners must also have access to funds to employ Canadians and to make Canadian productions.
Senator Cormier: I had a second question, but it will be in the second round.
[English]
Senator Simons: Thank you very much to both witnesses for this thoughtful critique of the bill.
I want to start with Mr. von Finckenstein, and it has to do with the question you raised at the end of your comments about free trade and CUSMA. I wonder if you could, with a little more time, perhaps explain in more detail where you consider that there may be trade frictions engendered by Bill C-11.
Mr. von Finckenstein: Thank you for that question. As you know, I negotiated the original cultural exemption for Canada, so I’m very familiar with it.
Basically, the way it works — we’ve said in CUSMA and in previous agreements such as NAFTA, et cetera — is that anything you do in film, video and books can be in violation of the national treatment rules, the rule that you have to treat foreigners the same. That’s fine. You can do that. Do it to your heart’s delight. However, when you do it and it causes commercial harm to companies, then, while it’s not a breach of the agreement and the agreement is still there, you have to compensate to the extent of the commercial harm. It’s a self-help mechanism. The other country decides you have hurt their industry to the tune of $500 million. Therefore, they will put $500 million in tariffs. It can be on anything, not only cultural products.
What I’m worried about is that we’re going to ask Prime, Netflix, YouTube and all these American firms to pay large amounts into a fund for Canadian production, fine, they will do that. But in the end they may say, “We paid into it, but now we can’t get anything out of it.” Yes, you can do that. It is a cultural exception. However, the net effect of it is YouTube, Prime and others lose, in my example, $500 million, or whatever number you want. Therefore, we will extract that from us in another fashion.
We all know how powerful the media industry is in the States and how the politicians listen to it. It is a distinct possibility that such retaliation could occur. Therefore, in order to avoid this, I say that they should be able to access the funds to which they contribute; they’re eligible for Canadian production. If YouTube puts $250 million into that fund and YouTube wants to do a Canadian production — or Prime or whoever — they are eligible. Under other rules, they may not qualify, but they’re not disqualified because they’re not Canadian. That’s the point I was trying to make.
Senator Simons: This is an interesting point, because as I understand the Canada Media Fund, the only way you can get money out of the Canada Media Fund is if you are an established Canadian producer who has already contracted with a Canadian broadcast network or cable network to show your programming.
Mr. von Finckenstein: You’re absolutely right.
Senator Simons: The minister talks about $1 billion a year. Let’s assume that’s a bit optimistic. But if it is $1 billion a year, that is a bonanza. I’m concerned that the way our media funds are currently structured, that money will go almost exclusively to established Canadian producers to be shown on Canadian television.
Maybe this is a question for Professor Geist as well. Let’s assume the hypothetical of $1 billion a year. What action do we need to take to make sure that money is distributed fairly so that emerging artists can also have access to that money?
Mr. von Finckenstein: There are two different questions here. I will let Mr. Geist talk about the emerging artists.
If you put it in the CMF, you have to change the CMF or else you have to set up a new fund that doesn’t have these restrictions. The fifth amendment that I suggested deals with exactly that thing. When it’s foreign money that’s being put into a fund, those foreign contributors are also eligible to access the fund as long as they produce something Canadian. That would eliminate that problem.
The second one, Michael, over to you.
Mr. Geist: I have three quick points on this.
First, I think the $1 billion is incredibly optimistic. In fact, I think it’s a bit misleading. What we heard from many of the large streamers is that they already spend significantly in Canada. Some of that, we’ve heard, doesn’t count as CanCon, but the notion that somehow these companies are going to now dig in for an extra $1 billion rather than reallocate what they are already spending in Canada to ensure that what they do spend appropriately qualifies, the latter strikes me as the far more likely outcome. In other words, it’s not a net new $1 billion; it’s a shuffling, for the most part, of a lot of the money that’s already being spent in Canada in other ways.
In terms of emerging artists, I would urge this committee to take the time to listen to some of the digital creators that appeared before the House committee. They made it clear, first, that they have not been focused on this system of finding ways to generate new revenues. They’re entrepreneurial and globally focused, and they believe they can make it without this kind of reliance and dependence on the system.
That’s not to say there isn’t a role for this system. Of course, there absolutely is. But we ought to recognize that many of those kinds of emerging creators are not looking to buttress this system. They’re looking for regulations and the government to get out of the way and allow them to pursue their ambitions and creativity, and they believe they can do so without the necessity of relying on the current system itself.
Senator Dasko: Welcome to the witnesses. You are our first witnesses at our Senate committee, so this is a great start for our process.
I have a couple of questions for either guest, first with respect to the diversity clauses. The system will serve the needs of all Canadians, including those from racialized communities, diverse ethnocultural backgrounds, socio-economic status, abilities and disabilities, and others. The government makes a great deal about diversity. They use it a lot in their messaging, I’ve noticed. Will this actually be manifested in the way the system will work, given these clauses? Is this just window dressing or is it going to be some sort of requirement in the way that the oversight actually happens? That’s my first question.
Second, I would like to dig a little deeper into the CanCon issue, which was just raised a couple of minutes ago. Is the measurement of CanCon going to change? I assume so, but I would like your sense of how you think it will change. Also, what about the requirements for CanCon? We know that broadcasters have very specific requirements. Are the requirements going to change?
Third, are we going to see a difference in the requirements between online broadcasters and conventional broadcasters as we go forward, or do you actually see the so-called level playing field actually becoming the level playing field?
Those were a bunch of questions, but I’ll throw them all out there.
Mr. Geist: First, I would note that just last week at the Banff festival, the Black Screen Office focused on really advancing policy in this area. The references to diversity are fantastic.
While it’s more in the range of policy within the legislation itself, I think it would have been helpful for the committee in the other place to have heard from groups like APTN if they’re serious about these issues. It’s stunning that they didn’t. Nevertheless, this committee has the chance to correct some of that.
As to whether CanCon will change, I would argue that these rules should have changed really before this legislation came forward. In regard to the success of what is trying to be achieved here in enhancing the amount of Canadian production, we have to arrive at what it means to have Canadian productions in the current environment. We know that there are record numbers of film and TV productions right now in Canada. We know that a lot of those do not count for the purposes of CanCon.
Is this an economic policy where we want as many people working as possible, in which case, there’s huge success right now in the sector?
Is it a “telling Canadian stories” policy? If it is, many have acknowledged that the current system does not require Canadian stories. We know that often, Canadian stories don’t count and non-Canadians do.
Is it an intellectual property policy? It can be.
It is all of those things, in part, but we should have been addressing these issues beforehand, and we still need to address these issues.
Quickly, finally, in terms of the level playing field, I would note, first, that the reality is that broadcasters have a whole series of advantages over streaming services, from simultaneous substitution rules to must-carry rules. The idea that, somehow, if we make them pay, it creates a level playing field — There have been advantages to being in this system for quite some time that have made it a bit more apples-and-oranges than anything else.
That said, it is likely the CRTC will recognize that streamers and broadcasters are not identical, and they both must contribute but not necessarily contribute in precisely the same fashion.
Senator Dasko: Mr. von Finckenstein, I’m not sure if I have much time left.
Mr. von Finckenstein: The reference to racialized communities and differences, et cetera, no, it is not mere window-dressing. Once they’re there in the act — obviously they should have been there — but now that they are there, when you have hearings, people will come forward and say that because of this section, et cetera, they will suggest specific measures that should be adopted by the CRTC. The CRTC has to consider them and will obviously pay heed to them.
In terms of Canadian content, I totally agree with what Michael said. In terms of the difference between licensed broadcasters and online broadcasters, I hope the CRTC, notwithstanding the legislation as drafted means that you can apply the same conditions to both, will realize that these are different technologies, working on totally different bases and are marketed differently, and it just doesn’t make sense to treat them the same.
So while they have the same powers, it will be applied differently. Although no one will admit it, there is one rule for licensed broadcasters and one for online broadcasters. You have to. You are driven there. Then when you make rules —
The Chair: I apologize for interrupting, but we must move on. Thank you.
Senator Quinn: Thank you to both witnesses for appearing today. This is fascinating and helpful. Many of my colleagues have expertise in this field, but this is new territory for me.
My concern has been all along — We are in a pre-study, and I just watch how it has proceeded through the House of Commons. You folks have acknowledged it’s gone quickly. Witnesses haven’t been called, so this is very helpful.
Given that many amendments have just been pushed through without much discussion at all, this committee is going to continue to study this topic in the fall, and I hope both of you gentlemen would be available to come back in the fall when we resume studying this in more detail, because this has been very helpful. Thank you.
Senator Klyne: There are very interesting perspectives here. Unfortunately, I missed the front end of this, but I don’t think that I’ll be going over something that has been covered already.
This is what I struggle with: In regard to Canada and the critical mass market south of us, the capitalist economy is the most predominant in the current global market of economies. There are four characteristics about that: private property, freedom of choice, profit motivation and competition. I can accept that perhaps this is all about money. I do tend to rely on the idea that the act should rely on market forces.
I’m told the minister’s office wants CanCon to be discoverable. I believe it should be sought after. In order to be sought after, you need to have people that actually engage with it, they want to repeat it and refer it to others, and the provider as a good reputation of delivering consistently good content.
Also, to be sought after, there’s promotion. Many artists — performing artists, artists generally, on the music and cinema side — they look for that exposure and promotion. They don’t look out the window and wonder where the next audience is or attendance is coming from; they go to festivals and tour; they take a residency in Las Vegas.
“Discoverable,” to me, is starting to take on a connotation of foisting content on audiences, hoping that they can lure some into that, whereas with “sought after,” there are creative services that will promote things. Where do you think the money should go? Should it go toward making CanCon “discoverable” and foisting it on audiences, people or markets, hoping for a strike, or should it go toward making CanCon “sought after” in a way that’s more methodical, purposeful and promotional?
Mr. von Finckenstein: Senator, regarding promotion, if you’re the CRTC, you try not to get in it because promotion means choices, and the choices should be made by the viewers and not by the regulators. So you stay away from promotion.
You make sure there are offerings that people can choose from, et cetera. For instance, in licensed broadcasting, you have specific CanCon; you have to offer so much in prime time, et cetera, and by genre. But all of this still requires a person to want to watch it.
When you go online, of course, a person watches when he wants, how he wants and you can’t influence it.
What I’ve suggested in my amendments, the most you can do as CRTC is to say, “Don’t screw around with the algorithms; don’t make them show something different than what Canadians want.” The algorithms are there, and they indicate that people want to watch this or that, et cetera. Let’s take a specific example. Someone watches a lot of British mysteries. There is nothing wrong with the CRTC saying, “The algorithm says this person watches British mysteries, but here are Canadian alternatives that might be interesting.” It is still the viewer’s choice, but they are being exposed to Canadian alternatives that they may not have been aware of.
That is what the regulation can do. I don’t think they can promote. They certainly can’t, for online undertakings, demand that something be shown at a certain time or in any way. The whole system functions on the basis of what computers ascertain are people’s preferences for what it shows and doesn’t show. All you can do is add to that system by also putting forward Canadian alternatives they may wish to look at.
Senator Klyne: That was quite slanted on the online. Can Mr. Geist respond?
The Chair: We are over time. Mr. Geist may respond briefly, as we are well over the four-minute mark.
Mr. Geist: Thanks. I would note two things. First, the former CRTC chair, Jean-Pierre Blais, raised exactly your question a number of years ago, talking about whether there should be some amount of funding allocated towards the discoverability side of the story. The response from many in the Canadian creative sector was no. They said give us our money to do the production. The money for discoverability should be additive, not replacing the production side. That was their view.
I think you are right, though, that there is an element of saying that if your stuff isn’t being seen, then its impact is obviously lessened and we need to be focusing on that.
Secondly, I would emphasize that not only is there little evidence that there is a discoverability problem, the Yale report couldn’t find much in the way of any evidence.
I would urge any senator to go on YouTube or Netflix and start with a fresh account and see how quickly the system responds to what you are looking for. I tried it in both English and French on YouTube. Inside of literally a few minutes of watching some videos consistent with my likes, it is recommending more of that.
If we are right that Canadians do want to see more of their stories and content, the incentives are clearly there for these services to do that. In many ways, that is what the algorithm is designed to achieve.
Senator Clement: I want to thank both witnesses. I want to come back to a comment from Professor Geist.
You were talking about emerging artists not necessarily wanting to buttress the system or access anything and who want to be able to pursue their own creativity. I have been talking to emerging artists and creators, and they have the opposite view. Certainly, those with barriers and vulnerabilities really do want that access.
Can you comment on that and whether there is more of a need for those with barriers and why the group that you are referencing would see that as a barrier to them pursuing their creativity?
Mr. Geist: Thank you for the question, senator.
I wouldn’t suggest, and I didn’t mean to suggest if I did, that it is a barrier. I simply meant that the digital creditor side, in particular — those who have found a way to reach audiences and find commercial success on services such as YouTube or TikTok — haven’t really seen themselves as being part of this core system. In some ways, bringing them into the system from a regulatory perspective, I think in their view, is simply the wrong way to go.
A good example is Oorbee Roy, who goes by the name Aunty Skates. She is 47 years old, of South Indian origin, and has found an audience. She offered what I think was really compelling testimony where she said, “In the past, I haven’t been able to have my voice heard. I have been ignored. I look at the CRTC and nobody there looks like me.”
People who look at the current system feel that they have not been well represented. That is not to say that we shouldn’t be working to change that system to ensure that they are. Those who want to have those opportunities have the ability to do so. To speak to Senator Dasko’s question, that is why the diversity language is really valuable.
One of the other lessons that we have seen through the hearings so far and from the lessons of what takes place online is that the internet user platforms offer opportunities to many diverse voices that simply didn’t exist in the conventional system before.
Trying to impose some of the conventional style regulations on that expression, let’s say through discoverability or through CRTC regulation, is simply inappropriate.
Senator Clement: Thank you.
The Chair: Thank you. Colleagues, we have gone over our allotted hour for our two guests; it was due to the fact they were both informative and interesting. We have a second round of senators who would like to intervene but, unfortunately, old man time has run out.
I would like to thank both our witnesses, Mr. von Finckenstein and Mr. Geist, for their presentations. In the fall, through popular demand, we may have you back for an encore. Thank you very much.
We will suspend now for a couple of minutes to make a change of witnesses. Thank you.
[Translation]
The Chair: We’re continuing our preliminary examination of Bill C-11 with our second panel.
We’re pleased to welcome Ms. Michèle Rioux, professor, Department of Political Science, Université du Québec à Montréal, and director of the Center for the Study of Integration and Globalization.
We also welcome Mr. Alain Saulnier, author and retired professor of communication at the Université de Montréal.
Welcome, and thank you for joining us this morning by video conference as we continue our review of the contents of Bill C-11. You have six minutes to make your opening statement, and then we’ll proceed to question period with my colleagues.
Michèle Rioux, Professor, Political Science Department, Université du Québec à Montréal, Director of the Center for the Study of Integration and Globalization, as an individual: I am very honoured to be here to tell you about the research I have done on discoverability. I hope it can inform your process.
First of all, I have to say that I have followed the development and implementation of the Yale report and all the bills that have come and gone. I have found these debates very interesting. I must say that, as my colleagues pointed out in the first panel, there is no perfect legislation. I might have some points to make regarding what was said about the old world compared to the new world, namely that we are somewhat between the two worlds — in a world of transition. Obviously, we are moving towards a new world. We cannot use the current law to predict where we are going. Even if we have to be very precise, I think we have to be quite clear-sighted, leave margins and trust the deliberation process to predict what will happen next.
As was said earlier about the Internet, I think that we are in a digital transition and we are in the process of making adjustments. Obviously, there are great opportunities for the dissemination of culture, the diversity of cultural expressions and the consumption of products from around the world. I think we should not lose sight of that. Threats also exist, and this is what we have tried to document.
We did a study for France in 2015, which highlighted the importance of opportunities, but also of predictions about cross-cutting guidelines at UNESCO, which could make sure that states move towards regulatory frameworks that ensure the promotion and protection of the diversity of cultural expressions.
When I returned from presenting this study in Europe, I was very concerned about the shape of public policies and regulatory frameworks. How should we evolve to migrate regulatory frameworks and laws to this new world? At that time, I decided to create a laboratory within my centre called the Laboratoire de recherche sur les transformations des industries culturelles à l’ère du commerce électronique. Our first project was to create an indicator for measuring discoverability.
As was said earlier, it is very difficult to define Canadian content. We didn’t define what a product was, but we took a basket of Quebec products and lists that our industry partners gave us for music and audiovisuals, and we developed a methodology based on “the presence, the visibility and the representation” or PVR method, which more or less measures what Mr. Geist defined as curated services — because there is an aspect of streaming that is still curation — and recommendation.
The PVR method has enabled us to do harvesting, profiling — as Mr. Geist said earlier — and profile analyses. We also did qualitative studies to analyze platforms, especially those that could pose a problem in Canada in the context of this digital transition to streaming, namely the new ways of consuming.
We found that there are a lot of barriers to discoverability, even though the potential is huge. Our music listings were 75% to 85% present, depending on the platform, because they represent different business models. This percentage dropped dramatically in terms of visibility and even more so in terms of recommendation. We can, of course, have a lot of potential for international outreach, but how do we get out and eliminate these barriers to discoverability?
These barriers are even greater in the audiovisual field, because there are few Canadian films. When we looked at Netflix, Apple TV and others, we found that we were not present at all, and if we are not present, we can neither be seen nor recommended.
This study lasted 18 months. Every day we checked the developments and it didn’t change much. I am told that it is fluctuating, but our research is finished and the results I am giving you are from 2018.
We concluded that joint responsibility was necessary to break down these barriers to discoverability. What we mean is that the users have as much responsibility to know that their way of consuming will influence the algorithmic machine, the way the platform will interact with them, as the industry has to adapt to the platform standards. All sorts of processes and practices need to be changed. Quebec had a digital cultural plan that favoured this transition.
There is also the regulatory framework. What you are trying to do now, which is to adjust the legislation, including perhaps some passages that are areas of debate and grey areas, is quite important to remove some of the structural barriers to discoverability, those that cannot be removed simply through consumer choice.
I’ve heard a lot today about consumer choice. Does the consumer really make a choice? That was the central question. Does the consumer explore the content and discover it, or is there an element of curation, intermediation and pressure from different business models, which have become dominant in our societies?
I will conclude by saying that I find the idea of having an evolving regulatory framework capable of innovating over time very interesting. In my opinion, this is the model for the future. Some of the elements contained in Bill C-11 open the door to that and, above all, to a CRTC that plays a more important role in terms of research, so that it can truly document the problems and be in a position to negotiate or engage the transnational undertakings that constitute the GAFAM, which also have everything to gain by adjusting and making Canadian, Quebec and francophone content more discoverable.
Thank you for listening.
The Chair: Thank you very much, Ms. Rioux. Mr. Saulnier, you have the floor.
Alain Saulnier, Author and Retired Professor of Communication, Université de Montréal, as an individual: Thank you, Mr. Chair, for welcoming me to discuss this bill. I retired from teaching journalism at the Université de Montréal. I taught there for 10 years, investigative journalism more specifically. In this context, I became partially interested in the relationship of media and culture with digital giants, as I noticed that our media and culture were increasingly marginalized by the digital superpowers. This expertise led me to publish, last February, a book entitled Les barbares numériques : résister à l’invasion des GAFAM, or The Digital Barbarians — Resisting the GAFAM Invasion.
I should point out that in a previous life, I was also the director general of information at CBC’s radio and television stations.
I was saying that I was very interested in the relationship between culture and our media with the digital giants — American for the most part, let us not forget — these giants, which I describe as barbarians, because they have acted like invaders. They have challenged our borders, our regulations, the authority of the state, our tax system, and produced collateral damage such as disinformation, the radicalization of discourse on social networks, the weakening of our media’s business model, while others, like Amazon, are now threatening the existence of our businesses.
In my book, I wrote the following, roughly translated:
This will go down in the history of the Western world as the greatest conquest of the 21st century. What am I referring to? The conquest of the digital universe and our territories by American superpowers. It is in fact the most devastating attack on national sovereignty that countries have experienced in the new millennium.
That is why I believe that countries and their institutions must take the appropriate steps to protect our media and our culture. The problem is that we have not understood that, for us francophones, this invasion into our territory by the digital giants has led to the marginalization of our media, our language and our culture.
We must always remember that these giants are predominantly American. We have to resist this invasion. I think the current Bill C-11 truly offers a way to do this. There will be other ways of resisting GAFAM — I hope — but this offers a way to regulate our cohabitation with the American media giants. Putting foreign and Canadian digital companies on the same footing is essential. Giving the CRTC the power to regulate all digital activities related to culture and communications can encourage healthy cohabitation between these digital giants and our companies, creators and the public. Requiring these superpowers to reinvest a significant portion of their Canadian revenues into local creation and production is one way of supporting our cultural sector and media. Above all, it is the right way to counter the American content that dominates these platforms.
So what should we do? Protect our cultural sovereignty. Not doing anything will lead us back to chaos, and we will not win at that game. Not doing anything will let these digital giants and their definition of market forces dictate what is good or bad for us. Thus far, they have refused to recognize the authority of the state. As we have seen, they have failed in self-discipline, in the role of the great content regulator. False information has piled up like their record profits.
Canada has always been able to react to American companies that wanted to flood our territory with their cultural content. That is why the CBC was created in 1936 and why the CRTC was given the power to regulate communications. In 1952, the government created CBC/Radio-Canada television, once again to counter the invasion of American television content into our territory. Unfortunately, the CRTC dropped the ball in 1997 when it decided not to monitor the Internet in order to allow for its growth. And expand it did, that is for sure. Nowadays, people under 35 swear by the social networks and platforms of these American giants. They get their information from social networks, which weakens our media. YouTube is now their main access point for music. How many of the 10,000 most popular performers in Quebec are from Quebec? According to analysis, they account for 8%, and just 6% in French. Try to find the music of Hubert Lenoir or Ariane Moffat on their top list. How can singers make a living when they earn just 5¢ each time someone listens to them on YouTube?
Another source of concern is that, for the first time in our history, conventional television has now been overtaken by listening platforms such as Netflix, Amazon and Disney+. According to the Media Technology Monitor, 70% of anglophones and 58% of francophones in Canada are Netflix subscribers. It is now the main access point for television series and movies, but not our productions. So now we have to go back to the same exercise as in 1936 and 1952. We have to find ways to protect and support our culture. It is a big challenge, especially for francophones. According to Statista, 63.7% of Internet sites in the digital world are in English, while just 3.3% are in French.
The current Broadcasting Act was enacted in 1991 under the leadership of Marcel Masse, a Conservative minister. That was long before the Internet and the American digital giants.
Today these giants want to set their own rules and defy ours. As we can clearly see, they are undertaking a massive lobbying effort and joining forces against countries wishing to establish healthy cohabitation between us and them. To my mind, it is not up to the media giants’ shareholders to impose their rules and cultural content on us, pushing ours to the sidelines. That is why we must act now. Bill C-11 must be passed. Let us stop dithering.
As I wrote, it might be late, but not too late.
The Chair: Thank you, Mr. Saulnier. I have a list of senators who would have questions. May I remind you to be brief, if possible. You have about four minutes.
Senator Miville-Dechêne: Thank you to our two witnesses. In the interest of transparency, let me say that I was a colleague of Alain Saulnier. He became my boss at Radio-Canada.
Thank you for your presentations. My question pertains to the feasibility of Bill C-11. Regarding the Netflixes of the world, there is not as much controversy. We understand that they will contribute to a fund and that there will be Canadian production. As you know, no country, not even France, has tried to affect the discoverability of music on channels such as YouTube, and that is unprecedented. How do you think we will be able to do it? The government has ruled out algorithms. Musicians do not just want to be paid, they also want to be listened to. How specifically we will we achieve that? Perhaps Mr. Saulnier can begin, and then Ms. Rioux. Whatever you prefer.
Mr. Saulnier: Specifically, it goes without saying that we will always need a strategy to support the culture sector, especially for vocal music. Without the CRTC and its regulations, French-language vocal music would certainly have lost a lot of presence on the radio waves in the 1970s, 1980s and successive years.
There are measures. That means that a fund to support creation is necessary, especially for the smaller “nations”, such as the francophone minority, Acadians, and the First Nations even more so. That support must be provided by our governments, our heritage departments, our culture departments, in Quebec and elsewhere.
I am not an expert on algorithms, I have to admit, but I think we should find a way to ensure greater discoverability. I will let Ms. Rioux continue.
Ms. Rioux: The ambition of the laboratory under my direction was, in fact, to demonstrate the possibility of a discoverability assessment technique. Our entire conceptual framework was designed to become operational. We made presentations throughout Canada and to the CRTC, which was very interested. A laboratory like mine has modest means, and from a political point of view, it cannot engage in discussions with the big companies of this world. I think it would be quite possible to start discussions with Deezer, Spotify and YouTube about a method that could be developed, and each business model and company would need to be included in that discussion.
In Europe, this is done for the audiovisual field. The political considerations are quite different, but when it comes to quotas, contributions and European directives, the same could be done for music. We are part of a research centre with collaborators in France; with the Quebec-France mission, they are setting up research with computer firms to develop these methods and then integrate them into legislation.
Senator Simons: I have a question for Professor Rioux.
[English]
I should say up front that Professor Rioux has been very helpful to me over the last two years in discussing discoverability and algorithms.
We live in a world controlled by algorithms. The days when we got the TV Guide and watched passively what was scheduled are long gone. These algorithms are proprietary. The companies own them. They guard very carefully the secrets that go into their algorithmic formulas. I don’t think it is reasonable for the government to control the algorithms, but do you think, Professor Rioux, that there is a way that we could demand more transparency and more information about what the algorithms are showing preference towards? One of the problems isn’t just the discoverability of Canadian content; it is that algorithms, particularly on YouTube, will tend to raise to the surface the most divisive, hateful and controversial things, because they get more clicks.
Do you think there is a way that the government could demand more transparency to let us understand how these algorithms are working on us?
Ms. Rioux: Yes, of course. I think the government should do this and must do this. I have been interested in the world of data governance for the last three or four years, because I have been studying the discoverability problems and the barriers, and part of it is the functioning of the algorithms. Those algorithms promise to be very neutral and very powerful and market-oriented and neutral in that way, but, actually, there is a large literature about the fact that algorithms are biased and that we should look into the workings of algorithms and their results and their consequences.
I think it is the future. It is the future, not only in terms of transparency, but acknowledging the fact that the wealth that is generated by data — our data — is being taken from us without any — Of course, this question is evolving; there is a debate about that. However, I think we should and must do something more important, not only for protecting individuals, which is something that a lot of people are talking about, but also protecting the public interest and public policy objectives.
Senator Simons: Because at the end of the day, a channel like Prime, sure, it is selling you movies, but really it is part of a whole integrated Amazon marketing — I mean, they are really selling our data more than they are selling the entertainment content.
Ms. Rioux: Yes, and I call that the information asymmetry, and it is based on the exploitation of our data.
There is a point that you made that I want to emphasize, and that is that they have invaded — as Alain Saulnier said earlier — our culture and industry without asking any permission.
At the same time, they are not culturally specialized. They are taking the role of cultural industries, people that are specialists, and sometimes by integrating some of them — so I’m not saying that they are not doing a good job — but the fact is, these companies have a restructuring effect, and they may not be specialized in sensitive identity, community and symbolic messages. I think it is very important what you said.
[Translation]
Senator Cormier: My question is for our two witnesses, whom I thank for being here. I do not want to caricature the various discussions. However, when I think about what we hear, I see several visions confronting each other: the vision of protecting minorities against the majority; the pro-regulation vision against free recourse; the more generational vision. We also talked about emerging artists.
Fundamentally, I feel as if there is a vision problem: how are we going to ensure that our Canadian culture is protected and that it is present on digital platforms?
With respect to Bill C-11, what adjustments should be made? I would like to hear from you, particularly on the issue of emerging artists, because according to some comments, they are against regulations that might curtail their creative freedom and access to markets. I’d like to hear from both of you on these issues.
Mr. Saulnier: I’ve had a lot of discussions with emerging artists, I’ve sat as co-chair of Culture Montréal’s digital Montreal commission, and I can tell you that this is not the view I’ve heard. There’s been a lot of noise about this position over the last few months by some organizations, but as far as the situation in Quebec is concerned, that’s not what I heard.
So, I think it’s possible to deal with being an emerging artist and also be present on the different platforms that are available to us.
Ms. Rioux: As far as I’m concerned, I think it’s really a concentration issue. In 2015, when I talked about the study I did for France, I put a lot of emphasis on the word “opportunity” because France wanted me to mention the dangers and the threat of GAFAs. I thought that went too far. There was a lot of opportunity, and relevant public policies and international conventions also had to take into account the incredible opportunities of the Internet and its new platforms, platform capitalism. We shouldn’t demonize these platforms; rather, we need to raise awareness about economic concentration and the effect on asymmetries that already existed before, but which are exacerbated or accentuated by concentration.
I saw a study last week—I could send it to you—that mentions that concentration by GAFAs, of which there are only four or five, controls the entire data market; that has consequences for the redistribution of revenues from the information streams and services that flow on the Internet.
I have become aware, over the last five years, of issues that have evolved. I think that we need to document the issues, analyze these problems and not necessarily say that we need to regulate everything. However, when there are problems, we must be able to act.
Senator Cormier: Thank you.
[English]
Senator Wallin: I get a little nervous when I hear discussions about governments forcing algorithms to push specific content forward. We see what state broadcasters do in Russia and China, and those are issues that are problematic. Let’s just say that the government decides to force algorithms to carry or push forward specific content. In the context of this discussion, French-speaking content or French cultural content. Even if you push it forward, even if you fund it, you still can’t make people watch it. These algorithms already respond to people’s behaviour. How do you think this will help the issue in the end? I would like to hear from both of you.
Ms. Rioux: Thank you for the question. I’m also afraid of government authority on the internet. Of course, we’re all afraid of that and we don’t want that. That’s the least of our desires. What the problem is right now is that we have to understand that we need to increase freedom and diversity. It is proactive and fighting discrimination, in a sense. You’re reversing the authority that is being exercised by the transnational private sector to respect certain policy objectives. I think this is very democratic and non-authoritative.
Of course, you can only create potential for discoverability. You cannot oblige discoverability; you cannot feed people things. I don’t see anything in Bill C-11 in that regard. If there were, I would not support it.
[Translation]
Mr. Saulnier: I would like to add something. If we rely on the law of the market, as some would have us do, it means that you have four huge companies that will determine what content should be offered according to how they dictate and organize that content.
I don’t think it’s reasonable for any country to accept that. It is rather reasonable to want to frame and promote a healthy cohabitation between the digital giants, the public and the Canadian state. So, in a way, I think it is normal that we do so. Otherwise, the other option would be to do nothing. What would doing nothing mean? It would mean letting the shareholders of these gigantic companies dictate how they define content.
[English]
Senator Wallin: My point is that you can impose CRTC-designated rules more easily on a television network that has domestic boundaries, but the internet is a global entity. It’s very hard to force discoverability internationally. I don’t know how you would set up a border, a digital border, on the 49th or any other place.
Ms. Rioux: The beautiful thing about the internet, and I truly believe this, even though I may sound like I like a national barrier, but I like the fact that we have a transnational space. I’ve been working on internet governance since 2003, and I’ve been advocating for a non-fragmented internet. The idea is not to break the internet from the capacity and the potential free flow of information. We want that. This is exactly what we want to preserve.
If we don’t regulate the internet right now, the exact opposite is going to happen. It’s going to be fragmented by these companies that are right now actually closing the internet. The internet is supposed to be open, but these companies are closing it. That’s what I’ve been advocating against in other fora.
When we look at Europe, they have been doing this. I just saw a report about how on Netflix, 30% of their content hails from content in almost all major markets, and it says it does not hurt its business model. I think that Netflix and also Amazon are adjusting to these quotas. Technically, it’s acceptable and feasible. For them, politically and business-wise, it also seems to be acceptable. That would be my answer.
Senator Manning: Once again, I want to thank our witnesses for aiding and assisting us in our pre-study. As a Newfoundlander and Labradorian, I’m concerned very about culture and heritage as well, and certainly in its promotion in any way, shape or form. I have a couple of concerns, and I want to get back to something that Senator Miville-Dechêne mentioned earlier, and I stand to be corrected.
No other country has touched discoverability for artists on YouTube. We’re setting a precedent. That may be good and well in the short term, but what happens if other countries decide to reciprocate the legislation that we are looking at here in Canada? While it would promote artists and our culture and heritage within Canada, I’m wondering, if other countries start doing the same thing, are we limiting the success of our artists globally? I will use Justin Bieber as an example. I’m sure there are many others in a global market.
If other countries do the same thing we’re doing, what would that do to our artists here in Canada?
Ms. Rioux: I can start if you want. I think it’s important in this global internet to have strong international cooperation. I think if other countries start to follow Canada in that way, there should be cooperation and agreed principles and, of course, negotiation. I think that GAFAs — Google, Apple, Facebook and Amazon and other companies like them — would probably like to have a negotiated international response. They don’t like the red tape. That’s something that should be done, and if it’s not happening, then I think you’re right that there could be a problem. International cooperation has a very important role to play in the governance of internet, data flows and the trade and cultural industries.
Senator Manning: It should be happening internationally and hopefully it will happen. Are there some other suggestions that either one of you may be able to make to us? I’ll go back to a free trade agreement.
[Translation]
Mr. Saulnier: In 2005, UNESCO adopted a convention that allowed for the protection of different cultures. This is an example of collaboration that has taken place at the international level.
In my opinion, it is possible to move in this direction because Canada alone will not be able to supervise and regulate the digital giants. There must necessarily be a concerted effort with other countries. I find the European experience interesting. We need to do this in concert with the Europeans and with other countries, because we will certainly not be able to do it alone.
[English]
Senator Manning: To follow up on your words, it is possible. Anything is possible. They put a man on the moon, so anything is possible. My concern is if we close the door here in Canada in relation to others, are we also closing the door to our own artists globally? We had a free trade agreement. I’ll go back to the free trade agreement between three countries, the North American Free Trade Agreement. Three countries agreed to that. If Canada stands alone doing this and we look to our biggest trading partner, the United States, what happens if they come in with the same type of legislation? Are they limiting our artists in the United States market? That’s just one of my concerns.
[Translation]
Ms. Rioux: At present, especially in the world of commerce, there is always great potential for rivalry and conflict. Without minimizing what has been said, one of the witnesses mentioned that even if we have a cultural exemption, there is still the possibility, for example, of the United States making us pay, in the final analysis. We go and get it, and eventually it gets neutralized and cancelled out, and there could also be potential sanctions.
I think the tide is turning in a new direction. Right now, I think there’s even talk of regulating platforms in the United States, and there is talk about economic concentration and its effects. We are seeing a return to state interventionism. I think we’re in a world of re-regulation, which is to say we’ve had a share of the market for a number of years, and now I would hope that we wouldn’t be commercially isolated. However, I think there are a lot of countries that would support us in what we’re doing and that could tip the balance towards a reasoned response from our trading partners.
Senator Dawson: You spoke, Mr. Saulnier, about the convention adopted by UNESCO in 2005, and I think you are working on the digital future. I believe you are organizing a conference with one of our former colleagues in Paris, in a few months.
There is a divide—and we can see it—between anglophones and francophones. Francophones need framing and have always needed it to protect themselves against the numbers; the sheer numbers they are up against, without referring to technology.
Do you find that this common front, to deal a little bit with the issues that Senator Manning and Senator Cormier mentioned, this sort of international francophone community, needs to work together to protect itself as much as we need to do?
You know, I found you quite modest earlier when you were talking about your past, because you jumped over CBC/Radio-Canada and that was a big part of your history—I had the pleasure of having you as a witness more than once at the Standing Senate Committee on Transport and Communications. In short, do you think that a common francophone front could help in the face of the digital globalization of the GAFAs, to protect us from this invasion?
Mr. Saulnier: That is essential and fundamental. It is certain that when we talk only about digital strength, the number of francophones in Canada is not significant in this digital universe, where as I said earlier, 63.7% of Internet sites are in English. We must necessarily turn to the Francophonie and to partners such as the Organisation internationale de la Francophonie (OIF). We must also try to consult UNESCO to find out if there is a need to take action to protect, for example, languages other than English within this digital universe.
We are indeed working on these avenues, and I hope to have the opportunity, next autumn, to move this discussion forward to allow us to get even closer to this possibility. Francophones need to form a common front within La Francophonie, with our French partners, but also with the African partners whose French language occupies such an important place.
Yes, I deeply believe this.
Senator Dawson: I should just mention, and I will end on this note, that this summer we are organizing the Parliamentary Assembly of La Francophonie (APF), which is obviously part of La Francophonie. I will be chairing this debate in Rwanda with the Africans who have the same concern about protecting their language and who have even fewer technical means to protect themselves than we do.
Thank you. I have already read your book and look forward to your lecture.
Mr. Saulnier: Thank you.
Senator Quinn: Thank you, Ms. Rioux and Mr. Saulnier, for your presentations, which were very interesting. I have two questions, but the first has already been answered.
[English]
The second question is to touch a little bit on regionalism within Canada and culture and protection of regional cultures and whatnot. My question is more for Mr. Saulnier, but of course, any commentary that Ms. Rioux has would be welcome as well.
You referenced the big guys, the United States and whatnot. I completely understand that perception and that concern about being dominated by our good friends to the south. However, I’m a New Brunswick senator, and when we talk about regionalism and how to promote and protect Canadian culture and internet interests, how do we prevent smaller areas of the country being consumed by the larger areas of the country? How do we balance that? I would be interested in your commentary on that. Thank you.
[Translation]
Mr. Saulnier: This is most certainly a challenge. The regionalism factor means that more and more people will leave their region to come and do culture in large regions like Montreal and Quebec City, and that poses a problem, precisely for the industry and for creators.
At the same time, I don’t think that Bill C-11 is going to solve that problem either; there will always be regions that are larger than others, such as the cities of Toronto and Vancouver, and others that may occupy a very different space than St. John’s in Newfoundland and Labrador, for instance. From this point of view, I believe that we must first defend the Francophonie as a whole, as far as we are concerned.
I want to emphasize that we really have to work together with the Acadians in order to be able to support these different cultures within the Francophonie. I’m sure that with other types of interventions and actions on the part of the departments of Culture, Canadian Heritage, the Canada Council for the Arts, and the Conseil des arts et lettres du Québec, there is a way to bring out more of this diversity.
[English]
Senator Quinn: Just a follow-up, and perhaps Ms. Rioux has a comment. I agree with our Acadian friends in New Brunswick with respect to the dominance of, as you say, Quebec City and Montreal. But there’s a larger cultural aspect to Maritime Canada, for example, as I’m sure there is in Western Canada. Oftentimes we see the big centres, Quebec and Ontario, dominating things at the expense of the others. Shouldn’t we be as concerned about how to bring balance in Canada as much as we have concern about bringing balance internationally?
[Translation]
Ms. Rioux: You touch on a very good point. First of all, as far as financing in relation to GDP is concerned, we have never reached the 2% target. So I think there is a lot to be done on this front. As for decentralization, you mentioned the regions, but also the issue of emerging independent artists who occupy certain niches, if you like, who are not in the mainstream, who have difficulty getting out and making their mark on the major platforms or even on other platforms and with broadcasters in general.
There is a lot to be done in terms of decentralization, and the Internet offers the means to do it. That’s the good news.
[English]
Senator Dasko: Thanks to the witnesses. My question is for Professor Rioux. Obviously, you’re an expert in discoverability, so I wanted to focus a little bit more on this. I want to make sure I understand your point of view. You know the framework of Bill C-11. You know that, according to the bill, algorithms are not going to be tampered with, are not going to be changed. The bill specifically says that. I would like to understand what you think would be the best approach to discoverability, especially with regard to, let’s say, the major online broadcasters.
Let’s use Netflix and Spotify as examples. What do you think would be the best way for them to deal with discoverability within the framework of Bill C-11? I want to make sure I understand what you are saying about this. Thank you.
Ms. Rioux: Well, our research demonstrated that you can do it, but, of course, we used a methodology that was diversified. Basically, what is interesting is we could follow the progression of the different indicators that I talked about, the PVR: the presence, the visibility and the recommendation. We didn’t need to know about the algorithm and what the algorithm is and how it’s working. We just needed to know to follow the results: Are we present? Are we visible?
We just chose the points of collection of that indicator every day which we thought were significant. Of course, then, we can be contested because maybe we chose the wrong point, but five researchers did that. I can tell you that we debated among ourselves, and we made sure that we tested and we had placebos. We know we can measure.
If you can measure, the CRTC can say, “Hey, on Spotify, we have this instrument that can calculate the streaming of this — the presence, the visibility, the recommendation — and you have to answer to that. Make sure that you have the target.”
Senator Dasko: Right. So they would have a requirement to put this forward? I think that’s what you’re saying. There would be a requirement to put these choices forward to consumers?
Ms. Rioux: Sure.
Senator Dasko: Let’s say in the case of both Spotify and Netflix?
Ms. Rioux: I’m not sure what the CRTC would do because the CRTC is probably thinking about how to be digital-ready. I can only tell you about my experience, and I know that I was able to conceptualize and document this way of measuring discoverability. The CRTC will probably do it in a very different way, but I’m just saying that it is possible. Not only here but in Europe, they are doing it, too, and in France particularly. Every country in Europe is thinking about that, so it’s possible.
Senator Dasko: Thank you.
[Translation]
Senator Clement: I have a question for each of the witnesses. Ms. Rioux, your analysis lab does some important work. I thought I heard you suggest that there was a lack of depth in terms of users understanding the complex effect algorithms have on curation. How can that be resolved? Does Bill C-11 propose anything or should the CRTC play a role in helping users understand?
Mr. Saulnier, “barbaric giants” certainly has a charismatic ring to it. You spoke approvingly of the major players’ contribution, but do you see a potential backlash there? The previous witnesses said that the major players might make some tough demands in exchange for their contributions. Can you tell us about the backlash?
Ms. Rioux, what should be done about how well users understand the algorithms?
Ms. Rioux: With respect to users, as I said, our research led us to conclude that it’s a shared responsibility. Everyone involved will need to adjust. It will require a huge amount of education.
People must be responsible for what they click on. Just because they click on something, it doesn’t mean they are aware that they are steering the machine in a certain direction and that it will have an impact. Perhaps they don’t want that. Perhaps they don’t want to be in this algorithm bubble. They may want out, but they don’t know how to get out. People need to be educated on this issue.
In my five years of study, I learned a great deal myself. I’m not a computer scientist, but I’ve worked with computer scientists, artists and people in the cultural industries. The world of computing and its impact, not just on culture, but on other industries as well, but especially culture, it’s very significant.
Take a look atthe expression “virtual personal accountability”; we’re talking about algorithm ethics, but if we want algorithms to behave fairly and ethically, we need to behave in ways that force the algorithm’s hand. It’s not easy to tame the beast, though. It’s more like the beast is controlling us.
Mr. Saulnier: With respect to the other part of your question on the backlash, there will certainly be some gnashing of teeth. The digital giants are not going to let this all pass without a hitch, but that’s why we need to work together with other countries, with other initiatives. Ms. Rioux spoke earlier about what’s going on in Europe. We must be able to link our initiatives to those of our other partners internationally.
It is possible to do that. For example, although it’s not on quite the right scale, the OECD has managed to agree on a minimum tax. It is possible to have agreements of that nature. I feel that’s why Canada needs to get involved internationally as well. On our own, we won’t be able to do—
[English]
Vincent Labrosse, Clerk of the Committee: Mr. Chair, I am sorry to interrupt. We have to suspend because of a fire alarm.
The Chair: We have reached eleven o’clock. I will let you evacuate the building, and we will adjourn.
(The committee adjourned.)