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Online Streaming Bill

Bill to Amend--Third Reading--Debate

February 2, 2023


Honourable senators, first, I want to thank the committee for the dozens of hours that they put into this bill, and for the care and attention that they gave to the many witnesses. I attended some — but nowhere near all — of the committee meetings during both the witness phase and the clause-by-clause phase.

I was pleased that the committee made some quite consequential amendments. As a result, I support the bill being sent back to the House of Commons. I think it reflects well upon our obligation for sober second thought.

Now, having followed the committee, received briefings and listened to the excellent speeches in this chamber thus far — and there are more to come — I want to put on the record some of my thoughts and concerns.

First, I was struck by the testimony of Peter Menzies — he is an eminent journalist, a media executive and a former vice-chair of the Canadian Radio-television and Telecommunications Commission, or CRTC — on the intentions of the bill. I agree, based on the briefings, with what he thought was the intention of the bill. He said:

. . . this is what the ministers were saying right from the beginning. The intent was to make sure the system gets money from web giants.

If that’s the problem, my suggestion is to just address that problem. There is no need to get into user-generated content and all these other areas, and start dealing with small businesses, advancing businesses or people taking advantage of the beauty and wonder of the internet and finding success. There’s no need to shut that down.

If it’s the traditional funds that you are after and the big web giants, just focus on that.

As Mr. Menzies was speaking, I was reminded of this old saying that I heard: “There is no problem that the government can’t make more complicated.” It also comes as a bit of a Canadian thing. There are many times when we can’t seem to go straight at things without complicating it a little bit in our rush to be nice, to be thorough, to be complete, to be fair or to make sure we don’t miss something.

The point of this bill — based on what we were told, and what I was told in the briefing from the government — was to make sure that the streaming services begin paying significant amounts of money into the funds to support artists across the country, as cable companies and other more traditional media fade away.

The majority of the concerns that I’ve heard, both at committee and in this chamber, are around potential issues that are outside that stated reason for the bill. The questions are as follows: Will small, specialized streaming services withdraw from Canada? Will user-generated content, producers and creators face interference? Will algorithms be co-opted by government to force us to somehow consume artistic product that is not of our choosing?

We received assurances — at committee from government witnesses, and in this chamber from senators — that our worries are not valid. We have actually inserted — thanks to the efforts of committee members — some amendments to help assure ourselves around that.

Yet still to come are the publishing of regulations and the CRTC actions in the future. We need to watch and ensure that our nightmares don’t become a reality. Much of the success — or failure — of the bill depends on the transformation of the current CRTC, and the shift to a more nimble regulator, as nothing kills innovation like delay.

I believe that the Senate will have a continuing and vital role to play with this bill over the next few years. I urge the Transport and Communications Committee to consider emulating the long-standing practice of the Banking Committee which regularly and systematically interacts with the Governor of the Bank of Canada.

We’ve heard, and it’s well-known, that this practice was welcomed by previous governors as being an excellent exercise in the exchange of ideas, as well as a personal responsibility-and-accountability exercise for the governor in a unique environment. We’ve heard similar comments from the Superintendent of Financial Institutions in the past at the Banking Committee — I’ve been involved with that; it’s a great exercise, and it’s one that should be emulated with the Transport and Communications Committee through frequent meetings with the chair of the CRTC, through the regulatory process and the execution process. It would be extremely valuable.

After the work that we did, the 100-plus witnesses we heard and the thousands of messages that we got from concerned Canadians across the country, that is the least we can do — to ensure that this bill is implemented in the way that we all have been given to understand that it will be implemented. Thank you.

Hon. Pierre J. Dalphond [ + ]

Dear colleagues, allow me to explain why I support Bill C-11.

I should point out that I don’t intend to comment on each clause of this bill or on the proposed amendments.

I also won’t be commenting on the important role that the Broadcasting Act has played in supporting and developing Canadian culture, whether in French, English or Indigenous languages or in languages other than the official and Indigenous languages. Others who spoke before me did so enthusiastically, including our new colleague, Senator Cardozo, and one of our longest-serving members, Senator Dawson.

I will only speak to one issue, which I consider to be at the heart of this bill, and that is the discoverability of Quebec and Canadian cultural products on the most well-known platforms.

First, I would like to make it clear that I do not believe that there is a vast conspiracy among platforms to make English the universal language and promote certain American values.

A 2009 UNESCO report entitled “Twelve years of measuring linguistic diversity in the Internet: balance and perspectives” noted that the presence of English on the internet had fallen from 75% in 1998 to 45% in 2005.

More recently, the Observatory of the Linguistic and Cultural Diversity in the Internet, an organization that is part of the Organisation internationale de la Francophonie, reported that in 2021, the share of English as an overall percentage of all pages available on the web was no more than 26.5%.

This shows that web content is becoming more and more diverse. The virtual warehouse, so to speak, is getting bigger and bigger and contains more and more products in different languages.

Another important statistic that stuck with me has to do with internet penetration. According to 2020 figures from internet World Stats, only 35.2% of French speakers worldwide have access to the internet, while 77.5% of English speakers, 70.4% of Spanish speakers and 53% of Arabic speakers do.

The reason for the lack of internet access among French speakers is the low internet connection rate in French-speaking Africa, which is currently just 41%. It is estimated, however, that by 2060, internet penetration will be 85% among African French speakers. As Senator Gerba already pointed out, Africa is vital to the future of the Francophonie. There is no doubt that gradually connecting hundreds of millions of francophone Africans will create a need to produce many French-language cultural and other products, which will increase the amount of francophone content on the internet. I am delighted about that.

Of course, the existence of French-language online content is a prerequisite for the consumption of French-language cultural products. If none is available, if there is nothing on the shelves, then nothing will be consumed.

It should be noted that although English-language content no longer represents the majority of the content available — far from it — that is not the case when we look at content viewed. In fact, 61.1% of the most visited sites are in English, according to the September 2022 edition of the W3Techs Web Technology Survey.

Another study found that 85% of streams on Spotify are from 0.7% of the catalogue. There are several factors that may explain the over-consumption of certain products, including cultural products in English.

One of those factors is the smaller number of French-language platforms. That is why the member countries of the Francophonie, including Canada, launched the platform TV5MONDEplus in September 2020 to showcase French-language products. This free platform is like Netflix for the Francophonie. It enhances the online presence of television shows and movies produced in French, helps to promote the international Francophonie’s creations, and increases the discoverability of French-language content on the internet. TV5MONDEplus’s French-language productions are currently available in 196 countries.

However, another similar factor seems to account for the low consumption of French-language cultural products, and that is what are known as the platform’s suggestions.

A study found that 70% to 80% of the content watched on YouTube is based on recommendations. Users visit one page, and then they are given other recommendations and end up spending a lot of time watching.

As you know, these recommendations are made based on algorithms.

No outside experts, in either Europe or North America, have access to the details of the programming parameters of these algorithms, since the platforms consider them to be trade secrets. Europe is actually preparing regulations on this issue.

In light of this situation, researchers have begun measuring the discoverability of Quebec’s French-language cultural content on the main platforms.

In a March 2021 report entitled Être ou ne pas être découvrable?, the Université du Québec à Montréal’s research lab on discoverability and the transformation of cultural industries in the e-commerce era proposes the following definition of discoverability:

The system of “discoverability” is a set of processes that structure and determine the possibility and ability of audiences to discover cultural products online, i.e. to locate this content or have it presented to them, without necessarily searching for it in a vast database of content organized by prescription- and recommendation-based systems.

This definition emphasizes the multiple complex processes and dynamics that occur between an online consumer and a platform, as well as the impact these processes have on an audience’s propensity to discover products.

What I am about to say is an oversimplification, but basically, this complex and dynamic process is somewhat akin to product placement at your local supermarket. Often, the product that sells the best gets the spotlight. That product is strategically positioned, so there may be four or five competing products in close proximity to the featured product, but they are placed on the top or bottom shelf, where most consumers are unlikely to see them.

Sure, consumers have free choice because they’re the ones choosing the most visible, ideally positioned product, but we all know that positioning is the supermarket’s decision, whether it’s because the product’s profit margin is bigger or because the supplier paid for advantageous in-store product placement.

If the government chooses to intervene and require equitable positioning of all products, no one can seriously suggest that would impinge on consumers’ freedom of choice. One could actually argue that it gives them greater choice.

For products in an online platform’s warehouse, the shelves become algorithms. Without algorithms, these platforms would be more like massive libraries with no filing system.

These algorithms are growing increasingly sophisticated thanks to artificial intelligence. They can recognize each consumer, remember everything they’ve viewed for the past few weeks, months or even years, know how much they’re willing to pay when they make a purchase, and more. The algorithm is designed to anticipate the consumer’s latest needs and present content for their consideration.

In some cases, this is an entirely neutral operation that produces the result the consumer wants, even if the algorithm’s parameters aren’t verifiable.

As a result, according to them, interfering with the algorithm or even obtaining the details of these parameters is tantamount to threatening freedom of choice. That is what I have heard in several speeches over the past few days.

That assumes that the algorithm and its artificial intelligence are completely neutral and are capable of anticipating users’ needs in an impartial manner. That assumes that there is no possible cultural bias in the algorithm’s very complex programming.

That also assumes, of course, that there is no programming designed to boost clicks, watch time or the associated revenues.

Unfortunately, now and then, various investigations and revelations, particularly before the U.S. Congress, have proven these assumptions to be false. That is why the European Union and many other countries have decided to regulate the products offered by platforms in order to protect their country’s cultural specificity.

The scientific report published on March 8, 2021, by the research lab on discoverability that I spoke about a few moments ago shows that Canada needs to do the same for French-language cultural products. That report found that there are barriers to discoverability and pointed out the following problems.

First, there is no “Quebec category” on Netflix, iTunes, YouTube and the like.

Second, the presence of Quebec audiovisual content is very low, which explains why the algorithms do not find any or offer any. For example, none of the 29 Quebec films produced in 2016 are on Netflix. As for the 29 new films that were made during the study, 10 are on iTunes and 19 are on YouTube’s for-pay platform.

Third, there were hardly any Quebec films and shows available to stream on transnational platforms.

Fourth, new platforms such as Disney+, Amazon Prime and Apple TV contain little or no Quebec audiovisual content.

Fifth, lists of the latest Quebec songs can be found on most platforms, but they are not very visible and are rarely recommended. The situation is even worse for older hits.

Sixth, when it comes to streaming music, tests done from March to August 2019 showed that none of the “premium” streaming services met the very specific expectations of the example listener used for testing purposes.

Seventh, the platforms do not provide any details on the content consumed in Quebec or the consumption of Quebec content.

In conclusion, both the content of the platforms and the reference algorithms led to poor results for Quebec cultural products.

In this context, it only makes sense to regulate Quebec and Canadian content on these platforms, as well as the discoverability of the Quebec and Canadian products stored on them. What I said about French-language cultural tools also applies to Indigenous- and English-language Canadian cultural tools.

That’s why I support Bill C-11, which will promote Canadian content and ensure that algorithms will also present these products and make them discoverable.

Thank you for your attention. Meegwetch.

Hon. Donald Neil Plett (Leader of the Opposition) [ + ]

Honourable senators, I rise today to speak to Bill C-11. Let me begin by first acknowledging the many Canadians who have great concerns about this bill, and who have taken the time to reach out to us to share those concerns. Please know that the Conservative caucus in the Senate has heard you and that we have taken every effort to give you a voice in committee and in this chamber in an attempt to make this bill less harmful. I regret, however, that there are too many senators who are still not listening. This bill is extremely complicated, and it has been reviewed and considered by the Senate for a considerable period of time. As a result, there are several aspects of this bill and the issue of broadcasting that I would like to address.

I want to begin by acknowledging what the government always says, namely that this bill is the first major update to the Broadcasting Act in 31 years. We are told that the update is required in order to bring broadcasting in line with the changes that have occurred in global broadcasting and communications in the past 31 years, but those changes are nothing short of revolutionary. It is far from clear that the government has any place in this realm.

The online world is immensely complex. We are at risk of fooling ourselves if we believe that we can regulate it in any way that does not do much more harm than good. The bill we have before us purports to address just one component of the communications revolution that has occurred in the past 31 years, that being the broadcasting component.

Let me give you a few statistics to illustrate just how complex the broadcasting world now is. Globally, there are now almost 2 billion websites online. Every day, more than 500 million tweets are sent. More than 4.5 billion pieces of content are shared on Facebook alone, and users spend more than 10 billion hours on social media.

Back in 2010, more than a decade ago, American businessmen Paul Sagan and Frank Thomson Leighton wrote in the journal Daedalus that:

. . . the Internet is transforming nearly every industry and aspect of society–from news to entertainment, politics to business, and communications to commerce. The impact of the Internet on journalism is simply a microcosm of the larger phenomenon of dramatic change brought about by the online digital revolution.

They also wrote that:

News is now personalized and interactive; the audience is taking charge. Viewers . . . shape the discourse and coverage of the news. And more and more, they are helping to capture, write, and share the news themselves over the Internet. . . .

Those words were written more than a decade ago.

Broadcasting has continued to change at warp speed since those words were written. The bill we have before us faces a challenge that is, globally, probably insurmountable. It is premised on the naive assumption that after 31 years of revolutionary change, the government is actually capable of regulating broadcasting in the way that is being proposed. That said, the bill will have consequences, many of them unintended.

Morghan Fortier, the CEO of Skyship Entertainment has noted that Bill C-11 was “. . . written by those who don’t understand the industry they’re attempting to regulate.” What we have heard from other witnesses confirms that, and what many fear is that the unintended consequences of the bill will fall on Canadian creators and consumers.

Timothy Denton, a former national commissioner of the CRTC, told our committee:

We oppose Bill C-11 because it embodies a fundamentally illiberal idea of communications, because it constitutes a vast overreach of governmental authority and because it threatens the engine of innovation and economic growth, which is the internet.

What we object to is the nearly boundless extension of governmental regulatory authority over communications. . . . with only a few exceptions, it captures virtually all online audio and video.

Unfortunately, colleagues, the limited amendments that our Senate committee made to the bill did not change that overreach.

What concerns me most, honourable senators, is the impact that this legislation will have on our small creators. When Len St-Aubin, former director general of telecommunications policy at Industry Canada, testified before our committee, he noted that the internet is “. . . arguably the most dynamic engine of innovation, competition, opportunity, economic growth and creativity . . .” that we have seen in recent years. Attempting to regulate it, particularly in the ham-fisted way that the government has gone about it — first with Bill C-10, which it was forced to withdraw, and now with Bill C-11, which was rammed through the House of Commons with insufficient review — is fraught with danger.

In this regard, Mr. St-Aubin pointed out:

. . . it’s the CRTC, not Parliament, that will determine the scope of regulation and therefore the extent of intervention in the internet market and Canadians’ freedom to access the content of their choice.

We have often heard senators opposite claim that the Senate must speak for political minorities. Well, there is no question that under Bill C-11 it is the smaller players in Canada, people like Oorbee Roy, Vanessa Brousseau, Darcy Michael, Justin Tomchuk, J.J. McCullough, Frédéric Bastien Forrest and Scott Benzie, who will be the most impacted. They do not represent big corporations or big media concerns. They made numerous amendment proposals, but I hear few senators opposite speaking for these small creators.

Most of the amendments that they advocated for were opposed by senators opposite who sit on the Senate Transport and Communications Committee. Why is that? I believe that, in many cases, it was not due to the substance of what was being proposed. It was because most of the government-appointed senators had made up their minds about this bill long before they heard a single solitary witness.

Most of the amendments proposed by witnesses who appeared before our committee were rejected by the government-appointed majority. That is extremely unfortunate because it leaves us with a very flawed bill which may do untold harm to Canada’s broadcasting sector, in particular to Canadian creators and consumers.

With respect, senators opposite are trumpeting the fact that many individual amendments were accepted. I acknowledge that some positive amendments were adopted by a slim majority on the committee. Some of these amendments were even ones that the Leader of the Government opposed. However, this is where the rubber will now hit the road.

Will the government be willing to listen to what the Senate has said in relation to the very modest changes that have been made to Bill C-11? Or will the government simply reject even these modest amendments out of hand?

If the government rejects these modest amendments, how will our government-appointed senators respond? Will senators opposite stand by their principles or will they simply fold in the face of the government’s edict?

In my comments on this bill, I would first like to highlight some of the issues where amendments have been adopted and on which senators opposite will now have to steel their spines as we wait for the government’s response. I will then briefly refer to some of the fundamental problems that remain in the bill — problems that the majority of senators on the committee did not agree to address.

Let me begin with the issue of the inclusion of user-generated content. On this, we do have a modest amendment — which the government opposed — but, in my view, it does not address satisfactorily the concerns raised by witnesses. The amendment proposed by Senator Simons and Senator Miville-Dechêne eliminates a reference to regulating content that directly or indirectly generates revenue. It would instead require the Canadian Radio-television and Telecommunications Commission, or CRTC, to “consider” whether a program has been uploaded to an online undertaking that provides a social media service by the owner, the exclusive licensee of the copyright in the sound recording or an agent of the owner.

The amendment makes this particular provision of the bill better than what it was before. But it is far from clear that the government will accept even this modest amendment. Nor is it clear in what manner the CRTC would consider the re-addressed criteria.

Senator Simons said that her amendment would ensure that Bill C-11, “. . . actually does what the government has told us it wants to do.” In that respect, she is absolutely right. The minister, when he appeared before our committee, specifically stated:

We listened to the social media creators. We listened to them, we understood their concerns and we brought it back, with the exception of 4.2, which catches only commercial content with the three criteria. That’s it.

That was what the government claimed. The amendment brings the text of the bill closer to what the government said its intentions are.

I wish that the committee had gone further and also adopted the amendment to the same clause that was proposed by Senator Manning at committee. Senator Manning’s amendment would have made it clear that the three criteria in subclause 4.2(2) would have to be considered together; in other words, that the CRTC could not pick and choose criteria. But the majority of members on the committee rejected that, which is unfortunate.

Now we will have to see whether the government will actually accept even the modest amendment that has been incorporated in this bill. If it does not, we will see if senators opposite have the courage to stand by the provision they themselves have argued is essential. If this very modest amendment does end up being rejected by the government, then it will be clear that the government fully intends to capture user-generated content with this legislation.

If that happens, will this chamber speak for the many Canadians who have so strongly objected to this matter? Or will the majority of senators simply throw up their hands and declare, “The government has spoken”? I hope that the majority in the Senate will show resolve on this matter. That would indeed be a good day for the Senate. But there are other issues about which the majority in this chamber will have to steel their spines.

One of those issues is on the matter of age verification for accessing programs that depict explicit sexual activity.

Senator Miville-Dechêne proposed this amendment, and I believe it is a good one and we supported it. The government, of course, opposed the amendment. The government claims sympathy with the amendment, but then it raises its usual plethora of objections, including potential privacy concerns.

Here I have to believe we finally need to take a stand, colleagues. That the protection of children from damaging online content must take priority. Briefs were filed with our committee by the Age Verification Providers Association, noting that the supposed risk to privacy is overstated and that age verification can be designed to protect the identity of the users by separating the age verification process from the websites which need to check only age and not identity.

On this issue, I find that the government leader often talks about how much the government sympathizes with a proposal but then finds reasons to not do anything. Therefore, I fear that the government will also oppose this amendment.

Colleagues, we will have to show resolve to overcome that opposition, and I hope that when the time comes government-appointed senators will do the right thing.

Lastly, with respect to what we need to remain firm on, I hope that the government-appointed senators will show resolve in relation to the amendment that was passed on Canadian content rules.

We heard from multiple witnesses that Canadian content rules are both inflexible and difficult for smaller players to wade through.

Oorbee Roy, who is by her own description a smaller player in the area of content creation, referenced the significant barriers in the way of small content creators like herself getting approved as Canadian content. She asked:

Do I have to hire my ten-year-old son to help me register each piece of skateboarding content for CanCon approval?

Again, the committee adopted a very modest amendment to try to prod the CRTC to take a more flexible approach when determining what Canadian content is. But we will have to rely on the CRTC on how that is implemented. Any changes will also take time to draft. But at least the amendment is hopefully a small step in making things easier for both small content creators and for those who have argued that a more inclusive approach is needed when determining what Canadian content is.

Here, again, the Senate will have to stand firm in the face of the government’s response. If the majority chooses not to stand firm, even these modest gains in the legislation will be lost.

Colleagues, I have referenced three amendments that have modestly improved Bill C-11. However, the bill as a whole remains deeply flawed in reforming broadcasting in Canada. I will refer to three serious problems that witnesses have raised.

First, the bill introduces a very serious problem when it comes to Canada’s trade obligations. With absolute certainty, we know that based on witness testimony.

The former chair of the CRTC, Konrad von Finckenstein, told our committee that while the CRTC has the power to require undertakings to make contributions to funds like the Canada Media Fund, the entitlement to those benefits from such expenditures should not be limited to Canadian ownership or control.

Mr. von Finckenstein said:

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.

The United States has already signalled that it views this as a problem.

In a statement to The Canadian Press this past month, the U.S. Embassy here in Ottawa stated that U.S. officials are holding consultations with American businesses about how Bill C-11 will affect their operations. They said, “We have concerns it could impact digital streaming services and discriminate against U.S. businesses.”

Similarly, the U.S. Computer & Communications Industry Association has said that:

If Canada proceeds with C-11 as currently drafted, it will be incumbent on the United States to assess the scope of likely violations of USMCA rules, the degree to which its trade interests are harmed, and consider what steps are appropriate in response.

Just yesterday, a headline in The Globe and Mail warned, “U.S. escalates trade concerns over Canada’s online news and streaming bills.”

Retaliatory trade action is not just a possibility under Bill C-11; it is a reality, colleagues. And who will pay for that when the Americans take retaliatory action? That is very clear. It will be Canadian businesses and workers. Too little attention has been paid by a majority of senators to the implications of this. There is a sort of cavalier attitude to it. Perhaps that is because senators themselves will not feel the pain of this bill. That pain will be felt by others.

Make no mistake: Those in this chamber who vote for this bill will also be voting de facto to accept the consequences of a trade war, and those consequences will fall on ordinary Canadians.

There is a mantra that is repeated that foreign broadcast undertakings must “pay their fair share.” But there is little acknowledgement of the major contributions that foreign broadcasting platforms already make to jobs and benefits in Canada.

Garrett Levin, President and Chief Executive Officer of the Digital Media Association, told our committee that, “On average, audio streaming services pay out 65 to 70% of their revenues in royalties.”

We should be recognizing that this is extremely significant.

The brief submitted by the Motion Picture Association of Canada catalogues some of the benefits:

Over the past decade, the contributions made by global producers account for 90% of the growth of film, television and streaming production in Canada; foreign investment in production in Canada accounts for $6 billion annually; in 2021, Motion Picture Association studios spent more than $2.3 billion on local production-related goods and services in Canada; they supported more than 47,000 businesses in Canada; they supported more than 200,000 workers in Canadian creative industries.

But somehow, the government expects that global online undertakings should pay even more and then not be eligible to access those same funds when their investments contribute to Canadian cultural industries.

This matter was not addressed in committee and the amendments we proposed in order to correct this flaw in this bill — such as making all broadcast undertakings equally eligible for benefits from funds like the Canada Media Fund — were rejected.

But there is a second serious flaw in this bill: There is no clear exemption for small streaming services from CRTC regulations.

Numerous witnesses appeared before our committee noting this as a significant concern. We heard from witnesses who understand how the CRTC operates and understand the practical limitations on the CRTC’s capacity. Again, one such witness was Mr. von Finckenstein, the former chair of the CRTC. He told our committee quite clearly:

. . . 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.

Mr. von Finckenstein argued that:

. . . narrowing the powers will allow the CRTC to make good, timely and targeted decisions. . . . the legislation should target only large streamers who can meaningfully compete with established broadcasters.

He recommended that the act only apply to online undertakings with Canadian revenue in excess of $100 million or more than 100,000 Canadian subscribers.

But the majority on the committee rejected that. Officials argued that the threshold was too high and that certain undertakings — like CBC Gem — would be excluded.

So, amendments were proposed that lowered the thresholds. An amendment as low as $25 million was rejected in committee, and a $10-million threshold was rejected by this chamber just this week, on Tuesday.

Colleagues, that means the act we have before us has no limitations. In that context, it is worth repeating what Konrad von Finckenstein, a former chair of the CRTC who actually knows and understands the regulatory system, told our committee. He said:

. . . 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.

Does it sound like I’m repeating myself? He continued:

. . . 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.

But, again, the government majority on our committee said “no” to Mr. von Finckenstein’s proposal for a threshold exemption. They said “no” to every proposal that was made for a threshold exemption. In effect, they said, “We know best.”

Well, I would wager that they — “we” — do not know best. With no clear threshold exemption for small streaming services, this bill is a recipe for yet more uncertainty. Even with the amendment on user-generated content that was adopted at committee, and even if the government were to accept that amendment, it will take years to determine how exactly the CRTC will apply those provisions. This will clearly result in more confusion, more waiting, more uncertainty and more potential damage to smaller innovative internet players who, up until now, have made such a major contribution to the productivity of our Canadian economy.

Colleagues, we have been told again and again that the CRTC does not have the capacity to apply the legislation as broadly as is envisaged. A former chair of the CRTC told us that — as has a former vice-chair and a former national commissioner — but somehow the government thinks it knows better. This is yet another component in the legislation that is based on completely unrealistic assumptions about how online broadcasting can be regulated.

Finally, colleagues, I want to address the matter of the discoverability provisions in this legislation and algorithm manipulation.

The active discoverability provisions in this legislation is the issue that was raised most by witnesses as a serious concern, and, quite simply, it was a matter that the government majority ignored. While the legislation asserts that the CRTC cannot order algorithm manipulation for the purpose of discovering Canadian content, the former CRTC chair, Mr. Ian Scott, was quite clear when he appeared before our committee in stating that what will happen is that the CRTC will set policies, and these policies will then require algorithm manipulation by the platforms. So the bill provides for algorithm manipulation by stealth. That was made very clear in an exchange that Senator Wallin had with the former CRTC chair.

Senator Wallin said this to Mr. Scott in committee:

You won’t manipulate the algorithms; you will make the platforms do it. That is regulation by another name. You’re regulating either directly and explicitly or indirectly, but you are regulating content.

Mr. Scott responded very simply, “You’re right.”

Later, Mr. Scott said that the CRTC has many other tools for highlighting Canadian content without engaging in algorithm manipulation. He suggested that with all of these other tools, there would be no need for the platforms to engage in algorithm manipulation. If that is so, then why is the government so intent on keeping this option in the bill? Why did the majority of the government-appointed senators reject every amendment that was put forward to prevent mandated algorithm manipulation?

I ask this because witnesses were very clear about the likely implications of it.

J.J. McCullough told the House of Commons Standing Committee on Canadian Heritage last spring that algorithm manipulation means this:

Overnight, creators are going to wake up and find the kind of content that has previously been successful in an unregulated YouTube is no longer successful in a regulated YouTube. As a result, they will either have to change the nature of content that they make in order to make it more overtly Canadian—whatever that means—or they could possibly be at a disadvantage. That could mean their viewership, and thus revenues, take a hit. That’s something that I think is quite worrying to a lot of YouTubers.

Colleagues, it is scarcely surprising that creators are concerned that their viewership and revenues may take a hit. This is, after all, their livelihoods we are talking about.

When Scott Benzie, Managing Director of Digital First Canada, spoke to our committee, he said that the bill:

. . . needs to be clear that dynamic changes to algorithms are off the table, because messing with them is messing with Canadian businesses and access to their audiences.

Matthew Hatfield, Campaigns Director of OpenMedia, provided a solution that numerous other witnesses have endorsed. Mr. Hatfield said:

. . . Bill C-11 must not give the CRTC the power to manipulate the results of algorithms on platforms. We would never tolerate the government setting rules specifying which books must be placed in the front window of our bookstores or what kinds of stories must appear on the front pages of our newspapers. But that’s exactly what the discoverability provision in section 9.1(1) currently does.

What will be the consequences if we fail to address this issue?

Justin Tomchuk, an independent filmmaker, told our committee:

If Bill C-11 disrupts the discoverability of Canadian creators globally, I can see a scenario where some companies with few physical ties will leave the country entirely so they can continue to work unimpeded by these aggressive mandates.

Colleagues, Mr. Tomchuk is saying that all the vibrant creation we have witnessed in Canada over the past 30 years may be at risk. Why on earth would we do that?

Despite all the witness testimony we have heard, the government and the majority of government-appointed senators on the committee have simply refused to address this problem. This makes this bill fatally flawed.

Colleagues, this brings me back to where I began: the potential consequences of this bill. In the face of the witness testimony we have heard, I question whether any senator in this chamber can say — with any certainty — what the consequences of this bill will be.

I have the greatest respect for Thomas Owen Ripley, Associate Assistant Deputy Minister, who sat patiently through our clause-by-clause consideration of this bill. I would suggest he understands the provisions in this bill far better than anybody — certainly better than most — but I do not believe that Mr. Ripley could say with any certainty that he knows what the implications of this bill might be.

That brings me back to what Morghan Fortier, Co-Owner and CEO of Skyship Entertainment, said about Bill C-11; namely, that it was “. . . written by those who don’t understand the industry they’re attempting to regulate.”

That is what worries me the most.

What the world has experienced in the past 30 years is a communications revolution. It is a revolution that has transformed broadcasting. It is a global revolution. Canadians have benefited immensely from this revolution, and they have done so in a largely unregulated environment. Now, the government is attempting to insert itself into this environment, and we have been told by multiple witnesses that the bill may do untold harm to Canadian creators and consumers. We have been told that it may provoke a trade war with our largest trading partner.

Colleagues, I will reiterate the position of my party on the bill: If the purpose of the bill was to integrate streaming services into the regular Canadian system for broadcasting and simply require online platforms to contribute even more to Canadian cultural industries, then the bill should have focused on that and that alone. What we have now is a bill that generates incredible uncertainty, and sets up the CRTC to overregulate with untold consequences and in a manner that is likely to result in failure.

While the bill has been very modestly improved in certain areas by our committee, those improvements are not sufficient. For that reason, colleagues, I would like to propose an amendment on a point I raised earlier: the uncertainty regarding whether user-generated content is excluded from the parameters of the bill or not.

Colleagues, we cannot allow this issue to be left unresolved in a cloud of ambiguity. If passed, I believe my amendment will provide greater certainty for everyone involved: the creators, the platforms and the regulators.

Forgive me if I repeat some of what I said earlier, but I want to ensure that you understand the importance of the amendment. You have heard repeatedly in this chamber that the government claims user-generated content is not covered by this bill. However, witnesses at committee were unconvinced. Neither am I.

The committee ended up adopting an amendment proposed by Senators Simons and Miville-Dechêne aiming to focus clause 4.2 of the bill in what they termed “professional music” without — as Senator Miville-Dechêne put it — “unduly curtailing the CRTC’s discretion.”

This amendment removed the clause related to “directly or indirectly generates revenues.” The senators argued that social media is now excluded. However, as has been pointed out, it is the CRTC that will be in charge of overseeing the provisions of the legislation. The CRTC will retain considerable discretion.

Few digital creators who appeared before the Standing Senate Committee on Transport and Communications expressed great confidence in incorporating broad discretion to the CRTC.

In proposing their amendments, Senators Simons and Miville‑Dechêne specifically noted that their amendment would not unduly curtail the CRTC’s discretion; however, it is the discretion of the CRTC that is precisely the concern of many. Many witnesses expressed concern over the scope of the CRTC discretion in this bill; particularly, every digital creator who appeared before our committee noted their very strong concerns.

It is for this reason that Monica Auer, Executive Director of the Forum for Research and Policy in Communications, told the committee in September that clauses 4.1 and 4.2 should be dropped from the bill entirely. I am sure most online creators would very much welcome this.

Colleagues, let’s remember: If the government doesn’t accept our amendment, they can send it back.

We have an obligation, colleagues, to do the right thing. We do not have an obligation to support the government when they are telling us one thing and doing another. They will make the decision as to whether they accept our amendment. We will have the opportunity to deal with it again. Colleagues, I believe the amendment is reasonable. I would hope that all senators would support it.

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