I call this meeting to order. This is meeting number 18 of the House of Commons Standing Committee on Canadian Heritage.
Pursuant to the order of reference of Tuesday, February 16, 2021, the committee will commence consideration of Bill , an act to amend the Broadcasting Act and to make related and consequential amendments to other acts.
As a reminder, today's meeting is in a hybrid format—virtual and in person—pursuant to the order of January 25, 2021, from the House. The webcast will always show the person speaking rather than the entirety of the committee and will be available on the House of Commons website.
As a final note, screenshots or taking photos of your screen are not permitted. Since we are dealing exclusively with the department today, I don't suppose we'll have that problem. They probably know the rules better than we do.
We have, in our first hour, officials from the Department of Canadian Heritage.
We're going to be taking a brief intermission, for technical reasons, to hook up with , who will join us in the second hour.
Right now, we have Jean-Stéphen Piché, senior assistant deputy minister of cultural affairs. We have Thomas Owen Ripley, director general of broadcasting, copyright and creative marketplace branch. We have Kathy Tsui, manager of industrial and social policy, in the broadcasting, copyright and creative marketplace branch.
We're starting out with a 15-minute statement.
Mr. Piché, you have the floor for 15 minutes.
I'll let you decide if you want to hand it to someone else.
Monsieur Piché, the floor is yours.
Thank you, Mr. Chair and committee members. It's a pleasure to be in committee once again.
I want to take this opportunity to wish you all a happy International Women's Day.
We're talking to you from the national capital region's ancestral territory of the Algonquin Anishinabe peoples.
As you said, Mr. Chair, I am accompanied by Thomas Owen Ripley and Kathy Tsui. They are both experts in the area of broadcasting and have made major contributions to the development of bills and digital projects.
Mr. Chair and members of the Committee, thank you for inviting us here today to help you with your study of Bill . I would like to take this opportunity to thank the committee for the work it has been doing on the bill and for having undertaken to commence its work so expeditiously.
Bill makes important amendments to the Broadcasting Act that will benefit artists, broadcasters, and Canadians.
It is expected to result in more opportunities for Canadian producers, directors, writers, actors, and musicians to create high quality music and audiovisual content and to reach Canadian audiences.
It will establish a fair and flexible regulatory framework where comparable broadcasting services are subject to similar regulatory requirements.
It will make Canadian music and stories more available through a variety of services, and it will create a more diverse and inclusive broadcasting system that is reflective of Canadian society.
This bill renews the Broadcasting Act for the digital age. The changes that it makes are well overdue. It is one of four initiatives currently under way at Canadian Heritage that will modernize our federal communications legislative framework for the online world.
We're also developing a proposal to address online harms such as hate speech, violent and extremist content, terrorist propaganda, child sexual exploitation and non-consensual distribution of sexually explicit images.
We're working with Innovation, Science and Economic Development Canada to amend the Copyright Act.
Then there is the matter of ensuring that Canadian news services are fairly compensated for the use of their material by online services. This work, too, is currently ongoing at Canadian Heritage.
Together, these initiatives will establish rules that will make the online world a more equitable, inclusive and safe place while also ensuring that it remains a fertile ground for innovation and freedom of expression.
Bill , which is focused on broadcasting, is the first piece of this puzzle.
I will now turn things over to Owen Ripley, who will outline the need for Bill and its primary objectives.
Thank you for the opportunity today to address the committee and discuss Bill and how it modernizes the Broadcasting Act.
Before diving into the details of the proposed legislation, I would like to briefly tell you about the Broadcasting Act and the current regulatory framework. It is important to understand the current system, because it is the foundation on which Bill is built.
The bill aims to modernize our legislation for the digital age; but it also aims to preserve and strengthen key elements of our system that have served us well for many decades. These include our independent communications regulator, our Canadian broadcasters, support for Canadian music and storytelling, and the objective of ensuring that diverse voices, including those of Indigenous peoples, are heard across Canada.
The Broadcasting Act is a key piece of legislation for the sector. It defines broadcasting, outlines policy objectives that serve as guiding principles for developing specific regulations, and sets out the mandate and powers of the Canadian Radio-television and Telecommunications Commission, the CRTC. The CRTC’s independence from government is important.
The CRTC makes rules and regulations that govern the media sector. The sector is obviously central in supporting freedom of expression and fostering cultural expression. In a democracy like Canada, it’s important that there be a healthy distance between the government of the day and the media sector. Countries such as Australia, the United Kingdom and France all rely on an independent regulator to oversee the media sector.
The CRTC also has the expertise and experience to make technical regulatory decisions, while balancing many policy considerations. This independence and expertise have served Canadians well.
Ultimately, Bill preserves an oversight role for the CRTC and for the government. The CRTC has the mandate to oversee the system on a day-to-day basis, while the government's mandate is to ensure that the CRTC operates as it should.
One way that the CRTC has supported Canadian culture is by ensuring that broadcasters support the creation and presentation of Canadian content. Currently, as a condition of licence, TV programming services are required to spend a percentage of their revenues on Canadian content each year. Cable and satellite companies are required to contribute a percentage of their revenues to production funds and local programming to support the development and production of Canadian content. Commercial radio broadcasters and satellite radio carriers contribute a portion of their annual revenues to support Canadian content development initiatives. These contributions totalled $3.34 billion in 2019.
However, digital disruption and competition from online broadcasters threatens this support. Increasing competition is leading to diminishing revenues, with traditional broadcasting revenues declining by 1.4% from 2018 to 2019. Ultimately, this will lead to less funding for Canadian music and programming.
Compared to 2019, recently released aggregate returns data from the CRTC show a 7% decline in broadcasting revenues for large ownership groups in 2020. Aggregate returns include the largest broadcasters and vertically integrated companies but exclude the smaller companies, and as they represent the majority of industry revenues, they are expected to reflect overall industry trends for 2020.
Streaming services obviously aren't new to Canada and have operated in parallel to the traditional broadcasting system for many years now. Their operation in Canada has been facilitated by a regulatory instrument, the digital media exemption order, which exempts online broadcasters from having to seek a licence to operate in Canada, as well as the obligations placed on traditional broadcasters, such as supporting Canadian content.
The DMEO has essentially allowed foreign online broadcasters to operate in Canada outside of the traditional closed system. The DMEO was originally issued in 1999 to promote the growth of the nascent online broadcasting sector. Since then, the sector has greatly increased in size and commercial viability.
For example, in 2011, only 10% of Canadians subscribed to Netflix. By 2020, this had increased to 67% of Canadians. Online broadcasters are now thriving and no longer need to be shielded from regulation. They are well positioned to make an important and meaningful contribution to supporting Canadian music and storytelling. Bill aims to bring them into the regulatory framework, so that all broadcasters operate on a level playing field.
There's no denying that the digital age has brought many benefits. More services provide more choice for Canadians and more opportunities for creators and producers. Bill C-10 isn't about denying these benefits, but rather about carving out a space for Canadian voices.
To facilitate the inclusion of online broadcasting in the regulatory framework, Bill adds a new category of broadcasting undertaking to the Act: online broadcasters. This change will ensure that the CRTC can require services such as Crave, Netflix, Amazon Prime, QUB Musique and Spotify to contribute to Canadian stories and music.
Canadian Heritage estimates that, by 2023, the inclusion of online broadcasters could lead to contributions of $830 million annually to Canadian content. This is not a target, and ultimately the final figure will depend on how the CRTC decides to implement the new regulatory framework. Nevertheless, this estimate illustrates the significant and tangible results that Bill seeks to achieve for Canadian creators.
Some of the discussion regarding Bill has focused on the Bill’s treatment of social media platforms. These platforms will be subject to regulation, but only in so far as they display content commissioned by the platform itself, or its affiliates.
However, the users of social media platforms and content posted by these users will not be regulated. Social media is an important form of expression for many Canadians, and, as Mr. Piché noted, a separate proposal is being developed to address the impacts of harmful content posted to social media.
To account for the inclusion of online broadcasters, we need a renewed approach to regulation. Bill shifts away from relying on the rigid system of licensing to a more flexible conditions of service model. This model will allow the CRTC to seek financial contributions from all players and to impose other conditions, such as discoverability requirements, programming standards and information reporting requirements.
The CRTC will hold public processes seeking input from stakeholders and Canadians in order to inform its regulatory choices. Once it has gathered this information, the CRTC will be able to tailor conditions of service to specific broadcasters. We want to avoid an overly rigid approach that results in an undue regulatory burden on broadcasting services and increased costs for Canadians.
Lastly, the broadcasting policy objectives are being updated to ensure that the broadcasting system serves the needs and interests of all Canadians in their diversity. This means ensuring that Canadian voices, including indigenous creators, official language minority communities, racialized and ethnocultural communities, LGBTQ2+ communities and persons with disabilities, are present in the media we consume. That's why Bill includes stronger support for diverse Canadian content and its creators.
However, Bill does not include quotas or targets for supporting certain varieties of content such as French-language content. Quotas and targets risk becoming de facto maximums. The CRTC is better placed as the independent and expert regulator to make decisions on how to best support all types of content and to have it evolve over time.
After Bill receives royal assent, the minister intends to propose to the Governor in Council to issue a policy direction to the CRTC on how the new regulatory tools granted in the bill should be used. Seven priorities are sketched out in the technical briefing presentation.
We know that the committee has requested a draft copy of the policy direction to better understand concretely how these priorities would be communicated to the CRTC and we are working to fulfill this request.
While an important step, we know that Bill doesn't address all of the issues in the broadcasting sector, such as the future role of CBC/Radio-Canada and the governance structure of the CRTC.
Bill is intended as a first step on the most pressing policy issues. It makes critical changes that will ensure that Canada's broadcasting system is fair and that it will sustain Canadian music and storytelling into the future. We also have an opportunity to make the system more accessible as well as more inclusive by supporting creators and producers who historically have been marginalized. This bill provides a much-needed update to Canada's Broadcasting Act.
We would now welcome your questions on the bill.
As we know, the committee has requested a draft of the policy direction, which will give you a sense of how the intends to propose to the Governor in Council to communicate those objectives to the CRTC. That is the first thing. That will give you a line of sight into it.
We are proposing a more modern regulatory framework to guide the issuance of policy directions moving forward. If you look at Bill , you can see that one of the changes we're proposing to make is actually that the issuance of a policy direction would be subject to a normal Canada Gazette gazetting process, whereby everybody will have an opportunity to make representations to government, for example, before that policy direction is issued. We see, moving forward, that we should actually institute a more modern regulatory approach to this that is transparent in terms of the government saying “our intention is to issue this kind of direction and we'd like reaction and stakeholder feedback”.
Once that direction is issued, it's indeed up to the CRTC to go through its normal regulatory processes, all of which provide opportunities for stakeholders to participate and make representation. That doesn't happen behind closed doors. That is an extension of the way the CRTC has operated for the last few decades in terms of stakeholders being able to go and make their case.
As we know, notwithstanding that we think that independence is important, there continues to be that ability for the government, if it feels that the CRTC is going in a direction that is not consistent with public policy objectives, to issue that policy direction that must be of general application. That's really important, because that stops this government from intervening, say, and targeting a specific media company or specific licensing decision or something like that. The government's role in this instance is to articulate broad policy objectives of general application.
Thank you very much, Mr. Chair.
Good afternoon, everyone.
I am joining you from Montreal, on the traditional territory of the Mohawk and the other Haudenosaunee peoples.
Mr. Chair, members of the Committee, it’s a pleasure for me to appear before you today regarding the study of Bill .
I would also like to acknowledge that today is International Women's Day.
I’d like to thank the members of the committee for the preliminary work you have been doing for some time now.
I’m delighted that this bill has finally passed second reading in the House of Commons. The delays that some Conservative members have caused were a concern for me, but we got there, and we can continue to move forward. Let us please remember that this is not a partisan bill. It is a bill that focuses on culture; it is a bill for Canadians, and it deserves to move forward.
I hope that all the members here and their caucuses recognize the urgency of modernizing the Broadcasting Act so that it can better serve the interests of Canadians in the digital world.
Today it's impossible to overlook the legislative imbalance that favours digital platforms to the detriment of Canadian broadcasters and creative industries. This reform responds to a pressing need. It is crucial to ensuring the vitality of Canadian businesses now and for decades to come. This is why our government will continue to work constructively and collaboratively so that Canadians can benefit from the most effective legislative tool possible, as soon as possible.
From the outset, the cultural and creative sectors have provided input into the modernization of the current legislation. They've expressed their support for this reform and this favourable movement is trending across the country, particularly in Quebec.
Moreover, since the tabling of the bill, this important discussion has continued in the public space and before your committee. It has given rise to several proposed amendments that we will examine with all the attention they deserve. We are, of course, open to improvements that would maximize the benefits of the amended Act for Canadians.
I know that you have received substantial input from several key contributors, and I look forward to seeing the results of the committee’s work in this regard.
I am well aware that the study of the bill must be carried out with care, for two reasons. First of all, because it introduces methods that are completely new in Canada for implementing a regulatory framework adapted to our current reality. Second, because this is an important issue. Many players in the creative and cultural industries are calling for this update to the Broadcasting Act and are counting on this new tool to continue to develop their work on digital platforms.
Let us remember that the current broadcasting system has served Canadians well for decades. It has fostered the emergence of strong national creative and cultural industries. It has supported the delivery of original content that reflects our identity and our values. Bill aims to preserve that legacy. However, it also aims to include many new players and new activities. It must therefore take an approach designed to include online broadcasters and ensure their equitable contribution.
With this bill, we want to make the diversity of Canadian voices resonate more clearly: francophone and anglophone voices, the voices of minority communities, Indigenous voices; and the voices of all communities across the country, including ethnocultural communities, racialized communities, and others that are too often underrepresented on the screen and elsewhere.
I want to make it clear that this bill is not intended to change the regulatory structure in broadcasting. Rather, it is intended to update the objectives of the legislation and the tools of the CRTC. It therefore preserves the autonomy conferred on the CRTC to implement the appropriate regulations and achieve the objectives of the Act. This autonomy is all the more important as the broadcasting system begins to incorporate new players with different business models, and as the system continues to evolve.
This bill does not address the regulation of online hate nor the equitable compensation of journalists by the web giants, as these are not strictly broadcasting issues; however, I intend to introduce two more bills on these issues in the near future. In due course, I will be pleased to appear before your committee regarding these other bills, always in the spirit of constructive co-operation.
I will be pleased to provide you with the Order in Council that we intend to issue following the passage of the bill. Please note, however, that this Order in Council was drafted prior to the introduction of the bill. It may therefore be redrafted as a result of amendments to Bill between now and Royal Assent.
As well, in the interest of transparency and as required by law, the Order will undergo a period of public consultation to invite feedback from Canadians.
I invite you to use the Order in Council as background material for your study, but to focus your efforts on the bill itself. Because that is the legislation that will be with us for several decades and will ensure the sustainability of the broadcasting sector. Over the years, governments will come and go, and will issue various Orders in Council to the CRTC as they respond to changing circumstances.
Finally, I would like to clarify the following situation. When I appeared on November 5, 2020, the member for Richmond—Arthabaska asked me what calculations the department had used to determine that the additional investments in Canadian content through digital television broadcasts would amount to $830 million. On December 11, 2020, the department provided the clerk of the Standing Committee on Canadian Heritage with the answers to the questions asked at the meetings of October 30 and November 5, 2020, including the one dealing with the calculation of the $830 million. At my last appearance before the committee—
My thanks also to the Minister and his colleagues for joining us.
Allow me to correct some of the Minister's comments, or at least to describe them as I see them.
The Minister does not want this bill to become a partisan issue and he wants us to recognize its urgency. I would like to inform him that the committee unanimously agreed to fast-track consideration of this bill, despite the perfectly legitimate privilege that members of Parliament have to express their views in the House of Commons and to ask questions about the bill. I remind him that the Liberal government took five years to introduce this bill. It also prorogued Parliament, which set back consideration of important bills such as this one on broadcasting. We are in full agreement on the principle. If it is not too much to ask, I would like the minister to be a little circumspect at the moment, rather than trying to lecture to us as he is doing now.
With that said, yes, he is right: we actually did receive a notice buried in a document, several pages long, containing exactly the same information that had been given to us: that the calculation had been done using scenarios. I would like to tell the Minister that his Deputy Minister, Ms. Laurendeau, took the time at that same meeting to say that it would be important to provide explanations when the document was submitted, because it was supposedly complex. So I feel that there has been some confusion. I will grant him that we certainly received the information, but nothing was very precise. Once more, we are going to have to wait for the guidelines from the CRTC.
I would like to return to this bill; it is so important but it does not consider a number of factors. As the Minister himself said in his presentation, the bill nowhere deals with hate speech or revenue-sharing. Social media are not included in the bill. Despite the urgency and the consultations by the CRTC, nothing has yet been done to review the role that CBC/Radio-Canada has to play. Therefore, many questions arise.
When the tabled her working document, her supposed white paper, she spoke to us about the importance of French and the importance that the government sees in promoting and defending it. She said that French would have a major role in broadcasting, and a lot of hard work was going to be done.
However, when we look at Bill , that deals mostly with the digital players, we realize that the only measure designed to enhance the place of French, to promote it and to ensure French-language content, is to remove the words “as resources become available” at the end of paragraph 3(1)(k) of the act. It now simply reads that “a range of broadcasting services in French and in English shall be progressively extended to all Canadians”.
It seems to me that the bill provides for nothing substantial in this regard. However, the told us that, for her, French is important and that she was going to make sure that it would be a factor in all departments. Now here we are studying this bill that we have been waiting for for more than 30 years. According to the Minister and his senior officials, the bill is historic. But it contains only one single item that deals with protecting French.
How do you respond to all the organizations that are concerned about the place of French in Acadia, in Quebec and in the French-speaking communities outside Quebec? I am not talking about quotas; don't try to tell me that there are quotas.
Thank you very much, Mr. Chair.
Thank you, Minister and witnesses, for being here today. I appreciate this. As we work on this important legislation, I really appreciate the opportunity to speak with you to get some more information.
We know that the Broadcasting Act will give us more opportunities in film and video and in the sound recording industries. It is really important to support those jobs and invest in our culture sector, especially today.
I can speak from experience here in the Waterloo region. We have a very vibrant music scene of which I am well aware, and we have very vibrant film and TV film production also going on in the region, including shows like The Handmaid's Tale, Anne with an E, Murdoch Mysteries and others, and a lot of commercials.
I'm hoping you could expand on how updating the Broadcasting Act will generate almost $1 billion in foreign investment per year in our films, our television and our music at a time when the arts and culture sector is disproportionately affected by this pandemic, and on how important the entire arts ecosystem is to our local economies, particularly the tourism and hospitality sectors, which are also hit very hard by the pandemic.
Thank you very much, Mr. Chairman.
My questions will be about Bill , but before that, I want to tell the minister I really appreciated his presentation. I would like to ask him to think about the proposed cuts at Radio Canada International that are about to come up. I hope the minister is looking at that. I think those cuts are problematic.
I can't wait to see the minister when he comes forward with regulations related to removal of illegal content from online platforms.
I listened to Mr. Rayes and Monsieur Champoux.
I, too, am concerned about the lack of precision, in the proposed text, about original French content. I was very pleased to hear the minister say that he would give careful consideration to any amendments that might be proposed by the committee.
Also, I am concerned about the issue of content for official language minority communities.
One of the things, Mr. Minister, that we heard before the committee was a concern from francophone groups outside Quebec and English-speaking groups in Quebec that almost all the French content in Canada today comes from Quebec, almost all the English content comes from outside Quebec, and very little French content is produced outside Quebec and very little English content now in Quebec.
Would you, Mr. Minister, be accepting of some amendments to the that we may put forward that would deal with the preoccupations of the official-language minority communities?
I apologize, as well, because I have to end it right there.
Thank you so much to our guests. Mr. Guilbeault, nice to see you again, and thank you very much for spending this time with us. To the people who are with you, Ms. Laurendeau, our deputy minister; Mr. Piché; and Mr. Ripley, thank you very much.
Folks, I'll disengage from that part of our witness testimony, because we have to deal with a bit of committee business.
We're coming to the end of our meeting. I'm sure you've all had an opportunity to look at the subcommittee report. I would like to take the time now to adopt it. There are seven points within that report. Are there any questions about this before we make a decision? We have to adopt this, by the way, in order for the committee work to continue.
Seeing no objections, I see a plethora of thumbs up. That's great.
Thank you so much, everyone. Sorry for the informal way of conducting a vote, but such is virtual reality. Nevertheless, the subcommittee report has been adopted.
We will see you this coming Friday, March 12. If you recall, we will be reinviting guests who were not able to provide testimony a few weeks ago.
The meeting is adjourned.