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Jerry Dias
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Jerry Dias
2021-05-20 12:51
Thank you very much, Mr. Easter.
Good afternoon, Mr. Chair and members of the committee. I’m pleased to be here today to provide input on the budget implementation bill. My name is Jerry Dias, and I'm the national president of Unifor.
Just as an aside, it's always my pleasure to appear before many MPs I have had some stimulating debates and conversations with over the years. Once I give my presentation I'm going to have to get off the call. I'll be speaking to the Prime Minister very shortly on a variety of things, but also I have my national executive board meeting going on as we speak and I'm going to get to that once I'm finished with the Prime Minister.
Since the beginning of the pandemic, Unifor has advocated for governments at all levels to put policies in motion to build a fair, inclusive and resilient economic recovery. We call it our “build back better” plan. This year’s budget and the first budget implementation bill show the government is at least on the right track. There are a number of items in the bill that are a good start but need some improvement.
These are the items I will bring to your attention today. First, I want to address the minimum wage. Reinstating the federal minimum wage and increasing it to $15 an hour is a long overdue move. It will significantly impact more than 67,000 people working in the federally regulated sector, but $15 an hour is no longer adequate. The truth is that we’ve been calling for a $15 minimum wage for many years now. It may have been enough five years ago, but it's certainly not enough today.
Frankly, the government was talking about implementing this in 2019, and even then it would have been somewhat short. The minimum wage should be set at 60% of the median wage for full-time workers. This was the recommendation of the government’s own expert panel on modern federal labour standards. Following this policy would set the minimum wage at $16.73. Government should be adjusting the minimum wage annually by inflation or by the average annual wage increase, whichever is higher, and establishing a federal low-wage commission to monitor the impact of low wages on workers and the labour market.
Second, I want to address the employment insurance and recovery benefit extensions.
Extending the wage subsidy program is an important step in keeping workers employed during this tumultuous time. The ramp-down rates make sense in many circumstances, but for the hardest-hit sectors, such as air transportation, this change can make the difference between a worker keeping their job or not. We recommend increasing the top-up rate for companies with significant, persistent revenue decline, as they may not be eligible for the Canada recovery hiring program because they are not yet ready to hire new workers.
The executive compensation rule for publicly traded companies should be applied for all wage subsidy support received in 2021, and not just what is received after June 5.
The extension of the Canada recovery benefit and the temporary changes to employment insurance are important. Together, EI and the CRB have illustrated the incredibly important role income support plays in stabilizing workers' lives and the need to fix our currently broken EI system with permanent reforms. We recommend some additional items to strengthen the positive effects these programs can have, including reducing the qualifying hours from the current 420 to 360, and maintaining the minimum benefit rate at $500, while increasing the income replacement rate.
Third, the budget takes an important step in stabilizing employment at airports by reducing some of the negative effects of contract flipping. We support the change and encourage consultation on the regulations in order to ensure all workers are protected by it. In order to further reduce the negative effects of contract flipping, government should extend successor rights.
Fourth, implementing the digital tax on digital giants and extending HST to streaming services are important steps to creating a level playing field and ensuring that large, digital corporations are paying their fair share. We're very concerned that the laws put in place will result in the digital giants not paying their fair share. That outcome would be unacceptable.
Fifth, the modest changes to OAS acknowledge that the current retirement security system does not provide adequate income for retirees, but it is not enough. Government should be exploring innovation in providing defined benefit plans for workers instead of looking to modest changes for the worst off and annuities that mimic retirement security provided by a DB plan, but deliver less.
Finally, the nod to the importance of Canada-made, zero-emission vehicles through tax incentives is incredibly important and a worthwhile endeavour. I will take a moment to remind folks that we do not yet build ZEVs in Canada. We have to keep this in mind as we consider ways to encourage consumer adoption, but we don't need millions in public dollars subsidizing imports. If we want to build this industry in Canada, and I think we do, all policies, including the development of charging stations, must move in lockstep with our industrial development plans.
Thank you. Kaylie will look forward to taking your questions.
Once again, thank you all very much for your time today.
View Peter Julian Profile
NDP (BC)
Thanks very much, Mr. Chair.
Thanks to all our witnesses for coming forward with such compelling testimony. We also hope that you and your families continue to be safe and healthy during this pandemic as the third wave crashes on our shores.
I'd like to start by asking questions of Ms. MacEwen.
First, on behalf of the committee, I deeply thank the workers of the Canadian Union of Public Employees, who are often the frontline workers, health care workers and first responders across the country who have shown incredible courage in helping as many Canadians as possible get through this pandemic.
I also want to congratulate you, Ms. MacEwen, on your new book Share the Wealth!, which you co-authored with Jonathan Gauvin. Hopefully we can get a bulk rate for the finance committee, because I think each member of the finance committee should read your book. That's my first question, really.
You've raised an astounding figure that I wish our mainstream media would talk about more often—the $50 billion annually that has been lost as a result of tax cuts and a whole variety of loopholes. It goes to the ultra-rich in our country, $50 billion every year. In terms of what that would mean for seniors, what it would mean for students, what it would mean for families, what it would mean for the homeless and what it would mean for indigenous communities, it's absolutely unbelievable. Instead, we've seen, as you mentioned, a slashing of public services when what we really need to do is to stop the massive leakage from the very wealthy among us.
How important is it for us to put into place a fair tax system so that every Canadian pays their fair share and we have the wherewithal to ensure that Canadians get their needs met?
Angella MacEwen
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Angella MacEwen
2021-05-20 13:24
I think it's critically important, and it's really important to look at the whole system, as we say, instead of having small token pieces. The token tax on aircraft singles out a tiny sliver of what we're talking about in terms of wealth, as one of the presenters here today said, and there are huge amounts of wealth in Canada that are going untaxed right now.
We could increase taxes, as I said, by $50 billion a year, and only be taxing the top 1% of wealth owners and top 10% of income earners more, and we could afford pharmacare and we could afford to eliminate student loan payments. We could implement dental care and we could train workers for the coming change in the economy. It's recently been said that we're going to be creating too many green jobs for the number of trained workers that we have, so all of these issues are of the utmost importance. We need to have the resources available to act on them.
I just want to say I agree with Mr. Balsillie that we also need those economic frameworks in place in order to act on them. We can't just be handing out money. This is not about helicoptering money to make the economy work better. We need to be very strategic and thoughtful about how we're spending this money in order to get the most benefit out of it.
Toby Sanger
View Toby Sanger Profile
Toby Sanger
2021-05-18 11:07
Thank you very much, Chair, and good morning members.
There are a lot of positive measures in Bill C-30, and I'd like to commend the government for introducing them. These include the $15-an-hour minimum wage, extension of COVID and EI benefits, funding for child care, funding for infrastructure, funding for health care and much more. We're glad the federal government will finally apply the GST, starting July 1, to imports of digital services, short-term rentals through digital platforms and goods supplied through fulfillment warehouses like Amazon. This is long overdue but still appreciated, and it is one step towards levelling the digital playing field.
For far too long, Canada has given foreign digital giants—some of the largest companies in the world—generous tax preferences at the expense of Canadian companies and producers. This has contributed to hundreds of business closures, thousands of jobs lost and billions in revenue foregone. Since the pandemic began, it has only gotten worse, as sales by companies like Amazon have exploded while main street businesses across Canada have suffered enormously. The government should eliminate the tax deduction for advertising on foreign Internet platforms. This has contributed to billions in advertising flowing to Google and Facebook, and loss to Canadian media outlets.
We're glad to see the government commit to introducing a digital services tax on the revenues of foreign e-commerce giants starting next year, but the proposed tax will only apply to a small number of companies in specific sectors. Because a digital economy can't be ring-fenced, the Canadian government must also support fundamental international corporate tax reforms at the OECD negotiations now taking place, including support for a global minimum corporate tax at 21% or higher, as U.S. President Joe Biden has proposed; treating multinational enterprises as unitary enterprises for tax purposes; and allocating the profit of multinational enterprises among countries using real economic factors, just as we do among provinces in Canada.
We're glad the government has also finally taken some action on restricting a number of corporate tax loopholes and the stock-option deduction loophole. However, we believe the stock-option deduction loophole should be completely closed instead of just partially closed.
This government should also take inspiration from U.S. President Joe Biden, who is planning to eliminate lower tax rates on capital gains for the wealthiest. It's unconscionable that the wealthiest in society pay a lower tax rate on their investment income than ordinary working people pay on their employment income. This is something that wealthy investors, such as Warren Buffett, Bill Gross and Bill Gates agree with eliminating.
Speaking of the wealthy, inequalities of wealth have only gotten worse during the pandemic, with Canada's billionaires increasing their fortunes by about $80 billion over the past year. A mildly progressive wealth tax on fortunes of over $10 million could raise about $20 billion a year. I'm glad that this government has committed to identifying ways to tax extreme wealth in its throne speech, but disappointed that there was nothing about it in the budget. A large majority of Canadians, including Conservative supporters, support having a wealth tax. Even the IMF and OECD both recently called for countries to introduce and expand inheritance and wealth taxes. I hope to see them in a number of different election platforms soon.
Just as Canada's billionaires have become much wealthier during the pandemic, many large corporations have made record profits. The study we released yesterday revealed that 50 of Canada's large corporations made record profits last year, with a number of them also collecting the CEWS wage subsidy and paying low rates of tax. When the CEWS program was first introduced more than a year ago, I was the first to call for much stronger conditions. This would have prevented the type of misuse and wastage of public funds that we've seen with this program. We should now do what we did during the world wars and what the IMF recently suggested and introduce an excess profits tax and pandemic surtaxes on those who have profited excessively during the pandemic, to recover some of those public funds.
We're glad the government is making carbon incentive payments more visible. We've advocated for this for many years. However, the federal carbon pricing framework also needs to be significantly strengthened by ensuring that large emitters pay the full carbon price and by applying carbon tariffs and rebates on imports from and exports to countries without carbon pricing so that Canadian industry and jobs aren't adversely affected. We also need to finally eliminate the federal fossil fuel subsidies. It's long overdue that we end this climate hypocrisy.
Finally, I'd like to commend the finance Minister for committing to introduce a public registry of the real owners of companies. This will help reduce money laundering, tax evasion, and other criminal activities.
The federal government should also increase transparency and accountability in other ways, including strengthening whistle-blower protections, and requiring that large multinational corporations publish country-by-country reports of their sales, profits and taxes paid.
Thanks very much, and I look forward to a further discussion and questions.
Janet Yale
View Janet Yale Profile
Janet Yale
2021-05-17 14:35
Thank you, Mr. Chair.
Thank you all for the invitation to be here today. My panel colleague Pierre Trudel and I are very pleased to provide our perspective on Bill C-10.
We endorse the federal government's efforts to update the legislative framework governing the broadcasting system to include both media streaming services and sharing platforms. This approach is consistent with our report, which recognized the realities of a borderless online world in which Canadians will seek to access media content based on personal interest, irrespective of platform or technology.
Bill C-10 would ensure that these new online streaming services, including Netflix, Disney+ and Amazon Prime, as well as sharing platforms like YouTube, are required to make an appropriate contribution to Canadian cultural content. These online services derive significant revenues from Canadian audiences from both advertising and subscription revenues, yet face no obligation to contribute. To imagine that in 2021 we would permit these platforms to make money from Canadian audiences, Canadian consumers and Canadian creativity without any corresponding contribution defies logic, particularly when our system imposes obligations on traditional broadcasters that are now much smaller, less powerful and less prosperous.
In our report, we recommended, as a matter of competitive fairness, that online undertakings be included in updated broadcasting legislation. Our report also made it clear that these regulatory obligations should be restricted to the platforms—that is, if we use the language of the law, to undertakings. Individual creators should remain untouched by regulation, and that is exactly what Bill C-10 proposes.
Let me say it again: Bill C-10 imposes regulatory burdens and the obligation to contribute to Canada's creators only on the undertakings such as the big streaming and sharing platforms, not on individual creators.
I will put it another way. Programs consist of audio and audiovisual content. TV shows, songs, podcasts, postings and that programming—all those programs—exist beyond regulation and will remain beyond regulation. Individuals who create content, whether amateur or professional, and audiences large and small are not affected by Bill C-10 when they upload their programming, share it or even sell it to a streaming service. No one is going to police that content, tell them what they can say or compel them to pay dues.
What Bill C-10 does require—and, from my perspective, thank goodness we are finally taking this step—is that the undertakings—the YouTubes, Disney-pluses and Netflixes of the world that share that content and make money from distributing content—must operate by a set of rules and contribute some amount of the revenues they are harvesting from Canadians to the production of Canadian content.
Finally, to those who argue that Bill C-10 fails to protect user-generated content, we say that is just wrong. Proposed section 2.1 specifically provides that exemption already. New amendments that have been tabled make this exclusion even clearer. Therefore, to persist in creating this illusory scare against freedom of expression is either to misunderstand the legislation, in my view, or to intentionally seek to mislead people for some other purpose.
I will finish by saying this: Legislation, of course, is complex, and broadcasting policy and its regulation can be very technical. Devils do lurk in details, and that is why the scrutiny of this committee is so important. However, what's at stake here isn't hard to understand: We need to make provision for the reality of these immense and hugely powerful online platforms. We need to ensure that they give to, not just take from, Canadian creators and Canadian audiences. We need to update a broadcasting framework that was last amended before the world was even online. We need what is set out in Bill C-10, with all its provisions and all its protections. We urge the government to pass this legislation as quickly as possible.
Thank you.
Pierre Trudel
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Pierre Trudel
2021-05-17 14:44
Mr. Chair and members of the Standing Committee on Canadian Heritage, good afternoon.
I'm a law professor, and I've been teaching the Broadcasting Act since 1979. I was the research director of the Caplan-Sauvageau committee, which produced the 1991 Broadcasting Act. As my colleague Janet Yale pointed out, I was involved in the work of the Broadcasting and Telecommunications Legislative Review Panel.
As noted in the notice from the Department of Justice, which was tabled a few days ago, Bill C-10, amends the Broadcasting Act, which does not authorize measures to be taken against individuals with respect to the content they create and decide to put online. Above all, the act already clearly provides that all measures put in place to regulate broadcasting activities must respect freedom of expression.
Moreover, the Broadcasting Act has never authorized the CRTC to censor specific content. The CRTC's entire practice over the past 50 years is a testament to that. Furthermore, the Broadcasting Act requires that the CRTC refrain from regulating broadcasting in a manner that violates freedom of expression. It's hard to imagine a broader exclusion than that. It is an exclusion that requires a prohibition on interpreting the act in a way that empowers the CRTC to take action and create regulations or orders that violate freedom of expression.
In addition, as you know, the act provides that the CRTC shall refrain from regulating any activity that does not have a demonstrable impact on the achievement of Canadian broadcasting policy. In fact, the Broadcasting Act is enabling legislation. There are no specifics in the act. It is enabling legislation that empowers the CRTC to put in place rules adapted to the circumstances of each company so that they organize their activities in a way that contributes to the achievement of Canadian broadcasting policy objectives, as set out in section 3 of the act.
Therefore, Bill C-10 does not need to expand exclusions for any type of content. Rather, it is a recognition that Bill C-10 already excludes measures that could be suspected of infringing on freedom of expression and ensures that the Broadcasting Act applies to all companies that transmit programming, including on the Internet, which is the primary purpose of Bill C-10.
With regard to these online companies that determine content and that, it's important to remember, already regulate content that is offered to individuals through processes based on algorithms or artificial intelligence technologies, Bill C-10 strengthens the guarantees of fundamental rights for all Canadians. It empowers the CRTC to compel companies to provide information on the logic behind these algorithmic devices, which does not currently exist. It enables the CRTC to put measures in place to ensure that Canadians are offered programming that reflects the principles, values and objectives set out in section 3 of the Broadcasting Act.
Nothing in the Broadcasting Act as it is proposed to be amended would allow the CRTC to impose on anyone programs that they do not want to hear or see, let alone allow the CRTC to censor content on platforms.
Rather, the act provides individuals with a real opportunity for choice. There is currently no guarantee that online companies are offering Canadians a real and meaningful choice that reflects Canadian values as codified in the Broadcasting Act.
There has been a constant since the early years of radio, and that is a tension between those who believe that broadcasting undertakings should be left to market forces alone and those who—rightly, in my view—believe that intervention is required to ensure the effective availability of programming that is the product of Canadians' creative activity.
Bill C-10 is part of this continuum, which has allowed Canadians to have media that offers the best the world has to offer, while also giving prominence to the works of Canadian creators, including creators from minority and indigenous or first nations communities.
Thank you.
Andrew Cash
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Andrew Cash
2021-05-17 14:51
Let's start by getting one thing off the table. Digital platforms like Netflix, Spotify and YouTube are incredible. They represent phenomenal opportunities for Canadian arts and culture creators.
It's been said that being in the music business is a great way to get rich and a lousy way to make a living. The pandemic has put this maxim in stark focus. Many artists and musicians lived below the poverty line before the pandemic, but the pandemic has made things much, much worse. Travel and gathering restrictions have meant no touring, no live shows and no income at all.
The pandemic has also underlined the systemic inequities in the market that have led to diminished compensation for creators. This imbalance has put the promise of a stable middle-class sector of artists and arts and culture workers further and further out of reach for this country. The sector is in crisis.
CIMA commissioned Nordicity to do a report on the impact of COVID. It found that the independent music sector saw a drop in revenue of $233 million, live music saw a drop in income of 79%, independent sound recording and publishing companies saw a 41% decline in revenue, and thousands of jobs were lost. That was just in the first nine months of the pandemic.
We don't expect to return to pre-COVID levels of revenue until 2023 or 2024 at best, but as we move towards recovery, we must address the elephant in the room: Digital giants doing business in Canada make lots of money off Canadians but pay fractions of a cent to content creators, and they operate here without any accountability or regulatory obligations, including to fairly contribute to the arts and culture ecosystem.
Really? Are we okay with this?
Given the numbers that I've laid out before you today, if there ever were a time when we needed you to stand up for the little guy, it's right now. Do you really want to go back to your ridings and say to your constituents, “Yes, I voted to protect big tech. I voted to allow them to continue raking in the profits, taking profits out of the country and not contributing a dime in return.”? Unless things have dramatically changed since I was an elected politician, I don't think you want to be doing that. In fact, many of you, from all parties, have pointed out that this inequitable playing field is wrong and that we have to do something about it.
CanCon regulations were created 50 years ago and helped establish a domestic industry within a domestic market. We wanted to protect and nurture French-language creators who were surrounded on all sides by English-language cultural content and English-language creators who were competing on all sides with the massive giant next door. Well, today our arts and culture marketplace is no longer a domestic one. Digital platforms have transformed the way content is consumed. Today the marketplace is global. Today we need a modernized system to grow our domestic industry into one that will thrive in the global market.
This bill, flawed though it is, could point us towards new modes of discoverability, towards new investments in our artists and our arts and culture entrepreneurs, and towards information transparency and accountability from big tech companies that simply doesn't exist right now.
CIMA believes that the bill as amended did not infringe on individuals' rights and freedoms. That belief was affirmed by last week's charter statement and further proposed amendments. However, let's be clear: We would oppose any measure that puts those rights at risk. Artists have long been at the forefront of fighting for civil liberties and freedom of expression against monolithic power structures. Our work quite literally depends on civil liberty and the protection of freedom of expression.
Bill C-10 couldn't [Technical difficulty—Editor] bad videos. What it could do, though, is begin to make a real difference in the lives of musicians, content creators, entrepreneurs and [Technical difficulty—Editor] across the country. It has the potential to move the creative sector from precarity towards middle-class stability, unlocking innovation and creating a global presence for the sector.
That's why I implore you today to continue your work in amending Bill C-10 as expediently as possible in order to pass it through Parliament before the end of the spring session.
Thank you.
Andrew Cash
View Andrew Cash Profile
Andrew Cash
2021-05-17 15:22
Thank you so much for the question.
You know, roughly 80% of all the players in the music scene, in the music sector writ large in Canada, are solo self-employed or solo operators. They are running, in a sense, small businesses. There are some larger entities, of course, but that's the reality. Their combined efforts and their combined risk....
By the way, there is a lot of risk, not just on one's financial resources but also on one's physical and mental health, in being in this business. There is a real need for people like you to really understand what we're doing and how we do it. People don't really know how the music they're listening to in their earbuds got there. They don't how it was made and who made it. That is one of the reasons that a bill like Bill C-10 is so important.
As I said in my opening remarks, COVID really has laid bare the vulnerabilities in the system. It would be one thing if this were pre-Internet, but the fact of the matter is that these massive companies are interacting with our arts and culture sector. They essentially need the content, and not just Canadian content but the content of all creators around the world. They need it in order to make their platforms roll. Too often it is especially the artists and the small independent Canadian-owned companies that get swept under.
There's one other thing that's important to note here when you're asking about the Canadian independent music scene. We're talking about Canadian-owned companies. We're not talking about multinational entities. We're talking about people who live and work in your communities, people who are developing intellectual property and many times are successfully exporting that to markets beyond our borders and bringing that revenue back to Canada.
We look at Bill C-10 as a way of really improving that and adding to that.
View Heather McPherson Profile
NDP (AB)
Thank you. That's wonderful.
One concern that's come up as we talk about Bill C-10, of course, is the need for freedom of expression to be protected. Of course, this is something for which, as you will know, the NDP has pushed for a very long time. I think artists probably more than any other group of people would defend freedom of expression. It's at the heart of their reason for being.
Could you tell us more about the economic reality for artists in your industry and why they want web giants to pay their fair share while fully, of course, respecting the freedom of expression and the ability of people to publish content of their choice on the Internet?
Andrew Cash
View Andrew Cash Profile
Andrew Cash
2021-05-17 15:25
Right now, the way the Internet sector is working for music is that few companies, few artists, have any leverage in negotiating with YouTube. The music's generally up already. The choice is between licensing and getting a lousy return on that licensing or getting no money at all. That is really a stark choice for entrepreneurs, absolutely, but for the artists themselves, it presents a huge problem.
I'm not going to say that it's all terrible news for artists. As I said right off the top, these platforms represent enormous opportunity, but we have to get it right. Part of getting it right is bringing these massive companies, the biggest companies in the history of time, under some kind of regulatory system whereby they can be accountable to the people of Canada.
Janet Yale
View Janet Yale Profile
Janet Yale
2021-05-17 15:59
All right.
What I've tried to do is draw that distinction. Maybe I haven't done it clearly. The later amendments make it clear that the only thing that will be regulated with respect to platforms.... Let's keep the streaming services aside, because I think the controversy now seems to be more about the social media platforms than the streaming services.
Streaming services, as curators, purchase and create the content that they then package and make available to you. If a producer creates a show that is then offered on Netflix, it's generated by a creator, but I don't think we're talking about that in the same way as what we think of on YouTube as user-generated content where people make things—podcasts, songs, dances, whatever—and then post them to a platform. They're user-generated. They're not contracted directly by a streaming service. The platforms are available to people to put things on at their discretion.
That discretion doesn't change. People can post whatever they want on social media platforms. There's no regulation. The more recent amendments that Minister Guilbeault spoke to said that there would only be three things that could be done vis-à-vis those platforms—only three. There's been a real contraction of the regulation-making power of the CRTC vis-à-vis those platforms.
The three things are that, first, they have to provide information about their revenues, whether advertising or subscriptions. Two, those revenues are used to calculate what their levy will be, or their spending requirement, as the case may be. It's just how much you are making in Canada and what the appropriate amount is to make as a contribution. The third piece is what we've been calling discoverability, which is how to make the Canadian creative content visible.
That's it. I have a hard time seeing how that's regulation of the content. It just isn't.
View Tim Louis Profile
Lib. (ON)
I appreciate your saying that. I appreciate your bringing up playlists, because, as an artist, I understand how Canadian artists face challenges in competing with American conglomerates and resources. The Broadcasting Act has always ensured that Canadian artists have the resources to grow to become visible locally, nationally and internationally. I feel that when Canadians go online—for example, on YouTube or someplace that has a playlist—they have a hard time discovering any Canadian artists on these platforms. That's a concern for me. I know it's a concern for our Canadian artists and the whole culture sector. Our artists are the voices of Canadians. I don't think that those online should be solely exposed to American culture.
You have written, “As originally drafted, the Bill left open the possibility that some platforms, such as YouTube, might be able to avoid its obligations to make appropriate contributions. That oversight has now been remedied and we welcome that correction.”
Could you explain your comments in more detail? It's around proposed section 4.1, that balance between supporting our artists and protecting our own free speech.
Janet Yale
View Janet Yale Profile
Janet Yale
2021-05-17 16:07
Exactly, and I think the removal of proposed section 4.1 makes it clear that social media platforms are within the scope of Bill C-10, which might have been unclear before that.
As I've said, it is my view that because the user-generated content, which is still covered by clause 2.1, is exempt from regulation, I believe there is no threat to freedom of speech and that users will continue to be as free, once Bill C-10 is passed, to put whatever content they want online or on social media platforms as they are today.
View Anthony Housefather Profile
Lib. (QC)
Thank you, Mr. Chair. It's been a pleasure to listen to the witnesses today and to the vibrant debate.
I also want to say that some people have been heralded as champions of freedom of expression. I believe each and every one of the witnesses is a champion of freedom of expression, as are Canadian artists and as are all of the members of the committee. We are all devoted to and care about freedom of expression.
I would point out that at the meeting we had with Department of Justice officials and Minister Guilbeault last week, I was the only member who asked about whether or not there was interplay with section 1 and section 2(b) of the charter when it came to discoverability, which is one of the issues that was raised today by Dr. Geist.
I want to walk through with Maître Yale—as I'm going to call her because I'm from Quebec—a couple of the issues that I have, as questions.
We're going to start from the premise that I think we all agree that users are not governed by proposed new section 2.1. The users themselves are not governed. If a user's content is governed, it's solely governed through the online undertaking, which would be governed to a lesser extent in very specific ways, provided that Ms. Dabrusin's amendment is adopted by the committee.
Those specific ways would be, number one, that they would have to disclose their revenues in Canada. I can't imagine that this would be a freedom of expression issue. Number two, they would be required to contribute to Canadian culture. I can't imagine that this would be a freedom of expression issue. The only freedom of expression issue, in my view, could lie with a third factor, which is discoverability, which is the only other thing that could be regulated if Ms. Dabrusin's amendment is adopted.
Maître Yale, would it be true, in your perspective right now, that online undertakings such as social media platforms—and I will use Facebook as an example—can actually censor the content of user posts based on their own documented rules and regulations?
Janet Yale
View Janet Yale Profile
Janet Yale
2021-05-17 16:17
I think we have to be careful about what we mean when we think of social media platforms and the ability of these large tech platforms to intervene in content. If there is content that they consider illegal, they do today monitor content. I think it's a bit of a fiction to suggest that there is no regulation of content online. These undertakings self-regulate, because there are no rules of the game. They are thus quite vigilant—
View Anthony Housefather Profile
Lib. (QC)
I wasn't arguing that; I was actually arguing the contrary. I was saying that beyond illegal content, social media providers will frequently say that certain things cannot be posted that are racist but that are not illegal and not hate speech. Their actual rules go beyond just legality. Isn't that correct?
Janet Yale
View Janet Yale Profile
Janet Yale
2021-05-17 16:18
Absolutely. It's really a subject for another day as to whether they self-regulate what I call the lawful but awful content today. Each platform has its own rules and regulations. Some take it down for different reasons and don't make it available. That is going on already, for sure.
That was one of the reasons that I made the point that the notion that these algorithms are innocuous is not true. Each platform has its own rules and its own accountability as to what it monitors, what it takes down, what it promotes and what it pushes out at you. I don't buy the argument that somehow freedom of choice on the part of consumers reigns. It's the platforms' commercial interest that dictates to a large extent what you get to see, so I totally agree with you. I think it's better that we make sure some of those choices are Canadian ones.
View Heather McPherson Profile
NDP (AB)
Then it's the definition, but you're supportive of the idea of making Canadian content, making it more available, promoting it, ensuring that our stories are being told or whatnot.
When these web giants do not pay their fiscal fair share, I feel like it is a gift from the government to these web giants at the expense of our cultural sector, at the expense of our cultural enterprises and our cultural sovereignty.
How would we fix this so that we're not giving the web giants the gift and instead are giving our cultural sectors these gifts?
Michael Geist
View Michael Geist Profile
Michael Geist
2021-05-17 16:26
It's tax. The obvious way that we ensure that these companies contribute into the Canadian economy if they are as successful as we've been seeing is by ensuring that we tax them appropriately and have the revenues coming out of that taxation to use as we see fit. That's obvious.
The reality is that some of these companies are major investors in the country. Former heritage minister Mélanie Joly went out and got a $500-million commitment over five years to ensure that there was investment in production in Canada. It's not as if they produce nothing. Jusqu'au déclin is a good example, and Trailer Park Boys or others for Netflix. We can cite many of these kinds of examples.
I don't think it's correct to say that they don't contribute anything or that they aren't producing in Canada. They quite clearly are, but it is fair to ask whether they're paying their fair share from a tax perspective. There's evidence to suggest that because of the way the system has been structured, they have not been, and we need to fix that. With that tax revenue, we can do all of this without blowing up the Broadcasting Act in this manner and directly implicating the free expression of users.
View Julie Dabrusin Profile
Lib. (ON)
Thank you, Mr. Chair.
My first question goes to Ms. Yale.
I was happy because we talked a little bit about not just proposed subsection 2.1 and then the removal of proposed section 4.1 but also the amendment I put forward, G-11.1, which really restricts what the CRTC powers would be as far as obligations go for social media companies to report revenue made in Canada and contribute a portion of that revenue to the Canadian cultural investment fund. The other part is that the discoverability requirement would be different from that which applies to radio and television. It is actually only for the discoverability of Canadian creators of programs and doesn't have the system we think of when we think about traditional broadcasters.
Taking into account that very restricted scope that's being proposed for the application to the social media platforms and the full exclusion of the application to people who are posting their content, do you think this bill should move ahead?
Janet Yale
View Janet Yale Profile
Janet Yale
2021-05-17 16:34
Absolutely. I think there's a real sense of urgency. As a number of committee members have pointed out, these streaming and sharing platforms are extracting huge value from Canada through delighting audiences and reaping advertising and subscription revenues. On a simplified basis, as you've described, they would be required to make a contribution and to ensure that Canadian choices are made visible for people to choose from. I think that's a great thing and a really important step in the right direction.
Janet Yale
View Janet Yale Profile
Janet Yale
2021-05-17 16:36
I would say that what really struck us was the sense of urgency on the part of the Canadian creative community.
It is true that some of these platforms and streaming services spend money in Canada on service productions, but the real test from a cultural policy perspective is whether or not there are investments in production in which the key creative positions are held by Canadians. That's what going to ensure that there is a vibrant cultural sector in Canada, and from a cultural policy perspective we strongly believe this. What we heard from coast to coast to coast was that we needed to bring these online services into the legislation and ensure that they make an appropriate contribution to Canadian cultural policy. We heard that loud and clear wherever we went.
View Steven Guilbeault Profile
Lib. (QC)
Thank you very much, Mr. Chair.
Good morning, members of the committee.
I’m joining you from Montréal, on the traditional lands of the Mohawk and other Haudenosaunee peoples.
I am pleased to appear before you to discuss Bill C-10, the explanatory document the Department of Justice drafted in response to your request, and the impact of your committee’s amendments to Bill C-10.
I have with me officials from my department, as you said, Mr. Chair, as well as senior officials from the Department of Justice. I am delighted to contribute to your review of the bill.
I would like to begin by thanking this committee for its important work to date.
Since Bill C-10 was introduced, the cultural sector, broadcasters and experts have given us—and you too, I’m sure—much food for thought. They have provided input and support on updating the Broadcasting Act across the country.
Our broadcasters, our production sector and the cultural sector as a whole are counting on this new legislative tool to continue to flourish on digital platforms.
They are counting on this tool to level the playing field between conventional broadcasters and digital platforms. In other words, the bill is about restoring a balance that the arrival of the Web giants has skewed very seriously in their own favour at the expense of local people and businesses.
If we do not modernize the act, within a few years, our creators, artists and musicians risk losing up to a billion dollars annually.
However, if we move forward with Bill C-10, the Department of Canadian Heritage predicts that by 2023, online broadcasters could be contributing up to $830 million per year to Canadian content and creators.
Let's remember that the audiovisual and interactive media industry employs nearly 160,000 Canadians every year. According to the 2016 census, the median annual income for core artist groups, such as musicians, singers, authors, writers, producers and directors, was only $24,300, which is well below the $43,500 median for all workers.
To make matters worse, this industry is still suffering the effects of the COVID-19 pandemic. In the years to come, the positive impacts of Bill C-10 will stimulate industry growth and increase the visibility of our stories and our artists.
Canadians also support this initiative. More than seven out of ten Canadians feel that more needs to be done to promote Canadian and Quebec audiovisual content in the country, and almost half say that this content is not easy to find.
Although some have the view that any type of regulation for web giants is too much, most Canadians believe that we must act: 78% of Canadians agree that streamers need the same rules as those of Canadian broadcasters; 81% support the principle that Facebook and Google should pay more for news; and 83% support some form of accountability for these companies for the content shared on their platforms.
The first objective of the bill is to ensure equity between conventional and digital broadcasters and to ensure that social media platforms that act as broadcasters are also contributing to our cultural industry.
Another objective is to promote Canadian cultural expression in all its diversity, including that of indigenous and racialized communities.
The goal is not to regulate content generated by users, such as videos of our children, friends and colleagues. It never was. And it never will be.
However, one thing is clear: more and more Canadians are listening to their favourite music and artists on social media. Right now, YouTube is the most popular online music listening service in the country.
Witnesses who appeared before this committee showed that section 4.1, as drafted in the original version of Bill C-10, could allow social media platforms to get away with just about anything. They also demonstrated that section 4.1 did not take into account how these types of services are used to deliver professional content, such as content put online by record companies.
While other online businesses would be required to contribute to the objectives of the Broadcasting Act, social media platforms would not. How could we justify imposing obligations on Spotify, Apple Music or QUB Musique, but not on YouTube, a Google subsidiary?
Following the constructive debate at second reading of the bill, all opposition parties, including the Conservative Party, deplored the fact that social networks were not covered by the bill.
Let me give you a few examples.
On November 19, the Conservative MP from Saskatoon—Grasswood, Mr. Waugh, told the House of Commons the following:
It is deeply disappointing that the government's proposals are so incredibly lacking. I am going to focus in on four points today. First, the legislation does nothing to address social media companies, such as Facebook and Google, and their various properties, such as YouTube, to pay its fair share.
On March 26, he also added—again, this is the beginning of the quote:
To the Professional Music Publishers' Association, you're right on about YouTube. It is not regulated in Bill C-10, and everybody is using YouTube. We are going to have an issue. As you pointed out, correctly, this should be regulated and it's not.
That’s why it was not surprising that on April 23, a majority of the members of this committee, including those of the Bloc Québécois and the New Democratic Party, agreed that first, section 4.1 should be withdrawn, and that the CRTC’s powers should subsequently be restricted with respect to social media platforms.
We know that these platforms are very different from conventional broadcasters. The amendments proposed by my parliamentary secretary last week limit the CRTC's power to three main requirements: Number one, platforms must provide information about their revenues; number two, they must contribute financially to the Canadian cultural ecosystem and, finally, they must increase the visibility of Canadian creators.
All of this would be done without ever preventing anyone from putting their own content online and sharing it, or forcing anyone to watch anything against their will. In other words, you and I, like all Canadians, would continue to enjoy the same freedom online that we enjoy now.
I've said it before and I will say it again: We're not targeting individuals; we are targeting the web giants, which are almost all American companies. Our goal is simple, to get these multi-billion dollar companies that generate hundreds of millions of dollars in Canada every year to do their part to make sure our creators and artists are better paid and more visible online.
We must remember that Canadian radio, television and cable companies have been subject to similar obligations for more than 50 years. In the spirit of fairness, Bill C-10 would extend these obligations to streaming services and social media platforms when they act as broadcasters.
In the spirit of fairness, Bill C-10 would extend these obligations to streaming services and social media platforms when they act as broadcasters.
Bill C-10 recognizes that there is a large diversity of digital business models. It provides ample flexibility to craft common sense rules that will evolve over time as technology changes and Canadians’ habits for accessing culture change.
Once again, let me be very clear: there is no question of censoring what individuals post on social media.
I would also like to point out that the Department of Justice, in its updated analysis of the bill as amended by the committee, confirms that the bill is still consistent with the Canadian Charter of Rights and Freedoms.
The Internet is dominated by a few massive American companies whose algorithms dictate what we see, what we hear and what we consume. We are inundated with their information. Many of our artists and creators, especially francophones, indigenous and racialized people, have a hard time being heard.
Far from limiting anyone's freedom of expression, Bill C-10 wants to give more visibility to these artists and creators to ensure a greater diversity of voices and perspectives, to counter homogenization and to assert our cultural sovereignty over foreign companies that are only accountable to their shareholders.
I hope the committee will resume its work and quickly move Bill C-10 back to the House of Commons. As always, I would be delighted to support you in your work. I look forward to answering your questions.
Thank you, Mr. Chair.
View Alain Rayes Profile
CPC (QC)
That's fine. That's a good answer, especially since the Prime Minister also said he would defend net neutrality wholeheartedly. The Minister of Canadian Heritage before you, Ms. Joly, also said this in the cultural policy she introduced. She even said that the government agreed on the principle of net neutrality.
Internet neutrality is defined as “a principle that should ensure equal treatment of all data flows on the Internet”. This includes everyone.
Navdeep Bains, while he was Minister of Innovation, Science and Economic Development, said this: “Net neutrality is one of the critical issues of our time, much like freedom of the press and freedom of expression before it.”
Mr. Lametti, while serving as parliamentary secretary to the Minister of Innovation, Science and Economic Development, said this:
It is clear that the open Internet is a remarkable platform for economic growth, innovation and social progress in Canada and around the world. It is essential to a modern digital economy and society. Many activities depend on it, including access to health care, education, [...], and entertainment. More broadly, it is vital for freedom of expression, diversity and our democratic institutions. A flourishing and vibrant democracy is possible only when citizens are able to communicate and access information freely.[...]Our government supports an open Internet [...]
You introduced Bill C-10. You did mention at the outset that its purpose was to restore the balance, in terms of regulation, between digital and conventional broadcasters. Just so everyone understands, we're talking about Netflix, Disney+ and other digital platforms that compete with broadcasters like TVA, CBC/Radio-Canada and CTV. This could also apply to radio stations.
In the process, you chose to delete the originally proposed section 4.1. I would like to know why this section was proposed in the bill in the first place.
View Steven Guilbeault Profile
Lib. (QC)
The last time the Broadcasting Act was modernized, you may recall, was under a Conservative government. That government put in place the entire regulatory ecosystem that we have today for conventional broadcasting. What we are trying to do through Bill C-10 is to adapt the regulations to the Web giants, who are becoming more and more important in the current ecosystem.
You mentioned net neutrality. As you know...
View Rachael Harder Profile
CPC (AB)
Okay.
Will the CRTC then be given the responsibility under Bill C-10, the power to regulate the algorithms used by social media platforms to decide what type of content that people can and cannot see on their Facebook feeds or the information that appears on Google or YouTube?
View Steven Guilbeault Profile
Lib. (QC)
Again, the concept of discoverability is ensuring that, as part of these platforms, Canadian content becomes more visible for Canadians, or actually any audience, to watch. There won't be any requirement, obviously, for users, just like is the case right now with YouTube—
View Gabriel Ste-Marie Profile
BQ (QC)
Thank you, Mr. Chair.
Good afternoon, Minister. Thank you for being here.
Thank you, as well, to your team of officials.
Minister, the bill contains a slew of very positive measures. I have a limited amount of time, so I will focus on those I have questions or comments about.
I'll start with division 8 of part 4, which enacts the Retail Payment Activities Act.
I realize that legislation in this area is needed given the current void, so I applaud the measure. I will continue to examine how the legislation will interact with the Quebec Civil Code, which governs person-to-person transactions. I want to better understand why the federal government is regulating these activities.
Right now, though, I am mainly interested in hearing about your plans for the tech giants, major online retailers such as Amazon and Walmart. Does division 8 of part 4 allow them, either directly or indirectly, to provide services currently offered by financial institutions?
View Chrystia Freeland Profile
Lib. (ON)
Good afternoon, Mr. Ste-Marie. I always appreciate your questions and comments.
Initially, I thought you were going to ask about the taxes we will be collecting from tech giants thanks to this budget.
As far as financial services are concerned, as you know and as you pointed out, we talked about engaging in a discussion, a consultation. That's what we are proposing.
View Gabriel Ste-Marie Profile
BQ (QC)
Once the consultation process for division 8—which enacts the Retail Payment Activities Act—comes to an end, you have no plans to give Amazon, Walmart and other tech giants the same ability that financial institutions have to provide payment tools.
View Chrystia Freeland Profile
Lib. (ON)
No.
We realize three things.
First, we understand that Canada's situation is unique. The reality is that the Quebec Civil Code exists, as you said, and any actions we take must be acceptable to all the provinces and territories. That makes Canada's situation unique.
Second, we understand that this is the 21st century. Technology and the global economy are changing rapidly, so we need to pay close attention to those changes. Canada and Quebec want to—and must—be part of the modern economy.
Third, we must always protect Canadian businesses and citizens. That means ensuring the playing field is always level for Canadians and foreign companies.
View Gabriel Ste-Marie Profile
BQ (QC)
Thank you.
My first question is for Mr. Marsland.
As I understand it, the government intends to charge tech giants a 3% tax or royalty on their operations. The contribution would be equivalent to the taxes other companies have to pay. However, an international company that provides an online streaming service where users can watch movies or television series would not be subject to the 3% royalty or tax. Is that correct?
Andrew Marsland
View Andrew Marsland Profile
Andrew Marsland
2021-05-11 17:53
As I explained in my earlier response, the proposed tax will apply on certain revenues associated with value creation in Canada. That value creation typically comes from the monetization of user data in Canada, in such a respect the proposed tax is really quite similar to those in place in other G7 countries, for example, in France, Italy, and the United Kingdom. In a similar fashion, the proposal is to get at that value creation in Canada. Companies that fall within the scope of that would be required to pay it on a certain portion of their revenues that is associated with that value creation, which is typically the monetization of user data.
View Gabriel Ste-Marie Profile
BQ (QC)
Thank you for your answer.
I need some clarification. Let's say a person buys something online from a tech giant and pays $20 Canadian for a product made in China. The company making a profit on the transaction will not have to pay a royalty since there was no value creation in Canada, the product having been made in China.
Is that what you said? Do I have that right?
Andrew Marsland
View Andrew Marsland Profile
Andrew Marsland
2021-05-11 17:55
In a sense, Mr. Chair, that is what I'm saying. If you think about that analogy, a Canadian exporter who exported, for example, an agricultural product to China would not be subject to tax in respect of that economic activity in Canada unless they had a physical presence in the destination country and had a branch there and added value there. In a sense it's like that. As I mentioned earlier, the bill does include measures to ensure the appropriate taxation of the consumption through the GST or HST in Canada.
View Peter Julian Profile
NDP (BC)
Thank you very much, Mr. Chair. I understand now why the minister was stepping so gingerly around this, and I understand why you, Mr. Marsland, are stepping so gingerly around this.
Netflix is out of scope, so my question to you is what percentage of the overall web giants are excluded—“out of scope” would be the words you used—from the actual application of the digital services tax?
While I have the microphone, my second question, which the minister also avoided answering, is, at this point, how much money has been spent on Trans Mountain? We were told last year it's the Canada account of the EDC that is used to basically launder the money and take it. The PBO tells us it's $14 billion for construction and another $4.5 billion for purchase. We're at roughly $18.5 billion for Trans Mountain. What are the finance department figures on how much has been actively spent so far?
Those are my two questions—the percentage of digital services that are excluded or web giants that are excluded because they are out of scope, and then the cost of Trans Mountain.
Andrew Marsland
View Andrew Marsland Profile
Andrew Marsland
2021-05-11 17:57
Thank you for the question, Mr. Chair. I always step gingerly at this committee.
I can't really answer the question, because I'm not sure how to apply a percentage to what. What I can say is that the scope of this proposed tax is very similar to the scope of equivalent taxes in other G7 countries and elsewhere in that they typically apply on the types of revenues that I described earlier.
I'll turn it over to Ms. Dancey for the same questions.
View Peter Julian Profile
NDP (BC)
Thank you very much, Mr. Chair.
Mr. Giroux, you spoke earlier about measures that could be taken against the web giants. You mentioned a tax that could generate $2 billion to $3 billion. However, these measures don't take into account the excessive profits that these giants may have made during the pandemic.
What tools do you need to properly calculate excessive profits of a sector that doesn't typically provide accurate sales and revenue figures?
Yves Giroux
View Yves Giroux Profile
Yves Giroux
2021-04-27 17:59
To make such a calculation, we obviously need sales and profit data from comparable firms. We also need historical data to see what reasonable profits look like, as long as “reasonable” is defined.
When a limited number of players largely dominate a sector, as is the case in the technology and social network industries, it's difficult to find comparable companies to turn to in order to determine what a reasonable profit is.
In the absence of such data, we can look at the rate of return on investment that investors typically expect, but it's difficult to use only this type of information since it doesn't take into account the risk associated with very specific sectors.
So we need historical data on sales, costs and profits. This is the best way to determine what a normal profit is and what constitutes upward deviations that can be defined as excessive profits.
View Maxime Blanchette-Joncas Profile
BQ (QC)
There are other ways to make retail businesses more competitive. We've noticed in the past few years that taxation is the main way to accomplish this. How can a retailer compete with a web giant? We've also noticed that tax collection isn't necessarily fair to our local retailers. The federal government is unable to collect GST from web giants located outside the country. I'd like to hear your thoughts on this.
The announcements made yesterday as part of the budget had already been discussed recently. As of July 1, all digital platforms will be required to collect GST. In your opinion, is this measure timely for well-established businesses in our municipalities? Do you think that the impact is already too severe and that it's too little too late to reverse the trend?
Jean-Guy Côté
View Jean-Guy Côté Profile
Jean-Guy Côté
2021-04-20 16:59
I'll tell you right off the bat that it's better late than never.
Basically, you must understand that the QST is currently being collected by most online platforms in Quebec. Some aspects are already in place. The Quebec experience shows that, when asked, most major online sales platforms readily comply with government requests to register and collect taxes.
Since 2015, we've been talking about this issue and we've been wanting to see this money come back home. There will always be work to do to ensure fairness between retailers and online businesses located outside the country. One option would be to decide that the buyer's place of residence will now be the primary factor in determining whether to collect the tax, instead of relying solely on the business to collect the tax.
Again, I want to point out that tax collection in Quebec is going well. The fact that this measure will be extended to the rest of Canada is good news. In Canada, 86% of online sales are made to businesses outside the country. In 55% of cases, these businesses are located in the United States. In 31% of cases, the businesses are located in other parts of the world. A huge number of non-Canadian or non-Quebec online businesses aren't subject to Canadian borders. It's good news that elements of fairness are being introduced.
View Maxime Blanchette-Joncas Profile
BQ (QC)
In your opinion, Mr. Côté, what would have been the impact if the GST collection had started before the pandemic, following the example of Quebec, which started collecting the GST in 2015?
Jean-Guy Côté
View Jean-Guy Côté Profile
Jean-Guy Côté
2021-04-20 17:01
I can't say what the impact would have been.
However, it's important to acknowledge that the major trends in online shopping and retail were already under way. Did they pick up speed during the pandemic? Would some consumers have behaved differently? Would they have shopped at local businesses instead of through the major platforms? Perhaps.
However, it's important to note that the pandemic has made buying local more popular. People connected with their local businesses. They wanted to know about local businesses, so they searched online to find them. Also, the fact that people were working from home had a positive impact on businesses on nearby streets or on the main street in their neighbourhood. This helped the retailers and the small, local businesses. I like to say that we'll go back to the days when the retailers knew our first name. In our opinion, this is a great trend and great news. It's probably one of the silver linings of the pandemic.
View Gabriel Ste-Marie Profile
BQ (QC)
My last question has to do with tax fairness.
During the pandemic, since businesses were closed, people turned to Web giants like Amazon. Should the federal government expedite the requirement that these giants collect sales tax and pay the equivalent of a tax on their sales?
Jacques Létourneau
View Jacques Létourneau Profile
Jacques Létourneau
2021-04-15 17:46
This was in my presentation, but unfortunately I skipped this topic. You did read the brief that we filed not too long ago. We do believe that the government needs to implement a tax on the GAFAs of this world, i.e. Google, Apple, Facebook, Amazon and others, while waiting for the OECD's proposed tax measures to be implemented.
I think the Liberal Party of Canada made a commitment to implement such a tax in the last election. What is called the temporary GAFA tax should definitely be implemented in the 2021 budget. I think it is urgent. It must be done to respect Quebec and Canadian companies, which pay taxes in Canada and Quebec.
View Sébastien Lemire Profile
BQ (QC)
Thank you, Madam Chair.
I will continue with Mr. Winseck and Mr. Klass, from the Canadian Media Concentration Research Project.
Tax evasion heavily favours major U.S. digital media such as Netflix, Disney, Facebook and other web giants, to the detriment of the prosperity of Quebec and Canadian media. This is a serious problem for the present and the future of Quebec's and Canada's media ecosystems. To address this, Australia adopted a code of conduct.
What measures do you think the federal government and the Government of Quebec should consider to ensure that Quebec's and Canada's media companies would decreasingly suffer from the negative effects of unfair competition from American big tech companies?
Dwayne Winseck
View Dwayne Winseck Profile
Dwayne Winseck
2021-04-15 12:58
There seem to be a couple of questions there.
Regarding the idea of the tax question, I think that's pretty low-hanging fruit, and we can standardize the HST and GST across the like services. I think we're waiting on a developments agreement at the OECD on a digital services tax that would harmonize that across the OECD countries. I think that's fine.
I think once we get into the other questions about how we regulate Netflix, for example, or Facebook and Google, is the Australian model a good one, for example? I think there is much of interest in that model: the recognition of these companies' dominant market power; the idea that Google controls vertically integrated...with its own online ad exchange and all the data around which that ad exchange works, and that we need to open up the kimono to allow regulators and others to access that data to see how the algorithm works. I think these are good things.
The idea, though, that somehow this just ends up with transferring buckets of cash from the so-called web giants to domestic players, I think, is a real Achilles heel here that we need to avoid. We need to deal with the market power, black box technologies, and it cannot just go to delivering buckets of cash from foreign players to domestic ones.
Vass Bednar
View Vass Bednar Profile
Vass Bednar
2021-04-15 13:00
My big observation for the competition environment with telecommunications is just recognizing that we allow providers to compete on both the infrastructure and the services, and this kind of structural function contributes to a lot of the challenges that have been documented. I hope that's helpful.
View Kevin Waugh Profile
CPC (SK)
I want to thank all four from the CRTC who are with us here today.
I just want to ask you a question, if you don't mind, Mr. Scott, being the chair.
We've heard some say that actually today you have the power to regulate the streamers like Netflix, Disney+ and Amazon.
Do you have that authority here today, in 2021, to regulate it?
Jérôme Payette
View Jérôme Payette Profile
Jérôme Payette
2021-03-26 14:17
Good afternoon, Mr. Chair and members of the committee.
I'd like to thank you for the opportunity to appear before you to discuss this bill, which will be crucial to the future of our culture.
The Professional Music Publishers' Association, or PMPA, represents music publishers in Quebec and French-speaking Canada. Our members control 830 publishing houses with approximately 400,000 musical works.
As partners of songwriters and composers, music publishers support the creation of musical works, and promote and administer them. Publishers are involved in everything from paper scores to online music services to concerts, video games and audiovisual products.
I'd like to mention that our association is a member of the Coalition for the Diversity of Cultural Expressions, or CDCE, and supports its proposed amendments to Bill C-10.
I'm testifying at the end of the process, and many of the topics that are important to us have already been discussed with you. So I will keep that in mind as I speak.
The bill needs to be amended to meet cultural objectives, and it must be passed quickly.
Canada's broadcasting legislation has been pursuing much the same objective for nearly 100 years, namely, that citizens have access to our content to preserve our identity and culture.
To avoid global cultural standardization, we must think globally and act locally. Canada must protect the diversity of its cultural expressions, especially francophone diversity. To take our place in the world, we have to have our own identity and a flourishing culture.
In the past, Canada has taken bold steps, such as the introduction of radio quotas, and these measures have been copied around the world. I invite you to continue this tradition, whose objectives are as important as ever. We need you to work together to ensure that a bill that supports our culture is passed quickly.
We must level the playing field and not deregulate.
The current legislative and regulatory system exists because market forces can't guarantee the survival of Canadian culture, particularly francophone culture. This is largely a demographic problem, in addition to the fact that we're just north of the country that exports the most culture. This reality hasn't changed because new technologies have emerged; on the contrary, it's gotten worse.
Our cultural industries are fragile; they have emerged through a series of measures, including the Broadcasting Act. If the legislative environment is no longer favourable to us, our cultural industries could disappear or no longer reach Canadians.
The current situation is unfair to conventional broadcasters, that's true. However, regulatory relief would not allow them to recover the advertising revenues and listeners they have lost to online broadcasters. The level of regulation imposed on conventional broadcasters has nothing to do with the changing habits of Canadians.
Foreign companies must be encouraged to contribute to our culture and identity, as conventional broadcasters do. We have to level up. Not doing so would be tantamount to deregulating, which would be tragic for our culture.
We need to be visionary and not exclude social media from the act.
I listened carefully to the testimony of the Minister and the officials who appeared before you on March 8, and I'm not at all reassured. To avoid becoming obsolete as soon as it is passed, the act must apply to all companies that broadcast professional cultural content, without exception.
YouTube is the most popular online music service in Canada, and I'm talking about YouTube, not YouTube Music, which should be distinguished. Under the current provisions of Bill C-10, Spotify and QUB musique would be regulated for the broadcast of a song, while YouTube would not be regulated for the broadcast of the same song, which would be totally unfair.
The term “user-generated content” is imprecise, and Bill C-10 attempts to define a risky uploading process. The content is important, not the process of putting it online. The act must be neutral with respect to technological processes.
Under the wording of Bill C-10, a song or video that is posted online by industry professionals or self-produced professional artists would be exempt from the act. Contrary to what Mr. Ripley told you, distinguishing professional cultural content from amateur video is not difficult. YouTube already distinguishes professional music content from its entire repertoire using metadata.
I would like to point out that the means of broadcasting will continue to evolve, as will the business models, and that people will continue to listen to music and watch videos. The fundamental question is, will people still take in our culture? You have to make sure the answer is yes.
In conclusion, we need all of you to work together to amend and pass a new Bill C-10 that, by levelling the playing field, will establish fair obligations for all companies operating in Canada. This will allow us to avoid destroying the cultural sector, particularly the music sector. Our culture needs you.
Thank you. I will be happy to answer any questions you may have.
View Peter Julian Profile
NDP (BC)
I am going to interrupt you so that I can ask a second question. Then I would like to turn to Mr. Littler.
You mentioned the public beneficial ownership registry. That is missing in Canada and we had proposed it. Yet the majority of the Standing Committee on Finance rejected our proposal.
Why is it important to know who the beneficiaries of these companies are?
William Ross
View William Ross Profile
William Ross
2021-03-25 16:34
Actually, first of all, it's a question of traceability. Whenever the Canada Revenue Agency, for instance, tries to find out who is being delinquent on their taxes and it runs into a shell company based in the Bahamas or Bermuda, it hits a wall at a certain point as it hunts for information and it's unable to trace the people responsible for those tax crimes.
That's a problem in terms of tax evasion and tax avoidance, but also in terms of money laundering. Organized crime does a lot of that, particularly in real estate investments across Canada as well.
For all these reasons, it's absolutely crucial that we know who the beneficiaries of these companies are.
View Peter Julian Profile
NDP (BC)
Thank you very much.
Mr. Littler, I'm going to go to you. If you could tell us a bit about the impact.... We've just spoken about web giants not paying any income tax at all. What is the impact on retail merchants across this country when you have a whole sector that isn't even paying taxes but competing with members of your association? What would you like to see done so that there isn't that unfair competition anymore?
Karl Littler
View Karl Littler Profile
Karl Littler
2021-03-25 16:35
The first thing I would say is that the government, of course, is making some moves with respect to the platform sellers with respect to tax collection there. Certainly one of the challenges that Canadian retail merchants have faced was the situation where a marketplace seller was not collecting provincial taxes and therefore their all-in price was inevitably going to be lower than the price that was tax-inclusive. The federal government can make some moves in that area because of GST, and obviously HST in harmonized provinces, but it doesn't have the capacity currently to move with respect to the provincial taxes. So that's going to be a partial solution to that problem.
There's also a move afoot to make sure that the landed price, which is the price on importation in bulk, is not the basis of taxation, and that the basis of taxation is that which is charged to the end-user, being an individual consumer.
We are in somewhat better shape than we were perhaps worried about being prior to the renegotiation of NAFTA, because there was a significant push from the U.S. to gain access at very high levels of de minimis thresholds for its members.
I think it's probably beyond us to understand the full corporate tax implications and the sort of domicile and declaration of profitability. Our primary push has been to make sure, at least on a sales tax basis and also with respect to things like environmental stewardship fees and those sorts of issues, that they're even-handed and that they apply equally to an online vendor, whether domestic or a Canadian resident, and to somebody operating in a bricks and mortar store.
View Gabriel Ste-Marie Profile
BQ (QC)
Thank you, Mr. Chair.
Mr. Ross, thank you for your presentation and the work you and the Collectif are doing. Your work is essential to achieving greater fairness in society.
I really enjoyed your testimony about the importance of taxing the tech giants and receiving royalties. Frankly, as you rightly said, the government missed an opportunity when they announced that they were going to do it after the pandemic. It should have been done before the pandemic, to level the playing field between the tech giants and other businesses.
I know that Quebec has already started collecting tax. Can you tell us about that?
Also, in your presentation, you had some criticism of the OECD. What is that criticism? Was it Canada's inaction on tax havens or on the tech giants?
William Ross
View William Ross Profile
William Ross
2021-03-25 16:53
Thank you, Mr. Ste-Marie.
With respect to the OECD, the first criticism I had in mind in my presentation is mostly about negotiations going back and forth. It means that the international community never reaches a consensus and all countries, including Canada, lose out independently of one another. If Canada had followed the lead of France and Spain, we could have passed a tax bill on our own, indicating what measures we intended to take. Then, if an international consensus had been reached, Canada would have joined in. Nothing was stopping us from doing so.
The United States retaliated against France and Spain, but if 20 countries had each done the same on their own, the United States would have ended up as unilateral. The international community has already reached a consensus on the need to tax these activities based on where they take place, not where the companies are registered. So that's one thing regarding the OECD.
Second, we know that the OECD grew out of the American Marshall Plan and has always tended to see itself on the progressive side of history when implementing its policies. However, it has consistently turned a blind eye where it really matters over the years. In the fight against tax havens, our objectives of being transparency and sharing data are always half measures.
That's the case for Canada, which participates in country-by-country reporting. It's actually hard for researchers, activists and journalists to gain access to that data. The transparency issue has been raised, but as long as civil society has no access to the data, then transparency is not enough. The government can always keep its own cards close to its chest.
But this isn't a poker game. We want the straight goods, and we want to know what's really happening out there.
View Alain Rayes Profile
CPC (QC)
Thank you, Mr. Chair.
I thank all the witnesses for joining us today to help our committee.
My first question is for Mr. Bernhard, from Friends of Canadian Broadcasting.
When the minister appeared before us, in answer to one of my questions, he implied that social media were included in the bill. However, I listened to your remarks today, and when I look at subclause 4(1) the bill is supposed to add to the act, I see that it would not apply to users generating and receiving programs through an online company that provides a social media service. Companies such as YouTube, Facebook and TikTok are some examples of [Technical difficulty—Editor] that enable users to upload content.
Do you have comments or information you would like to add to explain your opinion on this part of Bill C-10 that would lead to the Broadcasting Act not applying to social media services?
View Tim Louis Profile
Lib. (ON)
Thank you very much, Mr. Chair. I'd like to begin my questioning with ACTRA. Due to your guidance, I will say “Alliance of Canadian Cinema, Television and Radio Artists”, instead of ACTRA. I appreciated that. Acronyms are a fast learning curve here in Ottawa.
I would like to talk about how you're saying that you're welcoming foreign investment but that we do need to tell our stories. In the previous hour, you mentioned the history of protecting our Canadian culture and how important it is to support our writers, our actors and all the workers in those sectors. We all see in the local productions in all of our ridings how much that helps to tell our stories and also how much it helps the Canadian economy.
Can you expand on the work that members of ACTRA are already doing right now in working for the digital giants in some of the shows and on the relationship you have with them now and how you are hoping that will change in the future with this proposed legislation?
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