Mr. Speaker, it is my pleasure to speak to the bill before us today, Bill C-10.
Canada's cultural sector, communications and broadcasting companies and the media in general have been eagerly awaiting this bill.
The thing is, everyone was expecting a bill that would be in step with changes in the communications sector since the Broadcasting Act was first enacted decades ago.
I have a great deal fo respect for the Minister of Canadian Heritage, who made a passionate case for Bill C-10 this week. Here is how he began his speech:
From 2011 to 2019, the number of Canadians with Netflix subscriptions has grown from one in 10 to nearly six in 10. The number of Canadians using Spotify to listen to music online has jumped from 2% in 2014 to nearly 30% in 2019. We welcome these innovations that bring so much richness to our lives and so much diverse content. However, prolonging the status quo will only further undermine our ability to tell our own Canadian stories.
Unfortunately, it did not take long for the minister, who signed on to the Liberal Party of Canada shortly before the 2019 general election, to pick up the Prime Minister's and the Liberal government's bad habits.
Bill C-10 is full of fine words and intentions, but provides few measures and, more importantly, few answers to the many questions Canadian consumers, companies and media are rightfully asking. The media industry was expecting, and calling for, more.
I will tell you about the developments in the media industry as I experienced them myself over the years. I started my career in radio, in 1984, at a tiny station in Asbestos, now called Val-des-Sources. That radio station was CJAN. I was a casual employee and hosted a weekend show. I was also a news host when the need arose.
At the time, the radio station and the local newspaper were the only sources of local information in the Or-Blanc RCM, as it used to be called. Two hosts and a reporter worked full time, and then there was a casual employee and the management staff. There were a lot of hours of local production.
Then I went to Thetford Mines, a bigger city, and worked in an AM radio station. Some of the people who were elected in the last election probably do not even know what AM radio is. CKLD had about 30 advertising employees, reporters and hosts. Production was 100% local.
These two stations were part of what was called the Appalaches network, an independent association covering the Eastern Townships, Chaudière-Appalaches and part of Centre-du-Québec. At the time, I wrote my stories using a typewriter and carbon paper so I could keep a copy. That is how it was.
Then we began to see technological developments and I was given a typewriter that miraculously kept one line of text at a time in memory, which meant that I no longer needed correction fluid to fix my mistakes.
Then FM radio, computers and cell phones came along. All of this turned broadcasting on its head. When I started at the station in 1985, there were between 25 and 30 employees. Seven years later, I had to leave. There were only four full-time news hosts left. This was before the Internet.
I took a break from radio for a few months and became editor-in-chief of the Thetford Mines Courrier Frontenac. At the time, we were publishing the Courrier Frontenac, the Wednesday edition and a monthly for another sector of the RCM, and there was also another specialized newspaper. We had a team of five reporters, as well as collaborators. In short, it was a prime example of a local communication undertaking.
To put things in perspective, at that time we had to have our camera film developed, layouts were done almost entirely by hand, and we had to deliver the finished pages to the printer ourselves for printing and distribution. That is how it was. Thetford Mines even had a second weekly.
There were enough journalists in Thetford Mines at the time to form a softball team. We called ourselves “Les Chevaliers du Crayon”, the knights of the pencil. There was enough local coverage and enough journalists in our community to have a softball team. That says it all.
When I left in 1998 to go into politics, there was only one weekly paper left and a dwindling number of journalists. Competition was still fierce, but it was still local. Then came the electronic bulletin boards that people could connect to through their modems and get access to free content. Cellphones became increasingly portable, and then there was the Internet, data compression protocols, high speed, Yahoo, YouTube, Facebook and all the social media.
Back home in Thetford Mines these days, we still have one radio station and one weekly paper. I can count on two hands the number of people who work at those two places, and I need only two fingers to count the number of full-time journalists left in Thetford Mines.
Yesterday was rather serendipitous. The Courrier Frontenac published an article in its weekly edition under the byline of News Media Canada. I will read a quote from it:
From the very inception of newspapers in Canada, the best journalism in Canada has been supported and sustained by advertising revenues. Yet virtually all our digital media outlets now face an existential threat because of the anti-competitive practices of web giants Facebook and Google. These two global giants control 80% of all advertising revenues.
Now let's talk about radio. Last August, the Canadian Association of Broadcasters, or CAB, released the results of an economic study on the crisis in their field and the future of local broadcasting. The numbers that were released are terrifying. According to the forecasts in the report, 50 radio stations could well close their doors in the next four to six months, another 150 radio stations could do the same in the next 18 months and at least 40 of the 94 private local television stations in Canada could close down in the next 12 to 36 months.
These numbers have me worried. Lenore Gibson, chair of CAB's executive council, said the following in the press release accompanying this report:
Without immediate action, Canada will see a wave of local television and radio closures over the next three years. This will deny many communities a daily local media voice, and significantly reduce the diversity of news choices and voices in almost every community in Canada.
This is worrisome. Carmela Laurignano, vice-president and radio group manager of Evanov Radio Group, rightly stated, “If we allow local news to die, the health of Canadian society will be seriously undermined.”
Let us get get back to Bill C-10. How does it help radio stations and newspapers in my region and other Quebec regions? It does absolutely nothing for them. This was, however, a unique opportunity for the Minister of Canadian Heritage to take concrete action to help local production. When I say local, I really mean local, and that is 100% francophone back home.
Members will understand that I expected the amendments to the Broadcasting Act to be in step with the changes in the media industry in recent years. I am extremely disappointed. This bill will not hold Internet giants like Google and Facebook to the same competition rules as Canadian undertakings.
In its report entitled “Addressing the Tax Challenges of the Digital Economy”, the Organisation for Economic Co-operation and Development, of which Canada is a member, made several recommendations concerning the collection of information in the digital economy and companies without a physical address.
The other members of the G20 and the European Union, Australia—which has been much talked about—South Africa, Japan and South Korea have all modernized their laws to adapt to the new realities of e-commerce, but not Canada.
In recent weeks, and since 2015, we have often heard say that Canada comes last among the G7 and G20 countries. There is one exception, namely that the Liberal government has made Canada the first country in the G7, the G20 and the world to approve an agreement with Netflix for a one-off investment, but with no guarantee from the Internet giant with respect to French-language content.
We do not know the details, but one thing is certain: Netflix, Disney, Apple, Amazon and Spotify are not taxed in Canada. They do not contribute to the Canada Media Fund, and they are in no way obliged to broadcast Canadian content. We are helping these companies that generate billions of dollars by allowing them to play by rules different from the ones imposed on local undertakings, which are obliged to pay taxes in Canada.
The result of all this is unfair competition that leads to significant job losses in the cultural and journalism industries and that erodes the quality of our national product. The problem is not a lack of creativity. We are well aware of Canada’s vast wealth of creativity. However, to create, we need resources and if we do not have the necessary resources because profits are leaving the country, we will lose hundreds of millions of tax dollars that could have been used to improve creation in Canada and Quebec.
When we started hearing about reforming the Broadcasting Act, we were all expecting taxation to figure into the reform. After all, this was one of the main recommendations in the Yale report, entitled “Canada's communications future: Time to act”, which was the basis for Bill C-10. I quote:
The application of GST/HST to foreign online services is a different matter. Consistent with actions taken by some provinces and many other countries, we recommend that sales tax be applied equitably to media communications services provided by foreign online providers. This would eliminate the disadvantage to competing Canadian providers.
Businesses are either taxed or they are not. During the Conservative Party leadership campaign, the member for Durham and Leader of the Opposition quite rightly proposed that the GST be removed for subscriptions to Canadian digital platforms, which would promote online cultural content broadcast by Canadian cultural businesses, such as Club illico and ICI Tou.tv. That would level the playing field with foreign digital platforms, such as Netflix, Crave or Disney+.
Historically, every substantive reform of the Broadcasting Act has brought clear definitions for new technologies and how they compare to conventional players. In 1929, it was radio; in 1968, cable television; and in 1986, satellite television and pay TV. Then, there was a review in 1991. Now, almost 30 years later, there has been an unprecedented number of major technological breakthroughs, all occurring in a very short period of time. However, the bill introduced by the Liberal government does not explain how or on what terms the digital platforms and conventional players will compete with each other in the same market.
Furthermore, the definitions are vague and at times absent. What is the definition of “social media”, as mentioned in the exclusions list under the “carrying on broadcasting undertaking” category? Subclause 1(3) of the bill amends the Broadcasting Act by adding the following after subsection (2):
(2.1) A person who uses a social media service to upload programs for transmission over the Internet and reception by other users of the service — and who is not the provider of the service or the provider’s affiliate, or the agent or mandatary of either of them — does not, by the fact of that use, carry on a broadcasting undertaking for the purposes of this Act.
Does this include Facebook or YouTube? Does this include YouTube's pay channels, which have 2.5 billion views?
Another point that absolutely needs to be addressed is the fact that Bill C-10 will give the CRTC broad discretionary powers to define what is an online undertaking and to require such undertakings to spend money on producing and distributing Canadian content. Furthermore, the requirement for undertakings to contribute up to 5% of their gross revenues to the Canada Media Fund, which subsidizes Canadian productions, is not explicitly stated in the bill, nor is the calculation used to estimate the $830 million in contributions that the minister referred to. It could also be $1 billion, because the minister sometimes gives that figure as well.
Broadcaster contributions to the Canada Media Fund for 2019-20 totalled $193 million. The minister says that Bill C-10 will increase that to $1 billion. I would like to know what math he used to come up with that estimate.
The government chose, in the end, to hand over its responsibility to the CRTC rather than stick its neck out. First, we know the CRTC's position on this issue. In a 2018 interview with La Presse, CRTC chairman Ian Scott explained that there was no need to impose conditions on Netflix or other undertakings regarding French-language content. I quote:
It works very well because the objectives of the Broadcasting Act are being met: there is a healthy industry that is successful in both official languages. We see that the system is not broken, even though it is under severe pressure.
This is the CRTC chairman saying that.
Second, there are decisions such as the exemption order for digital media, which is continually renewed. We know that the CRTC is going to take at least nine months to make a decision. With Bill C-10, the Liberal government is rolling out a broad delegation of powers to the CRTC, without including clear guidelines on the percentage of Canadian content, contribution fees and expenses, French content requirements, and so on.
In fact, the bill even chooses to limit the oversight powers of parliamentary committees with respect to CRTC directives and regulations and the ability of a broadcaster to appeal a CRTC decision.
The message that the government is sending to the CRTC, ultimately, is that we need to just trust them and that we will see later. It will therefore wait several months for the CRTC to act, and Parliament will have a very limited oversight powers.
Not everyone shares the minister's optimistic opinion about the benefits of Bill C-10 for Canadian production. Here is what Michael Geist, a professor of law at the University of Ottawa and the Canada research chair in Internet and e-commerce law, had to say.
In the short term, this bill creates considerable uncertainty that could lead to reduced investment in Canadian film and television production and less consumer choice as potential new streaming entrants avoid the Canadian market until there is greater clarity on the cost of doing business. Canada is set to become a highly regulated market for Internet streaming services and the uncertainty regarding those costs are sure to have an impact. The regulatory process will take years to unfold with a call for public comment, a lengthy hearing, the initial decision, applications to review and vary the decision, judicial reviews, and potential judicial appeals. If any of the appeals are successful, the CRTC would be required to re-examine its decision and the process starts anew.
It is someone who studies laws and everything that is happening in the area of commerce and digital distribution who said that. I want to once again quote the Minister of Canadian Heritage. He said:
We will also go a step further and will instruct the CRTC on how to use these new tools. This will happen once the bill receives royal assent, as the bill makes amendments that allow for this essential policy directive.
What does “once the bill receives royal assent” mean? What will these instructions be? Why did the minister not include the instructions for the CRTC in a schedule to the bill? What is there in those instructions that the minister does not want Canadians to see? Are the instructions in question a way of saying that the government did not do the work, that it promised to do something but was not sure how to go about it and that it certainly does not want to be seen as the bad guy who hurt the social networks? Are they a way of saying that the government is going to make the CRTC do the dirty work and give it the responsibility for making all the decisions?
That is the problem with Bill C-10 and the Liberals. They are all about appearances instead of action.
In short, the bill is vague, and fails to address a number of important aspects. It does not guarantee that Internet giants such as Google and Facebook will have to compete with other companies and play by the same rules as Canadian companies. It does not explain how digital platforms and the traditional media will compete under similar conditions. It does not address the issue of exclusive content shared on digital platforms. It does not set out guidelines for the production of Canadian content and contributions to the Canada Media Fund.
We will propose amendments in committee. It is time to reform the Broadcasting Act. It has allowed too many local radio stations across the country to go under. It is allowing newspapers and traditional media to disappear, and is doing nothing to halt the propagation of hate speech.
The minister is asking that we help improve his bill. We will work with him, but we must agree that the current version is far from acceptable. We will need content, clarity and clarifications. The ball is in the minister's court. We will see whether the minister is prepared to listen to the opposition parties' recommendations and proposals.
