The Broadcasting Act clearly needs modernizing. The last time it was dusted off and updated was over 28 years ago. At the time, the Internet did not exist. Social media did not exist. There was no such thing as web giants, and we were not permanently attached to our tablets and constantly using apps. The context has most certainly changed. If there is one thing all members of the House can agree on, it is that urgent action is needed. Implementing these measures is important.
Back in 2015, the government promised it would modernize the act. Expectations were high. The government conducted extensive consultations. It made lots of promises. It envisioned a very good scenario in which everyone would have to pay and contribute. Things were going well in that regard. Now, three ministers and over five years later, a bill has been introduced.
Earlier I heard a member from Quebec use a cheese analogy, saying that the bill reminded her of Swiss cheese, because it has so many holes in it. We are looking for the cheese, but all we see are the holes. This metaphor is also apt because we are talking about cheese and the Liberals have delivered a mouse. This is actually a very serious subject, since we are talking about an incredible industry. It is part of our Canadian identity, which includes language, culture and Canadian content.
Unfortunately, the bill does not really do much. Basically, it off-loads all responsibility onto the CRTC, which ultimately will have to take action. There are many things this bill does not do.
We are told the bill makes changes to ensure that online broadcasting falls within the scope of the act. What does that mean? It means that the legislation governing the CRTC will apply to online broadcasters. We know that. My Liberal colleague mentioned how the CRTC can sometimes be a rather cumbersome administrative straitjacket. Things are not easy for our traditional media in Canada.
The minister is telling us that he is going to off-load the responsibility to the CRTC and that a year from now, as another colleague mentioned, slightly stricter rules will be applied to online broadcasting. That is not what the Yale report called for, and it is certainly a far cry from what the industry is asking for.
Web giants like Google and Facebook are not affected by this bill, and yet we know that they are generating major revenues from our society and competing with our Canadian companies.
Bill C-10 also fails to explain how digital platforms and conventional players can compete under these conditions. In a way, the playing field is not level for everyone. The bill also fails to say how exclusive content will be shared on digital platforms. There are no details about guidelines for the production of Canadian content and the famous contribution to the Canada Media Fund. Some companies, therefore, have to make a contribution based on established parameters. Finally, we can see that the parameters here are very flexible. There does not seem to be any apparent fairness in the bill.
As we have seen this week, culture is also a factor. Canadian culture comprises the English language, the French language and Quebec culture. This bill seems to ignore that reality, and as some of my colleagues in the Bloc have pointed out, what's in it for Quebec culture? That is not clear at all.
With respect to copyright, Quebec artists have complained about seeing their works circulated on digital platforms without fair compensation for their own investment. This bill does nothing to address that issue, however.
Ultimately, the bill would essentially subject online broadcasters to the CRTC. The government is off-loading this issue onto the CRTC and waiting to see what happens.
I do appreciate that the bill mentions indigenous culture, persons with disabilities and Canadian diversity. However, it would also be important to mention Quebec and French-Canadian culture, as well as the concept of our country's linguistic and cultural duality.
We need a level playing field here, and we think that policies should account for changing markets. All this bill does, however, is put off to tomorrow what should have been done a long time ago. We would also have liked the minister to find a way to reinject tens of millions of dollars, or even hundreds of millions of dollars, in our system.
For those who are watching at home, section 19 of the Income Tax Act applies to the Canada Revenue Agency and would allow for the full deduction of any money spent on advertising with foreign digital media distributors. That means that, in its attempts to restore balance, the Canadian government is contributing to the imbalance.
The agency has not changed its interpretation of the act since 1996, an interpretation that is based on jurisdictions established prior to that time and that date back even as far as 1935. There was a small loophole, because computers did not exist at that time. The definitions of newspaper and broadcasting do not reflect what is known as the technological neutrality of the Broadcasting Act, which was modernized in 1991, nor do they reflect the tremendous revolution that has occurred since 1996. This small loophole has become a giant vortex.
As a result, foreign companies like Facebook and Google, which represent up to 80% of Canada's online advertising revenues, are competing with our advertisers and our traditional broadcasting and print media while receiving a bit of a leg-up from the government. This situation has been criticized. We cannot encourage foreign companies to compete with our Canadian companies, but the government is complicit in that.
My colleague from Mégantic—L'Érable said that the government's problem is that it is always looking for superficial solutions instead of trying to fix systemic problems. The government needs to fix this problem with Canada's tax system and create a level playing field for Canadian and foreign players by restoring market conditions that do not give web giants an edge.
The Standing Senate Committee on Transport and Communications urged the government to take a close look at the loophole in section 19 of the Income Tax Act, which is contributing to the media's decline. The committee also asked the government to look at ways to make things better for all Canadian companies. The committee's report was tabled a year and a half ago and has just been gathering dust since then.
We heard that message over and over from witnesses representing various segments of Canada's media industry. They told the committee that eliminating the tax deduction for ads on foreign websites could give Canada's industry a much-needed boost.
Friends of Canadian Broadcasting is also strongly advocating for the elimination of this tax deduction. This organization produced a very detailed document on the situation. It argues that closing the loophole would enable the Canadian government to collect more taxes, because companies would not stop advertising in foreign media, but they would have an incentive to choose Canadian media. Companies would not be encouraged to do business with foreign companies. Instead, there would be neutral conditions that would allow them to choose.
The Public Policy Forum shares this view. It says that simply fixing section 19 could produce a revenue stream of $300 million to $400 million a year for the media industry.
The government has presented band-aid solutions even though real solutions do exist. They do not need to look for them, they simply have to stop subsidizing web giants.
The time has come to conduct an in-depth review of section 19 of the Income Tax Act. That is the responsibility of the Minister of Heritage because it goes to the crux of the matter, namely the money that the cultural sector, in this case the media and print media, is losing to web giants.
Companies like Google and Facebook are free to operate in a business-friendly environment like ours, but they are not contributing anything. In this bill, there is a blatant inequality between traditional media and web giants, which, I will repeat, are not covered. That is one of the bill's flaws.
Another flaw is that the bill does not address the issue of disclosure. The bill refers the matter to the CRTC, but there must be some facility for disclosure. How much revenue do the web giants earn? What is the breakdown of their revenue and expenses? We need to know this so that we can make sure they are treated the same as other Canadian businesses. That is something that is also not in the bill.
One journalist said that the web giants burst out laughing when they saw the minister's bill. The Liberal government introduced a highly anticipated bill the day after the U.S. election. I think all members would agree that that is a good time to introduce a bill under the radar.
The web giants burst out laughing because this bill has some huge flaws, some gaping holes. The idea is good: The government wants to regulate the web giants, which are sucking the life out of our media. In reality, however, the bill gives them free rein. That is a problem because, again, web giants like Google and Facebook are in no way required to pay royalties to news media for the content they share.
People use social media to access information, and this information often comes from Canadian media. When people get it off Facebook, Canadian media outlets come away empty-handed. They do not earn anything. The bill does not address this issue that is very important for our media, especially in a pandemic.
The same goes for taxing ad revenue generated by these platforms in Canada. They do not even collect taxes per se, whereas Canadian businesses do. This too is unfair, yet the bill does not address it. Billions of dollars in revenue are at stake for the government, and Canadian businesses are being unfairly treated.
All in all, I would say that the bill unfortunately misses the mark. The most worrisome aspect is that even as the government introduced the bill, we learned that Facebook was already trying to hire the CRTC officials who draft legislation. I can see why the web giants are taking notice, because 70% to 80% of ad revenue in Canada comes from digital and media platforms.
Why is this cozy relationship between the CRTC and Facebook being permitted, when we know that the CRTC will be responsible for enforcing the act? Is this not like letting the fox into the henhouse? That is what troubles me.
Friends of Canadian Broadcasting and others have criticized this situation. As I mentioned, they pointed out that the Broadcasting Act was modernized in 1991 but that there is still some flexibility. The bill seeks to include digital media in the act, but the CRTC already has the regulatory capacity to do that. All the minister has to do is tell the CRTC to apply the provisions of the 1991 legislation rather than undertaking a process that will take another year.
We know that these web giants are continuing to rake in huge profits with each passing week and month, while our Canadian media are in a very precarious situation. The Conservatives are not the ones saying that. It is the Friends of Canadian Broadcasting that are saying that the bill does not definitively eliminate all of the ambiguity surrounding digital distribution.
Ultimately, the bill does not clarify this important issue, which creates a double standard. As I said earlier, the government is taking an approach that addresses issues in an piecemeal fashion.
As a result, new digital media will benefit from a flexible approach while traditional media will be caught in a regulatory straitjacket. The government is not trying to restore balance by loosening the regulatory straitjacket on traditional media but is instead trying to impose it on new players.
The Yale report makes some interesting points. One thing in the report that we agree with is that there is an urgent need to act. Unfortunately, the government is not taking action. It is off-loading those powers to the CRTC, a year in the future, when it could have been quite possible to exercise those powers through regulatory means.
At the same time, they say that the ecosystem needs to be opened up so that the conventional players have room to breathe and are able to compete with the new ones. In this regard, the minister does not seem to be willing to create this breathing room for our Canadian undertakings, which are being smothered under a straitjacket, while there are no rules for the new players. Now they are saying that they are going to start trying to impose things on them. That said, this only applies to digital broadcasters. I would point out that this does not apply to the web giants. That is a major flaw in this bill.
Our friends at the CBC are critical of the fact that the bill is vague about Canadian content. This is fundamental. We see the web giants investing in the production of Canadian content, but we do not know how to define that. It is not at all clear.
The Yale report mentioned the review of CBC/Radio-Canada’s mandate. That is another major flaw in the bill. The report made recommendations in that regard, but again, there is nothing on that.
That is what we are left with in theory. It is not much.
What is even more troubling, given the last few days and weeks, is the minister looking to have an open media landscape where both Canadian and foreign media would be allowed to freely disseminate information.
This brings us to a statement by the minister, who appeared this week on Radio-Canada. He spoke about freedom of speech, and we found his statement somewhat disturbing and quite surprising. He said that the right to express oneself ends where another’s pain begins.
A Quebec commentator, journalist and intellectual asked whether the minister wanted to make information channels subject to the tyranny of sensitivity. For example, if you do not like someone saying something about a community or a religion, can you say that this person needs to be silenced?
Freedom of expression is a fundamental part of our democracy. It is the reason we can express ourselves. As my colleague from Louis-Saint-Laurent said, freedom of expression does not apply only when we like what we are hearing. There are some things we do not like hearing. That is exactly what freedom of expression is, and we already have laws governing it. Hate speech and statements that incite hatred or violence are not allowed.
If the minister has a hidden agenda, that would be good to know. This is not the first time he has said something fishy. At one point, he wanted to make news media companies get licences, so it is not clear.
In conclusion, this is a major issue for Canada. This week, we saw just how problematic the status of French in Montreal is. Our culture itself is at stake. The question we are asking ourselves is whether there truly is a will to preserve Quebec's cultural ecosystem and recognize it. Just recognizing it would be good, but there is nothing in the bill to suggest that is the case.
Unfortunately, what we saw this week was the president of the Liberal Party saying that legislation to protect the very foundation of Quebec's ecosystem, its language, is oppressive.
Does the government have reservations, some reluctance preventing it from protecting the foundation of Quebec's cultural ecosystem? The bill is silent on that subject.
Other colleagues have stressed this, including our Bloc Québécois colleagues—