Bill C-10 (Historical)

An Act to amend the Broadcasting Act and to make related and consequential amendments to other Acts

This enactment amends the Broadcasting Act to, among other things,
(a) add online undertakings — undertakings for the transmission or retransmission of programs over the Internet — as a distinct class of broadcasting undertakings;
(b) update the broadcasting policy for Canada set out in section 3 of that Act by, among other things, providing that the Canadian broadcasting system should serve the needs and interests of all Canadians — including Canadians from racialized communities and Canadians of diverse ethnocultural backgrounds — and should provide opportunities for Indigenous persons, programming that reflects Indigenous cultures and that is in Indigenous languages, and programming that is accessible without barriers to persons with disabilities;
(c) specify that the Canadian Radio-television and Telecommunications Commission (the “Commission”) must regulate and supervise the Canadian broadcasting system in a manner that
(i) takes into account the different characteristics of Indigenous language broadcasting and the different conditions under which broadcasting undertakings that provide Indigenous language programming operate,
(ii) is fair and equitable as between broadcasting undertakings providing similar services,
(iii) facilitates the provision of programs that are accessible without barriers to persons with disabilities, and
(iv) takes into account the variety of broadcasting undertakings to which that Act applies and avoids imposing obligations on a class of broadcasting undertakings if doing so will not contribute in a material manner to the implementation of the broadcasting policy;
(d) amend the procedure relating to the issuance by the Governor in Council of policy directions to the Commission;
(e) replace the Commission’s power to impose conditions on a licence with a power to make orders imposing conditions on the carrying on of broadcasting undertakings;
(f) provide the Commission with the power to require that persons carrying on broadcasting undertakings make expenditures to support the Canadian broadcasting system;
(g) authorize the Commission to provide information to the Minister responsible for that Act, the Chief Statistician of Canada and the Commissioner of Competition, and set out in that Act a process by which a person who submits certain types of information to the Commission may designate the information as confidential;
(h) amend the procedure by which the Governor in Council may, under section 28 of that Act, set aside a decision of the Commission to issue, amend or renew a licence or refer such a decision back to the Commission for reconsideration and hearing;
(i) specify that a person shall not carry on a broadcasting undertaking, other than an online undertaking, unless they do so in accordance with a licence or they are exempt from the requirement to hold a licence;
(j) harmonize the punishments for offences under Part II of that Act and clarify that a due diligence defence applies to the existing offences set out in that Act; and
(k) allow for the imposition of administrative monetary penalties for violations of certain provisions of that Act or of the Accessible Canada Act.
The enactment also makes related and consequential amendments to other Acts.

[Julie Dabrusin, Liberal, Toronto—Danforth, ON]

Thank you. I appreciate your breaking it down a little bit more. Given that we will be seeing the draft shortly, it's helpful to understand the process.

The other question I had was about the changes made to increase representation under Bill C-10. Would you be able to help me better understand how this bill would change things to increase diversity, if we're talking specifically about indigenous people, racialized communities and people with disabilities?

[Thomas Owen Ripley]

For policy direction to be issued to the CRTC, it takes a decision by the Governor in Council on an order in council. That's the actual mechanism by which it comes to be, which means that the minister will have to take forward a proposal to his cabinet colleagues to be endorsed for that OIC to be issued.

If Bill C-10 is passed, as I alluded to in my previous response, we do foresee instituting a gazetting process, whereby there will be an opportunity for comments. We see it playing out as follows. Once Bill C-10 gets royal assent, I think the minister's intention is to issue that policy direction as quickly as possible. There will be a Canada gazetting process that he has to follow before that comes to be, again providing an opportunity for everybody to provide input if they so wish. The minister then will have to take forward that order in council package to cabinet to be endorsed, and then the order in council is ultimately issued, which then binds the CRTC moving forward.

[Thomas Owen Ripley]

As we know, the committee has requested a draft of the policy direction, which will give you a sense of how the minister intends to propose to the Governor in Council to communicate those objectives to the CRTC. That is the first thing. That will give you a line of sight into it.

We are proposing a more modern regulatory framework to guide the issuance of policy directions moving forward. If you look at Bill C-10, you can see that one of the changes we're proposing to make is actually that the issuance of a policy direction would be subject to a normal Canada Gazette gazetting process, whereby everybody will have an opportunity to make representations to government, for example, before that policy direction is issued. We see, moving forward, that we should actually institute a more modern regulatory approach to this that is transparent in terms of the government saying “our intention is to issue this kind of direction and we'd like reaction and stakeholder feedback”.

Once that direction is issued, it's indeed up to the CRTC to go through its normal regulatory processes, all of which provide opportunities for stakeholders to participate and make representation. That doesn't happen behind closed doors. That is an extension of the way the CRTC has operated for the last few decades in terms of stakeholders being able to go and make their case.

As we know, notwithstanding that we think that independence is important, there continues to be that ability for the government, if it feels that the CRTC is going in a direction that is not consistent with public policy objectives, to issue that policy direction that must be of general application. That's really important, because that stops this government from intervening, say, and targeting a specific media company or specific licensing decision or something like that. The government's role in this instance is to articulate broad policy objectives of general application.

[Scott Aitchison, Conservative, Parry Sound—Muskoka, ON]

With regard to the issues that still need to be decided and determined based on regulation, why is it not important for parliamentary oversight, and a discussion, at least, at this committee, about those issues—those issues that aren't covered in C-10 but will be covered by regulation?

Why wouldn't we discuss that here as parliamentarians, as representatives of the people?

[Scott Aitchison, Conservative, Parry Sound—Muskoka, ON]

Thank you, Mr. Chair.

My first question will be for Mr. Piché.

I feel like I'm hearing—and I'm wondering if you can clarify for me—that Bill C-10 doesn't completely encapsulate all the changes that need to be made to make the playing field in this new media landscape fair.

Is that a fair statement of where we're at?

[Heather McPherson, NDP, Edmonton Strathcona, AB]

That would be wonderful.

Mr. Ripley, I have another question for you, if I may.

Bill C-10 explicitly and completely exempts Facebook, YouTube, Pornhub and other services dealing in user-generated content from the Broadcasting Act. Were you instructed by Minister Guilbeault or his staff to do this, or how did that come to happen? How was it that Facebook and YouTube were excluded from Bill C-10?

[Thomas Owen Ripley]

The challenge we face with the current wording is that it says the system shall be owned and controlled by Canadians. The tension, obviously, comes from the fact that that is just not true anymore. The whole impetus for Bill C-10 was to bring streaming services—Netflix, Crave and Spotify —into and include them in the broadcasting system. The reality is that many of those services are not Canadian owned and controlled. That is why we reformulated that policy objective to talk about having all of them make an appropriate contribution as the foundation of the system moving forward.

In terms of your question as to whether that means that Canadian broadcasters could be sold off, the answer is no. Right now there is a directive to the CRTC that provides restrictions on foreign ownership with respect to licensed entities. The reality is that our over-the-air broadcasters and our cable and satellite companies cannot be put under foreign ownership and control as long as that direction remains in place.

[Martin Champoux, Bloc, Drummond, QC]

The current Bill C-10 removes the option of going to the Governor in Council.

Given the discussion we are having at the moment, do you not feel that we would be justified in putting that option back?

[Thomas Owen Ripley]

As you may know, community broadcasting is already recognized as one of the pillars of the broadcasting system. You have public broadcasting, private broadcasting and community broadcasting, so it's a very important element of the system and one that the government certainly recognizes.

I highlight, for example, that we are working with community broadcasters, in the context of the local journalism initiative, to provide support for journalists working in underserved and remote areas.

We have certainly heard from community broadcasters that they feel Bill C-10 should go further in the sense of recognizing the contributions that they make to the system.

It's a complex question, partly because the support for community broadcasters is also tied up in terms of how cable and satellite companies support the system. Cable and satellite companies—cable in particular—often work very closely with community broadcasters to provide service to their communities.

It is certainly a question that is on our radar and one that we're looking at. We certainly recognize the important contributions that Canadian broadcasters make.

[Thomas Owen Ripley, Director General, Broadcasting, Copyright and Creative Marketplace, Department of Canadian Heritage]

Thank you, Mr. Piché.

Thank you for the opportunity today to address the committee and discuss Bill C-10 and how it modernizes the Broadcasting Act.

Before diving into the details of the proposed legislation, I would like to briefly tell you about the Broadcasting Act and the current regulatory framework. It is important to understand the current system, because it is the foundation on which Bill C-10 is built.

The bill aims to modernize our legislation for the digital age; but it also aims to preserve and strengthen key elements of our system that have served us well for many decades. These include our independent communications regulator, our Canadian broadcasters, support for Canadian music and storytelling, and the objective of ensuring that diverse voices, including those of Indigenous peoples, are heard across Canada.

The Broadcasting Act is a key piece of legislation for the sector. It defines broadcasting, outlines policy objectives that serve as guiding principles for developing specific regulations, and sets out the mandate and powers of the Canadian Radio-television and Telecommunications Commission, the CRTC. The CRTC’s independence from government is important.

The CRTC makes rules and regulations that govern the media sector. The sector is obviously central in supporting freedom of expression and fostering cultural expression. In a democracy like Canada, it’s important that there be a healthy distance between the government of the day and the media sector. Countries such as Australia, the United Kingdom and France all rely on an independent regulator to oversee the media sector.

The CRTC also has the expertise and experience to make technical regulatory decisions, while balancing many policy considerations. This independence and expertise have served Canadians well.

Ultimately, Bill C-10 preserves an oversight role for the CRTC and for the government. The CRTC has the mandate to oversee the system on a day-to-day basis, while the government's mandate is to ensure that the CRTC operates as it should.

One way that the CRTC has supported Canadian culture is by ensuring that broadcasters support the creation and presentation of Canadian content. Currently, as a condition of licence, TV programming services are required to spend a percentage of their revenues on Canadian content each year. Cable and satellite companies are required to contribute a percentage of their revenues to production funds and local programming to support the development and production of Canadian content. Commercial radio broadcasters and satellite radio carriers contribute a portion of their annual revenues to support Canadian content development initiatives. These contributions totalled $3.34 billion in 2019.

However, digital disruption and competition from online broadcasters threatens this support. Increasing competition is leading to diminishing revenues, with traditional broadcasting revenues declining by 1.4% from 2018 to 2019. Ultimately, this will lead to less funding for Canadian music and programming.

Compared to 2019, recently released aggregate returns data from the CRTC show a 7% decline in broadcasting revenues for large ownership groups in 2020. Aggregate returns include the largest broadcasters and vertically integrated companies but exclude the smaller companies, and as they represent the majority of industry revenues, they are expected to reflect overall industry trends for 2020.

Streaming services obviously aren't new to Canada and have operated in parallel to the traditional broadcasting system for many years now. Their operation in Canada has been facilitated by a regulatory instrument, the digital media exemption order, which exempts online broadcasters from having to seek a licence to operate in Canada, as well as the obligations placed on traditional broadcasters, such as supporting Canadian content.

The DMEO has essentially allowed foreign online broadcasters to operate in Canada outside of the traditional closed system. The DMEO was originally issued in 1999 to promote the growth of the nascent online broadcasting sector. Since then, the sector has greatly increased in size and commercial viability.

For example, in 2011, only 10% of Canadians subscribed to Netflix. By 2020, this had increased to 67% of Canadians. Online broadcasters are now thriving and no longer need to be shielded from regulation. They are well positioned to make an important and meaningful contribution to supporting Canadian music and storytelling. Bill C-10 aims to bring them into the regulatory framework, so that all broadcasters operate on a level playing field.

There's no denying that the digital age has brought many benefits. More services provide more choice for Canadians and more opportunities for creators and producers. Bill C-10 isn't about denying these benefits, but rather about carving out a space for Canadian voices.

To facilitate the inclusion of online broadcasting in the regulatory framework, Bill C-10 adds a new category of broadcasting undertaking to the Act: online broadcasters. This change will ensure that the CRTC can require services such as Crave, Netflix, Amazon Prime, QUB Musique and Spotify to contribute to Canadian stories and music.

Canadian Heritage estimates that, by 2023, the inclusion of online broadcasters could lead to contributions of $830 million annually to Canadian content. This is not a target, and ultimately the final figure will depend on how the CRTC decides to implement the new regulatory framework. Nevertheless, this estimate illustrates the significant and tangible results that Bill C-10 seeks to achieve for Canadian creators.

Some of the discussion regarding Bill C-10 has focused on the Bill’s treatment of social media platforms. These platforms will be subject to regulation, but only in so far as they display content commissioned by the platform itself, or its affiliates.

However, the users of social media platforms and content posted by these users will not be regulated. Social media is an important form of expression for many Canadians, and, as Mr. Piché noted, a separate proposal is being developed to address the impacts of harmful content posted to social media.

To account for the inclusion of online broadcasters, we need a renewed approach to regulation. Bill C-10 shifts away from relying on the rigid system of licensing to a more flexible conditions of service model. This model will allow the CRTC to seek financial contributions from all players and to impose other conditions, such as discoverability requirements, programming standards and information reporting requirements.

The CRTC will hold public processes seeking input from stakeholders and Canadians in order to inform its regulatory choices. Once it has gathered this information, the CRTC will be able to tailor conditions of service to specific broadcasters. We want to avoid an overly rigid approach that results in an undue regulatory burden on broadcasting services and increased costs for Canadians.

Lastly, the broadcasting policy objectives are being updated to ensure that the broadcasting system serves the needs and interests of all Canadians in their diversity. This means ensuring that Canadian voices, including indigenous creators, official language minority communities, racialized and ethnocultural communities, LGBTQ2+ communities and persons with disabilities, are present in the media we consume. That's why Bill C-10 includes stronger support for diverse Canadian content and its creators.

However, Bill C-10 does not include quotas or targets for supporting certain varieties of content such as French-language content. Quotas and targets risk becoming de facto maximums. The CRTC is better placed as the independent and expert regulator to make decisions on how to best support all types of content and to have it evolve over time.

After Bill C-10 receives royal assent, the minister intends to propose to the Governor in Council to issue a policy direction to the CRTC on how the new regulatory tools granted in the bill should be used. Seven priorities are sketched out in the technical briefing presentation.

We know that the committee has requested a draft copy of the policy direction to better understand concretely how these priorities would be communicated to the CRTC and we are working to fulfill this request.

While an important step, we know that Bill C-10 doesn't address all of the issues in the broadcasting sector, such as the future role of CBC/Radio-Canada and the governance structure of the CRTC.

Bill C-10 is intended as a first step on the most pressing policy issues. It makes critical changes that will ensure that Canada's broadcasting system is fair and that it will sustain Canadian music and storytelling into the future. We also have an opportunity to make the system more accessible as well as more inclusive by supporting creators and producers who historically have been marginalized. This bill provides a much-needed update to Canada's Broadcasting Act.

We would now welcome your questions on the bill.

[Jean-Stéphen Piché, Senior Assistant Deputy Minister, Cultural Affairs, Department of Canadian Heritage]

Thank you, Mr. Chair and committee members. It's a pleasure to be in committee once again.

I want to take this opportunity to wish you all a happy International Women's Day.

We're talking to you from the national capital region's ancestral territory of the Algonquin Anishinabe peoples.

As you said, Mr. Chair, I am accompanied by Thomas Owen Ripley and Kathy Tsui. They are both experts in the area of broadcasting and have made major contributions to the development of bills and digital projects.

Mr. Chair and members of the Committee, thank you for inviting us here today to help you with your study of Bill C-10. I would like to take this opportunity to thank the committee for the work it has been doing on the bill and for having undertaken to commence its work so expeditiously.

Bill C-10 makes important amendments to the Broadcasting Act that will benefit artists, broadcasters, and Canadians.

It is expected to result in more opportunities for Canadian producers, directors, writers, actors, and musicians to create high quality music and audiovisual content and to reach Canadian audiences.

It will establish a fair and flexible regulatory framework where comparable broadcasting services are subject to similar regulatory requirements.

It will make Canadian music and stories more available through a variety of services, and it will create a more diverse and inclusive broadcasting system that is reflective of Canadian society.

This bill renews the Broadcasting Act for the digital age. The changes that it makes are well overdue. It is one of four initiatives currently under way at Canadian Heritage that will modernize our federal communications legislative framework for the online world.

We're also developing a proposal to address online harms such as hate speech, violent and extremist content, terrorist propaganda, child sexual exploitation and non-consensual distribution of sexually explicit images.

We're working with Innovation, Science and Economic Development Canada to amend the Copyright Act.

Then there is the matter of ensuring that Canadian news services are fairly compensated for the use of their material by online services. This work, too, is currently ongoing at Canadian Heritage.

Together, these initiatives will establish rules that will make the online world a more equitable, inclusive and safe place while also ensuring that it remains a fertile ground for innovation and freedom of expression.

Bill C-10, which is focused on broadcasting, is the first piece of this puzzle.

I will now turn things over to Owen Ripley, who will outline the need for Bill C-10 and its primary objectives.

Owen.

[The Chair, Liberal, Scott Simms]

I call this meeting to order. This is meeting number 18 of the House of Commons Standing Committee on Canadian Heritage.

Pursuant to the order of reference of Tuesday, February 16, 2021, the committee will commence consideration of Bill C-10, an act to amend the Broadcasting Act and to make related and consequential amendments to other acts.

As a reminder, today's meeting is in a hybrid format—virtual and in person—pursuant to the order of January 25, 2021, from the House. The webcast will always show the person speaking rather than the entirety of the committee and will be available on the House of Commons website.

As a final note, screenshots or taking photos of your screen are not permitted. Since we are dealing exclusively with the department today, I don't suppose we'll have that problem. They probably know the rules better than we do.

We have, in our first hour, officials from the Department of Canadian Heritage.

We're going to be taking a brief intermission, for technical reasons, to hook up with Minister Guilbeault, who will join us in the second hour.

Right now, we have Jean-Stéphen Piché, senior assistant deputy minister of cultural affairs. We have Thomas Owen Ripley, director general of broadcasting, copyright and creative marketplace branch. We have Kathy Tsui, manager of industrial and social policy, in the broadcasting, copyright and creative marketplace branch.

We're starting out with a 15-minute statement.

Mr. Piché, you have the floor for 15 minutes.

I'll let you decide if you want to hand it to someone else.

Monsieur Piché, the floor is yours.

[Alain Rayes, Conservative, Richmond—Arthabaska, QC]

I would like to continue because it is important for the decision that we will have to make.

I hear very clearly what Ms. McPherson is saying with regard to what is happening in Australia and I think that we all share that concern. However, this request is in connection with Bill C-10. But, as we all know, the Minister of Canadian Heritage unfortunately did not see fit to include social media and how to share and distribute the revenue, preferring to do so in a future bill

Given the number of meetings we have, we are feeling a lot of pressure to move quickly with this bill. We want to hear from a number of witnesses and our schedules are full. I think it is good to hear from the Facebook officials. However, I am wondering whether it would be more appropriate to do so when we are debating social media, once the minister has introduced a bill that deals with them. I doubt whether he will do that in the short term, but we hope he will because it is a major issue.

[The Chair, Liberal, Scott Simms]

The motion put forward by you and Mr. Housefather.... I've seen some of the wording that has been proposed. Because this is not germane to Bill C-10, you need a 48-hour requirement to do that particular motion. It is not committee business, and it has to be germane to Bill C-10 to do that.

However, your first motion dealing with Facebook, which was submitted some time ago, on February 19, that one we can debate.

What I propose is this. If you wish to put forward the new motion that you and Mr. Housefather worked on, I would need unanimous consent to proceed.

Which avenue do you wish to choose?

[Stéphane Cardin]

Along with the other members of the Motion Picture Association–Canada, we've proposed amendments to subsection 5(2), in Bill C-10, essentially to ensure that the CRTC considers competition, innovation and affordability in its broadcasting decisions, and that regulation should be efficient and proportionate to its purpose.