Canadian Heritage Committee on Nov. 23rd, 2010

[Norm Bolen]

I would jump in on that, if you would be prepared to hear my answer.

[Bryon Wilfert, Liberal, Richmond Hill, ON]

Absolutely.

[Valerie Creighton]

It's safer for us to let them do it.

[Norm Bolen]

Amen. It's hard for them to make policy suggestions.

[Bryon Wilfert, Liberal, Richmond Hill, ON]

I'm just filling in.

[Norm Bolen]

I think that in the independent production sector and in a large part of the creative community, there's a strong belief that the Internet service providers should be paying a levy that would go into production funds. You need to put money into the content and finance the content. The Internet service providers are becoming the BDUs, the broadcasters, of the future.

Now, the commission referenced that to the Federal Court, and the Federal Court said no, the ISPs are not broadcasters, so the commission doesn't have jurisdiction. We are supporting a challenge of that at the Supreme Court. We'll see what happens. If our initiative fails at the Supreme Court, then it requires legislation. There's no reason whatsoever that the Canadian government could not put legislation in place that would force ISPs to make a modest contribution, from their significant revenue stream, to support Canadian content. That is the answer.

[Bryon Wilfert, Liberal, Richmond Hill, ON]

That seems like a very logical one.

[Valerie Creighton]

We, in turn, will allow them to build an envelope to participate, the same as the broadcast system.

[Bryon Wilfert, Liberal, Richmond Hill, ON]

Thank you for that.

[The Chair, Conservative, Michael Chong]

Thank you.

Monsieur Pomerleau.

[Roger Pomerleau, Bloc, Drummond, QC]

Thank you, Mr. Chair.

Thank you to the witnesses for being here today.

Mr. Bolen, I'm quite please that you use the UK as an example. As far as I am concerned, we refer to much to US examples but their system is so different from ours that it does not lend itself to interesting conclusions for us. You said that in the UK, the equivalent of the CRTC has managed to regulate, to legislate and to ensure that all those people contribute to solving the problem. What prevents our CRTC from doing the same thing, do you think?

[Norm Bolen]

The CRTC has taken the view that they want to see an agreement on terms of trade, and they're encouraging the parties to come to the table. They're requiring the broadcasters to have an agreement in place when they come for the group licence hearings in the spring. So that's very positive.

But as you know, the commission and the chair have consistently said they like to interfere as little as possible in market forces and they want to use a light hand. They would prefer to see us come to an agreement and do a deal. They've said that if a deal is not done, they will have to consider what conditions they may impose on the producers and the broadcasters with regard to rights sharing. So there's that threat—maybe that's too strong a word, but there's the potential there. So that's motivation for both parties to try to reach a deal.

Ultimately, if we can't reach a deal, if the broadcasters continue to try to negotiate an arrangement that's not measurable and not enforceable, just a statement of overarching principles—which isn't what we need, we need something concrete—then we'll certainly be arguing to the commission that they need to put something in place that has meaning and can be enforced and regulated.

[Roger Pomerleau, Bloc, Drummond, QC]

You referred to David and Goliath to illustrate your negotiations with the broadcasters. At the end of the day, they are the ones having your market in their hands. How do you think you will be able to get something out of those negotiations?

[Norm Bolen]

The support of the commission for the idea of a deal on terms of trade is significant. We have had great difficulty reaching terms to date. We've been talking about this with broadcasters for many years. We've had analyst discussions. We're going to try it one more time. We've simplified our proposals. We recognize that what broadcasters need, they need. We want them to have what they need, but we want to share in the benefits, and we want to hang on to some of the rights that traditionally have been ours.

We'll see. We're optimistic that we can approach this in good faith and reach an agreement. Do we have a lot of clout? Really, the clout we have lies in how important we are to the system, the passion of our members, their commitment to these ideas, the support of the commission, and the realization by the broadcasters that it's in their own interest to reach an equitable agreement with us, because without us they can't succeed and without them we can't succeed.

Maybe I'm a bit Pollyanna on this, but I believe that we should give it one more try. We'll see if we can do it. If we can't, we'll be calling on the government even more strongly. We've asked the government to use section 7 to strengthen the commission's direction to the broadcasters, and that's where we'll be pushing even harder.

[Roger Pomerleau, Bloc, Drummond, QC]

You are the golden goose.

Could you give us a few details about your fourth recommendation relating to obtaining a little bit of money?

[Norm Bolen]

We're speaking about the ISPs being taxed. Reynolds has been involved in our court case and with the other partners in our appeal to the Supreme Court. Perhaps he could give you a little more detail.

[Roger Pomerleau, Bloc, Drummond, QC]

Thank you.

[Reynolds Mastin]

We've sought leave from the Supreme Court to appeal on the issue of whether or not Internet service providers, when they're providing broadcasting to their customers, are engaging in broadcasting as defined under the Broadcasting Act. If the court finds that this is the case, then that triggers the obligations they have under the Broadcasting Act to make their own contribution to the creation of Canadian content. That's the nut of the legal issue in front of the Supreme Court, if they decide to grant leave.

It would also provide, through the auspices of the Broadcasting Act, the jurisdiction for the commission to make its own determinations at a later date on whether or not some kind of a levy on ISPs would be appropriate to help fund the creation of Canadian content.

[The Chair, Conservative, Michael Chong]

Thank you very much.

[Roger Pomerleau, Bloc, Drummond, QC]

Merci.

[The Chair, Conservative, Michael Chong]

Monsieur Galipeau.

[Royal Galipeau, Conservative, Ottawa—Orléans, ON]

Thank you very much, Mr. Chairman.

Mr. Mastin, earlier you referred to English Canada. What do you mean by that?

[An hon. member]

Oh, no!

[Royal Galipeau, Conservative, Ottawa—Orléans, ON]

You have had your turn. Let me speak, please.

[Reynolds Mastin]

Canadians who consume content in the English language.