Canadian Heritage Committee on Dec. 4th, 2018

[Pablo Rodriguez]

One of the elements of your question that I agree with is that the media are in crisis. That's indeed the case. Too many media companies have had to shut down: dailies, weeklies and others. That's probably the case in your region.

We feel too many regions no longer have local news. As a result, they don't know what's happening at city hall or what their elected representatives are doing in Ottawa or elsewhere. In response, we're offering them funding to establish rules and procedures to assist a pillar of our democracy that's in trouble.

As you know, Mr. Blaney, a bankrupt press is not a free or an independent press. A bankrupt press is simply a press that no longer exists. We believe it must continue to exist so it can ask us the tough questions.

[Steven Blaney]

We too believe the media should continue to exist. However, you've refused to answer my question: why, in an election year, have you come up with this gift at taxpayers' expense?

Minister, I'm sure the Citadel in Quebec City is important to you. A report by the Auditor General states that Fisheries and Oceans Canada and the Department of National Defence haven't taken adequate measures to preserve the heritage value of federal properties.

Why do you allow inferior materials, that is to say, an American stone inconsistent with the original material, to be installed at the Citadel, whereas the Standards and Guidelines for the Conservation of Historic Places in Canada require, on page 213, that original stone must be used where it's still available? In the case of the Citadel in Quebec City, the original stone is still available. Why don't you intervene with National Defence and order it to repair the Citadel using the appropriate stone, the original stone, green sandstone from Sillery, rather than install non-compliant American stone? It's a matter of complying with federal standards, and you're the guardian of our heritage, Minister.

[The Chair, Liberal, Julie Dabrusin]

Mr. Blaney, can you at least side-swipe the supplementals on that for me?

[Pablo Rodriguez]

Mr. Blaney, I get the impression you're straying somewhat from the subject. That matter is the responsibility of National Defence. If you want to invite that minister to appear, I'm sure he'll be pleased to come.

[Steven Blaney]

Minister, the Federal Heritage Buildings Review Office is mentioned here.

[Pablo Rodriguez]

The Citadel, Mr. Blaney...

[Steven Blaney]

You're responsible for meeting the federal government's heritage standards. We're talking about a jewel here. I'm sure you want the Citadel in Quebec City to be preserved as a jewel of Canada's heritage as much as I do. Why then do you let National Defence trash it by installing non-compliant stone?

[Pablo Rodriguez]

The Citadel is an invaluable heritage property; you'll agree with...

[The Chair, Liberal, Julie Dabrusin]

I was just asking you to side-swipe the supplementals for me on this one. If you can find it, go ahead.

[Steven Blaney]

Madam Chair, it's because large amounts of money are currently being invested. It's taxpayers' money that's being spent unwisely because that stone, which is susceptible to frost and non-compliant, will eventually have to be replaced.

We have the Minister of Canadian Heritage before us. He's the guardian of our heritage.

[Gary Anandasangaree, Liberal, Scarborough—Rouge Park, ON]

I have a point of order, Madam Chair—

[Steven Blaney]

We have a report by the Auditor General telling us the federal government should take better care of its buildings because, when it maintains them, it does it all wrong.

I'm calling on Minister Rodriguez to protect our heritage, Madam Chair.

I'm sure that, deep down, the minister agrees we must preserve the Citadel in Quebec City, and I'm sure he'll speak to the Minister of National Defence and tell him to stop using inferior stone and to use the right stone instead.

[The Chair, Liberal, Julie Dabrusin]

Indeed.

Now we'll continue with Mr. Nantel for seven minutes.

[Pierre Nantel, NDP, Longueuil—Saint-Hubert, QC]

Thank you, Madam Chair.

Minister, thank you for being here today.

Since we're trying to determine the responsibility of one department or another, I'd like to talk about the $595 million in assistance previously referred to that's being granted to the print media. Does that assistance come from the budgets of Canadian Heritage or the Canada Revenue Agency?

[Pablo Rodriguez]

It's an additional amount that's allocated by the Department of Finance specially for that purpose.

[Pierre Nantel, NDP, Longueuil—Saint-Hubert, QC]

If it's allocated by the Department of Finance, that's good news welcomed by everyone in the sector. With the exception of certain individuals who may have been less pleased, everyone was happy to see that assistance.

Everyone also acknowledges that the precarious situation in which our media now find themselves is related, in part, to undue benefits that major Internet players enjoy with regard to the sale of advertising. I'm talking about section 19 of the Income Tax Act, to which my colleague referred in connection with the admissibility of media advertising expenses. So I'm pleased to hear that.

Do you think any changes will be made soon, at least to the GST, about which I often have questions for you and your parliamentary secretary? The cultural sector is inclined to say that the first test is to avoid granting foreign players benefits in respect of the usual buyers of their cultural productions. I imagine you follow me.

Are you putting pressure on the Department of Finance or the Canada Revenue Agency to cancel the GST exemption granted to foreign suppliers? I'm obviously talking about Netflix. I'm not talking about Facebook, which says it will soon add GST to its advertising transactions. Google, however, remains GST-free.

Are you exercising any pressure on that subject? As you know, the sector is sensitive on this issue.

[Pablo Rodriguez]

Yes, I'm very much aware, Mr. Nantel. We obviously meet with the same people.

I also approve of your analysis that an enormous number of advertising purchases in the conventional media are being transferred to digital media, hence the problem we're currently experiencing. We're aware of it.

What we're doing is reviewing the system. It's a much more thorough review. The review we can conduct will determine our future for the next 20 or 30 years.

[Pierre Nantel, NDP, Longueuil—Saint-Hubert, QC]

You're right.

[Pablo Rodriguez]

We won't be targeting anything in particular in the current circumstances. Instead we'll conduct a full review. As I've previously mentioned, it's structural changes that will alter the ground rules. The ground rules have changed. This will be a response to changes in the ground rules, one that will include clear principles. As I've previously mentioned, those who contribute to the system will have to take part in the system.

[Pierre Nantel, NDP, Longueuil—Saint-Hubert, QC]

Thank you. That's precisely the phrase you and your parliamentary secretary often use. On that particular point, when I said earlier that you were right, that was because a very broad reform of the system is obviously necessary. However, some obvious things can be done quickly; that's what the sector is asking. Closing the loophole in section 19 on the admissibility of advertising expenses in an American or international web-based medium is something that can be done immediately. Ensuring the GST is finally collected: that can be done immediately too.

I agree with Minister Morneau that the corporate tax should be subject to international coordination. We could be leaders, but, failing that, we can wait for an international consensus. What's especially sad is to see that nothing is being done, even though the sector agrees. And you have an expert panel that has a firm grasp of the facts.

Could any interim measures be taken right away to fill the obvious gaps?

[Pablo Rodriguez]

You're right that there must be international discussions. That's part of the solution. Mr. Morneau has the solutions.

Since there are no borders in some cases, we have to choose global solutions. As for more specific solutions, nothing is included or excluded. We're thinking, meeting people and proposing ideas.

[Pierre Nantel, NDP, Longueuil—Saint-Hubert, QC]

Yes, but are there actually any emergency measures?

[Pablo Rodriguez]

We want to let the expert panel complete its work. I'm sure you personally know several members of that group. We're going to wait and see the work the panel has done, and we're going to wait until we've completed our own work. Then we can make structural, comprehensive and inclusive decisions, not piecemeal ones.

[Pierre Nantel, NDP, Longueuil—Saint-Hubert, QC]

In other words, we're limited by a deadline. If you're telling me we can't take intermediate measures in the meantime, we'll have to wait for the 2020 deadline

I remember the words of Douglas Barrett, who was chair of the former version of the Canada media fund. He told the Globe and Mail, I believe, that this panel would ultimately present recommendations in January 2020.

Everyone here is knocking on doors to get elected. You obviously told people it would happen after you were re-elected, and asked them not to say a word about it or to complain or else the Conservatives would get elected. I consider that cynical. Let's say I'll overlook it. The cultural sector will hope for the best in the next election. Poor you.

So the report will be tabled in January 2020. Messrs. Piché and Francis may work on a bill that we'll see at the end of the session or perhaps even in the fall. By our best calculations, that will take us up to 2022-2023 before any actual changes are made.

As I told you in the House the other day, if it hadn't been for this media assistance, the National Post, Postmedia and the Ottawa Citizen would simply have closed their doors by 2023. You've applied a good band-aid, which is appropriate, and so much the better. However, there'll be nothing else in the meantime. Amazon Prime and Hulu are coming. Netflix continues to enjoy the shabby agreement that was reached.

Is it true that nothing will happen before 2022?

[Pablo Rodriguez]

I'd like to point out that I don't give instructions to members of my team. They are highly qualified and capable of determining on their own what they have to say.

As for the rest, Mr. Nantel, I repeat what I said, that we can walk and chew gum at the same time. In addition, work is being done internally, discussions are being held, and matters are being prepared. We can start thinking about all that before the report's tabled. We're bound by our duties and schedules to meet many people. We're preparing for a bill that will provide structure and propose fundamental changes because that's the solution. This is a much more inclusive and comprehensive approach than applying band-aids here and there. That's the decision we've made.