Canadian Heritage Committee on May 9th, 2019

[The Chair, Liberal, Julie Dabrusin]

Welcome to meeting 157 of the Standing Committee on Canadian Heritage. Today, we are continuing our study of the online secondary ticket sales market.

The witness we welcome today is Sophie Kiwala, the former MPP for the constituency of Kingston and the Islands.

Can you please begin your presentation? You have up to eight minutes.

[Sophie Kiwala, Former Member of Provincial Parliament for Kingston and the Islands, As an Individual]

Okay, I think I'm short of that, so you'll be relieved to know that.

No doubt you will all have done your homework and read the Hansard when I introduced my private member's bill, Bill 22, the ticket speculation amendment act, on September 27, 2016. In short, I came up with this bill because of the outcry that came to my office as the MPP for Kingston and the Islands when The Tragically Hip fans were shut out of buying tickets for the Hip's last concert.

Complaints came from all across the country, in fact, from outraged fans who had quite simply had enough of being shut out of the ticket buying process as a result of cost and a lack of availability of tickets.

There is no doubt that there was a significant emotional component to their outrage because of the circumstances of Gord Downie's tragic health diagnosis, but based on what I heard, what we were seeing was the culmination of many years of increasing frustration regarding inaccessible events. Parents spoke to me passionately about not being able to afford to buy tickets for their children's favourite bands. Cultural opportunities for many were quite simply out of reach.

I knew that something needed to be done.

There are a number of other jurisdictions that are committed to tackling the unscrupulous practice of massive markups in the secondary ticket selling market, whether it is due to bot technology or more standard secondary ticket selling sites' practices.

ln order to effectively evaluate the legislative framework surrounding ticket sales regulation, it is imperative that this work be considered from a detailed understanding of the market. Scrupulous attention should be paid to the influence of all, especially the big players in this highly lucrative and multi-million-dollar industry. There is no doubt that it is in their interest to blunt the scrutiny of their own activities, limit enforcement and allow the problem to continue on its merry way.

Just because the e-economy is difficult does not mean that we should throw up our hands and surrender to big interests at the expense of artists, athletes and the very fabric of the public's cultural life. That's the goal of those who wish that their practices be kept under the veil of secrecy.

There is clearly a role for the government, and Canada now has an opportunity to act on behalf of all Canadians now and in the future.

Following the tabling of my private member's bill and the subsequent government bill that followed, we did two fan town halls and round tables and an online public survey. The survey went from March 1 to March 17, 2017 and received 34,714 responses with over 22,000 responses coming in the first 24 hours. There were over 5,000 written responses in open text boxes. This was the most popular online survey with the most public interaction in Ontario's history, clearly demonstrating the high degree of interest and public appetite for this bill.

After the round tables and survey were complete, we commissioned a report from Michael Waterson, professor of economics at University of Warwick, who did a report for the U.K. government in May of 2016. Some of the background material that I have added for you at the end of my speech is in reference, and there are notes from his report.

We requested that he describe and analyze the efficacy of ticket sales regulation in a range of jurisdictions outside Ontario, including the U.K., the U.S., Australia, Italy and other European countries.

ln short, Professor Waterson advised that many of the proposed changes by themselves would not constitute an appropriate response. As a package, the proposed model has the potential to render the opaque ticketing market much more transparent to consumers. The most important elements of the proposed model relate to bots and speculative ticketing, which will be appreciated by the public, but will also require enforcement.

Passing legislation will not be enough. Enforcement will also be required. An initial push should be followed by an assessment of suitable cases for prosecution, conviction if warranted, and sentencing as a disincentive to others.

Following that, the government bill had four primary pillars: access, affordability, transparency and enforcement.

Access is making sure that everyone has a fair chance at buying tickets for popular events. Through that, ban the use and sale of ticket bots and the sale or facilitation of the sale of tickets obtained through the use of ticket bots. Ban the sale of speculative tickets. Those are tickets that have no seat, row or section.

Affordability is addressing consumer concerns about resale prices and service charges. Cap the resale price of secondary tickets at no more than 50% above the face value of the primary seller's original price. Cap fees and other service charges.

Transparency is making more information available to consumers when they buy tickets. Impose requirements on primary seller and ticket resale platforms, including the reporting of suspected ticket bot activity, seat location of ticket, face value of ticket, currency, availability of pre-sales, number of tickets available at the general sale and commercial reseller's identity.

Enforcement is making sure that laws are followed. Provide enhanced enforcement mechanisms for government, police, industry and consumers, including a combination of private rights of action for industry and consumers, provincial offences, compliance orders and administrative monetary penalties.

Other considerations are to cap fees and other service charges, limit the percentage of tickets held back from the public, limit the number of tickets offered for resale, and create a provincial registration of ticket sellers and resale platforms.

In conclusion, there is one basic truth that we often fail to understand when we speak of access to cultural opportunities, ticket speculation and ticket bot software—namely, that the consumer who rages against excessive fees also participates in the inaccessible ticket conundrum. If the public were aware, as I'm sure most are, of the exorbitant markups that were clearly demonstrated by tickets printed with the original face value, they may be less inclined to participate in the transaction. They'll certainly be inclined to ask questions of the individual they're buying the ticket from, whether it's online or in person. As government, when we create legislation we are attempting to change behaviour. Legislation that bans or limits markups on tickets has the effect of informing the public, which hopefully will begin to limit the problem. Moral persuasion and aligning with a moral code of ethics may create some change. Knowing that they are being gouged, and by how much, may encourage buyers to beware.

Thank you.

[The Chair, Liberal, Julie Dabrusin]

Thank you very much.

We will now begin our question and answer period. We'll begin with Mr. Boissonnault for seven minutes.

[Randy Boissonnault, Liberal, Edmonton Centre, AB]

Thanks very much, Madam Chair, and thank you very much for joining us here today.

It was a bold move. What were you hoping to achieve by the particular parameters of your bill? Then I'll talk about what we've seen and how it's been gutted since.

[Sophie Kiwala]

Yes, it's very unfortunate.

I was primarily hoping to achieve greater accessibility. I was truly impacted by the number of people getting in touch with my office because of the last concert of The Tragically Hip.

It just became apparent to me that people felt very passionate about cultural opportunities. This was my second private member's bill. I had hoped that my private member's bill to have a national inquiry into missing and murdered indigenous women would have had a lot more interest, but this was off the charts, with over 22,000 interactions in 24 hours. There's a very high palatability among the public to do something about this. Other jurisdictions have made some progress.

[Randy Boissonnault, Liberal, Edmonton Centre, AB]

Have you given any thought to what we might be able to do federally or is this all going to be in the provincial sphere? That's my first question. Second, what has, in your opinion, as the person who put the bill in the legislature in the first place, the Ford government's changing of the terms done? My read is that it has essentially gutted it and made it a toothless piece of legislation, but what's your take?

[Sophie Kiwala]

It's exactly the same. They have certainly gutted it. Ironically, the individual who began to gut it, MPP Todd Smith, spoke in support of my bill when I tabled it and said that he looked forward to supporting it in committee.

I do think there's a role for the federal government. You'll find in the notes that I have provided—and I apologize I didn't have the paperwork here in advance to have it translated—there is some information regarding a jurisdictional scan of other countries that have taken measures.

It's not going to be perfect. It's not going to solve everything, but I think that any measures we can take will be of benefit and will provide the public with additional accessibility, and I really hope that we're able to do this.

[Randy Boissonnault, Liberal, Edmonton Centre, AB]

It's important. Rogers Place is a new arena in my riding within my mandate. It opened up at the beginning of my time here and it's one of the best concert venues and arenas now in the world. That's not good if people of modest or even better-than-modest means are shut out from the ticket buying process because the actual ticket selling regime has pods on the side that are designed to go three, four, five, ten times the ticket value. That makes no sense to me.

I see that the Ontario government has cut the Ontario music fund by more than half.

We as a government have boosted money for the creative sector. We have to protect consumers on one side but also make sure that we're funding creative opportunities on the other. What's the role of provinces and provincial governments in those spaces?

[Sophie Kiwala]

I think in general if we're to have any success out of federal legislation we have to work with all stakeholders, and that obviously includes the provinces.

I think it's critical that there's a broad understanding of what we're working with and it's very complex. As soon as you start to get into this it's like the classic peeling of the onion. There are many layers. You've got the artist, the manager, the agent, the promoter, the venue—the venue is very important.

The Waterson report did not put a lot of emphasis on the venue, but if you think about what happens in a venue when a big concert comes to that venue, if you insist on having identity features, one person, one ticket, that's correlated to your licence or some sort of ID, how does the venue handle that? There would need to be sophisticated technology in the venue sites. In order to support that technology, it is appropriate that in some cases the artists may be asked to contribute to that. The ticketing agents may be asked to contribute to it.

You can't say the idea is that we need to have one person, one ticket, one piece of ID, and the venue's going to figure it out on their own, because it's going to be an absolute nightmare.

[Randy Boissonnault, Liberal, Edmonton Centre, AB]

I appreciate that. There are lots of people making money in ths system.

I would like to give my remaining almost two minutes to MP Long.

[Wayne Long, Liberal, Saint John—Rothesay, NB]

Thank you.

You took the question right out of my mouth.

I'm from Saint John, New Brunswick.

The arena in my city is called Harbour Station. It's 6,500 seats. I'm not sure what the capacity is of the London arena. Is it 7,700?

[Sophie Kiwala]

Kingston? The K-ROCK Centre? I'm not sure either.

[Wayne Long, Liberal, Saint John—Rothesay, NB]

Let's assume 7,700 for the sake of argument.

[Sophie Kiwala]

It might be a little smaller.

[Wayne Long, Liberal, Saint John—Rothesay, NB]

The issue I have is a lot of these arenas or venues have box offices with one or two people. They're not technologically advanced.

I'm not a big StubHub fan, I going to be very clear with that. It's great to say that the venue should handle it, but how can you realistically expect some of these box offices with one or two people to handle what you want done with the requirements, with the markups and stuff like that?

[Sophie Kiwala]

I don't think that the venue should be held entirely responsible for it. I think that there needs to be a series of measures that have to take place, but I think if you had an automatic scan-in technology you wouldn't oblige the venue to have 20 tickets [Inaudible-Editor].

[Wayne Long, Liberal, Saint John—Rothesay, NB]

A lot of them don't have that technology.

[Sophie Kiwala]

That's right. That's why you need to collaborate, and get all the partners together.

[Wayne Long, Liberal, Saint John—Rothesay, NB]

Do you think some of the onus is actually on the performers, musicians and promoters?

[Sophie Kiwala]

There is discussion of that in the Waterson report, and in some of the other jurisdictional scans that have taken place. In other countries, this is a subject that has come up. It's not an entirely no-go area. We have to look at it.

[Wayne Long, Liberal, Saint John—Rothesay, NB]

I applaud and appreciate what you're doing. I think it's awesome. I know some of the realities of arenas.

[The Chair, Liberal, Julie Dabrusin]

Thank you.

Mr. Blaney has the floor for seven minutes.

[Steven Blaney, Conservative, Bellechasse—Les Etchemins—Lévis, QC]

Thank you, Madam Chair.

Welcome to our committee, Mrs. Kiwala. My congratulations for your political commitment. Society needs people who get involved, as you do.

Can you understand me?

[Sophie Kiwala]

Yes. I speak French, but my French is not perfect.

[Steven Blaney, Conservative, Bellechasse—Les Etchemins—Lévis, QC]

My English isn't either.