Canadian Heritage Committee on Oct. 20th, 2016

[The Chair, Liberal, Hedy Fry]

Thank you very much.

I wonder if you would indulge me. As the chair, I would like to ask you a question. I know that I can't ask you to decide what you're going to think about in the future or to prophesy on what your actions are going to be, but you said something on page 2 that I want to turn to, and that is you say you may ask about digital platforms, and you said they are for quick and easy communication, but they can't provide a reliable alternative to the skills of investigation and analysis and having journalists who adhere to professional standards.

I wanted to ask you about that because a concern we're hearing everywhere we go is that reliability and factual data and journalistic integrity are part of what you have actually set out in terms of regulations. For social media, nobody's going to stop anybody from doing what they want to do on Twitter or speaking out, but if individuals decide they want to call themselves “news” or they want to call themselves “bona fide journalists”, do they have to adhere to those standards?

The second question I wanted to ask you is...you do telecom. We've heard as a committee from all the telecoms that in fact they are at a disadvantage in terms of producing Canadian content and doing Canadian work because Netflix, Facebook, and Google do not actually pay any GST, taxes, while they have to, and that puts them at a disadvantage.

I will allow you to answer what you can, given your restrictions as a quasi-judicial body.

[Jean-Pierre Blais]

Right. I'll deal with the second one first.

The question you ask is one of tax policy, and I'm certainly not an expert in tax policy, but I can see their argument that a service like illico, Crave, or even shomi—that's still around until the end of November—are subject to GST payments, whereas other foreign services that still use our banking system through credit card set-offs don't seem to be. Just as an ordinary citizen, I'm a bit surprised by that. I know that it's not the approach taken in other jurisdictions, but I suggest you ask that question of the Department of Finance.

With respect to the quality of journalism, I gave a speech on the 17th of February and, maybe to shorten things up, I elaborated on my thoughts about the emergence of quality journalism on the new platforms. My point, in short, was that the journalism standards we have today took 300 years to develop. Facebook hasn't been around for more than 10 or 12 years, and it's the same with the other social media platforms, so it takes time. In fact, the codes of ethics that everybody quotes today probably only find their origins in the 1920s.

These standards take time to develop, but they are usually developed by the professional industry themselves. I'm particularly aware that Parliament, in the Broadcasting Act, tells us specifically, right up front, that we have to be cognizant of freedom of expression and independence of journalistic ethics. It's difficult for a body like ours to tell journalists, who are the fourth estate, how to do their job.

I am hopeful that the journalism industry will ask itself the question, as we are on these new platforms, what the standards are. Can we just print anything that appears to get more clicks to sell more advertising, or should we be applying a code of ethics, whether we're the CBC or the CTV, to make sure that we are doing it as appropriate members of that fourth estate?

[The Chair, Liberal, Hedy Fry]

Thank you very much, Mr. Blais. I know you only had an hour, and I'm glad you stayed for an extra few minutes to answer our questions. Again, thank you.

We will recess for a couple of seconds while we bring in the new group in the second hour. Thank you.

[The Chair, Liberal, Hedy Fry]

We will begin the second round.

We have, again from the CRTC, Mr. Scott Hutton, executive director of broadcasting, and Christianne Laizner, senior general counsel, executive director.

I have been told by Monsieur Blais that both Mr. Hutton and Ms. Laizner have a little more leeway and flexibility to answer questions as long as they don't contradict what the CRTC has said or done.

You have 10 minutes to present, and that will have to be split between both of you. Do you wish to present, or do you just want to go into questions and answers?

[Scott Hutton, Executive Director, Broadcasting, Canadian Radio-television and Telecommunications Commission]

We will not present. We'll stand by the chairman's introductory remarks, so we're available for questions.

[The Chair, Liberal, Hedy Fry]

We'll just go into questions and answers, then.

[Scott Hutton]

You can go into questions at this point in time.

[The Chair, Liberal, Hedy Fry]

That's great. Thank you.

We'll begin with the Liberals for seven minutes with Ms. Dabrusin.

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

Thank you.

I want to talk a little bit about Let's Talk TV. I have here in front of me a study that was prepared in December 2015 by Nordicity, and I'm expecting that you've seen a copy of this report along the way. I'll skip along to the conclusions, but I want to put something to you and get your response.

Paragraph 99 of this report says, “Our conclusion: By 2020, LTTV policies are likely to result in a loss of 15,130 FTEs of employment in the Canadian economy....” That's the employment part: 15,000 lost jobs. Then paragraph 100 says, “The LTTV Decisions would also likely result in the loss of just over $1.4 billion in GDP within the Canadian economy by 2020.”

I was wondering if I could get your response to the study.

[Scott Hutton]

If I recall correctly, that study was filed with us in some of our proceedings and we did take that into consideration, because when we set out Let's Talk TV, we set out what our road map would be so that people could, in effect, study and provide comment as to what we were putting in place. We have looked at that study in the context of making our decision, so we took it under consideration, and I believe we also commented on some of the assumptions that were made in that study in our own decision. I think our assumptions were that some of those dire consequences were overstated, in our view.

I think many of the changes that we have put in place that they were concerned about were with respect to slimmer packages—the “skinny basic” issues about allowing Canadians to pick and choose their channels—the impact that those studies may have on the subscriptions to individual channels, and the possibility that some channels may go dark. We have yet to see that dire consequence. Admittedly, we are still at the beginning of the process. We only started to put in place last March the first steps, but we've seen actions in the market.

We have also put in place a wholesale code to ensure that the negotiations between BDUs and programming services, which they were concerned about going dark, are done in a guided manner with this code. We've also put in place alternate dispute mechanisms to help companies resolve issues with respect to negotiations, because one of the great fears was that companies would, on one part, deal rather severely with smaller companies, and hence they might go dark, or that consumers may not subscribe to them because they would not be made available in a bundle package as they are now.

One of the elements of our wholesale code is that small independent services must be made available, over and above pick and pay, in some form of package to help alleviate the marketing concerns going forward.

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

One of the questions that's come up before this committee several times when people have given evidence is the CRTC's collection of data and the impact of decisions and the accessibility of that data. Do you have any data? When you looked at this, you said you made an evaluation and thought that these dire predictions wouldn't come into play. Do you have any studies that counter that, evidence that would show that these are not—

[Scott Hutton]

Our studies take the form of our proceedings and our hearings and our deliberations, in effect, which are themselves then published and collated in our decisions, and our decision does provide a response to that specific study.

With respect to data being available, I think the chair did mention earlier that we're one of the most prolific collectors of data with respect to the industry. We have highly recognized platforms or monitoring reports that make significant amounts of data available as to revenues, advertising, employment, production, types of production—and that's just on the broadcasting side.

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

I was also concerned about another area. We heard from CACTUS, which came and spoke to us about support for community media and whether we could create hubs for community media. How do you see that fit into what you've been doing with Let's Talk TV, and how do we go about creating extra supports for community media within CRTC abilities?

[Scott Hutton]

We already have significant supports toward community media and community television. The decisions that we're here to talk about—we are concerned about local TV—also did address community television. We have maintained significant contributions toward community television across the nation. We've paid particular attention to ensuring that very small communities continue to benefit from the same levels of support going forward, while looking to rebalance in major markets, and where there are other markets where Canadians had great interest in maintaining their local television stations.

[The Chair, Liberal, Hedy Fry]

Julie, you have one minute left.

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

About broadband accessibility and the socio-economic aspect of that, one of the things we talk about is a digital shift. People are moving toward digital news sources in a lot of ways, but not everyone necessarily can afford access to the Internet, and there might be differential impacts even in other ways, say, with new Canadians and the like.

How can we can improve access through the CRTC so that people can have access to digital media?

[Scott Hutton]

I'm responsible for the broadcasting recommendations at the CRTC. The CRTC, as the chairman mentioned, is going through a significant conversation with Canadians and is evaluating a number of different options as to what we can do to address those important situations.

Some of the things we've mentioned also are that the CRTC has a role to play in that field. It will play the role it deems appropriate and that it can play under the Telecommunications Act, but it is much wider than just the responsibility of CRTC. Those certainly are things our chairman has said in the context of the public hearings.

[The Chair, Liberal, Hedy Fry]

Mr. Waugh is next—

[Peter Van Loan, Conservative, York—Simcoe, ON]

It will actually be me first.

Most Canadians who have a satellite or cable package receive an unsolicited broadcaster that basically broadcasts propaganda that is aimed at undermining our western institutions and values and economy. I'm not talking about the CBC, but about RT, Russia Today.

Can you tell me the basis on which that appears unsolicited in everybody's package, what the policy implications are, and how the CRTC has dealt with that?

[Scott Hutton]

I think the issues with respect to Russian television go a little while back. In our new regulations that we put forward on “skinny basic”, we have provided for Canadian channels to be present. We've heard mention of paragraph 9(1)(h) or APTN to be present in the basic channels on that front.

With respect to allowing different channels into this nation, we are quite open to allowing companies to distribute them, to serve Canadians of various ethnicities, because we have a great multicultural—

[Peter Van Loan, Conservative, York—Simcoe, ON]

It's not an ethnic channel. It's a propaganda channel. It's not an ethnic channel.

[Scott Hutton]

All channels that are broadcast out of this country have to respect the various codes and laws of a particular country. Russia Today, which is imported by a handful of players, is a channel that the cable companies are making the decision to distribute themselves. We are not in the business of impeding the distribution or their choice as to what they can or cannot distribute; we're in the business of making sure that Canadian channels are distributed and that Canadian channels have a fair shake on that front.

[Kevin Waugh, Conservative, Saskatoon—Grasswood, SK]

You know, the dinosaur in the room is actually radio. Whoever thought radio would be the most stable of the media in this country? Is it because they supply local content all the time? Could we have your thoughts on that?

The only other thing I'm going to say about radio is I get tired when it's quarter to the hour because I know there's no jock or no newsperson there. Other than that, I think radio has expanded in this country under your regime.

[Scott Hutton]

Radio has been...“expanded” is a big word. Flat is the new up, so they are flat in terms of revenue and being able to survive and go forward. Essentially, in respect to advertising, it's a challenging business for all the players in this nation. Radio has had a resiliency through the decades and through all of the challenges because they have been able to provide that very localness, that information that you need, that very direct, local reflection of the communities that Canadians live in.

With respect to the CRTC, we've mentioned more than once that local content is key in this whole world. Social media is individual. There are a lot of digital platforms, maybe international, but that local market is something that radio has been covering rather well, and I think that they're able to continue to thrive in the environment because of that attachment to the local communities.

[Kevin Waugh, Conservative, Saskatoon—Grasswood, SK]

The only thing I'm going to say about TV is that it seems that talk TV is cheap. Production-wise, they're getting a lot of benefits through local content and cheap production.

Could we have your thoughts on that? I am asking because we've seen here the minister now giving more money to talk TV shows.