Canadian Heritage Committee on Nov. 1st, 2016

[Mark Schaan]

They are not. They are separate. There are a number of intervening pieces. My minister ran the innovation agenda consultations over the course of the spring, summer, and early fall, which had sector-specific as well as geographic-specific—

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

So you don't have a representative, for example, in Montreal this week for

The consultation between Minister Joly and industry stakeholders took place last Friday. Many cultural industry stakeholders have told me that they were participating in a sectoral table held with Canadian Heritage representatives, among others.

So you are not part of that specific table?

[Mark Schaan]

No. We have a strategic relationship in terms of our continued discussions with our colleagues at the Department of Canadian Heritage.

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

I apologize for interrupting you, but our time is short.

It is very rare for us to get an opportunity to hear from people with your qualifications and knowledge. When it comes to the retail sector, people have been saying for two or three weeks how complicated online sales were for them. In fact, taxes are imposed somewhat, and it's often too beneficial for the consumer. For the same product and at the same price, people are better off buying from Amazon than from a local retailer with a store and an Internet site.

Are any people from your department specifically in charge of retail?

[Mark Schaan]

Yes, my colleagues in the industry sector do have a sector that looks at the retail component. They look at retail across a whole series of sectors, including the e-commerce space, and then they liaise with folks like me in terms of the linkage between that e-commerce activity from a sectoral perspective in how it's then relating to our statute.

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

It will certainly come as a relief to them to know that people are taking care of business for them. That has already been mentioned. During the studies, some people told us that the retail trade was being affected by online competition. So my conclusion is that, in the retail sector, you certainly have people specialized in the business, but you do not have people specialized in the media, in culture, in television production, and so on.

Is that correct?

[Mark Schaan]

I'd say yes and no. As a sector, we look at industrial activity in a number of different ways. Our colleagues at—

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

—retail—

[Mark Schaan]

We do have folks who look at retail—

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

—but not at media—

[Mark Schaan]

—but at media it would be enveloped because media, as a sector, would be shared with the Department of Canadian Heritage and so—

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

Thank you.

I wanted to get that information. I understand that a thousand jobs in the area are still part of Canadian Heritage’s governance, which, among other things, works to spread our culture and the things that distinguish us. Unfortunately, the employees working in the area have a little too much on their hands.

In my view, Industry Canada should pay particular attention to this changing area. You mentioned the people working on retail commerce. That's great for them because they need a lot of help. My observation is that the media industry would do well to call on you and bring in resources dedicated to their reality, which is actually quite overwhelming.

I know that I only have 40 seconds left.

I have a quick question for the people from the Competition Bureau.

[The Chair, Liberal, Hedy Fry]

You have 30 seconds.

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

I read in The Guardian that the European community is looking into the monopolistic nature of Google.

Could Canada be a leading player there? Could we participate in an international study into the monopolistic nature of Google and the data that the company is accumulating?

[Jeanne Pratt]

We did an investigation into Google; it wrapped up in April 2016. We looked into six practices about which we had received complaints. Our investigation took three years. We consulted hundreds of witnesses.

Basically, we found evidence for one problem for which we came up with a solution. In Europe, the dynamics are a little different. They have Google Shopping, which we do not have here.

We conducted an exhaustive investigation into it.

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

Would it be possible to send that investigation to us? We would be really interested.

[The Chair, Liberal, Hedy Fry]

Thank you.

Monsieur Breton.

[Pierre Breton, Liberal, Shefford, QC]

Thank you, Madam Chair.

My thanks to our witnesses for being here today. Their expertise is extremely helpful for our study.

Could we talk about broadband Internet access in Canada and the costs for that access?

According to the table presented to us earlier, for example, in Quebec, 96% of households can have access to fixed broadband. I don’t know exactly what the word “fixed” means. We see that 77% of those households are apparently connected, are apparently subscribers. I am more specifically interested in the 4% minority, the households for whom it is not possible. I am talking about the particular case of Quebec. Even the fact that it is only 4% bothers me, because they are often people in remote, isolated, rural regions. They have no access to broadband Internet.

Think of our farms in those regions, for example. They have increasingly sophisticated technologies that are very advanced. If we want them to be more and more competitive, they must have broadband Internet access.

What does the department intend to do to ensure better access, for those regions specifically?

[Adam Scott]

We have a number of programs, including Broadband Canada.

No, actually, that was the 2009 to 2012 program. Please excuse my error. It is actually the Connecting Canadians program.

This is a $300-million program, which is designed to improve services all across Canada, specifically in rural areas and remote communities.

You are absolutely right. In any sector of the economy, including agriculture, these technologies are necessary. They are also important for families, whether for education, medical services, or anything else. Basically, everything in our lives now depends on Internet service. Through the program, 280,000 people and their households will be connected. It should be complete in 2019.

This is the program in effect at the moment. The most recent budget includes another $500 million. This is for a program that is a little different and will not be focused on a minimum residential speed. Instead, we are talking about connecting communities to a service that can sustain innovation. We are starting to talk about fundamental changes.

We are talking about really big changes. What can that do to a community as opposed to just insuring to that baseline minimum?

Government action is definitely taking place. I think it's important to note that in Canada, the vast majority of the network is built and supported by the private sector. The government role has been focused on filling those niches where the economic model just doesn't make sense. It's incredibly expensive. If you're talking about a remote community, it's difficult to get the service there. If you're talking in an agricultural region, a rural area where the population density isn't high enough, it becomes incredibly difficult to support the network, based on the revenues you would collect from it.

[Pierre Breton, Liberal, Shefford, QC]

The Competition Bureau officials will probably be able to answer my next question.

People often talk to us about the high prices they have to pay for Internet access.

Could you tell us about the current state of competition between Internet service providers?

[Julien Brazeau]

As we mentioned previously, when we study a specific market, we do so on a case-by-case basis. We do not do comparative studies. We do not study a sector for a specific period. We have no monitoring activities in a particular sector. For us, it really depends on the facts, on a specific case. That is why we cannot necessarily provide an opinion on the current status of competition in a specific market. As I told you, it depends on transactions as they arise and on conditions in the market at a specific time.

[The Chair, Liberal, Hedy Fry]

Thank you.

We can go to the second round now. I think we'll have a three-minute round.

I'll begin with Mr. Maguire.

[Larry Maguire, Conservative, Brandon—Souris, MB]

Thank you, Chair.

It's been a couple of decades since I appeared before the Competition Bureau on grain company mergers and that sort of thing in the Prairies, but this is a little different. You mentioned that competition drives innovation, Ms. Pratt. Can you or Mr. Schaan expand on the Competition Bureau's view of whether or not regulations are in place or things that would prohibit private digital media people from setting up small news sources in their own areas?

[Jeanne Pratt]

We would look at whether there are barriers to entry, and how high those are. Generally for media, I think they'd be less than a grain operation where you need strong distribution and a lot of infrastructure. We do take each case as it comes.

We drank the purple Kool-Aid that competition drives innovation, and we look through that lens when we're doing our enforcement work. For example, we have a case before the Competition Tribunal right now on innovation in the real estate sector against the Toronto Real Estate Board. We are constantly looking at that aspect of competition as well to make sure we are maximizing all opportunities for Canadian consumers to have lower prices and better products.

[Larry Maguire, Conservative, Brandon—Souris, MB]

I wasn't trying to make a comparison between the grain industry and digital media. There is none, as far as I'm concerned.

Mr. Brazeau, you have the price and the non-price in your presentation in regard to making sure that things are okay under the Competition Act. How much do you put into the quality, choice, service, and innovation in regard to that side of whether these types of businesses can be established?