Evidence of meeting #17 for Canadian Heritage in the 43rd Parliament, 2nd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was content.
A recording is available from Parliament.
1:50 p.m.
Conservative
Martin Shields Conservative Bow River, AB
Thank you.
Mr. Stursberg, in the minute or so I have left, are you that optimistic?
1:50 p.m.
President, Aljess, As an Individual
I must say I'm with Troy. I worry about the.... It's very curious. The commission over-regulates the Canadian industry and, as Troy says, under-regulates the foreign broadcasters. The reason why we have this issue in Canada now, 10 years after Netflix started, is that the commission gave them a so-called digital exemption order. A digital exemption order allowed anybody who is digital and operating on the Internet to do whatever they please. It went on for years. The commission kept having a hearing, but instead of actually saying....
This is a curious thing, because it's kind of the opposite of your worry, but my big concern was that they didn't regulate at all. In the interest of simple fairness, they should, as we keep saying, have the same general set of rules for both Canadian and foreign operators in Canada.
1:50 p.m.
Conservative
Martin Shields Conservative Bow River, AB
Of course, my position would be no regulations for everybody, and then we're all on the same playing field, so I'm maybe going in a different direction. However, I agree that there should be a level playing field for everyone.
My time's up. Thank you, Mr. Chair.
1:50 p.m.
Liberal
The Chair Liberal Scott Simms
Thank you, Mr. Shields, and congratulations on your reformed anarchy. I hope that works out well for you and everyone involved.
1:50 p.m.
Some hon. members
Oh, oh!
1:50 p.m.
Liberal
1:50 p.m.
Liberal
Tim Louis Liberal Kitchener—Conestoga, ON
Thank you very much, Mr. Chair.
Thank you to all the witnesses for being here. I'll do my best to get to everyone, so I'll keep things quick.
I want to address first Madame Côté from SOCAN.
We all know that the future of music is streaming. It's just too convenient for listeners, and it's too profitable for some to ever think that anything is going back. Real-world earnings on recorded materials have dropped, and you gave us the numbers as to how significantly they have dropped.
Right now, all that's left for a lot of these artists is live performances and licensing of their music to commercials, movies and TV, plus the streaming. We all know that live performances are gone right now. Every stage in the world is dark, so, really, the share of revenue that has been lost is overwhelming for creators in that field.
Most of the discussions are about the platforms. The platforms will continue to change. They're changing, and they'll continue changing, so the legislation we have has to able to support these changes and into whatever is next.
I know that the foreign Internet broadcasters are increasing their revenue through subscriptions and through advertising, but the fraction of the royalties these creators are making is not even trickling down to the artists—we're talking fractions of a cent—and we all know this.
What is in Bill C-10, or what else can we do to strengthen Bill C-10, to support those creators who seem to get less and less of the pie as it's divvied up?
1:50 p.m.
Chief Quebec Affairs and Visual Arts Officer, Society of Composers, Authors and Music Publishers of Canada
As we mentioned in the brief, bring them into the realm, social media included. I'm sure you all have heard of the TikTok hits these last few months. That's social media. If we don't bring them in, then they can do what they want and not promote and not add some discoverability to our content. The less Canadian music is consumed, the less money Canadian creators will see trickle down.
The other thing is.... We were talking about programs, the point system and all of that. It was mentioned that Canadian intellectual property is very important and should be important, and making sure the stories or the music is Canadian would make a big difference for creators, all of them.
1:50 p.m.
Liberal
Tim Louis Liberal Kitchener—Conestoga, ON
To add to that, you mentioned discoverability and tracking. In other nations, are there examples of what we can do, or can we work together with other nations, because we're talking about companies that are international by definition?
1:50 p.m.
Chief Quebec Affairs and Visual Arts Officer, Society of Composers, Authors and Music Publishers of Canada
There are some talks in Europe, as I'm sure you know, and Minister Guilbeault is trying to circle with everyone. I guess the European model is the one we know the most, and we'll see where that takes every country, but because there may not be a model out there yet, that doesn't mean we can't be the leaders that we were when we put together the MAPL system. Let's think together and let's do this.
1:55 p.m.
Liberal
Tim Louis Liberal Kitchener—Conestoga, ON
That's fair enough. I do appreciate it.
I wish I had more time. I want to pivot to Mr. Stursberg.
You started to talk about this, and we ran out of time. I was going to ask you about the digital media exemption order and how that's been a loophole. Sometimes people are talking about the 30% rule, or whatever the percentage might be of gross revenue that has to be spent on Canadian content, but we're not talking about physical ownership of companies, as we did back in the day, when they had to divest businesses in Canada to Canadians.
Can you explain how that digital media exemption order can be closed, in order to include foreign Internet giants?
1:55 p.m.
President, Aljess, As an Individual
It's easy. You have the powers under the act to make a direction to the commission. You'd make a direction to the commission to close the digital media exemption. I think that's the government's plan anyhow in the context of the bill. You'd order them to close it, and then you'd order them to establish what are appropriate levels of contribution by the foreign broadcasters in Canada. In the process, you would probably also exclude them from the Canadian ownership rules.
It's pretty straightforward. As soon as the bill is done, then you just send the direction to the commission. Then the commission has to wind up the digital media exemption, and then they have to impose the conditions on the foreign broadcasters.
1:55 p.m.
Liberal
Tim Louis Liberal Kitchener—Conestoga, ON
Perfect, thank you.
I have less than a minute left, but I did want to ask.... I think it was SOCAN that mentioned the “legislation by litigation” back in 2012. Nobody wants that. Can you explain what we could learn from that?
1:55 p.m.
Senior Legal Counsel, Society of Composers, Authors and Music Publishers of Canada
It's very simple. When the intent is clear, everybody agrees on how the market should act and how parties should behave; therefore, make it clear in the act. Make no mistake about it: Any overreaching interpretation of a new thing that is added to an act will serve as a tool or a weapon for anyone who is against it. They'll go to great lengths to try to come up with a different intent than what the government had first envisioned.
1:55 p.m.
Liberal
The Chair Liberal Scott Simms
Thank you, Mr. Lavallée.
Mr. Champoux, you have two and a half minutes.
1:55 p.m.
Bloc
Martin Champoux Bloc Drummond, QC
Thank you, Mr. Chair.
Earlier, Mr. Stursberg talked about Telefilm Canada and the Canada media fund. He would simply replace them with a tax credit formula. I apologize. I'm very interested in his point of view, but since I'd like to get a Quebec perspective, my question will be for Mrs. Côté and Mr. Lavallée from SOCAN.
This type of organization is in charge of redistributing funds and must also protect Canadian and Quebec cultural content. Do you think we could do the same thing with a tax credit system?
I'd like to hear your thoughts on this.
1:55 p.m.
Chief Quebec Affairs and Visual Arts Officer, Society of Composers, Authors and Music Publishers of Canada
Production and the rules that apply to it aren't really part of our world. I think the system is working well at the moment, and I'd prefer not to get involved in this.
1:55 p.m.
Bloc
Martin Champoux Bloc Drummond, QC
No problem. I understand, Mrs. Côté. I wanted to see if you had an opinion on it, with your experience.
So my question will be for Mr. Stursberg, and I'll ask him if he thinks this system would offer protection for original Canadian, French-language and Quebec cultural content.
Shouldn't we implement an identical point system as part of a tax credit formula?
1:55 p.m.
President, Aljess, As an Individual
The same system would be used because the current tax credits and the Canada media fund are based on the same system.
On the subject of content protection, as I said, the most important thing is to ensure that programs are distinctly Canadian or Quebec. For that reason, I think it's important to change the point system and adopt a system based on that of the United Kingdom, which will guarantee that the money from the subsidies will be invested in programs that are distinctly Quebec or Canadian.
I think it’s easy to do. If we combine all the current subsidies and redirect them to the Canadian Audio-Visual Certification Office, the organization responsible for tax credits, we'll have a more efficient system that will always be based on the point system. The point system—
2 p.m.
Liberal
The Chair Liberal Scott Simms
Thank you very much.
My apologies, we're rushed for time.
Ms. McPherson, you have two and a half minutes, please.
2 p.m.
NDP
Heather McPherson NDP Edmonton Strathcona, AB
Thank you, Mr. Chair.
I have the role in this committee every single meeting as being the last person to question our witnesses, so I want to give each witness time for a very brief answer and a bit of a final word, I guess.
To quote some of our witnesses, this bill has been 10 years coming and there has been nothing whatsoever done in the last 10 years. I recognize that the witnesses want to have this bill passed with some urgency, but I think it's really important, considering it's taken so long, that we get it right.
I'd like all of the witnesses, if possible, to give me the very top amendment that they would like to see with this bill.
I would start with Ms. Côté and Mr. Lavallée, please.
2 p.m.
Senior Legal Counsel, Society of Composers, Authors and Music Publishers of Canada
The two most important things to ensure that the bill is perfect, as you say, are to include social media, as much as possible, since they are broadcasters like any other, and to ensure that we do not extend an existing exception in the act, especially since we are talking about one act by referring to another act, namely the Copyright Act.
2 p.m.
Executive Vice-President, Broadcast Networks, Corus Entertainment Inc.
I think the bill needs to set the right environment for not only a level playing field but a reduced level of regulatory burden on domestic broadcasters going forward. The first and clearest way to do that is to eliminate what are known as CRTC part II fees. The bill does not contemplate charging these fees to foreign broadcasters, so it will maintain a multi-million dollar tax burden on Canadian companies that it would not put on foreign companies.
The first and easiest thing—it's not the biggest, but it's the easiest—would be to get rid of those part II fees.
2 p.m.
NDP
Heather McPherson NDP Edmonton Strathcona, AB
Thank you.
Mr. Stursberg, I believe you have the last word.