Canadian Heritage Committee on Feb. 26th, 2021

[Geneviève Côté]

I’m not sure I understand what part of the recommendations you’re referring to, Mr. Champoux. I’m sorry. What's important about the bill is that social media and digital platforms are covered by the regulatory framework. As our colleagues have already said, this is important and long overdue. We're pleased to see it happening.

Could you enlighten me and tell me which part of the recommendations you're referring to?

[Martin Champoux, Bloc, Drummond, QC]

You talked a lot about the importance of social media, which is somewhat forgotten, being covered by the regulatory framework. Tell me a little bit about how important that is to creators. What are the implications for them?

What role does social media play in the digital world in relation to the creators, the people you represent?

[Geneviève Côté]

I'll ask Mr. Lavallée to talk to us about licensed platforms and what they represent for SOCAN.

[Martin Lavallée]

Mr. Champoux, thank you for giving us the opportunity to answer your questions and take part in the discussion. SOCAN thanks you for inviting us.

They are very important for our creators, precisely because the barrier of darkness is always found in the reality of negotiations with social media and digital service providers. The information is hard to get. The transparency isn't there. Obtaining usage reports can be complicated for multiple reasons, including confidentiality.

Our goal is to ensure that royalties are distributed in a way that reflects the actual use as much as possible. We want to make sure not only that we can maximize the royalties, but also, and most importantly, that any use of our inventory is allowed and paid for. I think that transparency with regard to [technical difficulties] and the regulatory obligation would improve and facilitate the work, all in the interest of our rights holders.

[Martin Champoux, Bloc, Drummond, QC]

I believe that currently, a work has to be played for a minimum amount of time for the author to receive royalties. Am I mistaken?

[Geneviève Côté]

You're not mistaken. The work needs to be broadcast for 30 seconds for the platform to indicate to us that it has been listened to or used.

[Martin Champoux, Bloc, Drummond, QC]

Thank you.

I'd like to address Mr. Reeb from Corus Entertainment.

You talked a lot about the importance of making Canadian companies competitive on the international market. I think it's great that our Quebec and Canadian companies can shine in today's changing world of telecommunications and broadcasting.

Do you think it's possible to achieve this while striking a balance between protecting Quebec and Canadian culture and being competitive on the international market? Can we do both?

[Troy Reeb]

Thank you for your question, Mr. Champoux.

I'll answer in English.

I do believe we can be internationally competitive. We can create Quebec stars; we can create Canadian stars. I believe inside the Quebec marketplace there is the opportunity to have incentives and some regulation to require strong French-language original programming.

We need to have a level playing field to do so. A level playing field isn't just about taxing or putting program requirements onto the foreign Internet broadcasters at the same level that we have; it's about removing some of the anti-competitive regulations that are now on Canadian companies, some of those that tie our hands in terms of the kinds of programming that we can make and how we can sell it around the world.

We need to not only have a level playing field in terms of how much we have to invest in Canadian programming, but a level playing field in terms of the kinds of programming that we want to make our investments in so that it can attract audiences best domestically and attract buyers best internationally.

[Martin Champoux, Bloc, Drummond, QC]

Do you feel that this is an objective we can achieve without necessarily relying on foreign investment?

Are Canadian companies financially strong enough to do so?

My question is related to the notion of Canadian ownership of companies.

[Troy Reeb]

Mr. Stursberg raised a very good point about the need for Canadian companies not only to be able to make the investments we want, but to be able to attract investments as well.

One of the things the bill gets right is to treat foreign Internet broadcasters the same as Canadian broadcasters. In doing so, it removes some limits on foreign ownership. We're not necessarily advocating for foreign ownership, but we do need to have the ability to attract foreign investment, if necessary, to compete against these trillion-dollar giants from Silicon Valley and Hollywood.

This is where the question of flexibility comes in. We want to create Canadian programming, but if our primary competitors are creating Canadian programming with billion of dollars coming from international markets, we need the capability to be able to do the same.

[The Chair, Liberal, Scott Simms]

Thank you very much.

Ms. McPherson, you have the floor.

[Heather McPherson, NDP, Edmonton Strathcona, AB]

Thank you, Mr. Chair.

Thank you, witnesses, for being here today. This has been very interesting and informative.

I want to start by passing the microphone over to Mr. Stursberg.

Mr. Stursberg, you were interrupted during your initial discussions about the Canadian content proposals that you had put forward with regard to how we determine Canadian content and how we could fix that system. Could you elaborate or perhaps finish your comments on that?

[Richard Stursberg]

Sure. I'd be happy to.

What we have is an employment-based system right now. It's a 10-point system. You get two points for a director, two points for a writer, one point for each of the lead actors and so on. We say that a Canadian show is something made by a Canadian. That's what it is. It's a kind of employment-based test.

The problem with this test is that you could have a show that was made completely by Canadians but that has nothing to do with Canada. It could be about a completely different place. In fact, it's interesting—

[Heather McPherson, NDP, Edmonton Strathcona, AB]

It's not telling our story.

[Richard Stursberg]

Yes. It tells none of our stories and it shows none of our people. This has historically been the case, where Canadians have made shows but they've often disguised Toronto as Chicago or whatever it happens to be.

Even if you take something like Schitt's Creek, which is an enormously successful and brilliantly done comedy, you would never know for one minute that it was Canadian. You wouldn't know it. There's no reference to the people being Canadian, and there's no reference to the settings being Canadian. As more and more of the money that finances Canadian shows comes from, essentially, big foreign broadcasters, the danger of this happening more and more, it seems to me, increases.

What I think we should do is use the U.K. point system. The U.K. point system is not an employment-based system. It's a culturally based system. Very briefly, they have a 35-point system, and they call it the “cultural content test”. You get points if it's set in the U.K., and if it has British characters, British subject matter, British creativity and heritage, etc. Of the 35 points, only eight points are based on the creative team.

It serves to ensure that when you're spending what is in effect public money—whether it's money derived from tax credits or from the Canada Media Fund or the money that a broadcaster is obligated to spend—you're going to get shows that are genuinely about us, in the same way the British system ensures that the shows that are made with British taxpayers' money are genuinely British.

The interesting thing is that the British system has not in any way reduced the attractiveness of British shows. In fact, the British export more cultural product now than they did before the system was put in place, and they export six times as much cultural product per capita as we do in Canada.

One of the things that Netflix has done, which I think is really interesting, is to show that there is a market for shows that are culturally distinct, so that even with the big shows now on Netflix, like Lupin or Dix pour cent, which are French shows that are completely French, you know exactly where you are. You're in Paris. It even has French stars. These shows are successful.

I think it is very important to be careful—because ultimately the goal is cultural—to shift the point system in a way that guarantees that when the foreign broadcasters are the principal financiers of Canadian content, we will get genuinely Canadian shows.

[Heather McPherson, NDP, Edmonton Strathcona, AB]

Canadian content is, of course, of vital importance.

One of the other things you mentioned, which I would like to get some more information about as well, was local news and your concern that local news is “under water”, as you phrased it.

What, in addition, can we be doing right now to ensure that local news and local programming are being supported? I agree with you. I think it is fundamental to our democracy and fundamental to our communities.

[Richard Stursberg]

What The Tangled Garden argues is that news generally, including local news, should be put on the same footing as drama, comedy or kids shows. It should get the same level of financial support that we provide to those kinds of shows. This would be an enormous shot in the arm for local news—and indeed for national news.

All the news organizations in the country are struggling. You know very well what's happening with the newspapers. The newspapers are on the point of collapse. The only reason we continue to have local television news—and actually, more Canadians get their news from television than they do from newspapers, overwhelmingly—is that the big organizations, whether CTV or Global, have been subsidizing the losses they take in local news.

If you were to say, “No, no, no, let's treat news the same way we treat comedy”, in terms of the subsidy structures by way of the Canada Media Fund and the tax credits, that would dramatically improve the situation and make it dramatically easier for people to continue to maintain local news.

[Heather McPherson, NDP, Edmonton Strathcona, AB]

Thank you.

I believe that might be my time.

Is that my time, Mr. Chair?

[The Chair, Liberal, Scott Simms]

You just have a few seconds left, Ms. McPherson.

[Heather McPherson, NDP, Edmonton Strathcona, AB]

I will cede them to my next round.

[The Chair, Liberal, Scott Simms]

Thank you very much.

We do have time for a full second round, although I warn everyone that I will cut you off mid-sentence if I have to, without any prejudice.

Mr. Shields, go ahead for five minutes, please.

[Martin Shields, Conservative, Bow River, AB]

Thank you, Mr. Chair, for the warning. I appreciate that.

As a reformed anarchist, I don't know.... When we have the federal government spending 80% of their advertising dollars on foreign social platforms, we have a federal government that doesn't understand where their money should be spent. For example, Stats Canada sent out news releases and wanted media to cover it with news stories, not paying for advertising. I think we have a problem, starting right with the federal government, in the sense of how we support the media.

Then we had the Yale report, and anybody who sat around the table with me knows I'm not a fan of the Yale report. They had a lot of scary adjectives in there. Then when we look at this bill, with the CRTC getting more power and more regulations, I get really concerned.

I think the witness from Corus sort of touched on this but didn't really want to get into the examples of red tape, bureaucracy and regulations. As I said, as a reformed anarchist, I don't like regulations and I don't like rules. I see this legislation getting scary when we're giving more power to the CRTC, and if they're basing it on the Yale report, I have a problem.

Corus, do you want to respond to what I've said?

[Troy Reeb]

Certainly, Mr. Shields.

I think you raise a valid concern, that none of us wants to see a giant monster created at the CRTC. There is risk in this bill that this might happen, because it does give greater powers to the CRTC to determine many of these issues.

We think the simple fact that this starts the process of levelling the playing field and reduces this untenable competitive discrepancy between Canadian broadcasters and foreign broadcasters is reason enough to support it. Once it's brought in, there is no need for the CRTC to turn into a giant monster. Yes, it will be given new regulatory powers, but those regulatory powers should be applied with a light touch to the foreign players, while actually reducing the touch that they have on Canadian broadcasters.

As we said before, if you have a situation where you have Canadian broadcasters with this 30% level of required spending and foreign broadcasters at zero, there's no reason they can't somehow meet in the middle without having to increase the overall level of regulation in the system. As an operator, we find that the current level of regulation reduces our competitiveness, not only domestically, but internationally.

[Martin Shields, Conservative, Bow River, AB]

Do you seriously believe that would happen? Governments never do that. They never take stuff out. I think you're being very nice and polite.

The reality is, once you give bureaucracy powers, they develop more rules. They don't go the other way. Really, you're being optimistic on that one.

[Troy Reeb]

After 10 years of no action whatsoever, we're eager to see some kind of action, and we're willing to take on face value that the first and most important step is to bring these players into the system. Then I think we will have to see how the government empowers the CRTC, and that's where I think the role of a watchdog opposition is going to be very important.