Canadian Heritage Committee on Feb. 26th, 2021

[Troy Reeb]

Yes. The real risk is that the amount of Canadian production will just continue to decline with the revenues of Canadian broadcasters if these foreign-based Internet broadcasters are not brought into the system. They continue to take advertising dollars out of the country. They continue to take audiences out of the country.

We have no challenge whatsoever in competing. We believe we are well equipped to compete with companies even as big as Netflix, Disney and Amazon, but we have to do it with a level playing field. We can't do it in a way where we are so heavily regulated, taxed to the tune of 30% for what we need to spend on Canadian content, and facing a myriad other regulations in terms of how we operate, while our new primary competitors—and make no mistake, Netflix is the biggest television network in Canada every night in prime time—face no regulatory burden at all. That's what needs to be corrected first and foremost.

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

That 30% should go to what, then?

[Troy Reeb]

We don't necessarily believe it should be 30%. Right now, the system has 30% on licensed Canadian broadcasters. It's not all, but depending on which company.... For Corus Entertainment, Bell Media and others, it's around 30%, whereas the foreign broadcasters who are coming in through the Internet have a level of zero.

We think the right balance is somewhere in between. If you're going to bring the one up, then certainly you can bring the regulations down on the Canadian players. Give us more flexibility to be able to compete on an international scale and offset some of what the producers worry they might lose in the short term from Canadian broadcasters, by providing them much more from the Internet broadcasters.

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

Thank you.

I'll go to the SOCAN group—

[The Chair, Liberal, Scott Simms]

Mr. Waugh, you have about 30 seconds to go. Go ahead.

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

Madame Côté, you were the first in this committee to mention that digital media pays three times lower for rights. I want to thank you for that. Nobody has said that in the month or so that we've been doing this. Then you also mentioned it's five times for the Copyright Act. I want to thank you. That's a big difference between what music rights go for and what digital groups are going to pay for.

[Geneviève Côté]

Just for clarity, it wasn't what they pay, but rather what Canadian creators get out of what they pay. I just want to make sure we have that clear.

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

What a difference, though—

[The Chair, Liberal, Scott Simms]

I'm sorry. I'm going to have to end it right there. I apologize.

We'll go to Ms. Dabrusin for six minutes, please.

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

Thank you, Mr. Chair.

I'd like to begin by posing a question to everyone, just quickly. We can start with Mr. Stursberg and kind of do it in the order in which you did your first presentations.

How urgent do you believe it is for us to actually pass this piece of legislation?

[Richard Stursberg]

As far as I'm concerned, it's years past due, for all the reasons that Troy was talking about. I mean, the endless loss of advertising revenue, which has been in fact accelerated as a result of the—

[The Chair, Liberal, Scott Simms]

Mr. Stursberg, I apologize. I don't mean to break up your train of thought, but can you hold the microphone closer to your mouth? Our interpreters are having some trouble hearing you. You're a bit low.

Thank you.

[Richard Stursberg]

Sure. Is that better?

I think it's past time. We've found ourselves in this crazy situation for 10 years now. As Troy was saying, this level of unfairness is completely corrosive to the production of Canadian shows and Canadian culture. The faster you can move it, the better.

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

Great. Thank you.

Mr. Reeb, go ahead.

[Troy Reeb]

I would agree. The situation is urgent. It's dire. We've seen the ongoing degradation of employment levels at local broadcasters across the country. This isn't just about companies like Corus, Quebecor, Bell and Rogers. This is about small broadcasters across the country who continue to lose advertising dollars to companies like Facebook and Google and continue to lose audiences to companies like Disney and Netflix.

That is not sustainable, when we are putting significant revenues and taxation on Canadian broadcasters that are not applied to the foreign competitors.

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

Mrs. Côté or Mr. Lavallée, is there anything you'd like to add?

[Martin Lavallée]

When you see the time it usually takes to introduce a new act or a new law that is favourable to most of the people who are around the table right now, I would agree with my colleagues that we want this bill to go forward. We support it. There may be some amendments that could be brought to it, but the urgency is there. The intent of the bill is something we fully support.

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

Thank you.

Mr. Reeb, you mentioned in your opening statement that we must have a system that's more flexible. I was wondering if you could tell me a bit about what that looks like to you.

[Troy Reeb]

Certainly, I think that inside of the regulations that we face are a myriad other subregulations around the kind of content that is prioritized in the system. There's a category of content called “programs of national interest”, which includes dramas, comedies and documentaries, but it doesn't include the kinds of shows that we've shown ourselves to be very adept at making and selling in the world market, like lifestyle programming, where we've created a great system of Canadian stars and been able to have stars like the Property Brothers and Bryan Baeumler become stars internationally.

That favouritism inside of content categories, as well as the inability for us as a broadcaster to hold the rights to market our content internationally and still be able to take advantage of the kinds of tax credits that are available to the producers, just layers on extra complexity and reduces our competitiveness. It's not that we don't believe we need to have obligations put on Canadian broadcasters—we are prepared to accept obligations—but we just can't accept all the obligations. Some of that has to be transferred to the streamers.

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

Mr. Stursberg, some critics have said that this bill would reduce choice and increase costs to consumers. What would you respond to that?

[Richard Stursberg]

Well, I don't think it reduces choice; it increases choice. What will happen is that when the streamers are obligated to pay in the same way that Global and Corus are obligated to pay in terms of the development of Canadian content, you'll have more Canadian content and more choice by way of Canadian shows, not less. Frankly, I don't understand the argument. I think precisely what we want to get here is more choice for Canadian shows.

Maybe I'll pick up one small thing that Troy just said. Programming is also treated differently in this collection of subsidies we have for television shows. The most valuable subsidies go to documentaries and to drama, but for news—which, as Troy says, is under enormous pressure, as everybody knows, particularly local news, where stations are closing all over the country—we provide no subsidies.

We find ourselves in the most peculiar system, where we say, yes, we're happy to subsidize comedy, but we're not happy to subsidize news—which, if anything, is absolutely fundamental to our democracy. The irony is that we've said we'll give subsidies to the newspapers, but not to the television news operations. All the local television news operations are under water right now.

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

Thank you. Your book goes through many of the issues.

I have very little time left, so quickly, knowing all of the challenges that are faced within the current system of the broadcasting field, do you think this bill strikes the right balance?

[Richard Stursberg]

I think the bill's fine and it should move ahead. I don't think you should make perfect the enemy of the good. As we were talking about earlier, the bill should have been brought in 10 years ago, so now it's very important for you to move the bill quickly and expeditiously.

[The Chair, Liberal, Scott Simms]

Thank you, Mr. Stursberg, for that.

We now need to move on.

Mr. Champoux, you have six minutes.

[Martin Champoux, Bloc, Drummond, QC]

Thank you very much, Mr. Chair.

I'd like to thank the witnesses for being with us today and giving us their time.

I'd like to start with Mr. Lavallée and Mrs. Côté, from SOCAN.

Mr. Lavallée and Mrs. Côté, your recommendations for amendments to Bill C-10 highlight the transparency of data from web giants, which could provide access to certain consumer information. Could you shed some light on that and provide some clarification?