Evidence of meeting #19 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 crtc.

A recording is available from Parliament.

On the agenda

MPs speaking

Also speaking

Carol Ann Pilon  Executive Director, Alliance des producteurs francophones du Canada
Kevin Desjardins  President, Canadian Association of Broadcasters
Luc Perreault  Strategic Advisor, Independent Broadcasters Group
Joel Fortune  Legal Counsel, Independent Broadcasters Group
Bill Skolnik  Co-Chair, Coalition for the Diversity of Cultural Expressions
Nathalie Guay  Executive Director, Coalition for the Diversity of Cultural Expressions
Wendy Noss  President, Motion Picture Association-Canada
Pierre Karl Péladeau  President and Chief Executive Officer, Quebecor Media Inc.
John Lewis  International Alliance of Theatrical Stage Employees, Motion Picture Association-Canada

1:35 p.m.

Liberal

The Chair Liberal Scott Simms

Thank you, Ms. Pilon.

Sorry about that, but I have to move on.

Mr. Champoux, you have the floor for six minutes.

1:35 p.m.

Bloc

Martin Champoux Bloc Drummond, QC

Thank you very much, Mr. Chair.

Now it's my turn to add my voice to those of my colleagues in thanking the witnesses for their understanding and for being back with us today.

Mr. Perreault, have you read the draft directions that the minister issued yesterday? They're the directions he intends to submit to the CRTC after the new bill is passed.

1:35 p.m.

Strategic Advisor, Independent Broadcasters Group

Luc Perreault

Yes, I've read them.

1:35 p.m.

Bloc

Martin Champoux Bloc Drummond, QC

What do you think of them? Do you see anything reassuring there? Any answers to your questions or responses to your concerns?

1:35 p.m.

Strategic Advisor, Independent Broadcasters Group

Luc Perreault

They're an excellent start. The directions are relatively consistent with the discussions we've had with members of the committee. However, the Independent Broadcasters Group would prefer that certain elements be included in the act rather than the directions.

As regards foreign ownership and amendments that we've proposed to regulate the precedence of Canadian services over online platforms, certain powers have been withdrawn from the CRTC. We think they can be strengthened by directions. The Supreme Court has previously told the CRTC, in response to its request to determine whether it had the authority to set service rates for terrestrial broadcasters, that there was no such provision in the act and that the CRTC therefore did not have the authority to do so.

1:35 p.m.

Bloc

Martin Champoux Bloc Drummond, QC

Hence the importance of including many elements in the act rather than in ministerial directions.

March 12th, 2021 / 1:35 p.m.

Strategic Advisor, Independent Broadcasters Group

Luc Perreault

That's correct.

Directions may change from one government to the next. Consequently, if the Governor in Council has to issue directions to the CRTC every time the government changes, you can understand why broadcasters may find it hard to prepare their strategic plans.

1:35 p.m.

Bloc

Martin Champoux Bloc Drummond, QC

You said in your presentation earlier that the CRTC has the authority under the present act to supervise online distribution services but that power will be withdrawn under Bill C-10. I'd like you to clarify your thinking on that subject because I thought the situation was the reverse.

1:35 p.m.

Strategic Advisor, Independent Broadcasters Group

Luc Perreault

No, that's not the case. The CRTC has adopted a measure called the Exemption order for digital media broadcasting undertakings.

This enables it to refrain from regulating online services. It has the power to do so, but it has chosen to exempt those services.

The CRTC thus had, and still has, the power to regulate those services. However, all the powers it currently has in its toolbox in order to regulate online distribution services would be withdrawn from it under Bill C-10.

1:35 p.m.

Bloc

Martin Champoux Bloc Drummond, QC

You support Bill C-10, but you have many reservations. We've had a chance to discuss it amongst ourselves.

Do you think we can go ahead with this bill if no amendments are made to it, or should we cancel it all and restart the process at another time?

How important do you think it is to make amendments?

1:35 p.m.

Strategic Advisor, Independent Broadcasters Group

Luc Perreault

The Independent Broadcasters Group conducted extensive consultations before proposing amendments to the bill, amendments that I think clarify the CRTC's powers. If those amendments are adopted, the new Broadcasting Act will be sufficiently balanced, and the CRTC will have enough powers to regulate the online ecosystem without always having to wait for directions from the government or the Governor in Council.

1:35 p.m.

Bloc

Martin Champoux Bloc Drummond, QC

Mr. Fortune addressed the issue of discoverability and the inclusion of independent broadcasters in basic subscriptions.

Tell me a little about the vulnerability of independent broadcasters relative to other broadcasters.

1:35 p.m.

Strategic Advisor, Independent Broadcasters Group

Luc Perreault

After the CRTC adopted the new regulations following the consultation process on Let's Talk TV: A Conversation with Canadians in 2015, a code of conduct was established. Certain aspects of that code of conduct should be changed because independent broadcasters don't have a lot of power when they negotiate with a very large distributor. They always emerge battered from those negotiations because our distribution rates get cut.

We realize at the same time that the money from the distribution fees of independent services winds up in the pockets of services that belong to the major distributors. So you see there's a problem the CRTC should address by amending certain articles of the code of conduct, in other words, of the wholesale services code.

1:40 p.m.

Bloc

Martin Champoux Bloc Drummond, QC

Thank you.

Perhaps I have time to ask Ms. Pilon a brief question.

Ms. Pilon, earlier you discussed a subject that caught my attention, the issue of flexibility in the directions. You felt the CRTC was allowed far too much flexibility.

Can you tell us about the consequences that may have?

1:40 p.m.

Executive Director, Alliance des producteurs francophones du Canada

Carol Ann Pilon

We'll definitely have to study that document in detail, but what struck me on first reading was that it frequently referred to the flexibility granted to broadcasting businesses. If it's the kind of flexibility that results in no increase in funding invested to support the creation of Canadian content, then we're obviously failing to achieve the objective. I think you have to indicate that it's a project…

1:40 p.m.

Liberal

The Chair Liberal Scott Simms

Thank you, madam.

1:40 p.m.

Bloc

Martin Champoux Bloc Drummond, QC

Thank you very much.

1:40 p.m.

Liberal

The Chair Liberal Scott Simms

My apologies, again. I seem to be cutting you off again.

Madam McPherson.

You have the floor for six minutes.

1:40 p.m.

NDP

Heather McPherson NDP Edmonton Strathcona, AB

Thank you very much.

Thank you to all the witnesses for being with us, for joining us, again.

I would like to just allow Ms. Pilon to finish her thought, if I could. I know she got interrupted.

1:40 p.m.

Executive Director, Alliance des producteurs francophones du Canada

Carol Ann Pilon

Thank you very much.

Yes, it has to be provided somewhere, either in the preamble to the act or in the directions, that the aim is to increase support for the production and dissemination of Canadian content. I think that has to be clear because, as Mr. Perreault says, we may indeed be at the mercy of successive orders that might be made by the Governor in Council, which could alter the interpretation from one government to the next.

Ideally, it would be clearly stated in the preamble to the act that the aim of this amending bill is to support Canadian creation.

1:40 p.m.

NDP

Heather McPherson NDP Edmonton Strathcona, AB

Thank you very much.

I come from Edmonton Strathcona, and we have a massive francophone population. I have deep concerns about what is going to be happening to make sure the official-language minorities are protected, their language rights.

I'm going to ask a few questions of the Independent Broadcast Group.

You were probably watching on Monday when we had the minister join us. I did ask the minister if Bill C-10 would guarantee that Canadian broadcasters could not be bought by foreign companies.

How do you feel about that? Why do we need to see a provision in the bill to protect our Canadian broadcasters? Could you discuss that a little, Mr. Perreault or Mr. Fortune?

1:40 p.m.

Strategic Advisor, Independent Broadcasters Group

Luc Perreault

First of all, all IBG members agree that any ownership has to be part of the law. It can be achieved via directive.

I've known Joel for 35 years. He's one of the greatest lawyers that work with broadcast law. I will let Joel explain why it should be part of the law and not managed by GIC directives.

1:40 p.m.

Legal Counsel, Independent Broadcasters Group

Joel Fortune

Thanks for that.

The way the law works, generally, is that it has two major parts. There are the policy objectives set out in section 3, and then there are the powers. You have to have both elements. You have to have policy objectives, and you have to have the power. You can have all the noble policy objectives in the world, but if there's no power to back them up, they don't help. Similarly, you can have all the powers in the world, but if there's no object in the act, it can easily be challenged.

In the case of ownership, first on the policy level, it would be incredible to me if we didn't have the support of Canadian ownership in our system as an objective. This is not to say that the ownership language shouldn't be amended; perhaps it should be. However, we've proposed an amendment that I think takes into account global platforms while also preserving the space for Canadian broadcasters.

Why do we want that? We don't want Canadian broadcasters just to be branch plants of foreign platforms. I'd refer this committee to the excellent Lincoln report from 2003, which said exactly that: “...the best interests of Canadian citizens...and fostering...our own talents and imaginations cannot be left to foreign interests.”

Legally, the direction exists under the existing act, which includes a requirement that the broadcasting system be effectively owned and controlled by Canadians. That policy direction speaks directly to that object. If you have no object about Canadian ownership, what's the authority for making that direction? It's certainly open for the direction to be challenged at law that it's no longer valid, given the change in the policy and the act. That's the concern there.

1:45 p.m.

NDP

Heather McPherson NDP Edmonton Strathcona, AB

I'd like to see that strengthened, certainly.

With my remaining time, I'm going to ask Mr. Desjardins a question as well.

One of your member companies, Corus, in their testimony to this committee, said that producers are making record profits while broadcasters are suffering. That was the reason why they want to loosen CanCon obligations, but in their last quarter, Corus recorded a 45% profit margin.

How do we square these two things? How do we make these two things align?

1:45 p.m.

President, Canadian Association of Broadcasters

Kevin Desjardins

I can't speak exactly to the last quarter or whatnot. I do know that effectively, over the last seven years, broadcasting at large has been losing money, certainly on the TV side. We've seen independent producers that have basically seen about seven years of growth, while we've seen seven years of decline.

In terms of all that goes into that quarterly report, I can't speak exactly to that. I can tell you that even before COVID, there were really substantial challenges. As I say, it's a combination of things. It's losing subscribers to cord cutters. It's losing advertisers to online advertising. It's losing viewers to other groups.

In terms of the—