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.
1:45 p.m.
Liberal
The Chair Liberal Scott Simms
Thank you, Mr. Desjardins. My apologies.
Folks, we do have time for a second round. That would put me a couple of minutes over the top of the hour, but it's certainly worth achieving.
Let's go to Mr. Shields, for five minutes please.
March 12th, 2021 / 1:45 p.m.
Conservative
Martin Shields Conservative Bow River, AB
Thank you, Mr. Chair.
Mr. Fortune, you were giving a good legal statement on policy. You didn't get to the consequences, in a sense. You referred to the Lincoln study.
If this doesn't happen, what do you believe the consequences will be?
1:45 p.m.
Legal Counsel, Independent Broadcasters Group
You're asking what are the consequences will be if the bill does not include Canadian ownership as a policy objective?
1:45 p.m.
Legal Counsel, Independent Broadcasters Group
I would say on a policy level, any policy, regulation, service order or anything of that nature that sought to encourage Canadian ownership of our own services for that reason would be suspect. Essentially, it takes away a whole area of jurisdiction and the carving-out space in our own system for Canadian services. That's the big question, there.
In terms of the existing ownership direction, it's not going to disappear instantaneously when the act comes into place, but it does raise a big question mark. What is the authority for that ownership direction if Canadian ownership is not even included as a policy objective in the act?
I think others have raised that—
1:45 p.m.
Conservative
Martin Shields Conservative Bow River, AB
What would the result of that be? I'm looking for the next step, the result.
1:45 p.m.
Legal Counsel, Independent Broadcasters Group
If the government were taken to court on the vires of its ownership direction and it were struck down, then there would be no ownership restrictions within Canadian broadcasting.
1:45 p.m.
Conservative
1:45 p.m.
Legal Counsel, Independent Broadcasters Group
The results would be in the markets.
The result would be that we'd see a hollowing out of Canadian ownership of broadcasting services and sales to foreign entities.
1:45 p.m.
Conservative
Martin Shields Conservative Bow River, AB
That's where I wanted to go to get to the conclusion of what the result would be if that weren't there.
1:45 p.m.
Conservative
Martin Shields Conservative Bow River, AB
Thank you.
Mr. Desjardins, when you talked about a 50% loss in ad revenue, you said it's gone to the Internet services. Has it gone to different places?
1:50 p.m.
President, Canadian Association of Broadcasters
Yes.
Effectively, within the last decade it's been a really dramatic change in terms of what the advertising landscape looks like in Canada. Now 50% of it is going to online services. That's a whole new competitor.
I would say that 80% of the online advertising that's done in Canada is done through Facebook and Google.
1:50 p.m.
President, Canadian Association of Broadcasters
There are really the two giants of the online—
1:50 p.m.
Conservative
1:50 p.m.
President, Canadian Association of Broadcasters
They have the scale and the ability to be able to take advertising and distribute it. They're certainly much larger, and they're able to undercut the prices of, for example, a Canadian company trying to get into this area. They would be able to undercut that company by virtue of the fact they are globally capitalized.
This goes to the previous question. We were talking about the idea of Canadian ownership. I think that one of the things we keep talking about in this discussion is creating a less and less equitable broadcasting system between Canadian operators and international operators. International operators have vast access—
1:50 p.m.
President, Canadian Association of Broadcasters
—to capital markets around the world, and if we want to say that, well, they can do that, and Canadian operators can only bring in—
1:50 p.m.
Conservative
Martin Shields Conservative Bow River, AB
I have one other question. You mentioned that the behaviour has changed of the subscriber, the clients, the customers. What in this bill will change that behaviour back?
1:50 p.m.
President, Canadian Association of Broadcasters
I don't think that it's attempting to change the behaviour; I think it's attempting to recognize the behaviour. I think that part of the problem that we have is that the Broadcasting Act is still looking at broadcasting as if it were 1992 and not as it is in 2021. It's very much to the detriment of our Canadian broadcasters.
The Broadcasting Act is fundamentally the law by which broadcasters operate, and there are lots of people who have an interest, but we're committed to this, so the last thing that I would plead, to both this committee and the government, is to keep broadcasters and their future ability to compete at the centre of the considerations going forward.
1:50 p.m.
Liberal
Lyne Bessette Liberal Brome—Missisquoi, QC
Thank you, Mr. Chair.
Thanks to the witnesses for being with us once again today.
First, I'll speak to Mr. Desjardins.
The Broadcasting Act has essentially remained unchanged since 1991. The committee has often heard witnesses say it's absolutely, even urgently, necessary that the act be modernized for the sake of our cultural industry.
Do you share that view? Do you think the act is in urgent need of modernization?
1:50 p.m.
President, Canadian Association of Broadcasters
Thank you for your question, Ms. Bessette.
Yes, absolutely. The Broadcasting Act has been behind the times for too long, as I just told Mr. Shields. There's quite an urgent need to pass this bill. If it isn't done now, we won't get around to it again for a year or two. However, who knows what the broadcasting situation will be in 2023 or 2024? We must at least examine what's happened over the past decade.