Canadian Heritage Committee on March 26th, 2021

[Alain Rayes, Conservative, Richmond—Arthabaska, QC]

Thank you, Mr. Chair.

My thanks to the witnesses for joining us today to answer our questions and thereby to help us in tabling a report that is as complete as possible.

Mr. Scott, in your remarks, you said that the time has come for the CRTC and for Canada to adapt to the future by means of this new bill.

However, according to a number of witnesses who have come to meet with us, our priority should be to lighten the regulatory obligations on Canadian broadcasting companies rather than to extend them to other online undertakings. That suggestion was specifically made by Professor Geist, from the University of Ottawa, and by Stéphane Cardin, from Netflix. They both stated that too rigid a regulatory framework would lead some online services to find a way around Canadian legislation or to reduce their investments in this country.

Then, Pierre Karl Péladeau, the president and chief executive of Québecor—whom I am sure you know well—suggested lightening the administrative and financial burdens of traditional television companies in order to stimulate competition.

Can you tell us why, in your opinion, the government did not take that approach? Why is the government trying to add rules instead of trying to make things simpler in order to stimulate competition and to provide equitable service, whether traditional or digital?

[Ian Scott]

There are a number of questions there. Taken together, they make up one very complex question.

There are many elements to your question.

Let me start by simply indicating that with respect to the right framework, there are many interested parties. They all have a view. They all have both the public interest and their private interest in mind. At the end of the day, the details of the regulatory regime will be set after public proceedings, after we're able to hear all stakeholders and to hear the evidence, but the starting steps are to have data about who is doing what in the sector, their revenues and their subscribers. Then we can move on to developing a regime that fulfills the objectives of the act.

I apologize if I'm not answering all your question. Perhaps you can add to it.

[Alain Rayes, Conservative, Richmond—Arthabaska, QC]

So you believe that adding rules will give us some assurance of a degree of fairness between traditional broadcasters and digital broadcasters, whereas loosening the regulations would not. Is that the gist of your opinion on this issue?

[Ian Scott]

Yes, definitely.

I like to use the words symmetry and equitable.

I don't know if you're familiar with the 2018 report, “Harnessing Change”. One of the points we made was that you need to design regulations that recognize different lines of business and the nature of the business. Then you develop something that is equitable for all parties.

My colleagues Mr. Hudson and Mr. Shortliffe could perhaps add some specifics.

[Scott Hutton, Chief of Consumer, Research and Communications, Canadian Radio-television and Telecommunications Commission]

Good afternoon, Mr. Rayes.

Yes, we have to consider the different parties and entities that are before you and that will be before us a little later, in terms of the regulatory frameworks. You mentioned Netflix and the current players—

[Alain Rayes, Conservative, Richmond—Arthabaska, QC]

Forgive me for interrupting you.

My question was not about what those people said. I was not asking for an analysis of the current players. I should also point out that one of those to make that suggestion was a professor.

I would rather have your opinion about the approach to be taken. Do we ease the constraints or add more?

In your opinion, what would make for better fairness, adding regulations or loosening those we presently have?

[Scott Hutton]

The CRTC's opinion, which we provide in our report and which is the result of the work we have done on the legislative framework, is that we must have an approach that will indeed give us the flexibility to look for the advantages in regulations that may seem different, more appropriate, more flexible, and tailored to all the players.

We fully understand that the existing players have also to face competition in this new digital world. We therefore believe that the regulations under which they operate must also be tailored, in an attempt to find the best possible means for international players to contribute to the objectives of the Broadcasting Act.

It's therefore not a question of choosing one model over another, but of trying to get the best from both.

[Alain Rayes, Conservative, Richmond—Arthabaska, QC]

Some broadcasting experts have told us that they have doubts as to the constitutionality of Bill C-10.

How do you respond to that? Do you think they are right to be concerned?

[Ian Scott]

Rachelle Frenette, our legal counsel, is in a better position to answer that question.

[Rachelle Frenette, General Counsel and Deputy Executive Director, Canadian Radio-television and Telecommunications Commission]

Good afternoon.

Thank you for the question, Mr. Rayes.

I can just tell you that we are relying on the note from the Department of Justice, which has studied Bill C-10 and concluded that the bill is constitutional.

[Alain Rayes, Conservative, Richmond—Arthabaska, QC]

Has the CRTC asked for a legal opinion?

[Rachelle Frenette]

We examine the bill internally and go through all the legal ins and outs and the applicable legislation.

[Alain Rayes, Conservative, Richmond—Arthabaska, QC]

Thank you, Ms. Frenette.

Do I have any more time, Mr. Chair?

[The Chair, Liberal, Scott Simms]

You have a few seconds left, if you have any concluding remarks.

[Alain Rayes, Conservative, Richmond—Arthabaska, QC]

Thank you very much.

I am sure that my colleagues will be asking the witnesses questions about the place of French-language and Canadian content. I look forward to hearing their comments on that issue because many who are deeply involved in the area have raised a number of concerns.

[The Chair, Liberal, Scott Simms]

Thank you, Mr. Rayes.

You are officially over time. My apologies.

We are now going to go to Mr. Louis.

Welcome, Mr. Louis.

The floor is yours for six minutes.

[Tim Louis, Liberal, Kitchener—Conestoga, ON]

Thank you, Mr. Chair.

Thank you to the witnesses. I appreciate your time and your advocacy.

I will address my question to Mr. Scott, because he can then pass it on to whoever he thinks might be able to answer it. I appreciate it.

We have both sides of the story about regulatory obligations between traditional broadcasters and whether they should be reduced or whether we should enhance the obligations for online broadcasting. Specifically, I appreciate your talking about modernizing the enforcement, allowing more diversity and the timelines for public consultations.

Could you add to what you were saying previously about the timeline? If we can get this legislation passed quickly, what is your timeline for public consultation? When do you see that happening?

[Ian Scott]

At the end of the day, the timelines will be set, if I understand correctly, through a policy direction to be issued by government to the CRTC. Based on the public documents and the comments of the ministry, they have asked us to be able to implement a number of major measures in a nine-month period. Then there's a longer, two-year period. Obviously, if we are issued such a policy direction, we'll fulfill it.

I'll be very frank with you. We have been working very hard internally at the CRTC in order to prepare for the day, if it's the will of Parliament to pass this legislation into law. It will be important that we are able to start immediately and issue relevant notices or bulletins. The public proceedings would follow on very quickly after that.

[Tim Louis, Liberal, Kitchener—Conestoga, ON]

I appreciate that because, from the many people we have heard from thus far, I know having public hearings to provide that regulatory framework will be most welcome. As more people understand what we're going through, the more voices we have, which is fantastic and it fits into your diversity.... In the meantime, I know you are also collecting that data.

I'd like to change pace. There's a difference between online streamers investing money for jobs in the cultural sector, which is important and productive for our creative class and our economy, and investing in Canadian stories and Canadian content. I want to make sure we can continue to support and promote those Canadian stories, the creators and the programming.

Do you anticipate reasonably requiring a significant level of Canadian content obligations from those online streamers, and what challenges would we face in those endeavours?

[Ian Scott]

The short answer is yes. The essence of CRTC regulation is about the production, the distribution and the discovery or accessibility of Canadian content. In that sense, when I say “Canadian content”, I mean content that's reflective of Canada and its values. It is fully our expectation that this will continue.

The online providers are no different in many respects from others. They'll pursue good stories. We have a role to play in defining, or perhaps redefining, for regulatory purposes what constitutes Canadian content.

You noted that there's an increased focus on diversity and on indigenous peoples. Those will form a part of it.

However, the short answer is yes. There is a regulatory regime to be developed that will ensure both that economic activity you mentioned as well as the production of Canadian content in the sense that you described.

[Tim Louis, Liberal, Kitchener—Conestoga, ON]

I appreciate your saying that, because a number of witnesses have come forward....

Something that the Broadcasting Act has been able to preserve is our own voice. Now, with our voices being even more diverse, that's really important.

With my time, I have one more question. One of the issues we're working on is striking that balance between legislation and regulation. We need to make sure that if we make those decisions now, they'll stay relevant. In your opening statement, you mentioned that as technology changes and new formats become viable, we don't want to be updating this legislation every few years—and it's overdue now.

Just as streaming has emerged to compete with traditional broadcasting, what do you see as the challenges of keeping up with whatever technology advances we'll experience as a nation? In your opinion, how can we balance that constant push and pull between legislation and regulation?

[Ian Scott]

The key is that you put the important policy principles in legislation—because, as you know, it is difficult to change fundamental structural legislation—and you leave the details, with respect, to the expert regulator, along with policy direction powers.

We've emphasized in our earlier reports—and I'm happy to do so today—that the CRTC needs to be more nimble and flexible. We need to be able to adapt to changing technology, both today's and tomorrow's technology. That is best achieved by letting us hold public proceedings and establishing a framework that can be changed as required, as technology and commercial services evolve.

[Tim Louis, Liberal, Kitchener—Conestoga, ON]

I appreciate your saying that in the rest of my time. Thank you.

As you said, between public consultation and the data we're collecting, I hope to give you the tools you need to carry us forward.

I appreciate your time.

[Ian Scott]

Thank you.

[The Chair, Liberal, Scott Simms]

Thank you, Mr. Louis.

Mr. Champoux, the floor is yours for six minutes.