Canadian Heritage Committee on Nov. 5th, 2020

[The Chair, Liberal, Scott Simms]

All right, let's lower the gavel. Welcome to the session for today.

Welcome, Minister.

I want to start this by describing to everyone who is watching or listening to us publicly that pursuant to Standing Order 81(4) and the order of reference of Wednesday, September 30, 2020, the committee will now consider the main estimates for the fiscal year ending March 31, 2021. Pursuant to Standing Order 81(5) and the order of reference of Thursday, October 22, 2020, the committee will now also consider the supplementary estimates (B) for the fiscal year ending March 31, 2021.

Now I call upon the minister for testimony.

Mr. Minister, we normally give around five to 10 minutes. I understand that you prepared some remarks.

Please proceed.

[Steven Guilbeault, Liberal, Minister of Canadian Heritage]

Thank you, Mr. Chair.

Members of the committee, thank you for inviting me here today.

I'm joining you from Montreal, on the traditional territory of the Mohawks and the other Haudenosaunee peoples.

With me are Hélène Laurendeau, deputy minister of Canadian Heritage, and Jean-Stéphen Piché, senior assistant deputy minister of cultural affairs. I want to thank them for their outstanding work under circumstances that have not been easy in the past few months.

The COVID-19 pandemic is affecting all of us. Its impact on our country is significant in every part of our society.

The Department of Canadian Heritage supports the commitments of the Government of Canada, grows the country's cultural and creative industries, and shares Canada's stories both at home and around the world. As you will recall, the 2020-21 main estimates were tabled in Parliament last February 27. The total funding allocated to my department was $1.5 billion, including $1.3 billion in grants and contributions, and $203.2 million in operating expenses. Heritage portfolio organizations received $2.1 billion in funding.

In early March, we all entered a period of uncertainty. The pandemic hit the cultural, heritage and sports sectors hard. Following the Prime Minister's announcement in April of a $500-million emergency support fund to provide temporary assistance to these three sectors, I announced further details of this funding on May 8, June 18 and July 7.

A survey conducted by Canadian Heritage of the recipients of the first phase of the fund's implementation showed that we met our objectives, both in terms of supporting business continuity and jobs. With a 56% response rate, we obtained a wealth of information. For example, 77% of respondents indicated that the fund helped them a great deal or moderately to stay in business, and the vast majority of respondents, 98%, expressed satisfaction with the speed with which they received the funds.

In rolling out this emergency support fund in record time, in designing all the supplementary measures that went into effect this summer, and in doing so while the department was operating at limited capacity on a business continuity plan, we relied upon our network of dozens of portfolio organizations, thousands of partner organizations, and tens of thousands of stakeholders.

All of these partners contribute to the cultural, heritage and sports sectors which together comprise almost $62 billion of our GDP, contribute 750,000 jobs to the country, and provide us all company, comfort, community and identity in moments like these. Their work demonstrates the power of art, sport, music, literature, and the simple power of telling stories—our stories—in myriad ways.

Since the spring, I have been in close contact with these sectors, which have suffered income losses, job losses and structural changes because of the health measures. To give you an idea of the extent of these losses, according to Statistics Canada, the GDP in the information and cultural industries sub-sector declined by about $3 billion in July compared to February of this year. Similarly, GDP in the arts, entertainment and recreation sub-sector fell by more than 50%.

While this picture is incomplete, it does reveal some vulnerable sectors. This is why I participated in a series of town halls and roundtables to hear from stakeholders, so they could share their ideas about how we can work with them and better support them. Roughly 4,000 participants attended these town halls and roundtables in September and October.

These discussions allowed me to target our assistance more precisely. For example, in September, I announced a $50-million short-term compensation fund to help our film and audiovisual industries resume production activities. The fund will be administered by Telefilm Canada.

Our various assistance measures are reflected in the 2020-21 supplementary estimates (B). The increase in appropriations for Canadian Heritage and its portfolio organizations has made several things possible, including the following: the implementation of the emergency support fund that I mentioned previously; support for students and youth affected by the pandemic; support for the six national museums and the National Battlefields Commission; support for several key cultural organizations, such as the National Arts Centre and Telefilm Canada; and finally, financial relief for broadcasters through a waiver of CRTC licence fees.

Canada's cultural offering is among the best in the world, and I am pleased that our government is supporting it during this critical period.

On Tuesday, I introduced Bill C-10 to amend the Broadcasting Act. This is an important first step in modernizing the Canadian broadcasting system. I also intend to propose other measures to put in place a regulatory framework in which digital platforms contribute their fair share.

We are following developments in France, which has enacted a neighbouring right for newspaper publishers into domestic law. We are also following the situation in Australia and are examining options here in Canada.

In addition, I want to introduce a bill proposing new regulations for social media platforms, starting with a requirement that all platforms remove illegal content, including hate speech. Finally, I am committed to reviewing the Copyright Act.

I would also like to reiterate that our government has made reconciliation with indigenous peoples a priority. That is why, despite the circumstances, we are continuing to implement the Indigenous Languages Act in cooperation with our indigenous partners, and to support their projects to reclaim, revitalize, maintain and strengthen their languages.

Indigenous cultures, arts, heritage and sport are among our key priorities, and we continue to support them.

Thank you, Mr. Chair. I am ready to take your questions.

[The Chair, Liberal, Scott Simms]

Thank you, Minister.

Before we start the general discussion, for the sake of technicalities, I will now call vote 1 under Canada Council for the Arts and vote 1(b) under the Canadian Broadcasting Corporation, which will permit general discussion of the estimates and questioning of our witnesses.

We start with Mr. Rayes.

You have six minutes.

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

Thank you, Mr. Chair, for allowing me to ask the minister some questions. Thank you, Mr. Minister, for taking time out of your busy schedule to come and talk to us.

You have taken the time to talk to us about a new bill to amend the Broadcasting Act. My questions are going to focus on that sector in particular, and my colleagues will continue by asking questions related to our study.

You say you want to make sure that digital media can contribute, like our conventional media, to the Canadian landscape. Could you confirm that Canadian media all invest 5% of their gross revenues in the Canada media fund?

[Steven Guilbeault, Liberal, Laurier—Sainte-Marie, QC]

This varies depending on the type of business. I'm thinking of cable companies, for example. The level of investment in a given market—

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

We're talking about 5% roughly speaking. That's the figure we usually hear everywhere. Can you confirm that?

Your senior colleagues seem to be signalling yes.

[Steven Guilbeault, Liberal, Laurier—Sainte-Marie, QC]

I'm not sure I understand you. Is your question about the Canada media fund specifically?

Several investments are made by—

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

Yes, I'm talking about the Canada media fund.

[Steven Guilbeault, Liberal, Laurier—Sainte-Marie, QC]

Ms. Laurendeau, I don't have the number for the Canada media fund handy. Can you clarify this for Mr. Rayes?

[Hélène Laurendeau, Deputy Minister, Department of Canadian Heritage]

Mr. Piché will be able to clarify that.

[Steven Guilbeault, Liberal, Laurier—Sainte-Marie, QC]

Okay.

[Jean-Stéphen Piché, Senior Assistant Deputy Minister, Cultural Affairs, Department of Canadian Heritage]

In the case of cable and Internet service providers, a 5% levy is used to contribute to the Canada media fund. For other broadcasters, it is a requirement related to spending on Canadian content.

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

That's perfect. Thank you.

During the press conference, Mr. Minister, you pointed out that your bill would result in nearly $1 billion in additional investment by major players in the digital world, such as Netflix and Spotify.

Could you explain how you do this calculation, because when you go through the 55 pages of this bill, there is no mention of a percentage that would guarantee such an investment. The various newspaper articles indicate that it's more like $830 million. When we, on our side, talk to these players, they do not tell us the same figures at all.

So I'd like to know how we can have access to your calculation.

[Steven Guilbeault, Liberal, Laurier—Sainte-Marie, QC]

Thank you, Mr. Rayes.

I'll tell you what the employees of the department did. When you look at the overall investments of Canadian broadcasters, depending on the type and size of the company, as I said earlier, the percentage of their revenues that must be invested in Canadian culture varies between 25% and 45%.

Applying this percentage to the revenues of digital platforms in Canada yields a figure of approximately $830 million. Of course, this is an approximation based on modelling. This is the additional amount that would be invested annually in Canadian and, of course, Quebec culture.

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

Why not just put it in the bill instead of dumping it onto the CRTC? This means that money won't be granted for nine months or more.

What prevented you from putting it in the bill, to ensure that these players in the sector will be treated in the same way as the current players, in all fairness?

[Steven Guilbeault, Liberal, Laurier—Sainte-Marie, QC]

The bill calls for digital platforms to contribute to the sector equitably, as do Canadian distributors and broadcasters.

Why ask the regulator to do this? First of all, it is an independent tribunal of experts. It's not unique to the broadcasting sector, where the legislator asks the regulator to do this kind of work. It's done in the energy field, for example. The government gives direction and passes bills, and the implementation is done by the Canadian Energy Board. This is also done in the legal field. So it's done in several sectors.

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

Perfect. Thank you.

[Steven Guilbeault, Liberal, Laurier—Sainte-Marie, QC]

However, I would like to add another important element.

It has been 30 years since the Broadcasting Act was amended. If the past is any indication of the future, it may not be for another 30 years. Over the years, it is much easier to change regulations than it is to change legislation.

I think that over the next 30 years, our consumption habits, cultural production and technologies will change a lot. If we were to propose a very rigid bill, we might end up with the same kind of problems we have today.

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

Okay.

Nothing in the proposed bill guarantees that a percentage of the production of Canadian content will be in French, as you wish.

When Ms. Joly filed the agreement with Netflix, she was strongly criticized by all the players, according to whom she had done nothing to protect one of the country's two official languages. And yet, you put a lot of emphasis on indigenous people, racialized people, LGBTQ+, among others; you took the time to point that out. What guarantee do Canadian francophones across the country, and not only in Quebec, have that there will be equitable production of French-language content, according to the current wording of the bill?

[Steven Guilbeault, Liberal, Laurier—Sainte-Marie, QC]

Platforms will have obligations with respect to the production of French-language content, as is the case for Canadian broadcasters.

I want to make it clear that many organizations across the country do not share your pessimism. The Fédération culturelle canadienne-française welcomed the minister's wishes. The ADISQ spoke of a historic day. The Coalition for the Diversity of Cultural Expressions thanked the minister for keeping his word and called on all parties to support this essential review—

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

Mr. Minister, I'm going to stop you there—

[The Chair, Liberal, Scott Simms]

Minister, I'm sorry. I have to cut in here. The time is up.

I'm going to have to be a bit more strict on time, folks. For technical reasons, we're running behind time.

Mrs. Bessette, you have six minutes.

[Lyne Bessette, Liberal, Brome—Missisquoi, QC]

Thank you, Mr. Chair.

Good evening, Mr. Minister. Thank you for being here today, especially in light of all the problems that have arisen.

First of all, the sport sector has suffered a devastating financial impact as a result of the cancellation of several events, including competitions. This has led to revenue losses, as well as deficits.

As we talk about recovery, how are you ensuring that the sport sector, both professional and recreational, will remain viable?

[Steven Guilbeault, Liberal, Laurier—Sainte-Marie, QC]

Thank you for your question.

We have done several things. I talked earlier about the $500-million emergency fund. In that fund, $72 million is earmarked for the sports sector. We divided that money into two parts: half of the money went to the national federations, which in turn gave it to their partners, and the other half went to the provinces to help the provincial and regional federations. The federal government is not in contact with these organizations. We have worked with the provinces and territories to ensure that this money is distributed.

Normally, in federal-provincial agreements, funds are spent on a pro-rated basis, but in this case we have tried to maintain the provincial and territorial sport ecosystem. Instead, we have allocated money based on the number of organizations in a province. This means that Alberta, British Columbia, Manitoba and Saskatchewan received a much higher percentage of money than if we had pro-rated the funds. We really did try to maintain the ecosystem.

The Olympic Games have been postponed, which is creating all kinds of problems, as you well know, for the high-performance athletes who are supported by federal funding programs. In terms of funding, we've simply extended the support we provide to these athletes and their entourages until the next Olympic Games.

[Lyne Bessette, Liberal, Brome—Missisquoi, QC]

Thank you.

I have a second question.

I would now like to talk about the second phase of the emergency fund. One of the purposes of this phase was to support organizations that are not normally recipients of Canadian Heritage subsidy programs.

How has your department ensured the participation of these organizations that typically don't receive assistance?