Evidence of meeting #40 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 amendment.
A recording is available from Parliament.
Conservative
Conservative
Scott Aitchison Conservative Parry Sound—Muskoka, ON
I'm wondering if Ms. Dabrusin could focus on the actual amendment instead of what another Conservative member has said to her local media.
Liberal
The Chair Liberal Scott Simms
Mr. Aitchison, as you know, I like for those to build an arc around what they want to talk about.
Folks, can we just zero in here on focusing on the amendment itself?
I'm assuming, Ms. Dabrusin, that you were coming around to that point.
Liberal
Julie Dabrusin Liberal Toronto—Danforth, ON
I was. I appreciate that, Mr. Chair, because it goes to the point about contributions to the funds, which is actually what this amendment goes to.
If I may, I'll just complete it to make sure that it's clear what I believe the actual background is to this amendment. Then I will have a question, actually, beyond that.
She continued to say, “Because, at the end of the day, if Canadians did want it then there would be a market for it. And if there was a market for it then these artists would get paid based on the market.”
Basically, in that quote there is a huge disrespect, a tremendous disrespect, for our cultural production funds and for our artists.
As I pointed out, there is that background to it, as well as the fact that this is something the committee has already considered. I was wondering if perhaps the department could help me to better understand what the impact of this amendment would be. What would be the net impact of allowing this amendment to proceed?
Liberal
The Chair Liberal Scott Simms
I'm going to look to our officials and seek out a volunteer.
Mr. Ripley, welcome. Go ahead.
Thomas Owen Ripley Director General, Broadcasting, Copyright and Creative Marketplace Branch, Department of Canadian Heritage
Thank you, Mr. Chair.
Thank you for the question, Ms. Dabrusin.
Based on what I understand the amendment to be, the starting point in the bill currently is that the CRTC should only regulate online undertakings if it's of the opinion that they will contribute in a material manner to the fulfillment of the policy objectives of the Broadcasting Act.
The bill, as it was tabled, recognized that if the CRTC came to the conclusion that if a service did not have sufficient subscribers or viewers in Canada, or it wasn't making sufficient revenue, the CRTC's starting point is that they should not regulate those services.
If I understand the amendment correctly, what's being proposed to the committee is that in addition to that, as it currently stands, Parliament would essentially make an exclusion of services—online undertakings is the term used in the amendment—with a specific subscriber base and revenue base. If I understood correctly, it's 500,000 subscribers or less than $80 million per year in a variety of different kinds of revenues. If either one of those was triggered—because the amendment uses the word “or”—the CRTC would not be able to impose regulatory contributions on those services.
In essence, Ms. Dabrusin, it would be Parliament making a call off the top, so to speak, that services that don't meet these thresholds should not be subject to contributing to the cultural policy objectives of the act.
Liberal
Anthony Housefather Liberal Mount Royal, QC
Thank you, Mr. Chair.
I have some questions for Mr. Rayes, too. Indeed, I am not sure yet whether I am for or against the amendment, but I would like to hear from Mr. Rayes on this, because I am willing to discuss it.
What I don't understand is why companies with fewer than 500,000 subscribers or less than $80 million in revenue are excluded, rather than those that meet both criteria.
Let's take the example of a company that has 495,000 subscribers and earns $2 billion, because its service is very expensive. Shouldn't a company that makes $2 billion be considered important enough to be included?
It's the same for a company that has 30 million subscribers in Canada, but gets very little revenue from advertising, signup, usage, or subscription, because it has a different revenue stream than those listed.
So why are we excluding companies that meet either of the two criteria? I don't understand that. I would like Mr. Rayes to clarify that.
Conservative
Alain Rayes Conservative Richmond—Arthabaska, QC
Thank you, Mr. Chair.
My colleague Mr. Housefather's question is very relevant. If we had set these thresholds ourselves, we would have been told that it was a partisan exercise. In a previous comment, Ms. Dabrusin tried to attack us on this issue. Yet I had taken pains to point out to the members of the committee that this recommendation came from a former CRTC chair and commissioner.
I will go even further, with respect to this proposed amendment that Ms. Dabrusin was attacking. By the way, this is an amendment, so we're going to debate it and questions are going to come up. In fact, Mr. Housefather just asked a very good question. So this is a democratic exercise. We too were elected democratically and we represent the citizens of our ridings. Those people have a right to have a voice, even if they do not share the opinion of the government or of the minister who introduced this bill.
To take it a step further, I would point out that Australia has set even higher thresholds. Instead of 500,000 subscribers, it's 1 million, and instead of $80 million in revenue, it's $100 million. The country that's being held up as an example right now has set even higher thresholds by using the word “or” in their law. Australia has done exactly what we are proposing, but has set the bar even higher.
I think the amendment we are proposing is legitimate. In any event, it deserves to be discussed in this debate.
I have one last brief clarification in response to Mr. Housefather's question. My background is as a math and computer science teacher as well as a manager, as a school principal. So I have managed budgets. I don't want to get into the semantics of the French language on the issue of “ou” and “et”, but it's illogical to think that someone with 300,000 subscribers, for example, could generate $2 billion in revenue. The figures proposed in the amendment take into account the fact that companies like Netflix have higher revenues than those that are in business and have a certain number of subscribers. We're talking about Canadian men and women with small businesses sharing content on social networks in a somewhat parallel way.
I like to say this a lot, because I feel that as parliamentarians in Ottawa, we are sometimes in our own bubble, and I include myself in that. You've heard me talk about this many times, I've given the example of my children, friends and others. Governments are almost always behind in regulation because it's done by people sitting in offices. In the digital sphere, there is a parallel world that doesn't work the same way. These people are pressuring us, but they are not using lobbyists and they are not necessarily trying to get money from governments.
This is not to say that we are against artists or against giving them grants to help them, far from it. Some of them need the help. When I was mayor, I put in place a $24‑million project for a performance hall. There were showrooms for virtual artists. As we know, these artists can't live without subsidies. Presenting shows to develop art among children or specific groups is impossible without subsidies, because it is not profitable. Without subsidies, we would only present comedy shows. That's a reality.
That being said, other comparable companies are doing well, and don't want the government to interfere with the process, as it would require paperwork and accountability, and make the CRTC process more cumbersome. We see this happening with fees right now. It's being given too much decision-making power.
Although the numbers look large, I don't think my proposal today is irrational at all for two reasons. First, it is based on thresholds recommended by a former CRTC chairman and commissioner. Secondly, the thresholds are below the thresholds that Australia is proposing and that are being used as benchmarks right now, since Australia is the first country that has chosen this direction.
I want to say that this was not our first wish. You know that section 4.1 that was originally proposed in the bill was more important to us. Since that was not accepted, we think that these thresholds would provide some kind of social safety net and protection.
Liberal
The Chair Liberal Scott Simms
Okay, Mr. Rayes. I was loath to interrupt, but you were answering the question for Mr. Housefather. I think you've done that sufficiently.
Mr. Housefather, were you done? Okay.
Mr. Waugh, you have the floor.
Conservative
Kevin Waugh Conservative Saskatoon—Grasswood, SK
Mr. Chair, let me put some context to this amendment.
You will remember that Mr. Chan of Facebook came to committee. I asked him this question. Do you know that Facebook is used today for broadcasting? This is where this amendment came from. I know hundreds of former broadcasters who have been laid off or let go who now have a show on Facebook, a one-hour show, or maybe two- or three-hour shows—Bob McCown, Rod Pedersen, Don Cherry—and this is where the amendment comes from, Mr. Housefather.
Mr. Chan could not answer my question when he came to committee with a Facebook group in February as I asked Facebook the question: Do you know people are using Facebook as a broadcasting tool? They're selling advertising on Facebook for their shows. They have subscribers. He claimed he knew nothing about this, which I found hard to believe, but this is where this amendment comes from.
Then I flagged it with our side, saying this is going to explode because what's happening is these people are entrepreneurs and to keep their hand in the broadcasting industry they've taken to Facebook to do these shows.
Mr. Ripley, you were correct when you answered that. This amendment by Mr. Rayes talks about this.
Do we want the CRTC regulating everyone with 10 subscribers and $1,000 coming in? No, we don't want that. This figure arrived from the Australian figure, more or less. We went to the former commissioner of the CRTC and vice-commissioner and asked. This is a big issue in this country. You know it's going to get more and more common as we see less and less conventional broadcasting, whether it's radio or TV stations going dark. This is something that has been coming for the last three or four years on social media. I flagged it in February with Mr. Chan, who claimed at the time Facebook knew nothing about it.
Therefore, this amendment is very important to the Broadcasting Act. I would say it's one of the most important amendments that we can make, because people in this country are using Facebook to generate subscribers. They're using Facebook to generate money and advertising, which according to Mr. Chan is fine.
I'm going to back up what Mr. Rayes said, and just in layman's terms this is where this amendment came from. In the discussion, Mr. Chair, that we had with Facebook officials in February or March, when they came, I flagged this because I see many people in this country making money off Facebook, which is fine, but are we going to over-regulate them with the CRTC, or is there going to be a threshold? We think that 500,000 subscribers and $80 million per year is the threshold.
If I can give you some context on the amendment, here it is. It was through the questions that I posed to Mr. Chan and Facebook that we felt this amendment had to be included in the regulations.
NDP
Heather McPherson NDP Edmonton Strathcona, AB
Mr. Chair, I have a couple more questions for Mr. Rayes before I go forward.
First of all, he talked about the thresholds and I think I would want to amend that, because in my mind, I think we also don't want to exclude those who want to be part of this, and that's something I'm going to ask him about. Does he have any statistics on how many are above and how many are below that threshold? Also, has he had any conversations with the cultural sector? Has he asked any of the cultural sector or the artists who are impacted by, say, YouTube, what they would suggest in terms of this amendment?
I also have a question I'd like to ask Mr. Ripley. I'll just get them all out and you can manage all of my requests as you see fit, Mr. Chair.
The question I have for Mr. Ripley is, would the exclusion apply to all of the act and not just the requirements to make a financial contribution? For example, every reference to an online undertaking in the act would exclude those who do not meet this threshold. Is that correct? I guess that is what I'd like a little more clarity on.
Liberal
The Chair Liberal Scott Simms
There are two questions. The first one is for Mr. Rayes.
Would you like to take the floor, Mr. Rayes, to answer, or should I go to Mr. Ripley?
Conservative
Alain Rayes Conservative Richmond—Arthabaska, QC
Mr. Chair, I don't have the statistics that Ms. McPherson is asking for, but I can try to find them. If you give Mr. Ripley the floor before me, that will allow me to see if I am able to find them. If not, that will be for another time.
Liberal
Director General, Broadcasting, Copyright and Creative Marketplace Branch, Department of Canadian Heritage
Thank you, Mr. Chair.
Thank you for the question, Ms. McPherson.
Based on what I understand the amendment to be, it begins with “This Act does not apply in respect”, and then it moves into the various thresholds. That means if an online undertaking did not meet those thresholds, it would not be subject to the act at all, so that would not be subject to the CRTC's jurisdiction with respect to any of its regulatory powers, whether that's seeking a financial contribution, whether that's its information-gathering powers or its administrative monetary penalties regime. All of those tools would not be applicable.
Liberal
The Chair Liberal Scott Simms
We'll go back to Mr. Rayes. Do you want to respond once more, or shall I go back?
Conservative
Alain Rayes Conservative Richmond—Arthabaska, QC
I would love to answer the question, but I am not in a position to do so now. If I may, Mr. Chair, I will try to get back to it later, if I can get the information.
If not, Ms. McPherson, unfortunately that will not be for today.
Liberal
NDP
Heather McPherson NDP Edmonton Strathcona, AB
Thank you.
I just wanted a little clarification, Mr. Rayes. I know that asking you for statistics is a little bit unfair in the moment, so I'm happy to let you have some time on that, but did you actually consult with the cultural sector before drafting this amendment? I just didn't get around to that one question.