Canadian Heritage Committee on March 23rd, 2022

[John Welsman]

Thank you very much.

[John Nater, Conservative, Perth—Wellington, ON]

Thank you, Mr. Coteau.

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

[Martin Champoux, Bloc, Drummond, QC]

Thank you, Mr. Chair.

I also want to thank the witnesses appearing before the committee today. It's a pleasure to welcome them and benefit from their expertise.

My first question is for Mr. Bischoff or Mr. Forget of the Directors Guild of Canada.

You talked about the difficulties of negotiating, which are mitigated by Quebec's status of the artist legislation, compared to the Status of the Artist Act of Canada.

What would you recommend to ensure that this federal legislation also facilitates your negotiations with producers?

[Dave Forget]

Thank you for the question, Mr. Champoux.

I'll answer in English because I don't want to make any mistakes.

It's quite simple. We're asking for a provision to be included, particularly for first agreements, that there be binding arbitration. If negotiation in the first instance is not successful, what the Quebec law provides for is a binding arbitration that will ensure that an agreement is in place.

We don't have that benefit on the federal side, and the result, as you see from our testimony, was that our first agreement with the NFB was six years in the making. The recent renewal of our agreement—and we're glad that we concluded an agreement—took two years to do.

[Martin Champoux, Bloc, Drummond, QC]

Thank you.

I'll now turn to Mr. Lefebvre, who also addressed the issue of negotiations.

Mr. Lefebvre, what do you think of the Directors Guild of Canada's request?

[Éric Lefebvre]

Arbitration is indeed one of the solutions. In fact, one of our requests was mandatory arbitration, not just for the first agreement but for subsequent agreements as well. It's still a fairly cumbersome exercise, because arbitration means that you have to go to court and the parties have to retain counsel.

I'll give you an example. We negotiated an agreement with the Association québécoise de l'industrie du disque, du spectacle et de la vidéo, or ADISQ, in the phonogram field. ADISQ is the association that represents record producers—that's what CDs were called at the time. The first agreement that was negotiated expired in 1996. Subsequently, we were never able to renew it. We have been negotiating for more than 20 years with an association of Quebec producers that represents sound recording and record producers.

We also hope that the provincial legislation will be amended because it has some shortcomings, including the definition of the word “producer”. There are also gaps in the federal legislation, as I noted when listening to my colleagues.

For example, broadcasters commission television programs from independent producers, who then hire artists. As I understand it, independent producers aren't covered under federal legislation. Canada's Status of the Artist Act covers broadcasting undertakings and federal institutions. If the federal legislation more broadly defined the word “producer”, it would be possible to designate the producer as the one who bears the financial risk. It would be easier to say that we will negotiate with a broadcaster, with CTV, for example, which would be required to negotiate with an artists' association.

Right now, broadcasters are saying that they aren't the producers and that they have no responsibility to negotiate with any association. So they wash their hands of it. If broadcasters had the opportunity to negotiate working conditions, we would indeed find it much easier to ensure that artists could agree to reasonable working conditions. Ultimately, the financial risk is borne by the broadcasters.

[Martin Champoux, Bloc, Drummond, QC]

Mr. Lefebvre, you mentioned broadcasters. This gives me an opportunity to follow up on one of the comments you made in 2018 about the presence of online broadcasters.

What has been the impact of online broadcasters or streaming companies on your profession or specialty?

How will the passage of Bill C‑11 address these shortcomings?

[Éric Lefebvre]

As I understand it, Bill C‑11 will bring online platforms under the authority of the CRTC. This could help the Status of the Artist Act so that online platform operators would become interlocutors. Currently, we cannot send a notice to bargain or ask an online platform operator to come and negotiate with an artists' association. It is currently impossible. We can't establish a legal link.

As you were saying, online platforms have significantly changed the way music and audiovisual works are consumed. In sound recordings, the sale of physical albums has fallen dramatically. A lot of the revenue that was generated by the music industry is now in the pockets of online platform operators outside the country. Just to give you an idea, for every sale of a record costing $25, the producer received $10—

[The Vice-Chair, Conservative, John Nater]

Mr. Lefebvre, I'm sorry for interrupting you, but we have to move on to the next speaker.

Mr. Julian, it is your round for six minutes. The floor is yours.

[Peter Julian, NDP, New Westminster—Burnaby, BC]

Thank you very much, Mr. Chair.

I'd like to thank all the witnesses for being with us today.

I'm grateful for their contribution to Canadian society and the Canadian economy. As artists, they do so in a number of ways.

We hope they will stay safe and sound during this ongoing pandemic.

Mr. Lefebvre, you talked about binding arbitration, and you also raised the issue of covering the costs of artists entering the binding arbitration process. My understanding is that there may be a disadvantage for the artist in the context of arbitration.

Should we find a way to support artists when it comes to binding arbitration?

You also raised a rather serious issue in relation to web giants and streaming companies.

Do you find that tools such as binding arbitration can be useful when it comes to web giants?

[Éric Lefebvre]

I will go back briefly to what I said earlier. It's better to go to arbitration than to have no agreement at all. Our organization is currently in that situation. We have been negotiating with a producer association for more than 20 years, without a collective agreement. Obviously, in such a situation, it's preferable to go to an arbitrator, who will determine the working conditions.

My point was that it's a fairly cumbersome process. However, it's better to have this process in place than to end up with working conditions that are impossible to renew, because the parties remain in their position for years. In general, it's easy for a producer association to stick to its position and not enter into a collective agreement. That doesn't improve the lot of artists and their working conditions.

On the issue of broadcasters and online platforms, right now it's impossible to negotiate with online platforms under the current regime. However, if Bill C‑11 is adopted, it may give us the opportunity to at least engage in some kind of discussion with online platforms on compensation conditions, which are related not only to the use of the works, but also to the performances. This will also allow artists to be remunerated for the use of all the content that ends up on an online platform.

[Peter Julian, NDP, New Westminster—Burnaby, BC]

Thank you very much for your comments.

I'm a New Democrat, and I'm in favour of binding arbitration, but it has to be useful to artists at all stages of the process.

I'm going to go to Mr. Forget and Mr. Welsman now because both of you also mentioned binding arbitration as being essential. Thank you very much for giving us some idea of what it's like to conduct negotiations with the National Film Board and the CMPA.

To what extent do we need to make sure that the binding arbitration is in place, but also that it isn't to the disadvantage of artists, that there are resources available as well? How would that change the Status of the Artist Act to ensure that you're actually getting good-faith negotiations with these institutions?

[John Welsman]

Again, because of my colleague's legal background, I would like John Rowley to respond if he would.

[John Rowley]

Thank you.

With regard to the kinds of support that would be meaningful, this notion of the cost being at the recalcitrant party's expense, in the case where they dig in their heels and refuse to move negotiations forward in a meaningful way, would be be a useful tool to enable an organization such as ours without huge resources to be able to put CMPA on notice to move things along, if the changes are made to the definition of producer, and then, if things aren't moving along, to make an application to the board and have the board step in and impose arbitration.

[Peter Julian, NDP, New Westminster—Burnaby, BC]

Thank you.

Mr. Forget.

[Dave Forget]

I think there's certainly a consensus that having binding arbitration would help the process. What it would do is ensure that a deal was secured.

With regard to the costs, all of those are issues to be considered, but maybe I could frame it this way. The prospect of binding arbitration might be the encouragement that some parties need to come to the table and bargain meaningfully and arrive at a deal. The prospect of binding arbitration might be the thing that ensures that a deal gets made in the old-fashioned way, with a coming together. It certainly would be helpful.

Thank you, sir.

[Peter Julian, NDP, New Westminster—Burnaby, BC]

Thank you.

Mr. Benzie, I'll ask you the same question. With the global platforms, with the web giants, would the ability to have binding arbitration not be helpful for the folks you represent?

[Scott Benzie]

My initial reaction is no. Are you suggesting that individual creators negotiate with their online platforms?

[Peter Julian, NDP, New Westminster—Burnaby, BC]

I'm suggesting that [Technical difficult—Editor] pushes the online platforms to actually provide an adequate income or return to artists.

[Scott Benzie]

Again, it's a really different and difficult question for people in our position. Digital creators cover everything from people making two dollars a month to people making a million dollars online. The ability for each individual creator to arbitrate with an online platform is impractical. Do you want them to arbitrate with each individual platform? They all have different discovery models.

There are easier solutions to problems with online creators—

[The Vice-Chair, Conservative, John Nater]

I do have to end it there, Mr. Benzie and Mr. Julian. Thank you for that round.

We will now move to our second round of questioning. This is the five-minute and two-and-a-half-minute round. I will be very tight with the timing on this round. We have limited time and we want to get through the whole round.

We will start with the Conservatives.

Rachael Thomas, the floor is yours for five minutes.

[Rachael Thomas, Conservative, Lethbridge, AB]

Thank you.

Mr. Benzie, I will direct my questions to you. I want to thank you for being here. I believe it's important for us to hear about digital first creators, because it's something [Technical difficulty—Editor] definitely not given enough space or time to within Parliament. Certainly, these are individuals who are helping to shape the culture of our country.

You outlined in your remarks that of course digital creators are punching above their weight. I think they deserve a great deal of celebration in that regard. At the last committee, we were able to hear from Darcy Michael and Oorbee Roy. They both came forward and shared their success stories, which was very inspiring for us.

During his time, Darcy Michael expressed some concerns with regard to Bill C-11, the streaming act, and if it should pass, the fact that it would have quite detrimental consequences for him. Of course, the same would be true for Ms. Roy and many other digital first creators as well.

Mr. Bittle at that time berated Mr. Michael here at committee. However, he wasn't satisfied, I guess, so he took it to Twitter. On Twitter he accused Darcy of parroting “misinformation” about Bill C-11.

I guess what I'm wondering from you, Mr. Benzie, is this. You're someone who has reviewed Bill C-11 in depth. You're someone who I believe is an authoritative voice—it's quite evident—with regard to digital first creators in Canada. Can you provide some further insight? Will Bill C-11 impact digital first creators or will it not?

[Scott Benzie]

Thank you, Mrs. Thomas.

To address the first point, about creators coming to committee, I'd like to thank the committee, actually, for having us involved, finally, in these discussions. Digital first creators don't have lobby groups. We don't have associations.

That's why, Mr. Julian, negotiating with the platforms is just impractical for us. We don't have teams of lawyers and lobby groups who can put all that together.

You know, for those creators to step forward and tell their stories I think is really important, and I think it's important for everybody to hear them. Things are changing in our cultural world. I'm hopeful that they'll come back. I'm hopeful that, going forward, we're treated with the same respect as my other colleagues here on the call. That's all I'll really say about that.

With regard to throwing around terms like “misinformation”, the fact of the matter is that Darcy was absolutely correct. This bill will have a dramatic impact on digital first creators. An argument can be made that user-generated content is absolutely still in this bill. That exemption, clause 4.2(2)(a), is far too vague. It's far too broad. There are no guidelines. It basically includes the entire Internet. I'm hoping that when you guys start to debate Bill C-11, we're welcomed back to this table to have that discussion.

I'll add one last point. I've heard terms like “parroting misinformation” myself in conversations with heritage members and with other MPs—that we just don't understand the bill, or we're not smart enough to understand the bill, or we don't get it, or we're just parroting misinformation. It's condescending and it's not true. Hopefully, you'll listen to us when we're having these conversations going forward.

[Rachael Thomas, Conservative, Lethbridge, AB]

Mr. Benzie, thank you for your answer to that. I want to give you an opportunity to expand on that a bit more.

We have heard from the heritage minister that in no uncertain terms does Bill C-11 include user-generated content, that Bill C-11 has fixed that mistake that was in Bill C-10. I guess I'm just wondering what your response to that would be.

[Scott Benzie]

Well, it's not true.

I don't want to attribute everything to malice, because sometimes it's just ignorance and not understanding this. Our world is very complex. As the minister has said, 4.1 excludes social and digital content. In that bill, 4.2 brings it all back in. The framed “sandbox”, as he called it, that would give the CRTC jurisdiction over that bill is actually the Sahara Desert.

I think the first point in that exclusion is any content that “directly or indirectly generates revenues”. That's the entire Internet. That's everything, because even if creators are creating something that they're not making money on, platforms are running ads against it, so it's generating revenue. Anything that has an internationally recognized code is literally any piece of musical content that has ever been produced and has a grid code, so if my niece is singing a Shawn Mendes song in her basement, by the letter of the bill, that could be covered, with CRTC discretion, in the bill.

I think the minister and his team have said a lot of great things about the bill, and to my colleagues, I think this bill is important to you. There is just this issue about digital first creators and user-generated content that doesn't need to be in it.