Canadian Heritage Committee on May 30th, 2022

[Lisa Hepfner, Liberal, Hamilton Mountain, ON]

I know it may be straightforward and simple, but could you describe for us why it's important to support local independent broadcasters as well as the big guys?

[Joel Fortune]

Luc, do you want to go with that?

[Luc Perreault]

To be honest with you, we're looking at this in a more global perspective, because streaming services are offered in over 110 countries and we have over 130 million subscribers.

Negotiations are going well, but to a certain extent, some platforms are now moving toward exclusive categories. For example, one platform will do a deal with a large music provider, and this will become the only music provider on that platform. All other music services, like Stingray, for example, would be excluded. That means we're going to make less money, but also that all of the content we offer—and a lot of Canadian content—won't be available, neither here nor on the international scene.

That's why Ofcom in the U.K. said they were going to stop this and make sure that in the U.K., even if some exclusives deals are made, for categories or genres, British content will be made available.

[Lisa Hepfner, Liberal, Hamilton Mountain, ON]

Could you expand a bit on that point.... I lost my train of thought there.

Okay. Let me move on to CUPE.

The Broadcasting Act dates from 1991. Can you tell us how this act has protected arts and culture in Canada? Has the Broadcasting Act played an important role in Canada?

[Nathalie Blais]

Thank you for the question.

In fact, this act was fundamental. If it hadn't been for the current Broadcasting Act and the CRTC regulations, there probably wouldn't be any local news on regional television stations.

When I first became involved with my union in the mid-2000s, local stations had Canadian programming obligations that were down to three hours and ten minutes a week. As you can imagine, that's very little Canadian content per day. Through efforts and interventions before the CRTC during licence renewals, we succeeded in having the minimum requirements of Canadian programming increased to five hours. It was still a struggle. I would not say that the act is perfect in this regard.

That is why we are asking that the provisions of the Canadian broadcasting policy be strengthened with respect to employment in Canada and the funding of local information and community television. Currently, the CRTC has no real regulatory power to create production funds. It does so on an individual basis or when it initiates large processes that concern, for example, all cable companies. I think that's when the first version of the Canada Media Fund was created, around 1993. The ideal would really be to have provisions in the Broadcasting Act, through the proposed new subsection 11.1(1), that would allow the CRTC to allocate funding to local news or community television.

[The Chair, Liberal, Hedy Fry]

Thank you, Madame Blais.

I will now go to the Bloc Québécois and Monsieur Martin Champoux for six minutes.

[Martin Champoux, Bloc, Drummond, QC]

Thank you, Madam Chair.

I would like to thank the witnesses very much for being with us today. Once again, their testimony is very enlightening and their opinion is very useful to us.

I'll start with Ms. Blais.

I'd like to talk about paragraph 3(1)(a) of the Broadcasting Act. Bill C‑11 already proposes an amendment to this paragraph, which deals with Canadian ownership. The proposed version is as follows:

(a) the Canadian broadcasting system shall, with the exception of foreign broadcasting undertakings providing programming to Canadians, be effectively owned and controlled by Canadians;

In your proposed amendment, you suggest deleting the exception mentioned in the bill, in order to include all broadcasting undertakings operating in whole or in part in Canada.

Ms. Blais, could you tell me what your intention is in suggesting this amendment to proposed paragraph 3(1)(a)?

[Nathalie Blais]

First of all, the reason we suggest deleting the end of the wording proposed in Bill C‑11 is that we believe it introduces uncertainty as to the limits of the Canadian broadcasting system. A court could be led to believe that foreign broadcasting undertakings are not part of the Canadian system. We also believe that the reverse could be true. There is uncertainty in this regard, and it could in some ways make the issue worse. Indeed, if the provision were to be amended, the question could arise as to how Canadian ownership and control should be interpreted. This issue has already been decided by the Court of Appeal in 1998. At that time, the Court of Appeal stated that Parliament had not limited the field to Canadian-owned and controlled broadcasting undertakings, but rather had provided that the Canadian broadcasting system must be, in effect, owned and controlled by Canadians.

In our view, amending paragraph 3(1)(a) of the Broadcasting Act to try to include foreign undertakings may be shooting ourselves in the foot, when the provision already allows for some foreign ownership.

In fact, in the report published in 2003 by the Standing Committee on Canadian Heritage, which was chaired by Mr. Clifford Lincoln at the time, the calculation was made based on the definition of control in fact and it was concluded that 46.7% of Canadian broadcasting undertakings could be foreign-owned without affecting Canadian ownership and control of the system.

There are between 600 and 700 broadcasting undertakings in Canada. We therefore believe that there is sufficient room for the addition of foreign-owned undertakings operating in whole or in part in Canada. There is no need to amend paragraph 3(1)(a) of the Broadcasting Act other than to perhaps clarify what the broadcasting system is, now that our system is no longer closed.

I don't know if my colleague would like to comment on that.

[Martin Champoux, Bloc, Drummond, QC]

I would rather we now talked about another provision, Ms. Blais, since my time is rather limited.

I wanted to hear what you had to say about proposed paragraph 3(1)(f). In my opinion, this is an extremely important provision. The amendment you're suggesting is also very important because of the nuance it tries to address or remove.

I don't know if you're familiar enough with this provision to tell me about it, but proposed paragraph 3(1)(f) talks about maximizing the use of Canadian human and creative resources. However, the end of the wording proposed in Bill C‑11, if I'm not mistaken, allows for some flexibility in the case of foreign undertakings.

Can you explain to me why you want to delete that part of the proposed wording?

[Nathalie Blais]

It is because it introduces exceptions. Basically, we are telling the CRTC that Canadian resources must be used predominantly and maximally. So there is already a great deal of flexibility. For it to be predominantly Canadian, it would have to be 51%, for example, whereas the maximum is 100%. In other words, we mention to the CRTC that between 51% and 100% of workers in broadcasting undertakings must be Canadian, unless the language or format does not lend itself to it, and so on.

As a result, employment issues are never really well considered by the CRTC. I mentioned local news earlier. In addition, according to the CRTC reports, there are many undertakings that simply do not have Canadian workers. There is also minimal monitoring of jobs. How many jobs are there? In what fields do these people work? What do they do? Do they really work in broadcasting? All of this could be improved if the CRTC had a stronger responsibility.

In short, if paragraph 3(1)(f) no longer contained this conditional element, having a majority of Canadian workers would really become a key objective.

[Martin Champoux, Bloc, Drummond, QC]

That would also make it a slightly stronger provision.

[Nathalie Blais]

That's right.

[Martin Champoux, Bloc, Drummond, QC]

Thank you, Ms. Blais.

Mr. Perreault, in your opening remarks earlier, you spoke in particular about services related to paragraph 9(1)(h) of the Broadcasting Act. In this regard, we think a lot about APTN. I think that's the example we use most often, because it's pretty clear to everyone.

What will happen if your proposed amendments to paragraph 9(1)(h) are not adopted? What consequences can we expect if these amendments are not adopted?

[Luc Perreault]

I'll draw a parallel with what the Federal Communications Commission is trying to do in the United States.

As the big digital companies take over more ratings, local stations in the United States are saying that they have to reach out to citizens and present local news on these big platforms. Because it's IP technology, you can very easily put local news on a platform like Netflix or Amazon, because it's manageable.

So when you hear local television stations in the United States say that to the Federal Communications Commission—

[The Chair, Liberal, Hedy Fry]

Monsieur Perreault, can you please wind up that sentence, because we're out of time.

[Luc Perreault]

In Canada, we have decided as a country to equip ourselves with services like APTN and TV5. So these services should also be made available.

[Martin Champoux, Bloc, Drummond, QC]

Thank you very much.

[The Chair, Liberal, Hedy Fry]

Thank you, Martin.

We'll now go to the New Democratic Party and Mr. Peter Julian for six minutes please.

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

Thank you very much, Madam Chair.

Thank you to the witnesses for being here today.

Your testimony shows that while there are improvements to be made, the overall intent of the bill is important. For our committee, that's a really important aspect to consider: we can propose amendments to improve the bill, but the bill, in principle, is going to do some good things.

I will first turn to Mr. Valin-Landry and Ms. Blais. I'd like to address some questions about Canadian jobs and paragraph 3(1)(f) of the Broadcasting Act.

Of course, some people are proposing that paragraph 3(1)(f) be strengthened so as to add a real obligation to Canadian jobs.

Can you explain the importance of this issue? In fact, if no amendments are made to this paragraph, what will be the result?

[Nathalie Blais]

Actually, I think it's important to reduce the uncertainty in paragraph 3(1)(f). This paragraph has been in place for years, since 1991. Earlier, I mentioned that around 2003 or 2004, local television stations were down to three hours and ten minutes of local programming per week, whereas they used to have 22 hours in the 1990s. This is proof that this paragraph has not given the CRTC enough impetus to ensure that both Canadian programming and Canadian jobs are maintained.

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

Thank you very much.

So not looking at that could be a problem for Canadian jobs.

[Nathalie Blais]

Yes. I think that could effectively maintain the CRTC's inertia with regard to jobs.

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

Okay, thank you.

I'll now turn to the Independent Broadcasters Group, Mr. Perreault and Mr. Fortune.

You talked about a level playing field. In the context of this bill, how important is it to have a more level playing field, when there are discussions between independent broadcasters and the major communications companies in Canada?

[Joel Fortune]

Let me try to start, Mr. Julian.

There's a gap now in the bill. That's the main thing. That's our key point—there's a gap. Right now the Broadcasting Act clearly covers the activities of cable and satellite companies. They're called distribution undertakings. It's clearly covered in the act. There's a regulatory regime and ultimately the CRTC has clear jurisdiction to ensure that all players are treated fairly and that everybody makes an appropriate contribution to Canadian broadcasting.

Bill C-11 goes a little bit along that path, but it doesn't create a similar environment for online distributors. These are the platforms like Roku and others that make available programming services with third parties on their platforms. Increasingly, our own Canadian cable and satellite companies are going to take this route. They're going to take their services online. They're going to use the Internet to deliver third party programming services.

Our concern is that the commission will not have the same type of authority in that environment that it has now in the cable and satellite environment. Ultimately, I think we're going to look at a substantial weakening of how Canadian programming services are delivered to Canadians in our own market. I think you heard from Mr. Danks last week that access by Canadian services to the domestic market is really a precondition for global access on these platforms. We need to use our own market to our own advantage, and to that end we need sufficient authority to make sure Canadian services are present and treated fairly.

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

Thank you very much for that.

I will go on to Ms. Auer.

You raised the issue of the CRTC responding in a reasonable way. That is obviously a concern. I wanted you to respond a little bit more in depth in terms of where you see the problems with the CRTC responding in such an important area of jurisdiction. The fact that they are not responding within a reasonable period now is a matter of concern, there is no doubt.

How do you see the CRTC responding in a more timely manner? You've suggested amendments to the bill, but are there other things as well the CRTC should be doing so that they respond in a timely way to the important issues that are before them?