Canadian Heritage Committee on May 31st, 2022

[The Chair, Liberal, Hedy Fry]

I call the meeting to order.

Good afternoon.

Welcome to meeting number 27 of the House of Commons Standing Committee on Canadian Heritage.

I would like to acknowledge that this meeting is taking place on the unceded traditional territory of the Algonquin Anishinabe people.

Pursuant to the order of reference on Thursday, May 12, the committee is meeting to study Bill C-11, an act to amend the Broadcasting Act and to make related and consequential amendments to other acts.

Today's meeting is taking place in a hybrid format pursuant to the House order of November 25, 2021. Members are attending in person and on Zoom.

As per the directive of the Board of Internal Economy, those who are in the room must wear a mask. I would like to add that you may speak with a mask on—the clerk does so all the time.

I would like to make a few comments for the benefit of the witnesses and members.

Please wait until I recognize you by name before speaking. For those on Zoom, if you look at the bottom of your screen, you can see the microphone icon. Click on it to activate your mike, and please mute yourself when you're not speaking. You have a choice at the bottom of your screen for interpretation. There is a little globe, and if you press it you can get interpretation in the language of your choice. For those in the room, you know that you can use the earpiece on the desired channel.

Do not take any photographs of this meeting, please.

Everything you do must be directed through the chair.

I want to welcome the witnesses. Thank you very much for taking the time to come to this meeting today.

We have Justin Tomchuk, a producer who is appearing as an individual. We have Carol Ann Pilon, executive director of Alliance des producteurs francophones du Canada; Kevin Desjardins, president, Canadian Association of Broadcasters; and Wyatt Sharpe, host of The Wyatt Sharpe Show.

Just for the sake of the witnesses, each organization has five minutes to present. I will give you a 30-second sign so that you know you should be wrapping up. You will have time during the question and answer session to finish your thoughts, if you didn't get to finish them in the five minutes.

We will begin with Justin Tomchuk for five minutes, please.

[Justin Tomchuk, Producer, As an Individual]

Thank you, Madam Chair.

My name is Justin Tomchuk. I'm a filmmaker, musician and entrepreneur based in Montreal. Along with my fiancée, I run two YouTube channels with sizable followings.

We produce what is known as user-generated content. Since our productions derive revenue “directly and indirectly”, as described in proposed paragraph 4.2(2)(a) of Bill C-11, it's clear that we would fall under the umbrella of the proposed regulations.

The first YouTube channel we operate covers how Canadian products are manufactured. The first company that we featured was a new business in Montreal that makes handmade candy. All videos that we made with them have gone viral, with their most popular one achieving 30 million views. From that, their company has made a ton of international sales and became well known online to the point that American tourists were crossing the border just so they could visit their shop in person.

We’ve since featured a guitar maker in Montreal whose video is approaching 10 million views; a cutting board company in Nova Scotia that reported a huge spike in online sales; and a maple syrup farm near Ottawa that received a wholesale order from as far as Kuwait. Some of our videos were shot entirely in French and still received millions of views from a mostly American audience.

All these videos were shot out of our own pocket, qualifying for no available arts funding, and despite that, they accomplished all of this economic activity. We never received any government funding whatsoever, because we don’t qualify for it. Either our productions are deemed too small and we’d lose the intellectual property of our content, such as with the NFB, or we disqualify from arts funding because our productions are commercial in nature. In fact, because our business pays tax, we contribute funding to these programs that exclude us.

The second YouTube channel that we operate is a series of animated shows, and the majority of revenue is derived from merchandise sales such as clothing, posters, toys, vinyl records, etc., products that I source myself, some of which are from Canadian manufacturing companies. These products are exports and bring revenue into Canada and into manufacturing jobs.

Our channels have highlighted Canadian products for the world to see and purchase. Unfortunately, Bill C-11 would make that more difficult and potentially destroy our visibility internationally.

Bill C-11 implies vague changes to these platforms to prioritize Canadian content to Canadians, but it would in turn deprioritize Canadian content to an international audience. The social media platforms cannot allow Canadian content to enjoy heightened exposure to Canadians without detracting exposure internationally, as it creates an uneven playing field on the platform. Less Canadian content would be shown globally as a result.

Second, the recommendation algorithms consider whether a viewer stays to watch the content and for how long. Forcing Canadians to watch CanCon content through recommendations will result in lower audience retention, as the recommendations would no longer be based on their interests. This further deranks a video’s standing and damages its visibility. Thus, this bill would hurt the exact content it is trying to promote.

Ninety-seven per cent of our viewers are international. Bill C-11 would make Canadian content a mirror instead of a window. It would stifle independent productions, result in more piracy, breed resentment among consumers and make it more difficult to attract an international audience to purchase Canadian products.

Proposed subparagraph 4.2(2)(a) needs to be removed from Bill C-11. Bill C-11 needs to make the distinction between paywalled premium distributors such as Netflix and user-generated social media platforms such as YouTube. The bill should be scrapped entirely, as it makes any online undertaking available in Canada, regardless of size, burdened with the obligations of the CRTC, which would reduce access of international content to Canadians. If this bill comes to pass, other countries may see it as precedent to adopt similar regressive laws, resulting in less Canadian content being shown internationally, effectively destroying any homegrown media and making it harder for even legacy media, not just digital creators like myself, to have access to emerging, premium, international distributors.

A solution to the problem Bill C-11 is trying to fix is to make streaming platforms give consumers the ability to filter content by region so that Canadian content can be shown when it’s sought and not by force. If we are concerned with how these social media companies are impacting us as Canadians, we should legislate transparency into how the algorithms recommend content before we enforce changes to them and damage an entire thriving online industry.

Thank you.

[The Chair, Liberal, Hedy Fry]

Thank you very much. You did have a few seconds left.

I'm going to the second witness, the Alliance des producteurs francophones du Canada and Carol Ann Pilon.

Ms. Pilon, you have five minutes, please.

[Carol Ann Pilon, Executive Director, Alliance des producteurs francophones du Canada]

Thank you, Madam Chair.

Good afternoon.

Thank you for the opportunity to contribute to the process leading to the necessary passage of Bill C‑11.

My name is Carol Ann Pilon. I am the executive director of the Alliance des producteurs francophones du Canada, or APFC, an organization that brings together independent French-speaking producers in Canada's official language minority communities.

For more than 20 years, the APFC has been working to help the French-language screen industry thrive and gain exposure in Canada and abroad. Our mission is to showcase the outstanding content our members produce, and advocate for its cultural and economic significance by engaging with policy-makers to ensure the expression of diverse francophone voices across the country.

On February 2, the APFC welcomed the historic scope of Bill C‑11 and its impact on Canada's audiovisual ecosystem. The APFC was especially pleased to see the return of the requirement to formally consider official language minority communities, which will apply to the entire broadcasting system going forward.

The pressure on the audiovisual sector is growing, as is the inequity. Foreign production is on the rise, more and more people are unsubscribing from traditional services, online consumption has skyrocketed since the pandemic, and the companies benefiting from that growth still don't have to make a significant contribution to Canadian expression or the objectives of Canada's broadcasting policy.

If the goal is to establish a system that is truly inclusive, fair and diverse, the government must move swiftly to regulate any company carrying out broadcasting activities, in whole or in part, in Canada. That includes social media and telecommunications companies.

The APFC is a member of the Coalition for the Diversity of Cultural Expressions, whose representatives the committee heard from last week. We agree with the measures the coalition is recommending to make Bill C‑11 a better piece of legislation.

One of those recommendations is to bring back the terminology used in Bill C‑10. In particular, the expression “official language minority communities” should be reinstated in Bill C‑11, which instead refers to “English and French linguistic minority communities in Canada”.

There is absolutely no denying the minority context of French in North America, but in recognizing that fact in Bill C‑11, the government has created ambiguity about the meaning of the expression “French linguistic minority communities”. It could be interpreted to include francophones in Quebec, who obviously make up the majority in that province, and the provisions in question would then apply accordingly.

Keep in mind that Canada's broadcasting system is based on two language markets, English and French. The possibility of francophones in Quebec being considered a linguistic minority community could undermine the recognition and legitimacy of the two language markets.

Not only would that be unacceptable, but it would also represent a detrimental step backward for the rights of minority francophone communities and Canada's entire francophone population.

The way to avoid all ambiguity is simple. Bring back the term “official language minority communities”, and add a definition making it clear that the term refers to English-speaking communities in Quebec and French-speaking communities outside Quebec.

Similarly, we want the term used in Bill C‑10 “original programs in French” to replace the term currently used in Bill C‑11 “original French language programs”. This change would ensure that original content dubbed into French or containing French subtitles was not confused with original content that was originally produced in French.

The APFC also supports the amendments proposed by the Association québécoise de la production médiatique and the Canadian Media Producers Association. The amendments are aimed at ensuring that Canada's independent producers are able to negotiate fair and equitable commercial agreements for the content they develop and produce. Most of the independent producers the APFC represents are small and medium-sized businesses. If left to their own devices, they would have no leverage in dealing with the major broadcasting groups and foreign online companies, the broadcasting gatekeepers that make billions of dollars in profits every year. It is paramount that the CRTC step in to offset and regulate such a glaring imbalance to give Canadian companies the ability to own their own content and grow over the long term.

The modernization of the Broadcasting Act has been a long time coming, and the bill can still be passed at third reading before the House of Commons rises. Let's make sure the bill is grounded in reality.

Thank you.

I would be pleased to answer any questions you have.

[The Chair, Liberal, Hedy Fry]

Thank you.

I didn't mean to cut you off. You did have a couple more seconds left. Thank you very much, Ms. Pilon.

We go now to the Canadian Association of Broadcasters.

Monsieur Desjardins, please go ahead for five minutes.

[Kevin Desjardins, President, Canadian Association of Broadcasters]

Thank you, Madam Chair.

Members of the committee, thank you for the opportunity to speak to you today about this important bill.

The Canadian Association of Broadcasters, or CAB, is the national voice of Canada's private broadcasters, representing more than 800 members around the country, including the vast majority of private radio and television stations and specialty services.

The Broadcasting Act is fundamental to the way that broadcasters are regulated in Canada, and as you've certainly heard, it's well out of date.

I know you’ve heard from many parties on this bill and its predecessors, and you know the essentials: That technological change has vastly transformed the way that Canadians receive and consume audio and visual content, and Canadian broadcasting policy has failed to keep pace with this change.

Unregulated foreign players have had a decade to enter the Canadian marketplace without any hindrance or oversight, and Canadian broadcasters compete directly with them for subscribers, the rights to content, advertisers and audiences. Moreover, Canadian broadcasters must pay hundreds of millions of dollars in part II fees annually, which do nothing to sustain or develop the Canadian broadcasting system, while foreign players pay none.

Canadian broadcasters deal with a substantial regulatory burden. Simply put, Canadian broadcasters play by the old rules and unregulated foreign platforms play by their own rules.

This is why this legislation is so important. Canadian broadcasting companies must plan several years ahead to determine how to invest in Canadian content and talent. Faced with long production cycles and increasing costs, modern media businesses cannot afford to make split-second decisions. That is why Canadian broadcasters are desperate for regulatory clarity and certainty. They need to know the rules they and their foreign competitors will be operating under to plan their businesses, and they need to know that the rules will be fair and equitable.

This is why we welcome the introduction of Bill C-11.

Bill C-11 was introduced to level the playing field. It acknowledges the presence of foreign digital platforms and would require them to contribute to Canada’s broadcasting policy objectives. For Canadian broadcasters who are asked to carry the entire burden of supporting the audiovisual creative sectors, it’s well past time for a system that is fair, equitable and flexible.

Canadian broadcasters are willing to compete, but they cannot do so in a system that allows increasingly dominant players to take as much as they want and only give back as much as they like.

We have often heard that this legislation was introduced to ensure we continue to tell Canadian stories, and for most Canadians, the most important stories they see and hear every day come from our newsrooms. Maintaining vital, independent and professional newsrooms in communities across the country is a fundamental commitment of Canada’s broadcasters. However, to be clear, this is a commitment that has seen them lose tens of millions of dollars over the past decade. It is unsustainable without urgent policy reforms.

In an era of misinformation, it is critical that we continue to support newsrooms that reflect Canadian communities. We know that digital streamers don’t have the interest or the wherewithal to do this.

It has always been the case that the entertainment programming that draws the largest audiences in Canada helps to sustain the news and information programming. Allowing foreign streamers to continue to skim all of the financial benefit from access to the Canadian market without giving anything back will ultimately reduce the number of Canadian voices being heard—fewer Canadian artists, and critically, fewer Canadian journalists.

While we fully support the passage of Bill C-11, we have three very focused amendments that we feel are essential to ensuring the bill does not entrench an inequitable, two-tiered system between regulated broadcasters and currently unregulated streaming platforms.

This includes amendments to clause 3, where we have asked for foreign streamers to contribute to a production fund where their spending can be monitored; to clause 5, where we are seeking to ensure that there is not a two-tiered system of regulatory obligations, but a fair and equitable approach to Canadian entities and their larger foreign competitors; and to clause 11, to resolve the inequity of part II fees.

It is vital that we get this legislation right. It is vital that we pass it, so we can move forward as an industry and usher in a broadcasting system that reflects today’s realities.

Thank you. I look forward to any questions you may have.

[The Chair, Liberal, Hedy Fry]

Thank you very much, Mr. Desjardins.

We'll now have Mr. Wyatt Sharpe, for five minutes, please.

[Wyatt Sharpe, Host, The Wyatt Sharpe Show]

Thank you for having me here today.

My name is Wyatt Sharpe. I'm a 13-year-old non-partisan journalist and host of the Wyatt Sharpe Show.

I've previously had the opportunity to speak to many people including the Prime Minister here in Canada, the leader of Canada's NDP, the leader of the official opposition, Canadian premiers, the former prime minister of Finland, Ukrainian MPs and several other people.

Again thank you very much for the invitation to join you here today. I greatly appreciate it.

To start off, I'll just say that as a journalist, I believe it's my role to not provide opinions. I'm here in my capacity as a non-partisan journalist.

Just to get this out of the way quickly before accepting the opportunity to appear today, I spoke with other non-partisan journalists and they provided their advice.

I've grown my show via YouTube. I've interviewed numerous people. I've had columns published in my local newspaper and here in my small town and community. I've written articles for the Toronto Star and looniepolitics.ca .

Obviously, Bill C‑11 will affect YouTube and various other social media channels.

I look forward to providing a non-partisan aspect of this legislation today. I look forward to speaking with you all and answering any questions that you might have.

[The Chair, Liberal, Hedy Fry]

Is that your presentation, Mr. Sharpe? You know you have more time.

[Wyatt Sharpe]

Yes. Thank you.

[The Chair, Liberal, Hedy Fry]

Thank you very much.

Now we will go to the question and answer part of the program. I just want to let everyone know that the first round is a six-minute round. Each member of Parliament will have six minutes, but that includes the government's questions as well as the answers, so please, everyone try to be as succinct as you possibly can.

We now begin with the Conservatives. I do not know who is the first person up for the Conservatives.

Can you let me know, please?

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

Thank you, Madam Chair.

[The Chair, Liberal, Hedy Fry]

John, you have six minutes.

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

I'll try to be as brief as Mr. Sharpe, but I'm not sure I'll be able to match that.

I did you want to start with Wyatt and say it's nice to have him here. It's nice to have us, as politicians, asking him questions for a change since he's been asking so many of our colleagues questions over his time. It's typically impolite to ask about people's age, but Wyatt did tell us he's 13.

I was wondering, Wyatt, if you could tell us how old you were when you started your journalism career.

[Wyatt Sharpe]

I often get asked this question. I guess there are multiple answers. I started my show around January 2021. At the time, I had just turned 12 or I was 11 and just about to turn 12.

It's been great watching it grow over the past almost two years.

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

That's great. I'm not sure what I was doing when I was 11 or 12, but I'm certain it wasn't journalism. I think that's impressive.

You just mentioned watching your program and your enterprise grow over these last two years.

Can you tell us how that happened? What tools did you use? What did you do to grow your show from nothing to what you have today, having interviewed literally some of the most powerful decision-makers in our country? How did that come to fruition over these last couple of years?

[Wyatt Sharpe]

I'd say it was probably in multiple ways. One of them would be the obvious way of YouTube and the way that YouTube operates. It appears on people's “recommended” pages, but also through other social media channels, like Twitter, for example.

Then people hear about me if I call into, say, a press conference. Oftentimes, generally, I'll get messages from people saying they found my show by hearing me ask a question at a press conference. Definitely there different ways.

Again, I think a lot of people find out about by it word of mouth. Also, people find it through the way that YouTube recommends it to various people.

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

You mentioned Twitter, for example. I notice that your Twitter following is more than triple that of mine and I've been in politics for nearly 7 years, so I think that shows a lot about how you've been able to achieve that.

I want to look at some of the challenges you may have faced over the last couple of years.

Have you found challenges as a 13-year old journalist breaking through, whether it is getting on to the speaker's list at the press conferences you mentioned or competing sometimes with journalists who've been around for 40 years in some cases?

What are some of the challenges you've encountered to breaking through in the journalism world?

[Wyatt Sharpe]

To start out, for the most part, everyone has been very gracious with their time through interviewing, press conferences or whatever the case may be.

One of the most challenging things is actually my age and many aspects of it. I don't have a driver's licence, so it's a little bit hard to get from point A to point B, if I'm going to cover a campaign event or something of that sort.

In terms of press conferences, I would say that for the most part I get taken just as seriously as any other journalist would, which is obviously good for me. Also, I'm just thankful to everyone who takes the time to speak with me on my show.

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

Thank you, Wyatt. I appreciate it.

I'm going to move to Mr. Tomchuk.

One of the things you were talking about in your commentary was that a lot of your content is viewed internationally. You also mentioned how some of your merchandise, some of the products that you promote through your productions, are international. How important is it for you that you have that global reach, and how have the digital platforms helped you meet that global demand, that global market, using these technologies?

[Justin Tomchuk]

Thank you for the question.

It's extremely important for us. Most of our merchandise sales go to the United States, with some sales ending up in the EU. I'd say that probably less than 10% of our merchandise sales are to Canadians. In my opinion, that is because there are more people in the United States. There's a bigger audience down there. Basically, our viewers just happen to live in the United States primarily, and the EU and other parts of the world. We really do rely on that global audience. Without them, we probably wouldn't have been able to continue the production the way we have in the past five years.

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

You mentioned as well the concept of direct and indirect revenue and how that would specifically challenge your business. When we're looking at this piece of legislation, would you support eliminating that clause altogether so that all user-generated content, such as what you have produced, would be excluded from this bill?

[Justin Tomchuk]

Yes, that would be something I would like to see removed from the bill. Currently as it stands, any form of content that derives any form of revenue—that could be indirect as well—would be subject to the regulations of the bill, from what I understand.

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

Thank you. I appreciate that.

I'm going to turn to the room now briefly and to Mr. Desjardins.

You talked a little bit about part II licence fees and, effectively, their amounting to a tax on traditional broadcasters, on members of, obviously, your association.

Leaving aside Bill C-11 for a second and looking at those class II licence fees and the impact they have, obviously you would support eliminating those fees, as has been suggested in the past. What type of financial impact would it have on your membership if we were simply to take those off members of your association?

[Kevin Desjardins]

The main thing you would see is that you would have an amount of money that could be reinvested within those organizations themselves. In some ways, a taxation dollar—I'm not sure if it's the first or last dollar out—could be retained within the broadcasting companies and could allow them to retain staff. It would allow them to retain journalists in house. Journalism can be very expensive to produce, and I think that within the broadcasting companies, that would be a key place where they would be able to continue to retain staff.