Canadian Heritage Committee on June 14th, 2022

[The Chair, Liberal, Hedy Fry]

Thank you, Mr. Perkins.

Go ahead, Mr. Housefather.

[Anthony Housefather, Liberal, Mount Royal, QC]

Thank you so much, Madam Chair.

I just wanted to come back to that. I don't know if it's another question or basically just a follow-up from me.

This amendment, the way it reads, is that “This Act does not apply”. It doesn't say, the way the other amendments do, that you do not carry out an online undertaking “for the purposes of this Act”. It's specifically saying the act doesn't apply to any company that falls under this financial threshold.

If I am a foreign operator with no company in Canada, basically simply a foreign operator that has all my employees outside of Canada and I'm not subject to any other Canadian jurisdiction, and I say the act doesn't apply to me at all, I don't think, then, the revenue-gathering powers of the act apply to that company. Certainly the foreign courts and the conflict of laws may very well say that, even if there's a Canadian court that renders judgment—which I'm not sure they would in that context—then there would be no application for a foreign country to give effect to that judgment.

To me, this is creating an exemption where any company that claims to be under the threshold is not subject to the act, and therefore could avoid the obligations under the act completely. For that reason, I'm even more convinced, even though I was convinced before, that I would vote against it.

Thank you, Mr. Ripley, for the answer.

[The Chair, Liberal, Hedy Fry]

Thank you very much.

Does Mr. Perkins need to answer this, Anthony?

[Anthony Housefather, Liberal, Mount Royal, QC]

No. Thank you, Madam Chair. I'm fine.

[The Chair, Liberal, Hedy Fry]

That's fine. Thank you.

Clerk, your hand was up. Do you have another person on the floor?

[The Clerk, Ms. Tina Miller]

Mr. Waugh has his hand up.

[The Chair, Liberal, Hedy Fry]

Go ahead, Kevin.

[Kevin Waugh, Conservative, Saskatoon—Grasswood, SK]

Thank you, Madam Chair.

I just wanted to point out that the federal government last year spent $11 million on Facebook advertising. When I see these $50 million or $100 million or $150 million, in perspective, the federal government last year, if you don't mind, Mr. Ripley, spent $11 million alone on Facebook.

These numbers may look huge, but when you get one agency, like the federal government, spending $11 million, almost a quarter, actually more than a quarter, of what we're talking about on CPC-1.03, it puts it in perspective, I think.

What are your thoughts on that?

[Thomas Owen Ripley]

Thank you for the question, Mr. Waugh.

I believe I understand what Mr. Nater, the mover here, is seeking to accomplish by establishing a hard, financial threshold.

As I highlighted earlier, the government does recognize that there are going to be instances, given the wide variety of online broadcasters, where certain classes of online broadcasters should not be subject to regulatory obligations.

The potential mischief on this one is the one I highlighted earlier with respect to certain Canadian services. Again, I think our public broadcaster, CBC/Radio-Canada, would be a good example. Their services—CBC Gem, for example, or TOU.TV—would qualify as an online broadcasting undertaking. The challenge with the proposal from the government's perspective is that it is potentially also excluding online undertakings that could make a very real contribution to achieving the policy objectives of the act. Online undertakings aren't exclusively the big streaming services.

I understand that those big streaming services such as Netflix, Disney+ or Amazon certainly likely exceed that threshold, but there are other online undertakings in the Canadian context that may be very well suited to contributing to some policy objectives of the act and may not achieve that threshold.

[Kevin Waugh, Conservative, Saskatoon—Grasswood, SK]

Thank you.

[The Chair, Liberal, Hedy Fry]

Is there any further discussion? No.

All right. I'm now going to call the question.

(Amendment negatived: nays 7; yeas 4)

[The Chair, Liberal, Hedy Fry]

Just for the record, we will move therefore to CPC-1.04.

Mr. Nater, for the record....

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

Thank you, Madam Chair.

Mrs. Thomas thinks I have a good chance with this amendment.

[The Chair, Liberal, Hedy Fry]

Okay.

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

I can read this into the record, CPC-1.04:

This Act does not apply to an online undertaking whose revenues in Canada from paid subscriptions and embedded advertising do not exceed $25,000,000 annually.

Very briefly, obviously, I don't think I need to repeat the arguments made, but this is to set a threshold from which this act would not apply. I think $25 million is a relatively low number when we're talking about the large multinational streamers. I think this would be an appropriate amendment, and I will leave it to the committee.

Thank you, Madam Chair.

[The Chair, Liberal, Hedy Fry]

Thank you very much, Mr. Nater.

Mr. Julian, your hand is up.

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

Thank you very much, Madam Chair.

What's clear here, regardless of the amount, is that this creates a massive loophole, and I think that's the consideration that we must have as a committee. It doesn't matter about the amount. It just matters that any company that claims that amount is then completely subtracted from the act, which means they can do whatever the hell they want and the CRTC doesn't have any sort of jurisdiction. Not only does that create a huge imbalance. It means that the companies that are the most dishonest, the online undertakings that are the most dishonest, are the ones that can benefit the most from this uneven playing field, this loophole that leads to some companies being able to, through dishonest practices, simply pull themselves out.

All parties have said that they support the intent of creating a level playing field, and all parties support the idea that web giants should pay their fair share. It seems to me to be very destructive to those principles that all parties support, if that we create this loophole that dishonest online companies could use to simply say, “These provisions don't apply. I'll do whatever the hell I want.” We have heard testimony from our departmental witnesses that it is a laborious practice that does not guarantee an adequate outcome to get around those dishonest players.

We cannot create with Bill C-11 what we have created with overseas tax havens.

The PBO estimates that $25 billion a year goes to overseas tax havens. Think of the housing crisis, the crisis in indigenous communities, what seniors are living through, families struggling with the cost of living, all of those things, and $25 billion goes to overseas tax havens in a blink of an eye, every year, according to the Parliamentary Budget Officer. Why would we want to create the same kind of massive loophole in Bill C-11?

It makes sense to take the approach that, if we want to have a level playing field, online providers are part of this approach on Bill C-11, and I fail to see how a loophole in any amount listed can be.... As a dishonest practice within an online undertaking, particularly a foreign one that is perhaps in a jurisdiction where Canada doesn't have the ability to intervene, they can just choose whatever figure they choose to declare, even if it's a dollar, and then they're automatically basically exempt from the act. That doesn't make any sense at all.

We're basically going over the same amendment with different dollar figures. Regardless of the amount, it creates a significant loophole for dishonest business practices and actually skews the whole principle of a level playing field, which is the intent of the bill and which—I'll mention it just one final time—all parties say that they support. Why would any party propose to create a big loophole that throws that out of whack?

[The Chair, Liberal, Hedy Fry]

Thank you, Mr. Julian.

Mr. Nater.

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

Thank you, Madam Chair. I'm just going to make one final comment on this before it goes to a vote. If we take the government and the minister at their word—which I hope we can—there will be a threshold and the CRTC will set that threshold.

I personally think that we as parliamentarians have a duty to play a role, and that's why we've made this amendment that we, as elected officials representing our constituents from coast to coast to coast, should be here making that decision. That's why we've moved these amendments.

Obviously, we're down to $25 million, which is quite restrained when you look at, as Mr. Waugh mentioned, the millions that are spent by the government and by political parties annually here in Canada. I think the Liberal Party spent about $4 million on advertising in the last couple of years on Facebook, which is obviously a legitimate expense, but it doesn't take long to hit that threshold. This will capture the major foreign entities beyond a $25-million threshold.

There will be a threshold set if the government is to be taken at its word, but we as parliamentarians, we as the Conservative official opposition, believe that it should be a role played by us since we have not yet seen a policy directive from the government.

Thank you, Madam Chair.

[The Chair, Liberal, Hedy Fry]

Thank you, Mr. Nater.

Go ahead, Mr. Perkins.

[Rick Perkins, Conservative, South Shore—St. Margarets, NS]

Thank you, Madam Chair.

Just on Mr. Julian's point, and to re-emphasize what Mr. Nater said, I think it is appropriate for parliamentarians to set this, rather than appointed people at the CRTC, since this is what's going to happen anyway. At some sort of level, it will be set.

Second, the assumption that all companies break the law, as Mr. Julian is putting forward, is a ridiculous argument. Most of these companies are publicly traded. Most of them have entities and employees here in Canada. To suggest that somehow they will use this to break the law is disingenuous. Casting assumptions about whether or not companies will abide by the law in the countries in which they operate is just ridiculous.

[The Chair, Liberal, Hedy Fry]

Thank you, Mr. Perkins.

Is there anyone else? No, then I will ask the clerk to please call the vote on amendment CPC-1.04.

(Amendment negatived: nays 7; yeas 4)

I'd like us to move to the final amendment on clause 2. That would be from Mr. Louis, Kitchener—Conestoga.

I will read his amendment. It is that Bill C-11, in clause 2, be amended by replacing line 35 on page 3 to line 1 on page 4 with the following:

enhance the vitality of official language minority communities and to support and

Is there any discussion?

There is none on the floor, none virtually—

[Tim Louis, Liberal, Kitchener—Conestoga, ON]

Madam Chair, it's Tim.

I just thought that since I introduced it I should explain it.

This amendment basically brings terms in the Broadcasting Act in line with language preferred by official language minority communities. It would better reflect the official language that minority communities prefer to use themselves. It will not change the scope of the bill. It makes the language consistent with what my colleague mentioned before.

[The Chair, Liberal, Hedy Fry]

Thank you, Tim.

Is there any discussion?

Go ahead, John.

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

I just have a question of clarification, perhaps to the legislative clerks. I notice that this amendment is labelled as G-1, which I'm assuming means Government-1, but I also see amendments labelled as Liberal-3 and Liberal-4. I'm just seeking clarity on the difference between a government amendment and a Liberal amendment.