Canadian Heritage Committee on Oct. 28th, 2022

[The Chair, Liberal, Hedy Fry]

Thank you, Ms. Charette.

We'll go now to the question and answer section.

I'd like to let the witnesses know that the time allocated for questions and answers includes the questions and the answers. If everyone could be crisp and to the point, it would allow for more questions to be asked of the witnesses.

We're now going to begin with what is known as a “six-minute round”.

We begin with Mrs. Rachael Thomas for six minutes.

[Rachael Thomas, Conservative, Lethbridge, AB]

Thank you.

I will direct my first question to Mr. Chan of Meta.

Mr. Chan, in your opening remarks, you talked about the open Internet and how it allows for competition to thrive. However, you made reference to the fact that this legislation would actually harm that.

In fact, the creator of the Internet, Sir Tim Berners-Lee, also said the same thing. When Australia came out with its legislation, he said it threatened the intent of the Internet to be an open and broad space where people could collaborate and share ideas freely.

I'm hoping you could expand on this. How does this legislation harm the Internet—or break it, as some have claimed?

[Kevin Chan]

Thank you very much for a very good question.

I think this is really at the heart of what preoccupies a lot of people beyond the platforms. Simply put, links are the lifeblood of the Internet. Obviously, links connect people from one site to another. It effectively facilitates the free flow of information and, therefore, freedom of expression.

We have never seen, anywhere else in the world, an attempt to regulate the free flow of information by putting into scope, effectively, a toll for links. That is wholly unprecedented, globally. It runs counter to any notion of what a link is and how it operates.

I would also say that it runs counter to a decision made by the Supreme Court of Canada in 2011, which I printed out earlier: “The internet cannot, in short, provide access to information without hyperlinks. Limiting their usefulness...would have the effect of seriously restricting the flow of information and, as a result, freedom of expression”.

[The Chair, Liberal, Hedy Fry]

Ms. Thomas, I think your question has been answered. Do you have another question?

[Rachael Thomas, Conservative, Lethbridge, AB]

Yes. Thank you. My Internet is unstable, so I am cutting in and out a little bit. My apologies.

My next question is for Matt at OpenMedia.

Matt, you talked about the fact that Canadians need high-quality news sources. You said that a great deal of variety is required in order to maintain a democratic system that is healthy, but you also made the comment that Bill C-18 actually doesn't accomplish this stated intent. In fact, you seemed to indicate that it would harm innovation, creativity and variety among news sources.

Do you care to expand on why that's the case?

[Matthew Hatfield]

Yes, that's right. I'm going to springboard a bit off what Kevin was just saying here. Under this bill, we're attaching a cost to good information while leaving bad information free to spread without any cost. The belief is that this will somehow lead to good information spreading more and faster. Does that seem right to you? I mean, we didn't need to be costing good journalism in this way. We could have found money for it without attaching this cost. Unfortunately, the decision of the drafters of Bill C-18 has been to do this.

In terms of concerns about the spread of bad information here, it's incentivizing existing outlets to produce more lower-quality content, but because of how low the standards are in Bill C-18 for recognizing quality information outlets, it's actually opening huge doors for a whole range of bad actors to enter Canada and start spreading their misinformation. We're talking about clickbait farms, the “doctors can't believe this” type of people who might take huge advantage of this legislation. We're even talking about hostile foreign actors, groups like RT, but there are many more who might have a real interest in misleading Canadians and might find a way of misusing this legislation to do so.

[Rachael Thomas, Conservative, Lethbridge, AB]

Thank you, Matt.

I guess I'm just hoping that perhaps you can expand on this a bit more. I understand that the cost of links will perhaps change the variety that's available, but in addition to that, what about the qualification, in terms of news sources actually being able to qualify? Will that enhance the amount of variety that is available online, and ethnic media sources and smaller sources being able to keep their share of the markets, or will it in fact harm that?

[Matthew Hatfield]

Yes, that's also a concern. We're letting some bad actors in and we're also freezing out newer, smaller businesses and more innovative businesses. Because funding has been allocated relative to the current distribution on platforms, it means the platforms that are doing the best today are the platforms that are getting most of this money. There is no way of getting these funds to spur new models that might actually succeed without this support for journalism.

[Rachael Thomas, Conservative, Lethbridge, AB]

Thank you, Mr. Hatfield.

Mr. Chan, it's been said that there's a disruption in the market in terms of advertising revenues. Certainly, it's shifting online versus paper media. I guess I'm just wondering, then.... This whole bill is based on this premise that we need to somehow take lost ad revenue or make up for lost ad revenue in order to keep some news sources afloat or at least enhance that.

I'm curious as to what Meta's take is on this.

[The Chair, Liberal, Hedy Fry]

You have a little less than 30 seconds to answer, Mr. Chan.

[Kevin Chan]

I would simply say that as recent events have shown, nobody is immune to the market forces, the very significant competitive market forces, in the advertising industry. We are no different. But it would be false to claim that this started because of digital platforms like Facebook. I think if you go back into the history of reporting on this, it goes back to the early 2000s, long before we existed and long before we monetized.

[The Chair, Liberal, Hedy Fry]

Thank you very much. I think the time is up.

I shall now go to the Liberals and Mr. Anthony Housefather.

Anthony, you have six minutes, please.

[Anthony Housefather, Liberal, Mount Royal, QC]

Thank you, Madam Chair.

I want to start by saying that I think it's pretty ironic that the last time Meta was here, Mr. Chan was unable to tell me how much ad revenue Facebook derived in Canada, but somehow today he was able to extrapolate how much value Facebook offered publishers for links that publishers had Facebook send them to.

Basically, I'm going to ask a number of questions. If I ask a yes-or-no question, I expect a yes-or-no answer, please.

Last week, Facebook said they were disappointed they weren't invited to come to committee.

Mr. Dinsdale, did Facebook ever contact the chair of this committee or the clerk of this committee asking to appear?

[Marc Dinsdale, Head, Media Partnerships, Canada, Meta Platforms Inc.]

I'm not aware of the intricacies of that. That would not be an answer that I'd—

[Anthony Housefather, Liberal, Mount Royal, QC]

I checked with the clerk yesterday, and the answer was no.

The last time Facebook was here, Mr. Chan and Mr. Dinsdale, I asked a number of questions about the experience of Facebook in Australia, where it threatened to take down pages because of similar legislation to Bill C-18. Facebook did so, causing chaos for a week. You said, at the time, that you could not answer and did not know what would happen in Australia. As a result, this committee summoned Mark Zuckerberg, your CEO, who could have answered the questions. He ignored the committee's summons.

Given that, last week, Mr. Dinsdale made the same threat to Canada about shutting down pages, and Mr. Chan did the same in his testimony today, I certainly hope you're both able to now speak to the Australian experience.

Various whistle-blowers have stated that, in order to plan for the Australian shutdown, they required multiple staff members to pre-emptively sign special NDAs.

Mr. Dinsdale, do you normally require staff members at Facebook to sign NDAs for major Facebook events?

[Marc Dinsdale]

Again, sir, that is not a part of the business with which I am that familiar. I would not be able to speak to that specific question.

[Anthony Housefather, Liberal, Mount Royal, QC]

Were you or Mr. Chan asked to sign an NDA to plan for an eventual takedown in Canada?

[Marc Dinsdale]

I would say, sir, that we are here to try to engage in the substance of the bill in the spirit of co-operation and simply to express that, if the legislation passes as it is proposed, we may be forced to consider whether or not we take that action.

[Anthony Housefather, Liberal, Mount Royal, QC]

I asked you a specific question. Did you—

[Kevin Chan]

Mr. Housefather—

[Anthony Housefather, Liberal, Mount Royal, QC]

Mr. Chan, the question is for Mr. Dinsdale.

Mr. Dinsdale—

[Kevin Chan]

I think you asked both of us.

[Anthony Housefather, Liberal, Mount Royal, QC]

The question was for Mr. Dinsdale.

Mr. Dinsdale, were you, or anyone you know of, asked to sign a specific NDA to plan for a shutdown in Canada?

[Marc Dinsdale]

Sir, again, we're here to engage in the substance of the bill in the spirit of co-operation. What I can share is that, if the bill passes as it is proposed, we may be forced to consider whether or not we would take any kind of action.

[Anthony Housefather, Liberal, Mount Royal, QC]

I guess I'm going to take that as your refusal to answer whether you did or did not. I would probably take that as an affirmative.