Evidence of meeting #55 for Canadian Heritage in the 44th Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was definition.

A recording is available from Parliament.

On the agenda

MPs speaking

Also speaking

Clerk of the Committee  Ms. Aimée Belmore
Michel Sabbagh  Director General, Broadcasting, Copyright, and Creative Marketplace Branch, Department of Canadian Heritage
Thomas Owen Ripley  Associate Assistant Deputy Minister, Cultural Affairs, Department of Canadian Heritage
Philippe Méla  Legislative Clerk

12:10 p.m.

Liberal

The Chair Liberal Hedy Fry

I beg your pardon?

12:10 p.m.

Conservative

Rachael Thomas Conservative Lethbridge, AB

My hand was up with regard to clause 5, and it wasn't acknowledged.

12:10 p.m.

Liberal

The Chair Liberal Hedy Fry

All right. I can't see your hand from here, so I didn't know your hand was up.

You're voting against it. Are all Conservatives voting against?

12:10 p.m.

Conservative

Rachael Thomas Conservative Lethbridge, AB

I would suggest that we take a roll call.

12:10 p.m.

Liberal

The Chair Liberal Hedy Fry

All right, let's go back to the roll call for clause 5.

(Clause 5 agreed to: yeas 7; nays 4)

12:15 p.m.

Liberal

The Chair Liberal Hedy Fry

Now we shall move to clause 6 and amendment CPC-5.

Mrs. Thomas, do you wish to speak to amendment CPC-5? Go ahead.

November 22nd, 2022 / 12:15 p.m.

Conservative

Rachael Thomas Conservative Lethbridge, AB

Thank you, Chair.

With regard to CPC-5, essentially what we have observed with this piece of legislation is that the definition of a DNI is not clear and that it is left up to a number of subjective criteria. It therefore creates a lack of clarity. Because DNIs have a responsibility to report themselves or submit themselves to this legislation and allow their names to be put on a list, and if they fail to do so they could face penalties, it seems that it would be best, in order to serve Canadians well, to clearly define what a DNI is and to make those criteria more black and white or clearer. That is the attempt here.

It's an imperfect attempt, but it's an attempt nevertheless, to be very clear in terms of what falls within the jurisdiction of this legislation. We've attempted to do that by offering a monetary amount, by saying that it would apply to an intermediary “that generates at least $100 million per year in advertising, subscription, usage or membership revenue in Canada”. That $100 million per year in advertising, subscription, usage or membership revenue is important because it ensures that it's going after these large entities. It's my understanding, from the minister speaking to this bill, that that's what he wishes to do.

Let's be clear here. They are foreign players who are acting as these DNIs. The goal is to have them enter into negotiations with eligible news business in order to seek compensation for news. Let's ensure it is in fact those entities that are held accountable, that other, smaller entities and potentially user-generated content are not caught in this bill, and that there is no potential for that to be the case. That's why we've brought this monetary amount forward.

I would note that in some of the testimony we received during our time in earlier meetings it was brought to our attention that the way the legislation is currently worded, the criteria that have been set out, because they are so broad, really could include anyone with a website who posts links to news outlets on it.

Again, we want to prevent that and make sure there's no chance of capturing user-generated content. We're watching that play out in Bill C-11 right now in the Senate, where user-generated content is captured by that bill, and it will be to the demise of many digital-first creators.

We don't want this bill to cause that type of damage. We want to ensure that it hits its target, that it fulfills its stated intent. We believe that one of the best ways to ensure that this is in fact the case is to make sure that definitions are very clear, that there's not this grey area in terms of the definition of a DNI. The feeling is that perhaps a monetary amount is one of the best ways to ensure that this bill really does remain aimed at big tech rather than individuals or smaller entities with websites that post links to news, i.e., blogs.

12:20 p.m.

Liberal

The Chair Liberal Hedy Fry

Thank you, Mrs. Thomas.

12:20 p.m.

The Clerk

I have a speaking list, Dr. Fry, of Ms. Gladu, Mr. Bittle, and Mr. Housefather.

12:20 p.m.

Liberal

The Chair Liberal Hedy Fry

Michael, is your hand up? There's a little white hand there.

12:20 p.m.

Liberal

Michael Coteau Liberal Don Valley East, ON

No. The only thing here is two black hands, Chair.

12:20 p.m.

Voices

Oh, oh!

12:20 p.m.

Liberal

The Chair Liberal Hedy Fry

Okay. I'm sorry.

Marilyn, go ahead.

12:20 p.m.

Conservative

Marilyn Gladu Conservative Sarnia—Lambton, ON

Thank you, Chair.

I like this amendment, because I think it's true that the minister really.... We're trying to make sure there's funding for local and small media organizations across the country, and I think it's clear that they want Facebook/Meta and Google to do that.

As I've said on multiple occasions, they're willing to give the money. We should just have them put it into a fund and have a council of small media organizations figure out how to divide that up to keep the best outcome. Then there's not the bureaucracy of this whole bill.

However, that said, I think if we put some kind of a definition in place so that it's clear that it's not like a bazillion digital news intermediaries that we want to be involved in all these negotiations for the CRTC to be managing, having a threshold will narrow it down to the ones we really want.

12:20 p.m.

Liberal

The Chair Liberal Hedy Fry

Thank you, Ms. Gladu.

Before I go to Mr. Bittle, I would like to let the committee know that if CPC-5 is adopted, then CPC-6, CPC-7, CPC-8 and CPC-9 cannot be moved.

Carry on, Chris.

12:20 p.m.

Liberal

Chris Bittle Liberal St. Catharines, ON

Thank you so much, Madam Chair.

Very briefly, it's really disappointing to see the misinformation back on Bill C-11 with respect to user-generated content. It is not part of Bill C-11. I don't know why we're returning to this, but it needs to be stated. It's ridiculous, and it continues to play out.

That being said, I'll speak to CPC-5, but my comments will apply to CPC-6, CPC-7, CPC-8 and CPC-9 so that I'll just say this once.

I guess it's not surprising; it seems like a reasonable amendment, but it is creating a loophole big enough for Facebook and Google to drive a truck through. Again, that is unsurprising, given what the Conservatives have been doing throughout this entire process, which is to be the PR reps for big foreign tech companies. These companies have been very good internationally in exploiting loopholes and avoiding regulation. Adding specific revenue thresholds would prevent the bill from adapting to an evolving technological landscape and changing markets.

The current approach in the act provides the government with the most flexibility to evolve with the changes. A flexible approach is better for the online news act, as we've seen foreign tech giants in other jurisdictions try to avoid responsibility under those countries' legislation. Thresholds will create loopholes for platforms that they can exploit. We're starting at $100 million. As the numbers get lower, we're scoping in so many organizations. This is about dealing with a specific imbalance. We've heard from organizations. We've heard from small organizations in Alberta and Saskatchewan about this imbalance and about the loss of ad revenue from certain organizations.

I don't know why the Conservatives want to scope in so many different organizations and so many other platforms. I thought they wanted to limit the scope of the bill, but the lower we get, in CPC-9, the number of.... I hear concerns from the opposition about blogs and other items. The more we get down, the more likely you are to scope that in.

If we want to ensure that Bill C-18 benefits news organizations, we can't create loopholes that will allow the tech giants to avoid the law, which is what they are going to try to do. Even with these numbers that the Conservatives created, there's no basis for them. They picked numbers out of the air. It's not contributing to this debate. It's just serving the interests of some of the largest companies in the world.

Once again, through Bill C-11 and Bill C-18, the Conservatives are lining up side by side with foreign tech giants.

Thank you.

12:25 p.m.

Liberal

The Chair Liberal Hedy Fry

Thank you, Chris.

Next is Mr. Housefather.

Go ahead, Anthony.

12:25 p.m.

Liberal

Anthony Housefather Liberal Mount Royal, QC

Thank you so much, Madam Chair.

I just want to make two brief points.

Number one, I agree with Mr. Bittle's comments about getting around any revenue threshold. For example, many advertisers that work with these platforms are also multinational companies. In a private deal, they can easily say, “Instead of paying me $25 million for your ads in Canada, pay me $1 million for ads in Canada and add that $24 million to the U.S. ads.” They will pay the same amount of money. They will have the same number of ads in both Canada and the United States, but they would shift the numbers around so that it's no longer revenue generated in Canada.

That is a simple solution that anybody could use to get around a provision that puts in a revenue threshold, simply moving the monies to another jurisdiction and raising the price of ads in that jurisdiction and lowering them in Canada. As somebody who practised in a multinational technology company, I give you one example of many, many contractual ways that companies can use to get around the revenue threshold.

The second thing I want to raise is that I find it to be really disappointing when highly intelligent people claim something could exist that is so far from the truth and so much of a stretch of the imagination: that is, that user-generated content is somehow going to be part of this bill. The bill says that, in order for there to have to be a trigger of negotiations, there must be “a significant bargaining power imbalance between an operator and news businesses”.

Let's take, for example, Postmedia, a large news business with outlets around the world and hundreds of millions of dollars, if not billions of dollars, in revenue. You're going to have the criteria as follows: “the size of the intermediary or the operator; whether the market for the intermediary gives the operator a strategic advantage over news businesses; and whether the intermediary occupies a prominent market position”.

To make the claim that somehow some individual blogger is going to be covered by having a strategic advantage over Postmedia or any news business is so far from the truth and such an incredible stretch by any measure of the imagination that it can only amount to misinformation to make the claim that user-generated content is covered by this bill. I hope I don't hear that argument again at this committee, because it is beneath the intelligence of all of us, I think, to make that claim.

Thank you.

12:25 p.m.

Liberal

The Chair Liberal Hedy Fry

Thank you, Mr. Housefather.

Madam Clerk, is there anybody else on the floor who wants to speak?

12:25 p.m.

The Clerk

Thank you, Dr. Fry.

Yes, I have Mrs. Thomas, Mr. Julian and Ms. Gladu.

12:25 p.m.

Liberal

The Chair Liberal Hedy Fry

Go ahead, Mrs. Thomas.

12:25 p.m.

Conservative

Rachael Thomas Conservative Lethbridge, AB

Thank you.

I have a quick question for the officials here.

With regard to paragraph 6(a).... Let me just back up here for two seconds. There are three criteria that are laid out here. Various witnesses who came to the committee talked about the vague nature of these three and the fact that they are highly subject to context. With regard to paragraph 6(a), I'm wondering about the “size of the intermediary”, because that will be one factor considered in terms of whether or not this legislation will apply to an entity.

How will the size of the intermediary or the operator be measured? What size would be in, and what size would be out? It's the size of what?

12:25 p.m.

Associate Assistant Deputy Minister, Cultural Affairs, Department of Canadian Heritage

Thomas Owen Ripley

Paragraph 6(a) is indeed intended to speak to something like a revenue threshold. That could be either in relation to global revenues or Canadian-earned revenues, the details of which would be worked out through a regulatory process where the Governor in Council would come forward with a proposed threshold. It would be published in the Canada Gazette, part I for the opportunity for folks to comment and provide feedback, and then finalized in Canada Gazette, part II.

12:30 p.m.

Liberal

The Chair Liberal Hedy Fry

Thank you.

Mrs. Thomas, have you finished with your questions?

12:30 p.m.

Conservative

Rachael Thomas Conservative Lethbridge, AB

I do have a couple of follow-ups.

Thank you, Mr. Ripley.

I'd like quick clarification on paragraph 6(a). Who is going to determine that? Is that going to be determined by the Governor in Council? Okay, thank you.

With regard to 6(b), it says, “whether the market for the intermediary gives the operator a strategic advantage over news businesses”. I'm curious about this phrase “strategic advantage”. That's one term I would like some clarification on. What does that mean?

Really, the first term would be “market”. How would “market” be defined under this?