Canadian Heritage Committee on Dec. 6th, 2022

[The Clerk of the Committee, Ms. Aimée Belmore]

Dr. Fry, typically it has been custom to suspend until the vote is read in the House.

[The Chair, Liberal, Hedy Fry]

All right, let's go ahead and do that. That would be roughly 12 or 13 minutes from now.

We will suspend for 13 minutes. Thank you, clerk.

[The Chair, Liberal, Hedy Fry]

We are on amendment CPC-23.

I am prepared to entertain discussion on this. Are there any hands up in the room?

Mr. Kevin Waugh.

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

Thank you very much, Madam Chair.

When Bill C-18 was introduced, it was supposed to level the playing field. Here we have a public broadcaster that has between $1.3 billion and $1.5 billion. I see recently, in the fall economic update, it got $21 million for one year and another $21 million for next year, so a total of $42 million. That is not levelling the playing field.

The public broadcaster is absolutely destroying the digital sphere—if you don't mind me saying so—in this country. In Britain, BBC is allowed to spend a certain amount on digital. Here, CBC can spend a billion dollars on it if they wish. I think this is where, when we look at Bill C-18 and how small and medium newspapers, and small, medium and even large television and radio stations.... Right now, they really can't compete with CBC on the digital. CBC is killing them. CBC is hiring—as you've heard me say many times—the best journalists throughout Canada, throwing them on their web page, and they are doing very well on that.

We really have to have a long discussion around the table on this one. Should the public broadcaster be involved in any fees on Bill C-18? If they are, let me throw this out. Would the Liberal government reduce the budget of CBC by the amount they're going to get from Google and Facebook? There's the starting point.

I, for one, feel that the public broadcaster should not be included in Bill C-18. I'm trying to level the playing field. We have a public broadcaster that gave out bonuses during the pandemic. They gave out $15 million in bonuses. You tell me a station or a newspaper in this country that would give out $15 million in bonuses in the last two years. As you can see, the level playing field is not level at all. The public broadcaster is at the trough, and it's a big trough on Bill C-18—them along with Rogers and Bell. They're going to gobble up 75% to 80% of the money that....

Mr. Ripley, can you confirm those numbers with me for CBC, Bell and Rogers—the big media outlets in this country? Out of the $330 million that we suspect Facebook and Google will give through Bill C-18, they in fact will gobble up 75% of that. Can you confirm those numbers, please?

[Thomas Owen Ripley]

Mr. Waugh, I won't speak to the PBO report that is the source of the numbers you cited. That was not a department-led initiative.

The internal modelling that we did when we tabled the bill and mentioned it in our technical briefings was more around a $150-million impact. That was based on how this played out in Australia and making some assumptions about how it might play out here. With respect to the PBO report, any questions about that particular number would have to be directed towards them.

The bill is not prescriptive about the proportion of the contributions that should go to different media, Mr. Waugh. One thing the government did and in part that was a response to what we saw in Australia was to put down a very strong marker in clause 7 about the importance of independent media, recognizing that we do have a very consolidated sector here in Canada. It certainly is not the government's intent that the contributions, the agreements, be only made with those big consolidated players. On the contrary, the government's position is that, in order to benefit from an exemption, those agreements have to cover independent businesses and the variety of other factors that have been put down in clause 11.

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

If I can, Madam Chair, I'll just ask Mr. Ripley one other question.

Through our amendment here, CPC-23, if we did eliminate the CBC, what would happen?

[Thomas Owen Ripley]

Thank you, Mr. Waugh.

The impact of that would be that CBC/Radio-Canada news content could be shared on dominant social media platforms without incurring the obligation to bargain. The government did consider—it's certainly a question we turned our minds to—whether CBC/Radio-Canada should be included in the regime or not.

The government's position is that CBC/Radio-Canada generates news. It's an important source of news for Canadians across the country, as you spoke to in your remarks. It does operate on a hybrid funding model, where there's parliamentary appropriation, but CBC/Radio-Canada also has other revenue streams that it's earned.

The decision was that Canadians and the government have an interest in making sure that the value that CBC/Radio-Canada puts into its news content is part of the framework. Again, the goal is to make sure that those revenues, just like for other news businesses, get reinvested in news and journalism.

As I alluded to at the beginning, there was concern about the unintended consequences of excluding CBC/Radio-Canada, which would put them on a different footing whereby their content could essentially be used without incurring the bargaining framework, meaning that it could be shared. We didn't want to create a situation where you were indirectly incentivizing platforms to prefer CBC/Radio-Canada content because it was on a different kind of footing than other kinds of news content in the sector.

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

I would agree with you on CBC/Radio-Canada. It's a very good organization in this country.

CBC television.... I look at the numbers across the country, and they're not as powerful as they once were. I would imagine that the CTV network is finding that out. So are Global TV and others in this country too. The numbers that they once had have diminished greatly.

I just go back to the private versus the public. I worry, with Bill C-18 and with CBC involved with unlimited resources now and getting extra money from Google and Facebook, about what that will do to the medium and even small and large networks. It's hard enough today for them to compete, and with the extra revenue, considering what the PBO report said.... We'll say $150 million. I'll go with your number. That's a big number to the CBC, and the rest compete against that monstrosity of a news network that we do have.

They do good work; don't get me wrong. The CBC does good work. At the same time, it's taxpayer-fed, as we found out in the fall economic update, where they got $42 million, thank you, from the federal government for no reason whatsoever. That's where I'm coming from. It's going to be very hard for private companies to compete against the public broadcaster going forward if, in fact, CBC is going to be at the trough, as we expect they will be on Bill C-18.

That's all I have to say. Thank you very much, Madam Chair.

[The Chair, Liberal, Hedy Fry]

Thank you very much.

Mr. Champoux.

[Martin Champoux, Bloc, Drummond, QC]

Thank you, Madam Chair.

I share some of the concerns that Mr. Waugh expressed earlier about the funding of the CBC. However, as Mr. Ripley said, news content generated by public broadcasters is news content that is eligible.

We want to regulate companies that produce news that is accessible to Canadians. In that sense, I tend to agree with the concerns of private companies, who ask why CBC/Radio‑Canada, which receives public funding, would also be entitled to benefit from this legislative framework.

However, I don't think we need to start questioning the funding of CBC/Radio‑Canada in depth now. I'm much more concerned about the fact that CBC/Radio‑Canada can add advertising left and right and subscription levels for some of the services it offers, when it already receives public funding.

I think ultimately there will have to be some in‑depth work done. Often we put this off until later. But we will have to look at it, because it causes a lot of frustration.

Personally, I don't think CBC/Radio‑Canada should be excluded from Bill C‑18, because of the nature of the bill we're dealing with, but I would be very supportive of looking at the various business practices of CBC/Radio‑Canada that are causing harm to private companies soon.

[The Chair, Liberal, Hedy Fry]

Thank you.

Mr. Bittle.

[Chris Bittle, Liberal, St. Catharines, ON]

I'm good.

Thank you, Madam Chair.

[The Chair, Liberal, Hedy Fry]

All right.

Mr. Julian.

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

Thank you, Madam Chair. I'm concerned about CPC-23, and I'll explain why, Madam Chair, having lived through what was a very difficult decade for public broadcasting.

When Mr. Harper was running the government, we saw a marked reduction in funding for journalism at CBC, and newsrooms closed right across the country. In smaller markets, where CBC, and CBC journalists, had served faithfully for many years, newsrooms were basically closed. In other cases, in larger markets, there was sort of a skeleton crew that was applied. That had a profound impact on CBC's ability to do the excellent work that it does as a public broadcaster.

I'm concerned about the idea that we would not have CBC as part of C-18 to start with because, fundamentally, what that might mean is that, if the next government in this country is going to do the same thing the Harper government did, we would see the same massive cuts in funding and in journalism from CBC serving the country, and there wouldn't be C-18 and that support from big tech. Our public broadcaster, a broadcaster that is respected across the country and around the world, would be receiving that death by a thousand cuts—cuts in funding for CBC journalism and no access to big tech funding either.

Of course, big tech vacuuming up all of the advertising revenue has an impact on CBC, as well as the vast majority of other news businesses across the country.

I'm concerned about CPC-23, and I won't be supporting it on that basis. I think it opens the door for what some Conservatives have mused on and the Conservative Party fundraises on, which is to kill CBC because it's the fair journalism that often puts the Conservatives in opposition. CBC has that solid, established reputation of journalism that often provokes a reaction from Conservatives.

I'm also concerned about clause 28 of the bill because what it does is provide additional conditions and regulations made by the Governor in Council. What that basically does is provide an opportunity for this government or a future government to impose additional conditions on CBC, and I'm not convinced that would always be used on a good-faith basis.

I don't believe that we should carry clause 28. I think we should be looking to remove that clause from the bill. I think what that would do is provide for CBC's independence. It's still subject to CRTC regulations and still subject to all the other provisions of the act, but it eliminates the possibility of a future cabinet saying, “Hey, we're going to impose a whole range of conditions,” and those conditions may be in a bad-faith way designed to strangle CBC.

There is no doubt that the vast majority of Canadians support the CBC. There is no doubt that the vast majority of Canadians respect the high standards of journalism that are set by the CBC. I think we have a duty as a committee to ensure that CBC has the ability to access the funding that big tech has been hoovering out of this country for years in the same way that all other journalists have the ability, but we also have to remove the potential for a future cabinet to say, “Hey, we're just going to provide that death by a thousand cuts to CBC so that our national public broadcaster is no longer on a sound footing.” We saw over a number of years how quickly journalism can be gutted at the CBC when a government, like the Harper government, cuts funding.

It is also important to talk about francophone journalists across Canada. In British Columbia, CBC/Radio‑Canada has excellent programs and journalists. This bilingualism in journalism is important across Canada.

The reality is that if we deprive the CBC of this potential funding from the tech giants and still give the Governor in Council, through section 28, the ability to change regulations very significantly and unilaterally, it risks taking us back to the days of the Harper government, which slashed funding to CBC/Radio‑Canada. Journalism suffered in newsrooms across the country, especially on the French side, where the number of journalists declined.

For this reason, I will vote against this amendment proposed by the Conservatives, and I am voting against clause 28 of the bill. It should be eliminated to avoid jeopardizing the future of CBC/Radio‑Canada.

Thank you.

[The Chair, Liberal, Hedy Fry]

Thank you, Mr. Julian.

Mr. Coteau, you have the floor.

[Michael Coteau, Liberal, Don Valley East, ON]

I will not be supporting this amendment. I want, just for the record, to say why.

On all of the Canadian tax dollars that contribute to CBC, it's content development. It is intellectual property. It's content. It can be monetized, and to just give it away to the big platforms doesn't make any sense to me.

Five billion dollars have been taken from the advertising sector supporting Canadian businesses over the last decade, and that happens each year. If we have an organization like the CBC that supports Canadian content and reports good-quality news, I can't imagine just giving it away to Facebook and Google without any type of compensation. They are taxpayer dollars.

The spirit of the establishment of the CBC many years ago was to support Canadian content, so I will not be supporting this amendment.

Thank you, Chair.

[The Chair, Liberal, Hedy Fry]

Thank you, Mr. Coteau.

Go ahead, Ms. Thomas.

[Rachael Thomas, Conservative, Lethbridge, AB]

Thank you.

I have proposed this amendment for exactly the reason Mr. Coteau is talking about. It is taxpayer dollars. Therefore, give it back to the taxpayer, and if Google can help facilitate that, great. If Facebook can help facilitate that, great. If Twitter can help, great. Whoever can help get that taxpayer-funded material back into the hands of the taxpayer, great. I'm not sure why we would want to hold that back. It's for the public good, so why the CBC would be scoped in with this legislation is beyond me.

The taxpayer is already on the hook for $1.2 billion to $1.4 billion with regard to CBC and making sure that news is produced and put out there. We should want that to be spread as widely as possible, but scoping the CBC in under this legislation means that their content could potentially be excluded from Facebook, let's say, if Facebook chooses not to participate in Bill C-18 and not to carry news anymore. That's a problem because taxpayers then are not able to access the media, the news they paid for.

Further to that, the entire purpose of Bill C-18 is to make up for lost ad revenue. This government in February of 2022 said that the CBC actually shouldn't be reliant on ad revenue and that it actually was against the public good, so this government committed to giving $400 million to the CBC in order to help them not be reliant on ad revenue.

If they're not supposed to be reliant on ad revenue, and that's the foundation that's being set by this government, then why are we are we scoping them into Bill C-18, where they can claim to be hard done by because they don't have ad revenue, even though this government says they shouldn't have ad revenue to begin with. Now they should be able to come to the bargaining table under Bill C-18 and enter into bargaining in order to make up for the lost ad revenue that this government says they shouldn't have to rely on to begin with. It just makes no sense.

The government is speaking out of both sides of its face by keeping this within the legislation. I just would ask, which one is it? Do we support that the taxpayer is putting out over $1 billion on the CBC and, therefore, should have access to the material, or should the CBC be scoped in this legislation and, therefore, withheld from some Canadians, potentially?

The point is that this is the public broadcaster; the public paid for it. It's already been paid for, so why does further negotiation need to be made with big tech companies to get them to pay even more? The material's been paid for. It was paid for by the Canadian taxpayer. It's a done deal, so it's crazy to me.

When I look at the spending of the CBC as well, I see that more than $30 million was spent on retention bonuses alone during the pandemic—$30 million just on bonuses, just to retain. I could keep going down a long list of wasted spending by the CBC, and this is the organization that we think should have the ability to continue to enter into negotiations and take 75% to 80% of this money when combined with Bell and Rogers. That's crazy.

The CBC, which is already taxpayer-funded, is going to be able to elbow out the little guys and get more money because of this bill. Meanwhile, those small rural papers are out. This government made sure they're out because they made sure that there has to be at least two journalists. Ethnic media—they're out, but don't worry. CBC, with more than 1,000 employees—you're in. Already $1.2 billion to $1.4 billion of taxpayer money—no problem. We'll keep you.

That's shameful and incredibly disingenuous, especially when the minister brought out this bill saying that it was supposed to help out newspapers and keep them in business, and especially when it uses words like “sustainability”. It's crazy. The little guys are getting killed by this bill. It's shameful.

[The Chair, Liberal, Hedy Fry]

Thank you, Ms. Thomas.

Ms. Gladu.

[Marilyn Gladu, Conservative, Sarnia—Lambton, ON]

Thank you, Chair.

Chair, you made a great point. You had read out earlier that when we're voting on these different sections we need to be consistent with what we've previously voted. As I said the other day, the only clause I actually voted for was the purpose of the bill, which is clause 4:

The purpose of this Act is to regulate digital news intermediaries with a view to enhancing fairness in the Canadian digital news marketplace and contributing to its sustainability, including the sustainability of independent local news businesses.

This bill is supposed to be helping small local media stay alive, because they've been dying by the droves. When we hear that, according to the Parliamentary Budget Officer, between the CBC, which, honestly, with what they're getting of late.... They're almost getting $2 billion in funding. In addition, they're going to take from the $350 million-ish that we think this bill fund will be, and they're going to come out with the lion's share of that. That's not going to achieve the purpose of the bill. The little guys are going to get hardly anything.

I think excluding CBC is right. They will continue to be publicly funded. The government has made sure they don't need to worry about advertising revenue. They'll keep them flush. Let's focus on what the purpose of the bill is. Let's be consistent then and take CBC out.

[The Chair, Liberal, Hedy Fry]

Thank you, Ms. Gladu.

Mrs. Thomas.

[Rachael Thomas, Conservative, Lethbridge, AB]

Thank you.

I have just a quick question to the officials. If this clause 28 were to be removed altogether, how would that affect the CBC?

[Thomas Owen Ripley]

Section 28 right now speaks to subjecting public broadcasters potentially to conditions specified through regulation. The removal of clause 28, as MP Julian highlighted, would essentially move towards removing the ability to attach any conditions whatsoever to the participation of public broadcasters in the regime. I would say that there would likely need to be a consideration about consequential amendments further on in the regulatory powers, but section 28 is clear that there can be conditions attached to the participation of public broadcasters, which would include provincial broadcasters as well.

[The Chair, Liberal, Hedy Fry]

Thank you, Mr. Ripley and Mrs. Thomas.

Ms. Gladu, did that answer your question?

[Marilyn Gladu, Conservative, Sarnia—Lambton, ON]

Yes.