Canadian Heritage Committee on May 8th, 2023

[The Clerk]

Mike just said that they're sworn in already.

[The Chair, Liberal, Hedy Fry]

Okay, the witnesses have been sworn in.

Go ahead, Ms. Thomas.

[Rachael Thomas, Conservative, Lethbridge, AB]

Thank you, Madam Chair.

Madam Chair, on May 1 it was agreed in the meeting that there would be 15 minutes of business at the end of this meeting, so I was confused as to why that didn't make it into the notice of meeting. I would ask that it be accounted for or provided for today.

[The Chair, Liberal, Hedy Fry]

Okay. I would like to ask the clerk again to remind us.

Was there a vote taken on the idea to stay an extra 15 minutes today?

[The Clerk]

[Inaudible—Editor].

[The Chair, Liberal, Hedy Fry]

Did we make a vote? Was it the committee deciding we should to that?

[The Clerk]

There was not an official vote on it. There was some discussion around the invitation to the Auditor General. I believe there was a promise by the Bloc member, who is present, to also move that motion in INDU. He's given notice of the exact same motion to have the Auditor General appear at the industry committee.

[The Chair, Liberal, Hedy Fry]

No, it's not on the Auditor General. I'm asking about that motion by Ms. Thomas to spend 15 minutes at the end of this meeting. Was it a motion? Was it voted on? Was it passed? I cannot recall that it was. That's why it's not in the minutes of the meeting, Ms. Thomas. It's not part of the meeting because I don't think it was voted on.

Go ahead.

[Rachael Thomas, Conservative, Lethbridge, AB]

Madam Chair, there are many decisions that are made around this table through a collaborative approach rather than taking a vote. If that's something that you require going forward, then I will insist on that, but the decision was made at this table. We do not have blues, unfortunately, but you can pull up CPAC and watch the film. It was agreed to around this table, based on a friendly conversation, that we would have 15 minutes of committee business at the end of this meeting today.

[The Chair, Liberal, Hedy Fry]

Then we will have 15 minutes at the end of this meeting today. Thank you.

Go ahead, Chris.

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

Isn't Thursday the open meeting? Didn't we agree, but now Thursday is the open meeting? Do we have a set agenda?

We have witnesses here right now. Let's move forward. I know the Conservatives may not want to trouble Facebook too much, but let's hear from the witnesses. They're scheduled. The notice of motion has happened. If there are 15 minutes after one o'clock, great. If not, let's push it to another time. The witnesses are here.

[The Chair, Liberal, Hedy Fry]

I have just a bit of correction, Mr. Bittle. Thursday is going to be two hours with the new president of Soccer Canada, Charmaine Crooks. On Monday we were going to have one hour of witnesses with regard to safe sport and one hour of an in camera committee meeting.

Are you suggesting, then, that we leave the suggestion that everyone seemed to tell me that they all agreed to, even though there was not a vote? They all agreed to it. Do they want to do that today?

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

I think the agreement, Madam Chair, was for an extra 15 minutes. If there isn't an extra 15 minutes, then let's just go to the witnesses.

[The Chair, Liberal, Hedy Fry]

Go ahead, Peter.

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

Thank you, Madam Chair.

I cannot stay past 1 p.m. I have to go to the House, so I won't give my consent to extending the committee, but I do believe 15 minutes at the end would be warranted. We have now summoned Mr. Clegg, so we will be coming back to Facebook potentially next week, or discussing non-compliance with a summons.

[The Chair, Liberal, Hedy Fry]

All right. We will have the 15 minutes at the end of the meeting, as suggested.

Ms. Thomas, did you have something else to add?

[Rachael Thomas, Conservative, Lethbridge, AB]

I am happy to accommodate Mr. Julian and to have those 15 minutes take place within the meeting, but I will just clarify that based on the discussion that took place on May 1, it was agreed to to have an extra 15 minutes at the end of the meeting.

Clerk, it's your prerogative, so if you wish to include those 15 minutes within the framework of this meeting, I'm just very much aware that this is limiting our witnesses.

[The Chair, Liberal, Hedy Fry]

It is limiting our witnesses, yes, indeed.

Peter, you're not going to be able to stay for 15 minutes, but it seems to me that the discussion suggested an extra 15 minutes.

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

Again, Madam Chair, I do not give my consent for the extra 15 minutes. I do believe Mrs. Thomas' request is reasonable. I would suggest we go to committee business with 15 minutes remaining and come back to Facebook next Monday, when hopefully Mr. Clegg will be available to respond to our summons.

[The Chair, Liberal, Hedy Fry]

Thank you.

We have two witnesses whom I will introduce. We said originally that these witnesses would have 10 minutes.

The witnesses are from Meta Platforms. Kevin Chan is global policy director, and Rachel Curran is head of public policy at Facebook Canada.

You have 10 minutes. You can divide the 10 minutes as you choose. I will give you a literal shout-out when you have 30 seconds left.

Thank you. Please begin.

[Kevin Chan, Global Policy Director, Meta Platforms Inc.]

Madam Chair, members of the Standing Committee on Canadian Heritage, it is a pleasure to once again be before you today. My name is Kevin Chan, and I'm a global policy director at Meta Platforms. I am here with my colleague Rachel Curran, our head of public policy in Canada.

Madam Chair, as you will know, your committee clerk wrote to us on Friday, April 28, to confirm an invitation to appear before this committee for its study on the “reaction of companies in the information technology industry to Bill C-18”.

We were delighted at the opportunity to once again make a representation to the committee of our serious concerns with the online news act and readily agreed to accept the invitation. To demonstrate how seriously we took this opportunity, our president of global affairs, Sir Nick Clegg, confirmed his participation as our principal witness.

Unfortunately, late last Thursday, May 4, we were notified by the committee clerk that the title of the hearing was changed to a much more confrontational one, one that seemingly had nothing at all to do with the online news act. Given this development, on Friday Meta notified the committee that our president would no longer be appearing.

I think we were all looking forward to a substantive discussion about Bill C-18 today, much like the thoughtful discussion that occurred at the Senate Standing Committee on Transport and Communications last week. That seemed like a high-water mark of legislative deliberation.

As you know, the clerk of your committee wrote us on Friday, April 28, to confirm that we had been invited to testify before you in connection with its study on, and I am quoting now, the reaction of companies in the information technology industry to Bill C‑18.

We were delighted to have another opportunity to speak to your committee about our major concerns with respect to the Online News Act, and willingly accepted the invitation. To demonstrate how seriously we were taking this opportunity, our president of global affairs, Sir Nick Clegg, confirmed that he would be attending as the principal witness.

On Thursday, May 4, we were informed by the committee clerk that the title of the study had been amended and replaced by another much more worrisome version that apparently had nothing to do with the Online News Act. In view of this change in direction, Meta advised the committee on Friday that our president would no longer be attending.

I believe that we were all keen to take part today in a serious discussion about Bill C‑18, like the thoughtful discussions held at the meeting of the Standing Senate Committee on Transport and Communications, which seems to have been the high point of the legislative proceedings.

With that in mind, I am pleased to now share with you the opening statement that our president of global affairs, Sir Nick Clegg, had written and was prepared to make for your original study on the reactions of companies in the information technology industry to Bill C‑18.

This is what he said:

"Madam Chair, my name is Nick Clegg and I'm President, Global Affairs at Meta. I'm grateful for the opportunity to address this committee.

"Madam Chair, the Online News Act is based on a fundamentally flawed premise. Meta does not benefit unfairly from publishers sharing links to news content on our platform. The reverse is true.

“Publishers choose to share their content because it benefits them to do so, whereas it isn't particularly valuable to us at all. As such, we've taken the difficult decision that if this flawed legislation is passed, we will have to end the availability of news content on Facebook and Instagram in Canada.

“The truth is, our users don't come to us for news. They come to share the ups and downs of life, the things that make them happy and sad, that interest them and entertain them. Links to news stories are a tiny proportion of that—less than three percent of the content they see in their Facebook Feed.

“But news publishers do find our services valuable. We estimate that Facebook Feed sent registered news publishers in Canada more than 1.9 billion clicks in the 13 months to April 2022. This amounts to free marketing we estimate is worth more than $230 million. Publishers choose to share their content because it drives traffic to their websites. It helps them sell more subscriptions, grow their audience and display their ads to more people than they might have otherwise.

“The traditional news industry faces profound challenges. New technology has emerged, consumer behavior has changed, and old business models don’t work anymore. Of course, everyone wants quality journalism to thrive. But it makes no more sense to claim social media companies are taking money from publishers than to say car companies stole from the horse and cart industry.

“It seems we’re having a debate as if the internet was frozen in time about 10 years ago. The way our users engage with content has changed dramatically. Just in the last year or two we’ve seen an enormous shift in people consuming creator content and short form video. Watching video is now more than half of time spent on Facebook and Instagram. People reshare Reels—our short form video format—more than two billion times every day on Facebook and Instagram, which has doubled in just the last six months.

“The world is constantly changing and publishers, like everyone else, have to adapt. Asking a social media company in 2023 to subsidize news publishers for content that isn’t that important to our users is like asking email providers to pay the postal service because people don't send letters any more.

“And not all internet companies are the same. We’re not Google. They are an amazingly successful company that does extraordinarily useful things for people, but they operate a search engine that functions by using links to news web pages. Meta, by contrast, doesn’t solicit, need or collect content from news websites to put on our services. Our users—and in this case, news publishers—choose to share it themselves. Globally, more than 90% of organic views on article links from news publishers are on links posted by the publishers themselves.

“I’ve heard a lot in this debate about how this legislation is replicating what Australia has done. In fact, the laws are different in important respects—and C18 will go further than the Australian legislation. First, the Australian code doesn’t apply to Meta because we haven’t been designated by the Treasurer there. If we do end up being designated and forced to pay publishers, we will be faced with the same difficult choice we are making in Canada. But perhaps more significantly, this legislation would make Canada the first democracy to put a price on free links to web pages, which flies in the face of global norms on copyright principles and puts at risk the free flow of information online. Canada—and Canadian liberals—have a long-standing reputation for believing in multilateralism, and for defending the free and open internet—C-18 would be a direct contradiction of that long held and honorable tradition.

“I spent 20 years of my life as a legislator, so I understand how difficult it is to craft good policy and sensible legislation. In this instance, I believe C-18 is flawed legislation which would deliver bad economic policy too. The Parliamentary Budget Officer estimates that most of the funds generated by the Act will go to broadcasters, not the local and regional publishers it was supposed to support. It’s Robin Hood in reverse. The Act would subsidize big broadcasters at the expense of independent publishers and digital news sites, skewing the playing field so it’s even harder for smaller players.

“Ultimately, this legislation puts Meta in an invidious position. In order to comply, we have to either operate in a flawed...regulatory environment, or we have to end the availability of news content in Canada. With a heavy heart we choose the latter. As the Minister of Canadian Heritage has said, this is a business decision. It’s not something we want to do, but it is what we will have to do.

“I welcome your questions.”

With that, Madam Chair, Rachel and I welcome your questions as well.

[The Chair, Liberal, Hedy Fry]

I was giving you the 30-second shout-out. Thank you, Mr. Chan.

Now we will begin our question-and-answer period. The first one is six minutes. The six minutes, actually, is for the questions and the answers, so I'm going to ask you to be as clear and crisp as you could be.

The first question comes from the Conservatives.

Ms. Gladu, you have six minutes.

Oh, it's Mrs. Thomas, then. Thank you.

[Rachael Thomas, Conservative, Lethbridge, AB]

Thank you.

About three weeks ago, Bill C-11 was rammed through the Senate. There were amendments suggested originally, but they weren't taken by this government. Then it was sent over to the Senate. Yet again, the Senate did not give it the sober second thought it deserved, so it got pushed through. It now gives this government unprecedented power to control what people can see, say or hear online.

Then at the Liberals' convention this weekend, they put through another intention—a proposal—which is that they would actually regulate news sources. Basically, the state would have to approve a journalist's news source. If the government gives that news source a stamp of approval, then that article can be published. If the government—through the CRTC, I would imagine—doesn't give that stamp of approval, then of course that article would not be publishable. It's form of censorship.

What's interesting is that a journalist, Paul Wells, who traditionally is very liberal and very much inside the pockets of the Liberals, wrote an article on Friday outlining what's happening here.

He said, “It is impossible for any government to subsidize journalism without deciding, at some early point, to exercise its prerogatives as an owner.”

What's interesting is that this government has funded the media to the tune of about $600 million. As the owner of much of the media here in Canada.... Of course, there are many fantastic independent sources and alternative sources of media, but the mainstream tends to be largely owned by the government, because they're the ones that are keeping them afloat or propping them up with this massive amount of grant money.

Now it would appear, based on their convention, that the Liberals are looking to cash in on this. They're looking to exert their power. Some might call it bullying. In fact, I believe that is how many members of this committee have referred to it when power is misused. It's called bullying.

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

I have point of order, Madam Chair.

I don't expect a question in the near future, but I want to clarify that things that are passed at a convention aren't government policy. Those are things by members.

I'll clarify that for people who are listening at home.

[The Chair, Liberal, Hedy Fry]

Thank you, Mr. Bittle.

Continue, Mrs. Thomas.