Canadian Heritage Committee on Oct. 1st, 2025

[Scott Shortliffe]

We don't see the decision as having a negative impact on small broadcasters. We realize that a number of them have concerns, which they have raised, saying, “If the court rules another way and the money is not forthcoming, what does that mean?” At that point, they would, of course, be free to make an application to the commission, which the commission would consider.

We are proceeding on the basis that we made that decision saying that it will let more stations into the fund. However, the existing stations will continue to be strongly supported. More stations will be supported on the basis of more money coming into the fund.

[Mike Dawson, Conservative, Miramichi—Grand Lake, NB]

What corrective measures will be taken to ensure that smaller independent broadcasters aren't destabilized or crowded out as the larger players are now assessing this one?

[Scott Shortliffe]

Well, as I said, the fund has been set up in a way that it should have no negative impacts on smaller players. In the case that there is less money in the fund because the courts rule against us, that would be a hypothetical for which, as a tribunal, we can't address what measures we might or might not take. We would have to assess the facts on the ground at that time.

[Mike Dawson, Conservative, Miramichi—Grand Lake, NB]

Do you have any plans to add more money to the budget to help the smaller broadcasters deliver the local news?

[Scott Shortliffe]

I think what we can say is that we will continue to look at news in a holistic way in the weeks, months and years to come. If needed, the tribunal, of course, will look at what is needed to support local news across Canada.

I think the decisions we took this summer will provide substantial support to local news across Canada, and we'll continue to focus on local news going forward.

[Rachael Thomas, Conservative, Lethbridge, AB]

I'm sorry, Mr. Dawson. That's your time. Thank you.

I will now go over to Mr. Myles for five minutes.

[David Myles, Liberal, Fredericton—Oromocto, NB]

Thank you, Madam Chair.

I just think some context would be helpful. I'm particularly interested in the Canadian creative ecosystem, and some context around.... I think that, traditionally, some of the money for the Canada music fund and some of these other funds that Martin has been bringing up has come from broadcasters.

Maybe you can just tell us a little bit about how that's happened in the past and how that revenue has tracked over the last number of years. What's been the trend? Some of the motivation, obviously, behind Bill C-11 was that money wasn't coming in from broadcasters as it traditionally had been.

Maybe you can just give us a sense of that context and what that has looked like over the last 15 or 20 years.

[Scott Hutton]

If we're looking more economically as a question on that front, our main approach is that our support for music has been through radio station regulations and other new ventures that have come up in the last number of years, such as satellite radio. For example, Stingray does have a product that is on the cable channels also.

All of those approaches are helping by making sure there is an availability of Canadian music on the airwaves, if I can oversimplify it, and contributing dollars to something we call “Canadian content development funds”. Those dollars serve to help create new music, in both the creation and the marketing and distribution of that music, not only across Canada but across the world.

That's sort of the high level on that front. Naturally, radio stations' revenues have been declining over the last number of years, so those funds have in fact diminished slightly, addressing both francophone and anglophone markets there. With us having moved forward in looking at the new streamers and asking them to contribute dollars going forward, that's how we will be addressing that diminishing support. That is based on radio revenue.

Something similar with respect to cable television.... Mr. Champoux mentioned the CMF—not the Canada music fund, but the people who support television in that case. It has been widely supported both by government and by a percentage of cable revenue. Generally, 3% to 5% of cable revenue has been supported on that front.

Those funds have also been diminishing as Canadians are subscribing less to cable. When we started all these ventures, we were probably around 90% penetration of cable, and now you're looking at something more akin to 60%. All forms of cable, whether it's IP or satellite, are what I'm mentioning in that case. Government has stepped in over the last number of years to backstop that diminishing amount, and certainly decisions were made about the initial contributions to ask the streamers to start contributing to those funds. That's how we're working the system on that side.

The vast majority of production dollars for the companies that have licences in this country in fact have requirements, again, for a percentage of their revenue to contribute towards programming that includes local news and other forms of programming, as well as actual production for their own airwaves by themselves. That's the other regime. On that front, certainly local television has been struggling for a number of years, whereas the other big component has been related to specialty channels. That, however, has been more robust over the last number of years.

Hopefully, that's the high level—

[David Myles, Liberal, Fredericton—Oromocto, NB]

That's exactly what I was looking for, getting a sense of how that has diminished. Obviously, as Martin brought up, this becomes a matter of expediency to a certain degree, because that money is declining year after year as the radio licences aren't being sold or whatever degeneration is happening.

I'm curious to know how the 5% compares to the previous amount that was generated through some of this radio and television. Is it an equitable amount or is it going to be greater?

[Scott Shortliffe]

Perhaps I'll jump in there.

When we established the 5%, we said that this was base contributions. This was, for lack of a better term, table stakes for entry into the Canadian system. We had a lot of evidence on the record that said it is equivalent to what certain companies have to do—what we call BDUs, broadcast distribution undertakings—and it is less than Canadian broadcasters have to do. They have a bigger percentage that they have to spend.

There is a record, which is before us now as part of our hearings this summer, where we asked that question: What is equitable? The act says that it doesn't have to be exactly the same, but it needs to be equitable. That is before us. We don't have decisions that we can announce on it yet.

[Rachael Thomas, Conservative, Lethbridge, AB]

Thank you.

That is the end of your time, Mr. Myles.

As committee members know, this is not normally the seat I occupy. I am vice-chair of this committee and therefore here in this seat because of the absence of our chair. That said, I did prepare a question round, and I will take that opportunity at this point in time.

I'll ask the clerk to set the timer for five minutes. Thank you.

As has been mentioned, streamers are required to pay 5% of their Canadian revenue over to the CRTC, which goes into a fund, or they can invest money directly into the production of Canadian content. Now, in order to do that, they would need to know what Canadian content is. Is there a redo on that definition? Do we have a new definition with regard to CanCon?

[Scott Shortliffe]

When we made that decision, there was an existing definition. The hearing we had this May was specifically on whether there should be a new definition. We had input, including from streamers, on various propositions that we had on what a new definition might look like or whether we should keep the same one.

I can tell you that there will be a decision forthcoming on that in the not-too-distant future. Unfortunately, we have not issued a decision yet, so I cannot provide any more precision on what it will look like in the future.

[Rachael Thomas, Conservative, Lethbridge, AB]

Okay.

With regard to the fund that is put aside, will streamers have an opportunity to apply for money from that fund in order to produce Canadian content?

[Scott Shortliffe]

This relates to the point raised earlier by Monsieur Champoux. We said there are two ways they could contribute. One would be through the Canada Media Fund, which we do not directly manage. The Canada Media Fund has a question before it on whether or not it would allow streamers to access its funds. We do not manage the Canada Media Fund, so that is up to them to determine.

In recognition of the fact that they asked if they would have flexibility in that way, we provided them with an alternate way: You can invest directly a great deal of that fund if you want to commission Canadian content. I can say that there are some cases where streamers have said to us that they have commissioned or participated in elements of Canadian content. Our practice is not to mention specific title names when we're at a hearing, but they have done some of that.

We've been trying to explore ways they can contribute to the system where it's not just them contributing to funds. They can also invest in the system themselves. That is very much a work in progress. Obviously, once we have a final decision on definitions of Canadian content, that may affect how they adjust their approach.

[Rachael Thomas, Conservative, Lethbridge, AB]

The same question goes for digital creators. Will they have the opportunity to apply for funds?

[Scott Shortliffe]

We don't support individual creators. We support funds that commission programming. Individual creators, if they are creating a program, can go to those fund administrators. We don't create funds that support individual creators directly.

[Rachael Thomas, Conservative, Lethbridge, AB]

Okay.

How does Bill C-11 make the Internet better?

[Vicky Eatrides]

That's a big question.

I would come back to our role with respect to Bill C-11, which is the implementation of the legislation. We're a quasi-judicial tribunal. We are implementing the legislation given to us by Parliament.

[Rachael Thomas, Conservative, Lethbridge, AB]

I understand that. I think you and I could probably agree that the definition of success in terms of the implementation of Bill C-11 would be to serve the Canadian public to a greater extent. How does Bill C-11 do that?

[Vicky Eatrides]

We are here to work in the public interest. Coming back to our role, we are here to ensure that we are implementing the regime that has been given to us by Parliament to make sure that we are including online streamers in the regulatory regime.

[Rachael Thomas, Conservative, Lethbridge, AB]

Again, in the implementation of Bill C-11, the CRTC, I would imagine, is motivated by wanting to implement it in such a way that it serves the intent of Parliament. At the time, the minister said it would make the Internet better for Canadians. How are you implementing it in order to achieve that goal?

[Vicky Eatrides]

I would point to what my colleague Mr. Shortliffe said. Implementing Bill C-11 does support the Canadian broadcasting system. It does offer choice to Canadians in terms of what they're able to watch and what they're able to consume. Obviously, there is an economic perspective to that as well in terms of supporting the broadcasting system.

[Rachael Thomas, Conservative, Lethbridge, AB]

I can appreciate what you just said. You outlined how it makes the broadcasting system better, but how does it make the Internet better?

[Scott Hutton]

I guess it's a question of the selection of words. I have responsibilities on both the broadcasting side of our house and the telecom side of our house. The pure Internet is the pure pipe that delivers product to Canadians. What Bill C-11 is doing is making sure that product is delivered—

[Rachael Thomas, Conservative, Lethbridge, AB]

I'm sorry, Mr. Hutton. To be fair, I have to call time on myself.

Thank you. I do appreciate that.

At this point, we go to Ms. Royer.

You have the floor for five minutes.