Industry Committee on Sept. 26th, 2018

[Brian Masse, NDP, Windsor West, ON]

I think just as importantly, though, if we're using the documents that have been submitted here today and the percentages that are being talked about, is that those are your family members, your neighbours, your friends, your co-workers. There's a motivational element here.

I don't know how much time I have left. If I have two minutes left, maybe I can use it later on for Bell and for—

[The Chair, Liberal, Dan Ruimy]

You have no more time.

[Brian Masse, NDP, Windsor West, ON]

Maybe they can at least get on the record, because that's what I'm looking for—the roots of this.

Thank you.

[The Chair, Liberal, Dan Ruimy]

Thank you.

We'll move to Mr. Sheehan for seven minutes.

[Terry Sheehan, Liberal, Sault Ste. Marie, ON]

Before I begin, I want to say that I'll be sharing my time with both Mr. Lloyd and Mr. Lametti.

I have a very quick question for you, Andy. It's basically a yes-or-no answer. Should ISPs be involved in some sort of remuneration for the content creator, the artist? We've heard testimony suggesting that they should be. Do you believe ISPs should be involved in some kind of tariff process?

[Andy Kaplan-Myrth]

I wish this were as simple as a yes-or-no answer. If I have to say yes or no, I will say no. I agree that from a policy perspective, it's a complicated question about the movement of content that was formerly broadcast onto the Internet. There are really interesting issues to explore there.

From our perspective, we actually have a bit of a unique take on this particular issue as a wholesale-based provider. The general argument, I think, is that Internet service providers benefit from the increased number of users who come over to them and use their networks to get this content that might have been on TV before or that they might have gotten on TV before. That may be true for incumbents who build networks and have economies of scale as more users join their networks—providing service to those users gets less expensive. That's not true for wholesale providers. We pay a fixed amount in tariffs for each user who joins our network.

[Terry Sheehan, Liberal, Sault Ste. Marie, ON]

I know you're unique. I just wanted to get that on the record right now—we'll probably explore it a little more—and share my time with the other two.

[Andy Kaplan-Myrth]

I understand.

[Lloyd Longfield, Liberal, Guelph, ON]

I want to build on that from creator's point of view. We talk about balance, and yet the market isn't working for creators. We've had some solid testimony, and I've met with creators in my riding in Guelph. They say they're getting paid a fraction of what they used to be paid due to changes in technology. There are market changes for sure that are impacting.

During the testimony this afternoon, we heard about looking at the streaming services for pirated content. What about the streaming services for non-pirated content, streaming services from Netflix or YouTube? If there's some type of revenue opportunity through the ISP or through the vertical integration model, how could we look at this legislation to accommodate the new technologies around streaming services that would be fairer for the creators? I'm just putting it out there.

Andy, perhaps you could continue on, but let's also share the question with the larger integrated companies as well.

[Andy Kaplan-Myrth]

This is not really in TekSavvy's wheelhouse, as you know—

[Lloyd Longfield, Liberal, Guelph, ON]

Okay.

[Andy Kaplan-Myrth]

—but I'll take a crack at it based on what I know about the area, briefly.

It's really a question, when you look at those legitimate sites, about the licensing fees that have been negotiated and what they ultimately pass on to artists, whom you hear from. It's also a question, when you talk about a site like YouTube, of the enforcement that's on that site to try to prevent illegal content from being on it.

YouTube is usually held up as having fairly robust systems to police that sort of thing, so maybe we would talk about some other site. What you're really seeing, when you look at those legal sites, I think is a change in the balance of what those companies take and what they pass on to the artists.

[Lloyd Longfield, Liberal, Guelph, ON]

Right.

[Andy Kaplan-Myrth]

It's a bit of a different issue from pure piracy.

[Lloyd Longfield, Liberal, Guelph, ON]

Thanks.

I noticed some body language around this. Maybe you could put some verbal language onto the table.

[Robert Malcolmson]

I was trying to think of an answer.

[Lloyd Longfield, Liberal, Guelph, ON]

Okay.

[Robert Malcolmson]

I think you've hit the nail on the head. In this day and age, when our regulated, linear ecosystem, which has been around forever, is now being—some would say overtaken—certainly diluted by over-the-top providers, how do we find a way, without unduly constraining the availability of that over-the-top content, to bring that into the system to the benefit of artists, creators, producers and broadcasters?

[Lloyd Longfield, Liberal, Guelph, ON]

Right.

[Robert Malcolmson]

That's certainly a live issue, I know.

The government has launched a legislative review of the Telecommunications Act and the Broadcasting Act, and that's actually one of the questions they've asked. They've asked, specifically, how we get non-Canadian online providers to contribute to our system

[Lloyd Longfield, Liberal, Guelph, ON]

Right.

[Robert Malcolmson]

There are many ways to do that. They could, for example, be required to contribute a percentage of their Canadian revenue to Canadian production. If you think about Netflix, I think they have close to seven million subscribers in Canada. They don't pay sales tax in Canada. They don't have employees in Canada, but they're taking a lot of revenue out of Canada.

[Lloyd Longfield, Liberal, Guelph, ON]

Right, yes.

[Robert Malcolmson]

Would it be wrong to ask them to somehow contribute to our system? That's—

[Lloyd Longfield, Liberal, Guelph, ON]

I wonder whether the carriers can participate in some type of collection model.