Thank you very much, Madam Chair. Thank you, honourable members of the committee.
This is at least the fourth time I've had the pleasure of appearing before this committee, following appearances in April 1999, December 2002 and May 2018. I think I appeared a couple of other times earlier in the 1990s, but I can't find a record. Each time I've been here to talk about the cultural exemption, l'exception culturelle, to discuss why it is essential to preserve Canada's sovereignty to implement the public policies we need to support Canadian artists; film, television and record producers; publishers of books and magazines; musicians; actors; visual artists; and others who are so vital to nation building.
I want to note that each political party that's with us today has played an important role in ensuring that our cultural policies are more or less exempt from the provisions of our international trade obligations. The original exemption in the Canada-U.S. Free Trade Agreement was negotiated by Brian Mulroney's Conservative government. I served on the arts and culture SAGIT when John Crosbie was trade minister and the FTA became NAFTA.
Successive Liberal governments have continued the exemption and supported Canada's lead role in negotiating the 2005 UNESCO Convention on the Protection and Promotion of the Diversity of Cultural Expressions.
Quebec played a critical role in negotiating the UNESCO convention, and the Bloc Québécois has been an outspoken advocate of l'exception culturelle. The NDP has been a strong supporter of Canadian arts and culture, and the cultural exemption. I also want to note that in the room today is the Honourable Ed Fast. When he was trade minister, the Canada-Korea Free Trade Agreement was negotiated, and it includes the a cultural exemption.
I want to leave the committee with three key messages today. One, the committee should endorse the earliest possible ratification of CUSMA. CUSMA's cultural exemption is far stronger than the original NAFTA and, given the weakness of the cultural provisions in the CPTPP, it's critical for Canada to have an exemption in its most contemporary trade agreement.
Two, please understand the limitations of CUSMA's cultural exemption. It's not perfect. It has an antiquated and problematic definition. It comes with obligations to change policies, and it has other limitations.
Three, this committee needs to address the link between CUSMA and other trade agreements, particularly as we continue to deal with our powerful southern neighbour on cultural matters.
Why is it important to ratify CUSMA? While it surprises many people, the reality is there is no cultural exemption in the original NAFTA. Instead, it incorporates the cultural provisions of the Canada-U.S. FTA by reference. Since CUSFTA was a bottom-up agreement, its scope was narrow. NAFTA is a top-down agreement, meaning it covers every economic sector, including those that develop in the future.
Arguably, the cultural exemption, then, related only to the limited number of economic sectors in CUSFTA, putting at risk more contemporary policies related, for example, to online, on-demand services like Netflix. This significant problem is solved in CUSMA, and I congratulate Steve Verheul and his team for understanding this, because the cultural exemption is direct and comprehensive. Measures adopted or maintained by Canada with respect to a cultural industry are exempt. This includes the chapter on digital trade.
While it's important to ratify CUSMA, please do so fully understanding the limitations of its cultural exemption. In all of our important trade agreements concluded since 1987, we've done the same thing. In theory we have a cultural exemption. In practice we trade away some cultural policies and limit our capacity to implement new ones. This is the case with CUSMA.
The definition of “cultural industries” is unchanged from the original NAFTA. This is a 1987 definition that does not cover visual arts, performing arts and crafts. Most of you around the table are too young to even know what the antiquated term “machine readable form” is, but you'll find it in the definition. Such a definition is unlikely to sustain policies and programs Canadians will need for a medium future artists will use to create their works.
The notwithstanding clause is continued. This is a clause authorizing retaliation of equivalent commercial effect against any measure supporting the cultural industries that Canada should implement in future.
There's a new dispute settlement provision. While it's good that Canada could now challenge a retaliatory measure, the powers of the arbitrator include determining if Canada's measure properly falls under the cultural exemption in the first place.
There is incredibly convoluted and obtuse language in article 32.6.3 that would seem to permit the U.S. to retaliate against Canadian cultural industry firms in a greater amount than the standard of equivalent commercial effect.
CUSMA contains a number of specific broadcasting policy changes. These include a requirement to overturn the CRTC's Super Bowl simultaneous substitution decision. I'd love it if somebody asked me about that, because I could tell you the secret story of the simsub ruling. This is a good thing, by the way. It includes expansion of the rights of U.S. border stations under our retransmission rules, and it guarantees U.S. home shopping services will be carried by Canadian cable, satellite and Internet protocol television distributers.
CUSMA also requires Canada to make changes to the Copyright Act, as you've already heard. Some of these are very positive, as my colleague Greg Johnston has pointed out about the increase in the term of copyright protection, but some of them are a little bit more problematic. For example, while the changes respecting technological protection measures and rights management information are minor, the detailed rules concerning civil and criminal remedies for tampering with digital locks and watermarks are likely to put pressure on Canada's system to implement stronger penalties.
The agreement also allows us to maintain our notice and notice system of liability when an Internet service provider is advised of a copyright infringement, but it establishes the U.S. notice and takedown system as the standard. This too will limit Canada's ability to evolve its own laws.
Finally—and I'd urge my colleague Greg to take a look at this one—there is a new provision in the agreement that requires national treatment, a national treatment obligation for all copyright measures. This will overturn our existing ability to distribute royalties only to Canadians unless there is a reciprocal right in the partner country, and this will erode payments to Canadian artists. Although it's not a huge amount of money, it will erode some payments.
Given all of these issues and challenges with CUSMA, why am I still recommending urgent ratification? The answer, quite simply, is CPTPP. Put bluntly, that agreement is by far the worst trade deal for culture that Canada has ever negotiated. CPTPP, of course, started life as the trans-Pacific partnership and most TPP terms are included in CPTPP by reference.
TPP's treatment of culture is atrocious. There is no cultural exemption, and the preamble provision recognizing the importance of cultural diversity is simply factually incorrect when it says “that trade and investment can expand opportunities to enrich cultural identity and diversity at home and abroad”. I tell you that, left unregulated, trade and cross-border investment bring cultural homogenization and not cultural diversity.
Canada tried weakly to protect cultural policy-making space by taking a reservation against commitments in a number of TPP chapters, but it's critical to understand that a reservation is not an exemption. It's one-way. It's not mutual, and in international trade law it's subject to the principles of standstill and rollback. If you change a policy reserved in an agreement, you cannot make it stronger, only weaker, and it is assumed by all parties that the reservation will eventually be eliminated.