Mr. Speaker, it is a pleasure to speak to Bill C-32.
I must start by declaring my bias on this piece of legislation. I am a broadcaster by trade and it is important that I say that right away. In declaring that, perhaps I should take a couple of moments to explain why I think it is very important from the perspective of someone who has been in the broadcast industry that this legislation not come into place, not necessarily because it hurts broadcasters, although it does, but because it will hurt Canadian culture in general. I will expand on those remarks over the course of the next several minutes.
I should start by acknowledging the work of the hon. member for Kootenay East who now sits on the Canadian heritage committee, my colleague in the Reform Party, our heritage critic who has done a lot of work on this particular issue. He has many concerns and has provided me with some information.
I certainly was aware of the issue and I think hon. members in all parties were aware of it as well. There was a rather intense lobby from all sides with respect to this legislation and there is a good reason for that. The reason is this legislation will profoundly affect the various industries it touches.
I want to talk for a moment about the broadcast industry. The minister said a few minutes ago that the bill will strengthen Canadian culture. I am going to challenge that assertion. It will strengthen some aspects of Canadian culture but at the expense of other players in Canadian culture. I speak primarily of people in the broadcast industry.
I want to make the argument that hundreds of broadcasters in the big and small radio stations around the country are as much a part of Canadian culture as are the recording artists. Absolutely. I will give my personal perspective on this.
I ran a little radio station in Brooks, Alberta. I did that for 10 years. Prior to that I worked at radio stations throughout western Canada, some quite small, some a little larger in medium size markets. It is important to point out the value these little radio stations have in their communities. They are the glue that hold those communities together in so many ways.
The community of Brooks relied on my radio station for the local weather report which is something we take for granted. If we stop to think about it, it makes absolute sense that if we could not support that radio station because of yet another imposition of some kind of a tax, a levy or in this case, neighbouring rights which cause the radio station to go out of business, people who relied on the local weather report would be lost. We are talking about farmers, ranchers and those types of people. People wait to hear whether or not the school bus will be running because of a storm. They simply would not have that local information.
Another example of how radio stations hold communities together is the local news aspect. Many local communities have weekly newspapers but they do not have daily information. That is very important. I talked about the weather. If my memory serves me, the number one reason people listen to the radio is to hear the weather report. The second most important reason is local news. People want to hear what is going on in their community on a day to day basis. If because of government legislation some radio stations are knocked off the map and people cannot get the local information, the sense of community will be lost in a very real way.
I come from Brooks, Alberta which has a population of 10,000. It is quite far from any other major centre. There are many communities in that type of situation around the country. If those communities lost their local radio station it would be a tremendous loss because there would be no other radio station or TV station to jump in to fill the gap. It would be a terrible loss.
I know many hon. members opposite feel the same way. I hope I am not putting anyone on the spot when I read the following letter. That is certainly not my intent. I have a letter which was signed by the hon. member for Essex-Kent. It was sent to the former heritage minister. The letter states: "Neighbouring rights will add dramatically to this local programming loss across our country. Border communities such as Windsor and Sarnia are in a competitive market with the U.S.A. Added cost to the Canadian broadcasters will place them in a less competitive position. It is truly troubling to me to pass legislation that would place the radio broadcast industry in Canada at a disadvantage to their U.S. counterparts".
It is an excellent letter and the hon. member made some very good points in it. That is one huge reason the legislation is bad. Overall this legislation will cost Canadian broadcasters somewhere in the range of $30 million. That comes at a time when over half of the radio stations in the country are losing money, especially AM radio which is under tremendous strain because of fragmentation in the marketplace and new technologies. Suffice it to say that at the present time there are no technologies which can replace what radio is doing around the country.
This is an extremely important issue. Again I say to the minister that she is proposing legislation which will strengthen one aspect of Canadian culture, but it will greatly weaken another.
Another point is that there is really no reason to bring this legislation forward right now. That really bothers me. I do not understand where the minister is coming from. There is a longstanding historical understanding between the record industry and radio with respect to how record companies are compensated when radio stations play their music. If someone's music is played on the radio, obviously it will have an impact on record sales.
The broadcasters recently had Angus Reid conduct a study. It was discovered that about 45 per cent of music purchasers identified radio as the most important influence in their most recent music purchase. It outranked all other factors by a ratio of three to one. Overall, nearly nine in ten or about 88 per cent of Canadian music buyers rated radio to have been a somewhat to a very influential factor in their music purchase over the last year or two.
I get the sense that the minister is setting out to kill the goose that has laid the golden egg. The Canadian music industry and its artists are doing extremely well around the world. Not only are they popular in Canada but they are popular in the United States and Europe as well. There are many obvious examples. Therefore, the question is: If the present system is working extremely well, why are we engaging on a new course that could potentially undermine
the broadcasting industry, which is precisely the industry that has given many of these artists their start?
Many radio stations in order to help them get their licence tell the CRTC when they apply for their licence that they will commit to spending a portion of their profits on promoting new artists who do not yet have a record. They will help them record a song so that the artists can get some air play. In many instances the group, for example the one I belong to, CHUM Limited, a big chain across the country, would say that they would give the new artists free advertising of their records on their air waves.
This is seen as an important way to help fulfil the 30 per cent Canadian content rule, by ensuring that there are lots of good quality Canadian artists out there. A lot of time is spent coming up with ads to promote Canadian recording artists. What we are doing here is undermining the radio industry and therefore jeopardizing precisely the same artists the minister is intent on promoting.
Those arguments are good enough, but there are many other important arguments against this legislation. I want to make another right now with help from the member for Essex-Kent and his letter.
What we are proposing to do seems insane in many ways. We want to set upon a course that will provide neighbouring rights legislation which in effect will ensure that Canadian artists who receive a lot of air play in the United States will not benefit. In fact, they may be ultimately penalized-and I will get to that in a moment-by virtue of the government bringing in this neighbouring rights legislation. At the same time, we are providing a perverse incentive for Canadian broadcasters to play more American music. Let me explain how this works.
Neighbouring rights legislation will extend the current copyright legislation that applies to the composers of music on to the artists and the record producers. In other words, the producers and artists will enjoy the protection of copyright legislation. They do not enjoy it right now. The radio stations will pay for that. In Canada there will be a monetary incentive to play more American music because it is exempt from the copyright legislation. It is a crazy incentive to put in place if someone wants to promote Canadian music. It does not make any sense at all.
On the other hand, we are treating the Americans differently in Canada. They will not be subject to the new copyright legislation. We are treating American artists differently. That will make us subject to a challenge under NAFTA or under the WTO, which would quite possibly mean that the Americans could challenge us. It could mean that some of our artists will be ultimately denied from receiving air play in the United States.
The point with respect to this issue was extremely well made by the hon. member for Essex-Kent. I will read from the letter he sent to the heritage minister:
On Wednesday, November 1st, the U.S. government passed its Digital Performance Rights Act of 1995. This U.S. legislation excludes current radio stations, as well as future digital radio stations, from any form of neighbouring rights royalty payments. There is grave concern in the industry that any introduction of a neighbouring rights royalty in Canada will be detrimental to the radio industry which is already experiencing financial difficulties. Of equal concern is that Canada would have a different system than in the U.S.
The U.S. obviously is the big market for the majority of Canadian artists and also is our biggest trading partner. The letter goes on to state:
For example, if Canada were to have a neighbouring rights regime, which includes Canadians but excludes U.S. entertainers, it would be challenged under the WTO. The effect of a successful U.S. position is that approximately 70 per cent of the royalties paid by Canadian radio stations would be paid to foreigners, with no such return of revenue from the U.S. due to their exclusion. In any event, the U.S. has indicated that it would consider this system under the national treatment rules. This means that the U.S. will simply demand the same treatment for U.S. performers and record companies as given to Canadian performers and record companies.
In other words, because the Americans are excluded, we are going to send our people down there. They will not receive any royalties from the Americans because the Americans do not have this legislation. Radio is exempt under U.S. copyright rules. However, in Canada we will have the situation of a reverse incentive to actually play more American music because broadcasters will see a monetary benefit from it. It makes absolutely no sense. Not only that, we will possibly be subject to a NAFTA challenge or a WTO challenge. We have no idea of what the consequences of that could be. Suffice it to say the country music channel dispute shows us that the Americans are determined to play hardball when it comes to cultural industries.
One of the other concerns I have is with respect to how certain performers are going to benefit from this legislation while other performers are penalized. In relative terms, neighbouring rights legislation most benefits those Canadian artists who tend to receive more air play in Europe where neighbouring rights apply to private radio than in the U.S. where they do not. In practical terms this means that certain genres of music and music recorded in certain languages will benefit at the expense of others.
What is rather obvious, if I can state the obvious here, is that recording artists from Quebec are going to receive far more benefit from this than Canadian artists outside of Quebec. The reason is that most of the people who have signed on to the Berne convention are from Europe. Therefore, Quebec artists who sing in the French
language for instance are going to be the beneficiaries of this. However people who perform in English and have their primary market in the United States are not going to receive the royalties because, as I mentioned several times before, the U.S. excludes neighbouring rights from applying to private radio.
The legislation provides a benefit to francophone artists in particular, but also to other artists who perform in different languages and receive a lot of air play in Europe. Meanwhile, it does not help and most likely will hurt those Canadian artists who perform in the United States. The real situation is that the minister is pitting one group of artists against another. We are headed for trouble if we do that because it is wrong.
Another point I want to make is a little more complicated. Actually Europeans do much better with this deal than do Canadians overall because of our broadcasting system. In Canada literally hundreds of radio stations across the country broadcast to 30 million people. In Europe a fraction of that number of radio stations broadcast to 300 million people.
By virtue of how the neighbouring rights legislation is designed, what is important is how many spins of the record occur over the course of a year and not how many people it reaches. That is how the legislation is designed. In relative terms we will be sending a lot more money to Europe than Europe will be sending to Canada for our artists because of the way the broadcast system is designed.
We have a situation where European performers will actually do better than Canadian performers. It does not make any sense that our government would be promoting that. To me it is ridiculous and counterintuitive. Nonetheless that is precisely what is being proposed.
I will not belabour this point as there are people who would like to discuss other pieces of legislation. I sum up by saying that there is no support for the legislation across the way, as far as I can determine. There is certainly no support for it in my party or, I would argue, across the country.
I would argue that Canadians are very supportive of their local radio stations. People feel that Canadian performers are doing extremely well today. We see them all the time: Shania Twain and Michelle Wright. Many Quebec artists are doing extremely well around the world. To tinker with the current system is to invite disaster, to invite killing the goose that laid the golden egg. All this occurs at a time when private broadcasters are facing serious financial problems.
I cannot understand the motivation for the legislation given all the arguments against it. I encourage hon. members across the way, members of the Bloc Quebecois and certainly members of my own party, to go after the legislation.
I encourage the minister to justify why she is taking this course. I remind her that for every argument she puts forward in favour of the legislation there are three or four against it. I encourage her to think about that and to remember that the broadcast industry, speaking as someone who comes from it, is a very important part of Canadian culture. Steps should be taken not necessarily to promote it but certainly to stop the erosion of it that the Minister of Canadian Heritage is proposing.