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I call the meeting to order. Good afternoon, everyone.
I acknowledge that this meeting is being held on the unceded traditional territory of the Algonquin Anishinabe peoples.
I welcome you to the 22nd meeting of House of Commons Standing Committee on Canadian Heritage.
[English]
Pursuant to the order of reference of Tuesday, March 1, 2022, the committee is meeting to study the main estimates for the fiscal year ending March 31, 2023.
Today's meeting is taking place in a hybrid format pursuant to the House order of November 25, 2021. Members are attending in person in the room and remotely, using the Zoom application. Per the directive of the Board of Internal Economy on March 10, 2022, all those attending the meeting in person must wear a mask.
I would like to make a few comments for the benefit of the witnesses and members. Please wait until I recognize you by name before speaking. For those participating by video conference—
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As I was saying, I acknowledge that this meeting is being held on the unceded traditional territory of the Algonquin Anishinabe peoples.
I welcome you to the 22nd meeting of House of Commons Standing Committee on Canadian Heritage.
[English]
To pick up where I left off, for those participating by video conference, click on the microphone icon at the bottom of your screen to activate your microphone, and please mute it when you are not speaking.
For interpretation for those on Zoom, you have the choice at the bottom of your screen of the floor, English or French. For those in the room, you can use the earpiece and select the desired channel.
I would remind you that all comments should be directed through the chair.
For members in the room, if you wish to speak, please raise your hand. For those on Zoom, please use the “raise hand” icon.
I now would like to welcome our witnesses.
For the first hour of this meeting, our witnesses, from the Canadian Radio-television and Telecommunications Commission, are Ian Scott, chairperson and chief executive officer; Scott Hutton, chief of consumer research and communications; Claude Doucet, secretary general; and Valerie Huot, director general of finance and administration services.
You have five minutes to present, and then there will be questions and answers from the members of Parliament.
Whomever you have chosen to present has the floor for five minutes.
:
Thank you, Madam Chair and committee members, for inviting us to appear before you.
You have already introduced my colleagues. I would like to say that we do, indeed, welcome the chance to appear here as part of your study of the main estimates for 2022-23 as they relate to the CRTC and to Bill .
Before we address the specific element of the main estimates, I thought it might be helpful to provide a little context for my remarks. In particular, I want to offer a quick overview of how the CRTC is funded and how the monies assigned to implement our new responsibilities under Bill would be used.
The commission has access to two sources of funding: appropriation and revenues. On top of that, there is some statutory funding that is allocated to the commission to cover certain employee benefit plans.
The first category, appropriation, is earmarked for expenses related to Canada's anti-spam legislation and the voter contact registry activities. In addition, the CRTC was granted temporary appropriation funding for expenses related to Bill 's implementation, on a preliminary basis. Appropriations, however, represent only about 13% of the CRTC's overall funding.
The bulk of that funding, 87%, comes from fees paid directly by the companies it regulates. I am sure they feel a great joy in paying for their regulation. The commission collects fees under the authority of the Telecommunications Act, the telecommunications fees regulations and the unsolicited telecommunications fees regulations, as well as under the Broadcasting Act, as set out under the broadcasting regulations. The Treasury Board authorizes the CRTC to use revenues from these fees to offset operating expenses incurred in the same fiscal year.
I should note and clarify that broadcasting part I licence fees, telecommunications fees and unsolicited telecom fees are used to cover expenses related to our regulatory activities. However, part II broadcasting licence fees accrue to the government's consolidated revenue fund. They do not come to the commission. They do not fund our regulatory costs for broadcasting-related activities or support the commission's activities in any other way.
The committee, I am sure, will have an opportunity to conduct a study of Bill in the near future. We very much look forward to appearing before you again to speak at a greater length about the legislation. For now, I'd simply like to say that we, as a commission, certainly welcome the tabling of the bill, given the pressing need to modernize the Broadcasting Act and the CRTC's powers, and to clarify the commission's jurisdiction regarding online broadcasters.
[Translation]
Budget 2022 proposed to provide the Canadian Radio-television and Telecommunications Commission, the CRTC, with $8.5 million over two years. This amount is necessary to establish a new regime to ensure that Canadian news outlets are fairly compensated by digital platforms.
Madam Chair, Bill proposes a mechanism to ensure that Canadian news outlets receive fair compensation from the digital platforms that share and distribute their work.
The legislation would require platforms that generate revenues from the publication of news content on their sites to negotiate with news businesses and reach fair commercial deals.
Bill proposes to entrust the CRTC with five main functions in overseeing this activity.
First, the CRTC is asked to play an administrative role, registering news businesses that meet the legislation's eligibility criteria and assessing whether digital platforms meet the act's exemption criteria.
Second, it is asked to oversee negotiation and mediation and maintain a public list of external arbitrators agreed upon by both the platforms and publishers.
Third, it is asked to deal with complaints of undue preference or unjust discrimination filed by news businesses against platforms.
Fourth, it is asked to contract an independent auditor to publish an annual report on the total value of commercial agreements and other key information.
Fifth, it is asked to establish regulations to collect fees, similar to those paid by broadcasters and telecommunications service providers.
The commission requires additional funds to prepare for these new responsibilities, so that we are ready to implement the legislation in an expedient manner should Bill and Bill receive royal assent.
[English]
Further, should either bill receive royal assent, we will move quickly to launch public consultations to gather views and evidence from Canadians and stakeholders. CRTC staff will need to develop consultation documents and tools, analyze the public record and develop a regulatory framework.
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I think someone promised that in the last election. I can't remember who.
Moving on, the CRTC's 2022-23 departmental plan gave some foresight into the work that it would be undertaking in preparation for Bill . Again, you've noted some of that, such as preparing for public consultations. Where some of our concerns lie is that CBC licence renewal is at 17 months, for example. It's been over 500 days now since the three-digit suicide-prevention line was unanimously adopted in parliament.
I'm concerned about where the CRTC is in terms of its staffing, its capability, its competency, to implement Bill first, and then Bill I'm curious as to what timeline you see from the time that Bill is passed and receives royal assent to when it is fully implemented. What's the best case scenario from the CRTC to have that fully implemented?
:
Thank you, Madam Chair.
First of all, thank you for your service. I appreciate the work all of you have done.
Mr. Scott, thank you for your service as chairman.
Recently, as you may recall, the CRTC was able to order the removal of RT from Canadian airwaves. Given what Russia was doing in Ukraine and the use of RT as a propaganda arm, it was a good decision.
Could you explain to us the process that you used to make that decision? Did you receive submissions? How did you use the act to be able to do that?
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I may ask my colleagues to join in in a second.
First of all, I should start by saying that we were very aware of the circumstance, and we were looking at the issue independently. The government asked us to examine whether or not their actions were consistent with the Broadcasting Act and set a defined period in which they wanted a response. They have that ability to ask us to act—albeit not to make a decision, obviously.
The content of the decision is entirely up to the commission as an arm's-length agency. We did that. We issued a notice. We sought comments, staff analyzed them, and we rendered a decision in a very short period of time, as we were asked to.
The circumstances were very clear and the weight of the evidence told us that RT was, in fact, not consistent with the objectives of the Broadcasting Act; therefore, they were removed from the authorized distribution list.
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If I may take a quick step back, it's not that it's overly complicated. There are often comparisons made between Canada and other countries. The U.K. is one example. They license foreign services. We do not license foreign services in Canada; we authorize their distribution. In effect, the distributers, the cable companies and so on, will come and say that Canadians are asking for a particular service and that they'd like to carry it. Then it gets authorized.
In order to take it away, so to speak, we need to remove them from the authorization list. That has been a relatively rare occurrence, but it is increasingly a concern, and we do have the ability, as we just did. Typically it would be driven by a complaint from the public or an enterprise, a person in a legal sense registering a complaint, and then we would examine it, determine whether the matter needed action, get comment and ultimately render a decision.
I'm sorry that was a very long answer.
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We do not. If I may say, by way of introduction, we have that jurisdiction today. Some might argue that it could be challenged in court, but the act as it is written relates to programming delivered over any means and we do not regulate it today. Most of those services are subject to an exemption order. The challenge for the commission is that we really only have two tools, which are outdated. We have the ability to license and the ability to exempt. You can't license a non-Canadian, for example. You can see that we're very limited in what we can do.
The commission's broadcast regulation is not focused on user-generated content. It's focused on the objectives of the Broadcasting Act. What we are interested in is what will have an impact on the system.
More than 20 years ago the commission looked at this and said that for services delivered over the Internet, their regulation would not contribute significantly to the objectives of the act. They looked at it again a little over 10 years ago and reached the same conclusion. I think we could probably all agree that it's not a reasonable conclusion now. It is a significant impact on the system. That's why I've said that we need the flexibility in order to do that.
But the focus is not on user-generated content. It is on the content broadly, provided by programmers, platforms—Canadian or otherwise—and so on.
:
Thank you, Madam Chair.
I thank the witnesses for being here today.
Mr. Scott, I will continue in the same vein as my colleague Mr. Housefather.
You were saying that the CRTC could be regulating digital media right now, but that it doesn't.
Does Bill , as presented today, give you more powers or does it limit the powers you would have to regulate the internet?
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Yes, that's what we call it today.
To repeat what the chairperson said earlier in his answer, the CRTC has never chosen the programming. It sets out certain objectives, for example a quota for radio or television, whether for local news or for Canadian, francophone or other music programming. These are things we do. We provide a regulatory framework, but we don't choose the programming.
Yes, people may believe that, as you say, we choose the programming, but we don't choose it.
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There is a concern that is often raised by digital companies, namely the sacrosanct algorithms. They must not be touched, because they are state secrets, industrial secrets.
I understand that it may be very delicate, because these are their own tools that they use to operate their business model. Having said that, we still need to have means of verification. If you impose targets, you have to have a way of regulating them.
In the copyright sector, it has been extremely complicated to succeed in obtaining distribution reports to check whether the objectives are being met.
Do you think you will have the same problem? Do you already have in mind ways of checking the targets?
:
Thank you very much, Madam Chair.
Thank you to the witnesses for being here.
We hope your families are healthy despite the ongoing pandemic.
[English]
I want to start with Mr. Scott, and I appreciate all of your being here today.
You were quoted in the National Post as saying that if we were designing a regulating system today, “you would probably design a regulator very differently”.
What did you mean by that? Are you referencing things like what you've just given us in testimony? You said currently the CRTC has the ability to license and the ability to exempt. Is that part of what you were referring to when you talked about designing it differently?
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No, not specifically. The context of that was about the accomplishments over the last five years and what the challenges were moving forward. They specifically asked, “Would you make major changes?” My point was simply that change will come incrementally, and we are absolutely ready to make the necessary incremental changes to implement prospective legislation.
My point was simply that if you truly started with a clean slate, which is rarely the case institutionally, as the world has changed dramatically, you would probably start with a transport layer, with facilities that have poles, wires, spectrum and the like, and then you would have a service layer. The point was not that the current structure of the commission doesn't work, but rather that the world has changed so markedly that if you started with a clean slate, you would probably design the agency differently. Statutes are what we fulfill and they're in your hands. Whatever the statutes say is what we will address, whatever the structure of the agency.
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Mr. Scott, I'm just going to continue here.
Bill does, in fact, leave user-generated content open to being regulated by the CRTC. I recognize that there have been arguments against this. However, Dr. Michael Geist has said, “The indisputable reality is that the net result of those provisions is that user generated content is covered by the bill.”
Jeanette Patell from YouTube Canada has said, per The Canadian Press, “the draft law's wording gives the broadcast regulator”—in other words, you—“scope to oversee everyday videos posted for other users to watch.”
Scott Benzie from Digital First Canada has said, per the National Post, “while the government says the legislation will not cover digital first creators, ‘the bill clearly captures them.’”
All these individuals are individual users generating content. It would appear that the bill does or could, in fact, capture them. Is that correct?
It is a challenge because of the uncertainty and the limited flexibility we have, having only a licensing power. We've certainly kept track of it. We do data analysis. We're aware of the role. The big impacts, however, have been on the regulated entities, the Canadian broadcasters whose business models have been fundamentally changed because they're losing subscribers or losing advertising revenues and so on.
The focus, I would say, has been on assisting them in fulfilling the objectives of the Broadcasting Act.
A note was made earlier about how long it's taking to do the CBC's licence renewal. Part of the challenge with that is exactly that—operating in two spheres. We can issue a condition of licence with respect to the traditional sector but no condition of licence with respect to media distributed via the Internet.
Those are big challenges, and that is why we need the flexibility that is offered by the proposed legislation.
:
Thank you very much, Madam Chair.
This is a very interesting debate we're having today. The questions and comments are particularly relevant.
Mr. Scott, two important bills are currently under study: one is already before the committee, and we hope that the other, Bill , will be before it by the end of the current session.
Before we get into the details of that bill, I wonder if both bills will be passed by the end of the session and if they will find their way before the CRTC. They are both important bills for their respective industries.
How soon do you think we can expect the CRTC to complete its work on these two bills?
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On Bill , I have to say that I'm concerned about the eligibility of businesses and the effectiveness.
If I understand correctly, one of the purposes of the bill is to protect local news. As we know, local news has been hit hard by the pandemic and by the fact that the big platforms are taking over the advertising revenues.
The size of the company is a criterion for negotiating with the web giants. Smaller media are also struggling. I am thinking in particular of regional coverage, especially in the more remote regions of Quebec and the rest of Canada.
How can we think that Bill will support regional coverage if the smaller media are not eligible because of their size and their impact?
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Thank you very much, Madam Chair.
I'm going to continue in the same vein as Mr. Champoux.
When we talk about Bill , the finances and the public consultations you're planning, what does the Australian example tell us?
I'd especially like to hear your thoughts and concerns about the local media. In my community of New Westminster—Burnaby, we've lost half of our newspapers. This problem is happening all over the country. What do you plan to do to ensure that the local media have the ability to negotiate?
My last question is, when do you think this process will be completed?
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I appreciate the sense of the question.
Obviously, there are certain platforms that are dominant or much larger than virtually any Canadian domestic player, but I think that's not the issue.
Ms. Thomas is right. Canadians have access to an absolute plethora of content, and that's a good thing. No one is disagreeing with that. We did the report “Harnessing Change” going on three and a half years ago, and one of the first points made was that we are in the wonderful situation of having sources of entertainment, news, sports and so on from around the world, but fundamentally the Broadcasting Act is about ensuring that those Canadian stories get told, distributed and found, and perhaps that's the definition of broadcasting that Ms. Thomas was looking for rather than a technical one. I'm not sure.
:
Thank you very much, Madam Chair.
My question is for Mr. Scott or Mr. Hutton.
Part II is one of the concerns of broadcasters in general, in that we are talking about regulating digital businesses and traditional broadcasters feel that they have very heavy obligations. Licence fees are obviously part of that.
If, in Bill , an amendment were proposed to abolish part II fees, how would that be handled? How could this shortfall be offset? Would the new funds that would be generated by the contribution of online businesses be sufficient?
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We too are still in the early stages of analyzing the ins and outs of the new legislation. However, there is a general definition that says it is to produce news and general news. This is in the bill at the moment. So it's essentially directed at that purpose.
As time goes on, as well as with open processes and public consultations, it's up to us to see and define what is general and what it refers to. Our analysis so far suggests that we are talking more about traditional news, as is generally accepted, and less about consumer-oriented information, as you were giving as an example.
There are also many programs in the Department of Canadian Heritage that subsidize periodicals or other forms of publication.
I think the interest here is in news, because it has never been subsidized by these other programs.
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—today, frankly; or tomorrow, yes. I'm not concerned about that. I think we can go ahead.
As for Mr. Julian's suggestion of 20 hours for witnesses, I think that's reasonable. I think we can work with that. We'll see what happens towards the end of that period. I'm trying to be reasonable. I think the equivalent of 10 meetings is reasonable. I'll leave it at that.
I'm a little hesitant about devoting the equivalent of 10 hours on a constituency week next week. Speaking for our members on this side, we have made commitments in our constituencies. We are ending up a four-week session. We have four weeks after this. I know that my colleagues and I have commitments in our ridings, and many school visits, which can only happen on so many days. It's nice to see that they're happening in person again.
I would be hesitant to commit us to 10 hours during the constituency week. If we can find the resources during the following sitting week, I think that would be preferable from our point of view. To ask the other three members of this committee to give up or cancel what they've already got planned, or to ask non-members of this committee who may not have a background in terms of what the legislation will be, I think is asking a lot.
Again, we'll see what other people think, but it would be my preference to do this during a sitting week. I think it is reasonable to go with longer meetings. I think Mr. Julian has made a kind compromise. If we can work towards something on that, I think that's reasonable.
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Just to clarify, you are agreeing to a deadline for witnesses by tomorrow, Thursday, at four o’clock eastern time, yes? That's fine.
I understand that the clerk—and she can clarify this for me—has a list of witnesses from the other parties. Would the committee like that list to be shared? If no one opposes the idea, we'll go ahead and have the clerk share the list that she has and then add Mr. Nater's list by tomorrow at four. Is there opposition? Seeing none, then I think we have accepted two very clear things.
The only thing we need to discuss now is what Mr. Nater is suggesting. John is suggesting that we can't do 10 hours next week. Again, the committee will have to discuss how to do this. We now have had the clerk tell us that she has managed to confirm Tuesday and Wednesday for five and a half hours, with half an hour being the break in between for a change of interpreters, etc., I gather, so we do have a bird in the hand.
I don't know about the following week and what we will get if we try to find the equivalent hours in that time. Again, as Monsieur Champoux pointed out, we're seeing many committees trying to grab whatever time and resources there are. That's one of the reasons why I would like us to make some decisions today. If we don't, if we snooze, we will lose the ability to get any extra time at all. I would like to hear this being discussed.
I have Madam Clerk.
:
Thank you, Madam Chair.
I certainly understand Mr. Nater's concern, but we do have these spots available. We do have interpretation lined up. We've heard from I think all four parties that there are witnesses who are eager to come forward, so I don't think that time frame is unrealistic.
I will have to adjust my constituency week accordingly, and I probably will have people in my caucus replacing me from time to time, but it seems to me that if we don't start with the blocks that are already available to us, given what we've seen over the course of the last few weeks, particularly on Mondays and Wednesdays, that's just delaying the legislation until the fall.
It seems to me, as people pointed out, that we need to jump on this, hear from the witnesses and make decisions around Bill . It would seem to me that the best way to do this is to take two time slots that are already available to us. In my case, if I absolutely can't change local events, I'm going to make sure I have a good replacement who's well briefed and available to ask the questions of the witnesses.
The witnesses have been waiting for some time to come forward. I think we should accommodate them. We have these spaces, so let's start next week when we have that availability so we can get a jump on this and finally respond to the witnesses' needs.
:
Thank you, Madam Chair.
I do have to push back a little on doing 10 hours' worth of meetings next week.
Our role as Parliamentarians is multi-faceted. We have commitments here in Ottawa, we have commitments legislatively and we have commitments in our ridings. I have a real trouble with devoting two days'—five hours—worth of meetings during the busiest times of the day, when we have other commitments. I'm not saying I'm opposed to any meetings next week. I think we can be reasonable.
My own schedule is to meet with stakeholders, visit school groups and do that role as a representative of our constituents. I'm also dealing with the case work that has been piling up for the four weeks we've been here and the four weeks upcoming. I don't think it's practical for us to do that.
I'm open to compromise on that. I don't want to see us not move forward. We have witnesses. All of us around this table want to hear from them, but I would much rather see the bulk of this discussion take place during our regular sitting weeks when we have time here blocked out.
We've been planning for this constituency week for many weeks. Like Mr. Waugh said, we have medical appointments, family arrangements and family commitments. I have three young kids who need people to get them on and off the bus when my wife is working as a nurse. There are obligations there. If we're willing to have half-hour breaks while I run down to the bus stop and half-hour breaks while I prepare the youngest some “cheesy noodles”, as she calls them, we can make something work.
I just can't commit, on behalf of not only the three members here, but the members who aren't on this committee who are going to have to give up their own engagements, to five and a half hours straight with a half-hour break for interpretation changes.
I don't want us to have to leave this committee without having made a decision. I want to be able to move forward. I don't want to be here talking about this for the next two hours.
I see some staff looking surprised by two hours. I said that metaphorically. If we can come to a compromise, I'd be willing to entertain that. For the sake of our members, families and work commitments in the ridings....
Perhaps, Madam Chair, if you would be entertaining an opportunity to suspend for five or ten minutes, we could have some discussions off line here among different parties. There might be a compromise we could come to, if it's worthwhile. If it's not worthwhile then we can discuss it further.
:
Thank you, Madam Chair.
There is an eagerness in the room to get going. I believe it's Niagara day on the Hill, so I don't want to keep Niagara Falls from waiting.
We've come up with a compromise, so I'm going to state what has been agreed to, and if I state anything wrong, Mr. Bittle will throw a computer cable at me.
We've agreed that we will have our witness lists in to the clerk as soon as possible, by tomorrow at the latest. We would like to do a one day five-hour meeting on Tuesday of the constituency week, and there's agreement that the Tuesday meeting would be on autopilot, so it would not be acceptable to move motions during that meeting.
We would then request that the clerk, with her very best resources, schedule meetings in that first week back to the best of her ability, and to have the remaining meetings that week, whether they are for five hours on Monday or three hours. This isn't in a good motion form, but the direction is hopefully clear on that sitting week back for a total of 20 hours of witnesses.
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Is everyone in agreement with this? Is there anyone in opposition to this motion?
(Motion agreed to [See Minutes of Proceedings])
The Chair: Good work, guys. There was very good will, as well.
I just want to say that I don't know, because only the whips can say whether or not we can get three days in one week of five hours each. It's going to be up to the clerk. We will go with that at the moment.
This motion passes, obviously, so as I said, congratulations for the good will and good work.
The next thing I have to find out is if we need to have witnesses for this meeting on Tuesday. The clerk will be working on Thursday with what she's got to move forward. I was wondering if the department would be one of your first witnesses. At least that would give us witnesses for a certain period of time while the clerk works on what she can get.
Is there any opposition to that idea?
Just to recap, we have a deadline of Thursday, tomorrow, at four o'clock eastern time for anyone who has not submitted witness lists to submit them. We already have quite a long witness list, and some of them may actually be duplicates, but I think the clerk would send those lists for you to look at.
Mr. Bittle said that the Liberals have sent in a prioritized list. I think if we all agree to those things, then maybe the clerk can begin on Thursday to try to get witnesses in, but if she cannot—because, don't forget, Monday is a holiday and talking to people on Monday would be pretty difficult—I know she will do her best to get hold of witnesses and bring them in. We will then be meeting on Tuesday for five and a half hours with a half-hour break. There will be no meeting on Wednesday, no further meeting during that constituency week, and then the following week we will have extended meetings, beginning with Tuesday for five hours when we get back. We're going to have May 31 and June 1 and 2 for five hours each, contingent upon the clerk's ability and maybe the whips' ability to try to find us that time.
I would entertain a motion to adjourn this meeting.