Real battles will come in front of the CRTC
By Denis Carmel
OTTAWA – It was likely not done by design, but the Standing Committee on Canadian Heritage could not have lined a more diverse set of individuals and groups as it did on its Friday, February 26 meeting to talk about Bill C-10, the bill to amend the Broadcasting Act.
Author and former CBC English services chief Richard Stursberg, Corus Entertainment, SOCAN, Rogers Communications, Netflix and two community television association groups.
Most, even including Netflix, support Bill C-10 and wish for speedy adoption (the real battles will come in front of the Commission, which will set all the new regs governing the audiovisual market in Canada). Yet all propose different amendments to suit different issues that are dear to their hearts.
Stursberg proposes to make the subsidy system simpler. “The long standing joke has been that Canadian producers are not experts in making shows but in navigating the system,” he said, pointing to the existing Canadian content points and funding schemes. And he proposes to change the 10-point Canadian system to the British model, which has 35 points.
Troy Reeb, executive vice president of broadcast networks at Corus Entertainment (and a former journalist, so we wish the committee had asked him his thoughts on the state of journalism and social media’s role in it) highlighted the plight of his company, telling the committee “we have assembled the vision, team and expertise to build an international media powerhouse right here in Canada. But even the best people and ideas cannot overcome badly-outdated regulation,” he notes, which makes sure Canadian companies spend money in ways foreign streamers do not.
He wants the bill to pass, and quickly. “After more than 10 years of escalating, unregulated foreign competition, five years of rolling policy consultations, and one devastating pandemic, we simply cannot wait any longer. Bill C-10 is not perfect, but it does get one big thing right,” he continued. It brings the outsiders inside the system.
He and the Rogers representatives agreed on the fact they should focus on what they can offer best. “Going forward, news should not represent one of our many obligations, but be recognized as our primary public service contribution. Giving us more flexibility to compete in other parts of our business,” said Reeb. That is something which will ring alarm bells among TV producers, especially since he added: “We also strongly urge the committee not to amend the bill to empower the CRTC to regulate the private dealings of broadcasters and producers. Such an amendment would further benefit producers who are enjoying record profits at the expense of Canadian broadcasters who are seeing record declines.
“The CRTC rejected this ‘terms of trade’ approach six years ago, and there is no compelling policy reason to reverse course now. Our company is trying desperately to move forward; we cannot afford to move backwards,” he added. The producers, in their appearances, have asked the committee to amend the bill to include terms of trade for their dealings with broadcasters, streamers and anyone else who would be captured by Bill C-10
SOCAN (the songwriters collective) brought different perspective on things. First, although Corus and Rogers are major radio players, neither mentioned that section of their business, whereas SOCAN is all about music.
“In digital media, royalties paid to Canadian creators were three times lower than those related to uses in traditional media. The average percentage for traditional was 33.9% over the past six years, while in the digital realm, that average did not reach 10%. Even more alarming, when we focussed on audio-visual media only, the average percentage of royalties paid to Canadian writers for uses in the traditional media remained over 30% but slid to a meager 6.8% for digital platforms,” said Geneviève Côté, chief Quebec affairs and visual arts officer.
So, while it welcomes the inclusion of the web giants like Spotify in the Broadcasting Act, SOCAN mostly cares about copyright issues. “The proposed amendments that C-10 introduces into the Copyright Act in respect of ephemeral recordings which would add online undertakings to this exception are unacceptable and go contrary to the intent of this bill.”
Rogers started off the second hour, businesslike and to the point. Like Corus the company’s position is for the new Act to “make local news and information programming a priority. The Act should allow Canadian broadcasters to prioritize the production of news programming over all other programming,” said Pam Dinsmore, vice-president, regulatory, cable.
The rest of Rogers’s presentation touched on the usual issues: Regulatory fairness, eliminating CRTC Part II fees forever, not just this pandemic year, and combatting online piracy. The company also provided detailed amendments proposals to bring these changes about.
“Most of these rules were designed for an industry that no longer exists – one where licensed broadcasters enjoyed privileged access to Canadian audiences. That, of course, is no longer the case, and we are doing everything we can to adapt and compete. But in far too many cases, the old broadcasting rules make it impossible to do so.” – Troy Reeb, Corus Entertainment
In its presentation, Netflix noted the company already contributes plenty to the Canadian economy (spending $2.5 billion on making movies and TV since 2017) and “to the extent that C-10 aims to create a flexible framework that will enable the CRTC to tailor conditions of service applied to online undertakings, and to recognize the different ways that online services contribute, we think such an approach makes sense,” said Stéphane Cardin, Netflix’s director, public policy, Canada.
“Services like Netflix do not perform the same roles as traditional broadcasters, nor do we have the same content strategies,” he said.
Cardin added Netflix would have much to say about its possible mandated contribution to the system with the CRTC when the time comes – and indicated he objects to a 30% contribution. Canadian broadcasters must spend 30% of their prior year’s revenue on Canadian content (which includes news, sports, dramas, comedies and so on). “Such a reflexive approach would not create a level playing field, nor would it be fair and equitable. Netflix seeks no regulatory benefits; nor do we offer news or live sports programming—the categories that enable Canadian broadcast groups to meet the majority of their spending obligations,” he went on.
Canadian broadcasters also want that 30% mandate, as well as the rules saying where some of the money must be spent, to go. “The Act enables a web of regulations, policies, conditions and codes that touch every level of our operations. They dictate how much we have to spend on certain kinds of shows; when those shows can be aired; the types of songs we can play on our radio stations; the number of commercials we can sell to advertisers; and, from whom we can buy our programs. I could go on,” said Reeb.
“Most of these rules were designed for an industry that no longer exists – one where licensed broadcasters enjoyed privileged access to Canadian audiences. That, of course, is no longer the case, and we are doing everything we can to adapt and compete. But in far too many cases, the old broadcasting rules make it impossible to do so.”
Once done with the witnesses, committee business saw all MPs – including the Liberals – support a motion asking the government to table a draft of the policy direction, instructions to the CRTC, Heritage Minister Steven Guilbeault has promised upon the passage of Bill C-10. Hopefully, this will be easier to get than obtaining the details of the possible $830 million in new Cancon funding, which some opposition MPs still are indicating not having received.
Later, the committee also decided to invite Mark Zuckerberg, CEO of Facebook, to discuss the recent developments in Australia (where the company objected to a new law requiring it and others to pay publishers for news and even blocked users from posting Aussie news, and then quickly recanted that decision after a few days) and reinvite Kevin Chan, Facebook’s head of public policy for Canada, because the committee members said he may have misled the committee on his previous appearance on January 29.
The next meeting is on March 8, which will include the Guilbeault and Heritage Department officials talking about C-10.
