Hon. Colin Deacon: Honourable senators, I rise today — with substantial trepidation, given the speakers that I’m following — to speak on Bill C-11, the online streaming act. I would first like to commend our colleagues on the Senate Transport and Communications Committee, who navigated through often competing amendments to meaningfully improve the bill that arrived in the chamber. The diligence that they demonstrated really reinforced the role of the Senate as the chamber of sober second thought.

I have thought a little bit about the fact that maybe we could consider a thorough review process in future and learn some lessons from this process as to how not to have it be quite so arduous, long and drawn-out. Nonetheless, I think our chamber has done tremendous work on this bill.

I want to focus my remarks on two points as these resulting amendments are considered both here and in the other place, as regulations are developed to implement the final legislation, and on the drafting of future legislation intended to improve the prosperity of Canadians as we rapidly evolve in this global digital economy.

First, let’s ensure that we are enabling both incumbents and new entrants, be they individual creators or companies, to earn increasing amounts of recurring revenue for the purposes of creating sustained wealth and prosperity for Canadians. The principle needs to be that we are focusing on Canadian intellectual property and exploiting that globally.

Second, let’s begin to develop some regulatory agility as we enable Canadian companies and innovators — in this case, those in the audiovisual and creative sectors. Let’s make sure that they can become increasingly globally competitive as technologies and business models continue to evolve from today.

I do not have a magic bullet that will offer instant, simplistic solutions — like a great little line I heard a few times a moment ago. But I am absolutely certain that focusing on these two priorities will help to ultimately uncover important and actionable opportunities that will benefit Canadians over time.

Let me speak to my first point, and that is the need to intensely focus on creating the conditions necessary to generate recurring revenue from Canadian-owned intellectual property. One of the objectives of this bill is to “serve the needs and interests of all Canadians . . .” through “its programming and the employment opportunities . . . .”

In my second reading speech on the previous iteration of this bill — Bill C-10 in the last Parliament — I asked the Transport Committee to consider how we can ensure that our regulatory frameworks and other policy tools ultimately incentivize the creation of content and assets that generate recurring revenue for Canadians. Colleagues, you’ve heard me speak in this chamber about the importance of commercializing intellectual property here in Canada. If we want to turn our knowledge and creativity into jobs, opportunities and prosperity, a top priority must be to own in Canada and globally commercialize from Canada the highly creative assets that are globally competitive. If we do not succeed, we risk becoming a branch-plant economy where we just rent Canadian talent to foreign entities. As a result, our talent is paid only once to create high-value assets that generate recurring revenues for others instead of paying Canadian talent to create Canadian-owned assets that generate recurring income for Canadians into the future.

This challenge was echoed by several witnesses in the committee during the study of the bill. Michael MacMillan, co‑founder and CEO of Blue Ant Media, said:

My firm view is that an “eligible Canadian program” is a program produced by Canadians. . . . where the copyright and the use right are owned by Canadians?

Mr. Justin Rebelo, Director at the Canadian Association of Film Distributors & Exporters, also added that, “It is important that Canada does not become a solely service production industry and our system protects ownership . . . .”

Similarly, Howard Law, former director of local media unions at Unifor, wrote in a blog post that:

. . . unless independent Canadian producers retain full rights to exploit and profit from their best creations . . . they will become CanCon sub-contractors in their own land . . . .

This is a daunting risk and a crucial priority. That’s why I’m pleased to see an amendment in the bill that directs the CRTC to consider, in the regulatory development process, whether Canadians would benefit fairly from the use of Canadian programs, including copyright and other rights. This provision could provide regulators with an opportunity to apply a pro-competitive lens in the development of regulations to ensure that anti-competitive practices are considered and managed, including in licensing and distribution deals.

As a related point, it is very promising that the new CRTC chair has a strong background in competition law and policy and in fighting for pro-competitive markets. Ms. Vicky Eatrides has committed to growing the CRTC’s capacity to manage its responsibilities in an increasingly dynamic digital landscape and to applying her pro-competitive background at the CRTC. I’m hopeful that her presence also signals that there will be increased coordination between the CRTC, the Office of the Privacy Commissioner and the Competition Bureau, something that is already delivering benefits in other jurisdictions.

I won’t lament the fact that these changes are long overdue. I will just offer that any further delays will hand this new chair even greater challenges than she faces today. I wish Ms. Eatrides success as she strives to unlock the tremendous social and economic opportunities that reside in this sector for Canadians.

Now to my second point: We must be willing to iterate if we are to compete in a rapidly evolving global digital economy.

When the bill was reintroduced in revised form this session, the policy objective seemed clear. The government sought to continue its intentional strategy to protect Canadian cultural sovereignty within our broadcasting system, but now including the online sphere.

As the bill progressed, however, this objective was challenged. Many concerns were raised about this legislation by different stakeholders in the creative and audiovisual sectors, including online content creators. Many of these concerns look to have been addressed through amendments. Only time will tell their fate once they get sent back to the other place.

Industries globally must constantly innovate if they are to compete in an increasingly digitally porous world. In this global context, government needs to be a catalyst, empowering the innovation that will drive long-term competitiveness. While some progress has been made, Canada is well behind her peers in legislative and regulatory modernization and in the development of pro-competitive policies. Sadly, we have an abundance of 30-year-old legislation that requires updating.

Given this context, it is ironic that this legislation aims to incorporate new online innovations into a regulatory system that is burdened by a broadcast legacy. For example, the rapid shift towards direct-to-consumer content delivery models has revolutionized business models and forced traditional broadcasters to adapt in order to stay competitive.

Consequently, this bill is attempting to bring the disruptors into a legacy regulatory system full of those who were disrupted. This was an odd choice when compared to building an agile system that is fit for the digital era.

In fact, leading experts such as Michael Geist, Professor and Canada Research Chair in Internet and E-Commerce Law at the University of Ottawa, shares the view that using policy instruments like broadcasting regulations for online streaming and undertakings should be the exception, not the rule.

Nevertheless, I am glad to see an amendment that will require the CRTC to ensure that our broadcasting system will promote innovation and adapt to technological changes. In this regard, it is my hope that officials can look to best-in-class global standards as models to strengthen the agility of new regulations in our broadcasting system so that we keep up and, perhaps, at some point, start to lead in the world.

Even so, creating a modern broadcasting system that will “serve the needs and interests of . . . Canadians” — a primary objective of this bill — and does so in this rapidly evolving digital era requires swift action not only in modernizing our regulatory system but also in incentivizing market-based approaches that enable Canadian incumbents and new entrants to thrive in both domestic and global creative markets.

Some of these incentives are already in place. For example, federal and provincial tax credits have made Canada an attractive destination for film and TV production. As a result, some Canadian creators — including BIPOC filmmakers — have benefitted from these program supports. However, these supply-side incentives also need to be coupled with actions to stimulate increased demand for Canadian content in these sectors, both domestically and globally. Slow action on this means we risk losing more innovative production companies like Tangent Animation, a Canadian-owned animation studio based in Toronto and Winnipeg that unexpectedly shut down in 2021, leaving about 400 people out of jobs.

Colleagues, our country is at a critical juncture. We must find ways to become the disruptors, not the disrupted. The CRTC has a lot of work to do so we have the conditions for creators to earn recurring revenues and to build a culture that is agile enough to take advantage of changes globally and not be disrupted by them.

We all want an independent, thriving, competitive audiovisual and creative industry that helps to secure our collective prosperity for future generations to come. I support this amended bill as a step in that journey down this all-important road.

Thank you, colleagues.

Senator Manning: A principal issue related to this bill is the question of to whom this legislation would apply.

The government has repeatedly stated that there is no intent to apply this legislation to small players. Yet, there are no boundaries in the legislation to ensure that that intention is respected and this does not happen.

The Senate Transport and Communications Committee heard from numerous witnesses who clearly stated that the bill had to incorporate a revenue threshold in order to ensure that the legislation focuses on services that are truly of consequence in the digital marketplace, rather than capturing user-generated content.

Tim Denton, Chair of the Internet Society Canada Chapter, said that any online service that earns less than $150 million in Canada annually should be excluded from the act and “. . . from any regulation or obligation to contribute to Canadian content production . . . .”

As it stands now, it may surprise many of you to learn that neither charities nor religious organizations are exempt from regulation under this legislation, and proposed subclause 2(2.3) does not shelter the online activities of individuals, whether professional or amateur.

I know that some colleagues believe and will argue that social media is now exempt based on the amendment from our colleague Senator Miville-Dechene adopted at committee. However, I, and many stakeholders, are still of the mind that this amendment doesn’t go far enough because of the wide discretionary power it still affords the CRTC in deciding what is or isn’t scoped into this legislation.

As Mr. Denton said, social media platforms are far from the only places on the internet where entities and individuals may transmit audio or audiovisual content. Individual and community websites abound with such content. Neither subclause 2(2.3) nor clause 4.1 addresses the much broader regulatory reach of Bill C-11.

Konrad von Finckenstein, former chair of the CRTC, addressed another aspect of this. He noted that vesting in the commission such large powers with such vague parameters will prove extremely onerous for the CRTC. Every single stakeholder will come forward with specific requests for exemptions of conditions and argue they fall within the vast powers given to the CRTC.

Mr. von Finckenstein said that one cannot forget that the CRTC is a court of record that identifies issues, either on its own or via petitions; seeks input from affected parties and stakeholders; holds hearings, live or on paper; and then issues a decision.

All that has to be done in accordance with due process and can be judicially appealed.

Consequently, narrowing the powers will allow the CRTC to make good, timely and targeted decisions. The goal, of course, is to protect and strengthen Canadian broadcasting and foster Canadian production. Hence, the legislation should target only large streamers who can meaningfully compete with established broadcasters.

Isn’t that what the government keeps telling us is the point of this legislation? To target streamers who behave like broadcasters?

Small innovative internet players should be able to give their innovative drives full rein to contribute to the overall productivity of the Canadian economy.

Professor Michael Geist also told our committee:

I believe there is a clear need for thresholds and limitations in the legislation itself. Without it, services may regard the regulatory uncertainty — which the House committee heard will take years to sort out — to block Canada, leading to less choice and higher consumer costs.

This aspect is key. The full ramifications of this bill will take years to sort out as the CRTC goes through its regulatory processes. That means years of uncertainty for smaller players. It is that uncertainty they cannot afford.

Here I would like to quote Matthew Hatfield, the Campaigns Director of OpenMedia, who said, “It’s nonsensical for Bill C-11 to place obligations on platforms with a few thousand Canadian subscribers . . . .”

He also said:

It would be a very cruel consequence of this bill for diasporic Canadian communities to be cut off from the invaluable cultural lifeline provided by foreign streaming services.

Colleagues, I cannot stress enough how vital it is that we recognize the uncertainty this is creating for ordinary players. As Monica Auer, Executive Director of Forum for Research and Policy in Communications, told our committee, “. . . Bill C-11 is not coherent and not readily understood.”

The bill leaves creators guessing, and we should not be putting them in that position.

I would also like to reference what smaller creators told our committee, specifically Justin Tomchuk, an independent filmmaker who told our committee on September 27 that Bill C-11, as currently drafted:

. . . makes it clear that my business will fall under the call of the CRTC’s directives, as I derive direct and indirect income through my artistic efforts.

Scott Benzie, Managing Director or Digital First Canada, told the committee on September 28:

Our ask is simple: [The bill] needs clarity into what is in and what is out, because it currently includes the entire internet. Something this critical cannot be left to the CRTC to wade through.

Morghan Fortier, Co-Owner and Chief Executive Officer of Skyship Entertainment, said:

What keeps me up at night about this bill is the potential to gate content that is deemed not Canadian, either entering into the country or within the country. With retaliation from other countries, should this type of a law pass through, we’re done. I don’t mean my company. I mean we don’t need to talk about this bill anymore because it’s over. That will affect regionalized content creators, small content creators and larger content creators.

Frédéric Bastien Forrest, animator and content creator, told our committee on October 4:

My take on this is that it is scary. We have the feeling that the politicians behind this law are well intentioned and they want to promote our culture, which is great, but the side effects of the law could break stuff.

Oorbee Roy, content creator and skateboarder, also expressed her fears about how a small undertaking like hers could be impacted by CRTC regulation. She noted the arduous process that she and other creators face in registering their material as Canadian content.

I know that some senators will say that the Canadian content provisions were amended in committee. However, colleagues, there is no guarantee that that particular amendment will be accepted by the government. I submit that we need this very modest amendment I am proposing, and that the government will have difficulty saying “no” to it.

At committee, the government majority rejected the threshold of $150 million proposed by Mr. Denton. We were told by government officials that with a $150 million threshold some platforms, such as CBC Gem, might be excluded from regulation. But the committee then went on to reject the $100 million threshold proposed by Mr. von Finkenstein, and then it inexplicably rejected even lower thresholds of $50 million and $25 million.

So, colleagues, what I am proposing today is a threshold that would truly only exempt the very smallest of players. This threshold of $10 million is one fifteenth the amount recommended by Mr. Denton and the Internet Society, and one tenth the amount recommended by Mr. von Finkenstein.

Colleagues, I believe we have an obligation to respond to what an overwhelming number of witnesses have told us. The “just trust us” approach is bringing little comfort to the Canadians whose livelihoods depend on whether they will be subject to regulation as a result of this bill.

I hope you will support this amendment to establish greater certainty for ordinary Canadians.

Some Hon. Senators: Hear, hear.

Senator Miville-Dechêne: I am a bit surprised by your proposal because the reason Bill C-11 is so vague on some very specific issues is that the internet is constantly changing. The $10-million threshold is not particularly low, but we have no way of knowing how the internet will change in the future and who will become a major broadcaster in the Canadian context.

How did you come up with this $10-million threshold? Is it really a good idea to include this factor in the bill rather than allow the market to determine it? Again, you will say this is a matter for the CRTC, which already has a lot to rule on.

The Hon. the Speaker: Is it your pleasure, honourable senators, to adopt the motion?

The Hon. the Speaker: Is leave granted, honourable senators?

The Hon. the Speaker: Senator Dawson’s time has expired. Senator Dawson, are you asking for five more minutes?

Senator Dawson: It has already been 45 minutes, but I will ask for another 5, yes.

The Hon. the Speaker: Is leave granted, honourable senators?

The Hon. the Speaker: Senator Richards, are you asking for five more minutes?

The Hon. the Speaker: I’m sorry, Senator Richards’ time has expired. Do you want to ask a question, Senator Omidvar?

The Hon. the Speaker: All those opposed will please say “nay.”

The Hon. the Speaker: Are senators ready for the question?

The Hon. the Speaker: All those in favour of the motion will please say “yea.”

The Hon. the Speaker: In my opinion, the “nays” have it.

And two honourable senators having risen:

The Hon. the Speaker: I see two senators rising. Do we have agreement on a bell?

The Hon. the Speaker: The vote will take place at 6:02 p.m. Call in the senators.

Motion in amendment of the Honourable Senator Manning negatived on the following division: