Implementing the Online Streaming Act: Government Policy Directive to CRTC is Missing Key Elements

Roughly a month after the CRTC charged out the gate by launching public consultations on the regulations it will issue to implement Bill C-11, the Online Streaming Act, (Implementing Canada’s Online Streaming Act: The CRTC is Fast Out of the Gate), the government has finally issued the promised Policy Directive that is to guide these consultations. The Bill itself was finally passed in late April. (Canada’s Online Streaming Act (Bill C-11) is Now Law: What Happens Next?)

It was unusual for the broadcasting and telecoms regulator, the Canadian Radio-television and Telecommunications Commission (CRTC) to have begun the public consultation process before receiving the government’s Policy Directive, but time is of the essence given the long delays in getting C-11 through Parliament. The current government has approximately 24 months to get the legislation implemented before the next general election, assuming it can maintain its hold on power in the current Parliament given its minority status. Timing will be tight given the need for public consultations and hearings. One cannot help but wonder why the Policy Directive could not have been issued earlier, at the same time the Commission launched its public consultations, but clearly some finetuning was required. The Directive gives “binding, high-level instructions” to the CRTC, supposedly an arms-length regulator. But to be fair, the Directive tells the Commission what to do, but not exactly how to do it.

Objectives of the Legislation

A ”Highlights” document issued by the Department of Canadian Heritage outlines a number of policy objectives for the legislation that cover the waterfront of the government’s social policies;

  • Ensure meaningful participation of Indigenous persons in order to address the underrepresentation of Indigenous stories and Indigenous-owned broadcasting undertakings in Canada;
  • Exclude social media creation to ensure that individual users’ and social media creators’ content cannot be regulated;
  • Support diversity and inclusion (black and racialized communities, official language minority groups; e.g. francophone communities outside Quebec);
  • Support Canadian creators and media by maximizing use of Canadian creators and strongly supporting the creation and discovery of diverse Canadian programming;
  • Implement discoverability and showcasing for Canadian programs, focusing on outcomes;
  • Redefine Canadian programs, i.e. what will count as Canadian Content (Cancon), by recognizing the crucial relevance of Canadian creative personnel having a high degree of creative control or visibility, and;
  • Create an equitable, flexible and adaptable regulatory framework by ensuring clear rules for broadcasters, including online broadcasters.

This list encapsulates the objectives found in a much longer document (the Directive itself) which is in turn subject to a 45 day public comment period.

The Directive picks up much of what was already outlined by the CRTC in its preliminary consultation documents, making it explicit (if there was any lingering doubt) that user generated content on social media platforms will not be regulated. This issue became a major distraction during the legislative process, resulting in wild and unfounded accusations that the Bill would impose censorship on Canadians. Also important is the explicit recognition that discoverability and showcasing of Canadian content can be achieved by many means, not just through manipulation of algorithms. In fact, the Directive states that the CRTC shall “implement discoverability in a way that respects and, where possible, increases choice for users, while also minimizing the need to alter algorithms of broadcasting undertakings.” (emphasis added).

International Commitments

So far so good but, in my view, a couple of key elements are missing from the directives given to the Commission. The first relates to what the document describes as “contextual factors” that need to be considered when implementing the Act. These include the UN Declaration on the  Rights of Indigenous Peoples (UNDRIP), Canada’s official languages policy of English-French bilingualism and support for Indigenous languages, the need to serve all Canadians including “equity-seeking groups”, digital transformation, and international commitments. It is this last factor I have difficulty with. It is a given that any modification of domestic policy must take into account commitments Canada has made internationally through bilateral or multilateral treaties. However, the only international treaty mentioned and thus considered relevant is the 2005 UNESCO Convention on the Protection and Promotion of Diversity of Cultural Expressions.

While a worthy document outlining the importance of cultural expression, this is a non-binding treaty. Although declared to be complementary to other treaties, the UNESCO Convention does not override or modify them. In other words, if it conflicts with other binding obligations such as WTO or bilateral trade commitments, the latter prevail. In my judgement, it is a gross and probably deliberate omission to ignore mention of any other commitments that Canada may have that could be impacted by the implementation of C-11, such as the new NAFTA (CUSMA), the Canada-EU Agreement (CETA) or bilateral agreements that Canada has with countries such as the UK. I have submitted comments to this effect, and I hope that this omission will be addressed when the final version of the Directive is released.

Defining Canadian Content

A second missing element comes into play with respect to the redefinition of Canadian content. The CRTC is directed to support Canadian creators and media, and to maximize the use of Canadians in the creation, production, and presentation of programming. This by itself is an unobjectionable, even laudable, policy objective. The question is how will it be done? The Commission is also directed to examine how it defines Canadian programs, in both the audio and audio-visual sectors, taking into account “the crucial roles played by Canadian independent producers and production companies, and the crucial relevance of Canadian creative personnel that have a high degree of creative control or visibility — such as actors, writers, directors, and showrunners — being used by both Canadian and foreign broadcasting undertakings.” This appears to be code for restricting the definition of Canadian programs to those produced and owned (in terms of copyright) by Canadians. This wording has to be read in conjunction with the section on Regulations, where a number of criteria are listed;

In its determination of what constitutes Canadian programming, the Commission is directed to;

(a) consult Canadians, the creative and production sectors and other interested parties;

(b) support Canadians holding a broad range of key creative positions, in particular those with a high degree of creative control or visibility;

(c) support Canadian ownership of intellectual property;

(d) recognize the distinctions between broadcasting undertakings that distribute audio programs and those that distribute audio-visual programming;

(e) recognize that the Act applies to foreign broadcasting undertakings;

(f) consider, as it relates to audio-visual programming, the vital role of Canadian independent producers and of the Canadian creative resources that are being used by both Canadian and foreign broadcasting undertakings; and

(g) consider whether its determination of what constitutes a Canadian program complements other Canadian content policies that are applicable to the Canadian broadcasting system, including those pertaining to audio-visual tax credits or government funding.

Among the listed objectives, (b) (c) and (f) would appear to lean toward exclusionary measures restricting opportunities for non-Canadian players. While the CRTC has not yet determined if Canadian ownership and retention of intellectual property will constitute an a priori essential condition for determination of Canadian programming, the Policy Directive seems to be pushing the Commission in that direction. The Commission should be allowed the flexibility to weigh these factors against other considerations, such as promoting the telling of Canadian stories.

Unfortunately, there is no mention of the inclusion of identifiable Canadian content among the criteria to be considered when defining what constitutes Canadian programming. This comes back to the ongoing debate, which I described in a blog post last year (“Unravelling the Complexities of the Canadian Content (Cancon) Conundrum”) as to what qualifies as Canadian content for tax credit and broadcast quota purposes. One result of the current policy is that film productions that bear almost no relationship to Canada in terms of content, recognition or storyline can qualify as Cancon, whereas quintessential Canadian stories and productions do not qualify if produced by the “wrong people” (non-Canadians) or with “foreign money”. If the policy objective is to promote the production of more Canadian stories for domestic and international audiences in order to meet political, cultural and social policy objectives, it has largely been a failure. I would like to see Canadian stories, including those that are Indigenous based and produced, and those that represent the rich diversity of Canada’s cultural and linguistic fabric, distributed around the world. And who best to do that than the international (mostly US-based) platforms that operate in Canada? But this is not going to happen if international platforms are handicapped when it comes to investing in and acquiring Canadian content for distribution.

There is also a question of fairness. Given that C-11 will require foreign online platforms to contribute to the creation of Canadian content, it seems to me it is inherently unfair to deny them the opportunity to reap the rewards of their investments by retaining or obtaining the rights for productions they have funded. Besides, the obstacles imposed will obstruct rather than facilitate the international distribution of Canadian content. Yes, the platforms could always try to license the content from the Canadian rights-holder, but that is generally not the way the business model of international content producers works, nor is it the norm in most countries that want to encourage more production of domestic content.

For example, the Motion Picture Association recently released the results of a study (“Defining Canadian Content: Approaches Taken in Other Jurisdictions and Lessons Learned for Canada”) demonstrating that in a study of ten national jurisdictions, most do not require the production company to own the copyright beyond the production stage. The study goes on to argue that this encourages global producers to invest and create content in those countries, employing national talent, which can be shared with audiences around the world. It points out that the Canadian system for defining national content is unusually narrow, providing no room for consideration of broader cultural criteria. By using such a narrow definition, Canada is losing opportunities to promote Canadian stories and culture to the world. The MPA study concludes that “More flexibility in the Canadian content system would support a helpful evolution of business and financing models in Canada, which would be more in keeping with the maturity of the sector and matching the level of sophistication of its production companies.”

The Policy Directive has an opportunity to fix this blind spot by giving the CRTC more room to manoeuvre when it comes to defining Canadian content and programming. The Directive is open for public comment (until July 25). If the definition of Canadian content was widened by incorporating additional factors, such as the nature of the content produced and its impact on promotion of Canadian identity and culture, this could result in a more flexible implementation of the Canadian content and programming definitions. It would be to Canada’s overall benefit for the government and CRTC to opt for a broader and more inclusive definition rather one that is narrow and exclusive. Walled gardens of content do not work. The audience is world-wide. The international platforms have the infrastructure to deliver and export Canadian content globally. Why not encourage them to invest in Canadian content and distribution rather than “tax” them while tying their hands?

I have submitted my views to the government via the Canada Gazette website. I encourage others to do the same.

© Hugh Stephens, 2023. All Rights Reserved

Author: hughstephensblog

I am a former Canadian foreign service officer and a retired executive with Time Warner. In both capacities I worked for many years in Asia. I have been writing this copyright blog since 2016, and recently published a book "In Defence of Copyright" to raise awareness of the importance of good copyright protection in Canada and globally. It is written from and for the layman's perspective (not a legal text or scholarly work), illustrated with some of the unusual copyright stories drawn from the blog. Available on Amazon and local book stores.

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