BRIEF – Study of Bill C-11, Online Streaming Act –

An Act to amend the Broadcasting Act and to make related and consequential amendments to other Acts Ottawa, September 21, 2022 DEVELOPING AN EQUITABLE CANADIAN BROADCASTING SYSTEM THAT ALSO SUPPORTS OUR CULTURAL SOVEREIGNTY

PAGE i Brief submitted to the Standing Senate Committee on Transport and Communications in the context of its study of Bi ll C-11 By Association québécoise de l’industrie du disque, du spectacle et de la vidéo (ADISQ) September 21, 2022. Table of Contents

Summary of ADISQ’s calls for action ....................................................................................... 1 1.

The Broadcasting Act: a cornerstone of our culture that needs to be modernized ........... 3 1.1 The Broadcasting Act: a tool for protecting our national identity and cultural sovereignty ............................................................................................................................. 3 1.1.1 Principles that facilitate implementation of a solid regulatory framework …… 4 Commercial radio ........................................................................................................... 4 Sirius XM ........................................................................................................................ 5 Stingray ........................................................................................................................... 7 Television ........................................................................................................................ 7 1.1.2 A flexible system is essential for our music ............................................................ 7 1.2 The Broadcasting Act needs to be reviewed .............................................................. 9 1.2.1 Self-regulation that penalizes local music .......................................................... 9 1.2.2 The need for ambitious and long-lasting regulation ............................................ 14 YouTube: The premier music streaming service ............................................................. 15 TikTok, a business model based on music ..................................................................... 16 1.2.3 A legislative review anticipated by the cultural sector and the population .............. 18 2.

An essential bill that could be improved ......................................................................... 21 2.1 Restore a level playing field .................................................................................... 22 2.1.1 ADISQ welcomes the positive additions to C-11 as compared to C-10 ............. 22 2.1.2 The need to ensure that the bill remains strong .............................................. 23 A bill that is fair to both online and traditional undertakings ....................................... 23 Social media: a specific exclusion which should aim to be as technologically neutral as possible .................................................................................................................... 25 2.2 The CRTC: a competent regulator that the public must trust .............................. 27 2.2.1 A CRTC with more resources and powers to enforce the Act ....................... 27 — Give the CRTC sufficient resources in order to ensure oversight of the system ..... 28 — Give the CR TC coercive powers by imposing monetary penalties that take into account the size of the regulated undertaking (34.5) ....................................................... 30

PAGE ii Brief submitted to the Standing Senate Committee on Transport and Communications in the context of its study of Bi ll C-11 By Association québécoise de l’industrie du disque, du spectacle et de la vidéo (ADISQ) September 21, 2022.

Public hearings: essential for enabling Canadians to participate in the ecosystem……. 32 — Restore the process for appeal to the Governor in Council in order to challenge decisions (28(1)) ............................................................................................................ 34 — Make decisions that demonstrate, with evidence, how they meet the objectives set out in the Broadcasting Policy for Canada ...................................................................... 35 3.

Conclusion ........................................................................................................................ 36

PAGE 1 Brief submitted to the Standing Senate Committee on Transport and Communications in the context of its study of Bi ll C-11 By the Association québécoise de l’industrie du disque, du spectacle et de la vidéo (ADISQ) September 21, 2022.

Summary of ADISQ’s calls for action 1. ADISQ s upports all the calls to action by the Coalition for the Diversity of Cultural Expressions (CDC E), emphasizes some of these calls to action and proposes a number of specific additions. 2. A bill that truly restores the balance. a.

Section 3 (1)(

f) must treat online and conventional undertakings equally, given that the CRTC has always had the flexibility needed to accommodate the differences between each type of undertaking [CDCE]. b. The Act must remain as technologically neutral as possible to allow the CRTC to regulate all broadcasting activities that have an impact on the achievement of the objectives of the Broadcasting Policy for Canada — both now and in the future (clauses 4.1 and 4.2). The Directions to the CRTC should clearly indicate that Parliament ’s intent is to increase the level of support for the ecosystem. 3.

Developing a CRTC with a renewed mission: resources, powers, transparency and communications a. Maximize the financial resources of the CRTC and delete paragraph 3.1 of

section 11, which is being proposed by Bill C-11, as it not only risks creating an inequity but also reduces the CRTC’s ability to ensure that it can function properly and implement the reform of the Broadcasting Act (11(3.1)); b. Give the CRTC significant power to impose sanctions that take into account the size of the targeted undertaking, by increasing the maximum amounts prescribed in the event of non-compliance with the Act (section 34.5 [1]); c. Reintroduce public hearings (section 18 [1]) for orders, and more specifically, in sections 11(2)(

b) and 11.1(5)(

b) as well as in sections 9.1(1) and 12(2) [CDCE], and make appearances at public hearings required by default. d. Reintroduce the appeal to the Governor in Council for all decisions made by the Commission ( not just decisions related to licences) (28 (1) and 2(1)) [CDCE].

PAGE 2 Brief submitted to the Standing Senate Committee on Transport and Communications in the context of its study of Bi ll C-11 By the Association québécoise de l’industrie du disque, du spectacle et de la vidéo (ADISQ) September 21, 2022.

Introduction Association québécoise de l ’industrie du disque, du spectacle et de la vidéo ( ADISQ), represents close to 150 independent businesses in Quebe c, which operate in all sectors related to production of audio recordings , shows and videos, including producers, record companies, talent managers, record distributors, publishers, performing arts agencies, event spaces, show promoters, promotional agencies and media relations agencies. This musical ecosystem is the only one of its kind in the world.

Indeed, 95% of recordings, shows and videoclips by French- speaking Canadian artists are produced through independent structures. Everywhere else, music production is predominantly the domain of the major players, which now control approximately 70% of revenues from music industry recordings around the world. In a so-called prototype industry, namely one which involves very high levels of investment and highly uncertain returns , our businesses have always been able to count on the local population’s attachment to its music – an attachment stimulated by a Broadcasting Act that has proven its worth for decades .

According to the Observatoire de la Culture et des Communications du Qué bec (OCCQ), year-over-year market share for sales of physical albums have always hovered around 50%, even though we have seen album sales plummet in the past 20 years. Unfortunately, in a context of dissipating audiences and the migration of listeners to foreign platforms, our artists are finding it increasingly difficult to connect with their audiences. This challenge can largely be explained by a dilution of the effects of the Broadcasting Act, which has not kept abreast of consumer habits.

As a result, barely 8% of today’s listeners on online audio streaming services in Quebec listen to French language music : this is an alarming situation that needs to be addressed urgently. ADISQ is therefore grateful to have the opportunity to present its comments on Bill C-11 to the Standing Senate Committee on Transport and Communications, as th is bill is of paramount importance to members of ADISQ.

After reiterating the importance of the Broadcasting Act and the concrete effects it has produced for our sector over the past few decades, we will once again emphasize the urgent need to modernize this Act with the speedy adoption of Bill C-11. We will then highlight a number of specific propos als that we deem necessary to best serve the Canadian broadcasting system, the public interest and the space for creating and producing French music.

Our comments have two primary objectives: — To ensure that the bill puts an end to the entrenched inequity that has existed at the heart of our system for 20 years, by establishing a new balance whereby each stakeholder plays an equal

part in maintaining our identity and the diversity of our cultural expressions. Establishing this new balance will not onl y ensure that

PAGE 3 Brief submitted to the Standing Senate Committee on Transport and Communications in the context of its study of Bi ll C-11 By the Association québécoise de l’industrie du disque, du spectacle et de la vidéo (ADISQ) September 21, 2022. Canadian content is available on all broadcasting services but will also increase financial support for production and marketing of such content; and — To ensure that the bill contributes to enhancing Canadians’ confidence in the CRTC with measures that strengthen the CRTC’s powers and responsibilities and facilitate greater transparency. 1.

The Broadcasting Act: a cornerstone of our culture that needs to be modernized 1.1 The Broadcasting Act: a tool for protecting our national identity and cultural sovereignty The Broadcasting Act is a key tool of Canada’s cultural policy and has been instrumental in the construction and preservation of the Canadian identity. Its primary purpose is to protect and support all of the cultural expressions that make up Canada.

This objective is reflected in the philosophy of the UN Convention on the Protection and Promotion of the Diversity of Cultural E xpressions; Canada is not only a founding member of the UN, but is also a signatory to the Convention.

The Convention: − Recognizes the need “ to take measures to protect the diversity of cultural expressions, including their contents, especially in situations where cultural expressions may be threatened by the possibility of extinction or serious impairment”; and − Establishes the rights of sovereign States “ to maintain, adopt, and implement policies and measures that they deem appropriate for the protection and promotion of the diversity of cultural expressions on their territory.” The existing Broadcasting Act states, in particular, that the syst em, structur ed around Canadian-owned broadcasting undertakings, must: − Serve to safeguard , enrich and strengthen the cultural, political, social and economic fabric of Canada; − Contribute, in an appropriate manner , to the cr eation and presentation of high- quality Canadian programming; − make maximum use, and in no case less than predominant use, of Canadian creative and other resources in the creation and presentation of programming; − reflect equal rights, linguistic duality as well as the multicultural and multiracial nature of Canadian society.

PAGE 4 Brief submitted to the Standing Senate Committee on Transport and Communications in the context of its study of Bi ll C-11 By the Association québécoise de l’industrie du disque, du spectacle et de la vidéo (ADISQ) September 21, 2022.

Parliament has also historically deemed that “the objectives of the broadcasting policy set out in subsection (1) can best be achieved by providing for the regulation and supervision of the Canadian broadcasting system by a single independent public authority .” This role is fulfilled by the CRTC, an independent administrative tribunal with policy-setting powers — a modus operandi used in many democratic societies . The CRTC is re sponsible for regulating and supervising broadcasting and telecommunications in the public interest .

This public interest is itse lf defined in the objecti ves of the Broadcasting Act and the Telecommunications Act. 1.1.1 Principles that facilitate implementation of a solid regulatory framework The Broadcasting Act has therefore provided a legislative framework to regulate Canada’s entire broadcasting system through the CRTC, which needs to be flexible in applyi ng the law in order to guarantee an efficient and adaptable regulatory framework.

The CRTC implements the Broadcasting Ac t by establishing regulatory policies and granting licences to broadcasters that impose conditions for creating and using Canadian programs based on two types of obligations: — obligations concerning content presentation; and — obligations concerning funding of content. The regulatory authority must be able to adjust in order to avoid rapid obsolescence of the legislative framework as technological and socio -economic changes occur .

It must therefore be able to enforce the above-referenced obligations for both old and new stakeholders involved in the broadcasting syst em, while adapting to the s pecificities of each. As we shall now see, this has been the case for sever al years with decisions which have provided significant support to the music community. Commercial radio A key regulatory framework for the music industry is the Commercial Radio Policy.

With respect to pr esentation, the main obligations of commercial radio stations operating in Canada’s francophone markets are currently the following:1 — 35% Canadian music content per broadcast week — 55% of French-language vocal music during prime time and 65% during the broadcast week 1 We should point out that these obligations could change soon. In fact, since 2020, the CRTC has been reviewing the regulatory framework for commercial radio. This process has raised questions about all the funding and promotion mechanisms for local cultural content.

In the context of its intervention, ADISQ made a number of proposals to ensure: - Better exposure of our music with new prime time hours and 50% of local French music devoted to emerging artists or new music; - A fairer contribution system linked to the size of the undertaking and establishment of a new linguistic balance.

PAGE 5 Brief submitted to the Standing Senate Committee on Transport and Communications in the context of its study of Bi ll C-11 By the Association québécoise de l’industrie du disque, du spectacle et de la vidéo (ADISQ) September 21, 2022. These obligations have long offered significant visibility to our music. They have contributed to our industry being structured around a strong star system. Members of the general public, who are more exposed to local music, have developed a strong attachment to this music, which has become an inherent part of their identity.

With respect to funding of Canadian content, commercial radio stations are subject to the following obligations: — radio stations earning $1,250,000 or more in revenues must contribute $1,000 plus 0.5% of the portion of revenues above $1,250,000 in so-called annual contributions to Canadian content development; — In the context of a transaction, purchasers must make contributions of tangible benefits equivalent to a minimum of 6% of the value of the purchase price.

These amounts, which are currently declining, are mostly remitted to the Musicaction and RadioStar funds, recognized for their excellence in managing and supporting the production and marketing of music domestically and for export. They also serve to support so -called discretionary activities, for example, music festivals or song competitions. In other words, a key part of funding for Canada’s French-language music industry is based on the effects of the Broadcasting Act. Sirius XM Sirius XM is a satellite subscription radio undertaking that was formed as a result of a merger between Sirius and XM in 2008.

In 2005, the two companies were authorized to broadcast in Canada, since the country did not have the satellite capacit y to offer such services. However, the services were required to create Canadian entities in order to carry out broadcasting activities in Canada.

Thanks to a licence granted by the CRTC ,2 Sirius XM is now subject to the following obligations with respect to content presentation: — No less than 10% of the total number of unique channels distributed by the licensee shall be original Canadian- produced channels , including a minimum of 25% of French-language original Canadian-produced channels; — th e licensee shall devote at least 85% of the total musical selections broadcast in a week on all Canadian -produced channels, considered together, to Canadian selections as defined in

section 2.2(2) of the Radio Regulations, 1986; — In no case may a subscriber receive a package o f channels with fewer than four French-language original Canadian-produced channels; and 2 CRTC, Broadcasting Decision CRTC 2019-431, Sirius Canada and XM Canada — Licence Renewal and Licence amendments, 19/12/2019: https://crtc.gc.ca/eng/archive/2019/2019-431.htm

PAGE 6 Brief submitted to the Standing Senate Committee on Transport and Communications in the context of its study of Bi ll C-11 By the Association québécoise de l’industrie du disque, du spectacle et de la vidéo (ADISQ) September 21, 2022. — in no case may a subscriber receive a package of channels with fewer than three French-language and three English-language Canadian music channels. In concrete term s, these obligations enable Canadian francophone artists to benefit from three music channels dedicated to them, which are broadcast across the country (and even in the United States).

Since these requirements for the presentation of Canadian content were not very stringent (particularly when compared to those imposed on commercial radio stations), the CRTC chose to impose more onerous funding obligations:3 — Sirius XM must allocate 4% of its revenues to Canadian content development , including no less than 22% to FACTOR, no less than 12% to MUSICACTION, no less than 6% to the Community Radio Fund of Canada and the remainder to other eligible initiatives (discretionary contribution).

These funds help support a plethora of events, festivals and music competitions, in addition to providing a significant contribution to Musicaction. In terms of size and based on the various obligations mentioned above, Sirius XM is now a key pillar of our industry4 despite the fact that, at the time, the introduction of satellite radio to our country came with an unprecedented amount of foreign content . Based on considerations related to technical con straints, the nature of the applicants , stakeholder requests and the objectives of the Act , the CRTC was able to strike a balance in the rules that it imposed.

Stingray Another music broadcasting service that benefits from specific measures is Stingray Music, a national pay audio service . Stingray must ensure that at least 35% of the musical selections broadcast on Canadian-produced pay audio channels are Canadian and 25% of its channels are required to broadcast at least 65% of musical selections in the French language.

This undertaking allocates 4% of its income to Canadian content development. 3 In the context of renewing the licence for 2012, the CRTC referenced the link between the higher threshold for Canadian content development (CCD) and the much lower threshold for Canadian content: “71.

In assessing the CCD contribution level, the Commission is mindful of the objective of the Act to ensure that each broadcasting undertaking makes the greatest practicable use of Canadian creative and other resources, as well as the factors assessed in determining the appropriate level when Sirius Canada and XM Canada were initially licensed.

It also notes that Sirius Canada and XM Canada were licensed as satellite subscription radio undertakings, not conventional commercial radio stations, and that its monetary contributions to the broadcasting system must be assessed together with its other regulatory obligations to ensure that it continues to make the greatest practicable use of Canadian resources.” 4 Le Devoir, “La radio satellite américaine à la rescousse des musiciens d’ici,” 22/05/2021 https://www.ledevoir.com/culture/musique/603176/musique-la-radio-satellite-americaine-a-la-rescousse-des-musiciens-d- ici

PAGE 7 Brief submitted to the Standing Senate Committee on Transport and Communications in the context of its study of Bi ll C-11 By the Association québécoise de l’industrie du disque, du spectacle et de la vidéo (ADISQ) September 21, 2022. Television Television is also subject to obligations which help stimulate investments in music programs. In the francophone market, music programs are therefore protected by the ir status as Programs of National Interest (PNI ), like drama and documentary programming for example.

Over-the-air channels therefore have strong incentives for investing in such content and this has materialized in the form of programs like En direct de l’univers, Belle et Bum, La fin des faibles or Star Académie. Television licence holders are also required to allocate 0.17% of their income to the funding of videoclips , which is very important to our industry.

In 2020-2021, this amounted to $850,000 remitted to Musicaction, helping to support roughly 60 videoclips. 1.1.2 A flexible system is essential for our music Two observations can therefore be made as a result of the various obligations we have described above: — All of the decisions made by the CRTC for the purpose of achieving the objectives of the Broadcasting Act have had a significant impact on our industry.

It is because of these decisions that we now have a rich and diverse musical heritage that contributes to shaping our identity. — The CRTC has been flexible in implementing obligations imposed on broadcasting undertakings for the purpose of achieving the objectives of the Broadcasting Act. Indeed, the regulatory agency has made decisions based on the nature of these undertakings , their business model and their technological contingencies.

The CRTC’s ability to adapt has been facilitated by a technologically neutral Broadcasting Act, which defines broadcasting as follows: “Any transmission of programs, whether or not encrypted, by radio waves or other means of telecommunication for reception by the public by means of broadcasting receiving apparatus, but does not include any such transmission of programs that is made solely for performance or display in a public place.” This principle of technological neutrality is key to protecting legislation against the ris k of premature obsolescence.

It is thanks to this principle that undertakings like Sirius XM or Stingray, which appeared on our media landscape after the adoption of the Broadcasting Act , 1991, could be made subject to this Act and now contribute to the development of our music. Moreover, the CRTC recently recognized that the Act even gives it the authority to regulate online broadcasters:

PAGE 8 Brief submitted to the Standing Senate Committee on Transport and Communications in the context of its study of Bi ll C-11 By the Association québécoise de l’industrie du disque, du spectacle et de la vidéo (ADISQ) September 21, 2022. Pursuant to

section 5 of the Broadcasting Act (the Act), the Commission is required to regulate and supervise all aspects of the Canadian broadcasting system with a view to implementing the policy objectives set out in subsection 3(1) of the Act. … Although, as some interveners noted, the Direction does state that t he Commission cannot issue a licence to a non- Canadian, as defined therein, it says nothing in regard to the Commission ’s authority to exempt such broadcasting undertakings. Based on the foregoing, all broadcasting that takes place in Canada falls within the regulatory purview of the Commission.

Where the Commission determines that broadcasting is occurring within the Canadian broadcasting system, regardless of method or location of origin, it has the authority to regulate such broadcasting and relevant broadcasting undertakings. It can determine whether to license or exempt them pursuant to the Act, subject to the Commission respecting the Direction.5 However, in 1999, the CRTC chose to exempt online services, a decision which was reaffirmed in 2009 and remains in effect today.

This choice shows us that, contrary to fears currently being expressed by several critics, it would be hard to imagine the CRTC being overzealous in the context of regulating digital content . This order has had a deleterious effect on our industry and this effect has continued to worsen with the passage of time. 1.2 The Broadcasting Act needs to be reviewed For the past 20 years, our sector has been dealing with an erosion of value linked to the collapse of album sales and the emergence of new players.

From iTunes to TikTok, these intermediaries have cornered part of the value created by our industry, using music to sell devices and services as well as to produce advertising or data , without bearing any of the risks involved in the creation and production processes. These intermediaries have been able to take advantage of changes in us age while playing a leading role in this evolution of practices.

This is reflected in: — A fragmentation of music consumption due to the proliferation of ways in which to listen to music. — The displacement of audiences, platforms and media that contribute to our cultural model, which are moving to other mo des of cons umption, essenti ally, foreign platforms with little regard for this cultural model and which completely circumvent the obligations in the Broadcasting Act.

The fact that these platforms are positioned at the end of the chain, at the distribution level, means that they have significant power since they decide the ways in which the public can 5 CRTC, Broadcasting Regulatory Policy CRTC 2022-47, 23/01/2022: https://crtc.gc.ca/eng/archive/2022/2022-47.htm

PAGE 9 Brief submitted to the Standing Senate Committee on Transport and Communications in the context of its study of Bi ll C-11 By the Association québécoise de l’industrie du disque, du spectacle et de la vidéo (ADISQ) September 21, 2022. access music and therefore how music is distributed and consumed. In order to guide the music consumption of users , these platform s resort to an intermediation process that involves organizing, prioritizing, or curating proposed content.

This intermediation is not only based on mining and exploiting the personal data of users but also on various prescribed devices involving human interventions and/or algorithmic systems. We should point out that the algorithms themselves are programmed by humans and therefore reflect a particular view of the world while serving specific objectives , in evitably focused on making profit. 1.2.1 Self-regulation that penalizes local music Today, on the Internet, the rules are set by the dominant players, a handful of platforms that rely on the use of the devices referenced above.

However, these recommended devices primarily serve a commercial objective rather than the public interest or Canada’s cultural objectives. In Quebec, the consequence is that over 90% of the music consumed via online music services is in English and is not local Quebec music: a true return to a time that led to the adoption of quotas.6 As at October 2021, we have had access to data on consumption of music streaming in Quebec; the data are therefore recent and remain fragmented.

Prior to this (between 2014 and 2021), the number of services that agreed to share data for the Quebec market was insufficient, clearly demonstrating these platforms ’ lack of sensitivity for and understanding of the reality of francophones in Canada. Today, even though we believe that the available data repr esents the dynamic s of music consumption on streaming platforms in Quebec, several players remain unaccounted for.

We would also point out that it remains impossible to obtain access to data on video cons umption, which, it must be recalled, represents approximately half of music consumption via streaming services around the world. The data presented below, provided by Luminate, were therefore compiled from October 22, 2021 to August 11, 2022, and focus on the top 5,000 titles that are listened to the most.

We are interested in the breakdown of listeners, based on the artist’s origins (from Quebec or elsewhere 7) and the language in which the piece is sung.8 6 In the memo entitled On Quotas as they are Found in Broadcasting Music (2012), published by the CRTC in 2012, we are reminded that “Top 40 AM radio in Canada in the 1960s was a playlist of heavily dominated American titles reflecting the Top 40 sound of the times as determined by American radio, television and promoted heavily in print through music and lifestyle publications,” which led to the “decision to introduce quotas,” a decision that was “accompanied with an undertaking to provide public funding.” 7 In order to determine whether an artist is from Quebec, ADISQ resorted to the methodology used by the Observatoire de la Culture et des Communications du Québec (OCCQ). 8 In order to establish the language in which a piece is sung, ADISQ resorted to the criteria used by OCCQ and the CRTC, i.e., that 50% of the singing must be in French.

PAGE 10 Brief submitted to the Standing Senate Committee on Transport and Communications in the context of its study of Bi ll C-11 By the Association québécoise de l’industrie du disque, du spectacle et de la vidéo (ADISQ) September 21, 2022.

Let us start by looking at the breakdown of listenership based on the artist’s origins: Breakdown of listenership for the Top 5,000 on online audio services, based on language Quebecker Non-Quebecker Source: Luminate (ADISQ analysis) Data compiled in Quebec from October 22, 2021, to August 11, 2022 With a 7% listenership, we can therefore see that artists from Quebec are very much a minority in the context of music streaming in Quebec.

This extremely low market share, which is already astonishing in and of itself, is all the more striking when compared to the historical market share of physical sales by Quebec artists, which was roughly 50%.9 In the context of streaming listenership, t he marginal position of Quebec artists is clearly reflected in the listenership for francophone music when we look at the breakdown of listenership based on language: 9 ADISQ, Toile de fond: Le Québec en détail 2020, https://www.adisq.com/medias/pdf/fr/Le-Quebec-en- detail-2020-FINAL.pdf

PAGE 11 Brief submitted to the Standing Senate Committee on Transport and Communications in the context of its study of Bi ll C-11 By the Association québécoise de l’industrie du disque, du spectacle et de la vidéo (ADISQ) September 21, 2022.

Breakdown of listenership for the Top 5,000 on online audio services, based on language Legend from left: Anglophone Other Francophone (non-Quebecker) Francophone (Quebecker) Instrumental Source: Luminate (ADISQ analysis) Data compiled in Quebec from October 22, 2021, to August 11, 2022 Having monopolized practically 90% of listeners, anglophone music largely dominates listenership, leaving little room for French and other languages or instrumental music.

Consequently, although streaming platforms provide access to a wide variety of musical content in most of the world’ s languages, it is English content that largely dominates in actual fact. More specifically, French language music only attracts 8% of listeners. The market share of Quebec artists who sing in French is clearly anemic. Quebec’ s francophone artists only attract 5% of listeners, an alarming figure that highlights the difficulties experienced by our artists in terms of reaching their audience on these platforms.

Moreover, a look at the top 10 most listened to tracks also clearly illustrates this finding.

PAGE 12 Brief submitted to the Standing Senate Committee on Transport and Communications in the context of its study of Bi ll C-11 By the Association québécoise de l’industrie du disque, du spectacle et de la vidéo (ADISQ) September 21, 2022. Top 10 most-streamed songs (audio) in Quebec during the Week of August 3 to 11, 2022 Source: Luminate (ADISQ analysis) This ranking, typical of the data we have noted every week since October 2021, shows that the top 10 most streamed songs are by major American stars singing in English . This has been a weekly finding since we have had access to these data.

Readers have to go much lower down the ranking in order to find French-language tracks by Quebec artists: Top 10 most-streamed French songs by Quebec artists (audio) in Quebec during the Week of August 3 to 11, 2022 Source: Luminate (analysis by ADISQ)

PAGE 13 Brief submitted to the Standing Senate Committee on Transport and Communications in the context of its study of Bi ll C-11 By the Association québécoise de l’industrie du disque, du spectacle et de la vidéo (ADISQ) September 21, 2022. We can therefore see that during the referenced week, on e would have to go down to the 33rd ranking in order to find a French-language track by a Quebec artist and that there were only two such songs in the top 100 most listened to tracks.

An alarming finding therefore emerges from the data we have just examine d: our undertakings’ ability to reach their audience has been impacted significantly. This situation can be linked to a major erosion of the effects of the Broadcasting Act, which has failed to adapt to the reality of our broadcasting system. Another finding that has emerged from this initial data is the domination of music catalogues, i.e., tracks that are over 18 months old. Consequently, there are only 2 new songs among the top 10 French tracks by Quebec artists.

During the period from October 22, 2021, to August 11, 2022, we note that new songs accounted for 30% of listenership for the top 5,000 most listened to tracks, including all tracks and French songs in particular, while catalogues accounted for 70%.

This situation highlights major challenges related to the renewal of our music and illustrates the difficulties faced by new and emerging mus ic in terms of finding a place on the streaming market. 1.2.2 The need for ambitious and long-lasting regulation The aforementioned finding therefore brings us back to the urgent need to implement ambitious, visionary and comprehensive reform of the Broadcasting Act that would remain relevant whether the service in question already exists or emerges in the years to come.

This last point is all the more important in a context where new players emerge regularly or where existing players ar e constantly changing their business model. To illustrate this, we will take a closer look at two players which feature prominently in current discussions: YouTube and TikTok. YouTube: The premier music streaming service Launched in 2005 (and subsequently purchased by Google i n 2006), YouTube started by developing a website and an application that hosted and published videos uploaded by internet users. Music very quickly became key to YouTube’s business model.

As noted by Guillaume Heuget,10 a researcher, music videos have emerged as the most watched videos on YouTube every year since 2008, a situation that remains verifiable today. According to Pex,11 as YouTube’s most appealing content, music garnered 22% of views on the platform in 2019, even though it only represented 5% of all available content.

The data was recently confirmed12 by YouTube’s Chief Business Officer, Robert Kyncl. 10 Guillaume Heuget, YouTube et les métamorphoses de la musique, 2021. 11 Pex, Music became even more valuable on YouTube in 2019, 2020: State of YouTube 2019: Music became more valuable - Pex 12 The Hollywood reporter, YouTube Is “Neck-and-Neck With Netflix on Revenue,” Says Exec, 15/09/2021: https://www.hollywoodreporter.com/business/business-news/youtube-netflix-revenue-content-licensing- 1235013502/

PAGE 14 Brief submitted to the Standing Senate Committee on Transport and Communications in the context of its study of Bi ll C-11 By the Association québécoise de l’industrie du disque, du spectacle et de la vidéo (ADISQ) September 21, 2022. Music’s popularity on this online video service has made it the premier music streaming platform. Therefore, according to IFPI,13 half of streaming activities around the world are done via audiovisual services which are dominated by YouTube. Over two billion users 14 visit the platform every month to discover music .

In Quebec, 69%15 of users of online music services indicate that they listen to music via YouTube. YouTube’s popularity for listening to music stems from a strategy employed by the American platform, which makes musi c a key element of its business model. Music is its primary “loss leader.” Over the course of its history, given the importance of music on the platform, YouTube also quickly invested in the music world, setting up partnerships with artists and groups or organizing ceremonies.

Vevo was created i n 2009; it is a leading network of video channel s specifically intended to distribute a catalogue comprised of major industry players (the contents of this catalogue still feature prominently on the platform). Guillaume Heuget also notes that since 2015, musical content has clearly been placed at the forefront of its commercial strategy and editorial stance. TikTok, a business model based on music TikTok is a mobile video sharing app la unched in 2016, which has enjoyed phenomenal growth around the world. The app therefore boasts more than one billion active users around the world.

It is owned by Byt eDance, a Chinese publicly listed emerging technologies company, which recently launched Qishui Yinyue, its own music streaming platform in China. TikTok opened an office in Toronto i n 2020. According to data from a survey of 4,003 respondents, conducted by Léger, in Quebec, on behalf of ADISQ, from March 14 to 27, 2022, 20% of the population uses the app on a daily basis. For 13- to 17-year-olds, this percentage climbs to 63%. TikTok allows users to share short format videos to which the user generally attaches a piece of music that is either suggested by the app or uploaded personally.

Initially designed for videos with a maximum duration of 15 seconds, the platform initially increased this maximum to 60 seconds, then to three minutes and recently to 10 minutes. We note that the vast majority of users consists of a passive audience that primarily accesses this media to consume content rather than to create and upload videos.

In Quebec, for example, in response to the question “Do you create videos that you share on TikTok or do you simply watch videos created by other users?” 79% of TikTok users indicated that they 13 IFPI, Music Consumer Insight Report, 2019: https://www.ifpi.org/wp- content/uploads/2020/07/091018_Music- Consumer-Insight-Report-2018.pdf 14 Lyor Cohen, Why marketers should care about the music industry’s latest transformation, Google, 2020: The changing music industry - Think with Google 15 Survey of 4003 respondents conducted by Léger in Quebec from March 14 to 27, 2022.

PAGE 15 Brief submitted to the Standing Senate Committee on Transport and Communications in the context of its study of Bi ll C-11 By the Association québécoise de l’industrie du disque, du spectacle et de la vidéo (ADISQ) September 21, 2022. only watch vide os created by others and , therefore, only 21% indicated that they create their own videos and watch videos created by others.16 The app now stands as a new vector for circulating music content.

As illustrated by its logo, which depicts a musical note, this content lies at the heart of the TikTok’s user experience and business model, as illustrated by several surveys: — According to TikTok,17 88% of users explain that sound is an essential part of their experience — According to IFPI,18 62% agree or completely agree that music is a key part of what they enjoy about TikTok — According to data obtained in March 2022, in the context of the survey cited earlier, 42% of regular TikTok users in Quebec follow music artists (professionals) on the platform.

As it developed and in order to ensure continued growth, the app, which assigns a number of staff members to manage relations with the music industry, is increasingly resorting to the use of professional music content with an increasingly assumed incursion into the music industry.

For example: — June 2021: The C anadian Musical R eproduction Rights Agency and TikTok reached an agreement for the purpose of collecting digital mechanical royalties in Canada; — July 2021: Through a partnership with TikTok, Bell announced the return of MuchMusic, a specialized music TV channel that existed from 1984 to 2010, in digital format; — August 2021: Launch of a TikTok radio channel on Sirius XM; — February 2022: creation of a TikTok radio channel in partnership with Stingray — March 2022: TikTok launches SoundOn, its own music distribution platform. 16 Survey of 4003 respondents conducted by Léger, in Quebec, from March 14 to 27, 2022. 17 TikTok For Business, Kantar report: How brands are making noise and driving impact with sound on TikTok, 8/06/2021: https://www.tiktok.com/business/en/blog/kantar-report-how-brands-are-making-noise- and-driving- impact-with-sound-on-tiktok?platform=facebook&channel=facebook-organic-post-blog- soundon- 44356&attr_source=facebook&attr_medium=organic-post&attr_campaign=facebook-organic- post-blog-soundon- 44356 18 IFPI, La consommation de musique, 2021 : https://snepmusique.com/wp- content/uploads/2021/10/Consumer-Study-IFPFI_VF.pdf

PAGE 16 Brief submitted to the Standing Senate Committee on Transport and Communications in the context of its study of Bi ll C-11 By the Association québécoise de l’industrie du disque, du spectacle et de la vidéo (ADISQ) September 21, 2022. TikTok’s increased presence in the music sector has even led MusicBusiness worldwide magazine to ask the following question: “ Is Tiktok slowly morphing into a record company?”19 TikTok is also interested in launching TikTok Music in several countries.

TikTok Music is a new music streaming app that would allow “fans to create and share playlists, download and purchase music and livestream video and audio.”20 Therefore, in this rapidly changing context, with companies characterized by their hybridity and particularly mobile activit ies, it is all the more important to have technologically neutral legislation. 1.2.3 A legislative review anticipated by the cultural sector and the population We are therefore at a turning point in our cultural history. As such, the failure of Bill C-10, despite the volunta rism of several parties, was a tremendous disappointment .

Too much time has been wasted. There is an urgent need for ambitious reform which ensures that each and every undertaking that distributes audio and video content to Canadians assumes its responsibilities and contributes to our cultural ecosystem. When Bill C -11, which provides a limited number of changes versus Bill C -10, was introduced last February, we welcomed the tabling of a necessary and eagerly anticipated bill.21 Even though there are certain aspects that can still be improved for our sector , implementation of this reform of the Broadcasting Act is crucial.

Moreover, in addition to our cultural community, this legislative review has also been eagerly anticipated by Quebec’s population, as illustrated by the data that emerged from a Léger survey of 3,507 respondents, aged 18 and over, conducted in Quebec from March 14 to 27.

The initial data c oncerns the population’s level of interest in being offered local Quebec music via their music streaming service: 19 MusicBusiness worldwide, Is Tiktok slowly morphing into a record company? 4/05/2022: https://www.musicbusinessworldwide.com/is-tiktok-or-bytedance-slowly-morphing-into-a-record- company/ 20 Rolling Stone, TikTok reportedly set to launch new music streaming service, 2/08/2022: https://www.rollingstone.co.uk/tech/news/tiktok-reportedly-set-to-launch-new-music-streaming-service- 20961/ 21 ADISQ, Dépôt du projet de loi C-11 sur la radiodiffusion : l’ADISQ salue le dépôt d’un projet de loi nécessaire et grandement attendu, https://www.adisq.com/communiques/2022/depot-du-projet-de-loi-c-11- sur-la- radiodiffusion-ladisq-salue-le-depot-dun-projet-de-loi-necessaire-et-grandement-attendu/

PAGE 17 Brief submitted to the Standing Senate Committee on Transport and Communications in the context of its study of Bi ll C-11 By the Association québécoise de l’industrie du disque, du spectacle et de la vidéo (ADISQ) September 21, 2022. I want to have the option of listening to French music from Quebec through streaming services: Agree Disagree Don’t know Source: Data from a Léger survey of 3,507 respondents, aged 18 and older, conducted in Quebec from March 14 to 27, 2022, on behalf of ADISQ.

The ’public’s desire to be offered French music from Quebec appears to be incompatible with the low market share of such music streamed in Quebec. The evidence shows that poor showcasing of local music on platforms that know little about our market and are mostly known for showcasing the music of major industry players 22 fails to satisfy the ’public’s appetite for discovering and re-discovering local music. 22 HYPEBOT, Major labels control 70% - 87% of tracks on major Spotify playlists: https://www.hypebot.com/hypebot/2022/05/major-labels-control-70-87-of-tracks-on-major-spotify-playlists.html

PAGE 18 Brief submitted to the Standing Senate Committee on Transport and Communications in the context of its study of Bi ll C-11 By the Association québécoise de l’industrie du disque, du spectacle et de la vidéo (ADISQ) September 21, 2022.

This desire to be offered French music from Quebec is reflected in the respondents’ desire to see the government intervene in this regard: The government should implement legislation to ensure that online music platforms showcase Quebec’s French music Agree Disagree Don’t know Source: Data from a Léger survey of 3,507 respondents, aged 18 and older, conducted in Quebec from March 14 to 27, 2022, on behalf of ADISQ.

In addition to supporting the adoption of legislative measures which ensure that music streaming platforms showcase Quebec’s French music, respondents support government intervention to ensure that these platforms contribute to funding for this music:

PAGE 19 Brief submitted to the Standing Senate Committee on Transport and Communications in the context of its study of Bi ll C-11 By the Association québécoise de l’industrie du disque, du spectacle et de la vidéo (ADISQ) September 21, 2022. The government must implement legislation to ensure that online music platforms contribute to funding for music as required by traditional radio stations Agree Disagree Don’t know Source: Data from a Léger survey of 3,507 respondents, aged 18 and older, conducted in Quebec from March 14 to 27, 2022 on behalf of ADISQ.

Lastly, a Canada-wide survey conducted by Nanos Research23 shows that the entire country shares the Quebec population’s desire to see streaming platforms contribute to the success of local music. According to this survey, conducted from April 29 to May 2, 67% of the population supports a bill that would require online streaming services to contribute to the creation of Canadian content. 23 The Globe and Mail, Majority of Canadians support federal government’s plan to regulate internet, poll shows, 10/05/2022: https://www.theglobeandmail.com/politics/article-liberal-internet-regulation-bill-c-11/

PAGE 20 Brief submitted to the Standing Senate Committee on Transport and Communications in the context of its study of Bi ll C-11 By the Association québécoise de l’industrie du disque, du spectacle et de la vidéo (ADISQ) September 21, 2022. 2 An essential bill that could be improved The primary objective of Bill C -11 is to ensure that online broadcasters, like traditional broadcasters, make an appropriate contribution to the Canadian broadcasting system, in terms of both funding and showcasing Canadian content , a demand that we have been making for almost 20 years.

In our opinion, there are several elements of this bill which will contribute to achieving this objecti ve, but other elements appear to be probl ematic in that they weaken the bill . We will review these aspects in this section, and propose suggestions to address the elements that seem problematic. Our analysis has two main objectives: — Ensure that all players are operating on a level playing field for the future of our culture The Act’s objectives must be as strong for online undertakings as they are for traditional undertakings.

The CRTC must also have the flexibility to adopt rules for different business models. All broadcasting undertakings must be subject to regulations both now and in the future that is hard to imagine accurately. — Powers, transparency, accountability: me chanisms that need to be improved in order to increase public confidence in the CRTC The CRTC must have the resources and powers needed to ac complish its mission. Similarly, civil society must have access to data that facilitate s an understanding of the impact of regulating services within the ecosystem.

It must also have appropriate spaces to communicate with the regulator , be able to rely on informed decisions and retain democratic challenge mechanisms. 2.1 Restore a level playing field for all stakeholders 2.1.1 ADISQ welcomes the positive additions to C-11 as compared to C-10 We would like to highlight certain positive elements that have been eagerly anticipated by our sector in the context of this process of modernizing the Broadcasting Act: — Protecting linguistic duality Protecting linguistic duality is a key element of the Broadcasting Act and is obvi ously crucial for creators and producers of French-language music content.

We welcome the fact that this challenge is addressed by the addition of several sections and the r eference, in

section 3(1)(

c) to the minority context of French in North America. — A system based on regular monitoring of compliance by undertakings The addition of a provision limiting orders to a maximum duration of seven years, like the licensing system, will enable the Commission to ensure regular monitoring of compliance by

PAGE 21 Brief submitted to the Standing Senate Committee on Transport and Communications in the context of its study of Bi ll C-11 By the Association québécoise de l’industrie du disque, du spectacle et de la vidéo (ADISQ) September 21, 2022. undertakings and confirm that undertakings are actually contributing to achievement of the objectives of the Broadcasting Act. — Introducing the notions of showcasing/discoverability of Canadian content Requiring online undertakings to showcase our culture is one of our sector ’s key expectations in the context of this legislative review.

Section 3(1) responds to that expectation, as it clearly stipulates that online undertakings must promote and recomm end Canadian programming, in both official languages, and ensure discoverability of such programming. We welcome this amendment. Moreover, during claus e-by-clause consideration of the bill, the Standing Committee on Canadian Heritage amended

section 25.22 [sic] by adding the term proactively: “Subject to

section 25.3, the Commission shall proactively make available for public inspection any information submitted to the Commission in the course of proceedings before it .” This addition will promote transparency by enabling legislative and regulatory aut horities as well as stakeholders, citizens, journalists and researchers to gain a better understanding of how our broadcasting system works and of related developments. 2.1.2 The need to ensure that the bill remains strong We will now make detailed comments on the elements that need to be corrected.

These comments are intended to contribute to the debate to ensure that the bill fulfills its objectives as best as possible, such as by improving support for the sector ’s creators and producers, by ensuring equal treatment of all stakeholders and by moderni zing oversight and application of the Act. First and foremost, ADISQ would like to reiterate that it is a member of the Coalition for the Diversity of Cultural E xpressions (CDCE) and that it therefore supports all the calls for action made by the CDCE .

That said, we would also like to emphasize a number of elements and add a few others that we believe are particularly important for the independent French music sector. A bill that is fair to both online and traditional undertakings With respect to

section 3(1)(f), ADISQ supports the following proposal by CDCE: (

f) each broadcasting undertaking shall make maximum use, and in no case less than predominant use, of Canadian creative and other resources in the creation, production and presentation of Canadian programming, and shall contribute significantly to the creation, production and presentation of Canadian programming to the greatest extent possible that is appropriate for the nature of the undertaking.

PAGE 22 Brief submitted to the Standing Senate Committee on Transport and Communications in the context of its study of Bi ll C-11 By the Association québécoise de l’industrie du disque, du spectacle et de la vidéo (ADISQ) September 21, 2022. The Broadcasting Act initially facilitated implementation of an equitable system in which all stakeholders in the broadcasting system contributed to achieving the objectives set out in the Act, based on the nature of each undertaking. This has enabled Canada to foster a rich and diverse culture that is easily accessible to the public. We are referring, in particular, to

section 3(1)(f), of the existing Act: “each broadcasting undertaking shall make maximum use, and in no case less than predominant use, of Canadian creative and other resources in the creation and presentation of programming, unless the nature of the service provided by the undertaking, such as specialized content or format or the use of languages other than French and English, renders that use impracticable, in which case the undertaking shall make the greatest practicable use of those resources.” Many CRTC decisions, including those reference d earlier concerning commercial or satellite radio, are based on this provision, which has undoubtedly served as a key element of French music’s success in Canada over the past few decades.

However, Bill C-11 introduces an alarming distinction. Indeed, this bill splits

section 3(1)(

f) into two parts in order to distin guish between objectives which apply to Canadian undertakings and those which apply to foreign online undertakings. ADISQ believes that such a distinction should be avoided, because it could result in foreign online undertakings being subject to a lower level of requirements than those impos ed on traditional undertakings, which would immediately introduc e an inequity, when the bill precisely seeks to restore balance and fairness within our e cosystem.

Eventually, this inequity could potentially be invoked by traditional undertakings seeking to advocate for relief in making contributions, thereby leading to a levelling down of standards. The bill should retain strong and unambiguous objectives, without any distinction related to the nature or origin s of the undertaking, by giving the CRTC the latitude that it has always enjoyed in implementing the rules.

Social media: a specific exclusion which should aim to be as technologically neutral as possible With respect to the question of social media, as provided in sections 4.1 and 4.2, ADISQ is opposed to any further restrictions. ADISQ would like the Directions to clearly indicate that Parliament’s intent is to increase the level of support for the ecosystem.

PAGE 23 Brief submitted to the Standing Senate Committee on Transport and Communications in the context of its study of Bi ll C-11 By the Association québécoise de l’industrie du disque, du spectacle et de la vidéo (ADISQ) September 21, 2022. Following the failure of C -10 and in order to respond to the criticism heard while it was under study, C-11 contains sections that carefully delineate the scope of the Act vis -à-vis social media.

Users of social media services are clearly excluded and the Act only applies to content that meets specific criteria intended to guarantee that such content would potentially have an actual impact on the Canadian broadcasting system and, therefore, on the objectives of the Broadcasting Policy for Canada (content that can be described as “professional” or “commercial”). Consequently, a compromise concerning the exception to the exclusion was reached: — Exclusion

Section 2.1 stipulates that a social media user does not carry on a broadcasting undertaking

Section 2.2 stipulates that a social media user does not exercise programming control. — Exception to the exclusion

Section 4.1 stipulates that the Act does not apply to programs uploaded to social media by a user, unless this program meets the following criteria: – Generates revenues – Is distributed by another undertaking which is subject to regulation – Has been assigned a unique identifier This new approach, which addresses the fears expressed by some interest groups, is still being criticized by certain stakeholders, who are lobbying to have these sections rewritten, when that is not necessary. It is common for companies to shirk regulations as much as possible.

Although legislation must evolve in order to reflect changes in the applicable social, economic and technologi cal context , the goal is not to give in to the activities of undertakings subject to this legislation. We should also point out that with respect to the non-exclusion of social media initially requested by the cultural sector, the current approach admittedly constitutes an acceptable compromise, but one which should definitely not be further weakened.

An exclusion defines a framework within which an undertaking carrying on a broadcasting activity can avoid the obligations under the Broadcasting Act without fear of being found to be non-compliant. An exclusion defined in legislation entrenches this exclusion therein and is therefore extremely difficult to change, as compared to a regulation defined by the regulatory authority. There is a major danger to i ncluding an exclusion in the Act : offering loopholes to undertakings engaged in broadcasting activities (now and in the future) whereby they would not contribute to the objectives of the Broadcasting Act.

In this case, we can envisage the emergence of the following risks:

PAGE 24 Brief submitted to the Standing Senate Committee on Transport and Communications in the context of its study of Bi ll C-11 By the Association québécoise de l’industrie du disque, du spectacle et de la vidéo (ADISQ) September 21, 2022. — Risk of introduc ing an imbalance between regulated and non -regulated activities: some social media (or stakeholders that define themselves as such) carry on broadcasting activit ies that have a major impact on our industry and the broadcasting system; exempting these undertakings from obligations would create an imbalance versus stakeholders subject to these obligations. — Risk of planned obsolescence of the new Act : if exclusions are expanded, more players, including some with a business model based on cons umption of professional pieces of music, could try to benefit therefrom and some could even change their operations to match the criteria .

Moreover, the exclusions, which include certain specific criteria , limit the CRTC’s ability to adapt as they fail to consider changes in technology, business mode ls and the way that music is consumed. This heightens the risk of obsolescence. — Risk of increased litigation that would delay impleme ntation of the new Act : Potential arguments concerning non-application of the Act for certain business models r isk multiplying litigation before the courts to challenge refusal of the exclusion on behalf of players with substantial financial and human resources.

This will result in further delays in implementing the Act and uncertainty about application of the Act for certain online broadcasters. The bill introduces these risks with the treatment it reserves for social media , which Parliament tried to mitigate as much as possible by presenting clear applicable parameters, and giving the CRTC the necessary flexibility for application purposes. Therefore, the three criteria set out in

section 4.2 are not intended to exclude, but rather to guide the CRTC in making decisions regarding whether or not to exclude certain conten t.

Since the Act must be read as a whole, this is in addition to the fact that the CRTC’s regulation and supervision of the system must not only be flexible but must also consider the nature of undertakings by endeavouring to avoid imposing obligations on any class of broadcasting undertakings if that imposition will “ not contribute in a material manner to the implementation of the broadcasting policy.” For our sector, the exception to the exclusion represents an acceptable compromise when compared with an outright exclusion, which would be unacceptable, because it would represent an unacceptable watering down of the bill.

As noted by Pierre Trudel, [TRANSLATION] if the laws are too specific , they will become obsolete when the targeted activities switch to using other technological vectors. For this reason, legislation should not be drafted with a specific u ndertaking or technology in mind; when it comes to technology, legislation must be as neutral as possible. ”24 It is important to remember that the Broadcasting Act was last revised over 30 years ago. Drafting legislation that is too rigid 24 Pierre Trudel, “ Comment légiférer pour Internet?,” Le Devoir, 26/10/2021.

PAGE 25 Brief submitted to the Standing Senate Committee on Transport and Communications in the context of its study of Bi ll C-11 By the Association québécoise de l’industrie du disque, du spectacle et de la vidéo (ADISQ) September 21, 2022. and too restrictive means running the risk of working with obsolete and therefore flawed legislation for several years. 2.2 The CRTC: a competent regulator that the public must trust 2.2.1 A CRTC with more resources and powers to enforce the Act In the context of debates surrounding modernization of the Broadcasting Act, several points of criticism were levelled against the CRTC, concerning the fact that it would have too much power.

However, at the moment, it is the major companies dominating the Internet who benefit from unprecedented power on a global scale. It is these companies that determine and impose the rules of the game on local creators, producers and members of the general public , thereby e roding the sovereignty of states and, at times, even demonstrating a certain level of arrogance toward these states. For example, under subsection 4 25 of the Exemption order for new media broadcasting undertakings, the Commission has the authority to require undertakings to provide information on their digital broadcasting activities.

However, various requests sent by the regulatory agency to foreign platforms have always resulted in stonewalling . This illustrates a profo und disdain for the institution responsible for implementing Canadian legislation. States that are reforming the digital sector are therefore trying to counterbalance the power of the major platforms, such as by giving additional powers to their regulatory authorities, whose mission is to ensure that the public interest is protected.

In that context we believe that the CRTC should be comprised of independent experts and individuals and have the financial and human resources and coercive means that reflect the ambitions of the bill. We also believe it is important to try to increase the CRTC’s responsibilities and r aise its standards regarding transparency and accountability. We therefore make a number of proposals in this section, which all seek to strengthen the CRTC’s powers and resources and thereby boost public confidence in the organization. — Give the CRTC sufficient resources in order to ensure oversight of the system.

ADISQ proposes deleting paragraph 3.1 of

section 11 of Bill C-11, because it creates an inequity between undertakings required to obtain a licence and others, and thereby impacts the financial resources needed for the Commission to function properly: 11

(1) The Commission may make regulations… 25 “4. The undertaking submits such information regarding the undertaking’s activities in broadcasting in digital media, and such other information that is required by the Commission in order to monitor the development of broadcasting in digital media, at such time and in such form, as requested by the Commission from time to time.”

PAGE 26 Brief submitted to the Standing Senate Committee on Transport and Communications in the context of its study of Bi ll C-11 By the Association québécoise de l’industrie du disque, du spectacle et de la vidéo (ADISQ) September 21, 2022.

Exception – non- licensees The only fees that may be established with respect to a broadcasting undertaking that may be carried on without a licence shall be fees that relate to the recovery of the costs of the Commission’s activities under this Act ADISQ believes that the CRTC is a competent and appropriate body; however, in order for the CRTC to fulfill its expanded mandate properly, it will clearly need additional financial and human resources. ’This is an additional responsibility that comes on top of regulation of traditional undertakings , which remain essential to our ecosystem.

This increase in resources starts, first and foremost, with government support – which therefore depends on the government’s budgetary choices – until the inclusion of new regulated undertakings boosts the CRTC’s resources. We should add that the regulation of digital undertakings requires new, targeted and sought-after expertise. Reinforcing the resources available to the authority responsible for monitoring the application of new rules imposed on digital players is common in States that want to implement this type of reform successfully.

This has been the case in the European Union, which recently adopted the Digital Services Act (DSA), intended to tackle hate speech, disinformation campaigns or the sale of counterfeit products on line, by making platforms act responsibly and requiring them to be more transparent . In the context of this mission, the [ TRANSLATION] “European Commission plans to equip itself with very strong measures in order to ensure that platforms are complying with regulations”26 and recruit 150 people27 for this purpose.

In order to ensure greater regulation of digital players, France created L’ A utorité de régulation de la communication audiovisuelle et numérique (ARCOM), a new regulatory organization, which resulted from a merger between CSA and Hadopi. Described as a “super regulator,” 28 ARCOM has a regulatory scope that has been expande d to include online platforms.

In the context of its activities, ARCOM is specifically required to conduct [TRANSLATION] “studies and analysis that clarify the operations of the audiovisual and 26 France info, Législation européenne sur les plateformes numériques: “Il n’y a plus d’impunité sur les réseaux désormais, assure Thierry Breton” 23/04/2022: https://www.francetvinfo.fr/internet/reseaux- sociaux/legislation- europeenne-sur-les-plateformes-numeriques-il-n-y-a-plus-d-impunite-sur-les-reseaux- desormais-assure-thierry- breton_5098219.html 27 JDD, Thierry Breton, EU Commissioner: “Les géants d’Internet devront s’adapter aux règles de l’UE,” 23/04/2022: https://www.lejdd.fr/Economie/exclusif-thierry-breton-commissaire-europeen-les- geants-dinternet- devront-sadapter-aux-regles-de-lue-4107380 28 L’express, L’Arcom, un super régulateur né du mariage entre CSA et Hadopi, 31/12/2021: https://www.lexpress.fr/actualites/1/societe/l-arcom-un-super-regulateur-ne-du-mariage-entre-csa-et- hadopi_2165261.html

PAGE 27 Brief submitted to the Standing Senate Committee on Transport and Communications in the context of its study of Bi ll C-11 By the Association québécoise de l’industrie du disque, du spectacle et de la vidéo (ADISQ) September 21, 2022. digital sectors and also contribute to its decision making.”29 Reflecting the resources at its disposal, the regulatory organization created on January 1, 2022, ha s already completed several high-quality studies, including studies on listening to music via audio streaming , the consumption of intangible cultural assets among seniors or the multiplication of subscription-based video-on-demand services.

With respect to the inclusion of the new regulated undertakings, it is important to remember that in order to recover all or part of the costs related to the exercise of its powers and functions, the Commission, with the approval of the Treasury Board, imposes fees on the various elements that constitute the broadcasting syst em. The expansion of the CRTC’s regulatory scope will give rise to substantial costs for the Commission and we believe that fees will need to be established for “newly” regulated undertakings. Bill C-11 proposes an interesting amendment in the

section entitled Regulations respecting licence fees: 11

(1) The Commission may make regulations:

a) with the approval of the Treasury Board, establishing schedules of fees to be paid by licensees persons carrying on broadcasting undertakings of any class; Bill C-11 stipulates that a broadcasting undertaking includes a distribution undertaking, an online undertaking, a programming undertaking and a network. Therefore, all of these undertakings should pay these fees. However, the bill proposes introducing an exception under paragraph 3.1 of

section 11 for undertakings which are not required to obtain a licence: Exception – non- licensees

(3.1) The only fees that may be established with respect to a broadcasting undertaking that may be carried on without a licence shall be fees that relate to the recovery of the costs of the Commission’s activities under this Act. This exception creates an inequity between undertakings required to obtain a licenc e and others. It also affects the Commission ’s ability to ensure it is functioning effectively . Indeed, the Commission is required to do more with the same level of resources .

That is why we are calling for it to be deleted. — Give the CRTC coercive powers by imposing monetary penalties that take into account the size of the regulated undertaking (34.5); 29 ARCOM, Nos missions, Observation et analyse : https://www.arcom.fr/observation-et-analyse

PAGE 28 Brief submitted to the Standing Senate Committee on Transport and Communications in the context of its study of Bi ll C-11 By the Association québécoise de l’industrie du disque, du spectacle et de la vidéo (ADISQ) September 21, 2022. In order to take into account the size of certain undertakings targeted by the new legislation and the fact that this legislation will be in effect for several years, ADISQ proposes increasing the maximum amounts prescribed in the event of violation of the Act based on similar international initiatives.

In addition to having resources that reflect its mandate, t he Commission must be given substantial coercive powers in order to optimize its efficiency. Bill C-11 provides for penalties that could reach a maximum of $15 million in the event of non-compliance. Do these amounts take into account the size of the targeted undertaking and the probable duration of the application of this bill? The new version of the Broadcasting Act targets large international undertakings that wield extensive power. Some, like Apple and Google, even top the world’s major stock markets.

The obligations to be imposed on these players should therefore come with suitable penalties in the event of non-compliance. This is in fact the choice that was made by several States which decided that reforms affecting digital undertakings would include measures that consider the size of undertakings when establishing penalties.

In the context of applying the DSA, the European Union “is setting clear, harmonised obligations for platforms – proportionate to size, impact and risk” with “the possibility to impose effective and dissuasive sanctions of up to 6% of global turnover.” 30 The United Kingdom recently tabled a bill entitled the UK Online Safety Bill, which requires social networks to remove illegal content and protect minors, or face stiff fines and see access to their sites blocked.

In order to ensure compliance with these obligations, the bill intends to give the regulatory authority, the Office of Communications (Ofcom), the following powers: “have a range of powers to gather the information it needs to support its oversight and enforcement activity; be able to take tough enforcement action against companies that fail to comply — if companies don’t meet their responsibilities, Ofcom will be able to require them to put things right, impose fines of up to £18m or 10% of global annual turnover (whichever is higher) or apply to court for business disruption measures (including blocking non-compliant services).” 31 30 European Commission, Digital Services Act: Commission welcomes political agreement on rules ensuring a safe and accountable online environment, 23/04/2022: https://ec.europa.eu/commission/presscorner/detail/en/ip_22_2545 31 https://www.gov.uk/government/publications/online-safety-bill-supporting-documents/online-safety-bill- factsheet#key-points-the-bill-covers

PAGE 29 Brief submitted to the Standing Senate Committee on Transport and Communications in the context of its study of Bi ll C-11 By the Association québécoise de l’industrie du disque, du spectacle et de la vidéo (ADISQ) September 21, 2022. In France, ARCOM, whose regulatory scope has been expanded to include online platforms, can now impose sanctions “of up to 6% of global turnover” or €20 million32 on such platforms. ADISQ encourages senators to ensure that the amounts provided are truly dissuasive for all targeted undertakings.

Public hearings: essential for enabling Canadians to participate in the ecosystem ADISQ supports the following proposal put forward by CDCE: When public hearing required 18

(1) Subject to any provision to the contrary, public hearings shall be held by the Commission in respect of the granting, revocation or suspension of any licence, other than a temporary network licence, and in respect of the establishment of the objectives referred to in clauses 11(2)(

b) and 11.1(5)(

b) and the making of any order under subsections 9.1(1) and 12(2). ADISQ adds the following proposals: Idem

(2) The Commission shall hold a public hearing in connection with the amendment or renewal of a licence and the amendment of regulations unless it is satisfied that such a hearing is not required in the public interest. Where public hearing in Commission’s discretion

(3) The Commission may hold a public hearing, make a report, issue any decision and give any approval in connection with any complaint or representation made to the Commission or in connection with any other matter within its jurisdiction under this Act if it is satisfied that it would be in the public interest to do so. Place of hearing

(4) A public hearing under this

section may be held at such place in Canada as the Chairperson of the Commission may designate. As soon as a stakeholder submits a request to appear bef ore the Commission, there is a presumed public interest in holding a public hearing with appearances by parties and stakeholders. · 1991, c. 11, s. 18 32 European Commission, Digital Services Act: Commission welcomes political agreement on rules ensuring a safe and accountable online environment, 23/04/2022: https://ec.europa.eu/commission/presscorner/detail/en/ip_22_2545

PAGE 30 Brief submitted to the Standing Senate Committee on Transport and Communications in the context of its study of Bi ll C-11 By the Association québécoise de l’industrie du disque, du spectacle et de la vidéo (ADISQ) September 21, 2022. · 2001, c. 34, s. 32(

A) Appearances at public hearings The analysis which leads to implementation of regulatory frameworks and requirements imposed on undertakings must give due consideration to the perspectives of all stakeholders concerned. In order to make informed decisions that are representative of the public interest, these decisions must not only be based on the input of the cultural creation and production milieu, but also on the input of broadcasters, various other representatives of civil society, like lobbying groups representing various interests and individual citizens who wish to provide such input.

Public hearings with appearances by stakeholders help to establish informed decisions that reflect the positions of the parties. In the context of these hearings, the CRTC is able to enhance its knowledge of a file by putting questions directly to stakeholders. Stakeholders are also able to respond to other interventions while presenting their own point of view.

It is therefore a process of public debate which provides a forum for the expression of different points of view ; the Commission is then able to compare, further examine and question these various perspectives in order to render a decision that best serves the public interest. However, the current version of the bill only provides for public hearings in the context of issuing licences and does not include public hearings with stakeholder appearances for the issue and renewal of orders (which, impact obligations related to showcasing talent and funding, for example).

In this regard, Monica Auer notes that with respect to online broadcasters: “Bill C-11 does not require them to be licensed but grants the CRTC broad new powers to make orders about their programming. While the CRTC would have to publish any orders for public comment, it would not have to hold a public hearing or publish the evidence it considered— just the final orders it makes. These changes raise at least two questions.

First, why—at a time when so many Canadians are legitimately worried about the state of today ’s communications media— is the government effectively limiting informed public participation in broadcast regulation?

Second, with less transparency about licensees and perhaps none at all about online broadcasters, just how meaningful can any public participation that remains actually be?” 33 For this reason, we believe that public hearings must not only be held in the context of issuing licences, but also in the context of issuing and renewing orders. 33 Monica Auer, Bill C-11 a step backwards for transparency, accountability in broadcasting, 23/03/2022: https://www.hilltimes.com/2022/03/23/bill-c-11-a-step-backwards-for-transparency-accountability-in- broadcasting/350917

PAGE 31 Brief submitted to the Standing Senate Committee on Transport and Communications in the context of its study of Bi ll C-11 By the Association québécoise de l’industrie du disque, du spectacle et de la vidéo (ADISQ) September 21, 2022. Furthermore, public hearings must be held by default in order to ensure that different stakeholders can express their point of view as best as possible and to allow the CRTC to deliberate based on an informed opinion .

The CRTC regularly uses its discretion to decide against holding public hearings with stakeholder appearances, including for key files (we are notably thinking of the renewal of the Commercial Radio Policy). However, ADISQ believes that apart from some exceptions, public hearings are essential for ensuring that the public interest is taken into account. We therefore propos e that public hearings should be mandatory by default, unless it is demonstrated that holding such a hearing would not serve the public interest.

Moreover, the decision on whether or not to allow stakeholder appearances should give due consideration to stakeholder requests during the consultation process. As soon as a credible intervenor r equests a hearing with stakeholder participation, the CRTC should honour this request. The intervenor in question could then incur charges in the event of failure to participate.

The hearing should be held in a location that can be accessed easily and anonymously by members of the public. — Restore the process for appeal to the Governor in Council in order to challenge decisions (28(1)); ADISQ supports the following proposal put forward by CDCE 28

(1) If the Commission makes a decision under

section 9 to issue, amend or renew a licence, the Governor in Council may, within 180 days after the date of the decision, on petition in writing of any person received within 45 days after that date or on the Governor in Council’s own motion, by order, set aside the decision or refer the decision back to the Commission for reconsideration and hearing of the matter by the Commission, if the Governor in Council is satisfied that the decision derogates from the attainment of the objectives of the broadcasting policy set out in subsection 3(1). As well as the addition of a definition in

Section 2(1): Decision: any measure taken by the Commission, irrespective of the form thereof (décision) The current legislation provides a process for challenging CRTC decisions by demonstrating to the Governor in Council that the decisions in question are incompatible with the objectives of the Broadcasting Act . This is an exceptional but democratic procedure which gives all stakeholders the power to act when they believe that the CRTC is rendering decisions that contradict the objectives it is seeking to achieve. The Governor in Council may then “ set aside the decision or refer the decision back to the Commission for reconsideration and hearing of

PAGE 32 Brief submitted to the Standing Senate Committee on Transport and Communications in the context of its study of Bi ll C-11 By the Association québécoise de l’industrie du disque, du spectacle et de la vidéo (ADISQ) September 21, 2022. the matter by the Commission, if the Governor in Council is satisfied that the decision derogates from the attainment of the objectives of the broadcasting policy.” The advantage of this process is its accessibility to all stakeholders both technically and financially.

There is no need to have advanced legal expertise to prepare an appeal to the Governor in Council, unless the challenge on appeal demands significant human and material resources that require advanced legal expertise and may involve a considerable amount of time. Such resources are rarely available to those in cultural circles , for example, while broadcasters have access to substantial resources.

Therefore, the appeal to the Governor in Council is an effective and e quitable process that is accessible to all ; it also holds the CRTC accountable for its decisions and consequently, must be reintroduced in the bill for all CRTC decisions. Bill C-11 actually retains this procedure, but only in the context of issuing licences, while several obligations under the policy (notably regarding showcasing and funding) would now arise from orders. — Make decisions that demonstrate, with evidence, how they meet the objectives set out in the Broadcasting Policy for Canada; ADISQ proposes introducing a provision in

section 2( 4), which aims to introduce an obligation for the CRTC to demonstrate how the decisions that it renders serve the main objectives of the Broadcasting Act: 2

(4) In exercising its powers and performing its duties under this Act, the Commission implements the Broadcasting Policy for Canada set out in

section 3 thereof, in accordance with the following principles: (

a) It should examine how its decisions can promote the following objectives: 3 (1) (d)(

i) the Canadian broadcasting system should serve to safeguard, enrich and strengthen the cultural, political, social and economic fabric of Canada; 3 (1)(

e) each element of the Canadian broadcasting system shall contribute in an appropriate manner to the creation and presentation of Canadian programming; 3 (1)(

f) each broadcasting undertaking shall make maximum use, and in no case less than predominant use, of Canadian creative and other resources in the creation, production and presentation of Canadian programming, and shall contribute significantly to the creation, production and presentation of Canadian programming to the greatest extent possible that is appropriate for the nature of the undertaking [proposal put forward by CDCE and supported by ADISQ]

PAGE 33 Brief submitted to the Standing Senate Committee on Transport and Communications in the context of its study of Bi ll C-11 By the Association québécoise de l’industrie du disque, du spectacle et de la vidéo (ADISQ) September 21, 2022. 3 (1)(i.1) programming offered by the Canadian broadcasting system should both recognize and support Canada’s linguistic duality by placing significant importance on the creation, production and broadcasting of original French language programs, including those from French linguistic minority communities. (

b) In its decisions and orders, it should demonstrate its compliance with the requirements set out above and indicate how its decisions can promote the Broadcasting Policy for Canada. In its decisions and orders, it should demonstrate its compliance with the requirements set out above and indicate how its decisions can promote the Broadcasting Policy for Canada The lack of transparency may create distrust for institutions. The Commission’s decision- making processes must be as transparent as possible. Decisions are already required to take public interest into consideration.

However, the Commission’s decisions rarely explain the link between the imposed requirements and the objectives the Commission is seeking to fulfill. ADISQ believes that the public processes that occur after the adoption of the Act will have major impacts on Canada ’s cultural sovereignty, for example, on the sustainability and success of independent cultural productions or productions in minority languages. Requiring the CRTC to demonstrate how its decisions serve to achieve these objectives would make them less vulnerable to challenges.

Consequently, the Act should impose a strict framework on the Commission that requires it to demonstrate how its decisions fulfill the objectives set out in the Broadcasting Policy for Canada. 4 Conclusion In conclusion, we would like to reaffirm that for the cultural sector, it is important for Bill C-11 to be adopted as quickly as possible; our artists and cultural industries pay the price for each minute that is lost. The issue here is the protection of our cultural sovereignty and our identity, a non-partisan matter which should unite all our political representatives.

Like Bill C-10 before it, Bill C-11 is now the subject of several points of criticism which, in our opinion, are inaccurate. In this context, it is important to highlight certain facts by reiterating the fact that the current bill: — is not aimed at regulating consumers, but rather at broadcasting undertakings; — will expand consumer choice, making it easier for consumers to discover local content without inhibiting their freedom of choice;

PAGE 34 Brief submitted to the Standing Senate Committee on Transport and Communications in the context of its study of Bi ll C-11 By the Association québécoise de l’industrie du disque, du spectacle et de la vidéo (ADISQ) September 21, 2022. — will respect users to the extent that exposure to local content is not incompatible with the personalization of user experiences , given the plethora of talent and diversity of content available in Canada; — will promote diversity of cultural expression, which is an undeniable corollary of a healthy democracy and full freedom of expression; — will maintain the CRTC ’s historical ability to establish service -specific rules to address the unique nature of each business model; — will not give the CRTC a censorship role; the CRTC never assumed such a role for radio and television 34 and the CRTC will still be required to re spect the Canadian Charter of Rights and Freedoms.

Despite the above elements, Bill C-11 includes certain elements that have raised concerns in the cultural sector and must be reviewed. The recommendations that we are making here are therefore intended to facilitate the adoption of legislation that will remain relevant over time and accomplish its objectives, namely: — Ensure that all broadcasters contribute to the objectives of the Broadcasting Act; — Offer a greater level of support to the sector’s creators and producers; — Ensure that all system stakeholders are treated equally; and — Modernize the oversight and enforcement of the Act.

We would like to thank the Standing Senate Committee on Transport and Communications for giving us the opportunity to communicate key recommendations for our music in the context of these consultations concerning Bill C-11. 34 As Ian Scott recalled in a speech delivered on April 1, “The CRTC issues about 250 broadcasting decisions annually. Not a single one has ever been successfully challenged on the basis that it somehow infringed Canadians’ freedom of expression.”