November 9, 2022 Senate of Canada Standing Committee on Transportation and Communications Re: Study on the Subject Matter of Bill C -11,

An Act to amend the Broadcasting Act and to make related and consequential amendments to other Acts 1. The Canadian Media Producers Association (CMPA) welcomes the opportunity to make submissions to the Standing Committee on Transport and Communications (Committee) on its Study on the Subject Matter of Bill C-11,

An Act to amend the Broadcasting Act and to make related and consequential amendments to other Acts (Bill C-11). A STRONG AND VIBRANT FUTURE FOR CANADIAN CONTENT 2. Canada's independent producers play a critical role in strengthening Canadian identity in the digital age and in establishing a vibrant content marketplace. The Canadian content production sector is a key contributor to Canada’s creative economy, generating $2.75 billion in production activity and over 82,000 full-time equivalent jobs in 2021. 1 3.

Our uniquely Canadian industry creates jobs, contributes to GDP, trains and promotes our talent, tells our stories, asserts our national sovereignty, and is independent from the dominant market power of both Canadian broadcasters and foreign streaming services. 4.

Canada’s cultural policy framework has helped to deliver both massive hits and culturally important independently produced content to domestic and international audiences such as the Emmy- winning Schitt’s Creek, Transplant, Sort Of , Heartland, Hudson & Rex, Endlings, PAW Patrol, This Hour Has 22 Minutes , The Porter, Gespe’gewa’gi: The Last Stand, as well as the recent Cannes Official Selection Crimes of the Future. 1 Profile 2021: Economic Report on the Screen-based Media Production Industry in Canada, published by the CMPA in collaboration with the Department of Canadian Heritage, Telefilm Canada, the Association québécoise de la production médiatique (AQPM) and Nordicity, p. 4 (Profile 2021).

The Canadian content production sector does not include in-house broadcaster production ($1.07 billion) or foreign location and service (FLS) production ($5.27 billion).

2 5. Canada’s broadcasting legislation is the backbone of our current vibrant domestic market. But we are now at a crossroads. With effective modernized legislation in place, the globalization of content and the growth of digital technologies can be a huge opportunity for Canadians. However, if we fail to impose a new set of rules that provides our domestic industry with the tools needed for it to continue to reflect and represent our culture , this same global digital evolution will instead become an existential threat. 6. The CMPA strongly supports Bill C-11.

It addresses important issues such as online broadcasting and a more inclusive system that provides opportunities for creators from equity-deserving and sovereignty-seeking communities. 7. But, in our view, four amendments are necessary to ensure a healthy domestic market for the creation, production, and commercialization of Canadian content. 1. The Bill must revert to the existing text in the Broadcasting Act such that the broadcasting policy objective in subparagraph 3(1)(i)(

v) specifically and exclusively recognizes the significant contribution from the Canadian independent production sector. 2. The Bill must apply the existing standard for the use of Canadi an resources in the creation, production, and presentation of Canadian programming to all broadcasting undertakings, including foreign streamers. 3. The Bill must empower the CRTC to implement and enforce collective terms of trade, to provide for a greater balance in bargaining power between programming services and independent Canadian producers. 4.

The Bill must provide a right of appeal to federal Cabinet for CRTC decisions establishing contributions made by online undertakings. 8. For further reference, our proposed amendments are attached in Appendix A. AMENDMENT #1: A SIGNIFICANT CONTRIBUTION FROM THE INDEPENDENT PRODUCTION SECTOR 9. Canada’s independent producers are key contributors to a dynamic creative sector that reflects and represents our culture. 10.The importance of this contribution is demonstrated in a number of regulatory policies and government initiatives .

Conditions of licence require Canadian broadcasters to commission content from independent producers, tax credits provide incentives to produce that content and organizations such as the Canada

3 Media Fund and Telefilm Canada establish criteria for funding that will financially support it. 11.These initiatives are all, at least in part, driven by an existing provision in the Broadcasting Act (Act) which reads as follows: 3(1) It is hereby declared as the broadcasting policy for Canada that [….] (

i) the programming provided by the Canadian broadcasting system should […] “(

v) include a significant contribution from the Canadian independent production sector”. 12.Unfortunately, an amendment was carried at the House of Commons Heritage Committee that dilutes (and confuses) the recognition of independent producers’ contribution to the programming in the Canadian broadcasting system. Carried: “(

v) including the greatest contribution from the Canadian production sector, whether it is independent or affiliated with or owned by a broadcasting undertaking”. 13.As proposed, this amendment completely misses the point of this section. The point is not to also recognize the programming produced by others (i.e.: broadcasters). Rather, the point has been, and should continue to be, that our system must include contributions from producers that are independent from broadcasting undertakings. 14.The contribution of independent producers is now more important than ever.

Independent producers are small, medium and large -sized companies that operate in cities and towns across Canada. They are entrepreneurs consistently working on new ideas, technologies and financing opportunities, investing the time, energy and resources needed to develop new creative for our cultural industry. They strive to have audiences see themselves reflected onscreen, learn from others, confront ideas and make informed choices.

It is the diversity of the independent producers themselves that can best equip the broadcasting system to truly reflect the diversity of all Canadians – whether it be cultural, regional, creative, racialized or linguistic. 15.Independence guarantees that not all programming is created and controlled by those who also exhibit the programming (and collect the revenues stemming from it). I t strives to include a greater diversity of voices which can then provide a wider variety of sources within the system itself.

In effect, it is about broader participation and representation, and it is only independent producers that can fulfill that important policy objective. 16.Independence also helps to counter excessive market power, limiting self-dealing and monopolistic or oligopolistic control.

Section 3(1)(i)(

v) is meant to impose

4 some parameters on the market dominance of broadcasting undertakings , recognizing that at least some of the resources used to produce Canadian programming must be spent with companies that are independent of those that control the market and the means of exhibition. 17.Broadcasters substantiate the Heritage Committee amendment by underlining that much has changed since 1991. That is very true. But the real seismic change has occurred in broadcasting and distribution. Gone are the days of multiple buyers of Canadian content and nascent companies competing in each sector.

Broadcasters bought more TV stations and specialty services, until they themselves were bought by already consolidated cable and telco B roadcasting Distribution Undertakings (BDUs), who also dominate other content distribution platforms (e.g. Internet and Mobile). These companies have horizontally and vertically consolidated their operations to the extent that industries with revenues in the billions of dollars are highly concentrated into only a handful of companies. 18.

Specific to production, 85% of the Canadian programming budgets at Bell, Corus and Rogers are already used to fund programs they or their affiliates own and control. Only 15% is spent on Canadian programs from independent producers. The amendment passed by the Heritage Committee will incent these large broadcaster conglomerates to push for control of the remaining portion of their Canadian programming expenditures.

And this would just be another strategic consolidation play for these companies, as was the BDU acquisition of specialty services and the sports services acquisition of sports teams (i.e. better to pay fees to your own corporate affiliate than to an independently owned and operated organization). 19.Allowing broadcasters like Bell Media or Rogers Media to own and control even more Canadian programming would do precious little to impact the finances of such large conglomerates . But it would come at a great cost to the domestic Canadian content production sector.

It would reduce the participation of independent producers at the precise point in time when their diverse perspectives would matter most, when we have collectively acknowledged the need for broader involvement. These kinds of objectives will not be fulfilled by diminishing the participation of independent producers, large and small, from communities across Canada, and instead enhancing it for a very small number of broadcaster conglomerates all of whom are headquartered in two large cities. 20.There is also no need to protect in- house broadcaster production teams.

CRTC annual returns clearly demonstrate that broadcasters do not use independent producers for local news programming. More importantly, broadcasters produce news content for multiple platforms, including national newscasts, all -news channels and digital websites. As such, there are clear structural imperatives for broadcasters to continue to produce their news content by their own in- house

5 employees, not independ ent producers. Also, there is no policy justification to use funding resources and/or tax credits to support its production. 21.The new amendment proposed by the Heritage Committee is also inconsistent with the other broadcasting policy objectives set out in paragraph 3(1)(

i) of the Act. Other objectives speak to the need for programming to include and reflect a greater variety of content sources. For example, it requires that programming be varied and comprehensive, includes news and current events, refle ct linguistic duality and be provided from local to international sources. 22.The common theme amongst these objectives revolves around content diversity. And it is within this context that the contribution of independent Canadian producers is included. It is also within this context that the amendment proposed by the Heritage Committee is clearly inconsistent with the other policy objectives that drive paragraph 3(1)(

i) of the Act. 23.For all of these reasons, we urge the Senate to reinstate the current language of the Act and its specific reference to the significant contribution from the Canadian independent production sector. (In so doing, the reference to producers that are broadcaster-owned or affiliated that have been added by a Heritage Committee amendment would be removed.) This is the only

section of the Act that references independent producers, and it has acted as a specific recognition of the important contribution needed from them for the Canadian broadcasting system. AMENDMENT #2: THE MAXIMUM USE OF CANADIAN CREATIVE RESOURCES 24.Bill C-11 proposes two different standards for the use of Canadian creative and other resources in the production of Canadian programming – a higher standard for Canadian broadcasters and streamers, and a lower one applicable to foreign streamers.

As currently drafted, Canadian undertakings must employ and make maximum use, and in no case less than predominant use of Canadian talent. But foreign online undertakings must only make the “greatest practicable use” of these resources. 25.There is no sound policy rationale to have lower expectations of foreign online undertakings in the Act when it comes to the use of Canadian resources for Canadian programming.

By setting two different levels, Bill C -11 would allow foreign streamers to engage fewer Canadian creators (screenwriters, directors, actors) and crew in the creation and production of Canadian programming. That may even go so far as to allow foreign-created, foreign-owned and foreign-driven content to count as a Canadian program, defeating a primary purpose for having Canadian content obligations in the first place.

6 26.All who benefit from the Canadian system must contribute to it. That must remain a core principle. Bill C -11 should not provide a lower standard for foreign streamers. We must instead level the playing field with Canadian services and apply the existent standard to all services. 27.As a result, we are proposing a change to

section 3(1)(

f) so that all broadcasting and online undertakings, Canadian as well as foreign, are subject to the same standard whereby they shall make maximum use, and in no case less than predominant use , of Canadian creative and other resources for Canadian programming, and shall contribute significantly to the creation, production, and presentation of Canadian programming. AMENDMENT #3: THE NEED FOR COLLECTIVE TERMS OF TRADE 28.There is a massive imbalance of bargaining power between the Canadian creators and producers of content and the companies that acquire it.

First, Canadian broadcasters have significant leverage in their dealings with producers. That is because our domestic private television sector is highly concentrated . For example, 82.3% of private sector revenues are generated by the top four broadcasters ( i.e., Bell, Corus, Rogers and Queb ecor). 2 Second, f oreign web giants like Netflix, Disney + and Amazon Prime Video wield tremendous negotiating power.

With scale on such a global level, these foreign streamers tip the balance of power even further away from the creators and producers of Canadian content. 29.It is almost impossible for independent producers to negotiate with these large conglomerates, and effectively retain ownership and control of their intellectual property rights. The extent of such a market imbalance provides broadcasters and foreign streamers alike with a structure that facilitates grabs of intellectual property (IP) rights.

The deals being negotiated between producers, on the one hand, and streamers and broadcasters, on the other, are unfair and threaten the future of Canada’s content sector. We need to counter -balance that negotiating power to allow Canadian companies to own their own content, so that they can then exploit those rights in order to sustain longer-term growth. 30.IP is the driving force of the production industry. Producers invest significant amounts of time and money to develop a concept into a viable piece of IP so that it may be picked up by a broadcaster or streaming service.

However, when faced with little choice but to unconditionally surrender IP rights to sign a deal, they are forced to give up future revenues that would have otherwise provided the precious and vital resources needed to develop future projects, fairly remunerate Canadian creators and capitalize their companies. 2 CRTC Communications Market Reports, Television Sector Ownership Market Composition, 2021.

7 31.Action is needed. The Bill should ensure the CRTC is empowered to require and enforce collective terms of trade between program buyers and independent Canadian producers, enabling Canada’s independent producers to better negotiate deals to retain more IP rights in a project they have developed. 32.Collective terms of trade would provide a code of baseline conditions that would then be used in good faith negotiations between the parties when licensing a program.

It would help support key cultural and economic objectives: • rectifying market imbalances in negotiating power by providing all stakeholders with an equitable share in the risks and rewards of a production; • providing safeguards for Canadian ownership and control of the content created and produced by Canadians; and • supporting a virtuous cycle of investment and reinvestment in Canadian companies and Canadian content. 33.In 2020, a report issued by the legislative review panel (Yale Report) struck by the federal government to review Canada's communication legislative framework recognized the significantly high levels of ownership concentration in the media industry and concluded that the CRTC ought to be given the explici t jurisdiction to address the resulting imbalance of negotiating power via terms of trade.3 34.We know from other jurisdictions that terms of trade help to ensure strong, vibrant domestic production industries with high-quality content. • The domestic production sectors in the United Kingdom (UK) and France owe a great deal of their successes to their versions of terms of trade.4 In the UK, codes of practice were first introduced in 2005 and, within eight years, the capitalization of the sector more than doubled. • As European countries modernize their legislative and regulatory frameworks to implement the Audiovisual Media Services Directive (AVMSD), 5 many are 3 Broadcasting and Telecommunications Legislative Review Panel, Canada’s Communications Future: Time to Act, https://www.ic.gc.ca/eic/site/110.nsf/vwapj/BTLR_Eng-V3.pdf/$file/BTLR_Eng-V3.pdf, p. 144. 4 Under

section 285 of the UK Communications Act, every licensed public service channel (i.e., BBC, ITV, Channel 4, and Channel 5) must draw up, and from time-to-time revise, a code of practice setting out the principles it will apply when agreeing to terms for the commissioning of independent productions. These terms then became “Terms of Trade” agreements and were first introduced in the UK in 2003. Since 2010, the transfer of rights between independent producers and broadcasters in France is regulated by interprofessional agreements, which provide a general framework for the exploitation of rights.

France’s independent production quotas and protection of producer’s rights apply to all models of channels including public, commercial, pay, cable, and theme channels. 5 On November 14, 2018, the European Parliament and the Council of the European Union released Directive 2018/1808, also known as the Audiovisual Media Services Directive (AVMSD). Among other things, the Directive requires that each European Union (EU) member state implement domestic legislation to require streaming services to (

a) ensure that at least 30% of their catalogue of audiovisual works is composed of “European works”;

8 considering approaches that ensure domestic independent producers will be able to retain a portion of their rights when working with foreign web giants. 35.The CRTC’s authority to require collective terms of trade is now more important than ever.

Canadian creators and producers work more and more with foreign web giants to serve Canadian audiences, and the modernization of broadcasting regulations is now contemplating the imposition of contributions to Canadian programming by foreign streaming services. 36.Terms of trade will ensure these contributions are meaningful and can provide the resources needed to sustain a strong and vibrant domestic production industry. 37.For all these reasons, we propose an additional amendment to subsection 9.1(1) of the Act that would confirm the CRTC’s express power to require both broadcasters and online streamers to enter into and adhere to collective terms of trade with independent Canadian producers.

AMENDMENT #4: A RIGHT OF APPEAL 38.Currently, the Act provides a right of appeal to the federal Cabinet for CRTC decisions relating to the issuance, amendment or renewal of a licence. This right of appeal is an important principle in the Act, and provides interested parties with an opportunity to challenge these CRTC decisions. But that opportunity is not broad in scope.

Instead, it is focused and targeted, limited specifically to the licensing regime, and the terms and conditions which may be imposed for them. 39.The main objective of Bill C -11 is to integrate forei gn online services into the Canadian broadcasting system and determine the contributions these services will make to the production and presentation of Canadian programming. While not licensing, the effect will be the same.

These CRTC decisions will assess the terms and conditions that may be imposed on foreign online services. 40.But Bill C -11 does not extend this right of appeal to CRTC decisions for these contributions. It does not apply to foreign online services . Their contributions decisions cannot be appealed to the federal Cabinet. 41.In our submission, there is no policy rationale for applying such an asymmetrical approach.

This right of appeal must also be extended to foreign online services, to similarly allow the federal Cabinet to act as an effective counterbalance to CRTC decisions made in this specific policy area. and (b) “ensure the prominence of those works.” Additionally, the Directive permits EU member states to require streaming services to make financial contributions to the production of “European works.”

9 COMPROMISE IS NEEDED FOR THE STATUS OF THE ARTIST ACT: 42.We understand that various parties have addressed

section 31.1 of Bill C -11 in their submissions to the Committee. This

section amends the Status of the Artist Act by adding a new

section 6(3) providing: “This Part does not apply in respect of an online undertaking, as defined in subsection 2(1) of the Broadcasting Act.” 43.The film, television and digital production industry in Canada benefits tremendously from a hig h level of industrial relations stability. Much of the production that occurs in Canada is performed by provincially regulated entities and is therefore subject to the jurisdiction of the provinces with respect to industrial relations. The CMPA has mature bargaining relationships with many of the unions and guilds representing workers in this industry.

The CMPA negotiates labour agreements with these unions and guilds, which are then accessed by producers. The CMPA has a vested interest in ensuring that Bill C-11 does not threaten this vital stability. 44.However, the CMPA understands that other parties are concerned that

section 31.1 may be overly broad, for example, by raising the concern that it may erode existing bargaining rights with respect to domestic Canadian broadcasters who may also operate online undertakings. We have therefore urged the government to propose compromise language that seeks to maintain the status quo, and respects the constitutional division of powers, as between federally and provincially regulated operations, and addresses the concerns of all relevant parties with respect to ensuring the continued industrial relations stability of our industry.

CONCLUSION The CMPA supports the passage of Bill C -11, but urges members of the Committee to adopt specific amendments to ensure a strong and vibrant future for Canadian content. We thank the Committee for this opportunity to provide our written submissions and welcome questions or comments about our recommendations. Sincerely, Reynolds Mastin President and CEO The CMPA is the national trade association for English- language independent producers. We represent more than 6 00 companies engaged in the development, production, and distribution of content made for television, film, and digital platforms.

The CMPA works to promote the continued success of the Canadian production sector and to ensure a future for the diverse content made by Canadians for both domestic and international audiences.

10 Appendix A - Proposed Amendments to Bill C-11 from the CMPA PROPOSED AMENDMENTS #1 and #2 3

(1) It is hereby declared as the broadcasting policy for Canada that […] (

i) the programming provided by the Canadian broadcasting system should […] (

v) include the greatest a significant contribution from the Canadian independent production sector, whether it is independent or affiliated with or owned by a broadcasting undertaking; (

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 th at is appropriate for the nature of the services provided by the undertaking (f.1) each foreign online undertaking shall make the greatest practicable use of Canadian creative and other human resources, and shall contribute in an equitable manner to stron gly support the creation, production and presentation of Canadian programming, taking into account the linguistic duality of the market they serve; PROPOSED AMENDMENT #3 9.1

(1) Subject to this Part, the Commission may, in furtherance of its objects, make orders imposing conditions on the carrying on of broadcasting undertakings that the Commission considers appropriate for the implementation of the broadcasting policy set out in subsection 3(1), including conditions respecting […] (

q) a requirement for any broadcasting undertaking entering into commercial arrangements with independent Canadian producers or independent Canadian broadcasting undertakings to enter into and adhere to collective terms of trade.6 PROPOSED AMENDMENT #4 28

(1) If the Commission makes a decision under

section 9 to issue, amend or renew a licence or under

section 9.1 (1) or 11.1 (2) (3) (5) (6) to make orders imposing conditions on the carrying on of a particular broadcasting undertaking, 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). 6 We are asking to add this subparagraph as a new subparagraph to

Section 9.1(1) of the Act to confirm that the Commission has the powers it needs to balance negotiating power between Canadian independent producers on one hand and Canadian broadcasters and foreign streaming services on the other