Day Four of Heritage C-11 hearings: Starring J.J. McCullough

June 2, 2022

Yesterday Conservative MPs on the Heritage Committee called as a witness their sixth YouTuber in a continuing effort to put a human face on their proposal to exclude hosting platforms YouTube, TikTok and Facebook from the scope of Bill C-11.

The star of the show on this fourth day of Heritage Committee hearings was Vancouver-based J.J. McCullough who broadcasts a YouTube channel and writes an occasional freelance gig in the Washington Post.

Among other things an avowed foe of official bilingualism, McCullough offers the kind of iconoclastic commentary that appeals to the Conservative base. To whit, he describes the Liberals’ C-11 as a law worthy of autocratic Hungarian President Viktor Orban.

Liberal MP Anthony Housefather decided that McCullough’s political theatre was an invitation to join him; it’s worth watching their exchange as Parliamentary jousting but also a stark demonstration of the philosophical divide over C-11 and generally between the populist right and the mainstream.

Earlier in his testimony, McCullough expressed YouTubers’ fears of their videos being “buried” by the platform’s opaque algorithm. That’s consistent with Irene Berkowitz’s observation in her 2019 Watchtime survey of YouTube that creators express anxiety about YouTube’s all-powerful recommendation tool.

It’s not difficult to empathize with YouTubers’ fears that the proprietary algorithm’s ability to “bury” them might be made worse by an overlay of government-required Canadian content recommendations. On the other hand, that creator anxiety makes more relevant Professor Sara Bannerman’s suggestion that the CRTC take a good look inside the YouTube black box.

The debate over discoverability on hosting platforms will continue until either the Minister issues his Policy Directive or the Bill gets passed and the CRTC holds public hearings on a long list of implementation issues, including this one.

McCullough also claimed that C-11 would result in the CRTC imposing genre quotas and other programming objectives found in sections 9(1)(a-d). However CRTC General Counsel Rachelle Frenette had previously pointed out to the Committee those programming goals —-standard in conventional broadcasting for decades— don’t apply to hosting platforms under sections 9(6) and 2.2 because they do not exercise programming control.

Next up was Bell Canada whose representatives got the usual icy reception telcos get when they show up on Parliament Hill.

Regulatory VP Jonathan Daniels explained to MPs how the economics underpinning the financing of Canadian content are crumbling, specifically that the popular American programming that Bell buys —-and whose high profit margin provides the subsidy for making unprofitable Canadian news and entertainment on CTV—- is becoming not only more expensive but not for even for sale as American media companies shift away from selling Canadian distribution rights to re-sellers like Bell and towards direct-to-viewer Internet television apps like Netflix, Paramount, Disney Plus, and so on.

The C-11 amendment Bell wants is interesting: give the CRTC regulatory authority to “provide incentives” to foreign broadcasters to partner with Canadian broadcasters in the distribution of foreign programming in Canada.

As a corollary to that, another Bell amendment would empower the CRTC to set reasonable “terms of trade” —restrictions on exploitive terms of contract— to make sure that such partnerships aren’t one-sided. The irony that the CRTC abolished the Terms of Trade between the major TV networks and independent producers in 2016 is not to be missed.

Conservative MP Kevin Waugh gave Bell’s representatives a good Parliament Hill hazing but also an opportunity to explain how broadcasting economics work, or used to work, in this country. (The five minute ParlVu clip is available here).

While MP Waugh has forgotten more about broadcasting than most of us have learned, not so his colleague Rachael Thomas MP whose errors wouldn’t need correcting if they weren’t repeated so frequently.

In her questioning of YouTuber McCullough she suggested, not for the first time, that under C-11 creators like him would have to pay a 30% revenue tithe to the “arts fund,” (presumably she means the Canada Media Fund, a film production body financed by the federal government and contributions from Canadian cable TV operators) and not be able to draw financing from it as a YouTube creator.

Some fact checking is in order here.

First, YouTube creators will make no financial contributions to any body or have any other regulatory obligations under C-11, as provided in section 2.1 of the Act.

Second, it’s possible that if YouTube were required by the CRTC under C-11 to contribute to the Canada Media Fund (for programming that creators like McCullough post) that a mean-spirited YouTube would try to claw that money back from the creators’ share of the 55/45 split of advertising revenue earned by their posts.

But it would not be 30%. It might end up being four per cent which is what Canadian cable operators pay into the fund based on the programming they distribute. Thomas is confusing the cable companies‘ 4% rate of contributions to the CMF with the Canadian broadcasters‘ obligation to spend 30% of their budget on Canadian programming.

Third, the Canada Media Fund does offer Digital-First funding programs, although there is nothing on its website indicating if YouTubers have accessed them.

Today is the Committee’s last scheduled day to hear witnesses, ending with the Minister’s appearance. And he might tell us if Mr.McCullough has anything to worry about.

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To any participants in these C-11 hearings, I would like to post a summary of some of the key amendment requests. Please send your’s to howard.law@bell.net