Heritage Minister’s Policy Direction to the CRTC gives few C-11 hints

June 9, 2023

Yesterday, Heritage Minister Pablo Rodriguez issued his draft Policy Direction to the CRTC on implementing Bill C-11. 

Policy directions can be maddingly vague. This is deliberate and mostly a reflection of the Broadcasting Act’s restrictions on the federal government giving specific instructions to the independent regulator. It means we have to heavily parse every word and read between the lines.

Here are highlights of some of the more contentious issues:

YouTubers

The Minister has fulfilled his promise —previously made both verbally and in writing— to forbear from regulating videos and music uploaded by YouTubers. That means the CRTC cannot impose ‘discoverability’ regulations affecting the search rankings of those programs.

The legalese is that YouTubers are defined in the Policy Direction as ‘social media creators’ which ‘means a person who creates programs that are primarily intended for online distribution as user uploaded programs through social media services.’ 

As for YouTubers’ video and music, section 4(2) of the Act excludes that content from the CRTC’s jurisdiction unless they are specifically included by a CRTC-made regulation.  The Minister has directed the CRTC to regulate only “in respect of programs that have been broadcast, in whole or in significant part, by a broadcasting undertaking that is required to be carried on under a licence or that is required to be registered with the Commission but does not provide a social media service.”

Translated, that means the only way that third party uploads to YouTube or TikTok can be regulated for discoverability is if the content already appears on other regulated platforms such as television, radio and online services such as Netflix, Crave, Roku or StackTV. (YouTube’s own proprietary music service, YouTubeMusic, is not a third party upload and therefore is subject to regulation).

Algorithms

Consistent with his testimony before Parliamentary committees, the Minister has directed the CRTC to focus on ‘outcomes’ when devising discoverability regulations in support of showcasing Canadian content. 

This is code for giving online broadcasters free reign in how they choose to promote Canadian content. The prospect of the CRTC ordering online undertakings to improve their ‘outcomes’ by manipulating their algorithm-based content rankings appears to be described as a last resort:

Discoverability and showcasing – The Commission is directed to consider both established and emerging means of discoverability and showcasing to promote a wide range of Canadian programming. In making regulations or imposing conditions in respect of discoverability and showcasing requirements, the Commission is directed to prioritize outcome-based regulations and conditions that minimize the need for broadcasting undertakings to make changes to their computer algorithms that impact the presentation of programs.

This does raise the possibility that online undertakings can minimize their ‘discoverability outcomes’ by maximizing the acquisition of Canadian content instead. The CRTC left that route open in its recent notice of public consultation on the implementation of C-11.

The Definition of Canadian Programming

The Minister has made statements over the last two years in which he seemed receptive to revising the 40-year-old point system defining a Canadian program for the purpose of subsidies and regulation. The new legislative text in section 10 (1.1) of Bill C-11 did not drive any particular change. 

The contentious issues are twofold. The current headcount-method (what counts is the nationality of producers, talent and crews) does not give credit for identifiable national themes in the content. Secondly, the current requirement that Canadian producers retain the intellectual property rights in the Canadian programs they sell to broadcasters is opposed by Netflix and the US streamers. 

The Minister’s Policy Direction gives few hints and no discernible direction to the CRTC on how to handle these issues other than a subject heading in a backgrounder which instructs the CRTC to ‘redefine’ Canadian programs without saying how. 

Level Playing Field

The main reason for legislating Bill C-11 was to require Netflix and the other foreign broadcasters to pull their weight in financing and promoting Canadian programming in comparison to the expectations on Canadian broadcasters.

The Act was a little mushy on this point, requiring in section 3(1)(a.1) that the US contributions have to be ‘appropriate.’ The government rejected an amendment proposed by Bell to upgrade the American contributions to ‘fair and equitable.’

The Minister has now told the CRTC that the streamers’ contributions, both financial and non-financial, “must be equitable given the size and nature of the undertaking and equitable as between foreign online undertakings and Canadian broadcasting undertakings.” This is not what the Hollywood streamers wanted to hear. 

On the other hand, the Policy Direction on the ‘use of Canadian human resources’ is teasingly vague. It asserts that the Commission should ‘ensure that the [broadcasting] sector maximizes the use of Canadian and other human resources in the creation, production and presentation of programming in the Canadian broadcasting system.’ 

This means that the mulligan the Liberals handed to the foreign streamers in section 3(1)(f.1) of the Act —essentially a weaker requirement to hire Canadians on the shows they make or commission— is still very much in play and up to the CRTC to figure out. In the worst case scenario, it could even mean that Netflix will get credit for hiring Canadians on the US shows they make so they can hire fewer Canadians on the Canadian shows they produce.

Special Attention

The Minister has followed through with the commitments in C-11 to focus on more involvement of Indigenous peoples, equity-seeking communities and official language minority communities in the growth of programming serving those audiences.

Related to that, the Minister has also directed the CRTC to “support broadcasting undertakings that offer programming services that are of exceptional importance to the achievement of the broadcasting policy set out in subsection 3(1) of the Act.” That is policy semaphore for the CRTC to look at creating an industry subsidy for existing television channels that serve the LGBTQ+, multi-ethnic, disabled, and English and French language minority audiences that were disadvantaged by Bill C-11. The Minister had suggested as much when he appeared before the Senate.

And finally, the Minister gave faint hope to the local news stations that were studiously ignored in Bill C-11 by directing the CRTC to “consider the importance of sustainable support by the entire Canadian broadcasting system for news and current events programming, including a broad range of original local and regional news and community programming.”

Up Next

The CRTC has set June 27^th as the deadline for interested parties to make written submissions on how to implement C-11. A request to extend the deadline is outstanding. [Update: the Commission has extended the deadline to July 12].

The draft Policy Direction will be posted in the Canada Gazette tomorrow and will be subject to public comment, possible changes and then final publication.

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