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Bulletin

Broadcasting Act Amendments

Fasken
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Technology, Media and Telecommunications Bulletin

On the slow news day of November 3, 2020, the Government of Canada introduced Bill C-10 An Act to amend the Broadcasting Act and to make related and consequential amendments to other Acts for first reading in the House of Commons. These are the first significant changes to the Act since 1991.

Bill C-10 includes a host of proposed amendments to the Broadcasting Act that aim to bring digital media into the broadcasting regulatory framework, specifically by making various digital media broadcasters contribute to the Canadian broadcasting system through the creation and promotion of Canadian content.

Context and Background

Many of Bill C-10's provisions were already anticipated by industry and policy makers. Several of the proposed amendments can be traced back to recommendations set out in the Final Report of the Broadcasting and Telecommunications Legislative Review Panel (BTLR), which was released in January 2020. The Government of Canada promised to act on some of the recommendations in the BTLR report in the months following its release. In summarizing that report in January, we at Fasken noted it was clear that "the federal government is preparing to use the stick - and not the carrot - to force internet content providers to invest in Canada's cultural industries and communities." Subsequent public communications from Canadian Heritage Minister Guilbeault confirmed this expectation.

The Government of Canada subsequently reaffirmed its commitment to make "web giants" contribute to the broadcasting system in its Speech from the Throne on September 23, 2020:

Web giants are taking Canadians' money while imposing their own priorities. Things must change, and will change. The Government will act to ensure their revenue is shared more fairly with our creators and media, and will also require them to contribute to the creation, production, and distribution of our stories, on screen, in lyrics, in music, and in writing.

The Governor General went on to confirm that Canadians should expect these new measures in the fall.

Key Provisions of Bill C-10

The Bill is drafted to achieve several key objectives, some of which have their roots in the BTLR report. Each of these objectives are set out below and we outline the various provisions of the Bill that are designed to help achieve them.

Inclusion of Online Broadcasting in the Scope of the Act

The most anticipated part of the Bill is the inclusion of digital undertakings within the text of the legislation. The Bill does this by creating a new category of broadcasting undertaking called an "online undertaking". Online undertakings:

  • are defined to mean "an undertaking for the transmission or retransmission of programs over the Internet for reception by the public by means of broadcasting receiving apparatus"; and
  • are brought within the scope of the Act, regardless of whether they are carried on in whole or in part within Canada, as long as they transmit programs over the Internet, including on an on-demand basis.

Updating Canada's Broadcasting and Regulatory Policy

Bill C-10 amends key elements of the broadcasting policy under section 3 of the Act to specify that the Canadian broadcasting system should serve the needs and interests of all Canadians - including Canadians from racialized communities and  Canadians of diverse ethnocultural backgrounds, socioeconomic statuses, abilities and disabilities, sexual orientations, gender identities and expressions and ages.

The updated policy encourages the development of Canadian expression by providing a wide range of entertainment and information programming to better reflect Indigenous peoples, persons with disabilities and Canada's diversity in the broadcasting system. Among other things, this includes:

  • programming that reflects the Indigenous cultures of Canada and programming that is in Indigenous languages, including by programming undertakings that are carried on by Indigenous persons; and
  • programming that is accessible without barriers to persons with disabilities.

Renewing the Regulatory Approach with Fair and Equitable Treatment of Online and Traditional Broadcasting

By establishing online undertakings as a defined class of broadcasting undertakings, Bill C-10 provides the CRTC with explicit authority to require all broadcasting services to promote, and contribute to the creation of, Canadian content. The CRTC will be given:

  • the authority to require broadcasting undertakings, including online undertakings, to make financial contributions to support Canadian content;
  • the clear power to impose "conditions of service" on broadcasting undertakings, including online undertakings, related to the proportion of Canadian programs they distribute, as well as the "discoverability" of those program in how they are presented for selection to the public;
  • the new power to amend a licence during the term on the CRTC's own motion; and
  • the formal authority to impose conditions on other broadcasting undertakings, such as imposing terms and conditions of service in contracts between distribution undertakings and their subscribers.

Modernizing the Enforcement Regime with Administrative Monetary Penalties

Bill C-10 allows the CRTC to impose administrative monetary penalties (AMPs) for violations of certain provisions of the Act. Violations would, among other things, include:

  • non-compliance with regulations or orders;
  • broadcasting when prohibited from doing so; and
  • failing to submit required information to the CRTC.

The AMPs scheme aligns with the CRTC's enforcement powers in regulating telecommunications and spam. The objective of the scheme is to promote compliance with the Act, rather than to punish.

Modernized Oversight of the Canadian Broadcasting System

Bill C-10 contains measures that provide various actors with enhanced and explicit oversight  of the Canadian broadcasting system. Among other things, the legislation:

  • amends the process by which the Governor in Council (federal Cabinet) can issues policy directions to the CRTC under section 7 of the Act;
  • amends the procedure by which the Governor in Council may, under section 28 of that Act, set aside a decision of the Commission to issue, amend or renew a licence or refer such a decision back to the Commission for reconsideration and hearing; and
  • provides the CRTC with more explicit information gathering powers, along with the authority to share information designated as confidential with the Minister of Heritage, the Chief Statistician and the Commissioner of Competition.

The Significance of the Changes

The legislation clearly fulfills the Government's commitment in the Speech from the Throne to make digital Web Giants contribute to the creation, production and distribution of Canadian content. It also makes good on several other recommendations in the BTLR Report, such as updating the Act's all-important Broadcasting Policy for Canada to better reflect Canadian diversity and to give the CRTC new enforcement and oversight tools, including an explicit authorization to levy AMPs in the case of non-compliance.

These are very significant changes, and the material contained in the Minister's technical briefing suggests that the additional contribution to the Canadian broadcasting system from online undertakings could be as much as $830 million by 2023.

Bill C-10 is also notable for what it does not do. It does not propose any form of direct regulation of the content of users of social media. Nor does the Bill make social media services responsible for content posted by their users. Indeed, these were widely considered to be among the most controversial recommendations of the BTLR Report. Further, the Bill does not extend the existing licensing power to online undertakings and instead leaves it to the CRTC to tailor conditions of service to be applied to online undertakings. This is significant because it remains unclear whether the CRTC will impose conditions and other regulatory requirements on online undertakings that will be equivalent to those imposed on other broadcasting undertakings. It is also unclear whether the CRTC will take it upon itself to relax or reduce the regulatory obligations adopted for traditional broadcasting undertakings over time.

The Long Path to Royal Assent

There is no guarantee that Bill C-10 will pass in its current form given the current minority Parliament. To date, the Bill has only been introduced in the House and received 1st Reading. The contents of the Bill are likely to change considerably as it advances through 2nd and 3rd reading in Parliament and receives study at the Standing Committee on Canadian Heritage.

Our Communications Law team at Fasken will continue to monitor significant legislative developments with respect to Bill C-10 and provide updates where necessary.

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