Questions & Answers on the Online Streaming Act

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The Online Streaming Act was tabled on February 2nd, 2022. If adopted, the bill would extend Canada’s legislative and regulatory framework to include online broadcasters and ensuring that the CRTC has the tools it needs to regulate a modernized broadcasting system. The Bill will also support greater diversity and inclusion in the broadcasting sector.

Questions & Answers

Q1–Why do we need to amend the Broadcasting Act?

The Broadcasting Act has not kept pace with technological change. It needs to be updated to reflect Canada’s diverse society and the reality of online broadcasting.

The last major reform of the Broadcasting Act was in 1991; since then, most Canadians have grown accustomed to accessing their music, television, and movies over the Internet. The bill accounts for this new reality by making sure that all broadcasters that benefit from the Canadian system also contribute to it, to support the creation, production, and distribution of Canadian stories and music.

Simply put, our stories and music must have a place in the world of streaming.

Q2–How is Bill C-11 different than the previous Bill C-10?

The Online Streaming Act builds upon the previous work of Parliamentarians, retaining the amendments that were made to the bill during the last Parliament.

However, in the last Parliament, there was vigorous debate about the role of social media services in supporting Canadian creators and culture. An important change to the bill was made to focus only on commercial content uploaded to social media services.

Finally, Bill C-11 also corrects drafting errors, including, but not limited to, placement and numbering of provisions.

Q3–How does the Online Streaming Act support Canadian creators?

Online broadcasting services like Crave, Netflix, Tou.TV and music streaming services like Spotify and YouTube have dramatically changed how we watch television and movies and listen to music.

In addition to this new reality, Canada’s broadcasting sector is facing long-term structural challenges. Without intervention, current trends in the market are expected to result in a decline in the production of Canadian television content of approximately half a billion dollars by 2025 when compared to 2020. This represents a total percentage decrease of about 13% meaning there will be 13% less Canadian television production in 2025 then there was in 2020. And in 2020, production had already dropped by $320 million from the 2018 levels.

Sustainable, long-term support for the system is required to enable ongoing success for Canadian creators and broadcasters; that is what the modernization of the Broadcasting Act would achieve. If the Online Streaming Act becomes law, Canadian Heritage projects that mandated contributions by online broadcasters to Canada’s cultural production ecosystem could reach $1.03 billion annually by 2023. This would materially benefit Canadian creators and content by ensuring significant investment by online streaming services in commissioning programs, and in some cases in the funds which support independent Canadian productions.

Moreover, all broadcasters would be required to help achieve important cultural policy objectives. This means more support for Indigenous voices, original French language programming, and greater representation of Canadians from racialized communities and Canadians of diverse ethnocultural backgrounds, socioeconomic statuses, abilities and disabilities, sexual orientations, gender identities and expressions and ages.

Q4–Online broadcasting services would be required to contribute to Canadian stories or music. How would this work?

Modernizing the broadcasting system will ensure that online players as well as traditional broadcasters support Canadian creators.

Online broadcasting services could be required to make financial contributions for the following purposes:

These contributions could take the form of expenditures on Canadian programs for their own service or contributions to existing funding bodies (e.g., Canada Media Fund). Expenditure requirements will not be placed on individual users—all requirements will be imposed on platforms.

Online broadcasters could also be subject to discoverability requirements. These requirements would ensure that Canadian programs are easy to find and showcased to users by online broadcasting services.

The CRTC would continue to exempt services that cannot make such a material contribution, as it has always done.

Q5–What new tools would the CRTC have to regulate online broadcasters?

One of the major changes is a move away from issuing broadcasting licences as the primary regulatory tool, where broadcasters first need to obtain permission from the CRTC to operate in Canada.

The new condition of service model would allow the CRTC to seek contributions from broadcasters and to impose other conditions, including conditions related to the discoverability and showcasing of programs. The CRTC would be given express powers to require broadcasting undertakings, including online undertakings, to make financial contributions to support Canadian music, stories, creators and producers.

Conditions of service could be updated at any time, rather than only during licence renewal processes every 5 to 7 years.

Traditional broadcasters would also move to the conditions of service model, but they would still require a licence to deal with issues unique to them, such as spectrum allocation for over the air broadcasting.

Q6–Would Bill C-11 open the door to regulating all content on the internet?

No. The focus of the Online Streaming Act is on the streaming services (e.g., Netflix, Crave, Spotify) that Canadians use every day to access their favourite music, television or films.

Certain social media platforms (e.g., YouTube) may also be required to support and promote Canadian stories and music. This would apply where these social media services act as substitutes for other broadcasters, including streaming services. However, only the social media service would have regulatory responsibilities—and only with respect to commercial content distributed on its service. The Online Streaming Act would not apply to individual users of social media services.

Everyday use of social media by Canadians, digital-first creators and influencers would not be regulated by the Online Streaming Act.

The current Act has been crucial in supporting the development of Canadian cultural expression and Canada’s creative industries. The Online Streaming Act builds on this success and adapts the current regulatory framework to reflect the presence of online streaming services (online undertakings) in the Canadian broadcasting system.

Q7–Is this bill about censoring Canadians?

No. The Online Streaming Act is about ensuring that Canadian music and stories are given a fair chance of being discovered. The bill is about further promoting Canadian cultural expression in the digital environment, not inhibiting it. This law would not control what Canadians can or cannot see online. Canadians will always be able to choose what to listen to and to watch.

Respecting freedom of expression and journalistic independence are foundational principles of the Broadcasting Act.

Q8–Are digital first creators and their content subject to regulation?

Digital first creators have indicated that they do not wish to be subject to the Broadcasting Act. The Online Streaming Act seeks to respect their wishes.

Digital first creators, like all individuals uploading content to a social media service, are not covered by the bill. In other words, individual users, influencers and digital first creators will not be treated like a broadcaster. No matter how much money they may make, content uploaded by digital first creators would not be considered “commercial”.

Certain social media platforms (e.g., YouTube) may be required to contribute to supporting and promoting Canadian stories and music, as they sometimes act as substitutes for other broadcasters, including streaming services. However, only the social media service would have regulatory responsibilities—and only with respect to commercial content distributed on its service.

Q9–How will “mandatory carriage” work under Bill C-11?

The Broadcasting Act currently provides the CRTC with the authority to make orders respecting the carriage of certain programming services and to set the terms and conditions associated with that carriage. For example, the CRTC may order a broadcasting distributor to carry certain programming services or “channels” and require the distributor to pay the broadcaster a fee, on a per subscriber basis, to that channel.

Bill C-11 extends mandatory carriage to online streaming services. It requires online streaming services subject to a mandatory carriage order to carry programming services or “channels” and to negotiate in good faith; however, the CRTC will not be authorized to intervene in the specific terms of carriage. This approach is intended to encourage market-based solutions between distributors and broadcasters. If negotiations stall, either party to a mandatory carriage order may request that the CRTC assist in the facilitation of negotiations.

Q10–Is Bill C-11 consistent with Canada’s international trade obligations, including the Canada-United States-Mexico Agreement (CUSMA)

Yes. Bill C-11 was drafted with careful consideration of Canada’s international obligations and commitments, including its commitments under the CUSMA.

Bill C-11 is a first step in a multi-step process. Once the Bill receives Royal Assent, the CRTC will hold multiple public processes to update the regulatory framework for broadcasting in different areas that will reflect the changes to the Broadcasting Act and any policy directions provided by the government. These processes will provide an opportunity for all impacted parties and the public to be heard.

Q11–What does discoverability mean in the context of Bill C-11?

Today, more programs than ever, from across the world, are available to watch online. Similarly, there are more Canadian programs being made now than ever before. Bill C-11 will authorize the CRTC to make orders relating to the discoverability and showcasing of Canadian programs to ensure that Canadian programs are not lost in the vastness of programming choices available to Canadians. It is crucial that Canadians from all walks of life can see themselves in the programming available to them.

There are various ways to promote discoverability, including online and real-world showcasing and promotion of Canadian programs. As the expert regulator, the CRTC is best placed to work with industry participants and interested parties to institute the most effective and impactful discoverability practices that can support the broader broadcasting policy objectives in the regulatory framework. Individual creators, musicians, independent filmmakers, streaming services, traditional broadcasters and others will be given the opportunity to make submissions to the CRTC to help shape future policies on discoverability.

Q12–Will discoverability essentially result in the regulator picking winners and losers?

Discoverability will not circumvent user choice.

Online streaming services play a vital role in delivering programming to Canadians. They are uniquely positioned to facilitate access to near infinite libraries of audio and audio-visual programming and are similarly equipped to help elevate the exposure of Canadian programming. Having access to Canadian programs is important; it allows Canadians to see themselves reflected in the programs they consume. As participants and beneficiaries of the Canadian broadcasting system, both traditional and online broadcasters must do their part to achieve the policy objectives of the Broadcasting Act.

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