What is Bill C-10 and why are the Liberals planning to regulate the internet?

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Debate over Bill C-10 is erupting on Parliament Hill, months after the Liberal government tabled the legislation in November.

With just a few weeks left before Parliament rises for summer, supporters of the bill are pushing to have it rushed into law in the event that the Liberals call a snap election.

Advocates say the bill is about ensuring Canadian artists are properly supported as music, movies and television shows are increasingly consumed on global streaming services such as Netflix and Amazon Prime.

Critics warn Canadians could lose access to some websites and potentially having their freedom of speech curtailed by federal government regulators.

To help readers make sense of it all, The Globe and Mail takes a closer look at what’s in the bill and the potential consequences for Canadians should it be passed into law.

Opinion: Artists, musicians defend bill to update Broadcasting Act

What is Bill C-10?

Bill C-10 was introduced in the House of Commons in November by Heritage Minister Steven Guilbeault. The government says the bill is meant to level the playing field between internet streaming services, such as Amazon Prime, Disney Plus and Netflix, and traditional broadcasters such as CTV, Global and private radio stations.

The bill updates the Broadcasting Act, which is Canada’s existing legislation aimed at promoting and developing Canadian producers and creators. It also requires broadcasters to support cultural industries financially. Traditional broadcasters are regulated by the Canadian Radio-television and Telecommunications Commission, or CRTC, an independent administrative tribunal created in 1976. It supervises broadcasting in Canada by issuing licences and enforcing federally approved policies such as Canadian content rules.

The original Broadcasting Act, however, dates back to 1991 – before the internet changed the way media is shared and consumed. Since the legislation that oversees this regulatory regime hasn’t been updated for the internet age, streaming services currently don’t have to abide by the same rules.

Bill C-10 is supposed to fix this imbalance. It would subject web giants broadcasting in Canada to the same regulations as traditional broadcasters, which would mean they would have to offer certain amounts of Canadian content on their sites, and contribute financially to the production of Canadian cultural industries.

Where did this idea come from?

Bill C-10 is one part of a much broader effort to overhaul Canada’s internet rules. The 2017 federal budget first announced Ottawa’s plans to “review and modernize” Canada’s broadcasting and telecommunications laws and to outline “a new approach to growing Canada’s cultural sector.” The next year, the government created a panel of independent experts, led by former telecom executive Janet Yale, to review those laws and make recommendations on how they can be modernized. The Yale report’s mandate also included questions about the future of the Canadian news media, the CBC and Radio-Canada and whether new laws are required to protect the safety and security of Canadians online.

The panel’s 235-page response was made public in January, 2020, and the task force made 97 wide-ranging recommendations. Some of the recommendations included calls for an ad-free CBC, government regulation of the financial relationships between social media and news organizations and an overhaul of the CRTC as a new, more powerful, “Canadian Communications Commission.” Those issues are not addressed in Bill C-10, but the government has signalled further bills in response to the Yale report will be introduced over time. On the matters that directly led to C-10, the Yale report said federal regulations should go beyond traditional broadcasting to include online media content. It said the “media communications sector” should contribute financially to the creation of high-quality Canadian content that reflects Canadian diversity and that it should be required to ensure Canadian content is promoted on their services and that their algorithms that decide what content is presented to consumers are subject to audit by the CRTC.

Bill C-10 does include requirements that large platforms such as Netflix contribute and promote Canadian content. However, several expert witnesses have told MPs that the bill’s language is currently unclear as to whether the CRTC would have the power to review algorithms. The changes to the CRTC in the bill are not as extensive as what the Yale report had proposed.

What’s going on with amendments?

The bill is currently being reviewed by the House of Commons heritage committee. Members of the committee were studying the document line-by-line, but that process was disrupted in late April when Liberals on the committee moved an amendment that removed a section of the bill. The change was approved “on division,” meaning there was no recorded vote to show which opposition parties sided with the Liberals. This segment, section 4.1, provided an exclusion for user-generated content. Removing that exclusion set off concerns that the legislation could then be used to regulate Canadians’ social media posts.

Liberals said they removed that section because it provided a loophole for certain sites. For example, it would have meant that Spotify fell under the legislation, but YouTube, which also streams music, did not.

However, Conservatives on the committee began raising questions about how the amendment could allow the CRTC to regulate Canadians’ social media content and threaten free speech. They said that by removing the exemption, the legislation could now apply to any videos that people upload to sites such as TikTok or YouTube to share with friends.

The NDP and Bloc Québécois committee members told The Globe at the time that they weren’t concerned with the amendment, and that there were other parts of the legislation that ensured individual users were protected. They cited section 2.1, which excludes users from being regulated. However, other critics draw a distinction between users, specified in 2.1, and 4.1′s exclusion for user-generated content, and so maintain that social media posts could still be subjected to the legislation.

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On May 7, the Liberals introduced a new amendment that they said would put these questions to rest. The text of the new amendment is very similar to the text of section 4.1 that was originally removed, but was added to a different section of the bill that defines the regulatory powers of the CRTC. The government says this change ensures that the posters of user-generated content are not regulated. Platforms that host such content, like YouTube, could be forced to ensure Canadian content is promoted and would have to contribute to Canadian content producers if they act as broadcasters, the government says.

On May 13, at the request of committee members reviewing the bill, the Justice Department released an updated Charter review of the legislation, which assessed whether the bill is in compliance with rights set out in the Charter of Rights and Freedoms. This updated statement concluded that the bill and its amendments do not infringe on freedom of expression as outlined in the Charter. Despite this, Opposition Leader Erin O’Toole said that his government would not support the bill, and if it passed, a future Conservative government would repeal it.

After receiving the Charter review, and hearing from the ministers of Canadian heritage and justice, the committee is set to resume its line-by-line review of the bill.

To date, the committee has approved a large number of amendments proposed by Liberal and opposition MPs. For instance, the opposition parties joined forces in April to outvote the Liberals, adding a line to the bill stating that “online undertakings must clearly promote and recommend Canadian programming, in both official languages as well as Indigenous languages.”

Why are people talking about Steven Guilbeault’s media appearances?

Some of the heightened controversy and confusion over Bill C-10 traces back to the government’s main messenger, Canadian Heritage Minister Steven Guilbeault. The career environmentalist was a star candidate for the Liberals in Quebec in the 2019 election campaign. The rookie MP was immediately promoted to cabinet as heritage minister at a time of massive global change in the culture sector as content is increasingly consumed online and governments struggle to adjust existing rules to this new reality.

In recent weeks, at least three of Mr. Guilbeault’s media interviews on C-10 have knocked the government off message. The Minister appeared to struggle in a May 1 interview with the CBC to explain why the government had removed section 4.1, which excluded social media. The Minister’s office later clarified its answer to that question, saying the section was removed because it would have created a loophole that could have allowed YouTube to avoid regulation when streaming professional content such as music, while similar services like Spotify would be regulated.

Then in a CTV interview broadcast on May 9, Mr. Guilbeault said YouTube could be required to regulate individual channels with large viewership.

“If you have a YouTube channel with millions of viewers, and you’re deriving revenues from that, then at some point the CRTC will be asked to put a threshold. But we’re talking about broadcasters here, we’re not talking about everyday citizens posting stuff on their YouTube channel,” he said.

Hours later, CTV reported that it had received an updated statement from Mr. Guilbeault, which said he used “unclear” language and “should have been more precise” in stating that an individual who uses social media will never be considered as a broadcaster under the act.

In another case, Mr. Guilbeault appeared to suggest he was battling against supporters of net neutrality, the concept that all traffic on the internet should be treated equally by internet providers. The Toronto Star reported on May 12 that the Minister said in an interview that those criticizing Bill C-10 “believe in this concept of net neutrality.”

Mr. Guilbeault’s office told The Globe in an e-mail that the minister and the government continue to support net neutrality.

“While the bill seeks to promote Canadian music and storytelling, it does not impact Canada’s commitment to net neutrality,” a spokesperson said.

NDP Leader Jagmeet Singh referenced these incidents while appearing recently with Mr. Guilbeault on an episode of the French-language talk show Tout le monde en parle.

“You have to admit that [those comments] created confusion,” said Mr. Singh. “That hurt the process and that created problems.”

“I’m a new MP. I’m a new minister,” Mr. Guilbeault replied to the NDP Leader. “I readily admit that I should have been clearer in certain interviews. Absolutely.”

What else is in the bill?

The existing Broadcasting Act states that the Canadian broadcasting system “shall be effectively owned and controlled by Canadians.” The original wording of C-10 would have deleted that reference and replaced it with a requirement that each broadcaster “shall contribute to the implementation of the objectives of the broadcasting policy….”

The Yale report had said that in a world where Canadian streaming options like Crave and CBC Gem compete with foreign platforms such as Netflix, it would be “unrealistic” to base broadcasting laws on the concept of a single system that is owned and controlled by Canadians.

The advocacy group Friends of Canadian Broadcasting expressed strong concern with this aspect of the bill and the labour organization Unifor had said the bill should at least say that the system should “maximize” ownership and control by Canadians.

“To repeal it outright is a very dangerous thing to do, we think,” Unifor’s Howard Law told MPs in March.

The committee later agreed to a Bloc amendment in April that added language stating that ”the Canadian broadcasting system shall be effectively owned and controlled by Canadians, and foreign broadcasting undertakings may also provide programming to Canadians.” Mr. Law said in an e-mail to The Globe that the amendment addressed Unifor’s concerns.

Another key change to the act’s definition of Canada’s broadcasting policy relates to sectors that should receive federal support. The current law references the “the circumstances and aspirations, of Canadian men, women and children, including equal rights, the linguistic duality and multicultural and multiracial nature of Canadian society and the special place of aboriginal peoples within that society.”

That section is changed through C-10 to reference “all Canadians, including Canadians from racialized communities and Canadians of diverse ethnocultural backgrounds, socio-economic statuses, abilities and disabilities, sexual orientations, gender identities and expressions, and ages ….”

Many of the details as to how this new system will work in practice won’t be decided until long after the bill becomes law. The federal cabinet approved draft policy directions last year that will give the CRTC broad powers, should the bill be approved, in areas such as defining Canadian content and how to support specific communities.

The fact that many details are left to be decided later partly explains why MPs have heard such wide-ranging views from experts as to what the legislation will mean in practice.

What are the bill’s critics saying?

The main concern of critics is that the bill goes too far in terms of regulating the internet. Though most agree that an update to the Broadcasting Act is necessary, critics say that these changes need to very specifically target online broadcast activities while leaving other parts of the internet untouched. Many critics argue that Bill C-10 is too broad and gives the CRTC too much regulatory reach.

Emily Laidlaw, a law professor at the University of Calgary, said the bill needs to be reworked. “It’s not well-drafted at the moment because it sweeps into its ambit a whole bunch of things that shouldn’t be there,” she said.

Ms. Laidlaw said the legislation is incredibly important and that she doesn’t want to see it scrapped completely, but said it does need significant changes. “I think it’s a mistake to tackle user-generated content through broadcasting legislation. It’s not going to work,” she said.

“There’s just too many unintended consequences when you try to regulate platforms in this particular way. Tackle it for the way they produce their own content or for affiliated content,” she said. “Maybe explore ways they can pay into Canadian cultural industries. There’s so many ways this can be tackled without getting into the messy business of user-generated content.”

Though Ms. Laidlaw said she doesn’t think the government intends to regulate user-generated content specifically, the legislation leaves the door open for that possibility. She said it would be better to have clearer legislation rather than leave it up to the discretion of the CRTC.

Another critic has been former CRTC Chair Konrad von Finckenstein, who told The Globe that the bill “should not be passed in its present form.” He said the legislation was flawed from the start because it’s too broad. “You don’t want to discourage people from being innovative and finding better ways to use the internet,” he said. “You should only deal with it to the extent it’s necessary to protect Canadian cultural institutions, not more.”

One of the bill’s most vocal critics has been University of Ottawa law professor Michael Geist. Both Mr. Geist and Mr. von Finckenstein added their names to an open letter released May 17 from the Internet Society, a global non-profit that promotes an open and secure internet. The letter, addressed to Prime Minister Justin Trudeau, asks the government to reconsider the effect that Bill C-10 and other legislation would have on the internet in Canada. The letter has over 20 signatories, and also includes Ronald Deibert, director of the Citizen Lab at the University of Toronto, and Laura Tribe, executive director of OpenMedia.

In the House of Commons and in committee meetings, Conservative MPs continue to be vocal critics of the bill, saying that it is a threat to freedom of speech.

What are supporters saying?

Many of the bill’s supporters are those in the arts and culture sector who want to see the broadcast legislation updated, and are concerned about local artists and producers being left unsupported while internet giants dominate. This is of particular concern in Quebec, where the protection of local culture and the promotion of French-language content is very important. C-10 also outlines support for racialized communities, including providing opportunities for Indigenous communities and programming that reflects Indigenous cultures, provisions which many people would also like to see implemented.

ShoShona Kish, an Anishinaabekwe musician and community organizer, said that the bill would lay the groundwork for continuing to foster local talent and culture. “What we’re talking about here is amplifying voices that need to be heard, and continuing to invest in our stories,” she said. “This bill opens a space for that.”

Ms. Kish, who is also the founder and artistic director of the International Indigenous Music Summit, said that Canada’s system to support the arts is something “quite extraordinary,” and that artists from elsewhere are often “envious of the resources we have to tell stories here.” While she said the legislation may not be perfect, it would provide a solid foundation to support local artists and producers.

“To me, that’s what this bill boils down to,” Ms. Kish said. “Are we going to continue to plant seeds to nurture talent?”

Jérôme Payette, director-general of the Professional Music Publishers’ Association, said the bill is incredibly important, and he’s frustrated to see its progress stalled. The legislation “is absolutely fundamental for the future of Canadian culture,” he told The Globe. He said that the intent behind the bill is being skewed, and that disinformation is being spread about the legislation. “It’s an attack on culture for political reasons,” Mr. Payette said.

On May 11, the National Assembly of Quebec passed a unanimous motion supporting Bill C-10. The motion outlined how the legislation would provide more protection and promotion for cultural content.

Members of the Liberal government, which introduced this legislation, continue to support the bill. The NDP and Bloc Québécois members on the heritage committee have both said they are also generally supportive of the legislation. Bloc Québécois MP Martin Champoux said on Monday that C-10 in its current form will have his support, though he is also critical of the way the government has handled the bill. “I think they dropped the ball quite a few times,” he said.

What are the streaming services saying?

In its submission to the Canadian Heritage Committee, Spotify expressed strong concerns with the bill and said music streaming should not be regulated like a radio station. The company noted that it already has Canadian-focused playlists.

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“Spotify is committed to supporting and promoting Canadian creators. But without clear guidance on how Bill C-10 is to be applied to streaming, we are concerned that unintended consequences will hurt both Canadian culture domestically and globally,” the company said.

Netflix has also criticized the bill, noting in its submission that it has invested over $2.5-billion in film and television production in Canada between 2017 and 2020. It also proposed two pages of specific amendments primarily at keeping any financial disclosures to the CRTC confidential.

“An overly burdensome regulatory framework could result in reduced choice for Canadians,” the company said.

The committee appears to have ignored Netflix’s recommendations.

Traditional broadcasters aren’t pleased with the bill either. BCE Inc., Rogers Communications Inc. and Quebecor Inc. warned in submissions to the committee that the bill still leaves them with onerous obligations that hinder their ability to compete with foreign streaming services. CBC/Radio-Canada’s submission was largely supportive of the bill, saying it “goes a long way to level the playing field.”

How will streaming services be regulated?

Traditional broadcasters in Canada, such as television and radio stations, are required by the CRTC to broadcast certain amounts of Canadian content. Quotas differ depending on the type of station: for example, commercial radio stations playing popular music must have at least 35 per cent Canadian music, while the CBC must have 50 per cent Canadian music.

However, this approach doesn’t work for streaming platforms where consumers access content on demand. Instead, Bill C-10 gives the CRTC power to implement “discoverability” requirements on these platforms – essentially, they have to make it possible for consumers to discover Canadian content. This means that services like Netflix or Spotify will have to promote Canadian content on their sites and make it easier to find. The CRTC would have the power to implement these discoverability requirements.

This approach to discoverability is problematic for many of the bill’s critics, such as Mr. Geist, who said this could limit consumer choice. “The government through its regulator gets to determine what gets prioritized,” he told MPs on the Canadian Heritage committee. “It’s going to make choices – elevating some and deprioritizing others. That clearly has an impact on individual Canadians’ expressive rights.”

Ms. Laidlaw points out that social media companies would fall under these requirements as well, which could be problematic because there aren’t any provisions to distinguish positive cultural content from more negative and potentially harmful posts. “It’s not just a Canadian artist wanting their content promoted,” she said, adding that she’s not satisfied with leaving the details of discoverability up to the CRTC.

However, Ms. Kish said that she sees issues with the way content is already curated online, since various algorithms determine what consumers have access to. “When we allow corporations to define who we are as a culture, I think we run a very frightening risk of losing the deep substance of what our communities are,” she said. Discoverability requirements, she maintained, could help share Canadian culture. “That artist that nobody ever listened to before – because broadcasters have a responsibility to invest, we will hear that artist.”

What counts as Canadian content?

Under Bill C-10, internet streaming companies operating in Canada would have to promote Canadian content and financially contribute to local production. However, there is some debate over how this would work, and what content counts.

The CRTC currently has criteria that determines what makes content Canadian or not. For films, it considers such things as if members of the production team are Canadian, and if program expenses and post-program expenses are paid by Canadian companies.

Netflix has raised concerns about these Canadian content guidelines, though. In a February submission to the Heritage committee regarding Bill C-10, Netflix cited examples of films that are not considered Canadian enough – both The Willoughbys and Jusqu’au Déclin, two films with Canadian casts and crews, were financed exclusively by Netflix and therefore do not meet the standards for Canadian content. “Current definitions of Canadian content do not acknowledge all contributions of streaming services to Canadian programming,” reads the document.

The idea that streaming companies would have to contribute to local productions is outlined in the Yale report. It reads that streaming services “would be required to devote a portion of their program budgets to Canadian programs.” However, it doesn’t include specifics on how this would be done – the report says that the CRTC would establish the details.

Mr. Geist advised MPs that simply rerouting taxes paid by the internet giants would be easier. “[The government] should take some of that tax money and allocate it directly to the various creator programs,” he said, adding that this would be a more immediate way to fund producers.

What else is the government planning related to the internet?

The government claims Bill C-10 would force streaming services to contribute up to $830-million annually toward Canadian creators by 2023. However, Bill C-10 is one of several federal plans aimed at extracting cash from large digital companies and to expand regulation of the internet. The Liberal government has said two more bills are in the works that could be made public soon. One would attempt to set new rules regarding online harms, such as hate speech and the non-consensual sharing of images known as revenge porn. Similar efforts by other governments, such as Germany, that require platforms to remove hate speech within short periods of time after receiving a complaint have prompted concern related to freedom of speech.

Mr. Guilbeault has also said his department is working on a bill that would require platforms such as Google and Facebook to negotiate licensing deals with Canadian news organizations. A similar law in Australia prompted a major controversy that saw Facebook temporarily remove all news from its platform. The company ultimately agreed to reach licensing deals with news publishers in Australia.

Requiring social media platforms to compensate news publishers would be in addition to requirements under C-10 to contribute to Canadian cultural content. The Canadian government has further plans to extract money from web giants through the tax system. Finance Minister Chrystia Freeland’s November update detailed plans to require foreign digital service providers to collect and submit sales tax on Canadian sales and to pay a new corporate tax on digital services. The update said these and other tax increases on the digital economy would raise $6.5-billion over five years.

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