Ian Scott to the Standing Committee on Canadian Heritage

My colleagues and I are pleased to appear again before this Committee to contribute to its study of Bill C-18.

October 21, 2022

Ian Scott, Chairperson and Chief Executive Officer
Canadian Radio-television and Telecommunications Commission (CRTC)

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Thank you, Madam Chair, for inviting us to appear before your Committee today.

With me today are Rachelle Frenette, General Counsel and Deputy Executive Director of Legal Services, and Adam Balkovec, Legal Counsel.

My colleagues and I are pleased to appear again before this Committee to contribute to its study of Bill C-18.

The proposed legislation aims to address a market imbalance in Canada’s digital news marketplace by creating a new legislative and regulatory framework that would ensure the major digital platforms fairly compensate news publishers for their content.

If it is adopted by Parliament, the Online News Act would require the largest digital platforms to negotiate with news businesses and reach fair commercial deals for the news that is shared on their platforms. Those deals would also need to respect journalistic independence and invest in a diversity of Canadian news outlets – including independent local businesses.

Should Parliament wish to assign the responsibility of creating and overseeing the regulatory framework under the Online News Act to the CRTC, we are prepared to take it on.

The legislation proposes to entrust five main functions to the CRTC.

Specifically, we would:

• consider requests from news businesses to be eligible for mandatory bargaining and requests from digital platforms to be exempt from mandatory bargaining by applying the Act’s criteria,
• oversee negotiation and mediation, and maintain a public list of external arbitrators that meet qualifications set by the Commission,
• deal with complaints of undue preference or unjust discrimination filed by eligible news businesses against platforms,
• contract an independent auditor to publish an annual report on the total value of commercial agreements and other key information, and
• establish regulations including a code of conduct for good-faith bargaining and regulatory charges that platforms must pay to fund the administration of the Act, similar to the fees currently paid by broadcasters and telecommunications service providers.

We have been turning our minds to the implementation of Bill C-18, should it receive Royal Assent. There are several areas in which the Commission must create regulations, which include developing regulatory charges to operate the program and creating a code of conduct to support fairness and transparency in bargaining in relation to news content. As well, the Bill would require the CRTC to establish detailed policies, for example, to provide news businesses, platforms and the public with clear guidance on how we intend to apply the eligibility criteria, as well as the companion exemption criteria. Finally, we will have to create efficient procedures to administer the Act.

There will be challenges along the way, as there always are when developing a new framework. The input from the public, news businesses and platforms will be vital in helping us to implement this new legislation. As always, the CRTC relies on its public records to make decisions.

The good news is that the CRTC is experienced in dealing with matters similar to those that Bill C-18 aims to resolve.

Our mandate is to regulate in the communications sector, and we have extensive experience overseeing mediation and arbitration processes, as well as those relating to undue preference complaints and codes of conduct. We also have experience conducting public proceedings, issuing exemption orders, and maintaining ongoing monitoring systems.

Just as importantly, we recognize the opportunities and challenges created by new players and have a proven track record of implementing policies and adapting approaches over time that enable traditional media – including local broadcast news outlets – to respond to changing market conditions.

The members of this Committee may already be familiar with the Independent Local News Fund. Created by the CRTC in 2016, the fund gives independent television stations across the country access to approximately $23 million in resources to produce high-quality, locally effective news and information programming.

Madam Chair, Honourable Committee members, the CRTC stands ready to oversee the regulatory framework created by the Online News Act should it be asked of us.

My colleagues and I would now happy to answer your questions.

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