The Government of Canada — through the Minister of Canadian Heritage, Pablo Rodriguez — introduced on February 2, 2022 the Online Streaming Act (Bill C-11), a new legislation meant to update the Broadcasting Act to the realities of today’s digital world.

The Online Streaming Act applies only to the entities that broadcast through social media or online streaming services. The government said the legislation will clarify that online streaming services fall under the Broadcasting Act and ensures that broadcasting regulator the CRTC “has the proper tools to put in place a modern and flexible regulatory framework for broadcasting.” These tools include “the ability to make rules, gather information, and assign penalties for non-compliance. “

The Act will also stipulate that if online services “make money from broadcasting professional content” — including music, sport of AV content— they “could be required to pay a share of their revenue back into the system.” This provision is a direct answer to the complaints from broadcasters and the creative sector that while traditional broadcasters had to abide by content obligations, these requirements did not extend to online services such as Netflix or Amazon.

Create a new set of rules

The government took steps to explain that these obligations “will never extend to users” and are restricted to “the platforms that stream into Canada.” The government stated that people who create and share content online are not considered as broadcasters for the purposes of the Broadcasting Act.

“Canada’s strong culture is no accident. We chose to be different. We care about our cultural sovereignty, and we believe diversity makes us stronger,” said Rodriguez. “Our culture is who we are. It is our past, our present and our future, it is how we tell our stories. The Online Streaming Act will help make sure that our cultural sector works for Canadians and supports the next generation of artists and creators in this country.”

The government also outlined the expected impact of this Bill:

• Create more opportunities for Canadian producers, directors, writers, actors, and musicians to create high quality audio and audiovisual content.
• Make it easier for Canadian audiences to access Canadian and Indigenous stories.
• Create one, fair set of rules for all comparable broadcasters — online or on traditional media —such as, requiring those who benefit from Canadian arts and culture to invest in it.
• Make Canada’s diverse voices, music, and stories heard across Canada and globally through a variety of services.
• Create a more inclusive broadcasting system that is reflective of Canadian society and that serves Canadians from all walks of life.

Once Parliament has approved the Bill and it has received Royal Assent, the Minister of Canadian Heritage will ask the Cabinet to issue a Policy Direction to the CRTC on how it should use the new regulatory tools provided by the Bill.

Offer meaningful levels of Canadian content

Then, in consultation with stakeholders and “in an open and transparent manner,” the CRTC is tasked with developing and implementing regulations “to ensure that both traditional and online broadcasting services, including web giants, offer meaningful levels of Canadian content and contribute to the creation of Canadian content in both official languages.”

Streaming platforms such as YouTube adopted a cautious approach to the legislation, in particular with regards to the obligations to invest in local content. “The rules around what is considered Canadian content are complex and it is very difficult to qualify,” said Jeanette Patell, Head of Public Policy at YouTube Canada. “This stands to impact all creators but we are especially concerned about the impact on new and emerging creators as they will be up against players who have been following these rules for decades.”

The proposal was well received by the creative sector, which was promised by the Trudeau government that the legislation would be tabled before Parliament in the first 100 days of his mandate. A previous attempt to get the legislation through was disrupted by the election calendar.

The Coalition for the Diversity of Cultural Expressions (CDCE)’s co-Chair Hélène Messier said the inclusion of large online streamers in the legislation will “provide cultural ecosystems with new resources to support and enhance a diversity of cultural expression in Canada. This is an affirmative action that the cultural sector has been calling for many years to ensure a future for local cultural creation and production.”

Forward-thinking legislation

She added: “Canada now has the opportunity to renew a tradition of remarkable commitment to culture on a global scale and to be a true leader by adopting legislation that will be really forward-thinking and will cover all broadcasting activities on online platforms.”

The Motion Picture Association – Canada (MPA-Canada), which represents the Hollywood studios, said it “understand government’s desire that companies participating in the Canadian market should contribute to the achievement of Canadian goals” but warned that last year alone, the productions of global studios and streaming services employed almost 140,000 Canadian creatives and film workers and involved spending of more than CA$5 billion. 

“Global studios and streaming services also accounted for 15% of the total investment in Canadian owned productions last year,” said MPA – Canada. “Global producers and streaming services now account for more than half of all the production investments in Canada, and we believe these contributions must be considered in any policy framework.”

A nimble regulatory approach

It added: “The constantly evolving marketplace and innovative business models that have fueled the growth in production in Canada require a regulatory approach that is nimble and flexible, and we believe that the government views this as important too.  We look forward to working with government and all members of the Heritage Committee to ensure this new Bill creates the modern and flexible framework necessary to achieve Canada’s cultural and economic ambitions.”  

Independent labels’ trade organisation CIMA said that “if passed, this bill would bring Canada’s broadcasting regulations into the modern era,” in particular by making international digital platforms that broadcast in Canada subject to the Broadcasting Act.

“While CIMA must take time to review and consider the bill in full, we applaud the Government of Canada for bringing forward legislation that would require everyone who participates in broadcasting activities in Canada, including large tech companies, to contribute to Canada’s cultural ecosystem,” wrote CIMA. “While most businesses operating in Canada are subject to some form of regulation, US and international online steaming services that deliver audio and audio-visual content are currently exempt from Canada’s regulatory system.”

Strengthen Canada’s culture sector

“The most tangible way to get our artists heard in Canada and around the world is to ensure that we have awesome Canadian artists, supported by strong Canadian owned independent music companies that can compete in the global music market,” said Tim Potocic, Chair of the Board of CIMA and the owner of Canadian record company Sonic Unyon. Andrew Cash, President and CEO of CIMA, added: “The Online Steaming Act can be a positive step towards this goal and we look forward to working with all stakeholders to strengthen Canada’s arts and culture sector as this bill works its way through Parliament.”

Margaret McGuffin, Chief Executive Officer of Music Publishers Canada, commented: “Music publishers represent and invest in thousands of Canadian songwriters and songs that are heard daily on the radio and streaming services, in video games and film and television productions around the world. Through the Online Streaming Act, tech companies who operate in the Canadian marketplace will have the responsibility to contribute to the creation and promotion of Canadian songs.”

Music Publishers Canada said that “according to data collected by [rights society] SOCAN, for every dollar in music licenses from traditional Canadian TV and radio broadcasters currently regulated by the Broadcasting Act, around 34 cents are distributed to Canadian songwriters and composers, but for every license dollar from digital broadcasters, only 10 cents remain in Canada.” This discrepancy highlights the need, according to Music Publishers Canada, for tech companies to “contribute — as traditional broadcasters currently do — to the creation and promotion of Canadian music.”

A step in the right direction

The Professional Society of Authors and Composers of Quebec (SPACQ) welcomed the draft proposal presented by Pablo Rodriguez, but said it will “take the time to analyse the details of the project in more depth.” SPACQ noted that streaming services “have been present in Canada for almost ten years and that the current Broadcasting Act was designed before the Internet became a platform for distributing music.”

“This new bill as proposed, and even if it is moving in the right direction, is only a first step on a difficult road, as we saw with the old bill which took many detours to reach a dead end,” said SPACQ. “Indeed, while the introduction of a bill is a necessary step in an attempt to reposition Canadian songwriters and their songs in a digital market that ignores them, it will take a strong will and other significant efforts on the part of of the government to succeed in ensuring that, at the end of the legislative process, online companies do indeed contribute to the creation and promotion of our music.

“The government has kept its word and tabled a new bill quickly, however the SPACQ is already anticipating all the steps to follow. In order for Canada to once again become a fertile ground for our music creators, a place where our songs can be born, grow and flourish, whatever the modes of music consumption, we hope that an executive order to the CRTC will be issued quickly,” said SPACQ Director General Alexandre Alonso.

A necessary step

“It is high time that online companies also contribute to the development and financing of our music,” says Jérôme Payette, general manager of the Association of Music Publishing Professionals (APEM) from Québec. “Time is running out, especially since significant delays are to be expected before the sector benefits from the regulations, the details of which must be decided by the CRTC.”

For SOCAN CEO Jennifer Brown, the Online Streaming Act is “a big step in the right direction.” She added: “The government has clearly heard from Canada’s music creators that they need support to create, and to be fairly promoted on streaming services, and this bill sets the stage for that to happen.”

“The existing Broadcasting Act was designed before the Internet was a music delivery platform, and modernisation is desperately needed,” Brown added. “Reforming the Act is a necessary step to strengthening Canadian songwriters and composers’ place within Canada and supporting Canadian music in a digital world.”