25 November 20205 minute read

Canadian Government introduces legislation that would fundamentally transform the broadcasting ‎system

In early November, Bill C-10 – entitled “An Act to amend the Broadcasting Act and to make related and consequential amendments to other acts” – was introduced to the House of Commons by the Minister of Canadian Heritage. The Bill was a direct response to changes in how Canadians source their entertainment, how they stay informed, and how they share information with each other. For example, from 2011 to 2019, the number of Canadians with Netflix subscriptions increased from about 10% to nearly 60%. Similarly, the number of Canadians that stream music online significantly increased in those years. However, while these changes were playing out in the digital world, Canada’s Broadcasting Act was frozen in the past. The time for legislative change had arguably arrived. As stated by the Heritage Minister: “If we do not react, funding for Canadian television and music production will continue to decline. What we risk in the long term is nothing less than the loss of our cultural sovereignty. The production of francophone, anglophone and indigenous works and programs will be jeopardized.”

In order to keep pace with Canada’s changing digital landscape, and to maintain so-called Canadian “cultural sovereignty”, Bill C-10 introduced five key changes:

  1. Specifically regulating online broadcasts: The Bill makes it clear that “online undertakings” – that is, the transmission or retransmission of programs over the Internet – fall within the ambit of the Broadcasting Act. Previously, online content and its providers were exempt from most regulatory requirements pursuant to what has been referred to as the CRTC’s Digital Exemption. Including online activity within Canada’s broadcast regulatory framework signals a major policy shift; however, it is currently unclear what conditions and requirements the CRTC will impose on online providers once the Bill becomes Law.

  2. Updating the broadcasting policy: The Bill updates Canada’s broadcasting policy to emphasize its basic tenet that Canada’s broadcasting system, through its programming and employment opportunities, should serve the needs and interests of 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. Recognizing the special relationship Canada has with its indigenous communities, the Bill also specifically recognizes the need to provide opportunities for indigenous persons and to produce programming in indigenous languages.

  3. Flexible regulation and content contributions: The Bill introduces requirements concerning the manner by which the CRTC regulates and supervises the broadcasting system. Specifically, the CRTC must take a flexible approach to regulation that is fair and equitable, and which takes into account the variety of undertakings and their differences. To this end, the CRTC should not impose obligations on a particular class of undertakings if doing so would not contribute in a material manner to the implementation of the broadcasting policy. The Bill also provides that the CRTC may make regulations requiring all broadcasting undertakings, including online undertakings, to financially contribute to Canadian content creation.

  4. Compliance and enforcement: To promote compliance with the Broadcasting Act, the Bill empowers the CRTC to impose “administrative monetary penalties” (“AMPs”) for violations of the Act. According to the proposed amendments, individuals may be liable for ­­penalties up to $25,000 for a first violation, and up to $50,000 for subsequent violations. Other entities may be liable for up to $10 million for a first violation, and $15 million for subsequent violations. Violations include non-compliance with regulations or orders, carrying on a broadcasting undertaking when prohibited to do so, and failing to submit required information to the CRTC.

  5. Oversight and information sharing: To improve oversight of the Canadian broadcasting system, the Bill proposes modification of the procedures by which the Governor-in-Council issues policy directions to the CRTC, as well as sets aside decisions of the CRTC. Bill C-10 also provides the CRTC authority to share certain confidential information with the Minister of Heritage, the Chief Statistician of Canada and the Commissioner of Competition.

These are the first major legislative amendments to the Broadcasting Act since 1991, reflecting the immense change ushered into the broadcasting industry over the last decade by the rise of online undertakings. If Bill C-10 becomes law, it will fundamentally transform the Canadian broadcasting system for all undertakings and stakeholders. Bill C-10 has undergone its first reading in the House of Commons, and must undergo further readings and committee review, before receiving royal assent and becoming law. Whether Bill C-10 will emerge from this process altered or intact, remains to be seen.

DLA Piper Canada will continue to monitor the progress of this bill and share insights and updates as they come available.

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