Bill C-11 Debate: Canadian Government Knew Streamers Already Paid Their Fair Share

Another defence of Bill C-11 has gone down in flames. The government knew that streamers already paid their fair share.

Another lie used to sell Bill C-11 has gone down in flames. It is added to the list of talking points that were proven to be lies in the Bill C-11 debate.

Already, there have been a number of talking points that were exposed as lies throughout the debate. One talking talking point that was exposed as a lie was that user generated content would not be regulated under this bill. That was exposed as a lie back in May of last year when then CRTC Chairman, Ian Scott, admitted that Bill C-11 does, in fact, regulate user generated content.

A separate talking point was that Bill C-11 does not manipulate algorithms on platforms. Scott, back in June of last year, admitted that Bill C-11 does mandate outcomes of those algorithms, thus ending that debate.

A third talking point that went down in flames was that Canadian creators want this bill. That talking point went down in flames during the Senate hearings on Bill C-11. During those hearings, Canadian creators turned up in droves to denounce the bill. This coupled with numerous campaigns on social media and petitions where Canadian creators were loudly denouncing this. The only creators that were supporting this were part of the legacy establishment or cultural elite and often had little to no knowledge about social media in the first place. When some of those creators were asked about their social media activities, they often admitted that they either don’t have a presence or didn’t really personally get all that involved with such platforms in the first place.

At this point, the question is, what talking point is left that wasn’t exposed as a bald faced lie used to sell Bill C-11. Well, one of those talking points is that Bill C-11 is about making large streaming services pay their fair share. Repeatedly, statistics, documents, and, of course, the testimony from streaming services during those same senate hearings showed that large streaming platforms already invest heavily in the Canadian market. In short, they have long been paying their fair share to the Canadian economy. It’s very far removed from what supporters of the bill say who insist that the large streaming services came to Canada, crashed on the Canadian couch, and now Bill C-11 sends a message that their rent is due.

While the evidence is overwhelming that large streamers do invest in Canada is quite clear, the question then became whether or not the government knew that this was the case or were simply badly informed. New internal documents reveal that the Canadian government, in fact, knew that large streaming platforms already paid their fair share. Rather than admit this, the government chose to knowingly gaslight the public and pretend that streaming services are simply freeloading off of Canada. From Micahel Geist:

Let me unpack each of the issues. First, the government’s economic modelling for television production reaches the following conclusion:

Regardless of the status of Bill C-11, FLS [foreign local service production] in Canada is expected to surge to new highs by 2025, led in part by global content boom fuelled by a growing field of streaming platforms. From an economic standpoint, even under a scenario where no action is taken to preserve Canadian television production, FLS activity will blunt any loss of employment on the Canadian content side. However, from a cultural perspective, the two sectors are not interchangeable, and the loss of Canadian-produced television shows will greatly impact the industry.

This conclusion raises both the economic and cultural impact of the bill. From a pure jobs perspective, the government is admitting the bill is largely irrelevant as it anticipates continued robust employment with or without Bill C-11. When Rodriguez talks about creating new jobs, his own department admits that the bill won’t do much to create new jobs.

If employment gains are off the table, what of the so-called cultural benefits? Supporters of the bill – including Canadian Heritage officials – argue that it will shift some production from FLS to Canadian content. Their argument is that may not dramatically change the employment situation but it will result in more Canadian stories. Yet this conclusion is also open to question. It is well documented that the Cancon rules often result in productions that bear little relation to Canada and productions with a strong Canadian connection may not qualify.

Further, the government knows that the Internet streamers already produce what amounts to Canadian content:

We assume foreign streamers are already producing shows that would qualify as Canadian content – because they meet CAVCO or CRTC criteria (e.g. nationality of key crew members) – but don’t currently qualify because of foreign ownership. Under existing rules, the copyright holder must be a Canadian, which precludes foreign companies like Netflix from producing their own Cancon in-house. In the latest BCCM model, we estimate such “unofficial Cancon” production represents about $48 million per year. Once foreign streamers are allowed to produce their own shows (which, presumably, Bill C-11 would seek to encourage), this spending would shift toward certified Canadian content.

This paragraph effectively acknowledges that the repeated claims suggesting companies like Netflix or Disney do not contribute Canadian content have been very misleading since the “unofficial Cancon” is largely indistinguishable from certified Cancon with respect to the content and employment role of Canadians.

As an added bonus, the documents also mention user generated content on various platforms. For the longest time, government officials have been reluctant to really comment on specifics about how user generated content would get regulated outside of falsely stating that “platforms are in and users are out”. That talking point has always been completely nonsensical because if you separate user generated content from numerous platforms, then you don’t really have much of a platform left. All you get stuck with is the logo and a way to sign in. Not much of a website worth looking at afterwards. As it turns out, the Canadian government really can’t make heads or tails about this aspect:

Meanwhile, the inclusion of social media is going to be controversial for reasons that extend beyond the regulation of user content. The government has emphasized that “platforms are in”, but internally it is clear it has little idea what that will actually mean. The estimate seeks to limit contributions to “professional content”, but officials admit that they don’t know what actually means on the platforms. In fact, the only social media platform included in the estimate is Youtube, suggesting that they don’t know what to do with services like TikTok or Instagram. All of these undefined terms will also be the subject of lengthy hearings, as will the government’s assumption that only Youtube qualifies for these payments.

Whatever the amount of professional content, the contribution itself is pegged at 5% of revenues, creating an expected net benefit is $10M in contributions, which is just one percent of the government’s overall expectation for Bill C-11. That contribution could come in many different ways, including existing support by Youtube for Canadian creators, meaning the financial piece might be small, but the regulation of user content will remain. Yet that one percent has effectively delayed the bill by years and turned it into one of the most contentious pieces of legislation of the Trudeau era. That the social media contribution is practically a rounding error in comparison to the larger bill reinforces the fears that the power to regulate user content is the bigger motivation behind its inclusion in Bill C-11.

To put it another way, the suspicions that the government had no idea how the internet works when crafting this bill (which some would reasonably assume was actually crafted by lobbyists in the culture sector more than the government) were bang on correct. In all likelihood, the government wasn’t really aware that independent digital first creators even existed and assumed that platforms were successful because of the republication of content produced by legacy players. The truth is far from that assumption.

What’s more, a safe bet is probably that when those Canadian content creators saw what happened, panicked about their futures, and showed up to the government in various forms, the government had no idea that they even existed. After that, the government probably jumped to the conclusion that the only reason they hadn’t heard of them was because they were probably paid by the platforms to be there. When those creators honestly spoke their mind and shared their concerns, the government became confused and just concluded that this was just a misinformation campaign bankrolled by Google. This despite those creators actually given the government straight answers and honestly explaining what impact this bill would have on their careers. It wouldn’t be that far off to guess that the government even felt blindsided by the backlash.

The fatal mistake by the government was to ignore those concerns, make a pile of assumptions about this that fits the image officials had in their head, and just listen to whatever the legacy players had to say. There was no effort to understand how platforms actually worked and when numerous creators offered to explain how it all works, they were blanket ignored and lie to after. When creators grew frustrated that their concerns were being ignored, the government responded by demonizing the creators, accusing them of anything from being misinformed to being paid by the large platforms.

Of course, as we’ve said before, just because you aren’t aware of their existence doesn’t mean that they aren’t there. This isn’t like the bad old days where if a creator had content worth consuming, then everyone would have heard of it. The internet is absolutely massive and someone can very easily have a billion views and you haven’t heard of it before. That sort of thing happens all the time on the internet simply because of the pure vastness of the internet as a whole. For some older individuals, however, this is a foreign concept to begin with.

If the government had any integrity, though it is highly unlikely that they will do this, they would realize that they made a fundamental mistake, scrap Bill C-11, and undertake study on how platforms actually work. After that, then completely rebuild Bill C-11 from the ground up with all stakeholders in mind, not just a handful of legacy players interests a heart. Unfortunately, because of a massively ignorant view of how the internet works, the government is more likely to ram this bill through. This after stripping the bill of a critical fix, forcibly shut down debate, and rammed the bill through.

Everything about selling Bill C-1l seems to have been a lie – demonstrably so. Whether it was who this bill benefits, the impacts on Canadians, how it interacted with the internet, and more, everything that was said to paint Bill C-11 as a good thing turned out to be a total lie. What’s more, the government has been shown, time and time again, to know that they were lying, yet chose to go along with it because lobbyists were making demands. For the government, so what if a couple of nobodies get screwed over? They never mattered to begin with.

Well, when the litigation commences once this becomes law, the courts are going to have to determine whether those “nobodies” are entitled to the same Charter rights as any other Canadians among other things. The government is going to find that this won’t be anywhere close to being as easy as ramming this bill through the parliamentary process.

Drew Wilson on Twitter: @icecube85 and Facebook.

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