Is there a Trojan Horse hiding in Bill C-10?

The current Broadcasting Act requires Canadian ownership and control of the broadcasting system, a concept now in danger from the changes proposed in Bill C-10. First enacted in 1968 and revised in 1991, the act declares that “the Canadian broadcasting system should be effectively owned and controlled by Canadians." This declaration has been buttressed by a direction issued and re-issued by federal cabinets ordering the CRTC, the broadcast regulator, not to license foreign broadcasters. Yet Bill C-10 proposes that the act’s Canadian ownership-and-control declaration be dropped. Is this just to finally allow non-Canadian online broadcasters serving subscribers in Canada—like Netflix—to be licensed by the CRTC? This seems unlikely. First, the Federal Court of Canada already decided in the late 1990s that Canadians’ effective ownership and control of their broadcasting system would not be jeopardized if a few non-Canadians hold some of the thousands of broadcast licences already issued by the CRTC. In other words, the CRTC could have licensed foreign broadcasters—except that the direction prevented this. Second, C-10 may want the CRTC to ‘register’ online broadcasters, not license them. Dropping the act’s Canadian ownership and control declaration has a more subtle impact. If this happens, the direction preventing the CRTC from licensing non-Canadians will also have to be dropped, as it would no longer reflect the act’s broadcasting policy. There must be at least some relationship between a statute’s purpose and cabinet directions. If C-10 passes as is what part of that policy—other than describing Canada’s broadcasting system as “Canadian”—would support a direction limiting ownership and control of broadcasting services to Canadians? Moreover, while only Parliament may change statutes such as the Broadcasting Act, directions to the CRTC can be changed at any time by any ‘Governor in Council’—that is, by the prime minister and his or her cabinet. Suppose the current foreign-ownership direction is amended, repealed, revoked or not upheld by the courts. Non-Canadians could then apply for CRTC licences to establish their own broadcasting services in Canada and/or to buy out existing Canadian broadcasters. This is where the Trojan Horse walks in. Before they deal with the CRTC, non-Canadians wanting to establish or buy broadcasting services in Canada worth more than $5-million would have to obtain the approval of the minister(s) responsible for administering the Investment Canada Act (ICA). It requires foreign investors to file applications and any other information required about their plans to operate or buy cultural businesses including radio or television services. The ICA minister must then be satisfied that these plans are compatible “with national industrial, economic and cultural policies, taking into consideration industrial, economic and cultural policy objectives enunciated by the government” and that the non-Canadians’ investments are “likely to be of net benefit to Canada." The ICA minister may consult with “representatives of industry and labour, provincial and local authorities and other interested persons," but need not consult the public. Foreign investors’ applications, any commitments they make, and the minister’s decisions that applications are or are not satisfactory need not be and are not published. This resembles the closed-door deal announced in September 2017 when then-heritage minister Mélanie Joly announced a Canadian programming agreement with Netflix. Sparse or negligible public documentation will make it difficult, if not impossible, to challenge ministerial decisions allowing or disallowing foreign broadcasters’ entry into Canada. C-10’s proposal to drop effective ownership and control of the broadcasting system by Canadians therefore may have several unexpected but dramatic results. The first touches on CRTC’s regulatory independence, often mentioned when discussing the CRTC’s current and future authority and role. If foreign investors ‘satisfy’ the ICA minister that their plans are ‘compatible with Canada’s national cultural policy’ and the government’s ‘cultural policy objectives,' could the CRTC readily challenge that finding? As long as the minister is satisfied with each new foreign application, in fact, could the CRTC ever limit the number of undertakings licensed to non-Canadians? C-10 may effectively remove the CRTC’s independence by compromising its ability to add conditions to or deny non-Canadian investors’ licensing applications. And while Bill C-10 mentions “the registration of broadcasting undertakings with the commission” it is otherwise entirely silent about the framework that the CRTC may or must use when it starts this process. Perhaps more government directions will fill the registration-framework gap in C-10—but again, such directions can change. Rather than implementing Parliament’s legislation independently, the CRTC may wind up dancing to the different tune of each new government. Second, if the CRTC’s role is reduced to rubber-stamping the ICA minister’s satisfaction, public participation in CRTC licensing proceedings would become entirely ineffectual. Such participation in CRTC matters may even largely disappear because the licence-renewal process in which Canadians can express concerns about broadcasters’ actual performance may vanish: broadcasting licences can now last up to seven years, but Bill C-10 would let the CRTC grant licences for indefinite terms. By making licence renewal proceedings a thing of the past, Bill C-10 could reduce any meaningful accountability for the privilege of using publicly owned airwaves. As well, where the current Broadcasting Act requires the CRTC to consult with the public before issuing new licences, Bill C-10 does not require public consultation when the CRTC registers undertakings. If Parliament values Canadians’ views when it comes to the evolution of their communications system, should its broadcasting law not say so? Third, if a two-tiered system emerges in which Canadian licensees must meet published CRTC requirements while non-Canadian broadcast applicants need only somehow ‘satisfy’ the ICA minister, how long would it take Canadian radio and television broadcasters to seek complete deregulation in the name of fairness? Bill C-10 may ultimately weaken, not strengthen, Canadian cultural sovereignty either by granting some broadcasters’ wishes to eliminate ‘burdensome’ obligations such as Canadian content requirements, or by encouraging such broadcasters to sell their interests to non-Canadian investors. C-10 and the Trojan Horse of the Investment Canada Act may therefore end up bringing down the regulatory foundation first stablished in 1968 to ‘safeguard, enrich and strengthen’ Canada’s “cultural, political, social and economic fabric." Over time it could lead to the destruction of the broadcasting system currently owned and controlled by Canadians, and the loss of public consultation in the system’s evolution. Four changes would prevent this. First, Parliament should retain the Broadcasting Act’s declaration about Canadian ownership and control of the broadcasting system—permitting the CRTC to consider this issue when it licenses services. Second, Parliament should remove the ability of the Investment Canada Act minister to review broadcasters’ plans by removing them from that act’s definition of “cultural business." This would still allow review of non-Canadian investors’ acquisitions of other cultural businesses, including publishers and producers, while maintaining the CRTC’s independence. Third, cabinet should revoke the direction that now prevents the CRTC from licensing any foreign broadcasters, and direct the CRTC to review its current approach to digital media. Dropping the direction would allow the CRTC to license foreign broadcasters in the context of a system that must remain effectively owned and operated by Canadians. As for digital media and online broadcasters, beginning a public-consultation process now, would keep the CRTC ahead of the curve when Parliament ultimately makes a decision about Bill C-10. Finally, Parliament should amend Bill-10 to include a framework for the registration system that brings online broadcasters into the current Broadcasting Act. That framework should at a minimum include a duty for the CRTC to consult the public before registering any broadcasting service. These essential changes would achieve four important goals: integrating foreign radio and television broadcasters into Canada’s communications system on the same terms as Canadian broadcasters; preserving the CRTC’s status as the sole independent authority responsible for regulating broadcasting in Canada; enabling the public to help set the course for Canada’s broadcasting system; and ensuring that the public interest is served transparently and accountably. Monica Auer is executive director of Forum for Research and Policy in Communications (FRPC), based in Ottawa. The Hill Times