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Panel to redraft broadcasting laws as Ottawa eyes foreign firms such as Netflix, Facebook

Ottawa wants to give itself new legal powers over online companies and force foreign-based platforms such as Netflix and Facebook to provide greater financial help to Canada’s struggling cultural industries, according to federal officials and documents.

On Tuesday, the federal government will appoint a nine-member panel that will redraft the laws that govern the country’s broadcasting and telecommunications industries. The panel will be asked to get foreign digital companies to support Canadian culture and propose solutions for Canada’s ailing television news industry, according to its terms of reference. In addition, the panel will be asked to modernize the mandates of the CBC and the Canadian Radio-television and Telecommunications Commission (CRTC).

The government has also been accused of lagging behind other jurisdictions around the world in regulating such firms.

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With the panel, the government is warning global internet giants that they will be expected to play under new rules in the future.

Related: It’s time for Ottawa to get serious about modernizing broadcasting rules for the digital age

CRTC wants Netflix, Spotify to fund Canadian content

It will be chaired by Janet Yale, a former executive vice-president at Telus Corp. and former president and CEO of the Canadian Cable Television Association. While the panel will have 18 months to finalize its work, it will have to deliver an interim report next June, just four months before the general election.

In particular, the government is asking the panel to find ways to “ensure that Canadian and non-Canadian online players play a role in supporting the creation, production and distribution of Canadian content.

“The traditional business model of Canadian broadcasters is facing disruption brought about through the spread of digital technology,” the terms of reference for the panel said. “There is an opportunity to consider whether there are new ways that Canadian content creation, distribution and discovery in both official languages can be supported in this new digital communications environment.”

The government makes it clear in the panel’s mandate letter that it opposes an “approach that increases the cost of services to Canadians.” However, federal officials said there could be measures that spread costs among more players in the communications industry.

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As it stands, the cable industry provides a large portion of private-sector funding to the Canada Media Fund – even as it loses market share to online services that do not pay into the public-private fund to promote Canadian content. The panel will be expected to consider the CRTC’s recommendation last week calling on internet service providers, wireless firms and streaming services to make a greater contribution to the production of such content.

Heritage Minister Mélanie Joly faced a firestorm in Quebec last fall after unveiling a new cultural policy that did not give the federal government new legal powers over Netflix, which is disrupting Canada’s media landscape.

Prime Minister Justin Trudeau has repeatedly said his government opposes new taxes on Netflix and internet service providers. Still, his government has shown signs it remains open to new approaches.

Federal officials, speaking on condition of anonymity ahead of the announcement, said the panel will basically have an opportunity to draft the broad outline of a new Broadcasting Act and a new Telecommunications Act.

In a report titled Harnessing Change: The Future of Programming Distribution in Canada, released last Thursday, the CRTC said the current legislative and regulatory model is “unsustainable.” While subscriptions to traditional cable television are in decline, Netflix has become the highest-rated video service in Canada among children and young adults, the CRTC said.

“The legislation should capture everyone, and everyone who participates in the market should contribute,” CRTC chair Ian Scott said in an interview. “The old rules don’t fit.”

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Kate Taylor, a cultural reporter with The Globe and Mail, chats with Simon Houpt about the reasons why the CRTC should not mandate Canadian content for American adult movie channels Globe and Mail Update
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