Minister Steven Guilbeault proposes bill to regulate OTTs, grant more power to CRTC

Steven Guilbeault
If passed, the proposed amendments to the Broadcasting Act, tabled today, will see vast amounts of new money flowing through the domestic funding ecosystem.

Canadian Heritage Minister Steven Guilbeault has tabled long-awaited amendments to the Broadcasting Act that, if passed, will pull OTT services into the Canadian regulatory system, grant more powers to the CRTC and bring new money into the domestic funding ecosystem.

Specifically, Bill C-10 creates a new category of broadcasting undertaking – referred to as an “online undertaking” – which denotes a service designed for the transmission or retransmission of programs over the internet.

The bill clarifies that these undertakings (such as Netflix, Disney+, Crave, Tou.tv, Qub Musique) will fall within the scope of the Broadcasting Act, and therefore be subject to domestic regulatory requirements. (It should be noted that, under the proposed bill, regulation does not apply to users of social media services, or social media services themselves in terms of the content posted by their users.)

Exactly how the new regulatory regime will be implemented is up to the CRTC to decide. Under the proposal, the Commission would be granted greater powers and flexibility to ensure online services contribute to the domestic funding system.

First and foremost, the CRTC will be given “express powers to require broadcasting undertakings, including online undertakings, to make financial contributions to support Canadian music, stories, creators and producers.”

Those financial contributions, said the proposal, “would be aimed at addressing the projected stagnation and decline in the level of support for Canadian content, and provide a more sustainable source of support.”

The Commission will also have the flexibility to tailor the requirements for online undertakings, either as individual entities or as groups of entities, as it deems appropriate. Therefore, not all streaming services would be regulated in exactly the same way, depending on the nature of its operations and the content it distributes.

Proposal would vastly expand availability of funding

If the CRTC requires online broadcasters to contribute to the creation of Canadian content at a similar rate to traditional broadcasters, online broadcasters’ contributions to Canadian music and stories could hit $830 million by 2023, according to projections cited by the government’s proposal.

In addition, the bill would give the Commission the power to impose “conditions of service” ordering online broadcasters to support the discoverability of Cancon, and provide information to the CRTC. However, in a situation where the Commission requested commercially sensitive data, the bill noted the information would be protected.

In addition, the bill proposes that the Broadcasting Act be updated to better reflect Indigenous peoples, persons with disabilities and Canada’s diversity in the broadcasting system. The new language in the bill says programming should: reflect the Indigenous cultures of Canada and programming that is in Indigenous languages should be provided within the Canadian broadcasting system; be accessible without barriers to persons with disabilities; should serve the needs and interests of all Canadians – including Canadians from racialized communities and Canadians of diverse ethnocultural backgrounds, socioeconomic statuses, abilities and disabilities, sexual orientations, gender identities and expressions and ages.

During a press conference on Tuesday afternoon, Guilbeault said that, pending approval of the bill, he will recommend to the Governor in Council to issue a directive to the CRTC requesting that the Commission hold hearings and implement the new regulatory framework within nine months.

Within this directive, the Commission may be asked to revisit how it defines “Canadian programs” in the context of broadcasting regulatory obligations. The goal of this directive, according to Canadian Heritage, would be to ensure the definition takes into account the government of Canada’s other Canadian content policies of relevance, such as tax credits, as well as recognizing the importance of Canadian ownership of intellectual property.

A long time coming for many industry stakeholders

Compelling foreign-based digital services to contribute to the creation of domestic content has been one of Canadian media’s dominant storylines for a decade. And, while the bill is still at the proposal stage – and it remains unclear how swiftly some of these measures can be implemented – the overwhelming majority of stakeholders across the Canadian TV and film sector will welcome the news after calling for online players to be regulated for nearly a decade.

The tabling of the bill comes nine months after the release of the Broadcasting and Telecommunications Legislative Review (BTLR) report, which contained 97 key recommendations. While many of those recommendations have not been addressed in the bill proposed today, Guilbeault has stated previously that his intention was to push through some of the larger issues confronting the media sector – namely creating a more sustainable funding ecosystem – before examining some of the less pressing matters.

Stay tuned for industry reaction and insights