Order Issuing Directions to the CRTC (Sustainable and Equitable Broadcasting Regulatory Framework): SOR/2023-239

Canada Gazette, Part II, Volume 157, Number 24

Registration
SOR/2023-239 November 9, 2023

BROADCASTING ACT

P.C. 2023-1125 November 9, 2023

Whereas the Minister of Canadian Heritage has, in accordance with subsection 7(6) of the Broadcasting Act footnote a, consulted with the Canadian Radio-television and Telecommunications Commission;

Whereas, in accordance with paragraph 8(1)(a) of that Act, the Minister had a copy of the proposed Order Issuing Directions to the CRTC (Sustainable and Equitable Broadcasting Regulatory Framework), substantially in the annexed form, published in the Canada Gazette, Part I, on June 10, 2023 and the period given to interested persons to make representations has ended;

And whereas, in accordance with paragraph 8(1)(b) of that Act, the Minister had a copy of the proposed Order laid before each House of Parliament;

Therefore, Her Excellency the Governor General in Council, on the recommendation of the Minister of Canadian Heritage, makes the annexed Order Issuing Directions to the CRTC (Sustainable and Equitable Broadcasting Regulatory Framework) under subsection 7(1) of the Broadcasting Act footnote a.

Order Issuing Directions to the CRTC (Sustainable and Equitable Broadcasting Regulatory Framework)

Interpretation

Definitions

1 The following definitions apply in this Order.

Act
means the Broadcasting Act. (Loi)
social media creator
means a person who creates programs that are primarily intended for online distribution as user-uploaded programs through social media services. (créateur pour les médias sociaux)

Diversity among Indigenous peoples

2 In applying this Order, the Commission is directed to consider the diversity among Indigenous peoples.

General

Meaningful participation of Indigenous persons

3 In furtherance of the objectives of the United Nations Declaration on the Rights of Indigenous Peoples, the Commission is directed to support the meaningful participation of Indigenous persons in the Canadian broadcasting system, including by supporting

Supporting Canadian programming

4 The Commission is directed to impose requirements on broadcasting undertakings that ensure that the Canadian broadcasting system — which is to be effectively owned and controlled by Canadians and includes foreign broadcasting undertakings that provide programming to Canadians — strongly supports a wide range of Canadian programming and Canadian creators. The requirements, both financial and non-financial, must be equitable given the size and nature of the undertaking and equitable as between foreign online undertakings and Canadian broadcasting undertakings.

Community broadcasters and broadcasters of exceptional importance

5 The Commission is directed to consider how to foster collaboration and encourage innovation by, and support the sustainability of, community broadcasters and broadcasting undertakings that are of exceptional importance to the achievement of the objectives of the broadcasting policy set out in subsection 3(1) of the Act.

Regulation

Discoverability and showcasing

6 The Commission is directed to consider both established and emerging means of discoverability and showcasing to promote a wide range of Canadian programming. In making regulations or imposing conditions in respect of discoverability and showcasing requirements, the Commission is directed to prioritize outcome-based regulations and conditions that minimize the need for broadcasting undertakings to make changes to their computer algorithms that impact the presentation of programs.

Accessibility

7 The Commission is directed to regulate and supervise the Canadian broadcasting system with a view to supporting the provision of programming that is accessible without barriers to persons with disabilities.

Flexible and adaptable regulatory framework

8 To support flexibility and adaptability in its regulatory framework, the Commission is directed to

Use of Canadian human resources

9 In its regulation of the Canadian broadcasting system, the Commission is directed to ensure that the system maximizes the use of Canadian creative and other human resources in the creation, production and presentation of programming in the Canadian broadcasting system, taking into account the effects of broadcasting undertakings, including online undertakings, on economic opportunities and remuneration for Canadian creators.

Social media creators and video games

10 The Commission is directed not to impose regulatory requirements on

Regulations — section 4.2 of the Act

11 In exercising its powers under section 4.2 of the Act, the Commission is directed to set out clear, objective and readily ascertainable criteria, including criteria that ensure that the Act only applies in respect of programs that have been broadcast, in whole or in significant part, by a broadcasting undertaking that is required to be carried on under a licence or that is required to be registered with the Commission but does not provide a social media service.

Regulations and orders — section 11.1 of the Act

12 In exercising its powers under section 11.1 of the Act, the Commission is directed to

Determination of Canadian programming

13 In its determination of what constitutes Canadian programming, the Commission is directed to

Engagement

Indigenous peoples

14 In its regulation of the Canadian broadcasting system, the Commission is directed to engage with Indigenous peoples and Indigenous partners, governing bodies, broadcasters, creators, producers, industry organizations and community members and, in doing so, collaborate with relevant federal departments where possible to solicit comments on, among other things,

Equity-seeking and ethnocultural groups

15 In its regulation of the Canadian broadcasting system, the Commission is directed to engage with members of equity-seeking and ethnocultural groups, including Black or other racialized communities, to solicit comments regarding

Official language minority communities

16 The Commission is directed to engage with official language minority communities to solicit comments regarding the creation of and access to programming by and for those communities, including with respect to funding, distribution and discoverability.

Participation support

17 The Commission is directed to consider how to make the participation in the engagements referred to in sections 14 to 16 as accessible as possible.

Information and Implementation

Information — achievement of policy objectives

18 The Commission is directed to provide information to the public on a periodic basis regarding the progress made in achieving the objectives of the broadcasting policy set in subsection 3(1) of the Act, including progress on the inclusion and participation of Indigenous persons, members of official language minority communities and members of equity-seeking groups and ethnocultural groups in the Canadian broadcasting system.

Implementation

19 The Commission is directed to make any changes to its regulatory framework that are necessary for the purposes of the implementation of this Order within two years after the day on which it comes into force. In doing so, the Commission is directed to prioritize the implementation of sections 13 to 16 and to ensure that any changes to its regulatory framework are made as soon as feasible and on a continual basis during that two-year period.

Coming into Force

Registration

20 This Order comes into force on the day on which it is registered.

REGULATORY IMPACT ANALYSIS STATEMENT

(This statement is not part of the Order.)

Executive summary

Issues: Online broadcasting undertakings have a significant impact on Canada’s broadcasting system, but have been exempt from broadcasting regulations. While many online undertakings make significant investments through foreign location and service production, they lack obligations to reinvest into the production of Canadian content and support local creative talent. This shifting market reality will undermine the objectives of the Broadcasting Act (the Act) if the regulatory regime is not updated and modernized. The long-term viability of Canadian broadcasters is also at risk, as these broadcasters face both unfavourable market trends and an uneven regulatory regime that inhibits their ability to innovate, compete and serve communities.

Description: The Government is issuing policy directions to the Canadian Radio-television and Telecommunications Commission (the Commission) under section 7 of the Broadcasting Act. The directions give binding, high-level direction to the Commission as it engages Canadians and all interested parties to design and implement a new regulatory framework through an open, public dialogue.

The directions articulate key priorities and support important outcomes for Canadian audiences, creators and broadcasters. Key elements of the directions include

  • ensuring the meaningful participation of Indigenous persons in the broadcasting system;
  • excluding social media users and creators and their content from regulation;
  • supporting greater inclusion of equity-seeking groups and ethnocultural groups in the broadcasting system;
  • supporting the vitality of official language minority communities (OLMCs) in Canada and fostering the full recognition and use of both English and French in Canadian society;
  • supporting Canadian creators and media, including independent and community-run elements;
  • implementing discoverability requirements in a way that minimizes the need to alter the algorithms of broadcasting undertakings and that, where possible, increases choice for users;
  • redefining Canadian programs; and
  • creating an equitable, flexible and adaptable regulatory framework.

The directions outline the appropriate scope of regulation and where flexibility should be part of the framework.

Rationale: Between 2018 and 2020, the Broadcasting and Telecommunications Legislative Review (BTLR) Panel conducted extensive consultations across Canada with the public at large, industry stakeholders and academic experts. It heard from diverse parties including Indigenous communities, OLMCs, public-interest groups, accessibility groups and others. The Panel’s final report highlighted the pressing need to ensure that those who benefit from broadcasting in Canada contribute to the system. The Government introduced legislation to reform the Broadcasting Act to ensure that Canada’s laws reflect the evolving digital world and create a regulatory system where web giants contribute to the creation and promotion of Canadian stories and music.

The Online Streaming Act and the policy directions aim to address regulatory imbalances and the risks to funding for Canadian programming, while excluding social media creators from regulation. Shifts in the broadcasting sector risk undermining contributions to the production of Canadian audio and audio-visual content. Through the BTLR process and elsewhere, stakeholders have emphasized the importance of ensuring continued support in order to preserve Canada’s cultural identity and sovereignty. They also advocated for a regulatory framework that treats players equitably.

The Canadian broadcasting system is an important element of Canada’s cultural framework. The system provides diverse programming — such as programming for children and youth, dramas, documentaries, news, current events and public affairs — for Canadian audiences, promotes democratic expression, allows for cultural exchanges and is important to social cohesion. Canadian broadcasters operate in every province and territory, contributing to local, regional and national culture and communications. Many of these broadcasters have been advocating for changes to broadcasting regulations so that they can continue to serve Canadians in their communities.

The policy directions take into account important contextual factors such as the United Nations Declaration on the Rights of Indigenous Peoples, Canada’s two official languages, improved outcomes for equity-seeking groups and ethnocultural groups, digital and sectoral transformation, and Canada’s international commitments.

By directing the Commission’s priorities, the directions clarify for both the Commission and the public certain ways in which the Commission must use its resources. Benefits will result from the Commission’s actions taken after the directions come into force, setting the stage for anticipated benefits including support for Canadian broadcasters and the broadcasting environment, and support for Indigenous peoples, OLMCs, equity-seeking groups, ethnocultural groups, Canadian programs and creators, and opportunities for small businesses.

Issues

Online broadcasting undertakings have dramatically changed how Canadians watch television and movies, and how they listen to music. Since their entry into the Canadian market, online undertakings have become integral to Canada’s broadcasting system, but they have been exempt from Canada’s broadcasting regulations through decisions such as the Exemption order for digital media broadcasting undertakings (the Digital Media Exemption Order). While many online undertakings make significant investments through foreign location and service production, they lack obligations to reinvest into the production of Canadian content and to support local creative talent. Broadcasting regulations have always required such reinvestments, but Canadian broadcasters have experienced a decrease in subscribers and revenue that have led to lower contributions to Canadian content.

At its heart, the Act exists to promote diverse Canadian expression and the cultural and economic benefits that follow. The shifting market reality will undermine the Act’s objectives if the regulatory framework is not updated and modernized. The long-term viability of Canadian broadcasters is also at risk, as these broadcasters face unfavourable market trends and an uneven regulatory framework that inhibits their ability to innovate, compete and serve communities.

It is important that Canada’s broadcasting regulatory framework is structured to recognize the role of online broadcasting. The Online Streaming Act and the subsequent policy directions are needed to ensure that those who benefit from the Canadian marketplace are also required to contribute proportionately to local cultural production, thereby upholding support for a wide range of Canadian music, stories and creators.

Background

On April 27, 2023, Bill C-11, the Online Streaming Act (S.C. 2023, c. 8), received royal assent. The Commission’s implementation of its new roles and responsibilities are underway.

Broadcasting Act review

In June 2018, the Government of Canada appointed the BTLR Panel to review the legislation that governs Canada’s communications sector: the Telecommunications Act, the Radiocommunication Act, and the Broadcasting Act.

The Panel issued a final report containing 97 recommendations to the Minister of Canadian Heritage and the Minister of Innovation, Science and Industry on January 29, 2020. Among such recommendations, the BTLR report highlighted the pressing need to ensure that those who benefit from broadcasting in Canada — including large foreign companies — contribute to ensuring continued support for the creation, production and discovery of Canadian content.

The BTLR report illustrated important imbalances in Canada’s broadcasting system that the Online Streaming Act has sought to address by updating the Commission’s regulatory powers so that the system can better support content creators, bringing online undertakings into the regulated broadcasting system, and supporting greater inclusion of Canadians of all backgrounds and experiences in the broadcasting system.

Government priorities

The Government introduced and passed legislation to reform the Broadcasting Act to ensure that Canada’s laws reflect the evolving digital world and create a regulatory playing field where web giants contribute to the creation and promotion of Canadian stories and music. In practice, this requires ensuring that all broadcasting undertakings contribute meaningfully to the Canadian broadcasting system. This is clearly stated in the December 2021 Mandate Letter to the Minister of Canadian Heritage and the 2021 Speech from the Throne. The Government’s continued commitment to modernizing broadcasting legislation builds on past work and similar calls to action in previous mandate letters. Finally, fostering creativity, innovation, growth and employment opportunities in Canada’s cultural sector and in the creative economy is a core responsibility of the Department of Canadian Heritage (the Department). The Department and the Commission have both led several years of research and stakeholder engagement to support revisions to the Act.

Canadian broadcasting system

The Canadian broadcasting system is an important element of Canada’s cultural framework that provides diverse programming — such as programming for children and youth, dramas, documentaries, news, current events and public affairs programming — for Canadian audiences, promotes democratic expression, allows for cultural exchanges and is important to social cohesion.

Canadian consumers generated domestic demand worth over $5 billion in 2021. Competition driven by global services has benefitted domestic consumers and creators while creating new opportunities and challenges.

Canadian broadcasters operate in every province and territory, contributing to local, regional, and national culture and communications. They are large, medium, and small businesses and organizations. They operate more than 800 commercial radio stations and almost 200 campus, community, and Indigenous radio stations. They provide hundreds of television stations and bring cable and satellite services to Canadians’ homes. They create and broadcast Canadian content, report local news, and give voice to communities in Canada.

Important contextual factors

The factors below have informed the Governor in Council’s policy directions to the Commission. Taken together as elements of an evolving broadcasting system, they have been fundamental considerations in developing the directions.

United Nations Declaration on the Rights of Indigenous Peoples

The Declaration that Indigenous peoples and the Government of Canada have been working to implement to advance reconciliation, healing and cooperation, is a source for the interpretation of Canadian law.

Indigenous peoples

The Online Streaming Act recognizes that the Canadian broadcasting system should provide opportunities to Indigenous persons, and programming that reflects Indigenous cultures and that is in Indigenous languages.

Canada’s official languages and OLMCs

Online broadcasting undertakings that operate in Canada have been doing so primarily in English. Given the pre-existing minority context of the French language in Canada and North America, this has sharpened the challenges faced by audiences seeking content in French, and by those seeking to create programming in French. The broadcasting system should enhance the vitality of OLMCs in Canada and foster the full recognition and use of both English and French in Canadian society, including by supporting the production and broadcasting of original programs in both languages.

Serving equity-seeking groups and ethnocultural groups

The broadcasting system should serve the interests of all Canadians. Part of this is recognizing and overcoming the challenges faced by certain Canadians, including Black and other racialized persons, persons with disabilities, members of 2SLGBTQI+ communities, women, members of other equity-seeking groups, and Canadians of diverse ethnocultural backgrounds.

Note that 2SLGBTQI+ refers to the groups outlined in the 2022 Federal 2SLGBTQI+ Action Plan:

Intersectionality

The broadcasting system should recognize that individuals in Canadian society may experience intersecting barriers due to the overlap of identity factors, including Indigenous identity, ethnocultural background, being a member of an OLMC, or being a member of one or more equity-seeking groups. These barriers may compound in ways that create more significant challenges than the individual barriers alone present.

Digital and sectoral transformation

The digital age has transformed how cultural products are created, shared, and consumed within an increasingly open, global and dynamic marketplace. As part of this transformational change, the broadcasting system now includes undertakings that allow audiences to select programs from a catalogue on demand, others that allow users to upload their own programs for reception by the public, and linear broadcasting undertakings providing programs at a scheduled time and enjoyed simultaneously by audiences.

Through these transformations, there has been greater foreign competition for Canadian viewership. Ownership and control of the broadcasting system by Canadians have been and continue to be an important element of Canada’s broadcasting policy; they contribute to Canadian cultural sovereignty and the success of Canadian artists and creators.

Audio and audio-visual media production are rapidly evolving and engage a diversity of participants including companies of all sizes, public agencies, non-profits, self-employed artists, collectives, partnerships, and hobbyist creators.

The role of social media services in the lives of Canadians continues to grow. These services provide Canadians with opportunities to easily discover, access, create, and share programs online. Content created by social media creators has become an important tool for the promotion of self-expression, and these content creators have increased the diversity of voices available to Canadian audiences.

Social media services are also increasingly competing with and acting as substitutes for broadcasters in their role as distributors of commercial programming, such as movies, TV shows, music, and spoken word programming.

As online broadcasting undertakings and social media services collect more data and information, it is clear that Canadians want their privacy to be respected and protected.

International commitments

Canada’s international trade commitments in relation to digital commerce and services are an important contextual consideration in the modern broadcasting system. Canada also has responsibilities, along with an international cohort of partners, as a signatory to the UNESCO 2005 Convention on the Protection and Promotion of Diversity of Cultural Expressions. The Convention is an international standard-setting instrument that formally recognizes the dual nature, both cultural and economic, of contemporary cultural expressions produced by artists and cultural professionals, including in the digital environment.

The discoverability of minority cultural content online, systemic bias in algorithmic design and operation and the need for greater transparency and disclosure of the impacts and influence that algorithms can have on users have been long-standing concerns. Canada leads an international multi-stakeholder working group, which complements the Commission’s work and which has drafted guiding principles on diversity of content online to provide a framework that addresses these challenges.

Objective

The policy directions bind the Commission, as it engages Canadians and all interested parties, to design and implement a new regulatory framework through an open, public dialogue. The directions support the production, promotion and discoverability of Canadian music and audio-visual programs. They also provide guidance regarding the appropriate scope of regulation and outline where flexibility should be part of the regulatory framework.

Description

The policy directions instruct the Commission to implement the following measures,

Ensure meaningful participation of Indigenous persons

The Commission is directed to support, on an ongoing basis, the meaningful participation of First Nations, Inuit, and Métis peoples in the broadcasting system. This includes a direction to support the production of, and audience access to, programs by First Nations, Inuit, and Métis people, and support for broadcasters owned and controlled First Nations, Inuit and Métis people. In order to ensure its work is responsive and targeted, the Commission is directed to meaningfully engage with First Nations, Inuit and Métis partners, governments, broadcasters, creators, producers, industry organizations, and community members.

The Commission is also directed to engage on how to best support narrative sovereignty, a concept concerned with the importance of Indigenous peoples telling their own stories. The Commission is also directed to consider how its engagements and actions will further the objectives of the United Nations Declaration on the Rights of Indigenous Peoples, including self-determination and Indigenous peoples establishing their own media.

Exclude social media creators

The Commission is directed to exclude from regulation

The directions build on provisions in the Online Streaming Act and deliver on commitments by the Government to ensure that the Commission would only regulate social media platforms insofar as they are acting like broadcasters and not the social media elements of their services, which includes any content created and uploaded by everyday users (commonly known as user-generated content).

The use of the term “person” in the definition of social media creator includes both natural and legal persons.

Support OLMCs and official languages

The Commission is directed to meaningfully engage, on an ongoing basis, with members of OLMCs regarding the funding, distribution and discoverability of programming made by and for those communities. The Commission is also directed to ensure its expenditure requirements support the creation and availability of programming in both official languages, including those by creators from OLMCs, taking into consideration the minority context of French in Canada.

Support diversity and inclusion

The Commission is directed to meaningfully engage, on an ongoing basis, with Black and other racialized communities, persons with disabilities, members of 2SLGBTQI+ communities, women, other equity-seeking groups, and Canadians of diverse ethnocultural backgrounds regarding support for the creation, availability and discoverability of programming made by and broadcasting undertakings carried on by members of those communities and groups. The Commission is also directed to ensure its expenditure requirements support the creation of programming by creators from these groups and communities, taking into consideration challenges they face, including systemic racism.

In order to provide greater access to programming to more Canadians, the Commission is directed to regulate and supervise the broadcasting system in a way that supports programming being available without barriers to persons with disabilities.

Support Canadian creators and media

The Commission is directed to craft a clear methodology for financial contributions and obligations, including from online undertakings, to support and promote Canadian programming and creators. In developing this methodology, the Commission is directed to consider a number of priority factors and policy goals.

The Commission is directed to ensure that the system maximizes the use of Canadian human resources in the creation, production, and presentation of programming. The Commission is also directed to consider the impact of its regulatory approach on Canadian producers, creatives and other personnel in the context of how their economic opportunities and remuneration are significantly impacted by changes to the Canadian broadcasting industry. The Commission is also directed to support activities and services, such as promotion, training and development for Canadian creators, including social media creators.

Discoverability and showcasing

The Commission is directed to take into consideration various means of discoverability and showcasing, whether on-platform or off-platform, to promote a wide range of Canadian programs and creators. The directions are to prioritize an approach that targets outcomes, such as measures of audience size or the ability of users to find Canadian programs.

The Commission is also directed to implement discoverability in a way that respects and, where possible, increases choice for users while also minimizing the need to alter the algorithms of broadcasting undertakings. In its implementation of discoverability and showcasing requirements, the Commission is directed to avoid disruptions to programs and undertakings to which the Online Streaming Act does not apply.

Redefine Canadian programs

The Commission is directed to examine how it defines Canadian programs, in both the audio and audio-visual sectors. This includes consulting with Canadians, members of the creative and production sectors and other interested parties. Given significant public interest and the foundational nature of these definitions to the regulatory framework, the Commission is directed to prioritize its examination of these definitions.

The Commission is directed to ensure that the definition of “Canadian programs” is multifaceted, and that it interacts with evolving Canadian content policies. Finally, in its examination, the Commission is directed to recognize the crucial roles played by Canadian independent producers and production companies, and the crucial relevance of Canadian creative personnel that have a high degree of creative control or visibility — such as actors, writers, directors, and showrunners — being used by both Canadian and foreign broadcasting undertakings.

Create an equitable, flexible and adaptable regulatory framework

The Commission is directed to ensure that any financial or non-financial requirements imposed on broadcasting undertakings are equitable relative to their size and nature, and would ensure comparable foreign and Canadian undertakings are treated equitably. The Commission is directed to consider the diversity and nature of business models in the sector, such as the differences between broadcasting via linear, on-demand and social media services.

To establish a flexible and adaptable regulatory framework, the Commission is directed to consider a number of factors including digital tools and solutions, as well as incentive and outcome-based tools, to minimize regulatory burden, avoid unintended impacts on technological innovation, promote competition, and achieve cultural objectives. In a further effort to minimize burden and maximize effectiveness in the regulation of digital platforms and services, the Commission is directed to consider where it can coordinate with other regulatory bodies. The Commission is also directed to foster collaboration between Canadian and foreign broadcasting undertakings to further support the flexibility and adaptability of its regulatory framework, where appropriate.

Regulatory development

Consultation

The BTLR Panel’s consultation process, which launched in September 2018 and closed in January 2019, yielded over 2 000 written submissions from stakeholders, including cable and satellite providers, independent broadcasters, producers, creators, online broadcasting undertakings, public broadcasters, government agencies, Indigenous organizations, advocacy groups for persons with disabilities, and consumers. The BTLR Panel had in-person meetings with experts, creators, stakeholders, and other interested parties, including First Nations, Inuit and Métis broadcasters, and OLMCs, in Vancouver, Calgary, Whitehorse, Yellowknife, Iqaluit, Winnipeg, Toronto, Montréal, Halifax, and St. John’s. The results of these consultations were made public and considered in the development of the policy directions. Since the BTLR consultation process, departmental officials have continued to meet with many stakeholders in the context of modernizing the broadcasting system. In addition, departmental officials have met with a variety of stakeholders and have heard about many of the issues raised by these players in the context of the legislative review.

Provinces and territories have highlighted the urgent need to take action to modernize Canada’s broadcasting system to ensure an equitable playing field for all broadcasters, creators, and producers. The Minister of Canadian Heritage engaged with provinces and territories on the directions and will continue to do so as the Commission implements the Online Streaming Act, to share information and have discussions about modernizing Canada’s broadcasting system.

As required under the Act, the Minister of Canadian Heritage has consulted with the Commission on the policy directions. The Commission reviewed the policy directions, and where appropriate, provided feedback based on its broadcasting expertise. This feedback was incorporated as appropriate into the drafting of the directions.

Prepublication results

The draft policy directions were published in Canada Gazette, Part I, on June 10, 2023, and the consultation period closed on July 25, 2023. The Department received and reviewed over 1 000 unique comments from over 500 respondents. Stakeholder positions were largely unchanged from those expressed during the Parliamentary processes for Bills C-10 and C-11, and their comments on the policy directions reflect this fact. Accordingly, the Department has made changes to the policy directions to accomplish two main goals: clarify sections of the policy directions where misinterpretations or a lack of clarity were identified and clarify the language in the Regulatory Impact Analysis Statement (RIAS).

Comments from some Canadians expressed concerns about freedom of expression and censorship of the Internet and digital platforms and they requested that Bill C-11 be repealed. The Government recognizes the vital importance of Canadians’ freedom of expression. Bill C-11 does not infringe on any rights or freedoms guaranteed by the Canadian Charter of Rights and Freedoms.

Groups representing Canadian creators and producers were pleased to see strong support for Canadian music and stories, but they opposed the flexible and adaptable regulatory approach outlined in the policy directions. Foreign online broadcasters support the flexible and adaptable approach as necessary for their inclusion in the broadcasting regulatory framework. Canadian broadcasters also supported the flexible and adaptable approach, as well as requesting a direction relating to immediate regulatory relief. The Department made targeted changes to support the sustainability of Canadian broadcasters: (1) direct the Commission to foster collaboration between Canadian and foreign broadcasting undertakings, where appropriate, in order to support flexibility and adaptability in its regulatory framework; and (2) direct the Commission to consider how to foster collaboration between community broadcasters and broadcasting undertakings of exceptional of importance to the achievement of the objectives of the Act. Stakeholders presented similar views on flexibility and support for Canadian programming during the Parliamentary processes for Bills C-10 and C-11, and so the Department had considered these views while drafting the policy directions and believes that the policy directions strike the right balance to provide flexibility in the regulatory framework while strongly supporting the creation of Canadian music and stories.

Foreign online broadcasters, some civil society groups and academics were pleased to see the Government’s promised exclusion for the content of social media creators. Some Canadian stakeholders argued that the social media exemption does or should only apply to individuals. This is not the policy intent expressed in Bill C-11 or the policy directions, and so the RIAS was updated to clarify that the exemption applies to natural and legal persons.

A number of francophone stakeholders raised the importance of French-language programming and the need to better support it and make it available. The Department added a new direction to ensure that expenditure requirements support the creation and availability of French language programming.

Modern treaty obligations and Indigenous engagement and consultation

As required by the Cabinet Directive on the Federal Approach to Modern Treaty Implementation, an assessment of modern treaty implications was conducted.

The initial assessment of modern treaty implications examined the geographical scope and subject matter of the initiative and identified a duty to consult Nunavut Tunngavik Incorporated (NTI). NTI is the rights holder under the Nunavut Land Claims Agreement (NLCA). Article 32 of the NCLA ensures that Inuit can participate in the development of social and cultural policies, and in the design of social and cultural programs and services, including their method of delivery, within the Nunavut Settlement Area.

The Department held four engagement sessions at the end of January 2020 with First Nations, Inuit and Métis creators, producers and broadcasters. Participants advised on how the Government of Canada could make progress on issues such as access to resources, representation on decision-making boards, and funding available to protect and promote First Nations, Inuit and Métis languages and culture in broadcasting.

The Department will continue to engage with First Nations, Inuit and Métis peoples to reduce further barriers to participating in the broadcasting system in Canada. It will also monitor ongoing negotiations of modern treaties and self-government agreements, the Recognition of Indigenous Rights and Self-Determination discussion tables, and treaty implications, and will address any implications or obligations that are identified.

Instrument choice

The Minister of Canadian Heritage introduced in Parliament Bill C-11, the Online Streaming Act, on February 2, 2022. Section 7 of the Act gives the Governor in Council the ability to give directions of general application on broad policy matters with respect to the broadcasting policy and regulatory policy objectives set out in the Act. The Government considers that complementary policy directions are the appropriate instrument to direct the Commission’s implementation of the new regulatory framework while also communicating the Government’s intentions to the public and stakeholders. Other Governor in Council tools in the Act, such as section 15 reports or section 28 powers, have a scope that makes them inconsistent with the Government’s intent to issue high-level directions to the Commission relating to the implementation of the Online Streaming Act. Instruments outside of the Act would not pertain to the objectives of the Government in the broadcasting system. While the Government will continue to rely on a broader evolving network of federal financial mechanisms to support Canadian audio and audio-visual content, such mechanisms run parallel to the regulatory framework and would not be a substitute for the directions.

Regulatory analysis

Benefits and costs

Cost-benefit analysis measures impacts as incremental differences between forecasted outcomes without the proposal (baseline scenario) versus with it (regulatory scenario). This allows a focus on results that are directly attributable to the proposal versus unrelated ones. Costs of the proposal include both incremental resources committed to achieving the desired outcome and the opportunity cost of alternative uses of those resources.

Baseline scenario

In the absence of the policy directions, the Commission would commit resources to adapting regulations to the evolving media landscape. It would also have needed to commit resources to determining how to proceed. The manner and focus of this would have been less certain and more open to greater scope and less accountability.

Regulatory scenario

In this scenario, the Commission will use a comparable level of resources as in the baseline to proceed with its regulatory plan. Actions will be taken with consideration for the policy directions and in such a way as to demonstrate accountability.

The regulatory scenario reduces the number of potential approaches compared to the baseline scenario, as several approaches that the Commission may have considered are incompatible with the policy directions. Therefore, the Commission will use fewer resources, as it will have fewer approaches to consider.

Costs

The policy directions may result in low incremental costs to the Commission, which are expected to be less than $1 million annually and could be absorbed within existing resources.

The policy directions bind the Commission on general matters of broad application to its decisions. By directing the Commission’s priorities, the directions clarify for both the Commission and the public certain ways in which the Commission must use its resources. In multiple instances, the directions instruct the Commission to take specific actions. These actions relate to areas where the Commission would have had to take some kind of action regardless of the directions. However, in being instructed to undertake specific actions, the Commission’s flexibility to pursue other avenues that might have been more or less costly is reduced.

In providing specific areas of focus for the Commission, developed in response to consultation, engagement, and research, the directions provide a clear path forward and save the time, money, and resources required in making incremental change over a long period of time. The directions impact the Commission by guiding how it conducts its regulatory functions, but do not directly result in any regulatory burden or costs for businesses or consumers.

Benefits

Benefits will result from the Commission’s actions taken after the directions come into force, setting the stage for anticipated benefits such as those that follow.

Support for Canadian broadcasters and the broadcasting environment

Canadian broadcasters are expected to benefit from a new regulatory framework in which they and their competitors are regulated equitably. Clear requirements for expenditures on Canadian programs and outcome-based regulations will benefit both the production and distribution ends of the broadcasting value chain. Similarly, supports for community broadcasters will encourage a healthy and dynamic broadcasting environment. These broadcasters reflect diverse communities and serve needs that are otherwise underserved, including through greater community participation in their operations and programming. Greater collaboration between these broadcasters will also benefit a more innovative and sustainable broadcasting environment.

Support for Indigenous peoples

The Online Streaming Act addresses previous gaps in the Act that did not adequately support Indigenous broadcasters and creators. The policy directions would further elaborate on the importance of support, regulation, and engagement that are aimed to further reconciliation and help address the repercussions of historical injustices and colonial legacies that have contributed to an underrepresentation of Indigenous stories and Indigenous-owned broadcasting undertakings in Canada’s broadcasting landscape.

Support for OLMCs

OLMCs will benefit from the outcomes of requirements and engagement related to the creation of and access to programming by and for their communities. Canadian audiences will benefit from ready access to programming in both official languages.

Support for equity-seeking groups and ethnocultural groups

Black and other racialized communities, persons with disabilities, members of 2SLGBTQI+ communities, women, other equity-seeking groups, and Canadians of diverse ethnocultural backgrounds will benefit from the outcomes of requirements and engagements that are specifically focused on tools, targets, and methodologies to bring more programming that they create and produce to Canadian audiences. Canadian audiences will benefit from ready access to a greater, more representative variety of storytelling.

Support for Canadian programs and creators

The Department estimates that if the Commission implements similar regulatory requirements for online broadcasters as those in place for currently regulated broadcasters following the Online Streaming Act, the potential contributions by online broadcasters will have a significant impact for Canadian content and creators.

Ecosystem support will benefit Canadian creators, including social media creators, who create audio or audio-visual content for broadcast by broadcasting undertakings. Developing creative talent and business acumen benefits the Canadian broadcasting and creative sectors. In general, these efforts will help all Canadian creators better understand and adapt to changing opportunities in the context of online streaming, with the aim of encouraging fair remuneration and economic arrangements.

Canadian programs and creators will ultimately benefit from broadcasting undertakings being encouraged to consider and implement a wide range of discoverability methods, including advertising and marketing both on and off platform; or offering search, filters, categories, playlists, or other tools that enable users to find a diverse range of Canadian programs.

Opportunities for businesses

Ultimately, small and medium-sized Canadian businesses will benefit from the following:

Small business lens

Analysis under the small business lens concluded that the policy directions will not directly impact Canadian small businesses. However, the directions instruct the Commission to consider certain factors and policy goals while it designs and implements a new regulatory framework with the active participation of all interested parties, including small and medium-sized businesses and the organizations that represent them.

The specific directions to exclude video games and the programs of social media creators from regulation and increase funds available for initiatives benefitting the overall creator ecosystem, including creators and businesses of all sizes, will provide the potential for beneficial outcomes. However, the overall level of costs and benefits to small businesses will depend on the Commission’s specific regulations.

One-for-one rule

The one-for-one rule does not apply, as there is no direct impact on businesses. The directions are instructive in nature and will guide the Commission in implementing a new regulatory framework. The level of administrative burden on businesses will depend on the Commission’s specific regulations.

Regulatory cooperation and alignment

The directions are not related to a work plan or commitment under a formal regulatory cooperation forum. The proposal itself will not directly create new regulations applying to broadcasters. Rather, it will issue directions to the Commission, which, as an independent regulator, will develop and issue further regulations. This type of relationship between the regulator and Cabinet is specific to the federal legislative and machinery context of Canada; therefore, alignment of this specific instrument to other jurisdictions is not directly applicable. However, given that the directions give guidance to the Commission regarding the application of a broader regulatory framework to online broadcasters, analysis on how Canada’s general approach to broadcasting regulation compares to that of other jurisdictions is still relevant.

Linkages to international agreements

The directions will bolster Canada’s commitments as a signatory to the UNESCO 2005 Convention on the Protection and Promotion of the Diversity of Cultural Expressions, the 2017 Digital Guidelines on the Implementation on the 2005 Convention, and as the lead of the international multi-stakeholder working group that has developed the International Guiding Principles for Diversity of Content Online. The 2005 Convention recognizes the dual nature, both cultural and economic, of contemporary cultural expressions produced by artists and cultural professionals, including in the digital environment.

The Guiding Principles emphasize the importance of creation, access and discoverability of diverse content online; fair remuneration and economic viability of content creators; promotion of diverse, pluralistic sources of news and information as well as resilience against disinformation and misinformation; and transparency regarding the impacts of algorithmic treatments of online content.

Comparisons with other jurisdictions

There are relevant international examples of cultural policies responding to the digital era of audio and audio-visual content. Regulatory difference is important in this case to achieve Canada’s broadcasting policy objectives, but the Commission does ensure regulatory coordination with other jurisdictions in its overall operations.

In 2018, the European Union enacted amendments to the Audiovisual Media Services Directive (AVMSD). The Department met with EU counterparts to discuss similar priorities and challenges as they progressed towards adapting their own domestic regulatory frameworks to advance cultural objectives. The updated AVMSD includes requirements for global online broadcasting services to promote and distribute European works, with specific guidelines on the percentages of catalogues to be European works and how these services will additionally feature those works on their platforms.

Whereas the AVSMD leaves open the possibility for individual member states to impose financial contributions on media service providers, a key regulatory discrepancy with the directions is the instruction for the Commission to ensure online undertakings are required to contribute to Canadian programming and Canadian creators. Requiring such contributions would bring online undertakings into a contribution framework similar to the existing Canadian content contribution obligations. The directions also instruct the Commission to consider a wide range of methods for supporting discoverability, promotion and showcasing of content that maintain or increase consumer choice, rather than recommending the AVSMD approach of creating specific quotas on content catalogues. By contrast, the Canadian approach would rely further on the incentive for online undertakings to make available Canadian content to recoup the investments they make under a new contribution framework.

The EU and the Canadian contexts present different challenges. Differences in regulation between Canada and the EU are necessary to respond to different local needs and priorities, industry contexts, jurisdictional requirements, constitutional frameworks, and histories of broadcasting regulation. In developing its regulations, the Commission will consider pertinent international examples alongside uniquely Canadian considerations such as the special place of Indigenous peoples in Canada, dual official languages, and proximity to the dominant cultural force of the United States among other characteristics that are predominant in the Canadian broadcasting system.

Strategic environmental assessment

In accordance with the Cabinet Directive on the Environmental Assessment of Policy, Plan and Program Proposals, a preliminary scan concluded that a strategic environmental assessment is not required.

Gender-based analysis plus

No gender-based analysis plus (GBA+) impacts have been identified for this proposal. The directions will not have a direct impact on Canadian populations, as they are anticipated to only have behavioural consequences for the Commission. The directions provide the Commission with guidance regarding how to implement the changes to the Act and how to use its new regulatory tools.

Overall, it is expected that all Canadians will benefit from the Commission’s actions following the issuance of the directions. However, the impact will vary across populations. Notably, the Commission’s actions will likely lead to positive impacts for First Nations, Inuit and Métis people, members of OLMCs, as well as members of Black and other racialized communities, persons with disabilities, members of 2SLGBTQI+ communities, women, other equity-seeking groups, and Canadians of diverse ethnocultural backgrounds.

Implementation, compliance and enforcement, and service standards

Implementation

The policy directions will come into force on the day on which they are registered and will bind the Commission in respect of matters pending before it on that day. The directions, however, will not apply with respect to a licensing matter pending before the Commission where the period for the filing of interventions in the matter has expired unless that period expired more than one year before the coming into force of the directions.

Following the coming into force of the policy directions, the Commission will convene open, public and evidence-based dialogue through which all interested parties can help to shape the new regulatory framework. The Commission will begin implementing the directions immediately, with all components to be implemented within two years.

Compliance and enforcement

The Commission is bound to exercise its powers and perform its duties under the Act in accordance with the terms of any order made under section 7 of the Act. Commission licensing decisions can also be reviewed by the Governor in Council on the basis of a petition in writing presented to them, or on their own motion.

Contact

Amy Awad
Director General
Digital and Creative Marketplace Frameworks
Department of Canadian Heritage
25 Eddy Street
Gatineau, Quebec
J8X 4B5
Email: decretdinstructions-policydirection@pch.gc.ca