It’s done, Bill C-11, Canada’s new Online Streaming Act, has passed the House of Commons and Senate, received royal assent, and been made into law.
Welcome to the end times.
Or maybe not.
A few people have asked me to write about C-11, because they weren’t sure what it would mean. I don’t blame them. But on one hand I was a bit busy with stuff, and on the other hand, reading the bill it became clear that it’s designed not to be very specific about a lot of the things people actually care about. Instead, a lot of the details are just kind of left up to the CRTC, or to the government’s instructions to the commission. The law just establishes a legal framework for regulating online media, and corrects or updates various elements of the Broadcasting Act.
On May 12, the CRTC took the next step in this process, launching a formal consultation process for new regulations on broadcasting. It’s a long process, with a hearing in November, and they expect to actually have new rules put in place in 2024.
Here, I’ll explain a bit of what’s actually happening (and what’s not happening) with this new law and how it’s being implemented. In short: you’re probably not going to notice that much of a difference.
The biggest goal of this new law is to require streaming services like Netflix, Amazon Prime and Disney+, as well as audio services like Apple Music and Spotify, to contribute financially to the Canadian broadcasting system. It expands the definition of “broadcasting undertaking” to include what it calls “online undertakings” — essentially those who distribute “sounds or visual images” online.
How exactly they should contribute financially is up to the commission, and the CRTC isn’t setting any specifics yet. What it has done is proposed some sort of interim contribution from online broadcasters and suggested that their contributions should go to one of the existing funds that already support Canadian content, like the Canada Media Fund, Musicaction or the Independent Local News Fund.
It is also proposing a threshold whereby online services with revenues under $10 million a year (or who are part of ownership groups with revenues under that threshold) would not have to contribute any money. This means that your favourite Japanese anime streaming service, unless it has more than about 100,000 Canadian subscribers, would not be affected by this. It also excludes just about any small content creation business from being affected by many parts of this law.
The specific thresholds, formulas and recipients are up for discussion at the hearing, and the CRTC is interested in hearing what you have to say on the matter.
A lot of the (legitimate) criticism about this bill, particularly in its early stages, related to social media, implying that the CRTC would regulate what Facebook or TikTok users could see and what they could post. As the bill went through the committee process, additional clauses were added to make it abundantly clear that the bill should not be read in this way.
It starts at the top in the definitions section, explicitly saying that social media users are not broadcasters if they are not providing the service or working directly for them, and that the social media services themselves are not broadcasters if they don’t exercise programming control over content:
Exclusion — carrying on broadcasting undertaking
(2.1) A person who uses a social media service to upload programs for transmission over the Internet and reception by other users of the service — and who is not the provider of the service or the provider’s affiliate, or the agent or mandatary of either of them — does not, by the fact of that use, carry on a broadcasting undertaking for the purposes of this Act.
Exclusion — social media service and programming control
(2.2) An online undertaking that provides a social media service does not, for the purposes of this Act, exercise programming control over programs uploaded by a user of the service who is not the provider of the service or the provider’s affiliate, or the agent or mandatary of either of them.
As if that isn’t enough, later in the bill this exclusion is repeated more generally:
Non-application — programs on social media service
4.1 (1) This Act does not apply in respect of a program that is uploaded to an online undertaking that provides a social media service by a user of the service for transmission over the Internet and reception by other users of the service.
The articles following this paragraph in Bill C-11 include various exceptions, and exceptions to those exceptions, and guiding principles the CRTC can use to decide if a given broadcaster or broadcast should be subject to its rules. One key element is revenue. The act explicitly states that if you don’t make money from it, and don’t pay whoever created it, it can’t be regulated as a broadcast.
Again later, another reminder to exclude social media:
For greater certainty
10.1 For greater certainty, the Commission shall make orders under subsection 9.1 (1) and regulations under subsection 10 (1) in a manner that is consistent with the freedom of expression enjoyed by users of social media services that are provided by online undertakings.
In other words, if you’re posting your opinions on YouTube, or doing dance videos on TikTok, the government isn’t going to start asking you for money or require you get a licence or something.
The law also suggests, and the CRTC explicitly states, that even if you make money from your social media posts (sponsored posts on Instagram or ad revenue sharing from YouTube, for example), you’re not covered unless it’s the social media service itself commissioning you to create content and exercising editorial control over it.
Still, how social media services are defined, and what rules apply to them, will be up to the CRTC.
The bill includes a series of what I would call common sense provisions that make it clear, in case of differing interpretations of the law, how it should be interpreted. This one, for example:
(3) This Act shall be construed and applied in a manner that is consistent with
(a) the freedom of expression and journalistic, creative and programming independence enjoyed by broadcasting undertakings and creators;
So if you find a loophole in the law that you think might technically mean the CRTC can shut down some website or impose ridiculous regulations on a small business, these clauses should reduce those fears, and can be used to challenge any such regulations in court.
The bill also provides for explicit exclusions for broadcasts that are part of schools, theatrical productions or ancillary to business communications (things like user instruction videos).
It’s a word essentially coined under the administration of former CRTC chair Jean-Pierre Blais, and is meant to deal with a major challenge for Canadian content in an online world with unlimited channels: How do you get people to discover content?
The bill, and the CRTC, want foreign streamers to make Canadian content more visible. How this will happen is up for a lot of debate.
The bill explicitly states that:
(r) online undertakings shall clearly promote and recommend Canadian programming, in both official languages as well as in Indigenous languages, and ensure that any means of control of the programming generates results allowing its discovery;
This worried a lot of social media sites and creators because of a potential downside to regulations on discoverability. The argument, from the Canadian Taxpayers Federation, hot-take-mongers and a bunch of people who went to a TikTok junket, was that if algorithms were artificially altered to promote more Canadian content to Canadians, those Canadian creators might get less engagement per view if their content was not geographically or nationally targeted, and the algorithm would punish them by promoting them less. Canadian-made content that might be popular outside the country would get less exposure under this plan instead of more, they argued.
There are a lot of assumptions here, particularly that the creators of such algorithms would not take effect this into account when tweaking them. But it was a legitimate worry.
The bill addresses this by including a clause that says:
(8) The Commission shall not make an order under paragraph (1) (e) that would require the use of a specific computer algorithm or source code.
The commission has gone farther than that, saying explicitly “we will not regulate algorithms.”
But how enhanced discoverability will be achieved is still an open question. The CRTC is suggesting relying on what it calls “desired performance standards” and leaving the specifics up to the service. That service could in theory then choose to change its algorithm to promote more Canadian content to achieve that standard. And while the CRTC would be following the law and its promise, the end result could still be algorithms being altered to satisfy CanCon regulations.
In practice, I think the CRTC will be much more concerned with long-form subscription content like Netflix and Disney+ than short-form videos on YouTube, Instagram and TikTok. Simply adding a “Canadian” section to services’ catalogs (which already exists for some of them, though the definition of “Canadian” might not line up with what the government considers CanCon) would probably be enough to satisfy the commission.
The notice of consultation hints that incentives, rather than hard rules, might be the way to go on this aspect, and possibly others as well.
Simply put, nothing in the bill provides for the CRTC censoring content online (beyond powers it already had under the Telecommunications Act). This was such a concern the CRTC made a FAQ page repeatedly debunking that myth.
The bill explicitly states that online broadcasters do not require a licence from the CRTC to operate. They are, however, subject to its rules.
The bill requires all broadcasters to provide information to the CRTC when requested. It seems like a simple thing, but Netflix famously got into a fight with the commission when it refused to provide basic information on its revenues and expenses in Canada, even when such information was promised to remain confidential. The CRTC ordered Netflix to comply, Netflix refused, and the CRTC backed down and said it would simply strike Netflix’s comments from the record.
This bill gives the CRTC more teeth to ensure such a standoff doesn’t happen again. Broadcasters could face fines for failing to comply with orders. (If they have no physical presence in Canada, in theory they could just ignore such orders, but in practice if they want Canadian money, they’ll need to play by Canadian rules while operating here.)
The bill makes several mentions of goals of the broadcasting system to better serve Indigenous communities, language minorities, Black and other racial minorities, and people with disabilities. The current broadcasting system has measures in place to help these target groups, but it’s unclear how online media would be pushed to serve these groups more. Will there be incentives (financial, regulatory or other) to offer more support and exposure to minorities or make programming more accessible, or will the CRTC take a tougher stance and impose orders and regulations?
The commission is looking for comments on what it should do here. The law would seem to suggest imposing things like closed captioning and described video on streaming services (the latter where practical) could be in the cards, but that’s not a given yet.
Similarly, there are several mentions of ensuring a minimum amount of original French-language Canadian content in French-language broadcasting. The Quebec cultural associations have clearly been lobbying on this, and probably expect hard regulations, which might have unintended consequences. But such quotas would only apply to regulated French-language services.
Besides funding and discoverability, the bill encourages foreign streamers to “make the greatest practicable use of Canadian creative and other human resources.”
(f.1) each foreign online undertaking shall make the greatest practicable use of Canadian creative and other human resources, and shall contribute in an equitable manner to strongly support the creation, production and presentation of Canadian programming, taking into account the linguistic duality of the market they serve;
How “practicable” is defined will be up to the CRTC to decide.
Under the previous Broadcasting Act, the CRTC could not fine broadcasters for misbehaviour. It got around this in various ways, mainly by making additional financial contributions conditions of licence. In a world where broadcasting licences are less important, that power becomes less useful.
The bill provides for fines of up to $25,000 or $50,000 for an individual and up to $250,000 or $15 million for groups that fail to comply with regulations or orders or are caught knowingly lying to the commission.
Will that be enough to force Netflix to hand over its sensitive financial data? We’ll see.
Among other things included in the bill:
- Broadcasting licences will no longer be limited to seven-year terms, and can be unlimited. The CRTC is also now allowed to unilaterally chance conditions of licence during a licence term, whereas before it couldn’t in the first five years of a licence term.
- The existence of Radio Canada International is explicitly set in law and the law explicitly states that RCI should be “intended for audiences outside of Canada.” RCI went through a series of cuts that ended up with it ending all shortwave broadcasts and regular audio programming and becoming a de facto domestic ethnic broadcaster. This law could be used to force the CBC to bring RCI closer to its original mandate.
- The act itself must be reviewed after five years by a House and/or Senate committee, who will have to file a report to Parliament.
What you can do about it
Have something to say about all this? Now’s the time. The CRTC is accepting comments from the public until June 27, and holding a public hearing in November. To submit your comments, you can fill out this form or mail comments to CRTC, Ottawa, Ontario K1A 0N2. Note that all information submitted, including contact information, becomes part of the public record.
In the notice of consultation, the CRTC sets out 39 questions to answer. Answer one, some or all of those questions as you want. But remember that what you suggest must still respect the letter and spirit of the law.
A separate notice covers what should be exempted from certain regulations, and another covers mandatory registration of online streaming services operating in Canada. Those have separate forms to submit comments, which are due June 12.
When submitting comments, remember that quality matters over quantity. You can submit a petition with a thousand signatures on it, but one submission with well-reasoned arguments will work much better in swaying the commissioners.
For more information on the CRTC’s regulation modernization project, you can see this page on the CRTC website.
Good summary Steve
Good summary, thank you.
Excellent analysis. The act is complicated and fairly vague and open to interpretation. It will be, I think, a much longer process than implementation by 2024. I think the new chair (who seems to be a breath of fresh air) will have a hard time getting very much in place before the end of her five year term. The stakeholders have strongly held positions and will fight for them tooth and nail.
Good summary, but the social media one is a bit of a minefield.
The act specifically refers to “person”. But if you are a business (even just a tradename) you may find yourself subject to the law. You may be construed as a broadcaster. While it is unlikely, there is a possibility that an overzealous person might try to apply this to (as example) a YouTube content creator that published political commentary under a moniker other their own real name.
My feeling is that this law is going to be the last and final attempt to wrestle the internet to the ground and stuff Canadian Content up it’s butt. It will fail in the long term, as the internet looks at blockages and restrictions as network errors to route around.
Viva la VPN.
Perhaps, but there are several articles in the law that would make this difficult. 4.1 (1) explicitly states that “This Act does not apply in respect of a program that is uploaded to an online undertaking that provides a social media service by a user of the service for transmission over the Internet and reception by other users of the service.” And while the CRTC can establish exceptions to this article, those exceptions must be applied “in a manner that is consistent with freedom of expression” [4.2 (1)], and cannot be applied if “neither the user of a social media service who uploads the program nor the owner or licensee of copyright in the program receives revenues” [4.2 (3) a]
The RCI bit is interesting. Many people in fora where I hang out froth at the mouth when the topic of RCI comes up. Unfortunately they, and possibly the CBC hierarchy (and their government minders), get hung up on the shortwave broadcasting aspect. As much as I love all things radio, the loss of RCI is not about the loss of the now-destroyed Sackville HF transmitting station, but about the **loss of programming that told the story of Canada to international audiences**. Note that I didn’t say propaganda, because I don’t think it should be – Canada’s story includes many warts, and those should be talked about, too. That programming should have continued regardless of how it got from the microphone to an international audience’s ears.
Lots and lots of ways to get that message out internationally and broadcasting on shortwave is still one of them but there are plenty of shortwave stations that will be happy to carry your programming for a fee … but there isn’t any programming to carry now.