Welcome (?) to the Online Streaming Act Era

So is the Online Streaming Act, aka Bill C-11, now technically S.C. 2023 c. 8 as of three days ago, as terrible as they say? Well let’s take an honest, clear-headed, unbiased read through this piece of crap and find out. Hey look at me, two timely blog posts in a row!

To give you the basic background here, this past Thursday the House of Commons finally passed Bill C-11, An Act to amend the Broadcasting Act and to make related and consequential amendments to other Acts, with the short title of the Online Streaming Act. I say “finally” because this bill has been around so long it used to have another name (Bill C-10) under the previous Liberal government. That Liberal government called an election because they only had a minority (unlike the current, uh, minority) so the bill died, but it came BACK, BAYBEEE! And now it is law. Let us read the law!

Actually let’s not read the law. Yet. We need some real legal background and context here. If you take my McGill Law class, you will learn that the conclusion of Class 2 (“Does Anyone Govern the Internet? A look at internet subject matter jurisdiction and net neutrality”) is that “the CRTC regulates access to the internet, but not the content of the internet.” This principle dates back to 1999, when the CRTC issued Public Notice CRTC 1999-197, which we in the internet law biz call the “New Media Exemption.” In that Notice, the CRTC concluded:

Therefore, pursuant to subsection 9(4) of the [Broadcasting] Act, the Commission [ed. – the CRTC] exempts persons who carry on, in whole or in part in Canada, broadcasting undertakings of the class consisting of new media broadcasting undertakings, from any or all of the requirements of Part II of the Act or of a regulation thereunder.

In plain English that means that if you put some video on the internet, the Broadcasting Act would not apply. So like, the CanCon (Canadian Content, but you knew that) rules and all the other shit that the CRTC may do to regulate TV would not be applied to the internet. Seemed sensible! Who wants the CRTC to regulate internet video? [SPOILER ALERT – the government]. The New Media Exemption was reinforced many times over the years, including in the Reference re Broadcasting Act, a Supreme Court case. The Supreme Court! They even voted 9-0! Everyone thought this was a good idea. Except some people [SPOILER ALERT – the government].

Thursday, everything changed. Now let’s read the law.

No, let’s not read the law. Yet. (We’ll get to it, I promise). Let’s take a look at some of the headlines in the wake of the law being passed. Maybe I should be clear about the law “being passed” on Thursday. Technically it “received royal assent” which is what we lawyers and politicians call passing laws in this country. I guess King Charles III approves all our laws or something. Anyway, the headlines:

  • Controversial bill to regulate online streaming becomes law (CBC)
  • Streaming giants required to contribute to Canadian content as Bill C-11 becomes law (Toronto Star)
  • The Bill C-11 Compromise That Never Came (Michael Geist)
  • Bill C-11 passes without user protections (Open Media)

And our personal favourite:

  • C-11 is now law and the internet is under government control (Toronto Sun, God bless ’em)

Maybe we can find some positive coverage? How about the government? Surely, they will have some good things to say:

Statement by the CRTC Chairperson and Chief Executive Officer, Vicky Eatrides, on the Online Streaming Act

Very positive!

Actually, the Globe and Mail has “Bill C-11 is a victory for the possible.” Yes, it is possible to impose CanCon and CRTC rules on Netflix and Amazon, but should you? The author at the Globe and Mail says:

The simplest justification for the new act is economic: Foreign streaming services, which take millions in subscription revenue out of the country, should be required to invest in local production


Ahem. I am ahead of myself. Come back for the complaining in the analysis section later. OK let’s fucking read this thing already!

The Online Streaming Act

As already mentioned, the Act is called the Online Streaming Act for short (and I will shorten it even more by calling it the OSA), but really it is not a full law in and of itself. The long title – An Act to amend the Broadcasting Act and to make related and consequential amendments to other Acts – really tells you what it does. And those “other acts” are barely even worth a footnote. The key to the OSA is what it changes to the Broadcasting Act. It wipes away the New Media Exemption with one simple updated  definition:

broadcasting undertaking includes a distribution undertaking, an online undertaking, a programming undertaking and a network;

The “online undertaking” that I bolded is what bas been added. This definition of “broadcasting undertaking” (which I will shorten to “BU”) is the key to the entire Broadcasting Act (which I will now shorten to the “BA”), because the BA applies to BUs (see section 4(2)). So now “online undertakings” (OUs!) are included, and regulated. And let us be clear, it is not just BUs that are entirely in Canada that are governed by the BA. Section 4(2) says BUs need only carry on “in part” in Canada to have the BA apply. Anyway, we should now look at the new OUs, which are not necessarily Canadian companies – what are they?

online undertaking means an undertaking for the transmission or retransmission of programs over the Internet for reception by the public by means of broadcasting receiving apparatus;

So basically a company putting “programs” on the internet, gotcha. What are “programs”?

program means sounds or visual images, or a combination of sounds and visual images, that are intended to inform, enlighten or entertain, but does not include visual images, whether or not combined with sounds, that consist predominantly of alphanumeric text;

So basically any video, gotcha. Like me on TikTok reproducing the Tom Cruise underwear dance to Old Time Rock ‘n Roll from Risky Business? Maybe! And audio too btw; don’t think Spotify is getting out of this unscathed.

So that’s the most basic thing you need to take from the OSA. They have added that any videos or audio on the internet are now subject to the BA. Yes, CanCon regulations, but there are a whole bunch of other obligations on BUs in the BA, like “the programming originated by broadcasting undertakings should be of high standard.” Oh, my Tom Cruise TikTok is of the highest standard I assure you. (You won’t find it btw, stop looking, it’s under a pseudonym)

So that is basically the point to take away here. “Programs” put on the internet by “online undertakings” who don’t have to be Canadian but just operate here, will be subject to the Broadcasting Act. So why all the controversy?

The Controversy: User-Generated Content

My Tom Cruise TikTok is “user-generated content” (UGC). I am a user, and I generated it, and it is content. Simple enough! But it is also, under the BA, a “program.” Don’t worry though, the OSA has specifically excluded UGC by adding the following new clause to the BA:

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.

Well, then, problem solved! Oh wait, I should read on, as this new section 4.1 contnues…

(2) Despite subsection (1), this Act applies in respect of a program that is uploaded as described in that subsection if the program (…)

(b) is prescribed by regulations made under sec­tion 4.‍2.

4.‍2 (1) For the purposes of paragraph 4.‍1(2)‍(b), the Commission may make regulations prescribing programs in respect of which this Act applies, in a manner that is consistent with freedom of expression

Do you see the problem here? I will spell it out in plain English in case you can’t read legal gobbledygook. Yes, UGC is excluded, BUT the CRTC (that’s the “Commission” in the law’s text) can just go ahead and make regulations that would apply to whatever programs they want, including UGC. Uh, ok?

The Controversy – User-Generated Content, Part 2: The Senate-ing

You see part of the problem is that the CRTC is not quite independent. Oh, it has some independence in some stuff. But also it implements the government’s policy goals in the broadcasting and internet sphere. So maybe we should not give the CRTC the power to regulate UGC? That would be a good idea! The Senate, Canada’s “deliberative body” or “body of sober second thought” or some such tripe, actually did a good thing for once and proposed language that would very clearly prevent the CRTC from regulating UGC. Along with a bunch of other amendments, it sent that back to the House of Commons. The House said sure, some of your amendments are nice, we’ll keep those. But that UGC one? We don’t need it.

Why did they not need it? Because the Minister of Canadian Heritage, Pablo Rodriguez, who is responsible for this law, has sworn (pinky swear) like ten thousand times that “oh, we would never regulate UGC!” I really do not have the time to link to all the times he said that. Just trust me, I have been following. And sure, we all believe him, right? And the CRTC too, right? As the bill received royal assent, in that statement from the Chair of the CRTC I mentioned above, she wrote:

The CRTC has no intention to regulate creators of user-generated content and their content.

“No intention”. Sure Jan. That’s comforting.

Other Amendments to the Broadcasting Act

There are some. I’ll talk about one further below.

“Consequential Amendments to Other Acts”

I feel it necessary to point out that the Cannabis Act has been amended to say there are some limitations about advertising cannabis on an online undertaking, the same way they are limited on TV. Duuuuuude.

Superterrific Happy Hour Analysis

Most of the online discussion and debate has been about UGC. That’s fine, and I agree it is a mess. I have explained why above.

But as I hinted at when talking about the Globe and Mail piece, I want to talk about CanCon generally, and imposing our broadcasting philosophy (“we should have Canadian shows!”) on foreign actors. To begin that discussion, I want to point out a very important update to the BA (the “Act” in this section from the OSA):

3 (1) Paragraph 3(1)‍(a) of the Act is replaced by the following:

(a) the Canadian broadcasting system shall be effectively owned and controlled by Canadians, and it is recognized that it includes foreign broadcasting undertakings that provide programming to Canadians;
(a.‍1) each broadcasting undertaking shall contribute to the implementation of the objectives of the broadcasting policy set out in this subsection in a manner that is appropriate in consideration of the nature of the services provided by the undertaking;

Everything that I bolded is new. The BA used to say “our system should be owned by Canadians”. Now it says “well we give up, we recognize that Canadians just really like Succession and Celebrity Big Brother (or whatever, work with me here) and we can’t fight it, but we are going to make those foreign broadcasters contribute to Canada and be subject to Canadian rules.”

As I screamed above and will now try to be calmer about – why? Why is the broadcasting industry so special? Why does a foreign company have to succumb to the whims of the CRTC? I watched Schitt’s Creek and Letterkenny and Kids in the Hall because they were awesome Canadian shows. I watch hockey (Canadian) and not baseball (American). Make an awesome Canadian program and I will watch it. Apple’s iPhone (American) won out over Blackberry (Canadian) because it had a better product. It is the nature of capitalism. Yet we don’t force Apple to contribute to the Canadian tech sector. But for some reason we feel we have to force Netflix to contribute to the Canadian broadcasting / content / entertainment sector. Why?

As the Globe and Mail piece points out:

If Netflix or Disney+ or Spotify are going to take hundreds of millions in revenue out of Canada, they must also contribute to the production of domestic content. Just as the reluctant CTV, Global and City have done for many years

That is a disingenuous leap. CTV, Global and City are Canadian companies. Netflix, Disney+ and Spotify are not. Why “must they” contribute to produce Canadian Content? We are now imposing Canadian rules on American companies. I am no fan of giant American companies, but still, I don’t like it. And it is not just spending, it is preference. Like requiring online services (again, who are foreign) to prioritize CanCon to Canadians in their algorithms. I am scared as to what my “You might also like” on Netflix will become.

I recognize this is probably not the most popular position – CanCan supporters say we need all those rules to protect Canadian culture. Canadian culture is just fine, thanks, and if it is good and out there I will find it, on the internet or my TV. I don’t need the CRTC or the government to shove it down my (digital) throat.

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