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Sean Speer: Bill C-11 is a vote of no confidence in Canada’s creative class

Commentary

Last week’s announcement by Canadian Heritage Minister Pablo Rodriguez that the government intends to reject several good-faith amendments to Bill C-11 passed by the Senate has created a growing sense of defeatism on the part of Canadian online creators. The bill, which proposes to extend Canadian content rules (known as the “CanCon” regime) to web-based content, is now on a path to eventual parliamentary passage. 

If that ultimately occurs, the bill’s consequences will take some time to manifest themselves but there’s good reason to think that it will damage the economic livelihoods of online creators, narrow the range of available Canadian content, and harm the interests of Canadian consumers. 

As a refresher for Hub readers, the CanCon regime involves a combination of mandates, quotas, and financial obligations for traditional Canadian broadcasters in the name of promoting and supporting Canadian radio and television content. The regime, which finds its origins in an era of airwave scarcity and heightened cultural nationalism in the 1960s, is overseen by the boringly-named yet highly-powerful Canadian Radio-Television and Communications Commission (CRTC).

Up until now, the internet has, by and large, been outside the purview of the CRTC. That’s because in the late 1990s the Chretien government made the enlightened decision to exclude it from regulation on the grounds that the internet had the potential for positive-sum effects on the production and consumption of Canadian content. Now nearly a quarter century later, the current Liberal government proposes to undo its predecessor’s decision and extend the CRTC’s reach to the world of online content. 

The most charitable explanation for the government’s insistence in light of considerable opposition (including from a large number of individual online creators) is that the regulatory status quo creates an unsustainable asymmetry between traditional broadcasters who are subjected to a set of government edicts and online-based platforms and content producers who are not. If that was the principal reason behind the government’s thinking, however, the simple and obvious solution would be to solve the asymmetry by deregulating traditional broadcasters rather than trying to regulate Netflix or YouTube. 

The government’s fiercest critics have argued that the real motivation is to regulate the internet. According to this line of argument, it’s less about the technocratic modernization of pre-internet regulation for the digital world and more about an appetite for censorship of ideas and voices that don’t conform to the government’s own ill-defined conception of satisfactory Canadian content. 

I’ve been reluctant to take that leap throughout the process. My commentary has tended to focus on resolving the real yet solvable challenge of a two-tier broadcasting policy which is a legitimate public policy problem. But as we get closer to the finish line, the government’s dogmatism cannot help but make one a bit suspicious that there’s more going on here than merely achieving equal treatment between CTV and YouTube or Rogers and Netflix. 

The government’s mixed messages on user-generated content—including its opposition to a narrowly-designed Senate amendment on the subject—have particularly fed this perception. As University of Ottawa law professor Michael Geist recently wrote: “In doing so, he [Rodriguez] has left no doubt about the government’s true intent with Bill C-11: retain power and flexibility to regulate user content.”

Yet some have speculated that neither explanation is at the heart of the government’s obstinance. What’s instead driving the minister and the government is run-of-the-mill pandering and an overfocus on the policy preferences of Quebec’s arts and cultural community for straightforward political reasons. 

That may be plausible but even if it’s true, it still reflects the more general problem with the government’s thinking on the subject: it underestimates the ability of Canadian content producers to compete and succeed in an increasingly global market.  

As I’ve previously written for The Hub, the nearly 25-year-old experiment with a mostly unregulated internet was a powerful case study in this regard. It has overwhelmingly proven that so much of the defensive and parochial thinking that underpins the CanCon regime is unjustified. Our content creators don’t need mandates or quotas to survive. They need the freedom to succeed (or fail) in a global marketplace in which their artistic and creative expression can reach global audiences. 

Why would we abandon such a tremendous opportunity? How is that good for Canadian content or its promotion to Canadians and the world? And in what world is the CRTC a better judge of what Canadian content is worthy of support than millions of individual consumers? 

I can usually empathize with government policymakers even when I disagree with their decisions. Bill C-11 is an exception. Whatever the Trudeau government’s motivation, it’s a case of bad policy that overestimates the role of government and underestimates the efficiency of a decentralized market. 

Yet it seems inevitable now that the government will ultimately get the legal authorities necessary to move in this ill-conceived direction. If there’s one silver lining, however, it’s likely that we’ll have a federal election before the new policy is fully implemented and firmly entrenched. There will be an opportunity therefore for a subsequent government to reverse it without much disruption. 

That’s precisely what Pierre Poilievre and the Conservatives should do. But it won’t be enough to merely repeal Bill C-11 which they manifestly should do. They should also bring an end to the CanCon regime more generally and revisit the mandate of the CRTC itself. 

A logical extension of ending CanCon in the internet age would be to put the CRTC’s own existence into doubt. It ought to be one of the first cases of Poilievre getting rid of gatekeepers and opening the gates. 

Tegan Hill: Premier Smith’s ‘new fiscal framework’ requires constitutional change to make it last 

Commentary

In its recent budget, Danielle Smith’s government in Alberta introduced a “new fiscal framework.” While it’s a positive step forward, the framework is based in statutory law, which means the current and future governments can easily ignore, change, or eliminate it at any time. Put simply, the new framework will only work so long as governments choose to follow it. 

Specifically, the new framework mandates balanced budgets (except when there’s an unexpected disaster or sharp decline in revenue including oil and gas revenue). It also limits annual increases in operating spending to the rate of population growth and inflation, and set rules for the use of future surpluses—at least 50 percent of any surplus must go towards paying off debt with the remaining deposited in a new “Alberta Fund” to be used to either pay down debt, save in the Heritage Fund or spend on one-time initiatives.  

In the past, the province has experimented with similar statutory rules intended to impose fiscal discipline on governments. The rules worked well during good times but unfortunately were easily discarded when times got tough, precisely the times the rules were intended to help manage. 

Consider the Heritage Fund, first introduced by the Lougheed government in 1976/77. Originally, the government was required to deposit 30 percent of resource revenue annually. If followed, this 30 percent rule would have helped governments spend more sustainably and avoid large deficits. But the rule was based in statutory law, which meant the provincial government (specifically, the Alberta legislature) could unilaterally change the rule.

And it did. Following an oil price collapse in 1982/83, the government reduced contributions to 15 percent. Following a second oil price collapse in 1986/87, the government ended mandated resource revenue contributions entirely. As a result, today all resource revenue is typically included in the budget and continues to create volatility in provincial finances.

The Alberta Sustainability Fund (ASF) was another attempt to use statutory rules to help Alberta’s finances. Established in 2003, the fund was meant to “stabilize” a specific amount of resource revenue for the budget, which would limit the amount of money available for spending while saving any excess resource revenue during the good times to be used when resource revenue fell below the stabilized amount. The logic was simple—save during good times to provide a stable level of resource revenue during bad times.

However, following the 2008 financial crisis, consecutive provincial governments disregarded the rule, drained the fund entirely to support the budget, and the ASF was officially eliminated in 2013.

Both the Heritage Fund and ASF started with well-intentioned rules and had the potential to help stabilize Alberta’s finances (just like the Smith government’s new fiscal framework). But in both cases, the fiscal rules didn’t last because they were statutory and therefore easy for governments to change.

To ensure fiscal rules are robust over time, they should be constitutional, which makes them much harder to bend or break. And contrary to popular opinion, it’s possible to change Canada’s Constitution for province-specific measures. First, the Alberta government must conduct a referendum in the province—in this case, asking Albertans if they agree to the terms of the new fiscal framework. If the majority of Albertans vote in favour of the proposal, the Alberta government then must pass provincial legislation to recognize the new rules and present this legislation to the federal House of Commons and Senate for recognition, resulting in a change pertaining to Alberta in the national Constitution.

After that, if a future Alberta government wanted to reverse the rule or ignore its requirements, it would need to reverse each step in this process. Specifically, it would have to seek public approval through another referendum, pass provincial legislation, then ask the federal government to approve similar legislation. That’s a lot of work to undo rules meant to spare Albertans from more deficits and government debt.  

To truly secure long-term fiscal stability, Alberta needs more robust fiscal rules. By making fiscal rules constitutional, they can’t be easily ignored, disregarded, or eliminated in the future.