C-11 will “hang over the system until Supreme Court has spoken” over jurisdiction: Palmer

A former senior general counsel at the Department of Justice has told members of parliament studying the Online Streaming Act that the bill “lacks a foundation in Canadian constitutional law” because internet streaming services do not transmit to the public by radio waves nor do they operate telecommunications facilities that cross provincial boundaries. Internet and telecommunications lawyer Philip Palmer, who was also involved in the drafting of the Broadcasting Act in 1991, appeared before the House of Commons’ standing committee on Canadian Heritage Tuesday, as committee members studied Bill C-11. Palmer said that Netflix Inc., as an example, is no more of a "federal undertaking" than a law firm or a chain store such as Canadian Tire – both of which rely extensively on telecommunication services. Internet streaming services "are the clients of telecommunications common carriers who are subject to federal regulation,” he said. Palmer said there is nothing that makes C-11 more constitutionally acceptable than its predecessor bill, C-10, which died on the Senate floor when the 2021 federal election was called. “The uncertainty that this is going to lead to is that it will hang over the system until the Supreme Court has spoken. And the question is, really: who is going to, then, challenge federal jurisdiction over broadcasting?” Palmer said he can't predict who that will be. He did note that “it's likely to be some Canadian domestic player” but not one of the large Canadian players. Palmer said the application of the Broadcasting Act to online streaming services is beyond federal power and unconstitutional because a 1932 decision by the Judicial Committee of the Privy Council – known as the Radio Reference – determined that broadcasting fell within federal jurisdiction. “In order to be regulated by the federal government, the undertaking – as the Constitution uses the word – has to be one that itself has facilities to exceed provincial limitations or boundaries.” Palmer said there are also successor cases which held that the federal jurisdiction over cable undertakings rested on the fact that the undertakings received waves which came over interprovincial boundaries. Université de Montréal professor Pierre Trudel told MPs that if it was unconstitutional to apply the act to online services it is only because it would become a question of provincial jurisdiction. “There are arguments that say that the airwaves are not the only federal jurisdiction, but there's also the issue of national interest. There is also the interprovincial nature of the activity. So all of these arguments would have to be debated before the Supreme Court. So, either the federal government has jurisdiction or the provinces. So sooner or later, we can expect that the Canadian government, either the feds or the provinces, will intervene,” he said, according to translation. Chairman of the Internet Society's Canada Chapter – and former CRTC commissioner – Timothy Denton also said that an organization is not made to be federally regulated because it uses federally regulated services. Denton and Palmer also argued that the bill is unnecessary because there is no scarcity over the internet. “As the carrying capacity of cable increased over the years, the scarcity argument for broadcasting regulation weakened. It was our belief back in the late 80s, early 90s, that in a 500 channel universe comprehensive broadcasting regulation would no longer be necessary. We now live in the internet age. The internet is not limited to 500 channels. It has virtually unlimited capacity to permit every form of communication,” Palmer said. According to Palmer, Canadians operate 160,000 channels on Alphabet Inc.’s YouTube alone. “It is both counterintuitive, and frankly shocking, to witness not the dismemberment of the broadcasting regulation, but its extension to the whole of the internet,” he said. Denton said the current Broadcasting Act lays out hundreds to millions of dollars worth of fines for broadcasting without a licence, which Bill C-11 maintains in its entirety, and questioned why the government would impose those restrictions on online streamers. “By contrast, think about writing, speaking or printing. You do not need a government licence to pick up the phone and talk, nor to write an email. The regulation of speech takes place after one has spoken, not before,” he said. “Indeed, by the expansionist logic of C-11, the government might just as well define email and talking on the phone as broadcasting. The C-11 could be better retitled from ‘Online Streaming’ to ‘an act for the regulation of communications across the internet.’ It would be a more honest and accurate title,” he said. Palmer added that the bill aims to protect existing industry but it has “no justification” in terms of protecting broader public interests. “The mere fact that some internet services compete with traditional broadcasters is not a justification to extend federal regulation over internet services. Looked at historically, successful forms of delivering popular culture have had their moment in the sun,” he said. Palmer and Denton said that C-11 should be focused on ensuring the web giants financially contribute to Canadian programming rather than regulating them. “There is a fatal ambiguity at work in C-11. It is spoken about as if it were an act to modernize broadcasting law. If that were so, then the act could work by subsidizing Canadian TV productions out of streaming revenues,” Denton said. Bill C-11 is not only being debated in committee. Monday, the topic of whether end-users are covered by the legislation came up in Question Period. During Monday's Question Period, Conservative Heritage critic John Nater went after Heritage Minister Pablo Rodriguez. He quoted Morghan Fortier who maintained that one provision of the bill gives the CRTC jurisdiction over end-user content. “This is the creator of Canada's most-watched YouTube channel. It is someone we should be celebrating and not holding back. Will the minister make the very simple commitment to remove section 4.2 from Bill C-11,” the Ontario MP asked. Rodriguez responded that the committee has heard from the cultural sector that the bill is “fundamental.” “This is what we are hearing day after day. Our musicians, producers and creators all need it. This is what we put forward. It has the support of a lot of people across the country.” Nater argued that the Liberals claimed user-generated content will not be included in the bill yet CRTC chair Ian Scott told the Heritage committee that there was a provision which would allow the commission to regulate user-generated content, but that the authority also exists in the current Broadcasting Act. “I have to admit that the Conservatives are very creative, because they invent a lot of stuff,” the minister responded. “Bill C-11 is only about online streamers, those companies, so that they contribute to the Canadian culture. It is very simple. Platforms are in and users are out. That is it.” Nater’s colleague Rachael Thomas continued the questioning, reiterating Nater’s points about the two contradictory statements. “I am quite surprised that the Conservatives quote the CRTC, because they keep attacking the CRTC like they keep attacking the CBC,” Rodriguez said. “The thing is that this is simply to ask streamers to contribute to our culture. That is it.” – Reporting by Jenna Cocullo at jcocullo@thewirereport.ca, files from Paul Park at ppark@thewirereport.ca, and editing by Michael Lee-Murphy at mleemurpy@thewirereport.ca.

C-11 will “hang over the system until Supreme Court has spoken” over jurisdiction: Palmer

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C-11 will “hang over the system until Supreme Court has spoken” over jurisdiction: Palmer

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