Canadian Government to Court: Bill C-11 Regulates User Generated Content

A court document submitted by the Canadian government finally admits that Bill C-11 regulates user generated content.

One of the lines used by former Heritage Minister, Pablo Rodriguez, was “platforms are in, users are out”. This line was one of the many lies used by the government to try and convince people that user generated content isn’t regulated under the Online Streaming Act (formerly Bill C-11). What has been clear at least since the early days of when this legislation was known as Bill C-10 (different versions of that bill went back and forth on this aspect) is that user generated content is, indeed, scoped into the legislation.

This is thanks to the text of the bill itself through Section 4.2 which states:

Regulations — programs to which this Act applies
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.
Matters
(2) In making regulations under subsection (1), the Commission shall consider the following matters:

(a) the extent to which a program, uploaded to an online undertaking that provides a social media service, directly or indirectly generates revenues;

(b) the fact that such a program has been broadcast, in whole or in part, by a broadcasting undertaking that

(i) is required to be carried on under a licence, or

(ii) is required to be registered with the Commission but does not provide a social media service; and

(c) the fact that such a program has been assigned a unique identifier under an international standards system.

Exclusion
(3) The regulations shall not prescribe a program

(a) in respect of which neither the user of a social media service who uploads the program nor the owner or licensee of copyright in the program receives revenues; or

(b) that consists only of visual images.

This plain language has largely been around since the tabling of this legislation and it made it clear that user generated content was, in fact, scoped into the legislation. Throughout the legislative process, you had this infuriating aspect of the debate where the government and lobbyists supporting this legislation both denying what the text of the bill actually does. People who point to the bill and dispute the claims that user generated content is not regulated were regularly gaslighted and told that they are wrong about their accurate readings of the bill. Some were even accused of being “shills for Big Tech” for accurately recounting what the bill actually does.

Those political attacks for the crimes of being accurate grew so heated that some MPs took it to the next level and began threatening the bills critics with politically motivated “investigations” on top of it all. It’s precisely this scenario that beautifully highlights why it takes bravery to speak truth to power – even in Canada.

In 2022, the efforts to deny that Bill C-11 regulates user generated content hit a brick wall when then CRTC Chair, Ian Scott, admitted that Bill C-11 regulates user generated content. That admission pretty much sealed the fate of those insisting that user generated content was out of the bill.

Senators, who were debating the bill at the time, were shook by the admission – specifically senators who were pushing this bill forward. Some senators at the time tried to downplay the admission by suggesting that the Chair unfortunately muddied the waters and he didn’t mean what he said. Yet, when suggested fixes were proposed to ensure that user generated content was well and truly scoped out of the legislation, those fixes were ultimately rejected by the government. The excuse was that if they scoped out user generated content, that would be some sort of “loophole” for platforms and it would enable those platforms to avoid “paying their fair share”.

The excuse never made any sense, but Canada’s tech policy at the government was well and truly heading into a post truth and post evidence era where politics can easily triumph over both to pass bad bills. That’s precisely what happened when Bill C-11 received royal assent. The passage signalled that truth and evidence were no match against the political machine when it comes to passing bad bills.

Luckily, the damaging affects of the Online Streaming Act haven’t necessarily been felt by creators and consumers. This thanks to delays in the implementation at the CRTC. While the battle over this legislation seems like a lost cause given how much the CRTC is the Canadian poster child of regulatory capture, the war is not necessarily over yet. Lawsuits (something I was predicting from the beginning) were always a possibility and challenging this law in court had, in my view, a higher chance of success because the court system relies more on evidence and the rule of law for its decision making processes.

Right on cue, as predicted by many including myself, a lawsuit did occur. Last month, Google filed a lawsuit against the CRTC over the fees being used to calculate what is owed. Google (rightfully) argues that revenue derived from user generated content should not be included in the amount it owes to the CRTC. The CRTC, however, argued that even revenue generated from user generated content should be calculated and sent to legacy media players. While Google remitted that money, they filed a lawsuit to dispute this, arguing that user generated content revenues should be excluded.

The lawsuit puts the Canadian government in a bind. They are before a court and they have to choose between letting those revenues go to maintain the lie that user generated content are scoped out of the bill or finally admit that the whole point of the legislation was to regulate user generated content. According to court documents, the government finally chose the latter and admitted that the whole purpose of the Online Streaming Act was to regulate user generated content. From Michael Geist:

In order to make the case that the advertising backing user uploaded content is caught by the law, Justice lawyers argue that user uploaded content itself is plainly covered by the legislation. Their filing states:

Contrary to the Applicant’s position, the Act does allow for the regulation of user-uploaded programs on social media services, so long as certain conditions are met. Subsection 4.1(2) states that, despite subsection 4.1(1), the Act applies in respect of a user-uploaded program if the program meets one of two preconditions. The first precondition is that the program is uploaded to the social media service by the provider of the service or the provider’s affiliate, or by the agent or mandatary of either of them. The second precondition is that the program meets the criteria set out in Section 4.2.

Section 4.2 is even broader. It allows the CRTC to prescribe user-uploaded programs on a social media service in multiple different situations. As long as the CRTC follows the parameters set out in this section, it can prescribe social media programs.

Critics and concerned voices, notably including many creators, were repeatedly disrespected, ignored, or told they were wrong when they pointed out what was readily apparent in the bill. Our politics is often dominated by debates about deceptive communication, frequently characterized as misinformation or disinformation. For my money, the government’s approach on Bill C-11 provides a paradigm example. Just ask the lawyers at the Ministry of Justice.

Just as a point of clarity here, there’s no wiggle room for saying that in the context of ad revenues, user generated content is scoped into the legislation, but in other instances, it’s out. The way the law is structured, it’s all or nothing. If user generated content is scoped into the law from an ads perspective, then it is scoped in for algorithmic manipulation and every other way as prescribed by the Act.

This is important because the status of user generated content goes straight to the heart of the constitutional nature of the legislation. Is all Canadian expression subject to the Broadcasting Act? The answer to that should be “no”, but this legislation attempts to make that answer a “yes”. That, in and of itself, dooms the legislation when it comes to the question of whether or not the legislation is constitutional or not.

The Broadcasting Act was intended to manage a very narrow set of options when it comes to broadcasting. Yes, people have the right to freedom of expression, but when there is, say, only 12 channels available in a 24 hour period, how does the country manage that? How does the country deal with that limitation and ensure that Canadian expression is visible in that limited space – especially in light of the cultural influence coming from the United States. Those are among the things that the Broadcasting Act attempts to address.

The internet, however, contains no such constraints. Content is more on demand. People can create their own online streams on various platforms. People can pick and choose from a theoretical unlimited number of sources. One form of content doesn’t necessarily bump another form of content from the “airwaves” as all are available. As such, the Broadcasting Act doesn’t need to apply. There’s no risk of a foreign culture overtaking the airwaves when any Canadian can produce their own content and have it readily available to a global audience. Consumers can freely pick and choose what they want to consume.

Combine that with the fact that Canadian’s producing content will invariably also be subject to government mandated downranking. Contrary to popular belief, being a Canadian producing content is nowhere near sufficient to being classified as “Canadian content”. As I pointed out earlier, a vast majority of those producing content like YouTube or Twitch video’s don’t qualify to be classified as “Cancon”. Separately, the Canada Media Fund (CMF) set out ruled to qualify for funding that are so stringent, almost no one would qualify in the first place. As a result, only those gaming the system who are already part of the cultural elite could possibly qualify – and the quality of that content would be anything but desirable to most audiences.

This sets up a major constitutional problem. If Canadian’s are being downranked, then their freedom of expression is being curbed. That is simply unconstitutional as the Canadian Charter explicitly states the following:

2 Everyone has the following fundamental freedoms:

(a) freedom of conscience and religion;

(b) freedom of thought, belief, opinion and expression, including freedom of the press and other media of communication;

(c) freedom of peaceful assembly; and

(d) freedom of association.

(emphasis mine)

The Online Streaming Act plainly violates this. If the government is taking money from those creating content, that stifles their ability to freely express themselves. If the government is downranking any Canadian voice through algorithmic manipulation, that plainly violates Canadian freedom of expression. In this case, the Act clearly does both. As a result, there is a strong case to rule this Act (specifically Section 4.2) as a violation of the Charter, rendering it unconstitutional.

The significance of the government legal filing here is that this marks the first time that the Canadian government formally admits that the whole point of the Online Streaming Act is to regulate user generated content. When the chips are down and they are before a judge, the truth comes out.

While there is still the possibility that the Online Streaming Act can cause a lot of damage moving forward, the extent of that damage might be limited to whenever this law gets struck down in court. Sure, there is a possibility that the courts could go in a really bizarre direction and do a whole bunch of moral and legal gymnastics to conclude that this doesn’t violate the Charter, but the chances of that, in my opinion, are pretty small as far as a final decision is concerned. I think it would surprise a lot of experts if this law survives a court challenge and a fundamental first step to getting this law struck was ultimately taken by the government itself. Kind of ironic in a way.

Drew Wilson on Mastodon, Twitter and Facebook.