CRTC Hearings: Unifor Accuses Apple, Netflix, and Amazon of Destroying Canadian News

We are continuing our coverage of the CRTC hearings. Unifor is yet another lobbyist offering unhinged takes on the internet.

Our coverage of the CRTC hearings is continuing. The CRTC is conducting these hearings as it looks to implement the disastrous Online Streaming Act.

We’ve already gotten a lot of themes from these hearings. For instance, many online streamers are asking for a contribution system that recognizes the contributions the platforms are already making in Canadian society. This includes Spotify, Paramount, Netflix, Amazon, and Apple. A similar take came from Google/YouTube which also asked for a system that doesn’t harm the digital environment.

Another theme came from lobbyists that have pushed for these laws. They rejected the streamers comments, claiming that the millions in investments and jobs that ensued don’t contribute to Canada in any way. So, instead, these lobbyists are saying that all those investment dollars should go directly to them. Some have suggested taxing the streamers up to an additional 25% of their annual revenues and giving those millions of dollars directly to them instead. Lobbyists pushing that narrative include Bell, Rogers, Corus and Shaftesbury.

Digital First Canada, an organization that represents online Canadian creators, also made an appearance. They generally argued that the implementation of the Online Streaming Act shouldn’t harm Canadian creators. After all, Canadian creators have decided to go it alone and make all the risks of becoming a creator in the first place. Some of them ended up being quite successful online without the aid of the government. As a result, it wouldn’t be fair to have a set of regulations that actively undermined those creators.

ACTRA also made an appearance and continued on with the themes of trying to stick up streamers and demand that they give them all their money. The lobbying organization, though, went further and rejected the notion that Canadian creators are being successful and, instead, hurled insults at Canadian creators by calling their work “cat videos”. The organization went even further and called for a more dictatorial approach to culture where creators would effectively be disqualified from being considered “Canadian” unless those creators pay license fees to organizations such as them. They also demanded that the government also dictate how promotional material is made for various works, calling for that material to be legally required to showcase their members contributions up front among other things. They also demanded that the CRTC order platforms to change their discovery algorithms to showcase their content, overriding consumer choice in the process. To say that these calls are unhinged would be an understatement.

If you thought they were the only ones offering completely unhinged takes on how the internet works, well, apparently you would be mistaken. Unifor also made an appearance before the CRTC. A transcript of what was said can be found on the CRTC website. The lobbying organization came out swinging in the hearing, claiming that Apple, Netflix, and Amazon is killing Canadian journalism:

8971 What do Netflix, Apple and Amazon have to do with the news? This is the question that we need to answer here today.

8972 In 1999 and 2009 when the CRTC decided to exempt foreign digital streamers from Canada’s tightly regulated broadcasting system, they effectively upended a decades‑old business model for Canadian broadcasters. The effects of those decisions have caused severe harm to the production of Canadian News, and especially local news.

What is kind of interesting in the comments is the fact that Apple made an appearance just before these comments. During their appearance, they pointed out that they have a program for Canadian journalism where 100% of the royalties goes towards the journalism outlets. So, apparently, a 100% royalty rate is killing journalism. I’m sure that would be news to Apple to say the least.

Another aspect to these comments is the fact that Netflix and Amazon don’t create newscasts. As a result, they aren’t exactly competing with Canadian news – especially local news. Yet, according to the crazy land of Unifor, none of this logic and reason matters because news is in decline and it is somehow all the fault of Apple, Amazon, and Netflix… somehow.

Even worse, this was only the beginning of these off the rail remarks from Unifor. They went on to say this:

8973 We can’t go back to 2009, but we can ensure that we address the shortfalls that the Broadcasting Act was supposed to protect.

8974 In effect, Netflix, Amazon and the other foreign streamers have been getting a free pass in Canada, allowed to broadcast in this country without contributing to the system, as Canadian broadcasters have had to. And that must end now.

What “free pass” is Unifor talking about? Who knows? This is Unifor we are talking about, not a source of logic and reason. Obviously, the streamers have been presenting the many different ways they are contributing to the system. Whether it is providing a platform to showcase Canadian content, the numerous investments they made to producing content, the jobs that were created as a result of the production of content, and even the licensing of American content to Canadian broadcasters on top of it all (which Bell has long been flipping their lid over. Really, the question for the organization is, what the heck else do you want that’s reasonable?

Unifor went on to hilariously cite the CBC job losses as a reason for government action:

8978 Yesterday’s announcement that the CBC will axe 600 jobs keeps adding to the pile of lost locally relevant programming for Canadians.

8979 Week in, week out, we brace ourselves for more job loss and programming cuts from Canadian broadcasters.

As you know, the CBC became one of the biggest recipient of the financial windfall of the Online News Act. At one point, it was estimated that they were set to receive $33 million. On the back of that news, they then proceeded to axe those jobs after getting that comparatively massive payday (compared to what many others would have gotten at least which is more often then not, nothing). The government, faced with controversy over handing a third of Google’s loot over to the heavily subsidized CBC, then cut that loot to $7 million. Still not a small chunk of change to say the least. Yet, despite this, Unifor seems to unreasonably think that this is all somehow all the fault of the streamers. Again, logic and reason has long since left the building for Unifor.

Unifor then went on to say that they want a completely separate fund set up to directly receive money from the ransom payments made by streamers:

8982 Therefore, Unifor recommends that the Commission establish a local news media fund attached to the Online Streaming Act, similar to the former Local Programming Improvement Fund (LPIF).

8983 Like BDUs, qualifying foreign streaming companies would be required to contribute a portion of their revenue generated in Canada to a fund that would, in turn, be distributed to qualifying news organizations in Canada. Under the current system, domestic legacy TV distributors must contribute at least 5 percent of their broadcast revenues to Canadian content creation and production.

So, it sounds like they are wanting this fund established over top of the other funds being set up here and, hilariously, over top of the funds being received through the Online News Act via Google. So, essentially, Google/YouTube would be forced to pay Canadian news organizations twice as a result of this.

The question is, how much is Unifor expecting to come out of the streamers ransom payments? As it turns out, it is much more reasonable than the up to 25% of annual revenue another suggested. Instead, they think a 7% tax rate would be better:

8985 Unifor, on the other hand, thinks the Commission should make the whole pie bigger. Therefore, we recommend that the Commission should increase contribution levels from 5 to 7 percent. The additional 2 percent should go directly to the proposed local news media fund. Under this proposal, the ILNF could then be carefully merged with this proposed news fund.

8986 In addition, Unifor recommends that the Commission should maintain current Canadian programming expenditure (CPE) requirements and extend this obligation to online undertakings.

While this is a bit more reasonable, that’s still prone to a number of streamers rolling their eyes, saying that the Canadian market just isn’t worth it, pulling up their stakes, and leaving the country. After all, online streaming isn’t exactly the cash cow some lobbyists seem to think it is. As we reported late last year, streaming services competing against Netflix lost $5 billion over the course of a year. To make matters worse, cord cutting for American cable companies is continuing to skyrocket at a record breaking pace, meaning the revenues are burning at both ends. If you are slapping a 7% additional tax rate on some of these streaming services, chances are, the urge to leave the country goes up a lot. So, it’s kind of amusing in a way that Unifor is expecting to rake in huge sums of money from sources like this.

Unifor then ended their rant by doubling down on the conspiracy theory that Netflix, Amazon, and Apple are totally at fault for the decline in Canadian news:

8989 Everyone knows that local broadcasters producing local news are in crisis, and only when we increase the pie can we then start to repair the damage that has been created over the last 15 years. We are behind and we need to catch up.

8990 Foreign streamers’ entry into the Canadian broadcasting system has created a crisis in local programming and local news. It’s time for them to pay their fair share and it should be the cost of doing business in Canada.

8991 So, what do Netflix, Apple and Amazon have to do with the news? The answer is everything.

You really can’t make this up. It would go without saying that if those streaming services leave Canada entirely, it would cause significantly more damage to the Canadian economy. After all, the 100% royalty rate offered by Apple to news organizations would go up in smoke overnight if they stopped offering such services in Canada.

Now, there was an interesting exchange that requires a fair bit of context. This happened in the question and answer period which shows this:

8993 THE CHAIRPERSON: Thank you very much to Unifor for your participation in the proceeding, for being here with us this morning to kick off day 12. We hear you on the importance of local news and you’ve heard from us our focus on ensuring that there is support for news.

8994 I have some questions about the proposal for the new fund and so maybe we can unpack that a little bit. You’ve said the ILNF is not sufficient and I’m wondering, could you talk a little bit about how the proposal for the new fund, how would the new fund truly differ from the existing fund?

8995 MR. KITT: The existing ILNF? Well, I believe the ILNF is about $20 million and it’s just not sufficient. If Global were to be folded into that fund, I think you’ll hear from the independent stations that they will not be able to maintain the level of funding for those stations. Global is just too big.

If you are looking at this exchange and giving a confused dog look, well, it would be understandable. A lot of context was left out here. Why would Global News be rolled into a fund like this? Well, this all comes back to the Rogers Shaw merger from last year. The two vertically integrated conglomerates got their rubberstamp to merge. This under the laughable promise of more jobs, more investments, and savings for consumers. To the surprise of no one paying attention, all of those promises have been broken. Rogers has already jacked up consumer rates for cell phones earlier this year. This was over top of the hacking and slashing going on behind the scenes.

Well, Global News is owned by Shaw, the company that got bought out by Rogers. After the deal completed, Rogers immediately looked into trying to financially support their own offerings while drawing money away from Shaw owned properties. One such property was Global News. As we reported at the time, Global News was seeing their funding getting redirected to CityNews (which is owned by Rogers). Ironically, it was Corus that filed a complaint over this at the time (Corus has long lobbied for the Online News Act and Online Streaming Act). So, the reason why there is this talk of rolling Global News into this fund is because of the Rogers Shaw merger.

Either way, the issues with Global News has less to do with streamers and more to do with Rogers looking to cut costs and eliminate what corporate speak refers to as “redundancies”. Unifor likely doesn’t want to talk about the real reason behind these developments. Instead, they are much more content with blaming streaming services for the situation even though they had nothing to do with the fallout of the merger in the first place. They want to tell a story no matter how far fetched it really is.

Unifor, in another exchange, went on to double down again on blaming the streamers for their poor fortunes and even suggested that Netflix should never have been allowed into Canada in the first place:

9005 THE CHAIRPERSON: Thank you for that.

9006 We have heard intervenors over the past couple of weeks say that it’s not fair that they would be asked to contribute to a fund, a news fund when they don’t produce news and local content. I’m just wondering if you could respond to that.

9007 MR. KITT: Well, of course. I think that’s our whole thesis here, is that the Canadian broadcasting system used to be a closed system that only Canadian broadcasters could be a part of, and those big American companies would have to license their programming to Canadian companies and that’s how those Canadian companies funded local news.

9008 In 2009 when the CRTC made the decision to exempt those foreign streamers, that was the beginning of the end for broadcast television in Canada and local news in Canada, and the funding model disappeared.

9009 Just like in my statement, we say that we can’t close the barn doors. We can’t just say Netflix can’t broadcast in Canada anymore, but they can help pay towards the Canadian system, and that includes local news, and it is the cost of business to be here in Canada.

Uh, Unifor? Seriously, it’s things like this that make people not like you.

At any rate, if there was any thinking that I was exaggerating when I saw that these legacy lobbying organizations want to return to the bad old days where there was a monopoly on the audiences, that should put those doubts to bed. Lobbying organizations hate the internet and all the good that came from it. While they admit that they can’t put that genie back in the bottle, they darn well try to get a system in place that at least gets close to this. It’s a case of “free speech for me, but not for thee” and they are upset that people outside of their closed system, even Canadians, now have a voice. They want to be the arbiters of what Canadians can see or hear. The fact that the internet can override that system is something that will eternally anger them.

Drew Wilson on Twitter: @icecube85 and Facebook.