Bill C-11 was passed on April 27, marking the first major overhaul of the Broadcast Act since 1991. The Online Streaming Act, or Bill C-11, has made a long journey from its origins to its acceptance as law.

SOCAN (the Society of Composers, Authors & Music Publishers of Canada) and the Canadian Media Producers Association promote it. Music NL, representing musicians from Newfoundland and Labrador, encouraged its members to write their MPs in support of it, as did the Coalition for the Diversity of Cultural Expression..

And, a long list of cultural organizations, including SOCAN, are warning about its broad potential for unexpected consequences. SOCAN issued a statement when C-11 was reintroduced in February 2022.

“The existing Broadcasting Act was designed before the Internet was a music delivery platform, and modernization is desperately needed,” said Jennifer Brown, SOCAN CEO. “Reforming the Broadcasting Act is a necessary step to strengthening Canadian songwriters and composers’ place within Canada and supporting Canadian music in a digital world.”

So, just what is Bill C-11, and what does it mean for the music business? It’s…complicated.

The Issues

The CRTC governs old media broadcasters like TV and radio, and requires a specific level of Canadian content. It means that media companies are required to support and invest in Canadian industries. Broadcasters are required to spend 30% of their revenues producing Canadian content. For example, the FACTOR fund that supports many Canadian musicians is made up of contributions from Canadian radio and TV broadcasters.

In the recent shift from traditional broadcasters to streaming, however, it’s Spotify’s and other’s algorithms that are largely determining what music we listen to.

Many of the bill’s detractors say it takes away choice. However, what is choice in the streaming era?

What goes into the algorithms developed by streaming platforms such as Spotify? There is no transparency about the process. According to figures gathered by the Coalition for Diversity of Cultural Expression:

64% of content recommended by YouTube already has >1 million views;
Major labels such as Universal, Sony, and Warner provide about 90% of the tracks recommended in playlists on Spotify.

There are also many documented stories about various ways that the playlists can be gamed and corrupted.

Where does it leave independent musicians, and local content?

Canadian music creators earn 34% of royalties paid by traditional media; in contrast, they only earn about 10% of all digital media royalties generated in Canada;
When it comes to French-speaking musicians, the share of royalties from digital media plummets to 2%.

The payout schemes on streaming platforms are notoriously low to begin with. It’s estimated that it takes about 30 million streams to earn back what it costs to record, produce and market an album.

Ian Scott, chair of the CRTC, made a statement regarding Bill C-11.

“The CRTC’s objective is to ensure that Canadians are made aware of Canadian content and that they can find it. It is not about manipulating algorithms,” he told a Senate committee in November 2022, as quoted by the CBC.

The Objections

The AFM (American Federation of Musicians) issued a statement on behalf of a number of organizations proposing a long list of amendments to the then-proposed legislation, just before the final debates.

Stephen Waddell, ACTRA’s National Executive Director is quoted on behalf of the coalition. “We are deeply disappointed that none of our recommendations have been taken into account by the House of Commons. C-11 is now heading to the Senate where we hope Senators will pay more attention to our concerns.”

“The common concerns we put forward resulted from an unprecedented joint effort on the part of the cultural sector to concretely help Parliamentarians avoid unwanted consequences of the Bill,” added Greg Nordal, President and CEO of Nelson Education Ltd. “While it is good for some Canadian cultural industries, Bill C-11 creates an extraordinary number of exemptions which will materially damage the livelihood of our artists, creators and producers. We are now turning to the Senate to correct the most egregious aspects of the Bill.”

Their main issues:

Exemptions for educational purposes under fair dealing rules that are defined in vague terms;
The educational market is a significant one for the Canadian cultural sector.

Nordal comments, “Unless it is amended in a way that addresses its current ambiguities, this bill will greatly reduce incentives for investment in the creation of educational materials for all Canadian students.”

Other exceptions include a new kind of exception that allows users to reproduce works if it is deemed to be a part of a “technological process”;
The rules do not include digital audio recorders;
The coalition objects to the idea of exemptions to user-generated content even for non-commercial purposes.

In contrast, the Senate went to bat to protect the rights of users to generate non-commercial content.

“In addition to reducing the existing revenues of rights holders, the proposed measures will restrict creators’ access to new markets and their participation in the digital economy”, said ACTRA’s Stephen Waddell.

The press release was signed by SOCAN, Access Copyright, The Canadian Copyright Licensing Agency, ACTRA, Canadian Artists’ Representation / Front des artistes canadiens (CARFAC), Canadian Federation of Musicians (CFM) / Fédération canadienne des musiciens (FMC), Canadian Music Centre (CMC), and more than 60 other organizations representing music, the publishing, cultural, and broadcast industries.

The Quebec National Assembly also criticized the bill and its lack of recognition for the province’s own laws regulating culture.

Bill C-11: What Does It Do?

What’s not really in debate is the notion that the Broadcast Act needed some kind of update. The last time it was amended was in 1991, before the Internet and its unforeseen explosion of content.

Essentially, Bill C-11 adds to the existing legislation that governs TV and radio broadcasts, among other things. It creates a category of broadcasting it calls “online undertakings”.

The Broadcasting Act specifies requirements for online undertakings, including social media;
Broadcasters who violate the Act may be subject to financial penalties.

Before C-11, online broadcasters were under no obligation to stream any Canadian content. In essence, Bill C-11 looks to put streaming and other Internet platforms on the same footing, with the same kind of obligations towards Canadian content, and under the same governing umbrella: the CRTC.

Along with the Internet, the federal government was concerned with ensuring protections for diversity in programming, accessibility, and Indigenous culture and languages.

The bill does theoretically open up the possibility that individual users of social media would be considered “broadcasters” who then are obligated to follow guidelines. There is no precedent for that concern, however.

The Fractious Path To Law

By the time the federal Liberals re-introduced the bill, after the 2021 campaign and election, it had gone from Bill C-10 to C-11, and through 11 different iterations.

Video streaming giant YouTube took notice of the then-proposed legislation in early 2023, and bought ads in the Toronto subway system raising issues about the bill. Tiktok creators, and even Margaret Atwood joined the anti-C-11 debate.

A total of 73 amendments were proposed, 26 of which made it to the Senate’s final set of modifications. The bill was subject to heated last minute debate in the legislature, including late nights in the Senate and House. While the Conservatives made a last-ditch attempt to nix the bill in its entirety, the Bloc Quebecois and NDP came around to siding with the Liberal-led legislation.

The Senate was attempting to insist on a last list of 26 amendments, with a strong focus on protecting the rights of user-generated content of the non-commercial variety. Some of those amendments were agreed to in the House, but others were not. What the Liberal-backed compromise did include were provisions that ensure promotion and reflection of diversity, which includes Indigenous languages, as well as privacy protections.

Late on April 27, rather than continue the arguments for another day or more, the Senate agreed the compromise. Specifically, however, the Senate insisted on making one stipulation:

“That the Senate take note of the Government of Canada’s public assurance that Bill C-11 will not apply to user‑generated digital content and its commitment to issue policy direction to the Canadian Radio-television and Telecommunications Commission accordingly; and

That a message be sent to the House of Commons to acquaint that house accordingly.”

What will all this mean?

Will your cat videos be regulated? Probably not.

So far, all the arguments boil down to conjecture. Bill C-11 is just the beginning of what will develop over the next few years. The CRTC will meet with stakeholders to come up with the framework of practical policies that will become how the powers granted by C-11 will be used in the real world.

At some point, there should be public consultations on how the bill should be implemented;
Under the current definitions, many online creators in Canada would not qualify as so-called CanCon;
First and foremost, the CRTC will have to define what “Canadian content” means under the new ruling.

The US. government, through a consulate spokesperson (as quoted by the CBC), has already expressed concerns that it could “impact digital streaming services and discriminate against US businesses”. Could lawsuits and trade sanctions be next?

And, the Conservative Party have promised to repeal Bill C-11 if they win the next federal election.

The debate may well point to issues well beyond the music industry in the contemporary era of global capitalism. Sen. Andrew Cardozo, member of the Progressive Senate Group, is quoted by CTV.

“It is also a textbook case because of the high political drama it has encountered, replete with many delay tactics and fundraising off the process,” said Cardozo. “But it is still an interesting case where we have seen a massive online campaign over the last few months. This is either an exception to the norm of constructive policy-making or, in fact, the ‘new normal’ that will eliminate constructive policy-making in favour of divisive, partisan and extra-parliamentary campaigns.”

The timeline for developing policy going forward remains unclear.