SINT Committee Meeting

SUB-COMMITTEE ON INTERNATIONAL TRADE, TRADE DISPUTES AND INVESTMENT OF THE STANDING COMMITTEE ON FOREIGN AFFAIRS AND INTERNATIONAL TRADE

SOUS-COMITÉ DU COMMERCE, DES DIFFÉRENDS COMMERCIAUX ET DES INVESTISSEMENTS INTERNATIONAUX DU COMITÉ PERMANENT DES AFFAIRES ÉTRANGÈRES ET DU COMMERCE INTERNATIONAL

EVIDENCE

[Recorded by Electronic Apparatus]

Thursday, November 20, 1997

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[English]

The Chairman (Mr. Bob Speller (Haldimand—Norfolk—Brant, Lib.)): Colleagues, today we're at meeting seven in the study of the MAI, the Multilateral Agreement on Investment.

This committee is the trade subcommittee, which is looking into this matter at the request of the Minister for International Trade. Today we're going to look at the whole area of culture.

To start off, from 3.15 p.m. to 5 p.m. we've invited three guests from the Canadian Conference of the Arts, Keith Kelly, the national director; Ivan Bernier from Laval University; and from the Nordicity Group, Peter Lyman, who is on the cultural SAGIT.

Welcome. I guess you've been told we expect about a ten-minute presentation and then we'll do a round of questions and comments from members.

I have Mr. Kelly first.

Mr. Keith Kelly (National Director, Canadian Conference of the Arts): Thank you, Mr. Chair.

On behalf of the president and board of governors of the Canadian Conference of the Arts I would like to thank you and the members of the subcommittee for this opportunity to share some of our views with you on the Multilateral Agreement on Investment.

The CCA and its members have become increasingly concerned with the treatment of culture in multilateral trade agreements. In recent months we have seen our domestic magazine industry policy invalidated by the WTO, continuing threats by PolyGram Filmed Entertainment to seek a WTO appeal by the European Union against our domestic film distribution policy, threats of a challenge by the United States against Bill C-32, the recent revisions to the Copyright Act, and more immediately, the larger questions that are raised by the negotiation of the Multilateral Agreement on Investment.

These developments have led our organization to undertake a major review of trade policy and the potential impact of international trading agreements on the sustenance and viability of government policy instruments in the arts and cultural industries. Our board decided that if we were to be involved in this discussion our position should be as informed as possible.

Our initial research into Canadian trade policy was most enlightening. We learned that Canada has been an enthusiastic proponent of a world trading system free of barriers since 1944. Every elected government since that time has reaffirmed this position. It has led Canadian officials to actively engage in processes associated with the first GATT, subsequent rounds on non-tariff barriers to trade, the development of regional agreements such as FTA and NAFTA and our recent involvement in APEC and MAI negotiations.

Canada as a nation has accrued significant economic benefits from its participation in these international trade agreements. It is important to note from the outset that the CCA is not fundamentally opposed to the objectives of a freer world trading system. However, we do take issue with the apparently open-ended assumption that the compromises we make in the areas of political and cultural sovereignty are reasonable trade-offs for the promise of economic benefits that we anticipate Canadians will enjoy as a result of these agreements. There appears to be little indication of where Canadians, as a society, draw the line in the trade-off of sovereignty for wealth.

For the CCA the nub of our concern is the degree to which these compromises we have already made or are prepared to make undermine our political and cultural sovereignty and to what extent potential agreements such as the MAI will affect our capacity to preserve those fundamental values and institutions that give shape and substance to the Canadian experience. It is our view that there needs to be a national discussion about this issue and these hearings are an important and welcome step in that process.

In order to address the question for the arts and cultural industries the board of the CCA created a working group on cultural policy for the 21st century. The working group comprises individuals from across Canada involved in the arts and cultural industries. While the energies of the working group are focused on a wide range of cultural policy issues the working group appreciates the extensive impact that international trade agreements have on cultural policy.

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In order to support their deliberations on this dimension of their work, two studies were commissioned. One was an assessment of the potential impact of the MAI on cultural policies, by Garry Neil, a private consultant with considerable experience in international trade issues; and another was on the treatment of copyright and intellectual property in international trade agreements, by Leslie Ellen Harris, an internationally respected lawyer on copyright and intellectual property law. It is my pleasure to provide copies of those two studies to the committee today.

A few weeks ago, as part of this preoccupation of the CCA with trade issues, our board and some members of the working group met with Canada's chief negotiator for the MAI, Bill Dymond, to discuss the treatment of cultural issues in this proposed agreement. Mr. Dymond had an opportunity to review Mr. Neil's paper, and took exception to only one sentence in the analysis. That was where Mr. Neil reflected that Canada has been relatively silent in the negotiations on the treatment of culture. He agreed substantially with all the other conclusions Mr. Neil reached.

In our discussion, we told him what we were looking for in terms of the treatment of culture in the MAI. He led off that discussion by saying that the negotiating position of Canada was to seek an exemption for culture in the MAI. We also insisted that the exemption be self-defining by each signatory state, and that it not include the retaliatory provisions contained within the NAFTA-FTA agreements. Mr. Dymond acknowledged that these were considerations that have informed the Canadian position on the treatment of culture within the MAI. I must say, based on what Mr. Dymond says, we certainly agree with that position.

In his paper, Garry Neil, working from a May 15 negotiating text of the MAI, draws some chilling conclusions about the potentially devastating effect the MAI would have on some of our most important cultural policies and institutions. To quote Mr. Neil, “Potentially, the MAI could affect in some way virtually every cultural policy, agency and measure that Canada has implemented”.

It is also important to note that the disciplines contained within the Multilateral Agreement on Investment would apply to subordinate orders of government, putting at potential risk many of the provincial and municipal programs developed to support and sustain cultural activities and industries.

So while the focus of Mr. Neil's study was largely on the federal level, it's important to bear in mind the impact on the so-called subordinate orders of government as we think about his comments.

In his study, Mr. Neil identified three areas of concern, the first of which is restrictions on foreign ownership. Canada currently prohibits, limits or restricts foreign ownership in most of the cultural industries. These policies include limitations on foreign ownership of a Canadian broadcaster or distribution undertaking—cable, satellite and others. Similar limitations prevail in the telecommunications area. He also notes that policies in the book trade, film distribution, and sound recording, as well as the net benefit test for foreign companies acquiring Canadian cultural enterprises, would also run counter to the May 15 version of the Multilateral Agreement on Investment.

The second area is funding programs limited to Canadian individuals and firms. Mr. Neil argues that most of the funding programs, such as Telefilm and the Canada Council, as well as provincial bodies involved in the financing of the arts and cultural industries, could be jeopardized by the national treatment provisions of the MAI. Currently these programs provide assistance only to Canadians.

He also expresses concern about the tax incentives for investment in Canadian film and television production; the Cultural Industries Development Fund of the Federal Business Development Bank; policies of the CRTC that have mandated the creation of private-sector production; and talent development funds in both television and sound recording sectors. Since non-profit entities are also included in the definition of “investor” within the MAI, agencies such as the Canada Council and programs of the Department of Canadian Heritage that fund non-profit arts organizations could be affected without an appropriate cultural exemption.

The third area is Canadian content requirements. For a television program to qualify as Canadian content, the producer and the principals must demonstrate sufficient Canadian participation to qualify. These restrictions would appear to breach the national treatment obligations contained in the MAI.

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Canadian content rules such as those in television and radio are an important underpinning of the music and audio-visual production industries. The loss of these instruments would have a devastating effect on the vitality of the Canadian production sector.

Also at risk are the restrictions on Canadian ownership of broadcasters, which would significantly erode the entire policy framework around the broadcasting industry, and also our provincial education policies, which favour the use of Canadian-produced educational materials.

Also identified were instruments such as co-production treaties in films, new measures for the development of new media, immigration policies that restrict the flow of foreign performers and other cultural workers into Canada to work on foreign-financed film, television and performing arts productions.

There are also provisions in the May 15 text that would require signatory states to offer government agencies or functions that they are privatizing to investors from within the MAI community. If Canada had signed the May 15 MAI text and Mr. Harris of Ontario decided to privatize TVO, he could not restrict bidders to be residents of Ontario or of Canada, but would have to open it to any signatory state within the MAI community.

Now, I know there are members of this committee who do not share the apprehensions of the CCA and the cultural sector about the potential dismantling of the Canadian cultural policy framework. We have often heard that Canadian artists and producers should be unafraid of competition and welcome the chance to take a crack at an aggressive pursuit of the opportunities in the world market.

But let us be perfectly clear. This can only be achieved with a strong domestic base for creation and production of artistic and cultural works. The policies that are at risk in the MAI have given us this strong domestic base and are largely responsible for the development of the world-class talent that has come to define Canadian culture.

It is also imperative that we understand that these policies were never intended to keep foreign materials out of Canada. Canadians have come to enjoy the freest access possible to the cultural offerings of other countries in the world. However, we also have the right to speak to each other, to give voice and shape to a host of reflections of the Canadian experience.

Our geographic proximity to the largest mass-entertainment producer on the planet requires that we take special efforts to create and maintain a space for the development and expression of the Canadian imagination. If we trade away our ability to celebrate and reflect the Canadian experience to our fellow citizens through the work of our artists and producers, how much will we and the world lose as a result?

The CCA requests that this committee include in its recommendations that the Canadian negotiating position on the MAI affirm that without an absolute cultural exemption without retaliatory provisions, Canada will not be a party to this agreement. This is a political decision, and not one our negotiators are free to take on their own. For the generations of Canadians who have enjoyed and supported the work of our artists and cultural workers, and those yet to come, we can really accept nothing less.

Thank you.

The Chairman: Thank you, Mr. Kelly. Mr. Bernier.

[Translation]

Mr. Ivan Bernier (Professor, Université Laval): Thank you, Mr. Chairman. I would also like to thank the subcommittee for inviting me to appear before it. I am speaking today as a law professor. I became interested in the relationship between international trade and national culture early in 1986, when we began negotiating free trade with the United States. Since that time, I have realized that the subject has become one we can no longer avoid. So, I have been working on this issue since that time.

Today I would like to give you some background, briefly, on the role of culture in negotiations on investment. Second, I would like to see what has been done about culture in other agreements on investment, and third, I will be giving you my own views as to what Canada should do in light of my personal experience.

First of all, with respect to the overall context of this issue, I think it is important to remember that the debate about the role of culture is not limited to investment. It is a debate that comes up in other trade agreements as well.

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That was true of NAFTA, the FTA and also GATT. The GATT contains a clause that specifically makes an exception for film, for screen quotas.

That was true as well, in a much more difficult and bitter way, of the negotiations on services during the Uruguay Round. We came out of the negotiations on services with a compromise that was not really a compromise—namely there was no cultural exemption clause, and all certain countries such as Canada or the European Union could do was refuse to make any commitments in the cultural or audiovisual sectors regarding the European Union.

We have to keep this in perspective, because what Canada does on investment will have an impact as well on what is done more broadly in other sectors. In other words, we cannot take a position on an issue such as investment as it relates to culture, without this having an impact on other sectors. I am thinking in particular of the negotiations on services that will take place around the year 2000.

Just to give you an idea of how important this can be, in the case of subsidies for audiovisual and cultural services, in its commitments under the General Agreement on Trade in Services, the United States made an exception for something that is quite well known there, the National Endowment for the Arts.

The reason they made an exception for the National Endowment for the Arts is that they thought or wanted people to think that subsidies of this type provided to the arts sector in general, without an exemption, would be incompatible with the General Agreement on Trade in Services.

This is quite far-reaching. If we look at this, it means that in the upcoming rounds of negotiations, the United States could ask that all those that did not make an exception for the arts granting organizations could be found in violation of the General Agreement on Trade in Services.

So we have to see the links between this discussion and other negotiations, such as those on services.

As regards the discussions or the agreements on investment more specifically, we must acknowledge that at the moment there is no multilateral agreement that applies to what is now called the investment sector. Negotiations are underway at the OECD, an agreement on a very specific aspect of investment was entered into during the Uruguay Round, NAFTA has certain measures on investment, and another thing that should mentioned—and I will explain why—are the bilateral agreements signed by Canada and a number of foreign countries. These agreements include cultural exemption clauses.

My purpose in quickly reviewing these agreements is simply to give you some idea of the current situation regarding cultural concerns in investment agreements.

In the NAFTA, there is a cultural exemption clause which was supposed to protect all cultural sectors. In many respects, it has not produced the desired results, but, in the area of investment, we have to acknowledge that it does provide some protection, but only for existing measures that were protected specifically because the Canada-US Free Trade Agreement referred to these existing measures. Thus, there is some protection in the case of measures that run counter to NAFTA or the FTA, but there is really no protection for all the other issues and any issues that come up later. Canada would be open to measures with equivalent commercial effect being taken against it.

In other sectors—and I will come back to the OECD in a minute—, concerning bilateral agreements, I just wanted to mention that for several years now Canada has been negotiating such agreements and they always contain the same cultural exemption clause.

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It is a standard clause in all agreements and simply states that cultural undertakings are not subject to the investment agreements in question.

There is a definition of cultural undertakings which is the same as the one in NAFTA. Thus there is absolute protection in that the cultural sector is completely removed from the scope of the bilateral agreements on investment, and there is no possibility of using measures with an equivalent commercial effect.

As you probably know, within the OECD, there is currently a French proposal on a cultural exemption clause. This proposal states that notwithstanding anything that may be included in the agreement, no provision shall be interpreted as preventing a contracting party from taking any measures whatsoever regarding investment, which, in the context of policies designed to preserve and promote linguistic and cultural diversity...

That is the French proposal on investment and it is supported by Canada and other countries as well. I think that seven or eight countries are supporting this cultural exemption proposal at the moment.

As to the chances of success of such a cultural exemption clause, I think we have to acknowledge that the fact that the US has clearly announced its intention to oppose such a cultural exemption clause makes the French proposal problematical. It could mean, to all intents and purposes, that if a country makes the cultural exemption clause an essential part of an agreement, there will be other solutions apart from withdrawing from the agreement.

However, there are other possibilities, or one other possibility, which is being considered. I think we have to be clear about this. I'm referring to the possibility of reservations being made regarding culture in the agreement on investment.

In practical terms, all countries have now stated what they wanted included in the agreement regarding reservations, and it is possible that a country could ask that existing measures, which are incompatible with the agreement, be protected by reservations. If a country wanted to go further, and that may be what Canada is considering, it could ask for a reservation for the cultural sector and for all existing and future measures.

If that was the case, there would be a measure that would protect investment in the cultural sector, not through a cultural exemption clause, but rather through reservations. This would be somewhat similar to Annex II of NAFTA, which contains reservations for various sectors. In the current context, that would seem like the most plausible route.

That said, Canada's position remains to be seen. Will it opt for a reservation, if a cultural exception is impossible? Otherwise, it will either have to withdraw from the agreement or accept the reservations.

I will close quickly by telling you what I think about the negotiations on the cultural exemption in the agreement on investment. I think we need to be firm in the negotiations. It is essential that we see these negotiations as just that, and that we realize that there is nothing forcing Canada to abandon all types of protection immediately once the agreement is signed.

The United States and other countries are careful to protect themselves and to exempt certain sectors. The United States, for example, constantly exempts areas such as marine transportation, coastal trading and so on. The fact that countries want absolute access to investment in the cultural sector in Canada does not mean that we have to give in to these demands.

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Rather, I think that we have to conclude, when we look at the situation, that there are grounds for concern about what may be done regarding control measures or American measures. If you look at what is happening in the case of the Helms-Burton Act, you find that the US is using not a cultural reservation, but an exemption such as national security, to have a say about investment. Thus, why would we not be entitled to insist on a measure to protect culture, to the extent that we think it is essential for us?

I come now to my second point. I think it is also essential to say that a position such as this does not prevent Canada from studying its policy on foreign cultural investment in order to determine its merits and relevance. Just because Canada adopts a firm position in the negotiations on culture in the agreement on investment does not mean that we cannot ask ourselves some questions about what we should be doing.

A study by the C.D. Howe Institute shows that there is not an obvious link between the country of origin of a distributor of cultural products and the national content of those products. Personally, I disagree, and I think other data could refute this finding. However, what this does show is that there is a way out, a way of finding studies that can be used as the basis of a strong, clear and logical Canadian position.

Without any substantial, well-done studies on the impact on culture of international agreements such as the agreement on investment, I don't think we can get very far. I also think that these studies could show that there may be some ways of changing practices currently used to protect Canadian cultural industries.

The Polygram affair, which was just mentioned, raises an important issue in this regard. This is a measure that is supposed to protect Canadian film distributors, and which at the same time prevents foreign film distributors from coming into Canada with more non-American and non-Canadian films that would promote greater diversity.

In this context, I think it was difficult to do anything but enforce the Act in its present form. What I mean is that it is advisable to have a more flexible, well-informed attitude about exactly what our objectives are when we introduce measures to protect culture.

Finally, with respect to Canada's position on the cultural exemption, I think we should continue to thoroughly explore the cultural exemption clause option. However, if necessary and in the interest of Canada, we should also see whether, rather than a cultural exemption clause, it might be advisable to include some reservation clauses protecting not only existing measures, but also measures on culture for the present and the future.

[English]

The Chairman: Merci. Mr. Lyman.

Mr. Peter Lyman (Cultural Interests Representative, Cultural Industries SAGIT): Thank you, Mr. Chairman.

A brief word of introduction. I'm the senior partner of Nordicity Group Limited, a consulting firm specializing in the communications and cultural industries. I'm not here in that capacity or in the capacity to serve any of our particular clients. I'm here in my other capacity, as a member of the Cultural Industries SAGIT. In fact, I'm here to replace the chair of SAGIT, Ken Stein, who was unable to make it here.

Since it might be of interest to you, I'd like to give you a brief description of the role of the SAGIT. I think it's important that you get an idea of what kind of advice goes into government and how it's done.

It's a tradition of some 10 years. Appointments are made by the Minister of Trade. It consists of the cultural sector, cultural industries across the board, across the country. Its general purpose is to advise the minister, and therefore the advice is confidential. The advice is really given in reaction to a range of issues that seem to crop up on this file, even more so in terms of my two and a half years at the SAGIT. The issues seem to be getting more complex and more frequent.

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We really are in basically a reactive mode, although sometimes we take the trouble to write out some of our commentary for the minister.

On a major trade issue such as the MAI and its impact, I think the SAGIT is just one input. I stress that because it's not really structured to have the articulated views of the specific elements of the cultural community.

People like Keith obviously would be in a better position there, but it is a useful device, a sounding board, every two or three months.

With respect to the MAI, the SAGIT's general reaction, when first getting the presentations by Mr. Dymond and DFAIT, was that it would be very serious if it were agreed to without some type of cultural protections or safeguards.

Now, Keith has cited the excellent study by Garry Neil. I won't repeat it, but I will say that we've read it, and we agree with the items put in there as to possible consequences. It would gut the CRTC and many of its regulations fostering Canadian content. It would probably jeopardize a lot of the support programs that cultural industries depend on. It would really obviate any potential review by Investment Canada on foreign investment in the country.

It would in fact be subject to the roll-back provision in the future, even if we did try to take some reservations. That's one of the problems of that particular method, although I think we can have some discussion on that.

Now, it was our opinion, hearing this information, that it was maybe not entirely likely that all nations would go for a common accord that does not have any cultural industry consideration. But whether or not it's going to occur, we wanted to treat it quite seriously, and we have taken it quite seriously. In fact, next week we're going to be sitting around and having that as our main agenda item.

Having given that basic introduction of SAGIT and how we're dealing with that, I'd like to offer some personal observations—again, not really representing anybody, but just for the purpose of discussion.

The first is that I think the MAI has to be looked at in a broader context. We as a country are going to have to confront cultural trade negotiations in other fora, in any case. Of course, we first got into them, really, and broadly speaking, in the FTA and NAFTA. We achieved a carve-out, and everybody knows exactly how that's worked. At least, people have different impressions of how that's worked, but we know the particulars of that area.

Coming from the other sources of international trading negotiations, we'll have the continued global ones from the GATT process, particularly the upcoming one on the audio-visual sector, which not only touches the film and production community but also gets right into the heart of broadcasting and potentially the Internet as well.

So that's a global one. There are regional ones. Next week we'll have the APEC meeting in Vancouver. That's one region. There's NAFTA itself, the accessions to NAFTA. Then there are the bilateral ones. Mexico and the U.S. have done a bilateral negotiation, touching culture very much in the DBS and satellite area. That's another one where we have our own issues to deal with, of course, with the U.S.

So it is a subject—and I guess I'd echo Keith in this respect—that has become more central on the agenda of the cultural industries.

The second point is that when Canada negotiates an international agreement, in effect it dictates our domestic policy. Of course, we have domestic policy, and we should make sure that negotiators try to defend that and seek to secure it, but whatever the result is, we pretty much have to live with it.

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So it starts to bend back at domestic policy, as Professor Don McRae of the University of Ottawa pointed out in a recent local meeting. It has now come to the point with dispute settlement mechanisms that trade decisions are real, they're not something we can kind of put into the court of The Hague and get around or not live up to. They're more serious as, of course, we've seen in the case of the magazine industry.

That is recognized actually in the SAGIT, because the Department of Canadian Heritage, although it's dealing with a trade matter, is much more present in discussions at the most senior levels, and Industry Canada has come to be present as well. You can see that the fusion of domestic and foreign is taking place in that respect.

Third, I want to get into the issue a little bit of the MAI itself, not so much as to the mechanisms by which we might protect ourselves. I think Ivan has touched on some of those particular terms in a more articulate way than I could. But I want to raise one issue that whatever you do in terms of securing it, in terms of an exclusion, if it is an exclusion as a general exclusion or you do it through a reservation, whether bound or unbound country-specific reservation, you have the problem of definition. One of the fields that I deal with a lot is broadcasting. The definition of broadcasting from our point of view is that it is very much a cultural industry, and from the U.S. point of view and the point of view of other countries it is very much a cultural industry as long as it is defined as “over the air”. Once you define it as broadcasting by satellite or by cable, the Americans say it becomes just another communication service, and a communication service is only subject to rules through basic telecommunications. It becomes an enhanced telecommunications service and therefore doesn't fit under any kind of cultural provision.

The big question, of course, going beyond even that—which is something you can understand—and can hurt us or can affect us now, is in the future with the Internet. What I'm talking about here is not so much the e-mail Internet, but let's say the content-intensive Internet. What's going to happen there? First of all, we haven't as a country settled on the way we're going to deal with the Internet from a regulatory or policy point of view. Is it even going to be broadcasting? There is a good argument for it to be broadcasting, according to the act that we have, but there are other people who will take another position.

That is also subject to another one of these trade processes with the Americans and, under the aegis of the magazine report, have initiated a world-wide consultative process in trying to have a free trade zone on the Internet. So they'll be pressing on that. If you back up from the Internet, if we all agree on that—whether we do or not is another question—it backs up into the cultural area.

Fourth, another key consideration is the value of trade and the investment from a Canadian perspective. Here I put on the hat of someone who says maybe five or ten years ago this was not a big deal in terms of Canada exporting or deriving revenue from cultural product abroad, but now you can't really say that any more. I'll give two or three examples.

Our firm has done some work for the Canadian Film and Television Production Association. We found that about $600 million a year comes into the companies that produce Canadian film and television products from foreign investment or licensing fees or simply payments for the licensing of Canadian product.

A second example is one where new media companies—that is, people who produce for CD-Roms, which is the main distribution vehicle for new media these days—will tell you that when they do projects they won't go ahead unless they get countries on three continents, to determine that there's a market there. They don't even think of doing it for a domestic market. For all intents and purposes they're into an international product.

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Third example—and these are scattered references, but they're just to give you an incidental view—you might have read in the business pages the last few days that again, CanWest Global's profits are up, partly because it gets tens of millions from its foreign investment in Australia and New Zealand. That comes back into Global, and from there it's regulated and some of it gets into the financing of Traders as a TV series or some other program. I'm not holding a brief war against Global, but you just get a sense that they're not indifferent to their lot from a foreign market point of view.

I just want to point out that Canadian culture and cultural producers have a stake in ensuring that we have access to foreign markets and access in some cases to foreign capital. We just have to bear that in mind as we go down that path.

The final point I'd like to make is that part of our strategy has to be to convince other countries of our approach. I guess at the moment we're backing the French—although we've just heard that maybe their position, if adopted, wouldn't entirely protect us—but we really have to take an educational leadership role in other countries.

I'll cite an example. I had the fortune of working in South Africa in the last month, and from their perspective, they look at it as either the U.S. model in broadcasting and cultural policy or the Commonwealth model. They don't necessarily think Canada is ahead or behind; they just know there's a different way of doing it that is more or less similar to the Australians and the British in some broad respects.

So the more we can proselytize our particular way of doing it, which can be done with our competitors in a lot of ways, the Australians and the British, that is another movement we could rally behind, besides the perennial French, who have a very strong interest in this area.

In conclusion, I'd come back to say that at SAGIT we're certainly wrestling with these issues, and we need, as Keith and Ivan said, a more informed debate. We need to be artful in achieving our cultural objectives in an interdependent world.

Thank you.

The Chairman: Thank you, Mr. Lyman.

We will now move into a period of questions and answers, and probably more questions. This will be a 10-minute period for each member. I would encourage the members of the panel, if they have a comment on the answers of the other panellists, to not be afraid to jump in.

I'm going to move first to Ms. Bulte, who has been summoned by the Governor General and as a result has to leave for a short period of time. I'll give her the first 10 minutes.

Ms. Sarmite Bulte (Parkdale—High Park, Lib.): Thank you, Mr. Chairman.

It's a great honour and privilege to have you all here today. I've read Mr. Neil's report on the MAI, and it is a very thorough report. I also understand from speaking to Mr. Dymond that this report was made before any kind of consultation with Mr. Dymond. Is that correct?

I'd like to address this question to all of you. We talked about an exemption. You told me that Mr. Dymond has said there will be an exemption. As we know, there is a general exception and there is a country-specific reservation. First and foremost, did Mr. Dymond indicate which way the government was going to negotiate? Secondly—and maybe Mr. Bernier could join in as well—do you see any legal difference in a country reservation that is unbound to a general exception?

Mr. Keith Kelly: If I understood correctly what Mr. Dymond said, he was talking more of a country-specific unbound reservation as the negotiating position for Canada than of a general carve-out. I think that's where we had the exchange about the characteristics we would be looking for, without committing on country-specific unbound or a general exception.

The principle of self-definition is something our board was very clear about: that each signatory state should have the uncontested ability to define in their terms what is important for culture and that there be no retaliatory provisions, as we find in FTA and NAFTA.

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Our work is continuing on this. Our working group will issue the report around December 15 and at that point we would certainly hope to have a better understanding of how the country-specific reservation works. But we really think the best approach is to seek an overall carve-out and try to persuade our colleagues in the OECD that this is a useful way to proceed.

[Translation]

Mr. Ivan Bernier: As I understand it, at the moment, Canada, while defending and supporting the French position, is considering the other option—that of having reservations.

Here we have to distinguish between the general exception clause and the reservations. The general exception clause has the advantage of not identifying any particular country. All countries are on an equal footing and everyone is entitled to the same exception, whereas a reservation names the particular country that is seeking to protect itself with a reservation. So, it is a more restrictive option in some ways.

However, when we talk about reservations, we must also distinguish between reservations on existing measures and reservations for a sector. This is absolutely crucial. If we are talking about existing measures, that is a way of confirming a measure that is non-compliant, but that has been allowed to stand. The term used in English is "to grandfather". That is one thing.

The other approach is to say that the whole sector is exempted, both for the past and the future. That is a different matter. It is a much broader type of reservation.

Obviously, everything depends on what happens in the discussions. I think that reservations on non-compliant existing measures have a very good chance of being accepted by almost everyone. I think that a more general reservation will certainly be debated heatedly, and if Canada is forced to drop its demand for a general exception, if it has to retreat, it should start thinking now about a convincing way of persuading as many OECD partners as possible about the necessity of having a general reservation for the sector.

I would like to take this opportunity to make one final point. We have to realize that it is very likely that the OECD negotiations on investment are just the beginning of another set of negotiations, namely the upcoming WTO rounds. That is where things are really going to happen. I think we must begin now to prepare not necessarily just for the OECD negotiations, but for the items that will be negotiated in the year 2000.

[English]

Ms. Sarmite Bulte: Mr. Bernier, could you go through the French exception with me, which I know is in Mr. Neil's paper? One of the things you also mentioned is the problem with definition, yet in the French general exception, culture is not defined. I am afraid that the way the French exemption is drafted it could be open to interpretation such that even the production of French widgets could be seen as uniquely cultural.

Do you have any recommendation as to how to perhaps perfect this exception? Do you have any ideas as to what we should do to define cultural industries?

My understanding from Mr. Dymond is that we have taken the definition from NAFTA from chapter 11 and are using that as the place where we start. Is there something we can do to help?

In addition, I understand that the Canadian government already has a convergence policy, which is the thing Mr. Lyman was speaking about. Is that true? Would that somehow protect us with an unbound country-specific reservation?

My last question, then, is with respect to WTO. One of the things that's certainly a concern is the WTO decision on the magazines. I understand that it dealt with a product that dealt with the trade barrier, and that went back to the 1947 GATT negotiations. However, somehow, while we thought we were protecting it under NAFTA, it came around as a trade barrier. As well, in one of your other papers was the fact that the postal subsidy was seen as an improper one.

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What has that decision taught us? What can we take to the table at the OECD to bring those concerns that you so eloquently raised in your paper on the WTO split trade decision?

[Translation]

Mr. Ivan Bernier: The issue involving magazines shows the relationship between the two approaches—one based on trading goods and the other based on trading services.

We can add another problem to that, namely the fact that the United States is getting around the cultural exemption clause in NAFTA, simply by turning to GATT.

By proceeding under GATT rather than NAFTA, it has been more or less confirmed that on issues that come under both GATT and NAFTA, the United States or other countries—well, the United or Mexico in the case of NAFTA—could simply rely on the GATT provisions. That left us out, because the GATT did not have to consider the cultural exemption contained in NAFTA. So that is one problem.

A second problem is the link between various agreements that are on an equal footing, such as the agreement on services and the GATT agreement. The main point made by the panel members on this was that there was no problem in having the two agreements considered equal. They said that a challenge could be made either under GATT or under the agreement on services. They said it didn't matter, that the country could use whichever agreement was more favourable to its case.

There is the possibility that the same thing could be done with the agreement on investment—namely that we might want protection in the agreement on services, but that we might not have it in the agreement on investment. At the moment, and I did not mention this before, a number of commitments have already been made regarding investment in the agreement on services, but they are in agreements on services. So there is a potential for conflict.

At some point, there will have to be a general exemption clause similar to the one here to indicate exactly what is covered, because, from our point of view, that is quite difficult to determine.

I will close with one other point. A general exemption clause may always create a problem because its scope is not defined. In other words, it could always happen that a clause would be used in some disguised way to protect cultural industries.

Article 20 of the GATT provides for some general exemptions. It states that none of the exemptions may be used as a disguised form of protection for trade in goods. I think that at the very least—and this is a suggestion I would like to make—if Canada is thinking seriously about a cultural exemption clause, and if we want to get as many countries as possible on side, we should perhaps suggest a clause that is both specific and more limited in some ways than the one we seek here. The idea is not to reduce Canada's ability to act, but rather to ensure that we do not go too far and have people saying that the clause makes no sense.

I remember a debate in which Japan was maintaining that rice had a cultural connotation. Clearly, once you get that far, there are problems.

The Chairman: There is hockey.

Mr. Ivan Bernier: Hockey is very Canadian as well.

[English]

The Chairman: Mr. Lyman, you want to respond.

Mr. Peter Lyman: My comment is simply that no matter how tightly we try to, I think it's going to be difficult to be precise in the definitions.

Referring to your other comment about the government's convergence policy, there, as far as I was concerned, it was a kind of a holding action. There were certain definitions, most precisely by the CRTC in its 1995 convergence policy, that tried to identify and sort out what was broadcasting and what was not broadcasting in terms of new media. It doesn't even consider that the last word. In the CRTC's vision document of things to come, they say that's an area they want to develop more precision on.

I think we should be as careful as possible in trying to rally people around a definition, and scope it out properly, but we have to be prepared for the day when, for all intents and purposes, it slides around us. Trade policy can only take us so far.

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Ms. Sarmite Bulte: But would the general country-specific reservation, which is unbound, cover the concerns you're worried about?

Mr. Keith Kelly: I think the short answer is that it depends on how it's written. If the language is as expansive as possible, it may....

I know that you'll be hearing one such proposal from SOCAN later this afternoon, which I think it would be fair to say is a work in progress, and other people, such as Merilyn Simonds from the Writers' Union, are also working on this issue.

One point of clarification. Within the May 15 text of the MAI, the dispute-resolution mechanisms are the final court of appeal. So if you go to the dispute-resolution process in the May 15 MAI and you lose, you have no other avenue of appeal. There's no court shopping allowed within the May 15 text of the MAI.

The Chairman: Mr. Penson.

Mr. Charlie Penson (Peace River, Ref.): I'd like to welcome the panel here today. I think your presentations have helped quite a bit to understand this issue better.

You will also understand, I think, that the MAI that's being negotiated has a lot of Canadian interests at stake, culture being one of them of course, and that our hearings here over a period of about a month have a lot of players coming, making different presentations, some of course wanting more protection—a Canadian investment group that invest outside our country roughly $170 billion that are looking for some protection.

In that context, when the minister was here he made the statement that Canada was going to ask for a broad exemption for culture. He also said that it would be a deal breaker if we didn't get it. That would be the type of thing that would break Canada's belonging to the MAI.

Mr. Kelly, in that context I also see that you're making a strong statement here in saying that the CCA request that the committee include in its recommendations that the Canadian position affirm that without an absolute cultural exemption, without retaliatory provisions, Canada would not be a party of the MAI.

Now, that seems to me to be a fairly strong statement, considering that there are a lot of other Canadian interests at stake here.

If that were the deal breaker—if Canada did not belong—I can't understand how you would be better served. Wouldn't Canada revert to the NAFTA chapter 11 policy on investment? That's basically where the most pressure on our cultural industries is coming from. You're going to end up with NAFTA cultural exemptions. Isn't that in fact what you're complaining about, that there's a retaliatory nature to it and that it's frozen in time, nothing new can be added? How is it going to serve your interests to walk away from the table if we don't get it?

Mr. Keith Kelly: First of all, with or without the MAI we will always have the NAFTA agreement and the disciplines contained in it, which is precisely the problem.

It's very important for us to say that, even if we get what we want in the MAI, it doesn't end our problems with the treatment of culture and trade. As Ivan said, there are very few markers in the WTO-GATT agreements. We don't know what will happen in terms of the development of any APEC agreements. So whether or not the MAI goes forward with or without a cultural exemption does not change the fact that the Americans have a very powerful weapon that we have handed them in NAFTA and FTA that will continue to plague us. So that's not the issue.

But there's a limit to how much they can plague us in NAFTA and FTA. In the MAI, without a cultural exemption.... Please understand that we're working from the May 15 negotiating text; I'm sure it has moved on from there. The very extensive provisions in the May 15 text, as Garry Neil has demonstrated and as other people have also commented, would mean a certain end to many of the cultural policies and institutions that we have developed in this country to serve Canadians.

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Should it be a deal breaker for the MAI? We think it should. We recognize that there are a lot of other interests that could benefit from it. But this is where we come back to the issue of an informed debate about the trade-off of political and cultural sovereignty for wealth from trade. And I don't think we've had that discussion in this country.

How far are Canadians willing to give away their institutions, their identity, their environmental protection, their social safety net and their education system in the interests of or for the promise of wealth being generated from multilateral trade agreements? That's the kind of debate we really need to have.

So without that debate, sure, we'll say it's a deal breaker. If we have a national debate and Canadians say wait a minute, we'll find another way to deal with these issues, but if the benefits outweigh the losses then perhaps we would look for another solution. But for the moment we have just as much right to say this is a deal breaker than do those people who say this agreement has to go forward at any cost, because there is no clear national consensus on this issue.

Mr. Charlie Penson: I understand that. But if we don't get an MAI, we still have, as you've just said, NAFTA. Isn't the United States where we're facing our biggest pressure in terms of our cultural...?

Mr. Keith Kelly: It's not the exclusive source of our pressure.

Mr. Charlie Penson: I'm asking you if it's the biggest source.

Mr. Keith Kelly: It's probably the major source, yes, but I think we're going to see that change as time goes on. Certainly the United States is a very important forum, but the WTO...now the Dutch firm, PolyGram Filmed Entertainment, is persuading the European Union to take us to the WTO on our domestic film distribution policy. So the Americans are not alone in looking askance at some of our cultural policies and trying to use the tools included in these international disciplines to bring us into line.

What we need to do is really look at...and there's no magic bullet. This is the thing I think we realize. There is no one, elegant solution to dealing with the treatment of sensitive issues like culture in international trade agreements. But we really do need to expend some energy. Our organization is doing it right now through the working group on cultural policy for the 21st century. These are issues that we're very much aware of and very much concerned with.

Mr. Charlie Penson: I'd like to explore one other area with you—protectionism, in this case cultural protection, if that's what we want. Isn't there a cost to that as well? There has to be some trade-off somewhere, it seems to me. If we want to have areas we don't allow competition in, or if we want to subsidize our industry or whatever, isn't there some danger there may be other countries that take action that may hurt our cultural industries, specifically entertainers?

I'm thinking in terms of what we saw happen in the business with the United States over visas. It was probably intended for Mexico more, but we were included and had to get an exemption to it. Isn't there some danger that if we stake out some territory and say “This is off limits” it may backfire, particularly with the United States, where they may say, “You need a work visa”? That may be hard for our entertainers to get for Hollywood or the movie industry, for Broadway or country and western entertainment in Nashville, or whatever. Isn't there some danger on that side of it?

Mr. Keith Kelly: That's why we're saying that the carve-out in the MAI should have no retaliatory provisions similar to the ones we find in NAFTA and the FTA.

Mr. Charlie Penson: But can we have it both ways?

Mr. Keith Kelly: I think we can. First of all, I would like to challenge the fundamental notion that this is protectionist. We have some measures that guarantee the existence of Canadian enterprises, but when 85% of the titles on Canadian news-stands are foreign, when 70% of English-language television is foreign, when 80% of records sales are foreign, if we are protectionist we are the most inept protectionists on earth. So let us be very plain about that. What we are protecting is a space within our own country where our artisan producers can generate material that's pertinent to Canadians.

• 1630

We have a service film industry in this country where television and film producers come from all over the world to take advantage of Canadian talent to produce films that have very little relevance to Canada, which they turn around and profit from, and we don't object to that. That's terrific.

Mr. Charlie Penson: But to get back to my question, and maybe I'd like to expand it, is there no danger here for our artists in looking beyond our borders, especially to the United States? I know you want to have a carve-out but if that's not achievable, is there not a danger here?

I'd like Mr. Lyman to respond.

Mr. Peter Lyman: We've been pretty successful operating under other countries' domestic policies, whether it's Australia or Europe, which have a lot more protections than in the U.S. So regularizing or harmonizing those rules under an investment regime, leaving aside the Americans for an instance, might prove somewhat beneficial. I don't think Keith would have an objection to that, particularly.

The problem is, what's the impact on the U.S.? My fear is if we signed an MAI and relied on the U.S. agreement, vis-à-vis U.S. and NAFTA and so on, American companies would say it was globalizing and could use their European arms. Let's say Rupert Murdoch wanted to buy all the broadcasting stations in Canada because he was operating from the European base. If he buys them up are the Americans going to sit around and say they can't get at them because we have a NAFTA? I think they'd be pretty keen to try to get around that too, so I'm not sure that premise would hold us back. That's one way of just trying to get Keith's point of view across.

I also think we have to look at how we have this carve-out or exemption process because we do operate in an interdependent world, as I've tried to say in one of my points. Irrespective of the other industries, I think even in this industry, through debate over the next year or two or whatever, we have to look at how we can essentially have some of the cake and eat it too. We just have to be smarter than the rest of the world.

One way of doing it is to be smarter in trying to sustain the intricate set of measures we have to strengthen indigenous culture. Another way is to try to make sure we benefit from expanding markets.

Stay tuned.

The Chairman: Thank you, Mr. Penson. Mr. Sauvageau.

[Translation]

Mr. Benoît Sauvageau (Repentigny, BQ): I would like to start by thanking our witnesses for their valuable assistance and the very relevant testimony they brought us. I would also like to tell them and the next group that the Bloc Québécois asked that witnesses be given more time, not just a meeting from 3 p.m. to 5 p.m. or so. Unfortunately, because of time constraints, our suggestion was turned down. I think we've had a very clear statement about the major concerns presented by culture in the MAI. We needed to give these witnesses a proper amount of time, and perhaps we should have heard from even more groups on this subject.

Your testimony is very important, because, as has been explained, culture is probably the deal-breaker in this agreement. When the Minister and the chief negotiator appeared before the committee, they both said that they were looking forward to hearing your proposal to improve the negotiators' position. So I think your presence here is very important.

I would also like to make particular mention of Mr. Bernier's presence here, because, as Mr. Penson mentioned earlier, we have been hearing from witnesses for a month, and to my great surprise, this is the first time we've had a witness from Quebec. A number had been invited, and we hope that several of them would come. You are the first. Welcome to the committee, I'm pleased that you are here.

If I may, I would like to start by asking four questions.

Earlier, all three of you spoke about Canada's support for the wording of the cultural exemption proposed by France.

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You also said that there were some problems with the wording of the proposal. If it were to be accepted in its present form, do you think that a court challenge might quickly follow, if there were a conflict, because of the vagueness of the wording of the definition?

Could the term "cultural diversity" lead to confusion, given that there are two cultural diversities in Canada? I would like to hear your explanation about the wording of the French proposal.

You touched on the next matter, but I would like confirmation. Do you think the Canadian negotiator has to get an overall cultural exemption you find satisfactory, and that otherwise Canada would not sign the MAI? Is that in fact what you said? I would like you to confirm that.

The next question is to Mr. Kelly, because in his presentation, he spoke about the proposal SOCAN would be presenting a little later. Would you recommend that the SOCAN proposal be put forward by the Canadian negotiators? Would this be a step in the right direction for the negotiators?

My final question is this: What impact will the MAI have on the ability of provincial governments to protect minority cultures, for example when provincial governments determine the language of work of a company? Could Quebec's Bill 101 be called into question if the MAI is signed without a cultural exemption clause? Thank you.

[English]

Mr. Keith Kelly: I'll start with the last one first. As we noted, the MAI imposes its disciplines on the subordinate orders of government. For example, in terms of investment, as foreign investors set up in Canada, according to the May 15 text, we cannot impose on them domestic content restrictions. We can't impose on them the obligation to buy supplies from Canada or to hire people from a specific area. I would expect—I'm sure Ivan will correct me if I'm wrong—that measures such as Bill 101 would be very difficult to sustain and impose on foreign investors as a result of the MAI.

You could probably still impose them on Canadians, but I don't think you would be able to impose them on foreigners.

[Translation]

Mr. Ivan Bernier: I may differ a little on that, because, during the NAFTA negotiations—yes, definitely during the NAFTA negotiations—it was asked whether the languages on product labels or language generally could be an obstacle that would have to be removed. The answer was no, to the extent that linguistic requirements are imposed both on domestic and foreign companies. In that case, national treatment would become the standard and they would be treated in the same way that Canadian or Quebec companies are treated. In any case, that is my view of what would happen in this regard.

Mr. Kelly, do you think that SOCAN's proposal would be a step in the right direction and that we should suggest that the negotiators...

[English]

Mr. Keith Kelly: It's a work in progress, I think I should say. We find it very interesting; we'd like some more time to look at it and to consult with our colleagues across the country to see if this really satisfies their needs. We have two versions of so far. One, written by Merilyn Simonds, is a layman's framework for an exception. Then we have the “legally competent” version, shall we say, that SOCAN has developed in legal language. But certainly it's a step forward.

• 1640

[Translation]

Mr. Benoît Sauvageau: Everyone is confirming here that if we do not have a cultural exemption clause in the MAI that we consider satisfactory, we should suggest that the Canadian negotiator refuse to sign the agreement.

[English]

Mr. Peter Lyman: I wouldn't be as quite as categoric, but then again, in negotiations you have to see what's on the table. If you do 95% of the job, it's probably better to have that than to kill the deal altogether. I don't think it will come to that. I think it's something in which other countries have just as strong an interest as we do, and we'll just work with some of those countries.

If it came down to sacrificing culture, everything, I'd say of course we should just drop it, but if it comes down to country-specific reservations, which take a particular form, maybe that will be as effective. I think it's too early to say.

[Translation]

Mr. Benoît Sauvageau: I see.

Mr. Ivan Bernier: I agree completely. It will probably come down to a matter of assessing the type and scope of the reservations authorized.

It could happen that there may be a reduction in Canada's requirements. That is, we would start with a very strong requirement and eventually accept something much less stringent on culture.

Mr. Benoît Sauvageau: Do I still have a little time, Mr. Chairman?

I come back to my first question about the wording of the French proposal. We spoke about the term "cultural diversity". Given the Canadian reality, can these terms be interpreted differently or in such a way as to lead to a challenge of this term "cultural diversity"?

Mr. Ivan Bernier: I think this expression is quite ambiguous at first glance. It is quite an attractive solution, because a change was made... The traditional argument for justifying cultural exemption clauses had to do with national culture or identity.

A change has occurred in Europe on this matter. I saw that when I attended some conferences in Europe on the issue of cultural exemption clauses. The change is in the direction of an argument made on cultural diversity.

By cultural diversity, what's meant from what I've understood is both the national presence and also foreign presences, and especially non-monopoly or the absence of monopoly in a cultural sector through well-identified production dominating overall. To a degree, that might justify positive steps favourable to bringing in foreign productions. I would certainly be in favour of that.

As for the cinema, our access to any other kind of cinema outside of Canadian or especially American films is absolutely remarkable. I don't understand how we ever got to that point.

The Chairman: Thank you.

Mr. Benoît Sauvageau: If you don't mind, this will be a conclusion and not a question. I am unfortunately going to have to leave at 5 p.m. but it's not because of a lack of interest. I have another obligation and I'm sorry. But there is a Bloc member to replace me. Thank you.

[English]

The Chairman: Before you leave, Mr. Sauvageau, I want to correct something you said. You said Mr. Bernier had the honour of being the first Quebecker who presented a brief before the committee, but Mr. Stinson from the pulp and paper group was the first Quebecker here.

Mr. Brison.

Mr. Scott Brison (Kings—Hants, PC): I too appreciate your participation here today. It does help provide another facet to this very complex issue.

I noted Mr. Lyman's comments relative to Canadian access to foreign markets and foreign capital for Canadian cultural participants and companies. Any type of exception or reservation is a double-edged sword and does limit opportunities for Canadian participants in international fora. That's something we have to consider very carefully. I would like you to expand on that a little further and let us know some of the risks of exceptions and reservations for Canadian participants. That's my first question.

• 1645

Secondly, one thing we have to consider as well is that trade is ultimately a democratization of markets and gives the consumer an ability to make a decision.

I enjoy The Globe and Mail but I wouldn't be without my Sunday New York Times. I like Maclean's because it gives me a Canadian perspective on some issues, but sometimes I find that The Economist gives a more accurate perspective on Canadian issues than Maclean's does. The Next City is an excellent Canadian publication. In fact, this week's issue credits Maude Barlow for having helped Conrad Black build his Canadian news empire.

I quote:

Barlow helped create Black's Canadian publishing empire in two ways. Taking foreigners out of the game meant eliminating virtually all potential buyers of Canadian newspapers, making it a buyer's market for any one Canadian with capital and newspaper ambitions.

That's one example of how, arguably, Luddite policies can expose us to risks far greater than foreign competition.

In any case, I would appreciate your perspective on the risks, first of all. Secondly, you did also mention the roll-back and sunset, the standstill. But there is also the roll-back or sunset process raised by the Western Governors Association that would apply to country-specific reservations. I would be very interested to see a proposed cultural exemption that would not prevent Canadian cultural interests.... I think we have some of the best cultural talent in the world and I would hate to think that in our haste to protect these people from the risks of international or foreign markets we are preventing them from participating in the opportunities of foreign markets.

These are some of the positions I posit, so shoot.

The Chairman: Mr. Lyman.

Mr. Keith Lyman: First, allow me to diverge by saying that I am glad you enjoy reading Maclean's, because as a veteran of Bill C-58 days I realize that it may be in part due to the Canadian policy that has enabled such magazines to exist. So you do have a choice between the New York Times, The Globe and Mail and Maclean's.

I think that's the general case, of course, for all sport mechanisms. It's not to prevent people from accessing other materials, but to have the best of Canada portrayed in Canadian situations.

Individually, of course, it can maybe lead to more hostile receptions at the border for individual Canadians who are going down there, but at the end of the day, if they're really good Hollywood will want them. Hollywood will bring them in, and they'll continue to act, perform and write and so on for the American entertainment industry. We're in a competitive environment where we have more opportunities to view and read and stuff. We must have enough critical mass in our production capacity to make ourselves heard above the din, because there are going to be more options.

In order to do that, we could pile everything into some of the public institutions, have them create the jewels and then have the jewels amongst all the rest. But I think a policy of having our cake and eating it too is that, yes, we can do that, we can take some public money and do that through instruments like the CBC and the NFB, etc., but we should also create the conditions where we could have more international pools of money going into Canadian productions, which will of course vary across the spectrum from what was called “purely industrial” to what is far more reflective of our indigenous culture.

That's the risk of having a wagon-circling exercise. I'm not saying that is at all what...the CCA is a recognized group representing cultural institutions, and it is very impressive that they have come out with this kind of treatment of a trade issue. They are of course being extremely cautious and are counselling Canada to manage this trade negotiation wisely, but at the end of the day, to protect and to strengthen our culture we need resources. Some of those resources are going to come from other countries.

• 1650

The danger is, if we blocked it in some way.... You know, what if the U.S. networks blocked Canadian content? We'd chip away at 50% of our licence fees for three-quarters of the product put out by some of the major Canadian production companies.

Now, obviously we'd want to avoid that, and I'm not saying that if you're somehow overly vigorous in one area you're going to have this rebound on you, but you're right; you do have to look at the other side of it.

Mr. Scott Brison: Any other feedback?

[Translation]

Mr. Ivan Bernier: Very briefly, I'd simply like to say that I think it's clear there's always a counterpoint and that we're more and more interested in exports also. We must consider that other dimension, that investment is also important, and that Canada, for a long time now, has been trying to attract foreign investment into the country. It's clear that we're not going to let go of that kind of strategy.

That said, I still think we should recognize that including a cultural clause in something like the MAI, whether it's a reservation or something more general, doesn't mean that Canada is about to become extremely protectionist or more protectionist than it is.

I think the real problem, as far as Canada is concerned, is to have the possibility of conducting its own examination on what the consequences and scope of its legislation may be rather than to have things imposed from the outside. Insofar as possible, we should try to preserve this freedom to criticize ourselves and what we are doing and to do some real self-criticism. I think there are things to look at. It's not true that everything is efficient and it's not true that we always succeed in doing what should be done for culture.

That said, I would like this to be done first and foremost in a Canadian context rather than have it imposed from the outside.

[English]

Mr. Scott Brison: I'm pleased there is an appreciation of the risks of...I don't like to use the term “protectionist measures”, but—

Mr. Keith Kelly: If you can use the word “Luddite”....

Mr. Scott Brison: I wasn't describing you, necessarily. I certainly would not say Luddite in terms of your position here today.

In terms of the risks with any type of measure that may prevent us from participating in international fora, I'm very concerned about these things. We're in an increasingly global market. Canada's participation or non-participation cannot necessarily stop that. We can contribute to the process. But one of the things that we try to instill in Canada is multiculturalism. We've had a strong multicultural policy. One of the benefits of less barriers to culture from around the world is that we actually expose Canadians, and young Canadians potentially, to culture from around the world. Thus, in some ways we might strengthen that without a direct government-involved policy. We may actually reduce some of the barriers at some point.

Mr. Keith Kelly: That's a comment that sounds good when you say it fast. The simple reality—

Mr. Scott Brison: I spoke slowly.

Mr. Keith Kelly: —is that Canadians already have a surfeit of cultural material from around the world at their disposal. When you turn on your television you can see that is now beginning to happen. Certainly, in our bookstores we're not keeping anything out.

I suppose what is at the very core is whether we can still speak to ourselves. Can we still preserve the capacity to show Canadians a reflection of the Canadian experience, the diversity of Canadian experience? It's not the same for all Canadians.

Mr. Scott Brison: I would be concerned if something we did here to ensure that we can speak to ourselves would prevent someone like a Michael Ondaatje from selling his books in the U.S., or from contributing to a book that led to the movie, The English Patient. Those are widely regarded, positively regarded, in the U.S. Tom Fitzgerald, from Halifax, did The Hanging Garden, which is now in the U.S. and doing very well.

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I recognize that part of the culture that produced these films was part of a plan by a government that wanted to protect culture.

Mr. Keith Kelly: No, project culture, not protect culture; project our own culture. I think that's an important distinction.

There is another thing I would like to say just about the globalization and new technology argument. So many people say the world is globalizing and with all these new technologies we're not going to be able to control them anyway, so why don't we just roll over? Frankly, that is a very defeatist way of looking at these things. If the world is shrinking and if these global powers are expanding and impinging not only on the lives of Canadians but on other countries in the world, isn't it time for us to think about using those forces positively?

What kinds of values do we as Canadians and do other people in the world want to see preserved in a globalized environment, instead of letting all of the decisions be made in the board rooms of companies located all around the world? We still have national rights and human rights in a globalized environment, but we pay scant attention to those considerations when we talk about the irresistible force of both the new technologies and globalization.

Mr. Scott Brison: Mr. Kelly, I would agree with you very clearly on one issue, and that is that I think something as wide-sweeping and as important as MAI deserves more public debate and discussion. My party, the PC Party, as you know, has been a long-time proponent of more liberalized trade, but we actually fought an election on that issue and took the issue directly to the Canadian people and allowed them to participate in a very significant way in the process. I think that is significantly different from the way in which this issue is being handled currently.

Thank you very much.

Mr. Peter Lyman: Your party, of course, is one that was behind some national cultural initiatives—

Mr. Scott Brison: Absolutely.

Mr. Peter Lyman: —so you have strong historical roots in that regard.

I'd also just make a point that it's a bit dangerous to be slippery about saying, well, if our stars are not going to get sold around the world, that's going to be the result of us having this kind of strong negotiating position. I don't think you can link those two dots that easily. There's not a causal relationship. You have to be much more specific and ask what the outcome would be if that didn't fit in the curve.

Just going back to the multicultural area, I would remind you that we, because of the particular policies we have, have created instruments in, let's say, television and radio that are far more sophisticated than the U.S. has in terms of multiculturalism or expression in third languages, apart from the whole issue of having two languages. Therefore it's not only the input from foreign countries that Canadians can see, but also Canadians in those language groups being able to talk to each other, because there's a lot of indigenous product in there.

So we don't want to have rules that prevent us from regulating and structuring the market so that those forces can emerge. We're not going to have that as a country. It just won't be a country any more.

The Chairman: Thank you, Mr. Lyman. We have to move on.

I'm sure Mr. Brison wasn't in any way suggesting that this committee was limiting the discussion on this topic.

Just to remind colleagues and members, we are seeing as many groups as we can here in Ottawa before we have to give a report. The purpose of that, as you know, Mr. Brison, is to report before January, when further negotiations and further discussions will be taking place at the OECD. We plan as a committee, though, to continue looking at this matter, in fact, until an agreement is signed, whether it be in April or May or whenever they decide to do it.

Mr. Scott Brison: What I was suggesting, Mr. Chairman, is that it's great to have this kind of discussion, but given the degree to which the Canadian people are engaged in this type of discussion, I'm concerned that, with the lack of information out there, the misinformation can frequently, frankly, destroy arguments for MAI as much as it can attack.... It can do as much to undermine your support for MAI if the wrong information or misinformation or alarmist information is out there.

• 1700

So I made the point that our party did have an election on a trade issue, and it went the right way that time.

The Chairman: As you know, in this business things can turn around very quickly.

I'll move now to one of our part-time actors on this committee, Mr. Reed, who's actually maybe a part-time politician, part-time actor.

Mr. Julian Reed (Halton, Lib.): I'm here because I was a bad actor.

I'll put some of Mr. Brison's concerns to rest, if I may. If culture is out of the agreement, then you can look at the existing situation as it is and the way Canada is competing at the present time. I think we've heard from this panel loudly and clearly that whether it turns out to be an absolute exemption, or a total carve-out, or an all-encompassing reservation, or whatever words you want to attach to it, the message is: Leave it out and be done with it.

By doing that, I don't see any inhibition for our writers and performers, and so on, to move on in the way they have so illustriously in other parts of the world. The performing arts are one of our big exports. We have a great Canadian population sitting in Los Angeles right at the present time, although maybe that's not altogether to our advantage.

The question of extraterritoriality, if I can use that $30 word, was brought up. This is one of the reasons Canada would like an MAI, if we can get 29 countries to sing out of the same hymn book, which may turn out to an impossibility.

Extraterritoriality has been affecting Canada for many years. We think of it in terms of Helms-Burton, but that imposition was make in a lesser way 40 years ago, where American foreign policy was imposed on American-owned companies in Canada.

I speak about that from personal experience, working in an industry that was sold to American interests, an industry that was doing business with Cuba and suddenly found that a bill of lading that was being processed in Chicago was noted, and here we are, contrary to American foreign policy, here in Canada. It is something that I found at the time quite annoying. I find the resentment is deeper now than it was at that time. One of the objectives or one of the hopes of the negotiations is to do something positive with the question of extraterritorial imposition, from one country to another.

Mr. Bernier, you raised the question. Did you raise it in the context of the arts?

[Translation]

Mr. Ivan Bernier: I raised it simply to demonstrate that the United States can invoke a clause like the national security clause because it is iron-clad. Ideally, if we had to, we could equate culture with national security and in that case, we would be completely safe. The United States can do this because everything is a national security issue as far as they are concerned. Clearly, we cannot make the same claim.

In any event, we can't do that kind of thing.

• 1705

That's somewhat of a problem. When we are involved in negotiations, we have to understand that otherworldliness and good intentions are not necessarily critical to what's going on. Each party closely defends its own interests and that's why I say that in the negotiation process, we have to maintain a firm position, because when it comes to issues of interest to them, the United States will also maintain extremely firm positions.

We can always try and staunchly defend our own positions. Clearly, when it comes to investment, if the United States continue to stress security, as I believe they will continue to do, this gives Canada further ammunition to defend its own position.

[English]

The Chairman: Ms. Lill.

Ms. Wendy Lill (Dartmouth, NDP): Thank you.

I appreciate the opportunity to speak today. I'm a member of the heritage committee. I felt it was important for me to come and listen to the people coming from the cultural areas to talk about the MAI.

It has been good to hear all the questions because it reminds me of a poem by a man named T.S. Eliot. He talks about a patient etherized upon a table. I think about the concept of culture and I think we have to work very, very hard these days to try even to think about what culture is. It has gone so far beyond us, in a sense. We are thinking about a competitive environment and critical mass of production capacity and we are losing sight of what we mean as culture.

I had a wonderful example of culture last night. I went to the Governor General's readings, the award readings, and I heard stories about such things as people panhandling in Vancouver, and a historical novel, which went on for many pages, about the geographical aspects of the sleeping giant, which is a land-form outside of Thunder Bay. I raise these because I have great doubts these would be of much interest to international markets and I think we have to try to keep in mind what it is we want to continue to hear in this country from these so-called Canadian artists.

I have questions of our panel as to the impact this deal is going to have, but first I would like to see if we could think about culture. I think of it as a very fragile thing, but also as a very fierce thing. It continues despite everything.

To continue on that issue of it being fragile, what happens to these stories we try to tell about our little communities? What happens to the plays that are written about native self-government on a reserve; these funky little Canadian stories that in fact continue to give us a sense of or being a bit different from Home Improvement, a sense that we in fact have a world that is different and that we can hang onto?

We have over a million cultural workers in this country. What is going to be the impact of this trade agreement on them? Let's talk about the economics of these people. What is going to happen to some of these people if we are not able to secure protection for the production of their very small but very powerful works?

These are fuzzy questions because art is not all about trade. It's about spiritual and fuzzy things.

We'll start with that.

The Chairman: Mr. Kelly.

Mr. Keith Kelly: The other day somebody asked if my concern about this was because I wanted us to keep our jobs. I'm not worried about the ability of Canadian artists to find employment and distinguish themselves in whatever environment we find ourselves in. Anyway, that's not what this is about. What this is about is the right of Canadians to reflect their own experience to each other. It's about the ability of Canadians to work with Canadians to do that.

• 1710

Will art survive MAI-expanded globalization? In one form it will, but no one will know it, because we will have lost control of those tools we use to support creation and creativity. We will be shut out of our distribution systems, which will be purchased by foreigners, and the decisions will be made elsewhere. We will be a curiosity, perhaps, in some of these distribution systems.

It's not going to be easy for Canadians to find themselves in this new universe, unless we actively take measures that allow a space for the Canadian imagination to be seen and appreciated and enriched by artists and by audiences. That is what's at risk.

The ingenuity, the talent can certainly be applied, as we know, as well in Los Angeles as in Toronto. But what are they doing? Are they extending the kind of view Canadians have of themselves, or are they perpetuating this inane, cookie-cutter television and film production we see in the United States?

The Chairman: Mr. Bernier.

[Translation]

Mr. Ivan Bernier: In a way, the problem is exactly the one you've raised which is: "What is this culture that we want to protect?". Even more specifically, I'd say that it's: "What is it we want to protect?" Is it everything, is it everything that has the tiniest cultural connotation or is it only some aspects? What values are we dealing with? What exactly is it that we really want to protect?

I think that, seen from that angle, the difficulty we have is that we can see that part of our culture involves cultural industries that can have objectives like exports, production, success, profit and so on.

At the same time, underlying all that, you have the specifically cultural dimension that we're having some trouble defining in this whole debate. I know what you're trying to say and I think that I totally agree, but in the context of this debate, how do we introduce, absolutely convincingly, something that can serve as a basis for clear policies, this idea of the culture that we really want to preserve, as opposed to something else, which would be the other dimension.

To my mind, the problem in this present debate is that we're looking at the cultural product from two angles, both its cultural angle and its industrial angle, at the same time. So somewhere we have to be able to draw a line and say: "How does this...?" My own view is that what's first and foremost in need of protection is a Canadian presence in the cultural sector, and in all areas of culture, because this presence is essential to any societal democratic debate.

But how to put these things clearly so that, on a policy level, you can say: "there is the bottom line, the buck stops there". That's why, for the time being, what I'm saying is that the cultural exception clause is necessary because we must be able to do our own thinking about those things without immediately being forced to dismantle everything.

[English]

Mr. Peter Lyman: Generally speaking, Canadian-owned producers—whether it's a publishing company, a music publisher, a broadcaster, whatever—in one way or another contribute a lot more to the development and nurturing of the cultural expressions that depend on them.

If you're a playwright, or if you're a writer, you need to eat. You need to have some backing other than the Canada Council. That is a way to do it; you can just have, again, that. But if you want to have any commercial revenue flowing back to the creators, then you have to have, as Keith says, a distribution system that can take them and showcase them in the various ways. When you speak of culture, it comes back to an economic support of that.

• 1715

I think if you get right down to it, if we had an unencumbered MAI with no exemptions and ten years from now the only record companies, publishing houses and broadcasters were in foreign hands, then there would be no places for these people to slip through and talk.

When you get to the foreign stuff, in terms of foreign exports, you're right, that's different. A lot of what we're saying here is to make sure that Canadians can talk to Canadians. It's just that as you get higher up in the stakes and it takes a large team, having a writer be able to spend more than a very minimum amount of time creating a dialogue, that requires sources of revenue from a variety of places.

I like to think that a Hanging Garden is easier to produce now because there are Canadian production companies with distribution arms that can get it sold in countries around the world and therefore have enough foreign revenue coming in so they can make their next one. In that way, we get something that's a more pure art form of a feature film of a Canadian story. That's where it counts, at that level.

But you're right, in most normal ways we're dealing with the domestic scene.

Ms. Wendy Lill: I'm going to go back to that patient who's arrived upon the table. I actually know quite a bit about The Hanging Garden. Very fortunately, that film got made, and miraculously, it got picked up. It was one out of a thousand films, one out of many good films, that got picked up, because it had a certain kind of aesthetic that would appeal globally. The Americans knew that. That's why it got picked up. So I think that's an important point to remember.

We have to keep in mind that we have to allow our own voices to be heard, even if other people aren't interested in hearing them. If they're not interested in hearing them, that doesn't mean we stop talking. I'm very fearful of this, that our voices will just become silent.

I'm quite concerned about deals. I know deals are made, and deals are made, and there are all sorts of things that will happen as we move along in this process. Do we have enough time for this? Have we set up enough of a process that will allow input from enough people on this? In the eleventh hour, what can derail these wonderful things we're talking about right now, that we're hoping to get in there to save our cultural space in this country? What's really going to happen here?

The Chairman: Mr. Bernier.

Prof. Ivan Bernier: I think time is running short.

The Chairman: We're a little bit over time here. Surgery has to be done very quickly, I think.

Ms. Wendy Lill: On the patient.

The Chairman: Mr. Bernier.

[Translation]

Mr. Ivan Bernier: The fact of the matter is that time is still flying and that the following negotiations are coming up, those of the year 2000 on services, for example, where, among other things, we'll probably be looking at something that is of capital importance to my mind, subsidies to all services including cultural services. What I was saying before about the National Endowment for the Arts isn't fiction; it's something that's there. So the problem does exist and there has to be a reaction.

I think that the process has really taken wing. Over the last six to eight months a lot of things have happened. I participated in many a meeting in Montreal, Ottawa and elsewhere on themes like that one. To some extent, people are going around in circles. We haven't yet managed to break away from the consideration that there is both an industrial dimension and also a cultural one. It's as though we can't manage to bridge those two dimensions and make them real.

I think that's mainly what we'll have to do to be able to say: "Here's what we really want for our cultural sector". There are a lot of demands and I'm not denying that all cultural sectors have been very vocal. Concerning the negotiations and all those discussions that are ongoing at the present time, I think there's something missing in the representations that we're going to have to define more clearly. There's also perhaps better understanding of what we're now really doing and that is also part of the debate. Are we correctly doing what we must be doing now? That concerns me.

• 1720

[English]

The Chairman: Thank you, Mr. Bernier.

Colleagues, we're really running behind time now.

I'll turn it over to you, Mr. McKay.

Mr. John McKay (Scarborough East, Lib.): Thank you, Mr. Chairman, and thank you, witnesses, for your testimony.

One of the few things I've learned in this place in the few months I've been here is that Murphy's law of unintended consequences prevails in all matters. It's almost a Mount Sinai truth. I suppose we've had an example of that with Mrs. Barlow's help for Mr. Black. I hope Mr. Black appreciates it with at least a Christmas card.

We also see that Mr. Asper doesn't seem to need a great deal of cultural protection.

My curiosity—and I'd be particularly interested in your comments on this, Mr. Lyman, but the other witnesses' as well—is whether consideration should be given to a sectoral analysis of cultural protection as opposed to what appears to be almost a nuclear bomb approach to cultural protection—namely, this phrasing that the French have, through which one could drive a Mac truck.

Is there a basis for thinking in that line as opposed to the French approach?

Mr. Peter Lyman: First, to comment on Mr. Asper, I think he would be the first to say that his considerable success in the Canadian broadcasting system is because it's the Canadian broadcasting system. He's enjoyed market protections that were designed to support people like him. He's gone a long way on it, certainly.

On the issue of sectoral analysis, one of the things I'll point out is that StatsCan has done an enormous exercise to try to define what is in the cultural area. You think it's an easy question, but maybe when you get to the UNESCO definition you find that certain things are in and certain things are out, and you might disagree. In fact, there are big debates on what is the cultural area. Are plastic models of pink flamingos part of culture? I mean, they are defined as that in the UNESCO definition, whereas advertising isn't. You get into those types of things.

Canada is putting a lot of effort into doing the hard work of defining what is and what isn't. In view of the next few years of rounds of discussions like this—the MAI being the first, but then GATT, as Ivan was saying, starting up in 2000—it would lead you to think that maybe you're going to have some definitions that are going to say, “This is culture, and this isn't”, but within that, because the industries are quite different among themselves and require maybe special treatment, you may end up going that way.

The problem is, you get into a rules-based approach to negotiations in the cultural sector, as in others. We haven't talked about that today, because that's not our favoured approach—if I may speak for the three of us—but that is an approach that would be considered by other countries. That might be more appropriate if you got into the sectoral-based approach. Not that I'm advocating it; you're more vulnerable that way, I think.

Mr. Keith Kelly: I think one of the other dangers is that there's such a complete integration between the Canadian cultural industries and the non-profit sector that it's really difficult to surgically incise one sector that you think can go it alone without having an unwitting impact on other interests that are dependent on that.

For example, if you said that Canadian book publishers shouldn't be allowed to sell non-Canadian books, they use the profits from that to subsidize actual Canadian publications to support the publication of Canadian writers. We see the same thing in the film distribution area.

The cultural sector is tremendously interconnected. It's very difficult to do the microsurgery that would be implied in a sector-by-sector approach to dealing with this issue.

• 1725

Mr. John McKay: In effect, you're saying you couldn't do something such as that in the fashion of the automobile industry.

What about the concept of sunsetting certain aspects? Again, I appreciate the analogy to microsurgery may not be appropriate, but it's presumably the desire of any regulatory entity to try to get out of the business and let market forces play within certain parameters as much as possible.

Has there been any thinking in terms of how to sunset this stuff? For instance, I'm sure Mr. Asper has prospered well over time under this particular regulatory environment. Presumably some parts of that industry no longer require as much regulatory supervision. Is there a basis for applying some form of sunsetting to this kind of discussion?

Mr. Peter Lyman: I think of sunsetting of course in our own domestic policies. We can do that, and I think if you went through some specific cases through regulation of broadcasting you would see we've evolved to a point where we no longer regulate certain areas. There's been a withdrawal of regulation from a number of areas, such as AM radio. It's much less regulated than it was in the past in terms of amount of spoken word. That also applies to FM radio.

In cable regulations in the beginning, 10 to 15 years ago when we first started with specialty services, there was regulation right down to the wholesale rates that were paid by cable companies to the specialty services. Now that's not regulated as much any more, for better or worse. So there have been domestic cases where it's not so much of a sunset but we've moved out of the regulation side.

If you applied that internationally you probably wouldn't want to set up a priori a sunset provision in any of these things because you wouldn't know exactly how long you would need them or how long you would last. You could set it up to review something in five years, and if you decided it was no longer necessary after that time in a specific case you could do that. I don't know what trade law says about that but that would seem to be more appropriate than starting with “We'll do this but it's only going to last for five years”.

[Translation]

Mr. Ivan Bernier: As for international trade legislation, I think that one of the known examples of that kind of clause is the one concerning the exception for a most-favoured-nation in the agreement on services especially for co-production agreements. So that's what is used in the cultural sector. But, in principle, that exception has a ten-year limit. However, it does state: "in principle".

And what I've understood to be coming from most States, from the Canadian government among others, is that the principle and the expression "in principle" means "whenever we feel like it" or "as long as we feel like it". In other words, it's not a very rigid clause. Examples of this kind of clause are not numerous and it's not really a good example or, at least, not very efficient.

On the other hand, I think we agree that negotiations every five years or repeated negotiations are a form of pressure. But we only have to look at what's already coming for the year 2000 for the States, concerning what they're doing.

[English]

Mr. John McKay: I'd certainly like to explore that, but in deference to time....

The Chairman: We're actually now 28 minutes behind.

Mr. Graham for a short question.

Mr. Bill Graham (Toronto Centre—Rosedale, Lib.): Thank you, Mr. Chairman. I'm afraid I have a rather long question. Will you be breaking right at the 5.30 p.m. mark, Mr. Chairman? Or how long do we have?

The Chairman: We still have a whole other section to go.

Mr. Bill Graham: Let me try this on our panel. Some years ago when we wrote the joint Senate and House of Commons committee report on foreign policy we tried to build into that report a cultural dimension, for precisely the reason I think Ms. Lill was suggesting and you suggest in some of your answers.

In the globalized society in which we are living more and more, if we don't have a way of projecting our values into the international arena as well, we will ultimately become submerged.

• 1730

So we have a double function, not only to create an environment where we preserve our right to talk to ourselves about ourselves and create an atmosphere in which that is possible, but also to create a world in which we are able to influence the outside world. Otherwise, for example, the land-mines issues or the other issues we're struggling with in the political arena will not find a way of a Canadian expression in them.

When we had Anne Medina come before the committee, we wrestled with this, particularly this problem that I think Mr. Brison was getting at of whether, to the extent that you want to export your values, you have to dilute them to satisfy the market to which you're trying to export them.

It seems in the area of film that is a particularly dangerous slope we're going down now in Canada. If we want to sell into the American market, we are Americanizing our films. I don't see Due South as a Canadian television program; I see it as a Los Angeles police program with a guy in a red jacket. This doesn't make it Canadian in terms of values or other things worth preserving.

I have two quick questions. The first is, to what extent in this can we recognize that different media require different measures, and in the international framework, seek to protect and establish them?

To me it seems we have domestically very different protections for films and books, and for obvious reasons. They require it. Maybe they have general issues such as subsidies, but there are other very different things, because their distribution is different. They require different approaches.

Does that mean we have to go back to Mr. Bernier's idea of a broad general exemption, because it's the only thing that will allow us the flexibility in the future to protect these and to adapt to changing conditions? Or do we seek to tailor finer measures such as Mr. McKay was suggesting? That is my first question.

My second question is, in these OECD negotiations, we know the French have similar concerns to ours, but who else is going to be there with us, fighting for a cultural exemption? Basically the subtext of this is, how do we avoid being over-Americanized in everything we do, and how many other countries at that table are going to be on our side, ensuring that this measure won't have that unintended and unfortunate consequence?

Prof. Ivan Bernier: On the last question, I can tell you that for the moment, Canada, France, Belgium, Spain, Portugal, Italy, Ireland, and Australia to some extent are already in favour of some kind of cultural exception. I'm really surprised by that increasing number.

Mr. Bill Graham: Thank you. That's helpful.

[Translation]

Mr. Ivan Bernier: We have allies.

Mr. Bill Graham: We have allies.

Mr. Ivan Bernier: That's okay. Already.

[English]

Mr. Keith Kelly: What we can afford to give ourselves is as much room as necessary, without constantly carrying a compendium of obligations around with us.

For example, you'll be meeting some people who work one day on stage, one day on film, and one day in the broadcasting industry. Are they going to have to understand the different rules that we construct for the different industries? There's a tremendous mobility of talent within the cultural sector.

I say we can afford the luxury of giving ourselves the space we need to develop our culture. I wouldn't lose a lot of sleep trying to construct these finely crafted sectoral deals that in the end won't work, because of both the mobility of the labour force and also the interdependency of various sectors.

I think it would be a task of overwhelming complexity.

Mr. Peter Lyman: You might say, everybody agrees to the cultural exemption as long as you don't include the Internet as part of culture. Would we go for that? We would not like to, but if we had that or no cultural exemption at all, obviously we would.

We'd like to get everybody to back down completely if we can, but there may be areas that we say are less important than others. I just mentioned that as an example.

The Chairman: Thank you, Mr. Graham.

I have one short question, and I'm going to direct it to Mr. Bernier.

I don't have any money to pay for a legal opinion, but I do want your legal opinion on a question I have.

We have the WTO, we'll have an MAI, and we'll have NAFTA. Which would take precedence in a question on culture?

Prof. Ivan Bernier: That's an interesting question we were confronted with in the magazines case, as I said before.

• 1735

I think in the WTO there's another priority for certain agreements. The WTO itself has priority over all the rest. You have some kind of order there, but it doesn't solve all the problems. When you're in the same category, you're on a par, and when you're on a par, you use whatever means are best. That's why it's an interesting question: so we can know where the MAI would stand.

The Chairman: Thank you.

Colleagues, that brings to an end this section.

I want to thank the three groups for coming.

We're now moving into dealing with some sectoral concerns of your organization, Mr. Kelly. We have representatives there to whom we want to talk.

What we will do now is move into five-minute presentations by these groups. I will ask them up to the table individually. I'll ask them to stay once they've given their presentation. Then, at the end of all the presentations, I will turn to single questions from those who want ask questions at that time.

We're already now more than a half-hour behind, so I would first call the Alliance of Cinema, Television and Radio Artists to come forward.

Welcome, Mr. Sandy Crawley.

Mr. Sandy Crawley (President, Alliance of Cinema, Television and Radio Artists): Thank you very much, Mr. Chair.

I'm not going to take the time to read my presentation. You have copies of it. It underlines some of the subject matter we've been talking about already. Certainly we took into account Mr. Garry Neil's analysis, and the copyright analysis that came from Leslie Ellen Harris.

I'd rather keep moving forward, actually, in the questions and discussions we've been having. I'll take a few minutes just to underline some of that.

We certainly see the danger of an MAI that doesn't contain appropriate protections—whatever word you want to use for them—for the growth of Canadian culture. We also would underline many of the statements that were made by the previous panel that suggest that the rather ingenious structures, in many cases, that we developed through decades of public policy support for cultural development through the arts and so on in this country, are intricately interconnected. It's very dangerous to try to separate one from the other.

I want to bear out what I just heard Mr. Kelly say, that so many people who work in the cultural sector will work as a writer, performer, composer, researcher, playwright, and politician even. They're interconnected, so it's very difficult.

I'm really going to Mr. McKay's question from before. It has been very difficult to approach them in a stovepipe way of thinking.

From ACTRA's point of view, the main threat of an MAI without an appropriate exemption, exception, or reservation would be the broadcast policies we developed over the years. ACTRA represent performers and broadcast journalists who are working specifically in broadcast and recorded media. But I'll underline the fact again, of course, that most of our members also will work in live performance.

I'll draw your attention, or that of your staff if you could afford to do some research in these areas, to our understanding from an analysis of NAFTA. It's that those particular parts of the cultural sector—this is live performance, for instance, and visual arts and crafts—aren't actually treated under NAFTA, so there's no particular protection.

You can argue that it's best to be left out of these things sometimes. Then it's possible to carry on in a certain way to do your work. Consider the successes mentioned by our friend from the Progressive Conservatives—who is no longer with us—such as The English Patient by Michael Ondaatje. We don't want an MAI that will prevent him from succeeding.

I'm sure Mr. Ondaatje would be the first to say that his whole career began because he was able to publish his poems at a not-for-profit, state-subsidized publishing house. He probably never would have written the novel, let alone been able to sell it and make it into a major film.

• 1740

With respect also for what Mr. Graham said, he may not think Due South is a Canadian program, but I have many friends who work in that program, and I've done so myself, and to me it's actually an excellent parody of American social values, so to me it is a Canadian program. You don't want to split hairs too much on these things. We have to keep the largest possible flexibility for ourselves.

I chose not to read it to you, but I do underline the fact that it's planning for the future that's really very key in this matter of culture and trade, as opposed to just grandfathering or protecting measures we've devised so far. It's quite clear from the acceleration of the pace of change in technology and so on, affecting cultural production, that we are going to need new measures. We'll probably even have new art forms. We can't predict them from this point purely on economic terms, as there is a tendency to do under these trade agreements, which try to treat culture as a commodity or as a service. I would suggest it's neither. It does have an intrinsic value beyond those things.

At the risk of taking heat from some of my colleagues, I would say if forced, we would have to approach a rules-based trade regime in culture at least knowing we could specifically make rules for culture and define it. But it is very difficult to define in strictly economic terms, and I think it's very dangerous to try do that. That's the danger of these agreements in general.

The other point that we do make in the paper and that we would like to reiterate is that we do believe without the appropriate exemption or reservation, “unbound reservation”, to use the jargon, in an MAI, Canada should walk away from it and not sign it. There's no question that this will come back in another form. As I understand it, it has already failed once in an earlier form of the MAI.

There's much confusion on that topic, but it seems to us, actually, that this thing has been rushed in an unholy way. We point out in our paper that we remember the first free trade election in Canada was in 1911 and we finally had another one, and did something about it, in 1987. It seems to us for something that has potentially such a huge impact to be tooled basically by bureaucrats and then finally signed and dealt with by the public through its parliamentarians in an interim way, without any chance for a full public discussion, is not healthy. So from a political perspective, we don't believe it would be disastrous in any way for us to walk away from the MAI, because we know these issues are always going to come back to us in the world we live in and we'll have another chance to deal with them. We do have the NAFTA. We have the FTA. We have many bilateral agreements. So we hope as parliamentarians you're not feeling pressure to support this thing because a lot of experts and economists, whose theories often don't match reality, are telling you it's a must-do or it will all cave in.

With that, knowing we're in a time budget here, and knowing we have some very other distinguished panellists, I will end my remarks and ask you to read the paper and forward any questions you may have.

The Chairman: Thank you, Mr. Crawley.

From the Association of Canadian Publishers, Jack Stoddart.

Mr. Jack Stoddart (President, Association of Canadian Publishers): We'll move quickly. I know everybody is tired.

I'm Jack Stoddart. I'm chairman of Stoddart Publishing and I'm also the president of the Association of Canadian Publishers.

Our brief is not sectoral in its outlook. It really is the cultural industries.

Thank you for the invitation to appear, and I want to thank Minister Marchi for his commitment to open up the process surrounding the MAI. For months we have been forced to fight phantoms. It's only in the last few weeks that we've begun to have access to federal officials and information. That change has been refreshing and I hope together we can identify some outstanding issues and resolve them.

I recognize the MAI is developing a fever pitch in Ottawa, with one group claiming it's essential to global corporations and their growth in the next century and others saying it fundamentally weakens our country.

• 1745

My purpose in being here today is to explain dispassionately the very real concerns that publishers and others in the cultural industry have.

Canadian publishers actively support the free flow of information and ideas around the world. Canadian publishers are among the most aggressive exporters of the cultural industries. Our exports have grown over 300% in the last five years. We actively pursue new markets around the world. Canadian publishers are active in the global market, based on a strong Canadian foundation.

Canadian publishers support the cultural policy framework that has contributed to our success and see the MAI as a serious threat to that framework.

We all need to keep in mind that our cultural success has been unique in the world. It has been hard fought against enormous odds. We face the challenges of geography, small population, a two-language population, and proximity to the world's largest exporter of cultural goods, although they do not define it in that way. Despite these challenges, we have a flourishing national culture, and because these challenges are ongoing, our cultural space requires constant attention and care.

I want to underline that we welcome Mr. Marchi's commitment that culture will not be harmed by MAI. We also welcome Minister Copps' leadership and commitment on that point, and we believe that the government—and I think all parties, not just the government of the day—wants to ensure that culture is not threatened by any deal. The collective challenge, then, is to make sure that culture is not threatened.

Trade officials blithely tell us not to worry, that it will be taken care of. In essence, they are saying, trust us. But Brian Mulroney promised that culture would be a sacred trust. Then the final text of that deal included a provision that allows the U.S. to target other sectors of our economy if cultural measures are too strong. This effectively neutered the cultural exemption. During the WTO negotiations we were again assured that culture would not be affected, only to see our magazine policy gutted by the Americans' intervention.

We believe that it will take a constant vigilance by our legislators to ensure that commitments to culture are not diluted, compromised, or traded away.

Trade officials have likely told this committee that cultural concerns will be addressed by the exemption proposed by the French government. There are, however, significant problems with both the language of the exemption and the proposed negotiating strategy, and I haven't heard any comment around this exemption yet today.

The language of the French exemption is both simple and elegant. It speaks to the noble purchase of culture and appears to leave nations free to make their own cultural policies and programs. It is a great appeal to those nations that respect the importance of culture.

But for those who see culture as only entertainment, it's virtually meaningless. The proposed French exemption is a little bit like a religious article of faith: if you believe it, it's true; if you don't, you can ignore it.

Believe me, Americans have a completely different understanding of culture.

Let me be more specific. The U.S. trade officials, driven by the U.S. entertainment lobby, which incidentally is second in power and influence in Washington only to the defence industry, will be able to drive a truck through this French exemption. Let's be clear that we are in the midst of an ongoing assault by the U.S. in particular, and a few other multinational interests, to weaken our cultural policies.

They have challenged magazines. They have challenged broadcast content rules. They are challenging our film distribution policy. They're challenging our ownership policies on books. It is a steady and continuous campaign to have unfettered access to our markets, even though they already dominate them.

In recent discussions with a U.S. State Department official, they told me categorically that there is no such thing as culture, as cultural products or as cultural industries, and all the flowery language about culture in the existing trade agreements—and we were talking about the FTA and NAFTA at the time—is simply to save face for politicians in other countries. That was a face-to-face meeting with the consulate general in Toronto for the U.S. embassy and the head of the cultural part for the State Department in Washington.

So my strong recommendation is that Canada should argue for explicit, unequivocal exemption that defines culture, cultural products, and the cultural industries. It should define specifically what is included, as we did in NAFTA. Some may say that limits us in the future because of emerging technology and new cultural forums, but the rhetoric.... We haven't won on that one. If you keep looking forward while never doing anything for the present, you'll never win anything.

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On the strategy side, we strongly support the heritage minister's efforts to engage like-minded countries, but we're also very concerned that our trade officials say they plan to introduce Canada's insistence on the cultural existence at the eleventh hour. This is a strategy that seems destined to fail. If after three years of negotiation, 28 other member states agree to almost everything, and Canada and a few nations say the cultural exemption must be in or there's no deal, I doubt we will get it. The cabinet, trade officials, and negotiators must be describing culture as a deal breaker, and consistently from the outset. We must clearly define culture, cultural goods, and cultural industries, as we did in NAFTA. The Canadian cultural community has seen its interest abandoned in the eleventh hour too many times. It can't happen again.

If you'll allow me, there is one more point that I'd like to make. If you believe there is no relationship between ownership regulations and our Canadian cultural industries, every time a company is sold to foreign interest, our corporate tax base erodes. Nobody seems to talk about this, but as a matter of principle, multinationals pursue paying tax in the jurisdiction of least taxation. Personal and corporate tax used to be shared 50:50 in this nation. Today, it's 80:20. I believe that is a direct result of having such a large percentage of business now being controlled by global corporations that pay little or no tax in this country.

In closing, I'm asking the members of this committee to make a strong recommendation that Canada's cultural exemption be clearly defined and unequivocal, as we did in NAFTA and without the 301. Canada must publicly describe the cultural issue as a deal breaker, and our wording in that must be a bottom line in the deal—along with the French wording on the exemption.

Thank you.

The Chairman: Thank you, Mr. Stoddart.

I'm not sure if you've read the minister's statement, comments, and responses to questions on the first day of this committee.

Mr. Jack Stoddart: I did, yes.

The Chairman: I'm not sure he used the words “deal breaker”, but I think he was very strong in terms of his commitment in there.

Mr. Jack Stoddart: He did.

The Chairman: Can we move on to the Canadian Film and Television Production Association, and Guy Mayson?

Mr. Stoddart, could you stay at the table, please?

Mr. Guy Mayson (Senior Vice-President of Operations, Canadian Film and Television Production Association): Thank you, Mr. Chairman. I'll do a short presentation based on my brief, but I'll try to do a bit of an edit as I go here. I would like to go through it because it basically lays out our position, but it's fairly short.

In addition to the presentation, I left a sort of statistical submission to give what I think is useful background to the committee on just the independent production sector generally, some of its current trends and some of the challenges it faces.

The CFTPA is a national trade association that represents the interest of more than 300 companies engaged in the production and distribution of Canadian television and theatrical feature films. Our members include large, diversified publicly traded companies, as well as many medium- to small-sized companies in all parts of the country.

Well-known television and film productions such as Traders, Due South and Road to Avonlea are just a few of the many popular, prize-winning productions that have recently been produced by our members. Our industry has developed into a considerable success story over the past fifteen years. The overall revenues from the independent sector alone grew from approximately $200 million in 1983 to over $1 billion in 1995. Revenues for the production services sector and broadcasting area are considerably higher. As our profile document indicates, this has resulted in a dramatic growth in employment opportunities in the sector and increased export opportunities for Canadian production.

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However, despite the considerable success the sector has achieved, I don't want to get too carried away with painting a picture of the industry sector as a surging growth area, particularly in the context of the proposed trade agreement that the committee is considering.

In many ways, the industry has been a creation of Canadian government public policy. Certainly federal government policy has played a critical role in fostering an environment within which Canadian production and Canadian production companies have been nurtured.

A fundamental aspect of this policy has been the commitment to a system of national objectives and regulation for broadcasting. Fundamental to these has been the importance of Canadian ownership and Canadian content, detailed in the Broadcasting Act and in CRTC regulations. Virtually all major producers operating today would admit that they are in the business largely because of the CRTC and the Canadian government's commitment to ensuring a demand for Canadian content in the system.

Because of the difficult economics of producing programming that can compete effectively with inexpensively acquired foreign programming, the government has also developed a significant body of funding programs to assist the creation of Canadian content production. Agencies like the National Film Board, Telefilm Canada, and most recently, the Canada Television and Cable Production Fund, have played and will continue to play a key role in assisting the financing and distribution of Canadian film and television production.

The government has also maintained a generous system of capital cost allowances and tax credit measures over the last 20 years. These programs have maintained flexible Canadian content requirements that both encourage investment and corporate development in Canadian production.

The Investment Canada Act has helped ensure that transactions involving Canada's culture are treated by criteria different from transactions in other sectors. Foreign investment policies for certain cultural industries have also placed very specific conditions on investment in some sectors.

In the area of film distribution, for example, government policies have played a key role in helping Canadian film distributors strengthen their market share and their ability to invest in the financing and promotion of Canadian feature films. We recognize that the policy has been controversial, especially recently, but we would maintain that it has proven effective.

We'd also maintain that all of these measures have been and will continue to be essential to the continued development of the sector. The rationale for why these policies evolved has really not changed and perhaps is more relevant now than ever.

In the film and television sector, Canada is wide open to the cultural products of other countries, and no one has seriously maintained that Canadians should not have access to these things or that this should be restricted in any way. However, it has also been absolutely true that distributors of foreign-owned production had never been strongly interested in financing the creation of Canadian production. If Canadians are to have any access to quality programming created by themselves and reflecting their reality, a variety of special measures have had to be in place to encourage that. This is simply a basic reality of the film and television industry.

As our industry diversifies, foreign sales have increased and we have become more confident of our ability to expand in foreign markets, but we have not lost sight of the fact that the reason we exist as an industry must always return to that basic government policy commitment to ensure a vital Canadian presence in our own market.

I should underline that we absolutely recognize the importance of encouraging foreign investment in an increasingly competitive global economy and we support the basic objectives of the agreement in attempting to promote a secure and predictable framework for global investment through the principles of non-discrimination on the basis of nationality and assure protection for investment.

However, we also recognize that any system of policy, programs, regulations, and tax incentives based on encouraging Canadian companies and content will easily be viewed as discriminatory or inequitable to non-Canadians. In our view, this is why it is essential that the Multilateral Agreement on Investment have no application to the cultural sector. Canada should simply not signal that its system of cultural policy is in any way open to scrutiny or dispute resolution under this type of agreement.

We would emphasize strongly that such an agreement cannot have any application to the cultural sector, where clearly much of the policy and program infrastructure could be arguably discriminatory and inequitable in some form.

The Canadian government should ensure that any international trade agreement it enters into does not limit or circumscribe its ability to pursue any measure it deems appropriate to pursue its policies, and a broad exception for culture needs to be negotiated.

If we do not support our own culture and cultural products, no one else will. Thanks very much.

The Chairman: Thank you.

From the Canadian Magazine Publishers Association, Terry Malden. Is he not here?

• 1800

Okay, from SOCAN....

Mr. Bill Henderson (President, Society of Composers, Authors and Music Publishers of Canada (SOCAN)): Good afternoon, Mr. Chairman, members of the committee.

My name is Bill Henderson. I am a composer from British Columbia and I'm the president of the Society of Composers, Authors and Music Publishers of Canada, SOCAN. On behalf of SOCAN, I would like to thank you all very much for this opportunity to express our views regarding the proposed Multilateral Agreement on Investment, the MAI.

This afternoon I am joined by four of my colleagues: first, François Cousineau, a well-known Quebec composer who is also a SOCAN director and our past president; Al Mair is president of Attic Records Limited as well as vice-president of SOCAN; Paul Spurgeon is SOCAN's general counsel; and Michael Rock is SOCAN's general manager. I wanted to mention him because he may well be the appropriate person to respond to some of your questions.

I understand committee members have bilingual copies of our biographies and that you've all received a copy of our submission. It may make it easier to follow our presentation if you turn to the table of contents on page 1. Following that is the two-page executive summary that describes the 18-page submission.

Today, we obviously only have time to highlight some of our submission's key points. However, we do hope you'll carefully consider the submission itself when you prepare your report.

Here's how we'll proceed over the next few minutes: first, François Cousineau will briefly describe to you who we are and why Canadian content regulations are important to SOCAN and how the MAI would affect them. Secondly, Al Mair will explain why SOCAN is concerned about the MAI's cultural implications, particularly the potential impact of the MAI's performance requirements provisions. Our general counsel, Paul Spurgeon, will be our final speaker. He will refer to the five cultural exemption options available and list the principles that should guide the drafting of the exemption and finally suggest some wording for an effective cultural exemption.

Following our presentation we look forward to responding to your questions. Thank you.

[Translation]

Mr. François Cousineau (Past President, SOCAN): Mr. Chairman, ladies and gentlemen, as we note on the first page of our submission, the Society of Composers, Authors, and Music Publishers of Canada, SOCAN, is Canada's sole music works performing rights society.

Performing rights recognize that music creators have the exclusive right to permit public performances of their work, in other words, visual or acoustic representations. The performing right is very important to the composers, lyricists and some writers we represent because performing royalties are often their primary source of income.

Our members do not get paid up front for writing songs. They depend almost entirely on the performing rights or royalties they receive when their songs are used in public performances or in radio or television broadcasts.

As you know, under Canada's Broadcasting Act, Parliament has stipulated that broadcasters must make the promotion of Canadian creative resources a priority. To implement Parliament's intent, the Canadian Radio Television and Telecommunications Commission, the CRTC, has formulated Canadian content rules which promote the broadcast of Canadian music in Canada.

And this is a good thing, because the bottom line is that performing rights or royalties only flow to those individuals whose music the broadcasters choose to broadcast.

• 1805

If broadcasters play more Canadian music, more royalties will remain in Canada. On the other hand, if broadcasters choose to play more foreign music, then more royalties will be paid to foreign sources.

This is why SOCAN wishes to ensure that the proposed MAI—or any other international trade or investment treaty—does not adversely affect Canada's cultural sovereignty, particularly the right to use Canadian content rules which promote the use of Canadian music in Canada.

Thank you. I would now like to pass the microphone to Al Mair.

[English]

Mr. Alexander Mair (Vice-President, Society of Composers, Authors and Music Publishers of Canada (SOCAN)): Thank you, François.

As we have stated on page 2 of our submission, SOCAN is concerned about how the MAI could affect Canada's cultural sovereignty. For example, the MAI's performance requirements could adversely affect our ability to communicate Canadian content to Canadians.

We are therefore very pleased that the Government of Canada has clearly stated that it will negotiate an exception for cultural industries. However, we are concerned that after 18 meetings, Canada has not tabled a cultural exemption clause in the OECD negotiations. With only five more meetings planned before the negotiations are scheduled to conclude, we still do not know exactly what the government has in mind.

What we do know is France has tabled a cultural exemption clause that we consider to be inadequate. We also know that over a year ago the Americans stated that they consider a broad cultural exemption clause to be a deal breaker.

We believe that if the United States continues to insist that it has the right to impose secondary boycotts and unilaterally apply laws such as the Helms-Burton Act on an extraterritorial basis, then the MAI's rights and obligations will not be in Canada's national interest unless we secure a broad cultural exemption in return.

Therefore, in consultation with the Canadian cultural community, we believe the Government of Canada should draft its cultural exemption clause as soon as possible to ensure that we are fully prepared for the intense period of negotiations that are expected to conclude within five months. Given the critical importance of this issue to Canada, we cannot afford to wait in the dark until the dying moments of the negotiations and hope for the best.

With this in mind, I would now like to pass the microphone to SOCAN's general counsel, Paul Spurgeon, who will refer to the five cultural exemption options on the table and discuss the principles that have guided the drafting of SOCAN's proposals. Thank you.

Mr. Paul Spurgeon (General Counsel, Society of Composers, Authors and Music Publishers of Canada (SOCAN)): Good evening, Mr. Chairman and members of the committee.

On page 4 of our submission we have listed the five available options for a cultural exemption clause. We then spend the next 10 pages of our submission examining the strengths and weaknesses of each option.

In the limited time we have together today, allow me to summarize briefly by stating that the only option we consider to be adequate is the fifth option—the self-judging general exception. I refer to pages 14 and 15 of our brief. By self-judging, I mean that it would be solely up to Canada to determine what we consider necessary to protect or promote our culture. Other countries would therefore not be able to attack our policies or launch dispute panels or retaliate.

On page 14 of our submission, you will see that we have distilled six key principles from our analysis of the cultural exemption options. Allow me to highlight them for a moment.

1. The cultural exemption should be technology-neutral and sufficiently broad to cover current technologies, as well as any future technological developments.

This is very important for Canada, with the rapid growth of technology.

2. Unlike the clause contributed by France in the current MAI negotiations, the cultural exemption should be sufficiently detailed to avoid interpretation disputes. It must be very clear.

3. Like the national security exception in the 1947 GATT treaty, the cultural exemption should be self-judging and should not be subject to attack or retaliation on the grounds of nullification or impairment or subject to dispute resolution.

This would be unlike what we have in NAFTA, which allows others to take measures of equivalent commercial effect.

4. The cultural exemption must not be subject to any standstill or rollback obligations.

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5. The cultural exemption must not be confined to certain articles or chapters of the treaty. It must override all of the obligations in the agreement of which it forms a part—unlike in the case of NAFTA.

6. The negotiation of a broad, self-judging cultural exemption clause must be a deal breaker for the Government of Canada in the MAI negotiations, just as the essential security is a deal breaker for the United States' similar self-judging provision.

On pages 14 to 16 of our submission we have proposed specific wording for a cultural exemption clause. You will note that it is self-judging and that it includes a technology neutral detailed definition of what we mean by cultural industries. Parenthetically, I should say it is a work in progress. As Mr. Kelly indicated, we have every intention of consulting with other arts groups about the wording.

Finally, I would like to point out that on the last page of our submission we recognize that the MAI only deals with investment and that Canada has already signed treaties dealing with goods and services that do not safeguard our cultural sovereignty. We have therefore suggested a strategy to ensure that all of Canada's international trade and investment treaties include an effective cultural exemption.

We hope you will find our submission to be of assistance to you in preparing your report. We thank you again for the opportunity to present our views. Thank you.

The Chairman: Thank you.

Colleagues, we will now move to a period of questions, five minutes each.

The Writers' Union, please come to the table. You're not on our list today, but please grab a seat. We apologize for the mix-up.

Ms. Merilyn Simonds (Second Vice-Chair, Writers' Union of Canada): My name is Merilyn Simonds. I'm with the Writers' Union of Canada, but I also represent approximately 5,000 writers in Canada: the French and English-language bookwriters, the Writers' Guild of Canada, representing a national association of screenwriters, the Songwriters' Association of Canada and CARFAC, the Canadian Artists' Representation.

I'm speaking on behalf of creators. Everyone else you've heard from today has been from the cultural industries. I must say that there's been a remarkable degree of uniformity in what we've had to say. As creators we recognize that there's much to be gained and little to be feared in being open to the world. We are part of world literature, world art, and world music. We deal in matters of the human heart and mind and spirit, so those matters are in the very deepest sense border indifferent. But as much as creators are part of the global community, when we write or paint or make music we do so as citizens of a specific place. For us that place is Canada.

Canada was the first western nation to recognize the importance of the creator in society. In 1992 we passed the Status of the Artist Act, which affirmed the artist's primary role in developing Canada's culture and sustaining its quality of life. Artistic creativity, it said, is the engine for growth and prosperity of dynamic cultural industries in Canada. International agreements such as the MAI don't seem to affect creators directly or immediately, but because they affect our cultural industries and our public cultural policy, creators eventually feel their impact too.

Maybe we need to coin a word, “economism”, to denote the fallacy of believing that every human activity must eventually submit to the logic of the marketplace. As important as jobs and economic prosperity might be, culture and its contribution to the quality of life can't be calculated in dollars and cents. The truth is culture just doesn't bend to the language of international economic agreements. It's neither a good nor a service. Its value isn't necessarily apparent at the bottom line.

• 1815

When cultural industries are on the table, it's the form, not the content, that's being discussed; the books, not their ideas. It's like talking about and making rules for the bags and the boxes and the crates and forgetting about the apples and the lumber and the computer terminals inside.

If you only consider the physical object, then the WTO decision is quite right that a magazine is a magazine is a magazine. But what the panel of judges didn't take into account is that the content of a magazine gives it value. That value isn't a matter of profit. It's a matter of spirit, of shared tradition and history and thought. It's a matter of culture.

There has been discussion today on what is culture. I'm sorry Ms. Lill has gone, because that was her question.

Well, some say culture is everything we do. It's hockey. It's jigging cod. It's sugaring off. It's wearing a toque. But culture isn't what we do, it's what we think and feel about what we do. Culture is a thing of the mind. It's what the word “hockey” triggers in our collective imagination. It's the place that the foothills hold in our heart.

A national culture can't exist without the expression of it. That's why creators stand at the heart of culture. When we tell stories and paint pictures and make music, we do so from a uniquely Canadian point of view. When we express that point of view, we reflect the country's citizens to each other, building that shared vision, that shared value—the national culture.

In most countries language creates a safe shared place where culture is nurtured. Quebec enjoys some cultural advantage by virtue of its linguistic isolation on the continent. English Canadians seem to speak—we don't, but seem to—the same language as the world's largest cultural exporter. Because of this, the United States considers Canada a natural extension of its market when it's selling cultural goods. But don't forget, when that country buys cultural content, their publishers, their music producers and their film-makers buy American first.

And so they should. American writers create knowing their work is going to be bought by a publisher on the strength of its appeal to an American public. No one would ever think of telling an American novelist that he should set the story in Toronto so that it has broader appeal. This happens to Canadian novelists all the time.

American books compete in a marketplace where virtually every book on the shelf is American. When American readers go into a bookstore, over 90% of what's there is written in their language, with their spelling, with their meanings—all their stories told through the filter of their shared culture.

The experience of Canadian writers is very different. Canadian publishers have to consider how well a work will compete with an American work right here inside our own borders. Because in Canada, when readers go into a bookstore or a library, three-quarters of what's on that shelf is foreign. When Canadians turn on the television or the radio, what they hear and see is told through a foreign cultural filter, not our own.

Quebec suffers a double whammy in this regard. They're considered an extension of France's cultural market, and because they are so bilingual, they also suffer the intrusion from the United States.

Few countries offer as little domestic creative content in their home market as Canada does. That Canadian creators even have this tiny space to share their work with their fellow Canadians is due to an earlier generation of creators and politicians who, with incredible vision and commitment, have assembled the institutions and public policies that make it possible, despite our small population, for cultural industries to buy the work of Canadian creators.

In the larger form of my brief I outline the potential impact of the MAI on: the CBC; Canadian content rules; the net benefit test; subsidies in cultural industries; grants to individual artists through the Canada Council; and the Public Lending Right program. Canada has a deeply embedded network of support through its national culture, supports that could very well be judged discriminatory under the MAI.

The economic argument is that the marketplace should determine what survives. But culture is different. The cultural and even the economic impact of creative work sometimes isn't evident for years. Who could have foreseen that Anne of Green Gables, for instance, would become an icon of Canadian culture 80 years after it was published? No one viewing the richness of Canadian culture today can say with any certainty which particular Canadian product—which book, which film—is going to be important 80 years down the road.

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The best way to have something distinctive to offer on the international marketplace is to nurture creative expression at home. That means not only doing what Mr. Marchi has promised to do, which is to promote and protect Canadian culture; he must also ensure that Canadian content continues to be created and that it continues to be accessible to all Canadians. Just as we would never allow investment in this country that would be a threat to our national security, we must also diligently bar investment that might pose a threat, however subtle, to the continued creation and dissemination of Canadian culture. I say this because that's what cultural sovereignty means: the right of a nation to hear itself think.

So we urge the negotiators of the MAI to insist on a general exemption for culture, as everyone else has here today—one without a notwithstanding clause, one without standstill and rollback provisions.

We can't limit Canadian creative exploration in the next millennium by binding it to rules that we've crafted in the 20th century, and we can't lock ourselves into the position we find ourselves in today, struggling to create and communicate in a country that is, to all intents and purposes, culturally occupied.

However that exemption is worded—and we're still working on it, I would suggest that SOCAN needs to add the word “creation” to its production and distribution—we have to give all nations the right to define culture in their own terms and we have to give nations the right to enact policies that preserve cultural heritage, encourage creative expression and guarantee citizens access to their own national culture.

When our trading partners ask us to dismantle our cultural subsidies or eliminate our Canadian content rules, when they say all they want is a level playing field, we should remember what Margaret Atwood said almost exactly ten years ago today during the FTA hearings: a level playing field is one from which all distinguishing features have been removed, and a culture without any distinguishing features is no culture at all.

Thank you.

The Chairman: Ms. Simonds, that was very good. Thank you.

We will now move into five minute questions, and we will stick with the five minutes. I'll start with Ms. Tremblay, Ms. Bulte and then Mr. Blaikie.

Mr. Blaikie, I wonder if you'd take the chair while I sneak out and wish my children goodnight.

[Translation]

Ms. Suzanne Tremblay (Rimouski-Mitis, BQ): Thank you, madam, and gentlemen, for your patience and your presentation. We're sorry to be so late, but we do think this matter is very important.

Personally, I feel a bit uncomfortable discussing culture in this context. I get the impression that culture is what I am, what I think and what we are, it's what we want to be and, all of a sudden, I get the impression that we have to trade all this for something else and, to be honest, I do find that a bit exasperating.

And I wonder if—I've heard things, for example—we don't already have what's needed as a clause. It it's not enough, we shouldn't sign, but we'll be losing all those millions. If we lose the millions, we lose jobs here. Wouldn't it be better to have culture considered in the same area of exemption as defence? We would then be absolutely certain that they wouldn't touch it at all because defence is a full proof expenditure. Couldn't we use that same area for culture? What do you think?

[English]

Mr. Sandy Crawley: I think we'd be very happy with that kind of stance from our negotiators at the table. D'accord, moi aussi.

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Ms. Merilyn Simonds: In fact, as Yvan Bernier said earlier, the Americans used their national security exemption to cover the National Endowment for the Arts, I suppose as a way of controlling propaganda in the event of future wars or something. But they actually manage to fold culture into that very exemption when they want to.

Mr. Jack Stoddart: Earlier, there was a gentleman there, and it may have been...I don't know who it was who asked the question, but he wanted to know if it comes down to giving up a little bit and getting the whole thing or not, what do you think? I thought the answer was softer than I would have given. If you don't have a culture, what do you have? Why bother worrying about the country? I think, very simply, it shouldn't be a question of whether we have to give up the cultural side so we can get a cement something or other ingrained in this program.

The question was brought up about the Quebec presentation here, or lack thereof to be precise, and I'm discouraged by it, because if there's one thing that defines this country it's culture in the province of Quebec and other places. I think to be even discussing this subject without a very strong presence from Quebec is really quite wrong, because I think the biggest difference in the two parts of the country is in fact the cultures. As a country, we're trying hard in some cases to bring these things together and make it a better country, but if we're going to give up on the English side.... As Marcel Masse used to say when he was Minister of Heritage: “I'm not worried about the French culture in North America; we will survive, our language will survive, our sense of being will survive. It's you”—he was talking to me at the time—“who won't have your culture in 10 years if you don't wake up.” I think this is the time we have to.

We lost on the FTA, to a certain extent, and a little bit more on NAFTA. We lost big time on the WTO. We have to start recapturing some ground, and if we don't consider culture as our national defence issue, I don't know what else is. What are our newspapers and television and radio having to do with national defence if our culture isn't what this country is all about?

We drive the same cars, we have the same buildings, the countries look very similar.

Mr. Sandy Crawley: The cement is different.

Mr. Jack Stoddart: Well, thank you.

It's what is in our minds. That's what the culture is all about and that's what makes the difference. That's why we have to defend it now, not later.

[Translation]

Mr. François Cousineau: And that's why the option of the general exception is the only one defended by SOCAN because it is the only one that will be strong enough to defend against the fact that, for the Americans, culture doesn't exist because they just have it automatically. However, I would point out to the honourable Ms. Tremblay, that the Americans have an army, they have a navy and they have all that. So that sometimes can change your point of view. They say what they want and if we don't stand up for ourselves, it's clear... I for one think we should consider the number five general exception option as being a sine qua non.

Ms. Suzanne Tremblay: But what do you think, for example, about those who say, and I think it's Mr. Crawley, that if we can't have adequate protection, we'd be best off not signing it. But if we don't sign, what will happen to our cultural development as compared to the millions we'll be losing?

Mr. François Cousineau: We'll be signing during future negotiations, I'm sorry. There are others coming down the road and the work we're doing now will be of benefit during future negotiations. That doesn't mean that everything is going to go through in the MAI. There will be others. So we should continue to keep that in mind.

Sorry, but that's what I had to say.

Mr. Sandy Crawley: That's also my point of view because

[English]

these issues will not go away with the MAI. I don't think the economic reality of the world is going to fall, or fall apart, on the success or failure of the MAI, but the issues won't go away.

I was privileged to be a member of an elite group that attended the Sylvia Ostry dinner. I think it was a year and a half ago. Were you there, Paul? Mr. Ruggiero from the WTO was our spokesperson. He was our after-dinner speaker before dinner. He was extremely impressive. He spoke for 90 minutes, with no notes, on the subject of world trade, and I asked him specifically.... He took questions and he was fearless in answering them. I asked him whether he thought that some protections for culture in the regime of world trade were feasible. He had a fervent, almost religious belief that liberalized trade was the answer to the end of war and everything. He said he really felt that within 20 years we would need to have total conformity in all sectors.

• 1830

You can imagine the kind of terror those words strike in the heart of anyone with a creative bent because there's nothing that kills creativity faster than total conformity. It's an absurd concept. This man is not stupid; he's a respected intellectual leader and so on.

Then I went further and asked him questions about copyright protection and whether one could perhaps look at droit d'auteur and the creations of artists separately from the way you look at commodities, goods and services, and so on.

I asked him his opinion on WIPO, the World Intellectual Property Organization, of which I've participated in my small way in trying to make international things work, along with good Canadian delegations. He kind of sneered and said “WIPO can't solve anything. If it doesn't solve it soon, we'll take it over.” I'm quoting a man speaking at a dinner. He didn't have to sign for these things.

This is certainly the attitude that creativity is useful as a buzzword in business plans, innovation is the key and so on, but when you get right down to creativity, you can't legislate it and you can't treat it the way other things go. That's the danger with this whole movement toward international trade.

I certainly couldn't agree more strongly with your point. If we don't get what we need in terms of protecting our culture in this agreement, walk away from it. No problem.

The Chairman: Quickly, Ms. Simonds.

Ms. Merilyn Simonds: Rather than say we have to push for culture or else walk away, because we in Canada have had such long experience dealing with this overwhelming cultural exporter next door, I think we should be taking a lead. I would urge our negotiators to lobby the other nations and really take a lead on this cultural exemption. I suspect there's a growing feeling among the other nations that this is possible.

I want to say on behalf of those in the Union des écrivaines et écrivains québécois how much they regret the speed of this process, because they would have liked to have made a representation too. I think if these hearings can be expanded after January in some way so there can be a larger conversation and more of a Québécois input, it would be most valuable.

The Chairman: Thank you.

Ms. Bulte.

Ms. Sarmite Bulte: Thank you, Mr. Chairman.

I'd like to talk specifically about the exemption. I notice you've chosen the word “exemption” very carefully. Mr. Stoddart is talking about the exemption in the same light as national defence issues, which right now is the general exception under the act.

Our minister has stated clearly that culture in not on the table and he will not accept a roll-back or standstill provisions. So, Mr. Spurgeon, do you want what you proposed here in the cultural exemption to be a general exception or an exemption as a country-specific reservation with unbounded provisions?

Mr. Paul Spurgeon: This is a general exception. The last thing we want is this slippery slope of creating sectors, then measures, exceptions, and a list that leads to standstill, rollback, and then we're just out the door. We don't want that. That's why we want this kind of very general exemption that starts on page 14. Nothing in the agreement shall be construed to prevent us from taking any action, law, measure, reg, to do that. It's as simple as that.

Ms. Sarmite Bulte: I just read it, but it's not quite as simple as that. I'm trying to help. I want to know what your position on this is. You stated during your presentation that you're not aware of the exemption. Have you or your group met with Mr. Dymond?

Mr. Paul Spurgeon: Some of our people have. I haven't personally.

• 1835

Ms. Sarmite Bulte: Mr. Dymond told us here that he had filed the 48 or 49 country-specific reservations contained in NAFTA at the table, and those were distributed to us. In that list, of course, is the chapter in NAFTA on cultural industries as well. Are you saying to me that it should be an all out general exemption? My understanding, even speaking to Mr. Bernier today and to other legal experts, is that there is no legal difference between the enforceability of a country-specific reservation and a general exception. I need to know that. Is that true or not?

Mr. Paul Spurgeon: Is there a difference in the law?

Ms. Sarmite Bulte: Yes.

Mr. Sandy Crawley: I think the message we got from Mr. Dymond, at the Canadian Conference of the Arts, was that we were going in the direction of country-specific, unbound reservations. I think you're right. I don't know that there's no legal difference—that's not how I interrupted Mr. Bernier's remark—but they're both legally enforceable in theory. From a political point of view, however, first of all, what are the chances that we're going to get an unbound reservation, or that we're going to fold at the last minute and have a retaliation clause like we have in NAFTA or the FTA? If you could get by into a general exemption, it would be a stronger form of protection from a political perspective, if not from a legal one.

Ms. Sarmite Bulte: Thank you, Mr. Crawley.

The Chairman: I'm not sure that Mr. Dymond said he did file. In fact, I don't think he has filed on the cultural side. He explained to us that those were specifically the exemptions that were in the NAFTA. He's supporting the French.

Ms. Sarmite Bulte: Thank you for that explanation, Mr. Chairman.

Mr. Stoddart, I just want to follow up. National security is a general exception. The only thing in the agreement is national security. Is that what you're asking for in culture too, that it be placed right next to that?

Mr. Jack Stoddart: If we could get it, yes. I spent an hour with Bill Dymond about a month ago, and he very clearly said that the French exemption is what will do it. He gave us a copy of the French paper and whatever. If he's gone further, fine, let us take a look at it. At this point in time, I'm not aware that he's actually tabled something in Geneva that goes further than that. I think we're saying that we're not concerned whether it's this legal aspect or that legal aspect. From my point of view, what I'm very concerned about is....

It's not that Minister Marchi doesn't believe in what he's saying. I think he does, as do Minister Copps and Herb Gray—and you can go through a lot of the strong Liberals. What I'm concerned about is the chief negotiator saying that this document is what will save you, and it's the French exemption. It's really nothing more than a statement of philosophy, and it doesn't detail whether Canada feels strongly about it. We're really the most affected nation. We're the only one sitting next to the U.S. Everybody else has language in between. If we can't take the leadership on this and put the words next to the French exemption.... I agree with the French wording as far as it goes, but we have to put the detail beside it. That's all I'm asking. I'll leave it up to a lot of other legal minds to come up with the right answers, because I can't do that.

Ms. Sarmite Bulte: Thank you.

The Chairman: We'll get a quick comment from Mr. Spurgeon.

Mr. Paul Spurgeon: Thank you.

The problem with the French is that it's not self-judging. I'd really like to refer the committee members to the bottom of page 10 and to page 11. The Government of Canada apparently is considering a country-specific sectoral reservation similar to that of the NAFTA annex II approach. The U.S. seems to like that approach, and I think you can see why if you follow on page 11.

If we agree to that country-specific cultural sector reservation approach—and I'm reading here from the middle of page 11—I refer back to what I said about a slippery slope. We're going to end up going back to a list, and then there are going to be requests for measures in the negotiations, there are going to be requests for standstills or grandfathering or sunsets, or whatever you want to call it, and eventually there will be rollbacks, so that we lose the ground we've gotten up until now. We don't want to be put in that position.

• 1840

It's clear that we have to have self-judging law here, just as the Americans want with their self-judging essential security. They want exactly the same thing. It's a quid pro quo, as I see it. It's as simple as that.

Mr. Bill Blaikie: I have just a few comments and then maybe I could get some response.

I said privately, Mr. Chairman, that I was here when Margaret Atwood made those comments ten years ago. I sat on the Standing Committee on External Affairs at that time, when we were looking into the elements of the FTA, and I remember her presentation and her rather graphic description of what beavers do to themselves when they're under attack. It seems as if the beaver is at it again.

It was mentioned about Quebec. I share, I think, a sense of regret, in a way, as I perceive it, that Quebec is not—as a government, not necessarily as a society—kind of shoulder to shoulder with Canadian nationalists in respect of the MAI. But they weren't when it came to NAFTA or the FTA, either. It seems to me there is a difference of opinion between Quebec and the rest of Canada, politically speaking, at the governmental level about these trade agreements, particularly on the nationalist side, Quebec speaking, and particularly again on the sovereignist side, I think because they're trying to send a signal to the international community that they don't intend to be outlaws or they don't want to rock the boat when it comes to the way in which the global paradigm is moving. That's part of a larger consideration that goes beyond culture.

On Marcel Masse, that was good advice he gave you, but on the other hand, ironically, he was part of a government that was responsible for the FTA and for the NAFTA.

I remember making a speech in the House of Commons in which I said that I could understand why Quebeckers are very concerned about their own distinct society, which I was prepared to defend, but I felt that my sense of being a distinct society in the rest of Canada was being threatened by the FTA and by NAFTA and that what made me a Canadian and what made Canada Canada, for me, would eventually be destroyed by these agreements, by virtue of that conformity that you talked about and the elimination of Canadian culture.

I realize this is more of a speech than a question. But this thing is coming at us, and if it doesn't come at us in the form of the MAI, we need to draw a line in the sand somewhere and say, no more.

I too heard Mr. Ruggiero at the WTO in Singapore a year ago next week. But I also heard Arthur Eggleton, when he was the minister of trade, say that sooner or later we're going to have to give up this notion about Canadian culture. That's the real truth of what the mindset of the government is.

Whether it's the mindset of the members on this committee or not is neither here nor there.

There is a sense of resignation in the government, broadly speaking—in governing circles, if you like. There is a sense of resignation about this, which needs to be defeated. Otherwise, if it's not the MAI, it will be the WTO. The MAI is just a prototype for the WTO, and the political question or the existential question for Canadians is, do we want to be part of the prototype, as we've been with the FTA and NAFTA and now the MAI, or do we want to resist it until the last minute and hopefully never see it?

My option is resistance, and I hope that's what the committee's will be.

I sense that's what yours is.

Mr. Sandy Crawley: I'd just like to echo something that's been said here before, and maybe put it in the context of the current government and the policies around this.

A very brave statement was made—I think it was crafted by Monsieur Ouellet when he was in charge of the department—called “Canada and the World”. It alluded to a concept called “Cultures, the Third Pillar of our Foreign Relations and Trade”. This was actually a very daring, and I think imaginative, policy direction for us to go in, and a winning strategy from a political and economic perspective as well. Unfortunately, though, I have to agree with you; I don't see any evidence that the government really is following that. It doesn't have the courage of that conviction, because rather than accepting the inevitable globalization—we can't have any decisions any more; we just have to let transnational corporations decide the rules; the market decides everything.... Instead of taking a leadership role, which some of our panellists have suggested here today, and going out into the....

• 1845

Other people are concerned about being homogenized into a mono-culture by market forces, as opposed to having some kind of independence and freedom of expression for their own point of view. The government is certainly in a position to do that if they want to. They even have the policy developed on the books. If they wanted to put some energy and some passion behind those policies, we could have a proactive strategy in this context, instead of a folding-up strategy. I'd love to see that. Rather than resist, I'd like to actually see us get out there and be more assertive.

The Chairman: Mr. Blaikie, if we can move on, Mr. Reed might want to respond to that comment.

Mr. Julian Reed: Initially I'd like to take some exception to the words of Mr. Blaikie. He's suggesting that the government has given up on all this, and if that were the case, we would not be here today and the words of Mr. Marchi would not have been put in print when he appeared before this committee in the first place.

A few things should go on the table right now. First of all, this is the most articulate body we've had, this and our earlier panel this afternoon. I personally thank you for it, because it's of great help to us.

The concept that we're under some rush or pressure is just a little bit of a stretch. Yes, we would like to have an MAI. The talks began in 1995, over two years ago. The negotiations have not yet begun, but the countries involved have put their ideas into the hat to this point. The release of that thing on the Internet last May I don't think did a service to the process at all, because it was interpreted as a fait accompli at that time, and nothing could have been further from the truth.

We may not get an MAI, but let me put this to you. As far as the threat from the U.S. is concerned, the U.S. is a threat regardless of whether there's an MAI or there isn't. With any of the trade agreements or goods and services agreements we have, at least a dispute-resolving mechanism was built into those. That's better for Canada, because of our size and because we don't compete nearly as well in the world jungle as do larger countries, which have the wherewithal and the resources to impose themselves. Even with the NAFTA, we're still getting sticks in the eye on trade from the United States.

So I put it to you that whether we end up with an MAI or we don't, we'll still always have to be vigilant and watchful about our relationship with the elephant. It's a given.

I want to take you away from the cultural aspect to just give you an idea of some of the things that make us positive about the process.

One, there's a concept that multinational corporations are great big companies that have their paws here and there, but the majority of multinationals are small and medium-sized businesses. A few weeks ago I was at a convention of mining exploration companies that's held once every 10 years in Canada. There are 700 mining exploration companies in Canada. Many of them are multinationals and their average employee number is 15. It works both ways, you see.

• 1850

Now I've said all of that and have tried to explain some of the reasons behind Mr. Marchi's assurance that culture will not be put in jeopardy, and you have come along and reinforced that in probably a more articulate manner than any other presenters have to this point. As Mr. Marchi's parliamentary secretary, I'll be taking the strongest possible message back to him that you're with us on this, if you like. You're with me, I'll tell you that. I know if you read the minister's opening statement from this committee's first meeting you'll find it somewhat reassuring.

The question is how to do it and how to do it in the most effective possible way so that the monsters that are there don't do an end run and get us from behind.

I realize I was running away with myself the way Blaikie does—

Some hon. members: Oh, oh.

Mr. Julian Reed: —and it's not right. I thank you. You've given us direction.

Mr. Jack Stoddart: If I could just comment on this, I think that in most industries dispute resolution, etc., is fine, but I don't know how you resolve the culture of a country and the industries within it. I think if no other message goes back to Mr. Marchi, that's the bottom line: how do you negotiate what your country is? And that's not just the industries. We are businesses and artists, etc. I'm sure you have everybody coming here and saying, “We're different, folks, treat us differently.” But I'm saying that this is the one area that is really fundamentally quite different.

At least on my part—I won't speak for everybody—I don't think it's a lack of trust of the Liberal senior ministers on this issue. It's not that they don't expect to protect culture. I think the intent is there, but it is so essential that we get it on the table and get that written part that I would really call for a small subcommittee of some kind from the cultural industries and creators to be convened with the senior people from the negotiators or whoever so that we can try to get some wording and balance that Canada can take forward to the rest of the world and the rest of the OECD members and say, “This is where we're coming from, folks, and this is our bottom line.” Because if we don't say “bottom line” soon, in real words, we're going to get a very soft answer coming back.

I don't think it's a lack of commitment. As far as the time is concerned, the process may have been going on for three years, but nobody could get hold of anything until not very long ago. As I understand it, April 1998 is set for the last negotiations. So from our point of view, there is a little timeframe involved in that.

The Chairman: Mr. Spurgeon, very briefly.

Mr. Paul Spurgeon: There's a direction to go in with Minister Marchi. Let me quote Minister Eggleton. When he was the minister of this area he said it was a “myth” that the cultural exemption under NAFTA actually offered protection to Canadian cultural producers. He said “We don't have any cultural protections under NAFTA. That's a myth. We never did.”

If we accept that as the truth—and I think he's right—then we should look at ways of ensuring that the language is good enough for what Minister Marchi says he's going to do, which is to make sure culture is not on the table, so that there is indeed cultural protection. I think that's the best advice or direction.

A voice: I hear you.

The Chairman: Thank you.

Mr. Crawley, before we move on, I'm not sure who you were referring to in terms of getting out and promoting Canadian television and cinema. I just want to bring something to your attention.

• 1855

Yesterday I was chairing a meeting with the high commissioner and the deputy prime minister of the Bahamas, and the Minister of Heritage walked by, walked in, sat down, and tried to get a bilateral deal with them on cinema. In fact, she says she's going to follow it up because she had just come back from Italy, signing another bilateral deal in that area. She took over the whole meeting and talked about that, so I'm sure she's out there putting these things together.

Mr. Sandy Crawley: That's certainly part of it. That's very heartening to hear. But when I'm talking about the third pillar, it reveals to me that you don't know what I'm talking about. This was greatly celebrated when this policy initiative was announced not by the current government but the one before, which was the same party, if you know what I mean. It was a very visionary strategy. It wasn't just making bilateral deals, although that would certainly be part of it, but it was looking out and using culture as an ambassador in the ways that we know but also in modern ways.

It was actually a foundation for our public service and our political leadership to consider the policy and consider a way of looking out at the world, having an expansive view instead of a reactive view of the world, and I'm afraid we're still in a reactive mode. It was a wonderful effort at policy development. Now let's put some flesh on that bone or admit that we've abandoned it, one or the other.

It's the third pillar. Ask somebody. I'm sure somewhere you have it.

The Chairman: Thank you, Mr. Crawley.

I'm sure Ms. Bulte could talk to that, but first Mr. McKay, and then briefly to Ms. Tremblay, and then briefly to Ms. Bulte.

Mr. John McKay: Thank you, Mr. Chairman. I'm greatly attracted to Ms. Simonds' definition here of a “right of a nation to hear itself think”. I think it's quite elegant and well phrased. Unfortunately, it also presents the conundrum of the committee, namely, how to reduce a cultural definition into legalese and in effect reduce culture to an industrial concept. As much as I would be attracted to putting that in, I don't think it's going to go.

So I want to turn to the SOCAN-proposed cultural exemption on page 14 and question them on two points, the first point being that you said you thought this was an improved definition over the French proposal.

The second question relates to the broad language through which one could reasonably drive almost any truck, using the six tests, including: technology neutral; can't be subject to any attack or retaliation; forms part of all agreements; and a self-judging model. Those are, according to yourselves, very broad-based exemptions.

My second question is, by doing that, from what do we cut ourselves off? Does Mr. Mayson lose access to financial funding that might otherwise be available to him for his films? Does Mr. Stoddart lose access for building a publishing business, for instance, by virtue of that? If I were a foreign investor looking at investing in Canada and these were things I would be faced with, am I going to be inhibited?

Am I going to be cut off in some manner from the investments, which will have almost a self-defeating result?

Mr. Paul Spurgeon: Is that directed at me?

Mr. John McKay: Yes, it was initially, but I'm sure everybody else will want to jump in on it.

Mr. Paul Spurgeon: First of all, on the French proposal, if I can deal with these questions in the order in which you've raised them, they're going in the right direction, but unfortunately, as you might have said, or someone else said too, you can drive a truck through it. I think if you look at page 12 of our brief you'll see why. It's really quite vague language: “in the framework of policies designed to preserve and promote cultural and linguistic diversity”. I don't know what that means. Certainly people can take different views, and lawyers will be lawyers and you'll find different interpretations.

• 1900

It certainly is limited. It only applies to measures designed to preserve and promote two purposes—cultural diversity and linguistic diversity, however those may be defined by a lawyer.

Finally, it's definitely not self-judging. The last part of the provision says, “designed to preserve and promote”. Some other country could say “Well, we believe it was designed or wasn't designed”, or whatever. They're going to say “You're not the one telling us. We're going to tell you.”

Mr. John McKay: Your definition is even broader. You're going with any action or any measure. In some respects, your truck is even bigger.

Mr. Paul Spurgeon: Again, you're quite right. It starts at the bottom of page 14—nothing in this agreement can prevent Canada from making any law or doing a reg that it considers necessary to promote its cultural industries. For example, Canadian content—that would be a regulation that we considered necessary.

What is a cultural industry? Now, that's perhaps where we can get into the fine—

Mr. John McKay: Do you need to use the word “industry”? I suppose that's another word....

Mr. Paul Spurgeon: Good point. I guess within the framework of MAI that is an appropriate moniker. Certainly we don't mean to exclude individuals who might create works. When I say works, I mean intellectual property works—songs, books—so I'm referring to their authors, obviously. That is where it all begins. It begins with the creator.

Mr. John McKay: Creative people. That's right.

Mr. Paul Spurgeon: I didn't, by any means, want to exclude those people.

Mr. John McKay: In some respects we've got sort of a working irony here. The people who, as I hear them, feel they need the most protection are the most vulnerable of the artists. If you go up the feeding chain, the less protection is needed for those who are able to take care of themselves, thank you very much, i.e., the Conrad Blacks of this world and various other people who are doing very nicely selling cultural industry.

Mr. Paul Spurgeon: Canadian cultural industries, because of regulations we have in this country, like the Canadian content regulations and other measures we have had introduced over the years that some very far-sighted people saw were necessary at the time—those are the things we're talking about.

Obviously when a creator creates a work, the next thing he or she wants is for other Canadians, as was said, to hear his or her expression, and that's the most important thing. So these things—which are regulated, which can have laws, measures, or whatever affect them—are the things that will be the vehicle to allow the expression to be heard by his or her fellow Canadians.

I think that's a direction we are taking here. I'm not saying this is necessarily the best direction. It certainly is one where we see an effective way of ensuring—if we want to. I mean, obviously it says here “which we, Canada, consider necessary”. If we consider something not to be necessary, then we won't do it.

The Chairman: I want to let Ms. Simonds have a say. But first, I'm a bit unclear. Isn't this somewhat limiting? Would this allow something like the Internet, something we never knew was going to be there, you know, so big, five or six years ago?

Mr. Paul Spurgeon: That's an excellent question. As you know, the Government of Canada has completed studies on the information highway on their Information Highway Advisory Council and has made some recommendations about how we are going to handle the problem of Canada's culture in the new environment.

But this definition, if you look at it, introduces a new word, among others, which was not in the NAFTA definition, and that is the phrase “communication by telecommunication”. We have borrowed that term from the Copyright Act.

I don't want to get too technical here, but it really includes anything, including the Internet. The Internet is a transmission or a reception of signs, signals, writing, images or sounds—intelligence of any nature. It's as simple as that. Is it wire, radio, visual, optical or other electromagnetic...? It could be anything. It could be satellite, it could be the telephone line.

We're looking at a very technology neutral provision, as the Copyright Act does too, I should say. That's my area of expertise. The Copyright Act has endeavoured to create legislation that is what we call “technology neutral”.

• 1905

Mr. John McKay: But are you also prepared for the reciprocity that this would necessarily entail?

Mr. Paul Spurgeon: Reciprocity in what sense?

Mr. John McKay: I would assume that if we negotiated to have this in the agreement, then presumably a number of other countries, possibly even the United States, would also negotiate for this kind of thing.

Mr. Paul Spurgeon: That's possible. I haven't seen that in their package of requests. Certainly these kinds of provisions would allow Canada to ensure.... I don't think the intent here to is exclude foreign copyrights. That's not the intention.

Mr. Brison said he enjoys reading, on Sunday, his New York Times, as I do, but he also enjoys reading Maclean's and subscribes to it, as I do, among other Canadian publications.

We have to make sure that we give that choice to Canadians. Most countries, including ours, do not want to exclude the cultural products of other countries, but they also want to give some expression to the ones their nationals create. That's what we're trying to do about this.

The Chairman: Thank you.

Ms. Simonds has been patient. She has been wanting to jump in here.

Ms. Merilyn Simonds: I just wanted to actually address the French wording, which I think is extremely problematic. I'm not sure whether it's a translation issue actually or a problem inherent in the wording of the exemption.

“Cultural diversity” in English and in Canada has a very specific meaning. These are policies that were enacted to address the relationship between minority and majority cultures. It's a very specific body of legislation. So the way that exemption is worded, it only applies to our policies on multiculturalism and bilingualism. Everything else is up for grabs.

If you read that closely, it's very badly worded. Maybe in the French.... I talked to translators about it, but I haven't been able to get a clear notion of it. Perhaps “diversity of cultures” means something different from “cultural diversity”. In any case, you can see the problems of that particular exemption. It just won't do it for us.

[Translation]

Ms. Suzanne Tremblay: First off, the Bloc provided a list of 22 groups or people, 10 of whom were from Quebec. Of those ten, two were invited to this committee but they were not available and none of the other eight had been considered. So we did make an effort to get some Quebeckers to the table, but it didn't work out.

Does your...

[English]

The Chairman: To be fair, our researchers put together a list based on national institutions that represented all parts of the country, including Quebec. That was the purpose of it.

Ms. Suzanne Tremblay: Okay. I'm not criticizing.

The Chairman: We also encouraged all groups at the time to bring representatives from Quebec with them to sit at the table with them. That was these national institutions.

[Translation]

Ms. Suzanne Tremblay: My question was for SOCAN. Did you test your proposal with the stakeholders? Do the others want this? Do the others really agree with what you've said or are you the only one in step?

Mr. François Cousineau: I get the impression that this is a natural consensus, if you don't mind my expressing it like that. You are talking about Quebec?

Ms. Suzanne Tremblay: All across Canada, writers, television people, are they in agreement with you? And if that, for example, were to be the Canadian government's bargaining position, would all groups of stakeholders from coast to coast be in agreement with you? Have you tried this out on the others?

[English]

Mr. Jack Stoddart: We haven't seen it, but I think there's the issue of the industries and the creators working together with government so that we can come up with the wording that will work. I don't have any doubt about whether it will be this or something else. If you try to leave it to the bureaucrats drafting the thing on this without a clear understanding of what we're trying to accomplish, then with due respect, unless you work in some industries, you can't understand them. I don't mean that in any way except that it's true.

A voice: Yes, I would agree. Can I—

The Chairman: Mr. Henderson first.

Mr. Bill Henderson: I just wanted to respond to that for a moment.

• 1910

As has been said, this language hasn't been passed around very much, but I think I can speak for songwriters. Generally, they would be in support of this kind of thing.

Also, I would just like to say, in answer to a previous query about retaliation if this kind of clause, cultural exemption, went through, that there are countries all around the world that have cultural protections now, so it's not uncommon for that to exist. Of course you know that.

The United States doesn't need it. The globalization of culture has been called the Americanization of culture, because they have the powerful culture.

In terms of retaliation, I don't know exactly what you mean, but if it means instituting protections, I don't think that's a problem. It's been difficult for Canadians to deal with powerful American cultures over the last—whatever—30 years that we've really been trying to make headway. I've been doing it that long and have spent a lot of time doing it, and I had to go to the United States to make an impression, to get involved.

Now, because of the kind of support that Canada started giving artists in the 1970s, with the Canadian content, you have a situation where a band can actually get on the airwaves in Canada, make a living in Canada, and not have to worry about the States. The Tragically Hip is a great example of that. That couldn't have happened 25 years ago.

So Canadians have supported themselves and allowed this kind of thing to flourish, and I think the success of Canadians in the world that we're seeing nowadays speaks for the power and the good that has been done with the support that's been given.

Mr. Guy Mayson: I just wanted to add that we haven't seen a definition either, and we would want to be very careful about the wording of any definition. We are very interested in being involved in any kind of ongoing process in that area. So there is certainly no endorsement here from the producers' association about a specific wording.

Ms. Sarmite Bulte: I have just a quick question on Mr. Crawley's comment on whether the third pillar has been lost.

I understand that at the end of the last session of Parliament the heritage committee was working on trying to define a cultural policy. I believe a number of organizations had submitted briefs in that respect, and then the government was dissolved.

That has been recreated and that is now a top priority.

Again, if you want to make representations there, I would suggest that you get to the clerk of the heritage committee, because this now is going to be the priority of the heritage committee, which Madame Tremblay and I sit on, as does Ms. Lill.

Mr. Alexander Mair: I just want to reinforce something Merilyn said earlier, and it ties in with your question about retaliation.

We're here speaking about Canada. As Merilyn said, every country must have the right to protect their own culture, however you define culture.

Canadian content laws and other support systems in the music industry have been the foundation of similar laws and policies in Australia originally, now in South Africa. Poland has put in a 50% Polish content. France now has a 40% French content. Ireland has a content regulation. More and more countries around the world are moving to the Canadian model, and we cannot throw that away.

I don't call that retaliation, and we are not complaining about what they're doing, which does limit us to some degree, but we get the best of the world's music in this country. Australia is not interested in every Canadian artist; they're interested in the best, and they will get the best. We will not suffer from Australian or Irish content regulations. The best of our artists will be successful.

The Chairman: Colleagues, I want to thank you all.

• 1915

I apologize to Ms. Simonds. We had you on with Mr. Stoddart, as I look down my list.

Ms. Merilyn Simonds: Well, he is my publisher.

The Chairman: Actually, he's a publisher and you're a writer. You snuck on, but that was good. You had a very good presentation.

I want to thank you all for presenting. I do want to remind you that we are doing a report for January. We may want to call on you again if we have any questions. There are a lot of details. As many of you said, this is a very complicated issue. We may want to call on you again if we have some questions with regard to your reports.

We're also encouraging all Canadians who want to make a presentation. It's a lot easier now with e-mail, and much easier today actually than maybe a week ago with e-mail particularly. We want you to send those presentations to us. We will be starting to write the report after our hearings officially end next week. We'll be continuing this through writing a report so the government can have it before they start the negotiations in January.

I want to assure all who spoke about the timing that this committee will continue to follow this issue until it's signed. So we may in the future want to invite you back once again.

Once we know more particularly what's in the agreement.... Right now we seem to be in a stage of negotiations, and while it may be a question that's open for debate, I'm not sure if we as a government would want to put everything on the table now. I'm not sure if that's the best way you negotiate. Maybe the people from Canada Post can tell me; I don't know. I can assure you that we are going to follow through with this until it's signed.

We're now adjourned until next Monday.

The meeting is adjourned.