CHER Committee Meeting

STANDING COMMITTEE ON CANADIAN HERITAGE

COMITÉ PERMANENT DU PATRIMOINE CANADIEN

EVIDENCE

[Recorded by Electronic Apparatus]

Wednesday, November 26, 1997

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[Translation]

The Chairman (Mr. Clifford Lincoln (Lac-Saint-Louis, Lib.)): I am calling to order this meeting of the Standing Committee on Canadian Heritage. Pursuant to Standing Order 108(2), we are considering Canadian culture.

[English]

We are going to hear today from a witness from the Department of Foreign Affairs and International Trade, Mr. John Gero, Director General of Trade Policy Bureau. Mr. Gero, it's all yours.

Mr. John Gero (Director General, Trade Policy Bureau, Services, Investment and Intellectual Property, Department of Foreign Affairs and International Trade): Thank you. Mr. Chairman, honourable members, let me begin by thanking you for inviting me to appear before the House of Commons Standing Committee on Canadian Heritage.

I'm pleased you're examining the subject of international trade agreements as part of your ongoing study of the role of government in supporting culture in Canada. This is an important and timely issue. The linkages between Canada's domestic cultural policy and our international trade and investment obligations are highly visible and sometimes controversial. It is my belief that every effort should be made to promote a clear understanding of where Canada's framework of trade and investment policies fits within our cultural policies.

As you all know, Canadian culture is much more than the production and distribution of content and programming originating in Canada. Canadian culture is also shared Canadian perceptions and beliefs, common experiences and values. Culture defines Canada's diverse linguistic and cultural identities within the increasingly global international environment.

In this regard, Mr. Chairman, I understand that the standing committee has expressed a particular interest in three general areas: Canada's existing cultural exemptions in international trade agreements; recent rulings of the World Trade Organization's dispute settlement body; and the potential Multilateral Agreement on Investment. I will briefly address each of these topics in general terms. Then we can pursue more detailed questions as you wish.

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Let me begin by providing an overview of the exemptions for Canadian cultural products and services found in Canada's primary trade agreements, with a view to shedding some light on their scope and limitations. The Canadian government has long recognized the fact that a stable and open rule-based multilateral trading system is an important facet of our national interest. Successive Canadian governments have sought secure and predictable market access for goods and services, as well as the protection of international investments through a series of international agreements.

At the same time, governments have always recognized that culture is more than simple goods and services. The concept of culture as a public good is an important factor to consider. Canadian cultural policy has therefore always focused on ensuring that Canadian creators have access to Canadians. The negotiation of exemptions for culture has therefore always been a fundamental component of Canada's approach to bilateral and multilateral trade and investment agreements.

Our approach is to ensure that Canada retains the sovereign right to maintain and adopt cultural policies without being in breach of international disciplines. This approach is reflected in the Canada-United States Free Trade Agreement, the North American Free Trade Agreement, the General Agreement on Trade in Services, as well as Canada's bilateral free trade agreements with Israel and Chile.

The first example of Canada's cultural exemptions approach originated with the Canada-United States FTA. Canadian negotiators exempted cultural issues from most substantive disciplines. For example, the services chapter of the FTA does not include cultural service issues. In addition, to ensure a carve-out, article 2005 of this agreement provides that cultural industries are exempt from the provisions of the agreement. While it is true that the United States may take measures of equivalent commercial effect in response to actions that would have been inconsistent with the agreement but for the cultural exemption, it should be noted that there are only limited areas where Canadian policies would be inconsistent. An increase in the custom's tariff in a particular cultural product, for example, would be one such case.

The cultural exemption approach that was established under the free trade agreement was carried over to NAFTA. Annex 2106 of NAFTA provides that any measure adopted or maintained with respect to cultural industries would be governed exclusively in accordance with the provisions of the free trade agreement. As a result, the need for a cultural exemption is not its inconsistency with the broader NAFTA provisions but those of a more limited free trade agreement.

With regard to the General Agreement on Trade in Services, the opt-in and opt-out drafting of the agreement allows Canada and other members to exclude certain measures from GATS' disciplines. Members are free to exempt certain service sectors from the most-favoured nation requirement. Canada, for example, has done so for its film and television co-production agreements. Members were also able to choose which of their service sectors will be subject to national treatment. Canada has not included any cultural sectors in its schedule of commitments.

The Investment Canada Act, which is one of the means of implementing some cultural policy measures, was also listed in exemption, thus excluding it from all relevant parts of the agreement. Canada's principal GATS commitments in the cultural sector are therefore limited to the requirement of publishing all relevant measures for transparency purposes.

In general, the cultural exemptions approach to international trade agreements has shielded many measures from international legal challenge. It does not, however, shield the sector from unilateral actions. For example, in the Country Music Television case, despite the fact that the United States had no recourse to any international agreement, it nevertheless exerted some pressure on the Canadian government to change the situation. In addition, as was demonstrated by the magazine case, legal vulnerabilities may arise from the uncertain distinction between the rights and obligations concerning goods and those related to services. Any cultural policy measure found to have an effect on a goods-related aspect of an industry may be susceptible to challenge according to the more stringent 50-year-old international disciplines of the GATT applying to trade and goods.

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[Translation]

In that context, Mr. Chairman, let me turn to the subject of recent WTO decisions and their effect on the Canadian magazine industry, as well as any inherent repercussions for other Canadian cultural products and services in general.

As I have just described, Canada's trade agreements are either limited in application or contain cultural exemptions that afford Canada a degree of latitude in pursuing cultural policies. Nonetheless, the possibility of international legal challenge by Canada's trading partners remains, especially in the area of cultural products. The WTO panel ruling on magazines demonstrates how market access constraints for cultural goods may be found to be inconsistent with Canada's international obligations.

In March 1996, the United States challenged four aspects of Canada's periodical policy, some aspects of which had been in place for 30 years: the prohibition on the importation of split-run magazines into Canada; the 80 % excise tax on advertising in split- run magazines; Canada Post's lower postal rates for domestic periodicals; and Canadian Heritage's postal subsidy paid to Canadian publishers. Following appeals, Canada was found to be in breach of its obligations regarding all four measures.

This ruling reflects the increasingly complex relationship between international trade disciplines and cultural industries. Canada's defence in the magazine case was based on the contention that the excise tax was a measure with respect to services, i.e. advertising, and thus was exempt from Canada's GATT commitments. However, the appeal body ruled that the GATT rules for trade and goods should apply also to services when those services directly or indirectly affect trade and goods (in this case, magazines).

The challenge is thus to find the means of ensuring that Canadians continue to have access to Canadian magazines, in a manner consistent with our multilateral commitments. We have reported to the WTO that we will implement the decision within 15 months. The Department of Canadian Heritage, and other government departments, are working to develop alternate measures to achieve the Canadian policy objective.

The WTO decision was not a ruling on the protection of culture in general. Rather, it dealt with specific measures pertaining to periodicals and magazines. In its concluding remarks, the panel stressed that "the ability of any member to take measures to protect its cultural identity was not an issue in the present case".

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In general, during the last decade, we have negotiated cultural exemptions which have, to a large extent, shielded Canadian cultural policies from international rules.

They have not shielded Canada from unilateral U.S. actions as in the Country Music Television case, nor from the application of 50-year-old rules on trade and goods. It is also interesting to note that while the United States continually complains about our cultural policies, they have truly challenged these policies only in the context where they have felt existing rights or assets were being, from their perspective, taken from them.

[English]

Let me now turn to the third area in which this committee has expressed an interest, the Multilateral Agreement on Investment. I've been asked to provide an overview of the possible implications of the potential the MAI may have for Canadian cultural industries.

Canadian negotiators have been instructed to preserve Canada's ability to maintain and introduce any investment measure deemed necessary to promote Canadian culture. To quote from an address by the Honourable Sergio Marchi, Minister for International Trade, to the Standing Committee on Foreign Affairs and International Trade:

We will retain the right to enact laws in all areas...we will still be able to impose restrictions on foreign investment in sectors—like culture, health care and education—that we believe require a uniquely Canadian approach.... As in the NAFTA, Canada will not accept any general commitment to freeze (the so-called “standstill”) or phase-out (“rollback”) restrictions on foreign investment. Canada will retain the flexibility to carry our public policy in core areas of national interest.

Canada fully supports the concept of a total exemption for cultural industries. A general exemption would protect cultural industries from the disciplines covered by the agreement. Such an exemption would make it clear that any contracting party is free to take any measure to regulate investment of foreign companies and the conditions of activity of these companies in the cultural sector.

The same protection of cultural industries could also be achieved through the adoption of a country-specific reservation. Our current draft reservations are clearly premised on the existence of a general exemption for cultural industries and tax measures. If such general exceptions are not part of the final agreement, then Canada will achieve a cultural carve-out via our national reservations.

The committee also expressed an interest in the impact this agreement may have on the existing protections granted Canadian cultural industries under the Investment Canada Act. The act was exempted in the NAFTA and the GATS and the same will be done under the MAI. In fact, the Investment Canada Act will be doubly protected based on specific exemptions for the act itself, as well as any cultural carve-out.

Having discussed several of the areas of interest pertaining to international trade agreements and Canadian culture in general terms, I would now be pleased to respond to questions and provide further information as requested by your committee. Thank you.

The Chairman: Thank you, Mr. Gero, for your very clear exposé on a very important subject to us.

I'd like to turn over the questions to Mr. Abbot.

Mr. Jim Abbott (Kootenay—Columbia, Ref.): Thank you very much for your explanation. Unfortunately, when I run into a paragraph full of 75¢ words instead of 25¢ words I have a little difficulty. I'm looking particularly at the paragraph at the bottom of page 4 and I wonder if you could expand on it. I'll read it and see if I understand it, but I find it very confusing.

The same protection of cultural industries could also be achieved through the adoption of a country specific reservation.

I'll continue, but as my first question, is the government thinking of the U.S. and specifying the U.S. in that?

Carrying on it says:

Our current draft reservations are clearly premised on the existence of a general exception for cultural industries and tax measures.

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Are they not currently under attack as discussed in your presentation vis-à-vis the split run and other things?

The final sentence is:

If such general exceptions are not a part of the final agreement, then Canada will achieve a cultural carve-out via our national reservations.

I'm sorry. I must be awfully slow, but I don't have a clue as to what that last sentence means.

Mr. John Gero: Okay. Well, maybe I should try to explain it in a little bit more detail. I apologize for the shorthand.

The way the Multilateral Agreement on Investment is set up, it has a number of general obligations, such as national treatment. If we, from our purposes, want to make sure that Canada can maintain the ability to do what it wishes to do in the cultural industries, including for example to discriminate, then we have to make sure that obligation does not apply to the cultural industries.

Mr. Jim Abbott: Sorry. Say that again.

Mr. John Gero: One of the obligations of the multilateral agreement is what's called national treatment, which is that you have to treat a foreign investor in the same way as a domestic investor.

Mr. Jim Abbott: Right.

Mr. John Gero: That would be the general obligation in the multilateral agreement.

Mr. Jim Abbott: Right.

Mr. John Gero: In the context of cultural industries, we do not want to take such an obligation on, because clearly in a Canadian context we wish to reserve to ourselves the ability to not provide national treatment; that is, to discriminate between Canadian investors and foreign investors. We do that in a number of contexts, and so do a number of other countries.

For example, in the broadcasting field there are restrictions on foreign ownership for broadcasters. To be able therefore not to have an obligation on national treatment, one has then to create an exception. There are two ways of creating an exception.

The first one is to say that the agreement itself will create a general exception that will apply to everybody, which says, nothing in this agreement affects cultural industries. Then it applies to every signatory of the agreement. In essence, you've taken the whole cultural industries sector and taken it right out of the agreement; there are no obligations.

This is a proposal that was made by France. It was fully supported by Canada, and that's the current proposal that's on the table in the context of Paris: that there be a general exception.

There is a second way of achieving the same thing, from a Canadian perspective. It is that, even if there isn't a general exception, because, let's say, it doesn't get negotiated because there are countries that are opposed to carving all of cultural industries out of the disciplines of the multilateral agreement, one could achieve the same thing for Canada by saying that as far as Canada is concerned cultural industries are not covered in this agreement; that is, Canada takes no obligations vis-à-vis cultural industries in this agreement.

We have therefore what's called a national reservation, or a country-specific reservation, which says that for Canada only—this context—these disciplines in the multilateral agreement on investment do not apply to cultural industries as far as Canada is concerned.

Both would achieve exactly the same thing, which is in essence that from a Canadian perspective, which is what we're concerned about, it leaves totally unfettered the ability of the Canadian government to act in a manner that would be inconsistent with the multilateral agreement on investment.

Mr. Jim Abbott: But if the U.S. clearly does not recognize, by way of only one example, the magazine industry as being a cultural industry....

Canadians call it a cultural industry, and we were trying to protect it under the split-runs provision, which has now been trashed by the WTO.

Under the MAI, with the WTO having ruled against Canada's position on the split runs vis-à-vis the magazine industry, how can...? I'm not necessarily advocating protection; I am simply trying to understand how it is proposed that there would be this protection. Is it realistic actually to expect that there could be the protection?

If, in the case of the United States publishers, they do not recognize the magazine industry as a cultural industry, what about the ownership of the magazine industry, which is where the MAI fits?

If they say, “Sorry, Maclean Hunter also owns this and owns that and owns everything else and we're now going to buy a controlling interest in Maclean Hunter, and we invoke this national treatment”, what provisions will stop them? I'm just questioning.

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This paragraph leaves us with one impression, and I'm not really sure this impression is a correct impression, with all due respect.

Mr. John Gero: Let me take you through several things. The United States does not dispute that magazines are a cultural industry. In fact, they have agreed to a definition of cultural industries in NAFTA that clearly define magazines as a cultural industry.

In the context of the magazine case, they looked at what kind of international obligations Canada had and they looked at NAFTA and saw that they were cultural industries because they are part of the definition. They didn't dispute that. They couldn't take us to a NAFTA panel, because clearly cultural industries are exempt from NAFTA so they had no recourse there.

They looked in the context of the General Agreement on Trade in Services and asked, are there any limitations on Canada in the context of the General Agreement on Trade in Services, which was recently negotiated as part of the Uruguay Round? They saw that Canada took no obligations for national treatment in the context of its obligations in the GATT and therefore they couldn't take us under that either.

What they found was that since magazines could be classified as a good, totally aside from whether it was a cultural industry, and since the 50 years of GATT had a national treatment provision in that provision, they then took the provisions vis-à-vis magazines and said, the only place we have the ability to challenge that provision is in the context of trade in goods and national treatment related to trade in goods. Because that treaty has been around for 50 years, there is no cultural exemption in the GATT as such regarding trade in goods. Therefore they had that lever.

In the Country Music Television example, they didn't even have that lever. They couldn't take it to NAFTA because there were no disciplines in NAFTA. They couldn't take it to GATT because there were no disciplines on services. It was broadcasting issue, so they had no recourse in the GATT either because it wasn't a good. So in essence, in that context, they then decided to exert unilateral pressure. They didn't contest that we were illegally acting under any of our international obligations.

When it goes to the MAI, which will deal, as you rightly said, only with investment, not with either the trade in goods or in services, to the extent that one has a similar kind of carve-out to what NAFTA has, which says these provisions do not apply to cultural industries, then it's carved out from that agreement as well, Therefore, Canada would not be found to be inconsistent with our obligations in the MAI if either kind of exemption existed; that is, a general exception, which takes all of cultural industries totally out of the agreement, or Canada has specified in that agreement that as far as Canada is concerned these obligations don't apply to....

Mr. Jim Abbott: I have a final question. In the first sentence here, “could also be achieved through the adoption of a country specific reservation”, is there any thought that this country-specific—remember I asked the question originally—would be the U.S., because they are the people who are creating the greatest cultural problem for us? Australia, Germany, France, and Britain are not creating the problem; the U.S. is creating the problem. Is there some direction that this sentence could be interpreted as referring specifically to the U.S.?

Mr. John Gero: It refers to every member of MAI, including the United States, but what we say in our reservation is that as far as Canada is concerned, for the Canadian government, we do not take on any obligations in this regard vis-à-vis cultural industries, which means vis-à-vis the 29 countries that are signatories to that agreement, whether it be the United States, the United Kingdom, Germany, or Japan. They can't come and say, “Something you're doing, Canada, is inconsistent with the obligations you undertook in the MAI”. So the country-specific reservation is Canadian specific. That is, the Canadian government has a specific exemption that says, as far as Canada is concerned we are not taking any obligations on as it relates to cultural industries.

[Translation]

Ms. Tremblay.

Ms. Suzanne Tremblay (Rimouski—Mitis, BQ): Thank you for your presentation, Mr. Gero.

We received this brick this very noon. I haven't really had time to get through the whole thing. Could you tell me if there's a document anywhere that could give me a clear, clean and specific idea of each one of these agreements.

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You have some things in the FTA, others in NAFTA, others still in GATT and even others in the WTO and they're all different things. I'd like someone to draw up a comparative list of all these things. I'd like to be told this is beneficial, this is stronger, this isn't as good and this is better.

Quite honestly, I get the impression, unless I'm mistaken— which I would love to be but it seems to me that I'm not—that the Americans will always find some flaws, to be right and get what they want.

Would it be possible that some day we could actually live the kind of life we want without having everything imposed on us by them? Is that possible?

[English]

Mr. John Gero: I certainly hope so.

Unfortunately, we did not provide you with the text of the GATT or the GATS or the NAFTA. We presumed you had access to that, but if you'd like we can certainly table—

[Translation]

Ms. Suzanne Tremblay: No. I'd like something for comparison purposes.

[English]

Mr. John Gero: If you would like, I could certainly undertake to provide to the committee the text of each of those agreements as they relate to culture.

You have to recognize that it's different in each of the agreements.

In the NAFTA and the FTA there is a specific text on culture, because it is a general obligation, which requires an exemption, and therefore the exemption had to be clearly spelled out.

In the GATT, the national treatment obligation applies only to those sectors that have been notified by the countries. In Canada's case, we never notified any cultural industry or cultural services sector as such. So there isn't a specific text in the context of the GATT, except that if one reads through the Canadian obligations as to which sectors they would apply national treatment, none of the cultural industry sectors are there. So in that context, there isn't anything.

In the context of the MAI, what exists at the moment is a French text for a general exemption, because again, the MAI, like the NAFTA, is a general agreement and to be exempt from the general provisions one has to create an exemption.

So we can certainly make those texts available to you.

To answer your second question, I think we have been quite successful in the last couple of decades in carving out the cultural industry sector from international obligations. We did it in the FTA, in NAFTA, and in the GATS, and we're attempting to do so in the MAI.

It is true that in the context of magazines, the Americans have found, as you would call it, a hole in the context; there was a 50-year-old agreement on trading goods that had provisions that didn't have a cultural exemption.

So that's correct, but in the context of services and investment, we've managed quite successfully to create that barrier. Even if you create those exemptions, however—and I think this is a very important point to make—what the exemptions do is say there are no rules. What that means is not only are there no rules for us, but there are no rules for our partners either, which means that in essence you're living in a vacuum. It doesn't stop a situation like Country Music Television, where they do not have an international agreement that they could claim we are inconsistent with.

Of course any sovereign country, if they don't like what another sovereign country does, if there are no rules, if there's a vacuum, can complain about that factor. The question then becomes, in an area where we didn't have rules, for example, basic telecommunications, we've now negotiated some rules. Those rules, for example, safeguarded the ability of Canada to have foreign investment restrictions in the area of basic telecommunications. Those are now set in concrete in the rules in the agreement on basic telecommunications. As a result, the United States can't complain that they don't like our foreign investment rules in basic telecommunications. They were all there; they're now entrenched in international rules.

So at some point, I guess, the question will arise as to whether a general exemption—that is, no rules—is better than having some rules in this sector as well.

[Translation]

Ms. Suzanne Tremblay: At another committee where I was last week, we were told we shouldn't support the French text of the MAI. Apparently it's ambiguous and doesn't protect in any way the people of Canada for our Canadian cultural industries.

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On the other hand, SOCAN tabled a very concrete proposal which is a project for cultural exemption. Have you had the opportunity to examine SOCAN's proposal and what do you think of it?

[English]

Mr. John Gero: Two things. One, I think it's correct that what we have supported is not the French text but the French concept, which is that we think there should be a general exemption for cultural industries.

We had a number of discussions with cultural industries, and I think we all agree that the French text would need to be amended in a number of ways to bring it up to the standard that we would like to see for a general exemption. We have had discussions not only with SOCAN, but with a number of other cultural groups in that regard. We're talking about the text not only for a general exemption, but also a country-specific exemption as well.

With regard to the specific SOCAN text, we've had a number of discussions since they tabled that text. They recognize that there are a number of problems even with their text.

Let me give you one example. What we all agree on and what we would like to have is a general exemption that's self-judging. That is, we would say that in terms of being culturally exempt from the MAI, we'll decide what culture is.

If that's our objective, if we do as SOCAN did in their draft and then have a second paragraph that says this is the definition of cultural industries, then at that point this becomes a limitation because it puts restrictions on what you can define as culture. If it truly is self-judging, then one shouldn't need the definition, because it's in the eye of the beholder and each country for itself will decide what it is.

In subsequent discussions with us, they recognized that. They agree that, for example, if one's going for a general exemption, it may be better to go strictly with their first paragraph rather than both their paragraphs. So this is an ongoing discussion.

For example, I had a meeting yesterday. The Minister for International Trade has a sectoral advisory group on arts and culture, which had a meeting yesterday. We spent a number of hours going through the MAI and the text and ideas in that regard. That will continue.

Because the negotiations, obviously when they enter a critical phase, will be relatively fast moving, we're attempting to establish a process of communication with a number of cultural groups to make sure that as the text develops—even the French text will undergo a myriad of changes through the negotiations—the cultural industry groups are satisfied with the text as it may develop over the next four or five months.

[Translation]

Ms. Suzanne Tremblay: Here is my last question. How long do you have to settle this MAI matter? What's the deadline?

[English]

Mr. John Gero: The deadline for the MAI is May 1998.

The Chairman: We'll turn now to Mrs. Lill.

Ms. Wendy Lill (Dartmouth, NDP): I'm sorry I missed your presentation. I will ask a couple of questions, but you may have answered them. I hope not.

I want a clarification on the words “exemption” and “exception”. I want to know whether under the MAI these are interchangeable expressions. On a legal basis, I need a clear definition of what exemptions and exceptions are. Start with that.

Mr. John Gero: I'm not a lawyer, but let me give you my sort of off-the-cuff answer to that. Exemption and exception are about the same. They usually tend to be referred to in a general context in agreements. That is, an exemption is usually something that's carved out totally from an agreement. It's usually in a general context.

A reservation, as opposed to an exemption or exception, is something that tends to be more specific. In the MAI context, they're country specific. They go into some detail to explain from that country's perspectives what items of the obligation it would reserve.

But the effect, irrespective of which of the two techniques is used, is the same. Legally, whether you have a general exception or a country-specific reservation, the legal result of this is that, as far as Canada is concerned, the obligation of what you've taken a reservation on or what exists as a general exemption does not apply in that context to Canada.

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Ms. Wendy Lill: I've also been reading this SOCAN report, and I'm interested in the idea that cultural sovereignty, as far as SOCAN is concerned, and in terms of this agreement, has to be seen as no less important than the exceptions around such things as security, public order, taxation, balance of payments, and prudential and financial things. Are we working on the MAI agreement with that in mind, that culture is of the same status as, say, national security?

Mr. John Gero: What we're working on in the context of the MAI and the instructions we have from the government is we want to make sure nothing in the MAI fetters the ability of the Canadian government to do what it wants to do in the cultural sector. So what we're looking at is the effect of the MAI and any possible exception or reservation on that, in essence, Canadian bottom line: that we wish to continue to do what we want to do in the cultural sector. I guess we're pursuing it more in that context, a sort of results-oriented basis, which is that we want to make sure the Canadian government can continue to have the policies it wishes to have in the cultural sector.

The Chairman: Mr. Muise.

Mr. Mark Muise (West Nova, PC): Thank you, Mr. Chairman.

First I would like to thank Mr. Gero for his presentation. There are so many questions one could ask, and I don't really know where to start, but I'll start with this one.

Mr. Gero, could you tell us a little more about “country-specific reservation”; what exactly that means and how it applies to culture?

Mr. John Gero: The way top-down agreements work—I'll call them “top-down agreements”—is that a certain number of general principles and general obligations are included, which are then the obligation across the board for all the members of that agreement. In the context of NAFTA it's the 3, in the context of an eventual MAI it would be the 29 countries. In essence what a country is saying is we, the Government of Canada, would agree to these obligations.

What the country-specific reservations do—and they are required by all countries; it's not just a Canadian concept—is that while general principles and general obligations are nice, both the economic and the political realities are such that no country can live across the board with these general obligations. So what the country-specific reservations say is, as far as my country is concerned, that obligation will not apply to us. We like the general obligation of national treatment, for example, that we will treat foreign investors the same as domestic investors and we will do it generally across the board in that regard—except in the Canadian context we won't do that in the context of cultural industries.

So the country-specific reservation says for Canada—and each country has its own list of reservations—the national treatment obligation on treatment of investors will not apply to cultural industries. The United States will have a similar reservation for the United States, which says the national treatment obligation will not apply, for example, to the broadcasting sector, because as you know, the United States has restrictions on foreign investment in the broadcasting sector.

Each country tables a set of reservations that say this or this obligation in the agreement doesn't apply in that context. The package I circulated to you includes all the Canadian reservations we've tabled as the kind of reservations, from a Canadian perspective, we would like to see in the context in the MAI.

The point I wanted to make, and which I made in the context of the reservations, is that at the moment the Canadian reservation list does not include a specific country reservation on culture. The reason it doesn't include that at the moment is that what at the moment is still being negotiated is a general exemption, one that says culture will not be part of this agreement, period, and therefore at that point you don't need a country reservation, because there is no obligation for culture.

If, for example, at the end of the day it has not been possible to achieve a general exception for culture that says for no country in this agreement does culture apply, then at that point Canada, because of the mandate we're working on from the government, will include a reservation for the cultural industries and say, well, it may apply generally, but from a Canadian perspective it's not going to apply to Canada, as far as cultural industries are concerned.

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Mr. Mark Muise: Where I'm going with this is the concern I have in regard to the magazine industry and then going to the WTO and finding a loophole. How confident do you feel that if it's country specific or if it's generally exempt there would still be the possibility that something could happen at that stage?

Mr. John Gero: Absolutely not. If there's an agreement on investment in the MAI that includes either a general exception on culture or a country-specific reservation on culture, at that point those obligations do not apply to Canada vis-à-vis culture. There is no loophole around which the United States or anybody else could try to say that suddenly there are obligations on investment in that regard.

The situation with the magazine case utilized rules that we negotiated 50 years ago in the GATT as it related to trade and goods, when this wasn't as much a consideration as it has become in the last couple of decades. They were forced to use that. For example, they couldn't use any of the NAFTA obligations because in the NAFTA we had a similar carve-out for culture. In essence, they had to find a 50-year-old treaty and use that for magazines.

The Chairman: Very briefly, Mr. Muise.

Mr. Mark Muise: I can ask my question briefly. We'll have to ask the witness if he can answer briefly. I'm wondering how the CRTC's Canadian content regulations for radio and TV would be affected under the MAI's national treatment provisions.

Mr. John Gero: First of all, it wouldn't be affected one way or the other, because if there's a general exemption for culture or a country-specific reservation, that would take care of it. It would apply to all of that.

[Translation]

The Chairman: Mr. Bélanger.

Mr. Mauril Bélanger (Ottawa—Vanier, Lib.): Thank you, Mr. Chairman.

[English]

If you're free to tell us, what status does this general exemption clause currently enjoy in the negotiations? Are you at liberty to discuss the particulars of these negotiations?

Mr. John Gero: I guess I'm not particularly at liberty to discuss the details of the negotiations, but I can tell you where the general exception clause stands.

Basically, a number of countries—at last count, I think it was eight or nine—are fully supportive of a general exception. A majority, however, do not agree with a general exception, but would accept country-specific exceptions.

Mr. Mauril Bélanger: Okay. My second question concerns this country-specific exception or exemption or national reservation, whatever it's called. First, how many countries can invoke one in the same field before things start unravelling? And how many can a country invoke? Can we say we're going to exempt ourselves from cultural matters, from banking issues—which I'd be surprised at, since this is supposed to be an agreement on investments—from agriculture or from natural resources in general? How far can you stretch this thing before a hole forms?

Mr. John Gero: I guess if every country wished to exempt every sector, at that point one would question whether there's some worth to this agreement at all, but I think what the country-specific reservations do is recognize that in every country there are a number of sensitive sectors that those countries will wish to exempt. It happened in the context of NAFTA. If you look at the NAFTA chapters, you will see that there's a set of reservations for all three countries that are about equivalent in length, although I think when I last counted them the largest reservations were in fact the American ones.

Mr. Mauril Bélanger: Of course.

Mr. John Gero: Reservations recognize the reality of the situation. In every country there are sensitive sectors. They will wish to reserve their right to maintain their own policies. And obviously, if every country has a great deal of them, there isn't the critical mass for an agreement.

• 1625

Mr. Mauril Bélanger: If Canada were to say that we're going to have to have a national reservation on culture and invoke a country-specific exemption how is that defined? How do you define the cultural sector? Is it defined in the agreement? If it's not already, will we borrow a definition from somewhere else? Are we at liberty to change that definition in our own country-specific exemption?

Mr. John Gero: If it's our reservation, we define it as we want it. That's one of the discussions we're having with the various cultural groups. In their submission to the House Standing Committee on Foreign Affairs and International Trade, SOCAN has made an attempt to come up with a definition that is largely based on NAFTA, but may make some amendments. But in essence, it's our reservation, so we can define it as we wish.

Mr. Mauril Bélanger: Is there a definition now?

Mr. John Gero: There isn't a definition now because there isn't a country reservation at the moment. There is a definition in NAFTA of what cultural industries are, though.

Mr. Mauril Bélanger: It's not in the MAI.

Mr. John Gero: Not in the MAI, no.

The Chairman: In the second round, I have requests for questions from Mr. Godfrey, Mr. O'Brien, Mr. Abbott, Mr. Mills, and Mrs. Lill.

Mr. Godfrey.

Mr. John Godfrey (Don Valley West, Lib.): It's often assumed that the Americans are the demandeur in this situation and we're very keen on this. In fact, is there any sense that it's possible that they, at the end of the day, might not sign either—not because of fast-track, which I gather doesn't apply here, but just simply because of reservations about sovereignty on their own?

Mr. John Gero: I think it's entirely possible the Americans won't sign, but I don't have a good grasp of it. The procedure for this agreement, according to what they've said publicly, is that this will be treated like a treaty, as all their bilateral investment treaties are treated. A treaty in the United States is required to go through the Senate foreign relations committee under Mr. Helms. It also requires a two-thirds majority approval in the Senate, and that's on the assumption that it doesn't require amendments to U.S. laws. If it requires amendments to U.S. laws—and that's unknown yet, because we don't know the final obligations in the treaty—then it would have to go through the House of Representatives and the Senate.

Since fast-track doesn't apply to it—it wasn't included even in the proposals that were made previously—what that also means is that it's amendable, of course. In other words, it's not just an up or down vote saying they would like the treaty. The ability is there for any Congressman to propose amendments and have it passed in either the House or in the Senate. If it's amended at that point, depending on how it affects U.S. obligations, then it obviously has some effects on the treaty itself.

One of the examples I can give you is a negotiation in the OECD a couple of years ago on shipbuilding and dealing with shipbuilding subsidies—Canada wasn't a member of the shipbuilding committee, so we weren't part of the negotiations, nor were we part of the membership—in which there were certain disciplines on subsidies in the shipbuilding sector and so forth. It was agreed to at the OECD, but it has never gotten through the U.S. Congress, so it has never come into force.

So it is possible, but it's difficult to guess at.

Mr. John Godfrey: In terms of the amount of investment that would be directly covered by the MAI itself, as opposed to our previous agreements, there was $180 billion of foreign investment in Canada in 1996. If you chunk out the part that was already covered by NAFTA and then you chunk out the part that's covered by foreign investment protection agreements—these FIPAs, which are non-OECD—you're just left with the residual from $180 billion. At this stage of the game, how much of that $180 million does the MAI actually cover? Just give me a ballpark.

Mr. John Gero: I really don't have a figure for you. I'm not sure of total investment. What you're asking for is essentially the total investment from OECD countries, not NAFTA countries, and I don't have that number for you. Sorry.

Mr. John Godfrey: That's okay. I'll ask my third question.

Is this 50-year-old GATT rule that starts to convert things from services into goods a real Trojan horse? That is to say, could it be argued that because it seems to be a physical object, a videotape is in fact a good? Could it be argued that a book is a good? Where does the line of convertible services into goods end?

• 1630

Mr. John Gero: Well, broadcasting is clearly not a good. I think a book or a videotape could be considered a good, but then you need to look at the measures. The mere fact that they're goods doesn't necessarily mean they're offside with a GATT obligation. It would have to be that a measure affecting the book or the videotape would actually be in violation of the agreement. The mere fact that certain cultural industries create goods in concrete form—some don't—doesn't necessarily mean that it's going to be outside of GATT rules.

Mr. John Godfrey: You said in your paper that where the Americans seem to be most sensitive is when we're doing something that deals with what they view as an existing asset, such as the country music situation. I'm not quite sure why that would apply to split-run magazines, because this is an old situation.

In the following scenario, where we decided to bring in a film distribution policy that favoured Canadian-owned film producers and the United States decided to retaliate, under either NAFTA or, where we might have an equivalent provision, the MAI, would the United States be free to bring in retaliatory measures of equal commercial value, as it was suggested under the country music situation—bacon, fur coats, maple syrup, all that sort of stuff—precisely because there's a vacuum and there's nothing to prevent them, there's nothing to appeal to that says you can't do that? Would we be under exactly the same situation with this new cultural initiative that we would be under with NAFTA? Is there any form of defence against that kind of action?

Mr. John Gero: You have a number of questions in that, so let me try one at a time.

Magazines were an issue of acquired rights because Sports Illustrated found a loophole in our domestic policies, started publishing, and then, in essence because of the excise tax, had to cease publishing because it no longer....

Now, retaliation. In the context of NAFTA the retaliation provisions on culture apply only to the extent that we do something that would be inconsistent not with the NAFTA provisions but with the provisions of the old free trade agreement. So that's the first very important consideration. The old free trade agreement is a much more limited agreement and therefore has far fewer provisions with which we could be inconsistent. If we're not inconsistent with those provisions, there isn't an ability to retaliate.

Legally, under the agreements the United States can always unilaterally decide they want to exert some kind of pressure totally outside of any international rules. That's always open to them, but legally, in the context of the international agreement, they would have the ability to retaliate only in the context where we were inconsistent with old FTA obligations and found to be so. Then they could retaliate in an equivalent commercial effect—and, yes, in the context of NAFTA they could retaliate in other things then, investment for example.

The MAI is a self-standing agreement, and therefore you cannot waive your international obligations in other contexts because you've got the MAI. So, in the context of the MAI, first of all, they wouldn't be able to retaliate in any cultural sector if we've got either a general exception or a country-specific reservation, because we wouldn't be inconsistent with any obligation that we undertook, because there aren't any.

The second is that if in an example other than culture they found us to be inconsistent, then I guess they could retaliate, but only in the context of the terms of the MAI.

So, in the context of the MAI, because it's a self-standing agreement, it would be only in the context of investment measures, because the MAI doesn't apply to anything else.

Let me just touch on the third issue you raised, which is the film distribution policy and this question of acquired rights.

What needs to be borne in mind is that in the context of acquired rights the first course of action is likely not going to be any kind of international agreement. It will be domestic courts, because under our own domestic laws we have provisions that say that if the government takes property or is presumed to be taking property, then that's challengeable under Canadian domestic law. So in the context of the investment agreements in essence we have that in domestic courts.

• 1635

A number of countries don't have that obviously in the domestic legal system. But in our case, depending on the policies and depending on how it affected acquired rights, there may be a domestic legal case as well. So it's not just an international trade issue or an international obligations issue.

The Chairman: Members, it's 4.35 p.m. We should reserve 10 minutes towards the end for business to be completed.

We have 15 minutes. Would it be agreeable for each person to have one question each?

Mr. Gero, I realize it's a complex subject, but could you keep your answers as brief as possible to give a chance to most people to ask questions?

Mr. O'Brien.

Mr. Pat O'Brien (London—Fanshawe, Lib.): Thank you, Mr. Chairman. I had two questions, but I'll—

The Chairman: Two brief parts.

Mr. Pat O'Brien: I think the first one is very brief.

Thank you for your presentation, Mr. Gero. I was assuming from your remarks that a general exemption would be better or more protection than a country-specific reservation. But then something you said at some point led me to conclude that maybe that's not correct. Can you clarify?

Mr. John Gero: That's right, it's not correct.

Mr. Pat O'Brien: Why isn't it?

Mr. John Gero: Vis-à-vis Canada, they would both result in the same effect, which is that we would have no obligations. So it would have exactly the same effect.

The difference between a general one as opposed to a country-specific one is that a general exemption would then apply to all 29 countries of the MAI, whereas a country-specific exemption applies only to Canada.

Mr. Pat O'Brien: I understand that quite clearly, but then why is not the wider case more protection?

Mr. John Gero: But it isn't a wider case, because in essence the only thing we need to be protected from is that from a Canadian perspective we have no obligations. As to whether France or the United States have obligations, that then has no other effect on whether Canada has obligations.

Mr. Pat O'Brien: That helps.

You mentioned that it's our definition that would be operative. Aren't there lots of opportunities for countries that would quibble with that definition or to what it applies, to challenge us all over the place, probably led by the United States? There's no carte blanche guarantee here against the challenge, really, no matter what we do, is there?

Mr. John Gero: A challenge to that reservation? If there's a country-specific reservation and they thought something we did wasn't covered by the reservation, I guess it could be challenged. That's why we need to make sure that the way we draft the reservation is such that it covers everything we want to cover. I guess around the edges one could always try to argue, which is why we would want to make a country-specific reservation as airtight as one can humanly do so, to make sure it stands up to any challenge. This is why we're working closely with the cultural industries, to make sure they're satisfied that the definition does precisely that if we go towards a country-specific reservation.

The Chairman: Mr. Mills.

Mr. Dennis Mills (Broadview—Greenwood, Lib.): Mr. Gero, that was a great presentation.

Could you hypothesize for me some examples where there might be or there could be some unilateral actions against us? You mentioned in your opening remark that with all of this framework we have no protection from unilateral actions. Hypothesize maybe two or three examples of where something could come at us.

Mr. John Gero: I think unilateral actions would arise largely in the context where we do not have any obligations internationally, and therefore the United States couldn't challenge us in an international context, if you're talking about the United States.

If I could give you an example, I think the closest one to it that's currently in the context is a new copyright legislation, which specifically, in some parts, does not provide certain benefits to U.S. performers, for example, because we've done it on a reciprocal basis. But frankly, we've done that fully consistently with all our international obligations.

It's not covered in NAFTA, first of all, because of the cultural exemption. But we don't even need the cultural exemption because it's the FTA that applies and there are no disciplines in the FTA on intellectual property. So in the context of the North American Free Trade Agreement, there are no disciplines.

• 1640

In the context of the WTO it's the TRIPS agreement that applies, and the TRIPS agreement provisions are such—this was ensured by the various Rome member countries; the Rome Convention is the international convention that deals with what are called “neighbouring rights”; that is, the rights of performers and sound recording producers—that they do not require a national treatment obligation.

So I would say that in that context we have no international obligations. The United States doesn't have the ability to challenge us under any international provisions.

If, on the other hand, they still don't like the fact that our provisions don't provide these provisions to certain American performers, I guess they could attempt to act unilaterally. Whether they will or not I can't say.

Mr. Jim Abbott: Could you give us an idea how to quantify what the cost of this cultural exemption would be? In every negotiation we're all aware there's quid pro quo; in other words, there's give and take in negotiations. If we get this exemption, what will we have to give up to the United States or to other countries? I can't possibly imagine the United States in particular, or perhaps some of the other countries, would grant us this exemption without extracting a pound of flesh. I would like to know how big that pound of flesh is and perhaps have a description of it.

Mr. John Gero: I'm not sure that assumption is correct in this case. Let me suggest to you why it may not be.

In essence, maintaining a cultural exemption in the MAI maintains the status quo in our relationship with the United States in that context because there already is that exemption from the NAFTA investment provisions. So I'm not sure your assumption that it would come with a major cost is correct. But I don't know what is going to happen towards the end of the negotiations, so I can't—

Mr. Jim Abbott: I understand that; but didn't you suggest that our list of exemptions under NAFTA was about equal to the length of the list of exemptions of the U.S. and Mexico?

Mr. John Gero: Sure.

Mr. Jim Abbott: Obviously we paid something for that. What are we going to pay for this cultural exemption?

Mr. John Gero: Presumably the same list of exemptions the Mexicans and the Americans had in the context of NAFTA.

The Chairman: Ms. Lill.

Ms. Wendy Lill: I would like to look ahead to the year 2000. I understand the WTO negotiations will be happening and I've had some concerns expressed over our broadcasting policy. Are we looking ahead towards the year 2000 and are we preparing a clear policy around that area, so we're not going to be caught in another eleventh hour scramble to try to protect something very important to us?

Mr. John Gero: Very much so. The question of future WTO negotiations is already on the agenda of a number of cultural groups. For example, I know the Canadian Conference of the Arts has established a number of working groups that are beginning to look at this. Certainly the minister's sectoral advisory group is looking into the future in that regard. So despite the fact that it's two or three years away, or longer, these are issues one is already looking at in a number of fora.

Ms. Wendy Lill: You have nothing more to say on this at this point?

Mr. John Gero: Not really, because everybody is in the early stages of holding seminars and trying to discuss the kinds of issues that arise. Recently in Ottawa, for example, a seminar was conducted by the Centre for Trade Policy and Law of Carleton University and it looked at this culture-trade inter-linkage and saw 2000 and 2001 looming. It had a number of very interesting speakers and questions and answers. This is the beginning of the dialogue, in essence.

The Chairman: Mr. Muise.

Mr. Mark Muise: Mr. Gero, just so I can understand more precisely what you're saying...it's that if there's an exemption for culture generally or if there's a country-specific exemption, whatever we do that impacts on culture would have no impact on the MAI. If we have tax incentives or tax credits for our performers or what have you, nothing of that nature would impede or harm our agreement.

Mr. John Gero: That's right. You have to bear in mind that this is an investment agreement, so one is talking about investment measures. The obligations in this agreement go to investment measures: how you treat investors or the kind of investment measures you have.

Mr. Mark Muise: But how would tax incentives for the cultural industry, such as tax credits or capital cost allowance, be treated under MAI even if we had the exemption?

• 1645

Mr. John Gero: The MAI has already agreed that tax isn't covered as part of the MAI, so in that particular context it has already been agreed generally that tax measures are not covered by the MAI.

Mr. Mark Muise: But other measures could have an impact on it.

Mr. John Gero: Only if it has a very specific impact on investors or investment. So, for example, if one decided that one wanted to recreate a border measure against a good entering into it, the MAI wouldn't apply to that. It would have no effect in that regard.

Similarly, if one decided to provide a subsidy to a cultural industry, again the MAI doesn't deal with subsidies so it wouldn't affect those kinds of measures. So it strictly has to do with investment measures as they relate to investors or particular investments.

Mr. Mark Muise: Thank you, Mr. Chairman.

The Chairman: Mr. Gero, could I ask you a couple of things before we close?

First I will refer to what Mrs. Tremblay asked you. It seemed to me she wanted not only the appropriate texts of NAFTA and so forth but also an analysis of how they compare one to the other. Would it be too complicated to furnish us with this?

Mr. John Gero: No. I think we can try to explain to you how each of the agreements are set up, where the exemptions are, and what the effect of those exemptions are. I don't think that's too big a problem.

The Chairman: The second thing I want to ask you is what are the lessons we can learn from the WTO decisions on magazines? What should we avoid in future negotiations such as this one? I know you've explained the exemptions and so forth. Can we do anything about the hole in the old GATT agreement or is it too late now? Will the Americans be using that hole? They started with one magazine. Will they be doing it now for all kinds of other fields?

Mr. John Gero: I think it's too soon to tell what we will be able to do. There may be a new set of WTO negotiations in 2000, 2001, or beyond. Certainly the European Union is calling for a millennium round to start negotiations. So there will likely be some kinds of negotiations in WTO over the next decade or so.

It's not clear to me whether one would have discussions on culture in general or in the context of the GATT or the GATS in that regard and whether one could in essence, as you call it, plug the hole in that regard. It's a very difficult question to answer. It's a treaty that's been around for 50 years and will be more difficult to change than in other contexts.

Again I come back to the fact that what the United States challenged on magazines were some very specific measures that were discriminatory and applied to particular products. If they challenged us in another cultural sector it would also have to have similar kinds of characteristics. It would have to be discriminatory and apply to a particular product in one way, shape or form that it would be inconsistent with. I'm not sure there are a lot of examples of that around. In fact, I'm not sure there are any, other than the magazine example.

The Chairman: Mr. Gero, I've heard a lot of witnesses come before committees, but I must say you are one of the most articulate and extremely informative. We are most thankful for your presence here.

Mr. John Gero: Thank you.

The Chairman: Thank you.

• 1652

There are just a few items of business.

[Translation]

Mr. Bélanger, before giving you the floor I'd simply like to go over two or three questions very quickly. First, the two researchers are preparing... You remember that we had drawn up an action plan and we were going to begin with a general overview and

[English]

an overview, to start with. That was started now.

In February, we would start concentrating on the specific sectors that Mr. Godfrey had suggested as ecosystems. We'll take a panel and look at one sector and so forth. The researchers are now working on the work plan in order to put this into text. It'll be ready by Friday of this week, so we'll send it on to your offices.

At the same time, a lot of people have been phoning us in regard to what kind of shape this cultural study will take. We have already had two sessions discussing it, so we are also going to send out a communiqué to give them the details of the kind of action plan that will be sent to you and that we are going to discuss.

The second thing I wanted to mention to you was that an outline on the future business of the committee has been provided to you by the clerk. Today, we finished with....

[Translation]

The Department of Industry is to appear tomorrow, Thursday, between

[English]

11 a.m. and 1 p.m. It is a briefing by Industry Canada.

You have the schedule for next week before you. We have two televised sessions starting at 11 o'clock, one on Tuesday and one on Thursday. Then, the week after that, which is the last week here—this is what I want to discuss with you—there's December 8, and also December 10...sorry, December 9. We had reserved the 9th for future business, but the minister has asked me to....

• 1655

It's the 10th?

[Translation]

The Minister asked me if it was possible to organize the panel on publishing on the 10th because she'd like to get answers on this as soon as possible. On this whole matter of publishing, she'd like to get answers that would help her after that. She asked me if it was possible to have the publishing panel on the 10th. However, if we can't, we'll only hold it in February. So I'm putting this question to you: are you ready to have the round table on publishing on the 10th?

Does everyone agree?

Mr. Godfrey.

Mr. John Godfrey: One detail: the format we had agreed on for the meeting, I believe, provided for a meeting that was to last more than one hour and a half. Do you think it would be possible to extend the meeting to...

Ms. Suzanne Tremblay: The 10th is the date for the Liberal party Christmas party and ours.

Mr. John Godfrey: That is a limitation.

The Chairman: I would suggest that the meeting of the 10th be a sort of departure point. Nothing prevents us from having a more beefed up panel in February. We could start with that and have a first panel in February if we haven't had the time before. It would be a brief meeting.

There is also another question.

Ms. Tremblay.

Ms. Suzanne Tremblay: When I went to the Subcommittee on the MAI, Trade, Culture and so forth last week, the chairman announced, at the end, that he was to hand in a report at the beginning of December, I think. Would it be possible to get the copy of this report? They held a lot of consultations. It seems to me it might be interesting to have a look at the report they're going to produce, we might find it instructive.

Mr. John Godfrey: Will it be tabled in the House in early December?

Ms. Suzanne Tremblay: I don't know if it has to be tabled in the House. I don't know. It was 7:45 p.m. and the committee meeting had started at 3:30 p.m. I wonder if there is any way to get it.

The Chairman: The clerk will give us an answer, Ms. Tremblay.

The Clerk of the Committee: Ms. Tremblay, to my knowledge, the question of privilege could be raised concerning a report at its draft stage. However, as a member, nothing is stopping you from attending this committee meeting when this draft report is being examined and, in this manner, you will get your own copy. However, I do not think that it would be proper for a committee to give another committee a copy of its report before it is formally tabled.

[English]

The Chairman: On the same subject, Ms. Lill?

Ms. Wendy Lill: It's on the scheduling subject. I guess I was under the impression that we were going to have some people come in to talk about it.

The Chairman: I'm going to address this right now.

On December 9, you had suggested some names. I'm going to turn to the researchers, who have done a lot of work on it. They are prepared to suggest some people and give the reasons why. I'll let Mr. Lemieux address it.

That's for the 9th—very much on the same question that you raised.

[Translation]

Mr. René Lemieux (Committee Researcher): The panel of experts planed for December 9th deals with free trade agreements or international trade and culture.

The members of the committee wanted to hear from experts who could provide concrete and precise explanations on these issues. Consequently, we have suggested Professor Yvan Bernier, who is a recognized authority in the legal and technical aspects of international trade agreements. Mr. Bernier participated in the conference referred to earlier, the Conference on Culture and Trade.

• 1700

Ms. Suzanne Tremblay: And he was at the subcommittee last week.

Mr. René Lemieux: He was also invited to appear before the Foreign Affairs Subcommittee.

This time we are also suggesting that we invite experts who are in favour of cultural exemptions in international trade agreements, including Mr. Keith Kelly, who will be accompanied by his technical expert, Mr. Garry Neil, who prepared the technical brief for the CCA.

If you want to hear the flip side of the coin, still from the experts point of view, you could invite the professors from the Centre for Trade Policy and Law. These could include Professor Christopher Maule, Keith Acheson and Professor Dennis Browne, who in fact organized this conference held in October.

So it is up to you to decide whether or not you would like to hear the other side of the coin.

Ms. Suzanne Tremblay: What is the flip side of the coin?

Mr. René Lemieux: The flip side of the coin, you know, is the opinion that Canada really doesn't need to protect its culture in this manner...

Ms. Suzanne Tremblay: Oh, yes!

Mr. René Lemieux: ... and that we shouldn't be setting up any obstacles to counter the globalization of trade which is unfolding throughout the entire world. We should not be attempting to thwart this trend through cultural exemptions.

The Chairman: Let's take things one at a time.

Yes, I'm coming to you, Mr. Bélanger.

Do we agree to invite Mr. Bernier and Mr. Keith Kelly, accompanied by Mr. Garry Neil, to start with?

Mr. Bélanger?

Mr. Mauril Bélanger: That's fine.

The Chairman: In addition, would you like to hear from Mr. Christopher Maule or would you prefer to hear from him later on?

Ms. Suzanne Tremblay: Not right away.

The Chairman: So it's clear. We will hear three witnesses. Mr. Bernier and Mr. Kelly, accompanied by Mr. Neil. We will do this.

Mr. Mauril Bélanger: Mr. Chairman, I have a motion for the committee, namely, a notice of motion, unless there is unanimous consent to agree to it right away.

[English]

I would like to give a notice of motion, unless there's unanimous consent to accept it. That would be that—

[Translation]

The Chairman: Mr. Bélanger, if you would please first read the motion, we will ask...

[English]

Mr. Mauril Bélanger: Be it resolved that the House of Commons Standing Committee on Canadian Heritage recommends that the Government of Canada maintain its level of funding for the Canada Television Cable Production Fund at least at the fiscal 1997-98 level and that the chair report to the House.

That's the motion, Mr. Chair.

[Translation]

The Chairman: Did you hear the motion?

[English]

The motion speaks for itself. Do you have any questions? Unless you give unanimous consent, Mr. Bélanger will have to give 24 hours' notice for the motion to be heard. If it's unanimous consent we can carry on today.

Mr. John Godfrey: Mr. Chairman, may I raise a caution on this, which is simply...although I have a feeling I wouldn't like his vote, I note that the official opposition isn't here. Is that a problem?

The Chairman: Mr. Abbott spoke to me. He knows about the motion and he told me he was quite in agreement with Mr. Bélanger asking for consent.

Mr. John Godfrey: That was my only concern, that we play fair.

The Chairman: Mrs. Lill.

Ms. Wendy Lill: I would like to speak for a second on this motion. I—

The Chairman: Now we're talking about whether there's consent for the motion, and then we can talk to the motion.

Ms. Wendy Lill: Yes.

The Chairman: Do you give consent? Otherwise we can't discuss the motion.

Some hon. members: Agreed.

The Chairman: The motion has been moved. There's consent for it to be moved, so you can speak to it.

Ms. Wendy Lill: I want to see this motion...I want to see the money forthcoming. I am interested in discussing the criteria for this cable fund at some point, because I think a lot of people are being left out of this cable fund. Although it is benefiting certain key players in the film and television industry, I think there are a lot of people it isn't benefiting. I think that would be a useful conversation for us to have at some point.

• 1705

The Chairman: Ms. Lill, if I can suggest something, first of all we have to see if we can get the funding. Secondly, once we have the funding and you want to have the people come and discuss the criteria, you can by all means make a request and we'll have a session on the capability.

Ms. Wendy Lill: Okay. Great.

The Chairman: So the first thing is to get the money.

Is there any other discussion?

[Translation]

Yes, Ms. Tremblay.

Ms. Suzanne Tremblay: I think it would be useful to note, in the committee minutes, that once we know what the budget is and the funds have been renewed, that we would like to meet with people who are members of the board of trustees, because it is no doubt up to them to send us representatives, so that we can discuss the operating criteria. In this manner, we can really ensure that all categories of people will have access to this money. We should note this right away. Is that all right?

[English]

A voice: Good.

[Translation]

The Chairman: I think that's an excellent idea, Ms. Tremblay, if everyone agrees. I would also ask researchers if they could send us...

Ms. Suzanne Tremblay: The preliminary information is already here.

The Chairman: ... information on the fund so that everyone knows what we're talking about.

[English]

Mr. Mauril Bélanger: John, just so it's clear, I would like to read it into the record again.

The Chairman: Yes.

Mr. Mauril Bélanger: Be it resolved that the House of Commons Standing Committee on Canadian Heritage recommends that the Government of Canada maintain its level of funding for the Canada Television and Cable Production Fund at least at the fiscal 1997-98 level and that the chair report to the House.

It's seconded by my colleague, Dennis Mills.

[Translation]

So let me read this: Be it resolved that the House of Commons Standing Committee on Canadian Heritage recommends that the Government of Canada maintain its level of funding for the Canada Television and Cable Production Fund at least at the fiscal 1997-98 level and that the chair report to the House.

Thank you, Mr. Chairman. The motion is seconded by Mr. Mills.

[English]

The Chairman: May I suggest that when I report to the House I'll include the preamble explaining why we need this, the benefit of the câblodistribution.

Mr. Mauril Bélanger: By all means.

The Chairman: Fair enough?

[Translation]

Ms. Suzanne Tremblay: We attended the reception at lunch time, and received a very good press release explaining how this initiative had created jobs and generated economic benefits.

The Chairman: That's great.

Ms. Suzanne Tremblay: Is that what you mean?

The Chairman: Yes.

Ms. Suzanne Tremblay: This document was well prepared.

[English]

(Motion agreed to)

The Chairman: The meeting is adjourned.