CHER Committee Meeting

STANDING COMMITTEE ON CANADIAN HERITAGE

COMITÉ PERMANENT DU PATRIMOINE CANADIEN

EVIDENCE

[Recorded by Electronic Apparatus]

Tuesday, December 9, 1997

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[Translation]

The Vice-Chairman (Mr. Mauril Bélanger (Ottawa—Vanier, Lib.)): Ladies and gentlemen, if you are ready we can start this morning's meeting.

I apologize on behalf of Mr. Lincoln, who could not be here. He asked me to replace him and I accepted. I hope that is acceptable to you.

There are cameras in the room.

[English]

Ms. Lill has asked if we could allow the cameras to film A Day in the Life of... for a few minutes. If there are no objections to that on the part of the members, we'll allow cameras, but just at the start of our proceedings. We've had a request that we would get to see A Day in the Life of...—

Mr. Mark Muise (West Nova, PC): That would be, Mr. Chairman, my only request.

The Vice-Chairman (Mr. Mauril Bélanger): Fair enough; noted.

[Translation]

This morning, our witnesses are Mr. Keith Kelly, National Director of the Canadian Conference of the Arts, and Mr. Garry Neil, a consultant. Then we will hear from professor Bernier, from the Faculty of Law at Laval University.

Gentlemen, we will ask you to make a presentation and to keep it to about ten minutes. We do have a little bit of leeway. Then we will go on to a series of questions, until we run out of questions or time. Is that allright with everyone?

[English]

Mr. Kelly, would you perhaps wish to start?

Mr. Keith Kelly (National Director, Canadian Conference of the Arts): Thank you very much, Mr. Chairman, and I'd like to thank the members of the committee for this opportunity for us to speak to you about the issue of culture and international trade.

In recent years we have noticed a growing impact of the disciplines of international trade agreements on the cultural policies and practices that Canada has developed to foster and promote the arts and cultural enterprises.

Last June, when our board met in Winnipeg, they were confronted with a wide array of serious issues emanating from international trade agreements. These included the WTO appellate body decision, which has ruled against the key elements of our domestic magazine industry policy; the continuing pressure from Polygram filmed entertainment on the viability of our domestic film distribution policy; threats from the United States to launch a WTO appeal on Bill C-32, the recent revisions to the Copyright Act; the negotiations towards a multilateral agreement on investments, which, without a cultural exemption, would have a profound effect on Canadian cultural policies; and the activities to further expand multilateral trade agreements by Canada's involvement in APEC and the forthcoming round of negotiations at the World Trade Organization.

The board of the CCA made this issue our number one priority and charged the staff with the creation of a cross-sectional effort to address the question of trade and culture. This has taken the form of the working group on cultural policy for the 21st century, which has brought together a broad sectoral and pan-Canadian group of artists, cultural workers, and experts in a sustained and informed discussion about the future of Canadian cultural policy and a close look at the impact of international trade agreements on it.

Through the course of these deliberations, the working group has made some interesting discoveries about the Canadian position on international trade.

While many associate the growing involvement of Canada in multilateral and regional trade agreements to be a new phenomenon, nothing could be further from the truth.

Trade has been a leitmotif in Canadian political life. The first discussions about free trade with the United States animated politics from the beginning of Confederation. However, these energies were focused at the 1944 Bretton Woods Conference, where, in an effort to build the footings for a sound post-war economy, Canada formally proclaimed its objective of working for a world trading system free of barriers. Every national government since that time has reaffirmed this goal.

In the deliberations around the 1947 GATT, tariffs were identified as the single most important barrier to a world trading system without borders. By reducing or eliminating tariffs, the world trading system would make a giant leap forward towards a freer system of world trade. This goal was accomplished with remarkable speed and some benefits began to make themselves manifest. However, attention soon turned to the so-called non-tariff barriers to trade, and once again Canada was an enthusiastic participant and proponent of addressing these obstacles. Subsidies, domestic policies, and legislation were all examined as potential suspects.

The negotiation of regional trade agreements, such as FTA and NAFTA, broadened the negotiating field further yet. The treatment of culture and other sensitive areas provoked a major national discussion about the relative merits and shortcomings of these two powerful agreements. The inclusion of the so-called cultural exemption was the outcome of pressure from Canadians in the cultural sector and beyond it about the need to preserve our capacity to continue cultural development in whatever way best suits our needs, without foreign intervention or reprisals.

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That aspiration still eludes us in the FTA-NAFTA because of the notwithstanding clause, allowing the United States to take unilateral action against any section of the Canadian economy to the equivalent commercial effect, which they are free to determine unilaterally when a new cultural measure is introduced that is seen to damage their commercial interests. American reprisals resulting from the implication of this clause are not subject to appeal, nor can they be heard at the dispute resolution tribunal.

In the negotiations of the Uruguay Round of the GATT, Canada again proved itself an enthusiastic multilateralist. The European Community, at the behest of France, proposed an audio-visual exception as a cultural measure vital to preserving its cultural interests. Canada provided some support to the European measure, but in the final days of the negotiations the Americans made it abundantly clear that they were unprepared to support any general exception based on the cultural rationale. In the end, no provisions were included. The Americans were not prepared to budge, and did not.

Under the General Agreement on Tariffs and Trade, there are only two provisions that touch on the issue of culture: a general exception that allows signatory states to protect national treasures, and another measure in the 1947 agreement that allows quantitative quotas on the import of cinema works.

The lack of cultural reference points in these agreements was a key point in the successful challenge of our domestic magazine industry policy. We have fared notionally better with the regional FTA and NAFTA agreements with the inclusion of the cultural exemption for cultural industries. However, in the hierarchy of international trade agreements, the GATT is still supreme. That is why the United States did not seek to resolve this measure within the FTA and NAFTA but sought a more receptive environment within the WTO, where such beasts as the cultural exemption have no basis.

It's important to stop here for a moment and think about the guiding principle that has inspired our involvement and the involvement of many countries around the world in international trade agreements. The promoters of a freer world trading system have suggested that the loss of political, economic, and cultural sovereignty as a result of these agreements is a fair trade-off for the expected financial benefits that will accrue to Canada as a result of these deals. When the negotiations were less complex, when they were focused on tariffs, that was fairly easy for everybody to accept, but as we reach further and further into the non-tariff barriers to trade, we're finding that these trade agreements constrain our sovereignty in very real ways.

For the most part, the world of international trade negotiations is a fairly secret one. I don't mean to use that in a pejorative sense, but it's far from the eyes of Canadians, and we are presented with agreements that more and more impinge on our freedom to take those measures that we think are in the national interest. We earnestly believe we've now reached a point in the negotiations of these international agreements where we really should have a national discussion about how deeply we want these trade agreements to restrict the ability of our governments to rise to challenges and opportunities as they present themselves.

As the discussions draw more and more areas of domestic political life into their control, the consequences on national sovereignty become more and more evident, and I think you will hear from Garry Neil about the consequences of the MAI without some revisions.

At the same time as the reach of international trade agreements continues to widen, we've also been confronted with the advancement of globalization and the advent of powerful new technologies that are revolutionizing many of the traditional boundaries we have defined over the years. These forces are seen by many as irreversible and meaning a certain end to many cultural policies and practices that are characterized as protectionist and archaic by free trade promoters. For these individuals, it is time that we admit our cultural policy framework is antiquated and surrender ourselves to the rigours of the global marketplace and the unfettered power of new technologies.

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For us, therefore, in our deliberations on this issue, there are three very key issues.

To what extent do the economic benefits of free international trade compensate for and constrain domestic, economic, political, and cultural sovereignty, and where do Canadians want to draw the line?

How do we affirm, within the network of existing international trade agreements, our right to manage our domestic cultural affairs without impediment?

How can Canada promote remedial action to ensure that the existing and proposed international trade agreements be revised or constructed to secure cultural sovereignty?

How can we ensure that the forces of globalization and new technology are diverted to support and fortify national cultural objectives and sovereignty and preserve indigenous cultural expression in Canada and around the world?

The working group on cultural policy for the 21st century is in the throes of answering these questions so that we can present thoughtful, effective, and informed recommendations for the consideration of government and parliament.

The one thing we have discovered in our deliberations is that there is no magic bullet that will resolve our difficulties in one fell swoop. However, there are a few things we can and should do as a nation to bring some sense of order and control to a situation that often seems to be spiralling out of control.

We need a clearly stated cultural policy framework that tells Canadians and our international partners why cultural sovereignty is of real and practical importance to us as a nation. This will allow us to present our policies fairly and clearly and may avoid the misrepresentation of them as protectionist measures.

The cultural policy framework is primarily designed to build a strong domestic base for artistic development in cultural expression, not as an elaborate foil by which we camouflage industrial and export objectives.

We need to build on the efforts of the Minister of Canadian Heritage, the Hon. Sheila Copps, in galvanizing international support for the removal of domestic cultural policies from the rubric of international trade disciplines. Such an agreement would do much to preserve the successes of the Canadian cultural policy framework and the sustenance of other indigenous cultures around the world.

We must come to a common resolve to impose on the forces of globalization and new technologies broader human values that will ensure we can defend the sovereign rights of citizens and their states while accruing the benefits that flow from these powerful forces.

The Canadian Conference of the Arts will be actively pursuing these objectives in the months and years to come. We will also turn our energies to a review of existing Canadian cultural institutions, policies, and measures to ensure they are capable of rising to the opportunities and challenges that await us in the new millennium.

The president of the board and the membership of the CCA look forward to working with this committee and the government to affirm our cultural sovereignty and persevere in the happy task of building a dynamic, distinct, and diverse cultural life for all Canadians.

Thank you.

The Vice-Chairman (Mr. Mauril Bélanger): Thank you, Mr. Kelly.

Mr. Neil.

Mr. Garry Neil (Consultant, Canadian Conference of the Arts): Thank you very much, Mr. Chairman, and members of the committee.

It's a pleasure to be here with you today to talk about some matters of great concern in the cultural community and I believe of great concern in the nation.

I'm a consultant. I work in the cultural policy field, broadly defined. My clients include film and TV producers, book publishers, and the trade associations. I've done work in the magazine sector. I'm currently a policy adviser to ACTRA, the Alliance of Canadian Cinema, Television and Radio Artists.

I've been working at this type of thing for many years. I served as a member of the sectoral advisory group for international trade in the arts and culture area for about seven or eight years during the time of the negotiation of NAFTA, GATT, and the beginning of the negotiations of the MAI.

The CCA asked me to look at the proposed multilateral agreement on investment and give them my opinion on what the possible consequences would be of the MAI on the cultural policy area in Canada. I delivered to them a paper that I think outlines the concerns I have in the area. I'm sure it's available to members of the committee. I know I've given it to a couple of you already.

There is no doubt that, as drafted, the cultural sector is fully covered by the provisions of the MAI. The May text of the agreement, earlier than that, the January text of the agreement, and the October text of the agreement, clearly provide no form of exception, exemption, or reservation, and clearly would have all the cultural sector included fully within the parameters of the agreement. I think people are generally coming to realize that, and in a moment we'll come back to where we go from here.

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What that means is that virtually the full range of measures we have used over the years to encourage Canadian artists and to support cultural industries is potentially affected by the provisions of the MAI. We have restrictions on foreign ownership across the cultural industries. All those restrictions would be counter to the national treatment provisions and most favoured nation treatment provisions of the MAI. These include things such as the regulation that says to own a broadcast licence in Canada you can be no more than one-third owned by a foreign company. They include the policy in the book publishing field that prohibits the entry of new foreign companies into Canada; that prohibits Canadian companies from being sold to non-Canadians except in certain circumstances. It includes the policy in film and sound recording whereby foreign companies are not permitted either to acquire Canadian firms or to expand their operation in Canada or to establish new operations in Canada.

A second whole range of matters the MAI would affect is the funding programs we have in Canada, which are limited in their application to Canadian firms. To qualify for funding from a whole range of programs, for example the book publishing industry development program, the postal subsidy for the magazine industry, you have to be a Canadian firm. If you are a non-Canadian firm you are automatically disqualified from seeking entry into those programs. That would be contrary to the national treatment provisions of the MAI.

Canadian content requirements, which are a fundamental component of establishing the television industry in Canada and the sound recording industry in Canada.... In television—it's important to note the distinction—to qualify as a Canadian content program the producer of the program must be Canadian. If you're a foreign company, even if you produce what would be a 10-out-of-10 point Canadian-content program, you would not qualify for the CRTC number, for example. This would be contrary to the provisions of the MAI. In fact, as I looked at the agreement and began to think about the full range of policies we have in this country, I realized very few of them would be exempt from some challenge under the terms of the MAI.

So we come to the exemption, because we know Minister Marchi has said Canada will not agree to an agreement that has provisions that are less advantageous to us than the provisions in the NAFTA. Basically we're looking, then, to the exemption in the NAFTA as one possible approach.

The French government, in reviewing the January text of the agreement, submitted a very interesting document to the negotiating group in Paris. They said they had reviewed the January text of the agreement and noted that it would negatively affect a whole range of measures the French government has adopted to support and encourage linguistic and cultural diversity, and as a result of that review the French government tabled a proposal for an exemption.

I want to make a couple of points about the so-called French exemption. First of all, it's not in the text of the agreement. The proposal from the French is in the commentary to the agreement, which is merely pages attached to the main body of the agreement to discuss some of the aspects of the agreement.

In the international arena, the way you negotiate an agreement is basically you put the whole agreement down and those matters that are not agreed you put square brackets around. The task over the period of time the agreement is negotiated is to eliminate as many of the square brackets as you can, or otherwise to change the language in them, until you get a final agreement.

Nowhere in the main text of the agreement is there any exception or exemption for culture; nowhere. The French proposal is in the commentary section and is one small paragraph in which they say they propose an exception.

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I think the French language is much too narrow in its scope. It talks about merely policies and programs that are designed within the context of improving linguistic and cultural diversity.

I think a much more serious concern about the French proposal is to understand what it is the French are after. The French do not have the full range of challenges and issues that we have in this country. We are next to the most powerful nation in the world, the most powerful cultural producer in the world, which produces much more material at much lower cost than we can possibly produce in our own country. We have that challenge whether we're a magazine publisher, a book publisher, a film producer, a television producer, or now a new media producer.

The French do not have the problem outside of the audio-visual field. Their concern is to maintain the content quotas in television that are part of the European Communities directive. That's what the fight was all about during the negotiation of the GATT, and in the end that's what the French government is primarily concerned about. They don't have the challenge in the book publishing industry that we have because they've had a thousand years of common history and a common language to allow for the development of a very strong book publishing industry in the country. If we tie ourselves too closely with the French proposal, I think we risk having an outcome that would not serve the needs across the full spectrum of the cultural sector.

We then have the third possible approach, which is the country-specific reservations approach. Even if all 29 nations in the OECD agree to this agreement, nations are permitted to put in their own individual reservations. Presumably we would list our cultural measures and say these are measures that we currently have in place that are contrary to the commitments we're making under the MAI. This has yet to be done by the Canadian government, I note. The reservations we've listed thus far do not include our cultural policies.

If we use that approach we come across some very serious problems. In the agreement itself it's very clear that there are two principles that will apply to country-specific reservations in one way or another. One is the principle of standstill, whereby nations will agree that the only changes that would be permitted to the specified measures would be those that make those measures more conforming to the overall provisions of the agreement. In other words, you couldn't tighten a regulation; you could relax a regulation. The second principle is rollback, whereby over time the objective is very clearly stated in the agreement to be to eliminate such non-conforming measures that are listed by countries.

Perhaps my greatest concern really is the position of the Canadian government in all of this. In the text of the agreement and the commentary there are at least 21 or 22 times when Canada is noted as having taken positions, some of which are very strong positions. For example, we are carrying the ball according to the text of the agreement on the whole matter of the extraterritorial application of laws, the Helms-Burton problem. But nowhere in the agreement is there reference to a Canadian position on culture. We have not raised at the OECD bargaining table the concerns we have about the possible implications of this agreement on our cultural sector.

What's more, forgive me for being somewhat less than confident when I hear assurances being given by Canadian government officials responsible for negotiating the agreement. I was a member of the sectoral advisory group on international trade when some of those same officials and senior government lawyers came to us and said “Don't worry about the magazine policy. We will lose the tariff item against an American appeal”, because that really was a violation of the old provisions of the 1947 GATT. “But”, they said, “the excise tax has been designed specifically to withstand a challenge by the Americans under the WTO and the postal subsidy is absolutely secure from a challenge.” We were told not to worry, and of course the outcome in the appeal has been that all three elements of the magazine industry policy have been declared contrary to the provisions of the GATT, the WTO.

I am concerned about this. I think we need more than merely a statement that we will obtain an exemption from the agreement. I think the Canadian government ought to be in there much more actively, promoting and defending the positions we take in our field. Thank you.

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The Vice-Chairman (Mr. Mauril Bélanger): Thank you, Mr. Neil. Mr. Kelly, I'm sure you generated some questions among our members. I'll ask members to hang on.

[Translation]

Mr. Bernier, thank you for your patience. You have the floor.

Professor Ivan Bernier (Faculty of Law, Laval University): Some of the issues I had planned to raise have already been mentioned. So I will simply try to update you on the role of culture in international trade agreements. I will tell you what this means for us in the future and what should be done now in this area.

We are taking a close look at the current treatment afforded culture in international trade agreements, and we have realized that there is currently a broad debate underway, which is far from being resolved, and where different stands have been taken. The solutions to this debate still need to be finalized.

So before accepting that these international trade agreements will inevitably prevail and that culture will give way to essentially economic interests, it is important to try and understand where we are at exactly.

In this context, I would like to start by pointing out that the debate on the role of culture in international trade agreements is not new. It dates back to the 1920s, when the film industry developed. As early as the 1920s, Europeans adopted legislation with a view to protecting film production in Europe in light of the invasion of American movies after the First World War.

By the end of the Second World War, the United States had succeeded in convincing most European countries to abandon this type of legislation by occasionally bringing economic pressure to bear with respect to loans to these States, among other things.

But article 4 in the GATT agreement was the clause that partially settled the issue. This provision, which permitted maintaining box office quotas to preserve a national presence in cinema, did work for a number of years. Several countries used a clause like that, and as a result we were under the impression that the cultural issue could be resolved that way.

But soon after, in the early 1960s, conflicts reappeared with respect to television. These were essentially conflicts between the United States, on the one hand, and a number of other States, on the other, including Canada, but not just with Canada. I must point out that several countries were involved, either because they established quantitative restrictions on television programs, or because they subsidized television and movies.

Nevertheless, shortly thereafter, there was the Uruguay Round of negotiations, where the issue of culture in international trade resurfaced again, in particular in the trade in services sector. It was at that point that European actors, directors and producers took a series of measures, and that resulted in a considerable amount of publicity in favour of a cultural exemption.

Despite that, the Uruguay Round did not yield any results in that respect. It was a modus vivendi. For the most part, things were simply left as they were, and just a few years after the conclusion of the Uruguay Round, we are once again facing an increased number of conflicts, and disputes amongst governments, in particular between Canada and the United States.

The World Trade Organization brought down a ruling on magazines, but that is not the only case that went to the WTO in recent years. The United States attacked Turkey on the issue of royalties for movies when foreign films were shown in Turkish theatres. They attacked this provision, but subsequently resolved the matter without going before a panel.

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They also attacked Japan on the issue of copyright for records and sound recordings. And of course there were a number of threats that were referred to earlier.

All of that shows that there is currently a rather important debate under way, that is referred to in quite a remarkable number of documents and articles that are published regularly. Since the early 1990s, I have identified roughly 40 articles that have been published, most of which come from the United States. But there is clearly something that raises concern and interest, and we have the feeling that a decision will have to be made on the role of culture in international trade agreements. That is quite clear.

Having said that, to give you an idea as to the uncertainty surrounding this debate, apart from GATT provisions included in article 4 and 20, which deal with restrictions designed to protect the natural treasures which are of artistic, historical or archeological value, I would like to point out that while these provisions may not play a major role in your debate, they underscore the principle of the specificity of cultural products. This is not something that can be ignored. Whether it be article 20 or article 4, there is recognition of the particular nature of cultural products.

Of course, if you exclude the two articles in the GATT, cultural products are treated in the same way as all other products. This is what resulted from the WTO decision on magazines. It can be noted in that decision, which I had the opportunity to analyze in detail, that magazines and their intellectual content were essentially treated the same way as vodka in the conflict concerning Japanese vodka and foreign vodka in another decision.

Of course, they were dealing with issues that were not necessarily the same. The interpretation that was provided in the decision regarding magazines is a highly technical interpretation, that doesn't leave much room to take into account the specific nature of cultural products. It was highly criticized by many people, and I believe that we haven't seen the end of the story.

To give you an idea of the situation—and I will come back to other agreements on culture—the director general of the GATT, Mr. Ruggiero, talked about the importance of culture in a press conference he held a few months ago. He said the following, and I quote:

[English]

Managing a world of converging economies, peoples and civilizations, each one preserving its own identity and culture, represents the great challenge and the great promise of our age.

[Translation]

The Vice-Chairman (Mr. Mauril Bélanger): Mr. Bernier, I would ask you to slow down a bit, because the interpreters are having trouble following you.

Mr. Ivan Bernier: O.K., but 10 minutes is restrictive.

The Vice-Chairman (Mr. Mauril Bélanger): We'll give you an extra two minutes.

Mr. Ivan Bernier: He presented the issue of maintaining identity and culture in a world of converging economies as one of the major challenges of our times.

I could also quote Ms. Sylvia Ostry, who was a Canadian ambassador during the Uruguay round; she said:

[English]

If biodiversity is fundamental, then certainly diversity of culture is.

[Translation]

Essentially, what she meant was that we have to stop allowing agreements like the GATT or the Multilateral Agreement on Investment to cover more or less everything. There has been a tendency for the GATT to get involved in all areas, and that is problematic and even perhaps a potential risk for trade itself. So even international bodies and international trade experts have some reservations with respect to the way culture is being treated.

There are also clear examples of this reluctance in the fact that during the negotiations on services as part of the Uruguay Round, for example, there were a number of reservations with respect to the most-favoured-nation treatment. These were reservations concerning film co-production agreements and other agreements where the justification, stated by the governments requesting these reservations, was specifically to protect national or regional identity. Reservations were requested for that specific purpose.

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At the same time, with respect to specific commitments, we know that the European Union and Canada refused to make specific commitments on access to the services market and national treatment for services, in the case of culture, because neither of them obviously obtained the type of clause they had hoped for.

With respect to relations between Canada and France during these negotiations on services, I would like to point out that Canada put forth a proposal early on and mentioned the proposal to France, but because it was a global proposal relating to culture as a whole and since Europe was mainly concerned with the audio-visual sector, there was a lack of agreement between Canada and France. That led to a behind-the-scenes debate that never really took place in the context of the agreement on services.

Having said that, cultural exemption clauses also exist in the Canada free trade agreements with Israel and Chili. They are full clauses. There are no equivalent trade measures contained in these cultural exemption clauses. There are also cultural exemption clauses in the bilateral investment agreements that Canada currently has with 16 or 17 countries. So despite that, a number of countries agree that there is a need to consider different or distinct treatment for cultural products or a full cultural exemption for these types of products.

In the case of the Multilateral Agreement on Investment, there is also the fact that the French clause that was proposed has obtained the support of eight or nine countries. It is no longer just Canada or Belgium, there are now a certain number of countries, and that means that there is starting to be some recognition of the fact that there is a problem that is perhaps more significant than people thought.

In a debate of this nature, that challenges the protection of cultural identity—I personally tend to go a little bit farther and link culture to the democratic process as such—it is important to go to great lengths to find ways of ensuring dynamic cultural production within countries and promoting cultural diversity at the same time, by accepting cultural products from a significant number of countries, and not just one country. So this problem is twofold.

With respect to Canadian policy, whether it be part of the Multilateral Agreement on Investment...

The Vice-Chairman (Mr. Mauril Bélanger): Mr. Bernier, you have one minute to conclude your remarks.

Mr. Ivan Bernier: ...or with respect to the negotiations in the year 2000 on services, Canada must do everything it can to thoroughly explore the possibility of getting a cultural exemption. That means establishing contact with foreign countries, developing solid arguments to support that possibility, trying to see how likely it is to have other countries support the Canadian and French positions—in other words, doing everything possible to study the issues thoroughly.

If we do that and subsequently fall back on the reservations—as is very likely—we might then have a chance, strategically speaking, to insist that the reservation be open and complete, not closed, as is the one being discussed at the moment. Thank you.

[English]

The Vice-Chairman (Mr. Mauril Bélanger): Before we proceed to questions, Mr. Neil, would you be kind enough to make sure that the clerk receives a copy of the document you referred to in your presentation and that you've given to one or two members? Then all the members can have a copy.

Mr. Garry Neil: Absolutely.

The Vice-Chairman (Mr. Mauril Bélanger): Mr. Obhrai.

Mr. Deepak Obhrai (Calgary East, Ref.): I would like to thank the guests who have come here today. It was very interesting to hear your arguments. Perhaps you could enlighten me on one aspect. I have heard all three of you put up a good defence for Canadian culture and agreements in the international arena.

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Here is the concern or question I have. I see that we have had policies in the past that have protected Canadian culture. However, with globalization coming along and the change that's taking place throughout the world, there's pressure now falling on us to open up the market. The pressure is falling on all aspects. It's not just in culture, but in business, and in every aspect of it. We seem to be doing extremely well in all the other aspects of it when we open up for competition.

All three of you, if I read you correctly, are saying that we need to protect it. If you open it up to competition, our own artists and our cultural institutions have the opportunity to go out as well. With the same product we are trying to protect, they're going out, and they will excel. I think we should have confidence in these institutions and artists to go out as well and excel in the world market.

I think we're doing very well. Sure, there could be some strong, narrow definition of culture that we feel is very defined and critical that Canada may want to maintain. As an overall agreement, when we go out there, would you not agree that we would allow our own institutions a free hand to go out into the world market?

Mr. Keith Kelly: First of all, this is an interesting question, and it comes up continuously throughout this debate. Canada is suffering from a bum rap when we're accused of being protectionist in the cultural field.

Look at the numbers. For example, 95% of commercial screen time is occupied by foreign films, 85% of magazines on news-stands are non-Canadian, 60% of English-language prime time broadcasting is non-Canadian. We are perhaps the most open market in the world for the cultural products of not only the United States, but from all over the place, and we want to keep it that way. Canadians have come to enjoy access to the cultural offerings of other countries around the world. We are really quite privileged in that regard.

Let's try to debunk the notion that these measures are somehow keeping out foreign producers and foreign artists. It's simply not the case.

What we are trying to do is maintain our capacity to build a strong domestic base for artistic and cultural development in this country to allow Canadians the opportunity to speak to each other.

Mr. Deepak Obhrai: My gist is toward the other direction. Your gist is saying that we are an open market. I agree that we are absolutely an open market with that. My gist when we go into this is about Canadian artists and institutions going into the international scene and promoting Canadian culture and giving them the access in the other direction, not in this direction.

Mr. Garry Neil: Canadian artists can compete with anybody in the world. Let's take book publishing. I think all of us enjoy the international success of Margaret Atwood, Michael Ondaatje, Carol Shields, Robertson Davies, and Rohinton Mistry. We can go on and on. A number of our artists have achieved international success. Indeed, all of us in this sector hope we're going to see more of that. Our television producers play on a world stage now.

But here's my concern: where do we get the next generation of Margaret Atwoods and Robertson Davies? Margaret Atwood, Robertson Davies, and Mordecai Richler have all relied on having a very strong Canadian book publishing industry that can afford to take a chance on Margaret Atwood's book of poetry.

Michael Ondaatje started as a poet. I tell you that his first book might have sold 75 copies. He didn't just emerge from nowhere to become an international star. He was developed and nurtured by a Canadian book publishing industry, which in turn relied very heavily on funding from the Canada Council, book publishing programs, and foreign ownership restrictions. In Canada right now we are losing our ability to create the next generation of international stars.

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So if you want to achieve success globally, it has to be based on that ability to try to fail in Canada, because eventually from all of those attempts will come the next generation of stars.

The Vice-Chairman (Mr. Mauril Bélanger): Thank you, Mr. Obhrai. We'll come back to you if we can.

Mrs. Tremblay.

[Translation]

Ms. Suzanne Tremblay (Rimouski—Mitis, BQ): I apologize for arriving late. Thank you for the presentations.

I find this all a bit confusing. Canadians are not vehicles for Canadian culture because they sing American tunes in England. I am sorry, but I simply cannot buy that. We have to have some understanding of what distinguishes us from Americans—what makes us Canadian or not. I think that is important. Being exotic and singing in both languages does not make us the biggest international stars, reflecting Canadian culture. I have a lot of trouble with that.

The more I hear about protecting our culture, the more I feel like a bulldozer is about to run over us. Their conception of culture is completely different from ours.

When we are trying to sit down and define culture, we are told: We will not get into that. There are as many definitions as there are individuals. If we take an endless amount of time defining what culture is, we will never manage to protect it.

Where will we start? Wouldn't be better to try, rather than wasting our time in negotiations... When I look at all the ink that was spilled over Kyoto, and what will actually come out of it, all the ink that was spilled over the MAI, and what will actually come out of it—there may be nothing that will really protect us—I think it might be better to work on bilateral agreements immediately. Would it not be preferable to begin protecting ourselves one country at a time. We could agree that if the other country were to protect us, we would protect it. In this way, we could be having exchanges, rather than wasting our time negotiating with 29 or 30 countries. They do not have the same objective as we do, and we have been told that. Business people think only about jobs and economic growth. If that does not guarantee cultural protection, it's not their problem. If it creates jobs and contributes to economic growth, then they are all in favour.

Finally, what should we do if we want to be completely sure that we have better protection? If we had been as well protected as we were told, we would not have lost the magazine case.

Mr. Ivan Bernier: I think the bilateral strategy you mentioned is already in place and is producing results in sectors such as investment and free trade bilateral agreements.

However, the country that represents the threat is the United States. They are the ones who do not agree. Thus, we can increase the number of bilateral agreements, and it becomes attractive, because we can see that almost all the other countries would accept a cultural exemption clause. There is no major resistance to this anywhere, except from the United States and a few countries such as Japan and Mexico, with specifically identified interests in the area of film, which want broad access themselves for their own productions.

Nevertheless, I do think the strategy has merit, because it indicates how far we can go. The more States agree to come on side, the better we will understand the situation. Ultimately, however, the first and foremost problem remains the spread of American cultural products. In most cases, that is the problem.

There are two aspects to that. The first is to try to obtain enough protection to say that we can continue to have dynamic, viable production in Canada. The second, and this may be a different approach, is to work to promote cultural diversity. If we had more diversified products from all parts of the world, rather than largely American products, the problems would not be the same at all. From the point of view of Canadian cultural production, I think this would be more beneficial. The underlying idea is not to prevent the entry of foreign cultural products but rather to prevent the total domination of one particular cultural product.

This is the point we are going to have to continue to fight for at virtually every level. It may not be a perfect answer. I don't think that there is any level that we can drop at the moment. That is why I stressed the cultural exemption earlier, an idea that seems pretty well impossible for our American friends to swallow. We have to continue to fight because there may well be growing support for that.

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Ms. Suzanne Tremblay: If we really achieve the objective, what are we going to do about the Americans? Let's say they like a film. They will not take the French version of the film, but will rather produce an American remake that will be a complete dud. Just look, for example, what they did with Trois hommes et un couffin. But how can we ensure that we won't be charged if we prevent certain American things from coming in? Let's say, for example, that we pass a regulation whereby in future a maximum of 20% of American products would come into Canada, because we want to give 30% to the rest of the world and 50% to Canadians? Could we make a decision of that type?

Mr. Ivan Bernier: There would be a major problem with that. However, if we were to decide to provide some assistance to encourage the entry into Canada of diversified products, I think that could gradually change the situation a little.

As concerns the United States, you are raising a fairly interesting problem—the behaviour of the United States itself in this regard. In the area of film, the majors obviously control the market. There is vertical integration. The independent American producers suffer from the same problems as we do for the most part. They are shut out of their own markets.

A strategy we should be looking at would involve creating a network to link independent producers in Canada, the US and elsewhere, and to develop genuine links which would make it possible to have a different situation.

In the automobile sector—and this is something I often mention—the United States attacks Japan for what they call "structural impediments". They do not impose official barriers on Japan, but they think Japanese consumers do not buy enough American cars. That is how the economy is structured. The result is that they watch Japan's behaviour very closely.

I don't think we are watching what is happening in the United States closely enough. I don't think we are saying openly enough that there are some types of violations of competition rules that occur there that should be monitored, because they have an impact on us and on others.

Ms. Suzanne Tremblay: Just a brief question...

The Vice-Chairman (Mr. Mauril Bélanger): I apologize, Ms. Tremblay. We will come back later.

Ms. Suzanne Tremblay: Fine.

The Vice-Chairman (Mr. Mauril Bélanger): Ms. Lill.

[English]

Ms. Wendy Lill (Dartmouth, NDP): I have been listening now for several months to discussions about the MAI and I have a growing concern about it in its entirety. I know we are trying to carve out some kind of cultural exemption, but I don't hear anybody here really saying they're confident about anything they've seen yet; that they actually think there is a cultural exemption that will be good enough, strong enough, or clever enough to really withstand the pressure that will be coming our way.

I'd like to talk about that. The whole concept of the MAI is driven by multinationals and international investment. The idea is to level the playing field and free the market movement of capital, so if we put a little reservation in, however strongly we will it, it will be in the way and will be swept away.

I would like to talk about the potential challenges to this. I will say right now I am very nervous about the strength of any reservation. I am very nervous about the length of this agreement. It's a 20-year agreement. What are we locking ourselves into? Right now there is a court case going on where the Esso corporation is taking the federal government to court because of an additive the federal government is trying to block in this country. The Esso corporation is taking our government to court because it's not able to make money in this marketplace. It is a terrifying idea that our government cannot make an environmental decision because there is a company trying to make money in this marketplace.

I'm just using that as an example of how it's very possible corporations out there right now have all sorts of knowledge about how to get around any reservations we might try to stick in here. If there are challenges and we sign this agreement with what we think is an airtight agreement on culture, what happens when somebody challenges it? What role do we as Canadians play? Do any of the parliamentarians in this room have any say in this whatsoever? Does our Parliament? Does our Prime Minister? Who then goes to the table and says Cineplex has the right to do what it chooses or whatever? I'm nervous about the length of the agreement, the challenges, the whole thing.

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Mr. Keith Kelly: The one thing the agreement makes very clear is that there's no core chopping. If you're going to appeal the behaviour of another signatory state in one area or another, the decision of the dispute resolution mechanism is final and you have no recourse to another body to have that heard. In that sense, I guess, that will do nothing to create a higher level of comfort in your own mind about the agreement.

The ultimate intention of the—

The Vice-Chairman (Mr. Mauril Bélanger): Excuse me for interrupting, but we were warned yesterday that there might be a vote at 12.30 p.m. We'll find out, but be warned that the bells may be ringing and we may have to leave.

An hon. member: They're ringing for 12.15. The vote's in fifteen minutes.

The Vice-Chairman (Mr. Mauril Bélanger): Can we verify that?

A voice: Absolutely.

The Vice-Chairman (Mr. Mauril Bélanger): Okay, carry on.

Ms. Wendy Lill: What kinds of controls do the people or we as a government have at this point?

Mr. Keith Kelly: Essentially none. We can defend ourselves at the dispute resolution mechanism...oh, yes, I know what I was going to say.

The ultimate intention for the multilateral agreement on investment is to be imported into the WTO framework. During the Uruguay Round discussions there was a table called “Trade Related Investment Measures”, which tried for a very broad deal such as we have in the MAI. The third world said no. They would have none of it, because they felt that if they signed onto this agreement they would consign themselves to being colonial economies for the rest of their lives. The package they did agree on at Uruguay was much narrower than the developed world wanted, so they decided to develop the agreement first at the OECD and to then try to import it into the WTO at a later stage. I think they would have a very tough time doing that nonetheless.

The MAI would be characterized really as.... Maybe Ivan can speak to this. Would it be characterized as a regional agreement under the WTO?

Mr. Ivan Bernier: The OECD MAI?

Mr. Keith Kelly: Yes.

Mr. Ivan Bernier: It's kind of regional, but it's a broad region. It has many countries from various areas of the world, but it's certainly not multilateral in the sense of the WTO.

Mr. Keith Kelly: So even if the agreement says we have no recourse to appeal, the hierarchy of trade agreements puts the WTO at the top. I suppose there may be some provisions, but you'll have to ask the technical experts.

Mr. Garry Neil: Can I add something to that?

The Vice-Chairman (Mr. Mauril Bélanger): Very quickly, Mr. Neil, because it is 12.15 p.m.

Mr. Keith Kelly: Okay.

The Vice-Chairman (Mr. Mauril Bélanger): I'll interrupt for now. Colleagues, do you wish to come back after the vote, or is this—

An hon. member: We have ten more minutes.

The Vice-Chairman (Mr. Mauril Bélanger): The vote's at 12.15 p.m., so we have about five minutes.

Mr. Neil, quickly.

Mr. Garry Neil: Very quickly, I think we have to work on an exception that's substantially stronger than any that we've seen to this point. I think the key element is that it has to be very broad. It has to be broader than NAFTA, because NAFTA did not include performing arts, visual arts, and crafts. I think it has to be self-defining. In the end, nations have to be able to decide for themselves what is and what is not a cultural matter.

I'd also urge that another element be that a panel of experts in the field be empowered to make these decisions. If you look at the agreement, there are all kinds of special rules for financial services, and the appeal panel in financial services can be struck amongst experts in financial services. It seems to me that this is one of the kinds of measures that we should be including in any sort of exception.

Of most concern to me is the future. We can define what the forms of cultural expression are in 1997, but by the very definition, we cannot define what those are going to be in the next millennium.

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So I reject this notion that we can list the industries and the forms of expression we know today and feel secure that that's protected us in future, because I don't know how artists are going to be creating in the year 2020 and unless we've obtained a provision that's broad enough we won't be able to take action in those areas in 2020.

The Vice-Chairman (Mr. Mauril Bélanger): Colleagues, if it meets with your agreement, I might suggest that there are a bunch of things going on and when we resume sitting in February we might ask these gentlemen to come back.

[Translation]

Ms. Suzanne Tremblay: Just one little point, Mr. Chairman. I had said I would like to have a comparison of the various agreements so that we would know what is in NAFTA and the WTO on the subject of culture, because every time we hear from that new group, we learn something we didn't know before.

The Vice-Chairman (Mr. Mauril Bélanger): We have been told that an official from the Department of Foreign Affairs is looking after that and that we should have the comparison by the time we come back in February.

Ms. Suzanne Tremblay: Excellent. Thank you.

[English]

Ms. Sarmite Bulte (Parkdale—High Park, Lib.): Perhaps before the next meeting in February, if we're going to have the same panel, Mr. Neil's paper could be distributed to everyone, because it gives a wonderful summary of the MAI. It goes through all of the things and it gives you a very good background.

The Vice-Chairman (Mr. Mauril Bélanger): Mr. Neil has agreed to distribute his paper.

[Translation]

Do you have a document, Mr. Bernier?

Mr. Ivan Bernier: Yes, I will leave a document with you, but there is a more substantial one, which is in fact a chapter of a book that is to be published soon.

The Vice-Chairman (Mr. Mauril Bélanger): I don't want to preempt the publication of your book, but would you agree to share the chapter with us?

Mr. Ivan Bernier: I am quite prepared to leave it with you, but my publisher... Maybe you could write on it: Not for reproduction.

[English]

The Vice-Chairman (Mr. Mauril Bélanger): We have a one-minute business item. For us to continue, we need to get some credits to invite witnesses and pay their way here. If the members of the committee are agreeable, I would like someone to put forward a motion that we seek credits to the tune of $32,000.

Ms. Sarmite Bulte: I so move.

[Translation]

The Vice-Chairman (Mr. Mauril Bélanger): Moved by Ms. Bulte, seconded by Ms. Tremblay.

[English]

That is $25,000 for 50 witnesses on average, $2,000 for videoconferencing, and $5,000 for expert counsel that we may require. We would submit this to the appropriate authorities.

[Translation]

Are there any questions on this? Does everyone agree?

(The motion is carried)

[English]

Mr. Joe Jordan (Leeds—Grenville, Lib.): Just one quick procedural thing. I've written a letter to the clerk requesting that when we do a round table, I have a very small, independent publisher in my riding and I think he would bring an interesting perspective in terms of the relationship between that level of publisher—

The Vice-Chairman (Mr. Mauril Bélanger): We'll refer that to the steering committee.

Mr. Joe Jordan: Yes. I've sent the letter. I just wanted to make that known.

The Vice-Chairman (Mr. Mauril Bélanger): Last question.

Ms. Wendy Lill: I'm just wondering if we could have the report from the subcommittee on the MAI so we'd have that overview of the MAI as well—

The Vice-Chairman (Mr. Mauril Bélanger): We will look after that. We'll make sure you get it whenever it's tabled. When it's tabled, the clerk will circulate it to us, whether we're in session or not.

Ms. Wendy Lill: When is that? Soon?

[Translation]

The Vice-Chairman (Mr. Mauril Bélanger): Merry Christmas everyone.

The meeting is adjourned.