CHER Committee Meeting

STANDING COMMITTEE ON CANADIAN HERITAGE

COMITÉ PERMANENT DU PATRIMOINE CANADIEN

EVIDENCE

[Recorded by Electronic Apparatus]

Wednesday, February 4, 1998

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[English]

The Chairman (Mr. Clifford Lincoln (Lac-Saint-Louis, Lib.)): Order.

[Translation]

This is the second of two meetings on trade and culture. Today, pursuant to Standing Order 108(2), we are continuing our study of Canadian culture.

It is our great pleasure to welcome Professor Ivan Bernier, of the Faculty of Law at Laval University, who is well known to all.

[English]

Also, from the Canadian Conference of the Arts we have Mr. Keith Kelly, the national director, and his associate, Mr. Paul Spurgeon.

We have a problem.

[Translation]

I would like committee members to point this out to me, because

[English]

we are supposed to have a vote.

[Translation]

There will be a vote around 4 o'clock, I believe. I have discussed this with Mr. Kelly and Mr. Bernier. It is most unfortunate, but they will probably be interrupted in the middle of their presentation. Would you prefer that we begin with questions, or do you prefer that they make their remarks first? We have barely 20 minutes before the bells start to ring for the vote.

[English]

What is your wish? Would you like to start with questions right off?

[Translation]

Ms. Suzanne Tremblay (Rimouski—Mitis, BQ): I think the important thing is that our guests feel comfortable, because this is the second time we have done this to them. I feel rather uneasy...

The Chairman: I do too.

Ms. Suzanne Tremblay: ...that we are forced to do this a second time. I am prepared to proceed whichever way they prefer.

The Chairman: Thank you very much, Ms. Tremblay.

[English]

Mr. Obhrai, you wanted to say something.

Mr. Deepak Obhrai (Calgary East, Ref.): I think it would be more appropriate if they gave us a brief outlay so we could get back into this.

The Chairman: Pourquoi? Why not then just start with a brief address?

Monsieur Bernier, Mr. Kelly.

[Translation]

Mr. Ivan Bernier (Professor, Faculty of Law, Laval University): Thank you, Mr. Chairman. I will make a few brief comments on the strategy I think the Canadian government could adopt regarding the international dimension of the country's activities in the area of culture.

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In the current context, given that an important debate is still on-going, it is important that Canada maintain a firm approach to cultural matters.

This is particularly important because, in this context, the argument in favour of a cultural exemption must be pushed to its logical extreme. That means that we must take the argument as far as we can. We must understand exactly what is involved and determine where Canada can seek support abroad. If Canada and other countries that favour the cultural exemption or similar mechanisms designed to protect cultural products in the area of trade do not do this, it will never be done, and we will never know what might have come of it.

Consequently, it is important, at the outset, to keep this idea in mind. There is an argument to be established and a logic to be developed.

Second, we must also take into consideration Canada's global interest in the area of culture. Among other things, this means going beyond measures just designed to protect Canadian cultural products. The protection of Canadian cultural products is one thing, but there is another as well: namely, cultural diversity.

Cultural diversity must also be an important objective of Canada's policy internationally on cultural matters. For example, this means a greater acceptance of a variety of imported cultural products and measures designed to protect these products.

We must also be aware that we must distribute Canadian cultural products abroad. This means both making them better known and offering Canadian cultural producers a larger market. I think this is an important aspect that should be borne in mind.

In particular, we must understand that cultural protectionism, if it is based solely on economic arguments, could result in reactions on the part of other countries that could have a considerable impact on us. In other words, if we consider only the economic dimension of cultural production, we quickly find ourselves in a dead end, because this approach leads other countries to respond with economic arguments, and thus to ask for countervailing measures when we use protectionist measures, or, ultimately, to take steps that could go so far as a refusal to export cultural products to Canada.

This is what happened several years ago when the United States threatened to stop sending videos into Ontario if the Ontario government maintained its intention to establish standards and criteria on the classification of videos. Similarly, if the United States were to decide to pursue its objective to limit the movement of cultural artists, there would be a series of problems in that regard as well.

I think we must adopt a comprehensive view when we think of these matters.

Third, we need to develop convincing arguments about the rule that must be played by cultural products in international trade agreements. If we are to defend a logical, consistent position internationally, it is absolutely essential that our arguments be convincing.

Finally, I think this leads us back to the need to coordinate the actions taken by Canadian departments within the country. Here, a great deal still remains to be done. I have appeared before two committees—the Committee on Foreign Affairs and the Canadian Heritage Committee—and I think it is sometimes possible to see different approaches. It is important that Canada's efforts in this regard be coordinated. Thank you.

The Chairman: Thank you very much, Professor.

[English]

Mr. Kelly.

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

I'm joined today by Mr. Paul Spurgeon, an expert on intellectual property and copyright as well as the Canadian music industry. Mr. Spurgeon was a member of the sectoral advisory group on international trade at the Department of International Trade and is most knowledgeable about the issue of international trade and culture. He'll have a few words to say after I finish.

Because of time I won't repeat the whole presentation we started in December, but I would like to point out a few key elements just to centre some of the discussion. One is that Canada has been committed to pursuing the development of a world trading system free of barriers since the Bretton Woods conference in 1944. Every elected government since then has reaffirmed this objective.

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Initially the target of international trade agreements was tariffs on imported goods, which were seen to be significant barriers to the free world trading system. But as these came under control rather quickly, attention shifted to the so-called non-tariff barriers to trade. Issues such as domestic content, subsidies, and other policies developed domestically then fell under the scrutiny of international trade negotiations.

Canada has benefited from a liberalization of trade. However, as recent developments indicate, the trade-off of sovereignty for the promise of economic benefits that accrue from these agreements requires closer scrutiny to ensure not only the integrity of political, economic, and cultural sovereignty but also the fundamental human values that must be reflected and addressed in these agreements.

The current framework of international trade agreements to which Canada is a party offers few specific assurances or provisions to affirm the right of our governments to fashion and deploy domestic cultural policy measures without the threat of challenge or retaliation.

The CCA continues to call for a complete cultural carve-out within the multilateral agreement on investment and urges our colleagues in other sectors of Canadian life who feel that their interests are adversely affected by this proposed agreement to become constructively engaged in proposing solutions or revisions to meet their concerns within the context of the MAI and other multilateral trade fora.

We support the efforts of the Minister of Canadian Heritage, the Honourable Sheila Copps, and the Minister of International Trade to develop a broad international agreement that affirms the right of nations to domestic cultural sovereignty.

The CCA believes that all members of Parliament and all Canadians should engage in a thoughtful and informed discussion on the core values that must inform our negotiating position in all bilateral and multilateral trade and investment agreements. Our challenge is providing our negotiators with a clear set of instructions that will guide their efforts at the negotiating table.

The Chairman: Thank you.

Mr. Spurgeon.

Mr. Paul Spurgeon (Associate, Canadian Conference of the Arts): Thank you, Mr. Chairman.

I wasn't present at the initial appearance by Mr. Kelly, but when Mr. Kelly and Garry Neil appeared before you two months ago, one of the three key issues that they identified—and this is really the pith and substance of the problem—is how does Canada affirm, within the network of existing trade agreements, our right to manage our domestic cultural affairs without impediment. That's really the nub.

In a brief that we submitted to the subcommittee on international trade, we outlined the options that we felt the government had in negotiating the so-called cultural carve-out.

I can just bring you up to speed on those options, if it's helpful.

The five options available for a cultural exemption clause were, first of all, a NAFTA-style cultural exemption, which we've seen isn't particularly effective. We see a second choice, a so-called standstill/rollback option, a so-called NAFTA annex 1 precedent. Thirdly, there is a country-specific sectoral reservation option, or the so-called annex 2 precedent. Fourthly, there is the French proposal that we're familiar with, which we feel is vague, has limitations, and is not sufficiently self-judging. Finally, there is the fifth option, which is the one we prefer, and it's set out in the working groups document: the general exception option, which we believe is the only effective exception because it is indeed self-judging and is a general exception to the agreement.

Interestingly, in the Wall Street Journal today there is an article in the international section, “Canada Considers New Stand Against American Culture”. In it there is an interesting quote from William Merkin, a former U.S. trade negotiator, where he refers to the exemption, saying that the exemption asked for would allow countries to introduce new protections as well as maintain existing curbs. He says:

The U.S. is not in a position either politically or from a commercial perspective to grant any nation carte blanche to restrict our access in...the entertainment sector, which is an important export earner for the U.S.

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Then he says he predicts the two sides will ultimately agree to a compromise measure on investment similar to the one in NAFTA, which would allow countries to maintain current restrictions but prohibit new measures. In our view that's standstill, which leads to the slippery slope of the rollback approach.

To go on, it says:

Canadian opponents of the MAI say the existing restrictions (protected by Nafta) can't adequately deal with technology developments, such as the Internet and satellites, which have already started to erode the effect of some of Canada's policies.

This is why it's important that we have an effective general exception option.

Further to that, we set out six key principles in the analysis of that kind of exemption option. Again, I don't want to go on, because it has already been tabled before another committee and I think it's part of the working group document as well. We talk about various principles that are important in such an exemption: technology neutral, ensuring that the other side can't retaliate, ensuring that it's self-judging, ensuring that it's not subject to the standstill and the rollback obligations. We really want to make sure this is a deal-breaker.

The Americans have a very important point for them to make on the national security front. They believe that is a deal-breaker. For them it's an important thing. Well, for Canadians, culture is a deal-breaker. Just as they want to ensure they can have national security measures, we want to ensure that culture is integral to any agreement we make.

So that's the strategy we suggest, that when we're negotiating we have such a general exception that is self-judging.

The Chairman: Thank you very much, Mr. Spurgeon.

We'll open up for questions. We'll start with party questions.

Mr. Obhrai.

Mr. Deepak Obhrai: Thank you very much for your brief remarks here.

My party's policy of course is that freer access tends to give more development in the cultural sector as well. We feel Canadian artists have the potential to be on the international scene.

In your submission you spoke of general exceptions and all these things. Our concern would be what kind of barriers Canadian artists would face in actually accessing the international market as we go into these agreements over here and more and more countries, as Ivan indicated. Access is not available to the Canadian artist to go into the international market. If other countries come and put a stop barrier to it, how much impact is it going to have on Canadian artists?

Mr. Paul Spurgeon: I can only look at precedent and look at what has happened up to now. I can't think of any measure Canada has taken that has in any way limited Canadian artists from exporting their songs or recordings. I really can't think of anything. In other words, nothing we have done here in the music industry would cause another nation to say “we're not going to play your music” because of something Canada has done.

Cultural products are very strange things. Intellectual property is a very strange thing. It's not like physical goods in that sense. It has to be thought of differently. I think governments are going to have to start thinking about these things differently from how they have done. We're entering into an information age when data information and intellectual property copyrights, things like that, will become more and more important. We're no longer in the industrial age where we're making widgets and things. We have to think about those things.

With culture—and you have asked a very good question—perhaps for the physical part that would happen, but as for culture, I can't think of any government that has prevented or impeded a Canadian creator, for example, from having their works exported abroad.

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Mr. Deepak Obhrai: My concern would be that if you put exceptions here and other countries follow suit and everybody starts putting more and more exemptions, in the final analysis, of course, Canadian artists would have restricted access to the international market. As you know, Canadians need to access the international market in order to make a good living.

So these exemptions that are coming would start to create problems, in the sense that all the other countries would start putting on exemptions, limiting access.

Mr. Paul Spurgeon: Canadians have access to the world's music, for example, and because of Canadian content regulations they also have an ability to access or be exposed to.... They have a choice to hear Canadian music. That has given Canadians a chance to hear their music and foreign music. I think the same thing obtains around the world. I really can't think of any cases where Canadian music is shut out, in retaliation, because of something we've done here.

The Chairman: Professor Bernier.

Prof. Ivan Bernier: I have a quick reaction to this. I think there has been no reaction so far, because in some instances we have been obliged to give up some of our measures. The perfect example would be the decision on the periodicals. If we had not implemented the decision, presumably countries would have taken measures against us. The same thing could happen in other areas. What if, under the NAFTA or the GATT agreement...?

The problem is that there is a possibility that this can happen. I'm in favour of a strong position on culture, but I think we have to take a broad view of our interests in the field and see what can happen. I think some things can happen.

There is a new challenge now before the World Trade Organization against Canada, and it's not clear that we will win this one. The opposite could well be true. There again, if we don't take out our measures, we would be subject to interventions by other states.

The Chairman: Thank you, Mr. Obhrai.

Madame Tremblay.

[Translation]

Ms. Suzanne Tremblay: For about 30 years now, many steps have been taken to protect Canadian content and Canadian culture. If we look around us, we see that most films are in English, and that we are having trouble with quotas for French songs, which are heard only at night. If we cannot really negotiate a cultural exemption, do you have any idea of what we can expect in the future?

I am just back from a country where Portuguese is spoken. There were 13 radio stations available, and I had trouble hearing any Portuguese. We went to visit a museum, and since the French translation was poor, we asked for the document in Portuguese. We were told that the supply had run out and that since the country joined the European Community, it no longer printed its material in Portuguese. They had switched over to English.

If that is what happens in some countries where people are accustomed to living with different languages, and culture must nevertheless be protected, what can we expect here? Where are we headed if we do nothing?

Mr. Ivan Bernier: My initial reaction is to say that if we do nothing, we are in fact headed... that is the "do nothing" option. I drew up a list of options, one of which was "do nothing". Adopting the "do nothing" option means giving liberal free-trade views free reign and would in fact amount to a significant threat to many national cultures. What would be even more dangerous would be to threaten democracy within these countries, because culture is an essential part of democracy. I therefore think this would be something quite serious.

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I think people are waking up to these things at the moment. Whether you go to Latin America... Increasingly, we are starting to see movements that are paying more attention to these matters.

That is why we must continue to fight for a cultural exemption, but also to examine other options. This is not a one-way street. I don't think we can come up with a single solution to the cultural exemption issue. Our strategy must be open to several options. We could have a cultural exemption in a context of lateral agreement. In a multilateral context, we would have to count on open limitation clauses, or else try to get as much as possible in each and every case.

Once again, in order to achieve this, we must be convincing and we must have taken the trouble to talk about this with our partners abroad. Our cultural associations should also be talking about this with their counterparts abroad. There is work to be done, which I don't think is necessarily being done, to ensure some awareness of the issue so that people start to realize what is really at stake here.

At the moment, economic considerations are winning out, but I think that culture and democracy are starting to assume their role. We need time to adopt and state a clear position.

Ms. Suzanne Tremblay: Mr. Kelly.

[English]

Mr. Keith Kelly: I fully agree. I think the consequences of failure will mean that the space we have so deliberately created in this country for the expression of the Canadian experience, both in the English language community and in Quebec and other francophone communities, would all be put into direct and immediate jeopardy if we fail to achieve a cultural carve-out within the multilateral agreement on investment. The breadth of the definition of “investor” in the agreement is such that it captures not only profit-oriented but not-for-profit enterprises.

Also, it restricts how government would dispose of its assets. For example, if in Ontario we had signed the MAI and Mr. Harris wanted to privatize TVOntario, he could not restrict potential buyers to being residents of Ontario or even of Canada. He would have to offer TVOntario to all eligible bidders within the MAI community.

I also agree that the reason we're looking at the exemption strategy for the MAI is really a question of time. This agreement is really steamrolling ahead. We have to find another approach, a more durable approach, a more effective approach, that will take these ideas into other international agreements to which Canada is party so that in the year 2000, when the next round of negotiations begins at the World Trade Organization, and in April, when negotiations begin for a free trade agreement for the Americas, we will have a plan that is not as reliant on the carve-out or exemption strategy but really does establish an international agreement that removes culture from the really artificial environment of international trade agreements where things are goods or services or investments.

I think what we risk is so great...and I also accept the point that we have our work to do in the cultural sector in dealing with other organizations in the international community. Certainly that's where we're going to be turning our energies.

The Chairman: Merci.

Mrs. Lill.

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

I'm fascinated to hear about the Wall Street Journal piece because it doesn't sound like we've made very convincing arguments to them around our cultural sovereignty at all. It seems like we're just a tremendous irritation to them with these kinds of demands that we're putting out there now. That is a concern, because I would hope that the negotiators for us have those arguments right on the table and that they are in fact very impressive.

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I'm very interested in knowing what language is being put forward there. I want to know really what is on the table, because we keep hearing that things are on the table, but I don't know what it is that is on the table. I know that CCA and SOCAN have been involved in crafting the wording. Can we see it? Can we see what's being put forward?

Has this wording been vetted by the two ministers involved, Sheila Copps and Mr. Marchi? Are they in fact on side? Are we all moving ahead in a unified fashion here?

Mr. Keith Kelly: I'll start, and then I'll ask Paul to fill in.

Certainly, for example, when you look at the reservations that Canada has already tabled within the multilateral agreement on investment, you find no reference to a cultural reservation. Well, why is that? “It's very simple. We're going for a carve-out. Isn't that what you want?”

If we're serious about getting a total carve-out for culture, why would we put culture as a reservation? It would show that we aren't serious about pursuing the carve-out strategy.

SOCAN, in consultation with many other organizations, invested a lot of energy in the development of language that would serve both instances. So the first part would serve as a general carve-out provision, and if we were pushed into a country-specific situation, the next part of the exemption covers that off.

I wasn't present when SOCAN discussed the specific language in their exemption with Bill Dymond, so I'll ask Paul to carry it from here.

Mr. Paul Spurgeon: Of course, I'm not on the team and I don't know the machinations that go into negotiating these things, because I'm not in Paris and Geneva where they do these things. But we discussed with them the wish list we had, and obviously they have to have some strategy when they meet with negotiators.

All we know is that we see things like this in the paper and see reactions to whether this is merely rumour or conjecture.

By the way, Mr. Chairman, if the committee wishes, we could table this article from the Wall Street Journal, if you're interested.

The Chairman: Sure. By all means. Very much so.

Mr. Paul Spurgeon: Beyond that, we've expressed our concerns to the department, imploring them that this is something that we consider to be very important, critical to the future of Canada in many ways.

Ms. Wendy Lill: I'm just wondering, based on what we're hearing here, whether our committee could reinforce that fact.

Maybe I could move that we also have a look at that language and that we get some kind of consensus on what we are in fact going for here.

The Chairman: Professor Bernier.

[Translation]

Mr. Ivan Bernier: I would just like to say that from what I know about negotiations, what will count in the end will be what Canada is prepared to do in order to maintain its position.

[English]

The bottom line is what Canada will do.

[Translation]

If Canada agrees to withdraw and thinks that this is a deal- breaker, that is one thing. However, if Canada's position is that the agreement is important, it must not lose sight of the fact that once again all these discussions involve culture on the one hand, and Canadian interests on the other. Thus, the interests of those who want an agreement on investment will confront the interests of those who want to protect culture.

Finally, we will not have to make this crucial decision until the language is chosen. Should we be adopting a firm attitude to the effect that if we don't have a full cultural exemption, that's it?

If that is not the case, clearly, we have to consider immediately what will happen afterwards.

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[English]

The Chairman: Ms. Bulte.

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

The Sub-Committee on the Multilateral Agreement on Investment tabled its report just before Parliament closed in December. In the report SOCAN's clauses were discussed and a recommendation was made about culture. I have two questions, one on the MAI, then I want to deal with the other, about what Canada can do to increase its cultural product.

I would like you two to comment on that recommendation. One of the things it serves to do is to be a beginning of public consultation. I would like to hear your comments on that, from each of you.

Mr. Keith Kelly: I was very disappointed the subcommittee took the position it did on the exemption. We have all had a good look at the French exemption and we feel it's far too narrow to meet Canadian needs.

There's also a certain presumption in the recommendation, or in the language surrounding the recommendation, that since the telecommunications people don't want to be regulated, we shouldn't try to capture them in any exemption we see. Well, you know, that decision hasn't been made yet, about whether the Internet and the Internet activities will be subject to a regulatory regime. So I find it both premature and regrettable that the subcommittee formulated their recommendation in that way. Certainly there is a Telecommunications Act, and I'm familiar with the fact that as common carriers they are exempted from the disciplines of the Broadcasting Act, but when they carry content, how does the regulatory framework affect them? People are wrestling with that issue all throughout the government.

We also feel one of the strengths of the language SOCAN has developed is that it not only includes creation, it also covers the live performing arts and heritage issues. We have to be concerned about these as well.

So yes, we were disappointed by that aspect of the report.

I was surprised at the recommendation that called on the negotiators to come back to the committee and to get the approval of the committee before negotiations proceeded, and also to engage the provinces in that process. I think it's a very prudent measure. I would hope the government will respond favourably to that recommendation.

The Chairman: Mr. Spurgeon.

Mr. Paul Spurgeon: The recommendation I think you're referring to is recommendation 14, the one where it states that Canada must achieve an adequate and effective cultural exemption in order to sign the agreement. I think we all agree with that. But as Mr. Kelly said, the next part is somewhat disturbing, that we should remain part of the coalition of countries supporting the principle of the French approach.

I guess there's nothing wrong with remaining part of a coalition or getting together with other countries in order to move an idea forward, but as I hope we made clear at the subcommittee meeting, the French approach is.... They have their heart in the right place here, but perhaps it's not quite as comprehensive as it could be, because of the vagueness and the limitations of that exemption and the fact that it's restricted to diversity and language, whereas it has to be broader than that. It's quite restrictive. There are limitations.

More importantly, it is not self-judging, in our view. We have to be able to decide what we can protect in this area. Everybody has different notions—that's the very idea of diversity—everybody has a different view of what culture is and what it isn't. We have to be able to ensure that we can define that, because if we can't, another country will say, well, that's not what I think culture is. For example, to an American, perhaps a ballet performance at the Lincoln Center is culture, but Gordon Lightfoot singing The Wreck of the Edmund Fitzgerald is not. Well, to us it is. They would think that to be commercial property or something else, but to us that kind of defines what we are. It helps us understand—the great Canadian Railroad Trilogy. There are all kinds of songs like that.

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I'm just speaking about the music industry now, but that's the kind of thing we're talking about in defining culture. That's why that particular recommendation perhaps doesn't go quite far enough. It's almost there, though.

The Chairman: Mr. Shepherd.

Mr. Alex Shepherd (Durham, Lib.): Thank you. I'm normally not on this committee, so you'll have to pardon—

The Chairman: Excuse me, Alex. I believe Mr. Bernier wanted to add something.

[Translation]

Mr. Bernier.

Mr. Ivan Bernier: I would simply like to add a word to what was just said. Among other things, the French position sought to take into account the position of its European partners. In the context of the European Community, restrictions on culture are dealt with in a certain way, and some things cannot be done. I think that what France tried to do was to put forward a wording that would be acceptable to the other members of the European Union.

That said, while acknowledging that this may not be the proper wording, I would like to emphasize once again to what extent this shows how important it is to discuss these matters with our foreign partners. If we cannot agree on these points, we are going to miss the boat entirely. In 1993, at the end of the negotiations on services, there was a lack of communication. In 1991-1992, Canada started asking for a full cultural exemption, whereas France only became interested in 1993, and when it started to take an interest in this, it asked for something else. Finally, the two countries went back and asked for a reservation, that is not to make any commitments in the area of culture for Canada, and in the audiovisual area for Europe. Once again, there were differences. But if there are no discussions, clearly, we will not agree on any position. Thank you.

The Chairman: Thank you very much. That is a very important clarification.

Mr. Shepherd.

[English]

Mr. Alex Shepherd: Thank you.

I would just like to hear your comments on a philosophy or a theory that's been put forward by at least one of our previous trade negotiators concerning the MAI; that is, we already have a North American Free Trade Agreement, which covers about 80% of our trade as a country. With most of our other trading partners, European and so forth, we already have bilateral agreements. What can be gained by the MAI is not very distinct in Canada's orientation to trade in the first place. Quite frankly, I don't know that anybody has sat down and done a cost-benefit analysis, that the MAI has almost little or no benefit to us in any case. In view of that thought process, what's the problem with walking away from this agreement?

Mr. Keith Kelly: I wouldn't think there would be a great problem walking away from this agreement, to be frank with you, except events of the last couple of weeks in Asia have to make—and please understand that this is not what I'm paid to worry about—Canadian investors a little nervous about investing in those areas of the world where we have no investment agreement. However, it's hardly a compelling reason, and you will remember in the Uruguay Round, at the trade-related investment measures negotiation, many of the features that you see in the multilateral agreement on investment were first piloted at that negotiating table, but were not agreed to at the end of the day, mainly because of the intervention of the third world, who felt that the imposition of these restrictions would consign their economies to colonial status forever and a day.

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When they failed to get that broad package through the TRIMs negotiating table in the Uruguay Round, the OECD picked up the ball. The OECD is a fairly restricted organization of 29 of the world's best economically developed nations. They thought they had a chance perhaps to succeed here and to try to import the MAI into the WTO framework later on.

I don't think we would lose a whole lot. As a matter of fact, I think the commentary from the minister yesterday was that he didn't see the MAI actually coming to fruition. Certainly the American president has some challenges given the fact he no longer did get fast-track authority.

I think it's certainly unlikely that we're going to see a quick resolution of this issue, but if something happens I think we should have our position well laid out, we should identify those areas within the agreement that will have a profound effect on cherished Canadian values, and we should be prepared to respond to them at the negotiating table.

Mr. Alex Shepherd: Are we shooting at the wrong target? Isn't the target the fact that we already negotiated the North American Free Trade Agreement? Isn't our biggest erosion to culture already in existence?

[Translation]

Mr. Ivan Bernier: There are provisions in the Free Trade Agreement on investment that are much the same as those contained in the Multilateral Agreement on Investment. We must acknowledge as well that there are some measures to protect culture. Among other things, there is a reference to the Investment Canada Act in Annex 1. Obviously, there's still the cultural exemption clause, although it includes an aspect that could be criticized, because the cultural exemption clause in the NAFTA allows retaliatory measures.

Such measures are not possible in all cases. In spite of everything, the clause does have some impact. If there were to be absolutely no protection in the Multilateral Agreement on Investment, I think the situation would be different from our situation at the moment in the NAFTA.

[English]

The Chairman: Are there other questions from the members?

Ms. Bulte.

Ms. Sarmite Bulte: I just want to ask some follow-up questions on Professor Bernier's comments regarding what we as a government must do to promote culture in terms of touring and exporting. I guess my problem with that is that if we don't have a product to export, how are we going to export it? Should not the Canadian government be doing more to promote the creation of original Canadian artistic product? The more we create, the more we have to sell, and the more we have to diffuse all the things we have coming into Canada. I know we're talking about defining cultural policy, but I've been hearing witnesses speak about it. Bernard Ostry spoke about it. I think we should start looking at this.

Correct me if I'm wrong, but I'd like to hear your comments as to what we as a Canadian government can do to ensure that there is an environment for creation, because without the creation there is no product and there is no export. We can have as much money as we want in foreign affairs to export, but what is it we're exporting?

[Translation]

Mr. Ivan Bernier: I do think it is important that there be dynamic creative activities; that is the very essence of cultural production. Everything begins with the creative artists.

Having said that, there has to be a market. There have to be consumers, and sometimes steps also have to be taken to protect consumption. The problem with some cultural productions is that they can take up all the space and displace the consumption. This is a situation that we frequently experience in Canada. You are absolutely right to say that if we want our cultural products to be accepted in Canada, we have to make sure that we have a high quality product. This point is often made in discussions on the subject. In this regard, it would also be advisable to review the existing measures. Minister Copps has just announced that she will carry out a review of the existing measures in the film field.

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I am one of those who believe that there may be a lot to do and that many useful measures would not be challenged at the international level, but this would require a review of our present initiatives. The things that currently exist may not be suitable under the present conditions and it would be important to bring them up to date.

[English]

The Chairman: Mr. Spurgeon.

Mr. Paul Spurgeon: Thank you, Mr. Chairman.

You're right. In the music business, we say that “it all starts with the song”. That's an expression we always use when we go to these seminars to try to get people interested in writing music, producing music, creating recordings, going on tour, and getting on the radio and on television. We all say it starts with the song, which is the person who writes the song. That infrastructure is an incredible web.

On Sunday I was in Halifax for the tenth annual east coast music awards. It was the first time I'd been there. It was incredible. I could not believe the talent that exists. Everyone knows about the east coast music business. It's just blossoming. Apparently next year it's going to be in St. John's. The number of people writing great songs and creating great recordings that are being played on the radio—because of Canadian content—is incredible. This allows them to go on and develop their craft and ultimately export it around the world, as we've seen.

It's not just Celtic music. The Halifax area has an incredible African-Canadian music business, as they refer to it. Great music is coming out of that group. It's absolutely incredible, but it all starts with the song, with the creator, and the creators need all the help they can get in order to ensure not only that they have the right infrastructure but to ensure that in this case, for example, there is the CBC to broadcast it. They need the vehicles to allow Canadians access to the music they create.

The Chairman: Mr. Obhrai, and then Madam Tremblay.

Mr. Deepak Obhrai: Since you are from the music world, let me ask you this question. I'm going to draw on the Internet here. The Internet has crossed all boundaries, is unregulated, and is becoming more audio-oriented as well. Music is going there. With respect to the free access on Internet—and if you try to stop it you're going to have problems of free speech, payment, and everything—how is your industry reacting to that and what are you proposing? Are you proposing a kind of restrictive protection there as well?

Mr. Paul Spurgeon: Just for your information, we've filed a tariff before the Copyright Board of Canada that applies to this particular use. Obviously it's not free. Nothing in this life is free. If someone is utilizing someone else's intellectual property he should pay for it. It turns out that we're in embryonic times on the Internet and it's kind of steaming ahead. The Internet is like the wild west, if you will. A lot of people think it should be free, but of course we know things will evolve as they are...and the people who own the rights to the books or the writings or the music, whatever is communicated by this new means, expect to be compensated so that they can pay their rent.

It's important to understand that, because a lot of people lose sight of the fact that the people who write the music need to be paid for what they do and how it's exploited. So the music industry, for one, is dealing with this by trying to license this use of music.

In our view, we call it the “duck” metaphor. The Internet is starting to look a lot like television and it certainly looks like radio. We believe that if it looks like a duck and quacks like a duck, it probably is a duck. It's beginning to look a lot like radio and it's beginning to look a lot like television, and television and radio pay license fees to the people who own the intellectual properties, so why should the Internet be any different? The ducks should pay royalties just like everyone else. That's our view.

Yes, it's new, and yes, there are problems, as there are in any other case. I don't think we should just throw up our hands and say we can't regulate it. It's just something new. I'm sure people threw up their hands when television came on in the past, or radio, cable or whatever.

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We licensed the cable industry.

These are multimillion-dollar industries transmitting intellectual property to Canadians and around the world.

So the goal is that ultimately there will be a system, an infrastructure, in place whereby the owners of rights and intellectual property—songs, books or whatever—will be compensated when their works are exploited and enjoyed by people.

Mr. Deepak Obhrai: When you're negotiating and putting in proposals there, you're not addressing the issue of the Internet, are you?

Mr. Paul Spurgeon: Absolutely we are. In fact, that is one of the principles of our case.

First of all, we believe there should be a general exception so that we'd decide what's in and what's out.

But if you look at the proposal we put forward, if you look at a cultural industry, for example radio, it shouldn't matter whether radio is transmitted by any means. In other words, technology shouldn't define the liability of the person or the responsibility. It shouldn't matter. If you slander someone on the Internet, you shouldn't get out of that tort by saying “I did it on the Internet; I'm not liable”.

So that's our point.

[Translation]

Ms. Suzanne Tremblay: I may be missing the mark a little with the following question, but I would like to take advantage of your presence here to ask for some clarifications. As a member of the Bloc Québécois, I'm certainly aware of the difficulty of defining a Canadian policy that would take the politics out of Quebec culture, but I would nevertheless like you to answer this question.

In your opinion, what should the content of such a policy be? Could it have an impact internationally? Could such a policy eventually protect us against international assaults? What would it consist of?

[English]

Mr. Keith Kelly: First of all, I think that in the context of this debate or this discussion about international trade and culture it's very important that, as a primary starting point, we establish the right to manage our own cultural affairs. I say this because if we don't establish that, then it really doesn't much matter whether the federal government or the provincial government can't introduce cultural policy measures, because they won't be able to anyway.

As you know, within the conference we have many members from Quebec who certainly share the sovereigntist aspirations of the Bloc Québécois, and they understand that our first battle here is to win the principle of cultural sovereignty. Then we, among ourselves at our leisure and in a way that suits our cultural needs best, can decide how that responsibility will be administered within Canada.

When we were in the process of the working group exercise, we came across two central themes: creator content, and access and infrastructure. When you look at all the cultural measures we've deployed over the years, those are the two polarities, if you will, around which those policies have been deployed—to stimulate creation, to stimulate the creation of Canadian content, to ensure that once we have all of this wonderful Canadian content Canadians have access to it and that we have an infrastructure in place that provides that access.

For us, a federal cultural policy framework need not be 300 pages long. What it has to do is send a very strong message about what the involvement of the federal government will be in the cultural domain not only to Canadians but also to our international partners, who right now have the luxury of misinterpreting whatever measure we care to deploy.

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So I think a lot of good would come of it if we could enunciate a cultural policy statement for Canada that, first and foremost, establishes our uncontested cultural sovereignty. Once we've done that, we can have the kind of give and take discussions we obviously need to maintain the diversity of cultural relations and realities in this country.

The Chairman: Ms. Lill.

Ms. Wendy Lill: I guess I'm disappointed—

[Translation]

Ms. Suzanne Tremblay: Mr. Bernier, I am just rattling on. Excuse me.

The Chairman: Mr. Bernier, please excuse us for all these interruptions tonight.

Mr. Ivan Bernier: I would like to say this. Generally speaking, and particularly with respect to the international scene, I believe that a cultural policy is important and critical. In the present context, we cannot afford the luxury of failing to adopt a position and clear policies with respect to our international relationship.

Having said that, my viewpoint is not necessarily more pessimistic but a little more realistic. I believe that the issue of absolute cultural sovereignty will always, ultimately, come up against harsh reality. In agreements such as the WTO or the MAI, a clear situation will arise if the United States says no to a total cultural exemption, as they have said, and will continue to do. We will have to choose between an agreement without the United States or an agreement with the United States and without the measures that we are seeking.

If we fail to get what we want, we can withdraw. If the United States has decided in advance that they will not sign an agreement with a cultural exception, they will reject it. Contrary to what would happen if Canada decided to abstain, if the United States decides to reject such an agreement, there is a very strong likelihood that it won't work.

Therefore we have to be realistic in such matters. Realism does not mean having to give up our goals, but that in our international cultural policy, we have to have a well-thought-out point of view and specific arguments that may be acceptable to other countries, as well as a clear idea of other measures we might use. I think that I would be quite worried if we were to focus on only one approach. I do not think that our policy is sufficiently well developed both domestically and at the international level, and this is dangerous.

[English]

Ms. Wendy Lill: After hearing what you had to say about the subcommittee's report on the cultural area, I find it pretty disappointing that we haven't left Canada—we're still in the same building—and we're getting different views of what we are saying. You three have all said that what we need is an effective general exemption and that the French proposal is not strong enough, but the subcommittee report has basically put forward the French exemption. I'm wondering, what do we do with this piece of information? This is rather startling. Right here, in these two committees, we're coming up with different views on things. How is that going to translate into what happens at the table in Paris, in your estimation?

Mr. Keith Kelly: I think it reflects on the fact that for many of us this is the first time we've had an opportunity to have this discussion in any great detail. I don't find it terribly surprising that the subcommittee can come to a different set of conclusions from the standing committee, or that in fact even people in the cultural sector hold different views.

I talked about the need to have a thoughtful, informed discussion. This is not intended to sound flippant, but I think the MAI is our dry run. As has already been pointed out, we don't have a lot to lose if we just walk away from the table. The chances of a successful outcome in the near future are remote, but it sure has given us a clear idea of the work we have to do in very short order. Unless we do it for ourselves, it will be done to us by our international trading partners, who will successfully challenge, or at least attempt to challenge, one major cultural policy platform after another.

• 1640

In a sense this has been a fire drill. We can learn a lot from the lines of discussion. It shows what we still have to do and what we still have to learn. So I'm not totally despondent about the diversity of opinion that has developed and the diversity of understanding. I think it gives us an opportunity really to concentrate and focus our energies on a far more effective way than we were able to at the beginning of this discussion.

The Chairman: If I may, I would like to ask a brief question of the panel. Then we have one little item of business to settle amongst ourselves before the vote.

Yesterday I was at another committee.

[Translation]

We have just heard a number of experts discuss the MAI. There was a dichotomy between what was said by the representative of the federal Department of International Trade and by the lawyers representing various groups. The lawyers who represent the environmental group told us that the problem is that the Agreement does not specify whether the provinces are included.

[English]

The department official made it very, very clear—in fact, he repeated it twice—that in the terms of the government, the government is signing only for the federal Government of Canada and not for the provinces. Somebody remarked that the United States is negotiating on the basis that it is negotiating as a total country, including the sub-regional governments, the state governments, and everything. I think my colleague Joe Jordan was there when we asked, well, how do you take care of, for example, natural resources, which are completely in the jurisdiction of the provinces? I was wondering what your views are.

[Translation]

Are the provinces included or not? If not, what are we going to do? We know that the provinces are very important in the cultural field, particularly in the case of Quebec, which represents the lion's share of French culture in Canada.

Mr. Ivan Bernier: Obviously, we will have to see the final wording of the Agreement. I have the impression that there is still some ambiguity at the present time in the negotiations. We will have to see what is acceptable, because this is an absolutely fundamental aspect. If the United States or some other country makes commitments for all of its territory and or all of the interventions, they will not readily accept that Canada commit itself only for federal interventions, when the provinces are obviously very active in this field.

Therefore, clarification is necessary. For example, at the present time one of the GATT's provisions specifies that federal governments must take all reasonable steps in their power to ensure that the provinces respect the agreement. There might be this type of a clause. If the federal government cannot bring the provinces into line, other countries will be entitled to obtain compensatory measures. One way or another, there will be a price to pay, and obviously, this aspect will have to be clarified. Otherwise, there will certainly be problems in this regard.

[English]

The Chairman: Is that your view, Mr. Kelly?

Mr. Keith Kelly: Whether we admit it or not, those negotiations have an impact on the provinces, directly or indirectly. I think the agreement on internal trade among the provinces is certainly something that Canada pointed to in the 1996 trade policy review undertaken by the World Trade Organization, as evidence that it was taking its responsibilities seriously to use its best efforts to ensure the provinces complied with the disciplines of that agreement. If there wasn't that obligation on the Government of Canada, I don't think it would have taken pains to point it out within the context of the trade policy review.

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The Chairman: Thank you very much.

[Translation]

Thank you very much, Professor Bernier.

[English]

Mr. Kelly and Mr. Spurgeon, thank you for your wisdom, your expertise, and your advice. We appreciate your presence here very, very much.

Prof. Ivan Bernier: Thank you.

The Chairman: Thank you also for putting up with the inconvenience of having to turn up twice.

Mr. Keith Kelly: Thank you.

The Chairman: Just before you go, Ms. Bulte, very briefly, if we haven't already done so, we are going to circulate a list of the names prepared by the researchers for the round tables to come. The next meeting of the committee will be next Tuesday, and we'll be sending you a notice again.

Please take note of February 19. There's a visit slated for the CBC, which is going to great lengths to make us welcome. The chairman of the CBC will be there, along with the top executives, so I hope we'll turn out in large numbers.

Mr. Jordan.

Mr. Joe Jordan (Leeds—Grenville, Lib.): It's on a point of order. I had requested that we consider a person for the round tables.

The Chairman: By all means. Just give the name to the researchers.

Mr. Joe Jordan: I did so prior to Christmas. I put it on the record, but I don't see the person's name on there. I'm just wondering if the researchers can maybe explain that.

The Chairman: The list is not final. This is a list prepared by the researchers. But by all means, just give the name again to the researchers.

Mr. Joe Jordan: Okay.

The Chairman: Thank you very much. The meeting is adjourned.