CHER Committee Meeting

STANDING COMMITTEE ON CANADIAN HERITAGE

COMITÉ PERMANENT DU PATRIMOINE CANADIEN

EVIDENCE

[Recorded by Electronic Apparatus]

Tuesday, February 24, 1998

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[English]

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

We have with us Mr. Keith Kelly, who has returned before the committee to present the findings of the Working Group on Cultural Policy for the 21st Century on behalf of the Canadian Conference of the Arts. We feel that because this touches very directly on what we are doing, it would be very important for us to ask Mr. Kelly to table his report and speak to it.

Before we do, we have a request for a motion to be tabled at the next committee meeting, which arrived in time and has therefore respected the timetable of the committee. I don't know if the committee members want to deal with it now, before we start...if Mr. Kelly will give us five minutes.

Mr. Deepak Obhrai (Calgary East, Ref.): I will just say a few words about the motion.

I'm asking the committee to look at this motion, which is requesting—not asking or ordering, but requesting—that the appointment of Alan Eagleson be revoked.

I have written to the Governor General, asking him about the process to revoke the Order of Canada, and he has advised me that the advisory council that is set up to do this, to revoke the Order of Canada, has written to Mr. Eagleson asking him to voluntarily give it up. At this stage Mr. Eagleson has refused to give it up. So this will go in front of a hearing.

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I'm asking that the heritage committee look at it and give unanimous consent to advise the advisory council that this is what the committee feels.

I have over 2,000 petitions on this from across Canada, from every member, from every party. I have hundreds of letters actually asking to have Mr. Eagleson's Order of Canada revoked. I also have people who have an Order of Canada asking that the Order of Canada be revoked.

As you know, Mr. Eagleson wore the Order of Canada when he pleaded guilty in a U.S. court. Whether we like it or not, this actually brought shame.

So I am requesting that the committee look at this and join me in requesting that the Governor General...to know what this committee feels regarding a revocation of this Order of Canada.

The Chairman: Mr. Obhrai, I have studied your motion and I have consulted. Many requests come before us, sometimes through motions, but many letters are written to me. In fact, some letters I've received in the past are from MPs, asking, for instance, that we take positions regarding decisions of the CRTC or other government bodies or agencies. The fact is that the committee has no jurisdiction over the question of the Order of Canada, which relates strictly to the powers and jurisdiction of the Governor General.

I'm not pronouncing on the content of the motion, which is another thing. I understand your motivations, and I'm going to put it to the members. Some have asked to speak on it. But I would suggest to you that if you can obtain the consent of the members—you would need unanimous consent—to discuss the motion and to look at it and consider it, if the committee feels they want to do this, then I will accept it.

On the face of it, the motion is not receivable, because it is not something the committee is empowered to look at it any way at all. It is not the business of the committee to delve into questions relating strictly to the Governor General.

Mr. Deepak Obhrai: Mr. Chair, I think I'll go with you and ask the members for unanimous consent. All I'm asking for is the recommendation to be sent. We are not asking the Governor General to do it, but a recommendation from this committee.... It would be a good recommendation, if this committee would do it, with a tremendous voice behind it.

Mr. Mauril Bélanger (Ottawa—Vanier, Lib.): I have a point of order.

The Chairman: Excuse me.

I do appreciate this, Mr. Obhrai. Your position is that a recommendation be sent. But I took the position in regard to two members who recently asked me to recommend to the CRTC that they review a decision regarding a TV station in Ontario. We decided, again, that the committee had no business to recommend to an arm's-length body of the government what to do in any particular circumstance.

By all means, you've made the request that we ask for unanimous consent to consider—

[Translation]

Mr. Mauril Bélanger: Point of Order, Mr. Chairman. Am I to understand that you have ruled the motion out of order and that Mr. Obhrai is appealing your ruling?

The Chairman: No. I told Mr. Obhrai that if he could get the unanimous consent of committee members to deal with the issue any way, I would have no objection.

[English]

Mr. Mauril Bélanger: Aren't you going to vote?

The Chairman: No, I just want unanimous consent.

[Translation]

Ms. Suzanne Tremblay (Rimouski—Mitis, BQ): I completely agree with you, Mr. Chairman. This issue does not concern the committee. It concerns the Order of Canada. They are old enough to make their own decisions on what they can and should do. I am certain that they will consider the issue, which in my opinion is no concern of ours. I would like us to get on with hearing our witness, please.

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[English]

The Chairman: So you don't have unanimous consent. You need the consent of all the members. Frankly, I think it would be a dangerous precedent for us to delve into questions that are not of our resort, because then there's no limit.

[Translation]

Ms. Tremblay, I believe that the committee does not have your consent.

[English]

Mr. Deepak Obhrai: Do we need unanimous consent?

The Chairman: Yes, you need unanimous consent. The motion is not receivable in the first place, and that will close it.

In fairness to you, I think you have done it in good faith. So I have suggested as an accommodation that if there was unanimous consent from our members, and if everybody wanted to discuss it, then that would be fine.

In this case, there isn't. Madame Tremblay has said clearly that she doesn't want to, and I think other members have indicated so as well.

So we'll just go on with the business of the day.

Mr. Kelly.

Mr. Keith Kelly (National Director, Canadian Conference of the Arts): Thank you, Mr. Chairman. You all have copies of the preliminary findings of the Working Group on Cultural Policy for the 21st Century.

I just want to give you a bit of background about this exercise before we get into the substance of the report.

Last June, when our board of governors met in Winnipeg, they were very concerned with the growing entanglement of cultural policy in international trade disputes. They were also very determined to push forward on the cultural policy study that the standing committee had to terminate when the election was called.

It initially appeared that we were going to pursue these along two tracks, but our board said, no, they're inextricable now. We can't talk about federal cultural policy without developing an understanding of how international trade agreements, to which Canada is a party, constrain our ability to develop, implement and maintain a wide variety of cultural policies, measures, and institutions.

So we put together the working group, and at the very end of the report you'll see that there was wide participation from right across Canada, from all the arts and cultural industries.

We also had recourse to three special advisers, who are international trade experts, to help us with some of the more technical and complex areas of international trade agreements.

The working group met by telephone conference from October until December. We were able to reach a fairly broad consensus on almost all the key issues.

Those where no clear consensus emerged are identified in the very last chapter, “Facing the Future”, on page 39. Those are the areas where we really feel that a broader, more inclusive, discussion is necessary before we can really pronounce that this particular approach is an important element of a Canadian cultural policy framework.

Essentially the working group decided that rather than immediately plunge into very specific recommendations about specific institutions or policy measures, we have a fundamental battle to win. That is to establish the unquestionable right of Canada to develop, implement, and maintain cultural policies.

We feel that as a result of many of the constraints we see emerging in the international trade arena, this question is very much up in the air.

So the working group felt that the first thing we have to do is establish our right as a nation to pursue domestic cultural policies as we best see fit. We have to do this, rather than abdicate that responsibility to international tribunals and international bodies that look at the issue of cultural policy through completely different eyes.

In one of our first key findings we do recognize that governments—the federal and provincial governments—have an important role, a vital role, to play in the promotion, development, and sustenance of the arts and cultural industries in Canada. That is obviously linked to our view that our primary objective must be to affirm our cultural sovereignty.

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Flowing from that is to develop a clear and coherent federal cultural policy that is very plain, not only to Canadians, but to our international partners. That policy should be about the intention of the federal government, and provincial governments subsequently, in the cultural domain. This is so we cannot be accused of trying to camouflage commercial interests in the cloaking of cultural policy language.

We're about to begin that second part of the discussion. The working group has been reconstituted and will now look at very specific policy measures and institutions.

We found that when we look at the history of cultural policy development in Canada, two main themes emerge. When you look at almost every measure, every institution we've created, they fall under these two axes. One is creation and content and the other is access and infrastructure.

The working group feels that it's not sensible to stimulate creation and content unless we can actually share it with Canadians. So while we have placed considerable resources on the creation and content side, we've also developed a series of policy measures over time that ensure that Canadians have access to Canadian material. We've done that in a way that has not precluded the access of Canadians to cultural materials from around the world. In fact, I would say that we are probably one of the luckiest nations on earth in terms of the access of Canadians to foreign cultural materials of all sorts.

But we have tried to develop a policy approach that, on the one hand, ensures creation and content that's there, that reflects the diverse cultural realities of Canada, and speaks of Canadian experiences and aspirations. On the other hand, we have tried to develop a policy approach that ensures that we have the modalities in place to ensure that Canadians have access to them. This does not mean exclusively Canadian access, but that we have a space in the Canadian distribution system whereby Canadians can have access to cultural materials that speak to our experience as Canadians.

If we're going to dedicate—and we have done so—a lot of energy and resources to the issue of creation and content, we also have to be sure that the artists, the creators and copyright owners, can use their economic and moral rights to the full extent. This is so they can receive economic benefit from the use of their work in the public marketplace.

Therefore, the working group went on to make a number of recommendations about revisions to the Copyright Act.

It's very important for creators and copyright owners to be able to earn as much of their revenue as possible from their work. Copyright is the bill of economic and moral rights for creators and copyright owners that makes this possible.

So copyright was a very strong consideration in the deliberations of the working group.

Then we looked very carefully at the framework of international trade agreements. We looked at the GATT and the GATS, the FTA/NAFTA, and we looked at the MAI. What we found was somewhat disconcerting.

Since 1946 Canada has been involved in negotiations at the GATT. Throughout that period, including the Uruguay Round, when we look to the GATT for any kind of reflection of the fact that culture is not a durable good, commodity or investment, we find scant evidence of any thinking about this in the GATT.

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There are only two measures in the entire GATT framework that deal with culture. In article 20 there is a general exemption, which allows contracting parties or signatory states to protect their national treasures—archaeological, historical, or what have you. Then there is another measure that dates from the 1947 GATT, which allows for quantitative quotas on the import of cinema. Beyond that, there is no reference to culture.

We looked at the appellate body decision on the magazine issue at the WTO. If you need an example of what the impact of lack of cultural reference points in the GATT is, that agreement is very illuminating. In reaching their decision that the Canadian magazine policy was not sustainable, the appellate body turned to a precedent set in dealing with Japanese alcohol beverages, flaxseed, oilseed and linseed, and auto parts. They were forced to look at what we considered to be a matter of cultural importance through the optic of trading in traditional durable goods. Therefore we recognize that we have a problem.

The European Union is now challenging our domestic film distribution policy. The lack of reference points that was so devastating to us in the magazine decision has not changed. When that dispute resolution panel looks at the domestic film distribution policy, they're not going to be any better off than the dispute resolution panel that looked at the issue of magazines.

When we looked at FTA/NAFTA, we certainly have a cultural exemption there. However, there are two major deficiencies with it. One is that it does not cover live performing arts and heritage, and the other is the notwithstanding clause. The notwithstanding clause gives the United States the right to react to any measure we implement under the freedom of the cultural exemption by imposing a penalty, a countervail, on any part of the Canadian economy they choose, to compensate for the loss of commercial interests. They can decide unilaterally how much damage was done.

We had a bit of a dry run during the country music television dispute, where the section 301 powers of the American Trade Act were engaged. They decided that by removing country music television from the air, the equivalent commercial effect of that was about $900 million a year. They were prepared to penalize Canada almost $1 billion a year for exercising its cultural policy. So the cultural exemption is a very real consideration when governments wrestle with the issue of cultural policy development.

The other thing is that it's clear the Americans will respect the cultural exemption only when they choose. The domestic magazine industry policy is an excellent case in point. Under the cultural exemption, we have the right to develop a domestic magazine industry policy, and the Americans knew that. Instead of honouring the commitment they had taken in FTA/NAFTA, they went court shopping. They understand the GATT as well as we think we do now. They knew it was just slam dunk for them, as it was.

Even if the WTO had ruled in our favour, there are the section 301 powers in the American Trade Act, which allow individuals or corporations who feel their commercial interests have been compromised by the trading actions of one of their partners to lodge a complaint with the American government. The American government then investigates, and if there is any validity to the complaint, the President is obliged to take retaliatory action against the offending trading partner. So we have very little firm protection as a result of the cultural exemption in FTA/NAFTA.

When we look at the MAI—and we've had MAI discussions before—we're also concerned that the definition of investor is very broad. It includes not-for-profit interests. It includes copyright holders. Its disciplines, without a cultural carve-out, would affect virtually every cultural policy and institution in this country, which is one of the reasons we have also recommended—and the government has now accepted—that a complete cultural carve-out be Canada's negotiating position at the MAI negotiating table.

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However, the issue then shifts to a broader, more durable solution to the challenges from the international trade agreements on domestic cultural sovereignty. We certainly support what both Sheila Copps and Sergio Marchi have been saying—that we need to build a broad international agreement that removes culture from the mainframe trade agreements that are really designed for goods, services, and investment and develop a different approach to the treatment of culture in the international trading arena.

We have, as an organization, also embarked on our part of that work by working with artists and cultural workers in other countries to get them to discuss this matter with their political leadership and to bring them onside for an international agreement on the treatment of culture outside of the agreements that deal with traditional trading issues. On this there was very strong consensus. There was no dissent in the working group at all. The board of the CCA has fully accepted the recommendations of the working group, and we have now turned our attention in a very deliberate way to working on building that international consensus.

We have had this discussion about a cultural policy with many ministers responsible for culture in the past. The Minister of Canadian Heritage, Michel Dupuy, used to say we have a Canadian cultural policy. This was big news to us, because we had been looking for one for some time.

We have a wide variety of legislation in measures, but there's still no coherence. As long as that coherence eludes us, we will be subjected to further challenges from our international trading partners. We will continue to create uncertainty in the minds of Canadians about what the legitimate role, if any, of government in the arts and cultural industries is.

It's certainly gratifying for the CCA that the committee is involved in this important work. We hope that at the end of the day your energies will convince the government to put its cards on the table for all Canadians and our international partners, to see what the role of the Government of Canada and the governments of Canada will be in the area of the arts and cultural industries.

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

Mr. Obhrai.

Mr. Deepak Obhrai: Thank you, Mr. Chairman.

Before I start, I would just like to say that these four symbolic flags are a recognition of Canadian participants in the Olympic games—the best we have done, and we salute them. The more Canadian flags we have overseas, the better it is for us. So this is a symbolic gesture for our Canadian athletes.

Going back to questions, sir, we have been entering into international agreements over a period of time. But as we are sitting over here, we hear from you that we have entered into these agreements but don't have a cultural policy per se. Would it be fair to say that when we're going into these international agreements, we're going with band-aid solutions? You know; we have some over here and then we're missing some over here? Is there a gap?

Mr. Keith Kelly: I think there is a gap. Our negotiators are going into these talks in good faith, and they're skilled negotiators and I certainly don't mean to cast any aspersions on them, but without a clear sense of direction from the Government of Canada of what our interests are, they come home having signed what they think is a masterful deal, only to be castigated by the cultural community, and they're quite baffled.

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So what we need is clarity between the government and the cultural community about what it is we're going to achieve, not only as a nation domestically in terms of cultural policy development, but also in terms of our involvement in the international community.

I think there will be so many benefits from articulating that. We wouldn't find ourselves painted into corners, which is where we have found ourselves in international trade agreements. The cultural question, negotiators have told me, is always the last one to be dealt with. It's often dispatched at the twelfth hour with a lick and a promise and a hope that we got it right this time.

If everybody knew where we were going, it would strengthen the Canadian negotiating position in the international arena. Canada has been an enthusiastic promoter of a world trading system without barriers since 1944. Every elected government we've had has reaffirmed that commitment, so that's not going to change.

Canada is still an enthusiastic multilateral participant, but let's do so with our eyes open. Let's do so with a very clear set of priorities and policies that we know have to be—I'm reluctant to use the word “protected”—reflected in the international agreements that we do sign on to.

Mr. Deepak Obhrai: You mentioned two groups. You mentioned the negotiators. You mentioned the government and those who are in the cultural industry. So my question to you would be: what about the consumer as well? He's also the receiver of the end product of cultural work. So consumer input should be in there as well.

Actually, in your view, what's happening? Are we actually moving toward formulating a cultural policy, or is our needle still going in all directions in trying to get this cultural policy?

Mr. Keith Kelly: I would say we've made some interesting progress in terms of a growing appreciation of the importance of a cultural policy in the country. We expect in April to have new section 301 actions launched by the United States against more of our cultural policies. I think people appreciate that unless we take the bull by the horns and take responsibility for our cultural policy in making sure that it's up to date and meeting Canadian needs, it will be done by others outside of this country who have very little regard for Canadian sensibilities and values.

That doesn't make the task any easier. There are still areas where there is no clear consensus about where we need to go. We have to have a more inclusive debate about really important elements of the Canadian cultural policy framework.

Canadian ownership and control has been a feature of many of the policies of our cultural industries. There are those who ask why we are hung up on ownership. Maybe we should focus on control and outcomes. That's a debate that we have been loathe to engage in because we feel we're tipping our hand to some of our international trading partners who find these policies objectionable in the first place.

But we really have to have this discussion en famille. We have to be able to reach consensus on these things so that when the questions do come—they will come, as they continue to come from our international trading partners—we can be very sure that what we're saying represents a broad body of opinion.

Canadian content requirements is another area. Again, there are people—certainly I'm one of them—who say that Canadian content requirements have been a very important element in building a successful music, film, and television industry in this country. However, there are other people who wonder whether there's another way of doing the same thing.

These are debates we have to have.

There's the issue about webcasting. When broadcasting is made available over the Internet, should it be subject to the same regulatory framework as that to which private and public broadcasters are now subjected?

Certainly there are people in the Internet industry who say you shouldn't regulate or tax them, but they want you to spend lots of money building an infrastructure so they can improve their profitability position in the market.

We have to have this discussion, and it's a complex discussion.

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So there are areas where we can fine-tune, but the first principle we have to establish is our right to make those decisions among Canadians and in Canada, and not merely take orders from international tribunals that were really never created to adjudicate on matters of cultural policy in the first place.

The Chairman: Madame Tremblay, I should remind members

[Translation]

we will have to leave the room at 12:30.

Ms. Tremblay.

Ms. Suzanne Tremblay: Thank you for your presentation, Mr. Kelly. I will try to understand what you are saying. You are saying that the first thing we have to do is to establish our right as a nation to make our own decisions on culture. Where, how and when do we do that? The MAI is coming into force on May 1st, and we need a coherent policy so that our negotiators can... I get the feeling we are racing against the clock.

[English]

Mr. Keith Kelly: Well, first of all, I would say that as for the MAI, because of the very tight timeframe, we have recommended an exemption strategy, while recognizing that this is not the best solution. Our real goal has to be two years from now, when at the World Trade Organization the GATT and the GATS will be reopened for major renegotiation.

We have two years to build consensus among our international partners that this is something we can do: we can remove culture and affirm the right of sovereign states to manage their cultural affairs. In the evolution of these agreements, this was obviously a blind spot that not many people were thinking about.

When you design rules for alcohol beverages, flaxseed, linseed, oilseeds, or auto parts, I don't think very many people ever considered the contingency that they would be applied to things like cultural policy.

So we have now a chance to create a remedy and work with other organizations and other countries. The CCA will be in Stockholm at the end of March at the UNESCO conference. We hope to use that as a platform to begin to build some consensus. We don't have a long time.

[Translation]

Ms. Suzanne Tremblay: But don't you think that, if we sign an agreement without adequate protection for culture, some undesirable trend will have set in in those two years, and things will be very difficult?

[English]

Mr. Keith Kelly: It's imperative that we have a cultural carve-out in MAI. Mr. Marchi has said that we will walk away from a deal that doesn't protect health, education, social programs, culture, and programs for aboriginals, our first peoples. We're comfortable that he's sincere when he says that. So if we don't have the protection we need for culture, we won't be a party to the MAI.

But that doesn't remove the real challenge that lies ahead in 2000, when this broader community of the World Trade Organization is going to be involved in very extensive negotiations that will certainly have an impact on the way we manage our cultural affairs.

[Translation]

Ms. Suzanne Tremblay: Thank you.

The Chairman: Thank you.

[English]

Ms. Lill.

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

I'm not sure I feel quite as confident that Mr. Marchi is going to be looking out for our interests. I guess I say that because when I asked him a question in the House one day, he said to me in fact that yes there will be a complete cultural carve-out. The next day he was speaking at a conference. He said that if we couldn't get a complete cultural carve-out, we would make it specific. So that makes me nervous.

Yesterday—I don't know whether you were aware of this—was a major day on the MAI in the House, with lots of questions going back and forth.

I do see a great deal of commitment to this issue of cultural sovereignty on many fronts, but I'm still not sure who's going to be looking after the kids at that eleventh hour.

Are you going to be involved? I know Dymond has been consulting with the CCA and a couple of other important cultural groups. What kind of role will there be to check on the text at the eleventh hour? I'm concerned about that.

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Mr. Keith Kelly: We're meeting with Mr. Dymond again tomorrow to have a mise à jour from the negotiations that took place in Paris last week. He has promised us his full cooperation. He said he will look to us for twelfth-hour clarifications, and what have you.

Are we uncomfortable? We're uncomfortable not necessarily because of the abilities of Mr. Dymond or the commitment of the minister, but the parry and thrust of international negotiations. The minister now is on record so often as saying we'll walk away.

I don't know how much more of a guarantee we need, but we're keeping our eye on it very closely because it is important. Unless we have that carve-out, we really shouldn't be part of the MAI this time.

This is, as you know, the second time the MAI has been around. It first appeared at the trade-related investment measures negotiating table in the Uruguay Round of the negotiations on the GATT. The Third World put the kibosh on it by saying that if we signed on to these disciplines, then we could sign our economy over as having colonial status forever.

So the result of the trade-related investment measures package in the Uruguay Round was considerably more modest. That's why the OECD picked up the ball.

Say we don't sign the MAI. If the MAI doesn't succeed this time, be assured that it will be back in another incarnation. There is an important role for a multilateral agreement on investment. Where the problems develop is when that agreement is so broad that it encroaches on the political, economic, and cultural sovereignty with signatory status.

Ms. Wendy Lill: Thank you.

The Chairman: Mr. Muise.

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

A couple of things I read recently lead me to question when this MAI will be signed, if at all. I'm wondering if you could comment on that. I read sometime last week that there was some debate that the signing might be delayed. Is this saying that the MAI is in jeopardy of being signed at this point?

Mr. Keith Kelly: I think it's in jeopardy of not being signed at this point.

Mr. Mark Muise: That's my point.

Mr. Keith Kelly: Look at the situation. Mr. Clinton does not have his fast-track authority. There are now more than 600 reservations tabled within the context of the 29 members of the OECD on the MAI. I was in Paris last week. I can tell you that our French colleagues are not about to sit back and have their government sign an agreement that's going to affect their cultural sovereignty. I'm also happy to report that our colleagues in Australia and Italy share that view.

I think we're probably going to see the deal pushed back to the fall. That's not a problem. I wouldn't put money on whether it will actually fly this time or not. As I say, if it doesn't succeed this time, it will be back.

Mr. Mark Muise: You also made a comment on section 301. That kind of made my ears listen a bit more. Can you describe that just a little bit?

The Chairman: Look at the American Trade Act.

Mr. Keith Kelly: Yes, the American Trade Act and the super-301 provisions.

International trade agreements are signed between governments. Individuals and corporations have a very difficult time getting their governments to represent their particular grievances at the international negotiating table. You can imagine why.

So the American Congress really felt that this was an unacceptable situation. It went about to implant in the trade act a provision that would allow individuals and corporations who feel that the trading actions or policies of their trading partners compromise their commercial interests to place a grievance before the American government. They then have this separate track to pursue that grievance. If in the course of the investigation they feel there's any substance to that complaint and that is the ruling, the American president is obliged to take retaliatory action against the offending party.

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When the Americans first came up with this, you can imagine that our other partners in the General Agreement on Tariffs and Trade cried foul. They said, “What about most favoured nation? What about national treatment? What about all the other undertakings you've taken at the GATT?” But the Americans were absolutely determined to keep this provision.

In response, the European Union developed a mechanism of their own. The numbers don't stick in my head, but it's in here somewhere. The condition for taking advantage of the European Union action is that you must have exhausted all international fora and dispute resolution mechanisms.

The Chairman: It is 2641.

Mr. Keith Kelly: Yes, but there is not a similar encumbrance on section 301.

This committee is very familiar with Bill C-32, which is revision of the Copyright Act. The Americans had threatened to challenge us under FTA/NAFTA, but there was no basis for an FTA/NAFTA challenge because we have taken no obligations in the copyright/intellectual property area.

However, we understand that the Americans are prepared to launch two section 301 actions against both neighbouring rights and the royalty on blank audio tape in April. So here's another fine example of how leaky is our approach to culture in the international trade area.

The Chairman: Mr. Kelly, there are a lot of other questions. We will come back.

Just to get more precision, the difference between the European clause and section 301 is that the Europeans must exhaust all international recourse beforehand, whereas the Americans just supersede.

Mr. Keith Kelly: If you have a gripe, the Americans are prepared to hear it. It doesn't matter whether you've taken this complaint anywhere else. This is protection for Americans built into the American Trade Act.

The Chairman: I have many requests for questions, if members could share their time. We only have half an hour left.

Mr. Godfrey.

Mr. John Godfrey (Don Valley West, Lib.): I have two questions.

The first relates to the FTA and NAFTA agreements with regard to the cultural provisions. We were told last week by Anne McCaskill, who came along with Mr. Pilon, Stoddart and Clarke, that in fact we not only did reasonably well under the FTA, we did better under NAFTA because the definition of cultural industries was broader. The basis of commercial retaliation remained the same as under the FTA, so in fact there was less they could do to us. In fact we've been so successful that one of the points of the MAI was to try to beat that back, preparing for what she also described as the main event.

In other words I get the impression—and I would like your confirmation—that we did pretty well under NAFTA. The Americans have figured out how well we did and are trying to get us through all these other devices, which we have been able to resist, as you demonstrated with your example. That's the first question.

The second was on the coherent cultural policy. The problem I have—and I've been reading your book—is that because the challenges affect different sectors so dramatically—whether film, television, symphony orchestras or art galleries—the only coherent cultural policy that makes any sense might be to take the general list of criteria you have here, look at each of these dynamic cultural ecosystems, see how the policies have worked with regard to book publishing as opposed to magazine publishing, and then try to find some commonality where there is commonality, but not to try a one-size-fits-all national cultural policy. The only way you can really get at these things is to look for the new things that are coming over the horizon, like the Internet, and try to figure out how to integrate them into those broader principles.

Those are the two questions/observations.

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Mr. Keith Kelly: I dispute your argument that we've done well as a result of the cultural exemption. If we had done really well, the Americans wouldn't have been able to use the World Trade Organization to overturn our domestic magazine industry policy. They wouldn't be able to use section 301 powers to challenge our copyright policy or broadcasting policy. The broadcasting policy commercial solution prevented the implementation of the penalties.

If the Americans were prepared to honour the cultural exemption, I'd say we've done very well, but they've obviously shown that when it doesn't suit them, they're prepared to go court shopping. So it's not a definite protection.

Mr. John Godfrey: There's no definite protection in this world, but it does give us a weapon with which to beat them off. You say the same thing in the document—that this has been a useful defence. I'm just quoting your document.

Mr. Keith Kelly: What page?

Mr. John Godfrey: It's on page 27, I think.

Tactically, American threats may be unnerving; however, they are totally without any legitimacy within the FTA/NAFTA agreements.

You said it; I'm just quoting it.

Mr. Keith Kelly: That's true in copyright, but that is not going to stop them from section 301.

Mr. John Godfrey: All I'm saying is that it give us more defence, which they will attempt to overcome, but we should recognize that it seems to be a sufficient threat to them that they want to get rid of it. If it were not effective, I assume they wouldn't want to get rid of it through the MAI.

The Chairman: Could you address the second point please, the coherence?

Mr. Keith Kelly: We agree that one size does not fit all. One of the challenges is to develop that balance that allows clarity yet agility, because circumstances change all the time.

One of the things we hear from senior government officials when we discuss a coherent policy is that they don't want to carve this in stone, they don't want to feel their hands are tied. We don't want you to feel that way either. We don't want a system that is so rigid we'll never be able to move quickly to address changing opportunities or challenges.

That doesn't preclude an enunciation of what our overall goals are in the cultural policy domain, and it doesn't close any doors for us either, but I think it's very important that we have among ourselves and in the international community a very clear notion of what our legitimate interests are—where we intend to exercise cultural sovereignty and why. As long as that question is left hanging, some of our international partners will certainly think the worst.

The Chairman: Mr. O'Brien.

Mr. Pat O'Brien (London—Fanshawe, Lib.): Thank you, Mr. Chairman.

That leads right into my question. Mr. Kelly, do I hear you saying that we need a comprehensive statement of our cultural policy as, what, our best form of protection?

Mr. Keith Kelly: As a first step. When you look through the legislation we've created, there are pieces in each one. The Canada Council Act is a good example. Parliament created this agency to promote and foster the arts in Canada. One of the objectives of status of the artist legislation is to recognize the important cultural and economic role artists and creators play in Canadian life. We have them strewn about. They really have not been compressed, and I don't think we're talking about a document of 500 pages here.

Mr. Pat O'Brien: I certainly see the value of that. Where you kind of lose me is that I don't see a world in which the United States—we can have the most wonderful statement of policy we want, but I know the United States is going to challenge under section 301 anything it likes, anytime it likes, and against anybody it likes, which usually means us. Is that not the unfortunate reality?

Mr. Keith Kelly: Yes. We can't de-fang 301, but I think we can moderate a lot of 301 threats if we're clear about what we're doing. If we say this is a cultural policy measure, but they say this is just a protection of a commercial interest and you're using cultural camouflage....

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Mr. Pat O'Brien: I agree.

So because our statement is somewhat nebulous or incomplete, it encourages them to be more aggressive than they otherwise might be. Is that...?

Mr. Keith Kelly: It is not only the United States. The European Union has challenged our domestic film distribution policy. Again, it's the perception that the domestic film distribution policy is a commercial measure that's hiding under the skirts of cultural policy. If we could be very clear about that we wouldn't have these disputes with our valued international partners.

The Chairman: I think you've addressed an important point, Mr. O'Brien.

[Translation]

Mr. Bélanger.

Mr. Mauril Bélanger: I have two comments, Mr. Kelly. First, if you would allow, I will quote two excerpts from the report. I went to get the one in my office, which I had annotated.

The two paragraphs I will be reading are on page 2 of the summary. In discussing the efforts made by the Canadian government, you state:

The efforts have resulted in the development of Canadian artistry which has won respect and appreciation both at home and around the world. The investment of political will and public funding has generated a culture of excellence and diversity in which all Canadians can take pride.

As we approach the next millennium the integrity of these measures is coming under tremendous pressure from the agencies of globalization, in the guise of international [...] agreements. The challenge of preserving and developing the diversity and excellence of Canadian cultural expression has been greatly compounded by these forces.

I imagine you're talking about the figures on page 22.

Mr. Keith Kelly: That's right.

Mr. Mauril Bélanger: But these figures are a snapshot, and can be misleading. I thought perhaps the Canadian Conference of the Arts could perhaps give an overview of how things change over time. The report states that 33% of all French-language television programming available in Canada is foreign, and that's all very well, but what was that percentage ten years ago or 20 years ago? I think such an overview would be extremely useful, and I would like you to provide one if you can. It could be very helpful. That is my first request.

I would also like to read to you three other short excerpts from this report. The first is on page [iii] of the executive summary, in the last paragraph.

[The working group] calls upon the government of Canada to articulate and implement a formal comprehensive cultural policy.

That's clear. Now let me read the other two excerpts.

The ingenuity of Canadian domestic cultural policy lies in the inclusiveness of its measures. The development of the Official Languages Policy recognized the central duality and richness that flows from the preservation and promotion of cultural expression in both French and English. This policy has led to the flowering of French cultural expression in Quebec, Acadia and the francophone communities across Canada.

And here is the last excerpt:

The Canadian approach to...

The Chairman: Where exactly is that paragraph, Mr. Bélanger?

Mr. Mauril Bélanger: It is paragraph 2 on page 6 of the preliminary report:

The Canadian approach to public policy in the cultural domain is remarkable in its consistent and insistent objectives of recognizing the role of the artist/creator and of stimulating and supporting expression of the cultural and artistic dimension of Canadian life.

Please take a look at that last passage I read. We need a consistent policy. You might seem to be contradicting yourselves, but I'm not going to ask you to comment on that. I am going to present you with a challenge. Since it seems to be asking for it, would the Canadian Conference of the Arts be prepared to formulate a consistent Canadian cultural policy? And how much time would you need?

[English]

Mr. Keith Kelly: Well, there you go. We have begun to work on this and we hope to be in a position to have that by the middle to end of April. We recognize that in identifying problems, you're only doing 50% of your job. We want to do 100% of the job and we want to be able to bring forward, by the end of April, the second part of this working group, which does do that; it looks at renovating, if you will, existing institutions and measures, and rationalizing it under a coherent cultural policy framework.

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Mr. Mauril Bélanger: So you will be proposing.

Mr. Keith Kelly: We will be proposing.

Mr. Mauril Bélanger: My last comment, Mr. Chairman. I would invite the Conference of the Arts to be mindful of one element that I think is lacking in the presentation we have here, and that is the consumer of the artistic and cultural expression in Canada. That to me is an aspect that is very important and somewhat neglected so far.

Mr. Keith Kelly: I suppose we could argue—we will, Paul—that when we talk about access and infrastructure, the object of the access and infrastructure policy is to ensure that Canadians in all parts of the country have free access to Canadian cultural materials. I don't think we have overlooked that entirely. We acknowledge that the tremendous support and appreciation of Canadians is an essential element in the successes we've enjoyed in the arts and cultural industries.

[Translation]

Mr. Mauril Bélanger: Thank you, Mr. Chairman.

[English]

The Chairman: That's an interesting point, though, because it was a perception of two of our members from different parties, so I brought it up, too.

Mr. Saada.

[Translation]

Mr. Jacques Saada (Brossard—La Prairie, Lib.): I just have a very brief question, Mr. Chairman.

We are looking at efforts to ensure that culture is excluded from the Multilateral Agreement on Investment. We have looked at section 301 of the US Trade Act, which is in fact a defensive provision. We are looking at all the exemption formulas put forward by various groups. In my opinion, all these formulas seem to have one thing in common: they are always defensive provisions. We are withdrawing, we are putting on the brakes.

My question may be a little absurd, but here it is: Why couldn't we take a more proactive approach, particularly within the framework of World Trade Organization negotiations to be held in two years?

[English]

Mr. Keith Kelly: Well, that's exactly what we were talking about in terms of working in the intervening two years with our international partners to develop an agreement that takes all of these disputes out of the current context and affirms the right of individual nations to pursue domestic cultural policies as they best see fit.

Mr. O'Brien, I can almost hear you saying, “Yes, but that's not going to work in Washington”. That's true. But we hope we can develop a critical enough mass of like-minded countries. At least then, among ourselves, we can do the best to ensure cultural diversity, not only in Canada but around the world.

It's the only way we can see—and we've looked at any number of options—to remove us from the hamster wheel of challenges and defence of cultural policy issues that come before the World Trade Organization or are the subject of section 301 actions, and it won't ever completely remove the 301 problem.

We can only claim cultural sovereignty if we're prepared to exercise the powers associated with it, and Canada has done that. We stand at an interesting moment. Whether we will continue to do that or whether we will knuckle under to globalization or new technologies.... People are saying, “Oh gosh, can't stop globalization. Might as well give up now. New technologies—gee, can't regulate those, can't control those.” These are all human creations, and if they can't bear on their face fundamental human values, then we're doing something wrong.

The Chairman: Mr. Bonwick.

Mr. Paul Bonwick (Simcoe—Grey, Lib.): Mr. Bélanger clarified my question for me. Thank you. It was regarding time lines.

The Chairman: Okay.

Just before we start another round of questions, in the last 15 minutes, could you, Mr. Kelly, tell us...? Yesterday we were at a meeting where this question was brought up. In the WTO I understand there are only two very indirect references to culture—exemption of national treasures and then article 47, which is a summary article. Maybe you could tell us what national treasures include. Do they include all museums, for instance? Can you briefly tell us about 47 and how summary it is?

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Mr. Keith Kelly: This is article 20 of the general exemption on national treasures. It has been interpreted to allow contracting parties to undertake measures that may not be consistent with the obligations in the GATT—to protect historical, archaeological, artistic treasures. There's not a whole lot of elasticity here. We couldn't claim the entire Canadian cultural sector as a national treasure. We thought of that, but we feel that probably would be challenged.

The 1947 provision that allows for the quantitative quotas on the import of cinema has actually also been interpreted to include broadcasting. The quotas we have...the Canadian content requirements that we have under the CRTC.... It has generally been interpreted to allow countries to impose quotas not only on cinema, but also on their broadcasting system.

There was some concern, especially in the European Union, that the 1947 provision was not adequate. At the end of the Uruguay Round the European Union had insisted on an audio-visual exception that would be expansive and would secure the position of broadcasting and other technologies. Very close to the end of the negotiations, the European Union and the United States disagreed about two different issues. One was agricultural subsidies and the other was the audio-visual exemption.

The secretary general of the GATT, Mr. Dunkel, called the two parties together at Blair House in Washington to work out their differences. They were able to come to a compromise on agricultural subsidies, but they could come to no agreement on the issue of audio-visual exception. The Americans at that time said they would never accept a general exemption based on a cultural rationale. The European Union did not list audio-visual services, did not offer trading in audio-visual services. At this point the Americans have not challenged it, but this is still a question that could flare up at any time in the future.

There are some states such as France and some other nations in Europe that worry that the 1947 provision may not be inclusive enough to serve their needs as technologies and distribution systems change.

The Chairman: Thank you.

[Translation]

Are there any other questions?

Ms. Tremblay.

Ms. Suzanne Tremblay: There is a great deal of emphasis on Canadian content. If Canadian content is to be developed, and everyone considers this important, isn't there a risk from the intellectual property standpoint? An owner tends to focus on his own content rather than on Canadian content. Shouldn't we be looking at that carefully?

Mr. Keith Kelly: Yes, of course.

[English]

That is why copyright was such a central part of the thinking of the working group. It's one of the principal concerns we had with the MAI without a cultural carve-out—that creators and copyright holders could be net losers in the MAI.

Certainly our colleagues in France understand this very well. When they look at the North American model and they see no droit de suite for visual arts, that they have the royalty on not only tape but also on the hardware, which compensates artists and producers for lost revenue due to home taping, and the collective management system—they feel all of these are vulnerable if a general carve-out on culture is not achieved in the MAI, and with good reason.

The CCA has been very clear that we believe we have to expand economic and moral rights for creators and copyright owners. We have to be very careful to keep our eye on this as these negotiations evolve. Canadian content is certainly important, but of equal importance is the ability of the creators and the copyright owners to be able to receive economic benefit for this work as it moves through the distribution system.

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The Chairman: Mrs. Lill is next. Afterwards I have requests from Mr. Godfrey and Mr. Saada.

Ms. Wendy Lill: John Gray came in a couple of weeks ago to speak with us, and he raised the issue of foreign quotas. Instead of putting restrictions on Canadian content, which is a very negative approach to things, he put it on the amount of foreign content coming in.

I'm wondering what you think of that idea and whether there are any models in the world that you think are effective.

Mr. Keith Kelly: I worry about that approach for a number of reasons. Mr. Bélanger mentioned the consumer. If we are seen to be restricting access by Canadians to foreign cultural material, I think there would be a very strong public backlash. I think we would be taking away something we have all come to enjoy and appreciate in all of its forms.

We would certainly create some vulnerabilities for ourselves in terms of national treatment and the most favoured-nation disciplines we've already undertaken. I would be very cautious about imposing any restrictions on the in-flow of foreign cultural material.

Canadian content requirements shouldn't be seen as a negative. What they do is ensure there's a space always for the Canadian imagination and for the Canadian voice. I can't see that as being negative in any way. Canadians are favoured with this wide variety of choice, and we want to make sure that among those choices they will always have an option to choose Canadian—not that they will be forced to, but that the choice is there for them.

The Chairman: We'll have a brief question from Mr. Godfrey and Mr. Saada, and then we'll close. We have a brief item of business before we give up the room.

Mr. John Godfrey: Coming back to the coherent cultural policy, I'm very struck by the usefulness of your suggestions, on page 34 of the document, which deal with the elements that should be in such a framework.

I don't think anybody here would object to any of the elements. I think they're very coherent and inclusive.

What I'm asking is this. I don't want to prejudge what our final report might look like, but if the committee were to say this is a very useful preamble, it's a useful set of principles, we could take this whole thing right over, I don't see why not, then the task becomes if that's what we believe in, we have to go with various subsets and here's what we have to do in copyright, sound recording, museums, books, and so on.

In your view, would the preamble in those chunks add up to a coherent, cultural policy?

Mr. Keith Kelly: Very likely.

Mr. John Godfrey: Good, now we know what we have to do.

Mr. Keith Kelly: It actually removes the obligation of delivering it all in one fell swoop and allows for that more inclusive discussion on the retooling and refinement of existing cultural institutions and measures that we all agree are probably a good idea.

[Translation]

The Chairman: Do you have any further questions, Mr. Saada?

Mr. Jacques Saada: This question is so broad that I'm not sure how to phrase it. When we talk about culture, we refer to a variety of agreements, including NAFTA and the MAI.

[English]

I don't understand. An organization, which is UNESCO, was struck under the auspices of the United Nations to promote culture. We never refer to this organization when we talk about culture. Am I missing something here?

Mr. Keith Kelly: Oh, well.

No, you're not missing anything. UNESCO has done some work on this, but one of the challenges of UNESCO is that it has to reconcile priorities and political and ideological systems that are radically different in coming out with a position. Laying out a template for a cultural policy system that might work in the UNESCO nations is really an impossible task for them.

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They have injected into the discussion some useful work. The de Cuellar report, Our Creative Diversity, has some interesting ideas in it. When you read it, you can see the tensions. They take two steps this way and then they're pulled over here and pulled over there. It's the nature of the beast.

We hope UNESCO will continue to play an important role, but we can't leave it to UNESCO. We really have to do our own work on this.

The Chairman: Mr. Kelly, we've seen you a lot lately, but I guess it's a tribute to your knowledge and confidence that you never get boring and there's always something to ask you. Thank you very much.

Mr. Keith Kelly: Thank you.

[Translation]

The Chairman: Before the members leave us...

[English]

before the members leave us, I would like to remind you that we have our round tables on March 10, 11, and 12. I really hope

[Translation]

that we have everyone here, because we will be receiving some exceptional witnesses.

[English]

The format will be informal, in a formal setting. It will be televised. It will be a true round table. There will be no speeches from members or anybody else. There will be questions, but not specifically questions by members. Rather, it will be a free discussion to and fro. We're not going to be stuck according to party lines; we'll mix it up among the round table participants. It will be a very freewheeling format.

It will be March 10, 11, and 12. You have the agenda.

The Clerk of the Committee : It will be 8.30 a.m. to 1 p.m. on Tuesday, March 10; then 3.30 p.m. until 5.30 p.m. on March 10.

Mr. Paul Bonwick: Will you be sending this out?

The Clerk: Yes, we will be. You already have it on your calendar, but perhaps you could take note of it. On Wednesday, March 11, it's 3.30 p.m. to 6 p.m.; Thursday, March 12, it's 8.30 a.m. to 1 p.m. In essence, there will be six meetings.

Mr. Paul Bonwick: The calendar of events is starting today, actually.

The Clerk: The new one I have with me identifies it as March 10, 11, and 12.

Mr. Paul Bonwick: So on March 12 it's 8.30 a.m. to 1 p.m.

Ms. Suzanne Tremblay: On March 10 it's 8.30 a.m. to 1 p.m.

The Clerk: On March 10 and 12, and you have one in the afternoon as well.

The Chairman: I really think it's going to be therapeutic, because it will bring us a lot of the answers we're seeking. I hope for your full participation and cooperation.

The Clerk: Mr. Chairman, I'm astounded at how the people are willing to appear and eager to appear. In twenty years, I've never seen such a calibre of witnesses and participants. It's absolutely astounding.

[Translation]

Ms. Tremblay.

Ms. Suzanne Tremblay: Are we going to have the same people for the three days, or will we have different people at every session?

The Clerk: There will be six round tables.

Ms. Suzanne Tremblay: Six different round tables?

The Clerk: Yes, they will be completely different.

Ms. Suzanne Tremblay: There'll be one group in the morning?

The Clerk: Two groups in the morning.

Ms. Suzanne Tremblay: Two groups in the morning.

The Clerk: And one in the afternoon.

Ms. Suzanne Tremblay: And one in the afternoon.

The Clerk: And one on the other afternoon.

Ms. Suzanne Tremblay: On Wednesday afternoon?

The Clerk: That's right, then two on Thursday morning. Keynote issues will be those in the press releases. Five issues have been identified, and the conversation will focus on them.

Ms. Suzanne Tremblay: Do we have all the information in our offices?

The Clerk: Yes. I'll send you the kit as soon as I have finished preparing it. The problem is that calling is sometimes faster than the machine.

The Chairman: If some members also sit on other committees, and want to arrange things with their other committees so they can join us,

[English]

if you belong to other committees—Mr. Bonwick sent me a note and it's well taken—and you want to work it with your whips so that you are free for these round tables, please let the whip know. I will see our whip and maybe the other parties can do likewise, so that we have many of the members here. Thank you very much.

[Translation]

Thank you.

The meeting is adjourned.