CHER Committee Meeting

STANDING COMMITTEE ON CANADIAN HERITAGE

COMITÉ PERMANENT DU PATRIMOINE CANADIEN

EVIDENCE

[Recorded by Electronic Apparatus]

Tuesday, November 24, 1998

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[English]

The Chairman (Mr. Clifford Lincoln (Lac-Saint-Louis, Lib.)): I'd like to call to order the meeting of the Standing Committee on Canadian Heritage, pursuant to the order of reference of the House dated November 3, 1998, a study of Bill C-55,

[Translation]

An Act respecting advertising services supplied by foreign periodical publishers.

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[English]

Appearing before us today is Mr. Ron Lund, president and CEO of the Association of Canadian Advertisers; Monsieur Jacques Larose, vice-president of the Association of Canadian Advertisers; Ms. Janet Callaghan, vice-president and corporate media director of the Media Company, and director and past president of the Canadian Media Directors Council; Mr. David Harrison, president and CEO of Harrison, Young, Pesonen and Newell, and chair of the Institute of Canadian Advertising; and Mr. Clifford Sosnow, counsel for Lang Michener.

Mr. Lund, do you want to start? The floor is yours.

Mr. Ronald S. Lund (President and Chief Executive Officer, Association of Canadian Advertisers): Thank you, Mr. Chair. It's an honour and a privilege to appear before this committee today on behalf of Canadian advertisers and Canadian advertising agencies on an issue that touches the very lives of all Canadians.

The witnesses appearing today represent three organizations that together represent the interests of the Canadian advertising industry. Again, we are the Association of Canadian Advertisers, the Institute of Canadian Advertising, and the Canadian Media Directors Council.

Again, I'd just like to briefly, if I could, introduce the members of our team so everybody knows who's who. First of all, Mr. Jacques Larose is a vice-president with the Association of Canadian Advertisers. Janet Callaghan is the vice-president and corporate media director at the Media Company, MBS, and she is also the director and past president of the Canadian Media Directors Council. Mr. David Harrison is president and CEO of Harrison, Young, Pesonen and Newell, and he is also the chair of the Institute of Canadian Advertising.

Clifford Sosnow is with Lang Michener. I thought it was quite appropriate, because of the representations, that this particular person is at the table. Cliff has five years with the trade and law division of the Department of Foreign Affairs. He's been involved in five WTO disputes. To date, quite frankly, he's the only private legal counsel to be retained by the government to represent them in a trade dispute.

We also have Ken Purchase, who is also with Lang Michener.

Before we get into the formal part of the presentation, Mr. Harrison and Ms. Callaghan would like to make some introductory comments.

Ms. Janet Callaghan (Director and Past President, Canadian Media Directors Council): My name is Janet Callaghan. I'm here today in my capacity as past president and representative of the Canadian Media Directors Council. Our members represent more than 85% of the total expenditures placed in media in this country.

The CMDC is concerned with the slow expansion of magazine titles in Canada in spite of the thirty years of protection that the Canadian government has provided to the Canadian periodical industry. More titles means that advertisers have better access to and coverage of their key consumer target groups. In this regard, the CMDC, like Canadian publishers, would like to see a buoyant market for their periodicals. The CMDC also recognizes the importance of advertising dollars to Canadian publishers.

However, the CMDC parts company with Canadian publishers in their support of Bill C-55. In our considered view, Canadian magazines will remain a single-digit component as total net advertising revenues for advertisers unless the Canadian periodical industry expands the universe of titles it offers. The equation is simple: the greater the number of titles, the more attractive our magazines are as a medium to advertisers.

For the reasons set out in our submission, the CMDC does not consider that Bill C-55 will stimulate the creation of a vibrant and robust Canadian periodical industry. Indeed, as noted in our submission, Bill C-55 as conceived could actually stifle entrepreneurship and the development of new periodicals in Canada.

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Periodicals as a medium in Canada may be underfunded, undernourished, and underutilized. The Canadian periodical industry must examine its own responsibility for this state of affairs. Magazines in Canada have not responded with vigour to attract readers away from foreign publications by developing new magazine titles.

In accepting Bill C-55, the Canadian periodical industry appears to be content with ensuring that advertising dollars are protected despite the loss of readers to an increasing number of foreign targeted publications.

The board of the CMDC is unanimous in its rejection of Bill C-55 as a solution. We perceive Bill C-55 as a regressive step to protect the Canadian periodical industry. Bill C-55 does not embrace a wider view of the tremendous potential of a more vibrant magazine medium that we wish for the Canadian periodical industry.

It's for that reason that advertisers and advertising agencies, as key stakeholders, would be pleased to work with the Canadian periodical industry and the government to develop solutions that are more positive to Bill C-55.

Thank you.

Mr. Ronald Lund: Thank you, Janet.

David.

Mr. David Harrison (Chair, Institute of Canadian Advertising): Good morning, ladies and gentlemen. My name is David Harrison, and I'm here today in my capacity as chair of the Institute of Canadian Advertising.

I'm also here today as the president of Harrison, Young, Pesonen and Newell, the company that in fact conducted one of the media studies commissioned by the Department of Canadian Heritage that was recently tabled with this committee.

The ICA was established in 1905 as Canada's national industry association for advertising agencies. Our 70 members employ more than 5,000 people and place approximately $6 billion worth of advertising annually.

As chairman of the ICA, I would very much like to correct the strong impression that Minister Copps gave in her testimony last week that the ICA supports Bill C-55. Frankly, we fail to understand how the minister has this strong impression that we've come out in support of Bill C-55, because we have not done so.

The ICA was asked by the Department of Canadian Heritage back in July 1998 for its views of the split-run magazine issue the department was studying. The ICA indicated then that it is clearly sympathetic to the aims of maintaining a healthy Canadian magazine industry. However, we are troubled by Bill C-55. The submission that we are tabling today reflects the ICA's concerns about Bill C-55.

While the ICA believes in a regulatory environment that supports the flowering of Canadian magazines for the reasons set out in our submission, the ICA does not believe that Bill C-55 is the way to achieve that goal. The ICA has also been concerned that throughout this entire process of developing a replacement policy, the stakeholders in the advertising industry were not consulted or involved in a meaningful way. Special consultation was reserved only for certain Canadian publishers.

The choice before this committee in examining Bill C-55 is not between unfettered market access to the Canadian advertising market and Bill C-55. The Canadian magazine industry is already protected by a postal subsidy. Also, section 19 of the Income Tax Act permits advertisers to deduct the cost of their advertisements placed in Canadian magazines. Third, Investment Canada, through the Investment Canada Act, screens proposals to establish new magazines in Canada to ensure they are of net benefit to Canadians.

Further regulatory protection may be required, but Bill C-55 is not the way this should be done. A better policy exists somewhere between the polls of totally unfettered market access and Bill C-55.

We, the representatives of the advertising industry, have close and cordial relationships with the very publishers that Bill C-55 aims to protect. We take no issue with supporting the development of a Canadian periodical industry. We ask only that Bill C-55 be rethought and that less harmful yet creative and innovative solutions be developed.

Thank you.

Mr. Ronald Lund: Thank you, David.

As advertisers, we support the objective of the Government of Canada to promote and protect Canadian culture. There are many examples of how Canadian advertising itself supports this idea. In this regard, Canadian ads also tell stories about Canada, our people, our history, and our identity.

If you look at approximately page 6 of the charts, you will see a chart indicating that we in fact contribute about $8 billion to the economy. That's just through our advertisements placed, not through the companies that also have input into the economy.

The concept underpinning Bill C-55, which is that Canadians must be given the opportunity to be exposed to Canadian stories throughout their magazine, is both reasonable and realizable. The government and the minister have repeatedly stated that they want Canadians to have the choice to read these magazines. We couldn't agree more. However, choice cannot be arbitrarily provided.

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Bill C-55 in fact prevents choice. If passed unchanged, it will ensure that Canadians will only be able to read Canadian advertising. To use the government's figures, 15% of the magazines available on the store shelves, or 20%, however you want to look at it, are Canadian magazines only.

Access by Canadians to products and services produced by their fellow Canadians will be restricted. In this regard, Bill C-55's severe restriction on the ability of Canadian advertising to reach as many Canadians as possible makes absolutely no sense at all.

There is, as David said, something between unfettered access by foreign publications and Bill C-55. These alternatives are available to the government to meet its valid concerns about the preservation and promotion of Canadian culture through popular magazines without preventing choice for Canadians or Canadian advertisers.

Parliament, through this committee, has the opportunity to explore these alternatives and engage in a real consultative process that has not existed up to this point in time through the development of Bill C-55.

We intend for Canadians to get a choice, a real choice. Again, I think we all can do much better than Bill C-55.

David.

Mr. David Harrison: There are many myths concerning Bill C-55, and we'd like to tell you about them.

The reality is that there is harm in this bill that this committee, with its lawmakers, has the power, and even perhaps a duty, to prevent. We would like to tell the committee about that harm.

Myth number one is that Bill C-55 is about ensuring that Canadian stories are told. The government's stated purpose in tabling Bill C-55 was summarized by the Minister of Canadian Heritage in a statement in the House of Commons on October 22, 1998:

We have an opportunity and a responsibility as the Parliament of Canada to provide some space on the world's cultural shelf for our stories to be written about and to be heard.

What strikes us when looking at Bill C-55 is not what it does say, but what it doesn't say. Bill C-55 makes no reference to Canadian culture, voices, or content. Bill C-55 is utterly silent on this. Bill C-55 does not require or encourage magazines to write Canadian stories. Bill C-55 does not require or encourage magazines to employ Canadian writers. Bill Bill C-55 does not require or encourage the production of new Canadian magazines. Rather, Bill C-55 is all about Canadian ownership as defined according to some arbitrary criteria.

Myth number two is that Bill C-55 is all about preventing split-run magazines. The government defends the bill by suggesting that it's necessary to level the playing field so that Canadian periodicals can compete with so-called low-cost U.S. split-run periodicals.

Bill C-55 does not speak about split runs. The term “split run” does not appear at all in the bill. In fact, this term does not appear an in any Canadian legislation. Nothing in the proposed legislation targets magazines with minimal editorial costs or a minimal original editorial content.

When we look at Canadian magazines versus foreign magazines, Bill C-55 divides the periodical world into foreign magazines and Canadian magazines on the basis of arbitrary criteria.

For example, under Bill C-55, magazines with 100% Canadian editorial content and 100% Canadian ownership are foreign magazines if by chance the publisher's chairperson is not Canadian. As another example under Bill C-55, magazines with 100% original Canadian editorial content are foreign magazines if Canadians only own 75% of the publisher's voting shares.

Consequently, under Bill C-55, Canadian advertising dollars are not permitted to go to these foreign magazines. In fact, under Bill C-55, none of the following factors has any bearing on whether a magazine is Canadian or whether it can sell advertising space in the Canadian market. Does the magazine have any Canadian content or in any way contribute to Canadian culture or identity? What about the number of Canadian writers employed? And the presence of any reference to Canadian editors is missing.

Under Bill C-55, if 76% of the shareholders of a magazine publisher are Canadian, its periodical will be Canadian. It can sell space to advertisers to who target the Canadian market. If Canadian ownership slips to 75%, the same magazine will no longer be Canadian. It will not be allowed to sell advertising space to the Canadian market.

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Under Bill C-55 this 1% drop removes the magazine from Canadian advertisers who want to sell Canadian products and services to Canadians, and it will have this effect even though there are no other so-called Canadian magazines that will as effectively sell Canadian goods and services. This is perverse.

In fact, the government, in defending this legislation in the House of Commons, acknowledges that the equation between some arbitrary number defining Canadian ownership and the telling of Canadian stories is false. It commended Time, a well-known U.S.-owned split-run periodical, for its contributions to Canadian culture.

In fact, on October 29 a member of this committee told the House that Time has been in Canada for years, that Time has Canadian content, that Time is not a split-run edition. In fact Time is a split-run edition. He said that Time cares about Canadians, that Time continues to tell Canadian stories.

Under Bill C-55, the definition of “Canadian” bears little resemblance to what ordinary Canadians would consider Canadian. Bill C-55 determines the Canadianness of a magazine by examining factors entirely unrelated to the Canadianness of the stories it tells.

The legislation is not about so-called split-run magazines from the U.S. that have minimal editorial content. It is about drawing an ever-tightening circle around what kinds of magazines are Canadian, and about which magazines Canadian advertisers can use to sell Canadian products and services.

Janet.

Ms. Janet Callaghan: Myth number three is that Bill C-55 will stimulate the growth of new Canadian magazines. In introducing Bill C-55 in the House of Commons the minister said that the legislation will ensure the future flourishing of Canadian magazines. It will not.

Under Bill C-55 Canadian advertisers will not be able to direct the advertising dollars to newly formed magazines for the telling of Canadian stories if the periodical falls within the bill's arbitrary definition of foreign. This means that under Bill C-55 Canadian advertising dollars directed at the Canadian market will not go to a new magazine entrant that is 100% Canadian-owned, that employs only Canadian writers, editors and staff, and exclusively prints stories on Canadian arts and culture, if the chairperson if Dutch, foreign, or whatever. Under Bill C-55, simply choosing a non-Canadian chair will ensure that this new magazine entrant does not get Canadian advertising dollars directed at the magazine's primary market, Canada. We fail to see how this will cause the Canadian magazine industry to flourish.

As another example, if a group of Canadian writers decided to start a new magazine in Canada on Canadian arts and culture, but could not find the necessary start-up capital within Canada, they could try to finance the project by offering an ownership share of as little as 25% to non-Canadians. Under Bill C-55, if they did this, the publication would be foreign, and Canadian advertisers seeking to sell Canadian goods and services to Canadians through this Canadian magazine would be prevented from doing so.

Bill C-55 does, however, protect established Canadian publishing interests. It protects Canadian publishing interests from Canadian competition. It does not ensure the flourishing of Canadian magazines. Whether intended or not, this is how Bill C-55 would actually work, to keep Canadians from reading stories promoting Canadian culture. This is the kind of magazine regime this committee will allow if you give your blessing to Bill C-55.

Myth number four is that Bill C-55 will direct Canadian advertising revenues to Canadian magazines. In introducing Bill C-55 into the House of Commons, the minister said it will ensure that Canadian advertising dollars will go to Canadian magazines. It will do nothing of the sort.

It is important to understand that Bill C-55 is built on the flawed premise that if Canadian advertisers can no longer advertise in foreign magazines, advertisers instead will advertise in Bill C-55-approved magazines. Our business world doesn't work that way. Canadian advertisers are business people who select the advertising vehicle that most effectively markets Canadian product and services.

Under Bill C-55, Canadian Tire will not be able to insert a hardware advertisement in Popular Mechanics. Faced with this wall, it will not insert the same advertisement, and I use an extreme example, in Toronto Life Fashion, no matter how attractive the price.

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A magazine that does not target the appropriate readers will be not be an attractive option, no matter the price. If advertisers are forbidden from using the most appropriate magazine, they will not necessarily turn to a Bill C-55-approved magazine. When an advertiser's choice in magazines is severely restricted, as Bill C-55 will do, the advertiser may turn to a different medium that is more effective in reaching its target market. The most dramatic impact of Bill C-55 could be to redirect advertising revenues away from periodicals entirely and into other media, like specialty channels, out-of-home, etc.

Bill C-55 will make periodicals a less attractive advertising vehicle. Over the last thirty years Parliament has drawn an ever-tightening circle around the kinds of magazines that are available to Canadian advertisers. Over the past thirty years advertising in magazines as a proportion of total advertising expenditures has dropped from 11% to 6%. Bill C-55 limits advertisers' choice more than any previous regime. Bill C-55 may direct advertising revenues away from periodicals to other media. In so doing, Bill C-55 will harm the Canadian periodical industry.

Myth number five is that Bill C-55 will not hurt Canadian business. It's a fact of business life that many Canadian companies have chosen to target the Canadian market to sell their Canadian products and services; the Bay, Eaton's and Zellers come to mind. It is also a fact of business life in Canada that Canadian businesses compete with the best of the large multinational corporations. This is particularly true of the North American market. We believe that laws that hinder the ability of Canadians to sell their products and services in Canada will hurt Canadian businesses and the thousands of people they employ. Bill C-55, if enacted, will have this effect.

Bill C-55 prohibits Canadian business from placing advertisements directed at the Canadian market in magazines that Bill C-55 arbitrarily considers to be foreign. Bill C-55 prevents Canadian companies that have chosen to stay at home from advertising Canadian products and services in the same magazine as their multinational competition. Eaton's will not be able to place an advertisement in, for example, People magazine because any Eaton's advertisement would necessarily be directed at the Canadian market. There is no Eaton's in the United States. There is no Bay in the United States. There is no Zellers in the United States.

The foreign competitors in the Canadian market such as Wal-Mart would be free to advertise in People provided the advertisement did not specifically target the Canadian market. Wal-Mart would be able to reap the benefit of its advertising in the North American market, while readers of the same magazine would be forbidden by Bill C-55 from seeing the products and services that Eaton's sells.

Bill C-55 gives large foreign companies with an international presence an additional advantage over distinctly Canadian businesses. Canadian products and services contribute to Canadians' sense of identity. How many of us do not feel a sense of pride when reading that Canadian wines have won yet another competition against the world's best in London or Paris. Yet, ironically, under the guise of protecting our culture, Bill C-55 will further reduce the ways in which Canadian business success stories can showcase their talents to Canadians.

Mr. Clifford Sosnow (Lawyer, Lang Michener, Barristers and Solicitors; Canadian Media Directors Council): I'm going to be speaking on the international trade dimensions of Bill C-55. I think it's something that forms an important context in your examination of the bill, because in our considered view Bill C-55 would violate those international trade rules. We'd like to tell you why.

There are two agreements you have to think about when you're looking at the international trade rules, and right now I'm looking at myth number six of your chart. For those of you who have the submission, it's on page 8 of the English,

[Translation]

and I think it's on the same page in French. Yes, it's on exactly the same page.

[English]

On your chart it would be myth number six, the GATT versus GATS argument.

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The Chairman: And it would be on page 8 in the main text?

Mr. Clifford Sosnow: Yes, sir.

The Chairman: Okay, sorry. Go ahead, Mr. Sosnow.

Mr. Clifford Sosnow: Thank you, sir.

There are two agreements that you have to bear in mind. You've probably heard enough about them that you don't want to hear any more, but they are crucial to your analysis, as lawmakers. One is the GATT, which I'm sure you're all familiar with, and the other is the GATS. The GATS deals with services; the GATT deals with goods. Both have what's known in trade parlance as national treatment obligations. They're basically what's known as non-discrimination provisions. Foreign services or foreign goods have to be treated like domestic services or domestic goods.

The Minister of Canadian Heritage has said in the House that Bill C-55 is all about advertising services, and they are covered only by the GATS, not the GATT. We'd like to challenge that proposition and explain to you why that's not the case and what the implications are for you.

To be covered by the GATS national treatment obligations, advertising services, along with any other service, have to placed on a list that the Government of Canada gives to the WTO. If it's not on the list, then the national treatment obligations don't apply.

It's true that Canada has not put advertising services on the list it has given to the WTO. So for purposes of the GATS—the services side of the equation—advertising services are not covered by the national treatment non-discrimination provisions. But with great respect to the minister, that's not the only international agreement that applies to Bill C-55, and there are two World Trade Organization court decisions that have said otherwise.

The first World Trade Organization court decision dealt with our own split-run legislation. At the time, the appellate body of the World Trade Organization said that a magazine is made up of two elements—editorial content and advertising content—and that each of these has a services element to it, but that both of them combine to form a physical good: the magazine. In other words, you cannot divorce the services element of advertising from the goods element of a magazine.

And if we're talking about goods, we're talking about the GATT. And if we're talking about the GATT, we're talking about the non-discrimination rules that apply to the GATT. And the non-discrimination rules that apply to the GATT apply to all goods. There is no list of covered goods.

There was a second decision that came out three months after the split-runs decision, and it was an appeal decision. The appeal decision is made up of an august body of lawyers, some of whom have up to 30 or 40 years of experience in the GATT and the WTO. They have said that services supplied in conjunction with goods are covered by the GATS and the GATT. That's an important formula for you to remember: services supplied in conjunction with goods.

What do we see when we look at Bill C-55? If we look at clause 3 of Bill C-55, which is the main charging clause of Bill C-55, it says, “No foreign publisher shall supply advertising services...”. Let's just stop right there.

[Translation]

3(1) il est interdit à tout éditeur étranger de fournir des services publicitaires destinés au marché canadien...

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[English]

Then, when we look at the definition clause, “advertising services” is the very first definition in the English version, and it says:

“advertising services” means the supply by a foreign publisher, for payment, of

(a) advertising space in a periodical...

[Translation]

In French, Ms. Tremblay, “services publicitaires” means...

Ms. Suzanne Tremblay (Rimouski—Mitis, BQ): It's on page 3?

Mr. Clifford Sosnow: Yes.

“services publicitaires” La fourniture par un éditeur étranger, contre rémunération:

a) d'un espace publicitaire dans un périodique...

[English]

What does that mean? Remember what we said before: services supplied in conjunction with goods bring in the GATT and its non-discrimination rules, and they apply to all goods. Well, Bill C-55, as I've just shown you, is precisely about the supply of advertising services that relate to foreign periodicals, which are goods, according to the WTO, and will bring GATT non-discrimination rules into play.

I don't think it takes a very detailed reading of Bill C-55 to see that it treats “foreign” magazines—and I use the word entre guillemets, because it's a very artificial definition—differently from domestic magazines. It discriminates against foreign magazines. The whole function and purpose of Bill C-55 is to discriminate against foreign magazines.

It is on that ground alone that we consider that Bill C-55 is highly susceptible to challenge.

So when you hear that the minister says this is about advertising services, with great respect, that's only part of the story.

I want to very briefly touch on myth number 7, and that is in respect of the charter.

[Translation]

It starts on page 12

[English]

of your submission. It's fairly straightforward, or we think it's fairly straightforward, and we think there's a vulnerability as well.

As you all know, free expression is guaranteed by the charter. The Supreme Court has held that free expression includes commercial expression, and the Supreme Court has also said that commercial expression includes advertising. So it's a bit like the Russian dolls—you open up each one and you find another element to it—but the bottom line is that advertising is protected by free expression guarantees in the charter.

What does the Supreme Court have to say about that? It says legislation that controls where advertisers may put their message and to whom they may direct their message will infringe freedoms of expression. Clearly, as we have just gone through pains to tell you, Bill C-55 is all about restricting choice.

If there are five doors that advertisers could potentially go through, and the government closes four of those five doors, it's not enough for the government to say, “You can go through that one door.” The mere fact that four doors have been closed will violate that freedom of expression.

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There are certain permissible infringements, but there has to be a balancing test. The benefit has to outweigh the harm. Given the objectives of the legislation and the benefits, if any—and we fail to see what those benefits are, as we have just described them to you—and given the harm to Canadian periodicals and to Canadian businesses, in our view that balance is skewed in favour of the harm and would not pass permissible infringements on freedom of expression rights.

I'll now go on to our assessment of Bill C-55 as public policy.

Mr. Ronald Lund: That is section C in the charts, or page 12 on the written commentary. I have to apologize. The written commentary wasn't supposed to be distributed at this point.

We do strongly believe that Bill C-55 is in fact bad public policy. As I think we've demonstrated, Bill C-55 is not about protecting Canadian culture. It's about banning Canadian advertisements directed at Canadians in foreign magazines regardless of Canadian content.

In the process, Bill C-55 fails to comply with Canada's international trade obligations. It infringes on the free expression of Canadian advertisers, and it needlessly puts Canadians at risk of retaliation. Simply put, Bill C-55 does not promote Canadian culture.

What are we asking from this committee? What do we want? First of all, we would like the government to slow down. We would like you to consider listening to advertisers and advertising agencies as key stakeholders in this process.

Secondly, we would like Bill C-55 to be considered as a panic response when there's no need to panic to develop a solution that promotes culture and complies with international trade law. But we need one that also maximizes the advertiser's choice. Together, we can do, as I've said before, better than Bill C-55.

In conclusion, the Association of Canadian Advertisers, the Institute of Canadian Advertisers, and CMDC, the Canadian Media Directors Council, respectfully request the Standing Committee on Canadian Heritage to do two things: one, conclude that on balance Bill C-55 will create more harm than good; and secondly, recommend that the minister consider means other than Bill C-55 to promote the Canadian periodical industry. Thank you for hearing our side.

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

I will now open the meeting to questions. Mr. Mark.

Mr. Inky Mark (Dauphin—Swan River, Ref.): Thank you, Mr. Chair. First let me apologize for being absent last week during these hearings. I look forward to coming back.

The Chairman: That's fine.

Mr. Inky Mark: Again, welcome to the hearings. It's very interesting, on the flip side of the coin, how you perceive this as restricting and stifling the industry rather than promoting it, because the minister's point of view on this whole bill is about protecting culture and promoting the whole magazine industry.

I was taken aback when one of the presenters stated that the stakeholders were not consulted in a very comprehensive manner. Who was actually consulted? Were any of this group consulted through the consultation process by the minister?

Mr. Ronald Lund: In the development of the bill, absolutely not. None of us were.

Mr. Inky Mark: I find that very surprising, and actually disturbing, because given the effect a bill of this magnitude would have on the industry, you would think the government would realize an important component is that the stakeholders should be consulted.

Further, we know that two organizations will be grandfathered—Time and Reader's Digest—and will be exempted from the act. The question is, would this be consistent with international trade rules?

Mr. Clifford Sosnow: If I can just add to that, when we met with department officials and we asked to be a constructive voice in the development of proposals, we were specifically informed that the government had a special relationship with the Canadian magazine industry and therefore there would be certain information that would be provided to the magazine industry and a certain closeness in relationship to the magazine industry that would not be afforded to advertisers in this process.

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With respect to your other question... I'm sorry; could you please repeat that?

Mr. Inky Mark: Do you think a grandfathering provision that puts Time and Reader's Digest in a schedule exempting them from the act would be consistent with international trade rules?

Mr. Clifford Sosnow: We understand that one of the suggestions that had been discussed was putting Time magazine as an exempt publication, putting it in some kind of schedule. In our view, exempting Time magazine and only Time magazine, as a foreign periodical under the definition of Bill C-55, would violate international trade rules.

It would violate this rule called MFN, or most favoured nation. As you all know, Time magazine is owned by an American publisher. MFN rules say that goods coming from one country must be treated no differently from goods coming from another country, and from the services side of the equation, services supplied by a service supplier from one country must be treated no differently from services supplied by a service supplier from any other country. The MFN rules on the services side would apply to advertising services.

The list of services only applies to national treatment. The MFN rules regarding services apply to all services. So in our view, the suggestion of putting Time in some kind of schedule would violate international trade rules.

The reason we mention it is we don't think there's any quick fix here. It's not just a simple matter of putting these things to the side and saying fine, we'll tinker here and tinker there, because there is a web of international trade rules that have to be considered. We are a law-abiding country. Solutions have to be thought out. In our view, this would violate those rules.

The Chairman: Mr. Mark, you may ask one brief other question.

Mr. Inky Mark: It appears from our discussion that this is really more of a trade issue than a cultural issue, and that's a question I have to ask myself, being the critic for heritage. I'm trying to figure out a balance between the impact this bill will have on the industry in the country and the impact it will have on the industry internationally. If we see this as a trade issue, really a trade bill, what do you think this committee should do to see whether or not Bill C-55 would stand a NAFTA or a WTO challenge?

Mr. Clifford Sosnow: A couple of options are open to you, if in fact you wanted to pursue those options.

We can't emphasize enough that there is a trade law firmament to this bill. It's no secret that Bill C-55 was cobbled together with a view to ensuring that it would be consistent with trade rules. We have presented to you indications that it would not be.

We could suggest to you, in your wisdom, to have this bill also considered by the Standing Committee on International Trade to hear the international trade dimensions. We would welcome a debate. We would welcome hearing other voices. We would welcome hearing Minister Marchi and his senior officials on this bill. And we would be delighted to appear at that hearing and provide further submissions as requested.

The Chairman: Mr. Mark, it's important at this stage that I clarify the mandate of this committee. Once legislation has been referred to us by the House after second reading, our mandate is very clear: we hold hearings as necessary, which we are doing right now. But we cannot transfer the bill to another committee of the House, because the bill is under the jurisdiction of the Ministry of Canadian Heritage.

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This is the committee that applies to the Ministry of Canadian Heritage. Our purpose here is to examine the legislation as given to us and to amend it as members consider necessary. We cannot comment on the thrust of the bill, except in discussing with witnesses. We cannot hold a debate in another committee. Our mandate here is strictly to look at the bill as presented to us and to amend it and change it within the rules of the House.

I wanted to make that clear, because that is our purpose here.

Mr. Inky Mark: Mr. Chair, I agree with you, but because the witnesses bring new points of information and new suggestions, on this particular issue I would suggest we invite the Minister for International Trade or his representatives to the table so we can ask that department questions relevant to this bill.

The Chairman: Mr. Mark, as you know, you have already made that request, and the request has been considered by the committee already, as you know. I think you formulated it in the way of a motion, which was dealt with.

Mr. Inky Mark: Was it passed or was it defeated?

The Chairman: If my memory serves me right, it wasn't passed.

Mr. Inky Mark: Well, would this committee reconsider the same motion?

The Chairman: You'd have to have the unanimous consent of the committee, but I would suggest that right now the purpose is to hear the witnesses. After that, if we can have a business session, you would have to ask for unanimous consent of all the members to reopen it. The motion was defeated.

Mr. Inky Mark: I agree with you, Mr. Chairman. It's just that, again, questions are being raised by the witnesses that we need to deal with.

[Translation]

The Chair: Ms. Tremblay.

Ms. Suzanne Tremblay: I have a few short questions that will probably call for short answers.

On page 6 of your brief, there is a chart showing Canadian advertising dollars spent over the years. Do these advertising dollars include money spent in American magazines or do they represent only dollars spent in Canada?

[English]

Mr. Ronald Lund: This is only Canadian, yes.

[Translation]

Ms. Suzanne Tremblay: Do you have comparable figures for what you spend in the United States? Would you not have spent anything in the United States?

[English]

Mr. David Harrison: We could provide specific answers to that question, but the general relationship between media spending in the United States and media spending in Canada will surprise you, I think. Most people say, well, the population is about 10% of the U.S.'s, so our spending would be about 10% of the U.S.'s.

[Translation]

Ms. Suzanne Tremblay: That doesn't answer my question. How much have you Canadians spent on American advertising sold in Canada? How much?

Mr. David Harrison: I don't know.

Ms. Suzanne Tremblay: It would be interesting to find out whether the new Act prevents you from doing business. If you haven't done any up to now, it's not the new Act that will prevent you from doing business. That's what we have to know. Are you able to provide that information to the committee?

Mr. Clifford Sosnow: We will try to provide it to you.

Ms. Suzanne Tremblay: That's fine. On page 20, you say:

Bill C-55 directly controls where advertisers may put their message and to whom they may direct that message toward, thereby infringing on their rights to freedom of expression.

As you know, we are in the middle of an election campaign in Quebec. Each party has the right to advertise for its candidates. You are free to put whomever you want on the sign and whatever message you want, but you are not free to place this advertising wherever you want. You have to put it on a certain type of post, at the right height, not on a street corner, not in the way of traffic lights, etc. So, in our own campaign, we must comply with many rules. But that doesn't lead us to claim that we don't have freedom of expression.

So, I personally find that the cause and effect relationship that you establish between not having the right to invest in the United States and loss of the right to freedom of expression is somewhat forced.

• 1155

[English]

Mr. Clifford Sosnow: With the greatest of respect, these are not our words. These are the words of the Supreme Court of Canada, and we can provide you with full submissions on those points.

There is, of course, a balance between recognizing restrictions on where advertisers' expressions are violated and recognizing what is permissible as restrictions in a free and democratic society. From looking at those provisions and those decisions in the charter as they apply to Bill C-55, it is our view that there are restrictions, that there are clearly vehicles that will not be open to Canadian advertisers advertising in the Canadian market. This would not be justified in a free and democratic society, and that is the key balancing test.

Mr. Ronald Lund: Further to that, taking it outside of the constitutional issue, right now advertisers do in fact make that choice. They make the choice not to advertise in magazines. If you look at the statistics that have been presented before this committee, Canadian magazines only account for about 6% of the dollars spent in Canada. If you look at other countries, the figure is 15% in the U.S.A., 24.7% in the U.K., and 10.7% in Australia, all greatly more.

What we're trying to say—and as the HYPN study that has been referred to so often says—is that if there are more magazines from which to choose, we're not going to increase overall dollars, but we will in fact take those dollars that are going to other mediums but can be better targeted through magazines and we're going to use those. Right now, the choice we have drives us away from using magazines as our choice, so it's not just freedom of expression.

Mr. Kenneth Purchase (Lang Michener, Barristers and Solicitors): If I could just add something briefly on the freedom of expression issue, as you point out, the balancing under any sort of violation of freedom of expression is going to vary, depending upon the expression involved, the legislative objective, and the means employed to achieve that objective. Certainly in the case of political expression surrounding election campaigns we have an overriding objective that's very important, and the legislation has to be carefully tailored to achieve that.

What's going to be problematic in the case of Bill C-55 is that the objective itself isn't even clear from the legislation. It's talked about in the House of Commons, but then, in order to avoid any problems at the World Trade Organization, it's not specifically addressed in the legislation itself. You're left to guess at what the objective is. We'd suggest that it's arguable that a court considering this is going to look at it and say the objective is clear: to evade compliance with Canada's international trade obligations. We would suggest to you that this is not going to be found to be an objective that is pressing and substantial enough to warrant overriding the rights of Canadian advertisers to free expression.

Even if a court did look at that objective and actually came away saying that Parliament is actually trying to protect the Canadian magazine industry or promote the telling of Canadian stories, if you go through Bill C-55, as we've just done, you see this is not the effect it is clearly going to have. It's going to affect Canadian magazines as well, and it's going to let the biggest of the American magazines in.

So it's not even clear how this bill actually sets about achieving those goals in the first place, and in doing it, it certainly impairs the rights of those who are involved far more than is necessary.

As we've talked about from the beginning—

The Chairman: I thought you said you were going to be brief.

[Translation]

Ms. Suzanne Tremblay: I just have another short important question.

[English]

Mr. Kenneth Purchase: If the committee would be pleased, we would be very happy to submit detailed submissions on the charter, as you can appreciate that they are detailed.

The Chairman: In fact, if I may butt in, some of the members had written me a note asking if you would submit a legal brief on the constitutional issue, and also on the GATT and GATS issues if you could.

Mr. Clifford Sosnow: We'd be delighted to, sir. Is there a particular timeframe you had in mind for us to submit it?

The Chairman: As soon as possible, and you can send it to the clerk of the committee.

Mr. Clifford Sosnow: Thank you, Mr. Chair. And I meant no disrespect to you or to members of the committee before, when I suggested an examination by the other standing committee.

The Chairman: No, I understand. I didn't take it that way, Mr. Sosnow.

[Translation]

Ms. Suzanne Tremblay: I have another question. You say on page 22, in your conclusion, that there is no need to panic, that we could sit down and do the work over again. I myself had understood that there was a certain urgency to it because the court gave the Canadian government a certain number of months to react to the ruling handed down.

• 1200

I do not wish to show any disrespect either. I will try to be tactful, although I left my kid gloves behind in my office.

Last spring, the lobbyists from the magazine group appeared before us. Where were you in the month of May? Why did you not come and meet with us, to explain your viewpoint? One month ago, my office called you to find out your views, since the review of the bill was coming up. Our call was returned yesterday. You suddenly remembered that we had called one month earlier.

If it's so important, why weren't we told about the size of the problem before? Now it's five minutes to midnight and you seem to be saying that this bill is absolutely atrocious and that we should prepare another. A bill can be changed a lot more easily before first reading than during third reading.

[English]

Mr. Ronald Lund: We share your concern. As a matter of fact, we were never brought into the process on a request basis. On approximately June 5, we found out there was lobbying going on by the magazine publishing industry. I asked Mr. Sosnow if he would please check this out, since we were not informed about this at all. He approached Bruce Stockfish at the Department of Justice and asked if there was something going on here. Mr. Stockfish said there was, so Cliff asked why the stakeholders who are placing the advertisements wouldn't be involved in this. I think there was a red face on this. That was a Friday, I believe. By Tuesday, we had met with Bruce Stockfish. We implored to be involved.

We met with Don Stephenson, Bruce Stockfish, and Allan Clarke, and we asked to be involved at that point in time. We recapped our perspective at that point in time. We never heard from them again. We requested to have the material sent on the research. We finally got it after a period of time, which was nice. We were informed by Mr. François de Gaspé Beaubien that we shouldn't worry, that we'd be involved, that nothing would happen. Two days later, Ms. Copps made her announcement. We again asked to have representation, but we didn't get the chance.

The only time we were able to meet with anyone from the government was when we met with with Mauril Bélanger. We were told this was going through, that we could indicate some of the changes we wanted and that it might be possible to accommodate them, but that the train had left the station. So we share your view that this has been an extremely unfair and wrong process.

The Chairman: Thank you.

Ms. Wendy Lill (Dartmouth, NDP): I'm very concerned about the increasing control by American publishers in this country, and also about just the general health of the Canadian publishing industry.

Mr. Harrison, do you stand by the conclusions of the study you prepared for Canadian Heritage, particularly your conclusion that if U.S. publishers could access the Canadian advertising services market, a very significant portion of the Canadian advertising pie would go to those publishers and many Canadian publishers would fail?

Mr. David Harrison: Yes, I do, but I think it's important to bear in mind that the study we conducted was done to predict how things might evolve if foreign publishers were let in on an unfettered basis.

We're not here today to suggest that there shouldn't be any protection for Canadian publishers. We understand the need for it. We understand that they can't compete completely without some kind of help. We just think there's a place between letting everybody in and drawing the line in the sand and turning off the lights. That would be a more imaginative, more creative place to be, and in the end it could help foster more magazines in Canada.

Ms. Wendy Lill: I guess it would be cold comfort for the submitters from the publishing industry who were here last week to hear that you think some of them belong but a lot of them will fail.

Mr. David Harrison: We only said they would fail if there was no kind of protection. Again, we're not here today suggesting there shouldn't be any kind of protection. We have very good friends in the publishing industry, and we support the Canadian publishing industry.

Ms. Wendy Lill: I'm assuming that you do want a viable Canadian publishing industry. If you oppose Bill C-55, though, what alternative do you have that will accomplish the same objective as Bill C-55 is attempting now?

Mr. David Harrison: Well, as we understand it, Bill C-55 simply talks about the ownership of magazines. It doesn't talk about promoting Canadian culture or about promoting Canadian stories, it just talks about ownership. I'm sure we would have many ideas. We have looked at ideas.

• 1205

One idea we've looked at is perhaps introducing a form of the broadcast model into the magazine world in Canada. It's a model in which there would be some kind of partnership with producers of American magazines, the kind that would allow some partnerships, for instance, such as the one that exists with Elle-Québec, which is owned by Télémédia. These kinds of ideas would be completely forbidden, really. There would be no possibility of new ideas like these flourishing once Bill C-55 is in place, if Bill C-55 is indeed put in place.

The Chairman: Last question.

Ms. Wendy Lill: Do you worry that if the Canadian advertising services market comes to be dominated by American publishers, many more of these decisions are going to be made in New York instead of Halifax, Ottawa, or Winnipeg? Does that bother you?

Mr. David Harrison: We have lived next to this large neighbour for a long time, and this is an issue we have lived with for a long time. We know we have to have certain kinds of protection to make sure we have a viable industry, not only in advertising but in other areas. I think we've been able to do this. As I said, we do it in the broadcast system.

Do I worry that all of our decisions are going to be made for us in New York? I do not. This is a different country. We have different marketing issues. We have a very complicated media market. We need to have Canadian media. We need to have Canadian advertising services professionals. Naturally, we need to have Canadian magazines to run our messages.

I don't know if that answers your question or not.

Mr. Ronald Lund: If I may, Mr. Chairman, could I just add something?

The Chairman: Yes.

Mr. Ronald Lund: I've brought in an example to hold up here. We often look at a Time or a People as the big bad wolf. What I did—and it wasn't easy, because I wasn't as familiar with the Quebec market that I took this from—was find an example of what it could look like.

I'm not a legislator and I'm not a lawyer; I'm just an advertiser. I represent advertisers. What I have here are four publications all with the same name. These are all bought at the same place, at exactly the same store. They're all Elle magazines. I went to the publishing stand and I got an Elle from France, an Elle from the U.K., an Elle from the United States, and a very interesting one here called Elle-Québec. What Elle-Québec managed to do, quite legally, was to take an international title, like a People or any other magazine you may want to take, and stuff it chockablock full of Canadian and Quebec stories. It has a few American ones, too—I think it talks about Gwyneth Paltrow in there—and it has Canadian advertising in it.

Forgetting about the construct of what an ideal would look like, this would be my ideal. As an advertiser or someone representing advertisers, I ask why we don't get something together that's going to allow us to do this. This is telling more Canadian stories than you'd get if they were not allowed to be in the country. This has more content, and it allows us choice and access to the people who read Elle.

I just wanted to give a real example.

The Chairman: Thank you.

Mr. Muise.

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

I have a comment, and then a question. I'd first like to thank our witnesses today, because I think they bring us to an important part of this discussion. As my colleague Madame Tremblay has just mentioned, though, this was a point I brought up about ten days ago, when I had the opportunity to meet with the representatives from the advertising industry. It concerns me greatly, so I have to say this for the record. Please bear with me, because this is not out of disrespect in any way.

We did have the publishers here in early September. We met with them and we heard their side of the story. At our meeting the other day, comments were made that the advertisers were greatly concerned. I said “Why, after second reading, do you come to see us and lobby us for support?”

I heard your answers, and I recognize some of the difficulties you have talked about. However, I want you to understand that in order for us to be able to see both sides of the story it's important that you make us aware of your concerns.

Having said that, I've heard on numerous occasions the comments that Bill C-55 is not a good piece of legislation and that there are other alternatives. I heard my colleague Madame Lill make comments asking what something more middle of the road would be.

• 1210

Could you give me something, or give this committee some concrete evidence of what would be middle of the road, and maybe in a more detailed fashion, if you would, please?

Mr. Ronald Lund: That is not in our purview to do that. What we went with when we found this legislation was afoot... We asked a similar question: What would you do? Well, we suggested several things. We suggested first of all that perhaps you may want to use direct subsidies, which from our understanding probably would comply with the WTO.

The response was the publishers don't want subsidies. We said, geez, it's good for the CBC, it works, and it's good for the film industry, so why wouldn't we use this? And we were told the business optics wouldn't look good: How will we show our investors that part of our funding is through government? How can we be assured of consistency of funding over time?

So now we get into a business issue. It's kind of like jelly on the wall. I thought we were talking about how we could do it, so we offered that up. There is the potential of tax incentives, which were in fact put out in a 1994 study, that could further and maybe enhance the industry.

Many moons ago I asked Mr. Warrilow, who was then the chair, which part of the economic value chain is giving us grief. Is it distribution? Is it editorial content? Is it the cost of paper? Let's look at what the problem really is. Can we show some support there? The answer fell on deaf ears again there.

As Mr. Harrison has said, we've looked at the broadcast model. Magazines are very small in this whole pie. We manage with broadcast to find a model that allows Canadians to talk to Canadians, and we do it very effectively. So we broadly said why can't a model such as that, or a derivative of that model be applicable here? There are obviously ways of doing this in the print area, and I think we should find more ways of doing that.

But in terms of sitting down... All the money our association had was to get here today. But we would love to sit down and dialogue with the industry, which we've repeatedly asked for, put our heads together, so when you look at how this thing works, maybe as a triangle, you've got government and cultural interests that we support; you've got publishers' interests that we support. But the people who aren't involved in this thing are the people who make the engine.

I keep asking, how are you trying to influence us on where we want to put our dollars when you kick us in the head? Work with us. So I share your disenchantment, but please see our side as well. This has been a very poor process for us as well.

Mr. Clifford Sosnow: And I think it's important to recognize we're not an enemy of the Canadian publishing industry; we are friends of the Canadian periodical industry. And we are not an enemy of the government; we want to work with the government.

We made it very clear back in May, before there were any proposals that ever saw the light of day, that we'd like to be there with you in your development of your proposals. It's important for you to understand we've consistently had the door closed in our face on this issue. You have been approached by the publishers on this, and quite frankly the Canadian publishers have had a serious information advantage over advertisers. We have constantly been on the responsive on this one, and on the defensive in trying to respond to some of the issues the publishers have raised.

The Chairman: Are you satisfied?

Mr. Mark Muise: Partly.

The Chairman: We can go back to it in the second round.

Mr. Mark Muise: Yes.

The Chairman: To complete the first round, I have Mr. Bonwick, then we'll go on to the second round.

Mr. Paul Bonwick (Simcoe—Grey, Lib.): Just before I start, Mr. Chairman, I have a point of order. Mr. Lund suggested this was all the money they had to get here to make their presentation. Is the budget not assisting in the cost of their transportation, accommodation, and so forth?

The Chairman: If witnesses request assistance for travel and so forth, then we get into gear. If none is requested, we don't.

Mr. Paul Bonwick: Thank you.

Mr. Clifford Sosnow: Thank you for the offer, in any event.

Mr. Paul Bonwick: I certainly wasn't making you an offer. I was making you aware of something.

I have several points I'm going to try to touch on, so I'd like to have the answers as brief as possible without cutting short your response.

• 1215

Mr. Sosnow, you've made some statements or allegations with regard to certain things, and I'd just like some clarification on them. You stated that the Canadian government had a “special relationship”. I was writing down notes as you were speaking. You said that based on this so-called special relationship with the magazine industry, the magazine industry enjoyed access to privileged information that you did not have access to.

What I would like to do is ask you now, sir, to tell this committee who in the minister's office or department provided you with the information on this allegation.

Mr. Clifford Sosnow: We're not suggesting for a moment that any cabinet confidences were shared. We're talking about a dialogue with the industry in the development of proposals.

Mr. Paul Bonwick: Sir, what you stated was “privileged information”.

Mr. Ronald Lund: Maybe I'll answer that, because he got that information from me.

There have been at least three occasions, David, where, correct me if I'm wrong... Maybe we were given a false impression by the gentleman, but certainly François de Gaspé Beaubien met with the Canadian Media Directors Council on two occasions. He said that he was not able to share information and that he was sworn to secrecy by the government. But they were told to trust him that there would be no harm to advertisers through this legislation.

He also told that story when I was president. I can go back to my daytimer and find you the appropriate date.

We were told certainly on three occasions that there was this relationship with the government and that they were not allowed to share information with us.

Mr. Paul Bonwick: I think it should be clearly noted that this was hearsay at the time. It was suggested that they did have access to privileged information. Certainly it's a question that I have asked the minister's office as well. It has been clearly stated that there was no privileged information shared with any specific stakeholder in this organization, period.

Mr. Ronald Lund: The one piece of information I noticed—

Mr. Paul Bonwick: I might even take it a step further to suggest that the preamble with regard to accessing members of Parliament or members of this committee to provide them with information or educate them on what your position is... I maintain an open-door policy, as do most of my colleagues, I think. And I certainly had no request, as of today, from any of you people at the table to either discuss the background on the phone or in person.

Mr. Mark certainly asked whether you had not been involved in the process. Well, I suggest to you that you are involved in the process right now. We're working through this in trying to massage the legislation to see how it can—

Mr. John Godfrey (Don Valley West, Lib.): I have a point of order. I think Mr. de Gaspé Beaubien will be with us on Thursday. So if there's any ambiguity about these conflicting stories, we'll be able to clear them up.

Mr. Ted McWhinney (Vancouver Quadra, Lib.): It will be direct evidence.

Ms. Janet Callaghan: Just very quickly on that note, the Bureau of Competition Policy has visited us in the advertising business twice to find our points of view in terms of making rulings on acquisitions in the newspaper business. They have approached us for our point of view as stakeholders. If you're considering legislation, why would we not have been approached?

Mr. Paul Bonwick: Hence my point that there's an open-door policy. Certainly this is one step in providing you the opportunity to discuss it today.

Mr. Ronald Lund: We weren't approached.

Mr. David Harrison: We've also been criticized here this morning for not making our points known to you. You're telling us now that this is—

Mr. Paul Bonwick: This is an opportunity for you to certainly do so.

Mr. David Harrison: We agree. That's why we're here.

Mr. Paul Bonwick: You have done so in a very concise manner, and I congratulate you for it. I'm just suggesting that there has been an opportunity for you to do so in the past as well. That opportunity was not taken advantage of, certainly with my office.

The Chairman: Could we move on, Mr. Bonwick, please?

Mr. Paul Bonwick: Could you give me your opinions on whether or not you believe that foreign publications potentially have an enormous advantage over Canadian magazines in terms of cost of production?

Say I pick a foreign publication, and then say they produce three million copies. Then I take a Canadian publication, and say they produce 300,000 copies. Do you deem the foreign publication to have an enormous advantage in the cost of production?

Mr. Ronald Lund: In what context?

Mr. Paul Bonwick: This is in the cost of production, sir. If you take the cost of producing a magazine based on three million copies rather than 300,000, would it be your opinion that the cost would be significantly less when you get into mass production?

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Mr. Ronald Lund: Is this with the United States or with—

Mr. Paul Bonwick: It's for foreign publications, period. You can cite an example in the United States or Europe, wherever you wish.

Mr. Ronald Lund: Generally speaking, things that run longer have a lower cost per unit.

Mr. Janet Callaghan: I would like to make the comment that many of us have worked for multinationals, and when you make a creative piece to go in a magazine, a lot more money is spent in the United States than in Canada. To make an advertisement in a magazine, we still try to stimulate and persuade the consumer with the different amounts of money that are spent.

The Chairman: This is your last question, Mr. Bonwick.

Mr. Paul Bonwick: Mr. Lund certainly answered the question for me. It's strictly a dollars and cents issue, then. Certainly there are other options that have been investigated through the Department of Canadian Heritage to see what support mechanisms they could come up with to help safeguard the Canadian magazine industry and Canada stories.

But if you look at it strictly from a dollars and cents standpoint, if we see, as a government, there's an opportunity for a foreign publication because of an advantage in the cost of production to significantly secure a larger portion of that Canadian market, and in turn effectively devastate the Canadian magazine industry, do you not see us having to come up with some sort of viable option to ensure that this Canadian vehicle for delivering Canadian stories is in place?

Mr. Ronald Lund: We've always concurred with the overall goals. The fact of the matter is that Bill C-55 doesn't do that.

Mr. Paul Bonwick: That's in your opinion. Thank you.

The Chairman: On the second round, I've got requests from Ms. Bulte, Mr. Godfrey, Mr. Mark, Mr. Bélanger, and Mr. Muise. Go ahead, Ms. Bulte.

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

Thank you for your presentation.

Very quickly, Mr. Harrison, you stated—this was just repeated now by my colleague—that nowhere in the bill does it state the intent of what the minister said in the House when the legislation was tabled.

Now, correct me if I'm wrong, but didn't you, Mr. Sosnow, say that it was not put in intentionally so that it wouldn't violate our international trade agreement?

Mr. Clifford Sosnow: No. If I recall, I said that the international trade rules are a key element in considering whether or not you, as lawmakers, should allow this bill to pass. Certainly the minister was and is aware of those international trade rules, and has tried in introducing this legislation to be consistent with those trade rules. We happen to think, in our considered view, that it's not consistent with those trade rules.

Ms. Sarmite Bulte: No, I understand that. I'm trying to get at the particular reason as to why there are not recitals or “whereas” clauses in here.

I seem to infer from what you said that the reason it didn't specifically say the purpose of the legislation is because we risked basically putting up a red flag in front of the WTO and saying we have a problem here. Yes or no? I may be wrong, so please correct me if I'm wrong.

Mr. Clifford Sosnow: With great respect, you can put recitals into legislation and be entirely consistent with world trade rules.

Ms. Sarmite Bulte: Is that a solution, then? Perhaps we should consider putting recitals in this legislation. If your concern is that we're not showing the intent of this legislation, should we not amend the legislation accordingly?

Mr. Clifford Sosnow: With great respect, the legislation on its face is discriminatory against what the bill calls foreign periodicals. Putting recitals into the legislation is not going to make the legislation consistent with trade rules. We're not suggesting that putting in recitals will make it consistent with trade rules.

Ms. Sarmite Bulte: You're not suggesting it. Okay.

The Chairman: Could we pass on to Mr. Godfrey, please?

Mr. John Godfrey: I must say that as I read your submission and listened to your testimony, I was reminded of the old expression, “The more they talked of principle, the faster we counted the spoons”.

I guess I was curious to follow the money. This is really following up on Madame Tremblay's question. Under the existing regime, before Bill C-55, in terms of advertising in the United States, what economic advantages do you have that currently exist that will be taken away? Or are we talking in the realm of theoretical future advantages because there will be a potential outlet that you can't tap into?

You're on shaky ground with the committee, if you don't mind my saying so. When the magazine publishers come before us, they show us figures. They show us the economic model and the split runs, and they say what happens to them. You talk of principle, but you don't talk about money. I want to talk about money.

Mr. David Harrison: I might take a shot, and I'm sure others will join in.

• 1225

This may not be an economic decision one would make, but we are permitted under the previous legislation to advertise in foreign publications. We just can't deduct it as a business expense.

Mr. John Godfrey: How much do you do that?

Mr. David Harrison: Oh, I wouldn't think it's very much at all.

Mr. John Godfrey: Okay.

Mr. David Harrison: I think the point is that while we don't like the old legislation, this legislation is worse. In our opinion, it will do nothing to nurture the growth of advertising spending in the Canadian magazine industry.

Mr. John Godfrey: But does this legislation detract even from your previous ability to have that expense deducted?

Mr. David Harrison: Yes, I think it does.

Mr. John Godfrey: But it's not by very much money, you're telling me. It's not a lot of money. Can you provide us with some figures about what it would actually mean? What's the economic impact?

Mr. David Harrison: I'm not sure we could, to be honest.

Mr. John Godfrey: Why wouldn't you want to?

Mr. David Harrison: Why wouldn't we want to supply you with that data? It's because it's information we would have to get from a myriad of different corporations. I don't know how we could possibly get that information.

Mr. John Godfrey: The point is that we're talking about rival economic impacts here. One is the magazine business, which is fairly clearly presented. There's also one that's not fairly clearly presented. So recognizing that we would want to consider your principles, we would also want to consider your business model and business case.

Ms. Janet Callaghan: But our business case is much about growth in general and in all media, and all media provide an enormous amount of more choice. We talked about how the magazine industry is at 6%—it's in the single digits—in terms of its percentage of national advertising revenues. That's not good enough.

What we have said is that we want a healthy Canadian periodical advertising industry. But don't have that right now. We have publishers who are having tough times and are struggling. Basically, there are categories that we don't advertise in magazines because they're not supplied, such as men, sports, and youth. We don't have those categories to advertise in. Therefore, money does not go to magazine publishers.

Mr. John Godfrey: The magazine publishers are asking for this legislation, right? If they felt what you felt, then they would presumably lobby us not to have Bill C-55. Don't they know their own case best?

Mr. Clifford Sosnow: With great respect, they're talking about removing split runs from the Canadian environment. But Bill C-55 doesn't talk about split runs, it talks about foreign periodicals and Canadian periodicals. In the way Bill C-55 is constructed, a foreign periodical could conceivably include a start-up company that's 100% Canadian-owned and has 100% Canadian writers and editorial content. This is not about split runs. Magazine publishers have talked about split runs with minimal Canadian content and minimal advertising costs. That's what they have been concerned with. Bill C-55 doesn't talk in those terms.

With respect, sir, we have talked about principles because this is a law. The law will not only have a present application, the law will have future application. As lawmakers, I would think you would want to know what the consequences are. If this legislation, as the minister has suggested, is to support the Canadian magazine industry, we're suggesting to you that the consequences of this legislation will be harmful to that industry.

Mr. Ronald Lund: We talked about principles. I would like to turn to page 22 of the Harrison, Young, Pesonen and Newell study. We're concerned about this, because we don't use it. It basically says:

We conclude that the share of media dollars being allocated to the Magazine medium in Canada, which is underdeveloped relative to other countries,

—I've already given you the numbers, and it's due to a number of factors—

but the major reason for magazine's underdeveloped state is lack of advertiser available titles and little or no Canadian title coverage for many editorial segments. The advertising community will avoid recommending the magazine medium if lack of advertiser available titles prevent proper execution of plans.

So that's the principle. We're trying to in fact encourage a flourishing magazine industry. But you're absolutely correct that it's a principle.

The Chairman: Mr. Mark.

• 1230

Mr. Inky Mark: Thank you, Mr. Chair. I'd like to conclude by just making a couple of remarks about the impact of this legislation.

Much of the discussion today has been centred around trade and the charter. It's only logical to think there is potential action or fallout to this piece of legislation in the areas of both the NAFTA and the World Trade Organization, as well as the Charter of Rights and Freedoms.

My staff has informed me that last week you defeated a motion calling for the Minister of International Trade and the Minister of Justice to appear. I had suggested earlier that their officials appear before the committee. I think it's the responsibility of this committee to hear this out because of the potential fallout in these two areas.

The Chairman: Mr. Mark, unfortunately our clerk isn't here right now, so I don't have the wording of the motion, but if I recall, the wording of the motion was very specific. It spoke about the ministers. We voted on the motion on the basis that members discussed that the bill was a government bill that had been approved by the ministers in their deliberations and there was no need to call them again. I am just a servant of the committee. I put the motion forward, there was vote on it, and it was defeated. The motion clearly referred to ministers as such.

Mr. Inky Mark: I understand that, Mr. Chair, but in light of the discussion today and the potential reaction or fallout from it, I'm suggesting to the committee that perhaps officials of the Ministry of International Trade and the Ministry of Justice appear before the committee to respond to these concerns that are raised today.

The Chairman: A point of order?

[Translation]

Ms. Suzanne Tremblay: I think it's our work rather than the presence of these witnesses.

[English]

The Chairman: Absolutely.

[Translation]

Ms. Suzanne Tremblay: If Mr. Mark wants us to discuss this some more, he should wait till the public hearings are over. Then we'll meet and be amongst ourselves to discuss this.

[English]

The Chairman: Yes, Mr. Mark, I think that will be much more proper.

Mr. Inky Mark: I agree.

The Chairman: Monsieur Bélanger and Mr. Muise.

[Translation]

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

[English]

How much time do we have?

[Translation]

It's five minutes, Ms. Tremblay?

[English]

Ms. Suzanne Tremblay: Five minutes for you.

The Chairman: Five minutes.

Mr. Mauril Bélanger: There are a number of points I want to cover.

[Translation]

First, to my knowledge, there's absolutely nothing in Bill C-55 that prohibits the publication of a magazine like Elle-Québec. That must be clear. We were given that example. We were told it would be prohibited under C-55. To my knowledge, and you'll correct me if you have to, that isn't the case. There's nothing in C-55 prohibiting that. If you want to prove otherwise, please do so.

[English]

Mr. Harrison, you said your association was opposed to the previous legislation as well.

Mr. David Harrison: I said we didn't like it; I didn't say we were formally opposed to it. This legislation is 30 years old. I'm afraid my memory doesn't go back that far.

Mr. Mauril Bélanger: Maybe I can help. You weren't president then, but my understanding is that in 1995—and this doesn't go all that far back—when the committee heard from John Sinclair, who I believe was president at the time, the ICA strongly supported measures that supported the Canadian magazine industry. He made comments such as for every five jobs created by a split-run magazine, sooner or later there will be ten jobs lost because a Canadian magazine will go out of business; advertising is the funding lifeblood of magazines, and there's a limited amount of advertising to put into that medium; and if the advertising revenue for a magazine dries up, that magazine will not survive. Were you around then?

Mr. David Harrison: No, I wasn't around at that time. This is different legislation from that discussion. This legislation we're discussing today, Bill C-55, is all about ownership.

Mr. Mauril Bélanger: You are trying to indicate that the ICA was not supportive of previous legislation, but the president of the ICA at the time was very supportive of it.

Mr. David Harrison: I can't refute what you're reading, but I can say that in general, on an operating basis, those people involved in the advertising industry find the legislation to be difficult. They would prefer it wasn't there.

Mr. Clifford Sosnow: With respect—

Mr. Mauril Bélanger: I'd like to carry on, Mr. Chairman, if I may.

• 1235

Mr. Clifford Sosnow: With respect, we have asked to have Mr. Rupert Brendon, who had written that letter, to be here.

Mr. Mauril Bélanger: Mr. Chairman, who has the floor?

The Chairman: Mr. Bélanger.

Mr. Mauril Bélanger: Thank you.

I want to question the following statement made in this brief, which was given to us this morning: “Over the last 30 years Parliament has drawn an ever tightening circle around the kinds of magazines that are available to Canadian advertisers”. I would like to put the contrary to the committee—that the policies of the last 30 years have done the opposite. They have increased the Canadian magazines that are available to Canadians in this country by a considerable number. Statements of that nature are in error, in my opinion, and I wanted to state that.

Ms. Janet Callaghan: By a considerable number?

Mr. Mauril Bélanger: Hundreds.

Ms. Janet Callaghan: And you know the percentages comparable to other countries in terms of the expansion of magazines.

Might I suggest, for instance, that magazines are much like manufacturers. What has happened with the magazine industry here is that it covers certain target groups very well. It has segmented. It has introduced new target groups, and what this is all about is readership and targeting. We do very well with women's magazines and with business magazines, but we don't do well in other sectors.

Mr. Mauril Bélanger: We heard testimony—

Ms. Janet Callaghan: So that kind of expansion has not served all advertisers.

Mr. Mauril Bélanger: We heard the opposite from the magazine industry itself as early as last week. I was hoping that members would review the testimony we heard from not just two representatives but from associations representing hundreds of magazines.

So we have perhaps a different view, depending on whether you're an advertiser or a magazine publisher. I think that has to be kept in mind, because the purpose here is to make sure that the well that supports Canadian advertising services doesn't all go that way.

I was very happy to hear you confirm you still stand by your conclusion that indeed, if we had an open market totally in the sense that everybody can come and do whatever they want—although it's pretty hard to be much more open than we are—then you'd have an increase in that pie. But 40% to 60% of that pie would go to foreign publications, and that would cut the lifeblood that the ICA itself was saying was vital to the magazine industry. You can't have it both ways.

Mr. David Harrison: What we're suggesting, Mr. Bélanger, is that there's something in between; there's something between letting everybody in and turning the lights off.

Mr. Mauril Bélanger: Fire away.

Mr. Ronald Lund: I would also like to suggest that when you're talking about numbers, you want to look at the record of the policy over the last 30 years. I think the evidence from the same people would show that magazines' share of the pie has gone down from 11% to 6%. So if you want to give yourself a report card, I think the numbers speak for themselves.

Mr. Mauril Bélanger: I'd like to see what it means in terms of absolute dollars and in terms of other media coming on stream that weren't there before. I'd be prepared to take a look at the whole picture, not just—

Mr. Ronald Lund: The bigger share.

Mr. Mauril Bélanger: —one slice of that picture.

Thank you, Mr. Chairman.

The Chairman: Mr. Muise.

Mr. Clifford Sosnow: If the committee would like, we'd be pleased to provide that information to the committee.

The Chairman: You're entitled to send us any documentation. All you have to do is just send it to the clerk as soon as possible, and I can assure you it will be circulated to the members.

Mr. Kenneth Purchase: Could we also provide an answer to Mr. Bélanger's first question with regard to the eligibility of magazines such as Elle-Québec under the proposed legislation?

The Chairman: By all means do.

Mr. Ronald Lund: I'm sorry if we gave the suggestion that Elle-Québec would not be there any more. What we were trying to suggest is that Elle-Québec was a perfect example of how an international magazine, an international title, could in fact be very easily Canadianized, thereby taking advantage of its international stature while at the same time telling stories to Canadians about Canadians.

Mr. Mauril Bélanger: Nothing in Bill C-55 would prevent that.

Mr. Ronald Lund: I'm not saying it would.

Mr. Kenneth Purchase: With respect, Mr. Bélanger, you should review the legislation yourself.

The Chairman: Please. You will send us the documentation, and we will have a chance to read it.

Mr. Muise.

Mr. Clifford Sosnow: May we please respond to Mr. Bélanger's—

The Chairman: No, I think we have to move on.

Mr. Muise.

Mr. Mark Muise: Mr. Chairman, I'm prepared to forgo my questions in order to let the witnesses say what they'd like to. I sense some frustration, and I'd like them to be able to deal with it.

The Chairman: All right.

Mr. Kenneth Purchase: In fact Bill C-55 as currently drafted would not permit the start-up of a magazine such as Elle-Québec, were it not for the grandfathering clause.

• 1240

I would refer Mr. Bélanger to subclause 3(2) of the legislation:

(2) For the purpose of this Act, a person who, directly or indirectly, produces or publishes a periodical or a substantial part of a periodical under licence or other authority granted by a foreign publisher

—such as Elle France—

is deemed to be a foreign publisher.

Elle-Québec would be captured by this legislation were it not for the grandfathering clause.

Mr. Mauril Bélanger: What about the ownership—

Mr. Kenneth Purchase: The ownership doesn't matter if it's captured by subclause 3(2).

Mr. Mauril Bélanger: Let's verify that, okay? Thank you.

The Chairman: Are there any other requests for questions by the members? Ms. Bulté.

Ms. Sarmite Bulte: I'd like to just proceed on some of the trade questions, if I may, so we don't have to take them to the subcommittee on trade.

With respect to this decision, Mr. Sosnow, you said services supplied in conjunction with goods bring it under the GATT. Is that correct?

Mr. Clifford Sosnow: There is a services dimension and there is a GATT dimension.

Ms. Sarmite Bulte: Based on what? Are there decisions to that effect?

Mr. Clifford Sosnow: Yes. Two WTO appeal decisions have said that.

Ms. Sarmite Bulte: Are there any decisions to the contrary?

Mr. Clifford Sosnow: No, there are not.

Ms. Sarmite Bulte: Could we get copies of those decisions—

Mr. Clifford Sosnow: We'd be delighted to provide them.

Ms. Sarmite Bulte: —as opposed to doing an entire brief? If you can fax us the cases I would appreciate that.

Mr. Clifford Sosnow: We'd be delighted to.

The Chairman: Thank you.

[Translation]

Ms. Tremblay.

Ms. Suzanne Tremblay: The gentleman's comment has just given me a wake-up call. Could you give me some clarification on paragraph 3(2)? I'm reading it in English and in French and I don't even understand the French. This paragraph seems rather complicated to me. Could you explain what you've just said, please?

[English]

The Chairman: Carry on.

Mr. Kenneth Purchase: Subclause 3(2), likely in an attempt to capture someone trying to circumvent a split-run edition, says if you have a foreign publisher who gives permission to a publisher within Canada to produce a version of their magazine, they are deemed to be a foreign publisher. In essence, using the Elle-Québec example, it could not be produced unless it had the permission and was operating under the authority of Elle France. That doesn't necessarily mean they're owned by them in any way or that the corporation that grants the authority necessarily has any control over the editorial content.

[Translation]

Mr. Mauril Bélanger: Mr. Chairman...

[English]

The Chairman: No, sorry.

Mr. Kenneth Purchase: But if they grant them the authority to produce a version of their magazine, for example, by using the name Elle, then they are deemed to be a foreign publisher, regardless of their ownership structure or the content of that magazine. That's very clear in the bill.

[Translation]

Mr. Mauril Bélanger: Could I go so far as to give an explanation other than that given by Mr. Purchase in response to Ms. Tremblay's question?

The Chairman: I'm getting back to you, Mr. Bélanger.

Mr. Mauril Bélanger: Thank you.

The Chairman: Ms. Tremblay, was that all?

Ms. Suzanne Tremblay: I want to be quite sure of what he just said. That's not what we were told. If what this gentleman is saying is the interpretation that should be given to paragraph 3(2) and that it is endangering Paris Match Québec, Elle-Québec and so forth...

Mr. Mauril Bélanger: Mr. Chairman, I'll read the clause and I think that will answer the question.

Ms. Suzanne Tremblay: Mauril, I can read. All you have to do is explain. I can read it on my own.

Mr. Mauril Bélanger: It says:

(2) Is deemed to be a foreign publisher [...] a person who, directly or indirectly produces or publishes a periodical or a substantial part of a periodical...

If it's a true Canadian version, then there's no problem. Elle-Québec is a real Canadian version. If a licence is granted to reproduce totally or in substantial part a foreign publication, it's considered to be a foreign magazine. But if it's a truly Canadian magazine like Elle-Québec there's no problem.

Ms. Suzanne Tremblay: Even if Elle-Québec publishes an article taken from Elle-United States, Elle-France or Elle-England, that being one article out of four?

Mr. Mauril Bélanger: It's a foreign publication if that's the totality or a substantial part of the magazine.

Ms. Suzanne Tremblay: Directly or indirectly.

• 1245

Mr. Mauril Bélanger: There you go. If it's a magazine produced under licence, but if it contains real Canadian content that's produced here, at home, then there's no problem.

[English]

Mr. Kenneth Purchase: Where does it say that in the bill?

Mr. Mauril Bélanger: Where doesn't it say it?

Mr. Kenneth Purchase: We just read it to you.

[Translation]

Ms. Suzanne Tremblay: Mauril, I don't think they're doing it in bad faith. The people are here to understand. They're asking you to tell them where it says that in the bill and I'm asking you too.

Mr. Mauril Bélanger: Well, I'm telling you.

Ms. Suzanne Tremblay: Where can I find what you're saying?

[English]

The Chairman: Order, order.

I think in fairness, Mr. Bélanger—

[Translation]

Mr. Mauril Bélanger: “A periodical or a substantial part of a periodical”.

The Chairman: Mr. Bélanger, just a minute, please.

[English]

In fairness, the witnesses have testified to it and are going to kind of back up, through documentation, that it was sent to the committee. I suggested that whatever you want to send to the committee will be distributed to the members, and then if the government wants to respond to the members and clarify its position, by all means let it happen. I think that's the best way to deal with it at this time.

Mr. Mark, just very briefly, we have some items of business to do.

Mr. Inky Mark: Thank you, Mr. Chair.

Again on this topic of trade, under the free trade agreement, what options are open to the Americans to retaliate, and are there any limitations?

Mr. Clifford Sosnow: That will take a few minutes, but the short answer to your question is, as you all know, under the NAFTA, cultural issues—and it's questionable whether this is a cultural issue, because the minister says it's in relation to advertising services—are regulated by looking at what the free trade agreement has to say.

The free trade agreement says cultural issues are taken out of the free trade agreement. However, either free trade party, Canada or the United States, can retaliate against the other if the measure would violate the free trade agreement rules, but for this cultural industry exemption. There are GATT rules in the free trade agreement. They have been specifically incorporated into the free trade agreement. So if there's a violation of the GATT, there's a violation of the free trade agreement.

As a consequence, the United States would have the right to unilaterally retaliate with measures of equivalent commercial effect. It's perhaps no secret that the United States has issued a press release using that very language.

The Chairman: Thank you.

I would like to thank the witnesses very sincerely for appearing today to give us another perspective on the legislation and your views on it. I thank you very much for coming and being very forthright with your positions.

Mr. Ronald Lund: Mr. Chairman, if I could add something, we would like to thank you as well. We would just like to say we are not opposed to protecting and promoting Canadian culture. We've said that. But I want to leave on that note, because we seemed to digress from that. What we would like, though, is to be involved and to provide some input into this process.

The Chairman: As I mentioned, so it can be very clear on the record, you are most welcome. We would appreciate any documentation you can send to the clerk as soon as possible. I commit myself to having it distributed as soon as possible.

Mr. Ronald Lund: We will get that out immediately, sir.

The Chairman: Thank you.

I would like members to stay for five minutes, please.

Mr. Mills.

Mr. Dennis Mills (Broadview—Greenwood, Lib.): Mr. Chairman, I just want to report to you and the committee that this morning we had a most successful experience. We went through all of our report and our recommendations. The Progressive Conservative Party of Canada signed on, the Reform Party of Canada signed on, and the New Democratic Party signed on. There is some hesitancy, somewhat formal, from the Bloc Québécois. They feel at this moment they would like to have a minority position on this report. But being the eternal optimist, I'm hoping for a conversion before we go to manufacturing on the weekend.

[Translation]

Mr. Mauril Bélanger: What can we do to help you?

• 1250

[English]

Mr. Dennis Mills: There are copies of the report for all members of the committee. Then we would hope that you, as chair, and the committee members would review it so we can go to print on the weekend.

The Chairman: Have you all heard that Mr. Mills will make sure copies of the report are distributed right away? If you have any comments or anything for Mr. Mills, please provide them as soon as possible.

Mr. Dennis Mills: Please speak to your fellow colleagues. Yes, it's absolutely confidential.

The Chairman: At this stage the report is confidential.

Mr. Dennis Mills: There are some minor amendments to the document you're getting, but your colleagues will receive it by the end of the day, and they'll be integrated into the report.

The Chairman: It is not a public document at this point.

Mr. Mauril Bélanger: Until what time do we have?

Mr. Dennis Mills: You have until Friday.

Mr. Mauril Bélanger: What are the mechanics here?

The Chairman: The mechanics are that the report will be tabled right now to the members of the committee for review. Mr. Mills has suggested we have until Friday to comment, but it is up to the committee to decide whether that is what it wants.

Yes, Mr. Mark.

Mr. Inky Mark: The process being as indicated, is that going to create a problem for other members of the committee to review the report?

Mr. Dennis Mills: I'll speak to my members. I've talked to half of them, and we'll find out if there's any difficulty with it.

Mr. Mauril Bélanger: If there is any difficulty, we can bring it up Thursday.

After you've dealt with Mr. Mark's matter, can I bring up something else?

The Chairman: Yes, by all means.

So the understanding then is that the report is being distributed to you right now as a confidential document; it's not a public document. If you have any comments for Mr. Mills, would you send them by Friday. We will have to adopt the report as a full committee.

Mr. Dennis Mills: No, before. We're hoping by Friday.

The Chairman: No, I understand that—by Friday.

Mr. Mark.

Mr. Inky Mark: Thank you, Mr. Chair.

My request to this committee is... Because of the issues that are brought up regarding trade, and charter issues, my understanding is both those areas will be challenged if this becomes a bill.

I certainly would like to hear—and I think the committee should—from our own officials from the ministries of international trade and justice.

The Chairman: Excuse me one minute, Madame Tremblay. Un instant, s'il vous plaît.

Mr. Mark, I should mention to you we've got only a limited window until the close of business, and the other day your colleagues brought up... We now have to have a special committee to look at a report on the UN Convention on the Rights of the Child, which will take a whole session. We can't do everything at once.

Monsieur Bélanger, do you want to address it?

Mr. Inky Mark: Pardon me, Mr. Chair. Does it make sense to do things well rather than do them quickly? That's my concern with this particular bill.

Mr. Mauril Bélanger: I'm sorry I missed...

The Chairman: Madame Tremblay.

[Translation]

Ms. Suzanne Tremblay: It's time to be aware of one thing. Ministers are bound by ministerial solidarity. So whatever Mr. Marchi says will add absolutely nothing to the debate. He'll just repeat what Ms. Copps told us. They're bound by that.

Now, if Mr. Mark wants reassurance, we can take half an hour to put questions to a civil servant who's a specialist of the GATT to clarify this for us. I would have no objection to having an official who knows the GATT come here before us. We could ask him questions on the GATT. He could give us his expert opinion. As for Mr. Marchi, he can't come here and say anything different because he is bound by collective Cabinet solidarity. So it wouldn't move the debate forward.

The Chairman: Yes, agreed.

Mr. Mauril Bélanger: Mr. Chairman, the other day, when Mr. Mark's colleague suggested that we have three ministers come before us, I said it just wasn't done. It's the Heritage minister who's dealing with this bill for the Cabinet. Everyone except his colleague accepted that it just wasn't done and that we would not invite any other ministers. Maybe people will remember that I had also mentioned at the time that I wouldn't be opposed to having some expert from the public service come before us.

• 1255

But we'll play with a harder ball. Mr. Mark's colleagues are insisting that tomorrow afternoon we have another meeting on something else all together, something that could wait. Besides, Ms. Tremblay, you also signed that request. If we could withdraw that request made by our colleagues from the other side to hold a committee meeting on a totally different subject, maybe we could finish our work.

I'm making a constructive suggestion, but I don't know if they're ready to accept this.

Ms. Suzanne Tremblay: That depends... Will the other report be tabled first?

Mr. Mauril Bélanger: What other report?

Ms. Suzanne Tremblay: The report on the work the committee will be doing tomorrow.

Mr. Mauril Bélanger: On the United Nations?

Ms. Suzanne Tremblay: Yes.

[English]

The Chairman: Mr. Mark, I'm genuinely trying to see how we can accommodate. To pick up on what Mr. Bélanger says, if tomorrow you could... Your colleague Mr. Lowther told me this other meeting on the report on the UN Convention on Child Rights would only take 10 or 15 minutes. If we could be assured it was going to be very brief, then we'd call the officials for 15 minutes after the start of the meeting. But if it's going to be a full meeting taking two hours, I don't know where we would schedule...

Mr. Inky Mark: I agree, Mr. Chair.

Mr. Mauril Bélanger: You agree to what?

Mr. Inky Mark: I agree to limiting—

Mr. Mauril Bélanger: You agree to withdraw that request for a special meeting?

Mr. Inky Mark: As the chair suggested, we would split the time up and do two tasks at one time.

The Chairman: Well, Mr. Lowther told me he only needed 10 or 15 minutes. If we can just say it would be very brief, just to find out about the report, and then move on and listen to the officials, then I'm ready to do this.

Mr. Inky Mark: I comply, Mr. Chairman.

The Chairman: Okay, we'll call the officials for 15 minutes after the start of the meeting. Tomorrow.

Mr. Mauril Bélanger: Tomorrow. May I suggest, in order that it's clear for everyone, we set a time for amendments to the bill from all parties. We're getting into the usual situation where there's a time crunch, but you've been rather open in terms of amendments and so forth.

The Chairman: Regarding amendments, I was going to suggest we have amendments available until Monday of next week.

Mr. Mauril Bélanger: Until noon on Monday?

The Chairman: Until Monday at noon, next week.

Mr. Mauril Bélanger: Is that acceptable to everyone?

Mr. Dennis Mills: He's easier than I am.

The Chairman: Mr. Mark.

Mr. Inky Mark: You refer to the date scheduled for amendments, is that correct?

Mr. Mauril Bélanger: Noon Monday. I so move. Mr. Speaker, may I so move?

The Chairman: Please, members, if you could stay for one minute, we've got to finish this order of business. It's very important. There is a motion by Mr. Bélanger.

[Translation]

Ms. Suzanne Tremblay: It wouldn't be possible Tuesday morning?

The Chairman: We have to know this now.

Mr. Mauril Bélanger: Tuesday, we're going to be starting clause-by-clause.

[English]

Mr. Inky Mark: Mr. Chair, that's the normal procedure, that during that time we make the amendments or we do clause-by-clause.

The Chairman: Oh no, you're allowed during the clause-by-clause to introduce amendments. There is nothing to stop you from introducing an amendment then.

Mr. Inky Mark: I agree.

The Chairman: But before written amendments are submitted to all the members, you can, during a session, say you've introduced a subamendment, and there's nothing to stop you from doing this. What we're talking about is a written amendment so all the members are seized of the various amendments. The government has to send you its amendments, and it is committed to doing this at the same time.

Mr. Inky Mark: As long as they're admissible at that same time.

The Chairman: Yes, of course.

[Translation]

Mr. Bélanger is suggesting we produce the amendments by next Monday noon.

[English]

All in favour of the proposition?

[Translation]

Ms. Suzanne Tremblay: Will you have time to go and vote, Mr. Chairman? Monday is the 30th.

The Chairman: Of course I'll go and vote.

(The motion carries)

The Chairman: The meeting stands adjourned.