Bill to Amend-Second Reading-Debate Adjourned

Hon. Sheila Finestone moved the second reading of Bill S-24, to amend the Broadcasting Act.

She said: Honourable senators, the purpose of this bill is to amend the Broadcasting Act such that the CRTC has the discretionary power to award costs when warranted by clear CRTC criteria to groups, organizations or individuals who appear before the commission for proceedings involving broadcasting or cable television matters.

This amendment brings the Broadcasting Act into concordance with the Telecommunications Act, where the same rights for cost recovery have existed for years. The wording for the amendment is exactly the same as those sections of the Telecommunications Act, section 56 and section 57, that give the CRTC the authority to establish criteria for the awarding of awards costs and assess to whom and by whom the costs are to be paid. It is important that the wording be identical between the acts in order that concordance of powers and authority for the CRTC exists between the acts and in their application in proceedings. I refer honourable senators to the summary of the proposed enactment found in Bill S-24.

As a point of information, I should like to comments on and clarify for honourable senators the use of the word “taxation” in the wording of the amendment. This is exactly the same wording that is used in the Telecommunications Act. I want to make sure that we avoid any confusion that the use of the word taxation would make this a government money bill. It does not, and it is not.

The use of the word taxation is the proper use in the context of the amendment. The word in the amendment does not have anything to do with the fiscal or money-raising powers and authority of the government. As unfortunate a choice of word as this may be by lawyers, taxation is the normal and proper legal term used by the courts in four or five regulatory agencies, such as the CRTC.

The term refers to the matter of the assessment and payment of costs and charges by parties by a regulatory agency. The same term has been used by the CRTC for telecommunications proceedings for years and is written into the Telecommunications Act, using the exact same wording as you find in this proposed amendment.

This amendment is necessary and will be extremely beneficial to the Canadian public. The ability to recover significant costs that are expended as part of participation in a CRTC proceeding, when warranted, permits consumer and public interest groups, as well as individual consumers, to develop credible and substantive research and evidence that will allow them to represent more effectively the interests of citizens in broadcasting and cable television policy and regulatory proceedings. For example, such proceedings could involve national issues, such as television policy or cable television distribution regulations, or more specific issues, such as the rates consumers pay for cable television services – something we all know about around here. This level of participation in broadcasting matters, comparable to their historic level in participation in telecommunications proceedings, is something that these groups and individuals have not been able to afford to do.

With convergence and the information highway, there has been an increasing blur between telecommunications and broadcasting services used by the public, such as new media and the Internet. Obviously, this blurring has also spilled over into CRTC proceedings involving either the Telecommunications Act or the Broadcasting Act, and at times proceedings in which both acts are involved.

To this point in time, consumers and consumer groups are only able to apply to have their costs recovered under matters that are clearly telecommunications-related and that fall under the jurisdiction of the Telecommunications Act, regardless of how much a service in question straddles both acts. This amendment brings into symmetry and balance both acts, so that consumers will be fairly and equally treated in all matters in proceedings before the commission, whether conducted under the Broadcasting Act or the Telecommunications Act.

Consumer groups across the country strongly support this initiative and the importance of cost awards. There is a list of consumers involved.

In exercising its responsibility under the Broadcasting Act, the CRTC is given decision-making powers that are important for, and have a great impact on, Canadians associated with the promotion of Canadian culture, the setting of rates, the introduction of competition and the resolution of stakeholders disputes. Section 3(d)(i) of the Broadcasting Act says that the commission is instructed …to safeguard, enrich and strengthen the cultural, political, social and economic fabric of Canada.

The increasing complexity of the decisions that the CRTC has been called upon to make in pursuit of these objectives requires that it have informed participation in its proceedings.

The ability to receive a cost award when this is appropriate and warranted is very important to ensure effective citizen participation in the regulatory and policy processes. Under current CRTC procedures, anyone can make a submission to the CRTC in a proceeding. However, without adequate funding for consumers and their representative groups, there has always been an imbalance and inequality in the scope and substantiveness of the submissions made by consumer organizations, in comparison with those of media companies.

Individual Canadians and interested organizations have always been able to send letters and other information to the CRTC as part of broadcasting and cable proceedings. This has been important to allow Canadians to express their views on important regulatory, policy, pricing and other service matters. This amendment will not change this. Individual Canadians or interested organizations will still have the opportunity to make these types of submissions. However, the increasing complexity of the competitive broadcasting and telecommunications markets, and the converging policy frameworks, require that, in addition to submissions from individuals and organizations that express general views, substantive and effective participation by consumer organizations representing the interests of citizens require detailed research studies and expert assistance. It is very complex, as honourable senators know.

No non-commercial organization outside of government has the resources to intervene on a consistent basis without financial assistance. It is vital that the process of decision making is conducted in a demonstrably fair fashion. This amendment speaks to the importance of openness, transparency and fairness for users of these services.

There are many examples of how consumers have been disadvantaged in the Broadcasting Act proceedings because cost awards were not available. Moreover, this has also become a disincentive for participation by many groups. For example, in 1997, the Public Interest Law Centre in Winnipeg represented cable subscribers in rate increase proceedings. The consumers required the expertise of the law centre to effectively argue their case. In the final decision, the CRTC ruled against a rate increase. This saved consumers millions of dollars, but the law centre was unable to recover thousands of dollars spent on expert assistance.

In another example, last year the Public Interest Advocacy Centre and the Action Réseau Consommateur participated in a joint Broadcasting Act and Telecommunications Act proceeding on new media. Together the organizations incurred several thousand dollars in expenses. This was an important proceeding that dealt with the convergence of telecommunication and broadcasting services, and the impact this would have for all citizens. Because the CRTC is not permitted to award costs under the Broadcasting Act, the groups were only able to recover costs relevant to telecommunications matters in the amount of 25 per cent, and only for matters relating to telecommunications. That is the Cost Order CRTC 2000-2. The inability to recover costs not only penalizes consumers groups and their representatives financially, but it is also a barrier and a disincentive to their right to fair participation and representation. The CRTC decision, Cost Order 2000-2, stated:

By contrast, one of the questions involved in the new media proceeding was which Act to apply to this issues, and how. In this context, the Commission considers that it is very difficult to extricate and to itemize the issues raised by PIAC/ARC to be determined pursuant to the Telecommunications Act.

Who will be funded? Not everyone who appears before the CRTC in a proceeding will automatically qualify for a cost award. With the passage of this amendment, the CRTC will draw up rules of procedure that will be used to determine the criteria for awarding costs. It is expected that these will be comparable to the criteria that already exist in telecommunications. Under the telecommunications rule of procedure for costs, applicants must demonstrate to the commission that they are representative of a group of citizens or subscribers; that they have participated in the proceeding in a responsible way; and that they have contributed in a substantive way to a better understanding of the issues by the commission.

The current criteria developed for the Telecommunications Act requires a level of expertise and a substantial amount of work by applicants, and have been sufficient to prevent any abuse of the cost awards process. In addition to the above criteria, the regulated company or companies have an opportunity to respond to any requests for costs by individual consumers or consumer organizations.

Honourable senators, in broadcasting in 1997 and 1998, the CRTC processed 1,379 applications relating to television, radio, broadcasting distribution undertakings – as we have tabled – pay and specialty television undertakings. These included requests for new licences, licence amendments and renewals, applications to transfer ownership control, and cable rate filings. The commission also issued 658 broadcasting decisions and 143 public notices. Cost awards were not available for any of these.

Cost awards in broadcasting will not be a financial burden on media companies. Companies and industry associations spend from hundreds of thousands to millions of dollars on regulatory proceedings to represent their own interests. A relatively small number of public interest, consumer groups and organizations have demonstrated expertise in this area. Other groups or associations are likely to intervene on an occasional basis; that is the multicultural groups. Any of us who have worked in this field know how complex these hearings are.

Who pays for the cost of the awards? They are paid for by companies under the commission’s jurisdiction and who participated in, and have an interest in the outcome of, the proceeding. Cost awards recognize that it is important for an adjudicative tribunal to have all the relevant facts and opinions before it when it makes a decision. Without a cost award policy, only the costs of the delegation representing the interests of the shareholders of the regulated company are paid for through rates charged by the regulated company. In order for the tribunal to have before it the appropriate information that presents a fair and balanced set of arguments, independent representation of the consuming stakeholders are required. That is you and I and everyone else we know. The funding of cost awards is thus looked upon as a cost of doing business for industry players. Like the cost of the company’s representations, the funds come from the cost of service for the individual industry stakeholders. This is the practice used for telecommunications.

A principle of cost awards is to compensate a deserving intervener for the work associated with an intervention on the basis of the fair market value of the work done. The CRTC has always followed this practice in telecommunications, which was confirmed as appropriate by the Supreme Court of Canada in 1986. Many tribunals that regulate public utilities or important public services award costs of public interest interveners to reimburse them for their intervention. In addition to the CRTC, funding is available for consumer groups participating in hearings on electrical and natural gas proceedings in many provinces in Canada, such as British Columbia, Alberta, Manitoba, Ontario and Quebec. At the federal level, the Canadian Transportation Agency is another example of a tribunal with the power to award costs.

In summation, honourable senators, this process is not new or untried. The CRTC has demonstrated that it used prudence in the exercise of its discretionary powers with cost awards in telecommunications, and the same can be expected for broadcasting matters. Applications for costs face a rigorous and fair review process. They are not automatic. There is a real need for this amendment. It will bring the Broadcasting Act into concordance with the Telecommunications Act, which is critical with the convergence of our communication policies and the communication industry.

Canadians should not be denied fair and equitable participation and representation in regulatory proceedings involving the broadcasting and cable television industry. This amendment provides the means to create this balance and fairness, and let me say to honourable senators that the following are the consumer groups across this country who support the initiative: the British Columbia Public Interest Centre, the Public Interest Law Centre, the National Anti-Poverty Organization, Canadian Labour Congress, Action Réseau Consommateur, Canadian Library Association, the Manitoba branch of the Consumers Association of Canada, the Communications Workers Union, Rural Dignity of Canada, l’Association coopérative d’économie familiale, and the Public Interest Advocacy Centre.

On motion of Senator Kinsella, debate adjourned.