Question Period Note: CUSMA Broadcasting commitments

In negotiating the Canada-United States-Mexico Agreement (CUSMA), Canada agreed to require simultaneous substitution during the Super Bowl. Allowing simultaneous substitution for the Super Bowl will mean that Canadians will no longer get to see U.S. ads on television, as they have for the past two Super Bowls. Canadian viewers will see Canadian ads, allowing the current Canadian rights holder to better monetize the rights for the Super Bowl in Canada.
Canada also agreed to give U.S. programming services specializing in home shopping, including Canadianized versions of these U.S. programming services, access to the Canadian market.

• In CUSMA, the Government of Canada committed to rescind the CRTC decisions that prohibit simultaneous substitution during the NFL’s Championship game, the Super Bowl.
• The Government of Canada also agreed to give US-based programming services specializing in home shopping access to the Canadian market.
• Following ratification of CUSMA, the Government will take appropriate steps to fulfill these commitments.

Simultaneous Substitution during the Super Bowl
• The National Football League (NFL), which is the copyright holder for the Super Bowl, has an agreement with Bell Canada and Bell Media Inc. (Bell), granting Bell the exclusive rights to broadcast the Super Bowl in Canada.
• For more than 40 years, the Super Bowl has been broadcast subject to the CRTC’s simultaneous substitution (simsub) regime. Simsub occurs when a cable or satellite distributor temporarily replaces the signal of one TV channel with that of another channel showing the same program at the same time. Usually, the signal of an American television station is replaced by a Canadian signal showing Canadian ads. Sometimes a distant Canadian signal is replaced with a more local signal. The simsub regime forms an exception to the general principle that broadcasting distribution undertakings must not alter or delete signals.
• Simsub allows Canadian broadcasters to maximize audiences and advertising revenues for the non-Canadian programs for which they have acquired the Canadian market rights. As out-of-market and out-of-country signals are widely available to Canadians, without signal substitution, the audience for a TV program would be split across several stations, reducing the size of the audience for each station. With that smaller audience, the TV station could not charge as much for advertising.
• On January 29, 2015, following its Let’s Talk TV proceeding, the CRTC stated that it would prohibit the practice for the Super Bowl as of February 2017, because it considered the non-Canadian advertising produced for the Super Bowl to be an integral part of this special event programming. This meant that during the Super Bowl broadcast, Canadians would see Canadian advertising on a Canadian TV station (e.g., CTV) and American advertising on an American TV station (e.g., Fox). Bell and the NFL appealed the CRTC’s order to the Federal Court of Appeal.
• On December 18, 2017, the Federal Court of Appeal upheld the CRTC’s decision.
• On January 2, 2018, Bell and the NFL sought leave to appeal the Court’s decision to the Supreme Court of Canada. On May 10, 2018, the Supreme Court granted Bell and the NFL’s applications for leave to appeal. The Supreme Court hearing was on December 4-6, 2018; however, a decision has not yet been rendered.
• In negotiating CUSMA, Canada agreed to require simsub during the Super Bowl.
U.S. Teleshopping Services
• On April 4, 2016, the CRTC denied an application to add QVC, a U.S.-based 24-hour general interest service (100 percent English language) that provides live-televised shopping programs and that showcases products that it sells under a lifestyle programming format, to the List of non-Canadian programming services and stations authorized for distribution (the “List”).
• The CRTC's decision stated that its general policy with regard to the entry of non-Canadian services into Canada is to authorize the distribution of services that do not compete in whole or in part with Canadian pay or specialty services. The objective of this policy is to provide a measure of support to Canadian services so that they can fulfill their commitments and obligations, and to encourage alliances between Canadian and non-Canadian services in similar genres.
• The Federal Court of Appeal allowed the appeal and referred the matter back to the CRTC for reconsideration.
• On February 27, 2018, the CRTC issued a Notice of Consultation for “Reconsideration of the decision relating to the addition of QVC to the List of non-Canadian programming services and stations authorized for distribution”. The deadline for submission of interventions/comments/answers was on March 29, 2018; however, the CRTC has not issued a revised decision.
• In renegotiating NAFTA, Canada agreed to give US-based programming services specializing in home shopping, including modified versions of these U.S. programming services for the Canadian market, access to the Canadian market by authorizing them to negotiate affiliation agreements with Canadian distributors.
Canada-United States-Mexico Agreement (CUSMA) Implementation
• CUSMA requires implementing legislation before the Government can proceed to ratification. Global Affairs Canada, in consultation with other departments including Canadian Heritage tabled implementation legislation during the last Parliament.
• Once the implementation act is reintroduced and passed, further Orders in Council will be required to implement the CUSMA broadcasting commitments.

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