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 means that Canadians can no longer see U.S. ads, as they did during the 2017-2019 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 agreed to require 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 or 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 simsub 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 which upheld the CRTC’s decision.
• Bell and the NFL then appealed the Federal Court of Appeal’s decision to the Supreme Court of Canada. On December 19, 2019, the Supreme Court of Canada allowed the appeal and quashed the CRTC’s Order. The Court ruled that the section of the Broadcasting Act that the CRTC used to make the Order did not provide the Commission with the power to do so; therefore, the CRTC’s decision was not “correct” in light of the law. However, the Supreme Court did not decide whether the CRTC could make a similar Order under a different part of the Act. Canada needs to proceed with legislative amendments and to issue a direction to the CRTC in order to ensure that this does not occur.
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 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 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 CRTC’s decision was appealed and the Federal Court of Appeal 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 CUSMA, 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
• The Government tabled Bill C-4, the CUSMA Implementation Act, on January 29, 2020. It is currently being studied by the Standing Committee on International Trade.
• Once the Implementation Act is passed and receives Royal Assent, an Order in Council to implement the CUSMA broadcasting commitments will be issued.

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