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Canada urged to respond faster as digital landscape evolves

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“The government must ensure Canadian creators can continue to tell Canadian stories to Canadian audiences, and audiences around the world for that matter,” said Reynolds Mastin, president and chief executive of the Canadian Media Producers Association. He applauded some of the measures already introduced by the Liberal government, but said more needs to be done.

“The alternative is companies from south of the border limiting our viewing options, and ultimately dictating what Canadians can watch,” Mastin said.

“That’s not a pretty picture.”

While the Trudeau government has started that review, and pledged millions of dollars in support for Canadian audiovisual productions and local journalism, the European Union is already considering dramatic changes to digital copyright rules that would protect its cultural industries and compensate creators.

Pablo Rodriguez, who replaced Mélanie Joly as heritage minister earlier this year, was not available for an interview about Canada’s cultural policies until next week, his office said. In an emailed statement, Rodriguez’s press secretary Simon Ross did not say why the review — which was announced in 2017 — isn’t slated to finish until after the next election.

“The starting point in this review is that all players must contribute. There is no free ride. But, we will not take an approach that will increase costs for Canadians. Our culture needs a global solution to address the challenges they face and that’s exactly what we have asked an expert panel to provide,” Ross said.

“We want strong Canadian companies and platforms that show great Canadian content.”

Last month, the European Parliament adopted a new Directive on Copyright in the Digital Single Market — or Copyright Directive, for short — that requires internet companies to police the content uploaded to their platforms, and to pay publishers for featuring their content. For example, under the directive, publishers could ask for paid licences when a platform like Facebook shares their content.

The idea has been endorsed by some Canadians — including Torstar chair John Honderich in an opinion piece earlier this week — as a potential method of protecting legacy media outlets and artists against ongoing disruption from internet giants.

But the Copyright Directive was not without controversy. Internet companies lobbied heavily against it, as did advocates for a free internet, who argued that the clampdown would stifle the free flow of ideas and creativity online.

On the other side of the debate were high-profile musicians, such as Paul McCartney, who argued their work was being republished without consent or compensation. While a billionaire Beatle might not elicit much sympathy, many less established artists and small companies are in the same boat trying to compete in the digital age.

After intense lobbying and debate, the European Parliament endorsed a compromise proposal last month, and member states will now hammer out a final deal. The proposal maintained the two most contentious aspects — that platforms must actively police copyright infringement, and that they must compensate copyright holders for their work.

But experts on digital trade and media law are skeptical that the European model could work in Canada.

“I don’t think anything similar would fly in Canada,” said Emily Laidlaw, who teaches internet law at the University of Calgary. “It’s requiring these companies, these platforms. to identify and remove illegal content. Basically, they’ll have a role of policing.”

Apart from pushback from tech companies, another potential obstacle is the newly signed trade agreement with Mexico and the United States, the USMCA. That deal limits internet platforms’ liability for their users’ content — a so-called “safe harbour” rule.

Would that prevent Canada from adopting European-style digital copyright rules?

“We’re still trying to sort that out,” said Michael Geist, the chair of internet and e-commerce law at the University of Ottawa.

“I do think clearly extending that sort of safe-harbour approach, no liability for third party content, does run counter to some of the European rules which are trying to increase liability … or, at least, responsibility for some of those platforms.

“On the other hand, the USMCA is fairly explicit that (the safe-harbour rule) doesn’t apply to intellectual property. So … it wouldn’t appear that this would necessarily preclude other steps.”

But while European countries are moving forward with the debate, Canada has largely stalled. The Liberal government has made a number of significant investments in Canada’s cultural industries, but a consultation on updating copyright laws will not wrap up until 2020 — after the next federal election.

Pierre Nantel, a Montreal-area MP and heritage critic for the New Democrats, wants Canada to follow France in pressing foreign entertainment companies to pay tax in the countries where their profits are generated.

“Our job … is to protect Canadian culture. It’s not about making it easier for these companies, or have these internet companies run all the way to the bank laughing,” he said.

Conservative MP Dan Albas also has concerns about Ottawa lagging on new copyright regulations. It’s too easy to rip off copyrighted textbooks in Canada now, he said, and cable providers are losing business because of pirated technology.

But for the Conservatives, any changes the government ends up proposing will need to avoid stifling innovation and creativity, while also taking into account smaller artists and creators who make their livings online.

Aside from the copyright question, critics have accused the Liberals of failing to address a number of other critical issues facing Canada’s cultural industries, including journalism.

The Liberals’ 2017 cultural plan revamp included a commitment from Netflix to invest $500 million in Canadian productions, as well as expanded federal funding to the Canadian Media Fund that supports homemade audiovisual programming. In their last budget, the Liberals also committed $50 million in assistance over five years to support local journalism, although the government has yet to announce where that money will go.

But industry critics were disappointed in the plan, which fell far short of the intervention recommended in The Shattered Mirror, a report commissioned by the federal government.

John Hinds, president and chief executive of News Media Canada, said he believes the Liberal government has no interest in directly financing Canadian journalism. His organization has called on the government to boost the Canadian Periodical Fund, which supports Canadian magazines, by $350 million and allowing daily and community newspapers to apply.

Stephen Waddell, national executive director of the Alliance of Canadian Cinema, Television and Radio Artists, was more upbeat about what the Liberals have done for the entertainment industry workers he represents.

He said the cultural exemption from free trade rules that was preserved in new USMCA deal will allow Canada to maintain subsidies for audiovisual productions of national interest through instruments like the Canada Media Fund, which the Liberals have beefed up with $172 million over the next five years.

Now Waddell hopes Canadian content rules for radio and TV can be extended to the digital realm to cover streaming services like Netflix, CraveTV and Amazon Prime Video. Like Nantel, he also wants Ottawa to change the rules so that sales tax is applied to these services, to make a level playing field with Canadian competitors.

“It’s certainly something that we’re going to be putting forward to the expert panel” reviewing the Broadcasting and Telecommunications Acts, he said.

But that panel isn’t slated to make its final report until 2020. For the NDP’s Nantel, that timeline doesn’t capture the urgency for industries that work at the heart of Canadian culture.

“If we don’t want to make the move, we will disappear. Point blank,” he said.

“There’s nothing else to say.”

Alex Ballingall is an Ottawa-based reporter covering national politics. Follow him on Twitter: @aballinga

Alex Boutilier is an Ottawa-based reporter covering national politics. Follow him on Twitter: @alexboutilier

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Anglais

‘Business as usual’ for Dorel Industries after terminating go-private deal

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MONTREAL — Dorel Industries Inc. says it will continue to pursue its business strategy going forward after terminating an agreement to go private after discussions with shareholders.

« Moving ahead. Business as usual, » a spokesman for the company said in an email on Monday.

A group led by Cerberus Capital Management had previously agreed to buy outstanding shares of Dorel for $16 apiece, except for shares owned by the family that controls the company’s multiple-voting shares.

But Dorel chief executive Martin Schwartz said the Montreal-based maker of car seats, strollers, bicycles and home furniture pulled the plug on a deal on the eve of Tuesday’s special meeting after reviewing votes from shareholders.

“Independent shareholders have clearly expressed their confidence in Dorel’s future and the greater potential for Dorel as a public entity, » he said in a news release.

Dorel’s board of directors, with Martin Schwartz, Alan Schwartz, Jeffrey Schwartz and Jeff Segel recused, unanimously approved the deal’s termination upon the recommendation of a special committee.

The transaction required approval by two-thirds of the votes cast, and more than 50 per cent of the votes cast by non-family shareholders.

Schwartz said enhancing shareholder value remains a top priority while it stays focused on growing its brands, which include Schwinn and Mongoose bikes, Safety 1st-brand car seats and DHP Furniture.

Dorel said the move to end the go-private deal was mutual, despite the funds’ increased purchase price offer earlier this year.

It said there is no break fee applicable in this case.

Montreal-based investment firm Letko, Brosseau & Associates Inc. and San Diego’s Brandes Investment Partners LP, which together control more than 19 per cent of Dorel’s outstanding class B subordinate shares voiced their opposition to the amended offer, which was increased from the initial Nov. 2 offer of $14.50 per share.

« We believe that several minority shareholders shared our opinion, » said Letko vice-president Stephane Lebrun, during a phone interview.

« We are confident of the long-term potential of the company and we have confidence in the managers in place.”

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Anglais

Pandemic funds helping Montreal businesses build for a better tomorrow

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Many entrepreneurs have had to tap into government loans during the pandemic, at first just to survive, but now some are using the money to better prepare their businesses for the post-COVID future.

One of those businesses is Del Friscos, a popular family restaurant in Dollard-des-Ormeaux that, like many Montreal-area restaurants, has had to adapt from a sit-down establishment to one that takes orders online for takeout or delivery.

“It was hard going from totally in-house seating,” said Del Friscos co-owner Terry Konstas. “We didn’t have an in-house delivery system, which we quickly added. There were so many of our employees that were laid off that wanted to work so we adapted to a delivery system and added platforms like Uber and DoorDash.”

Helping them through the transition were emergency grants and low-interest loans from the federal and provincial governments, some of which are directly administered by PME MTL, a non-profit business-development organization established to assist the island’s small and medium-sized businesses.

Konstas said he had never even heard of PME MTL until a customer told him about them and when he got in touch, he discovered there were many government programs available to help his business get through the downturn and build for the future. “They’ve been very helpful right from day one,” said Konstas.

“We used some of the funds to catch up on our suppliers and our rents, the part that wasn’t covered from the federal side, and we used some of it for our new virtual concepts,” he said, referring to a virtual kitchen model which the restaurant has since adopted.

The virtual kitchen lets them create completely different menu items from the casual American Italian dishes that Del Friscos is known for and market them under different restaurant brand names. Under the Prasinó Soup & Salad banner, they sell healthy Greek options and their Stallone’s Sub Shop brand offers hearty sandwiches, yet the food from both is created in the same Del Friscos kitchen.

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Downtown Montreal office, retail vacancies continue to rise

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Some of downtown Montreal’s key economic indicators are heading in the wrong direction.

Office and retail vacancies in the city’s central core continued to climb in the fourth quarter of 2020, according to a quarterly report released Thursday by the Urban Development Institute of Quebec and the Montréal Centre-Ville merchants association. The report, whose first edition was published in October, aims to paint a socio-economic picture of the downtown area.

The survey also found office space available for sublet had increased during the fourth quarter, which may foreshadow even more vacancies when leases expire. On the residential front, condo sales fell as new listings soared — a sign that the downtown area may be losing some of its appeal to homeowners.

“It’s impossible not to be preoccupied by the rapid increase in office vacancies,” Jean-Marc Fournier, the former Quebec politician who now heads the UDI, said Thursday in an interview.

Still, with COVID-19 vaccinations set to accelerate in the coming months, “the economic picture is bound to improve,” he said. “People will start returning downtown. It’s much too early to say the office market is going to disappear.”

Public health measures implemented since the start of the pandemic almost a year ago — such as caps on office capacity — have deprived downtown Montreal of more than 500,000 workers and students. A mere 4,163 university and CEGEP students attended in-person classes in the second quarter, the most recent period for which figures are available. Border closures and travel restrictions have also brought tourism to a standstill, hurting hotels and thousands of local businesses.

Seventy per cent of downtown workers carried out their professional activities at home more than three days a week during the fourth quarter, the report said, citing an online survey of 1,000 Montreal-area residents conducted last month.

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