National Post (National Edition)
Liberals to release fix for ‘broken’ Cancon
Reacting to new challenges of internet age
More than a year after describing the systems that govern Canada’s cultural sector as “broken” in a world in which the internet increasingly trumps traditional distribution methods, Canadian Heritage Minister Mélanie Joly will reveal her plans for a fix.
Joly will release her much-anticipated strategy for Canada’s cultural industries in a digital world on Thursday in a speech that, in tune with the times, will be live-streamed on Facebook.
It comes after a year of consultations on how to fund and promote Canadian content given the massive technological changes since the last major overhaul of the broadcasting system in 1991 when people watched video on TV screens, read news on paper and listened to music on the radio.
While the plan is expected to be high level, it could lay the groundwork for disruption to the television, radio, film, video games, music and newspaper industries — a $48-billion cultural sector that the government says employs more than 640,000 Canadians.
The Montreal MP previously said “everything is on the table,” including changes to the broadcasting, income tax and telecommunications acts, the mandates of the CBC and the Canadian Radio-television and Telecommunications Commission, and funds that provide financial support to creators.
At the outset, Joly focused on promoting and marketing Canadian content abroad rather than protecting it at home. That market-friendly position could be a hard policy for the Conservatives to oppose. Yet any changes to the existing funding could rile up cultural organizations, many based in Quebec, that rely on the system.
Traditionally, funding for much Canadian video content has come from levies on broadcasters, which must follow prescriptive rules for what qualifies as Canadian content. But as Canadians cut the cord and watch content on platforms such as YouTube and Netflix, these funds are in decline. Creators are seeking ways to replace the cash, with Liberal MPs proposing a tax on the new means of distribution — namely, a tax on high-speed internet service providers that would be passed onto consumers.
Prime Minister Justin Trudeau, however, killed the idea of an internet tax. The Liberals have also promised not to implement a Netflix tax.
That leaves all stakeholders questioning how — or whether — the government will find additional cash for Canadian content as it competes against everything that is accessible online.
For BCE Inc., one of the country’s largest owners of both content and the means of distribution, the best outcome would be a “level playing field” with the new digital competitors, chief legal officer Mirko Bibic said.
An obvious example is sales tax. Online streaming services such as Netflix don’t charge sales tax whereas Bell’s CraveTV must.
Last week, the French government took taxes a step further by announcing a two-per-cent levy on all video providers that make money in the country, including online streaming giants. The cash will go toward France’s national film board to create content.
Canadian Media Producers Association’s president Reynolds Mastin agreed “those who benefit from the system should also contribute to it.” He emphasized the importance of continued investment by broadcasters into domestic content. “If you don’t have a strong and stable and thriving domestic content industry, then the long-term sustainability of the sector is at risk,” Mastin said.
The government recently indicated it agrees with that position. Joly demanded the CRTC reconsider a decision that let broadcasters spend less on scripted content after extreme pressure from creative groups.
But it will be critical for the government to tackle foreign funding sources, said Michael Geist, professor of internet law at the University of Ottawa.
Foreign investment is now one of the most important funding sources for sectors including English language scripted television, Geist said. This gives the government a pathway to promote content on over-the-top services around the world instead of just in Canada’s closed broadcasting system. Joly needs to indicate the government is actively working with large internet firms including Netflix, Facebook and Google to promote Canadian content.
“In a world of abundance, competition is what fuels a lot of the investment and creativity,” Geist said. “Canada is doing really well without the need for heavy-handed regulation.”
Joly’s announcement could also touch on copyright laws as they relate to music streaming, Canada’s cultural policy in relation to NAFTA negotiations, and a model to fund local journalism.