All digital providers should pay for CanCon, panel told

OTTAWA — Federal lawmakers need to make foreign-content providers, such as Netflix, YouTube and Amazon Prime, pay their fair share into producing Canadian content, Canada’s broadcast regulator and its public broadcaster argued this week.

What that share looks like, however, remains uncertain as the federal government moves to tear down and rebuild the country’s broadcast and telecom regulations.

In written submissions to a seven-member panel, both the CRTC and the Canadian Broadcasting Corporation also called on Ottawa to create new rules that encourage news content distributors to deliver accurate and trustworthy information to Canadians.

The submissions, which were due Friday, are part of a widescale review of Canada’s Broadcasting Act, Telecommunications Act and Radiocommunication Act that was started last June by a panel of experts chaired by former Telus Corp. executive Janet Yale.

The Canadian Radio-television and Telecommunications Commission said it’s not looking for broad new powers to regulate the broadcast and telecom industries.

Rather, said commissioner Ian Scott, the CRTC needs a smarter set of regulations it can use to encourage foreign players to contribute to Canada’s cultural landscape.

“What we’re asking for are new and different powers to regulate in a different way,” Scott said in an interview with the Canadian Press. “It doesn’t mean more regulation. It means smarter, better, flexible regulation. A new toolbox.”

The CRTC has asked for explicit statutory authority and flexible mechanisms to regulate audio and video services, both foreign and domestic, including online.

That would help the regulator ensure that any service provider making money from Canadian viewers and listeners also somehow pays toward the creation and distribution of Canadian content, as domestic broadcast companies do now.

Currently, traditional broadcasters in Canada contribute millions of dollars to bodies including the Canada Media Fund and directly pay for original Canadian productions.

But a shift by Canadians to viewing content online has eaten away at funding models that rely on subscriptions and advertising revenue.

Scott said regulators need the authority to reach agreements with new digital platforms to ensure they contribute “equitably” to the creation of that content.

That doesn’t mean a company like Netflix should contribute to cultural programming in exactly the same way as traditional broadcasters, Scott argued.

Netflix currently spends millions of dollars itself on creating broadcast productions in Canada, which translates into jobs, tax revenues and economic activity. YouTube also pays content producers directly, based largely on audience size, regardless of where the content is produced.

But new regulatory tools could compel digital players to use algorithms, for example, to help Canadians discover home-grown content, Scott suggested.