Honora's November Holiday Shows at QVC - Behind The Scenes by Honora Pearls (CC BY-NC-ND 2.0) https://flic.kr/p/7kavLr

Honora's November Holiday Shows at QVC - Behind The Scenes by Honora Pearls (CC BY-NC-ND 2.0) https://flic.kr/p/7kavLr

News

The Full “Culture Exception” That Isn’t: Why Canada Caved on Independent Cultural Policy in the USMCA

In the final weeks of the USMCA negotiations, Canada signalled that a full cultural exception was a non-negotiable issue with Prime Minister Justin Trudeau wading in to emphasize the importance of the issue. While the resulting deal has garnered applause from many culture lobby groups (music, magazines, publishers, ACTRA), the reality is that the government did not obtain a full cultural exception. In fact, after criticizing the Conservatives for accepting exceptions to the cultural exception in the TPP (and making it a key issue in the CPTPP once the U.S. exited the agreement), the Liberal government similarly included two exceptions and agreed to an extension in the term of copyright that will have a far more damaging impact on access to Canadian culture than any proposed USMCA provision.

The TPP featured two exceptions to a general cultural exception that excluded the sector from the ambit of provisions on cross-border trade in services:

Canada reserves the right to adopt or maintain any measure that affects cultural industries and that has the objective of supporting, directly or indirectly, the creation, development or accessibility of Canadian artistic expression or content, except:

a) discriminatory requirements on services suppliers or investors to make financial contributions for Canadian content development; and 

b) measures restricting the access to on-line foreign audiovisual content. 


The first – discriminatory requirements to support Cancon development – raised a legitimate concern about the possibility of mandated Cancon payments by foreign providers. While Canadian groups have actively lobbied to require foreign providers such as Netflix to make payments similar to those paid by Canadian broadcasters and broadcast distributors, they have been less supportive of Netflix benefiting from those Cancon funding mechanisms. Payment mandates without the same benefits would likely (and rightly) be viewed as discriminatory and the TPP would have blocked such an approach. The second exception – restricting access to online video services – would have had no practical policy cost to Canada given its support for net neutrality and the unlikely prospect of supporting blocking foreign services. However, then-Canadian Heritage Minister Melanie Joly insisted that the exceptions had to go, telling an industry audience that “it was a tough battle, but I’m really grateful that it’s a battle we were able to win.”

Despite having set the bar at a full cultural exception, the reality is that the USMCA also includes two exceptions to the exception, both of which use the treaty overrule regulatory decisions of the supposedly independent Canadian Radio-television and Telecommunications Commission. Annex 15-D requires Canada to (1) rescind the CRTC broadcast regulatory policy that stopped the simultaneous substitution policy for Super Bowl broadcasts (ie. the policy that recently allowed Canadians to watch the U.S. feed and U.S. commercials) and (2) enable U.S. home shopping broadcast services – namely QVC – to be authorized for distribution in Canada.

Both exceptions are the direct result of U.S. lobbying. President Donald Trump told a rally last week that the simultaneous substitution issue simply took a two minute phone call with NFL Commissioner Roger Goodell and the QVC decision stems from a 2016 CRTC ruling that denied it distribution authorization in Canada. The Liberal government has typically adopted a hands-off approach on administrative issues such as these ones – particularly when the issue is still before the courts as is the simultaneous substitution policy – but it effectively intervened by caving to U.S. pressure in agreeing to overrule its regulator.

Despite the industry applause, these exceptions are arguably a bigger surrender on the independence of Canadian cultural policy than the TPP envisioned. The TPP included two provisions that had little likelihood of being implemented and merely involved future policy flexibility (industry lawyer Peter Grant argued that they did not change anything at all). Yet the USMCA exceptions strike at the heart of Canada’s ability to make its own cultural policy decisions with the government caving on two issues of concern to U.S. lobby groups.

Why the change in attitude toward the USMCA’s cultural exceptions?

Simply put, Canadian cultural groups were concerned with possible restrictions on mandated Cancon contributions or Netflix blocking, but have few qualms about simultaneous substitution or permitting another shopping network to be distributed in Canada. The claims that a full exception is critical was always hyperbole as groups typically applaud exceptions they like and criticize those they don’t.

In fact, the treaty’s biggest impact on Canadian culture will be the copyright term extension, which will reduce access to Canadian heritage for decades. That means the works of hundreds of Canadian authors, composers, and creators will be locked down until at least 2040. Moreover, with studies indicating that the term extension could add hundreds of millions to education costs, 20 extra years of copyright protection will not come cheaply. The Canadian government treats copyright as both industrial and cultural policy, hence the shared responsibility between ISED and Canadian Heritage. However, culture can’t be said to be off the table when the government agrees to changes to Canadian copyright that will limit severely access to our culture.

Since many cultural groups support the extension, there is no criticism. But make no mistake: the USMCA represents a surrender of the independence of Canadian broadcasting and copyright policy with exceptions to cultural regulation that may be more significant than any found in previous Canadian free trade agreements.

4 Comments

  1. I completely agree! There are various disturbing details in the USMCA that represent a surrender of independent Canadian policy making to American interests. As an aside, several commentators have been alarmed by how a provision in the USMCA effectively surrenders Canadian sovereignty to the U.S. with regards to negotiating a free trade agreement with a “non-market” economy like China.

    I wonder if the USMCA mandated copyright term extension can be implemented into Canadian law in a provisional way so that it can be rolled back later if the agreement were to ever be terminated? For example, could the law state that works whose authors died more than 50 years ago will enter the public domain at the end of the year in which the USMCA is terminated (or after a one or two year transitional period following its termination)?

    By making the copyright extension directly linked to the USMCA, this deleterious provision would automatically be rolled back if the mercurial American President (or one of his successors) were ever to terminate it. If that were to happen, it would be sad for Canada to lose the benefits of the USMCA and still be burdened by the excessive copyright burden it imposed upon us. If copyright were simply to be extended by 20 years without making it provisional upon the continuation of the USMCA, then it may not be possible to roll it back retroactively. Large media companies and publishers that own a lot of old copyrights would probably sue the Canadian government claiming that their IP rights are being arbitrarily stripped away.

  2. One fact overlooked in these dicsussions is that copyright term is not even a fit matter for negotiation in a trade deal. It has nothing to do with trade. The Americans have been marching across the globe for the past twenty years insisting on copyright extensions – with Australia, South America and now Canada – as part of trade deals. Copyright term is a matter of sovereign cultural policy and should not even be a part of a trade deal. The copyright provisions in the so-called USMCA are just more imperialistic bullying from south of the border. And of course Trudeau and co. just caved. No doubt they pushed a whole bunch of what they considered little things to the centre of the bargaining table and said “here, we’ll give you all this for dairy, or auto parts.”

  3. While it is pleasing to see Michael Geist now marching to the drum of an independent Canadian cultural policy, none of these issues is terribly significant. The CRTC’s exception to its simultaneous substitution policy for the US Super Bowl was a one-of-a-kind mistake that has now been taken out of the hands of the Commission. It’s true that US home shopping networks should not be imposed on Canadians, but this too is a minor irritant in the larger scale of things. The copyright term extension, aligning Canada with European practice as well as American practice, enhances the value of Canadian cultural publications to the advantage of authors and publishers who have applauded the result. (It is true that many non-Canadian publications will also benefit.)

    In his September 3rd blog, Michael Geist asserted that “the fears associated with foreign ownership of broadcasters are largely overblown as the connection between Canadian broadcasting ownership and Canadian culture is tenuous at best”, and that “there is little evidence that Canadian businesses are more likely to comply with the law than foreign operators.” These assertions are wrong and disproved by the efficacious lobbying efforts of the NFL and the QVC shopping network who have successfully appealed to their home government to back up US interests. No Canadian company could have behaved this way.

    • Only large content owners – not the creators themselves – are going to benefit from the extension of copyright. Education will suffer – and where do you think future creators and innovators are going to come from when they can’t afford an education or afford to access cultural materials?

Leave a Reply

Your email address will not be published. Required fields are marked *

*

*