The Broadcasting Act blunder series takes a day off to focus on my Globe and Mail op-ed this week on the decision in Bill C-10 to remove Canadian ownership and control requirements from the Broadcasting Act. The op-ed notes that while Canadian Heritage Minister Steven Guilbeault has told the House of Commons that the bill seeks to safeguard cultural sovereignty, the reality is that it represents a surrender of Canadian ownership and control over the broadcasting system.
The full column can be found at the Globe website, but it points to the irony that there are viable alternatives that would allow the government to maintain the long-standing Canadian ownership principles and still ensure that Canada benefits from the presence of foreign streaming companies. The government could guarantee more revenues for Canadian productions from companies such as Netflix through tax policy, including mandating the collection and remission of sales taxes. It could also use existing tax credit policies that are an essential part of the production sector to mandate that recipients meet new requirements on promotion and adjust current eligibility requirements to make investment by foreign services in Canada even more attractive.
In other words, rather than seeking to shoehorn internet streamers into the broadcast system despite obvious differences and significant repercussions, it could rethink the evident blunders in the latest reform bill. Staying on the current path spells the end of Canadian ownership and control of the broadcasting system as a policy priority, and it opens the door to its end as market reality as well.
(prior posts in the Broadcasting Act Blunder series include Day 1: Why there is no Canadian Content Crisis, Day 2: What the Government Doesn’t Say About Creating a “Level Playing Field”, Day 3: Minister Guilbeault Says Bill C-10 Contains Economic Thresholds That Limit Internet Regulation. It Doesn’t, Day 4: Why Many News Sites are Captured by Bill C-10), Day 5: Narrow Exclusion of User Generated Content Services, Day 6: The Beginning of the End of Canadian Broadcast Ownership and Control Requirements, Day 7: Beware Bill C-10’s Unintended Consequences, Day 8: The Unnecessary Discoverability Requirements, Day 9: Why Use Cross-Subsidies When the Government is Rolling out Tech Tax Policies?, Day 10: Downgrading the Role of Canadians in their Own Programming, Day 11: The “Regulate Everything” Approach – Licence or Registration Required)
Section 3 of the Broadcasting Act begins with: “3 (1) It is hereby declared as the broadcasting policy for Canada that (a) the Canadian broadcasting system shall be effectively owned and controlled by Canadians…” This means that, if this sub-section is retained in the new Act, non-Canadian online services would continue to be a part of the Canadian broadcasting system, as they are now. With sub-section 3(1)(a), there is a distinction to be made between the system as a whole and the individual undertakings that comprise that system which includes exempted online services and US border stations broadcasting into Canada. The presence of certain companies who are non-Canadian does not affect the control of the system as a whole.
If the current government removes sub-section 3(1)(a) from the existing Act, then a future government could amend the current rules governing Canadian ownership of broadcasting undertakings without going before Parliament. At the very least, Bill C-10 should therefore retain sub-section 3(1)(a) to avoid this eventuality. The optimal solution would be to incorporate the Direction to the CRTC (ineligibility of non-Canadians) into the Broadcasting Act, as has been done with the Canadian ownership requirements for telecommunications. (See Part II of the Telecommunications Act.)
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