The Broadcasting Act blunder series has previously examined Bill C-10’s enormous cost to the foundational elements of Canadian broadcasting policy including the beginning of the end of Canadian ownership and control requirements and how it downgrades the role of Canadians in their own programming. There is another significant cost that comes from a bill that Andrew Coyne of the Globe and Mail describes as “one of the most radical expansions of state regulation in Canadian history.” At a time when the government has emphasized the importance of intellectual property, the bill opens the door to less Canadian control and ownership over its IP.
There is no reference to intellectual property in the bill nor any discussion of it within Canadian Heritage’s FAQ or departmental materials. While the CMPA said it was “pleased to see the government recognize the importance of Canadian ownership of intellectual property”, the government did no such thing. Other than a background document reference to IP that suggested it could be included in a policy direction to the CRTC, intellectual property is not prioritized in the bill. In fact, by mandating that foreign services pay to support Canadian content and claiming they should be treated as equivalent to Canadian services for regulatory purposes, the government is actually placing policy measures designed to safeguard intellectual property at risk.
IP policy has long been viewed as an important part of Canadian content policy. A production can be certified as Canadian content either through access to tax credits and/or Canadian Media Fund subsidy, or by the CRTC. All three require Canadian ownership of IP. For example, tax credits favour Canadian copyright ownership with larger credits available under the Canadian Film or Video Production Tax Credit (which requires Canadian copyright ownership) than with Film or Video Production Services Tax Credit (which does not).
These policies have prioritized domestic IP ownership and precluded foreign companies from producing and owning fully-financed Canadian content. As a result, revivals of Canadian programs such as Trailer Park Boys (Netflix) or Kids in the Hall (Amazon) would not meet the qualification requirements as Cancon where those companies are the sole funders and producers. The problem with Bill C-10 is that since no production fully-financed and owned by a foreign entity can be certified as Canadian content and the government is seeking to mandate such financing, the Canadian content rules will have to change. If those changes mean removing the IP ownership link between tax credits and subsidies, and well-financed foreign streamers are allowed to fully-finance and own Canadian content, they will easily outbid Canadian producers for the best content. The end result: the best Canadian IP is owned by foreign streaming services, not Canadians.
There is nothing wrong with wanting to promote Canadian stories, facilitate job creation, and enhance intellectual property ownership. But if the goal is to promote intellectual property, Canada cannot both require foreign investment in Cancon and restrict or hamper IP ownership in the resulting work. To mandate that foreign companies pay to support Canadian content creation but create unequal rules on the benefits from that support or the Cancon certification process unquestionably invites a trade challenge that would place Canada’s longstanding Cancon policies in question or require changes that places control of IP in foreign hands.
(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, Broadcast Reform Bill Could Spell the End of Canadian Ownership Requirements, Day 12: The “Regulate Everything” Approach – The CRTC Conditions, Day 13: The “Regulate Everything” Approach – Targeting Individual Services)