Pablo Rodriguez tweet, May 3, 2022 https://twitter.com/pablorodriguez/status/1521467518149402624

Pablo Rodriguez tweet, May 3, 2022 https://twitter.com/pablorodriguez/status/1521467518149402624

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Standing on a Shaky Foundation: What Lies Behind The Near-Impossible Challenge of Updating Canada’s Outdated Cancon Rules

Canadian Heritage Minister Pablo Rodriguez, who is hosting a culture summit this week in Ottawa, has said that he is open to modernizing the definition of Canadian content and that he is “open to all kinds of suggestions and ideas.” I’ve devoted many posts to the Cancon definition issue (even creating a Cancon quiz), noting that the current system is a poor proxy for “telling Canadian stories.” This system matters since the government’s Internet regulation policies are ostensibly designed to support Canadian content, but if the existing definitions don’t do that, they cannot reasonably be expected to achieve their objectives.

While I’m supportive of Rodriguez opening the door to reform, I have my doubts the government will make any significant changes to the current system. The challenge is that Cancon policy stands on a shaky foundation that is really three policies in one: an economic policy, a cultural policy, and an intellectual property policy. These three policies are often at odds with one another and used by politicians and lobby groups interchangeably to justify mandated contributions, content regulation, and foreign ownership restrictions. When the data doesn’t support one of the policies, they simply shift the discussion to one of the other policy objectives.

The conversation around Cancon usually starts with an economic rationale, namely that government policies are needed to support the economic success of the sector and ensure jobs and economic benefits. For example, when introducing Bill C-11, Rodriguez told the House of Commons “this is about fairness and good middle-class jobs in the cultural sector” and that:

An unbalanced system with unequal obligations is only making this situation worse for our artists, our creators and our culture. With fewer resources, fewer opportunities and fewer productions, Canadian music and stories will become harder and harder to find, and that is not what we want. We want the opposite. Without intervention, current trends in the market are expected to result in a decline in the production of Canadian television content of almost $1 billion by 2023 when compared with 2018.

The problem is that the economic case does not line up with the data. This actually isn’t a problem, but rather a good news story of a sector that has enjoyed massive economic success and investment in recent years. Provinces such as Quebec and Ontario have pointed to record amounts of film and television production in recent months, with Ontario alone reporting:

its highest production levels to date with 394 productions bringing in $2.88 billion in production spending for the economy. In addition to dollar value, these figures represent over 48,000 full-time equivalent direct and spin-off jobs, which is an increase of 38 per cent or 18,468 jobs from 2020.

This data is consistent with the CMPA’s Profile 2021 report, which shows that the last three years are the three biggest years ever for spending on film and television production in Canada. Much of that has been driven by foreign investment, which has topped $6 billion per year for the past two years. COVID has obviously taken a toll, but the pure economic argument about regulation such as Bill C-11 to support production is not backed by the data.

When confronted with the numbers, supporters of Bill C-11 often shift to the second policy objective of cultural support by “telling Canadian stories.” This argument centres on the notion that the film and television production may be production in Canada but it is not Canadian production, leading Rodriguez to proclaim that “our cultural identity is at stake.” The problem with this argument – as Rodriguez seems to acknowledge with his willingness to open up the Cancon definition issue – is that the current system does not achieve the objective of telling Canadian stories.

Rather, the policy is little more than a tick-box exercise that privileges some professions over others. This means that productions based on works by Canadian authors may not count as certified Cancon, whereas productions with little connection to Canada such as “Gotta Love Trump” or the Norwegian film “Hevn” somehow count as Canadian. Is there any reason that basing a film on a Margaret Atwood or Yann Martel book is irrelevant for Canadian content purposes? If the goal is telling Canadian stories then why do those Canadian stories not count? Under the current system, the screenwriter counts, but the source of the story does not. That isn’t telling Canadian stories, it is providing economic advantage to some creators over others.

Given the lack of connection between certified Cancon and cultural objectives, supporters often then shift to the third objective, IP ownership. In fact, sometimes supporters say the quiet part out loud, such as when Peter Grant told the Canadian Press last month that “in defining Canadian content the proprietary rights must be held by a Canadian. But it doesn’t have to look Canadian or be about a Canadian story.” But Cancon policy as IP policy raises its own set of issues. Were the Montreal Canadiens no longer Canadian when they were owned by George Gillette, a U.S. businessman? Is Jusqu’au Déclin, a Quebec-based film not Canadian because it is owned by Netflix? IP ownership may be viewed as important from an economic perspective, but the correlation to cultural objectives is very weak.

In fact, IP ownership objective is regularly used to mislead the public on the reality of foreign streamer contribution. Bill C-11 supporters often claim that Netflix, Disney, Amazon and others do not contribute to the creation of Canadian productions. Yet the reality is that the system does not allow them to do so unless they are prepared to give up their IP ownership in the work. That leaves Netflix’s Trailer Park Boys, Amazon’s Toronto Maple Leafs documentary, and Disney+’s Turning Red as productions that are Canadian in every way except ownership and therefore do not qualify as certified Cancon. What Bill C-11 seeks to do isn’t necessarily to foster more productions in Canada, but rather require foreign payments while simultaneously blocking potential ownership of the resulting work.

Some of these issues could be solved with a candid policy reform process that identifies the policy objectives and how best to achieve them. But given that the current system already has its winners and losers, any changes will invariably spark a political fight. Far easier then, to misleadingly talk about jobs, cultural survival, and blocking foreign ownership as the basis for new Internet regulations and hope that few notice how much the bill hinges on an outdated policy that does little to advance Canadian cultural interests, however defined.

8 Comments

  1. And in the end video games are a much bigger business than anything being discussed here. Heck, WATCHING people play video games is probably bigger. So should the CRTC regulate Ubisoft or Twitch? The only sensible thing to do is to liberate traditional broadcasters from these stupid paternalistic requirements and shutdown the CRTC, instead the government seems determined to apply them to all human expression everywhere. At what point are people going to realize this is madness?

  2. Pingback: Why Bill C-11 is 1970's Thinking Applied to 2022 - Freezenet.ca

  3. irene berkowitz says:

    Hi Michael,
    Exactly!
    As always — KUDOS and VERY WELL DONE!
    irene

  4. Konrad von Finckenstein says:

    Wonderful clear explanation of the muddled Cancon policy
    Let’s hope Rodriguez reads your piece

  5. Scott MacKinnon says:

    I’ve worked on Film and TV sets for 38 years and I’ve always found it extremely insulting that, despite the fact that my work and those of my fellow technicians are directly responsible for 3 billion dollars worth of annual economic activity, we are not considered part of Canada’s ‘official’ culture. The cultural and business elites of Ontario have been given everything they’ve asked for by a sycophantic public regulator and now that they’re business model has failed, they run hat in hand for government protection from their own mistakes. I refuse to take yet another pay cut because of someone else’s incompetence, Canadian productions are by far and away, the worst managed. Worst safety compliance, worst pay, worst conditions etc… They take their money off the top and leave us scraps to actually make something with. I think I need to testify to these bureaucrats…

  6. You’ve managed to interest me.

  7. Fortinbras says:

    The rule that one must be sixteen to drive means that some people sixteen and older who are not mature enough to drive are allowed to, while some fifteen-year-olds who are mature enough cannot. But the benefits of the rule outweigh the cost of having to assess each individual’s level of maturity…

    …A standard that said “only mature people should be able to drive” would allow full consideration of an individual’s readiness to do so. But such an approach also has costs: the absence of a clear rule allows biases and prejudices to affect assessments of maturity, makes it difficult for people to know when they will be able to drive, and makes it challenging to review the decisions of those administering the rule.

    David Cole, “When rights went right”, New York Review of Books. April 21, 2022.

  8. Fortinbras says:

    Michael Geist’s post is confused and misleading, and reflects his misunderstanding of Canadian program production and broadcasting. The current system of Canadian content recognition is a reasonable instrument for identifying Canadian audiovisual content, though it may have to be revised a little once the web giants are integrated into the Canadian broadcasting system, as Bill C-11 seeks to do. Here is why.

    Many government programmes pursue several policy objectives and this is perfectly normal. Canadian broadcasting policy targets four types of objectives: cultural, political, social and economic (see subparagraph 3 (1)(d)(i) of the Broadcasting Act). Of these, the cultural is the most important and the economic is the least important. (Some would like to overturn this hierarchy and model the Broadcasting Act after the Telecommunications Act. These parties are generally hostile to the recommendations of the Broadcasting and Telecommunications Legislative Review Panel and Bill C-11.) Contrary to what Michael Geist asserts, the conversation around the certification of Canadian content starts with the cultural rationale which is at the heart of the Broadcasting Act, that is – the maintenance and enhancement of national identity and cultural sovereignty (paragraph 3 (1)(b) of the Act).

    Canadian broadcasting has been in trouble since the middle of the last decade. According to the most recent published data available, total revenues for Canadian conventional, discretionary and on-demand television services fell every year between 2016 and 2020, from $6.1 billion to $5.3 billion. The trend is clear, and it’s the result of the shift to the viewing of unregulated online broadcast services operated by the web giants. But Michael Geist doesn’t want to talk about this. He shifts the discussion to address his obsession – the success of runaway Hollywood production shooting in Canada. This phenomenon may be an economic success, but it is not a cultural success and does little to further the cultural, political and social objectives of the Broadcasting Act.

    On what basis, does Michael Geist say that “the current system does not achieve the objective of telling Canadian stories”? He cites a few isolated examples, but is apparently incapable of making a distinction between a literary work and an audiovisual work. The Broadcasting Act was not designed to promote Canadian literary works; some audiovisual adaptations of Canadian literary works have little or nothing to do with the original literary work or Canada. Would Michael Geist consider Alfred Hitchcock’s The Thirty-Nine Steps a Canadian work? And yet it’s a screen adaptation of Canadian John Buchan’s novel. The Handmaid’s Tale is a wonderful literary work, but the television series was made with American writers, directors and principal actors. Margaret Atwood had only a salutary advisory role to play in the audiovisual production which does not strike me as particularly Canadian, although many scenes were shot in Canada. Similarly, the adaptation of Canadian David Morrell’s novel, First Blood, the first in the Rambo series starring Sylvester Stallone, did not qualify as Canadian content even though it was directed by a Canadian and shot in British Columbia. There is nothing particularly Canadian about Rambo. The same could be said of the wonderful screen adaptation of Canadian Michael Ondaatje’s The English Patient – none of the screenwriter, director or principal actors were Canadian (French and American actors played the Canadian characters). Adapting a Canadian novel counts in the Canadian audiovisual points system as long as the principal writer on the team associated with the audiovisual production is also Canadian. This is because, as anyone who was familiar with the issue would know, screen adaptations can and do stray very far from the original literary work, sometimes rendering them unrecognizable. The. screenwriter is a key determining factor as to whether a scripted audiovisual work is Canadian or not. Most Canadian programs are unscripted.

    Audiovisual production is very expensive and the need to put together the financial structure of a scripted audiovisual work prior to production is a key determinant underlying the utility of the Canadian points system. Decisions about which projects to undertake (and therefore finance) have to be made with nothing to rely on but the screenplay and the track record of the principal creative elements involved in the production. The points system approach assures the broadcaster that the production will in fact qualify as Canadian content and be certified prior to production. (Imagine a situation where civil servants made life or death decisions on whether or not they thought a production represented a Canadian story, after it had been paid for and completed!) This is why provincial tax credit authorities have all adopted the points system, although they are not obliged to do so in pursuit of their economic objectives.

    So, the Canadian content certification system works reasonably well, with the occasional glitch producing an inappropriate result. However, there is a looming property rights issue which will come to the fore, if Bill C-11 passes in its current form. At the present time, the system requires that the proprietary rights be held by Canadians – either a Canadian broadcaster or a Canadian independent production company or distributor. If the web giants, such as Netflix and Amazon, are required to invest in Canadian programs, they will want to retain the proprietary rights to their productions. Does this mean that all of their Canadian programs would have to be co-produced with a Canadian independent producer, or should the current requirement be relaxed? What would be the implications of such a relaxation for the future of the Canadian independent production sector which the Broadcasting Act says should provide a “significant contribution” to the programming provided by our broadcasting system (subparagraph 3 (1)(i)(v))? These are the real questions related to updating the Cancon rules which will have to be faced once Bill C-11 has been adopted.

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