The departure of six leading indie labels from CRIA is timely given that my Lawbytes column this week (Ottawa Citizen version, homepage version) focuses on Canada's growing cultural deficit. Late last month Statistics Canada released data on Canadian trade in cultural services. The data tracks the import and export of cultural services such as film production, television broadcasts, and music royalties. The latest report reinforces the economic importance of cultural services – imports and exports total nearly $5 billion per year in Canada – as well as the apparent inability to reduce the "culture deficit." That deficit, which reflects the gap between the amount of money flowing out of the country relative to the amount coming in, now stands $546 million dollars, up from $477 million the year before.
Virtually the entire deficit stems from copyright royalties and broadcasting fees. The copyright royalty deficit, which stands at $358 million, comes from nearly every cultural sector. Two dollars of copyright royalties exit the country for every one that enters in the writing market, three dollars exit for every one in the music industry, and four dollars exit for every one in the film industry. The broadcasting industry is the most lopsided. Reflecting the enormous popularity of U.S. television shows in Canada and the limited success of Canadian television productions outside the domestic market, Canada faces a broadcasting fee deficit of $363 million as well as a broadcasting copyright royalty deficit of $150 million.
The growing deficit signals the need for industry leaders and policy makers to rethink how Canada develops and promotes cultural services.