Canadian media organizations face difficult challenges in an age of virtually unlimited Internet competition, a dramatic shift toward digital advertising, and an unprecedented global economic and health crisis. That has led media groups to urge the federal government to “take on” Google and Facebook by requiring them to fund local media. Prime Minister Justin Trudeau has thus far declined to do so. That may spark criticism in some quarters but claims that government-mandated payments from Internet companies will solve the sector’s ills are unconvincing.
My Financial Post op-ed notes that everyone agrees the media sector is more competitive than ever. News organizations such as the New York Times and Washington Post, digital media companies like The Athletic and The Logic, podcasters competing with mainstream media audio offerings and the CBC’s continued digital expansion all offer compelling and competitive news alternatives. This breadth of choice for Canadian news consumers isn’t the fault of Google or Facebook. It is a reflection of low barriers to market entry and a proliferation of services that often do a better job than many established media companies of serving specialized content.
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In the months before the coronavirus outbreak, numerous governments around the world enthusiastically jumped on the “regulate tech” train. Digital tax proposals, content regulation requirements, national digital spending mandates, as well as new privacy and data governance rules were viewed by many as essential to respond to the increasing power and influence of digital giants such as Google, Facebook, Netflix, and Amazon.
My Globe and Mail op-ed notes the pandemic has not only sparked a massive shift in economic and health policy priorities, but it is also likely to reorient our views of the tech sector. Companies that only months ago were regarded as a threat are now integral to the delivery of medical equipment, critical to the continuing function of workplaces in a work-from-home world, and the platforms for online education for millions of students. Billions of people rely on the sector for entertainment, communication with friends and family, and as the gateway to health information.
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Cultural policy in Canada can be contentious, but there is one issue – support for Canadian content or Cancon – that unsurprisingly enjoys near unanimous backing. Given the economic benefits, federal and provincial policies encourage both domestic and foreign film and television production in Canada, but there is a special place for certified Canadian content, which is typically defended on the basis of the need to support cultural sovereignty by promoting “Canadian stories.”
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The Broadcast and Telecommunications Legislative Review Panel report justifies its call for a massive overhaul of Canadian communications law – with increased consumer costs, violation of net neutrality, CRTC intervention into discoverability, and USMCA violations – due in large measure to concerns about support for the creation of Canadian content. I previously blogged about how the panel did not disclose – in either its report or subsequent comments – results of benchmarking research on the Canadian television production sector it commissioned from Nordicity. That report reveals that Canada ranks first among peer countries with respect to television production per capita, domestic television production (ie. Cancon or equivalent domestic production) per capita, hours of television production, and employment.
Last week, Ontario Creates, the Government of Ontario’s agency for cultural creation, released new data that reinforced how the panel’s claims regarding the state of Canadian film and television production are not supported by industry data. Ontario Creates touted a “record breaking year” for Ontario’s film and television production sector, citing more than $2 billion in production spending for 343 productions. Of the $2.1 billion, there was a near-even split between domestic and foreign production: $1.1 billion in foreign production and $1 billion on domestic productions.
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As Parliament continues its review of legislation designed to implement the Canada-U.S.-Mexico Trade Agreement (CUSMA), I have had the honour to appear before both the International Trade and Industry, Science and Technology committees to discuss the digital implications of the trade agreement. While Members of Parliament have expressed concern with copyright term extension that could cost millions of dollars and restrictions on future privacy safeguards, the issue that has sparked the greatest surprise arises from a provision frequently promoted as a “win” during the negotiations.
My Globe and Mail op-ed notes that the inclusion of a cultural exemption was viewed as an important policy objective for the government, with Prime Minister Justin Trudeau insisting “defending that cultural exemption is something fundamental to Canadians.” The USMCA does, indeed, feature a broad cultural exemption that covers a wide range of sectors. The exemption means that commitments such as equal treatment for U.S., Mexican and Canadian companies may be limited within the cultural sector.
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