Canadian Heritage Minister Melanie Joly announced via Twitter yesterday that the government has asked the CRTC to reconsider its TV licensing decision from earlier this year that established a uniform broadcaster spending requirement of 5 percent on programs of national interest (PNI, which includes dramas, documentaries, some children’s programming, and some award shows). The decision, which would lead to a reduction of mandated spending for some broadcasters, sparked a strong lobbying campaign from various cultural groups who claimed the decision would result in hundreds of millions in reduced spending on Canadian content. While the government’s decision should not come as a surprise – siding with the creator groups against the CRTC makes political sense – no one should confuse it with good policy. Indeed, the reality is that the CRTC’s belief that the digital market would create the right incentives for investment is increasingly borne out by recent developments that suggest Canadian broadcasters have few alternatives other than to develop their own original programming.
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Canadian Government Puts Copyright Board Overhaul on Fast Track With Consultation Launching Tomorrow
The Canadian government is planning the most significant changes to the Copyright Board of Canada in decades with a consultation set to officially launch tomorrow. Given the longstanding concerns with the Board from creators and users alike, the government has decided to place board reform on a fast track that is separate from the broader copyright review scheduled to commence later this year. The consultation, which will outline potential reforms to address delays and case backlogs, will run until late September. Navdeep Bains, the Minister of Innovation, Science and Economic Development, working with Canadian Heritage, hopes to introduce a Copyright Board reform legislative and regulatory package in early 2018.
I spoke earlier today to Bains, who explained that the government believes there needs to be quicker decisions, greater transparency, and an effort to address the current backlog given concerns about ensuring creators are paid and in bringing new innovative service to the Canadian market. The consultation, being held jointly by ISED, Canadian Heritage and the Board, will identify several potential measures to address the board delays including case management processes, establishing new case deadlines, streamlining cases before the board, as well as giving the board more power to advance proceedings, award costs, and limit the ability for parties to delay proceedings.
CBS, one of the major U.S. networks, announced yesterday that it plans to take its All Access video streaming service global starting with the Canadian market next year. The move will increase consumer choice and once Hulu follows suit (which it eventually will), all the major U.S. broadcasters will be streaming directly to Canadians. Assuming broadcasters such as CBS begin to retain the video streaming rights to their own shows, this means that the Canadian broadcast licensing model that relies heavily on exclusive rights to U.S. programming and simultaneous substitution will rapidly come to an end. While the industry has been focused on the fighting the recent CRTC decision banning simsub from the Super Bowl, U.S. broadcasters are independently eroding the value of simsub, ultimately leaving Canadian broadcasters to bid on less attractive, “non-exclusive” rights.
Politicians are sometimes said to struggle with “developing policy at Internet speed,” but Thursday the government gave new meaning to the words. My Globe and Mail op-ed notes that as Liberal MPs were presenting the much-anticipated Standing Committee on Canadian Heritage report on media that included a recommendation for a 5-per-cent tax on broadband access, Prime Minister Justin Trudeau and Canadian Heritage Minister Mélanie Joly were assuring Canadians that the government had no intention of accepting the committee’s proposal.
Ms. Joly left the door open to an Internet tax last year through her national consultation on Canadian content in a digital world, steadfastly refusing to take a firm position on the issue. The committee report effectively ended the debate as the immediate criticism of the ill-advised policy measure means that an Internet tax has about as much future as a dial-up modem.
The Standing Committee on Canadian Heritage is reportedly set to release its much-anticipated study on the future of media today with a recommendation for a new 5% tax on broadband services to fund Canadian media and the creation of Cancon. The Globe reports that the Conservative MPs on the committee oppose the recommendation. I raised concerns about the possibility of new digital taxes last fall, fearing that Canadian Heritage Minister Melanie Joly would implement them as part of her review of Cancon in a digital world and noting that the Ontario government appeared supportive of the approach. Joly has yet to outline her plans which are scheduled for release in September, but has refused to rule out Internet taxes and regulation. I will update this post once the full report is released, but based on the Globe report it must be stated that an Internet tax to fund Canadian content is a terrible policy choice with exceptionally harmful effects on the poorest and most vulnerable households in Canada.