Submitted by Lenore Gibson, Chair, Canadian Association of Broadcasters
Today, the Broadcasting and Telecom Legislative Review Panel will deliver its long-awaited final report. Canada’s private broadcasters await that report with interest. The Panel’s recommendations will set the stage for new legislation, which the Government has promised to introduce by the end of 2020.
As many private broadcasters expressed to the Panel, the stakes of this process are monumental. Change is needed more than ever with the arrival of new foreign streaming services in Canada. Canadian broadcasting policy was developed for a closed system. It never contemplated that massive foreign platforms would enter the market “over the top” of the regulated wall, and become leading content providers to Canadians.
Fortunately, the federal government finally appears poised for change. It has promised to introduce legislation requiring Canadian content contributions from “all content providers, including internet giants.” In our view, change cannot come a moment too soon.
In an interview with the Canadian Press earlier this month, CRTC Chair Ian Scott, said it is “inevitable that foreign media companies streaming content into Canada, including Netflix and Amazon, will have to make an “equitable” contribution to the production of Canadian content.”
The term “equitable” appears to have been chosen carefully. The CRTC used the same term in a similar context in its 2018 Harnessing Change Report. “Equitable” suggests not necessarily “equal” to the contributions of Canadian broadcasters, but certainly something equivalent and “appropriate” (another word used by the Commission).
We commend the Chair for continuing to press for “equitable” contributions from foreign players.
However, the Canadian Press article parrots Netflix’s arguments that the company’s voluntary commitments to “original productions in Canada” should be considered in the same light as the mandated Canadian programming contributions of Canadian companies.
We respectfully disagree.
We should not confuse “original productions in Canada” with Canadian content. Netflix has been very clear; its commitments are to the former not the latter. And it wants no part of current rules that dictate to Canadian broadcasters how monies are spent (in house, to independent producers or to third party funds) and in which programming genres they must be spent (news, drama, documentary etc.)
Netflix announced last year that it had met its $500 million deal with former Heritage Minister Melanie Joly on “original productions in Canada” ahead of schedule. But the company has not revealed what proportion of spending went to Canadian programming, using standard Canadian content criteria.
No one is suggesting a one size fits all approach to regulation that applies to all players. But in designing a new contribution framework that includes foreign digital players, we must recognize that Netflix’s current contributions are nowhere near “equitable”.
Like the over $4.5 billion in annual Canadian production activity generated by Hollywood and other foreign studios for location and service production, Netflix’s decision to spend a couple hundred million dollars a year on production in Canada is welcome. It generates jobs for Canadian crews, effects companies, ancillary businesses, Canadian producers and sometimes features Canadian talent and locations. But make no mistake, these are not “equitable” to the investments that our members make in Canadian content.
To us, at a minimum, “equitable” necessarily entails both a comparable dollar investment in Canadian production, and a comparable use of Canadian creative resources. Currently, Netflix meets neither standard. (And Amazon and Disney haven’t tried.)
To us, “equitable” goes even further. It entails other important factors – including taking into account broader contributions to Canada and the Canadian economy, regulatory burden, level of disclosure, and structural or systemic competitive advantages. Again, on that standard, foreign players like Netflix fall below the mark.
Canada’s private broadcasters recognize that foreign content providers are here to stay, and we are adapting to meet the challenge. All we want is a fair opportunity to compete. This year, we hope to finally begin to develop an “equitable” contribution framework. As we do, we must make sure to compare apples to apples. “Contributing to Canadian content” must mean the same thing to everybody.
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