Cable / Telecom News

OPINION: End the bill tax for Cancon

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I WOULD IMAGINE a large percentage of Cartt.ca readers own a car of some sort.

So, why did you buy yours? Transportation, right? Gotta get from A to B, and C, D, F… What, though, did you need it to have? My own car needed to be the family truckster, except far less ugly than Clark Griswold’s. I needed space, decent mileage, reasonable price and it had to not be a minivan or SUV. I bought my Toyota Venza new. It’s nearly nine years old now and I have been very happy with it.

This is not a Toyota advertisement, however.

What I’m curious about is: For how many of you car owners out there was the determining factor of your purchase where the car was manufactured? I’ve seen enough cars in enough parking lots at enough companies to know this is not a determinative factor for most people.

Mine was made in Kentucky, which I didn’t know or even consider at purchase. It would have been a nice perk had it been made in Canada like the RAV4 is in Cambridge, but I made my choice based on other considerations. Where my next car is manufactured is very unlikely to influence my purchase decision when I decide to replace it.

As much as creative producers and artists might chafe being compared to rubber, glass, steel and assorted nuts and bolts, I believe this is the same thinking that goes into being entertained. I don’t know of anyone (although I’m sure there are many who will say otherwise), when they are ready to be entertained, think “I want to make sure it’s a Canadian show I’m watching.”

Mostly we just want to watch a good show – and if it happens to be Canadian, well that’s a very nice perk.

Another reason I chose cars as an analogy here is that there are multi-millions of dollars of tax credits, grants, incentives and otherwise that go to carmakers and parts makers in Canada – and the five major car manufacturers and major car parts manufacturers, according to a 2017 McMaster University report, employ nearly 100,000 Canadians.

It’s a multi-billion dollar industry and – setting aside any environmental arguments – I feel safe saying most Canadians understand and support the industry as an important one to our economy as a whole.

Now let’s look at a single Canadian industrial titan. Train and plane maker Bombardier. It has 23,000 Canadian employees, reportedly, although this number is hard to pin down as it has a total of about 68,000 employees worldwide and the company doesn’t seem to publicly break out how many are employed in Canada.

That one company alone, according to the National Post, has received $3.7 billion in some sort of government assistance in the past two years.

Now, according to Heritage Canada, the Canadian creative industries employ some 630,000 people. Or 27 times more people than Bombardier does here.

Since 2016, two years ago, again according to Heritage, the federal government has invested $3.2 billion of new money in arts and culture – which includes books and magazines and museums and art galleries and summer fairs and a bunch of other things along with the audiovisual industry.

But, to value it on a per-employee basis, the creative industries should have received far more. To make it equal to the per-employee investment in Bombardier, nearly $100 billion in government funding over the past two years should have been doled out to the Canadian creative industry. (Ed note: Yes, we realize that’s outlandish to say the least, but we’re tryin’ to make a point. Please stick with us!)

ON THE TV AND digital side, the Canada Media Fund was valued at $370 million in 2017 and $215 million of that came from BDU customers – a number which shrinks daily as people cut or trim their traditional pay-television service.

“An ISP tax, however, is never, ever, going to fly.”

To make up for that, groups like the CMPA and ACTRA and the Writer’s Guild and others have proposed to add a tax on Internet Service Provider bills just like cable, satellite and IPTV companies (BDUs) to make up the growing shortfall in contributions from the video subscribers to the likes of Rogers, Bell, Shaw, Vidéotron and others.

An ISP tax, however, is never, ever, going to fly – and the Supreme Court has already said no to it. Of course, the laws are now under review, but no matter how they’re changed, Canadians will revolt if their broadband bills are driven any higher, and the federal government has already warned the panel studying the laws not to make things more expensive for Canadians.

So, why not remove the bill tax altogether?

If the federal government has decided, if we as a nation have decided, that having a TV or video production industry is an important economic driver, as important as cars and planes and trains, then perhaps we should fund it like we fund Bombardier. Right from general revenues. No more 5% added to the TV bill to fund Cancon. No more consideration of an ISP tax.

This would make funding the CMF more of an industrial strategy than a cultural one, too. And besides, the traditional cultural fallback line of “telling Canadian stories” which has been repeated since time immemorial, sounds so lovely and is actually important, makes a huge portion of the Canadian public, even those in this business, roll their eyes and tune out.

As a branding effort, that tagline has failed and needs to be retired in favour of something that reminds Canadians about the serious economic value the creative industries bring to the country.

Now, should Netflix and Amazon and any others selling their wares in Canada be told a certain amount of their inventory on offer must be Canadian and made in Canada? As long as the federal government is telling the likes of Bell Media or Corus or Rogers or CHCH or whomever that they must spend on Cancon and local shows, then yes, absolutely those OTT providers should contribute.

Just like there needs to be local content in manufactured goods made in Canada, often by foreign based companies, in order to access their government or regulatory breaks.

This is an edited version of a short presentation given last week by Cartt.ca editor Greg O’Brien, who was one of four “provocateurs” to speak at a fun and interesting roundtable session about the future of Canadian television production at the Ryerson University Transmedia Zone.