By Howard Law
THE NEW SEASON of Canadian culture wars is now available from the House of Commons’ second reading of Bill C-11 the Online Streaming Act, the federal Liberals’ digital reboot and seventh iteration of the Broadcasting Act since 1932.
After minor revisions by Heritage Minister Pablo Rodriguez, the Bill C-11 debate promises to be a re-run of last year’s Bill C-10 which drew flak from friends and foes alike and was successfully filibustered by the Conservatives prior to the dissolution of Parliament for the fall election.
Split into three posts, I will cover what Rodriguez says C-11 is about, what its opponents don’t like, and if it’s passed, as seems likely given declared support from the Bloc Québecois and NDP, whether it will do what it’s supposed to do.
Rodriguez’ political messaging on C-11 is a “fair share” appeal: the mostly US-based streaming broadcasters like Netflix will have to join our domestic media companies in contributing to Canadian broadcasting content.
In addition to Netflix, media sharing platforms like YouTube will have the same obligation because they host commercial streaming channels that are either flanker platforms for traditional TV and music programmers or else professional “digital-first” creators and companies.
C-11 means these streaming and hosting platforms will shoulder their fair share of hosting CanCon either by creating original programming or writing a cheque to film-financing programs like the Canada Media Fund (CMF).
After the bill is passed, the CRTC will be delegated the task of parsing out the fine points of the contribution scheme. The Commission will also draw the boundary between professional and unregulated broadcasters on hosting platforms.
The Minister’s fair-share appeal rests upon the bedrock principle of the 1968 Broadcasting Act, refurbished by the Conservative government in 1991: that a nation such as Canada (and the Quebec and Indigenous nations within) can’t remain cohesive without the glue of cultural traditions. Commercial media is the biggest platform for celebrating and innovating those traditions at $3 billion in annual CanCon spending.
Cultural nationalism in popular media draws intense loyalty in sovereign nations big and small. It’s been described by the federally-appointed Broadcasting and Telecommunications Legislative Review (BTLR) Panel in its 2020 report as Canadians seeing and hearing their own stories, expressing their values and sharing their experiences in the open seas of global content. Not that the value of national culture needs to be validated by similar norms in other nations, but a 2005 UNESCO Convention recognizes the sovereign right of states to maintain, adopt and implement policies to protect and promote the diversity of cultural expression.
Yet Canadians’ passion for that cultural community exists on a spectrum, running in the other direction to indifference. Political support for regulatory aid to CanCon always seems up for grabs.
The economics of delivering Canadian Content on commercial platforms are built on a system of government funding and industry regulations that subsidize programming to satisfy domestic rather than international audiences.
Alas the Internet and its Big Tech companies have disrupted those economics three times over.
The main funding tools for Canadian content are the CRTC levy on cable companies – 5% of revenues, the majority going to the CMF and other film financers – and requiring major broadcasters like Bell Media, Rogers and Québecor to spend at least 30% of their revenue on Canadian news, sports and entertainment programming, regardless of profitability.
Both funding mechanisms are obviously based on a percentage of revenue. And unregulated Internet broadcasting is bleeding those revenues.
The flight of cord-cutting and cord-nevering audiences from cable to streaming giants like Netflix over the last decade has shrunk contributions to CanCon film production funds.
Major TV broadcasters have lost significant advertising revenue to market disruptors Facebook and Google. The biggest hit has been on what the CRTC calls “conventional TV,” mostly local news, which has averaged 10% losses every year since 2012.
That’s not all.
Internet TV technology also disrupts CanCon economics by making it easy for American content sellers – HBO, Disney+, CBS Paramount and NBC Peacock are prime examples – to sell directly to Canadian viewers and scale back on wholesaling their big shows to Canadian networks who retail them at a profit to Canadian subscribers. Those re-seller profits have always cross-subsidized money-losing CanCon and local newscasts whose revenue potential is limited to a national audience that is one-tenth the size of the US market dominated by American media companies.
The goal of C-11 is to replenish the shrinking funding pool for CanCon, whether it’s films or local news, by making the US streamers bear their “fair share” of the financial burden alongside Canadian cable providers and broadcasters. A figure of $800 million was ballparked by the previous Minister Steven Guilbeault.
Regardless of the final dollar amount, we are likely to see Netflix and the other American streamers contributing a mix of original programming and financial support for Canadian film producers through the CMF, perhaps with local news getting some of that cash as recommended by the BTLR report.
Rodriguez’s bill is evolutionary, not revolutionary. He is trying to update broadcasting regulations that are designed to meet long standing cultural goals supported by all parties for decades.
Opponents of the bill say it’s a bad idea. More on that in the next post.
This is the first in a series of three commentaries from Howard Law on Bill C-11.
Law was the director of Unifor’s local media unions from 2013 to 2021. He now blogs at mediapolicy.ca.
