By Ahmad Hathout
The CRTC has made more flexible what qualifies as “Canadian” in the audio-visual space, as it increases the number of positions to qualify in live action and animated productions and shifts the rubric to a percentage-based evaluation system that moves with how much of the copyright Canadians own.
The commission confirmed Tuesday a preliminary view from almost exactly a year ago that the previous 10-point system should be expanded to a 15-point system, with the addition of key creative positions including showrunner; heads of departments in costume design, hair, and make-up; and visual effects and special effects director.
To qualify as Canadian, productions will need to meet a percentage threshold of 60 per cent, as opposed to the current numerical value system that requires a minimum of six out of 10 points for Canadian certification. The CRTC’s reasoning for the percentage-based system is to assist productions, especially smaller ones, that don’t use some of the key roles that would provide the points needed to meet the minimum requirement.
Under this new system — on which the commission will launch a notice of consultation at some point — a live action production must have a Canadian in the position of director or screenwriter, and either in the first lead performer (or first voice) or a second lead performer (or second voice) position.
For animated productions, either the director or scriptwriter and storyboard supervisor, and either the first voice (or first lead performer) or the second voice (or second lead performer), and the key animation and camera operator must be Canadian.
If staffed by Canadians, each of the positions of director, scriptwriter and storyboard supervisor will be awarded two points, instead of one, while the other positions mentioned will be assigned the current one point.
For animation, the position of first voice (or first lead performer) and second voice (or second lead performer) will each be given one point, instead of the single point if both positions were staffed by Canadians under the current system.
Those rules, part of the implementation of the Online Streaming Act, change somewhat with how much of the production’s copyright is owned by Canadians, a minimum amount of which is 20 per cent.
If Canadians own 100 per cent of the copyright, then the above breakdown governs.
That’s largely the same if Canadians own between 50 and 100 per cent of the copyright. In that case, a minimum of 50 per cent of persons occupying producer, co-producer, line producer and production manager and producer-related roles must be Canadian, and the production must be made by a Canadian company that has no less than equal measure of decision-making responsibility with partners on all creative elements of the production.
That’s also what the CRTC will require if Canadians own between 20 and 50 per cent of productions, but those productions will also require that Canadians make up at least 80 per cent on the 15-point scale. For live action, the director, screenwriter and first lead performer/first voice or second lead performer/second voice must be Canadian. For animated productions, the director, scriptwriter and storyboard supervisor, key animation and (virtual) camera operator and first voice/first lead performer or second voice/second lead performer must be Canadian.
“The copyright provisions as introduced in this regulatory policy are meant to incentivize co-productions with non-Canadian partners and provide protections for Canadian creative and financial control that are not found in the current co-venture model,” the CRTC said in its decision.
Also important is the CRTC’s acknowledgement that certain productions require key positions be shared with non-Canadians as a driver for co-productions that foreign streamers have long pointed to as their contribution to the broadcasting system.
As such, where multiple people fill each of the key creative positions of director, screenwriter, and scriptwriter and storyboard supervisor, points will be awarded where at least 80 per cent are made up of Canadians, as opposed to the existing 100 per cent.
The CRTC is also relaxing rules on the hiring of certain key performers in the animation space. The regulator will no longer require some key roles be filled by someone residing in the country, but can now be Canadians living abroad.
The regulator is also giving bonus points to apply toward the 15-point scale. Those bonus points include one point for using identifiable Canadian characters and settings in the productions; a point for using Canadian written works as source material; and a point if more than 50 per cent of the pre-recorded or pre-existing musical selections featured in the production are Canadian.
“The CRTC’s decision on the definition of Canadian Content is balanced, and adds some flexibility, while recognizing the importance of Canadian ownership of IP,” said Kevin Desjardins, president of the Canadian Association of Broadcasters, which represents major private broadcasters.
But the president and CEO of the Association Quebecoise de la Production Mediatique (AQPM) said the trade group, which represents 150 production companies, is concerned about sharing the IP with foreign streamers.
“This openness to sharing intellectual property with foreign companies is a concern for the AQPM, despite the requirement that the program be produced by a Canadian producer,” Helene Messier said in a statement. “A Canadian producer who holds only a minority stake in the rights to a program will find it difficult to exercise as much decision-making responsibility as the other partners with respect to the creative elements, as the CRTC desires.
“To ensure a fair sharing of the commercial exploitation of the work and good-faith negotiations, the Commission should regulate commercial negotiations between producers and broadcasters in a way that balances the power dynamic,” she added. “The CRTC seems to underestimate the impact that intellectual property ownership can have on a production company’s ability to benefit from the long-term economic returns of exploiting a work.”
The CRTC is also maintaining the requirement that a minimum of 75 per cent of production service costs be paid out to Canadians for certification, and maintained that key creative roles must be operated by real humans and not artificial intelligence.
“We are glad to finally see Canadian equity required in streamer partnerships and higher thresholds for Canadian key creatives,” said Eleanor Noble, national president of the Alliance of Canadian Cinema, Television and Radio Artists (ACTRA), a major performing arts union. “And making sure those key creative jobs go to real human beings – not AI – was a must which ACTRA demanded through our advocacy efforts.”
But Noble said the union is still taking a wait-and-see approach on what this all really means.
“We still don’t know if Canadian lead performers will get the weight they deserve, or if streamers and broadcasters can bend the rules without giving Canadians real creative leadership and key roles,” Noble added. “The next ruling on spending obligations is where we shall see if this framework will create actual opportunities for Canadian performers. We need all of these definitions to have strong teeth, and not allow billionaire-owned streamers and broadcasters to blur the lines.”
The AQPM’s Messier added: “It is difficult to predict the effects of this Council decision, as it represents only the first element of a larger process. The AQPM hopes that the upcoming decision will include additional spending obligations for independent production, particularly French-language productions, so that our ecosystem is built on strong and resilient businesses. The association also hopes that the rules surrounding the granting of the tax credit for domestic productions and funding from the Canada Media Fund will continue to benefit productions that meet the highest qualification standards by prioritizing 100% Canadian ownership of rights and the maximum use of Canadians in key creative positions.”
The regulator is also reducing some of the reporting burdens on broadcasters who had complained during this proceeding and separately in a more recent letter to the commission about what they said was duplicative and unnecessary reporting requirements.
The CRTC currently requires vertically integrated broadcasters to disclose annual aggregate financial returns and revenues, as well as subscriber totals for each of their discretionary services, which the commission now acknowledges results in duplicated activities “as the data is also collected as part of the annual returns in a disaggregated form.”
The CRTC will now eliminate the requirement for vertically integrated broadcasters to file and disclose annual aggregate financial returns.
The regulator also said “it can be difficult to track information for older, repeat programming where such data was not originally identified. Furthermore, reporting on the same content for multiple years (i.e., repeat programming) results in data duplication.”
The production reports will now only need to relay “broadcasters’ data relating to original first-run Canadian programming that they license or commission, excluding news and sports programming,” the CRTC said. “The Commission acknowledges that this will reduce the information publicly available on spending directed to older, repeat programming at the level of granularity the production report currently provides.”
To level the playing field, the CRTC is also requiring online streamers, including foreign players, that make $25 million or more in revenue to submit annual production reports “to provide a more fulsome picture of the diversity of people represented in that system” and to disclose their annual Canadian programming expenditures (CPE), other contributions, and their total annual Canadian gross broadcasting revenues minus excluded revenues.
“The Commission acknowledges the concerns raised by interveners that some information, and in particular financial data, is competitively sensitive, and that its disclosure could place the competitive position of smaller broadcasters – especially small independent Canadian undertakings – at risk,” the CRTC said in its reasoning. “The Commission also notes that large traditional players in the Canadian broadcasting system have for many years been, and still are, required to publish financial data at the ownership group level, and in some cases, for their individual undertakings.
“Certain online undertakings have expressed concerns that data disclosure could affect their level of competitiveness in the market,” the CRTC added. “In the Commission’s view, it is unlikely that any harm resulting from disclosure of that data would outweigh the public interest, given the relatively large size of the online undertakings whose information is intended to be made public and their associated large impact on the Canadian broadcasting system.”
The CAB’s Desjardins said the trade group is “encouraged” by the CRTC’s move to reduce its members’ administrative burden and levelling the reporting requirement with foreign streamers.
Screenshot of the CRTC’s vice president of broadcasting
