VANCOUVER – Government support of Canada’s film and television industry is expensive and fails to provide a substantial benefit to the country, according to a new study from public policy think tank The Fraser Institute.
The study, The Entertainment Industries, Government Policies and Canada's National Identity, examines how the federal government uses regulations and funding to support the production of Canadian films, television, music, books and periodicals and the distribution of entertainment. It concludes that government policies designed to support the country’s entertainment industry are, in fact, both “costly and inefficient”.
Taking issue with Canadian content regulations in broadcasting and restrictions on foreign ownership, the study’s author, Steven Globerman, said that foreign ownership is limited because “policymakers assume that Canadian-owned entertainment businesses are more willing to acquire and distribute Canadian programming, despite financial risks, and are better able to identify talented Canadians and popular Canadian programming”.
“But there’s no reason to believe that Canadian-owned entertainment businesses are less profit-oriented than foreign owners”, he said in the report’s news release. “And if Canadian businesses have an advantage in finding Canadian talent, they shouldn’t need protection from foreign competition.”
Globerman also questioned the practice of extending federal and provincial government grants and tax credits to the entertainment industry, noting that the federal government spent more than $1.6 billion on entertainment industry grants and subsidies in 2012-2013 (albeit a large portion went to the CBC).
“These grants are deemed appropriate, in part, to promote Canadian identity, but Canadian identity is influenced by numerous factors, and popular entertainment is far from the most influential factor,” he continued.
Globerman added that the Canadian arts, entertainment and recreation industries combined for only about 1% of the GDP produced by all service industries in 2012, so “it’s a great exaggeration to say that the entertainment industry makes a major contribution to Canada’s economy”.
The Fraser Institute is an independent Canadian public policy research and educational organization with offices in Vancouver, Calgary, Toronto, and Montreal and ties to a global network of 86 think-tanks. Its mission is to measure, study, and communicate the impact of competitive markets and government intervention on the welfare of individuals.
