Timid legislation to get Canadian stories on streaming services, but no 'Netflix tax'

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In January, a special advisory group headed by former media executive Janet Yale gave the Trudeau government a farsighted report on Canadian broadcasting in the internet age. 

The group recommended the government should: give the CBC a new mandate, tax online streaming services such as Netflix, and replace the Canadian Radio-television and Telecommunications Commission (CRTC) with a new body designed for the current media environment. 

Most important, the Yale report recommended the government should empower that new entity to regulate online streaming services -- internet broadcasters -- just as the CRTC currently regulates cable companies and conventional broadcasters.

The prime minister and Heritage Minister Stephen Guilbeault promised to quickly bring in legislation to give effect to the report's key proposals. That did not happen, however. The government took its sweet time to act, nine months in fact.

A watered-down response

The Trudeau government chose U.S. election day, November 3, to introduce a much watered-down legislative version of the Yale report, in the form of Bill C-10. The government says this new legislation will support a "stronger, more inclusive, and more competitive broadcasting system." 

However, two of the advisory group's three big recommendations are missing from C-10. There is no new mandate for the CBC, and the streaming services are still not taxed, the way all other services in this country, from haircuts to lawyers' consultations to cable services, are.

Bill C-10's major initiative is to give more scope and power to the CRTC to regulate a still relatively new breed of broadcaster, the kind that uses the internet, not the traditional airwaves. (The bill does not, however, go as far as the Yale report and replace the CRTC with a new body.)

More than 20 years ago, when Netflix, Amazon, YouTube, et. al. did not exist, the CRTC decided not to treat what happened online as a form of broadcasting. 

The commission's view, in 1999, was that the internet was a forum for individual expression and communication, and open to everyone. That made it different from the world of broadcasting, where radio and television stations and networks use limited airspace to engage in one-way communication, and, historically, have made big profits by selling advertising. 

In exchange for the privilege of using the finite space available on the public airwaves, the Canadian government has had expectations of the broadcasters  to feature a minimum of Canadian content and to provide local news, to cite just two examples. From its inception, the CRTC's job has been to assure that the broadcasters lived up to those expectations.

The CRTC reasoned in 1999 that since the space on the internet is not limited and finite there is no need to regulate it.

The internet has changed dramatically since 1999. At least some of what goes on there today is, in fact, a form of broadcasting. 

Netflix, Amazon and other similar platforms provide television programming for a fee. They are, in essence, pay-tv services; they sell entertainment and cultural products to subscribers. 

Canadian content requirements for internet broadcasters

For Canada, the danger of this novel form of broadcasting is that, thus far, it has escaped the framework of rules and financial obligations that have assured there is Canadian content on the airwaves. 

Long ago, policy-makers recognized that without public financial support and government regulation Canada would be swamped by U.S. cultural product. If that were to happen, it would mean Canadians would lose the capacity to tell each other their own stories, sing each other their own songs, and celebrate their own history and traditions. 

To make sure we continued to have capacity to communicate with each other -- a prerequisite, in many respects, for being a sovereign country -- the CRTC has obliged broadcasters and cable operators to invest in Canadian productions and devote a certain amount of airtime to Canadian programming. 

The commission has even specified that what is known as prime time, the peak viewing or listening hours, must include a quota of Canadian programming. The CRTC has also established requirements for local programming, especially news and information. 

Bill C-10 would empower the CRTC to now bring the online world under its wing. 

In the government's words, the bill would give the Commission the power to oblige streaming services to "make financial contributions to Canadian content, impose Canadian content requirements on those platforms, and mandate the discoverability of Canadian content against other content."

That last point, discoverability, is key. In the context of the internet, it is the equivalent to obliging broadcasters to put a certain amount of Canadian content in prime time. 

There is no such thing as prime time -- or any particular time -- on online platforms, which viewers can choose to access whenever they want. And so, to make sure those viewers are, at least, aware of the Canadian films and TV series the streaming services would offer, the government wants the services to, in essence, promote Canadian content to Canadian audiences. 

Disappointment and contempt for a 'walled-in garden'

When the Yale report came out last January, we got some fairly over-the-top reaction from hardcore market economy advocates and Conservative politicians about "Orwellian media control." 

The government quickly pointed out that imposing licensing requirements on news organizations or regulating news was not on the agenda. The Yale report had also made that point, but its ideologically motivated critics chose to ignore it.

So far, reaction to Bill C-10 has been more muted. Perhaps that is because C-10 is far less ambitious than the Yale report. 

On the other side of this ongoing debate, the public interest lobby group Friends of Canadian Broadcasting, which liked the Yale report, has expressed bitter disappointment with C-10. The group is particularly critical of the government's failure to enact the Yale report's proposals on taxation. 

"It is clear that the Liberals have capitulated to these [internet] platforms and their lobbyists," FCB executive director Daniel Bernhard said. "These companies can continue to operate in Canada and make billions here tax free, and contribute precious little to Canadian culture and society."

Bernhard also noted C-10's failure to follow through on the Liberals' election campaign promise to provide resources to buttress local services on the CBC. 

When current CBC president Catherine Tait took on the job, she made a point of speaking of the need to expand and reinforce local news and information on the public broadcaster. 

In many parts of Canada, especially in more remote regions, CBC has always been the principal source of local news and information. These days, however, as private enterprise news services cut back and close down, that is becoming true even in larger centres, which makes the role of the public broadcaster in local programming more important than ever.

As for C-10's plan to regulate the online broadcasting universe, Daniel Bernhard points out that the CRTC has always had that power; it just chose not to use it. He sees this new legislation merely as a form of encouragement to the CRTC to take a second look at the internet, more than two decades after its 1999 hands-off decision. 

Bernhard points out that C-10 is entirely non-specific as to what the government expects the CRTC to do, tangibly. We'll have to wait until the bill becomes law, he explains. We will then see what course the CRTC chooses to follow. 

One group that did take exception to C-10, and quickly, is another public interest lobby: OpenMedia, which says it "works to keep the internet open, affordable, and surveillance-free."

Shortly after Minister Guilbeault tabled C-10, OpenMedia's executive director Laura Tribe issued a news release in which she argued the minister was creating a false sense of panic about the future of Canadian content, while failing to grasp the nature of online streaming.

"By treating online content like a limited resource, Guilbeault fundamentally misunderstands the very nature of what makes streaming platforms so popular in the first place -- unlimited choice and customized content," she said.

Instead of creating a "walled-in garden" on Canada's section of the internet, Tribe suggested the government should "help our creators and broadcasters compete on the global playing field the internet supports."

What Tribe does not seem to understand is that culture is not the same as shoes or aluminum ingots. It is not simply a product for the globalized economy. 

While some cultural product transcends borders, much of it is only meaningful and important to people who share a discrete cultural and political space. In turn, such culture helps shape a shared sense of national identity.

If the Canadian government were to follow Tribe's advice, it would only support films and television series that might be made in Canada, but that were designed in such a way as to disguise their distinct, national origins. 

We already have that sort of thing in what are known as industrial productions, such as the currently popular Netflix series The Queen's Gambit, in which Toronto streets and buildings stand in for those of Lexington, Kentucky. Such productions are mainly attracted by the cheaper costs of filming in Canada. They are otherwise uninterested in this country or its stories. 

If that is what Canadian content were to become, why would any taxpayer want to pay for it?

Karl Nerenberg has been a journalist and filmmaker for more than 25 years. He is rabble's politics reporter.

Image: freestocks/Unsplash

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