Evidence of meeting #46 for Canadian Heritage in the 41st Parliament, 2nd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was television.
A recording is available from Parliament.
Liberal
Stéphane Dion Liberal Saint-Laurent—Cartierville, QC
I will ask the same question I asked Mr. Savoie. Is it the first time you have formulated this request?
Director of Policy, National Office, Directors Guild of Canada
Yes.
Liberal
Stéphane Dion Liberal Saint-Laurent—Cartierville, QC
Okay, thank you very much.
I hope that is clear for everyone. We are talking about 1%.
Point two, you have an issue with the word “suitable”.
In French, the word is “convienne”.
What happened? Is there a different interpretation of this word?
Can you tell us why you raised this issue? What is not working with the word “suitable” as it is now?
Director of Policy, National Office, Directors Guild of Canada
This is pay-per-view and video-on-demand services. The decision was for broadcasters to license all new Canadian features. By virtue of being an original Canadian feature film, it is automatically meant to be programmed on these pay-per-view and video-on-demand services.
We're finding that is not always the case, and it has to do with differing opinions with regard to what constitutes a suitable.... We're saying the mere fact that it is an eligible Canadian feature film means it should be programmed. We're having difficulty establishing that all of the Canadian films that are eligible to be on these services are, and that the risk here is that Canadians don't have access to them.
Liberal
Stéphane Dion Liberal Saint-Laurent—Cartierville, QC
Thank you very much.
I guess I have time for my last point.
When you say over the top television, you mean Netflix and some others that already exist or are coming.
Director of Policy, National Office, Directors Guild of Canada
There will be others.
Liberal
Stéphane Dion Liberal Saint-Laurent—Cartierville, QC
Yes, and you have a list of proposals on the matter. Once again, is this new? Have you talked to the government or the CRTC about it?
President, National Office, Directors Guild of Canada
We have talked about it. We made this recommendation—as did several others—as part of the “Let's talk TV: a conversation with Canadians“ initiative.
It is important to stress that the format dominates the market but it is not included in the current system that asks private broadcasters to make a minimal contribution to the Canada Media Fund.
Liberal
Stéphane Dion Liberal Saint-Laurent—Cartierville, QC
When you talked about those four points, what were the reactions?
President, National Office, Directors Guild of Canada
Well, the fact that the president of the CRTC came up with the request did not go unnoticed. I think that was very well received and it was thoroughly covered as such in the media. Let's say that the matter has not yet been resolved. We see it as a very important matter, especially given the development of home viewing on these formats.
Liberal
Stéphane Dion Liberal Saint-Laurent—Cartierville, QC
For the moment, you are only asking for these over the top industries to provide information.
President, National Office, Directors Guild of Canada
That is so for the moment and it would really be a lot.
Liberal
Stéphane Dion Liberal Saint-Laurent—Cartierville, QC
If they refuse to do so, it may be because they are afraid that, after giving you that information, you may have specific Canadian content demands which, I assume, would be comparable to those of their Canadian competitors, who are bound by those requirements.
President, National Office, Directors Guild of Canada
We do not want to prejudge the issue, but we wonder why the information would not be made available to Canadians given that the companies are operating in the Canadian market.
Conservative
Rick Dykstra Conservative St. Catharines, ON
Usually my math is pretty good, but when Mr. Dion asked if everyone understood exactly what was described, I put myself in the “no” category.
Perhaps, Mr. Forget or Mr. Southam, you could go at this again to give me your interpretation of what is currently in place and what you think should be there.
Director of Policy, National Office, Directors Guild of Canada
Currently, broadcasters have in the overall requirements with regard to the Canadian programming that they license, the 30% number. Within that 30%, a portion is targeted to programs of national interest, in other words, programs that are high risk. Dramatic series, feature documentaries, feature films are examples.
The 5% is a subset of the 30%. Of the 30% in the overall that they need to spend on Canadian programming, they need to spend 5%, so the other 25% they can spend on Canadian content as they see fit. The 5% is targeted to these high-profile projects.
Our contention is that feature films and feature docs are within the category of 5%, but in fact, when we look at the numbers, there is not much money actually being spent to license them. Our suggestion, not to want to rob Peter to pay Paul, is that broadcasters be encouraged to continue spending money where they are now on dramatic series, for example, and that the obligation within the 30% be increased by at least 1% and that 1% be targeted at feature films, so that we arrive at actual spending on feature film licensing to help.
The theme here is to have a more integrated system where we move away from a silo where feature film exists only in theatrical experience to one where it's integrated both for online services and broadcasts. This is a way of integrating broadcasters into the financing and licensing of features.
I hope that I've answered the question.
Conservative
Rick Dykstra Conservative St. Catharines, ON
Yes, that helps. Sometimes a second or third time is the charm.
One of the pieces that you described is within the 1% of revenue to support Canadian film production. How should that money be divested?
That's one of the things that we dealt with in our study of the music industry. If additional revenue was in place, whether it be from the Ministry of Canadian Heritage or from the federal government, whether it was solely from the ministry, whether there was matching funds with the private sector, and all of the potential combinations of that, there was a concern as to how that money would be distributed and who would be making those decisions.
Perhaps you could elaborate further on that and perhaps we could get Michelle to comment as well. If we are going to extend or enhance the fund, how should that money be distributed and by whom?
Director of Policy, National Office, Directors Guild of Canada
The money we're talking about in the context of PNI is money that broadcasters are already spending to license content, and we're not suggesting any of that change.
We're hoping that using some of those resources, which are broadcaster amounts, they license the right to exhibit the content on their airwaves...be more robust for feature films. By targeting an additional amount to feature film, we would have a healthier sector. There's no additional government money, and so on.
That being said, though, the participation of broadcasters would help the financing of features. Helping to finance features relieves the pressure on other partners, including government, and makes for a more robust system.
Head of Film, Moving Picture Company
Sorry, could I ask you to rephrase the question in the context of feature film visual effects in the service sector?
Conservative
Rick Dykstra Conservative St. Catharines, ON
One of the pieces you talked about was the tax credit, about how it's supportive and how it could potentially be enhanced. I wonder if you could expand on that from a visual effects perspective.
Head of Film, Moving Picture Company
Absolutely.
In my opinion, we need to be careful of not chasing the highest tax credit that exists in the world. That is a losing battle. I think if we are consistently evaluating our tax credit to where there is success in other parts of the globe and making sure we are competitive, we will be in good shape. We have great infrastructure. We have great talent. We have great innovators.
When it comes to tax credits, I am not necessarily advocating for growth. I'm advocating for an evaluation of them and for making sure that we're constantly evaluating ourselves against our competing markets.
Most important is having a constant signal from the government that the industry is supported and valued, and that the tax credits are not at risk.
Conservative
Rick Dykstra Conservative St. Catharines, ON
It's an interesting point.
You talked about the tremendous growth in the industry within Canada, and the jobs that are available now. The reason I relate to it or want to dig into it a little deeper is that you've done that under the model we have currently. If you've had that type of exponential growth over the last 10 years with the system we now have, would it be fair to say that the system is working?
Head of Film, Moving Picture Company
The system is and has been working for B.C. for a long period of time. The system for visual effects in Quebec currently is working.
One of the challenges—and I do not have the solution for this at all—is that we compete globally for this work, and we also compete within Canada for this work. Competing tax credits provincially is a challenge that I don't have the solution to, but it is from a Canadian perspective robbing Peter to pay Paul.
We've been lucky that we've been able to grow in both sectors. That's because we're an international brand. But we're competing with our sister provinces, as other companies are.
