Good afternoon, everybody. Thank you for inviting me. It's a great pleasure to be here.
My name is Richard Stursberg. I am the author, with Stephen Armstrong, of The Tangled Garden: A Canadian Cultural Manifesto for the Digital Age. We were honoured to have our book shortlisted last year for the Donner Prize, which is given for the best book on public policy written by a Canadian. The book deals with many of the issues that are before you with Bill C-10.
I have worked in the broadcasting business for many years. I was the head of English services at the CBC, chairman of the Canadian Television Fund, executive director of Telefilm Canada, president of Shaw Direct, and CEO of the Canadian Cable Television Association. I am now retired and represent nobody but myself.
In the more distant past, I was the assistant deputy minister for culture and broadcasting. In 1990, I was one of the architects of the current Broadcasting Act, so it is a pleasure to have a chance to talk to you today about the new act.
I start from a simple premise. The reason we have a Broadcasting Act, along with the associate regulations of the CRTC, the tax credits and the Canadian Media Fund, is to support Canadian culture. We spend all this money and energy to ensure that Canadians can see themselves and their stories on television. The objectives of the system are cultural, not industrial or economic.
In approaching Bill C-10 today, I believe that the fundamental principles governing future broadcasting policy must be support for Canadian culture and equity of treatment. The latter point requires that the obligations imposed on Canadian broadcasters such as CTV and Global must be borne by foreign broadcasters such as Netflix and Amazon. By the same token, whatever advantages are enjoyed by Canadian broadcasters must be extended to the foreign ones operating in our country.
Today I would like to talk about the four key supports for Canadian television: Canadian ownership, the spending requirement, the system of subsidies and the definition of Canadian content.
First, under the present act, broadcasting companies operating in Canada must be owned and controlled by Canadians. There has been much talk about whether Bill C-10 eliminates this requirement. The legal issue is largely academic, since the requirement was ceded a decade ago. Over the last 10 years, foreign broadcasters like Netflix and Amazon have been offering TV programs to Canadians without any need to be Canadian-owned. There is no chance in the future that they will be forced to become Canadian-owned.
In the interest of equity, you may want to consider putting Canadian and foreign broadcasting on the same footing by amending Bill C-10 to make sure the Canadian ownership requirements are gone. Not to do so would be to disadvantage Canadian broadcasters in their own market.
SecondC-10, Canadian broadcasters have to spend a certain percentage of their gross revenues making and commissioning Canadian TV shows. Bill rightly extends this requirement to the foreign broadcasters and leaves it to the CRTC to determine the appropriate level. If the commission leaves it at 30% for CTV and Global, as it is now, it should be 30% for Netflix. If it is set at 20% for Netflix, it should be the same for Canadian broadcasters. Equity is key. You may want to make sure that the equity principle is clearly incorporated in Bill C-10.
Third, the system of subsidies for the production of Canadian shows is expensive and complicated. It consists of the Canadian Media Fund, federal and provincial tax credits, and Telefilm Canada. Last year, they collectively cost Canadian taxpayers over $1.2 billion. Those subsidies are only available for Canadian shows, defined as those made by Canadian-owned production companies and employing Canadians in key creative positions. If we require foreign broadcasters to spend 20% to 30% of their gross revenues commissioning Canadian shows, they should have access to the subsidy. Again, the principle of equity should prevail.
The subsidy system itself is fiendishly complicated and expensive to administer. The long-standing joke has been that Canadian producers are not experts in making shows but in navigating the system. There has been some talk of collapsing Telefilm Canada and the Canadian Media Fund into one organization to address the problem. That is not the best approach. It would be much better to wind up Telefilm Canada and the Canadian Media Fund and transfer their financial resources to an enhanced tax credit. This would create a system that would be dramatically simpler, more predictable, better attuned to changes in the market and much less expensive to administer. The Tangled Garden estimates that this approach would save $60 million per year in administrative costs.
You might want to consider amending Bill C-10 to make this change.
Fourth, and finally, all of these arrangements hinge on the definition of what constitutes “Canadian content”. For decades, Canadian content has been defined on the basis of a 10-point scale, where points are assigned to the creative talent involved in making the show. The problem is that as long as Canadians are employed, the show could be culturally completely foreign. It could be set in another country, featuring foreign characters and involving a foreign story. This has happened very often in the past. Toronto may be made to stand in for Chicago, while American characters struggle with losing their health insurance.
There has always been great pressure on Canadian producers to disguise the Canadian character of their shows so they can be sold in the States, making them more profitable and easier to finance.