Thank you, Mr. Chair.
And thanks also to the members of the committee for this welcome opportunity.
I'd like to tell you that when it comes to audiovisual production in Canada, culture works. The sector is a major source of employment. It creates 117,000 jobs across the country, more work than is generated by the Canadian steel industry. Last year the industry generated just over $6.8 billion for Canada's GDP.
The sector is a Canadian success story. It's an example of what happens when effective public policy, entrepreneurial energy, and talent and skill are mixed together.
We agree fully with the heritage minister when he says that to invest in arts and culture and to support the creative economy is to support the economy as a whole. Our members are entrepreneurs. They are key creative contributors in their industry.
And when the industry minister says that content drives demand for digital technologies and bandwidth, attracting continued investment and talent, he's right, and he underscores one of the reasons it makes sense to create a financial environment in which content production can flourish.
Our recommendations today speak to the creation of this environment. We have the infrastructure. We have a skilled workforce. We have talented creators. The industry is ready to move on to another level, and we believe these recommendations will help get it there.
Canada's refundable tax credit programs for film and television production have helped make Canada a globally competitive venue for production.
The commitment to this tax credit system has given Canada a positive reputational edge to attract foreign production as well as supporting domestic creation. That Canadian edge could be consolidated and enhanced with changes to extend tax credits to qualifying non-labour expenditures, as Quebec and Ontario do in their provincial tax credits. We encourage you to consider that possibility.
We also think you might want to extend the current tax credit arrangements to digital media, something that plainly fits within the goals of Canada's digital strategy. The Canada Media Fund now makes its financial support conditional on there being a digital media component associated with television content. The extension of the existing tax credit arrangements to digital production would complement that new approach.
Minister Moore has said that support for culture should not come strictly from taxpayers, and that finding a way to draw in the private sector should be an important part of government policies in this area. We agree with that. Public policy has gone a long way to build a competitive audiovisual sector in Canada, but it needs a boost from private sector investment to take on the scale and the depth that a globally competitive industry needs.
Film and television, though it is lucrative when you get a hit, is a high-risk business with large upfront expenditures. Oil and gas is another hit-based industry that requires large upfront capital outlays on a number of projects, often unsuccessful ones. In order to get investors and entrepreneurs across the risk threshold associated with this and to invest in this industry, the government used the flow-through share model.
Attracting risk capital for film and television production is crucial for the development of globally competitive content and sustainable corporate growth. With encouraged private investment, production companies can acquire the scale necessary to finance development of a slate of projects, mitigating risk, increasing the chances of finding hits. There can be greater retention than is now the case of intellectual property rights for revenue generation on the finished product.
Minister Moore is right that increased private investment in this already significant sector is what is needed. The flow-through share model is a way to increase private sector investment in audiovisual jobs in Canada. It provides income tax relief and opportunities for investors and entrepreneurs, and it consolidates advantages for an industry that public policy has done so much to build.
Lastly, Canada's public broadcaster is a vital part of the cultural fabric of this country. It provides the greatest opportunity for Canadians to see their own stories on their screens. It's an island of Canadian culture in a televised sea of American programing, which is the mainstay of private broadcasters.
While we recognize that this is a time of restraint, that increases to the government's contribution to the CBC are very unlikely, we caution seriously against cutting this vital cultural institution.
Mr. Chairman, members of the committee, thank you very much.