Canada looking to enforce contributions from streaming giants like Netflix

Ample controversy over the required funding of organizations that create Canadian content
By Luana Ross, Senior Columnist

Michael Geist—a professor at the University of Ottawa—highlights that TV adaptation of famous Canadian author Margaret Atwood’s ‘The Handmaid’s Tale’ did not make the cut for funding despite its cultural significance.

France, Germany, and Canada have been embroiled in the same battle with Netflix: should rules be put in place to ensure specific cultural content is produced? Canada has put a fast-approaching deadline on the Canadian Radio-television and Telecommunications Commission (CRTC) to create guidelines for the mandatory contributions from streaming services. At this time, these streamers do not follow the Canadian content (CanCon) rules; the rules that mandate that traditional broadcasters must spend 30 percent of their revenue on Canadian content (and TV service providers are required to invest five percent in CanCon funding).

It was previously estimated that such legislation could bring in an estimated extra $800 million by 2023 to be used to fund Canadian content and creators. (For reference, in 2019 the CRTC got $2.9 billion from those required to donate to CanCon) For some, the funding is seen as the government’s commitment to sharing the stories of Francophone, Anglophone, Indigenous, disabled, racialized, and LGBTQ creators. Those who support the CRTC often argue that broadcasters who are benefitting from Canada should also contribute to the country—but critics cite that, for example, Netflix’s current contributions are enough to deem the relationship between the country and business symbiotic. Back in 2017, Netflix pledged to contribute 500-million dollars to producing and supporting CanCon, and mentioned that the investment over time would be well over that amount. The company also stated that they “do not subscribe to the theory that a ‘regulated investment’ is more valuable than a consumer and market-driven one.”

It is mandatory for companies like Bell, Rogers, and Telus to invest a specific amount into the Canadian Media Fund; the organization is viewed by some as an essential service in preserving our country’s culture. Those that support the CRTC’s claim to funding (including the CRTC) state that it would “level the playing field” for the traditional broadcasters in competition that are currently facing hard times. In response to this though, some argue that this mindset shields Canadian legacy media at the expense of new forms of successful media like Netflix. Critics against the CRTC’s claim bring forth issue with what they state is the “government regulating a competitive sector of the economy.”

Harper once warned that a Liberal government would lead to streaming service taxes—and originally Trudeau dismissed the notion, but he eventually changed his mind and joined the others calling for organizations like Netflix and Amazon to contribute as other Canadian media giants are required to. Netflix has argued against the laws with great fervor—so much so that the drama in the 2014 court hearings was well noted in the headlines. Their laundry list of complaints includes the criticism that as the fund “was designed to be domestic closed-circle of support,” the foreign body will not be able to access or benefit from that allocated money. While the CRTC’s website states that they “serve as the spark that ignites the sharing of a truly Canadian culture,” Netflix has also brought up their issue with the CRTC’s classification of Canadian content. One example Netflix offered was the show Travelers—the show was co-produced by Netflix at one point and was deemed Canadian content—but once they headed the project the show lost its status as CanCon. Netflix is not the only one concerned about CanCon rules that are called rigid by some. In an interview with the CBC, Michael Geist—a professor at the University of Ottawa and the Canada Research Chair for the internet and e-commerce—highlights that TV adaptation of famous Canadian author Margaret Atwood’s The Handmaid’s Tale did not make the cut for funding despite its cultural significance.

Professor Michael Geist puts a spotlight on the additional benefits domestic broadcasters reap over foreign ones—such as access to funds for cultural content and copyright ownership related to the right to distribute. Along with many of the others who are critical of the proposed rules, Geist worries that these regulations will bring price hikes for consumers. Others are concerned that Canadian customers will face fewer choices in streaming services; another common concern fixates on the significant power the CRTC will be rewarded through the proposed bill. On his blog, Geist writes that the legislation “creates considerable marketplace uncertainty that could lead to reduced spending on Canadian film and television production and delayed entry into Canada of new services.”

The companies that would be impacted have proposed alternatives; some highlight that the success of Canada’s film industry is bountiful as is, so Netflix suggested that Canada instead make it compulsory that streaming organizations fund Canadian programming the streamers deem to be relevant to the needs and wants of Canadians. Others point out that while it true that the film industry is booming, they claim it is largely due to American media being filmed here. Much of this content will not credit Canadians or be sold as or viewed as Canadian content as it does little to acknowledge our culture even though it is directed and performed by Canadians. On the other side however, critics point out that much of the content that is produced in Canada and funded by Netflix and similar organizations is distinctly Canadian—but does not meet the standards of CanCon. Clearly, many aspects of the proposed regulations are very contentious; tune in next week to read Other Press interviews with Douglas professors on this issue.