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The Battle for Canadian Content (2018-2020)

June 12, 2018

“If you profit, you contribute—there is no free ride” Heritage Minister Melanie Joly, June 3 2018

 

The battle for Canadian cultural sovereignty is on. And no, it’s not a battle against Donald Trump. It’s a debate among Canadians.

 

Justin Trudeau’s Liberals have come down firmly on the side of Canadian content creation. After ragging the puck for two years, the cabinet ministers responsible for broadcasting and telecommunications announced their elegant solution to the apparent conflict between Canadian content and opponents of regulation.

 

That solution is to spread out the burden of cable industry’s contributions to Canadian content and local news  ---currently a $400 million annual tithe on revenue---  to all players in the media universe. That means domestic Wireless and Internet providers as well as foreign video streamers like Netflix.

 

To the extent that the cable companies have been able to price Canadian content levies into their monthly bills, in the future we will see cable TV customers pay less, while others begin paying a much smaller amount. As CRTC Chair Ian Scott suggested, that would mean a fifty cent monthly increase on the average broadband bill of $47.

 

The Liberals are at pains to reassure voters this rejig of Canadian media will be cost neutral.

 

“For me, a critical issue is making sure that Canadians do not pay more,” Industry Minister Navdeep Bains said on June 5th. “This is really around quality, coverage and price, and price is something that Canadians have expressed as a concern.”

 

A series of government policy moves intended to increase competition among wireless providers followed, as did a ribbon-cutting on an industry initiative offering cheap broadband access for low-income Canadians.  It may have taken a while, but it seems the Liberals finally have their ducks in a row on the media and telecom files.

 

Bains’ Internet pricing offensive is intended to neutralize the political opposition to Joly’s Canadian content policy. On the policy level, the government’s critics are boxed in.

 

That’s because the $400 million in financial support for Canadian content and local news can only come from industry levies or more government spending. If Joly’s critics are against both, they stand naked in their indifference or hostility to Canadian culture.

 

Still, winning the policy debate and winning the politics are two different things. There is a federal election in between now and when the legislative implementation of the Liberal program is expected in 2020.

 

Don’t expect its critics to fight fair. There will be opportunistic attacks on “Netflix taxes” and a religious reverence for the Internet which will be expressed as “net neutrality”.

 

Unfortunately, neglected in all of the fury is the fate of local news.

 

A $150 million tranche of the $400 million cable TV contributions keep independent local television stations afloat.  As Google and Facebook continue to suck advertising revenues out of the Canadian television market, the financial precarity of those stations may worsen.

 

Even the network local stations owned by Bell, Corus, Rogers and Québecor are in trouble. Most of those stations lose money and are cross subsidized by their mothership enterprises.

 

Newspaper journalism is in the worst position of all. The Liberals have done nothing more to stem the steep decline in print journalism in Canada’s daily newsrooms than a token $10 million from the Canadian Periodical Fund.  In fact renewed federal support for the CBC has, with unintended consequences, put competitive pressure on news websites.

 

While the Trudeau government’s new boldness on the Canadian culture file may or may not end up as job well done (there is the matter of the 2019 federal election), its unfinished business is to save Canadian journalism.

 

 

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