Heritage Minister Mélanie Joly delivered her ‘Creative Canada’ speech in Ottawa at the Economic Club of Canada on September 28, 2017 where she outlined “a vision for Canada’s cultural and creative industries in a digital world.” A useful “10 key takeaway” points can be found here. The speech included several noteworthy statements:
- “[Canadians] pay some of the highest [Internet access] rates in the world. Our government won’t increase the cost of these services to Canadians by imposing a new tax [on Netflix]. We’ve lowered taxes for the middle class, and we will continue to do that.”
- In view of the serious concerns among writers, producers and directors “about whether there will be a domestic market for their work, especially in the face of declining private-sector cable and satellite subscription revenues that contribute to the Canada Media Fund … starting in 2018, the Government will increase the federal contribution to maintain the level of funding in the Canada Media Fund to counter these declines.”
- To assist young creatives and content producers the Government will use a $300-million investment in cultural infrastructure to fund new “creative hubs” where “creators can build their entrepreneurial skills, create, collaborate and innovate.”
- “we will reform the Copyright Board to ensure that we support cultural content, pay our artists faster and reduce costs for all parties.”
Netflix Canada Consent Agreement
The above announcements will likely be eclipsed by the “consent agreement” with Netflix, under which the Minister announced a “first of these agreements on behalf of the Government of Canada and Netflix.” Netflix will create Netflix Canada – a permanent film and television production presence in Canada – and will invest a minimum of $500 million in original productions in Canada (in French and English) over the next five years. Netflix will work to promote Canadian films and programs on its platform so that they are discovered by Canadian audiences and millions of viewers around the world. In return, the Federal Government of Canada will not impose new taxes on digital streaming services or Internet Service Providers (ISPs).
The Federal Government will look to cement similar consent agreements with large Internet-based content producers such as Amazon and Youtube, and will seek to convince Facebook and Google to assist the news industry.
The new strategy to fund the Canada Media Fund is necessary as it currently depends on half of its funding from the steadily-eroding base of cable and satellite distributors (see Rogers and Bell) due to cord cutting. As more Canadians continue to cut the cord the Federal Government will increase its contribution to make up for the shortfall.[1]
Daniel Nashid
Barrister & Solicitor
416.892.2509
[email protected]
[1] The Canadian Media Fund, which has been facing a steep budget as Canadians cut the cord, is set to receive a cash injection that will stabilize its operations. Currently, the government contributes around $130-million to the CMF, which supports Canadian television and digital media producers. In 2018, Ottawa will cover the public-private partnership’s revenue shortfall in addition to its annual contribution.