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Netflix, Amazon, Hulu and others have helped homegrown shows such as Kim’s Convenience, Schitt’s Creek and Letterkenny break through with audiences and acclaim around the world. However, their success has also caused problems for Canada's traditional media companies.

Wolfgang Rattay/Reuters

It’s an embarrassment of riches. Since the pioneering streaming service Netflix kicked off its international expansion in the fall of 2010 by launching in Canada, TV and movie viewers in this country have enjoyed an ever-increasing groaning board of delights. Other foreign streaming services such as Amazon Prime and CBS All Access joined the party, along with the Canadian-based offerings Crave and CBC Gem, wooing viewers with thousands of hours of on-demand content – from delightful short-form videos to slick, epic series boasting production budgets in excess of $100-million.

Canadian creators are reaping the rewards, too, as Netflix, Amazon, Hulu and others have helped homegrown shows such as Kim’s Convenience, Schitt’s Creek and Letterkenny break through with audiences and acclaim around the world.

But that success masks a domestic system under intense stress. Revenues are falling as Canadian viewers pivot from traditional TV to foreign-owned services delivered over the internet. With a federal election less than two weeks away, industry experts and others are warning of a Canadian media ecosystem – which produces everything from entertainment programming to local news – in danger of buckling without new and imaginative government policy. And some are blaming the Liberals for wasting precious time during their four years in office.

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“They have been completely asleep when it comes to the greatest series of challenges to our culture that we’ve had for as long as I can remember,” claimed Richard Stursberg, a former broadcasting executive and the author of The Tangled Garden: A Canadian Cultural Manifesto for the Digital Age, published in April. Television and the news industry are “in a giant crisis. And the crisis is in large measure because [the Liberals] have allowed foreigners to come into the country and enjoy advantages that no Canadian company has in our own market.”

Richard Stursberg, a former senior broadcast official in Canada, says the Liberals bear a fair share of the blame for the problems. (File Photo)

DARRYL DYCK/The Globe and Mail

Stursberg and others say that in Canada conventional domestic broadcasters operate under a set of heavy regulations, including the requirement to spend 30 per cent of revenues on Canadian programming. Other players such as cable companies have their own financial obligations. For decades those regulations, which limited the activities of foreign-owned companies in this country, protected the system and helped support the creation of hundreds of millions of dollars worth of domestic programming every year.

But regulators turned a blind eye to digital media enterprises – companies as varied as Netflix and Google – until it was too late. As revenues at those foreign services skyrocketed, conventional broadcasting revenues fell at an average rate over the past five years of 3.9 per cent, according to a recent report from the Canadian Radio-television and Telecommunications Commission. Last year, they fell 4.2 per cent.

But although the Liberals didn’t pledge during the 2015 campaign to address those problems, many in the industry greeted them warmly after they took office, not least because they were seen as a respite from the previous government. “In the Harper years, when you talked to government about our industry, you never used the ‘c’ word,” said TV writer Jill Golick, referring to ‘culture.’ “In those years, we only could talk about the value of the industry in business terms – which, in our country and our broadcast policy, isn’t the only thing. The Broadcasting Act talks about the value of the television industry to the country’s sovereignty. But those things did not appeal to the previous government. So, by comparison, this was good.”

The Trudeau government’s first few months in office were applauded even by some critics, including Chris Tolley, an audio producer who’s now running for the Green Party in the riding of Toronto-Danforth. The new government “brought forward some things that have been incredibly helpful,” Tolley said, citing the addition of $150-million to the annual parliamentary appropriation for CBC/Radio-Canada. The government also increased funding for Telefilm Canada, the Canada Council for the Arts and the National Film Board, as it had pledged to do in its 2015 election platform.

Mélanie Joly, former minister of Canadian heritage, launched the wide-ranging review whose results were widely panned. (File Photo).

Justin Tang/The Canadian Press

Then, out of nowhere, Heritage Minister Mélanie Joly declared in April, 2016, that “the current model is broken” and kicked off an 18-month period of consultation with consumers and content creators to bring the TV and film development, production and distribution system up to date. “Everything is on the table,” she insisted, raising hopes of a bold new vision. She floated the idea of overhauling the Broadcasting Act, which had been passed in 1991 – prior to the advent of the internet – as well as the Telecommunications Act (passed in 1993). She invoked the glorious history of the Heritage Department and its creation of the Canadian Broadcasting Corporation and the National Film Board. She flew to Silicon Valley to meet with the disruptors.

But her final report, issued in September, 2017, under the title “Creative Canada,” was greeted as a crashing disappointment. Critics attacked its flagship announcement – that Netflix had agreed to spend $500-million over five years on production in Canada – over the fact the money wouldn’t necessarily be spent on certified Canadian content – that is, TV shows or films made by Canadians in key creative positions, such as writers, directors, producers and actors.

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“I think there was a certain element in the Trudeau government of being enamoured of all this cool Netflix stuff,” said Andrew Cash, a former MP who is running for the NDP in the Toronto riding of Davenport. “I think it distracted them from the work of rolling up their sleeves and getting something done.”

(A representative of the Conservative Party was also contacted for comment about the Liberal track record on culture. He did not respond.)

The government demurred even on requiring Netflix to charge GST, spurring more outrage. “It’s completely ridiculous,” said Pierre Nantel, a long-time member of the standing committee on Canadian heritage who served as the MP for Longueuil–Saint-Hubert under the NDP and switched to the Green Party last summer. “There is GST on an apple turnover, and on tires. So how could there not be on an offering that is so important?”

Long-time MP Pierre Nantel asks: 'There is GST on an apple turnover and on tires. So how could there not be on an offering that is so important?' (File Photo).

Justin Tang/The Canadian Press

Nantel argues that having Netflix remit GST would be a preliminary step toward bringing the company into the regulatory fold so the government could learn more about its operations, including its support for Canadian content.

Stursberg says there is an enormous opportunity for the next government to bring in policies that benefit Canadian viewers and creators.

“I don’t think anyone in their right mind would want to say that Canadians shouldn’t have access to Netflix – or Amazon Prime or Disney+ when they get here,” he noted.

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“They’re simply saying: Look, we’re already going to give you a break by not requiring you to be Canadian-owned. We are going to say, however, that you have to play by the same general rule as everybody else and make the same contributions. If we did that, then what we would do is inject a very large amount of money into Canadian production. And that might be a great thing. Because suddenly we’d have Netflix, we’d have Amazon, we’d have Disney, we’d have AT&T Time Warner all investing in Canadian shows and then distributing them through their global networks. That might be a great thing for the country. But we’ve got to require them to do it, as a matter of simple fairness.”

Apparently stung by some of the criticism, Joly did eventually launch a process to rewrite the Broadcasting Act, striking an expert panel in June, 2018, that will offer recommendations next January. And she began speaking in terms that suggested she would bring the digital services under some form of regulation, saying, “If you’re part of the system, you contribute.” But she was shuffled out of Heritage the following month.

And some, such as Nantel, say the new panel is redundant, since the industry already offered its thoughts during the previous 18-month consultation. “I think it’s really unfortunate that, for everyone involved, we keep repeating ourselves all the time,” he said.

Joly’s successor, Pablo Rodriguez, has taken up the cause of regulation. In a recent interview with The Globe and Mail, he pointed to the 2019 Liberal election platform, which commits to introducing legislation in the first year of a new mandate that would require “meaningful levels of Canadian content” from all content providers, including digital services.

What exactly does that mean? Would he level the playing field, as many are demanding, by requiring Netflix and Amazon Prime to spend 30 per cent of their revenues in Canada on Canadian programming?

“To be honest, those are decisions that we’ll make at that moment, when we receive the recommendations from the [committee],” Rodriguez replied. “We have ideas. I have my own personal ideas."

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Why has it taken so long for the Liberal government to act on what was clearly a pressing issue when it took office? “We had to consult, explore, talk to the experts, see the best practices,” said Rodriguez, adding that the last review of the Broadcasting Act took six years. “These are structural changes, right? These are fundamental changes, and sometimes when we make fundamental changes it’s worth taking a little bit of time to do it right. We’re talking here about the role of the CRTC, the role of the CBC, all of the things that have changed and are evolving in a system that completely changed.”

If regulating streaming services wasn’t seen as important after the Creative Canada consultations, what has changed in the Liberal Party’s thinking since then?

“Everything changes at the speed of light,” Rodriguez said. “Things are changing on a daily basis, and things are going to accelerate.

“We understand the challenges, but we also understand that a bill that has not been touched in [almost three] decades, a bill that was drafted and adopted before the existence of the internet, has to be totally redesigned to take into consideration the new challenges. And also, not only for today but for tomorrow, because if we draft a bill that answers problems we’re facing today without taking into consideration everything that can come in the future, then we have to redo the whole thing in a year or two or three.”

NATIONAL PARTY PLATFORMS ON CULTURE

(The Conservative Party of Canada has not released a platform at the time of writing. The People’s Party of Canada’s platform does not address arts and culture.)

NDP

“Arts and culture are at the heart of who we are as Canadians. It’s how we listen and understand each other better. It’s how we connect across vast distances and celebrate our identities.”

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Key pledges

Promises to “make sure that Netflix, Facebook, Google, and other digital media companies play by the same rules as Canadian broadcasters. That means paying taxes, supporting Canadian content in both official languages, and taking responsibility for what appears on their platforms – just like other media outlets.”

Increase funding for CBC and Radio-Canada. “Arts and cultural institutions [to] receive stable, long-term funding to grow and promote Canada’s diverse cultures and histories. We will also extend support to Canadian media to assist them in making the digital transition.”

Financial support for the Indigenous theatre program at the National Arts Centre “as part of our larger efforts to honour and support Indigenous arts and culture.”

Institute income tax averaging for artists and cultural workers.

Green Party

“Few sectors have such a small ecological footprint, but deliver such multifaceted benefits to communities and our national identity as the arts and culture.”

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Key pledges

Increase funding to “all of Canada’s arts and culture organizations including the Canada Council for the Arts, the National Film Board, and Telefilm Canada.”

Review film industry tax incentives “to ensure all parts of Canada are competitive and attractive to the industry, with incentives rising when Canadian artistic and technical talent are employed.”

"Reform anti-trust laws to enable the break-up of media conglomerates.”

“Close the loophole that exempts social-media platforms from collecting taxes on advertising and ensure all government advertising is placed in Canadian publications.”

“Increase funding to CBC/Radio-Canada by $315-million per year until the per-capital level of funding is equal to that of the BBC.” (CBC/Radio-Canada received approximately $1.2-billion in government funding for 2018-2019, or approximately $34 a person. The BBC receives approximately $115 a person, according to the CBC corporate report, A Creative Canada, issued in Nov. 2016. Funding CBC/Radio-Canada at the same per-capita level as the BBC would mean an annual Parliamentary appropriation of approximately $4.3-billion.)

“Reform the government structure of CBC/Radio-Canada to remove the potential for political interference in board appointments. (The Liberal government reformed the board appointment process in the summer of 2017, to eliminate the potential for political interference.)

Liberal Party

“From the writers who tell our stories to the comedians who make us laugh to the artists whose music forms the soundtrack of our lives, Canadians are proud of the creativity we share with each other – and the world.”

Key pledges

Creation of a $200 Culture Pass distributed to each Canadian child at the age of 12 to help access “theatres, museums, galleries, workshops, and other cultural venues and local Canadian content.”

Strengthen the regional mandate of CBC/Radio-Canada “so local stations can broadcast more local news; and require CBC/Radio-Canada to open up its digital platform so that journalism start-ups and community newspapers can access affordable technology to develop and distribute local content.”

Increase annual funding for Telefilm Canada “by nearly 50 per cent a year.”

New Cultural Diplomacy strategy, including “at least one international mission each year to promote Canadian culture and creators around the world.”

In the first year of the new term, introduce legislation to “ensure that all content providers – including internet giants – offer meaningful levels of Canadian content in their catalogues, contribute to the creation of Canadian content in both official languages, and promote this content and make it easily accessible on their platforms.”

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