Most of the debate about the Trudeau government’s overhaul of the Broadcasting Act has focused on Bill C-10′s potential impact on internet freedom as Ottawa moves to bring foreign streaming services under its regulatory umbrella.
What has been missing amid the debate about whether the proposed legislation would constitute a threat to freedom of speech – a contention vigorously denied by Heritage Minister Steven Guilbeault – is any discussion about whether C-10 would help Canada’s conventional broadcasters stop bleeding red ink.
Canada’s main private television networks – CTV, Global and Citytv in English Canada, TVA and Noovo in Quebec – have seen their revenues plummet as online competitors grab the lion’s share of domestic advertising revenue. The networks’ very viability is now threatened as more Canadians opt to get their dramatic programming fix through streaming services such as Netflix, which are currently unregulated in Canada.
Bill C-10, which the Trudeau government aims to adopt before the House of Commons adjourns for the summer, purports to “level the playing field” by forcing foreign streaming services to devote the same proportion of their Canadian revenues to domestic programming as Canadian private television broadcasters. But it spares Netflix, Amazon Prime Video, Disney+ and other foreign streaming services from the plethora of additional regulations faced by Canadian-based broadcasters, including obligations for local news and public affairs programming.
Canada’s private television operators mostly see C-10 as a missed opportunity to overhaul a regulatory burden that they contend dooms them to unprofitability.
In its submission to the House of Commons standing committee on Canadian Heritage, which is studying C-10, BCE Inc. noted that the “local television sector has lost hundreds of millions of dollars over the last five years and television and radio stations are on the verge of closing.” It added the COVID-19 pandemic has “exponentially worsened already untenable operating positions.”
BCE, whose Bell Media unit owns CTV and Novoo, said it supported empowering the Canadian Radio-television and Telecommunications Commission to force foreign streaming services to contribute a portion of their domestic revenues to the production of Canadian programming. But it warned the bill would “leave a large number of existing provisions in place that will continue to create an unlevel playing field between traditional domestic players and foreign online services, impairing the ability of Canadian businesses to compete.”
At a minimum, BCE and other domestic industry players called for the elimination of more than $100-million in annual licensing fees private domestic broadcasters pay to Ottawa. They also asked Ottawa to reduce or eliminate other regulatory constraints, such as requirements to spend 30 per cent of their gross revenues on Canadian programming, devote half of their evening schedules to domestic productions and broadcast a minimum number of hours of “locally reflective news” each week.
“In our view, this is the only way to ensure Canadian broadcasting undertakings can remain competitive in a modern broadcasting system,” Citytv owner Rogers Communcations Inc. said in its brief to committee.
No industry player has been more critical of C-10 than Quebecor Inc. chief executive officer Pierre Karl Péladeau, who told the committee he had “trouble seeing how an institution like the CRTC could regulate the internet.”
In its brief to the committee, TVA owner Quebecor said it had “very serious concerns that web giants could use tax schemes to avoid or at least considerably reduce the scope of their regulatory obligations by not fully reporting all broadcasting revenues generated in Canada.” Quebecor added that “instead of restoring equity between conventional and online broadcasting undertakings, [C-10] seems to exacerbate the inequalities of the Canadian regulatory system.”
Mr. Péladeau was especially critical of Mr. Guilbeault’s decision not to include an overhaul of CBC/Radio-Canada’s mandate in C-10. Unlike in English Canada, where the CBC accounts for only a sliver of television advertising revenues, Radio-Canada competes fiercely against TVA and Novoo for market share in Quebec. Quebecor called on Ottawa to restrict Radio-Canada’s mandate to broadcasting “distinctive” programming not offered by private networks.
According to Canadian Heritage estimates, Bill C-10 would inject as much as $830-million into the domestic production “ecosystem” annually by 2023 “if the CRTC requires online broadcasters to contribute to Canadian content at a similar rate to traditional broadcasters.”
The sum would help make up for the shortfall in domestic funding created in recent years because of declining cable and satellite TV subscriber revenues. BCE, Rogers and Quebecor, for instance, must contribute 5 per cent of cable and satellite revenues to domestic program funding initiatives administered by independent bodies, such as the Canadian Media Fund. The federal government has offset the decline by topping up the budget of the CMF in recent years.
As it stands, however, C-10 will not fix what is broken the Canadian private broadcasting industry. A fundamental rethink of the way the CRTC regulates conventional television broadcasters is needed. Unless that happens, there many not be any of them left in a few years.
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