CCA Bulletin 35/07
November 1, 2007
Financial Update, Supplementary Estimates and Canadian Ownership Review
Just the Facts
October 30, 2007 was a hectic day in Ottawa, with the government releasing the Supplementary Estimates, the Minister of Finance delivering his Economic Update, and the Federal Panel charged to review foreign ownership restrictions in key areas of federal policy (including culture and broadcasting) setting out the terms of its mandate and consultation process.
The Economic Update includes several measures such as lowering the GST to 5% on January 1, 2008; a 0.5% reduction in the income tax rate of the lowest income earners (including a very large number of artists and creators!), from 15.5 to 15%; an increase in the basic personal deduction amount, and important corporate tax cuts.
In total, $ 60 billion of tax cuts were announced by Minister Flaherty to be phased in over five years. More a long-term budget than a simple overview of the economy, the document lays out the broad fiscal policy of the government.
The Supplementary Estimates for the current fiscal year were also released. With these figures now in hand, it is possible to get a much clearer picture of federal spending on the arts and culture. The federal government released the Main Estimates ahead of the 2007 Federal Budget. This meant that the Main Estimates did not reflect all of the measures announced in the subsequent budget.
The Supplementary Estimates should also provide details on the ongoing Expenditure Review exercise that redirects 5% of affected departments and agencies spending to higher priority items, either within the area under review or within government at large. This year again, it looks as if the cultural sector may be affected by this $ 1 billion reallocation since of the 17 departments and agencies targeted this year, 11 may impact one way or another on cultural concerns in the broad sense of the word:
- Department of Canadian Heritage,
- Foreign Affairs and International Trade,
- Canadian Museum of Civilization,
- Canadian Museum of Nature,
- Library and Archives Canada,
- National Gallery of Canada,
- National Museum of Science and Technology,
- Canadian International Trade Tribunal,
- International Development Research Centre,
- Parks Canada,
- Statistics Canada.
The CCA is conducting an in-depth study of the Supplementary Estimates and will provide a concordance with the Main Estimates and the 2007 Federal Budget in the coming weeks.
On another front, then Minister of Industry Maxime Bernier and Minister Flaherty announced last July the creation of Canada’s Competition Review Panel to examine ownership and investment rules that may dampen Canada’s productivity and competitiveness. Headed by Lynton Wilson, former CEO of Bell Canada Enterprises, the Panel is comprised of a total of five members from the business and legal communities. The Panel will examine policies to limit foreigners to a minority ownership stake in telecommunications, financial services and culture.
The public is invited to intervene by submitting briefs of no more than 20 pages by January 11, 2008. The Panel will report to the Minister of Industry, the Hon. Jim Prentice, at the end of June 2008.
Tell Me More
The creation of Canada’s Competition Review Panel is of direct concern to the CCA and to many of our members in the cultural industries sector. Policies have evolved over the years to ensure Canadian control of our most essential cultural industries from broadcasting, book publishing, sound recording and telecommunications undertakings. Converging technologies mean that telecommunications is now a major distributor of cultural materials, sending broadcasting, games and other products to your cell phone, or through internet, satellite and cable. To date, these activities face little regulation concerning cultural content but are at least subject to ownership controls.
The motivation for the review appears to be a sense that in the drive to improve Canadian competitiveness and productivity, some of the foreign ownership restrictions may impede our ability to compete in a globalized economy. This can be seen in Minister Bernier’s unprecedented 2006 directive to the CRTC whereby, when dealing with telecommunications issues, the CRTC must favour purely economic criteria over any of the other seven non-economic objectives set by Parliament in the Telecommunications Act, which amongst others includes the promotion of ownership and control of Canadian content carriers by Canadians.
The CCA has always insisted that foreign ownership restrictions are essential in the cultural area to ensure that Canadian voices and stories can be heard at home and around the world. Canada is not unique in limiting foreign ownership for strategic national purposes: one needs only look south of the border.
The CCA will be consulting with key elements within the cultural industries to prepare a presentation to the Panel. The CCA welcomes your views on this issue, as well as any new ideas to protect Canada’s cultural integrity while remaining open to the cultural products and influences of our globalized world.
What Can I Do?
The Panel has established a January 11, 2008 deadline for submissions. They have also released a discussion paper titled Sharpening Canada’s Competitive Edge. The CCA would appreciate receiving any copies of your submission.
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