CCA Bulletin 09/08
March 11, 2008
Is the C-10 Controversy Necessary?
Just the Facts
Over the past several days, the controversy over the federal government's bill C-10 continued to make headlines and editorial pages all over the country.
The legislation in question is entitled, "An Act to amend the Income Tax Act including amendments in relation foreign investment entities and on-resident trusts, and to provide for the bijural expression of the provisions of the Act." (the Act).
This Act is currently in front of the Banking, Trade and Commerce Committee of the Senate, prior to final approval and royal sanction. Wading through the highly technical provisions of the legislation adorned with such an enticing title, it is easy to see how Parliamentarians from all Parties missed the implications found on page 346 of the 568 page document, in the section on the film and video certification provisions of the Income Tax Act. That attention was finally drawn to this section at such a late part of the process is in itself an interesting question.
The offensive section of the Act – 120.(3) reads as follows:
"Canadian film or video certificate" means a certificate issued in respect of a production by the Minister of Canadian Heritage certifying that the file or video production in respect of which the Minister is satisfied that (…) (b) public financial support of the production would not be contrary to public policy." (our emphasis).
Understandably, the latter phrase has triggered the firestorm and sent Parliamentarians scrambling, as it seems to point to an "after the fact" form of censorship and raises interesting questions about the arms' length relations of granting agencies mandated to support Canadian film and TV production. A large number of organizations, including the CCA, have contacted the Minister to express their concerns with the potential censorious implications of regulations associated with 120.(3) b). Many have also pointed at the uncertainty this would create in putting together the financing of audiovisual production, a task complex enough as it is.
The Minister of Canadian Heritage (link to Hansard) has said in the House of Commons on Wednesday March 5, 2008 that once the Bill is passed by the Senate, she will hold consultations with the sector about regulations flowing from the legislation and in particular 120. (3) b).
This should be reassuring to hear the real question is whether we really need this sort of legislation to cope with the situation our government and our legislators seem to be preoccupied with.
The Criminal Code already contains provisions that deal with pornography, child pornography, the promotion of hate, slander, libel, advocating crime and sundry other elements which have proved adequate in the past to deal with these offences.
The Supreme Court of Canada has issued rulings clarifying some of these activities such as pornography (Butler decision) , child pornography (John Robin Sharp decision), hate crimes (Zundel decision), etc. These decisions are steeped in rigorous research and prove how difficult it is to rush to judgment based on mere idiosyncratic and personal opinions. There is cause for concern if such judgments were left to a panel of non jurists.
Finally, there are other instruments available to the government to deal with the perceived tax inequity resulting from a criminal conviction of the film-maker while the production itself benefits from a tax certification. Aren't the provisions of the Criminal Code concerning the proceeds of crimes sufficient to satisfy the government's objectives?
IIf the Government is only concerned with material with content that is obscene, child pornography or hate literature (including promoting genocide), why not refer to that in the Income Tax Act? In this way, the decision to withold tax exemption certificates could be tied to a finding by a judge under the Criminal Code---all of these provisions have been upheld by the Supreme Court. This could also lead to reclaiming the public investment made in the production of the criminal activity.
Tell me more
The full text of section { 120.(3) of the Act reads as follows:
"(3)The definition "Canadian film or video production certificate" in subsection 124.4(1) of the Act is replaced by the following: "Canadian film or video certificate" means a certificate issued in respect of a production by the Minister of Canadian Heritage certifying that the file or video production in respect of which the Minister is satisfied that
(a) except where the production is a treaty co-production ( as defined by regulation) an acceptable share of revenues from the exploitation of the production in non-Canadian markets is, under the terms of any agreement , retained by
(i) a qualified corporation that owns or has owned an interest, or for civil law a right in the production,
(ii) a prescribed taxable Canadian corporation related to the qualified corporation, or
(iii) any combination of corporations described in subparagraph (10 or (ii); and
(b) public financial support of the production would not be contrary to public policy." (our emphasis)
A few more facts about the controversial amendment:
1. The intent to amend the Income Tax Act was first announced by the Hon. John Manley and Sheila Copps in 2003 as part of the Liberal government updating of the ITA treatment of the film and video certification provisions.
2. The current version of the Bill received unanimous support of all parties when it was voted on three times in the House of Commons. Parliamentarians of all stripes admit they missed the relevance of 120.(3) b when they studied the legislation.
3. The legislation is still in font of the Banking Senate Committee and Senators will hold additional hearings on C-10 as a result of the clamour that it has caused. The CCA has asked to appear before this Committee to present its views on this legislation.
4. There has been considerable editorial commentary on the legislation, most of which opposes the interpretation of 120(3) B as an invitation for political or subjective decisions regarding the artistic merits of a particular production.
ERRATUM:
The CCA made a mistake when the bulletin was first sent out, naming the John Robin Sharpe decision as the Robin Mitchell Sharpe decision. The CCA wishes to apologies for any inconvenience this may have caused.
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