Financial Update, Supplementary Estimates and Canadian Ownership Review

CCA Bul­letin 35/07

Novem­ber 1, 2007

 

 

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.