CCA Bul­letin 07/08

March 3 , 2008

Just the facts

Last week, the CCA joined 13 rep­re­sen­ta­tives of cul­tural indus­try orga­ni­za­tions from Mon­tréal and Toronto in a three-and-a-half-hour in cam­era con­sul­ta­tion ses­sion with mem­bers of the Com­pe­ti­tion Pol­icy Review Panel.The Panel was appointed in July 2007 by the fed­eral Min­is­ters of Indus­try and Finance to exam­ine, amongst oth­ers, the exist­ing leg­is­la­tions and restric­tions affect­ing for­eign invest­ment and own­er­ship in Cana­dian cul­tural indus­tries: books, mag­a­zines, film, broad­cast­ing, new media, etc.

Rep­re­sented in the room were the audio­vi­sual, book and mag­a­zine indus­tries. A sep­a­rate ses­sion for broad­cast­ing was sched­uled later on in the day, at which the CCA would have asked to attend as well if it had been aware of its exis­tence. Each par­tic­i­pant had five min­utes to make a state­ment, and then the dis­cus­sion was open to all, with Panel mem­bers ask­ing ques­tions. A high rank­ing offi­cial from the Depart­ment of Cana­dian Her­itage sat as an observer. For the CCA, this was an occa­sion to reit­er­ate the key points included in the brief pre­sented to the Panel on Jan­u­ary 11, 2008.

The point was made sev­eral times that cul­tural prod­ucts are not like oth­ers: they play a defin­ing role in estab­lish­ing who we are as a nation and they are meant first and fore­most for local con­sump­tion (it was noted that export mar­kets are dif­fi­cult to find in the case of Que­bec indus­tries and present a spe­cial chal­lenge for Eng­lish Canada because of the dom­i­nance of the US giant, that tends to import Cana­dian cre­ative tal­ent rather than Cana­dian pro­duc­tions). From the national hotbed of tal­ents, an impres­sive num­ber of our artists and pro­duc­tions have achieved inter­na­tional recog­ni­tion, and the inter­na­tion­al­iza­tion of our cul­tural excel­lence should receive gov­ern­men­tal sup­port for a vari­ety of rea­sons. But Canada’s aim is not to export more artists as it would CANDU reac­tors or telecom­mu­ni­ca­tions technologies.

Given the demo­graphic, geo­graphic and eco­nomic real­i­ties of Que­bec and of Eng­lish Canada, cul­tural indus­tries and the Cana­dian arts and cul­ture sec­tor as a whole require pub­lic finan­cial sup­port and reg­u­la­tions. They will exist and thrive only as the result of a com­mon will to ensure we have a dis­tinct cul­ture as a nation, what­ever that may be in Cana­dian terms.

The mes­sage sent by all, and sum­ma­rized at the end by the Chair of the Panel, was quite clear: cul­tural indus­tries are not like other sec­tors under the Panel’s review, bank­ing and telecom­mu­ni­ca­tions (although con­ver­gence is bring­ing the lat­ter closer to the group) and “If it ain’t bro­ken, don’t fix it”. This being said, par­tic­i­pants made clear that they were not sim­ply advo­cat­ing for sta­tus quo. We insisted on the neces­sity to review and com­ple­ment exist­ing mech­a­nisms already in place with regards to for­eign invest­ment and own­er­ship. Qualms were expressed about the “net ben­e­fit test” applied under the Invest­ment Act to autho­rize take-overs. It was pointed out, for exam­ple, that the oblig­a­tion put on for­eign own­ers to sign up Cana­dian tal­ent (e.g. in music or edit­ing), while great for indi­vid­ual artists, has had a per­verse effect on the sec­tor as a whole as Cana­dian pub­lish­ers and record­ing com­pa­nies can­not reap the ben­e­fits of the tal­ents they have con­tributed to develop, while foreign-controlled com­pa­nies have nei­ther oblig­a­tion nor inter­est to rein­vest in the next gen­er­a­tion of Cana­dian artists and creators.

Panel mem­bers were par­tic­u­larly inter­ested in the impact of Inter­net on cul­tural indus­tries. There was a con­sen­sus that this new dis­tri­b­u­tion plat­form, with the inter­ac­tiv­ity and the mul­ti­plic­ity of choices it offers, is hav­ing a def­i­nite impact and that dif­fer­ent sub-sectors were grap­pling with ways to face this new real­ity. Many said it is high time to inte­grate the so-called new media into the Cana­dian cul­tural ecol­ogy through appro­pri­ate forms of reg­u­la­tion, an idea that the CCA has been push­ing for quite some time.

Tell me more

It was pointed out that since 1985, of 125 acqui­si­tions by for­eign inter­ests of Cana­dian com­pa­nies, only 4 had been rejected, beg­ging the ques­tion: is a fur­ther loos­en­ing of the rules really nec­es­sary? And where is the evi­dence that the cur­rent regime of restric­tions on for­eign own­er­ship is detri­men­tal to Cana­dian cul­tural indus­tries (the Har­le­quin exam­ple excepted)?

The prob­lems for Cana­dian cul­tural indus­tries are insuf­fi­cient financ­ing and inef­fec­tive appli­ca­tion of exist­ing reg­u­la­tions. With the appear­ance of new dig­i­tal pro­duc­tion and dis­tri­b­u­tion plat­forms, and in accor­dance with Canada’s sup­port of cul­tural diver­sity at home and abroad, it is time to develop a new reg­u­la­tory and fund­ing frame­work to ensure that Cana­di­ans have access to Cana­dian books, mag­a­zines, music, audio-visual pro­duc­tion and any other form of cul­tural expres­sion result­ing from a fast evolv­ing tech­nol­ogy. In this con­text, main­tain­ing effec­tive con­trol in the hands of Cana­di­ans is a pre­req­ui­site for all other required mea­sures to be effec­tive in ensur­ing the cre­ation and dis­tri­b­u­tion of cul­tural con­tent cre­ated by and for Cana­di­ans first and foremost.

The CCA is pleased that the Min­is­ter and the Panel responded to our con­cerns about the review of cul­tural indus­try poli­cies with­out the involve­ment of cul­tural pol­icy experts. The CCA sug­gested, in a let­ter to the Min­is­ter, that he either adds a cul­tural pol­icy expert to the Panel or con­venes a sub-group. Last week’s con­sul­ta­tion sat­is­fied this request. A series of seven sec­toral and of as many regional con­sul­ta­tions is sched­uled over the com­ing weeks.

The Panel is man­dated to review key ele­ments of Canada’s com­pe­ti­tion and invest­ment poli­cies to ensure that they are work­ing effec­tively. The Panel is exam­in­ing a range of issues, with an eye to ensur­ing Canada’s poli­cies are mod­ern and effec­tive, and reflect a com­pet­i­tive envi­ron­ment that is global in scope, and typ­i­fied by fierce com­pe­ti­tion between national juris­dic­tions seek­ing to attract invest­ment, peo­ple and eco­nomic oppor­tu­ni­ties. The Panel is tar­get­ing to report back to the Min­is­ter of Indus­try on behalf of the Gov­ern­ment by June 30, 2008.