Rule, Canadiana: Let’s experiment with the “Canadian content” test. Carefully, please.

February 21, 2024

The public debate over defining subsidy-worthy “Canadian programs” has revved up lately, despite the fact that the CRTC will not formally review the definition until later this year.

The conservative opinion salon The Hub ran an article this week penned by Richard Stursberg which it headlined in my Google news feed as “Canadian content is a scam.” Stursberg said no such thing, but all is fair in love, war and click bait.

Stursberg is a Canadian cultural sovereigntist (my label) who has long advocated a “cultural test” of identifiable Canadiana as the threshold for earning production subsidies, replacing the forty-year-old “creative headcount” test.

At the same time, Robert Armstrong (author of the seminal textbook, Broadcasting in Canada) published a defence to the status quo test that awards subsidy points based on the domination of key creative roles by Canadians: screenwriters, directors, lead actors and most importantly producers. The gist of the headcount policy is that Canadians will make Canadiana.

The volleyed policy argument has been around for a while, worthy in its own right. But lately it has become a political football thanks to Netflix and the Hollywood studios demanding a change in policy during the Parliamentary debate over the Online Streaming Act Bill C-11 and the CRTC’s upcoming regulatory hearings that will review whether a new subsidy test is a good idea.

The purpose of this post is to suggest that the CRTC should follow its past instincts on this complex policy file: experiment a little. There’s a lot at stake here, culturally and economically, so much so that it would be a shame to turn this policy issue into a political prize to be seized by any number of actors who are self-interested or just plain troublemakers.

I say that not just because the Conservatives have decided that a Canadiana test is a delightful opportunity to prang the government and the industry establishment. Rather, it’s important to appreciate that this game is afoot at the behest of Netflix and the other US streamers.

The streamers are trying to game the CRTC and the Canadian public by supporting a cultural test for subsidies as a trade off for abolishing the “headcount” rules for using Canadian talent once the CRTC assigns them a spending quota on offering “Canadian shows.” That’s because what they really want is to use American showrunners (writers and producers) and Hollywood stars. The paying audience they have in mind is not just Canadian, it’s global.

Netflix can and has pointed to its 2020 production of the Québec wilderness thriller Jusqu’à Declin as a good example of how authentic an American-produced (but Canadian written and acted) piece of Canadiana can be. But when Netflix and the streamers tell the CRTC they want the British cultural test to replace the Canadian headcount test, one needs to look exactly at what they propose.

The UK “35-point test” is heavily weighted to scripts with identifiable British settings, themes, characters and so on. It’s so heavily weighted that the British people are subsidizing shows that are owned and made by American producers and potentially employing Hollywood directors, screenwriters and all-American casts (in practice, it’s rarely that extreme).

The cultural test is so goofy that the “British setting” points are available on the basis of fractions: a show earns 25% of subsidy points when a quarter of the plot is visibly on British soil, scaling up by 25% increments.

Also, you have to get your head around the fact that an arms-length industry committee administers the test.

But let the UK system not be a straw person. Presumably we Canadians could come up with a better cultural test than that!

I am getting to my point, dear reader. But one more thing you need to know is that any changes or tweaks to our subsidy test requires that multiple gatekeepers get on the same page. That’s no mean feat when the layered inventory of subsidies are dispensed by Heritage Canada, the Canada Media Fund, Telefilm, and the CRTC. The governance of those bodies is complicated enough that a willing Heritage Minister would have to be heavy handed to dictate any big changes.

It’s unlikely the current Heritage Minister Pascale St.-Onge would want to do that and thank goodness because any significant shift from the headcount model to a cultural test is rife with uncertainty and unintended consequences for Canada’s domestic television and film industry, successfully nurtured over four decades.

The last time anyone tinkered with the subsidy test, it didn’t go far. Under Jean-Pierre Blais’ CRTC in 2017, the Commission experimented with pilot projects for certifying broadcasters’ “Canadian” programs that fulfilled their programming obligations.

The first was to cut in half the requirements for Canadian creators (from six to three points out of ten) if the show was based on a novel written by a famous Canadian novelist (hypothetically, Margaret Atwood’s American dystopia, The Handmaid’s Tale). But the other gatekeepers wouldn’t change their subsidy rules in response to Blais’ experiment, so it went nowhere.

An earlier CRTC innovation was to green light Canadian-American co-ventures, relaxing the CRTC rule that producers of Canadian programs must be Canadian. That generated some modest injection of Hollywood financing into Canadian programs, although the co-venture could not draw subsidies from the other funding agencies who did not relax their rules. As soon as Netflix is ordered by the CRTC to produce (a lot more) Canadian programming, the co-venture program is going to draw more attention and is likely to be reconsidered.

Here’s three other back-of-the-napkin ideas we might try as pilot projects:

1. Continue the current “headcount” test for determining 100% of subsidy funding but create a 10% bonus for meeting a thematic standard (and please don’t use the British system!).

2. Without changing the subsidy tests at Heritage, CMF or Telefilm, the CRTC could permit streamers and broadcasters to reserve a modest portion of their Canadian programming budgets to meet a cultural test only. This would be similar to the “Canadian novelist” pilot project. It would allow Netflix to put its money where its mouth is and make Canadiana without CMF, Telefilm or Heritage subsidies.

3. The CRTC, coordinating with the other funding agencies, could give Netflix et al a quota for Canadian programming that exceeds the current benchmark of 30% and the extra program spend can be cultural-only and eligible for subsidies from all gatekeepers.

There are undoubtedly flaws in these ideas that I can’t see, but in the spirit of policy innovation, some successful experimentation could help.

Even if you are with me so far, there remains one big caveat.

What would really deep-six our domestic industry is if anyone watered down the Canadian content rule that prohibits broadcasters (and now streamers) from forcing our independent Canadian film and television producers to alienate the long-term intellectual property in their creations. That’s a vital issue, but grist for the policy mill on another day.

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