Tag: cancon

November 22, 2025

Earlier this week the CRTC released a major ruling on Canadian content. MediaPolicy provided a quick bottom line reaction but you could do just as well with any of the many media reports.

More depth of analysis is called for but I’m going to do that over two posts.

Today I was going to go on a rant. But I will save that for the next post, because I think those interested in policy supporting Canadian television drama often find themselves in a situation not unlike a novice driver raising the hood of a car engine to gape at a maze of parts. An explainer might help, so here goes, with the opinionating to follow.

The important thing to get about the CanCon engine is that the interconnected parts include Canadian broadcasters, government agencies, Hollywood streamers and independent Canadian filmmakers who collectively follow CRTC regulations that put Canadian television dramas on a screen to be enjoyed by a Canadian audience whose dollars rarely cover the costs of those shows.

As a general rule CanCon is unprofitable in our modestly populated country. If we had a population of 340 million, we wouldn’t need a CanCon policy.

That’s why as a matter of Canadian cultural policy we offer production subsidies bankrolled by Canadian cable companies as well as federal and provincial governments. It’s the feds and the provinces that put up most of the money. 

At the heart of the CanCon engine are the “independent” Canadian TV and filmmakers—by law, independently-owned at arms length from Canadian broadcasters— who make Canadian drama and comedy and sell it to broadcasters and, coming soon, to Hollywood streamers too. 

As a matter of Canadian cultural policy it’s the Canadian producers, and only them, who get the subsidies that make up half of filming budgets (though eligible for these subsidies, the broadcasters rarely make their own dramas in-house). Federal policy aptly describes the independents as the vital cog in the broadcasting machine.

Living hand to mouth in relative anonymity, these modestly capitalized enterprises have been the creative force behind CanCon for decades, at least as important as the big broadcasters whom the public knows better. As far as television drama is concerned, the broadcasting engine runs on the content the independents make. 

Until now, we haven’t had a Hollywood-style system for making Canadian television dramas. No wannabe studio giants here. The Canadian independents are many and mostly small, moving from project to project, slowly building a sustainable business, locked into frenemy relationships with the Canadian broadcasters who buy their stuff.

But those Canadian broadcasters, big and small, are on their way down, if not out (watch this space). 

Netflix and the streamers are increasingly on top. The federal Liberals’ Online Streaming Act, Bill C-11, was the engine overhaul necessary if the ascendant streamers are to be recruited to finance and distribute Canadian drama, filling the growing void for that programming that results from Canadian broadcasters steadily losing cable subscribers and advertising revenue.

The streamers are not willing conscripts to the cause. Just ask them. They despise the mandatory cash contributions to Canadian media funds that subsidize television dramas and local news.

But making their own Canadian content might be something the streamers could live with. This recent CRTC ruling was about setting the conditions for that.

From their point of view, the streamers would like total freedom of action to make Canadian content on their own terms. Those terms include hiring the creative talent they want and dictating commercial terms to the independent Canadian production houses they engage to make the content. The CRTC is trying to bend to the streamers’ desires without the regulatory engine seizing up.

On hiring the top creative talent that drive a production, the CRTC has long sponsored the famous ten-point headcount that certifies dramas as CanCon, a certification that the broadcasters need in order to meet the CRTC’s quotas for CanCon spending. 

Until this week, that headcount system was straightforward enough. The idea is that in the long run Canadian talent will make Canadian content, without a need for a state-arbitrated test of “what is Canadian.”

The ten points recognize up to eight talent roles: Director (2 points), Screenwriter (2 points), first and second lead actors, cinematographer, art director, music composer and picture editor. 

If a production house hires enough Canadians to rack up at least six points, the CRTC certifies their program. In addition to the six-point talent, the CRTC requires the producer —the quarterback of the entire production who does the hiring and approves the scripts— to be a Canadian and demonstrably in charge of the creative team without interference from investors. As well, 75% of the set production and post-production payroll must be paid to Canadian workers.

There are equally compelling cultural arguments to leave this system alone, or to change it up. Last week, the CRTC changed it up, although much of it might seem mundane at first glance. 

There’s a new category of Showrunner (2 points), a recognition of the Hollywood practice of a putting a hybrid writer/producer in charge of a production. The screenwriter’s guild ain’t thrilled, but the CRTC is just adapting to reality. 

There’s an ecumenical nod towards giving points for hiring a Canadian behind-the-screen team of hair, make-up and costume designers. Collectively, a Canadian team can earn one point.

Ditto, the CRTC is now adding the special effects director to its approved list. 

In a move towards critics who believe that certification of Canadian content ought to be less about the nationality of talent and more about the Canadian narrative, look and feel of the story, the Commission is giving points for visibly Canadian locales, landscapes, and characters.

It’s also giving credit for dramas based on Canadian novels as well as soundtracks featuring a majority of previously recorded Canadian songs.

All of this Canadianography earns “bonus” points, shorthand for saying that a more effusively Canadian drama can be certified as CanCon with less Canadian talent.

This was an unexpected development, as the Commission’s preliminary view published last year was that it wasn’t going to do this. However the Commission cites the feedback from a public opinion poll it commissioned and interprets as supporting a popular desire for more classically Canadian stories. 

With a longer list of roles into which Canadian hires are credited towards CanCon certification, the Commission expanded the 10 point test to as much as a 14 point test, but made it scaleable (smaller productions might combine roles) up or down: so long as 60% of the roles are filled by Canadians, the spirit of the old six out of ten test is met.

But crucially the importance of Canadian directors, writers and actors has been diluted. This will please the Hollywood streamers who can be expected to tell the Canadian independent producers that if they want the commission they will hire more of the streamers’ key Hollywood people. 

There are however more seismic changes afoot and let me draw the connection between those big moves and the incremental amendments to the point system. 

First, the all-powerful producer who pilots the production, approves the script, and hires the six-point creative team might not have to be Canadian after all.

In this newest CRTC ruling, when Netflix commissions a CanCon project and insists upon taking a majority copyright position in the production, which it will do routinely, the lead producer can be an American so long as two of the three junior producers are Canadian. 

That brings us to the second big change: the Canadian ownership of copyright and intellectual property in a drama production.

This is a bit of long winded explanation but stick with me and follow the money.

Until now the Commission has never bothered with any rules regulating ownership of copyright in a production.

In the past the Commission didn’t need to impose Canadian ownership on the control of copyright in a CanCon program because all the financing partners were Canadian: the independent producer selling the show, the broadcaster commissioning the show, the federal and provincial governments providing the first layers of subsidy for the show and the public-private Canada Media Fund providing the second layer.

The Media Fund and Canadian governments that control the CanCon subsidies want to support the capitalization and long term viability of the independents. They insist that the independent producer —not its broadcast partner— must own 100% of the copyright and intellectual property flowing from the production. 

The Media Fund supercharges that by green-lighting its subsidy only if hiring of Canadians on a production is a full ten points out of ten. Since the Media Fund subsidy is crucial to CanCon financing, ten points becomes the norm even if the CRTC and federal subsidies only require six.

But since the CRTC has never been in charge of subsidies and is only concerned with getting Canadian content to broadcasting screens, its thinking was that one Canadian media business is as good as another, be it an independent producer or broadcaster.

Then we decided to regulate the US streamers. Oops, now the CRTC needs a copyright rule.

The new reality is that if the CRTC is going to require the streamers to spend money making CanCon, the streamers are going to want as much control of the return on their investment across Canada and a global audience as they can get. That return comes from domestic release, global release, long term residency in the Netflix library, control of spin-offs and sequels, trademark revenue, etc. 

That means three things are important: copyright, copyright and copyright. 

When Netflix appeared before Parliamentary committees considering Bill C-11, the Online Streaming Act, its Canadian policy director bluntly stated that the amendment Netflix wanted the most was copyright ownership of the CanCon it would be required to commission.

He then disarmingly claimed that the streamer wouldn’t necessarily want majority ownership of every CanCon production it commissioned ——even though it does exactly that when commissioning US shows that are shot in Canada. 

The Commission knew it had to find a balance between Netflix’s commercial interests and the viability of Canadian independents, the standard bearers for cultural production. The question was, where to strike the compromise?

Last week it struck that compromise by offering the streamers one of three options: 100% Canadian ownership of copyright, minority American ownership, and majority American ownership (to a maximum of 80%).

The first bucket of 100% Canadian ownership is status quo, allowing for the tweaks to the six-point rule. 

The minority US ownership bucket means that Netflix can choose a non-Canadian lead producer although technically the Canadian production house retains an equal share of creative control.

The majority US ownership bucket obviously means that Netflix effectively owns the show and the lion’s share of its success. The only price it must pay is to move up from six to eight points (or 80%) on hiring Canadians with the aid of Canadianography points, hairstylists, make up artists, etc.

Chart from Canadian Media Producers Association, circulated to its members

Nevertheless it’s important to mark this mental footnote: the new CRTC copyright rule does not apply to subsidies controlled by Canadian governments and the Canada Media Fund, at least for now. As mentioned above, those rules currently guarantee that the Canadian independent owns the copyright, in fact for 25 years. But the streamers can ignore those federal copyright rules if they forego the subsidies.

What does the CRTC copyright rule mean when it comes to making money on a show? 

“Copyright” is just the price of admission to commercial negotiations over profit sharing that is supposed to match investment to the return on that investment. Still, whomever controls the majority of copyright holds the hammer in negotiations over splitting profits and return on investment, often described as the long term commercial exploitation of intellectual property.

It’s perhaps unknowable how much extra muscle that gives the deep pocketed Netflix than it currently flexes as an equity investor in the occasional CanCon production (for example, CBC/APTN’s North of North). 

But copyright is an undeniably important part of leverage in commercial negotiation, which is why Netflix tried so hard but unsuccessfully to persuade Parliamentarians to guarantee streamer copyright interests in Bill C-11. 

Conversely, the Canadian independents wanted Parliament to guarantee full Canadian ownership. The final text of the bill genuflected support for the independents’ interests, but provided no guarantees, handing the difficult task of balancing interests to the CRTC.

Now that the CRTC has opened the door to the streamers’ majority ownership of copyright —expect them to rush through it at pace— the question is whether the CRTC will allow Netflix and Hollywood to dictate commercial terms to Canadian independents, treating them in effect as employees on wages set by the studios. 

The Commission is hardly unaware of the problem, addressing it in this crucial paragraph:

The Commission adopts the following guiding principles in negotiations among production partners: 

Fair compensation and exploitation: Ensure that remuneration, rights, and revenues are allocated in a way that fairly reflects the financial and human contributions to the production, while ensuring Canadian producers retain significant, equitable control and benefit from long-term exploitation. 

Good-faith negotiation: Production partners negotiate in good faith.

The Commission may assess the effectiveness of these non-binding principles in the future. (emphasis added).

In other words, Netflix be nice.

More on this in a further post.

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This blog post is copyrighted by Howard Law, all rights reserved. 2025.