Bill C-10 and the future of Canadian content in broadcasting, on the internet

Maureen Parker has put in a dozen years of “prep and work and lobbying and money, and sweat and tears” in an effort to get the federal government to regulate streaming services and ensure they help fund Canadian content. And now she’s worried that goal may slip away.

Parker is the long-time executive director of the Writers Guild of Canada (WGC). (I am a former editor of Canadian Screenwriter magazine, published by the WGC, but have not done any work for the guild in over a decade.) Year after year, she’s watched as the number of Canadian shows commission by the country’s private broadcasters has dwindled.

Bill C-10, an update to the 1991 Broadcasting Act, was supposed to help fix that. Introduced by the federal government after years of study and two rounds of consultation, the act aims in part to regulate streaming services by mandating that they invest in developing Canadian shows and do more to make Canadian programming easier for viewers to find. But some critics and witnesses at the Standing Committee of Canadian Heritage, which is holding hearings on the bill, argue it represents dangerous overreach, threatening free speech, and limiting Canadians’ choice.

That has Parker and others in the creative sector worried that the bill will die. And that years of lobbying for more Canadian comedies and dramas will go down the drain.

“I’ve become increasingly concerned that there won’t be any Canadian content left,” Parker said in an interview. “We’ve been through ups and downs before, but this is a very long downward curve. And I’m very worried if we do not get this bill and we do not get this money — I really don’t know what the future will bring for Canadian screenwriters.”

Even as Canadian shows like Schitt’s Creek and Kim’s Convenience gained fans around the world, WGC figures show a dramatic decline in the number of hours of scripted content commissioned by Canada’s private broadcasters over the last several years.

According to the guild, in 2014 Bell Media commissioned a total of 146.5 hours of scripted television for 14 shows. By 2019, that had fallen to seven shows and 25.5 hours. And in 2020? Two shows, 6.5 hours. Other broadcasters show similar declines. Corus’s annual hours for scripted Canadian content fell by 88% between 2014 and 2020. Even CBC’s 2020 total — which, at 133 hours last year far surpasses any of the private broadcasters — is down by more than 24% compared to 2014.

Unable to make a living in Canada, nearly a quarter of all WGC members now live in LA, Parker said, representing a massive brain drain for the Canadian industry.

“What’s happening is we’re losing the new generation of storytellers, because they see there’s no work here and they get out of Dodge,” Parker said. “[Television writers] are usually on a three-year contract: story room, development, pilot, episodes if they’re lucky … It’s a long-term commitment for writers. So that’s why when people move, they don’t come back.”

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Producers of Canadian TV shows tend to cobble together their financing from a mix of public and private sources — everything from tax credits, to various funds, to licence fees paid by broadcasters. Over the last decade that system has changed dramatically. For one thing, fragmented audiences have led to a precipitous decline in what broadcasters are willing to pay for content.

Very roughly, you can break shows down into what are known as scripted and unscripted content (this isn’t the greatest term, since even reality shows have scripts), or comedy/drama on one side, and documentary and reality shows on the other. Scripted shows tend to cost more to produce.

On April 1, 2021 the WGC provided a written submission to the Standing Committee on Canadian Heritage, as part of the committee’s hearings on Bill C-10. The submission says:

The emergence of the Internet generally, and large foreign streaming services specifically, has created new and immense competitive pressure on traditional Canadian broadcasters. The result has been, among other things, a precipitous decline in private, English-language broadcaster licence fees that contribute to financing Canadian programming, from $456 million and 17% of financing in 2014-2015, to just $212 million and 10% in 2018-2019. This is a collapse of more than half of 2014-2015 spending. Meanwhile, the cost of producing world-class content continues to increase. At the same time, our own internal data shows that the hours of scripted production under the WGC’s jurisdiction commissioned by the major private English-language broadcasters have fallen even more dramatically.

“It’s been our position that Netflix and Amazon and other streamers are broadcasting content. That has been our basic position. There is no difference between what they are broadcasting and what the traditional broadcasters are airing,” Parker said.

Laura Mackenzie is executive director of the non-profit Screen Nova Scotia, which promotes film and television production in the province. She said for the last few years it’s been “really trying for Canadian producers to make Canadian content.” And, like Parker, she is worried about the future.

One of the mechanisms for funding Canadian production is the Canada Media Fund. The fund is largely financed by TV networks, with revenues from advertising.

“When the streamers first came into Canada with the capacity to take eyeballs away from Canadian broadcasters, that’s when ad revenue started to decline — and directly correlated to that decline was the amount of money Canadian broadcasters had to put into the Canada Media Fund … So now it’s virtually nothing,” Mackenzie said.

According to Profile 2020, the annual state-of-the-industry report from the Canadian Media Producers Association — which covers the year leading up to the start of the pandemic — overall production was up in Canada in 2019-2020.

According to the report, Nova Scotia saw $132 million in total film and TV production, up from $102 million the previous year. (This represents about one percent of the national total.)

But, in a trend seen across the board, Canadian production actually dropped, because the increases are driven by foreign location and service (FLS) production. The report defines FLS as follows:

Feature films and television programs filmed in Canada primarily by foreign producers. It also includes the visual effects (VFX) work done by Canadian VFX studios for foreign films and television programs.

For Nova Scotia, the report says FLS production rose from $26 million in 2018-19 to $40 million the following year.

But what about Canadian stories? The CMPA report shows an across-the-board drop when it comes to Canadian content.

Screen Nova Scotia promotes the province as a destination for FLS production, and Mackenzie, of course, is pleased that foreign producers are choosing to film in the province. She worries about the future of Canadian content though, and thinks C-10’s regulations on streaming services are a question of fairness.

“The one thing I would like to see is Canadian production companies finding corporate sustainability, and in order for that to happen there has to be investment in Canadian content. And if we don’t change the way online streamers are regulated — I don’t know which way it’s going to go, but it’s not moving in the right direction unless they are regulated,” Mackenzie said.

Asked if the success of a show like Schitt’s Creek is evidence that the Canadian industry is doing just fine, Mackenzie said, “We have the talent to tell incredible stories and sell them internationally. But that’s just one [show]! We need to be better. We need to be investing in Canadians to tell more stories.”

As broadcasters license fewer hours of Canadian scripted content, Parker said the streamers aren’t exactly filling the gap. She notes Netflix currently has money in exactly one scripted Canadian series in production: the 10-episode sci-fi series The Imperfects.

For Mackenzie, C-10 represents “an opportunity for a direct investment in Canadian production companies. If it’s handled carefully, it’s a wonderful opportunity for Canadian production companies.”

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The current Broadcasting Act dates from 1991 — before Netflix had even launched its DVD-by-mail service. C-10 is an attempt to update it.

But the bill has run into trouble, with critics claiming it will violate Canadians’ freedom of speech, regulate content individuals can upload to YouTube — even potentially regulate the workout apps on your phone. The bill, they say, wildly over-reaches.

One of those critics is Mark Buell, regional vice-president-North America of the non-profit Internet Society, which describes itself as ” empowering people to keep the internet a force for good: open, globally connected, secure, and trustworthy.

“I sympathize with Canadian content creators, and they do desperately need help … The internet has been incredibly disruptive to a lot of industries, including the traditional broadcasting industry, and there certainly is a need to level the playing field,” Buell said in an interview. But he is opposed to C-10 because, he said, “As it’s written, it essentially captures all online content, regardless of where it was developed in the world. You know, you think about what the bill was intended to capture — content on sites like Netflix and Facebook and Twitter and the like. They represent only a small section of all the content online. So really, the net is cast so far and wide it will essentially capture everything.”

As with much legislation, C-10 outlines a framework, and then regulations follow. Sometimes, worries about what those regulations may contain can be enough to kill or hobble a bill. For instance, earlier this year, Nova Scotia’s Biodiversity Act saw its scope limited after a scare-tactic campaign aimed at landowners warned them of regulations that could be implemented if the bill were passed in its original form.

The federal government has said it has no intention of regulating user-generated content, just platforms. Buell doesn’t buy that argument for a couple of reasons: first, because of confusion over what will constitute content that can be regulated; and second, because he doesn’t have confidence that the regulations coming into effect after the bill passes will be reasonable.

“You know, the government keeps reassuring us that Canadian internet users’ content won’t be affected by the bill. But the reality is there’s nothing in the bill as it’s written now to protect user-generated content. They keep saying, ‘well, the details will be determined by the CRTC,’ which really isn’t very reassuring,” he said. “What is a platform? How how will that be defined? These are questions that we’ve been told will be answered after the bill is passed in this year. We will make those determinations. But I don’t think it’s it’s really acceptable to punt those big decisions over to the CRTC.”

Because it was written 30 years ago, Buell said the Broadcasting Act is an outdated model for regulation. He said it was “developed through a broadcasting lens, when really what we need is is a 21st-century model.”

Asked about the notion that the Broadcasting Act is outdated, Daniel Bernhard, executive director of the Friends of Canadian Broadcasting, said, “Well, that’s the whole point of updating it.”

Bernhard is a firm believer in the importance of C-10 in funding Canadian production, and in an interview he sounds frustrated by the arguments raised against it. ” I think where we find ourselves is that Canada’s largest broadcasters [ie, streaming services] are not subject to the Broadcasting Act,” he said. “People are going to say, you don’t get it, you’re living in the past. But really, I think we just need to normalize the way we treat these companies … We just need to treat these companies like everybody else … That should be our point of departure, and that shouldn’t be a radical proposition. The people who want you to think that it’s a radical proposition, whether they know it or not, are playing into the hands of these tech companies who benefit most from the idea that regulation of any kind is anti-democratic — the people who profit from the absence of regulation.”

Heritage minister Steven Guilbeault’s handling of the bill has not helped advance its cause. Guilbeault removed a section of Bill C-10 explicitly exempting user-generated content from regulation, saying that it was redundant — opening the door to attacks. And in addition to requiring streaming services to put money into Canadian production, Bill C-10 also has discoverability requirements, which will mandate that platforms use their algorithms to make Canadian content easier to find. In an appearance on the CTV show Question Period last month, Guilbeault suggested these requirements could apply to individual users. He later backtracked. At the time, CTV reported:

The minister said more than once that while the CRTC isn’t going to be regulating everyday user’s [sic] content, the regulator could have powers related to the discoverability of online content for people whose channels have “millions of viewers,” are “generating a lot of money on social media,” and are “acting like broadcasters.”

What we want to do, this law should apply to people who are broadcasters, or act like broadcasters. So if you have a YouTube channel with millions of viewers, and you’re deriving revenues from that, then at some point the CRTC will be asked to put a threshold. But we’re talking about broadcasters here, we’re not talking about everyday citizens posting stuff on their YouTube channel,” Guilbeault said in the interview.

In the new statement, the minister says he “should have been more precise” in the words he used, as: “an individual — a person — who uses social media will never be considered as broadcasters and will not be subject to the obligations or regulations within the Broadcasting Act.

Asked if Guilbeault had mishandled the file, Parker, who noted the WGC does not receive any government funding, said, “Well, I think it’s very difficult to introduce a change midway through the clause-by-clause review, and that’s what happened … A revision introduced late in the day became a focal point for the Conservative Party. And I am concerned that this issue has created such a maelstrom that this absolutely essential legislation for the audiovisual sector will die on the table.”

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After weeks of attacks on the bill, creators have started speaking out publicly in support of it to a broader audience. The Globe and Mail recently ran a story asking artists, including Kim’s Convenience stars Sugith Varughese and Jean Yoon, why they supported C-10.

Yoon noted that Korean culture has become well-known worldwide in part because of regulation and government investment:

It seems to me that some of those attacks [on C-10] are rather disingenuous. How we consume culture now is over the internet. My concern is if regulation doesn’t bring some of that revenue back into the Canadian Media Fund, one of biggest forms of distribution is systemically under-contributing to Canadian culture. Netflix, Amazon Prime, all these different streaming services are not contributing the way that cable broadcasters have to contribute and [Canadian] networks have to contribute. It’s not a level playing field, but also it’s not sustainable if we expect to have Canadian television, Canadian news, Canadian films, Canadian music.

Any self-respecting nation should want that culture. As a Korean-Canadian, I’m seeing people get excited about Korean drama and K-pop. This wave of cultural product that’s sweeping over the world has been a government policy. The South Korean government made a long-term commitment to developing culture and celebrating Korean culture. To grow something you need water; to build cultural industries you need money.

ACTRA, the performers’ union, has also launched a petition calling on members of Parliament to support C-10.

Parker said what Canada is trying to do is not that unusual. “The EU has brought in legislation that has said all streamers must be contributing to indigenous [i.e., domestic] production. And then the EU says, it’s up to the individual state to ensure the specifics of that. France, for example, has a very strong level of contribution, and you can see how that turns out when you watch French shows on Netflix. Germany had adopted these provisions, and you can see the results as well — you can see the fruits of the legislation … Do you think Netflix is willingly making something in German? No, it’s because there’s legislation.”

Parker worries scripted Canadian television production could ultimately go the way of English Canadian feature film. (Canadian feature film production in Nova Scotia was so low in 2019-2020, the CMPA’s report lumps it together into the “Prairie Provinces and Territories” category.)

“The domestic Canadian theatrical feature sector which, absent any meaningful regulation, languishes at roughly one-tenth the size of television,” the WGC says in its submission to the Standing Committee on Canadian Heritage, “Canada having long ago ceded its cinemas to domination by American films, such that Hollywood now literally treats Canada as its own domestic theatrical market.”

“The difference between the two is that one has strong regulation — the Broadcasting Act — and the other has none.” Parker said. “You know, if you don’t build it, they won’t come. That’s just how the world works … It’s very possible that this bill will not be adopted by summer break, and if that happens and an election is called, which many people surmise it will, the bill will die on the table. And so 15 years of work is down the tubes.”

What would that mean for producers? Mackenzie said, “Maybe a new business model emerges, or maybe there is no such thing as Canadian content anymore. Maybe there is no such thing as border-restricted content, and you just sell to a streamer. I don’t know,” she said. “It’s a really tough business.”

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