How do you go about supporting the creation and production of Canadian content in the digital age?
That’s one of the major questions facing a federal legislative review panel whose findings will set the course for an overhaul of Canada’s digital and regulatory laws.
The panel released a long-awaited interim “What We Heard” report Wednesday disclosing the key themes and issues that will shape their recommendations.
Stable funding to create and tell Canadian stories in an age where foreign online platforms are flooding the market with a record amount of content is one of the major themes in the report.
“Funding for content is a major issue,” the panel, headed by former Telus executive Janet Yale, said in the report.
“This could be achieved through a licensing system, binding agreements or regulations with administrative monetary policies,” the report said.
Despite pushback from foreign online platforms that said they were already investing and contributing to the creative ecosystem, Yale said “the majority insisted on binding measures to ensure funding remains available for Canadian content in the face of market failures.”
Yale’s 57-page interim report updates what the panel has heard from stakeholders. Final recommendations are expected in January.
As such, the report is really a summary of findings. But still, it gives clues to what is top of mind with the legislative review panel, and where they may be going with their ultimate recommendations to government. That includes the issue of maintaining local news content in Canada.
“Many interested parties commented on the devastating effect that the transfer of advertising revenue to digital platforms has had on the Canadian media environment,” said the report. “This is particularly on the business models of print media, private broadcasters, and to a lesser extent, the public broadcaster.”
The revenue migration has affected the ability of legacy publishers and broadcasters to produce local content.
“They emphasized the survival of local media to the vitality of democratic debate, especially in an era of media consolidation and misinformation.”
The CBC was also singled out by interested parties who recognized the “fundamental” role the public broadcaster played in Canadian culture.
More stable funding mechanisms, and even increased funding for the CBC to levels comparable to funding of public broadcasters in other countries has been suggested as a solution. However, the private sector media said the CBC should not be in competition with them, especially for advertising revenue. That was true also for Indigenous media, said the report.
“As the findings show, we now have broad agreement in the sector that short-term measures are needed to ensure foreign digital services are doing their part,” said Directors Guild of Canada executive director Dave Forget. “We call on both the government and the commission to act.”
The panel also acknowledged that “almost all interested parties” had advocated that there should be equity in the application of sales taxes between Canadian and foreign companies.
“They submitted this would put an end to the competitive disadvantage currently faced by Canadian companies, which also have obligations with respect to the creation and distribution of Canadian content.”
But Yale said the so called “Netflix tax” requiring online digital platforms to collect sales taxes similar to other Canadian companies was outside the scope of the “communications legislative framework.”
Former heritage minister Mélanie Joly had also said earlier that it was up to the finance ministry to enforce the tax regulations.
Looking at the issue of Canadian content in the digital age is not the only mandate of the committee.
Reducing barriers to telecommunications networks, revamping the regulatory framework and looking at the rights of digital consumers are part of the framework.
The last issue is particularly charged, with an election on the horizon.
“Digital platforms have considerable power regarding what information is presented to Canadians as news and fact,” said the report. “This can lead to the removal of credible sources of news and the rapid dissemination of misinformation.”
Some suggestions the panel is looking at include more regulation on digital platforms and improving digital literacy to combat fake news.
Privacy is another issue with consumers in danger of “having their personal information used in ways that may cause personal or collective harm.”
Placing foreign digital platforms under the authority of regulators such as the Canadian Radio-television and Telecommunications Commission, the privacy commissioner or the competition bureau are some ways the panel are looking at ensuring regulation.
Network security and reliability are also part of the discussion. Investments are needed to address security risks and to defend against cyber attacks.
“Critical infrastructure and systems are vulnerable to threats carried over telecommunications networks,” said the report.
Some of the recommendations will come too late for the ongoing issues facing the Trudeau government. The Liberals have said they will decide before the election whether to allow Chinese equipment maker Huawei to supply equipment for Canada’s new cellular networks amid concerns of spying.
Not everyone was happy with the interim report. Watchdog group Friends of Canadian Broadcasting called the release a “non-event,” saying the Liberal government had taken too long to address overhauling digital services.
“Every day that passes is another day for Netflix to profit and steal market share from Canadian competitors, thanks to inexplicable inaction from Canadian politicians and regulators,” said Daniel Bernhard, spokesperson for the group.
Reshaping the nation’s broadcasting and telecommunications laws was never going to be an easy task. But given the level of disruption in the industry this will not be a short-term fix.
The panel read through 2,085 formal submissions and letters, including holding 12 conferences across Canada.
“We must think not about what will serve Canada and Canadians well for the next few years, but for the next full generation at least,” Yale said in a speech at the Canadian Telecom Summit in Mississauga last month.
“Our horizon cannot be restrained to the next election or the next rollout of new technologies,” she said. “It must be cast further ahead.”
Tony Wong is the Star’s technology reporter covering big tech, disinformation and regulation. Follow him on Twitter: @tonydwong