Creative Canada leaves many questions unanswered

With details still to be revealed, producers welcome CMF changes and find cautious optimism in Netflix's investment, while some broadcasters fume over the streamer's status quo.

When news hit on Wednesday evening that Netflix would invest $500 million over five years in original productions in Canada, the industry responded with cautious optimism.

But although that optimism remains for many, Minister Joly’s speech has raised almost as many questions as it answered. Primarily, what exactly Netflix head Ted Sarandos meant when he said, “We look forward to continuing our work with Canadian talent, producers, broadcasters and other local partners to create Netflix originals in Canada for many years to come.”

“Are we talking about Canadian programming, or American shows shot in Canada with American talent in all the top creative functions? How much will be in French?” asked DGC national executive director Brian Baker in the organization’s statement.

The impact $500 million will have is unclear as well. The company claimed in its consultation-submission to the government last year to have spent hundreds of millions of dollars in Canada in 2016 across commissions, licences and service production – but in terms of original production by indies, $100 million annually may not represent much of a bump (if at all) over current levels, depending on how it’s used. Netflix declined to elaborate on the information in the government’s press release, as did Joly.

And while the government has pledged not to “tax the internet” by adding a levy to broadband services, it has ordered a review of the Broadcasting and Telecommunications Acts and requested the CRTC to provide reports on future distribution models and how they can support Canadian programming.

“With new digital players continuing to enter our country, we believe an updated regulatory system is the ultimate path to ensuring the production of diverse Canadian content for decades to come,” Reynolds Mastin, president and CEO of the CMPA said in a statement. “We’re hopeful the announced review of the Broadcasting Act, along with the pending CRTC report on the broadcasting system evolution, will eventually get us there.”

Despite the many unknowns, some in the production community called the Netflix investment a good first step. “It was clear there wasn’t the political will to [implement] a tax, but it is a way to get Netflix to contribute to the Canadian system. We still have to see what it all means about ownership of IP, but it’s great for the community and production,” Scott Garvie, chair of the CMPA and SVP legal and business affairs at Shaftesbury, told Playback Daily.

Heather Conway, EVP of English services at CBC, agreed. She says the CBC’s partnership with Netflix on series such as Alias Grace and Anne has allowed the pubcaster to create “distinctly Canadian content” with bigger budgets that has the opportunity to reach a global audience. “How the $100 million and the creation of a Netflix studio will affect that I don’t know,” she told Playback Daily. “From the perspective of the public broadcaster whose privilege it is to put Canadian on in primetime every single night, to be able to put more funds into more Canadian [content], provide a greater opportunity for high quality Canadian content, that’s a positive.”

Of course, for broadcasters that have asked the government to “level the playing field,” the Netflix announcement falls far short of expectations. Rogers, backing the move not to tax internet services, noted it spent over $660 million in Canadian content last year and $580 million the year before, with Bell Media also making note of the same.

“The Netflix contribution is a fraction of what Canadian companies like Bell Media are required to pay. Our total annual investment in Canadian content in 2017/18 is nine times the average amount that Netflix would contribute yearly,” read a statement issued to Playback by the company. “We’re asking for a level playing field for all participants that ensures maximum benefits for Canadian viewers and creators. That includes an equitable tax regime and balanced approach to investment in Canadian content.”

Quebecor president and CEO Pierre Karl Péladeau did not mince words when discussing the Netflix deal. “Make no mistake: the government’s approach will lead, logically and inevitably, to domination of Canada’s broadcasting ecosystem by U.S. giants. The public broadcaster will be the only remaining domestic player, as the private broadcasters’ manoeuvring room will have been wiped out. Ultimately, local producers, artists, cultural workers and audiences will be the losers,” he said in a statement.

One area of the Creative Canada policy that has received widespread support is the announcement that the government will increase its funding to the CMF. Vince Commisso, president and CEO of Toronto’s 9 Story, told Playback Daily he’s particularly happy with the government’s announcement that it will work with the CMF to support project development.

“As a creator of content, you lose most of the money you spend in that area,” he said, which in turn limits the amount of content that is ultimately created. Again, specifics – including whether the CMF funding will be tethered to domestic distribution – were in short supply, but Commisso said any funding toward development is a “positive way forward.”

Likewise, the government’s $125 million commitment over five years to support Canada’s Creative Export Strategy was widely commended. Details of that strategy will be unveiled over the coming year, according to the government. Central to the export strategy is the creation of the Creative Industries Council, led by the Minister of Canadian Heritage and the Minister of Innovation, Science and Economic Development, set to “focus on concrete objectives to access new markets and coordinate Canada’s international presence.”

CBC has come out particularly in favour of the announcement. “We believe this collective approach will leverage the power of our culture and creative sectors to strengthen Canada’s global culture brand,” read a statement from the pubcaster.

Of Canada’s broadcasters, CBC faced the greatest potential for disruption in the unveiling of the review, with an ad-free business model proposed. That did not come to pass, but the government did pledge to review the CBC’s mandate, which Conway says the pubcaster has been successfully interpreting in an increasingly digital environment. But a review of the Broadcasting Act to address the new reality will be most welcome, she noted. “All broadcasters are living with an Act that does not reflect the technology and the tools and the disruption that the industry is confronting.”