The Directors Guild of Canada (DGC) says there is a “pressing need” for interim measures to ensure foreign-based online programming services are paying into the domestic system.

In its submission to government as part of the Broadcast and Telecommunications Acts, which is set to finalize in 2020, the guild argues the CRTC should be given “express powers” to implement a number of changes, including purview to force online players to contribute toward Cancon.

“The DGC urges the Commission to not wait for new legislation but act now to introduce interim measures that will impose adequate financial contributions on foreign online OTT services (SVOD, TVOD and AVOD) for the creation of Canadian content,” the guild’s submission reads.

Elsewhere, it called for an expansion of the CRTC’s role in order to: impose contribution requirements on internet service providers (ISPs) and wireless service provider (WSPs); impose spending requirements, financial contributions, and exhibition requirements “regardless of the means of regulation”; introduce monetary penalties for non-compliance with the Broadcasting Act, as opposed to the current penalties of licence revocation or criminal provisions; and broaden its jurisdiction to collect data and inquire about data from all companies operating in Canada.

The ability for the commission to gather data from digital online companies was also a crucial argument in both the CBC and CRTC’s submissions to the review panel. The CRTC should be able to collect consumer viewing data, revenue data, subscriber numbers and download data, argued the DGC. “This data collection process will inform the CRTC of the industry context and evolution, and assist the CRTC in making informed policy decisions,” said the DGC.

The DGC also suggested that the Broadcasting Act be renamed the Audiovisual Media (Services) Act in order to address the “exceptions and grey areas” that have arisen in the age of the internet. “The new Act should include all existing and future online players that participate in the system and respond appropriately to the challenges created by the digital transformation of the sector.”

For its part, the Writers Guild of Canada (WGC) suggested changes to the literature found in the current Broadcasting Act, especially in relation to Cancon. “While the objectives of the current Broadcasting Act generally remain appropriate, the WGC recommends that, as they pertain to the support of Canadian programming in particular, they be reconceptualized and redrafted to strengthen their importance and emphasis, as a clear signal to the CRTC that the status quo has not been sufficient,” read the submission.

The WGC also warned that the Broadcasting Act should not be amended based on the upward trajectory of a handful of multi-national companies operating in Canada. “The simple fact is that we do not know exactly what is driving the current production boom in Canada, but to the extent that it is driven by OTT services like Netflix, then it is only sustainable to the extent that Netflix or others decide to sustain it,” said the WGC.

“Netflix is funding nearly all of its content production through debt. Its business model is clearly predicated on global expansion and growing market share. This phase of its development will not last forever, and it remains to be seen what its business priorities will be once the OTT marketplace becomes saturated and it must show actual profits.”

With this in mind, the guild said new legislation should not focus too heavily on today’s market, but rather focus on creating a flexible mandate that can adapt to reflect future industry shifts. “We simply believe that it is not Netflix’s job to set and sustain Canadian cultural policy outcomes. It is the Canadian government’s job to do so, and the government ensures this is done through legislation and regulation. If Netflix or other services contributing to Canadian content production continue to do so, then regulation simply reflects what they would have done anyway, and is therefore no burden.”

Noting that it also believes the global English-language content boom will slow in the coming years, ACTRA also expressed concern over Netflix’s investment pledge in relation to the Creative Canada Policy Framework. “Despite the denials, it is clear that, in return for committing to invest $500 million in production in Canada over the next five years (which they were likely to have spent in any case), Netflix will be allowed to continue to operate outside the Canadian tax and regulatory system,” said its submission. According to ACTRA, if a blended GST/HST rate of 11% and a 5% contribution rate to a Canadian production fund were applied to Netflix, the streamer would have paid $113 million to the Canadian government and to production funds in 2016 alone.

The actors union also said it is concerned with what comes after Netflix’s five-year agreement with the Canadian government comes to an end. “If we are correct that the production boom will come to an end, there will be no incentive for Netflix to negotiate any further agreements and it will be more difficult for a future government to impose regulations on a service that will have operated unfettered for a decade.”

Elsewhere, the WGC also recommended that the role of writers and content creators be emphasized in the Broadcasting Act, after the issue came under spotlight this past fall when the WGC and CMPA went before Standing Committee on Canadian Heritage as part of the government’s ongoing review of the Copyright Act. “WGC believes that strengthening the language regarding creators… will send a message to the CRTC, as the regulator that will presumably administer the new legislation, and others, that Canadian creators, screenwriters in particular, must be a core and essential element in the Canadian system.”

The directors guild also drew attention to this in its submission: “While it is important that intellectual property be retained and exploited by Canadians, we believe that the most fundamental goal is to recognize the voices of the creators not just the production companies or other entities that might own the production rights.”

In other news, the website for the legislative reviews of the Acts was updated on Monday to say that more than 2,000 written submissions were received during the consultation process. The submissions will form the backbone of the panel’s “What We’ve Heard Report,” which will be published no later than June 30. All the written submissions that were received will also be made public at that time.

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