Liberals highlight film funding, digital tax in election platform

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If re-elected, the Liberal Party said it will nearly double Telefilm's annual budget and take "appropriate measures" to ensure digital players contribute towards creating Cancon.

Justin Trudeau’s Liberal Party on Sunday said it would look to nearly double Telefilm’s annual budget and impose taxes on the incomes of digital companies operating in Canada if the party is re-elected next month.

In the 85-page platform document, titled “Forward: A Real Plan for the Middle Class,” the Liberals vowed to “continue to support Canadian film by increasing annual funding for Telefilm Canada by nearly 50 per cent a year.”

Telefilm’s annual funding has increased steadily over the past five years, from $90.4 million in 2014/15 to $108.7 million in 2018/19. Based on the total budget for Telefilm in recent years, the proposed increase could take the funder’s annual budget to somewhere between $150 million to $200 million.

In its own yearly report, released over the summer, Telefilm said its annual budget for 2019/20 will be around $106.3 million.

The increase in funding would be a welcome addition for the filmmaking community in Canada, which has sought new sources of financing as the business model for independent features becomes increasingly strained. A report released last year, “Focus on Features: The Future of Filmmaking in Ontario,” said “Ontario does not have a comprehensive feature film policy and its most critical fundamental resource – investment in development and production of feature films – has stagnated significantly over the last 12 years (and was non-existent for the 10 years prior).”

Meanwhile, in Quebec, Canadian Heritage committed an additional $7.5 million to French-language productions for the 2019/20 fiscal year after Minister of Canadian Heritage and Multiculturalism Pablo Rodriguez was informed that the 2019/20 production program budget was almost fully allocated.

The Liberal Party also doubled down on its apparent plans to begin regulating foreign-based internet services. “We will make sure that multinational tech giants pay corporate tax on the revenue they generate in Canada,” read the platform proposal, which added that the Liberal Party will work to achieve the standard set by the Organisation for Economic Co-operation and Development (OECD) to “ensure that international digital corporations whose products are consumed in Canada collect and remit the same level of sales taxation as Canadian digital corporations.” The taxes would apply to digital companies that make more than $1 billion in global revenues and $40 million in Canadian revenues. Under the proposed taxation measure – which would generate an additional $540 million in 2020/21 and increase to around $730 million by 2023/24 – digital companies would pay 3% tax on revenues generated through sales of online advertising and user data.

In addition, the party reiterated its intent to bring foreign-based OTT services under Canadian regulation. “We will move forward, in our first year, with legislation that will take appropriate measures to ensure that all content providers – including internet giants – offer meaningful levels of Canadian content in their catalogues, contribute to the creation of Canadian content in both official languages, and promote this content and make it easily accessible on their platforms.”

The language used in the platform echoes comments made earlier in the year by Rodriguez, who in July said Heritage will take “appropriate measures” to ensure that “all players, including the web giants” contribute to the creation and promotion of Cancon. At the time, Rodriguez said Heritage would act swiftly after receiving the recommendations report for the Broadcasting and Telecommunications Legislative Review (BTLR), which is due in January. Of course, if the Liberals do not win the upcoming election, the review of the Broadcasting and Telecommunications Acts will be overseen by a different political party. The Conservative Party has made its stance known on a number of fronts, though little is known at this time about its plans for Canada’s cultural industries.

Elsewhere in the platform, the Liberal Party said it will strengthen the regional mandate of CBC/Radio-Canada so that local stations can broadcast more local news. It said it will also require CBC/Radio-Canada to open up its digital platform so that journalism start-ups and community newspapers can access affordable technology to develop and distribute local content.

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