The federal government has increased the level of financial relief to the broadcasting sector as part of its $100-billion pandemic recovery package, announced Monday, however the budgetary plan makes no mention of an extension to the $50-million insurance fund, which is due to expire in March.

The government said it will provide up to $50 million in relief funding to television and radio broadcasters by waiving broadcasting Part II licence fees in 2020-21. The announcement comes eight months after the government pledged to waive Part I license fees, which it said at the time would give $30 million in relief to the sector as it grapples with a sharp decline in advertising revenues.

The Canadian Association of Broadcasters (CAB) previously estimated that dozens of TV and radio stations could close over the next three years due to the economic climate, resulting in thousands of job losses and more than $1 billion in revenue losses. The report, titled The Crisis in Canadian Media and the Future of Local Broadcasting, also indicated the private local conventional TV reporting units in Canada will fall from 95 to between 50 and 60 over the next three years.

Meanwhile, the prospect of extending the $50 million Short-Term Compensation Fund – earmarked for projects without insurance for COVID-19-related stoppages – has been raised on a number of occasions, with some industry insiders suggesting the fund is not large enough, and that the March 31 expiration date is too soon.

Thus far around 90 projects have applied to the fund, according to data provided by Telefilm to Playback Daily last week. To date, none of those projects have been forced to close down on a temporary or permanent basis.

While the government’s $100-billion economic stimulus package does reference the insurance fund, it makes no mention of a potential extension during fiscal 2021.

“We had hoped the Fall Economic Update would include an extension to the Short Term Compensation Fund insurance program, which the government launched earlier this fall. The fund is playing an essential role in allowing productions to move forward in the absence of traditional insurance,” said Andrew Addison, CMPA’s VP of communications, marketing and membership.

“Unfortunately, it’s set to expire on March 31, which means that the fund actually becomes unusable for many productions well before that date. For example, a television series that starts shooting in February but doesn’t wrap until April can’t run the risk of having no insurance for the last month of photography. So not only do we need an extension, we need it be announced quickly, so that productions that were planning to commence shooting in the first three months of 2021 can proceed.”

For his part, Minister of Canadian Heritage Steven Guilbeault has said that his department is keeping an eye on the fund and would consider expanding it – both in terms of amount and duration – if needed.

Government moving ahead with plan to tax digital platforms

Elsewhere, the economic recovery plan included a proposal to move ahead with requiring foreign-based digital services (including online video services and online music services) to collect and remit GST/HST on their taxable sales to Canadian consumers.

The proposal, which is in line with the recommendations of the Organisation for Economic Co-operation and Development (OECD), is targeted to go into effect on July 1, 2021, which the government said would give enough time for it to consult with stakeholders on the proposed changes. The government estimates that the proposed measure will increase federal revenues by $1.2 billion over 5 years, starting in 2021-22.

The announcement from the Canadian government comes as a number of countries move to impose taxes on digital service. Earlier this week it was reported in The Guardian that Netflix will start to pay tax on revenues generated in the U.K. Last week, the French government said it will start requiring tech companies to pay a digital services tax, which would apply to companies with global revenue of more than €750 million (around $1.17 billion).

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