(1/2) The current definition of Canadian content, explained
Our screen-based sector is at a crossroads—and we need to talk about Canadian content. Over the next several months, the CMF wants to spark a conversation about the redefinition of CanCon: What is at stake? Why does it matter? What do we want the future of the industry to look like? This two-part article is the second of a Now & Next series that will provide a platform for diverse voices to weigh in on Canadian content, authenticity, ownership, business and funding models, and more.
Read part one below!
The Canada Media Fund (CMF) is seeking to spark a meaningful and constructive conversation around a modernized definition of Canadian content. We recognize that with monumental changes on the horizon, rethinking what constitutes audiovisual “Canadian content” is one of the most important issues facing the screen-based production and broadcasting sector.
The CMF’s role in this exploration is not to define CanCon for the industry. Rather, we want to hear from you. We want to create a forum that sparks ideas and discussions on how the definition can be improved to create a brighter future for Canadian content, so it can reach new audiences at home and around the world. And it’s critical that we make space for new collaborators, new communities, new perspectives—we want to ensure that all voices are included.
But to know where we are going, we must understand where the current definition came from and where we are now. This two-part explainer outlines the history and context of the current definition of Canadian content, which may at times seem overly technical and challenging to understand. Our goal is to break down barriers to ensure that everyone has the same information so we can all meaningfully participate in the conversation.
|Interspersed throughout this piece, you will also find sparks for thought. These breakout sections and questions will prompt you to think about what in the current definition of Canadian content should be changed and what should stay the same. Some of the questions and themes will also be explored in future Now & Next articles.
Let’s get started with a bit of history.
How did Canadian content come to be?
Government measures have long existed to support the production of Canadian content, dating back to the creation of the Canadian Broadcasting Corporation (CBC) in 1936 and the National Film Board of Canada (NFB) in 1939. Before the advent of television, these institutions demonstrated the power and importance of Canadians telling their own stories. In 1949, in response to heightened recognition that Canadian culture must be preserved, nurtured, and promoted, the federal government appointed the Royal Commission on National Development in the Arts, Letters and Sciences—more commonly known as the Massey Commission—to develop a new cultural policy framework for Canada.
Tabled in 1952, the landmark final report concluded that with “vast distances, scattered populations” and “the very present danger of permanent dependence” on American culture, Canada needed cultural policies that strengthened social cohesion and a sense of nationhood. Notably, the report placed an emphasis on the linguistic and cultural duality between French Canada and English Canada. The principles laid out in the Massey Report formed the basis for public investment in today’s Canadian arts and culture, including visual and performing arts, museums, publishing, and, of course, broadcasting and media production.
|In light of the Truth and Reconciliation of Canada’s treatment of Indigenous peoples and increased social reckoning on racial issues in the last few years, the Massey Report has been scrutinized for its colonialist and Eurocentric views on Canadian culture. Importantly, Indigenous peoples and other equity-seeking communities were altogether ignored in the report. By putting parameters around government supported “official culture” based on an arguably Eurocentric definition, the report delegitimized “other” cultures in Canada. Especially considering Bill C-11’s focus on elevating underrepresented voices, including those from Indigenous, Black, and other racialized communities, how can the definition of Canadian content evolve to break down barriers and be more inclusive and representative? How can it foster and support equity- and sovereignty-seeking communities to tell, own, and monetize their own stories? How can a modernized definition of Canadian content ensure that all audiences have access to content that reflects the diversity of Canada?
To support implementing these investments, several public institutions were put in place, including Library and Archives Canada in 1953, the Canada Council for the Arts in 1957, Telefilm Canada (formerly known as the Canadian Film Development Corporation) in 1967 and the Canadian Radio-television and Telecommunications Commission (CRTC) in 1976.
In 1974, the Canadian Audiovisual Certification Office (CAVCO) was established for the purpose of qualitatively defining a Canadian film so that the Canada Revenue Agency (CRA) would accept them as eligible to a tax shelter (the processor to the tax credit system we know today). In consultation with the industry, CAVCO developed a 10-point scale to determine if a project should qualify. The CRTC adopted a points test and definition in 1984.
What is the purpose of Canadian content?
Although it stems from cultural policy, Canadian content does not strictly exist to meet cultural goals; broadcasting and production have tremendous industrial and economic benefits. Canada’s cultural policies have created and nurtured a thriving domestic industry that, along with favourable economic incentives, has nurtured the growth of foreign location and service production to astonishing levels. According to Profile 2021, Canada’s media production sector generates over 217,000 jobs annually, 82,000 of which are generated from Canadian content production alone.
These jobs, largely occupied by Canadians, generate income tax revenue for all levels of government and billions in production volume annually. This translates to a major economic impact for Canada—over $11 billion in GDP in 2020-2021 alone.
|As you read through the elements of the definition below, it may prove useful to consider how each existing requirement is linked to cultural, industrial, and economic benefits. What is required in a modernized Canadian content definition to ensure that the broadcasting and production sectors continue to contribute to Canada’s economy? How has the idea of cultural benefit evolved? What must be considered to ensure that the industry contributes and/or grows its cultural, industrial, and economic benefit to Canada?
Who determines what qualifies as Canadian content?
In the current system, there are three government bodies with the power to certify Canadian content, each serving distinct and complementary purposes. In addition, several other agencies, funds, and other stakeholders use these definitions or build on these definitions as part of the basis for their policies and programs.
|As discussed below, these three certification bodies have distinct roles and reasons to certify content, but would the industry benefit from a more centralized approach? What problems would this solve and what effect would it have?
As mentioned earlier, CAVCO certifies content for access to tax credits. It is an arm of the Department of Canadian Heritage. The Canadian Film or Video Production Tax Credit (CPTC) is paid to an eligible Canadian owned and controlled company that produces eligible content. The CPTC supports linear, non-interactive film or video production. This can include 360/virtual reality (VR) productions, but usually does not include websites, video games, and apps. Productions that do not qualify as Canadian, such as foreign and service productions, or Canadian productions that choose not to access the CPTC, may instead qualify for the Film or Video Production Services Tax Credit (PSTC), which offers a lower incentive than the CPTC.
|Some provinces also offer film and television tax credits similar to the CPTC to encourage productions in their respective jurisdictions. These provincial tax credit definitions are generally harmonized with CPTC. If changes are made to the CAVCO definition, it is important to consider how that might affect these provincial tax credits.
The CRTC, Canada’s independent broadcasting and telecommunications regulator, also has an important role to play in certifying Canadian content. While CAVCO exists to certify Canadian content to access federal tax credits, the CRTC’s certification system mainly exists as a way for Canadian broadcasters to register the programs they broadcast to meet their regulatory obligations and to ensure that Canadians have access to Canadian stories. While both CAVCO and CRTC use the same “points system” (more on that below), their definitions differ in other ways. Additionally, not all projects are eligible for tax credits for a variety of reasons and so programs may apply to either or both CAVCO and the CRTC for certification.
Finally, Canada’s national film fund, Telefilm Canada, recommends certifying international treaty coproductions for certification by CAVCO. Canada has coproduction treaty agreements with close to 60 countries around the world. The government negotiates these agreements with other countries as a tool for the partners to pool their creative, financial, and technical resources. To be certified in Canada, the producer must apply to Telefilm with a signed coproduction agreement with a foreign producer from a treaty-signatory country. Each country has a designated body (in Canada, Telefilm) that reviews the project and the coproduction structure for approval. Generally, once the project is certified, it is recognized as “national content” in respective each country. A treaty coproduction may be eligible for the CPTC (which is administered by CAVCO, as explained above).
|Are there important considerations to ensure an appropriate level of “Canadian-ness” in coproductions? How can a modernized definition of Canadian content enable coproduction opportunities? Notably, some equity- and sovereignty-seeking communities have expressed systemic challenges with the current treaty coproduction model. For instance, many Indigenous nations are bisected by international borders. As Canada does not have a coproduction agreement with the United States, cross-border production within these communities would generally not count as Canadian. There are also many examples of international coproductions by diasporic communities that do not qualify because the partner country does not have a treaty agreement with Canada. The countries that do not have a treaty agreement with Canada tend to be more economically disadvantaged.
Content labeled as “Canadian” but not certified
At the moment, streaming services like Netflix, Prime Video, Disney+, and Apple TV+ are not subject to the same requirements as traditional broadcasters, including Canadian content obligations. Yet, many of these services both acquire and commission Canadian content. Many include dedicated “Canadian” sections that feature a variety of Canadian content that is certified by one or more of the bodies discussed above. However, these Canadian collections also include content that is not certified, and which instead falls under the service’s own definition. This can include content that was shot in Canada, involved a Canadian production company, has a Canadian setting or elements, or includes notable Canadian talent in front or behind the camera.
|Many of the most prominent foreign streaming services operating in Canada have called for a broader definition of Canadian content that presumably includes much of the non-certified content in their Canadian collections. Should the definition be broadened? What effect would this have? We’ll be exploring these questions in more detail in part two.
Check out part two of our CanCon explainer here.
Do you have a burning opinion and want to lend your voice to a future piece? Get in touch at [email protected]. You can also join the conversation on social media using #CanConDef.