Correction: A previous version of this story erroneously said the CMPA does not believe there should be a mandatory base contribution. In reality, it is asking for a mandatory base of no less than five per cent.
By Ahmad Hathout
OTTAWA – Quebecor CEO Pierre Karl Peladeau said Monday that the stonewalling of the federal government by foreign platforms on legislation that would require them to pay to host news links will likely mean that they will also scoff at any requirement for them to pay a base contribution to Canadian content.
The CRTC is proposing a mandatory base amount that online platforms are required to pay to support Canadian content under the new Broadcasting Act amended under the newly passed legislation called the Online Streaming Act. The hearing is to figure out if it should implement the base amount, how much that should be, and which CanCon funds would qualify for them.
But during the first day of the CRTC’s three-week long hearing on the matter, Quebecor expressed concern that the platforms will not comply with such a requirement considering two of the largest foreign platforms – Facebook and Google – have already expressed an unwillingness to pay to host Canadian news content under another key piece of legislation called the Online News Act.
“We are convinced that, unfortunately, foreign online services will not comply with any mandatory contribution,” Peladeau said. “It took years in Quebec before we had a service tax on online services from foreign countries and another three years for the federal government to impose that same tax in 2021. So this regulatory holiday that the foreign businesses have enjoyed for years is likely to simply continue in the future.”
Peladeau raised the problems associated with Heritage Canada’s $500-million agreement with Netflix five years ago that did not have rigid requirements on the streaming giant.
“Let’s not fall into the same trap twice,” Peladeau said.
In the event the CRTC does include the base amount, Quebecor said the amount should be 20 per cent of the previous year’s Canadian revenues.
It added that it is surprised Rogers is proposing a two per cent contribution, which it claims will not help with the media crisis in Canada.
Peladeau urged the CRTC to instead look at how to alleviate the pressure on domestic broadcasters by reducing their regulatory and financial obligations to Canadian content so they can battle the foreign streamers more expediently.
The commission said last month that it holds the preliminary view that Corus, a pure media company, should be relieved of some of its regulatory obligations because of its poor financial health.
Other broadcasters, including Quebecor, Bell and Rogers, have asked for similar treatment as advertising – 80 per cent of the online space controlled by Facebook and Google – goes through a depression.
Quebecor also repeated a call to force CBC/Radio-Canada to exit the private advertising market because private broadcasters have to compete with it for those ad dollars when it already gets funding from the federal government.
The Montreal-based company was also asked about how mandatory carriage should be financed. Currently, the broadcasters pay to carry the channels that are required to be hosted on their platforms.
Quebecor said this should now be wholly financed by the government, which will put that money in a fund. The company said it has been contributing millions of dollars to carry the channels, which it said has led to subscriber declines since 2016 (because costs are normally passed on to consumers).
The Canada Media Fund pitched a five per cent mandatory base contribution for online platforms, part of which could go to help it support content pipelines, including indigenous and minority programming.
The Canadian Media Producers Association pitched no less than five per cent of previous year’s revenues for a mandatory base contribution.
“Based on an estimated total funding contribution of 250 million dollars, we are proposing that a minimum of 50 million dollars, or 20%, be directed ‘off-the-top’ to registered funds that support Indigenous and equity-seeking communities, as well as other public policy objectives,” the CMPA said in its opening statement. “These funds include the Indigenous Screen Office Fund, the Canadian Independent Screen Fund, and the Black Screen Office Fund, as well as the Broadcasting Accessibility Fund and the Broadcasting Participation Fund (BPF),” which bankrolls public interest participation in broadcasting hearings and whose proponents have been asking for a more stable funding mechanism than relying on broadcasting mergers.
“Once this mandated off-the-top contribution has been made, 80% of the remaining funding should flow to the CMF, with the remaining 20% available to other CIPFs. Of that 20%, we are also proposing a minimum contribution of 20 million dollars to the independent CIPF operated by Telefilm Canada.”
The Motion Picture Association (Canada) said no mandatory base contribution should be required because it claims it would have deleterious impacts on the contributions they are already making to the production of Canadian content.
It say that it has been supporting the creation of Canadian content already, so such a base contribution isn’t necessary.
The MPA added that if a base contribution is required, it should allow for flexibility with which funds the money goes – including the BPF.
The CRTC also proposed that if those subject to regulation do not contribute all their obligations to the base amount, they would also be able to make contributions to a category of various programming, such as local news and training and development. A third category would be “intangible” contributions, which could involve making Canadian content more prominent and discoverable, creating a back catalogue of that content, or pitching an idea of equivalence to the regulator.
Screenshot of Quebecor CEO Pierre Karl Peladeau.
