Front Burner - Is Canadian content a casualty of the 'streaming wars'?

Episode Date: November 14, 2019

Disney Plus is the latest streaming service on the block, with a library stretching from those classic animated movies from your childhood, to new Marvel blockbusters. It joins Apple TV, Netflix and Amazon Prime. But this ever-growing number of digital companies don't play by the same set of rules as traditional broadcasters. They are largely tax exempt, and they don't have to follow Canadian content regulations. Today on Front Burner, Jayme talks to Tina Hassannia and John Semley, two culture critics who disagree on what streaming services mean for the home-grown screen industry.

In the Dragon's Den, a simple pitch can lead to a life-changing connection. Watch new episodes of Dragon's Den free on CBC Gem. Brought to you in part by National Angel Capital Organization, empowering Canada's entrepreneurs through angel investment and industry connections. This is a CBC Podcast. Hello, I'm Jamie Poisson. So how many streaming services are you subscribing to right now? I'm subscribing to five. Five! It's kind of nuts and sort of embarrassing now that I think about it.

I bring this up because Disney Plus just launched here in Canada. This is a streaming service that essentially is this giant fire hose pumping Disney and Marvel content into your living room. It comes right on the heels of Apple Plus. And in so many ways, these new media outlets play by a different set of rules. They're largely tax exempt, and they don't have to follow Canadian content regulations. Today, is CanCon outdated? Or will Canadian film and TV be left behind as more people cut the cord?

I'm talking to John Semley and Tina Hassania, two culture critics. This is FrontBurner. Culture Critics. This is FrontBurner. John, Tina, pleasure to have you here. Great to be here. Hello. Great. It is so nice to have you both here. So, John, I just want to make sure that we're all on the same page here. Can you go over for me what rules are traditional broadcasters like Rogers and Bell subjected to that these streaming services like Netflix, Amazon Prime, now Disney Plus and Apple Plus are not. Well, beyond the fact that they have to pay corporate income taxes in Canada,

which every corporation does, they're also expected to donate a percentage of money annually to certain funds that go back into Canadian film and TV production. I think the largest of which is the CMF, the Canadian Media Fund. And that sort of rolls over, creates more TV shows and more films. And as it stands, Netflix, we shouldn't say just Netflix, but Netflix and Amazon Prime and the new kid on the block, Disney Plus, Apple TV, they are under no obligation to do so. And so why is that the case, Tina? Why do they not have to give a certain percentage of their revenue back to producing Canadian content? Why do they not have to pay sales tax, for example?

Well, they're not really considered like a broadcaster. They are considered a, you know, web service or a web giant. So these companies are American, they are under no obligation to partake in the specific CRTC rules that would, you know, have them participating and contributing to, you know, creating and supporting CanCon. And on top of that, you know, we're not doing any sales tax either, which would go to the consumer. Right. And okay, this is controversial, right? Because people have been saying for years that these platforms have to pay up in some way and that they should be putting their revenue back into Canadian content. And I want to get to that in a moment because I know it's the most controversial.

But the least controversial is that there should be some sort of sales tax slapped onto Netflix, Disney+, Amazon Prime. And, John, why has Ottawa been so reticent to do that? I know Saskatchewan and Quebec have. Yeah, I'm not exactly sure. I mean, I think it's only fair and equitable that any company that operates here has to have that sales tax applied to it, which, of course, we as consumers would have to remit to the company who in turn remits it back to the government. That is the least controversial element here. Even I am in favor of that.

Yeah. And I mean, really, like we would pay this sales tax. That's right. The government. I mean, like Netflix isn't doing us any favors here. Like we would just have to pay more money. I think the reticence is precisely that. I mean, especially during the election. Like what's the Churchill line where it's like advocating for a new tax during an election is like standing in a bucket and trying to lift yourself up by the handle. I mean, nobody is going to run on a Netflix tax. Stephen Harper famously was like, I love watching Breaking Bad. I will never charge you a Netflix tax.

Something you might not know about me is that I love movies and TV shows. One of my all-time favorites is Breaking Bad. It's even available on some online streaming services if you've never seen it. But I'm running for prime minister. So why am I talking to you about TV shows? Can you just imagine Stephen Harper watching Breaking Bad? I can't imagine Stephen Harper enjoying anything that's not a book of hockey statistics. But I think that consumers automatically hear, oh, taxes, taxes, taxes, taxes.

But the prices are always going up on these services anyway. So it's not like they're keeping it at some flat level. Yeah, Netflix has hiked its sub like three times the last couple of years. And I mean, with Crave, they are, you know, there is a sales tax. So just to even make it equitable between like a Canadian streaming service versus everyone else, I think that it's only fair. Right. I know that is one of the arguments that it's hard for everybody to compete when they have different roles. Okay. Let's talk about the really controversial thing, which is the CanCon requirements, what John was talking about earlier.

Rogers and Bell are required to take a percentage of their revenue and put it into Canadian content. Like how much of their revenue? I believe it is a 30% contribution requirement. I believe it is a 30% contribution requirement. And basically what that would do is that it would make online video services, online streaming services and broadcasters as the same kind of company simply because they are both broadcasting entertainment is it's a bit more tricky. With broadcasters, they're already getting quite a few benefits as a result of paying this 30 percent. You know, they get things like must carry requirements, copyright retransmission rules, simultaneous substitution benefits and all kinds of other tax related. Can we talk about simultaneous substitution actually? Do we want to talk about simultaneous substitution? I think it's one of

the clearest examples of the weird benefits that Canadian broadcasters get. So it used to be like, okay, you're watching the Super Bowl. If you don't care about sports, why do people watch the Super Bowl? It's for the commercials. Then you watch the Super Bowl feed on Canadian TV because a lot of American shows in Canada get switched to a Canadian feed automatically. Like when you watch The View and there'll be like a CTV logo like madded over the bottom corner. So anyways, you're watching the Super Bowl in Canada. You don't get to see those Doritos commercials. You're seeing like a commercial for Active Green and Ross or the Cashman Russell Oliver or something like that. commercial for Active Green and Ross or The Cashman Russell Oliver or something like that.

So this means that a lot of Canadian broadcasters get to show the same programming on Canadian feeds, and it also benefits Canadian advertisers and things like that. And it's not even original programming. I mean, a lot of the time, like I say, it's a US feed of the Big Bang Theory that just has Canadian commercials running in between. So how would this be applicable, really, to Netflix? I mean, there's no advertising. So like, so again, you can't really compare a Canadian broadcaster to something like Netflix. You're saying this is like apples and oranges. I want to put an argument to you both that Jerry Diaz, head of Unifor, and Daniel Bernhardt, the head of Friends of Canadian Broadcasting, wrote this week. They said, like, if you just take Netflix alone

and you put these requirements on them for Canadian content, that would result in $300 million a year invested into Canadian film and television. So what are your thoughts on that? That's a big amount of money that could go to producing, you know, Canadian productions either produced here. They could, you know, my understanding is have, you know, a bunch of Canadian employees and could bring jobs to this country, but they could also be Canadian stories themselves, right? No?

Well, let me say there is a sort of, with the idea of Canadian staffing and creating jobs, there is, as Ronald Reagan would say, a trickle-down effect here. I mean, Netflix, whether or not they have an office in Canada, they fund production companies that make TV shows in Canada. Those companies in turn pay taxes. Those employees in turn pay taxes. They employ publicists to go out and promote The Irishman and My Name is Dolomite and their original productions. Welcome to the world premiere of Dolomite is My Name. And they not just brought the movie here, but there's a whole Dolomite exhibit that's on right now, the TIFF Bell Lightbox. And John, we should just say that you're working on a production

that is going to probably be on Netflix at some point. Yes, Netflix and Bell Canada, the best of both worlds. So it's not like they're totally not contributing in the grand structure to the Canadian economy. The idea is that they're not paying a sort of top corporate income tax. Now, the larger issue I have with this is that with a lot of American companies who are not quite as tax friendly as us in Canada, this can create big problems. I mean, France tried to levy a 3% tax on Internet companies such as Facebook and Google, and it's already sort of turning into a tariff war where they're being investigated by trade officials in the United States.

I've always liked American wines better than French wines, even though I don't drink wine. I just like the way they look. So France did that. I told him, I said, don't do it because if you do it, I'm going to tax your wine. And you see this as a tax, right? The idea that you have to take 30% of your revenue and put it back into Canadian content. Like, that's what we're talking about here. I mean, it is a tax.

I mean, regardless of, yeah, like what it's going to be spent on. The fact of the matter is that it's going to probably create some kind of trade war or at least more tension between Canada and the U.S. And with the present administration in the U.S., I don't think that's really a good idea. What about the argument, though, that it would create Canadian shows and employ Canadians? Sure. And that maybe these like big American companies are getting a free ride. I mean, OK, so yes, about a free ride. However, I do think that this whole idea of like cultural policy or, you know, investing

money into the Canadian entertainment industry is so much more thorny and complicated than simply a matter of money. If we're focusing on the amount of money alone, that's not going to solve the issues that we have in our industry here at home. The industry is already very, very well funded. I mean, I think it was $9 billion most recently, an increase of 5.9%. You know, these numbers are staggering. And yet, despite these numbers, how many of us are actually watching shows like Schitt's Creek? Children, keep an eye on these bags. Apparently in hell there's no bell man. Or,

you know, more independent movies like Werewolf. Unfortunately, you can't start a methanol program elsewhere while you still have a balance with us. As Tina said, you know, we're at the value of the CanCon industry is exceeds eight billion dollars. On TV, you mentioned Schitt's Creek. There's Winona Earp, Kim's Convenience, Orphan Black, Working Moms, and with an E, Baroness Von Sketch. And these are all shows that are discoverable on Netflix. I think a lot of people encounter these shows on Netflix. So it does have a great benefit to the industry. And also, we should say of Netflix specifically, they made this kind of side deal where it's like, we'll put $500 million into the production of Canadian film and TV.

Joining me now from Montreal is Heritage Minister, Melanie Joly. What we've been able to agree with on Netflix is making sure that they create a first Canadian production house. It's actually to do Canadian productions. Canadian productions. And so the idea is to support our writers, support our producers, support our Canadian stories. Now, really, they're just kind of paying themselves to produce content for Canada. But I would kind of like to see if something comes out of that. I think we should be embracing the opportunity where there's so much foreign investment in Canadian film and TV, instead of doing this drearily Canadian thing where it's like hello welcome to Canada where our culture is a walled garden can we garnish 30% of your profits so you can fund the competition I mean

that's like so 70s I mean this 500 million dollars it did come under criticism for you know not not being enough the argument would be if they were subjected to the 30 it would be more of course yeah quebec was quebec was especially not a fan of it so you know is is there merit to that argument i mean point taken like netflix is also shooting my understanding is uh like sabrina the teenage witch here right like well amazon did the boys the the superhero show the boys if you want to see uh times square that's actually young and Dundas, check out The Boys. So to me, we kind of conflate what is the Canadian entertainment industry, I think, in a couple of ways. So there's Hollywood coming up north, taking advantage of cheap labor that seems to exist in Toronto and Vancouver. I mean, these are like both huge entertainment hubs

for American or Hollywood productions. And they do employ like many Canadian production crews. So it kind of depends on how you're defining our entertainment industry, right? But that is a function of the CRTC. I feel like we've switched sides where I was against this and now I'm for it. But it's like, that is in part because, you know, Americans for the longest time are like, well, we can't trust Canadians to put down gaffer tape on a Hollywood set.

And then rules came in that said, well, if you're shooting here, you have to have X percentage of Canadian crew. I mean, that is a benefit. It's this Canadian storytelling. That's right. Which is which is extremely nebulous. Right. Like, is Juno a Canadian movie? Depending on who you ask, it is or it isn't. Is that the biopic of CR right like is Juno a Canadian movie depending on who you ask it is or

it isn't is that the biopic of CRTC uh chairman Pierre Juno I don't know what you're talking about oh the uh would you like to tell everyone the Jason Reitman movie what the Jason Reitman movie yes I was thinking I just nip it in the bud before it gets worse because they were talking about in health class how pregnancy it can often lead to an infant typically yeah yeah it's a movie that you know might be funded um by americans but technically is directed by a canadian and stars canadian talent and it's hard to say how much of it is canadian how much of it is american in a way it's kind of both. Ellen Page is from Halifax, and Michael Cera is from Brampton, Ontario. But then, is it a Canadian story?

Is there any mention of Canada in it? Obviously not. It can take place in anywhere North America, in a sense. There's this couple, they haven't had, you know, they've been trying to have a kid for like five years. We found them in the penny saver next to the exotic birds.. . . In the Dragon's Den, a simple pitch can lead to a life-changing connection.

Watch new episodes of Dragon's Den free on CBC Gem. Brought to you in part by National Angel Capital Organization, So I guess the question I have is, is these rules, these CanCon rules that have been placed on traditional broadcasters, have they worked to promote Canadian stories, to promote Canadian culture, which I'm assuming was the point of them in the first place. A CBC colour presentation. The bulk of Mr. Juneau's press conference this morning dealt with these proposals for 60% Canadian content. We believe that there is enough talent in Canada to produce those programs. It's a matter of making room

for the new talents that are developing in Canada. I think the problem is this, and it's long been a problem with Canada. It's the very core of these discussions about cultural protectionism that have been going on since the 50s and 60s and 70s,

which is this idea that we're going to be somehow colonized by American entertainment because of our proximity to them. I mean, I think that it's a hysteria that has always been overstated. There's always been a crisis in CanCon for as long as we've talked about CanCon. In the past two decades, we've seen incredible growth in cable channels, pay TV, satellite dishes, video cassette recorders. How then does Canada maintain its own voice? And I don't know. I mean, I think that Canada has some might say the detriment,

I would say the benefit of not being a monoculture, of being diverse, of there not being one notion of Canada or Canadian identity that you can make a blockbuster movie that kind of appeals to everyone. I mean, they have certainly worked in producing these movies, but like, does anyone go see Paul Gross and Passchendaele and be like, wow, this is the Canadian experience in a nutshell. Do you think maybe I could accompany you to a dance? I don't dance with soldiers. I could lose a uniform. I don't dance with naked soldiers.

There are some very famous movies that have come out of Quebec that speak to Quebec. Because Quebec is a monoculture. Quebec has its own language. It has its own culture. It has its own star system. And I mean, this idea of staving off America, like if you look at France, which has the most filmgoers of any country in Europe, the top five films at the box office are still these Disney and Marvel movies. It's not a problem unique to Canada. I don't know. I think it's a sort of common hysteria and this boogeyman that keeps coming around. And I think that history has proven, common hysteria and this boogeyman that keeps coming around.

And I think that history has proven, unless I'm so colonized by American entertainment that I don't even realize it. I have to disagree with you, John. Okay. So I think that if you compare two different industries and the way in which we talk about those art forms in Canada, you're going to see a very different picture. those art forms in Canada, you're going to see a very different picture. If you talk about Canadian music, you can immediately think of 10 musicians who are world-renowned and also beloved. Yes. I mean, like the list goes on and on, right? And I think the reason for that is because of very specific CRTC rules that were established in the 70s that forced Canadian music down our throats via radio, which was the most popular, most ubiquitous form of taking in music. form of taking in music. A particular percentage of music that was played on radio stations for decades, still to this day, but no one listens to the radio anymore, had to be Canadian. And through that sheer exposure, we came to not, you know, grit our teeth and, you know, deal with the

fact that we had to listen to Celine Dion. Right. This is why you're hearing My Heart Will Go On seven times in three hours. But But we came to actually recognize their names and maybe even came to like them, right? I'm saying this as someone who absolutely loathed Celine Dion, but now has a begrudging respect for someone who has made a bazillion dollars worldwide. Oh, that's so fashionable

to think that Celine Dion is cool now. She's very cool these days. I figured it out. I have so many songs that every word you're going to say, I have a song. Uh, devil. I'm just trying to think of words that you can sing. But anyways, you know, the fact of the matter is that we don't even question it. And the reason that we don't question it is due to these CRTC rules that were put into place at a time when everyone was against them. Right. No one liked this idea. It was extremely unfashionable. But if you take a look at the movie industry, I'm not even going to go to television because we do have examples of successful Canadian TV shows that we mentioned before. But if you look at the Canadian movie industry, we don't have the same success story. And I think that that history goes back to the 40s. If you look at

other countries in the world, they employed a quota system at their movie theaters, you know, within the first few decades of film being this very popular entertainment, where you actually went and sat in a theater and watched a movie. The UK did it. Italy did it. Many other Western countries did it. Canada did not. We did not employ a quota system. And this is why you can go to Cineplex Odeon and you never see any Canadian movie. You will never see.

Marvel, whatever, all the big movies. It'll be like 98% American movies. And that has been the case since the 1940s. American movies. And that has been the case since the 1940s. And the Canadian government had multiple chances to step in, to negotiate with Hollywood, to make a quota system. And every single time, they basically just said, all right, no worries. You know, as long as you guys are, for example, you know, making some Hollywood movies and mentioning Canada from time to time, that'll be good for our tourism. Or, you know, as long as you guys are coming up north and, you know, making, you know, employing our film production people here to tell your stories. That's all right. We'll let that happen.

I agree with this idea that the, you know, Canadian storytelling or Canadian identity told through television or movies is very nebulous and it's very all encompassing. The fact of the matter is we don't have exposure to it. And I think that increased exposure, even if it was forced, would really help us get to consider the idea that maybe it's not bad. In fact, good. People die of exposure. What do you make of Tina's force this content down your throat mentality? Like maybe we've had some decent television shows that have come out of the CRTC rules. And certainly, you know, some popular Canadian musicians that have come out of the CRTC rules on radio airwaves. I guess I get nervous around

this language of like, oh, it's mandatory, you know, to talk about. It reminds me of a sketch from the show Mr. Show, where a movie studio sues the public for not going to see their movie and everyone has to buy a ticket and go see the movie. Don't cry, movie executives. It's not your fault. The American public have screwed the movie industry over for the last time. Come see the movie that the Attorney General is calling a required role. And it has the tagline warm and mandatory. I don't want, I don't think that ever works. I mean, I think you're right that there's money being put into production, but not enough money being put into promotion.

That's right. Or being put into distribution. Yes. Where you can spend $8 billion making movies, but if nobody goes to see them because they don't know that they exist or that they're not playing near them, then that's a totally different issue. Do you think that these rules even jive with what these platforms are all about, right? Like these platforms are about choice. These platforms are about a free market. These platforms are about giving you what you want and you're paying this fee to not have stuff shoved down your throat. And so, you know, what do you ultimately want to see happen here?

I think I think the government has to sit down with Netflix and other companies like it and figure out policies, strategies, things that will help Canadians be forced is not the word I want to use encouraged to watch Canadian programming because you're right like when you turn on Netflix it's going to tell you what to watch it's going to splash things at the very top and that is based on an algorithm that is designed for you if you like comedies it's going to show you comedies if you like horror movies it's going to show you horror movies so I think that there needs to be greater emphasis put on, you know, the government actually making these arrangements with companies like Netflix that allows Canadians to discover Canadian content. So maybe it's not being forced, but it's like consistently being suggested to you, right? This is a policy issue, first and foremost. So money is going to be part of it. But another part of it is really how do we get it out there?

Right. John, what do you make of Tina's argument? One thing I was thinking about when when she was talking, you know, a lot of the money that we're seeing now funneled into Canadian content is coming from traditional broadcasting. And as people watch television less and less as they cut the cord, as they move to these platforms, like, couldn't you make an argument that the money to produce Canadian content could dry up? Well, I guess what I would like to see is more of these sort of good faith arrangements, whether it's foreign investments coming from Europe or other countries that are making films in Canada, or if it's the half a billion coming from Netflix. I'd like to see more of that before we do this sort of mandated gun to the head. You have to give us money to make a show about a goalie who's also part of the Wexit movement, but he's in love with a woman in B.C. and has to cross the international border from the Republic of Alberta to send her a love letter. Would I watch that? I would watch that. And I'm available if you need me to write it. You know, we were joking before this podcast that another way to do this,

which feels like even more authoritarian than forcing the algorithm, right? Would be to like lock the crown and all these big blockbusters until you watch like, I don't know, four episodes of Schitt's Creek and then take a small test and then you can,

like everything else will be opened up to you. Anyways, I don't think we're there yet. John, Tina, thank you so much for being here today. Great to be here. Great to be forced to be here. We did force you to be here. During our conversation, John mentioned some CBC shows, like Kim's Convenience and Schitt's Creek, being available on Netflix. Well, CBC's relationship with Netflix is probably changing. Just last month, CBC president Catherine Tate announced the public broadcaster would no longer be working with Netflix to co-produce shows. They've actually co-produced shows like In With An E and Alias Grace. Tate said, quote, we're not going to do

deals that hurt the long-term viability of our domestic industry. And then she went on to say the countries that do do deals with Netflix or Amazon end up feeding the growth of those companies. of those companies. That's all for today. Stay tuned for tomorrow. Barring any big breaking news, we're going to have an episode on the U.S. impeachment hearings. I'm Jamie Poisson.

Thanks for listening. For more CBC Podcasts, go to cbc.ca slash podcasts.