How Do We Define Canadian Content? Debates Will Shape How Creatives Make A Living

(MENAFN- The Conversation) What should count as Canadian content (CanCon) in the era of streaming and generative AI (GenAI)?

That's the biggest unknown at the heart of the Canadian Radio-television and Telecommunications Commission's recent (CRTC) public hearing , held in Gatineau, Que., from May 14 to 27.

The debate is about how Canada's current points-based CanCon system remains effective in the context of global streaming giants and generative AI. Shows qualify as CanCon by assigning value to roles like director, screenwriter and lead actors being Canadian.

The outcome will shape who gets to tell Canadian stories and what those stories are, and also which ones count as Canadian under the law. This, in turn, will determine who in the film and television industries can access funding, tax credits and visibility on streaming services.

It will also determine which Canadian productions big streamers like Netflix will invest in under their Online Streaming Act obligations.

The federal government's recent announcement that it's rescinding the Digital Services Tax reveals the limits of Canada's leverage over Big Tech, underscoring the significance of CanCon rules as parameters around how streaming giants contribute meaningfully to the country's creative industries.

CanCon: Who gets to decide?

The CRTC's existing approach to defining CanCon relies on the citizenship of key creative personnel.

The National Film Board argued that this misses the“cultural elements” of Canadian storytelling. These include cultural expression, narrative themes and connection to Canadian audiences. That is, a production might technically count as CanCon by hiring Canadians, without feeling particularly“Canadian.”

It's worth noting there are varied global regulatory frameworks for defining film nationality . The Writers Guild of Canada supports the CRTC's view that cultural elements shouldn't be part of CanCon certification, and argues that attempting to further codify cultural criteria risks reducing Canadian identity to superficial symbols like maple leaves or hockey sticks, and could exclude entire genres like sci-fi or fantasy.

Crews work on a film set for a 'Titans' Netflix TV series on a Toronto street in 2019. THE CANADIAN PRESS/Doug Ives 'Canadianness' too broad to regulate?

The Writers Guild of Canada argues that while Canadians should expect to see cultural elements in programming , the concept of“Canadianness” is too broad and subjective to be effectively regulated.

Cultural elements are regulated by the 1991 Broadcasting Act as amended by the 2023 Online Streaming Act . Broadcasters and streamers must reflect Canadian stories, identities and cultural expressions .

Read more: How the Online Streaming Act will support Canadian content

The acts empower broadcasters and streamers to decide which Canadian stories and content will be developed, produced and distributed through commissioning and licensing powers. This implicitly limits the CRTC's role to setting rules about which creatives are at the table.

The Writer's Guild advocates broadening the pool of Canadian key creatives to modernize the CanCon system. It trusts the combined perspectives of a broader pool to make creative decisions about Canadian identity in meaningful ways. Accordingly, it supports the CRTC's intent to add the showrunner role to the point system since showrunners are the “the chief custodian of the creative vision of a series.”

Battle over Canadian IP

Streaming introduces more players with financial stakes, complicating who controls content and who profits from it. A seismic shift is happening in how intellectual property (IP) is handled.

CRTC has proposed that the updated CanCon definition include Canadian IP ownership as a mandatory element to enable Canadian companies and workers to retain some control over their own IP, and thereby earn sustainable income. For example, in a streaming drama, Canadian screenwriters who retain ownership of the IP could earn ongoing revenue through licensing deals, international sales and royalties each time the series is distributed.

Members of the Writers Guild of Canada and supporters gather outside the office building for both Amazon and Apple, for a rally in support of U.S. screenwriters, in Toronto, in June 2023. THE CANADIAN PRESS/Tijana Martin

However, the Motion Picture Association-Canada (MPA-Canada), representing industry titans like Netflix, Amazon and Disney, is pushing back against requirements that mandate the sharing of territory or IP.

Without IP rights, Canadian talent and the industry as a whole may be reduced to becoming service providers for global companies.

Fair remuneration, IP rights needed

Our own research highlights how this type of contractual arrangement increases the power asymmetries between producers, distributors and streaming services. We emphasize the critical importance of fair remuneration and IP rights for creators.

Intervenors shared a range of preferences from 100 per cent Canadian IP ownership to none at all. One hundred per cent Canadian IP ownership means Canadian creators like a producer of a streaming series would control the rights to the content. They would receive the majority of profits from licensing, distribution and future adaptations.

Even 51 per cent ownership could give them a controlling stake, but would likely require sharing revenue and decision-making with the streaming service.

AI and CanCon

And then, of course, there's the question of how generative AI should be considered within the updated CanCon definition. The Writers Guild of Canada has drawn a firm line in the sand: AI-generated material should not qualify as Canadian content .

The guild argues that since current AI tools don't possess identity, nationality or cultural context, their output cannot advance the goals of the Broadcasting Act, centred on promoting Canadian voices and stories.

The Alliance of Canadian Cinema, Television and Radio Artists (ACTRA) raised a different concern around AI . AI, ACTRA argued ,“should not take over the jobs of the creators in the ecosystem that we're in and we should not treat AI-generated performers as if they are a Canadian actor.”

Members of ACTRA and the Screen Actors Guild-American Federation of Television and Radio Artists (SAG-AFTRA) hold a joint rally outside the Canadian headquarters of Amazon and Apple in Toronto in September 2023 to protest greed that is diminishing the livelihoods of their members. THE CANADIAN PRESS/Chris Young

Depending on how the CRTC addresses AI, this could mean that streaming content featuring AI-generated scripts, characters, or performances - even if developed by a Canadian creator or set in Canada - would not qualify as CanCon.

The WGC notes that it has already negotiated restrictions on AI use in screenwriting through its agreement with the Canadian Media Producers Association . These guardrails are being held up as the“emerging industry standard.”

Follow the money

Another contested point is how streamers should pay into CanCon: through direct investment or through more traditional modes of financing. Under the Online Streaming Act, streamers are required to pay five per cent of their annual revenues to certain Canadian funds .

This model echoes previous requirements used to manage decision-making at media broadcasters, some at the much more substantial level of 30 per cent .

But no payments have been made yet, and streamers are appealing this requirement . Streamers prefer investing directly into Canadian content, taking a risk on its commercial potential to benefit from resulting successes.

Research in the European Union and Canada highlight how different stakeholders benefit from different forms of financial obligations, suggesting the industry may be best served by a policy mix.

As Canada rewrites its broadcasting rules, defining Canadian content is a courtroom drama unfolding in real time - and the verdict will have serious ramifications.

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