Time to rewrite the script for Canada’s cultural policies

Arguments for continued government support of entertainment industries no longer credible

BELLINGHAM, WA, Mar 14, 2014/ Troy Media/ – While the CRTC’s recent reprimand of three Toronto-based X-rated channels for failing to meet the required 35 per cent threshold for Canadian content became fodder for internet humor, Canadian content regulations are no laughing matter for cultural nationalists.

Indeed, one of the oldest shibboleths of Canadian public policy is that domestic cultural industries need regulatory protections and taxpayer financial support to promote and sustain the Canadian identity. Without protections and taxpayer support, Canadian producers of entertainment programming will allegedly be driven out-of-business by lower-priced programming imported from the United States. This development would, in the words of one cultural nationalist, endanger the survival of Canada as an independent nation.

Most direct and indirect government subsidies (including regulations) go to the popular entertainment industries of feature film, made-for-TV programs, recorded music and publishing. The arguments made to support these subsidies hinge on two prominent assertions:

1)    that the output of domestic producers of entertainment programming makes a vital contribution to the political and social cohesion of Canada, and

2)    that the survival of Canada’s entertainment industries requires government support.

In fact, both assertions are much too simplistic, if not completely false. Regarding the first assertion, public opinion polls taken over the years identify numerous other institutions and symbols that more strongly reinforce Canadians’ pride in and commitment to their country than do entertainment products and entertainers. These include Canada’s healthcare system, its successful experience with multi-culturalism, its achievements in science, technology and the economy, its magnificent landscapes and, of course, hockey.

Therefore, direct and indirect subsidies to producers of entertainment programming divert productive resources away from other activities that promise more “national identity bang-for-the buck.”

The assertion that domestic producers of entertainment programming need government protection and subsidies to successfully compete against the U.S. is also dubious. Canadian producers face no U.S. government-imposed barriers to exporting their products to that market. Indeed, many Canadian entertainment companies, as well as performers and writers, enjoy great commercial success in international markets. Hence, the relatively small Canadian domestic market is not the barrier to operating efficiently that proponents of government intervention allege, particularly for English-language programming.

Advances in information and computer technologies have also dramatically lowered the costs of producing and distributing entertainment programming. The internet in particular has made it economically feasible for small entertainment companies and even individuals to make their products available to a world-wide market. Indeed, the growth of on-line delivery of entertainment programming threatens to undermine Canadian-content regulations or force the CRTC to implement draconian restrictions on accessing the world-wide web. It’s doubtful Canadians would accept any restrictions on what they can browse on the internet, regardless of whether it’s in the name of preserving Canadian culture or not.

In short, traditional arguments for protecting and funding domestic entertainment industries are no longer credible, if they ever were. Canadians should no longer have to take directions from regulators about how to consume entertainment while remaining good citizens, and Canadian producers of entertainment products should be expected to compete for profits as is the case for most other private-sector Canadian companies.

Steven Globerman is the Kaiser Professor of International Business at Western Washington University and a senior fellow of the Fraser Institute. His latest study is The Entertainment Industries, Government Policies and Canada’s National Identity.

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