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### Viewing cable 03OTTAWA1797, WHAT IS CANADIAN? GOC REVIEWS ITS DEFINITION OF

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Reference ID | Created | Released | Classification | Origin
--- | --- | --- | --- | ---
03OTTAWA1797 | 2003-06-25 12:06 | 2011-04-28 00:00 | UNCLASSIFIED | Embassy Ottawa

`

    This record is a partial extract of the original cable. The full text of the original cable is not available.

` `

    UNCLAS SECTION 01 OF 02 OTTAWA 001797

    SIPDIS

    PASS USTR FOR MELLE, CHANDLER, BALASSA, BURCKY AND SCHNARE

    STATE FOR EB/TPP/BTA AND WHA/CAN

    DOC FOR ITA/MAC -- OFFICE OF NAFTA

    E.O. 12958: N/A
    TAGS: ETRD SCUL CA
    SUBJECT:  WHAT IS CANADIAN?  GOC REVIEWS ITS DEFINITION OF
           "CANADIAN CONTENT" IN FILM AND TV PRODUCTION

    REF:   02 OTTAWA 922

    ¶1.   SUMMARY/INTRODUCTION:  Canada applies various tests to
    define "Canadian content" of entertainment products, in
    order to make funding decisions and to enforce broadcast
    content requirements.  On June 17, the GOC announced results
    of a year-long review (reftel) of the definition of
    "Canadian content" as it applies to film and television
    production.  While the resulting recommendations suggest
    numerous changes, they broadly support the GOC's overall
    approach to cultural policy.  They stress that "Canadian
    content can be created only by Canadians."  They also
    propose that the current "points/expenditure system" - under
    which Canadian content is determined by a formula based
    partly on the nationality of key creative personnel - be
    replaced by a co-called "creative expenditure model."  END
    SUMMARY/INTRODUCTION

    ¶2.   THE CURRENT REGIME:  As a condition of license,
    Canadian radio and television broadcasters are required to
    fill certain percentages of their broadcast schedules with
    "Canadian" programming.  Key public sector film and TV
    funding bodies, Telefilm Canada and the Canadian Film and
    Television Production Fund (CFTPF), are mandated to support
    distinctively "Canadian" productions.  The GOC's Canadian
    Film or Video Production Tax Credit (CPTC) is also designed
    to support production of "Canadian" content.

    ¶3. THE RULES:  Telefilm Canada and the Canadian Audio-Visual
    Certification Office (CAVCO) apply specific rules to
    determine whether a given production is Canadian for
    purposes of GOC funding and tax credits.  These rules are
    based on the nationality of key creative personnel
    (director, screenwriter, key actors, etc.) and on a minimum
    (75 percent) of production costs being paid to Canadian
    entities.  The Canadian Radio-Television and
    Telecommunications Commission (CRTC), the broadcast
    regulator, applies similar rules to determine whether a
    production is Canadian for purposes of meeting TV
    broadcasting quotas.

    ¶4.   THE PROBLEM:  Critics have pointed out for years that
    these rules do not truly govern content; they implicitly
    assume that what Canadian personnel produce will be
    "Canadian content."  As one columnist recently wrote, "the
    requisite number of Canadians may be employed, but the film
    itself may be about American tourists eating Japanese food
    in Bangladesh. . . . And why should it be preferred to a
    film made by Americans of a Canadian story, as in `The
    Shipping News' [a film set in Newfoundland starring U.S.
    actors]?"  With Canada now the site of a large amount of
    U.S.-financed and/or internationally co-produced film and
    television, the rules have become somewhat harder to apply.
    Moreover, such questions about what is (or should be)
    considered Canadian are not only more culturally
    problematic, but also of growing economic/commercial
    importance.

    ¶5.   POLICY CONTEXT:  Post predicted a year ago (reftel)
    that the GOC review, while potentially useful, would likely
    not tackle important larger issues about the relevance of
    Canadian cultural policy measures.  In many cases, Canada's
    media/entertainment industries today are vastly more
    prosperous, successful and dynamic than they were when these
    policies were first formulated.  As expected, the results of
    the GOC "Canadian content" review are framed within the
    broader status quo of Canadian cultural policy and are meant
    to reinforce it.  In fairness, it bears noting that some
    wider issues in cultural policy have been addressed recently
    by Parliamentary committees - such as the House Industry
    Committee's recent study of foreign ownership restrictions
    in telecommunications, and the House Heritage Committee's
    examination of the state of Canadian broadcasting (see
    website parl.gc.ca under "committee business").  However, we
    see little prospect of these studies leading to actual
    changes in policy.

    ¶6.   RECOMMENDATIONS:  The results of the "Canadian content"
    review are available at website canadianheritage.gc.ca under
    "what's new."  Following are key features.

    -- The review reinforces a basic tenet of Canadian cultural
    policy:  "Canadian content can be created only by Canadians.
    . . . Foreigners cannot relate an event or tell a story from
    a Canadian point of view . . .  . The mere fact of being
    very largely created by Canadians is what gives an
    audiovisual work its unique Canadian identity."  (This
    effectively dismisses the criticism cited in para. 4 above).
    -- The review recommends replacing the various current
    systems for assessing Canadian content, including the
    current points/expenditure system described in para. 3, with
    a single "creative expenditure model" which would be applied
    nationwide.  This would focus on all the "creative costs" of
    a production, classed into four groups:  authors, creative
    collaborators, performers, and technicians.  To qualify as
    Canadian, a production would need to meet minimum
    expenditure requirements in each group.  These minimum
    expenditure requirements would be subject to a system of
    options.  Producers could exercise an option to use non-
    Canadian elements, and pay for this flexibility by incurring
    higher minimum expenditure requirements.  For details, see
    section 3.2 of the report at website canadianheritage.ca
    under "what's new".
    -- It recommends that the distribution of Canadian feature
    films in Canada continue to be reserved for Canadian-owned
    and -controlled companies (a long-standing protective
    measure).

    -- It recommends that the broadcast regulator consider
    exempting commercials that promote Canadian feature films
    from the twelve-minute-per-hour TV advertising limit.  This
    could reduce the perceived disadvantage faced by Canadian
    films in advertising and promotion vis--vis bigger-budget
    U.S. productions.

    ¶7.   COMMENT:  Canada's cultural-policy-making establishment
    is making few concessions in the face of the profound
    economic, demographic and technological changes which have
    transformed North America's media landscape in recent
    decades.  At least under the leadership of outgoing Prime
    Minister Jean Chretien, all indications are that any policy
    changes will be designed to reinforce and improve the
    existing complex of protections and incentives, rather than
    re-evaluate its relevance.  However, it is clear that the
    challenges to the status quo - both technical (the Internet,
    satellite signal theft, etc.) and political (Chretien is
    scheduled to retire sometime in the coming eight months) -
    will not go away.

    CELLUCCI

`