What Makes Content Canadian?
Film, radio & television and
interactive media content creators often cringe when the question is asked. But
the answer can significantly affect a program's ultimate success or failure in
the marketplace.
What is Canadian content? Under what criteria is a
program's Candian content to be
assessed?
Canadian Heritage, the federal government agency responsible
for national policies and programs that promote Canadian content, is asking for
input on its proposed changes to guidelines that go into determining Canadian
program content, production financing and tax credits.
As content
producers and distributors across the country know, certain criteria have been
developed to define a Canadian program, through the Canadian Radio-television
and Telecommunications Commission (CRTC, or the Commission).
When a
program meets those criteria it is "certified" as a Canadian program and
assigned a "certification number".
Conventional television, pay
television and specialty television licensees must fulfill regulatory
requirements and/or conditions of licence that require them to broadcast a
certain percentage of Canadian Content (CanCon).
Among the many industry stakeholders and
participants, the Canadian Film and Television Production Association has
proposed to replace current Producer Control Guidelines with so-called
"Commercially Relevant" controls and new tools for the analysis of Canadian
control of the production.
The deadline for comments or submissions to
the Department of Canadian Heritage, in regards to proposed changes and
revisions to its Canadian Film or Video Production Tax Credit (CPTC) program guidelines is July 21, 2006.
CAVCO says all comments will become part of the public
record, and be considered in its deliberations.
The CRTC monitors
compliance by requiring licensees to maintain program logs in which all Canadian
programming they have broadcast is identified by a certification number for
independent programs or a key figure for their own productions. Therefore, a
program will require a certification number if it is to be broadcast by a
licensee and the licensee will want the program to be recognized as Canadian for
the purpose of satisfying its CanCon requirements.
Without the number, the Commission's logging system will not recognize the
program broadcast as being Canadian.
The Canadian Audio-Visual
Certification Office (CAVCO) co-administers two
programs with the Canada Revenue Agency (CRA):
- Canadian Film or Video Production Tax Credit
(CPTC)
The objective of
the CPTC is to encourage Canadian programming and to
develop an active domestic production sector. This fully refundable credit is
available at the rate of 25 per cent of the qualified labour expenditure of an
eligible production.
- Film or Video Production Services Tax Credit
(PSTC)
The PSTC is
designed to enhance Canada as a location of choice for film and video
productions employing talented Canadians, as well as strengthen the industry and
secure investment. The PSTC is available at a rate of
16 per cent of qualified Canadian labour expenditures.
The Government of
Canada introduced the Canadian Film or Video Production Tax Credit (CPTC) in its 1995 budget, at a rate equal to 25% of the
eligible labour costs of a Canadian-controlled production corporation, to a
maximum of 48% of the total cost of a production, for films with high Canadian
content as evidenced by the presence of Canadians in key creative positions
according to the "point" system administered by the Canadian Audio-visual
Certification Office (CAVCO) of the Department of
Canadian Heritage.
In November 2005, the Auditor General completed its
audit of the Government's management practices for cultural industries,
including the CPTC. The key risk the Report identified
with respect to the CPTC was "that they [CAVCO and the Canada Revenue Agency] might issue tax credits
to non-Canadian productions or to productions with significant foreign
investment that are not under the effective control of Canadians". The revised
CPTC guidelines are intended to respond to these
concerns.
CFTPA is a non-profit trade
association representing almost 400 media companies across the country. It
negotiates and manages labour agreements, and actively lobbies the federal and
provincial governments on various policy areas including taxation, trade,
copyright, broadcasting and film. The association has offices in Ottawa, Toronto
and Vancouver.