Rogers asks Ottawa to fold Canadian content funding into new agency, use tax credits instead of subsidies

Rogers asks Ottawa to fold Canadian content funding into new agency, use tax credits instead of subsidies
Canadian Press Sean Craig November 28, 2016 5:37 PM EST
Rogers Communications Inc. is calling on the federal government to change the way Canadian cultural content is supported by providing almost all funding through tax credits, and by amalgamating TeleFilm and the Canadian Media Fund into a new agency.
In its submission to the federal Department of Heritage’s consultation on “Canadian content in a digital world,” which the government is holding as it considers options to reform the regulatory framework behind Canada’s $46 billion media and culture industries, Rogers argues for the creation of a Canadian Content Investment Agency (CCIA).

It says the new federal agency would inherit the roles of the CMF, which provides $371.2 million in film and television production funding annually; Telefilm, which provides $95.7 million in film and audiovisual production funding annually; and the Department of Heritage’s Canadian Periodical Fund.

“From an administrative point of view, collapsing the different agencies into one could save $30 to $50 million dollars,” said Susan Wheeler, vice president of regulatory media, in an interview with the Financial Post.

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“And more important is the user efficiency. Having that all under one roof with one application and where a project would only require one financing proposal would help streamline the process.”

Rogers also takes the position that all government funding for content in Canada should come in the form of tax credits, which it says should be issued to regardless of platform or the associated producer.

Under the proposed plan, tax credits would be granted to programming in traditional genres such as news, documentary, drama and reality television — but Rogers says the government should open it to include new technologies such as video games and virtual reality.

Clifford Skarstedt/The Examiner
“We suggest the tax credit system because there is a huge concern about editorial independence and the government funding news, which would be more concerning if it were subject to a bureaucratic review,” added Wheeler. “The tax credit system would have objective criteria in order to get your return on your investment.”

The telecom giant, which has a $20 billion market cap and says it invested $580 million in Canadian content last year, makes no secret that it and other large companies stand to benefit from its proposals.

“The key to growing Canada’s creative economy is to support large, well-capitalized companies that have the size needed to assume risks, invest in multiple projects and export Canadian content internationally,” reads the submission.

The proposal does, however, recommend setting aside a funding reserve at the Canada Council for the Arts, the distribution of which will be juried, in order to support certain genres that have limited market demand, such as official language minority, third-language, ethnic and Aboriginal productions.

Rogers also comes out strongly against any fees or taxes on internet service providers, arguing “an internet tax is a blunt instrument that would adversely impact affordability for those who are least able to pay.”

Instead, the company says the government should require all over-the-top video and audio streaming services, including Netflix, Spotify, Facebook and Google to pay the harmonized sales tax. Netflix alone generates estimated Canadian revenues of more than $500 million.

Rogers has no plans, however, for the Canadian Broadcasting Corp., which made its own appeal to the Department of Heritage on Monday for $400 million in additional federal funding in order to go ad free.

Financial Post

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