by Sheila Copps, Minister of Canadian Heritage
The FOCUS Report, June 1997.
Republished with the permission of the
Minister of Canadian Heritage and the
Minister of Public Works and Government Services

Introduction

Nearly every country in the world is grappling with the question of how to maintain its cultural identity at a time when "global culture" is washing over the earth. In Canada, we have tried to strike a balance that allows us to participate fully in the global culture, while at the same time ensuring that our unique voice is not drowned out in the process.

Federal policy has been driven by a belief that culture is important to us as individuals and as a nation.

Through books and magazines, radio and television programs, films, art and theatre, museums and historic sites, Canadian culture helps us to understand and to celebrate our lives as Canadians. Canadian culture is the shared experience of being Canadian.

About 900,000 Canadians earn their living in the cultural sector. But we are all involved: whether we write books or read them; whether we make news or watch it, we all have a stake in Canadian culture.

What is the federal government's role in this? Over several decades, a Canadian model for "cultural affirmation" has developed. It is based on:

• respect for freedom of choice;
• promoting the creation of Canadian content;
• maintaining "shelf space" for Canadian cultural products;
• developing a wide range of policies for different types of cultural undertakings; and,
• forging partnerships with the creators of arts and cultural products.

Canada's insistence on its own cultural space obviously has much to do with living next door to the most powerful economic and cultural dynamo in the world. But, more broadly, our argument for cultural diversity as an engine for democracy and creativity is gaining increasing support in world forums such as the G-7, the Asia-Pacific Economic Co-operation (APEC), and among developing countries. Many countries are coming to Canada to study our cultural framework, and that's an indication we're doing something right. 

Broadcasting
You Are What You Watch

Poll after poll has found that Canadians overwhelmingly (i.e., 70 percent) support the licensing rules that keep Canadian content prominent on Canadian television sets. The same polls show that Canadians also want freedom to choose what they want to watch. Reconciling those two, seemingly contradictory desires, is not an easy job. But the quest for a balance between quality Canadian content and expanding choices from among the best programming the world has to offer, has always been at the heart of Canadian broadcasting regulations.

With most Canadians able to receive American broadcast signals over the air, keeping the U.S. networks out of Canada has never been an option. Indeed, cable companies and other distributors are required as a condition of licence to carry the "four-plus-one"--CBS, NBC, ABC, FOX, and PBS. These U.S. networks account for nearly one-quarter of Canadian viewership. When you add on the American programming shown on Canadian stations, the U.S. accounts for a total of roughly 60 percent of what English Canada watches (and 30 percent of what French-language viewers watch).

Carving out room for distinctly Canadian voices on the nation's radios and televisions has always taken an act of will. Market forces, left to their own devices, would have made the entire Canadian broadcasting system a U.S. subsidiary. In the 1920's, as U.S. radio broadcasting began to pour across the border, the government established a Royal Commission under a banker, Sir John Aird. The Commission concluded that if Canada wanted to have Canadian broadcasting, the government would have to be involved. It was either "the state or the United States."

Recognizing the importance of broadcasting as a necessary and unifying force in Canada-- even in the midst of the Great Depression--the federal government established what later became the Canadian Broadcasting Corporation (CBC). The CBC grew to become the voice of Canada, reaching virtually all Canadians from coast to coast to coast, in both official languages. While the CBC's budget has been cut in recent years, roughly in line with other federal departments and agencies, its funding from the federal government has also been stabilized at just over $800 million per year. The CBC can continue to fulfill its unique role as the biggest cultural institution in the country. Its mandate, set out in the 1991 Broadcasting Act, will be fulfilled.

The Broadcasting Act is the bulwark of the Canadian broadcasting system, and is perhaps the strongest single force for culture in this country. The Act was designed to safeguard, enrich and strengthen the cultural, political, social and economic fabric of Canada. It encourages the development of Canadian expression "by providing a wide range of programming that reflects Canadian attitudes, opinions, ideas, values, and artistic creativity." It describes broadcasting as nothing less than "a public service essential to the maintenance and enhancement of national identity and cultural sovereignty."

Licensing rules established by the Canadian Radio-television and Telecommunications Commission (CRTC) to fulfill those goals include quotas on Canadian content. In general, "CanCon" quotas are 60 percent for Canadian television stations; 30 percent of popular music selections on radio (65 percent in French for French-language stations). There are also rules governing broadcasting distributors. Overall, more than half of the channels received by a subscriber, whether by cable, satellite, wireless, or any other kind of future carrier, must be Canadian channels.

Digital technology is allowing more and more channels to be carried by the broadcasting system. The CRTC is responding by licensing new specialty and pay channels - 23 new services were licensed in September 1996, and will come on stream as space becomes available.

To help ensure that there is Canadian content to fill these channels, the government, in September 1996, launched the Canada Television and Cable Production Fund. With an injection of $100 million in new funding, coupled with roughly $50 million a piece from Telefilm and the Cable Production Fund, the new $200-million-a-year superfund becomes a potent force for Canadian cultural expression. It is estimated that the fund will leverage up to $700 million in private-sector funding, generating up to 10,000 jobs in the Canadian television and film production industry

Film and Video
Seldom Showing at a Theatre Near You

The biggest market for Canada's billion-dollar-a-year film and video industry is Canada's television industry. With strong backing from the Broadcasting Act and under licensing rules set out by the CRTC, "shelf space" is guaranteed for Canadian content. But in making the jump from the small screen to the big screen, Canadian film makers find themselves in a market which has always been dominated by the United States. Barely one movie in 20 shown on Canadian screens is a Canadian movie.

While some Canadian movies such as Black Robe, Jésus de Montréal, Crash, Exotica, Le Confessional, and Margaret's Museum have achieved national and international acclaim, they are playing in a game in which the deck is stacked against them. U.S.-based distributors control about 85 percent of the Canadian theatrical film market, which they routinely administer as part of the U.S. market. Even though they reap an estimated $180 million a year from Canadian audiences, U.S. film distributors have shown little or no interest in investing in Canadian feature films. As a result, many of Canada's most talented directors, actors, writers and technicians have had to go south to make their careers. It is often said that Canada's major contribution to the film industry has been to supply about 20 percent of the people working in the Hollywood film industry - the Canadian Broadcasting Corporation and the National Film Board (NFB) providing a fertile training ground for many of them. Canada's high-tech expertise is also making a hit in Hollywood: it is estimated that 60 percent of the software used in the California motion picture industry was developed by Canadians.

Canadian and international law restricts how far the government can go in promoting the Canadian film and video industry. However, within those boundaries, steps are being taken to encourage the Canadian industry.

In 1988, the government introduced foreign investment policy guidelines for the film and video distribution sector. The foreign investment policy guidelines help keep Canadian-controlled distribution businesses in the hands of Canadians. The policy obliges any new foreign distributor to handle only those films to which they hold worldwide distribution rights or in which they have invested more than 50 percent of the production cost. Direct or indirect acquisitions of existing foreign films are permitted only if a portion of the Canadian earnings is reinvested in accordance with Canadian cultural policies.

The earnings that Canadian distributors generate from handling Canadian and independent foreign films are plowed back into Canadian films. According to a recent study, 97 percent of the distribution rights paid for Canadian productions in the last five years came from Canadian distributors. Distribution rights are crucial to the financing of any film project.

Direct assistance is also available through several federal programs:

• Telefilm Canada's Feature Film Fund and the Feature Film Distribution Fund contribute roughly $32 million a year for certified Canadian productions;
• Grants from the Canada Council for the Arts provide seed money for individual Canadian film and video artists;
• The 1995 Film and Video Tax Credit program provides a refundable tax credit on qualifying Canadian films and videos, up to 12 percent of eligible production costs;
• The Cultural Industries Development Fund, run by the Business Development Bank of Canada, provides loans and advice for Canadian-owned cultural businesses;
• While the final destination must be prime-time TV, feature films can also qualify for funding under the Canada Television and Cable Production Fund.
• Each year, Canadian film and video producers participate in some 35 to 40 co-productions, bringing in partners from more than 30 countries with which Canada has International Audiovisual Co-production Agreements.
  Programs such as these, supporting the proven skill and talent of Canadian film makers, are helping to bring Canada's unique voice to theatres across the country and around the world.

Music Industry
Waking Up the Neighbours

The tidal wave of sales and success for Alanis Morissette, Céline Dion and Shania Twain has music industry executives all over the world wondering if there is something magical in the Canadian water. Of course there is, but there's also good public policy at work. Most industry observers point to one key policy development: the 1971 decision by then-chairman of the CRTC, Pierre Juneau, to set Canadian content quotas of at least 30 percent of popular musical selections on AM and FM radio stations. In fact, the Canadian government has been taking steps to encourage Canadian expression on the radio since the early 1930's, when the Canadian Radio Broadcasting Commission (precursor to the CBC) was created-to provide an alternative to U.S. radio broadcasts which were pouring across the border.

Radio also supports Canada's music industry through talent development programs and royalty payments. As a result of revisions to the Copyright Act introduced by the Ministers of Canadian Heritage and Industry, royalty payments will be extended to performers and producers. Late last year, the Department of Canadian Heritage announced a major expansion of the Sound Recording Development Program, which program supports the Canadian-owned segment of the sound recording industry. Assistance is provided for record and video production, business development, marketing and international touring. The program is administered by Factor Musication Canada on behalf of the Department of Canadian Heritage and the Canada Council for the Arts. With $5 million in new funding for marketing and promotion of Canadian sound recordings, the program was doubled in size.

These programs and regulations have fostered the growth of independent Canadian music companies, which produce 92 percent of Canadian-content recordings, and account for less than 20 percent of total sales revenues.

What often stops Canadian-controlled music companies from making a bigger impact on the market is the low level of Canadian participation in the distribution system: six multinationals control about 90 percent of sound recording distribution in English Canada and 20 percent of the market in Quebec.

The Canadian industry and the government are now working together to see how Canadian- controlled firms can generate a bigger share of distribution revenues. Those revenues could be used to bring more of Canada's musical talent to domestic and world markets. 

Publishing
So You Want to Be a Paperback Writer

Canadians are rightly proud of internationally celebrated writers such as Robertson Davies, Margaret Laurence, Michael Ondaatje, Mordecai Richler, Carol Shields, Alice Munro, Roch Carrier and Michel Tremblay. Canadians recognize and celebrate a distinctive world-class literature; this in part, is a testament to the success of public policy which supports the maintenance of a Canadian- owned publishing sector. This policy has promoted the development of an infrastructure necessary to nurture Canadian writing talent.

A number of policy instruments exist to support the Canadian-owned book publishing sector, which accounts for about half of the books sales in Canada and produces 80-90 percent of new Canadian-authored books. The Book Publishing Industry Development Program provides aid to publishers and funds for market research and development, as well as, international marketing. The budget for 1996-97 stood at $19.1 million. Some relief from the Goods and Services Tax (GST) has also been provided for book sales to schools and libraries. In addition, the Canada Council for the Arts (which celebrates its 40th anniversary this year), the Social Sciences and Humanities Research Council and provincial arts councils provide assistance to publishers and writers.

A revised foreign investment policy promotes the maintenance of the Canadian-owned publishing sector, recognizing the importance of Canadian companies to the publishing of Canadian-authored titles. Book publishers generate a significant amount of revenue from the sale of books for which they are the exclusive distribution agent in Canada. This revenue helps publishers reinvest in the publication of new Canadian-authored titles. New copyright legislation passed this spring will provide protection for distribution agreements negotiated for the Canadian market. The writing and publishing sector in Canada is vitally important in telling us about ourselves, about Canadian places, events and issues and putting a Canadian perspective on what happens beyond our borders. There are continuing challenges facing Canada's writers and publishers which flow from the circumstances of Canada's location, our bilingual markets and other factors. Our enormous successes in this sector at home and abroad are dependent upon industries with strong foundations in the domestic market. 

Newspapers and Magazines
Covering Canada Like The Dew

In February 1995, Prime Minister Chrétien introduced visiting President Clinton to reporters from both countries by pointing out "if we had to rely on American magazines to tell us about Canada, we wouldn't know much about Canada." This was a clear acknowledgment of the fact that Canadians want and need to see the world interpreted from a Canadian point of view. In recognition of the role magazines play in Canadian cultural expression, successive governments have put in place policies that ensure that Canadians have access to Canadian ideas and information through a genuinely Canadian magazine industry. These policies aim to provide Canadians with distinctive vehicles for expression. The policy has balanced the need to maintain a place and access for Canadian periodicals in their own domestic market and at the same time welcoming foreign periodicals. Canadian magazines have achieved considerable success: Canadian publishers produces some 1,300 periodicals and three quarters of all magazines circulating in Canada are Canadian. However, Canadian magazines face strong competition on Canadian newsstands: more than 80 percent of the magazines on these newsstands are foreign (mainly American). And, Canadian magazines are produced for a much smaller market than American publications, with correspondingly higher per unit costs.

The success of Canadian magazines has to do, in part, the long-standing government art policies that have focused on two areas: distribution and advertising. Canada's support for the magazine industry goes back more than 100 years, beginning with the creation of the postal subsidy, which recognized the difficulties associated with distributing magazines to a relatively small domestic market over a large geographic area. Since the 1960s, government policy has been designed to ensure that a limited Canadian advertising market supports the creation of original editorial content, since advertising revenues are the crucial element in ensuring the economic viability of the Canadian magazine industry.

Public policy instruments include an import prohibition on split-run magazines. A split-run edition of a magazine uses articles and other editorial material prepared and paid for in the magazine's home market and inserts advertising aimed at another market. The prohibition also imposes a five percent limit on the amount of ads in foreign magazines imported into Canada that could be directed at a Canadian audience. This import prohibition was circumvented by the transition of an electronic version of a magazine to a printer in Canada and inserting Canadian advertisements. The government responded in 1995 by imposing an 80 percent excise tax on advertising placed in split-runs. In addition, Section 19 of the Income Tax Act allows Canadian advertisers to deduct the costs of advertising placed in Canadian periodicals.

On July 30, 1997, the World Trade Organization (WTO) adopted a ruling in favour of a U.S. complaint covering Canadian measures related to magazines. Canada is addressing the outcome of the WTO decision. The Government of Canada remains committed to the support of this vital cultural industry. Canadians should continue to have access to Canadian ideas and information through a genuiely Canadian magazine industry. Canada will continue to articulate and promote its cultural objectives. Canadian voices must be heard and Canadians mus have access to magazines that tell us about our own country. 

The Arts 
The Show Must Go On

Fifty years ago, Canada's performing arts scene could have been called a cultural tundra. Talent had little opportunity for expression or growth. Successful professional careers were made south of the border or overseas.

A massive shift has occurred since, thanks in large part to the careful engineering of federal, provincial and municipal institutions. A key has been the Canada Council for the Arts, which this year celebrates its 40th year providing essential support to Canadian talent.

Signs of this awakening are seen across Canada. Toronto is now firmly established as the third biggest centre for English-language theatre in the world, after New York and London. Small- town Stratford, Ontario, regularly draws half a million tourists to its summer festival. Edmonton and Niagara-on-the Lake, similarly, know the joys of hosting appreciative throngs of theatre buffs. Winnipeg and Victoriaville are home to vibrant contemporary music festivals, while Taffelmusik and the Montreal Symphony have followers the world over.

Live theatre is booming in Quebec, with playwrights such as Michel Tremblay, Robert Lepage and Michel-Marc Bouchard making their mark on the international scene. Canadian dance companies regularly light up the stage in Mexico, Tokyo and Bonn as well as Vancouver and Montreal. While governments still provide a third of performing arts companies' revenues, financing has become a major challenge, has securing audiences who are free to choose from a cornucopia of entertainment alternatives.

Increasingly, the answer is in new partnership schemes involving all levels of governments, the private sector, and foundations. Arts stabilization programs are up and running in Vancouver and Alberta helping arts groups to reduce their accumulated deficits and to build operating capital reserves. Other such schemes are in the planning stage in most regions of the country. A national technical assistance registry is about to be launched, available on the Internet, that will provide a resource database and management tools to arts administrators. Links are being reinforced between arts organizations and the tourism industry to better tap the audience potential of Canadian and foreign visitors. And arts councils across the country are working together to better harmonize their funding practices. 

CULTURE - Key Facts 
Source: Statistics Canada

Definitely not (just) the Opera

• In 1993, there were 894,000 direct jobs in the cultural sector.
• From 1981 to 1991, the cultural labour force grew by 32 percent
• Canada has 11,450 painters and sculptors, 28,715 graphic artists; 29,970 interior and product designers, 11,815 architects, 6,965 professional photographers.
• The number of Canadian heritage institutions (museums, historical sites, etc.) grew from 1,414 in 1984 to 2, 122 in 1994.
• More Canadians (56 percent) visit heritage institutions annually than go to movies (49 percent), attend professional sporting events (31percent) or go to public libraries (34 percent).
• Canadian records, tapes and discs amounted to 12.6 percent of total sales in 1994 .
• Canadian films account for only 5 percent of the movie theatre market.
• 99 percent of Canadian households have at least one TV and one radio.
• In 1996, 32 percent of Canadian households had a computer, 7 percent had access to the Internet.
• Canadians watched TV on average 23.2 hours a week in the fall of 1995.
• In 1995, 73 percent of households subscribed to cable, an increase of 65 percent in 10 years.
• 40 percent of TV programming available in Canada is Canadian content.
• Canadian music content on radio represents 30 percent in the English-language market and 65 percent in the French-language market.
• It costs about $1 million to produce a typical one-hour TV program (drama) but only about $100,000 to import a foreign program.
• The number of Canadian periodicals was 1,404 in 1994-95 with total circulation of about 500 million copies and total revenues of $866 million. Based on circulation revenue, Canadian publishers had close to a 30 percent share of the domestic market.
• Subscriptions remain the dominant means of distribution for Canadian magazines. Newsstand sales account for only about 7 percent of Canadian magazine sales.
  92 percent of editorial content and 93 percent of illustrations and photography in Canadian magazines come from Canadian sources.