CRTC Launches Consultation on Canadian Content in the Audiovisual Sector | Blake, Cassels & Graydon LLP
On November 15, 2024, the Canadian Radio-television and Telecommunications Commission (CRTC) issued Broadcasting Notice of Consultation CRTC 2024-288 (Notice), which invites comments from the public on the regulation of Canadian content in the audiovisual sector. Key topics of the Notice include the definition of Canadian content (referred to as “Canadian program” in the Broadcasting Act) and the types of expenditures broadcasters should make to support the creation and distribution of Canadian content.
Canadian programming certification and associated expenditure obligations have been a cornerstone of Canada’s broadcasting regulatory framework for decades, but only traditional broadcasters, rather than online streaming service providers, have been subject to these requirements. However, with the enactment of the Online Streaming Act (formerly Bill C-11) that amended the Broadcasting Act, the CRTC now has explicit authority to extend Canadian programming obligations to online undertakings. Through the Notice, the CRTC is consulting on how current Canadian content requirements should be modernized and adapted for use in connection with different distribution models and types of programming. For more information on Bill C-11, please see our Blakes Bulletin: Parliament Enacts Bill C-11 to Amend Canada’s Broadcasting Act.
Key Topics
1. Definition of Canadian program. Currently, the CRTC will only certify as “Canadian” certain film or television productions that meet prescribed criteria that focus on the financial and creative control of productions by Canadians. One such criterion is based on a points system, whereby points are awarded when Canadians occupy key creative roles such as director or lead performer. A production must generally earn at least 6 out of a possible 10 points to be certified. The Notice proposes to expand the points system to new positions, including “showrunner” (the CRTC has requested input on a definition of showrunner) and visual or special effects director. Under the CRTC’s proposal, productions would need to earn 9 out of a possible 15 points.
Beyond updating the points system, the CRTC is soliciting comments on other aspects of its Canadian programming certification criteria, including (1) proposing a requirement for a Canadian to occupy the position of showrunner, if a production has one; (2) increasing flexibility for positions occupied by more than one person, whereby points would be assigned if at least 80% of the people occupying a particular position are Canadian; and (3) exploring how the CRTC should account for intellectual property ownership by Canadians while furthering the “exportability” of Canadian programming (the current definition of “Canadian program” has no express requirements relating to intellectual property rights).
2. Canadian programming expenditures. The Notice contemplates reviewing requirements for Canadian programming expenditures (CPE) and programs of national interest (PNI). Currently, traditional television broadcasters are required to devote a minimum percentage of their gross revenues to the production of Canadian programming, generally 30% for large English-language broadcasters, but this percentage may vary for French language or smaller ownership groups. PNI expenditures are a subset of CPE and aim to support the production of programs that are “central vehicles for communicating Canadian stories and values,” but that are also generally expensive to produce or difficult to monetize, including documentaries, drama and comedy programs, and award shows.
The CRTC’s preliminary view is that both online and traditional audiovisual undertakings that are part of an ownership group that earn C$25M in annual Canadian broadcasting revenues should be subject to CPE obligations. In respect of PNI, the CRTC’s preliminary view is that support for news programming (rather than PNI as it is currently defined) should be prioritized, although not all undertakings may be required to provide such support.
3. Data reporting obligations. To monitor compliance with CPE requirements, the CRTC is proposing detailed reporting obligations, such as a requirement to provide production reports. Certain data would be published on the CRTC’s website, including the revenues and programming expenditures of all broadcasting undertakings subject to CPE requirements.
4. Other topics. The CRTC is soliciting input on other topics related to Canadian programming certification, including maintaining current requirements related to production costs and discontinuing the use of time credits as an incentive to broadcast Canadian programs. The latter proposal is in line with the CRTC’s trend toward moving away from exhibition quotas to support the distribution of Canadian content.
The CRTC is also exploring the use of artificial intelligence (AI) in the broadcasting system, including whether AI-generated material can be considered Canadian content, the impact of AI on pre- and post-production, and how AI could impact the discoverability of Canadian programs.
Next Steps
Parties may submit written interventions by January 20, 2025. Intervenors may request to participate in a public hearing, which is scheduled to begin on March 31. The CRTC would be expected to issue a decision in the months thereafter to align with the Governor-in-Council’s November 2023 Policy Directions to the CRTC, which directed the CRTC to make all changes necessary to implement that order within two years.
The Notice is a highly anticipated step in the CRTC’s Regulatory Plan to Modernize Canada’s Broadcasting System (Regulatory Plan), which the CRTC updated concurrently with publishing the Notice. The updated Regulatory Plan calls for research on the discoverability of Canadian content during Winter 2025, among other upcoming activities. For additional information on the CRTC’s decisions implementing Canada’s modernized broadcasting regulatory framework, please see our June 2024 Blakes Bulletin: Streaming Services Required to Contribute 5% of Revenues to Prescribed Funds and October 2023 Blakes Bulletin: CRTC Issues First Decisions Regulating Online Broadcasting Undertakings in Canada.
