Film, video and photography
Two laws apply to film at the federal level in Canada: the National Film Act (1985), which applies to the National Film Board, and the Telefilm Canada Act (1985, amended 2005), which applies to Telefilm Canada. The Standing Committee on Canadian Heritage in Parliament recommended that the mandate of Telefilm Canada, the National Film Board and other federal cultural agencies be better aligned toward common objectives while clearly delineating their respective roles and responsibilities. The government is reviewing the Acts of the NFB and Telefilm Canada and will make legislative changes in the coming years as required.
In 1995 the government of Canada established the Canadian Film or Video Production Tax Credit (CPTC) and in 1997, the Film or Video Production Services Tax Credit Programme (PSTC). The CPTC Programme comprises a fully refundable credit of up to 12% of the net total cost of assistance of an eligible production. The PSTC is equal to 11% of salary and wages paid to Canadian residents or taxable Canadian corporations for services provided to film production in Canada.
In February 2005, amendments to the Income Tax Act (1985) were approved concerning the CPTC Programme which supports film and video production in Canada by providing a tax credit equal to 25 per cent of qualifying labour expenditures, valued at approximately CAD 185 million in 2006. The intent of the modifications is to simplify the credit and ensure that tax assistance is appropriately targeted. The amendments include the following:
- the limit on the base of qualifying labour expenditures was raised to 60 per cent of the total cost of a production from the previous 48 percent rate;
- labour expenditures in respect of non-residents of Canada (other than Canadian citizens) are no longer eligible for the credit;
- the holding of an interest in a film or video production by a person other than the production corporation no longer disqualifies the production from eligibility for a tax credit, unless the production or one of the investors is associated with a tax shelter. However, the credit continues to be available only with respect to production expenditures made by the production corporation; and
- if a government entity is an investor, that investment will be treated in the same manner as other forms of government assistance.
In 2003, the PSTC tax credit was raised to 16 percent from 11 percent of salary and wages paid to Canadian residents or taxable Canadian corporations (for amounts paid to employees who are Canadian residents) for services provided to the production in Canada. This refundable tax credit has no cap on the amount that can be claimed. The Department of Canadian Heritage also announced the results of public consultations through the Canadian Audio-Visual Certification Office in regard to copyright ownership, acceptable share of revenues, format, programmes and screen credits and production control guidelines.
In March 2008, the Minister of Canadian Heritage, Status of Women and Official Languages issued a public statement indicating that under a proposed amendment to the film or video tax credit regime, the current rules of the Income Tax Act will be changed to disallow “extreme or gratuitous” films. The government contended that the proposed Bill C-10 “has nothing to do with censorship and everything to do with the integrity of the tax system…The modifications in question will affect a very small number of the over 1 000 productions that receive tax credits annually.”
Canada’s television quotas are administered by the CRTC based on ownership of the production company, expenditures paid for services to Canadians or incurred in Canada, and predominantly, on the nationality of the producer and key creative personnel. The CRTC certifies programmes as Canadian if the producer is Canadian, key creative personnel are Canadian and at least 75% of service costs and post-production laboratory costs are paid to Canadians. Canadian content quotas in radio, set at 35% of airtime each week, are administered according to the MAPL system (music, artist, production and lyrics), which supports the exposure of Canadian music performers, lyricists and composers to Canadian audiences and a strengthened Canadian music industry. The CRTC also maintains a 65% French-vocal music content requirement each week and at least 55% of the popular vocal music selections broadcast between 6AM and 6PM, Monday through Friday, must be in the French language (see chapter 3.5.1).
In 2002, the government launched a review of the definition of Canadian content in film and television production. However, regulations refer to the mandated availability of Canadian content, which, for television, is 60% from 18:00 to 24:00. They do not necessarily mean that the programming is in fact viewed at the same levels. For example, in 2003, viewing of English-language Canadian content television during prime-time (19h00 to 23h00) was substantially lower at 23.1% than its availability (36.1%) while the comparable figures for French-language Canadian content television were 78.4% viewing and 65.6% availability. All day viewing of Canadian content on television was 43.2% in 2003. In 2003, Canadian programs garnered 78% of the total viewership to French-language programmes and 37% of the total viewership to English-language programmes. Viewing by English-language viewers to Canadian drama and comedy programmes was 11.6%. In contrast, the viewing share for Canadian drama and comedy programmes by French-language viewers was 44.5% in 2003.Since then, audience statistics have been switched to the BBM TV meter survey and the CRTC and the Department of Canadian Heritage no longer use the viewing statistics from BBM TV diary surveys. The new meter data system provided by BBM does not allow for the calculation of viewing shares during peak hours along comparable lines with trend line information. The latest television and radio audience figures for all content (not just Canadian content) are contained in chapter 6.2.
Critics argue that Canadian content should be defined according to other considerations than “citizenship” or “residence” such as theme and subject matter, location of production and post-production, copyright and rights ownership, and international and domestic distribution rights. It has also been suggested that private broadcasters could be required to dedicate a percentage of their budget – rather than a percentage of airtime – to Canadian programmers. Currently, with the large levels of spending of Canadian broadcasters (private TV, public (CBC / SRC and educational) TV, and pay and specialty services combined) on telecasting Canadian programmes (CAD 2.2 billion in 2006) and federal subsidies for Canadian television programming, non-Canadian still dominate the top 20 TV programmes watched by English-Canadians whereas almost all of the top 20 programmes viewed in Quebec were Canadian. Viewing of English-language Canadian content on television in Canada is far less compared to other English-language markets such as the UK and Australia where 9 and 8 of the top shows watched are domestically produced, respectively. The realities are different in the Canada’s French-language market where language has a buffering effect on foreign (US) competition. Telefilm Canada currently administers funding eligibility requirements for marketing and other audience-building efforts. (Statistics Canada and CRTC 2007)
In June 2003, the Review of Canadian Content in the 21st Century in Film and Television Productions (Francois Macerola) made recommendations to the government, among which are the following: (1) replace the current point / expenditure system by a creative expenditure model; (2) one arm’s length organisation be made responsible for the certification of Canadian content: a proposed Canadian Content Commission; (3) the Canadian Film or Video Production tax Credit be scaled upwards; (4) Canada should seek preferential treatment and special association status with the most important multilateral initiatives especially those within the European Union; and (5) the distribution of Canadian feature films in Canada should continue to be reserved for Canadian-owned and -controlled companies.