Time to Question Government-Subsidized Culture

(This column originally appeared in the Financial Post on December 8th, 2016)

This past June, Heritage Minister Melanie Joly announced a sweeping review of the federal government's Canadian content policies. "Everything is on the table" declared Joly--except the possibility of a so-called "Netflix tax" on the popular streaming service which would likely hit consumers squarely in the pocketbook. Unfortunately for Canadian consumers, it's not the only new tax being contemplated by the Trudeau government.

At the time of her announcement, the Canadian Radio-television and Telecommunications Commission (CRTC) had just completed several weeks hearing from dozens of stakeholders as part of its review of basic telecommunications services. A recurring theme were concerns about the cost and accessibility of broadband internet, especially in remote parts of the country. Predictably, the first reflex of most stakeholders when confronted with high prices was not to ask whether they could be driven down through, say, more competition, lower taxes or smarter regulation. Instead there was much talk about the possibility of imposing a brand new tax (pronounced: "revenue stream") on one group of people in order to better subsidize services for another. Fast forward to this fall, with Joly entertaining the possibility of a new internet service provider (ISP) tax as one possible way to generate cash for the "Canadian cultural community". In effect, the government spent weeks examining the challenges of expensive internet access--and then floated a proposal that would make the internet more expensive for everybody.

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Perhaps these types of policy contradictions are inevitable when the default view is that the best thing a government can do to solve any problem is squeeze the public just a little bit more. But is it true that our cultural industries are bereft of government support? Consider that the Department of Canadian Heritage already has a budget of $1.4 billion. That doesn't include the CBC. Or any of the federal museums. Or the National Film Board. Even lesser-known bodies like the Canada Media Fund (CMF), an entity which 99 per cent of Canadians have likely never heard of, has an annual budget of $366 million--money all cribbed from taxpayers either directly (from a government subsidy) or indirectly (through the cable companies who pass on the costs to consumers). The CMF then turns around and hands this money back to the large cable companies (the CBC, Bell and Shaw are the three biggest recipients) to produce government-approved "Canadian content". As others have argued, having official government criteria for defining Canadian content is in many ways a misguided endeavour. But even if it were not, we are left with two possibilities for this type of subsidized content: there is either sufficient public demand for it, or there is not.

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If there is sufficient demand, why do we not expect producers to use their own money to produce it, and consumers to spend their own money to consume it? And if there is not sufficient demand, why are we siphoning hundreds of millions of dollars out of the pockets of all Canadians to pay for it, when they have no interest in consuming it--especially at a time when we are running massive deficits and have countless other priorities? Whether a "Netflix tax" or an ISP tax, the unstated assumptions are the same: we absolutely must have government directing the creation of official Canadian content; Canadian taxpayers must be forced to pay for it; and however much we're spending on such initiatives now, surely more would be better. It's well past time these sacred cows were challenged. If Minister Joly really wants to do a review of Canada's cultural policy where "everything is on the table", confronting these assumptions should be right at the top of her list.