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After CRTC porn debacle, this think tank says funding for Canadian content needs change

The Fraser Institute is hot and bothered over the CRTC's suggestion that three Canadian pornography channels may not be airing enough homegrown content.

A report issued Wednesday by the free-market think tank says the federal government needs to reconsider its regulation and financial support of the domestic entertainment industries, including the Canadian content quotas that made the broadcast regulator the butt of jokes last week.

In the report entitled The Entertainment Industries, Government Policies, and Canada's National Identify, Steven Globerman, a professor at Western Washington University in Bellingham, writes that technological disruptions may be creating an opportunity to overhaul the industry's entire regulatory framework.

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At the moment, Canadian broadcasters benefit from a long list of regulatory protections and subsidies, including production tax credits, rules barring foreign owners, government-mandated production funds, so-called "simultaneous substitution" rules which enable a Canadian channel to overlay its signal on top of a U.S. channel showing the same program, and quotas for domestically produced programming.

But Mr. Globerman says that, if the aim is to protect jobs and reinforce Canadian identity, there may be more efficient ways of doing so, especially in an era where the Internet is spawning so many new shows and personalities.

Most troublingly for proponents of government protection under the guise of nation building, Mr. Globerman suggests there is little proof that Canadians' sense of themselves – their values or attitudes – is connected to what they see on TV or listen to on the radio. (The studies are indeterminate, and they do not seem likely to be resolved any time soon.)

While the report does not muster much new data, its release comes days after the issue of Canadian content regulations was thrust into the spotlight by a CRTC announcement that it will hold a hearing next month on whether three X-rated channels are living up to license commitments to air enough domestically produced programming.

In a statement, Mr. Globerman framed the issue in stark terms: "Why is the government concerned that subscribers to adult channels are not receiving a certain quota of Canadian-made adult entertainment?" he asked. "The only reason is to protect Canadian adult movie producers from international competition."

That is not entirely true: He notes in the report that there are potential "externalities" associated with the production and consumption of cultural programming – improved civic engagement, for example – that a profit-oriented private company might not be inclined to nourish.

To that end, he suggests private producers and broadcasters should get out of the business of fulfilling public policy mandates. "Canadian-owned companies should not be expected to produce unprofitable programming, even if that programming can be expected to make significant contributions to Canadian identity, unless they are subsidized by the government to do so," he writes.

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At times, his analysis of the Canadian industry seems unfamiliar with the hand-to-mouth nature of so many of its foot soldiers. Canadian feature films are notorious underperformers – all of them, together, earning perhaps 3 per cent of the annual domestic box office in an average year, with U.S. movies taking the lion's share – yet he states: "The large commercial rewards that are attainable from success in the feature film and popular music businesses should be sufficient motivation for aspiring Canadian performers to hone their talents." That would be news to just about any Canadian performer, aspiring or veterans.

Follow me on Twitter: @simonhoupt

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