Canada: Lights, Camera, Reaction To ACTRA's New National Commercial Agreement

ACTRA's new National Commercial Agreement (which is now in force and is not set to expire until June 30, 2017) includes important amendments to its previous version, as outlined in the Memorandum of Settlement. Of particular note to advertisers, the new agreement now includes provisions that will significantly facilitate the use of testimonials and members of the public in commercials.

On the former point, the new agreement now includes a general exclusion for "persons appearing as themselves in a situation where they are unscripted and truth in advertising (inclusive of the Competition Act and the Canadian Code of Advertising Standards) is required." An example where this exclusion would generally apply is to an individual who is providing a testimonial regarding his/her experience with the use of a product, particularly if the product is intended to elicit a noticeable physical effect. Additionally, this exclusion would also likely apply to a professional or scientific authority who is providing an opinion regarding the advertiser's product.

Regarding the latter point, the new agreement has expanded the waiver for members of the public to apply generally to all commercials, whereas it previously only applied to "New Media Commercials". According to the current waiver, members of the public who are not cast or scripted may appear in a commercial, provided the engager pays a $200 fee. Further, the waiver will be "automatic" if the members of the public appear in a manner that falls within at least one of the following categories (which have been summarily paraphrased, further requirements apply – for details, please see Article 707): (i) as part of undirected background scenes; (ii) as part of undirected/unscripted scenes (for example, where members of the public are reacting to an event and the event is not staged for the purposes of making the  commercial; (iii) at a live event; (iv) as persons being interviewed on the street, at a public venue or at a live event; or (v) as part of a hidden camera commercial.

Also, the Section applicable to "New Media Commercials" has received a major overhaul. Notably, a contract service fee will now have to be paid and the applicable minimum session fees now mirror their television and radio commercial counterparts. Further, an advertiser will be permitted to use a commercial it produces for television or radio broadcast on: (i) one of its websites at no additional costs (without the previous super requirement or pixel limitation); (ii) multiple websites that it owns or controls for 365 days, upon payment of one applicable session fee (provided any performers in residual categories are re-contracted for this use); (iii) unlimited digital, electronic, or other type of delivery platforms for one year, upon payment of payment of two applicable session fees (provided any performers in residual categories are re-contracted for this use); or (iv) short-life unlimited digital, electronic, or other type of delivery platforms for 31 days, upon payment of certain prescribed fees for the applicable performers (which are less than the previous requirement to pay one applicable session fee pursuant to this option).

In terms of "New Media Commercials" moved over to television or radio broadcast, performers must be re-contracted and paid a minimum of two applicable session fees (less the amount already paid in relation to "New Media" use fees), provided the applicable residual fees are also paid. For "New Media Commercials" moved over to "Other Media" (for example, movie theatres, mobile displays, in-store monitors, shopping centres, in-flight exhibition, stadia and/or arenas), performers must be re-contracted and paid a minimum of one applicable session fee (less the amount already paid in relation to "New Media" use fees), provided the applicable residual fees are also paid. 

Finally, the new agreement clarifies the terms governing commercials that are produced in Canada, but that will only be used in U.S. broadcasts. In respect of on-camera SAG-AFTRA performers brought into Canada to produce such commercials, consistent with SAG-AFTRA's Global Rule One, the SAG-AFTRA Commercials Contract shall apply (however, work permit fees will have to be paid pursuant to Addendum No. 4 of the ACTRA National Commercial Agreement). In respect of all other performers in such commercials, the ACTRA National Commercial Agreement shall apply (except for residual fees, which must be paid according to the SAG-AFTRA Commercials Contract residual rates, in Canadian dollars).

The amendments appear to be in line with the growing importance of cross-platform and multi-jurisdictional advertising campaigns, and recent trends in the advertising industry towards placing greater importance on authentic testimonials and candid reactions from members of public. In any event, great care must be exercised to ensure a commercial complies with all applicable provisions as the agreement can be applied quite broadly; however, it is generally understood that the agreement does not apply to the use of still images in non-broadcast media advertising (provided such images were not obtained at a television commercial work session, or from television commercial footage).

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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