The Canadian Radio-television and Telecommunications Commission (CRTC) is continuing its efforts to modernize the broadcasting regulatory landscape in Canada following last year's passage of the Online Streaming Act and recent CRTC stakeholder listening sessions. On November 15, 2024, the CRTC launched two additional public consultations to seek input from the public on proposed updates to key aspects of Canada's broadcasting industry. The first is the long-awaited consultation about potential updates to the CRTC's current definition of "Canadian content" (CanCon) for CRTC certification purposes, while the second seeks input on the CRTC's proposal to create more flexible regulatory requirements for radio stations.
Background
Since 2023, the CRTC has been focused on the modernization of the regulatory framework for Canada's broadcasting and media production industries. As discussed in a previous Cassels Comment, this process began with the Online Streaming Act receiving royal assent in April 2023. One of the most notable changes the Online Streaming Act made to the industry was to establish "online undertakings" as a new class of "broadcasting undertakings" that fall under the CRTC's regulation.
In response to the Online Streaming Act, the CRTC published an extensive, multi-phase Regulatory Plan which outlined its strategy to construct a modernized regulatory framework for the Canadian broadcasting industry. This strategy has included various public consultations hosted by the CRTC, seeking industry and public input on its proposed updates to the broadcasting regulatory framework.
Among many other confirmed and contemplated revisions to the CRTC's broadcasting regulatory framework, one CRTC proposal that has gotten a particularly significant amount of industry attention is a potential revision to the CRTC's definition of CanCon to align with the modern realities of the Canadian and global production of film and television (audiovisual) content. The CRTC's CanCon certification process currently classifies film or television programs as "Canadian" for CRTC purposes using a points system in which the program earns "CanCon points" based on how many of the key creative positions in the program's production (such as directors, screenwriters, and editors) are held by Canadians. In most cases, a program must receive at least 6 out of 10 possible CanCon points and be produced by a Canadian producer who retains creative and financial control of the production from development to exploitation to be certified as a "Canadian" program by the CRTC.
As discussed in our previous Cassels Comment, the CRTC began exploring a potential CanCon definition revision earlier this year. In February and March of 2024, the CRTC held private workshops with 382 stakeholders within the audiovisual industry across Canada to hear concerns, opinions, and points of view regarding the CRTC's current definition of CanCon. The CRTC used these workshops to publish a "What We Heard Report" in September 2024, which indicated that while most participating stakeholders agreed that an updated CanCon definition should not introduce significant new complexity in the Canadian content certification system, many stakeholders disagreed as to what a "simpler" system should look like. Overall, however, stakeholders generally agreed that rapid changes to how Canadians consume and contribute to film and television content in the streaming era, as well as the increased role that foreign investment and collaboration plays in the creation of content with a Canadian identity and made by Canadian production service workers, necessitates some re-evaluation of the current approach.
The Modernization of the Definition of CanCon
Building on its private workshops earlier this year, on November 15, 2024, the CRTC published Broadcasting Notice of Consultation CRTC 2024-288, seeking comments from interested parties and members of the public regarding the modernization of the definition of CanCon within Canada's audiovisual sector. In its introduction to the Notice of Consultation, the CRTC cites a wide range of factors that justify a modernized definition, including the increase in the size and diversity of Canada's population in recent decades; the dramatic shifts in the way that Canadians consume content (including through both traditional broadcasting undertakings and online undertakings); and the increased competition that audiovisual content producers, broadcasters and distributors face when developing audiences for their content.
Specifically, the CRTC is seeking comments on five potential ways that it is currently proposing to amend the current definition of CanCon:
- Expanding the list of "key creative positions" that are considered when assessing a program's number of CanCon points, as well as amending existing positions;
- Creating a definition of "showrunner" and requiring a program's showrunner (if it has one) to be Canadian in order for the program to receive CanCon certification;
- Potentially including cultural elements within the certification framework (while the CRTC has taken the preliminary view based on its private workshops that these elements should not be included in the framework due to the difficulty in defining them, it is open to submissions from the public in support of these elements);
- Revising the Canadian creative control requirement to establish a more flexible approach whereby certain key creative positions could be awarded CanCon points if they are shared by both Canadians and non-Canadians; and
- Creating a more flexible approach to the traditional Canadian intellectual property ownership requirement, in which intellectual property ownership would be balanced against other economic and creative factors that facilitate collaboration between Canadian undertakings and foreign undertakings and investors.
In addition to seeking input on a modernized definition of CanCon, the Notice of Consultation also seeks stakeholder input on various other issues that are top of mind for many participants in Canada's broadcasting and production industries, including whether and how to adjust Canadian Programming Expenditures (CPE) and Programs of National Interest (PNI) expenditure requirements on audiovisual Canadian programming; the funding of at-risk programming; how to address the use of artificial intelligence by audiovisual creators and broadcasters; and how to ensure access to data and information for the broadcasting industry to make informed choices about Canadian programs.
The Modernization of the Radio Regulatory Process
Separately, on November 15, 2024, the CRTC also published Broadcasting Notice of Consultation CRTC 2024-290, seeking submissions relating to updating the regulatory framework for Canadian radio broadcasters.
In its summary of the Notice of Consultation, the CRTC acknowledges the challenges currently faced by many traditional radio undertakings as many Canadians increasingly turn to streaming services for their audio content. At the same time, the CRTC recognizes the importance that radio continues to play in giving a voice to Canadians, in helping Canadians discover new music artists, and in acting as a strong local source of information and entertainment. The CRTC therefore aims to reduce the regulatory burden on radio undertakings operating in Canada, through new streamlined processes, a review of compliance measures, and identifying barriers faced by equity-deserving groups seeking to obtain broadcasting licences.
Specifically, this consultation seeks public input relating to:
- A revised licence term, potentially replacing the previous maximum licence term of seven years to a fixed or potentially indefinite term depending on the type of radio station;
- A potential broadening of broadcasting exemption orders to exempt a wider range of radio stations from the requirement to hold a licence (including campus stations, community stations, low-power commercial stations, and stations broadcasting news content focusing on local news), and how to develop these exemptions based on a radio station's revenues;
- Reviewing the current non-compliance measures for any changes and adjustments regarding short-term renewal, their effectiveness, imposing additional conditions, any improvements, imposing administrative monetary penalties and CanCon development contributions, and any incentive measures that could be implemented; and
- Amendments to the current licence renewal process for all radio stations, involving a simplified process and potential fixed renewal dates for similar types of stations.
Key Takeaways & Next Steps
Although the CRTC's two latest consultations address different topics and industry concerns, they both focus on strengthening the overall broadcasting industry landscape and endeavour to respond to the rapid changes that the industry faces due to technological advancement and shifting consumer behaviour. In both cases, the CRTC is signalling that it is alert to the need to reduce barriers for Canadian and Indigenous broadcasters and producers by offering them greater flexibility in an evolving, globalized industry while still maintaining strong local Canadian identities. In the case of the CanCon consultation, while it is still unclear how the definition of CanCon will ultimately change, the consultation offers insight into the CRTC's current direction in implementing changes that align with the goals of the Online Streaming Act.
The deadline for submissions is January 20, 2025, for both consultations. The CRTC has also announced that it will be holding a public hearing on March 31, 2025 with respect to the CanCon consultation, in which select interveners will be given the opportunity to expand on their submissions to the CRTC. More broadly, the CRTC has reiterated its plan to continue to implement these and other modernizations under its regulatory framework in consequence of theOnline Streaming Act,through to at least 2026.
The Cassels Entertainment & Sports Group has been closely following the updates to Canada's broadcasting system since the Online Streaming Act was first introduced. If you have any questions about the content of this article or how the Online Streaming Act and the CRTC's regulatory efforts may impact your business, please contact any member of our Group.
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.
