Earlier this year the Canadian Radio-television and Telecommunications Commission (the CRTC) held a number of workshops with various members of the Canadian audiovisual industry to discuss the definition of Canadian content (CanCon) and the future of film and television in Canada. The workshops were intended to be a forerunner to broader public consultation on the matter of CanCon as the CRTC begins to implement the CanCon-related elements of the Online Streaming Act (known as Bill C-11 before it was enacted in April 2023).^[1] What will be interesting to see is whether and how the CRTC’s modernization of CanCon impacts the Canadian Audio-Visual Certification Office (CAVCO) and its own CanCon criteria for the Canadian Film or Video Production Tax Credit (the CPTC) or vice versa.

For those readers that may not be familiar with the CanCon framework, the CRTC and CAVCO are the principal authorities that administer the Canadian content regime. The CRTC is an independent administrative tribunal that regulates the broadcasting and telecommunications sectors in Canada. It is responsible for issuing licenses to broadcasters or exempting them from licensing on the condition that a certain amount of programming will be Canadian content. Accordingly, broadcasters often pay premium license fees for productions certified as CanCon to fulfill their regulatory obligations. CAVCO, on the other hand, is the government office that facilitates Canada’s federal tax credit programs for film and television, including the CPTC, which offers Canadian producers higher tax credit incentives for domestic productions.[2] Both adhere to similar criteria in their traditional determination of CanCon, including, for example, a point-based system for key personnel,[3] Canadian producer control requirements[4] and minimum Canadian spend obligations for audiovisual productions.[5]

Yet, despite their similarities, there are key differences between the two CanCon systems. Overall, CAVCO sets a higher standard for CanCon by requiring the following additional criteria:

1. Ownership Requirement: copyright of the audiovisual production must be owned by Canadians, whether the Canadian production company or a “prescribed person”;[6]
2. Exploitation Requirements:
   1. The initial licensing of the commercial exploitation rights of the audiovisual production must be controlled by Canadians, whether the Canadian production company or a “prescribed person”;[7]
   2. The Canadian production company must retain a reasonable participation in exploitation revenues in non-Canadian markets (e.g., a minimum of 25% of net profits in );[8]
   3. A non-Canadian entity is prohibited from distributing in Canada for the initial two-year period during which the audiovisual production becomes commercially exploitable; and
3. Shown in Canada Requirement: written confirmation from a CRTC-licensed broadcaster or a Canadian distributor confirming that the audiovisual production will be “shown in Canada” during the initial two-year exploitation period.

Further to the above, the eligible genres under the CAVCO system are more limited than under the CRTC’s system. News and current events, sports, reality and awards[9] programming are ineligible for certification under CAVCO and thus, ineligible for CPTC.

Returning to the findings of the CRTC workshops earlier this year, the matter of copyright ownership was a key discussion point. During the workshops, two questions were raised: (i) should copyright be considered in the CRTC’s review of Canadian content definitions and if so, how; and (ii) how can the CRTC help support Canadian ownership of intellectual property and what does that mean for the overall system?[10]To quote the Ipsos report studying the workshops (the Ipsos Report): “unsurprisingly, positions [on the topic] were in part driven by stakeholder type.”[11]

On the one hand, certain stakeholders (most especially Canadian producers) advocated for the inclusion of a Canadian copyright requirement under the CRTC’s CanCon definition, stating that, in their view, Canadian ownership distinguishes Canadian productions from foreign services productions.[12]Furthermore, according to the Ipsos Report, these stakeholders stated that this additional condition of ownership would “in turn generate more financial stability to the broader AV ecosystem, as Canadian companies are seen as more likely to reinvest into the system.”[13]

On the other hand, non-Canadian streamers expressed that copyright ownership is fundamental to their business models, allowing them to monetize and promote content over their platforms and in multiple jurisdictions, according to the Ipsos report.[14] Some streamers seemed receptive to different models of copyright ownership[15] and some even suggested incentivizing ownership by providing additional credit for productions in which Canadians hold copyright.[16]

Some participants acknowledged the nature of doing business with non-Canadian streamers meant forfeiting ownership, but the prospect of securing funding while having their content streaming on major platforms in multiple countries was a positive one.[17] Certain Canadian broadcasters took a dual position stating that, on the one hand, the flexibility afforded under the current CRTC system which excludes ownership as a requirement, allows broadcasters to widen the scope of content they can broadcast while still fulfilling their CanCon-quota.[18]On the other hand, they recognized that such a Canadian ownership requirement in the CRTC’s CanCon definition could potentially unlock direct partnership opportunities between Canadian broadcasters and non-Canadian streamers.[19]

Other participants put forth the idea of retaining a majority stake or a percentage of copyright without the strict condition of retaining all of it, referencing the ownership arrangements in other jurisdictions such as the UK and France.[20]A 2022 report prepared for the Motion Picture Association of Canada (the MPA Report)[21] reviewed the treatment of copyright ownership in other jurisdictions and found that most other countries have adopted a more flexible approach to copyright ownership within their own national content programs. For example, there is no ownership requirement to access national content tax credits and other production incentives in key jurisdictions such as the UK, Germany, Netherlands, Portugal and Czech Republic.[22] In some territories, like New Zealand, copyright ownership sits within the cultural test for which a producer can earn a point within the national point-system, providing flexibility for producers within the overall points structure.[23] Jurisdictions such as France and Australia require an ownership stake commensurate with the producer’s financial participation in order to access domestic tax credit programs,[24] while Spain requires a minimum of 15% producer ownership in the production for its national production fund.[25]

Although the CRTC workshops specifically addressed modernizing CRTC’s definition of CanCon, which, as you recall, is separate from CAVCO and content tax credits, the matter of copyright within CanCon in current and future discourse is significant. Although the CRTC does not presently require any portion of Canadian copyright ownership for certification, it will be interesting to see how this issue unfolds; particularly how, if at all, the outcome of CRTC’s decisions on the matter of copyright influences CAVCO. Some participants in the CRTC workshops expressed a desire to “match” definitions of CanCon and that including a copyright requirement under the CRTC would more closely align with CAVCO’s definition.[26]There could be advantages or disadvantages to a uniform definition of Canadian content, but in this shifting media landscape, some stakeholders might question if tightening regulations is the solution. The Ipsos Report reported a range of opinions. That said, the MPA Report shows that flexibility on copyright ownership in national content systems have served other countries just fine. In fact, the MPA Report recommended Canada remove the strict copyright requirement under CAVCO to align the content regime with global industry production models and the national systems of other countries to remain competitive.[27] With public consultations[28] now underway at the CRTC until January 20, 2025, followed by a public hearing in March and April 2025, one thing’s for certain: change is coming.

For more information about this topic, please contact the author, Lindsay Paquette.

[1] Online Streaming Act S.C. 2023 c. 8, online: < https://laws-lois.justice.gc.ca/eng/AnnualStatutes/2023_8/>.

[2] The federal tax credit programs are jointly administered by the Department of Heritage, through CAVCO, and by the Canada Revenue Agency (CRA).

[3] A minimum of 6 out of 10 key creative positions must be occupied by Canadians, with the mandatory requirement of director or screenwriter and the first or second lead performer being Canadian. The key creative positions eligible for CanCon points are director (2 points), screenwriter (2 points), first and/or second lead performer (1 point for each), production designer (1 point), director of photography (1 point), music composer (1 point), and picture editor (1 point). Note that animation productions have different criteria. For more comprehensive information please see CAVCO guidelines (online: <https://www.canada.ca/en/canadian-heritage/services/funding/cavco-tax-credits/canadian-film-video-production/application-guidelines.html>) (the “CAVCO Guidelines”) and CRTC guidelines (online: < https://crtc.gc.ca/canrec/eng/guide1.htm>) (the “CRTC Guidelines”).

[4] The producer must be Canadian and all producer-related positions (e.g., producer, coproducer, line producer) must be held by Canadians and/or Canadian entities, and the Canadian producer must exercise all creative and financial control over the production from development of the project (i.e., from the time the Canadian producer secured the underlying rights) until its completion. Note that limited exemptions are available. For more comprehensive information please see CAVCO Guidelines and CRTC Guidelines.

[5] A minimum of 75% of eligible program expenses and 75% of post-production expenses must be paid for services provided by Canadians or Canadian companies. For more comprehensive information please see CAVCO Guidelines and CRTC Guidelines.

[6] CAVCO Guidelines at s.3. Although the Canadian producer must demonstrate full control and decision-making authority over the development and production of the audiovisual production, there is no express ownership requirement under the CRTC during production or after completion.

[7] CAVCO Guidelines at s.8.

[8] CAVCO Guidelines at s .10.05.

[9] Certain awards programming is eligible under CRTC if recognized as “programs of national interest,” see List of award shows that qualify as programs of national interest, online: <https://crtc.gc.ca/eng/info_sht/tv15.htm>.

[10] CRTC, Defining Canadian Content – Workshops with Stakeholders and Industry: What We Heard Report, September 2024 IPSOS online: <https://crtc.gc.ca/eng/publications/reports/ipsos24.htm> (the “Ipsos Report”) at s.4 (copyright).

[11] [Emphasis added] Ibid.

[12] Ipsos Report at s.4 (Fundamental Nature of Canadian ownership).

[13] Ibid.

[14] Ipsos Report at s.4 (Challenges arising from business models of streamers).

[15] Ibid.

[16] Ibid. It was not clear from the report what was necessarily meant by “credit”.

[17] Ipsos Report at s.4 (Presentation of more nuanced and neutral positions).

[18] Ibid.

[19] Ibid.

[20] Ibid.

[21] MDR Communications Report (prepared by Maria De Rosa and Marilyn Burgess), Defining Canadian Content: Approaches Taken in Other Jurisdictions and Lessons Learned for Canada, February 23, 2022, Motion Pictures Association Canada, online: < https://www.mpa-canada.org/research_docs/defining-canadian-content-approaches-taken-in-other-jurisdictions-and-lessons-learned-for-canada/> (“MPA Report”).

[22] MPA Report at 16.

[23] Ibid. For a comparative look at Canada’s existing point-based system and the national point-based structures of other countries, please see my recent blog post Canadian content in film and television: A look at the point-based system, 40 years on.

[24] MPA Report at 17.

[25] Ibid.

[26] Ipsos Report at s.4 (Suggestions of simplicity and flexibility for incorporating copyright in CanCon certification).

[27] MPA Report at 6: “…the following [change] would better align the Canadian content system to the realities of global production and to the systems in other jurisdictions: remove current copyright ownership requirement as a determinant factor, providing Canadian producers with the flexibility to decide with financing partners the best business deals for their respective companies [emphasis added].”

[28] See CRTC consultations on definition of Canadian content and flexible approach for radio and television, online: < https://www.canada.ca/en/radio-television-telecommunications/news/2024/11/crtc-consults-on-definition-of-canadian-content-and-flexible-approach-for-radio.html>.