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Briefing Note on Budget 2017

Briefing Note on Budget 2017

March 22nd, 2017

Briefing note from FRIENDS' Spokesperson, Ian Morrison, on the implications of the 2017 Federal Budget on media, cultural sovereignty and democratic participation.

While the 2017 federal Budget contains no proposals that bear directly on FRIENDS’ priorities, it does contains hints and undertakings of future action on a variety of issues that affect media, cultural sovereignty and democratic participation.

The Budget contrasts the leading global companies of 2001 to 2016 in Table 1 (page 18):

Within Part 3 – Canada’s Innovation Economy is a seven-page section on Canada’s Digital Future. It states that Budget 2017 “sets the stage for”, among other things, delivering “high-speed Internet access, so that all Canadians—urban and rural—can be part of the digital economy”, and supporting “an open and transparent Internet that emphasizes the freedom to

innovate, discuss and disrupt, including how we address issues of net neutrality, media and the creation of Canadian content.”

This section concludes with a few paragraphs on “An Open, Transparent and Innovative Internet”:

“Over the past year, the Minister of Canadian Heritage has consulted with Canadians on the future of the Internet, the future of news media, and the role of Canadian content in an increasingly digital world.

“For its part, the Government believes in an open and transparent Internet environment that emphasizes freedom—freedom to innovate, freedom to connect with others, and freedom of discussion.

“This is a future that must include Canada’s creative entrepreneurs and cultural leaders, who are essential to building an inclusive and innovative Canada. From advertising and design to television and film to fashion and publishing, Canada’s creative industries are facing rapid and disruptive change, including the shift to online technologies, the push for new business models, and increased competition due to globalization. Along with these risks comes the opportunity for Canada—and its creative sector—to lead the way in creating new experiences, new technologies, and new, well-paying jobs for Canadians.

“Over the next year, the Government will outline a new approach to growing Canada’s creative sector—one that is focused on the future, and on bringing the best of Canada to the world, rather than a protectionist stance that restricts growth and limits opportunities.

“The Government also recognizes that Canada’s media industries, and the systems that allow for broadcasting, distribution and the exchange of ideas, are fundamentally changing in the digital age.

“To ensure that Canadians continue to benefit from an open and innovative Internet, the Government proposes to review and modernize the Broadcasting Act and Telecommunications Act.

“In this review, the Government will look to examine issues such as telecommunications and content creation in the digital age, net neutrality and cultural diversity, and how to strengthen the future of Canadian media and Canadian content creation. Further details on the review will be announced in the coming months.”

While it is disappointing that the government has done nothing practical to strengthen Canadian media in Budget 2017, the above comments place media reform squarely on the agenda for the coming year.

It’s two minutes to midnight for Canadian media, particularly in small and medium markets where a majority of Canadians live. We have seen newspapers lose half their revenue in the past decade, and local television stations have lost almost 20% since 2012. Thirty per cent of Canada’s journalists have lost their jobs since 2010. Canadian media are too important for democracy not to act on this evidence of an impending crisis.

FRIENDS calls on the federal government to act on our recommendations to address this crisis by denying the deductibility of advertising on foreign digital media – a measure that would generate annually $1 billion in new tax revenues and inject $400/500 million into Canadian television and print media.

Faced with clear evidence of newspapers shuttering and projections that up to half of Canada’s local television stations may fade to black by 2020, the government’s failure to act in Budget 2017 can only be explained by its presumed anxiety that applying Section 19 of the Income Tax Act to foreign digital media giants such as Google and Facebook will provoke American retaliation in the forthcoming NAFTA negotiations.

Ian Morrison
FRIENDS of Canadian Broadcasting

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