September 28, 2017 2:52 pm
Updated: September 28, 2017 5:06 pm

Federal government announces U.S. investments as part of new Canadian media strategy

Speaking in Ottawa Thursday, Heritage Minister Melanie Joly outlined the federal government's "Creative Canada" vision designed to stimulate Canada's entertainment and media industries.

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The federal government announced a strategy Thursday aimed at helping Canada’s media industry, in part by turning to American companies.

The centrepiece of this strategy is an agreement with Netflix, billed as the first of its kind. The company will set up a production house in Canada and is required to spend $500 million over five years on producing Canadian content, and another $25 million on supporting French-Canadian content. Because the deal was made under the Investment Act, Netflix could be fined if it doesn’t deliver.

This investment strategy avoids either Netflix or Canadian consumers paying a “Netflix tax”, something that the opposition has repeatedly accused the Liberals of seeking.

READ MORE: Netflix to invest $500M into producing Canadian content

Canada’s major private broadcasters, Bell, Rogers and Corus (which owns Global stations) currently have to allocate 30 per cent of their revenues to Canadian programming expenditures and five per cent to programs of national interest, such as Canadian dramas, documentaries and award shows.

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The government also announced Facebook would partner with Ryerson University’s School of Journalism and Digital Media Zone to create a digital news incubator. It did not provide any specific details on what kind of funding the incubator would receive and what exactly it would do beyond providing participants with start-up funding and mentorship to “jumpstart digital news innovation.” Facebook earned almost $4.6 billion in revenue from the U.S. and Canada in the first half of 2017, according to its financial statements.

The overall media strategy, called “Creative Canada,” wasn’t focused entirely on American companies although most of the concrete funding announcements on Thursday related to Netflix.

“Overall, the Government’s proposed new Cultural Policy proposes very little that is new. Despite months of hype, the policy in place remains largely unchanged from what has been in place for years,” said Peter Van Loan, the Conservative Party’s critic for Canadian Heritage and National Historic Sites in a statement.

However, he said Canadians are proud of their performers and creators and Canadians continue to be successful globally. “Canadians are showing that they have stories to tell the world, and music to perform that people everywhere want to hear. We need to continue to allow Canadians in the cultural sector to flourish and succeed – not just at home, but everywhere on the planet.”

The strategy’s three pillars, making sure Canadian content gets produced, selling that content in Canada and abroad, and supporting local news and public broadcasting, were billed by Heritage Minister Melanie Joly as helping creators to “address the challenges of today’s digital reality, and ensure that Canada’s voice will be heard loud and strong on the world stage.”

A strong domestic market is vital, said Joly, and it is a precondition for global success.

WATCH: Speaking in Ottawa Thursday, Heritage Minister Melanie Joly said the government plans to re-open the Broadcasting Act to ensure Canada’s domestic content market remains strong in the future.

The strategy to strengthen Canadian content includes promises of increased government funding to the media industry. Most notably, the government is promising to increase the federal contribution to the Canada Media Fund, a pool of money that helps to support the television and digital media industry.

However, this is just to keep the fund at more or less its current level – about $349.7 million. The top-up is necessary, according to Heritage officials, because contributions from Canadian media companies have been declining. The federal government will announce at a later date exactly how much money it will be putting into the fund.

The government is also investing $125 million in a creative export strategy, aimed at promoting Canadian media abroad through trade missions, export funds and an investment in Telefilm – a group that finances and promotes the Canadian film and television industry.

Other announcements, like investing in local news through the Canada Periodical Fund and helping to create creative hubs, where artists, creators and startups can collaborate, didn’t have specific dollar figures attached.

“Our approach will not be to bail out industry models that are no longer viable,” said Joly, speaking about local news. “Rather we will focus our efforts on supporting innovation, experimentation and transition to digital.”

WATCH: Speaking in Ottawa Thursday, Heritage Minister Melanie Joly said that while the federal government won’t bail out “failing” news industry models, they will support “experimentation” in the local news sector.

The government also previously committed to investing $1.9 billion over five years in its 2016 budget.

WATCH: Prime Minister Trudeau defended a $500-million agreement between the government and Netflix that is intended to provide a platform for Canadian content makers to share stories with global markets.

© 2017 Global News, a division of Corus Entertainment Inc.

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