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Will U.S. streaming companies play ball with the CRTC?: Peter Menzies

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From the MacDonald Laurier Institute

By Peter Menzies

Domestic streamers have to live with the rules the CRTC comes up with, not so when it comes to global streamers

The fundamental weakness in Canada’s Online Streaming Act will be exposed for all to see on Nov. 20, when the Canadian Radio-television and Telecommunications Commission (CRTC) comes face-to-face with American streaming companies.

For the first time, the regulator will be dealing with companies that, if they don’t like the rules and the financial burden the CRTC imposes, are free to leave the country.

To be clear, neither Netflix, Disney+ nor any other company has yet suggested they are prepared to quit Canada. There have been no threats to do anything similar to what Meta did and Google might – stop carrying news – in response to the Online News Act. But there is nothing that compels foreign companies from continuing here if CRTC decisions make it no longer sensible for them to do so.

That shapes the conversation in a way that the commission, which commences a three-week-long hearing Nov. 20 involving 127 intervenors, isn’t accustomed to. Throughout its history, the primary players in CRTC procedures have always been captives of “the system” – domestic companies that depend for their existence on a commission license or rely upon the regulator’s decisions for their sustenance. They may not like the rules the CRTC comes up with, but they have to live with them.

Not so when it comes to global streamers that, as it turns out, are global.

Netflix’s base here is robust – 6.7 million subscribers – but that is just 10 per cent of its U.S. audience and only 2.8 per cent of its global subscriber base. According to its submission to the CRTC, it has already invested $3.5-billion in film and TV production since launching here in 2010 – roughly equivalent to the Canada Media Fund’s spend over the same period. And, it claims, people are 1.8 times more likely to view a Canadian production on Netflix than on TV. Let that sink in.

Disney+ makes similar arguments. It has 4.4 million Canadian subscribers out of a global total of about 147 million (down significantly this year). It points out that it has invested $1.5-billion in Canada, which is one of its top four production markets. As it gently states in its submission to the CRTC: “We encourage the commission to adopt a modernized contribution framework and a revised, modern definition of a ‘Canadian program’ that provide sufficient incentives for global producers and foreign online undertakings to continue to bring large-scale productions to, and make capital investments in, Canada.”

Large domestic companies that have been forced by regulation to contribute to the production and airing of certified Canadian content, meanwhile, argue for their “burden” in that regard to be reduced and shifted onto the backs of foreign companies.

In its submission, BCE Inc., which has a current profit margin of 21.2 per cent, describes the broadcasting system as in crisis, accuses streamers of having “contributed precious little to the Canadian system” and calls for its contributions to be reduced from 30 per cent to 20 per cent of the media division’s revenue – a figure it believes should be applied to all offshore streamers with more than $50-million in Canadian revenue.

BCE Inc. goes on to argue that if the commission takes its advice and forces the streamers to pay 20 per cent of their revenue directly into Canadian content funds, an additional $457-million – growing to $678-million by 2026 – will pour into the pockets of ACTRA, the Writers Guild and others involved in the creation of certified Canadian TV and film content.

And that, right there, is where Netflix, with a profit margin of 13 per cent clears its throat. Politely but firmly, it says the CRTC appears to have already made up its mind that streamers should be paying into funds and “submits that this is not an appropriate starting point.”

The decade prior to the introduction of the Online Streaming Act was by far the most prosperous in the history of the Canadian film and television industry, including in terms of Canadian content production.

Most of that growth took place beyond the reach of the CRTC, which was in charge of an increasingly irrelevant system upon which many legacy companies had grown dependent. But instead of fostering what was working, the government chose to sustain what wasn’t.

So now, as with the Online News Act, it’s playing at a table where it no longer holds all the cards.

Peter Menzies is a senior fellow with the Macdonald-Laurier Institute, a former publisher of the Calgary Herald and a previous vice-chair of the Canadian Radio-television and Telecommunications Commission (CRTC).

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Salary costs in Prime Minister’s Office increase under Trudeau

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From the Canadian Taxpayers Federation

By Ryan Thorpe 

Like all areas of Ottawa’s ballooning bureaucracy, the cost and size of the Prime Minister’s Office has increased under the Trudeau government.

The inflation-adjusted cost of staffing the PMO has risen by 16 per cent under the watch of Prime Minister Justin Trudeau, according to access-to-information records obtained by the Canadian Taxpayers Federation.

Salary costs for the 103 staffers in the PMO came to $10.5 million in 2022-23. That figure does not represent overall compensation for PMO staff (including benefits), but rather base salary, according to the records.

Taxpayers are now on the hook for an additional $3.2 million in annual PMO salary costs over 2014-15, the last full year former prime minister Stephen Harper was in office.

“The cost of running the PMO has increased under Trudeau, but it’s a good bet most Canadians don’t think they’re getting any better performance from the prime minister,” said Franco Terrazzano, CTF Federal Director. “If Trudeau can’t find savings right under his nose, how can taxpayers trust him to cut the fat across government?”

The growth in PMO staff comes at a time when the Trudeau government has been ballooning the federal bureaucracy across the board.

Both the number and cost of the federal bureaucracy has exploded under Trudeau’s watch, according to other government records obtained by the CTF.

The number of federal bureaucrats increased by 42 per cent under Trudeau, with more than 108,000 new bureaucrats added to the government payroll.

Spending on federal bureaucrats hit a record high $67.4 billion in 2022-23, representing a 68 per cent increase since 2016.

The size of the federal c-suite has also expanded, with the number of executives increasing by 42 per cent under Trudeau.

The Trudeau government has handed out more than $1 billion in bonuses since 2015 and more than one million pay raises in the last four years.

Meanwhile, spending on consultants also reached a record high, with planned expenditures for 2023-24 sitting at $21.6 billion.

“Everywhere you look – the PMO, the federal c-suite, the bureaucracy – the cost and size of government is out of control,” Terrazzano said. “Trudeau must take air out of Ottawa’s ballooning bureaucracy and the place to start is his own office.”

PMO staff costs, government records obtained by the CTF

Fiscal year

Number of PMO staff

PMO salary costs

2014-15

94

$7,258,436

2015-16

74

$6,353,188

2016-17

84

$7,462,686

2017-18

99

$8,155,068

2018-19

100

$8,479,353

2019-20

90

$8,536,672

2020-21

99

$9,840,834

2021-22

94

$9,383,328

2022-23

103

$10,536,649

Total

$76,006,214

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Parks Canada right to back down from deer-cull boondoggle

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From the Canadian Taxpayers Federation

By Carson Binda 

Taxpayers are glad to see Parks Canada backing away from a $12-million deer cull on Sidney Island.

“Parks Canada’s plan to blow $12-million on a deer cull was ridiculous from day one,” said Carson Binda, B.C. Director for the Canadian Taxpayers Federation. “Parks Canada is right to cancel the project, but it’s worrying that it took them this much wasted money to figure it out.”

Parks Canada used so-called sharpshooters in helicopters, firing down on invasive fallow deer from above, during phase one of the cull which occurred last December. The so-called sharpshooters killed 84 deer, but only 63 were the correct species. The cost for phase one came in at $834,000, roughly $10,000 per deer.

Subsequently, Parks Canada erected fencing made of fish nets around the 12-square-kilometer Island to trap the deer, in anticipation for a second round of culls which were scheduled for Nov. 15.

Several animals became entangled in the netting, painfully thrashing themselves to death.

“Seeing deer thrashing to death because of bureaucratic incompetence is heartbreaking,” Binda said. “Parks Canada needs to explain how this happened and how much taxpayer cash was wasted on this project before the cancellation.”

Residents of Sidney Island and local hunters have been culling deer on the island for years, for free. Last fall 54 deer were culled by local hunters at no cost to the taxpayer.

“Local hunters filling their freezers at no cost to the taxpayer is obviously better than Parks Canada blowing millions of dollars to shoot the wrong deer from helicopters and leaving others to suffer in a net,” Binda said. “Hopefully the bureaucrats learn from their mistakes with this boondoggle.”

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