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Netflix in Canada—All in the name of ‘modernizing’ broadcasting: Peter Menzies

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From the MacDonald Laurier Institute

By Peter Menzies

Canada’s content czars are stuck in the past and trying to drag everyone back with them

Next week, the Canadian Radio-television and Telecommunications Commission (CRTC) will go live with its efforts to wrestle the internet and those who stream upon it into submission. Whether it fully understands the risks remains unclear.

There are 127 parties scheduled to appear before a panel of commissioners at a public hearing in Gatineau starting November 20. The tone-setting opening act will be Pierre-Karl Peladeau’s always-scrappy Quebecor while the UFC will throw the final punches before the curtain drops three weeks later.

The list of presenters consists mostly of what those of us who have experienced these mind-numbing hearings refer to as “the usual suspects”—interests whose business plans are built around the Broadcasting Act and the requirements of related funding agencies.

The largest Canadian companies will ask the CRTC to reduce its demands upon them when it comes to feeding and watering Big Cancon: the producers, directors, actors, writers, and other tradespeople who make certified Canadian content.

Quebecor, for instance, will be arguing for its contribution to be reduced from 30 percent of its revenue to 20 percent—a draw it proposes be applied to designated streamers. More money from foreign companies and less from licensed domestic broadcasters will be a recurring theme.

But there will also be a new slate of actors—those with business models designed to entertain and attract consumers in a free market—who will be staring down the barrel of CRTC Chair Vicky Eatrides’ stifling regulatory gun for the first time.

Disney+ is set to take the stage on November 29. Meta, the Big Tech bete noire that refused to play along with the Online News Act, is up on December 5.

But the big day will almost certainly be November 30 when Netflix locks horns with the Commission and what appear to be its dangerously naive assumptions.

More than half the streamer’s 30-page submission is dedicated to detailing what it is already contributing to Canada.

Some examples:

  • $3.5 billion in investment;
  • Thousands of jobs created;
  • Consumers are 1.8 times more likely to watch a Canadian production on Netflix than they are on a licensed TV network;
  • Le Guide de la Famille Parfaite—one of many Quebec productions it funded—was in Netflix’s global top 10 for non-English productions for two weeks.

Netflix is insisting on credit for what it already contributes. It has no interest in writing a cheque to the Canada Media Fund and takes serious umbrage with the CRTC’s assumption it will.

“The (hearing) notice could be understood to suggest that the Commission has made a preliminary determination to establish an ‘initial base contribution’ requirement for online undertakings,” Netflix states in its submission. “The only question for consideration would appear not to be whether, but rather what funds would be the possible recipients of contributions.

“Netflix submits that this is not an appropriate starting point.”

It gets worse. The CRTC is considering applying some of the non-financial obligations it imposes on licensed broadcasters such as CTV and Global to the streaming world.

Executive Director of Broadcasting Scott Shortliffe told the National Post recently that “Netflix is clearly producing programming that is analogous…to traditional broadcasters” and that it could be expected to “contribute” in terms of the shape of its content as well as how it spends its money.

In other words, the CRTC’s idea of “modernizing” broadcasting appears heavily weighted in favour of applying its 1990s way of doing things to the online world of 2023.

If that’s the case, the Commission is entirely unprepared to deal with the harsh truth that offshore companies don’t have to play by its rules. For decades, primary CRTC hearing participants have been dependent on the regulator. In the case of broadcasters like CTV and cable companies such as Rogers, their existence is at stake. Without a license, they are done. Which means they have to do what the Commission wants. But if the regulatory burden the CRTC places upon the offshore streamers doesn’t make business sense to them, they are free to say, “Sorry Canada, the juice just isn’t worth the squeeze. We’re outta here.”

This is most likely to occur among the smaller, niche services at the lower end of the subscription scale. The CRTC has to date exempted only companies with Canadian revenues of less than $10 million. Any company just over that line would almost certainly not bother to do business in Canada —a relatively small and increasingly confusing market—if the regulatory ask is anything close to the 20 percent commitment being suggested.

Ditto if the CRTC goes down the road Shortliffe pointed to. It would be absurd to impose expectations on unlicensed streamers that are similar to those applied to licensed broadcasters. For the latter, the burden is balanced by benefits such as market protection granted by the CRTC.

For streamers, no such regulatory “bargain” exists. Too much burden without benefits would make it far cheaper for many to leave and sell their most popular shows to a domestic streamer or television network.

The Online Streaming Act (Bill C-11), which led to this tussle, was originally pitched as making sure web giants “contraibute” their “fair share.”

So, as it turns out, was the Online News Act (Bill C-18).

That legislation resulted in Meta/Facebook getting out of the news business and Google may yet do the same. As a consequence, news organizations will lose hundreds of millions of dollars. Many won’t survive.

Eatrides and her colleagues, if they overplay their hand, are perfectly capable of achieving a similarly catastrophic outcome for the film and television industry.

Peter Menzies is a Senior Fellow with the Macdonald-Laurier Institute, a former newspaper executive, and past vice chair of the CRTC.

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Global Affairs goes on March Madness spending spree, buys $9,900 Lego set

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From the Canadian Taxpayers Federation

By Ryan Thorpe

Global Affairs Canada bought $527,000 worth of artwork during year-end spending sprees in 2023 and 2024 – a practice commonly referred to as “March Madness.”

Bureaucrats even spent $9,900 on “Lego blocks,” according to access-to-information records obtained by the Canadian Taxpayers Federation.

“If you want proof that government bureaucrats have way too many tax dollars on their hands, look no further than Global Affairs Canada’s half-a-million dollar March Madness art spending spree,” said Franco Terrazzano, CTF Federal Director. “It’s supremely disrespectful to taxpayers to spend hundreds of thousands of dollars on art they’ll never see in far-flung embassies.”

The government of Canada’s fiscal year runs from April 1 to March 31.

On March 31, 2023, GAC bureaucrats purchased 32 pieces of artwork for $160,000, according to the records.

Included in the purchases were a $25,000 “archival pigment print photograph,” a $20,000 piece of “fabric art” made of “poly-cotton, canvas, steel hanging rod” and a $3,500 piece featuring “cowhide, dyed fox fur, Swarovski crystals, caribou hair and 24K gold.”

Bureaucrats also expensed a $6,000 oil painting on canvas and a $8,500 piece of “fabric art” made of “home-tanned moose hide, cross fox fur, canvas, trim, seed beads, 24K gold beads [and] nylon thread.”

The following year, on Feb. 9, 2024, GAC bureaucrats bought 71 pieces of artwork on the same day, billing taxpayers for $291,000.

Purchases included 31 paintings costing a combined $153,000.

One bureaucrat ordered a $9,900 set of “Lego blocks,” described in government records as “mixed media.”

Then, on March 26, 2024, GAC bureaucrats expensed 12 more pieces of artwork to taxpayers, costing more than $50,000.

Included in the purchases was a $9,000 piece of “fabric art” described as “wool, cotton, embroidery floss,” and a $7,500 piece of “mixed media” described as “handmade khadi paper woven on block printed industrially.”

All told, GAC’s year-end spending spree on art the past two years cost taxpayers $527,000. For the sake of comparison, that’s enough money to cover an entire year’s grocery bills for 31 Canadian families of four.

“March Madness is a long-observed phenomenon in Ottawa which sees federal departments quickly spend all of their remaining annual budgets in the last month of the fiscal year,” according to a report from CBC.

“Every March, taxpayers are forced to watch a bad episode of bureaucrats gone wild,” Terrazzano said. “Taxpayers need the government to fully open up the books, go line by line through each department’s spending and take a chainsaw to all this waste.”

This isn’t the first time spending by GAC bureaucrats has triggered alarms bells.

GAC bureaucrats spent more than $3.3 million on alcohol between January 2019 and May 2024, according to separate access-to-information records obtained by the CTF. That means the department is spending an average of $51,000 a month on beer, wine and spirits.

The CTF has long criticized GAC spending, including a $8,800 sex toy show in Germany, $1,700 for a “Lesbian Pirates!” musical, $12,500 for senior citizens in other countries to talk about their sex lives and a $51,000 red-carpet photo exhibit for rockstar Bryan Adams.

“From sex toy shows to lesbian pirate musicals to a $9,900 Lego set, Global Affairs Canada may be the worst waste offender in the entire federal government,” Terrazzano said. “And that’s saying a lot.”

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Trump gains ground in war against DEI

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From The Center Square

By Casey Harper

A major shift is underway in the way large companies talk about and fund Diversity, Equity and Inclusion programs.

President Donald Trump began the transition when he signed an executive order last month eliminating DEI policies and staff at the federal government and extending the anti-DEI policy to federal contractors.

Private companies, some of which had already begun the transition before Trump took office, remarkably began backing off their DEI policies, even if only symbolically with little internal change.

Costco resisted, pushing back on the Trump administration, but other major brands like Amazon Wal-Mart, Target, and Meta announced a pullback from DEI. Media reports indicated DEI discussions on earnings calls has plummeted.

Others, such as Wisconsin-based financial services company Fiserv, have not yet made a change, at least not publicly.

A murky legal future awaits companies willing to take the risk to stick with DEI policies, particularly in hiring.

Fiserv receives hundreds of millions of dollars in government contracts.

According to Fiserv’s website’s Diversity & Inclusion page, the company is “committed to promoting diversity and inclusion (D&I) across all levels of the organization, in our communities and throughout our industry.”

Fiserv says that it “partner[s] with people and organizations around the world to advance our D&I efforts and create opportunities for our employees, entrepreneurs around the world and the next generation of innovators.”

The company’s diversity and inclusion page includes a careers section that discusses “engaging diverse talent” and events to connect with “diverse candidates.”

Critics of DEI initiatives and policies say they discriminate against white men and Asians and lead to hiring and promotion decisions based on factors such as race and sexual orientation rather than merit.

In its 2023 Corporate Social Responsibility Report, the company boasted that “60% of director nominees for the 2024 annual meeting reflect gender or racial/ethnic diversity.”

According to an April 2024 report from Payments Dive, Fiserv was “buoyed by sales to government entities” in Q1 of 2024 and reported $500 million in revenue from those contracts. The U.S. Coast Guard contracted with Fiserv in 2024 to help with payroll, according to HigherGov, among other government contracts.

Fiserv did not respond to multiple requests for comment.

A watershed moment against DEI came when during the Biden administration, the U.S. Supreme Court ruled against longstanding affirmative action policies at American universities, one key example of white and Asian Americans being discriminated against.

Trump’s election has only solidified the new legal framework for what is permissible when considering race and gender in hiring, promotion, and workplace etiquette.

From Trump’s order:

In the private sector, many corporations and universities use DEI as an excuse for biased and unlawful employment practices and illegal admissions preferences, ignoring the fact that DEI’s foundational rhetoric and ideas foster intergroup hostility and authoritarianism.

Billions of dollars are spent annually on DEI, but rather than reducing bias and promoting inclusion, DEI creates and then amplifies prejudicial hostility and exacerbates interpersonal conflict.

DEI has become increasingly controversial as activists use the moniker to advance every liberal policy on race and gender, often at taxpayer expense. In the federal government, DEI had become widespread and infiltrated into every part of governance, from racial quotas for promotions at the Pentagon to driving healthcare research at the National Institutes of Health.

At private companies, DEI policies guided investment decisions via ESG (Environmental, Social Governance) as well as personnel decisions with racial quotas for company board rooms. Those ideas are out of favor with the Trump administration.

Some of the companies resisting the shift from DEI could face legal action.

A coalition of state attorneys general sent a letter to Costco alleging it is violating the law, as The Center Square previously reported.

“Although Costco’s motto is ‘do the right thing,’ it appears that the company is doing the wrong thing – clinging to DEI policies that courts and businesses have rejected as illegal,” the letter said.

This week, Missouri Attorney General Andrew Bailey filed a lawsuit against Starbucks for similar policies.

“By making employment decisions based on characteristics that have nothing to do with one’s ability to work well, Starbucks, for example, hires people by thumbing the scale based on at least one of Starbucks’ preferred immutable characteristics rather than an evaluation of an applicant’s merit and qualifications,” the lawsuit said. “Making hiring decision on non-merit considerations will skew the hiring pool towards people who are less qualified to perform their work, increasing costs for Missouri’s consumers.”

A 2022 Starbucks document touts a DEI goal: “By 2025, our goal is to achieve BIPOC representation of at least 30% at all corporate levels and at least 40% at all retail and manufacturing roles.”

Bailey called the Starbucks policies discriminatory and illegal.

“With Starbucks’ discriminatory patterns, practices, and policies, Missouri’s consumers are required to pay higher prices and wait longer for goods and services that could be provided for less had Starbucks employed the most qualified workers, regardless of their race, color, sex, or national origin,” Bailey said. “As Attorney General, I have a moral and legal obligation to protect Missourians from a company that actively engages in systemic race and sex discrimination. Racism has no place in Missouri. We’re filing suit to halt this blatant violation of the Missouri Human Rights Act in its tracks.”

Casey Harper

Casey Harper

D.C. Bureau Reporter

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