In 2018, Minister of Canadian Heritage Mélanie Joly proudly proclaimed that Canada successfully negotiated a cultural exemption in the Trans-Pacific Partnership, a Harper-era multilateral trade deal rebranded “Comprehensive and Progressive" (CPTPP) by the Trudeau government. In 1987, Flora MacDonald, then Mulroney’s minister of communications, made the same claim at the conclusion of the Canada–United States Free Trade Agreement (CUSFTA) negotiations. Neither minister was being entirely honest. In fact, both those agreements, and the NAFTA in between, brought changes to Canadian cultural policies and restrictions on our policy-making.
To understand why Canada needs cultural policies and how these are affected by trade agreements, we can compare Canada’s television and film industries. Canadian television is successful. We celebrate our stars, we watch Canadian dramas, comedies, documentaries and children’s programs, and these programs are increasingly popular abroad. In 2017-18, we produced 1,222 TV movies, series and other shows, with a total production value of over $2.7 billion. That same year, we produced 105 movies with total budgets of just over $0.3 billion. U.S. movies took 89.7% of the Canadian box office while Canadian English-language films “reached” an anemic 1% market share.
The writers, directors and actors who tell stories in television programs and films are generally the same people, using the same infrastructure. Canadians succeed in Hollywood. So why the huge discrepancy? It’s because in television we have a wide array of effective policies that support production and exhibition of Canadian programs and we don’t have strong policies in film. It’s about more than funding, since 54% of the total budgets of Canadian television productions came from public sources (CBC, tax credits, Canadian Media Fund, Telefilm, etc.) compared to 59% of total film budgets. The key difference are the important structural measures, including CRTC rules, restrictions on foreign ownership, and requirements to fund Canadian content and give it a preferential place on television schedules.
During the Canada–U.S. trade negotiations in the late 1980s, the federal government was considering a policy to require that a Canadian company distribute all films imported into Canada (since they invest in Canadian movies) and the introduction of a cinema screen quota. In a leaked memo from the talks, a U.S. official reported Canada had agreed “to solve (Motion Picture Association of America president) Jack Valenti’s problem.” While the government vehemently denied the report, it’s no coincidence that the film distribution policy was greatly weakened and no quota introduced.
The Canada-U.S. FTA established the template for how Canada negotiates culture in trade agreements. The federal government agreed informally to change policies in publishing and movies, the text of the final agreement required Canada to implement several measures, and advertising was included. The “cultural exemption” is further limited by the “notwithstanding” clause that authorizes U.S. retaliation against any cultural policy. Successive trade developments have forced changes to many Canadian policies, including ownership rules, magazine policies, CRTC regulations and copyright. Challenges for Canadian culture are compounded by the unwillingness of governments to regulate digital distribution. The Canada–U.S.–Mexico Agreement (CUSMA, or “New NAFTA”) strengthens the cultural exemption, but it too requires changes to two CRTC rules, policies on retransmission of broadcasting signals, and Canadian copyright laws.
Which brings us to CPTPP. Despite Minister Joly’s proclamation, there is no cultural exemption in the 11-country free trade pact, which is now in force. The CPTPP’s e-commerce chapter exempts “broadcasting,” and Canada sought to protect cultural policy space by taking a limited reservation against commitments in various other chapters that could impact cultural policies. As a result, Canada can maintain existing cultural measures or make them weaker, but cannot strengthen them. There is also an assumption in free trade deals that governments will eventually eliminate such “non-conforming” measures.
Not only did Canada negotiate weak protections, our own reservations limited future policy options by committing that they would not “discriminate against foreign services” or “restrict access to foreign online audiovisual content.” What Canada achieved in the final hours of CPTPP negotiations—the main basis of Joly’s assertion—were side-letters with each partner country removing these limitations on Canada’s reservations. The core weaknesses remain.
Here’s a concrete example of what could happen if Canada were now to strengthen film distribution policies. As a Japanese company, Sony Pictures, a major Hollywood studio, could file a strong case under the CPTPP’s investor–state dispute settlement system on the grounds its business in Canada had been severely restricted. Canada could be forced to compensate multinational firms (with a presence in a CPTPP country) for cultural policies favouring domestic producers and domestic content.
It is critical for Canada to take a fresh approach to culture and trade issues that includes a contemporary definition of culture focused on cultural expressions (rather than cultural industries), a refusal to admit the U.S. into CPTPP unless it incorporates the USMCA cultural exemption, and a cultural co-operation approach based on mutual support of relevant UNESCO conventions.
Garry Neil has worked for 40 years in arts and cultural policy in Canada and internationally. He currently consults for ACTRA and is heading a global project for UNESCO. His book, Canadian Culture in a Globalized World: The Impact of Trade Deals on Canada’s Cultural Life, was published in April by James Lorimer & Company Ltd.