Censorship, Canadian style

Tories plan to withhold funding for 'offensive' productions

The Conservative government has drafted guidelines that would allow it to pull financial aid for any film or television show that it deems offensive or not in the public's best interest – even if government agencies have invested in them (emphasis mine).

The proposed changes to the Income Tax Act would allow the Heritage Minister to deny tax credits to projects deemed offensive, effectively killing the productions. Representatives from Heritage and the Department of Justice will determine which shows or films pass the test.

Game and talk shows, news, sports, reality television and pornography are already excluded from access to the tax credits. The proposed prohibition would cover a sweeping range of material, such as anything of an explicit sexual nature, that denigrates a group or is excessively violent without an educational value.

Stakeholders in productions, such as Telefilm Canada, the Canadian Television Fund and the Harold Greenberg Fund, would have to try to recoup millions of dollars in investments, and producers would have to repay banks, broadcasters and distributors.

A spokesman for the Heritage Ministry Wednesday night confirmed the change.

“Bill C-10, currently at third reading in the Senate, contains an amendment to the Income Tax Act which would allow the Minister of Canadian Heritage to deny eligibility to tax credits of productions determined to be contrary to public policy,” Charles Drouin, spokesman for Canadian Heritage said in a statement. “... Upon royal assent of C-10, the Department of Canadian Heritage plans to update the eligibility requirements for the [Canadian Film or Video Production Tax Credit] program.”

He said the department “has recently standardized and updated the list of illegal and other ineligible content.”

Toronto lawyer David Zitzerman of Goodmans LLP says the government's plans smack of “closet censorship.”

“The proposed new initiative, if not properly crafted, could potentially violate the Charter [of Rights and Freedoms] and lead to possible legal challenges against the Minister of Canadian Heritage,” Mr. Zitzerman said Wednesday. “Such a provision could potentially lead to the government acting as ‘morality police.' The existing definitions of pornography and obscenity in the Criminal Code should be sufficient for the government's purposes.

“Would this committee put money into Juno? It might not want to encourage teen pregnancy. Would the government put money into a film with a dirty title, like Young People Fucking? Would they invest in something like Brokeback Mountain? They might not want to encourage gay cowboys to have sex together in Alberta.”

Robert Soucy, director of the Canadian Audio-Visual Certification Office, the branch of Heritage that determines certification for productions, said last fall that Ottawa wants to be more selective about the cultural products it helps to fund.

The government provides refundable tax credits to productions that are certified as having Canadian content. Producers shoot the film or TV show, finish post-production, pay their bills and then file a corporate tax return. The tax credit is included in the production company's tax refund.

Mr. Soucy said that a panel set up by CAVCO and the Department of Justice would review content. CAVCO would have the final say based on the panel's recommendations.

He hinted then that the government was considering a “public policy” criterion for tax credit certification and a definition of what would be “contrary to public policy” that would make a production ineligible for film and TV tax incentives, as well as funds directed to sound recording and book publishing (emphasis mine).

Mark Musselman, vice-president of business affairs at Toronto's Serendipity Point Films and Maximum Film Distribution, said Wednesday that the implications are huge, “both from the perspective of freedom of speech and for the Pandora's box of uncertainty this will open up from a business perspective.”

If certification is denied, the producer would be on the hook to repay organizations such as Telefilm, which invests only in Canadian-certified productions, Mr. Musselman added. “This review panel totally fetters the discretion of Telefilm. What will it do, send the panel scripts it is worried might be too racy or offensive?”

He called a review procedure that determines eligibility for Canadian content certification after the completion of a film or TV show production “unworkable in terms of the cold, hard reality of financing these types of things,” adding that “it's entirely possible the whole financing structure could crumble.”

Toronto lawyer Mr. Zitzerman said the government feels it must invest public funds wisely. “The government – and Heritage – are of the view that they should have prerogative to assess whether a particular film, TV production or book meets their public policy criteria,” he said. “And if it doesn't, they should have the right to decline to invest in it. They don't view this as censorship because they say anyone is free to make the film or show or book, but not with their money.”

The lawyer wrote Mr. Soucy of CAVCO a letter last month asking for public consultation. He has not yet heard from Heritage.

Seems to me this would pretty effectively kill foreign production interest in Canada. The exchange rate advantage has already evaporated. If this goes through, and the tax breaks and subsidies become unreliable and subject to revocation after the fact, it seems productions would be better off staying in Hollywood, or otherwise avoiding Canada. Way to kill an industry,guys.