Proceedings of the Standing Senate Committee on
Banking, Trade and Commerce
Issue 16 - Evidence - Meeting of April 16, 2008
OTTAWA, Wednesday, April 16, 2008
The Standing Senate Committee on Banking, Trade and Commerce, to which was referred Bill C-10, An Act to amend the Income Tax Act, including amendments in relation to foreign investment entities and non-resident trusts, and to provide for the bijural expression of the provisions of that act, met this day at 4:10 p.m. to give consideration to the bill.
Senator W. David Angus (Chair) in the chair.
[English]
The Chair: Honourable senators and honoured guests, here in the room and those on webcast and CPAC, I welcome you.
We continue today our study of Bill C-10, and particularly the provision contained therein relating to tax credits and other kinds of assistance for the film and video industry in Canada. We have talked about it at length during several meetings of this committee, and we are pleased to continue today talking about clause 120 of that bill.
Proposed section 125.4(7) would require the Minister of Canadian Heritage to issue guidelines about the circumstances under which proposed conditions in the definition of Canadian film or video production certificate in proposed section 125.4(1) would be met. This definition would be amended to provide that the Minister of Canadian Heritage would also certify that the public funding of the production would not be contrary to public policy.
It is submitted by a number of witnesses who have appeared here that such a provision would restrict freedom of expression and would have very negative consequences for their industry and for artists' endeavours generally in terms of access to public assistance, which is essential to their enterprises.
Others say that provisions of this nature are necessary to enable the government to be responsible in spending public funds.
The role of the Senate in exercising its duty of sober second thought is to review the bill, which happens to be an omnibus bill. That is to say, it is a piece of legislation that contains many unrelated sections involving amendments, clarifications and the like to the Income Tax Act and related statutes. Therefore, it is not a bill dealing just with tax credits for the film and the video industry, nor is it a bill to deal only with non-resident trusts. This bill has gathered together a whole number of things that have accumulated over the years, and therefore it is complex and difficult for legislators to deal with.
The proof in the pudding, as pointed out by some senators last week, is that it received hasty passage through the House of Commons with very little, if any, debate or study. Therefore, more than ever the role of the Senate is highlighted as being important to the process.
[Translation]
We are continuing our study of Bill C-10, an Act to amend the Income Tax Act, including amendments in relation to foreign investment entities and non-resident trusts, and to provide for the bijural expression of the provisions of that act. Today, we have two witnesses; we will have two sittings, the first one from now until 5 p.m. —
[English]
From the Canada Family Action Coalition, we have Mr. Charles McVety, President, and Mr. Brian Rushfeldt, Executive Director. After we hear from these gentlemen, we will be moving on to the International Alliance of Theatrical Stage Employees, Moving Picture Technicians, Artists and Allied Crafts of the United States, its Territories and Canada, IATSE, and their witness will be Mr. John Morgan Lewis.
As well, from the Documentary Organisation of Canada, we have Ms. Tina Hahn and Mr. John Christou, and from Association des réalisateurs et réalisatrices du Québec, we have Mr. Jean Pierre Lefebvre.
Brian Rushfeldt, Executive Director, Canada Family Action Coalition: Thank you for inviting us to share our thoughts on Bill C-10. I have two minutes to present two points, so I will be brief and quick with those.
I want to present two reasons why, in our opinion, clause 120 of Bill C-10 should be passed by the Senate. I am not here to debate the false notion that Bill C-10 is about censorship or free expression, because we do not believe it is.
First, our position is that the government ministers must be held accountable for the large budgets that fall into their bank accounts. I will make this point by asking the following question: Is there any government minister who does not hold the responsibility and the authority over his or her department budgets? The exception appears maybe to be the Minister of Canadian Heritage when it comes to arts funding.
The Chair: You are asking that rhetorically, of course.
Mr. Rushfeldt: Yes.
The Chair: We will be the ones asking questions to you.
Mr. Rushfeldt: You may ask me why I ask that. This week in the National Post, there was an article about $7.5 billion going to the arts industry. I do not know whether that figure is correct, but I would ask whether this Banking, Trade and Commerce Committee knows in fact how many dollars do go to the arts industry, film, culture and television. Surely the Senate would want the government to be accountable for those billions of dollars.
Two years ago, the Auditor General issued a report on this very issue, which I believe you are probably all familiar with. It reported about a lack of accountability, lack of reporting, conflict of interest and a whole number of issues, and the report came with up with recommendations. We could not find any evidence or response as to whether those things have been fixed or not.
If the industry that receives tax money is allowed to set the regulations for who gets it, how they get it and why, then I believe there is a conflict of interest in that very point. This bill may not, in our opinion, go far enough. It deals with tax credits more than grants, subsidies and incentives, but it is only a start.
The lack of accountability and control by the Minister of Canadian Heritage could result in another billion dollar boondoggle or billion dollar ad scam; or maybe this will become the $7-billion art fraud, who knows, if the minister does not have authority and accountability over those funds.
Second, the intellectual dishonesty that surrounds this debate has defocused the whole debate. Accusations about censorship are clearly out of line on this issue. It is about sound fiscal management and who has the authority to do that.
I would like to suggest to the committee that maybe there will be some investigation into the films that we have paid for over the last number of years. I do not expect you to go back 40 years, but certainly over the last three or four years. We need to look at which films did receive funding and whether they met the requirements and standards, if there were any.
I agree with some of the arts critics and some of the people who have been at this table that you cannot provide funding and then later decide to take it back. That is not good fiscal policy or fiscal management. I think it is irresponsible government. I agree that there must be some method in order to prevent providing money and then suddenly asking for it back.
In terms of public policy, I do think that we are at a point in Canadian culture and history that we have to come up with an acceptable definition or parameters on what public policy is. If we cannot, then I think there may be one solution that will make everyone happy, and that is to get out of the arts and culture funding, period. I am not suggesting that, but if we cannot have standards, then everyone goes away unhappy.
If there were no funding, then I suppose everyone would be happy. Taxpayers would be happy because their money would not be put into things they oppose, and the arts community could not complain about censorship because they would be free to do what they wanted since they would not be using tax dollars to do so.
Those are two quick reasons why we would like to see the Senate consider passing Bill C-10. As I have said, I am not sure it goes far enough, but it is certainly a start.
Charles McVety, President, Canada Family Action Coalition: Thank you, senators, for having me here today; and thank you, Dr. Gravel, for all your work to help me prepare for this time.
This is a sober second thought and we want to assist you, from our perspective, with that second thought. We hope and trust that your second thought is an appropriate one that takes into account not special interests but the interests of the people who have put their trust in you as senators.
As you all know, Canada is a country of standards. We all adhere to standards. We do not live in anarchy. We love freedom of expression and freedom of thought and freedom of inquiry. These are fundamental principles upon which our country is founded. However, there are limits to these freedoms. Every institution has to conduct themselves properly in a civil world and not infringe upon other people's rights. This Senate practices standards.
The tax credit process has had standards in place from its inception in 1995, and they are outlined in section 5 of the guidelines for tax credits. The standard in 5(h) says that pornography should not receive tax credit funding. The problem is that once a producer puts forward a film and CAVCO, Canadian Audio-Visual Certification Office, certifies the producer to receive the funding, there is no restriction on what that producer can produce. They can come up with a film that does not adhere to the existing standards that have been there from the inception.
Of course, we have presented the fact that some objectionable films have been paid for by our taxpayer dollars, like Young People F—ing. We cannot even say the word here because we have standards, but we expect the Canadian taxpayer to pay for something that we cannot even say the title of.
The new film they are funding this year is called The Masturbators. This is not something that the Canadian taxpayers should be funding because it breaches the existing regulations. I ask senators to give this sober second thought. This morning, COMPAS Public Opinion & Customer Research came out with a poll in which they asked Canadians three questions. One question was whether these films should receive taxpayer dollars, and 72 per cent of respondents said no. Another 9 per cent said that if they do receive funding, then people should be able to withdraw their taxes that go to those movies if they object to them. A total of 81 per cent of Canadians object to the funding of these films. This is not Charles McVety speaking but rather COMPAS research reflecting the will of Canadians. Senators, I believe, will do the right thing and reflect the will of Canadians.
I have a colleague at work who has a granddaughter with autism. Every week I hear stories. One story entailed mother having to cut her hair short and put on a football helmet and shoulder pads just to go in the room to take care of her daughter. Yet, she cannot get $1 of taxpayer money to help her care for her autistic child. That is the case of tens of thousands of families in this country. Yet, somehow, we find $22 billion over 12 years to fund 12,000 films and productions.
We are not even asking to remove $1 from that $22 billion. All we are asking to do is be decent about it. If senators, who have had great careers, vote to continue funding, how will you face your grandchildren? How can you say to my children and my grandchildren that you voted to ensure that movies such as Young People F—ing and The Masturbators got federal funding? Can you do that? I ask you to take a sober second thought and to not to listen to Stéphane Dion. He voted for this and now he wants to vote against it. He voted for this, but then his party put out a press release asking Liberal senators to vote this down and to reject this to allow these funds to keep flowing.
I ask you to think soberly and to think about Canadians, not about special interests. We have had enough of that in government. We ask you to think about what is best for your grandchildren and my grandchildren, and then good government will reign in this day. If not, and these funds continue to flow to these objectionable films, I do not how I will face my 10-year-old daughter.
The Chair: The committee process is one of sober second thought. As you can see from following the work of the committee, we have been studying the bill and giving everyone with a point of view an opportunity to express an opinion on it.
Your position is in support of the bill as drafted. Is that correct?
Mr. McVety: Yes, we support the bill.
The Chair: It is fair for witnesses to know who will pose questions, so allow me to make the introductions. I am David Angus, from Quebec, and I am the chair of the Banking Committee. On my right is Senator Yoine Goldstein, from Quebec, and he is the deputy chair of the Committee. We also have with us Senator Tommy Banks, from Alberta; Senator Francis Fox, from Quebec; Senator Paul Massicotte, from Quebec; Senator Trevor Eyton, from Ontario; Senator David Tkachuk, from Saskatchewan; Senator Mac Harb, from Ontario; Senator Wilfred Moore, from Nova Scotia; Senator Pierrette Ringuette, from New Brunswick; Senator Mobina Jaffer, from British Columbia; and Senator Michel Biron, from Quebec. Dr. Line Gravel is the clerk of the committee, and Ms. June Dewetering is the researcher from the Library of Parliament.
Senator Tkachuk: I have a couple questions about some of the media that has been generated by you in The Globe and Mail and other newspapers regarding the bill. To clarify, are you a registered lobbyist?
Mr. McVety: No. I am the volunteer president of Canada Family Action Coalition. My colleague, the executive director, who is a professional and is paid by Canada Family Action Coalition, is registered as a lobbyist.
Mr. Rushfeldt: I am registered as a lobbyist, and that is a big chunk of what I do. I am not sure that it is relevant to what is going on here because the question is about the funding, not about who talks to whom. I am registered.
Senator Tkachuk: I ask these questions not to dissociate myself from your testimony, because I agree with your support of the bill, but to clarify a few issues that have arisen in the newspaper. There were a number of questions during Question Period in the Senate, so I want to lay them out for the record.
Did you lobby on this issue? As you know, many of us were unaware that this was contentious in any way when it was tabled and passed by all parties in the House of Commons. It has taken on a life of its own.
Did you have meetings with any ministers?
Mr. McVety: No, we did not, and we stated that. We are irrelevant in this process. It is the Canadian people who are relevant — the 41,000 members of Canada Family Action Coalition. This is not about some lobbying practice; this is about doing the right thing.
We did not lobby on this; we did not run a standard campaign. We ran a strong campaign to raise the age of sexual consent from 14 to 16 years. We gathered 750,000 names on a petition. We did not do any of that. In fact, we did not even know about this clause in Bill C-10 until it appeared on the front page of The Globe and Mail.
Apparently the Minister of Canadian Heritage had started a process of preparing a committee to make the decisions on processing films. That process then alerted The Globe and Mail to this issue. It was on the front page of that newspaper. That was where I first heard about this provision, and that is where Mr. Rushfeldt first heard about it.
Mr. Rushfeldt: I did object to this particular movie called Young People F—ing, which I could not say on radio because they censured me; they said it was not appropriate.
The Chair: Was it the title you were objecting to or the movie itself?
Mr. Rushfeldt: Some of the clips that we saw as well. I suppose you can call it lobbying, if you like, because I did send an email to every member of Parliament of every party objecting to the film and the fact that it was objectionable, when we found out it was playing at the Toronto International Film Festival.
Then when we started to dig, we found it did get some funding. However, I did not know anything about this clause in this bill — I guess probably like you folks at the Senate in the first and second reading — until it surfaced in The Globe and Mail.
Senator Tkachuk: Regarding The Globe and Mail article of February 29, where you said, Mr. McVety, that you were claiming credit, The Globe and Mail does not get everything right, so I am giving you an opportunity to clarify that particular article.
Mr. McVety: I thank you for that opportunity because I categorically did not claim credit. In fact, I have repeatedly stated that we did not run a campaign on this. This was not our credit. In fact, the Liberal Party drafted this bill in 2002 or 2003, I understand, and brought this forward.
The only thing we have done over the years is bring to light that the government is taking dollars out of family budgets and giving them to producers to make objectionable films. That is wrong, and we knew that good government would eventually deal with it. We did not have to lobby on this issue; all we had to do was shine a spotlight on it. We understand that things take time, and we knew that finally a government would bring this forward and stop the nonsense.
Senator Moore: I would like to follow up on Senator Tkachuk's questions. I, too, would like to refer to that article in The Globe and Mail, the front page on February 29.
You were asked just now whether you had meetings with ministers and you said no. The article says that you had discussions with Public Safety Minister Stockwell Day and Justice Minister Rob Nicholson and numerous meetings with officials in the Prime Minister's Office.
Did you have discussions with Minister Day?
Mr. McVety: What I said no to was that we did not have meetings over this issue with anyone. Of course, over the years, we have had —
Senator Moore: Did you have discussions with Minister Day about it?
Mr. McVety: — press conferences; we have talked to many members of Parliament on the Liberal side, on the NDP side —
Senator Moore: Was Minister Day one of those MPs?
Mr. McVety: Yes, certainly we have talked to Stockwell Day and many others over the years. We have sent emails; we have had other communications, but we have never had a single meeting.
Mr. Rushfeldt: On this specific issue.
Mr. McVety: Yes. I do wonder why we spend so much time on whether this is some kind of conspiracy and very little time debating whether a movie like Young People F—ing should receive funding. I thought that is why we were here, to vote to continue to fund it or vote to stop funding these objectionable films.
Senator Moore: I am just trying to identify your role here and your organization. You have had discussions with Minister Day. Have you had discussions with Minister Nicholson, the Minister of Justice whose department prepared this bill?
Mr. McVety: We have had communications, as Mr. Rushfeldt has said, with all the MPs.
Senator Moore: You did yourself?
Mr. McVety: No, I did not have discussions with Minister Nicholson.
Senator Moore: Did you, Mr. Rushfeldt?
Mr. Rushfeldt: I did have a discussion with Minister Nicholson, not specifically about this. In fact, I do not remember whether this issue came up. It probably did not because it was not on the horizon at that time. I am not sure.
The Chair: Excuse me, gentlemen. It has been pointed out to me that everyone might feel more comfortable referring to that particular movie if you just call it ``YPF.'' It might make everyone feel a little more at ease.
Mr. McVety: That is a good development — here we are setting standards.
Mr. Rushfeldt: You do not like the title of the movie that claimed tax funds.
Senator Moore: When you had these discussions, Mr. McVety —
Mr. Rushfeldt: I would like to raise something here. I did not come from Calgary for this meeting to be answering questions about who I talked to, because that is not the point.
The Chair: Hold the phone a second. Senator Tkachuk asked you some questions and they were well answered. Senator Moore, I thought, has asked very clear and cogent questions. Why do you not just try to answer them? It is very simple. There was an article in The Globe and Mail. If it is false, just say it is false and drive on. It will help your cause.
Mr. McVety: We have answered it; we have had talks. We have mentioned these things many times. We have mentioned it to many reporters. We have had press conferences here in the Centre Block. I even discussed this with my wife.
Senator Moore: You did not lobby but you did those things; is that correct?
Mr. McVety: Yes, whatever you call that.
Senator Moore: Exactly. You also mentioned that you had numerous meetings with officials in the Prime Minister's Office. What officials?
Mr. McVety: That was wrong. That was misreported.
Senator Moore: Okay. In your discussions with Ministers Day and Nicholson, what was your discussion and did you get any commitments from them with regard to this bill and the contents of it?
Mr. McVety: Actually, we have never had any feedback. The only thing we have said is, ``Do you realize that you are funding YPF?'' Is that what we are calling it? What are we calling The Masturbators?
The Chair: The Big M. Number 27.
Mr. McVety: The Big M is my hero.
The Chair: Time is short. Senator Moore is asking pretty clear questions. Please continue, senator.
Senator Moore: There was no response from them, and yet you said, ``We are thankful that someone is finally listening.'' What would prompt you to say that?
Mr. McVety: We are thankful the Liberals were listening when they drafted it. We are thankful for Stéphane Dion standing up in the House and voting for this.
Senator Moore: This in is the context of your meetings, and you said it is fitting with Conservative values. Did they not come back to you with some kind of response at all? I find that hard to believe, sir.
Mr. McVety: You find it hard to believe that there are good Liberals who would vote for something like this? I do not understand that. There are good people in all parties. In fact, in this instance, the NDP and the Bloc also stood up and voted for this.
Senator Moore: They have all since changed their minds, it seems. I will go on to another line of questioning.
The contentious part in clause 120 of this bill has a sentence with regard to the establishment of guidelines by the minister. It says, ``For greater certainty, these guidelines are not statutory instruments as defined in the Statutory Instruments Act.'' That basically means they cannot be looked at by our traditional Standing Joint Committee for the Scrutiny of Regulations or by the House of Commons or the Senate. Do you think that is appropriate?
Mr. McVety: I think you should ask the minister that question.
Senator Moore: Let me look at it this way —
Mr. McVety: If you want to rephrase it, we are not parliamentarians and we are not lawyers.
The Chair: If you cannot answer the question, say you cannot.
Mr. McVety: Okay.
Senator Moore: The import of that as well is that those guidelines can be changed or altered and you would not know about it, and neither would the public.
What if those guidelines dealt with religion? How would you feel then?
Mr. McVety: There is no consensus in this country that religion should be banned. There is no consensus in this country that religion is a negative force in this nation.
Senator Moore: What if there were a guideline that said that films about certain or extreme religions are not to be funded? How would you feel then?
Mr. McVety: There have been regulations in place from the inception of the tax credit, and I do not understand why people all of the sudden want to erase all regulations and have none.
Senator Moore: I do not think that is the case. We do have a Criminal Code, and we have had evidence from numerous witnesses that the system is working well as is. I find it interesting that you do not find that a bit of a — I do not know what to call it. It is an unassailable power in the hands of one person in the country.
Mr. McVety: No, it is not one person.
Senator Moore: It certainly is, sir.
Mr. McVety: We do not live in a dictatorship. We live in a democracy.
Senator Moore: That is not what this does.
Mr. McVety: The minister is an elected official who is responsible to the people of Canada. If that minister does things that are inappropriate, then that minister will pay a price in the next election. His or her party would pay a price. That is the principle of good government.
Senator Moore: I do not think I have any other questions.
The Chair: I think Mr. Rushfeldt would like to add to that answer. Is that correct?
Mr. Rushfeldt: Yes. I would like to respond to Senator Moore about the Criminal Code being the test for this.
I am reminded that if it is just the Criminal Code that is the test, John Robin Sharpe from Vancouver wrote, drew and graphically talked about his sexual escapades with children. That went to the Supreme Court, and under the public good, that particular piece of art, whatever you want to call it, was ruled not a violation of the Criminal Code. Eli Langer painted pictures of children engaging in sexual activity with other children. That went public because that was not deemed to violate the Criminal Code.
The Criminal Code I do not think is an appropriate or good test here in some sense because —
Senator Moore: I am not saying it is the only test. The provincial film boards all have guidelines and standards to follow.
Mr. Rushfeldt: The Toronto International Film Festival showed Nothing is Private, a film that is clearly about sodomizing and sexually abusing children. It was not a Canadian film. I do not think we paid anything for it. I hope we did not. There was nothing done about that film being shown in Canada. Obviously, it did not violate the Criminal Code to the extent that charges were brought.
I think we have to be careful about suggesting that the Criminal Code is the only measurement or the only standard we follow.
Senator Moore: I am not saying that. I am saying it is just one of the items that is being followed.
Senator Massicotte: I think Senator Moore is getting to the issue. There are standards. You said there are no standards. There is a standard, and the standard as recommended by some, and I guess Senator Moore, is the Criminal Code. You are suggesting that that standard is too wide, is not defined enough, and you want to proceed along with this bill whereby the minister would have discretion in conjunction with advice from the industry to set a different form of standards.
Mr. McVety: The standard already exists —
Senator Massicotte: Are you intending to answer a question I have not yet asked?
The Chair: He takes quite a while to get his questions out. You can be sure that it will be a good one.
Senator Massicotte: In other words, it is a question of standards, and there is a standard. However, your concern is about democratic representation. In other words, do not worry; the minister is an elected official. If the minister becomes whacko, there will be a repercussion.
You know that the Constitution and the Canadian Charter of Rights and Freedoms go beyond the whim of current governments. One is freedom of action and one is freedom of speech. People are concerned that the government of the day could impose standards that go beyond that. Therefore, if discretion is given to a minister to allow standards, it may be very threatening; it may inhibit freedom of speech and it may then inhibit freedom of culture, which is so important in our society.
Could you comment on that? You are saying you do not like this standard, but how about the concern that this one could be abused or criticized or be more the whim of the current decade's orientation to culture?
Mr. McVety: First, the standards are not new. They already exist. They have existed since 1995 when the tax credit came in. In my opening statement, I talked about that standard. If you read the guidelines about which films should receive tax credits, if you look under section 5(h), you will see one of those standards, which is that they will not fund pornography and they will not fund other films such as documentaries, talk shows or reality shows. There are a number of regulations.
I do not think anyone is saying, at least I hope we are not saying and the Senate is not saying, that all those standards should be erased. The problem is that once the producer obtains a commitment from CAVCO, there is no way to enforce the standards they have undertaken to meet. That is why this legislation is appropriate: all it will do is enable the minister to enforce the existing regulations.
Second, I do not see anyone raising objections to the four provinces that have this clause in their funding formula. I do not see catastrophic disaster falling upon the film industry in those four provinces. It is working very well, and I am sure it will work very well in the federal government. We do not distrust our government so much that it cannot even make a decision on what is contrary to public policy. I think we have a good government, and I think it can make good decisions based on the existing standards.
Senator Massicotte: Should fundamental values and fundamental freedom of speech issues be subject to the whim of the current government and majority rule?
Mr. McVety: No, they should not; there are many other mitigating factors. You have, of course, this wonderful Charter, and you cannot discriminate based on certain things. You have the hate crime legislation. You have different standards in our society.
It is not that the Minister of Canadian Heritage will become some dictator and abuse the power the minister is given. That is why the Senate exists and why the House of Commons exists, in order to be a check and balance. This will not give the Minister of Canadian Heritage any further power than she already has, except to enforce the existing regulations.
Senator Massicotte: My understanding, and I thought Senator Moore made it very clear, is that it is being proposed that if this act is passed, the minister will have the right, without purview review by the legislation, to enact guidelines and not have it subject to any political representative's view on it. It is her right and it is her prerogative. Does that not worry you?
Mr. McVety: She already has that power. It appears in the guidelines of the tax credit. You can read it yourself. It does exist. Believe me; I am not making these guidelines up. They do exist. She already has that power, but what she does not have is the power to enforce those existing guidelines. The filmmaker can stray off the undertaking that he or she has proposed, make a movie that is grossly offensive, and you and I will still have to fund it. That is just dead wrong.
Senator Banks: Mr. Rushfeldt, you brought up the economic comparison between arts funding and funding for other industries. Are you aware of the relative proportion of public funding that is given to the arts and cultural industries as compared to what is given to the agricultural industries, to the oil industry and to the manufacturing industries? Do you know whether the proportion of public funding given to the arts and cultural industries is higher, lower or the same as the level of public funding that is provided in all of its various forms to other industrial sectors?
Mr. Rushfeldt: No, I do not, as a matter of fact. I have heard the testimony at these meetings on a number of fronts. I have heard all kinds of numbers thrown out. I hope the committee here will really dig into it, to see what in fact is being given. That is why I raised the figure of $7.5 billion. That figure seemed high to me from everything else I heard until I heard that.
Let me also put it in perspective since there are many industries that do not get any tax dollars, that do not ask for them and do not qualify for any.
Senator Banks: Which are those?
Mr. Rushfeldt: I know of at least 100 small businesses.
Senator Banks: I was talking about industrial sectors.
Mr. Rushfeldt: I can say small business is an industry in itself as well. They receive no tax dollars.
Senator Banks: Do you not know of programs in which small and medium-sized businesses are entitled to public funding?
Mr. Rushfeldt: I do, and not everyone qualifies for those, sir. My wife wrote two award-winning books in Canada in the last years and did not qualify for any tax dollars, and she made a profit on them.
To get into what percentages we will put into arts versus agriculture must be measured very carefully. What is the economic spinoff? I heard a person testify at this committee last week that the arts and culture industry generates $5 billion and how wonderful that is. If the industry generates sufficient billions of dollars, why do we put more billions of dollars into it? That question can be asked as well. What do they generate towards the economy of Canada?
Mr. McVety: We are not advocating the reduction of one dollar going to the arts. We believe that arts and culture are very positive and something that the Canadian government should invest in.
This clause will not reduce funding by a single dollar. It will only enforce the existing regulations. Instead of making YPF or The Big M, the industry will end up making films that people will actually go to see.
The Canadian film industry is in disarray. They make 30 per cent of the films that are shown in theatres in Canada, but they amount to only 1.7 per cent of the English box office in this country, because who wants to see YPF?
Senator Banks: We shall see.
Mr. Rushfeldt: I would like to comment on the economic issue.
I am reading from the National Post. Again, I believe what the writer said. He probably checked it out. Robert Lantos produced Where the Truth Lies, starring Kevin Bacon and Colin Firth and set in Los Angeles.
The Canadian film cost U.S. $25 million to make yet grossed less than $1 million at the North American box office.
Tell taxpayers they just paid for any movie that cost them $25 million or a portion thereof that got a $1-million return. That is fiscal mismanagement. Somebody has to have the authority and the control over where those dollars go.
Mr. McVety: Again, we are not advocating the reduction of even $1.
Senator Banks: Then I misunderstand, Mr. Rushfeldt. I am sorry for that.
Mr. Rushfeldt, I think you agreed with the contention being made before the committee that retroactive pulling back of tax or any kind of funding is bad fiscal management.
Mr. Rushfeldt: It is rather silly to say ``I am going to give you money to do something'' and then say ``I want my money back.''
Senator Banks: You would agree that whatever the criteria are and however they are established, they ought to be set out in front as a gate?
Mr. Rushfeldt: Absolutely. You do not give a farmer money to buy equipment and then tell him you want the equipment back. I do agree with that point, yes.
Mr. McVety: That gate is there. It has been there. If you read the provisions, it is already there.
The filmmakers need to understand that they should not go against the undertakings that they put forward in order to get the certification; they should at least keep their word. Does someone's word not mean anything these days?
Senator Banks: Reverend McVety, you talked about pornography.
Mr. McVety: Yes.
Senator Banks: All things are in the eye of the beholder. To your knowledge, has a pornographic film ever received public funding of any kind in Canada?
Mr. McVety: I would think that YPF is a pornographic film.
Senator Banks: Then why are its makers not in jail?
Mr. McVety: That is because pornography is not illegal in this country.
Mr. Rushfeldt: Child pornography is.
Mr. McVety: It is not child pornography; it is pornography. It is not illegal, as far as I know.
Senator Banks: Do you think it ought to be?
Mr. McVety: According to this survey today, 30 per cent of women think it ought to be banned; 20 per cent of men think it ought to be banned. We are not asking for that. All we are asking is to please not vote to continue to force the Canadian government to fund these films and to force the Canadian people to pay. When we write a cheque to the Canada Revenue Agency, we do not want to think about part of it going to pornographic films.
Senator Banks: Do you think taxpayers ought to be able to withhold from their taxes money that might be spent on things with which they disagree?
Mr. McVety: I was pretty shocked to see the results of this poll.
The Chair: You are referring to a survey. Would you be willing to leave it with the committee? That is our practice.
Mr. McVety: Yes, I did submit it. It only came out today from COMPAS. We did not have a chance to translate it into French.
The Chair: You do not have to translate it. It is not your own document.
Mr. McVety: I submitted 20 copies of this to you.
The Chair: I was not aware of that. Thank you.
Mr. McVety: I was surprised to see that as many as 30 per cent of women would want to ban it completely, but we are not advocating that.
Senator Banks: Mr. Rushfeldt had a response to that.
Mr. Rushfeldt: I wanted to respond to Senator Banks for a minute. On the issue of freedom of expression or censorship, there is no restriction on what people produce, other than right now, apparently, the Criminal Code. If you violate the Criminal Code, supposedly you will be prosecuted for it, although even that is in question after some of the artistic things I have mentioned.
There is no restriction on freedom of expression. That is not what we are talking about here. If people want to produce movies about whatever subjects they want, I am not aware, at least in this country, that there are any restrictions on them. The issue here is who will pay for those movies. That is why we need restrictions, so that taxpayers are not forced to pay.
Senator Ringuette: I have taken notes from your presentation because we did not have your written document. I would like to do some rebalancing here of what has been said.
You do agree that the Senate is a chamber of sober second thought. However, on this particular issue, it seems that we are the chamber of first thought. This is the first time that either House of Parliament has held public meetings and invited witnesses to look into this issue. The parties in the other place have all voted yes. Unfortunately, three of them said publicly afterwards that they did not know what they were voting on. That is your democracy and elected House, as you see.
Mr. Rushfeldt: Are you suggesting in this government or previous governments? This has been introduced before.
Senator Ringuette: No, this is the first time.
Mr. McVety: Can I comment on that?
Senator Ringuette: Yes.
Mr. McVety: Are you saying that Stéphane Dion has abdicated his position as Her Majesty's loyal opposition?
Senator Ringuette: I am not here to make politics, Mr. McVety. If you are here to make politics, then we can talk politics.
Mr. McVety: He is the one who has put out the press release appealing to senators to vote this down and to continue funding these projects.
Senator Ringuette: Mr. McVety, the tax credit is for only 10 per cent, at maximum. In your introductory statement, you said that the tax credits for pornography are coming from your family. To our knowledge, gained from the experts that have appeared before us, including departmental officials, there have never been tax credits for pornographic films as per the current rules.
Judging from your presentation, you feel strongly about tax dollars from your family being used. How do you feel about U.S. filmmakers receiving a 60 per cent Canadian tax credit on the Canadian labour that they employ in Canada? If this bill passes, we will have one set of rules for Canadian filmmakers and another very comfortable set of measures for U.S. companies. How do you feel about that?
Mr. McVety: That boggles my mind. I do not understand it.
Mr. Rushfeldt: That is why I am not sure that this bill goes far enough. I am not sure why we would allow a different set of rules for people in the United States than we do for those in Canada. I agree with you totally.
Senator Ringuette: Do we have your undertaking that you will again lobby Minister Nicholson and Minister Day on this issue?
Mr. McVety: Why not?
Mr. Rushfeldt: Beyond those two.
Mr. McVety: I do not read that in this, but we are not lawyers. Can you point to the clause that says that Americans do not have to meet any standards?
Senator Ringuette: Yes. They are eligible as long as they use Canadian labour in the production.
Mr. McVety: Do they not have to meet any standards?
Senator Ringuette: No.
Mr. McVety: I would like to see that clause because I have not read it.
Senator Ringuette: During your frequent visits to the PMO, they can do that.
Mr. Rushfeldt: I have a document in front of me from the American Film and Television Action Committee. On September 4, 2007, they were lobbying, through a petition on section 301 of the Trade Act, regarding Canadian film subsidies, saying that they are unfair. Some colleagues in the United States feel that the Government of Canada is unfairly subsidizing films up here, so they are asking for trade action under NAFTA, the North American Free Trade Agreement. The petition has been ruled as ineligible by the U.S. trade representative.
Senator Ringuette: How do you feel about that, Mr. Rushfeldt?
Mr. Rushfeldt: I think that is part of the process. I am not sure if you are saying that they have such freedom while they are saying they do not because Canada is subsidizing the film industry too much.
Senator Ringuette: It is still your tax dollars, and you are here basing your arguments on your family tax dollars.
Mr. Rushfeldt: If I were to spend my family tax dollars, I would sooner spend them supporting a Canadian film industry than an American one.
Senator Ringuette: Thank you.
Mr. McVety: I agree, but I do not see that here. No one has ever given me that, and, if that is the case, I would ask you to put it forward.
Senator Ringuette: I have seen you on TV many times on this issue, Mr. McVety. You have taken credit for the current bill. I have seen and heard you with my own eyes and ears. More power to you if you have that power.
Mr. McVety: I am not taking credit.
Senator Ringuette: We have a very serious issue before the Senate and this committee is doing its due diligence, and I thank you, chair, for allowing me these questions.
The Chair: Thank you, Senator Ringuette.
Senator Harb: You said something quite interesting: that you shone the spotlight on it, which is so very true. In my experience in 16 years in Parliament and 4 years in the Senate, I assure you that I have never seen an issue elicit the emotions of an industry like this bill has. In large part because of your intervention, through your petitions, public discussions or whatever, you raised it to the point that you have a unifying voice in the industry that has communicated to us, in one way or another, their views on it.
From what I sense, there seems to be an understanding that when we talk about the public interest or the public policy question, we must be clear on what we are talking about. On the guidelines that you mentioned, as did many of my colleagues and our witnesses, there seems to be a consensus that before we let this bill out the door, we need to have an understanding of what the rules of the game are.
Would you agree that it would be a wise decision of this committee and the Senate to tell the minister and the government to bring the players together? You have a large membership of some 40,000 members who, I presume, would be interested in seeing some arrangement to bring the players together to set the rules of the game and then proceed with amendments, as you suggest, to the clause that we are dealing with today. Would you be opposed to that or would that be a wise thing to do?
Mr. McVety: I do not think it would be wise, and I will tell you why. The whole debate is a tempest in a teapot. The proposals in this bill deal with only a handful of films. You heard that from Minister Verner. You have heard it over and over again. This is not a big chill. This will not have any economic impact on the industry. It did not have any impact on the four provinces that already have this kind of clause in place. It is a housekeeping bill and is not a big deal. It is only to enforce existing regulations.
The big deal is saying that the government should not be able to enforce its own regulations and that therefore this housekeeping bill cannot go forward. The Senate might decide to keep funding these movies. The last senator made the statement that no pornographic film has ever been funded. Well, what is YPF? What is that? Do you want that to be your legacy because you voted to make sure that these objectionable films continue to be funded by the Canadian taxpayer?
To speak to your first point, sure, $22 billion is a pretty big chunk of change. The industry is receiving that money. Do you know how much $22 billion is? It is a massive amount of money. If there is any whiff of that being changed, then of course they will rise to the occasion. It is not about Charles McVety. Who am I? I am no one. I am irrelevant in this process, but I have been an evangelical that people can take a shot at because of my faith, because of the religion I belong to. I object to that type of demeaning attitude that has come forward in this whole process.
Senator Harb: You have a right to express your views. You said yourself that we live in a democracy, and as long as the debate is civilized, it is extremely important. I am telling you now that the minister herself has said that she is willing to develop the guidelines in consultation with the industry. The issue becomes whether you do it before or after the bill becomes law.
You are a believer and you have faith in government. You believe government acts in good faith most of the time, and whenever there is an error, it is because it is an error. I commend you for that.
However, we have a situation where the industry itself has come to us to tell us that they have no issue in trying to discuss guidelines and to establish them, but they want to have an understanding before the bill goes through. I guess my question to you again is do you not think it would be wise for the bill to be delayed until such time as we develop the guidelines, in consultation with the industry as well as special interests and general interests and public interests?
Mr. McVety: Sure. They have been there for 12 years.
Senator Harb: What is another year?
Mr. Rushfeldt: If I may, we already have the regulations basically in place. The minister said that she cannot enforce those or cannot ensure that they are enforced. We need this bill so that she can enforce at least what is already there, but I think it has to go a step further. After this debate surfaced the way it has, it is necessary that the debate go a lot further. I do not think we delay that debate of new guidelines, and however it works — whether it is multi-party or multi-people — taxpayers need a hand in that, I think. However, we have a problem right now because the existing rules are the ones that the minister cannot enforce, not the next ones.
Mr. McVety: The Auditor General in this report from 2005, which is almost three years ago, said that these changes have to take place so that the Canadian people can be guaranteed that they are funding Canadian content and funding films that meet the existing criteria. She says it right here on page 44, section 5.121. I know that you have had this presented to you, because I received a copy of this from your very capable clerk. I know it was sent to you. You know this exists and I am surprised that you have not had the Auditor General testify here to give you this information straight up.
Do you want to withhold accountability for another year or another government, or do you want accountability to go forward right now? We ask you to vote to not continue to fund these films.
Senator Moore: I am not aware, Mr. McVety, of any provision in that Auditor General's report where she says that, for greater certainty, these guidelines are not statutory instruments.
Mr. McVety: She says right here that they do not apply the control rigorously enough. The report states:
In the absence of a more systematic approach to risk management and to how decisions are documented, these organizations cannot be assured that Canadian content requirements are met, that projects are selected in accordance with criteria . . . .
That is stated in black and white.
Senator Moore: I know that.
The Chair: The document speaks for itself. I think we know that, and we all have a copy.
Senator Moore: It is just that he has taken it another step that is not in there. I do not like the editorializing, because he is going a bit too far.
Mr. McVety: I just read what it said; the criteria are there.
The Chair: I think that is very clear, and that was your supplementary. Senator Eyton, the sponsor of the bill, is next.
Senator Eyton: I will ask just a couple of questions to clarify the record, at least to my understanding. I may be a little slow in that regard.
The particular provisions that we are talking about in Bill C-10, or coming out of Bill C-10, have been around for years, and we have had lots of testimony. They started in 1995 and there have been different manifestations of those provisions. The issue, I guess, should have been apparent to one and all a long time ago, but it only recently got considerable public attention.
For the record, your testimony about your role in bringing about this public awareness was a little confusing to me. What I got out of it was that you had no discussions with members of the government about these particular provisions prior to the bill's introduction in Parliament.
Mr. McVety: May I clarify?
Senator Eyton: I am trying to be more precise. You had some discussions; you said, ``I have talked to these and these people and I have done that for years.'' What we are talking about are discussions with members of this government prior to the tabling of this proposed legislation.
Mr. McVety: We had no discussions about this legislation, period. We did not even know it existed. We did not know it until The Globe and Mail called us a day after they had put this provision on the front page of their newspaper. We had zero knowledge of it. We had no specific meetings on this.
All we have done over the years is to bring to light the fact that our government is funding objectionable films. I have gone on television and radio about this. We have had casual conversations.
Senator Eyton: I think I have your answer. Prior to the legislation's being tabled, you had no discussion with members of the government about these particular provisions.
Mr. McVety: None.
Senator Eyton: Thank you. I was confused.
Mr. Rushfeldt: I think some of the media misreported that.
Senator Eyton: For clarification, you have used the number $22 billion. That seems to be a lot of money, and I wonder at the source. I cannot believe it is correct.
Mr. McVety: The source is the minister in your hearing. She is the one. Really, we do not know, because they do not make this public. The government will not tell the Canadian people how much money they have spent and on what films.
Senator Eyton: The question is where did you get that figure.
Mr. McVety: From your committee hearing.
Mr. Rushfeldt: That figure came from the minister herself sitting at this table when she was questioned on something. It is right in the record.
Senator Eyton: CBC has $1 billion. That is $1 billion.
Senator Moore: Over 12 years.
Mr. McVety: I am not the author of it.
The Chair: One person at a time, please, or I will terminate this.
Senator Eyton: The $22 billion seems to be a bogus number.
Mr. McVety: You have to argue with the minister, not me.
Senator Eyton: I am surprised at that.
I have a practical question as to process. The minister has publicly stated that she would like the passage of the bill, but she has committed to there being a 12-month hiatus. During that period, she would consult with industry and others regarding the guidelines that could be established. That was welcomed by this committee.
Would see yourself participating in that public consultation?
Mr. McVety: I would think that she would consult with representatives from various communities in Canada, not just the industry, because this goes beyond the recipients of the funds. This also includes Canadians. How she goes about that consultation and whether she includes us is really her business. We would certainly welcome a voice if she chose to give it to us; but again, this is not about us, it is about the Canadian people.
Mr. Rushfeldt: If the people who are the recipients of the funds are the only people who have any input into the rules and regulations and the policies developed, there is a conflict of interest. That would be like my coming to the government asking for tax dollars and I set the rules. I do not think we can go there. I think there has to be a much broader public discussion about whatever comes out of here as far as whether or not the rules get changed.
Senator Eyton: Would you welcome the opportunity to participate?
Mr. Rushfeldt: Yes.
Senator Massicotte: I have a supplementary question. You mentioned earlier that you did not have any discussion with any representative of the government before this bill was proposed. You said that all your discussions were basically to advise the ministers that the current guidelines allow pornographic films. Was that the essence of your discussions?
Mr. McVety: The essence was not even the guidelines, because the whole process is very secretive about how this money lands in producers' hands. They do not tell us, and we had no specific information on that. All we knew was that there are many films like the one on necrophilia about a woman having sex with cadavers. We knew that it was wrong for the government to fund it, and that is all we said.
Senator Massicotte: They are permitted under the existing income tax guidelines, which means you are suggesting that the government should change the guidelines because such films should not be permitted?
Mr. McVety: No. We did not even know that.
Mr. Rushfeldt: I am not sure they are permitted under the guidelines. That is part of the question. I am not sure the guidelines would have permitted that, had they been applied.
However, the minister clearly said at this table that she cannot apply those guidelines. She partly needs Bill C-10 to get that process started. I do not think the guidelines would have allowed that, because sex with dead people is a criminal offence in Canada, as far as I know. I think the guidelines have been there for quite a while.
Senator Massicotte: You referred to guidelines in the Income Tax Act. Are you saying that they are not being applied in the determination of the credit?
Mr. Rushfeldt: I think that is part —
Mr. McVety: We have just been objecting to the Canadian government's subsidizing these films. We have had no discussions and frankly very little knowledge about how they are subsidizing them and how they wanted to correct that.
Senator Massicotte: When earlier you referred to the guidelines being in place, you seemed to suggest that you had no problem with the existing guidelines, but that is not correct. You obviously have a problem with them because you said you do not like what is going on, which means you want to change the guidelines.
Mr. McVety: No. The guidelines exist, but they are not being properly enforced. That is what Sheila Fraser is saying and that is what the Liberal government said when they drafted this legislation. That is why they all voted for it, because it is a simple thing. It is not a change of policy. It is a simple item of housekeeping.
Senator Massicotte: I have heard you.
Senator Goldstein: I would like to clarify something. First, I thank both witnesses for appearing and sharing your thoughts and ideas with us. I want to deal with the COMPAS survey that you mentioned earlier in your testimony.
The implication in your testimony was that the COMPAS survey asked whether or not people agreed with giving the minister discretion to create and deal with guidelines. That, I would suggest, is not correct, is it?
Mr. McVety: No. If I implied that, I apologize, because that is not what I meant. With respect to this COMPAS research, the headline is quite clear: ``National poll shows public polarized with large female-led majority opposed to continued subsidies.'' This poll is only about subsidies.
Senator Goldstein: Mr. McVety, you certainly did not understand my question. Let me be more precise.
Is it not a fact that this survey deals only with pornography and not with the guidelines?
Mr. McVety: Yes, it deals with pornography. It is subsidizing pornographic content.
Senator Goldstein: It deals only with subsidizing pornographic films. Am I right or wrong?
Mr. McVety: Yes, you are right.
Senator Goldstein: Have you seen the survey completed by Angus Reid Strategies that deals with the guidelines? Those results are directly contrary to the results that you suggest out of the COMPAS survey —
Mr. McVety: Well —
Senator Goldstein: I am sorry; I did not interrupt you when you spoke. I would like you to not interrupt me when I ask a question.
I will suggest to you that 48 per cent of Canadians agree that Bill C-10 should not be passed with the powers it now has. Only 36 per cent of Canadians agree that it should be passed. Am I right or wrong about that? Do you want to see it?
Mr. McVety: I do not know whether you are right. If that is the case, I would suggest that a very simple question to ask people is this: Should pornography be subsidized by the government? Really that is what you, as senators, are deciding.
Senator Goldstein: No, we are not deciding — Mr. McVety, you should not — I am sorry, sir —
Mr. McVety: I did not interrupt you, and I expect that you return that courtesy to me.
Senator Goldstein: You have to be intellectually honest with what you say.
Mr. McVety: I am intellectually honest.
Senator Goldstein: We are not dealing solely with pornography. You and I both know it. You have used terms such as ``objectionable'' and ``offensive.'' This is not just pornography; this is a whole bunch of things.
Mr. McVety: If you ask the average person what Bill C-10 is, they will not know what you are talking about. They do not understand the intricacies of this, but they do understand the plain question: Should pornography be subsidized?
Yes, there are other aspects and there are other guidelines. Maybe you should have a poll on whether game shows should be subsidized as part of the process. We are only objecting to the pornography.
Senator Goldstein: You are not only objecting to the pornography. Would you agree that homosexual films should be shown and subsidized? No, you would not.
Mr. McVety: No, no. We do agree that they should be.
Senator Goldstein: They should be shown and subsidized?
Mr. McVety: They should be.
Senator Goldstein: They should be what?
Mr. McVety: They should be subsidized. However, what we said to the reporter, which was not reported accurately, is that we do not think that films that proselytize children to be homosexuals should be subsidized by our government.
Senator Goldstein: I do not think anyone is suggesting that. That is not what you said.
Mr. McVety: Go watch Breakfast with Scot about a gay Toronto Maple Leaf hockey player raising an 11-year-old boy, who is not his own, to be a homosexual, and then tell me that that is not training a child to be a homosexual.
Senator Goldstein: That was not my question, sir. The question was, would you agree —
The Chair: I will rule you both out of order if we cannot do this in a civil way.
Senator Goldstein: You will have to ask the witness to wait for the question.
The Chair: I am asking the witness to wait for the question. That is what I am trying to do. I know you will be able to contain yourself and ask the question in a civil manner.
Senator Goldstein: My question, nevertheless, was whether or not you would view the depiction of active homosexuality as being objectionable or offensive.
Mr. McVety: That is not what we are objecting to. I have said that clearly twice.
Senator Goldstein: You would agree that that could be subsidized?
Mr. McVety: Yes, I do, but I am saying that proselytizing children to be homosexual should not be subsidized.
Senator Goldstein: I understand that. That was not my question.
You have used the word ``guidelines'' continuously in referring to the regulations. I take it you mean the regulations and not the guidelines?
Mr. McVety: If you go to the tax credit website, there is a manual of guidelines. Then you can read the regulations. You can read regulation 5, and you can see all of those regulations on what should and should not be funded.
Senator Goldstein: Is it not true that the only part of those regulations dealing with content as opposed to type is pornography? Do you want to look at the regulations? You have them. Before you answer the question, please look at the regulations.
Mr. McVety: Unfortunately, I do not have those printed out before me, but pornography is one of those regulations and —
Senator Goldstein: Can you mention another one that deals with content as opposed to form?
Mr. McVety: I am sorry; I did not memorize them.
Senator Goldstein: Thank you. Is it correct to say that the Auditor General mentioned nothing in her report about content of films but spoke only to the question of enforcement of the regulations?
Mr. McVety: I would object to that because she says, and I will quote, ``projects are selected in accordance with criteria. . . .'' I would interpret her word ``criteria'' to mean those regulations including pornography.
Senator Goldstein: There is only one regulation that deals with content, one. Please take my word on that for the moment.
Mr. McVety: Okay.
Senator Goldstein: Is it correct that the Auditor General did not deal with either pornography nominatively or with content? Is that correct or not?
Mr. McVety: No. She dealt with the procedures, and she is saying here that there is no way to enforce the procedures. She even said that Canadian content cannot be enforced, because once the certification of CAVCO is given, the government has no way to certify that the end product meets the expectations of the tax credit process.
Senator Goldstein: Are we ad idem in saying that she did not talk about objectionable or offensive content?
The Chair: The document speaks for itself. It is on the record. I want everyone to know we have many of witnesses waiting. I have agreed to go until 6:30.
Senator Goldstein: I have one last question.
The Chair: One last question. We have Senator Jaffer waiting and then that is it.
Senator Goldstein: Are you aware, Mr. McVety, that the four provinces that have public policy provisions have never enforced them?
Mr. McVety: Policies —
The Chair: Are you aware or not?
Mr. McVety: No.
The Chair: That is all you have to say.
Mr. McVety: I am not surprised by it because policies are a teacher. The law is a teacher.
Senator Jaffer: There has been a lot of talk here. I need some clarification so that we understand each other.
How do you define standards?
Mr. McVety: In this case, you can read the standards. Generally, that in which there is a Canadian consensus would be a standard.
Senator Jaffer: How do we arrive at that Canadian consensus of what a standard is? How do you think we should be arriving at that?
Mr. McVety: That is why we have a diverse government from every corner of the country. We come together in Parliament and elect a Minister of Canadian Heritage. She then has the task of arriving at Canadian consensus.
Every single institution in the government does that, and they do it virtually every day.
Senator Jaffer: From what I understand, sir, you are saying that the Minister of Canadian Heritage sets the Canadian standard.
Mr. McVety: No, I am saying the Canadian people set the Canadian standard. Parliament, including this Senate, plays a significant role in assisting the minister at arriving at a standard that is acceptable to the Canadian people.
We have a poll today that indicates that to ignore these standards and subsidize these films is not acceptable.
Senator Banks: That is to a majority.
Mr. McVety: That is to 72 per cent. To 24 per cent it is.
Senator Jaffer: Do you believe that what the majority decides should be the standard of our country?
Mr. McVety: As long as they do not infringe on the Charter of Rights and Freedoms, I believe that we should have standards that reflect the Canadian consensus, the majority of Canadian people.
The Chair: Thank you, gentlemen for coming. As you can see, the senators are not all asleep. They are still pretty frisky. We appreciate your input. Thank you very much.
I want to apologize to our next group of witnesses. I know you were asked to be ready for five o'clock. I know that at least some of you were in the room for the previous panel. We actually did not get started with their evidence until about 5:20. That is how these hearings go. We want to hear what you have to say. Thank you for your patience. You will not be restricted.
I would like to introduce you, as well as warmly welcome you to this deliberation.
From the Documentary Organisation of Canada, we have Ms. Tina Hahn, Treasurer, National Executive; and Mr. John Christou, Chair, National Lobby Committee. From the International Alliance of Theatrical Stage Employees, Moving Picture Technicians, Artists and Allied Crafts of the United States, its Territories and Canada, IATSE, we have Mr. John Morgan Lewis, International Vice President and Director of Canadian Affairs. Finally, from the Association des réalisateurs et réalisatrices du Québec, we have Mr. Jean Pierre Lefebvre, President.
Tina Hahn, Treasurer, National Executive, Documentary Organisation of Canada: We greatly appreciate the opportunity to speak before you. I would like to clarify that Mr. Christou is actually the chair of our advocacy committee.
The Documentary Organization of Canada, DOC is a national, non-profit, bilingual, professional arts association of independent documentary producers, directors, craftspeople and service providers. It was founded in 1983. We are celebrating our twenty-fifth anniversary this year and are very excited about it. We have over 700 members working in both official languages in all provinces and territories of Canada. With the addition this year of a chapter in Alberta, we are now organized into eight local chapters, including also B.C., Manitoba, Toronto, Ottawa-Gatineau, Quebec, Atlantic and Newfoundland.
The members of DOC largely comprise what we know as the independent documentary industry in Canada and are responsible for a significant portion of the total documentary production in Canada. Our members make point-of-view documentaries, social issue films, films about politics and films on any number of other topics. Some recent examples of films made by our members include Shake Hands with the Devil, The Corporation, Manufactured Landscapes and Up the Yangtze.
John Christou is the producer of Up the Yangtze. He is now the producer of the highest grossing per screen opening film of any film in Canada on its opening weekend in this year. That is for a documentary.
I will deviate a bit from the script that we presented to your people because I want to respond a little to the prior witness, Mr. McVety. He referred to a friend who has a granddaughter with autism who gets very little support for that child. I make films about people with special needs. That is what I do. I made a film about a man with Tourette's syndrome, which was nominated for two Gemini Awards and won a Yorkton Film Festival Award and won an award in Brussels. I made a film called How Come You Walk Funny about the wonderful integrated kindergarten at the Bloorview Kids Rehab in Toronto, a groundbreaking organization. That film would not have been made without the tax credits. We applied for funding. We spent a year trying to get financing and the only thing that allowed me to make that film was the fact that I could confirm both the federal and the provincial tax credit before the film was made. Otherwise, that film would not have been made. It won an honourable mention at the ReelHeART Film Festival in 2006. It was made for Discovery Health in Canada. When I pitched it to Discovery Health in the U.S., they said the film would be dangerous for them to show in the United States of America.
I will tell you why. The kind of programming that the Bloorview Kids Rehab represents does not exist in the United States. If they showed my film on their airways, they would be besieged by parents asking where they could get this for their families. The government would have to answer, ``Sorry, you cannot get it in the U.S.'' They chose not to air my film because public policy does not support that kind of programming.
Senator Ringuette: It sounds like China.
Ms. Hahn: Yes. I am making the statement that when you are talking about public policy, there are many ways to define it. I wanted to bring your attention to the particular work that I do, in response to Mr. McVety's comments. He said he would stay for my statement.
As well, I will clarify another point. Mr. McVety said that there is no way for the government to monitor what happens with these films. However, I received both provincial and federal tax credits for my film, and the person in charge of the federal tax credits called me after the film was done and after the officials had approved the tax credits to thank me because they watched every single minute of my film and enjoyed it.
Government officials who are responsible for tax credits after the CAVCO certificate is applied and approved do watch the films. My film was watched. I wanted that clarification on the record, because they do watch them.
Sorry to inject a little emotion but, in response to Mr. McVety's earlier comments, other films are made in this country that are not about pornography or violence. They are very important films and their future depends on our being able to access these tax credits, especially when we are dealing with marginalized populations, such as people with disabilities.
Now, I will go back to my prepared statement. In the best of times, being an independent documentary filmmaker in Canada is difficult; and these are not the best of times. Since news of Bill C-10 surfaced some weeks ago, our members have been very frightened by the prospect that soon making documentaries in this country will get a lot harder.
We are here today to make our position clear. The Documentary Organisation of Canada is categorically against clause 120 of Bill C-10 that is intended to amend section 125(4) of the Income Tax Act. Although our members recognize the importance of accountability for how and on what projects government spends its money, attempting to do so with this method is redundant, damaging to the economic framework of our industry and could lead to a slippery slope of subjective implementation of the tax credit system.
John Christou, Chair, National Lobby Committee, Documentary Organisation of Canada: Tax credits for film and television productions were first initiated as a support mechanism to help small and medium-sized production companies to survive through the long development required to make films. The tax credit was never intended to be invested in the actual financing structure of films, but was meant to sustain the company after it finished a film and before the next film got off the ground, so that a small company would not go bankrupt in the months between productions.
Unfortunately, in the years since the tax credit has been implemented, the economic realities of the industry and the incessant pressure from broadcasters and from federal and provincial funding agencies have meant that no film production in Canada today can be made without these tax credits being invested in the financing structure of productions.
Since tax credits are not received physically by a company until after a production is finished — and do not forget the reason for that is that they were supposed to nurture the company between production cycles — we have to turn to the banks to finance these tax credits so that the money is available to us during the production. On average, tax credits work out to approximately 11 per cent of the budget of our films.
If clause 120 of this bill is allowed to go forward, no bank will finance our tax credits, and that would lead to the disappearance of this 11 per cent of the financing currently available in the overall system. If this were to happen, documentary production would grind to a halt in this country, and that means jobs would be lost. To put it in perspective, in 2005-06, the documentary industry accounted for $440 million in production and employed 15,300 people.
I would like to add that because tax credits are based on the labour paid in the making of films, the government ends up making back its investment on the income tax paid by the people employed in the industry.
As we all know, the regulations to govern this amendment have not been written, but DOC is worried about the intent behind clause 120 and the potential for abuse inherent in that intent. Yes, we can all agree that the Canadian government should not fund gratuitous sex and violence. Rules exist within the Criminal Code, at CAVCO and at the Canadian Broadcast Standards Council.
I appreciate that the industry has been invited to help to draft the guidelines to govern this amendment, but I for one do not feel comfortable defining what is or is not in the public interest. Is it individuals or is it Canada as a whole? I do not feel comfortable doing it myself. As an industry member, if I were invited, it would be odd.
What about Canadian productions such as Emmy Award-winning Peter Raymont's Shake Hands with the Devil? Would it be denied tax credits because it deals with a subject containing excessive violence in the form of genocide? Would an award-winning film like The Corporation be denied a tax credit because it is critical of corporations? Or perhaps I would be affected because I produced Up the Yangtze, which has the potential to offend the Chinese government. On a note off-script, we have not yet received our tax credits. If this were to go forward today, what would happen?
As I said earlier, we can all agree that pornography and gratuitous violence should not be funded by taxpayers through the tax credit system. However, the government should not get into the business of subjectivity. That is not in the public interest.
Ms. Hahn: I would like to deviate from the script again to look at how films are produced and funded. My film took me one year to finance, one year to film and one year to do the post-production. That is a three-year process. My tax credits have taken an additional two years to be approved.
We appreciate that the minister wants to have public consultation and wants to meet with us and discuss this over a one-year period, but I would like to know what films are affected during that one-year period. Is it any film that is in production, post-production or development? That is not clear to us, and that is our concern with the procedure the minister has proposed.
The final issue we would like to point out is the double standard that this bill extends to Canadian productions. If the concern about this bill is that taxpayers should not fund certain films, why would it not apply to American productions shooting in Canada, which is a point that came up earlier?
A lot of taxpayer money is invested into American service productions in Canada — millions of dollars per year. The implication of this is obvious, as has been pointed out at this committee meeting.
We would like to support, as an alternative to clause 120, the Canadian Film and Television Production Association's proposal that would link the wording of the clause to the Criminal Code. In this manner, it would entrench the current reality into law. I think all Canadians would agree that individuals cannot decide what is in the public interest but that the law is a fair and balanced means of protection that has been established for our protection.
We greatly appreciate the opportunity to speak with you today and thank you for your attention.
John Morgan Lewis, International Vice-President and Director of Canadian Affairs, International Alliance of Theatrical Stage Employees, Moving Picture Technicians, Artists and Allied Crafts of the United States, its Territories and Canada (IATSE): The IATSE was founded in 1893, and in 1898 in Canada. It presently has over 110,000 members, 16,000 of whom reside in Canada, making it the largest trade union in the entertainment industry.
The IATSE represents workers in a number of crafts, with the majority employed in motion picture and television production. Our members are integral to the production, distribution and exhibition of motion pictures and television.
We represent workers, not artists or producers or directors. We represent working men and women who earn their livelihood in the motion picture and television industry. These men and women work on big-budgeted, foreign service productions from the United States, such as X-Men in Vancouver and Mummy 3 in Montreal, as well as on domestic television and motion picture productions such as Trailer Park Boys in Halifax and Corner Gas in Regina.
I have had the opportunity of reviewing the transcripts of the witnesses who have appeared before this body. I have been impressed with their thoughtful input as well as with the probing questions and comments from the members of the Senate. I am honoured to be here today and to play a small part in the democratic process.
As I understand the proposed legislation, Bill C-10 contains a provision that would allow the Minister of Canadian Heritage to refuse to grant a tax credit to certain film and television productions for which public financing is considered contrary to public policy. It also requires the minister to develop guidelines clarifying the types of productions that would fall into this category.
In her testimony before this body, Minister Verner stated:
There is material that is potentially illegal under the Criminal Code, such as indecent material, hate propaganda and child pornography. Currently, no provisions in the Income Tax Act or regulations exclude such material. Bill C-10 addresses this loophole, in particular.
Up to this point, I think the industry is in agreement that there should be restrictions on public financing through tax credits for any production that contravenes the Criminal Code. To that effect, the IATSE would support the proposed amendment to Bill C-10, as put forward by the Canadian Film and Television Production Association, the CFTPA.
The difficulty that many who work in the industry have with Bill C-10 is that it purports to go well beyond codifying the Criminal Code and introduces a subjective, non-transparent decision-making process that could create financial mischief.
As Minister Verner herself stated before this body:
These guidelines would cover the types of content that may be illegal under the Criminal Code as well as other types of content for which public support is clearly unacceptable.
We are appreciative that the minister has offered to consult with the industry before drafting guidelines. However, as a non-statutory instrument, these guidelines may be revised at any time, without any public consultation and without the consent of Parliament. This creates the potential for uncertainty, which could have a disastrous impact on the motion picture and television industry in Canada.
This industry is undercapitalized. Producers are required to secure financing from private and public sources. Tax credits, which can form as much as 10 per cent of a budget, are an essential part of the traditional funding model. Financial institutions will typically advance up to 80 per cent of the value of the tax credits to a producer. They will not do so if there is a possibility that the tax credits may be denied, based on a decision that may arise well after the production has been shot.
I read with great concern the statement attributed to the Royal Bank of Canada, which formed part of the submissions of FilmOntario. It stated:
Should the assumption of eligibility currently underlying all bank loans to this industry be compromised or diminished by Bill C-10, this will indeed limit the ability of the bank to continue funding Canadian content production.
That statement should concern every single person who works in the industry.
[Translation]
Jean-Pierre Lefebvre, President, Association des réalisateurs et réalisatrices du Québec: Mr. Chairman, I am the President of the Association des réalisateurs et réalisatrices du Québec which was founded in 1973 with the mission of defending and promoting the professional rights and interests of its 570 members working in the film and television industries.
L'Association des réalisateurs et réalisatrices du Québec was incorporated pursuant to the Loi des syndicats professionnels du Québec and it is recognized by the Commission des associations d'artistes du Québec as the representative of all the producers who work in any language other than English, which means that if the Chinese came to Quebec to shoot films, our association would be in charge of that.
The Chair: How many members did you say you have?
Mr. Lefebvre: There are 570 of us. Finally, the Association des réalisateurs et réalisatrices du Québec is accredited by the Canadian Artists and Producers' Professional Relations Tribunal.
Indeed, as everyone has repeatedly stated, the Canadian Criminal Code contains the essential measures needed for apprehending, judging and sentencing any person or any audiovisual material that might be contrary to public policy. In English, the term ``public policy'' is used, which is very different from the French term ``l'ordre public.'' Someone will have to solve this translation problem, the English term is much more general than the French term. If the courts issue a sentence, those who have received tax credits have to reimburse them.
Pursuant to the said Criminal Code and the Charter of Rights and Freedoms, any Canadian citizen, including the Canadian Minister of Heritage, can denounce and prosecute anyone who disturbs public policy, or order.
The section is not only redundant and superfluous, but it also is wide open to totally subjective interpretations. Witness the statements that Madam Minister made before you. Let me quote her words:
I need to stress that the application of the ``contrary to public policy'' will not be taken lightly. . . I have stated it and I repeat it: Bill C-10 is absolutely not a matter of censorship.
Words like these must be taken lightly, because they can be interpreted in as many ways as there are individuals on this earth, and they are open to many arbitrary, moral and religious judgments.
The said section cannot and, in our opinion, must not be amended in any way. Especially not on the basis of what the Canadian cultural community and audiovisual industry might propose. The community and the industry would then share the blame for this censorship and self-censorship.
I am emphasizing the cultural community because we have discussed the industry but we have not mentioned culture which includes the sector that supports productions funded by subsidies from the Canada Council and which also have a share in the budget. This is much more important for documentaries than for fiction. We should discuss culture as much as industry, if not more. Therefore, in our opinion, this section must simply be struck from the text of Bill C-10.
In conclusion, a democratic government like ours, that does not believe in its own institutions, in its own Criminal Code and in its own Charter of Rights and Freedoms would not deserve to be trusted by Canadian citizens.
The Chair: Thank you very much, Mr. Lefebvre, for your most impressive presentation. Let us now go on to the questions.
Senator Fox: I have a question for each witness and I would like to begin with Mr. Lewis.
[English]
Mr. Lewis, I would like you to talk a bit about the economic impact in Canada at the moment of productions that IATSE in particular is involved with. I would like you to talk about the economic impact — and I will come back to the culture later — of U.S. productions in Canada and then also talk somewhat about the fact that the minister justifies her intervention for Canadian productions under the guise that there is public money involved and the minister is entitled to have a droit de regard on what kinds of films are produced. Once that is there, it is inevitable that it will be extended at some point to U.S. service productions. What kind of impact would that have on the people you try to bring to Canada to shoot films in Canada?
Mr. Lewis: I will try to answer all three of those questions. If I do not, please let me know.
The motion picture industry is a global, very competitive industry. Canada has been on the leading edge in infrastructure development, crew base, sound stages, equipment supply companies and also financing. There used to be a tax shelter system. That was done away with, and the present tax credit system was brought into play.
It is becoming increasingly difficult to lure the big-budgeted American productions. Despite what was said by previous witnesses, it is one industry. The big-budgeted American productions that have come to Canada have helped develop this industry to the benefit of the domestic industry.
Sound stages that exist in Montreal and Vancouver and the new one being built in Toronto would not have been built solely to service the domestic industry. Equipment houses and companies that supply the industry would not have existed without foreign service work coming in. It is to the benefit of the domestic industry that it is here so that we can draw upon it.
Almost every state in the United States now has a competing and, some would argue, more favourable labour supply tax credit. The State of New York has just tripled its tax credit this week. The State of Michigan has introduced a 42 per cent tax credit on all expenditures, not just on labour. They cannot service the work going into Michigan.
The Film and Television Action Committee was referred to earlier, which is really about runaway production from Los Angeles County. The work is going everywhere in the world right now, including New Mexico, the Carolinas and throughout the United States in addition to Canada. In the midst of all of that, it is difficult at the best of times to attract productions, particularly with our dollar where it is now and with competing tax credit regimes in the U.S. that are superior to ours in Canada even when you add in the federal and provincial tax credits. It is becoming very difficult to lure shows.
Do we really want to give someone an excuse not to come here? That is what this bill would do. It would kill the foreign service industry overnight if this was to extend into foreign service work. It is just not worth the headache.
If they think that they might not have that tax credit financing at the end of the day, no studios will come here. Why would they? They have a lot of options. Other states and countries are doing whatever they can to lure that kind of work to their particular jurisdiction.
I am sure of the devastating impact that the extension of Bill C-10-type regulation into the foreign service industry would have; it would effectively kill the industry overnight. It would have a damaging impact also on the domestic industry. Again, you cannot think of them as two separate industries; they are integrated.
Senator Fox: I have one last yes-or-no question. You basically support the CFTPA proposal before us. Is that correct?
Mr. Lewis: That is correct.
Senator Fox: Ms. Hahn and Mr. Christou, the minister has said that no censorship is involved. I would like to know what you think about the minister's arguments defending her bill. She has repeated them recently on Radio-Canada, saying there is no censorship involved in this bill because if we turn off the taps of public funding, people can get the money somewhere else.
I think Canadians are very proud of the industry that you represent here today.
[Translation]
The documentary industry is really the crown jewel of the Canadian industry with its talent and its creativeness. I would like to know what you think of the argument whereby you can always get other funds if one of your films is rejected by the minister.
Could you simply answer this argument according to your opinion?
[English]
Mr. Christou: An 11 per cent reduction in our budgets would kill the documentary production industry.
For example, Up the Yangtze had a budget of $800,000 of which around $80,000 was federal tax credit. Without that $80,000, the production company would have gone bankrupt. There is no way the film could have been made. This film has been a huge success, so I think it is a pretty simple answer. That money cannot be replaced outside of the tax credit system. There is barely enough money to finance documentaries in the first place within the system as it is now. If that were removed, unless other measures were in place — for example, broadcasters beings forced to increase licence fees or compensation from other methods such as more funding through provincial and federal funding agencies like Telefilm Canada or the Canadian Television Fund — there would be no way to replace it.
[Translation]
Senator Fox: Mr. Lefebvre, you mentioned the important role played by culture in cultural industries, and that without culture, there cannot be any cultural industry.
The minister maintains that you should not worry if a film is rejected, because basically, the private sector can always replace the missing funds. Thus, you should not worry because your film will be accepted by the system.
How do you react to the introduction of subjective elements into the standards for awarding tax credits? I would like to note that the witness who preceded you mentioned a film to which we referred as YPF. This film was funded by Téléfilm Canada — which, by the way, does not fund pornographic films — and by federal and provincial tax credits. It seems that a federal agency decided that this film was not pornographic whereas it decided that it was.
Who should decide whether a film is compliant with the guidelines from the minister, guidelines that she could change on a daily basis?
Mr. Lefebvre: That is what I said previously, this has to do with principles. We have all the instruments we need to defend ourselves against any violation of public policy, and judgments can only be subjective.
The minister herself mentioned integrity, responsibility and efficiency. I am sorry, but if there are any lawyers in the room, they know very well the concept of integrity is interpreted differently by each and every religion.
When the journalist from the daily Le Devoir called me on the telephone, I thought that it was a practical joke. I cannot believe that a so-called democratic government can even think of introducing such an article. It is almost as if we were in the former USSR with this totalitarian legislation.
On the other hand, let us say that culture is always moving ahead and that creative artists are not ahead of their time, they are of their time. The rest of society lags behind and remains attached to old standards.
Copernicus was banned by the church because he said that the earth rotated around the sun. It is not as if we had no benchmarks in our system, because we too have normal, democratic benchmarks that have been thought out over the centuries. This makes no sense at all! This is why we think that there must be no compromise on that point. This must be withdrawn.
For instance, we mentioned pornography. But how about politics? Jean Lapointe said at a meeting in Montreal that the film Les Ordres could have been refused tax credits. It is a film that deals with the October Crisis and does not paint a very pleasant picture of the federal government. If you just stick one hand into that machinery, everything will get sucked in. Therefore, let us say no to subjectivity.
Senator Massicotte: I would like to thank all of our witnesses for appearing before us today. There has been reference to the Criminal Code, but also to other provincial standards to determine the credits as such. Can you explain for us how the decisions are made, that is, who gets the money and who does not, without reference to the Criminal Code?
[English]
Mr. Christou: The financing of Canadian films is a labyrinthine, complex thing. Essentially, there are layers everywhere you turn. To finance a film, first there are broadcasters. Let us start with them.
Senator Massicotte: We are having a debate now about the Criminal Code, but are there other standards that apply elsewhere, with different forms of government subsidy that are specific and that determine the standards?
Mr. Christou: I do not know the specific language within the guidelines off the top of my head, but I certainly do not know of any pornographic films, for example, financed by the Canadian Television Fund. I do not know of any pornographic films financed by Telefilm Canada or SODEC, Quebec's provincial funding agency. The Ontario Media Development Corporation has never funded a pornographic film. British Columbia Film has never funded a pornographic film.
I assume there are guidelines in there. I do not know the language of them all, of course. As far as I know, no government agency has ever funded a pornographic film.
[Translation]
Mr. Lefebvre: One of the first regulations of all institutions is to never fund any audiovisual product that is in violation of the Charter of Rights and Freedoms. We have the same provision in our association's charter. We are not allowed to do anything that is hate propaganda or pornography. In Quebec, there is even a provision of the act on public projections that states very specifically that no film may be shown in Quebec if it violates the public order or the charters of rights and freedoms. We are in the process of building a pyramid where there is a likelihood of one thousandth of a millimetre that such a thing would happen. And if it did, the courts will be involved.
Senator Massicotte: I am trying to understand this. There ould be a discussion about the Criminal Code at such. Some think that is not the current reference point. We are talking about the Criminal Code, and about the prison sentences it provides. Here, we are talking more about government subsidies. I am trying to distinguish between your arguments. I understand the major fear we all share regarding political subtlety or discretion. Perhaps we will relive the period from 1930 to 1940.
If we were to amend the legislation to say that strict regulations will be introduced and debated publicly in Parliament, would that solve the problem? Or perhaps you do not like standards of that kind.
Mr. Lefebvre: Definitely it would not solve the problem, because the issue would be to establish — even in Parliament — criteria of a subjective nature, when they can only be of a legal measure. That is all.
Senator Massicotte: You say that SODEC is a good example; it does not allow for the funding of pornographic films.
Mr. Lefebvre: Absolutely.
Senator Massicotte: However, many pornographic films are not subject to the Criminal Code.
Mr. Lefebvre: And they do not get any tax credits, whether from the federal government, or from the provincial government. They also do not get any subsidies.
Senator Massicotte: But we are talking about tax credits.
Mr. Lefebvre: Yes, we are talking about tax credits; that is what I said.
Senator Massicotte: Why would people not accept the same rules that are in place in Quebec?
Mr. Lefebvre: Telefilm Canada has the same mandate not to provide funding to films that would be in violation of the public order. That is crystal clear.
Senator Massicotte: You would not be offended if the same regulations were used to determine the tax credits?
Mr. Lefebvre: This applies throughout the system. When someone gets a tax credit from the provincial government in Quebec, this is approved by SODEC. So SODEC ends up screening those who get tax credits. However, this has already been decided by the people in charge who are familiar with the rules of the institution and who have enough common sense to know that something may be dangerous. At that point, they meet with the individual and ask what his or her intention are. Sometimes they are films on pornography or on violence. You mentioned the example of genocide. It is so subtle. Who is going to determine where the line should be drawn among all these considerations? Almost every day our directors have to deal with broadcasters who say: ``We can't air that.'' Often, they say this for political reasons. They say it could offend a minister somewhere in world and that their lawyers have said. . .
The constraints on creative activity are so tight at the moment — they are actually too tight — that we should not tighten them further by introducing subjective considerations.
[English]
Ms. Hahn: I also think you should consider that certain triggers are required in order to even apply for a tax credit. In the broadcast industry, that is a broadcaster licence. In order to acquire a broadcaster licence, the broadcasters will ensure that the film adheres to the guidelines of the Canadian Broadcast Standards Council, and if they did air something pornographic, they could be subject to reprimand as broadcasters.
There are things in place before you can even apply for the tax credit, which in some ways takes care of looking at it, because the industry is regulating itself.
I produced a series on Canadian poets. Our broadcaster asked us to remove certain phrases or words from certain poets because they thought viewers might find them offensive. We acquiesced because that is our broadcaster and the one providing the licence to us.
[Translation]
Senator Nolin: Mr. Lefebvre, this issue and the phrase ``contrary to public policy'' have been around for a while when it comes to drawing up criteria. In March 2001, your association was invited to take part in consultations in which the phrase ``contrary to public policy'' was used specifically.
Mr. Lefebvre: What was that about?
Senator Nolin: A paper was distributed to the 33 organizations in your industry and was designed to establish a number of criteria to amend the tax credit process. One of the criteria was compliance with public policy. I am trying to understand why your industry, or your association changed its mind between March 2001 and the present?
Mr. Lefebvre: First of all, I was not with the association at the time, I apologize. Second, if we did take a stand, I think it was on the issue generally, because no one was aware of this little clause until a few months ago. So I would like to see the document on which we took a stand, because this runs counter to our entire policy, which seeks to guarantee complete creative freedom and freedom of expression to our members.
Senator Nolin: I agree with you, but I am just trying to understand. This was a fairly short document, 13 pages long, put out by the same department in an effort to consult the industry; it is exactly the same criteria. And I would agree that this criterion — contrary to public policy — is quite a subjective one. If we look at the case law on the list, we can see that this is quite broad, but that it does comply with some fairly identifiable criteria.
Your association was one of a group of about 30 associations, and this phrase was used specifically in the consultation paper used at the time.
Mr. Lefebvre: Do you have the association's name on that? I am quite intrigued, because this is completely contrary to the position we defend.
Senator Nolin: I find it intriguing as well, and that is why I asked you the question. I can get some information on that.
Mr. Lefebvre: I will lecture my predecessor.
[English]
Senator Nolin: Were other associations consulted a few years ago?
Mr. Christou: I do not think we were consulted. Again, it is only recently that we have become a national organization. We used to be an organization of regional chapters, so it is possible that we were not consulted at the time because of our status.
Mr. Lewis: In terms of the IATSE, this question was put to witnesses from the Directors Guild of Canada, the Writers Guild of Canada and ACTRA, the Alliance of Canadian Cinema, Television and Radio Artists. They are doing research to see what response, if any, they provided. With all due respect, regardless of whether an adequate response was provided back in 2001, it does not take away from the situation that we face now. It might be that the unions, guilds and associations were derelict in some way — and I am not saying they were — but that does not take away the potential consequences of Bill C-10 that we are looking at today. We must look at it on a going-forward basis, not retrospectively.
Senator Nolin: I hear you.
Senator Ringuette: Mr. Lefebvre, you made your points clearly. I hope that you were present for the previous panel of witnesses.
When the minister appeared before the committee, I asked her if the department had done an economic impact study on this provision in Bill C-10. The answer was that no economic impact study was done on the proposal in Bill C-10.
I understand that there is a need for a critical mass of infrastructure and professionals in the Canadian industry. One of the means to achieve that is the labour tax credit to foreign productions.
A word of warning to you: I might have raised the issue with the witnesses before you, and they might be going to the PMO, the Minister of Justice and Treasury Board to lobby. Perhaps you should give a call to the same departments to begin your lobbying to try to balance this very important and critical mass that you need in order to establish the industry in Canada. I agree with you.
I also find it interesting that all of you, like all of our witnesses last week, agree that there is a need to have a clear provision in this bill in respect of the Criminal Code and, if need be, the Canadian Charter of Rights and Freedoms, so that everyone will feel safe under that umbrella and subjectivity in the bill is removed.
[Translation]
Mr. Lefebvre, we have heard that the tax credit introduced in 1995 reflected the success of the tax credit measures in place in Quebec. Do you think that if our legislation reflected the provisions of the Quebec act on the Quebec tax credit word for word, that you would find the provision satisfactory?
Mr. Lefebvre: I would have to see the wording of the Quebec legislation to say whether or not I would agree. However, I think the federal government is big enough to do its own homework.
Senator Ringuette: Apparently not, because we have this bill.
Mr. Lefebvre: This remains a question of principle. There should not be any subjective considerations. It would be fine to copy the wording of the Quebec legislation, but I am not familiar with each and every word of it.
The Chair: Quebec does things right.
Mr. Lefebvre: Thank you.
Senator Ringuette: This is a comment, not a question. I must apologize for leaving, but I am late for a meeting of the finance committee, which is sitting next door. However, I would like to thank you for appearing before us today.
[English]
Senator Jaffer: I thank you for taking a risk and sharing that with us; it brings back perspective to the issue. After listening to so many I feel that sometimes we are becoming our brothers' keeper. We have the Broadcasting Act, the Criminal Code and the Charter. There are many ways to prevent people from going over the boundaries.
Mr. Christou, you said something I am curious about, and I would like all four of you to answer. From what you were saying, I understand that you are reluctant to help set the standards because the industry is large and the issues are large. What you do, I believe, is prick our conscious to what is happening around us. You were not comfortable to set that standard. Can all four of you comment on that?
Mr. Christou: It is not up to individuals to set the standards for the public. Who is to say that one individual's idea of what is for the public good is better than someone else's idea? I would not feel comfortable being responsible for creating those guidelines or consulting on the creation of them because I do not feel comfortable with that responsibility. It is as simple as that. There is a reason for the Criminal Code. Precedent has been set over years and years. There is a reason for the law and that should be sufficient as the final, last resort after the 17 other hoops we have to jump through as filmmakers to get our films approved by the funding agencies.
Ms. Hahn: If you move ahead with this, you will be putting the minister in the position of being that one person who determines the standards for the whole country when she is elected to Parliament. She is elected to Parliament, but she is not elected to be the Minister of Canadian Heritage. It is the Prime Minister's responsibility to appoint one person to make some major decisions. Again, I would not want to be the minister responsible for that because it goes way beyond. Who do you have in the room with you consulting? Even within our industry, the voice of documentary filmmakers is often not heard, in particular with other organizations such as IATSE, whose crews are so small because their productions are so small, and the CFTPA. We have to fight to be represented within that. Who will be sitting at the table to determine these regulations? Will it be Mr. McVety or some other organization? Who is in the room? That is one reason we were not clear on what would happen if this bill passes. Who will be in the room determining the regulations? The minister has not answered that question.
Mr. Christou: We are a free market economy, and so Canadians vote with their dollars and with their remote controls. They have the choice as to what they watch and when they watch it, and what their children, their grandmothers, their brothers and sisters watch. Everyone has a choice. I think it comes down to the fact that it is up to individuals to decide for themselves what they want to watch or do not want to watch. Everything beyond that is up to whether it is illegal.
[Translation]
Mr. Lefebvre: I have a brief comment. Senator Fox recently attended a meeting in Montreal where a lawyer clearly stated: ``We have studied this section and we have tried to see whether it could be amended or rewritten — it was impossible, it must be withdrawn, that is all. There cannot be any compromise.''
The Chair: Are you talking about the Quebec legislation?
Mr. Lefebvre: That is your interpretation.
The Chair: What legislation are you talking about?
Mr. Lefebvre: Bill C-10. Excuse me, I thought that you were talking about Quebec know how.
The Chair: Quebec obviously knows how to do things right.
Mr. Lefebvre: Each time that we try to interpret or amend a section, we come up with a subjective element; we go back to the legislators, to legal experts, to lawyers. Personally, I would refuse to sit on a committee that establishes selection criteria, although I think that I am liberal enough, without engaging in politics, to say that we must be fairly tolerant. I would refuse to do that because it is none of my business.
[English]
Mr. Lewis: I do not have anything more to add to that. This is a problematic area. I had the opportunity of reading through the transcripts of the last witnesses, and I feel that there is something else going on here because there really was no compelling problem that had to be corrected in this whole area.
I think Senator Goldstein made an accurate point with the previous witnesses. We are sometimes confusing words and terminology to suit our own purposes. Pornography gets slipped into the debate, and where was that to debate? It is clear that no one is encouraging financial public support for that. It is a slippery slope.
The consequences to the industry and to the people who work in this industry — and there are thousands of them — are direct and immediate. Royal Bank of Canada is not exactly a left-thinking institution. When that bank puts out that statement, it should give everyone pause, because there really could be significant consequences to the industry.
Senator Jaffer: I was with you, Mr. Christou, until you said ``what I can let my grandmother watch.'' I am a grandmother. I hope my grandson never decides what I watch.
Mr. Christou: Sorry.
The Chair: I will give the last word to Senator Banks. He is our artist in residence and a standard setter.
Senator Banks: I do not know about any of that. I belong to the American Federation of Musicians as well as several other unions. I do not know if IATSE is the largest, but it is certainly among the largest and the oldest.
Putting aside that the tax credit has always until now been labour-based and not in any way content-based, is there anything short of jail that should be in place, however it is put in place, that would be a standard or a hoop through which productions must jump in order to receive the tax credit? I ask each of you, and you can answer yes or no.
In other words, Sarah Polley stated before us that if it is not illegal in the Criminal Code, you should be able to say it and show it. She said ``say it,'' but I will add ``show it.''
Is there anything short of that? Is there some public standard that ought to be put into place with respect to tax credits in particular that ought to be there in the public interest? Not in the public policy, but in the public interest. Or should it simply be that if it isn't illegal, you can show it?
Mr. Lefebvre: No. It is there already. We have all the protections.
Mr. Christou: I agree with your statement as well.
Senator Banks: I was not making a statement. I asked a question.
Mr. Christou: Anything that is not illegal can be said or shown, yes. I agree with that.
Ms. Hahn: I agree with that, especially in terms of documentary films, because often we have to question what is legal and what is illegal. There are documentaries about marijuana use. Marijuana is illegal. Can we not have a public debate in a documentary around marijuana use because it is illegal? People can vote with their clickers.
Mr. Christou: I think you have to separate the act of something from the discussion of the act, which is an important distinction that I do not think was made by the previous witnesses.
The act of discussing sodomy is not the same as the act of sodomy, and I think the discussion and a film about are very different things.
Mr. Lewis: Not to be too trite, but in a democratic society, sometimes things make us uncomfortable, and that is part of the price we pay to live in a democratic society.
I have to be honest; I have to say this out of respect to my 81-year-old father. I do not think it was you, chair, who referred to a movie as ``The Big M,'' but I grew up watching Frank Mahovlich play hockey, and I hope this committee uses a different term to describe that movie.
The Chair: He is a member of our esteemed Senate. I agree with your point. Certainly there was no intention to impugn the Big M, Number 27.
I thank all the witnesses. This was another interesting, positive and good discussion. I think the witnesses went to much trouble to put their presentations together. You expressed them eloquently, and we were listening. Thank you very much.
The committee adjourned.