Proceedings of the Standing Senate Committee on
Foreign Affairs and International Trade
Issue No. 51 - Evidence - Meeting of October 17, 2018
OTTAWA, Wednesday, October 17, 2018
The Standing Senate Committee on Foreign Affairs and International Trade met this day at 4:15 p.m. to study the impact and utilization of Canadian culture and arts in Canadian foreign policy and diplomacy, and other related matters.
Senator Paul J. Massicotte (Deputy Chair) in the chair.
[English]
The Deputy Chair: Honourable senators, our chair will be absent for the beginning of this meeting and I’ve been asked to replace her for this portion.
My name is Senator Paul Massicotte and I’m deputy chair of this committee.
If I can take a note before proceeding with the committee, we have one new senator who has joined this committee. Senator Dean is now a permanent member of the committee. On behalf of the members, welcome. I am sure that you will contribute significantly. Expectations are very high, but I’m sure you’ll do well. We also have Senator Mockler, who is replacing a senator, who will be with us shortly.
This committee has been authorized by the Senate to study the impact and utilization of Canadian culture and arts in Canadian foreign policy and diplomacy, and other related matters. Under this mandate, the committee continues this study today.
[Translation]
I’m pleased to welcome our guests. They are Jayson Hilchie, the President and CEO of the Entertainment Software Association of Canada; Kristian Roberts, a partner at Nordicity Group Limited; and Valerie Creighton, the President and CEO of the Canada Media Fund, who is joining us by video conference from Toronto. Welcome, everyone.
I’ll ask the senators to introduce themselves, starting on my left.
[English]
Senator Cordy: Jane Cordy, Nova Scotia.
Senator Bovey: Patricia Bovey, Manitoba.
[Translation]
Senator Saint-Germain: Senator Raymonde Saint-Germain from Quebec.
Senator Cormier: Senator René Cormier from New Brunswick.
[English]
Senator Dean: Tony Dean, Ontario.
Senator Ngo: Thanh Hai Ngo, Ontario.
Senator Oh: Victor Oh, Ontario.
The Deputy Chair: I remind senators and witnesses that their remarks and questions should be precise and concise in order to allow us to cover as much as possible in the time that we are given. We look forward to hearing your presentations and the answers to our questions.
We will begin with Ms. Creighton, appearing by video conference. The floor is yours.
Valerie Creighton, President and CEO, Canada Media Fund: Good afternoon, everyone. Public diplomacy, widely understood as a state’s ability to influence through attraction and moral authority rather than raw military or economic power, has since 2015 become a hallmark of Canada’s foreign policy. The pillars of public diplomacy, or soft power, include values, institutions, policies and culture. Of all the instruments of public diplomacy, culture is perhaps the most effective and the most long-lasting.
Cultural diversity is now a strategic resource that, in a global, knowledge-based society, drives innovation, creativity and reconciliation. Brand Canada is already very strong. From Margaret Atwood to Justin Bieber, we have key strengths in literature and popular music. Television, digital media and film enhance that success story and draw from the wealth of perspectives a diverse society like Canada offers.
Canada’s reputation is overwhelmingly positive. In 2011, for the second year in a row, Canada led the world in a major study of national brand strength, and we consistently lead international rankings on global perception and indicators such as quality of life.
The key to branding Canada is to give the world an exciting story about us. Canada has a great story to tell of an optimistic, sophisticated, creative, multicultural, multilingual, inclusive country with extraordinary natural wonders and vibrant, cosmopolitan cities. It is encouraging to see the federal government take steps to position Canada as a cultural powerhouse. The time is ripe for Canada to further its use of public diplomacy through the country’s cultural sector.
As a public-private partnership, the Canada Media Fund has continually aligned itself with public policy priorities. Although we operate independently from government, we recognize that there are a number of priorities for the federal government that include, among others, gender balance, reconciliation with Canada’s First Nations peoples and the exercise of public diplomacy on the international stage.
The Canada Media Fund has positioned Canada as a trusted international partner since 2006 through international partnerships as well as consistent and effective participation at festivals and markets around the world. Last year, we participated in 21 such events. There’s an appendix of those events with your documents. This international exposure has resulted in a growing list of international partnerships with funding agencies around the world to create co-development and co-production matching funds. Since 2014-15, we’ve funded 68 projects through these incentives, which amounts to $4.7 million in investment, generating a further $4.3 million in foreign investment into the country.
We’ve developed such funds with counterparts in Australia, Brazil, Colombia, Denmark, Germany, Ireland, Italy, Israel, Luxembourg, Mexico, New Zealand, Northern Ireland, South Africa, Wallonia and with our circumpolar neighbours, Greenland, Norway and Russia. Those latter examples are dedicated to funding Northern, Indigenous content. We believe these initiatives not only support the audiovisual sector by providing co-production opportunities for Canadian creators but, just as important, they contribute to Canada’s increasingly significant public diplomacy efforts and the international reputation of our country.
Decades’ long policies have fostered our cultural independence and created an environment where Canada’s creators have the opportunity to succeed and thrive in an increasingly competitive, global, borderless marketplace. In the absence of legislative and regulatory levers, appropriate financial investment and the inherent belief in the importance of arts and culture as essential parts of our national fabric, our voice would simply not be heard in the tsunami of available content to Canadian consumers.
Our audiovisual content is currently in a position of international leadership. Canadian kid’s content is among the top in the world, both in terms of international acclaim, having previously garnered Emmy, Peabody and Kidscreen Awards, but also growing international sales. Quebecers in the room won’t be surprised to know that La guerre des tuques is a cult film among people who grew up in the 1980s in Quebec, but what might be more surprising to you is that an animated remake of the film, Snowtime!, was recently sold internationally with a 4,000-screen Chinese theatrical release. This is just one example among many illustrating Canada’s success in the international marketplace. Foreign investment in production in Canada, including content exports, reached $4.67 billion in 2017.
We must remain competitive in order to get a bigger slice of the growing media-hungry marketplace. This can only be achieved if we continue to invest and support quality, successful content through smart investments and market validation systems, but also through the implementation of export development initiatives.
In the context of the Government of Canada’s Creative Canada Policy Framework and its vision for Canadian content in the global marketplace, the CMF launched two export pilot programs. These programs were developed to complement existing private and public programs, promote content creation for international markets, increase the volume of content exports and create a leveraging effect to help finance additional content, increasing the reach and revenue earned by the Canadian productions. In 2017-18, we invested $3.1 million to help 54 export-ready Canadian projects. Through the market interest demonstrated in these programs, it’s evident that the world wants more Canada.
The screen-based sector is undergoing unprecedented shifts. Relentless transformation is the new norm in our industry, as is the case in many others. Adaptation is now a necessity to ensure that Canada remains a dynamic hub in the global screen-based industry. The international projection of our values and the telling of Canada’s stories on smartphones, tablets, game consoles, TV and VR sets around the world depends on it.
Thank you.
The Deputy Chair: Thank you.
Kristian Roberts, Partner, Nordicity Group Limited: Thank you for the opportunity to participate in this important study.
I’m the partner in charge of Nordicity’s Toronto office. We’ve been working continuously with Canada’s cultural and creative industries since the company’s relaunch in 2002 and have had the pleasure of working with a variety of those industries throughout that period of time.
Our work ranges from conducting economic impact assessments for various creative industries, such as for my colleague Jayson and the Entertainment Software Association of Canada, developing cultural plans for municipalities around the country and helping craft strategies for these industries as they strive to navigate an increasingly complex and ever more global world.
Over that period, I’ve had the chance to see two ways that Canada is able to exert its influence abroad through culture, which, in our view, encapsulates the way cultural diplomacy works in practice.
First, there’s this notion of standing out, which is the passive way that our cultural products influence people, cultures and governments. From the video games made in Canada played throughout the world to audiovisual content funded by the Canada Media Fund, like the show “Paw Patrol” — which, when taking my son Oscar to playgrounds around the world, I’ve found to be a truly universal brand — Canadian cultural products have found homes in markets across the globe. In fact, Statistics Canada tells us that Canadians exported over $16 billion of those cultural products in 2016 alone, which made up approximately 30 per cent of the contributions to gross domestic product from the cultural industries in that year.
While it is true that many of these products are localized when exported, they nonetheless contain the seeds of Canadian culture. As they are experienced by people in far-flung locations, that cultural influence grows, as does the credibility of Canada as a source of cultural content.
From a policy perspective, the evidence of Canada’s ability to exert this seemingly passive influence usually shows up in our various reports as export income, or the money made from overseas markets. It is mostly tied to the creative economy’s ability to attract new monies to Canada, be that through sales, investment or even tourism. It is thus logical to conclude that programs designed to promote exports also help promote cultural diplomacy in that way.
In addition to this type of cultural diplomacy, the second type is one that is more active. Let us call this reaching out. This kind ranges from the participation in multilateral conventions like the UNESCO Convention for the Protection and Promotion of the Diversity of Cultural Expressions, which was, in part, led by Canada; to trade missions such as that to China led by Canadian Heritage last year; to treaties, such as those Ms. Creighton has referred to, with other countries that help facilitate the co-productions for audiovisual production.
Each in their own way, these interventions can contribute to Canada’s ability to exert influence abroad. However, it is important to recognize there is a difference between using the global cultural market to achieve domestic policy goals, such as more export revenue for Canadian companies, and cultural diplomacy more directed at changing the realities in these other countries.
In the latter case, the notion of mutuality suggests that by seeking to make positive contributions to people, institutions and governments around the world, Canada can create a more stable, prosperous and secure global economy. Moreover, it is our experience that these interventions are most effective when they are targeted at those entities closest to the proverbial coalface rather than focusing on the typical diplomatic channels. Think of it, if you will, as peer-to-peer diplomacy.
Drawing on a recent example, while working with the British Council, we were able to try to make life easier for artisanal shoemakers in Pakistan to sell their wares to international customers, thereby allowing that small town to become slightly more economically stable and, perhaps more important, confident in the value of their own cultural export. In turn, a more prosperous and confident Pakistan, or part thereof, makes the region and the world a safer, more stable place.
In the end, we don’t see these active and passive forms of cultural diplomacy as being oppositional. Rather, they support one another. For example, a robust export industry is almost a necessary precondition for the more active forms as it lends credibility to those efforts. Conversely, engaging with creators, institutions and governments around the world makes it easier for Canadians and Canadian companies to understand, access and succeed in those markets. Moreover, as these pragmatic economic connections strengthen, so too does Canada’s ability to exert soft power in those jurisdictions. At its best, policy can be created to harness this positive feedback loop. In our view, the reinstatement of the Trade Routes program would be a good step in that direction.
Finally, it is important to recognize that the marketplace for cultural products is only going to become more global, so crafting a policy framework that balances these active and passive forms of cultural diplomacy in a mutually supportive way will only become more important. It is an ongoing process, a negotiation between these two activities and a conversation.
Thank you for your time.
The Deputy Chair: Thank you.
Jayson Hilchie, President and CEO, Entertainment Software Association of Canada: Thank you to the chair and to the committee for the opportunity to participate in this study this afternoon.
My name is Jayson Hilchie and I’m the President and CEO of the Entertainment Software Association of Canada. Our organization represents a number of leading video game companies with operations in this country, from multinational publishers and console makers to local distributors and Canadian-owned independent studios.
Canada’s video game industry is one of the most prolific in the world. It employs close to 22,000 full-time direct employees while supporting another 19,000 indirect jobs. Our industry’s contribution to the Canadian GDP is close to $4 billion, and that’s not revenue. That’s salaries of our employees and those our industry supports, along with their collective economic impact.
Our impact is considerable. The average salary of a video game employee in Canada is just over $77,000 per year, which is more than double the Canadian average. More than 75 per cent of the products we make are bound for export markets where Canadian innovation and creativity ends up on the screens of a global audience.
Of the 600 studios that span from St. John’s, Newfoundland and Labrador to Victoria, British Columbia and all points in between, approximately 85 per cent of them are Canadian-owned and controlled. The Canadian industry is a mix of large multinational publishers and developers and Canadian-owned companies, and this mix helps to diversify and strengthen it.
We attract significant international investment from our industry’s leading multinationals. They are the largest employers in the Canadian industry and are creating some of the biggest video games in the world right here in Canada. This fall, nine of the most anticipated new releases of the year are Canadian-made. Think about FIFA 2019, Assassin’s Creed Odyssey or NHL, to name just a few. All of those are made in Canada.
With Canada being such a creation powerhouse, the world takes a close look at what we are doing here. As a result, the Canadian video game industry gets to regularly share best practices, talent and innovations with the rest of the world. Let me give you a few examples.
As I mentioned, earlier this year I had the great privilege of travelling to Australia to meet with stakeholders and their local industry. I met with leading studios and presented them an overview of the Canadian success story and some of the best practices that make us so attractive to major developments and investments. While there, I did numerous media interviews, extolling the benefits of creating a business environment that will help the video game industry there grow and thrive. In addition, I met with elected officials on both sides of the aisle to help them better understand the story of Canada’s success in this industry and ways that Australia could mimic Canadian policies, such as tax incentives for job creation.
In 2016, we visited Barcelona, Spain, to present Canada’s video game industry successes to members of the Cortes Generales. As in Australia, this was done in co-operation with the national video game trade association in Spain. The goal was to share best practices with respect to government support to grow the video game industry in that country.
Last November, along with the leaders of close to 10 video game trade associations from around the world, I met with the U.K.’s Minister of International Trade to discuss Brexit, its implications for skilled labour in Britain and how our industry views international trade investment. Hosted in the Westminster Parliament Buildings, it was an amazing opportunity to discuss some of our most pressing global issues with a senior member of the U.K. government.
Most recently, I sat down with the Norwegian Minister of Culture in Toronto to discuss how Canada’s video game industry is thriving and to share best practices as that country takes a hard look at how they can support their video game industry.
Trade shows are another way for Canada to shine and showcase its expertise. In 2017, Canada was the partner country in Germany’s Gamescom, the largest gaming event in the world, which provided the Canadian industry with a good amount of global exposure. This initiative also included a trade mission, organized by Global Affairs, that helped dozens of Canadian video game studios connect with potential buyers and partners.
As part of this event, Sean Casey, who at the time was the parliamentary secretary to the Minister of Canadian Heritage, attended and gave remarks alongside German Chancellor Angela Merkel. At the closing of the opening ceremony at the conference, the chancellor looked at Mr. Casey and told him Germany would up its game and try to beat Canada. It’s a great story.
These events and conversations are important because they allow us to tell our great story. Canada has the talent, investments, expertise and reputation to create the best and most innovative video games in the world.
This is the message I want to reinforce to you today: that the Canadian video game industry is an important player in Canada’s multilateral relationships because we are a global creation powerhouse.
Thank you.
The Deputy Chair: Thank you. Much appreciated to all of you.
[Translation]
Senator Cormier: Thank you for your presentations.
My first question is for Ms. Creighton, and it concerns funding for the export pilot program. Given the diversity of the productions on the market and the diversity of the distribution networks at the international level, I want to know your criteria for determining which productions are ready for export and how you assess the impact of these productions abroad. What are your assessment criteria?
The Deputy Chair: We’ve apparently lost contact with Ms. Creighton as a result of a technical issue.
Senator Cormier: I’ll ask Mr. Roberts a question.
Since you work in the policy analysis field, I’ll ask you the following question. What factors should be taken into consideration to evaluate the success of cultural diplomacy?
We’re often asked about how the impact is actually measured. We often talk about the economic impact, but I think that there are several types of impact. Is a specific method used to evaluate the impact at the international level?
[English]
Mr. Roberts: Thank you for your question. It’s an excellent one and one that speaks to the core of my presentation. Indeed, I do believe that the economic value of cultural diplomacy is only the beginning and perhaps the precondition for the other success.
I would say that there isn’t a single method of evaluation for cultural diplomacy because the term itself is too broad to be applied in a particular policy setting. Rather, I think it is more effective and more precise to your point to develop a series of evaluation metrics for a particular cultural diplomacy activity.
Take as an example a trade mission where one objective may be commercial, another objective may be to include a portion of society in that region. Let’s imagine that we’re going to a ballet in Russia because that’s what’s happening right now — the Canadian ballet is currently touring Russia. If there was a person in the LGBTQ community in Russia or there was a group of such individuals, we may include them in our trade mission. We may include them in that process. If there was an overarching goal to affect that kind of change through culture, then we can assume that if they were included, we would be successful, and if they were not included, we would be less successful.
The point here is to come up with a particular goal for a particular cultural diplomatic action rather than attempting to create an overarching framework that might not fit the actual activities that we’re undertaking.
[Translation]
The Deputy Chair: Senator Cormier, I’m going to stop you. Ms. Creighton is back. Your question was very good. Can you repeat it?
Senator Cormier: Ms. Creighton, I’m particularly interested in your export pilot program. Given the diversity of the productions ready for the international market and the diversity of the distribution networks, what are your criteria for determining whether a production is ready for export and for measuring the impact of its distribution abroad?
[English]
Ms. Creighton: One of the things we did in the export program in the French market was work with Québecor. They have a very successful export program. Because of the very question you asked and the magnitude of export, we felt the most efficient way to use our limited resources was to partner with them. Some of the criteria that are looked at, any time you look at content to export, would be the type of genre, the success of the production company, whether or not it has been broadcast and successful in Canada and has an international focus and market interest. In terms of its success, often that is where it’s sold, how many countries it’s sold to, what co-production opportunities that particular piece of content might raise for future content opportunities, elements like that.
[Translation]
Senator Cormier: A number of types of co-productions outside Quebec.
[English]
You talked about Quebec, but I was concerned about the fact that outside of Quebec, there are a lot of audiovisual productions. Do you have specific criteria for those types of productions?
Ms. Creighton: It would be very similar. It would be the type of production, what genre it’s in. If it is kids’ content, we have many kids’ producers that are successful in the international marketplace all over the world. We would look to the budget size, who is producing it, who the associated broadcaster is and where the market potential and market reach might be. Those kinds of factors are considered. It’s not a subjective process.
Senator Cormier: How do you measure the impact?
Ms. Creighton: Often by sales once the project is exported and there are various countries that purchase that content, either broadcasters in other countries, sales and market response to that content.
[Translation]
Senator Saint-Germain: My first question is also for Ms. Creighton. You said the following in your first presentation:
[English]
The world wants more Canada.
[Translation]
You were obviously referring to Canadian audiovisual content. At the same time, I understand that the convergence stream of the Canada Media Fund subsidizes foreign companies to finance partnerships with Canadian companies. You spoke about incentives. Given the success that you’re describing, at least in terms of the volume of exports, will these measures and this help from the government still be needed for quite a long time?
[English]
Ms. Creighton: Partly, yes. As a point of clarification, we don’t subsidize the foreign company. Any content that the CMF supports is on the Canadian company side. In terms of our partnerships that we have with other countries, there will usually be a foreign financing agency, just like the CMF, and we will partner together, the two agencies. Each country will support their own content-making.
The dilemma with what has often been discussed in circles about self-sufficiency and self-sustaining content is difficult in Canada. Primarily, our market is small. If we’re going to compete on an international and global basis, we need to have enough financial resources to allow that content to maintain the kind of standards, quality and excellence that will allow us to compete.
Will it have to happen forever? It’s a good guess. We’ve seen kids’ content that doesn’t rely as extensively on public support as some of the other genres. Kids’ content is evergreen, it’s marketable all over the world, and you always have a renewing audience that is coming up as new children are born and grow and develop and watch content.
I think it’s unlikely that there will ever be a time when there is no public support for the development and production of Canadian content. It’s very expensive content to make, and as a country if we want to keep our stories in the forefront of the world so that the world can access them, we’re not like America. We don’t have the depth and level of resources in terms of production, development or marketing. And in Canada, we have very unique areas. We have our French market, our English market and certainly our Aboriginal content.
[Translation]
Senator Saint-Germain: My second question is for Mr. Hilchie and Mr. Roberts. Given the success in terms of the volume of exports that you described, can you make any recommendations to the committee to ensure that the industry has a positive impact on Canada’s international position and cultural policy, without the need for us to think, first and foremost, of providing further subsidies?
[English]
Mr. Roberts: To understand Canada’s role as an export country, we must also understand how competitive the global market is and that we are not the only ones doing this. Ms. Creighton pointed that out when speaking about how other countries fund their own cultural content.
It’s not so much a subsidy as much as it is a competitive levelling. If we were able to come up with an international convention that would say that no one should support anything and everybody would work on the same basis and every job would be equally as expensive in all parts of Canada, in all parts of the world, then maybe we could exist in a world without public support for cultural exports. The likelihood of that happening is pretty infinitesimal, so it will likely be the case that we will continue to support the export of Canadian cultural content.
That does not mean that one can’t look at the efficacy of those export programs and the degree to which success is actually related to the existence of those programs. One should look at that regularly. However, it is important to remember that we’re not the only people doing this, and there are other countries of similar size trying to make their name in the very same competitive global marketplace.
Mr. Hilchie: Do I have a second to answer that from our perspective? One thing I wanted to make clear with respect to some of the programs that the video game industry receives across Canada, mainly through the provinces in terms of job creation and tax credits, they are very different from what you would see in Europe. In Europe, many of the tax incentives and government supports are based around cultural production. You have to score so many points within a test in order to receive these tax credits. In Canada, every tax credit that our industry receives across the country and any province is for economic development and job creation, not cultural content development. Now, with respect to the CMF and funding the video game industry receives through that, that is different, but with respect to the tax credits, it is an economic development tool more so than a cultural subsidy.
Ms. Creighton: I want to add to Mr. Hilchie’s comment. Regarding our experimental stream program that supports game development, about 60 per cent of that $33 million provides financial investment to those games. In fact, it’s not a cultural mandate. It’s very much an economic mandate. That piece of the content pie that we finance brings returns back to the fund to be able to support more. They’re very similar to the nature of what you spoke about earlier.
Senator Oh: Thank you, witnesses.
I have a question for Ms. Creighton. Were you in Shanghai early last year with Minister Joly at the theatre screening of the movie that you mentioned, Snowtime!
Ms. Creighton: No, I wasn’t. Snowtime! was not screened this list trip that the minister took to China but the previous year. I was unable to attend both of those events due to previous commitments, so I was not in attendance. We had people from Telefilm there, but not from CMF.
Senator Oh: That was a great, successful screening. It was packed. There were a lot of school children there. Congratulations! That was a successful screening.
Ms. Creighton: It’s a fabulous piece of content.
Senator Oh: To what extent do your sectors integrate new technologies and digital media? What are the challenges and opportunities of these platforms?
Ms. Creighton: In 2009, Minister Moore announced the creation of the Canada Media Fund. At that time, the government collapsed the old Canadian television fund and the Canada new media fund that Telefilm administered, and the CMF was born.
The purpose of the CMF is exactly as you described. From that point onward, all applicants to the Canada Media Fund had to apply with a piece of content that could be for television but had to have another platform. Those platforms could be the Internet, mobile or streaming capabilities, but they could no longer come solely with TV as an application. We call that our convergent stream. All content coming through that program has to be convergent.
In addition, we have an experimental stream. The fundamental difference between the two is that in the experimental stream, there is not a requirement for a Canadian broadcast licence as a trigger for financing, which is the case in the convergent stream. The experimental stream is where we fund apps that are in the cultural sector, artificial intelligence projects, especially VR, and web series as well. In fact, the VR portfolio that is supported primarily through the CMF is world class. Our content makers in virtual reality are leading the world from a content perspective.
We have had the mandate for convergence in digital media since 2009. In fact, we are recognized around the world. I have been asked to speak in many countries on how you take traditional content and convergent content and marry the two to get content that is available to consumers anyplace, anywhere, any time. Of course, the challenge in Canada is ensuring we have the right tools underneath our terrific creative community that can take us into the future and also ensure the world has accessibility to that content.
Senator Bovey: Thank you all for your presentations. It’s really encouraging. I’m very impressed, Mr. Hilchie, with the work of the creators of the video games, and I loved your line, Ms. Creighton, about Canada’s cultural independence. I think that’s an important one.
I want to look forward and backwards at the same time, if I may. The Creative Canada Policy Framework announced that there would be — and indeed it was launched in June of this year — the creative export fund. It’s just through its first submission round. I’m interested to know your thoughts about where it stands right now.
With that, looking ahead, what do we need to do to make our cultural diplomatic presence internationally that much stronger? Do we need more trade commissioners, trade attachés within embassies? Do we need more cultural attachés? Do we need new models of how we create those connections? Do we need the creative industries council that was recommended in the cultural policy framework? I’d like the views of all three presenters.
The Deputy Chair: Very short replies, if you don’t mind.
Mr. Roberts: I won’t talk about exports. I’ll leave that to my industry colleagues. I’ll speak to your second question around what do we need.
I will return to the first answer, which hopefully I can make slightly clearer here, which is I think we need clear objectives. Economic betterment of Canadian companies through export is one clear objective, but that can’t be the only clear objective in a cultural diplomacy program. We need to understand what culture can do that fits foreign policy objectives. Ultimately, we’re talking a lot about the culture part and not a lot about the diplomacy part.
Diplomacy is not a thing you do because you just do it. It’s because it achieves foreign policy goals. Before we determine what mechanisms we need to achieve those goals, clarity on what those goals are should be achieved first, and maybe a trade commissioner is the best way to do that. Maybe bilateral agreements with creators is the best way to do that. Maybe a creative industry federation akin to what exists in the U.K. is the best way to do that.
Mr. Hilchie: With respect to the Trade Commissioner Service, I actually flew here today and sat next to one of the director generals for foreign investment at Global Affairs. We talked a lot about trade commissioners. In fact, he was a trade commissioner just coming back from Dubai. That gave me a lot of time to talk to him about how our industry is utilizing the Trade Commissioner Service.
We are a majority export industry, so we’re not as focused on the Canadian market. We create a lot of content in Canada, but we sell globally. I think that is the foundation of our industry. We could not survive if we only wanted to sell in Canada. The Trade Commissioner Service, the creative export program, any of these types of programs that allow support to be given to content creators in the video game industry that can then sell or partner with international buyers or partners is valuable.
Ms. Creighton: The export program that was just launched through Global Affairs at the government is just new. I understand they had a wide, diverse group of applicants. The guidelines that were set out weren’t particularly conducive to people working in our area, so I’m not even sure how many people actually applied. That’s a new program, and we’ll see how it unfolds.
In terms of what we need, the proposed Creative Industries Council was announced. My understanding is it has not moved ahead as of yet. However, my opinion from our experience is that is maybe we don’t need another structure. Maybe what we really need is some unified collaboration around the objectives that were mentioned so that people are working together. We have the embassy structure, we have Global Affairs out there working and we have the international trade at Canadian Heritage.
Our sector, in terms of what they do, is pretty sophisticated. They have been in the markets for many years, sometimes upwards of 20, doing this content, selling and exporting it. They have on-the-ground experience. They often know which partners to choose and work with, and as the world expands, they, too, will expand. The trade commission offices and the embassies themselves are extremely valuable and can be very effective partners because they have intelligence on the ground. If we could unify the country in terms of focus and work together a little more collaboratively so that everybody knows who is on first and who is doing which piece of this, it would be extremely effective and efficient.
I attended the trade mission to Mexico with the ADM and the team from international. Believe me, when you’re in the room with officials, government officials, diplomats and content makers from another country, nothing brings people together more than the sharing of ideas and content and stories.
If we could get the country to be a little more unified and collaborate a little differently — I mean, we all do it and we all kind of connect with each other at certain times, but there isn’t a unified complete approach and, I believe, clear objectives.
The Deputy Chair: Before I let Senator Andreychuk speak, I want to let you know that she used to be chair of this committee.
Senator Andreychuk: I apologize to our witnesses. Both Senator Mockler and I were attending the unveiling of the previous Speaker’s portrait, which is a tradition. Since the previous Speaker came from my province of Saskatchewan, it was a command performance for me. We call it the hanging of the Speakers. We apologize.
I think I’ve got the gist of what you were saying. It’s the same conundrum we have. Do we assist culture, which then assists foreign policy, or do we have a foreign policy objective and then seek some input from the cultural community to support that? I think that has been an ongoing debate for decades.
So at this time, if I understand what you’re saying, it isn’t just a one-size-fits-all. What you need is information, so we really need to explain the programs, have the programs clearly set out and not just principles. You don’t have time to assess and do all that. You want clear objectives. If it fits you, you’ll use it; if not, you’ll move on. If I’m misunderstanding, please correct me. That’s one part.
Going to video games, et cetera, certainly there was a lot of talk in this committee about subsidies supporting and highlighting some of our greatest talent. Should we increase our funding? What I’m hearing from you, Mr. Hilchie, is that the cultural community, the young people and all these video games — or maybe not so young. I just happen not to be one of those culturally creative people — are doing well. They have the ideas. They’ve reached out to the international community. What we heard from some people is they hit a threshold in Canada and then, to enable them to go internationally, they look around for support, whether it’s financial or otherwise, and then they tend to move away, often to the U.S., and that is troublesome to me. I’m hearing a different message from you, Mr. Hilchie. You’re saying they’re staying in Canada. Which is it?
Mr. Hilchie: First, let me just say that in the video game industry, we don’t consider ourselves to be cultural products, cultural industry. We’re focused on making entertainment products that are software, interactive digital media, that can reach an audience all over the world. In some cases this is true, but in most cases it’s not a product for Canadian broadcasting that is made for Canadians. We make a lot of Canadian content because it’s made by Canadians and sold all over the world. It’s less focused on whether the content is about Canada. We’re world leaders in creation. By the way, the average age for a video game developer in Canada is 34. It’s still pretty young. We are now a beacon for others in the world who see what we have done here and what we’ve been able to build. In fact, I was just speaking to a representative at Toronto Global and tomorrow I’m meeting with them. They’re looking at bringing a video game company to Toronto — another investment. We hear about these all the time. It’s now such a cluster that if you’re not in Canada, what are you missing?
Senator Andreychuk: From the foreign policy angle, what is it you need from the Canadian government? The Canadian government needs you. We need you to put our message across that Canada is a place to do business, Canada is creative and Canada is filled with expertise. The spillover is not just your industry but it’s everywhere else. We are competitive and we’re creative. We’re all of those things, and we want people around the world to notice Canada, and the spinoff is the political. It makes us a good country to deal with, and that makes the national interest important, et cetera. But from your point of view, what is it you need from Canada — the Canadian government or a provincial government?
Mr. Hilchie: We need the continued support we’re getting in numerous forums. One is the continued funding of the experimental stream of the CMF, which funds upwards of $25 million towards video games at least last year — at least by my calculation, Valerie, but I may be wrong. We need the continuation of the supports we get from the provincial governments.
We also need abilities for our video game companies, especially the smaller Canadian-owned ones that have video games but don’t have the resources to promote internationally. Discoverability is one of the biggest issues in our industry. Thousands of video games are published every day. If you don’t have Arnold Schwarzenegger pressing a strike button on television, it’s pretty difficult to compete with that. We’re very excited to see trade missions and the Creative Export Canada program. Anything we can get from the Canadian government to help continue to allow our creators to access foreign markets is important because we are an export industry.
Also, one thing that I will add: We are the largest video game industry in the world per capita. We’re about half the size of the American industry, which is the largest, and about a tenth of the population. We often hit full employment in our industry. Programs the federal government implemented last year, such as the Global Talent Stream, allow us to attract the best and brightest from abroad. That program will be up for renewal next June. It is a pilot program. It’s imperative for our industry that that program remains. The ability for us to bring in high-quality talent within four weeks is essential for us to continue to create jobs and grow here in Canada.
The Deputy Chair: I still have several people who would like to ask questions. If we could keep the questions short, and the answers even shorter, that would be helpful.
Senator Cordy: My question is a follow-up to the previous questioner. By the way, thank you, Mr. Hilchie, for the work you did with Nova Scotia Business Inc. and that you continue to do nationally and internationally. It’s somewhat the same thing: How did you get from the beginning to where you are now, with 600 video game studios across Canada and $4 billion in net benefit? In addition, you say you’re not doing cultural diplomacy, but in fact you’re meeting with Angela Merkel and with government leaders in Australia and Portugal, so it really is also putting Canada on the map. How do you get from people doing video games in their basements and small shops to where you are now?
Mr. Hilchie: I admit that we’re doing cultural diplomacy, especially when we’re going to these other countries and trying to help them achieve what we have achieved here. I’m simply saying that we consider ourselves to be a creative industry, not a cultural industry. We’re not captured within the exemption in the new USMCA and things like that.
It’s a long story and I won’t tell it because I don’t want to annoy the chair, but essentially there have been a few things that helped grow the video game industry in Canada. The first would be proximity to the United States and British Columbia and a 60-cent dollar in the 1990s, which drove production, and in some cases, more flexible immigration policies in Canada. At the time, the Americans had strict immigration policies. They were able to get people into Canada easier than into the U.S. so they began to build there.
In Montreal and in Quebec, it really was a government decision to adapt the film and television tax credit and target video games before anyone else in the world had done that. Like anything in life, they got first-mover advantage and got a tonne of foreign investment into the province that, 20 years later, continued to spiral and continued to grow. It’s a massive success. Of course, now every other province in Canada has tried to replicate that.
Even in Nova Scotia, from the work I did there, there are now about 300 people working on video games in Nova Scotia, and that was not the case a decade ago. You don’t have to be Quebec, Ontario or B.C.; you can be a smaller province and still generate employment and a good cluster of video game companies within the province.
Senator Dean: Thank you for all the work that you do and congratulations on your success.
I’m a latecomer to this so mine is a bit of a naive question. When we think about cultural diplomacy, I think there are some things that, being Canadians, we can take for granted. I have no doubt we’re promoting Canadian values abroad. We’re open and we’re collaborative, so we tend to promote mutual understanding. The government would want you to grow Canada’s brand abroad. In your mind, do those things collectively result in or promote foreign policy priorities, or is the promotion of foreign policy priorities separate and apart from that? We’ve heard that we’re not quite sure who has the lead on that, if such a thing can be defined, but maybe I can ask each of you to give us an example of what, in your mind and experience, has been a lighthouse example that gets close to the promotion of a foreign policy priority.
Mr. Hilchie: I can provide a very tangible example for that. When NAFTA began to be renegotiated, because we have so much cross-border investment between American and Canadian companies, it was very important that whatever we ended up with in a new NAFTA was going to be something that was going to work for the United States’ industry and the Canadian industry, because there’s so much cross-border trade going on. So we collaborated with our U.S. counterparts on our submissions and recommendations for what ended up being the USMCA, and we made sure they were in alignment so that whatever happened was going to be beneficial to both of us. I’m pleased to say that, for the most part, especially within intellectual property and labour mobility — two things that are very important to us — we got what we wanted to get from it.
Senator Mockler: When talking about gaming, you’re doing a great job, especially in exporting your product. Will Brexit have an impact on your industry?
Mr. Hilchie: It all depends on what Brexit looks like when it’s done. That’s a great question. At the end of the day, it will have some sort of impact. I hope it will be minor, because I know that labour mobility between mainland Europe and the U.K. is very important to our industry, especially in the United Kingdom because it is growing. With respect to the ins and outs of Brexit, I’d be unable to tell you until I see what the final document looks like.
Senator Mockler: So you’ll keep us informed?
Mr. Hilchie: Sure.
Senator Mockler: I used to wear a hat in another house, in a legislative assembly, and I was responsible for best practices. I would see Senator Cormier knocking on our door, so he’s always been a favourite — that issue for him to advance, and he did a super job.
When we talk about innovative arts, cultural relations and programming — and you’ve seen a lot of countries around the globe — can you tell us what best practices they have that we can import into Canada?
Mr. Hilchie: Is that directed to me? Perhaps Valerie or Kristian would be best suited for that.
Ms. Creighton: It’s an interesting question. We’ve done a number of research documents to look at trends around the world. If you have a moment and click on the CMF website, you will see trends that we’ve been tracking for about the last five years in terms of what the sector is looking like and what the trends are that are coming around the world. These are opinions and ideas of people who are very close to many aspects in the sector, right from gaming to technology to content development.
We also looked at over 60 funding models around the world a couple of years ago to ensure that, when we were designing the Canada Media Fund, we had the best intelligence that was available worldwide. I have to say that when the CMF was announced, it was way ahead of its time. Nobody around the world could really understand what digital media meant, what that content would look like or how you would make that content.
Gaming is quite specific, because it’s very clear, and as Mr. Hilchie has mentioned, it has a leading edge because of provincial support.
When the CMF was set up, it really was the first model in the world to look at convergent content and what the best practices might be. We worked toward the experimental stream. Instead of having that content assessed by people here at home or individuals who worked in the agencies at Telefilm or the CMF, we brought an international jury of experts from around the world specific to gaming platforms, experimental content, audiovisual content for VR or AR, and brought their expertise to bear.
It’s an ongoing process to look at what the best practices around the world might be, but I have to say the Government of Canada at that time, in 2009-10, was very visionary in its establishment of the CMF. We’re asked to go all over the world, being that we’re viewed as the best practice in this area of convergent media.
[Translation]
The Deputy Chair: The bell will ring very soon. I want to thank our guests. We had an excellent discussion, which will be very helpful for the preparation of our report.
I want to remind the committee members that Minister Carr will be joining us tomorrow morning at 10:30 a.m. to discuss his mandate and to start the study of Bill C-79. He’ll be here with his officials, who can elaborate on Bill C-79. It’s very important that you attend this meeting, which will run until about noon. See you tomorrow morning.
[English]
Thank you very much. This was very good. You showed significant knowledge of your subject matter and helped us significantly. Thank you.
(The committee adjourned.)