Bureau, Asper disagree on need for foreign investment in Canadian broadcast system

Two senior Canadian broadcasting executives are divided on whether or not foreign ownership rules for broadcasting companies should be loosened. At the New Developments in Communications Law and Policy conference in Ottawa on April 27, Astral Media chair André Bureau argued for the status quo, saying that foreign companies would invest with the sole purpose of generating profits at the expense of Canadian content. On the other hand, CanWest Global Communications Corp. president and CEO Leonard Asper said broadcasters need access to foreign dollars to implement new and emerging technologies and to invest in new content. Asper suggested that it was no longer practical with a proliferation of specialty channels in the digital era for the government to protect Canadian broadcasters from outside influences. He recommended a review of current foreign ownership limits and their eventual elimination. "Deep down, we think there should be no foreign ownership rules," said Asper, who indicated the barriers could be brought down in steps. A call to revisit the rules has been made previously, most notably by Industry Canada’s National Broadband Task Force (CCR, May 24/01, June 21/01). Asper added that foreign ownership rules should be lowered in a reciprocal way with those in the United States. "We wouldn’t make any changes without getting the same treatment from the U.S.," he said. Bureau noted, however, that the U.S. appetite for such a reciprocal arrangement is "questionable". "I for one have not heard any talk that the U.S. is going to relax these rules. We mustn’t forget that the Americans have never allowed a foreigner to acquire control of an off-air television network, something that is often overlooked in the debate," he said. Even with greater foreign investment in Canadian broadcasting, Asper contended that the CRTC would be able to impose conditions on the production and broadcast of Canadian content. But Bureau noted that foreign investors would be able to exert enormous influence, even if there were CRTC rules. "Under Leonard’s proposal, we would effectively be putting culture back onto the table, something which we have fought very hard to exclude," Bureau said in rebuttal to Asper’s remarks. "(Multinational media conglomerates) lack a fundamental understanding of our Canadian character. They would be incapable of making an indigenous cultural contribution to the Canadian broadcasting system, even if they pretended to be willing and eager to do it." The cable industry favours a liberalization of foreign ownership for telecommunications, cable, and satellite carriers. While some have suggested that foreign ownership limits could be loosened for infrastructure companies but not content companies, Bureau said doing so is not "as simple as it sounds". "…It involves far more than just the technicalities of corporate reorganizations or structural separation," he noted. "There is a bigger picture to consider. Once the ownership distribution genie is let out of the bottle, the prospect of non-Canadian influence over programming services is raised...The carriage-content distinction is not so hermetically sealed." So wary is Bureau of the power that foreign investors could wield on the broadcast system if foreign investment rules are relaxed that he called on the government to prohibit non-Canadian investors from owning programming channels should they be allowed to control a distribution platform. Despite all the talk, McCarthy Tétrault LLP lawyers Grant Buchanan, Monique Lafontaine and Lorne Salzman predict little change. "Although foreign ownership rules are currently being studied, absent some extraordinary effort by the federal government, changes to ownership requirements seem unlikely to be made in the near future," they stated in a paper presented at the conference.

Bureau, Asper disagree on need for foreign investment in Canadian broadcast system

Broadcast | May 9, 2002

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