Tories pull advertising, news services from CETA cultural exemption

The Conservative government removed advertising and news agencies from its “cultural industries” exemption in the free trade deal being negotiated with the European Union, according to an internal German analysis of the agreement. Negotiators are meeting in Ottawa this week to discuss the Comprehensive Economic and Trade Agreement (CETA), which covers all sectors, including intellectual property and telecommunications, according to previous leaks from the negotiations. The Canadian government confirmed in 2011 that it was seeking a “cultural industries” exception, so that all chapters of the agreement which affect Canada's cultural industries would be exempt. An internal memo from the German government to the EU member states' Trade Policy Committee, dated June 18, 2013 and obtained by The Wire Report, says Canada will remove some sectors from the cultural exception. “Canada will take an exception for 'cultural industries' from market access obligations in accordance with their standard definition. However, will be a specific exclusion of news agencies and advertising from the scope of this exception,” the document says. It's not clear whether removing advertising and news agencies from the exception would mean a possible liberalization of Canada's tax credit for broadcast and print advertising. The Income Tax Act provides a tax deduction for advertising spending with Canadian-owned broadcasters and newspapers, though not with foreign owned-companies. In Canada, the Broadcasting Act does not allow for foreign-owned broadcast companies. In February 2011, Peter Van Loan, then the international trade minister, told the House of Commons heritage committee that the EU was challenging Canada's position on the publishing industry, the only area of disagreement in the deal related to the cultural industries. “Their concern is that they have access to the same kind of support, or that we not provide that support for the publishing industries,” Van Loan said. “The position we are taking in the negotiations is that we wish to be able to continue those programs and have them covered by an exemption.” Prime Minister Stephen Harper discussed the EU free trade agreement in June on a visit to Europe, which included a G8 summit in Northern Ireland, though he returned without a finalizing a deal. The German document shows that Canada has also changed its position on ownership restrictions for the telecom sector. A leaked draft in 2012 showed the Conservative government proposed an exemption allowing Canada's telecom companies to remain Canadian-owned, though the German memo says Canada's position is now in line with its Telecommunications Act, which the Conservatives amended last year. That position is that telecom carriers operating in Canada may be foreign owned if they have less than 10 per cent market share nationally, the memo says, adding that Canada removed “any restrictions on the future growth of such a company” beyond 10 per cent. The German analysis says Canada also changed its telecom “reservation,” or exception, from an “Annex II” to an “Annex I,” meaning that the sector will be under a “ratchet” allowing further liberalization though not any future moves toward protection. “Canadian telecoms legislation will thus be subject to a ratchet for the first time in any trade agreement,” the German memo says, adding that any Canadian telecom concessions to Europe would be extended to the United States automatically due to most-favoured nation trading rules. The German memo says that Canada also reached an agreement for an expanded exportation of cars to Europe and the elimination of the foreign-ownership restrictions in Canadian uranium mining. Rudy Husny, a spokesman for International Trade Minister Ed Fast, said in an emailed statement that the government is committed to “ensuring strong protection for Canadian cultural interests in any trade agreement with the European Union.” Some Canadian media companies, including Corus Entertainment Inc., have called on the government to expand the advertising tax credit, now only available for Canadian broadcast and newsprint companies, to digital media, giving Canadian digital media companies a competitive edge against Google Inc. and Facebook Inc. The Lobby Monitor reported in June 2012 that Postmedia Network Canada Corp. had registered to lobby the government to change the Tax Act to effectively allow for foreign ownership of Canadian newspapers. At the time, James Maunder, a spokesman for the heritage minister, told The Lobby Monitor that it “no plan to move in this direction at this time.” Husny said discussions toward an agreement with the EU continue and that the government will only sign an agreement that is in the best interests of Canadians. “s in all negotiations, nothing is agreed to until everything is,” he said. —With reporting by Simon Doyle at sdoyle@thewirereport.ca and editing by Anja Karadeglija at akarad@thewirereport.ca

Tories pull advertising, news services from CETA cultural exemption

Broadcast | July 8, 2013

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