CRTC and Bell-Astral – Culture and Agriculture

The proposed acquisition of Astral Media Inc by BCE Inc revolved around the question of the future shape of the Canadian broadcasting system – television and radio in French and English –see http://www.crtc.gc.ca/eng/archive/2012/2012-574.htm

Refusal to approve the acquisition was based on the Commission’s view that the system would become too concentrated, to the detriment of Canadian viewers and listeners, and that the mandate of promoting Canadian content would be weakened. System here means the market for broadcast signals which has suppliers, such as Astral and BCE, and customers who are the Canadian viewers and listeners. The customers are small and diverse, while the suppliers are large, such as the CBC and BCE, and operate in concentrated markets. The suppliers carry their own content and that produced by others.

In light of the way broadcast signals are now distributed, it is misleading to suggest that the Canadian broadcast system (or market) is or can be separated from the wider market of internet distribution of programs films and music by cable and satellite. While the Commission notes this, it chose to retain the view that such a division exists and can be maintained by appropriate policies and rulings.

In some ways, the Commission is hamstrung by its political mandate, which all political parties support, to promote Canadian content. Politicians believe this is popular among voters and an objective that is achievable through appropriate policies. These can achieve a certain level of particular types of content, but cannot force Canadians to watch and listen to it. Thus, for example, viewership of CBC broadcast TV programs has shrunk,

“The CRTC annual monitoring report (available online) shows the CBC’s share of the English language market fell from 13.2% in 1994 to 7.5% in 2000 and to 4.9% in 2010, rising to 6.4% in 2011. The long run trend is clear.”

 

Where protectionism remains

Two sectors which remain protected by Canadian policies are culture and agriculture, specifically supply management. Technology has undermined cultural protectionism as consumers are increasingly able to watch and listen to what they want, and the panoply of cultural policies is no longer subject to challenge by foreign suppliers. Protectionist supply management policies for agriculture remain with no political party willing to anger the diminishing number of producers who benefit from them. Probably the only sure way to end supply management is to buy out the farmers and let consumers benefit from the lower prices which will then prevail. But the costs could be high. Mike Gifford in a report for the Canadian Council of Chief Executives states – http://www.ceocouncil.ca/wp-content/uploads/2012/04/Golden-Opportunities-and-Surmountable-Challenges-Prospects-for-Canadian-Agriculture-in-Asia-Michael-Gifford-FINAL2.pdf at p.25.

“Depending on the extent of the changes required (and the degree to which they reduce the value of the quotas owned by farmers, which in the dairy sector alone total some $25 billion), it may be necessary to provide some level of financial assistance to help farmers adapt to the new import regime. There is a precedent for such assistance: in the late 1980s a joint federal-provincial trade adjustment package enabled Canada’s grape and wine industry to adapt (with great success) to the Canada-U.S. Free Trade Agreement. A similar adjustment package, tailored to the specifics of the supply-managed dairy and poultry sectors, could also be developed. This would need to be done in collaboration with all industry stakeholders, including the provinces  – which, with the federal government, are jointly responsible for creating and regulating the supply management system through marketing boards that control production, tax, set prices, and manage interprovincial trade.”

Public pressure from disorganized consumers is necessary to force the federal and provincial governments to respond.

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