Image Image Image Image Image Image Image Image Image

Feb 28, 2013

Canada Needs a Digital Economy Strategy

February 28, 2013

If Canada is to remain globally competitive, we need a digital economy strategy. While references to a strategy still appear in ministers’ speeches, and the Industry Canada website has information about the 2010 consultation process that was to lead to the adoption of a strategy, the government has lost its way in the digital forest.

Most of our major trading partners have a national strategy. After years of consultations, Digital Britain was published in 2009, others were released contemporaneously, and Australia’s National Digital Economy Strategy was published in 2011.

While we are late out of the gate, there is still time for Canada to be a world leader, if we place the production and distribution of creative content at the heart of our strategy.

Continue reading

There are three pillars to a digital economy strategy.

The first is ensuring everyone has affordable access to a computer and a broadband Internet connection.

The second is ensuring all citizens have the necessary skills and digital literacy. Much has been written about these two pillars and there is a broad consensus that Canada needs ambitious targets, similar to those in the United States and Europe. It can start with the CRTC target of universal access to high speed broadband by 2015, and be accompanied by commitments from schools, communities and businesses to deliver the necessary training.

The third pillar of a digital economy strategy is content. Strategies in this area differ considerably. Most have commitments for more government services, including education, to be delivered online, some consider opportunities for better health care and improving the lives of seniors, and some discuss how firms can have more flexibility in deploying workers. The European Commission wants to almost double the amount of existing European “cultural materials” available digitally by 2015.

But, outside of Britain’s discussion of the role of the BBC, little attention is paid to ensuring availability of a rich diversity of screen-based information and entertainment content. This is where Canada can differentiate its strategy from the rest and provide its creative content producers with a competitive advantage.

Canada is home to world class film and television producers, and interactive media and game developers, and the necessary clustering is occurring.

Toronto is the heart of the English-language screen-based Canadian creative content production industry. Vancouver is the centre of Canada’s active service industry and Montreal is the centre of French-language production.

Film and television production activity in 2010-11 was $5.5 billion and the industry created 129,000 jobs. Canada’s interactive digital media industry, including games and mobile phone applications, is likely worth more ($4 billion in 2008).

The impact of culture on the Canadian economy in 2007 was $84.6 billion, or 7.4 percent of GDP according to the Conference Board of Canada.

We have the talent, creativity, skills and technology.

Competing against foreign producers who enjoy competitive advantages, our screen-base content industry is doing well. But it can do better if it is recognized by the federal government as an essential pillar of Canada’s digital economy strategy, and if governments provide the necessary policies and incentives.

Key elements of a digital content strategy are:

  1. Industry, supported by government incentives, needs to invest in digitizing existing content and ensuring we have the leading edge equipment and technologies.
  2. Policies which promote equity investment in screen-based content companies, enhancement of tax credits to enable more and better quality projects, and more investment in training and professional development, including from federal and provincial programs currently not available to self-employed workers who predominate in the sector.
  3. The currency of the digital economy is intellectual property. The recent changes to the Copyright Act moved us forward in some areas. But, they will also bring lower royalty payments for some artists and content producers, making it more difficult for them to create new works. The Act needs more work, including implementation of the new WIPO Audiovisual Performances’ Treaty.The government should also provide a refund to companies which spend on early stage content development.

    This is also an appropriate time to eliminate policy anachronisms from the analogue era. Foremost among these are the various regional production incentive programs at the Canadian Media Fund and Telefilm Canada, CRTC regulations and policies, and similar policies of the CBC.

    In the past decade these “incentives” have effectively been given for English-language productions that take place anywhere in Canada, except Toronto. They warp decision-making in the industry and frankly have not achieved the objectives.

    While there are great stories in every corner of Canada, these regional production incentives are not awarded for bringing a northern saga, or a story of the trials of a fishing village, to our screens, they are provided merely for shooting productions outside the primary production centres.

    Canadian businesses, from television producers, to game developers, to telecommunications companies are embracing the digital future. Producers are increasingly making their works available online, and BCE has acquired major content providers with its acquisition of CTV and its bid for Astral.

    As he stepped down, Rogers’ president and CEO Nadir Mohamed said, “any winning strategy is anchored on the Internet.”

    It is time for the government to step up.

    # # # #


Garry Neil

Release Date

February 28, 2013

Related Reading