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Published in the Financial Post on November 19, 2013

By Benjamin Dachis and Lawson Hunter

The federal government’s Speech from the Throne proposed a requirement that cable and satellite television companies unbundle their channel offerings. This will undermine the current Canadian content rules: Imposing pick-and-pay, in combination with the rise of new technology, means that Ottawa needs to fundamentally rethink those content rules.

Canadian television is governed under the Broadcasting Act, which puts the production, presentation and distribution of Canadian programming at the heart of federal television policy.

For example, the Canadian Radio-television and Telecommunications Commission (CRTC) requires that, in every package a cable or satellite provider offers, more than half of the included channels must be Canadian.

When the government drew up its Broadcasting Act in the 1960s, it forced Canadian broadcasters to showcase Canadian talent, ideas or values, in return for access to public airwaves, perhaps sensible when the airwaves seemed limited. The government could control and, effectively, tax the distribution channel to promote Canadian shows.

But the world has changed since then. In connecting viewers to content, cable and satellite companies have largely supplanted the airwaves. Tablets are replacing televisions. Netflix, like similar online services, is largely exempt from the Broadcasting Act, and threatens to displace the traditional broadcasters subject to Canadian content rules.

The world is moving away from a “push” world where governments could regulate what broadcasters could send through our airwaves, and therefore what people watched. We are now in a “pull” world, in which consumers can watch what they want, when they want and on the device they want.

The throne speech is an apparent response to consumer demands to receive (and pay for) only the TV channels that they want to watch.

But this demand may be at the expense of Canadian content.

The government made the point that in giving consumers more choice it will also protect Canadian jobs. If the government is going to protect the jobs of Canadian content producers, the current rules mean that television viewers will pay for that promise one way or the other.

Rather than bundling channels, will the government instead make it mandatory for cable and satellite companies to carry the Canadian channels that Canadians otherwise would not watch? That would leave consumers not much better off than now, because it would drive higher the cost of delivering basic packages.

Ottawa encourages traditional Canadian broadcasters to produce and distribute Canadian shows through rules that require they devote a minimum amount of viewing time, and money, to Canadian content. Yet,Canadians are moving toward competing online distributors that are exempt from these rules.

Technology will always move faster than a government can. Our traditional Canadian content “push” tools are looking broken.

The government needs to find a way to replace the elaborate Canadian content system with one that will be resilient in the future.

A move to pick-and-pay channel selection will mean that the government will need to fundamentally rethink how it ensures that Canadians can access quality Canadian content. As part of this, the CRTC is hosting a series of public meetings.

But a serious review must go beyond the remit of a regulator and consider fundamental legislative and government policy change. That may be best handled by a panel such as ones that the government commissioned for competition policy or government support for research and development.

What should such a review consider? Rather than putting the burden of promoting Canadian content on television viewers, the answer may be for the government to directly subsidize Canadian content with taxpayer money.

Reconciling the objectives of creating and promoting Canadian content while protecting current jobs in Canadian broadcasting, and giving consumers what they want, will require much more discussion about how much – and how – the government promotes Canadian content.

Don’t change that channel, because more changes are coming.

Benjamin Dachis is a Senior Policy Analyst at the C.D. Howe Institute. Lawson Hunter is Counsel at Stikeman Elliott LLP and a co-author of “Scrambled Signals: Canadian Content Policies in a World of Technological Abundance.”