1 CAFDE RECOMMENDATIONS FOR THE COMMITTEE TO CONSIDER IN CONTEXT OF BILL C-11 These submissions are being presented by and on behalf of The Canadian Association of Film Distributors and Exporters / Association canadienne des distributeurs et exportateurs de films (“CAFDE”), which is a non-profit trade organization that represents the Canadian film distribution industry and its members on matters of national interest.

The Canadian film distribution industry provides Canadian a udiences with access to local Canadian films (e.g Maudie, ROOM, Brooklyn ) and independent films (e.g. , Minari, The Father ), as distinguished from films from US studios Disney/Fox, Warner Bros., Sony, Paramount and MG M (“Studios”). As set forth in Canada’s Communications Future: Time to Act, Broadcasting and Telecommunications Legislative Review Panel, January 2020, the support for Canadian drama has led to the growth of the independent production sector in Canada.

In 2017-2018, Canadian projects accounted for over $3 billion in Canadian film and TV production. That is an important driver in the Canadian economy. Equally important is the fact that these Canadian producers create stories rooted in Canada and with a unique Canadian perspective. Even before the negative impact of COVID -19, the majority of films viewed in Canada were US Studio films. In 2019, according to Comscore, Canadian box office illustrated the dominance of non -Canadian ownership; Studios represented 81.4% of the box office wher eas Canadian independent distributors represented 18.6% of the box office.

If the Canadian industry was challenged before COVID-19, the current landscape after theatres have been mostly closed for close to two years has created even more of a threat, particularly as Studios have been driving audiences to their US owned Subscription Video on Demand (“SVOD”) channels (e.g., Disney Plus, and Paramount Plus). The theatrical experience elevates Canadian Content for audiences across the country.

In order to supp ort the continued viability of the Canadian feature film industry, both from a cultural perspective and from a labour perspective, to rebuild/maintain jobs and retain talent in Canada, CAFDE agrees there is need for a revived regulatory framework that addresses the modernization of the film industry. To that end, we are very supportive of Bill C -11 and urge its swift passage, provided that certain protections are put in place to maintain the integrity of the Canadian cultural industry.

CAFDE recommends that Bill C-11 be strengthened and implemented as follows, to protect the crucial role of Canadian film distributors and producers. 2 1. Ensure proper definition of Canadian Content including Canadian Control and Ownership Since its inception, the mandate of promoting and protecting the Canadian film and television industry has been twofold: 1) the promotion and support of Canadian culture represented in film and television productions to build and preserve Canadian identity; and 2) support and grow the labour force of Canadians working in the Canadian film and television industry.

Both are integral, as is reflected in the CAVCO and Telefilm rules and guidelines for Canadian Content productions and Official Treaty Co - Productions. These rules and guidelines ensure that ke y cast, producer and production personnel positions are filled by Canadians, and that Canadian companies own and control their productions. If US owned SVOD providers are supporting productions in Canada by just applying minimum labour obligations and representing the production as “Canadian”, they are addressing only one aspect of what would constitute Canadian content.

In other words, regardless of use of Canadian talent and production personnel, these are still “service” productions, shot in Canada and employing Canadian personnel, but the creative and business control of the production as well as copyright ownership would reside with a US based company. If this approach is allowed to proceed, the Canadian production community will simply become “service producers” for US owned entities.

They will be producers for hire, having projects they developed made and they get a producer fee, but they no longer control the creative vision, no longer can get the benefit of monies from breakout films, and lose control of derivative rights (e.g., sequels, prequels, remakes, etc.) tied the intellectual property, as they would no longer own those rights.

We strongly suggest that to make the implementation of Bill C -11 most effective to support the entire Canadian fi lm industry and its objectives, the online services ( “OTTs”) should commit to investing in Canadian Content by licensing it from Canadian distributors for a negotiated license term (similar to broadcasters), and not take all rights in perpetuity.

This also allows the continued support of the Canadian feature film distribution industry, so these Canadian Content films are released in other media (e.g., theatrical, VOD, home video), otherwise we risk that only US Studio content will be on screen for Canadian audiences. 2.

Require All Licensees and OTTs invest 30% of their gross revenue to support Canadian Content To support the production of film and television content that promotes diverse and uniquely Canadian stories in both official languages as well as Indigenous languages, CAFDE recommends that all OTTs and all licensed broadcast services offered in Canada be mandated to contribute 30% of gross revenues generated from subscription and advertising in Canada, towards funding the pre-buy, acquisition and production of Canadian Content from independent Canadian producers.

Incremental to SVOD investment obligations, other services will fall under this mandate. The CRTC should employ further studies on thresholds with reference to the emergence of AVOD ser vices (such as TUBI) and FAST channel services (such as PLUTO TV). 3 2A. Require that a portion of that spend be dedicated to Feature Film From the above spend requirement, it is imperative that no less than 5% of gross revenues generated from subscription and advertising in Canada be required specifically for theatrical feature films.

Exhibition obligations don’t always distinguish between TV and feature film content and as a result licensing of feature film has declined. CAFDE recommends that the CRTC require that a portion of Canadian content programming spend be dedicated to theatrical feature films to ensure that they are made available to Canadians. 2B.

Definition of “Feature Film” We propose that “Feature Film” in CRTC program category 7(d) (“theatrical feature films aired on television”) be re-defined to reflect the eligibility criteria outlined in Telefilm’s Production Program Project Eligibility Requirements. “Feature Film” in category 7(

d) should be any feature length motion picture that: (

i) has qualified for Telefilm Canada financing (or any successor Canadian governmental film financing agency) as a Canadian product ion or co-production, (ii) meets the eligibility criteria under the Canadian Audio Visual Certification Office (“CAVCO”) including the points system, as well as Canadian producers controlling and owing the copyright for such productions, and (iii) has a qualified Canadian distributor attached, with a minimum theatrical release requirement. 2C.

License Requirements To ensure greater accessibility by Canadians to Canadian films on various media, it is imperative that Canadian Feature Films be licensed from Canadian distributors, solely for the rights exploited directly by the OTTs’ or broadcasters’ respective service and for a negotiated licensed term of no more than 18 months beginning no earlier than 6 months from the first exploitation in Canada and cannot be licensed by OTTs or broadcasters as a first window. 2D.

Calculation of Licensee Feature Film spend To incentivize Licensees to invest in Canadian Feature Film earlier in the process ( to assist producers finance projects), we would suggest the following incentive structure, similar to the structure previously allowed by the CRTC for Pay Television services i. Films acquired after start of principal photography (“SPP”) that are theatrically released by a Canadian distributor would qualify for 100% of license value toward the Licensee spend requirement (“Acquisitions”). ii.

Films acquired before SPP that are theatrically released by a Canadian distributor would qualify for 125% of license value toward the Licensee spend requirement (such titles being “Short Window Pre-Buys”). 4 iii. Films acquired before SPP that are theatrically released by a Canadian distributor and abiding by a then-traditional windowing strategy would qualify for 150% of license value toward the Licensee spend requirement (such titles being “Traditional Window Pre - Buys”). 3.

Require all Licensees and OTTs to prominently feature Canadian Content In addition to incentivizing the production of Canadian Content, it is imperative to have cultural policy that ensures that such content can be seen by Canadians. Showcasing and discoverability for Canadian content on OTT and pay television platforms is e specially challenging. Again, for feature films, the theatrical release requirement similar to Telefilm guidelines, as well as the license requirements outlined in 2C. above, are imperative. 3A.

Measurable Requirement for Discoverability CADFE recommends that the CRTC require that all OTT services, and licensed pay television and subscription on demand services offered in Canada be mandated to ensure that 30% of their prominently featured con tent is Canadian Content (e.g. , 30% of the content in prime time, in carousels, and via recommendation engines.) 3B.

Definition and reporting of Discoverability In respect of categorization and reporting, we would recommend that the existing CRTC defin itions for categorization and reporting be applied to these discoverability requirements on all platforms (whether delivered by cable/satellite/IPTV systems or the internet). 3C.

Calculation of Discoverability Requirements To incentivize Licensees to invest in Canadian Feature Film earlier in the process ( to assist producers financing projects), we would suggest the following incentive structure apply to the discoverability metrics, similar to those proposed for license fees above: i. Acquisitions would qualify for 100% of discoverability requirement ii. Short Window Pre-Buys would qualify for 125% of discoverability requirement iii.

Traditional Window Pre-Buys would qualify for 150% of discoverability requirement In conclusion, we appreciate the steps that the Government has taken to date to support the continued viability and growth of the Canadian Film and Television Industry, both from a cultural perspective and labour perspective, and applaud Bill C-11, provided the proper protections are put in place.