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<html> <head> <meta name="Generator" content="Corel WordPerfect 8"> <title>MR. EGGLETON - ADDRESS ON THE OCCASION OF A PANEL DISCUSSION'CAN CANADA MAINTAIN ITS CULTURALIDENTITY IN THE FACE OF GLOBALIZATION?'OSGOODE HALL LAW SCHOOL,YORK UNIVERSITY - NORTH YORK, ONTARIO</title> </head> <body text="#000000" link="#0000ff" vlink="#551a8b" alink="#ff0000" bgcolor="#c0c0c0"> 97/3 CHECK AGAINST DELIVERY NOTES FOR AN ADDRESS BY THE HONOURABLE ART EGGLETON, MINISTER FOR INTERNATIONAL TRADE, ON THE OCCASION OF A PANEL DISCUSSION "CAN CANADA MAINTAIN ITS CULTURAL IDENTITY IN THE FACE OF GLOBALIZATION?" OSGOODE HALL LAW SCHOOL, YORK UNIVERSITY NORTH YORK, Ontario January 27, 1997 This document is also available on the Department's Internet site: http://www.dfait-maeci.gc.ca As Minister for International Trade, I have the pleasure of presiding over a department where most of my so-called problems are caused by expansion and growth. Canadians have doubled their overall exports in the past decade, selling more value-added products and services abroad than ever before. Such initiatives as the Team Canada missions and trade agreements such as the North American Free Trade Agreement (NAFTA) and the World Trade Organization (WTO) help us to secure international markets for our exporters. But, it is the private sector, business and consumers, who are breaking down walls, reaching across borders, and knitting together a global economy from the bottom up. Since this new economy is driven by information, it is not surprising to find that this export trend is growing nowhere more rapidly than in the cultural sector. Hand-in-glove with the development of a global marketplace has been the creation of a global stage. Film, television, music and books have become international enterprises with international audiences. The growth of the Internet and multimedia publishing has hastened this trend and deepened its impact. These changes have been rapid, but Canadians have been just as quick to respond. For instance, Canadian film and video producers now earn almost a third of their home entertainment revenues from foreign sales. Canadians sell more television programming abroad than any other country, next to the United States. Canadian songwriters and composers earn more royalties for the use of their music abroad than they do in Canada. Canadian culture is experiencing an export boom of unprecedented proportions. Between 1990 and 1995, foreign demand for Canadian cultural goods and services abroad rose by 83 per cent, accounting for $3 billion in export sales. The cultural sector gets nearly 10 per cent of its revenues from exports, and foreign sales are associated with more than 50 000 jobs in the cultural field. Exports also offer great potential for new jobs in the area of culture, particularly among small and medium-sized businesses. Canada's artists, writers and performers have always known that the domestic market for their work is small, which is one reason they have fought to secure their fair share of it. But their ability to survive in the long term will depend on their ability to find an international audience for their works. Yet, many of the federal government's cultural policies and programs were designed three decades ago. Then, the national concern wasn't access to world markets, but Canadian access to the Canadian market. Since then, times have changed. The world of technology and trade are not recognizable from a decade ago, yet the instruments that we use to promote Canadian culture have not changed. As I see it, this raises two important issues. The first issue is raised by technology. Digital communications technology has given us the potential to deliver our culture abroad in ways we could not have previously dreamed. On the other hand, this same technology has had a profound impact on the management of Canadian content rules. At the same time, freer trade has opened the door to world markets for our cultural exports. But our own limits to foreign ownership in the cultural industries have had the effect of denying our creators access to capital. So, I would like to take the opportunity of this panel discussion to raise a few questions about culture and trade. I don't have the answers to these, but I think the time has come to discuss them. Are the instruments designed to promote Canadian culture at home in fact hindering its success abroad? Are restrictions on foreign investment and Canadian content quotas still necessary, or have they become obstacles to cultural expansion? I must interject that there is no question about the need for a strong Canadian culture. My government understands the need for this country to read its own stories, hear its own music and see its own performances.<ins></ins> The survival of the strong, distinctive, Canadian voice is closely linked to the survival of a strong and distinctive Canada. Culture can take the form of goods or the form of services, but at root it is neither of those things. It is the expression of everything that makes us, collectively, Canadians and no other. The question is not whether we ought to support Canadian culture, but how best to support it, employing realistic determination. For instance, our cultural policies were historically designed to support "hard" cultural goods, like magazines, books, sound recordings and film. But increasingly, cultural products are taking the form of "soft" electronic transmissions. Magazines, including such Canadian publications as Maclean's and Saturday Night, are appearing on-line. Newspapers, books, films and sound recordings can be distributed electronically or stored on compact disk. How are we to regard these on-line cultural products? Are they a cultural good or a service? It makes a difference in trade agreements. How can these products be regulated? How can the contents of cyberspace even be monitored, let alone controlled? Our thinking about Canadian culture is not being challenged by technological change alone. Our cultural policies are coming under closer examination, as Canada is increasingly obliged to follow international trade rules as the price of admission to the global marketplace. Are we doing the best we can to ensure Canadian culture a place in this world market, by removing culture from the fold? Our approach has been to exempt cultural industries from our trade agreements. But does it makes sense for us to remove culture from an area where we have so much at stake? Should we not negotiate trade rules that reflect Canada's cultural interests? I am not driven by some hidden agenda to advance commercialism over culture. My agenda is driven by the knowledge that we must respond to changes in world trade and communications, or our culture will be left behind. The global economy will have an impact on national cultures at least as great as its impact on national economies. I want Canada to be prepared for these changes, with policies that are appropriate to the times. Historically, Canada has used three policy instruments in support of culture: subsidies, ownership restrictions and content controls. From my perspective, subsidies are the least problematic. Of course, I might see things differently if I were the Minister of Finance, since subsidies are the most draining on the Treasury. But, from a trade perspective, I must ask whether our cultural interests are best served by the blunt instruments of limits on foreign investment and control of Canadian culture. Canadian content requirements have been the source of irritation at high public levels in the United States for some time, while foreign investment restrictions in the cultural industries run counter to the international trend toward the free flow of capital. Both are a source of concern to our trading partners. This is not a sufficient reason to change these. But it is worth asking whether these instruments continue to be useful, particularly if they are having an adverse side effect. For instance, investment limits were designed to achieve Canadian definition and control of Canadian cultural industries. But do they achieve that goal? For one thing, investment controls are based on the assumption that effective control of a company requires ownership of more than half its shares. Yet, it is quite possible for a minority block of shares to have control of a company, even if it is held by a foreign interest in a minority position. At the same time, international investment is not made easier in a climate where federal instruments in support of culture are applied in a patchwork fashion, inconsistent from one sector to another and unclear in their goals. Christopher Maule, a research professor of economics at Carleton University with a particular interest in international trade and the cultural industries, has summarized the hodgepodge of Canadian content rules as follows: Newspapers and books have no content controls, neither do magazines unless they are considered split runs. Theatres can show what they want, except in Quebec where French-language dubbing rules apply. Broadcasters and cablecasters are subject to Canadian content rules but video stores, bookstores and music stores can carry what they like. Thus...a New Zealand-made film about Pierre Trudeau would not be considered Canadian content, [although] a Canadian-made film about Nelson Mandella would." I have a hard time understanding clearly which cultural imperatives are being advanced by which instruments on such an uneven field. I know Mr. Ondaatje is a fine writer and the English Patient was an excellent film -- I just don't know whether the film would qualify as Canadian content. This type of international creative undertaking will become the norm, rather than the exception, in all kinds of cultural activity. This is already the case in film making, publishing and recording, but the transnational flow of creative works through the Internet will only hasten this trend. Should we have an open policy on culture and trade? To quote Christopher Maule again, this time from a working paper prepared for the Carleton Industrial Organization Research Unit, in collaboration with his colleague, Keith Acheson: By including culture in more formal arrangements with other countries, Canada will lessen the chances of generating an escalating trade war. The informal structure will be strengthened by more liberal foreign ownership rules. It will still bear the brunt of resolving conflicts, but will be more predictable because of the possibility of calling on formal dispute resolution mechanisms. To some, the support of an open policy is just a code for favouring commercialism at the expense of culture. We disagree. The current policies have become symbols of concern with culture, but the reality is that the policies distort the business of culture while doing little to encourage content that is identifiably Canadian, however that is defined. The trend to open markets and communications is global and irreversible. The world tomorrow -- in all likelihood the world just around the corner -- will be marked by the frictionless, instant, international transaction of information. Encoded in much of this information will be bits, or bytes, of Canadian culture. In such an environment, the fundamental question might not be whether Canadian culture should be exposed to trade rules. The question is how the rules of international trade can be harmonized with Canadian attitudes toward culture. The question is pertinent, given that our instruments have not changed in 30 years, while the worlds of culture and commerce appear to change every 30 minutes. The following figures, which apply to English Canada, amply demonstrate that our cultural market is open to foreign competition. I find it ironic that the same figures cause me to wonder whether we are doing the best job we can to promote Canadian culture: Three quarters of the television watched every night is of foreign origin, usually American. Four out of every five magazines sold on the newsstands are foreign magazines, usually American; Ninety-six per cent of the screen time at Canadian theatres is taken up by foreign films, mainly from the United States; Seventy per cent of the content on Canadian radio stations is non-Canadian, usually from the United States. Don't get me wrong. We are not looking to close our market to the United States, or any other country; but rather to make sure Canadians continue to enjoy Canadian culture, while having access to the world. But we can expect the trend to the free flow of capital to continue. We can also expect our cultural policies to be met with a continuing lack of sympathy from our U.S. neighbours. The simple fact is that investment and content controls are being exposed to pressures from liberalized trade. Even if they were not, their effectiveness would be challenged by the communications revolution, which respects neither borders nor regulations. Our need to remain open to the world while continuing to champion Canadian culture has long proved a tricky balancing act. I am asking the question: Are our obligations to culture and trade necessarily opposed? Is it possible for Canada, with the support of strategic allies, to protect its cultural expression within the context of international trade agreements? I hope that it is for our sake, because Canadian culture has itself become international in its outreach, looking to world markets for its continued growth. When I see the growing world demand for Canadian cultural works, compared with our own reading and viewing habits, I can only wonder if Canadian culture is a secret kept only from ourselves. I suggest, as my parting thought, that the coming-of-age of Canadian culture may not depend on our ability to protect it at home, but to project it on the world's stage. Thank you. </body> </html>

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