It’s a Senate committee that rarely receives a lot of attention. But on Apr 2 it was a packed house.
Heritage Minister Josée Verner was defending C-10, a bill that would give the minister the power to deny tax credits to controversial films.
Because the clause appears in the middle of hundreds of pages of income tax amendments, it was the Senate’s banking committee that called Verner to testify. It’s a group that usually flies under the radar. This time however, the gallery was packed and two extra rooms were opened with live video feed of the proceedings.
Verner arrived 10 minutes late and left before each senator could ask a question. Flanked by four senior bureaucrats, Verner’s voice shook slightly as she read from a prepared statement.
The 13-word clause would give the minister the discretionary power to decide if “public financial support of the production would not be contrary to public policy” and the ability to deny production companies Canadian Content tax credits on that basis.
Verner tried to explain the bill as closing “a loophole” that theoretically would allow illegal material like hate speech and kiddie porn to quality for the credit.
“The policy rationale for the ‘contrary to public policy’ provision is quite simple,” she said. “It would ensure that the government has the ability, in exceptional circumstances, to exclude from public support certain material, material that is potentially illegal under the Criminal Code, such as indecent material, hate propaganda and child pornography.”
During questioning, Liberal Senator Pierrette Ringuette pressed Verner about the vagueness of the provision. Canadian filmmakers have warned that if the tax credits are uncertain, financing for films could evaporate.
“Why not list the prohibited material in the bill — child pornography, hate propaganda?” she asked in French.
Artists oppose the bill because they argue it is tantamount to government censorship. Director David Cronenberg told Xtra that he is worried about the bill because the minister of heritage’s “version of what is acceptable or not is going to be subject to nothing because the guidelines are so vague.”
Although the senator’s comments were largely tempered, Verner repeatedly pointed out that the proposed ministerial power was first introduced under the Chrétien government in 2002. A similar provision has existed as policy — rather than law — since the Canadian Content tax law was first introduced.
“Despite what you may have read or heard,” Verner said, “the ‘contrary to public policy’ test is not a new concept. It has been part of the tax credit landscape since its inception in 1995 through income tax regulations.”
As a regulation, it’s been used twice in the last seven years, once in 2002 and once in 2007. Both were related to porn, which is already excluded from receiving the tax benefit.
Meanwhile, the banking committee has quietly scheduled at least two weeks of witness testimony on the film clause. On the list is actor and director Sarah Polley, who will appear before the committee Apr 10.
That means that a clause-by-clause analysis of the bill — which is hundreds of pages long — may not happen until the end of April, at the earliest. The opposition-dominated committee could postpone deliberating on the bill for months if it chooses.
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