Canadian official defends tax curb


TORONTO -- The Canadian government on Tuesday defended new tax measures designed to curtail excessive sex, violence and hateful content in film and TV shows, saying it does not intend to choke off artistic expression.

"Our government is deeply committed to freedom of expression and will continue to support the creation of edgy, entertaining Canadian content," Heritage Minister Josee Verner said as Bill C-10 neared its third and final reading in the Canadian Senate.

Despite mounting protests from the domestic film and TV sectors, Verner said it was a "legal absurdity" that current rules allow a producer of offensive film and TV product to be prosecuted under the criminal code yet still receive a tax credit under the Income Tax Act along with other taxpayer subsidies.

The minister said it was "a matter of good housekeeping" to ensure that films and TV shows that tap public funding do not offend public taste and morality.

The obscenity question may come to the fore in the United States soon. The Supreme Court this week may reopen for the first time in more than 30 years the debate over what qualifies as an "indecent" broadcast.

The current Canadian tax system bars federal tax credits to producers of pornography. The government's proposed amendments to the Income Tax Act, which is expected to become law as early as today, would extend that exclusion to content judged offensive by a panel of bureaucrats.

The bill's passage looks likely despite a widespread industry outcry that it amounts to closet censorship.

"I think it (Bill C-10) flies in the face of what we should be looking towards as a civilized nation in terms of supporting our artists, supporting unique visions. Making films that challenge, that provoke, that create discussion. Sex and violence are part of the world we live in, so they will be represented by artists," Canadian actress-director Sarah Polley said Monday night as she accepted an award for best director at the Genies, Canada's film awards.

"Censorship has had a little work done and is trying to make a comeback. I don't know about you, but that doesn't sound very Canadian to me," the Genies host Sandra Oh added during her opening monologue.

The Canadian affiliate of IATSE said he does not buy the government's insistence that it does not aim to introduce censorship.

"Make no mistake -- this is blatant censorship disguised as tax policy," John Lewis, vp and director of Canadian affairs for IATSE, said Tuesday. "Even from a purely economic perspective, it just doesn't add up."

Canadian producers are especially worried that they might lose the ability to secure bank loans and other key financing if the federal government gains the power to pull tax credits and other taxpayer support after a film or TV show has already been made and likely gone into distribution.

"Banks won't loan money if it's a crap shoot on federal tax credit approval criteria, and without loans, movies and TV shows won't get made," said Sandra Cunningham, chairwoman of the Canadian Film and Television Production Assn. "It's not sustainable and will devastate the Canadian industry."

Despite the opposition, Bill C-10 already has moved through the House of Commons and can't be stopped in the unelected Canadian Senate, where it will receive its third and final reading before Royal Assent.

Sen. Romeo Dallaire said that Canada's upper chamber can't scrap the proposed tax credit change in Bill C-10, only amend it and send it back to the House of Commons for review.

The film and TV censorship measure reflects "right wing conservatism with an evangelical basis," Dallaire added, citing a statement last week from Canada Family Action Coalition president Charles McVety, who claimed that his lobbying efforts led to the new funding rules.

After the passage of Bill C-10, Verner has promised Canadian producers and other industry players first-time input into the shape of content guidelines to curb excessive sex, violence and hateful content.