An obscure section of C-10, An Act to Amend the Income Tax Act, could strip obscene or extremely violent films of tax credits. The changes were first proposed (word for word) in a 2003 position paper drafted by then Liberal heritage minister Sheila Copps and were re-introduced by the Conservative government last year. Parliament passed the amendments without opposition from the Liberal party or the Bloc Quebecois, but all of a sudden, before Third Reading in the Senate, the issue became a cause celebre when actresses Sandra Oh, Sarah Polley and directors David Cronenberg and Robert Lantos highlighted what they called Ottawa’s “censorship” of the “arts.”

The amendment to Bill C-10 would allow the heritage minister to deny tax credits for Canadian productions through the Canadian Film or Video Production Tax Credit if they are deemed to contain gratuitous violence, significant sexual content that lacks an educational purpose or denigration of an identifiable group. Heritage Department officials suggest degrading pornography and hate propaganda as examples of art that might not qualify for tax credits and note that they would make such determinations in consultation with the Justice Department. Specifically, the amendment would restrict tax credits to productions where “public financial support … would not be contrary to public policy.”

On March 3, David Cronenberg said at the Genies, the Canadian film awards, that the tax credit changes sound “like something they do in Beijing.” Margaret Oh, who was hosting the awards show, said, “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.” Liberal Senator Romeo Dallaire indicated the amendment would not pass, saying backstage that such limits on film production are “not necessarily in the Canadian perspective.”

More recently, Stephen Waddell, national executive director of the Alliance of Canadian Cinema, Television and Radio Artists, the actors union, claimed the government wants to set up a form of “morality police.”

Waddell said, “Withholding public funding for film and television productions it deems offensive is a dangerous direction for this government that smacks of censorship.” Industry officials say many productions depend on the tax credit to obtain funding from third parties in order to produce films.

Susan Swan, chair of the Writers’ Union of Canada, said, “We don’t like being told what kind of art we can make by the federal government.” But Annette Gibbons, associate director-general at Heritage Canada, said the amendments only slightly change existing guidelines. “It’s our responsibility to ensure that public funds are not invested in certain types of material, such as hate propaganda excessively violent material, or pornography,” she said.

But Heritage Minister Josee Verner already seems ready to backtrack. She said only a few films would be impacted, promised not to implement the new rules for one year and vowed to work with the entertainment industry to draw up a precise definition of what projects would be deemed too offensive to receive government tax credits. On April 12, the Globe and Mail reported that Verner was overheard saying she hated the provisions of C-10.

Conservative Senator Terry Stratton, the government whip in the Senate, said he was open to making an amendment and sending it back to the House of Commons. Both the Canada Family Action Coalition and the Institute for Canadian Values testified before the Senate Banking, Trade and Commerce Committee in favour of the changes, saying that taxpayers should not have to help foot the bill for material that is offensive.

After entertainment industry officials and Sarah Polley testified before the committee complaining that edgy films would not be made were it not for the tax credits – and, therefore, the government is attempting to censor “art” – Brian Rushfeldt, executive director of CFAC, said if there was really an audience for these films, banks would lend money to production companies even without the benefit of the tax credit as collateral. He flatly rejected the notion this was censorship; instead, it is just prudent use of taxpayers’ money.

Maclean’s columnist Andrew Coyne also rejected the notion that C-10 was censorship. He wrote: “Just so we’re clear: absolutely no one would be forbidden by Bill C-10 from making any kind of movie they liked — violent, sexual, uneducational, whatever. They just might not be able to get public funding to do it. That’s not censorship. It’s judgement. The public has every right, through its representatives, to decide how its money is spent. If artists don’t want to abide by the rules, no one’s forcing them to take the cash.”

In another Maclean’s column, Mark Steyn noted free money is not the same thing as free speech.

As CFAC testified before the Senate committee, “Producers can make films on their own dime, if they wish to, but they should not expect families to deduct taxes from their budget and then to use those taxes for anti-family activities,” such as subsidizing extremely violent or pornographic art. Gwen Landolt, national vice-president of REAL Women, which supports the amendments, said C-10 “has nothing to do with censorship and everything to do with using taxpayers’ money.”

Charles McVety, the head of CFAC, took credit for the amendments and the Tories’ political opponents jumped on the boast. NDP MP Libby Davies (Vancouver East) said C-10 was an attempt to placate the Conservatives “friends in the religious right.” Sandra Cunningham, chairwoman of the Canadian Film and Television Production Association, said, “We don’t want policy to be based on what special interest groups want.”

But Rushfeldt said he is confidant the Canadian people are on the side of the limited restrictions, adding it will affect only a small percentage of the nearly $150 million handed out to the movie industry in Canada. “Let us stop funding that industry at all if we cannot have a proper line drawn for decency.”