| Abstract: | In the nominal interest of promoting a national identity and a stronger federation, a range of public policies have been implemented by the Canadian government to encourage and facilitate cross-subsidization in the Canadian telecommunications and broadcasting industries. The main policy instruments involve government regulations and foreign ownership restrictions that contribute to higher revenues for domestic producers of communication services than would otherwise be realized. The quid pro quo is that domestic telecommunications carriers and broadcasters must undertake costly and unprofitable actions that involve subsidizing activities such as rural telephone services and “Canadian entertainment content.” Unfortunately, there is little evidence that the relevant policies promote the goal of strengthening Canada’s national identity. Furthermore, they are inefficient, as well as nontransparent. The fact that several other countries, particularly France, have lauded Canadian content regulations as a “model” for smaller, open economies, they are more appropriately viewed as the socially undesirable outcome of a muddled public choice dynamic. |
