If you said the second, you are probably a supporter of the current law governing the film distribution business in Canada. A product of the former Conservative government's desperate but doomed efforts to get the cultural industries off its back, the law allows foreign-owned firms to distribute only "proprietary" films -- that is, films for which they put up more than half the production money. The rights to all other foreign films are reserved to certifiably Canadian distributors -- oh, and to the major Hollywood studios, who were grandfathered under the 1987 law.

Who does that leave out? Well, PolyGram, for one, the Dutch music and film group that has made commercial successes around the world out of such small or art-house films as Four Weddings and a Funeral, Trainspotting, and Priscilla, Queen of the Desert -- everywhere, that is, except in Canada, where it is forced to hand off to a domestic distributor. PolyGram has applied to Industry Canada for an exemption from the non-proprietary rule, with a promise to invest 20 per cent of any revenues so gained in Canadian film productions.

The proposal has divided the federal cabinet, and set off the usual tantrums in the media. So while you are listening to the canned rhetoric about "telling ourselves our own stories" and Canadian films being limited to only 5 per cent of the screen time in Canadian theatres, perhaps it is worth bearing in mind a couple of important points. First, we are talking here not about protecting or supporting Canadian films. We are talking about the right to distribute foreign films -- the same ones that are hogging precious screen time from "our own stories." The pattern will be familiar to any follower of the culture game in Canada.

Wherever and whenever the alarm is raised over some alleged threat to Canadian culture, it almost always involves the production and marketing not of Canadian culture, but of the much more lucrative foreign product. The certifiably Canadian cultural industries are mostly in the business of importing the very alien art they pretend to decry. Their complaint with their foreign-owned rivals is strictly over who shall be the conduit.

When, for example, the consortium of domestic firms that make up the ExpressVu satellite broadcast service led the charge against Power DirecTv, it was over the rights to show American programs in the Canadian market -- just as, long ago, Canadian broadcasters were permitted to "simulcast" American programs, bumping the foreign signal from the airwaves and substituting their own. When the book retailing industry successfully lobbied to keep the Borders bookstore chain out of Canada, the issue was again the rights to imported books.

The argument in every case is the same. Without the enormous profits they earn collecting tolls on the imported cultural pipeline, the domestic industry would not be able to invest in the production of homegrown art. Whether or not it makes sense to promote Canadian culture by this roundabout route, the argument would be a lot more persuasive if there were more evidence that all this recycling of cultural dollars was in fact taking place. In the present example, there has undeniably been an explosion of profitability in the Canadian distribution sector, to the benefit of investors in such industry giants as Alliance and Atlantis. Whether there has been a similar explosion of Canadian films, either in quality or popularity, is more debatable What is beyond dispute is that PolyGram is the only participant that would actually be legally bound to reinvest those profits, or has even offered to. No such undertaking is required of the Hollywood studios, of course. But neither is it expected of the Canadian distributors. As a federal study leaked to the media observes, "there is no incentive or means of ensuring that revenues earned by Canadian distributors from independent foreign films will in fact be used for the support of Canadian films." Or as Industry Minister John Manley has put it, "the point of the policy was not to enhance the profitability of Canadian distributors, the point of the policy was to increase the supply of Canadian product." If it is the policy of the government of Canada that a share of the profits from the distribution of independent foreign films should be diverted into the production of Canadian films, surely it should be applied with an even hand, to foreign and domestic distributors alike. Bet you don't see the Canadian industry lobbying for that any time soon.