Source : Cartt.ca

GATINEAU – It ain't broke, so don't fix it, supporters of the Canadian Television Fund told CRTC commissioners on Monday, the first day of a week-long hearing into the fund's revenue model and governance.

CTF representatives defended their organization, saying it's efficient and both critically and commercially successful, contributing to the creation of more than 25,000 hours of programming since its inception in 1994, and supporting roughly half of the TV jobs in Canada, or some 22,000 positions.

The CTF pointed to some recent improvements. Responding to criticisms that it's not transparent, the CTF noted that it's "working very hard to beef up" its annual reports, which are now publicly available and are more detailed than before, said board chair Douglas Barrett. The CTF also developed a board charter in the past year, which it filed with the Commission. The fact that the CTF funding cycle is in tune with both production and broadcast schedules is "extraordinarily important," he said. "The fund is not perfect, but the fact that we have developed a system that feeds into the way the industry does business is quite an accomplishment," Barrett told commissioners.

The hearing was sparked in part by Shaw Communications and later Vidéotron, who stopped contributing to the fund a year ago in protest over their allegations of the CTF's lack of efficiency, transparency, and management. That led to the CRTC creating a task force to look into the fund, which recommended last summer, among other things, that the current broadcaster performance envelope (BPE) – accounting for more than 90% of its funding – be broken into two funding streams. Contributions from distributors would fund productions aired on private TV, while government contributions (from the Department of Canadian Heritage) would support programs on public broadcasters.

The CTF and its supporters, including the Canadian Film and Television Production Association, ACTRA, the Writers Guild of Canada, the Directors Guild of Canada, and CBC/Radio-Canada, oppose the two-stream proposal. CTF President Valerie Creighton said there used to be two funding streams but they were merged years ago to achieve administrative efficiencies. Splitting them back into two makes no sense, she told commissioners as it would effectively separate productions based on whether they were cultural or commercial.

Creighton argued that many current CTF-supported productions are both "culturally and commercially successful." She pointed to the "phenomenal" recent big three American network pickups of Canadian shows, including CBS's deal to air Flashpoint and NBC's take-up of The Listener, which were helped by the U.S. writers' strike, of course.

Many of these groups argued that since BDUs are required to contribute a portion of revenues to the CTF, that's money earmarked for public use, not private. Much like Canadians have no direct say in how their tax dollars are spent, the BDUs should not decide how their Cancon contributions are allocated, they said.

Speaking with the CFTPA presentation, producer Julia Keatley said splitting the fund into two streams would have "serious, irreparable consequences" by creating smaller envelopes for each project.

New Commissioner Michel Morin said more than once on Monday that he thought having two streams would be more transparent to Canadians to see exactly who is getting public money vs. private. He also wanted to see the two streams "competing" to "see which one is the best" at achieving success. The suggestion was met with derision by the artist groups appearing.

CTF and supporters also opposed the task force's recommendation that the minimum number of CAVCO points required for a production to be considered Canadian and therefore qualify for CTF funding be lowered from the current 10 down to 8. That could mean a program going without a Canadian director and screenwriter, they said.

Intervenors proposed several ways of increasing and reallocating CTF funding. The CFTPA asked the CRTC to eliminate the exceptions it grants to BDUs of the requirement to spend up to 5% of revenues on the CTF, by being allowed to put some of that toward independently administered funds and cable companies' own community channels. Funnelling that all to the CTF would add $80 million a year to the fund's coffers, said producer Kevin DeWalt.

Canadian Association of Broadcasters president and CEO Glenn O'Farrell proposed charging BDUs 5% of their video-on-demand revenues to create another source of CTF revenue. (He also supported the two-stream proposal, saying that public and private broadcasters have two different mandates so it's not fair they can access CTF funding in the same way.)

The CFTPA's Guy Mayson, president and CEO, also said the broadcasters' licence fees to producers should go up, since they're "unrealistically low" at the moment.

The CBC/Radio Canada, not content with getting 37% of the BPE each year, said it should be allowed to compete for some of the remainder of the envelope. Executive vice-president of English Services, Richard Stursberg, a former CTF chair, said the CBC is the most efficient broadcast user of the CTF. For example, while the public broadcaster gets 50% of the English-language drama funds, its shows generate two-thirds of viewers to the genre.

Morin asked the artist groups what they thought of the proposal from Quebecor, as parent of Vidéotron, to increase its Cancon contribution of $60 million over three years, currently given to the CTF, to $100 million, if it could opt out of the fund. "Such a level appears to be very generous," Morin said. The Directors Guild of Canada's general counsel Monique Lafontaine replied that the offer is "offensive" and "self-serving." ACTRA National President Richard Hardacre said the proposal just proved that Quebecor has the resources to boost its production contributions. Appearing later, Stursberg, a former senior Shaw executive, said that "Shaw and Vidéotron want to dismantle the fund for their own private interests."

Commissioner Rita Cugini said whatever the CRTC decides to do with the CTF revenue model, it will ensure it doesn't "interrupt the flow of funds" to producers. In 2006-07, the CTF contributed $251.8 million to Canadian programming.

At a noontime media conference, a coalition of creative unions that work on TV productions released a poll they jointly commissioned in mid-January by Harris/Decima of Canadian viewers that found that four out of every five people supported the federal government's contributions to the CTF, and the same number supported the policy requiring BDUs to spend a percentage of revenues on the fund. The questionnaire provided to reporters did not show a question asking respondents if they'd be willing to pay higher taxes or cable bills to cover the cost.

Back in June when the task force report was released, the Commission's initial reaction was that it agreed with the suggestions and would implement those within its jurisdiction. That sparked enough reaction from industry players that the Commission decided to throw the matter open to a public hearing.

But Shaw Communications CEO Jim Shaw is reportedly boycotting the hearing because CRTC Chair Konrad von Finckenstein is not attending. Instead, just three commissioners form the panel, chaired by Cugini. Shaw is quoted as saying that proves the commission is not taking the issue seriously enough. Shaw Communications is scheduled to appear at the hearing on Thursday, apparently with other executives attending in his stead.

When asked by reporters what she thought of Jim Shaw's boycott, Creighton replied, "I can't really comment on Mr. Shaw's motives."

The spectre of Jim Shaw made frequent appearances on Monday. For example, at a noontime media conference of the creative unions that work on TV productions, ACTRA's Hardacre said the "fat cat cable companies" elevated the CTF situation to a "crisis" level without working cooperatively to find a feasible solution. At the same conference, Maureen Parker, executive director of the Writers Guild of Canada, said, "We support the CTF. We don't think it's broken and we don't need it fixed, Jim Shaw, thanks."

Laurel Hyatt is Cartt.ca's radio editor, based in Ottawa, and is covering the CTF hearings this week.

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Related Documents:

July 27, 2007 - Submission to the CRTC on the CTF Task Force Report
FRIENDS comments on proposals from a CRTC Task Force on the governance and operation of the Canadian Television Fund.