Source : Globe & Mail

Vidéotron, Shaw suspend payments, demand government review operations

TORONTO, OTTAWA -- Cable giant Vidéotron Ltée has pulled its support of the Canadian Television Fund, following a similar move by Shaw Communications Inc., as the two companies demand a federal review into how millions of their dollars are being spent by the production community.

Vidéotron, a subsidiary of Montreal-based Quebecor Inc., informed the fund yesterday that it was suspending payments immediately and is also asking Heritage Minister Bev Oda to launch a "thorough review" of the management and membership structure of the CTF.

Quebecor chief executive officer Pierre Karl Péladeau told the CTF in a letter that he has "deep dissatisfaction with the fund's governance, performance and direction."

The two companies' primary complaint is that they don't get to see how the money is spent by the production community, nor do they have input on where the investments are made.

Created in 1996, the CTF requires the private sector to support Canadian productions and has helped pay the bills for television programs such as Degrassi: The Next Generation, The Collector and Da Vinci's Inquest.

"Fund managers pay little heed to the main private sector contributors to the fund and give little consideration to their point of view in decision making," Mr. Péladeau said, adding the CTF does not take into account the exposure cable companies give Canadian productions through video on demand.

He said Quebecor also "cannot accept" that its contributions are used to finance the CBC, which receives more than $1-billion in parliamentary allocations each year.

Thirty-seven per cent of the CTF's $250-million budget is reserved for the CBC.

The cable and satellite industry is legally obliged to contribute about $150-million -- or 60 per cent -- of the CTF's budget.

About $100-million of the fund's budget comes from the federal government.

Each cable company is supposed to contribute 5 per cent of gross revenue each year.

Shaw owns both Shaw Cable and satellite TV provider Star Choice Communications Inc.

The company contributes roughly $60-million a year, while Quebecor contributed $14.3-million to the CTF in 2005, a figure that likely rose slightly in 2006.

The dispute could be headed to court. Denis Carmel, spokesman for the Canadian Radio-television and Telecommunications Commission, said the cable companies have until Aug. 31 to contribute to the CTF.

If they don't, he said, a long process that could eventually lead to federal court would kick in. Mr. Carmel said he's confident a resolution can be found, but added: "There has to be a dialogue."

Mr. Péladeau's letter comes after Calgary-based Shaw, the fund's biggest contributor, signalled in December it would suspend payments pending a review of CTF operations.

Shaw has been fighting with CTF officials for months. At federal broadcast hearings in November, the company's CEO, Jim Shaw, voiced his displeasure with paying millions of dollars a month to support TV programs that few Canadians watch.

A spokeswoman for the CTF said the fund is "continuing the dialogue" with the cable companies in an effort to resolve the dispute with the CRTC.

The CTF has supported more than 4,000 projects, producing more than 20,894 hours of new Canadian television programming in four genres: drama, documentary, children's and youth, programs in both official languages and in aboriginal languages.

© Globe and Mail

Related Documents:

January 11, 2007 - Ottawa Citizen: Shaw pulls millions out of Canadian TV fund by Deirdre McMurdy
The CEO of Shaw Communications says he's prepared to breach CRTC regulations and stop contributing five per cent of his company's revenues to the Canadian Television Fund.

December 22, 2006 - Canadian Television Fund: Response from Douglas Barrett, Chair of the Canadian Television Fund to Jim Shaw, CEO of Shaw Communications
Douglas Barrett says Shaw's decision to withhold contributions to the Canadian Television Fund will have an immediate and dramatic impact on the Fund's ability to carry on operations.

December 20, 2006 - Shaw Communications: Letter from Jim Shaw, CEO of Shaw Communications to Douglas Barrett, Chair of the Canadian Television Fund
Jim Shaw says his company is dissatisfied with the performance of the Canadian Television Fund and will be withholding its contributions of $56 million per year.