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CCA Bulletin 25/07

FROM THE DESK OF ALAIN PINEAU

National Director
Canadian Conference of the Arts

Ottawa, July 19, 2007

CRTC Task Force Report on the Canadian Television Fund crisis:  an unconditional capitulation to broadcast distributors

The CRTC Task Force on the Canadian Television Fund (CTF) has published its Report on June 29, just before the long Canada Day weekend and the beginning of summer holidays. All interested parties have until July 27 to make their views known on the 24 recommendations of the Task Force, one of which is that these recommendations  start being implemented by the CRTC by September 15, in order “to create a market-oriented private sector funding stream” within the CTF.

Mandated at the height of the “CTF crisis” to try to define behind close doors if there could be some consensus on how to resolve the situation created by the unilateral withholding of monthly payments to the Fund by two large cable-operators, Shaw and Vidéotron, the Task Force has focussed its thinking on how to ensure ”the most effective use of the required contributions from Broadcast Distribution Undertakings”.

The Task force tersely notes on page 13 that pretty much the only consensus found was on the necessity for the CRTC to amend its Broadcast Distribution Undertakings (BDU) Regulations so that cable operators and other distributors be required to make their payments on a monthly basis rather than on an annual one, the regulatory loophole used by Shaw and Vidéotron to hold the Canadian television industry hostage last winter.

Total lack of consensus does not prevent the Task Force from putting forward 23 other recommendations which would appear to satisfy most of Shaw’s and Vidéotron’s demands concerning the role and operations of the CTF, and considerably effect the role of the Fund as a cultural policy instrument of the Department of Canadian Heritage to favour the production and distribution of distinctly Canadian audiovisual programming.

The main recommendations of the CRTC Task Force are: 

  • Asking the CTF to create a separate “market-oriented private sector funding stream” with the money remitted by the BDUs to allow the production of commercially-driven television shows with “simple and flexible program guidelines” and diminished requirements for Canadian cultural content or input;

  • Inviting the CRTC to amend its BDU Regulations by September 15 to, amongst other things, make audience success “the primary criteria (sic) for continued funding” for the new “market-oriented private sector funding stream” with a reduced criterion as to what is acceptable Canadian content;

  • Delaying to January 2008 any amendment  to BDU Regulations to force them to make their “contribution” to the CTF on a monthly basis;

  • Increasing licence fees for broadcasters to help increase financing of programs;

  • Skimming off $25M from the current CTF already insufficient budget “to support Canadian programs designed for new media platforms”;

  • Asking the CRTC to provide “more flexibility for CRTC-independent funds (Note: those already controlled by the BDUs) to invest in Canadian programs for new media platforms”;

  • Excluding independent producers’ representatives from the CTF Board while consolidating the position of BDUs through the nominating process and the addition of a seat for the second satellite distributor so that the long-standing impasse between Shaw and Bell be resolved.

The Task Force goes on to give a very tight timetable for the implementation of its suggestions, which include changing the way the CTF operates as an instrument of Canadian cultural policy.

In analysing the Task Force Report, the Canadian Conference of the Arts (CCA) focused on three separate elements of the public policy development process;

  • Transparency of process,

  • Consistency with the existing public policy framework and objectives,

  • Accountability for public funds and measurable outcomes.

The CCA has tested the Task Force Report against these three elements.

The CCA has already objected to the “behind close doors” process in its brief to the Standing Committee on Heritage.

The Task Force’s invokes a totally unproven urgency to press for an incredibly short timetable to implement fundamental changes to a system designed to support the production of truly Canadian programming in non-commercially viable genres. This is particularly worrisome given the role of public stewardship by the CRTC to advance the public policy objectives of the Broadcasting Act. 

Some of the most surprising conclusions of the Task Force:

  • After recognizing the vital importance of the CTF for the production of Canadian cultural audiovisual content, the Task Forces appears to give in to Shaw’s vision of good programming decisions by suggesting giving BDUs control over the new “market-oriented private sector funding stream”. Were such logic applied to personal income tax, each taxpayer could direct the use of their taxes to maximum their own personal benefit.

  • By suggesting to break CTF funding into two streams and make commercial success paramount over any cultural objectives of the CTF, the Task Force is acting as if the Minister of Industry’s directive to the CRTC concerning telecommunications decisions (i.e. to give market-considerations priority over any other objectives specified by Parliament in the Telecommunications Act) applies just as equally to the Broadcasting Act. No such directive has been issued by the Minister of Heritage, who oversees the CRTC when it comes to the latter Act.
  • The Task Force’s suggestion would actually decrease the money for true Canadian content programming finding its way on the public broadcaster’s schedule. Given the cable operators’ open hostility to the fact that CBC/Radio-Canada have a guaranteed access to the Fund, who could ever believe the Task Force’s assertion that “projects qualifying for the new market-oriented private sector funding stream should be eligible for licensing by the CBC”?
  • Unconstrained by  its original mandate, the Task Force meanders in the murky waters of copyright to suggest that when it comes to new media, broadcasters and producers should settle rights issues, “on an interim basis” at least, by a 50/50 sharing of net revenues – regardless of any rights any other party may have – when it comes to distributing programs through the “new media”;
  • On the issue of governance and conflict of interest, the Task Force first acknowledges that contrary to the accusations levied by the cable operators, “no instances of actual conflict were presented, a fact attributed in large part to the efficacy of the conflict of interest provisions that have been implemented by the Board”. The Task Force even goes on to mention that a June 2006 independent review by Renaud Foster calls those measures “a comprehensive framework for managing conflicts of interest  (…) more detailed than those adopted by many boards of directors with stakeholder nominees.”
  • Nonetheless, the Task Force goes on to recommend that independent producers should be excluded from the Board and one more seat given to BDUs. In doing this, the Task Force sidesteps the realities of concentration of ownership which, in practical terms, will give control of the CTF to conglomerates owning broadcasting licences and all forms of distribution systems. This also extends to the so-called “new media” against which they are deemed to be competing. Further these new media interests, contribute nothing to the CTF, nonetheless the Task Force recommends that $ 25 million from the CTF be devoted to the development of new media content.
  • Having indeed recognized that the CTF is under funded, the Task Force suggests allowing the same “new media” operators access public funding without their having to make any contribution similar to that of broadcasters and other BDUs.  It is most interesting to note that the CRTC, which has just concluded last December, after its review of the impact of “new media” on traditional broadcasting , that there was no need to regulate the former in any way because they do not yet constitute a real threat yet to traditional broadcasting,  is now invited to slash  $25 M of the Fund to subsidize the production of programs for new media.
  • Further, the CRTC Task Force points to the same “new media’s” competition with BDUs to say without any supporting evidence, that it “is also conscious that any recommended changes should be implemented quickly” –ignoring the realities of concentration of ownership in the sector, an issue scheduled to be looked at by the CRTC in mid-September rafter the changes to the CTF suggested in the Report have already started being implemented.

 The CCA’s overall concern is that the adoption of the Task Force Report recommendations would lead to fundamental changes in the role of the CTF as an instrument of government policy to achieve the objectives set by Parliament in the Broadcasting Act (1991), and that such changes would occur without the fair, open, transparent and accountable process expected of the CRTC as steward of the Broadcasting Act.  

As Mr. Douglas Barrett, Chair of the CTF, said at the opening session of the February 8 Parliamentary hearing on the CTF crisis:

 “…the real question here today is this:  Who is to be primarily responsible for determining and designing the appropriate structures for supporting television production in Canada with public resources.  Is it to be Parliament, its Ministers and officials plus the mandated regulator?  Or, is it to be private stakeholder groups with the financial levers to drive the debate?”

If the CRTC Task Force is anything to go by, the answer is quite clear.

What can I do?

The CCA is currently working on a submission to the CRTC on the CTF Task Force Report and will make it available as soon as possible. You can make your views known to the CRTC:

  • By using the Broadcasting Interventions/Comments Form
  • By mail to CRTC, Ottawa, Ontario K1A 0N2
  • By Fax to 819-994-0218

As a minimum, you could demand that the CRTC proceed immediately to change its BDU Regulations so as prevent Shaw and Vidéotron from repeating their strong arm tactics of last winter, a threat expressed by the former the very eve of the Report being made public.

 
 

© 2007 Canadian Conference of the Arts. All rights reserved.