0809

The audio-visual sector in Canada represents a large source of employment for the cultural sector and the most widely consumed form of cultural expression. Hill Strategies recently noted that “although artists work in many different sectors of the economy, the industry with the highest number of artists is arts, entertainment, and recreation (52,600 or 38% of all artists).” In 2004 The Cultural Human Resources Council noted that the labour force of A/V and live performing arts was 97, 335, with a labour force growth of 35% between 1991 and 2001. This new Canada Media Fund encourages the production of Canadian content, but also stimulates the continued growth of an important labour sector in the Canadian creative economy.

We believe that the funding and governance of Canadian content matters to all cultural producers, artists, and those interested in Canadian culture and heritage. For these reasons, the Canadian Conference of the Arts has closely observed the evolving funding structure for Canadian content and media. The Canadian Television Fund "crisis" has been on our radar for the past two years and this week's announcement is an important evolution of that file.

The Minister of Canadian Heritage, the Hon. James Moore, announced on Monday the creation of a new Canada Media Fund through the merger of the Canadian Television Fund and the Canada New Media Fund, whose survival had been announced in the January 27 budget. The new governance structure is scheduled to be announced in a few months and fully in place by fiscal year 2010/11; until then both funds will operate under existing structures.

The new fund will receive $135 million dollars per year from the government in each of the next two years, the current level of government support for the existing programs. This will be added to the contributions of cable and satellite companies (BDUs) as mandated by the CRTC. The CMF will fund the production of Canadian programs that are made available on at least two platforms, including television.

The government decided not to follow the advice of the CRTC to split the fund in two, a recommendation which had been almost unanimously opposed by the cultural community.
The government has made a two-year funding commitment to the CMF at existing levels.
The government recognizes the fact that new media are now part of the Canadian broadcasting system, particularly important since it happens in the midst of CRTC hearings on this topic. Many in the sector are asking the CRTC to regulate broadcasting in new media and to require Internet Service Providers to contribute to the production of Canadian content.

On the other hand, the Minister’s announcement seems to accede to all other requests from the cable operators who initiated the crisis and who were on hand at the press conference to show their approval. “Accountability”, “programs Canadians want to watch” and “level playing field” were all part of Shaw’s and Vidéotron’s initial demands.

The “level playing field” is established by pulling away the guaranteed envelope for the CBC/Radio-Canada, and by opening up funding to broadcaster-affiliated production companies and in-house productions. Since 2005, based on historical performance data, the CBC/SRC had been guaranteed access to 37% of the CTF, most of which supports drama production. In the new model, the public broadcaster will have to compete with all other broadcasters for the money, as will other public broadcasters like TVO and Télé-Québec. This, plus the emphasis on ratings success, has many people worried that less popular content (documentaries, performing arts, and children programming) will suffer greatly from the new rules. Given the current financial challenges, this could be a significant blow to the CBC/Radio-Canada. Also, until now, the CTF funds have been distributed solely to Canada’s independent production community. The expansion of eligibility will take place directly at the expense of this important sector.

The governance structure put forward by the Minister also raises questions. The first of these concerns the statement that as the “funders” BDUs should be responsible for deciding how the funds are allocated (“accountability.”). This firstly ignores the origins of the CTF. In 1993, cable operators were allowed to keep half of what was supposed to be a temporary capital expenditure surcharge (“Capex”) in exchange for providing the other half to support Canadian content programs. In that context, all money in the new Canada Media Fund is public money, in this case a tax on cable subscribers. It is thus questionable to give BDUs five of the seven seats of the new Board responsible for divvying up the money.

Despite the fact that the CRTC studied the issue and twice found the accusations unsubstantiated, the removal of independent producers and broadcasters from the Board is designed to solve the conflicts of interest which were supposed to plague the current governance model. But, with the consolidation of ownership, some BDUs are now owners of traditional television stations and specialty services, which means they may well be in a position to grant themselves preferential treatment. Instead of acceding to the cable company demands, if the issue was solving conflicts of interest, the Minister could have allocated seats on the Board for representatives of the television industry’s professional associations, a proposal they have been making for many years.

Beyond this remaining conflict of interest, one can only wonder what Canadian programming will be approved by the BDUs now charged with deciding what programs Canadians “want to watch.” Many remember that when one of them appeared in front of the Standing Committee on Heritage in 2007, he singled out the CSI series as the kind of “sound programming investment” he had in mind. Meanwhile, the conventional broadcasting network owned by another BDU has asked the Commission to remove from it all requirements to broadcast Canadian priority programming (drama, documentary, children’s, etc.).

Minister Moore’s announcement this week is meant to be the conclusion to the crisis created two years ago when two key cable operators, Shaw Cable and Vidéotron, withheld their monthly CTF contributions. To justify acting unilaterally, the two cable companies said the CTF was “inefficient, wasted money on programs that viewers don't watch and shouldn't be providing 37 per cent of its budget for independent productions that end up on the publicly funded Canadian Broadcasting Corporation (CBC).” Building on concerns expressed in 2005 by Auditor General Sheila Fraser, they accused the current Board of directors of the CTF of conflict of interest and of lack of accountability.

The crisis led hearings by the Standing Committee on Canadian Heritage and to the creation by the Canadian Radio-television and Telecommunications Commission (CRTC) of a special Task Force, which conducted a series of private, behind-closed-door-consultations before releasing a set of 24 recommendations to the CRTC in June 2007. The most contentious of the Task Force’s recommendations was 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”. A full year later, the CRTC included this particular recommendation in a report it presented to then Minister of Canadian Heritage, the Hon. Josée Verner, concerning the future of the CTF.

Created in 1996, the CTF is a public-private partnership funded by the Government of Canada, cable companies and direct-to-home satellite service providers. With an annual budget of approximately $250 million ($150 million of which comes from money collected by the distribution undertakings for that purpose) its role is to assist the creation and broadcast in peak viewing hours of high-quality, culturally-significant Canadian television programs in both official languages by both majority and minority official languages production sectors.

The CTF was conceived also as part of an overall strategy to ensure the vitality of an independent creative sector as a key component of the overall broadcasting system and essential to achieving the cultural objectives of the Broadcasting Act. Canadians benefit culturally, in the form of new and often award-winning programs in genres difficult to finance in this country, and economically, through employment and income opportunities for creators, performers, directors, technicians and others working in this important sector.

CCA Bulletin 8/09

The New Canada Media Fund: A glass half full, or half empty?