CCA Bulletin 03/07

Ottawa, Tuesday, January 30, 2007

Dispute Erupts over the Canadian Television Fund (CTF)

Just the Facts

Some of Canada's largest cable firms have decided that they will no longer be contributors to the Canadian Television Fund (CTF). In a series of statements from Shaw Communications and Videotron, these cable companies have said that they can no longer justify the contributions that they make to the fund while the CBC claims a big portion of it, as well as over one billion dollars in public funds through Parliamentary appropriation.

The CRTC‘s regulations require the cable companies to contribute 5% of their profits into the CTF annually. The CRTC is expected to take a tough line on the withholding of cable contributions to the Canadian Television Fund. The CBC has issued a statement that while 37% of the fund is reserved for independent productions for CBC and SRC, the money goes to the producers and not directly to the public broadcaster.

However, in 2005, the Auditor General of Canada Sheila Fraser criticized the Canadian Television Fund on a variety of governance issues and the lack of clear goals. The dissenting cable companies have seized upon these comments and Jim Shaw of Shaw Communications has indicated he will withhold further contributions until the Fund provides a “statement of accountability”, listing what productions it has funded, as well as the ratings and revenues each production has generated.

The Minister of Canadian Heritage, the Hon. Bev Oda, has summoned the recalcitrant cable companies to Ottawa for a meeting on Tuesday, January 30, 2007 to try and bring them back into the fold. The Minister also confirmed that the Government would provide $ 100 million to the Fund in each of the next two years. This welcome announcement is interpreted to be a vote of confidence by the Government regarding the Canadian Television Fund.

The move by cable companies jeopardizes the capacity of the CTF to provide much needed funding for the production of Canadian content in the broadcasting system. The cable companies have indicated that they would be prepared to increase their contributions to the CTF if the rules of the game were amended to their taste and sense of fairness.

The Fund is an important support program providing professional opportunities for Canadian actors, directors, composers and writers. The confidence of the federal government in the Fund is a welcome development and the CCA will keep its members and supporters posted on further developments via our bulletins.

Tell Me More…

The Department of Canadian Heritage has provided some useful background notes on the Canadian Television Fund. The following paragraphs have been excerpted from the notes.

The Canadian Television Fund is a private-public partnership. It was created in 1996 by the Government of Canada and the Canadian cable industry.

The Fund's main objective is to support the production of Canadian television programs that reach audiences in both official languages, as well as Aboriginal languages, during peak viewing hours (7p.m. – 11 p.m.) The Fund supports the following genres of television programs:

•  children and youth

•  drama

•  documentaries

•  variety

•  the performing arts.

For 2006-07, revenues from the Fund come from two sources, the Government of Canada contributes $ 120.4 million and the Canadian cable and satellite companies provide an amount of $ 145 million.

For the Canadian Broadcasting Corporation (CBC), given its unique mandate as the public broadcaster and the CTF's move to reward audience success, it was decided that the CBC triggered productions would have a guaranteed envelope from the CTF. This represents 37% of the Fund's total contributions. Most of this funding goes towards drama productions. 

A New Chair for the Canadian Radio Television and Telecommunications Commission (CRTC)

In another development, the Government of Canada has also announced the appointment of a new Chair for the Canadian Radio Television and Telecommunications Commission. Konrad von Finckenstein has been given a five-year mandate as Chairman of the regulatory body.

Mr. von Finckenstein has enjoyed a long and varied career in Government holding a variety of positions from the Senior Counsel of the Trade Negotiations Office, Assistant Deputy Minister Free Trade Policy and Operations, Commissioner of Competition (the head of the Competition Bureau). In late 2002, he appeared before the Standing Committee on Canadian Heritage, as it undertook its study on the state of the Canadian broadcasting system. He told the Committee that as Commissioner of Competition,

Our interests [at the Bureau] in broadcasting and telecommunications are strictly focused on economic competition in the key markets. We recognize that the Government is also interested in pursuing other objectives, including cultural and social goals.

The challenge is to find approaches to these cultural and social goals which are efficient, effective and permit economic competition.

He also said that the CRTC should let the Bureau assess the economic effects of mergers in broadcasting, and restrict itself to dealing with mergers' impact on “cultural values”. Two huge transactions – CTV's acquisition of CHUM radio assets, and CanWest's acquisition of Alliance Atlantis specialty services – may be considered by the CRTC this year.

While head of the Competition Bureau, Mr. von Finckenstein opposed a merger between Astral and Télémédia involving radio stations, arguing that the acquisition substantially diminished competition in advertising in that province. Astral already owned 12 radio stations in Quebec, and wanted to buy 11 more radio stations there from Télémédia: the CRTC approved the transaction, in part because Astral's increased size would allow it to improve programming on those stations. Afterwards, however, the two companies and the Bureau reached a different agreement: Astral acquired fewer radio stations and withdrew applications for several other new radio stations, while the Bureau dropped its opposition.