CCA Bulletin 07/07

FROM THE DESK OF ALAIN PINEAU

National Director
Canadian Conference of the Arts

Ottawa, February 20, 2007

Why should you care about the Canadian Television Fund Crisis?

The best reality show these days is not on TV, although it is about TV.  It is being played out partly in newspapers and through other media, but a lot of the action is taking place behind closed doors… which is why Canadians should all be grateful to the members of the Standing Committee on Canadian Heritage for providing us with some live (and lively!) episodes twice a week for most of February, to follow the twists and turns of the Canadian Television Fund (CTF) saga. This is a show that deserves the best ratings possible.

Why should all members of the Canadian arts and culture sector care about the CTF crisis?  Because first of all, it raises in a very forceful way the fundamental question of who actually makes decisions regarding the cultural policies and strategies in Canada.   As Mr. Douglas Barrett, Chair of the CTF, said at the opening session of the February 8 Parliamentary hearing on the 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?

Just the facts

In a unilateral decision both Shaw Cable before Christmas and Vidéotron Cable on January 23rd decided to stop the monthly payments they, like all other cable and satellite direct-to-home distributors, have been making to the CTF for several years, further to regulation by the Canadian Radio-Television and Telecommunications Commission (CRTC).  Given the realities of television production cycles, this coup de force puts a lot of current independently produced popular programs in jeopardy.

To justify taking the matter into their own hands, the two cable companies say the CTF is inefficient, wastes 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). Technically, the two cable companies will not be in breach of any CRTC regulation until after August 31, but they have used a loophole in the system to exert political muscle to get the “long denied” attention they say their recriminations deserve.

The initial lack of reaction from Minister of Canadian Heritage, the Hon. Bev Oda, led the Standing Committee to unanimously decide on a public hearing on the CTF standoff, which is now in its third week. Minister Oda has since met with all major players in this drama and, much to the relief of all concerned, she has announced that the government was committed to granting $100M over the next two years to the CTF.  The Heritage Minister has declared several times that it is the Canadian Radio-Television and Telecommunications Commission’s (CRTC) responsibility to see to it that the cable magnates behave. In the February 13 episode of the series, Minister Oda appeared in front of the Parliamentary Committee where she announced that she had called upon the media barons to respect the spirit, if not the letter, of the law of the land.

Echoing Minister Oda in front of the Committee, the very recently appointed Chair of the CRTC, Konrad von Finckenstein, first issued a statement acknowledging that Shaw and Québécor have raised a number of serious issues that need to be resolved and that as of yet have not been addressed by the CTF Board of Directors and welcoming the commitment to Canadian programming made by Québécor “which deserves further study.” 

As Globe and Mail journalist Konrad Yakabuski wrote on February 15, “Mr. von Finckenstein's stance is not surprising. (…) After all, he was hand-picked by Prime Minister Stephen Harper to shake up the CRTC, the agency that oversees the television fund. His appointment also had the support of Ms. Oda, who, as a CRTC commissioner in 1996, opposed the creation of the CTF. Along with two others, she wrote a dissenting opinion arguing that "cable rates should be justified on their own merits, not used as a lever to extract revenues for other purposes."

Last week, the Canadian Broadcasting Corporation (CBC), one of the targets of the offending parties, put on the record a number of facts on the origins of the Fund and its operations. Yesterday, it was the turn of Shaw Communications CEO Jim Shaw Jr. and of Québécor’s CEO Pierre-Karl Péladeau to appear in front of the Parliamentary Committee.  If anyone expected a contrite demeanour from the two media barons, he/she was in for a disappointment!

Mr. Shaw left no doubt as to what he considers the total legitimacy of his tactics to obtain what he wants to see happen to the CTF, which he maintained is inefficient, unaccountable and a total failure, financing programs Canadians clearly don’t care about in his opinion. As for Mr. Péladeau, he repeated the “proposal” Québécor made public last week, namely that its cable subsidiary Vidéotron would put $109 million over three years, including $30 million in 2007, into funding for Canadian production as a replacement for its contribution to the Canadian Television Fund. This money would be dedicated to programming to be distributed on the several platforms the Québec media giant owns and produced internally or by “independent” producers who, apparently, may not be allowed to work for anyone else if they work from his media empire.

In response to Minister Oda’s call for cooperation, and with the affirmation that he had received firm assurance that his complaints would be dealt with, Shaw announced that it would now resume its payments to the CTF, as Québécor had done a week ago an for the same reasons.

Barely an hour later, the CRTC was announcing that it had set up an internal working group under the chairmanship of CRTC Vice-Chair of Broadcasting, Michel Arpin, to determine:

• the most effective use of the required contributions from Broadcast Distribution Undertakings;
• the most appropriate size and structure of the CTF Board;
• the most appropriate mechanisms to deal with real or perceived conflicts of interest at the CTF.

The press release goes on to say that “the work of the Task Force requires intense interaction and the utmost openness between all stakeholders, and may necessitate the sharing of confidential information. The work must therefore be conducted in confidence. Accordingly, the Commission will not comment further on this issue until the Task Force's report is released. However, the Chairman will appear before Parliament later this week to answer questions about the process the task force will be following.” (our emphasis)

The Task Force will make its final report public some time after presenting it to the CRTC on August 31. It is of particular interest to note that “If it is required or deemed advisable based on this report, the Commission will then issue a public notice and hold a hearing.”

The CCA is following every episode of this docu-drama on realpolitik and will be intervening in writing later on this week. Don’t miss the next instalment, when we do a more thorough analysis of the cable operators’ arguments and report on CRTC’s Chair Konrad von Finckenstein’s appearance in front of the Parliamentary Committee.

So, the crisis is over? Well, not quite…

It is difficult not to feel outraged at the unilateral declaration of independence by Shaw Communications and Québécor, and even more at the sympathetic ear they are getting from the government and the regulator.  Ever since their inception, those two media conglomerates have benefited from market protection, regulation and direct and indirect subsidies from the federal government and the CRTC, a fact they now conveniently choose to forget. They also forget to mention that in exchange for every dollar they contribute to the CTF, they get to keep the same amount, which translates into as many millions to their bottom line!

Beyond the indignation it provokes, Shaw and Québécor’s challenge to Canadian cultural policies raises serious concerns about the government’s and the regulator’s reactions to such attitude. The fact that all this is being dealt with behind closed doors is of particular concern.  When what is essentially civil disobedience is met with such understanding and open-mindedness, one is left to worry about the end result of the exercise.

The CCA and anyone who cares about openness, accountability and transparency in government can only object to the process put in place by the CRTC with the obvious blessing from the Minister and the PMO. And despite Minister Oda’s assurances to the Parliamentary Committee, agreeing to the Québécor “proposal” will mean the end of the Fund as we know it. The declaration of Ken Stein, senior vice-president of Shaw Communications, after meeting with the Minister now seems to be fully justified: "The fund can't be fixed. It's dead, done, gone." (link)