CCA Bulletin 26/08

July 31, 2008

Canadian Television Fund: the CCA opposes the CRTCs main recommendations

Just the facts

 The Canadian Conference of the Arts (CCA) has written to the Minister of Canadian Heritage, the Hon. Josée Verner, to oppose strongly to the Minister of Canadian Heritage, the Hon. Josée Verner, to oppose strongly the main recommendations of the report that the Canadian Radio-television and Telecommunications Commission (CRTC) presented to her in June concerning the future of the Canadian Television Fund (CTF).

In its June 6 Report, the CRTC supports a recommendation made previously by its own Task Force “to create a market-oriented private sector funding stream” within the CTF. While it rejects other recommendations of the Task Force which were vigorously opposed by most stakeholders, the Commission recommends to the Minister that the Fund be divided into two distinct funding streams – a public sector stream concentrating on the production of programming “that contributes to the fulfillment of the cultural objectives set out in the Broadcasting Act”, and a private sector stream that “would be market-oriented and concentrate on the production of programming with broad popular appeal to Canadian audiences”.

The “public” funding stream would be provided by government’s appropriations and be accessible only by the CBC, educational broadcasters and other not-for-profit broadcasters, whereas the “private” stream would rely on funding from broadcasting distribution undertakings (BDUs) and be accessible only to private commercial broadcasters. Each funding stream would be managed by its own board of directors.

The CCA opposes the CRTC’s recommendation for several reasons:

1. The CRTC recommendation is based on a false and dangerous distinction between “cultural” and “popular” programming as if those two terms were mutually distinct.
2. The CRTC seems to imply first, that private broadcasters should be exempt from contributing to the cultural objectives established in the Act, and second, that the public-sector broadcasters that have made Canadian content their priority and also achieve “popularity” should now be penalized financially for that effort. 
3. While it recognizes a problem often raised by a number of parties, namely that the government’s contribution to the CTF has been at the same level for the past twelve years, the CRTC would still confine public broadcasters to what, by any account, is a dwindling source of funding. If its recommendation were adopted this year,  this would mean that over $20 million currently available to publicly-supported broadcasters would be lost to them.
4. More importantly, the CRTC’s recommendation is based on the false assumption that the financial commitment that BDUs make to the CTF is in some way private money that should flow only to private broadcasters. What is at stake here is not the financial subsidization of the private broadcasting sector but the pursuit of the public interest and of the cultural objectives set in the Broadcasting Act.
5. CCA objects in particular to the notion that the “private sector stream” should be managed by a board dominated by Canada’s largest BDUs.  This would likely lead to the creation of a not-very-transparent, somewhat unaccountable funding body in which conflicts of interest would be more likely than not, something somewhat ironic given the yet to be proven allegations raised against the current CTF board in to that effect.
6. The CRTC’s recommendations would also introduce costly inefficiencies in the way the Fund is managed and would draw money away from program production – no small irony here again, given that BDUs criticized CTF for precisely the same reasons.  As a single fund, the CTF currently operates efficiently with administrative costs of only 5% of its total budget. It is estimated that if this recommendation were implemented, those costs could increase by over 50%, with a possible loss to production amounting to $ 40 million over five years.
7. Finally, the CRTC’s recommendation would be particularly damaging to the French broadcasting system. Under the private/public streams proposal, the “diversity of voices” would be eliminated: Radio-Canada would not be permitted to work with independent producers to access the “private stream” for any “popular” entertainment programming, whatever that may mean. This would likely leave Quebecor’s network TVA as the main beneficiary of the funds contributed by Quebecor’s dominant cable system, Vidéotron. 

 Tell me more

 The CTF saga is worthy of a television production in itself! The “crisis” was engineered by two of the largest BDUs in the country, which made a number of accusations against the Fund and its management structures were that they were: “inefficient, unaccountable, conflicts of interests, a total failure, financing programs Canadians clearly don’t care about”.

Despite considerable evidence to the contrary, despite a remarkable rallying of the sector to support the important role of the CTF as policy instrument in the audiovisual environment, despite the fact recognized by both the Task Force and now the CRTC  that “no evidence of actual conflicts of interest has been uncovered”, the Commission nonetheless and unaccountably concluded that it was necessary to fix what is not broken and to grant to the BDUs what they wanted:  i.e. to get the public broadcaster out of the growing pool of so-called “private money” and give the BDUs control over the funds they send to the CTF.  In fact, the CRTC Report actually says that, “there is a certain logic in having private sector funds governed by the private sector, which can best represent their interests” (CRTC Report to the Minister of Canadian Heritage on the Canadian Television Fund, para. 55.)  If this is true, it seems to raise questions about the pertinence of imposing any public obligations on private broadcasters at all.

Over an amazing dissenting opinion by one of the Commissioners, the CRTC goes to great lengths to reject Quebecor’s proposal that it be allowed to opt out of the Fund and set up its own to be managed by its own TVA Productions company. However, with Radio-Canada’s access to the “private stream” money blocked and control of that stream left to BDUs themselves, Quebecor should find some satisfaction in the reality that it would stand to be the main beneficiary of the money it is required to contribute to the Fund.

Perhaps one of the most astonishing facts of all is that more than a year and a half after two of Canada’s largest and wealthiest BDUs used a poorly-written CRTC regulation to hold the entire Canadian television production system hostage, the CRTC has still not corrected the loophole to prevent any repeat of such tactics.

On the positive side, it is encouraging to see that the Commission has undertaken to begin a process to review its Certified Independent Production Funds Policy with a view to providing greater support for new media projects.

What can I do?

 It is not clear at the time of writing this bulletin when the Minister will make a decision concerning the CRTC recommendation. You can write to the Heritage Minister and to your MP to express your views on the matter. If you do, please send us a copy of your intervention.