FROM THE DESK of Alain Pineau: Why should you care about the Canadian Television Fund Crisis?

CCA Bul­letin 07/07

Ottawa, Feb­ru­ary 20, 2007

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)

It now seems that we have the answer to the ques­tion asked by Mr. Bar­rett, and that is why we should all be con­cerned about the CTF crisis.