CCA Bul­letin 26/08

July 31, 2008

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.