Canadian Heritage, cable industry disagree over whether CTF requires more changes

With the Canadian Television Fund (CTF) having undergone a fine-tuning, all that Canadian Heritage is waiting for is its renewal. While the department says that it has completed changes reflecting an evaluation of the fund and a consultative process (CCR, Oct. 13/00), the cable industry says an extensive revamping has been put on hold until future financing has been secured. Canadian Heritage ADM Michael Wernick tells CCR that the overhaul is "all done," adding that "there were much more radical restructuring options, but we rejected that. The conclusion was that the fund was working pretty well." But the cable industry contends that the fund needs more revamping. "That’s their (Canadian Heritage) view (that the process has been completed)," notes Janet Yale, president and CEO of the Canadian Cable Television Association (CCTA). "There were calls…for an examination of the governance structure of the fund, and that general overhaul was not done because there was a one-year administrative renewal of the fund. Having said that, it is true to say that as part of that administrative renewal, there were a couple of changes made…" "From a distributors’ perspective, there are still some governance issues that should be addressed," she tells CCR. Changes already made to the fund include an enlarged CTF board, with three additional positions being named by the Canadian Heritage minister, and an obligation for the CTF to have a CEO position to bridge the two components of the fund. Gary Toth was named the CEO. Wernick says there are now also clearer reporting obligations, and single business plans and activity reports. As well, he notes that the CTF board must come up with just one recommendation on how funding should be split between the fund’s Equity Investment Program (EIP), administered by Telefilm Canada, and the Licence Fee Program (LFP), administered by the CTF. "The contribution agreements by which the government flows the money to Telefilm and the CTF corporation are significantly different," he says. "…The contribution agreements underlying this year’s money are tighter and different than the previous year … and that is the mechanism by which we exert any kind of leverage or influence on the fund." Wernick says that if the fund receives long-term funding, few further changes will be made. However, he does say that direct-to-home satellite TV distributors could soon get representation on the CTF board. "They may well (get representation) next year," Wernick notes. "...I think it would be reasonable given the amount of financial contribution that comes in from the two big satellite companies. They don’t have an association in the way that cable and broadcasters do, so that’s made it a little awkward for them to kind of even articulate their own interests in all of this." The CTF was given a one-year transitional renewal for the 2001-02 fiscal year. The renewal was granted to "provide continuity in policy implementation," pending the government setting its next budget (CCR, Feb. 28/01). Canadian Heritage minister Sheila Copps supports the industry’s push for permanent, long-term funding in this year’s budget. At the Canadian Association of Broadcasters convention in late October, Copps said she was doing all she could to get the fund renewed. Ultimately, though, it is up to her Cabinet colleagues and Finance minister Paul Martin to include the item in the budget. The CTF is a public-private initiative with an annual budget of nearly $230 million. The LFP has a budget of about $130 million, of which $50 million comes from Canadian Heritage and about $80 million from broadcast distributors. Canadian Heritage contributes $50 million and Telefilm Canada another $50 million to the EIP.

Canadian Heritage, cable industry disagree over whether CTF requires more changes

Broadcast | November 22, 2001

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