Broadcasters protest changes to Quebec tax credits, say TV programming will suffer

Quebec broadcasters say that some popular TV shows will disappear from their schedules if the provincial government moves ahead with proposed changes to its tax credits. The broadcasters add that the changes, announced March 11, came as a complete surprise to them and without any consultation. That’s in contrast to the views of the unions and the Quebec producers’ association, which claim the report generally reflects the overall views of the industry (CCR, March 27/03). Many broadcasters tell Canadian Communications Reports that the changes took them by complete surprise as the Société de développement des entreprises culturelles (SODEC) had continuously informed them that no changes to the TV tax credits were in the works. It is believed the Quebec government’s decision to cut some tax credits for TV production and transfer the money to the film industry came primarily from the provincial finance department. "It will be a loss for independent producers and for broadcasters and it will be a loss for the public in general," says Michel Carter, president and CEO of Cogeco Radio-Télévision Inc. and TQS Inc. "If what’s been announced during the budget is maintained, it will have a negative impact, that’s for sure. There will be a loss of jobs, and there will be changes in TV schedules." While the budget that would allow those changes to come into effect hasn’t yet been passed, the government document Politique Québécoise du cinéma et de la production audiovisuelle indicates that the changes will become effective May 1. Quebec broadcasters are now attempting to inform the government of the consequences that the measures will have on the TV industry. Under the new plan, the provincial government will cut tax credits introduced in 1998 that were given to independent TV producers who employ staff at broadcasters to help produce their shows. As well, drama, documentaries and to a lesser extent magazine shows that were given tax credits, regardless of the time of day at which they broadcast, will now only qualify if they are aired during prime time. Michel Arpin, senior adviser of regulatory and government affairs at Astral Media Inc., says the tax cuts will mean the end of the popular Musicographies that air at 8 p.m. on Astral’s MusiMax. He notes that the music specialty channel produces about 15 of the music biographies annually on Quebec musicians, while the others are acquired. Some of the Quebec-produced Musicographies were sold to other broadcasters, he adds. "That’s gone out the window, because we were able to do them only because we had access to the tax credit. So it’s a stream of good Canadian programming that was not only played by specialty TV but also over-the-air television that is gone. We are going to lose a lot because they were generating good ratings, but they are expensive to produce," Arpin says. Carter says that some regional shows – an area that both Canadian Heritage minister Sheila Copps and the CRTC have emphasized as being important – will be cancelled from his company’s TV schedule. "It (the tax changes) is a major impact in terms of the percentage of our bottom line that is involved here. So there will necessarily be substantial adjustments," he tells CCR. "There are some regional shows aired during the weekend, but not during prime time, that won’t have the financing to continue. And we won’t provide the additional financing to do it. It’s as simple as that." The broadcasters complain that the tax credit changes will have a domino effect on both independent producers and them. Broadcasters will lose the tax credits for shows produced by staff at affiliate production houses, including TVA’s JPL Productions, TQS’ Point-Final, Cogeco’s Carrefour International, MusiquePlus/MusiMax’s MaxPlus and Radio-Nord’s Creation Total. As well, the independent producers will suffer because they won’t be able to use the broadcaster personnel in producing their shows if they want access to the tax credit, the broadcasters state. One show that is going to be hit, for example, is Radio-Canada’s Christiane Charette en direct, because the popular Sunday afternoon program isn’t broadcast in prime time. Suzanne Laverdière, acting general manager of general TV at Radio-Canada, says: "With soaps, a large amount of the budget goes to the cast, so the tax credit changes won’t have a dramatic effect. The problem is more for the variety projects, where there’s a singer and all of the crew is from Radio-Canada because the amount paid for the staffing won’t be tabulated in the tax credits." An example of a program that will be affected because it is produced by Radio-Canada personnel is the Friday night show, La Fureur, she says. The budget, however, does include some transitional measures that Carter says would save existing shows – at least for the fall 2003 season. "In some cases, there are transition rules that could preserve some of the shows for the fall of 2003, but we still don’t know how this is going to be enacted and worked out," he states. The changes have come as a complete surprise, the broadcasters say. "The finance minister says the changes were made because the tax credits ‘had not produced anticipated results.’ But there were no studies done, there were no consultations, there was nothing to alert anybody (to the changes)," Arpin says. Carter adds, "We really don’t know how this came to pass without the government even consulting with us, or suggesting that there was a problem. We’re flabbergasted by this whole announcement and we hope that there is room for revision, because it will have a major impact on many shows."

Broadcasters protest changes to Quebec tax credits, say TV programming will suffer

Broadcast | April 10, 2003

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