CFTPA proves to be a strong ally for CTF

It’s been three weeks since cable BDU Vidéotron ltée announced it would follow Shaw Communications Inc.’s lead and halt its financial contributions to the Canadian Television Fund. When Canadian Communications Reports last went to press, we reported that the CTF, its supporters and the BDUs had issued a flurry of media releases stating their views on the matter, and the action hasn’t stopped. Below is a recap of the activity surrounding the CTF from the past two weeks: January 31: The CTF announces its board has approved a financial plan that will allow it to continue supporting eligible productions for the 2006-07 year in spite of the funding disruptions caused by Shaw and Vidéotron. The plan calls for borrowing forward against "certain known 07-08 revenues," which will result in an operational deficit for this fiscal year. "However, if the current situation is not resolved, the CTF must anticipate a significant reduction in the CTF 2007-2008 budget and program allocations," said CTF president Valerie Creighton. February 1: CTF chairman Douglas Barrett meets with Minister of Canadian Heritage Bev Oda in Ottawa to articulate the impact of Shaw and Vidéotron’s actions. "We believe minister Oda is committed to assuring the continuity of the Canadian production system and to doing what she can to find a solution to the current challenges," said Barrett.The Canadian Film and Television Production Association (CFTPA) is pleased that the CTF plans to continue supporting eligible productions, but voices its concern about the uncertainty surrounding funding for projects beyond 2006-07, which are already being negatively affected. "We will not stand idly by and watch some cable companies unilaterally destroy an entire industry by dictating the terms by which they will or will not live up to their regulatory obligations," said CFTPA president and CEO Guy Mayson.New Democratic Party Heritage critic Charlie Angus (Timmins-James Bay) successfully presents the following motion before the Heritage Committee: "Due to the ongoing uncertainty of the future of the CTF…this committee will investigate the impacts of the CTF’s potential elimination on the health of Canada’s domestic television production and make recommendations to the House of Commons based on our findings in committee." February 6: Shaw Communications concludes the CTF is broken beyond repair. Said Jim Shaw: "Our customers pay for the CTF through their taxes and subscription fees. We would prefer to return the money to our customers, rather than continue funding an entity that has no accountability and is clearly failing to achieve its objective of creating high quality Canadian programming." February 8: "We certainly believe the CTF can and should improve, we believe it is healthy and strong, not ‘broken’ as some have suggested," stated the CTF in its presentation to the Parliamentary Standing Committee on Canadian Heritage. Among the fund’s many recommendations was adding a second seat for DTH providers to the CTF board of directors. The CFTPA, also during an appearance before the Standing Committee, reiterates the importance of BDUs adhering to CTF funding regulations. "The industry is in complete limbo right now and the viability of the sector is at stake," said CFTPA chair Ira Levy. "This is creating huge uncertainty in the sector and has had an immediate impact on international sales. Uncertainty is deadly for production planning." February 9: Shaw responds to CBC executive VP Richard Stursberg, who told The Globe and Mail that withholding CTF payments could unravel the Canadian broadcasting system. "It is unconstructive and misleading," said Jim Shaw in a press release. "The CBC is the biggest recipient of CTF monies. Canadians deserve a fair and independent accounting of how billions of dollars that they paid out in taxes and fees were spent by the CTF and the CBC." Shaw added: "CTF has created a culture of entitlement. It keeps giving the private broadcasters more and more money for Canadian programming, but broadcasters keep spending less and less on Canadian, and more on American programming."February 12: Pierre Karl Péladeau, president and CEO of Vidéotron parent Québecor Inc., holds a press conference to announce a proposal to divert all Vidéotron’s Canadian production contributions to its Québecor Fund, rather than split it 80/20 between the CTF and the Québecor Fund. In 2006, the BDU remitted $15.2 million to the CTF and $3.8 million to the Québecor Fund, for a total of $19 million invested in Canadian productions. To sweeten the deal, Péladeau proposed increasing that amount to $30 million this year – again, provided it go to the Québecor Fund only – and grow the figure by 20% each year after that until 2010, for a total contribution of $109 million over three years."With the approach we are proposing, the independent production industry would not disappear, but it would undergo a profound change," Péleadeau is quoted as saying during the French-language announcement. "Rather than experts in financing, the independent producers would have to become experts in production." He proposed an "opting-in, opting-out" system where producers electing to apply for funding from the Québecor Fund wouldn’t be eligible for CTF monies, and also called for JPL Productions – a subsidiary of Québecor’s TVA Group and the proposed overseer of the Québecor Fund – to be allowed to access provincial production tax credits.

CFTPA proves to be a strong ally for CTF

Broadcast | February 14, 2007

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