OTTAWA-GATINEAU - The Canadian Radio-television and Telecommunications Commission (CRTC) today submitted a report on the Canadian Television Fund (CTF) to the Minister of Canadian Heritage. The report contains 11 recommendations relating to the CTF's mandate and governance structure.
"The Commission is pleased to present this report to the government," said Konrad von Finckenstein, Q.C., Chairman of the CRTC. "It is our hope that the recommendations we have put forward will assist in resolving the issues surrounding the CTF. The Fund plays a vital role in fostering a strong domestic television industry through its support of independent productions. Its effective operation is vital to the creation of high-quality, Canadian-made programs."
In February 2008, the Minister of Canadian Heritage announced that the government had asked the CRTC to prepare a report and make recommendations on the Canadian Television Fund, in accordance with section 15 of the Broadcasting Act.
This request followed a public hearing on the CTF held by the Commission from February 4 to 8, 2008, at which interested parties expressed their views. The Commission had previously created a Task Force to provide a detailed analysis of the issues concerning the funding of Canadian programming and the CTF's governance.
Key recommendations
In its report, the CRTC recommends that:
- The CTF's funding be split into private- and public-sector streams. The private-sector stream would support the production of commercially successful programming and be accessed by private commercial broadcasters. The public-sector stream would be set aside for the Canadian Broadcasting Corporation, educational broadcasters and other not-for-profit broadcasters.
- Two separate Boards of Directors be established, with one having oversight of the private-sector funding stream and the other being responsible for the public-sector funding stream. However, both streams should share the day-to-day administrative services of the CTF to reduce operating costs.
- Increased emphasis be placed on audience success as a criterion for access to the new private-sector funding stream.
- The CTF maintain its current practice of funding productions that score 10 out of 10 points on the scale developed by the Canadian Audio-Visual Certification Office (the CAVCO scale).
- The proposals by two companies that distribute broadcasting services to opt out of their contributions to the CTF, as required by the Broadcasting Distribution Regulations, be rejected.
- The CTF establish a new funding stream to support the production of Canadian programs for broadcast on new media platforms.
Actions by the CRTC
While the majority of the report's recommendations require action by the CTF Board and other government entities, the Commission is able to act in certain areas. Among other things, the Commission will amend:
- its policy to allow tangible benefits stemming from ownership transactions in the broadcasting industry to be directed to the CTF, and
- the Broadcasting Distribution Regulations to make mandatory the monthly contributions of companies that distribute broadcasting services, once the Department of Canadian Heritage has resolved the major issues.
CRTC Report to the Minister of Canadian Heritage on the Canadian Television Fund [.htm] [.pdf, 567 KB]
The CRTC
The CRTC is an independent, public authority that regulates and supervises broadcasting and telecommunications in Canada.
Reference documents:
- Broadcasting Notice of Public Hearing CRTC 2007-15 [.htm] [.pdf, 118 KB]
- News release, "The Task Force releases its report on the Canadian Television Fund," June 29, 2007
- Report of the Task Force on the Canadian Television Fund [.htm] [.pdf, 226 KB]
- Broadcasting Public Notice CRTC 2007-70 [.htm] [.pdf, 113 KB]
- News release, "The CRTC Creates a Task Force on the Canadian Television Fund," February 20, 2007
- Statement by Konrad von Finckenstein, Chairman of the CRTC [Canadian Television Fund], February 13, 2007
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Backgrounder on the CRTC report on the Canadian Television Fund
Key recommendations
a) Funding streams
The Commission recommends that the Canadian Television Fund (CTF) split its funding into two distinct streams: a private-sector stream and a public-sector stream.
The private-sector stream would be funded by the contributions of companies that distribute broadcasting services – such as cable and satellite companies – and would support the creation of programming with broad popular appeal to Canadian audiences. Private commercial broadcasters would be granted access to this market-oriented stream.
The public-sector stream would rely on contributions provided by the Department of Canadian Heritage and would primarily support the creation of high-quality programming that furthers the cultural objectives set out in the Broadcasting Act. The Canadian Broadcasting Corporation (CBC), educational broadcasters and other not-for-profit broadcasters would have access to this stream.
The Contribution Agreement developed between the Department of Canadian Heritage and the CTF currently requires that the CBC receive 37 per cent of all allocations. As a result, the proposed public-sector stream could experience a shortfall in its allocations to other public and not-for-profit broadcasters.
In order to avoid such a situation, the Commission proposes that the Aboriginal Peoples Television Network receive one-third of its CTF funds from the public-sector stream to support its Aboriginal-language programming. The remaining two-thirds would be drawn from the private-sector stream to support its English- and French-language programming that is eligible for CTF financing.
In addition, the Commission recommends that TV5 and Vision TV be permitted to make a one-time decision as to which stream they wish to access. This would grant them the flexibility to choose the stream that best suits their interests and programming plans, given that both services have characteristics that fall into either the public or private stream.
b) Governance structure
If two streams with distinct funding objectives are established, the Commission further recommends that the CTF adopt two separate Boards of Directors. This modified governance structure would provide for greater efficiency and more transparency in the management of private- and public-sector funds. However, the Commission proposes that both streams share the day-to-day administrative services of the CTF to reduce operating costs.
The Board responsible for the private-sector funding stream would number 11 members, consisting of the following:
- six members from the largest companies that distribute broadcasting services in English- and French-language markets
- one member from the Canadian Cable Systems Alliance
- two broadcasters (one English-language and one French-language), and
- two independent producers (one English-language and one French-language).
The procedure for nominating these Board members will be determined by the CTF.
The structure of the public-sector Board would best be determined by the Department of Canadian Heritage. However, the Commission considers that it should include independent members, independent producers and members of the creative community.
c) Audience success
The CTF currently weighs several factors when deciding how to allocate funding to English- and French-language broadcasters, including: audience success, historic access, regional productions and above-average licence fees. Historic access is established by calculating a broadcaster's cumulative use of the CTF over the previous three years.
For the private-sector stream, the Commission recommends that the historic access criterion be completely phased out and replaced with an increased emphasis on audience success, which would apply to both English- and French-language broadcasters. Moreover, the Commission is of the view that the measurement of audience success should:
- incorporate a "hit factor" that takes into account the differing business models of conventional and specialty television
- ensure that original drama is adequately supported in the French-language market
- encourage the broadcast and promotion of original Canadian programs, as well as their scheduling to maximize audiences, and
- include all Canadian programs normally funded by the CTF.
d) CAVCO scale
The Commission recommends that the CTF maintain its current practice of funding productions that score 10 out of 10 on the scale developed by the Canadian Audio-Visual Certification Office (the CAVCO scale). The CTF's existing rules provide flexibility in this area by permitting exceptions for certain productions that achieve fewer than 10 points.
Productions assessed by CAVCO are awarded up to a maximum of 10 points, based on the number of Canadians serving in the following creative capacities:
- Director (2 points)
- Screenwriter (2 points)
- Lead Performer (1 point)
- Second Lead Performer (1 point)
- Production Designer (1 point)
- Director of Photography (1 point)
- Music Composer (1 point)
- Picture Editor (1 point)
e) Funding stream for new media content
The Commission recommends that the CTF establish a new funding stream to support the production of Canadian programs for broadcast on new media platforms. Rather than using a portion of current contributions, the funds for this stream should come entirely from new sources. These could include equity investments, benefits packages or dedicated government contributions. The CTF could also allow broadcasters to make use of their flexible broadcasting envelope to produce programming for new media.
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