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TRANSCRIPT OF PROCEEDINGS BEFORE
THE CANADIAN RADIO‑TELEVISION AND
TRANSCRIPTION DES AUDIENCES DEVANT
LE CONSEIL DE LA RADIODIFFUSION
ET DES TÉLÉCOMMUNICATIONS CANADIENNES
SUBJECT / SUJET:
Proceeding on the Canadian Television Fund (CTF)
Task Force Report /
Instance concernant le rapport du Groupe de travail
du Fonds canadien de télévision (CTF)
HELD AT: TENUE À:
Conference Centre Centre de conférences
Outaouais Room Salle Outaouais
140 Promenade du Portage 140, Promenade du Portage
Gatineau, Quebec Gatineau (Québec)
February 4, 2008 Le 4 février 2008
In order to meet the requirements of the Official Languages
Act, transcripts of proceedings before the Commission will be
bilingual as to their covers, the listing of the CRTC members
and staff attending the public hearings, and the Table of
However, the aforementioned publication is the recorded
verbatim transcript and, as such, is taped and transcribed in
either of the official languages, depending on the language
spoken by the participant at the public hearing.
Afin de rencontrer les exigences de la Loi sur les langues
officielles, les procès‑verbaux pour le Conseil seront
bilingues en ce qui a trait à la page couverture, la liste des
membres et du personnel du CRTC participant à l'audience
publique ainsi que la table des matières.
Toutefois, la publication susmentionnée est un compte rendu
textuel des délibérations et, en tant que tel, est enregistrée
et transcrite dans l'une ou l'autre des deux langues
officielles, compte tenu de la langue utilisée par le
participant à l'audience publique.
Canadian Radio‑television and
Conseil de la radiodiffusion et des
Transcript / Transcription
Proceeding on the Canadian Television Fund (CTF)
Task Force Report /
Instance concernant le rapport du Groupe de travail
du Fonds canadien de télévision (CTF)
BEFORE / DEVANT:
Rita Cugini Chairperson / Présidente
Michel Arpin Commissioner / Conseiller
Michel Morin Commissioner / Conseiller
ALSO PRESENT / AUSSI PRÉSENTS:
Jade Roy Secretary / Secretaire
Shirley Ann Farley Hearing Manager /
Gérante de l'audience
Shari Faisher Legal Counsel /
Bernard Montigny Conseillers juridiques
HELD AT: TENUE À:
Conference Centre Centre de conférences
Outaouais Room Salle Outaouais
140 Promenade du Portage 140, Promenade du Portage
Gatineau, Quebec Gatineau (Québec)
February 4, 2008 Le 4 février 2008
- iv -
TABLE DES MATIÈRES / TABLE OF CONTENTS
PAGE / PARA
PRESENTATION BY / PRÉSENTATION PAR:
Canadian Television Fund 6 / 37
CFTPA 102 / 572
ACTRA 165 / 851
Writers Guild of Canada 176 / 890
Directors Guild of Canada 192 / 963
Canadian Association of Broadcasters 243 / 1228
CBC/Radio-Canada 278 / 1379
Gatineau, Quebec / Gatineau (Québec)
‑‑‑ Upon commencing on Monday, February 4, 2008
at 0859 / L'audience débute le lundi 4 février 2008
LISTNUM 1 \l 11 THE SECRETARY: Can everybody be seated, please.
LISTNUM 1 \l 12 S'il vous plaît, prendre un siège.
LISTNUM 1 \l 13 THE SECRETARY: Can everybody take a seat, please.
LISTNUM 1 \l 14 THE CHAIRPERSON: Good morning everyone and welcome to this public hearing.
LISTNUM 1 \l 15 My name is Rita Cugini and I am the CRTC Regional Commissioner for Ontario and I will be presiding over this hearing.
LISTNUM 1 \l 16 Joining me on my Panel are my colleagues Michel Arpin, Vice‑Chairman of Broadcasting, and Michel Morin, National Commissioner.
LISTNUM 1 \l 17 The Commission team assisting us includes Hearing Manager Shirley Ann Farley, Shari Faisher and Bernard Montigny, Legal Counsel, and Jade Roy, Hearing Secretary. Please speak with Ms Roy if you have any questions with regard to hearing procedures.
LISTNUM 1 \l 18 The purpose of this hearing is twofold: to consider the Report prepared by the Task Force on the Canadian Television Fund and also the timing for the implementation of the recommendations.
LISTNUM 1 \l 19 In July 2007 the Task Force on the Canadian Television Fund released a Report on the funding of Canadian programming and the governance of the CTF.
LISTNUM 1 \l 110 Among its recommendations, the Task Force suggested that the CTF objectives should be broadened to include more support for Canadian television programs that succeed with Canadian audiences.
LISTNUM 1 \l 111 L'objectif principal de l'audience consiste à fournir aux parties une autre occasion d'exprimer leur point de vue sur les questions liées au FCT.
LISTNUM 1 \l 112 Les discussions de cette semaine, en plus du dossier contenant les mémoires reçus à ce jour et certaines observations finales, permettront au Conseil de disposer d'un dossier complet. Il pourra, ainsi, déterminer s'il doit appuyer, rejeter ou modifier les recommandations du groupe de travail.
LISTNUM 1 \l 113 Each one of the recommendations is open for discussion at this hearing, however, the Panel is particularly interested in hearing views on the following questions.
LISTNUM 1 \l 114 What measurement tool should the CTF use to evaluate audience success?
LISTNUM 1 \l 115 What measures, if any, should the CTF take in order to best adapt a more market‑based funding stream to the particulars of the French language market?
LISTNUM 1 \l 116 What would be the best ways to maximize input from the independent production sector?
LISTNUM 1 \l 117 What other sources should the Commission consider in order to increase the CTF's funding?
LISTNUM 1 \l 118 What measures should the CTF take to ensure appropriate support for programming licensed by educational broadcasters?
LISTNUM 1 \l 119 And, how should the CTF manage the special initiatives identified in the contribution agreement with the Department of Canadian Heritage?
LISTNUM 1 \l 120 À la fin de l'audience, le Conseil acceptera des observations supplémentaires sur les sujets que le comité a indiqués. Les parties ont jusqu'au 18 février pour présenter leurs observations écrites finales, lesquelles ne doivent pas excéder 10 pages.
LISTNUM 1 \l 121 Finally, a note on the context in which the Commission will be making its decisions regarding the CTF and the Task Force Report.
LISTNUM 1 \l 122 We fully recognize that the Commission may only implement the Task Force's recommendations that are under its purview while others may require action by other government entities. Let me reassure that this reality will be taken into account during our deliberations.
LISTNUM 1 \l 123 Furthermore, in light of the planning and funding cycle of independent productions, the implementation of any recommendation needs to take into account and support the importance of continued funding for the CTF. We will ensure that the outcome of this hearing does nothing to interfere with the flow of funds.
LISTNUM 1 \l 124 I will now invite the Hearing Secretary, Jade Roy, to explain the procedures we will be following.
LISTNUM 1 \l 125 Madam Secretary.
LISTNUM 1 \l 126 LA SECRÉTAIRE : Merci, Madame la Présidente, et bonjour à tous.
LISTNUM 1 \l 127 I would ask that when you are in the hearing room to please turn off your cell phones, beepers and BlackBerrys. We would appreciate your cooperation in this regard throughout the hearing.
LISTNUM 1 \l 128 Please note that the Commission Members may ask questions in either English or French. You can obtain an interpretation receiver from the Commissionaire sitting at the entrance of the conference centre.
LISTNUM 1 \l 129 Le service d'interprétation simultanée est disponible durant cette audience. L'interprétation anglaise se trouve au canal 7, et l'interprétation française au canal 8.
LISTNUM 1 \l 130 We expect the hearing to take one week. We will begin each morning at 9:00 a.m. and adjourn each afternoon at approximately 5:00 p.m.
LISTNUM 1 \l 131 We will take one hour for lunch and a break in the morning and in the afternoon.
LISTNUM 1 \l 132 Pendant toute la durée de l'audience, vous pourrez consulter les documents qui font partie du dossier public pour cette audience dans la salle d'examen qui se trouve dans la Salle Papineau, située à l'extérieur de la salle d'audience, à votre droite.
LISTNUM 1 \l 133 There is a verbatim transcript of this hearing being taken by the court reporter sitting at the table on my right. If you have any questions on how to obtain all or part of this transcript, please approach the court reporter during a break.
LISTNUM 1 \l 134 We will now proceed with the presentations in the Order of Appearance set out in the Agenda.
LISTNUM 1 \l 135 We will now hear Canadian Television Fund. Appearing for CTF is Douglas Barrett who will please introduce his colleagues.
LISTNUM 1 \l 136 Thank you.
PRESENTATION / PRÉSENTATION
LISTNUM 1 \l 137 MR. BARRETT: Thank you very much.
LISTNUM 1 \l 138 Bonjour, good morning, Madam Chair, Commissioners and Commission staff.
LISTNUM 1 \l 139 My name is Douglas Barrett and I am the Chair of the Board of the Canadian Television Fund.
LISTNUM 1 \l 140 I'd like to begin by introducing the members of our panel, and just for greater clarity I'd like to indicate this is our A panel.
LISTNUM 1 \l 141 MR. BARRETT: To my immediate right is Valerie Creighton, President of the CTF. À sa droite, nous avons Stéphane Cardin, Vice‑président, Politiques et relations avec l'industrie. To his right is Kathy Corcoran, Director of Research.
LISTNUM 1 \l 142 Seated to my immediate left is Michel Carter, membre indépendant du Conseil et Président du Comité des finances et de la vérification et Trésorier, et, as of yesterday, a grandfather for the fourth time and next month a grandfather for the fifth time. So, congratulations to Michel.
LISTNUM 1 \l 143 Behind me on the far right is Sandra Collins, Vice‑President of Corporate Services and Administration. À sa gauche est Natalie Clermont, Directrice de la Gestion des programmes. To her left is Mary‑Anne Haney ‑‑ sorry, is Dave Forget, Director of the Television Business Unit at Television Canada and, finally, Mary‑Anne Haney, Corporate Secretary.
LISTNUM 1 \l 144 I'd also like to introduce a number of our Board members who have come today to join us and, if I may, I'd like to ask them to stand as I introduce them.
LISTNUM 1 \l 145 Alison Clayton, President of Backroom Strategies here in Ottawa; Claire Samson, Présidente/Directrice générale, l'APFTQ; Judith Brosseau, Vice‑présidente principale, Programmation et Communications, Canal D, Historia, Service Plus des chaînes Astral Média; Corrie Coe, Director, Programming Administration, CTV; Marcela Kadanka, Senior Director, TV Arts & Entertainment, CBC; Eileen Sarkar, Research Associate, Centre for Governance, University of Ottawa; Robin Mirsky, Executive Director, Rogers Group of Funds; and finally, Andrew Eddy, Vice‑President, Content Distribution and Strategy, CORUS Entertainment.
LISTNUM 1 \l 146 Thank you all very much.
LISTNUM 1 \l 147 I'll begin now.
LISTNUM 1 \l 148 The story of the Canadian Television Fund is one that evolves over 12 years during which the Fund has contributed to the creation of over 25,000 hours of Canadian programming, all of it seen by Canadians in prime time.
LISTNUM 1 \l 149 Every dollar invested by the CTF triggers $3.20 in production volume for the Canadian television industry. CTF‑supported productions have cultivated over 22,000 jobs in television production. That's half the jobs in the television industry.
LISTNUM 1 \l 150 Aujourd'hui, nous sommes ici pour démontrer que le Fonds canadien de télévision est déjà un organisme axé sur le marché, et que, fort de sa grande expérience en matière d'élaboration de politiques et d'allocation de financement, il est un instrument efficace qui permet au CRTC, aux entreprises de distribution de radiodiffusion, et au gouvernement du Canada de réaliser leur objectif commun.
LISTNUM 1 \l 151 Our presentation today will focus on five key areas:
LISTNUM 1 \l 152 ‑ one, the tremendous success achieved by CTF‑funded shows over the years;
LISTNUM 1 \l 153 ‑ two, the evolution of the CTF over the years;
LISTNUM 1 \l 154 ‑ three, the market‑driven approach of the broadcaster performance envelope system;
LISTNUM 1 \l 155 ‑ four, our governance and accountability systems;
LISTNUM 1 \l 156 ‑ and finally, our comments on some questions posed by the Task Force.
LISTNUM 1 \l 157 MS CREIGHTON: From St. John's to Victoria, Canadian television screens are alight every day with programming stamped with the CTF logo, and make no mistake, Canadians are watching.
LISTNUM 1 \l 158 These programs are not only popular among Canadian audiences from two to 90, they are sold around the world and have garnered critical acclaim both at home and abroad.
LISTNUM 1 \l 159 In today's rapidly fragmenting industry, competition for eyeballs is fierce and new media alternatives are growing. The choices available to viewers are seemingly endless as Canadians now have access to 662 television services.
LISTNUM 1 \l 160 Now, considering that Hockey Night in Canada typically delivers close to 1.5‑million viewers and American shows such as "House" and "Grey's Anatomy" with their considerable production and promotion budgets deliver around 2 million viewers in Canada, then what do we consider a success for Canadian programming?
LISTNUM 1 \l 161 Well, within this competitive environment, CTF‑funded programs like "The Rick Mercer Report" and "Little Mosque On The Prairie" have regularly attained audiences over a million on conventional networks.
LISTNUM 1 \l 162 New programs such as "The Border," "Sophie," "Heartland" and "The Guard" are attracting viewers in the 500,000 to 800,000 range.
LISTNUM 1 \l 163 "Degrassi: The Next Generation" and "This Hour Has 22 Minutes" deliver more than half a million viewers per episode and over the course of last season they were each watched by over six and a half million Canadians.
LISTNUM 1 \l 164 And "Trailer Park Boys" generally attains audiences of over 150,000 viewers per telecast on Showcase, with three and a half million Canadian viewers throughout last season, a huge success for the specialty network.
LISTNUM 1 \l 165 M. CARDIN : Les trois premières épisodes de la nouvelle série, " Les Lavigueur, la vraie histoire, " ont attiré plus de deux millions de téléspectateurs en moyenne.
LISTNUM 1 \l 166 Depuis de nombreuses années, le succès des émissions financées par le FCT est indéniable dans le marché francophone. Considérant que l'auditoire francophone représente le tiers de l'auditoire anglophone, il est remarquable de constater que l'écoute des émissions à succès du marché francophone équivaut à l'écoute des émissions américaines les plus populaires.
LISTNUM 1 \l 167 La saison dernière, le FCT a appuyé non moins de neuf des 20 émissions préférées du marché francophone. " Les Boys ", " Annie et ses hommes " et " Destinées " ont toutes attiré entre un million et un million et demi de téléspectateurs.
LISTNUM 1 \l 168 MS CREIGHTON: CTF‑funded children's programming, animation in particular, originating from both language markets is a truly spectacular Canadian success story. More than a quarter of the viewing to children's and youth programming in Canada is to programs funded by the CTF.
LISTNUM 1 \l 169 In the English market, among the top 30 Canadian programs that appeal to children aged two to 11, half have been supported by the CTF, including "Toopy and Binoo," "Franklin," "Captain Flamingo" and "This Is Emily Yeung," which was watched by more than 48 per cent of English‑language Canadian kids aged two to seven.
LISTNUM 1 \l 170 Documentary programs generating from 800,000 to well over a million viewers include "Libérée : Le choix de Natalie Simard," "Ice Storm: The Salé and Pelletier Affair," and "Anne Murray: The Music of My Life."
LISTNUM 1 \l 171 Variety and performing arts programs generating in excess of half a million viewers include the "Two‑four Anniversary of Bob and Doug MacKenzie," "Quest for the West" and Stuart McLean's "Vinyl Café Christmas."
LISTNUM 1 \l 172 Now, when you consider the size of our market and the vast choices available, Canadians are watching CTF‑funded programs and all of these culturally and commercially successful shows directly achieve a number of objectives of the Broadcasting Act, while they would not exist without the vital support provided through CTF funding.
LISTNUM 1 \l 173 And internationally from France to Finland, from Singapore to South Korea, CTF‑funded programs are gaining wide acclaim.
LISTNUM 1 \l 174 "Da Vinci's Inquest" is currently in its third year of U.S. syndication, drawing over 2 million viewers each week.
LISTNUM 1 \l 175 "Degrassi: The Next Generation" has aired in over 150 countries and is now syndicated in the U.S.
LISTNUM 1 \l 176 "Les hauts et les bas de Sophie Paquin" et "Minuit, le soir" were recently sold to France's top‑rated public broadcaster, France 2, for broadcast in prime time.
LISTNUM 1 \l 177 The format "François en Série" was sold to NBC Universal, while that of "Les Invincibles" was just sold to Arte in France and Germany.
LISTNUM 1 \l 178 "ReGenesis" airs in over 175 countries and was launched in U.S. syndication on over 190 stations this fall.
LISTNUM 1 \l 179 And great news last week about the sale of "Flashpoint" to CBS, "The Listener" to NBC, "Sophie" to ABC Family, and the competition for "The Border" between ABC and CBS means that the CTF‑supported programs will air on three of the largest conventional U.S. networks. This is nothing short of phenomenal.
LISTNUM 1 \l 180 Our CTF Emmy winners include "The Newsroom," "Dark Oracle" and "Shake Hands With The Devil: The Journey of Roméo Dallaire."
LISTNUM 1 \l 181 CTF‑supported programs are shot in cities and communities across the country from Vancouver to Halifax and we're very proud of the remarkable successes that our productions and the industry have achieved over the past 12 years.
LISTNUM 1 \l 182 M. CARDIN : L'organisme qu'est devenu le Fonds canadien de télévision est né de la volonté du CRTC d'encourager la production et la diffusion de meilleures émissions de télévision canadienne. L'augmentation des tarifs du câble approuvée par le CRTC afin d'appuyer les dépenses d'investissement de nombreuses EDR devait prendre fin en 1993.
LISTNUM 1 \l 183 À la suite d'une proposition volontaire des câblodistributeurs qui a reçu un soutien considérable de l'industrie, le Conseil a suspendu la mise en oeuvre des réductions de tarifs et a plutôt choisi d'allouer 50 pour cent de ce montant au nouveau Fonds de production des câblodistributeurs, qui est devenu le Fonds canadien de télévision.
LISTNUM 1 \l 184 Le Conseil a clairement établi les raisons pour lesquelles il a créé le Fonds, principalement pour appuyer la création d'émissions concurrentielles sur le marché canadien et pour accroître la diffusion de genre d'émissions sous‑représentées.
LISTNUM 1 \l 185 Le CRTC reconnaît les défis uniques auxquels l'industrie canadienne de la production et de la télédiffusion doit faire face, ainsi que les obstacles à une présence canadienne significative sur des ondes dominées par un contenu américain.
LISTNUM 1 \l 186 Le Conseil a précisé les critères d'admissibilité du Fonds, ainsi que son mode d'opération. Il a établi les fondements des critères actuels d'admissibilité du Fonds, comprenant les exigences relatives au contenu canadien, au genre d'émissions sous‑représentées, à la diffusion aux heures de grande écoute et au versement de droit de diffusion minimum pour déclencher le financement du FCT.
LISTNUM 1 \l 187 Le financement du Fonds provient de deux sources distinctes : une contribution directe du ministère du Patrimoine canadien, à laquelle s'ajoute celle des EDR en vertu des Règlements du CRTC.
LISTNUM 1 \l 188 En 1996, le Conseil a transféré la supervision du Fonds au ministère du Patrimoine canadien. Depuis, notre fonctionnement est régi par un accord de contribution avec le ministère, qui requiert que nos deux sources de financement soient administrées selon les mêmes objectifs.
LISTNUM 1 \l 189 MS CORCORAN: The CTF has travelled a long and storied past since 1994 continually adapting its programs to respond to the changing demands and challenges faced by the complex and diverse industry that is Canadian television.
LISTNUM 1 \l 190 We have sharpened our definition of Canadian content through the development of four essential requirements and created benchmarks to ensure that what we support is made by Canadians for Canadians.
LISTNUM 1 \l 191 We have developed an asymmetrical approach to the English and French markets and recognize both a consistent success and market penetration of French language CTF‑supported productions.
LISTNUM 1 \l 192 We uphold the importance of creative diversity on Canadian TV. The Commission when it created the CTF in 1994 stipulated that two‑thirds of funding be directed to independent producers and we have sustained this principle throughout our history.
LISTNUM 1 \l 193 We transformed the operations of the organization and welcome the significant efficiencies gained as a result of outsourcing the administration of the CTF program to the Television Business Unit at Telefilm Canada.
LISTNUM 1 \l 194 We know that the arts in general, and television in particular, and increasingly digital media are the nation's reflecting pool and we strive to ensure that when Canadians look into that pool they see a part of themselves both startling and familiar.
LISTNUM 1 \l 195 We balance both cultural and economic objectives and provide targeted support to particular sectors of the industry, including French language projects outside of Quebec, aboriginal language projects, development projects and versioning. These initiatives fulfil several aspects of our mandate but the primary vehicle of CTF funding is the broadcaster performance envelope stream.
LISTNUM 1 \l 196 The CTF has evolved through a series of funding delivery mechanisms and we have arrived at one that works, the broadcaster performance envelope system initiated just four years ago with English drama being incorporated two years later. 94 percent of our combined resources are distributed through this mechanism. About $240 million was delivered to eligible projects by envelopes last year including the fixed portion allocated to the CBC Radio Canada.
LISTNUM 1 \l 197 There are several important components of the BPE system. As the name implies, it operates through envelopes or allocations of funding made to Canadian broadcasters. These envelopes are not payments to broadcasters. Rather, they allow broadcasters to allocate CTF funds to projects on behalf of the CTF subject to eligibility requirements and minimum broadcaster licence fee thresholds. Once a broadcaster allocates funds in its envelope to a project it believes will appeal to Canadian audiences, the producer of that project officially applies to the CTF for that funding. The CTF determines if the project is eligible and then enters into a contract directly with that producer.
LISTNUM 1 \l 198 Broadcaster envelopes are calculated on the basis of four performance factors and broadcasters compete for those funds within each of these calculation factors.
LISTNUM 1 \l 199 The audience success factor carries the greatest weight in English and significant weight in French and is derived from the total hours tuned that each broadcaster achieves over the course of one broadcast year to programs supported by the CTF.
LISTNUM 1 \l 1100 The regional licensing factor gives credit to broadcasters who licence in the regions.
LISTNUM 1 \l 1101 The above average licensing factor gives credit to broadcasters who pay licence fees above historical averages.
LISTNUM 1 \l 1102 And the historic access factor is derived based on multi‑year levels of CTF funds that each broadcaster's licence fees triggered, thus modulating the variations and envelope allocations from year to year.
LISTNUM 1 \l 1103 Envelopes are recalculated each fiscal year providing a regular rebalancing of the system except for CBC/Radio‑Canada which receives 37 percent of the total BPE allocation of the condition of the contribution agreement.
LISTNUM 1 \l 1104 The benefits of the BPE system are significant.
LISTNUM 1 \l 1105 First, the envelope system is a market‑oriented funding mechanism with the broadcaster acting, in essence, as the proxy for Canadian audiences. The CTF does not choose individual projects for funding. It is the broadcaster whose business it is to closely track ratings and appeal to the Canadian market who makes that choice. This is as close to the market as one can get in programming choices.
LISTNUM 1 \l 1106 Second, the envelope system promotes competition and rewards success. Due to the weight of the audience success factor the CTF channels its funds through broadcasters with a proven track record in generating audiences to Canadian shows. When a broadcaster airs the CTF eligible show that does well in ratings, that success is reflected in envelope allocations in the following year. This provides an incentive for broadcasters to promote CTF‑funded shows and increase their audience share.
LISTNUM 1 \l 1107 Third, the envelope system facilitates better planning for the industry by informing broadcasters how much they can commit to projects in a given year which facilitates their planning cycle, leading to greater stability for broadcasters and producers.
LISTNUM 1 \l 1108 Fourth, the envelope system virtually eliminates the issue of over subscription for the CTF. Producers are required to have a broadcast licence before they submit their application. Time and effort is not made to apply to the CTF for projects that have no chance of being supported.
LISTNUM 1 \l 1109 Finally, as a requirement of funding the broadcaster must commit to airing the program and must do so doing primetime. This ensures that economically‑viable programs are supported and that CTF‑funded shows are seen by Canadians when Canadians are watching.
LISTNUM 1 \l 1110 The CTF has designed a system that responds to the amount of resources available to it. The envelope system is still evolving and CTF staff and board members continue to fine tune the elements of the program to best meet the CTF's multiple objectives.
LISTNUM 1 \l 1111 In particular, the manner in which audience success is defined, measured and rewarded remains a topic of study and debate. We are cognizant of the limitations in the industry's audience measurement systems to serve the CTF's audience success measurement requirements and we continue to seek consensus and solutions to these issues.
LISTNUM 1 \l 1112 MR. CARTER: The CTF continues to refine and enhance its accountability systems. The CTF is managed by professional staff. The board has the responsibility to ensure that management conducts the business and affairs of the fund in accordance with its objectives. Policies and procedures are in place to guide the day‑to‑day management of the fund.
LISTNUM 1 \l 1113 As per the terms of the contribution agreement, the CTF regularly submits financial and program activity reports to the Department of Canadian Heritage. The CTF is audited annually by KPMG, an independent accounting firm. Our annual audited statements are provided to the department and are published in the CTF annual report which is available on our website along with other CTF publications.
LISTNUM 1 \l 1114 MS CREIGHTON: The CTF's project analysis procedures are a cornerstone to providing fair results and sound business practices. Although broadcasters decide which projects they will allot a portion in their envelope, the CTF must confirm their eligibility for funding. This is accomplished by business analysts at the Television Business Unit at Telefilm who review project creative materials, broadcast licences, corporate documents, financing structures and other documentation to ensure that eligibility criteria are met.
LISTNUM 1 \l 1115 The CTF has instituted procedures to ensure its decisions are made fairly and with full opportunity for applicant producers to participate. This includes both internal review and appeal procedures.
LISTNUM 1 \l 1116 MR. BARRETT: Now, a few words on governance.
LISTNUM 1 \l 1117 Since the fund was established there has been a steady stream of annual improvements to the governance practices and procedures. Some of these came from suggestions made by the Department of Canadian Heritage, some from the Auditor General's Report on the Cultural Industries and some from an outside consulting firm.
LISTNUM 1 \l 1118 In recent years change came largely at the direction of the fund's own independent committee.
LISTNUM 1 \l 1119 Le conseil du FCT est conscient de sa responsabilité fiduciaire. Il a, donc, déjà adopté des pratiques qui garantissent la gestion sécuritaire de ses ressources financières. Il a aussi établi des procédures visant à réduire les conflits d'intérêt au sein du conseil. Par conséquent, les pratiques de gouvernance du FCT sont désormais aussi complètes et sophistiquées que celles des sociétés publiques bien gérées.
LISTNUM 1 \l 1120 As governance consulting firm, Renaud Foster, stated in a report dated June 2006:
"We are of the view that the CTF has created a detailed and effective framework for handling conflicts as they arise. In this regard CTF's conflict guidelines go well beyond what is typically seen in most private sector settings and they are also more detailed than those adopted by many boards with stakeholder nominees." (As read)
LISTNUM 1 \l 1121 MR. BARRETT: Since the advent of the independent committee in 2003, in itself an innovative development, it has completed a series of work plans and published detailed annual reports on its activities.
LISTNUM 1 \l 1122 For instance, during the past year the committee has prepared a board charter, defined the roles and responsibilities of the chair and president and developed an internal communications protocol. These documents have now been finalized, provided to the Commission and are on the public record of this proceeding.
LISTNUM 1 \l 1123 Perhaps the most important recent task of the committee has been to address the issue and question of succession planning for the board. As my term of office is up in June this is a timely topic.
LISTNUM 1 \l 1124 I would like to ask fellow independent committee member, Michel Carter, to summarize developments.
LISTNUM 1 \l 1125 M. CARTER : En juin dernier, le groupe de travail a recommandé la mise en place d'un comité des candidatures dont le mandat serait d'organiser le processus de nomination du président du conseil d'administration, des officiers, ainsi que des membres du conseil. Le groupe de travail a également recommandé que les représentants des EDR participent au comité.
LISTNUM 1 \l 1126 Le comité indépendant a, d'abord, été d'avis que le comité des candidatures devait être entièrement composé d'administrateurs indépendants. Toutefois, après réflexion, le conseil d'administration a mis au point une structure de comité comprenant trois membres indépendants, un représentant des câblodistributeurs et un représentant des SRD. Le conseil a créé ce comité, qui a déjà tenu sa première réunion.
LISTNUM 1 \l 1127 La première tâche du comité sera de confirmer auprès du conseil son mandat, qui consistera à recommander des candidatures pour le poste de président du conseil, à gérer le processus de succession, ainsi qu'à recommander les candidats qui siégeront au comité exécutif et au comité des finances et de la vérification. Nous espérons compléter ces travaux à temps pour l'assemblée générale annuelle du Fonds, qui aura lieu au mois de juin prochain.
LISTNUM 1 \l 1128 Doug.
LISTNUM 1 \l 1129 MR. BARRETT: As the task force pointed out, the dissolution of the CCTA has necessitated the creation of a new organization to represent the interests of cable BDUs on the fund's board. We were pleased to provide the Commission with a letter announcing the formation of the new Cable Coalition for Canadian Expression. While the CCCE's main role is to nominate BDU directors to our board it has also offered to engage in discussions to develop a mutually acceptable reporting and accountability mechanism for the CTF towards the BDU community. This opportunity to work with the coalition is thoroughly welcomed by us.
LISTNUM 1 \l 1130 In addition to this development we want to report that the board has approved other governance improvements for implementation at the forthcoming June AGM. These include removing the chair's standalone board seat, along with that of CAFDE and replacing them with the second seat for the DTH industry and one for a representative of organization of Canada's creative guilds and unions.
LISTNUM 1 \l 1131 We believe strongly that it is time these voices were heard at our table. We feel they will add value and expertise to the board debates and reflect an appropriate rebalancing of the stakeholder interests included in the board's structure.
LISTNUM 1 \l 1132 Les voix des intervenants et celles des indépendants sont toutes aussi importantes au sein de nos débats. Ainsi, nous planifions que notre conseil sera désormais composé d'au moins un tiers des membres indépendants d'intérêts commerciaux ou d'intérêts liés à leur statut d'intervenant. Nous ne croyons pas nécessaire que le conseil soit constitué d'une majorité d'administrateurs indépendants car nous fonctionnons selon un principe de double majorité qui garantit que les administrateurs indépendants approuvent chaque décision importante relative aux finances ou aux politiques.
LISTNUM 1 \l 1133 Before I conclude on governance let me address one particularly thorny issue head on. In its report the task force recommended the removal of producers from the fund's board of directors. This controversial proposal has been extensively debated both within and outside the Fund and we are sure you will hear much on it from others this week. Let me give you the Fund's view and, before I do so, let me assure you that this is the unanimous view of all of the independent directors on the board and has also been approved by the stakeholder board members, including both private and public broadcasters and current representatives of the cable industry.
LISTNUM 1 \l 1134 The principle job of the board, apart from its statutory and legal duties, is to debate and approve each year the program guidelines of the Fund, to build and maintain a funding system that is reasonably automatic and accessible to its users, fair and equitable, balanced and transparent and, finally, administratively efficient is an extraordinarily complex task.
LISTNUM 1 \l 1135 The funding system, as it stands today, has evolved a great deal over the years. It is not perfect, but it is steadily improving. Most importantly, it bears the impress of every ounce of expertise that each director brings to the table. And it bears, as well, the impress of the debate that occurs each year among the stakeholder groups on the board, the aggressive search for the best possible solution in many many challenging and complex circumstances
LISTNUM 1 \l 1136 If you take away any voice from that debate, producer, private or public broadcaster or BDU, you undermine the result. The entire Board and, particularly, the independent committee is strongly of the view that without these voices and this expertise the ability of the Board to do its job in a fair, effective and efficient way would be substantially compromised.
LISTNUM 1 \l 1137 M. CARDIN : Bien que nous ayons beaucoup appris au cours des années, nous savons que nous pouvons toujours faire mieux. Le FCT s'engage à continuer de s'adapter au même rythme que l'industrie.
LISTNUM 1 \l 1138 Nous appuyons certaines des recommandations du groupe de travail. Certaines ont déjà été mises en oeuvre, et d'autres sont présentement à l'étude. Par exemple, le FCT travaille actuellement à l'élaboration d'un programme pilote visant à appuyer la création de contenu pour les nouveaux médias, et ce, dans notre cadre de réglementation actuelle. Des principes directeurs seront publiés au cours de l'exercice financier 2008‑2009. Le FCT souhaite rendre cette initiative permanente dans la mesure où de nouvelles sources de revenu devenaient disponibles afin de financer adéquatement cette initiative.
LISTNUM 1 \l 1139 Ensuite, le FCT a mis en oeuvre une stratégie de communication qui a pour but d'améliorer sa visibilité. Récemment, nous avons lancé notre nouveau site web. Nous avons aussi amélioré notre rapport annuel et notre rapport aux intervenants, et nous diffusons actuellement des messages d'intérêt public qui rappellent aux Canadiens que de nombreuses émissions canadiennes populaires existent grâce au soutien du FCT.
LISTNUM 1 \l 1140 De plus, dans les principes directeurs 2008‑2009, le FCT a augmenté sa contribution maximale aux séries dramatiques renouvelées de langue anglaise à budget élevé afin d'encourager la production d'un plus grand nombre d'épisodes d'émissions populaires auprès des auditoires. Par le biais de ce mécanisme, nous espérons accroître le succès commercial des émissions appuyées par le FCT.
LISTNUM 1 \l 1141 MS CREIGHTON: Other recommendations in the report are a matter of concern to us. The task force recommended that the CTF be split into two streams along the lines of its two funding sources, creating one public sector fund and one private sector fund.
LISTNUM 1 \l 1142 Prior to the transition the CTF administered two streams of funding, the Licence Fee Program and the Equity Investment Program, through T'l'film Canada. This dual‑stream model was merged into a single stream to realize operational efficiencies and we believe a single stream can continue to support both cultural and commercial objectives while maintaining this efficiency for applicants.
LISTNUM 1 \l 1143 "Little Mosque on the Prairie" and "Les hauts et les bas de Sophie Paquin" are examples of productions that demonstrate that the separation of cultural and commercial is often an arbitrary distinction; both reflect Canadian stories, both are successful with audiences.
LISTNUM 1 \l 1144 If we were to implement the task force's proposed models would these shows be cultural or market driven? Would they be funded from both streams, requiring producers to once again submit two applications, doubling administrative requirements? And if these shows are not eligible for both streams, then who would decide which category they fall under and why? And where would the CBC Radio Canada be placed within this structure?
LISTNUM 1 \l 1145 Many CTF‑supported shows demonstrate that a single‑stream fund can meet the objectives of both cultural and commercial success.
LISTNUM 1 \l 1146 MR. CARDIN: While we fully support the task force's recommendation to require all BDUs to submit their contributions on a monthly basis, as this would ensure greater stability for both the CTF and the industry as a whole, we do not believe the Commission should enshrine objectives for BDU contributions in the Regulations as per the task force report.
LISTNUM 1 \l 1147 As the Commission knows, amending regulations is not a simple matter and codifying these objectives would make it difficult to keep pace with changing market realities at a time when the industry is in need of flexibility.
LISTNUM 1 \l 1148 In addition, placing eligibility criteria directly under CRTC jurisdiction in this way could turn the Commission into an appeal body for disappointed applicants in cases where the CTF has determined that their project did not meet the regulated objectives.
LISTNUM 1 \l 1149 Environ 34 pour cent des fonds du FCT sont alloués aux producteurs sous forme de participation au capital. L'an dernier, ces investissements ont généré environ 8 millions de dollars de revenus pour le FCT.
LISTNUM 1 \l 1150 Le groupe de travail recommande que le rendement sur investissement ou le potentiel de rendement constitue un critère de financement. Il existe une dichotomie potentielle entre un objectif visant à récompenser le succès auprès des téléspectateurs canadiens et un autre visant à récompenser le rendement sur investissement. Dans le système actuel des enveloppes, les télédiffuseurs choisissent des projets susceptibles de plaire à leurs auditoires cibles au Canada. Comme toutes les ventes canadiennes sont généralement incluses dans la structure financière d'un projet, le producteur devra conclure des ententes sur les marchés étrangers pour réaliser un rendement significatif.
LISTNUM 1 \l 1151 Toutefois, puisque les émissions qui réussissent auprès des auditoires canadiens ne réussissent pas forcément à l'étranger, ces objectifs peuvent s'avérer contradictoires. Par ailleurs, les rendements sur investissement ne peuvent être mesurés précisément que de façon rétrospective, une fois les ventes étrangères concluent, soit plusieurs mois, voire plusieurs années après la diffusion initiale de l'émission au Canada. Cela constitue un autre obstacle à leur utilisation comme critère de financement.
LISTNUM 1 \l 1152 De plus, certains projets appuyés par le FCT qui ont réalisé des ventes internationales significatives, particulièrement aux États‑Unis, ont dû attendre plusieurs saisons avant de regrouper un nombre d'épisodes suffisant avant d'intéresser des acheteurs internationaux. Par exemple, "Da Vinci's Inquest" a été souscrit à la télévision américaine ou, selon l'expression anglaise, s'est retrouvé sur le marché de la syndication après six saisons, soit plus de 90 épisodes. L'utilisation du rendement sur investissement comme critère de financement introduirait un élément de spéculation dans le processus qui ne garantirait pas l'atteinte du rendement anticipé.
LISTNUM 1 \l 1153 MS CREIGHTON: In January 2007 the Minister of Canadian Heritage announced a two‑year renewal of the federal government's commitment to the CTF. The CTF entered into a contribution agreement with the Department through which we received approximately $120 million for the 2007/2008 year.
LISTNUM 1 \l 1154 The requirement to combine the Department and the BDU contributions and allocate them in accordance with program guidelines is a fundamental term of the contribution agreement. This agreement reflects Treasury Board terms and conditions, changes would require the involvement and approval of the Department of Canadian Heritage, Treasury Board and possibly other governmental authorities. The CTF has no control over the agendas or timetables of these authorities or the decisions that any of them might make.
LISTNUM 1 \l 1155 So in conclusion, the Canadian Television Fund is the largest funding agency in the country. Our role in the support of Canadian content on Canadian television is critical. We support projects that employ writers, actors, directors, designers, crew and producers. We balance the industry's cultural and market‑driven goals. Canadians are watching. And as we continue to grow and adapt, our job is to ensure that Canadians will see their stories, their perspectives and reflections of themselves when they turn on their TVs.
LISTNUM 1 \l 1156 Now, Madam Chair, we would like to take a look at what Canadians are watching and play for you a short two‑minute video.
LISTNUM 1 \l 1157 Please play the video.
‑‑‑ Video Presentation / Présentation vidéo
‑‑‑ Applause / Applaudissements
LISTNUM 1 \l 1158 MR. BARRETT: Thank you very much, Madam Chair. That concludes our presentation. We would be pleased to answer any questions you have.
LISTNUM 1 \l 1159 What we thought is that, for questions relating to board and governance‑related issues, I will answer the questions, and for matters relating to the operations of the Fund and the program guidelines and so on, Valerie would take the questions from you.
LISTNUM 1 \l 1160 THE CHAIRPERSON: Thank you, Mr. Barrett, Ms Creighton, and to you colleagues, welcome to these proceedings. I will begin the questioning this morning and both of my colleagues will have additional questions.
LISTNUM 1 \l 1161 I want to thank you for your detailed presentation. I am grateful that it answered some of my questions, not all of them however, so we will begin.
LISTNUM 1 \l 1162 I want to start with the broadcast performance envelopes, we will move onto the two streams of revenue issue, governance and then, finally, accountability. And, like I said, my colleagues will have additional questions and perhaps follow‑up questions to mine.
LISTNUM 1 \l 1163 One of the first things that I noticed in going through your documentation were the changes in the weight factors of the components that makeup the broadcast performance envelopes. Can you take us through what considerations were taken into account in making those changes? Some were increased, some were decreased.
LISTNUM 1 \l 1164 MS CREIGHTON: Yes. Annually, the Board has a process whereby they look at the results of the envelopes, and I will turn to Kathy in a moment for the details. So we do consider a number of factors over the year in terms of balancing the concerns and issues in both markets and what we have seen as a result of the envelopes working.
LISTNUM 1 \l 1165 So, Kathy, I will give you an opportunity to respond to those changes in factor weights.
LISTNUM 1 \l 1166 MS CORCORAN: Sure. I will start with the English factor weights. Basically, what we have seen over the four years of the envelopes is an increase in the audience success factor weight. It is currently at 40 per cent. In our first year of opening the envelopes the envelopes, in fact, were based on historic access. That was the manner in which we felt would be suit the industry from a stability point of view. Sort of changing the mechanism, this is what you have had in the past, roll into the new system, you know, start off on that level and then roll in the performance factors over time.
LISTNUM 1 \l 1167 In the second year we brought audience success in at 30 per cent and just this past year moved it up to 40 per cent. And I will take a moment to talk about the English drama envelope. English drama went to envelopes in 2006/2007 and in 2007/2008 we brought the audience success factor into that genre as well.
LISTNUM 1 \l 1168 So over time, we the board is trying to bring the more competitive components into the system and reduce the historic access component, which has acted as a stabilizer.
LISTNUM 1 \l 1169 On the French side, the story is pretty much the same, although in the French market there's less ‑‑ there's actually less concern about audience success because we do so well in that market.
LISTNUM 1 \l 1170 The other factors, above average licensing, of course, we want to encourage that, so that has increased over the years and regional licensing has increased.
LISTNUM 1 \l 1171 We've been able to increase some of these factors because in our early years we had a fifth factor which we no longer use called leverage. We've dropped leverage off to give room for the others.
LISTNUM 1 \l 1172 Leverage was used to reward broadcasters for licensing projects that required a smaller amount of CTF funds and the thinking there is that their licence fees would increase, and we figured that because that was so similar to above average licence fees we were sort of doubling up there, we dropped off leverage, moved the others up.
LISTNUM 1 \l 1173 THE CHAIRPERSON: Twice you mentioned the word stabilizer when referring to historical access. How did that act as a stabilizer for the system?
LISTNUM 1 \l 1174 MS CORCORAN: Historic access is based on how much broadcasters ‑‑ how much their eligible licence fees have triggered.
LISTNUM 1 \l 1175 So, if a broadcaster triggered, you know, "X" millions of dollars in the past, that was sort of rolled into the next year's allotment.
LISTNUM 1 \l 1176 And the reason why we have that is, if you've got significant swings in envelopes from year to year that impacts broadcaster planning cycles, you know, significantly, if your envelope drops in half, all of a sudden three series that you had that were doing very well become more difficult to afford.
LISTNUM 1 \l 1177 So, we try and give some measure of stability year‑over‑year to the envelopes to assist in the planning cycles for broadcasters and for producers as well.
LISTNUM 1 \l 1178 THE CHAIRPERSON: So, when you say swing, you are referring to both the broadcasters and the amounts in each of their envelopes?
LISTNUM 1 \l 1179 MS CORCORAN: Yes.
LISTNUM 1 \l 1180 THE CHAIRPERSON: Okay, thank you.
LISTNUM 1 \l 1181 So, obviously a big component of the broadcast envelope is the audience success factor, which you have increased to 40 per cent.
LISTNUM 1 \l 1182 Now, it is my understanding that the broadcasters submit the BBM numbers, the CTF subscribes to BBM numbers and fair to assume that you do a comparison between what the broadcasters submit and what you receive?
LISTNUM 1 \l 1183 MS CORCORAN: Absolutely. Broadcasters submit their total hours tuned to CTF‑funded programs to the CTF. Every single title that they claim credit for we check to make sure that it's a CTF‑funded title and the data that they submit we audit against published BBM Nielsen data.
LISTNUM 1 \l 1184 THE CHAIRPERSON: And should there be a discrepancy between your numbers and those submitted by the broadcasters; what is the process?
LISTNUM 1 \l 1185 MS CORCORAN: We work in concert with the broadcasters on this. When we have discrepancies, we call them up, we say, we're seeing different things. We discuss it, we resolve the issue.
LISTNUM 1 \l 1186 At the end of the day, if we can't resolve it, the CTF's decision holds.
LISTNUM 1 \l 1187 THE CHAIRPERSON: The CTF's decision holds?
LISTNUM 1 \l 1188 MS CORCORAN: Absolutely.
LISTNUM 1 \l 1189 THE CHAIRPERSON: Okay, thank you.
LISTNUM 1 \l 1190 A number of participants in these proceedings through their written submissions, so far, have obviously pointed out that there is a difference between the way in which over‑the‑air broadcasters and specialty broadcasters report their numbers, the former of course being on an average minute audience basis and specialty services on a cumulative audience basis.
LISTNUM 1 \l 1191 Do you take these differences into consideration?
LISTNUM 1 \l 1192 MS CORCORAN: Well, those differences are how they transact business, you know, sell commercial air time. The metric that we use in calculating audience success is uniform across all broadcasters, it's total hours tuned.
LISTNUM 1 \l 1193 So, it's total hours tuned for CTV, it's total hours tuned for Showcase and that puts them on an equal footing.
LISTNUM 1 \l 1194 THE CHAIRPERSON: Okay, thank you.
LISTNUM 1 \l 1195 MS CORCORAN: From a metric perspective.
LISTNUM 1 \l 1196 THE CHAIRPERSON: Do you track in any way increases of audiences year over year, either by broadcaster or by show for returning series?
LISTNUM 1 \l 1197 MS CORCORAN: We do for reporting purposes. In terms of, does it impact the allocations that broadcasters get? Basically we look at the big number, the total hours tuned that they submit and we've audited and it's compared with all other broadcasters, the share is determined and then the money is then worked out.
LISTNUM 1 \l 1198 So, a determination of success per se, program‑by‑program, does not come into play when we do the calculations, it's an aggregate.
LISTNUM 1 \l 1199 THE CHAIRPERSON: And you said you compare it with all broadcasters. Do you take into account the difference audience reach of each of those broadcasters?
LISTNUM 1 \l 1200 MS CORCORAN: No, we don't take into account the difference coverage areas that broadcasters have.
LISTNUM 1 \l 1201 One thing we do though, just to be clear, envelopes are calculated exclusively by genre, so when we compare ‑‑ when we're calculating drama envelopes, we're comparing drama total hours tuned to drama total hours tuned.
LISTNUM 1 \l 1202 When we calculate docs, it's docs versus docs.
LISTNUM 1 \l 1203 So, we do keep the genres exclusive.
LISTNUM 1 \l 1204 THE CHAIRPERSON: And I am only going to use it as the example because it is the very first broadcaster on the list, so Animal Planet, for example, its audience numbers are on the same playing field as those of CTV when you calculate their audience reach ‑‑ their audience success, I'm sorry?
LISTNUM 1 \l 1205 MS CORCORAN: That is how we've been doing it in the past, yes. We are looking at possible ways of ‑‑ well, different ways of looking at the disparity in coverage areas, yes, but it's something that's still under debate and study.
LISTNUM 1 \l 1206 THE CHAIRPERSON: Because it is also an issue that, for example APTN raised, in that there is a degree of, or the perception of it just not being fair to put everything on the same level, or in the same field when comparing those numbers for the allocations of the broadcast envelopes.
LISTNUM 1 \l 1207 MS CORCORAN: We're definitely, you know, working on the balance between market‑driven, which is: this is the market, this is your coverage area, we don't have control over your coverage area and then the fairness access issue. We're definitely working on trying to balance that. It's a challenge.
LISTNUM 1 \l 1208 THE CHAIRPERSON: Is there any value in having broadcasters include audience projections as part of the application process?
LISTNUM 1 \l 1209 MS CREIGHTON: Well, our view is that the projections of audience are speculative in nature, it's a best guess and right now one of the advantages of the system is when we do calculate the total hours tuned it's based on actually what happened.
LISTNUM 1 \l 1210 So, it's a fairly concrete way of looking back and saying, this was the success of your audience this year.
LISTNUM 1 \l 1211 Now, within the factor, because there's a built‑in incentive for, as the audience increase, as the opportunity for the envelope to increase, we feel that that incents broadcasters to promote and choose good Canadian programming that will be successful with audiences.
LISTNUM 1 \l 1212 It's not impossible to include speculation, but we're concerned that that could be anybody's best guess on any series and that would obviously only affect returning programming.
LISTNUM 1 \l 1213 So, we feel comfortable that in looking back you have a concrete place to start from, at least when you're looking at audiences.
LISTNUM 1 \l 1214 THE CHAIRPERSON: So, it is your position that in looking back, as you have put it, that provides enough of an incentive for broadcasters to continue focusing on increasing their audience?
LISTNUM 1 \l 1215 MS CREIGHTON: Well, it's pretty competitive as a system and broadcasters are certainly aware ‑‑ sorry.
LISTNUM 1 \l 1216 MR. CARDIN: Given the factor weight for audience success.
LISTNUM 1 \l 1217 MS CREIGHTON: Yeah, given the factor weight for audience success, broadcasters are well aware that there's a strong competition between them to improve their audiences in order to get a larger envelope in the following year.
LISTNUM 1 \l 1218 And we do feel ‑‑ I mean, it is total hours tuned, as Kathy mentioned, but that is a system that, you know, we began when the envelope system was put in place and we felt that it balances off when you take a large broadcaster with a large reach as compared to the repeat plays that a specialty might offer, that those two things kind of balance each other off in the system.
LISTNUM 1 \l 1219 THE CHAIRPERSON: A number of participants in these proceedings have said that audience numbers alone should not be the only tool by which the audience is measured.
LISTNUM 1 \l 1220 They've made suggestions ranging from critical reviews to international sales, longevity of exploitation are just some of the examples that they have chosen to include that should be considered.
LISTNUM 1 \l 1221 Have you considered these or would you care to comment on these suggestions?
LISTNUM 1 \l 1222 MS CREIGHTON: We don't consider them at the moment. Again, our attempt in our system is to try to remain as subjective as possible ‑‑ sorry, as objective as possible when you're looking at the kind ‑‑ well, sometimes we...
LISTNUM 1 \l 1223 THE CHAIRPERSON: That is why you are not sitting there by yourself.
LISTNUM 1 \l 1224 MS CREIGHTON: That's right.
LISTNUM 1 \l 1225 When you look at the kinds of factors that you've listed, there's some subjectivity in that process to gauge is this review actually an indication of success or not, for example.
LISTNUM 1 \l 1226 So, we've tried to design the system to keep it as objective as possible.
LISTNUM 1 \l 1227 THE CHAIRPERSON: I see more microphones on. Did you have anything to add?
LISTNUM 1 \l 1228 MR. CARDIN: Well, again, to stress the fact we've mentioned before, that we actually don't pick projects. So, we wouldn't favour a situation where we would have to become a part of that decision‑making process on a subjective basis.
LISTNUM 1 \l 1229 THE CHAIRPERSON: Okay. Thank you for that.
LISTNUM 1 \l 1230 I have some questions now regarding the CTFables and, again, based on your documentation, it is up to 10 hours of programs that would have otherwise qualified for CTF funding that the broadcasters can include as a demonstration of audience success; correct?
LISTNUM 1 \l 1231 MS CREIGHTON: Right. Let me just clarify.
LISTNUM 1 \l 1232 The component of CTFables, as you mention it there, we allow broadcasters to claim credit for viewing to CTF‑funded shows. We do allow them to claim credit for 10 titles.
LISTNUM 1 \l 1233 THE CHAIRPERSON: Not 10 hours?
LISTNUM 1 \l 1234 MS CREIGHTON: Not 10 hours, it's 10 titles of programs that could have been supported by the CTF but in fact were not.
LISTNUM 1 \l 1235 So, an example would be Corner Gas which did not get funded by the CTF, but could have been had it applied.
LISTNUM 1 \l 1236 CTFables come in, they have to be reviewed by our program staff to make sure that they actually would have met our requirements.
LISTNUM 1 \l 1237 And the reason why we do this is because we're encouraging success outside of what we fund but, in particular, this is how we allow new entrants into the system.
LISTNUM 1 \l 1238 THE CHAIRPERSON: And you are anticipating one of my questions, because I have a list here somewhere of the pre‑approved titles and I think the date on it is December 4th, 2007 and there are titles from all sorts of genres there, both in French and English, and some of these shows have been funded by self‑administered funds; right?
LISTNUM 1 \l 1239 So, you allow the inclusion of CTFables even if they have been funded by self‑administered funds?
LISTNUM 1 \l 1240 MS CREIGHTON: Yes, we do. I mean, our view is that with the self‑administered funds it increases production and increases Canadian content on the screens and gives us more product out there for Canadians to watch.
LISTNUM 1 \l 1241 So, we have not designed a system to detract or take away from a broadcaster envelope if they happen to be administering a benefits program at that time.
LISTNUM 1 \l 1242 As we all know, as the benefits program comes into the system it tends to spike production and then production will level off after the benefits program is completed. So, we don't feel ‑‑ or have thought about this a bit, but it seems counter productive to penalize production activity of Canadian content from a broadcaster's envelope only because they're also receiving benefits money, that that might in fact have the effect of reducing production overall if we take it away.
LISTNUM 1 \l 1243 THE CHAIRPERSON: I can see how this is a benefit to the larger broadcasters, in particular the over‑the‑air broadcasters, but how does this provide a mechanism for new entrants into the broadcast performance envelope system?
LISTNUM 1 \l 1244 MS CREIGHTON: Okay. Kathy, would you like to speak to the new entrants, how a broadcaster comes into the system through the CTFable process?
LISTNUM 1 \l 1245 MS CORCORAN: Well, basically any broadcaster who submits a CTFable is allowed credit, we don't differentiate between over‑the‑air and specialty.
LISTNUM 1 \l 1246 Our experience looking at the numbers is almost all of the broadcasters do in fact submit them.
LISTNUM 1 \l 1247 So, I'm not sure I'm answering your question.
LISTNUM 1 \l 1248 THE CHAIRPERSON: It is just that, you know, it contributes to one of the four factors.
LISTNUM 1 \l 1249 MS CORCORAN: Yes.
LISTNUM 1 \l 1250 THE CHAIRPERSON: Right, in terms of eligibility for CTF funding.
LISTNUM 1 \l 1251 MS CORCORAN: Yeah.
LISTNUM 1 \l 1252 THE CHAIRPERSON: And if you have a small broadcaster or a start‑up, a digital only broadcaster, can they ever get to the point where they become eligible for CTF funding when this is one component of one of the four factors when considering CTF funding?
LISTNUM 1 \l 1253 MS CORCORAN: Okay. There is another way in which a new entrant can get into the system and that is actually through historic access.
LISTNUM 1 \l 1254 How historic access works is you get credit for historic access based on your licence fees that trigger that funding.
LISTNUM 1 \l 1255 So, if a new broadcaster co‑licences or licences or part of the financing structure, their second, third window, whatever, if their licence is part of the financing structure and that licence is an eligible licence and it triggers money from another broadcaster's envelope, that broadcaster, the new entrant, gets credit for the money that was triggered out of the other broadcaster's envelope. It's prorated by the size of the licence.
LISTNUM 1 \l 1256 So, that is another way of getting entrance into the system.
LISTNUM 1 \l 1257 THE CHAIRPERSON: Okay. And I have here a list of ‑‑ what I am looking at, just so everyone is aware, is the Approved Broadcaster Performance Envelope, English Language applications current to November 4th and I can see a number of titles that have more than one broadcaster who are providing licence fees, and that is your position, that is another way for new entrants to come into the system?
LISTNUM 1 \l 1258 MS CORCORAN: Yes, that's correct.
LISTNUM 1 \l 1259 THE CHAIRPERSON: In your annual report, just because I love examples, you listed Book Television, CTV Travel and Court TV as new entrants into the system.
LISTNUM 1 \l 1260 How did they get in?
LISTNUM 1 \l 1261 MS CORCORAN: Well, sorry, I don't know the answer to that. I'd have to look ‑‑
LISTNUM 1 \l 1262 THE CHAIRPERSON: You are coming back on Friday, so that...
LISTNUM 1 \l 1263 MS CORCORAN: I'll get back to you on that.
LISTNUM 1 \l 1264 MS CREIGHTON: We'll check the exact details of how each one got into the system.
LISTNUM 1 \l 1265 THE CHAIRPERSON: Okay, thanks.
LISTNUM 1 \l 1266 And in the broadcast envelope allotments for 2007‑2008 fiscal year, it is obvious that each broadcast envelope is allocated to individual licensees on a per genre basis as opposed to a corporate group.
LISTNUM 1 \l 1267 So, what I am getting at here is, given the recent consolidation in the industry, have you given any consideration to whether or not it would be more efficient to allot broadcast envelopes on a corporate basis as opposed to an individual licensee basis, would that provide the broadcasters with even more flexibility?
LISTNUM 1 \l 1268 MR. CARDIN: I just want to make one comment or interject.
LISTNUM 1 \l 1269 THE CHAIRPERSON: Please.
LISTNUM 1 \l 1270 MR. CARDIN: By genre and language as well.
LISTNUM 1 \l 1271 THE CHAIRPERSON: By genre and language. Thank you for that, yes.
LISTNUM 1 \l 1272 MS CREIGHTON: We have not designed the system to consider only allocating an envelope to the corporate group and partly that's because of the way the system was originally designed by the four factors and we looked at each individual broadcaster on that basis.
LISTNUM 1 \l 1273 Whether or not it would give more flexibility, it's possible that it could. I mean, I think we've considered a number of other factors to gain various broadcasters some flexibility in the system as the system has evolved.
LISTNUM 1 \l 1274 Kathy, do you have anything to add on the corporate group issue?
LISTNUM 1 \l 1275 MS CORCORAN: I do actually. We have a policy right now that allows broadcasters within a corporate group to transfer their BPE funds to each other. So, if one member of the corporate group has drama funds, they are permitted to transfer those drama funds to another broadcaster in that corporate group that has a drama envelope.
LISTNUM 1 \l 1276 So, we do allow the shifting of funds ‑‑
LISTNUM 1 \l 1277 THE CHAIRPERSON: And it is a hundred per cent of the funds that can be transferred; right?
LISTNUM 1 \l 1278 MS CORCORAN: That's correct.
LISTNUM 1 \l 1279 THE CHAIRPERSON: Okay.
LISTNUM 1 \l 1280 MR. CARDIN: We've also recently made a change allowing trades between broadcasters, you know, in the same genre and language. For example, you know, broadcaster A can trade $50,000 of its documentary envelope with broadcaster B to receive $50,000 of their drama money. This is a recent change that we've also made this year.
LISTNUM 1 \l 1281 THE CHAIRPERSON: Is that the change that ‑‑ you are referring to page 34 of your comments, you said:
"Transfers between broadcasters which are not in a corporate group..." (As read)
LISTNUM 1 \l 1282 MR. CARDIN: That's right.
LISTNUM 1 \l 1283 THE CHAIRPERSON: So, that is what you are referring to?
LISTNUM 1 \l 1284 MR. CARDIN: That's right.
LISTNUM 1 \l 1285 MS CREIGHTON: There also is a 15 per cent flexibility for each broadcaster in terms of their overall envelope where they can determine where to allocate that level of resources to.
LISTNUM 1 \l 1286 THE CHAIRPERSON: And that flex amount is restricted to within the same corporate group?
LISTNUM 1 \l 1287 MS CREIGHTON: That flex amount is per broadcaster ‑‑ broadcaster envelope.
LISTNUM 1 \l 1288 MS CORCORAN: That's correct. It's 15 per cent per broadcaster envelope and the flex, just to be clear, is the amount of the envelope that the broadcaster can decide what genre to spend it in.
LISTNUM 1 \l 1289 So, we allocate drama money, they've got to spend it in drama; we allocate docs, they've got to spend it in docs. 15 per cent of what they earn every year goes into flex and they can move it into drama, doc, whatever they choose, but it's only 15 per cent per broadcaster.
LISTNUM 1 \l 1290 THE CHAIRPERSON: Within the same corporate group?
LISTNUM 1 \l 1291 MS CORCORAN: Correct.
LISTNUM 1 \l 1292 THE CHAIRPERSON: And that flex amount can't be transferred to another broadcaster?
LISTNUM 1 \l 1293 MS CORCORAN: It can be transferred.
LISTNUM 1 \l 1294 THE CHAIRPERSON: That can be transferred as well?
LISTNUM 1 \l 1295 MS CORCORAN: Yes.
LISTNUM 1 \l 1296 MR. CARDIN: With the exception of educational broadcasters, where we permit a higher percentage of flex.
LISTNUM 1 \l 1297 THE CHAIRPERSON: You guys are good, because that was my next question, I am going to educational broadcasters and whether they are subject to the same factors when determining the envelopes.
LISTNUM 1 \l 1298 MS CREIGHTON: They are and our mechanism treats them in that same way.
LISTNUM 1 \l 1299 THE CHAIRPERSON: Why?
LISTNUM 1 \l 1300 MS CREIGHTON: Why? Sorry. Yeah, they have a higher flex. Just last year we ‑‑ I'll let Kathy give you the details ‑‑ but we opened up the ability for educational broadcasters to have more flex, especially those with budgets under a set level.
LISTNUM 1 \l 1301 MS CORCORAN: That's correct. The envelopes for the educational broadcasters are calculated in the same manner as every other broadcaster, but we do allow educational broadcasters a greater percentage of flex.
LISTNUM 1 \l 1302 For broadcasters under ‑‑ with total envelopes under $750,000, their entire envelope is flex. For broadcasters over that amount, 50 per cent of their envelope is flex.
LISTNUM 1 \l 1303 We've been looking at other ways of handling the educational broadcasters for some time and we're still working on it.
LISTNUM 1 \l 1304 MS CREIGHTON: We have received a proposal from the educational broadcasters which we are considering and have not finished our analysis and discussion at the board level about that.
LISTNUM 1 \l 1305 THE CHAIRPERSON: And they too are subject to their audience numbers being compared to all other broadcasters, despite the fact that some are provincial in nature only?
LISTNUM 1 \l 1306 MS CREIGHTON: That's correct.
LISTNUM 1 \l 1307 THE CHAIRPERSON: Okay. In terms of the special initiatives identified in the contribution agreement between you and the Department, it appears that ‑‑ I think I have read this correctly ‑‑ it appears that French language projections outside of Quebec and development fund financing have a guaranteed amount from which to draw funding, 10 per cent for the former and 1.75 per cent respectively of the program's funding is to be dedicated to these two initiatives.
LISTNUM 1 \l 1308 Are these amounts commensurate with the number of projects received? In other words, is there an over subscription to projects in these categories?
LISTNUM 1 \l 1309 MS CREIGHTON: I'll ask Dave Forget to speak to the detail on that, but we do ‑‑ in development, we actually allocate more than the 1.5 per cent that's allowable in the contribution agreement. Our actual amount of money is $9‑million.
LISTNUM 1 \l 1310 Dave.
LISTNUM 1 \l 1311 THE CHAIRPERSON: Which represents what percentage?
LISTNUM 1 \l 1312 MS CREIGHTON: About six I believe, is it?
LISTNUM 1 \l 1313 MR. CARDIN: Nine out of 270.
LISTNUM 1 \l 1314 MS CREIGHTON: 9‑million out of 270.
LISTNUM 1 \l 1315 THE CHAIRPERSON: Okay.
LISTNUM 1 \l 1316 MR. CARDIN: We've got a calculator.
LISTNUM 1 \l 1317 MS CREIGHTON: Dave will speak to the issue of over subscription in those two categories.
LISTNUM 1 \l 1318 MR. CARDIN: 3.3.
LISTNUM 1 \l 1319 THE CHAIRPERSON: 3.3. Thank you.
LISTNUM 1 \l 1320 MR. FORGET: In the English system for development it works similar to the envelopes, so it's triggered by the broadcasters, hence there's no over subscription, there's no application process other than broadcaster triggering.
LISTNUM 1 \l 1321 On the French side we still have selected development and we have ‑‑ because we have three rounds over the course of the year, occasionally there's over subscription. I would describe it as modest.
LISTNUM 1 \l 1322 On French outside Quebec, once again, we have a number of application deadline dates because it's selective program, we have on occasion over subscription, but I'd describe it as modest.
LISTNUM 1 \l 1323 THE CHAIRPERSON: I'm sorry, could you repeat the last ‑‑
LISTNUM 1 \l 1324 MR. FORGET: It's modest over subscription.
LISTNUM 1 \l 1325 THE CHAIRPERSON: And is that true as well for the aboriginal and versioning?
LISTNUM 1 \l 1326 MR. FORGET: Yes. We have a once‑a‑year deadline for aboriginal production. There is modest over subscription for that and we do development for aboriginal projects, essentially as they come in. I think if we had more money we could spend it. So, there is a bit of over subscription there, but it's ‑‑ we don't see it as being an urgent situation. There is some over subscription, but it's modest.
LISTNUM 1 \l 1327 THE CHAIRPERSON: How do you define modest over subscription?
LISTNUM 1 \l 1328 MR. FORGET: Well, I've been at Telefilm long enough to remember the days when we had application deadlines for production and we would have one and a half to two to two and a half times the available dollars. That's serious over subscription.
LISTNUM 1 \l 1329 When you're ‑‑ you know, you're getting five to do four, that sort of thing, that's modest.
LISTNUM 1 \l 1330 So, we're not refusing more than a handful of projects, so it's manageable over subscription.
LISTNUM 1 \l 1331 And on version ‑‑ I think you asked about versioning. We're not over subscribed on versioning, in fact we're under subscribed.
LISTNUM 1 \l 1332 THE CHAIRPERSON: Do you see an opportunity for increasing the efficiencies of managing the specialty initiatives through a guaranteed envelope or through some other means?
LISTNUM 1 \l 1333 MR. FORGET: Well, I think the envelope ‑‑ we have an envelope system for English development now and I think it's working well.
LISTNUM 1 \l 1334 On the French side, there hasn't been, from my perspective, a lot of requests on the part of our clients for to go to that system. I suppose if we were more seriously over subscribed that might be, but I think what we have now is a program that's manageable.
LISTNUM 1 \l 1335 I guess we could look at that. It's working well on the English side, it's up for consideration.
LISTNUM 1 \l 1336 THE CHAIRPERSON: Okay. I think you very well covered how it is that projects get submitted to the CTF, so I am not going to go over that again.
LISTNUM 1 \l 1337 But just to be clear, at no time does the CTF, therefore, make a qualitative evaluation other than determining whether or not a project meets with the eligibility criteria for funding?
LISTNUM 1 \l 1338 MS CREIGHTON: Yes, that's true. The primary source of our funding, the 94 per cent is envelope and within that envelope it is the broadcasters, both public and private, who make the decisions on which projects are chosen.
LISTNUM 1 \l 1339 THE CHAIRPERSON: Is the board involved?
LISTNUM 1 \l 1340 MS CREIGHTON: No.
LISTNUM 1 \l 1341 THE CHAIRPERSON: Okay. One of the issues that has received a great amount of debate in the submissions received which you didn't touch upon in your oral submission is eight out of 10 versus 10 out of 10.
LISTNUM 1 \l 1342 Now, in your documentation you said that exceptions have been granted where projects achieving less than 10 out of 10 points have received funding, and I think primarily it's been the area of children's programming and even there, in particular, animation. I believe you also say in some documentary.
LISTNUM 1 \l 1343 MS CREIGHTON: That's correct.
LISTNUM 1 \l 1344 THE CHAIRPERSON: Are there any other genres where the exception has been granted?
LISTNUM 1 \l 1345 MS CREIGHTON: Yes, there are and I'll have Nathalie Clermont speak to the details, but we do have some exceptions on occasion in drama as well.
LISTNUM 1 \l 1346 THE CHAIRPERSON: Okay.
LISTNUM 1 \l 1347 MS CREIGHTON: Nathalie.
LISTNUM 1 \l 1348 MME CLERMONT : Oui. En fait, il existe aussi dans les dramatiques et dans les projets de variétés hors de la scène des exceptions où des points peuvent être alloués à des performeurs ou à des acteurs non‑Canadiens, qui sont, par contre, des figures connues auprès du public canadien. Donc, un point peut aller à des performeurs ou des acteurs non‑Canadiens dans ces cas de dramatiques et de variétés hors de la scène.
LISTNUM 1 \l 1349 THE CHAIRPERSON: I'm going to apologize. I'm going to continue asking you a question in English.
LISTNUM 1 \l 1350 What would you say is the percentage of project ‑‑ applications received ‑‑ what percentage was granted in terms of exceptions?
LISTNUM 1 \l 1351 MME CLERMONT : On n'a, malheureusement, pas cette statistique là, mais on pourra vous revenir... we can come back Friday with that.
LISTNUM 1 \l 1352 THE CHAIRPERSON: Yes, thank you.
LISTNUM 1 \l 1353 Do these exceptions have to be approved by the Department or the board, or were these strictly a management decision?
LISTNUM 1 \l 1354 MS CLERMONT: It's management decision.
LISTNUM 1 \l 1355 THE CHAIRPERSON: So, the granting of exceptions does not go to either the board or the Department of Canadian Heritage?
LISTNUM 1 \l 1356 MS CLERMONT: On individual projects?
LISTNUM 1 \l 1357 THE CHAIRPERSON: On individual projects.
LISTNUM 1 \l 1358 MS CLERMONT: No.
LISTNUM 1 \l 1359 THE CHAIRPERSON: Okay. Thank you.
LISTNUM 1 \l 1360 And, you know, the $64,000 question. Throughout your submission and in your documentation you do maintain that the CTF through the BP system has moved toward a market‑driven approach and you sustain that the contribution agreement between you and the Department reflects that as well.
LISTNUM 1 \l 1361 Do you believe that reducing the requirement that a production that achieves 10 out of 10 points and reducing that to eight out of 10 would accelerate that goal?
LISTNUM 1 \l 1362 MS CREIGHTON: Would accelerate the goal of market‑driven?
LISTNUM 1 \l 1363 THE CHAIRPERSON: Yes.
LISTNUM 1 \l 1364 MS CREIGHTON: Well, we think we've demonstrated in our brief that Canadian projects are achieving a high degree of audience success within the system that we work within and most of the successes we've talked about today on the drama side would be 10 out of 10 projects.
LISTNUM 1 \l 1365 I think the question as to whether or not eight out of 10 would increase the market appeal would be ‑‑ it's possible certainly to do that, I guess the question would be: Would we lose on the other side of that in terms of Canadian talent that may not be involved in those productions.
LISTNUM 1 \l 1366 And our objective is to ensure that we build an industry, that we ensure that the system is in place to make sure Canadians are working, Canadian stories are being developed and told by Canadians for Canadian audiences.
LISTNUM 1 \l 1367 Did you...
LISTNUM 1 \l 1368 MR. CARDIN: I was just going to say, you know, if that question is asked, it is a question that perhaps would only be relevant for the English market.
LISTNUM 1 \l 1369 We feel that the impact of such a change in the French market would be marginal, if any at all.
LISTNUM 1 \l 1370 THE CHAIRPERSON: You did ‑‑ sorry, Mr. Barrett.
LISTNUM 1 \l 1371 MR. BARRETT: Just to add a comment which is that the eight out of 10 concept would be, I think, linked probably in most of the board's mind to success in international markets. So, the question is whether the success in Canadian ‑‑ it would have a material impact on success in Canadian markets, having non‑Canadian performers and I think that's the key question and I think the experience is that the success with Canadians is not linked to having non‑Canadian performers.
LISTNUM 1 \l 1372 To the extent there's a discussion about international success, that's a different story.
LISTNUM 1 \l 1373 THE CHAIRPERSON: And, so, obviously your position is that the priority has to be success in Canada and if there is success internationally, that is a secondary element?
LISTNUM 1 \l 1374 MS CREIGHTON: That is our mandate.
LISTNUM 1 \l 1375 THE CHAIRPERSON: And on page 2 of your oral presentation you do list a number of Canadian programs that are 10 out of 10 productions that have achieved audience success and you provide us with the audience numbers.
LISTNUM 1 \l 1376 Should that be our benchmark going forward or should those be the benchmarks going forward, because there are more than one?
LISTNUM 1 \l 1377 MS CREIGHTON: Probably everybody in this room has a sense of what the benchmark should be based on history and experience and I'm sure when you hear from others throughout the course of the week they'll speak to that.
LISTNUM 1 \l 1378 If you ‑‑ there certainly could be a system developed where benchmarks are set. I think if that is the direction that we take we would have to then seriously consider different benchmarks for different types of programming and different types of broadcasters because the benchmark in a large conventional might be very different than a specialty or a benchmark in children's or in documentary is very different than that of drama. So there is nothing wrong with looking at benchmarks. Are these the specific ones? These are the ones that we are familiar with in terms of what Canadian programming has achieved as compared to each other and to American programming and they are well known amongst the industry. But if we are to set specific benchmarks I think we would want to take some due time and consideration to reflect upon that with our stakeholders in the industry and look at those very carefully if in fact they are targets to which performance will be held accountable rather than pick them only based on what we have seen.
LISTNUM 1 \l 1379 MR. CARDIN: You can perhaps imagine that if we were to set benchmarks per genre, per language and for type of broadcaster, conventional, pay, specialty, digital, EDNET, we might be looking at approximately 40 separate benchmarks.
LISTNUM 1 \l 1380 THE CHAIRPERSON: You have a knack for discouraging.
‑‑‑ Laughter / Rires
LISTNUM 1 \l 1381 THE CHAIRPERSON: If there was, however, an outcry for setting benchmarks who do you think would be in the best position to determine what those benchmarks should be? Is it the CTF, it is us, is it the department, is it the producers; is it the broadcasters?
LISTNUM 1 \l 1382 MS CREIGHTON: Well, I think that's a conversation we would want to have with everyone. I think if you are going to set a series of benchmarks on which you will require the industry to perform, I think we would be ill‑advised for a single entity to set those benchmarks without you know a significant body of research and a significant discussion amongst all the relevant players. And those, I guess in our view, would certainly include the department, the CRTC, the BDUs, our myriad of stakeholders and the broadcasters before we would set those in firm targets.
LISTNUM 1 \l 1383 THE CHAIRPERSON: Thank you.
LISTNUM 1 \l 1384 I am going to move to the issue of the two streams of revenue. You were quite clear in your oral presentation and throughout your submissions as to the CTF's position, but I am going to take you to paragraph 92 of your first set of comments where you say:
"The specific objectives contained within the contribution agreement that result in the CTF special initiatives stream could be considered expenditures of the Department of Canadian Heritage. The balance of the funds from the Department of Canadian Heritage and the BDU revenue could be allocated to the Broadcaster Performance Envelope stream and reported to both the department and the BDUs based on the objectives outlined in the report. This could be done on an annual basis." (As read)
LISTNUM 1 \l 1385 THE CHAIRPERSON: I would like you to elaborate on that paragraph because are you saying here that we should maintain the streams of revenue coming from obviously both Heritage and the BDUs but they would be administered by ‑‑ continued to be administered by the CTF as a whole but that your reporting of those two streams of revenue could change?
LISTNUM 1 \l 1386 MS CREIGHTON: Yes, that is what we are saying. Our advice and preference is to keep the two as a whole but we can look specifically to the expenditures from both sources of revenue.
LISTNUM 1 \l 1387 THE CHAIRPERSON: But in this paragraph you are quite specific in saying that the funds that would come from Canadian Heritage would be the ones that would be allocated solely to CTF special initiatives?
LISTNUM 1 \l 1388 MS CREIGHTON: For reporting ‑‑ sorry?
LISTNUM 1 \l 1389 MR. CARDIN: For reporting purposes solely, yes.
LISTNUM 1 \l 1390 MS CREIGHTON: Are you asking the question, just to be clear, about the separation of the money that comes from the BDUs and Heritage and what that looks like?
LISTNUM 1 \l 1391 THE CHAIRPERSON: Absolutely.
LISTNUM 1 \l 1392 MS CREIGHTON: Okay, great. Thank you.
LISTNUM 1 \l 1393 We have done some initial calculating on that and if you have a premise that all of the public money that comes into the system should support the objectives within the contribution agreement. Then we looked at the number of programs that that would involve. So those are aboriginal versioning. In the case of ‑‑ and the easy ones, the French language outside Quebec that are directed in the contribution agreement as targets and the regional activity.
LISTNUM 1 \l 1394 When it comes to directives in the contribution agreement on both development and regional spend the complexity there is taking a look at what appropriate proportion would come out of the private stream versus the public stream.
LISTNUM 1 \l 1395 So what we did when we did some initial calculations on this was we looked at the development spend of the public broadcasters and the development spend of the commercial broadcasters and we did that same application in terms of regional.
LISTNUM 1 \l 1396 So when we broke it out, taking that particular approach and cut to be consistent with all of the objectives in the contribution agreement, 61 percent of our resources would be spent on programming coming from the public stream and 39 percent from the private stream. So if we were to apply a methodology to use that allocation, currently in the resources we see from the Department of Canadian Heritage, the money we get from them wouldn't quite cover all of those initiatives that are contained.
LISTNUM 1 \l 1397 Now, the two issues that I mentioned, regional spend and development, are the parts that you could do further analysis in terms of seeing where they would actually end up on which side of that dividing line.
LISTNUM 1 \l 1398 THE CHAIRPERSON: And so that, of course, is going ‑‑ again, based on what you have just told us, is going to increase operationally how the CTF would manage the funds?
LISTNUM 1 \l 1399 MS CREIGHTON: Yes. In terms of administrative expenses are you ‑‑
LISTNUM 1 \l 1400 THE CHAIRPERSON: Yes.
LISTNUM 1 \l 1401 MS CREIGHTON: Yes, we anticipate that that would be the case.
LISTNUM 1 \l 1402 THE CHAIRPERSON: Do you anticipate by how much?
LISTNUM 1 \l 1403 MS CREIGHTON: No. Currently, our administrative expenses are between 5 and 5.1 percent for both ‑‑
LISTNUM 1 \l 1404 THE CHAIRPERSON: Yes.
LISTNUM 1 \l 1405 MS CREIGHTON: ‑‑ the Canadian Television Fund and the activity at the Television Business Unit. We did administer two streams in the past and 7, I think, 7 percent was what we believed the administrative ‑‑ between 7 and 8, I would say, administrative expenses would have been at that time when we were administering the dual streams before.
LISTNUM 1 \l 1406 THE CHAIRPERSON: And the contribution agreement, I believe, caps your administrative costs ‑‑
LISTNUM 1 \l 1407 MS CREIGHTON: 6 percent.
LISTNUM 1 \l 1408 THE CHAIRPERSON: ‑‑ 6 percent?
LISTNUM 1 \l 1409 MS CREIGHTON: That's correct.
LISTNUM 1 \l 1410 THE CHAIRPERSON: On to board governance. Again, Mr. Barrett, you were quite clear but a number of suggestions have been made by intervenors in these proceedings as to what would be the ideal composition of the board. The DGC, for example, recommended that it should not be association members who will be board members but rather staff members of associations to remove any perceived conflict of interest.
LISTNUM 1 \l 1411 I would like you to comment on that suggestion, please.
LISTNUM 1 \l 1412 MR. BARRETT: We have had experience on both sides of that over the years. Some of our members have ‑‑ member associations have appointed staff persons to sit on the board and some have appointed people more directly involved in the production process.
LISTNUM 1 \l 1413 Generally, the way our governance structure works is that the member associations make their own choice. I'm aware that a number of members have debated intensively internally which way to go on this and some feel one way and some feel the other way. We have been very lucky to have circumstances in which when people have been appointed to the board that are staff members of their respective associations that they do have a high degree of expertise, in large measure because when they arrived at their job at the member association they had already had a lot of experience in the sector. I don't think it's the same in all cases.
LISTNUM 1 \l 1414 We are ‑‑ I think as you have heard over the past 20 or 25 minutes there is this huge degree of complexity around the work that we do. So we have opted generally to allow the member associations to choose their own people.
LISTNUM 1 \l 1415 I feel ‑‑ I think the board would be reluctant to have a situation in which the board members were limited to staff associations because I think in some cases the quality of expertise if it was across the board would suffer.
LISTNUM 1 \l 1416 THE CHAIRPERSON: And notionally you dismiss the ‑‑ because the CBC who brought forward the suggestion that the board be made up of ‑‑ the entire board be made up of independent members.
LISTNUM 1 \l 1417 MR. BARRETT: The debate around whether or not an independent board or a stakeholder board is the best vehicle for this particular fund is a longstanding one and obviously other organizations have opted to have an independent board.
LISTNUM 1 \l 1418 When the Cable Production Fund was first established in 1994 it was actually the Commission that established and identified the various organizations that would belong and the various individuals that might participate in the board. And I think the objective at the time was to have a system that was as close to being objective as possible and as automatic as possible.
LISTNUM 1 \l 1419 So we run a rules‑based environment and, as you have heard and I think it can't be said too often, the board has no role in individual program allocation decisions; no role in appeals. In fact, it's a tentative ‑‑ our conflict of interest guidelines that no program can be discussed at a board meeting by name.
LISTNUM 1 \l 1420 So we feel that the objective of having a rules‑based system requires this incredible degree ‑‑ that is automatic and objective requires an incredible degree of expertise in order to make sure that these rules do not have unanticipated consequences that damage the industry.
LISTNUM 1 \l 1421 So there is a link and it is not just simply that people like to be on the board. It is a link between this rules‑based objective environment and the expertise needed to settle out the rules so that the industry is well served.
LISTNUM 1 \l 1422 One point I would make that I think is important to be made and that has come up quite a bit in the past year and a half, the fund is not perfect. But the fact that we have developed a system that seamlessly weaves into the way the industry does business is actually a huge accomplishment. The fact that we organize ourselves annually to make our rules in time for the broadcasters to make proper decisions about their schedules and order from producers in time so that they can make high quality products that are available and delivered in the cycle that makes the most marketing sense, is actually extraordinarily important.
LISTNUM 1 \l 1423 So we govern ourselves by those realities and those realities are brought to the table by the folks who are actually in the business of making and buying these shows.
LISTNUM 1 \l 1424 MR. CARTER: If I may add just a comment?
LISTNUM 1 \l 1425 The fact that this board functions with a double majority in that the independent members have to vote on all important finance and policy decisions, at the end of the day we have the benefit of both, fully independent vote and the fully knowledgeable and industrial opinion at the same time, and that worked very well for the CTF.
LISTNUM 1 \l 1426 THE CHAIRPERSON: Thank you.
LISTNUM 1 \l 1427 And in terms of the timing and the production cycle ‑‑ I do want to thank you for including in your submission ‑‑ I believe it was your first submission, an appendix that really detailed the timing of, really, a production cycle. I think it's important for everyone involved in these proceedings to take a very close look at that. As I said in my opening remarks, as will we.
LISTNUM 1 \l 1428 Now, in terms of accountability you certainly do have a very robust website. I visited often in preparing for this hearing. You have a stakeholders report, an annual report. You made your ‑‑ you and the department made ‑‑ allowed us to put your contribution agreement on our website.
LISTNUM 1 \l 1429 Is there anything that I have missed in terms of what is widely available both to the public, to the stakeholders, to the department, to us?
LISTNUM 1 \l 1430 MS CREIGHTON: Not in terms of hard materials. I think one important factor that we have a renewed emphasis on at the CTF is the process of communication and stakeholder outreach. We treat this very seriously and established a position that Mr. Cardin fills in terms of stakeholder relations and outreach specifically, along with policy development.
LISTNUM 1 \l 1431 So we hope to continue to have a process whereby ‑‑ we right now have a cross‑country tour that we do to hear from all clients. It's wide open. It's not excluded to anyone.
LISTNUM 1 \l 1432 We have regular meetings with other partners in terms of the private funds or the provincial agencies.
LISTNUM 1 \l 1433 We have recently instituted an outreach with broadcasters. We appreciate that the BPE system is often complex so we are developing a new procedures manual for clarity and transparency around the BPE system and the outreach to broadcasters.
LISTNUM 1 \l 1434 We have increased our attendance at a number of major markets and festivals and organizations across the country to be present and raise the visibility of the CTF but also to take the opportunity to have business meetings with specific clients at that time and keep the door open so that we hear from all manner of people, regions and interests and ideas about the CTF and what has to change or ideas they may have about improving the system.
LISTNUM 1 \l 1435 As well, the staff at the Television Business Unit annually once the guidelines are released, usually this time of year, December‑January, the staff go out across the country and meets specifically with applicants to review and discuss issues around the guidelines and questions that people might have.
LISTNUM 1 \l 1436 So I think ‑‑ I just wanted to add that there is that piece that we do in terms of communication and ongoing dialogue on a daily basis really. Whenever we meet people publicly I always say, "The phone is always on. We may not answer within an hour. It's a big country with lots of issues. But we respond within 24 hours and attempt to respond seven days if the issue is very complicated." So we have a wide client outreach that we do as well.
LISTNUM 1 \l 1437 MR. CARDIN: I would add that, you know, in the last year we visited events ‑‑ I won't give you the whole list but we visited every province in the country with the exception of the Territories.
LISTNUM 1 \l 1438 Another document that we are putting together presently is a BPE policy and administration reference document so that all of the rules and processes for calculating the envelopes will be incorporated into a single document. That's in the course of being drafted and should be released soon.
LISTNUM 1 \l 1439 And as Val was saying ‑‑ Dave might want to speak a bit to this ‑‑ but the TBU is embarking, I believe, next week or in two weeks on an outreach tour.
LISTNUM 1 \l 1440 MS CREIGHTON: And the Territories were not for lack of trying. It was just trying to get us and them together on a date.
LISTNUM 1 \l 1441 MR. BARRETT: Just on the governance front I would just like to add the fact that we post the annual reports of the independent committee.
LISTNUM 1 \l 1442 And I think that, if I could just take a brief moment to talk about this, the concept of an independent committee is actually a fairly interesting and racy governance concept, a permanent one with a specific step or mandate along with the double majority that Michel has mentioned. To have an independent committee effectively report against its own bylaw mandate annually and disclose its work plan and prepare a formal report each year and publish it and post it on the web ‑‑ and I understand it's a formal process so some of the reading is a little bit tough to sledge your way through, but as a disclosure and accountability process it's very healthy. And I think the independent committee takes its work quite seriously and believes that those reports add value to the process.
LISTNUM 1 \l 1443 THE CHAIRPERSON: Well, thank you once again for your detailed response. I think it is important to get these points on the public record.
LISTNUM 1 \l 1444 I am now going to pass the baton over to my colleague, Vice‑Chairman Arpin.
LISTNUM 1 \l 1445 COMMISSIONER ARPIN: Thank you, Ms Cugini.
LISTNUM 1 \l 1446 Well, I have a series of questions. They are not all related and they are surely not in as good an order than the ones that were asked by my colleague who had a definite plan, because some of my questions come from my reading of your submission and what you have said earlier today.
LISTNUM 1 \l 1447 I will start first with the communication report that the chair of CTF just mentioned. I noted that on a yearly basis you are issuing two reports, one you call the stakeholder report, the other one that you call the annual report. But I also note that your annual meeting is in June and your annual report only comes out in November.
LISTNUM 1 \l 1448 Shouldn't it be the other way around so the stakeholder report in November and the annual report at the time of your general meeting, general annual meeting?
LISTNUM 1 \l 1449 MR. BARRETT: That is quite possibly the case and I think it's a great suggestion. We should try to emulate it.
LISTNUM 1 \l 1450 But let me, just to give you a sense of the different orientation, the annual report which we are working very hard to beef up complies with the provisions of both law because of the period of time within which you have to issue audited financial statements and the requirements under the contribution agreement.
LISTNUM 1 \l 1451 The stakeholder report really is our way of trying to release to the industry as fast as possible after the actual year end, as much production and industry‑related market information as we can.
LISTNUM 1 \l 1452 We hold a meeting in Banff which is originally designed as kind of a mock public company AGM but it is largely designed to give the industry as much information as we can manage to put together as fast as possible. And let me tell you why that's relevant and important.
LISTNUM 1 \l 1453 Most of the tracking systems in the industry have a year end, either the calendar year end or the March 31st government year end. Because of the proportion of projects that we are involved in our information is generally pretty good and it's pretty comprehensive across all the various genres, production activities in the regions and so on. And because we have been able through the assistance of our extraordinarily able staff to develop our information systems, we are able to have that information within three months after the year end which actually betters most of the usual requirements for audit and yada yada.
LISTNUM 1 \l 1454 So that's really the point behind the stakeholders report. And we call it a stakeholders report because we want it to be information useful to them.
LISTNUM 1 \l 1455 COMMISSIONER ARPIN: Well, obviously, could the financial statement be appended to the stakeholders report so it will alleviate one of the criticisms that the CTF has been facing lately?
LISTNUM 1 \l 1456 MR. BARRETT: I think that would be a great idea but I think that those statements could only be in draft because I don't believe we have audited information within three months of the year end. So I think one of our challenges of the statements that you saw, the financial statements were from the previous fiscal year and any financial information we would give in June ‑‑
LISTNUM 1 \l 1457 COMMISSIONER ARPIN: But your financial year ends on March the 31st like the government year?
LISTNUM 1 \l 1458 MR. BARRETT: Sorry. Monsieur Arpin, s'il vous plaît, répétez la question.
LISTNUM 1 \l 1459 CONSEILLER ARPIN : Oui. Est‑ce que votre année financière se termine le 31 mars?
LISTNUM 1 \l 1460 M. CARDIN : Oui.
LISTNUM 1 \l 1461 M. BARRETT: Oui.
LISTNUM 1 \l 1462 CONSEILLER ARPIN : Donc...
LISTNUM 1 \l 1463 MR. BARRETT: Perhaps I could ask Sandra Collins to ‑‑
LISTNUM 1 \l 1464 COMMISSIONER ARPIN: ...ça donne seulement deux mois, parce que ‑‑ your annual meeting is taking place in early June?
LISTNUM 1 \l 1465 MS COLLINS: Yes.
LISTNUM 1 \l 1466 COMMISSIONER ARPIN: So that means that you only have April and May to do the audit. It's only the banks that are able to do their audits within the two‑month period. All the other public companies are making use of at least three to four months and the banks I know why, because they do have auditors on location year round.
LISTNUM 1 \l 1467 MR. BARRETT: Perhaps I could ask Sandra Collins, sir, who is our Vice‑President of Finance and Corporate Administration, to address this.
LISTNUM 1 \l 1468 MS COLLINS: We could definitely alter our audit schedule and attempt to have the audited statements in time for our general meeting in Banff. We could make that change.
LISTNUM 1 \l 1469 COMMISSIONER ARPIN: Well, I am really leaving it to the board to make that final determination but it's one of the criticisms that we heard in the last 12 months, that the annual statements were not ready for the time of the annual meeting and obviously, as you said, you are trying to mock up a public corporation but if you held your public ‑‑ the annual meeting and you don't have the financials then obviously that ‑‑
LISTNUM 1 \l 1470 MR. BARRETT: We totally agree, and I guess we would suggest that the situation that occurred this year had to do with one of these auditing technicalities that related to the transition. Generally speaking, of course you are right. We have to have annual financial statements available for the AGM but they are not the statements from the year that ended two months earlier. And so I think that ‑‑
LISTNUM 1 \l 1471 COMMISSIONER ARPIN: So you are almost ‑‑ if you have ‑‑ you are always something like 14 months late?
LISTNUM 1 \l 1472 MR. BARRETT: Maybe I'm getting out on a limb.
‑‑‑ Laughter / Rires
LISTNUM 1 \l 1473 MR. BARRETT: Somebody ‑‑ I hear the sound of sawing.
‑‑‑ Laughter / Rires
LISTNUM 1 \l 1474 MR. BARRETT: Sandra ‑‑ could I ask Sandra to clear this up for us?
LISTNUM 1 \l 1475 MS COLLINS: The statements we would provide in June of 2008 would be for the fiscal year ended March 31, 2008.
LISTNUM 1 \l 1476 COMMISSIONER ARPIN: Fine, much better.
‑‑‑ Laughter / Rires
LISTNUM 1 \l 1477 M. CARDIN : Pour répondre à votre question initiale, compte tenu maintenant qu'on va obtenir les états financiers plus rapidement, il n'est peut‑être pas réaliste de penser qu'on puisse sortir notre rapport annuel au mois de juin, compte tenu que les états doivent être approuvés par nos membres.
LISTNUM 1 \l 1478 Mais, certainement, nous avons déjà entamé notre réflexion par rapport est‑ce qu'on va éventuellement combiner notre rapport aux intervenants et notre rapport annuel? Certainement, il n'y a pas de raison que notre rapport annuel sorte au mois d'octobre ou novembre l'an prochain. Ce sera plus rapide.
LISTNUM 1 \l 1479 Une autre des distinctions entre les deux rapports, comme Valerie disait, le rapport annuel répond à toutes les obligations qui nous sont fixées dans l'entente de contribution, alors que dans notre rapport aux intervenants... je vais revenir.
LISTNUM 1 \l 1480 L'une des obligations dans l'entente de contribution, c'est toujours de rapporter la différence avec l'année précédente. Mais dans notre rapport aux intervenants, on présente de l'information, trended information sur quatre, cinq, six ans, et selon nous, ça brosse un portrait plus éloquent de l'évolution de l'industrie de la production télévisuelle.
LISTNUM 1 \l 1481 Et on est justement, comme monsieur Barrett le disait, en train de regarder comment on peut peut‑être améliorer le rapport annuel en incluant ces composantes là également et en le publiant plus rapidement.
LISTNUM 1 \l 1482 CONSEILLER ARPIN : Il y a un des intervenants, qui est un intervenant contributeur, qui, lui, prétend qu'il n'y trouve pas son compte dans l'information qui est publiée dans le rapport des intervenants ou dans le rapport annuel. Son intérêt est plus financier que structurel.
LISTNUM 1 \l 1483 Another ‑‑ you filed with the Commission over the last couple of weeks some documents regarding what you call protocols and charters and one of them is a document that deals with the roles and responsibilities for the chair and for the president. And I guess the document that you have prepared has been prepared taking into consideration one of the recommendations of the task force.
LISTNUM 1 \l 1484 Now, one of the recommendations of the task force was that the title of the president be changed for president and CEO. You acknowledged in your submission of last July that you were to undertake to do that, except that in the document that you filed there is no reference to the CEO function of your president. Is there any reason?
LISTNUM 1 \l 1485 MR. BARRETT: Perhaps that was an oversight. I think it's the board's intention to make that change along with the other package of bylaw changes that are proposed for June.
LISTNUM 1 \l 1486 COMMISSIONER ARPIN: So we could expect that when the bylaws will be adopted that the title of the manager of the organization is president and CEO?
LISTNUM 1 \l 1487 MR. BARRETT: Yes.
LISTNUM 1 \l 1488 COMMISSIONER ARPIN: Thank you very much for that.
LISTNUM 1 \l 1489 Now, there are contentions by some intervenors that the fund is oversubscribed. Mr. Forget earlier today said that the fund ‑‑ there is no oversubscription and obviously with the introduction of the broadcast performance envelopes the notion of oversubscription has totally disappeared. Do you agree with me?
LISTNUM 1 \l 1490 MS CREIGHTON: The notion of oversubscription has virtually disappeared for the CTF. Prior to the envelope system as you know, the fund was often oversubscribed based on demand that was out there. But with the advent of the introduction of the system what we have really done is develop a system that can respond to the basic amount of resources that we have to work with.
LISTNUM 1 \l 1491 I think we all remember in this room the days of lineups when there was lots of speculation about which projects might or might not be successful in the system and a lot of people, both applicants, producer applicants and broadcasters did a lot of work and were often disappointed when oversubscription was so heavy.
LISTNUM 1 \l 1492 So now the decisions are made by the broadcasters. As we have mentioned in our report, they are the element within our industry that is closest to the market. So the oversubscription issue in terms of volume of applications that comes to their door certainly still exists there but for the CTF it's been virtually eliminated.
LISTNUM 1 \l 1493 COMMISSIONER ARPIN: Now, in the former period, who was making the final determination of which project will be produced and which will not? Was it the board?
LISTNUM 1 \l 1494 MS CREIGHTON: No.
LISTNUM 1 \l 1495 MR. BARRETT: No, the board has never ‑‑ but since 1994 the board has never engaged at any level in project determination. It has always been a staff function. So I think the question should be answered by Val.
LISTNUM 1 \l 1496 MS CREIGHTON: Yes, the staff would make those decisions even though it was a selective system. And it would be based on a very strict interpretation of the guidelines and eligibility criteria and policy and program developments that were reflected in the guidelines.
LISTNUM 1 \l 1497 COMMISSIONER ARPIN: So nobody could make the argument that the BDUs or some BDUs or one BDU could have been disappointed by the fact that the Broadcaster Performance Envelopes had been introduced and then he had lost some power or some ability to influence production while he has no more or they have no more of that ability.
LISTNUM 1 \l 1498 MS CREIGHTON: No. The board never was involved in picking winners or lowers in terms of projects. In fact, if a current board member sitting on the board of the CTF happens to have a project in the system and they have a question about that, they have to call me and I will make a determination as to whether or not that question violates any of the conflict of interest issues.
LISTNUM 1 \l 1499 COMMISSIONER ARPIN: Now, we haven't spoken at all about the CBC. We know that the CBC is guaranteed, by the contribution agreement, 37 per cent of the money of the fund. How was that 37 per cent achieved?
LISTNUM 1 \l 1500 MS CREIGHTON: How do we come up with that amount of money?
LISTNUM 1 \l 1501 COMMISSIONER ARPIN: Yes.
LISTNUM 1 \l 1502 MS CREIGHTON: It is based on ‑‑
LISTNUM 1 \l 1503 MR. BARRETT: We were given that number in the contribution agreement.
LISTNUM 1 \l 1504 COMMISSIONER ARPIN: So it was not part of any negotiation?
LISTNUM 1 \l 1505 MS CREIGHTON: No, no. No, sorry, I misunderstood your question. The 37 per cent is a condition of the contribution agreement. I thought your question was how it gets allocated to ‑‑
LISTNUM 1 \l 1506 COMMISSIONER ARPIN: No, no. Yes, what I am saying, exactly, we fund the 37 per cent within the contribution agreement.
LISTNUM 1 \l 1507 MS CREIGHTON: That is correct.
LISTNUM 1 \l 1508 COMMISSIONER ARPIN: But who made that determination that it was to be 37 per cent rather than 35 or 43?
LISTNUM 1 \l 1509 MS CREIGHTON: That recommendation came to us as a condition of the contribution agreement, it was the Department of Canadian Heritage who recommended the 37 per cent.
LISTNUM 1 \l 1510 COMMISSIONER ARPIN: So, in effect, it was never questioned by the board, it was taken and accepted as an obligation?
LISTNUM 1 \l 1511 MR. BARRETT: It was a contractual obligation.
LISTNUM 1 \l 1512 COMMISSIONER ARPIN: Yes.
LISTNUM 1 \l 1513 MR. BARRETT: We were not party to the calculations that the Department made to arrive at the 37 per cent. Neither the existence of the envelope nor the calculation, has ever been discussed by the board.
LISTNUM 1 \l 1514 COMMISSIONER ARPIN: I see. And is the CBC/Radio‑Canada subject to broadcast performance envelope? And, if yes, how do you assess their performance?
LISTNUM 1 \l 1515 MS CREIGHTON: Yes, they are subject to the conditions with the exception of the audience measurement, but we have a contractual agreement with the CBC/Radio‑Canada that requires them to ensure that other performance targets in terms of licences regional activity are met. So they meet those other conditions of the factors within the broadcast performance envelope, but their audiences are not measured.
LISTNUM 1 \l 1516 COMMISSIONER ARPIN: And does the CBC/Radio‑Canada have the flexibility similar to the one that the private broadcaster envelope has?
LISTNUM 1 \l 1517 MS CORCORAN: With the exception of how the CBC/Radio‑Canada envelopes are derived, CBC and Radio‑Canada are subject to all the same rules of BDU usage so, yes, they do have a 15 per cent flux.
LISTNUM 1 \l 1518 COMMISSIONER ARPIN: And how will they use it? Could they trade money with another private broadcaster? Drama money for documentary money or vice versa or is it within their 37 per cent and it is in between CBC and Radio‑Canada and their specialty services that they do own?
LISTNUM 1 \l 1519 MS CORCORAN: If CBC were to transfer funds with another broadcaster, a private broadcaster, they would have to do so on a dollar‑for‑dollar basis. So the amount that they access or they have, you know, at their disposal to work with would never exceed 37 per cent.
LISTNUM 1 \l 1520 COMMISSIONER ARPIN: And so that would not be different than the members of ATEC and the other ‑‑ because I, on your website yesterday, was checking and I saw that Télé‑Québec has traded some drama money with TVA for their documentary money.
LISTNUM 1 \l 1521 MS CORCORAN: That is correct. They would have traded on a dollar‑for‑dollar basis.
LISTNUM 1 \l 1522 COMMISSIONER ARPIN: And the numbers add up to the penny.
‑‑‑ Laughter / Rires
LISTNUM 1 \l 1523 COMMISSIONER ARPIN: Well, I think that is all for the time being.
LISTNUM 1 \l 1524 Thank you very much, Madam Chair.
LISTNUM 1 \l 1525 THE CHAIRPERSON: Thank you.
LISTNUM 1 \l 1526 Commissioner Morin.
LISTNUM 1 \l 1527 COMMISSIONER MORIN: I salute the A‑team, but beware, because yesterday at the Super Bowl it is the B‑team who won the match.
‑‑‑ Laughter / Rires
LISTNUM 1 \l 1528 COMMISSIONER MORIN: So I hope that you have your earpieces ready because I will ask all my questions in French.
LISTNUM 1 \l 1529 En fin de semaine, le journal " La Presse de Montréal " publiait deux grandes pages, deux grandes pages des nouveaux succès de la télévision québécoise en France. C'était inhabituel, et on donnait trois exemples : " Les Bougons ", " Les hauts et les bas de Sophie Paquin ", " Minuit, le soir ".
LISTNUM 1 \l 1530 C'est une première. Ça ne s'est jamais produit. Jamais la télévision québécoise a autant scoré en France, finalement. Et dans ces deux pages, on ne trouve nulle part le nom du Fonds canadien de la télévision, et c'est pourtant vous autres qui êtes à l'origine du succès en France si on regarde ça dans le rétroviseur.
LISTNUM 1 \l 1531 Donc, ma question est la suivante. Vous avez parlé tout à l'heure... vous avez dit " could ", pourrait. Si on avait deux fonds distincts, comme le propose le rapport du groupe du travail, donc, un pour la télévision commerciale, avec l'argent des entreprises de distribution, et un autre pour le fonds du ministère du Patrimoine, est‑ce qu'on n'aurait pas plus de transparence?
LISTNUM 1 \l 1532 Quand je regarde votre rapport annuel, c'est bien compliqué de savoir à qui... ce n'est pas évident du premier coup d'oil, et vous savez comment les journalistes lisent rapidement. Alors, il faut peut‑être aider la communication à ce niveau là.
LISTNUM 1 \l 1533 Est‑ce que, donc, on ne pourrait pas avoir, avec ces deux fonds, plus de transparence, non seulement plus de transparence, mais est‑ce que le public consommateur et contribuable ne serait pas en mesure de mieux apprécier votre travail, d'apprécier la performance d'un fonds par rapport à l'autre, avec l'argent du public et l'argent privé des câblodistributeurs?
LISTNUM 1 \l 1534 Et finalement, est‑ce que vous ne seriez pas plus à l'aise pour aider des séries qui ne sont pas forcément de grand public, grand auditoire, mais qui peuvent être de qualité, financées par le ministère du Patrimoine du Canada pour Radio‑Canada?
LISTNUM 1 \l 1535 Donc, autrement dit, deux fonds, transparence publique/privée, compétition et information qu'on ne retrouve pas.
LISTNUM 1 \l 1536 C'est ma question. Elle est bien générale. Mais, spécifiquement, est‑ce qu'on ne pourrait pas avoir, et est‑ce que ça ne ferait pas du sens qu'on ait une bonne description dans vos rapports annuels de ces deux fonds, avec, d'une part, l'argent du public, et d'autre part, l'argent des entreprises commerciales?
LISTNUM 1 \l 1537 M. CARDIN : Je ne crois pas personnellement qu'il soit nécessaire d'effectuer une modification de système en profondeur pour arriver aux objectifs là que vous évoquez.
LISTNUM 1 \l 1538 Je pense qu'il s'agit là, d'ailleurs, d'abord et davantage d'un effort au niveau de nos communications. Je suis loin d'être convaincu que si le fonds détenait une participation en équité dans les projets que vous avez mentionnés que les journalistes de " La Presse " auraient davantage fait mention de notre nom.
LISTNUM 1 \l 1539 Aussi, il y a certaines émissions aussi... je voulais juste mentionner ça parce que vous avez dit que c'est une première. Ce n'est pas tout à fait le cas. On a donné certains exemples récents dans notre présentation, mais la vente de produits et d'émissions télévisuelles québécoises par voie de format s'effectue depuis nombreuses années.
LISTNUM 1 \l 1540 Par exemple, je dirais " Un gars, une fille " a été la première émission vendue en format aux États‑Unis, a été vendue dans plus de 30 territoires. Il y a " Le cour a ses raisons " qui est dans la même situation. Il y a une très longue liste.
LISTNUM 1 \l 1541 CONSEILLER MORIN : Mais ce que je voulais dire surtout, c'est d'un coup comme ça là, et ce n'est pas pour rien qu'on fait deux pages.
LISTNUM 1 \l 1542 M. CARDIN : Oui, oui. Tout à fait! C'est que là, il y a des annonces simultanées.
LISTNUM 1 \l 1543 CONSEILLER MORIN : C'est parce qu'il y en a plusieurs. Il y a beaucoup d'exemples.
LISTNUM 1 \l 1544 M. CARDIN : Oui, et je pense qu'on doit s'en féliciter justement. C'est qu'on est arrivé à voir développer un tissu industriel et une expertise au sein de notre industrie au niveau créatif et au niveau des affaires qui fait en sorte qu'on peut maintenant compétitionner à l'international, et je pense que notre priorité au fonds est justement d'améliorer notre stratégie de communication en produisant des outils comme l'extrait audiovisuel que vous avez vu.
LISTNUM 1 \l 1545 Je vous dirais qu'il y a d'autres fonds qui sont dans la même situation. Ce n'est pas toujours évident. Par exemple, dans l'article, je suis convaincu qu'ils ne vous ont pas dit non plus que ces émissions là étaient soutenues via les crédits d'impôt ou que peut‑être le Fonds Rogers ou le Fonds Bell a mis de l'argent dans ces fonds là également.
LISTNUM 1 \l 1546 Alors, ce n'est peut‑être pas dans la pratique journalistique, et je pense que pour nous, en résumé, l'important, c'est de raffiner et de bonifier notre stratégie de communication.
LISTNUM 1 \l 1547 CONSEILLER MORIN : En fait, je reviens un petit peu pour quelques secondes là‑dessus.
LISTNUM 1 \l 1548 C'est que si vous aviez deux fonds qui soient mis en compétition l'un avec l'autre, le public et le privé ‑‑ dans ce cas là, il y en avait deux de Radio‑Canada et une de TVA ‑‑ bien, on verrait à la fin de l'année, très simplement, la performance des deux fonds en des termes qui accrochent le public au niveau des séries, tandis que là, on les retrouve partout, mais finalement, on ne voit pas très bien, dans la revue de presse et à des moments forts, toutes les séries, autant du côté anglophone que francophone, pour lesquelles vous êtes à l'origine, finalement.
LISTNUM 1 \l 1549 M. CARDIN : Oui. Encore là, c'est que je ne suis pas convaincu que les deux fonds seraient en compétition. Ce serait deux fonds distincts, et comme madame Creighton en a fait part dans son intervention, une question qui se pose ‑‑ nous n'avons pas la réponse ‑‑ c'est où se retrouverait Radio‑Canada dans ce système là.
LISTNUM 1 \l 1550 Et le système des enveloppes, comme on l'a expliqué, est un système qui est basé sur la concurrence et sur la performance. Plus une émission obtient de cote d'écoute, qu'elle soit à l'antenne de TVA, TQS, TV5, Radio‑Canada, plus en bout de piste l'enveloppe du diffuseur devrait être bonifiée.
LISTNUM 1 \l 1551 CONSEILLER MORIN : Mais dans ce cas là...
LISTNUM 1 \l 1552 M. CARDIN : Alors, c'est déjà un système axé sur la compétition.
LISTNUM 1 \l 1553 CONSEILLER MORIN : Dans ce cas là, Radio‑Canada se retrouverait dans le fonds public.
LISTNUM 1 \l 1554 M. CARDIN : Ça, ce n'est pas une décision que nous prendrions, mais plutôt une décision...
LISTNUM 1 \l 1555 CONSEILLER MORIN : Mais c'est au niveau de livrer l'information pour qu'on la saississe.
LISTNUM 1 \l 1556 M. CARDIN : Mm‑hmm.
LISTNUM 1 \l 1557 CONSEILLER MORIN : Je vais juste revenir sur la communication parce que je trouve ça important. On ne serait peut‑être pas ici... vous avouez un peu qu'il y a eu des lacunes au niveau des communications. On ne se retrouverait peut‑être pas ici si on savait davantage tout ce qu'a fait le Fonds canadien de la télévision.
LISTNUM 1 \l 1558 Quand monsieur Shaw, par exemple, publie dans le " Globe and Mail " de grands articles pour dire que ce Fonds canadien de la télévision, pour 2 milliards et demi depuis 10 ans, je pense, ce n'est pas grand‑chose, on ne voit pas très bien votre réplique, et je me demande si, à ce niveau là, il n'y aurait pas un effort à faire pour faire connaître mieux au public pas seulement des soirées lors des audiences, mais d'une manière récurrente, surtout avec les résultats que vous avez.
LISTNUM 1 \l 1559 MS CREIGHTON: Thank you. I apologize, I will give my response in English.
LISTNUM 1 \l 1560 COMMISSIONER MORIN: That is okay.
LISTNUM 1 \l 1561 MS CREIGHTON: Yes, we certainly believe that the CTF needs to be very aggressive and more aggressive in terms of getting the word out there amongst the public, decision makers and our contributors about the work that we do and the results that we have spoken to this morning.
LISTNUM 1 \l 1562 So in that regard we, this year, just within the last few months, launched a very large government relations, public relations and communications campaign that resulted in a number of PSAs which we are very pleased the broadcasters have been airing this week, one of them right in the pre‑game of the Super Bowl ‑‑ just think of the audiences that will bring ‑‑ and a strategy to inform people.
LISTNUM 1 \l 1563 We work within a limited budget. To do so, we will use as many resources as we can bring to bear to take the good word out but we are constrained within a certain amount of administration for the Fund. So we have to balance how much we spend on that activity because our primary motive is to make sure the majority of our money goes onto the screen for Canadians to watch.
LISTNUM 1 \l 1564 But we would agree, we will do a much better job of communicating our story in the future and have just launched a campaign to do so.
LISTNUM 1 \l 1565 MR. BARRETT: My only addition would be to say that the board was very strongly of the view that we should not be using the Fund's money to reply directly and that, as a practical matter, all roads lead to this room and we should prepare to tell our story both in the manner that Val has summarized and also to you in this room.
LISTNUM 1 \l 1566 CONSEILLER MORIN : On peut espérer, donc, que, avec cette nouvelle campagne, on aurait moins de publicité comme celle‑là au cours de la prochaine année?
LISTNUM 1 \l 1567 M. BARRETT : Oui.
LISTNUM 1 \l 1568 CONSEILLER MORIN : Merci.
LISTNUM 1 \l 1569 THE CHAIRPERSON: Well, thank you very much for your patience this morning in answering our questions. We know we will see you again later this week. We will now take a 15‑minute break. Thank you.
‑‑‑ Upon recessing at 1101 / Suspension à 1101
‑‑‑ Upon resuming at 1116 / Reprise à 1116
LISTNUM 1 \l 1570 THE SECRETARY: We will now hear the presentation of the Canadian Film and Television Production Association.
LISTNUM 1 \l 1571 Appearing for CFTPA is Guy Mayson, who will introduce his colleagues. You then have 15 minutes for your presentation. Thank you.
PRESENTATION / PRÉSENTATION
LISTNUM 1 \l 1572 MR. MAYSON: Good morning, commissioners, it is a pleasure to be here. A very distinguished group of commissioners may I say.
LISTNUM 1 \l 1573 My name is Guy Mayson and I am the President and CEO of the Canadian Film and Television Production Association.
LISTNUM 1 \l 1574 With me today are Sandra Cunningham to my immediate left, President of Strata Films in Toronto, who is Chair of the CFTPA board. She is the Co‑Producer of such Canadian features as The Statement, Being Julia, Where the Truth Lies and, most recently, Fugitive Pieces, and the theatrical feature‑length documentary, 27.
LISTNUM 1 \l 1575 To Sandra's left is Ira Levy of Breakthrough Films and Television in Toronto, who is Co‑Chair of our Broadcast Relations Committee. Among the programs Ira has executive produced are Atomic Betty, The Adventures of Dudley the dragon, Kenny vs. Spenny and the documentary series Little Miracles, and King & Country.
LISTNUM 1 \l 1576 To my far right, Julia Keatley, President of Keatley Entertainment in Vancouver. She is a Co‑Creator and Executive Producer of the drama series Cold Squad and Godiva's. Julia co‑chairs our Broadcast Relations Committee.
LISTNUM 1 \l 1577 And to my immediate right, Kevin DeWalt, President of Minds Eye Entertainment of Regina. Kevin recently produced a mini series The Englishman's Boy based Guy Vanderhaeghe's Governor General's Award‑winning book, and he's currently in post‑production on the Canada‑France feature film Walled In.
LISTNUM 1 \l 1578 Ira, Julia and Kevin have all been past chairs of the CFTPA and each have served as the Association's representative on the CTF board.
LISTNUM 1 \l 1579 Also with us today I am pleased to say is John Barrack, CFTPA's National Executive Vice‑President and counsel.
LISTNUM 1 \l 1580 The CFTPA represents almost 400 companies that create, finance, produce, distribute and market feature films, television programs and interactive content for new digital platforms. The producers on our panel are here to share with you their experiencing in creating and financing quality original Canadian television programming and to discuss the impact of certain of the proposed changes to the Canadian Television Fund that were set out in the taskforce report published last June.
LISTNUM 1 \l 1581 This hearing is about one aspect, in our view an extremely important one, of the Canadian broadcasting system. This is a country that believes in regulation to further the public interest. If we do not believe this, we would not be here. Without regulation of the television sector decisions about what appears on our television screens would be based solely on the economic interests of broadcasters. In other words, it would be market‑driven completely. And given our proximity to the enormous U.S. market to our south in terms of domestic television content in the areas other than news and sports, we would effectively become the fifty‑first state.
LISTNUM 1 \l 1582 Clearly, this proceeding occurs at a critical juncture with significant implications for BDUs, broadcasters and producers, for the Commission, for the Department of Canadian Heritage and for the Canadian public and, of course, for the Canadian Television Fund.
LISTNUM 1 \l 1583 In our view the CTF plays a critical role investing in quality domestic television production. It supports drama, documentary, kids and performance programming in English and French and in the languages of Canada's indigenous peoples. Since its inception the Fund has contributed to the creation of more than 25,000 hours of independently produced productions, for total production budgets of more than $8.3 billion.
LISTNUM 1 \l 1584 The CFTPA greatly appreciates that the CRTC has provided this opportunity for interested parties to make further representations concerning the future of the CTF. Your notice of public hearing stated that the Commission received 184 submissions in response to the taskforce report, clearly an indication of how important the Fund is to the Canadian broadcasting system.
LISTNUM 1 \l 1585 We are very concerned that the notice seems to indicate that the CRTC has already accepted three of central recommendations of the taskforce report; namely the creation of a private sector funding stream, the establishment of revised criteria for this funding stream and the inclusion of a statement of objectives for that funding stream within the BDU regulations. We urge you to pause before implementing those proposals and give careful consideration to the views of those with direct knowledge and experience of the fund and its workings.
LISTNUM 1 \l 1586 In all honesty, we feel the Fund is not broken and we caution you not to be swayed by misleading comments about the performance and objectives of the Fund.
LISTNUM 1 \l 1587 Julia.
LISTNUM 1 \l 1588 MS KEATLEY: Thank you, Guy. The CFTPA strongly opposes the notion of splitting the CTF into two separate funding streams with different objectives and criteria.
LISTNUM 1 \l 1589 In Canada, we have already experimented with separate funding streams and found that it didn't work. That is why we endorse the existing CTF structure that has brought together the former separate funding streams administered by itself and Téléfilm Canada.
LISTNUM 1 \l 1590 We believe that creating two separate funding streams with different criteria and objectives would have serious irreparable consequences for the following reasons. Firstly, a privately‑funded market‑driven funding stream with a lower point threshold will diminish the Canadian productions and not necessarily result in more popular programs.
LISTNUM 1 \l 1591 In fact, our most popular programs like Corner Gas, The Border, Little Mosque on the Prairie, Degrassi: The Next Generation and ReGenesis are all distinctly and identifiably Canadian. They also enjoy international audience success. Our Appendix A located at the end of these remarks demonstrates the successful track record of CTF‑supported programs and this is by no means an exhaustive list.
LISTNUM 1 \l 1592 Secondly, implementing dual funding streams with distinct objectives and criteria would have serious repercussions for this unique public/private partnership structure. A very real consequence could be the withdrawal of the federal government's financial contributions to the production for quality Canadian television production, resulting in enormous uncertainty for the production industry and for Canadian conventional pay and specialty broadcasters.
LISTNUM 1 \l 1593 The taskforce itself rejected the notion of splitting the CTF into two separate corporations, stating that:
"Such a proposal could put at risk the public/private partnership upon which the government's contributions are based." (As Read)
LISTNUM 1 \l 1594 The inherent contradictions between the cultural objectives of the public funding stream and proposed new market oriented approach for projects supported by private contributors would inevitably result in incompatible rules and guidelines and a major disconnect between the two streams.
LISTNUM 1 \l 1595 It is not clear at all how these two streams would interact. The result appears to be two smaller funding envelopes and a smaller per‑project contribution. For producers, this is a step backwards from the goal of a proper financing model for Canadian production.
LISTNUM 1 \l 1596 Setting up two funding streams with separate objectives and eligibility criteria will substantially increase the administrative costs of the CTF and effectively undo the efficiencies realized by amalgamating the separate funding streams that were originally administered by the CTF and Téléfilm Canada separately.
LISTNUM 1 \l 1597 Creating hits isn't just a matter of allocating funding on the basis of audience success. The best way to attract and retain an audience is through an effective partnership between broadcaster and producer. The broadcast envelop system promotes this because it rewards broadcasters who achieve largest audiences and puts the most funding support into productions they air.
LISTNUM 1 \l 1598 A focus on return on investments combined with a diminished emphasis on the Canadian aspects of a production will result in funding support going to programs with the greatest level of foreign investment, the very programs that have the least need of funding support. This type of programming already exists. It is made for foreign markets with foreign creative talent that often accompanies foreign presales. We create about $1 billion worth of such programming annually in Canada.
LISTNUM 1 \l 1599 These projects are eligible for federal and provincial tax credits. This CTF financing model has allowed the Fund to support strongly Canadian programming. The Canadian broadcasting system is shaped by our geography. We live next door to the country that is the largest producer of English‑language entertainment in the world and most of that U.S. production, from the excellent to the mediocre, is available to Canadian viewers from Canadian and American broadcasters whose services are provided over the air via cable and satellite.
LISTNUM 1 \l 1600 This accident of geography puts Canadians at a particular disadvantage when it comes to creating domestic television content. Without the financial support provided by the CTF many of the most popular Canadian drama, kids' and documentary programs that attract significant audiences in Canada and around the world would not be made in the future.
LISTNUM 1 \l 1601 Ira.
LISTNUM 1 \l 1602 MR. LEVY: Thank you, Julia.
LISTNUM 1 \l 1603 The CFTPA is pleased that the taskforce report has recognized the need for a better funding model for Canadian production. Its recommendation that the CTF should increase the minimum broadcast licence fee threshold and reduce the amount of federal tax credits permitted to be included in the financing structure at evidence of this.
LISTNUM 1 \l 1604 The Fund has put in place a number of measures that contribute to this objective. For one thing, the CTF has encouraged broadcasters to increase their licence fee commitments by linking its licence fee top‑up contributions to the broadcast licence fee. This push for higher broadcast licences for CTF‑funded productions has helped our sector to create high‑quality entertainment programming for Canadian television audiences.
LISTNUM 1 \l 1605 But you have to recognize that Canadian broadcast licences at about 30 per cent of budget for CTF‑funded productions are much lower than in countries like the U.S. and the UK where the broadcast licence is generally between 70 to 80 per cent of the total production budget.
LISTNUM 1 \l 1606 And even with federal and provincial tax credits there still is a funding gap. Not only is the CTF pie not getting substantially bigger, production costs are increasing steadily because of inflation, because of higher payments to the guilds and unions we engage, because broadcasters are requiring us to produce in HD and to provide supplementary content for non‑broadcast digital platforms. And because our audiences want to see, in Canadian programs, the high production values they are familiar with from American and British shows that are made with substantially higher budgets.
LISTNUM 1 \l 1607 While other elements of the program financing equation, such as tax credits and foreign program buys, which are calculated as a percentage of budget, are expanding Canadian broadcast licences in drama are essentially capped. In other words, one of the most important elements to Canadian broadcast contribution is falling behind. And this is counter‑productive, because Canadian broadcasters keep saying that they want to see larger Canadian audiences for Canadian programming.
LISTNUM 1 \l 1608 If we are to put Canadian television production on a sound footing we need to ensure a better production funding model with higher contributions from broadcast licence fees, strong promotional and scheduling support for Canadian productions and larger per‑project contribution from the Fund. This means, as the Commission has suggested, finding additional sources of funding for the CTF, not reducing the finite resources currently available.
LISTNUM 1 \l 1609 Kevin.
LISTNUM 1 \l 1610 MR. DeWALT: Thanks, Ira.
LISTNUM 1 \l 1611 The CFTPA would like to counter some of the criticisms that have been made about the effectiveness of the Fund. The CTF is a flexible funding body constantly adapting to new realities in the broadcasting, production and distribution sectors. CTF‑supported programs are of high quality with many achieving critical acclaim and audience success in Canada and around the world.
LISTNUM 1 \l 1612 When the Gemini Awards were handed out last September and October in Toronto and Regina 41 of the winners were associated with CTF‑supported programs. These included everything from best drama series, Slings & Arrows from Rhombus Media; best TV movie, Doomstown from Sarrazin Couture Entertainment; best dramatic mini series, Dragon Boys from Anchor Point Pictures; best social political documentary, Fatherland from Barna‑Alper Productions; best children's non‑fiction programming, Make Some Noise from Omni Film; and best biographic documentary, Dangerous When Provoked: The Life & Times of Terry Mosher, Kaos Productions.
LISTNUM 1 \l 1613 What better proof does one need that the Fund provides a market‑driven system of funding support than the fact that a broadcaster in tune with its market is willing to licence a program?
LISTNUM 1 \l 1614 The CRTC has asked what additional sources of revenue it should consider to increase CTF funding. The CFTPA is clearly on record in asking that the CRTC eliminate the exceptions it has granted to the mandated requirement that BDUs contribute 5 per cent of revenues derived from broadcasting activities to independently‑administered production funds as originally proposed in drafting the broadcasting distribution regulations.
LISTNUM 1 \l 1615 If the Commission were to make this adjustment, we estimate that the CTF would benefit from an additional $80 million annually of program funding support. This would greatly assist the Fund's ability to meet the various demands on its resources and would balance the additional financial input that the taskforce has recommended that broadcasters make through higher licence fees.
LISTNUM 1 \l 1616 The broadcaster contribution would be further enhanced if the CRTC were to disallow the counting of CTF licence fee top‑ups as eligible Canadian program expenditures and if broadcasters were encouraged to revert to the historical licensing terms of four plays over three years.
LISTNUM 1 \l 1617 Like Ira and Julia, I have represented the production community on the CTF Board. That experience was both frustrating and rewarding. The producer representatives didn't win every battle, but we are convinced that the consensus positions that have evolved are in the best interests of the Canadian Broadcasting system.
LISTNUM 1 \l 1618 Among the things that we fought for are higher broadcast licence fees and the encouragement of regional production.
LISTNUM 1 \l 1619 We have also worked very hard to create appropriate producer safeguards that are enforceable by the CTF staff.
LISTNUM 1 \l 1620 As a former member of the CTF Board, I believe that the success of the CTF is more than partly attributable to the fact that it has had since its inception a stakeholder Board. Because broadcasters and producers and distribution companies are all in the room together, what happens is that self interest gives way to finding common ground and solutions are devised that best serve the Canadian Broadcasting system as a whole.
LISTNUM 1 \l 1621 Sandra.
LISTNUM 1 \l 1622 MS CUNNINGHAM: Thank you, Kevin.
LISTNUM 1 \l 1623 My colleagues on this panel, Ira, Julia, Kevin, as you've heard, have all represented this association on the CTF Board and, as importantly, each of them has been a producer of commercially and culturally important programming.
LISTNUM 1 \l 1624 We cannot in good conscience appear before you this morning without addressing one recommendation of the Task Force Report that has profound impact on our membership, on the fund itself and for the Canadian television industry, and that is the issue of Board representation.
LISTNUM 1 \l 1625 The Task Force Report has recommended that producer representatives should be removed from the Board. The rationale for this recommendation is to counter any perception of conflict of interest since independent producers are deemed to be direct recipients of CTF funding.
LISTNUM 1 \l 1626 It proposes that some other means be found of ensuring that the perspectives of the independent production sector represented and contribute to decision‑making possibly through an advisory committee.
LISTNUM 1 \l 1627 This suggestion both ignores the invaluable contribution that our representatives have made over the years and demonstrates a profound misunderstanding of the broadcaster/producer relationship.
LISTNUM 1 \l 1628 It also ignores the fact that the broadcaster and BDU representatives on the Board are also potentially conflicted.
LISTNUM 1 \l 1629 In fact, the broadcaster performance envelope system is a prime example of how producers and broadcasters, working together, have encouraged the CTF to develop a new funding mechanism that encourages more market input.
LISTNUM 1 \l 1630 In fact, as referenced by Kevin, production representatives were initially adamantly opposed to the envelope system because we considered it to put too much control in the hands of the broadcasters, but it also serves an illustration of how members of a stakeholder Board were able to work together to develop an efficient program funding mechanism that takes into account market forces.
LISTNUM 1 \l 1631 With regard to accountability and compliance, the CFTPA considers that a strengthened broadcaster/producer relationship is essential. We have proposed that this can best be achieved through effective terms of trade and set out key principles governing contractual relations.
LISTNUM 1 \l 1632 The CFTPA appreciates the role the Commission has played in encouraging broadcasters to negotiate such agreements. But given the striking imbalance and the negotiating position between large broadcast ownership groups and smaller medium‑sized production companies, we have also asked the CRTC to take a more active role by requiring broadcasters to report annually on their dealings with independent producers and oversee an effective dispute resolution process.
LISTNUM 1 \l 1633 Guy.
LISTNUM 1 \l 1634 MR. MAYSON: Thank you, Sandra.
LISTNUM 1 \l 1635 No one knows better than the production community the difficulty of putting together the various financial components that enable the creation of quality Canadian drama, documentary, children's and performance programming.
LISTNUM 1 \l 1636 We sincerely hope that the outcome of this proceeding is a revitalized CTF that serves as a more effective support to the financing of quality Canadian television production, but there is or should be a bigger goal, to preserve and enhance the ability of the Canadian television sector to build audiences now and in the future for quality Canadian programming that is properly funded and, therefore, sustainable.
LISTNUM 1 \l 1637 The future direction of the CTF is of enormous importance to our membership. We appreciate that in putting together its Task Force Report the CRTC had a difficult job in trying to balance competing viewpoints, but the purpose of this review should not be to make concessions to divided interests.
LISTNUM 1 \l 1638 Before implementing substantive changes to the CTF, the Commission must weigh the risks of recommending substantive change and give due consideration to the consequences.
LISTNUM 1 \l 1639 Thank you for your attention. We would be pleased to answer your questions.
LISTNUM 1 \l 1640 THE CHAIRPERSON: Thank you, Mr. Mayson and your colleagues.
LISTNUM 1 \l 1641 I will ask Vice‑Chairman Arpin to begin the questioning.
LISTNUM 1 \l 1642 COMMISSIONER ARPIN: Thank you, Mrs. Chair.
LISTNUM 1 \l 1643 We will start by, my first question in dealing with your oral presentation, and while I was listening to what Julia Keatley was saying, I am taking page 6 at the bottom where she says:
"The best way to attract and retain an audience is through an effective partnership between broadcaster and producer." (As read)
LISTNUM 1 \l 1644 COMMISSIONER ARPIN: I felt that in Ira's presentation that there was somehow a dichotomy between the two things that were said.
LISTNUM 1 \l 1645 Julia was saying that it is key to have a partnership and it is how we have built success, and Ira is saying that ‑‑ well, the broadcasters are not putting enough money, and particularly in drama, and it is not there but it has been said before, their programming ‑‑ their Canadian content over the weekend or on less attractive evenings.
LISTNUM 1 \l 1646 So, I am trying to guess where finally the ‑‑ what you are really trying to say. You are saying is it really a partnership you have with the broadcaster, or is it a partnership filled with numerous or too many problems of all sorts?
LISTNUM 1 \l 1647 MS KEATLEY: I think I'm going to start that one.
LISTNUM 1 \l 1648 I think that in my remarks what we're talking about is when you're trying to achieve an audience success and you're building on that you are partners together in trying to do that.
LISTNUM 1 \l 1649 And so, therefore, the best way of reaching success is truly to be a partnership, to be agreeing about promotional strategies, to be agreeing about, you know, time slots.
LISTNUM 1 \l 1650 Some of those things then become out of our control and sometimes we don't like the level of licence fee. You know, that's always a bit of a negotiating thing.
LISTNUM 1 \l 1651 I think it's putting ‑‑ I'll let Ira speak for his comments ‑‑ but the comments that we then go to about levels of licence fees are just ways of, you know, what we've been trying to do in a lot of our remarks is deal with a better financing model for Canadian production.
LISTNUM 1 \l 1652 It's something we've been coming forward to you for a long time and we think that that is a key thing for attracting better audiences and we think that essentially broadcasters should be paying a greater portion of that.
LISTNUM 1 \l 1653 It's all a negotiation and sometimes it feels like it's a bit of an imbalance.
LISTNUM 1 \l 1654 But in terms of audience success and making the best creation of programming, that partnership is key.
LISTNUM 1 \l 1655 So, Ira, do you want...
LISTNUM 1 \l 1656 MR. LEVY: Yeah. I mean, Julia is really getting to the heart of what our partnership is about. I mean, with the CTF we have developed an envelope, so we can develop a project with a broadcaster. That's a very good starting point, that's a very effective use of the CTF.
LISTNUM 1 \l 1657 When it gets to the actual financing of the show, there's an inequity in terms of what the Canadian broadcaster's putting in in terms of the licence. That doesn't mean that they aren't a partner, it just means that they can be a stronger partner and, therefore, help to contribute to make a much better program, just like they do in terms of licence fees in the U.K. and in the U.S.
LISTNUM 1 \l 1658 So, again, it's not so much that we see them as ‑‑ there's a disconnect about them not being a good partner or a bad partner, it's just that they have to be more of an equal partner in terms of putting money into the project.
LISTNUM 1 \l 1659 COMMISSIONER ARPIN: Now, from your own perspective, what are the reasons why the licence fees are much smaller in Canada than in other foreign countries, because from studies that I have seen it is also the case with France and Australia where the licence fees are higher than here in Canada.
LISTNUM 1 \l 1660 Basically, from the perspective of CFTPA, what are the historical factors that have gone into having so lower fees?
LISTNUM 1 \l 1661 MR. MAYSON: That's a big question, Commissioner Arpin, but it's a very good one.
LISTNUM 1 \l 1662 I think it comes down to different economic models in different countries where the broadcaster is able to input more money into the production of a show that is able to recover much of the, if not all of its costs within its own market, then it's able to licence international distribution of that show and it's a very effective business model.
LISTNUM 1 \l 1663 I think the model that seems to have evolved in Canada is that, according to the broadcasters, it's virtually impossible to recover any substantial costs from Canadian programming, so licence fees have been very low.
LISTNUM 1 \l 1664 And the trend has been though clearly is that much more money has spent traditionally over the years in acquiring foreign programming vis‑a‑vis Canadian programming and there's been a fairly substantial difference between the two.
LISTNUM 1 \l 1665 I think we would say ‑‑ we would say that we need a more viable model in Canada, where I think licence fees may not ever be the level of the United Kingdom or the United States, but higher than where they are now.
LISTNUM 1 \l 1666 COMMISSIONER ARPIN: And are you trying to achieve that; are you having discussions with them or is it something that historically it has been discussed and it is no more on the table?
LISTNUM 1 \l 1667 MR. MAYSON: It is a constant discussion point I think and to be fair I think, historically, looking at broadcasters' contributions to, particularly to CTF‑funded programs, their licence fee levels have changed and risen but largely due to the fact that the CTF has imposed those kinds of thresholds on the broadcasters.
LISTNUM 1 \l 1668 But I think too ‑‑ I think too as the economic model changes I think there's a potential for Canadian shows to sell internationally grows and we're seeing more of that now.
LISTNUM 1 \l 1669 I think we're taking that discussion to another level with all of the broadcasters and partly in the context of just every business deal we're doing, but also in the context of looking at the terms of trade discussions that we're involved with right now too.
LISTNUM 1 \l 1670 COMMISSIONER ARPIN: Do you want...
LISTNUM 1 \l 1671 MS CUNNINGHAM: Just one addition.
LISTNUM 1 \l 1672 I mean, certainly one of the successes for producers working on the stakeholder Board of the CTF was to work with broadcasters to try and create higher levels of broadcast licence fees and that did happen.
LISTNUM 1 \l 1673 So, that was one of the ways in which producers worked together, and I think it was actually hammering it out over time as the industry evolves and it was the two sitting down at the table, and that continues through our terms of trade and other negotiations.
LISTNUM 1 \l 1674 COMMISSIONER ARPIN: In another section of your oral presentation, it is when Kevin DeWalt spoke, he was referring to the fact that the CTF could get 80‑million more dollars if there was no secondary production funds administered by the contributors.
LISTNUM 1 \l 1675 But that triggers in my mind the following question, that would make a second wicket to go to get some further financing and complete financing for CTF programs or for non‑funded CTF programming.
LISTNUM 1 \l 1676 Isn't it a better solution for most of your members, because obviously you have a broad membership, they are not all doing CTF‑funded programming, for various reasons, but they are beneficiary of the opportunity to go and deal very specifically with some ‑‑ those smaller production fund.
LISTNUM 1 \l 1677 MR. DeWALT: The original mandate for the CRTC when the CTF was started in '94 was that five per cent of the BDUs was to go towards the CTF, and what's happened over time is that that five per cent has been whittled down to ‑‑ I don't know the exact number ‑‑but about three per cent and, you know, many years ago some of it was carved off for community channels, for Tier A broadcasters, some of it was carved off for, you know, the various funds that you refer to.
LISTNUM 1 \l 1678 I think it's our feeling that we would support the CRTC going back to the mandate that the five per cent would go into the CTF which would help generate that extra funds, but that the broadcasters would also continue to contribute to their community channels.
LISTNUM 1 \l 1679 We think that's just an important thing for them to do, especially the Tier A broadcasters, and they should have additional funds to support other kinds of programming that are not necessarily a CTFable project.
LISTNUM 1 \l 1680 So, we're looking for additional funds. You know, the CTF said that the particular programs that we now have in place have met the requirement of the broadcasters in terms of the funding request but, you know, what's not been talked about is the level of productions that go to broadcasters who are looking for CTF support that don't get the green light from the broadcasters because of lack of funds in the system.
LISTNUM 1 \l 1681 So, we feel that this is an obvious way to go back to the original mandate of the CRTC.
LISTNUM 1 \l 1682 COMMISSIONER ARPIN: But earlier this morning we heard CTF saying that even they are taking into account non‑funded programs when they are building up the broadcast performance envelope and they used the example of "Corner Gas" as being one case where CTV, who is not seeking CTF support, is generating significant audience and they could claim that audience as a factor in the development of their broadcaster performance envelope.
LISTNUM 1 \l 1683 There are also other programming, no examples were given, but that are only supported by the Shaw Rocket Fund or the Rogers Television Fund and are also getting significant audience.
LISTNUM 1 \l 1684 MR. DeWALT: But what they're not reporting is the $9‑million a year that's put into development certainly on the ‑‑ is that just the English side or is that both English and French, the 9‑million development? Do you know?
LISTNUM 1 \l 1685 MS KEATLEY: That's both.
LISTNUM 1 \l 1686 MR. DeWALT: That's both. The $9‑million a year in development that broadcasters and producers can trigger, what's not been told is, is what of those projects that have been developed that are commercial that could reach an audience that are not getting funded because of lack of funds in the system.
LISTNUM 1 \l 1687 And that's really what we're focused on today is the projects that are being developed that a broadcaster says, you know, if there was more money at the CTF we would trigger that series or we would trigger that documentary.
LISTNUM 1 \l 1688 And that's really what we're focused on. What our members are saying is that we're developing projects to the point of final scripts, final financing structures but are being told by broadcasters because of the lack of funds you haven't just quite, you know, made the top.
LISTNUM 1 \l 1689 And in a lot of cases, and certainly in drama, most broadcasters have enough money to trigger one project, yet they may be developing eight or 10 or 15 per year.
LISTNUM 1 \l 1690 COMMISSIONER ARPIN: Okay.
LISTNUM 1 \l 1691 MR. MAYSON: If I can just comment on that, Commissioner Arpin.
LISTNUM 1 \l 1692 COMMISSIONER ARPIN: Yes.
LISTNUM 1 \l 1693 MR. MAYSON: I think there is, especially based on the discussion this morning with the CTF, I think there's a little bit of a myth growing now about the fund is no longer over subscribed and I think that's exactly what Kevin is getting to the point, that because essentially broadcasters are able to control their own envelopes now and they have a certain amount of money to spend and then they effectively make those decisions about what they want to spend it on, and then the producer in turn that makes an application sort of looks at, everything is sort of fine and there's no more projects up there, but there's a huge demand in the system for additional hours of Canadian content, people are trying to find other ways of financing obviously and using the independent funds, you rightly say.
LISTNUM 1 \l 1694 But to say that the fund is no longer over subscribed is a little bit of a myth and doesn't really reflect the reality of how difficult it is to raise financing for the huge demand of content that's out there, so...
LISTNUM 1 \l 1695 MR. LEVY: Perhaps one way of maybe looking at it is that when the fund was set up you had somewhere in the neighbourhood of $200‑million that was ‑‑ this was in the 90s, and that was supporting CTF‑type programming, and here you are a scant 13 years later with a plethora of new channels that have a real demand for putting Canadian content on, sometimes it's conditions of licence, sometimes that's what audiences want, a combination of those different factors.
LISTNUM 1 \l 1696 There is a lot of shows ‑‑ there are a lot of shows that if the money was there at the CTF, if there was increased funding at the CTF that would get produced, a lot more that would get produced.
LISTNUM 1 \l 1697 COMMISSIONER ARPIN: Thank you.
LISTNUM 1 \l 1698 You didn't raise any concern, at least in your oral presentation this morning, about the 10/10 or versus the 8/10 CAVCO threshold, and what is the CFTPA's specific views regarding that recommendation of the Task Force?
LISTNUM 1 \l 1699 MR. MAYSON: I'll comment on that quickly, but I'll let others comment too.
LISTNUM 1 \l 1700 I think we've ‑‑ you know, the basic CAVCO definition is actually six out of 10 and there's a great deal of room to move and that it provides a lot of opportunity for the use of foreign talent and still remaining Canadian, and I think that's a wonderful thing, it encourages production and there's a great deal of production going through the CAVCO definition, most of which I think are now in the, you know, seven, eight, nine, 10 range generally.
LISTNUM 1 \l 1701 I think the eight out of 10 to us is a bit of a funny number, frankly, and because of the weighting of the CAVCO point system really, really enables you to use a foreign director or a foreign script writer and I think which ‑‑ again, not a terrible thing, but in our view just completely out of sync with the objectives of the CTF which should be about Canadian stories written by Canadians and directed by Canadians and acted by Canadians. So, it's...
LISTNUM 1 \l 1702 I'll leave it there.
LISTNUM 1 \l 1703 MS KEATLEY: Just to add ‑‑ and I believe the CTF staff dealt with this as well this morning ‑‑ there are actually long‑standing exceptions within each genre that I think were put in place in '98, '99 in which you can do that and most of those are very market‑driven for those specific genre's programming.
LISTNUM 1 \l 1704 So, it's finding ways of addressing very specific things with each genre, so...
LISTNUM 1 \l 1705 COMMISSIONER ARPIN: So, could I surmise your view by saying that the criteria that CTF has been using and the flexibility that has been introduced over the years are meeting the spirit of allowing some sort of contribution into a Canadian production by a foreign artist or whoever, producer, director, writer, whatever it is.
LISTNUM 1 \l 1706 MS KEATLEY: I think what we're saying is we're fine with the rules as they exist now being at a 10 out of 10 with the various exceptions that happen.
LISTNUM 1 \l 1707 And I think we actually did address it in our oral remarks, we did talk about this, but there is ‑‑ this kind of programming actually does exist out there and is getting funded and getting tax credits and it's, you know, fairly buoyant within the system.
LISTNUM 1 \l 1708 It's an interesting question. I mean, as someone who sat on the Board for years, there was a lot of discussion about this from the very beginning and because there was such demand for this money it was felt that it really needed to be focused on the Canadian elements and supporting the Canadian elements and that it goes to the overall health of our whole industry.
LISTNUM 1 \l 1709 And I think ‑‑ I mean, actually in just looking at what's happened in the last week with two shows confirmed that they've sold to U.S. networks that are essentially 10 out of 10 Canadian programming and that's ‑‑ you know, that isn't an after sale, that's they're coming in and in some situations will be simultaneously broadcast.
LISTNUM 1 \l 1710 So, I think that the whole system is actually ironically at probably its most successful right now in a 10 out of 10 system.
LISTNUM 1 \l 1711 MR. DeWALT: Just to clarify, I think the exceptions are mostly nine out of 10 is what the CTF allows.
LISTNUM 1 \l 1712 What that means is, is that does not allow you to have a writer or a director that's not Canadian because those are worth two points each.
LISTNUM 1 \l 1713 COMMISSIONER ARPIN: Mm‑hmm.
LISTNUM 1 \l 1714 MR. DeWALT: What it does allow you to do is to bring in, primarily in drama, at least either a first or second highest paid actor from out of country.
LISTNUM 1 \l 1715 And I can give you a prime example. "The Englishman's Boy", which is a miniseries that I produced, had 17 major actors that had major roles over that four‑hour miniseries. We did apply for the nine out of 10 exception on that particular project because we had a very nasty American studio boss in Hollywood that we needed an actor for and we brought in Bob Hoskins who is a U.K. actor to play that role and we did that primarily for international reasons in terms of sellability, as one factor, but also creatively.
LISTNUM 1 \l 1716 But that, you know, that particular project had a Canadian director and a Canadian writer and it was important that that was the case.
LISTNUM 1 \l 1717 COMMISSIONER ARPIN: So, as a matter of fact, the nine out of 10 protects the director and the writers and you think that gives enough flexibility?
LISTNUM 1 \l 1718 MS CUNNINGHAM: Yes. Yes, and I think it's actually really important to reinforce here that as a producers', not only a producers' association, we are very much behind that and given the nature of a public agency, the public/private partnership and the funding, we think it is important to continue to support the 10 out of 10.
LISTNUM 1 \l 1719 MR. MAYSON: And I would just add that we're ‑‑ I think as we outlined in our original brief, it just seems completely out of sync, you start creating two separate funding streams with slightly different objectives ultimately within the same fund.
LISTNUM 1 \l 1720 We're not against different types of point ratings and, you know, we've always endorsed the CAVCO definition for Canadian as a good solid level of Canadian content, but you have a certain ‑‑ you have a Canadian Television Fund with certain objectives and we think they should be respected by both sides of whatever funding components you want to create within the fund.
LISTNUM 1 \l 1721 COMMISSIONER ARPIN: Now, you did refer to another recommendation made by the Task Force which has to do with the allocation of the dollars into two different streams, and obviously you are taking a very strong position against that proposal.
LISTNUM 1 \l 1722 And could you qualify better for me why you think it cannot work within the same organization, other than having maybe a different cost for administration cost but, as a matter of principle, why two funds could not be managed by the same organization?
LISTNUM 1 \l 1723 MR. MAYSON: I think ultimately two funds could be managed by the same organization, but two funds with different criteria and different objectives, which I think is what you're trying to do ‑‑ I mean, correct me if I'm wrong ‑‑ but it strikes me you're creating two different envelopes which won't interact very effectively, so you're creating two smaller pools of dollars essentially.
LISTNUM 1 \l 1724 Right now the dollars are pooled and envelopes are calculated accordingly, but ‑‑ and everyone's complaining about the size of their envelopes, frankly, and so it strikes me you're going to be creating a series of smaller envelopes for broadcasters with different objectives within the fund, so...
LISTNUM 1 \l 1725 COMMISSIONER ARPIN: Not necessarily be different objectives. Obviously the Task Force Report doesn't deal at all with the contribution from Heritage Canada and doesn't say what they should do with the money, it's up to them to determine how that money should be managed and, obviously, they could always come to the same ‑‑ to make the decision that the money should be used in the same manner than the other stream, then obviously that alleviates some of the problems that you are discussing.
LISTNUM 1 \l 1726 In their Report, the members of the Task Force were trying to see if there wasn't a way to allow, say, the BDUs to get a better acknowledgement for their contribution, because everything is currently mixed up, everything is managed by the contribution agreement which determines the objectives and, so, the BDUs who are claiming that it is money they have contributed and that they want to know what is done with their contribution, they can't ask what is done with the government money because that's not their money.
LISTNUM 1 \l 1727 And I know that it is a very, very broad discussion of whose money it is, but I will take for the time being the assumption that the BDUs' contribution, it is the BDUs' contribution to the CTF and they would like to know more about what is happening with their contribution.
LISTNUM 1 \l 1728 MR. MAYSON: I'll let other people comment, but I think you go right to the heart of this whole discussion I think, and certainly if there's ways that the BDUs ‑‑ the viewpoint of the BDUs need to be improved or more input into objectives, it strikes me that it should be done around the Board table where they're represented or in discussions with the Department of Canadian Heritage.
LISTNUM 1 \l 1729 And, you know, I'm not sure if they're appearing this week or not, but I'd be interested to hear what they have to say about that whole process.
LISTNUM 1 \l 1730 But our view is that the objectives of the fund have been determined by the Department of Heritage and further refined over the years.
LISTNUM 1 \l 1731 I was actually in the Department at the time when the fund was put together, I'm very familiar with the objectives and what they were at the time, but they've changed considerably and they've changed because of Board input over the years and obviously input from Heritage over the years.
LISTNUM 1 \l 1732 But so ‑‑ and we're certainly not ‑‑ I think it's appropriate that the BDUs get recognition for what they do and they're making a very important contribution to the system, but it's a contribution they should be making by regulation and it's part of a great privilege of holding an important licence like that.
LISTNUM 1 \l 1733 So, I think we're not adverse to looking at different ways of doing things at all, but within the context of the objectives of this Fund we don't see any real value in creating two separate streams with different criteria.
LISTNUM 1 \l 1734 You're saying the objectives could be the same and to us they look somewhat different and that's done in part through different criteria.
LISTNUM 1 \l 1735 COMMISSIONER ARPIN: They appear to be different because we don't know what is the view of Heritage vis‑a‑vis their own stream of money.
LISTNUM 1 \l 1736 Well, you don't have the view ‑‑ well, you have the view of the Commission somehow because when they released the task force report they did state ‑‑ the Commission did state that it was an objective that the Commission was supporting.
LISTNUM 1 \l 1737 But this public process here today is to allow for further discussion on the same matter so that the Commission ‑‑ I can't say this at this time that the Commission has a ‑‑ what is the final view of the Commission. But we don't ‑‑ one thing that we don't know for sure is what is the view of Heritage and we won't get it through this process because they are not a participant in this process.
LISTNUM 1 \l 1738 MS CUNNINGHAM: If I could just add that the idea of two separate funds seem to be based on the assumption that there needs to ‑‑ we need to address something which is much more market driven.
LISTNUM 1 \l 1739 I think that what we have is a misrepresentation on some level of the fact that the market isn't at all influencing the decisions that are currently being made at the fund by broadcasters themselves. And I think the move to the Broadcaster Performance Envelopes was indeed a move with all stakeholders to try and address that and that can always ‑‑ that is continually evolving.
LISTNUM 1 \l 1740 But at the same time it also assumes that there is a perfectly formed kind of fund that can be set aside with criteria that will create successful market driven programming and that we know how to recognize hits. And I think that is ‑‑ while hypothetically there may be some merit to that, I think in our presentations and what we have evolved over the years as representatives on the CTF board is that is something that none of us can do, whether you are a producer, an actor, a writer, a broadcaster. Hits are recognized by the market. We are all interested in reaching a market and having successful programming.
LISTNUM 1 \l 1741 So I think we are trying to address the fact that even if there were two separate funds how do you ensure that one is actually addressing exclusively market‑driven forces?
LISTNUM 1 \l 1742 MR. LEVY: My only other point on this in terms of understanding how the fund actually works, and just trying to illustrate how something can actually be successful in terms of both market driven as well as something that is culturally important, I look to a program that our company has produced. It's called Atomic Betty. It's a kids' animation show and we have done it with Tele‑Tunes Canada. What is fascinating about it is that it actually had private funding from the Shaw Rocket Fund, interestingly enough. They invested some equity money into it.
LISTNUM 1 \l 1743 And so that partnership with the CTF, because that's what it was in terms of Tele‑Tunes, the CTF and Shaw, was able to produce a Canadian hit which actually we sold in well over 120 countries around the world. And not only was it a show that probably would not have been made had not the CTF been around to actually contribute ‑‑ I think it was about $1.3 million in the very first season ‑‑ but also it was Shaw's contribution in conjunction with the CTF and the Tele‑Tune licensee which made it happen.
LISTNUM 1 \l 1744 So that's how all of those funds are interconnected in the way that we go about raising our financing for projects. That's the way the system works right now.
LISTNUM 1 \l 1745 COMMISSIONER ARPIN: In your written submission, and I'm looking at your paragraph 61, you state that:
"On numerous occasions it has been the responsibility of the federal government to ensure that Canada's national public broadcaster is adequately funded and in our view this should not be achieved through the CTF." (As read)
LISTNUM 1 \l 1746 COMMISSIONER ARPIN: And my question to you is it seems that statement is directly aimed at the 37 percent that the CBC/Radio‑Canada is getting through the contribution agreement.
LISTNUM 1 \l 1747 Am I right to understand that what you are suggesting here is that all ‑‑ the federal government should keep contributing to the CTF and that all money should be used for other broadcasters than the national broadcaster?
LISTNUM 1 \l 1748 MR. MAYSON: It's a very good question. There is really two points there in the sense that over the years traditionally we have always supported a properly funded CBC and with even maximum dollars into production, but that hasn't changed. And I think this is really what's been reflected in the paragraph you are quoting.
LISTNUM 1 \l 1749 The reality is that obviously the additional dollars required, I think, to properly fund CBC's production have not been there and they have been relying heavily on the CTF. And our board reps, and certainly as an association, we have supported the 37 percent envelope, you know its development and its realization.
LISTNUM 1 \l 1750 But our paragraph that you are quoting, it still in some ways I think, reflects the policy position of the CFTPA that we would like to see a properly funded CBC that was essentially working outside the CTF.
LISTNUM 1 \l 1751 COMMISSIONER ARPIN: Which is this thing then, getting 37 percent of the total envelope of the CTF? So it means that the government through appropriation should give the CBC more money.
LISTNUM 1 \l 1752 MR. MAYSON: To me the 37 percent is a little bit of a ‑‑ you know, a chimera that has kind of evolved in that it's a number that was kind of settled on or something. And you would have to talk to CBC in terms of what it would really need to practically achieve a lot of its programming objectives. Now, something tells me that it's more than the 37 percent.
LISTNUM 1 \l 1753 COMMISSIONER ARPIN: Earlier this morning I did ask to the CTF how that 37 percent was arrived at. Do you have a better answer than the one we got?
‑‑‑ Laughter / Rires
LISTNUM 1 \l 1754 MR. MAYSON: I am sorry, I shouldn't.
LISTNUM 1 \l 1755 COMMISSIONER ARPIN: No? We better ask the CBC if ‑‑ well, we are going to hear them this afternoon so we will ask ‑‑
LISTNUM 1 \l 1756 MR. MAYSON: There you go.
LISTNUM 1 \l 1757 COMMISSIONER ARPIN: Then we will have an opportunity to discuss with them how that number was achieved.
LISTNUM 1 \l 1758 MR. MAYSON: All I would say on that, you should ask them. I think they are the appropriate responder probably, and as well as the CTF perhaps.
LISTNUM 1 \l 1759 But all I know is that there was a great deal of discussion and time and effort and board ‑‑ another area where the board came together to determine something that was mutually agreed upon.
LISTNUM 1 \l 1760 COMMISSIONER ARPIN: The CTF panel at least this morning said that it came to the contribution agreement and it is take it or leave it, and if you leave it you leave all the money aside. So they take it ‑‑ they took it and that was it.
LISTNUM 1 \l 1761 But you don't have from the CFPTA ‑‑ you were never involved into the discussions or negotiations regarding how that number was achieved?
LISTNUM 1 \l 1762 MR. MAYSON: The number was based on the CBC's historical access to the fund over the years. And I think that if there was a logic to it I think that was exactly it. And I think there was a lot of to‑ing and fro‑ing in terms of how it ‑‑ is this appropriate use of the fund, et cetera. But I think ultimately people agreed that this was ‑‑ the board agreed and I think the CFTPA ultimately agreed that given the lack of additional resources for CBC that some kind of historical access to the fund would be allowed and would be appropriate, I should say, and became enshrined in the contribution agreement with the department.
LISTNUM 1 \l 1763 It does go back ‑‑ I have to say, I think, there is not one of the traditional elements in it and it wasn't ‑‑ I think never made clear from the beginning was that to some degree the CTF was there back when it was first created and the public contribution came in, in '95‑'96. There wasn't sort of a sense that it was there to help CBC to a certain extent after a long period of budget cuts. That was never really formalized but I think it was ‑‑ it's always been sort of there in the background that the CBC should be considered, you know, an important recipient of the CTF.
LISTNUM 1 \l 1764 COMMISSIONER ARPIN: Another area of contention and you raised it in your oral remarks this morning, and the CTF also talk about it, is obviously the recommendation from the task force to remove the producers from the board of the CTF. I heard your argument in your oral presentation and in your submission.
LISTNUM 1 \l 1765 But they are ‑‑ obviously there have been numerous scenarios that have been taken into consideration and one of them is to have an only independent board of directors to an extended board of directors which will include the writers, the guilds and some of the unions and it could end up being a board of 40 people, while some others were making the argument that since the board involvement into the CTF is essentially financial, a very small board of astute and acute financial people with some ‑‑ with knowledge of production and broadcastings could make it.
LISTNUM 1 \l 1766 If you had to choose ‑‑ let's say for the sake of the discussion that this test is not what is looked at, in your view should it be a smaller board or a broader board?
LISTNUM 1 \l 1767 MR. MAYSON: I will let everyone comment on that. I think we basically ‑‑ we have basically seen the value of a stakeholder board over the years and the primary participants in the industry I think has been very important to have around the table.
LISTNUM 1 \l 1768 I think what really we objected to in what the Commission proposed was somehow singling us out as being conflicted in some way because we were recipients in some way. And to us the landscape has changed dramatically and I think it both ignored the value of a stakeholder board and the value of producer input in particular.
LISTNUM 1 \l 1769 We have never closed the door on looking at a reconfigured board to manage the CTF if it appears there is a need to consolidate in some way. You know, I think we would say though that I think stakeholder boards are very important and the advice of stakeholders around the table from all sides has been invaluable to that, to the functioning of the fund.
LISTNUM 1 \l 1770 I think some of our ex‑board reps should comment on that, actually.
LISTNUM 1 \l 1771 MS KEATLEY: I actually think the chair of the CTF, Doug Barrett, summed it up really well this morning when he spoke to the stakeholder board has allowed that aspect of unintended consequences to not happen.
LISTNUM 1 \l 1772 You are always looking forward and arguing those various things out and because you have the various perspectives that come it's happening at a board level and they are not involved in any decision making. It allows the board in fact to remain objective rather than subjective. It's almost those sorts of key factors that really go to it.
LISTNUM 1 \l 1773 And I know there was a time when Ira and I both were on the board and we started this subcommittee where we went off with the broadcasters and really hashed out some very specific things, which was really about if you want production budgets to be on average $1.2 million in English Canadian drama how do you get there? And it was a really practical thing that we went and we worked on with ourselves and our colleagues. And we ended up with a result and it was sort of them understanding really where we were coming from and this whole concept of things.
LISTNUM 1 \l 1774 So I really do think that was sort of hashed out. It was agreed it was for the best. It then becomes a policy. It wasn't about individual projects and those kinds of conflicts that happen.
LISTNUM 1 \l 1775 MR. DeWALT: I also sat on the CTF board and we were in, you know several instances where the broadcasters and the producers were at loggerheads in terms of issues. But what I will say is that the fact that the CTF has brought in the independent board members, the double majority within those independent board members, I think has clearly given the CTF the credibility of truly independence on issues.
LISTNUM 1 \l 1776 And I think, you know, producers at the end of the day are the ones that have to scrape together the financing on a production. A broadcaster can trigger a project through the CTF funding but they are never 100 percent financed. We are always as entrepreneurs always putting together that final piece whether we put it on ourselves, whether we put in our family's money, whether we use credit cards.
LISTNUM 1 \l 1777 And I think if you lose that entrepreneurism around that table ‑‑ broadcasters primarily, you know, get steady income on a monthly basis based on their fees that they take from commercials or from satellite fees or cable fees. Producers don't. We survive on a day‑to‑day basis, on a project‑by‑project basis based on our entrepreneurism. And I think if you lose that around that table I think you have lost a very critical component to have a successful CTF because it will become a one‑sided discussion.
LISTNUM 1 \l 1778 And I find that, you know, the concept of an advisory group of a bunch of producers advising to the CTF, my experience is that advisory groups are simply put in place to keep a certain element of a community quiet so that they feel that they have some influence. But at the end of the day if you are not around that board table I just feel that the system, it won't work.
LISTNUM 1 \l 1779 MS CUNNINGHAM: Just as chair, current chair of the CFTPA board of directors and someone who has not sat on the CTF board, I can assure you that one of my greatest challenges together with Guy and the agenda is keeping the CTF discussions to a reasonable length of time around our boardroom table. And what I have noticed is the incredible time and energy and devotion to improving the state of the industry that happens.
LISTNUM 1 \l 1780 So what our reps on the board do is they come back and they are representing a much larger constituency than their individual companies and they bring back all of the important issues to our boardroom table which in fact has 26 members. And all of these issues are hashed out at our table as well before any producer or CFTPA position is taken back with the CTF.
LISTNUM 1 \l 1781 That represents leveraging an awful lot of goodwill from the industry that gets brought back directly to the CTF board. And I think you don't ‑‑ that it's very hard to replace that or even, frankly, to quantify it but it's something that I have certainly witnessed in the short time that I have been chair.
LISTNUM 1 \l 1782 COMMISSIONER ARPIN: One other area of discussion, and it's based also on the recommendation made by the task force, is the increased licence fee. And I think you alluded to what was going on in other countries, but also allowing you to keep more money from tax credits.
LISTNUM 1 \l 1783 Now, on that one there seems to be some appreciation from the part of members of your community. In other instances some members of your own community are saying leave it to the market forces to decide if I'm putting more money into it or less.
LISTNUM 1 \l 1784 What is the final position of the organization?
LISTNUM 1 \l 1785 MR. MAYSON: I think the final position was what we put in our original submission which was, "Thank you very much for the recommendation." We thought it was, you know, somebody finally actually picking up on the financial realities of being a producer and actually asking ‑‑ looking for what we have been looking for increasingly in the last few years, is a better financing model for Canadian content and working, you know, equally with all the partners involved.
LISTNUM 1 \l 1786 The tax credit thing is an interesting one because obviously licence fees are important and higher licence fees are invaluable. When the tax credits were first created they were created partly as a corporate ‑‑ they are a corporate tax credit. They have become both the public funding agencies and the broadcasters immediately factored them into the budget of the project and used their leverage to sort of extract them essentially. But they are essentially a rebate on expenses which replace the old capital cost allowance.
LISTNUM 1 \l 1787 And I know exactly of which I speak because I helped put this in place back in '95 and it was very ‑‑ actually very disappointing to me to see what happened to the tax credit program because there was virtually no provision for producers to hang on to any of their tax credits. They were simply extracted from them. So we really appreciated the recommendation.
LISTNUM 1 \l 1788 I think the key point is that they should be treated as producer equity. They are essentially what the producers bring ‑‑ one of the major elements the producers bring into the project and if the producer chooses to contribute, you know two‑thirds of them or half of them or whatever then that's fine. But we really appreciated the signal that they should be allowed ‑‑ that some kind of a benchmark should be established where producers should really be hanging onto a portion of their tax credits because it's defeating the point of the program which was to capitalize small companies, much in the same way as the R&D tax credits work. So thank you for the recommendation.
LISTNUM 1 \l 1789 So what would we say? We would basically say it's producer equity. Producers should have the ability to deal with that credit but there should be some benchmark there that the producer cannot go past. And the fact that the Commission was saying that is great. Thank you.
LISTNUM 1 \l 1790 COMMISSIONER ARPIN: Obviously, it's also a matter for negotiation under the umbrella of terms of trade.
LISTNUM 1 \l 1791 MR. MAYSON: Indeed. I would agree.
LISTNUM 1 \l 1792 MR. LEVY: Well, and I think to that end John can actually speak a bit to that as to what progress we are actually making.
LISTNUM 1 \l 1793 But if you think of the system as a whole and that you have to have a healthy system to create Canadian content programming and to distribute this programming and to promote it, you have healthy broadcasters. That's a good thing. You have healthy BDUs. That's a very good thing.
LISTNUM 1 \l 1794 But you have to have healthy producers and a healthy producer means a well‑financed producer, a capitalized company. That is the way that they do it in the U.K. That's been successful at times in the United States. It's certainly been successful in Australia and, clearly, that was the purpose for the tax credits being implemented so that you could actually get a rebate, hold onto that money, use it for R&D and to capitalize your company.
LISTNUM 1 \l 1795 As that started to be forced into the financing plans of various different projects, including CTF projects, what that did was it made producers not healthy, not as healthy as the other parts of the system. And ultimately, if they are the people that are actually; one, taking the risk and; two, creating the content for the broadcasters they have to have a certain healthy capitalized existence just like the other players in the system.
LISTNUM 1 \l 1796 John.
LISTNUM 1 \l 1797 MR. BARRACK: It really goes back to your question at the beginning with respect to the partnership and where the partnership stands and what kind of partnership is it. And I think what you see is an evolution at the front end where it is a creative partnership and at the back end of the process given that lack of equality of bargaining power, quite frankly, something quite distinct from that. And in fact, the disequality in favour of the broadcaster has really harmed that ability to maintain healthy businesses quite frankly.
LISTNUM 1 \l 1798 And so I think that all of ‑‑ everything that we are saying to you funnels into that same point, which is that if the Canadian system is going to remain strong it requires healthy Canadian production companies and we are only going to achieve that if a number of factors are in play including the credit.
LISTNUM 1 \l 1799 COMMISSIONER ARPIN: Gentlemen, thank you very much. I'm returning the microphone to my colleague, the Chair.
LISTNUM 1 \l 1800 MR. MAYSON: Commissioner Arpin, if I could make one small clarification just to an earlier discussion, one of your earlier questions?
LISTNUM 1 \l 1801 We got into a number of different issues but you were referring to our position about going back to a full 5 percent going into the CTF. And somehow I think you were maybe misreading or misinterpreting or our remarks weren't very clear. But we were really talking ‑‑ we are not talking about dollars going into independent funds. We think that's very worthwhile.
LISTNUM 1 \l 1802 We are talking about dollars ‑‑ we didn't get into it in here, but really for local expression. And so we think that's something that could be taken on by the individual companies and those dollars that are now going into local expression should really be going into independent funds; so just to clarify.
LISTNUM 1 \l 1803 COMMISSIONER ARPIN: Appreciate your comment which is slightly different than the discussion we had with you ‑‑ we had before.
LISTNUM 1 \l 1804 THE CHAIRPERSON: Thank you.
LISTNUM 1 \l 1805 I just have a couple of follow‑up questions based on the discussion with the Vice‑Chair. And I too want to go back to the discussion about licence fees.
LISTNUM 1 \l 1806 And I believe it was you, Ms Cunningham, who talked about the increase in the licence fees was a result of the producers working with the broadcasters. And I have here the CTF document that gives me the licence fee threshold by language, by genre.
LISTNUM 1 \l 1807 So these thresholds are a result of those discussions that the producers and the broadcasters had and approved, I assume, by the CTF board?
LISTNUM 1 \l 1808 MR. LEVY: Yes, they were and in fact Julia was alluding to it earlier. We had a number of different sessions over a period of six to nine months where we worked with the broadcasters and with the CTF staff at the time.
LISTNUM 1 \l 1809 And we sat there and interestingly enough we put up a model for financing. We said, "How do you properly finance a show in Canada?" And we took each one of the genres and we started with drama and we said, "Forget that you have to pay some of the money or that we have to invest some of the money and imagine that the CTF has unlimited funds for the moment."
LISTNUM 1 \l 1810 And then what we did is we put together all the pieces of the puzzle that existed in a very complex financing system that exists out there and we tried to simplify it down to its basics. We said that there is going to be some money from the Canadian Television Fund. There is going to be a proper licence fee, at least a proper threshold because the budget is going to be "x", $1.2 million and $1.4 million per hour for drama or whatever it happened to be, and then the producers will put in their share as well.
LISTNUM 1 \l 1811 And so that was something that we worked on jointly.
LISTNUM 1 \l 1812 THE CHAIRPERSON: And how long have these thresholds been in place at this level?
LISTNUM 1 \l 1813 MR. LEVY: At this level, well, three years, yes.
LISTNUM 1 \l 1814 MR. MAYSON: Three or four years.
LISTNUM 1 \l 1815 THE CHAIRPERSON: And is it now therefore your position that ‑‑ to sustain your comment that licence fees should increase, that production has just simply become much more expensive because the demands of the broadcasters are greater?
LISTNUM 1 \l 1816 MR. MAYSON: Well, the demands on the broadcaster are greater and the demands that the broadcaster puts on the producer are greater. And so where we might have been dealing with a $1 million or a $1.2 million per hour drama budget for a series, if there was a threshold that the broadcaster was putting in $300,000 or $315,000 per hour, the broadcaster ‑‑ sorry, the production budgets have now escalated to $1.5 million per hour to be competitive and because of inflation and various other very well justified reasons. But that threshold ‑‑ at least that basic threshold has not gone up.
LISTNUM 1 \l 1817 In some cases broadcasters do put in more money as a licence fee. But we would like to see it as the threshold, as the very basic threshold actually raised, so that it actually makes sense because there is just too big of a gap going into the production of those shows.
LISTNUM 1 \l 1818 THE CHAIRPERSON: Okay.
LISTNUM 1 \l 1819 The other point that the CTF made this morning is that above average licence fees form part of the factors that go into the BP allotments. Is it your position that it's not enough of an incentive for broadcasters to go above licence fee averages?
LISTNUM 1 \l 1820 MR. MAYSON: I think ‑‑ I mean, I will take that one and let people comment.
LISTNUM 1 \l 1821 I think that's an appropriate way to weight. I think it's an interesting factor to bring into the calculation of an envelope. I think licence fee levels ‑‑ the bottom line is licence fee levels do need to go up and I think that the recognition and that sort of a waiting factor that they are trying to encourage provide incentives.
LISTNUM 1 \l 1822 We would still maintain I think that the licence fees levels are unrealistically low. The CTF should be ‑‑ and I know our reps are certainly trying to increase that and not just with the CTF, frankly, but across the board is probably most important.
LISTNUM 1 \l 1823 We would also ‑‑ we are not discouraging broadcaster equity in projects in a reasonable way. And I think one thing that would be interesting to ask the CTF or explore a little bit in the course of this hearing, is how much of that is happening because what we are getting from our members is that because the envelopes are relatively static they have got a certain amount of money to spend. Like you are seeing some equity, I think, but it's basically minimal licence fees being obtained through the CTF and the minimums are being met and that's it. And so the producers are still fighting to find other forms of financing.
LISTNUM 1 \l 1824 So it's just you know is it a good barometer or a good factor in the weighting? We think it's a good one but I think licence fees, bottom line, need to go up.
LISTNUM 1 \l 1825 MR. LEVY: I think that there is another thing that has also changed or evolved over the last number of years and that is for that threshold licence fee or that percentage of the budget in the genres of children's and documentaries, broadcasters used to take limited rights. They would take the broadcast rights. They wouldn't necessarily take a second window or if they did want a second window they would pay for it or the second window might have been shared with another broadcaster outside of that broadcast group with consolidation and with the way broadcasters are actually doing their negotiations.
LISTNUM 1 \l 1826 They are grabbing all Canadian rights, not just second window but also a lot of the multi‑platform rights as well. And what that again does is leave a fairly big gap in your financing which you used to be able to fill in the previous model that we were discussing when we initially evolved the broadcast threshold.
LISTNUM 1 \l 1827 THE CHAIRPERSON: So in other words more rights with the same level of licence fees being paid?
LISTNUM 1 \l 1828 MR. LEVY: That's correct.
LISTNUM 1 \l 1829 THE CHAIRPERSON: Okay.
LISTNUM 1 \l 1830 Mr. DeWalt, you talked about projects being in development that don't end up seeing the light of day. Where do we draw the line between your contention that there just isn't the availability of funds and the fact that maybe the projects don't make the cut for the broadcaster; they are just not, to be quite blunt, good enough?
LISTNUM 1 \l 1831 MR. DeWALT: I think the system works in the sense that the broadcaster is the point where they determine what's marketable; you know what will work for them and what won't work for them. What we hear from our members is that obviously broadcasters will develop more projects than they want to trigger. That's how you find the gems that are out there. But at the end of the day if a broadcaster only has enough envelope to trigger one project and develops 10, as an example, but actually has two that they feel that are very strong that both could do very well in our system and garner an audience, but they end up saying to the producers, "You know, if there was more money in the CTF system we would trigger both projects but the reality of it is we only have enough money to trigger one and, I'm sorry, you know, you didn't make the cut." So I think ‑‑
LISTNUM 1 \l 1832 THE CHAIRPERSON: But they made a choice.
LISTNUM 1 \l 1833 MR. DeWALT: They made a choice. I guess our point is that there is more market‑ driven, audience‑driven projects that are being developed in the system that are being financed and we would like to see those financed, and it means more money in the system to finance them.
LISTNUM 1 \l 1834 THE CHAIRPERSON: Just one final area, a follow up, and that is of board representation. Remind me how many board members the CFTPA has.
LISTNUM 1 \l 1835 MS CUNNINGHAM: Two.
LISTNUM 1 \l 1836 THE CHAIRPERSON: Two, because my question was like, for example, Ms Keatley, just based on your very short bio you specialize in drama programming. And as a board member do you feel adequately informed to be able to represent the interests of producers of all genres?
LISTNUM 1 \l 1837 MS KEATLEY: That is actually a very good question. I actually started as a documentary producer though but, you know, we just evolve into whatever we end up doing and some companies are broader based. One of the reasons in fact why the CFTPA has specifically chosen with its two seats to come forward with two different producers, we actually put in place a policy where we would have one of the members be from one of the regions and one of the members be from Toronto.
LISTNUM 1 \l 1838 And we also wanted them to be balanced between genres of programming, so that when our board elects our reps every year for the annual general meeting and we always want a balance, we want it across genres, across budget levels, so that the expertise that we are bringing to the table is reflected.
LISTNUM 1 \l 1839 And then a lot of times for us we would go back within our various communities and talking to both the CTF task force which we have, which has about 12 people on it, which is across all genres, and then across our board which also is represented across all genres of programming and, of course, across the country. So we are trying to feed up that very specific information to the board and I think we have actually been very effective in that way. And that is in fact why we have kept producing reps rather than staff reps from the CFTPA.
LISTNUM 1 \l 1840 THE CHAIRPERSON: And that was going to be my final question and ask Mr. Mayson, not that I think you need more to do, but just your reaction to the Directors Guild suggestion, that we should consider staff members of associations as board members.
LISTNUM 1 \l 1841 MR. MAYSON: That has come up a few times and I vetoed it every time.
‑‑‑ Laughter / Rires
LISTNUM 1 \l 1842 MR. MAYSON: No, I am kidding. We have discussed that many times and I think on a point of principle and also on a point of sort of logic we thought that, no, what Julia has described essentially is sort of having the balance of actual producers, but in different parts of the country and different genre base actually provided I think more value, you know, to the discussion around the table. You know, obviously there is excellent staff there too, so that is not a comment on other people there.
LISTNUM 1 \l 1843 But I think it was just our decision as a board that we felt that it provided a very good mechanism to provide some balance to input that could, in turn, consult with our own membership and then bring it back in a kind of coherent way to the board process.
LISTNUM 1 \l 1844 And so we actually thought it through, you know, many times and considered it from different ‑‑ but always come down on the same decision really.
LISTNUM 1 \l 1845 MR. DeWALT: I would like to make one comment on that just so the Commission is aware that when the CTF started, in fact, we did have a staff member representing the CFTPA on the board. And it was after a couple years of that that we felt that from a producing perspective, from a business owner entrepreneur perspective, because every deal that we do as filmmakers is a different deal, no two deals are similar, no two structures are similar, no two ways of financing are similar. It is very difficult for a staff person that has not been a producer to understand the complexity of being a business owner in this environment and trying to produce Canadian content.
LISTNUM 1 \l 1846 So it was a decision of the board to move from staff to a board member, a functioning producer. And, in fact, it is to the point now where we have, within the board, we elect those two individuals and we have a competition. It is not, you know, oh my God, who is going to do it this year? It is like, I want to be on that board, I want to effect change and we take it very seriously and we do vote for two reps; one being regional, one being from a centre.
LISTNUM 1 \l 1847 THE CHAIRPERSON: Well, Mr. Mayson and your colleagues, thank you very much for your participation. We have no more questions for you today.
LISTNUM 1 \l 1848 We will now break for lunch. We will be back in one hour. Thank you.
‑‑‑ Upon recessing at 1234 / Suspension à 1234
‑‑‑ Upon resuming at 1335 / Reprise à 1335
LISTNUM 1 \l 1849 THE SECRETARY: We will now hear the presentations of ACTRA National, Writers Guild of Canada and Directors Guild of Canada.
LISTNUM 1 \l 1850 We will begin with the presentation of ACTRA National. Please introduce yourself and your colleagues, after which you will have 15 minutes for your presentation. Thank you.
PRESENTATION / PRÉSENTATION
LISTNUM 1 \l 1851 MR. HARDACRE: Merci, Madame Roy.
LISTNUM 1 \l 1852 Good afternoon and thank you, Madam Chair, commissioners. My name is Richard Hardacre, I am a professional actor, a Canadian and the President of the Alliance of Canadian Cinema, Television and Radio Artists, which we can call ACTRA.
LISTNUM 1 \l 1853 Also speaking for ACTRA today are two of Canada's best known and acclaimed performers, Wendy Crewson, Peter Outerbridge, stars of the popular television series ReGenesis. We heard earlier about A‑team people, these are two of ACTRA's A‑team actors, we have hundreds of them.
LISTNUM 1 \l 1854 Supporting us are ACTRA's Director of Public Policy and Communications, Ms Kim Hume and ACTRA's Policy Advisor, Mr. Garry Neil.
LISTNUM 1 \l 1855 As you know, Madam Chair, ACTRA brings to this hearing the concerns of our 21,000 members who live and work in every corner of this country. ACTRA members are English‑speaking artists whose performances in films, television, sound recordings, radio and new media entertain, educate and inform Canadians and global audiences. I will say firmly at the outset that ACTRA supports the Canadian Television Fund. It is a crucial contributor to Canadian programming.
LISTNUM 1 \l 1856 We are also quite pleased to tell you today that, in fact, we know Canadians strongly share this view. Allow me to summarize our key positions. One, we oppose splitting the fund into two streams. Two, we oppose allowing less than fully Canadian productions to be funded. Three, we support requiring monthly contributions from the cable companies. Four, we support funding new media productions, only if new funds can be found. And five, we question the Commission's jurisdiction to implement most of the task force recommendations.
LISTNUM 1 \l 1857 First, our opposition to a private sector stream. ACTRA objects to this idea because it is direct pandering to the cable companies who caused this crisis in the first place. Rewarding the irresponsible actions of the cable companies is not the way to go. We also dispute the notion that the cable funds are private. Private contributions? Well, all the contributions come from, of course, one origin, the public. Whether they be cable subscriptions or through taxation, it is all public origin money.
LISTNUM 1 \l 1858 The Commission knows better than we do that the deal reached in 1993 permitted these companies to retain 50 per cent of what had been a temporary levy on subscribers. The other 50 per cent was to go to the funding of Canadian productions according to rules developed by the sector. So we think these subscriber contributions to the CTF are really public funds. And we maintain that if there is any reneging on these conditions and this agreement we believe that the retention of the other 50 per cent would have to be reconsidered as well.
LISTNUM 1 \l 1859 There are many reasons why this two‑stream idea won't work and here are just three reasons. First, it would jeopardize Canadian content. Our primetime television schedule already marginalizes Canadian shows in over‑the‑air television.
LISTNUM 1 \l 1860 To divide the CTF into two streams and reduce the private sector stream to a possible eight out of 10 CanCon minimum that would water down the Canadian content of our shows. Ms Crewson is going to speak more on this in a second.
LISTNUM 1 \l 1861 Secondly, it would marginalize the CBC by splitting the streams. Creating a separate public sector fund would restrict CBC's access and assumes that only the private sector stream can deliver hit shows. What about Little Mosque on the Prairie, CTF‑funded CBC show with broad appeal and international success that continues to be a hit in its second season. What about the new series called The Border? And two streams would add unneeded complexity to the fund, separate criteria, separate applications, et cetera, what the CTF has labelled in its intervention as double accountability.
LISTNUM 1 \l 1862 Now to the matter of the eight out of 10 points recommendation of the task force. Wendy Crewson.
LISTNUM 1 \l 1863 MS CREWSON: Thank you very much, Richard.
LISTNUM 1 \l 1864 Madam Chair, commissioners, thank you for hearing our comments today. We actors have taken more and more of an interest in the Commission's activities of late and I am sad to say it is because we feel we must. The direction of this Commission is troubling to us and it has driven many of us to speak out, including myself and Peter.
LISTNUM 1 \l 1865 Now, as someone who has had a great deal of experience in this industry, both here and in the United States, I find the recommendation to reduce the CanCon threshold and allow productions with only eight out of 10 points to be eligible for CTF funding impossible to justify on a number of levels.
LISTNUM 1 \l 1866 Now, as you know, the CAVCO scale provides two points for a Canadian writer, two points for a director and one point each for the two highest paid Canadian performers or stars of the show.
LISTNUM 1 \l 1867 If CTF moved away from its 10 out of 10 requirement it is these two roles which will go to American performers instead of Canadians. And then let us be clear, we will no longer be building a Canadian industry, but merely spending public funds on lightly camouflaged American product. And foreign stars are no guarantee of audience success because, quite frankly, we are not getting Brad Pitt or Angelina Jolie. U.S. actors are understandably not necessarily interested in telling Canadian stories. And to find someone who might be interested, you have got to go way down the list, down the B‑list.
LISTNUM 1 \l 1868 And even those performers in the United States make a lot of money compared to their Canadian counterparts, that combined with travel expenses, hotel costs, et cetera, could easily double the budget of a small Canadian TV movie. Bottom line, there are no cost savings to be had by casting a so‑called American star.
LISTNUM 1 \l 1869 The good news is we have a prestigious amount of talent in this country with a passion for telling Canadian stories. Go back as far as Mary Pickford, Raymond Massey, Donald and Kiefer Sutherland, Christopher Plummer, Sandra Oh, Ryan Gosling up through Rachel McAdams, even to Ellen Page who is this year nominated for an Oscar who began her career on a lovely little Canadian series called Trailer Park Boys.
LISTNUM 1 \l 1870 John Doyle in the Globe and Mail has often written about how television makes the stars who go on to become cinema celebrities. We have the talent that can become stars, they must be given the opportunity to do so. Why look beyond our borders when we can do it ourselves?
LISTNUM 1 \l 1871 In addition, an oversubscribed fund tells us that we are rich in original ideas. What we need is stable funding and support from the broadcasters who must properly schedule and promote our Canadian shows. The BDUs are looking for guarantees of audience success. Well, there is no guarantee, there is no formula, but producing lightly camouflaged American product is a formula for failure. Following that path has only ever hobbled Canadian television.
LISTNUM 1 \l 1872 There is only success when we do original ideas, our ideas. We find audience success with original thought. And the guarantee for original thought is fully Canadian, 10 out of 10 productions.
LISTNUM 1 \l 1873 Thank you. Over to you, Peter.
LISTNUM 1 \l 1874 MR. OUTERBRIDGE: Thank you, Wendy.
LISTNUM 1 \l 1875 Madam Chair, commissioners, there was a recurring theme in our show ReGenesis that I am reminded of today. Wendy and I played scientists at an organization called the North American Biotechnology Advisory Commission where we investigated instances of questionable science and struggled to prevent viral outbreaks that could attack our global population. And we were often distracted from that important work to fight possible funding cuts to our agency. The irony of this is not lost on me today.
LISTNUM 1 \l 1876 I am sure many of you know, it was talked about earlier, that Shaw Cable ran a very expansive newspaper ad campaign against the Canadian Television Fund. They took out full‑page ads in the Globe and Mail, the Hill Times and elsewhere to discredit the fund. And, quite frankly, this is shameful. This was no small undertaking. Shaw spent hundreds of thousands of dollars of subscriber fees on a misleading and insulting ad campaign. This, after causing the crises that brings us here today by refusing to pay their monthly contributions into the CTF.
LISTNUM 1 \l 1877 Now, many of those appearing before you this week will tell you how important the Canadian Television Fund is to our industry, I share those sentiments. But that we have to be here at all making these arguments is a sad state of affairs and a large distraction from our core business, that of making great Canadian programming. And we should be focusing on how we can improve the situation for television drama through new and vigorous CRTC regulations on conventional broadcasters, consistent scheduling, promotion and more stable and predictable government funding, rather than fighting to retain
an essential element of the existing system.
LISTNUM 1 \l 1878 ACTRA supports the task force recommendation for the CRTC to make it mandatory for cable companies to provide monthly contributions to the CTF. We have also recommended that the CRTC increase the required contribution to at least 6 per cent. With revenues of more than $6 billion in 2006 the cable companies can afford it.
LISTNUM 1 \l 1879 ACTRA has urged the Commission to revisit its decision not to regulate new media and the internet. I understand the Commission has launched a process to deal with these important matters. In that context, ACTRA would favour creating a fund to support new media productions. We think this is important as well to the future of the industry, but we say it is wrong to direct money from the CTF, which continues to be oversubscribed.
LISTNUM 1 \l 1880 ACTRA shares the view of others, such as the directors, the producers and the friends of Canadian broadcasting that funding new media productions must come out of new resources.
LISTNUM 1 \l 1881 Thank you. Back to you, Richard.
LISTNUM 1 \l 1882 MR. HARDACRE: Thank you, Peter. Thanks, Wendy.
LISTNUM 1 \l 1883 I shall wrap‑up here on the issue of jurisdiction. Like others, ACTRA questions whether the CRTC wishes to assert their authority to implement most of the task force recommendations. I am not going to comment on these issues myself because I am not the technical expert. If the Commission wishes to discuss these issues with us now, I will invite one of my colleagues to field any of those questions.
LISTNUM 1 \l 1884 Also, we welcome the commitment made earlier today by the CTF to include a representative of the creative community on its board. We urge the Commission to please address this matter to ensure that there are two representatives on the board, one English, one Francophone, these are entirely different realities between these markets, as the Commission well knows and as the task force recognizes. And representatives from the creative community should be selected by the relevant associations. In our case, we are committed to working with the Writers Guild and the Directors Guild to bring forward a consensual candidate.
LISTNUM 1 \l 1885 Finally, I want to reiterate our support for the fund. Along with the writers, directors and producers we are today releasing results of a poll that shows the strong support of Canadians for Canadian programming. The majority of Canadians believe that Canadian television programming is important, that it is important to have programming that is distinct from American shows, that television programming should reflect our society and our perspectives. These are very very strong results.
LISTNUM 1 \l 1886 Canadians believe Canadian programming is important. They support investment form government as well as contributions through the cable companies towards making high‑quality Canadian televisions shows.
LISTNUM 1 \l 1887 We look forward to a constructive dialogue now, anytime, and we commend this Commission to its goal to empower a truly Canadian broadcasting industry. We thank you for your attention.
LISTNUM 1 \l 1888 THE SECRETARY: Thank you.
LISTNUM 1 \l 1889 I will now invite the Writers Guild of Canada to make their presentation. Please introduce your colleagues, and you will then have 15 minutes for your presentation.
PRESENTATION / PRÉSENTATION
LISTNUM 1 \l 1890 MS PARKER: Thank you. Good morning, Madam Chair, members of the panel, Commission staff.
LISTNUM 1 \l 1891 My name is Maureen Parker and I am the Executive Director of the Writers Guild of Canada. To my left is Rebecca Schechter. Rebecca is President of the Writers Guild and a Gemini Award‑winning screenwriter. Rebecca was also the creative producer and head writer for the first season of Little Mosque and she is now developing season two of the series Da Kink in My Hair.
LISTNUM 1 \l 1892 To my right is Charles Lazer, Vice‑President of the Writers Guild. Chuck was one of the creators in and executive producers of Nothing Too Good for a Cowboy. He has written for such acclaimed shows as Road to Avonlea, Goosebumps, and the American cable series 7th Heaven.
LISTNUM 1 \l 1893 We also have with us Kelly Lynne Ashton, Director of Policy at the Writers Guild.
LISTNUM 1 \l 1894 The Writers Guild of Canada is a national association representing more than 1,800 English‑language screenwriters working in film, television, radio and digital production in Canada.
LISTNUM 1 \l 1895 Over the past several years every aspect of the Canadian Television Fund, the CTF, has been reviewed, including the governance structure and its programs. The reviews have been both formal and informal, and included reviews by the board of the CTF, the Department of Heritage and even, only two years ago, the Auditor General. The Auditor General did not recommend a major overhaul of the Fund, but rather only a few changes which have since been incorporated.
LISTNUM 1 \l 1896 Despite this vote of confidence to the last year, 50,000 people who earn their living in Canadian television production have been living on pins and needles. The entire foundation of the CTF, the biggest funder of Canadian TV programming after the broadcasters, has been put in jeopardy.
LISTNUM 1 \l 1897 So how did we get here? Over the years whenever concerns have arisen about the governance objectives or mandate of the CTF those concerns have been addressed where needed and resolved by consensus of the board of directors. But last year when two cable companies were unable to resolve their issues within the board's structure they chose to withhold their contributions and resign from the board. Instead of working within the system, they tried to use their leverage to impose their desired changes on the CTF.
LISTNUM 1 \l 1898 This is where the CRTC stepped in and decided another review was required. While we appreciate the CRTC's efforts to calm the waters, the resulting report from the CRTC's task force on the CTF pleased no one. It lead, in turn, to this public hearing, this latest attempt to find consensus on where to go with the CTF.
LISTNUM 1 \l 1899 Rebecca.
LISTNUM 1 \l 1900 MS SCHECHTER: Before we set out this future course, it is necessary to revisit the rationale behind the CTF.
LISTNUM 1 \l 1901 In 1993 the Commission agreed that the BDUs could keep half of the CAPEC subscriber fee increase if they contributed the other half to a fund for Canadian programming. It was acknowledged that, and I quote from the Commission decision:
"It is only by providing distinctive indigenous programming with which Canadians can identify that Canadian programming undertakings will be distinguishable. And, more money needs to be raised within Canada for the production of Canadian programming to serve Canadian audiences." (As Read)
LISTNUM 1 \l 1902 The current discussion of private sector money and or private sector fund is a red herring. The BDU contributions are public monies required by the CRTC to be paid by the BDUs in exchange for their ongoing protection from competition.
LISTNUM 1 \l 1903 The obligation flows directly from section 3.1(e) of the Broadcasting Act, which requires each element of the Canadian broadcasting system to contribute to the creation of Canadian programming. The CRTC has always had the right to direct these public monies to support public policy goals enshrined in the Broadcasting Act and, of course, it should continue to do so.
LISTNUM 1 \l 1904 So why is it not possible to finance these programs without public funds like the CTF? Canada has a relatively small population with two distinct language markets and it shares a border and a language with the world's largest exporter of entertainment programming. In order to compete with shows like House and Lost, which flood over our borders from the U.S., we need to produce our own high‑quality programming.
LISTNUM 1 \l 1905 In Canada, the average budget for a one‑hour English‑language drama is $1.3 million and going up, as we heard earlier. In the U.S. it is $3.5 million. And U.S. broadcasters pay over 85 per cent in licence fees to cover production costs. In Canada, while we believe strongly that our broadcasters can and should pay more in licence fees, we recognize that they will never be able to pay the same percentage of the budget as Americans.
LISTNUM 1 \l 1906 According to CTF statistics Canadian broadcasters are covering an average of 31 per cent of the cost of CTF‑supported productions. So the balance of that funding has to come from somewhere. If we accept the very basic premise that public funding is a must to finance Canadian television, it becomes easier to understand why the Cable Production Fund was originally established in 1994. And in 1996, combined with Heritage monies to form the CTF.
LISTNUM 1 \l 1907 Since that time, CTF has spent over $2.5 billion funding over 25,000 hours of Canadian TV. Along the way it has experienced its share of problems, oversubscription, how to prioritize programs funded, two funds with different criteria, unstable government financing. It has risen to every challenge and responded by improving policies, objectives and guidelines. Every person working in the Canadian industry knows that this fund is essential.
LISTNUM 1 \l 1908 Charles.
LISTNUM 1 \l 1909 MR. LAZER: The task force report addresses a couple of areas that have been problematic for the Fund over the years. The idea of one fund versus two, limited funding and new platforms, building audiences and increasing broadcaster responsibility for programming choices. Despite the fact that the CTF has and is prepared to address these challenges within its existing structure, the task force believes that major modifications are required. We disagree and we are here today to share our positions on the proposed recommendations.
LISTNUM 1 \l 1910 One fund versus two, the task force recommends that, "the CTF should establish a market‑oriented private‑sector funding stream."
LISTNUM 1 \l 1911 The task force has defined market‑oriented as primarily audience success, an actual and potential return on investment. The other fund would, "continue to support culturally significant Canadian programs."
LISTNUM 1 \l 1912 Some of the BDUs support the two‑funds idea, but with the wrinkle that they have separate boards, one of them a BDU board to control the BDU contributions. We see absolutely no need to split this CTF into two funds. The rationale for a market‑oriented fund is that producers need a fund dedicated to developing and supporting Canadian hits. This is an admirable goal, so admirable in fact that it is already the goal of the current CTF guidelines.
LISTNUM 1 \l 1913 And except for Max Bialystock Stock and Leo Bloom in the movie The Producers, no one I know sets out to make a flop. It is ridiculous to even suggest that. If making a hit could be quantified like baking a cake, every show would be a hit and we wouldn't be here today.
LISTNUM 1 \l 1914 Even shows that target specific public policy objectives, like kids' shows, strive for success within their own niche markets. And the CTF, as it stands now, has been instrumental in supporting programs that have become hits.
LISTNUM 1 \l 1915 We can all agree that Corner Gas and Little Mosque on the Prairie are audience successes, and they are not alone. Degrassi is a hit, Naturally Sadie is a hit, Durham County is a hit, Blood Ties is a hit, Slings & Arrows is a hit and Trailer Park Boys is a hit. These shows all have critical acclaim, Canadian and international awards, high audience numbers in fragmented and often very targeted markets, strong international sales on other platforms like DVD and merchandizing.
LISTNUM 1 \l 1916 I know you have heard and read the claim that the CTF has not funded any hits, well that is just wrong. Unlike he who must not be named, we have the data to backup our claims. What we all need to remember is that the move to broadcaster performance envelopes is a recent one and the CTF board and staff are still fine tuning the four factors. It makes more sense to have those people, the ones who have already gained experienced working on the audience performance factor finish the job. And given that most of the industry is already represented on the CTF board, the most appropriate avenue for input continues to be through the applicable board representatives.
LISTNUM 1 \l 1917 That being said, it is worth noting that the writers, performers and directors are still not represented and we appreciate the CTF's intention to rectify that in the near future.
LISTNUM 1 \l 1918 Everyone on our business wants to see return on their investment of time and money. But if you are making a TV show in Canada many factors conspire to limit your chances. The small and fragmented market makes it hard to make a lot of money, so does the lack of a consistent timeslot and promotion. In Canada, the conventional broadcaster schedules are dictated by simulcast. Canadian programs are only aired when there is a hole in the simulcast schedule. And after the conventional broadcaster's spring shopping spree in the U.S. they claim they don't have that much money left to promote our home‑grown shows.
LISTNUM 1 \l 1919 As we have discussed, actual and potential return is the basis of the market‑oriented fund. Because the Canadian marketplace is small, Canadian producers have traditionally looked beyond our borders for additional sources of revenue. However, revenue from international sales are no easier to come by. The world market has developed an appetite for their own domestic market and each territory is buying less North American product.
LISTNUM 1 \l 1920 A show designed to sell into the international market usually has a foreign broadcast licence to help finance production. That foreign broadcaster will want input into the show changing the Canadian essence of the program. So Little Mosque on the Prairie could become Little Mosque on the Steps.
LISTNUM 1 \l 1921 Yet, even with all these challenges, Canadian programs can earn a return. There are many potential sources in the long tail of DVD sales, second window broadcasts and merchandising and more.
LISTNUM 1 \l 1922 Maureen.
LISTNUM 1 \l 1923 MS PARKER: Another recommendation, 19, that must be addressed is the proposed objectives for the market‑oriented stream. The task force advocates that the existing essential requirements be watered down to an ambiguous statement that leads us away from the goals of the Broadcasting Act. Why? No case has been made for this change. If there is sufficient cause, then it is appropriate that the CTF board deal with this.
LISTNUM 1 \l 1924 CTF objectives should not be enshrined in regulations as proposed. That would seriously limit the Board's ability to be flexible. The task force also recommends that the CAVCO point count on a show be reduced from 10 points to a minimum of eight points for the market‑oriented fund. That could mean that an American writer or director or lead performer would be able to work on a program funded with public money.
LISTNUM 1 \l 1925 The CTF has also said that it could live with eight out of 10 points, because it doesn't think that will happen very often. But speaking as one of the creator groups who will be affected by the lowering of Canadian content points, we are here to tell you we can't live with it.
LISTNUM 1 \l 1926 Is the implication behind this recommendation that Canadian talent can't bring home the bacon? We have reviewed the task force closely and read the submissions and we can't figure out who asked for this point reduction, nor can we see the business case for it. Where is the proof that using non‑Canadians in Canadian shows guarantees greater success?
LISTNUM 1 \l 1927 The facts lead us to conclude exactly the opposite. Right now the most popular Canadian shows are 10 point shows, you know them: "Corner Gas", "Rick Mercer Report", "Little Mosque". Among Canadian viewers "Corner Gas" frequently beats out top American dramas in the ratings.
LISTNUM 1 \l 1928 It is disrespectful to think that talented Canadians need to make way for American B‑level writers, actors and directors who are willing to work in Canada for the lower union rates.
LISTNUM 1 \l 1929 Even one eight point drama a year is too many when an eight point drama series can and should be funded from the marketplace.
LISTNUM 1 \l 1930 A program that does not have the Canadian audience as its primary goal can be financed easily from the marketplace and does not need or deserve Canadian public funding.
LISTNUM 1 \l 1931 For example, "The Best Years", is a recent Canadian series written by a Canadian, directed by a Canadian but starring an American and set in Boston. It was fully financed and rightfully so for Global but without the CTF.
LISTNUM 1 \l 1932 Other examples are "Stargate SG‑1" and "Stargate: Atlantis" series which are financed primarily through the U.S. scifi channel. There are many, many other examples.
LISTNUM 1 \l 1933 The point is that shows with U.S. talent can attract U.S. financing, they don't need our CTF.
LISTNUM 1 \l 1934 In this mix is the CBC. The Report does not explicitly make recommendations for dealing with the CBC's guaranteed envelope of 37 per cent, but by splitting the CTF into two distinct funds with different mandates, the CBC's ability to commission Canadian programming is put in jeopardy.
LISTNUM 1 \l 1935 Unlike the conventional broadcasters, the CBC has a legislated mandate under the Broadcasting Act to provide predominantly and distinctively Canadian programming.
LISTNUM 1 \l 1936 So, while the conventional broadcasters reluctantly commission Canadian dramas, the CBC is required to invest in those shows.
LISTNUM 1 \l 1937 Let's just have a look at the current prime time schedule for 10 point dramas. Global has two prime time series, "The Guard", and "Da Kink in My Hair". CTV has two half‑hours, "Corner Gas" and "Degrassi".
LISTNUM 1 \l 1938 The CBC has many more dramas, "Heartland", "The Border", "jPod", "Little Mosque", "Sophie" and "MVP". These shows are cultural and commercial. They are made for Canadian audiences.
LISTNUM 1 \l 1939 The Report says that the CBC should be on a level playing field with other broadcasters in the market‑oriented fund, but if commercial means using foreign talent and foreign locations and reducing the Canadian (sic) CBC cannot do that.
LISTNUM 1 \l 1940 The recommended changes to the structure of the CTF would effectively cut the available funding for the Canadian programming on the CBC. This is irresponsible.
LISTNUM 1 \l 1941 Rebecca.
LISTNUM 1 \l 1942 MS SCHECHTER: Sorry. We're also concerned about the impact that the recommendations would have on development.
LISTNUM 1 \l 1943 Under the heading of special initiatives in the Report we find development financing. We agree that screenwriters are rather special, although I'm not sure we have special needs. But development is not special, development is the phase of production where screenwriters put fingers to keyboards and flush out the story in order to create a script.
LISTNUM 1 \l 1944 In this phase writers may provide a pitch, a concept, a series Bible, script outlines, treatments and/or first drafts. All of this work is partially funded by the broadcaster, the producer and the screenwriter before the project can begin to attract production financing. It is a general truth that there is never enough development money.
LISTNUM 1 \l 1945 The Report recommends that development come out of the cultural side of the fund, but development is an essential stage of production. If we want any programs at all, we have to put money into development.
LISTNUM 1 \l 1946 The contribution agreement between the Department of Heritage and the CTF was not setting a cultural policy when it allocated a portion of the fund to development, it was recognizing the fact that development is critical in guaranteeing a minimum amount would be spent.
LISTNUM 1 \l 1947 Let's look at how the Americans develop programs. Last year thousands of pilot ideas were pitched to the networks. From those 600 pilot scripts were commissioned and only 113 of those made it to actual pilot production. 45 of those were picked for series and only 14 were successful enough to be renewed for a second series and, of those 14, only one made it into the top 10.
LISTNUM 1 \l 1948 So, a tonne of development for one hit show.
LISTNUM 1 \l 1949 As to new media we have one big concern. Every last cent and more of the available CTF moneys must go into TV production and development. Television still captures the largest audience and, in fact, TV shows frequently are needed to drive traffic to their related content such as webisodes, mobisodes and video games.
LISTNUM 1 \l 1950 Canadians spend an average of 10 hours a week or less on the Internet, but an average of 27 hours a week in front of their Tvs.
LISTNUM 1 \l 1951 It makes no sense to ransack TV money for new media. Until we figure out where to get more money, it isn't a CTF issue.
LISTNUM 1 \l 1952 Maureen.
LISTNUM 1 \l 1953 MS LAFONTAINE: The most important thing the Commission can do right now is to prevent a funding crisis from happening again. This could be easily done with two amendments to the existing Broadcasting Act regs.
LISTNUM 1 \l 1954 First, as recommended in the Task Force Report, the requirement that BDU contributions be made monthly should be enshrined in the regulations to ensure a clear, legal obligation.
LISTNUM 1 \l 1955 Second, as a recent Dunbar/Leblanc Report recommended, there must be a system of fines and financial penalties in place to encourage compliance and penalize default. As a union we know well that agreements must be enforceable and enforced if they are to be respected.
LISTNUM 1 \l 1956 The CTF is the foundation of our indigenous production industry. Those of us who create Canadian programs, the writers, producers, actors, directors, crews toil to get those shows made and aired.
LISTNUM 1 \l 1957 BDUs are most concerned about their bottom lines and right now they have the highest profit margins in our industry. They don't need your help, the rest of us do.
LISTNUM 1 \l 1958 Do the right thing, one fund for everyone and let the CTF do its job. We all have work to do.
LISTNUM 1 \l 1959 Thank you.
LISTNUM 1 \l 1960 THE SECRETARY: Thank you.
LISTNUM 1 \l 1961 I would now invite the Directors Guild of Canada.