CRTC submits report on the Canadian Television Fund



    OTTAWA and GATINEAU, QC, June 5 /CNW Telbec/ - The Canadian
Radio-television and Telecommunications Commission (CRTC) today submitted a
report on the Canadian Television Fund (CTF) to the Minister of Canadian
Heritage. The report contains 11 recommendations relating to the CTF's mandate
and governance structure.
    "The Commission is pleased to present this report to the government,"
said Konrad von Finckenstein, Q.C., Chairman of the CRTC. "It is our hope that
the recommendations we have put forward will assist in resolving the issues
surrounding the CTF. The Fund plays a vital role in fostering a strong
domestic television industry through its support of independent productions.
Its effective operation is vital to the creation of high-quality,
Canadian-made programs."
    In February 2008, the Minister of Canadian Heritage announced that the
government had asked the CRTC to prepare a report and make recommendations on
the Canadian Television Fund, in accordance with section 15 of the
Broadcasting Act.
    This request followed a public hearing on the CTF held by the Commission
from February 4 to 8, 2008, at which interested parties expressed their views.
The Commission had previously created a Task Force to provide a detailed
analysis of the issues concerning the funding of Canadian programming and the
CTF's governance.

    
    Key recommendations

    In its report, the CRTC recommends that:

    - The CTF's funding be split into private- and public-sector streams. The
      private-sector stream would support the production of commercially
      successful programming and be accessed by private commercial
      broadcasters. The public-sector stream would be set aside for the
      Canadian Broadcasting Corporation, educational broadcasters and other
      not-for-profit broadcasters.
    - Two separate Boards of Directors be established, with one having
      oversight of the private-sector funding stream and the other being
      responsible for the public-sector funding stream. However, both streams
      should share the day-to-day administrative services of the CTF to
      reduce operating costs.
    - Increased emphasis be placed on audience success as a criterion for
      access to the new private-sector funding stream.
    - The CTF maintain its current practice of funding productions that score
      10 out of 10 points on the scale developed by the Canadian Audio-Visual
      Certification Office (the CAVCO scale).
    - The proposals by two companies that distribute broadcasting services to
      opt out of their contributions to the CTF, as required by the
      Broadcasting Distribution Regulations, be rejected.
    - The CTF establish a new funding stream to support the production of
      Canadian programs for broadcast on new media platforms.

    Actions by the CRTC

    While the majority of the report's recommendations require action by the
CTF Board and other government entities, the Commission is able to act in
certain areas. Among other things, the Commission will amend:

    - its policy to allow tangible benefits stemming from ownership
      transactions in the broadcasting industry to be directed to the CTF,
      and
    - the Broadcasting Distribution Regulations to make mandatory the monthly
      contributions of companies that distribute broadcasting services, once
      the Department of Canadian Heritage has resolved the major issues.

    CRTC Report to the Minister of Canadian Heritage on the Canadian
Television Fund http://www.crtc.gc.ca/eng/publications/reports/ctf080605.htm

    The CRTC

    The CRTC is an independent, public authority that regulates and supervises
broadcasting and telecommunications in Canada.

    Reference documents:

    - Broadcasting Notice of Public Hearing CRTC 2007-15
      http://www.crtc.gc.ca/archive/eng/hearings/2007/n2007-15.htm
    - News release, "The Task Force releases its report on the Canadian
      Television Fund," June 29, 2007
      http://www.crtc.gc.ca/eng/news/releases/2007/r070629.htm
    - Report of the Task Force on the Canadian Television Fund
      http://www.crtc.gc.ca/eng/publications/reports/ctf2007.htm
    - Broadcasting Public Notice CRTC 2007-70
      http://www.crtc.gc.ca/archive/eng/notices/2007/pb2007-70.htm
    - News release, "The CRTC Creates a Task Force on the Canadian Television
      Fund," February 20, 2007
      http://www.crtc.gc.ca/eng/news/releases/2007/r070220.htm
    - Statement by Konrad von Finckenstein, Chairman of the CRTC (Canadian
      Television Fund), February 13, 2007
      http://www.crtc.gc.ca/eng/news/releases/2007/i070213.htm

    -------------------------------------------------------------------------

       Backgrounder on the CRTC report on the Canadian Television Fund

    Key recommendations

    a) Funding streams

    The Commission recommends that the Canadian Television Fund (CTF) split
its funding into two distinct streams: a private-sector stream and a
public-sector stream.
    The private-sector stream would be funded by the contributions of
companies that distribute broadcasting services - such as cable and satellite
companies - and would support the creation of programming with broad popular
appeal to Canadian audiences. Private commercial broadcasters would be granted
access to this market-oriented stream.
    The public-sector stream would rely on contributions provided by the
Department of Canadian Heritage and would primarily support the creation of
high-quality programming that furthers the cultural objectives set out in the
Broadcasting Act. The Canadian Broadcasting Corporation (CBC), educational
broadcasters and other not-for-profit broadcasters would have access to this
stream.
    The Contribution Agreement developed between the Department of Canadian
Heritage and the CTF currently requires that the CBC receive 37 per cent of
all allocations. As a result, the proposed public-sector stream could
experience a shortfall in its allocations to other public and not-for-profit
broadcasters.
    In order to avoid such a situation, the Commission proposes that the
Aboriginal Peoples Television Network receive one-third of its CTF funds from
the public-sector stream to support its Aboriginal-language programming. The
remaining two-thirds would be drawn from the private-sector stream to support
its English- and French-language programming that is eligible for CTF
financing.
    In addition, the Commission recommends that TV5 and Vision TV be permitted
to make a one-time decision as to which stream they wish to access. This would
grant them the flexibility to choose the stream that best suits their
interests and programming plans, given that both services have characteristics
that fall into either the public or private stream.

    b) Governance structure

    If two streams with distinct funding objectives are established, the
Commission further recommends that the CTF adopt two separate Boards of
Directors. This modified governance structure would provide for greater
efficiency and more transparency in the management of private- and
public-sector funds. However, the Commission proposes that both streams share
the day-to-day administrative services of the CTF to reduce operating costs.
    The Board responsible for the private-sector funding stream would number
11 members, consisting of the following:

    - six members from the largest companies that distribute broadcasting
      services in English- and French-language markets
    - one member from the Canadian Cable Systems Alliance
    - two broadcasters (one English-language and one French-language), and
    - two independent producers (one English-language and one French-
      language).

    The procedure for nominating these Board members will be determined by the
CTF.
    The structure of the public-sector Board would best be determined by the
Department of Canadian Heritage. However, the Commission considers that it
should include independent members, independent producers and members of the
creative community.

    c) Audience success

    The CTF currently weighs several factors when deciding how to allocate
funding to English- and French-language broadcasters, including: audience
success, historic access, regional productions and above-average licence fees.
Historic access is established by calculating a broadcaster's cumulative use
of the CTF over the previous three years.
    For the private-sector stream, the Commission recommends that the historic
access criterion be completely phased out and replaced with an increased
emphasis on audience success, which would apply to both English- and
French-language broadcasters. Moreover, the Commission is of the view that the
measurement of audience success should:

    - incorporate a "hit factor" that takes into account the differing
      business models of conventional and specialty television
    - ensure that original drama is adequately supported in the French-
      language market
    - encourage the broadcast and promotion of original Canadian programs, as
      well as their scheduling to maximize audiences, and
    - include all Canadian programs normally funded by the CTF.

    d) CAVCO scale

    The Commission recommends that the CTF maintain its current practice of
funding productions that score 10 out of 10 on the scale developed by the
Canadian Audio-Visual Certification Office (the CAVCO scale). The CTF's
existing rules provide flexibility in this area by permitting exceptions for
certain productions that achieve fewer than 10 points.
    Productions assessed by CAVCO are awarded up to a maximum of 10 points,
based on the number of Canadians serving in the following creative capacities:

    - Director (2 points)
    - Screenwriter (2 points)
    - Lead Performer (1 point)
    - Second Lead Performer (1 point)
    - Production Designer (1 point)
    - Director of Photography (1 point)
    - Music Composer (1 point)
    - Picture Editor (1 point)
    

    e) Funding stream for new media content

    The Commission recommends that the CTF establish a new funding stream to
support the production of Canadian programs for broadcast on new media
platforms. Rather than using a portion of current contributions, the funds for
this stream should come entirely from new sources. These could include equity
investments, benefits packages or dedicated government contributions. The CTF
could also allow broadcasters to make use of their flexible broadcasting
envelope to produce programming for new media.




For further information:

For further information: Media Relations: MediaRelations
(http://support.crtc.gc.ca/CRTCSubmissionMU/forms/Mediarelations.aspx?lang=e),
(819) 997-9403, Fax: 819-997-4245; General Inquiries: (819) 997-0313, TDD:
(819) 994-0423, Fax: (819) 994-0218, Toll-free # 1-877-249-CRTC (2782), TDD -
Toll-free # 1-877-909-CRTC (2782), On-line Services
(http://support.crtc.gc.ca/crtcsubmissionmu/forms/main.aspx?lang=e); These
documents are available in alternative format upon request.


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