OTTAWA - The CRTC is widely expected this week to recommend changing the way most Canadian television programs are financed to give greater weight to the mass appeal of shows over their cultural or social attributes.
But the recommendations on reforming the Canadian Television Fund in response to private sector sponsors' complaints that not enough Canadians watch home-grown television could carry a catch - that those most dissatisfied with the current fund pay more into the reformed CTF.
The federal regulator is expected to issue its report on the $280 million fund Thursday, after which Heritage Minister Josee Verner must decide what, if anything, needs to be done to fix a system many in broadcasting believe works just fine as it is.
They point to such popular and socially-relevant shows as "Degrassi" and "Little Mosque on the Prairie" as proof the fund, if anything, needs to be boosted, not fixed.
The CTF was thrown into disarray over a year ago after two key contributors - Shaw Communications Inc.(TSX:SJR.B) and Quebecor Inc.(TSX:QBR.B) cable arm Videotron - suspended their payments, triggering a study by the Canadian Radio-television and Telecommunications Commission into the complaints and public hearings in early February.
No one in the industry is expecting the broadcast regulator to recommend the CTF be terminated as demanded by Shaw.
But industry insiders say the CRTC is unlikely to propose the status quo, which requires cable operators to ante up about $160 million a year with minimal say into what shows are approved for production. Ottawa contributes about $120 million into the fund.
"Changes need to be made because we've got three or four major contributors and at least two are saying it's a really bad deal," said Phil Lind, vice-chairman of Rogers Communications Inc.(TSX:RCI.B), a multimedia company which has a stake in the issue as both a cable TV contributor and as a TV broadcaster.
The fund, while comprising about one-third of the cost of producing Canadian content for television, is regarded as the lifeblood of the domestic broadcasting industry.
Friends of Canadian Broadcasting spokesman Ian Morrison says it may not be the biggest contributor to any program, but it is the first and indispensable hurdle producers must clear before they have a chance of obtaining private financing.
Without it, agrees independent producer Ira Levy of Toronto-based Breakthrough Films and Television, responsible for such programs as the "Little Miracles" mini-documentaries, most home-grown drama and comedy found on Canadian television would simply dry up.
"Unless you have a combination of public and private financing, you won't have the ability to make the sort of programs the CTF allows us to make," he says. He adds that shows such as "Little Miracles," about children who come under care at the Toronto Sick Children's Hospital, not only allow Canadians to tell their own stories, but also expose the country and its culture to the rest of the world.
A CRTC task force report released last summer, while recognizing the fund's critical importance, also acknowledged the growing discontent from cable operators that their money sometimes goes for programs that bomb with audiences, even if culturally important.
"We think it's very telling that the CTF gets excited about the few occasions when a CTF-funded show actually cracks the top 30 or when a CTF-funded private broadcasters' show makes it into the top 100. These are rare events," Shaw's head of regulatory affairs, Ken Stein, told the regulator in February.
Those involved in producing Canadian shows, such as actors, directors and producers, and in most cases the broadcast networks, believe the CTF needs more money and many want the CRTC to up the fee cable and satellite companies pay into the fund.
Rather than reward Shaw for temporarily withholding its required payments, the ACTRA actors union spokeswoman Kim Hume said the CRTC should be given the power to fine the cable companies if they don't pay up on time.
Lind said one solution is for the CRTC to split the fund into private and public streams, with the contributions from cable companies going to finance commercial shows for the private broadcasters, and government contributions going to fund culturally relevant shows for the CBC.
That is a variation of the CRTC's own task force proposal, which also calls for looser Canadian content requirements in the commercial stream so that "star" American actors can headline Canadian shows to increase their appeal to viewers.
Another likely recommendation will give cable distributors more say on the fund's governing board of directors.
And the CRTC is likely to change the method of payment from the current once-a-year to monthly instalments to discourage a repeat of Shaw's and Videotron's withholding incident.
Morrison says this week's recommendations will reveal whether the CRTC has the courage to stand up to the cable companies.
Cable companies are the most profitable segment of the broadcasting system, he says, and as such should be required to contribute more into the fund for the wider benefit of Canadian broadcasting.
"The CRTC has the power," he said. "What this week will tell us is whether they have the courage."
