Welcome, everyone, to meeting number 37 of the Standing Committee on Canadian Heritage.
Pursuant to Standing Order 108(2), we are studying questions regarding the Canadian Television Fund.
This morning we welcome on video conference Valerie Creighton, president of the Canadian Television Fund; Stéphane Cardin, vice-president, strategic policy planning and stakeholder relations; and Paul Gratton, chair of the board of directors.
Congratulations, Mr. Gratton. I understand you're recently appointed, so my congratulations for that.
I have just one thing to say before we hear your short presentation. The other day when we were delving into the CRTC's report on the Canadian Television Fund and things, as we sat around the table surmising what it meant, it seemed to me there were a lot of summations and it seemed we were going all over. So we thought we'd bring some of the people to our meeting today, hopefully to answer the questions, so that we're not just beating around the bush, going in every direction.
Who is going to give the report? Mr. Gratton, would you like to go ahead, please?
First of all, I would like to apologize for not having a written report prepared. I understand it's tradition to have about a ten-minute written summary, which aids in interpretation. But we were invited to come here late Friday, and I have been in the job less than a week. I don't even have business cards yet. I invited two people who will keep me honest and be able to answer your questions. I think our presence here today, above all, is to answer questions that you might have.
I did want to, at the front end, make a couple of observations about the CRTC report, based on one week on the job and my preliminary dealings with various people. We've had one board meeting.
I feel that the CRTC spent a fair amount of time giving proper analysis and depth and consideration to the many complex issues that were presented to it. This was a well-considered and well-thought-out report in many ways. We are pleased with many of the recommendations, and we'll fulfill whatever the Department of Heritage decides in response to these.
Having said that, I think we're on the record at the hearing as having some concerns about the two-stream and two-board approach with a public-private split right down the middle. We are on record as saying we prefer a single stream, for a whole bunch of reasons, including the ability to coordinate the two sides.
It concerns us a little bit, as we go through the report, that there's not a lot of flesh on how the public side would be administered. There are many models that could be applied to a public side. You could return to a telephone-style evaluation based on artistic and aesthetic criteria. You could divide the public side into separate envelopes based on historical access only. You could divide the public side into envelopes that would change in size and nature based on some kind of measurement. It's very vague on what would happen on the public side. But on the private side, there seems to be a consensus that the broadcast or performance envelopes is the way to go and that audience growth will be the major criterion for recalibrating the envelopes year after year.
Consequently, the broadcasters who would be relegated to the public side have almost across the board reacted with some dismay to being, as they perceive it, ghettoized into a side of the fund that may or may not grow. I noticed that one of the proposals you've been considering is indexing the CBC's percentage of the broadcaster envelope, such as it currently is, to growth on the private side.
We saw a press release, a statement that came out from the educational broadcasters on Friday, decrying their own lot on the public side, should the recommendations of the CRTC be accepted by Heritage Canada. They, too, are fearful of being ghettoized, being trapped in a fund that does not grow.
So my first suggestion, just for the purpose of discussion, might be that if you are considering putting forth a recommendation on indexing, the indexing should apply to the entire public side of the envelope, so that it would grow in proportion to the private side.
My view is that if Heritage Canada, in its wisdom, decides to accept the CRTC recommendations and cut the public and the private into two completely separate funds, it behoves Heritage Canada at that point, if it accepts that recommendation, to accept the responsibilities that come with the splitting of the fund. Namely, it should be responsible for the funding of all the broadcasters on that public, not-for-profit side. It's inherent in accepting that recommendation. That's why I would suggest that an indexing of the entire public side so that it grows at the same time as the private side might make more sense than just saying that CBC deserves this but not the educational broadcasters or anybody else.
I realize there's some complexity there. Traditionally, educational broadcasters have been the responsibility of provincial jurisdiction. So there is some complexity, but I can't imagine a system in which the CBC would be allowed to be indexed while the educational broadcasters would be left by the wayside.
As I said, our first position is that we would prefer a single stream with one board. I would say that if two streams are the adopted method, our second position is that we would still prefer to have one board that could break up into two subcommittees. We have a model like that at Telefilm currently with the feature film advisory committee, on which I have sat for the last couple of years. We meet as a group. We discuss matters that are of common interest. Then we break off, and we follow our asymmetrical obsessions and concerns because the two markets in French and English Canada for cinema are not completely different, but they are very significantly different. Then we get together at the end of the day and make sure that one side hasn't made decisions that somehow confuse or affect the overall balance in the system.
I would suggest that having one board oversee two streams, if two streams is indeed where we end up, would have a tremendous number of advantages, because the complexities here are immense. One of the biggest crises, and there have been a few in the history of the Canadian Television Fund, was when we had licence fee top-up programs administered by the CTF and an equity investment program administered by Telefilm with different deadlines and different criteria for evaluation. Producers were caught between two doors and chaos ensued, and it was really in response to that that Heritage Canada had to decide what were the specific and respective roles of Telefilm and the CTF.
I suggest to you today that if you had two completely separate boards that went off and established completely separate criteria for the administration of these two pools of money, you would probably end up, despite the best of intentions, with all kinds of unintended crises, because there would be no central coordination.
I'll give you a simple example of what happens to a producer who wants to do an arts program and license his first window to CBC on the public side, according to rules that we can only guess at, and a second window on the private side. How does that affect measurement? How does that affect access? Can you guarantee that the two sides will coordinate?
My preference, if we actually go to two streams, would be to kind of still have one central board that would coordinate, so that there is coordination between the two sides and not chaos. That would still respect the spirit of the CRTC recommendation.
As I said, our first preference, though—and nothing really has changed our mind—is to have the single stream we currently have, which is in many ways a successful public-private partnership. Despite all the history of the CTF, at the end of the day we have managed to react very positively to almost every challenge that's been presented to us. I mentioned in my acceptance speech at Banff that the CTF has been the flashpoint for every sectoral battle that could possibly occur between BDUs and broadcasters and public and private and French and English and producers, and yet at the end of the day we have always resolved our differences, buried the hatchet, come up with ever-improved rules, and moved on.
In some ways the history of the Canadian Television Fund, fraught with many crises and many unexpected results, has always managed to recognize that the sectors are captive of each other's goodwill, and the fund we have today and the general endorsement we got from most sectors of the industry at the CRTC hearing is tribute to the capacity of people to think reasonably and proceed on a mutually advantageous basis, recognizing that no one is going to get exactly what they want out of this. There is no perfect methodology for delivering money, but year after year we have perfected the model and come closer to it.
The danger right now with splitting it in two is particularly a public side that has no guidelines and no idea of how it would be administered and how to make sure it doesn't cause unintended problems with the private side that seems to be kind of functioning well.
I'm rambling on. I hope the interpreter could keep up.
That is my general observation after one week. I brought along people who could answer your questions in case I can't.
Thank you very much, Mr. Chair.
Mr. Gratton, Mr. Cardin, Ms. Creighton, it is once more a pleasure to meet you again. You learn a lot when you go to the Banff World Television Festival. You can take the pulse of everything that is going on, so, as a result, we have news about the future of the Canadian Television Fund.
We Liberals are a little concerned, as you are, to see two different bodies. It seems to us to be a ghettoization of the airwaves. On one side, we have the private sector and on the other side, we have the public sector.
One of the reasons you are here today is that there is a valid motion from the Bloc Québécois on the future of funding to CBC/Radio-Canada from the Canadian Television Fund. I have to say that I share your view on the future and on the nuts and bolts of the fund itself. But I think that we should discuss a few points.
What do you understand by historical access? I agree to guaranteeing CBC/Radio-Canada's 37%. But when you say historical access, does that mean a percentage of the entire envelope, or does it mean exactly the same amount as before with indexing covering the shortfall which Heritage Canada would look after? Is that what you understand, Mr. Cardin?
Because there is no source of funding for the new media, I think an overseeing board could go off and find little pockets of money to try to fund this, in the absence of new money coming from the government.
One board with a sort of overseeing function has more flexibility to address crises and to coordinate the roles on the two sides, even if they're very different in approach, to make sure there are no conflicts. And it could address simple things, such as what happens when CBC buys a private sector specialty channel. What is the impact of that? A board overseeing that would address it.
Quite frankly, even what happens on the public side remains of interest to the people who wouldn't structurally be on the board as it's presented. Private broadcasters would have a say, in that instance, and should have a say in the overseeing of the board. By the same token, you know about our double majority and how the independent committee would make the final decision.
So I see some advantages to a single board, if we go with the two streams. There are still more advantages to having a single stream and being able to provide an architecture for how we're going to go forward. It gives you more flexibility, even. But again, if double stream is the wisdom, I still think one board that makes sure there are no fundamental contradictions and disconnects between the approaches of the two sides is fundamental.
I can't see when Paul or Stéphane are going to speak, so I didn't want to jump in on top of them.
As we look at this, if we step back and look at a bigger-picture policy question, the question for us at the CTF is always what it is we're trying to achieve. As we mentioned in our presentation, we believe that the system the CTF has meets the objectives of both the Broadcasting Act and a market-driven system.
If you look at the kinds of projects we fund—and I know that since the CRTC report came out, we're all very focused on which broadcasters go into which potential of the two streams—we need to remember that the CTF's legal obligation is with the actual producer.
Now, the producer has to have a broadcast licence, so it might be determined that if a project is more commercial in nature it would go to the private side. But the odd thing is that I don't think any broadcaster in the country, whether public or private, sets out to make a production that isn't going to reach an audience and be commercially successful. In fact, if we look at the CBC, many of their recent productions have very high audience numbers, certainly high enough that they could compete on the private side.
So although with the 37% that was directed to the fund by the contribution agreement.... And I think Mr. Coderre asked about historic access. That number was given to the CTF in the contribution agreement. If we look back at the history of CTF financing prior to the administrative change, when we provided the programming administration to Telefilm, CBC often drew as much as 50% of the funding allocation from CTF, for various projects that we finance through the producer itself, which happen to have a CBC licence. We ourselves aren't sure what the rationale for the actual 37% was, because if you look at the history of the CBC's draw, it has often been higher than that.
But we can make anything work. It just seems to us that from a logical, administrative-efficiency perspective, we have a system now that, as Paul has said, can look at the whole industry and provide the oversight and the overview, and we try to meet the current requirements of the contribution agreement on the language split, aboriginal financing, regional, etc. We'll certainly look at the two streams.
Obviously, like everyone, we have just received the report. We're starting to do a number of modelling exercises based on what the report has recommended, to see whether we can determine and predict any unintended consequences, so that when we respond to Heritage Canada, we can give them some concrete statistical information on the impact of APTN being split in the way they've suggested, the impact of the tax credit recommendation, etc. From a technical perspective we'll be doing all that work.
But philosophically, for us it's about doing the best program in the country of Canada and getting it to the widest audience, regardless of who the broadcaster is.
Yes, in terms of the question on a planning process.
Up until now, at least, the Canadian Television Fund has always received its contribution from the federal government on an annual basis only. With the exception of the crisis year, we've never been notified that our funding is beyond a one-year time period. In the year when the two BDUs stopped payment, the minister at that time did announce a two-year funding program for the fund. We're in the final year of that now, so the government itself would have to change the way it has historically been supporting the CTF in order to build toward a five-year plan.
If the CBC's amount were to be reassessed, the question would be, based on what? What is it that you're trying to achieve through that particular funding source? When the fund moved to the broadcaster performance envelope system, the reason that historic access originally, not only for the CBC but for all broadcasters, carried such a heavy weight was because we had to start that system somewhere. We looked at the past licensing patterns of the broadcasters across the spectrum, and historic access became one of the factors in the broadcaster performance envelope. We're moving slowly away from that as a factor that calculates the envelope, leaning much more heavily into audience.
The complexity around the CBC is because the 37% was always a certain and guaranteed amount. Their audience numbers were never factored into the calculation, although they were quite willing to do so. My only point was it would be a little difficult for us to plan out for five years when, at least historically, our funding from the federal government has been on an annual basis.
As background, I sat as broadcaster representative on the board on five separate occasions throughout its history. I have actually served under every previous chair for at least one year. I actually have been there through every significant crisis. The one I was alluding to was a major crisis—not the only one, but a major crisis where producers were really caught between administrative structures that weren't particularly communicating at that point in time. The result was chaos.
Again, as throughout the history, the same people got together and resolved the problem. Quite frankly, in this case it was an intervention on the part of Heritage Canada, which divided church and state and said the CTF, through its board, would be the repository of policy, direction, and guidelines, and Telefilm would be the administrator of the guidelines and actually have the interface with the client base. That's worked out very well, and there's been peace in the valley ever since.
The issue was having two sets of rules, which were not centrally coordinated, out there for the fund. Back in those days, Telefilm's approach to the equity investment was not filtered through the CTF board, nor should it have been, as they didn't report to us. To me, the need for coordination is fundamental, even if you accept the two separate streams. It's not because I think the sky will fall but just because something awful will happen that nobody can anticipate even with the best of intentions. It's guaranteed—that's the history of this fund.
It is a competitive system, which is by genre and language between the different broadcasters. We have four performance factor weights: historic access that we've talked about, audience success, regional licensing, and above average licensing. There's an incentive there for broadcasters to pay higher licence fees.
For the current factor weights in the English-language market, the highest factor weight is on audiences at 40%; above average licence fees is at 10%; regional licensing is at 20%; and historic access is at 30%. In the French market it's somewhat different, with historic access still the predominant factor at 45%, audiences at 30%, above average licensing at 15%, and regional licensing at 10%.
Each year broadcasters will submit total hours tuned submissions for programs that the CTF funded in the previous broadcast year as well as a number—and this is a bit more complex—that we call CTF-ables. They're programs that we did not fund, perhaps because the broadcaster managed to finance them without our participation, but that would have been eligible under our guidelines.
These submissions are analyzed by our staff. They are placed on a secure portion of our website for scrutiny by other broadcasters. These submissions form the basis of the calculation for the audience success. As well, the licence fees paid are factored in to calculate above average licence fees and regional licensing. You meld all of that together and, as we said before, it's a competitive system. Basically it's how broadcasters performed; their allocations will go up or down from one year to the next.
One thing that has been discussed at the hearing, as Valerie said, is that when we created the system we had to start with something, so we started with historic access, but that factor has been declining over the years. One of the suggestions in the CRTC report is that this factor now be eliminated and we focus much more on audience success and keep the regional licensing factor and the above average licensing factor, but that they be capped at 30%.
Our staff is actually in the process of simulating those results based on the last year that we have, and we'll be able to bring that forward sometime soon.
Yes. That's perhaps a dramatic characterization, but it's taken from the lips of some of the broadcasters who would be on the public side. They feel they would be ghettoized if they were in a fund that did not grow. Quite frankly, if there were acceptance of an index, so that the public side would grow in lockstep with the private side--again, I don't want to put words into their mouths--I think a lot of their concerns would be alleviated.
The cost of production is going up at the same rate for everything that's being produced, for public broadcasters as for private broadcasters, so being caught in a fund that might not grow or might be subject even to cutbacks, depending on the political situation and what the priorities of the government are, is anxiety provoking, because these people are as proportionately dependent on the fund as the private broadcasters are. That's what I meant by ghettoization.
One would think that some of them would have responded with delight that they'd be absolved of the need to compete for audience with conventional broadcasters, which by their very nature are different and have different lead-ins and different reach with the audience and different mandates that lend themselves to rewards for having the biggest audience possible, both in terms of advertising revenue and pleasing their shareholders. Yet across the board the response from those people, including the CBC, who would be on the public side, has been that they don't really want to be there.
Even this morning I had a brief chat with Richard Stursberg of the CBC, who said, “We'd love to compete. We want to be able to grow. We think our line-up of shows has shown a lot of promise.” So it was in that sense that I used the word “ghettoization”. I was trying to characterize the negative response of the public and not-for-profit broadcasters.
Having been here for the Canadian Television Fund's review hearings, we heard, as you well know, the two particular companies that were contributing saying they felt they didn't have enough say, felt that the fund should be distributed in a different manner and wanted to have more of a say. Without putting words in the CRTC's mouth, not that I necessarily agree with the recommendations they made, I think they were trying to square that circle a little bit and keep them from walking away with their toys, and keep them in the fund.
I agree with you, however. I think that what it has created is a ghettoization. You're absolutely right, the most important part of ghettoization is going to be the lack of competition.
I must say that I wanted to hear your comment on the recommendation that says that increased emphasis be placed on audience success as a criterion for access to the new private sector funding pool. For me, that is precisely what both Shaw and Vidéotron wanted. They wanted blockbusters, they wanted things that could play to the public. It didn't matter whether the quality was there, or whatever, and that is a great concern to me.
I'd like to hear a comment on that, because what you have is public broadcasters locked into a place where they have to be forced to compete among themselves. This, in effect, is not a really good thing for them, because they are trying to do Canadian programming that is quality, that may not be necessarily popular, but is esthetically good and whatever the other criteria are. I think that particular piece that allows the public sector to go in a totally different direction, with totally different criteria from the private sector, is going to create a real problem down the road.
You are also right, and I would like to hear what suggestions you may have with regard to the fact that the piece that comes out of Canadian Heritage, as you said, is yearly. Do you think it would enhance matters or make matters better if there were a five-year fund now, a five-year program? Do you think the $120 million is enough, or should it become greater? What do you see happening to that fund over the next five years? Do you see that fund being restricted only to the private sector, or should it go into the big pot, the CTF?
Again, I think it comes down to structure and how the heritage minister responds to the CRTC recommendations.
What I've tried to suggest today is that there's a certain logical flow that comes from accepting the recommendation that there be two completely separate funds. I think at that point Heritage is accepting the responsibility. Whether it wants it or not or whether it's appropriate or not is a different debate, but it has to accept the responsibility for continuing to fund the public side if it agrees with the split between the two sides. It's just a corollary, to my mind, if you accept that structure. At that point there has to be the avoidance of a penalty to the people who are functioning on the public side.
Valerie's right: there is no consideration that's purely cultural, with complete absence of audience. I ran Bravo! for 13 years, and I can assure you that although we were trying for the highest quality in terms of reflecting the arts and much of it was very esoteric and not aimed at a broad audience, it was still aimed at an audience, so I would take a documentary on a painter and still decide whether it had succeeded or not within the relative goals that I had set for it.
There has to be some measure of success. Broadcasters do not operate disconnected from their audience. That's true for CBC, that's true for Knowledge Network, and that's true for everyone in the system.
I would argue that even on the private side, by the very nature of the fact that these are ten out of ten Canadian-content productions, there is, by definition, a cultural aspect to it. We're not doing co-productions with little aliens set in Seattle but shot in Vancouver. The rules of the fund impose a certain high-end Canadian content that in my view is, by definition, cultural in its aspects. A program that is set in Canada, performed by Canadians, and written by Canadians, to me, has a cultural impact, even if it's about hockey.
People in Quebec get that. Les Boys is inherently cultural, even though it's a huge mass-market commercial success. In English Canada we tend to twist ourselves up in pretzels, but I would say that the CTF, by virtue of being able to access it and even if it's audience-driven, has a cultural aspect on every single program.
I don't know if I've answered your question.
The emphasis on the private fund in the report tries to direct criteria that would predetermine what a hit would be, and that's a very difficult thing. It's almost impossible to predetermine the success of a program in this business. Corner Gas
would be an example of that. I was in Saskatchewan at the time, and I don't think anyone at the beginning of that program really anticipated the level of audience and commercial success that show would receive.
It is true that once an ongoing series has had its first run, you can pretty well determine what the audience response was and have a little more sense of whether you might have a hit on your hands. It would be a fairly simple thing to look at a show like that and ensure that it received financial support to continue and to continue to build that audience, but frankly, it's pretty tough. If we all knew the answer to what a hit would be, we probably wouldn't be working in this business in Canada; we'd be working for somebody in the U.S.
I just wanted to make a point, Ms. Fry, in relation to your question about whether the $120 million is enough. We've never really had that conversation for a while, but I'll just point out to you that the issue of oversubscription in the industry largely has not gone away. With the broadcaster performance envelope, what we've been able to do at the fund is eliminate oversubscription from the fund itself because we know how much money we've got to work with and those resources are finite, but the oversubscription question has just moved to the door of the broadcaster. We still know there are about 50% more really worthwhile, good, potentially commercially successful projects and stories and ideas out there that will never see the light of day because the amount of resources has been completely finite for a number of years.
Would it help if the fund were extended? I think it certainly would. That conversation has been around for a long time. A number of lobbies by the industry itself have tried to have the fund renewed for more than a one-year period, but those decisions are outside the scope of our ability to answer that question. They really do remain with the federal government and with Canadian Heritage.
Well, I would say that's not factually correct, having been the private broadcasters' representative on the board on five separate occasions over the last ten years. We certainly had a voice.
The CAB has four representatives on the board. They are the voice of the private broadcasters in Canada. There are two specialty channel representatives and two conventional television representatives, two from English Canada and two from French Canada. We signed off on the guidelines and the rule changes year after year.
You know, we picked specific battles when there was pressure from the producers, the independent producers, to raise licence fees. We would try to dig in our heels and come up with charts to show how much money we lost for every hour of Canadian...certainly in English Canada; the mathematics are quite different in Quebec.
At the end of the day, we almost always voted unanimously for the guidelines. It was never over our protests. Nothing was forced on us. Again, I speak to the compromise in the system between the different sectors.
So I would say that Mr. Shaw, with all due respect.... And here perhaps is where we failed to communicate clearly what was going on at the fund. One of the things I hope to do, if he wants to return my calls, is to actually get him to understand how the fund works. The fund was there to serve the interests of private broadcasters as well as the other people, and it did so with our cooperation and our sign-off on it.
I don't believe the CAB showed up at the CRTC and said “This is a terrible fund that doesn't address our needs”. Everybody would like to see some tweaking, but private broadcasters have been very involved in the evolution of this fund. I think many of the things they've wished for have come to bear. Certainly one of my missions was to get an English-language drama envelope when I was a CAB representative. It took two years, but we succeeded in doing that. It was voted unanimously by everybody on the board.
So I think that's a mischaracterization in terms of how private broadcasters have been served by the fund. I say that as an informed insider on this particular matter.
Can the objectives of the board that are being outlined here be reconciled with an increasing emphasis on audience share? Is there not a tension there, and need I be concerned, coming from a small market region of the country, that somehow the fact that one of the criteria that will be reduced in order to increase the importance of market share has to do with regional production, as I understand you to have said earlier? That worries me a bit.
Finally, on the question of this notion that somehow they can walk away, they can't. The crisis wasn't that they were going to withdraw; the crisis, as I recall, was timing: that they were withholding, but not withdrawing. This is a licence fee; this is not generosity.
It occurs to me that clearly their interest would be to be able to put more money in types of productions with greater audience share, because that means they get to show programs that they make more money from, because the greater the audience share, the greater their advertising revenues that flow from it.
If I understood the Shaw and the Vidéotron positions, they did want to withdraw their money.
In its case, Vidéotron had a completely different approach and different structure for a fund that they would administer, and there was at least one dissenting opinion from a CRTC commissioner endorsing that world view within the Quebec context. In Shaw's case, it just wanted to withdraw the money and I believe redistribute it back to subscribers.
As to your question whether you can reconcile the pursuit of audience with some of the cultural criteria, my feeling is yes, that they're not inherently in contradiction. As Valerie has said, even if you're producing niche-target art programming, for example, you want to maximize the potential audience with the net niche.
No one spends a year or two of their life sweating and worrying—nobody is getting rich making this stuff, at the end of the day, really—and nobody is doing this in order to not have an audience. The same discussion occurs when we talk about feature films in this country and the abysmal box office. There are all kinds of impediments—budget sizes, marketing, access to screens—and there's a variety of factors that go in there.
God love the creative people in this country who continue, especially in English Canada, to do their damnedest to try to reach out to that audience. As Valerie pointed out, honestly, since the arrival of the CTF, there are some extremely notable successes.
I used to run the Ontario Film Development Corporation, and I'd tell the analysts that if you say no 100% of the time, you'd be right 90% of the time, but it still doesn't make you smart. What I wanted was people who would champion specific projects, who would, against all odds, come up with a Little Mosque on the Prairie or a Corner Gas that somehow, despite all the structural impediments to finding a significant audience for Canadian drama, managed to do it.
That's the challenge and the business we're in. So I don't see a contradiction; I see it as a constant struggle and striving. I guess that unlike Shaw I think this is a noble battle that we should not give up and should keep striving towards winning. The fact that it's hard doesn't make it not worth doing.
Could I add a couple of points where there were some disconnects?
We have to bear in mind that this fund is about supporting under-represented genres: drama, children's programs, variety programs, and documentaries. Some suggestions were made at the hearing that, for example, if we were to go down the road of strict mass audience appeal, that could be reviewed and we would find ourselves financing game shows and reality television and so on and so forth, whereas in essence our view is that we'd be replacing private financing that is currently in place. That's one area of disconnect.
I'll go back a bit to Mr. Abbott's question, where there was another disconnect. The CRTC actually, in this latest report, didn't keep that recommendation. On the private side it was originally contemplated in the task force report that another measure should be return on investment. We had a bit of an issue with that, because for the majority of Canadian programs, all Canadian financing goes into the financing structure of the project from the beginning to make sure that the project is made. If we were to create a factor that would be based on return on investment, in most cases that return comes from the sale of the program on international markets, so what would be the primary policy objective? Would it be to make programs to attain the largest possible Canadian audiences, or would it be to try to make programs that will make as much money as possible on international markets? As I said, that recommendation was not brought forth in the second CRTC report.
Oh, yes, absolutely. It's probably not a bad idea. Maybe you have a future as a television programmer.
The key issue is whether or not that kind of show requires public money in order to complete its financing. And as Mr. Cardin pointed out, most of this stuff can be funded by the industry itself through pre-sales, etc.
The crisis, where there was always a gap in financing and where it was very hard to complete, was almost everything produced in Quebec, because the world market for Quebec programming is fairly limited outside of children and animation, and almost across the board in English Canada unless you were doing commercial co-productions that were not recognizably Canadian.
I was running Space for a number of years and there was a lot of science fiction that was technically Canadian--six, seven, eight points out of ten--and I would argue it never got CTF funding and didn't require it. And there are many average Canadians who really enjoyed those shows and there were a lot of Canadian actors and technicians who benefited from the production in Canada. My view is that lots of Canadian, right across the board, is good.
But when you talk about this fund and this particular very special recognition from both government, which is funding it, and the cable and distributors who have agreed to put money into it in order to keep their capital expenditure, the 50%, it was actually one of the more ingenious creations of the CRTC and of government to put together this fund to encourage the production of the most difficult-to-fund Canadian content in all these genres, which is ten out ten points Canadian content.
The average Canadian kind of benefits from having it out there as an option, even if he or she may not choose to personally spend their time watching the stuff due to personal preference.
We asked Mr. Gratton questions, and I am sure that you will remember that I specifically asked—it was exactly along the lines of your question, Jim—what was meant by “historical access“ and whether we were talking about total funding. We must make sure that we really mean 37% of total funding.
In my opinion, something is missing, but it could be handled with a friendly amendment. We would add the words "historical access" in parentheses after the word "total". If we do not refer to historical access anywhere, the problem remains. In French, if we say "fonds global", meaning public sector funding, that means all the funding contributed by Canadian Heritage. Under those conditions, saying 37% of the public-sector envelope would reduce the amount.
But in English, when we're talking about “total funding”, we should refer it to the total envelope from CTF. What you are looking for is the percentage of what it will represent in the future, even though it will split between private and public.
That's why I was asking the question regarding historical access. It's not 37% of the public envelope, because if that's the case, we'll now eventually have a decrease. You want to make sure that you keep that $96 million. What we have to do is add “accès historique”—“historical access”—because you have a reference.
I will talk about the amendment later on.