TORONTO (CP) _ Videotron’s decision this week to stop making its monthly payments to the Canadian Television Fund makes it impossible for the agency to plan for the upcoming year and that could put thousands of jobs at risk, the fund’s chairman said Wednesday.
CTF chairman Douglas Barrett said the Canadian television production industry will become "chaotic" as the fund struggles with an impending $63-million budget shortfall after Shaw Communications (TSX:SJR.B) said last month and then Videotron announced Tuesday that they would suspend their contributions.
"This is tens of thousands of jobs," Barrett said in an interview from the Quebec’s Eastern Townships, where the fund’s board is holding a retreat until Thursday.
"If these productions don’t proceed, this has an impact on broadcast schedules and production companies in this country who are already in a fragile state."
The fund said Wednesday it will ask Canada’s broadcast regulator, the Canadian Radio-television and Telecommunications Commission, to take legal action against Shaw and Videotron..
"The CRTC has regulations and it’s their legal duty to enforce them," Barrett said. "And we’re going to ask them to do so."
Quebecor Inc. (TSX:QBR.B), which controls Videotron through Quebecor Media, is also demanding that Heritage Minister Bev Oda launch a review of the management of the fund, which is coming up for renewal in March.
The latest developments are "very concerning" and will have a "significant impact" on Canada’s television industry, Chisholm Pothier, a spokesman for Oda, said from Ottawa.
"We hope that the sides come to a quick resolution, but in the meantime, we’re going to monitor these events as they unfold and what action we take will be determined in the wake of what happens in the next few days," he added.
CRTC regulations require medium and large cable and direct-to-home operators to contribute to the fund, based on a formula which includes gross revenues and the number of subscribers.
The CTF invested about $264 million in Canadian programming in its 2005-2006 year and receives about $100 million annually from the federal government.
But the two cable distributors say they are frustrated with the CTF, which they say isn’t paying enough attention to the concerns of its private-sector contributors.
Quebecor also objects to the fund reserving 37 per cent of its production funding for the government-owned Canadian Broadcasting Corp. and its French-language counterpart, Societe Radio-Canada, even though the CBC/SRC also receives more than $1 billion in government funding annually.
Videotron contributed $14.3 million to the fund in 2005 and estimates that its obligation will be about $16 million this year. Shaw’s contribution is about $56 million.
A spokeswoman for Rogers Communications, owner of the country’s largest cable distributor, declined to comment about the funding pullout, but said Rogers has contributed between $25 million to $29 million annually to the fund over the past few years.
Rogers estimates that its contribution to the fund will be about $34.1 million in 2006, but the company, like many who contribute to the fund, has the option to divert 20 per cent of their contributions to another CRTC-approved independent production fund.
Created in 1994 at the request of the CRTC, the CTF has helped fund such television shows as "Degrassi: The Next Generation", "Trailer Park Boys" and "DaVinci’s Inquest."
The fund’s board includes representatives from the Canadian television production and distribution community, Department of Heritage, Canadian cable and direct-to-home satellite companies and Canadian broadcasters. Board members are elected each year and at least five directors must be independent.
The fund’s board of directors is expected to meet in late January for a previously scheduled strategic planning session to establish the future direction of the organization.
But already, Videotron’s decision to join Shaw in withdrawing its financial support of the fund is sending shockwaves throughout the domestic television industry, whose could see project funding dry up within the next few months.
"The Canadian production industry would die a slow death _ maybe not such a slow death _ and the Canadian creators would no longer have work," said Pamela Brand, executive director of the Directors Guild of Canada, which represents over 3,800 people in the film and television industry.
"The Canadian voice would be completely gone, and the industry would wither and die. That’s what is at stake for us."