Robert Armstrong is a broadcasting and film consultant based in Montreal.

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What is the future of Canadian independent television production in an era of rapid technical change, stiff international competition, product diversification, industrial concentration and government retrenchment?

In the 1970s, there was no independent television production industry in Canada. A modest independent feature film industry, concentrated in Montreal, developed in the early part of the decade but was undermined, among other things, by changes in Canadian government policy relating to tax shelters (1974 to 1978).

The failure of this attempt to create a market-based Canadian feature film production industry led government policy-makers to turn their attention to a sector where distribution is regulated and production costs, on an hourly basis, are lower and more in keeping with the size of Canadian markets – television.

The rise of Canadian independent television production in the 1980s is essentially attributable to two public policy changes: the creation of Telefilm Canada’s Broadcast Fund in 1983 and the adoption of a spending approach to the regulation of Canadian content on conventional broadcast outlets by the crtc beginning in 1985.

According to the Memorandum of Understanding with the government that provides the framework for Telefilm’s Broadcast Fund, projects eligible for financing must be in the categories of drama, variety, documentary and children’s programs and produced by ‘Canadian independent producers who are not broadcasters.’

In the beginning, Telefilm had difficulty spending the money in the Broadcast Fund. But as the sector expanded and the financial requirements of eligible projects exceeded the financing in the fund, Telefilm developed a discretionary project-by-project approach to the evaluation of proposals, in which an analysis of the content of the production played a central role.

National TV drama

demand regulated

At the crtc, the commission opted to extend its spending approach, first adopted in 1982 for pay-tv licensees, to conventional broadcasters and the networks in particular. This involved the design of spending requirements for Canadian programs specifically tailored to each broadcaster.

Instead of relying on broad regulations that applied to an entire class of television licences, the regulator placed more emphasis on specific conditions of licence depending upon each licensee’s strengths and weaknesses as they related to Canadian content, particularly drama.

The combination of these two initiatives – the financing of independent production destined for television broadcast on the supply side, and the expansion of the market for drama programming on the demand side – gave rise to the independent television production sector in Canada in the 1980s.

In the 1990s, growth of the sector has been characterized by industrial concentration, recourse to the capital markets, diversification into related sectors, including financial services, post-production facilities, distribution and broadcasting, active participation in export markets, and reduced reliance on public sources of financing – at least for those involved in English-language production.

At the same time as a select group of production companies in Toronto and Montreal are enjoying outstanding success, the two institutions that initiated the remarkable growth of the independent sector 10 or 12 years ago are now under siege. The government’s desire for deficit reduction combined with a push to deregulate or simplify and reduce government activity are redefining how the funding agencies operate.

These changes will inevitably result in a reduced ability to finance programs or to monitor an increasingly complex environment. They are already characterized by a trend toward more automated forms of financial assistance, unrelated to the specific content of the project, and looser forms of broadcast regulation, by class of licence rather than by condition of licence. They may also be accompanied by a broader definition of international coproduction, involving less Canadian content.

What is indie production?

Greater capitalization and the desire to better control the conditions associated with the exhibition of their product has led a small number of the larger production companies into broadcasting. Diversification into related fields of activity is one way of stabilizing costs, prices and earnings. But can these companies continue to be called ‘independent’ producers?

Historically, in television, independent production in Canada has meant production by companies independent of broadcasting undertakings. In recent years, however, the convergence of independent production, broadcasting, cable distribution, telephone and dth satellite services has made the concept of ‘independent’ production more difficult to define. A small number of independent producers now own several specialty tv services and several broadcasters operate sizable production companies.

So what? What difference does it make? For one thing, ‘independent’ production companies have access to a range of government assistance from the funding agencies that the others do not. What is more, in the 1991 Broadcasting Act, section 3 (Broadcasting Policy for Canada) recognizes independent production and says that the programming provided by the broadcasting system should ‘include a significant contribution from the Canadian independent production sector.’ (Independent production is not defined in the Act.)

How should independent production be defined? In an increasingly integrated world dominated more and more by large, diversified companies, can the existing definition continue to hold?

One response to this question emphasizes the nature of the project to be financed, rather than the nature of the production company. By this approach, any production company, including those affiliated with broadcasters, could have access to public financing (on a project-by-project basis), provided the financing for the project comes from independent or arm’s-length sources.

In other words, to be eligible for funding from a public agency, a project undertaken by a production company affiliated with a broadcaster would have to be financed by broadcast licence fees and other sources of financing unrelated to that broadcaster. In this way, the project would be ‘independently’ financed and the production company would be acting de facto as an independent.

The future of Cancon?

The growth of the independent production sector could also reduce the effectiveness of the independent production associations. As production companies grow and diversify, their focus, interests and identity may change.

Increasingly, the producers’ associations are affected by tensions between big and small, public companies and privately held companies, those that hold broadcast licences (or plan to) and those that don’t, those that are deal-driven and those that are creatively driven, the centers and the regions, and so on.

This is nothing surprising or unusual. In fact, the problems facing the producers’ associations are more and more like those facing the Canadian Association of Broadcasters and the Canadian Cable Television Association.

As a result of their diverging interests, there is a possibility that the independent production associations will lose their effectiveness. For example, they were virtually absent from the crtc’s March 1995 public hearing on the future of the Canadian broadcasting system. In the commission’s report to the government, Competition and Culture on Canada’s Information Highway (May 1995), independent production is mentioned only once – indirectly.

This is surprising because the future of English-language independent production continues to rely heavily on the regulation of Canadian content by the crtc. In turn, the future of Canadian content in the new broadcasting environment depends, among other things, upon the ability of the independent production sector to clarify its strategic interests and pursue actively its agenda.