Rogers Communications is first out of the gate en route to listing its non-voting shares on the New York Stock Exchange and CanWest Global Communications is likely not far behind, as broadcasters begin capitalizing on the raised ceiling on foreign investment quotas.

The change in regulation, which raises the allowable foreign ownership on a broadcasting holding company to 33.3% from 20%, is the latest in a litany of potential regulatory changes to the broadcasting industry leaving independent producers increasingly worried about the future.

The Canadian Association of Broadcasters has lobbied on several fronts this year, vying for the increase in foreign investment, access to government funding arms for production, and eligibility for the new production tax credit. In tandem, the Liberal government axe has come down on arts funding with more cuts to come, and any positive effects of multiple distribution systems on the production industry have yet to be proven.

Elizabeth McDonald, president of the Canadian Film and Television Production Association, says it all adds up to ‘a potential disaster’ for the independent community.

‘We’re not arguing the broadcasters shouldn’t have the right to foreign investment. The bigger picture is the greater concern. There’s a kind of a trickle-down effect going on out there, and it’s not exaggerating the point to say all these things put together could seriously undermine the production community, jobs, and the Canadian broadcasting system as we know it.’

According to McDonald, the decision on foreign investment quotas and any subsequent decisions in the broadcasters’ favor on funding access policy and the production tax credit add up to more money for the broadcasters. At the same time, consolidation is becoming increasingly important, ‘so there’s more money going into less hands.’

‘There’s a real threat to diversity here,’ she says.

Michael McCabe, president of the cab, says the perception that what the broadcasters are trying to do in any way undermines the production community is a misunderstanding.

‘We are their customers. If we aren’t strong enough to buy their product, they’ve got a problem. What we’re trying do is grow the pie. Our objective is more and better Canadian programming – in this we will play a role and the independents will play a role,’ he says, adding that in part, the broadcasters will be relying on the already established international distribution arms of the production companies.

But whether the bigger, more internationally influenced broadcasting industry that comes out of the change in foreign ownership regs is as Canadian controlled as it is now remains to be seen.

Sandra Kresch, president of Partners in Strategic Development, New York, says American investors will definitely be interested in a piece of Canada’s English-language market with its cultural similarities to that of the u.s. The degree to which they could change the look of the broadcaster depends on ‘whether they’re here to make money or if they ultimately want some degree of control in the market and this is just a toehold.’

‘If they were to have impact, it would be in the form of a tug between the aesthetic sensibilities of the investors and the local producers which are making programming consistent with what they know to be true to the market.’

Kresch adds that u.s. dollars contributing to Canadian programming could be a positive move that results in ‘more cross-border migration of product (Canada to the States).’

For that to happen, Canadian product will have to have production values on par with u.s. product and be commercially viable, a point Micheline Charest, chairman and ceo of Cinar Films, Montreal, says is key to whether an increased volume of Canadian product stems from the injection of foreign investment.

‘There is no guarantee that the production community will benefit from the broadcasters’ new resources unless it is clearly the intention of the regulators that we create an environment in which the broadcasters have to, or derive benefit from, creating more Canadian content. Access to more capital is great, but we need to make sure the system doesn’t become unbalanced.’

Although CanWest Global Communications was advocating an increase in allowable foreign ownership to 49%, Peter Liba, executive vp of operations for CanWest, says they’re satisfied with the decision. CanWest, like Rogers last week, is looking into listing shares on an international stock exchange, but it’s too soon to talk specifics, says Liba.

Liba stresses that increased foreign investment and the consolidation it enables are key to the broadcaster’s survival.

‘You have to realize that if we’re going to build something like a Time Warner, we have to have access to capital. The Canadian control, real and de facto, remains in Canadian hands.’

Liba says a stronger broadcasting industry benefits the whole sector. ‘There’s no formula for this. Having foreign investors will allow broadcasters to use the synergies with companies they have shared interests with from across the world and be able to do more on the programming side as a result of those relationships. A bigger, stronger company will be able to do more things than we can today.’

To the charge that broadcasters dipping into shrinking funding pools could take away from what’s available to independent producers, McCabe stipulates that ‘first of all, none of this has happened yet. We haven’t begun talking about access to funds like Telefilm except in the most general way,’ and adds that the cab was the catalyst to establishing the Cable Production Fund. ‘We’re trying to increase the money to them, not to us.’

Michael MacMillan, president and ceo of Atlantis Communications, says stronger broadcasters are positive for the industry, but adds the only way production jobs will increase is if the broadcasters are required to or have the incentive to produce more Cancon, or if there are more Canadian channels on air.

He adds that as the Canadian broadcasting industry becomes more international, ‘we can’t forget to stay departmentalized and tell our own stories at the same time.’

McCabe says now is the time for broadcasters and the production community to sit down and work on a collective strategy instead of butting heads. The cftpa could work with the cab on proposed changes to the simultaneous substitution regulations, for example.

He says there’s no guarantee in place that the increase in funds at the broadcasting end will find its way into producers’ pockets, ‘but a fair amount of it will, and I think if we could work together, we might be able to find a way to make some guarantees.’

McDonald says the future is contingent on who takes the chairman’s position at the crtc when Keith Spicer leaves in June, and says it is crucial that the chosen one has a vision incorporating both the cultural and business side of the business.

According to other industry sources, two new potential crtc candidates grinding through the rumor mill are Catherine Murray, professor and director of policy research on science and technology at Simon Fraser University and a member of the Juneau Committee, and Janet Yale, former crtc legal counsel, now with the Stentor consortium in legal and policy.