Ted Kelterborn is a lawyer at the Toronto law firm of McMillan Binch and a member of the firm’s KNOWlaw Group.

In late August, the crtc issued Public Notice CRTC 1999-135 ‘Definitions of a Canadian Program – Clarifications and Proposed Revisions,’ in which it set out its proposed revisions to the current definition of what constitutes a Canadian program. The notice follows the public process held by the commission in June of last year regarding recognition for Canadian programs.

According to the commission, the majority of the proposed revisions contained in this notice are simple wording clarifications, reflecting interpretations developed over the past 15 years. However, the proposed revisions also contain material changes that should be of interest to broadcasters, producers and others in the Canadian film and television industry.

If the crtc’s proposals are adopted, some of the major changes which will take effect September 1, 2000 are:

Advance rulings and preliminary recognitions

Advance rulings and preliminary recognitions will no longer be issued by the crtc. The commission will continue to issue final recognition or special recognition (‘c’ or ‘sr’ numbers), as the case may be, where the program complies with the revised ‘Canadian program’ definition, provided that the production is underway, with all key creative personnel under contract and committed budgets in place.

The elimination of these rulings will no doubt complicate interim production financing which frequently requires some preliminary proof of Canadian content status.

Producer control – legal opinions

Producers will have to be prepared to submit, upon the crtc’s request, an independent legal opinion confirming that financial and creative control of a production is Canadian. Such an opinion will be difficult to give and will require the lawyer giving it to conduct extensive diligence and/or to make extensive qualifications and assumptions and to rely on lengthy certificates of fact given by the producer requesting the opinion.

Also, the use of the term ‘independent legal counsel’ implies that such opinions cannot be given by a production company’s in-house lawyers. In short, the type of legal opinion proposed by the commission will be time consuming and costly for producers to obtain.

Series – overall 60% Canadian content

In order to claim Canadian program recognition for any episodes of a television series which do not meet the six-point Canadian program recognition criteria, at least 60% of the series’ episodes will have to exceed this criteria; all episodes will have to be broadcast at equitable times.

In addition, all episodes will have to meet the mandatory three-point rule for key creative personnel, which means in the case of a dramatic series, the writer or director and lead performer must be Canadian. Moreover, any series which needs to avail itself of this averaging rule will not be eligible for the 150% dramatic programming credit.

Dramatic programming 150% credit

In an earlier public notice, the crtc announced that the existing 150% credit for dramatic programming will no longer be available to the largest multi-station ownership groups (wic, CanWest, etc.). In addition, coventures and coproductions will no longer be eligible for the credit, nor will programs that fail to achieve the 10-point Canadian program recognition criteria, even if a Canadian fills each position utilized. Series that do qualify for the credit will have a single two-year period for each airing of each cycle of the series, commencing with the airing of the first episode of the cycle.

Animation

In order for animated programming to qualify as Canadian programming, the minimum Canadian expenditure levels for services and post-production and lab work will be 75%, and the key animator will have to be Canadian.

Sports events

Live productions or taped versions of live productions of sports events will be considered Canadian where a Canadian production company has production control and provides the commentators, regardless of the location of the event. Where the event takes place outside Canada, Canadian-based teams or athletes must participate. No event will qualify as Canadian unless one of the major on-camera personalities (hosts, analyst, commentator) is Canadian.

Stock footage, interstitials

Except for documentaries, foreign-produced stock footage will be limited to less than 50% of the running time of a program.

Productions of less than five minutes in duration and which consist predominantly of stock or existing footage will no longer be certified.

The commission also considered and rejected certain proposals made by various stakeholders during the June 1998 hearings. Among the rejects were:

Harmonization of CAVCO and CRTC rules

Several producers and their associations had proposed that the crtc transfer its accreditation function to cavco, or at least harmonize the criteria used to determine Canadian content status by the two entities. In response to these proposals, the commission noted that cavco’s mandate under the Income Tax Act is simply to ensure that programs are Canadian for tax-credit purposes, whereas the commission’s objectives under the Broadcasting Act involve much broader considerations.

The commission concluded that, given the significantly different mandates of the two entities, the unification of the two certification processes, or the complete harmonization of the two Canadian content definitions would be impractical, but did note that it had adopted numerous cavco definitions and interpretations over the years, where appropriate.

Coventures – special recognition process

Two producers associations recommended that the commission discontinue its practice of awarding ‘special recognition’ or sr numbers to internationally coproduced programs not encompassed by existing treaties. The producers’ complaint was that these productions limit the ‘shelf space’ otherwise available for the broadcast of ‘truly’ Canadian programs.

Not surprisingly, broadcasters opposed the producers on this point, noting (as if the producers had overlooked the point) that this would eliminate one avenue for producers seeking foreign financing.

In the end, the commission decided to continue the sr process, noting that the limited number of coventures certified each year (typically six or seven) does not seriously reduce access to broadcasters’ schedules.

Eight-point minimum

Several organizations and guilds recommended the raising of the existing six-point minimum for key creative positions to eight or more. The commission rejected this selfless proposal, noting its view that the current minimum strikes the correct balance between ‘cultural’ and ‘industrial’ objectives and conforms with cavco’s guidelines.

Producers availing themselves of tax credits will still be governed by the cavco regime and certification by the Minister of Canadian Heritage, upon recommendation by cavco, will continue to constitute recognition for Canadian programs by the crtc. As such, the changes listed above will likely have little effect on these producers. Nonetheless, anyone who deals with Canadian content certification should certainly take the time to review the public notice in its entirety.

(This article contains general comments only. It is not intended to be exhaustive and should not be considered as advice in any particular situation.)