Reality bit in 2003. Not only did the War in Iraq and the outbreak of SARS affect the way Canadian broadcasters and producers did business this year, but the increasing impact of reality television made itself very clear right at home – as more Canadians watched Ryan Malcolm get elected Canadian Idol than had ever before watched a domestically produced series episode.

Over the year, television service production volumes commissioned by our friends south of the 49th plummeted, in part due to the effect of lower-cost reality programming and the reality of the rising value of the Canadian dollar, edging ever closer to US$0.80.

If there was a defining moment for homegrown film and television people, however, it was the Fear Factor edition of the Canadian Television Fund brouhaha last spring, as cultural staples such as This Hour Has 22 Minutes went wanting after a 25% cut from the federal government allotment, announced by Minister of Finance John Manley.

CTF funding for the spring round was $172 million, or 51% of demand from Canadian producers. Broadcaster priorities, a major criteria for funding, did little to guarantee their commissions would make it through the Licence Fee Program and Equity Investment Program hoops.

The drama was heightened when the CTF borrowed $12.5 million from next year’s already-depleted fund to calm this year’s hewing and crying, providing an eleventh-hour reprieve to shows such as The Eleventh Hour.

The dire state of Canadian drama was highlighted in the fall when there weren’t enough quality primetime series to round out the five best drama Gemini nominees without adding the six-ep anthology series The Atwood Stories.

The crisis was also the subject of a slew of reports – headlined by Trina McQueen, Francois Macerola and the Standing Committee on Canadian Heritage – each with its own sets of solutions. McQueen’s recommendations included $30 million more per year in funding, continued political support, better promotion, and looser broadcaster regulations in order to boost viewership of English-language drama, while Macerola called for a revamp of Canadian content rules.

Through it all, federal politicians hosted a parade of actors, producers and industry lobbyists pleading the case for the resumption of the federal government’s full $100-million CTF contribution and an increase in the Canadian Film or Video Production Tax Credit.

With the long-term goal of Telefilm Canada to increase the Canadian box office with more commercial films, the Quebec sector pulled its weight with the success of films such as Seraphin: Un homme et son peche, La Grande seduction, Les Invasions barbares and Mambo Italiano. Quebec also helped the English-language cause as Mambo boosted an otherwise meager take from the English offerings this year, underlined spectacularly by the bomb of Foolproof.

All may not be lost on the English side, though, with director Norman Jewison’s feature The Statement, his first Canadian coproduction, looking to generate Oscar buzz with its December debut.

On the small screen, Canadians – both English and French – took to their televisions in droves in 2003, making hits out of such shows as singing contests Star Academie and Canadian Idol. For example, an average audience of more than three million viewed the final episode of Idol, peaking to 3.6 million in the closing 30 minutes, according to Nielsen Media Research numbers. That’s one of the biggest rating wins in Canadian history. Academie and Idol, along with Train 48, point to more Canadian productions moving into low-cost, audience-generating format programs.

In terms of low-cost success stories, the growing buzz around Trailer Park Boys was another marker in ’03.

Canada’s broadcast wars extended to the second tier with Craig Broadcasting’s launch of Toronto 1 and CHUM’s ‘counterstrike’ move into Alberta. Canadian news services, meanwhile, trying to compete with the American networks, blew up their budgets with comprehensive coverage of the Second Persian Gulf War – the impact of which was felt at CBC, for instance, with the cancellation of some regional Newsworld programming.

On the service side, despite a boost for the Production Services Tax Credit to 16% of eligible labor expenses, work from the U.S. tapered off in the major production markets with the rising cost of the Canadian dollar, the volatility of international markets, the decline in dramatic television overall, SARS outbreaks in Toronto, fires in British Columbia and a ‘mad cow disease’ scare on the Prairies.

Toronto production volumes were so brutalized in 2003 that the FilmOntario consortium was formed in June to try to revive foreign and domestic production in Ontario.

The outlook didn’t improve in October when Arnold Schwarzenegger was elected governor of California on a platform that included plans to stem runaway production.

Twitchy international markets contributed to troubles at Regina-based Minds Eye Entertainment, which in July voluntarily applied for bankruptcy protection under the Companies’ Creditors Arrangement Act in Saskatchewan. The application was Minds Eye’s bid to restructure and continue with its core business of film and TV production and international distribution.

Canada/U.K. copro threat

The viability of Canada/U.K. coproductions also came under question in 2003 when the Brits imposed a minimum spend requirement of 40% for feature films, leaving industry commentators to predict serious declines in Canada/U.K. copro activity.

2003 also marked the loss and exit of some of the industry’s most prominent leaders, most notably through the sudden death of CanWest Global founder Izzy Asper in October. Television visionary Moses Znaimer retired from CHUM in May to focus on personal projects, while Elizabeth McDonald resigned her post as president and CEO of the CFTPA in August. Janet Yale also called it quits as president and CEO of the Canadian Cable Television Association.

On the regulatory front, the CRTC rejected a contentious application by the CCTA to add U.S. premium services to its digital offerings.

At year-end, meanwhile, the CTF board, looking to come up with a long-term solution to the festering issues that have plagued the industry through 2003, announced a series of sweeping changes to the fund. These included the creation of broadcaster envelopes, a single application process and greater emphasis on audience results. The federal government also agreed to increase eligible labour costs on the Canadian Film or Video Production Tax Credit, helping improve revenue potential for domestic producers.

Both the CRTC and CTF announcements were good news for an industry that had seen very little to celebrate in 2003.