It’s been quite a ride these past 16 months for Canadian Television Fund president Sandra Macdonald. From nearly her first day on the job in September 2002, Macdonald, the former government film commissioner and chair of the National Film Board of Canada, had to deal with scores of disgruntled producers and broadcasters complaining of a funding application process too complex, time consuming and unpredictable.

The loudest roar came last spring when the federal government cut its annual $100-million contribution to the fund by 25%.

There was also a great deal of confusion over how to approach the newly introduced, now ditched Broadcaster Priorities, a system that awarded dollars to shows based on how commissioning networks ranked them, and which the fund had trumpeted as a solution to what was fast becoming a crisis in Canadian TV production.

The crescendo came in the spring as several established shows, including This Hour Has 22 Minutes and The Eleventh Hour, failed to get a share of License Fee Program dollars, throwing the industry into a funk not seen in decades, if ever. The CTF worked tirelessly to draw the needed funds, including borrowing from its 2004 allocation, and most of the projects managed to go into production. Last year the CTF doled out a total of $221 million.

Yet, Macdonald says, there was no question that fundamental changes were needed.

Now, after months of consensus-building among producers, broadcasters, distributors and talent – all represented on the CTF board – Macdonald and her team have emerged with a revamped set of guidelines and guarded hopes for a new beginning.

Playback sat down with Macdonald to discuss the new guidelines and how the industry got from there to here.

PB: How would you summarize the past year?

SM: Obviously the reduced [federal] funding caused us to look very seriously at what we were doing. In part because of the reduced funding, the way we were doing things – where people faced the possibility of getting a ‘Yes’ in one [funding stream] and a ‘No’ in the other – caused a lot of grief for our clients. That problem [becomes] much more obvious when you have less money.

So it focused our attention on the fact that it would certainly be preferable for all concerned if we could find a way to streamline the process so that people got one answer, made one application. We started down that path late in the spring.

PB: Beyond streamlining the process, what were the goals going in?

SM: We had four goals that we set for ourselves looking at how we would redesign the system, greater simplicity [being one]. We also wanted to put greater emphasis on audience success for the programs we fund. This was in line with the recommendations of the standing committee on Canadian Heritage and the various reports done for the CRTC. Audience success is one of the things we are being strongly encouraged to reward.

The third thing is, we wanted to recognize that there are considerable differences between the French and English markets and it would be quite proper to have what we call an asymmetrical approach.

And finally, we wanted to get as much leverage out of the CTF dollars [as possible]. So we wanted to do things in such a way that we encouraged people to find other financing partners for their shows.

PB: Simplifying the process has been an issue for some time for producers and emphasizing audience success seems to be a no-brainer. Why are these elements only now coming into play?

SM: The two parts of the fund, the Equity Investment Program and the Licence Fee Program, have different corporate structures, they have different sources of financing and they have different boards.

The creation of the CTF – the joining of those two programs – was not a permanent measure when it happened. It was, in the first place, intended to only be for two and a half years. That stretched out to five, and it has carried on. So one of the reasons that a much more complete harmonization of processes did not occur was because it was never clear that those two pieces would be going along together indefinitely.

PB: What was wrong with Broadcaster Priorities? Why abandon that after only a year?

SM: You might say that in a way the Broadcaster Performance Envelope [system] is the child of Broadcaster Priorities. The idea behind Broadcaster Priorities was that broadcasters should know their audiences better than anybody else. If it is indeed audience success that we want for the shows, then the shows that they think will do best with audiences should carry some weight. So you could say the envelopes just carry Broadcaster Priorities further down the road.

PB: But there were complaints…

SM: There were things that in hindsight we would have done differently if we had gone ahead and kept that system [intact].

PB: Such as?

SM: We probably wouldn’t have given the same number of priorities in a few cases. In the French market in particular, I think that we created an imbalance by the number of priorities that we gave. So we would have adjusted that. We didn’t anticipate that some broadcasters, especially the smaller specialty services, would use their priorities to go into whole new genres of activity. We probably would not have given everybody a top priority. That was a choice we made, but could have done differently.

PB: Why was that a problem?

SM: We ended up having, particularly in drama, a bunch of people getting rather large shows on the LFP side. That probably would have not occurred without them having that priority.

PB: The EIP and LFP have different criteria for selecting shows. Now, under broadcaster envelopes, the decision-making is in the hands of broadcasters for disbursement of both funds. How does Telefilm or the CTF exercise control of the funds they manage?

SM: We’re working through a merged set of requirements. Some things are not changing. Our eligibility criteria are not changing. The genres we support are not changing. Most of the business practices are pretty harmonized already. The remaining pieces here and there, we’re ironing out right now.

PB: Take us behind the scenes to the board meetings where the new guidelines were hashed out. What were some of the problems you encountered dealing with this divergent group?

SM: The biggest one we had to work our way through – and it was a big, big challenge – was how will we measure audiences. And we’re going to learn as we go at this. But just to arrive at the point where, for example, the conventional broadcasters and specialty broadcasters said ‘Okay, if we do it this way it’s fair enough…’

PB: Did producers express any concern with broadcasters getting more power through the envelopes – that, perhaps, broadcasters won’t hold the producers’ best interests at heart?

SM: Yes. It’s a legitimate concern people would have that this process gives too much power to broadcasters. But where we ended up with that – because, certainly, producers signed off on all of this – is there are advantages as well.

They all need to have a broadcaster signed on before they come in anyway, so the broadcaster was the critical piece no matter what.

But the plus that you get out of this is certainty. The broadcaster greenlights the show and then you know. So it’s not a lottery. You don’t get a ‘Yes’ from the broadcaster and then get an answer from the fund of ‘No, we don’t have enough money.’

Another thing is that it removes the need to have deadlines, so you can get a project greenlit anytime during the year. There will still be a deadline for English drama, but for all the other categories there won’t be a deadline. That is a feature a lot of people feel is very positive, especially the documentary makers.

PB: Was there anything on the table that you believed was absolutely critical to integrate for the good of the new guidelines, despite any opposition?

SM: I believe that it is critically important for makers of Canadian programs to think in terms of audience success, because over the long term the financing will not be there if the public does not care about what is being made.

PB: Are there other jurisdictions that use similar funding programs to support TV production? Or is this a unique made-in-Canada solution?

SM: I don’t think there is anything just like this. But the thing to remember is most countries, first of all, are not federal and therefore don’t have the involvement of provinces or states. The provinces are big players in this game. Our approach takes into account that we have more players and the financing structures are different on account of that.

The other thing is that most countries don’t have nearly as many mechanisms that producers can go after to get money. Usually it’s in the hand of the broadcaster to a very large degree and if they are going to commission the show, they are probably going to be paying 80% of the cost of it.

So that’s a factor. The countries we would be talking about usually have a larger population, they don’t have two languages that they have to deal with and they have fewer broadcasters. We have more broadcasters than anybody. So fragmentation is a big issue, too.

So all of these things make our situation one where there aren’t a lot of models you can adopt from other places.

PB: Invariably, when one undertakes a process of revamping such as the one the CTF just did with its guidelines, there are people who complain. What do you anticipate?

SM: We certainly know that some of the envelopes will be quite small. And nobody likes a small envelope. I don’t know that we’ll get criticism for that, because we arrived at the levels in a very mathematical way. There was no subjectivity in the size of the envelopes. But there will be some unhappy people over that.

There are people, both broadcasters and producers, who are quite plain in saying they don’t want audience to be an important factor. We know that. On the other hand, we’ve had some pretty clear guidance that we should go there and we feel that we’re doing the right thing in that regard. But there certainly will be criticism.

PB: Are there contingencies that will allow the CTF to make necessary adjustments should there be some unforeseen problems?

SM: First of all, we are going to be holding back 10% of all the money that is oriented to envelopes until we get through the first quarter of the year to see whether any unanticipated effects have popped up that we need to correct.

The other area where we’re going to have to learn on the job and adjust as we go is with the whole business about how we do audience measurement. We’ll have to be prepared if we see that something is working badly to see if we can make it work better. Those are the things we’ll be looking out for the most.

For the first year, we attempted to have the system quite closely track what the patterns have been in the past. We’re giving the broadcasters their money by genre based on what they were typically doing in the past, and they don’t have very much flexibility to do anything other than the things they were doing in this first year. Over time, gradually, more flexibility will come into it. And broadcasters that do best with audiences will have larger shares. But we tried to start off in a way that was rather similar to the normal blend of things to try to avoid big surprises.

PB: Does the current system allow you to be as selective as you’d like?

SM: One of the things we would like to do, in English drama in particular, would be to get to the point where we could finance some more risk-taking and be in a position where we could let some [projects] go that we’ve invested in because they’re just not measuring up.

That’s one of the problems we really do face at the moment. Once we commit to something, we don’t have much room to maneuver.

PB: Do you think broadcasters have done their best with the Canadian dramas they air in terms of marketing support?

SM: In many cases we could have expected more promotion. But I don’t want to minimize the cases where people have done a good job. Particularly the movies of the week and miniseries have been quite well promoted. So it isn’t a uniformly poor picture. But I think that we all agree that if we want these shows to succeed, they need to be well scheduled, they need to be well promoted and they need to be good.

PB: What about pilots? Is there room in the system for that?

SM: One of the things that we mentioned in the Special Initiatives [stream] is that we want to spend some money on things such as audience research, a pilot now and then, additional support for marketing and spending beyond the initial investment in the show that will help the show succeed with the public.

-www.canadiantelevisionfund.ca