The federal government is to step in and decide the future of the embattled Canadian Television Fund.

As Josée Verner, the federal heritage minister, opened the CFTPA Prime Time conference in Ottawa, she announced her government has exercised its authority under the Broadcasting Act to snatch the CTF file away from the CRTC.

Like the referee that shakes his head ‘no’ as he sends fighting players to the penalty box, Verner warned that Ottawa will use the upcoming CRTC report and recommendations on the CTF after recent public hearings to reshape the $260-million industry fund.

‘Our government takes the need for change at the CTF seriously and values the CRTC’s input,’ Verner said, before looking ahead to the outcome of Ottawa’s deliberations.

‘Make no mistake. This will not be about the status quo — this will be about change,’ she told the producers’ annual conference.

Ottawa’s intervention came as debate on the future of the CTF — which came under assault last year when cablers Shaw Communications and Groupe Vidéotron temporarily withheld contributions — dominated Prime Time in Ottawa.

CTF chairman Douglas Barrett on Thursday told Playback Daily that Verner’s invoking section 15 of the Broadcasting Act to grab the industry fund file took him by surprise.

But he welcomed the latest effort to resolve a crisis that has surrounded the CTF since January 2007, when Ken Stein, SVP of regulatory affairs at Shaw Communications, declared the fund was ‘broken and cannot be fixed.’

‘There’s clarity now. There’s a process,’ Barrett said.

CRTC chairman Konrad von Finckenstein, in his own breakfast address to the Prime Time conference on Thursday, steered clear of the thorny CTF issue.

‘As you know, we held public hearings on the CTF earlier this month. I have nothing to say on that subject today, except that our decision and recommendations will be released in a timely manner,’ von Finckenstein said.

But privately, CRTC officials said the CTF file had become political, prompting Ottawa to arbitrate in what increasingly appears a game of winners and losers.

There was also speculation that Verner intervened to stop Canadian cablecasters and broadcasters as they attempted to do side deals with the CRTC to gain advantage during the current revamp of the industry fund.

Heritage Ministry officials privately suggested the government wanted to end the standoff between cablecasters and content creators — both urging more money for their own interests — by, as one suggested, ‘splitting the difference.’

How that might be done, especially in light of the recent task force report on the CTF that urged separate commercial and cultural streams, dominated a Prime Time panel on the industry fund on Thursday afternoon.

Representatives of Shaw Communications and Quebecor Media did not participate in the panel, which limited the range of opinion on the CTF’s future.

In a repeat of last month’s CRTC hearings, content creators argued in favor of the CTF’s current structure, while BDUs and broadcasters said they favored the task force proposals for a dual-stream fund.

Chris Frank, VP of programming for Bell ExpressVu, and Pamela Dinsmore, VP of regulatory, broadband and video at Rogers Communications, raised red flags over CTF funds increasingly being diverted to homegrown shows that fulfilled cultural and social policy goals, rather than build commercial audiences.

‘We think having one [CTF] board trying to combine the public and social objectives with the private and commercial objectives won’t work,’ Dinsmore told Prime Time attendees.

David Goldstein, SVP of regulatory affairs at CTVglobemedia, mocked a proposal by rival Canwest Media to apportion CTF dollars based on overall audience ratings.

‘They want audience credit for U.S. programming as well as Canadian programming. I don’t think Parliament meant that when they put together the Broadcasting Act,’ he said, with Tara Ellis, VP of Showcase and drama content at Canwest, at his side.

Other news that surfaced Thursday in Ottawa included Barrett revealing that he will stand down as chairman of the CTF in June after four years in the post.

As well, the CRTC’s von Finckenstein said he will make establishing terms of trade agreements between Canadian indie producers and broadcasters mandatory.

‘It is not the job of the CRTC to get involved in the contractual arrangements among the various players in the industry,’ von Finckenstein told the CFTPA conference. At the same time, he said he had agreement from domestic broadcasters that they will work to establish minimal commercial standards in their dealings with often aggrieved producers.

‘Terms of trade agreements are going to become part of the landscape in the Canadian broadcasting industry. They will bring to the negotiation process not only clarity and stability, but also some degree of predictability – a principle which we consider particularly important in such a volatile industry,’ he said.

The Prime Time conference wraps on Friday.