The CRTC has given the interactive media sector a shot in the arm, earmarking for it $10.5 million of the benefits package associated with the buyout of BCE by a consortium including the Ontario Teachers’ Pension Plan and U.S. partners.

When the commission approved the buyout with conditions on March 27, it upped the evaluation of BCE’s broadcast assets from $109.6 million to $219.1 million, resulting in a benefits package of $21.9 million — double the proposed $10.96 million.

The CRTC decreed that $10.5 million of the additional benefits money must be invested in an interest-generating fund, with the interest being transferred each Aug. 1 to Telefilm Canada’s Canada New Media Fund.

‘At a 7% return, that is [$735,000] each year that we didn’t have this year. It’s good news for the new media sector,’ says Marc Seguin, VP of feature film and new technology at the CFTPA. ‘Interactive media is the future, but it is under-supported compared to film and television. There are no federal tax credits for new media, and government funding for the sector is lower.’

James Lewis, executive director of the Canadian Interactive Alliance, adds, ‘Any additional funding is good for new media, but this yearly amount is 2% of the $35 million that we said two years ago the Canadian New Media Fund should be at.’

The CRTC also indicates the Canadian Television Fund will be launching its own new media stream. The decision stipulates that the annual interest eventually be transferred to the CTF instead, once its new media fund is established. The funds will be disbursed ‘in accordance with the terms of the CTF new media fund,’ notes the CRTC decision.

About 94% of the original proposed benefits package of $10.96 million was for on-screen initiatives, including $4.1 million over seven years going to the Bell Broadcast and New Media Fund.

The CFTPA noted in its written comments in the proceeding the ‘need for the broadcasting system to provide increased assistance to the interactive media production sector.’

This new money for digital media comes days after the Ontario provincial government included $9 million in new subsidies for local digital content creation in its latest budget.

The remainder of the additional benefits can be allocated to initiatives approved in the decision, such as priority programming, or the consortium may propose a new benefit initiative for CRTC approval. The consortium has until the end of April to file with the CRTC its plans for the entire benefits package. The OTPP’s U.S. partners in the $34.8-billion BCE deal include Providence Equity Partners, Madison Dearborn Partners and Merrill Lynch.

The CRTC is also requiring the consortium to take steps aimed at ensuring that BCE’s broadcasting assets, which include Bell ExpressVu and a minority stake in CTVglobemedia, remain in Canadian hands.

The investors must freeze the number of directors on its board at 13, and ensure that Canadian investors at all times nominate six directors. As well, the board chair must be Canadian and also must not be the company’s CEO or a director elected by the non-Canadian investors.

‘Consistent with previous decisions, we have imposed conditions to address our concerns relating to corporate governance. These conditions will ensure that control of BCE remains in Canadian hands once the transaction is completed,’ CRTC chair Konrad von Finckenstein said in a statement.

BCE acknowledged the decision in a statement, and said it expects the purchase to close by the end of the second quarter. The deal must still get the approval of Industry Canada for transferring BCE’s wireless spectrum.