Montreal: The industry has welcomed Canadian Heritage’s call for an extensive review of the Canadian film and television content system. Heritage Minister Sheila Copps has asked former Telefilm Canada executive director and chairman Francois Macerola to prepare a report, which is likely to be tabled about a year from now.

The minister says it’s time to review the 30-year-old rules, which incorporate multiple definitions and jurisdictional authority related to production tax credits, broadcast regulation and the program funding system. The review will consider the overall coherency of the various mechanisms and ask what models can best serve the Canadian film and television production industry in the years ahead.

Macerola says the review mandate is intimately linked to production and distribution financing models. ‘I will really try to concentrate on the financing, but in order to do that one has to define Canadian content. I will not try to involve myself in the concept of regulation. That is the CRTC’s mandate.’

Macerola’s review will examine the definitions of Canadian content and related program financing, the evolution of national and international marketplaces, and the relationship between indigenous production and coproduction.

He plans to crisscross the country at least twice during the review period, conducting a series of preliminary talks at the Banff Television Festival, June 9-14. He’ll also meet with international industry players, including representatives from the U.S., before he tables his findings with the minister and welcomes an open debate.

Elizabeth McDonald, CFTPA president and CEO, says the review is both welcome and timely. ‘There’s no question it’s a huge issue. There have been a lot of changes in incoherent ways, whether in the regulatory system, the tax system [or] the funding system.’

Both ACTRA and CAFDE have tabled revised, and contradictory, Cancon models for Canada Feature Film Fund projects, with distribs arguing the system has to embrace international talent to achieve box-office success.

Producers appeal LFP decisions

The absolute requirement for visibly Canadian criteria in the LFP continues to be another contentious issue. As many as 30 appeals of current LFP decisions have been filed by producers in instances where projects received top-dollar support from broadcasters, but apparently came up short on the visibly Canadian score.

Arnie Gelbart, president of Montreal’s Galafilm, cautions the review’s mandate is very broad.

Gelbart says if funding programs ‘have to immediately be totally and overwhelmingly Canadian, because the Cancon regulations are so strict and tight, economically it won’t make sense because the subsidy system will go almost exclusively to Cancon-only production.’ The tendency in the past year or so, he says, has made it virtually impossible to do minority coproductions. ‘And over time this becomes very counterproductive because the foreign perception is that there is no reciprocity and coproduction exists mostly to fund Canadian production.’

Producers aren’t only upset at losing their development investments, and time, but are concerned the CTF decision process, managed by yet another level of bureaucracy, is mired in subjectivity, prompted mostly by ongoing over-subscription levels.

If content regulation is a determining factor in declining export sales, and the lack of reciprocity in coproduction, others argue it’s somewhat of a red herring in view of recessionary markets in Europe and Asia, or massive vertical integration in the U.S. industry.

McDonald says the primary issue around the CTF’s ‘distinctly Canadian criteria’ is the need to ensure more objective evaluation criteria. ‘Part of the problem is that programming that is marketable doesn’t necessarily always make distinctly Canadian.’

Contradictory definitions

Cancon, in terms of definition and application, is defined differently by CAVCO and the CRTC, and those yardsticks differ from the triggering levels required by funding sources such as the EIP, the CFFF and the LFP.

David Zitzerman, partner, Goodmans LLP, says the system embodies many contradictory approaches and the question is: ‘Is the reason [for this] because the programs are all achieving different objectives, [therefore] it’s a good thing for them to be contradictory?’ A case in point, he says, was the CRTC decision to reject the wholesale adoption of CAVCO rules.

Zitzerman says the review should carefully consider the objectives of the defining Cancon programs.

‘To give you an example, in a typical 10-on-10 Canadian production, which is normally what CTF would require, there is no foreign star. Is that a good thing or a bad thing?’ He says it can be argued the lack of marquee talent materially hampers the ability to market the program internationally, ‘and the other programs have never required that [but] CTF decided it is important.’

If Cancon purists think the system is being corrupted by international coproduction, Gelbart says, ‘The truth is that the system is now geared to driving people out of business.’

Gelbart says the Cancon funding system has become so complex with weighty fiscal and certification requirements, more ambitious producers are obliged to invest in expensive professional services. In many instances, he says the not-for-export Canadian shows are limited to low budgets. ‘And companies that can do both [Cancon and export programs] will either go out of business or stop doing Cancon altogether because they won’t be able to sell it.’

Film and TV producers have complained funding rules exclude Canadians from appropriating the world’s cultural heritage, making it impossible, for example, to adapt a play by Shakespeare or Moliere.

One financing specialist recently suggested one way to deal with the tension between competing production interests – to export or stay home – would be to use a portion of public funds to create a mixed, public-private, gap-financing entity to support more commercial projects, which would in turn feed back revenues to strictly Canadian projects.

Heritage is inviting written submissions, due May 31. The deadline for comments on submissions is July 31. To consult the Heritage discussion paper, Canadian Content in the 21st Century, go to: www.canadianheritage.gc.ca.