Despite federal budget cutbacks of 4% for cbc and 5% for Telefilm Canada and the National Film Board for 1995/96, and news of a review of cultural spending, a top government agency source says the Liberals are simply waiting for the aftermath of the Quebec referendum before driving forward with much heavier slashes.

Finance Minister Paul Martin’s Feb. 27 budget also introduced a refundable investment tax credit, approximately equal in net value to the Capital Cost Allowance, which will be phased out by the end of 1995.

The budget announced cuts of $676 million, or 23.3%, in Heritage Canada’s allocation over the next three years, noting Telefilm, the cbc and the nfb account for about 70% of the cultural budget.

Heritage’s budget drops from $2.9 billion in 1994/95 to $2.2 billion in 1997/98.

In his budget address, Martin said: ‘If government doesn’t need to run something, it shouldn’t, and in future it won’t.’

And while the budget indicated cuts of 5% at both Telefilm and the nfb in 1996/97 and 1997/98, the agency source says the hidden federal agenda intends to apply cumulative cuts of over 20% to the three federally funded institutions – 8% for Telefilm and the nfb in the final two years, and about 35% to the cbc.

The 5% cut in the Telefilm budget, added to cutbacks announced in earlier budgets, brings its total reduction for 1995/96 to $12.6 million. The appropriation for the fiscal year starting April 1 is $109.7 million. If indeed Telefilm’s budget is subject to cumulative cuts of 8% in years two and three, its 1997/98 appropriation drops to $92 million, or $30 million less than the current year.

Telefilm says a detailed 1995/96 budget will be published in its Action Plan in April.

Not a secret

The long-term plans for cuts to cbc did not remain a secret for long, with president Tony Manera resigning after he received a government document which he then passed on to management. The document, marked secret, details the cbc cuts over the next three years as $44 million in fiscal 1995/96, $53 million in 1996/97 and $66 million in 1997/98, for a total reduction of $163 million. Added to the $180 million cut announced earlier, the total cuts over the three-year period come to more than $340 million.

cbc may be in deep water, but the production industry is more optimistic about Telefilm.

Says Dan Johnson, head of the Canadian Association of Film Distributors and Exporters: ‘My personal feeling is that Telefilm should come out very well in the mandate review because its money gets multiplied.’

cafde lobby plans are primarily aimed at gaining support for Telefilm’s Distribution and Feature Film Funds. ‘We have to make sure that we penetrate the brains of the people who make the policies to make sure they recognize feature films are seen by large numbers of the public and the Distribution Fund itself performs. If we fail in that, it could be the end of the Canadian feature film industry.’

Atlantis Communications ceo Michael MacMillan says about 5% or 6% of Atlantis’ production budget in 1994 was funded by Telefilm, and while MacMillan says the cuts and the proposed mandate review put Telefilm in a state of limbo, it does not immediately create any uncertainty for his business.

‘I think these cuts to Telefilm were well anticipated and Telefilm has been quite effective at earning revenues for public investments in the past couple of years. So I suspect Telefilm has its act together,’ says MacMillan.

John Taylor, director of Western operations with Telefilm in Vancouver, says details of the budget came as a real surprise. ‘We weren’t aware of the multi-year cuts as the plan suggests. And the whole notion of amalgamation with the nfb and all that it entails was not anticipated. It shakes the security of our operations, not only in how much money we will have for what we need to do, but also in not knowing if there is a future for the organization in the way that we know it.’

Smoke and mirrors

Regarding the cbc and agency cuts, Ian Morrison, president of Friends of Canadian Broadcasting, says, ‘I think there is a danger of fraud taking place, and the fraud is the budget called for modest decreases to the three agencies (in year one), but the envelope for Heritage shows a 23% decrease over three years. There’s a smoke and mirrors exercise going on. At least someone in the Finance Department is adept or skillful at manipulating the public.’

Morrison plans to lobby heavily in favor of saving the cbc, and he wants to see more industry support onside. ‘I fear some people are so preoccupied with their own enterprises they have not been speaking up for the cbc and it’s time for them to come out,’ he says.

With the confusion over long- and short-term cuts, specifically to cbc, MacMillan says the message from the government in the budget is not altogether clear. ‘I think it’s generally a mixed message. We did expect cutsÉbut it’s unclear to me how seriously the cbc was cut.’

As for the impact on Western operations, Taylor says he’s most concerned over the fate of ‘regional production,’ that which happens outside of Toronto and Montreal.

‘We have a situation where quite apart from the immediate budget cuts, the cable fund doesn’t seem to be in sync with the low licence fees that we use at Telefilm to encourage more production opportunities in the regions. Then added to that concern is a shrinking allocation for Telefilm because of the budget cuts, so between those two things, we’re more than usually concerned about the future of regional production,’ says Taylor.

Western companies, he says, are still relatively young in their development. ‘They need incentives like we have tried to create at Telefilm in order to capitalize companies in the West. That job has not been done yet, and this budget won’t help matters.’

Commenting on the agency cuts from a documentary filmmaker’s perspective, Canadian Independent Film Caucus vice-chair Barry Greenwald says: ‘Many of us are very concerned because we feel that each of the players – broadcasters, funding agencies, and cultural agencies – all have unique mandates. We would be concerned if there are possible changes where people wouldn’t realize the importance of this uniqueness.

‘I still think the film board has a unique role where cultural, artistic and socially engaged filmmaking takes precedence over more commercial and industrial forms,’ he adds.

John Kennedy, regional director of CBC British Columbia, says he too was both surprised and upset by the budget.

‘I didn’t expect the cuts to be as large as they were,’ says Kennedy, who is scheduled to retire from cbc March 31. ‘But now my reaction is that we had better settle down and figure out ways to deal with them.’

Reacting to rumors of impending drastic cuts to regional operations, Kennedy says, ‘That certainly would be on my list, but I think cbc is rooted in the regions. I think it’s very important that b.c. voices get heard on the cbc, and one of the main ways of doing that is by having regional news operations.’

The impact on regional production, he says, will depend on the new mandate. ‘The problem is with that many fewer dollars cbc can’t possibly produce the kind and volume of programs in the way it does today.’

Tug of war

According to the cafde’s Johnson, there could be a tug-of-war between those who support Telefilm’s Broadcast Fund and those who utilize the Feature Film and Distribution Funds.

‘Free broadcasters (excluding cbc) haven’t historically shown an appetite for Canadian film, and they might be quite happy to seek access directly to the Broadcast Fund and see as much money put there as possible. If there isn’t a film industry, what do they care?’ he asks.

New revenues needed

Telefilm’s interim executive director, Peter Katadotis, says priority will be given to the agency’s three principal funds, and that new revenues are expected to reduce the impact of cuts, at least for the year ahead. Revenues have been on the rise and were pegged at $20 million in 1994/95.

Administratively, Katadotis says the agency is adopting ‘voluntary work reduction measures’ by renegotiating office leases, freezing vacant positions and abolishing jobs.