It’s said that nature abhors a vacuum. Well, so does Canadian media.

So, when Heritage Minister James Moore announced the $310-million Canada Media Fund, but omitted the requisite finer details, many in Canada’s media industries reacted exactly as anyone would expect them to – with something in that narrow band stretching between mild surprise and homicidal rage.

Although many stakeholders weighed in during the Department of Canadian Heritage review of the funding system 18 months ago, the department had been quiet since, and there had been little indication as to the next step until it arrived in the form of Minister Moore’s announcement of the transformation of the Canadian Television Fund and the Canada New Media Fund on the set of Flashpoint.

In previous years, under other administrations, such major policy announcements would have only followed extensive industry consultation about the structure of the new system. At the very least, the ministry itself would have been working feverishly behind the scenes to soften up the ground ahead of the minister’s announcement. This time, not so much. But that decision is not something that can be laid at the feet of the minister’s staff.

It’s only recently, several weeks after the announcement, that details of the new CMF have begun to percolate to the surface, mostly thanks to technical briefings Heritage has begun conducting (as ‘a courtesy,’ or so they term it) with some of the major players in the industry, like the unions and guilds.

Now, at least, a few questions have been addressed.

For example, it does now appear that there will be a working group comprised of industry representatives consulting the CMF board, which will work in a manner similar to the one that advises Telefilm Canada. And most agree that if this is so, and it functions as well as it does for Telefilm, many fears about board independence will be laid to rest.

And, while the industry is concerned about the possibility of a potential conflict of interest for board members nominated by cable and satellite operators, those who Playback spoke to point out that the issue of conflict of interest in the board is hardly new; has already been addressed in a previous Auditor General’s report; and, most importantly, that they have heard from Heritage that an even more robust litmus test for independence is in the works. Details to come.

When it comes to in-house production, it should be noted that federal tax credits remain in place for independent producers alone, and can’t be accessed by broadcasters. That’s not supposed to change. (Although it’s anyone’s guess as to when broadcasters might begin lobbying for changes to federal tax codes.) With that funding missing from the production puzzle, and in the face of recent closures, layoffs and cutbacks, it’s hard to imagine broadcasters ramping up to handle serious in-house production, at least in the immediate future.

But important questions remain – one critical topic being the funding of documentaries. While Moore’s announcement suggests money will continue for projects which ‘can pass a test demonstrating that the market alone would not support its creation,’ what this test is has yet to be announced – let alone the criteria by which the ministry defines the word ‘documentary.’

Some suggest this move is the government’s way of divesting itself of such genres as lifestyle programming, which is inexpensive to produce and sells well internationally. If that’s the case, the ministry’s decision to cut funds is reminiscent of the U.K.’s move to kill its Sale and Leaseback scheme – a funding approach that had been intended to help one-off productions, but which had creaked to a halt under the weight of long-running soaps and factual series. If so, lifestyle producers and the like might be surprised to find little sympathy from their companions in the Canadian industry. It’s a small pie, as many point out, and new money isn’t coming.

And there are other concerns, from the regulations guiding the board to the minister’s decision to only offer funding to productions that operate on more than one content platform.

As many point out, the devil really is in the details, and those will only begin to be worked out once the board is named, and the expected consultation process gets going. There is a lot of ground to cover, but most expect everything to be locked down by year’s end.

Given the climate, it’s hardly surprising that many producers – especially those in the independent community – see a hidden hand at work. The economy has hit them as hard as it has hit the broadcasters, and cash flow is becoming an issue as commissions have dropped off. (Not to mention the fact that there are fewer doors to knock on in the first place, thanks to market consolidation.)

Then they see several conventional broadcasters use the CRTC hearings as an opportunity to ask for serious reductions in the amount of independent programming required as a condition of their licence. And then there is this CMF announcement.

Questions outweigh answers at this point and, as noted, that creates a knowledge vacuum in the industry, and a vacuum gets filled one way or another. It’s the minister’s choice as to how.

One fact that absolutely needs to be pointed out, however, is that there is across-the-board appreciation that funding was renewed at all – hardly a given in this economic climate. At the end of the day, maybe that’s the best starting point for continued dialogue.

But for now, with the industry slightly better informed than it was, Playback decided it was a good time to find out what’s been resolved, what remains a concern and (hopefully) get a sense as to what might be coming next.

With files from Cheryl Binning and Patricia Bailey

Stephen Waddell
National executive director, ACTRA

After the technical briefing, most of the concerns have fallen away, but the issue with respect to governance continues to be a concern. It is straying far from what we had hoped – that creators should have a role on the board.

We’ve been told that [board appointees] are going to be fully independent and not associated with the BDUs. That’s good to hear, but are they going to be knowledgeable in the industry? We’ll wait and see, but we’re certainly concerned that these people might have some affiliation or affinity to the cable and satellite companies. We’re told they will not have any influence over individual program decisions – that this deals mainly with governance and how the fund operates on a macro level rather than a micro level. All of which is sounding positive, but we will wait and see.

The other concern is the proposed formal consultative process with stakeholders. They are going to implement this new board structure this coming June, and yet we have not heard what form this consultative process is going to take. We’d like to see the other shoe drop and have the fund tell us – one hopes before the board is appointed in June at Banff – what kind of consultative process is going to be in place.

Sandra Cunningham
Chair, CFTPA

It would be a shame to not recognize that there are different models of governance and there is not just one kind of board to work with. It’s important that the funds have been renewed and that the profits of the BDU players are increasing so that funds will be healthy for the next couple of years.

I think rebranding a fund from the television model to a media model is forward-looking. These are all the good things.

On the other hand, allowing in-house productions seems to have come in without an awful lot of study into what the beneficial impact will be. I think the thinking is that it won’t really be used very much – but then why are we opening it up?

The question of documentary also really needs a fulsome consideration because I don’t think it is clear what is meant by the language in the announcement.

On multi-platform conditions:
We hear a lot these days about the conventional television model being broken. Well, the independent production financing model is broken when broadcasters try to acquire all of the rights for the same dollar – rights that used to be able to be packaged out and sold separately to be able to create revenue streams and financing streams. So, is this an opportunity to put terms of trade squarely in the center of the new fund? Perhaps. But we are mindful about what we need to look for.

Brian Anthony
National executive director & CEO, DGC

The department and the CTF tell us they are working to ensure the seven board members will be truly independent and free of any conflict of interest. But, of course, the proof remains in the pudding… That is going to be the first test, because the credibility of this organization and the whole exercise rests very heavily on the nature and structure of the board.

I know five of the seven will be nominated by the stakeholders, and this may sound like a nicety, but is that automatic? Is it the department, when it receives the nomination, that does the appointing? It’s not just a semantic difference. If they are appointed by the department, are they considered public office holders and therefore subject to the same degree of scrutiny? That is a point I have to clarify, and maybe they don’t have the answer just yet.

I think everyone is feeling their way into this. But certainly it would be reassuring if, for example, board members were held to the public office-holder test.

I am hopeful that in that process we will be able to address some of the other concerns we have – for example, the eligibility of in-house production. I’m told the department has no intention of changing federal tax credits to make in-house production eligible for tax credit purposes. So, that would be a limiting factor. But we want to know more, and we want to be much more involved in shaping the ultimate decision.

Maureen Parker
Executive Director, WGC

On the requirements for two content platforms:
That raises concerns. Right now, we are struggling in this country to maintain our drama budgets at a certain level, which is still far, far below U.S. production budget levels, and it shows up on screen. So if you want to attract an audience, you want to keep Canadians watching Canadian content – drama in particular – you have to keep your budgets up. If everything is coming out of the same pot, that means fewer episodes, and that’s a concern…

We know the importance of new media production. We are among the many who had a very clear voice, saying we need regulation of new media, that we need Canadian content online, and we need an ISP levy. Our position is very clear that this is an important area, especially for writers, because they are leading the way.

On defining the fund:
We want to be part of that working group, and if so we’d be very focused on how these envelopes are actually determined – what are the key criteria? I think one thing that we would like to see, first of all, is that it is Canadian content: 10 out of 10 points. We can go with market success, but market success when there is a possibility of success. I think the fund has to also focus on things that may not draw the highest audience, but are of interest to Canadians.

Danijel Margetic
Chair, national advocacy and policy committee, Documentary Organization Of Canada

There are three main items. One is obviously what the rules are going to be for documentaries to access the fund. What is the priority given to documentary?

The second is governance and accountability. Our position has been that these are essentially public moneys and they should be treated as such, rather than being given to one single group within the broadcast sector. There should be representation on that board reflecting the depth and the variety of the broadcast sector.

The third would be the door opening for in-house productions. We find this particularly problematic as the broadcasters are asking for a reduction in Cancon – and more specifically, they are asking for the removal of priority programming requirements, and removal of requirements for commissioning independent production – at the over-the-air licence renewal proceedings. If those allowances are given to them, there is real potential for independent producers to eventually be effectively shut out of the fund.

John Christou
National co-chair, Documentary Organization Of Canada

In the short term, [broadcasters] can’t ramp up production very quickly. Over the long term, they certainly can, especially through consolidation. But I think the bigger danger is that rather than licensing content from independent producers they will start hiring companies essentially on employee contracts.

Laszlo Barna
President, E1 Television

We recognize that the creative power of this industry rests on the shoulders of the creators: the writers, the directors and the independent producers who enable that programming to happen. If it were to mean their right to own and control the programming would be eroded, that would genuinely be a bad thing. We would end up with a studio system, and that’s not the path that was contemplated for the independent community in this country on a policy level.

On the audience:
The premise that we have to do something to give Canadians the programming they want is a little bit false because we have been giving Canadians what they wanted. Sometimes the rhetoric is out of sync with the reality. It’s much easier to tell the story of Canadians as losers. Well, we’re not losers.

On the makeup of the board:
I remember the days when people slept in sleeping bags snaking around the building, in the good old days of first-come, first-served. And it was precisely because of that we had a user board perfectly balanced between BDUs, conventionals, the CBC and independents that we were able to hone the system so that it wasn’t a disastrous administrative process.

My concern is that the users are now sitting on the sidelines. I hope the consultative committee is strong and listened to, because what experience has taught us is that when the users are not in the room, you come up with unmanageable rules. I would like the new board to have some real relationships with the consultative committee to make sure that we don’t have an administrative nightmare again.

Michael Donovan
Chairman & CEO, DHX Media (Halifax)

Canada, through very progressive policies built over the last 20 years, has a viable independent sector – Canada has kicked way above its weight. The CRTC and the CTF have acted as policemen in the system, ensuring that the creators have a voice at the table, ensuring that, for example, production takes place using a diversity of voices across the country, in Halifax and Vancouver. This has strengthened Canada and made it a leader in content. And content is the future. Is Canada now going backwards? That’s what it seems to me.

John Hopkins
Producer/director, Square Deal Productions Atlantic (PEI)

Canada’s cultural capital – as our documentaries richly realize – is among the finest in the world, winning international acclaim on a regular basis. As a result, Canada has been able to successfully market its documentaries to global broadcast markets, and recently to a growing audience for theatrical docs.

It has been a terrific public-private partnership and a tremendous Canadian success story. But now documentary production in this country is under the darkest cloud to ever roll over it… There is increasingly little incentive for broadcasters to commission independent works, when they can produce themselves in-house and keep all copyright and revenues.

John Ritchie
Executive producer/partner, Force Four Entertainment (Vancouver)

Change can be a good thing, but I think the reasons so many questions are being asked – and what Canadian taxpayers deserve to know – is why are these changes being made? What special interests are benefiting? Is this simply a reward for those who yell the loudest?

Why ignore the parts of the business model that are working – particularly around new media? Why are documentaries, a proud part of our storytelling tradition, no longer a priority for our government? And why would content creators – meaning networks and producers – not have fair representation along with the cable companies on the board of a fund that supports content creation?

These are the questions I hope will be discussed and addressed very soon, and I’m hopeful there will be adjustments that will address these concerns.

Shawn Williamson
Producer/principal, Brightlight Pictures (Vancouver)

A lot of the changes are about streamlining operating bodies that allocate funds to make it a more efficient fund to manage, decrease operating costs, and increase the money going into content which will build the industry. As a taxpayer, I think this is brilliant, and as a producer, I think it is an exciting change. We are cautiously optimistic about the role producers and broadcasters will play.

There is the potential that broadcasters may look to produce, which may be a concern to us depending on how it plays out. I am notionally not bothered by the fact that the board is nominated mostly by the cable companies. We have to see how the fund is administered. Just because there are no producer reps doesn’t mean the fund is necessarily going to be mismanaged. I am hopeful that equity and fairness will be maintained and, if not, producers can become very vocal if need be.

David Paperny
President, Paperny Films (Vancouver)

I am excited about the new media component. Perhaps the new fund will force producers, broadcasters and cable and phone companies to come together with a unified approach on how to move forward in the multi-platform world. There is a disconnect right now between what producers want to do and access and what broadcasters want to control and move forward as the new media component of programming. Independent producers should retain copyright of the new media properties or partner in a fair and equitable way.

On documentaries being treated separately:
I am suspicious of a fund that decides there are certain genres in particular that it will support at the cost of another, and I am suspicious of subjective tests. I am also suspicious of how many dramas this country can produce at any given time. I want [the new fund] to support a diversity of genres.
It is shortsighted for an agency to determine what producers should be making, what broadcasters should be supporting, and what Canadians should be watching.

Brian Hamilton
Vice-president/executive producer, Omni Film Productions (Vancouver)

The fact that the fund is renewed is wonderful and we agree with many points. However, we have some concerns, including the independence of the board members. The existing board has quite detailed conflict-of-interest provisions, and we expect the new board members will be appointed with a very high standard of independence and will avoid not only real, but perceived, conflict of interest. And board members should be knowledgeable and qualified to make key decisions about this industry. It shouldn’t be a patronage appointment.

If the board consults broadly with the industry and takes their public duty seriously, then it shouldn’t be a problem. And certainly the current board structure, with more than 20 members, had its own disadvantages.

Patricio Henriquez
Producer/ principal, Macumba International (Montreal)

It’s obvious that the government is very close to the cable providers. I believe that these changes could lead to the death of documentary film. Documentary films challenge society. They don’t want a dissident voice.

Judy Holm
Co-president, Markham Street Films (Toronto)

I am concerned that the opening up of the fund to in-house production for the broadcasters will result in far fewer opportunities for independent producers to generate their own unique films and to hold on to some of the rights. Any business models we have been able to create over the last couple of years will be out the window.