M. Jean Guérette
Director General
Broadcasting Policy and Innovation
Department of Canadian Heritage
OTTAWA, On.


September 15, 2000

Re: Future Directions of the Canadian Television Fund (CTF)

Dear M. Guérette,

The Canadian Television Fund and Telefilm Canada have been essential to the health and growth of the Canadian film and television industry. The Department of Canadian Heritage's support of these funding agencies has been invaluable. There is no question that our industry has flourished in recent years with both large and small producers benefiting from the financing these agencies have provided.

The Department's decision to review the structure and administration of these two key funding agencies is a timely one, and the KPMG Report clearly highlights the issues and presents some interesting alternatives. There has been growing confusion in the industry resulting in a lack of confidence. The "2 masters" approach is not viable; a hybrid CTF has created extremely complex and bewildering eligibility criteria revised on an annual basis in order to meet the different priorities of the 2 masters and their funding sources.

The operating procedures, timelines and decision-making approaches of both the CTF and Telefilm, have a very significant impact on the operations of Canada's private funds. We are "at their mercy" to some extent and have to scramble to adapt to new deadlines and eligibility criteria which become imposed on us. Therefore, I would like to present a proposal from the point of view of the "private funds" in Canada who have striven to work in partnership with these agencies over the past 10 years.

When the CTF was originally created as the Cable Fund and supported only by Canada's cable companies, it was the largest of the nearly 20 private funds in Canada. The private funds operate under guidelines recently established by the CRTC for "certified independent production funds". These guidelines ensure arm's-length decision-making and support of culturally significant Canadian productions. I would like to recommend that the CTF return to its roots as a private fund. Therefore, Telefilm should become the public sector agency supporting television, film and new media reporting to the Department of Heritage.

As a private fund, the CTF's Board, which would consist of members of the industry with no vested interests, would determine the administration, operating structure, eligibility criteria and governance of the fund, within the guidelines clearly established by the CRTC for private funds (CRTC 1999-29). Its operating budget is estimated at $70 M annually which ensures its presence as a key funding force in the industry. Many of the policy objectives of the government which have been injected into the operations of both the CTF and Telefilm, would become the exclusive responsibility of Telefilm. This would allow the new private CTF's Board to determine the relative importance to the film and television business of issues such as "Canadian content", regional, language and aboriginal priorities, support of SMEs, etc. Judging by the sensitive handling of these issues by the other private funds, I am confident that a private CTF will manage these issues diligently. It is recommended that the CTF establish an official presence in offices outside of Toronto in order to be responsive to its clients.

The private funds benefit from many of the services Telefilm provides, such as detailed budget analyses, reviews of audits and some legal and accounting procedures. This has always enabled them to keep administrative costs at a minimum, but even more importantly, it has ensured that there is consistency between the various funding partners on these critical issues and minimizes the conflicting demands on producers from multiple funding partners. A new private CTF would be part of this informal network which enables each of the private funds to maintain their own individual mandates and procedures while working together for the overall benefit of the industry.

The models presented by the other private funds in Canada - which have strong industry support - and which operate extremely efficiently and effectively, indicate that private funds have an invaluable role to play in the Canadian film, television and new media funding scene.

Under this scenario, Telefilm would continue its mandate to support television, film and new media, through equity, loans, grants, licence fee top-ups, interim financing - whatever is deemed appropriate for the circumstances.

One additional point: The KPMG report recommended that new media funding be separated from television funding. Given the convergence of these 2 media in particular, it is absolutely essential that the funding of these two merging media remain under one roof. New media is intimately linked to television and film and it would be a disservice to the new media industry to separate them at this stage of development. The Independent Production Fund's practical experience as the administrators of the Bell Broadcast and New Media Fund confirms the importance of this convergence.

There are many administrative and structural procedures to be designed in this proposed model. However, most of the problems which were pointed out in the reports on the CTF and Telefilm would be resolved by this approach - a private, independent Cable Fund, and the enthusiastic government support of a strong Telefilm.

Yours sincerely,


Andra Sheffer
Executive Director
Independent Production Fund