CRTC licence renewals threaten Canadian programs, say critics

Saving Hope, Rookie Blue and Orphan Black are just three recent Canadian TV hits — but film and TV creators are worried we'll see fewer shows like these amid new broadcast licencing renewals approved by the CTRC this week.

At issue is funding for "programs of national interest" (PNI), part of the Canadian programming broadcasters are required to fund.

The PNI designation covers drama, scripted series, documentaries and awards shows honouring Canadian culture — areas that have traditionally been difficult to finance, but which the Canadian Radio-television and Telecommunications Commission had deemed worthy of specific support.

On Monday, as part of the five-year licence renewals of broadcasters Bell, Corus and Rogers, the CRTC set the trio's minimum PNI expenditure requirement at five per cent of revenue. Currently the broadcasters spend from nine to 10 per cent on PNI.

Unions representing Canadian actors, screenwriters, directors and producers have blasted the decision as a devastating roll back that will lead to dramatically reduced investment in Canadian production.

"The CRTC got it right when they said that, in the digital world, broadcasters need to invest in innovative content that stands out in a global marketplace. So why let broadcasters slash their investments in distinctive, original content by $200 million over five years?" Directors Guild of Canada national president Tim Southam said in a statement.

That $200 million figure comes from an independent analysis of the broadcasters' annual reports, their licence renewal applications and how they've met their PNI and other Canadian programming obligations.

It was commissioned by the DGC, the Alliance of Canadian Cinema, Television and Radio Artists (ACTRA), the Writers Guild of Canada (WGC) and the Canadian Media Producers Association (CMPA).

Broadcasters can spend more — but will they?

According to Canadian media policy consultant Kelly Lynne Ashton, there's been a boon in homegrown programs in part because, in recent years, major broadcasters purchased other large services with high Canadian content requirements. Bell bought CTV and Astral Media, for instance, while Corus purchased Shaw Media.

Both the purchased and the parent entities had requirements "to spend money on Canadian programming generally, so there was a benefit to the system for the transaction," she told CBC News on Wednesday.

The broadcasters were ultimately spending between nine and 10 per cent on PNI, according to the independent analysis commissioned by the unions, which had appealed for a continuation of that amount.

In their licence renewal applications, Bell and Corus argued for setting the figure at five per cent to have uniformity across broadcasters. With Monday's decision, the CRTC agreed.

There will be a shortfall in funds for PNI going forward, Ashton predicted.

"[The five per cent figure] was set as a floor, so it doesn't mean broadcasters can't spend more. But will they? Based on past experience, sometimes some of them go over, but generally not."

In recent years, private broadcasters have cited the rise of Netflix and other over-the-top (OTT) platforms — which are not regulated in the same manner and currently exempt from Canadian content requirements — as a major threat to their businesses.

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"The argument is always [that broadcasters] need a lower expenditure requirement to be more competitive with Netflix, Amazon and anyone else comes through," Ashton said.

However, "the problem with that argument is these expenditure requirement are based on a percentage of [broadcasters'] revenue. So if their revenue goes down, the requirement goes down, too."

Fewer or lower-budget shows to come?

Lowering the PNI expenditure requirement likely means Canadian audiences will have less high-quality Canadian programming to watch, she said.

"It may mean fewer shows or lower-budget shows or broadcasters saying 'This is as much as we've got, you'll have to find money somewhere else.'" That could mean more U.S. or international co-productions, which inevitably reduce the Canadian involvement.

This isn't just a simple administrative change. This is a devastating decision for Canadian production and it will have an impact. Audiences will feel it.- Maureen Parker, Writers Guild of Canada

For instance, if broadcasters choose co-productions as a way of spending less money to make a high-profile TV drama, they're likely to favour projects where Canada is only a minority partner — contributing just post-production, one or two actors and maybe a director for some episodes, Ashton noted.

"We've gone through periods of time where there've been a lot of minority co-productions. What happens in those times is it benefits a couple of producers and it benefits the post-production sector," she said.

"That's allowed us to grow a pretty good post-production sector, but… writers, directors, actors, crews — they don't benefit."

Exploring appeal options

However, the creative community isn't standing down: it's reaching out to the federal government and the department of Canadian heritage about the decision — and also looking forward to new leadership at the CRTC, said WGC executive director Maureen Parker.  

Current chair Jean-Pierre Blais ends his term on June 17.

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"There are appeal mechanisms and we're considering all of our options at this time," Parker said. 

"This isn't just a simple administrative change. This is a devastating decision for Canadian production and it will have an impact. Audiences will feel it."