CHPC Committee Report
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CHAPTER 5: RECOMMENDATIONS FOR A NEW FILM POLICY AND ITS IMPLEMENTATION
After a considered review of witness testimony, respondent submissions and approaches to film policy in other countries, the Committee feels well equipped to make the following observations and conclusions concerning the present and future state of the Canadian feature film industry:
| • | The Canadian Feature Film Policy should henceforth recognize the difference between Canada’s English and French-language film markets, including different targets for these two markets. |
| • | Existing levels of support available through the Canada Feature Film Fund are generally adequate but need to be awarded and allocated differently. |
| • | A national strategy to market, promote, distribute and create screen space for Canadian films is required in order to sustain and help grow the successes witnessed in the French-language market and to build audiences in the English-language market. |
| • | The distribution and exhibition of Canadian film requires far greater attention and support. |
| • | Existing Canadian content definitions for feature film production should be modified to more closely resemble the criteria used for Canada’s book publishing and sound recording industries. |
| • | The feature film policy should recognize long-form documentaries. |
| • | Telefilm Canada’s excessively bureaucratic working methods and practices need to be modernized and simplified. |
| • | The overall governance and accountability framework for federal government organizations involved in film-related functions requires a clarification of roles, mandates and responsibilities. |
| • | The Department of Canadian Heritage needs to take a more active role in the implementation and oversight of the film policy. |
| • | Film industry stakeholders must work together to develop a coherent strategy to measure and track audiences for Canadian film both in the theatre and in other contexts. |
| • | Canadian broadcasters and the CRTC need to work together to develop incentives to increase awareness of Canadian feature-length films. |
| • | A digital film strategy, similar to the Digital Film Initiative in the United Kingdom, needs to be developed by government. |
The Committee is convinced that many of the serious deficiencies it has found in the overall functioning of Canadian feature film industry would, over time, be remedied if the conclusions made above were acted upon and implemented. With this in mind, the remainder of this report provides a series of recommendations that flow from these observations and conclusions. Part A, outlines the Committee’s vision for a new film policy; Part B addresses governance and accountability issues that require considered attention; Part C discusses necessary steps and measures required for the successful implementation of the new film policy proposed here. In closing, Part D makes recommendations on other matters raised by witnesses and respondents through the course of this study.
A. CORE ELEMENTS OF A NEW FEATURE FILM POLICY
The 2000 film policy, From Script to Screen, had as its four main objectives: to develop and retain talented creators; to foster the quality and diversity of Canadian films; to build larger audiences at home and abroad; and, to preserve and disseminate our collection of Canadian feature films for today and tomorrow.
This policy represented a significant improvement over previous federal policies designed to support Canadian film. First, it recognized that the goal of reaching audiences had to be incorporated into the film policy. Second, it set clear targets (5% of audiences) that could be measured.
As a general conclusion, one could say that elements of three of the four objectives have been partially met. Audiences are up significantly in the French-language market; Canadian creators have worked on a large number of films over the past five years; the number and quality of Canadian films has improved, particularly in the French-language market; and some work has been accomplished in the area of preservation and dissemination. There is no evidence, however, that allows one to talk with any confidence about the ill-defined notion of “quality and diversity.”
Notwithstanding certain successes, there are a number of serious problems that need to be addressed. Some of these problems have to do with issues within the policy, while others have to do with the absence of mechanisms to sustain the policy. A major gap in the policy, for example, is the near complete absence of support for dissemination and exhibition. As shown in Chapter 4, Canada is one of the few countries that pays virtually no attention to exhibition. In part, this is because exhibition falls under provincial jurisdiction. In part, it is because stakeholders have not been willing to develop methods to address this challenge.
While exhibition is important, there are at least three overarching policy matters that require urgent attention. These are:
| • | The differences between Canada’s two linguistic markets; |
| • | The need to measure and report on non-theatrical viewing of Canadian films; and |
| • | Existing criteria used to define and certify Canadian content; |
Recommendations on these three issues are discussed and presented below.
From Script to Screen established national objectives for the country, including a box-office target of 5% for audiences of Canadian film. As observed in Chapter 2, the viewing of Canadian films in theatrical release increased from 2.3% in 2000 to 4.6% in 2004. Most of this growth, however, was due to a rise in the viewing of Canadian films in the French market. Indeed, audiences in the English-language market during this same period were virtually stagnant.
Witnesses cited a number of reasons to explain this phenomenon. The most common had to do with the intense competition for film audiences posed by Hollywood big budget blockbusters, with their star-studded casts. While this explanation must be given its due, it is worth reminding ourselves that Australia, the United Kingdom, France and Germany, facing similar pressures, have all managed in recent years to attract a larger domestic audience for their films than have Canadian films in Canada’s English-language market.
With this in mind, the Committee views it as essential that a new film policy recognize that there are two language markets in Canada and that different dynamics are at play in these two markets. Indeed, as noted above, Hollywood blockbusters do not dominate the French-language market as they do in the English-language market. Second, the French-language market is smaller and more compact, thus easing certain marketing challenges. Third, the language itself acts as a natural barrier to films in other languages. Finally, unlike English Canada, the French-language market has a well-developed star-system, which makes it easier to attract private investors.
Acknowledging these differences in no way means that Canada should have two film policies, with different objectives; what it does require, however, is the establishment of market specific box-office targets for English and French Canada. This could be achieved without reducing or adjusting support for either market. Therefore:
RECOMMENDATION 1
The Committee recommends that a revised feature film policy and related support programs and measures recognize that Canada’s English and French-language film markets are different.
Furthermore:
RECOMMENDATION 2
The Committee recommends that the feature film policy set realistic and incremental box-office targets for the viewing of films in the English-language and French-language markets.
Such targets should be developed by the Department of Canadian Heritage in consultation with industry stakeholders and should recognize the different circumstances of the two markets.
From Script to Screen focused on the cinema audience for Canadian feature films. While the recognition of the importance of theatrical audiences should always remain a first priority, the Committee believes that far more attention also needs to be paid to the many other ways in which people see Canadian films. Since much of this viewing is at home, the Committee is convinced that the policy should recognize the importance of these audiences. For this reason:
RECOMMENDATION 3
The Committee recommends that a revised film policy recognize the importance of measuring audiences for the viewing of Canadian films in the many non-theatrical contexts where films may be watched.
Separate targets would need to be established for different platforms and media. Specific contexts would include but not be limited to: television viewing, DVD rentals and sales, and Internet downloads.
Although it is important to recognize the existence of the two linguistic film markets in Canada, this will not single-handedly deal with the problems facing English-language Canadian films. As noted, there has been virtually no improvement in audiences for English-language Canadian films since the introduction of From Script to Screen. Indeed, as seen in Chapter 2, most of this improvement is explained by an increase in audiences for treaty co-productions made with other countries.
Co-productions are worth discussing in some detail because these types of films provide an interesting vantage point for examining some of the peculiarities of the existing feature film policy.
For almost 40 years Canada has signed treaty co-production agreements with other countries. Treaty co-productions attract money and talent from other countries and have proven a useful mechanism for attracting foreign audiences to Canadian feature films. Under the terms of a co-production agreement, any film that is produced as a result of the agreement is considered “Canadian.” For example, a Canada/France/United Kingdom treaty co-production, with European actors, based on a French script set in England, is considered Canadian for certification purposes.
What makes treaty co-productions interesting is that many of them are included among the success stories of the film policy.135 Paradoxically, however, were a Canadian producer to make the same type of film described above without French and British partners, but with more Canadian labour and talent, it would lose its “Canadian content” certification because the story takes place in England and is based on a novel by a non-Canadian.
If Canadian content rules can be relaxed for a co-production, why is it that they cannot be relaxed for a Canadian production? This is not an attempt to disparage the success of international co-productions; on the contrary, treaty co-productions, as noted in Chapter 3, are an extremely important element of Canada’s feature film industry. What these types of productions do expose, however, is that audiences for English-language Canadian films are even smaller than the data suggest.
One aspect of the problem for English-language films can be seen in the following figure, which shows the total cost and Canadian box-office for a selection of English-language Canadian films that were produced during the period in which the 2000 film policy was in effect.
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Figure 5.1 |
Total budgets and gross box-office receipts for a selection of English-language Canadian films released since the introduction of the 2000 feature film policy |
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Film |
Total Budget |
Gross Box-office |
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Source: Telefilm Canada |
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If we assume that a movie ticket costs approximately $10, this means that fewer than 700 people saw each of the four films marked with an asterisk. While there were some films in the English-language market with box-office receipts of almost or more than $1 million (e.g., Men with Brooms, Mariposa Azul, Bollywood/Hollywood, Mambo Italiano and Being Julia), there are simply too few successes and too many films with results that can only be described as dismal.
How did we get to this point? Over the past 30years, Canada has developed a complex set of rules and procedures to define Canadian content. Under the current system, Canadian films are required to receive a certain number of points to be eligible for particular forms of direct and indirect funding support. But it does not stop here; submissions to Telefilm need to meet additional point-based criteria to qualify for funding.
As seen in Chapter 4, a number of witnesses and respondents were of the view that the point system undermines creativity and artistic freedom. These witnesses argued that the story need not necessarily be Canadian as long as the people behind it are Canadian. The Committee shares this perspective.
No other cultural support program offered by the Canadian government is as complicated or as strict in its definitions of “Canadian.” If a Canadian writes a book and a Canadian-owned publisher publishes it, it is defined as a Canadian book for purposes of support. The book does not have to be set in Canada or even mention Canada.
Similar considerations apply in support for poetry, sound recording, figure skating, theatre companies, and other artists. They also apply for research in medicine, engineering and the social sciences.
In the view of the Committee, increasing the complexity of the point system over the past 30years has done very little to help the quality of English-language Canadian feature films. It certainly has not helped develop an audience for such films.
A solution proposed by witnesses and respondents was the introduction of simpler criteria. A simpler set of criteria could be that two of the following ─ writer, producer, or director ─ have to be Canadians and that a certain proportion of the lead actors involved must be Canadian. This could be coupled with the requirement that a certain percentage of the film has to be shot in Canada and that a certain percentage of the technicians working on the film must be Canadians.
These criteria would make the definition of Canadian content closer to those definitions used for support to book publishing and sound recording. They would also mirror the more relaxed rules for treaty co-productions, albeit with a slightly higher requirement for the involvement of Canadians. With this in mind:
RECOMMENDATION 4
The Committee recommends that the definition of Canadian content for the purposes of feature film be made more flexible, and use criteria that stipulate that two of the following ─ writer, producer, or director ─ have to be Canadians and that a certain proportion of the lead actors involved must be Canadian.
In the view of the Committee, these changes, if adopted, would have little or no impact on the French-language market but would offer more flexibility to filmmakers in the English-language market, thereby creating favourable conditions for the production of English-language Canadian films with the potential to attract larger audiences.
These changes would also recognize the fundamental point that if Canadians make it, it is Canadian. There is little to be gained by attempting to make a film “distinctly Canadian” for policy purposes. The goal of the program should be to help Canadians make films that Canadians and others want to see.
Canadian Content Certification
As for Canadian content certification, witnesses provided a more uniform picture, and a clearer basis for a recommendation. As seen in Chapter 3, positions ranged from claims that duplication and inconsistency were minimal and relatively harmless to claims that it presents onerous burdens. No one provided a convincing justification of the status quo in all its particulars, or an explanation of how differing Canadian content criteria, or approaches to their application, can possibly be beneficial to the achievement of the broad objectives of the Canadian Feature Film Policy. Moreover, nobody who appeared before the Committee suggested that this is an area that benefits from multiple perspectives reflected in differing standards.
The Canadian Film and Television Production Association indicated that four organizations at the federal level — the CRTC, CAVCO, Telefilm Canada and CTF — use four different systems to certify Canadian content. While the systems were seen as “highly compatible,” separate paperwork for each organization imposes needless costs on producers, and creates inconsistencies that make it difficult to track Canadian content production. Reflecting these considerations, the CFTPA recommended that “the Government of Canada establish a single certification authority, to certify that the Canadian content elements of a project have been satisfied for all federal support purposes.”136 Cautious support for a single agency, to carry out certification based on “harmonized” criteria, also came from the National Film Board of Canada.137
Among other witnesses, there was also widespread frustration expressed with the burdens created by the existence of multiple Canadian content certification regimes, administered by multiple organizations and a general consensus on the need for a single organization to assess and certify Canadian content. Indeed, according to the brief prepared by the Nova Scotia Film Development Corporation on behalf of Atlantic Canada Film Partners, “the current division of responsibilities for the Canadian content tax credit between Telefilm, CAVCO, and the Canadian Revenue Agency is onerous and confusing for producers.”138 In view of this:
RECOMMENDATION 5
The Committee recommends that the Government of Canada designate CAVCO as the single certification authority for Canadian content.
Furthermore:
RECOMMENDATION 6
The Committee recommends that CAVCO create a single application process for the certification of Canadian content.
Such an application process would need to recognize the diverse needs of the various agencies and stakeholders from the filmmaking and broadcasting industries.
B. GOVERNANCE AND ACCOUNTABILITY
The connection between governance issues in Canada’s film organizations and the long-term vitality of our cinematographic culture was clearly recognized throughout the Committee’s hearings as well as in submissions received in response to the Interim Report.
There are three broad types of government organizations that are relevant to the film portfolio: departments, independent decision-making bodies such as boards, agencies and commissions, and Crown Corporations.139
Departments are organizations created by statute under the direction of ministers who are responsible to Parliament for their activities. They support the full range of the minister’s policy, legislative, regulatory and operational responsibilities, and the minister is responsible personally to Parliament for these activities, and how they are carried out.
Independent decision-making bodies are established to carry out functions requiring some degree of independence from day-to-day ministerial direction, and generally are established by legislation that delegates certain responsibilities to a board of directors (or equivalent). These bodies are accountable to Parliament through the minister in whose portfolio they have been placed. The minister (and government) is personally accountable for the decision to create and maintain these organizations, but is only answerable (i.e. not personally responsible) for what they do. Finally, where these organizations rely on funding authorized by Parliament, the minister defends their annual estimates in the House of Commons (and, through this role) acquires a measure of influence upon them.140
Crown corporations are wholly owned by the government, but operate at arm’s length from the minister responsible and the government in a commercial environment. They are not subject to the human resource and administrative policies that apply to the regular public service, and thus operate with additional flexibility (and, potentially, lower costs). They are managed by a board of directors that is responsible for the strategic direction of the corporation and its achievement of objectives which are typically spelled out in the legislation that establishes the corporation. Ministerial influence is normally limited to the appointment and renewal of members of the board of directors (and, in some cases, the selection of the board chairperson), and the review (and possible amendment) of the legislation under which the corporation operates. The Minister’s role in recommending the approval of the annual corporate plans and budgets provides an additional basis for influence.
Given the diversity that exists within each category of organization, it is difficult to generalize about why one type might be preferred over another. The following figure, however, suggests possible advantages and disadvantages that frequently apply to organizations in each group.
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Figure 5.2 |
Types of government organizations: advantages and drawbacks141 |
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Organization |
Advantages |
Drawbacks |
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Department |
· directly responsive to elected government · links policy expertise to operations · staffed by non-partisan public servants · direct accountability to Parliament |
· vulnerable to political micro-management · high costs, limited hiring flexibility and speed · lack of innovation · general mandates impede accountability for specific performance |
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Independent body |
· flexible model: organizations can be tailored to specific tasks · especially suitable for regulatory, quasi-judicial or funding roles requiring arm’s length from minister · single purpose can enable clear objectives specialized expertise |
· may be captured by special interests · small budgets may limit management depth · insulated from consequences of poor performance · not directly accountable to Parliament |
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Crown Corporation |
· insulated from political micro-management · lower costs, higher efficiency · specialized expertise · protect public interest in commercial environments |
· may not respond to political priorities · tension between public interest and economic objectives · insulated from consequences of poor performance · accountability limited by commercial confidentiality |
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Film-related functions have been performed by the Government of Canada since at least 1939 when the National Film Board was established. Since the creation of the Department of Heritage in 1993, these have been centralized within the portfolio of the Minister of Canadian Heritage. The current film-related portfolio consists of the following organizations:
| • | Department of Canadian Heritage |
| • | Canada Council for the Arts (Canada Council) |
| • | Canadian Broadcasting Corporation (CBC) |
| • | Canadian Radio-television and Telecommunications Commission (CRTC) |
| • | National Film Board (NFB) |
| • | Telefilm Canada. |
Figure 5.3 provides an overview of the portfolio of government organizations involved in Canadian film, enabling their mandates and current roles to be compared.
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Figure 5.3 |
Federal Government Organizations Involved In Canadian Film 142 |
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Organization143 |
Legislated Objectives |
Current Role Statements |
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· the arts, including the status of the artist, · culture industries including film, video, · broadcasting, except spectrum management and technical aspects, and · the formulation of cultural policy. |
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Canada Council - arm’s length organization |
To foster and promote the arts, including: · working with other arts organizations, · funding study and research in the arts, · providing arts achievement awards, · sponsoring arts exhibitions, performances and publications, · making capital grants to universities and similar institutions, · exchanging knowledge with other countries, organizations or persons, · arranging for representation and interpretation of Canadian arts in other countries. |
Support for research, creation, production and dissemination to artists and organizations in film, video and new media: · including festivals, travel, operating activities, equipment acquisition, · diverse funding programs, as well as awards, residencies. |
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CBC - Crown corporation |
To provide programming with the following characteristics (among others): · predominantly and distinctively Canadian, · reflects regions and their needs, · contributes to cultural expression, · reflects official languages communities, · contribute to a shared national identity, · made available throughout Canada, and · reflects multicultural nature of Canada. |
Commissions, produces and/or broadcasts independent documentary productions, and also co-produces and broadcasts documentary films. Also commissions, produces and/or broadcasts arts and culture, children’s and other films. |
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CRTC - regulatory commission |
To regulate and supervise all aspects of the Canadian broadcasting system, so as: · to accommodate French and English language community differences, · respond to regional needs and concerns, · facilitate the provision of Canadian programming. |
Regulates and supervises Canadian broadcasting and telecommunications in the public interest, so as to reflect: · Canadian creativity and talent; our linguistic duality; our multicultural diversity; the place of Aboriginal people; and our social values. |
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NFB - arm’s length organization |
To produce, distribute and promote the production and distribution of films designed to interpret Canada to Canadians and to other nations, and · deal with commercial filmmakers on behalf of the government, · conduct filmmaking research, · advise cabinet |
Produces and distributes distinctive, culturally diverse, challenging and relevant audiovisual works. · serves as an instrument of social change through point-of-view films. · promotes Canadian values both in and outside Canada, · supports festivals, training of emerging filmmakers, and outreach activities. |
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Telefilm Canada - Crown corporation |
To foster and promote the development of a feature film industry in Canada, by · investing in individual Canadian productions (for a return), · making loans to Canadian feature film producers, · making awards to Canadian feature films, · making grants to filmmakers and technicians working in Canada, and · advise/assist producers regarding-distribution and administrative functions. |
Supports Canadian feature films, TV programs and new media products across the value chain, from professional development to production and marketing. Specific mechanisms : · The Canadian Television Fund · The Canada Feature Film Fund · Canada New Media Fund · Canada Music Fund · Diverse targeted funds/programs |
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One of the fundamental issues that must be dealt with is how the governance and accountability structures of these organizations affect the implementation of the feature film policy. At present, the implementation of the policy is largely delegated to Telefilm, an arm’s-length agency. Four other arm’s-length agencies also play critical roles (The Canada Council for the Arts, the National Film Board, CRTC and the CBC). Since these organizations operate at arm’s length they are largely left to their own devices in their choice of options to implement the policy.144
An additional peculiarity of the current system is that the Department of Canadian Heritage developed and authored the 2000 feature film policy and is the conduit through which the funds are sent to the agencies. That said, despite being responsible for the evaluation of the policy, the Department has virtually no authority to effect the implementation of the policy. Moreover, it has little ongoing responsibility for delivery of the programs or overseeing adjustments to the chosen delivery mechanisms. Indeed, a September 2005 Summative Evaluation of the policy (commissioned by the Department of Canadian Heritage) observed:
Once signed, the Memorandum of Understanding between Canadian Heritage and Telefilm Canada does not give Canadian Heritage much leverage to the department to provide policy direction.145
In short, the governance system for feature film is not working well. In a functional system it would be extremely difficult to have a program with zero incremental impact (as this one seems to have had in the English-language market) after the addition of millions of dollars of supplementary funding. Waiting five years and then expecting the same governance mechanisms to produce an incremental impact in the English-language market is a strategy of dubious value with little prospect for success. The long string of failures in the English-language market should provide ample evidence that there are serious problems with the way the policy was implemented and the implementation overseen.
With these issues in mind, it is evident that there are a number of important changes that need to be made. This being said, it is difficult to see how they can be made within the current governance system. Presumably the Department of Canadian Heritage can address the problems that arise from the current definitions of Canadian content and the rigidities this imposes on the system, particularly in the English-language market. But these changes alone will not solve the problems identified in this report. In particular, the role of the Department of Canadian Heritage needs to be recognized and strengthened. The remainder of this section discusses this matter and outlines the necessary steps that need to be taken to improve the governance and accountability structure of Canada’s feature film industry.
Possible Duplication and Overlap Issues: The Funding Function
Before addressing how to best strengthen the Department’s role, it is necessary to consider whether there are serious problems that flow from having at least five different federal organizations involved in the actual execution or support of the feature film policy.
As noted in Chapter 3, the Committee received a range of opinions on whether duplication or overlap exists among the agencies that fund Canadian films. Witnesses expressed virtually all conceivable positions on this issue.
According to Mr. Jacques Bensimon, Government Film Commissioner and Chairperson of the National Film Board of Canada, there is no significant overlap. Each organization fulfils different objectives: “the CBC is the public broadcaster, the NFB is the public producer and distributor, Telefilm is the cultural banker, and the Canada Council is the arts investor.”146 Overlap that has occurred from time to time was ascribed to the inadequacy of funding, which creates service gaps in some organizations that others fill and, currently, to technological change, which has led several organizations to become involved in new media.
This optimism was not shared by all witnesses, however. Although it did not target any specific organization, the Nova Scotia Film Development Corporation asserted that all existing agencies are not required, and that there is too much duplication of service.147
The value of organizational diversity was, however, a more commonly voiced theme. The Canadian Conference of the Arts (CCA), for example, argued that multiple funding organizations, with different mandates and approaches, are needed in order to provide support that does not pressure films and film-makers towards a homogenous norm. The Canada Council for the Arts was singled out for its successful focus on a “niche” involving support for film and video conceived, controlled and produced solely by the artist/director.148 This has enabled a number of outstanding directors to move back and forth between art films and commercial films. The general theme, that diversity and competition are preferable to a more monolithic organizational structure, was widely voiced. Thus the Canadian Independent Film & Video Fund argued that:
It is important that there are different sources of funding as well as different types of professional development available to producers as the concept of “one-stop shopping” does not work in the cultural/creative sector.149
Diversity among funding organizations was, however, distinguished from needless multiplication of application forms and procedures. In their appearance before the Committee, CCA representatives called for the creation of a single harmonized form that could be used for multiple purposes.150 This would eliminate duplication of effort and excessive time burdens on applicants, without requiring broad organizational change. This recommendation may also respond to a tendency on the part of many of the Committee’s witnesses to view organizational issues from an applicant’s perspective, focusing on the need to “streamline the funding process.”151
More broadly, many of the witnesses who emphasized the advantages of diversity also stressed the need to manage it in such a way as to avoid duplication and waste. In the words of Mr. David Newman: “There should continue to be multiple funding agencies with specific mandates. However, there should be an attempt to harmonize the efforts of the agencies, to decrease overlap and ensure there are no gaps.”152 The two convictions apparent in this statement (that the existing funding organizations complement one another, and all continue to be needed but that there is a general need for the clarification of mandates and the streamlining of programs and services) were repeatedly expressed by witnesses.153
The Canadian Film and Television Production Association (CFTPA) proposed an approach which recognizes that organizations have been added to the film sector universe on an ad hoc basis, and that mandates have evolved seemingly in isolation from one another. The Association argued that roles and responsibilities are not as clear as they could be, although the existing organizations clearly perform distinct functions and therefore all continue to be needed. The Association proposed that a comprehensive review be undertaken, including and examination of the roles, mandates, practices and processes of the key agencies.154 The Association also commended the redistribution of functions between the Canadian Television Fund and Telefilm Canada announced in July 2005, observing that the transfer to Telefilm Canada of responsibility for funds allocated by the CTF to feature films should enhance the consistency of eligibility criteria and strengthen accountability.
Possible Duplication and Overlap Issues: Mandate Creep
In addition to the possibility that core roles of the various organizations duplicate or overlap, the tendency of organizational mandates to expand over time creates an additional potential overlap problem. Organizational mandates may “creep” into the same unoccupied territory, creating an overlap or duplication problem that may not be apparent merely from an examination of the formal legislative objectives or mandates.
As noted above, representatives from the National Film Board argued that the core roles of the government organizations involved in film are complementary, with each occupying a reasonably distinctive “niche.” However, the detailed responses to questions received by the Committee also notes the existence of some areas, including relatively new areas that have not been explicitly incorporated within organizational mandates, where there may be overlap. According to the NFB, the CBC has established an Internet presence in order to “protect its turf and attract younger audiences,” while Telefilm Canada also has become involved in new media. Noting that new technologies can blur traditional organizational boundaries, the NFB argues that it would now be feasible for the NFB to create an NFB specialty television network, or an e-cinema network, drawing on its collection of films. Among the areas listed, where the work of existing agencies needs to be harmonized or integrated are: training, the incubation of new talent, capacity-building, cultural diversity, new media, rights management and international distribution.155
The fact that the film organization portfolio has emerged incrementally, over a considerable period of time, creates the possibility that needs have emerged which remain unmet, or that organizations have failed to fulfill elements of their mandates, alongside the possibility that programs may overlap or duplicate one another.
The National Film Board argued that the existing mandate of the Government Film Commissioner remains undeveloped, due to inadequate funding. As a result, the envisioned role of the Commissioner as “champion” of Canadian film, both through public promotional activities and through advice to the Governor in Council, remains unachieved.156
The Role of the Department of Canadian Heritage
Witnesses were not specifically asked to comment on the distribution of functions between the Department of Canadian Heritage, on the one hand, and the various portfolio organizations on the other. It is useful, however, to explore this question separately, in order to isolate issues that may not be obvious when the film-related organizational universe is viewed as a whole.
Publicly available information on the Department’s website and in departmental documents does not make the division of functions between the Department and portfolio organizations immediately clear. Instead, it portrays the Department as carrying out the general roles listed in Figure 5.3 through a combination of internal activities and the activities of the portfolio organizations.
It is noteworthy that the recommendations of at least one witness imply some concerns about the effectiveness of the Department, in its role as the strategic manager of the portfolio. Representatives of the World Film Festival called for a reorganization of government involvement in the film sector that would place all existing agencies and programs under the direction of a “super-board” that would advise the minister, provide strategic management to all film-related programs, ensure effectiveness by component organizations, prepare comprehensive data on performance, and adjudicate disputes.157 The implication, here, is that there is a need for improved coordination and strategic management, functions which would normally be undertaken by the Department.
Understandably, the focus of most of the witnesses who appeared before the Committee was on immediate stakeholder concerns, notably the adequacy of funding and its accessibility. While perceptions concerning organizational roles and mandates may be somewhat impressionistic, they nevertheless point to a problem that the Committee has concluded needs immediate attention. Many of the organizations and individuals who work most closely and continuously with organizations in the film portfolio share a perception that roles involve an element of duplication, that programs and services are difficult to navigate, and that resources that should be going to the creation and marketing of Canadian films are being dissipated on administrative and programmatic duplication.
Even a cursory look at the respective roles of organizations would appear to suggest that prevailing perceptions are not entirely without foundation. For example, the current film-related role of the Canada Council would appear to have elements of overlap with the roles of the National Film Board and Telefilm Canada, notwithstanding differences among the recipients and products that are claimed to distinguish their roles. As well, many of the organizations have become involved in areas relating to emerging technologies, as well as functions that are supportive of their core mandates such as education and infrastructural support, without clear overall coordination to maximize value for money.
This committee, in previous reports, has suggested mandate reviews of various organizations. It has also pointed to the importance of governance issues and related matters of performance measures, evaluation and accountability. Indeed, these concerns were mentioned repeatedly in the Committee’s 2003 study of Canada’s broadcasting system.158 Little has come of these well-documented concerns, nor have previous mandate reviews been a source of much change.159
In the Committee’s view, there is little likelihood of a mandate review being carried out and even less likelihood that timely changes could be made that would have a noticeable impact on the implementation of a revised film policy. The most glaring and obvious weakness in the current governance situation is that the Department has chosen to play such a limited role in the governance of the film-policy.
On 22 November 2005 the Auditor General released a report that deals with a number of issues involved in the governance of Telefilm and the relationship between Telefilm and the Department of Canadian Heritage.
The Auditor General’s report echoes concerns by members of the Board of Telefilm about the “extent of the oversight that Telefilm Canada is subjected to, which leaves little leeway to interpret its mandate and determine the best way to accomplish it.”160 The report goes on to suggest that this oversight “reduces the overall efficiency of Canada Heritage and Telefilm Canada.”161
As this committee notes a number of times in this report, there are serious problems with the governance of the film portfolio. It is the Committee’s view that they will not be addressed if the focus is limited to the question of efficiency. While the Committee is concerned about efficiency, its first concern must be with the effectiveness of the film policy as it was implemented (largely by Telefilm) between October 2000 and today.
As noted a number of times in this report, the policy has contributed to an incredible and encouraging success in the French-language market and had virtually no impact in the English-language market. In plain terms, although resources were doubled for both language markets, nothing happened in the English-language market. There was no improvement and no incremental impact after the additional expenditure of millions of dollars of public money.
In its appearance before this committee, officials from Telefilm were not eager to address this evident problem. The source of the problem does not lie solely in questions of efficiency.
This failure needs to be addressed by changes to the existing governance structure and by changes within Telefilm Canada. Efficiency gains might occur with a clarification of mandates, however, this committee is not just looking for efficiency gains, but for substantial increases in the effectiveness of the policy.
In light of the ineffectiveness of a significant part of Telefilm’s feature film support program, and their officials’ reluctance to admit any major problems, the Committee sees a need for a new MOU that clearly identifies the Department’s role in the design, implementation, oversight and evaluation of the feature film policy.
With this in mind:
RECOMMENDATION 7
The Committee recommends that the Department of Canadian Heritage assert its responsibility for the design, oversight, implementation, and evaluation of Canada’s feature film policy.
There are three ways in which the role of the Department needs to be strengthened. First, as will be discussed in Part C of this Chapter, the Department needs to manage an initiative similar to the book publishing program that provides ongoing support to producers, distributors and exhibitors of Canadian feature films. Second, the Department needs to play a more active role in the monitoring of program performance. Indeed, it would be a relatively simple matter to prepare an annual report on the state of the Canadian feature film industry. Such a report should present performance measures related to the objectives of the policy (e.g., box-office revenues for films supported by the policy). Third, the Department needs to have some form of a direct lever to influence the implementation of the policy. Implementation of the policy cannot be left completely to arm’s-length agencies that are largely unaccountable for their performance over extended periods of time. This fact became abundantly clear to the Committee in its 17 November 2005 meeting with Telefilm Canada officials. In light of this:
RECOMMENDATION 8
The Committee recommends that the Government of Canada develop a new memorandum of understanding that would be signed by all organizations most directly involved in support of the feature film policy. This MOU should recognize the Department’s responsibility for the design, oversight, implementation, and evaluation of Canada’s feature film policy.
In the event that it is not possible to sign the appropriate memorandum of understanding, the government should consider developing alternate program delivery mechanisms.
Shortly before the release of the Committee’s June 2005 Interim Report, the Committee learned from witnesses that the Minister of Canadian Heritage had decided to dissolve its Feature Film Advisory Group, created in 2000, to monitor the implementation of the feature film policy.
Much of the evidence received by the Committee preceded the announcement that this group would be dissolved. A number of groups and individuals argued that the group continued to have an important role to play, and directed attention to sectors perceived to be under-represented.
Thus, the Alliance of Canadian Cinema, Television and Radio Artists (ACTRA) and the Directors Guild of Canada argued creators have had minimal representation and influence in the group, despite being among the most strongly affected by policies on which the group provides advice. ACTRA called for consistent representation of creators, in the form of senior managers of associations, unions and guilds that represent performers and creators.162 A more timely, open, and transparent appointment process was also called for. On the basis of a similar argument, the Conseil québécois des arts médiatiques (CQAM) proposed that the group include at least three representatives of organizations representing “auteur indépendent” productions in which the director has complete creative and editing control, at least two independent filmmakers, and equitable Aboriginal representation.163
The recent dissolution of the group attracted considerable, and largely negative, attention from witnesses. The Canadian Film and Television Production Association (CFTPA) called for the reconstitution of the group, composed of representatives from national associations working on behalf of the creation, production, distribution, broadcasting, and exhibition sectors, with a general advisory mandate and capacity to oversee all policy, administrative processes, and changes to administrative guidelines.164 The Association indicated that the effectiveness of the previous group was compromised by mandate and composition shortcomings, but argued that such a group continues to be needed because, in recent years, communication lines between Telefilm Canada and the industry have not been as effective as they should be.
Not all witnesses were entirely critical of the dissolution, however. The NFB indicated that the group had not been an effective policy oversight instrument, because its mandate was unclear and because it was impeded by partisan interests. With this in mind, it was suggested that an ad hoc group, composed of producers (4), distributors (3), conventional exhibitors (2) specialty exhibitors (2) and policy makers (3), with a Telefilm representative acting as secretary, could be useful, and would not create expectations that it would have a permanent role in governance.165 Given the arm’s length nature of the important agencies and groups in some way responsible for film, it can be seen why it was so difficult to run such a body in a functional manner. After all, was its role to advise the boards of the agencies and, if so, what function can it perform that the boards and staff of the agencies cannot perform on their own?
On 18 November 2005, the Committee was advised by Telefilm Canada that they intend to create a new “Canada Feature Film Fund Advisory Committee” that would “include a [National Steering Committee], supported by two Guideline Committees representing each linguistic market.” The membership and purpose of the proposed committees would be as follows:
The National Steering Committee would have representation from both the French and English markets, with a mandate to review overall CFFF policies and strategies, including the annual feature film business plan and CFFF performance reports. As well, the Steering Committee would advise Telefilm Canada as to whether any subcommittees need to be established and specific industry associations consulted in order to implement recommended policy and guideline changes.
The Guideline Committees would review specific guideline proposals, as outlined in the annual feature film business plan, as they relate to their particular language market.
To ensure continuity between the National Steering Committee and the Guideline Committees, Telefilm Canada would like to ensure that National Steering Committee members also sit on the Guideline Committees.166
Notwithstanding Telefilm’s new proposal, this committee has concluded that the notion of a formal advisory group is an unworkable consultation mechanism. Furthermore, it is the view of this committee that the structure of Telefilm’s proposed “Advisory Committee” would merely inject an additional layer of bureaucracy and complexity into an organization that is sorely in need of reform.
The Committee has concluded, therefore, that the most appropriate strategy would be for the Minister of Canadian Heritage to consult with industry stakeholders on a regular, systematic and ongoing basis. With this in mind:
RECOMMENDATION 9
The Committee recommends that the Minister of Canadian Heritage consult on a regular, systematic, and ongoing basis with members of the industry.
As discussed above, the feature film policy must look at the changing environment within which people view films. As mentioned in Chapter 2, many more Canadians watch movies at home than in the cinema. Since one goal of the policy is to develop audiences for Canadian films, efforts should be made to promote and market films in the venues where Canadians are most likely to watch them.
The Committee has been told by some witnesses that useful statistics on viewing habits for film and television are currently being collected, or could be obtained. Tracking sales and rentals of DVDs is more difficult but not impossible. At a minimum, special purpose surveys could be used to develop estimates of movies seen in this way.
This committee, in reports dating back to 1999167, has repeatedly attempted to address the inadequacies of the statistics collected across the cultural sphere. Indeed, in its 1999 Report on Canadian cultural policy, this committee recommended that: “the Department of Canadian Heritage ensure the collection of statistics on cultural activity be of the same quality and timeliness as those now available for other sectors of the Canadian economy.” In this same spirit:
RECOMMENDATION 10
The Committee recommends that the Department of Canadian Heritage, in partnership with all organizations most directly involved in support of feature film, be responsible for identifying and ensuring the collection of timely and relevant performance measures on audiences for Canadian feature film.
Relevant organizations would include, but not be limited to: Telefilm Canada, the Canadian Television Fund, the National Film Board of Canada, the CRTC, and Statistics Canada.
This committee has also observed that improvements need to be made to the reporting and assessment of progress in reaching the objectives established by the policy. At present, no single agency is responsible for doing this and there are no mechanisms in place to create the necessary co-operation among the agencies involved. The simplest solution is to assign this responsibility to one organization and have that organization prepare an annual report on the state of Canada’s feature film industry and the progress being made in the achievement of the policy objectives.
The most appropriate place to locate such a responsibility is the Department of Canadian Heritage. No other agency has the overall responsibility for the policy or the comprehensive overview required to assess the policy and its implementation. Telefilm, for example, focuses on its investments and box-office results; but it cannot be expected to monitor progress in areas such as training and preservation, nor should it be expected to. Accordingly:
RECOMMENDATION 11
The Committee recommends that the Department of Canadian Heritage, in partnership with all organizations most directly involved in support of feature film, be required to issue an annual report on relevant performance measures related to the objectives of the Canadian Feature Film Policy.
Canada’s broadcasting system is regulated by the CRTC. As seen in Chapter 3, a number of witnesses told the Committee that one of the gaps in the film policy has been the lack of attention paid to Canada’s broadcasting system and the negative consequences of the CRTC’s 1999 television policy for priority programming.
This committee’s June 2003 Report on Canadian broadcasting recommended that “the CRTC be directed by order in council to review its 1999 television policy for the exhibition of priority programming in prime time.” A few months later, the Commission issued a call for comments on:
… actions it might take to support the production and broadcast of more high quality, original, English-language Canadian drama and to attract larger audiences to such programming and … on actions it might take to ensure that high quality, original French-language Canadian drama remains a key component of prime time viewing.168
The culmination of this exercise was the Commission’s introduction of an incentive program in November 2004, which seeks “to increase the amount of original English-language Canadian television drama broadcast on Canadian television ... by allowing broadcasters to air additional minutes of advertising if they meet the Commission’s criteria.”169 The Commission did not find it necessary to consider incentives for increasing viewing of Canadian French-language drama.
Notwithstanding the Commission’s new incentive package for English-language Canadian drama, witnesses and respondents expressed considerable dissatisfaction with the CRTC’s approach to priority programming for television drama. The Committee notes that Recommendation 7 of this report calls on the Department of Canadian Heritage to assert its responsibility in the oversight and implementation of the feature film policy. Interestingly, this committee’s 2003 Report on broadcasting observed that the Department’s involvement in television and radio policy development has evolved to a point where “virtually all … authority for broadcasting policy has been given to the regulator.”170
In light of this, it is clear that the Department should also be more active in the development of Canada’s television policy. Indeed, the Committee is convinced that television drama and comedy production is an important incubator for people who go on to make feature films. With this in mind:
RECOMMENDATION 12
The Committee recommends that the Department of Canadian Heritage, in collaboration with film and television industry stakeholders, develop a new policy for the exhibition of priority programming on Canadian television.
An additional problem brought to the attention of the Committee was the absence of a broadcasting policy to support the promotion of Canadian feature films. The Committee recognizes that there are a number of promotional vehicles and mechanisms that could be used for the promotion of Canadian feature film. These include, but are not limited to: trailers, entertainment programs, and segments within newscasts. Finding ways to better promote Canadian films, therefore, might be accomplished by a number of different mechanisms through the broadcasting system. Accordingly, the Committee believes that the CRTC should be directed by the Government of Canada to develop a film, drama and documentary policy that will help promote, support and, by extension, increase audiences for these forms of cultural expression.
RECOMMENDATION 13
The Committee recommends that the Government of Canada direct the CRTC to develop a policy that supports the promotion as well as the viewing of Canadian feature films, long-form documentaries, and drama.
Canada’s national public broadcaster, CBC/Radio-Canada, also needs to be more directly involved in the promotion and exhibition of Canadian feature film. Exactly how this might be done is difficult to prescribe. The Corporation has a broad mandate and in recent years has not been given the resources to meet its mandate.
The difficulties facing the CBC are well-represented by its creation of “Movie Night in Canada” which it used to replace programming lost when the National Hockey League cancelled its 2004-2005 season. The vast majority of the movies shown were American; this was done to generate revenues and audiences that would otherwise have been lost.
While the economic pressures facing the CBC are well understood by the Committee, it seems troubling nevertheless that the Corporation, particularly its English-language service, does not have a clear and well-articulated strategy to ensure the broadcast of Canadian films and long-form documentaries. Indeed, if the CBC is unwilling to broadcast our films, who will?
Although far-reaching measures that go well beyond the scope of this study are probably required, the Committee is convinced that the Corporation could and should be doing more to promote and build audiences for Canadian feature films and documentaries. With this in mind, the Committee calls on the Corporation to take immediate action: Accordingly:
RECOMMENDATION 14
The Committee recommends that the CBC/Radio-Canada develop a long term plan to incrementally increase the number of hours of Canadian feature film and long-form documentaries broadcast on its English and French-language networks. The Corporation should deliver this plan to the Standing Committee on Canadian Heritage within six months of the tabling of this report.
The Government Film Commissioner
The role of the Government Film Commissioner is not particularly well-defined in the legislation creating the office. The National Film Act171 establishes a “Government Film Commissioner” who is appointed by the Governor in Council on the recommendation of the National Film Board (the Board) for a term of five years.172
The Commissioner is the chief executive officer of the NFB and is charged with the administration of the operations of the Board. The Commissioner may, subject to the by-laws of the Board, exercise all powers of the Board in the name of the Board: section 17(1).
A slightly fuller explanation of the Commissioner’s duties may be found in the section of the Act addressing the purposes of the Board, of which the Commissioner is the chief executive officer. Section 9 of the Act states that:
the Board is established to initiate and promote the production and distribution of films in the national interest and, in particular,
| (a) | to produce, distribute and promote the production and distribution of films designed to interpret Canada to Canadians and to other nations; |
| (b) | to represent the Government of Canada in its relations with persons engaged in commercial motion picture film activity in connection with motion picture films for the Government or any department thereof; |
| (c) | to engage in research in film activity and to make available the results thereof to persons engaged in the production of films; |
| (d) | to advise the Governor in Council in connection with film activities; and |
| (e) | to discharge such other duties relating to film activity as the Governor in Council may direct the Board to undertake. |
As CEO of the Board, the Commissioner presumably directs these initiatives. A further elaboration of the Commissioner’s role is set out in the National Film Board website, which states: “In addition to advising the Governor in Council on film matters, the Commissioner is mainly involved in the long-term planning of activities at the NFB, in developing its resources, clarifying its general policies and formulating its production policies.”173 The role of the Government Film Commissioner has not been considered in Canadian jurisprudence, nor has the section of the National Film Act establishing the office been the subject of reported legal proceedings.
Under the revised governance structure recommended in this report the Government Film Commissioner would, in effect, be the Minister responsible for Canadian Heritage. The success of any film policy and the supporting programs will require the efforts of the NFB, Telefilm, Canada’s broadcasting system and the Department of Canadian Heritage. The Committee is of the view that the revised policy should recognize this reality and remove the title of “film commissioner” from the head of the National Film Board while leaving all other responsibilities of the Film Board unchanged. Accordingly:
RECOMMENDATION 15
The Committee recommends that the legislation governing the National Film Act be amended to remove mention of the Government Film Commissioner. Such responsibility should be assumed by the Minister of Canadian Heritage.
The objectives of the existing policy were outlined at the outset of this chapter. Two key objectives are to attract creative talent for the making of Canadian feature films and to increase the audiences for those films. One step in meeting these objectives is to address the governance issues discussed above. A second step is to use a full range of mechanisms and instruments to support the policy. A third step is to deal with important matters in organizations responsible for the implementation of the policy. This section discusses these matters and what role should be played by Telefilm Canada and the Department of Canadian Heritage.
During the course of its work, the Committee learned a great deal about the workings of Telefilm. It is the key agency responsible for supporting feature film within Canada and plays a role analogous to that of the Canada Council for the Arts in its support for Canadian artists. To be blunt, the Committee was deeply unimpressed by what it learned about how Telefilm operates and was largely disappointed by the performance of Telefilm representatives who appeared before the Committee. In the view of the Committee, Telefilm, for better or for worse, has become part of the problem. This situation needs to be addressed if there is to be any hope of a more vibrant and successful feature film industry in Canada.
One element of the Telefilm Canada Act that should be changed concerns restrictions in the range of experience for members of the board. At present, Section 5 of the Act states that “No person who has, directly or indirectly and individually or as a shareholder, partner or otherwise, any pecuniary interest in the audiovisual industry is eligible to be appointed or to hold office as a member of the Corporation.”
While there is an understandable desire to prevent conflicts of interest, this can be handled in a manner that does not create a blanket prohibition against the very kind of expertise and knowledge that at least some of the board members should possess. Blanket restrictions do not apply to the CRTC, or the board of the CBC, where similar problems of potential or perceived conflicts of interest can exist.
The Committee notes the safeguards against conflict of interest found in legislation and other documents. Part X of the Financial Administration Act sets out details on disclosures of conflict of interest by directors or officers of Crown corporations, including directors of Telefilm. Treasury Board Secretariat guidelines confirm this legislative proscription. Where the possibility of a conflict of interest arises, a board member must explicitly disclose the nature and extent of his or her interest to the chairperson of the board. This notice should be in writing. Once notice is given, the board member is expected to refrain from voting on the matter that is under consideration.174
Given the prohibition against acting in conflict of interest in the Financial Administration Act and confirmed in Treasury Board guidelines, the restriction in the Telefilm Canada Act against the appointment of board members with a pecuniary interest in the audio-visual industry seems redundant. Therefore,
RECOMMENDATION 16
The Committee recommends that the Government of Canada amend the Telefilm Canada Act to remove the blanket restriction on the appointment of board members with a pecuniary interest in the audio-visual industry. Adequate safeguards contained in the Financial Administration Act and Treasury Board Secretariat guidelines are currently in place to ensure that conflicts of interest are declared and that those with a conflict do not participate in any discussion or decision that affect their own interests directly.
Telefilm’s Decision-Making Practices
While it is the most critical agency for the success of Canadian feature film, a number of Telefilm’s practices likely hinder the development of Canada’s feature film industry. The Committee has concluded that these practices, most of which are internal to Telefilm, should be modified. Doing so would go a long way towards improving the audiences for Canadian feature film.
For example, projects submitted for support to Telefilm are reviewed and decided on by officials within Telefilm. This review process is specific to film and is unlike those used for artists, writers or singer song-writers. While the Canada Council for the Arts provides support to artists, the decision to support particular artists is made by a panel of peers (i.e., other artists). Decisions about what book to publish are made by publishers and editors, while decisions about what sound recordings to support are made by record producers. The one thing that characterizes these decision-making processes is that the final decision is not made by officials. Telefilm is unique in having such important decisions made by officials.
In effect, Telefilm operates something like a Hollywood film studio. It decides what projects to support, invests in them and recoups equity. Unfortunately, none of the market disciplines that apply to the studio system apply to Telefilm. During the past few years Telefilm has developed mechanisms for scrutinizing larger projects. There is no evidence that these mechanisms have produced the desired results in the English-language market.
As noted in Chapter 4, where Canadian practices are compared with those of other countries, Canada is unique in having such a highly centralized decision-making system, where all the crucial decisions are largely made by officials from one organization. Other jurisdictions use a number of different mechanisms to decide which projects to support. Panels that make decisions can include outside experts, peers, and in the case of Germany, a member of the German parliament. In light of this situation:
RECOMMENDATION 17
The Committee recommends that Telefilm Canada develop a peer review system for determining which feature film projects will be supported.
The marketing of Canadian feature films has been a problem for many years. Although French-language producers have had a good deal of success in solving many of these problems, the situation for English-language Canadian films (other than treaty co-produtions) remains unsatisfactory.
One change brought about by the 2000 film policy was to increase marketing budgets. As seen in Chapter 2, there is no relationship, however, in the English language market between the size of the marketing budget and the success of a film. In addition, there is no relationship between the size of the budget for a film and the success of a film (see figure 5.1). These two facts suggest that there are some serious problems with the type of films that are being made in English Canada and the marketing of those films. With this in mind:
RECOMMENDATION 18
The Committee recommends that Telefilm Canada’s new peer review system include marketing professionals who would provide advice on promotional strategies for feature film projects under consideration for funding.
In addition to the peculiar and unsuccessful nature of Telefilm’s selection process, there are a number of bureaucratic procedures worth discussing. The two most notable ones are referred to by filmmakers as the “grind” and the “clawback.”
The “grind” refers to Telefilm’s practice of deducting tax credits from the budget for a film. Producers argue that this has the effect of reducing the value of the tax credits which are designed to help the producer, not Telefilm. The Committee sympathizes with these concerns. Accordingly:
RECOMMENDATION 19
The Committee recommends that the Government of Canada change its policy that requires Telefilm to include tax credits in the overall budget for a feature film.
Since the establishment of the Canadian Film Development Corporation in 1967, an ongoing feature of film policy has required that a percentage of “profits” from equity investment be returned to the responsible agency so that they can be reinvested in feature films. Telefilm is currently responsible for recouping returns. The proceeds from this “recoupment” process (often referred to as ‘the clawback’) are, in turn, invested in feature films. Based on what the Committee heard, the total amount recouped has always been very modest, so much so that the costs of recouping the equity have sometimes exceeded the actual amount recovered.
One added peculiarity of this process is that the recoupment for English-language films is more onerous than that for French-language films. In the view of the Committee, recoupment procedures and the duration of the recoupment period should be the same in both markets.
While it is odd that the rules are different for French-language films, the underlying peculiarity of the recoupment process deserves additional comment. The Government of Canada supports feature film because it is not viable without subsidy. It supports other cultural industries (e.g., books and magazines) so that more Canadian-authored content is developed than would be the case without the subsidy. No other cultural support program has “equity recoupment,” even though some recipients of program support are highly profitable and, indeed, more profitable than any production company dealing in Canadian feature films.
Recoupment of equity was part of the initial film support program when the federal government made a one-time contribution of $10 million to the Canadian Film Development Corporation in 1968. At the time, this contribution was thought to be enough to develop a self-sustaining Canadian feature film industry. As the last decades have shown, this optimism has not been supported. Even with ongoing contributions of $100 million a year, Canada has been unable to develop a self-sustaining feature film industry.
Indeed, given the well-known economics of feature film, it is virtually guaranteed that Canada cannot develop a feature film industry that produces film solely for the domestic Canadian market. Both markets are simply too small.
These reflections lead to the following recommendations about the equity recoupment policy.
RECOMMENDATION 20
The Committee recommends that Telefilm Canada harmonize its recoupment procedures for the two language markets.
RECOMMENDATION 21
The Committee recommends that the Department of Canadian Heritage carry out an evaluation and cost-benefit analysis of Telefilm Canada’s recoupment requirements.
A New Role for the Department of Canadian Heritage
Through the course of its study, the Committee learned that there is a great deal of support for individual projects (i.e., a film) but almost no ongoing support for production companies. This is in stark contrast to the federal government’s support for book publishing and sound recording and at odds with program support offered in a number of countries around the world.175
Indeed, other countries provide support for individual film projects and provide ongoing assistance to production companies. Canada also does it in its ongoing support to book publishers, sound recording companies and Canadian magazine publishers, without making all support project-specific. These forms of support correspond to the “slate funding” process used in the United Kingdom.
In Canada, for example, Canadian-owned book and magazine publishers receive support (based on a formula) for the sales of Canadian-authored titles each year. This support rewards the publisher for the sales of Canadian-authored titles (one goal of the program) and provides support to the firm so that firms, over time, will become more viable (a second goal of the program).
These two program goals (increased sales and more viable publishers) are similar to the goals of the film policy. On the one hand, the policy seeks to increase audiences for Canadian film and, on the other, it seeks to develop and retain talented creators. This second objective will only be achieved if there are viable production companies capable of producing films that attract audiences.
The actual implementation of the policy, however, uses a restricted set of financial mechanisms to achieve its goals. As noted in Chapters 3 and 4, Telefilm Canada has developed a system of “performance envelopes” which attempts to provide something that resembles “slate funding.” Performance envelopes are meant to give successful producers a claim on funds for their next projects. In theory, they work in much the same way as support provided to book publishers. If the publishing company has a successful year (measured in sales of Canadian-authored books) then it receives a larger amount from the program with which to publish books in subsequent years.
In practice, there are some serious criticisms of the way the performance envelopes have worked in the past few years. The most telling criticism is that they do not produce the desired results, particularly in the English-language market. In the Committee’s view, this is in part because performance envelope mechanisms are not the most appropriate mechanism to help build sustainable film production companies. Indeed, if the desire is to establish some form of “slate funding” for production companies, then funding should not be tied to a claim on the next specific project that might be produced.
The mechanisms used in the book publishing and magazine support programs could be applied to several aspects of Canada’s feature film policy. Ongoing support could be given to production companies based on the box-office revenues obtained by the company’s films. Ongoing support could also be paid to exhibitors for the box-office revenues of Canadian films. Both types of support could be based on a simple formula and would be available to French-language and English-language production companies, distributors and exhibitors. Neither one of these forms of support would intrude on the provinces’ jurisdiction over distribution and exhibition. Such an initiative should include measures to deal with the transition to digital and e-cinema formats and should be similar to the one used in support of book publishing. The effect of such support would be to directly reward successful producers, distributors and exhibitors of Canadian films. Accordingly:
RECOMMENDATION 22
The Committee recommends that the Department of Canadian Heritage develop and manage an initiative to provide ongoing support to film production companies, distributors, and exhibitors of Canadian films. This initiative should include a component that provides support for the transition to digital and e-cinema. It should also include a marketing component for a national film promotion strategy (e.g., an Internet portal, First Weekend Clubs, etc.).
Some witnesses suggested to the Committee that attention to exhibition would require some form of federal-provincial agreement; others proposed the creation of a national lottery, similar to what is used in the U.K., to support the production of Canadian feature film. While these ideas are attractive, they are probably unworkable. In addition, they would take a number of years to produce results. For this reason, the Committee considers them an unsuitable approach. The film policy already has some $100 million in program funding and this should be sufficient to meet the objectives of the program. In the Committee’s view, the problem is not a lack of funding but a serious problem in the implementation and delivery of the film policy program, particularly in the English-language market.
This final section makes recommendations on other matters raised by witnesses and respondents through the course of the Committee’s study.
A number of witnesses lamented the fact that long-form documentaries were not addressed by the policy. As seen in Chapter 3, respondents to the Committee’s questionnaire were unanimous in their view that long-form documentaries should be recognized by the film policy. The Committee agrees. Therefore:
RECOMMENDATION 23
The Committee recommends that a revised feature film policy recognize long-form documentaries.
The Committee recognizes that the funds are not currently available to support long-form documentaries. Hence:
RECOMMENDATION 24
The Committee recommends that the Department of Canadian Heritage establish a funding envelope in support of long-form documentaries.
As noted in Chapter 3, treaty co-productions have great potential for the Canadian film industry as they give our filmmakers access to a larger pool of resources and talent. However, witnesses raised a number of concerns about the way these treaties have been exploited by third parties with negative consequences for Canada’s feature film industry. It is the Committee’s view that this situation is in urgent need of review. Therefore:
RECOMMENDATION 25
The Committee recommends that the Government of Canada review the use of treaty co-productions to ensure that Canada’s cultural interests are being met.
A central tenet of the 2000 film policy was that the success of a film depends on the quality of the script. Witnesses agreed on this and also agreed that more money was needed. They did not, however, have a common view about what should be done to encourage scriptwriting and the development of scripts.
Table 2.11 in Chapter 2 shows the overall progression of scripts funded by Telefilm’s Screenwriters Assistance Program (SAP). This table reveals that just 6 of 366 (i.e., 1.6%) of all scripts funded by the program since its inception have been produced. The Committee notes that there are a number of different avenues that could be considered to improve this result. Support for script development could continue with Telefilm Canada, with an augmentation of available funds. Another option would be to transfer the SAP program to the Canada Council for the Arts, which already has a peer review process for supporting writers (e.g., poets and novelists). The most crucial challenge is to develop an approach that is workable and will contribute to more impressive results, particularly in the English-language market.
In light of the time restraints imposed on this committee’s study, we have been unable to address this question in detail as it deserves. With this in mind:
RECOMMENDATION 26
The Committee recommends that the Department of Canadian Heritage carry out an evaluation of the current mechanisms that support scriptwriting and script development with a focus on alternatives to the current system of support.
Further to this, as noted in Chapter 3, Canada’s national policy framework recognizes and promotes Canadian diversity. To this end, the feature film policy has, as one of its objectives, to foster the quality and diversity of Canadian films. This being said, there was little agreement among witnesses as to how to define diversity for the purposes of meeting this particular objective of the policy.
Time limitations have prevented the Committee from reflecting in greater depth on this question. The Committee recognizes, however, that an important source of strength in Canadian film is the opportunity for scriptwriters and filmmakers outside Canada’s large metropolitan centres to develop projects and bring them to fruition.
In the Committee’s view, not enough attention is being paid to this issue. Indeed, there is no reason that support cannot be provided to scriptwriters and film producers who are from linguistic minorities, Canada’s ethnic and Aboriginal communities or regions outside Montreal, Toronto and Vancouver. With this in mind:
RECOMMENDATION 27
The Committee recommends that the Department of Canadian Heritage take a lead role in examining ways in which greater support, particularly for scriptwriting, can be given to creators from Canada’s regions as well as its ethnic, Aboriginal and minority language communities.
Previous reports of this committee have recognized the importance of preserving Canada’s cultural heritage for future generations. The preservation of feature film productions fit within these concerns.
It is not clear why the film policy should have as a separate objective the preservation of films. In the view of the Committee, there should be a general policy that pertains to the preservation of our cultural heritage and that policy should necessarily include feature film. Hence:
RECOMMENDATION 28
The Committee recommends that the Government of Canada develop a national policy for the funding and preservation of Canada’s cultural heritage. This policy should include the preservation of Canadian feature films.
Witnesses raised a number of issues about the training available for those involved in the creation and production of feature films. One problem is that existing support for training centres does not recognize the contributions that could be made by post-secondary institutions.
Coordinating and working through this issue is a complex matter. In the view of the Committee, an appropriate response by the federal government would be to work with industry stakeholders to see if a sectoral council for training in film is an appropriate vehicle to address this and other issues. Sectoral councils have worked in a number of other areas (e.g., automotive technicians, software development, logistics), where complex relations exist among training institutes, professional organizations and the work of provincial government agencies.
RECOMMENDATION 29
The Committee recommends that the Department of Canadian Heritage work with Human Resources Development Canada and industry stakeholders to examine the feasibility of establishing a sectoral council for training in film and related studies.
As noted in Chapter 3, several witnesses and observers noted that current legal protections against video piracy are inadequate and urged reform of the Criminal Code and the Copyright Act to address this. The Committee was asked to take action to provide adequate legal remedies against the video recording of films in cinemas and the trading of copyrighted and counterfeit material via peer-to-peer file sharing programs. Further, the Committee was informed that greater sanctions against the circumvention of technological protection measures designed to protect copyright material are needed than the ones proposed in Bill C-60, currently before Parliament.
Several observers also took the opportunity to point out gaps in the Copyright Act and urge remedial action, particularly as they related to neighbouring rights.
Neighbouring rights represent three additional types of subject matter that are not included within the statutory definition of “works” in the Copyright Act but nevertheless receive copyright protection under the Act. These additional areas are (i) performer’s performances, (ii) sound recordings, and (iii) communication signals.
Originally, copyright related to author’s and artist’s “works” which is now defined in the Copyright Act to include literary, dramatic, musical, and artistic works. These remain the foundation of copyrighted interests. In more recent times, however, performers, record producers, and broadcasters have been accorded certain rights in their “neighbouring works.”
Still, gaps remain. Performers would like to see the Copyright Act amended to provide performers with a copyright in an audiovisual work (film, television program or other audiovisual medium).
As well, the Copyright Act is silent on the definition of author of an audiovisual work. Opinions varied somewhat on how best to define “author”, with some wishing to see the Act amended to recognize the producer as the author and first owner of a completed visual work, while others suggested that screenwriters be recognized as authors in order to gain moral rights in their work and hence secure their claim to authors’ levies at home and abroad; and still others suggesting that authorship could be shared between directors and screenwriters.
The Committee is very much aware that the intersection of digital technology and copyright law raises significant issues for film industry stakeholders, including such major topics as peer-to-peer file sharing, technological protection measures, and digital rights management.
Section 92 of the current Copyright Act calls for a mandatory review of the legislation within five years of its coming into force in 1997, and for the study of that review by a parliamentary committee. In October 2002, the review entitled Supporting Culture and Innovation: Report on the Provisions and Operation of the Copyright Act was completed and was referred to the House of Commons Standing Committee on Canadian Heritage for study.
In March 2004, the Minister of Canadian Heritage and the Minister of Industry jointly submitted a Status Report on Copyright Reform to the Standing Committee on Canadian Heritage. The Committee reviewed the Status Report and held a series of meetings to consider six short-term issues. In May 2004, the Committee released its findings and nine recommendations in its Interim Report on Copyright Reform.
Bill C-60 was introduced in the House of Commons in June 2005. The bill makes wide-ranging changes to the Copyright Act and is primarily designed to address digital issues surrounding copyright.
Given the amendments proposed in Bill C-60 the Committee felt it wise to refrain from specific recommendations in this report. This being said:
The Committee recognizes the pressing need for copyright reform in the digital age and trusts that the ongoing review of the Copyright Act will consider all matters of relevance to the feature film industry.
As for the important need for protections against video and cinema piracy.
RECOMMENDATION 30
The Committee recommends that the Government of Canada work with stakeholders to increase protections against video and cinema piracy and in particular urges the amendment of the Criminal Code to explicitly deal with this matter.
The Committee wishes to close its study of the Canadian feature film industry with the following observation and challenge:
The Committee notes that the market share of English-language Canadian films has risen from 0.2% in 2001 to 1.6% in 2004. As this report has noted repeatedly, this modest increase is not sufficient to significantly increase the visibility of these films and represents a notable failure of Canada’s feature film plicy.
Not only are English-language Canadian films not widely exhibited in cinemas throughout Canada, but exhibitions are often very brief and sometimes cut even shorter when other, more profitable films are released. This has been the source of considerable frustration.
To achieve greater visibility for English-language Canadian films, significantly greater screen time for them is needed. With this in mind,
The Committee directly challenges the exhibitors of English-language Canadian films to double the amount of screen time of these Canadian films annually. Such an increase would help expose audiences to a greater number of English-language Canadian films, thus giving expression to the feature film policy in a much more meaningful way.
| 135 | To meet its policy objectives the box-office revenues in 2004 for the English language market need to be approximately $28 million. Even with four or five successful films with box-office revenues of approximately $1 million or more, English-language Canadian films came nowhere near this target. One of the reasons is that many films had box-office revenues of less than $100,000. |
| 136 | Brief submitted by the Canadian Film and Television Production Association, September 2005, p. 20. |
| 137 | Brief submitted by the National Film Board, September 2005, p. 14. |
| 138 | Brief submitted by the Nova Scotia Film Development Corporation, September 2005, p. 4-5. |
| 139 | See Gordon F. Osbaldeston, P.C., O.C, Organizing to Govern, Vol. 1, McGraw-Hill Ryerson, Toronto et al, 1992, p. 13 ff. |
| 140 | Over the years, this category of non-departmental organizations has become so varied that little else can be said about them. Gordon Osbaldeston, who was Clerk of the Privy Council during the 1980’s and has written the major reference work on federal government organization, has identified at least six very different roles carried out by such bodies. He also notes that the legislation (or ministerial mandates) establishing them creates varying degrees of independence, because it leaves “a wide spectrum of ministerial and prime ministerial powers and responsibilities related to policy, operations, financial management, funding and appointment of key personnel.”Ibid., p. 21. |
| 141 | Variations among organizations in each category, especially the “independent organization” category, create many exceptions to these generalizations. For an enumeration and discussion of organizational types and sub-types, see Audrey Doerr, The Machinery of Government in Canada, Methuen, Toronto et al, 1981, p. 106 ff. |
| 142 | Variations among organizations in each category, especially the “independent organization” category, create many exceptions to these generalizations. For an enumeration and discussion of organizational types and sub-types, see Audrey Doerr, The Machinery of Government in Canada, Methuen, Toronto et al, 1981, p. 106 ff. |
| 143 | Note: An additional organization, the Canadian Independent Film and Video Fund (CIFVF), is a public-private partnership that receives federal funding through the Department of Heritage. It funds the production of documentaries, docu-dramas, dramas and animated films for educational purposes. Its federal funding will lapse at the end of March 2006. |
| 144 | The term “arm’s length” covers a number of different types of government agencies that have been set up over the last 80 years. The extent to which they are “arm’s length” varies with the particular legislation that established them. The essential point is that they have a mandate, outlined in legislation, a separate governance structure and their day-to-day operations are not directed by the executive branch of government (i.e., they are not responsible to a deputy minister). Four of these agencies (Telefilm, CCA, NFB and the CBC) report to Parliament through a designated Minister. Legislation governing the CRTC differs from that governing the other four agencies. |
| 145 | Summative Evaluation of the Canadian Feature Film Policy, Corporate Review Branch, Department of Canadian Heritage, September 2005. |
| 146 | Brief submitted by the National Film Board, September 2005, p. 4. |
| 147 | Brief submitted by the Nova Scotia Development Corporation, September 2005. |
| 148 | Brief submitted by the Canadian Conference of the Arts, Feburary 2005, p. 9. |
| 149 | Brief submitted by the Canadian Independent Film & Video Fund, September 2005. |
| 150 | Presentation to the Committee, the Canadian Conference of the Arts, 24 March 2005, p. 6. |
| 151 | Brief submitted by the Ontario Media Development Corporation, September 2005, p. 2. |
| 152 | Brief submitted by David Newman, September 2005. |
| 153 | Brief submitted by the Producers Roundtable of Ontario, September 2005, p. 2. |
| 154 | Brief submitted by the Canadian Film and Television Production Association, September 2005, p. 7. |
| 155 | Brief submitted by the National Film Board, September 2005, p. 6-7. |
| 156 | Ibid., p. 13. |
| 157 | Brief submitted by the World Film Festival, February 2005, p. 15. |
| 158 | See Chapter 19 of Our Cultural Sovereignty, June 2003. |
| 159 | There was a mandate review of The National Film Board, Telefilm and the CBC in 1995. |
| 160 | Office of the Auditor General, Report of the Auditor General, Chapter 5, Support to Cultural Industries, p. 23. |
| 161 | Ibid., page 23. |
| 162 | Brief submitted by ACTRA, February 2005, p. 7. |
| 163 | Brief submitted by the Conseil québécois des arts médiatiques, February 2005, p 2-3. |
| 164 | Brief submitted by The Canadian Film and Television Production Association, September 2005, p. 19. |
| 165 | Brief submitted by the National Film Board, September 2005, p.15. |
| 166 | "The Establishment of a Canada Feature Film Fund Advisory Committee." Attachment to a letter sent to the Standing Committee on Canadian Heritage, 18 November 2005. |
| 167 | A Sense of Place — A Sense of Being (June 1999); The Challenge of Change: A Consideration of the Canadian Book Industry (June 2000); Our Cultural Sovereignty: The Second Century of Canadian Broadcasting (June 2003). |
| 168 | See: http://www.crtc.gc.ca/archive/ENG/Notices/2003/pb2003-54.htm. |
| 169 | See: http://www.crtc.gc.ca/ENG/NEWS/RELEASES/2004/r041129.htm. |
| 170 | Standing Committee on Canadian Heritage. Our Cultural Sovereignty: The Second Century of Canadian Broadcasting, June 2003, p. 582. |
| 171 | R.S. 1985, c. N-8. |
| 172 | This information is found in sections 16(1) and (2) of the Act. |
| 173 | http://nfb.ca/atonf/organization.php?idcat=72&id=866&position=4&v=h&lg=en. |
| 174 | Treasury Board of Canada Secretariat, Directors of Crown Corporations: An Introductory Guide to Their Roles and Responsibilities (July 1993). http://www.tbs-sct.gc.ca/ccpi-pise/ig/index_e.asp. |
| 175 | It is also in stark contrast to the support given to museums, art galleries, symphony orchestras, as well as, opera and dance companies. |