Proceedings of the Standing Senate Committee on
Transport and Communications
Issue 8 - Evidence, September 24, 2014
OTTAWA, Wednesday, September 24, 2014
The Standing Senate Committee on Transport and Communications met this day,
at 6:45 p.m., to examine the challenges faced by the Canadian Broadcasting
Corporation in relation to the changing environment of broadcasting and
Senator Dennis Dawson (Chair) in the chair.
The Chair: Today, we are returning to our study on the challenges
faced by the Canadian Broadcasting Corporation in relation to the changing
environment of broadcasting and communications.
Our witnesses for today are from the Canada Media Fund. We have Sandra
Collins, Vice-President, Operations and Chief Financial Officer; and Stéphane
Cardin, Vice-President, Industry and Public Affairs.
The Canada Media Fund was formed in 2009 and began operations on April 1,
2010, following a merger of the Canadian Television Fund and the Canadian New
Media Fund. It was created by the Department of Canadian Heritage and the
Canadian cable industry and is a public-private partnership.
The Chair: I invite Ms. Collins and Mr. Cardin to make their
Sandra Collins, Vice-President, Operations and Chief Financial Officer,
Canada Media Fund: Good evening Mr. Chair and members of the committee.
Thank you very much for the invitation to take part in the committee's
examination of the challenges faced by the Canadian Broadcasting Corporation in
relation to the changing environment of broadcasting and communications. To
begin, we'd like to provide a brief overview on the Canada Media Fund.
The CMF was created in 2010 by the Government of Canada and Canada's cable
and satellite distributors to foster, develop, finance and promote the
production of Canadian content and applications for all audiovisual media
platforms. The CMF guides Canadian content towards a competitive global
environment by fostering industry innovation, rewarding success, enabling a
diversity of voices and promoting access to content through public and private
As you know, Digital Canada 150 was launched earlier this year by the
Government of Canada to ensure that Canada is poised not only to embrace its
digital future but also to assume a leadership role in a global digital world.
Canadian content is identified as one of the five pillars guiding Canada's
digital future, and the CMF is a key player in this part of the strategy.
Stéphane Cardin, Vice-President, Industry and Public Affairs, Canada Media
Fund: Since 2010, the CMF has provided a total of $1.3 billion in funding to
over 2,200 television and digital media projects. This in turn triggered $4.7
billion in production activity across Canada.
In 2013-14 alone, the CMF's program budget of $360.7 million dollars
supported the production of 510 projects. For every dollar of CMF funding for
new productions, $3.36 in production volume was generated.
The CMF delivers this financial support through two streams of funding
The experimental stream encourages the development of innovative, interactive
digital media content and software applications. The convergent stream supports
the creation of convergent television and digital media content for consumption
by Canadians anytime, anywhere. This stream is dedicated to financing four
underrepresented genres, which are dramas, documentaries, as well as children
and youth and variety and performing arts programming.
Ms. Collins: A component of the convergent stream, the Performance
Envelope Program is the main funding mechanism of the CMF. It represents 71 per
cent of total CMF funding in the 2014-15 program budget. The objective of the
Performance Envelope Program is to encourage partnerships between broadcasters,
television producers and digital media producers to create convergent content
that Canadian audiences can consume at any time and on the device of their
choice. Through this program, the CMF allocates funding envelopes to English and
French broadcasters in an amount that reflects their track record of supporting
and airing Canadian programming. Performance envelopes are calculated based on
five factors: audience success for original, first-run programs; total viewing
of all eligible programs, including repeats; historic performance; licensing of
regional productions; and the investment in convergent digital media content.
Broadcasters commit these funds to Canadian projects, but the actual funding is
paid directly to the producer.
In 2014-15, a total of 40 broadcast ownership groups and independent
broadcasters received performance envelopes. CBC/Radio-Canada receives the
largest amount of funds since they broadcast the most original Canadian content
from the four genres the CMF supports.
Mr. Cardin: CBC has received an average of 33 per cent of performance
envelope allocations to English broadcasters in the last four years, the largest
share in the English market. In 2014-15, CBC received an allocation of $53
million to trigger programming in the four genres the CMF supports. Over the
last four years, CBC received a total of $249 million in performance envelope
Radio-Canada has also received the largest share of performance envelope
allocations to French broadcasters, an average of 38 per cent in the last four
years. In 2014-15, Radio-Canada received an allocation of almost $31 million.
Over the last 4 years, Radio-Canada received a total of $136 million in
performance envelope allocations.
In addition to the performance envelopes, the CMF offers other targeted
funding programs to meet various elements of its mandate. Since 2010,
CBC-licensed programs have accessed an additional $6 million per year on average
from these programs, mostly incentives designed to support regional productions
and digital media content.
Radio-Canada is a major commissioner of French language programming from
outside Quebec that receives funding support from our Francophone Minority
Program. Mostly as a result of this initiative, programs licensed by
Radio-Canada have accessed an additional $8 million per year on average since
Thank you for your attention. We welcome any questions you may have for us.
Senator Demers: Ms. Collins and Mr. Cardin, thank you very much for
your clear and wonderful presentations.
The CMF traces its history to 1995 and the Cable Production Fund. What have
the significant changes in broadcasting been over the past two decades of your
Ms. Collins: That's a pretty big question, the last two decades. If I
understand your question correctly, it is what has changed with the fund.
Senator Demers: What have been the most significant changes over that
Ms. Collins: Certainly, the advent of the specialty networks. The
number of broadcasters is significantly different from when the funding was
initially established. That would be one of the most significant changes in the
broadcasting environment, and, certainly, the other, I would suggest, would be
Mr. Cardin: Absolutely. I agree with both of those statements. I would
say that it varies very much per decade. In the 1990s, very much in line with
what Ms. Collins has already mentioned, there was a significant increase in the
number of television services available in Canada, both specialty and through
satellite, and there was consolidation, for sure. Particularly since 2000, I
would say it's everything that is right now being discussed in the context of
the Let's Talk TV hearing at the CRTC, and that is the competition to television
from other sources of potential content viewing, namely over-the-top services
and content offerings through the Internet — much more competition for eyeballs,
if you wish to put it very simply.
Ms. Collins: I might add that, on the distribution side, it has
changed significantly as well, as far as how people are viewing. Many people
initially were only viewing over the air through antenna. Then, it started to be
cable. We've seen, over that time also, direct to home, and now people are often
receiving through IPTV, within the regulated arena anyway.
Senator Demers: Not to put you on the spot, but it is a success story
when I look at some of the things here since 1995 and how you've progressed. It
was more on that, and I thank you very much for that.
Senator Eggleton: Thank you for being here and for your comments. Now,
amongst your comments, you talked about CBC receiving the largest amount of your
envelope allocations for your four genres, which, you mentioned earlier on, were
dramas, documentaries, children and youth, variety and performing arts
programming, on both CBC and Radio-Canada. I'm more interested in the impact or
the outcomes or the results of that money. We've been hearing from some
representatives about the decline in the eyeballs, if you want to call it that,
on CBC. I'm focusing on the CBC, naturally, because that's the subject of the
study here; I know you have a broader mandate. There are fewer eyeballs on the
CBC, on Canadian content, aside from the hockey, which is now in the past. So
how much impact is this really having?
Some people have also come to the committee and said that they don't think
the quality of the programming is what it used to be. Isn't that what you're
supposed to be contributing to? Are you not concerned that this money might not
be spent properly?
Mr. Cardin: I'll segue as well into the follow-up from Senator Demers.
I do think that, yes, it has been a success story. In the French market, to
start, I think there is consistency with the number of programs that achieve
significant audiences on CBC and other broadcasters, regularly, audiences of 1
million and more.
However, part of the success that we've seen over the last decade, in
particular, is on the English side, where we're starting to see some movement. A
significant number of Canadian shows, particularly Canadian dramas, are now
reaching more than 1 million viewers, shows like ''Republic of Doyle,''
''Murdoch Mysteries'' and so on. I'm sure Ms. Collins has some statistics here.
She'll be able to provide some examples. In the aggregate, the share of viewing
to Canadian programming in those genres that we support has also been
increasing. We think, in terms of quality, if you want to equate that to a
certain extent with budgets, the production budgets are still significant, and
we find that those shows are reaching audiences in an increasing number. I'll
let Ms. Collins provide details as well.
Senator Eggleton: I'm talking about CBC, and I should have qualified
my question. I am talking about CBC English because I know there is much more
success with this on Radio-Canada.
Ms. Collins: Quality is a subjective point, but if you say that the
program is of a high quality, presumably they are able to attract and retain
We looked at a number of CBC dramas in particular over the years, and when we
examined viewing up until the end of the last broadcast year, which is based on
an August 31 year-end, if we look at original first-run drama, CBC was number
one and carrying a share of 42.7. That's in CMF-funded productions, which was
the highest of any network. We would argue that it in fact is still quite
Just to give you some specific numbers, shows like ''Murdoch Mysteries'' in
the most recent timetable is 1.1 million viewers, has been 1.2 million viewers,
and we see 1 million as the benchmark of success in the English market in
dramas. If you hit 1 million, we consider that a success.
Other shows that have done well include ''Air Farce''; their New Year's Eve
special, for example, has consistently about 1.2 million viewers. ''Heartland''
has done well. Rick Mercer holds at 1 million viewers regularly. So there are
quite a few successes in the English drama market, just looking at that genre of
Senator Eggleton: Looking at something else that is quite current, in
January 2012, according to news reports, the former chairman of the CRTC stated
that ''Internet and wireless technology has disarmed federal regulators of their
weapons to protect cultural identity.'' Just in the past week, we've seen in
CRTC hearings Netflix thumbing its nose at the request of the chair of the CRTC.
What should we be doing about that? What do we do about Canadian content as it
relates to what we call ''over-the-top broadcasters''?
Mr. Cardin: What we said in the context of the proceeding, to try to
summarize it, was that while we recognize the importance of granting choice and
flexibility, if you look at that from a systemic perspective, given that the
chair pointed to it in his introduction, we're financed about 30 per cent from
the federal government and 70 per cent, or along those lines, 65 maybe, from
Canadian cable and satellite distributors. Any changes that would impact the
revenues of those cable and satellite distributors would in turn affect our
capacity to support Canadian programming. If the cable and satellite
distributors' revenues diminish because of ''skinny basic'' and other proposals
that were before the commission, there would be an effect on our ability to
support content. It basically just reminded the commission — well, they are very
aware of it — that our role is there to support Canadian programming and that it
is tied to the extent of our program budget.
Senator Eggleton: Are you saying, in effect, that Netflix and other
over-the-top broadcasters should also be contributing to your fund?
Mr. Cardin: We did not say that they should be regulated. What we said
was that our mandate is to ensure that Canadian content is available on all
platforms and that there were possibilities for us to come to some sort of
specific programming or arrangement with OTT providers where they could trigger
potentially our access to our funding in exchange for a contribution to the
system. But we weren't talking about necessarily regulating a set percentage or,
for example, imposing spending requirements on them. We think there is a
possibility of arriving at a form of agreement through perhaps a more flexible
Senator Eggleton: A negotiated arrangement?
Mr. Cardin: Yes, in essence.
Senator Eggleton: Thank you.
Senator Batters: I'm not usually a member of this committee, so excuse
me if I ask anything that is widely known to everybody else here.
When I was listening to your opening presentation, what struck me is the huge
amount of dollars involved here. Am I correct in assuming you were talking about
four different sources that CBC receives? From the first one, you were talking
how they receive $249 million; then you talked about Radio-Canada receiving,
over four years, $136 million; plus then since 2010, you talked about an
additional $6 million a year, so $24 million over that time frame; and then, for
Radio-Canada, an additional $8 million a year, or $32 million. All of those
amounts are additional. Is that right?
Mr. Cardin: That's right.
Senator Batters: When you were speaking to Senator Eggleton just now
about where your money is derived from, you said that 30 per cent of that money
comes from the federal government. That brought to my mind that, in essence,
then the CBC not only receives the amounts that we all think of very directly as
being received from the federal government but also receives $100 million,
approximately, over that sort of time frame?
Ms. Collins: Just to recap, yes, the fund receives about $134 million
from the federal government. This year, we anticipate receiving about $217
million from the cable and satellite providers; and then we have miscellaneous
sources of revenue totalling about $366 million. When you look at the percentage
of the total funds that we say that on average CMF receives, yes, they do
receive a portion. We commingle all the funds, so we don't refer to ''this one
gets some cable and satellite money,'' et cetera. It's just one pool of money.
Senator Batters: We don't look at it like that over here.
Ms. Collins: No, I understand, but a portion of that would be the
federal government support.
Senator Batters: For CBC plus Radio-Canada, what is the approximate
amount per year that they receive from you out of your funds in total?
Mr. Cardin: Again, here in the presentation, we split it by language
market. Because the performance envelopes are by far the largest program, about
70 per cent, it would be about 33 per cent or 34 per cent in the English market,
and in the French market, it would be approximately 38 per cent.
Ms. Collins: Out of what we allocate to television.
Mr. Cardin: Very good point. We do allocate. I spoke to the
experimental stream in our opening remarks, and it has a budget of $39 million.
Senator Batters: The vast majority goes to television.
Mr. Cardin: Ninety per cent goes to convergence.
Senator Batters: Senator Eggleton was touching on this, but I want to
hear more about it because it is getting to be a big part of the television
marketplace, things like Netflix. Friends of mine don't have cable anymore; they
just use Netflix to access television.
Can you speak more about that? What is the position of the Canada Media Fund
regarding these virtual private networks that Canadians use to access Netflix
U.S. services? Can you explain how those are used, and are Canadians who would
use it in that particular fashion, in your opinion, breaking Canadian law to do
it that way?
Mr. Cardin: To be quite honest I don't think I have either the
technological or the legal expertise to speak on VPNs. We know just from reading
trades that some Canadians do. I couldn't fathom a guess as to what percentage
of Canadians do that.
We do know that the number of those who are members or subscribers to Netflix
Canada is growing very rapidly, particularly in the English market, less so in
the French market because of competitive offerings like illico from Vidéotron
and Tou.tv from Radio-Canada.
It will be interesting now to see what impact the advent of some Canadian
services will have, like the shomi service from Rogers and Shaw and the new
service that Bell is scheduled to launch in January.
With respect to the VPNs, we really can't answer. Regarding Netflix, Netflix
does offer Canadian content. What we hope is that Canadian content will be
available on as many platforms as possible.
Senator Batters: So you don't have any statistics about Canadian
Netflix, what percentage of the market that's getting to be at this stage and
how that might have increased over the last few years?
Mr. Cardin: I don't have them with me now. I would be very happy to
provide them to the committee subsequently because we do track that. And I
believe — I will just go out on a limb here — that in the aggregate now about 28
per cent of Canadians are subscribers to Netflix.
Senator Batters: That's significant. Thank you.
The Chair: Maybe we can see if we got those numbers in previous
testimony, and if we have them, we'll make them available to the members of the
Senator Housakos: Thank you to our guests. Can you explain to this
committee what your experience has been when dealing with the public broadcast
corporation in comparison to private sector broadcasters in terms of culture,
approach, promoting Canadian content? And also can you explain to us the
methodology that leads you to choose one project over another?
It seems to me that CBC/Radio-Canada has received a disproportionate amount
of the funding that you guys have been doling out over the last few years. Now,
has that been the case because they happened to come forward with the best
proposals for Canadian content programming? Is it because private sector
Canadian broadcasters haven't focused on a sufficient number of proposals
towards the CMF organization? Is it that at the end of the day they don't find
it at all profitable for them to invest in Canadian broadcasting? I would like a
little bit more feedback from you on the methodology, how you choose the
projects and why at the end of the day the CBC has gotten such a
disproportionate amount of funding.
Mr. Cardin: That's an excellent question, and perhaps we should have
made clearer in our opening presentation that the model that we use through the
Performance Envelope Program, which represents about 70 per cent of our total
program budget, is one where the broadcasters select the programs that they're
going to bring to the fund. We are not involved in the selection process at all,
as long as the projects meet our eligibility criteria.
So we're not involved in any kind of selective decision making, and that
system applies to all broadcasters — public, private, educational, the 40
broadcasters that Sandra mentioned that have access to the program. We employ a
methodology that is very much objective and based primarily on audience success.
Again, that's what we did mention in our opening remarks. There are slight
differences between the English and French market, but in a nutshell, 55 per
cent of the calculation is based on audience success of the programs that the
CMF supports. Ten per cent of it is based on how much the broadcaster provides
in terms of licenses to digital content. In the English market, 20 per cent is
based on what they license through productions that are produced by regional
producers, so in the English market outside of the Greater Toronto Area. And
another part of it is based on what we call historic performance.
I will leave it to Sandra to explain the system more, but the important thing
is to say that it is not a selective process and it's a process that is based on
performance, audience performance specifically.
Ms. Collins: To give an example, when we calculate the envelopes, all
dramas funded by the CMF compete with each other for a share of the drama pool.
Whether it's ''Saving Hope'' coming from CTV or ''Murdoch Mysteries'' from CBC,
the amount of audience that each of those shows achieve, they compete with each
other for a set pool of money. It's a competitive exercise.
So if CBC is gaining more audience on a particular show, or less, it impacts
the amount of funds that they will receive; and with audience success carrying
the greatest weight, it's really partly because CBC has such a great reach as
the public broadcaster versus, you know, if it's a show that's aired on a
specialty channel, it will not have the same amount of reach, same potential
even. So that influences a lot of why they garner such a high portion of the
audience success pool.
We then calculate that for variety and performing arts where they also do
very well, shows they've done recently like ''Battle of the Blades,'' et cetera,
and then children's and youth and documentaries, and then we tally all of it up.
It is very much a zero-sum situation. For CBC to gain more of a share, one of
the other broadcasters has less of a share, and it's recalculated every year.
The vast majority of the data is drawn from Numeris, what was formerly known as
BBM. So it's the currency of the industry on the basis of which we calculate the
bulk of the envelope.
Senator Housakos: But the comparison is done vis-à-vis all programs
that are CMF-funded, right?
Ms. Collins: Exactly. We only compare against other CMF-funded
Senator Housakos: Are there any CMF programs in the last two or three
years that were rated No. 1 nationally across the board when put up against
other across-the-board competition? Has there ever been a Canada Media Fund
program that was rated No. 1 in the BBM ratings?
Mr. Cardin: In the French market, absolutely.
Senator Housakos: In the English market?
Mr. Cardin: The first example that comes to mind is ''La Voix,'' the
French-language version of ''The Voice''; ''Star Académie,'' same thing. In the
English market, number one out of all shows, probably not, but close, but the
English market depends on whether you're counting things like the Super Bowl or
Senator Housakos: I'm just saying across-the-board ratings.
Mr. Cardin: Well, the answer would be no, but again, if you're
comparing with similar shows, like dramas, then there would be instances where
the Canadian shows would be having audiences that are comparable to U.S. dramas
or U.S. sitcoms — to U.S. dramas for sure.
Senator Housakos: I have two more questions before I turn it back to
Can you comment on how you view the CBC going forward in terms of its
structure right now, if it is responding to the need of promoting Canadian
content in an appropriate fashion? What I've seemed to come across as a repeated
message from producers, actors, people involved in the Canadian content
producing business is that they think there's a need for a Canadian public
broadcaster, obviously, because it's the only game in town for them, but
repeatedly I've heard their message that they don't feel that the CBC is
responding effectively to their needs and carrying enough Canadian movies,
Canadian shows. That seems to be the underlying message that I keep hearing from
people in the business of producing Canadian movies and Canadian content.
You guys are in the field. You're dealing with this on a daily basis, and my
question to you is maybe you can give some comments to this committee: What can
we do more than what has already been done as a Canadian society to respond to
our artists' needs, to our movie makers, to our producers? The message seems to
be that the CBC is not necessarily fulfilling its mandate in carrying all these
great movies that we're producing, apparently, on a regular basis.
Mr. Cardin: I don't think we're in an adequate place to make a
qualitative assessment of how the CBC is fulfilling its mandate or how it could
do so better. For us, really, what we can contribute to this committee's study
and analysis is essentially the facts that we've brought forth here, and would
repeat to that effect. I understand that's what the committee may have heard
from different parties, but in the universe that we support, which is production
of Canadian content in four very specific genres, the numbers bear out that CBC
is the broadcaster in both language markets that is supporting the greatest
quantity of Canadian content.
Senator Housakos: Well, my question is, are they the right platform?
What I'm saying is I think we have great Canadian actors and great Canadian
producers and we can produce great shows. What I hear from a lot of them is they
need the platform in order to get it across to Canadians. One of the roles of
this committee is to study and see whether the CBC, where we're putting in over
$1 billion a year as government and taxpayers, is supplying that adequate
platform to them. You see the results because they speak for themselves. In
French Canada they seem to be performing better for a variety of reasons; in
English Canada, they're not. When you talk to producers in Winnipeg or in
Edmonton who make movies, they're saying, ''You know what, we don't have a
platform to get our movies across to the world.''
We call upon all witnesses to contribute in this debate. We're not going to
hold you to whatever solutions or diagnoses of the problem you have, but I think
it's important that everybody weighs in on this issue so we can come to some
kind of consensus of where we go from here in promoting Canadian culture,
Canadian content and making sure that the CBC is well equipped to survive well
into the future.
The Chair: Was that a question? I have a supplementary so I wanted to
hear what the supplementary is.
Senator Eggleton: I have a supplementary question. In response to
Senator Housakos' first question, you said that you decide who gets this money
on the basis of audience ratings, how many viewers they have. Well then what
about new programs? What about ones that haven't been on the air yet? Do you not
fund any of those? They don't have any audience experience at all.
Mr. Cardin: There are some new programs, whether they're one-off
programs or whether they're a new series, and they generate audiences that are
as high as returning series. When we do the calculation, it is all shows that
are within the genres that we fund that enter into that calculation. As we said,
we redo the calculation annually, and it's based on the audience figures from
the prior broadcast year.
Senator Eggleton: No, I'm talking about brand new shows. CBC comes up
and says, ''We've got this great idea here; we want to put this on the air.''
Nobody's seen it yet, so how can you make a judgment based on audience ratings?
Mr. Cardin: We will in the subsequent year when the audience data
Senator Eggleton: You won't fund it the first year then?
Ms. Collins: No. We will definitely fund it if it's eligible in the
year. The CBC has a pool of money and it's up to them to decide which projects
and how much to allocate to each of them. We calculate and they've earned this
size of an envelope. They can choose to put it to a returning series or a new
series. The amount that they allocate per is their decision.
When that new show goes to air, it probably replaces a series that's not
returning and it will earn audience, and then it builds the envelope for the
Senator Greene: Thank you very much. I want to get some more
information about your numbers and what they mean.
With 33 per cent going to the English-language network and 38 per cent to the
French, what you're saying, basically, is that 71 per cent of your funding goes
to the public sector broadcasters; is that right?
Ms. Collins: No, our funds are split, in essence, two thirds English
and one third French. For example, on the French side, the total amount of
funding we have available for French language is one third of our total budget.
Senator Greene: Why did you pick a third? Why a third?
Ms. Collins: That's actually within our contribution agreement with
the Government of Canada.
Senator Greene: Could you provide a larger time horizon than just four
years? I would like to understand where it's been before and where it's heading.
Mr. Cardin: That, again, is a very good question because prior to the
creation of the Canada Media Fund, when we were known as our previous
incarnation, the Canadian Television Fund, as a condition, again, of the
contribution agreement with the Government of Canada, CBC and Radio-Canada in
their respective markets received a fixed allocation of 37 per cent of our
Senator Greene: Why 37 per cent? Is there a reason?
Mr. Cardin: That's what was set in the contract with the Government of
Canada. I don't know if that was based on some form of historic access prior to
that but, as I was saying, when Minister Moore announced the creation of the
Canada Media Fund, one of the important principles was that all broadcasters
would compete on a level playing field.
That's why you can see, basically, since that change in the French market,
Radio-Canada has pretty much held its share through its audience performance,
mainly. In the English-language market we've seen a reduction from 37 per cent
to 33 per cent.
The Chair: Through the good services of our library analyst, according
to the testimony provided by the Canadian Media Production Association, there
are 4 million Canadian Netflix subscribers or, in other words, equal to 30 per
cent of Canadian households.
Senator Batters: In following up on some streams of thought that have
come with some of my colleagues' questions, and again reading your opening
statement, you talked about how you're dedicated to funding four under-
representative genres, which are dramas, documentaries, children and youth, and
variety and performing arts.
First, what category do shows like ''Rick Mercer'' or ''Air Farce'' fall
into? Do they fall into the variety category?
Mr. Cardin: ''Air Farce'' in variety, yes. ''Rick Mercer'' is
considered more of a comedy and has been included in drama.
Senator Batters: Drama?
Mr. Cardin: Yes, it's drama, and comedy shows fit in there as well.
Senator Batters: Looking at the factors that you have set out, the
five factors you look at for your performance envelopes, primarily it's audience
success, and then it's almost doubled down on that because you also talk about
historic performances and an additional amount for that. I'm wondering, based on
the criteria that you set out, how innovation gets rewarded with that. It's not
specifically mentioned. From what you were saying to Senator Eggleton, I
understood that perhaps it's the networks that are responsible for rewarding
innovation and not the Canada Media Fund?
Mr. Cardin: Again, when the CMF was created, part of the guiding
principles was that television programs, at least, were striving to achieve
audience success first and foremost. The innovation portion of our mandate, I
would say, is twofold. First and foremost, creating a convergent stream makes it
such that we can't fund strictly a television program. A television program also
comes with additional content or digital platforms or it also has to be offered
on a platform other than television. Essentially, the innovation portion is in
trying to reach Canadians through all of those different platforms, increased
engagement over and above the television program by allowing the viewer to
engage with additional content, Web series, games related to a TV show or an
interactive website. That would be one portion of the innovation part of our
With the experimental stream that we mentioned, that program is focused
specifically on driving innovation, but it applies to digital media content
through a condition of our contribution agreement, to digital content, which
would mean that in that program we support games, whether for consoles, PCs or
mobiles, interactive Web series, e-books and even software applications in
Senator Batters: Are you telling me that innovation does not really
play a role in any of those things you just talked about for TV shows?
Mr. Cardin: In television, there is a role through the convergent
aspect of our support to television. It's also hoped that in the experimental
stream some of that innovation will find its way back into the more mainstream
portion of the industry, and we've seen a few examples of that.
Senator Housakos: Does 100 per cent of the funds you give to whatever
broadcaster go to production? For example, when you are doing ''Murdoch
Mysteries,'' does 100 per cent of the funding go to pay actors and producers, or
are portions of it used for other things?
Mr. Cardin: We support content at the development stage and at the
production stage. We have specific programs for each of those. Development is
essentially the script development and script writing process.
Senator Housakos: Regardless of who the broadcaster is, would they
take a portion of the money and use it to promote the program as advertising on
Mr. Cardin: Only a very small portion of allowable marketing expense
is in the budget that we support. The vast majority of a broadcaster's marketing
and promotion efforts do not receive any CMF funding. That's the same for all —
Senator Housakos: What would that allowable percentage be?
Mr. Cardin: In television budgets, and sorry for being technical, it's
3 per cent of what are called portions B and C of a standard budget. Portions B
and C are essentially all of the production and post-production items. They
exclude everything that is above the line: the stars, the director, the
screenwriter and administration expenses. Essentially, it's the bulk of the hard
costs to get a show made. We allow up to 3 per cent of those costs to be
marketing expenses, no more.
Senator Housakos: Does any funding go into news content?
Mr. Cardin: No, none at all — no news, no sports, no reality
The Chair: That's what we have as far as questions are concerned. I
would like to thank the witnesses for their participation. Honourable senators,
I would like to move the meeting go in camera, with your permission, to discuss
future committee business.