Evidence of meeting #25 for Canadian Heritage in the 39th Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was telefilm.
A recording is available from Parliament.
3:30 p.m.
Conservative
The Chair Conservative Gary Schellenberger
I call this meeting to order.
Today is meeting number 25 of the Standing Committee on Canadian Heritage, pursuant to Standing Order 108(2), a study on Telefilm Canada, its mandate and priorities.
We welcome all of you folks from Telefilm today.
Mr. Clarkson, if you would like to introduce the rest of your contingent, please brief us. Thank you.
3:30 p.m.
S. Wayne Clarkson Executive Director, Telefilm Canada
I will do so.
Thank you, Mr. Chairman and committee members, for this opportunity to meet with you today. I'm reminded this is my fourth opportunity to meet with the standing committee.
My name is Wayne Clarkson, and I'm the executive director of Telefilm Canada. With me are Charles Bélanger, the chair of Telefilm's board; Elizabeth Friesen, our chief operating officer; and Michel Pradier, the director of French operations and the Quebec office.
As you know, Telefilm Canada is a crown corporation, reporting to Parliament through the Department of Canadian Heritage. Our headquarters are in Montreal, and we serve our clients through four offices in Vancouver, Toronto, Montreal, and Halifax.
As a federal cultural organization, the mandate of Telefilm Canada is to develop and promote the Canadian audio-visual industry. The corporation is one of the main tools that the Canadian government has to offer strategic and financial support to the Canadian audio-visual industry. Its role is to stimulate the production of cultural works that reflect Canadian society, taking into account its linguistic duality and its cultural diversity. Telefilm also promotes the broadcasting of these works within Canada and around the world.
To administer its mandate, Telefilm operates with three main sources of funds: a parliamentary appropriation, contribution agreements, and recoveries. The total value of the funds administered by Telefilm in 2006-07 was approximately $135 million.
Since April 2006, we've also administered the Canadian Television Fund, which will distribute approximately $265 million this year.
l'd like to take this opportunity today to bring you up to date on the key actions that Telefilm has undertaken in the past 12 months, since we last appeared before this committee—it was almost 12 months ago exactly.
On the television front, our most significant accomplishment this year was putting into place a three-year agreement with the Canadian Television Fund. With the maximum use of Telefilm's services and financial and information systems, the administration of the fund has been streamlined, and it now operates with precise performance measures. The annual savings of $3 million, resulting from the consolidation of the fund, are now being reinvested in the industry.
On the feature film front, our first measure, taken last April, was to initiate an asymmetrical approach to the two language markets. We established English- and French-language working groups that brought together industry representatives from the production, distribution, exhibition, broadcasting, and marketing sectors, as well as from the unions, guilds, and provincial agencies. We asked these groups to work with us to improve program designs and develop new guidelines for the Canada feature film fund. Their input was remarkable. Last month we announced significant changes to the fund that established an efficient and fair decision-making process for funding through feature film production. The new guidelines are transparent, sensitive to the realities of both the industry and the market, and specific to the two language markets we serve.
As our second action on the Canada feature film fund, we undertook a full evaluation of Canada Showcase, the program that supports Canadian film festivals. This evaluation is informing our redesign of the program. It's going to be more accountable, transparent, and much more aligned to our corporate objectives.
Our third action was the following: Telefilm retargeted its investments in international marketing activities this year, in order to better target marketing and sales of Canadian feature films while increasing the value of sales and deals signed on the international markets. We launched Perspective Canada, which contributes funding to the projection of Canadian films in various markets and to the creation of promotional materials, DVDs and advertising.
On the new media front, we face great opportunities. The Canadian new media sector has enormous untapped potential worldwide. Presently this sector is worth about $25 billion, in 2004-05. By 2009, it's projected to hit almost $55 billion.
Canada is recognized internationally for its highly skilled game production talent, which is why this country is home to some of the world's largest multinational video game developers. However, for the most part this Canadian talent is working in salaried positions on commercial international game productions rather than on Canadian-owned and created productions.
This fall, Telefilm partnered with Canadian-owned video game companies to launch nationwide the great Canadian video game competition. We announced it at the video game convention in Montreal some three weeks ago. The competition invites Canada's video game developers to compete for up to $2 million in production financing.
We also undertook Telefilm's new five-year corporate plan, which was released this year. From cinemas to cellphones, Telefilm Canada responds to the multi-platform challenge.
We've established performance measures for all of our programs. We've conducted our second biennial client survey. We closed our Paris and Ottawa offices, and strategically relocated those resources to offset new initiatives, such as the Perspective Canada market screenings and film promotions.
Concerning our accomplishments at the box office, the French-language market has been extraordinarily successful, as we know. Also we're now beginning to see results in the English-language market. In fact, this year is proving to be one of the best years ever for the English-language box office.
Bon Cop, Bad Cop was financed by the English-language fund in the Canada feature film fund, and it's now Canada's biggest grossing film. Trailer Park Boys: The Movie enjoyed one of the biggest grossing opening weekends in the history of English-language cinema.
On the French side, Aurore has grossed over $5 million since its release, and Un dimanche à Kigali has taken in excess of $1 million.
There are also some real winners in the pipeline, including Shake Hands With The Devil, which is a dramatization of Romeo Dallaire's book.
Denys Arcand will have a new film, l'Âge des ténèbres. François Girard has a new co-production, Silk, and Sarah Polley's Away from Her is another example of the success we're anticipating in the coming months.
Let's talk about challenges. The successes of the industry and Telefilm Canada's contribution should be pointed out. However, it is equally important to understand the great challenges that await us and to prepare ourselves to face them.
The resounding success of Quebec feature films will only last if new sources of funding are identified and put into French-language film production.
Box office increases are still progressing too slowly in the English language market.
We must have more flexibility, and we must react more quickly to the new realities of the new media market. We will most certainly have to invest more money into this sector in order to see it achieve its full potential.
The growth of the Canada new media fund is crucial to investing in the future of Canadian content for new media. Telecom's budget should also be reviewed. There has been no increase to our budget since 2002. The Canada feature film fund has had a permanent cut of $2 million, and our investment capacity has been further eroded by the impact of inflation.
Meanwhile, production costs have increased significantly, average budgets have gone up, and so has the demand on Telefilm's resources.
Dollars, however, are only one issue. We will continue to be aggressive in seeking out new public-private sector partnerships, and we will continue assessing how we spend, with a goal to finding more ways to make better use of the dollars already in the system.
In the last 12 months, the administration of this corporation has been targeted and effective. I will continue to strive for a modernized, flexible Telefilm grounded in a firm foundation of accountability to all our stakeholders.
At this point, I'd like to introduce you to Telefilm's Charles Bélanger.
3:40 p.m.
Charles Bélanger Chair, Board of Directors, Telefilm Canada
Thank you, Wayne.
Telefilm's board is also concerned with the corporation's increasing need for flexibility to meet its objectives and to improve its client service.
The Telefilm Canada Act that was passed by Parliament in March 2005 conferred the powers of a natural person on us—therefore, full rights and the legal capacity to exercise them—as well as a legislative mandate that covers the entire Canadian audio-visual industry, and no longer only “film” as the original 1967 legislation stipulated. Nevertheless, these two essential acknowledgements are constrained by significant administrative limitations and are ultimately paralyzing.
This is not our finding, but that of the Auditor General of Canada herself in her report tabled in Parliament in November, 2005.
Allow me to quote two short excepts from her report. The first is:
Today, in light of this new mandate and the government's proposals on the governance of Crown corporations, we question whether it is still relevant for Canadian Heritage to maintain the MOUs and contribution agreements with Telefilm Canada in their current form...
The second excerpt is:
...some members of the Telefilm Board have expressed concerns about the extent of the oversight that Telefilm Canada is subjected to, which leaves the board with little leeway to interpret its mandate and determine the best way to accomplish it. None of the other eight Crown corporations in the Canadian heritage portfolio is subject to such a tight degree of oversight and monitoring. Moreover, no other Federal Crown corporation is evaluated and audited in this way by a department. This is a unique situation.
In other words and to state it clearly, in order to get out of this situation, Telefilm Canada wishes to be subject to part X of the Financial Administration Act and in this way be able to function like any other modern crown corporation. For us, modern means operating within the framework of contemporary financial legislation in which the roles, responsibilities and obligations of the administrators and directors are as clearly identified and defined as are the obligations that crown corporations have as far as the preparation and presentation of their business plan and related budget are concerned, as well as the content of their annual report.
Under the authority of the Financial Administration Act, Telefilm Canada will immediately begin to operate not only as a modern entity, but above all it would meet the highest requirements of contemporary governance, of corporate responsibility, of transparency and of administrative clarity, to the benefit both of its shareholder and of its clientele, which it is consistently attempting to serve with the greatest professionalism possible.
These changes and the modernization of the Telefilm Act to bring it into the 21st century will give us the desired flexibility, and for us, flexibility matched by accountability and transparency ensures the best value for the public dollar.
Flexibility also allows us to be leaders. Today's marketplace dictates that a great leader must be a visionary, one who foresees opportunities and seizes them. For Telefilm, those opportunities must deliver great homegrown content to as many Canadians as possible and that can be shared more and more with and appreciated by foreign audiences.
Mr. Chair, we would be pleased to answer the committee's questions about our role, mandate, and priorities. Thank you very much.
3:45 p.m.
Liberal
Mauril Bélanger Liberal Ottawa—Vanier, ON
Mr. Chair, this is almost becoming a habit, but my first act will be to state that between Mr. Charles Bélanger and I there is no family relationship. I say this is becoming a habit, because at the last meeting we had another Mr. Bélanger from northern Ontario. It's a popular name. Wait until you have someone called LeBlanc sitting at this table. You haven't seen anything yet.
Thank you, Mr. Bélanger, Mr. Clarkson, Mr. Pradier, and Ms. Friesen.
Mr. Clarkson, in your presentation, you said Telefilm signed a three-year agreement with the Canadian Television Fund to act as its manager. I am very happy to learn that Canada's new government has committed to funding the Canadian Television Fund.
Is that a conclusion that I can draw? It is a bit of a trap.
You signed a three-year agreement. To my knowledge, the Canadian Television Fund for television production has not been renewed beyond the current fiscal year. Given the controls that Mr. Bélanger was alluding to, I imagine that this agreement was ratified by the Department of Canadian Heritage. Is that correct?
3:45 p.m.
Liberal
Mauril Bélanger Liberal Ottawa—Vanier, ON
Can you therefore conclude that the government has committed to renewing the Canadian Television Fund for two more years?
3:45 p.m.
Liberal
Mauril Bélanger Liberal Ottawa—Vanier, ON
Therefore, there was no renewal and you have no indication to that effect.
3:45 p.m.
Executive Director, Telefilm Canada
If I may, to be clear, we provide the administration for the fund, solely. The governance of the Canadian television fund is the responsibility of the board of directors, of which there is representation from the department and the industry as a whole. We have no rights or responsibilities as to the renewal of the fund.
3:45 p.m.
Liberal
Mauril Bélanger Liberal Ottawa—Vanier, ON
I understand that, but as you have confirmed furthermore that the department is very restrictive in its audits, and in what it allows you to do, and that it has accepted a three-year agreement, I would have thought that we could detect a will on the part of the department or the government to renew the financing of the fund.
3:45 p.m.
Chair, Board of Directors, Telefilm Canada
That is how we see it, but so long as things are not clearly and concretely set out, we cannot say that it is a done deal.
3:45 p.m.
Liberal
Mauril Bélanger Liberal Ottawa—Vanier, ON
All right. There is one aspect that has been brought to my attention by representatives and I must raise this point. I know that this does not concern Telefilm particularly, but it deals more with the management of the Canadian Television Fund. Perhaps you can help me.
Am I right to believe that the government has decided to no longer appoint, among the three or five representatives that sit on the board, someone who would be associated with the industry, who comes primarily from a francophone minority community? Am I right? Is the information that I have been given correct?
3:50 p.m.
Executive Director, Telefilm Canada
I'm not aware of that decision. As I say, we no longer have any authority over the appointment of board members to the Canadian television fund. Monsieur Bélanger served as a board member, and then once the contract was agreed to, it was decided--and I think to avoid conflict of interest between a service provider and the CTF--that we not have any representation on the board.
3:50 p.m.
Executive Director, Telefilm Canada
It's the industry combined with the Department of Canadian Heritage.
3:50 p.m.
Liberal
Mauril Bélanger Liberal Ottawa—Vanier, ON
Okay.
Mr. Chairman, I want the committee to be aware that there is a concern in the minority francophone community that the government has indicated its unwillingness to appoint a representative of that community. They've had a seat traditionally, or at least in recent years, on the board to represent the interests of that community. However, for some reason that I'm not aware of, the government has indicated its unwillingness to appoint someone from that community. That's something I wish to flag and that I'll be bringing back at the appropriate moment.
I would now move on to your comments.
You stated that you would like to be subject to part X of the Financial Administration Act, but I would like to understand what follows. What are the constraints that you would like to rid yourself of in this way? How do these constraints manifest themselves? Is it through audits, agreements, some kind of protocols, or policies? How do these limitations, which you seem to find somewhat suffocating, manifest themselves? Other than being subject to part X of the act, would there be any other way of easing Telefilm's burden?
3:50 p.m.
Chair, Board of Directors, Telefilm Canada
I will begin and then I will ask my colleagues to complete my answer.
As I was saying during my presentation, the Telefilm Canada Act goes back to 1967. It has been somewhat overtaken by events. We realize that we have been able to cover the audio-visual field through contribution agreements until the legislation was amended. These agreements are extremely restrictive and leave Telefilm and its board of directors very little leeway to do any oversight of the activities of the corporation. In other words—and I am choosing my words carefully—working in this way is somewhat like working under a form of trusteeship.
We feel that after all these years, the corporation is mature and should be treated as such, like any crown corporation. As a result, the more modern, contemporary and normal treatment—and this is not overly complicated—would be under part X of the Financial Administration Act, which provides for settling issues that include the composition of the board, the appointment of board members, provisions regarding conflicts of interest, as well as one provision of the current legislation that obviously poses a serious problem for us: section 5 only talks about eligibility. The eligibility means that we are not able to appoint members who would have a pecuniary interest in the audio-visual world.
What representatives from the audio-visual world could therefore ever sit on Telefilm's Board if they did not get rid of all their financial interests?
There is a modern way to settle these problems, these conflicts of interest, and part X abundantly provides for it.
3:50 p.m.
Bloc
Maka Kotto Bloc Saint-Lambert, QC
Thank you, Mr. Chairman.
Welcome. I will be very brief because I have many questions to ask and I hope to obtain very brief responses.
I will start with the funding of Telefilm. The legislation passed in 2005, that changes, Telefilm's mandate, from now on concerns the whole multimedia universe, as we have been told. Does Telefilm now have the necessary funds, in this regard, to fulfil the mandate it has been given by the legislation?
3:50 p.m.
Executive Director, Telefilm Canada
The Canada new media fund has approximately $14 million, through a contribution agreement with the department. There's no question additional dollars to Telefilm Canada would be appreciated in all of its various programs and funds. I think merely federal money or public money generally is not the sole answer.
I'm very pleased about many of our programs, including the new media one, in the great Canadian video game competition that we've announced. We've done it in partnership with the private sector and the public sector.
Is there a need for new money and new media? Absolutely. It's a priority. It's the next generation of talent. It's the youth coming up that must be given that opportunity. We want Canadian talent to own the copyright, to have the creative opportunity to develop their projects before they go into the marketplace. To do that, it's going to take new resources.
3:55 p.m.
Bloc