Timely, consistent funding is crucial to the operation of the CTF, and its ability to support the Canadian television production community as mandated and required. As such, it has been the practice of the BDUs, as per CRTC circular 426, to make monthly contributions to the CTF. The entire CTF financing model is based on monthly cash flow injections from BDUs and payments from the Department of Canadian Heritage, combined with reserves and other contributions. CTF payments to producers happen throughout the year, according to the guidelines, and are critical to develop, maintain and complete Canadian productions.
The recent announcement and action of withholding CTF contributions by Shaw Communications and Videotron are significant and may have a potentially devastating impact on the Canadian production community, especially as April-September is the traditional production cycle and broadcast cycles—requiring new Canadian content—begin in September.
Deeply concerned about the industry's ability to manage a dramatic reduction at this critical time, the board has approved a financial plan that will enable the CTF to maintain financial support to all eligible productions for the remainder of fiscal 2006-2007, ending on March 31. This will ensure that all projects currently in application will continue to be processed and all genres will receive equitable treatment.
The following demonstrates the true impact on the CTF's funding due to the reduction in funding by Shaw and Videotron: for fiscal 2006-2007 the total funding reduction is $24,900,000, net funding reduction, after recoupment revenues, unused BPE funds and reserves, is $10 million. For fiscal 2007-2008 the funding reduction from Shaw and Videotron will be $62,600,000 plus $10 million in reduced interest revenue and deficit recovery costs, for a total shortfall of $72,600,000.
This reduction of $72.6 million, representing a decrease of 27% from the CTF's 2006-2007 budget level, is estimated to result in a loss of $165 million in production volume in the English market and of $81 million in the French market, for a total loss of $246 million. This will lead to the loss of several thousand jobs in all sectors of the film and television production industry.