Thank you, Pamela.
As the standing committee is aware, two Canadian distributors, Shaw and Vidéotron, recently stopped making their payments to the CTF. We recognize that Vidéotron has undertaken to resume making its payments to the fund. Shaw, however, has not.
CRTC regulations require medium and large BDUs to contribute a portion of their revenues to Canadian programming. The regulations also require that 80% of those revenues be directed to the CTF, and CRTC circular 426 states that those CTF payments must be made on a monthly basis.
Typically, the CTF makes its funding decisions in the spring of each year. If Shaw is permitted to continue to withhold its share of funding, the CTF will likely adjust its budget to exclude Shaw's expected contributions when they make their funding decisions in the spring of 2007.
We estimate the withdrawal of Shaw's contribution to the fund to be about $56 million. However, the impact will be much greater, because $56 million would trigger over $130 million in additional production funding from other sources. Consequently, if the CTF budget is reduced due to Shaw's nonpayment, there will be a total loss to the Canadian production sector of about $185 million in 2007-08. This is an exorbitant amount of money that will cause production activity in Canada to be severely diminished, a loss of thousands of jobs, and a drastically reduced roster of original Canadian programs available for broadcast. Indeed, the livelihoods of thousands of Canadians who work in the creative sector are at stake here.
We note for the record that if Vidéotron had continued to withhold its CTF payments of about $50 million, there would have been an additional loss to the system of over $35 million.
So what can be done? It is crucial that the Canadian government, parliamentarians, and the CRTC take a leadership role in ensuring the continued existence of the CTF. They should also take the lead in ensuring that all Canadian BDUs that come within the application of sections 29 and 44 of the BDU regulations comply with those provisions and make their payments to the CTF.
The broadcasting policy for Canada set out in the Broadcasting Act requires that each component of the Canadian broadcasting system contribute in an appropriate manner to the creation and presentation of Canadian programming. Since BDUs do not create programming, contributing to the CTF ensures that this very important public policy objective is attained.
I'll now talk to you about the DGC's recommended action plan to address this current crisis with the CTF.
With regard to the CRTC, the DGC urges the commission to take whatever measures are necessary to enforce circular 426 as soon as possible and require Shaw to make its payments to the fund on a monthly basis. We also urge the CRTC to amend any of Shaw's licences that were renewed more than five years ago to require the licensees to make their payments to the CTF each month.
Additionally, the DGC urges the CRTC to immediately start the process to amend the BDU regulations in order to enshrine the requirement that distributors make their payments to the CTF monthly.