CanCon basics from an expert wonk

A few podcasts ago, cohost Anthony Marco and I grilled Canadian media policy wonk Kelly Lynne Ashton, who has been my resource for a lot of “is it CanCon or not?” type of questions. She answered a lot of questions around funding, coproductions, the CRTC and vertical integration that keep popping up, so I thought I’d include a partial transcript in a post for easier reference for all. I also thought I’d get Rachel Langer to help transcribe (thanks Rachel!)

On Vertical Integration Re: The Bell/Astral Merger
We’ve got the vertical integration policy which encouraged cable companies owning broadcasters owning prod cos owning internet service providers. Over the years the commission encouraged that under the idea that bigger is better and these companies needed to be bigger to be able to compete international and be stronger Canadian companies.

The market has shown that big companies have evolved. Whether we agree with it or not, the horse is out of the barn. They’re big companies. They own almost everything. We do need competition, we need to have different options and voices, but one of the problems is that Astral wants to sell. We can’t make them continue business.

Regarding Our Blended System
We are completely muddled. Every cable company argues out of both sides of the mouth. “It’s a free market, you have to let us do what we want to do” then “but we survive because of regulation”. So we are blended. Everybody knows it’s a blended system, but when you’re standing in front of the commission [CRTC], you argue out of one side of the mouth or the other…frequently at the same time.

On Mandatory Carriage
It’s the individual broadcasters who are looking for mandatory carriage. Other than Sun News, it’s Vision, Starlight, APTN — these are small guys and they’re looking for mandatory carriage to have a secure revenue stream, because they’re niche broadcasters, for the most part.

As for Sun News, their arguments aren’t very strong. They’re a news service. News was released as a competitive, it’s not a protected genre. For mandatory carriage there is a very high standard that you need to meet of exceptionality. You have to be an exceptional service that is necessary to Canadians, and there are all the other news services.

On the Power of the CRTC
The CRTC is growling more than they used to. They have the same tools that they’ve ever had. They seem to be much more willing to use those tools, and be aggressive with those tools. [In terms of enforcing consequences] the big hit is pulling your license, but they can also issue a short license. With Shaw Cable, they didn’t fulfill a number of their obligations, and they didn’t do the reporting they were supposed to do and they were playing games with the services they didn’t like, so they got a short license – instead of the usual 7 years, they got 3.

It’s a real pain [for broadcasters]. Those license renewal hears are huge. The amount of staff you have to put in, the amount of money and projections and studies– it’s actually quite costly to have to go through that process, so to have to go through it twice in the normal period you were expecting, it’s a real wakeup call to any licensee.

On OWN Network operating under the original licence’s educational mandate
To bring it back to Oprah Winfrey [and the OWN Network] the commission is doing something it always had the power to do, but wasn’t willing to do and that is a mandatory order. That is telling a licensee “you have to do this and we are filing the order with the federal court.” The federal court has much greater penalties than anything the CRTC has. They can fine, they can seize assets, they can seize personal assets of the directors of the company.

On Network Reporting Obligations
[Networks] DO have annual reports, but all that info is deemed to be confidential so the commission aggregates it. So what the stakeholders, the unions and guilds are trying to do is to get that info a little bit disaggregated so you can actually have SOME idea whether say Corus or Shaw or Bell is living up to their expectations as a group.

You can’t get [stats for] one channel. What is publicly available to everyone in annual reports — “this is what is spent by Canadian broadcasters.” They argue the info is competitive between one service and another. I’m not going to defend it, I’m just saying this is the game we have to play.

On the “Confidentiality” of CanCon Reporting Data
The CRTC says that they’re privy to all the information and we have to trust them, that they’re reviewing it all. We do know that they go back. We hear the commission being frustrated and saying “You didn’t meet your CanCon regulations”. … We want to encourage the current commission’s toughness. It’s gotten more and more opaque. We used to get data whenever a company was buying another company (like a Bell/Astral), we used to get a lot of financials but then they just started calling it confidential.

On Determining CanCon Requirements for Productions and Co-Productions
It’s not that complicated. [For measuring CanCon] first we’ve got CAVCO. It’s a point system. You have to have 6/10 points for any show to be Canadian. That’s your writer, director, top two lead actors, composer, designer, editor. Plus on top of that the producer has to be Canadian and own all the copyright, and you have to have spent 75% of the money in Canada. So that’s a basic outline [for a completely Canadian show] and one of the writer or director has to be Canadian.

The funding system is set up for 8/10 point productions. Those are the truly Canadian shows. Flashpoint is 10/10. (Any Canadian Media Fund show) is 10/10. There are some exceptions – you can bring in an American lead if you apply for certain exemptions, but generally [the CMF funded shows] are 10/10.

Co-Productions: Two countries have agreed that when they work together the resulting product will qualify as domestic under each country’s rules. So for example, a Canada-UK production. You’ve got UK leads, UK writer, UK talent, but it still qualifies as a 10/10 Canadian production. It gets complicated here. It applies for broadcast [but not necessarily funding]. It depends on the size of your budget, whether it’s worth going to CMF. A lot of the copros don’t, but I think Borgias did.

There is a minimum level of Canadian involvement [required]. So first off, when you’re talking about copros, the idea is that overall your minorities and majorities are going to balance out, so other countries are not just using Canada as a source of financing. That’s the idea. I myself have looked at the stats, and overall they balance. But overall means feature films, it means docs, it means animation – a LOT of animation is done through copros. Overall it balances. Where there’s a problem is really prime time drama.

We started to bring to people’s attention that while the system worked overall it was NOT working with prime time drama – there was an imbalance there. When you’ve got excessive minorities (and you can name them all, The Tudors, The Borgias, The Pillers of the Earth) they’re using Canada for post-production, that’s how they’re getting their minimum. The minimum you have to do with the minorities is 20% of your budget. They’ll have a couple actors who are killed off early. Name actors with red shirts. ;)

On Canadian Awards for Copros
First off, do we want to be known as a country of post production? I agree that composers and post-houses and editors are important but they’re not the only part of our sector that we need to be supporting. When we celebrate Canadian, do we celebrate minority co-prods? I was offended when Telefilm said “We do such great Canadian productions like The Borgias”. … Some of the other countries have separate categories for international productions.

Regarding American Shows that Shoot in Canada
They get production service tax credits. So they do get funding from the government, but the benefit of that is that they employ crews. They don’t [count as CanCon].

On US-Canadian Co-Ventures
A co-venture is a very definite term. …Defying Gravity was a co-venture. I believe it was a co-venture because it didn’t have a US broadcaster. It had an American producer. It was a co-venture between a Canadian producer and a US producer to allow the US producer to have creative say.

A production with an American pre-sale (like Rookie Blue)… they don’t own a piece, there’s no need for a formal designation.

On the Public’s Understanding of Canadian Shows
I honestly don’t think that many Canadians think that much about whether a show is Canadian or not. If they find out it’s Canadian then they’re pleased and they’re happy and they’re proud. I do think that people are proud of the fact that …we have a really strong lineup right now. When you tell people that these shows are Canadian they’re surprised because they thought they didn’t like Canadian TV.

For more from Kelly Lynne Ashton, listen to the podcast or read her wonktastic blog.