CBC president and chief executive Robert Rabinovitch came out in defence of the embattled Canadian Television Fund on Thursday, saying there is "no good reason to get rid of it."

Speaking before a Commons heritage committee, Rabinovitch said the current crisis over the CTF has been precipitated by two cable giants who reaped an enormous financial windfall from the money they were permitted to keep when the CTF was established.

Robert Rabinovitch, shown here in 2004, told the heritage committee that CBC programming gets 37 per cent of CTF funding because the public broadcaster allocates prime time air slots for Canadian shows.
(CBC)

A cable industry newsletter declared the CTF "dead" after Shaw Communications of Calgary and Vidéotron of Quebec withdrew their funding from the television production fund, which has an annual budget of $250 million.

"Some have said the CTF is dead. That is not true," Rabinovitch said. "Canadian programming is up in all genres in both languages."

"The CBC has moved away from an emphasis on in-house production and is contracting out its production to independent producers," he told the committee. "As a result, the Canadian television production industry is thriving."

The CTF has been successful in delivering both audiences and quality programming, such as Rick Mercer Report and Little Mosque on the Prairie, he said.

On Tuesday, Heritage Minister Bev Oda and the Canadian Radio-television and Telecommunications Commission, the federal regulator that licenses the cable companies, said they would take steps to make the cable firms play by the rules.

"These are rules they agreed to in return for an increase in cable rates that amounted to double their contribution to the CTF," Rabinovitch said.

Richard Stursberg, executive vice-president of CBC English Television, explained that the cable firms actually suggested creating the CTF in return for higher cable rates.

"In 1993, cable rates were supposed to go down," Stursberg said. Instead of giving money to consumers, the cable companies brokered a deal with the CRTC to keep half the money and give half of it to a fund for creating Canadian programming.

He estimates they have reaped $750 million to $1 billion in additional profits as a result of this deal.

At no point did the cable firms get less out of the production fund than they put in, he said. Vidéotron, for example, got $18 million in programming in 2005, but put $15 million into the CTF, Stursberg said.

Rabinovitch agreed with the cable firms' position that CTF funding should be extended to new technologies, saying the CBC also is developing new media platforms.

But reforms to extend the CTF's mandate into new areas can be worked out by discussions between the CTF, the production industry, cable and satellite broadcasters, he said, pointing out that cable firms have four seats on the board of the CTF.

Rabinovitch also addressed one of the major complaints Shaw and Vidéotron have put forward in the past four weeks — that 37 per cent of funding from the CTF goes to CBC programming.

The money actually goes to independent producers, who pitch their shows to the public broadcaster, he said.

"That policy recognizes that the CBC is the only network with the shelf space to offer Canadian programming in the time Canadians are actually watching, in prime time," he said. He pointed out that most other broadcasters offer exclusively foreign-made programs in prime time.

CTF is one of the "pillars" of CBC programming he said, and pays for drama, documentary, children's and arts programming.

"It is an essential part of our mandate to offer Canadians Canadian programming."