Cardinal is a serialised drama based on the critically acclaimed novels by Giles Blunt.

Management Discussion and Analysis

The review of the Corporation’s financial position and operating results should be read in conjunction with the audited financial statements on the following pages.  The results for 2016-2017 cover the period from April 1, 2016 to March 31, 2017 while the comparative numbers are for the period from April 1, 2015 to March 31, 2016.

Results of Operations


The Corporation’s revenue includes amounts from the broadcasting distribution undertakings (BDUs), the federal government through the Department of Canadian Heritage (Department), recoupment of production investments, repayments of advances, interest, and tangible benefits. Total revenue decreased 2.7% in the fiscal year, from $379.4M in 2015-2016 to $369.3M in 2016-2017. 

Contributions from BDUs decreased 5.8% or $13.4M in the fiscal year, from $229.9M in 2015-2016 to $216.5M in 2016-2017.  

The federal government funding of $134.1M in 2016-2017 was consistent with 2015-2016. 

Revenue from the recoupment of production investments decreased 1.1% or $0.1M in the fiscal year, from $7.7M in 2015-2016 to $7.6M in 2016-2017. Revenue from repayment of advances increased 32.0% or $1.5M in the fiscal year, from $4.7M in 2015-2016 to $6.2M in 2016-2017.

Interest increased by 10.0% or $0.2M in the fiscal year, from $2.1M in 2015-2016 to $2.3M in 2016-2017.  

CMF administers a tangible benefit program for Corus Entertainment, $1.1M was recognized as revenue in 2016-2017.  An additional $1.4M in tangible benefits flowed directly to the CMF program under the revised CRTC Tangible Benefits Policy.


Total expenses decreased 2.2% or $8.7M in the fiscal year, from $387.3 in 2015-2016 to $378.6M in 2016-2017.  Program commitments represented 94.8% of total expenses in the fiscal year, a decrease from 95.2% of total expenses in 2015-2016.  The balance of the total expenses includes industry partnerships, general and administrative, program administration, and amortization.

Under the terms of the Contribution Agreement with the Department of Canadian Heritage, CMF’s total administrative expenses (excluding industry partnerships) are capped at 6.0% of total revenue.  In the fiscal year, the total administrative expenses were $18.3M or 5.0% of total revenue, compared to 4.5% in 2015-2016.

Program Commitments

Total program commitments decreased 2.8% or $10.4M in the fiscal year, from $368.5M in 2015-2016 to $358.1M in 2016-2017. The CMF provides financial contributions to Canadian digital media and television producers primarily through two program streams: Convergent and Experimental.  The Convergent Stream program commitments decreased by $9.4M, from $329.2M in 2015-2016 to $319.8M in 2016-2017.  The Experimental Stream program commitments of $41.0M were consistent with 2015-2016. The program commitments for the international incentives were $0.8M and prior years’ negative adjustments of about $3.5M were also reflected in the fiscal year.

Program Administration Expenses

The total program administration expenses increased $1.1M or 10.3% in the fiscal year, from $10.6M in 2015-2016 to $11.7M in 2016-2017.  The CMF outsourced the program administration activities to Telefilm Canada through a services agreement, their service fee increased by $1.0M in the fiscal year from $10.4M in 2015-2016 to $11.4M in 2016-2017.  The increase is primarily due to the development of the new program administration system. Other program administration expenses in the fiscal year increased $0.1M in 2016-2017.  

Industry Partnerships

Industry partnerships of $1.2M in 2016-2017 represented a decrease of 1.4% from 2015-2016. The CMF continued to partner with television and digital media events in Canada and internationally.

General and Administrative Expenses

General and administrative expenses increased by 3.0% or $0.2M in the fiscal year, from $6.3M in 2015-2016 to $6.5M in 2016-2017. There were increases in compensation and consulting of $0.2M and marketing and communications of $0.3M, offset by savings of $0.3M in risk management, reporting and overhead. 

Cash Flow and Reserves

BDU contributions are received monthly; the CMF invoices the Department of Canadian Heritage monthly in arrears based on payments to producers.  Repayment of advances are received throughout the year and the majority of recoupment of production investments is received twice a year.

The CMF invests any funds not required for operations; investments are in federal treasury bills, provincial notes, GIC’s, term deposits, and asset-backed term notes.  The Corporation’s investments are drawn on as required to fund program contractual obligations as they come due.

The CMF maintains unrestricted and restricted reserves.  The funds in the reserves are accumulated over time through the excess of revenue over expenses and are used to support future years’ programs.  

At the end of the fiscal year, there was $61.0M in restricted reserves and $7.7M unrestricted.  At the end of 2015-2016, there was $73.3M in restricted reserves and $5.0M unrestricted.

The restricted reserves at March 31, 2017 include amounts for the settlement of expenses in the event of dissolution of the CMF of $5.0M, $18.0M to support the 2017-2018 program budget, and a $38.0M program funding contingency reserve.    

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Forward Looking

The CMF estimates revenue based on contributions from the Department; Canada’s cable, satellite and IPTV distributors; and recoupment and repayment revenues from funded productions. In 2017-2018, it is assumed that there will be a stable contribution from the Government of Canada and an expected decline in contributions from Broadcast Distribution Undertakings.

Based on the revenue estimates, the CMF determines a program budget.  The 2017-2018 CMF program budget is $348.3M, $301.7M for the Convergent Stream, $41.1M for the Experimental Stream, $2.5M for international incentives, $2.5M for an export incentive and $0.5M for gender balance initiatives.

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