Forty years ago, in an era remembered for Expo '67, Trudeaumania and the rise of Canadian nationalism, the federal Liberals decided to fund a new organization designed to "foster and promote the development of a feature film industry in Canada."

That institution, the Canadian Film Development Corporation, was handed the responsibility of administering a $10-million fund.  

Now, 40 years later, that organization is Telefilm Canada, an entity that, in its last fiscal year, invested around $200 million in Canadian film, TV and new media productions. Both Telefilm and producers nationwide have come a long way.

As Telefilm celebrates its 40th anniversary (March 3 is the official birthday), what is most surprising is how much remains the same. Certainly the money being spent today on film and TV is far more than what the CFDC could have imagined back in that simpler, more idealistic time, when, as a Crown corporation, the belief was that it could operate on a one-time appropriation of $10 million, with all future funding coming from recoupment. But the issues that challenge Telefilm remain the same.

It's a government agency mandated to simultaneously pursue cultural and business goals. Critics who feel that the institution should be working more towards either artistic aspirations or commercial ends always question the success it has achieved. After four decades, Telefilm still must satisfy the needs of corporate media plutocrats, guild activists, idealistic film enthusiasts, Quebec nationalists and federal pragmatists.

It's a tough balancing act - one that former agency bosses from Michael Spencer to André Lamy, François Macerola and current executive director Wayne Clarkson have been able to handle through personal style and professional expertise.

One of the major sources of pride at Telefilm is simultaneously a cause for concern. Quebec cinema has performed well, but has significantly outstripped the box-office results for English-Canadian films.

Spencer, the CFDC's first head, recalls, "The Montreal [producers] were expecting the CFDC to happen, and they had all their projects ready to go as soon as the corporation was ready to open its doors. The CFDC provided funding for a number of Quebec projects, such as Le vrai nature de Bernadette, a comedy hit by Gilles Carle. Every film had to have a distribution deal, and we could easily do that in Quebec, because they were crazily interested in showing their own movies."

In English Canada, he adds, it's taking far longer.

"The whole idea of English-Canadians making commercial entertainment immediately ran into a huge roadblock because the [exhibitors] weren't prepared to cooperate. We were always arguing with Famous Players and Odeon to let Canadian features play in their theaters. They weren't in favor of helping us. The Americans had already bought our theater chains by that point."

English-Canadian cinema still hasn't caught up with that of Quebec. In Telefilm's last fiscal, Quebec films claimed a 26.6% market share, with C.R.A.Z.Y., the biggest hit, taking in more than $6 million, and a dozen French titles grossing at least $1 million.

By contrast, the only film produced out of English Canada to cross the $1-million barrier was Water, Deepa Mehta's Academy Award-nominated drama that isn't in English, but rather in Hindi. English-Canadian cinema could only muster a 1.1% market share, down from 1.6% in the previous cycle.

Yet Telefilm is mandated to spend only one-third of its Canada Feature Film Fund in Quebec, with the other two-thirds being spent in the poorer-performing Anglo market. And the issues associated with movie investment extend beyond solely linguistic considerations.

Robert Lantos, English Canada's most high-profile producer, is blunt in his assessment of what has historically ailed the organization and the industry.

"For years, Telefilm ignored commercial success in their concern for political correctness and regional and gender balance, but that kind of approach doesn't work," he says. "There should be universal commitment to one thing - excellence. It's pretty tough to achieve success. Most films don't work. If you don't focus on excellence, and instead pay homage to utterly disruptive priorities, which Canadian agencies used to promote, you will only encourage producers not to produce, but simply to hit the marks set out for them by the government."

Yet Lantos sounds hopeful about Telefilm's current administration.

"There's a recognition that we have to get out of the stupor that English-Canadian films have been in for a decade," he says.

No doubt Lantos is responding to the initiatives overseen by the dynamic Clarkson, who has formed working groups with distributors, producers, broadcasters, unions and guilds to examine problems plaguing the industry.

One of the first steps is to re-evaluate the CFFF, created by Canadian Heritage and launched in 2001.

"Just like a car, it doesn't just need a tune-up - it needs a full [overhaul]," Clarkson admits.

Through the CFFF, Telefilm disburses around $75 million annually toward feature films. On average, 23 English-language and 15 Quebecois features are funded per year. In all cases, Telefilm takes a minority equity interest in the films, though amounts disbursed can near 50%.

Telefilm funds films submitted only by recognized producers, and a distributor must be attached. Money from the private sector, including foreign investors, international sales agents, distributors, producers and tax credits are utilized in order for Canadian producers to achieve the majority position on a film. Telefilm disburses money in three stages - development, packaging and production. It is only in the final stage that the majority of funds are released.