In an effort to encourage the development of Canadian programming that's more accessible to the iPod generation, the federal government is doing away with the controversial Canadian Television Fund.

The fund, which is the source of taxpayer subsidies to the Canadian television production industry, will be combined with the Canada New Media Fund, which subsidizes digital media development starting April 1, 2010.

The government will invest $134.7 million annually in the new program, called the Canada Media Fund, Heritage Minister James Moore said at a press conference today on the Toronto set of the CTV police drama series, Flashpoint.

"We are levelling the playing field at a time when the industry is undergoing structural change," Moore said.

"The eligibility for funding for broadcaster-affiliated production will be expanded, and broadcaster in-house production will be allowed ... including provincial educational broadcasters and CBC/Radio-Canada."

The emphasis of the new broadcast policy will be on drama, comedy, and children's programming, and will favour productions developed for distribution platforms other than prime-time television – the Internet and mobile telecommunications devices, said Moore, who admitted he watches "more television programs on my iPod than on regular TV."

The new fund will also support documentaries and variety and performing arts programming that can demonstrate that the market alone would not support their creation.

"The realigned fund will favour projects produced in high definition and those that have achieved and demonstrated the most potential to achieve success, in terms of audience and return on investment," Moore said

"Applicants will be required to make their projects available across a minimum of two distribution platforms, including television."

The establishment of the new fund is a clear rejection of last summer's recommendation by the broadcasting industry czar, the Canadian Radio-television Telecommunications Commission, that the $300-million Canadian Television Fund be split into two funding streams, one for private networks, the other for non-profit broadcasters.