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                       SUBJECT / SUJET:


HELD AT:                                TENUE À:

Conference Centre                       Centre des conférences
Outaouais Room                          Salle Outaouais
Place du Portage                        Place du Portage
Phase IV                                Phase IV
Hull, Quebec                            Hull (Québec)

October 2, 1998                         2 octobre 1998

                           Volume  8
tel: 613-521-0703          StenoTran         fax: 613-521-7668



Afin de rencontrer les exigences de la Loi sur les langues
officielles, les procès-verbaux pour le Conseil seront
bilingues en ce qui a trait à la page couverture, la liste des
membres et du personnel du CRTC participant à l'audience
publique ainsi que la table des matières.

Toutefois, la publication susmentionnée est un compte rendu
textuel des délibérations et, en tant que tel, est enregistrée
et transcrite dans l'une ou l'autre des deux langues
officielles, compte tenu de la langue utilisée par le
participant à l'audience publique.


                 Canadian Radio-television and
                 Telecommunications Commission

              Conseil de la radiodiffusion et des
                télécommunications canadiennes

                  Transcript / Transcription

              Public Hearing / Audience publique

              Canadian Television Policy Review /
               Examen des politiques du Conseil
             relatives à la télévision canadienne


Andrée Wylie            Chairperson / Présidente
                        Vice-Chairperson, Radio-
                        television / Vice-
                        présidente, Radiodiffusion
Joan Pennefather        Commissioner / Conseillère
Andrew Cardozo          Commissioner / Conseiller
Martha Wilson           Commissioner / Conseillère
David McKendry          Commissioner / Conseiller


Jean-Pierre Blais       Commission Counsel /
                        Avocat du Conseil
Margot Patterson        Articling Student /
Carole Bénard /         Secretaries/Secrétaires
Diane Santerre
Nick Ketchum            Hearing Manager / Gérant de

HELD AT:                TENUE À:

Conference Centre       Centre des conférences
Outaouais Room          Salle Outaouais
Place du Portage        Place du Portage
Phase IV                Phase IV
Hull, Quebec            Hull (Québec)

October 2, 1998         2 octobre 1998

                           Volume  8

Presentation by / Présentation par:

Shaw Communications Inc.                                  2280

Pelmorex Inc.                                             2380

Telefilm Canada                                           2431

WGC, Writers Guild of Canada                              2500

Canada Television and Cable Production Fund /             2532
Le fonds de télévision et de câblodistribution
pour la production d'émissions canadiennes

The Writers' Union of Canada                              2605

SARDeC, Société des Auteurs, Recherchistes,               2625
Documentalistes et Compositeurs



                           Volume 7
             October 1, 1998 / Le 1er octobre 1998

Page    Lines / 

2010    23-24   "les trois tests"
                should read / devrait se lire



 1                                Hull, Quebec / Hull (Québec)
 2     --- Upon resuming on Friday, October 2, 1998,
 3         at 0904 / L'audience reprend le vendredi
 4         2 octobre 1998, à 0904
 5  10671                THE CHAIRPERSON:  Good morning.
 6  10672                Madam Secretary?
 7  10673                MS BÉNARD:  Thank you, Madam Chair.
 8  10674                The first presentation will be by
 9     Shaw Communications Inc. and I would invite Mr. Shaw to
10     introduce his colleagues.
11  10675                THE CHAIRPERSON:  Good morning.
13  10676                MR. SHAW:  Good morning.
14  10677                Madam Chair and Members of the
15     Commission, I am Jim Shaw, President of Shaw
16     Communications, and beside me is John Cassaday,
17     President and Chief Executive Officer of Shaw Media. 
18     With us today are Ken Stein, Senior Vice-President,
19     Corporate and Regulatory Affairs, Shaw Communications;
20     Paul Robertson, President of YTV; and Susan Ross,
21     General Manager of Treehouse TV.
22  10678                Behind me are Katherine Browne, Vice-
23     President of Finance for YTV; Peter Moss, Vice-
24     President of Programming and Production, YTV; Sheldon
25     Teicher, Vice-President, Corporate Development, YTV;


 1     Mary Wilson, Director of Broadcasting, Regulation for
 2     Shaw; and Vicki Dalziel, General Manager, Country Music
 3     Television.
 4  10679                We are very pleased to be here and
 5     have the opportunity to participate in such a landmark
 6     hearing.  As many have pointed out, Canadian Television
 7     is a remarkable success story, both in culture and in
 8     economic terms.  The regulatory direction the CRTC
 9     chooses as a result of this proceeding will have a
10     profound influence on the future of Canadian television
11     and we hope our appearance here today will be of some
12     help to you in your deliberations.
13  10680                Although the focus of this hearing is
14     on content rather than distribution, we are all aware
15     of how interdependent these two elements are.  The best
16     Canadian programming will not succeed unless it is
17     effectively distributed to Canadian viewers.  Our group
18     represents two very important elements of this system,
19     specialty programming services and broadcast
20     distribution systems.  Our objective is to be
21     absolutely first class in both areas.
22  10681                Over the years it has been our strong
23     belief that we must develop and provide programming of
24     relevance to the communities we serve.  Our community
25     channel known as NowTV uses video, audio and the


 1     Internet to provide our subscribers with a full range
 2     of programs and information that is relevant directly
 3     to the community therein.  We are also deeply committed
 4     to investing in quality programming for children
 5     through the Shaw Children's Programming Initiative or
 6     SCPI.  Over the past five years, we have committed
 7     nearly $12.3 million.
 8  10682                I will now ask John Cassaday to speak
 9     to you about our perspectives on some of the content
10     issues you are considering and I will conclude with
11     some brief remarks on distribution.
12  10683                John?
13  10684                MR. CASSADAY:  Thank you, Jim.
14  10685                Shaw is committed to the development
15     of specialty television in Canada.  We believe
16     specialty television is meeting the test of supporting
17     Canadian content.  We believe the system has been well
18     served by the diversity of programming introduced by
19     specialty services and by the current regulatory
20     approach of setting individual conditions of licence
21     for each service, which recognize the requirements of a
22     given niche in a competitive and fragmented
23     marketplace.  We believe there is still potential for
24     growth in specialty television on the strength of
25     consumer interest and new capacity.


 1  10686                In our written comments last June
 2     30th we made a number of recommendations responding to
 3     the issues raised in Public Notice CRTC 1998-44. 
 4     Recognizing the limited time available today, we will
 5     limit our remarks to children's programming, an area of
 6     long-standing interest to Shaw, and some general
 7     recommendations that we hope will be helpful in a
 8     broader sense.
 9  10687                The Canadian children's programming
10     sector has experienced impressive growth over the last
11     few years.  The combination of high production values
12     and our non-violent presentation has made Canadian
13     programs like "Theodore Tugboat", "Whimzie's House" and
14     "Groundling Marsh" domestic and international hits. 
15     The regulatory and financial support system in Canada
16     is working to provide an environment that supports this
17     growth.  Without the regulatory and financial support
18     systems, the phenomenal growth of children's
19     programming will diminish.
20  10688                YTV has contributed over $70 million
21     directly to the production of Canadian content
22     programming, which has enabled budgets exceeding $500
23     million over its 10-year history.  We have sought a
24     diversity of voices from Salter Street in Nova Scotia,
25     Téléaction in Quebec City, Credo in Manitoba, Mind's


 1     Eye in Saskatchewan and Mainframe in British Columbia,
 2     not to mention our long association with the largest
 3     companies in our industry like NELVANA, CINAR,
 4     Alliance, Atlantis and smaller companies like
 5     Breakthrough, Cambium and Decode.
 6  10689                We have commissioned programs in
 7     every genre: puppets, live action drama and animation,
 8     both in traditional form and in computer-generated
 9     imaging, and this year we have commissioned more than
10     145 hours of new production from the independent
11     sector.  Treehouse TV, which has just launched, has
12     already commissioned three new Canadian television
13     series.
14  10690                The Canadian Association of
15     Broadcasters reports that Canadian viewers watch
16     Canadian programming 32 per cent of the time.  Canadian
17     drama accounts for only 3.1 per cent of this viewing. 
18     We are very proud to say that on YTV Canadian kids
19     watch Canadian programming 37 per cent of the time and
20     the programs are almost exclusively in the drama
21     category.  Kids are watching lots of terrific high-
22     quality Canadian content.
23  10691                We firmly believe in the need to
24     provide more Canadian programs, of improving the
25     quality of Canadian programs and of doing so in a way


 1     that is profitable for both broadcasters and producers. 
 2     There are a number of points that we would like to make
 3     which we believe contribute to the continued growth and
 4     success of Canadian programming.
 5  10692                First of all, in the area of
 6     children's programming, we believe continued
 7     recognition of children's programming as an under-
 8     represented category is essential.  The importance of
 9     public funding in making kids' programs cannot be
10     overstated.
11  10693                Next, we believe we must take care in
12     how we apply the test of "distinctively Canadian" to
13     children's programs.  The exhilarating freedom of a
14     child's imagination should be stimulated by a variety
15     of programs available.  Programs that espouse
16     distinctively Canadian values like "Arthur", "Little
17     Bear" or "Shirley Holmes" ought to be included in the
18     "distinctively Canadian" category.
19  10694                Next, given the high demand for
20     funding assistance and the high cost of adult drama
21     series, the Commission should recommend that the CTF
22     implement policies that will guarantee the availability
23     of existing public funds for kids' programming, both on
24     the EIP and LFP sides, and, if it all possible, to
25     increase the amount.  Over the past two years,


 1     approximately 30 per cent of the private broadcaster
 2     envelope has been directed to children's programming.
 3  10695                Next, we believe the CRTC should
 4     encourage more shelf space for Canadian children's
 5     programs.  All broadcast sectors should participate in
 6     kids' programs, public and private, conventional,
 7     specialty and pay TV.  We believe the Commission should
 8     consider loosening the first-run restrictions to
 9     encourage the sharing of broadcast windows between
10     conventional, both public and private, television and
11     specialty.
12  10696                Speaking now in terms of general
13     comments, we believe there should be encouragement to
14     promote Canadian programs and that these investments
15     should qualify as eligible Canadian program
16     expenditures.  Finally, we believe the CRTC should
17     continue the practice of setting the obligations for
18     specialty channels individually.  Each specialty
19     channel has a unique opportunity to support Canadian
20     programming in the fashion best suited to its genre and
21     audience.
22  10697                We are excited about the future of
23     broadcasting in Canada.  Those of us who are privileged
24     to work in the Canadian broadcasting system -- CRTC,
25     funding agencies, producers and broadcasters -- must 


 1     all continue to contribute to the best of our abilities
 2     to sustain the vibrancy of Canadian programming and
 3     serve our ultimate constituents, the Canadian viewers.
 4  10698                MR. SHAW:  Turning to distribution,
 5     Shaw has been pursuing a path set by the Commission in
 6     its 1993 structural hearing by converting our cable
 7     systems to a fully digital infrastructure.  We believe
 8     this conversion is essential both for the growth of the
 9     Canadian program production industry and our
10     distribution business.  As a sign of how important we
11     think this initiative is, we are spending more than
12     $200 million a year, almost one-third of our revenues,
13     to upgrade our distribution networks.  Of this, more
14     than $50 million is specifically for converting to
15     digital.
16  10699                There are three key benefits for
17     Canadian programming and consumers:  Digital conversion
18     opens up much needed channel capacity for new Canadian
19     programming services; the technology allows for much
20     greater flexibility in packaging services according to
21     individual subscriber choices; a digital platform
22     facilitates the provision of new media programming, a
23     new frontier of vast opportunity for all players in the
24     Canadian programming production industry.
25  10700                It is essential that Canadians


 1     continue to be world leaders in developing technology. 
 2     Digital conversion of the Canadian broadcasting system
 3     is just one of the initiatives we must pursue. 
 4     Developments in technology encourage new content forms
 5     and innovative ways of getting information to the
 6     public.  It will also ensure distribution of this new
 7     media content to a more sophisticated consumer of
 8     Canadian information and entertainment products.
 9  10701                That concludes our comments today,
10     Madam Chair.  We would be pleased to answer any
11     questions.
12                                                        0915
13  10702                THE CHAIRPERSON:  Thank you.
14  10703                Good morning, ladies and gentlemen.
15  10704                We regret that you were kept in
16     Ottawa last night, but I think we will have a better
17     chance to hear you today than if we had tried to finish
18     last night.  I realize it must have been a bit of a
19     scramble to get everybody organized.
20  10705                In this particular proceeding and in
21     the town hall meeting we had in June, we have had a lot
22     of representations to the effect that the networks are
23     getting ever larger and are abandoning local
24     programming.
25  10706                We certainly congratulate you on your


 1     community channel, but what I find intriguing is the
 2     suggestion that the community channel can perhaps not
 3     replace local programming on television stations, but
 4     at least you say that if the Commission were to decide
 5     to impose or continue to require a certain level of
 6     local programming on over-the-air stations, in doing
 7     that it should -- your words are -- I'm looking at page
 8     6:
 9                            "In assessing whether local
10                            broadcasters should have
11                            increased responsibilities
12                            imposed for local coverage, the
13                            CRTC should take into account
14                            the important role community
15                            channels are playing in this
16                            respect."
17  10707                In your Executive Summary, you say at
18     page ii at the top of the page:
19                            "-- the CRTC should assess the
20                            responsibility of conventional
21                            television for local coverage in
22                            light of the important role
23                            played by the community channel
24                            in this respect."
25  10708                I find that intriguing.  Is the


 1     suggestion that the responsibility for local coverage
 2     and local programming, if it were to decided that there
 3     has to be more or the level has to be maintained, can
 4     be replaced by the community channel?
 5  10709                MR. SHAW:  Well, I guess that when we
 6     look at our new community channels in this, they evolve
 7     with the changing consumer demands we have out there
 8     today.  The community channel is taking more of a
 9     grassroots relationship role with the communities we
10     are in such as tying in with the city to inform people
11     of information on stuff that really wouldn't even be
12     considered for commercial television like how your
13     child would sign up for swimming lessons and how this
14     would work.
15  10710                There's a lot of interactive ability
16     on the community channel now with the Internet tied in. 
17     Their focus is a lot different focus than on the
18     conventional side.
19  10711                We are seeing these new community
20     channels filling a broader role that is directly
21     focused on the community.
22  10712                THE CHAIRPERSON:  But we are looking
23     today at what should the regulatory framework or the
24     responsibility of over-the-air conventional stations
25     be.  You seem to be suggesting that that should be done


 1     by reference to what the particular community is
 2     getting via cable.
 3  10713                The reason I am asking is 25 per cent
 4     of Canadians are not connected to cable.  The community
 5     channel is not regulated.  It has no logs.  There is no
 6     requirement for doing programming that is to that level
 7     so it can be dropped during a licence term.
 8  10714                I find intriguing the idea that when
 9     we look at a conventional over-the-air station in any
10     given community, we should examine, and I am not quite
11     sure by what mechanism, what the community channel is
12     doing and, based on that, decide what requirements
13     should be imposed on the television station.
14  10715                I'm not questioning the level of
15     services offering and we certainly congratulate you on
16     that.  Because of the process we are in, this
17     suggestion which I find intriguing, I would like you to
18     explain this position.  For example, does it mean we
19     should keep logs, we should measure what's done in each
20     community.  Are the community channels then going to
21     ask to do advertising, which is done in local
22     programming by the conventional station.
23  10716                How would we get assurances that this
24     presumed void is filled on a continuing basis by the
25     community channel?


 1  10717                My question is in the context of what
 2     we are looking at now, how to regulate or whether
 3     changes should be made or not in regulating
 4     conventional stations.
 5  10718                MR. STEIN:  I think that, as Jim
 6     indicated, when we looked at how we served the
 7     communities, we have served, and our cable system is
 8     quite a diverse range of communities, everything from
 9     the metro belt area of Toronto to smaller communities
10     in interior British Columbia and throughout the west.
11  10719                In looking at that, one is faced with
12     the fact that you are also faced with different local
13     broadcasting situations.  We have tried to evolve what
14     we do in terms of what is being done.  What one does in
15     Toronto is different than what you would do in Barrie.
16  10720                From a regulatory point of view, I
17     think what we meant in this statement was that it
18     really calls for flexibility in how one looks at the
19     situation.  If you come up with one rule for all of
20     Canada in terms of the role of broadcasting in a
21     community channel and move to the point of saying we
22     will require these specific kinds of things be done, it
23     doesn't allow the development of the richness and the
24     diversity that is out there.
25  10721                We take a particular approach.  It's


 1     evolving.  We probably change it quite a bit -- in
 2     fact, every few months it's evolving as we learn new
 3     things and as we get feedback from the viewers.
 4  10722                I think from a regulatory point of
 5     view, what we would look for is more flexibility in
 6     terms of that and an assessment of what the local
 7     broadcaster does would be done on a basis -- I think,
 8     for example, major markets would be a big determination
 9     of what you would see a local broadcaster do as opposed
10     to what you would see the local community channel do.
11  10723                THE CHAIRPERSON:  So you see it
12     basically as competing in the local information or news
13     programming even with the conventional station.  You
14     are going to watch what they do and do something else. 
15     Is that really what the community channel's role is
16     supposed to be?
17  10724                MR. STEIN:  No.  I don't think I
18     meant to say competing with it.  For example, just take
19     Calgary for example.  In the morning from six to nine
20     we actually soundcast CBC Radio.  We actually have a
21     camera in the radio studio.  At night, in the evening
22     at seven, we repeat the CFCN local television news
23     again at seven o'clock on the "Now TV" screen.
24  10725                THE CHAIRPERSON:  Isn't that
25     competition?


 1  10726                MR. STEIN:  No.  We are trying to
 2     work --
 3  10727                THE CHAIRPERSON:  Because CFCN gets
 4     ads presumably in its news, knowing that you can see it
 5     on the community channel you may not watch it at six
 6     o'clock or whatever.
 7  10728                MR. STEIN:  Yes.
 8  10729                THE CHAIRPERSON:  I don't want to
 9     dwell on that overly, but I find it an intriguing idea
10     that the community channel which has a mechanism, a
11     certain role, to suggest that the television station
12     should be relieved of those responsibilities, whatever
13     they may be, by reference to what the cable operator
14     chooses to do in that market is an intriguing at best
15     suggestion in light of the role of the distribution
16     system and of its community channel.
17  10730                MR. STEIN:  Yes.  I think what we are
18     suggesting is in terms of looking at the role of the
19     broadcaster in the local area, one should take into
20     account the kind of capabilities that exist on the
21     community channel.  I think we weren't trying to say
22     more than that.
23  10731                We certainly aren't trying to compete
24     with broadcasters in those markets.  We are trying to
25     identify areas in the community that, frankly, aren't


 1     being served and try to identify how we would do that
 2     and also try to use new technologies.
 3  10732                I think part of the "Now TV"
 4     experiment is in fact trying to use new technologies
 5     and servers to see how we can provide that kind of
 6     information.  I think we spent up to about half a
 7     million dollars developing a software with an Ottawa
 8     company which we think is quite innovative in terms of
 9     developing that kind of information capability.
10  10733                We think it's a balancing act in
11     terms of how we each fulfil our roles in the community,
12     whether it's as local broadcasters, as radio stations
13     or as a community channel.  We don't really look at it
14     as a competitive situation.
15  10734                THE CHAIRPERSON:  Now, you also have
16     some recommendations with regard to investments by
17     broadcasters, television broadcasters, which would
18     include specialty services obviously, towards the
19     production of Canadian programming.
20  10735                You state in your Executive Summary
21     age page ii:
22                            "The current levels of licence
23                            fees paid by broadcasters should
24                            not be increased."
25                                                        0925


 1  10736                Later on at page 10, I believe your
 2     statement is that they should be more in line -- under
 3     "Funding" at page 10, (i), the last sentence says more
 4     production could be triggered:
 5                            "...if the licence fee
 6                            thresholds were more in line
 7                            with the true rental value of
 8                            the programs in the Canadian
 9                            marketplace."
10  10737                Seeing that you don't think that the
11     levels are too low, which is something we have heard
12     from many producers, of course, and some indication,
13     according to some information brought to us that they
14     have, indeed, been lowered, what do you mean by more in
15     line?  Do you find that they now have the true rental
16     value or it should be decreased or -- obviously, you
17     say not increased.  What is this reference point, the
18     rental value of the programs to determine the level of
19     the licence fee?
20  10738                MR. CASSADAY:  In the case of
21     children's programming, the average licence fee is in
22     the area of 15 per cent, which is somewhat lower than
23     what we typically find in the area of Canadian drama,
24     which is in the range of 20 per cent.  Over the last
25     number of years, we have maintained that level of


 1     funding for licence fees.
 2  10739                What we are referring to here when we
 3     talk about the possibility of triggering more
 4     production by allowing lower licence fees is
 5     particularly in the area of animation and, more
 6     specifically, in the area of computer-generated
 7     animation.  I think you will also find, particularly
 8     from significant producers in the children's area,
 9     specifically NELVANA and CINAR, that they agree with
10     the assessment that somewhat lower licence fees for
11     these genres, in particular, could contribute to the
12     stimulation of even more programming by ensuring that
13     there were more dollars available to go around.
14  10740                THE CHAIRPERSON:  So, by the rental
15     value you mean what is it likely to garner at the end
16     of the day and, therefore, put your licence fee at the
17     level that is congruent with this eventual value
18     measured by...?
19  10741                MR. CASSADAY:  A rental fee is really
20     code for a licence fee because it's not an investment
21     in the --
22  10742                THE CHAIRPERSON:  Oh, you are not
23     talking here about the eventual value in what you will
24     get back from the program?
25  10743                MR. CASSADAY:  No, we are not.  We


 1     are just saying that if we could take the available
 2     licence fee dollars and allocate them across more
 3     programs, more programming could be triggered in the
 4     children's area providing more programming to be made
 5     available for sale in international markets and second
 6     and third windows in Canada.
 7  10744                THE CHAIRPERSON:  So, the true rental
 8     value to you means the same thing as a licence fee?
 9  10745                MR. CASSADAY:  Correct.
10  10746                THE CHAIRPERSON:  And you have no
11     reference point as to -- you are just saying, "We want
12     more children's programming, so let's keep the licence
13     fee low and generate more programming."
14  10747                MR. CASSADAY:  I think there is good
15     congruence, good consensus amongst the industry players
16     in the area of children's programming that the 15 per
17     cent licence fee, in the generality, is an appropriate
18     level for children's programming.
19  10748                THE CHAIRPERSON:  And you say it's an
20     appropriate licence fee and also it's an appropriate
21     rental value?
22  10749                MR. CASSADAY:  That's correct.
23  10750                THE CHAIRPERSON:  That's all that
24     sentence means?
25  10751                MR. CASSADAY:  That's correct.


 1  10752                THE CHAIRPERSON:  There has been a
 2     lot of discussion, of course, about whether
 3     broadcasters directly or through affiliates should have
 4     full access to funds, especially the portion to which
 5     they don't, and that, indeed, equity investments by
 6     broadcasters should be encouraged.  You do not share
 7     the view of many participants from the production
 8     industry that that is not wise because of self-dealing
 9     possibilities and harm done to the production industry,
10     et cetera.  Is it your view that it should be done
11     because there are no problems and it should be done
12     without safeguards or limits?
13  10753                You are obviously aware of the
14     various limits that have been suggested to ensure that
15     there is no more equity investments than there should
16     be to prevent the negative results of allowing
17     broadcasters access to the funds intended through an
18     equity investment.
19  10754                MR. CASSADAY:  Yes, we believe that
20     broadcasters should have access or should have the
21     opportunity to participate in an equity basis in
22     programs.  We see it as clearly, though, a two-step
23     process.  The important first step is to establish a
24     fair and equitable licence fee for the program and, as
25     we have said in the case of children's programming, we


 1     believe that the 15 per cent level is the appropriate
 2     level.  Then after that negotiation has been completed,
 3     the opportunity for equity participation should be
 4     available for the broadcaster and again we find that
 5     there is good consensus in our production community on
 6     this particular point.
 7  10755                There are a couple of advantages that
 8     the Commission might consider in this regard.  First of
 9     all, the opportunity for us to participate in equity --
10     an equity participation in the project can often mean
11     the difference between that project actually being able
12     to move to completion.  So, for example, we took an
13     equity position in the program "Reboot" last year as a
14     way of facilitating the continuation of the property. 
15     In the absence of our equity participation, it's quite
16     likely that show could not have continued.
17  10756                So, the first point that we would
18     like to make is that equity often can mean the
19     difference between providing that final chunk of
20     financing required to move a project ahead or having
21     that project actually not be able to proceed with its
22     second or third year.
23  10757                The other point that the Commission
24     should consider in regard to equity is that as distinct
25     from the licence fee or the rental arrangement of a


 1     program, the broadcaster takes their runs and they are
 2     finished with the program.  When the broadcaster has
 3     equity participation, the incentive for them is to
 4     ensure that that program gets well placed, well
 5     scheduled and maximizes its chance for success is
 6     enhanced.  So, I think those are two compelling reasons
 7     and perhaps my colleague have additional points to
 8     make, but certainly those are two compelling reasons
 9     that we believe equity should be continued to be
10     encouraged.
11  10758                THE CHAIRPERSON:  Is that what is
12     intended by "collaborative ventures" again at page 10
13     under "Funding", under the second paragraph, "Equity
14     Investments", where you say:
15                            "Collaborative ventures with
16                            broadcasters by means of equity
17                            should be another key
18                            element..."
19  10759                Is that what you mean by
20     "collaborative ventures", where there may be shared
21     property in the product at the end?
22  10760                MR. CASSADAY:  We mean collaborative
23     in the broadest sense of the word.  We believe that
24     there are tremendous opportunities for us to work
25     together as industry partners to encourage the creation


 1     of more first-run programming.  As you know, in many
 2     instances, broadcasters have specific conditions of
 3     licence that require them to run specific amounts of
 4     first-run programming.  The opportunity for us to
 5     collaborate and both credit first-run programming to
 6     our schedules again represents another opportunity to
 7     create more streams of programming.
 8  10761                The most, I guess, prominent point of
 9     reference here is the collaboration of Global and CBC
10     in the production of "Traders", which facilitated a
11     second and, ultimately, a third year of production for
12     that program, which ordinarily might not have been
13     allowed.  We see tremendous opportunities in our
14     business to work with educational broadcasters, to work
15     with the CBC, to work with private broadcasters, to
16     work with French broadcasters to ensure that we
17     maximize the amount of new first-run Canadian
18     programming.
19  10762                THE CHAIRPERSON:  Mr. Cassaday, I
20     think you said that there was a consensus among
21     producers about the value of having broadcasters. 
22     Where there is not a consensus, as far as I could see,
23     is just how open-ended this should be.  There have been
24     various questions raised as to the level of ownership
25     that should exist when in the hands of a broadcaster


 1     over its affiliate.  There have been some more complex
 2     ones.  We have asked many people, many parties to
 3     comment on CINAR's.  There have been suggestions that
 4     in no case should there be more than 20 per cent
 5     ownership of the product at the end of the day.
 6  10763                I know the broadcasters make the
 7     point that if there was no such limitation, with their
 8     acumen and knowledge they could take the product
 9     further and that would be a positive step, but I am
10     surprised by your comment about consensus.  If you do
11     not feel that there ought to be any type of safeguards,
12     the ability to access the funds that are not open now
13     to broadcasters should not be on certain terms and
14     conditions.  Would you agree that there is no consensus
15     there?
16  10764                Unless you have a set of safeguards
17     yourself that matches or are similar to the ones that
18     have been suggested, I don't see consensus as to the
19     terms.  Of course, the production industry wants the
20     money in, but they want the product, and so do you. 
21     Then the question becomes, "What is right for the
22     system", and there are various views.  Consensus I have
23     not heard.
24                                                        0935
25  10765                MR. CASSADAY:  When Paul and Peter


 1     Moss and Sheldon begin a negotiation with the producer,
 2     there are many elements and many layers.  The first, of
 3     course, is the discussion about the licence fee.  And
 4     most importantly, even before the discussion of the
 5     licence fee:  Is this program appropriate for our
 6     service?  Is it something that will add value and bring
 7     pleasure to our viewing audience?
 8  10766                Once that is reached, then there
 9     becomes another series of negotiations; equity being
10     one, distribution being another, merchandising being
11     another.  There are many areas where the broadcaster
12     and producer can cooperate.
13  10767                What we have found, from a
14     situational point of view, is that any and all of those
15     areas can in fact be offered by the producer.
16  10768                So our feeling is that the Commission
17     may view, based on this lengthy discussion with the
18     community, that certain limitations are required.  Our
19     tendency would be to say that equity is a form of
20     negotiation between the broadcaster and the producer;
21     and in fact it may be extremely advantageous to the
22     producer to have access to a significant chunk of
23     equity from the broadcaster to ensue that a program
24     goes through.
25  10769                After all, we may not be able to rely


 1     on the buckets of public funding that are available
 2     over the length that your decisions may hold.  There
 3     may need to be other sources of revenue to ensure these
 4     productions are actually completed.
 5  10770                THE CHAIRPERSON:  If we look at the
 6     world as it exists now, there are limitations.  What I
 7     want to know is whether you are advocating that there
 8     be none, and that that is what the Commission could
 9     recommend.
10  10771                Right now, despite negotiations, my
11     understanding is that there are parts of the funds that
12     are not available if access to them is by a
13     broadcaster.
14  10772                Am I not understanding this properly?
15  10773                MR. ROBERTSON:  Just to say that we
16     are not seeking any additional access to the funds
17     beyond what currently exists.
18  10774                THE CHAIRPERSON:  You are not looking
19     at a relaxation of the rules.
20  10775                MR. ROBERTSON:  No.
21  10776                THE CHAIRPERSON:  You are simply
22     recommending that the system should make it easier and
23     that collaborative efforts between broadcasters and
24     producers, including equity investment, should not be
25     discouraged.


 1  10777                MR. ROBERTSON:  We would support the
 2     existing framework which provides 30 percent of the LFP
 3     as an opportunity.  But we think that the conversation
 4     about equity is separate from the licence fee and
 5     should therefore be a matter of open negotiation.
 6  10778                We also would not present specific
 7     safeguards on equity, because we believe that it can
 8     exist in an open market conversation without any
 9     issues.
10  10779                THE CHAIRPERSON:  But is there a
11     limitation on the equity part of it right now for
12     direct involvement by broadcasters?
13  10780                MR. CASSADAY:  There is.  We are
14     precluded from accessing Telefilm funds.
15  10781                THE CHAIRPERSON:  And you are not
16     proposing a change there.
17  10782                MR. CASSADAY:  No, we are not.
18  10783                THE CHAIRPERSON:  The rest would be
19     negotiated with Madame Charest, or whoever.
20  10784                MR. CASSADAY:  That is correct.
21  10785                THE CHAIRPERSON:  Where, of course,
22     the words garde-barrière and gatekeeper crop in; that
23     the conventional broadcaster is giving the first chunk
24     of licence fee.  The negotiation is not quite on an
25     even keel.


 1  10786                We have a Vice-Chair who hates the
 2     phrase "level playing field", so it has been banned
 3     from our vocabulary; that and "eyeballs".  No more.
 4  10787                But these are problems that are
 5     inherent in the system as it exists.
 6  10788                MR. CASSADAY:  That is correct.
 7  10789                THE CHAIRPERSON:  The producer saying
 8     that the collaborative effort is actually the
 9     broadcaster deciding, because he has the first chunk,
10     the level of the fee.
11  10790                You say that in children's
12     programming it could possibly be advantageous if the
13     fee were lower.  So there would be more product.
14  10791                Do you have any comment, Mr.
15     Cassaday, about the level of the fees for other types
16     of programs?
17  10792                MR. CASSADAY:  Excuse me, Madam
18     Chair, but "other types of programs" meaning...?
19  10793                THE CHAIRPERSON:  Other than
20     children's programming.
21  10794                When we were discussing the adequacy
22     of the level of the licence fee -- which is a subject
23     of contention during this process -- you spoke to
24     children's programming, which I know is Shaw's greatest
25     interest.


 1  10795                What are your comments, if any, about
 2     whether the level of licence fees for other than
 3     children's programming is adequate, or should be
 4     lowered?
 5  10796                MR. CASSADAY:  Fundamentally, we
 6     believe that the goal for Canadian broadcasters and the
 7     Canadian production community in general should be to
 8     maximize the amount of programming that we can produce.
 9  10797                If in concert with other funds,
10     foreign investment, equity participation, we can
11     trigger more programming and increase the chances of us
12     being successful in producing great Canadian
13     programming, we would encourage a flexible regulatory
14     environment which allows the broadcaster and the
15     producer to negotiate in good faith to come to some
16     terms.
17  10798                It may be necessary that there is a
18     floor established.  But we are not sure that
19     maintaining a guaranteed 20 percent licence fee is
20     necessarily appropriate.
21  10799                There have been many parties who have
22     come to this hearing so far that have discussed
23     specific examples where good programs have been
24     produced amicably with a broadcaster and producer
25     involved at licence fees below 20 percent; oftentimes


 1     taking advantage of the public funding that is
 2     available for top ups.
 3  10800                It seems to me that those have been
 4     win-win situations.
 5  10801                What we believe we need to be
 6     focusing on is how do we create an environment that,
 7     regardless of the level of funding available from
 8     public sources, regardless of economic conditions in a
 9     given year, ensures that there is a regime that is
10     flexible enough to ensure that programs continue to get
11     made.
12  10802                THE CHAIRPERSON:  Talking about the
13     financial aspect as it relates to licence holders, what
14     portion of licence fees or top up -- how should that be
15     handled, in your view, vis-à-vis television licence
16     fees if spending requirements were imposed or continued
17     in some cases, depending on the option of the
18     television licensee?
19  10803                You have heard other parties to date
20     comment on what should or should not be included to
21     discharge one's spending responsibilities or
22     requirement.
23  10804                MR. TEICHER:  What we can say is that
24     while we have included the LFP top-up -- and I think
25     our most recent filing, that amount has been not


 1     required in order to meet our conditions of licence.
 2  10805                If the decision was made that the
 3     top-up could not be included, it would not impact YTV
 4     negatively, because we have not relied on it in any way
 5     to exceed our condition of licence requirements.
 6  10806                THE CHAIRPERSON:  Do you have any
 7     views this morning as to whether whatever loopholes may
 8     be examined as to the future use of the top-up, whether
 9     or not that should remain as is or should not?
10  10807                Presumably, if there is such an
11     ability, it would not have shown up yet.  Should it
12     show up in licensees' returns?
13  10808                MR. CASSADAY:  We don't really view
14     it as being a loophole.  The policy does allow --
15  10809                THE CHAIRPERSON:  Not a loophole, but
16     the ability to do it.
17  10810                MR. CASSADAY:  The central question
18     has to be:  What is the overall objective?  Is the
19     overall objective to ensure that we produce as many top
20     quality Canadian programs as we can?
21  10811                If that is the objective, then the
22     fact that we are able to access different buckets of
23     funding, broadcaster licence fees, top-up fees, equity
24     from Telefilm, I think this is one of the privileges
25     that we have within the system.  The ability to use


 1     those in a creative fashion to get shows made has
 2     proven to be a boon for the industry.
 3  10812                One of the things that tends to
 4     happen in a forum like this is that views get
 5     polarized.  But one of the things that I think we have
 6     to remember is that we are doing a wonderful job as an
 7     industry.  We have talked about YTV's contribution in
 8     the area of children's programming, where 37 percent of
 9     our audience is watching Canadian programming; 70
10     percent of our programming in prime time is Canadian. 
11     These are things to celebrate.
12  10813                CMT is delivering Canadian content at
13     the 45 percent level, well beyond the prescribed levels
14     for radio.
15                                                        0945
16  10814                We are introducing Canadians to new
17     Canadian artists on a regular basis.  In the case of
18     drama, the private broadcasters are making a
19     significant contribution.  You know, thinking back just
20     in my ten years in the industry, the quality of
21     programming that we have on the air relative to what we
22     had ten years ago is demonstrably better.
23  10815                We are doing great stuff.  We know
24     that the development slates for the future are even
25     more promising.  We think we are on the right track,


 1     that the funds that are available are contributing to
 2     the system as a whole, making good progress.  That's
 3     where I think our emphasis should be.
 4  10816                THE CHAIRPERSON:  My question was a
 5     lot more pointed than that.  It was if the top-up or
 6     whatever else is available as expenses, the Commission
 7     could set spending requirements at 15 per cent.  If
 8     it's not, it would set them maybe at 12 per cent of
 9     revenues, which I am sure will make the newspaper now.
10  10817                My question was simply, you know,
11     it's not that difficult.  If it's counted in, then
12     maybe requirements are made, we will just take it into
13     account.
14  10818                MR. CASSADAY:  Yes.
15  10819                THE CHAIRPERSON:  So those who are,
16     as you say, creative and clever at using it then will
17     have a more imaginative way of reaching what their
18     requirements are.
19  10820                MR. CASSADAY:  Yes.  I think we
20     should --
21  10821                THE CHAIRPERSON:  I just wanted to
22     see what you thought.  Should we just leave it
23     available?
24  10822                MR. CASSADAY:  Well, to your specific
25     point of the question, yes, we believe you should keep


 1     it available and we should encourage creativity in the
 2     development of outstanding Canadian programs.
 3  10823                THE CHAIRPERSON:  And then if
 4     spending requirements are made, those who make use of
 5     it can count it in full towards --
 6  10824                MR. CASSADAY:  Yes, and on a case by
 7     case basis, as each broadcaster appears before you to
 8     apply for their licence renewal, you have an
 9     opportunity to question them about their specific plans
10     and their specific level of commitment.  You can judge
11     their contribution and commitment accordingly.
12  10825                THE CHAIRPERSON:  So in that sense I
13     agree with you that the word "loophole" is possibly not
14     the right word.  It's just to understand what is
15     possible out there, who will use it, should you
16     encourage use and then should it be counted towards
17     meeting requirements that may be imposed.
18  10826                MR. TEICHER:  One of the things we
19     might consider though is if you use it in that way
20     because LFP financing can't be counted on -- we sort of
21     saw in the last round that nobody everybody applied got
22     what they applied for because of the limitation of
23     funds.
24  10827                If you kind of gross up the
25     expenditure requirements on the theory that there will


 1     be a certain amount of LFP contribution, not every
 2     project for every broadcaster will in fact get the LFP
 3     financing.
 4  10828                One of the things you might consider
 5     if you are trying to decide to keep it clear from
 6     condition of licence or to include it is by keeping it
 7     clear, then the result of who will be successful in
 8     seeking their LFP, you don't have to worry about that
 9     in terms of trying to gross up in advance.
10  10829                THE CHAIRPERSON:  I understood
11     hearing the Directors Guild yesterday that some formula
12     would have to be, if that is taken into consideration,
13     as to when it becomes accountable.  I'm sure our clever
14     economists would find ways of doing it just right.
15  10830                While we are at spending, you state,
16     as have many parties, that promotional efforts should
17     be encouraged and that as many techniques as possible
18     should be used for that purpose.
19  10831                I'm looking at the middle paragraph
20     on the Executive Summary at page ii, towards the end of
21     that paragraph.  You say:
22                            "-- the CRTC should encourage
23                            all industry players to exploit
24                            more fully the existing
25                            promotional avenues for Canadian


 1                            programming and to develop new
 2                            techniques."
 3  10832                I would like to hear you on new
 4     techniques and also perhaps your comment on some of the
 5     suggestions that have been made, if you are aware of
 6     them, as to whether the Commission should again treat
 7     that as an eligible expense towards meeting any
 8     spending requirements that may be imposed.
 9  10833                Both what are the new techniques,
10     have you thought of some, and secondly, how it should
11     be considered.
12  10834                MR. CASSADAY:  Well, we will ask Paul
13     Robertson to talk about some of the new techniques
14     because there's a lot of interesting things being done
15     at YTV and perhaps if Vicki has any examples, she could
16     also talk about them.
17  10835                In the area of inclusion of promotion
18     expenses in terms of the overall Cancon requirement
19     again, go back to the fundamental premise here which is
20     the objective of the game to develop outstanding
21     Canadian programming and ensure that Canadians are
22     aware of it.
23  10836                One of the big limitations that we
24     have in Canada that again has been discussed at length
25     in this hearing is we don't have access to the same


 1     star system promotion machine that they do in the
 2     United States.  We don't have the equivalent of
 3     "People" magazine.  We don't have the nightly exposure
 4     of "Entertainment Tonight", those kinds of vehicles
 5     which make these personalities and stars well known to
 6     all of our viewers.
 7  10837                That leaves us as a broadcast
 8     community to play and fulfil that role in any ways that
 9     we can to start reinforcing in the minds of our viewers
10     that's coming up next, who's in it, you know, story
11     lines that need to be told and retold to ensure there's
12     continued interest, to our way of thinking anyway, is
13     an important and vital contribution to the development
14     of the audience interest in these shows and the success
15     of the shows.
16  10838                THE CHAIRPERSON:  I agree with you,
17     Mr. Cassaday, that it's valuable.  What I'm asking you
18     is what are the mechanisms that the Commission has to
19     encourage, because I see encourage as a positive step. 
20     Usually that translates itself into certain incentives.
21  10839                MR. CASSADAY:  Yes.
22  10840                THE CHAIRPERSON:  If I sit here and
23     encourage you to do that, am I really doing very much,
24     but as a regulator, various suggestions have been made
25     as to what incentives should be put in place,


 1     particularly by the CAB, as to whether this type of
 2     programming should be considered towards exhibition of
 3     Canadian programming, whether certain types of
 4     promotion that are now included in advertising should
 5     be excluded from it by redefining advertising.
 6  10841                MR. CASSADAY:  Yes.
 7  10842                THE CHAIRPERSON:  When I see "the
 8     Commission should encourage", at the end of the day
 9     yes, we can say we think this is a good idea, but
10     usually it translates itself into an incentive which is
11     either monetary or allows you to count certain
12     programming as Canadian, something that doesn't exist
13     now which will incent promotion.
14  10843                MR. CASSADAY:  I understand the
15     question.  We believe that the promotion of Canadian
16     content should be included as an eligible expense.
17  10844                THE CHAIRPERSON:  Have you seen the
18     CAB's proposal on that score and is that the type of
19     thing which I think certain entertainment programming
20     should be considered?  If you don't have the exact --
21     that type of thing is acceptable to you.
22  10845                MR. ROBERTSON:  We give you the basic
23     idea that it would be third party expenses and would
24     relate to the promotion of Canadian programs in
25     particular.


 1  10846                THE CHAIRPERSON:  And you would stop
 2     short at the entertainment type programming.  It would
 3     be particularly treated differently.
 4  10847                MR. ROBERTSON:  Well, the large
 5     majority of what we do in children's programming is all
 6     entertainment programming so we would support that,
 7     yes.
 8  10848                THE CHAIRPERSON:  The reason I'm
 9     asking is the production industry in general has had a
10     different view which is they are selling these
11     products, it's inherent in the system or integral to
12     the system that they promote and you don't have to
13     incent it or give them bonuses, whether they be
14     exhibition reduction or advertising beyond the
15     advertising limitations.
16  10849                MR. CASSADAY:  Madam Chair, it's not
17     integral to the system.  The fact of the matter is that
18     in a world where making money is becoming increasingly
19     difficult --
20  10850                THE CHAIRPERSON:  Yes.  I saw the
21     stock market this morning.
22  10851                MR. CASSADAY:  Exactly.
23  10852                THE CHAIRPERSON:  That's why we all
24     wore black today.
25  10853                MR. CASSADAY:  And we need to


 1     remember that that can get worse.
 2  10854                THE CHAIRPERSON:  We are all going to
 3     become nuns now.  That's probably a good spot to be
 4     rich now because there aren't too many left.
 5  10855                MR. CASSADAY:  Right.  If we leave
 6     promotion as a purely discretionary worthwhile
 7     objective and don't create the proper incentives to
 8     encourage it -- we are asking for a broadcaster to make
 9     a decision or a producer to make a decision about the
10     expense of a discretionary item.
11  10856                We believe that there is a high
12     likelihood that it simply would not happen.  By in fact
13     encouraging it, by including it as an allowable
14     expense, you maximize the potential that we are going
15     to see, you know, more ads in "TV Times" and more
16     outdoor signs and more actual on-air promotion of
17     Canadian content.
18  10857                THE CHAIRPERSON:  Especially if you
19     increase your equity involvement.
20  10858                MR. CASSADAY:  Possibly.
21  10859                THE CHAIRPERSON:  That is, I suspect,
22     some of the basis of the arguments of the broadcasters,
23     let us in in a fuller way and we will promote it here
24     and everywhere else and it will all be better for the
25     production of Canadian programming.


 1                                                        0955
 2  10860                MR. CASSADAY:  Whatever can be done
 3     to enhance the mutuality of interest is good for the
 4     system.
 5  10861                MR. TEICHER:  Although it's probably
 6     worth pointing out that the equity returns are most
 7     likely to come from foreign markets and distribution of
 8     programs outside the market because, generally
 9     speaking, the first-run Canadian licence fee has been
10     paid in and the majority of value that the broadcaster
11     gets back is for promoting the show on its own network. 
12     For viewers, equity doesn't really play a role, except
13     basically in international sales.  So, it's not self-
14     serving in that sense.
15  10862                THE CHAIRPERSON:  But the
16     broadcasters I think we hear telling us we should be
17     more involved in the production industry because we
18     would do a better job even at international sales
19     because of our contacts, our knowledge.  Some
20     broadcasters are saying that.  You don't believe it?
21  10863                MR. CASSADAY:  Some broadcasters are
22     saying that, but that's not our point.  We don't
23     believe we can do a better job, we believe that
24     sometimes equity investments and the promotion of the
25     program can enhance the overall value of the property


 1     for everybody.
 2  10864                You asked earlier about the whole
 3     issue of specific ideas that could enhance promotion. 
 4     Perhaps Mr. Robertson could just make a quick comment
 5     on that.
 6  10865                THE CHAIRPERSON:  Please.
 7  10866                MR. ROBERTSON:  There is really three
 8     areas I will comment on briefly that are intriguing
 9     marketing ways of driving audience to Canadian programs
10     that we have been able to develop at YTV.  The first is
11     the website.  We have a very elaborate website and we
12     have put a lot of resources into it.  It changes nearly
13     daily in terms of scheduling information.  Because it's
14     constantly changing and innovative, we get about three
15     million hits a week from young kids that are
16     communicating with us.  So, it's a very powerful way
17     for them to first find out about Canadian shows,
18     because they would be previewed on the website two
19     weeks before they would hit the air.
20  10867                Secondarily, we have really developed
21     our community involvement.  Perhaps national specialty
22     channels have not seen their role that powerfully in
23     the local community, but now as the services mature
24     there is a tremendous opportunity for national services
25     to get more involved in the community.  We created the


 1     YTV bust out tour, we call it.  We take this large
 2     truck and set up a tent and meet the kids on their own
 3     turf, get into conversations with them, find out what
 4     they think of the Canadian shows, and it's a tremendous
 5     way for us to inter-react with the kids that we serve.
 6  10868                Yes?
 7  10869                THE CHAIRPERSON:  No, go ahead.
 8  10870                MR. ROBERTSON:  Just one more area I
 9     will mention is something that we have just now put
10     into place, which is a made-in-Canada screen credit. 
11     What we do here is place a Canadian flag when a
12     Canadian show is beginning because we want to
13     communicate to the young kids that:  The show you are
14     about to see is a terrific Canadian production.
15  10871                Now, we know that the children don't
16     have a bias between Canadian/American, they just decide
17     whether they like it or don't like it, but in this case
18     if we can say that, indeed, this program is made in
19     Canada, we hope that we will start to form positive
20     attitudes about Canadian programs that will perhaps
21     endure for life.
22  10872                THE CHAIRPERSON:  Would you agree
23     that it's possibly easier to do some of these
24     techniques with children's programming than with drama
25     or where what you see on the screen eventually becomes


 1     a more important promotional technique?
 2  10873                Isn't you who say in your submission
 3     that there is only 13 per cent of Canadian homes
 4     connected to the Internet?  So, it would not reach a
 5     large proportion of the audience that the services are
 6     really trying to reach, although it's extremely
 7     valuable.
 8  10874                MR. ROBERTSON:  Thirteen and growing,
 9     of course.  The 13 per cent was a number in our
10     submission, but also there is good access now through
11     schools so that the children do have the opportunity at
12     school to get access, but clearly it doesn't have the
13     penetration that you would want.  So, it's one
14     technique.
15  10875                THE CHAIRPERSON:  Or even visits. 
16     It's easier to target children when they are mostly all
17     in the same spot.  With, let's say, adult programming
18     as opposed to children's programming, it's more
19     difficult.  So, the on-screen, on-the-air techniques
20     become -- as well as third party ones, become more
21     important and the other techniques are a little more
22     difficult.  You know we have been visited by Dudley the
23     Dragon.
24  10876                MR. ROBERTSON:  He is very good,
25     isn't he?


 1  10877                THE CHAIRPERSON:  In children's
 2     programming, you mention the possible need for a
 3     particular -- at the top of page 10:
 4                            "Ensure that significant funding
 5                            envelopes are available
 6                            exclusively for children's
 7                            television genre."
 8  10878                Are you suggesting that the
 9     Production Fund's allocation should be altered and a
10     particular children's programming envelope be created? 
11     I don't think there is now, is there?
12  10879                MR. CASSADAY:  No, there is not.
13  10880                THE CHAIRPERSON:  It would be inside
14     of the proportion allocated to probably drama.
15  10881                MR. CASSADAY:  That's right.  It's
16     basically within both portions.  Because we are able to
17     draw from the 80 per cent that is directed towards
18     drama and from the 20 per cent that is directed towards
19     under-represented, we are able to participate in both
20     pieces of the private funding envelope.
21  10882                Madam Chair, we are not recommending
22     a specific envelope be created for children's
23     programming.  We are simply recommending that in your
24     report you remind the various constituents about the
25     importance of children's programming, the fact that we


 1     are exposing young people to Canadian programming and
 2     they are voting "yes" and that we don't jeopardize the
 3     success that we are enjoying in this category by taking
 4     that success for granted.
 5  10883                THE CHAIRPERSON:  In the same
 6     recommendation at the bottom of page 9, the top of page
 7     10 of your written submission, you say that the
 8     Commission should:
 9                            "Maintain recognition of
10                            children's programming as an
11                            under-represented program
12                            category..."
13  10884                Should the Commission retain any of
14     the recommendations that exhibit hours be imposed?  We
15     have heard many formulae, 10/10/10, 7/7/13, 7/7/11. 
16     Maybe I should add 20/20 at this point.  We had to make
17     sure that Dudley the Dragon didn't confuse that for a
18     garden spray that would be not environmentally friendly
19     because Dudley was around when we talked about
20     10/10/10.
21  10885                Are you suggesting there that if the
22     Commission wished to retain the idea of exhibition of
23     under-represented categories in particular hours, that
24     hours of children's programming should be included in
25     that?  You know that the suggestion has been made that


 1     it be three hours imposed by the FCC and so on.  I'm
 2     speaking here not of specialty services like you
 3     program, but conventional television stations.  Would
 4     you consider that undue competition with your specialty
 5     services, Mr. Cassaday, or would you think it's a good
 6     idea to also demand some unconventional stations?
 7  10886                MR. CASSADAY:  We believe most
 8     conventional broadcasters are committed to children's
 9     programming and we look forward to working with them,
10     as we have in the past.  We have a strong franchise
11     with kids, so we are happy to have all the competition
12     come at us that wants to.
13  10887                So, probably the best way of framing
14     our advice to the Commission on this one is that the
15     fundamental question should be:  What is the level of
16     funding available in the system to ensure that we
17     promote the development of high-quality children's
18     programming?  There are a number avenues out there
19     right now that are contributing to children's
20     programming, including the CBC, CTV and Global.
21  10888                Should every player in the system be
22     required to do three hours?  Again we would argue that
23     on the basis of each player coming before you with
24     their licence application, you should review their
25     commitment to children's programming in the context of


 1     their overall positioning.  We may see even
 2     conventional broadcasters become much more focused in
 3     their approach in the future than they are now and
 4     maybe children's programming works for them and maybe
 5     it doesn't.
 6  10889                THE CHAIRPERSON:  In your oral
 7     submission at page 6, you say:
 8                            "Over the past two years,
 9                            approximately 30% of the private
10                            broadcaster envelope has been
11                            directed to children's
12                            programming."
13  10890                Do you find that adequate?  Are you
14     saying that because you find it's adequate or it's too
15     low?
16  10891                MR. CASSADAY:  We stated it simply as
17     a fact.
18  10892                THE CHAIRPERSON:  As a fact, but
19     usually when people insist on numbers, it's either to
20     say this is good or it's not, it's not enough.  Is this
21     adequate if I combine it with your comment at page 10,
22     that there should be encouragement for significant
23     funding?  Do you find this?  If you don't want to
24     comment, that's fine, too.  I was curious as to --
25  10893                MR. CASSADAY:  Our simple comment


 1     would be that we believe that that should be
 2     safeguarded, that we have demonstrated that children's
 3     programming is making a significant contribution to the
 4     system right now.  We are in fact creating an
 5     environment where young Canadians are developing a
 6     healthy appetite for Canadian programming and there
 7     seems to be a real benefit in nurturing that.
 8  10894                THE CHAIRPERSON:  So, it's generally
 9     adequate?
10  10895                MR. CASSADAY:  Yes.
11  10896                THE CHAIRPERSON:  And you wouldn't
12     want it to change, which, of course, would be unlikely
13     if the Commission retained the suggestion that every
14     over-the-air broadcaster do three hours of children's
15     programming at children's peak viewing time.  One would
16     think that --
17  10897                MR. CASSADAY:  The demand would
18     increase.
19  10898                THE CHAIRPERSON:  -- there would be
20     an increased demand.
21  10899                Before we leave the area of
22     programming, the first run -- if I understood or
23     remember the suggestion I think of the CFTPA, it was
24     that first run could be two runs on different
25     broadcasters' undertakings as long as they are


 1     different licensees and it's first run for them. 
 2     Hopefully, I am not misrepresenting it.  Is that the
 3     type of thing you are looking at or something
 4     different?  You say the CRTC should loosen its
 5     definition of "first run".  What do you understand it
 6     to be now and what do you think it ought to be?
 7  10900                MR. CASSADAY:  I will ask Mr. Moss to
 8     make a couple of comments on how it can be specifically
 9     applied.  Peter has over 25 years' experience in
10     children's programming and we are very pleased to have
11     had him join us in the past year.  He can talk about
12     some of the kinds of things that we would like to do.
13  10901                I think one of the fears in the past
14     has been that if we allow shared first runs, there is
15     going to be less programming produced and, importantly,
16     the window for second-run programs won't be there.  We
17     believe that both of those beliefs are myths.
18  10902                In the case of less second run,
19     clearly, what will happen is that the two players that
20     are participating in the programming on a first run
21     basis will end their run and then another player will
22     come in.  So, effectively, the third run will come in
23     and replace what would ordinarily have been the second
24     run.  So, we see no loss of revenue for the producer by
25     opening the window.


 1  10903                Secondly, we believe that by
 2     encouraging players to share first run windows, we in
 3     fact create an opportunity for more programs to get
 4     made and better programs to get made.  The final point
 5     that we believe needs to be made here is even a
 6     successful show that gets an audience of a million
 7     people.  The other way of looking at is 29 million
 8     Canadians didn't see it.  So, the more windows that we
 9     have for these top quality Canadian programs, whether
10     they are children or family or adult-oriented fare, the
11     more windows for exposure that we have, the better off
12     we all are.
13  10904                Perhaps, Peter, you could comment on
14     just a couple of specific examples.
15  10905                MR. MOSS:  The idea of sharing first
16     windows is something that we currently do on an
17     acquisition basis and library basis.  For example, a
18     program like "Animorphs" will show up on Global and on
19     YTV both in first run and we have found a way of just
20     dividing the broadcast day in such a way that we
21     encourage each other to find our own audiences and in
22     many ways having two broadcasters support a program
23     draws more audience to both those sides.
24  10906                So, in terms of sharing first
25     windows, really what we are looking to try and do is


 1     establish something that's not unlike international co-
 2     productions in which in a Canada/U.K. or a
 3     Canada/France situation both countries can claim 100
 4     per cent content.  We would like to say we could do
 5     domestic co-productions with a conventional over-the-
 6     air broadcaster in specialty and both partners can
 7     claim first-run status and that will allow the LFP to
 8     spread their money over a wider net and encourage more
 9     first-run programming on air.
10  10907                THE CHAIRPERSON:  And your concern
11     here vis-à-vis the CRTC's role is that if there are
12     limitations that are waved around the idea of first
13     run, the benefit should be to more than one party?
14  10908                MR. MOSS:  Yes.
15  10909                THE CHAIRPERSON:  That is the role
16     you see.
17  10910                MR. TEICHER:  It's also extremely
18     important to consider, given the amount of production,
19     for example, the CFTPA is advocating and given the
20     limited amount of public funding combined with how
21     important gap financing or that kind of public money is
22     to production specifically in regards to children's
23     programming, you may set up a scenario where if you
24     mandate a certain amount of production and you require
25     it be first run but you don't loosen the opportunity


 1     for broadcasters to both claim and share windows, there
 2     won't be enough money in the system to make the amount
 3     of programming that's required.
 4  10911                So, what we are suggesting is perhaps
 5     there is a way where both broadcasters, a convention
 6     and a specialty, can contribute and spread the money a
 7     little bit farther and get more original production
 8     made.
 9  10912                THE CHAIRPERSON:  Now concentration
10     of ownership, and I am talking here about what I have
11     termed horizontal concentration when we speak of
12     conventional broadcasters also having specialty
13     licences or one party having many licences.  So,
14     horizontal in the fashion that it's inside the
15     broadcasting programming sector.
16  10913                At page 2 of the Executive Summary
17     you mention in about the middle of the last paragraph
18     -- you have a sentence that says:
19                            "Private television has
20                            benefited from ownership
21                            consolidation, with resulting
22                            cost efficiencies and revenue
23                            synergies, and from ownership of
24                            specialty services."
25  10914                Yet on the next page, you say that:


 1                            "...specialty services' Canadian
 2                            content quotas and
 3                            expenditures --"
 4  10915                At the top of the page:
 5                            "-- are higher than those of the
 6                            conventional sector."
 7  10916                And there should not be increased
 8     responsibilities imposed for Canadian programming from
 9     that sector.
10  10917                I would like you to comment on the
11     extent to which the Commission should take into account
12     these cost efficiencies and these revenue synergies
13     which make it easier to operate when it is setting on
14     an ad hoc basis, as in the case of specialty services,
15     or possibly even in the case of conventional
16     broadcasters, whether the Commission should consider
17     that the synergies and cost efficiencies that result
18     from approving transfers or allowing multiple ownership
19     of specialty services or cross-ownership with
20     conventional broadcasters should be taken into account
21     as a reference point for the level of advantages in the
22     area of programming that should be expected.
23  10918                By that I mean more exhibition, more
24     spending, whether one should say this is a big company,
25     it's got the cost efficiencies, revenue synergies, so


 1     more should be requested or demanded of it than a
 2     similar neighbour who is not consolidated.
 3  10919                MR. CASSADAY:  Madam Chair, there is
 4     a lot of layers to that question, so let me try to
 5     answer it as briefly as I can.
 6  10920                First of all, we believe that there
 7     are still tremendous opportunities for the development
 8     of new Canadian services and new specialty niches to be
 9     attacked or addressed, but those opportunities, again
10     we believe, can only be met by players that have the
11     opportunity to sort of graft off from existing
12     operations, so the ability to be able to come into this
13     new world where you may have access to 500,000 or
14     600,000 homes as opposed to the eight million homes
15     that YTV has or the six million homes that CMT has.
16  10921                To be successful in this new world,
17     the rules are going to be no more bricks and mortar, no
18     more additional G&A, probably limited access to ad
19     revenue.  So, all your funding is going to come from
20     probably one source of revenue, which is going to be a
21     subscriber fee, that the subscriber is going to pay for
22     it because they want that particular genre of
23     programming.  The ability to put all the money on what
24     appears on the screen as opposed to in the back room is
25     going to define success.


 1  10922                So, in our particular case, we have a
 2     service CMT which does about $10 million in total
 3     revenues.  So, it is a small service.  We have about 25
 4     people that work in that operation, but they benefit
 5     from sharing affiliation support with YTV, they benefit
 6     from sharing research support from YTV.  In the absence
 7     of that, CMT couldn't make the contribution that it's
 8     making to the system.
 9  10923                So, we believe that the Commission is
10     going to have to keep in mind that specialty means
11     specialty.  It means smaller, it means less access to
12     significant buckets of revenue, and it means that each
13     of them has to cut their cloth accordingly.  So, again
14     we go back to our point that even though we are able to
15     achieve these efficiencies, it's only through these
16     efficiencies that we can continue to grow the Canadian
17     broadcasting system and deliver new, more defined
18     niches of programming in the future.
19                                                        1015
20  10924                Again, we go back to our point that
21     even though we are able to achieve these efficiencies,
22     it is only through these efficiencies that we can
23     continue to grow the Canadian broadcasting system and
24     deliver new, more defined niches of programming in the
25     future.


 1  10925                We again go back to the fact that if
 2     you look at the contribution that is being made, in the
 3     case of YTV, 70 percent of our prime time programming
 4     is Canadian.  If you look at CMT, 45 percent of our
 5     music is Canadian.  These levels far exceed what levels
 6     we are achieving in the realm of conventional, whether
 7     it be radio or conventional television.
 8  10926                THE CHAIRPERSON:  Let me try again.
 9  10927                At page 16, at the top, you recommend
10     that the Commission:
11                            "Make no adjustments to the
12                            regulatory framework for pay and
13                            specialty services in
14                            recognition of their current
15                            significant contributions to
16                            Canadian programming..."
17  10928                But the last sentence is:
18                            "The Commission should continue
19                            to assess each service on a
20                            case-by-case basis to ensure
21                            that each service is making a
22                            substantial and equitable
23                            contribution."
24  10929                My question is with respect to the
25     extent to which equity as between various broadcasters


 1     should take into consideration the increased ability
 2     that may flow from synergies.
 3  10930                MR. CASSADAY:  To use an example, our
 4     friend Mr. Morrissette is going to follow us.  He has a
 5     very successful service called The Weather Channel.
 6  10931                Clearly, the contribution that
 7     Pelmorex makes to the system is demonstrably different
 8     than the contribution that Vicki at CMT makes, or the
 9     people at CTV make, or the people at YTV or Treehouse
10     make.
11  10932                THE CHAIRPERSON:  What if CTV owned
12     The Weather Channel.  Should that be taken into
13     consideration when you are looking at what CTV should
14     do or what The Weather Channel should do?  That is my
15     question.
16  10933                I am not suggesting that that would
17     be the case.  But are these concentrations and
18     consolidations, which are usually brought to the
19     Commission by saying intangible and tangible benefits
20     will flow from it -- well, intangible, let's say.
21     Because we will have greater power, we will be able to
22     do more than should the Commission, in reaching the
23     goal of equity which you yourself have put there on a
24     case-by-case basis, consider that over and above
25     whatever benefits test may or may not have been applied


 1     when transfers occur and of course when there are new
 2     licences to be given.
 3  10934                There has been a lot of talk inside
 4     the conventional system as to whether multi-station
 5     licensees should be required to do more because of
 6     their power and how can we get equity.  Should that
 7     also be considered when you are looking at someone who
 8     has more licences or is more concentrated?
 9  10935                I am not questioning the
10     contribution.  I am questioning what your view is as to
11     how it can be equitable.
12  10936                MR. CASSADAY:  Our view is that the
13     broadcasting business is becoming increasingly global. 
14     The competition is Time Warner, NewsCorp, Disney.  We
15     need strong integrated -- whether it is horizontal or
16     vertical -- Canadian companies that can withstand this
17     global competition.
18  10937                The fact of the matter is that small
19     is nice but it is no longer beautiful.  We need to
20     encourage strong players.
21  10938                The fact that a particular company is
22     able to assemble a group of assets that make them more
23     efficient makes them capable of making a contribution
24     to the system.  And as they appear before you, capably
25     doing their job, you will be able to make judgments as


 1     to what additional contribution they can make to the
 2     system.
 3  10939                You know, clearly in the area of
 4     specialty and probably in the area of conventional, we
 5     would argue that one size does not fit all.  We are in
 6     a business which is increasingly becoming one of
 7     picking targets and selectively doing a job, and that
 8     is going to require a very rifle-like approach to
 9     regulation as opposed to a shotgun.
10  10940                THE CHAIRPERSON:  That may not fit
11     within my comments, because it seems to show the
12     opposite.  Pelmorex is coming up next.  They may smile
13     at the suggestion that small, in terms of many
14     licences, is not beautiful.
15  10941                MR. CASSADAY:  Every player will have
16     different strategies.  Mr. Morrissette pursued an
17     aggressive international expansion plan.  He took Door
18     B instead of Door A, and he may change strategies again
19     in the future.  He has done a wonderful job running a
20     terrific service.  And I am sure he would love to talk
21     to you about 10-10-10 as well and his drama commitment.
22  10942                THE CHAIRPERSON:  My final question.
23  10943                At page 2 of your submission, you
24     have a list of what you consider to be Shaw's
25     contribution to Canadian programming.


 1  10944                I know that it is muted because, to
 2     the extent that you are successful as a cable operator,
 3     more money flows to various parts of the system.  But
 4     the contribution to production funds, that is the
 5     subscribers' contribution.  Shaw's involvement is to
 6     the extent that they have penetration; it is high or
 7     low.  But that is a levy on the subscriber.
 8  10945                MR. SHAW:  Yes, that is correct. 
 9     That is the 5 percent --
10  10946                THE CHAIRPERSON:  Yes, I understand
11     that.
12  10947                MR. SHAW:  That number is not correct
13     in there.  That was last year's number of $7 million;
14     that has more than doubled this year, to close to $12
15     million.
16  10948                THE CHAIRPERSON:  The $51 million
17     that you pay to Canadian specialties, that is because
18     you are selling their services.
19  10949                MR. SHAW:  That is correct.
20  10950                THE CHAIRPERSON:  It is not a loss. 
21     It is a business --
22  10951                MR. SHAW:  No.  That is a flowthrough
23     on funding that goes back into the system.
24  10952                THE CHAIRPERSON:  And the same thing
25     with the second line of $23 million.


 1  10953                MR. SHAW:  That is correct.  And then
 2     of course the --
 3  10954                THE CHAIRPERSON:  I would divide that
 4     column differently, for the reasons that are obvious.
 5  10955                MR. SHAW:  Okay.
 6  10956                THE CHAIRPERSON:  Fortunately for
 7     you, I don't have a typewriter or computer here.
 8  10957                Commissioner Cardozo has questions.
 9  10958                COMMISSIONER CARDOZO:  Thank you.  I
10     have a couple of questions; the first one following on
11     from questions by the Chair on the matter of promotion.
12  10959                You talked about wanting your
13     promotion to be Canadian programming, and I wonder if
14     you can help me with this.  It has come up a few times.
15  10960                One of the other sides to this, and
16     the argument that has been made, is that if you have
17     programming, it is in your best business sense to
18     promote it.  You don't need regulation to encourage you
19     to do that; that that is something you ought to do.
20  10961                I am thinking beyond that.  We talk
21     about things like "Entertainment Tonight".  There is
22     nothing stopping somebody from having an "Entertainment
23     Tonight".  We have sort of that happening with "Open
24     Mic", the Mike Bullet show on Comedy and CTV.  We have
25     Pamela Wallin.


 1  10962                We have had other shows like Ralph
 2     Benmurgy.  So there is a certain amount of that that
 3     has happened, and more could happen.
 4  10963                My question is:  What is your
 5     reasoning for asking us to encourage that when it is
 6     something that makes business sense and something which
 7     you would normally do yourself?
 8  10964                MR. CASSADAY:  I am going to ask
 9     Vicki to comment on this in the context of CMT, because
10     there are some things --
11  10965                For example, in CMT's licence we are
12     regulated to do certain things and yet not encouraged
13     to do other things that we believe are in the best
14     interests of the artists and the development of
15     Canadian content.
16  10966                Perhaps, Vicki, you could talk about
17     some of the limitations that you have to live with as
18     the regulations are currently conceived.
19  10967                MS DALZIEL:  What we found early on
20     in our licence is that people are looking -- they do
21     watch a music video network obviously, but what it does
22     not do is it does not help to create the Canadian star
23     system that we have all talked about and that we are
24     all looking for.
25  10968                We discovered that the more profiling


 1     we could do on the artists, by way of one-on-one
 2     interviews, news programs, entertainment programs, the
 3     more interest the viewers had in these entertainers.
 4  10969                The challenge is that we have gone
 5     ahead and done what is allowable for us to do under a
 6     10 percent window, other than a video flow, these types
 7     of programs.  Could we do more Canadian programming in
 8     this venue?  Absolutely, if the formulas was there to
 9     allow us to do that.
10  10970                The programming that we have also
11     done, these news and entertainment features, the
12     interview programs, the concert programs, do not
13     account for any Canadian content for our network.
14  10971                So although we do it because we know
15     our viewers need it and the entertainers need it in
16     order to create that strong Canadian star system, we
17     are not recognized for that programming from a Canadian
18     standpoint.
19  10972                COMMISSIONER CARDOZO:  You would draw
20     a difference between an "Entertainment Tonight" program
21     versus 30-second commercial type --
22  10973                MS DALZIEL:  Exactly.  Currently, we
23     are at 90 percent video flow.  That will not create a
24     star system by just playing the music.  We must do the
25     types of programs and promotion that we talked about.


 1  10974                In order to do that from our
 2     standpoint, it is expensive; it is timely.  We have a
 3     limited amount that we can do with that 10 percent
 4     window.
 5  10975                COMMISSIONER CARDOZO:  If you had a
 6     program that you wanted to be counted as Canadian
 7     content, it would not exclusively deal with Canadian
 8     artists then.
 9  10976                MS DALZIEL:  Most of the programming
10     that we have done has been exclusively Canadian, in the
11     sense of a lot of the concert programming.
12  10977                You are correct, in the news and
13     entertainment element we are forced to be much broader
14     obviously because the audience wants to know everything
15     that is going on.
16  10978                We are in a very narrowcast country
17     music area or arena, so we at least have to cover every
18     spectrum within that arena.
19  10979                MR. CASSADAY:  Commissioner Cardozo,
20     to build on a point that Commissioner Wylie was talking
21     about, this whole area of integration:  We really
22     believe at the core of our business -- in Jim's opening
23     comments he talked about wanting to do these two
24     business segments superbly -- that we need champions of
25     industry in Canada.  We need outstanding significant


 1     companies.
 2  10980                When it comes to the area of
 3     promotion, if you were to look at the P&L of a company,
 4     you have fixed costs; you have your program costs,
 5     which are fixed commitments; you have your conditions
 6     of licence, which are fixed commitments.  You have your
 7     requirements to your shareholders, and then you have
 8     discretionary costs, your variable costs.  And
 9     promotion is a variable cost.
10  10981                So yes, while your comment is true
11     that it is in the best interests of everyone to promote
12     their schedule, when you are forced to make tough
13     decisions about what survives and what dies, promotion
14     is often on that "die list".  It is a discretionary
15     expense item.
16  10982                If you are tight, if you are worried
17     about pre-Christmas sales and about the impact that
18     that might have on advertising, or if you are worried
19     about cost inflation you have had in programming, what
20     gets cut are the discretionary items.
21  10983                If we create a system in Canada where
22     we encourage companies to grow, where we encourage
23     synergies to be created, where we encourage
24     efficiencies to be created, there is going to be more
25     money for promotion; there is going to be more money


 1     for research; there is going to be more money for these
 2     discretionary items that typically don't end up -- they
 3     get planned, but they don't end up getting executed.
 4  10984                So a very important point that we
 5     would like to leave here today is that we believe for
 6     all of this stuff to get done, for improved Canadian
 7     and more of it, for improved promotion and more of it,
 8     for better research so we can serve our viewers and our
 9     advertisers, we need to create these larger companies. 
10     That is the critical success factor.
11  10985                COMMISSIONER CARDOZO:  Do you count
12     your website as part of your promotion strategy?  Are
13     you doing a lot of promotion through your website?
14  10986                MR. ROBERTSON:  Yes, we do.  It is,
15     in part, programming, if you like, because we are
16     communicating with our viewers.  But certainly it
17     promotes the programs, which is a very key element of
18     the plan.
19  10987                COMMISSIONER CARDOZO:  The other
20     question deals with the question of diversity in
21     programming.
22  10988                Earlier this week we had
23     representation on issues of aboriginal representation
24     in television. We have also included in our Public
25     Notice the issue of ethnic and racial diversity in


 1     programming.
 2  10989                My sense of YTV and Treehouse is that
 3     you do some fairly good stuff in terms of ethnic and
 4     racial diversity; not much in terms of aboriginal
 5     diversity.
 6  10990                I would like your comments in terms
 7     of how you go about it.  Does it happen coincidentally? 
 8     Do you have to think about it?  What suggestions do you
 9     have for us?
10  10991                Also with regard to CMT, do you think
11     about the diversity of genres and the types of music
12     that you play within country music -- which you have
13     creatively interpreted not too narrowly?
14  10992                MR. MOSS:  I would like to answer
15     that.
16  10993                First of all, thank you for noticing. 
17     I think we are very proud of the fact that we do
18     provide a kind of ethnic and racial diversity on YTV.
19  10994                It is, I suppose you could say, soft
20     policy.  We don't have quotas, but we are all cognizant
21     of the fact that we live in a multicultural and
22     multiracial country and that the experience of the
23     children that are watching YTV ought to be reflected on
24     the screen when they watch YTV, so that they don't feel
25     they are in a different world.  We try to be as


 1     inclusive as possible.
 2  10995                In terms of our co-productions, again
 3     we can suggest and always encourage and say:  "We want
 4     this cast to reflect the cultural diversity of the
 5     country", without specifically saying that you have to
 6     have one person of this colour, one person of that
 7     colour and one person of that colour.
 8  10996                That is a policy that we do undertake
 9     with all of our co-production.
10  10997                In terms of aboriginal, that is much
11     harder.  The only initiatives that we currently have
12     are discussions of a co-production with Inuit
13     Broadcasting to discuss a way of bringing Nunavut to
14     life for southern kids -- kids who don't live in the
15     Northwest Territories and will not be living in the new
16     country.
17  10998                COMMISSIONER CARDOZO:  From the
18     funding mechanism, there has not been any discussion or
19     encouragement in terms of diversity, has there?
20  10999                MR. MOSS:  No mention at all.
21  11000                MS DALZIEL:  From the CMT standpoint,
22     we are a unique broadcaster in that sense.  But the
23     playing field is completely wide open to any musician
24     from any genre who wants to apply and be part of our
25     broadcast.  We encourage that, and we represent


 1     virtually every corner of this country, including
 2     northern Canada, east to west coast.
 3  11001                It is wide open.  There are no
 4     boundaries.
 5  11002                COMMISSIONER CARDOZO:  Do you have a
 6     sense of whether you do get -- sometimes if it is
 7     nobody's responsibility, it is open to everybody. 
 8     There may be certain systemic things that don't get
 9     reflected.
10  11003                I am thinking of -- whether it is
11     Cashton or Susan Aglukark, are they able to find their
12     way on to --
13  11004                MS DALZIEL:  You talk about the broad
14     boundaries that we have on our network.  We like to
15     believe that by defining country, whether it is Celtic
16     music, whether it has a different flair than what
17     people would normally consider core country, it opens
18     up a possibility for people who might have a different
19     type of music slant.  It opens up an opportunity for
20     them to be on our network.
21  11005                Whereas if we were a traditional
22     country network, I think there is less opportunity
23     there.
24  11006                We have roots music, core country
25     music, which does allow the Susan Aglukarks to have a


 1     definite place on our network.  We encourage more; and
 2     any we could encourage more, we would.  Our viewers
 3     look to it.
 4  11007                To date we have invested over $8.5
 5     million in the production of video and the incentive of
 6     artists.  So we are behind it.
 7  11008                We realize that our success is
 8     completely dependent upon the star system and the
 9     quality of these acts that can come to our network.
10  11009                COMMISSIONER CARDOZO:  Thank you very
11     much.
12  11010                Thank you, Madam Chair.
13  11011                THE CHAIRPERSON:  Commission Cardozo
14     raised promotion, which reminded me of another question
15     that I wanted to ask you and did not.
16  11012                At the top of page 12 of your written
17     submission, you mention the use of local avails and how
18     these are helpful in promoting Canadian programming.  I
19     guess that is your point.
20  11013                The use of local avails, is any of
21     that for free, or is it always paid for by the service?
22  11014                MR. SHAW:  The local avail system
23     that is in place, that was applied for to the
24     Commission, is a cost recovery system to install.
25     Because Shaw is a national base, I think it took us $3


 1     million of total capital outlay to put the system in
 2     place.
 3  11015                It is open to everybody.  The mix is
 4     prescribed that 75 percent of this is available for
 5     outside parties.  Shaw is eligible to use 25 percent. 
 6     We don't even use our 25 percent.  It is open to
 7     everyone.  We encourage lots of people to come on.
 8  11016                As you know, if you have ever watched
 9     an event and seen the same commercial about three times
10     in a row, the next time you see it you just phone up
11     and say:  "I want that off."
12  11017                It is not something that you can just
13     blitz and use yourself all the time.  I think we were
14     saying to people that were on there, if they wanted to
15     run -- there are about a hundred and some commercials a
16     day.  I think the cost was $8 for a commercial to run,
17     or something.
18                                                        1035
19  11018                THE CHAIRPERSON:  By cost recovery
20     you mean the amortization of the capitalization, the
21     maintenance and management of stations.
22  11019                MR. SHAW:  Yes.  We have one person
23     that runs it in a program and across Canada.  People
24     would send their commercials in.
25  11020                THE CHAIRPERSON:  So it's relatively


 1     inexpensive and could be effective.
 2  11021                MR. SHAW:  Yes.
 3  11022                THE CHAIRPERSON:  I see, for example,
 4     quite a bit of it on A&E.
 5  11023                MR. SHAW:  It will be all on the U.S.
 6     services.
 7  11024                THE CHAIRPERSON:  No, but on some
 8     services that you know have high viewership it would be
 9     more valuable.
10  11025                MR. SHAW:  Right, and they cross-use
11     it.
12  11026                THE CHAIRPERSON:  Thank you.
13  11027                MR. SHAW:  Thank you.
14  11028                THE CHAIRPERSON:  Commissioner
15     Wilson.
16  11029                COMMISSIONER WILSON:  Hi.  I have a
17     couple of areas that I want to look at with you.  One
18     is further to some questions that Commissioner Wylie
19     was pursuing.
20  11030                Mr. Cassaday said that the overall
21     aim is to create more and better programming for the
22     Canadian system.  I want to talk to you, just so that I
23     understand more clearly, about the top-up fees from the
24     licence fee program.  You may want to get your
25     Vice-President of Corporate Development involved in


 1     this answer.
 2  11031                What I am struggling with is if the
 3     aim is to create more programming, how does it help if
 4     we allow top-up fees to count as part of the
 5     broadcasters' Canadian content expenditures?  How does
 6     that help to create more programming?
 7  11032                I will give you the example that I
 8     wrote down here.  Maybe I'm just completely confused,
 9     but you can tell me.
10  11033                Let's say that the expenditure
11     requirements are, you know, 5 per cent of your
12     broadcast revenues.  Then you get licence top-up fees
13     which are equal to about another 1 per cent.  That
14     means the total you are spending is actually 6 per cent
15     on Canadian programming.
16  11034                If the licence top-up fees are
17     included as part of your Canadian expenditures, then
18     you are only spending 5 per cent and 1 per cent of that
19     5 per cent is actually money that you didn't spend. 
20     You got it through the licence fee top-up program.
21  11035                How does that help to create more and
22     better programming if you are not putting the whole 5
23     per cent in and then adding the licence fee top-up, but
24     in fact you are only putting in 4 per cent.
25  11036                MR. CASSADAY:  Let's take the example


 1     -- let's use your analogy of 5 per cent.  Let's take
 2     the example of "Due South".  "Due South" has a price
 3     tag associated with it of, say, $1 million.
 4  11037                Well, 5 per cent of a million dollars
 5     is more than 5 per cent of a show that has less
 6     Canadian content in it, what we have come to call an
 7     industrial show.
 8  11038                COMMISSIONER WILSON:  Yes.
 9  11039                MR. CASSADAY:  Now the broadcaster is
10     faced with the decision of saying "Okay, I've got to
11     spend 5 per cent, but if I spend the money on a "Due
12     South" and I get the top-up, I am going to get a lot
13     better program on the air than if I am completely
14     wedded to just spending a fixed dollar amount".
15  11040                I think the opportunity is to
16     encourage broadcasters to try to find a way to cobble
17     together the best shows, not to simply spend the money
18     at the prescribed level.
19  11041                MR. TEICHER:  To elaborate on that
20     answer, I guess what we would say is the LFP
21     contribution is absolutely essential to making, I
22     think, the high quality Canadian programming we
23     support.  I don't believe it's essential that
24     broadcasters be able to use it as part of meeting their
25     condition of licence.  The math is easy.  It is the way


 1     you describe it.
 2  11042                If they are using it to get to their
 3     prescribed condition of licence level, then they can
 4     sponsor less programs.
 5  11043                COMMISSIONER WILSON:  Yes.
 6  11044                MR. TEICHER:  The math is clear and
 7     irrefutable.  I guess the risk is if you sort of say
 8     they are going to use the LFP envelope anyway so why
 9     don't we just gross up their condition of licence
10     contribution on the theory they will get to the LFP
11     envelope, then I think it makes it more complicated,
12     frankly, for everybody in the system in dealing with
13     something with LFP where the rules change from year to
14     year to try and accommodate the changes in the
15     industry.
16  11045                Probably the LFP contribution should
17     be considered two different ways, one way in terms of
18     how do we finance programs and the importance of it and
19     another way in terms of how can licensees use it in
20     terms of meeting their condition of licence
21     requirements.
22  11046                COMMISSIONER WILSON:  Okay, that's
23     the answer I was looking for.  Maybe I should admit I
24     was looking for a specific answer when I asked the
25     question.  Okay.  I just wanted to verify that I


 1     understood.
 2  11047                The second area that I want to talk
 3     about is this area of promotion.  I actually want to
 4     tie it to the CAB's proposal on viewership.  It may be
 5     different for you since you run specialty channels, but
 6     you have got a pretty wide range of experience sitting
 7     at the table.  Maybe you can try and shed some more
 8     light on how that works.  I actually raised this with
 9     Astral yesterday.
10  11048                Mr. Cassaday, you made the point that
11     promotion is not integral to the system.  I guess I can
12     understand that from a purely business perspective when
13     you are making hard decisions about you have so much
14     money and you have to decide how you are going to spend
15     it.  That can be one of the first things to be pushed
16     off to the side.
17  11049                In terms of generating revenues for
18     your companies, and maybe again this is a very
19     simplistic way of looking at it, but if you promote the
20     programs, and this is part of what the CAB is
21     suggesting, that they get credit for promotion as part
22     of their Canadian content requirement and through
23     promotion they build viewership.
24  11050                The benefit to them, it must be, at
25     least in my mind, that the more viewers you have, the


 1     better the ad sales are.  The more ad sales you have,
 2     the more revenues you make.  The more revenues you
 3     make, the more money you can put towards Canadian
 4     programming.
 5  11051                It wasn't laid out that way in their
 6     proposal, but is that how it works?  If that is how it
 7     works, then why is promotion not integral?  Why would
 8     you not spend the money on it in order to build the
 9     viewership, in order to generate the ad sales, in order
10     to generate larger revenues for the company?  I will
11     stop short of greater Canadian programming, but --
12  11052                MR. CASSADAY:  Commissioner Wilson,
13     perhaps I'm wrong here, but I don't believe I said that
14     it was not integral.  I said it was variable cost and
15     as a result was cancellable.  If I did say it wasn't
16     integral, it is integral.  Promotion is an important
17     part of our business.
18  11053                If you were to take, for example, the
19     case of Coca-Cola.  Coca-Cola is a sustainable brand. 
20     The notion of committing advertising funds on a
21     consistent basis, non-cancellable, the wisdom of that
22     is irrefutable.
23  11054                In the case of television where, you
24     know, the shelf life could be a short as three episodes
25     or as long as eight years, quite variable, regardless


 1     of the amount of promotion that's put in, it becomes
 2     much more of a discretionary item.  The level of
 3     commitment that a broadcaster is willing to make to a
 4     perishable product like a program can't be looked at
 5     with the same linear logic that you applied to your
 6     analysis.
 7  11055                We don't know.  We could believe --
 8     Peter has just committed to a show that we are really
 9     excited about where young kids will submit scripts and
10     we will shoot their ideas.  It's a terrific idea.
11  11056                Now, should we go out and spend a
12     million dollars behind that show because we believe
13     it's such a terrific idea?  Well, I guess if we were
14     encouraged to because it was part of our overall
15     commitment and we were willing to put our money where
16     our mouth is, we probably would.
17  11057                The way it is now where it's purely
18     discretionary, that's a real crap shoot for us to put
19     that on because, you know what, we may find that their
20     production problems are so huge that it doesn't warrant
21     continuing or we may find that our audience just isn't
22     turned on by that show at all.  Now we have spent a
23     million dollars up front to promote it, we get no
24     return.
25  11058                When Doug Ivester, the President of


 1     Coca-Cola, makes his decision, he is assured that
 2     Coca-Cola is going to be available on the shelves after
 3     the impact of the advertising has been felt.
 4  11059                COMMISSIONER WILSON:  That's helpful. 
 5     That's great.
 6  11060                Thank you.
 7  11061                THE CHAIRPERSON:  Commissioner
 8     McKendry.
 9  11062                COMMISSIONER McKENDRY:  Thank you,
10     Madam Chair.
11  11063                Just on your last point, Mr.
12     Cassaday, is that why then you would direct a lot of
13     your promotion towards the YTV brand, or do you?
14  11064                MR. CASSADAY:  Certainly the YTV
15     brand is sustainable.  If we believe we can create a
16     brand that kids find is cool, or now this year weird,
17     and some place they want to gravitate to, then we have
18     got a chance to hold them as we present various
19     programs.
20  11065                We have used the analogy that
21     television is a bit like a buffet table now.  We know
22     there is a wide array of choices.  How do you get them
23     to start loading up their plate with what you have got
24     to offer?  The way to do that is to use the superbrand,
25     which is YTV in the case of our children's property,


 1     CMT in the case of the other.  If you can draw them to
 2     the brand and then let the programs stand on their own,
 3     terrific.
 4  11066                The secondary way you go at it is to
 5     try to create specific appeal or specific draw to a
 6     program by specific promotion.  This year we are doing
 7     a combination of both in both YTV and CMT's case, but
 8     certainly the stuff we do on brand building we know is
 9     more sustainable than anything we do on a perishable
10     program.
11  11067                COMMISSIONER McKENDRY:  Now, does
12     Coke have the same problem in the sense that when they
13     introduced Cherry Coke -- is that a perishable product?
14  11068                MR. CASSADAY:  Absolutely.  The risk
15     profile on that is far greater than the risk profile on
16     their core business.
17  11069                COMMISSIONER McKENDRY:  So the Cherry
18     Coke is akin to a specific Canadian program in your
19     business.
20  11070                MR. CASSADAY:  I don't know if the
21     analogy is exactly correct.  I did start it, so I guess
22     I got to finish it.
23  11071                The risk profile on new products is
24     similar to the risk profile we have on our television
25     programs.


 1  11072                COMMISSIONER McKENDRY:  So in a sense
 2     the marketing problem that you face is similar to the
 3     marketing problem Coke faces.  They have to sustain
 4     their Coca-Cola brand, but on the other hand, when they
 5     introduce new products, which is a perishable product I
 6     take it until it wins consumer acceptance, it's really
 7     just like your business in that sense.
 8  11073                MR. CASSADAY:  Right.  I can't resist
 9     the temptation of just reinforcing the other point we
10     made.  Again, Coke is a big successful company with
11     access to large capital streams, high capitalization.
12  11074                If we can see a way clear in Canada
13     to creating these strong Canadian companies that can
14     sustain themself despite a huge failure, i.e. a huge
15     investment in a major new product or program that
16     fails, then we are serving the country better.
17  11075                Right now with so many small players
18     that can't afford to take a risk because they can't
19     afford to fail, we hurt ourselves.
20  11076                Our vision of the future, which talks
21     about companies with much more horizontal integration
22     and perhaps much more vertical integration, is a way to
23     ensure that we have this substantial and financial
24     wherewithal to withstand the risks that are required on
25     new programs and the promotion that is required to


 1     support them and make people aware of them.
 2  11077                COMMISSIONER McKENDRY:  And I assume
 3     Coke has to pay attention to its core product.  It
 4     can't just sit back and say "Well, everybody drinks the
 5     stuff and it's always going to be on the shelves". 
 6     They must continue to market it, to pay attention to
 7     it.
 8  11078                MR. CASSADAY:  We certainly hope they
 9     think that way.
10  11079                COMMISSIONER McKENDRY:  The reason I
11     wanted to ask you about that is one of the things I am
12     having difficulty wrestling with in the proceeding that
13     we have before us, and I know you have a lot of
14     marketing experience, is that over the years Canadian
15     program expenditures have gone up dramatically.
16  11080                The Canadian Association of
17     Broadcasters provided a schedule that shows that they
18     have tripled between 1985 and 1997.  At the same time
19     the product, the viewership of the product, has
20     remained flat or even declined slightly, whether it's
21     all Canadian programming or the category 7, 8 and 9.
22  11081                Huge increase in expenditures, flat
23     consumption of the product.  Is that because Canadian
24     broadcasters haven't paid attention to their product? 
25     Is it a marketing problem?


 1  11082                MR. CASSADAY:  There are a number of
 2     factors.  There has certainly been tremendous
 3     fragmentation over that time period.  We have seen the
 4     erosion of conventional television shares.  Holding its
 5     share of viewing in an environment where there are a
 6     multitude of additional choices is perhaps an arguably
 7     not bad performance.
 8  11083                On the other hand, what we need to
 9     make sure is that the quality of promotion is on a
10     level with the quality of the program.  You know, there
11     is the expression you can lead a horse to water, but
12     you can't make it drink.  Great promotion can cause
13     sampling of a program, but ultimately the program has
14     to justify people coming back to trying it a second
15     time and a third time.
16  11084                I think the combination of factors
17     that we have got to strive for is outstanding promotion
18     and commitment to promotion, coupled with continued
19     improvement in the quality of our programs.
20  11085                If we can draw people to them and if
21     they can hold them, you know -- I think we are all
22     excited about seeing "Power Play".  Certainly the
23     promotion leading up to it has been outstanding.  Will
24     the program deliver commensurate with the enthusiasm
25     that is being created?  Let's hope so.  We will have


 1     another success story on our hands.
 2  11086                COMMISSIONER McKENDRY:  Did I hear
 3     your correctly that it's not bad performance that so
 4     much money would be spent on Canadian programming over
 5     that period, tripling, while viewing stayed flat?
 6  11087                MR. CASSADAY:  No.  Again, in an
 7     environment where we have gone from, you know, say 20
 8     channels to 80 channels, one could take the view, and
 9     certainly none of us are thrilled with the fact that
10     3.1 per cent of viewership is to Canadian drama despite
11     this promotion, but one could take the view of how bad
12     could it have been had we not supported it as
13     aggressively as we did.
14  11088                As I said, I think that there are two
15     aspects to this.  One is the quality and commitment to
16     promotion and the quality of the program and the
17     ability to hold the viewer.
18  11089                Are we thrilled with where we are at? 
19     I don't think any of us are thrilled.  Are we
20     optimistic about where we can go?  I think all of us in
21     the industry are very optimistic about the future of
22     Canadian broadcasting.
23  11090                COMMISSIONER McKENDRY:  Let me ask
24     you a question about the sharing of first windows that
25     you discussed with Commissioner Wylie.  I just wanted


 1     to make sure I understood that.
 2  11091                The way you described it was that the
 3     share would be between a specialty and a conventional
 4     broadcaster.  I take it that there would be no
 5     incentive on the part of two conventional broadcasters
 6     to share because they compete directly with each other.
 7  11092                Is that why it would be a specialty
 8     and a conventional?
 9  11093                MR. CASSADAY:  I don't think we
10     talked illustratively in the context of sharing between
11     specialty and conventional.
12  11094                What we meant in the broadest sense
13     is we need a system that's collaborative in every
14     respect.  If it makes sense at some point in the future
15     for two conventional broadcasters to work together,
16     perhaps a family show that appears at seven o'clock on
17     one network would make an excellent program on Saturday
18     for another, the key is to get the programs produced
19     and let the relationships evolve.
20  11095                COMMISSIONER McKENDRY:  Should you
21     see more than two broadcasters sharing a first window?
22  11096                MR. CASSADAY:  There could be models
23     where that would work, Commissioner.  Maybe, Peter, you
24     have a comment on this.
25  11097                Again, there are so many


 1     opportunities for exposure, just going back -- there's
 2     an old colleague of mine who used to say that "Phantom
 3     of the Opera" was a re-run after its opening night and
 4     yet it has been on for ten years.  There are still
 5     people filling the theatre every day who haven't seen
 6     the show.
 7  11098                The more opportunities we have to
 8     expose the product, the more opportunities we have to
 9     start building the audiences.
10  11099                COMMISSIONER McKENDRY:  So in this
11     proceeding if we took your suggestion to allow more
12     flexibility with respect to sharing first windows we
13     shouldn't, in your view, restrain it to a specialty and
14     a conventional, that we should leave it up to the
15     parties to decide what would be appropriate.
16  11100                MR. CASSADAY:  That would be my
17     sense.
18  11101                MR. TEICHER:  Would it be helpful to
19     sort of look at it from a financing model point of
20     view, to maybe put a point on it?
21  11102                Part of the difficulty is, for
22     example, if you don't want to restrict in the kids'
23     television area to just doing puppet shows, which are
24     low cost to do, therefore a 15 per cent threshold is
25     much lower.


 1  11103                If you want a diversity of programs,
 2     you like kids to experience live action drama,
 3     animation, which is quite a bit more expensive, or
 4     computer generated animation, which is again quite a
 5     bit more expensive, you are dealing with the same 15
 6     per cent threshold.
 7  11104                Let's take an example of a show that
 8     has a $500,000 budget.  A producer will come to us and
 9     say "At minimum, I need a licence fee of 15 per cent or
10     $75,0000 in order to get to the fund because in
11     combination with the fund and perhaps the tax credit
12     mechanism and some foreign pre-sales, I can make my
13     show".
14  11105                Right now we may have a choice of
15     saying yes, we can support you at that $75,000 level or
16     no, we can't.  Therefore, that producer may be in a
17     position to make their show.  If we were in a position
18     to say well, if we could share the cost with other
19     broadcasters, you could make your threshold.
20  11106                The difficulty is if only one
21     broadcaster can get recognized for the first run, only
22     one broadcaster wants to put up significant dollars. 
23     For example, if there's a second window with a second
24     broadcaster that won't get first run credit, they may
25     say "Well, I'll put up 2 per cent or 3 per cent of the


 1     budget, but I won't come up with a lot of money because
 2     I don't get the first credit".
 3  11107                One of the thoughts we have is if we
 4     are driving for more programming, if there's an
 5     opportunity for more than one broadcaster to take first
 6     run credit, then they will both step up to the plate
 7     with significant dollars which will enable you to meet
 8     the threshold, which will allow more production to get
 9     made.
10  11108                The good news is we have had the
11     experience that a show can run on more than one network
12     and succeed for both networks, so the market tells you
13     it can be done.  The difficulties in financing
14     independent production hand in hand with the
15     requirements and condition of licence may make it
16     difficult for a number of shows to get financed.
17  11109                COMMISSIONER McKENDRY:  Thank you.
18  11110                I want to make sure I understand the
19     new environment for specialty services that you talked
20     about.  They are in my notes.
21  11111                The four characteristics that I took
22     down were limited advertising revenue, subscriber
23     revenue dependent, no or little administrative expenses
24     I think you said, and no bricks and mortar.
25                                                        1055


 1  11112                Then you went on, I think, to say
 2     that in that environment if one could graft a specialty
 3     service onto an existing structure -- that those were
 4     the reasons that it was necessary to graft a specialty
 5     service onto an existing structure.  The benefits that
 6     I took down that you set out -- and really that's what
 7     I want to understand better -- is affiliation support
 8     and research support.  What is affiliation support?
 9  11113                MR. CASSADAY:  A couple of points,
10     first of all, why this new model works.  Shaw has made
11     a commitment to digital.  We are committed to having
12     400,000 digital boxes in place over the next four years
13     or so.  We have DTH out there, probably another
14     million.  So, there are going to be new opportunities
15     for new channels, but they are not going to be the
16     analog model of the past where you are going to be
17     guaranteed five to eight million households.  So, you
18     are going to have to cut your cloth accordingly.
19  11114                The point is that the way to do that
20     efficiently -- and this doesn't mean new players can't
21     come in, but they are going to have to find partners to
22     participate.  We believe that there will be new
23     services launched with as few as 10 people, but they
24     will program 24 hours a day and they will have levels
25     of Canadian content that are satisfactory to the


 1     Commission when they licence them.
 2  11115                We used two illustrative examples in
 3     the case of CMT as to how they are benefiting from
 4     their association with YTV.  One was research.  There
 5     is an outstanding research department at YTV that CMT
 6     has access to for all of their viewer data so that they
 7     can begin to translate the impact of their audience to
 8     their advertiser.
 9  11116                The other area that they used is
10     Paul's affiliate relations people -- not Paul's, but
11     Shaw's media affiliate relations people dealing with
12     all the cable companies across the country on the
13     carriage issues and the placement of tiers and the
14     contracts.  These are all expenses that are shared as
15     opposed to absorbed individually by CMT, who has much
16     lower revenues than YTV, but CMT has much higher
17     revenues than perhaps the next tier of specialties will
18     have.
19  11117                Does that help?
20  11118                COMMISSIONER McKENDRY:  That helps. 
21     I understand the concept of research support. 
22     Affiliation support refers to the fact that, in your
23     case, the carrier has digital --
24  11119                MR. CASSADAY:  No.  Affiliation
25     support basically is a sales representative --


 1  11120                COMMISSIONER McKENDRY:  Oh, I see.
 2  11121                MR. CASSADAY:  -- who is dealing with
 3     the customer, who in this case is the cable company or
 4     Star Choice or ExpressVu or LookTV, those people that
 5     carry the CMT signal.  We have to arrange carriage
 6     terms, contract terms, payment terms, advise them of
 7     program changes and so on, and that is a significant
 8     job that requires a lot of logistics.
 9  11122                COMMISSIONER McKENDRY:  But it's your
10     view that specialty services that can't graft onto an
11     existing structure will be able to compete effectively
12     against those that can and take advantage of the things
13     that you have just discussed with me?
14  11123                MR. CASSADAY:  It's our view that in
15     a world that perhaps has access to 600,000 or 800,000
16     households, it's hard to imagine how they could survive
17     with significant capital appropriations on redundant
18     assets like bricks and mortar.  Those days are gone. 
19     It doesn't mean new players can't join the industry, it
20     just means they are going to have to find partners. 
21     It's hard to imagine that there will be another TSN,
22     for example, in this environment.
23  11124                COMMISSIONER McKENDRY:  Those were
24     all the questions I had, but perhaps Commissioner Wylie
25     has one.


 1  11125                Thank you, Madam Chair.
 2  11126                THE CHAIRPERSON:  Commissioner
 3     Wilson?
 4  11127                COMMISSIONER WILSON:  I have one more
 5     question.  Mr. Cassaday, I want to pick your brains on
 6     this viewership thing.  I'm sort of like a dog with a
 7     bone on the viewership issue.  We don't have to stick
 8     with my linear example.  Feel free to be as lateral as
 9     you want.
10  11128                How does it help the system to set
11     viewership as the target?  In the absence of that
12     linear example that I gave you, how does it help the
13     system?
14  11129                MR. CASSADAY:  We have a number of
15     ways of measuring Canadian content, the contribution of
16     Canadian content dollars.  Many of the broadcasters
17     have dollar commitments on Canadian content.  That's
18     one measurement device.
19  11130                COMMISSIONER WILSON:  Exhibition.
20  11131                MR. CASSADAY:  Hours is another
21     measurement device.
22  11132                COMMISSIONER WILSON:  Right.  Option
23     A and Option B.
24  11133                MR. CASSADAY:  Yes, and I think what
25     the CAB was proposing over and beyond that is a


 1     commitment on the part of the system to elevate
 2     viewership.
 3  11134                COMMISSIONER WILSON:  Which is great,
 4     that's what we all want, but how does it help the
 5     system?  For example, how does it help create more
 6     programming or more exhibition or better exhibition? 
 7     What's the relationship?
 8  11135                MR. CASSADAY:  The relationship, of
 9     course, is that as we increase viewership, we
10     ultimately increase revenues that are derived from that
11     viewership and if companies are contributing to
12     Canadian content as a percentage of their revenue,
13     ultimately the pie just keeps getting bigger.
14  11136                COMMISSIONER WILSON:  So, my linear
15     example does work?
16  11137                MR. CASSADAY:  In that particular
17     case, yes.
18  11138                COMMISSIONER WILSON:  So then all of
19     the suggestions about including promotion expenses as
20     part of your Canadian content expenditure commitments
21     means that that risk that you were talking about, the
22     incredible risk of promoting a product that may have a
23     very short shelf life, that risk would be assumed as
24     part of the Canadian content expenditure?
25  11139                MR. CASSADAY:  That's correct.


 1  11140                COMMISSIONER WILSON:  So, you
 2     wouldn't really be taking the risk?
 3  11141                MR. CASSADAY:  You are taking the
 4     risk, but it's now a fixed cost.  So, you have the
 5     decision to make as to whether or not you want to
 6     allocate that fixed cost to programming or to
 7     promotional expense or to other avenues that you
 8     have --
 9  11142                COMMISSIONER WILSON:  To get people
10     watching?
11  11143                MR. CASSADAY:  Right.
12  11144                COMMISSIONER WILSON:  Okay.  That's
13     great, thanks.
14  11145                THE CHAIRPERSON:  One last question,
15     Mr. Cassaday.  In relation to conventional services,
16     you have used the analogy often that you can take them
17     to the fountain, but not make them drink.  Presumably,
18     if your goal was to make horses drink, you would take
19     them to the fountain when they are thirsty, at the end
20     of the day when the sun is going down, and you make the
21     water as bubbly and cool and appealing as possible.
22  11146                So, what if, to get more Canadian
23     programming of higher quality in under-represented
24     categories, the Commission were to say, "All we are
25     going to do is impose exhibition requirements.  We are


 1     going to make you provide the water at the best time of
 2     the day in competition with other services that are
 3     available and in order to stay in the game, you are
 4     going to have to air quality programming."  In other
 5     words, the only requirements would be vis-à-vis
 6     exhibition and time of day.
 7  11147                Do you think that could lead to
 8     results that would be less economically difficult,
 9     would lead to flexibility because you could get access
10     to the fund or whatever way you can negotiate to get
11     programming of high quality?  Otherwise, the
12     conventional broadcaster would lose all these hours of
13     viewership at a time when the horses are all around the
14     fountain.
15  11148                MR. CASSADAY:  Certainly, it's a
16     terrific analogy.  The one thing that we didn't talk
17     about is how much.  I think one of the things that --
18     let me talk for a minute as a former conventional
19     broadcaster and say that there is no conventional
20     broadcaster that gets more satisfaction out of buying
21     an American show than actually contributing to the
22     development of a strong Canadian show.
23  11149                So, contrary to what some people may
24     believe -- and I don't believe any of you do -- the
25     entire orientation of a Canadian broadcaster is to


 1     develop an outstanding service where their Canadian
 2     shows are their best shows.  I mean that's what we all
 3     woke up every morning -- that's what they all wake up
 4     and every morning and think about doing.  So, when you
 5     ultimately make --
 6  11150                THE CHAIRPERSON:  Not necessarily all
 7     the way to the bank.
 8  11151                MR. CASSADAY:  Not necessarily.  So,
 9     when you ultimately make your decision, you have to
10     make that decision in the context of what they are up
11     against because we may take the attitude that it's in
12     the best interests of us to drive people towards a
13     significant increase in the amount of Canadian content
14     because, whether they know it or not, we are helping
15     them out.  They are going to be much better off in the
16     long term.
17  11152                But the fact of the matter is that,
18     regardless of what we put on the air, there is going to
19     be an onslaught of foreign programming coming into this
20     country and Canadians will vote with their converter
21     hour by hour, half hour by half hour, day by day, and
22     what we want to make sure is that we remember that this
23     thing is -- perhaps Commissioner McKendry's point is we
24     are not doing that great a job because we are still at
25     3.1 per cent, but we all know that it's getting better,


 1     it's improving, it's strengthening.
 2  11153                We want to make sure that this system
 3     remains strong, that the foundation broadcasters remain
 4     strong and are able to make a contribution despite
 5     fragmentation, despite the vagaries of the advertising
 6     market, despite the vagaries of production funding
 7     devices, that they are going to need the flexibility to
 8     grow and be successful in the future and only if they
 9     are successful will we have a strong production
10     community.
11  11154                So, it's finding the right balance. 
12     I think we are certainly on the right track in terms of
13     our focus on having that exposure in the prime viewing
14     hours.  So, now it comes down to:  What is the right
15     amount to satisfy our policy needs and our interests in
16     developing the system?
17  11155                THE CHAIRPERSON:  So, your answer to
18     whether this regulatory mechanism could be helpful is
19     yes or no?  Secondly, I understand it would be a
20     question of how many hours, but to abandon spending and
21     just say, "These are the under-represented categories
22     and you must have so many hours in peak time and you do
23     it as you can", because there has been a cry for
24     flexibility, the one shoe shouldn't fit all.
25  11156                MR. CASSADAY:  The simple answer to


 1     -- there is no simple answer.  The tools that are
 2     available to the Commission to regulate the industry
 3     are good tools: hours, dollars.
 4  11157                THE CHAIRPERSON:  My question was: 
 5     Should they continue to be in combination or could we
 6     possibly be able to drop one if we added peak viewing
 7     hours to the exhibition requirements?  It's not magic. 
 8     It simply would be a new approach which could respond
 9     to the cry for flexibility, et cetera.
10  11158                I just wanted your comments on
11     whether that approach could work.  Suggestions have
12     been made that the three have to be combined; that is,
13     peak viewing hours and exhibition requirements and
14     spending in combination.  I was starting to say, "Could
15     we disassociate them and get to the same result", and
16     you say possibly, as long as it's not an unreasonable
17     number of hours because it's the time when all the
18     horses are around the fountain.
19  11159                MR. CASSADAY:  Right, and also --
20  11160                THE CHAIRPERSON:  And maybe they
21     would be wanting hay instead of the American pie.
22  11161                MR. CASSADAY:  Because every
23     broadcaster has a different view of how they can
24     compete effectively and I think you are going to want
25     to consider what's possible for them in the context of


 1     how they have positioned themselves in the marketplace.
 2  11162                THE CHAIRPERSON:  We thank you very
 3     much.  I am sure, looking at the hour, that you are
 4     delighted we didn't keep you last night.
 5  11163                MR. CASSADAY:  We are pleased to be
 6     here.  Thank you.
 7  11164                THE CHAIRPERSON:  Pardon me?
 8  11165                MR. CASSADAY:  We are pleased to be
 9     here.  Thank you.
10  11166                THE CHAIRPERSON:  Thank you very much
11     to all of you, ladies and gentlemen.
12  11167                We will now take a well-deserved 15-
13     minute break.
14     --- Short recess at / Courte suspension à 1115
15     --- Upon resuming at / Reprise à 1125
16  11168                THE CHAIRPERSON:  Welcome back.
17  11169                Madame la Secrétaire.
18  11170                Mme BÉNARD:  Merci, Madame la
19     Présidente.
20  11171                La prochaine présentation sera celle
21     de Pelmorex Inc.  J'inviterais M. Morrissette à faire
22     la présentation.
23  11172                M. MORRISSETTE:  Merci.
24  11173                The theme of our presentation this
25     morning is "Small is beautiful".


 1  11174                THE CHAIRPERSON:  So you were here
 2     this morning.  With my glasses on, I can't see a thing.
 3  11175                MR. MORRISSETTE:  I see.
 5  11176                M. MORRISSETTE:  Madame la
 6     Présidente, Mesdames et Messieurs les Commissaires, mon
 7     nom est Pierre Morrissette.  Je suis le président et
 8     chef de la direction de Pelmorex Inc., société qui
 9     exploite la licence de radiodiffusion spécialisée des
10     réseaux The Weather Network et MétéoMédia ainsi que les
11     licences de radiodiffusion de 11 stations de radio et
12     d'un réseau national de programmation radio émis via
13     satellite qui dessert 102 stations affiliées.  Je suis
14     accompagné de M. Luc Perreault, vice-président aux
15     Relations affiliés et aux Affaires réglementaires.
16  11177                Il nous fait plaisir aujourd'hui de
17     déposer devant vous les commentaires et les
18     observations de Pelmorex quant au sujet en l'instance.
19  11178                Pelmorex est une société résolument
20     tournée vers l'avenir.  L'innovation technologique fait
21     partie de notre quotidien et nous croyons fermement que
22     le passé est garant de l'avenir et que le système
23     canadien de radiodiffusion est bâti sur des assises
24     solides que nous devons veiller à ne pas fragiliser. 
25     En effet, par le passé, le Conseil a toujours su


 1     maintenir un équilibre sain et raisonnable entre les
 2     distributeurs et les fournisseurs de contenu de
 3     programmation.
 4  11179                Depuis la création des réseaux
 5     spécialisés au Canada, le Conseil a toujours intégré
 6     les notions de distribution dans ses grandes
 7     politiques.  Il est apparu évident au régulateur que la
 8     distribution est la clé du succès pour les fournisseurs
 9     de programmation spécialisée.
10  11180                Ce faisant, le Conseil a créé un
11     environnement où les consommateurs retrouvent  une
12     excellente valeur en termes de qualité/prix et où les
13     distributeurs et les fournisseurs de contenu de
14     programmation spécialisé remporte des succès.  Ces
15     indices sont des signes d'une industrie équilibrée.
16  11181                Our experience in Europe has showed
17     us that maintaining this equilibrium is essential.  As
18     in Canada, most countries experience a shortage of
19     channel capacity and digital services are slow in
20     getting off the ground.  Furthermore, regulation in
21     Europe is limited or even non-existent; access rules do
22     not exist.  The European market is fragmented in terms
23     of size and language.  As a result of this open market
24     environment without rules, where the distributors are
25     the undisputed gatekeepers, the quality and quantity of


 1     programming services in individual countries is lacking
 2     and dominated by foreign services.
 3  11182                The bottom line is that the absence
 4     of equilibrium between distributors and content
 5     providers results in conditions of high risk and low
 6     levels of economic viability for content services. 
 7     Viewers at large are the main losers since they do not
 8     have access to the diversity and quality of domestic
 9     services in their own language.
10  11183                Our experience backed by market
11     research supports the need for a weather-related
12     information service such as The Weather Network and
13     MétéoMédia exists in almost all countries in the world. 
14     Weather affects everyone and is of interest to all. 
15     Specialty television services in North America, such as
16     Weather Channel and ours, in the weather category rank
17     amongst the most popular and most widely distributed
18     specialty TV services.  Part of this success is
19     attributable to balanced and favourable distribution
20     conditions.
21  11184                During the past four years, Pelmorex
22     has participated in the launch of five specialty TV
23     services in countries such as France, the U.K., Italy,
24     Benelux, and indirectly through our association with
25     The Weather Channel in Germany.  The only service which


 1     has survived is La Chaîne Météo in France, in which we
 2     hold a 45 per cent economic interest.  All other
 3     services proved to be uneconomic because of brutal
 4     distribution conditions.
 5  11185                We decided to sell our interest in
 6     all of our European services except France a year ago. 
 7     Since then, the remaining shareholders wrote off an
 8     investment of US $50 million after less than two years
 9     of operation and they shot everything down.  In its
10     fourth year of operation, La Chaîne Météo will soon
11     break even after a cumulative investment of CDN $25
12     million by the shareholders.  This is a very large
13     investment for a service of this type.  It is clear,
14     therefore, that distribution is critical.  It is
15     critical for the success of specialty services and
16     therefore for the success of a strong domestic
17     broadcasting system.
18  11186                Canada is blessed with one of the
19     best broadcasting systems in the world and should serve
20     as a model for all countries.  Canadians have access to
21     a large variety of Canadian programming and a more
22     vibrant broadcasting system than citizens living in
23     larger countries in Europe.
24  11187                The Commission is to be commended for
25     its role in creating an environment where all players


 1     thrive and contribute to the future development of the
 2     system in the public interest.  The challenge is to
 3     build on this success in the years ahead.  In our view,
 4     maintaining the equilibrium between distribution and
 5     content is the cornerstone of this strategy.
 6  11188                L'environnement technologique et le
 7     monde de la radiodiffusion évoluent à une vitesse
 8     vertigineuse.  Selon Time Magazine, il a fallu 40 ans à
 9     l'industrie de la radio américaine pour atteindre le
10     seuil de 50 millions d'auditeurs.  L'industrie du câble
11     aux États-Unis a rejoint 50 millions d'abonnés après 13
12     ans d'existence.  L'Internet a rejoint 50 millions
13     d'abonnés en seulement quatre ans et le nombre
14     d'abonnés croît de façon exponentielle à chaque année.
15  11189                Ce sujet sera sans doute exploré lors
16     de l'audience sur les nouveaux média plus tard à
17     l'automne, mais nous sommes convaincus de l'étroite
18     relation entre le développement des nouveaux média et
19     l'avenir des créateurs de programmation canadienne.
20  11190                Nous croyons que le Conseil a soulevé
21     des questions très intéressantes dans l'avis public à
22     ce sujet et que nous devons nous pencher immédiatement
23     sur ce sujet.
24  11191                Selon une étude publiée en juin 1998
25     par la CTAM, Cable Television Association of Manager


 1     and Marketers, aux États-Unis, les foyers possédant un
 2     PC ont augmenté de 33 pour cent en 1994 à 45 pour cent
 3     en 1998.  De plus, seulement 4 pour cent des PC étaient
 4     reliés à l'Internet en 1994 comparativement à 30 pour
 5     cent en 1998.
 6  11192                Ceci nous porte à croire que, dans un
 7     avenir rapproché, les créateurs de programmation
 8     canadienne devront se doter de nouveaux outils
 9     numériques afin de répondre à l'avènement du multimédia
10     et de l'interactivité.  en effet, le développement du
11     PC TV fera en sorte que les services de programmation
12     tels que nous les connaissons aujourd'hui devront se
13     marier à un pendant virtuel dans un monde
14     essentiellement interactif.
15  11193                Le déploiement de ces nouvelles
16     technologies conférera des bénéfices substantiels au
17     grand public.  La valeur ajoutée principale permettra
18     au consommateur de personnaliser l'information et les
19     émissions virtuellement sur demande.  Par contre, cette
20     situation aura un impact profond sur tous les créateurs
21     et diffuseurs de contenu canadien.
22  11194                In this new environment, and in order
23     to meet the expectations of Canadians, producers of 
24     Canadian content will have to invest a significant
25     amount of capital in hardware, software, databasing and


 1     digital content.  To meet these future challenges,
 2     Canadian programmers will need a stable environment in
 3     order to plan a sound capital investment strategy if
 4     they wish to evolve and thrive in the 21st century, an
 5     environment where borders could be non-existent and,
 6     therefore, more competitive.
 7  11195                At this time the Commission
 8     recognizes investments in production of Canadian
 9     content for every licensees it oversees.  However, the
10     Commission does not take into account dollars invested
11     in R&D and in interactive programming, which is our
12     future.  For example, a service like The Weather
13     network/MétéoMédia, which employs 300 people and
14     produces 100 per cent of live Canadian programming 24
15     hours a day does not have access to production funds,
16     which are mainly reserved for more conventional half-
17     hour or hour long programming.  All programming aired
18     by The Weather Network and MétéoMédia is financed 100
19     per cent by Pelmorex.
20  11196                For example, Pelmorex financed the
21     creation of technologies such as the All Channel Alert
22     system, which Environment Canada is adopting as part of
23     the future emergency broadcast system, localization
24     technology known as the PMX, which is installed in more
25     than 1,100 headends across the country, and one of the


 1     most advanced weather forecasting engines in the world,
 2     known as the PFE, which is the backbone of our core
 3     weather information content.
 4  11197                All of these technologies are unique,
 5     proprietary and patented, requiring millions of dollars
 6     of investment.  But the fact is that none of these
 7     technological developments, which are an integral part
 8     of our on-air content, are recognized as an investment
 9     in Canadian content.
10  11198                We would like to recommend to the
11     Commission that it creates mechanisms whereby
12     investments in technology that are directly related to
13     the creation of on-air content should be included as
14     part of the Canadian programming commitments.  We do
15     not refer here to editing facilities, cameras or other
16     conventional production tools, but rather new and
17     innovative technologies that will enable the creation
18     and dissemination of Canadian content in the emerging
19     PC TV environment.
20  11199                Nous comprenons et nous partageons
21     les préoccupations du Conseil quant à la production de
22     contenus canadiens offerts aux heures de grande écoute
23     ainsi que des interventions quant à la visibilité des
24     productions canadiennes.  Mais dans un monde où la
25     globalisation et la convergence des contenus et des


 1     médias de distribution deviennent de plus en plus
 2     évidentes, nous croyons que le débat se résume à
 3     maintenir l'équilibre du système afin de permettre aux
 4     différents joueurs d,évoluer et de répondre aux
 5     challenges qui les interpellent.
 6  11200                En effet, nous croyons que les
 7     joueurs canadiens sont suffisamment créatifs et
 8     innovateurs pour rencontrer les défis que posent le 21e
 9     siècle.  Par contre, ces joueurs auront besoin
10     d'investir des sommes importantes afin de se démarquer
11     de la compétition étrangère.
12  11201                Afin d'assurer une certaine forme de
13     stabilité, entre autres aux intervenants du domaine de
14     la télévision spécialisée canadienne, nous désirons
15     soumettre les pistes de réflexion suivantes au Conseil:
16  11202                - S'assurer du maintien d'un système
17     de radiodiffusion équilibré entre la distribution et le
18     contenu;
19  11203                - Les engagements de production de
20     contenu canadien devraient être calculés en fonction
21     d'un pourcentage des revenus bruts et non pas en heures
22     de diffusion;
23  11204                - Les services spécialisés offerts au
24     service de base devraient avoir des exigences plus
25     élevées en termes de contenu canadien.  Par exemple,


 1     The Weather Network et MétéoMédia diffusent 100 pour
 2     cent de contenu canadien et sont offerts au service de
 3     base.  Afin de préserver ce niveau de contenu canadien,
 4     le Conseil devrait reconduire le double statut des
 5     services dont la proportion de contenu canadien est é
 6     levée.
 7  11205                - Ne pas ajouter de nouveaux services
 8     étrangers à la liste des services admissibles afin de
 9     favoriser des partenariats et des associations entre
10     les entreprises de radiodiffusion canadiennes et les
11     entreprises étrangères.  Ceci aura pour effet
12     d'encourager le développement d'entreprises canadiennes
13     ainsi que de contenu canadien.
14  11206                Le Conseil doit donner des lignes
15     directrices claires quant aux questions touchant la
16     visibilité et la disponibilité des services de
17     programmation canadiens.  La notion de canal de
18     distribution est extrêmement importante.  St-Exupéry
19     disait:  "l'essentiel est souvent invisible pour les
20     yeux, mais pour devenir essentiel, il faut être
21     visible."  Il est impensable que des services canadiens
22     soient offerts à des positions très élevées, le canal,
23     alors que des services étrangers ou exemptés soient
24     offerts à des positions très basses.
25  11207                - To insure the highest level


 1     possible of Canadian content on Canadian specialty
 2     television, the Commission should improve the access
 3     rules and look into issues arising from matters such as
 4     channel realignments as being part of the access rules.
 5  11208                - The Commission should consider
 6     adding a notion of extended market area to the licences
 7     of cable operators in large urban centres to favour
 8     common channel line-ups.  Promotion of Canadian
 9     networks would then be easier, more efficient and user
10     friendly.
11  11209                - All commercial avails on foreign
12     services should be used to promote Canadian content.
13  11210                - The Commission should recognize R&D
14     investments in technology, as we described earlier.
15  11211                - Finalement, le Conseil devrait
16     mesurer avec beaucoup d'attention les débordements aux
17     conditions de licence des différents titulaires afin de
18     s'assurer que des situations compétitives ne se créent
19     pas sans son assentiment explicite.  Cet élément
20     devient essentiel compte tenu de la fragmentation de
21     l'auditoire.
22  11212                Voici l'essentiel de nos
23     commentaires.  Je vous remercie, ainsi que vos
24     collègues, de nous avoir entendus ce matin.  We are
25     ready to answer any questions you may have for us.


 1  11213                LA PRÉSIDENTE:  Merci, Monsieur
 2     Morrissette.
 3  11214                Commissioner Wilson.
 4  11215                COMMISSIONER WILSON:  Good morning,
 5     gentlemen.
 6  11216                MR. MORRISSETTE:  Good morning.
 7  11217                COMMISSIONER WILSON: 
 8     Mr. Morrissette, thank you for being with us.  We were
 9     speculating yesterday about why you may not have been
10     able to make it into town and we concluded that it must
11     have been the weather that kept you, since you do
12     operate The Weather Network, although maybe you could
13     have had something to do with giving us a better day
14     yesterday; it was pretty windy and rainy.
15  11218                You raise a number of issues in your
16     submission, including the role of foreign services,
17     programming rights, advertising, technology and
18     corporate development as well as the contribution of
19     Pelmorex to Canadian programming and you also raise a
20     number of issues with respect to distribution and
21     access.
22  11219                As you know, we have initiated a
23     public process to deal with those issues, so I am not
24     really going to focus on them.  I won't say that they
25     won't be talked about, because I made the same comment


 1     to Astral yesterday, and the Chair decided to
 2     transgress that rule -- and she has every right to do
 3     that, since she is the Chair.
 4  11220                THE CHAIRPERSON:  I am not in jail
 5     yet.
 6  11221                COMMISSIONER WILSON:  That's right. 
 7     I have been here too short a time to contradict her.
 8  11222                Anyway, what I would like to do is
 9     take you through your submission, and then there are a
10     few questions that I have arising from your oral
11     submission and I will just go back to those.
12  11223                The first area that you look at is
13     the whole issue of program rights and foreign services. 
14     As you know, this is one of the core issues of this
15     hearing, although one of the biggest discussions that
16     we have around this issue seems to centre on who should
17     own the rights of programs, the producers or the
18     broadcasters, and they both like to own.
19  11224                Your submission, as well as a number
20     of other submissions, raises another aspect of the
21     issue, and that is the fact that you state that
22     evidence shows that several foreign programming
23     services have acquired North American rights for many
24     programs, effectively limiting access to these programs
25     by Canadian programming services.


 1  11225                I wonder if you would just expand on
 2     this a little bit and tell us whether or not this is an
 3     issue that has a direct impact on you, and then also,
 4     if you could just refer us to the evidence that you are
 5     talking about, so that we have a bit of a touchstone
 6     with respect to you, or is it just anecdotal evidence?
 7  11226                MR. MORRISSETTE:  To a large extent
 8     anecdotal and discussions with some of our colleagues
 9     in the industry.  Specifically as it applies to The
10     Weather Network and MétéoMédia, we really don't face
11     that kind of issue.  We are a content business,
12     specializing in information services; in fact, the way
13     we define our core business is multimedia weather-
14     related, which is quite broad, information services.
15  11227                The backbone of everything we do is
16     creating unique, and as proprietary as possible,
17     content that ties into our core business and having
18     rights to that information, having something that's
19     more comprehensive and of better quality than our many
20     competitors out there, because the weather information
21     field is a pretty broad one in terms of number of
22     players disseminating that kind of information.
23  11228                This means that we have to invest a
24     considerable amount in creating our own content,
25     because there are very few sources out there who will


 1     do it for us, and creating our own rights that we can
 2     then control our destiny with in terms of developing
 3     our service down the road.
 4  11229                So the situation of North American
 5     rights, which include not just the U.S. market but also
 6     the Canadian market, does not really apply to us.
 7  11230                I don't know if Luc wants to add to
 8     that comment.
 9  11231                COMMISSIONER WILSON:  So it is really
10     just more of a general comment about specialty services
11     in general.
12  11232                MR. MORRISSETTE:  And it may apply
13     also to conventional television services in some
14     cases --
15  11233                COMMISSIONER WILSON:  Exactly.
16  11234                MR. MORRISSETTE:  -- and may apply to
17     premium services as well.  But, as time goes on, I
18     speculate that that threat will become more and more
19     real with more examples to back it up as time goes on.
20  11235                COMMISSIONER WILSON:  We have heard a
21     lot of discussion about vertically-integrated U.S.
22     networks and the possibility that they will stop
23     selling Canadian rights to some of the programs that
24     they produce because their channels are already here,
25     and Canadian could see them regardless of whether or


 1     not there were Canadian rights.
 2  11236                MR. MORRISSETTE:  Fortunately, that's
 3     not on our radar screen I guess in terms of issues that
 4     we spend a lot of time worrying about as a rule in our
 5     own business.
 6  11237                COMMISSIONER WILSON:  That expression
 7     is very appropriate to you in particular.
 8  11238                MR. MORRISSETTE:  To our business,
 9     yes.
10  11239                COMMISSIONER WILSON:  Yes.  A lot of
11     people use it, though.
12  11240                MR. PERREAULT:  Commissioner Wilson,
13     this is exactly what we are referring to in our
14     submission.  Moreover, if you look to some of these
15     American specialties who are willing to basically hang
16     on to their programming, and when we look at this type
17     of programming, very often it is absolutely targeted to
18     some viewers group, they have a very easy time selling
19     advertising on these programs and to U.S. agencies
20     which represent major conglomerates like the Proctor &
21     Gambles, the GMs and the Fords and the Chryslers --
22  11241                COMMISSIONER WILSON:  They sell to a
23     North American-wide audience.
24  11242                MR. PERREAULT:  Exactly.  Therefore,
25     why should these conglomerates need to buy advertising


 1     in Canada when they already get their viewership, their
 2     commercials through the splash over in Canada.
 3  11243                COMMISSIONER WILSON:  Right.
 4  11244                We have received a number of
 5     suggestions on how the Commission could deal with this
 6     particular issue, the North American rights issue, and
 7     the suggestions have ranged from "do nothing and let
 8     the market decide" to actually removing U.S. services
 9     from the eligible list if they do not purchase Canadian
10     rights separately.
11  11245                Do you believe that the potential
12     repercussions of this issue are serious enough to
13     warrant regulatory intervention?
14  11246                MR. MORRISSETTE:  As I say, it is
15     difficult for us to comment on that specifically --
16  11247                COMMISSIONER WILSON:  Because it
17     doesn't affect you directly.
18  11248                MR. MORRISSETTE:  -- because our
19     services are almost an anomaly in the system, although
20     we are one of the most widely distributed services, we
21     are in 8.6 million homes in Canada today; CBC's study
22     last year said that we are one of the most watched
23     services in terms of frequency of consultation.  Our
24     brand ranks number one in awareness based on that study
25     as well.


 1  11249                So we have been very successful in
 2     creating a presence in millions of homes in Canada on a
 3     daily basis, but we are an information service and 100
 4     per cent Canadian content created 100 per cent by
 5     ourselves.  In the earlier presentation we are talking
 6     about 32 and 37 per cent of Canadian content being
 7     viewed; well, for us, it is 100 per cent all day long,
 8     all week long, all year long since we have existed.
 9  11250                A lot of what we do is, our content
10     gets stored in databases.  In fact, in preparing for
11     the future, we just built a brand new facility in
12     Mississauga for The Weather Network; it is 100 per cent
13     digital.  Everything is stored in servers.  We are just
14     getting prepared for when the database will be
15     broadcasting not just data but video clips and audio
16     clips and all of these information elements that will
17     tie in not with what people see on the PC but on the
18     television screen, and eventually emerging into a
19     virtual channel.
20  11251                It is different from most other
21     broadcasters who produce drama and entertainment
22     programs and what have you.  In fact, what I find
23     interesting is that a lot of the focus seems to be on
24     those areas, but when we look at categories of
25     information that are viewed on Internet websites on on-


 1     line services, what have you, news and weather
 2     information rank Nos. 1 and 2.  Everything else falls
 3     much lower.
 4  11252                So, to differentiate ourselves in
 5     that area, we just have to understand what the market
 6     wants, understand what the competitive elements are --
 7     and they are global -- and it is to develop unique
 8     information that meets the needs better than anybody
 9     else for that marketplace.
10  11253                COMMISSIONER WILSON:  I hope that you
11     will bring that kind of vision and experience to the
12     new media process that we are involved in, because
13     that's exactly the kind of thing that we are interested
14     in exploring.
15  11254                MR. MORRISSETTE:  In the context of
16     today's hearing, I am a pretty firm believer that the
17     new world of broadcasting, the new wonder of
18     broadcasting may not become -- I hate to say an
19     obsolete word, but where people will have an
20     opportunity to download programs, information, what
21     they want to watch when they want to watch through
22     various sources, that's going to happen, and rights
23     will become a very, very major issue in that context.
24  11255                COMMISSIONER WILSON:  Actually, if we
25     progressed the digital universe, and their television


 1     is actually a monitor as well, they could download them
 2     and play them back on that same piece of equipment.
 3  11256                MR. MORRISSETTE:  Yes, and with the
 4     speed of technology development, I believe that that's
 5     going to happen.  The issue is how long.  It is going
 6     to be an evolutionary process, but, in terms of setting
 7     long-term policy frameworks and industrial strategies
 8     for the Canadian broadcast system, we have to start
 9     planning for those issues that arise from that today.
10  11257                COMMISSIONER WILSON:  We will explore
11     that more during the new media process, but actually,
12     it just occurred to me when you were talking about your
13     Canadian content, 100 per cent Canadian content 365
14     days a year, that the system-wide viewership goals that
15     the CAB has proposed in terms of increasing overall
16     viewing to Canadian programming, not the under-
17     represented categories, but you could help them achieve
18     that goal.  Somebody pointed out the CBC could help
19     increase that since you are 100 per cent and people
20     watch you so much.
21  11258                MR. MORRISSETTE:  Uh-huh.
22  11259                COMMISSIONER WILSON:  On the issue of
23     foreign services in general, just to go back to that,
24     your submission states that they make no direct
25     investment and their contribution to the Canadian


 1     broadcasting system is minimal.  In fact, you say their
 2     only contribution is to provide packaging partners for
 3     Canadian services and discretionary tiers made
 4     available to the distributors' subscribers.
 5  11260                I take it from this statement that
 6     you are not that big a fan of the Commission's decision
 7     authorizing the carriage of foreign services, or are
 8     there too many?  Do you think there are too many that
 9     have been authorized?
10  11261                MR. MORRISSETTE:  Historically, I
11     support the decisions that have been made.  We have a
12     balanced system with a wide variety of Canadian
13     services and also a good complementary blend of foreign
14     services.  But we have demonstrated over time that, in
15     many different categories, a Canadian service can be
16     launched and operate successfully, either on its own or
17     in partnership with the foreign service.
18  11262                Going forward, our view is that the
19     latter model should continue to prevail, where we
20     foster an environment that encourages mainly the
21     establishment of Canadian service either on its own or
22     in partnership.  To allow a foreign service to come in
23     and preempt a category will basically make it very
24     difficult, if not impossible, for a Canadian equivalent
25     to emerge.


 1  11263                COMMISSIONER WILSON:  But do you
 2     think, in a market the size of Canada, which is one-
 3     tenth -- I mean, most of these foreign services are
 4     essentially American services.  In a market the size of
 5     Canada, that is 10 times smaller than the U.S. and in
 6     the U.S. it is so much easier to start a programming
 7     service, you don't have to go through the same
 8     licensing process, is it realistic to expect that we
 9     could create programming services in every possible
10     niche of every possible genre and have those services
11     be built and become sustainable in this market, or do
12     we have to try to find the balance?
13  11264                MR. MORRISSETTE:  It is going to get
14     more difficult as time goes on for the same reasons
15     that John Cassiday was describing in the earlier
16     presentation whereby, through digital services, the
17     mass of subscriber levels will be much lower and,
18     therefore, you need different models that perhaps
19     existed in the past.  But I am from the school of
20     thought that there is always a solution.  There is a
21     Canadian weather Network and its French counterpart
22     MétéoMédia in this country, and it is not The Weather
23     Channel from Atlanta.
24  11265                I am very proud of what we have
25     accomplished as Canadian services in our 10 years of


 1     existence and I firmly believe that there are many
 2     other future examples to be created that can accomplish
 3     similar success.
 4  11266                It so happens that The Weather
 5     Channel in the last two years has become a partner and
 6     a shareholder in our company.  That is really working
 7     to our advantage as well as to their advantage.  During
 8     the recent hurricanes, they have satellite trucks that
 9     were right in the eye of the storm, basically, and we
10     worked out an arrangement with their reporters on the
11     spot whereby we get the exclusive distribution of these
12     live reports, live feeds from them, to benefit our
13     audience.  And it is in geographic areas relevant to
14     our Canadian market.
15  11267                So that and technology exchanges; we
16     talked about sales opportunities before.  Yes, there
17     are advertising buys that happen in the States and
18     cover only the States without a Canadian equivalent,
19     and we have been successful in the past year or two to
20     add on the Canadian market through our services through
21     their sales resources.  So these kinds of co-operative
22     arrangements really ultimately end up to be the best
23     winning scenario, and they benefit because they have an
24     ownership position in our company.
25  11268                COMMISSIONER WILSON:  One of the


 1     things that you said with respect to these partnerships
 2     is that one of the effects of these kinds of
 3     relationships is the Canadian programs would be more
 4     likely to appear on the programming grid of the foreign
 5     partner in its country of origin.  Is this happening
 6     with any of your programming going south of the border? 
 7     Is some of your programming ending up on The Weather
 8     Channel, or The Weather Network -- what is it called? 
 9     The Weather Channel -- Channel/Network.
10  11269                MR. MORRISSETTE:  The Weather
11     Network.
12  11270                Well, in different ways.  Again, we
13     are kind of a unique situation in the Canadian
14     broadcast system.  We have developed a world class, if
15     not one of the most advanced weather forecasting
16     systems.  We are working with them so that they can
17     potentially use this kind of system instead of them
18     recreating their own.  That would be a licensing
19     arrangement.  It is part of our content, so it is like
20     exporting Canadian content.
21  11271                We are going to be working with our
22     colleagues in France on the same basis, exporting some
23     of our technology, exporting some of our ideas that we
24     have developed in Canada.  For instance, we are the
25     only national network in Canada that operates a


 1     national road conditions database, the only service
 2     that operates a national pollen count database.
 3  11272                COMMISSIONER WILSON:  The UV ray
 4     technology.
 5  11273                MR. MORRISSETTE:  The UV is another
 6     unique, and we are the only network or service in
 7     Canada that operates this kind of system.
 8  11274                Well, in our discussions and meetings
 9     with them, they are now working on creating similar
10     types of situations in the U.S. market.  It is not
11     something that we are licensing, but it is the cross-
12     fertilization of ideas.
13  11275                COMMISSIONER WILSON:  So,
14     essentially, it is the technology-driven content.
15  11276                MR. MORRISSETTE:  Uh-huh.
16  11277                COMMISSIONER WILSON:  I mean, you do
17     a number of interstitials on your channel as well.  It
18     is not those kinds of things that might end up on your
19     U.S. counterpart.
20  11278                MR. PERREAULT:  Some programming does
21     end up on The Weather Channel in the U.S. and in La
22     Chaîne Météo in France.  As you know, our business is
23     weather driven.  Our ratings go up when severe weather
24     conditions arise in Canada.  We have regional bureaus
25     over the country; that was part of the commitment when


 1     Pelmorex acquired the network from Lavalin years back. 
 2     We have bureaus in Vancouver, Regina, in the Atlantic
 3     and now a full-fledged digital facility in Toronto. 
 4     For example, when the ice storm hit Quebec last year,
 5     obviously our on-air camera people, through satellite
 6     feeds were live on the U.S. Weather Channel describing
 7     the situation arising in Canada and were seen quite
 8     often, actually, as the storm developed.
 9  11279                The same thing happened in La Chaîne
10     Météo.  We sent reports to La Chaîne Météo on this
11     event.
12  11280                COMMISSIONER WILSON:  Yes, there was
13     probably more coverage on the U.S. channels of the ice
14     storm than there ever was on anything that was
15     happening in our political life.
16  11281                MR. PERREAULT:  True.  Even the
17     referendum.  So that was quite interesting.
18  11282                Since we have bureaus all over the
19     country, when there are severe weather systems
20     affecting either B.C. or the Prairies or what have you,
21     our reporters are on the scene, and obviously we get
22     requests from our associates in the States or in Europe
23     about getting them footage.
24  11283                Yes, it does happen.
25  11284                MR. MORRISSETTE:  In fact, just to


 1     add to that, as part of our most recent agreement to
 2     access some of their feeds during major weather events,
 3     this is a reciprocal arrangement.  In our discussions
 4     with friends, this is also subject for future action.
 5  11285                So these opportunities do exist.  It
 6     is not so much a sale, but it is an exchange that
 7     enables us to enrich all of our respective programming.
 8  11286                COMMISSIONER WILSON:  So, if there
 9     wasn't that ownership connection, could you not also
10     license your technology to them?  Lots of the
11     conventional broadcasters make arrangements with
12     broadcasters in the U.S. -- Global is with, I don't
13     know, NBC or something like that to take clips from
14     them and use that in their news.  You could essentially
15     do the same thing without actually engaging in that
16     ownership relationship.
17  11287                MR. MORRISSETTE:  I would venture to
18     say that the scope and depth of our arrangements would
19     not be anywhere near the level that it is were it now
20     for the ownership arrangement.
21  11288                COMMISSIONER WILSON:  So the quality
22     is better.
23  11289                MR. MORRISSETTE:  Yes.  I totally
24     support, to the extent that it is necessary or
25     justified, partnering with a foreign service that


 1     operates in a similar domain.  It creates opportunities
 2     for synergy and for enhancements that you wouldn't have
 3     otherwise.
 4  11290                When you sit down at regular board
 5     meetings and it comes right from the top to co-operate
 6     and participate, followed up with exchanges of market
 7     research, exchanges of 3-D graphics technology
 8     developments, database development strategies, all of
 9     these things that are critical to our business, these
10     are the kinds of discussions that happen all the time.
11  11291                COMMISSIONER WILSON:  I think it is a
12     really valuable suggestion and I think that we heard
13     from someone during this proceeding who made a comment
14     about a U.S. channel that was part of a partnership to
15     get a licence in Canada and they appeared before the
16     Commission.  They ended up not getting a licence and
17     realized afterwards that their channel was actually on
18     the eligible list.  So they didn't even really have to
19     have that partnership.  I was quite interested by that.
20  11292                MR. MORRISSETTE:  But there is one
21     very important element to note, though.  There is a
22     very, very different look and programming strategy
23     between The Weather Network and MétéoMédia and The
24     Weather Channel in the States, and similarly between
25     the services in those two markets and the one in


 1     France.  Even in our country there is a different look
 2     and feel between The Weather Network and MétéoMédia.
 3  11293                COMMISSIONER WILSON:  So even weather
 4     expresses the value of a people.
 5  11294                MR. MORRISSETTE:  It is presented in
 6     different ways.
 7  11295                It is interesting that, well, first
 8     of all, there are geographic differences obviously in
 9     the market, but to succeed in terms of achieving the
10     highest potential audience levels, we have tailor our
11     programming to meet the local market needs, and that's
12     a big part of what we do.
13  11296                COMMISSIONER WILSON:  One of the ways
14     that you suggest that foreign services could make more
15     of a contribution in the Canadian broadcasting system
16     is if the Commission ordered the substitution of all
17     advertising segments broadcast on these services with
18     promotions of Canadian programming.  Astral, as you
19     know, made the same suggestion and a number of people
20     have been making this suggestion.
21  11297                I am just wondering -- I will ask you
22     the same question that I asked Astral, or two
23     questions, really.  One is, do you foresee a regulation
24     on the part of the Commission ordering the substitution
25     of all that advertising as setting off any concerns


 1     with respect to trade between the two countries?  And,
 2     secondly -- I mean, maybe you don't want to comment on
 3     that.  It just occurred to me if we regulated the
 4     substitution of all the advertising, how is the U.S.
 5     going to react to that in view of free trade and all
 6     the different trade relationships that we share with
 7     them.  But also, I wondered if you had talked to any of
 8     the U.S. services about this idea and what their
 9     reaction might have been.
10  11298                MR. MORRISSETTE:  Well, needless to
11     say they would prefer to maintain the status quo.  We
12     have not talked to any U.S. services along these lines,
13     but if we just step back for a moment, they are
14     deriving tremendous amount of revenues, subscriber
15     revenues, from the Canadian system.  Every other player
16     in Canada happens to be a Canadian licensee, comes
17     before you, and we discuss the most appropriate
18     commitments, programming commitments, to ensure that we
19     have a strong Canadian broadcast system.  Right now
20     they have a huge benefit that they have no such
21     requirements.
22  11299                Having said that, right now everybody
23     who has a trade issue should be Canada I guess because
24     American services have a huge advantage over Canadian
25     services.


 1  11300                COMMISSIONER WILSON:  But we allowed
 2     it.
 3  11301                MR. MORRISSETTE:  We have allowed it,
 4     sure, but there is no problem in correcting to a
 5     certain extent.  We are not talking here about a 37 per
 6     cent of revenues programming commitment; what we are
 7     talking about is making avails in Canada available to
 8     promote Canadian programming, which is in the Canadian
 9     interest, and it really should be at no cost to them
10     because my expectation would be that they would not
11     gear up and organize a sales force to sell advertising
12     in Canada.  What they are talking about is spill type
13     of advertising.
14  11302                So, theoretically, the cost should be
15     negligible, if any, and indirectly it would contribute
16     significantly to enhancing and promoting Canadian
17     programming.
18  11303                So correcting a situation like that,
19     which is unbalanced in their favour, seems to me that
20     that should be something that could be explainable.
21  11304                COMMISSIONER WILSON:  What about the
22     suggestion made by some of the broadcasters that we
23     should extract a contribution from them to Canadian
24     programming funds, for example?  Or would this be the
25     alternative?


 1  11305                MR. PERREAULT:  That idea is
 2     excellent, and it could be either/or.  The Commission
 3     could come up with a relation whereby every service
 4     offered on cable or -- any BDU or SRDU in Canada has a
 5     minimum contribution has a minimum contribution to the
 6     Canadian system.  It might be from the U.S. or
 7     elsewhere.  You have a minimum contribution to the
 8     Canadian broadcasting system.  It might be 2, 3, 5 per
 9     cent, the Commission in its wisdom will decide what the
10     percentage is, but the U.S. services might decide in
11     the end that their local avails are worth 5 per cent
12     and let them go.  And then the cable operators could
13     substitute them at the headend like they do now and
14     insert promotions for Canadian content.
15  11306                I think that both solutions are
16     acceptable.  It is only a matter of where the
17     Commission is going to decide to put their regulation
18     to; is it a percentage or is it local avails?
19  11307                COMMISSIONER WILSON:  Or if.
20  11308                MR. PERREAULT:  Or if.
21  11309                COMMISSIONER WILSON:  Or if we are
22     going to decide that.
23  11310                I would just like to continue on the
24     issue of advertising, only this time with respect to
25     the 12-minute advertising limit, because you do comment


 1     on that in your submission as well.
 2  11311                Some of the suggestions that have
 3     been made are with respect to the notion of
 4     deregulating the limit, and you state in paragraph 3.1
 5     that deregulation, coupled with new specialty licences,
 6     would increase the available inventory to the point of
 7     disrupting the rules of the market.  And we have
 8     actually heard a similar kind of comment from the
 9     advertising organizations who have appeared before us,
10     that it would just put too much inventory into the
11     market.
12  11312                What if the Commission were to
13     deregulate the 12-minute limit but require that the
14     additional two minutes, for example -- because most
15     people say that in the U.S. it is about 14 minutes an
16     hour.  What if that additional two minutes were to be
17     used to promote Canadian programming?  Would that
18     satisfy your concern?
19  11313                MR. MORRISSETTE:  I guess, from our
20     company's point of view, that would raise our concerns. 
21     Quite frankly, for us, having a precise limit of 12
22     minutes is one that we are very satisfied with and
23     prepared to live with.
24  11314                COMMISSIONER WILSON:  Even though the
25     advertising organization showed us some statistics that


 1     suggest that many broadcasters and specialty services
 2     exceed that limit already?
 3  11315                MR. MORRISSETTE:  Well, I wish we
 4     were one of them, but we are still growing our average
 5     viewing or minutes sold per hour and we are still under
 6     capacity, but we are hoping to push the capacity's
 7     limits over the next five-year time frame.
 8  11316                What becomes capacity on average -- 
 9     quite frankly, we are hoping to sell around nine, maybe
10     ten minutes on average; during peak times, we would
11     sell 12.  Quite frankly, if we went beyond 12, I think
12     we would be disrupting the quality of our programming. 
13     So we would self-regulate ourselves because it would be
14     short-term gain for long-term pain.  Our viewer levels
15     would suffer.
16  11317                So, in our own case, having a 12-
17     minute limit gives us the flexibility to manage that,
18     and we know that it would not be good broadcasting for
19     our own service to go beyond 12.
20  11318                COMMISSIONER WILSON:  You would drive
21     the viewers away out of frustration.
22  11319                MR. MORRISSETTE:  Uh-huh.
23  11320                MR. PERREAULT:  Also, we have to take
24     into consideration the advent of new media.  We are
25     going to talk about this later in the fall, but we have


 1     to take into consideration that in the U.S., for
 2     example, where the Internet penetration is much higher
 3     in the household, now advertising sold over Internet is
 4     a business of close to $800 million a year and it is
 5     growing very, very rapidly.  Therefore, when Internet
 6     penetration is going to go up in Canada, we can imagine
 7     that advertising is also going to flow in that new
 8     medium.
 9  11321                If we have more inventory in
10     television, new media opening on the other side, then
11     the pie is not getting larger, but the slices are going
12     to very, very small for each licensee.  Therefore, I
13     don't think at this stage it would be wise to augment
14     the number of minutes available because in the near
15     future I think that the Internet is going to take a lot
16     of money out of the advertising business.
17  11322                COMMISSIONER WILSON:  Thank you.
18  11323                With respect to this advertising, one
19     of the suggestions that you make is that more
20     flexibility could be granted with respect to local and
21     regional sales of advertising to certain specialized
22     broadcasters transmitting live programs from certain
23     regions, and you say that these broadcasters could be
24     granted a certain number of minutes of regional and
25     local advertising airtime within the 12 minutes


 1     provided by regulations.
 2  11324                I wonder if you could just elaborate
 3     on this proposal a little bit.  I am not sure that I
 4     understand exactly what you mean.
 5  11325                MR. MORRISSETTE:  Again, this relates
 6     to one of the unique features of our network.  We
 7     operate a national satellite service, distributed by
 8     cable, distributed by DTH and MMDS, but in the largest
 9     urban centres we operate sub-networks that are
10     distributed by fibre to the cable headends in that
11     market area.
12  11326                COMMISSIONER WILSON:  And that's how
13     you make everything location-specific.
14  11327                MR. MORRISSETTE:  Well, that's part
15     of it.
16  11328                COMMISSIONER WILSON:  Part of it.
17  11329                MR. MORRISSETTE:  What we do is, in
18     our prime times, which tend to be the morning -- again,
19     the prime time for television is at night, but our
20     prime time is in the morning, weekend mornings
21     particularly --
22  11330                COMMISSIONER WILSON:  Maybe that's
23     when you will schedule some of that drama that John
24     Cassiday was talking about.
25  11331                MR. MORRISSETTE:  Or some of the


 1     youth-oriented weather on Saturday mornings.
 2  11332                So when we operate these sub-
 3     networks, the rest -- they operate in Montreal and
 4     Toronto currently, and we are hoping to expand that
 5     into other markets.  In those local markets we go off
 6     the national feed and the national feed is serving the
 7     remainder of the country.
 8  11333                For us to operate this sub-network
 9     requires to deal with facilities and a stand-alone
10     broadcast operation often involving as many as 10 staff
11     with reporters on the street and traffic coverage and
12     all kinds of local activity coverage, and our show
13     becomes very local.  That's with a major investment on
14     our part.
15  11334                It is interesting that --
16  11335                COMMISSIONER WILSON:  Sorry, did you
17     just say you do traffic coverage?
18  11336                MR. MORRISSETTE:  Uh-huh.
19  11337                COMMISSIONER WILSON:  Okay.
20  11338                MR. MORRISSETTE:  Because it is very
21     weather related; whenever it rains in any major centre,
22     the impact on just traffic circulation is huge, as it
23     is with road conditions in wintertime.
24  11339                COMMISSIONER WILSON:  That happened
25     yesterday.


 1  11340                MR. MORRISSETTE:  Uh-huh.
 2  11341                Anyway, I guess, to make a long story
 3     short, given the nature of our major investments in
 4     local programming, in sub-network programming, we
 5     believe that it is warranted, during those time periods
 6     when we are broadcasting live with local operations,
 7     that consideration be given to a regional type of
 8     advertising opportunity.
 9                                                        1220
10  11342                COMMISSIONER WILSON:  The last
11     question I want to ask you with respect to your
12     submission has to do with Canadian programming
13     expenditures.  You talk about $34 million that you
14     spent on programming over the last four years.
15  11343                What percentage of this would have
16     been on producing weather reports, the ones that are
17     done in-studio versus the interstitials, which are
18     often done in other locations?
19  11344                MR. MORRISSETTE:  I don't have the
20     precise numbers at hand.
21  11345                Our programming costs are made up of
22     many different categories.  Just preparing the weather
23     content, we have 34 meteorologists on staff, who
24     basically do two things:  first, we have a group of
25     them who do forecasting; secondly, we have a group of


 1     them who develop new meterological content for the
 2     future to create new content.
 3  11346                In effect, those costs fall into our
 4     programming costs; our on-the-air live programming,
 5     where we have the people at the keywall or the news
 6     anchors.  All that qualifies.
 7  11347                Then we have our people out in the
 8     field, the news bureaus as well.
 9  11348                In addition, we commission and
10     produce ourselves, but very often in conjunction with
11     independent producers, a number of features; whether it
12     is on health, gardening, travel.  It could be many
13     different types of categories, as well; road tips, for
14     example, in terms of different road conditions.
15  11349                These features basically we inventory
16     and we replay over a period of time.
17  11350                I hate to venture a guess.  But my
18     sense is it would be probably less than 5 percent of
19     our total Canadian programming costs every year for
20     those features, because so much of what we do is live.
21  11351                COMMISSIONER WILSON:  I am trying to
22     find out a little bit more about The Weather Network
23     and how you operate.
24  11352                Do you produce the interstitials in-
25     house or do you --


 1  11353                Do you have any relationships at all
 2     with the independent production community, for example?
 3  11354                MR. MORRISSETTE:  Both.  We produce
 4     features in many different regions of the country in
 5     cooperation with independent producers, and we have our
 6     own in-house production team that will go and organize
 7     shoots on different subjects.
 8  11355                We do both.  That has just been --
 9  11356                As a national service, we obviously
10     want to reflect all regions in the country.  That is
11     why we have bureaus in Halifax, Montreal, Toronto, the
12     Prairies and B.C.  Oftentimes we work with them to go
13     out and do interviews and cover special events or
14     features.
15  11357                We are always working to have
16     features or news reporting that covers every area of
17     the country.
18  11358                COMMISSIONER WILSON:  I want to ask
19     you about a couple of things you said in your oral
20     submission.
21  11359                The first one is your suggestion that
22     the Commission create:
23                            "...mechanisms whereby
24                            investments in technology that
25                            are directly related to the


 1                            creation of on-air content
 2                            should be included as part of
 3                            the Canadian Programming
 4                            commitments."
 5  11360                And you go on to say that:
 6                            "We do not refer here to editing
 7                            facilities, cameras or other
 8                            'conventional' production tools,
 9                            but rather new and innovative
10                            technologies that will enable
11                            the creation and dissemination
12                            of Canadian content in the
13                            emerging PC TV environment."
14  11361                How do you make the argument that you
15     should be able to qualify for Canadian content and
16     things like non-linear editing systems cannot?
17  11362                MR. MORRISSETTE:  A non-linear
18     editing system is part of our day-to-day studio
19     operation.  Whereas when we spend a few million dollars
20     up-front, and ongoing capital costs over time, to
21     create one of the most advanced weather forecasting
22     systems in the world which will produce our content at
23     a very low cost on an ongoing basis thereafter, all of
24     our costs are not on the operating side; they are in
25     the up-front software and hardware and technology


 1     development, which will enable us to have this content
 2     for the long term.
 3  11363                That gets recognized in our capital
 4     expenditures program every year, but not in our
 5     Canadian programming numbers.
 6  11364                COMMISSIONER WILSON:  If your
 7     Canadian content is 100 percent, then why do you need
 8     that to count in your Canadian --
 9  11365                MR. MORRISSETTE:  It is just that it
10     is excluded and it is an anomaly.  For us, it is like
11     buying a show, and you amortize the rights over a
12     period of time.  But in our case, the hardware and the
13     software that we develop gets amortized not in the
14     programming category.  It gets amortized with our other
15     fixed assets.
16  11366                It seems to me that those kinds of
17     expenditures, which are directly tied to our own
18     Canadian content, should be recognized.
19  11367                We applied a number of years ago
20     under the Scientific R&D Tax Credit Program.  I think
21     we had something like $8 million for items which were
22     patented proprietary technology.  Because of abuses for
23     many of the applications -- the financial sector were
24     notorious for submitting very large amounts for these
25     credits -- the Federal Government came along and


 1     changed the rules.
 2  11368                What happened was that none of these
 3     items -- and I am talking about unique -- nobody has it
 4     -- patented technology.  They said it was not
 5     scientific enough under their new rules.  Well, they
 6     have changed the rules.
 7  11369                At the end of the day, we didn't even
 8     get our $2 million or $3 million in tax credits back.
 9  11370                We are in a very unusual situation,
10     as an information service as opposed to an
11     entertainment service that incurs a different kind of
12     model of costs.  As a very different situation, to a
13     certain extent I think there is a certain recognition
14     of certain categories which are totally justifiable and
15     logical.  There should be enough flexibility to
16     recognize them.
17  11371                COMMISSIONER WILSON:  In reading
18     everything you have done in terms of developing the
19     technology that you use for the channel, you are to be
20     commended for what you have accomplished there.
21  11372                Some people might say that what you
22     have done is you have developed technology which allows
23     you to run your channel more efficiently and thereby
24     earn greater profits.  So that is just a cost of doing
25     business.


 1  11373                I am having trouble figuring out why
 2     it should count.  I am not saying that I disagree that
 3     it should not count for something somewhere.  But I am
 4     just not sure I understand why it should count as
 5     Canadian content programming expenditures -- especially
 6     when your content is 100 percent Canadian already.  And
 7     that is not going to change.
 8  11374                MR. MORRISSETTE:  But the content
 9     that you see on the air is directly linked to the
10     specific capital projects, not to create an environment
11     or a studio to broadcast that Canadian content.  It is
12     directly tied into software and specific tools that
13     produce this content on a daily basis.
14  11375                A lot of our Canadian content is
15     data.  When you develop a brand new software system to
16     operate that data, which is our content, it is a real
17     tie-in that it is part of the content.  Because it
18     happens to be a capital cost -- because that is the
19     nature of our business -- does not mean that it should
20     not qualify as Canadian content.
21  11376                I am not talking about a camera.  I
22     am not talking about a new server for our digital
23     broadcast studio.  I am talking about a half million
24     dollar software development to provide efficient road
25     condition reports to the Canadian public every day of


 1     the winter.
 2  11377                It is just a natural extension of
 3     what we do every day.
 4  11378                COMMISSIONER WILSON:  I am going to
 5     think about that for a bit.  I will give that some
 6     thought.
 7  11379                MR. MORRISSETTE:  Hopefully, a long
 8     "bit".
 9  11380                COMMISSIONER WILSON:  Or maybe not
10     too long.
11  11381                One of the things you said this
12     morning was that commitments for Canadian content
13     should be calculated on expenditures only.
14  11382                MR. MORRISSETTE:  That is our --
15  11383                COMMISSIONER WILSON:  As a specialty
16     service.
17  11384                MR. MORRISSETTE:  We were referring
18     to a specialty service environment.
19  11385                COMMISSIONER WILSON:  I wondered if
20     you were trying to cast the net a little wider than
21     that and suggest that everybody's be calculated on that
22     basis.
23  11386                MR. MORRISSETTE:  No.  Obviously,
24     conventional broadcasters have a different economic
25     model.


 1  11387                The bottom line in our case is that
 2     it is 37 percent of prior year's revenues.  When we
 3     acquired The Weather Network five years ago, we had
 4     about 130 employees.  Today in our weather business, we
 5     have 300 people.  Some of it has been over and above
 6     investment spending for the future.
 7  11388                A major part of our growth in
 8     resources has been because of this 37 percent formula. 
 9     It works.  We have been fortunate to grow our revenues
10     every year.  We investment spend more, which makes us
11     better, grows our audience, grows our advertising.  We
12     spend more and invest more.
13  11389                I guess these formulas could always
14     work negatively in reverse.  But right now, what we
15     have is a model that enables us to constantly
16     investment spend in what our business is all about,
17     which is programming and meeting the needs of the
18     public better than anybody else.
19  11390                COMMISSIONER WILSON:  I am really
20     glad that I asked that question, because while you were
21     answering that question it suddenly twigged to me that
22     you have a 30 percent expenditure requirement and the
23     result of that is 100 percent Canadian content on the
24     air.  But you want to be able to include your R&D costs
25     in that 37 percent.


 1  11391                MR. MORRISSETTE:  That is correct.
 2  11392                COMMISSIONER WILSON:  This is my last
 3     question.
 4  11393                In one of the final points that you
 5     make in your submission, you say:
 6                            "Attentively monitor
 7                            overextension of licence
 8                            conditions among the various
 9                            licensees in order to prevent
10                            competitive situations from
11                            developing without the
12                            Commission's approval."
13  11394                Actually, I had to go to our Chair
14     and I said:  "What is this?"
15  11395                And then when you were talking this
16     morning about live coverage of the hurricanes and
17     traffic coverage, I thought to myself:  Do you ever get
18     any --
19  11396                I am not suggesting that that is an
20     over-extension of your licence conditions.
21  11397                But do you ever get any complaints
22     from news channels about the fact that you are doing
23     things on the channel that are maybe on the edge of
24     being weather related?
25  11398                MR. MORRISSETTE:  Weather related is


 1     a broad term.  A tremendous number of areas are
 2     impacted by weather.
 3  11399                I think covering a hurricane in the
 4     southeast is pretty well 100 percent in our mandate.
 5  11400                COMMISSIONER WILSON:  It is 100
 6     percent weather; there is no doubt about that.  But it
 7     is also news.
 8  11401                MR. MORRISSETTE:  Absolutely.
 9  11402                MR. PERREAULT:  Mind you, we do
10     cooperate with our news undertaking.  For example, with
11     the last hurricane in Florida, in Montreal with
12     MétéoMedia we are in conversation with RDI to decide
13     how are we going to do this jointly.
14  11403                COMMISSIONER WILSON:  And you also
15     provide weather for N-1.  Correct?
16  11404                MR. PERREAULT:  Yes.  So there is not
17     much conflict there with other broadcasters in terms of
18     severe weather coverage, because very often we do
19     cooperate.  And we end up saving a bunch of money,
20     because 12 hours before we made the decision to go, one
21     of our senior meteorologists said to us:  "It is going
22     to miss Key West and it is going to go to Louisiana."
23  11405                So we called back our colleagues and
24     said:  "Forget it."
25  11406                COMMISSIONER WILSON:  You should have


 1     phoned me, because my sister lives in Louisiana.  I
 2     would have like to have known that.
 3  11407                MR. PERREAULT:  We have great
 4     cooperation with other broadcasters.
 5  11408                COMMISSIONER WILSON:  What are you
 6     talking about here, about the over-extension of licence
 7     conditions?
 8  11409                MR. MORRISSETTE:  Just to conclude on
 9     the other matter, for us, covering weather news and
10     environmental news as well -- because it is tied in,
11     air quality, earthquakes and all those things -- never
12     have I considered for a nanosecond that it was not part
13     of our mandate.  It is very clearly part of our
14     mandate.
15  11410                Weather-related information, as I
16     say, is very broad:  travel condition, ski conditions,
17     marine conditions.  All these are affected by weather.
18  11411                Everything we do is weather related,
19     and we pay very close attention to that.
20  11412                COMMISSIONER WILSON:  Is this a more
21     general comment again about the whole area of
22     specialties?
23  11413                MR. MORRISSETTE:  I guess what it
24     comes down to is the mandate of several other services,
25     and what have you.  For instance, more and more


 1     community channels across Canada in our prime time
 2     might be covering weather and traffic conditions, and
 3     things along these lines.
 4  11414                COMMISSIONER WILSON:  They are not
 5     licensed, though.
 6  11415                MR. MORRISSETTE:  No.  But it
 7     fragments audience to a certain degree.  That means
 8     that it reduces our audience levels and our ability to
 9     generate advertising revenues.
10  11416                What it comes down to is if you have
11     a national or a regional all-news service that is
12     licensed by the Commission, and it has been reviewed
13     and we would have had an opportunity to state our
15  11417                COMMISSIONER WILSON:  So Pulse 24,
16     for example, would be another channel that would affect
17     your market share.
18  11418                MR. MORRISSETTE:  Yes.  But they have
19     been fully licensed and mandated to do that kind of
20     programming.
21  11419                What it comes down to is if a
22     specialty service that is in a completely different
23     genre and happens to start doing a lot of weather
24     reporting, we would be concerned about that.
25  11420                COMMISSIONER WILSON:  Is there one


 1     out there?
 2  11421                MR. MORRISSETTE:  No.  But there have
 3     been a number of community channel services who have
 4     identified this as an opportunity to better serve their
 5     local market.  That is a direct impact on us.
 6  11422                COMMISSIONER WILSON:  Those are all
 7     of my questions.  Thank you very much.
 8  11423                LA PRÉSIDENTE:  Merci, Monsieur
 9     Morrissette et Monsieur Perreault.
10  11424                MR. MORRISSETTE:  Thank you.
11  11425                LA PRÉSIDENTE:  Nous allons reprendre
12     à une heure et demie.
13  11426                We will be back at 1:30, at which
14     time we will hear Telefilm, followed by Writers Guild. 
15     And then we will hear the CTCPF in lieu of the Conseil
16     Provincial du Secteur des Communications, who will
17     appear much later during the process.
18  11427                After that, we will hear from the
19     Writers Union and SARDeC.
20  11428                We will return at 1:30 with Telefilm;
21     à une heure et demie avec Téléfilm.
22     --- Luncheon recess at / Suspension à 1235
23     --- Upon resuming at / Reprise à 1330
24  11429                THE CHAIRPERSON:  Good afternoon.
25  11430                Madam Secretary.


 1  11431                MS BÉNARD:  Thank you, Madam Chair.
 2  11432                The next presentation will be by
 3     Telefilm Canada, and I would invite Mr. LaPierre to
 4     invite his colleagues.
 6  11433                MR. LaPIERRE:  Good afternoon --
 7  11434                Me BLAIS:  Monsieur LaPierre, votre
 8     micro, s'il vous plaît.
 9  11435                M. LaPIERRE:  Qu'est-ce que je fais?
10  11436                Me BLAIS:  Pesez sur le petit bouton.
11  11437                M. MACEROLA:  Pour quelqu'un qui a
12     fait de la télévision durant 15 ans...
13  11438                M. LaPIERRE:  I never had to push a
14     button.  Somebody else did that.
15  11439                THE CHAIRPERSON:  I was just about to
16     say you have come down in the world.
17  11440                MR. LaPIERRE:  It's a lateral move,
18     madam.
19  11441                Can I start again, please.
20  11442                Good afternoon, Madam Chairperson,
21     CRTC Commissioners, ladies and gentlemen.
22  11443                I am honoured to be here today in my
23     new capacity as Chairman of Telefilm Canada.  With me
24     today is Mr. François Macerola, Executive Director of
25     Telefilm Canada.  To my left is Madam Suzan Ayscouth


 1     who is the Director of Communications.  Next to her,
 2     Mr. Guy De Repentigny who is the directeur de politique
 3     and planification et recherche, and Madam Maria De
 4     Rosa, consultante.
 5  11444                We are pleased to have an opportunity
 6     to participate in the Commission's deliberations on the
 7     future of Canadian television.
 8  11445                With the new millennium approaching,
 9     a review of the policies and regulations which affect
10     Canadian television production and distribution is both
11     timely and necessary.  The world of television has
12     undergone extraordinary change since the last review of
13     television by the CRTC and since the inception of
14     Telefilm's former Broadcast Fund in 1983.  The Canadian
15     government has since recognized the importance of this
16     change by creating the Canadian Television Fund in
17     1996.
18  11446                A new vision and tangible commitments
19     are needed from all players if our airwaves are to
20     continue to have strong Canadian stories which resonate
21     a shared experience for Canada's linguistic and
22     culturally diverse audiences as well as have universal
23     appeal.  And, as the Commission has rightfully noted,
24     implementing the public policy objectives of the
25     Broadcasting Act is fundamental to this review.


 1  11447                As we said in our submission to the
 2     Commission, Telefilm is participating in this review in
 3     its capacity as a cultural investor in television, in
 4     film and multimedia productions in accordance with
 5     federal cultural public policy.
 6  11448                We are an essential player in the
 7     film and television industry, providing financing,
 8     along with our sister program, the Licence Fee Program,
 9     to virtually all the distinctively Canadian prime time
10     drama programming shown on television.
11  11449                Par le Programme de participation au
12     capital du Fonds canadien de télévision, Téléfilm
13     finance des émissions distinctement canadiennes et de
14     grande qualité, qui respectent les objectifs de la
15     politique nationale: en augmentant le contenu canadien
16     disponible pour le système canadien de radiodiffusion;
17     en rejoignant le public canadien aux heures de grande
18     écoute; en contribuant au développement industriel du
19     secteur de la production indépendante; en stimulant
20     l'exportation de biens culturels canadiens, dans ce
21     cas-ci des émissions de télévision; et en engendrant,
22     grâce à la récupération, des revenus dont bénéficie
23     tout le système canadien de radiodiffusion.
24  11450                Tous ces objectifs vont dans le sens
25     de la politique du gouvernement fédéral, dont le but en


 1     matière de télévision est de s'assurer que les
 2     Canadiens ont accès aux moyens d'expression canadiens
 3     et à nos instruments de diffusion communs.  Et, tout
 4     comme d'autres intervenants, nous sommes convaincus que
 5     les Canadiens regardent des émissions canadiennes de
 6     grande qualité et qu'ils continueront de le faire. 
 7     D'ailleurs, le sondage du CRTC révèle, ce qui est fort
 8     intéressant, que plus des deux tiers des répondants
 9     voudraient qu'il y ait davantage d'émissions reposant
10     sur des histoires canadiennes.
11  11451                Le Canada est un immense pays mais sa
12     population est peu nombreuse, surtout quand on tient
13     compte de notre dualité linguistique et de notre
14     diversité culturelle.  Téléfilm soutient que sans les
15     politiques, les règlements, le financement et les
16     autres incitatifs publics, il serait encore impossible
17     de financer, de produire et de diffuser des émissions
18     de catégories sous-représentées.  Nous croyons que la
19     production d'émissions distinctement canadiennes et de
20     grande qualité doit demeurer une priorité nationale du
21     gouvernement fédéral.  Nous croyons également, Madame
22     la Présidente, que le financement public de ces
23     émissions par le biais du Fonds canadien de télévision
24     devrait devenir permanent.
25  11452                If you will allow me, Madam Chairman,


 1     a personal word.  Thirty-five years ago I began this
 2     journey to Canadian television.  At that time I dreamt
 3     that my children would have access to the stories of
 4     their country, told to them by the voices of their
 5     country, so that they would grow up in full possession
 6     of the dream that is Canada.  Now, 35 years later, at
 7     the beginning of my seventh decade, I dream of this for
 8     my grandchildren and, quite frankly, Madam Chairman, I
 9     don't give a damn how much it costs.
10  11453                Mr. Macerola.
11  11454                THE CHAIRPERSON:  I know that Paige
12     wouldn't like to hear you swear like this.
13  11455                MR. LaPIERRE:  Madam, Paige has
14     already heard it.  I read it to her last night.
15  11456                M. MARCEROLA:  Ça va être difficile
16     pour moi de revenir dans la quotidienneté de Téléfilm
17     Canada.
18  11457                Telefilm invests through the Equity
19     Investment Program of the Canadian Fund only in those
20     television productions which meet the objectives of
21     cultural public policy.  This approach ensures that
22     productions maximize Canadian content, maximize
23     exposure to audiences within Canada and abroad and
24     brings a return on investment which is reinvested as
25     additional financing of high quality Canadian


 1     programming.
 2  11458                This approach is effective in that
 3     Canadians are assured that high quality productions are
 4     financed, that regional production and official
 5     language minority production are fostered, that funds
 6     are targeted to the categories of programming
 7     under-represented on television, and that corporate
 8     development of small and medium sized companies is
 9     addressed.
10  11459                We are also the agency which
11     certifies Canada's official co-productions, supports
12     the promotion and marketing activities of the
13     independent television and film production industry and
14     the industry's participation at festivals and markets.
15  11460                Our investment provides a lever for
16     Canadian producers to seek other financing.  In
17     1997-98, Telefilm invested approximately $100 million
18     in television production, which leveraged about $350
19     million worth of production.
20  11461                Nous sommes également ici en tant
21     qu'investisseurs dans le cinéma canadien.  Au cours des
22     30 dernières années Téléfilm a investi dans quelque 700
23     longs métrages et a contribué à leur développement et à
24     leur production, et aussi à leur distribution et à leur
25     mise en marché.  Téléfilm croit que l'essor du cinéma


 1     canadien exige la collaboration et les efforts de
 2     plusieurs partenaires, y compris les radiodiffuseurs.
 3  11462                Comme nous l'avons écrit dans notre
 4     mémoire, nous pensons que les radiodiffuseurs devraient
 5     soutenir plus activement le long métrage canadien,
 6     parce que la diffusion de nos films attire les
 7     téléspectateurs et permet d'accroître les auditoires de
 8     ces films.  Nous espérons que le Conseil étudiera la
 9     question et trouvera de nouvelles façons d'inciter les
10     radiodiffuseurs à devenir de véritables partenaires du
11     cinéma canadien.
12  11463                Nous croyons aussi qu'il faudrait
13     encourager les radiodiffuseurs à déclencher un nombre
14     adéquat de productions régionales et tenir compte, dans
15     leur programmation, des besoins des communautés
16     linguistiques en situation minoritaire et des
17     autochtones.  D'autres intervenants ont d'ailleurs
18     abordé avec beaucoup de conviction cette question du
19     rôle des radiodiffuseurs et de la Société Radio-Canada/
20     CBC envers la production régionale.
21  11464                Il est évident que la technologie
22     nous lancera de nouveaux défis au tournant du nouveau
23     millénaire.  Il est vital que la nouvelle vision et le
24     cadre réglementaire qui découleront de ce contexte
25     aient comme résultat d'augmenter notre capacité de


 1     raconter des histoires canadiennes.  Il faut que les
 2     productions canadiennes continuent d'être disponibles à
 3     la télévision dans les deux langues officielles et que
 4     les créateurs continuent d'avoir les moyens et les
 5     outils pour produire ces émissions qui plaisent au
 6     public d'ici et d'ailleurs.
 7  11465                Pour sa part, Téléfilm Canada entend
 8     faire en sorte que les Canadiens puissent plus
 9     facilement raconter des histoires canadiennes.  La
10     Société continuerait donc de financer des productions
11     distinctement canadiennes et de grande qualité, et
12     d'appuyer le secteur privé dans la création de telles
13     émissions.  Pour ce faire, Téléfilm Canada croit que le
14     Fonds canadien de télévision doit demeurer un outil
15     essentiel, et devenir permanent.
16  11466                Merci.
17  11467                LA PRÉSIDENTE:  Merci, messieurs.
18  11468                Madame Pennefather, s'il vous plaît.
19  11469                COMMISSIONER PENNEFATHER:  Good
20     afternoon, ladies and gentlemen of Telefilm.  It's a
21     great pleasure for me to engage in a discussion with
22     you on such important issues.
23  11470                You spoke of a new vision firstly and
24     you spoke of tangible commitments.  In fact, this is
25     the line that I would like to follow in our discussion


 1     this afternoon.
 2  11471                J'aimerais d'abord commencer avec
 3     quelques commentaires peut-être un peu plus détaillés
 4     sur cette nouvelle vision et ensuite on passerait sur
 5     les recommandations plus précises en ce qui concerne la
 6     télévision canadienne.
 7  11472                In fact, and I am citing your press
 8     release, you have pointed to three important specific
 9     issues that are of concern to you:  that the Commission
10     should require broadcasters through conditions of
11     licence to trigger an appropriate amount of regional
12     production, incentives should be implemented to
13     encourage broadcasters to promote Canadian programming
14     and, third, broadcasters should be required to become
15     more active participants in the financing, exhibition
16     and marketing of Canadian feature films.
17  11473                I believe that this latter point,
18     although we touch on features, applies to your position
19     regarding a broadcaster's involvement in Canadian
20     programming writ large.  I hope at the end of our
21     discussion we will have a clear idea of what you
22     propose would change what you probably consider is not
23     appropriate on their parts at the moment, how all the
24     players can move forward and what we at the CRTC should
25     be doing in that regard.


 1  11474                Alors on commence.
 2  11475                Monsieur LaPierre, vous avez
 3     mentionné votre carrière dans la télévision. Si je me
 4     souviens bien  vous étiez, et êtes toujours, un
 5     professeur, un historien, sur l'histoire du Canada.  n
 6     effet, vous étiez mon professeur à un certain moment
 7     donné -- pour nous deux, c'est un peu longtemps -- et
 8     vous avez parlé d'un rêve canadien, un rêve que vous
 9     voulez passer à vos enfants et à leurs enfants.  Est-ce
10     qu'on y arrive en ce moment?  Est-ce qu'on est plus
11     loin qu'où est allés il y a quelques années?
12  11476                Quand vous dites que "I don't care
13     what it costs", what do you mean?  Is it really not the
14     case, since you yourselves are talking about the
15     importance of financing Canadian programs, this is
16     indeed a major issue.  How is vision not related to
17     cost?
18  11477                M. LaPIERRE:  Madame, vous avez
19     toujours été une très bonne étudiante.
20  11478                COMMISSIONER PENNEFATHER:  Thank you,
21     sir.  Et je le suis toujours, alors je vous écoute.
22  11479                MR. LaPIERRE:  When we began
23     television in the sixties -- the fifties but in the
24     sixties really -- I think that those who knew nothing
25     about it and who began it began with the understanding


 1     in express and non-express -- you have to talk to Daryl
 2     Dugan, you have to talk to McLean and you have to talk
 3     to Patrick Watson and people like that -- that this
 4     would change the world.
 5  11480                It probably was the way, and we were
 6     convinced that it was the way, that we could establish
 7     the cultural unity, as it were, of this country and
 8     that we could put people in communication with each
 9     other and that we could look at the world, not through
10     the keyhole of the Americans but through the large
11     window that perhaps we would create through our
12     intelligence and our creativity.
13  11481                That I think was the function and the
14     battle that took place in the sixties and became, as we
15     went along, elaborated through the development of John
16     Bassett's and Stuart Griffiths' elaboration of the CTV
17     network and that kind of institution.  Now it has grown
18     immensely, avec le résultat qu'essentiellement, à la
19     fin du 20e siècle, on peut réellement commencer à
20     réaliser le rêve qu'on peut avoir un pays qui se parle,
21     un pays qui s'entend, un pays qui est capable, avec ses
22     artistes, de se raconter les histoires de ce pays, et
23     ne pas avoir honte de cela.
24  11482                Consequently, I find myself now at
25     this position with Telefilm Canada with the moral


 1     guardian, as it were really, of that kind of a dream. 
 2     I find myself at the beginning again of 35 years ago. 
 3     So the vision is present.  How we realize it in this
 4     complex reality that we find ourselves in is I think
 5     the question.
 6  11483                The vision is not dead.  It is there. 
 7     It is present.  I think Mr. Cassaday this morning also
 8     expressed it in the process of his own presentation.
 9  11484                Why did I say that I don't care what
10     it costs?  I thought about that.  You know, I am
11     profoundly sad that whenever somebody talks about
12     Canadian content, they talk about it negatively.  They
13     say "Ah, the artists have all gone to the United States
14     of America."  "We are a small country, we cannot afford
15     that."  "It costs too much money."  "We are not making
16     any money from it."
17  11485                The end result is that we have taken
18     Canadian content which is nothing else but the stories
19     about people and who we are.  We have been able now to
20     negativize that to such a degree that we have created a
21     mindset:  Canadian content is lousy and you only watch
22     it accidentally.  Well, that's not true.
23  11486                When I say that it will cost what it
24     needs to cost, right, and that I don't care, this is a
25     very wealthy country.  This is not a country of en voie


 1     de développement.  This is a very wealthy country. 
 2     Unless I am utterly and completely crazy, I have not
 3     heard one single broadcaster or one single person
 4     involved in this industry who says that I am going to
 5     leave it because I don't make money in it.
 6  11487                I never understood capitalism as to
 7     say that people are in business to lose money, so
 8     obviously somebody is making some money, right, because
 9     they are staying in it.
10  11488                I would like people to understand
11     Canadian content in a positive way.  Of course, it's
12     going to cost money.  We all have to put something in
13     it.  It's not all the fault of the broadcasters.  It's
14     not all the fault of the producers.  It's the fault of
15     no one.  We just have to decide what it is that we want
16     to do and put the resources in it.
17  11489                The resources demanded will be very
18     large, but I repeat to you, Madam, that this is a
19     wealthy country.  The privilege to live in it, to work
20     in it and to make money in it has a price and we have
21     to pay that price.  Otherwise we may as well forget it. 
22     We may as well disband you and just forget it.
23  11490                COMMISSIONER PENNEFATHER:  Thank you.
24  11491                Mr. Macerola, you also had a long
25     career in culture, communications, from many points of


 1     view in this country.  Following up on what Mr.
 2     LaPierre has said, do you think we are still trying to
 3     balance in terms of the dilemma and in terms of the
 4     opportunity he has described and the imperative he has
 5     described, two basic trends still.  What we would call
 6     commercial or industrial objectives, what we can afford
 7     to do, and what we would call cultural objectives, and
 8     if I paraphrase Mr. LaPierre correctly, what can we
 9     afford not to do as Canadians.
10  11492                Est-ce que cette dichotomie est
11     toujours avec nous?  Est-ce que c'est faux ou est-ce
12     que c'est réel?  Est-ce que ça touche, même
13     aujourd'hui, aux fonds qu'on gère vis-à-vis la
14     programmation pour la télévision?
15  11493                M. MACEROLA:  Il est bien évident que
16     la télévision est un secteur industriel qui a des
17     objectifs de nature tant commerciale que culturelle,
18     mais personnellement je n'ai jamais fait la différence
19     entre un produit culturel et un produit commercial.
20  11494                Quand j'entends certains
21     radiodiffuseurs faire une nuance entre les produits qui
22     devraient être faits pour le Canada, et plus ces
23     produits-là sont canadiens et moins ces produits-là
24     seront exportables, je m'inscris toujours en faux parce
25     que l'histoire a démontré que les produits qui sont les


 1     plus rentables culturellement, tant au pays qu'à
 2     l'étranger, ce sont des produits qui ont une très
 3     grande densité culturelle.
 4  11495                C'est bien évident qu'il y a des
 5     mesures à prendre au niveau industriel et au niveau
 6     commercial pour faire en sorte qu'éventuellement notre
 7     imaginerie nationale reprenne la place qui lui revient
 8     de droit sur nos écrans de télévision.  Mais il y a
 9     deux discours.  Il y a un discours qui pourrait être
10     totalement culturel relié, naturellement, aux produits
11     dans lesquels le gouvernement canadien investit, et il
12     y a un autre discours qui pourrait éventuellement
13     comptabiliser la rentabilité commerciale d'un produit.
14  11496                Je crois que les deux discours ont
15     leur place, mais que trop souvent on s'est cachés
16     derrière le discours industriel et commercial pour
17     éviter de prendre des risques, pour éviter de
18     challenger la population canadienne et la population du
19     monde avec des produits de très grande densité, avec
20     des produits qui correspondent, avec des produits qui
21     ont un son.  Dans le domaine de la musique, on a trouvé
22     le son canadien.  On l'a trouvé aussi dans le domaine
23     de l'opéra.  On l'a trouvé dans le domaine du théâtre,
24     et au niveau de la télévision et du cinéma, on est
25     encore à la recherche de ce son-là.


 1  11497                Je pense que de faire la dichotomie
 2     entre les deux approches, c'est une façon de
 3     rationaliser très souvent une absence de volonté, une
 4     absence d'imagination, et une absence de désir de
 5     prendre des risques.
 6  11498                CONSEILLÈRE PENNEFATHER:  Merci.
 7  11499                Je voulais, comme c'est évident,
 8     avoir vos commentaires à vous deux là-dessus, parce que
 9     vous êtes là en charge d'une institution culturelle
10     publique très importante au Canada.  Je le mentionne
11     aussi parce que souvent dans nos discussions pendant
12     ces séances on entend et on reçoit toutes sortes de
13     définitions de qu'est-ce que c'est, un programme
14     canadien: basic Canadian, enhanced Canadian, super
15     Canadian -- I am not being facetious, but we are
16     looking at this question.
17  11500                La raison pour laquelle cette
18     définition est devant nous touche le point que vous
19     avez mentionné: jusqu'à quel point cette définition va
20     influencer les décisions du CRTC de réglementation de
21     financement?
22  11501                Je vois, par exemple -- et si j'ai
23     mal compris, vous pouvez m'expliquer -- que le Fonds
24     PPC, ou LFP en anglais, commence à revoir cette
25     question de définition canadienne.  Alors c'est un peu


 1     un exemple du point que vous avez soulevé concernant
 2     les objectifs culturels, les objectifs dits plus
 3     commerciaux.
 4  11502                Est-ce que vous avez un commentaire
 5     sur toute cette question de la définition d'un produit
 6     canadien et où on s'en va avec ça, et qu'est-ce qu'on
 7     devrait prendre comme, par exemple, définition
 8     éclaircie afin de prendre les décisions nécessaires?
 9  11503                M. MACEROLA:  C'est-à-dire que, bon,
10     il y a toutes sortes de systèmes qui effectivement
11     qualifient le contenu canadien et le produit canadien. 
12     Il y a un système de pointage.  Éventuellement dans le
13     domaine des coproductions il y a un système de
14     dépenses, et caetera.
15  11504                Pour moi, ce qui est important, du
16     moins au niveau de Téléfilm Canada, en tant
17     qu'administrateur de la composante programmes de
18     participation au capital, c'est d'investir dans des
19     projets qui sont dans un premier temps les oeuvres de
20     l'imagination de Canadiens, qui ont été faites par des
21     techniciens et des artisans canadiens, qui sont
22     produites par des sociétés canadiennes et qui, enfin,
23     sont capables de confronter les Canadiens avec leur
24     réalité culturelle sur les écrans, tant de télévision
25     que les écrans de cinéma.


 1  11505                La définition à Téléfilm Canada a
 2     toujours été, ou la tendance a toujours été, d'essayer
 3     d'être très profondément Canadiens.  Je me rappelle
 4     qu'à une certaine époque on se contentait d'un système
 5     de points qui disait, bon, 6 points sur 10, c'est
 6     canadien.  Tranquillement on a commencé à hausser la
 7     barre, et présentement je dois vous dire qu'à Téléfilm
 8     Canada, comme administrateur toujours de la composante
 9     du programme de participation au capital, environ
10     99,9 pour cent des projets dans lesquels on investit
11     sont des 10 sur 10.
12  11506                Je pense qu'il y a toutes sortes de
13     possibilités pour le producteur privé et pour le
14     radiodiffuseur, qu'il soit privé ou public.  Il peut
15     s'orienter dans un type de production de nature plus
16     industrielle ou commerciale, entre guillemets, mais
17     quand arrive le temps d'avoir accès à des fonds, les
18     fonds du gouvernement canadien, que ce soit des fonds
19     qui sont donnés directement par le gouvernement
20     canadien ou par l'entremise d'agences comme Téléfilm
21     Canada ou d'autres, il faut à ce moment-là insister
22     pour que ces documents-là reflètent réellement notre
23     réalité.
24  11507                J'ai le bonheur de participer à
25     plusieurs panels ces temps-ci -- avec les commissions


 1     mixtes, on rencontre beaucoup d'étrangers -- et on ne
 2     perd pas beaucoup de temps en Allemagne, à titre
 3     d'exemple, ou en France, pour savoir ce que c'est qu'un
 4     produit français ou un produit allemand.  Je pense
 5     qu'ici à un certain moment donné on devrait se
 6     satisfaire d'une définition, et cette définition-là
 7     devrait être la plus simple possible.  Ça devrait être
 8     l'âme et l'histoire du pays.  Ça devrait être la
 9     réalité, ça devrait être notre imagerie nationale.
10  11508                Maintenant, il y a d'autres sortes de
11     productions.  À ce moment-là, ces productions-là
12     peuvent se financer, soit ici au Canada avec d'autres
13     mesures fiscales de nature plus automatique, comme le
14     crédit d'impôt, et caetera, ou peuvent se financer par
15     l'entremise de coproductions.
16                                                        1350
17  11509                COMMISSIONER PENNEFATHER:  I think
18     what I am getting at, too, is, indeed, I am sure we
19     would all agree, but when you look at the suggestions
20     brought to us by several producers, by organizations,
21     one has to ask:  Where are these definitional
22     suggestions leading?  For example, the Council of
23     Canadians.  In their mind, it would be very dangerous
24     to have a definition or a policy which was geared
25     towards an export strategy because that would affect


 1     the capacity of Canadians to produce truly Canadian
 2     products.
 3  11510                Another example is various players
 4     have come to us to suggest that if a truly
 5     distinguished 10-out-of-10 Canadian product is run in
 6     prime time, we have a 200 per cent credit.  However, it
 7     is possible that raising the bar like that would reduce
 8     the amount of Canadian programming in prime time. 
 9     Therefore, it is of concern to me to understand how
10     this definitional approach finally works out in favour
11     of more Canadian programming in peak hours on Canadian
12     television.
13  11511                It would appear to me that those
14     definitions are very related to a result and that
15     result is either more material in prime time, more
16     expenditures on Canadian, but it's all driving towards
17     what is perhaps a commercial objective as well.  That's
18     why I am asking you your advice and your counsel on how
19     we should approach the matter of definition of Canadian
20     programming.
21  11512                It's very clear in the requirements
22     currently what it should be to be Canadian and yet we
23     still have people coming to this table saying -- more
24     or less being cautious about the definitions of
25     children's programming, for example, because if


 1     Canadian is Canadian locales, children's programming
 2     would have a problem.
 3  11513                So, this is the reason I am asking
 4     you this question.  It's not just as such, but what are
 5     the implications?  Where are we heading in terms of our
 6     desire, all of us, to see more Canadian programming
 7     available to more Canadian viewers?
 8  11514                M. MACEROLA:  Tantôt vous allez
 9     entendre le Fonds canadien de télévision qui va vous
10     mentionner qu'il y a des mesures qui sont prises
11     présentement pour, comment je vous dirais bien,
12     apporter certaines flexibilités, mais il n'en demeure
13     pas moins que plus la définition d'un contenu va faire
14     en sorte que ce contenu-là va être canadien, de grande
15     qualité, et aussi accessible au public -- et là je
16     parle uniquement en fonction, naturellement, du
17     financement public des organismes comme le Fonds
18     canadien de télévision et de Téléfilm Canada -- plus
19     ces définitions vont être non pas restrictives, mais
20     concentrées autour d'un concept de contenu canadien. 
21     Je pense que ça va amener les citoyens canadiens à
22     regarder plus la télévision, et je m'explique.
23  11515                Présentement, les gens sont
24     challengés très souvent par des productions qui ne sont
25     pas toujours de la meilleure qualité possible. 


 1     Parfois, les meilleurs émissions sont programmées à des
 2     heures ou à des créneaux horaires où elles ne devraient
 3     pas l'être.  Parfois on s'embarricade de façon beaucoup
 4     trop rigide dans la définition du prime time, sans
 5     considérer qu'on s'adresse soit aux enfants ou soit aux
 6     adolescents ou soit à d'autres catégories de citoyens.
 7  11516                Plus les citoyens d'ici vont avoir
 8     l'occasion, en période de grande écoute naturellement,
 9     d'avoir accès à des produits canadiens de très belle
10     qualité, plus l'habitude de consommer des biens
11     culturels va se prendre.  Et quand on regarde ce qui se
12     passe tant du côté anglais, avec l'approche de
13     canadianisation des ondes de CBC, quand on regarde du
14     côté français ce qui se passe, on peut rêver.
15  11517                On peut dire qu'éventuellement au
16     lieu d'avoir 32 pour cent de téléspectateurs, on
17     devrait en avoir 60, mais de façon réaliste ce sont des
18     décisions concrètes au niveau de la définition du
19     contenu, au niveau de l'implication des
20     radiodiffuseurs, au niveau de l'implication des
21     producteurs, au niveau de l'implication des organismes
22     publics comme Téléfilm Canada, qui ne peuvent plus se
23     permettre de jouer le jeu de certains producteurs qui
24     voudraient que, je ne sais pas, des productions de
25     nature, entre guillemets, très industrielle, de 6 sur


 1     10, soient considérées non pas comme du contenu
 2     canadien mais financées par des organismes publics. 
 3     C'est la nuance que je veux faire.
 4  11518                La seule façon qu'on a, quant à moi,
 5     que ce soit dans le domaine de la télévision, que ce
 6     soit dans le domaine du long métrage, de faire en sorte
 7     que l'espace ou le temps écran augmente, c'est en étant
 8     très profondément canadiens.  On a un prix à payer pour
 9     cette télévision ici: c'est d'être très profondément
10     canadiens.  C'est à ce prix-là que les Canadiens vont
11     s'y reconnaître et c'est à ce prix-là que les étrangers
12     vont acheter nos émissions de télévision.  Et les
13     chiffres parlent d'eux-mêmes:  "Le Déclin de l'empire
14     américain" et "Anne of Green Gables", deux immenses
15     succès au Canada, deux immenses succès à l'étranger.
16  11519                COMMISSIONER PENNEFATHER:  In that
17     light, in the definition of "success", what is your
18     comment on the proposals that the CAB have made that
19     ultimately the definition of "success" in this country
20     is viewership and that that should be the ultimate goal
21     and the ultimate base for our policy in Canada?
22  11520                MR. LaPIERRE:  Madam, of course,
23     audience is the thing.  I understand that's the way
24     commercials are sold.  You have to deliver an audience
25     and you have to deliver, therefore, the best possible


 1     program in order to attract the audience that you want. 
 2     So, of course, viewership is necessary, but viewership
 3     cannot be taken in isolation and in a vacuum.
 4  11521                It is a living organism that lives
 5     within a community of people.  Consequently, Canadians
 6     are accustomed to watching television.  Even though
 7     some of us may watch it 24 hours a day, most Canadians
 8     watch television, I understand, after they come back
 9     from work and most of us work from 9:00 to 5:00
10     everyday.
11  11522                So, consequently, it's to be able to
12     view viewership in its totality, but also when you
13     consider that it does not have a bearing on where you
14     put the program in the day -- therefore, at the end of
15     the month you have all the viewers that have watched
16     Canadian-made programs and Canadian content -- at the
17     end of the year you arrive with a certain number and
18     then the CRTC puts on a statement whereby you have to
19     increase this by such-and-such a number, et cetera, et
20     cetera, et cetera.
21  11523                With all due respect to the
22     broadcasters, I think it's an artificial instrument
23     because it seems to me that what we are talking about
24     is to be able to show Canadian programs when there are
25     the largest possible number of Canadians capable of


 1     watching it and that can only be between the hours of
 2     5:00 or 6:00 or 7:00 o'clock until 11:00 o'clock.  If
 3     it is true that Canadians go to bed with Peter
 4     Mansbridge at 11:00 o'clock, then it seems obvious that
 5     we have to be able to bear that mind.  Why Canadians
 6     would want to do that is beyond me, but that's another
 7     matter.  They ought to wait for Floyd to arrive on the
 8     air -- or Lloyd Robertson, rather.
 9  11524                It seems to me that what I am trying
10     to say here, Madam, is the day is divided by the
11     broadcaster dans sa grille horaire il fait des
12     distinctions.  Il m'apparaît évident que, pour remplir
13     les contenus du contenu canadien, il va falloir que les
14     programmes canadiens puissent aussi servir cette grille
15     horaire.  Le matin, ce n'est pas le soir.  Le soir, on
16     ne met pas les mêmes programmes.  So, I think that we
17     have to re-think seriously whether viewership is the
18     only criteria whereby we are going to bring the people.
19  11525                May I add one more thing, Madam,
20     about Canadian content while I may?  You cannot have
21     Canadian content, if necessary, but not necessarily
22     Canadian content.  You cannot do that.  Canadian
23     content means, essentially, to me at least, and the
24     judgment of it is based on a simple question:  How much
25     does it speak of Canada?  That's the crux.


 1  11526                In the process of answering the
 2     question, you ask others:  Is a story a Canadian one by
 3     means that it can really reflect Canadian lives, touch
 4     Canadian lives, enable us to get into the roots of
 5     ourselves, be able to put us in communication with
 6     other people to share a common experience, be able to
 7     give us the kind of moral instruments to be able to
 8     face the world and do the great things that we have to
 9     do and that Sir Wilfred Laurier dreamed about?  These
10     are the things to me that are of value.
11  11527                I say to people when I talk about
12     this that the aims of the Broadcasting Act in terms of
13     quality, which also means originality and diversity,
14     will be in the qualitative assessment of Canadian
15     content.  For far too long we have assessed Canadian
16     content in a quantitative way.  The day will come when
17     we have been able to devise the processes to do that, 
18     to assess it in a qualitative way, because it isn't
19     Canadian content that we shall catch the conscience of
20     the king.
21  11528                It seems to me, therefore, that we
22     have to be very, very careful and the Canadian
23     Television Fund has arrived at some basic criteria of
24     Canadian content, which I'm sure that Mr. Stursberg and
25     Mr. Macerola and Mr. Toth will devise for you or tell


 1     you later.
 2  11529                MR. MACEROLA:  Viewership is very,
 3     very important, but coming back to the CAB proposal, I
 4     personally believe that it is a noble objective.  I
 5     personally agree with that kind of objective, but it
 6     will have at a certain point to be better defined.
 7  11530                I don't think that it's worth
 8     establishing a viewership increase objective by saying
 9     we are going from 32 to 35 per cent.  I think that we
10     should subdivide and be able at a certain point to
11     establish some viewership objectives according to the
12     genre, according to the under-represented categories,
13     and so on and so forth, and be able at a certain point
14     to evaluate at the end of the process why it didn't
15     succeed or why it did succeed.  For me programming is
16     very important.  If you program a particular Canadian
17     program against the most popular American ones, that's
18     another question.  That, at a certain point, we will
19     have to address.
20  11531                COMMISSIONER PENNEFATHER:  I think we
21     will come back to it later when we look at some of your
22     specific recommendations regarding the support the
23     broadcasters would give to Canadian programming
24     because, at a minimum, one of the points they have
25     raised is the requirement for greater flexibility in


 1     terms of programming to the audience at an appropriate
 2     time and supporting Canadian programming in that regard
 3     by having greater flexibility, particularly in
 4     scheduling requirements.  So, we might want to come
 5     back to that.
 6  11532                J'aimerais toucher maintenant à la
 7     différence entre le marché francophone et le marché
 8     anglophone.  Il va de soi qu'il y a une distinction
 9     importante à prendre en considération.  Certainement la
10     plupart des intervenants francophones ont mis l'accent
11     sur le caractère unique de ce marché et le besoin
12     d'établir un cadre réglementaire distinct qui
13     refléterait cette réalité.
14  11533                J'aimerais avoir vos commentaires sur
15     certaines recommandations et certainement l'approche
16     qui a été prise par certains de ces intervenants
17     francophones.  À titre d'exemple, croyez-vous qu'il
18     serait utile de revoir la répartition dans les
19     différentes catégories de fonds du Programme de
20     participation au capital que vous gérez, qu'il soit
21     mieux adapté aux réalités du secteur de radiodiffusion
22     de langues française et anglaise, comme le propose le
23     Groupe Coscient?  C'est la recommandation no 8.
24  11534                Dans ce cas, il est dit:
25                            "Dans le cas d'émissions de


 1                            langue française, nous croyons
 2                            que cette priorité et cette
 3                            prépondérance devraient viser:
 4                            les "fictions lourdes" (incluant
 5                            séries et mini-séries
 6                            dramatiques, téléfilms et longs
 7                            métrages cinématographiques) et
 8                            les "téléromans plus"; les
 9                            émissions pour enfants (incluant
10                            les films, les séries
11                            dramatiques et d'animation)
12                            ainsi que les autres types
13                            d'émissions jeunesse; les
14                            documentaires."
15  11535                L'APFTQ aussi avait suggéré -- je
16     pense que c'est une nouvelle approche aussi -- de
17     donner des crédits de 150 pour cent pour les fictions
18     lourdes et 125 pour cent pour les téléromans.  Si j'ai
19     mal cité, on peut me corriger.
20  11536                C'est certainement des interventions
21     importantes pour le marché francophone, où il y a un
22     succès, où notre discussion sur le contenu canadien, la
23     présence du contenu canadien sur nos écrans, est
24     différente, ça va de soi, mais leur préoccupation est
25     certainement le financement de leur produit.


 1  11537                Pouvez-vous faire un commentaire là-
 2     dessus, s'il vous plaît.
 3  11538                M. MACEROLA:  Dans l'ensemble, je
 4     pense qu'il faudrait que la réglementation tienne
 5     compte de la réalité des deux marchés.  Ça va de soi.
 6  11539                Dans un premier temps, il y aurait
 7     certainement à revoir le concept des catégories sous-
 8     représentées en fonction du premier commentaire que je
 9     viens de faire, à savoir, entre le marché français et
10     le marché anglais.  Le marché est complètement
11     différent.  Il existe Radio-Canada, il existe TQS, il
12     existe TVA, il existe aussi Télé-Québec, alors que du
13     côté anglophone c'est tout à fait différent.  Vous avez
14     plusieurs réseaux; vous avez aussi plusieurs services
15     spécialisés.
16  11540                Je pense qu'il faudrait que les
17     politiques soient réellement définies en fonction de ce
18     marché-là, qui est un marché très particulier, un
19     marché qui produit de la télévision de très belle
20     qualité, un marché qui a un auditoire qui est beaucoup
21     plus captif que le Canada anglais, un marché qui
22     produit des documents qui sont difficilement
23     exportables, et par conséquent qui doit plus compter
24     sur l'investissement public dans son financement, et
25     enfin un marché qui pourrait éventuellement s'ouvrir


 1     sur la réalité canadienne.  Là, je m'explique.
 2  11541                Je pense qu'il faudrait être capables
 3     de faire en sorte que les émissions qui sont produites
 4     au Québec soient vues du côté du Canada anglais et vice
 5     versa, et ce, de façon beaucoup plus systématique. 
 6     Quand on parle de laisser le tout aux règles du jeux du
 7     marché, je pense qu'il devrait y avoir une volonté plus
 8     interventionniste à ce niveau-là, mais de là à répondre
 9     à votre question, c'est oui.  Oui, nous devons revoir
10     certaines procédures, méthodes, définitions, en
11     fonction de ce marché particulier.
12  11542                CONSEILLÈRE PENNEFATHER:  Et vous
13     êtes d'accord aussi que ces crédits seront appliqués
14     seulement en ce qui concerne une production du secteur
15     indépendant?
16  11543                M. MACEROLA:  Oui, absolument.
17  11544                CONSEILLÈRE PENNEFATHER:  Maintenant,
18     je veux parler de certaines de vos recommandations
19     spécifiques, dont j'ai la copie en français.
20  11545                La production régionale, la
21     recommandation no 3 est la suivante:
22                            "Le Conseil devrait exiger, par
23                            des conditions de licence, que
24                            les radiodiffuseurs déclenchent
25                            un nombre convenable de


 1                            productions régionales."
 2  11546                Pourriez-vous nous donner une
 3     définition de la production régionale?  Deuxièmement,
 4     qu'est-ce que vous recommandez, en peut-être plus de
 5     détail, que le CRTC devrait faire en ce sens-là?  Et
 6     vous pouvez aussi nous parler un peu de vos politiques
 7     régionales et l'impact que ces nouvelles conditions de
 8     licence pourraient avoir sur vos règlements et vos
 9     objectifs existants.
10  11547                M. MACEROLA:  Pour nous, la
11     définition d'une production régionale, ce n'est pas une
12     production qui est tournée à Saskatoon par une équipe
13     de Toronto ou de Montréal.  Pour nous, il y a des
14     critères qui sont très importants.  Dans un premier
15     temps, c'est l'implication créatrice des gens d'où la
16     production origine.  Ça, c'est important. 
17     Deuxièmement, le contrôle de la production; que le
18     producteur régional ait le contrôle de la production.
19  11548                En plus, il y a le phénomène de
20     l'exercice aussi des droits de distribution reliés à
21     cette production-là.  On pense encore une fois que
22     c'est important que le producteur local conserve des
23     droits de distribution.  Et finalement, on veut que ce
24     soit une émission qui reflète cette réalité-là, qui a
25     été pensée par des gens de ce milieu-là, et qui a été


 1     faite aussi par des gens de ce milieu-là.  Ça n'exclut
 2     pas nécessairement la coproduction entre différentes
 3     provinces et régions, mais ça, on pourra tantôt en
 4     reparler.
 5  11549                On a, d'un autre côté, établi un
 6     certain nombre de mesures au niveau des productions
 7     régionales.  On a réduit les exigences au niveau de la
 8     licence.  On a réduit certaines autres exigences qu'on
 9     peut avoir au niveau de l'implication des producteurs
10     et des distributeurs.
11  11550                Présentement ce qu'on aimerait c'est
12     que les diffuseurs qui opèrent à l'extérieur des grands
13     centres de Montréal et de Toronto considèrent les
14     autres endroits au pays comme étant des régions où ça
15     vaut la peine de faire en sorte qu'il y ait des
16     développements d'émissions de très belle qualité.
17  11551                CONSEILLÈRE PENNEFATHER:  Mais vous
18     recommandez, je pense, les conditions de licence. Ça
19     veut dire peut-être un certain montant, certaines
20     dépenses.
21  11552                For the Fund -- je l'ai en anglais:
22                            "Telefilm shall seek to
23                            encourage regional production
24                            and maintain appropriate
25                            balance."


 1  11553                Mais pas plus que ça.
 2  11554                Si j'ai bien compris, est-ce que
 3     c'est une enveloppe précise, ou est-ce que vous
 4     recommandez quelque chose un peu plus spécifique pour
 5     les producteurs et les télédiffuseurs?
 6  11555                M. MACEROLA:  C'est-à-dire qu'on
 7     voudrait être capables d'avoir les outils qui nous
 8     permettraient de réaliser notre mandat qui nous est
 9     donné par le Gouvernement du Canada de faire en sorte
10     que la réalité culturelle télévisuelle du pays ne soit
11     pas uniquement définie à partir de Montréal et de
12     Toronto.  Ça, c'est notre mandat.
13  11556                Partant de là, ce qu'on se dit est
14     que, à titre d'exemple, pour Radio-Canada, une
15     production régionale, c'est une production qui est
16     tournée à l'extérieur de Montréal et Toronto.  Par
17     conséquent, très souvent vous avez des cars de
18     reportages de Radio-Canada qui se trouvent à Moncton,
19     et ça devient une production régionale.  Mais
20     l'implication créatrice des gens du milieu est où?
21  11557                Au niveau du programme de
22     régionalisation de Téléfilm Canada, on n'a pas établi,
23     comment je vous dirais bien, d'enveloppe telle quelle,
24     mais on a établi des objectifs de dépenses, objectifs
25     de dépenses qui sont inter-transférables entre


 1     différentes régions et qui sont, comment je dirais
 2     bien, intimement liés à la population.
 3  11558                Par conséquent, on essaie de se dire
 4     que si dans les provinces de l'ouest il y a une
 5     population de 35 pour cent d'habitants, on aimerait que
 6     les investissements de Téléfilm Canada dans ces quatre
 7     provinces là en particulier soient dans cet ordre de
 8     grandeur là, pas au prix, naturellement, de produire ou
 9     d'investir dans des projets qui n'ont pas la qualité
10     voulue pour être radiodiffusés.
11  11559                CONSEILLÈRE PENNEFATHER:  Laissez-moi
12     demander si, par exemple, vous supportez l'idée de
13     CFTPA qu'il y a une formule de 10/10/10.  Je suis
14     certaine que vous êtes au courant.
15  11560                M. MACEROLA:  Oui.
16  11561                CONSEILLÈRE PENNEFATHER:  Ou bien
17     Directors Guild, qui propose une autre formule, 7/7 et
18     7/11.  Est-ce qu'à l'intérieur de ces 10 vous proposez
19     une proportion de productions régionales?  Est-ce que
20     c'est comme ça que ça va marcher?
21  11562                M. MACEROLA:  Moi, je pense qu'il
22     pourrait y avoir deux choses.  Dans un premier temps,
23     on pourrait jouer sur la définition du prime time et
24     essayer d'élargir un peu pour permettre à certaines
25     émissions régionales, qui n'ont pas nécessairement


 1     peut-être toute la qualité pour être diffusées entre
 2     8 h 00 et 11 h 00, puissent l'être de 6 h 00 à 7 h 00,
 3     quelque chose comme ça, dans un premier temps.
 4  11563                Dans un deuxième temps, je pense que
 5     les radiodiffuseurs devraient prendre des engagements
 6     au niveau du déclenchement d'émissions de télévision
 7     produites par des producteurs indépendants régionaux.
 8                                                        1415
 9  11564                COMMISSIONER PENNEFATHER:  It is
10     interesting.  This question is also one that is either
11     the same as or different from what people call local
12     programming.
13  11565                When we went around the country and
14     talked to people about television, certainly their
15     concerns largely centred on the need for local
16     programming.
17  11566                Do you have any comments or
18     suggestions on not only how to address the need and
19     interests of the population and local programming, but
20     on what I have I assume heard, a dichotomy or a
21     difficulty in both supporting local programming and
22     expensive high-cost drama in prime time.
23  11567                I am talking about the private
24     conventional broadcasters.  I would like to focus on
25     that aspect of television.


 1  11568                Do you have any sense of how those
 2     components can be balanced?
 3  11569                MR. LaPIERRE:  One of the worst
 4     developments in Canadian broadcasting has been the
 5     removal of local production and regional production, so
 6     that the people who live in those communities have
 7     absolutely no opportunity, except through news from
 8     time to time, of speaking to themselves about
 9     themselves and about the experiences in the process of
10     the storytelling of Canada.
11  11570                It seems to me, therefore, obvious
12     that that must be repaired.  Without it being repaired,
13     the fulfilment of one of the requirements of the
14     Broadcasting Act insofar as programming is concerned,
15     which has to do with diversity, will not be fulfilled.
16  11571                Consequently, it is through the
17     regional and local producer -- and to me, they are the
18     same.  It is very difficult now to talk about local
19     programming when in many localities there is no
20     television outlet whatsoever and no centres to do that. 
21     I think we are talking about regional production.
22  11572                It is, to me, very sad that in
23     Vancouver, for instance, there is absolutely no
24     opportunity whatsoever for artists, actors, plays to
25     present themselves on the local and regional networks


 1     that are being formed in those provinces from time to
 2     time and also on the television station which serves
 3     them.  It seems to me abhorrent.
 4  11573                Canada is a country of diversity.  It
 5     exists because of diversity, and it can never, never,
 6     never, never erase its diversity because it will cease
 7     to exist.
 8  11574                Consequently, the attempt of the
 9     broadcasting system to look at that diversity through
10     the keyhole of Toronto and Montreal -- and particularly
11     this is true of the French-speaking Canadians who live
12     outside of Montreal, outside of Quebec.
13  11575                I have lived as such and I continue
14     to do so.  I must tell you, Madame, que c'est
15     absolument aberrant that we cannot speak as franco-
16     Ontarians to each other on the airwaves of our
17     province, of our area -- except in certain affairs
18     programs and broadcasting -- and that our plays and our
19     artistic creations have no voice because they don't
20     originate from Montreal.
21  11576                It is like saying to us:  "All right,
22     we will hire you Canadians to do this program, but we
23     will think about it in Los Angeles.  We will plan it in
24     Los Angeles but we will send it to you and you can do
25     it, because we want the tax credits."


 1  11577                We have to put an end to that.  How
 2     do we go about doing that?  I think this is through a
 3     condition of licence.
 4  11578                A condition of licence must be that
 5     there must be local hours of programming -- if it is
 6     not already there -- but that it must go beyond the
 7     news and public affairs.  It must be in the under-
 8     represented categories.
 9  11579                So in the final analysis, if the
10     purpose of the exercise is for Canadians to tell each
11     other stories, they must be also able to tell each
12     other stories in their own communities.  And it has to
13     be a condition of licence.
14  11580                Of course it is going to cost money. 
15     But that is the price.  There is no other way out.
16  11581                M. MACEROLA:  Présentement à Téléfilm
17     Canada nos investissements sont... je n'ai pas fait de
18     radio ni de télévision.  Nos investissements sont de
19     l'ordre de 70 pour cent à Montréal et à Toronto.  Je
20     pense qu'il faudrait améliorer la situation, et ce
21     n'est pas avec le charme du président du conseil
22     d'administration ou du directeur exécutif de Téléfilm
23     Canada qu'on va y réussir; c'est en ayant des
24     conditions qui sont attachées à l'octroi de licences de
25     la part du CRTC.


 1  11582                On parle du 10/10/10, du 7/7/7.  Il y
 2     a toutes sortes de plans.  L'APFTQ propose des licences
 3     à 40 pour cent, et caetera.  Ça, ce n'est pas ma
 4     compétence, mais si on veut réellement que la
 5     télévision d'ici reflète la réalité canadienne dans son
 6     ensemble et qu'elle ne soit pas dépeinte uniquement de
 7     Montréal et de Toronto, il va falloir prendre des
 8     décisions difficiles et il va falloir être capables de
 9     dire à certains diffuseurs privés et publics, incluant
10     Radio-Canada/CBC:  "Vous allez devoir déclencher des
11     émissions ailleurs qu'à Montréal et à Toronto et vous
12     allez devoir revoir votre définition d'une production
13     régionale, ne pas la limiter uniquement aux nouvelles
14     et aux sports mais faire en sorte que ce soit
15     réellement une oeuvre qui dépeigne une réalité
16     culturelle, qui implique les talents locaux."
17  11583                CONSEILLÈRE PENNEFATHER:  Merci. 
18     Maintenant, on va faire la même chose et exiger que les
19     radiodiffuseurs participent plus activement au
20     financement et à l'exploitation et marketing...
21     marketing, c'est un mot français, ça?
22  11584                M. MACEROLA:  Oui.
23  11585                CONSEILLÈRE PENNEFATHER:  Merci...
24     donc à l'exploitation et au marketing des longs
25     métrages canadiens.  En particulier, les


 1     radiodiffuseurs devraient présenter plus de longs
 2     métrages à la télévision, verser des droits de
 3     diffusion plus élevés pour les longs métrages, investir
 4     dans le financement de longs métrages et promouvoir les
 5     longs métrages à la télévision.
 6  11586                Pourriez-vous nous donner plus de
 7     détails sur comment et quel est le cadre réglementaire
 8     que vous proposez plus spécifiquement à cet égard?
 9  11587                M. MACEROLA:  Dans tous les pays,
10     produire du cinéma, c'est un effort collectif, un
11     effort collectif qui engage non seulement les
12     producteurs de longs métrages et les distributeurs de
13     longs métrages, mais aussi les radiodiffuseurs.  Que ce
14     soit en France, que ce soit en Italie, que ce soit en
15     Allemagne, le cinéma national est subventionné de façon
16     importante par les diffuseurs nationaux.
17  11588                Par conséquent, on pense que, oui,
18     les diffuseurs privés et publics devraient
19     éventuellement être invités à participer à la mise sur
20     pied d'un fonds de production de longs métrages en y
21     injectant une portion de leurs revenus nets.  Le modèle
22     pourrait rester à déterminer.
23  11589                Deuxièmement, je trouve indécent que
24     des diffuseurs achètent des oeuvres canadiennes de très
25     grande qualité à des prix qui sont complètement


 1     ridicules en fonction du marché; et là je mets mon
 2     chapeau d'ancien distributeur, où je devais me mettre à
 3     genoux pour obtenir un 50 000 $ ou un 75 000 $ pour un
 4     très grand film québécois canadien alors que le
 5     collègue américain, c'était plutôt les sociétés de
 6     radiodiffusion qui le priaient de leur vendre très
 7     souvent des films de catégorie B.
 8  11590                Je pense que les radiodiffuseurs
 9     devraient aussi être invités à investir non pas
10     simplement au niveau de l'achat de droits mais au
11     niveau de l'achat d'équité dans les différentes
12     productions.
13  11591                Enfin, avec un mécanisme qui
14     permettrait de considérer, entre guillemets, comme
15     contenu canadien des moments de promotion et de
16     publicité qu'ils pourraient offrir gratuitement à la
17     communauté de production et de distribution du pays.
18  11592                Comment tout ça se fait?  Ça se fait,
19     quant à moi, dans un cadre réglementaire, ça se fait
20     possiblement quand arrivent des grands renouvellements,
21     des grands chambardements dans le domaine de la
22     radiodiffusion.  Comme conditions, il y a certainement
23     des conditions qui peuvent être posées par le CRTC, des
24     conditions qui sont intimement reliées à la survie de
25     notre cinématographie canadienne.


 1  11593                Si les radiodiffuseurs publics et
 2     privés ne jouent pas leur rôle de partenaires
 3     privilégiés de la production et de la distribution de
 4     longs métrages dans ce pays, on va continuer à vivoter,
 5     on va continuer à produire une vingtaine de films par
 6     année, et le cinéma va toujours continuer à être
 7     l'enfant négligé du gouvernement.
 8  11594                La télévision est très privilégiée. 
 9     Il y a une Loi sur la radiodiffusion, il y a le CRTC,
10     il y a des organismes qui font en sorte que la
11     télévision est au centre de la réflexion culturelle du
12     pays.  Au niveau du long métrage, le long métrage a
13     toujours été mis de côté, négligé, sans aucun cadre
14     législatif et laissé seul face à la compétition des
15     Américains.  Par conséquent, je pense que les
16     diffuseurs ont un rôle à jouer, et que le CRTC a un
17     rôle à jouer en posant un certain nombre de conditions.
18  11595                MR. LaPIERRE:  One of the things that
19     has struck me since the beginning of these hearings has
20     been to try to find a culprit somewhere or to find
21     someone who should do more than others.
22  11596                The purpose of the exercise is
23     essentially a reconciliation of conflicting points of
24     views and of interest.  It seems to me that if we are
25     going to put upon the broadcaster larger


 1     responsibilities than he has now, make him pour more
 2     and more of his hard-earned cash into these kinds of
 3     programs, I think that the producers, the funding
 4     agencies, everybody is going to have to accept that
 5     there must be a quid pro quo.
 6  11597                Therefore, when we say this about the
 7     broadcasters, it is not pour les saigner à blanc, c'est
 8     essentiellement pour leur dire que, if the purpose of
 9     the exercise is for Canadians to hear their stories,
10     feature film is an important matter of that.  And since
11     feature film has to be produced in Canada, they have to
12     be part of the process that does that.
13  11598                I have suggested before that the
14     contribution of the broadcasters could also be in kind. 
15     We talk about promoting a star system in Canada.
16  11599                I find it rather odd that I was fired
17     because the CBC thought that both Patrick Watson and I
18     were becoming stars, in the 1960s -- and we were not to
19     have any stars.
20  11600                However, I am glad that 35 years
21     later, perhaps we are beginning to realize that I would
22     have made a very good star if I had had the opportunity
23     to do so.
24  11601                I am glad that we are coming back to
25     the star system in one way or another.  We will not be


 1     able to do that without the cooperation of the
 2     broadcasters.  So we have to think about these things
 3     as we go along.
 4  11602                COMMISSIONER PENNEFATHER:  Do you
 5     have now some practical ideas about how in fact that
 6     star system and promotion can be accomplished?
 7  11603                Here we can talk about features but
 8     also about other programming.  Many suggestions have
 9     come to us, some of which have also, as in the CFPTA,
10     said that they should not only promote but that the
11     promotion effort should be included in their Canadian
12     programming expenses.
13  11604                Would you go that far?
14  11605                MR. LaPIERRE:  If you want an
15     objective, give them what they want.  If they want to
16     count that as part of Canadian content, I don't care,
17     as long as it is done.
18  11606                The objective is not that.  The
19     objective essentially is to get the broadcaster,
20     whoever it is, to be able to assist and to contribute
21     to that kind of a process.
22  11607                COMMISSIONER PENNEFATHER:  Why are
23     they not doing it now?  Why do you need us to tell them
24     to do this?
25  11608                MR. LaPIERRE:  I think that they are


 1     not doing it now because --
 2  11609                In Quebec, I think it is natural that
 3     the star system be developed, because we who speak
 4     French in North America are very few and far between. 
 5     Consequently, we are surrounded by this massive star
 6     system.
 7  11610                Il nous faut nous donner des gens à
 8     nous.  Alors les gens à nous, ce sont les étoiles de
 9     nos cinéma, les étoiles de notre télévision, les
10     auteurs, et caetera, et on veut connaître leur vie.
11  11611                That is what the star system means. 
12     We have to see them to understand that.
13  11612                In the world of Canada that we call
14     English Canada -- an expression that I do not like.  In
15     English speaking Canada there seems to be a tremendous
16     revulsion to doing that.
17  11613                Look at Paul Gross.  It doesn't take
18     a genius marketer to take this magnificent man -- or
19     Madame Saulnier Entredos -- take these magnificent
20     creatures and make them a star in 24 hours; a well-
21     known name recognized across the country.
22  11614                Last year the Canadian Television
23     Fund, or its predecessor, brought to the hill the great
24     stars of our television in both French and English. 
25     Members of Parliament, members of Cabinet, perhaps even


 1     Chief Justices of the Supreme Court, vied with each
 2     other to be able to get to know these people, because
 3     they told them stories.  They wanted that kind of
 4     connection.  We have to find that.
 5  11615                We need publicity.  We need presence.
 6     We need a capacity to surround them through a bureau of
 7     information of various kinds to distribute information
 8     about them.  And we have to show them.
 9  11616                Monsieur Duranleau, when he became
10     Archbishop of Sherbrooke, he used to go around the city
11     in his carriage.  He said:  "Quand on a un cheval neuf,
12     il faut le montrer."
13  11617                It seems to me that there is some
14     validity to that.
15                                                        1430
16  11618                M. MACEROLA:  Juste pour répondre à
17     votre question concernant pourquoi on a besoin du
18     CRTC... parce que si le CRTC ne dicte pas des
19     conditiOns, ça ne se fera pas, tant au niveau de...
20  11619                COMMISSIONER PENNEFATHER:  It is not
21     good business to promote good Canadian programming?
22  11620                M. MACEROLA:  Vous savez aussi bien
23     que moi l'opinion que les gens ont du cinéma canadien. 
24     Présentement, au niveau de la ministre Mme Copps, il y
25     a un comité de réflexion qui a été mis sur pied, mais


 1     il faut changer les choses, il faut changer les
 2     mentalités.
 3  11621                La télévision, ça fait 30-35 ans
 4     qu'on essaie de changer les mentalités, et ça
 5     fonctionne maintenant.  Il y a maintenant un star
 6     system en télévision qui fonctionne.  Par conséquent,
 7     au niveau du cinéma, le cinéma a besoin de ce coup de
 8     main là de la part du CRTC, parce que ce n'est pas
 9     rentable.  Ça va le devenir, mais très souvent des gens
10     qui sont dans le milieu ont des visions qui sont à très
11     court terme.  Ce qui n'est pas rentable aujourd'hui
12     pourra peut-être ne pas le devenir demain, ou on perd
13     de l'argent sur la programmation canadienne.  Vous avez
14     entendu ce discours-là, et il faudrait qu'on fasse de
15     l'argent sur chaque émission canadienne qu'on met en
16     ondes.
17  11622                Par conséquent, imaginez-vous quand
18     arrive le temps du long métrage, qu'est-ce que les
19     radiodiffuseurs exigent: l'impossible.
20  11623                COMMISSIONER PENNEFATHER:  So in
21     order to involve broadcasters more consistently and
22     effectively in feature film, what kind of incentives
23     are you proposing?
24  11624                MR. MACEROLA:  What kind of what?
25  11625                COMMISSIONER PENNEFATHER: 


 1     Incentives. --
 2  11626                M. MACEROLA:  Quant à moi, ce n'est
 3     pas à nous à les définir, dans un premier temps.
 4  11627                CONSEILLÈRE PENNEFATHER:  C'est à
 5     nous?
 6  11628                M. MACEROLA:  Je pense que c'est à
 7     vous, mais c'est certainement des incentives related to
 8     the Canadian content, to Canadian expenses, and I guess
 9     that's it.  To be able to account for these expenses as
10     being, you know, Canadian programming expenses and to
11     account for the promo material as being Canadian
12     content.  Maybe there are some other incentives, but I
13     am not the expert at that.
14  11629                COMMISSIONER PENNEFATHER:  Well, it's
15     interesting because Madam Wylie asked this question
16     this morning.  It's an example of the balancing act and
17     the choices.  Let's take some of the existing methods.
18  11630                There are exhibition requirements and
19     there expenditure requirements currently.  There are
20     also proposals on the table involving both, 10 and 10
21     for example, and time.
22  11631                Why do we need both?  Would it not be
23     possible, as Madam Wylie was discussing this morning,
24     to have exhibition requirements on their own.  Prime
25     time, you have to carry this material.  You have to


 1     draw audience to maintain your revenues.  Therefore,
 2     it's going to be the best.  It will follow as night
 3     follows day that you will have quality programming and
 4     expenditures appropriately applied.
 5  11632                What do you think of that?  You have
 6     proposed in your recommendations both to continue. In
 7     fact, you are hinting that those increase by some
 8     amount.  You still feel it's important to have both. 
 9     Why is that?
10  11633                M. MACEROLA:  Parce qu'on va toujours
11     avoir besoin d'un environnement "régulé" à l'intérieur
12     du secteur de la télévision, et que d'autre part je
13     pense qu'éventuellement on pourrait s'éloigner de
14     certaines réglementations; mais que pour l'instant le
15     système n'a pas encore fait ses preuves, et il doit
16     continuer à avoir à rendre des comptes au niveau non
17     simplement de l'accessibilité ou de la programmation,
18     mais aussi au niveau du montant des investissements en
19     productions canadiennes.
20  11634                COMMISSIONER PENNEFATHER:  I think
21     this is recommendations 4 and 5 which also speak about
22     encouraging investment in production and encouraging
23     "les radiodiffuseurs à devenir des partenaires et
24     d'accroître l'accès des Canadiens aux émissions
25     canadiennes".


 1  11635                This brings me to the question then. 
 2     We have spoken about marketing.  We have spoken about
 3     participation and we haven't really talked about
 4     financing in that sense, participation.  This has been
 5     a question that has come up a lot in these hearings.
 6  11636                It involves equity investment in
 7     projects both for television and feature films and it
 8     involves often broadcaster participation or broadcaster
 9     to the production fund, to the EIP.
10  11637                It's my reading of your
11     recommendations that it remain that broadcasters do not
12     have access to this production fund, that it remains
13     solely accessible to the production sectors.  Is this a
14     correct reading?
15  11638                MR. MACEROLA:  What we are really
16     recommending is the establishment of a small task force
17     in able to be able to put some more thinking into that
18     question of broadcasters directly or through affiliated
19     production companies to access the equity component.
20  11639                COMMISSIONER PENNEFATHER:  Why --
21  11640                MR. MACEROLA:  It's not a decision
22     that Telefilm Canada will make. I guess that it's a
23     decision that the Canadian government will have at a
24     certain point to make.
25  11641                We know that there will be some


 1     effects on the independent private sector.  On the
 2     other hand, I don't know to which extent the
 3     broadcasters are really interested in having access to
 4     the equity component.  They now have access to the
 5     licence fee component.  They take there only 2, 3 or 4
 6     per cent.
 7  11642                I personally believe that some more
 8     thinking should be put into that dossier and a
 9     recommendation made to the Canadian government.  I
10     personally believe that at the end it's not Telefilm
11     Canada's decision or the Television Fund decision. 
12     It's more a government decision.
13  11643                You know, we must be able to evaluate
14     the effect of that kind of decision of the overall
15     industrial environment.
16  11644                COMMISSIONER PENNEFATHER:  But you
17     are proposing, and you don't have to comment further if
18     you don't wish, but you are proposing a task force
19     because, am I right, that you see this is an important
20     question and that there may be some solutions.
21  11645                In fact, we have had some suggestions
22     and maybe you would care to comment.  Broadcaster
23     access to the equity investment program under certain
24     conditions, the Canadian Media Guild for example,
25     suggests a proportion of 10 to 15 per cent be set


 1     aside.
 2  11646                They also make a suggestion that 3
 3     per cent of revenues obtained from the purchase of
 4     foreign program be dedicated to this purpose.  Do you
 5     have any comment on those suggestions?
 6  11647                MR. MACEROLA:  You know, there are
 7     god suggestions.  For example, in Quebec now the
 8     broadcasters have access to the tax credit.  In return,
 9     they invest into the establishment.  They have invested
10     into the establishment of a feature film production.
11  11648                What I am trying to say is that this
12     decision has not been made by Telefilm Canada.  This
13     decision has been made by the Canadian government when
14     it established the Broadcasting Fund.  The objective
15     was to develop the independent private sector
16     production.
17  11649                I personally believe that without
18     having any kind of, you know, bias concerning the final
19     decision, I think it is worth spending some time on
20     that dossier, trying to find some new, imaginative
21     solutions.  You know, before when you were a producer,
22     you were a producer for your entire life.  The same
23     when you were a broadcaster.  Now everything is
24     integrated.
25  11650                What I would like to be sure of is


 1     that the procedures and the guidelines answer the needs
 2     of the television milieu.  I don't know what will be
 3     the end result of that small task force, but at least
 4     at a certain point at least we will have been able to
 5     put some thinking into it and for Telefilm Canada to
 6     tell the world that we are not the ones who have made
 7     that decision.  It's a Canadian government decision.
 8  11651                COMMISSIONER PENNEFATHER:  One
 9     decision --  Sorry.
10  11652                MR. LaPIERRE:  Do you mind?
11  11653                The bottom line for me on this
12     question is essentially the value that we attach to the
13     independent producer.  If we begin to satellize
14     production around broadcasting agencies, we are going
15     to destroy or certainly weaken the Canadian
16     independents.
17  11654                To the degree that we weaken it, to
18     that degree we put in danger the entire edifice of
19     diversity which is, after all, one of the basis of the
20     Broadcasting Act.
21  11655                The bottom line for me in the study
22     that Mr. Macerola suggested which I agree with, because
23     there are so many questions that are unanswered, the
24     bottom line must be the continued present participation
25     of independents and the preservation of their


 1     fundamental artistic rights of the Canadian Independent
 2     Producers.
 3  11656                Without that, I do not think that you
 4     have diversity and that you will be able to tell
 5     Canadians their own stories.
 6  11657                MR. MACEROLA:  The final objective
 7     being if, let's say, there's a decision to allow the
 8     broadcasters to have direct access, the final objective
 9     must be to increase the quality of the Canadian
10     programming to increase the number of hours and to
11     increase accessibility.
12  11658                Is it the only way to do it or is it
13     the right way to do it?  I really don't know.  On the
14     other hand, we must take into account the fact that in
15     this country we have an independent production sector. 
16     This production sector is very important.  We must
17     protect it.
18  11659                COMMISSIONER PENNEFATHER:  Yes.  We
19     have had a number of comments from many parties to that
20     effect.  It is an important balancing act.
21  11660                The reason I am pursuing some of
22     these points is just to help in getting a better
23     understanding of where this is leading because we are
24     in this process now, which is a very extensive one. 
25     You have made several recommendations regarding


 1     financial participation by broadcasters.
 2  11661                The Equity Investment Program very
 3     clearly says another component of this financing story
 4     is that an applicant is ineligible for assistance from
 5     the EIP if the proposed production is to be distributed
 6     by a distribution company having an affiliation with a
 7     broadcasters.
 8  11662                This is another component and that's
 9     a rule set by Telefilm.  I was wondering if you could
10     comment on CTV's position and I quote:
11                            "We have no interest in taking
12                            away funds that are now reserved
13                            for producers.  However, it is
14                            time to allow Canadian
15                            broadcasters to be distribution
16                            partners in the productions they
17                            commission, just as broadcasters
18                            in Great Britain, Australia and
19                            the U.S. already are.  We cannot
20                            put in additional money unless
21                            we significantly improve our
22                            chances of recouping our
23                            investment." (as read)
24  11663                Do they have a point?
25  11664                M. MACEROLA:  Là-dessus, au niveau en


 1     fin de compte des radiodiffuseurs qui voudraient être
 2     distributeurs, en gros, là on ne parle plus de self-
 3     dealing, on parle de fair dealing.
 4  11665                C'est bien évident que les
 5     distributeurs qui sont spécialisés dans le domaine de
 6     la télévision, et surtout qui ont une composante ou une
 7     expérience importante au niveau international, sont
 8     rares dans ce pays, dans un premier temps.
 9  11666                Dans un deuxième temps, il faudrait
10     aussi prendre en considération la position du
11     producteur qui se retrouve face à son radiodiffuseur et
12     qui non seulement investit de l'équité dans son projet,
13     achète des droits de diffusion, mais en plus de ça
14     achète tous les droits de distribution à travers le
15     monde.
16  11667                Par conséquent, il faudrait
17     possiblement qu'il y ait un rapprochement entre les
18     producteurs et les radiodiffuseurs à ce sujet-là, et il
19     faudrait que ce rapprochement-là tienne compte d'un
20     concept de fair dealing avec naturellement des
21     méthodes, des procédures qui feraient que ça pourrait
22     être des contrats séparés, et caetera, et caetera, mais
23     au-delà de tout ça, d'avoir un bureau, ou un
24     ombudsperson, qui pourrait éventuellement, comment je
25     dirais bien, analyser les... pas les plaintes, mais les


 1     commentaires de certains producteurs qui pourraient se
 2     sentir lésés.
 3  11668                Par conséquent, au niveau de la
 4     distribution, c'est une politique de Téléfilm Canada,
 5     celle-là.  Celle-là, je suis prêt à la changer.  Je
 6     veux aussi écouter les gens qui vont être affectés par
 7     ce changement de politique là.  Elle a été mise en
 8     place éventuellement pour protéger, il y a une
 9     vingtaine d'années ou une quinzaine d'années, un
10     secteur de production indépendant qui était faible par
11     rapport au secteur de radiodiffusion.
12  11669                L'équité.  Il y a rien présentement
13     qui empêche un radiodiffuseur, malgré la rumeur et
14     malgré ce que j'ai entendu ici, d'acheter de l'équité
15     dans un projet.
16  11670                CONSEILLÈRE PENNEFATHER:  Oui, ça,
17     c'est important.
18  11671                M. MACEROLA:  À Téléfilm Canada on
19     mentionne toujours aux diffuseurs qui veulent acheter
20     de l'équité qu'ils sont les bienvenus.  Maintenant il
21     ne faut pas cependant que cet argent d'équité là vienne
22     remplacer l'argent des droits de licences. Il faut que
23     ce soit de l'argent neuf, du nouvel argent, et qui doit
24     être récupéré comme n'importe quel autre investisseur
25     va récupérer sa mise.


 1  11672                Toutes ces politiques là au niveau de
 2     l'équité, au niveau de la distribution et au niveau
 3     naturellement de l'accès doivent être, quant à moi,
 4     revues, repensées, toujours en fonction des grands
 5     ensembles qui ont été maintenant mis sur pied et qui
 6     remplacent la petite maison de production et le petit
 7     radiodiffuseur, mais en gardant en tête qu'il faut
 8     absolument protéger dans ce pays un secteur de
 9     production indépendant fort.
10  11673                CONSEILLÈRE PENNEFATHER:  Vous avez
11     mentionné que maintenant en effet un télédiffuseur peut
12     investir.  Est-ce qu'il y a des limites dans le régime
13     courant à cet investissement?
14  11674                M. MACEROLA:  La seule limite qu'on
15     impose est qu'on veut que le copyright appartienne au
16     producteur.
17  11675                La seule règle au niveau de l'équité
18     est que le copyright appartienne au producteur privé. 
19     Par conséquent, on limite l'investissement du
20     radiodiffuseur à moins de 50 pour cent, 49 pour cent.
21  11676                COMMISSIONER PENNEFATHER:  The other
22     day CINAR and Nelvana were here.  They did table with
23     us a formula.  I wondered if you were aware of this and
24     you had comment.  It is common perhaps in international
25     business as well that broadcasters can take an


 1     ownership position in a production equivalent to 50 per
 2     cent of the value of their investment over and above
 3     licence fees after full recoupment.
 4  11677                Is this a formula that you are
 5     familiar with?
 6  11678                M. MACEROLA:  J'ai entendu parler de
 7     la proposition de CINAR et Nelvana.  C'est une
 8     proposition qui est valable.  Il faudrait naturellement
 9     l'étudier.  Ils limitent éventuellement leur
10     récupération au niveau des profits à 50 pour cent. 
11     C'est valable.  C'est à regarder, mais chaque cas est
12     négocié et discuté individuellement, et on peut très
13     bien accepter une proposition CINAR/Nelvana et, dans un
14     autre dossier, accepter une autre forme de proposition.
15  11679                COMMISSIONER PENNEFATHER:  Those are
16     the individual negotiations.
17  11680                On the financing picture as well, the
18     licence fee program, you are of course aware of the
19     discussion we had yesterday with the Directors Guild
20     regarding their findings and concerns, that
21     broadcasters are claiming the top-up fee as their own
22     program expenditures.
23  11681                This is fine, but what they were also
24     tabling was the level of that top-up fee.  Do you care
25     to comment on the discussion and on this issue that was


 1     raised yesterday?  Do you have any further
 2     clarification?
 3  11682                M. MACEROLA:  Je ne suis pas très au
 4     courant de la discussion que vous avez eue là-dessus.
 5  11683                CONSEILLÈRE PENNEFATHER:  On peut
 6     peut-être revenir plus tard quand on discutera avec le
 7     groupe des fonds, mais je peux vous dire très, très,
 8     très brièvement.
 9  11684                On parle du fait que, en anglais, que
10     the CRTC require broadcasters to contribute to licence
11     fees amounting to 24.5 per cent of the program budget
12     for drama.  This licence top-up was then increased to
13     35 per cent.  Thus the top-up gave broadcasters a 43
14     per cent bonus, but this has changed.  Projects can now
15     qualify for support even when broadcasters contribute
16     licence fees for as little as 15 per cent of the
17     budget.
18  11685                You were not aware of this report?
19  11686                MR. MACEROLA:  No.
20  11687                COMMISSIONER PENNEFATHER:  Perhaps
21     you would care to comment on it later.
22  11688                M. MACEROLA:  Ou peut-être quand le
23     Fonds canadien de télévision va comparaître; il y aura
24     peut-être une question dans ce sens-là à leur adresser.
25  11689                CONSEILLÈRE PENNEFATHER:  Peut-être.


 1  11690                Two more points from me and then I
 2     will let my colleagues ask you questions. 
 3     Recommendation 15:
 4                            "Téléfilm recommande au Conseil
 5                            que la télévision canadienne
 6                            reflète adéquatement les besoins
 7                            de la minorité linguistique
 8                            officielle des autochtones."
 9  11691                Comment on devrait aller de l'avant
10     avec cette recommandation?  Quelles sont les précisions
11     que vous pouvez apporter à comment faire?
12  11692                M. MACEROLA:  C'est-à-dire que
13     présentement il existe un programme, qui est adminsitré
14     par le Fonds canadien de télévision, un programme de 2
15     millions de dollars pour la production d'émissions de
16     télévision en langue autochtone.  Naturellement, quand
17     vous rencontrez les communautés autochtones, ce
18     qu'elles vont vous dire est que le programme répond
19     très bien à leurs réalités culturelles, sauf cependant
20     que ça prendrait des fonds additionnels.
21  11693                D'un autre côté, au niveau de
22     l'administration de ce programme, que ce soit tant de
23     la composante droits de diffusion que de la composante
24     capital, participation au capital, on essaie d'avoir le
25     moindre de mesures restrictives possibles.  Par


 1     conséquent on accepte même, en lieu de droits de
 2     licence, des prestations de services.
 3  11694                Par conséquent, ce qu'on voulait tout
 4     simplement indiquer dans cette recommandation-là était
 5     que, oui, c'est important de représenter les minorités
 6     du pays, que ce soit des minorités autochtones ou des
 7     minorités francophones à l'extérieur du Québec ou
 8     anglophones au Québec.  C'est tout.  Et on voudrait
 9     qu'éventuellement ce ne soit pas nécessairement au
10     niveau des conditions de licences, mais c'est
11     certainement dans des déclarations d'intention.
12  11695                CONSEILLÈRE PENNEFATHER:  Il n'y a
13     pas une enveloppe, un pourcentage, 1 pour cent du fonds
14     EIP qui est destiné à la production?
15  11696                M. MACEROLA:  Autochtone?
16  11697                COMMISSIONER PENNEFATHER: 
17     Aboriginal --
18  11698                M. MACEROLA:  Oui, oui.  Il y a 1
19     million de dollars qui est destiné, du côté du
20     programme d'équité, et 1 million du côté aussi des
21     droits de diffusion.  Ça fait 2 millions en total.
22  11699                CONSEILLÈRE PENNEFATHER:  Ça
23     représente quelle proportion, quel pourcentage, du
24     fonds en sa totalité?
25  11700                M. MACEROLA:  Un pour cent... 2


 1     millions sur 200 millions, c'est 1 pour cent.
 2  11701                CONSEILLÈRE PENNEFATHER:  On a eu les
 3     représentants de TVNC ici.  Ils ont, à titre d'exemple,
 4     exprimé le voeu que ce pourcentage soit plus approprié
 5     au pourcentage de la population autochtone au pays, qui
 6     est à peu près 2,8 pour cent.
 7  11702                M. MACEROLA:  Mon collègue Garry Toth
 8     et moi avons rencontré naturellement les communautés
 9     autochtones. C'est bien évident qu'elles voudraient
10     avoir accès à plus de fonds mais, d'un autre côté, pour
11     l'instant la décision du conseil d'administration du
12     Fonds canadien de télévision était de conserver, à tout
13     le moins pour l'instant, le programme au niveau de 2
14     millions, parce qu'on commence à expérimenter
15     simplement avec eux et éventuellement, sur une période
16     de un an ou deux, on va être capables de réellement
17     définir quelle va être la demande.
18  11703                Tant Gary que moi, on a mentionné aux
19     communautés autochtones qu'à ce moment-là on
20     transporterait leur dossier auprès du conseil
21     d'administration.
22  11704                CONSEILLÈRE PENNEFATHER:  Alors vous
23     pensez que le système de télévision canadienne
24     conventionnelle devrait refléter la diversité de la
25     population canadienne?


 1  11705                M. MACEROLA:  Oui.
 2  11706                CONSEILLÈRE PENNEFATHER:  Une
 3     dernière question.  En parlant de l'univers télévision,
 4     on parle d'un environnement analogue aujourd'hui, mais
 5     est déjà commencé -- et ça vient très vite en termes de
 6     production et distribution et l'accès au produit --
 7     l'ère numérique.
 8  11707                Est-ce que vous avez des
 9     commentaires, des suggestions sur quelles seront les
10     priorités en termes de la production des programmes
11     canadiens et l'accès à ces programmes par les Canadiens
12     à l'avenir?Mr.
13  11708                M. MACEROLA:  Je pense que, dans un
14     premier temps, il va falloir déterminer si on va
15     réglementer le phénomène des nouvelles technologies,
16     dans un premier temps.  Dans un deuxième temps,
17     Téléfilm Canada été mandaté par le Gouvernement du
18     Canada pour administrer un programme multimédia de 30
19     millions de dollars.  J'espère que ce n'est que le
20     début, parce qu'il y a d'autres recommandations qui ont
21     été déposées au gouvernement, entre autres le Groupe
22     sur la télévision numérique, pour ajouter un 50
23     millions de dollars à ce fonds-là. b Éventuellement, on
24     va se retrouver avec une convergence des médias qui va
25     faire en sorte qu'on va possiblement faire du


 1     webcasting.
 2  11709                D'autre part, à Téléfilm Canada,
 3     notre objectif dans tout ce développement-là, c'est
 4     d'être capables d'offrir aux créateurs d'ici la
 5     possibilité de créer des contenus qui vont répondre aux
 6     médias et qui vont répondre aux attentes du public.
 7  11710                On est un investisseur, on n'est pas
 8     un producteur, et je pense qu'avec le programme
 9     multimédia on est en train de se fourbir les armes pour
10     éventuellement arriver avec des programmes qui vont
11     mieux répondre à la convergence des médias.
12  11711                CONSEILLÈRE PENNEFATHER:  Merci,
13     messieurs, mesdames.
14  11712                Merci, Madame la Présidente.
15  11713                LA PRÉSIDENTE:  Maître Blais.
16  11714                Me BLAIS:  J'ai deux questions.  La
17     première est une question de clarification.
18  11715                Monsieur Marcerola, vous avez parlé
19     du fait, quand on parlait d'investissements en capital
20     par les radiodiffuseurs, que vous exigiez que 50 pour
21     cent du droit d'auteur soit détenu par les producteurs
22     indépendants.  Est-ce que c'est une obligation qui
23     découle de votre loi constitutive ou est-ce que c'est
24     une politique interne?
25  11716                M. MACEROLA:  Ça découle de la loi


 1     constitutive.
 2  11717                Me BLAIS:  Et vous interprétez
 3     l'obligation dans votre loi que le film doit être
 4     détenu par des Canadiens que ça suffit si 50 pour cent
 5     est détenu par des Canadiens, du droit d'auteur.
 6  11718                M. MACEROLA:  C'est ça, 50 et...
 7  11719                Me BLAIS:  Et un petit peu plus,
 8     c'est ça.  Une majorité claire.
 9  11720                M. MACEROLA:  C'est ça, une majorité,
10     oui.
11  11721                M. LaPIERRE:  Cinquante plus un.
12  11722                Me BLAIS:  Pardon?
13  11723                M. LaPIERRE:  Cinquante plus un.
14  11724                Me BLAIS:  D'accord.
15  11725                M. MACEROLA:  Moi, je ne
16     m'embarquerais pas là-dedans.
17  11726                Me BLAIS:  Ma deuxième question porte
18     sur les traités de coproduction, parce qu'évidemment
19     vous avez un rôle important dans ce domaine.
20  11727                L'APFTQ a proposé, en matière de
21     crédits dans les règlements du Conseil, qu'une
22     coproduction majoritairement canadienne reçoive un
23     crédit de 150 pour cent.  Je voulais savoir si, de
24     votre point de vue, ce genre de règlement serait
25     conforme à nos obligations, les obligations du Canada


 1     c'est-à-dire, en vertu des traités et, deuxièmement,
 2     est-ce que ce serait conforme à l'esprit des traités de
 3     coproduction dans le sens du retour d'ascenseur entre
 4     les majoritaires et les minoritaires?
 5  11728                M. MACEROLA:  Une coproduction
 6     majoritairement... indépendamment du seuil, que ce soit
 7     une coproduction à 20 pour cent si elle est
 8     quadrapartite ou tripartite ou quoi que ce soit?
 9  11729                Me BLAIS:  Ils ont parlé seulement de
10     coproduction majoritaire.  Je pense qu'ils prenaient
11     l'hypothèse probablement bipartite seulement et non si
12     on avait une coproduction qui était 60/40, admettons,
13     qu'on traiterait celle-là... on lui accorderait un 150
14     pour cent de crédit.
15  11730                M. MACEROLA:  J'aimerais vous revenir
16     par écrit sur ce point-là parce que, dans un premier
17     temps, j'aimerais être capable de vérifier avec mon
18     équipe les effets que ça pourrait avoir, dans un
19     premier temps, combien il y a de coproductions
20     majoritaires au pays et, d'autre part, est-ce qu'on
21     peut se permettre de se donner des avantages, comme
22     Canadiens, sans qu'il y ait contrepartie de l'autre
23     côté?  Ça, encore une fois, c'est quelque chose que
24     j'aimerais vérifier et, dès la semaine prochaine, je
25     vous ferai parvenir le point de vue de Téléfilm Canada


 1     là-dessus.
 2  11731                Me BLAIS:  Excellent.  Vous avez très
 3     bien saisi le but de ma question, et on attend de vous
 4     lire sous peu.
 5  11732                Merci.
 6  11733                M. MACEROLA:  Merci.
 7  11734                Me BLAIS:  Ce sont mes questions.
 8  11735                LA PRÉSIDENTE:  Merci, mesdames,
 9     messieurs, et bon retour dans la région dont vous
10     venez.
11                                                        1455
12  11736                MR. LaPIERRE:  We wish you well,
13     Madam, through this jungle of words.
14  11737                THE CHAIRPERSON:  You will pray for
15     us, Mr. LaPierre.
16  11738                MR. LaPIERRE:  I do everyday, Madam.
17  11739                THE CHAIRPERSON:  You don't need a
18     mike for that.  Mr. Macerola can join in.
19  11740                Nous allons prendre une pause pour 15
20     minutes maintenant.  We will have a break for 15
21     minutes and be back at quarter after.
22     --- Short recess at / Courte suspension à 1501
23     --- Upon resuming at / Reprise à 1521
24  11741                LA PRÉSIDENTE:  Madame la Secrétaire,
25     would you call the next participant, please?


 1  11742                MS BÉNARD:  Thank you, Madam Chair.
 2  11743                The next presentation will be by the
 3     Writers Guild of Canada and I would invite Ms Parker to
 4     introduce her colleagues.
 6  11744                Mme PARKER:  Bonjour.  Thank you for
 7     the opportunity to appear before the Commission.  My
 8     name is Maureen Parker.  I am the Executive Director of
 9     the Writers Guild of Canada.  With me is Robert
10     Geoffrion, to my right, of Montreal, a screenwriter and
11     Treasurer of the Writers Guild.  To my left is Jim
12     McKee, our Director of Policy and Communications.
13  11745                THE CHAIRPERSON:  Good afternoon.
14  11746                MS PARKER:  We are here today to
15     speak on behalf of 1,400 screenwriters working in
16     English-language film and television production in
17     Canada.  The Writers Guild of Canada's primary purpose
18     is to promote and protect the economic and moral rights
19     of screenwriters.  Our writers are the creators, the
20     storytellers.
21  11747                By "creators", we mean that our
22     writers are the people who start with nothing but an
23     idea and a blank page.  It is Canadian writers who
24     create series like "Black Harbour", "Traders", "Cold
25     Squad" and "Due South", television movies like "The


 1     Boys of St. Vincent" and "Love and Hate".  Without
 2     writers there are no stories to tell, no programs to
 3     produce.
 4  11748                For this reason, we are focusing our
 5     presentation today on three key issues of direct
 6     concern to writers.  The first is investment and
 7     development, the critical stage when ideas are
 8     transformed into scripts which can be produced as
 9     programs.  Our second issue concerns ensuring that
10     Canadians have creative control over television series. 
11     Our final proposal addresses the point system used to
12     determine whether a program qualifies as Canadian.
13  11749                The current definition allows a
14     scripted program to qualify even if it isn't written by
15     a Canadian, but television is a writer's medium.  We
16     believe use of a Canadian writer should be a
17     fundamental requirement for a program to be recognized
18     as Canadian.
19  11750                A community of writers is at the
20     heart of any truly indigenous television production
21     industry.  If we are to have a broadcasting system that
22     provides Canadians with a diverse range of stories that
23     reflect our own experience and that address themes
24     unique to this country, such a community is essential. 
25     Over the past 19 years, the Canadian broadcasting


 1     industry has experienced tremendous growth, but as the
 2     system has grown, new problems have emerged.  In some
 3     ways, the system is now failing Canadian creators, the
 4     very people who create distinctively Canadian programs.
 5  11751                Development is the stage when new
 6     television series and television movies are created. 
 7     It is the least visible stage in the process leading to
 8     the production of new programs, yet the most important. 
 9     In recent years, while production has increased, the
10     resources committed to development across the industry
11     have decreased.
12  11752                The CBC, long a major investor in
13     development, has been forced to sharply cut back its
14     activities in this area in the wake of successive
15     rounds of budget cuts.  As Canada's major production
16     companies have grown, they have increasingly focused
17     their attention on export markets, particularly the
18     United States, in the process shifting the bulk of
19     their development effort to Los Angeles.  Federal and
20     provincial tax credits introduced to encourage film and
21     television production have focused on supporting
22     production excluding development.
23  11753                There is a further stress within the
24     system affecting writers.  The current 6-out-of-10
25     definition of a Canadian program employed by the


 1     Commission, has supported the phenomenon of the "made
 2     in L.A." Canadian series.  Often described as
 3     "industrial" production, these series are typically
 4     created and developed in the U.S.  They employ Canadian
 5     directors and technical crew to conform with the
 6     minimum Canadian creative requirements to access tax
 7     credits and qualify as a Canadian program under the
 8     CRTC's definition.  They do not employ Canadian
 9     writers.
10  11754                A few statistics will indicate the
11     effect this has had on the creators.  Los Angeles now
12     constitutes the second-largest membership base for the
13     Writers Guild of Canada.  From 1996 to 1997, the volume
14     of U.S.-based writers working on Canadian series more
15     than doubled.  One-third of the Writers Guild income is
16     now generated from writers resident in the United
17     States.
18  11755                There is a problem with the public
19     policy framework that leads to an expansion of programs
20     created and developed in Los Angeles and conceived
21     primarily for sale to the U.S. market.  In this export
22     model, Canadians are relegated essentially to assembly
23     work with the creative control residing outside of
24     Canada.
25  11756                I will pass this on to Robert


 1     Geoffrion.
 2  11757                MR. GEOFFRION:  Thank you.
 3  11758                I will address this Commission from
 4     my own point of view, that of a working writer in
 5     Canada, a working screenwriter.  This is about my
 6     experience, that of my colleagues and what I have seen
 7     of this industry in over 25 years.
 8  11759                In 1971, I graduated from Loyola
 9     College in Montreal with a post-BA diploma in
10     communication arts.  Being somewhat naive, I set out to
11     become a Canadian screenwriter.  I was told, "Go right
12     ahead, write screenplays.  One of them may even get
13     produced one day, but don't expect to be paid.  They
14     don't buy screenplays in Canada."  I disregarded the
15     comment.
16  11760                After working on industrial films at
17     Crawley Films in Ottawa and as a freelance
18     writer/director, I moved to L.A. in 1977, where I spent
19     three years writing screenplays I would then inflict on
20     people who didn't particularly want to read them.  I
21     returned to Canada in 1980 and something eerie
22     happened.  Although I had had nothing produced, I came
23     from L.A. and I wrote screenplays, so I became known as
24     an L.A. writer.  That sounded pretty good to me.
25  11761                Within a year and a half, I had my


 1     first movie on the big screen.  Since then I have added
 2     over 20 feature films and television movies in English
 3     and in French to my CV, films that were shot in Canada,
 4     the U.S., France, Germany, Argentina, Australia, even
 5     Abu Dhabi.  But as I here, I am feeling a very strange
 6     case of what Yogi Berra called déjà vu all over again. 
 7     As it was in 1971 when I graduated from Loyola, there
 8     is no money out there for screenwriters and as it was
 9     in 1980 when I returned to Montreal, people are damn
10     impressed if you come from L.A.
11  11762                Well, I'm no longer an L.A. writer. 
12     I don't bank in Beverly Hills or Santa Monica or, God
13     forbid, in Sherman Oaks or Encino, and I don't pay my
14     taxes to Uncle Sam.  I'm a Canadian writer who has
15     chosen to live and to work here.  There are great
16     writers in this country.  There would be even more if
17     we got some sort of support; not much, just a little. 
18     A little credit would be nice, too, but we don't want
19     to exaggerate.
20  11763                But it seems to me that Canadian
21     writers are the forgotten people of the Canadian
22     television and film industry.  We are made to feel as
23     if we live in the Twilight Zone.  Even in this day and
24     age, I'm still asked by otherwise intelligent people: 
25     What exactly does a screenwriter do?


 1  11764                Well, writers create the original
 2     story and its dramatic structure.  We organize it into
 3     scenes, we describe not only the setting, but the
 4     action.  We create the characters, we make them speak
 5     word for word for word, we tell you where they go and
 6     what they do, we tell you when they laugh and when they
 7     cry and when they live and when they die.  Sometimes we
 8     even write the camera angles.
 9  11765                In adapting literary work to the
10     screen, the process is slightly different, but the
11     result is the same.  We make that book or short story
12     shootable.  By the time we finish a screenplay, we have
13     seen the movie.  It's all there on the printed page. 
14     Let me add this.  Writers not only create the movie,
15     but we also create jobs for all the directors, actors
16     and technicians who come in when our work is done. 
17     Without us, there is no them.
18  11766                Writing movies is the best job in the
19     world.  Writers know something that few others know. 
20     That something is simple.  Without writers there is no
21     movie, there is no television series, there is only a
22     blank page and a blank screen.
23  11767                Thank you.
24  11768                MR. McKEE:  Clearly, many of the
25     trends we have outlined extend beyond the authority of


 1     the Commission.  However, the CRTC has the power to
 2     bring considerable leverage to bear in balancing the
 3     system.
 4  11769                First, the Writers Guild of Canada
 5     supports the "7 & 7 from 7 to 11 proposal" put forward
 6     by the Directors Guild of Canada.  Given the
 7     profitability of the private broadcasters, we believe
 8     the scheduling and expenditure commitments envisaged by
 9     this proposal are realistic and would provide Canadians
10     with a significant increase in domestic programs in the
11     under-represented categories, particularly drama.  But
12     additional shelf space for Canadian programs, in and of
13     itself, is not adequate.  We believe the broadcasting
14     system also has a responsibility to support the
15     development of Canadian programs.
16  11770                You simply can't have high-quality
17     Canadian programs without investing in development. 
18     Compared to the cost of production, investment in
19     development is relatively inexpensive, but it is
20     necessary to ensure that only the best stories are
21     produced and that they have been fully realized before
22     shooting begins.
23  11771                The Writers Guild of Canada proposes
24     that the CRTC institute a practice of setting out
25     specific development expectations for individual


 1     broadcasters within their conditions of licence at
 2     licence renewal time.  Such a step would increase the
 3     attention paid to this critical phase of the creative
 4     process and increase the resources committed across the
 5     system to the development of new programs.
 6  11772                Moreover, we urge the Commission to
 7     increase the emphasis it places on ensuring that
 8     creative control is genuinely in the hands of
 9     Canadians.  This means ensuring that programs are
10     created in Canada by Canadians and that series story
11     departments are based in Canada under the creative
12     leadership of Canadians.  This is no less important
13     than the requirement for Canadian producer control over
14     a program.
15  11773                Finally, the Writers Guild believes
16     the time has come to raise the bar in terms of the
17     definition of a Canadian program.  We propose that use
18     of a Canadian writer be made mandatory.  In parallel
19     with such action, we would propose that the current 6-
20     out-of-10 points minimum standard be raised to 8
21     points.
22                                                        1535
23  11774                The six-point benchmark was
24     established more than a decade ago, when the industry
25     was in its infancy, scarcely an industry at all.  The


 1     picture today is far different.  Across the industry,
 2     there is a sufficient depth of talent to sustain
 3     production at a higher standard.
 4  11775                For this reason, we have advocated
 5     adopting an eight-point standard as a new benchmark,
 6     and making both Canadian writers and directors
 7     mandatory.
 8  11776                We believe that implementing these
 9     measures will help ensure that Canadians have available
10     to them a wide diversity of indigenous programs to
11     choose from in addition to the great variety of
12     international programs carried on our broadcast system. 
13     It is also the key to ensuring that our successes on
14     the international market support the creation and
15     production of new, distinctly Canadian programs.
16  11777                That concludes our presentation.
17     Thank you.
18  11778                LA PRÉSIDENTE:  Merci, madame et
19     messieurs.
20  11779                Commissioner Wilson, please.
21  11780                COMMISSIONER WILSON:  Good afternoon. 
22     Thanks for being with us.
23  11781                What I would like to do is go through
24     your written submission; and maybe as we do that, we
25     will tie in some of the points that you have expanded


 1     on today during your presentation, and I can fill out
 2     what you said in June when you filed your comments.
 3  11782                You are focusing on three areas: 
 4     investment in development; the point system; and
 5     creative control.
 6  11783                You also talked about the importance
 7     of public funding and the role of the CBC when you
 8     filed your submission.
 9  11784                I wanted to note one thing, and that
10     is in your Conclusion on page 8, before you get into
11     your Appendix, where you talk about:
12                            "As Canada's broadcasting system
13                            continues to expand, and the era
14                            of digital television draws
15                            nearer, the CRTC's role grows
16                            more -- not less -- important."
17  11785                As you know, many have been
18     predicting our demise in recent days.  It is always
19     heartening to see that somebody things we are going to
20     be around for a bit.
21  11786                The first area is investment in
22     development.  In your submission, you talked about the
23     exhibition and expenditure requirements and your
24     support for the Directors Guild, seven and seven, from
25     7:00 to 11:00.


 1  11787                I am not going to ask you a lot of
 2     questions about that program itself, because we had the
 3     Directors Guild here yesterday and went through that
 4     with them.  I think the mechanics of it are fairly
 5     straightforward.
 6  11788                However, in terms of narrowing the
 7     definition of prime time to eliminate the
 8     marginalization of Canadian programming, you want to
 9     change it from 6:00 to 12:00 to 7:00 to 11:00.
10  11789                I don't know if you participated in
11     any discussions with the Directors Guild, but why 7:00
12     to 11:00 as opposed to 8:00 to 11:00 or 8:00 to 10:00?
13  11790                MS PARKER:  Because that is the
14     industry standard.  In fact, in our collective
15     agreement with the independent producers, the CFTPA and
16     the APFTQ, prime time is defined as 7:00 to 11:00. 
17     That is the industry standard.
18  11791                COMMISSIONER WILSON:  We have had a
19     number of parties who have suggested that we should
20     collapse it even further since the peak viewing takes
21     place starting around 8 o'clock.  So 8:00 to 11:00, in
22     terms of drawing viewers to the programs, is a better
23     time to have those programs scheduled.
24  11792                I was interested in your reason for
25     that.


 1  11793                The 7 percent of broadcast revenues
 2     to original programming in the under-represented
 3     categories:  When you talk about investment in
 4     development, are you talking about taking a portion of
 5     that 7 percent and allocating it specifically to
 6     development, when you say you would like to ensure that
 7     broadcasters contribute to development specifically --
 8     the development of Canadian programs, not just the
 9     production of them.
10  11794                Would that allocation to develop
11     constitute part of the 7 percent?
12  11795                MS PARKER:  Yes.
13  11796                COMMISSIONER WILSON:  So it is not an
14     additional, above and beyond --
15  11797                MS PARKER:  No.
16  11798                COMMISSIONER WILSON:  Did you have
17     anything in mind?
18  11799                MS PARKER:  No, we do not have a
19     specific figure in mind.
20  11800                MR. McKEE:  We think it should be
21     done on a case-by-case basis, based on each
22     broadcaster's situation.  So licence renewal time would
23     be an opportunity to make the specific discussion for
24     Broadcaster A, B, C, D and so on.
25  11801                MS PARKER:  And we would do that


 1     through a condition of licence.
 2  11802                COMMISSIONER WILSON:  You say on page
 3     5 that the 7 percent of broadcast revenues to original
 4     programming:
 5                            "...should represent a
 6                            broadcaster's direct
 7                            expenditure, excluding
 8                            contributions from such public
 9                            sources as the Canadian
10                            Television Fund..."
11  11803                And excluding promotion of Canadian
12     programs.
13  11804                We had quite an extensive
14     conversation with the Directors Guild about the licence
15     fee program top-up, so I will not pursue that with you.
16  11805                What about the half-hour
17     entertainment shows that broadcasters are talking about
18     in terms of building the Canadian star system?
19  11806                MS PARKER:  You mean the promotional
20     shows?
21  11807                COMMISSIONER WILSON:  Yes.
22  11808                MS PARKER:  We don't think that
23     should count as Canadian content or go toward that
24     figure that we are presenting.
25  11809                COMMISSIONER WILSON:  That should


 1     just be a cost of their doing business --
 2  11810                MS PARKER:  Promoting the program. 
 3     It is not an actual program.
 4  11811                COMMISSIONER WILSON:  What about your
 5     definition of "first run"?  What is your definition of
 6     "first run"?  There have been a number of different
 7     definitions presented to us.
 8  11812                MR. McKEE:  Basically, the definition
 9     that the Directors Guild is using is two runs, two
10     plays for a given program.
11  11813                COMMISSIONER WILSON:  And for a given
12     broadcaster?  I think the CFTPA has said that one
13     broadcaster could play it twice, and it would be first
14     run; and another broadcaster in a different area could
15     run it and that would count as first run there as well.
16  11814                MR. McKEE:  Yes.
17  11815                MS PARKER:  In terms of collective
18     bargaining, in the agreements that we have with the
19     producers, we generally do attribute the first two runs
20     as first runs.  Definitely when they switch to a
21     specialty network, et cetera, it starts again.  The
22     first two runs would then be considered first run.
23  11816                COMMISSIONER WILSON:  The addition of
24     three hours of children's programming, you suggested in
25     your submission that the Commission might conclude that


 1     all broadcasters should do some children's programming.
 2  11817                I want you to expand on that for me.
 3  11818                MR. McKEE:  I guess the latitude
 4     exists within almost any programming format to tailor a
 5     certain portion of that for a younger audience.  We
 6     were suggesting that the Commission might wish to
 7     consider that more broadly even in the context of the
 8     specialty channels.
 9  11819                COMMISSIONER WILSON:  What you are
10     suggesting is that every conventional broadcaster and
11     every specialty channel would do three hours a week of
12     children's programming?
13  11820                MR. McKEE:  Our core position was
14     that it should apply to the conventional broadcasters,
15     but its potential for application more broadly should
16     be examined as well.
17  11821                MS PARKER:  Especially with channels
18     that specialize in children's programming, such as YTV,
19     et cetera.
20  11822                COMMISSIONER WILSON:  I think they
21     already do well in excess of that.
22  11823                MS PARKER:  Yes, they do.  So they
23     don't have to worry about that.
24  11824                COMMISSIONER WILSON:  No.  I think
25     they meet that criteria.


 1  11825                Let me just look at my notes, here,
 2     because I am jumping around a little bit.
 3  11826                About the development funds, in your
 4     submission, at paragraph 13, you talk about the fact
 5     that:
 6                       "...the current criteria allow
 7                       Canadian programming to be created
 8                       outside the country by non-
 9                       Canadians."
10  11827                If we were, by condition of licence,
11     for example, to require a specific percentage of the
12     broadcast revenues to be devoted to development, would
13     that fix that problem?
14  11828                MS PARKER:  No, that would not, in
15     and of itself, fix that problem.  That problem needs to
16     be addressed through the point system and by
17     ascertaining where the creative development takes
18     place.
19  11829                For example, under the regulatory
20     system that we have set up, it is mandatory that a
21     producer be a Canadian.  It is not mandatory that a
22     writer be Canadian.  The writer or the director are
23     both worth two points, and are interchangeable in terms
24     of qualifying for six out of ten production.
25  11830                There is also a component known as


 1     the story department, made up of executive producers,
 2     executive story consultants, story editors, et cetera. 
 3     They really are the machine in a series.  They create
 4     the stories; they write the bibles; they assist with
 5     the budgeting; they hire the staff, et cetera.
 6  11831                It is critical that that component be
 7     Canadian.  And that is what has changed dramatically
 8     over the last several years.  Those story departments
 9     have moved down to the United States.  The hiring is
10     taking place in L.A.
11  11832                Those story departments are made up
12     -- it depends on the show.  But some of the series, for
13     example, are made up of entirely Americans in the story
14     departments.  Some are a mix of Canadian and American. 
15     They are the creative machine.  They determine the
16     direction that that series will take, the characters,
17     et cetera.
18  11833                So if these people are not Canadian,
19     there is no way we are telling a Canadian story.
20  11834                COMMISSIONER WILSON:  I guess your
21     suggestion on this is that we raise it to eight out of
22     ten points, so that the writer --
23  11835                MS PARKER:  Eight out of ten, making
24     the writer mandatory and looking seriously at
25     addressing the issue of where the story department


 1     resides and who has creative control over that story
 2     department.  Is it an American run story department or
 3     is it Canadian run?
 4  11836                MR. GEOFFRION:  There is a very
 5     simple reason why this is happening, and that is that
 6     the producers are really quite desperate to sell their
 7     programs to American networks basically and to do co-
 8     productions with American partners.  They are willing
 9     to go to any extent to cater to those people.
10  11837                At least the American networks and
11     American producers -- God bless them -- do realize that
12     the writer is the most important part of the television
13     process, to the point where they are made writer-
14     directors.  The reason that they wan these people in
15     L.A. is that they can have first hand on those scripts
16     at every stage of development.
17  11838                Once the script is finished, it is
18     shipped up to Canada and technicians go to work,
19     including directors.  They don't have to worry about it
20     any more, because the script is done; it is finished;
21     they know exactly what it is going to look like.  That
22     is why it is so important for them to keep those people
23     in L.A. or to get their L.A. people up here to control
24     story departments.
25  11839                We say it may be a Canadian


 1     production.  It is not a Canadian film.  It is not
 2     Canadian television.
 3  11840                It is produced in Canada.  But if the
 4     writers, or at least the majority of the writers in
 5     those story departments are not Canadians, I am sorry,
 6     it doesn't cut the cake.
 7  11841                What it is also doing is forcing
 8     Canadian writers who want to work in Canada to move
 9     down to the U.S. and to pay their tax dollars in the
10     U.S. so that these productions can now come back up as
11     Canadian productions.
12  11842                COMMISSIONER WILSON:  Are these
13     industrial programs, as you described them?  Or are you
14     saying that this happens on distinctively Canadian
15     programs as well?
16  11843                MR. McKEE:  We are talking about the
17     industrial programs.
18  11844                COMMISSIONER WILSON:  The industrial
19     programs.
20  11845                MR. McKEE:  The programs that are
21     geared for export.  And to be clear, we have nothing
22     against export programming.  In fact, we think some of
23     the big successes have been programs that are developed
24     here and sold around the world, such as "Emily of New
25     Moon", "Road to Avonlea".


 1  11846                We think that is a good model in
 2     terms of covering the cost of production and of telling
 3     the stories --
 4  11847                COMMISSIONER WILSON:  And is it
 5     happening on those two shows?
 6  11848                MR. McKEE:  Those stories are
 7     successful stories on the international market.
 8  11849                COMMISSIONER WILSON:  But were those
 9     written by --
10  11850                MR. McKEE:  Those programs are
11     Canadian through and through.
12  11851                COMMISSIONER WILSON:  Those are ten
13     out of ten.
14  11852                MR. McKEE:  Yes.  The problem that
15     has arisen is that the notion of export production has
16     really been kind of retrofitting of "made in L.A."
17     series that are reverse engineered to qualify as
18     Canadian.
19  11853                They are completely severed from the
20     Canadian creative community.
21  11854                COMMISSIONER WILSON:  What proportion
22     of the production that is taking place in Canada right
23     now is for export?
24  11855                MR. GEOFFRION:  It is all for export.
25  11856                MS PARKER:  This is a difficult


 1     question.
 2  11857                COMMISSIONER WILSON:  But it is much
 3     harder to export distinctively Canadian programming.
 4  11858                MR. McKEE:  Is it?
 5  11859                COMMISSIONER WILSON:  That is what we
 6     have been told; that it is more difficult to export.
 7  11860                MS PARKER:  "Love and Hate", an
 8     excellent film.  I am a viewer.  I watch Canadian
 9     television.  I would rather watch a "Love and Hate"
10     than a --
11  11861                COMMISSIONER WILSON:  But would the
12     Americans rather watch a "Love and Hate"?
13  11862                MR. GEOFFRION:  It was the number one
14     show --
15  11863                MS PARKER:  Well, it was the number
16     one rated show on NBC.  So I think so.
17  11864                If we produce quality television in
18     Canada, anyone will watch it.  We short-change
19     ourselves and undermine our own confidence constantly. 
20     If we make quality programming, which takes money, we
21     can sell it anywhere.
22  11865                Just to get back to your industrial
23     question, you were asking what percentage:  That is
24     really tough to ascertain.  True service production --
25     for example, we don't get copies of those contracts. 


 1     They don't come into the Guild, because they don't
 2     engage any of our writers.
 3  11866                So we have no idea in terms of
 4     expenditures, revenue, budget size, how much is out
 5     there.  It is a lot.  We know it is quite a bit because
 6     we exchange information with the Actor/Performers Guild
 7     and the DGC.
 8  11867                We do have examples of shows.  I will
 9     give you one example, because I think specifics prove
10     the point.
11  11868                We have a show right now, "Police
12     Academy", filming out in Vancouver, certified as
13     Canadian content.  The entire story department -- six
14     people in this story department -- are U.S. citizens.
15  11869                Out of the 26 episodes, 21 of those
16     episodes are written by Americans and five are written
17     by Canadians.  But that qualifies as a Canadian content
18     production.
19  11870                MR. GEOFFRION:  And it is a series
20     based on an American film.
21  11871                MS PARKER:  That is the type of
22     programming that we are talking about.
23  11872                We have those figures.  We have
24     several other shows like that as well.
25  11873                COMMISSIONER WILSON:  Could you leave


 1     those with us?
 2  11874                MS PARKER:  We would put them in on
 3     the 15th.
 4  11875                COMMISSIONER WILSON:  That would be
 5     great.
 6  11876                What I am trying to balance in my
 7     mind is that, on the one hand, there is the argument
 8     that industrial programming does create jobs for
 9     Canadians -- maybe not writers necessarily, but in
10     other positions.
11  11877                MR. GEOFFRION:  We are all in favour
12     of industrial productions.  Bring them up here.  Get
13     everyone working.  Everyone is pretty much working. 
14     The crews are working.  We have nothing against that. 
15     We think this is great.
16  11878                MS PARKER:  Canadian writers would
17     love to write industrial programming.  Why are we
18     pigeon-holed into writing about Anne of Green Gables,
19     or the snow, or an igloo?  Our writers are talented
20     enough certainly to put together a "Police Academy".
21  11879                It is just some supposition that only
22     Americans or writers hired out of L.A. are talented
23     enough to work on these shows.  It is also a function
24     of the deal that the producers are cutting with their
25     American partners; that the story department will


 1     remain in the U.S.; that they will have some form of
 2     creative control.
 3  11880                These are assurances that these
 4     producers are required to give to their American
 5     counterparts.
 6  11881                What I think we need to remember is
 7     that those Americans are producing up here because they
 8     need our tax credit.  They need that money.  They are
 9     up here for financial reasons.
10  11882                The Commission is in a perfect
11     position right now to change the rules, because this
12     production would still continue.  We have the writers. 
13     We have the talent in this industry.  We need the
14     Commission to make the change so that they are forced
15     to start to contract writers.
16  11883                When the system was changed and
17     producers were forced to contract directors to work on
18     Canadian programs, there was screaming and kicking, et
19     cetera.  But now the directors are working.
20  11884                COMMISSIONER WILSON:  The two
21     suggestions that you have made in concert with the 7:00
22     to 11:00 plan are allocating a portion of that to
23     development and adjusting the point system.
24  11885                You feel quite confident that that is
25     a good way to repatriate some of those jobs?


 1  11886                MR. McKEE:  Yes, we think it is a
 2     good start.  We think it is a realistic measure to go
 3     for.  And we think that by establishing specific
 4     development benchmarks for each of the broadcasters, it
 5     will at least serve as a bit of a counterweight to the
 6     other stuff coming out of the States.  So it would be a
 7     very positive move.
 8  11887                COMMISSIONER WILSON:  Those are all
 9     of the questions that I have for you.  Thank you.
10  11888                I don't know if any of my colleagues
11     have questions.
12  11889                THE CHAIRPERSON:  Commissioner
13     Cardozo, please.
14  11890                COMMISSIONER CARDOZO:  Thank you,
15     Madam Chair.
16  11891                Thank you for our presentation and
17     the discussion so far.
18  11892                First, a question following up on a
19     question that Commissioner Wilson asked you in terms of
20     promotion.  I hear your answer about not wanting
21     promotion to count.  But I am wondering whether you
22     would draw a distinction between a 30-second or a 60-
23     second promotion versus an "Entertainment Tonight" type
24     of program, which is a combination of snippets from
25     shows, interviews, pictures of people walking in and


 1     out of expensive homes, and whatever else you see on
 2     those types of shows.
 3                                                        1550
 4  11893                MR. McKEE:  I guess in terms of
 5     trying to increase the presence of under-represented
 6     programming across the system, we see that as a
 7     separate order.  It's the type of programming that you
 8     would undertake in large part to promote your own
 9     product.  We think there would be a business case to do
10     that.  We think this should focus really more on
11     programming that's purely within the definition of
12     under-represented.  We think other types of programming
13     could be focused on.
14  11894                COMMISSIONER CARDOZO:  I'm not clear
15     that in terms of an "Entertainment Tonight" program,
16     would you --
17  11895                MR. McKEE:  No.  We would not be
18     looking for that type of programming to be --
19  11896                COMMISSIONER CARDOZO:  Counted as
20     Canadian.
21  11897                MR. McKEE:  Yes, counted as Canadian.
22  11898                COMMISSIONER CARDOZO:  My other
23     question is in relation to I suppose who your members
24     are.  We had a couple of other people up last week.  I
25     was asking them about the relationship between writers. 


 1     I am thinking of fiction and non-fiction writers and
 2     the television industry, to what extent there is a
 3     connection.
 4  11899                Obviously your members, the screen
 5     writers, play a critical role in that because often the
 6     writers who write those books aren't screen writers or
 7     aren't trained to be screen writers.  We are talking
 8     about different skills often.
 9  11900                My question is whether you think
10     there is enough Canadian books, fiction or non-fiction,
11     that do end up on the TV screen or feature films.  My
12     understanding is that in Britain, the BBC does a lot of
13     that.  We don't seem to have any structured approach or
14     even an intended policy to do more of that, yet the
15     book producing industry has been enormously successful
16     in the last couple of decades with a lot of very
17     dynamic stuff coming out.
18  11901                MS PARKER:  Yes.  Now, I certainly
19     agree with you.  In that instance, everyone knows who
20     creates.  It is the writer.  In our business, our
21     writers are not afforded the same respect.
22  11902                COMMISSIONER CARDOZO:  Right.
23  11903                MS PARKER:  I will answer the first
24     part of your question, who we are.  Our guild, the
25     Writers Guild of Canada, represents professional screen


 1     writers.  We are a certified bargaining agent under the
 2     federal Status of the Artist legislation.
 3  11904                We do, of course, meet and discuss
 4     issues of common concerns with the other writers
 5     groups, but they do not work in our genre.
 6  11905                With respect to adapting their work
 7     to the screen, we think that's a great idea.  There is
 8     certainly no reason why it shouldn't go further and be
 9     put into motion.  There are a number of books that have
10     been put into -- made into productions.  For example,
11     we are all waiting for "Big Bear", Rudy Weeb's book,
12     which will be out shortly.  Guy Vanderhasey's book has
13     been optioned.  Linda Spensen's "Marine Life".
14  11906                The problem, and maybe it's just a
15     misconception in some ways, is that it takes a very
16     long time for a screen play to reach completion.  They
17     are not put together in a week or a month.  They often
18     take a year or two in development.
19  11907                It's difficult to raise financing. 
20     There is, as we were saying, no development money.  The
21     book, for example, may have been optioned three years
22     prior, but it takes a long time to get to the final
23     screen play.
24  11908                We do have a number of excellent
25     Canadian novels that are being adapted currently and we


 1     hope, of course, that that will continue.
 2  11909                MR. McKEE:  Just to add to that a
 3     bit.  One of the difficulties in terms of adapting
 4     books has been simply the difficulties that exist in
 5     Canada, both in terms of making feature films and in
 6     making television movies.
 7  11910                Over the past ten years television,
 8     in English Canada anyway, has almost by default become
 9     the avenue through which you could see mainstream
10     narrative films.  The CBC in particular was a major
11     producer and broadcaster of those films.  With the cuts
12     they have sustained, they have cut back their
13     production in that area.
14  11911                With the changing market, television
15     movies are among the most difficult types of
16     programming to get off the ground in Canada.  Rudy
17     Weeb's "Big Bear" took 19 years, so the life cycles can
18     be three, five and with no guarantee that at the end
19     anything will happen.
20  11912                Certainly with the level of
21     achievement of our novelists, there is a huge untapped
22     resource there in terms of material.
23  11913                COMMISSIONER CARDOZO:  Do you think
24     that producers, if they see a book that's doing well
25     and has a certain appeal to Canadians, do they see that


 1     as something that's worth turning into a movie or a
 2     show?
 3  11914                MS PARKER:  I think it depends on the
 4     producer, as Jim was saying.  Certainly with the loss
 5     of funding to our national broadcaster, that was a blow
 6     for that style of production.
 7  11915                There seems to be a revival of sorts. 
 8     Again, it depends entirely on the broadcaster, whether
 9     they want a sickness of the week movie or something
10     based, you know, on a fine piece of Canadian
11     literature.
12  11916                COMMISSIONER CARDOZO:  For
13     professional screen writers, do they prefer to write
14     from the blank page, which I think is the term you have
15     used in your written brief, or is there a lower status
16     if you were turn a novel into a movie?
17  11917                MR. GEOFFRION:  No, absolutely not. 
18     It depends, you know, if it's an original idea that you
19     have, you want to write it yourself, but if you are
20     offered an adaptation of a book, I mean, it's a
21     wonderful way to write also.  I have done a number of
22     them.
23  11918                COMMISSIONER CARDOZO:  There's a lot
24     of interpretation to do.
25  11919                MR. GEOFFRION:  Yes.  You have to


 1     rethink the book completely into movie form or a
 2     television series form.  The process is slightly
 3     different.  As I said, the result is the same.
 4  11920                You make that book shootable.  You
 5     give that book, your screen play, which goes to a
 6     Director and he can now shoot his movie because it's
 7     all there for him.
 8  11921                I have yet to see a Director being
 9     handed 120 pages of blank paper and saying "Go and see
10     a movie".  It has to come from somewhere.  It comes
11     from writers.
12  11922                COMMISSIONER CARDOZO:  Thanks very
13     much.
14  11923                Thanks, Madam Chair.
15  11924                THE CHAIRPERSON:  Thank you, Ms
16     Parker, Mr. McKee, Mr. Geoffrion.  It's nice to have
17     you with us.
18  11925                MS PARKER:  Thank you.
19  11926                MR. McKEE:  Thank you.
20  11927                THE CHAIRPERSON:  Madam Secretary?
21  11928                MS BÉNARD:  Thank you, Madam Chair.
22  11929                The next presentation will be by the
23     Canada Television and Cable Production Fund.  I would
24     invite Mr. Stursberg and his colleagues to please come
25     forward.


 2  11930                THE CHAIRPERSON:  Good afternoon, Mr.
 3     Stursberg, Mr. Macerola.  Mr. Macerola, don't forget
 4     your mike because you may be suspended this time.
 5  11931                Go ahead when you are ready.
 6  11932                MR. STURSBERG:  Good afternoon, Madam
 7     Chair, members of the Commission and staff.  Madame la
 8     Présidente, les membres diu Conseil et tout le
 9     personnel, bonjour.
10  11933                My name is Richard Stursberg and I am
11     the Chair of the Canadian Television Fund/Fonds
12     canadien de télévision.  With me today is Garry Toth
13     who is on my left here who is the Executive Director of
14     the Licence Fee Program of the Canadian Television
15     Fund, and on my right, I think everyone knows François
16     Macerola who is the Executive Director of Telefilm
17     Canada, which administers the Equity Investment Program
18     of the fund.
19  11934                Commissioners, as you are aware, the
20     Canada Television and Cable Production Fund has
21     recently undergone a facelift.  We have been renamed
22     the Canadian Television Fund/Fonds canadien de
23     télévision, representing one fund with two
24     complementary programs.
25  11935                In terms of the fund's importance,


 1     the CTF is the largest cultural organization outside of
 2     the CNBC.  The fund is governed by a Board of Directors
 3     representing both the private and public sectors,
 4     including the cable industry, film and television
 5     producers, public and private broadcasters,
 6     distributors, exporters and the federal government. 
 7     This private-public partnership as represented by the
 8     Board is a unique structure in Canada for a cultural
 9     organization.  There is in fact nothing else like it.
10  11936                Dû aux nombreux points de vue
11     échangés à notre conseil d'administration, nous avons
12     choisi de laisser à nos membres la tâche de soumettre
13     leurs propres propositions concernant les changements
14     qui pourraient être apportés à la réglementation du
15     CRTC.  Nous profiterons de cette occasion pour
16     expliquer le fonctionnement du FCT et pour élaborer sur
17     la participation du Fonds dans la réalisation des
18     objectifs à long terme établis par le Conseil.
19  11937                The fund was created by the
20     Government of Canada and the Canadian cable industry. 
21     It was launched by the Minister of Canadian Heritage in
22     September of 1996 with a federal influx of $100 million
23     and the amalgamation of the former Cable Production
24     Fund and the former Broadcast Program Development Fund
25     of Telefilm Canada.


 1  11938                The CTF is a private not-for-profit
 2     corporation operating via a contribution agreement with
 3     the Department of Canadian Heritage as well as
 4     receiving revenues from broadcast distribution
 5     undertakings, primarily from the cable television
 6     companies, by way of CRTC regulatory direction.  The
 7     contribution agreement determines with the Department
 8     of Canadian Heritage determines how the money is spent
 9     and as such, the government sets the framework and the
10     Board of the fund sets the policy.
11  11939                Le FCT comporte deux programmes
12     complémentaires de financement:  le Programme de droits
13     de diffusion, or the Licence Fee Program, which, as 
14     mentioned, is Mr. Toth, administré par les employés du
15     FCT, et le Programme de participation au capital --
16     c'est M. Macerola et Téléfilm Canada -- or the Equity
17     Investment Program, qui est administré, comme j'ai dit,
18     par Téléfilm Canada.
19  11940                L'appui financier du PDD profite à
20     une programmation de haute teneur culturelle
21     canadienne.  Ces suppléments aux droits de diffusion
22     sont accordés selon des critères d'admissibilité axés
23     sur le marché.  D'une manière complémentaire, le PPC
24     considère les productions appuyées en tant qu'un
25     investissement tout en cherchant à présenter la


 1     meilleure qualité pour chaque catégorie aux
 2     téléspectateurs et aux téléspectatrices de partout au
 3     pays.
 4  11941                The fund supports programming in the
 5     Commission's under-represented categories, including
 6     children's variety, drama and performing arts as well
 7     as documentaries, programming that is culturally and
 8     socially significant to Canadians, yet difficult to
 9     develop on a purely commercial basis.  The CTF is the
10     single most important financing source for Canadian
11     television.
12  11942                The fund continues to increase its
13     emphasis on distinctive Canadian programs, including
14     those reflecting a Canadian point of view and based on
15     Canadian themes, stories and events.
16  11943                We also believe it is important to
17     maintain or increase viewership opportunities for
18     programs produced with CTF financing and to enhance the
19     capacity of the Canadian broadcasting and production
20     sectors to produce and distribute Canadian television
21     programs across the country.
22  11944                In 1996/97, our combined budgets of
23     just under $200 million triggered production budgets of
24     $625 million, most of these, in fact the overwhelming
25     majority of these, achieved ten out of ten points on


 1     the CAVCO Canadian content point system.  These budgets
 2     were responsible for well over 2,000 hours of
 3     television, about double the volume from the previous
 4     year.  This production activity supported highly
 5     skilled, well paid jobs for nearly 20,000 Canadians.
 6  11945                Le tiers des fonds du FCT contribue
 7     au financement des projets de langue française tandis
 8     que les deux-tiers des fonds engagés annuellement sont
 9     consacrés à des projets dans la langue anglaise.  La
10     SRC/CBC peut recevoir jusqu'à 50 pour cent du budget du
11     Programme de droits de diffusion et a une enveloppe
12     fixe de 50 pour cent au Programme de participation au
13     capital.
14  11946                Comme j'ai déjà mentionné ou j'ai
15     déjà noté, le Fonds participe au financement
16     d'émissions dramatiques, de variétés, de documentaires,
17     d'arts de la scène et d'émissions pour enfants. 
18     Plusieurs de ces émissions ont été acclamées par la
19     critique et ont remporté de nombreux prix, tant au
20     Canada qu'à l'étranger, notamment les Gemini, les prix
21     Gémeaux, Emmys et bien d'autres.  Tous ces hommages
22     témoignent de la qualité et de la diversité des
23     émissions appuyées par le FCT.  Voici quelques exemples
24     d'émissions acclamées:  "Omertà:  La loi du silence",
25     "Sous le signe du lion", "Pin-Pon", "This Hour has 22


 1     Minutes", "Emily of New Moon", "Cold Squad" and
 2     "Traders".
 3  11947                The CTF budget comes from three
 4     sources:  a $100 million annual contribution from the
 5     Department of Canadian Heritage, an additional $50
 6     million from what was Telefilm's Broadcast Fund and the
 7     balance from an annual private sector contribution of
 8     $51 million, that's what it will be this year, the
 9     overwhelming majority of which comes from the Canadian
10     cable industry.
11  11948                As demand continues to increase for
12     CTF support, marketplace pressures are making
13     television ever more competitive and expensive.  In
14     addition to costly production values and promotion
15     budgets, globalization and rising audience expectations
16     will continue to challenge the production of
17     distinctive Canadian programming and the ability of the
18     fund to respond.
19  11949                Last April, the level of demand on
20     the CTF was unprecedented and overstressed a system
21     designed for smaller demand. This demand reflects the
22     vibrancy of our production industry and both dictates
23     and allows us to develop a framework for change within
24     the CTF.
25  11950                We can look forward to an increase in


 1     the distinctiveness test which we hadn't been able to
 2     do before.  The arbitrariness of the first-come,
 3     first-served provision can and will be removed.  We can
 4     move towards a more market-driven machinery in
 5     assessing projects.
 6  11951                The end result of last April was the
 7     commitment of the two programs to work towards change. 
 8     We now share the same vision.  Our simple new name and
 9     look reflects what's been going on behind the scenes. 
10     The Board of Directors has been working with both the
11     staff of the LFP and the EIP to streamline procedures
12     and make the two programs of the fund as complementary
13     as possible.  The level of co-operation between the two
14     programs has been exceptional.
15  11952                Harmonizing will ensure that the fund
16     and its two programs operate with common objectives,
17     guidelines and processes to ensure our activities are
18     clear, simple and effective for everyone.
19  11953                There will be only one set of
20     guidelines this year.  For the next round of
21     applications, there will no longer be a first-come,
22     first-served process for the LFP and the EIP with
23     respect to its investments will become more
24     transparent.
25  11954                In an effort to ensure that the fund


 1     continues to increase its emphasis on very distinctly
 2     Canadian programs, it will support only those projects
 3     which are based on a Canadian point of view and reflect
 4     Canadian themes, stories and events.  Streamlining the
 5     decision-making process is still being refined. 
 6     However, the EIP will remain recoupment driven while
 7     the LFP will become more market driven.
 8  11955                We are moving forward, but we aren't
 9     fully there yet.  We hope to have concluded discussions
10     with our Board in the near future and would be pleased
11     to present an outline of our new guidelines to the
12     Commission soon after that time.  In fact as soon as we
13     have concluded the discussions with the Board, we would
14     be delighted to come down and give you a briefing on
15     where we are.
16  11956                Together, these two programs of the
17     CTF are striving to strengthen Canadian content and
18     ensure that Canadians have the opportunity to see
19     themselves reflected on their television screens.
20  11957                D'abord, nous avons presque atteint
21     nos objectifs de 1998 et 1999:  accroître le volume
22     d'émissions distinctement canadiennes quant au nombre
23     d'heures et de projets; améliorer la qualité et le
24     caractère distinctif de la programmation canadienne et
25     accroître globalement l'auditoire des émissions


 1     canadiennes.  Deuxièmement, nous prenons des mesures
 2     afin de répondre à des demandes toujours plus
 3     nombreuses de la part de notre clientèle de base, qui
 4     ne cesse de s'accroître.  Troisièmement, nous avons les
 5     moyens de prévoir la croissance de nos revenus du
 6     secteur privé pour mieux planifier notre avenir.
 7  11958                Finally, the CTF operates primarily
 8     as a cultural initiative and as such, we have
 9     constantly raised the bar on the criteria that qualify
10     programs for funding.  At the same time, we will
11     continue to help Canadian producers and broadcasters
12     make programs that are competitive and potentially
13     profitable, not only domestically but in the export
14     market as well.
15  11959                Thank you very much for the
16     opportunity to appear.  We would be pleased to answer
17     any questions you may have.
18                                                        1615
19  11960                THE CHAIRPERSON:  Thank you, Mr.
20     Stursberg.
21  11961                Commissioner Pennefather?
22  11962                COMMISSIONER PENNEFATHER:  Thank you,
23     Madam Chair.
24  11963                Thank you for your presentation and
25     your submission.  I understand from what you have said


 1     this afternoon and in your submission that you are
 2     leaving comments on a number of issues to your
 3     individual members and that your intention was to
 4     present a factual review of the funds, but I hope that
 5     you will be able to help us with some of the points
 6     that you raised today and perhaps clarify some facts
 7     about the existing funds and hopefully talk to us a
 8     little more in-depth about where you are heading.
 9  11964                With that in mind, it was just
10     interesting to read how you are going forward in line
11     with saying greater harmonizing between the funds.  As
12     you go about making these policies, how do you bring
13     all the varying opinions and positions and sometimes
14     competing efforts of the various players together in
15     formulating your policy.  I am interested in the
16     process that you will be undertaking in the next little
17     while to assure that the policy that you develop and
18     the guidelines that you develop can really respond to
19     the forces that you have described today.
20  11965                MR. STURSBERG:  We have been working,
21     I think it's fair to say, over the last few months now
22     to achieve these changes in the Fund.  We have the good
23     fortune to have, as I mentioned earlier, on the board
24     extensive representation from all parts of the private
25     industry that are interested in this subject.  So, we


 1     have three board members who represent the producers,
 2     three members who represent the private broadcasters,
 3     another who represents the CBC, another who represents
 4     distributors.  So, we have a very good board from the
 5     point of view of ensuring that, as we move forward with
 6     these changes, we can achieve some consensus that will
 7     be broadly acceptable to the industry as a whole.
 8  11966                COMMISSIONER PENNEFATHER:  Indeed,
 9     the Fund is made up of, putting it very simply, dollars
10     from the taxpayers through the government and dollars
11     from the cable subscribers, so that the public is
12     involved.  How is the public at that table?
13  11967                MR. STURSBERG:  Well, the public is
14     at the table a number of ways.  There are three seats
15     that are seats for the government and beyond that, of
16     course -- I know this may sound a little odd, but there
17     are a number of other parties who actually have
18     absolutely no financial interest whatsoever in the
19     outcome, who, therefore, take the view that however the
20     Fund is going to be changed or managed should be done
21     purely in terms of what the public interest dictates.
22  11968                So, for example, there are three
23     people from the cable industry.  The cable industry
24     puts money into the Fund, but it does not take money
25     out.  So, you have a total of six people on the board


 1     who have absolutely no financial interest in the
 2     outcome and whose concern is simply to ensure that
 3     public money is sensibly and prudently spent.
 4  11969                COMMISSIONER PENNEFATHER:  Now, many
 5     parties have suggested that we make recommendations to
 6     your board in areas where we do not have direct
 7     involvement.  How will this process work?  How do you
 8     see that happening?
 9  11970                MR. STURSBERG:  I'm not sure what it
10     is you are referring to.
11  11971                COMMISSIONER PENNEFATHER:  Well,
12     there are some, for example, guidelines for the funds
13     where people have made recommendations in various
14     interventions regarding the application of those funds,
15     the envelopes, the level of funding, inviting us to
16     make recommendations to your board.
17  11972                MR. STURSBERG:  I think the way that
18     it would work is like this.  I think you were moving
19     towards a question like this with François earlier on. 
20     As I understand the relationship between the CRTC and
21     the Fund, it works like this.  In 1994 when the Cable
22     Fund was originally set up, the Commission agreed to
23     that and it created a set of rules as to how the money
24     would be disbursed through the Cable Fund.
25  11973                When the government rolled-in,


 1     essentially, the EIP program from Telefilm, plus the
 2     extra $100 million in 1996, the Board of Directors of
 3     the Fund wrote to the CRTC and said that they thought
 4     the appropriate thing to do would be to pass
 5     supervision of the Fund over to the government,
 6     particularly to the Department of Canadian Heritage, I
 7     think, on the sensible grounds that the overwhelming
 8     majority of the money was coming from the public purse.
 9  11974                So, the Commission then agreed that
10     that was the appropriate thing to do.  So,
11     responsibility now for the supervision of the
12     activities of the Fund is with the Department of
13     Canadian Heritage and not with the Commission.
14  11975                The way it works as a practical
15     matter is that the Department of Canadian Heritage
16     signs a contribution agreement between the Fund and
17     itself, which lays out its general views as to how the
18     money should be disbursed, and within that context the
19     board of the Fund makes the specific rules that go to
20     make up the guidelines of one variety or another as
21     they work their way through.
22  11976                So, as a practical matter I think
23     that if the Commission had recommendations that it
24     thought were important to make -- and I know there are
25     a lot of items that have come in front of you -- I


 1     think that's fine.  I think that's wholly reasonable
 2     and I think that would be very helpful.  I think that
 3     you should make the recommendations, I would say, both
 4     to the government and to the Fund and say, "This is
 5     what we have learned from our hearings", and we would
 6     value that.
 7  11977                COMMISSIONER PENNEFATHER:  One
 8     example which perhaps you can help me understand is our
 9     conversation yesterday with the Director's Guild
10     regarding the licence fee top-up.  My question is:  In
11     the current operations -- we will talk about future
12     changes in a moment -- are the current LFP guidelines
13     different from those articulated in 1993-93(h), as
14     discussed yesterday, regarding the amount of licence
15     fee top-up supplied by the Fund?  This was the
16     statement made on page 5 of the Directors Guild report
17     yesterday.
18  11978                I am just wondering, if they are
19     different, if you could help us understand the
20     rationale behind that, what has evolved and how it has
21     evolved.
22  11979                MR. STURSBERG:  Sure.  I think you
23     are probably referring to Decision 1994-10.  Is that
24     right, Decision 1994-10 of the Commission?
25  11980                COMMISSIONER PENNEFATHER:  Decision


 1     1993-93 and later, yes, I was going to also involve
 2     1994-10 regarding the top-up as part of expenditures,
 3     but what I am looking at and what was raised with us
 4     yesterday was 1993-93 and section (h), which describes
 5     the mechanism, which they claimed was a different
 6     operation.
 7  11981                MR. STURSBERG:  Certainly what I can
 8     say is this.  I don't have, I'm sorry, 1993-93 in front
 9     of me, I have 1994-10.  But, in any event, not to
10     overly complicate the matter, I think that what
11     happened is very simple.  When the Commission agreed
12     that the administration of the Fund and the supervision
13     of the Fund should move to the Department of Canadian
14     Heritage, in effect, the various rules and regulations
15     became somewhat dépassé.
16  11982                Now, if you would like to know, we --
17  11983                COMMISSIONER PENNEFATHER:  I'm sorry,
18     you said became dépassé?
19  11984                MR. STURSBERG:  Dépassé.  In other
20     words, that they were without force any more because
21     the supervision had passed from the Commission to the
22     Department of Canadian Heritage and then policy was
23     made through the machinery I described.
24  11985                We have established thresholds and we
25     are happy to go through the thresholds, if you would


 1     like, as to what the requirements are with respect to
 2     licence fees from the individual broadcasters and what
 3     the total magnitude of the top-ups are that are
 4     available currently in the Fund.  If you like, Garry
 5     will take you through that.
 6  11986                I would say that we are certainly
 7     conscious, however, of the fact that the question of
 8     the relative level of licence fees, which I think is
 9     probably what you are really trying to get to, the
10     relative level of licence fees is the subject of
11     considerable interest to many of the parties in this
12     proceeding.  We don't propose to take a position today
13     on what the appropriate level is, but I can certainly
14     tell you this much.  We have had extensive
15     conversations at the board over the course of the last
16     little while as to what the machinery should be for
17     establishing licence fees and the amount that people
18     would pay and, as well, how much and how large the top-
19     up should be.
20  11987                Now we are in the process, I think
21     it's fair to say, of finalizing these discussions.  We
22     hope to have these discussions finalized by sort of
23     mid/late October at the board and when we do that, when
24     that is concluded, as I was mentioning earlier, we
25     would be happy to come down and explain to you all of


 1     the associated machinery since I think it will end up
 2     having some interesting implications for your own
 3     deliberations on the issue of licence fees.
 4  11988                COMMISSIONER PENNEFATHER:  Well, I
 5     agree it is a very important issue and I would
 6     appreciate hearing why and how the licence fee top-up
 7     amounts have evolved the way they have.  I'm sure we
 8     will come back to the point you made regarding process
 9     and jurisdiction in terms of responsibility, but you
10     are right to go on.  It is a point that is raised on
11     many levels.
12  11989                One is -- and I think Telefilm raised
13     it as well -- that licence fees have gone down.  Two,
14     in terms of this particular program, is it the case
15     that the cash on the table is actually lower than
16     originally was intended in the CRTC direction and that,
17     in effect, which is what the Directors Guild are
18     saying, private broadcasters are claiming as
19     expenditures money that isn't theirs.  In fact the
20     licence top-up fee has become, through the bonus
21     system, larger than originally intended.  Perhaps you
22     could explain how that evolved.  Maybe there is a
23     reason for it.
24  11990                MR. STURSBERG:  I will ask Garry to
25     explain the history of how the thresholds got struck


 1     and then I would like to come back to the question of
 2     how the top-ups are treated for regulatory purposes, if
 3     you don't mind.
 4  11991                MR. TOTH:  Sure, I would be pleased
 5     to.
 6  11992                All the guidelines that have been set
 7     over the past years have been set through the mechanism
 8     that Richard has described, plus industry consultations
 9     per year.  What has evolved over the last years is a
10     series of thresholds that reflect the need to encourage
11     regional programming, regional licensing and/or licence
12     fees that, through consultation with the industry,
13     reflect the specific needs of genre.
14  11993                What I would ask Michaela, if it
15     would help, Commissioners, is that we walk you through
16     what the guidelines were as of this year and that may
17     -- walk through that matrix.
18  11994                COMMISSIONER PENNEFATHER:  Am I right
19     that it's this matrix that's in your guidelines?
20  11995                MR. TOTH:  Yes.
21  11996                COMMISSIONER PENNEFATHER:  Just so we
22     are clear, its says the LFP will provide to an eligible
23     applicant or an eligible program a contribution that is
24     equal to 10 per cent of the budget and this may be
25     supplemented by one or more bonuses, which is where we


 1     get up into higher fees.
 2  11997                MR. TOTH:  The distinctively
 3     Canadian, yes.
 4  11998                MR. STURSBERG:  Would you like us to
 5     walk you through that?  We are happy to do that, if you
 6     would like to.
 7  11999                COMMISSIONER PENNEFATHER:  Just to
 8     clarify very, very briefly, if you would, what the
 9     current licence fee top-up bonus is for drama.
10  12000                MS JOLY:  Certainly.
11  12001                MR. BLAIS:  Excuse me, could you
12     identify yourself for the stenographers?
13  12002                MS JOLY:  Bonjour, Michaela Joly.
14  12003                Yes, certainly.  First of all, the
15     licence fee threshold has been set depending upon
16     whether or not you are a Toronto/Montreal production or
17     whether or not you are a regional production and it has
18     also been set in terms of the genre of the programming,
19     whether or not you are drama or falling into the other
20     categories of documentary, variety, performing arts and
21     children's programming.  So, in that sense there is a
22     minimum required for the broadcaster to pay.
23  12004                Then we would provide the production
24     if it met the minimum threshold with a ten per cent
25     base contribution.  From then on, if the project were


 1     determined distinctively Canadian, we would add five
 2     per cent.  If the project were determined entirely a
 3     regional project, we would increase that by ten per
 4     cent.  Finally, if you are a French-language production
 5     for which there is no international or English-language
 6     pre-sale, we would give you five per cent.  All that
 7     adds up to somewhere of a minimum of about 20 per cent
 8     to a maximum of 40 per cent of your budget.
 9  12005                CONSEILLERE PENNEFATHER:  Merci.
10  12006                When the Directors Guild says, in
11     effect, that projects can now qualify for fees as
12     little as 15, which would be your regional, per cent,
13     it can now increase this to as much as 45 per cent?
14  12007                MS JOLY:  Actually, to 45.  For
15     example, if you are a drama that is distinctively
16     Canadian entirely based in the region in a French-
17     language production, you could achieve as much as 45
18     per cent of your budget.
19  12008                COMMISSIONER PENNEFATHER:  Thus, in
20     some cases, they go on to say, the bonus to
21     broadcasters from the policy can be as much as 200 per
22     cent of its actual licence fee to the producer.  Do you
23     agree?  Is that correct?
24  12009                MS JOLY:  I will ask you to respond.
25  12010                Could you ask that again, please?


 1  12011                COMMISSIONER PENNEFATHER:  Thus, in
 2     some cases, the bonus to broadcasters from the policy
 3     can be as much as 200 per cent of its actual licence
 4     fee to the producer.  Is that correct?
 5  12012                MS JOLY:  As the minimum, yes.  For
 6     example, in some projects a broadcaster may pay a
 7     minimum of 10 per cent and achieve up to 30 per cent. 
 8     So, it would be one-third -- it would be three times
 9     what they paid.
10  12013                COMMISSIONER PENNEFATHER:  I think
11     the significance of this -- and I am just stating this
12     so that you can provide an explanation or a
13     clarification -- the significance of this, which they
14     have tabled with us, is that the licence free program
15     funding will allow those broadcasters to reduce their
16     Canadian content expenditures by up to $24 million a
17     year while still complying with their licences.  Is
18     this, in effect, what the result is of the bonus system
19     as it works now?
20  12014                MR. STURSBERG:  You mean in terms of
21     the way the allocation of the licence fee top-up to the
22     estimate of the total expenditures made on programming
23     for your purposes?
24  12015                COMMISSIONER PENNEFATHER:  Correct.
25  12016                MR. STURSBERG:  Yes.  In fact what it


 1     will be do is precisely that, it will tend to invert
 2     it.  That's one of the reasons -- that's why I wanted
 3     to come back to this other point, because I know this
 4     has also been a subject of some discussion here.  There
 5     is a little bit of history to this, actually.  I took
 6     the trouble to read through the history.
 7  12017                A while back the Commission had
 8     written to the Fund and asked the Fund for its view as
 9     to whether the licence fee top-up money should
10     constitute part and parcel of the total expenditures on
11     programming for your purposes in terms of the rules you
12     made.  We wrote back and said sagaciously, "We have no
13     view on this matter and we are unlikely to come to a
14     view on this matter."  But I think that really the
15     issue of how you treat the top-up money is really to
16     you and I think you should treat it whatever way seems
17     most appropriate to you in terms of the changes that
18     you are going to make to the system.
19  12018                I thought, actually, one of the
20     observations, to be candid with you, that was made by
21     the man from YTV today was quite a sensible
22     observation.  He said, "Well, you know, in the old days
23     there was some confidence you would actually get the
24     licence fee money."  This was when, you know, the
25     supply of money matched the demand.  Now that's much


 1     more difficult to predict and, as I mentioned, we will
 2     be making some significant changes to the way in which
 3     the licence fee top-ups are allocated this year and
 4     that it might be easier for you to be able to have a
 5     common baseline against which to judge everybody,
 6     frankly, not to take into account.
 7  12019                Then what you would do is you would
 8     say, "Fine, if the licence fee top-up money doesn't
 9     constitute part and parcel of the measurement of their
10     total expenditures, then you just drop down whatever
11     the level of total expenditures are that you are
12     requiring from them to take account of the fact that
13     you are not going to have them adding in that.  So, in
14     some sense, you keep your regime whole and you avoid
15     the fluctuations and variations and the controversies
16     associated with this.  From our point of view, that's
17     fine.  It has no impact on us.
18  12020                COMMISSIONER PENNEFATHER:  Were you
19     going to add something else, Mr. Toth?
20  12021                MR. TOTH:  No.
21  12022                COMMISSIONER PENNEFATHER:  Thank you
22     for that.  We may have further questions on that point. 
23     I would just like to turn to a couple of other points
24     at this time and come back perhaps later to that.
25  12023                On a going-forward basis, as the term


 1     is, you have made a statement today about the demand
 2     increasing on the Fund, that:
 3                            "...marketplace pressures are
 4                            making television more
 5                            competitive and more expensive. 
 6                            In addition to costly production
 7                            values and promotion budgets -
 8                            globalization and rising
 9                            audience expectations will
10                            continue to challenge the
11                            production of distinctive
12                            Canadian programming - and the
13                            ability of the Fund to respond."
14  12024                That's a fairly serious comment in
15     terms of the future of the Fund and what you will be
16     looking for.
17  12025                What then is the connection between
18     that, if I may -- and again you may care to comment or
19     not because this is in evolution, I am sure, between
20     that and your definition of a Canadian program.  For
21     example, we have had several different comments on
22     that.  Norflicks, as an example, would define a
23     Canadian TV program, film or series as one made
24     primarily by Canadians, financed mainly by Canadians
25     for a Canadian audience by a company controlled by


 1     Canadians, which I am sure fits, but you have added the
 2     element of stories, themes and events which are
 3     Canadian; so, the subject matter.
 4  12026                So, in other words, a Canadian cannot
 5     make a film about an event that may have occurred in
 6     Europe or about a theatrical play not written by a
 7     Canadian.  I am just exaggerating to get the point
 8     across.  Then you also address the importance of the
 9     exportability of Canadian product in terms of the large
10     questions you raise.
11                                                        1635
12  12027                Is this the direction that you are
13     taking in terms of the distinctively Canadian product?
14  12028                MR. STURSBERG:  I think to help this
15     discussion along it is important to distinguish, if I
16     may, two kinds of Canadian products.
17  12029                There are the Canadian products; and,
18     as I understand the CRTC's rules, you have to hit a six
19     out of ten to be considered a Canadian product.  For
20     the Television Fund, the minimum rule is eight out of
21     ten; and, as I mentioned earlier, it is now pretty well
22     ten out of ten for everything we have financed in the
23     past.
24  12030                Nevertheless, there are these two
25     different regimes.


 1  12031                Where we are going with our regime --
 2  12032                We are going to create the threshold
 3     for even being considered to have access to the
 4     financing that it must be distinctively Canadian; which
 5     means that the project must be Canadian in the sense
 6     that you would have absolutely no doubt, were you to
 7     look at it, that it was made by and for Canadians.
 8  12033                So it is made from a Canadian point
 9     of view; it is about Canadian stories; it is about
10     Canadian themes; it is about Canadian ideas; et cetera. 
11     That is going to be the threshold just for you to get
12     into the program to be considered.
13  12034                The question you have to ask
14     yourselves, it seems to me, is a slightly different
15     question.  And we will deal with that.  We will spend
16     $200 million on that next year.
17  12035                Your question is:  Do you want your
18     rules to perfectly match ours?  Or do you want your
19     rules to stay where they are, at six out of ten?  Or do
20     you want them somewhere in between?  That is your
21     question.
22  12036                Obviously, as you move the rules
23     around, then the amount of financing available is
24     different.  For our very tough rules, there is $200
25     million of the kind of money that we have been talking


 1     about available.
 2  12037                There is a whole series of other
 3     kinds of money available too, that is really kind of
 4     indifferent with respect to those kinds of things.  For
 5     example, the tax credit arrangements in this country
 6     are indifferent.  So you would get the tax credits just
 7     by virtue of the fact that you are making the
 8     programming in Canada.  There is a whole bunch of other
 9     kinds of funds out there of one variety or another.
10  12038                Your ability to be able to presell
11     into other kinds of markets may vary, depending on how
12     distinctively Canadian it is.
13  12039                I only make the point that I think it
14     is important that we realize that there really are two
15     regimes and that that is going to be our regime.
16  12040                One of the questions, I take it, that
17     you will have to address is:  How do you want your
18     regime to vary, given the evidence that you have heard
19     here?
20  12041                COMMISSIONER PENNEFATHER:  Perhaps a
21     lot of balancing act has to occur.  But it is
22     informative to know why you choose the regime that you
23     choose, in light of the constat you yourself have
24     described.
25  12042                MR. STURSBERG:  We chose it for two


 1     or three very simple reasons.
 2  12043                One is that this fund is a cultural
 3     fund.  This fund is about making Canadian programs for
 4     Canadians in which they will recognize and see
 5     themselves, and it will speak to their concerns.
 6  12044                We have the great luxury now, as a
 7     result of the intense over-subscription of the fund,
 8     the intense demand for the money, to be able to raise
 9     the bar dramatically.  So we are going to raise the
10     bar.
11  12045                When you look at it, anything that is
12     made from the fund in future, you will have absolutely
13     no doubt that that is Canadian.  It could not be made
14     by anybody anywhere else.
15  12046                Our general view is that it is a
16     cultural fund.  It is intended for those purposes.  As
17     I was saying earlier, because of the level of demand on
18     the fund, we now actually have an opportunity to be
19     able to impose some very stringent requirements with
20     respect to Canadianness of the programming we support.
21  12047                COMMISSIONER PENNEFATHER:  With all
22     the proposals for expenditure and exhibition
23     requirements, is this also impacting in your thinking
24     in terms of why you have raised the bar?
25  12048                MR. STURSBERG:  I'm sorry; excuse me?


 1  12049                COMMISSIONER PENNEFATHER:  There have
 2     been various proposals for exhibition and/or
 3     expenditure, or both; the 10-10-10 formula and the 7-7-
 4     7; the emphasis on prime time; various credits applied
 5     to the truly Canadian program of 200 percent, and what
 6     have you.
 7  12050                MR. STURSBERG:  Right.
 8  12051                COMMISSIONER PENNEFATHER:  Do you see
 9     all of this having an impact on the fund and your
10     ability to support Canadian programming?
11  12052                MR. STURSBERG:  To be honest with
12     you, these various schemes that have been discussed
13     with you, whether you over-credit, 7-7-7, 10-10-10, et
14     cetera, we have not discussed any of those matters
15     among ourselves at the board as we have been putting
16     together these proposals.
17  12053                As I was saying earlier, we do not
18     propose to take any particular view on them.  I think
19     you have a lot of very gifted, animated and
20     enthusiastic people appearing before you who can argue
21     these questions very effectively.  But we have not
22     considered them in any of our deliberations so far.
23  12054                I don't have any doubt that when we
24     put out the new guidelines next year, the fund will be
25     once again heavily over-subscribed.  So I don't think


 1     we are going to have any difficulty hitting these quite
 2     hard Canadian tests.
 3  12055                One last thing I would say.  I
 4     believe it has been of some interest to the Commission,
 5     this whole question of how does one define
 6     distinctively Canadian, and so on.  We have made a lot
 7     of progress on that.  We are, by and large, concluded
 8     at the board level as to what the rules will be.
 9  12056                As I was saying earlier, we would be
10     happy, just as soon as we finalize a couple more bits
11     and pieces, to come by and take you through it in
12     detail, and explain all of our reasoning and how we got
13     to the various points and how all the machinery will
14     work next year.  It will be, I think it is fair to say,
15     quite different from what it was last year.
16  12057                M. MACEROLA:  Si je peux me
17     permettre... vous avez vu, j'ai réussi la première
18     fois.  Dans le fond, je ne voulais pas parler, c'était
19     juste pour tester si ...
20  12058                Si je peux me permettre...
21  12059                LA PRÉSIDENTE:  Une étoile d'or pour
22     vous, Monsieur Macerola.
23  12060                M. MACEROLA:  Merci, madame.  Je suis
24     très content.  Je vais revenir.
25  12061                Si je peux me permettre, à Téléfilm


 1     Canada... à titre d'exemple, Téléfilm Canada, avant le
 2     Fonds et Téléfilm Canada maintenant avec le Fonds, nos
 3     projets étaient, dans l'ensemble, neuf sur dix.  On
 4     avait quelques exceptions, qui variaient entre sept et
 5     huit.  Ayant fait partie des discussions, je pense que
 6     c'est important qu'on mette la barre le plus haut
 7     possible au niveau du contenu canadien, parce que c'est
 8     un fonds qui n'a pas de vocation industrielle ou
 9     commerciale, qui n'a qu'une vocation culturelle, et
10     qui, d'un autre côté, finance avec de l'argent public.
11  12062                Les gens qui veulent faire un autre
12     type de production peuvent facilement avoir accès à
13     d'autres sources de financement. Très souvent,
14     d'ailleurs, on n'a fait que réfléter la réalité, parce
15     que les gens qui déposaient des projets étaient 10 sur
16     10, et parfois 11 et 12 sur 10.  Par conséquent, on a
17     essayé de transcrire cette réalité-là dans des méthodes
18     et procédures.
19  12063                Je pense que c'est important qu'un
20     fonds comme celui-là, qui a une vocation culturelle au
21     niveau de la programmation, ait des exigences très
22     sévères, puisqu'on utilise l'argent des citoyens et des
23     citoyennes du pays pour financer cette programmation-
24     là.  Et je termine.
25  12064                COMMISSIONER PENNEFATHER:  You


 1     mentioned all the interesting, animated and intelligent
 2     people at our table during these hearings.  You can't
 3     blame me for not asking the intelligent and animated
 4     people here now some questions.
 5  12065                It is true that you also stated that
 6     you are the largest source of funding for programming
 7     in this country.  So as you develop your thoughts and
 8     guidelines, I think it is important that the entire
 9     partnership somehow fits together.
10  12066                That is part and parcel of wanting to
11     know from whence came not only the experience of all
12     these years, but from whence are coming your decisions.
13     At some point in time we will have to look at what the
14     CAB on the other side have said, which is that
15     viewership matters.
16  12067                With all this supply, with all this
17     money going into production, as highly qualified
18     Canadian as it can be, if it is not seen, what is going
19     to happen?  So what is your comment on the other side
20     of the equation?
21  12068                MR. STURSBERG:  We absolutely agree
22     that viewership matters a great deal.  There is
23     absolutely no point making programs that people do not
24     want to see.
25  12069                One of the issues that we are also


 1     working on is the question of building viewership
 2     measures into the decision-making process that we use
 3     at the fund for the allocation of money; whether on the
 4     equity side or on the licence fee top-up side.
 5  12070                We have had also very extensive
 6     discussions on this subject, as well as how to build it
 7     into the machinery of decision-making.  Again, I am
 8     sorry, I don't mean to be reticent or not forthcoming,
 9     but we have not concluded some of these things.
10  12071                As I say, as soon as we have
11     concluded them, we will be delighted to come down and
12     give you as long as you would like to go through all
13     these matters and show you what we did.
14  12072                You will appreciate that it is a
15     little tricky to say so much publicly about it right
16     now because the board has not --
17  12073                COMMISSIONER PENNEFATHER:  I
18     understand.  You made that very clear.  That is fair. 
19     I just felt the importance of opening certain doors --
20  12074                MR. STURSBERG:  Absolutely.  And as I
21     say, we are looking very hard at how to incorporate
22     viewership measures into the decision-making process
23     directly.
24  12075                COMMISSIONER PENNEFATHER:  In your
25     deliberations, you have a system of envelopes.  For


 1     example, we had a chance to discuss earlier allocations
 2     to the regions of this country, such as they may be
 3     defined in different ways; allocations to assure, if
 4     allocation is the method used, cultural diversity in
 5     the programming of this country and aboriginal
 6     programming.
 7  12076                I assume that is part of your ongoing
 8     discussions.  What is the process to ensure that there
 9     is input from these communities in these discussions?
10  12077                MR. STURSBERG:  Just a couple of
11     things.  As François mentioned in his own presentation,
12     he was explaining how the targets work within Telefilm
13     Canada.
14  12078                As Garry and Michaela were explaining
15     earlier, we had a regional bonusing system that we have
16     used extensively over the last couple of years on the
17     licence fee side.  So we are very conscious of the
18     issues associated with regional matters.
19  12079                Certainly one of the subjects that
20     has been central to our discussion is precisely to
21     ensure that we get effective regional distribution of
22     the money and effective reflection of the regions and
23     the programs that are made.
24  12080                We are absolutely discussing this
25     question once again.


 1  12081                And again -- and I am sorry to say it
 2     again -- we will be happy to take you through where we
 3     finally end up.
 4  12082                COMMISSIONER PENNEFATHER:  We are
 5     going to have a lot to talk about.  That is okay.
 6  12083                I am trying to stick to the things
 7     you raised ion the submission, in fairness.  You raised
 8     on page 19 this comment:
 9                            "Our planning process includes
10                            projections for increased
11                            revenue from cable and other
12                            licensed TV distributors (BDUs)
13                            over the next three years."
14  12084                That comment is predicated on your
15     other sentence above, which says:
16                            "While we depend on the
17                            government of Canada for the
18                            bulk of our revenue...the
19                            private sector contribution is
20                            crucial -- and growing."
21  12085                There is concern about the
22     continuation of the government side of the equation.
23  12086                Do you have any expectations in terms
24     of revenues from contributions from BDUs?
25  12087                MR. STURSBERG:  Yes.  We have done a


 1     number of sets of projections.  They are based on two
 2     types of growth.  One type of growth is that right now
 3     the cable industry serves about 75 percent of the total
 4     population with households; so there is 25 percent that
 5     does not have cable.
 6  12088                We think that the percentage of the
 7     population that receives their television via some form
 8     of BDU -- probably satellites -- will increase.  So
 9     there will be an increase.  And as the satellites
10     penetrate, they should do very well in those markets
11     that cable cannot get to.
12  12089                The second thing is that there has
13     been growth in the total revenues within the market;
14     for example, as tiers and new services are added,
15     obviously the revenues increase and therefore the
16     yields increase as well.
17  12090                We have done a number of projections
18     that look at potential yields over the years, depending
19     on what you assume the growth is going to be.
20  12091                I don't think that at any time in the
21     foreseeable future the private sector money will be
22     able to replace the public sector money, even if the
23     total amount of money is kept constant.  I cannot see
24     that happening.
25  12092                The public sector money will remain


 1     absolutely fundamental and essential to this fund for
 2     the foreseeable future.
 3  12093                COMMISSIONER PENNEFATHER:  That
 4     concludes my questions.  I have more, but I think I
 5     know the answer:  "We will get back to you."  Just
 6     kidding.
 7  12094                I wish you the best.  You have said
 8     in your paper today:
 9                            "We look toward an increase in
10                            the distinctiveness test, which
11                            we have not been able to do
12                            before.  The arbitrariness of
13                            first-come/first-served can and
14                            will be removed, and we can move
15                            toward a more market-driven
16                            machinery in assessing projects.
17  12095                What does "market driven" mean?
18  12096                MR. STURSBERG:  Market driven means
19     that the decision-making process will reflect the
20     priorities assigned by broadcasters and producers to
21     the making of programming.  We assume, and we hope,
22     that in the process it will reflect also what it is
23     that Canadians actually want to see on their screens.
24  12097                COMMISSIONER PENNEFATHER:  I think
25     this is the ground for a partnership between the market


 1     driven, the needs of the broadcaster-producer, and the
 2     objectives of the Broadcasting Act, wherein we are also
 3     fulfilling public objectives.
 4  12098                Thank you very much, gentlemen and
 5     ladies.
 6  12099                Thank you, Madam Chair.
 7  12100                THE CHAIRPERSON:  Before we go any
 8     further -- I know my colleagues have questions -- let
 9     me see what you think of this.
10  12101                The so-called problem raised by the
11     Directors Guild comes from, in part, not from decisions
12     of the Commission, but Public Notices -- which is the
13     reason that I make that distinction; they can be
14     changed.
15  12102                You use the word dépassé because the
16     fund is now in other hands and administered
17     differently.  I see the problem as they are not
18     dépassé; they are still on the books.
19  12103                There may be some difficulty, to the
20     extent that the Commission regulates spending by
21     broadcasters, if there is not a better match-up between
22     these Notices so that they do become dépassé and
23     changed by others, which somehow are more in concert
24     with what is happening at the fund.
25  12104                So far so good?


 1  12105                MR. STURSBERG:  I totally agree with
 2     that.
 3  12106                THE CHAIRPERSON:  So it is not a big
 4     mystery.  They were made to match what the Commission
 5     did when it decided how the fund was allocated.
 6  12107                Of course, if I have a problem here,
 7     counsel will fix it, if I misunderstand.
 8  12108                It is just a problem of timing.  The
 9     way I understand it, that has not quite shown up in any
10     event yet, because of the way it would be accounted
11     for.
12  12109                Where I have more of a question, as I
13     hear you, is that it does not seem to me as simple as
14     saying:  "Well, we will decide what the rules are now
15     and we will and brief you on them."  So then we adjust
16     our Public Notices so that our goals, if we continue
17     requiring spending requirements, match or work with
18     yours to achieve aims that are similar.
19  12110                I think that both you and the
20     Commission, if we have similar goals, will have to make
21     an effort to coordinate.  Otherwise, we will have the
22     Commission correcting its Public Notices so that it
23     works better for accounting, if we still have spending
24     requirements; and then if it does not work for you
25     because you are dispensing funds, and somehow or other


 1     the formula is not working and the broadcasters make a
 2     big pitch to you that it should be changed so that it
 3     works better at the Commission, then you will change
 4     them and we will keep adjusting.
 5  12111                I don't think it is as simple as you
 6     make it.
 7  12112                You just don't then trot over to the
 8     Commission's boardroom and say:  "Here are the rules. 
 9     We will explain exactly how they work."  And then the
10     Commission writes back and says:  "Well, this is a
11     problem for us."  Or we say nothing and just change our
12     rules.
13  12113                It doesn't seem to work all that
14     well.  This is a very off the top comment at the
15     moment.  But it does seem to me a bit intriguing that
16     the fund would sit there and say:  "Oh, well, we will
17     make our rules and then we will tell them what they
18     are."
19  12114                I don't know if that is the best way
20     to approach it.  But we will certainly have to think
21     about it and discuss it.
22  12115                MR. STURSBERG:  I completely agree
23     with you.
24  12116                THE CHAIRPERSON:  It is not that big
25     a mystery.  It is simply that we administer the fund. 


 1     We have Public Notices.  They are not decisions in the
 2     technical sense, but they say:  "When we look at
 3     whether you met your conditions of licence, this is how
 4     we are going to look at it."
 5  12117                And lo and behold, two years later,
 6     somebody else is administering the fund, and you get
 7     the Directors Guild who says:  "Oh, well, if you take
 8     what you said you would do with what is actually
 9     happening out there, the broadcasters are going to get
10     a free ride."  That is what is put before us.
11  12118                Is that pretty fair?
12  12119                MR. STURSBERG:  There are so many
13     moving parts in this that -- you have four or five
14     different moving parts.
15  12120                THE CHAIRPERSON:  You can coordinate
16     them when --
17                                                        1650
18  12121                MR. STURSBERG:  What definitions are
19     you going to use for Canadian qualifications, you know,
20     how much money is going to have to come in by way of
21     quantity of revenues on programming services if you
22     insist on those kinds of rules, where are the
23     thresholds going to be hit, all those kinds of
24     questions.
25  12122                Absolutely, and as I was saying


 1     earlier, it may be that we are going to have one scheme
 2     that is more -- I don't know whether it is going to be
 3     more or less -- distinctively Canadian than yours.  You
 4     may have a scheme that is identical to ours, different
 5     from ours, et cetera, but whatever we do, we absolutely
 6     have to make sure.
 7  12123                I mean the interests of everybody,
 8     not just the fund and the Commission, but even more
 9     importantly, the broadcasters and the producers, that
10     we make sure that we get these things locked up
11     together in a way that --
12  12124                THE CHAIRPERSON:  To the extent that
13     our goals remain the same.
14  12125                MR. STURSBERG:  Absolutely.
15  12126                THE CHAIRPERSON:  In fact, they may
16     vary because it's public money, because there's been
17     demand for it.  You may have some different
18     requirements.  Expenditures could remain necessarily in
19     areas that are not of that superCanadian, but it's
20     still in the public interest.
21  12127                MR. STURSBERG:  Yes.
22  12128                THE CHAIRPERSON:  All of that can be
23     managed.  The difficulty, of course, is that this
24     process of fixing it not in lock-step is complicated by
25     the fact that the way I understand it, the accounting


 1     and therefore the reporting to the Commission may be
 2     long after broadcasters have made their plans and their
 3     business decisions.
 4  12129                For them as well it's necessary to
 5     look a little ahead rather than behind, saying well
 6     this is dépassé or if you don't fix this, it will
 7     create this problem.
 8  12130                Two of my colleagues have questions
 9     and then counsel has a question and may fix anything I
10     have disconnected.
11  12131                MR. STURSBERG:  Can I just make one
12     last comment?
13  12132                THE CHAIRPERSON:  Yes.
14  12133                MR. STURSBERG:  One other thing that
15     might be helpful too is that, you know, we would
16     certainly -- we are quite good at doing quite a lot of
17     modelling of what the impact of different kinds of
18     shifts in rules and percentages in this and that is
19     because we have a relatively big database of projects
20     that have been funded, both through the equity program
21     and the licence fee program.
22  12134                As the Commission works its way
23     through some of these issues, we would be delighted to
24     put that kind of capacity at your disposal so if you
25     want us to do that.  It would give a feel to you as to


 1     what the impact would be.
 2  12135                THE CHAIRPERSON:  It would be very
 3     helpful and it doesn't change each body's jurisdiction
 4     to decide this is the way we are doing it --
 5  12136                MR. STURSBERG:  Absolutely.
 6  12137                THE CHAIRPERSON:  -- and fix your
 7     public notice.
 8  12138                MR. STURSBERG:  We can at least start
 9     to operate more from building a common fact basis.
10  12139                THE CHAIRPERSON:  Commissioner
11     Cardozo.
12  12140                COMMISSIONER CARDOZO:  Thanks, Madam
13     Chair.
14  12141                A couple of questions, Mr. Stursberg
15     and others.  I know you are not ready to discuss this
16     in too much detail, but just so I understand it a bit
17     better.
18  12142                When you talk about moving away from
19     the first-come, first-served basis, I would assume that
20     you are looking at something where you have guidelines
21     ahead of time, a deadline, and then some kind of a
22     valuation, priorization, then the results are
23     announced, something on that basis.
24  12143                MR. STURSBERG:  Yes.  In fact, we did
25     a very small tranche in September.  For the September


 1     tranche we killed the first-come, first-served, so it's
 2     already dead.
 3  12144                COMMISSIONER CARDOZO:  It didn't make
 4     the media, so it must be --
 5  12145                MR. STURSBERG:  No, we are trying to
 6     keep a slightly lower profile these days.  We had
 7     enough media attention to last us a while in April.
 8  12146                That's exactly right.  What we are
 9     going to try to do this year, if it's not first-come,
10     first-served for the licence fee side, what's the rule? 
11     We are just finalizing the decision-making on the rule.
12  12147                Then what we hope to have is
13     literally a set of objectives as between the two funds,
14     all these threshold tests with respect to
15     distinctiveness that will be identical, a set of
16     guidelines that will be identical.  What's a Canadian
17     company?  What does it mean to be fully financed?  All
18     these various issues that need to be addressed.
19  12148                Then we are going to have a unified
20     set of applications so if you are coming in for equity,
21     you would fill out the same form.  If you are coming in
22     for licence fee top-up, if you are coming in for both,
23     we would be able to make it very easy for producers as
24     they are coming in, so we won't have duplicate
25     administration and double paperwork and what not.


 1  12149                We have been working, as I say, very
 2     hard to make sure that the two organizations are now
 3     much more closely coordinated.  I must say I think that
 4     both François and Garry have done really an astonishing
 5     job pulling together two organizations which have
 6     really very different histories and quite different
 7     ways of operating in the past.
 8  12150                We hope to do all that and get the
 9     guidelines out in November so that we can have an
10     opportunity to explain them in detail to everybody and
11     get them finalized so people can get out and get
12     working in December.
13  12151                To the extent that we can, we are
14     going to try to be more forthcoming rather than less in
15     terms of once we have finalized some of the general
16     principles and what not.  We will get those out even in
17     advance of the guidelines.
18  12152                COMMISSIONER CARDOZO:  Is it likely
19     that if an applicant makes the cut with one fund, they
20     will make it with the other?
21  12153                MR. STURSBERG:  It can.  In some
22     cases they only ask for money for one side and not for
23     the other.
24  12154                COMMISSIONER CARDOZO:  But if you are
25     asking for both, likely they can access both.


 1  12155                MR. STURSBERG:  One of the key things
 2     is precisely we will be able to make sure that they are
 3     linked up.  Part of the problem we had in April was we
 4     didn't have them tightly enough coordinated.
 5  12156                Exactly what we have been talking
 6     about is how do we guarantee that when people are
 7     coming through and they require financing from both
 8     sides that that can work properly and, simultaneously,
 9     that it doesn't have to be going on purely in series so
10     that we save time by having it more effectively managed
11     together.
12  12157                COMMISSIONER CARDOZO:  Okay.  The
13     other issue I wanted to talk about briefly is the issue
14     of diversity that Commissioner Pennefather has asked
15     you about and asked Telefilm about as well.  Her
16     question to Telefilm was should television reflect
17     diversity and the answer was yes.
18  12158                I just want to mention what we are
19     looking at and perhaps you may or may not be able to
20     add any more to your earlier answer.
21  12159                We are not necessarily in this
22     proceeding looking so much at programming in different
23     languages because that will be the issue of a
24     proceeding further down the road and we will be calling
25     I think it broadcasting policy, although that may be an


 1     issue for your funds.
 2  12160                We are looking here primarily at
 3     English and French programming that reflects the
 4     cultural and racial diversity.  When you talk about
 5     emphasis on distinctive Canadian programming, including
 6     those reflecting a Canadian point of view and based on
 7     Canadian scenes, stories and events, that's the sort of
 8     thing that fits very much in there.
 9  12161                To give you an example, we had
10     discussions with people from Epitome who talked about
11     how "Degrassi" reflected diversity.  Paul Moss today
12     talked about his children's programming.  He makes sure
13     that the kids and the actors reflect diversity.
14  12162                Then you have got stories that are
15     sometimes produced by minority producers, like "Inside
16     Stories" that was run by CBC or "Scattering of Seeds"
17     that's running currently on History which might have a
18     particular minority perspective that is not getting
19     explored elsewhere, but is still running in our
20     mainstream broadcasters.
21  12163                I guess the question is it comes back
22     to the adage that CAB talked about the first day, if
23     you don't count it, it won't happen.  If you don't
24     count it, you don't see it or it doesn't happen.
25  12164                I sort of wonder whether that's true


 1     when we look at diversity.  CAB's answer was it will
 2     happen naturally.  Others such as Paul Moss have said
 3     they look at it and then think about it and make it
 4     happen.
 5  12165                I'm just wondering whether you are
 6     looking at those sorts of issues, both producers, but
 7     otherwise whether there is a way to provide an
 8     incentive to productions that reflect diversity just as
 9     you do to reflect regional diversity.
10  12166                I say that because one of the things,
11     the unfortunate possibilities, the systemic thing is
12     that when you provide an extra incentive for regional
13     diversity, local programming, which I think has been
14     raised a lot and which people would like to see more
15     of, is there the possibility that regional means other
16     than Toronto, Montreal, where there happens to be a lot
17     of diversity among the actors and the people, the
18     producers and that kind of stuff?
19  12167                Can an incentive of one kind become a
20     disincentive of another kind?  Those are just some of
21     the issues that come to mind and I am wondering if you
22     are giving those any thought as you are looking at
23     criteria.
24  12168                MR. STURSBERG:  One of the things is,
25     of course, the fund doesn't commission work which is, I


 1     think, a very important starting point.  We react to
 2     what comes in.  The locus of getting diversity is
 3     really, it seems to me, are the people who are
 4     commissioning.
 5  12169                Our principal thing is, you know,
 6     once the work has been commissioned, because you can't
 7     tap any of this unless you actually have a broadcasting
 8     licence --
 9  12170                COMMISSIONER CARDOZO:  Yes.
10  12171                MR. STURSBERG:  -- then we go through
11     it, but we go through it -- you know, right now I don't
12     believe we have any particular diversity guidelines
13     that I know of.  Garry?
14  12172                MR. TOTH:  No.
15  12173                MR. STURSBERG:  Nor Telefilm.  The
16     only area in which we have what I would describe as
17     explicitly a sort of diversity envelope would be with
18     respect to aboriginal programming where we have a
19     couple of million dollars set aside.  Somebody was
20     talking about this earlier on.
21  12174                COMMISSIONER CARDOZO:  Yes.
22  12175                MR. STURSBERG:  I think François was
23     talking about it.
24  12176                COMMISSIONER CARDOZO:  Yes.
25  12177                MR. STURSBERG:  But that's the only


 1     thing.  As I say, we are in a slightly different
 2     situation.  I think if the preoccupation is with
 3     respect to diversity, it's more at the level of
 4     commissioning than it is at our level.  We are
 5     primarily concerned with once they pass the distinctive
 6     Canadian tests, financing --
 7  12178                COMMISSIONER CARDOZO:  I guess I'm
 8     asking how do you define that?
 9  12179                MR. STURSBERG:  Actually, it's
10     interesting.  We have had a lot of conversations about
11     -- if I can put it this way.  Non-mainstream Canadian
12     stories, how do they fit within this context?  For
13     example, one of the things we have talked about among
14     ourselves is say you were from the Caribbean and you
15     wanted to make a television program, how do we
16     discriminate those that are distinctively Canadian from
17     those that are not?
18  12180                If it's just a story about the
19     Caribbean, it's of no interest to us.  If it has a
20     story, however, about the Caribbean experience in
21     Canada, it's right smack dead in the middle of the
22     distinctive Canadian tests.  Then it's done from the
23     Canadian point of view.
24  12181                If it's about being Caribbean in
25     Canada, no problem.  If it's about the Caribbean


 1     itself, it's out.  That's the general way in which we
 2     started to think about this and that's why we talk
 3     about things like point of view so much.
 4  12182                COMMISSIONER CARDOZO:  How about if
 5     it's a YTV kid's program, were you looking at whether
 6     there's diversity among the kids who were there and
 7     doing whatever they were going to be doing in that
 8     program?
 9  12183                With the percentages that we talked
10     about earlier that you provide 10 per cent for
11     regional, is that the kind of thing that can work in
12     this?
13  12184                MR. STURSBERG:  I think again that
14     turns really more into a commissioning issue as to the
15     purchasers and producers of the programming than really
16     an issue for us because by the time the project gets to
17     us, those decisions have already been taken.
18  12185                We are presented with a project
19     that's --  if it's a project like the one I was talking
20     about, then I presume if you are going to have a
21     project which is about the Caribbean experience in
22     Canada, then ipso facto it's going to have to be some
23     diversity.  Beyond that we don't have any particular
24     tests or rules or bonusing arrangements.
25  12186                Do you want to say a word here?


 1  12187                MR. TOTH:  I think, as Richard said,
 2     we receive the projects after they have been along in
 3     development and they are finalized.
 4  12188                I think if you look at the portfolio
 5     that the licence fee program Telefilm has supported, I
 6     think without exception all the shows that you named
 7     earlier we have supported.
 8  12189                We are very conscious in terms of the
 9     licence fee top-up side in terms of remaining an
10     objective program and yet being market driven that we
11     do not, and this is one of the fears that are being
12     expressed about the rumours of us going distinctively
13     Canadian, that we are suddenly going to dictate or put
14     very fine restraints around the kinds of content that
15     we're prepared to do.
16  12190                In having, as we said earlier, the
17     need from last April to really brand the fund in terms
18     of what kinds of programs are we able to support given
19     the oversubscription numbers, what we want to do is
20     provide parameters around which we're prepared to look
21     at projects to finance, but in no way are we trying to
22     define for the entire country or the entire system what
23     is a Canadian project.
24  12191                We are trying to define what kinds of
25     projects could come to us.  In doing so, we are also


 1     not trying to dictate content.
 2  12192                COMMISSIONER CARDOZO:  In reference
 3     to the percentage that you talked about, that's the
 4     top-up part, is it?
 5  12193                MR. TOTH:  Yes.
 6  12194                COMMISSIONER CARDOZO:  What are the
 7     different criteria that you have got there?
 8  12195                MS JOLY:  Are you asking specifically
 9     about a regional project?
10  12196                COMMISSIONER CARDOZO:  No.  Just the
11     different items you had mentioned, such as regional.
12  12197                MR. TOTH:  It might help in terms of
13     sort of putting into context this year how the licence
14     fee program operated because a distinctively Canadian
15     aspect of the program this year was a bonus up.  It was
16     an incentive program to move up.
17  12198                What's interesting about it, I think
18     you may find interesting anyways -- I know I was
19     surprised -- is that 96 per cent of the projects that
20     have come in have requested the distinctively Canadian
21     bonus.  In other words, we felt both as administration
22     and as a Board we raised the bar significantly this
23     year in terms of the fact that producers had
24     alternatives.
25  12199                They could come in this year either


 1     under the normal eight out of ten guidelines or apply
 2     under various circumstances for a distinctively
 3     Canadian bonus.
 4  12200                I am very pleased to say that both
 5     producers and broadcasters seemed to have been able to
 6     jump very significantly to that bar to the tune that we
 7     are up in the 90 per cent.
 8  12201                In terms of how it actually works and
 9     applying for the bonus and the points, do you want to
10     run through them, if that would help the Commission. 
11     They are in the guidelines.
12  12202                COMMISSIONER CARDOZO:  Yes.
13  12203                MS JOLY:  You want me to enumerate
14     the points in terms of distinctively Canadian.
15  12204                MR. TOTH:  If you could, please.
16  12205                MS JOLY:  We would ask projects -- we
17     ask projects that wanted to step up to the 5 per cent
18     for distinctively Canadian bonus.  Those projects had a
19     number of choices that they could choose from to meet
20     that criteria, to meet the bonus criteria.  We asked
21     the projects, depending on the genre, to meet three of
22     those criteria.
23  12206                For drama, children and
24     documentaries, we had set seven choices.  Depending on
25     the complexity and the way the project presented itself


 1     that allowed producers to work and find a way to meet
 2     these criteria, the project would have to be ten out of
 3     ten in terms of Canadian contents.
 4  12207                Secondly, it could be primarily shot
 5     in Canada.  Thirdly, it could be based on Canadian
 6     history, a Canadian event or issue, or an actual
 7     Canadian individual.
 8  12208                If you were drama, it could be based
 9     on a book, a comic book, a short story, manuscript,
10     newspaper, theatrical feature, film, outline or
11     treatment or original script.  If it was based on any
12     one of those, it had to be written by a Canadian.
13  12209                If you were a children's program, it
14     could be based on a book, comic book, short story,
15     manuscript, newspaper, magazine, journal, article,
16     theatrical feature film, outline, written by a
17     Canadian.
18  12210                If you were a documentary, it could
19     be based on an original concept, based on a Canadian
20     outline, written by the Canadian.
21  12211                Finally, we presented the option of
22     the seventh point which asked that the productions
23     director, principal screen writer and all other writers
24     be residents of Canada for income tax purposes.
25  12212                As you see, there were seven options. 


 1     Amongst them, as Garry said, the vast majority of our
 2     projects could meet those.
 3  12213                We had separate criteria for
 4     performing arts.  Would you like me to go on?  They are
 5     in our guidelines.  There are separate criteria for
 6     variety.
 7  12214                COMMISSIONER CARDOZO:  Yes.  We can
 8     get those.
 9  12215                MS JOLY:  Those were the principals
10     that we were looking for.
11  12216                COMMISSIONER CARDOZO:  I guess I am
12     just sort of wondering whether there is a way in which
13     in this whole bunch of things you are looking at
14     whether the reflection of diversity can account for a
15     titch somewhere along the way.
16  12217                MR. STURSBERG:  Can I just make one
17     last point on what she just said?
18  12218                COMMISSIONER CARDOZO:  Yes.
19  12219                MR. STURSBERG:  What we are going to
20     do now with those tests, whereas they were bonus-up
21     criteria in the last round, we are now going to turn
22     them essentially into threshold tests, but we are
23     conscious of the fact that there are issues associated
24     with these kind of threshold tests for different genre
25     producers, for example to the animators.


 1  12220                I know it has been discussed at some
 2     length.  One of the things I just did want to say was
 3     that we have had very extensive discussions with the
 4     animators about their particular concerns.  We have had
 5     very extensive discussions with everybody.
 6  12221                I myself had a meeting with the
 7     animators and François and Garry have talked to them in
 8     detail.  I think we understand their issues very
 9     clearly as to how it is that we are going to be able to
10     deal with them in the context of these kinds of
11     changes.
12  12222                That's the nature of the shift that
13     we are in the process of doing, moving from bonusing up
14     to a threshold shift, but we are now trying to just
15     make sure that we do that in a way that reflects the
16     realities of the animators and children's producers'
17     work.
18  12223                COMMISSIONER CARDOZO:  Lastly, just a
19     quick question.  To what extent do you folks relate to
20     the other funds out there, like the Harold Greenberg
21     funds and others?  Do all the funds talk to each other
22     from time to time and talk about how things are going
23     or what the priorities are?
24                                                        1715
25  12224                MR. TOTH:  As best as we can manage. 


 1     I used to manage the Alberta Motion Picture Development
 2     Corporation and at that time it was critical that all
 3     funders in the industry -- and Telefilm was very good
 4     at this, as were the other both privately-regulated
 5     funds and the provincial funds in terms of working
 6     together in as much of a coordinated way as possible. 
 7     It didn't mean that we met together and squirrelled
 8     away in a meeting room and wrote all of our guidelines
 9     to absolutely interface impeccably.
10  12225                Indeed, I don't think the system
11     would like that because one of the things that the
12     industry likes is that they have a number of doors to
13     knock upon and certainly we recognize the significance
14     of this Fund, in every slight direction we take, the
15     ripple-out effect that it has on the industry.  What we
16     want to work in is in a complementary way with other
17     funders, but not that we are all so meshed together
18     that we are only financing absolutely one kind of
19     project.  I think that the industry would like other
20     doors and other defined programs to knock on.
21  12226                COMMISSIONER CARDOZO:  Thanks very
22     much.
23  12227                Thanks, Madam Chair.
24  12228                THE CHAIRPERSON:  So, the meshing is
25     not as important as between the funds as it is as


 1     between the regulator and the Fund maybe is what we
 2     have seen.
 3  12229                MR. TOTH:  Well, I know two programs
 4     that the meshing is very critical, having experienced,
 5     and I think we will succeed and achieve that very well
 6     this year.  But, yes, each fund -- and it's very much
 7     -- what we have done in terms of the branding efforts
 8     this year in the new name and the new look and the new
 9     processes and guidelines that we will be coming forward
10     with, each fund has been created with a mandate and we
11     are coming forward next year with what we think is a
12     very clear mandate.
13  12230                THE CHAIRPERSON:  Mr. Stursberg, with
14     regard to the reflection of diversity -- and I guess
15     there are a number of ways to look at this.  One is the
16     program, albeit very Canadian, not very reflective of
17     the real Canadian composition, depending on what the
18     program is about, if it's drama or -- so, you could say
19     this is more reflective of Canadian society than this
20     one.
21  12231                When you say "commission", you mean
22     at the broadcaster level when the first licence fee is
23     triggered.  So, I would read you as saying if you want
24     this type of demand, the best way to achieve it is to
25     impose it on the broadcaster and then, presumably, in


 1     discussions with the producer, he or she -- I am making
 2     this very simplistic -- would pick this rather than
 3     that because when the Commission takes the broadcaster
 4     to task as to whether it reflected society as it is
 5     with regard to the issue of diversity, that it was
 6     doing it properly.  I understand that's what you mean.
 7  12232                You are looking at it from a
 8     different angle.  So, if the Commission wants to do
 9     something about that, it can do it at the level of the
10     broadcaster.
11  12233                MR. STURSBERG:  I think that's right
12     and, as Garry was mentioning, once you get through the
13     door, so to speak, the principal issues that confront
14     us are, in large measure, financial issues of one
15     variety or another.
16  12234                We are trying to simplify -- make
17     more transparent the financial processes and decision-
18     making rules and I think that it would be -- we want to
19     make the funds less arbitrary, we want to make them
20     more objective as much as we can and more transparent. 
21     I think you are right.  I think that the better course
22     is to impose the obligations at the commissioning level
23     rather than at the level of the Fund's financing
24     arrangements.
25  12235                THE CHAIRPERSON:  And in some


 1     circumstances that route may have the effect of
 2     encouraging more regional production?
 3  12236                MR. STURSBERG:  Yes, it may well.
 4  12237                THE CHAIRPERSON:  Commissioner
 5     Wilson?
 6  12238                COMMISSIONER WILSON:  Mr. Stursberg,
 7     I want to ask you a question about the triggers because
 8     we have heard from a number of independent producers
 9     that the broadcaster's licence fees are dropping,
10     dropping, dropping and getting lower and lower and that
11     it seems much of this is driven by the fact that there
12     are certain trigger levels that have been established
13     by the Fund that the broadcaster has to give and so,
14     obviously, they are not going to give any more than
15     that.
16  12239                So, maybe between you and Mr. Toth
17     you can explain to me -- I mean you have independent
18     producers and broadcasters at the table at your board
19     meetings.  So, where do the trigger levels come from?
20  12240                MR. STURSBERG:  Well, Garry can tell
21     you the history of how the thresholds have gotten
22     struck, if that's of interest to you, but I would just
23     say again what I mentioned before.  We had a very long
24     conversation for a number of months now about licence
25     fee thresholds, about the size of the top-ups that


 1     should be available, about how all that should work,
 2     and we are in the process now of concluding those
 3     discussions.  I think that once we conclude them, you
 4     will find they go to the heart of many of these kinds
 5     of questions that you are asking yourselves right now.
 6  12241                COMMISSIONER WILSON:  So, that's
 7     another one that you want to defer?
 8  12242                MR. STURSBERG:  Yes, I would,
 9     actually.  I would, actually --
10  12243                COMMISSIONER WILSON:  To a future
11     discussion.
12  12244                MR. STURSBERG:  -- if that's okay
13     with you.
14  12245                COMMISSIONER WILSON:  I guess I am
15     struggling with this idea that the broadcaster can put
16     in, let's say, 15 per cent and then the Fund will
17     contribute an additional 30 per cent, so 45 per cent of
18     the budget comes from public funds.  No, sorry, 45 of
19     the budget then comes from the broadcaster and the
20     public funds, so it's 200 per cent more than the
21     broadcaster is actually putting in.  What's the notion
22     behind --
23  12246                MR. STURSBERG:  It would be more than
24     that.
25  12247                COMMISSIONER WILSON:  Yes, it could


 1     be.
 2  12248                MR. STURSBERG:  Because it may have
 3     equity money in, it will have tax credit money in.  So,
 4     when you cascade up --
 5  12249                COMMISSIONER WILSON:  Right.  I am
 6     just using that as a very simple example.
 7  12250                MR. STURSBERG:  Okay.
 8  12251                COMMISSIONER WILSON:  But what's the
 9     notion of that?  I am trying to understand.  The
10     broadcasters don't -- maybe I am using one of these
11     linear examples that John Cassaday talked about this
12     morning that I like to use, but is it that the
13     broadcaster doesn't contribute as much in the licence
14     fee in order to trigger the public funds and that way
15     they can trigger more production across the board, so
16     the volume of production goes up?  Is that the idea?
17  12252                MR. TOTH:  Well, specifically, the
18     idea this year was in terms of from a programming fund. 
19     We are focused on the kinds of programming that we
20     create where the increase is paid to the producers and
21     the licence fee top-up was incentives in terms of
22     achieving essentially policy goals in terms of the
23     distinctively Canadian.  The extreme example of 40 or
24     45 per cent, you are talking about a regional dramatic
25     program --


 1  12253                COMMISSIONER WILSON:  In French.
 2  12254                MR. TOTH:  -- in French, which I
 3     think, in terms of volumes of those kinds of
 4     productions, we wish we could see more, but it is the
 5     extreme.  I guess, to answer your question, what we are
 6     trying to achieve here is policy goals in terms of the
 7     distinctively Canadian.
 8  12255                MR. STURSBERG:  If I could just make
 9     a comment about this, because this is terribly tricky,
10     how all these bits and pieces move around, the question
11     is:  If you drop licence fees, do you get more Canadian
12     programming on or do you get less Canadian programming
13     on or less Canadian programming made?
14  12256                COMMISSIONER WILSON:  Licence fees
15     from the broadcasters you are talking about?
16  12257                MR. STURSBERG:  Right, but there is
17     different moving parts in this.  There is how much are
18     they obliged to put on.  There is how much money do
19     they have to commission programming, which is a
20     function of where the licence fees go.  There is how
21     much they contribute; therefore, how easy it is to be
22     able to conclude your financing from the point of view
23     of making a program.  So, all these parts kinds of
24     shift around with each other.  You press on one and it
25     bounces out here.


 1  12258                One of the issues, I think, that we
 2     have been wrestling with and you may well end up
 3     thinking about it is you can do these things one of two
 4     ways.  You can either set them so they are at a fixed
 5     level.  You say, "Boom, that's it, that's the level,
 6     it's fixed."  That's one way of doing it and that has
 7     certain advantages; everybody knows what the number is. 
 8     It has disadvantages, which is that it's difficult then
 9     for the system to adjust as the financial circumstances
10     of the broadcasting industry shift.
11  12259                As you know, the broadcasting
12     industry tends to be somewhat cyclical in character and
13     as different groups reflecting public demand improve
14     their position in the market and so on and so forth. 
15     So, that's one way of doing it.
16  12260                The other way of doing it is to say,
17     no, you have to think about it in a more market-based
18     kind of way, where you say to yourself, "How do we
19     structure a market-clearing price with respect to the
20     valuation of this kind of money?"  Those are two quite
21     different ways of doing it.  In the past, it was done
22     on the basis of fixed percentages of one variety or
23     another, whether it was your original rules or the
24     rules that currently obtain within the organization,
25     within the Fund.


 1  12261                As I say, the other way conceptually
 2     of doing it is to say to yourself, "Can we create a
 3     mechanism that will structure a market-clearing price?" 
 4     If you could do that, I think that would obviously be a
 5     better thing to do, but it is very difficult to think
 6     your way through the problem.
 7  12262                So, one of the things that we have
 8     been struggling with as a board is precisely how do we
 9     make those trade-offs in a way where you maximize, as
10     Garry was saying, not only the level of Canadian
11     programming that you produce, but the flexibility of
12     the system to be able to respond as changes take place.
13  12263                I hope that's not too abstruse a
14     point.
15  12264                COMMISSIONER WILSON:  I guess what I
16     am struggling with is the notion that far and away the
17     largest amount of money that goes into making most
18     Canadian programming is public money.
19  12265                MR. STURSBERG:  Correct.  Yes, that
20     has always been true.
21  12266                COMMISSIONER WILSON:  I understand
22     that has always been true and I understand that there
23     are cultural objectives that we are trying to meet and,
24     as Laurier LaPierre said, he doesn't care how much it
25     costs.


 1  12267                MR. STURSBERG:  Well, others may,
 2     though.
 3  12268                COMMISSIONER WILSON:  Others may have
 4     a different opinion, but I am just wondering about
 5     whether or not the broadcasters are putting in enough. 
 6     Are the other people who are putting in chunks of those
 7     pies to finance these programs putting in enough?
 8  12269                MR. STURSBERG:  As I say, this issue
 9     of what is the appropriate licence fee and how do we
10     structure our decision-making process with respect to
11     it is a very fundamental kind of question for us and we
12     have been struggling with it, like you.
13  12270                COMMISSIONER WILSON:  And you will
14     want to talk to us about it later.
15  12271                MR. STURSBERG:  Yes, I do very much
16     want to talk to you about it later.
17  12272                COMMISSIONER WILSON:  I took the
18     words right out of your mouth.
19  12273                MR. STURSBERG:  But I can't talk to
20     you about it.  I would like to.
21  12274                COMMISSIONER WILSON:  But you don't
22     have an answer.
23  12275                MR. STURSBERG:  I think it would be
24     inappropriate.  No, it's because the board hasn't
25     concluded and I am just here as their representative.


 1  12276                COMMISSIONER WILSON:  Well, at least
 2     you will know what's on our mind when you do come to
 3     talk to us, whenever that may be, and when you go back
 4     to talk some more with your board.
 5  12277                MR. STURSBERG:  You may find it
 6     reassuring that many of the questions you are asking
 7     yourselves are questions that we have had to ask
 8     ourselves.  So, that's why I think that it will be -- I
 9     am looking forward to a discussion because I think it
10     will be a very interesting discussion and I hope you
11     can benefit from some of our work on this as well.
12  12278                COMMISSIONER WILSON:  And we hope you
13     can benefit from some of ours.
14  12279                MR. STURSBERG:  We all hope we can
15     benefit from each other.
16  12280                COMMISSIONER WILSON:  Just one big
17     happy family.
18  12281                Thank you, Madam Chair.
19  12282                THE CHAIRPERSON:  One way that we
20     wouldn't have to see each other as much, of course,
21     would be to say, "We will require certain categories of
22     programming at certain hours of the day and a certain
23     number of hours and you, broadcaster, figure out how
24     you can spend enough and pressure the funds
25     sufficiently or do whatever you can to air programming


 1     at that time that will keep your audiences."
 2  12283                That would be another method where we
 3     wouldn't have to cooperate or see each other as much,
 4     wouldn't it, if the Commission were to not look at
 5     spending and simply say we will demand a certain amount
 6     of programming in certain categories in hours where you
 7     can't afford not to put quality on?
 8  12284                MR. STURSBERG:  I hope you are not
 9     asking me to comment on that.
10  12285                THE CHAIRPERSON:  I am only asking
11     you to comment on whether that would mean you wouldn't
12     have to come and see us as often or us to invite you. 
13     The problem is --
14  12286                MR. STURSBERG:  But we like to come
15     and see you.  We would miss you.
16  12287                THE CHAIRPERSON:  The problem is
17     spending requirements and then the attempt to get
18     access to money and how easy it is to coordinate these
19     two to achieve the respective goals.
20  12288                Counsel?  And don't hesitate to take
21     me to task.
22  12289                MR. BLAIS:  I wouldn't dare to break
23     what appeared to be a consensus between yourself and
24     Mr. Stursberg.
25  12290                THE CHAIRPERSON:  You are much more


 1     polite than me.
 2  12291                MR. BLAIS:  You mentioned November as
 3     the date when -- the time frame within which you think
 4     the board's final conclusions.  Do you have a more
 5     precise date?
 6  12292                MR. STURSBERG:  I can tell you where
 7     we are in the process.  I don't think anybody will
 8     mind.  We are having board meetings on the 19th of
 9     October, at which time I hope that we will basically
10     conclude all these matters.  In terms of finalizing the
11     framework -- because the changes we are making are
12     really fairly substantial and I hope we conclude those
13     on the 19th.
14  12293                Then what will happen is the process
15     of turning those into detailed guidelines.  That,
16     obviously, is a much more -- you know, you have to
17     actually take the general agreements of the board and
18     translate them into text that people can use for the
19     purpose of making applications.  That will take
20     probably another month or so and then we would hope to
21     have them out in November, the guidelines.
22  12294                Now, all that being said, if the
23     board can conclude on the 19th, I think I can say from
24     the board's point of view, we would be delighted to
25     come down and meet you and talk to you about what we


 1     are doing.  I think, in fairness, however, it would be
 2     better if we could do that confidentially with the
 3     Commission because we don't want to put the guidelines
 4     out sort of half-baked, if you know what I mean.  We
 5     would like to have them out where everybody has a
 6     chance to see them all at the same time.
 7  12295                But if the Commission would like, we
 8     would be happy to come down just as soon as we have
 9     concluded the meetings on the 19th, if we can get
10     through it all.
11  12296                MR. BLAIS:  The Commission is well
12     aware of decisional processes and itself likes to keep
13     its processes confidential when they are being made. 
14     So, I wasn't pushing you to tell us what the decisions
15     were before they became public, I was just asking when
16     in November they would become public.
17  12297                MR. STURSBERG:  But, as I say, we
18     would be happy, I think, to come down and talk to the
19     Commission about it and to take you through our
20     reasoning.  We don't have any problem with that.  We
21     would like to be as helpful as possible.
22  12298                MR. BLAIS:  Thank you for the offer,
23     but I would be more interested in knowing when in
24     November --
25  12299                MR. STURSBERG:  We don't know. 


 1     Sometime in November, probably towards mid to late
 2     November.
 3  12300                MR. BLAIS:  Thank you.
 4  12301                Once that becomes public, I take it
 5     that you would have no problem as to the exchanges
 6     between yourselves and the Commission -- I don't know
 7     what form it would take -- that it be given some sort
 8     of transparency for other interested parties that might
 9     be interested in what the exchanges might be between
10     the Commission and yourself, whether it's a procès-
11     verbal or a transcript or something.
12  12302                MR. STURSBERG:  Yes, transcripts of
13     the discussion.  I don't see any problem.
14  12303                MR. BLAIS:  There is no reason that
15     at that point the discussions couldn't be transparent?
16  12304                MR. STURSBERG:  No, that's fine, if
17     you would like to do it that way.  We are at your
18     disposal to do it whatever way you would like.
19  12305                MR. BLAIS:  Thank you.
20  12306                Those are my questions.
21  12307                THE CHAIRPERSON:  Thank you, Mr.
22     Stursberg, Mr. Macerola, Mr. Toth, and all your
23     colleagues for beginning the weekend with us.
24  12308                We will now take a 10-minute break
25     and resume at 20 to 6:00.


 1     --- Short recess at / Courte suspension à 1730
 2     --- Upon resuming at / Reprise à 1745
 3  12309                THE CHAIRPERSON:  Madam Secretary,
 4     please.
 5  12310                MS BÉNARD:  Thank you, Madam Chair.
 6  12311                The next presentation will be by the
 7     Writers' Union of Canada.  I would invite Mr. Russell
 8     Smith to make the presentation.
10  12312                MR. SMITH:  Thank you.  Let me thank
11     the Commission for giving me this opportunity to read
12     the text of a brief prepared by Jackie Manthorne, the
13     First Vice-Chair, who is unable to be with us today
14     because of a family emergency.
15  12313                The Writers' Union of Canada is a
16     registered national arts organization of nearly 1300 --
17     we are growing -- professional book writers, united to
18     advance their common and collective interests and to
19     safeguard the freedom to write and publish.
20  12314                We strongly believe tha a broad and
21     fundamental review of the CRTC's policies relating to
22     television cannot take place without the input of one
23     of television's major players -- Canadian writers.
24  12315                Canadian writers are the often
25     invisible underpinnings of Canadian television.  They


 1     create the text and screenplays on which television
 2     programming is based, from news to drama, from
 3     educational and public affairs shows.  They provide
 4     cultural content and context through author interviews,
 5     readings and debates about art, politics and
 6     literature.  They present Canada to Canadians from
 7     diverse points of view.  They explain us to ourselves
 8     and interpret regional, cultural, racial and gender
 9     differences, among others.
10  12316                Their works of fiction are
11     transformed into movies or weekly series.  Their non-
12     fiction writing forms the basis of documentaries and
13     public interest programming.  Without writers,
14     television would be mute.
15  12317                The Friends of Canadian Broadcasting
16     has pointed out that the average 12-year old Canadian
17     child has spent twice as much time in front of the
18     television as she has spent in school; has watched more
19     than 9,000 hours of American fiction programs -- much
20     of it violent in nature; that local television
21     programming is being abandoned and viewers left with
22     increasingly stale presentations, often produced with a
23     central Canadian perspective; and that private
24     broadcasters' investment in Canadian entertainment
25     programs has increased by only 1 percent during the


 1     past five years.
 2  12318                Profits during the same period are up
 3     by more than 50 percent.
 4  12319                In addition, the CBC's ability to
 5     provide news, information and public affairs
 6     programming from the regions has been substantially
 7     reduced due to budget cuts.  These cuts have also
 8     decreased the CBC's capacity to produce high-quality
 9     cutting edge drama, music and dance and variety
10     programs that reflect the geographic, cultural, racial,
11     ethnic and linguistic diversity of Canada.
12  12320                When considered in this light, the
13     Commission has set forth an extremely ambitious vision.
14  12321                The Writers' Union of Canada
15     recognizes that rapid restructuring is taking place in
16     the broadcasting environment, not only in Canada but
17     globally.  This restructuring includes the licensing of
18     new Canadian pay and specialty services, ownership
19     consolidation, the growth of large, multi-station
20     conglomerates, and increased domestic and international
21     competition.
22  12322                As creators, we encourage the free
23     passage of literature and culture across borders, while
24     recognizing that our identity as Canadians is dependent
25     on maintaining a strong and vibrant Canadian dependence


 1     in the arts, including television.
 2  12323                The success of the industry in
 3     strengthening this presence will depend on regulations
 4     being maintained and strengthened and on a concerned
 5     and determined effort by all players:  the Commission,
 6     networks, government, funders, independent producers
 7     and creators.
 8  12324                This can only happen if all players
 9     agree that the development of Canadian culture is
10     essential.
11  12325                Canada was the first western nation
12     to formally recognize the vital position of the creator
13     in society.  In 1992, our Parliament passed the Status
14     of the Artist Act, which affirms the primary role of
15     the artist in developing Canada's culture and
16     sustaining our nation's quality of life.
17  12326                It also recognized -- and I quote:
18                            "...that artistic creativity is
19                            the engine for the growth and
20                            prosperity of dynamic cultural
21                            industries in Canada."
22  12327                This is as true of television as it
23     is of dance, music, literature, the visual arts and
24     design.
25  12328                With respect to Canadian content


 1     regulations, since the Commission's definition of a
 2     Canadian program forms the basis of its policy and
 3     regulatory framework for television, the Union believes
 4     that it is essential that Canadian content regulations
 5     be reinforced to stimulate the production of quality
 6     Canadian programming.
 7  12329                Some of the key objectives of the
 8     Broadcasting Act call on the broadcasting system to
 9     contribute in an appropriate manner to the creation and
10     presentation of Canadian programming and to make
11     maximum use and in no case less than predominant use of
12     Canadian creative and other resources in the creation
13     and presentation of programming.
14  12330                Without going into great detail, the
15     Commission assesses productions, excluding news and
16     public affairs programs produced by licensees, for
17     accreditation by using, among other criteria, a point
18     system based on the citizenship of individuals filling
19     key creative positions.
20  12331                The producers and all those
21     fulfilling producer related functions and major and
22     minor performers must be Canadian.  The amounts paid to
23     Canadians for services provided to make the program on
24     post-production and on lab processing in Canada are
25     also taken into consideration.


 1  12332                However, there are no definitions for
 2     some key creative personnel, including directors,
 3     writers, choreographers, and on-line and off-line
 4     editors.  Because of the importance of all creative
 5     personnel in the production of Canadian culture, as
 6     portrayed on television, and especially writers, the
 7     Union believes it is essential that definitions be
 8     developed for all creative personnel to avoid confusion
 9     and misunderstandings.
10  12333                The Union also suggests that the
11     definition of a Canadian program includes the
12     stipulation that production companies be wholly or
13     majority owned and controlled by Canadians; and in case
14     of co-ventures, that the equity stake or profit sharing
15     arrangement remain at 50-50.
16  12334                In the case of series, the Union does
17     not recommend recognition for episodes which do not
18     meet Canadian content requirements.
19  12335                As well, the Union suggests that the
20     requirement that 75 percent of remuneration be paid to
21     Canadians in live action productions be applied to
22     animated productions, currently at 65 percent.
23  12336                What is prime time?  As set out in
24     the regulations, licensees must achieve a yearly
25     Canadian content level of 60 percent overall and 50


 1     percent between 6 p.m. and midnight.  The CBC must
 2     ensure that 60 percent of its entire schedule consists
 3     of Canadian programs.
 4  12337                However, real prime time -- that is,
 5     peak viewing hours -- is from 7 p.m. to 11 p.m.  Anyone
 6     who watches television soon realizes that, with the
 7     exception of the CBC and certain specialty channels,
 8     the time period between 7 p.m. and 11 p.m. is mainly
 9     filled with American-produced dramas and situation
10     comedies.
11  12338                It is clear that many television
12     stations and networks are fulfilling their 50 percent
13     prime time Canadian content requirement by showing news
14     programming from 6 p.m. to 7 p.m. and from 11 p.m.
15     until midnight.  That leaves one additional hour of
16     Canadian programming to be aired during peak viewing
17     hours.
18  12339                If the CRTC is serious about
19     encouraging Canadian expression and in ensuring that
20     Canadian television viewers have the opportunity to see
21     Canadian programs, then the Union believes that the
22     definition of "prime time" must be changed from 6 p.m.
23     to midnight to 7 p.m. to 11 p.m.
24  12340                The Commission recognizes that
25     Canadian drama, variety, children's and documentary


 1     programs are under-represented on television.  The
 2     Union encourages independent producers and broadcasters
 3     to consider making use of the plethora of books and
 4     plays written by Canadian writers and playwrights by
 5     adapting them to produce television dramas, children's
 6     and documentary programs.
 7  12341                The Union also recommends that
 8     funding be made available for the adaptation and to
 9     production of such programming.  Here I recognize that
10     we are underlining a recommendation of the Canadian
11     Writers' Guild, which we welcome very much.
12  12342                On the subject of diversity, the
13     Broadcast Act calls for the television sector to
14     provide a wide range of programming that reflects the
15     linguistic duality and multicultural and multi-racial
16     nature of Canadian society.
17  12343                An important part of ensuring
18     diversity is by requiring all local television stations
19     and large multi-station ownership groups and networks
20     to broadcast local and regional programming and news,
21     as well as national programming and news.
22  12344                Budget cuts to the CBC and other
23     national networks have resulted in less local news,
24     information and programming; and the Union believes
25     this must be stopped.


 1  12345                Despite the introduction of a large
 2     number of pay and specialty stations, the Union
 3     recommends that local stations and networks not be
 4     relieved of their obligation to provide programming
 5     that meets the needs of cultural, linguistic and racial
 6     minorities and aboriginal peoples, and to reflect
 7     Canada's cultural diversity.
 8  12346                While there are many more stations
 9     with diverse programming than when the Act was written,
10     it should be remembered that not everyone has access to
11     pay television or to the specialty channels not carried
12     on basic cable television.  Indeed, there are those who
13     cannot afford basic cable, and there are local and
14     regional differences in what stations are available.
15  12347                In conclusion and in summary, the
16     Writers' Union of Canada calls upon the CRTC to
17     recognize the importance of writers in the production
18     of television programming; to maintain and strengthen
19     Canadian content regulations; to modify prime time
20     directives so that Canadian programs form the basis of
21     all prime time programming; and to encourage
22     development in the under-represented sectors of drama,
23     variety, children's and documentary programs; and
24     finally, to ensure that all local stations and networks
25     carry Canadian programming that reflects the


 1     geographic, cultural, racial, ethnic and linguistic
 2     diversity of Canada.
 3  12348                Thank you.  That is the end of the
 4     submission.
 5  12349                I would try to answer your questions,
 6     although I remind you that I am a local member of the
 7     Union, living here in Ottawa, and a book writer, but
 8     not a member of the directors of The Writers' Union of
 9     Canada.
10  12350                So anything I might say would be a
11     personal opinion and not an official policy of The
12     Writers' Union.
13  12351                THE CHAIRPERSON:  Thank you, Mr.
14     Manthorne.
15  12352                MR. SMITH:  Mr. Smith.
16  12353                THE CHAIRPERSON:  You are not Mr.
17     Manthorne.  I apologize.
18  12354                MR. SMITH:  Jackie Manthorne wrote
19     the submission.
20  12355                THE CHAIRPERSON:  And she is a lady,
21     apparently.
22  12356                MR. SMITH:  She is a lady.
23  12357                THE CHAIRPERSON:  So this would be
24     more confusing than confusing you between your local
25     representation and your ability to speak for the entire


 1     organization.  I think I have gone beyond that.
 2  12358                MR. SMITH:  I'm not confused anyway.
 3  12359                THE CHAIRPERSON:  I apologize.  You
 4     probably corrected it at the beginning and I didn't
 5     catch it.
 6  12360                MR. SMITH:  That is all right.
 7  12361                THE CHAIRPERSON:  Commissioner 
 8     McKendry, please.
 9  12362                COMMISSIONER McKENDRY:  Good
10     afternoon, Mr. Smith -- it is almost good evening.
11  12363                Thank you for appearing before us and
12     sharing your submission with us.
13  12364                I have a few questions, and I will
14     try to keep them of a general nature because, as you
15     have explained, you were not the author of this
16     particular submission.
17  12365                Perhaps you could explain a little
18     bit about your organization.  What I understand is that
19     your organization is made up of book writers.
20  12366                Is it book writers, or would it
21     include people who write for periodicals as well?  I
22     assume it does not include screen writers.
23  12367                MR. SMITH:  There may be screen
24     writers and periodical writers as well, but one of the
25     requirements of membership is to have published a book.


 1  12368                So yes, they are all book writers.
 2  12369                COMMISSIONER McKENDRY:  And as you
 3     said, all published book writers.
 4  12370                MR. SMITH:  That is correct, yes.
 5  12371                COMMISSIONER McKENDRY:  The Writers
 6     Guild of Canada appeared before us a little earlier.  I
 7     think you were here and listened to them.
 8  12372                MR. SMITH:  Yes.
 9  12373                COMMISSIONER McKENDRY:  One of the
10     areas that expressed to us was the issue of having more
11     Canadian books appear in film and on television, and so
12     on.
13  12374                I take it that is a matter that, as I
14     think you indicated in your oral comments to us, your
15     members would support.
16  12375                Are you aware of any particular steps
17     that you would like to see us take in order to help
18     bring that about, from your point of view?
19  12376                MR. SMITH:  The only step that I know
20     we have taken is this step right here this evening.  I
21     can refer your question to them and ask for further
22     information on that, if you want that to be sent.
23  12377                COMMISSIONER McKENDRY:  There is an
24     opportunity in the proceeding to provide us with final
25     written comments.  That might be something that your


 1     members might want to deal with, if they do provide us
 2     with final written comments.
 3  12378                The other thing that the Writers
 4     Guild talked about is that for each television station
 5     broadcaster that we licensed, they would like to see us
 6     put in place expectations with respect to the
 7     development of Canadian programs so as to encourage the
 8     broadcasters that we licensed to contribute in a
 9     financial way to the development of Canadian programs.
10  12379                Is that something that would be of
11     interest to your membership as well?
12  12380                MR. SMITH:  Yes, of course,
13     especially in as much as all across Canada we tend to
14     work -- we are in all of the regions, in terms of our
15     own opportunities, we would see this as a valuable step
16     to be taken.
17  12381                That sounds very selfish.  But apart
18     from the -- our general belief in the interests of the
19     unity of Canada to --
20  12382                I'm sorry, I am going to another
21     question now.
22  12383                If we are talking about local
23     programming, yes, we want to see it there because there
24     is work there for us.
25  12384                COMMISSIONER McKENDRY:  I suppose to


 1     the extent that we are interested in seeing more
 2     Canadian literature ending up on our television sets,
 3     it would be helpful for us to have some insight into
 4     the state of health of book publishing in Canada today,
 5     from the point of view of the people who write books.
 6  12385                From your own perspective, what is
 7     your assessment of that environment today?
 8  12386                MR. SMITH:  There is a great deal of
 9     material being written, a great deal of very good
10     material, and it is being published.  Canadians are
11     great readers, so the books are also being sold.
12  12387                I have just been involved with Word
13     on the Street here in Ottawa, which was a book and
14     magazine fair that took place in the Byward Market on
15     Sunday.  And even I, being in the industry myself, was
16     impressed by the enthusiasm that is shown by the
17     public.
18  12388                Of course, this was going on at the
19     same time in Vancouver, in Toronto, in Halifax and in
20     Calgary.  As far as I understand, they were all very
21     successful.  That is only one indication.
22  12389                The book sellers could tell you, and
23     the publishers could tell you, that there is
24     enthusiasm.
25                                                        1805


 1  12390                There's a lot of writing going on. 
 2     Not every aspiring writer gets published right away,
 3     but certainly there's a great deal being published and
 4     there's an awful lot of material out there.
 5  12391                I'm thinking of the novels I have
 6     read recently in the last year myself that would make
 7     great television material.
 8  12392                COMMISSIONER McKENDRY:  One of the
 9     issues that we deal with is shelf space for Canadian
10     programs on broadcasters and on cable systems and so
11     on.
12  12393                How is it today for Canadian authors
13     such as yourself in terms of getting shelf space for
14     Canadian books in bookstores?  Is that something that's
15     an issue or a concern for you?
16  12394                MR. SMITH:  Well, it is a concern for
17     me because I am not a well known author.  I tend to
18     write regional books and my books go on the shelves up
19     and down the Ottawa Valley.  If I were Pierre Berton or
20     Margaret Atwood, I would have no trouble getting my
21     books on the shelf.
22  12395                Writers do have problems with
23     persuading their publishers to get out and promote as
24     much as they would like them to do, and a lot of
25     writers find themselves doing the promotion themselves


 1     getting on to bookshelves.
 2  12396                Once the sellers of books are
 3     approached, I don't think that is so much of a problem. 
 4     We have got some big booksellers like Chapters coming
 5     in now.  They seem to be bending over backwards to make
 6     Canadian writers welcome.  As a result, the independent
 7     booksellers also are kind of getting together to match
 8     the big houses.   
 9  12397                I can understand it.  There's a
10     limited amount of television screen space.
11  12398                COMMISSIONER McKENDRY:  Those were
12     the questions I had for you.  I very much appreciate
13     you taking the time to come and meet with us.
14  12399                I understand your colleague has had a
15     death in her family and I would like you to extend our
16     sympathies to her.
17  12400                MR. SMITH:  It is a crisis, a heart
18     attack in the family.  That's the last I heard.  I hope
19     it's not death.
20  12401                COMMISSIONER McKENDRY:  If it isn't a
21     death, we are very pleased to hear that.  We hope that
22     her family member recovers.
23  12402                MR. SMITH:  Thank you.  I will pass
24     that on to her.
25  12403                THE CHAIRPERSON:  Commissioner


 1     Cardozo.
 2  12404                COMMISSIONER CARDOZO:  Thank you,
 3     Madam Chair.
 4  12405                Mr. Smith, I just wanted to ask what
 5     your area of writing is.
 6  12406                MR. SMITH:  I have one book of short
 7     stories, one novel and one book of poetry which just
 8     came out last month.
 9  12407                COMMISSIONER CARDOZO:  Is there any
10     genre that you focus on?
11  12408                MR. SMITH:  My short stories are all
12     about -- the subtitle of the book, it's called
13     "Tripper's Tales" and the subtitle is "Myths and
14     Legends of the Ottawa Valley".  I understand that it
15     has been catalogued under "myths and legends" although
16     I wrote them all myself.
17  12409                COMMISSIONER CARDOZO:  Did you make
18     these up or were they there before you wrote them?
19  12410                MR. SMITH:  No.  I made them up.  I
20     don't know if anybody is interested, they began on
21     canoe trips and ski trips into the Ottawa Valley where
22     I was travelling with young people.  We would see
23     things and I would tell them cock and bull stories
24     about what they were seeing.
25  12411                COMMISSIONER CARDOZO:  Do you think


 1     there's a lot of -- if that's in the area of your
 2     interest -- stories about the Ottawa Valley and stuff
 3     in Eastern Ontario?  Is there enough of that kind of
 4     local story telling on television?
 5  12412                MR. SMITH:  Yes.
 6  12413                COMMISSIONER CARDOZO:  I think of
 7     Wayne Rostad's show on CBC "On the Road Again".
 8  12414                MR. SMITH:  Yes, indeed.  There is a
 9     great deal, some of it even true.
10  12415                COMMISSIONER CARDOZO:  I mean is it
11     on television?
12  12416                MR. SMITH:  I think of Wayne Rostad
13     as well.
14  12417                COMMISSIONER CARDOZO:  In the media
15     there used to be a woman who was a story teller.  I
16     forget her name.
17  12418                MR. SMITH:  Mary Cook.
18  12419                COMMISSIONER CARDOZO:  Mary Cook,
19     right.  But they canned her too.
20  12420                MR. SMITH:  She's retired now.
21  12421                COMMISSIONER CARDOZO:  Her interviews
22     anyhow, weekly interviews.
23  12422                MR. SMITH:  Yes.  There's room for
24     more of this kind of thing, I'm sure.  They haven't
25     canned her mentor's show.  I just want that on the


 1     record.
 2  12423                COMMISSIONER CARDOZO:  What I just
 3     want to ask you a little bit about.  We haven't had
 4     many people come and talk to us personally.  They talk
 5     more on behalf of associations.  I just wonder if you
 6     could also tell us any of your own personal reflections
 7     on television as somebody who does writing and I
 8     suppose does some thinking in these areas.
 9  12424                Are there any particular channels
10     that reflect the kinds of things you like to see?
11  12425                MR. SMITH:  I am partial to drama
12     myself.  I find myself looking at a lot of English
13     drama.  I look at TVO.
14  12426                COMMISSIONER CARDOZO:  Yes.
15  12427                MR. SMITH:  I probably shouldn't
16     mention it, but I also look at PBS sometimes if they
17     are running.
18  12428                COMMISSIONER CARDOZO:  That's fine. 
19     We always have to rise to the competition.  If the
20     competition is better than us --
21  12429                MR. SMITH:  As a matter of fact, I
22     wrote to Bill Safe one time and said I'm not going to
23     send you any money because I now subscribe to TVO.  He
24     wrote back a very nasty letter saying that TVO learned
25     half of what they know from PBS.  I don't know how true


 1     that is.
 2  12430                I watch drama myself, wherever I can
 3     find it.
 4  12431                COMMISSIONER CARDOZO:  Do you
 5     subscribe to the specialty channels?
 6  12432                MR. SMITH:  I have the basic plus --
 7     I do have Arts and Entertainment.
 8  12433                COMMISSIONER CARDOZO:  Okay.
 9  12434                MR. SMITH:  The local channels here I
10     don't.
11  12435                COMMISSIONER CARDOZO:  There's a bit
12     more focus on things like drama, history and that sort
13     of stuff.
14  12436                MR. SMITH:  I don't have the History
15     channel.  I didn't go for it.  I don't have enough time
16     to watch television to make it worthwhile.
17  12437                COMMISSIONER CARDOZO:  Okay.  Well,
18     thanks very much.
19  12438                Thank you, Madam Chair.
20  12439                THE CHAIRPERSON:  Mr. Smith, thank
21     you for visiting us.  Can I ask you to make me a
22     promise?  You won't write a short story about how an
23     Ottawa Valley girl mistook you for Ms Manthorne.
24  12440                MR. SMITH:  No promises.  Anybody
25     that talks to me is taking a chance.


 1  12441                THE CHAIRPERSON:  We thank you for
 2     your participation.
 3  12442                Please give Ms Manthorne our best.
 4  12443                MR. SMITH:  I will do that.
 5  12444                Thank you.
 6  12445                THE CHAIRPERSON:  Thank you.
 7  12446                Madam Secretary.
 8                                                        1815
 9  12447                Mme BÉNARD:  Merci, Madame la
10     Présidente.
11  12448                La prochaine présentation sera celle
12     de la Société des Auteurs, Recherchistes,
13     Documentalistes et Compositeurs, et je les inviterais à
14     s'avancer à la table.
15  12449                LA PRÉSIDENTE:  Bonjour, messieurs...
16     ou bonsoir, messieurs.  Allez-y quand vous êtes prêts.
18  12450                M. LÉGARÉ:  Madame la Présidente,
19     Membres du Conseil, bonsoir.
20  12451                Il nous fait plaisir de comparaître
21     pour vous présenter le point de vue de la SARDeC sur
22     les questions soulevées dans l'Avis public 1998-44.
23  12452                Je suis Yves Légaré, directeur
24     général de la SARDeC.  Je suis accompagné de Bernard
25     Montas, qui est auteur, membre du conseil comme


 1     secrétaire du conseil et membre de l'exécutif de la
 2     SARDeC.
 3  12453                La SARDeC est l'association
 4     représentative des auteurs de l'audiovisuel de langue
 5     française.  Les scénaristes de télévision et de cinéma,
 6     en fiction comme en documentaire, sont à l'origine des
 7     oeuvres qui ont fait le succès de la télévision et
 8     marqué notre cinématographie.
 9  12454                La télévision de langue française a
10     connu un grand succès au Canada à plusieurs égards.  À
11     l'origine de ce succès se trouve la forte présence de
12     contenu canadien dans l'ensemble de la programmation et
13     aussi dans les émissions sous-représentées qui sont
14     scénarisées, soit les dramatiques, les émissions pour
15     enfants et les documentaires.
16  12455                Mais il y a encore place à
17     l'amélioration dans notre système de radiodiffusion, et
18     nous avons identifié cinq grandes questions qui
19     méritent d'être revues dans le cadre de votre examen de
20     politiques, soit le financement de la scénarisation la
21     présence des catégories sous-représentées sur nos
22     écrans, la place de la publicité à la télévision, le
23     rôle de Radio-Canada dans le système de radiodiffusion
24     et, enfin, le financement de la production de langue
25     française.


 1  12456                On dit souvent que la télévision est
 2     un médium de scénariste -- television is a writer's
 3     medium -- et c'est vrai que l'écriture est au coeur des
 4     émissions dans les catégories sous-représentées.
 5  12457                L'écriture d'un scénario comprend la
 6     conceptualisation d'une idée, l'écriture d'un
 7     traitement, la création d'une bible dans le cadre d'un
 8     projet de série, la construction d'un scène-à-scène
 9     pour chaque épisode et, finalement, la création de
10     dialogues.  Tout ceci doit avoir lieu avant le tournage
11     de l'émission.
12  12458                Or, l'auteur est rarement soutenu
13     financièrement lors des premières étapes du
14     développement d'un scénario.  Ainsi, le système actuel
15     de financement favorise le développement de projets
16     télévisuels via les producteurs, privilégiant les
17     projets initiés par ces derniers plutôt que ceux des
18     créateurs et nuisant ainsi au foisonnement des idées et
19     aux approches nouvelles.
20  12459                Pour les étapes subséquentes du
21     développement du scénario, la part du scénariste est
22     souvent plafonnée et une bonne proportion de son cachet
23     n,est payable que lors du tournage, s'il y a lieu.
24  12460                Le CRTC peut avoir une incidence sur
25     le financement de la scénarisation.  Par exemple, dans


 1     le formulaire de renouvellement de licence du CRTC, les
 2     réseaux et les stations de télévision sont obligés de
 3     prendre des engagements financiers précis en matière de
 4     développement des émissions dans les catégories sous-
 5     représentées.  À l'heure actuelle, il n'y a pas
 6     suffisamment d'exigences de la part du CRTC à cet
 7     égard.
 8  12461                Le Conseil devrait s'assurer que les
 9     réseaux et les stations de télévision de langue
10     française contribuent leur juste part au développement
11     des projets d'émissions dans les catégories sous-
12     représentées et que les fonds de développement soient
13     disponibles aussi bien aux auteurs qu'aux compagnies de
14     production.
15  12462                Les renouvellements de licence de
16     Radio-Canada, du réseau TVA, de CFTM-TV, Télé-
17     Métropole, prévus pour le printemps 1999 fournissent
18     une excellente occasion au Conseil d'augmenter les
19     engagements à ce chapitre.
20  12463                M. MONTAS:  La SARDeC est d'accord
21     avec plusieurs mémoires soumis dans le cadre de cette
22     audience publique à l'effet que le CRTC devrait porter
23     plus d'attention aux émissions dans les catégories
24     sous-représentées aux heures de pointe.  Ceci vaut pour
25     les émissions de langue française aussi bien que celles


 1     de langue anglaise.
 2  12464                Comme nous l'avons démontré dans
 3     notre mémoire du 30 juin, sur l'ensemble des stations
 4     conventionnelles de langue française du secteur privé,
 5     la présence des émissions dans les catégories 7, 8 et 9
 6     se compare assez bien à la présence de ces catégories
 7     sur les stations de langue anglaise.  Cependant, dans
 8     son ensemble, la performance des dramatiques à la
 9     télévision conventionnelle privée de langue française
10     du secteur se porte moins bien que sa contrepartie de
11     langue anglaise.  En 1996-97, par exemple, selon les
12     données du CRTC, les stations privées de langue
13     anglaise ont diffusé une moyenne de 3,1 heures de
14     dramatiques originales entre 18 h 00 et minuit alors
15     que les stations privées de langue française n'ont
16     diffusé que 2,4 heures.
17  12465                Cette différence est attribuable au
18     très grand nombre d'émissions de variétés à la
19     télévision de langue française et à l'absence des
20     stations de TQS dans le domaine de la fiction.  Nous
21     concluons que la présence de la fiction de langue
22     française pourrait être plus importante.
23  12466                Face à cette situation, nous
24     recommandons trois changements de politique qui ont
25     largement reçu appui dans le milieu de la production:


 1  12467                Premièrement, toutes les stations
 2     conventionnelles de langue française devraient être
 3     obligées, par règlement ou par condition de licence, de
 4     diffuser au moins 10 heures par semaine dans les
 5     catégories 7, 8 et 9, ainsi que les documentaires,
 6     entre 19 h 00 et 23 h 00, en première diffusion, avec
 7     une attention particulière aux dramatiques.
 8  12468                Deuxièmement, le documentaire devrait
 9     être reconnu par le CRTC comme faisant partie des
10     catégories d'émissions sous-représentées et défini de
11     façon à permettre sa surveillance par le système
12     d'enregistrement des émissions du CRTC.
13  12469                Troisièmement, toutes les stations
14     conventionnelles de langue française devraient être
15     obligées de diffuser au moins trois heures par semaine
16     d'émissions canadiennes de grande qualité pour enfants,
17     en première diffusion.
18  12470                En somme, nous croyons que le Conseil
19     devrait porter plus d'attention aux émissions dans les
20     catégories sous-représentées aux heures de pointe, sans
21     pour autant changer la réglementation actuelle dans le
22     reste de la journée, à l'exception de celle touchant
23     les émissions pour enfants.
24  12471                Finalement, notons qu'il est
25     difficile de séparer la question des quotas et le


 1     volume du contenu canadien de la question de la
 2     définition même d'une émission canadienne.  La SARDeC
 3     privilégie un régime de huit points, tel qu'appliqué
 4     par le Fonds canadien de télévision, comme définition
 5     de base d'une émission canadienne.  Nous estimons aussi
 6     que la présence d'un scénariste canadien doit faire
 7     partie intégrante de toute définition d'une émission
 8     canadienne scénarisée qui est accréditée par le CRTC ou
 9     par le Bureau de certification des produits
10     audiovisuels canadiens du ministère du Patrimoine, avec
11     une exception pour les coproductions officielles.
12  12472                La place de la publicité à la
13     télévision.
14  12473                La publicité fait vivre la
15     télévision.  Elle est essentielle à presque tous les
16     services conventionnels et spécialisés et, plus
17     particulièrement, aux services conventionnels privés. 
18     Mais en même temps les pauses publicitaires influencent
19     fortement le format et le contenu des émissions, telle
20     la structure d'une dramatique ou d'un documentaire, par
21     exemple.
22  12474                Pour cette raison, il est très
23     important que le CRTC maintienne des balises en ce qui
24     concerne l'usage de la publicité et l'empêche
25     d'empiéter davantage sur le terrain de l'écriture et de


 1     la production des émissions.
 2  12475                Nous recommandons fortement au CRTC
 3     de maintenir le plafond du temps publicitaire à 12
 4     minutes et d'appliquer les règlements actuels.  Ceci
 5     voudrait dire que les messages publicitaires en pleine
 6     émission sous forme de textes superposés, tels que ceux
 7     de Loto-Québec par exemple, devraient être
 8     comptabilisés comme de la publicité et soustraits des
 9     12 minutes permises.
10  12476                De plus, comme nous l'avons indiqué
11     dans notre mémoire du 17 août dernier au sujet de
12     l'accréditation des émissions canadiennes, les
13     infopublicités ne font aucune contribution aux
14     objectifs de la Loi sur la radiodiffusion.  La SARDeC
15     s'oppose fermement à l'accréditation des infopublicités
16     comme émissions canadiennes.
17  12477                Nous nous préoccupons du financement
18     et du sort du radiodiffuseur public national.  Nous
19     croyons que le sous-financement de Radio-Canada
20     l'empêche de rencontrer tous les objectifs de son
21     mandat, l'induit dans des pratiques commerciales
22     inappropriées pour une télévision d'état, et nuit au
23     développement de la dramaturgie canadienne de langue
24     française.
25  12478                La SARDeC est aussi en désaccord avec


 1     l'Association canadienne des radiodiffuseurs et
 2     d'autres intervenants dans ce processus qui visent à
 3     confiner Radio-Canada dans un rôle de complémentarité
 4     au secteur privé.  Nulle part dans la Loi sur la
 5     radiodiffusion est-il question que Radio-Canada joue un
 6     tel rôle.  Au contraire, le rôle de Radio-Canada est
 7     clairement défini dans la section 3 de la Loi, que vous
 8     connaissez bien.
 9  12479                La SARDeC croit que Radio-Canada
10     devrait renforcer son rôle en tant que producteur,
11     aussi bien que diffuseur, de dramatiques, d'émissions
12     pour enfants et de documentaires de qualité.
13  12480                Plus particulièrement, le CRTC
14     devrait trouver les moyens d'encourager la SRC à
15     produire davantage de dramatiques à l'interne.  Pour
16     les auteurs, travailler avec un télédiffuseur interne,
17     que cela soit à Radio-Canada ou à TVA, peut permettre
18     une grande liberté créatrice et une pluralité des
19     contenus.  Les producteurs/diffuseurs ont fait une
20     contribution importante à notre patrimoine audiovisuel
21     et ont développé une expertise à l'interne que nous ne
22     trouvons pas ailleurs.  Il est important de renforcer
23     cette tradition, qui a grandement bénéficié au
24     répertoire dramatique et aux auditoires canadiens.
25  12481                Le financement gouvernemental des


 1     émissions et du cinéma de langue française est une
 2     nécessité au Canada.  Comme nous l'avons démontré dans
 3     les graphiques 4 et 5 de notre mémoire du 30 juin, les
 4     gouvernements canadiens contribuent environ deux-tiers
 5     du financement des émissions produites par le secteur
 6     indépendant de langue française dans les catégories
 7     sous-représentées, et plus de 80 pour cent du
 8     financement des oeuvres cinématographiques.  Sans cette
 9     aide, les émissions de télévision et le cinéma d'ici,
10     de grande qualité, ne pourraient pas exister.
11  12482                Il est important que le CRTC envoie
12     le message aux gouvernements que le financement
13     gouvernemental des émissions et du cinéma de langue
14     française demeure une nécessité pour les années à venir
15     à cause de la petite taille du marché au Québec et au
16     Canada.
17  12483                Au sujet des règles d'accès aux fonds
18     de financement de la production, nous sommes en
19     désaccord avec la SRC quand elle propose le
20     resserrement des règles du Fonds canadien de télévision
21     pour réduire la place des émissions pour enfants et les
22     documentaires auprès du Programme des droits de
23     diffusion.  Ces catégories d'émission demeurent sous-
24     représentées sur nos écrans et continuent de mériter
25     une aide financière au même titre que les dramatiques.


 1  12484                En guise de conclusion, Madame la
 2     Présidente et Membres du Conseil, la SARDeC croit qu'un
 3     rôle actif de la part du CRTC dans la réglementation du
 4     système canadien de radiodiffusion est encore
 5     primordial.
 6  12485                Ceci termine notre présentation
 7     formelle.  Nous sommes reconnaissants d'avoir eu
 8     l'occasion de nous exprimer au sujet des politiques qui
 9     régissent la télévision canadienne et il nous ferait
10     plaisir maintenant de répondre à vos questions.
11  12486                LA PRÉSIDENTE:  Merci, Monsieur
12     Légaré et Monsieur Montas.
13  12487                Vos recommandations semblent endosser
14     les recommandations de l'APFTQ qui visaient la
15     télédiffusion de langue anglaise, mais vos
16     recommandations visent le marché francophone.
17  12488                M. MONTAS:  Absolument.
18  12489                M. LÉGARÉ:  Oui.  Vous parlez sans
19     doute du 10 heures que nous suggérons?
20  12490                LA PRÉSIDENTE:  Oui, du 10 heures,
21     des catégories sous-représentées, de l'aspect
22     dramatique et de la comparaison que vous faites entre
23     le secteur anglophone et le secteur francophone à cet
24     effet, qui me semblent à prime abord un peu
25     surprenantes.


 1  12491                Qu'est-ce que vous entendez par
 2     "dramatiques" quand vous comparez la performance de la
 3     télévision anglophone et de la télévision francophone à
 4     cet effet?
 5  12492                M. LÉGARÉ:  On parle des téléromans,
 6     des séries dramatiques, et caetera.  Le problème, dans
 7     le fond, ce qui fait que les chiffres sont
 8     particulièrement défavorables au système de
 9     radiodiffusion francophone, c'est entre autres
10     l'absence de TQS dans le champ des dramatiques.  Donc,
11     si nous regardons les chiffres, au niveau des variétés,
12     dans les catégories, donc, sous-représentées, variétés,
13     musique et danse, et dramatiques, la performance du
14     système francophone semble intéressante; si on la
15     compare, c'est près de six heures versus un peu moins
16     de quatre heures pour les réseaux anglophones.  Si nous
17     allons de façon plus pointue pour les dramatiques,
18     l'absence de TQS en dramatiques fait que nous
19     descendons en bas de ce qui se diffuse dans les
20     stations privées de langue anglaise.
21  12493                De là peut-être notre suggestion pour
22     que nous passions, donc, à un 10 heures.  Déjà, dans
23     les catégories sous-représentées, le réseau francophone
24     atteint six heures ou presque.  Nous pensons qu'il
25     pourrait assurément aller vers le 10 heures, d'autant


 1     plus que, si nous regardons les saisons de diffusion
 2     qui ont servi à ces chiffres, on s'aperçoit que les
 3     saisons de diffusion de diffusions originales sont de
 4     plus en plus courtes.  Nous avons des saisons de 26
 5     semaines; l'été nous avons des reprises, des émissions
 6     américaines, et caetera.
 7  12494                Si nous regardons la performance des
 8     oeuvres canadiennes, à contenu canadien, elles sont
 9     excellentes durant l'année, les saisons automme-hiver,
10     alors que dans les 20 premières émissions on retrouve
11     toujours des émissions canadiennes, mais lorsque nous
12     regardons l'été on voit que les émissions américaines
13     reprennent le dessus parce qu'elles sont largement
14     diffusées.
15  12495                Donc c'est pour ça que nous suggérons
16     de passer à 10 heures au niveau des catégories sous-
17     représentées, et cela aurait sans doute une incidence
18     aussi sur les dramatiques, qui augmenteraient.
19  12496                LA PRÉSIDENTE:  Comment avez-vous
20     préparé les graphiques que nous avons à la page 8? 
21     J'en ai deux, moi; j'en ai un qui a été corrigé et qui
22     démontre la présence des catégories 7, 8 et 9 en 1996-
23     97 et présence des dramatiques en 1996-97.
24  12497                Je ne comprends pas très bien l'effet
25     de TQS.  Est-ce que vous avez regardé combien d'heures


 1     sont accessibles à l'auditoire?  Comment avez-vous fait
 2     vos calculs, si par exemple vous regardez ce qui est
 3     disponible comme contenu canadien et comme contenu
 4     dramatique à Montréal pour un auditoire plutôt qu'à
 5     Toronto?
 6  12498                M. LÉGARÉ:  C'est calculé à partir
 7     des chiffres du CRTC.
 8  12499                LA PRÉSIDENTE:  Oui, mais comment
 9     avez-vous... ces graphiques-là, vous les avez faits
10     vous-mêmes.
11  12500                M. LÉGARÉ:  Oui, effectivement.  Les
12     stations privées francophones sont donc le réseau TQS
13     et TVA, et les stations anglophones, c'est CTV, Global,
14     City-tv, CHCH, stations affiliées, c'est à partir,
15     donc, des chiffres du CRTC pour ces stations privées
16     francophones et anglophones que nous en arrivons à ces
17     chiffres...
18  12501                LA PRÉSIDENTE:  Et le calcul a été
19     fait comme si vous avez additionné ce qui est
20     accessible en dramatiques chez Global, City dans ces
21     heures-là...
22  12502                M. LÉGARÉ:  Et on a fait une moyenne
23     par la suite.
24  12503                LA PRÉSIDENTE:  Oui, au lieu de...
25     ah, oui.  Parce que si vous aviez calculé TVA, croyez-


 1     vous qu'il y aurait une ville anglophone où il y
 2     aurait...
 3  12504                M. LÉGARÉ:  TVA fait effectivement
 4     beaucoup plus que 2,4 heures...
 5  12505                LA PRÉSIDENTE:  D'accord.
 6  12506                M. LÉGARÉ:  ... mais le fait que TQS
 7     ne diffuse aucune dramatique fait que...
 8  12507                LA PRÉSIDENTE:  Oui.  C'est parce que
 9     vous l'avez incluse, oui.
10  12508                M. LÉGARÉ:  ... pour la disponibilité
11     de dramatiques francophones au Québec il y en a moins
12     dans l'ensemble que dans le secteur anglophone.
13  12509                LA PRÉSIDENTE:  Alors, si on
14     obligeait toutes les stations à faire le nombre
15     d'heures que vous exigez, TVA ne serait sans doute pas
16     affectée.  Probablement qu'ils seraient...
17  12510                M. MONTAS:  Probablement pas.
18  12511                LA PRÉSIDENTE:  Non, parce qu'eux
19     auraient plus de 10 heures.  C'est que là, on inclurait
20     TQS, on exigerait la même chose de TQS.
21  12512                M. LÉGARÉ:  C'est-à-dire, si on parle
22     d'un 10 heures, par la suite la ventilation avec les
23     dramatiques, là je pense que ce serait peut-être dans
24     les conditions de licences particulières ou dans les
25     attentes que ce serait déterminé...


 1  12513                LA PRÉSIDENTE:  Oui, je comprends
 2     bien vos recommandations.  C'est simplement que je
 3     trouvais assez surprenant... normalement on dit au
 4     Québec que TVA, par exemple, dans ces catégories-là,
 5     dépasse de beaucoup n'importe quelle station anglophone
 6     privée.
 7  12514                M. MONTAS:  C'est vrai qu'on a
 8     tendance à croire que, du côté francophone, il se
 9     produit beaucoup plus de dramatiques que du côté
10     anglophone et que...
11  12515                LA PRÉSIDENTE:  Non, mais c'est parce
12     que vous, vous le faites par ratio.  Si on regarde la
13     station TVA, c'est vrai.
14  12516                M. MONTAS:  C'est le nombre d'heures.
15  12517                M. LÉGARÉ:  Mais même si on regarde
16     TVA, la saison de diffusion à TVA est de plus en plus
17     vers le 26 semaines.  Or, les semaines d'été, il n'y a
18     pas une présence des dramatiques aussi forte.  TVA
19     diffuse énormément de dramatiques pendant la saison
20     automne-hiver, mais l'été cette présence-là est
21     beaucoup moins forte.
22  12518                LA PRÉSIDENTE:  Oui, ce qui est
23     l'inverse souvent des stations anglophones, qui
24     diffuseraient leurs dramatiques l'été, quand personne
25     ne regarde.


 1  12519                M. LÉGARÉ:  Les dramatiques ont un
 2     succès incontesté au Québec.
 3  12520                LA PRÉSIDENTE:  Oui, au Québec. 
 4     C'est pour ça que vos graphiques, j'étais curieuse de
 5     savoir comment vous aviez fait ça, parce que ça va à
 6     l'inverse de ce qu'on entend ou croit normalement quand
 7     on considère la performance de TVA additionnée à celle
 8     de Radio-Canada à Montréal.  Mais je comprends
 9     maintenant comment vous arrivez à ces chiffres-là.
10  12521                Quel serait l'effet sur TQS de tout à
11     coup exiger 10 heures par semaine dans les catégories
12     sous-représentées avec un accent sur les dramatiques et
13     une exigence aussi, je crois, de trois heures
14     d'émissions canadiennes de grande qualité pour enfants? 
15     Est-ce que c'est une recommandation qui serait viable?
16  12522                M. LÉGARÉ:  il faudrait regarder pour
17     chacune des demandes de façon plus particulière.  Il
18     est sûr que TQS, qui n'a aucune dramatique et qui
19     diffuse moins dans les catégories sous-représentées, la
20     commande serait beaucoup plus grande.  Il faudrait,
21     lorsque le renouvellement de licence de TQS arrivera,
22     que nous étudiions de façon plus spécifique ces
23     questions-là.
24  12523                Notre position est une remarque
25     globale sur un nombre d'heures qui est quand même, nous


 1     croyons, atteignable en général puisqu'ils sont déjà à
 2     six heures en moyenne.
 3  12524                LA PRÉSIDENTE:  Même si on inclut
 4     TQS.
 5  12525                M. LÉGARÉ:  Oui.  En catégories sous-
 6     représentées, donc les catégories 7, 8 et 9, TQS et T-M
 7     ensemble, ça donne une moyenne de 5,8 heures.  Donc ils
 8     font plus de variétés que de dramatiques, mais TQS
 9     n'aurait pas à partir de 0 pour aller à 10; TQS part
10     déjà de 6 en moyenne.
11  12526                LA PRÉSIDENTE:  Évidemment, un de vos
12     intérêts principaux... je regarde le paragraphe 24,
13     quand on considère les gens que vous représentez dans
14     l'industrie, vous voudriez qu'on hausse l'aide
15     financière directe aux auteurs et que le CRTC peut
16     jouer un rôle important à travers le renouvellement de
17     licence.
18  12527                Vous avez dans votre soumission
19     écrite, et vous avez relevé la même chose aujourd'hui,
20     que le Conseil demande dans son formulaire de
21     renouvellement ce que les radiodiffuseurs font.  Ce que
22     vous voudriez, c'est que le Conseil ait des exigences
23     quand la performance n'est pas adéquate, ce qui est
24     presque tout le temps à votre avis, et que, au lieu de
25     simplement leur demander ce qu'ils font, c'est


 1     d'exiger.
 2  12528                Comment entrevoyez-vous cette
 3     exigence?  Ce serait un pourcentage d'argent?  Quels
 4     efforts voudriez-vous que le Conseil exige dans ce
 5     domaine-là?
 6  12529                M. MONTAS:  Là, vous parlez du
 7     financement du développement?
 8  12530                LA PRÉSIDENTE:  À votre paragraphe 24
 9     vous dites:
10                            "Pour augmenter le nombre et la
11                            qualité des scénarios de langue
12                            française..., il faut hausser
13                            l'aide financière directe aux
14                            auteurs... le CRTC peut jouer un
15                            rôle important à travers les
16                            renouvellements de licence..."
17  12531                Et vous soulevez justement la
18     question 9.5 dans les formulaires de renouvellement.
19  12532                Qu'est-ce que vous entendez par "le
20     Conseil devrait exiger quelque chose à cet effet des
21     télédiffuseurs"?
22  12533                M. LÉGARÉ:  À l'heure actuelle, je
23     pense que, hormis TQS, qui devait dépenser 50 000 $ je
24     pense pour les dramatiques, il y a peu d'exigences en
25     matière de développement.  Ce que nous disons au


 1     Conseil à ce stade-ci, c'est qu'il devrait y en avoir.
 2  12534                Quelles seraient ces exigences
 3     particulières?  On se réserve peut-être la possibilité
 4     d'intervenir sur les demandes précises des
 5     radiodiffuseurs lors de leur renouvellement, parce
 6     qu'il faut voir bien sûr, si TQS doit dépenser 50 000 $
 7     en dramatiques, combien devra dépenser TVA.  On devra
 8     analyser ça par rapport aux revenus d'entreprise, par
 9     rapport aux dépenses de l'entreprise, et caetera.
10  12535                Donc on ne peut pas fixer de règle
11     globale précise qui s'appliquerait à tous présentement. 
12     On préférerait regarder lors des renouvellements de
13     licence les différentes conditions et vous revenir.
14  12536                Ce qu'on voulait peut-être ici
15     souligner, c'est l'intérêt qu'il y aurait à ce que le
16     Conseil s'occupe de la chose et pose des questions aux
17     radiodiffuseurs lors de cesdits renouvellements.
18  12537                LA PRÉSIDENTE:  Pour stimuler les
19     dramatiques, même s'il y a des exigences vis-à-vis
20     toutes les catégories sous-représentées, vous
21     recommandez que le Conseil fasse un effort spécifique
22     vis-à-vis les dramatiques.  Est-ce que vous avez pensé
23     à des méthodes, justement, des incitatifs tels que, par
24     exemple, un crédit majoré, dont on parle souvent, où le
25     calcul serait majoré quand c'est une dramatique


 1     canadienne qui est diffusée aux heures de grande
 2     écoute?
 3  12538                M. LÉGARÉ:  Nous n'avons pas étudié
 4     ce genre de disposition.  Généralement, les crédits
 5     majorés, pour nous, lorsqu'une émission est diffusée,
 6     on ne voit pas l'incidence que ça peut avoir jusqu'à
 7     présent, le fait que par exemple certaines aient un
 8     crédit de 150 pour cent.  Au niveau du système de
 9     radiodiffusion francophone, il y a un intérêt pour les
10     radiodiffuseurs à diffuser des dramatiques; je pense à
11     TVA, je pense à Radio-Canada.  Ils les diffusent aux
12     heures de grande écoute en saison automne-hiver et ils
13     les diffusent encore parce que ça va susciter des cotes
14     d'écoute intéressantes.
15  12539                Je ne sais pas si ce serait alléchant
16     pour TQS, ce genre de mesure-là.  On n'a pas étudié
17     cette question-là.  On voudrait peut-être davantage
18     revoir le dossier de TQS pour voir qu'est-ce qu'il
19     pourrait faire pour augmenter son rendement en termes
20     de dramatiques.
21  12540                LA PRÉSIDENTE:  Je crois que vous
22     endossez l'idée de l'APFTQ que les sous-représentées
23     soient aux heures de grande écoute, particulièrement
24     entre 7 h 00 et 11 h 00...
25  12541                M. LÉGARÉ:  Oui.


 1  12542                LA PRÉSIDENTE:  ... ce qui pourrait
 2     changer l'allure de la télévision conventionnelle
 3     francophone accessible au Québec assez dramatiquement
 4     si nous avions 10 heures de certaines catégories à ces
 5     heures très précises.
 6  12543                M. MONTAS:  Ce qui pourrait changer
 7     de façon dramatique, vous dites?
 8  12544                LA PRÉSIDENTE:  Non, ça pourrait
 9     changer l'allure de l'accès à la télévision.  On aurait
10     TQS qui ferait ça aussi.
11  12545                M. MONTAS:  Ça donnerait une offre
12     peut-être plus importantes dans les catégories sous-
13     représentées de contenu canadien.
14  12546                LA PRÉSIDENTE:  Et l'allure de la
15     télévision à ces heures-là pourrait changer assez
16     dramatiquement.
17  12547                M. MONTAS:  Je pense que ça la
18     bonifierait, parce qu'il y a quand même des émissions d
19     catégories sous-représentées, mais on aurait une offre
20     plus importante.  Ça bonifierait la télévision
21     actuelle.
22  12548                LA PRÉSIDENTE:  Maintenant, quand
23     vous parlez du besoin des réseaux et des stations de
24     télévision de langue française de contribuer leur juste
25     part au développement des catégories sous-représentées,


 1     c'est dans l'optique de, par exemple, obliger TQS à en
 2     faire, et caetera.
 3  12549                Vous parlez de juste part en exigeant
 4     que chaque station ait 10 heures de catégories...
 5  12550                M. LÉGARÉ:  Non.  C'était davantage
 6     mettre des fonds à la disposition des auteurs et des
 7     maisons de production pour développer des projets.
 8  12551                LA PRÉSIDENTE:  Et vous ne pensez pas
 9     que ça viendrait naturellement de l'exigence d'en
10     diffuser davantage?  Vous voudriez des exigences
11     spécifiques vis-à-vis les auteurs...
12  12552                M. LÉGARÉ:  Pour qu'il y ait des
13     fonds de développement et que ces fonds-là soient
14     accessibles aux auteurs, ce qu'ils ne sont pas
15     présentement.
16  12553                LA PRÉSIDENTE:  En revenant à la
17     fameuse question 9.5, vous voudriez que ça aille plus
18     loin puis qu'il y ait des exigences particulières à cet
19     effet...
20  12554                M. LÉGARÉ:  Oui.
21  12555                LA PRÉSIDENTE:  ... plutôt que
22     simplement une question... ou que les exigences soient
23     majorées ou plus hautes que celles que le Conseil
24     aurait pu établir jusqu'à maintenant.  Par exemple,
25     vous avez mentionné le 50 000 de TQS, qui n'est pas une


 1     juste part à votre avis.
 2  12556                M. LÉGARÉ:  Qu'il faudrait étudier;
 3     c'est-à-dire que d'autres n'ont pas ces exigences-là. 
 4     TQS avait cette exigence-là.  On ne sait pas quel est
 5     le rendement que ça a pu donner, mais d'autres n'ont
 6     même pas ces exigences-là.
 7  12557                Nous, on vous dit que dans chaque cas
 8     il faudrait voir quels sont les fonds de développement
 9     que le réseau devrait rendre accessibles.  Ça peut être
10     50 000, ça peut être davantage; ça peut varier selon la
11     situation du réseau.
12  12558                LA PRÉSIDENTE:  Est-ce que vous
13     trouvez qu'il y a trop d'émissions de variétés en ce
14     moment?
15  12559                M. MONTAS:  La question n'est pas de
16     savoir s'il y en a trop...
17  12560                LA PRÉSIDENTE:  Mais c'est qu'il n'y
18     a pas assez de dramatiques.
19  12561                M. MONTAS:  Voilà.  Je pense qu'il
20     n'y aura jamais trop d'émissions à contenu canadien...
21  12562                LA PRÉSIDENTE:  Oui, je comprends. 
22     Ma question ne vous aidait peut-être pas beaucoup, mais
23     il reste quand même qu'il y a tant d'heures entre
24     7 h 00 et 11 h 00, et il y a d'autres parties qui
25     disent justement qu'il n'y a pas assez d'émissions de


 1     variétés, et vous, ce sont les dramatiques qui vous
 2     intéressent.  Mais il y a quand même un nombre d'heures
 3     assez défini.  Malheureusement, le Conseil n'a pas le
 4     pouvoir d'allonger la soirée.
 5  12563                Alors c'est un équilibre que vous
 6     voudriez plus poussé vers les dramatiques.
 7  12564                M. LÉGARÉ:  Oui, mais c'est aussi
 8     pour contrer une tendance.  Vous dites qu'il y a tant
 9     d'heures effectivement dans une soirée, mais il y a 52
10     semaines dans l'année.  Auparavant, les contrats pour
11     une dramatique étaient de 39 semaines; l'été était donc
12     limité à 13 semaines.  Maintenant, l'été, c'est 26
13     semaines.  Pourtant, la température ne nous donne
14     pas...
15  12565                LA PRÉSIDENTE:  C'est el ni¤o, ça.
16  12566                M. LÉGARÉ:  C'est ça, probablement.
17  12567                Donc cet impact-là est important.  On
18     dirait que les saisons de diffusion de productions
19     originales se rétrécissent, et peut-être qu'il y a
20     d'autres moyens de faire en sorte qu'en bout de piste,
21     en moyenne, il y ait plus d'heures de dramatiques qui
22     soient diffusées.
23  12568                LA PRÉSIDENTE:  Vous parlez de la
24     nécessité d'avoir de la programmation pour enfants de
25     haute qualité.  Pouvez-vous m'indiquer quels sont les


 1     critères pour vous qui mesurent la qualité de la
 2     programmation des enfants?  Généralement, est-ce que
 3     vous êtes d,avis qu'en ce moment la programmation pour
 4     enfants qui est diffusée en général n'est pas de haute
 5     qualité?
 6  12569                M. LÉGARÉ:  Non, il y a des
 7     productions de qualité mais il y a aussi beaucoup
 8     d'émissions à petit budget où tant les auteurs que les
 9     comédiens que les producteurs doivent se débrouiller
10     avec des moyens très réduits.  Il y a beaucoup de
11     rediffusions aussi.
12  12570                Nous, ce que nous souhaitons, c'est
13     qu'il y ait trois heures en première diffusion dans les
14     réseaux conventionnels parce que souvent, dans les
15     canaux spécialisés, qui ne sont pas nécessairement
16     regardés par tous... il y a quand même 30 pour cent de
17     personnes au Québec qui n'ont pas le câble; donc il y a
18     des enfants qui n'ont pas accès à ces émissions, et en
19     plus ces émissions sont rediffusées constamment.
20  12571                Donc on pense que les stations
21     conventionnelles doivent diffuser des émissions et
22     doivent mettre des moyens, c'est-à-dire des budgets de
23     production adéquats pour avoir des émissions d'une
24     certaine qualité, autre chose qu'un seul comédien
25     devant un décor; donc un peu plus de moyens que ce


 1     qu'on a présentement.
 2  12572                LA PRÉSIDENTE:  En première
 3     diffusion, pour vous, c'est...?
 4  12573                M. LÉGARÉ:  C'est la politique
 5     actuelle du CRTC.
 6  12574                LA PRÉSIDENTE:  Alors vous ne seriez
 7     pas d'accord avec l'idée qu'un programme pourrait être
 8     diffusé, par exemple, sur un service spécialisé et que
 9     ce soit quand même première diffusion à la
10     conventionnelle?
11  12575                M. LÉGARÉ:  Non.  Pour nous, c'est...
12  12576                LA PRÉSIDENTE:  Même quand il s'agit
13     de la programmation pour enfants, qui, censément,
14     regardent la télévision... peuvent voir les mêmes
15     programmes plus souvent que...
16  12577                M. LÉGARÉ:  Mais on parle de trois
17     heures, donc, en première diffusion, et par la suite,
18     s'ils vont au-delà de trois heures, je pense, aux
19     canaux spécialisés pour enfants, ils vont sûrement en
20     diffuser davantage.  Mais on pense que trois heures en
21     première diffusion serait tout à fait acceptable.
22  12578                LA PRÉSIDENTE:  C'est raisonnable.
23  12579                M. LÉGARÉ:  C'est d'ailleurs une
24     exigence, je pense, qui aux États-Unis a été...
25  12580                LA PRÉSIDENTE:  Oui.


 1  12581                M. LÉGARÉ:  ... mise sur pied pour
 2     des émissions éducatives en plus.
 3  12582                Donc là, on ne parle pas d'émissions
 4     éducatives, on parle d'émissions pour enfants qui
 5     peuvent être éducatives ou ne pas l'être; ça, là-
 6     dessus, on a...
 7  12583                LA PRÉSIDENTE:  Ce qui semble avoir
 8     aidé les producteurs canadiens à vendre leurs produits
 9     aux États-Unis.
10     --- Courte pause / Short pause
11  12584                LA PRÉSIDENTE:  Voilà.  Nous vous
12     remercions, Messieurs Montas et Légaré, d'avoir débuté
13     votre fin de semaine avec nous, comme les gens qui vous
14     ont précédés.  Nous regrettons qu'il soit si tard et
15     nous vous remercions de votre patience, d'avoir
16     attendu.
17  12585                Est-ce que vous rentrez à Montréal ce
18     soir?
19  12586                M. MONTAS:  Oui, bien sûr.
20  12587                M. LÉGARÉ:  Oui, on va rentrer ce
21     soir.
22  12588                LA PRÉSIDENTE:  Bon voyage.
23  12589                M. MONTAS:  Nous vous remercions
24     aussi de nous avoir écoutés.
25  12590                M. LÉGARÉ:  Merci bien.


 1  12591                LA PRÉSIDENTE:  Nous sommes surtout
 2     reconnaissants que vous ayez si patiemment attendu.
 3  12592                M. LÉGARÉ:  Bonne fin de semaine.
 4  12593                LA PRÉSIDENTE:  Merci beaucoup.
 5  12594                Voilà pour aujourd'hui.  Nous
 6     reprendrons demain matin à 9 h 00 avec M. Baines.  We
 7     will start at nine o'clock tomorrow morning with
 8     Mr. Baines.
 9  12595                We will see you in the morning.
10     --- Whereupon the hearing adjourned at 1847,
11         to resume on Saturday, October 3, 1998
12         at 0900 / L'audience est ajournée à 1847,
13         pour reprendre le samedi 3 octobre 1998,
14         à 0900
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