ARCHIVED -  Transcript - Hull, QC - 2001/04/25

TRANSCRIPT OF PROCEEDINGS

FOR THE CANADIAN RADIO-TELEVISION AND

TELECOMMUNICATIONS COMMISSION

TRANSCRIPTION DES AUDIENCES DU

CONSEIL DE LA RADIODIFFUSION

ET DES TÉLÉCOMMUNICATIONS CANADIENNES

SUBJECT / SUJET:

BROADCASTING APPLICATIONS

TV RENEWALS - CTV/GLOBAL ACROSS CANADA /

DEMANDES DE RADIODIFFUSION -

RENOUVELLEMENT DE CTV/GLOBAL À TRAVERS LE CANADA

Transcripts

In order to meet the requirements of the Official Languages

Act, transcripts of proceedings before the Commission will be

bilingual as to their covers, the listing of the CRTC members

and staff attending the public hearings, and the Table of

Contents.

However, the aforementioned publication is the recorded

verbatim transcript and, as such, is taped and transcribed in

either of the official languages, depending on the language

spoken by the participant at the public hearing.

Transcription

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.

BEFORE / DEVANT:

ALSO PRESENT / AUSSI PRÉSENTS:

Hull, Quebec / Hull (Québec)

--- Upon resuming on Wednesday, April 25, 2001 at 0830 / L'audience reprend le mercredi 25 avril 2001 à 0830

10094 THE CHAIRPERSON: Good morning, ladies and gentlemen. Welcome to our proceeding. This is the final day of our proceeding hearing the licence renewal applications for CTV and Global.

10095 We have, I believe, nine more interventions to hear which we will hear this morning and then take our lunch break and we will hear the replies from CTV and Global to the interventions and then we will hear an intervention regarding CHUM Television's application for a Category 2 digital specialty channel.

10096 With that, Mr. Secretary, please introduce our first intervenor for today.

10097 MR. CUSSONS: Thank you, Mr. Chairman.

10098 Our first intervention this morning is Alberta Filmworks, Mr. Doug MacLeod.

INTERVENTION / INTERVENTION

10099 MR. MacLEOD: Good morning. That's not a threat, it's just early where I come from. We don't mind getting up to do this sort of work. Bonjour. I will stop there because if I continue in French I start to sound like Stockwell Day and I wont' go there either.

10100 I would like to thank the Commission for giving me the opportunity to speak this morning.

10101 I am a Calgary based independent film and television producer. Over the past decade, our company has produced over 100 hours of big budget, visibly Canadian drama and all of this work has been done in Alberta.

10102 In the last ten years, we have had the chance to work with most of the significant players in the Canadian television industry.

10103 Our company got its real start co-producing half hour episodes of "Ray Bradbury Theatre" in Calgary and Edmonton ten years ago with Atlantis and for Global. We then went on to produce six seasons and ninety one-hour episodes of the television series "North of 60" with Alliance and for the CBC.

10104 The senior executive then at the CBC who first ordered "North of 60" and continued to champion the show for all the time he was at the CBC was Ivan Fecan.

10105 In the last three years our work in Calgary has consisted of producing two or three television movies a year with licences that have come from the A-Channel, CTV and the CBC.

10106 "North of 60" became a series of highly successful two-hour movies. The CBC continues to recognize and support the value of this made-in-Canada television franchise by ordering a new movie every year based on stories that involve characters and concepts from the original series.

10107 We have done two television movies for CTV along with Ontario based partners Sarrazin Couture Productions. Two years our companies produced "The Sheldon Kennedy Story" based upon the real life story of Canadian hockey player Sheldon Kennedy who was sexually abused by his junior hockey coach.

10108 Our second project with Sarrazin Couture for CTV was "After the Harvest" based on Martha Ostenso's classic Canadian novel entitled "Wild Geese". This story, which explores the dark secrets of two generations of a Canadian prairie farm family, went to air on March 4 of this year.

10109 Our third television movie with CTV is based upon the Ian Adams novel "Agent of Influence". Ian is writing the script, which explores the story of Canadian ambassador to the Soviet Union John Watkins, who died under sudden and mysterious circumstances in Montreal in 1963. "Agent" is a project we hope to produce in Calgary and Montreal this coming fall with our Montreal based partners at Galafilm.

10110 So, does CTV support high quality Canadian drama? Absolutely. Does CTV provide a platform for regional stories and producers? Without question. Three of CTV's nine television movies this year are to be produced in Alberta as well as another in Winnipeg and perhaps another in Halifax, if they can be financed. I will return to this in a minute.

10111 Has CTV helped develop and support a stronger Canadian talent pool? Emphatically, yes. Both "The Sheldon Kennedy Story" and "After the Harvest" were written by Suzette Couture who is one of this country's truly great screenwriters.

10112 "The Sheldon Kennedy Story" was directed by Winnipeg-based Norma Bailey. Her sharp director's eye caught a reading on a Vancouver casting tape. With absolutely no previous formal acting experience, a young man by the name of Noel Fisher was cast to play the extraordinarily challenging role of the young Sheldon Kennedy.

10113 Noel Fisher celebrated his fifteenth birthday on the set of "The Sheldon Kennedy Story". Six months later Noel was nominated for a Gemini Award for his performance along with three other members of our cast. Jonathan Scarfe won the Gemini for his portrayal of the adult Sheldon Kennedy. And while Noel Fisher and our other nominees didn't win in their categories this time, they will be back at the Geminis again.

10114 Is CTV interested in building audience for high profile Canadian programming? Absolutely. CTV's promotion of our movies is done on a timely, well organized and aggressive basis. In fact, we think they are getting better and better at it, so we are extremely pleased with both the support and the audience ratings our shows are getting on the network.

10115 CTV has been a great partner in very challenging circumstances. However, as we move forward, I would like to articulate some of the particular problems and challenges small companies like ourselves face in the current production environment.

10116 The amount of visibly Canadian prime time big budget drama being produced in this country is declining rapidly.

10117 Significant consolidation has taken place in the Canadian distribution industry in the last several years. There are now far fewer players in the game and there is less competition for product. The situation is not unique to Canada. This type of consolidation is happening on a global basis.

10118 All of this is taking place at a time when foreign markets, once significant consumers of Canadian television product, particularly one-hour continuing series, are now producing their own product.

10119 Our company in doing the work that I have noted over the past ten years has remained completely independent. We are independent in the sense that we are now owned by nor do we own any broadcast assets or distributive capacity.

10120 We are non-aligned. We are not affiliated. We are a SME production company, small and medium sized enterprise with particular emphasis on the small. And in this way, we are remarkably similar to several hundred other independent production companies in this country.

10121 These same small production companies now face a range of problems which threaten our collective capacity to produce prime time visibly Canadian dramatic programming. There are a number of reasons for this situation.

10122 In the past several years, Canadian producers have faced huge additional costs as a consequence of the extraordinary amount of time it now takes government agencies to act on their commitments to provide the documentation necessary to complete and close project financing. These are administrative delays over which the producer has virtually no control.

10123 This situation is now compounded by the fact that not every visibly Canadian project ordered by a broadcaster can be financed. A network licence commitment until quite recently was a virtual guarantee that a small company could find the rest of the financing necessary to produce and deliver a show.

10124 This is no longer the case. A network licence commitment made to a visibly Canadian project is now basically an opportunity for the small producer to join a lottery and neither the broadcaster nor the producer has any real control over the outcomes.

10125 What are the implications? The "North of 60" franchise may be dead. Telefilm does not have the resources to participate in the "North of 60" movie that CBC ordered this year.

10126 "Agent of Influence" is threatened for the same reason. Projects are beginning to fail all across the country simply because the capacity of Canadian broadcasters to write the television licences now far outstrips the capacity of the rest of the system to provide the balance of the required financing in an orderly and predictable fashion.

10127 These shows are supposed to be the flagships of the Canadian prime time schedule and we are threatening to sink these shows with torpedoes that are coming from within our own system.

10128 I like to think of the cultural ecology of the television business in this country as being made up of a few tall trees. If the tall trees are BCE/CTV, AAC, WIC/Global, the CBC and perhaps the Craig/CHUM alignment, then we small producers make up life on the forest floor all across the country.

10129 If we kill all the life on the forest floor by strangling small producer cash flows while we let new shows die, then the only things left in the forest will be in the strong branches of those tall trees in Toronto.

10130 We are not giving up on any of our projects this year. In the case of "Agent of Influence", we are rolling up our collective sleeves and we are going to continue to work to make this show happen.

10131 The CTV understands the very unique challenges that are specific to producing indigenous drama. It's a costly and it's a time-consuming process. We and the network have got far too much invested in the process to let "Agent" die now.

10132 We have found ourselves in this situation before with CTV and they have done some pretty extraordinary work to help us make our shows happen. This is a great team and we are happy to have them on our side.

10133 Thank you.

10134 THE CHAIRPERSON: Thank you, Mr. MacLeod.

10135 It sounded very positive at the outset but quite ominous at the end. To pursue that, I will turn to Commissioner Pennefather

10136 COMMISSIONER PENNEFATHER: Thank you, Mr. Chairman. Good morning, Mr. MacLeod.

10137 MR. MacLEOD: Good morning.

10138 COMMISSIONER PENNEFATHER: I'm sorry, good morning, Mr. MacLeod.

10139 MR. MacLEOD: Indeed.

10140 COMMISSIONER PENNEFATHER: Well, I think I will start with your presentation this morning and your comments on what's happening for small production companies.

10141 Could you elaborate in fact a little more on your comments about the torpedoes that are coming at us from within our own system? I'm interested obviously in where you see some solutions, particularly those solutions that relate to the broadcasters because obviously that's the first step, certainly for the regulators, to look at the broadcast system and what in fact could be done in your view.

10142 MR. MacLEOD: Well, first of all, I mean producers by nature have to be optimistic. While my comments may seem ominous, they are not negative. Really I guess it's a call to action.

10143 There has been another form of fragmentation in this country. When I started to work on "North of 60", and I have talked to a number of other producers about this at the same time, we had three or four moving parts in a financing plan. These were all the elements we needed in order to complete the financing on a show.

10144 There are now anywhere from six to 12 moving parts. There has been an erosion in the value of any single contribution, so we are now in a position where we have to do an enormous amount of work to stitch together the components that we do need to complete a financing plan. What we lack now in this country is internal consistency in that process.

10145 As I suspect a consequence of hearings like this, commitments have been made, resources have been side and believe me, that's welcome, but those resources are sometimes operating in isolation from the objectives of some of the other resources that are available in this country.

10146 When I talk about the specific torpedoes, I guess we are victims of our own success, particularly given the fact that the number of licences that now have be certified by federal agencies, CAVCO, CRTC particularly, the delays are causing huge problems.

10147 The delays in getting the paperwork mean that you can't close your bank financing. Therefore, you are paying interest costs that you didn't anticipate having to pay. You will remember my opening remark was that producers by nature are a positive lot. We always hope that we will get the money quickly. The banks are much more prudent in understanding maybe the natural cycles and it's taking a whole lot more time for us to get out from underneath these credit facilities and that's money that's not going on the screen.

10148 We are basically helping to frankly underwrite the profits of Canadian chartered banks. That's not something we intended to do when we started this process.

10149 COMMISSIONER PENNEFATHER: If I understand you then, it's a fragmentation of the decision-making process, the delays in the decision-making process because, if I understand you, you are also saying that the resources put at your disposal by broadcasters either through commitments, licence renewal benefits are there, but they may not in fact go anywhere if the system itself is not able to put all these pieces together. Is that what you are saying?

10150 MR. MacLEOD: Yes. That's exactly correct.

10151 COMMISSIONER PENNEFATHER: Let me move on then. That's very clear. My concern is are you concerned that in effect these resources then are at risk because of this? Do you feel that perhaps there will not be the same interest in pursuing activity with independent producers if it becomes difficult to guarantee a licence? You say it is not a guarantee that a project will go forward.

10152 What do you think the effect of that will be in the long term if things stay as they are?

10153 MR. MacLEOD: It's extremely important for the independent production sector to find or help work on finding some alignment in the system in terms of making sure those other resources fit together.

10154 We lack in this country for some reason a sense of that sort of larger picture. I don't know who is responsible for looking at it, an overview, and maybe it's all of us. Maybe it's just a working group of all of the stakeholders who get together and go "You know what? We are generating too much friction and heat in this process, so let's just do a page one review of how all these other components work and how they fit together and what our objectives and priorities are now in terms of the evolution of broadcasting in this country".

10155 None in my view of what's happening now really reflects a rapidly changing reality. We are dealing with components that were put together and worked fine five years ago, but don't work nearly as well any more.

10156 We are also dealing with rapidly changing market conditions outside of Canada. There has been a huge shift in the value of cultural product, frankly, as a commodity for export purposes. I mean these changes have gone on as rapidly as the changes that have afflicted Nortel and JDS.

10157 We are reaching a point I think -- this is my opinion -- where visibly Canadian high profile dramatic programming like we do is going to have to be financed completely internally, using resources within this country. Right now we can't do that. We are going to have to figure out how to do that.

10158 COMMISSIONER PENNEFATHER: Will they have to be financed internally in this country -- why exactly?

10159 MR. MacLEOD: Because I don't think you can reliably value future receivables in terms of distribution now, a visibly Canadian product. What we are finding is the more appeal the product has in Canada to Canadian audiences, the less apt it is to travel.

10160 We found this with "North of 60", we found this with the new series we are developing with the CTV which is unabashedly, unashamedly set in Calgary, embraces Calgary the city as a character in the story. We are being told by sales companies domestically and internationally "You know, we love the writing but change it to Denver and we can sell this".

10161 COMMISSIONER PENNEFATHER: This is not a new problem.

10162 MR. MacLEOD: No, no, but you know, in an environment where distributors have more choice, where major markets like Germany are now producing projects for their own audiences, you know, and in fact they are shooting in English and dubbing back into German in certain cases and then taking their English language product and putting it out into the world marketplace in competition with the work we are doing.

10163 There's a flood of material out there and values are going down significantly, so you can see certain patterns to the kinds of television product, even that's made in this country, that I view predominantly for export purposes vis-à-vis what we do which is programming made for Canadian audiences which is so clearly a reflection of what this country is and who we are. It basically is stopped at the border from a value perspective.

10164 COMMISSIONER PENNEFATHER: If we take another look at your point and look at it positively in terms of the Broadcast Act and the fact that we are looking for programming that does reflect this country to itself, granted you have discussed that in terms of problems for international markets.

10165 However, for the internal consumption of the product for Canadians, there is an area we have been discussing throughout this hearing and I wanted to have your thoughts on regional reflection.

10166 You are a longstanding producer from Alberta. You mentioned the comparison you make between yourself as a small company and others across the country. As you know, we have discussed and we have asked the question what mechanisms should be in place that are not there or that could be improved to assure that production that's on our screens does reflect the country because it comes from producers from across the country.

10167 Do you have any comment on the approach that CTV or Global are taking to regional reflection and what do you suggest are the mechanisms that would assist in assuring that future programming over the next few years does reflect the country?

10168 MR. MacLEOD: Well, the Commission certainly held broadcasters' feet to the fire in this regard. You know, we thank you for that. There are probably -- unlike ten years ago when we started doing the series in Calgary, there were huge objections to the notion that we could in fact even do a television series in Calgary.

10169 "North of 60" started as a pilot. There were serious efforts given to, you know, doing a location study on the Scarborough Bluffs. I'm absolutely serious. The view was that this show should be done in Toronto because it was close to resources and this sort of thing. At least it was still being -- that sort of things was still being considered, seriously considered.

10170 There are now 10 or 12 cities in this country where you can produce a prime time dramatic series. This is a remarkable evolution. This is a fairly unique set of circumstances. When you think about other markets, even in the U.S., France, Germany, we have done extremely well and you folks have done extremely at acting as a centrifuge if you like, sort of infusing the sensibility across the country.

10171 What we are finding now is the broadcasters are taking steps to ensure that people in those regions outside of the centre have access to individuals and processes that they didn't have before.

10172 I talked to a producer who had received a CTV television movie licence. I said "Oh, you are dealing with, you know, Bill and Tech in Toronto" and this individual said "No, no, I have never -- I have not had any contact with them. I'm dealing with Louise Clark out of Vancouver".

10173 I'm thinking "Holy mackerel, things have changed". Things have changed when the regional director for CBC in Alberta jumps out of a cab and runs into our boardroom for a meeting with some entry level producers from the community who had wanted to meet and discuss ideas. This is certainly some of the work we do, mentoring in the regions with younger people, new producers as well.

10174 In NaCom with these people, they draw us into the discussion. In other words, we haven't initiated it any more. They have initiated it. So I'm starting to see the results of a process in which I think the broadcasters are genuinely interested in good stories. I think they have a genuine concern for finding those good stories right across the country frankly.

10175 When I talk to, you know, producers in Halifax with a licence or Montreal or Toronto or Calgary or Vancouver, I'm starting to see a fair range of reflection in terms of our stories now.

10176 COMMISSIONER PENNEFATHER: But on a going forward basis, the producers association have indicated that it isn't good enough, that there have to be specific quotas. Other intervenors have said in fact less regional programming, more focus on drama.

10177 Is it your impression that this will continue and, if so, what guarantees do you have, what guarantees do you think you need to assure this continuing activity across the country?

10178 MR. MacLEOD: I'm sometimes at odds with our own provincial producers' association in that I'm not much of a believer in envelopes. Maybe that's easy for me to say because we have had an extraordinary amount of good fortune working in our corner of the world.

10179 I don't know how you impose quotas on -- it's good art. It comes from everywhere. I think what you have to make sure is that you have a broad enough grasp as a producer as well as a broadcaster in terms of making sure you don't miss a good opportunity, a good story, a good script, a situation that might lend itself to telling a good story.

10180 Yes, I'm seeing on the broadcasting side a lot more awareness of what it takes in the way of a commitment to resources and time and energy. I mean it's not an easy business and it's not an easy process. You know, we have all sort of heard the stories of the stack of a hundred scripts and there's one or two or three gems in it, but you have to put a lot of time into this process.

10181 I'm seeing networks, certainly CBC, CTV, devote a whole lot more time and energy and more people to reading material and turning around. In other words, giving us some feedback on whether or not they are interested in proceeding. That's extremely important.

10182 Yesterday the Writers Guild in their intervention characterized themselves as being the canaries in the cage. Well, I guess if anybody is holding the cage, it's somebody like me, you know. We are very close to that process.

10183 We often are the interface between writers and a network. In certain cases the writers can go directly to the network and we may get involved, but yes, there's no -- it's difficult to impose a structure, a regimen or an order I guess is what I'm saying on this process. I think it's really -- you have to look at the number of people and the amount of time and money that any organization is willing to devote to that process.

10184 COMMISSIONER PENNEFATHER: Thank you very much for your intervention and comments. They are appreciated.

10185 MR. MacLEOD: You are very welcome.

10186 THE CHAIRPERSON: Thank you, Mr. MacLeod.

10187 MR. MacLEOD: Thank you.

10188 THE CHAIRPERSON: Mr. Secretary.

10189 MR. CUSSONS: Thank you, Mr. Chairman.

10190 I would now like to invite Ms Vicki Gabereau to come forward and present her intervention, please.

INTERVENTION / INTERVENTION

10191 MS GABEREAU: Oh, God, it's lonely up here.

10192 Good morning, Mr. Chairman and Commissioners. I think it's a pleasure to be here. This is unnerving as I look like a prelate. I am not here to preach to you. I am here to talk about my relationship with the network for whom I work. It's kind of an odd thing to be under contract to a company and then I guess speak on their behalf, but it was my pleasure to agree to it.

10193 So 15 years ago I started doing a radio program in Vancouver. Gee, I guess it's even longer than that now. Every day I would say "Coming to you from Vancouver" and never did anyone ever realize that show came from Vancouver. Every day I would say it and I would meet people and they would say "Of course, you do your show in Toronto".

10194 It was always a puzzle to me why they didn't either hear it or understand that a show could come from Vancouver.

10195 When I moved to television, it became abundantly clear that that show came from Vancouver. It couldn't miss it. The shots out the window were all out of Vancouver. It was a Vancouver-centred show and it was one of the very rare birds on the television firmament.

10196 When you produce a show in Vancouver, naturally you are going to want to have guests that come from the region. For many years trying to get any kind of a program, any kind of a story on the air from Vancouver unless it was utterly sensational, was practically impossible.

10197 The argument was "Does it appeal to people in Halifax?" Why does Halifax become the benchmark is a puzzle to me, but it does. "Will it interest people in Montreal?" We love Halifax. They have the same thing only reversed, don't they, sir?

10198 "Is it of national interest, this man in particular, a deep sea diver who is a recoverer of bodies from the ocean?" "Why will this story have any appeal?" I would have to admit for many sessions I have to really fight for that kind of story to get on the air because there was some notion that it did not appeal to anyone outside of Vancouver.

10199 Well, of course that's now baloney. Every day I do stories. I do three stories a day. Generally one is a national story, one is a local story and it's either a foreigner, i.e. an American or English person. That's how the show is divided up. A good two-thirds Canadian I would say.

10200 I think one of the most remarkable things that I have noticed when you look at our numbers, and I don't look at ratings from a financial point of view, but I look at them to see how many people are watching what particular shows because that's what interests me.

10201 The highest rated programs are those that deal with Canadian stories. They are not necessarily the movie stars or the big stars although Jan Arden is a guarantee because she always says something so outrageous that the phones all light up and, of course, that's what we want, but in the neighbourhood of 300,000 people on one airing of that program of Jan Arden want to see what she has to say and Dee wanted to see the two of us interact.

10202 It really is a thrill for me to be able to work on a program that is so concentrated on developing the Canadian star and that was part of the list of requirements for this program when I started it four years ago. Frankly, I thought it was quite brave because Vancouver, the second stringer, the bencher, the backwater, nobody comes here, who gives a damn, it rains all the time, movie starts want to go back to California, all of that baloney.

10203 Well, as it turns out, publishers, for example, now bring their writers to Vancouver so they can have access to a network program. It didn't happen overnight. It's still not exactly as I would like it, but there is no doubt that people come on purpose to Vancouver.

10204 When films are shooting in Vancouver, they make a point of coming on the show because they know they have access to the rest of the country. Had their not been some boldness on the part of CTV in first of all going with me, for which I am eternally grateful because very often women over 50 don't get a chance to start a new career and I was given that opportunity. As far as I'm concerned, it has worked out rather well considering we beat that Rosie person quite a lot.

10205 When you look over the history of what has been produced in Vancouver, we see a couple of song and dance shows, "Beachcombers", a couple of talk shows that were never even close to being live, that were done five in a row and done in a month and a half.

10206 It's really a great feeling to get an e-mail from somebody in Cape Breton saying that they had responded to a show on brain damaged children or they respond to something funny that has happened on that show and it happens that very day.

10207 You know you are spreading a word from another point of view that isn't Toronto, not that I mind Toronto, but they do talk funny. I mean they do have a different accent. I think it's kind of nice to hear a Vancouver and a British Columbia accent whatever the background of that accent might be coming across the airwaves.

10208 I'm really very proud to work for CTV because when I worked at CBC it was not going to happen, a television show of this nature, as far as I could tell.

10209 We do 151 shows a year. That's a lot of volume. It doesn't have as many guests as "Canada AM" but volume ceased to be our concern, meaning that we used to do five and six items on a show. It was like a treadmill. They would come in and you would say "So, you do what? Thank you very much. You're gone". Now there is an opportunity to speak to people for longer.

10210 Only a couple of weeks ago a show to which we had really an enormous reaction and particularly a Vancouvercentric item, a woman who was bearing a child for her best friend. This got covered in all the newspapers and it was really a tremendous story. It originated there. For that we were very proud.

10211 I think when this station, also known as VTV which is Violence in Vancouver, opened its doors in a building that was opened in the fifties, and I happened to be there the day that it opened because it was a ribbon cutting. It was the old library. It was the centre of town.

10212 I think people thought that management was crazy to open a station in that spot where there was no parking lot and where would the trucks go and all this, but it has turned out to be an extraordinary location.

10213 People walk by, they drop in, I mean the numbers of people that come to my show -- well, they used to be press ganged because they didn't know that the show was on upstairs. In fact, our warm-up woman used to go out on the street and say "Would you like to come to a television show?" and of course they thought she was crazy.

10214 Now people call, they want to come. We have in excess of -- it's a very small space. Eighty to 85 people a day come to see that show. They come from all over the country. A good half of the people are on holidays and they make it a destination to come to show.

10215 Had this show not existed, I don't know where they would go. They wouldn't have a show to go to, which is the point. They wouldn't have this kind of destination. They wouldn't understand that they could go to VTV.

10216 Schools come in large numbers which is really a great pleasure. Then they have a tour of the station. They really find out what's going on and how a station really works.

10217 I make it a point, as do my crew -- that we are 35 that produce this show. Half of those people produce two other shows as well, so we are talking about camera and crew. A lot of people have work because of this program.

10218 We talk to a lot of local writers, writers that would not necessarily get the national stage, to athletes and all manner of musicians -- every musician in the country practically, except from Gordon Lightfoot and Bryan Adams have been on the show. We have bands all the time. Kids, young guys, old guys from every kind of background, pipa players, hodham players, tin whistle players, you name it. If they can carry a tune they get to be on the show -- well, maybe.

10219 I will tell you just one story from about a week and a half ago. Am I up? Am I going to ding now?

10220 There is a place in Vancouver Avalon which is a respite place for women who have had alcohol or drug addiction problems. They are either in rehab or they are part of rehabilitation and I had two women on, and this was a particular story that was considered to be too local. We had literally hundreds of calls from people across the country wanting to know how they could establish such a set up, what would it take, and to me that was gratifying.

10221 So in the next year -- this is the fifth year now -- I'm hoping that we can take the show on the road rather than being right from Vancouver, that we can take some acts from Vancouver maybe and maybe go back to Halifax where we had a very successful week-long run. I keep rubbing that in, don't I. Well, it wasn't my intention. I gather you are from Halifax.

--- Laughter / Rires

10222 I have to start asking a question soon because I'm going crazy here in this position. It's a very uncommon position for me to be in, just blathering on as I am sure you are surprised to hear.

10223 I have nothing really further to add other than saying if it had to been for this network, for Ivan Fecan and Susanne Boyce this show would have never come out of Vancouver, "Mason Lee" wouldn't have happened, "First Story" wouldn't have happened, "Double Exposure" wouldn't have had that exposure -- I'm probably missing somebody. There is a three-hour "Breakfast Show" in Vancouver. It is very a very exciting spot in Vancouver.

10224 If it hadn't been for these people and the commitment of this network, God knows what we would all be doing. What I really look forward to is the expansion of this station in the rest of British Columbia so that the other happy citizens there can get a look at us because I think we look pretty good.

10225 I rest my case. Amen!

10226 THE CHAIRMAN: Well, thank you for your case, Ms Gabereau. You are welcome to come and visit us in Halifax any time.

10227 MS GABEREAU: Thank you so much.

10228 THE CHAIRMAN: I think my colleague, Commissioner Cardozo, has a few questions.

10229 MS GABEREAU: Oh, dear!

--- Laughter / Rires

10230 COMMISSIONER CARDOZO: Thank you, Mr. Chair, and I mean thank you. It looks like I got the short straw here today.

--- Laughter / Rires

10231 MS GABEREAU: Now that is a rewarding thought.

10232 COMMISSIONER CARDOZO: You see the thing is I was tossing and turning all night thinking. We really quite enjoy the intervenors, not that we don't enjoy the applicants --

--- Laughter / Rires

10233 But it's sort of pretty tough going with them, you know. You are really talking facts and figures, what they have done and what they intend to do. With the intervenors we get more the real life of what is going to be like on the screen and people's views, people's thoughts, the human side of it, and all that, a bit more subjective. And I thought I have to ask a few questions to Vicky Gabereau. What if she says, "That's a really dumb question, I would never ask a question like that". And what if you froze when I  asked you question and said, "I don't answer questions, I only ask them".

10234 So you sort of gave me a hint that you are not really used to blathering on, but I am going to ask you to blather on a bit more.

10235 From what you are saying, I gather that your show, on the one hand, it's a regional show and that is Vancouver-centric, but it's national not just because you have national stories, but the Vancouver stories are also national stories.

10236 Is that one of the benefits of having shows that are based outside the great City of Toronto?

10237 MS GABEREAU: Well, you know, when I was given a list of things that I might address, when I was given some suggestions by my colleagues, not necessarily here today, one of them was, while your program originates from Vancouver, just the notion of even though it comes from Vancouver, can you possibly relate to the rest of the country? It's just hate idea that maybe you can't really get a cappuccino in Vancouver, that nothing really happens in Vancouver, that it's sort of a -- we have been given a kind of licence to play for a while, but we really don't compute. We are not really Toronto even though we can do fine programs. But yes, I do think we relate to the rest of the country.

10238 What was the question?

--- Laughter / Rires

10239 COMMISSIONER CARDOZO: It was that first thing, you kind of put it differently, the one about, "Oh, that's a really dumb question", I guess is what you basically said.

10240 MS GABEREAU: No, there are no dumb questions. There are only silly answers.

10241 COMMISSIONER CARDOZO: Your show is produced by Agincourt Productions. I just want to try and fit some of the things that you are dealing with into some of the issues we are dealing with in the whole application renewal issue.

10242 You show is produced by Agincourt Productions which is affiliated to CTV and I guess one of the big things that people have -- a lot of the independent production folks have been talking to us about is ensure that the broadcasters buy stuff from independent producers.

10243 Do you feel, your show being done by a sort of in-house production company, whether there is any less creativity? Would you have a different kind of show if your producers were completely outside CTV?

10244 MS GABEREAU: Are you asking if, let's say, I owned the show?

10245 COMMISSIONER CARDOZO: Sure.

10246 MS GABEREAU: Well, it has cross my mind, but as far as I am concerned I am part of the CTV family. I am contracted as opposed to being an employee, but if I do still have a contract with Agincourt -- and that's a question I will be asking somebody soon -- as far as I am concerned my contract is with CTV.

10247 COMMISSIONER CARDOZO: Yes.

10248 MS GABEREAU: The production company as it is is CTV. They hire the crew, they pay. The budget is theirs and I as a host am contracted to deliver the goods -- good or bad.

10249 So as far as my relationship with Agincourt, it is non-existent really. I would love to produce my own show as a matter of fact. Now that we have got them here, let's ask them.

10250 COMMISSIONER CARDOZO: Unfortunately, that is not part of what we are dealing with here, but go ahead.

10251 MS GABEREAU: I was thinking of your future, that's all.

--- Laughter / Rires

10252 COMMISSIONER CARDOZO: In that case, let's keep talking.

10253 But let's say your show was produced by a totally independent company.

10254 MS GABEREAU: Yes.

10255 COMMISSIONER CARDOZO: Let's call it Robson Productions and Robson Productions pitched that through CTV.

10256 MS GABEREAU: Yes.

10257 COMMISSIONER CARDOZO: Would it be a different kind of show? What I am talking about is the whole notion --

10258 MS GABEREAU: Yes, it would be cheaper.

10259 COMMISSIONER CARDOZO: Okay.

10260 MS GABEREAU: It would be cheaper because you wouldn't have the infrastructure from which to draw. I mean, it's not exactly the same thing as dealing with -- we don't have a huge library, let's say, we don't have a huge resource bank.

10261 If I were the production company, or this aforementioned production company, I would even have fewer resources at my disposal safe for the Internet and the library. But when you have an infrastructure, the financing of the legal department, all of those areas, and just hate back up of producers and crew. I mean, crew is not the biggest problem, but everything is sort of taken care of from my perspective. I would be a blockhead to produce this myself at this stage because it would be a hideous expense and I don't think you can get the money back for it.

10262 COMMISSIONER CARDOZO: In terms of the issues you cover, the ideas you have, the stories you want to deal with, does being part of the CTV family slow you down in any way as oppose to if you were this independent little company?

10263 MS GABEREAU: No. I have never been edited in any way. I think at first there was concern that I was going to be sued all the time. Well, I have never been sued and I think that the people that I work for directly were overly cautious at first, and had it been my own production company, it would have been my own neck.

10264 There is no difference. I am not edited in any way. I can do any story I want. My name is on the cupcake and I take full responsibility for what I say even though they pay me. I feel as if it's my show and they can't have it.

10265 COMMISSIONER CARDOZO: And this world of consolidation with the Globe and Mail getting together with CTV, you feel free to be able to explore that issue, pro and cons of consolidation, or having somebody from the other newspapers on?

10266 MS GABEREAU: All they can do is fire me.

10267 COMMISSIONER CARDOZO: But if you did that -- I don't want to get to that point --

10268 MS GABEREAU: No, but you know what I mean.

10269 COMMISSIONER CARDOZO: If you did that, you don't feel you would be in any way --

10270 MS GABEREAU: I have never felt compromised but mind you I don't do a lot of political stories. I'm more of a song and dance person. I do vaudeville, I do interviews on the side. I'm a coward so they don't have too much to worry about. I mean, I have been known to put my foot in my mouth, yes, and I don't get in trouble -- so far.

10271 COMMISSIONER CARDOZO: Okay.

10272 You talked about some of the shows that VTV is running and that are doing very well.

10273 MS GABEREAU: Yes.

10274 COMMISSIONER CARDOZO: Some of their producers have been saying to us that we should press the broadcasters to do a guaranteed amount of production in the west because far too much gets done in central Canada. They have been suggest sort of three out of eight hours formula.

10275 Do you have any thoughts about that? Do we need to push broadcasters beyond where we are going now?

10276 MS GABEREAU: Well, first of all, I don't really agree with the idea of forcing anybody to do anything, but on the other hand I do know that in this industry if there had not been a gun to the head of many broadcasters there would have never been a Canadian disc ever played on the radio, et cetera, et cetera, and that it's a lot easier to just buy foreign stuff and put it on the air.

10277 But you know what? I think that those days are passed, and if I know we are still in the situation where there is a regulatory body, and for that we are grateful, but I think that if there is a profit, and if people watch it, then it behooves anyone to produce it.

10278 Therefore, if there is a motivation above and beyond a small-calibre handgun to your head, then I think that broadcast systems will produce. Well, maybe right now you have to say it has to be a demand, but I do think it's still treating people as if they are adolescents.

10279 I mean people watch my show because it's there and it wouldn't be there if it weren't working.

10280 COMMISSIONER CARDOZO: Would it have gotten there if there hadn't been a certain push -- we weren't talking three out of eight then, but --

10281 MS GABEREAU: Yes.

10282 COMMISSIONER CARDOZO: Once you are on the air, there is no question it's a great show, but do broadcasters need to be prodded to think about that kind of show or to do "Double Exposure" --

10283 MS GABEREAU: Yes, I think they have needed to. I am not so sure when you see the results that things actually do work, that you can money, and you can have a successful show. Maybe at a stage it was required. I'm not in a position to say whether it should still be there. I'm not sure about that. But if things work, why kill them?

10284 COMMISSIONER CARDOZO: Well, those are my questions. I don't know if you give out buttons that say, "I survived Vicky Gabereau", but I will be happy to take one.

--- Laughter / Rires

10285 MS GABEREAU: Well, you know, as it is really my field to answer questions, it has made me really a kind of wreck to have been here, but it's better than Nuremburg.

10286 Thank you very much for hearing my plea.

10287 THE CHAIRMAN: Thank you, Ms Gabereau. Speaking for the Maritimes, it was "right somethin' nice" having you here.

--- Laughter / Rires

10288 MR. CUSSONS: Mr. Chairman, we will now hear an intervention on behalf of the University of British Columbia, Ms Donna Logan.

INTERVENTION / INTERVENTION

10289 MS LOGAN: Good morning, Mr. Chairman and Commissioners.

10290 My worst nightmare is to follow Vicky Gabereau at any kind of presentation. I'm a victim of scheduling.

10291 My name is Donna Logan and I am the Director and a professor at the School of Journalism at the University of British Columbia.

10292 I teach a course in investigative journalism and my research specialty is new media.

10293 Until three years ago, I worked as a journalist and journalistic executive, first in print, then in radio and finally in television.

10294 Conversation is therefore something that I take a great of interest in and have followed closely. I have also followed closely the discussions taking place in this room over the last week and a half.

10295 My conclusion is that if this hearing results in the imposition of the TQS code on the applicants before you, the consequences for those companies and for journalism in this country will be dire. Imposition of this code will have the following results.

10296 Number one, it will leave Canadian media companies at a competitive disadvantage in the international race for audiences.

10297 Number two, it will leave Canadian journalists at a competitive disadvantage because they will be prevented from using the new storytelling techniques that make use of all forms of media.

10298 Number three, it will perpetuate the myth that we have sufficient diversity of voices at present and prevent genuine new voices from developing as a result of a convergence.

10299 And number four, it will mean that more quality investigative journalism, which is sadly lacking in this country, will not happen.

10300 Let me deal briefly with these points one by one.

10301 I have been struck by how little attention has been paid in these hearings to the tremendous change that has taken place over the past few years in the way that people actually acquire their news and information. And second, how little attention has been paid to the fact that it is this trend that is actually the driving force behind convergence.

10302 News-on-demand may not be a full technological reality, but I am convinced the appetite for it already exists. For most people, the pace of modern life is such that they want their news and information when they want it, not when some television or radio station decides they should have it or when some newspaper decides to deliver it to their doorstep.

10303 This recognition is what has driven most television stations and newspapers to create Web sites. This development has not been driven by profit motives. In fact, we have heard often this week that most people are still struggling with how to make money providing online service.

10304 At first newspaper Web sites were static. The day's newspaper was thrown up and left to sit there until the next day's edition was ready. It quickly became evident that this was not enough, so newspaper started to update stories during the day. Soon, it was evident that more was needed -- streaming audio and video.

10305 Canada has the highest rate of high-speed connections in the world and it is growing exponentially. The number of people turning to the Internet first for news is growing rapidly. Hardly any of the students in the graduate program in journalism at UBC rely on newspapers as their primary source for news and information. I was alarmed by this at first, but I soon realized that it was true of all the other journalism schools in the country and elsewhere. I also suspect it is true of that generation in general.

10306 This trend does not mean that newspapers are on the road to extinction, but their role is changing. Newspapers have always been the greatest generators of news and information in terms of quantity and as such are perfectly positioned to become the major databank for the Internet. In a way, the Internet is the salvation of the newspaper business. Likewise, TV and radio will be revitalized because they can provide the needed audio and video.

10307 Soon this will all be available not only by computer, but through the TV box which means that even the couch potatoes will have access.

10308 In the U.S. where public demand is being carefully tracked by an elaborate story at UCLA, they have found that among Internet users, 67.3 per cent consider the Internet as an important or extremely important source of information and news. Equally interesting is that news reading is the fourth most popular activity among those who use the Net. Only Web surfing, e-mail and hobbying exceed it.

10309 Given Canadians' well-known appetite for news and information and the fact that we have proportionately more high-speed connections, there is little doubt these numbers would be even greater in Canada.

10310 The point of all this is that the demand for news-on-demand is real and must be served. Other countries are gearing up to do this and if Canadian companies are prevented from doing what the audience clearly wants then our media owners will be at a competitive disadvantage.

10311 The students studying journalism know this and they expect me and other journalism educators to equip them to become multi-skilled -- able to move easily from one medium to another. Contrary to what you heard yesterday, there are many journalists who are anxious to work in a variety of media. I have a school full of them.

10312 On the point of multi-skilling however, the notion of the reporter who shots and writes for the newspaper, the TV station and the Web side has been much exaggerated. There will be some occasions when this will happen, but it is simply not practical or even possible, much of the time. When it is possible, it should be done.

10313 One of the things that has always disturbed me about journalism in Canada is that there were so many reporters chasing so few stories. The news agenda is and has been way too narrow because the day-to-day "commodity" stories eat up the available reportorial resources.

10314 Just watch the nightly television news produced by the major television networks. The lineups do not vary significantly and the treatment of stories also doesn't vary that much. Is this your ideal for a sufficient diversity of voices?

10315 Converged journalism offers an opportunity to break out of that mould by freeing up reporters to do stories that are not being done and are vital to democratic discourse of this country. I am talking about stories that will give individual groups a competitive edge over both their domestic and international rivals.

10316 I also believe that the fear that media owners will simply see convergence as a way of reducing the number of journalists they need is unfounded. Two safeguards that already exist will prevent this. One is the insatiable need for more news and information to fill the exploding number of platforms and the second one is the over-arching need to produce better quality journalism than the competitors.

10317 The Commission and the applicants have spend a great deal of time talking about diversity of voices. If I have understood the Commission's position correctly, it fears that without the Quebecor code there will be fewer voices. That could be true on some of the so-called "commodity" stories, but if you analyze this coverage carefully, you will find that two or even four reporters on a routine story doesn't really produce a true diversity of voices. Competition is the best guarantee of diversity and we still have plenty of that.

10318 Even in Vancouver, which has been the focus of much discussion here in the past week, folks are not exactly rioting in the streets about lack of diversity of views in their newscasts. Instead, they are celebrating the fact that CBC now has a national newscast emanating from Vancouver, that Global will soon originate a national newscast from there, that CTV has a new local all-news station, and that Moses Znaimer is finally coming to town to start a Vancouver version of City-TV.

10319 It is true that Global also owns the major dailies -- the Sun and the Province -- but there are numerous other print publications that are well read -- The Georgia Strait, the Courier, the North Shore News, two papers in Richmond, to mention only a few. There are also Sing Tao, Ming Pao and the Fairchild television station, serving the Asian population which now approaches 47 per cent in the lower mainland. There are numerous radio stations and, depending on your decision, there could be a new multilingual TV channel a year from nw.

10320 Does that sound like too few voices? The truth is that there are more voices than the average mortal, or even a journalism professor, can keep up with.

10321 At this hearing, we have heard many concrete examples of how journalism can be better with convergence. These naturally have come from the proponents. By contrast, we have heard precious little in the way of concrete examples of the dangers portrayed by the detractors. There has been a fair amount of fear mongering but not much hard evidence.

10322 I mentioned earlier that I teach a course in investigative journalism. For the last three years, I have been attending the annual conference of the IRE -- Investigative Reporters and Editors -- and I have been struck by how much more vigorous investigative reporting is in the U.S., on television as well as in newspapers. Many cities the sizes of our average cities are doing good investigative work -- places like Tampa, Orlando and Sarasota.

10323 Convergence has, in part, allowed this to happen. The same could happen here if undue restrictions are not put in place by this Commission.

10324 This hearing has been much preoccupied with finding a balance which would allow convergence to maximize the benefits and minimize the dangers.

10325 The TQS code may be justified in Quebec. I have not studied it closely, but for someone who believes strongly in freedom of speech and freedom of the press, as I do, the question of whether it could withstand a constitutional challenge is very real.

10326 In English Canada such a restrictive code would be excessive and detrimental. There is just no solid evidence that I have been able to find to support the contention that the applications before you would lead to fewer voices. There is still plenty of competition in English Canada to assure a plurality of voices.

10327 Thank you. I welcome your questions.

10328 THE CHAIRMAN: Thank you, Ms Logan.

10329 I will turn to Vice-Chair Wylie.

10330 COMMISSIONER WYLIE: Good morning, Ms Logan.

10331 MS LOGAN: Good morning, Commissioner.

10332 COMMISSIONER WYLIE: In your written brief, and at the very end of your presentation this morning, you raise the spectre of freedom of speech.

10333 Is to you the very idea of requiring a separation between the news and information operation of one media on the other a restriction of freedom of speech, or is it the details of the Quebecor code that you have seen that is a problem?

10334 MS LOGAN: Well, I have a number of problems with the Quebecor code, but certainly the part of it that forbids the reporters from talking to one another seems to me to be a clear violation of freedom of speech.

10335 COMMISSIONER WYLIE: If that clause were not there and instead you had the clauses that require a separation between the news operations from the bottom up, the gathering especially of information and news, would you still feel that that is an infringement on freedom of speech?

10336 MS LOGAN: Yes, I would.

10337 COMMISSIONER WYLIE: And why would that be since the aim would be to assure that more people can speak with an individual voice rather than risking that many people have to speak with a single voice?

10338 MS LOGAN: I do not believe that there should be any restrictions at the news gathering level and, in fact, if there are that is an infringement on freedom of speech.

10339 COMMISSIONER WYLIE: Would I be correct in concluding from your presentation this morning that you are very much a proponent of new media -- I think you said at the beginning that that was your specialty -- and that your position is to ensure that different form of presenting information and news is of great interest to you and you want to make sure that the synergies and cost-savings and energies that can come from consolidation will achieve that goal? That to you weighs more heavily in the balance than our concern.

10340 MS LOGAN: I don't have any particular stake. I'm --

10341 COMMISSIONER WYLIE: Well, I wasn't talking about stake. You are a professor so presumably we are talking from an academic, philosophical --

10342 MS LOGAN: Well, this will happen or it won't happen. I just happen to believe that from the work that I have done that it is going to happen and that we had best be prepared for dealing with it and in possession of the facts that are going to be influencing the development.

10343 COMMISSIONER WYLIE: And is it your conviction then that this is less likely to happen in a valuable, rich manner if we don't allow consolidation, because presumably it could happen if you had the newspaper endorsing or embracing new media and the television doing it as well. Presumably then you would have two voices on the new media.

10344 So why is it so important to allow them to consolidate? Is it because there will be more resources? So even at the level of new media we are obviously perhaps not as conversant as you are with what is going on in media, but we are interested and we do follow it.

10345 If we go from newspapers and television -- television of course is our interest -- to the new media it doesn't eliminate the concern that there be two different offerings.

10346 MS LOGAN: Two different, sorry?

10347 COMMISSIONER WYLIE: Two voices, if you have the two separate and their repurpose or reformat or extend their news and information offering in a new format, there will still be two instead of one, if you allow them to consolidate before they repurpose and reformat.

10348 MS LOGAN: As I tried to say in my presentation, I don't think having two reporters automatically guarantees diversity of voices. For much of the journalistic agenda, it simply doesn't -- the so-called commodity stories -- and it's my position that if you can find more efficient ways of doing those commodity stories, that you in fact can have better journalism because you will have reporters freed up.

10349 I have worked in newspapers, as I said, in radio and in television, and I have always been frustrated by the consumption of resources on the routine stories and the fact that there is so little time to do those stories that should be done and need to be done and cannot be done because there simply is not the time and resources to do it.

10350 It seems to me that this is one way of allowing that to happen.

10351 COMMISSIONER WYLIE: A commodity story, I would imagine, is a train wreck and accident --

10352 MS LOGAN: Yes.

10353 COMMISSIONER WYLIE: Something that happened to --

10354 MS LOGAN: A press conference, a speech, you know.

10355 COMMISSIONER WYLIE:  -- create that. It's not investigation, development of projects, et cetera.

10356 MS LOGAN: Exactly.

10357 COMMISSIONER WYLIE: Which more our concern because we know that if a train -- there is a train wreck in Stewiacke it's not going to be reported to have been in Vancouver.

10358 MS LOGAN: And if you look --

10359 COMMISSIONER WYLIE: It will be the same for everybody.

10360 MS LOGAN:  -- on any given day, one half to two-thirds of the agenda are the commodities stories.

10361 COMMISSIONER WYLIE: Another intervenor yesterday from the university world spoke of the different forms of delivering content, and you appear quite interested as well in the growth of that new form which is the Internet, the Web pages, et cetera.

10362 Are you of the view that diversity of voices can be guaranteed simply by a diversity of ways of informing?

10363 In other words, do you have diversity simply because you have new ways of exposing or offering the same information?

10364 MS LOGAN: Well, the fact that you have an increasing number of platforms means that you need more information. If you need more information, you can allow space for more voices.

10365 This is why I tried to make the point in my presentation that I think the number of voices could in fact increase rather than decrease.

10366 COMMISSIONER WYLIE: We thank you for coming all the way from Vancouver to speak to us.

10367 Thank you, Mr. Chairman.

10368 THE CHAIRPERSON: Thank you, Commissioner Wylie.

10369 Commissioner Grauer.

10370 COMMISSIONER GRAUER: Thank you, Mr. Chairman.

10371 In looking at your presentation this morning, you mention that while it is true that Global owns the major dailies, there are numerous other print publications as well. You referred to The Georgia Strait, the Courier, The North Shore News and the two papers in Richmond, English language papers.

10372 Given that Global owns the Courier, The North Shore News, one of the two papers in Richmond and a number of other community papers, does not raise any concerns in your mind with respect to their position?

10373 MS LOGAN: Yes, it does. I think the Vancouver situation, as has been said here this week, is probably of the most concern in English Canada. But it is a vibrant city, as you well know, in terms of radio. We have some very distinctive voices on radio, as you know, and those are not owned by CanWest Global.

10374 I do not feel that this city lacks diversity of voices.

10375 COMMISSIONER GRAUER: I wonder if it is not so much whether it lacks diversity of voices or whether -- certainly this process is really an opportunity to fully explore these issues and the benefits and concerns we might have. A number of people have raised concerns, and I think it is what might be down the road as opposed to what is now.

10376 MS LOGAN: CTV is starting an all news local channel, so there is another opportunity for an increasing number of voices. As I mentioned in my presentation, the situation with television in Vancouver is very fluid at the moment and will change, I suspect, quite a lot because of the shift in ownership and also the new owners. The fact that Moses Znaimer is coming into the market is going to make a difference, no question.

10377 That, because of his focus, is going to open up a platform for voices that probably are not being heard now.

10378 COMMISSIONER GRAUER: Thank you.

10379 THE CHAIRPERSON: Ms Logan, in your presentation this morning you referred to the U.S. You have been struck by how much more vigorous investigative reporting is in the U.S. on television as well as in newspapers.

10380 It may be that with the current administration the rules may change in the U.S. Up to now, at least, the U.S. networks are not allowed to own as many television stations, in a relative sense, as you can in Canada now. They can't have cross-ownership between television and newspapers, presumably for the very concern that we are addressing here.

10381 Given that, to what do you credit the more vigorous investigative reporting in the U.S. since they don't even have the environment that we have in Canada today?

10382 MS LOGAN: At the present time, you are correct. The situation in Chicago is grandfathered, as you know, and there is a lot of co-operation and investigative reporting taking place there. I am referring to The Tribune.

10383 In the other stations that I referred to, it was cable channels, which I believe they can own.

10384 THE CHAIRPERSON: So it is in those cases where there is that you are arguing. It is not generally in the U.S.

10385 MS LOGAN: Not at the present time, no.

10386 THE CHAIRPERSON: As a professor, you would want your students to be canvassing all sides of an issue that is as important as this one. This is not just some sort of frolic of the Commission to be concerned about this issue. There are strongly held views across the country, as you know, on both sides of this issue, and our job here is to try to weigh those issues and come up with a decision that is ultimately, in our view at least, in the public interest.

10387 To what do you credit the strongly held views on the other side of this issue?

10388 MS LOGAN: The fact that so many people feel --

10389 THE CHAIRPERSON: Feel quite strongly that allowing this sort of thing is going to reduce diversity.

10390 MS LOGAN: Yes. I am not quite sure: fear of change. It is hard to say.

10391 I keep looking for hard evidence, and I am not seeing it at this stage. So it is fear of the unknown, the feeling that there will be far greater restrictions; some myths. I am not really quite sure why people feel this strongly.

10392 It is evident from listening to the intervenors yesterday that there are strongly held views. I am sorry, I just don't know exactly why that is.

10393 THE CHAIRPERSON: Do you think there are a lot of journalists that have a concern about this?

10394 MS LOGAN: Yes. Obviously we heard from them yesterday. I also think there are a lot of journalists who are very enthusiastic about the possibilities of converged journalism. And I am not only talking about students. I am talking about a lot of people working in the business who see possibilities of new ways of telling stories, opportunities to move into other areas.

10395 For many of them, there will be some people who will never be able to perform on all platforms. That is just a given. But there are many others who can and who want to.

10396 I certainly have seen that in my discussions with journalists from coast to coast.

10397 THE CHAIRPERSON: So you would acknowledge, quite apart from the Commission, that there are strongly held views on both sides of this issue.

10398 MS LOGAN: Absolutely.

10399 THE CHAIRPERSON: I think Vice-Chair Wylie has one more question.

10400 COMMISSIONER WYLIE: I meant to broach with you the basis of your view for the dire consequences of codes such as the Quebecor-TQS one. Mr. Dornan from Carleton yesterday appeared to not be aware that this code has been in place for five years in Montreal between TQS and Quebecor, and that it was drafted by Quebecor itself, not by us, as a response to our concerns as to what it is that the company felt was necessary to meet those concerns.

10401 The BBM results, of TQS having gained five or six points since they purchased TQS, didn't seem to have hampered them from improving the station.

10402 My understanding is that the station has gained popularity, in part by adult movies, I suppose, late in the evening, some people would say, but in large part by a personality in a talk show, which is an information show, and that when Quebecor came before us two or three weeks ago, no evidence was proffered as to how bad this was. They are, like many companies involved in media, involved also in new media, et cetera.

10403 The discussion was more whether it was necessary to do more, to add more restrictions. I don't know if you are better aware than Mr. Dornan yesterday of how long this code has been in place and who drafted it.

10404 You say there is no evidence of dire consequences, that there appears to be no evidence of dire consequences in having the separation. So it is definitely a balancing act, which is a role as to what is the potential for consequences that may not be ideal for our responsibility to ensure balanced views and information on matters of public concern and diversity of voices.

10405 We don't have any jurisdiction over your field, but we certainly have jurisdiction over our licensees and what quid pro quo may be necessary if they decide to get involved in another field.

10406 I don't know if you were aware of how the Quebecor code was generated and how long it has been in place.

10407 MS LOGAN: I am. Prior to this hearing I wasn't, which bothers me enormously. I guess it is another example of the two solitudes.

10408 I was aware that it was put in place five years ago and that Quebecor did write it. In my research for this presentation I discovered that.

10409 COMMISSIONER WYLIE: Thank you.

10410 THE CHAIRPERSON: Thank you, Ms Logan.

10411 Mr. Secretary...?

10412 MR. CUSSONS: Thank you, Mr. Chairman.

10413 We now turn to an intervention on behalf of York University, Frederick J. Fletcher.

INTERVENTION / INTERVENTION

10414 MR. FLETCHER: Mr. Chairman and Commissioners, good morning.

10415 I will probably speak in my Toronto accent since it has been along time since I lived in Vancouver, but there may be traces of a Vancouver accent left. We will have to see.

10416 My name is Fred Fletcher. I am a professor at York University, and I am the Director of the Joint Graduate Program in Communication and Culture at York University and Ryerson University.

10417 I am pleased to be here today to discuss some of the public interest considerations that arise from cross-media ownership with respect to public affairs journalism. When CTV asked me to review and comment on the TQS-CQI code and its applicability to CTV and Bell Globemedia, I was pleased to do so because of the importance of the issues involved.

10418 As it happens, I have been involved in research and teaching about news coverage of public affairs for more than 25 years. I worked for the Royal Commission on Newspapers. In 1981 I wrote an extensive study that came to the conclusion that journalistic competition is important for a healthy democracy and that journalistic competition helps to ensure diversity of editorial voices in public discourse.

10419 By this, I mean not so much diversity of opinion, as reflected in editorials and commentary, although that too is important, but diversity in reporting.

10420 I think it is important to understand the concept of diversity, which is quite complex and diverse in its own way.

10421 One can see various elements of diversity, and I would like to discuss some of those.

10422 When we think of diversity, we think of diversity of perspectives on the news in terms of individual stories, because stories can be told in different ways, and also in determining what stories matter enough to be covered.

10423 Diversity can also be seen as reflected in the kinds of sources of a voice in the news, and diversity also is important in terms of the range of viewpoints that is reported.

10424 So diversity covers issues of regionalism, of regional interest, of the scope of coverage and of the range of issues and viewpoints reported.

10425 It seems to me that the probable influence of cross-media co-operation on the various aspects of diversity is quite complex, and it involves both risks and opportunities for our public affairs information system.

10426 I think it is legitimate to recognize that there is some risk in convergence. We have heard of the scenarios involving same reporter, same slant, same choice of news that some feel will emerge as a result of convergence, but I think there is a stronger probability that convergence will lead at least broadcast news rooms into new areas of coverage where they have had no previous consistent presence, which would be a net increase in diversity viewed in this larger sense.

10427 This might occur in foreign coverage, for example. It seems to me that, in any case, the one reporter scenario is most likely in routine converge where co-operation is already well advanced in Canadian journalism through various forms of pooling.

10428 With respect to the formation of Bell Globemedia, it is my opinion that any risk to journalistic competition in the Canadian broadcasting system is outweighed by the potential benefits. I have several reasons for taking this view:

10429 First, since the Royal Commission on Newspapers examined the situation in 1980, there has been a substantial increase in journalistic competition in Canada, at both the national and local levels, among traditional news media, as well as through the emergence of new services. This is particularly true in major centres, of course, but even audiences in smaller centres can gain access to many news sources through the Internet.

10430 We usually think of the Internet in non-local terms, but in fact it offers the promise of new local services as well.

10431 Second, the overlap between the newsgathering and distribution activities of the Globe and Mail and CTV national and local news operations is fairly limited. The commitment of Bell Globemedia to maintain separate and independent news management systems reflects not only a concern for the public interest but also the journalistic necessities involved.

10432 The few synergies available in day-to-day news gathering and distribution apply mainly to routine stories -- some people refer to this as commodity journalism -- where diversity in news coverage is not normally to be expected.

10433 And here I mean news conferences, public stations, the release of documents and reports, straightforward events.

10434 The limited overlap is true not only because of the national focus of the Globe and Mail, but also because of the differing needs of print and television journalism.

10435 For any news report beyond a simple bulletin, the two media require not only different presentation techniques, but often different kinds of information and different sources as well. This is true not only because TV requires visuals or visible spokespersons, but also -- and more importantly -- because the two media tend to call for different story framing and supporting data, partly because their audience needs are so different.

10436 Viewers and readers take in information in very different ways, and experience journalists know how to serve those needs.

10437 While the same reporter might have the skills to meet these diverse needs, the preparation time involved would make this difficult on an everyday basis for important stories. The advent of a new generation of journalist able to report in several media formats does not change this. But it is desirable, I think, to permit -- and even encourage -- reporters to present their work in a variety of formats and platforms. I say this because the different platforms tend to reach different audiences.

10438 What is most important, I think, is to ensure that story assignment and selection remain independent. It is here that one is likely to find the major impetus for journalistic competition, the need to differentiate the product to attract audiences and maintain credibility, which is one of the most important resources of a news organization.

10439 The synergies that are available, in infrastructure and combining resources for a limited range of purposes, are likely in general to improve the quality of broadcast public affairs journalism in Canada without any major reduction in what I regard as the important element of journalistic competition.

10440 Indeed, I think there is the potential for greater journalistic competition in the Canadian media system as a whole through collaboration in investigative reporting and foreign coverage, both of which are often constrained by limited resources.

10441 The increased resources offered by collaboration make it more likely that important issues will be investigated. With large news organizations competing with one another, more reports that set them apart from their competitors are likely to emerge.

10442 In addition, increased journalistic resources could also mean that stories initiated by one media group will be more likely to be followed up by another. If I am correct about this, this would mean increased editorial diversity, as each competitor sought out additional and different sources and perspectives.

10443 In reviewing the TQS code, I concluded that in the markets served by CTV at least it would be unnecessary, and possibly undesirable, to consider regulations that would constrain working relationships in newsgathering. Informal cross-media co-operation has been common for many years, going back even to my early years as a journalist.

10444 Given the rapidly changing nature of newsgathering and dissemination, it would be undesirable, I think, to limit possible innovations, except as absolutely necessary to protect journalistic competition. I think the latter can be achieved by ensuring editorial autonomy among affiliated news organizations.

10445 What is important, in my view, is to ensure the independence of the negotiations that take place in newsrooms to determine what is covered and broadcast, what is selected among the wide range of information available.

10446 The TQS prohibition on interaction among newsrooms and information professionals strikes me, on the face of it, as difficult to enforce and unnecessary. Independent editorial policies and the professional needs of the different news delivery systems are most likely, in my view, to protect journalistic diversity.

10447 It does seem to me important, however, to ensure that major collaborative works are properly identified when printed, broadcast or otherwise disseminated, not only to ensure accountability but also to assist external observers and regulators to assess the costs and benefits of cross-media affiliations for public affairs journalism.

10448 Proper identification of major collaborative reports would promote transparency and make it easier for concerned citizens, agencies such as press and broadcast councils, and journalistic organizations to scrutinize the operations involved.

10449 In any case -- and here I ride one of my hobby horses -- audiences would benefit from more information about the provenance of the stories they are offered.

10450 Given existing mechanisms for journalistic accountability, it does not seem on the face of it to be necessary to consider an additional level of external oversight either.

10451 While it is clear that the future of broadcast journalism is not easy to predict, my best guess is that the advent of Bell Globemedia, with its multiple platforms, will have a positive effect on the quality of Canadian broadcast journalism. I believe strongly in the importance of journalistic competition and the responsibility of the Commission to promote it.

10452 However, I think it is important to ensure that any regulations intended to protect journalistic diversity do not have the unintended consequence of inhibiting innovation and foreclosing the development of new forms of access and diversity in the Canadian broadcasting system.

10453 Finally, I would like to say that I think hearings such as this are important to make us all aware of the elements of a healthy broadcasting system and healthy journalism. I am very happy to be able to participate.

10454 Thank you.

10455 THE CHAIRPERSON: Thank you, Mr. Fletcher. I will turn Commissioner Cardozo.

10456 COMMISSIONER CARDOZO: Thank you, Mr. Chair and thank you, Professor. It is nice to see you again.

10457 The last time we met I think was when I was a student of yours, and this is your chance to see whether I learned right or whether I am taking what you taught me, twisted it and throwing it back at you. I hope you will conclude the first.

10458 Last night, as I was thinking about this, I indulged in a bit of looking back and pulled out the book called "Boys on the Bus", which was, if not required reading in your course, I seem to remember having read it around that time, perhaps for an essay or something like that. A couple of things struck me as interesting.

10459 It is a book that chronicles the Nixon-McGovern election and talks about the pack journalism mentality that develops. There were a couple of things that were interesting in terms of this discussion.

10460 One was the idea of a pool reporter, and the other was pack journalism. What they had among these -- they were all boys in those days -- boys on the bus that one reporter would -- they would take turns, but one reporter would hang close to the candidate and basically see everything that happened and provide the rest of the journalists with a fairly straightforward description of what happened. So it was newsgathering. Then they all went off and wrote their stories based on that and anything they added to it.

10461 The theory of pack journalism suggests that because they were hanging around together so much as a group for several weeks, in this case several months, and were getting the same basic information, that they ended up thinking a lot alike, believing the same rumours and believing the same ideas.

10462 If I look at this issue here, is there the same kind of danger -- and perhaps worse -- because in that case they were competitors. On the bus there were people from the networks and radio, from various big and small newspapers, but this sort of pack mentality developed among them.

10463 In this case here you might have two different reporters from different mediums, but they are gathering the news from the same area. Are we going to see a pack of two putting out that same kind of pack journalism product?

10464 MR. FLETCHER: Actually, pack journalism is a complex concept as well. Maybe that is a favourite statement of professors.

10465 It is true that there does emerge some risk of identical inspiration in the context where journalists work together a lot, even in competitive situations, partly sometimes because of competitive situations when there is a concern that you will miss something that your competitor is reporting.

10466 One of the main incentives for pack journalism is that self-protective capacity.

10467 I don't think it is obvious that collaboration among newsrooms in different platforms will produce the same kind of pattern that emerges when reporters are trapped together on the plane or the bus covering the same event. Even in existing newsrooms, reporters have different areas of specialization and go in different directions.

10468 I think pack journalism is always there, and it is a function of trying to do your work in such a way that will not get you into trouble.

10469 I don't think that the convergence has any effect on the instance of pack journalism one way or the other. That is the bottom line.

10470 COMMISSIONER CARDOZO: I would like to go through your comments and ask you about a few things you said.

10471 Paragraph no. 1 on page 3 you said:

"...there has been a substantial increase in journalistic competition in Canada..."

10472 I understand you are saying that is since 1990. I am wondering what you think about the more recent trend, which has probably been the last year or two years or five years, where there has been what some might call a reconsolidation -- I guess it would not be a reconsolidation, because a lot of these are new entities.

10473 If you look at the TV scene, in the last three years where we might have had a number of players, they are getting smaller and smaller. A lot of the specialties are getting bought up, and radio stations are getting bought up. Our policies have allowed for that.

10474 Has there been competition, and now are we turning back into some kind of consolidated mode?

10475 MR. FLETCHER: The proliferation of competition occurred in a variety of different dimensions. There were new players between 1980 and 1996 to 1998, new owners. There were new services made possible by Commission decisions and also by new technologies.

10476 The proliferation of services continues. I think the trend is fairly strong. But as you say, there has been a consolidation of ownership. I think that is a legitimate concern. It is important for the editorial decisions of various news organizations, even under the same corporate umbrella, to have a degree of autonomy, I think, in order to make sure that journalistic diversity is protected.

10477 COMMISSIONER CARDOZO: On page 4, with regard to the same reporters doing different things, you say:

"While the same reporter might have the skills to meet these diverse needs, the preparation time involved would make this difficult on an everyday basis."

10478 I can see that happening now. Certainly if you think of the camera person and the still photographer at this point, you really can't do both things. If you want to get that picture of Jimmy Carter and Fidel Castro shaking hands at the Trudeau funeral, you can't really have two cameras with you, because it is going to be a very momentary thing.

10479 I am wondering if at some point that might happen, where your video camera might be able to do stills that are good enough quality to use in a newspaper.

10480 MR. FLETCHER: Technically, I think that is true. I think it is important to distinguish between multi-skilling, which is like the videographers who are people who can do certain types of technical services for more than one platform and actual bi- or tri-media work, where the same reporter works for different media. They are related but not identical developments; and the re-use of materials for another platform.

10481 There is no necessary inevitability that the news perspective will be the same simply because the same pictures are used, for example, or the same technology is used to collect the information. It depends on the interpretation that the analyst, the correspondent, attaches to those materials that are gathered.

10482 COMMISSIONER CARDOZO: The proponents of consolidation have said that with two operations, you have twice the number of journalists covering it in a sense. Those who have concerns about consolidation have said they will just send one person and you will not get thoughtful stories. Part of that is that what you will have is the clearing out of newsrooms and large layoffs, because really what is driving this is shareholders and the need for the companies to show savings in synergies to the shareholder.

10483 Is that a concern of yours; that we might not end up with this extra in-depth journalism, but rather more skimpy journalism?

10484 MR. FLETCHER: Yes, I think that is a risk. I think the emergence of new platforms and the increasing demand for news creates a climate where, in the foreseeable future at least, that is not likely. But it really depends on management decisions and other kinds of factors that are very difficult to project.

10485 COMMISSIONER CARDOZO: Should we be concerned about that?

10486 MR. FLETCHER: I think it is something that has to be considered. It is, however, extremely difficult to predict, I think.

10487 COMMISSIONER CARDOZO: Is there anything that we as regulators can or should be doing?

10488 MR. FLETCHER: I don't think I am sufficiently expert in that matter to say.

10489 COMMISSIONER CARDOZO: On the matter of proper identification -- this is one of the recommendations you have made -- what you are talking about there is that stories -- I guess right now pretty well most stories do have identification as to who the journalist is.

10490 Are you saying that it should be more definitive?

10491 MR. FLETCHER: I am thinking of when collaborative teams work together, I would like to know that that happened. Quite often in contemporary journalistic practice the source of some of the material is not identified, even though the correspondent putting it together is normally identified.

10492 COMMISSIONER CARDOZO: Does that happen more in print journalism, that they are identified? Quite often you will see in a print story the byline of the main writer and then either there or at the end there is a tag line at the end saying with files from X, Y and Z, where on TV you get the one person identifying the source.

10493 MR. FLETCHER: Yes, sometimes the print media also fail to provide adequate information on the providence of the story because it is too vague: special to "The Daily Blat" does not tell you much about where the story came from.

10494 COMMISSIONER CARDOZO: Our responsibility is more with the TV journalists. Is there something we should be doing or saying in terms of requiring them to do that identification or asking them to talk about it in their code of ethics? Is that what you are suggesting?

10495 MR. FLETCHER: Yes. I would like to see, especially major collaborative efforts, more adequately identified.

10496 One of the major benefits of the development of websites for news organizations, especially broadcast organizations, is the capacity to put this additional information there and make it readily available.

10497 COMMISSIONER CARDOZO: On page 7 -- and you said this is one of your favourite hobby horses:

"In any case audiences would benefit from more information about the provenance of the stories they are offered."

10498 Professor, I have to tell you I don't know what that word means. I was going to dive for a dictionary, but there was not enough time. You were at the end of your presentation.

10499 Is this the identification issue?

10500 MR. FLETCHER: Yes, it is.

10501 COMMISSIONER CARDOZO: It wasn't one of your hobby horses when I was your student, so I never got a chance to look up that word back then.

10502 MR. FLETCHER: I adopted the word from antiques.

10503 I apologize for that word. Having been a journalist before I was an academic, I have always tried to engage in plain speaking.

10504 COMMISSIONER CARDOZO: I should know to carry my dictionary at hearings.

10505 Can I ask you about the code of ethics that both parties -- and I guess you are talking more about CTV -- have provided. I guess the substantive paragraphs are no. 2, which talks about separate management; no. 3 that talked about TV managers not sitting on editorial boards; no. 4, internal complaints mechanism; no. 5, the role of the CBSC; and no. 7, PSAs and public relations around the complaints issue.

10506 Are you comfortable with those items?

10507 MR. FLETCHER: Yes. I think I can say I find all of those items beneficial.

10508 COMMISSIONER CARDOZO: I guess a lot of the people who have come before us have said that issues are either black or white, and you are one of the few people who is saying there is black and white to this and you can see the need for some concern that people might have.

10509 The other issue that has been raised is the separation of news gathering. I take it from what you have said that is not necessary or not desirable?

10510 MR. FLETCHER: Yes. I think the separate decision-making process in different newsrooms is important because it is what preserves competition and therefore diversity.

10511 I think anything that inhibits the opportunity to take advantage of the new technologies and the wider range of delivery system is undesirable.

10512 We don't know exactly how newsgathering and dissemination will develop over the next seven years, ten years. Some safeguards are beneficial, but there has to be room for flexibility and innovation. That includes, in particular, various kinds of collaboration to increase certain kinds of underserved journalistic endeavours, like foreign reporting and real investigative journalism, and the capacity to shift some resources around to make that happen.

10513 So a strict separation of the news gathering operation would reduce the potential benefits I see from this kind of convergence.

10514 COMMISSIONER CARDOZO: In this commodity coverage that we have talked about, if you are covering a news conference about a fire that took place, that is fairly straight. Say you are going to cover Stockwell Day's press conference this afternoon, there is a lot of subjectivity even if you give a straight report. The adjectives you use really give a sense of what you think is going to happen.

10515 Isn't that as much as the news product at the end of the day when you are gathering news?

10516 MR. FLETCHER: Yes, I agree with that. At the moment, there is sufficient competition among the major news organizations in covering that kind of story, and the major news organizations will normally be there, I think. I don't think that would fall under the routine category.

10517 COMMISSIONER CORDOZA: Say for a press conference of that kind, the two operations in this case would each likely send a reporter there.

10518 MR. FLETCHER: That is my best guess, yes.

10519 COMMISSIONER CARDOZO: What are your thoughts on right to reply programming, the kinds of things that you see in newspapers, where you have letters to the editor but there is not as much opportunity for the public to have their voices heard in television?

10520 Would you like to see right to reply programming, either interviews with the public, streeters, or whatever else?

10521 MR. FLETCHER: Yes. It has been happening more, and I think it is one of the more positive developments in broadcast journalism.

10522 COMMISSIONER CARDOZO: What is your sense about what works well there?

10523 MR. FLETCHER: From the point of view of diversity of voices, one of the things I like is the proactive seeking out of responses by the news organizations. The use of phone mail and e-mail and voluntary involvement, I think is important, but I like the proactive activity too. That is a really important way of bringing voices that are often not heard in Canadian broadcasting on to the screen.

10524 COMMISSIONER CARDOZO: Would that be a useful thing to include in a code of ethics?

10525 MR. FLETCHER: Yes.

10526 COMMISSIONER CARDOZO: On the matter of freedom of speech, there are some who suggest that the consolidation of ownership itself is an infringement on freedom of speech and that you will have less people reporting. There are others who suggest that this kind of clause that has been talked about of a separation of news gathering, that is an infringement of freedom of speech.

10527 I wonder what your thoughts are on that.

10528 MR. FLETCHER: I don't know about the interpretation of the charter, not being a lawyer --

10529 COMMISSIONER CARDOZO: No, I am not talking about the charter so much, but just a general sense of freedom of speech.

10530 MR. FLETCHER: I think that it is a considerable intervention into the working lives of journalists to extend across the country this kind of a prohibition. I am not sure how the TQS code has been working in practice.

10531 Just looking at it, it seemed to me quite a surprising degree of intervention. There is certainly a legitimate concern that corporate concentration could reduce the access of marginalized voices to the public airwaves. But I have not seen any evidence to support that proposition that we have gone any further than previously in terms of the breadth of diversity of voices and opinions.

10532 I am in favour of any measures that don't inhibit innovation or infringe on the rights of journalists; that encourage as broad a diversity of voices as possible.

10533 COMMISSIONER CARDOZO: Could I ask you to look down the road. We are seeing a lot of consolidation that we have talked about, and let's say five years down the road from now you take the communications industry, which is telecom, cable, TV, radio and newspapers and magazines and big internet portals. Let's say they are all owned by three companies, which some would suggest is quite realistic, at least if you look at English-speaking Canada.

10534 If 80 or 90 per cent of all these things are owned by three companies, should we be concerned about that in terms of diversity of voices?

10535 MR. FLETCHER: I think there is a potential risk in that kind of consolidation, and I think that is one of the benefits of our Canadian regulatory system; where if it is decided that that kind of consolidation is either inevitable or even desirable, we can put in various kinds of requirements to make it work as much for the public interest as is possible.

10536 COMMISSIONER CARDOZO: Do you think on that we are better to go for a shorter licence term? The maximum licence term that we can provide is seven years. A number of people have suggested shorter: five or I think even two or three.

10537 Do you have a sense of whether we should move cautiously on that -- the reason being that once we issue the licence with a certain set of conditions of licence, we can't call them back within the first five years and say: Oh, by the way, you have these two new conditions of licence, and this is the chance.

10538 The challenge we are really faced with is to balance all of these things that we have been talking about and to look into the future, not knowing where it is going to happen. We could end up with this consolidated world that I have just outlined; we could end up with this just being a cycle that consolidates over two years and then totally comes apart two years later.

10539 MR. FLETCHER: I am not really an expert on this question. I do think that we won't know very much two years from now still. I don't think things are moving that quickly.

10540 COMMISSIONER CARDOZO: Is seven years a long time?

10541 MR. FLETCHER: In this kind of cycle, it is a fairly long time. It may take five years for the process to sort itself out in terms of what is actually going to happen on the ground.

10542 COMMISSIONER CARDOZO: Those are my questions. Thank you very much.

10543 Thank you, Mr. Chair.

10544 THE CHAIRPERSON: Thank you, Commissioner Cardozo.

10545 Professor Fletcher, I appreciate at the outset you had indicated that you had done this work at the request of CTV.

10546 On page 6 of your comments you indicated that:

"I concluded that in the markets served by CTV at least it would be unnecessary..."

10547 Referring to the TQS code. Would you make the same comment about the markets served by Global?

10548 MR. FLETCHER: I think there is certainly a difference because of the local news organizations operating in the same cities. But on the whole, I think my analysis probably applies to that situation as well.

10549 I would really feel more comfortable if I had a chance to look into the situation more closely.

10550 THE CHAIRPERSON: You don't feel comfortable enough.

10551 MR. FLETCHER: I think the principles that I have enunciated having to do with journalistic competition and the possible benefits to competition and diversity of convergence apply.

10552 THE CHAIRPERSON: You wouldn't think that, whatever the outcome, the Commission should draw a distinction between the operations of CTV or Global.

10553 MR. FLETCHER: I don't think so.

10554 THE CHAIRPERSON: You go on to say:

"...it would be unnecessary, and possibly undesirable..."

10555 So you are not sure that it would be undesirable. You are not as definitive as Professor Logan was.

10556 MR. FLETCHER: No. I would like to have had a chance to look at the TQS code in operation, but I have not had that opportunity.

10557 THE CHAIRPERSON: Thank you very much, Professor Fletcher, for your appearance here today.

10558 We will take our mid-morning break now and reconvene in 20 minutes.

--- Upon recessing at 1020 / Suspension à 1020

--- Upon resuming at 1040 / Reprise à 1040

10559 THE CHAIRPERSON: Welcome back to our presentation respecting CTV and Global Television's renewal applications.

10560 Mr. Secretary, please call the next intervenor.

10561 MR. CUSSONS: Mr. Chairman, our next intervention is by the Newspaper Guild of Canada.

10562 Gentlemen, please come forward.

INTERVENTION / INTERVENTION

10563 MR. AMBER: Thank you very much for inviting us to come and make an oral presentation.

10564 We thank you because our written words were obviously very focused, and this gives us an opportunity to discuss further issues with you.

10565 As well, the focus of the discussion has changed remarkably since we submitted our paper to you, and a lot of things have happened in your hearing in the last week which we would like to comment on.

10566 Who are we?

10567 We are the Newspaper Guild of Canada, and we represent about 8,500 media employees in television, radio and in newspapers.

10568 With me today, on my left, is Jan Ravensbergen, who is the Vice-President of the Montreal Guild, and on my right is John Belcarz, who is the President of the Guild in Montreal.

10569 The first issue that we would like to focus on is the one that people have been speaking so much about recently; and that is the code that the two applicants have brought forward.

10570 One of the issues that the applicants have put forward is that the code of conduct should in fact be a voluntary code. We would like to go on record as being very strenuously opposed to that.

10571 We believe that in order to make the new media landscape in Canada work, with the heavy media concentration, that we have to get it right going in. This, ladies and gentlemen, we submit, is the opportunity to just that.

10572 There are no regulations besides the Competition Board on the activities of newspapers in Canada, and that is the way it should be. Canada has prided itself on not only being a democracy but on being an area of free expression. And regulating newspapers is not part of what we do.

10573 However, airwaves are different. Airwaves are owned by the public, and airwaves can be, and should be, and have been regulated. To us, getting it right at the beginning is terribly important.

10574 Voluntary is a nice concept. I don't want to draw illusions with some terrible industry actions that have come under voluntary guidelines, industry guidelines. I will let you draw your own conclusions about which particular industries I may be referring to.

10575 However, the point here is that there might be a discussion with you about the value of the code. But if the code were really good -- which it isn't. But if the code were really good, the issue of voluntary codes isn't what we believe this process is about.

10576 You are about to grant applications for renewal of licences which involve Canadians in many ways. First, it is their airwaves. Secondly, they have a right for the regulatory body to defend the rights of Canadians to get as high quality news on those airwaves as is possible.

10577 We are not telling you to go in and run the newsrooms, but what we are telling you to do, as we did in our brief, is that there definitely should be a separation of newsrooms.

10578 We are adamantly opposed to anything that will combine the operations of television and newspaper newsrooms.

10579 I should tell you that on our little panel today, Jan works in the editorial department of a newspaper, The Montreal Gazette; I work in the news department of the Canadian Broadcasting Corporation Television News. So you have both sides of the picture here, and we would be very happy to discuss these issues with you.

10580 By the way, because we are a labour union, we often have to deal with what people regard as our secret agenda. On this particular issue, there is no secret agenda at all. And let me explain it to you.

10581 We think it would actually be in the union's interest if, for example, in Montreal the Global Television newsroom was combined with The Montreal Gazette newsroom, because we would be quite certain that shortly afterwards all those members coming in from the Global side of it would become members of the Montreal Guild.

10582 This isn't the thing about protecting jobs or even, in this particular case, adding jobs. This is about the belief that Canadians deserve a wide range of voices and the best quality news, particularly at the local level.

10583 Those are some of the things that we would like you to reflect upon.

10584 The other issue that is being bandied about quite a bit is the idea of convergence.

10585 I think when one thinks about convergence, they don't generally think that this is about convergence of staff; they think about convergence is a technological mode of delivery of the message. It is about content. It is about a lot of things.

10586 But surely the job of the CRTC is not to provide a regulatory ability for people who have invested heavily on the financial side by buying up more and more media to the point where Canada has more media concentration than almost any other country, if not any other country, in the western world.

10587 I don't think you are here to ensure the financial health of the people who have made these particular business decisions to buy newspapers and buy television networks.

10588 We are very concerned about the idea of regulations coming down basically to support business rather than, in this particular case, the rights of the Canadian people vis-à-vis better quality journalism and more diverse voices.

10589 In a moment I am going to ask Jan to speak with you for a moment or two, but let me say at this stage that we couldn't help but overhear the issue that was raised with the preceding speaker. That was about the seven-year licence. The question was put: Is it too long?

10590 To show you how quickly things have changed in Canada, let's go back seven years. Go back to the year 1994.

10591 On the broadcast side in 1994 CTV was an amalgamation of wholly-owned stations in a co-operative with a very weak centre. We have seen CTV now change is format on its own into a very highly controlled centrally run network. Then, of course, we saw CTV sold to Bell Canada.

10592 Global seven years ago was struggling to get outlets in certain parts of the country -- in most parts of the country. Now we know where Global is today, and you know it better than that.

10593 On the newspaper side it is even worse. The two names, when people talked about newspaper chains in 1994, were Southam and Thompson. Thompson got out of the newspaper industry for financial reasons; Southam, I think, disappeared because there was a better offer on the table.

10594 We went from Southam and Thompson to Hollinger in 1996. But Hollinger didn't even last very long, and now much of it has been bought out by CanWest.

10595 I state this: the rapidity of change, no one would have predicted this. No one would have ever predicted even major parts of this. So when we talk about a seven-year licence renewal, one wonders where we might be seven years down the road.

10596 Our position and our point is fairly clear; and that is, we have to get it right now. The only hope for the Canadian people, the only people who could stand in and say something because of our tradition in Canada of how we do things, and our legislative and regulatory set-up, are you folks at the CRTC.

10597 To us, the separation of one newsroom from the other is terribly important.

10598 The day that Global announced it was getting into the newspaper business, the owner of Global mentioned the Chicago Tribune as his example. The Chicago Tribune owns newspapers in the United States. It owns radio stations; it owns television stations. One of the things the Chicago Tribune is doing is trying to figure out how to get a reporter to actually report on radio, television, newspaper and before you are finished, file something for the Internet.

10599 We do not believe, and we do not believe anybody could support the conception, that this actually makes for better journalism.

10600 Let me turn now to Jan, who will pick up a few points.

10601 MR. RAVENSBERGEN: Just a couple of brief points. One is the situation in the United States, which I believe you are probably familiar with. The last report is 14 markets in the U.S. where there is cross-ownership of a major TV station and a major daily newspaper. That is a very heavy number obviously. And then we look at the Canadian situation, and proportionally I guess the situation is considerably worse: seven, eight, nine, ten cities where this cross-ownership is an issue.

10602 Two other points.

10603 First, Global in its response to interventions cites basically three stakeholders: the consumer, the advertiser and the financial community. We are calling on you today to recognize and embody the fourth stakeholder, and that is the public interest.

10604 Over 50 per cent of daily newspaper circulation in this country is held by one owner. That is a very serious situation. We are not asking you to regulate that. What we are asking you to do is to acknowledge that and, with a very firm hold separate agreement, ensure that the newsrooms that already exist in this country can work separately from and independently of the owners' interests.

10605 Thank you very much.

10606 MR. AMBER: In our brief to you we pointed out two historical North American devices that have been used to try to guarantee better service to the public in their local journalism.

10607 One of them is the situation which exists in Vancouver. Even though they went from being two privately owned newspapers to one owner, in that agreement was the provision that both newspapers, although joining in every other way, would keep separate newsrooms.

10608 To this day, there is incredible competition between The Province and The Sun to get the best possible newspaper out. Do the people of Vancouver and the Lower Mainland in British Columbia benefit from this? We suggest that they do.

10609 There is one historical precedent in Canada. In the United States there is even more. There is something called the JOA, as we pointed out in our document. Under the Joint Operating Agreements there are over 30 cities in the United States where the morning paper and the evening paper have combined all their operations but, under U.S. law, their newsrooms.

10610 So when we call on you to impose a condition of licence that the television newsrooms be separate from the newspaper newsrooms, we think we are dealing with a plan that has proven its worth both in Canada an din the United States.

10611 For us, the issue is simple. We need more voices, not less. We need more local news, not less. We need more competition in the area of news gathering, in the editorial agenda setting, in protecting the voices of Canadians and writing about the stories and the issues that concern them.

10612 We need more service in the public interest, not less. We are fearful that financial interests -- and it is stated in many of the documents that have been presented to you that synergies and areas where expenses can be cut are going to be in vogue in order to obviously pay off the amounts of debt that have been incurred by both organizations in their change in structures in the last year.

10613 So we say to you that it is totally within your rights, and we believe in your obligation to the Canadian people, to place severe restrictions on both applicants concerning their news operations in television being separate from those in newspapers.

10614 THE CHAIRPERSON: Thank you for your presentation and your written submission that you provided us.

10615 At the outset you said you have been struck how the discussion has changed over the past week. I wasn't sure what you meant by that.

10616 Could you put that in the context of this issue?

10617 MR. AMBER: We haven't been here, so we have been reading it in the press. We think it is fairly accurate, because the particular papers we have been reading it in are owned by the people who are involved in the process. And when you write something about your owner, I presume you are as accurate as you can be.

10618 What we read a few days last week was where Mr. Asper -- I guess we are allowed to use names here -- was talking about you not having the constitutional right to do this; and that if you did this he was going to take you to court. And then it switched around, that the networks are now going to look at the issue about a code and the terms that were used in the reports in their own newspapers about basically being reluctantly dragged into this, and finally coming up with the codes, which were separate but awfully similar.

10619 I noticed that the last number on the CTV code was no. 8, preceded by no. 6; where the last number on the Global one was no. 7, preceded by no. 6. So there were some differences, but they were not perhaps as meaningful as one might think.

10620 One might actually think that -- I hate to use the word that there might have been some collusion or discussion between the two groups.

10621 Collusion, obviously, is out of place. I retract that. It wasn't collusion; it was discussion.

10622 So how did the focus go? Reading it as a Canadian might -- somebody, who is not in the industry as I am, reading it , it shifted. I think it started off, and there were some very good articles before your hearing started, basically a lot about the future of Canadian television and Canadian journalism was at stake in these hearings. It was a type of theoretical and type of preparing society for more changes that may be coming and talking about how the government gets involved in dealing with those changes.

10623 That was the prelude to last week. I read them.

10624 Then last week it was firing with the guns. I don't think it is too far to say that there was an attempt to intimidate the CRTC.

10625 When we came here today, and when we were preparing last week, we said we had to remind the CRTC that we deal with these people all the time, dealing sometimes with people who have very large holdings, very large companies. And there is a way of dealing with other people that when they don't get what they want they deal in intimidation and deal in nasty negotiations and difficult negotiations.

10626 To us, we saw what was happening.

10627 Now they have come up with a compromise, their idea of a compromise, a code which must be voluntary, according to other quotes that were attributed to other senior officials, presidents and vice-presidents in those corporations. So that is what we meant when we said the focus seems to have changed. I don't want to see, in my view -- and I should say we don't want to see where the focus is now a discussion about the code. We think it is bigger than the code.

10628 If the code in fact is voluntary, we would suggest that it is interesting; it may even have some positive effects. But it does not set out a regulatory basis for what might happen.

10629 THE CHAIRPERSON: I am not sure I quite understand.

10630 You are saying you think the issue is bigger than the code. From a regulatory point of view, how do you suggest the regulator deal with this issue if you think the issue is bigger than a code?

10631 MR. AMBER: As we said in our submission, we believe there should be a regulation that the two applicants do not have the right to combine their newsrooms.

10632 That is another issue.

10633 THE CHAIRPERSON: The issue is whether the code is voluntary or whether it is an obligation imposed by regulation or condition of licence.

10634 MR. AMBER: Let me try to be clearer than I have been.

10635 If the code is accepted, it is our view that even if it was accepted and followed, it does not meet the issue of more diversity in news operations across Canada. I think the code is not good enough, even if it were regulatory as it set out.

10636 Some of the issues, if you look at them -- and I think when the last speaker was being questioned there was some focus being put on Issues 2, 3 and I think you said 4.

10637 THE CHAIRPERSON: I want to get to that. Why don't we get to that now. What is it about the code that you don't think is good enough?

10638 What problems do you have with what is there, and what perhaps isn't there that should be there, in your view?

10639 MR. AMBER: In no. 2 -- I am reading off the Global one, because it only has seven points.

10640 THE CHAIRPERSON: Except for the last point, they are both identical.

10641 MR. FLETCHER: Yes.

Global will retain its own news management structure for Global television operations, which is separate and distinct from that of CanWest newspaper holdings.

10642 You notice it doesn't say will maintain its own news operations. It uses the term management structure.

10643 No management structure ever produced a news story. No management structure was ever out on the streets doing a news story. No structure is sitting in a newsroom or the television newsroom every day and picking out which of the stories they are going to cover and which of the stories they are not going to cover.

10644 These are words that for those that are actually not working in newsrooms don't mean that much. Newsrooms can have news management structures that are separate but in the first instance will not literally affect what actually comes out on the air or in the newspapers.

10645 Let me also go further for you. I think that too often in Canada we have regulatory agreement and conditions which are impossible to check. I would suggest to you that we obtain its own news management structure for Global Television operations, which is separate and distinct from that of CanWest Newspaper Holdings, either there is a holding company which is in charge both of the newspaper side and the television side or there isn't. Either these are distinct and different companies or they all in the end report to the same holding company.

10646 It is one thing to say that there will not be the same people in Division A and in Division B, but both Division A and Division B both report to the same holding company.

10647 I would suggest to you two points about the first sentence.

10648 One of them is that it is not where the separation of operations should be, which is at the newsroom level, number one. Number two, I don't think that a sharp minded lawyer would suggest to you that this does it, even if you were just looking for a separation of management structures.

10649 THE CHAIRPERSON: On that one, the issue for you is not the management structure but the news operations themselves.

10650 MR. AMBER: I would suggest to you that it is both. I can tell you what happens in the newsroom is what generally gets out to the public.

10651 THE CHAIRPERSON: Okay. Go on.

10652 MR. AMBER: Journalistic content or presentation decisions for Global were made by Global Television news management. You can still have a combined newsroom where there will be someone who will be called Global news management manager who will determine perhaps what goes on the air of what already comes back into the shop that day.

10653 How it gets done before that person makes that decision and how this regulatory agency will actually be able to oversee something like that, without beginning to interfere into an area where I don't think Canadians want the regulatory body to interfere, which is exactly what is going on the air every night, I am not sure how you could make anyone live up to that.

10654 Three:

Global news managers will not sit on any editorial boards of any newspapers owned or controlled by CanWest.

10655 This is interesting. I don't know, because I wasn't here when they presented this to you, but by editorial boards do they mean the boards that actually write the editorials, or do they mean the boards of the newspapers that run the business and help the publisher make the paper work?

10656 So I can't agree to something that I don't think is clear at all in number three.

10657 In my view --

10658 THE CHAIRPERSON: Your colleague works for The Gazette. What do you understand editorial board to mean there?

10659 MR. RAVENSBERGEN: The editorial would mean the editor-in-chief, the various editorial writers. Sometimes the managing editor would sit in and discuss --

10660 THE CHAIRMAN: That is what I would have understood it to mean

10661 MR. RAVENSBERGEN: You see, it helps to have a print guy and a broadcast guy at the same table.

10662 THE CHAIRPERSON: That's why I asked you.

10663 MR. AMBER: And you will notice the Guild, not worrying about the business consequences, actually sent a newspaper guy and a television guy to talk to you today.

10664 Getting to that, if you want to take that view of what the editorial board is, I would submit once again it has nothing to do in Canadian journalism history and practice as to what people are going to read on the front page and are going to read on all those other pages of the newspaper, with the exception of the editorial page, the off editorial page, and in some newspapers the page before the editorial page, three pages of the newspaper.

10665 If you are talking about the editorial board being the classic idea of those folks who do the thought and the columns and the letters, if that is what you are talking about, then I would submit again that no. 3 isn't so meaningful, because the decision about what news you cover, what the agenda is and how you do it, and what stories are given more emphasis and which stories are given less emphasis have nothing to do with the editorial board.

10666 If anything -- and I am glad that I put it this way so we cleared up for you what the editorial board is. Numbers 2 and 3, to us, are very much the top of a very thin sheet of ice. There is not much there.

10667 THE CHAIRPERSON: Are you saying no. 3 is not needed or it should be strengthened?

10668 MR. AMBER: I am going to take the idea that both 2 and 3 should be rewritten.

10669 THE CHAIRPERSON: To do what?

10670 MR. AMBER: To make them meaningful.

10671 Let's go back to 2. If you really want to go to 2 and what they are trying to sell you here is the idea that there will be separation, let the words about the separation of the news operations go beyond the management structure and go right down to the point where newsrooms will be separated.

10672 THE CHAIRPERSON: What I have written in the margins here: separate news operations. That is your rock bottom point?

10673 MR. AMBER: That is the point on that particular no. 2.

10674 THE CHAIRPERSON: And no. 3.

10675 MR. AMBER: No. 3 is good: We will not sit on editorial boards. But does this mean that David Asper doesn't get to suddenly just write one?

10676 You sit on an editorial board and you have all these nice discussions, and then the owner of the newspaper sends in an editorial and says must be printed. Is sitting on the board what determines what gets into the paper, or does the owner of the television station still have the right to submit must be printed?

10677 We have seen this now since media concentration has gone a little crazy in this country. We have seen it before Ed Hollinger, where Mr. Black availed himself of the opportunity.

10678 There is an old saying in journalism: Freedom of the press is there for those that own it. Now we are seeing freedom of the press in some respects in Canada and freedom to get your opinions expressed in newspapers in Canada is left for those who not only own newspapers but maybe for those who own television stations or networks.

10679 THE CHAIRPERSON: That is not our role here as the regulator to decide whether the owner of a newspaper can get his position stated in his newspaper, or any other newspaper for that matter.

10680 MR. AMBER: I am actually trying to answer the question why we think no. 3 is inadequate.

10681 No. 3 is nice, but no. 3 doesn't necessarily deal with the real issues.

10682 Let me go to another issue.

Global news managers will not sit on editorial boards of any newspaper owned or controlled by CanWest.

10683 I think we all have enough life experience to know that you don't have to put somebody on an editorial board who will work in line with somebody from CanWest on the television side. You don't need the person working in CanWest to suddenly sit on the newspaper board. You can appoint people who will understand what the interests of CanWest are and what the interests of the newspaper are, going in. And we expect that those kinds of issues always exist in any hierarchy, in any structure.

10684 So no. 3 is nice, but if you think it actually is achieving a whole lot about what the news operation is, I am afraid you are wrong. In some newspapers the editorial board functions are not even anywhere close to the newsroom. In some old newspaper buildings, they weren't even on the same floor.

10685 THE CHAIRPERSON: If you look at the code, the fundamental principles here are in 2 and 3 that they are putting forward.

10686 MR. AMBER: And they are inadequate.

10687 THE CHAIRPERSON: No. 4 just says:

We will establish an internal mechanism to deal with complaints about the principles.

10688 No. 1 says:

We will abide by the Broadcasting Act.

10689 MR. AMBER: Which is nice.

10690 THE CHAIRPERSON: Which I would guess they would have to do anyway.

10691 MR. AMBER: Yes.

10692 THE CHAIRPERSON: And no. 5 is they:

... maintain their membership in the CBSC and statement shall be communicated to employees.

10693 So the real principles are in nos. 2 and 3.

10694 MR. AMBER: Yes.

10695 THE CHAIRPERSON: We have talked about your concerns about those. What else would you have in here?

10696 MR. RAVENSBERGEN: We would urge the Commission to look to the decision made in 1997 with TQS. We will paraphrase from the decision: The Commission expects that the news service of -- in this case CanWest, Global or Global's television stations and network -- will remain separate from those of -- and we can list off all the newspapers -- and any other newspaper, print, publications owned by CanWest and that these will carry on its editorial policies independently.

10697 That is the bottom line. It is simple. It is elegant. It removes the need for this huge cumbersome mechanism that doesn't seem to have any enforcement capability.

10698 You have an opportunity here to sort of set us on the right path. Seven years, as Arnold said, is a long time. In the Internet age I guess we could call that half a century. I would hate to think a half a century down the road.

10699 But if you folks can give the path that separates the newsrooms that is very clear, then a lot of the convergence elements and the business elements that have been brought to the table by Global and CTV can certainly, we presume, be carried out.

10700 At that point, the economic needs can be served. But the need for diversity will not be sacrificed.

10701 THE CHAIRPERSON: Did you have an opportunity to see the point that the Friends of Canadian Broadcasting put forward yesterday in their intervention?

10702 MR. RAVENSBERGEN: I got a brief look at it in one of the papers. It has been kind of busy.

10703 THE CHAIRPERSON: It is a fairly simple statement as well: We undertake -- we, the Global television or CTV -- to ensure that our television newsrooms will gather information independently from the newsrooms of newspapers in which we have a financial interest.

10704 MR. RAVENSBERGEN: Independently of newsrooms in which we have a financial interest.

10705 THE CHAIRPERSON: Right.

10706 MR. RAVENSBERGEN: So that goes one way. What about the other way would be my off the top question. You have a pool of bodies, I guess as they refer to in the industry, out there pulling in news, presumably as a news crew. Some of that stuff can be filtered back the other way into the print system.

10707 Here what the Friends of Broadcasting have done -- at first blush what they seem to have done is said it pulls out of the newsroom. What about going the other way?

10708 If we have a commitment to diversity, if we have a commitment to having multiple news operations, then having the information flip back and forth is a difficult concept here.

10709 THE CHAIRPERSON: Do you acknowledge any benefit to be gained from this combination?

10710 Some people have suggested that it is rather Draconian to suggest that the news reporters in the newspaper and in the television operations shouldn't even be allowed to talk to each other about stories or work together on some stories.

10711 Is there no benefit to be gained by that sort of thing?

10712 MR. RAVENSBERGEN: The TQS code de déontologie is very strict. In terms of benefits to be gained to the enterprise -- I am thinking of CanWest or, for that matter, BC and CTV. All of the CanWest employees and National Post employees got a very detailed memo from Leonard Asper back in January detailing the integration team and all of the different things that the Pricewaterhouse crew was doing. You look through that and there are 11 items identified and only two of them are in any way impacted by what we are suggesting today.

10713 There is a lot of economic things going on, and I don't think anybody necessarily wants to get in the way or is in a position to get in the way of the invisible hand in terms of strategic sourcing. Two newsrooms or 50 newsrooms buy paperclips. Well, you get a better deal on paperclips if you buy in bulk. Everybody who goes to Bureau en Gros does the same thing, no problem.

10714 Circulation system replacement. Yes, the computer systems are pretty outdated and need work. Nothing that the Commission will do will impact that. That is another benefit of synergy.

10715 We can go right through this memo, and three are only two areas, cross-promotion and content sharing, that are possibly impacted, and the other is new products.

10716 Cross-promotion is not hurt. We see cross-promotion galore these days. Look at the pages of The National Post. You are seeing Global advertised. And CTV and BC are doing much the same thing through The Globe and Mail. There seems to be some sort of positioning there.

10717 None of that would be impacted by you folks saying separate newsrooms.

10718 THE CHAIRPERSON: I wanted to stick to the issue of journalism and investigative journalism. Do you see no value in enhancing, as some people have suggested to us; that in fact there is a huge downside to keeping this whole thing separate because we are missing a wonderful opportunity for more in-depth investigative journalism by having these crews work together.

10719 MR. AMBER: One could see where newsroom A, being television, and newsroom B, being newspaper, work together on projects from time to time. I think it is equally wrong to say never shall someone from The Globe and Mail speak to someone from CTV.

10720 The other thing about it, as I said before, don't make regulatory conditions which no one can keep. I submit to you that no one will ever be able to enforce this journalist is not allowed to talk to that journalist. Journalists love to talk, and especially to each other.

10721 I think the idea of joint projects, they are happening all the time.

10722 For example, the CBC is involved from time to time with Macleans magazines doing a poll, doing a study, doing this, doing that. These things are happening all the time, and they probably are producing as major projects, are producing better journalism.

10723 Our concern is not about those kinds of special projects or when the reporter from The Globe and Mail talks to the reporter from CTV. We are interested in making sure that there is a reporter from The Globe and Mail and there is a reporter from CTV. That is our concern.

10724 If you look at the combined numbers of journalists that were employed in the newspaper industry and television industries over the years, when I look back seven years and I look to today we are losing people at the local levels right across this country. The corporation that I work for, the CBC, is part and parcel of that: less and less local reporting.

10725 Some of the other stations as well have less and less television reporting. Newsrooms have cut away back on the number of reporters they have.

10726 Some of it in certain cases may very well have been justified. Maybe three is no longer a need for 22 reporters when 19 will do it. But I think the numbers that we look at are above and beyond that; that the decisions made to use more wire copy from the Canadian Press is because newspapers, particularly since Hollinger took over, have decided that local news, which is what people want most, has given way to taking a cheaper, less expensive route to putting out the paper.

10727 Bottom line considerations are there. What one is concerned about is will they continue to go on.

10728 THE CHAIRPERSON: What I am struggling with then -- presumably we have to recognize that potential synergy that is there and not compromise that opportunity as well.

10729 Given that, how do we strike from a regulatory point of view? It has been your view that we have to have a strong code; it has to be stronger than this code. And the rock bottom point, as I understand it from your point of view, is separate and distinct news operations.

10730 MR. AMBER: Right.

10731 THE CHAIRPERSON: And yet not necessarily prohibiting the opportunity for those people to perhaps work together on a story. In fact, you could be precluding from them working on a story with a newspaper they own when they could do it with a newspaper that they didn't own, which wouldn't presumably fall within the regulation.

10732 MR. AMBER: That is why we said to you that people in the case of The Globe and Mail working with people from CTV on a special project doesn't seem to us to be bizarre. What would be bizarre is if there was one operation for both.

10733 THE CHAIRPERSON: So how does one capture that, then?

10734 MR. AMBER: I think one captures it by definitely insisting in the conditions of licence that each and every television network and station in the case of Global in fact continues to have its independent newsroom. Making decisions about whether or not to go into a project with the television arm, or vice versa, strictly on the way they may do it now.

10735 THE CHAIRPERSON: How do you measure independence, then, if we are going to allow them to work together on stories?

10736 MR. AMBER: I think you measure it because if people actually have news operations and have independent news operations, I think you do set up a competitive -- right now there exists a competitive nature between newspapers and television stations. Newspaper people like to sit around with you over a drink that night and say: "Well, everything I just saw on the 6 o'clock news was in our paper this morning."

10737 There is a competitive feel about it now, and that we would suggest might continue.

10738 Let me go back and say to you that you have a very difficult issue. We are facing a point here where media concentration in this country is worrisome. It isn't just a figment of anybody's imagination. It is an issue which I think comes right at the heart of one of the foundations of our democracy. Media concentration is in this country like no other country. Media concentration across the world exists like it never has in the past.

10739 Years earlier this particular commission would be taken up in a very serious way if a newspaper wanted to establish a television station in that same city and you had various rules and regulations about cross-ownership. Now we are talking about something that is so much bigger that in some respects it is almost hard to figure out.

10740 But one thing that I think must be a guiding principle is that we do not have the right to tell people where to put their money in this country. If people want to buy things, they can go and buy newspapers.

10741 When it comes to the airwaves and the regulation of public airwaves, I think there is a regulatory possibility for you here.

10742 Is it difficult to get to the answer of the separation? I think it is really difficult, because in the end all the regulations will not allow for a total separation. In some respects you are dealing with humans who spend a lot of time figuring out how to get around things.

10743 However, if the conditions going in are not sensibly stringent -- and I use the words sensibly stringent because I do think saying to a journalist who works for The Globe and Mail "you cannot talk to someone from CTV" is bizarre.

10744 THE CHAIRPERSON: In your view, we have to try and come up with some way to have a code or a commitment or a regulation or a condition of licence on the broadcaster that would ensure separate and distinct news operations, yet at the same time would not preclude those separate and distinct news operations from being able to work together on some stories.

10745 MR. AMBER: That is probably --

10746 THE CHAIRPERSON: And should be a very easy thing to regulate and monitor.

10747 MR. AMBER: We have been using terms like special projects. We think it would be wrong, for example -- let's take Montreal. If there was one City Hall reporter, it's not a project to decide that The Montreal Gazette and the Global station will share one City Hall reporter. That is not a project. A project is -- let me just make this up -- that there is some investigative piece that people want to do about building codes in Montreal, so the television station journalist and the newspaper Montreal Gazette journalist work together to expose the whatever. That is a project that they both work on.

10748 But when it becomes that we will have one City Hall reporter and we will only send one person to Quebec City to cover the legislature, I don't think there is a big difference between daily news operations and special projects.

10749 I think one of the reasons why -- we mention the time, that seven years is a long time to allow new modes to be tried out under this combination. We have never faced it before in Canada where television stations will own so many newspapers in the same locales. That is why we talked about the seven years being a problem.

10750 Another thing that you might do -- because I know you are as concerned about this as we are -- is that you might have them come back in a couple of years to talk about this very issue.

10751 I know that in other licences you have granted in the past you have granted them with the idea that there would be reviews on a periodic basis about the carrying out of the conditions of that licence.

10752 We are all going some place we have never been before. Canada has never had a media scene like this. If ever before it needed somebody to step in and say in addition to all the other interests, all the other interests, there is this public interest which is supreme, now is the time.

10753 If this much has happened to us since the Hollinger empire grew up in 1996, in less than five years, one really worries about where we may be headed in the next five years. That is why we are talking about this.

10754 THE CHAIRPERSON: I want it to be at least three years because at a person level, that is the rest of my term.

10755 Let me ask you about complaint mechanism. The applicants have talked about the Canadian Broadcast Standards Council and referred to the Press Council. CBC has largely been an opportunity for the general public to complain about television or radio programming as against particular codes that have been established there.

10756 From a journalistic point of view, what do you think would be an appropriate complaint mechanism to be able to deal with complaints about this issue of separate journalism and then trying to draw this distinction between special projects and commoditized news, or whatever.

10757 Is this process effective, or is three another one that would be more effective in your view?

10758 MR. AMBER: I don't think this one addressed the question that you just put. I think that these are all interesting nice little things.

10759 In the end, when someone gets a licence, the question is: If it is a restaurant and they are breaking the health code, does somebody from the health department go in and close the restaurant? In this particular industry we don't tend to close people down.

10760 So the question about it all has to do with some sort of enforcement mechanism. I don't think it is too difficult to get a panel of people that are not representative of labour; they are not representative of the owners; they are not representative of anybody but people who have some understanding of how journalism works to tell you whether or not suddenly there are too many projects between CTV and The Globe and Mail.

10761 I think that is the easy part. The question always is: Where is the enforcement capability?

10762 When you asked me just a few moments ago to talk about this, you allowed that maybe it is the code; maybe it is this. We are saying to you it just isn't the voluntary code; it must be a regulatory condition.

10763 THE CHAIRMAN: Thank you. I think Vice-Chair Wylie has a question.

10764 COMMISSIONER WYLIE: Yes. You mentioned how unrealistic it was to prevent journalists from speaking to one another.

10765 We certainly wouldn't want to think that any budding relationship after this long hearing between one and the other would be stopped by us.

10766 What is lost track of here is what it is that they are not supposed to speak about, to fax to each other, send by any technology to each other, and receive from each other, is a defined term of information. I know, it's not that simple and you can't prevent people from telephoning one another and perhaps going beyond nurturing the relationship that has started in the Hull hearing room, but it's not that.

10767 The impression that is now growing is that the Quebecor Code prevents people from speaking to one another. It prevents them from exchanging information which is defined as documents that have not yet been published or broadcast by any media outlet, are not yet in the public domain and are newsworthy. I understand that it's not that simple to enforce, but neither is it preventing people from developing relationships of any kind as long as they are not exchanging news.

10768 MR. AMBER: I think it's really appropriate that these remarks are made in springtime when a lot of relationships are developing, but you know what I really liked about what was in the Quebecor agreements is that it actually tells you about the spirit of what people want to get at and in that respect it is far better than some very ambiguous deliberately sentences that appear in this code which I think are written that way in order to confuse and to present a different side of it.

10769 I think that what exists in the other agreement is definitely the concern that the Commission and the concern, because they agreed to it, that was taken on by Quebecor, and I think that that comes out loud and clear.

10770 We are arguing as well though that let's try to get something that is also fairly practical.

10771 THE CHAIRMAN: Thank you very much, gentlemen.

10772 MR. AMBER: Thank you.

10773 THE CHAIRMAN: Mr. Secretary.

10774 MR. CUSSONS: Thank you, Mr. Chairman.

10775 Our next intervenor is Barna-Alper Productions Incorporated.

INTERVENTION / INTERVENTION

10776 THE CHAIRMAN: Good morning, Mr. Barna.

10777 MR. BARNA: Good morning. Thank you very much for giving me the opportunity to appear. I will try to be brief because my parking meter runs out at 11:47 and the last time I was bounced for being long.

10778 I want to talk to you about a couple of things. I want to talk to you about the experience at Global Television from the point of view of an independent producer.

--- Pause

10779 We produce series. We work with a variety of broadcasters. We make "DaVinci's Inquest" for CBC Television. We have worked with CTV, made a movie called "Milgard" and our first substantial experience with Global started two years ago when I ran across a script by Steve Lucas. Steve had written a wonderful mini-series called "Major Crime", made for the CBC. It was a mystery I liked a lot. I thought a great deal about who I should take it to, and since we had no practical working relationship with Global, I thought it was time to strike one up.

10780 From the outset the process was easy, supportive, creatively rich. We were greeted with enthusiasm. Six scripts were developed and then came the greatest test of the relationship with a broadcaster, when you reach a point at which everybody has signed off creatively, you have to ask yourself, "Are they actually going to make the financial commitment and go with the project?". And within a year, after a development, after all the creative discussions, Global ordered the series. It was a great compliment, not only to the development team, but to the entire organization that the commitment was consistent, that there was no gap between the desire to do things and actually putting up the money to do it.

10781 While we did the series, the network was very supportive, very hands on, gave lots of notes, and when we got to the launch, there was an on-air campaign that was very thorough.

10782 The series was launched in January and from August on "Blue Murder" was a feature of Global Television on a rotational basis, so there was some very heavy advertising for the series and we greatly appreciated that.

10783 It's very interesting to listen to people talk about the enormous changes that we have seen in the past seven years. Consolidation has been tremendous and it's presented terrific opportunities for the independent producer. We have become stronger, and we have become stronger, by the way, because the CRTC has been wise in its decisions to protect the independent producer and the independent communities.

10784 Its concern for regional voices, its concern that certain levels of spending happen indeed have benefited us, as has the proliferation of channels. So in that regard industrial change, when you look back to how it was seven years ago to how it is currently, is so much better because there is so much more opportunity to present the networks.

10785 In this regard, as a result of consolidation, one of the holes that sort of popped up last year is that the phenomenon of Canadian distributors has virtually disappeared.

10786 The key distributor right now that plays a role and is the pillar of distribution is Alliance Atlantis and I think it's pretty well common knowledge and the desire of the community that there be more distributors allowed to play and what it looks like is broadcaster-affiliated distributors will be given a role to play.

10787 I just want to take this moment to say that it is a necessary step. We have concerns about it. We have concerns about because broadcaster-affiliated anything is potentially a threat to the independent. But at the same time, we are in a situation right now that if AA -- Alliance Atlantis -- does not take a particular product, you are forced to do business off shore and there are companies, Fireworks for one, that were ready to play this year and I look forward with interest of the extent to which they will play a part in the broadcasting system next year.

10788 Now because they are not towing me yet, I thought I would just talk about diversity a little bit, if you will indulge me, because it's fascinating to hear the discussion about separate newsrooms and I want to give you a working aspect of how an independent looks at it and someone who comes from a culture that is like more than seven years old.

10789 I have been in television for 20 years. I look at this convergence from -- well, just generally speaking, I'm delighted that the companies have grown. I'm delighted because I feel that our broadcasters have to have the strength and the staying power and the stability to play not only a vital role here but also abroad. You cannot be dealing with broadcasters who have stood still and their pockets are empty. So from a structural point of view, growth is good.

10790 For many years, all of our television movies, "Milgard", "The Sue Rodriguez Story", "Diana Kilmurry", "Scorn" were all based on stories that we acquired from the newspapers. We do about 36 hours of programming prime time documentaries and almost all of our documentaries are produced by journalists who are by and large trained at the CBC.

10791 We in the independent community, and particularly documentary producers, but there is an overlap to drama as well, have looked at the sophistication of newspaper journalists. They are all informed. Their research is often deeper than we are accustomed to in television.

10792 While I understand that there are concerns about convergence and in particular, what I heard expressed here, a concern that the ranks of the newspaper journalist and the television journalist will be thinned out, I applaud the notion that one newsroom benefits the other. I applaud the notion that -- well, take Quebec City for instance. I thought the on-air coverage was terrible. I thought it was terrible because it was largely terrain that offends and there were photo ops, and there was very little substance to it. You had to wait until the newspapers presented the same conference with the words that took to very different levels, operating in a freedom of thought, of not having to actually capture pictures.

10793 So the notion that you expressed which is how do we regulate this whole thing without it stifling the creativity of people who are reporting on our country is a very good one, and I think that the bottom line in that regard would be if convergence and mergers ended up as an overall issue, as a way of cutting back on staff on each and every institution, the newspapers on the one hand and television stations on the other.

10794 THE CHAIRMAN: Well, I think Commissioner Grauer has about a minute and 30 seconds to ask you a question without her having to be responsible for your parking ticket.

10795 COMMISSIONER GRAUER: That's good. You can to soon, I promise.

10796 What I would like to do -- I appreciate the comments you have made with respect to your relationship with Global and noted them. We had an interesting discussion this morning with Mr. MacLeod from Alberta Filmworks -- and I don't know if you were here for it. I think what we heard was some discussion of the particular challenges that face small and medium-sized producers of indigenous Canadian drama -- and I expect that describes you as well.

10797 So again, and I made my comments about Global earlier in that I expect the general challenges and issues you face as we are going along -- I think you talked a bit about the distributor piece. We certainly heard about that from the Writers Guild and some others who have been here, how important it is to have some competition with respect to distribution.

10798 I wonder if you could just elaborate for me a bit on the financing issues. What we heard this morning was that they are not necessarily all with respect of the broadcasters, that there are a lot of challenges with respect to the number of government bodies involved, funding bodies, regulatory bodies, and whatnot, that might be presenting the small and medium-sized enterprises with perhaps challenges that the big guys don't face.

10799 So I wonder if you could just talk a bit about that, and the importance of development money.

MR. BARNA: The system is a bit of a mess, that's no secret. The financing scenario is such that we seem to have reached a saturation rate vis-à-vis how much the subsidy component could help out and help finance the system.

10800 All broadcasters, including the CBC, are now hooked like you would be I guess on heroin, on the subsidy system providing for roughly 50 per cent of the entire licence.

10801 Were it not for the fact right now, I think we just went -- I think it was on Monday that Telefilm announced what projects and big dramas were going to go and what had failed, and the reality is that were far more many orders than completed financing available for that.

10802 I know I had one, a lovely project with YTV, that just simply failed for no other reason than because there is not enough money in the subsidy system, and it's very interesting, you know, with the commitments that Global is making, for instance, it will be really interesting to see if the other parts of the system could hold up their part of the deal, or whether or not we are going to get to the point, at some point, where the broadcasters are going to pay a higher price for the product in order to replace the failing subsidy systems.

10803 The B.C. Fund, the CanWest Fund operating out west, now the two funds almost equal in size, the money is available through Heritage on the one hand, and through the CTF on the other.

10804 The tax credit system is like crazy. I think it was instituted originally to help grow companies. It has become a system in which its sole and only purpose is to enhance licences and small producers like ourselves are paying enormous interest charges to banks who are great beneficiaries of the whole system right now, and not benefitting from the tax credits in the way that they were intended. They are ugly to administer, they take forever to get in, and they are just a chunk of financing and they are a real ball and chain.

10805 To give you an idea both on "Blue Murder" and on "DaVinci's Inquest", each series are both roughly about a million an episode. So a series would cost about $30 million to do. The Royal Bank, or whatever bank is doing the financing, is getting about a half a million dollars to finance tax credits for the show.

10806 That's a huge amount of money and it started at $200,000 and it's up to half a million and God knows where it will end up. So it will be the "Royal Bank Show" was brought to you --

10807 So I think that's an issue and I forgot my two other questions.

--- Laughter / Rires

10808 COMMISSIONER GRAUER: So did I, but maybe what I will do is to go to my next two which you can answer together or separately.

10809 Many of the issues you have raised are of course not within our jurisdiction or purview, and I am curious to know what if anything -- if you are aware if anything is being done to try and address these issues, number one, and number two, is there any way in which we can be part of the solution? Are we part of the problem, and if so is there a way that the Commission can be part of the solution?

10810 MR. BARNA: You are part of the problem, for sure, but in a good way. You know, it's very interesting how over the years the CRTC has been forward-looking, forward-looking in the sense that you have embraced change rather than restricted change.

10811 You know, we have a fundamental problem. The commercial value of the programming, given our audience base, is simply not ever going to beat the cost of production.

10812 When you are producing for U.S. television -- well, just for instance, if "E.R." one episode costs more than an entire season of "Blue Murder", and there is no way on earth that any broadcaster, not Global, not CTV, et cetera are ever going to pay the price. They cannot. They can probably pay more, we are not privy to the internal workings and the profit ration, and so on, and so forth, but can you be part of the solution?

10813 I think you have been in the sense that you given the writers in this country, the producers in this country so many more outlets, so many more venues. You have also instilled the notion of Canadian content. I didn't hear it directly so I shouldn't probably comment on it, but I heard that CBC called for, "We will do the Canadian programming. Let the other broadcasters --". Wrong. I think the notion of what you have handed to the creative community is opportunity. To whatever extent you can influence that other part of the system that protects culture and subsidy that would be great.

10814 COMMISSIONER GRAUER: Quickly, the other piece you forgot -- development money. How important is development money in the whole grand scheme of things?

10815 MR. BARNA: It's extremely important. I will give you by contrast the situation in the feature film industry and television industry.

10816 In television, we have the ability to pay writers what they are worth because we have a functional system, an overlap between Telefilm broadcaster and producer investment that generally gets the funds together necessary to development. Development is almost exclusively to the benefit of writers.

10817 We don't, and I know of very few producers who actually make any money in development. We make money by not losing money and so when we walked into Global and Global was there, and allowed us to flesh out the series in a way that was necessary without sort of penny-pinching it, it was not only ultimately strong from a creative point of view, but also it enabled our writers to live like human beings.

10818 COMMISSIONER GRAUER: Thank you.

10819 THE CHAIRMAN: Apparently Commissioner Cardozo would rather pay your parking ticket. He has a question.

10820 COMMISSIONER CARDOZO: I have a quick question.

10821 Don't worry about your car being ticketed here. They don't ticket cars in Hull. They just take them away.

--- Laughter / Rires

10822 MR. BARNA: Can you drive me? Can we go on a road trip?

--- Laughter / Rires

10823 COMMISSIONER CARDOZO: A quick question on scheduling. "Blue Murder" is at ten o'clock on Wednesdays and "DaVinci's Inquest" is on Tuesday nights. Is it better to be on a weekday night when you are up against the big American shows like "Law & Order" and "West Wing", or would you rather a different time when the competition isn't as big but the number of viewers may be less?

10824 MR. BARNA: We would like, with your help, to shut down the other programs.

--- Laughter / Rires

10825 COMMISSIONER CARDOZO: Okay --

10826 MR. BARNA: Because I think your point is well taken. We hate it --

10827 COMMISSIONER CARDOZO: Sort of plan B.

--- Laughter / Rires

10828 MR. BARNA: Plan B would be, you know, you beg and you whine. It was rough for us in both the series. We were up against the "West Wing" and it was like just horrible. Every time you would get a chill down your back when it said "brand new episode". God! A brand new episode of "West Wing" coming. But eventually they moved because it was impacting us negatively.

10829 And the same with "Law & Order" and it is a bit of a challenge finding the right slot. We have assurances from Global that next year will be a banner year and a good year and they are going to try to find a slot for us where we are not up against a new episode of "Survivor Two".

--- Laughter / Rires

10830 I would say only this though that just sort of modifies a little bit, and this is more from my experience at "DaVinci". The mainframe broadcasters are learning that repeats have depth and a value.

10831 You know, I do a lot of work for History Television and Discovery Television and while they note the original ratings on their premiere night, they look at what the cumulative ratings are for a week. "DaVinci" because it has been a repeat, so I can measure it, sometimes "DaVinci" on repeats is stronger than the original broadcast and the network which used to operate on a scheduling where they would take a program, run it once, two years later take another run, now started running all their runs within the first year and will get $800,000 on the first broadcast and $720,000 on the second and $600,000 in the summer and most of those of those people are new viewers.

10832 And what do I care? As long as the reach is there, and if I know that 1.3, 1.5, two million Canadians will have seen a particular episode of "DaVinci" before it goes to the second run on Showcase actually, I'm happy. What else can you ask for? That's a lot of Canadians.

10833 COMMISSIONER CARDOZO: You haven't really answered my question and I'm not sure I can pay your parking ticket.

10834 What is the best time -- I appreciate your answer all the same -- for your type of show? It's big drama.

10835 MR. BARNA: Well, it shifts all the time, but definitely prime time, nine, ten o'clock at night. There is no specific night because the schedule shifts all the time. It's a cat and mouse game between the various networks to see who can catch the most audience.

10836 COMMISSIONER CARDOZO: So you don't mind getting shifted mid-season to try and get a better slot?

10837 MR. BARNA: Well, the thought is to improve the ratings and if it's well advertised then we would lobby for it if we are getting killed in a particular slot.

10838 You know, next year CBC will be moving all of their dramas to Sunday night. So don't make plans.

--- Laughter / Rires

10839 COMMISSIONER CARDOZO: Thanks very much.

10840 MR. BARNA: Thank you.

10841 THE CHAIRMAN: Well, we will do what we can to get rid of the other guys. I'm sure nobody will claim that's unconstitutional.

--- Laughter / Rires

10842 MR. BARNA: Thank you.

10843 THE CHAIRMAN: Thank you, Mr. Barna.

10844 Mr. Secretary.

10845 MR. CUSSONS: Thank you, Mr. Chairman.

10846 The next intervention is by Peace Arch Entertainment Group Incorporated, Mr. Tim Gamble.

INTERVENTION / INTERVENTION

10847 MR. GAMBLE: Geez, that's not me in the monitor there, is it? It looks like my father, but anyways --

10848 THE CHAIRMAN: It happens to all of us.

10849 MR. GAMBLE: Yes.

10850 I'm really pleased to be here on behalf of Global and speak on their behalf. But first by way of background, Peace Arch Entertainment is a company that I formed in 1982. It seems like a long time ago, I guess, because it probably is.

10851 But seriously, although the past 20 years have really been terrific for us, I think the most significant day for us was on February 14, 2000, not because it was Valentine's Day, but because it was the day in which Global gave an order for 22 episodes of "Big Sound" and what made that interesting was it was a series that we had created, we had conceived and we had dreamed about. It was also a series that for the first time allowed us to access Cable Fund, allowed us to access Telefilm in a meaningful way.

10852 This enabled our company to really build a significant asset which really enhanced the value of our company. We were then able to complete a seven-million dollar financing which allowed us to invest in new projects.

10853 So last year, in addition to the 110 people we employed on "Big Sound", we employed an additional 500 to 600 people on four other series and six movies. Now incidently two of those movies we also did with CanWest Global.

10854 It also opened up a whole new area of production for us. We were pretty good at producing the one-hour dramas so the opportunity to produce our own comedy was terrific. It attracted a very special cast and a crew who felt a unique connection and ownership to the show. In fact, when the show wrapped it felt more like leaving summer camp than it did work.

10855 You know, comedy and music are something we as Canadians have tremendous success exporting. Whether it is David Thomas or Davis Steinberg, Randy Bachman or Jann Arden, "Big Sound" profiles Canadian comedy and music stars in a very creative way.

10856 As a result of "Big Sound" and its success, we are now producing a new half-hour comedy series, and I believe the area of half-hour comedies in Canada is a terrific growth area.

10857 Equally important to Global's commitment for the licence fee was a commitment to promote the show. Last year during January, during the run of the Super Bowl they ran extensive commercials for "Big Sound" and they continue to aggressively promote the show.

10858 Finally our time slot. You can watch "Big Sound" tonight at nine o'clock and we are very proud that we are right in the sweet spot of Global's prime time lineup.

10859 In summary, Global's commitment last year put us in a whole new league in terms of corporate profile which opened up many new doors for us. This year, Global promptly renewed, Cable Fund renewed and on Monday Telefilm renewed.

10860 For all of this we are very grateful and for that reason I'm pleased to be here on Global's behalf and I'm pleased to answer any questions you might have.

10861 THE CHAIRMAN: Thank you for your presentation.

10862 I will turn to Commissioner Cardozo.

10863 COMMISSIONER CARDOZO: Thank you, Mr. Chair.

10864 Thank you very much for your presentation.

10865 Just a few questions. One of the issues we have been talking about is reflection in our Canadian content, reflection of Canadian people and in that sense we have talked about local reflection and reflection of cultural diversity, ethnic diversity, and your show was held up as an example of doing just that on both scores.

10866 Can you tell me a little bit about how you go about doing that in terms of the way you plan the show or you cast people?

10867 MR. GAMBLE: Well, you know, I don't know that it's intentional but it really is just a reflection of the nature of our program and the nature of our geographic location. We are trying to produce a show, reflect the diversity of the music industry and the comedy industry, and therefore we do have a wide variety of storylines as well as cast in the show.

10868 I'm not sure that the intention was for diversity. The intention is to reflect the nature of the industry and therefore it does reflect diversity.

10869 COMMISSIONER CARDOZO: And the local reflection of Vancouver, is it both when you pick a genre or a storyline that is clearly based on a place and reflects certain things? Are you saying if you are honest to the reality of what you are dealing with you will hit those reflection issues?

10870 MR. GAMBLE: I think so, I think you do.

10871 COMMISSIONER CARDOZO: Scheduling, you have said you are now on Tuesday at nine because we had you here at 9:30 --

10872 MR. GAMBLE: I think it's Wednesday at nine.

10873 COMMISSIONER CARDOZO: Sorry, Wednesday. We are on Wednesday already.

10874 MR. GAMBLE: Yes.

10875 COMMISSIONER CARDOZO: Oh God! That means this hearing is over today. How sad.

10876 So you moved from Monday night to nine o'clock.

10877 MR. GAMBLE: Right.

10878 COMMISSIONER CARDOZO: How do you feel about being up against something like the "West Wing", if that's what runs on Wednesdays.

10879 MR. GAMBLE: Well, you never really know in television. If we knew all the answers I think we would all be David E. Kelley, but having said that I think it's good counter-programming. I think it happens to be a great spot. I think our audience may not be the "West Wing" audience. So in some ways I think that's a pretty terrific spot for us to be in.

10880 Somebody said there were 950,000 people who watched the show last week. That's pretty good in stiff competition.

10881 COMMISSIONER CARDOZO: And you were running on Wednesday night last week?

10882 MR. GAMBLE: Right.

10883 COMMISSIONER CARDOZO: So I guess it doesn't matter if you are up against a big show so long as you are different, you are targeting a different audience.

10884 MR. GAMBLE: Yes, I think that's true, and I think it is good counter-programming to "West Wing". I think the other thing that is important is the continued promotion of the series, and really Global has done a terrific job of promoting the series in very expensive time slots, like I said in the Super Bowl which is -- you know, they are giving up very expensive ad time to really promote our show.

10885 COMMISSIONER CARDOZO: So what's the best way of promotion?

10886 MR. GAMBLE: Well, in their case it has been on-air promotion and I think that we have also been very successful in creating a kind of Internet presence, and we have really used the Internet to really enrich and add value to the brand of the show. So if you have very successful forums, when we have celebrities on the show, the celebrities all have their fans and so their fans participate in the forums. So in addition to kind of supporting the brand of the show, it gives us very instant feedback in terms of how the show is doing.

10887 So it allows us to really rethink certain types of storylines, rethink certain types of characters.

10888 COMMISSIONER CARDOZO: I suppose you are going for somewhat younger demographic than say "DaVinci's Inquest" or "West Wing". Would that be a demographic that is more Internet-friendly?

10889 MR. GAMBLE: It could be, and I think the combination of music and comedy are very conducive to the Internet. And so you are right, it probably is.

10890 COMMISSIONER CARDOZO: I noticed that you are up against "Ally McBeal", before it. This is probably a better spot.

10891 MR. GAMBLE: I think it is. I would think that those were similar audiences.

10892 COMMISSIONER CARDOZO: We talked about advertising though on this hearing and one of the issues that is talked about is product placement, and I'm wondering if you have dealt with product placement. Yours is a very hip show where people are doing things including cans of pop and stuff like that. Have you dealt with that issue?

10893 MR. GAMBLE: We haven't really dealt with that yet, but I do think that is probably the future. You know, as the TV viewing machines get more sophisticated and they can sort of take out commercials I think product placement is going to be an important source of revenue down the road.

10894 COMMISSIONER CARDOZO: Lastly, on the issue of regional production, you are Vancouver based. Do you think there is a need for us to press broadcasters to look for shows and run shows that are produced outside Toronto, or do you think that will happen naturally?

10895 MR. GAMBLE: Well, I think it certainly has happened and if that's a result of what you have done in the past, it certainly worked, and it certainly has made a difference for us that broadcasters now are concerned with producers in the west, so it's been terrific for us. And so I think that is probably a reflection on your policies of the past.

10896 COMMISSIONER CARDOZO: And you don't think we need to be any stronger about it?

10897 MR. GAMBLE: You know, you don't want to get greedy. I think we can be thankful for what we have and we have been very fortunate and I think that there is a lot going on in the west, and sure we want more, but there has been a lot done in the west recently. So I think it has been terrific in a lot of ways.

10898 COMMISSIONER CARDOZO: Those are my questions.

10899 Thanks very much.

10900 MR. GAMBLE: Thank you.

10901 COMMISSIONER CARDOZO: Thank you, Mr. Chair.

10902 THE CHAIRMAN: Thank you, Mr. Gamble.

10903 MR. GAMBLE: Thank you.

10904 Mr. Secretary.

10905 MR. CUSSONS: Mr. Chairman, our next intervention is Salter Street Films, Mr. Charles Bishop.

INTERVENTION / INTERVENTION

10906 MR. BISHOP: Good morning.

10907 THE CHAIRMAN: Good morning, Mr. Bishop -- or it's afternoon now, I guess.

10908 MR. BISHOP: Yes, it is afternoon. I must be the last one before lunch perhaps.

10909 THE CHAIRMAN: No, there is actually one more and I can say that Commissioner Cardozo is going to take us through to lunch.

10910 MR. BISHOP: My name is Charles Bishop and I am Vice President and head of production at Salter Street Films in Halifax.

10911 Prior to joining Salter Street, I ran Charles Bishop Productions, an independent production company based in Halifax. I ran that company for about 15 years.

10912 I sold my company to Salter Street in 1998 because I saw the opportunity to help grow the company and its regional base of production activity.

10913 My association with CanWest Global began in 1997 when I produced my first half-hour drama "Nan's Taxi" as part of Global's Atlantic Drama Initiative.

10914 This opportunity was critical to the company's evolution and the following year the show went on to win the Gemini Aware for Best Short Dramatic Program.

10915 From this first experience with Global, I went on to produce 13 episodes of the series "Blackfly" at Salter Street Films. This comedy series, which stars Ron James and Colin Mochrie, has been renewed for a second season by Global and has just been sold to the U.K. and France.

10916 I believe that these kinds of programming commitments to small and medium-sized producers in all regions of Canada by the large private broadcasters are absolutely key to the development of a broad-based diverse Canadian production industry.

10917 Salter Street Films and Global have developed a dynamic relationship that is founded on our common commitment to superior Canadian programming. It has been a priority for us and for Global to develop the right project that would utilize Salter Street's unique position as the foremost producer of comedy shows in Canada and provide Global with a hit program. The end result is the highly successful premiere season of "Blackfly".

10918 With a total series budget of $4.5 million, "Blackfly", shot in rural Nova Scotia and employing over 100 people for 20 weeks of production and post-production, brings a significant boost to the local economy.

10919 In closing, I would like to emphasize that our experience at Salter Street Films is that Canadians do watch Canadian shows, and in large numbers.

10920 We have been successful in drawing large audiences consistently to the CBC with shows like "This Hour Has 22 Minutes", "Made in Canada" and most recently over 2.7 million viewers tuned into "Talking to Americans". We look forward to delivering these kinds of results to Global in the future.

10921 Thank you very much.

10922 THE CHAIRMAN: Thank you, Mr. Bishop.

10923 Commissioner Cardozo.

10924 COMMISSIONER CARDOZO: Thanks, Mr. Chair, thanks Mr. Bishop.

10925 I just have a few questions somewhat similar to the previous intervenor. Some of the issues we have talked about, as you may be aware, are regional reflection and reflection of cultural diversity, certainly aboriginal reality, and your show was held up by the company as one that reflects the region, as you mentioned, of rural Nova Scotia and aboriginal peoples.

10926 MR. BISHOP: That's right.

10927 COMMISSIONER CARDOZO: Is that something you think about as you go about writing the show and scripting it and casting it?

10928 MR. BISHOP: Well, "Blackfly", as you may or may not know, is set in the fur-trading fort in the 1760s so all of the various people that were there in 1760 are in our show -- aboriginals, all sorts of European settlers. But there really isn't -- I mean, we didn't make a specific effort. We looked at the history and decided who would be there and who our characters were and we went from there.

10929 Of course, we were limited to the characters that you find in a fur-trading fort in 1760.

10930 COMMISSIONER CARDOZO: We have been talking about regional reflection and regional production and whether there is a role for the Commission to be pressing broadcasters to ensure that they have more product that is produced in various regions of the country.

10931 MR. BISHOP: Right.

10932 COMMISSIONER CARDOZO: Are we doing okay on that or do you think we should be pushing harder in terms of regional reflection? I'm thinking in this case -- we have had quite a bit more discussion about western production. There is a suggestion that three out of eight of the priority hours be western-based.

10933 Do you have any sense that we need to push in terms of an Atlantic basis?

10934 MR. BISHOP: I mean, Salter Street has certainly been very successful without that and I think that part of the reason for that is obviously great creative. I mean, great creative will win out. Independent and regional producers have access to broadcasters through festivals and events that go on across the country all the time, and given those sorts of opportunities, I think that they have the ability to present great creative and then hopefully the broadcasters will recognize that great creative.

10935 COMMISSIONER CARDOZO: This is probably an issue for another proceeding, but Salter Street intends to have some continuing presence in Halifax?

10936 MR. BISHOP: I certainly hope so.

10937 COMMISSIONER CARDOZO: What about within the Atlantic provinces, if you take stuff like "Codco" and "22 Minutes", these are Newfoundland-based shows that had to migrate to the great hub of Halifax. How do we deal with going beyond Halifax when we are looking at Atlantic productions?

10938 MR. BISHOP: Well, "Blackfly" is shot in rural Nova Scotia.

10939 COMMISSIONER CARDOZO: How many kilometres from Halifax?

10940 MR. BISHOP: Oh, it's an hour and a half.

10941 COMMISSIONER CARDOZO: But the point is it's a Salter Street Halifax-based company, right?

10942 MR. BISHOP: Yes, yes.

10943 COMMISSIONER CARDOZO: How do we get to the companies that are based outside Halifax, outside Nova Scotia?

10944 MR. BISHOP: I think that in Atlantic Canada the concentration is obviously in Halifax. There are other pockets in New Brunswick, perhaps, in Fredericton, and I believe some in Sidney. I think it's happening naturally.

10945 A new studio has just opened in a very small community called Shelburne down in the southshore of Nova Scotia, and extremely large facility, and there is an American feature there now shooting.

10946 So I think that the industry should evolve outside of Halifax with these kinds of film and television series going into those communities. People will become more aware of the industry and hopefully participate.

10947 COMMISSIONER CARDOZO: What about a show like "Anne of Green Gables", which I think started being filmed in P.E.I., but ended up being filmed in Toronto?

10948 MR. BISHOP: Well, I can't speak for "Anne of Green Gables", but I can speak for "Emily of New Moon" which we shot entirely in the Province of Prince Edward Island.

10949 COMMISSIONER CARDOZO: Okay.

10950 MR. BISHOP: All of the studios and all of the locations were shot on Prince Edward Island and certainly during that time many crews and production managers were trained in the industry and presumably have gone on to function in the industry in some other capacities.

10951 COMMISSIONER CARDOZO: Those are my questions. Thanks very much.

10952 MR. BISHOP: Thank you.

10953 THE CHAIRMAN: Thank you, Mr. Chair.

10954 THE CHAIRMAN: Thank you, Mr. Bishop.

10955 MR. BISHOP: Thank you.

10956 Mr. Secretary.

10957 MR. CUSSONS: Mr. Chairman, I would now like to invite the Centre for Research and Action on Race Relations to present its intervention, please.

INTERVENTION / INTERVENTION

10958 THE CHAIRMAN: Good morning.

10959 M. NIEMI: Mesdames, messieurs les Conseillers. Nous aimerions vous remercier de nous avoir accordé l'opportunité de présenter notre intervention en personne.

10960 Nous croyons que ceci représente non seulement pour les requérants du renouvellement de licence mais aussi pour vous en tant qu'organisme de réglementation de la radiodiffusion de mettre en oeuvre la politique télévisuelle et surtout pour déterminer la portée ainsi que l'efficacité de cette politique.

10961 En effet, nous ne pouvons examiner ou aborder la question du renouvellement de licence de ces deux stations de télévision sans faire référence à la nouvelle politique et surtout à la manière dont vous la mettrez en application.

10962 Our presentation will be short and it addresses two issues. First of all, the nature of the applications of CTV and Global and their performance in relation to cultural diversity, and secondly, how the CRTC must breath life into the Canadian Television Policy by establishing standards and bench marks with which to evaluate licensees performance on a wide range of issues, especially on cultural diversity.

10963 In our submission, we have noted, as an organization dedicated to racial harmony and equality in this country, that despite what the policy has outlined in terms of the expectations on cultural diversity on the part of conventional television services, we have reviewed a number of applications in key cities such as Halifax, Toronto, Edmonton, Vancouver, Ottawa, from both networks and we have come up with a couple of observations as well a reservation about how both networks perform on matters of cultural diversity.

10964 For example, most are very superficial data related to how they perform on diversity, both in terms of the hiring and the representation on air. There is a confusion between community relations, public outreach and public relations without any quantitative as well or qualitative criteria from which to establish as to whether that performance is indeed in conformity with what we would expect as a policy requirement or a policy component.

10965 We find that there are over generalizations with respect to what each station in each city does in relation to the community or the communities that the station is supposed to serve. We hardly find any policies or procedures in activities related to the issue of fair portrayal and anti-stereotyping and we did not see a lot of description or references to mechanisms to deal with community complaints or to satisfaction with how those stations perform on matters of diversity, and we also noticed in some of the deficiency responses provided by both groups there seems to be at one point, until some of the later responses, a failure to refer to systemic guidelines and procedures for determination of the nature of cultural diversity of the community they serve.

10966 For example, in the Global application our understanding of cultural diversity differs substantially from what was described in the application.

10967 Now, all these observations, which are more fully detailed in our written intervention, make for unconditional support for the licence renewal for both groups rather difficult. We do recognize, however, that this is possibly the first test, both for the licensees as well as for the CRTC to see to what extent a policy component on cultural diversity must be implemented.

10968 We would like to draw to your attention that in the policy there are two specific matters that in our opinion are important. The policy talks specifically about the:

"Specific commitments to initiatives related to cultural and racial diversity".

10969 And secondly the:

"On-screen portrayal of all minority groups in an accurate, fair and non-stereotypical fashion".

10970 So we believe that in those two matters there are certain basic standards which one can use to evaluate or measure the performance of licensees when the time comes for the renewal of the licence for the next seven years.

10971 We also recognize that there are perhaps efforts that are being made in some of the responses that both groups provided to our organization during the month of april. There is greater clarity as to how some of these networks and stations hope to perform on diversity.

10972 However, what we are looking for, especially in the context of a new policy, as well the fact that these licences last for seven years. So we don't want to feel that Canadians, particularly Canadians who belong to minority groups and aboriginal communities, would have to wait until the year 2010 in order to see a better reflection of themselves and of their communities on Canadian television.

10973 So for that reason we would like to say that we would minimally support some of the applications for licence renewal, provided there are certain safeguards or conditions put to it.

10974 We put forward a number of recommendations and proposals and we also want to take into account the fact that in the licence renewal of CBC, there is an annual reporting requirement imposed on the public broadcaster. So one of the things we would like to put forward here is that a similar annual reporting requirement be imposed upon both CTV and Global to deal specifically on diversity and equity with special emphasis on the question of racial and ethnocultural diversity because often when we talk about diversity it's like a "bouillabaisse", we can have anything and everything in there and the whole dimension of racial or aboriginal dimension can be missing.

10975 We would also like to suggest that the CRTC require, if you feel that what has been filed so far really does not meet the test, that the CTV and Global file a greater quantitative and qualitative specific commitments to those initiatives listed in the Television Policy.

10976 The other thing that we would like to briefly refer to in a couple of minutes, is that we believe the CRTC has a public duty to implement and enforce the Canadian Television Policy in which we believe cultural diversity is very much an important element if not a fundamental element and that this exception outlined in the policy be applied and enforced in a manner consistent with the statutory foundation of the Broadcasting Act and of course consistent with the chart of principles in relation to equality and multiculturalism as well as some of the aspects related to the aboriginal reality.

10977 We are also convinced that the application and enforcement by the CRTC as an administrative tribunal and as a regulatory agency is a matter of public policy and it's a matter of duty to act and to executive, hopefully in a proactive and responsible fashion, not as a reaction to political community pressure or possibly a mandamus order from the court to enforce certain provisions.

10978 We are concerned that perhaps the implementation of the policy expectation or requirement on cultural diversity be done in a way that is consistent and clear because we just like to open a bracket when we compare the questions asked of TVA on cultural diversity and what is asked of Global and CTV on cultural diversity. We saw a sharp difference in not only the length of what is asked but in the substance of what is asked of TVA when one looks at what is asked of Global and CTV.

10979 So one of the things we would like to look at is we would like to emphasize again the obligation, if at least not the need on the part of the CRTC, to develop those bench marks and standards in order to send a clear message to the broadcasting industry and to Canadians as to what the CRTC Policy on Television and Cultural Diversity is.

10980 We would like to point out that in the United States, organizations such as the NAACP with which we have communicated have also struggled that issue with the broadcasting executives because of the under-representation of minorities in American television.

10981 So we believe that there are models and standards that could be imported from the United States to look at how the CRTC should send a beacon of hope as well of a strong signal as to what it expects the broadcasting industry to do on matters of racial and ethnocultural diversity.

10982 We have outlined in our presentation written representation for specific sectors dealing with first on-air representation. The other issue is initiatives to promote productions in house, otherwise the programs that reflect the diversity of Canada. We also refer to the need to have initiatives related to fair representation or portrayal to avoid stereotyping and also to have mechanisms, effective, efficient and transparent to deal with complaints of poor representation.

10983 Lastly the criteria of community involvement or community investment or community outreach is an important matter that we believe that in the end of NAACP program on economic reciprocity that is the criterion that is being used to measure, among other things, a corporate citizen's performance vis-à-vis the community it is supposed to serve.

10984 So in our very short presentation this morning, we would like to basically reemphasize not only the need to apply this policy in a very consistent, clear, uniform and rigorous manner, but also to develop not only a conversation with the broadcasters and Canadians around ways and means to implement the translate the policy into concrete practices, but also to look at how we can fulfil, among other things, the principles of the Broadcasting Act.

10985 On that note, we would like to thank you for this precious moment because we know that when you are last you always either become, as I said, a sweet desert or a pièce de résistance that could give people some ulcers after. But we hope to be a sweet desert.

10986 Thank you.

10987 THE CHAIRMAN: Thank you for your presentation.

10988 I will turn the questioning to Commissioner Cardozo.

10989 COMMISSIONER CARDOZO: Thanks, Mr. Chair and thanks, Mr. Niemi for your presentation and your earlier submission. Pièce de résistance, I don't know, but if we go on too long I would think that if we have too much desert we might be rather hyper when we come back this afternoon and the applicants wouldn't appreciate that because they have an important afternoon where we must be at our best to listen to what they have to say.

10990 I appreciate the specificity of your research here in looking at some of the individual applications, the local applications, and giving us your feedback on that.

10991 We certainly indicated through this proceeding that we were expecting more in terms of information and plans, and I will come to that in a minute. I will just note en passant that we hear new vocabulary during these hearings. Last week it was "constitutionality" and this week it's "mandamus order". We learn new things about our jurisdiction all the time.

10992 You will be interested to know that through the discussion both applicants had indicated that they were going to present more specific plans, if we so required in our decision, that would deal with issue of reflection, programming, news, local reflection, training, and a number of other issues that you have identified.

10993 They both indicated their willingness and keenness to be part of a task force that we had given our nod to earlier with regards to a CBA community-based task force, and they both are prepared to report annually which goes to the suggestion you had flowing from the CBC decision.

10994 I will just give you a couple more details about it. CTV talked about they have a training module in place, as I understand it, for news people and they are also planning a number of other initiatives, as my notes tell me. They are issues of prioritizing issues for tension during research, professional development, some work on best practices and developing a databank.

10995 Global had a six-point plan which covered employment equity, scholarships and awards, documentary and drama reflection, community involvement, and both look certainly at employment equity as an important part of what needs to be done.

10996 So with that kind of reflection or summary -- and I don't know how much you have had a chance to see what happened last week -- I wonder what your thoughts are with regards to the kind of commitments that both broadcasters have made to us last week.

10997 MR. NIEMI: Well, as we mentioned in our presentation, when one looks at these things, one can be very easily impressed by some of, we call it the "ouverture" towards matters of diversity, but unless one has very clear quantitative and qualitative bench marks to determine whether those initiatives are specific, they are adequate or they are usually for public relation exercises.

10998 For example, one can talk about the scholarship -- I won't be too specific -- but a $4,500 scholarship for a visible minority student. It sounds great on paper, but does that mean it's only one scholarship for one person with $4,500 in a total package of different initiatives with perhaps $450,000?

10999 So if we don't have those ways to engage, among other things, the seriousness as well as the way in which these initiatives produce results, not it has to be a result-oriented process, or a venture not as a process-oriented venture, then it will be very hard because that will leave room for arbitrariness and will be very hard for even broadcasters among themselves to compare and for the industry associations such as CAB to gage to what extent its guidelines on cultural diversity are actually followed.

11000 However, when one looks at the representation that we made in writing, that we do recognize that, for example, CTV has had more of a record, both nationally and in some regions, to be more proactively involved in community affairs. But one of the things that we find, again due to the lack of specific parameters, is it's great for all these broadcasters to be involved, but what are the mechanisms for the community to feel that it can be involved to develop partnership in fashioning some of these success stories, and secondly the other more important thing is that the policy is there, but how do we enforce it, how do we evaluate the implementation of the policy?

11001 Very importantly, what happens when there is dissatisfaction in the community-at-large about how some the broadcasters perform on matter of diversity? Is there a systematic procedure? Is there a mechanism or other ways to better track and resolve these matters to the satisfaction of everyone? Usually, we are lacking such a structure. Many companies usually rely on one individual person with good faith or goodwill to address the issue and that can leave room for a lot of arbitrariness and what we are calling for in this process of licence renewal is to establish some sort of a structure from which to evaluate how specific dispositions of the Television Policy on Cultural Diversity are implemented.

11002 Without that structure and a clear bench marks we can create inequity and, as we mentioned earlier, when we look at the application of TVA specifically what was asked of TVA on matters of cultural diversity is basically one very short paragraph and our concern is that the CRTC is sending a very mixed signal to the broadcasting community of Canada in both official languages with regard to its expectation on cultural diversity.

11003 We will make you a separate submission on that because we believe it goes beyond the application of the three applicants. What is asked of the three broadcasters on cultural diversity creates a concern for us with regard to the uniformity and the consistency with which a regulatory agency like the CRTC must apply the cultural diversity section of the Television Policy.

11004 COMMISSIONER CARDOZO: I hear what you are saying, but I just want to remind you the hearing here is just on the applications of CTV and Global. So I want to stick to that.

11005 Of the things you have talked about, scholarships would seem to me they are either there or they are not there. You know how much is being spent and you can argue whether it's enough dollars or enough scholarships, but that would seem to me to be an easier thing to measure.

11006 The other aspects about reflection, community involvement, complaints, how do you suggest we go about this? I'm just sort of trying to think of the sequence of things. There is a couple of things floating out there. One is a task force with the CAB and community involvement. The other is CTV has talked about prioritizing issues or identifying priorities and doing research.

11007 Say we have a decision. If we were to put out our decision in say two or three months from now and were to say that we would like the broadcasters to file something within say three to six months, where do you think we should get to the point of the bench marks as to what it is you want to see it, either year by year or at the end of a five or seven-year period, whatever the term is.

11008 How do we set -- I'm just thinking if we just say to them, "File a plan in six months", it could be a very light plan, and then how do we say, "No, that's not very much of a plan". Do you know what I mean? What is your suggestion as to how we go about setting those bench marks? Is the bench mark what exists today or should there be a more definitive one?

11009 MR. NIEMI: Well, the bench marks can be very quantitative. If they are quantitative, then perhaps how the HRDC and the Canadian Human Rights Commission develop those guidelines and bench marks measures, evaluate an employer's performance in the Employment Equity Act could be an example because that is strictly quantitative.

11010 COMMISSIONER CARDOZO: That's employment equity, but you wouldn't be saying, for example, that in a drama there has to be this number of visible minorities and this number of aboriginal people.

11011 MR. NIEMI: If you like we can forward to you some of the self-development in NAACP in the United States and some of the agreements with broadcasting executives there. We will invite a representative of the NAACP to come here because we feel that the problem has been long enough and, as we say, we don't want to wait for another ten years.

11012 The CAB has developed as set of guidelines which we read to a certain extent. It's interesting because it divides the cultural diversity into specific areas in terms of performance, outreach into a relationship with a code, and so on, and so forth.

11013 This, I believe, is not a new question because when one looks at how the broadcast industry dealt with women's representation, there is a model there that one can look at and the other question that one would have to look at is most equity companies have what they call a corporate action plan on diversity and equity. The banking community is a leader in that area and they have some specific components that one can adopt because those plans are dealing more than with just hiring, but they deal with also investment in the employees training, supporting community initiatives and, of course, adapting that to the broadcasting industry would involve issues like programming, support for in-house or independent productions as well as the mechanisms and procedures to deal with the satisfaction on the part of the viewers or the public with regard to what they see on the screen.

11014 So in other words we can spend the next six hours here -- and I don't want to miss my personal reception for the Prince of Wales -- but it's important to engage this process of reflection and a conversation not only with the broadcasting industry, but also some of the key stakeholders with regard to what it is that we should come up with in order to provide for the framework and the structure to translate the cultural diversity provisions into a concrete policy and practice for broadcasters.

11015 We believe that the process has not begun yet. The policy was adopted in 1999 and this is the first test to measure not only the reach, but also the scope and the effectiveness of that policy and perhaps the clarity with which the industry receives that policy component on cultural diversity because the policy is genuine and the section on cultural diversity did end with an invitation to set up some sort of a working group on the industry, community, a working group on that and this could be a very good opportunity to engage that process.

11016 But the important is that it's very hard for the industry and the broadcasters to develop these initiatives or the specific commitments to initiatives without some sort of dialogue and conversation in the input from the very people for which these initiatives are created. We believe that has not been the case judging from the kind of contacts and the discussions we have had with some of our associated across the country, at the local and at the regional level.

11017 Most of the stuff tends to be coverage and very superficial, but there has not been a lot of sitting down together with some of the stakeholders to say, "How do you see us doing? How would you like to see us do in this and, for example, how do you see our role in this?", and that's a sort of proactive community outreach that, of course, should be done. The CAB guidelines refer to that in a very superficial manner, but before getting to the specific stuff, we believe that the process has to be established in a very proactive way.

11018 COMMISSIONER CARDOZO: So are you suggesting then that this dialogue between broadcasters and the community with the CAB should take place first which I would say, summarizing what you are saying, enumerating the specific issues and perhaps trying to set standards or goals and then based on that, the broadcasters would then file their plans with us?

11019 MR. NIEMI: That would be the ideal situation, but as a regulatory agency we believe that you face a dilemma right now because you have all these applications before you and you have a policy and a policy section on cultural diversity. You have some sort of requirements to describe what the licensee applicants are vying for, but it's a chicken and the egg problem right now because the applicants have filed some of them, for example, the April 9th response from Global I counted almost 18 pages of things on cultural diversity whereas the CTV thing it's a very lawyerly two-page, a very superficial description, anecdotal stuff.

11020 So how are we going -- "we" in a collective sense -- to measure within the next several months the extent to which these licence applicants live up to what the CRTC expects or requires as a performance on cultural diversity. They are two separate issues and we don't want it to be drowned in terms of where the CRTC should go and what it should do.

11021 COMMISSIONER CARDOZO: I hear you.

11022 You talked about complaints mechanism and you talked about community involved. Are those the same or different things?

11023 MR. NIEMI: No, they are different.

11024 COMMISSIONER CARDOZO: Okay, can --

11025 MR. NIEMI: A community involvement could be, for example, perhaps some broadcaster I believe in Vancouver, not necessarily those who are before us, or have an advisory community composed of different community representatives like a sounding board, not necessarily to tell broadcasters how to run the business but as a sounding board.

11026 Other can have regular meetings, once or twice a year meetings with different segments of the community just so that the strength in the sense of the broadcaster is there to reflect and to work with and to work for the community beyond the question of them doing business.

11027 COMMISSIONER CARDOZO: And then a complaints mechanism.

11028 MR. NIEMI: The complaints mechanism involves, for example, stereotyping or unfair reporting or under-representation in programming or --

11029 COMMISSIONER CARDOZO: Something beside, you are familiar with the CBSC. Would this be before you go there?

11030 MR. NIEMI: No, that's more formal form of procedure.

11031 COMMISSIONER CARDOZO: Okay.

11032 MR. NIEMI: There is more of perhaps, sometimes we call it more of a customer service approach that can help defuse a lot of tensions and can even prevent more serious complaints from coming forward to the CBSC and a lot of companies have done that and usually we call it just simply good customer relations.

11033 COMMISSIONER CARDOZO: On local programming, last Thursday and Friday we heard from station managers from across the country for both Global and CTV and they talked a great deal about their community involvement in a number of things. They covered festivals, events, conferences, dinners, that type of thing.

11034 Is it your sense that there is more happening, more cultural diversity involvement happening at the local level than what you see on a national network?

11035 MR. NIEMI: Yes -- let's say it varies from region to region because in doing this we did talk to people in the key cities, the community side and some of the people we talked to and their initial feedback is that in coverage -- most of the coverage, by the way, mentioned in the applications tends to fall within the news and public affairs coverage and there is a reaction of this is a "multi-culti coverage", like food and ethnic folklore and stuff like that, whereas more serious issues that don't seem to be listed there. So that's an initial reaction that we got.

11036 The second thing is as we mentioned in our written submission, without some sort of a clear framework how can we ensure that this coverage is not arbitrary or is not anecdotal and to what extent do we ensure that there is an actual community voice being heard in some of these programming because if it's coverage -- we were talking about covering Greek Independence Day parades or all these so-called ethnic celebrations, then perhaps we have to redefine the word "coverage of diversity events" or "issues of importance to the local communities".

11037 COMMISSIONER CARDOZO: Isn't that better than nothing?

11038 MR. NIEMI: No.

11039 COMMISSIONER CARDOZO: The festivals?

11040 MR. NIEMI: I personally made a very personal derogatory remark about the so-called "multi-culti coverages". Basically, the ethnic folklore thing is okay because that's a real event, but it risks reenforcing certain stereotypes about what multiculturalism is about or about what cultural and racial diversity at the local action is all about and people often complain that the most serious issues are not dealt with because sometimes they are deemed to be too controversial. So it's easier to cover folkloric events or cultural expressions of that nature.

11041 COMMISSIONER CARDOZO: Lastly, both broadcasters have been quite strong in their commitment to get the task force going through the CAB. Is that something that you would be interested in participating in?

11042 MR. NIEMI: Unless there is an equitable participation of the French-language broadcasters and the constituencies on that task force, I believe that the idea of the task force has to be carefully looked at. It cannot be an English-language task force on English-language issues of diversity. It has to be truly national and truly Canadian, bilingual and multicultural and multi-racial.

11043 COMMISSIONER CARDOZO: Thanks very much for your help today.

11044 Thank you, Mr. Chair.

11045 THE CHAIRMAN: Thank you, Commissioner Cardozo. Thank you, Mr. Neimi.

11046 I just wanted to make a comment about your reference to TVA and a number of questions that may have been posed.

11047 Perhaps you and others will judge the Commission often by the questions that we may ask at a hearing. I would encourage you and others to judge us by the decisions we render more than the questions we ask here. We all come at this with different backgrounds and understanding of issues, some perhaps more in-depth than others.

11048 We don't go to these hearings with a list of proforma questions that are going to be asked. The record of the proceeding consists of the applications themselves and all that goes into that -- the record of the intervenors, including all of the submissions that are made -- so the purpose of the hearing is to sort of flesh out where the holes or gaps are and not to necessarily canvass the whole issue all over again.

11049 You may know that in the Broadcasting Act there is a requirement that a panel consult with other Commissioners, and in some cases other panels, to ensure a consistency with the objectives of the Broadcasting Act and a consistency of regulations and we do that. We particularly intend to do that with respect to the TVA renewal and these renewals to ensure that there is some consistency across those applications, or where there are differences in the outcome of the decision that there are reasons for those differences.

11050 So I can assure you that we certainly value this particular issue as much with respect to these two licensees as we do in the case of TVA and I would say that the number and style of questions that we may have had at a hearing as against this hearing should not been seen as a reflection of the relative weight that the Commission would put on the issue in Montreal as opposed to here.

11051 MR. NIEMI: We look forward to your decisions.

11052 Thank you.

11053 THE CHAIRMAN: Thank you.

11054 Well, Mr. Chairman, I think -- Mr. Chairman! I mean, Mr. Secretary --

--- Laughter / Rires

11055 Sometimes I feel you really are the Chairman.

--- Laughter / Rires

11056 MR. CUSSONS: I'm flattered, sir.

11057 THE CHAIRMAN: I think that concludes all our intervenors.

11058 MR. CUSSONS: Yes, it does, sir.

11059 THE CHAIRMAN: So I thank all the intervenors for that.

11060 We will take our lunch break now then and we will reconvene at 2:30. We will give a little longer lunch today to give the applicants perhaps a little time to gather their thoughts about the interventions that they have heard this morning.

11061 So we will reconvene at 2:30.

--- Upon recessing at 1255 / Suspension à 1255

--- Upon resuming at 1430 / Reprise à 1430

11062 THE CHAIRPERSON: Good afternoon, ladies and gentlemen. Welcome back to our proceeding.

11063 We are at the stage in the proceeding where we will hear the reply to interventions from the two applicants, CTV and Global, for their licence renewal applications, and first up is CTV.

11064 Mr. Fecan, do I understand that before you do your rebuttal there are a couple of housekeeping matters that you wanted to deal with?

REPLY \ RÉPLIQUE

11065 MR. FECAN: Yes, we have some homework to hand in.

11066 Good afternoon, Mr. Chairman, Madam Vice-Chair, Commissioners and staff. For the record, my name is Ivan Fecan. I am President and CEO of Bell Globemedia and CEO of CTV.

11067 Before we begin CTV's reply presentation, let me address our various homework assignments.

11068 First, we were asked to outline our commitment with respect to closed captioning. We can confirm that each of our stations will comply with the captioning levels set out in Public Notice 1995-48, and we will extend this to all small markets by the end of the 2003 broadcast year. We will continue to work closely with the captioning companies involved to improve quality.

11069 Secondly, we wish to confirm our commitment to independent production. CTV will continue to obtain the majority of our drama programming in peak time from independent producers in which we hold less than 30 per cent of total equity. We are committed to our creative partnerships with independent producers of all sizes and from all regions. In the hours off-peak, we must rely on our in-house capabilities to deliver local reflection and public affairs programming on a timely and cost-effective basis. We don't anticipate using independent producers in this capacity.

11070 Thirdly, the Commission sought information on our plans for children's programming, and CTV remains dedicated to providing high quality, popular Canadian television which serves a broad range of interests. As such, we confirm that we plan to provide two and a half hours of children's programming each week, in addition to our significant commitment to television that can be shared by the whole family.

11071 Fourthly, the Commission has heard our views on virtual advertising, and we listened carefully to the discussion last week, and continue to believe that at this stage it is really difficult to predict the extent to which this technology will be used.

11072 However, in order to assist the Commission, we are prepared to include information on the development and use of virtual advertising in the annual reports that we have agreed to file.

11073 Finally, we undertook to provide clear answers on how the expectations set out in the licensing decision for CIVT would evolve as the station becomes CTV's west coast presence. We truly apologize that we were unable to succinctly provide you with this information on Friday.

11074 CIVT was originally licensed as an independent station in a market which was fundamentally different from the broadcast landscape of today. Notwithstanding the station's new role as a full member of the CTV family, and the changes to the competitive environment in Vancouver, we are proud to report that we will meet or exceed every single expenditure commitment established in the original CIVT licensing decision on schedule or in advance of the time specified in the decision.

11075 We will spend $1.8 million over seven years on children's programming.

11076 Our dramatic series from independent producers, including one from B.C., will trigger more than $140 million in production expenditures, much of it in B.C.

11077 Over seven years, more than $53 million will be spent on programming in categories 7, 8 and 9 from independent producers, including $26.5 million for programming from the B.C. community.

11078 Over $28 million will flow to B.C. producers over seven years for children's, drama and documentary programming.

11079 Finally, we will maintain our western development office with its current level of funding, providing a dedicated champion for western creators within CTV.

11080 Western and B.C. producers will receive every single dollar in expenditures promised as part of our licence application. I do hope that our clarity now will remove any lingering doubt about the seriousness of our commitment to you and the broadcasting system.

11081 Now I would like to introduce our panel this afternoon, beginning on my far left: Kirk LaPointe, Senior Vice-President, CTV News; Trina McQueen, President and Chief Operating Officer, CTV. To my right: Robin Fillingham, Chief Financial Officer and Chief Administrative Officer of Bell Globemedia, and Alain Gourd, Group Executive Vice-President Corporate, Bell Globemedia. Behind me, starting at the far left, are: Bill Mustos, Vice-President, Dramatic Programming, CTV; Susanne Boyce, President CTV Programming and Chair of CTV's Media Group; Kathryn Robinson, legal counsel, Goodmans; and Jim Macdonald, consultant.

11082 MS McQUEEN: Good afternoon, Commissioners. We would like to begin, of course, by thanking the intervenors. All of their contributions have enriched the discussions that we have had with you this week. And of course we are pleased that so many of those who appeared before you recognized and appreciated the people around the CTV team and its commitment to high quality Canadian television.

11083 In particular, we are proud of the recognition from our local communities. We believe that the obvious enthusiasm and dedication of our station managers reflects CTV's deep rooted commitment to local programming -- and the interventions indicate that we are doing it well.

11084 We have made a minimum commitment to 15.5 hours of local reflection and news programming each week, as described by our station managers. We believe in this commitment because it is the right thing for the communities we serve -- notwithstanding the fact that "quantitative commitments with respect to local news programs" are no longer required under the TV policy.

11085 We further confirm our plans to continue providing in excess of this baseline in many markets.

11086 As the Commission has heard, this programming is highly valued by Canadians, and it undeniably meets the definition of "local" suggested by the Communications, Energy & Paperworkers Union of Canada. It reflects the particular interests and aspirations of the community. It provides a forum for the voices and talent of the community. And it promotes the people and places within the geographic area that it is intended to serve.

11087 The local programming of our stations is so successful because it provides meaningful and diverse reflection; it shows a real understanding and appreciation for the communities; and it has earned the loyalty of its viewers.

11088 Kirk?

11089 No, I'm sorry, it's not Kirk; me still.

--- Laughter / Rires

11090 MS McQUEEN: I do "Commitment to Canadian Television". Okay.

11091 After Friday, I don't think I will ever get my groove back, but I'm trying.

11092 We appear in front of you seven months into a new program policy. We agree with many intervenors that things have changed since 1999, when that policy was crafted. But here is what we see as the fundamental changes.

11093 First, the audiences for conventional television are more fragmented. Second, advertising revenue is showing no signs of growth and the competition for it has increased. Third, the economic outlook is more uncertain.

11094 In this situation your policy requires us to devote nearly one-third of our critical prime time hours to the most expensive and difficult forms of Canadian television, while maintaining our overall Canadian content. This is a big stretch. To be blunt, it's a risk.

11095 However, we have come before you with plans to spend more than $1 billion on Canadian programming over the next seven years. We have detailed our intention to concentrate on news, drama, documentary and comedy/variety, and we have emphasized the necessity to maximize our audiences.

11096 During the hearing we believe that we have been responsive to the Commission. In the last week we have agreed to take on seven major requirements not contemplated in the program policy.

11097 We have submitted a code to deal with concerns about cross-media ownership.

11098 We have committed to 15.5 hours of local news and reflection on our major stations, despite the policy's removal of local commitments.

11099 We have made a groundbreaking commitment to described video -- and we have more to tell you later in this piece.

11100 We have committed to take leadership in organizing a broadcasting task force or round table on diversity.

11101 We have promised to file annual reports on our cultural diversity initiative.

11102 We have agreed to make specific commitments to independent production, and to file annual reports.

11103 We have agreed to work with the Commission and the production industry to track the contribution of regional independent producers to our schedule and the reflection of Canada's regional diversity in our programming.

11104 As well, we have worked hard to solve our affiliate issues and to make a significant contribution to help the small stations in the B.C. interior retain their regional revenue.

11105 And while we hope that our efforts to be responsive are helpful to the Commission, they are offered in the context of our strong belief that now is not the time to rewrite the television policy.

11106 This framework is the result of months of consideration and consultation with virtually every stakeholder in the broadcasting industry. It represents a careful balancing by you of the interests of all parties, with the common aim of building audiences for Canadian programming.

11107 The policy imposes difficult obligations on the broadcaster. The only tool that we were given to meet those obligations was flexibility. Like every masterful compromise, no one is entirely satisfied. We had ideas which were not reflected in the final policy, as did others. Nevertheless, CTV has not asked for easements or changes to your policy. We think the Commission got it right and we strongly urge you to resist the array of special interest groups seeking amendments or additions.

11108 Certainty is a cornerstone of the new framework and it benefits every participant in the broadcasting system. Completely rewriting the television policy just seven months after its introduction destroys the certainty and discards the best efforts of the Commission and the industry. We must move forward with confidence in this plan or risk undermining the Commission's policy process.

11109 The suggestion has been advanced by some intervenors that a shorter licence term may be an option for addressing any misgivings about the framework. We disagree. The new policy needs time to work, and a full licence term will provide that opportunity. We believe that our record supports a seven-year renewal, and the CFTPA acknowledges that a shorter term would be punitive. Any concerns arising during the implementation of the policy can be identified in the comprehensive reporting proposed and accepted by us. We can also assure you that we will be before you regularly in the coming years and that we are open to dialogue at any time.

11110 The scheduling of Canadian programming has also been a matter raised in this proceeding. Our approach has been to find the best possible place for every program in our schedule and to vigorously support that scheduling through promotion. Within prime time, CTV has used and will continue to use every day and all time periods for scheduling priority Canadian programming.

11111 Two years ago we averaged an hour of Canadian programming on Saturday evening. This year it went up to four. Next year it will probably go down again, depending on the make-up of the schedule.

11112 Over the past three seasons we have scheduled "Mysterious Ways" -- Mondays at 8; "The Associates" -- Tuesdays at 10; "Power Play" -- Wednesdays at 8; "Due South" -- Thursdays at 8; "Cold Squad" -- Fridays at 9; "Twice in a Lifetime" -- Saturdays at 8; "WFIVE" -- Sundays at 10.

11113 In the same period our highly rated Canadian movies and mini series have been seen on Mondays, Tuesdays, Wednesdays, Fridays and Sundays.

11114 In addition, CTV chooses to schedule the vast majority of priority programming in the "primest" of prime time, between 8 p.m. and 11 p.m.

11115 The flexibility of the TV policy is critical to our ability to continue providing excellent Canadian programming. This is the time to work together, to focus on viewers, to grow Canadian audiences. And what will ensure the success of programming, from the west or Atlantic Canada, from unaffiliated producers or small and medium size enterprises, drama or documentaries -- what will ensure the success is to concentrate on pleasing audiences.

11116 We are committed to pursue this goal and we invite our creative partners to join us.

11117 Now, Kirk LaPointe.

11118 MR. LaPOINTE: Thank you, Trina.

11119 Commissioners, in this hearing the Commission has referred to section 3 of the Broadcasting Act, which requires that the Canadian broadcasting system should provide "a reasonable opportunity for the public to be exposed to the expression of differing voices on matters of public concern".

11120 We support the Act and we note that section 2(3) states:

"Interpretation -- This Act shall be construed and applied in a manner that is consistent with the freedom of expression and journalistic, creative and programming independence enjoyed by broadcasting undertakings."

11121 While CTV understand the Commission's raising questions about the issue of diversity of voices, CTV believes that there is now a very wide range of differing voices in the Canadian broadcast system. We do not believe that our affiliation with the Globe and Mail diminishes those voices. On the contrary, we believe that there are opportunities to collaborate and to share resources that will provide a very real improvement in news quality -- and in diversity.

11122 We have not seen a single piece of concrete evidence raised by any intervenor that there is an actual, existing threat to diversity of voices. The calls for regulation are from those who present hypotheses, possibilities and apprehensions, but not facts.

11123 The regulation that the Friends of Canadian Broadcasting and the unions want is based on preserving in amber a sort of journalism that doesn't take into account the potential for tomorrow. Anyone who visits the journalism schools of today sees that the next generation is learning and embracing formats and technologies that are only beginning to appear. They want to work with companies that will allow them the opportunity to innovate, to express their ideas and talents in many ways. It would be a shame if Canada became the only country and CTV and Global among the only companies in which this innovation is forbidden.

11124 Nevertheless, respecting the Commission's questions on this issue, we outlined for you in our deficiency responses our assurances for preserving separate news presentation structures, as well as separate management structures and separate budgets. And during the hearings we worked to put before you a code which reflected those principles. We listened carefully during these proceedings and we wish to put on the record our commitment to create a so-called "Right of Reply" program that will air weekly beginning in September.

11125 During the intervention process you heard from eminent academics across the country that, while the diversity of voices is an important concern, the imposition of the Quebecor code was not necessary in English Canada, and indeed might have negative consequences.

11126 This view was held unanimously by scholars who have investigated and researched questions of convergence, diversity and journalistic quality for many years. They have published and spoken on these topics and have worked with journalists and academics in other countries. They understand not only the current practice of journalism, but its future as well.

11127 In contrast, you have the Friends. Journalism is not their expertise. They presented to you neither evidence nor compelling arguments, but only a misinterpretation of the plans we have carefully laid out.

11128 And you have The Media Guild. Journalism is their expertise, but not CTV journalism. They are overwhelmingly a CBC union, and they spoke of CBC practices.

11129 Our code is clear. CTV will have separate management and separate presentation structures. That means separate news directors, separate executive producers, separate assignment editors, separate writers and separate reporters. Every step of the way through the storytelling process journalistic decisions will be made by our newsrooms autonomous from each other.

11130 The notion that it is in the newsgathering process and only in the newsgathering process that diversity occurs is wrong. First, sharing resources increases the number of newsgatherers, particularly on the stories that matter most. Second, every journalistic organization, ever day, gathers and has supplied to it far more news and information than it will ever use. The news pours in. On a single story a dozen people might be interviewed for 10 or 15 minutes each. The story might never be used. Or only a single person will be quoted. The real diversity comes in the power to choose the person and to choose the quotes that will be used.

11131 That is the essence of the journalistic power to create diversity, and that is not the task of the newsgatherer. It is the presenters and the managers who make those choices. Our code clearly separates the broadcast division from the print division in these areas.

11132 What is more, any decision to collaborate on a story can come only if the two divisions agree. This is another guarantee of diversity. To be clear, our commitment on newsgathering is the following: That our television management will make autonomous decisions on television newsgathering. That is exactly the process that CBC and the Toronto Star would use, without any restriction, in deciding to collaborate.

11133 Ironically, our journalists would be able to have more discussions with our competitors than with their own corporate colleagues.

11134 We believe that we have presented to you a strict and fair plan that achieves the objectives of the Act and, as well, allows us to do the kind of high quality journalism that is currently, sadly, all too rarely available, and just as important to the public as diversity.

11135 We note that the Broadcasting Act also requires you to ensure that programming be varied and comprehensive -- a requirement for quality. And, Commissioners, that is the core and the heart of our plan: to give our audiences innovative and excellent journalism.

11136 MS McQUEEN: We turn now to the situation in British Columbia. In order to preserve CTV service in the B.C. interior upon the disaffiliation of CHAN, we have sought the authority to have CIVT carried by cable distributors as a distant signal. In our view, this arrangement would ensure uninterrupted cable access to CTV with the least impact on stations in the interior.

11137 Fragmentation has been and will be a fact of life for all Canadian broadcasters. It is unfair for these stations, backed by substantial owners, to attempt to single out CTV as the sole cause. We would, as would all conventional broadcasters, like to freeze fragmentation, but our audiences would not be well served by limiting choice, and the residents of these communities have overwhelmingly said: "I want my CTV."

11138 So we can't stop fragmentation, but we can address the concerns of the interior stations with respect to regional advertising. As we indicated earlier, we are prepared to make arrangements with the interior cable companies to black out all regional advertising originating from CIVT into the intervenors' markets. In this way, advertisers seeking regional coverage of British Columbia will still need to purchase separately the markets of the Pattison-Telemedia stations. We believe that this station will preserve regional advertising revenue to these stations.

11139 On service to the visually impaired, we listened carefully to the submissions by NBRS and by Ms Lambert, particularly with regard to their desire for more immediate access to described programming. In response to their concerns, we are prepared to significantly accelerate the introduction of described video. Rollout on each of our originating stations will be completed by the end of the second year of the licence term. CTV will provide two hours per week on a 50/50 split between originals and repeats, and we will ramp up to three hours in year three, and four hours in year five. And we will also work with producers to ensure that programming is created in a manner which is sensitive to the needs of the visually impaired.

11140 Finally, we turn to Global's proposal regarding an increase in the minutes of advertising.

11141 As indicated, we believe that the current limits remain appropriate. Additional revenue is attractive, but at the end of the day this proposal is yet another amendment to the TV policy. In our view, the new framework must be provided an opportunity to work without undertaking piecemeal revisions to the delicate balance achieved.

11142 However, should the Commission see fit to grant Global the authority sought, it is imperative that the identical flexibility be concurrently authorized for CTV.

11143 We appreciate the Commission's attention to these issues, which are central to our ability to serve our viewers. We believe that the TV policy provides all the tools necessary for broadcasters to find their distinctive niche in Canadian programming.

11144 We are not just saying "trust us", but we do ask that you look at our record and judge it. And we also ask that you trust your policy. It will produce what we all want: more audiences for Canadian programs.

11145 Before we answer whatever questions you may have, we would like to thank all of you at the Commission. You have pushed us. You have sometimes given us some humour. Your questions, I think, went to the heart of the matter. The dialogue that we have had on many of these issues has caused us to change our minds on some, and not on others.

11146 We thank you for giving us the generous, well prepared and full hearing. Thank you.

11147 THE CHAIRPERSON: Thank you, Ms McQueen, Mr. Fecan and Mr. LaPointe.

11148 We will take a short break to see if we have any follow-up questions. Don't go away, we will be right back. I know there will be one or two questions, at least, from counsel.

--- Upon recessing at 1455 / Suspension à 1455

--- Upon resuming at 1500 / Reprise à 1500

11149 THE CHAIRPERSON: Again, thank you for your presentation. Members don't have any more questions, so you can breathe a sigh of relief. But Commission counsel have a question or two.

11150 Counsellor Moore?

11151 MS MOORE: Thank you, Mr. Chairman.

11152 CTV has made a commitment of 15.5 hours per week, on average, of local reflection programming. I am wondering if you have any comments on the possibility of that being imposed as a condition of licence.

11153 MS McQUEEN: We are quite willing to have it as an expectation or a commitment or a requirement. We would prefer, in the spirit of the television policy, that it stay at that level, rather than being a condition of licence.

11154 MS MOORE: The Commission may decide to limit the amount of programming acquired from affiliated production companies, defined according to recent decisions as those in which the licensee owns 30 per cent or more of the equity.

11155 Could you please comment on the possibility of the following conditions of licence being imposed: (a) a condition of licence limiting the amount of priority programming that may be produced by the licensee or any affiliated production company, perhaps to a range between 25 per cent and 49 per cent --

11156 I will ask for your comments on that before I explore the other potential condition of licence with you.

11157 MR. FECAN: I think it would be very difficult, and frankly imprudent, for us to comment on potentially interrelated things, so it would be most helpful to kind of get the scope, and then we can try to help.

11158 MS MOORE: Certainly. I understand:

11159 (b) a condition of licence guaranteeing access to unaffiliated producers during the period 6 a.m. to 7 p.m., perhaps expressed as a minimum of 50 per cent of all independent production broadcast during this period.

11160 That's it.

11161 MR. FECAN: Maybe I can start, Trina, as you think about it.

11162 First, sort of ditto on what Trina said in terms of expectation. I think we would feel that is more consistent and we would be more comfortable with that.

11163 Let me try to understand clearly. In (a) you are speaking about priority programming, and you are saying -- the 25 per cent to 49 per cent is throwing me. Are you saying that 51 per cent would come from independent, as you have defined it?

11164 MS MOORE: Yes, that's correct.

11165 MR. FECAN: We would have no difficulty with that as an expectation.

11166 MS MOORE: But there is a range. It is between 25 -- but the amount of priority programming that may be produced by the licensee or an affiliated production company could be limited to between 25 per cent and 49 per cent. So 51 per cent would be correct at the high level of that range. But, of course, it would be a smaller percentage at the lower end.

11167 MR. FECAN: Again, it is a fairly big difference between one end of the range and the other, and we certainly have already on the record said that we would be comfortable with 51 per cent.

11168 MS MOORE: What if it were limited to 25 per cent, for example?

11169 MR. FECAN: I think we would have to consider it, but I am not sure that is particularly wise or flexible.

11170 I think, as we have said -- on whatever day it was last week -- we don't really have a particular intention to get into that business at all, but 51 per cent would be comfortable.

11171 MS McQUEEN: Maybe I could give you some background on it.

11172 Our concern is that we do two priority programs now -- "WFIVE" and "e Now", the entertainment magazine -- and because these shows tend to have a large number of hours, that is the reason it would be difficult for us to meet more than 49 per cent or 51 per cent without having to say goodbye to those programs.

11173 MS MOORE: Could you please comment on the possibility of the following condition of licence being imposed. It relates to commitments that were set out in the transfer of ownership decision, Decision 2000-747, relating to reporting requirements, but I will run possible wording past you:

"It is a condition of licence that CTV file a detailed audited report, concurrent with the filing of the annual return for CTV Television Inc., setting out the actual expenditures on the base level amount of eight hours per week of priority programming. Such spending may exceed, but shall not be less than $24.9 million in any given year."

11174 MR. FECAN: May we caucus on that, just to check the wording?

11175 MS MOORE: Certainly.

--- Pause / Pause

11176 MR. FECAN: While our counsel is pulling out the decision, just because that is what counsel does --

--- Laughter / Rires

11177 MR. FECAN: I want to go back to the other thing and say that on (b) -- I never actually got to comment on (b). We would find that very difficult to accept.

11178 I think, as you heard today from Ms Gabereau, there are real economies of scale in daytime produced in-house. And when you look at what our daytime is, it is "Canada AM", it is "Vicki Gabereau", it is the noon news. If we were to agree to that, then we would be having to say goodbye to some other things.

11179 So that one just doesn't make sense to us at all.

11180 MS MOORE: What if it were at a lower threshold of perhaps between 15 per cent and 25 per cent, for example?

11181 MR. FECAN: I think it really doesn't make sense to us. I mean, we currently have a program, "House & Home", that is --

11182 I'm not sure. Is that independently produced?

11183 I'm sorry. I stand corrected.

11184 We would have a lot of trouble with that.

11185 MS McQUEEN: And we have your Decision 2000-474E, and in it you do require the filing of a detailed audited report, and you say that such spending may exceed, but shall not be less than $24.9 million in any given year.

11186 Are you now asking us to accept that as a condition of licence in this approval?

11187 MS MOORE: I am asking for your comment on the possibility of that being imposed as a condition of licence.

11188 MS McQUEEN: Yes, we would accept that.

11189 MS MOORE: Perhaps, as well, requiring CTV to file a detailed breakdown of the expenditures each year on the priority programming and related initiatives, accepted as benefits in Decision 2000-747?

11190 MS McQUEEN: We are happy to file that report, and if you would like it as a condition of licence, we have no problem with that.

11191 MS MOORE: Turning now to the matter of possible network applications, I am wondering if you could update us on your plans in terms of when such applications would be filed.

11192 MR. FECAN: Kathy will answer that.

11193 MS ROBINSON: It was our intention to have those applications, which is a letter application, filed within the next week.

11194 MS MOORE: Thank you.

11195 With respect to closed captioning, could I please have your comments on the possibility of all of your stations, regardless of the level of revenues, being required by September 1, 2001, and for the rest of the licence term, to caption at least 90 per cent of all programming during the broadcast day, including 100 per cent of all news.

11196 MR. FILLINGHAM: I think we indicated in our brief here that we would be there on all of those small stations by the end of 2003, and that would include all of the small undertakings, including the small splits for places like Oil Springs, et cetera, but by the end of 2003.

11197 MS MOORE: Yes, and I am asking about the possibility of you being required to meet that commitment by September 1, 2001.

11198 MR. FILLINGHAM: We can do that.

11199 MS McQUEEN: The only thing, we would caution you, is that when we put into the system a large number of hours of captioning all at once, that is when we get the quality problems that the Commission has referred to.

11200 The issue seems to be that it takes a certain amount of time to train captioners to a level of quality. We think we are just now getting over the recent number of hours, with good training. We have in fact initiated some scholarships for potential captioners.

11201 We will do it, but hiring and training all of those captioners is probably going to be an issue for the companies involved.

11202 MS MOORE: Thank you. Turning now to the matter of service to the interior --

11203 MR. FECAN: I'm sorry. Just once a producer --

11204 If we get the decision back -- I mean, September 1 sort of depends on when a decision comes out. Thirty days, 45 days -- it's getting dark.

11205 MS MOORE: Thank you.

11206 Turning now to the matter of service to the interior, you mentioned today in your oral brief that you are prepared to make arrangements with interior cable companies to black out all regional advertising originating from CIVT into the intervenors' markets. I would like to explore potential conditions of licence relating to this, both with respect to CIVT and with respect to the cable companies on whose behalf you are acting as agent in this application.

11207 First of all, could I have your comment on the possibility of a condition of licence on CIVT requiring CIVT to ensure that all regional advertising originating from CIVT is blacked out?

11208 MR. FECAN: I think we have -- I hope we have demonstrated that an expectation would serve, but we would be pleased to take an expectation.

11209 But, again, for greater clarity, there are two different agreements in the interior of B.C. that have different definitions of what regional means. As we appear to be filing for a network licence of some sort, we would take the same definition that the other network uses -- the CBC definition.

11210 MS MOORE: With respect to the cable companies, because of section 7 of the Broadcasting and Distribution Regulations, which prohibit the altering or curtailment of programming, could you comment on the possibility of a condition of licence being imposed on the cable companies on whose behalf you were applying to authorize this alteration for the black out of the advertising?

11211 MR. FECAN: Let me turn to Kathy on that.

11212 MS ROBINSON: My understanding is that everyone who is involved in the cable industry is this week at the NAB and, therefore, has been unable to confirm with us their agreement to this.

11213 However, based on our prior discussions with them leading up to this application, we believe that such a condition would be acceptable, but we would undertake to file confirmation of that understanding with you, again within seven days.

11214 MR. FECAN: And again, as I understand the process, it is something that we trigger at CIVT. So it is a pass through them.

11215 MR. MACDONALD: Counsel, I was wondering if we might go back to the point that Mr. Fecan was mentioning a minute ago regarding the definition of regional. We reverted to the CBC, but, to be very specific, and for the record, we are defining regional on behalf of clients whose businesses are limited to the province of British Columbia.

11216 MS MOORE: Thank you.

11217 I wonder if you have any further comments on the possibility of short-term licence renewals for some or all of your stations.

11218 MR. FECAN: I really think we have said it all. Certainty is so important to the system -- for all of the players in the system. There has been an exhaustive process to try to figure out how to best balance all of the different issues, and I really do believe that we have a common goal: the absolute necessity to increase audiences to Canadian programming.

11219 I don't think that fragmentation will lessen, I don't think that change will lessen, and our tool in coping with all of this is to figure out what the opportunities are to do all of that.

11220 We are very serious about doing all of that. I am pretty sure that we are going to be in front of you lots. So it is not like you don't know where we live.

11221 I really feel -- I would echo what Elizabeth McDonald of the CFTPA said, that the shorter term would be punitive. And I don't think that CTV has done anything to deserve a punitive kind of arrangement.

11222 MS MOORE: Thank you, Mr. Chairman.

11223 I will now turn to my colleague, who has some questions relating to cross-ownership.

11224 MR. WILSON: I would like to begin by following up on some of the previous discussions that were had with respect to the Globe and Mail and whether it could be considered a local paper in the Toronto market.

11225 It is my understanding that the Globe and Mail publishes two versions, one for distribution in Toronto and another for distribution in the rest of Canada, and that while the two versions contain common elements, the Toronto version contains sort of several distinct sections which are not included in the version distributed in the rest of the country.

11226 Is our understanding of that correct?

11227 MR. FECAN: I think there are differences, certainly, in advertising. I think that the Toronto real estate listings aren't a national thing. There may be other kinds of largely commercial sections that may be targeted in one -- classifieds. There may be another one. But I think that the point was, in terms of editorial content, we are dealing with, at best, a couple of pages.

11228 MR. WILSON: The Commission might choose to impose safeguards with respect to cross-media ownership only as between your licensee CFTO in Toronto and the Globe and Mail in respect of this Toronto addition which we were just discussing. Such safeguards could include, for example, a requirement to maintain separate news departments and editorial staff.

11229 If the Commission's concern with cross-media issues is at that local level, rather than at the national level, would it be functionally possible to impose such safeguards with respect to CFTO and the Globe and Mail?

11230 MR. FECAN: We would not accept.

11231 MR. WILSON: My question is, would it be functionally possible to impose those?

11232 MR. FECAN: We just wouldn't accept it, on any level.

11233 MR. WILSON: My question is not whether you would accept it or not; my question is whether it would be functionally possible to impose such safeguards.

11234 MR. FECAN: I'm afraid that you have my answer.

11235 MR. WILSON: During the discussions that were held last week you suggested a willingness to meet the same commitments as put forward by CanWest Global with respect to cross-media ownership, and in the Statement of Principles and Practices that was filed by CTV, you contained in Article 7 the issue with respect to public service announcements to make the public aware of the various complaint mechanisms.

11236 In their presentation Global proposed spending $1 million per annum on these public service announcements promoting awareness. Are you prepared to make a similar commitment?

11237 MR. FECAN: Happily.

11238 MR. WILSON: At page 17 of your 6th of February deficiency response you listed a number of principles at 3(a) to (d) and 4(a) to (d) that you would be prepared to adhere to respecting cross-media ownership. Do you have any comment on the possibility of these principles being imposed either as expectations or conditions of licence?

11239 MR. FECAN: I will pass that on to Trina, but I think our position, in principle, would be that we would not be comfortable with a COL.

11240 MS McQUEEN: We have described to you in the deficiencies the way that Bell Globemedia would operate. So to have expectations put on our licence for the operation of Bell Globemedia I'm not sure is what you want to do.

11241 However, we have also described the way we intend to operate, and our real concern, basically, is that the code not be imposed as a condition of licence. We would be happy to have that code, which deals with CTV, imposed as an expectation or a commitment or a requirement, but we would like it at a level below the condition of licence.

11242 MR. WILSON: Just to clarify one thing coming out of those principles, when in those principles set out in your deficiency response you refer to all Bell Globemedia news organizations, does that term encompass CTV NewsNet?

11243 MS McQUEEN: Yes, it does.

11244 MR. WILSON: Moving on to the Quebecor code, which has been previously discussed with you, that code can be summarized as follows: That employees of the licensee shall not receive or transmit unpublished newsworthy information from or to their counterparts at commonly owned newspapers; that the newsrooms of the licensees are required to be located in different premises from the commonly owned newspaper newsrooms; that no electronic computer or other technological link should exist between the newsrooms of the licensees and the commonly owned newspaper newsrooms.

11245 Do you have any comment on some or all of these principles being imposed either as an expectation or a condition of licence?

11246 MR. FECAN: We would not accept any of them, on any level.

11247 MR. WILSON: In addition to the Quebecor code itself, there was an additional document filed in the context of the TVA hearing setting out the terms of a surveillance or watchdog committee to deal with complaints under the code.

11248 I believe that you were given copies of that document as well.

11249 Would similar rules to those proposed for that TVA committee also work for a committee at CTV?

11250 MS McQUEEN: I think the mechanism we were proposing was not fully worked out by us. The Quebecor model has some things that we think we could use, and others that perhaps we don't consider applicable.

11251 For instance, we are quite willing to have the process of investigating complaints be the same as in Quebecor.

11252 What we are struggling with is the composition of the monitoring committee.

11253 So I think we would be at least okay with the description in the Quebecor code of how complaints are investigated, dealt with and reported.

11254 MR. WILSON: Do you have any comment on the possibility of such a committee with a structure such as in the TVA situation being imposed as either an expectation or a condition of licence?

11255 MS McQUEEN: Again, our preference really -- and we understand that this is a balance that the Commission has to achieve between its interest in diversity of voices and the regulation of the practice of journalism.

11256 We note that Quebecor wrote its own code -- a voluntary code -- voluntarily put it into a condition of licence, voluntarily accepted that, and that seemed to be appropriate for their circumstances, and probably reduced the level of regulation of the performance of journalism because they did it voluntarily.

11257 By the same token, we would like to put forward our code and our mechanisms to you on a voluntary basis and have them accepted not as a condition of licence, but as a voluntary commitment. And we think that that is a balance, achieving the two interests.

11258 We are concerned that the provisions of the Quebecor code, in our mind, rightly or wrongly, do not accord with some of the sections of the Broadcasting Act, and give us concern about the regulation of the day-to-day practise of journalism.

11259 MR. WILSON: I think you have actually answered my next question in part, but I am going to put it to you anyway, in case you have any further comments.

11260 With reference to the Statement of Principles and Practices you have filed with us, in clause 4 you committed to establishing an internal mechanism to deal with complaints. Can you please describe for us the composition and structure of such a mechanism?

11261 MS McQUEEN: As I say, we have not really consulted with others and with our journalistic departments to see what the most effective mechanism is, so I am struggling to give you an answer on that one.

11262 Obviously, I guess, I could say that the people involved would be, as in the Quebecor code, people of impeccable integrity, and there are many of those in Canada, and that the rest of the code, based on how the complaints would be dealt with, is fine with us.

11263 MR. WILSON: Just to confirm then, just to follow up on what you said about the composition would be persons of impeccable character, I take it that from that we would be talking about a committee that was, in a sense, independent from CTV.

11264 MS McQUEEN: It might not necessarily be totally independent. For instance, there might be a very respected journalist that had worked for us at one time, or indeed was in another part of the operation, whose services we thought would be valuable, who would be respected by the journalists. So we wouldn't want to rule that out as a possibility.

11265 MR. FECAN: I think what we would like to do is get back to you in a week or two with an actual -- a more firm description -- once we have had time to consult with our various journalistic groups.

11266 MR. WILSON: Finally, I would like to ask, do you have any comments -- and I am sure you have seen it -- on the paragraph that was proposed to us by the Friends of Canadian Broadcasting for insertion in your proposed Statement of Principles and Practices?

11267 MS McQUEEN: We think that really makes it the Quebecor code, and our opinions about accepting the Quebecor code are on the record, we think, in detail, and numerous times.

11268 MR. WILSON: Those are my questions, Mr. Chairman.

11269 THE CHAIRPERSON: Thank you, counsel.

11270 Those are all of our questions. Again, I want to thank you very much for your participation in our proceeding.

11271 I will make some more general comments when we conclude.

11272 We will take a short break now, to allow the representatives from Global to appear up here, and then we will hear Global's reply.

--- Upon recessing at 1530 / Suspension à 1530

--- Upon resuming at 1535 / Reprise à 1535

11273 THE CHAIRPERSON: Welcome back to our proceeding. We will now hear the reply to interventions and the closing comments from Global.

REPLY / RÉPLIQUE

11274 MR. NOBLE: With your leave, Mr. Chairman, before we get into our final presentation, I would like to make some comments on what CTV proposes for the interior broadcasting. Although we did not appear as an intervenor on that issue, we did present our position to Commissioner Grauer, and I would like to clarify some points.

11275 As I understand it, what CTV is offering is to black out their commercials in the interior to the interior broadcasters, excluding Kelowna. They did not mention Kelowna. It was curiously absent from their list of CHBC affiliates -- CBC affiliates -- which we own.

11276 In addition, their definition of advertising, as I understand it, was as defined by the CTV network, which is different from how we have described it with the interior broadcasters that we allow to delete and insert off our schedule.

11277 So we would have difficulty continuing the process of allowing the interior broadcasters to delete our commercials, under our definition, which has a 25 year history, using the CTV definition.

11278 I just wanted to get that on the record.

11279 What we were looking for and hoping for was parity with CTV; that they would, in all instances in interior broadcasting, have their commercials -- regional commercials -- which we have defined as regional commercials -- deleted in a similar fashion to the Global commercials.

11280 THE CHAIRPERSON: Thank you for that clarification in respect of your operation.

11281 MR. NOBLE: Thank you, Mr. Chairman.

11282 First, let me introduce the panel today. To my right is Leonard Asper, President and Chief Executive Officer of CanWest Global Communications Corp., our parent company. To my left is Charlotte Bell, our Vice-President of Regulatory Affairs.

11283 At the table behind me, on my far right, is Loren Mawhinney, Vice-President of Canadian production. Beside Loren is Jack Tomik, General Manager for Global Operations in B.C. and Senior Vice-President, CanWest Media Sales. And next to Jack is Ken MacDonald, our national Vice-President of News.

11284 For the record, my name is Gerry Noble, President and Chief Executive Officer of Global Television Network.

11285 Chairman Colville, Members of the Commission, we thank you for the opportunity to respond to the comments of intervenors in this proceeding.

11286 First, I would like to acknowledge the hard work of Commission Staff and Commissioners in this important proceeding.

11287 Also, I would like to thank all intervenors for their involvement and contribution to the hearing. Together we have all explored important aspects of the Canadian broadcasting system and together we will forge ahead to continue to build the system for all participants and, in particular, the viewers.

11288 A year ago we came before you in Vancouver seeking your approval to grow our company in order to allow us to become a national network and to give us the critical mass necessary in order to remain relevant in an increasingly fragmented media world.

11289 At that time we set before you a plan that would unequivocally strengthen the Canadian broadcasting system and contribute millions of dollars in direct benefits to the system. We also said that we would be back at renewal time to demonstrate to you our commitment to the system as a truly national network.

11290 Commissioners, our renewal applications clearly demonstrate that we have stepped up to the plate. Our plans for the next seven years include significant commitments to Canadian programming: more than $260 million in spending on Canadian drama and comedy; over $1 billion in Canadian programming spending over the licence term; over and above that, we have already fulfilled many of the benefits flowing from the approval of the WIC transaction and we will continue to do so; and finally, we will maintain as a minimum our current levels of commitment to local programming for each of our stations across the country, including those stations which have been experiencing financial hardship due to changes in the broadcasting system.

11291 We have heard from intervenors in this process that local reflection, community involvement and the importance of reflecting Canada's cultural diversity are important to Canadians from coast to coast. Our commitment in these areas is significant and it flows from our corporate vision. The number one priority for each of our station managers is to ensure that they meet the needs of their respective audiences in the communities they serve.

11292 From a corporate perspective, we are committed to ensuring that this mandate will be reinforced during the next licence term in each of the communities we serve across the country. Our local station managers will continue to mainly focus on serving their local audiences. This will be their priority. They will not be overburdened by responsibilities that, for the most part, fall within the purview of corporate decision making, such as meeting national programming and promotion requirements or developing corporate strategies.

11293 MR. MacDONALD: Commissioners, we recognize the importance of preserving the diversity of voices available to Canadians in a consolidated media environment. Indeed, we have had a good discussion on that over the last couple of weeks.

11294 We will continue to uphold the principles of the Broadcasting Act and ensure that Canadians continue to be exposed to a wide range of opinions and voices concerning matters of public interest.

11295 At the same time, we have discussed at length the numerous benefits that we think will flow, and are already flowing, to Canadians from our joint efforts with our print assets across the country -- providing more breadth and depth of information on issues that matter will significantly enrich the Canadian broadcasting system.

11296 The Commission has heard at these hearings that these journalistic benefits to the system would be impossible should a firewall be erected between the print and television journalists. In addition, should such a prohibitive measure be taken, it could raise the somewhat incredulous prospect of Global television competitors actually developing journalistic collaboration with journalists employed by CanWest-owned newspapers.

11297 It is also important for the Commission to note that the practice of cross-platform journalistic collaboration is not a new one. Joint newspaper and television projects have been commonplace for years, long before consolidation, as has cross-platform work by individual journalists and columnists. Why? Because done right, it enriches the quality of television journalism. The viewers benefit; the system benefits.

11298 Indeed, in recent months Global and the CanWest-owned newspapers have worked together on a host of stories and projects, such as the Calgary series "Behind the Badge" and many others, which we described on the public record at these proceedings.

11299 It is instructive to note that not one of the appearing intervenors who argued in favour of a restrictive code of conduct chose to criticize these concrete examples on their merits. Instead, they opted to warn about what one journalism professor correctly described to the Commission as merely "a future, phantom threat".

11300 The Commission has heard from some of the best journalistic minds in the country, including people who are training the next generation of journalists, who say: Don't restrict the ability of broadcasters to explore and develop the benefits of the converging media world.

11301 Those seeking a restrictive code have not provided any evidence to suggest that diversity of voices may be impaired. Indeed, the intervenors pushing for a restrictive code have acknowledged that there are benefits associated with convergence.

11302 While we have stated that it is our firm belief that the benefits of convergence by far outweigh any concerns expressed by the intervenors, we have developed a Statement of Principles and Practices which we will abide by to reassure the Commission and the public that our consolidated efforts will enhance the diversity of voices, not impair it.

11303 MR. NOBLE: As a national network we recognize our responsibility in ensuring that all Canadians have an opportunity to share in the Canadian broadcasting system. As we have said before, our corporate philosophy is one that rests on the principle of inclusion. To this end, we have put forth an aggressive and progressive plan for DVS rollout that will provide service to visually impaired Canadians. Together with CTV, we will lead the way in order to ensure that they, too, will share in Canadian stories.

11304 To do so, we will invest significant dollars in capital improvements and rollout our plan over the next seven years. The plan we have put before you is a minimum commitment and we will make best efforts to complete this process within the first two years of the licence term.

11305 We have heard the concerns of the Commission and some intervenors concerning the fair and balanced reflection of Canada's designated groups within the Canadian broadcasting system. We have already made progress in this area over the past three years, and will continue to build on our success in this area through our hiring practices and through the many programming and community-based activities already being done at the local level by our station managers.

11306 We recognize the importance of taking a more proactive approach, and this is why we are firmly committed to our six-prong plan to better serve Canada's designated groups, as well as our five-point employment equity plan, as explained to you last week.

11307 We look forward to filing a more detailed plan with the Commission, should you deem it appropriate as part of our renewal decision.

11308 As part of meeting the objectives we have set out for ourselves for the next seven years, we believe that modification of the advertising regulations as we have proposed will allow private conventional broadcasters to maximize their only source of revenues and meet their projections. This approach is consistent with what the Commission has already done for radio, as well as specialty licensees who also enjoy subscription revenues.

11309 Furthermore, the television regulations contemplate case-by-case exceptions by condition of licence. This is entirely consistent with our request.

11310 MS MAWHINNEY: Commissioners, we have embraced the Commission's new television policy and its principles. While our prime time programming obligations have significantly increased as a result of the new policy, the Commission also had the forethought to provide us with the necessary flexibility in scheduling and production plans to ensure that we can seek projects from a variety of sources. By doing so, we believe that we can maximize our contribution to the independent production sector and better serve our audiences by choosing the best possible Canadian prime time programming available. This, we believe, can only benefit the system and, more importantly, the viewers who watch our programming.

11311 We have already had a glimpse at the type of success we might have as a result of the new policy through our new Canadian program "Popstars".

11312 We see no rationale for imposing further restrictions or quotas. In our view, quotas would only create a system where some would benefit, while others would lose.

11313 Among private broadcasters, from August 2000 to March 2001, in priority series programs in the 18 to 49 demographic, Global had 7 of the top 10 and 13 of the top 20 Canadian programs. It is worth noting here that although the CRTC numbers published for 1999 viewing showed Global with a lower percentage of viewing of its Canadian programs as compared to our overall viewing, Global still ranked number 1 in total viewing to Canadian programs in this data. Looking at percentages alone ignores the absolute increases and successes of Canadian programs on Global.

11314 This is a really important fact overlooked by intervenors. The point is, Global has a tradition of attracting maximum audiences to its Canadian prime time programming.

11315 We are committed to continue to seek out the best possible programming available, no matter where it originates. We have the development offices, significant development funds and the tools in place to ensure that the best ideas find their way to our screens.

11316 Furthermore, we have given the matter of restrictions on production sources as it relates to the use of affiliated companies much thought, and we have heard the intervenors' views on this point.

11317 Our track record since we acquired Fireworks in 1998 demonstrates that we source programming from a wide variety of producers, whether they are affiliated or not, and we are committed to continue this during our next licence term.

11318 This is the best way to ensure that more Canadians watch Canadian programming, and it will create more success stories going forward.

11319 MR. ASPER: The pace of change in the Canadian broadcasting system over the past three years has been dramatic. There is more for Canadian viewers to watch and access from a variety of sources than ever before in the history of the Canadian broadcasting system.

11320 The Commission has responded in a progressive and appropriate manner so that over the next seven years, in partnership with the CRTC, we will continue to grow the Canadian broadcasting system and continue to ensure pride of place for Canadian programming on our airwaves.

11321 In July 2000 you endorsed our plan to become a national network by approving our acquisition of WIC television stations. We have stepped up to the plate as a new national voice for Canadians. We are returning CHCH and CHEK back to their local roots as promised. Through our new western-based national newscast and public affairs program launching next fall, there will now be a national perspective for Canadians to share in from the west.

11322 Through our documentary initiative "Our Canada", Canadians from every region in Canada will share their stories and ideas from coast to coast.

11323 We are producing two full schedules of Canadian programming, including two separate streams of eight hours of priority programming, one for Global and one for CH, for a total of 16 hours per week, even though we do not have two networks.

11324 We are proud of the plans that we have put forth in this renewal process and we are committed to see them through for the next seven years.

11325 Commissioners, we have told you on more than one occasion that we are willing to live by a social contract in which conventional broadcasters like Global are afforded regulatory flexibility in return for continuing their role as the cornerstones of the social policy objectives of the Broadcasting Act.

11326 In the last ten years the number of employees working in the Canadian television industry has increased by 1,500 people, which should resoundingly dispel any notion that jobs are disappearing. Similarly, the number of direct production-related jobs has more than doubled in the last seven years, from 20,000 to 45,000.

11327 The Directors Guild membership has almost doubled, from 1,700 to 3,300 members, in just over ten years.

11328 The Writers Guild membership has increased from 1,100 in 1991 to 1,500 in 2001.

11329 The CFTPA reports an increase in membership production volume of 12 per cent over last year.

11330 Production volume has increased 50 per cent in the last five years for English Canada, from $1 billion to $1.5 billion.

11331 Finally, by its own admission, the production industry by revenue is larger than the entire television industry.

11332 Such an industry is neither one in decline nor one that needs additional regulatory protection, to the detriment of broadcasters.

11333 The 70 or so new competitors to Global who have emerged within the last ten years, plus the 50 or so more that will be launched this fall, are in part responsible for the success that has accrued to the production community. The significant investments in programming made by Global and CTV have also played a major role. And we cheer the success of all of the beneficiaries of the Commission's policies.

11334 But in looking at the system as a whole, those who want more for themselves at the expense of CTV and Global have already benefited substantially from the Commission's policy and, like Oliver Twist, simply want more for themselves and their interests for the sake of it.

11335 We ask the Commission to consider the interests of the viewers in coming to its decision on each of the issues, and also to consider the role of broadcasters in the context of the entire system. In your role as adjudicators, we trust the Commission to uphold the bargain that exists between you and the licensees, which is that we will contribute according to our means, and according to what is fair and reasonable in the circumstances.

11336 We have not let you down before and we will not in the future. CanWest, through Global TV, is committed to continuing its leading role in the drama that is the Canadian broadcast system by building, innovating and investing. It is what we have done for 27 years as members of the system, and what we will do for 27 more.

11337 Thank you, Commissioners.

11338 We would, of course, now be pleased to answer any questions which you or legal counsel may have.

11339 THE CHAIRPERSON: Thank you for your reply.

11340 Again, we will take a short break, just to see what questions, if any, we have. I believe that counsel will have some questions, in any event, but we will take a quick break. Don't go away.

--- Upon recessing at 1555 / Suspension à 1555

--- Upon resuming at 1600 / Reprise à 1600

11341 THE CHAIRPERSON: Welcome back to our proceeding. We have gone over your reply and the Members don't have any questions, but as I indicated, I think that counsel has a few questions just to clarify several issues.

11342 Counsellor Moore.

11343 MS MOORE: Thank you, Mr. Chairman.

11344 Turning first to commitments with respect to local programming, you are familiar with paragraph 43 of Decision 2000-221, which was the transfer of ownership decision. In that paragraph there are expectations with respect to local programming that were put forward by the Commission for the various stations involved.

11345 Could I please have your comments on the possibility of those expectations being imposed as conditions of licence for those stations.

11346 MR. NOBLE: We would accept those as commitments over the licence term.

11347 MS MOORE: As conditions of licence.

11348 MR. NOBLE: Sorry, as commitments.

11349 MS MOORE: As commitments.

11350 MR. NOBLE: Yes.

11351 MS MOORE: Do you have any comments on the possibility of it being imposed as a condition of licence?

11352 MR. NOBLE: We would prefer it as a commitment.

11353 MS MOORE: Thank you.

11354 Similarly, with respect to the revised chart, I believe that the most current version was filed on April 23. Do you have any comment on the possibility of the times that were put forward -- the sort of actual times -- being imposed as conditions of licence?

11355 MR. NOBLE: The actual times that we have listed under our current commitments, we have agreed that those would continue as our commitments, but the column that says what we are currently doing is just there for the Commission's information.

11356 So we are willing to commit to the column that indicates what our current commitment is, as a minimum.

11357 MS MOORE: And you don't have any comment on the possibility of that left-hand column being imposed as a condition of licence?

11358 MR. NOBLE: No, this is consistent with the policy, and my previous remark; we accept them as commitments.

11359 MS MOORE: Thank you.

11360 As we discussed with CTV, the Commission may decide to limit the amount of programming acquired from affiliated production companies, defined as those in which the licensee owns 30 per cent or more of the equity. I will put forward two possible conditions of licence for your comment: (a) a condition of licence limiting the amount of priority programming that may be produced by the licensee or by an affiliated independent production company, perhaps to a range between 25 per cent and 49 per cent; and (b) a condition of licence guaranteeing access to unaffiliated producers during the period 6 a.m. to 7 p.m., perhaps expressed as a minimum of 50 per cent of all independent production broadcast during this period.

11361 MR. ASPER: I think we would be unwilling to live with either of those commitments, for the reasons we have stated.

11362 I'm sorry. We would be willing to commit to the things I said in my opening comments, which is to continue our track record of doing what we have been doing. But, no, we would not accept a condition of licence in that respect.

11363 MS MOORE: Could I have your comment -- this is with respect to closed captioning -- on the possibility of all of your stations, regardless of revenue, being required by September 1, 2001, and for the rest of the licence term, to caption at least 90 per cent of all programming during the broadcast day, including 100 per cent of all news.

11364 MR. NOBLE: Yes, and we have already gone on the public record as saying that we would make that commitment.

11365 MS MOORE: And that would be as a requirement for each station, regardless of the level of revenue?

11366 MR. NOBLE: Regardless of size; correct.

11367 MS MOORE: Do you have any further comment on the possibility raised by some intervenors of short-term licence renewals for some or all of your licensees?

11368 MR. NOBLE: Longer is better.

11369 On this one we agree with CTV. We think that a shorter term would be seem by some as punitive. I think that certainly from an operational point of view it is a lot nicer to plan with certainty what your commitments are likely to be, and what the rest of the industry's commitments are likely to be from a competitive point of view, so we would prefer a longer term, yes.

11370 MR. ASPER: Counsel, just to echo Mr. Fecan's statements, we don't feel that we have done anything to suggest that we will not live up to our commitments. And as he said, a less than seven-year term would be seen as some statement by the Commission, and we, for 27 years in this broadcast system, have been good on all of our commitments, and we would expect that the Commission would take that into account in looking at the licence term.

11371 MS MOORE: Turning now to a matter concerning CHAN-TV, you are familiar with the agreement which permits the insertion of local commercials by Jim Pattison Industries and other parties.

11372 You are familiar with that agreement?

11373 MR. NOBLE: Yes.

11374 MS MOORE: Assuming that some parity could be achieved -- you mentioned parity in your comments earlier -- assuming that some type of parity could be achieved, perhaps through a negotiated solution to the matters that are outstanding, do you have any comment on the possibility of that agreement being required by condition of licence on CHAN?

11375 MR. NOBLE: Give us a minute, please.

--- Pause / Pause

11376 MR. NOBLE: With all due respect to the Commission, we hope to be able to resolve this with the interested parties on a negotiated basis and would appreciate a period of perhaps 30 days. If CTV is in agreement, and we can get agreement from our colleagues in the interior, perhaps we can work something out amongst ourselves and come back to the Commission with a solution that we are all happy with.

11377 MS MOORE: You have made those comments for the record, but I do need to ask you for your comment on my question, which is the possibility of that agreement being imposed as a condition of licence.

11378 MR. NOBLE: I don't think it would be necessary, frankly, as a condition of licence if we work it out with all interested parties.

11379 MR. ASPER: Counsel, just to add some context to that, the Commission licensing process is an evolutionary one, and to freeze commercial arrangements in the context of ongoing licensing in that market, I think, is something we would -- would be the reason, at least, that we would have trouble agreeing to this as a condition of licence.

11380 MS MOORE: Thank you.

11381 Those are my questions, Mr. Chairman. Now I will turn to my colleague for some questions regarding cross-media.

11382 MR. WILSON: A number of different safeguards or mechanisms have been imposed in the past by the Commission either as an expectation or a COL on licensees, and the specific safeguards that I am discussing here are the following: (a) the maintenance of separate news departments and editorial staff as between licensees and other media assets, like newspapers; (b) a requirement that each media undertaking is required to compete for its own audience and revenues, and that the financial requirements of one undertaking would not affect the independent operation of the other undertakings; (c) a prohibition on the sharing of management personnel between licensees and other media properties, like newspapers; (d) a prohibition on officers, employees and directors of a licensee sitting on the editorial boards of other media properties, like newspapers.

11383 Do you have any comment on the possibility of the imposition of some or all of these safeguards that I have just listed on licensees with respect to the following markets: Vancouver/Victoria, Regina, Saskatoon, Ottawa, Montreal, Halifax and Charlottetown?

11384 MR. ASPER: We do not think they are appropriate for any markets, for the reasons we have stated, in terms of the level of diversity within each of these markets on an overall basis. So we see no reason to distinguish between Regina on the one hand and Calgary on the other, or Vancouver for that matter.

11385 The immense sources of news and other information available to people in these markets renders those whole notions obsolete, so we don't see any reason for separation of the markets, or distinction.

11386 MR. WILSON: With respect to the Statement of Practices and Principles that CanWest filed with the Commission, I would like to follow up and confirm with respect to clause 7 of that statement.

11387 In your presentation to us last week you had stated as one of your commitments a willingness to spend $1 million per year throughout the licence term on PSAs. So with respect to clause 7 in the Statement of Principles and Practices, is that still your intention?

11388 MR. ASPER: Yes, it is.

11389 MR. WILSON: In CTV's 6th of February deficiency response at page 17, items 3(a) to (d) and 4(a) to (d), CTV suggested a number of safeguards to address cross-media ownership. I would like to put each of those principles to you and ask for CanWest's comment on the possibility of the imposition of a similar principle as either an expectation or a condition of licence.

11390 At 3(a) CTV suggested that all Bell Globemedia national news organizations will remain editorially autonomous, with a separate decision making process related to the journalism that will be presented to readers and viewers.

11391 Can you please provide us with your comments on the possibility of the imposition of a similar principle either as an expectation or a COL on CanWest's licensees?

11392 MR. ASPER: Counsel, I may be able to save some time here. We have listened to the intervenors, we have certainly tried to respond to the questioning of the Commission, and counsel to some extent, and we have put forward a code, a Statement of Principles and Practices, which we are willing to have appended to our licence as a commitment. I think to negotiate or go through different variations on the theme here would be going over old ground.

11393 Whatever is in the CTV deficiencies, even CTV, I would argue, has departed from and landed at what they have filed with you. And I think it is safe to say that what we have filed with you is, we think, in the best interests of journalism, the Canadian public, and all of the other interested stakeholders in the system. So I am not sure if it is helpful at this stage.

11394 I don't want, obviously, to upstage or unduly infringe on your questioning, but if they are following the same line, I think I could provide the same response, which is that we have filed what we have filed, which has been very carefully thought out, and I think that is what we are willing to live by.

11395 MR. WILSON: Then if I could just get for the record your comments on the possibility of the imposition of those CTV principles as either an expectation or a condition of licence on CanWest's licensees.

11396 MR. ASPER: Unfortunately, I don't know what they are. But if you want something for the record, we would not be willing to live with those, as I understand them to be, to the extent they differ from what is in the Statement of Principles and Practices we have filed.

11397 For example, we have said that we would have separate news management. If that is something that is in the CTV response to deficiencies, then, of course, by definition, we would accept it.

11398 So if you could take our answer in light of the comparisons, that would be my response on the record.

11399 MR. WILSON: Just to look at the Quebecor/TVA situation, in addition to the code of conduct which has been discussed with you already, another document was put forward in that context -- a document setting out the terms of a watchdog or a surveillance committee to deal with complaints under the code -- and you were given copies of that document. Would similar rules to those proposed for the TVA committee also work for a committee at Global?

11400 MR. ASPER: Counsel, I think to select piecemeal from the Quebecor code would be a mistake and certainly something we couldn't do, because whatever is in the complaints committee mechanism set up by Quebecor is made in the context of what is in the Quebecor code overall.

11401 We, again, have come up with a proposition for a complaints committee. It is internal. It would certainly include Ken MacDonald, our National Vice-President of News. We have not given more thought to exactly who would be on that committee, but, again, we have made a proposal for a committee and I think we would stand by that, as opposed to anything that is in the Quebecor code.

11402 MR. WILSON: Just to pick up on the internal mechanism, which you have mentioned at paragraph 4 of your Statement of Principles and Practices, and which I think you have just referred to, you mentioned that Mr. MacDonald would be one of the people who would be on that committee. Can you tell us anything further about the composition and structure of this internal mechanism?

11403 MR. ASPER: We haven't come up with any specific composition.

11404 I could ask Ken MacDonald to offer some suggestions to give you a sense of where we might be heading in that direction, in terms of that question.

11405 Ken, why don't you --

11406 MR. MacDONALD: Yes. Counsel and Commissioners, we have thought about different ideas, but we haven't arrived at a formula that we think is just right yet. We need a little more time to think this through and put it together.

11407 There are some things in the Quebecor code that may work, but I think there are some things that don't in that monitoring committee mechanism.

11408 We would respectfully ask if we could file something in the next week to ten days or two weeks -- something more fulsome in terms of how the mechanism might work.

11409 MR. WILSON: If I can ask for your comments, what if the Commission were to choose to require that this mechanism to deal with complaints was required to be an independent committee, as opposed to an internal mechanism?

11410 MR. ASPER: Counsel, we have advisory boards in Victoria, Quebec and Hamilton as a result of previous licensing decisions -- external advisory boards. They have never been the subject of any complaints. They have never been the subject of complaints, nor have they, to my knowledge, received any complaints.

11411 There is a Broadcasting Standards Council that is a body to which complainants can go.

11412 There is the CRTC, of course, and we are required to provide the CRTC with copies of any unresolved complaints on an ongoing basis with respect to our broadcasting business.

11413 We have offered to file, and we will commit to file, an annual report on the goings on of the complaints committee internally. And I think that we see all of these public -- particularly the CRTC and the Broadcast Standards Council, as sufficient mechanisms, in addition to the regulatory environment in which we operate, whereby we must make complaints known to the Commission -- as sufficient to not require there to be an independent public committee.

11414 There are plenty of independent watchdogs and monitors, being the CRTC and the Broadcast Standards Council, to name a few, such as to obviate the need for yet another public committee.

11415 MR. WILSON: Finally, do you have any comments on the paragraph that was submitted to us by the Friends of Canadian Broadcasting for insertion in your proposed statement of principles and practices?

11416 MR. ASPER: Is that the one with respect to newsgathering?

11417 MR. WILSON: Yes, that would be the paragraph.

11418 MR. ASPER: I will let Ken MacDonald answer that, briefly, and then I will choose to supplement or not.

11419 MR. MacDONALD: We think that that clause, in effect, sort of is Quebecor in a mini version. We think that it does erect the kind of firewall that we would have a problem with. And in that language it doesn't change the substance of what it is getting at, and it shuts down the kind of collaboration and the things that we think we can do to benefit the viewers that we have talked about. So we could not accept that.

11420 MR. ASPER: Counsel, to make the point that Kirk LaPointe put forward, the result of that clause would be that CBC and the Toronto Star could continue to work together, as they have announced they will do, and have done. CHUM could collaborate with our papers and we couldn't.

11421 So it would have the obverse effect of limiting our own contact with our sister or brother papers, or media properties, while opening the way for our competitors to collaborate with them. That would be the reason why we think that doesn't make sense.

11422 MR. WILSON: I have no further questions, Mr. Chairman.

11423 THE CHAIRPERSON: Thank you, counsel.

11424 Those are all of our questions. I want to thank you for your participation in our proceeding. As I said earlier, I will make some closing comments at the end of the day, when we have heard the next party in the proceeding.

11425 MR. NOBLE: Thank you, Mr. Chairman, Commissioners, Staff.

11426 THE CHAIRPERSON: I understand that CTV wants a brief opportunity to make a response with respect to the notion of the B.C. interior issue, which I am prepared to do. I must say that I considered Global's position to be simply stating their view as it applied to them.

11427 Perhaps, Mr. Fecan, if you want to go to one of the microphones...

11428 MR. FECAN: Thank you, Chairman Colville.

11429 When CanWest applied for BCTV it was understood by all that it would cause CTV to be displaced from the interior of British Columbia. We have worked hard and offer a reasonable compromise for the local broadcasters in the interior through the deletion of regional advertising, as we have defined it.

11430 At that hearing -- the WIC/BCTV hearing about a year ago -- CanWest made an offer on the record to be helpful to extend that CTV reach. Even the potential was raised of sharing transmitter sites, if it made sense.

11431 What they didn't say to you at that time was that they would only do that if we subscribed to their deal.

11432 If there were consequences to the WIC approval, they owed it to you to tell you then, not now. And they owe it to you to be part of the solution.

11433 Local broadcasters who appeared before you told you that it was not our signal that would cause them significant harm, and whatever harm we are prepared to ameliorate by doing the deletion; what would cause them significant revenue losses, that they projected would happen, would be if CanWest cancelled the longstanding arrangement.

11434 Finally, there are two precedents for regional commercial deletions -- the CBC's and CanWest's -- not just one. There are two precedents. We choose the CBC's.

11435 THE CHAIRPERSON: Thank you.

11436 That concludes the consideration of the applications by CTV and Global for the group licence renewals and the renewals of the individual stations. However, Mr. Secretary, there is another issue which we will hear today, which, while perhaps not as grand as these, is nonetheless significant to the parties involved.

11437 Would you call the first party, which is the intervenor respecting CHUM's application.

INTERVENTION / INTERVENTION

11438 MR. CUSSONS: Thank you, Mr. Chairman.

11439 We would now like to hear an intervention by Passion Media Inc. This intervention concerns applications by CHUM Limited for licences for digital specialty television programming undertakings -- category 2 -- specifically, Relationship Television (1) and Relationship Television (2).

11440 Passion is invited to come forward to make its intervention on these applications, please.

11441 MR. HAINES: Good afternoon, Mr. Chairman, Members of the Commission and Members of the Commission Staff. Thank you for the opportunity to appear before you to outline our concerns with the CHUM applications for Relationship TV.

11442 Before starting our presentation I would like to introduce the Passion Media team.

11443 To my immediate right is Sue McGarvie, Vice-President of Content for Passion Media. Sue is well known in the Ottawa area as a radio broadcaster, and she is also a registered sex therapist. Her primary responsibility is the development of radio, television and web content for Passion Media. Sue is also the Chair of the Ottawa chapter of Canadian Women in Communications.

11444 To Sue's right is Ross Chin Yee, President of PassionVillage.com, a founding shareholder and a member of the board of directors of Passion Media. Ross started his professional career as a dentist, and then, before founding Passion Media, he was a financial analyst.

11445 To my immediate left is Martin Doane. Martin is a lawyer; until recently a partner with Gowling Henderson. At present he is in private practice and is general counsel and a co-founder of Passion Media.

11446 My name is Gord Haines. I am President and CEO of Passion Media. I have a long and varied background in Canadian broadcasting, from radio to free television, pay and pay-per-view television, DTH, DBS and independent production.

11447 MR. DOANE: Passion Media is a new voice on the Canadian broadcasting scene. Its conception occurred during a walk on the beach in Toronto, as Ross Chin Yee and his wife discussed the fact that there was no television channel or web community that dealt frankly and non-exploitatively with human sexuality in an informative, entertaining and inoffensive manner.

11448 A light bulb went on. Ross thought the idea of a web community that would appeal primarily to women and couples by focusing on sexuality in a way that was positive, celebratory and non-exploitative would be a good place to start. Frankly, most of what was on the web, and to some extent on television, was either too coy or too brutally pornographic to satisfy either his or his wife's concerns.

11449 Ross called a couple of friends. They in turn called other friends, including me, and this group of entrepreneurs came together and became the founders of PassionVillage.com, a web community that has been fully active for seven months and already generates approximately 1.5 million page views each month.

11450 As we built and enriched the content in PassionVillage, Sue McGarvie quickly came to our attention. Sue's experience in radio with the Sunday Night Sex Show and her training as a sex therapist made her a natural to join our team. Her entrepreneurial instincts and knowledge of the broadcasting scene led us to apply for two category 2 digital specialty licences, Passion Television and The Singles Channel.

11451 The Commission's approach to category 2 applications meant that we did not require a substantial upfront investment to prepare marketing surveys, develop comprehensive program schedules, or make program acquisition commitments. A new player, a fresh voice in Canadian broadcasting, was able to put together an application and be granted the opportunity to obtain a licence. This licensing approach didn't just help us; it is the only reason we were able to develop Ross' idea for distribution on what is still the most powerful medium on earth -- television.

11452 Of course, getting permission to acquire a category 2 licence is just the beginning of the work. While the Commission's requirements for new category 1 applicants are far more demanding upfront, the requirements for successful category 2 applicants are equally, perhaps even more demanding once the Commission's blessing has been received. For a new player without an existing broadcast infrastructure, the requirements are even more daunting.

11453 MS McGARVIE: We started assembling a team with the kind of experience and credibility necessary to launch these two channels almost immediately. We put together program schedules that emphasize human sexuality in all of its aspects, without being exploitative or pornographic.

11454 The program schedule for Passion Television is intended to attract women and couples and is as different from the material broadcast by the pay per view licensees as can be. Passion TV will be far from prudish. Humour and the celebration of sexuality will be present throughout the schedule. But it will be driven by women's sensibilities -- non-exploitative, with a strong focus on sensuality, as well as the spiritual and relationship aspects of sexuality.

11455 The Singles Channel will be oriented to the singles lifestyle. Whether never married, recently divorced, separated or widowed, single persons make up a growing sector of our society. Most media targets either young singles or couples. Advertising, financial packages, entertainment and even groceries are driven from the assumption that, whether gay or straight, people live as couples.

11456 The challenges facing singles who wish to live a fulfilling and happy life are many. From relating to other people's kids to dealing with Mom and Dad's nagging for a grandchild, single people face situations that couples don't -- as simple a question as cooking for one, or as complex and emotional as how to prepare your home for Christmas. And, of course, the question of meeting people and dating will occupy much of our schedule.

11457 MR. HAINES: Passion Media has met with all of the largest distributors, in some cases on several occasions. We have spent significant time and money on surveys, video presentations, marketing materials, consulting fees and general overhead expenses. Our intent was to present ourselves to the distributors in a professional manner and to properly prepare for the coming fall launch. I am happy to report that the distributors are very interested in our channels, and we are close to those first critical agreements for distribution.

11458 It has been a very difficult time for BDUs. While attempting to negotiate terms of carriage with 21 new category 1 licensees in time for a fall launch, they have also been faced with the massive task of giving a fair hearing to each and any of the 262 category 2 channels that hope to launch this year as well.

11459 The BDUs have worked hard with Passion Media to provide a level playing field and to give us a fair opportunity to pitch our ideas. Our biggest concern has been timing. To complete such a massive process properly takes time, and, once carriage decisions are announced, the services to be launched will have to finalize arrangements in virtually every area of their business prior to launch. Ample time is desperately critical for those few new voices who survive the onerous journey to launch.

11460 Established broadcasters have the luxury of existing facilities and infrastructure. For them, time is important, but not life or death.

11461 Delays beyond the next few weeks, days even, may result in the inability of new players to be ready in time for the launch dates, and so the benefits in a new approach to licensing that would encourage fresh voices in the Canadian broadcasting system may be lost.

11462 Choosing from the original 262 category 2 services within a reasonable timeframe has been difficult enough for the BDUs. Once CHUM started telling them that they would have additional channels, some of them copies of existing category 2 channels and some with significant elements of other category 2 channels, the confusion became more pronounced and the process was delayed.

11463 One distributor challenged us to explain why they shouldn't wait to see if CHUM is licensed, since they had been assured by CHUM that it will be able to duplicate Passion Television via the applications currently before you. Similarly, these applications will allow them to duplicate The Singles Channel.

11464 I want to be very clear. We are not opposing competition from other category 2 services. The Commission's intentions in this regard have been clear from the outset. However, we are concerned when a large, well-financed broadcaster with multiple channels, already licensed and operating, can take the best ideas generated by others in order to create their own applications. We believe that additional category 2 services should be licensed as the policy clearly outlines. But if they are licensed, it should be under the same terms and conditions as the existing category 2 players, with a clearly defined period within which to achieve carriage and launch their channel.

11465 The Canadian broadcasting system is currently trying to digest as many as 283 new specialty channels. The Commission clearly recognized that this would take some time and so provided a window within which these new channels would have to negotiate carriage and launch their program services.

11466 It is our hope that you intend to continue to ensure an orderly introduction of new services to prevent chaos in the broadcasting system and to prevent the abuse of the dominant position in the marketplace held by established broadcasters.

11467 We believe, if the Commission decides to license any new category 2 licences now or in the future, that launch windows should be carefully specified and that none of the current applications will be permitted to further complicate the already difficult environment surrounding the 2001 fall launch.

11468 The only advantage a new player has is a fresh idea. If the system operates in such a manner that the strategic advantage of being first with a new idea is taken away, then your goal of encouraging new voices will not be realized. As it is, the need to find financing will probably mean that new players may have to form partnerships with existing broadcasters or other content providers, but at least the people with the exciting new ideas can be part of the team.

11469 Your approach to specialty channel applications brought new voices and new entrepreneurs to the broadcasting system in the past, from MuchMusic all the way to Showcase.

11470 We urge you to ensure that new players can play the same role in the new digital world as well. We do not oppose competition in the future, but let us compete fairly and let us compete on a level playing field.

11471 We recommend that you not allow the launch of any new licences which may be issued to CHUM until well after the 2001 launch. We would suggest that the licences should not be active until at least September 2002, and ideally not until the existing launch window provided to the current group of 262 category 2 services has expired.

11472 We would be happy to answer any questions you may have.

11473 THE CHAIRPERSON: Thank you, Mr. Haines. I believe we do have one or two questions.

11474 Vice-Chair Wylie?

11475 COMMISSIONER WYLIE: I have one question. In the last paragraph, where you make your recommendations, any new licences? Not only some that are competitive with those that are already licensed?

11476 MR. HAINES: What we are concerned about, I think, primarily here is creating an environment that is predictable for new entries in the marketplace. We don't want to confuse what is already a very crowded marketplace. There are 262 potential category 2 licences now vying for carriage, and to add stuff late in the game makes it a very confusing proposition for the BDUs and a much tougher proposition for new, non-aligned players.

11477 In the future, as we go forward, we are looking at a competitive environment, but in other industries that do not have a public process involved, the whole concept of keeping a new idea close to your chest until you are ready to launch is paramount in terms of protecting the research and development and the new ideas that those companies bring forward. And concerns about things like industrial espionage are a major factor for companies that do that type of thing.

11478 When you have a public process, such as we do in broadcasting, and you want to bring competition to bear, you need to somehow be able to protect those fresh new ideas as they come out of the gate. I think that the Commission's approach in the past with controlled launch timeframes is probably a good way to do that. We would like to suggest that this is an approach you continue to embrace.

11479 Right now there is a defined launch window for the current licences. Any new licences that come forward, we think, should have a defined launch window as well. People who are bringing forward new ideas, who are concerned about having those ideas picked off by an established broadcaster, if they know when those launch windows are up, for the current ones, and when the next launch window will be available, they will time their applications to the Commission to coincide with when they want these things to become public.

11480 So the Commission can continue to accept applications whenever the industry wants to put them forward -- whenever a new player wants to put them forward -- but it will be up to the player to decide the timing, and the Commission will determine the launch window.

11481 That is the thinking that we have at this time in that area.

11482 COMMISSIONER WYLIE: Thank you. That is clearer.

11483 Would you see that as a continuing -- I'm not sure that I understand. Do you see that just as a way of resolving this initial problem, and then it would be open season, so to speak?

11484 MR. HAINES: I think it is particularly important now because of the huge number of services out there and the difficulty for a BDU, for example, just to see their way through all of this and figure out what capacity they have and what channels they want and so forth. I think it is particularly important now.

11485 On an ongoing basis, I think for those people who have fresh new ideas to come forward, it is a mechanism that the Commission might want to continue to embrace in order to give them an opportunity to bring their idea to market, knowing full well that there will be competition down the road. If it is a good idea and it works, there will be competitors. But in a non-public industrial situation, typically, a company would hold a new idea close to its chest until it was ready to launch. If competitors like it, they are going to compete.

11486 That is the way the marketplace works in a non-public forum, so when you get into a public forum, there needs to be some mechanism to give that inventor, if you will, the opportunity to get their idea out in front, and if the competition comes along after the fact, that's fine. That is the environment we want.

11487 COMMISSIONER WYLIE: But in the licensing context that we have created, since the BDU knows what else is available once he is licensed, how effective, and therefore how practical, and therefore how wise is it to impose this? Since it is not close to your chest, we now know what you have on the books. And if we give a licence to CHUM, what you seem to -- you know, their application is out there.

11488 MR. HAINES: That's true, but no one knew prior to the application deadline. So when the current group of licensees put their applications in, they all did so relatively blind to what the other person was doing, or the other company was doing.

11489 Once you do that, through the gazetting process, your ideas become public. At that point, that is where the vulnerability starts.

11490 Because in the past the Commission has orchestrated some control in the area of launch in order to make sure that there is an organized introduction of new services, and that seems to have worked well so far.

11491 The industry is currently digesting quite a large group again. When that process is over there will be more. They may come through in smaller groups, or they may come through one at a time. It will be, I think, at that point the Commission's choice as to how it handles it.

11492 COMMISSIONER WYLIE: I am not sure that we are understanding each other. I am looking at the practicality of this. We now have gazetted the CHUM applications. They are open to the public. The BDUs know that they are there.

11493 Perhaps we can say "No, we won't license you" or "We will license you, but you can't become active until 2002", but it is known what is there.

11494 How effective would any action be on our part, since the BDU doesn't have to carry category 2s?

11495 Suppose the BDU thinks that this will work better than yours. You are back to square one.

11496 I am not sure how helpful our regulatory intrusion would be in this circumstance -- what it would achieve.

11497 MR. HAINES: I think it is helpful in the sense that the original applicants have an opportunity to put their ideas into practice. We do expect competition. All we are looking for is a fair opportunity within the structure that was given to us to apply to go forward.

11498 There were a number of category 2 licences issued in this past round, and there is a fair amount of competition out there for the available capacity. I think that to then come in late in the game and rush through, having cherry picked from that group the best ideas, is probably not all that productive from the standpoint of bringing new ideas and new voices into the broadcasting system.

11499 If there is a timeframe set for that launch window, and then the next group that applies and may be granted licences at any time through that period is given the next launch window opportunity, then I think the system is better served overall.

11500 Would there be other competitors that might come forward with ideas similar to what CHUM is putting forward now? That is possible, but it is the choice of the applicant at that point to decide at what point during the current window they want to make their application public. They may not want to apply if they know there is a current window until toward the end of that, so that they are not out there, for copying purposes, too early in the game.

11501 COMMISSIONER WYLIE: Thank you.

11502 Thank you, Mr. Chairman.

11503 THE CHAIRPERSON: Thank you.

11504 I think, Mr. Haines, given the second-last round of licensing of specialty services, you are giving us more credit than we deserve for controlling launches.

11505 Thank you for your intervention. I think those are all of the questions we have.

11506 Mr. Secretary?

11507 MR. CUSSONS: Thank you, Mr. Chairman.

11508 I would now like to invite CHUM Limited to come forward and present its rebuttal to the intervention by Passion Media Inc.

REPLY / RÉPLIQUE

11509 THE CHAIRPERSON: Welcome, Mr. Miller.

11510 MR. MILLER: Thank you, Mr. Chairman, Madam Vice-Chair, Commissioners and Staff. For the record, my name is Peter Miller and I am Vice-President, Business and Regulatory Affairs, for CHUM Television.

11511 Perhaps for no better reason than to bring a very long hearing for you to a close sooner rather than later, rather than trying to rebut all of the matters raised by Passion in their intervention, we are here primarily to answer any questions you may have about our Relationship Television applications and, most particularly, to urge you to maintain your established licensing framework for category 2 digital specialty services.

11512 As you know well, last year, after an extensive public process, the Commission released its licensing framework for the new digital services. The category 2 framework was truly innovative in that it acknowledged the need for innovation in a rapidly changing technological environment and with different market realities that face us all in the digital environment.

11513 What distinguished category 2 licences from their category 1 counterparts were the non-traditional criteria by which they were to be evaluated. The criteria were fourfold: compliance with the Commission's ownership policies; compliance with eligibility requirements to hold a broadcast licence; commitments to minimum Cancon requirements; and that the services not be directly competitive with an existing analog pay or specialty or category 1 service.

11514 Moreover, in establishing these criteria the Commission specifically decided to encourage direct competition between category 2s, to establish a more open-entry marketplace, and to grant an unlimited number of category 2 licences.

11515 In addition, from a process basis the Commission made it clear in its licensing framework, during the course of the initial hearing and in its subsequent decisions, that it would entertain category 2 applications on an ongoing basis.

11516 In reliance of this framework, CHUM Television specifically chose not to file in the first round every conceivable category 2 application that we might be interested in launching. We knew that in light of your policy we would have additional opportunities to file category 2 applications, and we believed that the process would be a relatively expedited one.

11517 I should note that the category 2 applications you are considering today are indeed applications for the same types of services for which we filed a category 1 application. So we are stealing no one's ideas. Our only regret is that we didn't file the category 2 application for Relationship Television earlier.

11518 In filing a number of category 2 applications, of which Relationship Television is a part, we took great pains to ensure that they were entirely consistent with the Commission's framework and were in no way competitive with existing category 1 or analog services.

11519 To this effect, it is worth noting that we have received no interventions suggesting that we are in breach of that framework and the licensing criteria, as they now exist for category 2 services.

11520 What Passion is urging you to do, however, is to change your category 2 policy framework. They are arguing for protections that were specifically omitted from the category 2 framework and have been imposed on no other category 2 licence holder.

11521 Moreover, having filed and obtained a category 2 licence, Passion, in effect, seeks some of the benefits of a category 1 licence, in particular some kind of protection in the genre, with none of the same obligations. They are arguing that it is okay for other broadcasters -- Global, Alliance Atlantis, Boxer Four, Kaleidoscope, Showcase and TEN -- to have category 2 licences that are directly competitive with their service, but that CHUM should not.

11522 I guess there can be only one reason for that; that is, they see CHUM as a strong competitor.

11523 Thus, in our view, the opposition of Passion, rather than indicating that there is some flaw with your framework, is proof positive that it is working as you intended -- vigorous competition between category 2s and perspective category 2s for interest from distributors.

11524 By allowing CHUM, which is in complete compliance with the category 2 licensing framework, to have this opportunity for additional licences in the relationship genre, you are providing distributors, and ultimately consumers, with greater choice in services in the relationship/sexuality genre.

11525 Surely it is neither fair nor reasonable for the Commission now to be asked to introduce new barriers to licensing new category 2 services, particularly as it comes at the same time as the Commission is considering the addition of a number of foreign services to the eligible lists.

11526 To accede to Passion's request to delay or deny CHUM's applications would be to provide Passion with a competitive advantage proffered no other category 2 licensee and, we believe, would mean abandoning your framework before it has really got off the ground.

11527 In conclusion, we believe that Passion has raised no issues in their intervention today that suggest CHUM's applications are not in complete conformity with the Commission's licensing framework for category 2 specialty services. Rather, Passion seeks to change those very criteria. In essence, they are saying: "Please change your policy so we don't have to compete with CHUM."

11528 It is important to note that distributors have yet to make final decisions about rates and packaging for category 1 services, let alone carriage decisions for category 2 services. This has had nothing to do with CHUM's applications. In fact, some distributors are still thinking about launching category 2 services at a later date. What distributors are looking for are strong services, with strong brands, programming, cross-promotional opportunities, and, in particular, they are interested in operators who have a track record of offering high quality, viable services. This is obviously what CHUM can offer.

11529 All we are asking you today is that you adhere to your policy and give us an opportunity to launch what we believe could be a very attractive service to both distributors and consumers.

11530 Thanks very much, and I would be happy to answer any questions you may have.

11531 THE CHAIRPERSON: Thank you, Mr. Miller. I don't think we have any questions. We simply wanted to provide the intervenor with an opportunity to state their comments for the record, and you to have an opportunity to reply. I thank you very much.

11532 Mr. Secretary, I believe those are all of the appearing items for this proceeding.

11533 MR. CUSSONS: They are, Mr. Chairman.

11534 I would like to point out that there are a number of non-appearing applications that were gazetted for this hearing, and decisions will be rendered on them in due course.

11535 THE CHAIRPERSON: Thank you, Mr. Secretary.

11536 This, then, concludes the hearing. It has been an interesting seven days. At the outset I indicated that it certainly was an important proceeding -- licence renewals for our two largest national broadcast groups -- and I indicated that there were a number of issues that we wanted to cover off: priority programming, regional reflection, local reflection, cultural diversity, service to the hearing and visually impaired, vertical integration, and cross-media ownership.

11537 It was noted by one of the intervenors that one of the issues that probably was noticed mostly by the newspapers in reporting on the hearing was the issue of cross-media ownership. But I think we canvassed all of the issues quite thoroughly, and I want to thank the parties and all of the intervenors for helping us to better understand the issues that were brought before us. I certainly got a sense -- and I am speaking on behalf of myself, my colleagues and the staff -- to use a phrase that was mentioned early in the proceeding, that the yardsticks were moved on a number of issues, both those that directly related to the hearing over the past week and a bit and some perhaps indirectly. I am thinking of CF and CKVU and related issues like that, which have been hanging on for some time.

11538 There is one other franchise that is up for sale. One would hope that would be dealt with shortly, as well.

11539 But I think a lot of those issues were dealt with over the last while, and we are grateful for that, and we thank the parties for their successful discussions.

11540 Again, I think we had an excellent discussion of the issues. I guess from time to time, by the nature of the questions, as I indicated yesterday, people will get a sense of a particular bent by the Commission, but our job is to try to flesh out the issues as much as we can, and then to take all of the written material that we have in the applications and the interventions and the replies, plus the transcript and the questioning, and go away and try to decide what the best decision is in the public interest. So while people may think they know what we are going to decide based on the questioning, I would caution you on jumping to any conclusions in that respect.

11541 I think it has been a great hearing. I think we have certainly gained a much better understanding of the plans of both broadcast groups, and that discussion will be very helpful for us in reaching a decision on the licensing framework for the next number of years. So we thank you for that.

11542 I want to thank all of those who helped, who participated and who contributed to the process.

11543 I should acknowledge, also, the non-appearing written intervenors, many of whom have commented on the issues and/or supported the applications involved.

11544 I want to thank the folks from CPAC for letting our families on both sides of the table here know what we do when we are off working away. I thank them for the long hours they have put in, as well as the technicians at the back. I must say, the exercise that we did earlier this week in using the teleconference was our first experience in using it that extensively. We have had intervenors by teleconference before. And while we had a few glitches getting it going, I think it worked extremely well, and it is certainly something we will be using again, to try to make it more efficient and effective for people who can't afford or, for whatever reason, can't be present in the room to be able to participate in our proceedings.

11545 I want to thank you all. I think it has been a great hearing.

11546 I will declare our hearing closed.

--- Whereupon the hearing concluded at 1700 / L'audience est levée à 1700