ARCHIVED -  Transcript / Transcription - 10 September/septembre 2004 - Gatineau, Quebec

VARIOUS BROADCASTING APPLICATIONS/

PLUSIEURS DEMANDES EN RADIODIFFUSION

NPH/AAP2004-5

CHUM Limited and Craig Media Inc.

HELD AT: TENUE À:

Conference Centre Centre de conférences

Outaouais Room Salle Outaouais

Portage IV Portage IV

140 Promenade du Portage 140, promenade du Portage

Gatineau, Quebec Gatineau (Québec)

September 10, 2004 Le 10 septembre 2004

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:

Charles Dalfen Chairperson of the CRTC /

Le président du CRTC

Andrée Wylie Vice-chairperson /

Vice-présidente

David Colville Vice-chairperson /

Vice-présidente

Andrée Noël Commissioner / Conseillère

Ronald Williams Commissioner / Conseillère

ALSO PRESENT / AUSSI PRÉSENTS:

Pierre Lebel Secretary / Secrétaire

Robert Murdock Legal Counsel / Conseiller

William Howard juridiques

Robert Ramsay Hearing Manager /

Gérant de l'audience

HELD AT: TENUE À:

Conference Centre Centre de conférences

Outaouais Room Salle Outaouais

Portage IV Portage IV

140 Promenade du Portage 140, promenade du Portage

Gatineau, Quebec Gatineau (Québec)

September 10, 2004 Le 10 septembre 2004

PAGE / PARA

PHASE II

INTERVENTION BY / INTERVENTION PAR:

Alberta Motion Picture Industries Association 128 / 665

Manitoba Motion Picture Industry Association

Meeches Video Production Inc.

Global Television Network 151 / 781

Directors Guild of Canada 159 / 819

Writers Guild of Canada

Canadian Film and Television

Production Association 182 / 958

Alliance of Canadian Cinema, Television

and Radio Artists 200 / 1088

Communications, Energy and Paperworkers

Union of Canada 220 / 1196

Canadian Diversity Producers Association 227 / 1236

PHASE III

REPLY BY / RÉPLIQUE PAR:

CHUM Limited on behalf of Craig Media Inc. 240 / 1312

Gatineau, Quebec / Gatineau (Québec)

--- Upon resuming on Friday, September 10, 2004

at 0937 / L'audience reprend le vendredi

10 septembre 2004 à 0937

659 LE PRÉSIDENT : Bonjour, tout le monde. Good morning, everyone. Order please.

660 We will begin with the next phase of the hearing.

661 The Secretary is distributing opening statements and we will take the mike in a moment.

662 THE SECRETARY: Thank you, Mr. Chairman.

663 The first appearing intervenor is Mr. Norman Spector and I have not seen Mr. Spector yet this morning, so we shall call him later on in the order.

664 We will hear now as a panel intervenors number 2, 5 and 11 in the agenda, the Alberta Motion Picture Industries Association, the Manitoba Motion Picture Industry Association and the Meeches Video Production Incorporated.

INTERVENTION

665 MR. BROOKS: Good morning, Mr. Chairman, Vice-Chair Wylie, Vice-Chair Colville, Commissioners. Thank you very much for the opportunity to speak with you this morning.

666 My name is Alan Brooks. I am the Executive Director of the Alberta Motion Picture Industries Association, also known as AMPIA.

667 With me today is Mr. Nic Wry, a past President of AMPIA, the current Chairperson of our Broadcast Committee and one of Alberta's most innovative independent producers.

668 This year, AMPIA celebrated its thirtieth anniversary proudly representing independent producers in all aspects of the film and television production community in Alberta. AMPIA currently has a total of 275 member companies, representing a cross-section of more than 3,000 industry professionals throughout Alberta.

669 We are pleased to be here today in support of CHUM's application to acquire the assets of Craig Media. As we noted in our written intervention, over the years, AMPIA has had a very positive relationship with CHUM and we would like to state for the record that this intervention was formulated without conflict of interest of any party.

670 MR. WRY: AMPIA would like to publicly acknowledge CHUM's promise to fulfil the commitments of the A-Channel funds, both the original A-Channel Fund as well as the subsequent $10 million Fund that was tied to the licensing of Toronto One.

671 As the Commission is aware, there has been a serious erosion of development and production dollars available to Alberta producers. It would be devastating for our production community if we had lost these commitments.

672 From our conversations with CHUM regarding the original A-Channel Alberta Fund, it is our understanding that if any of the committed projects fail to move forward to production, CHUM will expend the remaining $3.8 million on other Alberta projects until all the funding has been spent.

673 In terms of A-Channel's subsequent $10 million Fund, AMPIA notes that expenditures were to begin in 2004 and continue to the ensuing four broadcast years with a minimum of 15 per cent committed annually.

674 We respectfully recommend that CHUM's commitment to this continuation of these funds be made available and be a condition of this new licence.

675 MR. BROOKS: AMPIA also welcomes CHUM's new additional $10 million for funding of priority programming. However, we do have some concerns.

676 We struggled with the terms primarily and predominantly, which was confirmed yesterday as 50 per cent. While we understand CHUM's goal for flexibility, if we accept their proposal that 75 per cent would be allocated to independent production and spread that amount over seven years, with only 50 per cent dedicated to Alberta and Manitoba, the actual funding that will be available to the producers of Alberta and Manitoba will be quite small: according to our calculations, not enough funding to license even one CTF-supported movie per year.

677 Given that the proceeds for this new $10 million commitment will be derived primarily from advertising revenues generated from the business operations in the provinces of Alberta and Manitoba, it is AMPIA's recommendation that the following four points be made a condition of this new licence:

678 - that 100 per cent of the $10-million commitment be allocated to independent production rather than 75 per cent suggested by CHUM;

679 - that all of this new funding be designated for Alberta and Manitoba producers exclusively;

680 - that this $10-million commitment be in the form of licence fees;

- and that CHUM be required to commit a minimum of 12 per cent annually until all the promised funding has been spent.

681 AMPIA is also pleased that CHUM recognizes the importance of script development. In addition to the million dollars in script development from the A-Channel Fund, CHUM is committing an additional million dollars in script development. It speaks highly of CHUM's commitment to Canadian programming.

682 It is crucial that our writers and producers have the opportunity to tell Canadian stories but we respectfully request again that these much-needed development dollars be dedicated to script writers and producers in Alberta and Manitoba exclusively.

683 MR. WRY: AMPIA strongly supports CHUM's promise of an establishment of a Prairie development officer with a senior development executive. The A-Channel made a unique and significant contribution to the Alberta production community by having a senior executive who travelled throughout the province to meet with our members, providing valuable advice, direction and support.

684 At one time, Alberta also had senior development officers at CFRN and Alarcom in Edmonton. As this has been an important benefit to our membership, we are recommending that CHUM maintain a development office in Alberta with a senior executive with the decision-making abilities and that this be made a condition of licence.

685 AMPIA would also like to thank CHUM publicly for their initiative to create a $500,000 revolving financial plan, as outlined in their supplementary brief. This funding was especially appreciated by our smaller producers who must survive a myriad of financing challenges.

686 MR. BROOKS: Our association is also pleased to support CHUM's proposed new allocation of $2.6 million for the production of a cross-cultural prime-time program series tentatively entitled "Caravan!" Alberta and Manitoba have a very proud cultural history and it is encouraging to see CHUM embrace our colourful heritage.

687 We do believe, however, that our local independent production community is in the best position to provide compelling programming for this series and we would ask that the Commission explore with CHUM the possibility that this series be produced or co-produced with the independent producers in Alberta and Manitoba. We believe it would be a unique opportunity for a strategic partnership between CHUM and the independent production community.

688 And in the interest of monitoring these benefits to the independent production community, AMPIA also recommends that CHUM be required to place on the public file a yearly update on the activities associated with these benefits, specifically a list of the individual projects along with an annual summary of the total amounts allocated overall for development, licence fees and acquisitions as well as a breakdown between in-house and independent production.

689 Our association is very much looking forward to CHUM's entry into Alberta. We believe our members and our province's viewing public will benefit greatly from this transfer of ownership.

690 Thank you for giving us this opportunity to appear before you to express our views.

691 THE CHAIRPERSON: Thank you very much.

692 Commissioner Williams.

693 COMMISSIONER WILLIAMS: How important is it that these commitments be made a condition of licence to AMPIA and why have you taken that approach?

694 MR. WRY: Well, we found in the past number of years that broadcasters have said to us, of course, we have to meet our conditions of licence but things that are suggested or proposed, they feel, are not things they necessarily have to do to be within their conditions of licence and we felt that it is quite important to put into the licence as many things as we can to ensure that those things will be things they take more seriously.

695 COMMISSIONER WILLIAMS: Okay. Thank you.

696 I have no further questions, Mr. Chair.

697 THE CHAIRPERSON: Thank you very much.

698 Mr. Secretary.

699 THE SECRETARY: Mrs. Brandt, you can go ahead now.

700 MS BRANDT: Thank you, commissioners for permitting the Manitoba Motion Picture Industry Association to appear before the Commission in this intervention.

701 And, thank you to CHUM, in particular, to Ric Davies, Director of Special Projects, who travelled to Winnipeg to meet with the Manitoba community; and to Peter Miller, Vice-President of Planning and Regulatory Affairs, who discussed our Manitoba concerns on conference calls and in meetings in Banff and in Toronto.

702 We appreciate that CHUM's application includes a $25,000 support to MMPIA's Blizzard Awards.

703 Many Manitoba independent producers have received support from CHUM in the past and our MMPIA members look forward to further developing this positive relationship.

704 I am the Executive Director of the Manitoba Motion Picture Industry Association. My name is Caryl Brandt and this is a producer-member of the MMPIA Board, Lisa Meeches.

705 The Manitoba Motion Picture Industry Association represents the indigenous production community. MMPIA has 350 members -- from production companies to labour groups, from performers to educators, from organizations to students -- totalling 1,400 individuals.

706 The MMPIA intervention is endorsed by its membership and was echoed in more than a dozen individual member interventions, as well as that of the Manitoba Film & Sound intervention. Manitoba Film & Sound is the provincial funding agency and film commission. Together, MMPIA and Manitoba Film and Sound foster growth of the Manitoba film and television business.

707 We developed our interventions cooperatively and Manitoba Film & Sound endorses this presentation.

708 MS LISA MEECHES: This is the important acquisition of our only home-grown Manitoba broadcasting company of this size with $25M in Manitoba assets.

709 This deal forms the third largest national broadcaster in Canada.

710 And, this acquisition of a Manitoba asset creates a rare opportunity for direct Manitoba benefits. Historically, acquisitions have generated support that often excluded or only minimally and briefly benefited Manitoba.

711 For example, BCE initially applied to 'west of Manitoba'; Moffat lasted only a brief time; the Alberta A-Channel fund originally excluded Manitobans, except as co-producers; and WTN, headquartered in Winnipeg, moved with the CORUS take-over.

712 Manitoba looks forward to direct benefits for its production community based on the precedents of regional support generated by previous acquisitions.

713 We appreciate the CHUM corporate vision. Manitoba welcomes CHUM's commitment to distinct local, diverse, quality programming. CHUM's philosophy will continue the 'rooted' style of our home-grown Craig stations.

714 MMPIA strongly supports the CHUM application, but with some reservations.

715 MMPIA strongly supports the $10.5M in priority programming, including the licence fees, and script and concept development, and bridge financing; the eight additional hours of priority programming; the Lethbridge and Red Deer news bureau commitments; and the Caravan! cross cultural series -- but with independent, not in-house, production.

716 MMPIA particularly supports that CHUM continue the Craig innovative commitment to Aboriginal programming in prime time.

717 And, MMPIA shares the concerns stated by the Alberta Motion Picture Industry Association, notably with the definition of "predominant" support being 50 per cent -- split between Manitoba and Alberta, where the assets reside.

718 CRTC policy states:

"The Commission generally expects significant benefits to be offered to the community in question and that the benefits proposed in the application are commensurate with the size and nature of the transaction." (As read)

719 In this application, the benefits of Manitoba are not clear, direct, tangible and equivocal, and the benefits do not reflect the size and nature of the Manitoba assets in the acquisition. Manitoba does not gain on-screen benefits. Unlike Alberta, Manitoba local programming and services to Manitoba stations are not improved, and Manitoba accrues clearly and directly only 2 per cent of local cultural and social benefits.

720 MS BRANDT: CHUM has answered our concerns about calculated Manitoba benefits. The CHUM calculation of a 16 per cent benefit to Manitoba includes endeavours that are, although worthy, not directly and unequivocally beneficial for Manitoba.

721 CHUM has designated some support Manitoban by geography. For example, the National Screen Institute and the Women in Media Foundation are both based in Winnipeg but each has a cross-Canada focus. Their mandate and their support from CHUM is not directed to Manitoba.

722 CHUM has defined some support Manitoban by program target. For example, Innoversity will funnel money to Manitobans to attend its summit and the CWC will use its funds to conduct professional development in Winnipeg and the CFTPA will create youth mentorships for Manitobans, all worthwhile but indirect support given to others to give back to us.

723 By contrast, the proposal for CHUM support in Alberta is clearly and directly beneficial to Albertans, for example, the $250,000 to the Calgary International Film Festival, the $105,000 to the Edmonton International Film Festival and the $50,000 to the Alberta Motion Picture Industries Association.

724 Using Alberta as a precedent, the direct benefits to Manitoba total only 2 per cent based on $16,000 to Manitoba education grants, $10,000 to the Manitoba Association for Media Literacy, the $25,000 already mentioned to MMPIA, and $5,000 or one-tenth average per province of the $50,000 to the National Screen Institute.

725 The lack of direct Manitoba benefits is, we believe, evidence of CHUM's unfamiliarity with the Manitoba production community. The Manitoba industry has grown from one million in the eighties to 85.5 million in 2003 and this is because of the commitment of the local production community, professional development for crew and above the line from Film Training Manitoba and the strategies and support of MMPIA and Manitoba Film and Sound.

726 Manitoba wants to work with CHUM to ensure that Manitoba contributes more local, distinctive, reflective, quality programming.

727 MS MEECHES: At this time, we would like to request conditions of licensing.

728 MMPIA requests a condition of licence and we ask for a resident senior development officer in Manitoba. AMPIA's intervention noted the positive effect on Alberta of the active involvement of a senior A-Channel officer. Manitoba believes familiarity and immersion in the local community is critical to access visibility and the ability for the Manitoba production community to contribute to CHUM programming.

729 MMPIA requests a condition of licence that development licence fees are 100 per cent for independent Manitoba and Alberta producers. MMPIA strongly believes that the production sector where the assets reside should benefit. In other words, 50 per cent for Manitoba and Alberta is not commensurate with the size and nature of the transaction.

730 MMPIA requests a condition of licence that regional hours are designated within the eight hours of priority programming.

731 MMPIA also requests a condition of licence, an increase in non-news local programming by Manitoba stations.

732 MMPIA requests a condition of licence that "Caravan!" be produced independently by Manitoba and Alberta production sector, not in-house.

733 MS BRANDT: And also as a condition of licence, we respectfully request that CHUM significantly enhance the direct and tangible benefits to Manitoba.

734 MMPIA has put forward two proposals that would ensure CHUM's familiarity with the Manitoba talent and that would develop quality Manitoba productions.

735 One is the Industry Marketing Awareness and Profile Campaign that would enhance access and visibility to decision-makers to enable Manitobans to contribute quality programming. The funds would be used for such things as promotional tools, enhancing industry events and offering networking opportunities in and out of the province.

736 The second is an Industry Growth and Development Initiative that would enable the development of significant quality Manitoba programming through industry review and planning with other resident and external organizations, including Film Training Manitoba, the National Screen Institute and Manitoba Film and Sound, and includes Industry Outreach and Distant Education.

737 I think it should be noted that as part of industry research and development in Manitoba, we released two major studies this spring, an economic impact analysis and a training needs assessment of the Manitoba industry. It is this kind of consultation and clear definition of what we need that we would like to work with CHUM to make sure the benefits have the results that everyone says they want.

738 Thank you for the time to present Manitoba's concerns to the Commission and thank you, CHUM, for their consideration.

739 THE CHAIRPERSON: Thank you.

740 Commissioner Williams.

741 COMMISSIONER WILLIAMS: Thank you for your very comprehensive and thorough presentation. Your presentation is on file. I have no questions for you.

742 Thank you.

743 THE CHAIRPERSON: Thank you very much, ladies and gentlemen.

744 You can step down.

745 THE SECRETARY: You can go ahead now, Ms Meeches.

746 MS MEECHES: Okay, thank you.

747 Good morning, Mr. Chair, Vice-Chairperson Wylie, Vice-Chairperson Colville and Commissioners.

748 My name is Lisa Meeches and I am the Executive Producer of Meeches Video Production Inc. and Eagle Vision Inc. based out of Winnipeg, Manitoba.

749 At this time, I would like to thank Sarah Crawford of CHUM for calling me after the announcement and meeting with me in Banff to talk about the importance of "Sharing Circle" and what it means to CHUM, as well as Mr. Jay Switzer for calling me days after the announcement and acknowledging what the "Sharing Circle" would mean to them as well.

750 As we speak today, the "Sharing Circle" television series is well under way with the production on its 13th television season. This year, we will explore topics such as the sacredness behind the Madawon (ph) ceremonies, with invitation by Elder and Ojibway Sundance Chief Lawrence Henry. This ceremony is the oldest-known ceremony in Canada and teaches a way of life which was almost extinct.

751 In season 12, Mohawk Elder William Commanda, Keeper of the Wampum Belts, invited us to share the story and meaning behind the wampum teachings of the Mohawk people.

752 In season 11, the late Rufus Goodstriker (ph), an Elder and spiritualist from the Blackfoot Nation on the Blood Reserve shared with our crew the history behind the Horn Society, which is part of the clan system of the Blackfoot in southern Alberta.

753 These invitations are made to the show to bring our cameras into the most sacred of ceremonies, places where recording devices of any kind have never been permitted. The elders and the people clearly trust us.

754 In the first couple of seasons of the "Sharing Circle," it was difficult even for myself to get Aboriginal people on camera to be interviewed. Today, we are the only show invited into the ceremonies and many times into the communities. Aboriginal people have been afraid to trust TV and film crews for the fear of having our stories disrespected.

755 Today in many communities, the people now feast in honour of my crews and there isn't enough air time to tell their stories. The elders are finally ready to share and it has taken the "Sharing Circle" many seasons to gain the respect of First Nations people across the country.

756 We have created a television series that not only enlightens and entertains Canadians but also retains a way of life that was once banned in our beautiful country and I am very proud to say we have done this without compromising the spiritual elements of Canada's First People.

757 In the past twelve years, I have been given the greatest gift, to produce a television show in prime time on a conventional station promoting the beauty of Aboriginal culture and have been given full editorial control.

758 We have done all of this while meeting the broadcaster's technical requirements, close caption and delivered video described. We have delivered over 320 shows, never missing a deadline. We have created spinoff series which are in development with both APTN and other digital broadcasters and are now in production of season two of "Teepee Tales," a successful children series for Corus.

759 The responsibility that I have been given with Craig, and now Corus, has obviously encouraged me to take bigger risks as a filmmaker and producer. As a businesswoman, I recently created a five-year business plan and purchased camera and edit equipment and now service my own shows. This endeavour has allowed me to commit to spending resources and time training First Nations people in all areas of production.

760 In the past twelve years, "Sharing Circle" has been providing cross-cultural training on all of the Craig stations. We have provided all-day seminars on "Everything you ever wanted to learn about First Nations people and were afraid to ask." In these sessions, we include all departments from news, sales to technical. Aboriginal leaders and spiritualists share their wisdom and have an opportunity to talk and learn a little bit more about our industry.

761 As one of Canada's leading First Nations producers with a strong interest in the continued growth in prime-time Aboriginal programming, I strongly support CHUM's corporate vision and philosophy that broadcasters should promote the unique, local and diverse regions of Canada with high-quality programming.

762 It is integral and must be understood that the current Craig licences recognize the "Sharing Circle" as a series that reflects Aboriginal communities as distinct nations. The show is a metaphor for what Canadian programming should look like and has set a precedent for prime-time programming.

763 I also support the benefits package outlined in the Aboriginal initiatives. A clear commitment needs to be made to continue the legacy that Craig was honoured to champion. That legacy is the "Sharing Circle." The "Sharing Circle" has always been a priority for Craig and should be made a priority by CHUM. A way to ensure this is to make "Sharing Circle" a condition of licence.

764 The "Sharing Circle" is the only prime-time television series in Canada that is produced, directed and owned by an Aboriginal company. Meeches Video Production Inc. is dedicated to training both Aboriginal and non-Aboriginal people and over the past thirteen years have been successful in this important venture. We have helped to upgrade the skills of many Aboriginal people on our crews.

765 With the creation of the assimilation and civilization policies called the Indian Act, we have been so restricted as a people for nearly a hundred years. As a result, First Nations people have been playing catch-up in every industry in this country, and television and film is no different. But we can catch up.

766 One solution might be to create an incentive program for broadcasters to receive Canadian Aboriginal content points by airing shows in prime time that are produced and known by Aboriginals and introduce this as a condition of licence. Broadcasters can be very influential when helping to mould a strong core group of Aboriginal producers while creating unique programming for their schedules and at the same time lending a helping hand to the APTN by creating stellar programming through shared licences.

767 We are dedicated to educating all Canadians on aboriginal culture, traditions and issues. It is through education that Canadians will acquire the knowledge, understanding and respect that leads to racial harmony.

768 When aboriginal people walk tall and walk proud, so do all Canadians.

--- Native language spoken

769 Thank you for giving me this opportunity to appear and share. I would be pleased to answer any questions at this time.

770 THE CHAIRPERSON: Thank you very much, Ms Meeches.

771 Commissioner Noël.

772 COMMISSIONER NOËL: Bonjour. I don't have many questions because your presentation was very, very clear, however, I may have a remark to make. I have heard the two previous intervenors and part of the second.

773 You are requesting conditions of licence to be imposed on CHUM. That is the general feeling I get from all three presentations. However, in a share transfer, as what we have in front of us, we do not change conditions of licence. The conditions stay attached as they are to the acquired company. So it is difficult for us to take the approach of changing conditions of licence. I just wanted to make that clear to you.

774 Being from the other end of the country and not having the privilege of seeing on my screen either CHUM or Craig, I have never seen your show but I'm sure it is very interesting. They way you described it, it looks very interesting and I wish you a lot of luck in negotiating with the acquirers if we approve the transaction. But, as I say, unfortunately, given the type of transaction we cannot modify conditions of licence.

775 MS MEECHES: I understand.

776 COMMISSIONER NOËL: Thank you very much.

777 MS MEECHES: Okay. Thank you.

778 THE CHAIRPERSON: Thank you very much, Ms Meeches.

779 Mr. Secretary.

780 THE SECRETARY: Thank you, Mr. Chairman. We will now hear Global Television Network.

INTERVENTION

781 MS BELL: Good morning, Chairman Dalfen, Commissioners, Mesdames les Conseillères, Commission staff. For the record, my name is Charlotte Bell. I am Vice-President of Regulatory Affairs for Global Television Network.

782 With me today, starting at my immediate left, is Jack Tomik, President of CanWest Media Sales. Next to Jack is Kathy Gardner, Vice-President of Integrated Media Research, CanWest Media Sales. To my right is Doug Hoover, Senior Vice-President programming and specialty services for Global Television Network.

783 First and foremost, we would like to thank the Commission for the opportunity to appear before you today in order to discuss an important issue for Global that relates to this transaction.

784 Let me begin by saying that it was not our intention to intervene in this proceeding. CanWest has always and continues to support the creation of strong Canadian media companies. As stated in our written intervention, we do not oppose this transaction and our position has not changed.

785 However, in reviewing the application filed by CHUM, as well as supporting economic research prepared by CMI, we noted that certain issues that have a direct impact on Global were raised by the applicants and in supporting research appended to the application. Our concerns were not alleviated in the applicant's response to our intervention or discussed during the first phase of this hearing and it is for this reason that we are here today.

786 As the Commission knows, we filed a detailed written intervention that focused on a number of issues. Today we remain concerned about the following issue: CHUM's ability to compete for top rated foreign programming as a result of this transaction. In particular, we are concerned with the comments they made concerning a voluntary code of conduct we agreed to regarding the airing of certain programs on our CH stations in the context of the WIC transaction four years ago.

787 MS GARDNER: The economic research prepared by CMI calls for the continuation of a voluntary commitment made by Global in the context of the WIC transaction. At the time, Global commitment to refrain from broadcasting on its CH stations in B.C. and Ontario any non-Canadian feature films or syndicated weekly series programming, as well as non-Canadian programs that are broadcast on UPN or other so-called mini nets in the U.S.

788 Commissioners, we voluntarily agreed to those safeguards in spring 2000 an considered them to be reasonable given the market conditions that prevailed at the time. CHUM and Craig were both small, regional conventional broadcasters and CHUM only operated conventional stations in Ontario.

789 As we explained in detail in our written intervention, the market conditions that existed at the time of the WIC transaction have drastically changed in the last four years.

790 To put things in perspective, the gap between CHUM and Global's market share at the time of the WIC transaction was 18.5 per cent. As a result of CHUM's growth over the past four years and this transaction, that 18.5 per cent gap has now shrunk to 7.6 per cent.

791 From a viewing standpoint, and according to 2003 BBM data, Global's share of viewing is now estimated at 12.7 per cent and CHUM is estimated at 9.4 per cent. When we add the Craig assets, CHUM grows to 10.4 per cent, a mere 2.3 per cent difference with Global.

792 It is also important to note that these estimates assume that CHUM will not increase its revenue base or alter its program buying strategies as a result of this transaction. However, if CHUM chooses to increase its spending patterns in the next two to three years, a logical next business step, they could easily achieve similar audiences and revenues as Global and CTV.

793 In the past four years CHUM has expanded into B.C. with two outlet in that market. As a result of this transaction they will reach 85 per cent of English Canadians and will be present in every key advertising market in this country without incurring the costs of subsidising smaller market stations across Canada.

794 MR. HOOVER: Commissioners, while CHUM claims that it has no plans to alter its foreign program buying strategy, the simple fact is that they can. Even before this transaction, CHUM already began to bid for top rates shows from the four major U.S. networks, "The Bachelor", "Joe Millionaire" and "Temptation Island" are prime examples.

795 It is our belief that as they grow into a quasi-national network, they will naturally seek out more top rated shows and will not maintain the status quo in terms of their foreign program purchasing.

796 It is also important to note that the foreign program distributors structure acquisition deals in such a way that when Canadian broadcasters acquire top shows airing on the major U.S. networks, those programs are packaged with a number of other shows, including many programs from the mini networks. In other words, we have no choice but to acquire programs that air on the mini networks.

797 As a result, Global is at a clear competitive disadvantage in terms of how it could make use of the program rights it acquires. Meanwhile, CHUM has the ability to buy programming from any and all sources without any restriction as to where it airs those programs.

798 CHUM already has relationships with all the key program suppliers. When you link the purchasing power of their conventional assets with their specialty services, you combine that with their potential reach in all the key advertising markets, it makes CHUM a formidable program buyer.

799 CHUM is simply no longer a small or mid-sized player that needs protection.

800 MR. TOMIK: Good morning, Commissioners.

801 CHUM has stated that the Montreal market, Saskatchewan and the Maritimes are necessary for them to become national players. Let us be clear, we operate stations in each of those markets, or should I say we subsidize stations in each of those markets.

802 For the record, Montreal represents 3.9 per cent of our revenues, hardly the engine that drives our national buying power for programming. Long before Global was present in Montreal, we were acquiring national rights for top U.S. programming, and we did it successfully. The result, massive audiences and significant advertising revenues. We are living proof that this can be done.

803 In our view, the question is not if CHUM will do it, the question is when.

804 So today we are not asking for you to tie their hands and prevent them from competing for programming from major U.S. suppliers. That would be anti-competitive. At the same time, we do not believe that the restrictions placed on our CH stations in the context of the WIC transaction are still relevant today. They are not. In the context of new market reality, those restrictions are now in fact anti-competitive.

805 This is not an issue we planned to raise at this hearing. We intended to raise this with the Commission following the approval of this transaction in the appropriate forum. However, the issue was raised, not by us but by the applicant. We thought we had no choice but to be here today and respond at this proceeding.

806 Thank you.

807 MS BELL: Commissioners, if you have any questions, we are prepared to answer them.

808 CHAIRPERSON: I guess I am a little perplexed by your intervention, having read the written intervention.

809 You raise a point about Global's commitments and COLs and I have just heard Mr. Tomik as to why you felt compelled to be here, but this isn't really the appropriate forum for that request.

810 Secondly, you raise the issue of local advertising in Red Deer and Lethbridge, and again, as Commissioner Noël explained, this isn't a hearing in which COLs are imposed on individual licensees. And then you support CHUM's position on Category 2 benefits.

811 Is that a fair summary of your intervention in this proceeding?

812 MS BELL: Yes, it is.

813 THE CHAIRPERSON: Thank you.

814 THE SECRETARY: Thank you, Mr. Chairman.

815 We will now hear the Canadian Diversity Producers Association, Mr. Amos Adetyi and Mr. Paul DeSilva.

--- Pause

816 THE SECRETARY: Mr. Chairman, not seeing anybody standing up, I will now call the Documentary Organisation of Canada, Mr. Bart Simpson.

--- Pause

817 THE SECRETARY: Again, not seeing anybody, I will call now on the Directors Guild and the Writers Guild of Canada.

--- Pause

818 THE SECRETARY: Good morning. You have 10 minutes each to make your presentation. I mean "each", by Directors Guild and Writers Guild.

INTERVENTION

819 MS PARKER: Thank you.

820 Good morning, Mr. Chairman, Members of the Panel, Commission staff, ladies and gentlemen. My name is Maureen Parker and I am the Executive Director of the Writers Guild of Canada. On my right is Rebecca Schechter, President of the Guild.

821 The Writers Guild of Canada, the WGC, is a national association representing more than 1,900 screenwriters working in film, television, radio and multimedia production in Canada.

822 MS BRAND: Thank you, Maureen. Good morning. My name is Pamela Brand. I am the National Executive Director of the Directors Guild of Canada. With me today, on my left, is Alan Goluboff, President of the Directors Guild.

823 The Directors Guild is a national label organization. We represent over 3,800 key creative and logistical personnel in the film and television industry. Both guilds actively promote the continued growth of a healthy Canadian film and television industry at both the policy and professional levels.

824 CHUM has applied for the authority to take effective control of Craig Media. If the proposed transaction is approved by the Commission, CHUM will become one of the largest multi-station ownership groups as defined by the Commission's 1999 Television Policy. With this new enhanced status come additional responsibilities, obligations and regulatory requirements that are summarized in our written intervention.

825 We are not opposed to this transaction, as stated in both our written intervention and at our meeting with CHUM on September 1st concerning their application. However, we believe that CHUM's tangible benefits package as presently defined is weak and that the application is therefore incomplete.

826 As we will explain in this presentation, the broadcast of Canadian television drama has seriously declined since the year 2000 and the CHUM-Craig transaction provides an excellent opportunity to alter the strength.

827 In Public Notice CRTC 1999-97 the Commission restated its policy with respect to television ownership transfers and said that the onus is on the applicant to demonstrate that the benefits proposed in the application are commensurate with the size and nature of the transaction. An applicant is also expected to propose a specific package of significant and unequivocal benefits that will yield measurable improvements to the communities served by the broadcasting undertaking and to the Canadian broadcasting system.

828 In light of comparable transactions involving Canadian conventional television stations and the Commission's own priorities in regard to original Canadian drama and long form documentaries, we feel that the tangible benefits package proposed by CHUM is not commensurate with the size and nature of the transaction as Commission policy requires.

829 From a single standalone television station in Toronto, CHUM has been gradually building up its television assets over the last 20 years and will become a national player and larger multi-station group if this transaction is approved. However, in its reply to intervenors on August 24th, CHUM reduced its proposed benefits package from 10.4 per cent to 10 per cent of the value it describes to the transaction for benefits purposes.

830 Considering the size and nature of the transaction, this minimum is not enough. We believe that an increase in CHUM's proposed benefits package should be a condition for the approval of the CHUM application.

831 In light of the Commission's views on Canadian drama, not only do we believe that CHUM's existing $11.5 million in commitments for priority program should focus exclusively on independently produced 10 point original Canadian drama, but we also believe that any additional benefits should relate exclusively to independently produced 10 point original Canadian drama or long form documentary.

832 Our presentation today will address the following issues related to the CHUM benefits package: the value of the transaction for benefits purposes; the magnitude of CHUM's proposed tangible benefits; CHUM's proposed priority programming; the importance of Canadian drama; the DGC/WGC's proposal for the tangible benefits package; and the monitoring of CHUM's priority programming.

833 In its application CHUM imputed a value of $64 million to Toronto One and excluded this amount from the ascribed value of Craig Media.

834 Given that the market value of Toronto One is now known and that TVA and Sun Media will presumably come forward with a tangible benefits package in keeping with the $46 million sale price, we agree that this amount could be deducted from the value of the CHUM-Craig transaction for benefits purposes.

835 The appropriate value of this transaction for benefits purposes is therefore $219 million before final adjustments.

836 CHUM has also tried to argue that the value which is nominally assigned to the Category 2 digital specialty services, MTV2 and TV Land, a total of $9 million should be deducted from the value of the transaction for benefits purposes.

837 On this issue, CHUM is effectively proposing a major change in Commission policy without the full policy process. We agree with CHUM's statement in its reply to intervenors that this hearing is not the occasion to review fundamental policy issues. This also applies to the issue of excluding Category 2 digital specialty services from the calculation of the value of the transaction for benefits purposes.

838 The Commission's current television policy regarding ownership changes includes all television broadcasting services, conventional, pay, pay-per-view and specialty television undertakings, and the calculation of the value of the transaction for benefits purposes. This policy has served the Canadian broadcasting system well up to now and should not be modified without providing all interested parties the opportunity to comment on any contemplated change.

839 The appropriate value of the CHUM-Craig transaction for benefits purposes therefore remains $219 million before final adjustments.

840 Maureen.

841 MS PARKER: In its decision transferring control of CKVU-TV Vancouver to CHUM, Decision 2001-647, the Commission said that under its policy framework for Canadian television it expected a minimum tangible benefits package of 10 per cent of the transactions value. However, there are at least two occasions in which the Commission has endorsed benefit packages that exceeded this minimum.

842 In the transfer of control of CKVU-TV to CHUM the tangible benefits package was 11.8 per cent, and in the acquisition of parts of WIC by CanWest Global the Commission approved a tangible benefits package that amounted to more than 12 per cent.

843 If the CHUM application is approved, CHUM will become one of the three largest multi-station ownership groups in Canadian television. Considering the importance of this transaction for CHUM, and for the Canadian broadcasting system, we believe that the minimum level of 10 per cent of the ascribed value of the transaction that CHUM has proposed is inadequate. This generates a tangible benefits package of $21 million, which is not enough.

844 The DGC and the WGC believe that the value of the tangible benefits should be closer to 12 per cent of the value of the transaction, commensurate with the size and nature of this transaction. Before final adjustments, this would result in a total benefits package of $26.28 million, or $5.28 million more than the proposed CHUM package.

845 Not only do we want the percentage increased from 10 to 12, we also differ strongly with CHUM concerning the nature of their spending. CHUM is proposing to spend their tangible benefits on more of what they have been doing since the beginning. The DGC and the WGC recommend that CHUM stop looking through McLuhan's proverbial rearview mirror and address the needs of the Canadian broadcasting system now and in the future.

846 Of the $21 million in tangible benefits, CHUM proposes to spend a total of $11.5 million on priority programming, of which $5 million will be spent on Canadian drama.

847 There is no commitment to Canadian long form documentaries in the CHUM benefits package.

848 CHUM proposes to spend a total of $23.8 per cent of its total benefits package on Canadian drama. If we compare this to the benefits package BCE committed to when they acquired CTV, we find that BCE is spending 38.5 per cent on Canadian drama and long form documentary. This was in year 2000 when the state of our indigenous dramatic production sector was far better off than it is today. CHUM's drama commitments fall far below the BCE/CTV benchmark.

849 There is also a significant difference in terms of commitments to independent production. While CHUM proposes to spend a total of $8.25 million, or 39.3 per cent of its total benefits package on Canadian independent production, BCE is spending 57.8 per cent of its total benefits package on Canadian independent production.

850 In addition, we would like to refer you to three commitments made by BCE.

851 First, they ensured that all of its new priority programming would be incremental to the existing requirement of eight hours per week of priority programming that is broadcast on each of the CTV affiliated stations, in accordance with the TV Policy and with their conditions of licence.

852 Second, they ensured that none of this incremental programming will draw on existing production funds.

853 Third, they committed that any profits earned by its equity investments in or distribution of this priority programming will be allocated to the production of additional priority programming.

854 CHUM has made no comparable commitments up to now. In light of this, we believe that the CHUM benefits package as presented is inadequate.

855 In our view, the existing $11.5 million in commitments for priority programming should focus exclusively on independently produced 10 point original Canadian drama.

856 Finally, these new hours of drama should be incremental to the existing requirement of eight hours per week of priority programming that is broadcast on the CHUM stations in accordance with the Commission's Television Policy.

857 As the Commission stated earlier in Public Notice 1999-97 regarding its policy of eight hours of priority programming in peak viewing time for the larger multi-station groups:

"This requirement excludes any benefit commitment made in connection with the transfer of ownership or control." (As read)

858 To do otherwise would make it very difficult to monitor the truly incremental nature of CHUM's benefit package.

859 MS SCHECHTER: Good morning. We believe that CHUM's existing $11.5 million in commitments for priority programming is focused exclusively on independently produced 10 point original Canadian drama and that any additional benefits over CHUM's present commitment should be spent exclusively on independently produced 10 point original Canadian drama or long form documentaries.

860 Drama remains the most popular type of television programming in Canada and continues to dominate top 20 ratings. However, because Canadians have such difficulty finding indigenous drama on our conventional networks, they turn to imported U.S. simulcasts.

861 If we want to repatriate our audiences to indigenous Canadian programming, we must provide them with high quality shows, produced and aired with an active commitment to success from everybody involved, including the broadcasters. Canadians want and deserve more choice, and this must include the range of dramatic programming from high quality, big budget drama series to sitcoms to movies of the week.

862 CHUM has proposed to spend $11.5 million on new priority programming over seven years, of which $5 million would be spent on drama. In the world of television drama, this doesn't get you very much. $5 million amounts to a total of about $714,000 per year, assuming a production budget of $1 million per hour, and that the production is financed by the Canadian Television Fund, which is a very uncertain proposition these days; a licence fee of $240,000 would be required.

863 In these circumstances, CHUM's proposed benefits package would fund less than three hours of high quality dramatic programming over an entire year, or a total of 21 hours over seven years. Considering that the proposed transaction would transform CHUM into one of Canada's largest multi-station ownership groups with national reach, 21 hours of drama over seven years is a meagre benefits package as far as Canadian drama is concerned.

864 Canada's creative community expects more from one of our largest and most financially successful broadcasters.

865 Our proposal adds $5.28 million to the CHUM package and proposes significantly more spending on drama and long form documentaries. Instead of using its tangible benefits package to pad its operating budget, CHUM should be making a contribution to the Canadian broadcasting system where a contribution is badly needed.

866 Thank you.

867 MR. GOLUBOFF: Rebecca, thank you.

868 The Commission has initiated a public process intended to encourage the production and broadcast of more English-language Canadian drama. Among other things, Public Notice 2004-32 says the following:

"It is the Commission's preliminary view that effective measures to increase the availability of and viewing to Canadian drama programs are needed at this time and that such measures would further the objectives of the Broadcasting Act. The Commission is of the view that there should be increased emphasis on original hours of Canadian drama. In the Commission's view the primary focus of any action to support Canadian drama should be on those programs achieving ten points. It is these programs that are most likely to tell Canadian stories and reflect Canadian values and realities." (As read)

869 In light of the Commission's views on Canadian drama not only do we believe that the CHUM's existing 11.5 million in commitments for priority programming should focus exclusively on independently-produced ten-point original Canadian drama, but a minimum of 5.28 million in new tangible benefits should be added to the proposed benefits package of 21 million.

870 These additional benefits of 5.28 million should be spent exclusively on independently-produced ten-point original Canadian drama or long-form documentaries.

871 For the purposes of monitoring CHUM's priority programming, CHUM is proposing that the Commission adopts CHUM's current spending levels as a point of departure.

872 This is clearly unacceptable. The appropriate base should be Craig's spending in Manitoba and Alberta over the last few years. That CHUM should come to the hearing without this information is a serious omission.

873 Furthermore, at this hearing, interveners should have the opportunity to comment on CHUM's proposed approach to monitoring. CHUM's meeting with Commission's staff after the hearing would not allow interveners to have their say.

874 Any postponement beyond today would distort the public hearing process.

875 In the event of an ownership transfer, CRTC policy places the onus on the applicant to demonstrate that the benefits proposed in the application are commensurate with the size and nature of the transaction.

876 If CHUM is to become one of the three largest multi-station ownership groups, then it must assume the accompanying role and responsibilities.

877 In light of comparable transactions involving Canadian conventional television stations and the Commission's own priorities in regard to original Canadian drama and long-form documentaries, we feel that the tangible benefits package proposed by CHUM is not commensurate with the size and nature of the transaction as Commission policy requires.

878 We are also of the view that their proposal is not in compliance with CRTC policy and that their benefits will not be spent on programming that is incremental to the eight-hour requirement.

879 As we have said in our written intervention, CHUM has very successfully, financially and recently posted an increase in third-quarter profit of more than 44 per cent, raising its net earnings for the first nine months of 2004 above those for the entire fiscal year ending August 31, 2003.

880 If the CHUM application to acquire Craig is approved, CHUM will divest of the money-losing portion of Craig, namely Toronto One, and CHUM will become bigger and even more profitable.

881 Instead of presenting a package of significant and unequivocal benefits that will yield measurable improvements to the community served by the broadcasting undertaking and to the Canadian broadcasting system, CHUM's proposed benefits package promises more of the same type of programming CHUM would be doing in the absence of the benefits package.

882 Historically, CHUM has been allowed to under-perform in the area of drama because it has not yet attained largest multi-station ownership group status.

883 Now that CHUM proposed to achieve to accede to such status, it should significantly modify its past behaviour.

884 CHUM has demonstrated the ability to participate in quality Canadian drama such as The Collector.

885 So, on this issue, CHUM's traditional defence, different strokes for different folks, is no longer relevant.

886 Canadian television drama is a fundamental vehicle for the maintenance and enhancement of national identity and cultural sovereignty.

887 The CRTC has stated that Canadian drama should be the corner stone of the Canadian broadcasting system and has called on all parts of the broadcasting system to work together to ensure the success of indigenous dramatic programming that both reflects Canadian society and projects Canada's stories onto the world stage.

888 In light of the Commission's own views on the importance of Canadian drama for Canadian audiences, we believe that CHUM's existing 11.5 million in commitments for priority programming should be allocated differently and should focus exclusively on independently-produced ten-point original Canadian drama.

889 We also believe that any additional benefits should be spent exclusively on independently-produced ten-point original Canadian drama and long-form documentaries.

890 We would be pleased to answer any questions you may have.

891 Thank you very much everyone.

892 THE CHAIRPERSON: Thank you very much.

893 Just a preliminary point, Mr. Goluboff.

894 The Commission's normal practice, when material is filed after the proceeding ends, is to submit it to interveners for comments.

895 So, it is not as though the matter you raised on point 12 will not be able to be commented on by interveners before the Commission makes a decision.

896 So, the idea that the postponement distorts the public policy process is, I think, perhaps exaggerated in light of the fact that you will have an opportunity.

897 MR. GOLUBOFF: No, I understand that we will have a written opportunity. Just that we will not have an opportunity to publicly put our comments on the matter.

898 THE CHAIRPERSON: No, it will be public, in the sense that the written filing will in fact be placed on the public file.

899 Whatever submission CHUM makes will then be commented on publicly by individual -- It will not be oral, but it will be public.

900 As long as you understand that.

901 Thank you.

902 Commissioner Colville.

903 COMMISSIONER COLVILLE: Thank you, Mr. Chairman.

904 I am tempted to say, besides all of that, you support the application?

--- Laughter / Rires

905 I guess, just to pick up on the Chairman's discussion with you, while there may not be an oral opportunity, judging by the length and thoroughness of your original written brief, we can probably expect an equally thorough submission on the point you have raised.

906 I don't have a lot of questions. I went through your original written brief. The reply to it that was quite detailed.

907 I don't know whether you were following the questioning yesterday or not -- I cannot recall.

908 MS BRAND: We were not present, but we did have a chance to review some of it. Yes.

909 COMMISSIONER COLVILLE: Well, a lot of my questioning --

910 MS BRAND: That's right.

911 COMMISSIONER COLVILLE: Picked up on many of the points that you also had raised --

912 MS BRAND: Yes.

913 COMMISSIONER COLVILLE: In your own original written intervention.

914 MS BRAND: Yes.

915 COMMISSIONER COLVILLE: So, I would hope that you thought, while you may not have agreed with the answers, that at least the points were covered.

916 MS BRAND: Yes.

917 COMMISSIONER COLVILLE: I guess just two things I would want to raise, more in a general way. I guess I am having some difficulty in understanding on two points.

918 The overall percentage that the Commission would determine for benefits and then the details about that benefits money would be spent.

919 So long as the proposed benefits package -- and we leave it up to the applicant to propose the benefits package -- so long as the benefits package meets the Commission's criteria.

920 I am having some difficulty understanding how or why we would change it through this process if it meets our ten per cent criteria.

921 You have suggested we should pick 12. Why should it be 12? Why not 11 or 13? It is meeting then per cent one.

922 The fact that others have come forward and proposed different amounts and different transactions is all well and good, but this largely meets our criteria.

923 So, I am having difficulty understanding on what basis we would pick 12 or any other number for that matter.

924 MS PARKER: Fair enough. Good question. However, you have in the past exceeded that minimum, and what we are looking for is not just mere compliance.

925 We are looking for some commitment. We are looking for complying with spirit, the spirit of the act.

926 It is a well known -- it has certainly been acknowledged by the CRTC that we have a crisis in English-language drama.

927 We are asking CHUM, who is now going to become the third largest multi-station group to step up to the plate and acknowledge that and do something about it.

928 I mean, it is not -- the world should not just be about complying with basic minimums.

929 Of course, I am an idealist.

--- Laughter / Rires

930 COMMISSIONER COLVILLE: That is fine. The world needs idealists.

931 On the second point, it has not been our, you know, nature to craft how the money is spent. Again, it is up to the applicant to bring forward, and provided it meets our criteria --

932 I find it difficult for us to sit back here and then start deciding where this money is going to be spent, again, so long as the original proposal meets our criteria.

933 When you read through all of the interventions for this, we clearly have a lot of competing vested interests -- I don't mean that in a pejorative sense --

934 MS PARKER: Yes.

935 COMMISSIONER COLVILLE: Who are saying "Well, I would like some of the money."

936 Somebody else would like some of the money. Documentary people would like some. The Aboriginals would like some. The ethnic would like some.

937 It seems to be a proposal that balances a whole range of interests, rather than just serve any one.

938 MS BRAND: Yes. We are not arguing that point.

939 All we are trying to say is that, as you noticed, we haven't said "Don't do this. Don't do that.", and we are not asking the Commission to sit here now and make decisions and divide it up for CHUM.

940 All we are trying to say is that there is certain benefits that CHUM has proposed -- both tangible and intangible -- in their package, which is part of the normal cost of doing business.

941 Therefore, we are saying that those should not be counted as part of the benefits package, and we are really trying to suggest that the Commission and that CHUM would be willing to put the money where it is most needed into the Canadian broadcasting system, with the long-term view of strengthening the system overall now and into the future.

942 That is all we are saying.

943 COMMISSIONER COLVILLE: Well, I mean, I take your point on that, and I think it is a concern of the Commission in terms of the real incrementality of the benefit here.

944 Whether it is ten per cent or an extra five million was added or not, the issue really then becomes the incrementality and I guess that is an issue that we pursued yesterday and we will pursue in the sort of follow-up process, if you will, in terms of the reporting to satisfy us and you and others that indeed the benefit money is incremental to what otherwise would have been spent.

945 So perhaps we can leave it at that.

946 MS PARKER: And in terms of measurability.

947 COMMISSIONER COLVILLE: Right.

948 MS PARKER: You know.

949 So we are certainly concerned about all of those aspects.

950 COMMISSIONER COLVILLE: Okay.

951 Thank you very much.

952 Thank you, Mr. Chairman.

953 THE CHAIRPERSON: Thank you very much.

954 Mr. Secretary.

955 THE SECRETARY: Thank you, Mr. Chairman.

956 We will now hear the Canadian Film and Television Production Association, Mr. Guy Mayson.

--- Pause

957 THE SECRETARY: Mr. Mayson, you have ten minutes to make your presentation.

INTERVENTION

958 MR. MAYSON: Thank you.

959 Good morning, Mr. Chair and members of the Commission.

960 My name is Guy Mayson and I am the president and CEO of the Canadian Film and Television Production Association.

961 The CFTPA represents over 400 companies that finance, produce distribute and market films, television programs and multimedia products in English in every region of Canada.

962 In an ever-consolidating media world, it is the voices of independent creators who provide diversity to the Canadian broadcasting system.

963 Our members create programming, obtain rights from authors and others with stories to tell, employ writers to prepare screenplays, hire directors, actors and crafts people to make the stories into programs and conduct all the business dealings to finance the provision of these stories to Canadian and foreign audiences.

964 We have a vital interest in the program practices and commitments of our major customers -- Canada's conventional television and specialty broadcasters -- whether they are applying for new undertakings, to renew existing licences or, as in the present instance, ownership transactions.

965 From our written submission, it is clear that the CFTPA supports CHUM's application to acquire the television holding of Craig Media.

966 With this application CHUM is seeking to add four television station in Winnipeg, Brandon, Edmonton and Calgary and three digital specialty services to its existing stable of eight conventional television stations in Ontario and British Columbia and 18 specialty programming channels.

967 If successful in its bid, CHUM will be stepping up to a new level of responsibility as a major player in the Canadian broadcasting system.

968 The addition of Craig's over-the-air television services in Manitoba and Alberta will mean that the CHUM brand of television will be available to more than 85 per cent of the English-language television market, cementing CHUM's place as Canada's third private national television network.

969 As we stated in our written submission, we appreciate the long-standing support this broadcaster has given the independent production community.

970 We welcome CHUM's plans to expand on a national basis and are satisfied that this broadcaster intends to honour its commitments to offer financial stability and ongoing support to the Craig stations in Alberta and Manitoba and to Prairie-based independent producers.

971 We also consider that the time has come to measure CHUM's commitments and obligations against those of CTV and CanWest.

972 The application stated that the value of the transaction at 265 million dollars and CHUM proposed benefits of 20 million dollars on an amount of 192 million dollars, which excluded its estimate of the value of Toronto One and of Craig digital specialty services.

973 Since filing the application, CHUM has come to an agreement with TVA/Sun Media (Québécor) for the purchase of Toronto One.

974 CHUM's letter of reply indicated that this has altered the value of the transaction to 210 million, and that it will increase the amount payable in tangible benefits by one million dollars, all of which will be directed to priority programming.

975 When Commissioner Colville questioned CHUM yesterday, he seemed to accept CHUM's math regarding the value of the transaction, but was perhaps not willing to concede that CHUM should not pay benefits on the digital specialty services.

976 We note that CHUM had previously committed, in a deficiency response letter, that it would be willing to add 900,000 dollars in benefits, to cover this amount, if the Commission deems it appropriate.

977 We consider this fitting and ask that those funds also be directed to priority programming.

978 CHUM's application proposed that just over half of its proposed benefits package would be allocated to priority programming (nine million dollars over seven years), with 75 per cent reserved for independent producers mainly from Alberta and Manitoba.

979 Half of the total priority programming dollars will be for drama projects. Ten per cent will be allocated to culturally diverse projects from ethnic and aboriginal producers, with a further ten per cent reserved for projects with innovative interactive content.

980 CHUM also promised one million dollars in script and concept development funding (to add to Craig's outstanding commitment of one million dollars) and 500,000 dollars in bridge financing for CHUM-supported projects.

981 In keeping with CRTC policy, CHUM has also committed to uphold Craig's outstanding Canadian programming expenditure commitments, including 13.8 million dollars for the "A-Channel Production Fund".

982 Among its other promised benefits expenditures are some 9.5 million dollars for "local programming" and social/talent development initiatives.

983 Among the various projects to be undertaken by a Cultural Diversity Mentorship program (valued at 175,000 dollars), to be administered by CFTPA, which will provide aboriginal and multicultural youth with a minimum of 30 weeks training in production.

984 We have asked CHUM to consider that a two- or three-year timeframe -- rather than the stated seven years -- is appropriate for this initiative.

985 CFTPA has recommended that, as a new policy direction, the CRTC should encourage broadcasters to invest 75 per cent of the benefits in television ownership transactions in priority programming.

986 These types of programs are among the most expensive to make and yet have the widest audience appeal.

987 Since the 1970s, the federal government has supported the financing of original Canadian drama, documentary, children's and performance arts programming as being essential Canadian content.

988 We are convinced that Canadian audiences will benefit from such an initiative.

989 By ensuring that significant dollars are funnelled to these types of production, broadcasters will be in a better position to provide their audiences with the type of programming they most prefer.

990 More resources dedicated to new, original programming will result into the creation of content that is exportable outside the immediate community.

991 Part of the rationale for this suggestion as well is that benefits funds that are directed to independent productions are subject to the strict checks and balances that are inherent in production financing.

992 It is also far easier to track the incrementality of programs that are created by independent producers.

993 Our recommendation does not preclude the broadcaster from making improvements to locally relevant and culturally diverse programming.

994 Our interventions also expressed concern that there was little information on file regarding CHUM's plans for the Craig conventional television stations or its digital specialty channels.

995 In total, CHUM has proposed 95 million dollars in Canadian program expenditures over seven years for the four conventional television stations, representing 26.5 per cent of projected revenues.

996 Consistent with our approach in response to other applications, CFTPA has recommended that the CRTC require CHUM to provide details about its Canadian programming expenditures, particularly the breakout between in-house and independent production, and that this broadcaster report annually on the total amounts to development, license fees/acquisitions and equity investment, by program genre.

997 We recognize that the most appropriate means of tracking CHUM's program expenditures, the issue of incrementality and the appropriate baseline priority programming levels for the Craig conventional television stations are still matters that are still unresolved and are awaiting further input from CHUM.

998 CHUM prides itself on being an alternative to the "mainstream" Canadian (and US) conventional networks.

999 Its style is vibrant, extremely local, and reflective of the cultural diversity of each community that it serves.

1000 With its emphasis on movies, drama series and documentaries, CHUM is a strong supporter of Canadian independent film and television producers.

1001 For producers to become successful, we must be able to fully exploit the copyright we hold in our productions.

1002 I am pleased to report that CFTPA and CHUM are actively engaged in terms of trade discussions, which we consider an essential means of establishing clarity, transparency and equitability when our membership engages in business dealing with our broadcast partners.

1003 There can be an unfair imbalance in the broadcaster/producer relationship when the broadcaster owns a number of different outlets and several windows (both conventional and specialty).

1004 Our discussions with CHUM have been positive and productive, in keeping with this broadcaster's firm commitment to the Canadian independent production community.

1005 We remain committed to the fundamental principle of fair remuneration for the broadcast rights that are obtained.

1006 The multitude of broadcast windows and platforms now available mean that broadcasters are seeking ways of providing their viewers with affordable content and of getting the most for their programming dollars by seeking additional rights and longer broadcast windows.

1007 It is our job to ensure that the program creators are adequately compensated.

1008 Last year at Banff, Jay Switzer said that if we are to succeed in making programs that will attract Canadian audiences, it is essential that we recognize the economic realities of this industry and build partnerships across the sectors.

1009 This means investing in, promoting and scheduling Canadian productions at times when viewers are available. This means a strong commitment to Canadian programming in prime time.

1010 I am pleased to say that CHUM is one of the independent production community's strongest partners.

1011 Thank you for your attention.

1012 I would be pleased to answer any questions.

1013 THE CHAIRPERSON: Thank you, Mr. Mayson.

1014 Commissioner Wylie.

1015 COMMISSIONER WYLIE: Good morning, Mr. Mayson.

1016 There are a number of issues raised with regards to the benefits in this transaction which are policy questions.

1017 For example, as a new direction, you would like the CRTC to encourage broadcasters to invest 75 per cent of their benefits in television ownership transaction in priority programming.

1018 Is it your view that we ought to have some policy look and play a more intrusive role in how benefits are allotted or allocated?

1019 At the moment, it seems to me that the role is to say it has to be a minimum of ten per cent.

1020 Of course, it can be more if the applicant feels that that is an advantageous thing to do for whatever reason -- regulatory or commercial or otherwise.

1021 But we have left these negotiations to the parties to the extent that they fit the concept of helping the broadcasting system.

1022 We have left it to the parties to negotiate who gets what -- and heaven knows there are a lot of competing interests out there.

1023 You have some very strongly organized interests. Then we have various sectors of the industry who feel that they need even more because they are less organized, etc., etc.

1024 When did you -- I see that you appear to be having successful negotiations with regard to terms of trade with CHUM.

1025 How early in the game did you discuss this once you found out that they were buying the Craig assets?

1026 How early in the game would the CFTPA have started expressing its views as to where their benefits should go?

1027 MR. MAYSON: You should be equating it to our terms of trade discussions? I mean, we --

1028 COMMISSIONER WYLIE: No, no.

1029 MR. MAYSON: No.

1030 COMMISSIONER WYLIE: No. The issue you --

1031 If I understand your written intervention and your presentation today, you would like us to encourage CHUM to divvy up its tangible benefits differently.

1032 It is not that you question that they are not proposed properly, but that a larger percentage should go to the area that is of interest to you.

1033 Am I correct?

1034 MR. MAYSON: Yes.

1035 COMMISSIONER WYLIE: So, when in the process did you have discussions with CHUM as to how they should do this?

1036 MR. MAYSON: We will lead with that --

1037 COMMISSIONER WYLIE: Because it is a system right now of negotiation.

1038 Women in Communications, Cultural Diversity, the Aboriginal Producers, the Western Producer, everybody expects something from this.

1039 When did you negotiate with CHUM?

1040 MR. MAYSON: We did not negotiate with CHUM in the sense that this -- we do this more as a principle --

1041 COMMISSIONER WYLIE: I see.

1042 You did not sit down with them and say what you are saying to us today that 75 per cent would make more sense --

1043 MR. MAYSON: We have had --

1044 COMMISSIONER WYLIE: Considering --and that maybe it would be more -- the better project to put to the Commission. Because we have had some intrusion into the system by saying --

1045 MR. MAYSON: Yes.

1046 COMMISSIONER WYLIE: Eight hours of priority programming. In English Canada, you are right, drama is a concern for us.

1047 You have not had this discussion with them before they started divvying up their tangible benefits?

1048 MR. MAYSON: No.

1049 We have had some discussions with CHUM on various things, but this has been viewed more as a policy issue I think to us.

1050 We realize that there may be an issue for the Commission -- is this a new policy or an amendment of past policy?

1051 COMMISSIONER WYLIE: Yes.

1052 MR. MAYSON: We see it more as just a clarification, maybe an updating, in the sense that --

1053 COMMISSIONER WYLIE: Yes.

1054 MR. MAYSON: There is obviously a number of issues about programming, what expenditures should be going into.

1055 Given the importance that the Commission and the government is putting on priority programming, I thought this is actually a fairly logical approach to --

1056 COMMISSIONER WYLIE: Yes.

1057 Because it is difficult during a hearing to come and say "Not to the Aboriginals. Not for Cultural Diversity. More for ten-point programming or for independent producers". It is very late in the game.

1058 Unless what you are suggesting is we need to have a policy on tangible benefits.

1059 What I hear you say is it doesn't -- at the moment, it doesn't appear to meet other priorities that have been established by the government or by us i.e., the difficulty with drama and long-form documentaries.

1060 MR. MAYSON: Well, we realize it may be an issue obviously for the Commission at this stage in the course of an individual transaction, but we felt it was an appropriate recommendation to sort of find --

1061 COMMISSIONER WYLIE: To put it forward.

1062 MR. MAYSON:  -- an actual compromise position in many ways in looking at the different views that were expressed, and it would be a reasonable approach in fact.

1063 COMMISSIONER WYLIE: It is because even if there were a policy process, whatever PR work an institution or an association such as yours can do with the broadcasters themselves is already helpful.

1064 MR. MAYSON: Well, I mean, it is interesting.

1065 COMMISSIONER WYLIE: Otherwise you get into micro-management or intrusion. That is quite difficult to say "Not to this, but to that."

1066 I can understand the situation of incrementality and that it be properly looked at.

1067 I can also understand the valuation of the transaction and therefore the percentage that is to be applied, to what sum the percentage is to be applied.

1068 But if the projects that are put forward look like they fit within enhancing the broadcasting system overall, it is difficult for us to say "Not this, but that".

1069 MR. MAYSON: Yes.

1070 COMMISSIONER WYLIE: You would loose some friends I think in the process.

1071 You know, those to whom the money is directed, if it were re-directed at your behest, would get some passionate resistance, wouldn't it?

1072 MR. MAYSON: Well, it strikes me that, though the priority programming is, you know, it is stating the obvious, it has been considered a priority and it is priority programming, and I think it is an important, this is an opportunity perhaps for the Commission to send a signal which reflects some of the discussion that has been going on over the last few years in previous rulings obviously.

1073 But it is not necessarily I think a re-opening of any policy. It is maybe just a clarification of something and sending a signal about priorities.

1074 COMMISSIONER WYLIE: You are not advocating a policy hearing on tangible benefits, but at the end of the day what you are advocating is we should say "Take from Paul and give to Peter" because it is a higher priority.

1075 MR. MAYSON: Well, we would, I think --

1076 COMMISSIONER WYLIE: By saying 75 per cent to the cause that you are identifying, which is not what is the case and --

1077 So you see the difficulty at this late date of re-divvying --

1078 MR. MAYSON: It is a challenge, but I think we would see priority programming as something which is recognized as being important by everyone in the industry right now, regardless of where you are coming from, and I think there are ways of looking at, you know, the tangible benefits package and saying "This is maybe more important than that or this is something that could withdrawn out of other operation revenues and other operational expenditures."

1079 So priority programming I think should be given some priority in this.

1080 COMMISSIONER WYLIE: We thank you for your thoughtful presentation, both in writing and this morning, and we are certainly encouraging you to take your message to the broadcasters before they buy each other.

--- Laughter / Rires

1081 COMMISSIONER WYLIE: Thank you.

1082 MR. MAYSON: Thank you.

1083 THE CHAIRPERSON: Thank you, Mr. Mayson.

1084 We will break now for fifteen minutes.

--- Upon recessing at 1100 / Suspension à 1100

--- Upon resuming at 1119 / Reprise à 1119

1085 THE CHAIRPERSON: Order please. À l'ordre s'il vous plaît. Mr. Secretary.

1086 THE SECRETARY: Thank you, Mr. Chairman.

1087 We will now call the Alliance of Canadian Cinema, Television and Radio Artists, Mr. Ken Thompson. Mr. Thompson, you have ten minutes to make your presentation.

INTERVENTION

1088 MR. THOMPSON: Thank you.

1089 Good morning, Chairman Dalfen, Vice-Chair Colville, Commissioners Noël, Wylie and Williams, Commission staff.

1090 My name is Ken Thompson. I am Director of Policy and Communications for the Alliance of Canadian Cinema, Television and Radio Artists.

1091 ACTRA represents 21,000 Canadian professional performers working in the English-language recorded media in Canada. ACTRA and its predecessor organizations have represented the interests of professional performers working in the English-language media in every region of Canada for over sixty years.

1092 ACTRA's principal function is the collective bargaining needs of its members and others whose performances in movies, television programs, sound recordings and digital media entertain, educate and inform Canadians and global audiences.

1093 ACTRA is a vocal advocate for the preservation and strengthening of Canadian culture and Canadian creativity.

1094 ACTRA plays a leading role in coalitions for the advancement of Canadian cultural programs and in international bodies working for the protection of cultural diversity in a global economy.

1095 ACTRA has taken an active role in the Coalition of Canadian Audiovisual Unions, whose mandate is, among other things, to restore Canadian-made drama productions to Canadian television.

1096 ACTRA also operates the Performers' Rights Society, a corporation and separate legal entity that is a non-profit organization responsible for the collection and distribution of use fees, royalties, residual fees and other forms of compensation, to which members and permit holders of ACTRA and others may be entitled by reason of their work in the entertainment and related industries.

1097 We are very pleased to have the opportunity to speak to you this morning at this hearing regarding the application of CHUM Limited to acquire Craig Media Inc. and in particular the transfer benefits package that is proposed by CHUM. I think you will find that the directors' and writers' presentation complements ACTRA's presentation as well.

1098 ACTRA members have a vital stake in Canada's cultural future. They benefit professionally when work opportunities are strong. They also believe passionately that Canada needs a strong Canadian presence wherever entertainment and information services are created and however these are provided to Canadians.

1099 If we are to achieve our creative promise, the work of artists and performers must be seen. ACTRA believes in our own national creativity, our capacity to tell and perform our own stories. It is this belief that motivates ACTRA's participation in the public processes about the future of Canadian television, film and other media that make up the cultural industries.

1100 We provisionally support CHUM's application to acquire Craig Media but believe the benefits package proposed in the CHUM application can and should be improved.

1101 I will address three of our primary concerns about the benefits package proposed by CHUM: first, the value of the package; second, the nature of the benefits; and third, the need to invest in Canadian drama.

1102 ACTRA maintains that the value of the CHUM proposed benefits package should be significantly increased beyond the proposal CHUM has made in its application and in its reply to intervenors. We recognize that CHUM is required to divest its interest in Toronto One and it is precisely for this reason that we submit that CHUM's benefits package should be calculated on the full value of the transaction, including Toronto One and the Category 2 licences.

1103 We recognize that Toronto One is a very new licence and, as such, untested. We note that while CHUM argued in its original application that the station's value is $64 million, it has subsequently reached agreement with the purchaser for a price of around $46 million. If the Commission were to have accepted the original CHUM application, there would have been a loss of $1.8 million or more in benefits to the system. Now, CHUM is proposing to add back $1 million, thereby increasing its benefits package to $21 million. However, we argue that it still creates a net loss of $800,000 to the system.

1104 Rather than arguing theoretically about the value of the proportion of the assets acquired in a case where there is forced divestiture of some assets of the transaction, we think that the benefits package should be calculated on the full value of the transaction, including those assets that will be sold. We recommend further that responsibility for an appropriate portion of the benefits package should flow to the subsequent purchaser of an asset that is subject to forced divestiture. We think this is an equitable solution.

1105 In addition, the purchase of Category 2 specialty services, specifically MTV2 and TV Land, will provide CHUM with additional economies of scale and permit them to amortize program purchases over a larger number of services. CHUM music programming and market share of music youth programming will be increased through these purchases and we therefore believe that the value of the Category 2 services should be included in the value used for purposes of determining the quantum of the benefits package.

1106 Now, I would like to address the nature of the benefits.

1107 We are concerned that a significant proportion of the benefits package proposed by CHUM would not be allocated to programming that is a significant benefit to the system. We are speaking here about the local news bureaus in Red Deer and Lethbridge and the program entitled "Caravan!".

1108 Let us start by stating that ACTRA endorses the proposal of CHUM to open these new bureaus and to produce this programming but we believe that the costs associated with these plans should not be considered a benefit under the Commission's policy.

1109 The Commission's policy on benefits is set out in Public Notice CRTC 1989-109 entitled "Elements assessed by the Commission in considering applications for the transfer of ownership or control of broadcasting undertakings." Under this policy, and I quote:

"Only those initiatives that would not be realized without the approval of the proposed transfer are viewed as benefits. In order to be accepted as a benefit, the proposed expenditure must be incremental. Expenditures that would normally be considered ongoing normal responsibilities of the existing licensee will not be accepted as benefits."

1110 Our argument is not that these expenditures are not, in essence, incremental. Since these bureaus and this series do not exist, they are clearly additional. However, we submit that these are normal business expenditures that would or should be part of the ongoing investment and spending of programming in which CHUM excels. Thus, they fail to meet the test of being beyond the "normal responsibility of the existing licensee."

1111 We don't believe these expenditures are a benefit because local news and reality improv comedy is the kind of programming that CHUM has used successfully to build its reputation, and thus, it is the sort of investment that they would make regardless of whether the Commission policy required a benefits package.

1112 We also note that both Lethbridge and Red Deer are served by Global and CTV stations that provide local news programming throughout the broadcasting day.

1113 Now, I would like to turn finally to the issue of drama.

1114 ACTRA submits that investment in drama productions, which are urgently needed on both a national and local basis, would be a true benefit to the broadcasting system, both regionally and nationally. CHUM's commitments in this benefits package to the development, production and broadcast of original 10-point dramas falls short of the commitment that a benefits package should address in 2004.

1115 We acknowledge that CHUM would commit over 50 per cent of its priority programming allocation to drama but this is a scant $4.5 million over seven years, which amount would have little impact on the system. The CHUM proposal to allocate $9 million -- and now, I believe, $10 million -- to priority programming over seven years will contribute little to independent producers when fully one-half of it is being allocated to in-house CHUM productions.

1116 We think this is unacceptable. Effectively, the benefits package proposed by CHUM would allocate less than $643,000 annually to independently produced priority programs. Even if all of this were spent on drama, very few programs would result.

1117 In the submission of the Coalition of Canadian Audiovisual Unions to the CRTC, 2004-32, the CCAU made the argument to support a threshold of at least $1 million per hour for drama productions, other than children's program, and a level of $750,000 per hour for children's drama productions. The CCAU noted that these thresholds generally match the average production budgets of these categories of drama as reported to the CTF. As the Commission correctly pointed out in that Public Notice, drama productions are generally very expensive to produce.

1118 In the past four years, ACTRA and its members have been in the forefront of a campaign, with the directors and the writers, to reverse the precipitous decline in the availability of domestically produced Canadian-language television drama. We have raised this issue publicly with politicians and with the Commission. There is an ongoing crisis that requires urgent and immediate action or we risk losing the ability to tell our own stories.

1119 We urge the Commission to take this opportunity to make a significant step to help reverse the decline in Canadian drama productions. Canadian drama programming is under-subscribed, especially in the western provinces, which will drive most of the benefits from the CHUM purchase of Craig.

1120 We acknowledge that investing in 10-point dramas that are written, performed and directed by Canadians is good for Canadian performers, just as it is good for Canadian screenwriters, Canadian directors, Canadian set designers, Canadian technicians and Canadian producers, but significantly investing in Canadian drama is overall good for all Canadians.

1121 Dramas are an important way to tell our stories and it is important for us to be able to tell our stories in the most powerful medium. Failure to tell our stories well and to create an infrastructure that allows for an even playing field for Canadian drama production within the worldwide marketplace through distribution will continue to erode the worth of our creative ideas.

1122 Canadian television dramas are where we see ourselves, our past and our future, and are a way of expressing our national identity and preserving our cultural sovereignty. This is why we propose that at least two-thirds of the CHUM benefits package should be allocated to drama production. This would equal, based on the CHUM proposal, $13.5 million if the Commission accepts the submission of CHUM with respect to the quantum of the benefits package.

1123 We acknowledge that such a decision would represent a precedent but we submit this is necessary because the crisis in Canadian television drama has arisen since the last time the Commission had an opportunity to review a significant transfer of ownership.

1124 As stated in our written intervention and earlier in this oral submission, ACTRA believes that Toronto One should be included and the Commission should mandate a benefits package based on the full purchase price. If the Commission accepts that, $17.7 million would be allocated to drama programming according to our request. We submit that the allocation of benefits for local programming should be primarily for 10 point drama productions.

1125 As well, stated in our written submission, we include both the script and concept bridge financing as part of the drama benefits. That would compose the two-thirds allocation to 10 point Canadian drama. We also note that this leaves $6,815,000 for local programming and we suggest that some of this should be used for drama programming as well.

1126 The BCE/CTV benefits package proposed in 2000 allocated $70 million of a total of $230 million in their benefits package, or almost 30 per cent to production of Canadian drama at a time when we had a far larger number of television drama series and Canadian movies of the week. No one predicted the freefall decline in drama programming that started soon after. Unfortunately, creators and performers are not soothsayers, otherwise they would not have endorsed the CTV percentage.

1127 There is also a significant difference in the absolute value of the commitment. CHUM has offered an even lower percentage, just over 20 per cent four years after we have witnessed the virtual disappearance of 10 point Canadian drama productions from television.

1128 For all of these reasons we recommend that in the given production climate and to preserve Canadian programming, the Commission should require CHUM to allocate at least two-thirds of the benefits package to 10 point dramas.

1129 We thank you for providing this opportunity for ACTRA to voice its concerns and offer its recommendations in this very important process. I welcome your questions.

1130 THE CHAIRPERSON: Thank you, Mr. Thompson.

1131 Commissioner Williams.

1132 COMMISSIONER WILLIAMS: Good morning, Mr. Thompson.

1133 Could you please elaborate a bit more on your point as to why we shouldn't expect and include benefits from the Toronto One portion of the transaction? I would imagine the acquiring party would also pay benefits. So do you see double benefits being the outcome of this?

1134 MR. THOMPSON: No, we don't see double benefits. The situation that arises here is somewhat different than as in the past because this is a forced divestiture. Otherwise CHUM could not have two major stations in one location.

1135 In this situation, of course we would expect that there would be another benefits package proposed by the purchaser of Toronto One, but because of the devaluation in the value, because it is forced and not free on the market, hasn't been allowed to mature, we think that in this situation the benefits package that CHUM is providing should be on the full amount rather than on a discounted amount basically because of the forced divestiture.

1136 COMMISSIONER WILLIAMS: Okay. Thank you. I have no further questions, Mr. Chair.

1137 THE CHAIRPERSON: Just to follow that up, Mr. Thompson, I guess in the discussion that Commissioner Colville had with the applicant there was a discussion about adjusting the base for the benefits in light of the reduced price that was realized relative to what the applicant had thought originally it was to be valued at. So $46 million has been removed from that base.

1138 Now, if benefits were charged on that, would it be fair to do that given the benefits on the $46 million now and then benefits on the $46 million when it was then transferred to the next owner.

1139 MR. THOMPSON: I believe the answer to that is that it would work in almost the same way that the intangible benefits of Craig, the commitments of Craig has made have been passed on to CHUM in this situation, the difference being that this is a forced divestiture. It has not been allowed to find, in essence, a fair market value because the station has not been on the air long enough to really develop.

1140 We think in this situation the full amount of the transaction between CHUM and Craig should be the amount that is used to calculate the benefits package rather than a discounted amount, otherwise it allows purchasers such as this -- and they may never come up again in the future, this may be a one-off -- to calculate in advance and in fact there would be less going back into the system. So you could actually almost pre-calculate that.

1141 THE CHAIRPERSON: I'm afraid I don't understand your point.

1142 The total purchase price here is $265 million.

1143 Are we agreed?

1144 MR. THOMPSON: We are agreed on that.

1145 THE CHAIRPERSON: Are you saying that the benefits should be $26.5 million?

1146 MR. THOMPSON: Yes. That was our original --

1147 THE CHAIRPERSON: If you are saying that, then you recognize that an application has been filed for a transaction of $46 million for Toronto One. So would it be your view that benefits of $4.6 million, for example, should be calculated on that future transaction in addition to all the benefits here?

1148 MR. THOMPSON: No, that is not our position. We have never taken that position.

1149 What we believe is that the benefits package here should carry that difference, so that Toronto One, the benefits that are paid for Toronto One are paid on the $65 million that was originally calculated for the price, as CHUM had done in their original application before the sale or to the purchaser of Toronto One.

1150 THE CHAIRPERSON: What benefits, in your view, should be due on the next transaction?

1151 MR. THOMPSON: Whatever might be incremental on that. I mean, of course there would be an opportunity for a hearing to determine whether they thought the benefits were incremental and how they were applied, but basically we wouldn't be looking for an extra amount, an extra amount from the purchaser.

1152 Basically what we are looking for is a benefits package that is based on the $65 million purchase as it was originally valued.

1153 THE CHAIRPERSON: You say $65 million. There are two numbers, there is the $265 million total value and then there is a $64 million value that was originally allocated. Are you saying the $64 million?

1154 MR. THOMPSON: I misstated myself. I am referring to the $64 million.

1155 THE CHAIRPERSON: You are referring to the $64 million. I hear what you are saying, but I'm not sure I follow it because I still see a double counting in your logic and I'm not sure how fair that is or consistent with past policy of the Commission.

1156 MR. THOMPSON: We are not suggesting any double counting. We are suggesting that the full value of $64 million be the amount that this benefits package that CHUM -- that is before the Commission this morning in this transfer, that the benefits package be based on the full value, that would be the $64 million.

1157 THE CHAIRPERSON: Okay. I think we will move on. I just have one more question.

1158 You, yourself, in talking about the Red Deer and Lethbridge local news presence quote the Commission's policy as requiring that benefits not be a normal -- you quote it on the top of page 5 of your oral remarks -- responsibility of the existing licensee. Then you go on to say that maybe they would do it anyway because it might be good programming.

1159 That discretionary decision as to whether or not to do it, would that amount to a responsibility in the sense that the Commission is using it?

1160 MR. THOMPSON: I think that is up to interpretation actually if the Commission were putting it forward as a way to deal with benefits. In this case with the new bureau, it is not that we are opposed to the content of the programming or the idea, it is that there already is a significant amount of local news programming available through two other networks, at least that I could determine.

1161 So I guess the question would be: Is in fact the benefits package assisting CHUM to find a place in the marketplace for news programming in Lethbridge and Red Deer or would that be something that they should be looking to normal -- growing their business in a normal way with ongoing expenditures, business expenditures outside of a benefits package. So is it allocating money to that type of programming really a true benefit to the system?

1162 THE CHAIRPERSON: You think it is their responsibility to do that?

1163 MR. THOMPSON: Well, to provide news programming for --

1164 THE CHAIRPERSON: From Lethbridge and Red Deer with prep bureaus in those markets?

1165 MR. THOMPSON: Outside of the benefits package, if they feel that is commercially viable for them to do it, I think they should.

1166 THE CHAIRPERSON: That is not my question.

1167 Is it their responsibility to do it?

1168 MR. THOMPSON: To provide news?

1169 THE CHAIRPERSON: From a presence in Lethbridge and Red Deer?

1170 MR. THOMPSON: No, I don't think it is their responsibility, but it is not something that should be subject to a benefits package due to a transfer --

1171 THE CHAIRPERSON: I'm having a hard time understanding that. If it is not their responsibility and they are offering to do it and it has benefit, why isn't it, in your view, part of the eligible benefit?

1172 MR. THOMPSON: Because it seems that it would be -- essentially it would be to benefit CHUM, not necessarily the communities themselves which are already serviced.

1173 THE CHAIRPERSON: You think that the fact that there is a global presence in Red Deer and Lethbridge is all that is required and that a further news presence in those markets to carry back to the residents of Edmonton and Calgary doesn't enhance that, the fact that Global does it is sufficient in terms of diversity of news voices and the like?

1174 MR. THOMPSON: No, I am not arguing that it is sufficient. We are suggesting that this is a normal business expenditure outside of a package for benefits.

1175 THE CHAIRPERSON: Thank you.

1176 Madam Wylie.

1177 COMMISSIONER WYLIE: To better understand what you are saying, is it that CHUM should pay benefit on the total amount and the purchaser of the forced divestiture asset would not pay benefit. It's responsibility would be to come and show us that its plans and expenses and projected programming plans are satisfactory?

1178 Is that what you are saying? It is not double counting but that the purchaser in this case should pay benefits on the entire amount and then let the purchaser of the divested asset show us that it is a good idea to approve that transfer?

1179 Is that it?

1180 MR. THOMPSON: I'm going to clarify this. The amount for Toronto One, the value of Toronto One, should be $64 million, as is part of this --

1181 COMMISSIONER WYLIE: I think we have all agreed, including the applicant, as I understand it, has agreed, therefore they will pay benefits on the difference between what they valued it at and what they sold it at.

1182 MR. THOMPSON: That's right.

1183 COMMISSIONER WYLIE: Is that it?

1184 MR. THOMPSON: As you have explained it, this is a one-off situation because I don't believe that this has been before the Commission before.

1185 COMMISSIONER WYLIE: Do you agree, then, that the incremental is the difference between $64 million and $46 million --

1186 MR. THOMPSON: Yes.

1187 COMMISSIONER WYLIE:  -- in the hands of the applicant?

1188 MR. THOMPSON: Yes.

1189 COMMISSIONER WYLIE: I see. This is what is before us at the moment.

1190 THE CHAIRPERSON: Thank you.

1191 That's all. Thank you very much, Mr. Thompson.

1192 Mr. Secretary.

1193 THE SECRETARY: Thank you, Mr. Chairman. For the record I would like to indicate that Mr. Joe Clark elected not to appear at the public hearing so I will now call on Communications, Energy and Paperworkers Union of Canada.

1194 Mr. Peter Murdoch.

--- Pause

1195 THE SECRETARY: Mr. Murdoch, you have 10 minutes to make your presentation.

INTERVENTION

1196 MR. MURDOCH: Thank you.

1197 Good morning and thank you for allowing me to appear before you. I ask your indulgence. I have no written documents to present before you so I'm just going to blab on for less than 10 minutes I can assure you.

1198 I want to say a couple of things I guess off the top. First of all, I am Vice-President, Media for Communications, Energy and Paperworkers Union of Canada. We are Canada's largest media union. We represent workers, employees in Craig and in CHUM stations, as well as private broadcasters throughout the country in the large newspapers and 2,000 people in independent film and television production.

1199 I must say, I find myself caught in a very interesting dilemma that representing people in independent film and television production and employees of the stations and the concerns that you have expressed for that are certainly our concerns as well to some degree.

1200 Having said that, there is no question that CEP firmly supports the concerns that have been raised by my colleagues in ACTRA, in the Directors Guild and Writers Guild about the crisis in Canadian drama. I know the Commission is fully aware of that and just let me say that we support a great deal of the comments made by those organizations.

1201 However, what brings me here today, and of course what our intervention was about, was particularly about local programming, the concerns we have in terms of monitoring commitments to local programming, promises of performance, et cetera.

1202 In our intervention we raised the issue of the New VI in Victoria and the comments that were made there. I note that CHUM has come back and suggested because we do not represent employees at the New Vi perhaps our information is to be taken lightly.

1203 I can assure you the facts that we put before you in that intervention about the erosion of local programming and local coverage are true and honest. So it is of some concern that CHUM, who in many ways and particularly in some of the larger stations, has done well in terms of local programming, but in other places not so well. In fact, I think a serious problem.

1204 Where we find the bigger in the cities, for instance Citytv in Toronto, they might do very well, but in the New VR in Barrie not so well.

1205 We consider it of enormous benefit to have commitments made by broadcasters for local programming reflection. We think that without local reflection these stations simply become transfers of programming which maybe we hope is a Canadian production but often as not is American or foreign production. So there has to be some commitment on the part of broadcasters for local reflection.

1206 I would want to just bring to your attention -- and I believe it has been brought to Mr. Dalfen's attention, but I will read part of a letter subsequent to our intervention about CKNX in Wingham, if you will give me a few minutes.

"In 2002, your Commission gave CHUM a licence for seven years for the station in Wingham, Ontario called CKNX. In their application, CHUM promised to continue the current levels of local programming and your Commission stipulated that as a condition of licence. By its actions of August 23..."

1207 This is this recent past 23:

"...the station management and the CHUM Group have turned their nose at these conditions." (As read)

1208 THE CHAIRPERSON: Excuse me. I don't mean to interrupt you, Mr. Murdoch, but what are you reading from there?

1209 MR. MURDOCH: I am reading from a letter that actually was sent to you on August 27th.

1210 THE CHAIRPERSON: Has the applicant seen this letter?

1211 MR. MURDOCH: I'm assuming that it has.

1212 THE CHAIRPERSON: Has it been included in --

1213 MR. MURDOCH: In fact, I know that it has because they have made representations to us about this letter.

1214 THE CHAIRPERSON: Has it been included a part of the proceeding?

1215 MR. MURDOCH: No, it has not. No, no. My apologies. So what, no, I can't do it?

1216 THE CHAIRPERSON: Maybe it would be better to move on beyond it.

1217 MR. MURDOCH: Okay. Let me talk about the circumstances and forget the letter.

1218 So the circumstances are that CHUM made commitments in its licensing of Wingham and recently has abandoned those commitments, particularly to the area of Owen Sound, Grey Bruce, which that coverage is fed through the Wingham station. It is the only local coverage, by the way, for that entire area.

1219 The Wingham station has a 58-year history and at one point was in the Guiness World Book of Records as the smallest television station in the world.

1220 CHUM made some commitments to continue on with local programming there, and these commitments have now recently been abandoned. The reason I point this out is because it is no different, in our point of view, from the instances that I mentioned in Victoria where commitments were made and now abandoned.

1221 This is not to say that in some stations CHUM does not do very well because in some stations CHUM does do well. But what are we to do about those stations in which there is this abandonment to local programming and reflection?

1222 That is our concern here. We think if they are going to honour them, so they should, and if they are not, what are our alternatives. They have some alternatives. We understand that there are some financial concerns in terms of the New VI that prompted them to abandon, they were over budget, but they can seek recourse here and they didn't. The same is true in Wingham, they could seek recourse here and, to the best of our knowledge, they haven't.

1223 So I am here to suggest to you that in our view -- and we support this transaction, but in our view we would encourage you to do what you can to encourage CHUM to meet both its current commitments in terms of local reflection in programming, and to encourage them in the future with Craig. Craig does have some good programs, as you have heard here earlier this morning. We don't want to see them, because of debt loads of this merger, abandon some of that local programming. We want to see them encouraged.

1224 Those are my brief comments and I want to thank you.

1225 I just want to say it is good to see you alive and well and kicking. I know the CRTC has been through some problems recently and we managed to get through the election okay.

1226 THE CHAIRPERSON: Problems? Thank you, Mr. Murdoch.

1227 Commissioner Williams has --

1228 COMMISSIONER WILLIAMS: Actually, I don't have any questions for you, but thank you for your presentation this morning.

1229 THE CHAIRPERSON: Thank you.

1230 Mr. Secretary.

1231 THE SECRETARY: Thank you, Mr. Chairman.

1232 I will call again Mr. Norman Spector to intervene at this time.

1233 Not seeing Mr. Spector, I will call again on the Canadian Diversity Producers Association, Mr. Adetuyi.

--- Pause

1234 THE SECRETARY: I am informed that Mr. Paul DeSilva will intervene instead of Mr. Adetuyi on behalf of the Canadian Diversity Producers Association.

1235 Mr. DeSilva, you have 10 minutes to make your presentation.

INTERVENTION

1236 MR. DeSILVA: Thank you, Mr. Secretary.

1237 Members of the Commission, my name is Paul DeSilva, as has already been mentioned, and I thank you for the opportunity to intervene in this hearing.

1238 I have been in the film and television production business for 25 years and I am the President of Gen Films, a film and TV production company. I have worked as a CBC news reporter and executive producer in current affairs and drama, and recently as V-P of Programming at Vision TV, and more recently had the pleasure of appearing before the Commission recently during the Category 1 hearings for the Body, Mind and Spirit Channel, so I am very happy to be back once again here today representing the Canadian Diversity Producers Association, the CDPA.

1239 The CDPA is an industry advocate for a level playing field when it comes to the production of feature films and television programs and when it comes to helping identify and eliminate systemic barriers that ethnic and visible minorities are experiencing in having access to equal funding and full participation in the system.

1240 The CDPA was formed earlier this year and launched in June at the 2004 Banff Television Festival. It is the Canadian branch of the International Council on Diversity in Film and Television, INDICO, which was formed in 2001. The Association is Co-Chaired by myself and Mr. Amos Adetuyi of Inner City Films, who I am in fact replacing today, and Derek Louise, who is also a film-maker, is the Executive Director.

1241 The CDPA was formed essentially to address the inequity in media employment and for the reflection of cultural and racial minorities, which was most recently highlighted in the research studies by the CAB Task Force on Cultural Diversity.

1242 First a brief work, if I may, on the CAB Task Force report since this is the first time we are appearing before you following the release of this report, and since the issues addressed are central to whether this transfer of ownership is a good thing.

1243 We comment the Commission for the directive to the CAB which resulted in the report. It is a long overdue initiative. We now have a comprehensive report that has taken stock of Canadian programming.

1244 While the methodology of the study was sound, it was not in-depth enough in that in its research on drama it did not sufficiently separate the difference between minor and leading roles played by minorities on television, thus giving us a far rosier picture than is really the case. The minimal presence of minorities in key roles was also not highlighted.

1245 Our observation is that there is nowhere near enough dramatic and documentary programming that reflects the real Canada, not in terms of stories, not in terms of the personnel in charge, producers, directors and writers, nor the actors on-screen.

1246 We are seeing that even in cases where broadcasters are commissioning specifically designated diversity programming, many are not commissioning racial minority producers, directors and writers. This is unacceptable.

1247 The Task Force report has rightly identified in its Best Practices section, Area No. 10, the need to address programming, acquired independent and in-house production. We ask that for the stations in question in this application and all other conventional and specialty networks, that this issue be closely examined on an ongoing basis.

1248 I will say that the recommendation 7.1 is vague when it says:

"A television specialty or pay broadcaster will commit to the extent possible to acquiring, commissioning and producing in-house programming that fulfils its commitment to diversity production." (As read)

1249 How do you know that you have been successful unless you set targets and keep track?

1250 Further, it is accepted in all industries that measurable goals and reporting systems are essential for accountability to shareholders and all stakeholders.

1251 Recommendation 7.2 is also useful in that it asks broadcasters to develop and implement producer guidelines that will advance diversity objectives. A good idea. In fact, a great idea. We look forward to seeing these in the next annual reports from all networks.

1252 We urge the Commission to ensure that the new stations that CHUM acquires as a result of this transaction maintain a high degree of diversity commitment in regard to management, including presence among the senior management of the new stations, production, commission work, on-air and off-air presence.

1253 With a growing proportion of ethnic and visible minorities and aboriginal peoples in Winnipeg, Edmonton and Calgary, it is vital that these stations increase considerably upon Craig's record.

1254 The word on the street, fairly or unfairly, is that while A-Channel began with a high degree of diversity, it has not maintained that initial promise.

1255 A review of the Web sites regarding on-air journalists in their western stations shows no visible minority presence in Edmonton and Winnipeg and only two out of 15 in Calgary, not at all reflective of the cities that they serve.

1256 It is important that CHUM increases the diversity aspects considerably. They have the record for being able to do this well in Toronto and Vancouver and we expect them to be successful here.

1257 While CHUM has an impressive prior record, as with all broadcasters, we ask that the Commission be clear and require broadcasters to make annual reports on the manner in which they implement diversity.

1258 We understand that CHUM will take on all staff currently at A-Channel stations, but we urge that they commit to a three-year target, by which time they will reflect the diversity of the markets in regard to visible minority and aboriginal representation in their news and non-news programming.

1259 We ask that you, and in turn the public, receive clear information on how CHUM will reflect diversity above and beyond the benefits package, in other word, in the normal course of business.

1260 With regards to the benefits package, I believe that they have decided to fund an impressive range of projects. Just for the record, the CDPA is not a recipient.

1261 As a matter of policy, I would ask that the Commission require broadcasters to report regularly on measurable progress these packages make, something that CHUM has indicated a willingness to do, in a deficiency letter dated June 21, 2004.

1262 The purpose of the 10 per cent requirement for benefits is to benefit the broadcasting system and the Commission has a duty to ensure that this and all other benefits packages of recent years are actually proving useful. I would urge you to review and analyze all packages of the last seven years, including the famous BCE/CTV package, and publish the results.

1263 One comment with regard to Toronto One, which was Craig's flagship when it came to reflecting diversity in current affairs and drama and is part of this overall transfer. We have already expressed our concerns to the Commission to the effect that following the announcements of the sale, a lot of the obligations were dropped in terms of on-air personnel and more notably in terms of commissioning production in Toronto that reflects cultural diversity in that city. This is, of course, clearly unacceptable.

1264 We will make these comments in another proceeding in more detail but as long as a station is operating under a licence, whether it is in Edmonton, Winnipeg or Toronto, its conditions of licence must be honoured on an ongoing basis. It is important that the Commission ensure that this is on a day-to-day basis for all the licensees that were held by Craig, including the ones we are discussing today. As a rule, if a licensee cannot meets its requirements, it should cease to operate and turn in its licence.

1265 I do want to flag this matter as a serious policy issue that requires the Commission's attention for future transfers of ownership. Even if the owner is getting out of the broadcasting system completely, you could authorize perhaps some kind of a fine or reduction in price if conditions are ignored. The credibility of the entire licensing process of the CRTC is at stake here.

1266 There are several other aspects of this application that I would like to comment on in detail but let me simply say in closing that the following are worthwhile:

1267 - a western-based development office;

1268 - eight hours of priority programming by this new network;

1269 - a commitment to 75 per cent independent production;

1270 - working with ethnic broadcasters;

1271 - script and concept development;

1272 - new cross-cultural programming, which is $2.6 million, I believe;

1273 - the CFTPA Cultural Diversity Mentorship Program, which the CDPA would like to partner with the CFTPA in this instance;

1274 - the AMPIA Cultural Diversity Award;

1275 - and assistance to the Disability Film Festival.

1276 CHUM's stated philosophy outlined in this application is very laudable: to ensure high-quality local programming and to reflect the multicultural, multi-racial and multilingual reality of Canada. They have done it in Toronto with flare and panache and we wish them all success in their new ventures.

1277 These are my comments for now, Members of the Commission, and thank you for the opportunity to address the Commission at this point. I would be happy to address any questions you may have --

1278 THE CHAIRPERSON: Thank you.

1279 MR. DESILVA:  -- after perhaps I have found a clean glass where I could get some water.

1280 THE CHAIRPERSON: Commissioner Wylie.

1281 COMMISSIONER WYLIE: Good afternoon, Mr. Desilva. You are a new association?

1282 MR. DESILVA: Yes, we are.

1283 COMMISSIONER WYLIE: But you seem to be aware of the Commission's efforts in the last two years, along with the CAB and broadcasters, to advance this cause of diversity in broadcasting.

1284 MR. DESILVA: I am very aware of it, Madam Wylie, and...

1285 COMMISSIONER WYLIE: And have you had the opportunity or attempted to have a greater input into this whole exercise?

1286 MR. DESILVA: As a matter of fact, yes. I have had the opportunity through the process of the CAB Task Force hearings to be interviewed on several occasions by both the research organization, I believe Solutions Research, that did the research for the CAB Task Force and then to be part of a round table discussion that was a follow-up to the initial research that was done prior to the submission of the report. So I have been tracking the process fairly carefully and I have been pleased to have some input into it.

1287 COMMISSIONER WYLIE: This would be in the more formal processes but now that you have this association formed, have you established links or liaisons with the broadcasters themselves?

1288 MR. DESILVA: Yes. We are in the process of doing that. We have done a considerable amount of work given the short time we have been in existence.

1289 I should say that the members of the CDPA are all people who have been very active in the film and television industry, Mr. Adetyi for one, Inner City Films; my own involvement with cultural diversity projects through the CBC, through the "Inside Story" series, through a series most recently that is well-known to the Commission, I think, particularly to some of the people who have been tracking cultural diversity issues. Mr. Dalfen has made comments about our series called "Lord Have Mercy," which was initiated while I was at Vision TV.

1290 So to answer your question, we have had contact with the CBC, with CHUM, with CTV, Global, and we participated very at the Innoversity Conference that was recently held in Toronto.

1291 COMMISSIONER WYLIE: So now you have an organization to do it --

1292 MR. DESILVA: Right.

1293 COMMISSIONER WYLIE:  -- in a more organized way? Before, it was one-on-one, producers with the broadcasters?

1294 MR. DESILVA: Quite correct.

1295 COMMISSIONER WYLIE: So it should advance this whole issue. You advocate reports to the Commission. You are aware that we are requiring at the moment reporting, and of course, when you mention item 10 and item 7, et cetera, you are talking about the report?

1296 MR. DESILVA: Yes, that is correct.

1297 COMMISSIONER WYLIE: So the reporting mechanisms, of course, you could make recommendations to the CAB as well as to how it can be improved to advance this cause more efficiently.

1298 MR. DESILVA: Thank you. I appreciate that suggestion.

1299 COMMISSIONER WYLIE: The more associations and pressure points out there with the broadcasters, the better, so that we don't have to impose conditions of licence but that people learn how to look at how to improve the broadcasting system for all Canadians.

1300 Well, we thank you...

1301 MR. DESILVA: Thank you. I hear you loud and clear, and if I just may say that the reason I mentioned this in this report was that one of the suggestions, I believe, in the CAB report was that broadcasters not be required to provide annual reporting, and so I think we have made a special reference to this in our submission today to say that we are not in support of that, that we believe that regular reporting is essential to the future development of cultural diversity in broadcasting.

1302 COMMISSIONER WYLIE: Well, we certainly appreciate associations that will help move forward issues that are of interest to us as well, so we thank you for your involvement.

1303 MR. DESILVA: Thank you.

1304 THE CHAIRPERSON: Thank you very much, Mr. Desilva.

1305 MR. DESILVA: Thank you.

1306 THE CHAIRPERSON: Mr. Secretary.

1307 THE SECRETARY: Thank you, Mr. Chairman.

1308 I will now call, again, on the Documentary Organisation of Canada, Mr. Bart Simpson.

--- No response / Aucune réponse

1309 THE SECRETARY: Mr. Chairman, this completes the list of appearing intervenors.

1310 We will now ask CHUM to respond to the interventions at this time.

1311 THE CHAIRPERSON: Thank you.

REPLY / RÉPLIQUE

1312 MR. SWITZER: Thank you, Mr. Secretary. Thank you, Mr. Chair.

1313 Based on our full discussion yesterday and the comments we have heard this morning with intervenors, with one small exception, which I would like to raise now, we believe our written reply to intervenors is appropriate.

1314 The one comment we would like to make and must make, based on allegations made this morning by one intervenor who suggested and used the word "abandonment" several times, we feel obliged to respond and confirm for the record that CHUM is completely living up to its conditions of licence in southwestern Ontario and in Victoria, particularly in terms of our service to London, Wingham, Windsor and Victoria. Those suggestions made this morning were troubling to us.

1315 We are meeting our -- completely meeting our conditions of licence in Wingham and in Victoria are significantly exceeding our conditions of licence by approximately an hour a week and in every other area connected to our licence. Just for the record, we felt obliged to make that response.

1316 With that comment, Mr. Chair, we believe our responses to intervenors are complete and thank you for the time. If and when it is appropriate, with your blessing, perhaps we might have the opportunity for some very brief final comments, but at your option. Thank you, sir.

1317 THE CHAIRPERSON: Right, by all means. The only issue that perhaps your written reply didn't address, that I noted, was the comment made just now by Mr. Desilva -- and Mr. Craig is here as well -- in respect of the on-screen presence of visible minorities in A-Channel in Alberta. You didn't address that -- I don't think it was addressed in their written intervention but I wonder whether you have a comment in response to that.

1318 MR. SWITZER: Mr. Craig may want to comment as well.

1319 We thank Paul Desilva for his constructive comments and for his acknowledgement of the good work we are doing in many markets. He has challenged us to improve the performance that he believes exists in the existing western stations and I want to confirm that it is absolutely our intent and commitment to continue to do what we are doing elsewhere and to improve on the record that exists with the western Craig stations.

1320 THE CHAIRPERSON: Do you have a comment, Mr. Craig?

1321 MR. CRAIG: We stand by our record in terms of diversity on our stations. I heard Mr. Desilva's comments today. I think that over the last twelve months it has been very difficult for us to retain staff and attract staff. So if there have been any reductions in our numbers, that is probably why.

1322 THE CHAIRPERSON: Thank you.

1323 I think I would be remiss in not stating at this point that the Commission commends the Craig family for its many years of contribution to Canadian broadcasting. It is a shame to see the family disappear at this time and hopefully there may be interest in your returning in another form at some point in the future.

1324 I thought I would state that on my behalf and that of my colleagues.

1325 MR. CRAIG: Thank you very much.

1326 THE CHAIRPERSON: With those remarks, I think those are our questions and if you do have any final remarks that you would like to make, Mr. Switzer, please go ahead.

1327 MR. SWITZER: Drew has just suggested to me he thinks he is fine. I had thought, as a courtesy, an opportunity, but if Drew's fine -- Mr. Chairman, Vice-Chairs, thank you very much for a full and complete discussion of this important file.

1328 THE CHAIRPERSON: Thank you.

1329 Mr. Secretary.

1330 THE SECRETARY: Thank you, Mr. Chairman.

1331 That does complete the agenda for this public hearing.

1332 THE CHAIRPERSON: Before closing, I want to take this opportunity to commend our very hard-working staff. Their briefings were impeccable, their work tireless. I want to single out Mr. Ramsay and his team for their work on this and the hearing that started on Tuesday, as well as other members of the staff in the Broadcasting Directorate and Legal Branch, and last but not least, our redoubtable secretary who always keeps the trains running with efficiency and good cheer.

1333 Thank you very kindly and thank you all. This hearing is now adjourned.

--- Whereupon the hearing concluded at 1215 /

L'audience se termine à 1215

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