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However, the aforementioned publication is the recorded verbatim transcript and, as such, is transcribed in either of the official languages, depending on the language spoken by the participant at the hearing.
TRANSCRIPT OF PROCEEDINGS BEFORE
THE CANADIAN RADIO‑TELEVISION AND
TELECOMMUNICATIONS COMMISSION
TRANSCRIPTION DES AUDIENCES DEVANT
LE CONSEIL DE LA RADIODIFFUSION
ET DES TÉLÉCOMMUNICATIONS CANADIENNES
SUBJECT / SUJET:
Proceeding on the Canadian Television Fund (CTF)
Task Force Report /
Instance concernant le rapport du Groupe de travail
du Fonds canadien de télévision (CTF)
HELD AT: TENUE À:
Conference Centre Centre de conférences
Outaouais Room Salle Outaouais
140 Promenade du Portage 140, Promenade du Portage
Gatineau, Quebec Gatineau (Québec)
February 7, 2008 Le 7 février 2008
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.
Canadian Radio‑television and
Telecommunications Commission
Conseil de la radiodiffusion et des
télécommunications canadiennes
Transcript / Transcription
Proceeding on the Canadian Television Fund (CTF)
Task Force Report /
Instance concernant le rapport du Groupe de travail
du Fonds canadien de télévision (CTF)
BEFORE / DEVANT:
Rita Cugini Chairperson / Présidente
Michel Arpin Commissioner / Conseiller
Michel Morin Commissioner / Conseiller
ALSO PRESENT / AUSSI PRÉSENTS:
Jade Roy Secretary / Secretaire
Shirley Ann Farley Hearing Manager /
Gérante de l'audience
Shari Faisher Legal Counsel /
Bernard Montigny Conseillers juridiques
HELD AT: TENUE À:
Conference Centre Centre de conférences
Outaouais Room Salle Outaouais
140 Promenade du Portage 140, Promenade du Portage
Gatineau, Quebec Gatineau (Québec)
February 7, 2008 Le 7 février 2008
- iv -
TABLE DES MATIÈRES / TABLE OF CONTENTS
PAGE / PARA
PRESENTATION BY / PRÉSENTATION PAR:
Shaw Communications 840 / 4101
CanWest MediaWorks 944 / 4636
Ryan Sutherland 983 / 4842
Comweb Group 1001 / 4958
Bell Broadcast and New Media Fund 1018 / 5066
Shaw Rocket Fund 1030 / 5112
Keith Mahar 1058 / 5236
Sanderson Layng 1068 / 5296
Aaron Goldman 1075 / 5326
Gatineau, Quebec / Gatineau (Québec)
‑‑‑ Upon commencing on Thursday, February 7, 2008
at 0901 / L'audience débute le jeudi 7 février 2008
à 0901
LISTNUM 1 \l 1 \s 40974097 THE SECRETARY: Please take a seat.
LISTNUM 1 \l 14098 We will now hear the presentation from Shaw Communications.
LISTNUM 1 \l 14099 Please introduce yourself and your colleagues and you will then have 15 minutes for your presentation.
LISTNUM 1 \l 14100 Thank you.
PRESENTATION / PRÉSENTATION
LISTNUM 1 \l 14101 MR. STEIN: Thank you.
LISTNUM 1 \l 14102 Madam Chair and Commissioners, I am Ken Stein, Sr. Vice‑President of Regulatory and Corporate Affairs, Shaw Communications.
LISTNUM 1 \l 14103 With me today on my right is Michael Ferras, Vice‑President, Regulatory Affairs for Shaw, Cynthia Rathwell on my immediate left is Vice‑President, Regulatory Affairs and Programming for Star Choice and Dean Shaikh, who is the Director of Regulatory Affairs on my far left with Shaw Communications.
LISTNUM 1 \l 14104 Let me say at the outset that Shaw is strongly committed to strengthening and improving the Canadian broadcasting and communication systems.
LISTNUM 1 \l 14105 We have over 3.3‑million customers who appreciate our commitment to service, to providing quality programming and to choice. We have invested billions of dollars in our systems, offering people across Canada the best and newest advantages of cable, satellite, Internet and telecommunications technology.
LISTNUM 1 \l 14106 We employ over 9,000 people who, as you know, are proud and loyal employees.
LISTNUM 1 \l 14107 We do all this in a very competitive environment, where our customers have a wide and growing range of choices to meet their entertainment, information, communications and broadcast needs.
LISTNUM 1 \l 14108 Now, I would like to outline our views of the Canadian Television Fund.
LISTNUM 1 \l 14109 It is well known that Shaw has fundamental problems with the CTF, its performance, its governance and how it has spent $2.5‑billion. We believe that the CTF is a failure.
LISTNUM 1 \l 14110 The process to address the failure of the CTF has taken much too long. This year alone another $270‑million, including $60‑million from Shaw cable and satellite subscribers has been wasted.
LISTNUM 1 \l 14111 Efforts to try to fix the CTF are doomed and will only delay our progress towards a goal of building a strong Canadian production industry.
LISTNUM 1 \l 14112 Let us deal with three irrefutable facts. The CTF does not deliver programs that Canadians watch. Fact No. 2, the CTF has not leveraged increased spending on Canadian programming. And, fact No. 3, the CTF and the broader program financing framework has not created a viable production industry.
LISTNUM 1 \l 14113 Cynthia.
LISTNUM 1 \l 14114 MS RATHWELL: Thank you.
LISTNUM 1 \l 14115 Fact No. 1, the CTF does not deliver programs that Canadians watch.
LISTNUM 1 \l 14116 We have heard a lot of claims this week that CTF‑funded Canadian programming is widely watched. The facts do not support the claims.
LISTNUM 1 \l 14117 Despite the CTF's infusion of over $2.5‑billion into Canadian independent productions since 1996, viewing to non‑Canadian programming keeps growing. As the CTF itself acknowledges, viewing to foreign programming in 2005 to 2006 has increased in all the CTF‑supported genres when compared against the previous year.
LISTNUM 1 \l 14118 With respect to English language drama programming, a review of the CTF's annual report also shows that it has failed to produce programming that Canadians want to watch. It tells us that non‑Canadian shows capture a whopping 83 per cent of all English language drama viewing, that Canadian English language dramas that are not funded by the CTF have a 13 per cent viewing share and a mere four per cent of English language drama viewing is to CTF‑funded productions.
LISTNUM 1 \l 14119 Yes, that's right, only four per cent.
LISTNUM 1 \l 14120 We keep hearing about CTF's success stories. Actually BBM viewing data for English Canada tells a very different story. We think it's very telling that the CTF gets excited about the few occasions when a CTF‑funded CBC show actually cracks the top 30 or when a CTF‑funded private broadcaster's show makes it into the top 100. These are rare events.
LISTNUM 1 \l 14121 Dean.
LISTNUM 1 \l 14122 MR. SHAIKH: Thank you, Cynthia.
LISTNUM 1 \l 14123 Fact No. 2, the CTF has not leveraged more spending on Canadian programming.
LISTNUM 1 \l 14124 The vast majority of cable and satellite CTF contributions go to the licence fee program. This program is meant to provide a top‑up of licence fees to producers but, as we have heard, it is not really a top‑up, it is a way for private broadcasters to reduce the amount of money that they contribute towards licence fees. In this way, private broadcasters use CTF money to subsidize their Canadian content obligations.
LISTNUM 1 \l 14125 At the same time, Canadian broadcasters have devoted an increasing share of their program expenditures to U.S. shows. The numbers confirm this.
Private broadcasters' spending on Canadian programming as a proportion of their total program expenditures has actually declined from 55‑cents per programming dollar in 2000 to only 52‑cents in 2006.
LISTNUM 1 \l 14126 If the revenue share that private broadcasters allocated to Canadian programming had stayed where it was in the year 2000, $300‑million more would have been spent on Canadian content over the period from 2000 to 2006.
LISTNUM 1 \l 14127 So, perversely, cable and satellite customers' contributions which were supposed to increase Canadian programming expenditures actually allow private broadcasters to put a bigger share of their money toward buying U.S. programming than to buying Canadian programs.
LISTNUM 1 \l 14128 Mike.
LISTNUM 1 \l 14129 MR. FERRAS: Fact No. 3, the CTF and the broader policy framework have failed to create a viable Canadian production industry.
LISTNUM 1 \l 14130 Producers and creators say that without the CTF there will be no Canadian production industry, but the reality is there is no industry now. As one MP said, it's a house of cards.
LISTNUM 1 \l 14131 Building a viable programming industry is critical to Canada's future as a knowledge‑based economy. Last June the Conference Board awarded Canada a "D" in innovation, 14th among 17 OECD countries examined. They called this woefully inadequate.
LISTNUM 1 \l 14132 As the Conference Board recognized, innovation is central to Canada's competitiveness and sustainable prosperity in the global digital marketplace.
LISTNUM 1 \l 14133 Our success will require innovation, investment and responding to the demands of consumers, not subsidies, bureaucratic funding criteria and market distortions. It also requires strong companies and strong industries that do not require ongoing institutionalized subsidies.
LISTNUM 1 \l 14134 Originally federal and provincial tax credits were intended to build strong production companies, but the credits were instead diverted to financing one‑off projects along with the CTF and other private funds.
LISTNUM 1 \l 14135 So today, as a result of Telefilm and CTF policies, producers use subsidies and incentives not to build sustainable businesses but to cover an incredible 70 per cent of the financing of CTF‑funded drama.
LISTNUM 1 \l 14136 In total Canada's huge and complex system of subsidies for television amounts to about $1‑billion each and every year, $650‑million a year from federal and provincial tax credits, $250‑million from the CTF and the remainder from grants and private funds and Canadians get no return for this massive subsidy.
LISTNUM 1 \l 14137 The CTF talks about a five per cent return, but hold on, they don't actually mean you get your investment back. If the CTF puts out one‑million, it gets back 50,000 total, that's it, the one‑million is gone.
LISTNUM 1 \l 14138 This whole approach is a failure that will continue to drain our creative art budgets and affect our tax expenditures on arts and culture as well as our capacity to develop real viable businesses that deliver programs that people will actually be interested in watching.
LISTNUM 1 \l 14139 The only way Canada will have a meaningful voice in television production is to build a real industry with innovative, high quality and competitive product and sustainable employment.
LISTNUM 1 \l 14140 Ken.
LISTNUM 1 \l 14141 MR. STEIN: In closing, let us be absolutely clear about one thing. We at Shaw are not against Canadian producers or content. Shaw has pressed for change to Canadian program financing because we want more, not less, high quality Canadian content. We want Canadian programs that Canadians will actually watch.
LISTNUM 1 \l 14142 Everything that we do at Shaw is geared to delivering value to our customers. That is fundamental to our success in an era of choice and competition. It is also essential for the Canadian broadcasting system. If customers do not like the Canadian content they receive, their loyalty to us and the broadcasting system will be eroded. Customers do not have to look far to find lots of choice outside of our system.
LISTNUM 1 \l 14143 It is clear to us that the program financing system in Canada needs to change radically if Canadian programming is to become relevant and competitive. It is also clear to us that this process is going nowhere. It has been dragging on for a year and we have heard very few creative proposals for change.
LISTNUM 1 \l 14144 We had hoped that other stakeholders would exhibit a willingness to create a better model and to build an industry. They have not.
LISTNUM 1 \l 14145 From the beginning it has been clear that funding recipients were only interested in keeping the current system going and the money flowing. They were determined to say and do anything to marginalize the views of cable and satellite companies that real change was required. This hearing has confirmed our suspicions.
LISTNUM 1 \l 14146 Several stakeholders, including CBC, stated that BDUs have no right to determine how their customers' money is spent. This is in spite of our massive financial contribution to their industry.
LISTNUM 1 \l 14147 They also said the cable and satellite contributions are just like taxes and that paying them does not entitle the taxpayer to determine how the money is used. For once the CBC shares at least part of Shaw's viewpoint, CTF levies are just a tax. It is consumers' money and they deserve to get it back.
LISTNUM 1 \l 14148 So, we think the best course of action is simply to remove the contributions of satellite and cable customers from the CTF and give the money, all of it, back to those who paid for it in the first place, Canadian viewers.
LISTNUM 1 \l 14149 Ultimately, with all the myriad of choices available to Canadians, we must put consumers first if we are to succeed at creating a strong and sustainable domestic production industry.
LISTNUM 1 \l 14150 On this basis we recommend the following action plan. Consists of seven actions.
LISTNUM 1 \l 14151 First, take a whole new approach to building a Canadian program production industry that focuses on giving consumers programming that they want to watch.
LISTNUM 1 \l 14152 Two, base the new approach to Canadian program production on solid investment principles that encourage private sector investment.
LISTNUM 1 \l 14153 Third, eliminate the five per cent tax on Canadian cable and satellite customers.
LISTNUM 1 \l 14154 Four, require Canadian broadcasters to make Canadian programming their No. 1 priority in prime time.
LISTNUM 1 \l 14155 Five, meet government policy objectives using government funding and appropriate government agencies.
LISTNUM 1 \l 14156 And, six, provide revenue‑generating opportunities on the community channel and video on‑demand services to support Canadian programming on these services.
LISTNUM 1 \l 14157 And, finally, allow DTH services to offer a channel to support community expression throughout their markets.
LISTNUM 1 \l 14158 Thank you very much, Madam Chairperson. We're pleased to answer any questions you may have.
LISTNUM 1 \l 14159 THE CHAIRPERSON: Thank you, Mr. Stein and your colleagues for your participation this morning.
LISTNUM 1 \l 14160 I am sure that everyone in this room agrees that we all do have a common goal and that is to contribute and help to build a system, as you say, where Canadians will continue to have a wide and growing range of choices to meet their entertainment, information, communications and broadcast needs. That is a common goal of everyone in this room.
LISTNUM 1 \l 14161 You did speak about irrefutable facts and the Canadian broadcasting system currently has a number of irrefutable facts as well.
LISTNUM 1 \l 14162 We are in a 500‑channel universe, more than ‑‑ 500 plus channel universe and those are services that are available to Canadians, we won't even talk about unregulated media.
LISTNUM 1 \l 14163 We know that broadcasters are responsible for their schedules, certainly the CRTC doesn't get involved in what goes on the air, it's totally their responsibility.
LISTNUM 1 \l 14164 CTF‑funded programming, according to their submission, makes up only seven per cent of prime time of the four over‑the‑air English language broadcasters.
LISTNUM 1 \l 14165 Broadcasters spend time, money, and I would even say sweat equity on audience research, including focus groups.
LISTNUM 1 \l 14166 They spend time, money and sweat equity working with producers in the development stages.
LISTNUM 1 \l 14167 Do you really think that Global, because they are sitting in the room, is saying, "Gee, at 7:30 on Sunday night I am going to put `Da kink in My Hair' on because it's going to bomb"?
LISTNUM 1 \l 14168 Isn't it in the best interest of the broadcasters to ensure that everything they do is going to serve the needs of Canadians, and entertain them, and inform them, and keep them on the dial from one show to the next?
LISTNUM 1 \l 14169 Sometimes things just don't work, despite all of the audience research, despite all of the focus groups, despite the money, despite the sweat equity.
LISTNUM 1 \l 14170 MR. STEIN: Did you want me to answer that?
LISTNUM 1 \l 14171 THE CHAIRPERSON: Absolutely.
LISTNUM 1 \l 14172 MR. STEIN: I think that's a perception of the model that we don't think is correct. We believe that there should be Canadian programming in prime time, and that it is the responsibility of broadcasters to provide that by whatever means they can.
LISTNUM 1 \l 14173 That's what we believe, and for people to say that the audience and economics don't work, we say: Why doesn't it work?
LISTNUM 1 \l 14174 And we get answers like: There is not enough money in the system. It costs this much money to produce something that has the same quality as an "ER".
LISTNUM 1 \l 14175 And we say that, when we build our cable networks, we don't go out and say, "Hey, we don't have enough people in Hinton, Alberta to build the best cable network in the world," we do it.
LISTNUM 1 \l 14176 We step up to the plate and we make the investments that we need to make to ensure that Canadians get the best quality cable/satellite service, internet services, telephony services they can get, and we think the broadcasters have the same responsibility. Their responsibility is to do this.
LISTNUM 1 \l 14177 I think we have been trapped into a model of subsidy and regulation that has not achieved the goal in meeting audience requirements. I think that if we all just shook our heads and came up with a different view of it, we would find different answers to it.
LISTNUM 1 \l 14178 I cannot believe, in fact I find it insulting to think that, as a Canadian, we cannot produce a video product, in the English language, which is the major language, predominant around the world ‑‑ that we cannot produce that product ‑‑ that we aren't innovative enough, we aren't creative enough to produce that product and make it an outstanding success in Canada and around the world.
LISTNUM 1 \l 14179 I think that's a doable thing, and I think for us to say that we can't do that ‑‑ I don't accept that.
LISTNUM 1 \l 14180 THE CHAIRPERSON: Let me ask you this, Mr. Stein, because you say that you want to develop real, viable businesses that deliver programs that people will actually be interested in watching. How can you ensure that these will be programs that Canadians will actually be interested in watching?
LISTNUM 1 \l 14181 What elements will you include in this plan to make sure that everything that is produced will be programs that Canadians want to watch?
LISTNUM 1 \l 14182 MR. STEIN: I think, fundamentally, we believe that if you start treating the business as an opportunity to invest and to develop products, whether you are in the music business or you are in the television business, that is how you succeed in the marketplace, by developing products that consumers want.
LISTNUM 1 \l 14183 That is the trick in any business. There is no magic answer to it.
LISTNUM 1 \l 14184 But to presume that we will fail at it, I think, is the wrong presumption. I think there is enough of a desire in Canadians to have Canadian programs, to be able to watch Canadian programs, and to identify with them. They are very proud of the successes of Canadians when they reach international fame and attention, and I think we can do it.
LISTNUM 1 \l 14185 We have done it in other cultural areas, and I think we can do it in this area as well. I think it comes across by requiring people to do certain things to meet their responsibilities, and it also requires an investment approach.
LISTNUM 1 \l 14186 I think that part of the problem we have is because we are into a subsidy approach. We look at programming as a cost. We don't look at it as an opportunity to create a new business, we always talk about the costs of it ‑‑ the licence fees, the A, B and C costs, and the tax subsidies, and the financing.
LISTNUM 1 \l 14187 The experts in program production in Canada are the lawyers and the bankers, and I think that's wrong. I think that if we had more opportunities for creative people to be creative, to be supported by investors, and to take that approach, we would be better off.
LISTNUM 1 \l 14188 THE CHAIRPERSON: Again, like I said in my very first question, what I am looking for is a real, concrete plan to give us comfort when we walk away from here to say: You know what? The Shaw people really have a plan that is going to allow high‑quality Canadian production to occur in this country that will garner large audiences.
LISTNUM 1 \l 14189 Like I said, broadcasters currently use a number of methods. They use research, they use focus groups, they look at what has worked in other jurisdictions, and can it be adapted for the Canadian audience.
LISTNUM 1 \l 14190 I need a more concrete plan from you.
LISTNUM 1 \l 14191 MR. STEIN: I think, when you deal in a competitive environment, first of all, there is no certainty. That's why companies succeed and companies don't succeed.
LISTNUM 1 \l 14192 THE CHAIRPERSON: And that's why programs succeed and programs don't succeed.
LISTNUM 1 \l 14193 MR. STEIN: Exactly.
LISTNUM 1 \l 14194 But the one thing we do know is, if you just do things on a cost basis, and on an ongoing basis, you don't succeed.
LISTNUM 1 \l 14195 We always are faced, in areas where there have been traditional losers, with basically saying, "Well, it can't be done any other way," and we think that's wrong.
LISTNUM 1 \l 14196 We have laid out an action plan. People may think it's a drastic action plan, but we think drastic action is called for. We think that giving the money back to customers, giving customers more choice, streamlining the system and the obligations in the system, is a major part of that.
LISTNUM 1 \l 14197 The second part of it is to say, "Okay, let's pull together a view of how to make this into an industry," not how we are going to fund particular projects.
LISTNUM 1 \l 14198 When I was in government, we used to always get preoccupied by the fact that people were always dealing with today's issue rather than thinking about what the overall ‑‑ Where are we going? Where are we going to end up?
LISTNUM 1 \l 14199 It's a great failure that we get caught up in the particular issue that is facing us. So you get involved in all of these transactions.
LISTNUM 1 \l 14200 The best policies and the best direction comes when you have a plan that says: Here is where we want to get to, so let's see how we get there. Let's work this out in how we get there.
LISTNUM 1 \l 14201 I think the Commission started on that process when Mr. Shaw and I met with the Chairman and the Vice‑Chairman. That was a start to trying to find out how to solve this process. But I don't think it is getting anywhere because everybody is trying to defend the status quo.
LISTNUM 1 \l 14202 We are saying: How can you defend a status quo that depends on a $2 billion subsidy every year? That is not acceptable to Canadians.
LISTNUM 1 \l 14203 How do you accept a status quo where you get no return on that investment? That is not acceptable.
LISTNUM 1 \l 14204 We think that it should be possible, as it is in any other area of activity of human life, to create value; and to create value out of culture is, I think, a very important objective, and we think that can be done.
LISTNUM 1 \l 14205 But I think it starts with putting the consumer first.
LISTNUM 1 \l 14206 THE CHAIRPERSON: Points 1, 2 and 3 of your Action Plan are clear. You obviously ‑‑ and I am not saying this facetiously, I do apologize, but you obviously want us to repeal the requirement that cable and satellite companies continue to contribute 5 percent.
LISTNUM 1 \l 14207 MR. STEIN: Yes.
LISTNUM 1 \l 14208 THE CHAIRPERSON: Okay.
LISTNUM 1 \l 14209 "Require Canadian broadcasters to make Canadian programming their number one priority in prime time."
LISTNUM 1 \l 14210 What more do you need the Commission to do in order to fulfil that objective?
LISTNUM 1 \l 14211 MR. STEIN: We have rules, as cable distributors and satellite distributors, that we have to carry ‑‑ we have carriage rules, linkage rules, packaging rules ‑‑ we have all of these rules that require us to carry services.
LISTNUM 1 \l 14212 We are required to make sure that we are predominantly Canadian, that the services we offer are predominantly Canadian. So we think that the same requirement should be applied to broadcasters.
LISTNUM 1 \l 14213 We note that when the financial parts of the papers comment on the competitiveness of CTV and Global ‑‑ and I am talking about the English‑language market ‑‑ they say: CTV has a better U.S. lineup than Global. Or, is Global going to get back into the game with a better U.S. lineup?
LISTNUM 1 \l 14214 They never ever talk about the Canadian shows as part of the competitive lineup, and we think that is discouraging. We think that we are required, as distributors, to be predominantly Canadian in what we offer to our customers, and we think the same should apply to the licensees who have broadcast licences.
LISTNUM 1 \l 14215 THE CHAIRPERSON: Mr. Stein, I know that you know the rules. I know that you know that OTA broadcasters are required to broadcast 60 percent Canadian content overall, and 50 percent in prime time. I know that you know that there is a requirement to do priority programming in the heart of prime time.
LISTNUM 1 \l 14216 MR. STEIN: Yes.
LISTNUM 1 \l 14217 THE CHAIRPERSON: How much more of a priority can we say to the broadcasters that Canadian content has to be ‑‑
LISTNUM 1 \l 14218 MR. STEIN: I think what we look at is, when you look at the CTF programs, the funded programs, and where they are on the dial, it isn't acceptable.
LISTNUM 1 \l 14219 I am saying that if you explored that with people and said, "How do we do it," you would have a better chance of success than not. That's all I am saying.
LISTNUM 1 \l 14220 THE CHAIRPERSON: I think your Points 6 and 7 are best dealt with at the BDU specialty hearing coming up in April.
LISTNUM 1 \l 14221 MR. STEIN: We just like to argue them at every opportunity.
‑‑‑ Laughter / Rires
LISTNUM 1 \l 14222 THE CHAIRPERSON: I am pretty sure you are going to be there.
LISTNUM 1 \l 14223 Should the Commission decide not to repeal the requirement that BDU and cable need to make a contribution, is Shaw willing to start up its own fund with that money?
LISTNUM 1 \l 14224 MR. STEIN: No. We believe that our best ability to invest in programming would be through our own means. We think, in the same way that broadcasters have made arguments to have control over their investments in programming, that our view would be to be involved in those activities, in terms of supporting Shaw TV, supporting a channel for community expression on the satellite services.
LISTNUM 1 \l 14225 We think that would be the appropriate way to do it.
LISTNUM 1 \l 14226 It goes down to why we separated the two companies, Shaw and Corus. We found that, to meet the objectives of developing great children's programming and other kinds of entertainment programming, that wasn't something that we felt ‑‑
LISTNUM 1 \l 14227 We felt that would be better done by an entity that was on its own, focused on delivering those services.
LISTNUM 1 \l 14228 We think that the money within a corporation should be used to invest in the kinds of things it does best, and that's how we would proceed. We don't believe in funds to that extent.
LISTNUM 1 \l 14229 Cynthia would like to say something.
LISTNUM 1 \l 14230 MS RATHWELL: To add to that, slightly, I think we would like to emphasize the contributions that we already make, which include innovation, providing a predominance of Canadian services to Canadian viewers, expanding the market for digital services and the accessibility of the whole broadcasting system to subscribers across the country, which was really driven largely by DTH at the outset.
LISTNUM 1 \l 14231 Also, the programming affiliation fees that we pay to programmers are already significant.
LISTNUM 1 \l 14232 So, I think, from our perspective, we are already making a very, very solid and admirable contribution to the Canadian broadcasting system. Where we get a bit tripped up is us paying 5 percent into a fund, when broadcasters have failed to use the fund to increase their own proportionate expenditure to Canadian programming.
LISTNUM 1 \l 14233 As Dean remarked earlier this morning, we have seen a trend over the last five or six years, where they are actually spending more and more of their programming budgets on American programming.
LISTNUM 1 \l 14234 So while on the one hand it may sound superficially unreasonable that we don't want to put 5 percent into a fund, if you look at our fundamental reasons for it, which are that we are already making an incredibly substantial contribution, and broadcasters, on the other hand, don't really seem to be pulling their weight, then perhaps that casts a bit of a different light on our response.
LISTNUM 1 \l 14235 MR. STEIN: If I could just be specific about that ‑‑ and I should have made this comment earlier ‑‑ this year we are going to be investing about $650 million in our capabilities to offer Canadians Canadian services. That means going digital, moving at more hi‑speed internet services for Canadians, competing with services that ‑‑ as you point out, new media services that we have to compete with.
LISTNUM 1 \l 14236 Every day we are making a huge investment in terms of allowing Canadians to receive those services, and we have to step up to the plate. It is a huge requirement on the company to be able to do this, and that's what our job is. That's what our responsibility is, to be able to roll out those services to Canadians, and we are proud of the fact that ‑‑
LISTNUM 1 \l 14237 I have regulatory people who work for me across the country, and we go to every community we serve. Western Canada is an area of smaller communities, and we go to all of those communities, and there is not a week goes by that people don't come back and say: This community was really terrifically happy that we just put the new fibre nodes in and we rolled out high speed internet into this community. And you know, we are just so proud of that and they will talk about how involved we are in the community and how much they appreciate Shaw being there.
LISTNUM 1 \l 14238 So we may not get a lot of accolades in Ottawa but we sure as hell get them out there.
LISTNUM 1 \l 14239 THE CHAIRPERSON: My only ‑‑ well, one of the flaws that I see; one of the things I can't agree with and I'm going to take a little bit of a Von Finckenstein approach when I say one of the things I can't agree with ‑‑ I can't buy the argument that broadcasters simply don't care about 60 percent of their schedule and 50 percent of their primetime and that they don't invest in the kind of programming that is going to work for them and primarily for their audiences. They too make a sizeable investment in their plants, in converting them to digital, in high ‑‑ HD transmitters. For every cap X expense that the distribution industry has so too do broadcasters. And when you are talking about 50 percent of primetime it is absolutely in their best interests to ensure that that programming works.
LISTNUM 1 \l 14240 MR. STEIN: Well, first of all, they do care. We know that. We just say the way the system ‑‑ you know, a system sets up perverse incentives for people. You know if there is money on the table to take to do something one will do it. I mean, I think Mr. Fecan addressed that very well at the hearings that he attended recently. They do care.
LISTNUM 1 \l 14241 And there are shows, non‑CTF funded shows like Canadian Idol and Corner Gas that are excellent shows. Jim might not agree with me, but I think they are.
‑‑‑ Laughter / Rires
LISTNUM 1 \l 14242 THE CHAIRPERSON: You know what, Mr. Stein, it doesn't matter what you think, what I think or what Jim thinks.
LISTNUM 1 \l 14243 MR. STEIN: That's right, but well that's my point. That's my point. My point is that you have to get the audience and you have to get Canadians to support it.
LISTNUM 1 \l 14244 And we just think that the system itself is setup in a way that maybe it discourages broadcasters, I mean in terms of how they make their investments in programming, you know. And I think that that's what has to be addressed, is how do you turn it into a viable industry? Maybe there are rules and regulations they don't like. I'm sure they will and they have addressed them.
LISTNUM 1 \l 14245 So I think that it's not a question of their desire. It's a question of how the system is created and in a way that we aren't achieving ‑‑ and frankly, I don't think we are achieving the objectives set out in the Broadcasting Act in that sense. And I think that's ‑‑ it's got to be a wakeup call for the whole system.
LISTNUM 1 \l 14246 THE CHAIRPERSON: And anything that you heard over the last three days, either the Rogers proposal or the Astral proposal; nothing that you have heard gives you comfort that this can be fixed within the parameters?
LISTNUM 1 \l 14247 MR. STEIN: My conclusion over the last few days is that it's worse, that people are not willing to face up to the difficulties. They are not willing to face up to the fact that $2.5 billion has been spent without the objective being achieved. So I haven't heard ‑‑ I have heard more bad things than good things.
LISTNUM 1 \l 14248 Mike.
LISTNUM 1 \l 14249 MR. FERRAS: Just to follow Ken there, I think we are looking at this through the lens of the CTF and the $2.5 billion that has been spent. I mean, that's just a huge amount of money.
LISTNUM 1 \l 14250 I remember back when I think ‑‑ it's in my ‑‑ if I go back to my career, that when the CFDC was setup in 1968 it started out with $10 million to build a feature film industry and now we are talking about $2.5 billion and we just ‑‑ when you look at what's happening and the results through that lens, through the CTF, it's just not working because it's a subsidy model and it's flawed. It has not built an industry.
LISTNUM 1 \l 14251 It's not so much about intentions of a broadcaster or are they committed or not. I mean there is some debate about that. In fact, I think we heard this week from producers that some people would argue that the broadcaster's heart is not with Canadian programming; it's with trying to maximize audiences through maximizing simultaneous substitution opportunities.
LISTNUM 1 \l 14252 So I think our point is that the model will always be flawed as long as it's a subsidy model and $2.5 billion dollars has run through the system and we haven't got anywhere.
LISTNUM 1 \l 14253 THE CHAIRPERSON: Let me assure you, Mr. Ferras, that we are looking at this through the lens of Canadians.
LISTNUM 1 \l 14254 One final question or line of questioning; I have here a letter on Rogers letterhead that is on the public record. And it's a letter signed by Mr. Lind to Doug Barrett, the Chair of the Canadian Television Fund where he informs the CTF of the CCCE, the Canadian Coalition for Cultural Expression whose ‑‑ it's a new organization for the purpose of nominating cable broadcaster's distribution undertaking directors to the CTF.
LISTNUM 1 \l 14255 I see here that Jim Shaw was copied on this letter. Was Shaw Communications contacted and asked to join the CCCE?
LISTNUM 1 \l 14256 MR. STEIN: Yes, Jim Shaw did reply to that letter and we said no.
LISTNUM 1 \l 14257 THE CHAIRPERSON: Okay.
LISTNUM 1 \l 14258 Those are all my questions. My colleagues may have additional questions.
LISTNUM 1 \l 14259 Vice‑Chairman Arpin.
LISTNUM 1 \l 14260 COMMISSIONER ARPIN: I don't have that many but, Mr. Stein, you said that one of the aims of Shaw Communications is to give Canadians more choices. Well, what do you mean by more choices, more Canadian choices or more foreign choices?
LISTNUM 1 \l 14261 MR. STEIN: Well, we mean all. We feel very strongly that the system, the broadcasting system has always been based on giving Canadians access first as a priority to Canadian services and it has also been built on giving them access to all of the services that are available that they want to have access to.
LISTNUM 1 \l 14262 So when we talk about choice a good example would be ‑‑ and you know where we do differ with others is on digital. When digital services were launched we gave people the ability to pick one, two, five, 10 services. We got roundly criticized for it by the programmers because people felt that consumers weren't going to buy it that way but we had, you know, terrific success in moving our system to digital. I don't have the numbers right at hand but, you know, our penetration on high speed, on digital HDTV is quite high.
LISTNUM 1 \l 14263 So we are ‑‑ we want to offer our customers quality choices of Canadian services. We recognize that that's important. But you know, sometimes we get slapped down because we offer things like WHL hockey that nobody else is offering and we find a means to do it and then we get told that we can't use it, can't do it that way.
LISTNUM 1 \l 14264 So we are very interested in offering people choices and offering them Canadian services. So it's ‑‑ we don't think people should be limited in their choices. We think they should have access to anything they want, whether it's books, magazines or television services.
LISTNUM 1 \l 14265 COMMISSIONER ARPIN: Now, how do you think those Canadian services; small population, big piece of land, not that many households compared to other countries, how could they finance their operations and come up with some interesting material if everything is sold piecemeal?
LISTNUM 1 \l 14266 MR. STEIN: Well, we heard that cable industry. I remember in the late eighties we heard ‑‑ saying, "Well, you know, we can't serve all these communities. We can't get television up there". And I think when I joined Shaw we had about 500 employees or something, 600, and we now have 9,000.
LISTNUM 1 \l 14267 And I think part of our objective ‑‑ part of the reason that we were successful is we didn't accept that, that we basically said that we were going to offer services, the highest quality services to work wherever people are and we are going to be out there in the small communities and whether we do it by cable or whether we do it by satellite we are going to do it. We are going to build the fibre and we are going to go into those communities and we are going to offer the services.
LISTNUM 1 \l 14268 So we ‑‑ I mean, we think this ‑‑ maybe it's because we live in western Canada. We think that the wild, remote, spread‑out spaces are actually an economic advantage.
LISTNUM 1 \l 14269 COMMISSIONER ARPIN: But that being said ‑‑ well, you may have the benefit of satellite to develop but Shaw Cable per se doesn't cover all of Alberta and all of B.C. There still are two small communities where Telus is offering the service and where Shaw Cable has not yet ‑‑
LISTNUM 1 \l 14270 MR. STEIN: I will find out where those are. We will get there.
LISTNUM 1 \l 14271 COMMISSIONER ARPIN: Now, another line of interrogating, I think.
LISTNUM 1 \l 14272 At the beginning of your presentation you said that you have invested billions of dollars in your system offering people across Canada the best and newest advantage of cable, satellite; internet and telecommunications technology. Those ‑‑ the last two are ‑‑ I think good for you ‑‑ have not been regulated by the CRTC. The CRTC has let you and all the other players in the industry introduce the service and introduce the wares into the system.
LISTNUM 1 \l 14273 Isn't it a benefit for you that it's been done that way and then there ‑‑ couldn't there be a compensation somewhere for that benefit?
LISTNUM 1 \l 14274 MR. STEIN: Well, the ‑‑ I think first and foremost is that the requirements that are placed on the company in terms of capital investment creating jobs, if that's what you're referring to, that's part of what we want to do and what we want to grow at. Our basic issue is the constraints of the regulations in terms of the services we offer. We feel we step up to the plate in terms of making the investments.
LISTNUM 1 \l 14275 It's a very competitive environment. I mean, you know, we were the first cable company to support Mr. Bernier on it and the only one I think to support Mr. Bernier ‑‑ well, perhaps VidÚotron, but we supported Mr. Bernier in terms of the forbearance directive. And we basically said, okay, we are going to be competitive. We have to put the ‑‑ we are going to have to put the hundreds of millions of dollars out there to do it, to be able to offer telephony services and to be competitive with Telus but we are going to step up to the plate and do it.
LISTNUM 1 \l 14276 You know, one of the big issues we have is a lack of protection we get in the black market. You know, we have ‑‑ the government is not acting. There have been amendments in the Radio Communications Act. The black market is larger than Star Choice but nobody seems to care about that. So we have to compete with that all the time.
LISTNUM 1 \l 14277 We also do have competition over the air as the U.S. services move to high quality HDTV. There was an investor column the other day in the Globe and Mail that talked about how much money the person could save by going over the air as opposed to buying cable. So Canadians have all sorts of alternatives.
LISTNUM 1 \l 14278 In Winnipeg, you know, we are in a head‑to‑head fight with MTS. And I think Mr. Engelhart made the point the other day at Rogers and said, you know, back in the early nineties when all these structures and regulations were put in place, cable penetration getting close to 90 percent. Well, it's now 60 percent, you know.
LISTNUM 1 \l 14279 So it's ‑‑ in terms of what we have to do as a company each and everyday is we have to pour money out there and we have to offer our customers services and service that makes us number one in the marketplace. It's very competitive and we are very customer focused.
LISTNUM 1 \l 14280 COMMISSIONER ARPIN: Now, the last thing is a comment. I think you draw three different facts and you elaborated on them and obviously we are going to hear today and tomorrow the major English‑speaking broadcasters so they may have an opportunity to share on your views. And also we will hear back the CTF at the end of the hearing.
LISTNUM 1 \l 14281 But I appreciate that you laid them down as clearly as possible so that we have ‑‑ we could understand exactly what Shaw is trying to say because it used various levels of language so far, but now I think here it's ‑‑ well, it's well put and clear.
LISTNUM 1 \l 14282 Thank you very much.
LISTNUM 1 \l 14283 THE CHAIRPERSON: Except for one thing.
‑‑‑ Laughter / Rires
LISTNUM 1 \l 14284 THE CHAIRPERSON: When I asked you earlier if we decide to not eliminate the 5 percent tax, as you call it, "Would you setup your own fund?" you said "no." Does that mean if we continue to require the 5 percent tax you will not comply?
LISTNUM 1 \l 14285 MR. STEIN: We always comply.
LISTNUM 1 \l 14286 THE CHAIRPERSON: But it will be under protest?
LISTNUM 1 \l 14287 MR. STEIN: There is a variety of ways. We are looking at it.
LISTNUM 1 \l 14288 THE CHAIRPERSON: Okay. We will leave it at that.
LISTNUM 1 \l 14289 Thank you very much. We will take a 10‑minute break.
‑‑‑ Upon recessing at 0944 / Suspension à 0944
‑‑‑ Upon resuming at 0956 / Reprise à 0956
LISTNUM 1 \l 14290 LA SECRÉTAIRE : Nous entendrons maintenant la présentation de Quebecor Media. Vous avez 15 minutes pour présentation.
LISTNUM 1 \l 14291 Merci.
LISTNUM 1 \l 14292 M. PÉLADEAU : Bonjour, Madame la Présidente, Monsieur le Vice‑président, Monsieur le Conseiller et personnel du Conseil.
LISTNUM 1 \l 14293 Je m'appelle Pierre‑Karl Péladeau et je suis le Président et chef de la direction de Quebecor Media et de Quebecor.
LISTNUM 1 \l 14294 Permettez‑moi de vous présenter mes collègues et collaborateurs.
LISTNUM 1 \l 14295 À ma droite imméduate, Pierre Dion, Président et chef de la direction du Groupe TVA; Martin Picard, Directeur général, administration de la programmation, de TVA.
LISTNUM 1 \l 14296 Luc Lavoie, à ma gauche, Vice‑président exécutif de Quebecor; Pierre Lampron, Vice‑président, affaires institutionnelles; et Édouard Trépanier, Vice‑président, affaires réglementaires de Quebecor Media.
LISTNUM 1 \l 14297 Lorsqu'il a créé le Fonds de production de câblodistribution, le 10 février 1994, le Conseil a établi, et je cite l'Avis public CRTC 1994‑10 : « le meilleur moyen de stimuler la production canadienne serait de hausser les droits de diffusion, en contribuant à maintenir et à accroître la qualité des émissions et en attirant des investissements privés grâce à l'augmentation des recettes provenant des émissions canadiennes. »
LISTNUM 1 \l 14298 Ces objectifs de performance n'ont jamais été rencontrés de façon satisfaisante.
LISTNUM 1 \l 14299 L'histoire de ce fonds est marquée par de nombreuses crises qui ont abouti à un détournement significatif des objectifs initialement poursuivis, au profit des intérêts des membres de son conseil d'administration.
LISTNUM 1 \l 14300 En regard des objectifs de performance, le bilan est peu reluisant.
LISTNUM 1 \l 14301 Le fonds a englouti plus de 2,5 milliards dans une multitude de programmes qui, au Canada anglais, ont eu peu de succès.
LISTNUM 1 \l 14302 Malgré ces milliards de soutien public et privé, le marché canadien se caractérise par une domination croissante de la production américaine au Canada, une performance indigne d'un pays du G8 sur les marchés internationaux, ainsi qu'une décroissance marquée de l'investissement étranger dans la production canadienne.
LISTNUM 1 \l 14303 Sur le marché québécois, le Fonds canadien de télévision n'est pas en mesure de répondre aux besoins de la télévision généraliste privée et ignore les nouvelles plateformes de diffusion en pleine croissance.
LISTNUM 1 \l 14304 We have made this point in a thousand ways. We hope that this time it will be understood.
LISTNUM 1 \l 14305 We are filing the correspondence and documents we have produced since our decision on January 23, 2007 to suspend payments to the Canadian Television Fund.
LISTNUM 1 \l 14306 Alors, nous sommes pour une meilleure diffusion du contenu canadien.
LISTNUM 1 \l 14307 Vous constaterez qu'avec constance nous avons insisté sur notre engagement à soutenir le financement, la production, la diffusion et la promotion du contenu canadien et affirmé notre volonté de maintenir notre rôle de principal contributeur privé au financement de la production canadienne.
LISTNUM 1 \l 14308 Nous avons illustré le cul‑de‑sac dans lequel nous sommes avec le statut actuel du Fonds canadien, sa gouvernance et ses orientations.
LISTNUM 1 \l 14309 Le Fonds canadien est incapable de se rénover significativement et est impuissant à répondre à nos besoins.
LISTNUM 1 \l 14310 Il n'est pas en mesure, par exemple, de reconnaître la vidéo sur demande comme diffuseur, malgré que notre service génère actuellement plus d'un million de commandes par semaine.
LISTNUM 1 \l 14311 Nous avons apporté toutes les preuves et réuni toutes les informations financières disponibles pour démontrer que le principal diffuseur privé de langue française au Canada, le seul en mesure de soutenir significativement le financement de productions telles la dramatique et les émissions de variétés de qualité, ne pouvait plus continuer dans sa voie tout en satisfaisant aux exigences du Fonds canadien.
LISTNUM 1 \l 14312 Nous vous avons démontré les modèles de financement de certaines séries dramatiques, illustré que les revenus générés par l'antenne ne suffisaient pas à financer correctement les émissions en question, qu'il fallait instaurer un nouveau modèle de financement où les risques sont partagés et les revenus répartis en conséquence.
LISTNUM 1 \l 14313 Permettez‑moi de vous rappeler l'exemple de l'émission Vice caché : des revenus de 1,5 millions de dollars pour financer une licence de 2,1, qui résultent en une perte pour TVA de 600 000 dollars.
LISTNUM 1 \l 14314 Vous comprenez que des pertes semblables à répétition mettent en péril la viabilité de l'entreprise.
LISTNUM 1 \l 14315 Nous avons démontré que le Fonds n'est pas en mesure de financer, ce qui est urgent, les productions destinées à être exploitées sur les nouvelles plateformes de diffusion qui, au Québec en particulier, représentent une forme de bouée de sauvetage pour la production originale.
LISTNUM 1 \l 14316 Les jeunes s'y dirigent en masse et ils n'ont pas accès à suffisamment de nos productions.
LISTNUM 1 \l 14317 Nous avons démontré aussi que le Fonds n'était pas en mesure de soutenir financièrement le développement et la production de nouveaux concepts de programmes dont la télévision généraliste et les nouvelles plateformes de diffusion ont besoin.
LISTNUM 1 \l 14318 Cette incapacité nous rend tributaires des concepts étrangers, nous oblige à importer, à adapter, plutôt qu'à développer notre potentiel créatif et à tenter de l'exporter.
LISTNUM 1 \l 14319 Nous avons démontré l'impossibilité de concilier, au sein d'un même conseil d'administration, les intérêts des diffuseurs privés et ceux des diffuseurs publics, tout simplement parce que nous n'avons pas les mêmes mandats ni la même mission et nos imputabilités sont différentes : nous sommes imputables à nos actionnaires, ils sont imputables au Parlement canadien.
LISTNUM 1 \l 14320 Nous avons proposé, le 12 février 2007, une solution qui renforce les objectifs de la Loi sur la radiodiffusion.
LISTNUM 1 \l 14321 Nous avons proposé d'augmenter notre contribution annuelle de 19 à 30 millions, de l'augmenter chaque année de 20 pour cent, de nous engager à investir plus de 100 millions sur trois ans, de renoncer aux contributions du ministère du Patrimoine et de donner au CRTC toutes les garanties lui permettant de superviser le respect de nos engagements.
LISTNUM 1 \l 14322 Je me permets de répéter le paragraphe étant donné qu'il semble qu'un certain nombre d'intervenants n'aient pas bien compris l'importance de notre proposition, de notre contribution à la programmation canadienne, ainsi qu'à tous les artisans du paysage audiovisuel.
LISTNUM 1 \l 14323 Nous avons donc proposé d'augmenter notre contribution annuelle de 19 à 30 millions, de l'augmenter chaque année de 20 pour cent, de nous engager à investir plus de 100 millions sur trois ans, de renoncer aux contributions du ministère du Patrimoine et de donner au CRTC toutes les garanties lui permettant de superviser le respect de nos engagements.
LISTNUM 1 \l 14324 Nous avons démontré que notre proposition était à l'avantage de l'ensemble du système de radiodiffusion dans le marché francophone, à l'avantage des créateurs, des artistes et des artisans de la production en rappelant que la contribution annuelle pour 2006 de Vidéotron, en vertu des règles actuelles, est d'environ 15,2 millions, alors que l'enveloppe de TVA se situe à autour de 16,5 millions.
LISTNUM 1 \l 14325 Nous nous sommes engagés à négocier avec les producteurs indépendants les conditions d'un partenariat équilibré, les invitant à prendre des risques dans le financement des productions ou à les rémunérer équitablement pour la prestation de leurs services.
LISTNUM 1 \l 14326 Vous noterez enfin que nous avons choisi, dès le début, entre l'alternative de demeurer au Fonds canadien et donc de diminuer significativement notre volume de productions originales ou de nous en retirer, mais pour en faire davantage.
LISTNUM 1 \l 14327 Nous avons été déçus des propositions et recommandations du Rapport du Groupe de travail pour les raisons suivantes.
LISTNUM 1 \l 14328 Le CRTC ne fait pas écho à notre proposition de retrait volontaire et n'a pas considéré ni commenté notre proposition d'investir plus de 100 millions de dollars sur trois ans dans la production canadienne.
LISTNUM 1 \l 14329 La solution proposée ne corrige pas les graves problèmes de gouvernance qui ont été démontrés.
LISTNUM 1 \l 14330 Elle entretient cette confusion des objectifs que nous avons décrite, consacre la participation des publics et des privés au sein d'un même conseil et ne crée pas de mesures efficaces pour assurer que l'objectif de performance de la production canadienne soit rencontré.
LISTNUM 1 \l 14331 Ainsi, cette proposition maintient cette aberration que nous retrouvons dans la politique du Fonds canadien relative aux honoraires de production ‑ ou du producteur, pardon ‑‑ et aux frais d'administration, et je cite : « Le Fond n'encourage pas les producteurs à réduire leurs honoraires et leurs frais d'administration ou, encore à en reporter le paiement pour boucler le financement de la production. »
LISTNUM 1 \l 14332 Vous comprenez que ce n'est pas comme ça que les choses fonctionnent dans la réalité commerciale.
LISTNUM 1 \l 14333 Elle maintient le statu quo quant au mode de répartition des sommes disponibles entre les bénéficiaires actuels et ne permet pas une révision significative des programmes admissibles.
LISTNUM 1 \l 14334 Elle laisse TVA et les promoteurs de contenus originaux sur les nouvelles plateformes dans le cul‑de‑sac que nous avons démontré.
LISTNUM 1 \l 14335 La proposition du CRTC ne permettrait pas à TVA de maintenir sa contribution à la production et à la promotion du contenu canadien de grande valeur.
LISTNUM 1 \l 14336 Nous ne comprenons toujours pas les motifs qui ont amené le Groupe de travail à ne pas considérer notre proposition.
LISTNUM 1 \l 14337 Depuis, les faits ont confirmé et accentué la crise du financement de la production originale de qualité dans le marché francophone.
LISTNUM 1 \l 14338 TQS est dans la situation que vous connaissez.
LISTNUM 1 \l 14339 Radio‑Canada crée encore plus de pression sur le Fonds.
LISTNUM 1 \l 14340 Cette télévision d'État continue de bénéficier d'un pourcentage fixe du Fonds canadien et s'assure de s'accaparer le maximum des sommes disponibles pour rencontrer les objectifs plus culturels imposés par le ministère du Patrimoine au Fonds canadien, alors qu'il devrait appartenir au Parlement du Canada de déterminer le niveau adéquat de financement.
LISTNUM 1 \l 14341 Les décisions du Fonds canadien pour 2006 et 2007 ont conduit à des résultats aberrants : les sommes attribuées à Groupe TVA baissent de 2 millions (c'est‑à‑dire de 18,4 16,3 millions), alors que celles de TFO augmentent de un million (de 3,7 à 4,75), illustrant une dynamique de saupoudrage arbitraire et improductive.
LISTNUM 1 \l 14342 La télévision spécialisée et payante accentue son emprise sur les revenus publicitaires.
LISTNUM 1 \l 14343 L'écart avec la télévision généraliste se creuse, mettant davantage de pression sur TVA dans sa capacité à financer la programmation canadienne originale de qualité, celle qui attire les téléspectateurs.
LISTNUM 1 \l 14344 La résistance de la production indépendante se renforce.
LISTNUM 1 \l 14345 Malgré le déclin reconnu de la télévision généraliste, leurs revendications sont toujours plus exigeantes pour protéger leur rémunération et contrôler l'exercice des droits d'exploitation.
LISTNUM 1 \l 14346 La mainmise de la production indépendante sur le Fonds s'est maintenue aussi ferme depuis le début de ce débat et leurs interventions prouvent, si cela était nécessaire, leur intention de défendre leurs intérêts corporatifs, même au prix de remettre en cause la possibilité pour TVA de maintenir son niveau actuel d'investissement dans la production.
LISTNUM 1 \l 14347 Nous avons aussi démontré qu'en raison de la taille et des caractéristiques du marché francophone, l'impact des nouvelles technologies de diffusion et des nouveaux médias, y est plus significatif et exige des solutions adaptées.
LISTNUM 1 \l 14348 Le marché francophone a plusieurs traits distinctifs que reconnaît le CRTC.
LISTNUM 1 \l 14349 Le plus important est lié aux revenus publicitaires qu'ils soient dits locaux ou nationaux.
LISTNUM 1 \l 14350 Au Québec, selon Nielsen, les investissements publicitaires représentent plus de deux milliards tous médias confondus, dont 34 pour cent pour la télévision totale (c'est‑à‑dire 717 millions).
LISTNUM 1 \l 14351 L'indice de mesure usuellement utilisé pour évaluer le potentiel de revenus publicitaires générés par la télévision est « le coût par mille ».
LISTNUM 1 \l 14352 Il est, au Québec, historiquement beaucoup moins cher que celui du marché ontarien. L'écart est en moyenne de 21 pour cent en faveur du marché ontarien.
LISTNUM 1 \l 14353 La télévision privée au Québec doit composer avec la concurrence des télévisions d'État (Télé‑Québec avec 3,1 pour cent et Radio‑Canada avec 13,4 pour cent) qui semblent ‑ ensemble, pardon ‑ génèrent 16,5 pour cent de parts de marché.
LISTNUM 1 \l 14354 La télévision généraliste privée génère des auditoires largement supérieurs aux télévisions généralistes privées du reste du Canada.
LISTNUM 1 \l 14355 TVA représente 28,9 pour cent de parts de marché, TQS 11,3 (pour un total de 40,2 pour cent), alors que CTV et Canwest représentent respectivement 11,6 et 11,2 (pour un total de 22,8 pour cent).
LISTNUM 1 \l 14356 Ces parts de marché supplémentaires ne se monnayent cependant pas en termes de revenus publicitaires comparables.
LISTNUM 1 \l 14357 Les émissions les plus performantes rejoignent des auditoires de plus de un million de personnes et exceptionnellement supérieurs à deux millions.
LISTNUM 1 \l 14358 Ce sont, la plupart du temps, des programmes originaux à budgets moyens ou élevés que les télévisions généralistes sont les seules à pouvoir financer dans le marché restreint du Québec.
LISTNUM 1 \l 14359 Le potentiel de revenus publicitaires au Québec n'est pas suffisant pour « monnayer » ces performances exceptionnelles.
LISTNUM 1 \l 14360 C'est pourquoi, dans le marché francophone en particulier, la viabilité des investissements dans la programmation canadienne passe obligatoirement par une utilisation séquentielle des divers canaux de diffusion.
LISTNUM 1 \l 14361 Conclusion, Madame la Présidente, le Fonds canadien est en crise, car il n'a pas la capacité de s'adapter aux changements en cours.
LISTNUM 1 \l 14362 La télévision généraliste privée, particulièrement TVA au Québec, fait face à des pressions qui menacent sa capacité de maintenir le rôle de leader, qui est le sien, pour la promotion du contenu canadien.
LISTNUM 1 \l 14363 TVA investit annuellement plus de 100 millions dans la programmation canadienne, tous genres confondus, y compris les programmes de nouvelles et d'affaires publiques.
LISTNUM 1 \l 14364 On ne semble pas réaliser que l'augmentation des coûts de production pour les programmes originaux de fiction ou de variétés crée une forte pression sur la possibilité pour TVA de maintenir son haut niveau actuel d'engagement envers une information de qualité.
LISTNUM 1 \l 14365 Quebecor's proposal has been criticized as self‑serving. It is no such thing.
LISTNUM 1 \l 14366 Our purpose is not to garner the lion's share of public funding for Quebecor's media outlets. On the contrary, we would forego public funding.
LISTNUM 1 \l 14367 Neither is our purpose to deprive other broadcasters of contributions from the distributors.
LISTNUM 1 \l 14368 By renouncing its share of these funds, TVA would release more money than what Vidéotron contributes.
LISTNUM 1 \l 14369 Notre objectif, répétons‑le, est de tout mettre en oeuvre pour.
LISTNUM 1 \l 14370 Premièrement, permettre à TVA de disposer des marges financières et de l'autonomie nécessaire pour maintenir son haut niveau d'investissement dans la production du contenu canadien et de sa diffusion.
LISTNUM 1 \l 14371 Et deuxièmement, fournir tout le financement nécessaire afin que se déploient sur les nouvelles plateformes du Groupe TVA les contenus adaptés qui, actuellement, sont majoritairement américains.
LISTNUM 1 \l 14372 Ce qui était vrai voici un an l'est dramatiquement plus aujourd'hui, et nous avons eu récemment l'occasion de vous en faire part.
LISTNUM 1 \l 14373 L'opting out que nous proposons représente la meilleure opportunité pour le CRTC d'appuyer les objectifs de la Loi, et je la cite, à l'article 3, paragraphe e) : « Tous les éléments du système doivent contribuer, de la manière qui convient, à la création et à la présentation d'une programmation canadienne. »
LISTNUM 1 \l 14374 Notre proposition permet aussi à notre entreprise de continuer de faire la preuve de la grande valeur du contenu canadien sur notre marché et sur les marchés extérieurs.
LISTNUM 1 \l 14375 Le statu quo, en revanche, se traduirait par une diminution significative de la production canadienne originale à l'antenne de TVA, en particulier les genres que seul TVA, parmi les diffuseurs privés, est en mesure de soutenir significativement, c'est‑à‑dire la dramatique et les variétés de qualité.
LISTNUM 1 \l 14376 Certains intervenants sollicitent la protection d'une réglementation plus sophistiquée faite de plus d'obligations et de plus de contrôle.
LISTNUM 1 \l 14377 Pourtant, le passé récent que nous avons vécu illustre que nous pouvons tenir nos engagements et mieux réussir sans les contraintes de la réglementation.
LISTNUM 1 \l 14378 Ainsi, dans le domaine de la téléphonie résidentielle, Vidéotron a réussi en moins de trois ans, dans un environnement qui libérait les règles du marché, à brancher 636 000 foyers.
LISTNUM 1 \l 14379 Au cours de l'année 2006‑2007, ce sont 238 000 nouveaux clients qui se sont ajoutés, soit une augmentation de 60 pour cent.
LISTNUM 1 \l 14380 La déréglementation a permis, pour la première fois au Canada, de baisser de façon significative les prix de la téléphonie résidentielle aux consommateurs.
LISTNUM 1 \l 14381 Nous voilà donc devant vous pour vous dire essentiellement deux choses.
LISTNUM 1 \l 14382 Permettez‑nous d'offrir davantage d'émissions canadiennes véritablement significatives eu égard aux objectifs de la Loi.
LISTNUM 1 \l 14383 Et puisque le marché demande en premier lieu des émissions de télévision originales de langue française, permettez aux règles du marché de jouer leur rôle au lieu d'étouffer l'initiative par une réglementation abusive.
LISTNUM 1 \l 14384 Merci beaucoup de votre attention.
LISTNUM 1 \l 14385 Nous sommes évidemment prêts à répondre à vos questions.
LISTNUM 1 \l 14386 LA PRÉSIDENTE : Merci, Monsieur Péladeau.
LISTNUM 1 \l 14387 Just for the record, Quebecor has filed correspondence and documents, as was referred to in their oral presentation, and the Commission has accepted. This documentation now will be available on the public record.
LISTNUM 1 \l 14388 Commissioner Morin?
LISTNUM 1 \l 14389 CONSEILLER MORIN: Bonjour. Au cours des derniers jours, j'ai posé la question à plusieurs groupe qui sont venus devant nous en leur disant : « Écoutez, vous avez... le groupe Quebecor qui propose de pratiquement doubler sa contribution à la production canadienne et vous ne semblez pas très chaud à l'idée.
LISTNUM 1 \l 14390 Comment vous expliquez que les groupes de syndicats ne soient pas de votre côté pour réclamer, pour vous seconder dans votre proposition d'augmenter la production de contenu canadien, d'augmenter le volume de production chez vous parce qu'au fond, ce sont leurs emplois qui devraient en profiter, il me semble? »
LISTNUM 1 \l 14391 M. PÉLADEAU: Merci, Monsieur Morin. Effectivement, je pense que vous l'avez bien décrit. Nous sommes les premiers surpris puisque ‑‑ et j'ai eu l'occasion de le répéter pour être bien certain que les gens comprennent et vous avez également mis l'accent sur l'importance de notre intervention.
LISTNUM 1 \l 14392 C'est que nous sommes prêts à doubler les montants. Et ces montants‑là vont évidemment participer à des retombées économiques importantes dans tous les secteurs de la production, que ce soit, évidemment, les producteurs, les premiers concernés, mais également les artistes, les scénaristes, les techniciens qui vont bénéficier de ces sommes importantes. Et c'est un engagement clair et précis que nous prenons.
LISTNUM 1 \l 14393 Et encore une fois, nous sommes tout à fait prêts à « subir » les règles de supervision du CRTC à cet égard. Donc, une tierce partie est en mesure de pouvoir adéquatement surveiller les obligations auxquelles nous sommes prêts, nous voulons nouvellement assumer.
LISTNUM 1 \l 14394 Donc, en toute honnêteté, effectivement, c'est une surprise. De notre côté, on a de la difficulté à comprendre pourquoi les différents intervenants ‑‑
LISTNUM 1 \l 14395 On n'accepte pas les contributions supplémentaires à l'intérieur d'un nouvel environnement qui est celui qu'on a essayé de décrire depuis un certain nombre de mois et d'années, une révolution numérique qui s'est produite il y a déjà plusieurs années, un environnement concurrentiel qui, lui aussi, a permis à l'ensemble de la structure industrielle de production d'évoluer.
LISTNUM 1 \l 14396 Mais en même temps, aujourd'hui, lorsqu'on regarde le Fonds canadien, qui ne peut évoluer puisque les règles qui ont été édictées par le Fonds canadien l'ont été au moment où l'environnement était complètement différent, où il existait, en fin de compte, une seule source de diffusion qui était la télévision généraliste analogique ‑‑
LISTNUM 1 \l 14397 Aujourd'hui, évidemment, on a évolué, tout autant au niveau numérique en télévision : vidéo sur demande, Internet, diffusion sur de nouveaux canaux ‑‑ et c'est à cet environnement‑là, aujourd'hui, que les règles du Fonds canadien ne sont pas en mesure de répondre.
LISTNUM 1 \l 14398 Par ailleurs, et pourtant, nous l'avons indiqué à plusieurs reprises ‑‑ et peut‑être que Pierre pourra intervenir à cet égard, puisque Pierre était présent au sein du Conseil, du Fonds canadien‑‑
LISTNUM 1 \l 14399 Et en toute déférence à l'égard des institutions, en toute logique également, nous avons, depuis nombreux mois et années, tenté de convaincre les administrateurs et le Conseil de cette réalité incontournable qu'a été le développement technologique en matière de paysage audiovisuel canadien.
LISTNUM 1 \l 14400 Pierre?
LISTNUM 1 \l 14401 M. LAMPRON: Oui, effectivement. Et on est beaucoup intervenu sur, justement, ces questions de gouvernance et de gestion de conflits d'intérêts pour essayer de démontrer que le résultat net du type de fonctionnement amène les groupes et leurs intérêts corporatifs à beaucoup intervenir pour tenter de maintenir ce qu'ils peuvent appeler les acquis, de continuer à bénéficier des protections que le système a mises en place, année après année, pour pouvoir, justement, leur donner le confort de protéger tantôt des rémunérations, tantôt des volumes de production, tantôt donc, des accès à des enveloppes de production protégées.
LISTNUM 1 \l 14402 Et dans la tentative d'explication qu'on peut avoir des objections qui peuvent être entendues ‑‑ nous, on a entendu qu'effectivement, la plupart des intervenants salivent à l'idée de la perspective qu'il y ait des investissements nouveaux, mais sont beaucoup, beaucoup pris dans la situation de se poser la question si tout ce qu'ils bénéficient comme protection serait remis en cause par la capacité de négocier selon des règles de marché tout à fait normales.
LISTNUM 1 \l 14403 Et sur cette question, donc, de gouvernance, sur laquelle on était intervenu, effectivement, j'ai eu l'occasion d'en témoigner assez souvent.
LISTNUM 1 \l 14404 Le système est ainsi organisé que d'abord, s'il s'agit d'un conseil d'administration avec des représentations de groupes d'associations d'intérêts corporatifs qui sont très impressionnantes, qui effectivement, se présentent devant vous en disant : « Maintenez‑nous à l'intérieur de son conseil parce que nous possédons l'expertise, parce que nous sommes les gens qui connaissons et parce que nous pouvons effectivement influencer correctement l'évolution de ce fonds. »
LISTNUM 1 \l 14405 L'objectif du président du conseil est d'obtenir pour la définition des orientations, des critères et de tout ce qui fait la vie du fonds et d'obtenir le consensus de ces représentants‑là.
LISTNUM 1 \l 14406 Ces gens‑là ne sont pas au conseil en raison de leur expertise particulière. Ils sont au conseil en raison de la représentativité qu'ils ont. Ils sont tantôt mandatés de leur association de distributeurs, tantôt de leur association de producteurs.
LISTNUM 1 \l 14407 Et leur seul objectif à l'intérieur de ce conseil, c'est de représenter les intérêts de leurs membres de façon générale, de telle manière que ‑‑ ce qu'on vous a fait entendre sur la perspective, par exemple, qu'il y a des votes et des décisions qui sont prises, si vous voulez, par des systèmes indépendants et contrecarrés par le fait que l'administration ‑‑ qui est très compétente, soit dit en passant ‑‑ que l'administration, lorsqu'elle propose ou qu'elle fait ses analyses se butte à un conseil d'administration d'experts représentants leurs différents secteurs.
LISTNUM 1 \l 14408 Et on assiste à des marchandages, si vous voulez, sur les intérêts qu'ils peuvent avoir pour diriger le fameux consensus qui vous a été décrit.
LISTNUM 1 \l 14409 Et on a des exemples. Essayez d'imaginer, Monsieur Morin, que par exemple, pendant un an et demi (à peu près, en tout cas) de discussions où on a été au conseil...
LISTNUM 1 \l 14410 Essayez de vous imaginer qu'il a été impossible de faire accepter la vidéo sur demande comme étant un diffuseur (ce que reconnaît le CRTC), pour une raison simple : c'est qu'il était impossible aux membres de ce conseil d'accepter l'arrivée d'un nouveau venu qui aurait eu accès à des fonds et qui donc aurait menacé en quelque sorte la capacité des uns et des autres de pouvoir protéger leurs acquis.
LISTNUM 1 \l 14411 C'est une situation qu'on a dénoncée. C'est une situation qui perdure. Et dans les recommandations qui peuvent venir, il est certain que la seule résultante de ce type de conseil d'administration, c'est la protection des acquis, c'est la protection du statu quo.
LISTNUM 1 \l 14412 Et c'est pourquoi on affirme, dans notre intervention qu'il est impossible à ce fonds de pouvoir s'adapter à la nouvelle réalité qui a été amplement décrite et que je pense que le Conseil a ‑‑
LISTNUM 1 \l 14413 M. PÉLADEAU: Permettez‑moi, Monsieur Morin, juste ‑‑ rapidement, aussi.
LISTNUM 1 \l 14414 Donc, alors que la vidéo sur demande existe depuis plus de trois ans, alors qu'elle s'impose dans un univers occidental de façon accélérée, j'ai eu l'occasion donc, de vous indiquer que près d'un million de visionnements ont eu lieu par semaine.
LISTNUM 1 \l 14415 Donc, sur une base annuelle, ça fait 52 millions. Et ça, alors qu'environ seulement 50 pour cent ou un peu moins de nos clients chez Vidéotron ont accès à la télévision numérique, aujourd'hui. Le reste du 50 pour cent étant encore en télévision analogique qui ne permet pas cette technologie‑là.
LISTNUM 1 \l 14416 Vous savez évidemment aussi qu'aux États‑Unis on va abolir l'analogique. Et on sait que le CRTC a proposé des règles à cet égard‑là, différentes du marché américain. Mais c'est certain que la tendance au numérique va se poursuivre et non diminuer ou freiner. Et donc, en conséquence, ces nouvelles plates‑formes et ces nouvelles technologies vont s'imposer encore davantage.
LISTNUM 1 \l 14417 On peut penser aussi à l'Internet. Et le conflit, à l'heure actuelle, qui existe aux États‑Unis entre les scénaristes et puis les réseaux est un peu, justement, basé sur la monétisation de ce nouveau canal de distribution que représente l'Internet.
LISTNUM 1 \l 14418 De plus en plus, les réseaux, afin de combler la diminution des audiences qui existent, qui sont une réalité, fait appel à l'Internet pour justement compenser ce qu'ils ont perdu de l'autre côté. Et on remarque également, en ce qui nous concerne, des tendances similaires.
LISTNUM 1 \l 14419 J'aimerais demander à Pierre, qui lui, a une présence Internet importante, autant au niveau de l'information que de la dramatique...
LISTNUM 1 \l 14420 Peut‑être que tu peux nous donner des chiffres, Pierre?
LISTNUM 1 \l 14421 M. DION: Effectivement, j'ai des chiffres récents (à vrai dire du mois de janvier de 2008) sur notre station, notre chaîne spécialisée LCN. Juste au mois de janvier, il y a eu 19 millions de pages vues sur le site de LCN, dont 2.5 millions de téléchargement de « streaming » de clips comme tels.
LISTNUM 1 \l 14422 Juste pour vous donner un exemple, c'est le double de trafic au mois de janvier, par rapport à voilà six mois. Donc, il y a une expansion absolument incroyable. Et il faut comprendre qu'un réseau comme nous, on ne peut plus approcher les investissements et notre stratégie de programmation ‑‑ et si je donne un exemple au niveau de l'information (mais je pourrais dire la même chose au niveau de tout autre genre de programmation à TVA), on ne peut plus regarder notre investissement en regardant seulement un canal de diffusion.
LISTNUM 1 \l 14423 On est condamné, finalement à vivre ‑‑ à soit subir la fragmentation ou être en avant de la vague de cette fragmentation‑là. Et stratégiquement, se dire comment, justement, on peut avoir un retour sur notre investissement dans la structure de financement de notre émission, dans la stratégie d'exploitation de cette ouvre‑là ou de cette émission‑là, pour être capable, justement, de faire face à la réalité que Pierre‑Karl a parlé.
LISTNUM 1 \l 14424 Et c'est pour ça que dans le discours de Pierre‑Karl on parle énormément des nouveaux canaux de distribution, parce que ça doit être à la base de la stratégie, surtout dans un marché francophone où on est dans un marché captif, on est dans un marché de petite taille et on doit investir beaucoup pour avoir justement ‑‑ pour attirer l'attention des téléspectateurs.
LISTNUM 1 \l 14425 Mais les lois du marché et la réglementation actuelle ne nous permettent pas, justement, d'exploiter à la mesure qu'on a besoin pour le Québec, pour concurrencer à l'intérieur du Québec, mais aussi internationalement, aujourd'hui.
LISTNUM 1 \l 14426 CONSEILLER MORIN: Maintenant, pour revenir au fonds... au fonds de plus de 100 millions que vous proposez sur trois ans. Est‑ce que ce sera toujours « des pommes » dans le sens suivant : est‑ce que ce seront des émissions de type prioritaire, telles que celles qui sont financées par le Fonds canadien qui apparaîtront à votre écran?
LISTNUM 1 \l 14427 Est‑ce que les Québécois y perdront au change, en termes de qualité? Quelles garanties vous offrez, dans la composition de ce 100 millions‑là, que ce soit des dramatiques, des émissions pour enfants, et cetera?
LISTNUM 1 \l 14428 M. PÉLADEAU: Monsieur Morin, évidemment, on est (puisque au cour de la programmation) tout à fait conscients des besoins, je dirais, de la clientèle, des auditeurs et des auditrices en matière de programmation canadienne, particulièrement francophone.
LISTNUM 1 \l 14429 Dans le passé, nous avons eu énormément de succès sur ce qu'on a appelé « les séries lourdes ». L'environnement actuel, pour les raisons que nous avons indiquées, ne nous permet plus de pouvoir en faire et on considère que c'est une perte pour le paysage audiovisuel canadien. Quand on regarde des ouvres comme « Nos étés », « Le négociateur »...
LISTNUM 1 \l 14430 CONSEILLER MORIN: Est‑ce que c'est vrai que « Nos étés », ça serait la dernière?
LISTNUM 1 \l 14431 M. PÉLADEAU: C'est la dernière. On n'a plus les moyens de financer de telles productions. Donc on va devoir revoir la façon dont on devra faire face à nos obligations en matière d'heures prioritaires.
LISTNUM 1 \l 14432 Et c'est indéniable, lorsque TVA va revenir devant vous pour son renouvellement de licence, va demander des aménagements en ce qui concerne ses obligations puisque c'est sa rentabilité et sa viabilité, sa pérennité qui, à terme, est menacée.
LISTNUM 1 \l 14433 Et on l'a constaté, je ne pense pas qu'il y a une exception en ce qui concerne TVA. L'ensemble des télévisions généralistes, qu'elles soient anglophones ou francophones subissent des pressions liées, donc, à ces évolutions technologiques.
LISTNUM 1 \l 14434 La perspective qui s'offre à nous, dans notre projet « d'opting out », c'est justement de s'assurer qu'on va pouvoir maintenir des niveaux de qualité, de pouvoir faire de la dramatique, de pouvoir également faire des variétés de qualité, à partir par ailleurs d'une structure d'exploitation qui va nous permettre, justement, à partir du fait que nous sommes détenteurs des droits, de l'exploiter sur plusieurs canaux de distribution.
LISTNUM 1 \l 14435 Ce que nous avons perdu à l'antenne, nous allons le retrouver sur les autres canaux de distribution et monétiser cette capacité de pouvoir, donc, offrir du contenu de qualité et, à ce moment‑là, le financer par ces nouveaux canaux de distribution.
LISTNUM 1 \l 14436 Mais globalement, est‑ce que le 100 millions, par exemple, équivaudrait à ce que vous auriez obtenu, le 30 millions que vous auriez obtenu, disons, ou le 50 millions que vous auriez obtenu du Fonds canadien, en termes de qualité? Autrement dit, actuellement, selon ce qu'on peut voir au cours des dernières années, c'est grosso modo 16 à 18 millions que vous allez chercher du Fonds canadien de télévision, donc, c'est là que vient le premier chiffre de 50 millions sur trois ans.
LISTNUM 1 \l 14437 Ce que vous nous proposez, c'est un 100 millions à 33 millions par année. Est‑ce que ce 33 millions par année pourrait, dans votre esprit, se qualifier pour l'obtention des sommes disponibles au Fonds canadien?
LISTNUM 1 \l 14438 M. DION: Peut‑être que je pourrais répondre en disant deux choses.
LISTNUM 1 \l 14439 Un : On pourrait peut‑être faire ‑‑ pas peut‑être ‑‑ on pourrait faire des choses qu'on ne peut plus faire aujourd'hui. Pourquoi? Parce que comme on a expliqué, tout le système d'exploitation de cette ouvre‑là serait différent. Et c'est pour ça que dans les règles actuelles, on ne peut plus faire « Un homme mort » qu'on a cancellé, ou « Vice caché » ou maintenant « Le négociateur » et « Nos étés » qui, en passant ‑‑ les séries qui vont être diffusées cet hiver sont également déficitaires.
LISTNUM 1 \l 14440 Donc, dans un nouveau modèle, le nouveau modèle proposé du fonds Quebecor, on pourrait sûrement revenir dans certains types de contenus qu'on ne peut plus avec le modèle actuel, justement à cause de l'exploitation qu'on va en faire.
LISTNUM 1 \l 14441 Deuxièmement : 15 millions du 16 millions qu'on reçoit aujourd'hui, TVA, c'est de la dramatique. Donc, c'est ‑‑ dans un nouveau contexte du fonds Quebecor, on voudrait élargir les possibilités du type d'émissions qu'on pourrait faire à l'intérieur du fonds proposé, qui je pense serait un atout incroyable.
LISTNUM 1 \l 14442 Je vais juste vous donner un exemple. On est à créer une variété, présentement qui va être en ondes en septembre à TVA. Cette variété‑là, à l'heure actuelle, n'est pas admissible au Fonds canadien et même si elle était admissible, le Fonds canadien ne permet pas à TVA d'utiliser plus qu'un million du 16 millions de dollars pour de la production, de la création et de la production internes.
LISTNUM 1 \l 14443 A l'intérieur du fonds Quebecor, ce ‑‑ appelons‑le ce format‑là de variété qu'on veut créer utiliserait toutes les plateformes de diffusion, aurait probablement une injection d'argent assez intéressante pour pouvoir en créer, en faire un format, et avoir un véritable potentiel, justement d'exploiter à l'international ce format‑là, comme les Endemol et les Freemantle de ce monde on fait au cours des dernières années.
LISTNUM 1 \l 14444 Donc, je pense qu'on a un exemple concret de ce qu'on pourrait faire à l'intérieur du nouveau fonds.
LISTNUM 1 \l 14445 CONSEILLER MORIN: Bien, prenons l'exemple des dramatiques. Est‑ce que sur l'angle des dramatiques, ce fonds‑là pourrait générer plus de dramatiques qu'on en génère actuellement dans le cadre du Fonds canadien de télévision?
LISTNUM 1 \l 14446 Est‑ce que c'est votre objectif, puisque les règles ne fonctionnent plus, actuellement?
LISTNUM 1 \l 14447 M. LAVOIE: Mais Monsieur Morin, je voudrais juste (et je vais repasser la parole à Pierre) souligner une chose. Je ne vois pas quelle serait notre motivation à abaisser le niveau de qualité de nos productions. Je n'en vois vraiment pas.
LISTNUM 1 \l 14448 Il n'y a pas de raison qui nous amènerait à offrir une programmation de moins bonne qualité. On est le leader, en télévision au Québec, parce qu'on fait de la qualité. Et il n'est pas question de baisser le niveau de qualité. Ce qu'on veut, c'est sortir de la camisole de force qui définit ce qu'on doit puis comment on doit le faire, puis en vertu de quelles règles et en vertu de ceci et en vertu de cela.
LISTNUM 1 \l 14449 On veut libérer les Fonds, on veut faire en sorte que les fonds aillent directement à l'écran, pas dans l'administration d'une bureaucratie. On veut faire affaire avec des producteurs indépendants, parce qu'on n'a pas le choix, on doit faire affaire avec des producteurs indépendants.
LISTNUM 1 \l 14450 Parce que même sans les règles du CRTC, il ne serait pas possible, physiquement, logistiquement et autrement, de tout produire à l'interne. On veut le faire sur une base commerciale plus appropriée et correspondant mieux aux pratiques commerciales et aux pratiques de gestion les plus élémentaires.
LISTNUM 1 \l 14451 Mais abaisser la qualité, il n'en est évidemment pas question. Ça serait suicidaire de faire ça.
LISTNUM 1 \l 14452 Pierre?
LISTNUM 1 \l 14453 M. DION: tu as absolument raison, Luc. Puis juste quelques chiffres pour témoigner de ça : 90 pour cent en 2006‑2007, année broadcast TVA, 90 pour cent de notre budget total de programmation est du contenu canadien. Ça fait que je vous laisse imaginer le pourcentage en « prime time ».
LISTNUM 1 \l 14454 C'est le cour de notre business. Seulement 10 pour cent de nos investissements, c'est en contenu étranger. Donc nous, c'est ce que les Québécois et Québécoises désirent. Et c'est effectivement notre priorité.
LISTNUM 1 \l 14455 CONSEILLER MORIN: Vous venez de parler, faire allusion aux producteurs indépendants. Évidemment, dans le cadre des règles actuelles, vous êtes obligés d'y recourir. Et vous parlez d'une contribution notable, si j'ai bien lu dans votre mémoire.
LISTNUM 1 \l 14456 Ça serait quoi la « contribution notable »? Parce qu'à ce moment‑là, vous seriez libéré de l'obligation de faire appel aux producteurs indépendants. Donc, la production maison pourrait représenter quoi, par rapport aux producteurs indépendants dans votre fonds de 100 millions répartis sur trois ans?
LISTNUM 1 \l 14457 M. LAVOIE: D'abord, je voudrais ‑‑juste pour préciser une chose, Monsieur Morin, je ne pense pas qu'on serait libérés de notre obligation de faire appel à des producteurs indépendants parce que c'est dans la loi elle‑même, au‑delà de la réglementation et de la décision de '94 qui donnait naissance au Fonds canadien (qui s'appelait à l'époque le Fonds des câblos).
LISTNUM 1 \l 14458 On a quand même une obligation de faire affaire avec des producteurs indépendants. Mais laissons l'obligation de côté. On va devoir faire affaires avec des producteurs indépendants, simplement parce qu'on a besoin, en appui, de la production indépendante.
LISTNUM 1 \l 14459 On en a aussi besoin, pas seulement en appui, mais en créativité. On ne va... Pourquoi on ne ferait aux esprits les plus créatifs qui sont disponibles sur le marché. C'est à notre avantage de le faire. Maintenant, quel est le pourcentage qui va aller en production indépendante? J'aurais tendance à penser « Est‑ce qu'on l'a quantifié? » Puis là, j'aurais tendance à penser qu'il va être à peu près équivalent à ce qu'il est maintenant.
LISTNUM 1 \l 14460 CONSEILLER MORIN: Et donc, l'augmentation du contenu canadien se traduirait par une augmentation équivalente de votre production interne et d'une augmentation équivalent au niveau des producteurs indépendants. Est‑ce que je comprends bien?
LISTNUM 1 \l 14461 M. LAVOIE: On ne l'a pas quantifié, mais je pense que c'est à peu près exact, de penser comme ça, oui.
LISTNUM 1 \l 14462 Sauf que les contraintes qui disent : « Ceci peut être fait comme cela par untel et par l'autre. » Non, on aurait des pratiques commerciales, qui vont dans l'intérêt, au fond, des consommateurs. De nos actionnaires, mais aussi des consommateurs. Parce que ce qu'on veut offrir, c'est un produit de qualité, puis on veut en offrir davantage.
LISTNUM 1 \l 14463 CONSEILLER MORIN: Vous dites que ‑‑
LISTNUM 1 \l 14464 M. LAMPRON: Pardon? Dans le modèle qu'on vous a proposé, on propose effectivement de libérer un peu la nature des négociations y compris avec les producteurs indépendants.
LISTNUM 1 \l 14465 Mais on a également, au conseil, des représentants des membres du CRTC. Et c'est beaucoup cette situation d'indiquer que sans avoir nécessairement à fonctionner à partir, si vous voulez, de quotas ou d'obligations qui sont particulières, il y a la capacité pour le système d'observer notre bonne pratique.
LISTNUM 1 \l 14466 Ce que nous affirmons et ce que nous répétons, c'est que notre intérêt, notre intérêt premier, c'est de recourir, je dirais massivement à la production indépendante parce que c'est elle qui nous génère les idées qui nous sont nécessaires.
LISTNUM 1 \l 14467 M. TRÉPANIER: Cela dit, si vous permettez, Monsieur Morin, on ne voudrait pas faire le renouvellement de licence aujourd'hui. Mais à l'heure actuelle, il y a une attente que 75 pour cent des émissions prioritaires aillent à la production indépendante.
LISTNUM 1 \l 14468 Et on vient, je pense, de vous le démontrer et les chiffres sont là aussi pour le démontrer. Les règles du marché sont entièrement suffisantes pour qu'une entreprise comme la nôtre travaille avec la production indépendante. Alors, il ne serait peut être pas surprenant qu'à l'automne on vous propose de remplacer les quotas par les règles du marché.
LISTNUM 1 \l 14469 CONSEILLER MORIN: Vous avez dit, je pense, pour la dernière année, finalement, que vous allez chercher plus dans le système au niveau du Fonds canadien de la télévision que Vidéotron n'en verse au système. Donc, que vous êtes, dans le fond ‑‑ que vous soutirez plus d'argent, malgré toutes les règles, que Vidéotron envoie, si vous voulez, au Fonds canadien.
LISTNUM 1 \l 14470 Donc, vous libéreriez le Fonds canadien de montants, finalement, si je comprends bien?
LISTNUM 1 \l 14471 M. LAVOIE: Un million de dollars, précisément.
LISTNUM 1 \l 14472 CONSEILLER MORIN: Un million...
LISTNUM 1 \l 14473 Est‑ce que sur les cinq dernières années, c'était aussi vrai?
LISTNUM 1 \l 14474 M. LAVOIE: C'est à peu près constant.
LISTNUM 1 \l 14475 CONSEILLER MORIN: Autrement, est‑ce que chaque année, bon an, mal an, c'est...?
LISTNUM 1 \l 14476 M. LAVOIE: C'est à peu près constant, à peu de choses près, oui.
LISTNUM 1 \l 14477 M. TRÉPANIER: Je dirais que la tendance est d'augmenter la contribution au Fonds canadien de Vidéotron, à cause du succès des initiatives de cette entreprise‑là et que, si on regarde l'enveloppe ‑‑
LISTNUM 1 \l 14478 Et là, je ne suis pas dans mon domaine d'expertise, mais l'enveloppe semble diminuer. Alors, le million dont monsieur Lavoie parle pourrait, évidemment, croître.
LISTNUM 1 \l 14479 CONSEILLER ARPIN: Je me permets d'intervenir, pour mettre les vrais chiffres sur la table. Parce que c'est un débat qui effectivement tourne autour de l'argent.
LISTNUM 1 \l 14480 Le groupe TVA, en 2006‑2007, a retiré 18.4 millions du Fonds canadien de télévision. Et en 2007‑2008, comme ça a été dit, a eu une diminution appréciable de deux millions, en fait, pour retirer 16.4 millions. Les contributions de Vidéotron, cependant, pendant la même période : en 2006 ‑‑ pour la période 2005‑2006, Vidéotron a contribué 15.1 millions et pour la période 2006‑2007, a contribué 16.8 millions.
LISTNUM 1 \l 14481 Alors les chiffres que ‑‑ parce que vous utilisez des chiffres ‑‑ Quand ça fait votre affaire, des chiffres de 2006, quand ça fait votre affaire, vous utilisez des chiffres de 2007. Monsieur Dion parlait de chiffres de 2007, parce qu'ils sont plus bas, puis monsieur Péladeau parle avec des chiffres de 2006, parce qu'ils sont plus bas que les chiffres de 2007.
LISTNUM 1 \l 14482 Je voulais seulement remettre ça pour qu'on ait une discussion en utilisant les bases de données qui sont les bases qui permettent à tout le monde de comparer.
LISTNUM 1 \l 14483 M. LAMPRON: Si vous me permettez quand même, sur cette question‑là, les faits sont les faits. Et les interprétations sont les interprétations. Notre intention n'était pas d'induire en erreur et non plus de jouer sur des chiffres. Simplement, si vous avez bien lu notre texte, on fait toujours référence à ce qui avait déjà été déposé, et c'était l'année de référence.
LISTNUM 1 \l 14484 Et je pense que nos chiffres sont exactement ceux que vous avez indiqués.
LISTNUM 1 \l 14485 M. DION: Peut‑être juste un dernier commentaire, Monsieur Arpin, effectivement, on a les mêmes chiffres, mais à vrai dire, sur les chiffres que vous venez de donner et pour répondre à la question, avec une enveloppe de 18.4, ça libère encore plus...
LISTNUM 1 \l 14486 CONSEILLER ARPIN: Oui.
LISTNUM 1 \l 14487 M. DION: Hein? Ça libère encore plus le Fonds canadien du montant envers TVA.
LISTNUM 1 \l 14488 Donc, au lieu d'être le million que Luc Lavoie parlait, c'était deux millions. Et même, voilà deux ans, ça aurait été trois millions. On a eu une baisse de deux millions cette année qu'on ne comprend pas. Donc, ça aurait été encore plus important, la libération auprès du Fonds canadien.
LISTNUM 1 \l 14489 M. LAMPRON: Soyez assuré, Monsieur le vice‑président, qu'on n'a jamais voulu induire le Conseil en erreur.
LISTNUM 1 \l 14490 CONSEILLER ARPIN: Non. Mais cependant, c'est qu'on constate ‑‑ puis malheureusement, je comprends très bien la problématique à laquelle fait référence Pierre Dion.
LISTNUM 1 \l 14491 Puis les données sur plusieurs années montrent qu'effectivement, une problématique de la télévision hertzienne de langue française qui est assez complexe et pour laquelle je n'ai pas encore trouvé d'explication, mais où l'ensemble des jours qui diffusent et qui accèdent au Fonds, autres que Radio‑Canada, ont tous vu des diminutions appréciables de leur enveloppe (je parle des hertziens, je ne parle pas des spécialisés) malgré que le Fonds, a lui‑même crut, pendant cette période‑là.
LISTNUM 1 \l 14492 Cependant, il faut noter aussi que la bonne performance de Vidéotron fait en sorte qu'elle ‑‑ aujourd'hui, Vidéotron contribue de plus en plus au Fonds et devrait normalement (je suis sûr que corporativement, Quebecor a des attentes à ce que Vidéotron continue sa croissance)... donc que les sommes que Vidéotron est appelé à contribuer au Fonds, vont être en croissance au cours des prochaines années.
LISTNUM 1 \l 14493 Alors que dans le cas de Groupe TVA, pour l'instant, je n'ai pas ‑‑ il me manque d'éclairage en tout cas pour savoir dans quelle direction s'en va les contributions du Fonds.
LISTNUM 1 \l 14494 M. PÉLADEAU: Vous avez raison, monsieur le vice‑président de souligner la volonté de Quebecor Média; de poursuivre le succès, c'est la règle à laquelle on s'assujettit de façon quotidienne.
LISTNUM 1 \l 14495 Donc, le succès de l'entreprise, vous l'avez souligné avec Vidéotron, on espère poursuivre, dans les années qui viennent, avec des services supplémentaires. Comme vous le savez, Vidéotron a évolué de façon significative depuis un certain nombre d'années, dans un environnement monopolistique d'ailleurs, qui était celui qui existait au moment de la création du Fonds des câblos et qui a été également mis en valeur par monsieur Stein, un peu plus tôt.
LISTNUM 1 \l 14496 On fait face aujourd'hui à un environnement extrêmement concurrentiel. Et c'est les citoyens qui ont bénéficié de tous ces services. Et on espère bien pouvoir poursuivre dans cette veine‑là.
LISTNUM 1 \l 14497 Ceci étant, pour insister sur votre argument, c'est qu'on répète que la contribution de Quebecor va doubler. Ça m'étonnerait que Vidéotron ‑‑ ou on l'espère (rire).
LISTNUM 1 \l 14498 Tu sais, je ne passerai pas de 1.5 millions de clients à trois millions en câblodistribution aussi rapidement que dans une période de trois ans, tel qu'on vient de la proposer.
LISTNUM 1 \l 14499 CONSEILLER ARPIN: Je laisse mon collègue, monsieur Morin, poursuivre.
LISTNUM 1 \l 14500 CONSEILLER MORIN: Si on devait ‑‑ si le Conseil vous donnait son aval pour la création d'un fonds, est‑ce que vous seriez d'accord pour une période d'essai de trois ans avec une possibilité, ou en tout cas une date butoir, qu'à la fin de la deuxième année, on déciderait ou pas de prolonger l'aventure?
LISTNUM 1 \l 14501 M. PÉLADEAU: Nous sommes ouverts à toutes les suggestions que le Conseil est prêt à discuter avec nous. On va être d'une ouverture d'esprit indéniable parce qu'on considère, encore une fois, que faire évoluer le paysage audiovisuel canadien est d'une importance capitale pour la collectivité et également pour notre entreprise.
LISTNUM 1 \l 14502 Tout à l'heure, vous posiez la question ‑‑ laissez‑moi peut‑être éventuellement, aussi, donner une illustration qui s'est avérée être une grande perte pour une industrie qui, puis particulièrement également au Québec, a fait ‑‑ et elle est encore importante : le domaine de la musique.
LISTNUM 1 \l 14503 Les artistes n'ont pas vu le développement d'Internet venir. Et aujourd'hui, on constate que cette industrie‑là est en déclin marqué. Et cette technologie qui existait, n'a pas été en mesure de freiner les élans de conservatisme de cette industrie.
LISTNUM 1 \l 14504 On voudrait s'assurer que justement, dans le domaine de la télévision, on puisse avoir des règles adaptées pour s'assurer de la viabilité de cette infrastructure que la collectivité a créée depuis de nombreuses années.
LISTNUM 1 \l 14505 Et si on vit avec des règles qui sont inadaptées, qui sont liées à un environnement où la technologie n'existait pas, je pense qu'on fait fausse route. Et comme on dit en anglais : « At the end of the day... » ça va être l'industrie qui va en souffrir.
LISTNUM 1 \l 14506 Donc, très ouverts à une période d'essai; très ouverts à maintenir le dialogue extrêmement serré avec la commission pour s'assurer que l'ensemble des participants de l'industrie vont rencontrer les objectifs de la Loi sur la radiodiffusion, qui est de stimuler et de maintenir une programmation canadienne de qualité.
LISTNUM 1 \l 14507 CONSEILLER MORIN: Vous comprendrez que votre proposition, c'est une sorte de coup de tonnerre dans le paysage audiovisuel canadien. Ce matin, on avait le groupe Shaw. Et lorsqu'on a posé la question : « Est‑ce que vous avez quelque chose à proposer? » Bien, il n'en avaient pas « quelque chose à proposer. » Ils n'avaient rien d'équivalent à ce que vous, vous proposez.
LISTNUM 1 \l 14508 Si ‑‑ je dis toujours « dans l'hypothèse » où le Conseil dirait oui à votre proposition, de doubler votre contribution, et cetera, il est certain que d'autres, peut‑être...
LISTNUM 1 \l 14509 Ce n'est pas le cas pour l'instant, personne ne propose quelque chose d'équivalent. Mais il se peut que dans un avenir plus ou moins rapproché, d'autres entreprises pourraient peut‑être suggérer un « opting out » comme le vôtre, comme celui que vous proposez.
LISTNUM 1 \l 14510 Dans ce sens‑là, est‑ce qu'il y a un certain nombre de règles que vous pourriez élaborer, que vous pourriez suggérer, vous avez jusqu'au 18 février pour y répondre, qui pourraient aider le Conseil à encadrer, à baliser « l'opting out »?
LISTNUM 1 \l 14511 Je pense par exemple, ça pourrait être vous dites : « On va aller chercher des résultats d'écoute, on va produire davantage, on s'engage véritablement. » Bien, je vous donne un exemple. Est‑ce qu'on ne devrait pas appliquer la même règle : On double ce qui est prévu au cours des trois prochaines années?
LISTNUM 1 \l 14512 C'est toujours un essai de ‑‑ vous venez de dire oui ‑‑ c'est toujours un essai de trois ans avec date butoir pour le renouvellement au bout de 24 mois. Évidemment, ça, ça va un peu sous le sens, c'est de la production « HD ».
LISTNUM 1 \l 14513 Et les résultats d'écoute sont là. Est‑ce qu'il y a un certain nombre de règles que vous pourriez proposer? Peut‑être vous pourriez nous en donner un avant‑goût ce matin, qui pourraient baliser « l'opting out » du Fonds canadien de télévision?
LISTNUM 1 \l 14514 M. LAVOIE: Oui. La réponse est oui. Vous nous donnez une date, qui est le 18 février où on peut vous répondre avec beaucoup plus de détails, mais je me contenterai de vous dire que le concept de départ qu'on propose c'est : « L'opting out » s'accompagne d'une augmentation très substantielle de la contribution à la programmation canadienne. Édouard?
LISTNUM 1 \l 14515 M. TRÉPANIER: J'allais simplement dire que oui, effectivement, pour la phase de réplique, nous ‑‑
LISTNUM 1 \l 14516 CONSEILLER MORIN: Autrement dit, vous pourriez fixer la barre vous‑même. Et ce serait à nous de dire oui ou non, mais vous pourriez fixer la barre vous‑même : Voici, selon nous, des règles qui pourraient être applicables et qui pourraient être présentées par option à d'autres joueurs de l'industrie.
LISTNUM 1 \l 14517 M. LAVOIE: Monsieur Morin, sans aller jusqu'à des règles précises, on peut certainement vous donner un cadre conceptuel de ce qu'on considère être une base équitable pour créer et pour permettre « opting out », je crois.
LISTNUM 1 \l 14518 CONSEILLER MORIN: Merci, beaucoup.
LISTNUM 1 \l 14519 CONSEILLER ARPIN: Merci, Madame la présidente. J'ai plusieurs questions dans plusieurs domaines, mais ma première... et je vais commencer à partir de votre présentation orale de monsieur Péladeau.
LISTNUM 1 \l 14520 Puis je vais aller au paragraphe 5, je crois, qu'il y a une coquille, vous avez dit 2007, mais ça devrait être 2006 ‑‑pour les fins du dossier, pour que les gens...
LISTNUM 1 \l 14521 Parce que vous avez dit :
« We have produced, since our decision on January 23, 2007 to suspend payment... »
LISTNUM 1 \l 14522 But in fact, it was January 23rd ‑‑ Oh! 2007! Pardon me, you we right. I was thinking Decemb‑‑ I was confused with the previous ‑‑
LISTNUM 1 \l 14523 M. PÉLADEAU: Mais monsieur les collaborateurs qui sont chanceux parce qu'ils auraient été virer...
‑‑‑ Laughter / Rires
LISTNUM 1 \l 14524 M. LAMPRON: Mais il y avait... Monsieur le vice‑président, il n'y avait pas de mauvaise intention de votre part? Oh! Non!
‑‑‑ Laughter / Rires
LISTNUM 1 \l 14525 CONSEILLER ARPIN: Non, mais tu sais, je veux dire, il y avait ‑‑ C'est moi qui confondais la date du démarrage du processus avec de Shaw, qui était en décembre 2006. C'est MA confusion, donc : ça m'apprendra de vouloir être pointilleux par moment.
‑‑‑ Laughter / Rires
LISTNUM 1 \l 14526 CONSEILLER ARPIN: Je vais aller ‑‑ On parle de « l'opting out » et dans le sens de la discussion que vous venez d'avoir avec monsieur Morin...
LISTNUM 1 \l 14527 Si le Conseil acceptait votre option de retrait, tout en gelant les sommes au niveau actuel de ce que TVA pourrait retirer, et donc, que l'excédent que Vidéotron pourrait avoir à payer au cours des années, lui, soit versé au Fonds canadien de télévision, qu'est‑ce que ‑‑ auriez‑vous des commentaires à faire sur ce type de proposition?
LISTNUM 1 \l 14528 M. PÉLADEAU: Bien, selon la logique mathématique à laquelle on a fait référence en matière de financement, c'est un ‑‑ on doublerait, donc, les montants liés à la production, la contribution à la programmation canadienne qui serait réglementée, donc, par le fonds Quebecor.
LISTNUM 1 \l 14529 Donc, dans cet esprit‑là, il n'y aurait certainement pas de surplus éventuels que Vidéotron serait appelée à payer dans le cadre actuel de la réglementation. Donc, ça revient un petit peu à ce que je disais tout à l'heure. Ça serait fort étonnant qu'on double le nombre de client au niveau de la câblodistribution.
LISTNUM 1 \l 14530 CONSEILLER ARPIN: Mais pour arriver à 100 millions sur trois ans... en fait, vous dites 16 millions et demi, ça fait 33, trois ans ça fait, en arrondissant... on arrive à 100 millions.
LISTNUM 1 \l 14531 Maintenant, les contributions (comme je vous l'ai dit) de Vidéotron sont en croissance sur une base annuelle. Et quand même une croissance intéressante de 1 600 000. Si ‑‑ ce 1 600 000 supplémentaire de... est‑ce que lui aussi serait doublé dans ce cas‑là, selon votre scénario qui finalement, à la fin, ça ne serait pas 100 millions, mais ça serait ‑‑ On s'approcherait peut‑être à 110 millions?
LISTNUM 1 \l 14532 M. PÉLADEAU: La contribution actuelle est autour de 16 millions. On peut prévoir, effectivement, peut‑être, une croissance, au niveau de notre clientèle.
LISTNUM 1 \l 14533 Malheureusement, on a comme politique de ne pas donner de projection sur notre augmentation, mais on constate quand même que pour l'exercice 2007, on a bénéficié, tel que vous l'avez indiqué, d'une augmentation de notre clientèle au niveau de la câblodistribution.
LISTNUM 1 \l 14534 CONSEILLER ARPIN: D'une part, mais aussi une augmentation des tarifs.
LISTNUM 1 \l 14535 M. PÉLADEAU: Exactement. C'est ce que j'allais indiquer. Au niveau, donc, de la télévision numérique, un client numérique génère davantage de revenus qu'un client analogique. Il a davantage de liberté et davantage, également, accès à des services qui n'existaient pas en matière analogique.
LISTNUM 1 \l 14536 Et on pense que c'est pour le bénéfice donc du citoyen d'être ainsi. Mais c'est certain que cette croissance‑là ne pourra jamais s'approcher (et de loin) de cette contribution supplémentaire qu'on veut proposer, c'est‑à‑dire un doublement de notre contribution.
LISTNUM 1 \l 14537 Ça, ça serait irréaliste de penser qu'on va pouvoir doubler les revenus en distribution, que ce soit par le biais d'une augmentation de nos clients ou une augmentation du revenu généré par client.
LISTNUM 1 \l 14538 M. LAMPRON: Je me permets, sur cette question‑là, Monsieur Arpin, de vous signaler que dans notre proposition on augmentait notre contribution à l'année un. Et on propose justement de l'augmenter de 20 pour cent par année pour tenir compte de ces phénomènes de croissance que vous évoquez.
LISTNUM 1 \l 14539 CONSEILLER ARPIN: Maintenant la contribution excédentaire, si je comprends bien, elle est versée par Vidéotron. Elle n'est pas ‑‑ Ce n'est pas pris à même les budgets d'opération de TVA ou en provenance de Quebecor Média, elle?
LISTNUM 1 \l 14540 M. PÉLADEAU: Éventuellement...
LISTNUM 1 \l 14541 CONSEILLER ARPIN: Ça vient de Quebecor Média, oui, mais...
LISTNUM 1 \l 14542 M. PÉLADEAU: Bien c'est ça. Éventuellement, Monsieur le vice‑président, on déterminera les modalités avec vous ou ‑‑ Mais c'est certain que ça fait partie quand même d'un ensemble corporatif, là. Quebecor... TVA est une entité publique, comme vous le savez, une entreprise qui a elle‑même, donc, vocation de ‑‑ est publique. Elle a un conseil d'administration.
LISTNUM 1 \l 14543 D'ailleurs comme vous le savez, ses conditions de licence exigent que les administrateurs soient, de façon majoritaire, indépendants. Elle va demeurer publique (en tout cas certainement jusqu'à la semaine prochaine) et elle a ses propres actionnaires, ses propres créanciers, ses propres employés.
LISTNUM 1 \l 14544 Ensuite, elle est une filiale de Quebecor Média. Vidéotron est une filiale, elle, également de Quebecor Média à 100 pour cent. Donc, on déterminera quelles vont être les modalités de part et d'autre, de ce qui semble être quand même une réalité corporative à laquelle on doit travailler dans un environnement aussi de ce qu'on appelle de gouvernance d'entreprise.
LISTNUM 1 \l 14545 M. LAMPRON: Et dans ‑‑ encore une fois, je m'excuse. Mais dans la proposition que nous vous avions acheminée et qui sont dans les documents qui y sont déposés ‑‑ et puis on ne l'a pas remis à l'intérieur du paragraphe, mais je vous rappelle qu'il y avait également l'engagement que TVA maintiendrait de son niveau, ses contributions à la programmation tel qu'historiquement ça a été observé.
LISTNUM 1 \l 14546 Ce qui veut dire que ‑‑ se servira pas de ce fonds pour que TVA ne joue pas son rôle de diffuseur.
LISTNUM 1 \l 14547 CONSEILLER ARPIN: D'accord. Dans votre présentation orale et puis dans une lettre que monsieur Dion faisait parvenir au Conseil (à mon attention, au Conseil) en juin 2007 et qui fait partie du dossier que vous avez déposé aujourd'hui, on traite des traits distincts du marché francophone.
LISTNUM 1 \l 14548 Et dans votre présentation orale, vous vous attachez particulièrement au fait que, finalement, l'indice de mesure du coût par mille fait en sorte que vous êtes 21 pour cent moins productif que le marché ontarien.
LISTNUM 1 \l 14549 Et que finalement, ça a comme incidence que les investissements publicitaires au Québec sont moins importants qu'ils le sont dans le marché ontarien. Et je crois que c'est aussi ‑‑ enfin, peut‑être pas en dollars totaux, mais en termes de dollar per capita, c'est aussi vrai avec les provinces de l'Ouest canadien.
LISTNUM 1 \l 14550 Est‑ce que vous ‑‑ je suis sûr que c'est une question sur laquelle vous vous êtes penchés 100 fois ‑‑ Est‑ce que vous avez trouvé une explication rationnelle?
LISTNUM 1 \l 14551 M. LAVOIE: Des fois on aime mieux ne pas y penser.
‑‑‑ Laughter / Rires
LISTNUM 1 \l 14552 M. LAMPRON: On n'a pas tout à fait le même point de vue, aussi.
‑‑‑ Laughter / Rires
LISTNUM 1 \l 14553 M. PÉLADEAU: Sur la distinction du marché francophone et du marché anglophone au niveau publicitaire, vous voulez dire?
LISTNUM 1 \l 14554 CONSEILLER ARPIN: Oui, notamment.
LISTNUM 1 \l 14555 M. LAVOIE: Il y a une différence de 21 pour cent.
LISTNUM 1 \l 14556 CONSEILLER ARPIN: Parce que cet écart‑là ‑‑ Puis, je sais que cette année, il y a aussi un écart et peut‑être pas de l'ordre de 21 pour cent, mais il y a aussi un écart défavorable avec les provinces que sont l'Alberta et la Colombie‑Britannique, pour avoir vu les données, dans le passé.
LISTNUM 1 \l 14557 M. LAVOIE: J'imagine que ça a un peu à voir avec la richesse relative des entités que sont l'Ontario, le Québec et l'Ouest. Ça ne répond pas à tout, mais ça a certainement un rôle à jouer.
LISTNUM 1 \l 14558 M. LAMPRON: Dans nos consultations avec, justement, nos collègues qui font des placements publicitaires et tout ça, on évoque effectivement tout un ensemble de raisons.
LISTNUM 1 \l 14559 Il y a des concentrations de populations, les niveaux de richesse, la concentration, si voulez, de la prise de décisions davantage vers Toronto que vers Montréal, une connaissance peut‑être moins importante du marché francophone, de ses vedettes et de cette capacité à générer. Le fait qu'effectivement, on génère des auditoires qui sont sans aucune commune mesure avec ce qui s'observe sur l'ensemble nord‑américain.
LISTNUM 1 \l 14560 Donc, plus de difficultés probablement pour eux de, je dirais, monétiser (pour employer l'expression), ces choses‑là. Donc, il y a toute une série d'ensemble de facteurs, puis je n'entrerai pas dans la socio‑politique, mais il y a toute une série de facteurs de cette nature qui nous sont évoqués.
LISTNUM 1 \l 14561 Le fait brutal, c'est que malgré qu'on puisse ouvrir des bureaux à Toronto, qu'on puisse intervenir ‑‑ et puis je pense qu'on a quelqu'un qui y a travaillé puis qui est très compétent ‑‑ c'est que cet écart‑là, il est constant et il fait en sorte que ce que nous avons décrit se produit.
LISTNUM 1 \l 14562 M. DION: Oui, bien, effectivement, je pense que tout ce qui a été dit est très vrai. Et je rajouterais que la réalité aussi au quotidien qu'on vit, c'est que tu as un marché où premièrement la télévision d'État a une part de marché très très très importante comparativement au Canada anglais.
LISTNUM 1 \l 14563 Et naturellement, leur stratégie publicitaire, des revenus publicitaires, elle est très différente de la nôtre. Donc, on a cette réalité‑là. Il y a aussi un joueur comme TQS dont vous connaissez la situation et aussi les chaînes spécialisées qui ont un inventaire publicitaire beaucoup plus important aujourd'hui.
LISTNUM 1 \l 14564 Donc, on se ramasse dans un marché où il y a trop d'inventaire publicitaire avec un joueur public d'État qui prend une grande part de marché et TVA se retrouve justement dans une situation où le coût par mille est dévalué par rapport à sa vraie valeur, mais n'est pas dans un environnement qui permet de favoriser une hausse du coût par mille, comme c'est le cas dans le marché ontarien, à titre d'exemple.
LISTNUM 1 \l 14565 M. PÉLADEAU: Monsieur le vice‑président, je pense qu'on est en train d'empiéter sur la prochaine audience publique.
LISTNUM 1 \l 14566 CONSEILLER ARPIN: Oui, mais quand même ‑‑
LISTNUM 1 \l 14567 M. PÉLADEAU: La distribution ‑‑
LISTNUM 1 \l 14568 CONSEILLER ARPIN: Oui. C'est vrai. Mais sauf qu'effectivement, une des raisons pour laquelle vous mettez de l'avant l'option de retrait c'est aussi les caractéristiques du marché francophone par rapport au marché anglophone. Donc, c'est pour ça que je me sens un peu dans l'obligation de d'avoir un portrait le plus compréhensif possible pour être en mesure d'assister le Conseil dans sa décision.
LISTNUM 1 \l 14569 Monsieur Morin vous a posé une question par rapport l'utilisation de la production indépendante et puis essayer de savoir quelle serait la proportion d'émissions faites par les producteurs indépendants par rapport à celle réalisée par une filiale.
LISTNUM 1 \l 14570 Monsieur Lampron nous a dit que les règles exigeaient que 75 pour cent des émissions prioritaires soient faites par des producteurs indépendants; monsieur Lavoie nous a dit ‑‑ nous a fait un commentaire à ce sujet‑là.
LISTNUM 1 \l 14571 Monsieur Dion, vous avez dit que vous ne pouviez pas faire d'émissions de variétés parce que l'émission que vous proposez, vous voulez la faire par une société filiale, et les sommes qui vous sont allouées par le Fonds, actuellement, vous contraignent à ne pas être capable ‑‑ à ne pas accéder au Fonds pour produire votre émission de variétés.
LISTNUM 1 \l 14572 Donc si je comprends bien, malgré l'ensemble des réponses qu'on a, certainement vous voudriez toujours aller de l'avant avec votre projet d'émission de variétés, puis vous voudriez qu'elle soit financée en bonne partie par le fonds Quebecor?
LISTNUM 1 \l 14573 M. DION: Tout ce que je disais... Je ne disais pas qu'on n'offrait pas cette émission de variété‑là. Tout ce que je disais, j'essayais d'exprimer, c'est qu'il y a eu beaucoup de discussions dans les trois derniers jours : pourquoi que le contenu canadien, on n'a pas eu plus de succès au cours des dernières années à réellement créer soit des formats ou des séries dramatiques qui ont vraiment un potentiel à l'international?
LISTNUM 1 \l 14574 Et là, moi j'ai un exemple concret qui démontre que oui, on peut faire la variété quand même, pour le mois de septembre. Mais on a une occasion extraordinaire, une preuve extraordinaire que ‑‑ on cherchait tout à l'heure la formule gagnante pour avoir du succès à l'international, bien ça serait justement d'approcher ce genre de variétés‑là dans un concept ou on a la capitalisation nécessaire pour créer avec un nouveau fonds; la capitalisation nécessaire pour créer vraiment un format qui a vraiment le potentiel d'être compétitif à l'échelle internationale et, en plus, penser dans un contexte de différents canaux de distribution qui reflètent la réalité actuelle.
LISTNUM 1 \l 14575 Ça fait que je ne disais pas qu'on ne peut pas le faire, je fais juste dire ‑‑ J'essayais d'exprimer qu'on a une preuve concrète de l'opportunité qu'on aurait, en tant que joueurs du paysage télévisuel canadien, de commencer avec une nouvelle structure pour vraiment avoir du succès avec nos émissions canadiennes, ce que d'autres joueurs à travers le monde ont compris et ont fait.
LISTNUM 1 \l 14576 Et là, nous, on ne le fait pas présentement, à cause des structures actuelles.
LISTNUM 1 \l 14577 CONSEILLER ARPIN: J'entends bien ce que vous dites. Vous avez, dans votre présentation orale, monsieur Péladeau, fait allusion aux difficultés que ‑‑
LISTNUM 1 \l 14578 Et monsieur Lampron avait longuement élaboré, au niveau du conseil, à discuter puis même d'arriver à obtenir du financement pour des multiplatesformes, et particulièrement le VOD, parce qu'au moment ou, en 2006, les discussions ont eu lieu, la vidéo sur demande était pour vous une haute priorité mais ‑‑
LISTNUM 1 \l 14579 Je pense qu'elle le demeure tout le temps, toujours. Mais à ce moment‑là, elle l'était particulièrement et peut‑être que les nouvelles plateformes d'Internet, elles étaient là, mais elles n'avaient certainement pas la performance qu'elles ont aujourd'hui en terme de capacité puis de transport, ça m'amène à ‑‑
LISTNUM 1 \l 14580 Et vous avez fait une remarque à savoir que finalement vous avez ‑‑ Il y a des chicanes, au niveau du conseil d'administration du Fonds canadien qui font en sorte que rien ne puisse débloquer. Cependant, on sait et c'est assez évident que tout ça aussi, tous ces acharnements de part et d'autre à vouloir arriver à une solution découle de ce qu'on appelle en anglais les « terms of trade » et qui, pour l'instant, ne sont pas encore réglées, du moins à ma connaissance.
LISTNUM 1 \l 14581 Ma question est plus ‑‑ parce que je sais que le Conseil dans certaines de ses décisions récentes en a fait allusion, aux fameux « terms of trade », mais comme on n'a pas eu de décisions récentes qui ont impliqué Groupe TVA, on n'a pas pu en parler avec vous.
LISTNUM 1 \l 14582 Mais est‑ce qu'il y a effectivement, quand même, des discussions entre les différents organismes représentant des ayants droits et Groupe TVA? Et si oui, qu'est‑ce que vous pouvez nous dire, à ce sujet‑là? Je comprends que c'est des discussions qui sont de nature confidentielle, s'il y en a. S'il n'y en a pas c'est moins confidentiel,
LISTNUM 1 \l 14583 M. DION: Mais je pourrais dire que depuis deux ans, il y a effectivement eu (peut‑être même trois ans) y a eu différentes rencontres entre différents intervenants de l'industrie. La problématique de base et pourquoi qu'on en arrive toujours à une impasse, c'est qu'on n'a pas l'air à tous comprendre la réalité du marché actuel.
LISTNUM 1 \l 14584 Donc, lorsque dans une discussion on ne s'entend pas sur le point de départ, c'est‑à‑dire la réalité dont fait face les généralistes, puis là je ne commencerai pas à répéter, effectivement, tout ce qu'on sait au niveau de la fragmentation et cetera, et cetera, mais c'est difficile d'en arriver à des solutions.
LISTNUM 1 \l 14585 Mais je pense qu'aujourd'hui on a démontré qu'on avait une solution qui permettrait à tous les joueurs avec l'augmentation importante de l'investissement dans le contenu canadien ‑‑ c'est clair, les chiffres sont là pour le prouver que tous les joueurs de l'industrie au Québec vont en bénéficier.
LISTNUM 1 \l 14586 C'est quand tu doutes des investissements puis encore là, je ne répéterai pas ce que Pierre‑Karl a dit, mais les créateurs, les concepteurs et cetera, vont tous... et les producteurs vont tous en bénéficier comme tel.
LISTNUM 1 \l 14587 Puis Luc Lavoie l'a mentionné également, TVA ne serait pas capable de tout créer, et de tout produire. C'est impossible logistiquement. Puis TVA n'a pas le monopole des bonnes idées. Et ce serait une grave erreur de penser qu'on l'a.
LISTNUM 1 \l 14588 Et c'est pour cela que je pense que les forces du marché feraient qu'on veut rester numéro un et on trouverait des ententes éventuelles avec les producteurs. Sauf qu'encore là, il faudrait que tout le monde puisse admettre une fois pour toutes que le statu quo n'est pas acceptable et il faut drastiquement trouver des nouvelles solutions pour recommencer à faire, entre autres, au niveau des dramatiques, le genre de séries qu'on faisait dans le passé, mais sous un autre modèle d'affaires.
LISTNUM 1 \l 14589 CONSEILLER ARPIN: Je me vois contraint de vous poser quand même un certain nombre de questions au moins pour avoir un dossier complet et qui vont traiter plutôt cette fois‑ci que finalement, le Fonds canadien demeure et puis Vidéotron est appelée à y contribuer. Et l'option de retrait n'a pas été retenue par le Conseil et puis donc...
LISTNUM 1 \l 14590 Alors, si j'ai bien compris monsieur Lampron quand il a fait sa description de la dynamique du conseil d'administration, est‑ce que je peux voir ça comme étant un plaidoyer pour un conseil d'administration exclusivement formé d'administrateurs indépendants non liés et que ‑‑ Donc, faire sorte qu'au Fonds canadien on ne retrouve aucun représentant des radiodiffuseurs, des distributeurs et des producteurs, comme c'est le cas présentement.
LISTNUM 1 \l 14591 Et évidemment, encore moins les autres qui nous ont demandé, au cours des derniers jours d'avoir droit, également, à un siège au conseil du Fonds canadien.
LISTNUM 1 \l 14592 M. LAMPRON: Je pense que vous avez bien compris, dans la démonstration que j'ai tenté de faire était la description d'un Fonds canadien en son état avec les modes de gestion qui illustraient, avec les résultats que vous avez entendus depuis deux jours les représentants revenir les uns après les autres pour plaider en faveur du statu quo actuel.
LISTNUM 1 \l 14593 Nous avons une seule proposition, Monsieur Arpin. C'est la proposition « d'opting out », parce que nous pensons vraiment que le Conseil ‑‑
LISTNUM 1 \l 14594 CONSEILLER ARPIN: Donc, en d'autres mots ‑‑
LISTNUM 1 \l 14595 M. LAMPRON: Nous pensons vraiment que le Conseil, dans sa grande sagesse, va reconnaître cette opportunité de pouvoir, justement, rencontrer à la fois les objectifs publics et à la fois les objectifs que nous avons décrits. Et je ne pense pas que nous ayons l'intention, si vous voulez, d'élaborer sur une deuxième préférence qui n'existe pas.
LISTNUM 1 \l 14596 CONSEILLER ARPIN: Donc, si le Conseil n'adhérait pas à votre proposition, bien, vous continueriez à être désolés de ne pas avoir été compris et puis vous accepteriez de vivre dans le système qui serait proposé?
LISTNUM 1 \l 14597 M. LAVOIE: Monsieur le vice‑président, on a toujours respecté les règles qui ont été édictées par le Conseil et on va continuer de le faire, mais on n'a pas de deuxième choix.
LISTNUM 1 \l 14598 On est sincèrement convaincus que le Fonds, tel qu'il existe, est nuisible et néfaste à la production canadienne de télévision parce qu'il refuse de s'adapter à son évolution et ce marché‑là. Et ça ne serait franchement pas honnête, et même une forme de sophisme que d'essayer de vous répondre : « Eh bien, comme deuxième choix, nous préférons ceci ou cela. » On n'a pas de deuxième choix.
LISTNUM 1 \l 14599 CONSEILLER ARPIN: D'accord. Donc, ça ne me donne rien de vous demander ce que vous pensez de la lettre que monsieur Lind vous a fait parvenir, Monsieur... ‑‑ qu'il a fait parvenir à monsieur Barrett, mais dont vous‑même, Monsieur Lavoie avez reçu une copie?
LISTNUM 1 \l 14600 M. LAVOIE : Bien, monsieur Lind est quelqu'un que je respecte énormément. J'ai bien sûr lu la lettre de monsieur Lind. J'en ai pris connaissance et j'ai trouvé qu'elle était fort bien écrite. Merci.
LISTNUM 1 \l 14601 CONSEILLER ARPIN: Bienvenue. Je n'ai plus de questions, Madame la présidente.
‑‑‑ Laughter / Rires
LISTNUM 1 \l 14602 THE CHAIRPERSON: I do have some further questions for you and I do apologize, but I will be asking you in English. And the questions I have relate to your opting out proposal. You put something concrete on the table, we are going to want more details.
LISTNUM 1 \l 14603 How do you respond to those who say that the financing of Canadian content is complicated enough and by adding yet another fund to the whole system you are just increasing that complexity and adding another layer, perhaps, of confusion because this might have more rules, it might have different rules, might have fewer rules, but in the end it is another layer of complexity?
LISTNUM 1 \l 14604 MR. PÉLADEAU: Well, I think that, you know, our proposal is pretty simple. It is, you know, getting rid of all those rules. And the dollar that will be spent will be a dollar spent in the Canadian broadcasting system. There are not going to be any sources of, you know, bureaucrat fees or admin or stuff like that.
LISTNUM 1 \l 14605 You know, we really think that, you know, spending the money, as we say in French, you know, à l'écran would be a pure and a complete benefit for, you know, the Canadian landscape and all the people that work around us.
LISTNUM 1 \l 14606 THE CHAIRPERSON: Okay. Now, obviously, I understand that you have put forward the best proposal that will work for your company, that is obvious. But are you suggesting that the Commission amend the Regulations for all BDUs to have the option to opt out of contributing to the CTF?
LISTNUM 1 \l 14607 MR. PÉLADEAU: I would like also, you know, to emphasize the fact that I don't think it is only for the benefit of Quebecor Media, I think ‑‑
LISTNUM 1 \l 14608 THE CHAIRPERSON: No, no, but what I mean, it is what works best for you in terms of how you want to see Canadian content funded, that is what I mean. It is what works best for you and you have every right to do that.
LISTNUM 1 \l 14609 MR. PÉLADEAU: Yes, but I think it goes, you know, further than only being good for Quebecor Media. I think it is good for the entire industry. And the entire industry will benefit from, you know, this additional contribution that is not there today. And, you know, it will be done with a more efficient way that opens the doors to possible capacity to build something that will be exportable.
LISTNUM 1 \l 14610 And, as we have been seeing some strong Canadian industry being able to export and to be able to be champions in their own activities, you know, there is no reason why that, you know, where we have been subsidizing this industry for so long with that amount of money that we are not going to be able to do that.
LISTNUM 1 \l 14611 So for the second part of your question, I guess that, you know, certainly something that the Commission would need to deal with, I don't think it is our role as a participant in the industry, you know, to figure out what will be the Commission's decision. What we think is, you know, what we are proposing is in the best interest of the Canadian broadcasting landscape. And, from there, obviously this is the only thing we can do or we can say, because we are not, you know, ruling other than what we are able to say.
LISTNUM 1 \l 14612 MR. LAVOIE: In other words, if I may add, we don't have any mandate to speak on behalf of any other BTUs. And what we are proposing, by definition, opting out would mean that there is still something left. I mean, it is up to the rest of the system in cooperation and in discussion and dialogue with you to determine what the best way is to serve the Canadian system because, after all, that is what the law says. We are not here speaking on behalf of anybody else than who we are.
LISTNUM 1 \l 14613 THE CHAIRPERSON: No, but we are just trying to gather as much information as we possibly can ‑‑
LISTNUM 1 \l 14614 MR. LAVOIE: I understand.
LISTNUM 1 \l 14615 THE CHAIRPERSON: ‑‑ from the different perspectives and, therefore, put opinions on the table ‑‑
LISTNUM 1 \l 14616 MR. LAVOIE: We understand.
LISTNUM 1 \l 14617 THE CHAIRPERSON: ‑‑ that matter. You know, because Rogers did come and they had a different proposal than yours, and that is a separate fund, a separate governing body, a separate board of directors for that fund, but still administered by the CTF where that fund would only receive contributions from private companies and not any public money.
LISTNUM 1 \l 14618 And so, with your proposal, our job now is to see, okay, well what are the differences between those two proposals ‑‑
LISTNUM 1 \l 14619 MR. LAVOIE: Yes.
LISTNUM 1 \l 14620 THE CHAIRPERSON: ‑‑ and what is going to work best for the Canadian broadcasting system.
LISTNUM 1 \l 14621 MR. LAVOIE: Right.
LISTNUM 1 \l 14622 THE CHAIRPERSON: So is the Rogers proposal acceptable to you? Should we say, you know what, Quebecor was a great proposal but we just can't go that far so we are going to stick with the Rogers proposal?
LISTNUM 1 \l 14623 MR. LAVOIE: Well, as I said to ‑‑ and I fully respect what you are doing now ‑‑ but as I said to Mr. Arpin earlier, we have one clear proposal and we believe that, you know, it is a well thought‑out rigorously developed proposal, we believe that it is the only proposal that will help serve best the system of broadcasting in Canada.
LISTNUM 1 \l 14624 And, no, we don't disagree or agree with Rogers, it is a completely different approach in a completely different market.
LISTNUM 1 \l 14625 THE CHAIRPERSON: Would public broadcasters be able to access let us call it the QMI fund just for the sake of identity?
LISTNUM 1 \l 14626 MR. LAVOIE: Of course not. Because when it comes to public broadcasters or state broadcasters we always feel, and I certainly do, and as a corporation we do, that trying to mix private broadcasters and state broadcasters will never work, because we are accountable to different entities. We are accountable to our shareholders, they are accountable to the Parliament of Canada.
LISTNUM 1 \l 14627 We don't have to determine the level of funding that the state broadcasters should receive. This should be done by the Parliament of Canada because this is where they are accountable. And if the Parliament of Canada comes to the conclusion that the funding level is inadequate and it should come up, it should raise, well, it is their decision.
LISTNUM 1 \l 14628 It shouldn't be mixed with us, because we are two different animals, so different that when you mix the two you are trying to accomplish something that we think is not fair. It is a way of trying through the backdoor to get something that ‑‑ I mean, if indeed the state broadcasters should have more money, let the parliamentarians, that is the way the democratic system works, decide. If they think that they receive too much, let them decide. Their accountability is there, ours is to our shareholders.
LISTNUM 1 \l 14629 THE CHAIRPERSON: What about broadcast‑affiliated production companies? You heard Corus yesterday saying that Nelvana should be able to make use of the CTF fund. Would Nelvana, just for example, be able to make use of the QMI fund?
LISTNUM 1 \l 14630 MR. LAVOIE: We certainly agree with that, yes.
LISTNUM 1 \l 14631 THE CHAIRPERSON: Thank you very much, gentlemen. Those are all our questions, thank you.
LISTNUM 1 \l 14632 M. PÉLADEAU: Merci, Madame le Président.
LISTNUM 1 \l 14633 THE CHAIRPERSON: We will take 15 minutes.
LISTNUM 1 \l 14634 MR. LAVOIE: Thank you, merci.
‑‑‑ Upon recessing at 1121 / Suspension à 1121
‑‑‑ Upon resuming at 1140 / Reprise à 1140
LISTNUM 1 \l 14635 THE SECRETARY: We will now hear the presentation of CanWest MediaWorks. Please introduce yourself, and you have 15 minutes. Thank you.
PRESENTATION / PRÉSENTATION
LISTNUM 1 \l 14636 MR. MEDLINE: Good morning, commissioners and Commission staff.
LISTNUM 1 \l 14637 CanWest is pleased to participate in the oral phase of this important and comprehensive proceeding regarding the future of the Canadian Television Fund.
LISTNUM 1 \l 14638 My name is Jon Medline, I am the Vice‑President of Regulatory Affairs at CanWest. Seated to my immediate right is Barb Williams, Executive Vice‑President of Content. Barb oversees the acquisition, production and scheduling of content on all of CanWest's domestic television assets and digital media platforms.
LISTNUM 1 \l 14639 To Barb's right is Christine Shipton, Senior Vice‑President of Drama and Factual Content. Christine is in charge of developing and commissioning dramatic and factual programming for all of CanWest's specialty services in addition to the priority programming slates for our Global and E! conventional television stations. And at the far end of the row is Tara Ellis, Vice‑President of Showcase and Drama Content.
LISTNUM 1 \l 14640 For clarity, we note that no member of the CanWest panel currently sits on the CTF board.
LISTNUM 1 \l 14641 At the outset we want to be clear, we support the CTF and its envelope system. It serves an important role in the Canadian broadcasting system, it enables the creation of quality Canadian television programs. But, like all organizations, including our own, there comes a time when we have to step back and consider ways to change and improve, and we are pleased that the CRTC has provided such an opportunity.
LISTNUM 1 \l 14642 We support the task force proposal to have one administration oversee two streams of funds, including a private‑sector stream derived from BDU contributions to be directed to private broadcaster envelopes. We further believe that audience success with an eye to maximizing audiences to Canadian programming should be the foundation of the private sector stream.
LISTNUM 1 \l 14643 In today's presentation, we focus primarily on audience measurement tools with a goal to meet the task force's stated objective, that these funds should be allocated using the BPE system and implemented by way of the simplest possible program guidelines. And, of course, following our presentation we would be pleased to address the task force's other recommendations, including those related to benefits packages and return on investment.
LISTNUM 1 \l 14644 MS WILLIAMS: It is unlikely that the industry will undertake such an in‑depth study of the CTF again anytime soon, so we use this opportunity to step way back and consider how we arrived here.
LISTNUM 1 \l 14645 And what we discovered is that a few simple decisions related to funding have had far‑reaching impacts. First, in 2005/2006 the CTF board made a decision to adopt broadcaster envelopes for drama and used as its metric 100 per cent historic access from the years 2002/2003 through 2005/2006.
LISTNUM 1 \l 14646 The results of that decision and the arbitrary choice of those three years as the metric will have long‑lasting consequences for all parties involved in CTF drama funding, because that baseline established and then locked in huge discrepancies between the major conventional broadcasters. Moreover, the current formula has continued to perpetuate reliance on historic access and other funding criteria unrelated to audience success.
LISTNUM 1 \l 14647 In fact, a full 60 per cent of the current formula is unrelated to audience success. This allocation does not reflect one of the task force's central recommendations and this is the disconnect that we hope to address today.
LISTNUM 1 \l 14648 In preparation for this appearance CanWest carefully assessed the 2007/2008 CTF broadcaster performance envelopes. We particularly focused on the English‑language envelope and, specifically, excluded the CBC and other educational services to see what the world would have looked like under a two‑stream model. And what we discovered was astonishing. The remaining English‑language performance envelope would have been about $103 million in 2007/2008. The conventional share of that number, under $28 million.
LISTNUM 1 \l 14649 In other words, English‑language conventional stations would have accounted for less than 27 per cent of the private English‑language envelope. This level is inappropriate even if you ignore the regulatory obligations placed on conventional stations, including the eight hours of priority programming and peak viewing hours.
LISTNUM 1 \l 14650 In a continually fragmenting world the conventional platform still offers the most opportunity for audience success and it is especially adept at maximizing audiences to first window exhibition. We believe it is the platform that offers the best chance for a new domestic program to reach a mass audience and that that success then flows to other windows and other platforms.
LISTNUM 1 \l 14651 Simply, if the Commission wishes to assign audience success as the primary objective of the private sector stream, then it must address the arbitrary allocation of funding between conventional and specialty.
LISTNUM 1 \l 14652 When we consider recent total hours tuned data, and that is a metric we will discuss in a moment, a more appropriate allocation to English‑language conventional stations would be about 50 per cent with the remaining 50 per cent going to specialty services and, over time, these allocations would be assessed and updated to reflect changing viewing patters.
LISTNUM 1 \l 14653 To be clear, we don't downplay the role of specialty in the system. But when Teletoon English, a single specialty service typically carried on cable's third tier, has an envelope allocation of $12.2 million in 2007/2008, $4 million more than the entire allocation to CanWest conventional stations and $11.1 million more than the last CHUM conventional allocation, then it is time to readjust the formula, especially if audience success is to be the key criterion.
LISTNUM 1 \l 14654 MS SHIPTON: But correcting the allocation between conventional and specialty only solves part of the problem. In fact, if we only address that issue, the funding allocation problem gets worse.
LISTNUM 1 \l 14655 When we exclude the CBC, the current formula managed to allocate two‑thirds of the available conventional funding to one company, CTV. And if the conventional share goes up to 50 per cent, CTV would simply take two‑thirds of this higher amount. Also, due to the historic access criterion, this advantage would be locked in forever, since each successive year relies on the year before.
LISTNUM 1 \l 14656 From a CanWest standpoint, our attention to high‑quality Canadian drama over the past two years goes unrewarded since historic access locked in our disadvantage years ago. Such concentration of funding is not good for the Canadian broadcast system.
LISTNUM 1 \l 14657 It obviously limits CTF participation by broadcasters raising a fundamental question of fairness and it creates an awkward competitive environment where certain parties must finance more of their priority programming outside of the CTF, essentially forcing these parties to commission lower cost drama, often in restrictive partnerships, or to commission alternative priority programming genres. It also hurts the independent production community, since effectively only one of the doors they are knocking on has the capacity to fund multiple big‑budget projects.
LISTNUM 1 \l 14658 There is a straightforward solution to this problem. Replace the current formula with a simple and appropriate measurement tool, hours tuned to the station, and then let the market incentives of the envelope system takeover.
LISTNUM 1 \l 14659 We submit that the approach to focus on is the environment of success rather than individual show performance. Frankly, this is far less complex and more appropriate for allocating CTF funding.
LISTNUM 1 \l 14660 As you have heard all week, if there is one thing we know as television executives, producers or broadcasters here, in Hollywood or anywhere else, it is that success of a given show or slate of shows cannot be guaranteed, but chances of success are improved if the environment is supportive of success.
LISTNUM 1 \l 14661 MS WILLIAMS: So what do we mean by hours tuned to the station and why do we feel this is the appropriate metric and why is it better than just reach and why shouldn't we just look at the success of individual shows supported by the CTF and the so‑called CTF‑ables?
LISTNUM 1 \l 14662 We have an analogy for you here. Picture a football stadium. And if it is empty and if no one shows up, then no matter how good the game may be, it has clearly not met any meaningful audience success criteria. But now, let us say a throng of fans rush through the turnstiles, the stadium is packed, but at the end of the first quarter they all get up and walk out. They don't hear the stadium announcer promote other stadium events or even the next game.
LISTNUM 1 \l 14663 In television measurement terms that game would have had big reach, the size of the audience would be measured by the turnstile. But the opportunities to promote other activities and any real gauge of audience satisfaction would be absent. They came, but they didn't stay very long.
LISTNUM 1 \l 14664 But now, picture those same fans streaming into the stadium and staying for the whole game, you make them comfortable, cushy seats, a friendly atmosphere and, of course, a good game, a good show. They are going to hear the stadium announcer promote those other stadium events, the next game and the game after that. They will be exposed to multiple promotions all over the stadium. In other words, as a smart stadium operator, you have now created an environment that maximizes the opportunity for more participation and bigger audiences.
LISTNUM 1 \l 14665 The television equivalent is total hours tuned and it represents the number of people reached by a given channel, just called reach, multiplied by average mitted audience, how long they stayed in that stadium, and then converted to hours. The metric accounts for the environment that exposes larger audiences to Canadian programming from underrepresented genres and helps build word of mouth.
LISTNUM 1 \l 14666 Let us look at the situation we now have on conventional, and I acknowledge I have rounded some of these numbers here a little bit. Currently, the $18.5 million goes to CTV, $8.2 million goes to CanWest, and about $1 million goes to Rogers Media and others. If we use the current funding methodology and increase the allocation to conventional to 50 per cent, then the 2007/2008 result would have looked like this; $34 million to CTV, $15 million to CanWest, and $2 million to Rogers Media. We would not consider this to be an equitable allocation of conventional funding.
LISTNUM 1 \l 14667 If we apply total hours tuned, however, instead of the current formula, the playing field naturally adjusts and the market incentives of the envelope system takeover. For example, if we use the adult 18‑49 demographic, here is what the allocation would have looked like then, $23 million to CTV, $19 million to CanWest and $10 million to Rogers Media. And, frankly, if we used adult 25‑54 as the demo the results would be similar. Now, that is a much more fair allocation. And note that the biggest beneficiary of this change is not CanWest, but Rogers.
LISTNUM 1 \l 14668 MS ELLIS: The specialty part of the equation requires some additional consideration. Only those services that participate in a meaningful way and recognize CTF genres should be allowed to access the fund. And we submit that the most appropriate allocation methodology is as follows.
LISTNUM 1 \l 14669 Step 1, allocate half the English‑language performance envelope to speciality services, an allocation to be reassessed on a regular basis. Step 2, determine an allocation percentage for each of the four programming genres. The CTF board should be responsible for setting the genre allocations. But let us assume for today that the current allocations stay constant.
LISTNUM 1 \l 14670 Step 3, allocate funding to each eligible specialty service within each genre, and here we mirror the approach to conventional. Total hours tuned would indicate the potential for success of a given show on a particular service. And then the envelope system, already in place, would incent broadcasters in the private stream to maximize audience.
LISTNUM 1 \l 14671 In essence, instead of a large football stadium, you would have four arenas representing each of the genres.
LISTNUM 1 \l 14672 We acknowledge that the revised allocation between conventional and specialty would decrease the funding to the specialty services, including our own stable of specialties that now includes the former Alliance Atlantis services. And we recommend that current genre allocations be maintained, at least in the medium term, to mitigate anymore significant decline in funding for specific licensees.
LISTNUM 1 \l 14673 MS WILLIAMS: Commissioners, we realize that we have thrown some big ideas at you in this presentation and a good many numbers. But our primary objective here today is to impart the necessity of getting the measurement tools right, and part of that process is to step back and consider exactly what will happen when the CBC and educational broadcasters are moved to a different stream.
LISTNUM 1 \l 14674 It changes the numbers, it changes the allocation percentages and, frankly, it exposes in very plain view the inequity of the current formula, a formula we emphasize that locks in advantage and disadvantage forever and does not reflect a primary emphasis on audience success.
LISTNUM 1 \l 14675 The Commission could have a very important role in directing the CTF to address and revise this formula in light of the current recommendations.
LISTNUM 1 \l 14676 We thank you for this opportunity and we would be pleased to answer any questions.
LISTNUM 1 \l 14677 THE CHAIRPERSON: Thank you, Ms Williams and your colleagues. I will ask Vice‑Chairman Arpin to lead the questioning.
LISTNUM 1 \l 14678 COMMISSIONER ARPIN: Thank you very much, Madam Chair.
LISTNUM 1 \l 14679 I think your oral presentation is very clear. I think it doesn't require a lot of questions to be asked, because every time there had been a question you immediately proposed an answer.
LISTNUM 1 \l 14680 But, nevertheless, just for the record, you may not be on the board at this time, but you have been or a representative of CanWest has been on the board of the CTF over the years.
LISTNUM 1 \l 14681 MS WILLIAMS: I have been a member of the CTF board before, but not as a representative. I am trying to remember. Well, I guess it was CanWest. I was at CanWest at the end of my board term, yes, I was.
LISTNUM 1 \l 14682 COMMISSIONER ARPIN: Okay. But there were other individuals. I am not asking who was a member of the board or not, but they were members, staff of CanWest, over the years who have sat on the board of the CTF. I guess from 1996 to today there has been some rotation from various organizations and at some point in time the representatives of CanWest were on the board.
LISTNUM 1 \l 14683 When the drama envelope was drawn up in 2005/2006 was a representative of CanWest on the board at that time?
LISTNUM 1 \l 14684 MS WILLIAMS: You know, we were talking about this the other day, and I was trying to remember the exact process of how that all unfolded. There was great difficulty at the time in determining how that initial allocation was going to be made. And there was, and I hope my memory is serving me right here, there was a very specific offsite held with a facilitator that was brought in to see if a resolution could be found.
LISTNUM 1 \l 14685 I was at that offsite, so CanWest had a voice in that, but there were many many other voices there that ultimately, you know, decision was made as I say it was. And then it was endorsed by the board and I was on the board at the time it was endorsed. There was much discussion, but at the end it was felt that historical access was a fair and reasonable way to measure.
LISTNUM 1 \l 14686 COMMISSIONER ARPIN: To measure.
LISTNUM 1 \l 14687 MS WILLIAMS: Yes.
LISTNUM 1 \l 14688 COMMISSIONER ARPIN: Because, obviously, what you are saying here gave rise to what Shaw has been arguing, is that a stakeholder board at the end of the day ‑‑ and I think this morning, if I can find the exact quote in Mr. Stein's presentation ‑‑ but he said that the stakeholder board, at the end of the day, is only self‑serving for those who are on that board on that very day. Will you agree with that statement?
LISTNUM 1 \l 14689 MS WILLIAMS: I think it is a very, and has been for years, a very complicated and complex board, large and unwieldy. I think the passion often expressed at the board meetings was often a reflection of how much everyone cares about the CTF and really believed it needed to be well run.
LISTNUM 1 \l 14690 I think it often got bogged down in the complexity of details around a huge set of rules that grew and grew and grew over time as various stakeholders tried to understand impact to their own situations. And it is why one of the things we are really trying to address here is a real simple, straightforward, one‑measure approach that would takeaway a huge layer of that.
LISTNUM 1 \l 14691 COMMISSIONER ARPIN: Well, I will have some further discussion on the measure system that you are proposing or whatever, not specifically on the mathematics of it, but on the principle.
LISTNUM 1 \l 14692 So, as you just said, the board is large, is unwieldy and comes with all its problems at the end of the day. So my question to you is that, if I was asking you for your comment, I guess that you are going to tell me that you favour a much smaller board made up of independent non‑related directors. Am I right to deduct that from your earlier statements?
LISTNUM 1 \l 14693 MS WILLIAMS: Yes, I would endorse a board that was smaller. But, equally importantly, I would endorse a board that was clear in its role compared to the staff of the CTF, a board that was clear in its role of the chair versus the president, and a board that was overseeing an organization that was operating under much cleaner, simpler, more straightforward rules.
LISTNUM 1 \l 14694 COMMISSIONER ARPIN: I don't know if you had an opportunity to read the filings that the CTF made I will say a couple of weeks ago regarding the role of the chair versus the role of the president and CEO and some other governance documents. They have, to some extent, followed up on some of the recommendations that the task force had made. So I don't know if you had a chance to see these documents that had been filed about two weeks ago. And, if yes, do you have any comments to make?
LISTNUM 1 \l 14695 MS WILLIAMS: I haven't read them thoroughly enough to comment myself, but you might, John.
LISTNUM 1 \l 14696 MR. MEDLINE: I have read them. Frankly, though, our emphasis today was not on the Board or Board governance itself, although some of what you heard in the opening remarks flows from Board decisions, but rather on the guidelines that really steer the funding around the system to various parties and to various places.
LISTNUM 1 \l 14697 I have read them. Obviously it is important that all organizations, whether the CTF or any other organization, look closely at governance.
LISTNUM 1 \l 14698 This exercise, I think, has been quite good for all parties, but really, when it comes to governance issues, we haven't dealt in great depth between president versus chair and that kind of issue.
LISTNUM 1 \l 14699 COMMISSIONER ARPIN: Thank you. That is a fair answer.
LISTNUM 1 \l 14700 Back to your submissions, did you have a chance to discuss the proposal with any other existing stakeholder?
LISTNUM 1 \l 14701 Not necessarily through the CTF Board, but through other ways.
LISTNUM 1 \l 14702 I know that you recently filed a joint submission with CTV in another forum, for which I am not opening any discussion. You may have an opportunity to discuss that at that time.
LISTNUM 1 \l 14703 You are a member of trade associations. You are a member of various organizations, or joint ventures, even one that is called BBM, and that is where most of the people that are competing in Toronto get together once in a while.
LISTNUM 1 \l 14704 Did you have a chance to discuss the proposal before, or is this the first time that you are really laying it down?
LISTNUM 1 \l 14705 MR. MEDLINE: I think it would be safe to say that, formally, it is the first time we have laid it down. That's for certain.
LISTNUM 1 \l 14706 I, personally, have had a couple of conversations with representatives of specific broadcasters; not CTV in this particular instance, for, I think, fairly obvious reasons.
LISTNUM 1 \l 14707 At the CAB level, of course, there were multiple discussions.
LISTNUM 1 \l 14708 The CAB discussions and what was presented earlier in the week from the CAB was, I think, a much higher level presentation. This is a more granular ‑‑
LISTNUM 1 \l 14709 I wouldn't expect, frankly, the CAB to get involved in its presentation in issues like this. It really would not ‑‑
LISTNUM 1 \l 14710 COMMISSIONER ARPIN: Except that the CAB has a production committee, where the members who are going to represent the broadcasters are picked up. That production committee ‑‑
LISTNUM 1 \l 14711 When I was wearing a different hat, that seemed to be the place where these matters were ‑‑ where people were trying to sort out these issues.
LISTNUM 1 \l 14712 MR. MEDLINE: You are absolutely right. The production committee, of which Christine Shipton is a member ‑‑ and, actually, the regulatory committee of the CAB, of which I am a member ‑‑ met on a number of occasions to discuss this.
LISTNUM 1 \l 14713 Most of the discussions ‑‑ and I don't think I am talking out of school ‑‑ most of the discussions, though, revolved around the one fund/two streams issue. That was the big agenda item.
LISTNUM 1 \l 14714 COMMISSIONER ARPIN: You, surely, heard the Shaw presentation this morning, and obviously you, more than likely, have read their submissions and their letters over the last 15 months, so you may be able to comment on some statements that were made, particularly this morning.
LISTNUM 1 \l 14715 Mr. Stein laid down what he called three irrefutable facts. The first one is that the CTF does not deliver programs that Canadians watch.
LISTNUM 1 \l 14716 Do you have any opinion on that? Is it true?
LISTNUM 1 \l 14717 He went through some mathematics which, at the end of the day, showed that only 4 percent of the English‑language drama funded by the CTF ‑‑ the viewing was only 4 percent, while the Canadian English not funded by the CTF reaches ‑‑ he didn't use the word "reach", but the market share, I would say, is 13 percent.
LISTNUM 1 \l 14718 Based on your own experience ‑‑ and you may not have the book with you this morning, but I am sure you have been assessing and making calculations every time new data comes out.
LISTNUM 1 \l 14719 Can you assert that?
LISTNUM 1 \l 14720 MS WILLIAMS: Christine and Tara also may want to add to this, but, yes, I can assure you that every afternoon at about two o'clock we assess the day before's data, so we are well entrenched in it.
LISTNUM 1 \l 14721 I would say that there is no broadcast team out there more committed to doing the very best with the Canadian programming that we have, from its original development, right through its production, to the way we schedule and promote it.
LISTNUM 1 \l 14722 And we are really pleased with some of the results we see.
LISTNUM 1 \l 14723 "`Da Kink in My Hair", on the Sunday night 7:30 broadcast, has done really well for us this fall. It's a unique project. We are really pleased with the ratings it's getting; not just with the statement it's making and how proud we are of the effort, but it's getting good ratings and important demos in core markets.
LISTNUM 1 \l 14724 We launched a couple of weeks ago "The Guard", Tuesday nights at 10:00, the very best spot on the schedule you can find, coming out of "House", which is the number one show in Canada ‑‑ well promoted and strongly launched. We are getting great ratings on that show.
LISTNUM 1 \l 14725 We are pleased with the progress we are making, but, that said, this is the toughest game in town, and everyone is acknowledging this. The success rate for television across the board is about 75 percent failure. Every new slate of shows that comes out of, supposedly, the greatest television producers in the world, out of the American system, 75 percent of those go down every year.
LISTNUM 1 \l 14726 I think we are doing really well, and we are doing really well despite, frankly, having our hands tied half behind our backs because of the size of the envelope we have. Remember, that relative amount we have is supporting two complete conventional streams ‑‑ 16 hours of priority programming a week, not the 8 that CTV's original allocation was supporting.
LISTNUM 1 \l 14727 But despite that we have been determined and aggressive, and we are making some progress. I think the whole industry is making some progress, but it's a tough slog.
LISTNUM 1 \l 14728 MS SHIPTON: I would add that we remain committed to supporting the genre of drama in an environment where priority programming can be defined in many different ways.
LISTNUM 1 \l 14729 I think it's just such an exciting time to be commissioning Canadian drama right now, much more so than three or four years ago. It's an extremely competitive field, and we are only going to feel this ‑‑ these things take seasons to have a ripple effect.
LISTNUM 1 \l 14730 Right now, between what CTV is putting on the air, our two dramas that we have launched, the five that CBC has launched ‑‑ and they are futzing around on their schedule, trying to make sure they are working ‑‑ we are all competing for those eyeballs for Canadian drama, and proudly so.
LISTNUM 1 \l 14731 And we don't set out to do mediocre shows. We always intend to do hit shows, they just don't always hit.
LISTNUM 1 \l 14732 MS WILLIAMS: It occurred to me, listening this morning ‑‑ I admire Shaw's success as a company, and I admire their commitment to reach into all of the small communities and cable them all, regardless, and that they are not held back by ‑‑ they know they need to serve their customers, and they do whatever it takes.
LISTNUM 1 \l 14733 But it occurred to me that, if every time they dug a trench and they laid a cable and they connected it to the homes in one of those little, small communities, and then they flipped the switch ‑‑ if 75 percent of the time they flipped the switch the signal just didn't work ‑‑
LISTNUM 1 \l 14734 Nobody had any idea why. No engineer or technical person could figure it out. They just had to live with the fact that they made that big investment, and try again next year. The next year they could dig another trench alongside the first one, and lay the cable again, and flip the switch again. Maybe it would work.
LISTNUM 1 \l 14735 If that was their business model, I wonder how they would feel about understanding the world we are in.
LISTNUM 1 \l 14736 COMMISSIONER ARPIN: An interesting analogy.
‑‑‑ Laughter / Rires
LISTNUM 1 \l 14737 COMMISSIONER ARPIN: That's the first time I have heard it.
LISTNUM 1 \l 14738 MS WILLIAMS: We are working on analogies in this presentation.
LISTNUM 1 \l 14739 COMMISSIONER ARPIN: That is the first time I have heard it, but I have to admit that it is interesting.
LISTNUM 1 \l 14740 Another statement that was made by Shaw this morning is that the CTF has not leveraged increased spending on Canadian programming; rather, it has freed up some money so that you will pay more for foreign programming. So that, finally, the CTF money is purely a subsidy to allow you to acquire more foreign ‑‑ American programming to do more programming substitution.
LISTNUM 1 \l 14741 MS WILLIAMS: I actually think we have addressed some of this in past conversations, and I am happy to address it again.
LISTNUM 1 \l 14742 As the overseer of the budgets for all of our stations at CanWest, I can assure you that there is no relationship between the size of the budget for the foreign programming and the size of the budget for the Canadian programming. They are two distinct budgets. Each grows as it needs to, and when one gets bigger, the other does not automatically get smaller.
LISTNUM 1 \l 14743 The foreign programming that we buy for our conventional prime time ‑‑ the demand on that is huge, and as we add another competitor to the game, particularly this year, as the supply has been shrinking and the demand has been growing, yes, we have to deal with what those costs are.
LISTNUM 1 \l 14744 But as we deal with that, in order to support the overall success of our prime time schedule, which supports an environment that allows our Canadian programming to be successful, we don't shrink the size of the Canadian budget. The two are completely separate and distinct.
LISTNUM 1 \l 14745 MS SHIPTON: I would add that just because we have limited CTF drama dollars, because we are talking about drama specifically, doesn't mean that is the only drama we do.
LISTNUM 1 \l 14746 I have worked very hard in the last two years with my $5.2 million in drama envelope to create as many dramas as we can.
LISTNUM 1 \l 14747 So there are not just the dramas like "Falcon Beach", "The Guard" and "`Da Kink" that have CTF, we have formed partnerships. We have partnerships with APTN, we have partnerships with the pay networks, which don't rely on us supplying CTF dollars, but it still gives us good drama to put on our conventional networks.
LISTNUM 1 \l 14748 We also form partnerships with broadcasters in the States to co‑finance different dramas.
LISTNUM 1 \l 14749 We also fund dramas on our own ‑‑ two seasons of "The Jane Show", with no CTF and no other foreign partner.
LISTNUM 1 \l 14750 It doesn't shrink the number of hours we attempt to do by taking away CTF from us.
LISTNUM 1 \l 14751 COMMISSIONER ARPIN: Another statement ‑‑ which may be not something that you can control, but you surely have expertise in dealing with the independent production sector ‑‑ saying that the money that was put into the CTF over the years, and other related programs, was deemed to help independent production to grow and become a viable industry by itself.
LISTNUM 1 \l 14752 We have seen a lot of consolidation in the broadcasting system and in the distribution system over the years, but there has been not much consolidation ‑‑ to the contrary, we saw some organizations that had been successful producers becoming pure play broadcasters, rather than keep going ‑‑
LISTNUM 1 \l 14753 Because when they had reached a certain size, they moved out of production to become pure play broadcasters.
LISTNUM 1 \l 14754 I don't know if you have a specific comment to make regarding the fact that, with all of those investments, the model that was aimed at, with significant players in the production industry, has not yet been attained.
LISTNUM 1 \l 14755 MS SHIPTON: I think there has been success in the production community. It may not be through consolidation and the growth in the actual size of these companies, but success breeds success. That's what our business is all about.
LISTNUM 1 \l 14756 If you think we have a hard time picking hits, from a producer's point of view, who puts their heart and soul into making sure that all of the stars align to ensure that they, too, have a hit, it's three times as difficult, in my mind.
LISTNUM 1 \l 14757 But I think there have been success stories. We have very strong medium‑sized companies that have just announced some fantastic deals, actually in the last week ‑‑ Shaftesbury Films, Barna‑Alper, Brightlight Pictures, Blueprint Entertainment ‑‑ whatever Bill Mussel's(ph) new company is called ‑‑ the deal in the States ‑‑
LISTNUM 1 \l 14758 I think you have seen a consolidation of talent. These companies are making sure that they are using the best we have in the country to create the best series.
LISTNUM 1 \l 14759 So I think there has been success in our production community.
LISTNUM 1 \l 14760 COMMISSIONER ARPIN: Thank you.
LISTNUM 1 \l 14761 My last question to you ‑‑ and I am going back to your oral presentation ‑‑
LISTNUM 1 \l 14762 I am sure you have looked at what will be the impact on the services you have just acquired. Obviously, I can deduce from your presentation that there will be an impact on Teletoon. Otherwise, you would not have quoted them.
LISTNUM 1 \l 14763 What will it mean for the specialty services that you have just acquired?
LISTNUM 1 \l 14764 MR. MEDLINE: I can address that from a numbers standpoint.
LISTNUM 1 \l 14765 We did modelling on the conventional and on the specialty side using this plan.
LISTNUM 1 \l 14766 On the specialty side, first off, you are absolutely right ‑‑ and this is a fixed‑pie calculation ‑‑ if you increase on conventional, you are going to take out on the discretionary, or, as we termed here, the specialty side.
LISTNUM 1 \l 14767 We then broke it down and we looked at the companies that are getting the most funding on the specialty side and saw what kind of impact there was on our own services. On the specialty side, frankly, it's not a terrific story.
LISTNUM 1 \l 14768 I went to Tara a little while ago and I said: Tara, when I model Showcase in any of the three major demographics that we are modelling, it shows a decline on Showcase of the funding that you would have available.
LISTNUM 1 \l 14769 Similarly, on the documentary side, History and Slice, which are participants in the documentary funding, also showed a decline.
LISTNUM 1 \l 14770 And worse, in both categories the prime competitor, CTV, actually showed an increase in the modelling, or flat on the drama.
LISTNUM 1 \l 14771 So the big gain for CanWest, from a modelling perspective, is on the conventional side. On the specialty side, it actually has a moderate declining impact.
LISTNUM 1 \l 14772 MS WILLIAMS: If I could add to that, I think one of the things that we really like about this approach is that it actually follows the viewing patterns.
LISTNUM 1 \l 14773 We are in a world now that is constantly changing. Numerous intervenors have talked about the changing platforms and the changing world around us.
LISTNUM 1 \l 14774 As audiences shift away from one platform to another, this metric respects that and follows it.
LISTNUM 1 \l 14775 So that if reach changes because digital channels get more distribution and their reach grows, then that piece of the metric grows for them.
LISTNUM 1 \l 14776 If hours tuned changes because people start to watch more of their television on specialty instead of conventional, then that piece of the metric changes.
LISTNUM 1 \l 14777 So this allocation, which today the numbers suggest should be 50:50, over time, maybe, that will shift to 60:40, 70:30 ‑‑ I don't know where it might go. It depends where the viewers go.
LISTNUM 1 \l 14778 But the beauty of it is, it reflects where the viewers are. So it really supports the audience metric, because it puts the dollars where the eyeballs are. That is how we will, ultimately, make sure that the shows are as successful as they can be.
LISTNUM 1 \l 14779 COMMISSIONER ARPIN: Really, the final, final question.
LISTNUM 1 \l 14780 I note, from the money you are currently getting, and from what you say you will be getting, based on the adult 18 to 49 demographic, that it is more than doubling. It is probably 2.3 or 2.5 times what you are currently getting.
LISTNUM 1 \l 14781 Would you have enough money to issue a licence to support those?
LISTNUM 1 \l 14782 MS WILLIAMS: Yes.
LISTNUM 1 \l 14783 COMMISSIONER ARPIN: You wouldn't leave any money on the table because you didn't have sufficient money to issue the initial licence.
LISTNUM 1 \l 14784 MS WILLIAMS: No.
LISTNUM 1 \l 14785 COMMISSIONER ARPIN: You have figured that out already.
LISTNUM 1 \l 14786 Thank you very much, Madam Chair.
LISTNUM 1 \l 14787 THE CHAIRPERSON: Thank you.
LISTNUM 1 \l 14788 I have a couple of follow‑up questions, just so I get this straight.
LISTNUM 1 \l 14789 With a simple and appropriate measurement tool of hours tuned to the station, does that mean we eliminate ‑‑ or the CTF eliminates ‑‑ we know how you feel about historic access, but above‑average licence fees and regional production as factors ‑‑ that this would be the only factor, hours tuned to the station?
LISTNUM 1 \l 14790 MS WILLIAMS: Our view would be that one of the challenges to the CTF over the last number of years is that it was trying to serve a number of different mandates. It had a whole pile of different agendas that it was trying to serve, and we all know that you can never be all things to all people all the time.
LISTNUM 1 \l 14791 What we are suggesting is that we really restrict that list of agendas, and we restrict it to ‑‑ it should still be about priority programming, it should still be about those under‑served categories, it should still be about getting those shows in prime time, but we would agree that, in an effort to really ensure that audience is carrying the weight it deserves ‑‑ the audience success is carrying the weight it deserves ‑‑ that we do back off those other competing agendas of regional and above‑average licence fees.
LISTNUM 1 \l 14792 If the CTF thinks that above‑average licence fees are more important than audience success, it could put it back in, but our understanding, and our agreement, is that audience success is what we are trying to promote here.
LISTNUM 1 \l 14793 So we are not going 100 percent to audience success. We are still protecting independent producers, we are protecting under‑served genres, we are protecting prime time. But, beyond that, we think everything else should go to support the audience success model.
LISTNUM 1 \l 14794 THE CHAIRPERSON: You have been before us, as have other broadcasters been before us, saying that, of course, viewing is very cyclical. This year CanWest may be up, Global may be up, and CTV is down, and a year from now, or two years from now, it could be the complete reverse.
LISTNUM 1 \l 14795 This doesn't provide, therefore, a lot of stability, in terms of the amount of funding available to you, as a broadcaster, year‑to‑year.
LISTNUM 1 \l 14796 MS WILLIAMS: I actually would argue the opposite. I think it provides a lot of stability, because it is speaking to the overall success of an overall schedule, not on a show‑by‑show basis.
LISTNUM 1 \l 14797 The swings are: "`Falcon Beach" didn't work so well; "The Guard" is working really well; "Whistler" didn't work so well; "Corner Gas" is a huge hit.
LISTNUM 1 \l 14798 Those are the swings, but the overall success of the schedule is a far more stable measurement, and that's what hours tuned is reflective of.
LISTNUM 1 \l 14799 THE CHAIRPERSON: But there are swings in foreign programming, as well.
LISTNUM 1 \l 14800 MS WILLIAMS: There are some, but, again, over the whole schedule, it is a far less swing than when one looks at it on a show‑by‑show analysis.
LISTNUM 1 \l 14801 I can tell you how hard it is to really change the overall swing of prime time from one broadcaster to another.
LISTNUM 1 \l 14802 And the other piece of that, actually, is that, I think, the challenge with the current formula is that it is actually quite stable, as well, because so many of the factors are in historical and these other things that don't change. So those inequities that got established Day 1, there is very, very little opportunity for anybody to ever correct them.
LISTNUM 1 \l 14803 THE CHAIRPERSON: And your model would "take care" ‑‑ I guess is the term ‑‑ of differences in hours tuned year‑to‑year?
LISTNUM 1 \l 14804 In other words, should the CTF continue to support shows that decline in numbers from one year to the next?
LISTNUM 1 \l 14805 But, in your model, broadcasters' numbers decline from one year to the next.
LISTNUM 1 \l 14806 MS WILLIAMS: Yes, that's right.
LISTNUM 1 \l 14807 I think what our formula does is, first of all, it corrects the baseline. I think that correcting anything on top of a faulty baseline is rather pointless. We need to first understand that the baseline is not supporting the system fairly and in the healthiest way possible.
LISTNUM 1 \l 14808 So our approach corrects the baseline, and then, on a go‑forward basis, assures that the funding is relatively stable, but that, overall, when a broadcaster does better, you get more; and does worse, you get less. And it incentifies the broadcaster to be sure that every single hour of their schedule is performing as absolutely best it can.
LISTNUM 1 \l 14809 Because every hour in a schedule drives the overall success of that schedule. We don't treat them as one‑by‑one either; we need the whole of the schedule to work. This incentifies us to make sure that every hour is working.
LISTNUM 1 \l 14810 MS SHIPTON: If I could add, one of the benefits when our overall schedule is working is tremendous promotion for some of the shows that I commission.
LISTNUM 1 \l 14811 When our marketing people sit down and say, "We need a huge audience for ``Da Kink' and `The Guard', where are we going to promote it," they look to very specific places in the schedule to drive the promotion and the viewership to those shows.
LISTNUM 1 \l 14812 So, again, because we have a successful schedule, with successful shows, and we know exactly who the audience is coming to each of those shows, they can market specifically to our shows ‑‑ sorry, my shows.
‑‑‑ Laughter / Rires
LISTNUM 1 \l 14813 MR. MEDLINE: Madam Chair, your original question sort of begs another question; that is, what happened to return on investment.
LISTNUM 1 \l 14814 I think we should address it because it was a recommendation that it also be considered.
LISTNUM 1 \l 14815 We, here, are focused on audience success measures, but we also did consider return on investment.
LISTNUM 1 \l 14816 Christine, could you just ‑‑ I think it's important to ‑‑
LISTNUM 1 \l 14817 MS SHIPTON: I would just say, having been in the production community, the distribution side of the business with Aliance, and now as a broadcaster, that it is a really tricky matrix to set up what are the guidelines going to be about that return on investment.
LISTNUM 1 \l 14818 Is it about foreign sales? Is it about the potential for financial return on investment, even in Canada, post the initial broadcast? Is it about the unregulated media environment?
LISTNUM 1 \l 14819 There are so many factors.
LISTNUM 1 \l 14820 I think, in principle, it is smart to think about return on investment, because it makes everybody remember that we are in the business of television, but we would need lots more discussion as to the details, as to how we could all not only live with the parameters, but follow through and track it in the years to come, because it is something that speaks to investment that you see three and four years out.
LISTNUM 1 \l 14821 THE CHAIRPERSON: And this is something you will tell us on February 18th.
LISTNUM 1 \l 14822 MR. MEDLINE: Actually, I think we can address it here.
LISTNUM 1 \l 14823 I don't think we would come back on February 18th and say, "Here is how you could work out return on investment."
LISTNUM 1 \l 14824 Christine's list was a partial list. In the initial draft of our opening remarks we included others ‑‑ amortization schedules have a huge impact on this.
LISTNUM 1 \l 14825 I think we think that the intentions were right on; I think we think that the execution would be, if not impossible, would lead us into a morass, where, frankly, we see some similarities to some CTF rules ‑‑ rules upon rules upon rules.
LISTNUM 1 \l 14826 THE CHAIRPERSON: Thank you, Mr. Medline, for that. We don't mind when you do our own follow‑up questions, so thanks for that.
LISTNUM 1 \l 14827 I have one final question on audience data. Accountability and transparency has also been a theme of these proceedings. If we were to adopt your model, with a heavy reliance on hours tuned, can the public see what those hours tuned are?
LISTNUM 1 \l 14828 In other words, is CanWest willing to give up audience data, to make it publicly available so that it can be easily tracked by us, by the Department, by the contributors, and, more importantly, by Canadians?
LISTNUM 1 \l 14829 MR. MEDLINE: I will take a stab at it, and feel free to yell at me down the row.
LISTNUM 1 \l 14830 I think, if I am not mistaken, the CTF has a similar way of reporting ‑‑ it is password protected, for instance, and the CTF can come back and say "That's just not right" ‑‑ where data from broadcasters that is used for their audience success to different metrics ‑‑ hours tuned by the shows that are supported by CTF funding or "CTF‑ables" are reported and are available, but they are not open to the public.
LISTNUM 1 \l 14831 In other words, certain people have great transparency and visibility into those numbers, but not everyone.
LISTNUM 1 \l 14832 If we were trying to put the numbers out to the general public, I think: (a) we wouldn't see much utility in that; and (b) there would probably be some unforseen competitive impacts, which I can't think of now, but probably people would tap me on the shoulder to say there are.
LISTNUM 1 \l 14833 COMMISSIONER ARPIN: There is an obvious one. The data belongs to BBM Nielsen and cannot be made available unless they waive that consideration.
LISTNUM 1 \l 14834 THE CHAIRPERSON: Would you be willing to work with BBM to see that happen?
LISTNUM 1 \l 14835 Again, it's accountability, it's transparency, it's being able to track how this money is being spent.
LISTNUM 1 \l 14836 MR. MEDLINE: Yes. I think, in this particular instance, we will have to get back to you on February 18th.
LISTNUM 1 \l 14837 THE CHAIRPERSON: Okay. Thank you very much, those are our questions.
LISTNUM 1 \l 14838 We will now break for lunch and be back in one hour.
‑‑‑ Upon recessing at 1228 / Suspension à 1228
‑‑‑ Upon resuming at 1334 / Reprise à 1334
LISTNUM 1 \l 14839 THE SECRETARY: Please take a seat.
LISTNUM 1 \l 14840 We will now hear the presentation of Ryan Sutherland.
‑‑‑ Pause
LISTNUM 1 \l 14841 THE SECRETARY: Please introduce yourself and you have 15 minutes.
PRESENTATION / PRÉSENTATION
LISTNUM 1 \l 14842 MS GERHARDS: Good afternoon. My name is Tara Gerhards and I'll be speaking on behalf of Ryan Sutherland who, unfortunately, is unable to attend today due to weather and travel.
LISTNUM 1 \l 14843 MR. GOLDMAN: My name is Aaron Goldman, I'll be helping respond to any questions that you have of Ryan that we might be able to respond to in his absence.
LISTNUM 1 \l 14844 MS GERHARDS: Ryan has sent this to me to present. It's a recommendation to establish a CTF dispute resolution policy.
LISTNUM 1 \l 14845 The Canadian Television Fund currently administered by Telefilm plays a vital role in the successful production and delivery of Canadian programming.
LISTNUM 1 \l 14846 While it is true that Telefilm adheres closely to CTF policies, guidelines and principles, it is sometimes the policies themselves that do not equitably serve the interests of independent production companies or the applicants and broadcasters alike.
LISTNUM 1 \l 14847 The current policies, particularly the default policy of the CTF, are heavily biased in favour of the broadcaster in contrast to the spirit and intent of the CTF which is to foster independent Canadian production.
LISTNUM 1 \l 14848 According to the CTF guidelines, the administration of the CTF is meant to be driven by this spirit and intent in such a way that the CTF projects are always administered in a fashion that is in support of productions.
LISTNUM 1 \l 14849 It is certainly important for the CTF to respect the stakeholders, broadcasters and protect their interests. This must not, however, be allowed to happen in a way that puts independent production companies producing CTF projects at an unfair disadvantage.
LISTNUM 1 \l 14850 Broadcasters, compared with independent production companies, have the advantage of longevity and substantial leverage within the industry. For precisely this reason it is crucially important that the CTF policies contain mechanisms to maintain the balance and justice between the broadcasters and the independent production companies.
LISTNUM 1 \l 14851 For example, within the CTF policies a broadcaster could intentionally or unintentionally cause production delays through various actions or inactions, such as postponing contracts, delaying contractual payments or issuing contracts that are not CTF eligible, thereby adversely affecting the financing, production and delivery of the programming, yet still be in a position to have the applicant, or independent production company, noted in default for a late delivery even though that late delivery was directly precipitated by the broadcaster.
LISTNUM 1 \l 14852 Moreover, such a default on one project can also put into default any other CTF projects connected to the applicant, thereby making applicants participating in one or more projects receiving funding from the CTF in a vulnerable position relative to broadcasters who fund only a portion of the budgets for the CTF projects.
LISTNUM 1 \l 14853 In fact, under the current default policy it is theoretically possible for a broadcaster in a second or a third window position on a CTF project to put all of the projects considered to be related parties to that project into default simply by electing to terminate their licence fee contract for any reason.
LISTNUM 1 \l 14854 Why this above example is possible? Quite simply, it is because the onus of the CTF default policy resides entirely on the applicant or the independent producer and not at all on the broadcaster. This leaves the broadcaster in a position to apply any amount of pressure or undue influence over the producer that it wishes, while the broadcaster remains beyond reproach from the CTF.
LISTNUM 1 \l 14855 Clearly this situation is out of balance.
LISTNUM 1 \l 14856 This defence mechanism is clearly very unilaterally in favour of the broadcaster and should instead be balanced by instigating a formalized dispute resolution policy which mutually protects the interests of both the broadcaster and the applicant alike.
LISTNUM 1 \l 14857 I would humbly recommend that the CTF review and consider the extensive cases of dispute resolution in the area of Internet domain names.
LISTNUM 1 \l 14858 This relatively new field of media is a fast moving industry filled with extensive competition over various intellectual property rights spanning from multi‑national corporations to small and medium enterprises and even personal use, thereby making this field a perfect petri dish for contemporary cases of dispute resolution.
LISTNUM 1 \l 14859 The Internet corporation for assigned names and numbers, ICAN, endeavour to address the issues of domain name ownership resolution by establishing a policy that became known as Uniform Dispute Resolution Policy. This policy was drafted in close cooperation with the World Intellectual Property Organization, or WIPO as we call it, and essentially attempts to provide a mechanism for rapid, inexpensive and reasonable resolution of Internet domain name conflicts, avoiding the traditional court system for disputes by pre‑establishing a wide variety of rights and remedies and by allowing cases to be brought to one of a set of bodies that can arbitrate domain name disputes.
LISTNUM 1 \l 14860 Implementing such a policy for the CTF would certainly need to extend beyond mere intellectual property rights or property ownership but, nonetheless, such a dispute resolution policy would provide a mechanism to balance the respective roles of the broadcaster and independent production companies throughout the CTF funding process.
LISTNUM 1 \l 14861 This policy would help further the success of the CTF towards reaching its goals to support and foster new Canadian programming in accordance with the CTF spirit and intent.
LISTNUM 1 \l 14862 Thank you.
LISTNUM 1 \l 14863 THE CHAIRPERSON: Thank you very much.
LISTNUM 1 \l 14864 I'm going to have to ask you to repeat your names, please. I didn't get it the first time.
LISTNUM 1 \l 14865 MS GERHARDS: Sure. My first name is Tara, T‑a‑r‑a, and last name I'll spell it for you. It's G‑e‑r‑h‑a‑r‑d‑s.
LISTNUM 1 \l 14866 THE CHAIRPERSON: Gerhards and that's how it's pronounced?
LISTNUM 1 \l 14867 MS GERHARDS: Yes.
LISTNUM 1 \l 14868 THE CHAIRPERSON: I just like to call people by their names, as opposed to "Hey You".
LISTNUM 1 \l 14869 MS GERHARDS: Absolutely.
LISTNUM 1 \l 14870 MR. GOLDMAN: My name is Aaron Goldman.
LISTNUM 1 \l 14871 THE CHAIRPERSON: Goldman.
LISTNUM 1 \l 14872 MR. GOLDMAN: Goldman.
LISTNUM 1 \l 14873 THE CHAIRPERSON: Okay, thank you.
LISTNUM 1 \l 14874 MR. GOLDMAN: You're welcome.
LISTNUM 1 \l 14875 THE CHAIRPERSON: Is Mr. Sutherland an independent producer?
LISTNUM 1 \l 14876 MR. GOLDMAN: Ryan has done a small amount of independent production. His background is primarily in Internet, he's quite ‑‑ he's done a great deal in the realm of media, but in terms of television his experience is rather new.
LISTNUM 1 \l 14877 He's been spending about the last six years working with me, helping to develop a television channel that we would intend to launch and he's been made the President and CEO of that channel, but his experience primarily is in creating Internet websites and multi‑media outlets.
LISTNUM 1 \l 14878 So, that's more his background.
LISTNUM 1 \l 14879 THE CHAIRPERSON: So, his recommendation doesn't come necessarily out of his having experienced these kinds of delays that you're talking about in this submission directly?
LISTNUM 1 \l 14880 MS GERHARDS: I'm an independent producer myself and so is Aaron. We've worked with Ryan over the last long time, Aaron longer than myself, six months for myself, much longer for Aaron, and Ryan has witnessed ‑‑ and we work with other independent producers as well, so, yes, we can speak to this from a personal level, both myself and Aaron, and Ryan can as well, even though him being an independent producer himself is relatively new, he does have extensive knowledge of the issues that we're talking about.
LISTNUM 1 \l 14881 THE CHAIRPERSON: Well, Ms Gerhards, why don't you convey to us your experience in this area.
LISTNUM 1 \l 14882 MS GERHARDS: Ooh.
LISTNUM 1 \l 14883 MR. GOLDMAN: There are a group of productions over the last 12 months that have had experiences that are detailed in here. We are endeavouring to resolve the disputes through other avenues right now, but these theoretical examples are things that are actually currently happening.
LISTNUM 1 \l 14884 And we have been endeavouring to have the CTF facilitate the resolution of disputes that have arisen out of the kinds of scenarios we've put forward.
LISTNUM 1 \l 14885 And currently, as we understand it, the guidelines don't allow for them to help facilitate any resolution, they're actually prohibited from interfering is the word that they've used in our request to have them facilitate some form of positive resolution, some constructive approach to the situations.
LISTNUM 1 \l 14886 And it really struck us that when there's this amount of taxpayer money involved and money that is controlled through Heritage indirectly that such a situation could arise.
`We think it would be appropriate for the CTF to be empowered to facilitate resolution in these situations rather than have a broadcaster be able to, literally at whim, say, I don't feel like it and the situation just goes down the tubes along with all the taxpayer money that's involved.
LISTNUM 1 \l 14887 And, more importantly, in some of these productions we're affecting two to 300 people and their livelihoods and that's of great concern to me personally.
LISTNUM 1 \l 14888 THE CHAIRPERSON: Prior to today have you had an opportunity to present this idea to the CTF?
LISTNUM 1 \l 14889 MS GERHARDS: In our meetings that we've had at the CTF and with Telefilm where we've talked about the issues that we've been going through, and I'll give you one example for one of the companies that I own, a production company that I own.
LISTNUM 1 \l 14890 We were issued a contract by a broadcaster which was actually offside, it was not in line with the CTF ‑‑ it wasn't CTF eligible when it came right down to it and amendments, delays, dah, dah, dah, dah, on and on and on and on, and it just dragged out.
LISTNUM 1 \l 14891 And, of course, we have to go into production anyway and we have to finance the productions personally and then you get to a situation where the broadcaster says, ah, you know, it was a really good idea when we talked to you about it, you know, six, seven months ago and we're really sorry that you spent all this money on production, but we're not going to follow through.
LISTNUM 1 \l 14892 And at that point what recourse the production company has is essentially court and we're dealing with torts or we're dealing with litigation and we're dealing with it within a judicial system which should be reserved for civil, family and criminal matters, not necessarily this industry which could essentially police itself.
LISTNUM 1 \l 14893 THE CHAIRPERSON: But, in that instance, did you enter into a development agreement with the broadcaster or an actual licensing agreement?
LISTNUM 1 \l 14894 MS GERHARDS: I'll let Aaron answer this one.
LISTNUM 1 \l 14895 THE CHAIRPERSON: Sure.
LISTNUM 1 \l 14896 MR. GOLDMAN: The agreement was entered into with the broadcaster. The broadcaster sought us out to facilitate a production it desired to have occur, so, we followed suit.
LISTNUM 1 \l 14897 They issued a contract, monies were due within 30 days, those monies did not arrive. The money was spent on the production and it was a very expensive production done in hi‑def, multi‑camera, you know, done well, media was shown to the broadcaster.
LISTNUM 1 \l 14898 The money was delayed by over five months and the contracts themselves were not eligible for the CTF, so, the monies that we were getting from the CTF were not forthcoming for some time.
LISTNUM 1 \l 14899 By the time they did come in there was an issue with the underlying rights that had been committed to us by the broadcaster in the first place.
LISTNUM 1 \l 14900 So, we were essentially induced to invest in this project, promised the monies by contract, the monies weren't forthcoming, the CTF contract wasn't eligible, therefore those monies weren't forthcoming.
LISTNUM 1 \l 14901 All of this means that the tax credits couldn't be banked and the show was so small it can't be banked in any case, so then we're essentially producing a $100,000 show that we had discussed with the broadcaster, moving up to a $300,000 budget and I had taken moves toward that.
LISTNUM 1 \l 14902 I ended up having to sell the company in order to protect against the default policy, harming all the other projects I was involved in through the related party clause in the default policy.
LISTNUM 1 \l 14903 Endeavoured to be very transparent with the CTF about all the goings on and in the end, unfortunately, the broadcaster had a lot of influence over Telefilm and all of these projects got cracked down on, even though I had broken the related party transactions ‑‑ or relationships and a lot of people came really close to losing their homes over this.
LISTNUM 1 \l 14904 And when there's a situation like that, if something goes awry between a producer, in my case an executive producer who's asked to hire a good friend of the broadcaster as the producer to do a show, it should never ‑‑ you should never get that far down the road where this kind of thing is happening.
LISTNUM 1 \l 14905 So, we're suggesting that a dispute resolution mechanism be put in place so that something along this lines just simply can't happen, because it's a waste of all the money involved and all the manpower involved on a show to have this many people at Telefilm and CTF involved in a dispute over something this small, when the broadcaster had already paid most of the monies out.
LISTNUM 1 \l 14906 It just seems really inefficient and unnecessary and I think that if there's a simple dispute resolution mechanism with a small group of ‑‑ you know, I wouldn't know how to suggest ‑‑ Ryan hasn't suggested anything in terms of the structure for that party, but I'm sure the CTF could come up with something reasonable, just to move through stuff like this really efficiently.
LISTNUM 1 \l 14907 THE CHAIRPERSON: And so you can concentrate on being the creative ...
LISTNUM 1 \l 14908 MR. GOLDMAN: And direct, which I love to do.
LISTNUM 1 \l 14909 THE CHAIRPERSON: If my colleagues have any further questions.
LISTNUM 1 \l 14910 Vice‑Chairman Arpin.
LISTNUM 1 \l 14911 COMMISSIONER ARPIN: Well, I think you have probably said it in your last few words.
LISTNUM 1 \l 14912 That dispute mechanism will be made up of people working for CTF or people working for CRTC, people working for arbitrators, because there is already some mechanism that does exist, the mediation and arbitration organization in the commercial world who could do that.
LISTNUM 1 \l 14913 Now, obviously your contracts have a clause I think that any dispute will be referred to an arbitrator or whatever mechanism you choose, so...
LISTNUM 1 \l 14914 MR. GOLDMAN: If I'm understanding where you're coming from on this, I'm hearing a suggestion that maybe the contracts, in order for them to be CTF eligible, might have a clause that involves alternate dispute resolution which we would absolutely support.
LISTNUM 1 \l 14915 We have proposed ‑‑
LISTNUM 1 \l 14916 COMMISSIONER ARPIN: I can't say if they are currently having an ADR clause in the contracts or not.
LISTNUM 1 \l 14917 MR. GOLDMAN: But that might be ‑‑
LISTNUM 1 \l 14918 COMMISSIONER ARPIN: Yes.
LISTNUM 1 \l 14919 MR. GOLDMAN: That might be a reasonable approach to just have it be part of the CTF requirements for a CTF eligible project.
LISTNUM 1 \l 14920 COMMISSIONER ARPIN: Yes, yes.
LISTNUM 1 \l 14921 MR. GOLDMAN: That it must ‑‑ it has to go that way before. That could simplify the administration of the CTF because it could just go to a normal mediation process.
LISTNUM 1 \l 14922 COMMISSIONER ARPIN: Mm‑hmm.
LISTNUM 1 \l 14923 MR. GOLDMAN: That maybe the cost of which might be shared equally between the parties.
LISTNUM 1 \l 14924 MS GERHARDS: Of course I'm not speaking for Ryan when I'm answering at this point, but a suggestion that I would have would actually be to have an Ombuds person who sits on a board, perhaps of independent people, independent from the CRTC, independent from the CTF and independent from Telefilm, but answering back to them.
LISTNUM 1 \l 14925 So, that any mediation that is facilitated through this Ombuds person, it's done unbiasedly, so that the broadcasters don't have more representation than the producer.
LISTNUM 1 \l 14926 Canadian programming is essential and small producers, I'm going to boast a little bit, are fabulous and we're very creative and we have great ideas, but we also have limited resources.
LISTNUM 1 \l 14927 So, when you get a show idea that a broadcaster jumps on and you run with it and you go with it and then you get stuck, what do you do.
LISTNUM 1 \l 14928 We need to have at least someone to go to to help facilitate the mediation, even if it's a designated mediator saying, hey, this corporation of mediators, you know, will help you whenever there's a requirement for an alternative dispute resolution.
LISTNUM 1 \l 14929 And perhaps if the CTF makes it a requirement that broadcasters' contracts or licence fee contracts, they must now have a clause in it which provides for alternative dispute resolution, it might be that simple.
LISTNUM 1 \l 14930 But certainly having an Ombuds person would definitely be helpful for small independent producers.
LISTNUM 1 \l 14931 Thanks.
LISTNUM 1 \l 14932 COMMISSIONER ARPIN: Thank you very much.
LISTNUM 1 \l 14933 THE CHAIRPERSON: Commissioner Morin?
LISTNUM 1 \l 14934 COMMISSIONER MORIN: Yes. I'm wondering if there is a tendency through the word that those mechanisms are more and more implemented and is it usually the result of an enforcement policy, or is it done on a voluntary basis, especially in the new media?
LISTNUM 1 \l 14935 MR. GOLDMAN: I think that you're looking for expertise that Ryan has, that I don't have in this arena, but reading the papers that he's provided, it does seem to be a voluntary thing.
LISTNUM 1 \l 14936 Certainly in terms of domain name disputes which is the model he refers to, in my own personal experience I know that it is a voluntary thing.
LISTNUM 1 \l 14937 COMMISSIONER MORIN: Yes.
LISTNUM 1 \l 14938 MR. GOLDMAN: And that you could either go the court route or you could try and work through ICAN. I've done it before, so I know that it was really cheap and it was really fast and everybody was happy within about a week.
LISTNUM 1 \l 14939 COMMISSIONER MORIN: But did you observe a tendency through the word about those mechanisms, resolution...
LISTNUM 1 \l 14940 MR. GOLDMAN: Efficient and inexpensive and supportive of the business interests of everyone involved. That's my experience personally.
LISTNUM 1 \l 14941 Ryan probably would have a lot more say but, unfortunately, he's delayed.
LISTNUM 1 \l 14942 COMMISSIONER MORIN: But it's not the result of a policy, a public policy?
LISTNUM 1 \l 14943 MR. GOLDMAN: I don't know the origins of ICAN, so, unfortunately, I can't speak to it, but I gather that there were an immense number of disputes as we've done our own research, limited, you know, on the Internet to determine the scope of the kind of problems that we're addressing which is between producers and broadcasters in Canada.
LISTNUM 1 \l 14944 And, you know, a comment that was made when we first began to address this issue with Telefilm, I said, you know, does this happen all the time? I said, you know, should I be embarrassed? And they said, no, no, it happens all the time.
LISTNUM 1 \l 14945 So, it would seem that this is something that could be easily helped along by a simple clause being required in the CTF policy that would, you know, have broadcasters and producers try and hammer things out before things get messy.
LISTNUM 1 \l 14946 COMMISSIONER MORIN: Thank you.
LISTNUM 1 \l 14947 THE CHAIRPERSON: Well, thank you, Ms Gerhards, Mr. Goldman. We don't have any other questions for you.
LISTNUM 1 \l 14948 MS GERHARDS: Thank you.
LISTNUM 1 \l 14949 THE CHAIRPERSON: Madam Secretary.
LISTNUM 1 \l 14950 MR. GOLDMAN: Thank you.
LISTNUM 1 \l 14951 THE SECRETARY: And now we will hear the presentation from the Comweb Group.
--- Pause
LISTNUM 1 \l 14952 MR. BRONFMAN: I can't believe there's actually more snow in Toronto than Ottawa. I was driving to the airport today in Toronto, there's a lot more snow in Toronto, but the hockey is a lot better here.
‑‑‑ Laughter
LISTNUM 1 \l 14953 MR. BRONFMAN: Except for Tuesday night.
LISTNUM 1 \l 14954 THE SECRETARY: Please present yourself.
LISTNUM 1 \l 14955 MR. BRONFMAN: Yes.
LISTNUM 1 \l 14956 THE SECRETARY: And you have 15 minutes.
LISTNUM 1 \l 14957 Thank you.
PRESENTATION / PRÉSENTATION
LISTNUM 1 \l 14958 MR. BRONFMAN: Yes, thank you.
LISTNUM 1 \l 14959 Okay. Good morning, or should I say good afternoon, Madam Chair, Mr. Vice‑Chairman, Commissioners. My name is Paul Bronfman and I am the Chairman and the CEO of the Comweb Group.
LISTNUM 1 \l 14960 I would like to begin by thanking the Commission for allowing us to speak before you today and about a topic which is of direct interest to the Comweb Group; namely, the Canadian Television Fund and the recommendations contained in the CTF Task Force Report.
LISTNUM 1 \l 14961 I am coming through loud and clear, right? Okay.
LISTNUM 1 \l 14962 Before I start it might be helpful to tell you a little bit about the Comweb Group and why the CTF is important to us.
LISTNUM 1 \l 14963 The Comweb Group is one of the world's leading production service companies. The Group is a privately owned and wholly Canadian owned controlled company with approximately 200 employees dedicated to supplying expert production equipment and studio services to the domestic and international film and television industry.
LISTNUM 1 \l 14964 Next page. Thank you.
LISTNUM 1 \l 14965 We have offices across the country in Vancouver, Calgary, Regina, Winnipeg, Toronto, Ottawa, Montreal and Halifax.
LISTNUM 1 \l 14966 Our Group consists of three subsidiaries, William F. White International, Cinequip White and Comweb Productions Inc.
LISTNUM 1 \l 14967 William F. White is Canada's oldest production equipment service company and was established in 1963 by William F. White.
LISTNUM 1 \l 14968 As well, Comweb is an active partner in Toronto's new film and television production facility film port which is a world class state‑of‑the‑art production facility scheduled to open this April, hopefully.
LISTNUM 1 \l 14969 Comweb is also the second largest voting shareholder of Astral Media and I serve on the company's Board of Directors.
LISTNUM 1 \l 14970 We were very pleased that the Commission decided to form a task force to review the Canadian Television Fund and we were especially supportive of the initiative to review governance of the CTF as a means of dealing with any real or perceived cases of conflict of interest.
LISTNUM 1 \l 14971 In this regard we note that the task force was given the mandate to investigate:
"...the most appropriate size and structure of the CTF board as well as the most appropriate mechanisms to deal with real or perceived conflicts of interest."
LISTNUM 1 \l 14972 MR. BRONFMAN: And that's found on page 4 of the task force mandate.
LISTNUM 1 \l 14973 Based on this mandate the Comweb Group would like to share with the Commission some of our views and concerns relating to the CTF, specifically with respect to the issue of conflict of interest among members of the board of the CTF, please.
LISTNUM 1 \l 14974 We would also like to present our views on what we think would be the best way to address these concerns with the ultimate goal of course of strengthening the CTF.
LISTNUM 1 \l 14975 So the area of conflict of interest I would like to address. We believe that conflicts of interest whether real or perceived are damaging, extremely damaging to the reputation of the Canadian Television Fund, not only in the eyes of the industry but also in the eyes of the public.
LISTNUM 1 \l 14976 In its annual report for 2006‑2007 the CTF states on page 10 under the heading "Mitigation of Conflict of Interest" that:
"The board chair and at least four other board members must be fully independent of any commercial connection with the television production or broadcasting businesses." (As read)
LISTNUM 1 \l 14977 MR. BRONFMAN: And that's a quotation.
LISTNUM 1 \l 14978 We believe that these guidelines have not been enforced as diligently as they could or should have been by the CTF and its board. A simple example will help illustrate the extent of this problem.
LISTNUM 1 \l 14979 It is well known that the current chair of the CTF has been a veteran of the production industry for many years and, indeed, as the president and CEO of a production equipment service company called PS Production Services Ltd. Recently, Comweb conducted a review of CTF funding allocations to film and television productions that received their equipment from PS Production Services Ltd. This review revealed that a total of 30 productions in the 2006‑2007 season were serviced by the chair's production service company, PS Production Services, which productions ‑‑ and those productions, excuse me, received more than $64 million in CTF funding over this timeframe.
LISTNUM 1 \l 14980 By contrast, our company, William F. White International, which is comparable to PS Production both in terms of its size and its line of business, provided production services and equipment to only 12 CTF‑supplied supported productions, totally $25 million during the 2006‑2007 season.
LISTNUM 1 \l 14981 Given that William F. White International holds the largest share of the Canadian production services market one would expect at a minimum, to be fair, that the results would be roughly the same for both companies or even reversed in favour of William F. White. Yet, the facts tell a different story. Only a fraction of the many productions in Canada that used our equipment in the 2006‑2007 season received CTF funding whereas one of our rivals serviced almost four times as many productions that received CTF funding, that being PS Productions.
LISTNUM 1 \l 14982 Do we think that this is a coincidence? Well, it could be. It may not be. But the fact is that the chair of the CTF is also the President and CEO of PS Production suggests to us that there is either a real or perceived conflict of interest at the board level.
LISTNUM 1 \l 14983 Our detailed analysis of the CTF's funding of productions that use the services of various production service companies is attached to our submission which hopefully you do have or will have. In our view, this analysis raises some very, very serious questions regarding conflicts of interest at the CTF.
LISTNUM 1 \l 14984 However, let me be clear. We are not arguing that the chair has used his influence to divert funds to specific productions. Each project was approved by the board of the CTF and external audits presumably demonstrate that these projects were awarded fairly. But the problem is the perception of a conflict of interest, as it relates to secondary beneficiaries of CTF funding, is undeniable and this problem must be remedied if the CTF is to have any real credibility in the industry and with the public at large.
LISTNUM 1 \l 14985 For this reason the Commission must ensure that there is complete independence of the board, the chair and the staff of the CTF.
LISTNUM 1 \l 14986 So we have reviewed the recommendations of the CTF task force and believe that many of these recommendations are long overdue and will be very effective if implemented in the manner recommended by the task force.
LISTNUM 1 \l 14987 With respect to the CTF's board of directors, there is no doubt in our minds that real changes relating to governance and accountability at the CTF board level are very much needed. Even the auditor general determined in 2005 that the composition of the CTF board is a potential source of conflict of interest. We endorse the recommendation of the CTF task force regarding the nomination process for the chair who would be nominated from among the independent board members or from those members representing contributors to the Fund.
LISTNUM 1 \l 14988 We also support the task force's recommendation number 14 to change the title of president to president and CEO, and recommend number ‑‑ recommendation number 16, that the CTF board should clearly define the respective role of president and CEO. We welcome the announcement by the CTF at this hearing process that they indeed intend to implement the recommendations by June of this year.
LISTNUM 1 \l 14989 Furthermore, with a view to creating a more relevant, effective and accountable CTF, we argue that the task force ‑‑ we argue with the task force that greater emphasis should be placed on professionalism and improving the day‑to‑day operations of the CTF. We maintain, however, that the president and CEO, as well as the chairman, including members of the CTF board, should be independent of any recipient of CTF funds. Only by doing so can the independence and transparency of CTF funding decisions be guaranteed and the problems arising from conflicts of interest, whether real or perceived, can be avoided.
LISTNUM 1 \l 14990 In this context we agree with the recommendation set out on page 32 of the CTF task force report and, in particular, we do endorse the recommendation 15(c) to exclude voting privileges from a newly‑created position of president and CEO.
LISTNUM 1 \l 14991 We also agree with the task force recommendation that a nominating committee be established to select new board members, a new chair and a new executive committee.
LISTNUM 1 \l 14992 However, we stress once again that board members and the chair should either be representatives of contributors to the CTF or independent members that have no financial ties or interest in the production industry. We further support the recommendation of the task force number 13 to remove recipients of CTF funding from the board.
LISTNUM 1 \l 14993 We would also like to see an additional condition included in this report which would ensure that secondary beneficiaries of CTF funding; such as production equipment, service companies and distributors be disqualified from serving on the CTF's board.
LISTNUM 1 \l 14994 Finally, we agree with CTF task force recommendation number 19 which would require the CTF to publish annual reports which include a breakdown of supported production and performance measurements for the CTF against set objectives.
LISTNUM 1 \l 14995 These new reporting requirements would contribute to greater accountability at the CTF and allow the public to monitor conflict of interest violations should they arise. We are encouraged by the recent actions by the CTF this past year and see them as a step in the right direction.
LISTNUM 1 \l 14996 Here is our conclusion.
LISTNUM 1 \l 14997 The Commission has a golden opportunity here to be the advocate for significant change and reform at the CTF. We truly believe that the recommendations of the CTF task force will go a long way in achieving this reform but these reforms will be ineffective if the recommendations of the task force and CTF governance are ignored. A strengthened Canadian Television Fund should have an independent and professional board of directors that is led by an individual that has no financial ties to any primary or secondary beneficiaries of CTF funding in order to avoid both real and perceived conflicts of interest.
LISTNUM 1 \l 14998 On behalf of my business partner, Larry Sacchetti, who is exec VP and chief operating officer of William F. White, right over there with the goatee, on behalf of Larry and I we would like to thank the Commission once again for inviting us to appear before it today and for taking the time to consider our submissions.
LISTNUM 1 \l 14999 We would be happy to answer any questions that the Commission may have regarding our submissions, and merci beaucoup. Thank you very much.
LISTNUM 1 \l 15000 THE CHAIRPERSON: Thank you, Mr. Bronfman and Mr. Sacchetti.
LISTNUM 1 \l 15001 MR. BRONFMAN: Thank you.
LISTNUM 1 \l 15002 THE CHAIRPERSON: I have to say I am glad to hear you flew in from Toronto. You give me hope that I will be able to get home tomorrow after all.
‑‑‑ Laughter / Rires
LISTNUM 1 \l 15003 MR. BRONFMAN: There is another snowstorm, I think.
LISTNUM 1 \l 15004 THE CHAIRPERSON: So I hear.
LISTNUM 1 \l 15005 Just a couple of points. Recently, I think about 10 days ‑‑ about 10 or 12 days ago, the CTF did make available a new document and we posted it on our website which clearly defines the role of the chair and the president. Have you had an opportunity to read that document?
LISTNUM 1 \l 15006 MR. BRONFMAN: I have read part of it but I really think still that I would reinforce what I said. I really think that if the chair and other members of the board have any ties primarily or to secondary CTF funding, I think that the perceived conflict of interest will continue to be a problem regardless of those guidelines.
LISTNUM 1 \l 15007 THE CHAIRPERSON: Okay, thank you.
LISTNUM 1 \l 15008 Now, I do admit this is an area that I don't know a lot about. Is there a bidding process that goes on between you and PS? I mean, let's use these two as an example. When you know there is a production going on in the city do you bid for that work, for them to use your facilities?
LISTNUM 1 \l 15009 MR. BRONFMAN: Usually. But oftentimes, sometimes there is not because again there is a ‑‑ there is an intimidation factor there. And we have had feedback from many producers from Halifax to Vancouver and all points in between that producers sometimes will not bid out the shows. They will automatically go to PS Production because they are intimidated by the fact ‑‑ and again it's perception sometimes that is greater than reality ‑‑ they are intimidated by the fact that if they don't use PS Production Services for their production equipment they may not get CTF funding.
LISTNUM 1 \l 15010 THE CHAIRPERSON: Or it may just be their own perception?
LISTNUM 1 \l 15011 MR. BRONFMAN: Exactly.
LISTNUM 1 \l 15012 THE CHAIRPERSON: Okay.
LISTNUM 1 \l 15013 Were you able to do an analysis prior to the current CTF chair being the chair and whether or not this difference in percentage of jobs that go to PS versus William F. White is the same or different or greater?
LISTNUM 1 \l 15014 MR. BRONFMAN: I actually did the last two years. We could do more but we just did the last two years.
LISTNUM 1 \l 15015 THE CHAIRPERSON: Okay.
LISTNUM 1 \l 15016 On page 6 ‑‑ no, I'm sorry. On page 5 of your oral presentation you said that:
"Each project was approved by the board of the CTF and external audits presumably demonstrate that these projects were awarded fairly." (As read)
LISTNUM 1 \l 15017 THE CHAIRPERSON: We heard on Monday that in fact it is not the board who decides on which project gets funded but rather its ‑‑ you know, the producer will go to the broadcaster for a licence fee and then the broadcaster submits or the producer will submit the application to the CTF and that the board is not involved at all in deciding who gets funded.
LISTNUM 1 \l 15018 Do you have different information that tells us that the board decides the projects?
LISTNUM 1 \l 15019 MR. BRONFMAN: I probably don't, but what I truly believe is that there is real problem out there in our industry for perceived conflict of interest and the intimidation factor of having to use one particular company over another because they are afraid they may not get their funding at the CTF level because the chair of a company has a dual role.
LISTNUM 1 \l 15020 THE CHAIRPERSON: And regardless, that's the bottom line.
LISTNUM 1 \l 15021 MR. BRONFMAN: Yes, yes.
LISTNUM 1 \l 15022 THE CHAIRPERSON: Well, thank you very much, Mr. Bronfman.
LISTNUM 1 \l 15023 MR. BRONFMAN: Thank you.
LISTNUM 1 \l 15024 THE CHAIRPERSON: My colleagues, Vice‑Chairman Arpin.
LISTNUM 1 \l 15025 COMMISSIONER ARPIN: Thank you.
LISTNUM 1 \l 15026 Mr. Bronfman ‑‑
LISTNUM 1 \l 15027 MR. BRONFMAN: Sir.
LISTNUM 1 \l 15028 COMMISSIONER ARPIN: ‑‑ in your oral presentation ‑‑ I am going to page 7, and at the end of the second paragraph you say that:
"...to ensure that the secondary beneficiaries of CTF funding..." (As read)
LISTNUM 1 \l 15029 COMMISSIONER ARPIN: And you have dealt with prior beneficiaries before:
"...be disqualified for serving on the CTF board." (As read)
LISTNUM 1 \l 15030 COMMISSIONER ARPIN: Where do you put the broadcasters that are on the board of the CTF?
LISTNUM 1 \l 15031 MR. BRONFMAN: I think the broadcasters probably have a right to be on the board ‑‑ and this is not with my Astral Media hat on; this is with my Comweb group hat on ‑‑ because they are the funding source. So I don't have an issue with broadcasters.
LISTNUM 1 \l 15032 COMMISSIONER ARPIN: Now, the distributors, the cable and the satellite are the contributors. The broadcasters, because we have been told by a few intervenors so far that the broadcasters are also beneficiaries to their affiliated company ‑‑
LISTNUM 1 \l 15033 MR. BRONFMAN: Right.
LISTNUM 1 \l 15034 COMMISSIONER ARPIN: ‑‑ when they do have an affiliated company and the major ones all have an affiliated company and they are ‑‑ and since also they are triggering the call for programming because they are given the envelope, the broadcasting envelope, then they are the primary; even beneficiaries of the Fund.
LISTNUM 1 \l 15035 So that's why I am asking you where you put the broadcasters in your ‑‑ from a governance standpoint where do you put the broadcast in this array?
LISTNUM 1 \l 15036 MR. BRONFMAN: I still think the broadcasters have a right to be on the board. I mean, maybe I'm maybe a bit softer on the broadcasters and some of my other colleagues in the production industry. But I wouldn't have an issue with the broadcasters being on the board.
LISTNUM 1 \l 15037 COMMISSIONER ARPIN: Okay.
LISTNUM 1 \l 15038 MR. BRONFMAN: As long as it's not dominated by the broadcasters.
LISTNUM 1 \l 15039 COMMISSIONER ARPIN: It is not.
LISTNUM 1 \l 15040 MR. BRONFMAN: Exactly.
LISTNUM 1 \l 15041 COMMISSIONER ARPIN: To my knowledge.
LISTNUM 1 \l 15042 MR. BRONFMAN: Right, me too.
LISTNUM 1 \l 15043 COMMISSIONER ARPIN: Okay. Thank you very much, Mr. Bronfman.
LISTNUM 1 \l 15044 MR. BRONFMAN: Merci. Thank you.
LISTNUM 1 \l 15045 THE CHAIRPERSON: Commissioner Morin.
LISTNUM 1 \l 15046 COMMISSIONER MORIN: Mr. Bronfman, is it the first time that you are seeing page 3 and 4, that you are seeing those things publicly?
LISTNUM 1 \l 15047 MR. BRONFMAN: Yes, it is.
LISTNUM 1 \l 15048 COMMISSIONER MORIN: It is. So in the past have you ‑‑ did you ask some questions to the CTF board? Did you ask ‑‑ did you say those facts? I presume they know but ‑‑
LISTNUM 1 \l 15049 MR. BRONFMAN: I did not and, you know, it's a bit of a quandary here because, you know, as a company we do support the CTF board ‑‑ the CTF.
LISTNUM 1 \l 15050 COMMISSIONER MORIN: The CTF.
LISTNUM 1 \l 15051 MR. BRONFMAN: And you know we would not want to be viewed by our clients across the country that somehow we were casting negative opinions on the CTF because many of our clients receive funding from the CTF.
LISTNUM 1 \l 15052 So the long answer is, yes, this is my first time raising it publicly. And as I said before, producers across the country will not go on record but they have told us many times on the QT, and they do not want to be named, that they feel intimidated by not using PS Production Services.
LISTNUM 1 \l 15053 COMMISSIONER MORIN: So even in an informal way, you didn't try to inform some members of those facts?
LISTNUM 1 \l 15054 MR. BRONFMAN: I did not. I was more comfortable doing it in a public forum.
LISTNUM 1 \l 15055 COMMISSIONER MORIN: Thank you.
LISTNUM 1 \l 15056 MR. BRONFMAN: Merci.
LISTNUM 1 \l 15057 THE CHAIRPERSON: Well, thank you very much, Mr. Bronfman, for your contribution and safe travels home.
LISTNUM 1 \l 15058 MR. BRONFMAN: Thank you for having us.
LISTNUM 1 \l 15059 THE CHAIRPERSON: Thank you.
LISTNUM 1 \l 15060 MR. BRONFMAN: Thank you.
LISTNUM 1 \l 15061 THE CHAIRPERSON: We will take a 10‑minute break.
LISTNUM 1 \l 15062 MR. BRONFMAN: Thank you.
‑‑‑ Upon recessing at 1420 / Suspension à 1420
‑‑‑ Upon resuming at 1429 / Reprise à 1429
LISTNUM 1 \l 15063 THE SECRETARY: Please take a seat.
LISTNUM 1 \l 15064 We will start with the presentation of Bell Broadcast and New Media Fund. Please introduce yourself and you have 15 minutes.
LISTNUM 1 \l 15065 Thank you.
PRESENTATION / PRESENTATION
LISTNUM 1 \l 15066 MS SHEFFER: Good afternoon, Madam Chair, Members of the panel, Commission staff, Mesdames et messieurs. Je suis Andra Sheffer et je suis la directrice générale du fonds indépendant de production du fonds Bell et du fonds Cogeco.
LISTNUM 1 \l 15067 I am here today to share with you our experiences with these three funds in the hopes that it can inform you in your deliberations on the Canadian Television Fund.
LISTNUM 1 \l 15068 These funds may provide certain models as they have operated successfully and efficiently for 16 years in both English and in French and they have the strong support of their BDU contributors.
LISTNUM 1 \l 15069 All three of the funds that I represent have been certified by the Commission as independent production funds qualified to receive and administer up to 20 percent of a BDU's contribution to Canadian programming. They each have their own mandates and their own separate boards of directors but they share common administrative services and offices.
LISTNUM 1 \l 15070 The IPF was originally created in 1991 as the MacLean Hunter Television Fund with an endowment of $29.2 million which has now grown to $37 million. It now also receives BDU contributions from Mountain Cablevision Ltd., its interests on the endowment, the BDU contributions and revenues from recoupment of equity investments. These are the three sources of revenues which allow the IPF to make equity investments in Canadian primetime adult drama series and children's drama series each year for private broadcasters.
LISTNUM 1 \l 15071 The IPF has a seven‑member board made up of individuals with industry expertise. This board reviews the applications and the evaluator's staff recommendations and makes funding decisions three times per year based on creative, financial, business and marketing aspects of each project.
LISTNUM 1 \l 15072 The IPF makes equity investments in an average of 14 projects per year or approximately $2.5 million. The IPF also administers the other funds by providing office and staff services under contract to them.
LISTNUM 1 \l 15073 The COGECO Fund finances the development of drama series and movies of the week, provides equity investments for movies of the week and pilots for series and provides corporate loans to companies developing feature films.
LISTNUM 1 \l 15074 The COGECO Fund was established in 1992 with a $5 million endowment which is now valued at $6 million and also received BDU contributions of approximately $2 million per year from COGECO Cable. It has a small board of six directors with industry expertise. One‑third of these directors represent the BDU contributor.
LISTNUM 1 \l 15075 A committee of the board reviews all of the applications three times a year and recommends to the board which projects should be funded. Recommendations again are subjective as they are based on evaluator analyses, creative and business aspects of each project.
LISTNUM 1 \l 15076 The COGECO Fund supports an average of 30 projects per year in development and approximately 10 per year in production totalling about $2.5 million.
LISTNUM 1 \l 15077 The Bell Fund advances the Canadian broadcasting system by funding the development and production of new media associated with Canadian television productions. It was established in 1997 by Bell Canada and since 1999 it has been receiving from Bell ExpressVu a percentage of their required BDU contributions which is estimated to reach $10 million this year.
LISTNUM 1 \l 15078 The Bell Fund also operates a $10 million endowment resulting from the BCE‑CTV benefits. The income generated by this endowment specifically funds development of new media projects.
LISTNUM 1 \l 15079 The Bell Fund has a nine‑person board made up of industry executives including three from the Bell family. This Board makes objective funding decisions based on evaluator recommendations. Unlike the other funds, the Bell Fund's investments are non‑recouperable grants to help encourage the development of leading‑edge new media projects, new business models and industry growth. The Bell Fund supported 35 projects in production last year and 26 in development.
LISTNUM 1 \l 15080 Over the years our three funds and five fulltime and two part‑time staff in offices in Toronto and Montreal have learned a few things related to issues that the Commission is addressing in this hearing. I hope that you can find our experiences illuminating.
LISTNUM 1 \l 15081 First, about board structure and governance: A small board of industry experts representing various aspects of the industry has been very effective. Our boards range in size from six to nine individuals. These boards operate at arms‑length from their BDU contributors. We have conflict of interest guidelines that are regularly used without incident. Industry expertise allows the board to actively direct policy as well as make subjective and knowledgeable funding decisions. Board members are frequently a resource for the staff, providing advice and guidance.
LISTNUM 1 \l 15082 The Bell Fund board is a good example of a board that is representative of its stakeholders. One of its members is a representative of a Bell ExpressVu, the BDU contributor, the other two from the Bell family. Its other members represent various aspects of the industry and they are from multimedia training, digital production, interactive advertising, broadcasting, new media technologies, consulting.
LISTNUM 1 \l 15083 As established in its bylaws, the BDU contributor is the only member of the fund. As a member it is entitled to nominate and elect the directors of the board. Typically, the member seeks the advice of the industry and incumbent directors in determining the composition of board directors. This has proven to be a very effective process providing the BDU with input on board composition while ensuring that the industry is also well represented.
LISTNUM 1 \l 15084 This Bell Fund board model in particular wherein contributors form one‑third of board directors and have the responsibility to elect the other board members in consultation with the industry, is a variation on the task force proposal. It has worked very well for the Bell Fund and is a model to be considered.
LISTNUM 1 \l 15085 All our board members act in the best interests of the funds that they are participating on and they act independently of any association interests. As funded administrators we look to the boards for policy direction and funding decisions. However, all day‑to‑day management of all activities of these funds is undertaken by the management and the staff.
LISTNUM 1 \l 15086 As administrators we also ensure that our contributors are happy. Not only are they represented on the board, but the funds and therefore their corporate names appear on the credits of all productions they support. We ensure that they are invited to participate at public and promotional events and to meet with the producers and the talents that they support. They receive recognition in all of our promotional and information materials and at all events in which the funds participate. They are informed of broadcasts of their productions and of award and kudos and critical acclaim that their productions receive.
LISTNUM 1 \l 15087 We make every effort to make them proud of their fund and to feel that their contributions are making a difference. Even though these contributions are required, their buy‑in to these funds have been essential to their success. This ability and credit can go a long way in building satisfaction.
LISTNUM 1 \l 15088 Second, audience success: Every project submitted to us thinks it is market oriented in some way. Each has hopeful estimates for audiences and traffic numbers and most have dutifully calculated and well‑informed projections of significant revenues.
LISTNUM 1 \l 15089 Potential audience size is not the primary criteria when making funding decisions at these funds. A statistical measure of absolute audience numbers is indeed subject to a range of external factors which impact on the audience size.
LISTNUM 1 \l 15090 Therefore, the focus for funding decisions by all of these funds is on excellence and high quality productions which is a result of subjective analysis.
LISTNUM 1 \l 15091 Popular shows such as reality shows do not necessarily meet the criteria of quality. Our funds have the luxury of subjective analyses given the volume of applications they review each year. They can look at the broader picture beyond the first telecast in Canada to the audience it is intended to serve, to the international impact and to the impact on the production company and the talents involved.
LISTNUM 1 \l 15092 Their first concern is the creative material. Is it good? Is the team of producers and creative personnel and crew likely to produce a high quality production? Is the budget appropriate and sufficient to fulfil the creative vision?
LISTNUM 1 \l 15093 Broadcasters make these same analyses on these projects in order to select those they wish to licence which in turn ensure that the projects are eligible to apply to the funds and to the CTF. However, together with our team of external evaluators, we also conduct our own creative due diligence. We do this primarily because with limited funds we cannot fund everything that broadcasters want to air. We can only fund what we consider in our subjective analysis to be the best.
LISTNUM 1 \l 15094 The funds also conduct further reviews of the project, the financing plan, the business plan; the marketing and promotion plan. These are issues that broadcasters have differing levels of interest in. As an equity investor our funds must conduct this level of analysis to determine if there is likelihood of the investment being recouped.
LISTNUM 1 \l 15095 Therefore, audiences internationally and potential sales revenues internationally are important evaluation factors as is in fact the merchandising potential of toys and other ancillary rights.
LISTNUM 1 \l 15096 Potential audiences in Canada are only part of the measure. Projects may be approved for funding although they are designed for small, specific niche audiences. But they are high quality and they expect to be well received by that niche audience.
LISTNUM 1 \l 15097 Different criteria are used for projects destined for the English and the French‑language markets and for different genres. There are many influencing factors as every project has its own relevant measures for success. Only knowledgeable, subjective analyses can assist making these funding decisions and even then no one knows for sure.
LISTNUM 1 \l 15098 Projects with a minimum of 8 out of 10 for Canadian content are eligible at these funds as per the CRTC regulations governing certified independent production funds. Although the vast majority of the projects we fund do have 10 points for Canadian production talent, the flexibility to use non‑Canadian skills has been deemed important on occasion by several producers and broadcasters for various sales and promotional reasons and some of these projects were approved for funding.
LISTNUM 1 \l 15099 The reality of Canadian television is that we often do attract sizeable audiences in Canada and we also have commercial successes with productions that sell internationally to 175 countries. However, even then the revenues generated rarely cover the costs of high quality production.
LISTNUM 1 \l 15100 Now, new media financing: The Bell Fund has been at the forefront of cross‑platform new media television production for the past 10 years. It has invested over $57 million to build this industry in Canada. There is no question that the new media industry could certainly use additional funding to grow and maintain the competitive edge that has been established. The Bell Fund cannot fund all of the high quality applications it reviews each year, even given its present niche mandate which is limited to supporting original interactive projects associated with television programs.
LISTNUM 1 \l 15101 It is important to clarify that the Bell Fund projects are original, interactive content designed specifically for alternate platforms such as websites and mobile devices. This is only a small subset of the digital media being created in Canada. It does not, for example, include linear programming created for VOD or pay‑per‑view broadcast or interactive digital projects not associated with a particular television program.
LISTNUM 1 \l 15102 Broadcasters and new media producers also lack the resources to produce rich, engaging, original content designed for alternate platforms that may or may not be specifically linked to a particular television program or may be a standalone production. Such projects may, though, be eligible for support from Teleflex's Canada New Media Fund, funded through the Department of Heritage, but again the annual funding available is not sufficient to meet the demand.
LISTNUM 1 \l 15103 Revenues generated by cross‑platform productions are still minimal and expectations of full recoupment and profit are unrealistic in most cases but they are growing. Like the Canadian dramatic television industry where recoupment is 13 percent on the dollar is the average, this is a cultural industry that must be subsidized at least in the short term.
LISTNUM 1 \l 15104 Our funds support the test for recommendation to amend the CRTC regulations regarding BDU‑certified independent production funds to allow for the flexibility to finance projects designed for new media platforms. This would provide an option for interesting new alternative funding sources for this industry sector.
LISTNUM 1 \l 15105 Diversity: All of our funds believe that it is essential for the good functioning of the Canadian broadcast industry that the producers have alternative and complementary sources of funding for their projects. Whether evaluations are objective or subjective, projects may not be awarded funding from a particular source for various reasons.
LISTNUM 1 \l 15106 Multiple funders provide alternative and complementary perspectives and operate with different funding objectives. Each of our funds has developed a focused expertise in the genre that they represent and this specialization has been valuable both to the decision making process and to the recipients. Given their structure they can be flexible and adapt quickly to address industry needs. Accessibility and close communications with producers allow different insights to be developed.
LISTNUM 1 \l 15107 The funds provide leadership and undertake to pro‑actively assist the production community. No one funding body can be expected to satisfy all of the needs of this complex industry.
LISTNUM 1 \l 15108 The IPF, the COGECO Fund and the Bell Fund all believe that Canadian programming must be supported. These funds provide opportunities and models that could be adapted by the Canadian Television Fund, a fund which is one of the various tools available to our industry. Changes to any one part of the complex funding system will impact us all. All funding partners must work together to maximize the success of our industry.
LISTNUM 1 \l 15109 We would be pleased to answer any questions. Thank you.
LISTNUM 1 \l 15110 THE SECRETARY: Thank you.
LISTNUM 1 \l 15111 Now, we will hear the presentation of Shaw Rocket Fund.
PRESENTATION / PRÉSENTATION
LISTNUM 1 \l 15112 MS AUGUSTIN: Good afternoon, Madam Chair, Members of the panel, Commission staff, ladies and gentlemen.
LISTNUM 1 \l 15113 I am Agnes Augustin. I am President of the Shaw Rocket Fund.
LISTNUM 1 \l 15114 The Shaw Rocket Fund receives BDU contributions from Shaw Communications, Star Choice, EastLink Cable Systems and Delta Cable.
LISTNUM 1 \l 15115 When we think of our children, my kids, your children, our grandchildren, how can we not think about who they will become and how they will shape the world we live in? We strive to give our children the best in hopes that they will have what they will need to become successful adults with Canadian values and sensibilities.
LISTNUM 1 \l 15116 Children are the future and this is especially true when it comes to media. The other day, my 12‑year‑old downloaded songs onto my friend's mobile phone to the Bluetooth capability without instruction or a manual, just picked it up and did it. At our dance studio the kids are watching downloaded programming on their iPod touch, it is amazing what is happening right now.
LISTNUM 1 \l 15117 And this is just the beginning. Children are shaping the future for everyone at a rapid pace. And in order to be effective we, as supporters of quality content, need to be there for them or they will look elsewhere and what they will find will likely not be Canadian.
LISTNUM 1 \l 15118 Everything that the Shaw Rocket Fund does stems from one mandate, how do we best serve Canadian children, our audience? This hearing on the Canadian Television Fund provides an opportunity to review how we as an industry support the Canadian audience and what we can do to ensure that now and in the future we are giving the audience what they want to see and when they want to see it.
LISTNUM 1 \l 15119 We would like to address the following three points regarding this review of the Canadian Television Fund; we would like to discuss the audience, a new model for the industry, and the Shaw Rocket Fund as an example.
LISTNUM 1 \l 15120 When we look at the audience we think it is quite straightforward. We need to give Canadians programming that they want to see, that showcases Canadian values and sensibilities wherever and whenever they want to see it, and this is especially true for our children.
LISTNUM 1 \l 15121 We at the Shaw Rocket Fund believe that Canadians like being Canadian and like Canadian programming, adults and children alike.
LISTNUM 1 \l 15122 And even though American programming dominates in English‑Canada, we believe that Canadians want to see themselves in the stories being told. And this is most important for our children who are very influential and need to see diversity of voices that reflect who we are as a country?
LISTNUM 1 \l 15123 The CTF has made changes to become more market driven, as broadcasters determine what is financed through the CTF and audience measures are in place. And, in theory, this should all work. But in an environment where foreign program acquisitions cost less than original Canadian programming and draw more advertising revenue, the condition of licence to air Canadian programming can sometimes become just that, a condition of licence.
LISTNUM 1 \l 15124 When looking at the CTF statistics in the 2006/2007 annual report, 58 per cent of the total CTF funding went to dramatic programming, yet these programs drew only 4 per cent viewership. In contrast, only 18 per cent of the CTF funds were allocated to kids programming, that is 40 per cent less than the allocation to drama. Also surprising, is that of the CBC's 37 per cent allocation of CTF funds only 11 per cent was spent on kids programs.
LISTNUM 1 \l 15125 When it comes to children's programming, we have been told by the CTF that their support is in line with the percentage of total viewership by Canadian kids. Although this may be true, the statistics include non‑priority programming of news, sports, reality and from both foreign and Canadian sources. We would expect the overall viewership to be less, my children don't watch the 11:00 news.
LISTNUM 1 \l 15126 More appropriate, perhaps, is to look at the viewership of Canadian programs in the genres supported by the CTF. In the 2006/2007 CTF annual report it states:
"CTF‑funded programs in the children and youth genre derive the largest proportional share of all viewing, 42 per cent to Canadian programs among the four genres supported by the CTF." (As Read)
LISTNUM 1 \l 15127 We are strangely in an environment where children viewers are lumped into a genre category rather than being considered an actual sector of our Canadian audience. Producers of children's content continue to have to compete against dramatic programming dollars and can continue to lose out. It is most shocking that children's programming is considered less of a priority in the Canadian broadcasting system when it shapes our children's views, and it has proven to be one of our country's best success stories.
LISTNUM 1 \l 15128 The CTF statistics continue to speak for themselves. CTF funding for kids was the lowest of CTF genres at 22.5 per cent of all budgets, as well as having the lowest broadcaster licences in all genres at 30.2 per cent. The difference was made up with higher distribution advances showing the strength of kids programming in the marketplace and, not surprising, the highest support by private funds, like the Shaw Rocket Fund.
LISTNUM 1 \l 15129 We at the Shaw Rocket Fund have worked diligently over the past years to financially support the best children's programs Canadians have to offer, to support these programs in the marketplace and to heighten the profile of our Canadian programming nationally and internationally, to ensure that desirable Canadian programs are available to Canadian kids.
LISTNUM 1 \l 15130 But we can't do this alone. All stakeholders need to truly buy into the importance of programming for Canadian kids; broadcasters, including OTAs, producers, BDUs, government, and of course the Canadian Television Fund. As the Shaw Rocket Fund discussed at the OTA hearing in November, 2006, we strongly believe that it is the responsibility of all stakeholders to give Canadian kids access to great Canadian programming. This is not about genre allocation, this is about giving our children Canadian content that positively affects their lives.
LISTNUM 1 \l 15131 Where, how and what Canadian children watch today will be carried into their adult years and we all need to be prepared. Programming for children must become a priority for the Canadian Television Fund.
LISTNUM 1 \l 15132 And this leads us to our second point, looking at a new model for the industry. In this brave new world of multiplatform delivery it is impossible to build an industry by tweaking outmoded regulations. We at the Shaw Rocket Fund believe that in this review of the CTF there is an opportunity for dramatic change with one clear goal in mind, the audience. What do Canadians want to watch and how do we best get it to them, when they want to see it and how they want to see it.
LISTNUM 1 \l 15133 Although, it may appear to be obvious when we say that kids are the future, we believe this is especially true when it comes to business of media. Kids' viewing patterns are setting everyone's path to the future and lessons can be learned from our kids and from the business of children's production.
LISTNUM 1 \l 15134 We also believe that the Canadian TV industry model needs to return to the basic Canadian value of fairness in the marketplace. If the industry is to grow and develop all participants deserve a chance to benefit from the creation of a world‑class product. With developing platforms the issues of rights becomes very critical for all parties.
LISTNUM 1 \l 15135 Broadcasters, from what we can see in children's programming, want more rights in order to remain competitive which, in my instances, affect producers' rights and the rights of the funds. Fairness in the marketplace will ensure that there is a healthy industry that will continue to make great, relative, innovative programming for Canadians.
LISTNUM 1 \l 15136 The new model must support independent companies to produce content that reflects Canadians to the world while being given a fighting chance to grow and develop. The private funds are a simple and successful model created by the CRTC and we urge the Commission to consider these funds when reviewing the Canadian Television Fund.
LISTNUM 1 \l 15137 The Shaw Rocket Fund has much to offer with its structure and business practices. We have been successful at supporting high‑quality Canadian programming that Canadian children watch and that sells internationally. We champion the creators of our Canadian programming, we support broadcasters through our production funding, and we have been able to create a sense of pride for our BDU contributors. The Shaw Rocket Fund is a well‑established and successful model of private sector funding.
LISTNUM 1 \l 15138 We, like the other private funds, as Andra went through, follow simple essential criteria outlined in the CRTC public notice 1997/1998. More specifically, the Shaw Rocket Fund is based on the following structure. We have a non‑stakeholder board, members are knowledgeable, our work is transparent, our goals, objectives and criteria for decision making are clear. Our start and end point is our audience, Canadian kids, this provides a clear focus.
LISTNUM 1 \l 15139 We invest based on quality and not quotas. We constantly assess our results, our effectiveness and that of our producers. We take steps to keep current with our audience and the industry and plan for the fund based on tomorrow, not yesterday. And we take into consideration all of our stakeholders; children, the producers, our BDU contributors, regulators, and the industry as a whole.
LISTNUM 1 \l 15140 The focus of the Shaw Rocket Fund is simple, the decisions we make must be to the benefit of our audience, Canadian children. This is relevant even when protecting rights and promoting good business practices and this enables a healthy industry that will produce more great Canadian programs for our kids and all stakeholders benefit as a result.
LISTNUM 1 \l 15141 The Shaw Rocket Fund board and management recently completed at two‑day workshop with influential producers and leaders in youth communications to review what is happening in media today with kids. And during this session, one producer was quoted as say, "It used to be Telefilm that determined the program's viability in a marketplace, and now it is the Shaw Rocket Fund." If the Rocket Fund is attached, our partners know it is a good program.
LISTNUM 1 \l 15142 We urge the Commission to consider the impact that the Shaw Rocket Fund has had on the Canadian children's programming sector. We invest approximately $10 million per year, which is just over 3 per cent of the CTF budget and, yet, we have had much success in promoting and supporting the best of Canadian programming across the country and abroad.
LISTNUM 1 \l 15143 At this time, we would like to revisit two primary requests put forward by the Shaw Rocket Fund at the OTA hearing, as well as through our recent correspondence with the Commission.
LISTNUM 1 \l 15144 We would like to see an increase to Shaw's BDU contribution to the Shaw Rocket Fund. We request an increase to 1 per cent up from the current .6 per cent of the 3 per cent allocation to independent production funds in support of children's programming. This would allow the fund to support an additional 10 to 15 programs and new media projects per year and would only have a 1 per cent effect on the CTF.
LISTNUM 1 \l 15145 Number two, would be the ability for the fund to support new media productions without a broadcast licence. This would be in addition to supporting traditional broadcast productions. We would like to be able to finance content for kids where it is best suited and being watched on various platforms.
LISTNUM 1 \l 15146 The Shaw Rocket Fund is capable of doing more and these two requests would enable the fund to be proactive in this new world with additional resources to continue to support and be the champion of Canadian content for our kids wherever and whenever they are watching it.
LISTNUM 1 \l 15147 In closing, we would like to say that we are partners in this exciting industry with media and the Shaw Rocket Fund would like to work with all stakeholders so that we can collectively make the best programming that the Canadian audience wants and to ensure that Canadian children are a priority in everything that we do.
LISTNUM 1 \l 15148 We thank the Commission for the opportunity to present at this hearing and welcome any questions.
LISTNUM 1 \l 15149 THE CHAIRPERSON: Thank you, Ms Augustin and Ms Sheffer.
LISTNUM 1 \l 15150 Commissioner Morin.
LISTNUM 1 \l 15151 COMMISSIONER MORIN: Yes, good afternoon. I would like to ask some questions to Bell and Cogeco media fund. Contrary to many interveners here, you fully support the principle of a new fund or a new envelope for new media. You applaud the idea of a new media fund financed by the CTF.
LISTNUM 1 \l 15152 But under the current proposal these new projects would be financed by an old system, as you know, that is already overburdened. Many actors here believe that it is a recipe for disaster. You don't agree, I understand, and you expect the worst if we do nothing as far as the new media are concerned.
LISTNUM 1 \l 15153 MS SHEFFER: That was in our original submission to you and there has been a lot of thought and debate about it ever since, I have to admit. There is no question that we need new money in the system or we need money in the system somehow for new media. It is an important new platform where our culture is being disseminated and it is absolutely essential that we find the money somewhere.
LISTNUM 1 \l 15154 But the discussion has been around all of these new variations on what the CTF could potentially become or what it would change or wouldn't change. And it is a question of whether Telefilm's new media fund is already serving that purpose, welling the Bell fund is already serving that purpose, whether it is a role for the CTF, because it is entire a new world and the CTF does have its hands full with Canadian broadcast programming. So, although we are very concerned that there actually be a lot of consideration given to the new media support, there is certainly no consensus on where that support should come from.
LISTNUM 1 \l 15155 COMMISSIONER MORIN: The task force has said that an ideal board ought to be composed of five independent members. You also agree with the recommendation that the CTF board be smaller, and you gave your example, than it is presently. Do you think that a smaller board would be more effective even at the cost of the valuable expertise a larger board provides like the CTF? For example, as you know, the CTF has a board of 15 plus administrators.
LISTNUM 1 \l 15156 MS SHEFFER: I can assure that with all of our experiences the small boards have been very effective. We have never felt that we don't have the representation that we need. If there were particular issues that needed further consultation, we would do so and be able to go out into the industry and consult with whoever we needed to consult.
LISTNUM 1 \l 15157 The boards we have are not independent in the sense that everyone of them on the board is in someway related to the industry and have ‑‑ they are all senior executives in the industry, so they have a broad range of experience within the industry. So when they come to the board they are bringing a lot of different perspectives. And it has been working very well.
LISTNUM 1 \l 15158 They are representing no one but their own knowledge. There aren't conflicts of interest and we have the advantage that they are industry experts rather than independents who really don't know anything about the industry.
LISTNUM 1 \l 15159 COMMISSIONER MORIN: And I presume you have many guidelines as far as the conflicts of interest are concern?
LISTNUM 1 \l 15160 MS SHEFFER: We have a one‑page sheet that they sign each year and review. And, basically, the conflicts arise only in funding decisions because our boards do make the funding decisions, and that only happens if they are in some distant way related to some project and then they do not participate in those decisions.
LISTNUM 1 \l 15161 COMMISSIONER MORIN: Thank you. I have some questions for the Rocket Fund.
LISTNUM 1 \l 15162 You say that children's programming should receive a fair share of the $25 million allocated for new media initiatives. I would like to know what share of the $25 million should be reserved for the children's programming and why?
LISTNUM 1 \l 15163 MS AUGUSTIN: Well, we don't have an actual number. But historically, based on the CTF, the average percentage that goes to children's is 18 per cent of the entire CTF funding. Children are leaders when it comes to new media, they are the ones that are driving how it will shape the world.
LISTNUM 1 \l 15164 And so as far as we are concerned, the producers of our content, of our programs, are the ones that are going to be leading and meeting that type of funding. So we would definitely say if it was the 18 per cent that has been established by the CTF over the last five years, I think it has been on the average of 18 per cent, we would say that most certainly is not enough. We think that the children's industry would definitely need a higher percentage of that funding in order to be effective.
LISTNUM 1 \l 15165 COMMISSIONER MORIN: And if we accept the new structure proposed by the task force, the money will come from the two funding streams?
LISTNUM 1 \l 15166 MS AUGUSTIN: Well, that is a very good question, because that is something that we would say, does children's programming fall under the cultural side or is it commercial? I mean, it is considered one of the best or is the best business in our sector of television. It is the highest export, it has the most recoupment. So from a business perspective, even though it is receiving the smallest amount of funding, we have very innovative program that worldwide is known.
LISTNUM 1 \l 15167 So, in one way, it can be even more commercial that it is. But also, when you are dealing with children, it has to be culture as well, because it is our children and there is a responsibility. So this is where we find it very interesting when it comes to children's programs, is that is it a genre or is it an audience? And we think that it is the responsibility of all of us to look at our children in all aspects.
LISTNUM 1 \l 15168 So, yes, on the cultural side, educational programming, there should be an allocation there. But there should be some provisions on the commercial side that our producers could access that as well, but have something in place that would protect kids in that arena as well. Because on the commercial side children's programming doesn't draw the advertising revenue and there is a whole different dynamic when it comes to children's programming as far as what the value of it is in the marketplace, especially, you know, within the domestic marketplace.
LISTNUM 1 \l 15169 COMMISSIONER MORIN: So you won't have any objection that the two funds will compete, the public and the private, for children's programming?
LISTNUM 1 \l 15170 MS AUGUSTIN: Well, I wouldn't consider it competing, I would hope that they would all compliment ‑‑
LISTNUM 1 \l 15171 COMMISSIONER MORIN: Yes.
LISTNUM 1 \l 15172 MS AUGUSTIN: ‑‑ so that they would both have an allocation for children's, absolutely, not competing but actually augmenting.
LISTNUM 1 \l 15173 COMMISSIONER MORIN: But competing in the sense that some programs perhaps will be more popular on the public side. Many have been done in Quebec, for example, and they were a huge success. So do you think that the both funds are a good idea, a public and a private one?
LISTNUM 1 \l 15174 MS AUGUSTIN: Well, we need to know more about how the private structure would work. We don't have enough information as far as how that structure on the private side would ‑‑ how that would affect children's programming, because it doesn't fall into the dramatic category.
LISTNUM 1 \l 15175 I mean, we have, for example, have an example of a program called, This is Daniel Cook, which I am sure you have all seen Daniel with his red hair. And Daniel Cook started out on TVO and on the educational networks. We supported that at the very beginning when they were new producers and a lot of people didn't know who they were, and we have been in that program from the onset.
LISTNUM 1 \l 15176 And Daniel Cook became a huge success and YTV picked it up and now it has gone from being an educational cultural program, it still is, it is still the same program, but it has become more commercial. So it is a difficult answer, because we think that there are definitely some educational programs that would fit more of the cultural mode. But then kids programming can be very commercial as well and still have good values and good role modelling, so we would like to make sure that each stream would represent it properly.
LISTNUM 1 \l 15177 COMMISSIONER MORIN: If the recommendations of the task force are implemented, as far as the funding streams are concerned, do you think that the BDUs could be forced to contribute a fixed percentage of their money or in the private fund for the children's programming?
LISTNUM 1 \l 15178 MS AUGUSTIN: So you are asking if each BDU would be required to or overall?
LISTNUM 1 \l 15179 COMMISSIONER MORIN: Yes, the BDU ‑‑ the private fund or the ‑‑
LISTNUM 1 \l 15180 MS AUGUSTIN: Yes.
LISTNUM 1 \l 15181 COMMISSIONER MORIN: ‑‑ or the private stream will be provided by the BDU, you know?
LISTNUM 1 \l 15182 MS AUGUSTIN: Yes.
LISTNUM 1 \l 15183 COMMISSIONER MORIN: And do you think that it would be a good idea that a fixed percentage of the BDUs' revenue will be allocated for the children's programming?
LISTNUM 1 \l 15184 MS AUGUSTIN: Absolutely. There should be a fixed amount ‑‑ again, it would depend on what that amount would be and it would depend on how the structure of the fund is. So it would be difficult to answer that entirely, to say yes. But ideally, each of the funds, we would love to see that there would be an allocation and a decent allocation for children's program because of what it represents as a large part of our audience, so yes.
LISTNUM 1 \l 15185 COMMISSIONER MORIN: You say that the private funds should be consulted on any major changes to the CTF. What do you mean exactly and could you give me some reasons for the importance of this consultation?
LISTNUM 1 \l 15186 MS AUGUSTIN: Well, the primary reason for this is we are all partners in this industry. And we, as private funds, we augment, well we finance productions just like the CTF. Even though we are smaller as far as the funding is concerned, we are able to contribute in various ways. We are told by the CTF that we compliment them because we are subjective. Our fund, just like Andra's funds, do extensive creative review and financial review, we do quite a bit of due diligence, we have a lot to offer. And then from a producer's side, when we all work together in a partnership, it makes it a lot easier for everyone to achieve their goals.
LISTNUM 1 \l 15187 So if the CTF is being restructured or if there is a new fund being developed, we believe that we as private funds have a lot to offer because of our experience in our genres, but also experience as solid funders. And it makes it a lot easier for everyone involved in the funding of Canadian programming if we are working together to ensure that what is being done on one side compliments the other side.
LISTNUM 1 \l 15188 Because we have had challenges in the past where there have been changes made to the guidelines in the CTF and we haven't been consulted and then we have to reshift and then there is ‑‑ it affects production, it affects how we all do our business. And so we believe that we have a lot to offer by being part of whatever is being structured.
LISTNUM 1 \l 15189 COMMISSIONER MORIN: You say that the Shaw Rocket Fund has committed over $65 million to Canadian children's programming. Could you give us some examples of its success? And also, how do you define success? What are your criteria, syndication, audience numbers, et cetera?
LISTNUM 1 \l 15190 MS AUGUSTIN: When we look at children's programming, any Canadian programming really, there is various methods of looking at what is successful. We have some productions that come in that are very commercial. Atomic Betty, which is through Breakthrough Communications, is one of our hits, we actually recouped all of our money and I believe I can say that, because it has done really well internationally. And we knew that when we went in, it was not funded by the CTF, that in the first season we were one of the primary funders, and we knew when we went in that it was more commercial, we were a bit more aggressive with our business on that one and it was successful.
LISTNUM 1 \l 15191 So in that case, when we look at measuring that, we look at the business case. I mean, it doesn't work for every production, we know that because, I mean, as everyone stated here, you are not guaranteed a hit. But we do our best when we do our due diligence to ensure that on the creative side that it is strong and then look at the business.
LISTNUM 1 \l 15192 But we also look very strongly on our cultural mandate too. So there is definitely productions that we have financed that are specific for our region, a certain Aboriginal program that is really fantastic for its audience, knowing that it is not going to have a lot of return. So it really depends on what is provided to us and what the business is.
LISTNUM 1 \l 15193 And so when we measure success, when we look at a more commercial production, yes, it is audience numbers and then being able to sell in the marketplace. I mean, those definitely are two things that we consider and definitely whether it is serving the Canadian audience. So it really would depend on what type of production it is or what type of program.
LISTNUM 1 \l 15194 COMMISSIONER MORIN: You write that BDU contributions could contribute more efficiently to popular Canadian programming through their redirection to existing private funds rather than splitting the CTF. So could you explain?
LISTNUM 1 \l 15195 MS AUGUSTIN: When we first looked at the split from the CTF, when that first came through, we looked at the initial split as going back almost backwards towards the split when there was the LFP, the Licence Fee Program, and then the Equity Investment Program and being governed by two boards and the complexities of that.
LISTNUM 1 \l 15196 And so when the recommendation came through actually to split the two funds, we are of the mind that if there was actually going to be a split, then don't go backwards, let us look forward and say, well, we have private funds that exist that have their niches; the Documentary Fund, the New Media Fund, we have the Rocket Fund that is children's programming, and we have existing models that could be very effective and could take on the BDU side of that funding and be able to make the most of that funding. So we did propose that.
LISTNUM 1 \l 15197 At this point now, there has been so many recommendations as far as what to do with this money now. You know, the bottom line for the Rocket Fund is to ensure that children's programming is getting increased funding so that we can continue to serve that audience. So our recommendation goes back to what we have been suggesting, which is going up to the 1 per cent on the Shaw Communications side of our funding.
LISTNUM 1 \l 15198 COMMISSIONER MORIN: Thank you.
LISTNUM 1 \l 15199 THE CHAIRPERSON: Vice‑Chairman Arpin.
LISTNUM 1 \l 15200 COMMISSIONER ARPIN: Ms Augustin, I only have one question and you were in the room earlier today and surely have been following the Shaw Communications discussions that we had for the last 18 months. What will happen to the Shaw Rocket Fund if the Commission was to agree with the proposal put forward by Shaw Communications? Have you undertaken any discussion with them? Have they told you anything ‑‑
LISTNUM 1 \l 15201 MS AUGUSTIN: Not full discussion regarding ‑‑ no.
LISTNUM 1 \l 15202 COMMISSIONER ARPIN: ‑‑ that you could share with us?
LISTNUM 1 \l 15203 MS AUGUSTIN: No, we hope, and this is not confirmed, but we hope that ‑‑ well, we do know that Shaw has been very pleased with what we have done over the last four years for children's programming. And we do know that there is a sense of pride of what we have been able to accomplish with not just our investments, but with our Shaw Rocket Prize, we have heightened the profile. We believe we have done well for our contributors, not just Shaw, but also Eastlink Cable Systems. And we would hope that if there was a change that there would be continued support for children's programming.
LISTNUM 1 \l 15204 And we believe that when Mr. Stein said earlier that Shaw would continue to support the initiatives they believe in, we would hope that the children's programming would be one of those.
LISTNUM 1 \l 15205 COMMISSIONER ARPIN: So what you are saying here is that Shaw Rocket Fund believes that there is a need for financial support to independent production?
LISTNUM 1 \l 15206 MS AUGUSTIN: Yes.
LISTNUM 1 \l 15207 COMMISSIONER ARPIN: And obviously you are looking at it from the children's programming perspective?
LISTNUM 1 \l 15208 MS AUGUSTIN: That is correct.
LISTNUM 1 \l 15209 COMMISSIONER ARPIN: I have a few questions for you, Ms Sheffer.
LISTNUM 1 \l 15210 I am looking at your oral presentation. I think it is worded that we, and I will read the footnote on page 10, because it is an interesting footnote with data, so it could be it will help future analysts or students, whoever is making research, to have an understanding of what type of returns could be expected.
LISTNUM 1 \l 15211 The footnote reads:
"Independent production funds recoupment statistics 1991‑2007. English‑language drama series recoup an average of 17.9 per cent of their investments and French‑language production recoup 4.8 per cent." (As Read)
LISTNUM 1 \l 15212 I think it is interesting data, because there have been some interveners, yesterday, saying that there is no possibility of recoupment for French programming. So even if the number is not that significant, there is a recoupment of an interest.
LISTNUM 1 \l 15213 My first question is, you said in your oral presentation that ‑‑ well, you wanted to share your own experience and think that the format of operation of the independent fund could help out.
LISTNUM 1 \l 15214 Now, you said that the Board reviews the applications and evaluates staff recommendations and makes funding decisions three times per year. With the volume of applications that the CTF has to deal with, based on your own experience, how many times a year would they have to meet?
LISTNUM 1 \l 15215 Would they have to meet daily to make decisions if we were to follow that model?
LISTNUM 1 \l 15216 Because you said that it isn't a model that would be contemplated.
LISTNUM 1 \l 15217 MS SHEFFER: Between the three funds, we are going through about 200 applications a year. The CTF does have more than that.
LISTNUM 1 \l 15218 Subjective analysis takes a lot of time and effort, and the proposal to do a marketing, or a market‑driven fund ‑‑ it is unclear to me how that would actually work. As an administrator, I have been trying to figure that out.
LISTNUM 1 \l 15219 The only conclusion I can come to is that it has to be subjective. There has to be an analysis done of all the different aspects of the production ‑‑ the creative, the business, the financial, the marketing ‑‑ in order to determine if it is a market‑driven project or not.
LISTNUM 1 \l 15220 It would be a massive undertaking, I think, to expect all of the applications to go through a subjective process, and yet that is the way it would have to be done if it was to be done correctly.
LISTNUM 1 \l 15221 COMMISSIONER ARPIN: Okay. That's fine.
LISTNUM 1 \l 15222 You also mention in your oral presentation that you are financing 8 out of 10 points projects. We heard yesterday that, in all instances, it will be the writers that will be removed from the production, because all of the parties will want to have a more focus‑based, American point of view, and the writers are always the ones that get removed.
LISTNUM 1 \l 15223 What is your experience?
LISTNUM 1 \l 15224 MS SHEFFER: In our experience, this only happens a couple of times a year. It is not a frequent occurrence, and it usually does happen for some good reason, which we evaluate.
LISTNUM 1 \l 15225 There have been writers, there has been a director, and there have certainly been some performers, so I think it is pretty well spread across those key creative areas.
LISTNUM 1 \l 15226 There are occasions when it has been a music composer, too. There have been other categories.
LISTNUM 1 \l 15227 COMMISSIONER ARPIN: So it is not always the writer.
LISTNUM 1 \l 15228 MS SHEFFER: Not always, no.
LISTNUM 1 \l 15229 COMMISSIONER ARPIN: That's what I wanted to have on the record. Thank you very much.
LISTNUM 1 \l 15230 Thank you, Madam Chair.
LISTNUM 1 \l 15231 THE CHAIRPERSON: Thank you, Ms Shaffer and Ms Augustin, for your contribution.
LISTNUM 1 \l 15232 Madam Secretary.
LISTNUM 1 \l 15233 THE SECRETARY: Thank you.
LISTNUM 1 \l 15234 Now we will hear the presentation of Keith Mahar.
‑‑‑ Pause
LISTNUM 1 \l 15235 THE SECRETARY: You have 15 minutes for your presentation. Thank you.
PRESENTATION / PRÉSENTATION
LISTNUM 1 \l 15236 MR. MAHAR: Thank you.
LISTNUM 1 \l 15237 Good afternoon. The Commission has been provided with my research report, "Profiteering in the Name of Culture." Included with this report are a number of documents, one being a submission that I spearheaded by Cablewatch, which was filed with the CRTC on May 20th, 1996, as well as a related decision made by the CRTC on June 25th, 1996, a highly unorthodox decision that has never been made public. It concerns the authority of the CRTC to require Canadian consumers to pay a surcharge on the cost of cable TV in order to subsidize private cable television and production companies.
LISTNUM 1 \l 15238 The CRTC ruled on June 25th, 1996, in its unpublished decision, that Parliament had granted the Commission the authority to require consumers to pay a surcharge to fund subsidies to cable television and production companies.
LISTNUM 1 \l 15239 However, at the same time, the CRTC also ruled that the consumers being required to pay the subsidies were not entitled to notice that they were being required to pay the subsidies to the companies, or the monthly cost of the subsidies that they were being required to pay to the companies.
LISTNUM 1 \l 15240 This undemocratic regulatory scheme has continued to the present day. A conservative estimate of the redistribution of wealth under this program is more than $1.3 billion since January 1995.
LISTNUM 1 \l 15241 The CRTC has refused to provide me with additional information to enable a more precise amount to be calculated, but the information does exist and is available to the Commission.
LISTNUM 1 \l 15242 This is the third time that I have appeared before the CRTC to address this issue. It is still my position that Canadian consumers were deliberately misled, that influential corporations were unjustly enriched, that several government policies were violated by the CRTC, and that Canadians are entitled to be told the truth about this company subsidy program.
LISTNUM 1 \l 15243 I am here to simply direct your attention to the documents that I have placed on the public record and ask you to put an end to this deceptive practice.
LISTNUM 1 \l 15244 I strongly recommend a judicial review of this issue.
LISTNUM 1 \l 15245 Furthermore, CRTC legal counsel Shari Faisher notified me last August that the Commission had destroyed the unpublished decision on March 27, 2006. Ms Faisher refused to identify who at the Commission had authorized the destruction of the unpublished decision or why it had been destroyed at that particular time.
LISTNUM 1 \l 15246 Weeks before the decision was shredded, my legal counsel notified Stephen Harper, Gilles Duceppe, Jack Layton and Jim Harris of the unpublished decision, where it was contained in File 1000‑121 as evidence of potential illegal activities related to the companies' subsidy program.
LISTNUM 1 \l 15247 Earlier today I launched the website "Mediascam.com", the purpose of which is to raise awareness of this outstanding issue for interested parties.
LISTNUM 1 \l 15248 I thank you for the time, and I am open to questions. Thank you.
LISTNUM 1 \l 15249 THE CHAIRPERSON: Thank you, Mr. Mahar, for your submission and your presentation here today.
LISTNUM 1 \l 15250 For the record, you do refer to this unpublished decision a number of times, both in your presentation and here this afternoon. An unpublished decision is not a decision. A decision is not a decision until it is published.
LISTNUM 1 \l 15251 None of us was at the Commission in 1996, so I don't know what the genesis of this letter is, or why this decision was never published, but it is not a decision until it is published. I just wanted to put that on the record.
LISTNUM 1 \l 15252 You are quite a researcher, so I am going to assume that you have read some of the submissions, or perhaps all of the submissions on this file.
LISTNUM 1 \l 15253 MR. MAHAR: On ‑‑
LISTNUM 1 \l 15254 THE CHAIRPERSON: On the CTF file, and on what we are here to discuss this week.
LISTNUM 1 \l 15255 MR. MAHAR: No, I am a researcher on the issue that I put forward to you.
LISTNUM 1 \l 15256 I would also like to note that I actually have a copy of that destroyed decision. I put a copy of that destroyed decision as an appendix.
LISTNUM 1 \l 15257 So it exists, so you can comment on ‑‑ just because it was destroyed doesn't mean it never existed.
LISTNUM 1 \l 15258 It is actually posted on my website. I am willing to talk about what the implications are.
LISTNUM 1 \l 15259 If you don't want to, I acknowledge that. I am just here to say that it's there for everyone who wants to look at it.
LISTNUM 1 \l 15260 I also want to say that the Commissioners here today, and those who have been on the Commission for the last little while, inherited this issue. This was not your decision to make. In my estimation, it is the worst decision ever made, but it is not your decision.
LISTNUM 1 \l 15261 You have a problem, and it is a fact that that's what it is, and it's on the record. Thank you.
LISTNUM 1 \l 15262 THE CHAIRPERSON: Mr. Mahar, do you support the principles of the CTF?
LISTNUM 1 \l 15263 MR. MAHAR: Not as it is structured now.
LISTNUM 1 \l 15264 I support the principle of subsidies coming through Parliament.
LISTNUM 1 \l 15265 I think, when you look at the math of this partnership ‑‑
LISTNUM 1 \l 15266 Professor Joel Bakan from UBC, who wrote the corporation, made some very derogatory comments about partnerships between industry and government not being good for democracy. I think, when you look at partnerships, you have to have something coming from the partners. Each partner has to bring something to the table.
LISTNUM 1 \l 15267 What happened in this case was, all the cable companies brought to the table was that they were allowed by the CRTC to collect funds under false pretences, as long as they gave 50 percent of those funds to this fund.
LISTNUM 1 \l 15268 They are not a legitimate partner.
LISTNUM 1 \l 15269 I would support even more money being given to production companies. I would change it, though, from non‑repayable grants, which is free money, to some kind of investment ‑‑ equity investment ‑‑ where you know that they are not coming to you before all other parties. It is actually triggering production, as opposed to subsidizing greater wealth for production companies.
LISTNUM 1 \l 15270 I would support that. I would actually like to see the scope expanded to community channels, because I personally believe that the concentration of media is a problem. You just had a hearing on that a while ago. I think that if some of this money could be put into local production, you would have more diversity, and I think you would have a better broadcasting system.
LISTNUM 1 \l 15271 But I don't believe there is any ‑‑ there is no logical or mathematical reason for cable to be involved, or broadcasting distribution undertakings to be involved, because what happens is, say that you charge 5 percent or 10 percent of the revenues, that money is passed along to consumers. It's not shared, it's passed along.
LISTNUM 1 \l 15272 The problem is, as it is passed along, it is now embedded in the cost of the service. So those rate payers, whether they know about it or not, are now paying GST and PST on top of the cost of that embedded contribution.
LISTNUM 1 \l 15273 I think what has to happen is that ‑‑ there is no reason for that to happen. As long as it is sound policy, then it can withstand the scrutiny of Parliament. All of this money should come from Parliament. That is the way such a fund should be directed.
LISTNUM 1 \l 15274 I think that the composition of such funds has been a problem since Day 1, because all of the industry ‑‑ all of the stakeholders that were actually benefiting from the fund have been on the front. Consumers have paid for it without their knowledge, and they have been excluded from even being on as stakeholders.
LISTNUM 1 \l 15275 I think there are groups out there, whether it's the Consumers' Association of Canada or the Public Interest Advocacy Centre ‑‑ there has to be some kind of legitimate representation of consumer interests of such boards, and that's what I would put forward.
LISTNUM 1 \l 15276 THE CHAIRPERSON: Over the last two years the Department of Canadian Heritage has committed $120 million to the CTF. Do you think that's an adequate amount?
LISTNUM 1 \l 15277 MR. MAHAR: One, it depends on ‑‑ it's not just an adequate amount of the amount of moneys spent in production. I think you have to look at, if they are non‑repayable grants ‑‑ I have no idea whether those productions could have actually gone to other sources and got equity investment, and you could use that money more effectively to actually trigger more productions elsewhere.
LISTNUM 1 \l 15278 So it's impossible to say, and I am not an expert in any way, shape or form.
LISTNUM 1 \l 15279 What I do know is, the math of being a partner and forcing consumers to pay this and then pay taxes on top of it is just inefficient.
LISTNUM 1 \l 15280 I would also add that I have gone through some of the files, and there are some great shows ‑‑ entertaining shows ‑‑ that have been funded.
LISTNUM 1 \l 15281 I think people get caught up thinking, "Oh, this is a great show. This is very good," but some of them are internationally sold. I look at that and think: Why does that show, which is very successful, necessarily need funding, rather than other shows, maybe genres that aren't as popular.
LISTNUM 1 \l 15282 I know there is a push to make popular shows, but I just wonder if that makes sense.
LISTNUM 1 \l 15283 THE CHAIRPERSON: Do you think that the list of genres that qualify for CTF funding should be expanded?
LISTNUM 1 \l 15284 MR. MAHAR: I do. I admit to bias. We all have our biases, and I would admit that the process I have gone through, talking to politicians and actually trying to have an impact on policy ‑‑ I think that investigative reporting is drastically underfunded in this country.
LISTNUM 1 \l 15285 I think that if a fund could give out programming where consumers or citizens actually felt more empowered, or they were more actively involved in the community, because they were getting information ‑‑ it is not just about drama, it is not just about children's shows, it is really about engaging Canadians. That is my perspective.
LISTNUM 1 \l 15286 THE CHAIRPERSON: If the fund were to only be funded through parliamentary appropriation, do you believe that private broadcasters should be able to access the fund?
LISTNUM 1 \l 15287 MR. MAHAR: To be honest, my background was with CHUM and Canadian Satellite Communications. It wasn't in programming, it was in cable, and I don't really have an opinion. I don't have the expertise to comment on that.
LISTNUM 1 \l 15288 THE CHAIRPERSON: Fair enough.
LISTNUM 1 \l 15289 Do my colleagues have any additional questions?
LISTNUM 1 \l 15290 No.
LISTNUM 1 \l 15291 Thank you very much for your contribution, Mr. Mahar.
LISTNUM 1 \l 15292 MR. MAHAR: Thank you.
LISTNUM 1 \l 15293 THE CHAIRPERSON: We will take a 15‑minute break now.
‑‑‑ Upon recessing at 1530 / Suspension à 1530
‑‑‑ Upon resuming at 1543 / Reprise à 1543
LISTNUM 1 \l 15294 THE SECRETARY: We will start with the presentation of Mr. Sanderson Layng.
LISTNUM 1 \l 15295 You have 15 minutes. Thank you.
PRESENTATION / PRÉSENTATION
LISTNUM 1 \l 15296 MR. LAYNG: Thank you very much, Madam Chair, Commissioners, and members of Staff. It is very much a pleasure to be here today. We thank you for the opportunity.
LISTNUM 1 \l 15297 I have two purposes here this afternoon. One is to share with you my comments with regard to the CTF matter, and also to read into the record a presentation from Mr. Michael Girard, who was supposed to be part of this panel, but, unfortunately, there has been a death in his immediate family and he is unable to be here. He sends his apologies and has asked that I read his submission, which has been provided to Staff.
LISTNUM 1 \l 15298 It has been a while since I have appeared before the Commission. Previously I was here to talk about the issue of closed captioning, which I helped develop for Canada, and for which the Commission became an appropriate champion. It was the support of the Commission, and the whole industry, that really made closed captioning the tremendous success that it has been, and was a driving force.
LISTNUM 1 \l 15299 That strikes me particularly relevant as we look to the issue of the Canadian Television Fund, because the fund is also a champion when it comes to areas such as priority programming, and other areas where the support provided for voices that might not otherwise have a voice in the country is extremely important to our fabric. Just as the Commission has championed interests of importance to the country and to that fabric, it is important to have a strong voice being supported by the Canadian Television Fund.
LISTNUM 1 \l 15300 I am here today as a fan of both the Commission and the fund, and my commentary will be in that light.
LISTNUM 1 \l 15301 Much of what I was going to say has been presented in one form or another, so I will keep this quite brief.
LISTNUM 1 \l 15302 In listening to the hearing this week, I was particularly struck by the presentation from the CBC, Mr. Stursberg, when he referred to the fact that, like our country, the Canadian Television Fund is a work in progress, and that, as such, it also requires the support of the Commission, of those of us in the production field, of broadcasters, and everyone, to make it everything that it can be, and to help it achieve its objectives.
LISTNUM 1 \l 15303 So my commentary today about that is about the opportunity for all of us to look at the strengths that exist within the CTF, and the accomplishments that have been outlined by presenters so far, I think, have captured it well, the things that are working well.
LISTNUM 1 \l 15304 There are some areas for improvement, as there are in any work in progress, and those need attention, and they need support, and all of us working to find solutions that work best to help it become what it needs to be to serve the interests of Canadian viewers and of our broadcasting system.
LISTNUM 1 \l 15305 I would like to conclude my personal comments with an encouragement to the CTF, and a challenge to the rest of the industry to rally around and to celebrate the accomplishments to date, and to look forward to ways in which we can all be a partner and a contributor to its future success.
LISTNUM 1 \l 15306 With your permission, I would like to move to the presentation from Mr. Girard.
LISTNUM 1 \l 15307 Mr. Girard writes: "I am a solicitor who advises independent producers and others in the television and entertainment industry, and I have concerns with several of the proposals which are being advanced in the Canadian Television Fund Task Force Report.
LISTNUM 1 \l 15308 In particular, I am concerned that the report proposes a significant departure from broadcasting policy in Canada, which was established in the Broadcasting Act, and has carried through into the spirit and intent of the Canadian Television Fund.
LISTNUM 1 \l 15309 The broadcasting policy informs the mandate of the Canadian Television Fund and finds further expression in the spirit and intent of the guidelines. Several of the proposals made by the Canadian Television Fund Task Force Report appear to run counter to the broadcasting policy and the mandate of the Canadian Television Fund. In particular: (1) the accountability for the sources of CTF funding; (2) the proposal to split the CTF funding into two streams; and (3) the proposal to reduce Canadian content requirements to 8 out of 10 from 10 out of 10.
LISTNUM 1 \l 15310 In terms of accountability, some of the BDUs have created a crisis by withholding funds that were to be paid to the CTF. The BDUs are trying to reframe the debate about these funds and accountability for their disbursal.
LISTNUM 1 \l 15311 The BDUs want the argument to be about whether their funds are being used by the CTF inefficiently or ineffectively. They want to cause changes to the CTF so that they can gain control over these funds and direct them to enterprises with which they are affiliated, either directly or indirectly, thereby keeping more of the pie.
LISTNUM 1 \l 15312 This argument comes from a false premise. The funds received by the CTF from BDUs are funds paid by BDU subscribers, arising out of a prior levy. These funds do not belong to the BDUs, and their withholding of funds show a disregard for the CTF and the principles of the Broadcasting Act. This is highly inappropriate, and I would suggest to the Commission that they might consider an even greater percentage of the subscriber levy going to promote the CTF and the objectives of the Broadcasting Act.
LISTNUM 1 \l 15313 As for the proposal to split the funding of the CTF into two separate streams, I believe this would, firstly, adversely affect the independent production sector; secondly, reduce the variety of Canadian productions; thirdly, curtail the diversity of Canadian productions; and, finally, limit the creativity of producers by the focus on audience success.
LISTNUM 1 \l 15314 The premise underlying the separate fund is that, by a greater focus on successful programming, CTF funds will be better directed and administered. This premise does not seem to have a reasonable foundation.
LISTNUM 1 \l 15315 Currently, broadcasters are the only ones that can trigger CTF funding. Presumably these broadcasters are using their best efforts to identify programs that will be successful commercially. Indeed, that is a primary goal. There is no evidence to suggest that, by splitting the fund into two different streams, anything will be done to improve the ability of these same broadcasters to identify programs that will achieve higher audience rates.
LISTNUM 1 \l 15316 Neither is there any suggestion that BDUs are in a position to identify a hit show any better than broadcasters.
LISTNUM 1 \l 15317 Audience success factors are already a very significant factor in the allocation of the CTF envelope. The audience success of a broadcaster's CTF or "CTF‑able" programs accounts for 30 percent of the envelope allocation. Two streams would undoubtedly create more administrative burden for the CTF.
LISTNUM 1 \l 15318 As for the proposal to reduce CAVCO requirements to 8 out of 10, this does not appear to be supported by any rationale. This also runs contrary to the broadcasting policy of making maximum use and, in no case, less than predominant use of Canadian creative and other resources in the creation and presentation of programming.
LISTNUM 1 \l 15319 There is no evidence to support that a reduction of the Canadian content requirements will make programming more successful. In fact, those in the Canadian creative community might consider this an insult, and there is no basis for such a fundamental change in the absence of substantial supporting evidence.
LISTNUM 1 \l 15320 Canadian shows are achieving success here at home and abroad under the current content rules, and the CTF should not move away from the current CAVCO requirements, in my view.
LISTNUM 1 \l 15321 In conclusion, while there are improvements to be made at the CTF, the three issues I have noted here do not advance their effectiveness, nor do they advance broadcast policy.
LISTNUM 1 \l 15322 On behalf of Mr. Girard, thank you very much for the opportunity to present these thoughts.
LISTNUM 1 \l 15323 THE SECRETARY: Thank you.
LISTNUM 1 \l 15324 Now we will hear the presentation of Mr. Aaron Goldman.
LISTNUM 1 \l 15325 You have 15 minutes. Thank you.
PRESENTATION / PRÉSENTATION
LISTNUM 1 \l 15326 MR. GOLDMAN: Madam Chair, Commissioners and members of Staff, the Canadian Television Fund plays a vital role in facilitating the licensing of Canadian priority programming by CRTC licensed broadcasters. The broadcaster performance envelope system, designed in part to help make the CTF more predictable and efficient for broadcasters and producers alike, is meant to reward broadcasters who invest in priority programming for a number of factors, including historical investments in priority programming, above‑average licence fees for such programming, and audience success.
LISTNUM 1 \l 15327 Audience success is obviously an important factor for any program. Broadcasters and producers alike both benefit when the shows they cooperate in producing are successful. Both suffer when their shows do not succeed.
LISTNUM 1 \l 15328 As in a free market economy, it may be best to entrust broadcasters and producers alike with ensuring that the programs they produce are designed to attract audiences, since such success is in the best interests of both broadcasters and producers.
LISTNUM 1 \l 15329 I am concerned that having access to CTF funding hinges so heavily on this success. It seems a bit like a lottery, since television audiences can be very fickle.
LISTNUM 1 \l 15330 It may actually be detrimental to the development of solid, quality, priority programming to make the funding of such programming heavily dependent on its audience success factor, when broadcaster and producer behaviour are already naturally driven by audience success.
LISTNUM 1 \l 15331 The audience success factor also naturally leans heavily in favour of larger, more entrenched broadcasters, who are able to spend larger budgets on programs that attract large audiences. As we understand the formula for the audience success factor, it also lends itself to broadcasters airing shows repeatedly in order to deliver higher total viewer numbers to the CTF for the purposes of increasing the audience success factor. This seems counterintuitive.
LISTNUM 1 \l 15332 Another question to consider is whether it is fair to limit the rewards for audience success to broadcasters of CTF funded programs that achieve such success, rather than allocating some form of bonus for audience success to the producers of such programs.
LISTNUM 1 \l 15333 While the formula used by the CTF to determine a broadcaster's performance envelope is not yet transparent to me, one thing seemed very clear: the current system for determining broadcaster performance envelopes represents an incredibly steep, systemic barrier to accessing CTF moneys for small broadcasters and new entrants alike.
LISTNUM 1 \l 15334 Currently, the CTF advises that a broadcaster must spend a minimum of $2 million per year on priority programming in order to be eligible for an envelope. Presumably this is true whether a broadcaster makes all of their priority programming spend on one production or a plethora of small shows, with the intent of presenting a wide variety and high volume of Canadian content to its viewers.
LISTNUM 1 \l 15335 Also, in initial operations for a new broadcaster, even where a broadcaster is producing a very high volume of Canadian content and has the majority of its prime time devoted to priority programming, new entrants are not eligible for CTF funding.
LISTNUM 1 \l 15336 I suggest that the following approach be used to allow new entrants and existing broadcasters, who do not currently access the CTF, immediate and equitable access to the CTF, based on their initial commitments to priority programming.
LISTNUM 1 \l 15337 First, I suggest that the minimum spend that a broadcaster must make to be eligible for a broadcaster performance envelope be lowered to either $2 million or a minimum licence of $20,000 per broadcast hour, with a maximum spend for this new entrant or re‑entrant formula to be capped at $10 million in the broadcaster's first year of eligibility for the CTF.
LISTNUM 1 \l 15338 Second, I would suggest that new entrants be given an historical factor equivalent to the dollar amount of priority programming they commit to licensing in their first year of operations in each of the priority programming categories.
LISTNUM 1 \l 15339 I would suggest that 75 percent of said commitment would have to be demonstrated through either licence fee contracts or moneys placed in trust that would default to the CTF if not allocated by the broadcaster by the CTF annual deadline for allocation of broadcasters' envelopes, unless otherwise agreed to, in writing, with the CTF.
LISTNUM 1 \l 15340 Finally, I would suggest that an additional factor be added to determine the initial eligibility for new entrants or re‑entrants to the CTF funding system ‑‑ the Canadian Content Factor, or CCF.
LISTNUM 1 \l 15341 The CCF would be a simple multiple of the percentage of priority programming in a broadcaster's projected schedule, multiplied by the percentage of priority programming in the broadcaster's prime time schedule.
LISTNUM 1 \l 15342 I would suggest that these rather simple eligibility factors for broadcasters who wish to begin to access the CTF comprise an excellent incentive for both existing broadcasters who do not access the CTF and new entrants to the Canadian broadcasting system to license and broadcast a high volume and a high quality of priority programming, just as the Canadian Television Fund is meant to do.
LISTNUM 1 \l 15343 Just as importantly, these measures provide a fair and level playing field to new entrants and existing broadcasters who do not currently access CTF moneys to gain immediate and fair access to CTF funds, rather than protecting the access of entrenched broadcasters to a fund that is not meant to be restricted to monopoly or big business interests.
LISTNUM 1 \l 15344 I respectfully request that the Commission seriously consider the implementation of these changes in the broadcaster performance envelope system.
LISTNUM 1 \l 15345 I would also ask that my colleague Ryan Sutherland's proposal that the CTF implement a dispute resolution policy to protect and safeguard CTF funded programs against the potential pitfalls existing in the current default policy of the CTF be given serious consideration. I feel this would be in the best interests of all stakeholders of the CTF and of the many crew, talent, and suppliers in our industry who rely on CTF funding to be stable for productions, even in the event of a dispute arising between a broadcaster and an independent production company.
LISTNUM 1 \l 15346 I thank the Commission for the opportunity to express these views, and I would welcome any questions you may have of me.
LISTNUM 1 \l 15347 THE CHAIRPERSON: Thank you, Mr. Layng, and welcome back, Mr. Goldman. I would ask Vice‑Chairman Arpin to lead the questioning.
LISTNUM 1 \l 15348 COMMISSIONER ARPIN: Thank you, gentlemen, for your presentations.
LISTNUM 1 \l 15349 I am feeling a bit compelled not to ask you any questions, Mr. Goldman, because I will be sitting next week when Yes TV will be appearing. You are both in that instance, so, unless my colleagues have questions to ask, I will have to refrain, and I should probably remove my ‑‑
‑‑‑ Laughter / Rires
LISTNUM 1 \l 15350 THE CHAIRPERSON: I think, then, we are going to excuse you, gentlemen.
LISTNUM 1 \l 15351 MR. LAYNG: Thanks very much.
LISTNUM 1 \l 15352 MR. GOLDMAN: Thank you very much.
LISTNUM 1 \l 15353 THE CHAIRPERSON: Please give Mr. Girard our condolences for the loss in his family.
LISTNUM 1 \l 15354 MR. LAYNG: We will do, thank you.
LISTNUM 1 \l 15355 THE CHAIRPERSON: Thank you.
LISTNUM 1 \l 15356 We are adjourned for the day. We will see you again tomorrow morning. Have a great evening.
‑‑‑ Whereupon the hearing adjourned at 1600, to resume
on Friday, February 8, 2008, at 0900 / L'audience
est adjournée à 1600, pour reprendre le vendredi
8 fevrier 2008 à 0900
REPORTERS
____________________ ____________________
Johanne Morin Sue Villeneuve
____________________ ____________________
Beverley Dillabough Jennifer Cheslock
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