ARCHIVED -  Transcript

This page has been archived on the Web

Information identified as archived is provided for reference, research or recordkeeping purposes. It is not subject to the Government of Canada Web Standards and has not been altered or updated since it was archived. Please contact us to request a format other than those available.

Providing Content in Canada's Official Languages

Please note that the Official Languages Act requires that government publications be available in both official languages.

In order to meet some of the requirements under this Act, the Commission's transcripts will therefore be bilingual as to their covers, the listing of CRTC members and staff attending the hearings, and the table of contents.

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.




















                      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








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



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.







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)









Rita Cugini                       Chairperson / Présidente

Michel Arpin                      Commissioner / Conseiller

Michel Morin                      Commissioner / Conseiller







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 -





                                                 PAGE / PARA




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.


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.


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.


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.


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:

" ensure that the secondary beneficiaries of CTF funding..."  (As read)

LISTNUM 1 \l 15029             COMMISSIONER ARPIN:  And you have dealt with prior beneficiaries before:

" 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.


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.