ARCHIVED -  Transcript of Proceeding

TRANSCRIPT OF PROCEEDINGS BEFORE

THE CANADIAN RADIO-TELEVISION AND

TELECOMMUNICATIONS COMMISSION

SUBJECT:

Licence Renewals for Private Conventional

Television Stations /

HELD AT:

Conference Centre

Outaouais Room

140 Promenade du Portage

Gatineau, Quebec

May 6, 2009

Transcripts

In order to meet the requirements of the Official Languages

Act, transcripts of proceedings before the Commission will be

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

and staff attending the public hearings, and the Table of

Contents.

However, the aforementioned publication is the recorded

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

either of the official languages, depending on the language

spoken by the participant at the public hearing.

Canadian Radio-television and

Telecommunications Commission

Transcript

Licence Renewals for Private Conventional

Television Stations /

BEFORE:

Konrad von Finckenstein   Chairperson

Michel Arpin   Commissioner

Len Katz   Commissioner

Peter Menzies   Commissioner

Rita Cugini   Commissioner

Candice Molnar   Commissioner

Louise Poirier   Commissioner

ALSO PRESENT:

Lynda Roy   Secretary

Stephen Millington   Legal Counsel

Valérie Dionne

Nanao Kachi   Hearing Manager

HELD AT:

Conference Centre

Outaouais Room

140 Promenade du Portage

Gatineau, Quebec

May 6, 2009

- iv -

TABLE OF CONTENTS

   PAGE / PARA

INTERVENTION BY:

Friends of Canadian Broadcasting   1388 / 7757

Canadian Association of Community TV Users and Stations   1430 / 7985

Documentary Organization of Canada   1457 / 8116

Association des producteurs de films et de télévision du Québec   1485 / 8255

New Canada Institute   1538 / 8518

Canadian Conference of the Arts   1554 / 8604

Canadian Association of Film Distributors and Exporters   1457 / 8116

   Gatineau, Quebec

--- Upon resuming on Wednesday, May 6, 2009 at 0901

7749   THE CHAIRPERSON: Good morning. Bonjour. Commençons, Madame la Secrétaire.

7750   THE SECRETARY: Good morning, everyone.

7751   For the record before we start, I would like to let you know that further to the announcement made at the end of the day on Monday, the working group on Compensation for Value of Signal Impact Analysis will meet on 23rd July 2009.

7752   The Commission will be contacting relevant industry representatives to participate in this working group but anyone interested in participating in this technical working group should contact Stephen Delaney, Director, Industry Analysis at (819) 997-4677 by June 1st, 2009.

7753   En réponse à la nouvelle annoncée à la fin de la journée lundi, le groupe de travail sur une analyse d'instance sur la compensation de la valeur de signaux se rencontrera le 23 juillet 2009.

7754   Le Conseil choisira les représentants de l'industrie dont il jugera la participation pertinente, mais toute personne intéressée à participer à ce groupe de travail technique pourra s'adresser à Stephen Delaney, directeur de l'Analyse de l'industrie au CRTC, au (819) 997-4677, d'ici le 1er juin 2009.

7755   And now, Mr. Chairman, I would invite Friends of Canadian Broadcasting to make its presentation. Appearing for the Friends of Canadian Broadcasting is Mr. Ian Morrison.

7756   Mr. Morrison, you have 15 minutes to make your presentation.

INTERVENTION

7757   MR. MORRISON: Mr. Chair and Members of the Commission, thanks for the opportunity to appear today.

7758   Friends of Canadian Broadcasting is an independent watchdog for Canadian programming in the English-language audiovisual system and we are supported by 100,000 Canadians.

7759   The conventional over-the-air television model acquiring U.S. network programming and wrapping them in Canadian ads, and subsidizing Canadian programming with the resulting profits, is failing. Canadian over-the-air broadcasters are competing to bid up the cost of U.S. programming at the very time that their audience is declining. And now they are also asserting that local news programming is no longer profitable.

7760   Advertisers follow audiences. Recently, the greatest shift that has taken place within the advertising pie has been towards web advertising, which has increased in Canada from $25 million in 1998 to $1.5 billion in 2008.

7761   As the Commission's data demonstrate, profits for private over-the-air television have been falling steadily to the point where by mid-2008, the entire industry delivered negligible profit.

7762   What might initially have been considered a cyclical downturn has now emerged as a major structural change threatening the viability of over-the-air television. This would be true even if our economy were not in recession.

7763   The message from the applicants is consistent: Audience is down, advertising is down, costs are up and the transition to digital is not affordable and Canadian programming obligations are unsustainable.

7764   While some have questioned the need for over-the-air delivery in the future, the Commission has a responsibility to consider the needs of three million Canadians who rely on over-the-air reception. Canadian Media Research Inc. has concluded that:

"...given the slowing trend in the past four to five years, it seems unlikely that the over-the-air segment will decline by much in the coming years".

7765   MR. MORRISON: In other words, OTA viewing by millions of Canadians will continue to be a feature of our audiovisual system well into the future.

7766   Cities with over-the-air viewing exceeding the Canadian average include Windsor at 27 percent, Saskatoon 15 percent, Montreal 14, Quebec and Sherbrooke 13. Even in cities with a lower proportion of over-the-air viewing, the number of viewers is substantial; for example, Toronto 477,000, Vancouver 138,000, Edmonton 113,000, and Ottawa 111,000.

7767   The CMRI also reports that even in households subscribing to a broadcast distribution undertaking service, not all television sets are hooked up to cable/satellite service. Over-the-air viewing accounted for 25 percent of TVO's audience in 2006, 16 percent for CBC English television, 14 percent for CTV and 8 percent for Global.

7768   With the advent of digital over-the-air conversion in 2011, many of these Canadians will have an incentive to become cable and satellite customers, although the CMRI study indicates that 26 percent of the over-the-air viewers cannot afford the BDU charges. Digital conversion may be expected to increase the power and profitability of the distributors at a time when the over-the-air providers are in crisis.

7769   As Friends has previously observed in submissions to your Commission, broadcast distribution undertakings are already acquiring rights to content for their video-on-demand offerings. This suggests that the over-the-air broadcasters could well cease to exist in future, were it not for their unique and proven ability to serve their local communities and to serve as the primary conduit for telling Canadian stories.

7770   Friends submits that the Commission's policies should recognize the vital contribution that Canadian over-the-air stations make to the cultural fabric of Canada. A successful outcome of this short-term renewal process would be to pave the way for sustainable, therefore profitable, over-the-air service. In our view, this can only be done by ensuring that over-the-air television has the financial capacity to produce Canadian local programming and to tell Canadian stories.

7771   Canadians rely on their local television stations for news about their communities, the kind of local coverage that specialty channels do not provide. You may recall that in April, 2008, Friends and several partners submitted to the Commission a POLLARA study on "Canadians' Views on De-regulating Cable and other TV Distributors" which reported the results of a survey of 1,200 cable and satellite subscribers. Page 32 demonstrates that Canadians consider local news their top priority. If you note the graphic that I distributed, 76 percent of Canadians say that it's very important, 20 percent say somewhat important, for a total of 96 percent.

7772   At the BDU and specialty public hearing, the Commission heard evidence from Nanos Research that:

"78% of respondents indicated that having local news was of high, or very high, value to them".

7773   MR. MORRISON: And CMRI's "TV Trends and Quality Survey: A Report on Canadians' Attitudes toward TV" offers corroborating data. You will notice in the graphic below it's the percentage being very interested in Anglophone television in the year 2007 and local news stands out far above any programming category.

7774   And local programming is most threatened in smaller and medium-sized communities, where there is often only one local source.

7775   Historically, the Bureau of Broadcast Measurement audience numbers have shown strong viewership to Canadian news programming. At the same time viewing to what is now considered priority programming has been more challenged. Yet, programs such as Corner Gas, when produced with substantial budgets, can yield competitive audience results.

7776   The maintenance of local programming and story telling on over-the-air television should be the Commission's top priority in this short-term licence renewal process. This will require an adjustment to its economic model. The Local Programming initiative -- Local Programming Improvement Fund, though a laudable initiative, is not on a scale suitable or sufficient to address this challenge in its present form.

7777   Canadians are willing to pay for local television. POLLARA found that a majority of Canadians would be willing to pay $3.00 more per month for cable/satellite services to protect and enhance Canadian programming.

7778   We suggest that it is now necessary for over-the-air to be resourced on a level playing field with specialty channels. Over-the-air television networks should have access to the second revenue stream of fee-for-carriage provided they promise to use at least a portion of the money to maintain and enhance local and drama programming.

7779   We propose that the networks commit to a three-way split among local or drama programming, digital conversion and bottom line until the completion of digital conversion in 2011 and thereafter, the split should be two-thirds to drama or local programming and one-third to the bottom line.

7780   The distributors should not be permitted to generate a very substantial profit from the sale of their cable products driven by over-the-air stations without being obliged to pay for the services that they are then re-selling.

7781   Friends recommends that BDUs should be permitted to pass along this charge to their subscribers only if their profit before income tax descends below 15 percent.

7782   We also propose that the CBC should abandon ads on television, except during professional sports coverage. This would inject new revenue into the competing private television business. In return for vacating ads on non-sports programs CBC Television should be re-financed, either through a levy on cable and satellite distributors to be determined by your Commission, or through general government revenues, or by some combination of the two. This would transform CBC Television into a genuine public broadcaster. This new approach could be phased in over several years.

7783   A few comments on your specific questions:

7784   We would object to any which masked reducing local programming obligations under the label of "harmonization".

7785   Regarding the Local Programming Improvement Fund, in our March 30th submission Friends proposed a means whereby community members might decide on a majority basis to invest in sustaining local programming. Were this approach to receive favourable consideration by the Commission, the LPIF might match locally-generated funds.

7786   We support the principle that stations which benefit from the Fund should do so based on their historic commitment to local programming. We also see merit in funding the LPIF on a more substantial basis; for example, 5 percent of cable and satellite revenues, as some members of the Commons Heritage Committee have suggested.

7787   The priority programming commitments of large multi-station groups provide an appropriate minimum exposure for underserved Canadian programming categories, and should be maintained. One of the priority programming policy's principal advantages is the encouragement of diversity. Friends counsels against changing definitions of priority programming as part of this short-term hearing process. Such a fundamental change to broadcasting policy should be considered a year hence.

7788   We note that for the private over-the-air sector, Category 7 drama expenditures in the 2000 broadcasting year were $98 million, or 19 percent of Canadian programming expenditures and eight years later, drama spending totalled $109 million, or 17 percent of Canadian programming expenditures. Taking inflation into account, this spending has declined by 8 percent. However, in 2000 private OTA profit before income tax was $261 million, compared with only $8 million in 2008. That's a 97 percent decline. And those data precede the onset of the recession.

7789   Regarding the English-language Canadian Programming Expenditures, Friends considers that this proposal should be deferred to 2010 because, were it to be adopted, it could only be implemented prospectively owing to the typically multi-year contractual obligations between Canadian broadcasters and foreign rights holders on one side of the ratio, and on the other side, the current absence of free cash flow in the system.

7790   All U.S. network programming comes into Canada on one or another of the U.S. networks. If that program is not purchased by a Canadian broadcaster and is not simulcast, no benefit from Canadian viewership will accrue to the Canadian broadcasting system, even though that program attracts a Canadian audience.

7791   As Canadian program spending is substantially cross-subsidized by revenues from the sale of U.S. programming, the inability to purchase a show because a Canadian broadcaster had reached a regulatory threshold could have a negative impact on resources for Canadian programming for years to come.

7792   In the longer term, this proposal, therefore, should be screened for its vulnerability to the law of unintended consequences. For example, it may carry an inherent danger of achieving the unintended consequence of reducing overall spending on Canadian programming. It therefore merits careful scrutiny.

7793   However, such a rule might have the fruitful result of reducing the amount of U.S. programming acquired for the singular purpose of keeping it out of the hands of competing Canadian broadcasters.

7794   Also, all the station groups that might be affected by such a decision own specialty services, and often purchase subsequent runs of the same programs after the original network airings. The existence of a 1:1 ratio might lead to creative amortizations of the overall contractual value of the programming package in order to maintain the 1:1 ratio.

7795   We would also encourage the Commission to examine any issues that might arise that could be considered restraint of trade.

7796   Without a subscription component, over-the-air television's survival will continue to be completely dependent on advertising revenue, which, as the Commission is aware, is directly related to audience and supply/demand factors. Audience will drive revenue from both U.S. and Canadian programming, and aggregate revenue, not spending ratios, is what will determine the amount that is available for spending on Canadian programming.

7797   Friends submits that if the Commission wishes to impose regulation on program spending, then a more straightforward approach would be a formula based on percentage of revenue rather than a ratio of program spending.

7798   Regarding independent production, the Broadcasting Act requires that Canadian programming should include a "significant contribution" from the independent production sector, although the Act does not define "significant". Friends supports a strong independent production sector but we also recognize that no single sector deserves protection at historic levels when much more systemic flexibility may be required going forward.

7799   Friends suggests that the required contribution might be reduced to 60 percent, a level that is not only significant but also predominant.

7800   Regarding terms of trade, an issue largely between broadcasters and producers, we note that one of the most important changes to the American regulatory environment in the past 20 years has been allowing U.S. television networks to take an ownership position in the programming which they acquire. This has been cited as an important factor in the U.S. networks' survival at a time when over-the-air television in the United States is challenged by many of the same issues facing Canadian broadcasters. Accordingly, we encourage the Commission to examine the issue of ownership within the broader context of the terms of trade agreement.

7801   Merci de nous avoir écoutés attentivement, et bonne continuation de vos travaux importants.

7802   THE CHAIRPERSON: Thank you, Mr. Morrison.

7803   Explain to me your observation at the bottom of page 7 and top of page 8 where you say you oppose the harmonization of local programming obligations. I don't understand why the ownership of a station should determine the amount of local programming people in a given community get. It seems to me if you have, let's say, a community of $100,000 whether the station is owned by CTV, Canwest or CBC should make no difference. They should all have, as a minimum, local program obligations.

7804   MR. MORRISSON: Our concern is that the adoption of such a proposal would have a tendency to reduce program obligations. We are suggesting to you that what is desirable in the system is restructuring over-the-air television so that the providers have the resources to meet their obligations rather than reducing the obligations to meet the resources.

7805   THE CHAIRPERSON: Okay. You assume automatically that they reduce. There may be an increase too. They vary all over the place from as low as 4 percent in some places to as high as 34 in others.

7806   MR. MORRISSON: Yeah, for historic reasons.

7807   THE CHAIRPERSON: Yeah.

7808   MR. MORRISSON: It is our impression -- I would make an analogy. You have policies that suggest that over a broadcast year at least 6 percent -- 60 percent of all the programming is Canadian. It is the function of a whole lot of people in the private television system to make sure that they never come in at 60.1 or above that. Our concern here is that this would become a downward drawing factor rather than an upward drawing factor, Mr. Chair.

7809   THE CHAIRPERSON: And on page 10 you say you don't like a ratio, you don't like expenditure caps, but you want to have a formula based on percentage of revenue. I don't understand how you do that because at the time that you purchase programs you don't know what the revenue is that you are going to gain from them.

7810   MR. MORRISSON: You could do it on a floating average over a number of years. The intent of our comments is to introduce a note of caution regarding the 1:1 ratio and suggesting that if you are looking for a way to try to control foreign spending and to increase Canadian spending on underused categories in television, that a spending ratio would be more effective than the 1:1 ratio.

7811   THE CHAIRPERSON: You don't say spending ratio. You say revenue ratio. You say it's a percentage of revenue. If you mean spending that I understand, but you say revenue.

7812   MR. MORRISSON: Then it's an error. Excuse me.

7813   THE CHAIRPERSON: Okay.

7814   MR. MORRISSON: You have caught me.

7815   THE CHAIRPERSON: Then I understand. If you say spending I understand, it's just the revenue I couldn't --

7816   MR. MORRISSON: Welcome to our team, sir.

7817   LE PRÉSIDENT : Michel, tu as des questions?

7818   COMMISSIONER ARPIN: Thank you, Mr. Chair.

7819   Good morning, Mr. Morrison.

7820   I note that in your oral presentation you made some slight changes to your written submission. As an example, regarding the last section in your oral presentation on terms of trade where you deal with the ownership of programming you made the analogy between the U.S. broadcasters that now either own a studio or belong to a studio and you are saying that the Commission should maybe, as a solution to the problems of rights, contemplate Canadian broadcasters also being involved in studio ownership.

7821   Am I hearing you well when I am hearing you this morning compared to your written submission?

7822   MR. MORRISSON: Well, number one, it's clear that you are following closely, and for that I thank you.

7823   And number two, we are suggesting that you should explore.

7824   I think in this -- I would like to backup and say in this hearing I assume that you are setting the table for a larger consideration of big issues going forward next year. And in that spirit, we are offering some ideas that we think are worthy of consideration. It's in the sense of, you know, an essay in the French language sense of a trial, an incomplete attempt.

7825   COMMISSIONER ARPIN: So what you are -- well, I think I can do no more than agree with you. I think it's for a one-year period. Obviously, the Commission at this stage is only acquiring some further knowledge of what the issues are in order to see what will be the long term.

7826   It is an obvious situation where over the last five, six years or, generally speaking, the studios have acquired the networks. They had acquired ABC but NBC acquired Universal.

7827   Now, these studios are of a magnitude size that there are no comparable studios here or independent producer of a similar -- of a size similar to these ones compared with the Canadian broadcasters.

7828   MR. MORRISSON: That's true. The scale, of course, is different, as it is in most countries in the world vis-à-vis Hollywood.

7829   COMMISSIONER ARPIN: Yeah.

7830   MR. MORRISSON: But it was offered as an idea for consideration in the mix going forward, Mr. Vice-Chair.

7831   COMMISSIONER ARPIN: Now, I don't know, have you followed the hearing through the internet? Have you heard Bell Canada when they made their presentation?

7832   MR. MORRISSON: I have read reports.

7833   COMMISSIONER ARPIN: There was not that much reference to the freesat project that they had tabled. Are you knowledgeable about what they said regarding freesat and the carriage of --

7834   MR. MORRISSON: Yeah, I have made myself aware of that in a general sense.

7835   COMMISSIONER ARPIN: Could you share your views with us regarding this proposal, because obviously the proposal is making the assumption that in some markets there will not be over-the-air distribution of the signal and it will be a solution. And I know that you are, in your oral submission and in your written presentation, making the point that there will be viewers that will -- and quoting CMRI as a source that our Canadians were not contemplating ever going to get their signal through a BDU.

7836   MR. MORRISSON: Well, number one, I think that the word "freesat" may be a little bit of a misnomer not with respect to the "sat" but with regard to the "free" in that it appears that there is an assumption that profits generated from the sale of the VHF and UHF frequencies might be recycled to pay some of the installation of equipment costs that the broadcasters would have to pay for additional bandwidth and backhaul and things of that nature.

7837   The idea is an interesting idea. It was -- I congratulate them for bringing forward a positive contribution. I think it's going to require a great deal of discussion and we, in our initial review of it, we think that there may be some problems going forward as competing demands for the frequencies start to become more intense in future years.

7838   COMMISSIONER ARPIN: As you said, it's an idea that is worth exploring.

7839   MR. MORRISSON: Yes.

7840   COMMISSIONER ARPIN: So you are encouraging everybody to come with some views. If you had any further views you surely will -- you could provide them to us. It will help.

7841   MR. MORRISSON: Could I take that as an invitation to send you a note at the end of the hearing process?

7842   COMMISSIONER ARPIN: Yes.

7843   MR. MORRISSON: Okay.

7844   COMMISSIONER ARPIN: Thank you.

7845   In your written submission and, again, in your oral presentation you were saying that "CBC should abandon ads" on TV, "except during professional sports coverage". And then you had:

"This will inject new revenues into the competing private television business."

7846   COMMISSIONER ARPIN: We heard the broadcasters saying that outside sports there is not that much money, there is not much money of ads in the CBC. That's where the money is, in the sports and the rest CBC is selling at discount; the rest of its advertising. And these advertisers are more than likely -- will be more than likely going towards the specialty services rather than to the over-the-air broadcasters, those who are in advertising in sports who are paying the full price of over-the-air television.

7847   MR. MORRISSON: And the full price ain't what it used to be.

7848   But, number one, your Commission is in a position to get itself very well informed about advertising issues and I would urge you to scrutinize that opinion. The private broadcasters have an interest on a range from high to low of low-balling the benefit of that.

7849   It deserves study. If we could afford it we would commission that study ourselves. There would be facts or at least ranges of data that would be available. It is definitely true.

7850   I have been spending a bit of time investigating Canadian broadcasting corporation audience and advertising revenues in an attempt to address the question of how all of a sudden they could have $171 million shortfall. And I have found strange anomalies like they will broadcast a program called Jeopardy and get almost a million people as an average audience but the advertisers ask them, "And how many of those people are between 18 and 49 years of age?" and the answer comes back, "Well, only 25 percent of the audience" and it's that audience that the advertisers are prepared to pay for. It is issues like that that you are addressing.

7851   But in the larger picture I agree with you completely. It needs to be costed. The broadcaster's point of view needs to be evaluated. But I would point out that the pedigree of that argument is that it was made by the current prime minister in a speech to the Canadian Association of Broadcasters when he was leader of the opposition, and I and two colleagues, Peter Murdoch of the Communication, Energy, Paperworkers Union and Stephen Waddell of ACTRA, penned an op.ed piece in the National Post about this as a policy suggestion designed to toss into the mix in order to encourage people like yourselves to take a big picture look at the structure of the system and not to assume too many givens in the current conjuncture.

7852   In other words, can there be out of this crisis some type of opportunity to improve the system.

7853   COMMISSIONER ARPIN: Now, again in your written presentation you're saying that -- and it's at paragraph 31:

"We believe the CBC English-language television should become and will have to become more distinctive." (As read)

7854   COMMISSIONER ARPIN: My question is, currently one of the problem of the CBC, obviously, is that they have to be all things for all people, so they consider and I know that we're not renewing the CBC here, but it has an impact on their ability to compete with the broadcasters but also to vacate some areas that will benefit the private broadcasters to be much more present in the genre.

7855   Are the genre of programming in your views and the views of the Friends of Canadian Broadcasting, that CBC shall be contemplating moving out?

7856   MR. MORRISON: Well, number one, we do not feel that the public broadcasters should be restricted to programming that no one else will do. That would be out of keeping with the model of public broadcasting in the vast majority of western democracies.

7857   Number two, I'm not sure in practice -- and I'll confine comments to the English-television network of the CBC, is that okay?

7858   COMMISSIONER ARPIN: Yes.

7859   MR. MORRISON: I mean, I don't pretend to refer to the service de télévision de la Société Radio-Canada here and, of course, we're not talking about other aspects of the CBC like radio.

7860   But with respect to the English-television network, maybe in theory they're trying to be all things to all people. I don't see that on the screen, I don't see a lot of programming that, for example, appeals to people under the age of 12 or 13.

7861   I see a system that is driven by advertising considerations where 48 percent of the audience in prime time is watching professional sports programming and I see a reduction for competitive reasons from their sports obligation where CTV has taken the Grey Cup, the Olympic Games, curling away from them. They are left with Hockey Night in Canada.

7862   And, in a strange way, I think one of their problems today may be that they've overpaid for Hockey Night in Canada because they believed that it also might be snatched away by CTV, but CTV didn't have the capacity to snatch it away because of your priority programming policy whereby they would have had to drop three simulcasts during the week in order to meet their obligations if they ran a Saturday night hockey system.

7863   So, it's a complicated system and you can be sure that if you grant us the opportunity we will be here when you are considering the network renewal licences of the Canadian Broadcasting Corporation.

7864   COMMISSIONER ARPIN: I was expecting that.

7865   MR. MORRISON: Okay.

7866   COMMISSIONER ARPIN: Now, regarding the Local Programming Improvement Fund, I note that there is a slight distinction between your written and your oral presentation. In fact, in your written presentation you're dealing with the need to keep the money incremental, as the Commission had suggested last August.

7867   Now, in your oral presentation this morning you seem to go the same direction that the Commission has been suggesting lately, that...

7868   Now, dealing with the fee for carriage, you're saying it will be split three ways and local programming, drama and then the bottom line, with the local --

7869   MR. MORRISON: Just for clarification, sir, it may be that I misspoke, but local programming and drama we suggested would be -- they would commit to at least one third of any fee for carriage for that.

7870   COMMISSIONER ARPIN: Yes.

7871   MR. MORRISON: And one third would be towards the cost of digital.

7872   COMMISSIONER ARPIN: Yes.

7873   MR. MORRISON: And one third the bottom line.

7874   COMMISSIONER ARPIN: No, no. And it is your oral presentation, the top paragraph of page 7 is very clear for that, there's no problem.

7875   Now, that means fee for carriage will -- now, we have introduced the Local --

7876   MR. MORRISON: M'hmm.

7877   COMMISSIONER ARPIN: -- Programming Improvement Fund which also goes towards local programming. Are you saying that if the Commission was ever to go towards a fee for carriage we shall be dropping the Local Programming Improvement Fund?

7878   It's one or the other?

7879   MR. MORRISON: Or both. I mean, the goal -- we have to keep our eye on -- by we, I'm presuming to say you and I -- we have to keep our eye on the big picture which is the survival of the over-the-air television industry because of its vital and unique contribution in the broadcasting system and it has good and pressing arguments for additional resources in order to do that.

7880   So, a buck is a buck, and so some combination of these things. I mean, we've actually suggested a third idea in paragraph 28 of our written submission which might address in a smaller specific case the situations in very small communities.

7881   How ultimately the mix and match of these things takes place is something that you will determine and I guess, to some extent, the Government of Canada with its policy direction capacity will have an interest in this.

7882   We're following closely the flow of discussion on this topic at the Commons Heritage Committee and I'm aware of, you know, the mini-controversy about what the private networks said and did not say when they were at this table 13 months ago.

7883   So, we're keeping our eye on the ball. The ball is getting the resources so that the services that are vital to Canadians, particularly in small and medium sized communities -- we like your definition, by the way, excluding the top eight markets, very constructive definition -- that that is what should happen.

7884   How the money gets there, we're less concerned with that means than the result.

7885   COMMISSIONER ARPIN: But obviously you are supporting the Commission that the money goes to programming and only to programming, because there have been suggestions at the early stage that the money could be spread not only to local programming but also to support the transmission, the (9:298:25) digital transmission, but the general production.

7886   MR. MORRISON: Yeah. I think a more -- number one, we have since October 30th supported the Commission and the question is, the situation has evolved since October 30th; hasn't it?

7887   I mean, this is a topic you might not wish to discuss, but I'm aware through various intelligence sources that this is a topic that has been discussed thoroughly inside the government caucus in Ottawa. This is a very important issue.

7888   It turns out that government Members of Parliament tend disproportionately to represent constituencies where this is a priority issue.

7889   So, this has become something of a hot potato and it seems to me that a more constructive discussion than the one that you mentioned, those two alternatives, and one where I think we might have common ground is between incremental expenditures and just maintenance of expenditures in communities where the bottom has fallen out of the market and where it can be demonstrated that the local advertising base is completely insufficient to cover the programming, the local programming, coming back to the question of the Chair about harmonization earlier.

7890   COMMISSIONER ARPIN: Thank you very much, Mr. Morrison.

7891   THE CHAIRPERSON: Len?

7892   COMMISSIONER KATZ: Good morning, Mr. Morrison.

7893   I've got two questions, one's a clarification. On page 7 of your submission this morning you indicate that:

"BDUs should be permitted to pass along this charge to their..." customers, "...only if their profit before income tax...descends below 15 percent." (As read)

7894   COMMISSIONER KATZ: And you put in brackets, (PBIT). That acronym is profit before interest and taxes in CRTC parlance.

7895   Are you suggesting that we go with your proposal if we do go this way and ignore interest charges in looking at whether parties can or cannot pass on certain costs?

7896   MR. MORRISON: Would you excuse the -- that's really just a typo because I'm staring at your five-year summary for the Class 1 and 2 and 3 systems right here and the profitability indicators at the bottom. You've got operating margins, you've got the PBIT, you've got the pre-tax margin here.

7897   And if you found it more useful to use another indicator, I guess we would just adjust the 15 percent figure.

7898   We're looking at the PBIT margin of -- is it 25.3 in the most recent year, 21.2 in the preceding. I'm sure you're intimately familiar with the data.

7899   If we were to look at the pre-tax margin of 9.9 percent or 13, seems to be an average of 10 or 12 over the past period, you might pick a reasonable figure.

7900   If that 9.9 percent were to drop below, say, five percent or something of that nature, then they might be allowed to pass on the charges to the subscribers.

7901   COMMISSIONER KATZ: Okay, thank you.

7902   MR. MORRISON: But they're in a pretty healthy situation I think, if I risk an under statement here.

7903   COMMISSIONER KATZ: Okay. My second question is, is two studies that you cite in your submission this morning. On page 6 you said a Pollara Study that was done, I guess, that says:

"Canadians are willing to pay for local television." (As read)

7904   MR. MORRISON: M'hmm.

7905   COMMISSIONER KATZ: And the question is, the majority of Canadians will be willing to pay $3 or more for cable/satellite services, and 55 percent roughly speaking say yes.

7906   And then on page 3 you cite a study from CMRI, a study that indicates:

"...26 percent of OTA viewers cannot afford the current BDU charges." (As read)

7907   COMMISSIONER KATZ: How do you rationalize those two studies that basically say, one, people can't afford to pay any more and the other is, people are prepared to pay more?

7908   MR. MORRISON: Well, compared with the number of the tough questions I received this morning, I would say that one is fairly easy for me.

7909   The Pollara Study which was tabled with you as part of the BDU specialty process is in your records, it was tabled at the end because there was a procedural question.

7910   The Pollara Study is a universe of 1,200 Canadians chosen representatively to be all of the current existing cable and satellite subscribers, not Canadians, but cable/satellite subscribers. In other words, the eighty something -- in 89 whatever it is percent of Canadians, 90 percent of Canadians.

7911   So, that group is generating the data for the Pollara result which shows that a majority would be willing to pay more.

7912   There are by the way much more data in the Pollara survey on the willingness to pay, I just picked one as an illustration.

7913   COMMISSIONER KATZ: So --

7914   MR. MORRISON: The second study, the CMRI, which is Canadian Media Research Inc., the principal of that is Barry Kiefl, and the data that -- I think his client here was the Department of Canadian Heritage, but we obtained access to the data for the purposes of our presentation, and that is a survey of Canadians who receive their television services over the air, bunny ears, roof-top antennas, et cetera, and it is something like -- it's zeroing in on the rest of the population.

7915   So, Pollara is in simple terms dealing with the 90 percent who are now subscribers and CMRI is studying the 10 percent who are not, the three-million Canadians and, of them, a quarter said that they just could not afford to subscribe to either cable or satellite.

7916   That's the results of the data from, I think it was a 1,500, you know, random sample chosen professionally and it meets professional standards.

7917   Does that make sense?

7918   COMMISSIONER KATZ: Yes. So, the 54 percent that are willing to pay more is 54 percent of a universe of 90 percent?

7919   MR. MORRISON: M'hmm.

7920   COMMISSIONER KATZ: Which is roughly -- whatever that works out to be.

7921   MR. MORRISON: Yeah.

7922   COMMISSIONER KATZ: Okay, thank you.

7923   MR. MORRISON: And there is a principle in this country called majority rule, you know, yeah.

7924   COMMISSIONER KATZ: Okay. Thank you.

7925   THE CHAIRPERSON: Peter?

7926   COMMISSIONER MENZIES: Yes, thank you.

7927   I have a couple of questions.

7928   Just to give me some context, and we all know that there's many, many fine broadcasters in the country, but when we talk in broad terms about, you know, the contributions made to the cultural fabric and that sort of stuff, surely there are some operations out there that are in a situation where they're not making an enormous contribution in terms of their local reflection and their local news and that sort of thing.

7929   I mean, we've heard instances this week and last week about some stations that do, you know, four or five minutes a day of local news, local broadcasting, and some don't do any, but they provide a community notice board.

7930   And I've got to tell you, I have a real problem with figuring out why people should have to pay additional money on their cable funds to support stations that aren't making a contribution like that, particularly when maybe there's too much clutter in the marketplace and it's actually harming the good operators that their audiences are getting hived off.

7931   Because a station that, you know, for the most part is doing, I don't know, "Simpsons", all the -- "Law and Order", I just don't get it, you know, what unique cultural contribution that's making to Canada.

7932   MR. MORRISON: Well, I'll answer at two levels. I mean, I'm tempted to say an analogy is that some people, you know, cross on red lights and I don't think we should make policy based on the people who cross on red lights.

7933   But on a more substantive basis, I'm sure there are laggers, I'm sure there are examples like the ones you have cited. They are a small minority.

7934   And, you know, if you are living in a city like Barrie, Ontario where your television transmitter for CKVR, the only station that provides any local coverage there, reaches places like Collingwood, Orillia, Owen Sound, perhaps a quarter of a million people in south central Ontario, you are the only source of news about that 250,000 people.

7935   And if you're in Barrie, you're not comparing it to what, you know, happens in Vancouver, you're comparing it to nothing.

7936   And, so, I think you should -- I mean, I think the analogy, and that maybe a better analogy than my crossing on the red light, is the issue, you know, that this glass is two-thirds empty, the one-third full is what it is right now and I think you should be trying to preserve what is there and not to get off on some issue that it's not worth preserving.

7937   COMMISSIONER MENZIES: So, we shouldn't --

7938   MR. MORRISON: Remember -- remember, I just draw your attention to the data. I think we've cited three objective professional sources there.

7939   Nanos Research, CMRI, Pollara. Canadian's when asked, what is the most important thing they get on their television set, they say local news.

7940   And I guess if it's even four minutes a day, your job, Commissioner Menzies, is to try to get that to five, six, seven, 10, you know. We should be trying to build it. It is so important for the local economy, for the local society, for a sense of community for people to learn about their own community in their audio/visual system.

7941   COMMISSIONER MENZIES: Okay. Another question. When we talk about the LPIF and things like fee for carriage and that sort of stuff, we only talk about the BDUs as a source of funds.

7942   It seems to me that if we look back, at least let's take it pre-recession because there's a lot of different factors in the recession such as auto advertising and that sort of stuff, that, yes, the addition of a lot of U.S. specialty channels and distant signals and that sort of stuff has fragmented market for the OTAs.

7943   But one of the other players that has fragmented market for the OTAs is the Canadian specialty networks.

7944   Given that -- and they are the ones who are directly -- not stealing, but winning the advertising dollars from the OTAs; right, why shouldn't the specialty channels be making a contri -- if we're going to have to have a system that props up the OTAs in some fashion, why would we ask the BDUs only to carry that burden; why wouldn't we ask the specialty channels as well to carry the burden of the OTAs because the specialties have played a very strong role in fragmenting the audiences? And mean much to people's pleasure, they enjoy watching them and so the advertisers get good responses, there's nothing wrong with that, but if -- I don't understand why the distributor only would have to carry the burden and why the competitors wouldn't have to share that burden.

7945   MR. MORRISON: And, as you know, to make your argument before going at it, there are a good majority and certainly the vast majority financially of the specialties are structurally connected to the OTA broadcasters; right.

7946   COMMISSIONER MENZIES: But they say we have to treat things separately.

7947   MR. MORRISON: I remember former Vice-Chair of this Commission at the time when the Aboriginal Peoples Television Network was first licensed and she asked the head of the -- there was then a Canadian Cable Television Association and she asked, well, that the head dodge the hearing but the vice-president who came, she said, by the way, I understand I have to pay 78-cents a month for something that was then known as CTV's Sportsnet. Did anybody ever ask me if I wanted CTV Sportsnet?

7948   And she made the cable guy squirm a little bit.

7949   There is an issue about, is the $1.07 that goes to TSN every month from most subscribers, or the equivalent for the Réseau des Sports, is it sacrosanct, is it something that should see its way through to the 22nd century?

7950   If you're asking that question, I think you have a point conceptually. However, the specialty services are attracting Canadian audiences because they are delivering programs that Canadians want to see and the specialty services are enjoying the flow through that comes through the regulations of your Commission that require funds to come to them from two channels.

7951   The distributors are first in line here. I can't think of too many monopolies. I understand there's an argument about the extent to which there are monopolies.

7952   It's certainly, where I live on the 40th floor of a building in a city called Toronto, it's a monopoly and because my cable -- my condo company won't allow me to stick a satellite dish on my balcony, okay, and there's a lot of Canadians like that.

7953   These people are making very substantial profits in a rate unregulated environment. I can't think of any other monopoly I deal with which is so free from regulation in its rates and it's time -- at a time of crisis for the most important element in the Canadian broadcasting system in television, which is local news being threatened, it's time to ensure a redistribution of resources.

7954   You have the authority under the Broadcasting Act to ensure that that happens. The only issue is whether you have the will to make it happen.

7955   I wouldn't -- I see the specialties contributing to this as a bit of a straw man. The issue is, is the cable people.

7956   By the way, the satellite companies --

7957   COMMISSIONER MENZIES: Well, I'm just --

7958   MR. MORRISON: -- are in a different situation.

7959   COMMISSIONER MENZIES: Yes. But, I mean, I take your point regarding monopolies and that sort of thing, but it does seem to me if there's a revenue shift from one sector to the other that the revenue that's been shifting has been going from OTA to specialty.

7960   And one would think that they would -- it's not unreasonable to think that the revenue that's shifting away, if you're going to prop something up, they're coming back.

7961   But if we get into these subsidies in a long and ongoing way, surely looking into the future there's got to be a time when the era of OTA is going to pass. Maybe it's a hundred years, maybe it's 50 years, maybe it's 10, I don't know.

7962   Let me, just to play devil's advocate, put this to you. Aren't we just subsidizing buggy whips in that sense, something that's time is passing and that Canadians are going to be stuck with this subsidy for a small sector for a long time?

7963   MR. MORRISON: Well, you can play with metaphors a lot. I don't understand quite what the automobile is that is replacing that particular buggy whip, but I keep --

7964   COMMISSIONER MENZIES: Well, specialty channels.

7965   MR. MORRISON: Specialty channels --

7966   COMMISSIONER MENZIES: Video-on-demand.

7967   MR. MORRISON: Mr. Menzies, specialty channels are not capable of addressing that priority of the people of Barrie around news about their community.

7968   And, so -- and I would urge you to -- and to keep things brief -- I would urge you to keep your eye on the next 10 years and if you found that to be too big a task, focus on the next five. Let the other 90 be a priority concern a few years from now.

7969   COMMISSIONER MENZIES: Okay. We're just working on the information the networks are giving us about the future of OTA.

7970   Thanks very much.

7971   MR. MORRISON: Okay.

7972   MR. MORRISON: Okay. Those are our questions.

7973   Thank you very much, Mr. Morrison.

7974   MR. MORRISON: Thank you.

7975   THE CHAIRPERSON: Madame Roy, qui est notre prochain intervenant?

7976   THE SECRETARY: Merci, monsieur le président. Je crois que madame Dionne a quelque chose à ajouter avant.

7977   MME DIONNE: Merci.

7978   I have one undertaking. I just want to confirm that you will file your views on the Bell free set proposal before or on May 13th, which is the deadline for final written submissions on policy issues.

7979   Thank you.

7980   MR. MORRISON: You bet.

7981   THE SECRETARY: Thank you, Ms Dionne.

7982   I would now invite to the presentation table the Canadian Association of Community TV Users and Stations.

--- Pause

7983   THE SECRETARY: So, appearing for the Canadian Association of Community TV Users and Stations is Ms Catherine Edwards.

7984   Ms Edwards, you have 15 minutes to make your presentation.

INTERVENTION

7985   MS EDWARDS: I'd like to say good morning and thank you very much for the opportunity to appear today.

7986   The Canadian Association for Community Television Users and Stations, CACTUS for short, is building a bilingual national membership of independent community television channels, cable co-op community television channels such as we find on the Prairies, and some typically smaller private cable companies that still practise community access television and the public who uses and watches them.

7987   So, it's an association that backs the idea that community TV should provide access to the public to produce programming.

7988   CACTUS wishes to comment this morning just on the local programming initiative fund and to make a few observations regarding the proposed allocation formula based on averages of prior year spending.

7989   CACTUS agrees with the descenting opinion of Commissioner Morin from the fall that the LPIF seems to have been somewhat hastily conceived as an apparently simple solution of throwing money at what is a complex problem, the shortage of local news and local programming country wide.

7990   CACTUS also agrees with Commissioner Morin that the suggestion that CAB administer such a fund would seem to represent a conflict of interest and, therefore, we welcome CAB's own submission to this hearing that a third party should administer this fund.

7991   We would, however, request that there be representation on the board of that fund by the independent community production sector as well as the private broadcaster sector and the cable industry and the CBC as CAB has put forward.

7992   Successive media mergers among the conventional private broadcasters have been permitted in recent years by the CRTC with the rationale that bigger, stronger organizations would be more able to deliver expensive categories of programming such as local news and drama.

7993   The figures have shown that this is not the case. The amount of local news and drama has steadily decreased despite the mergers and it's perhaps unsurprising that what have become regional and national organizations should be uninterested in local news, nor are the best parties to provide it.

7994   CACTUS feels that it is inappropriate to reward this poor performance which have been conditions of licence with new public monies.

7995   Simultaneously, BDUs have been shown to have more financial slack even in times like the current crisis, and we feel it's appropriate to look to them as a source of additional funding for culturally important yet expensive programming genres.

7996   However, it's the opinion of CACTUS that the one percent, or $60 million proposed is not enough to make a difference in the production of professional local news across the country.

7997   We know from our experience with the community tier, for example, that the $80 million currently being spent on community programming across the country, according to the Lincoln Report is just barely adequate, even though the community tier employs a volunteer model that multiplies the volume of programs produced through the use of volunteer labour by a factor of five or 10, depending on the efficiency of the channel.

7998   Therefore, using a professional model of production for local news, CACTUS feels $60 million is just not going to make much difference countrywide.

7999   We would also question the logic that it will stimulate the most or best additional local programming to simply match average expenditures. For example, it is common knowledge that the CBC tends to spend more producing the same genres of programming than private broadcasters. Should it be rewarded therefore for its relative inefficiency of is it assumed that CBC productions that expend more achieve a higher quality?

8000   Perhaps money should be allocated to channels and organizations that have higher ratings for local programming, have won awards for such programming or for volumes of programming produced rather that the money expended upon them.

8001   And our final sort of observation before I make some suggestions is that the expectation that the private, public and community tiers in our broadcasting system should all be able to produce local programming in parallel is a unique expectation in North America and is specific to our very rich pre-media concentration history.

8002   Most countries, including Western-European countries enjoying a similar standard of living to Canada, do not have this expectation that three different tiers should be all able to produce local programming. They have tended to rely on community access programming, a hybrid community public model of local programming or sometimes, in some places, a community private model of local programming. If they have had a history of local programming at all, many countries such as the UK have no history of local programming.

8003   These factors lead CACTUS to suggest that more thinking and research needs to be done to solve the problem of providing adequate local programming to Canadian communities and, in particular, local news programming.

8004   In countries that have successfully solved the problem of local programming, the solutions are typically organic, not necessarily obvious and tend to arise from the communities themselves. They are rarely legislated from above and solved simply by throwing money at them, which over the long-haul tends not to be sustainable.

8005   CACTUS would therefore like to suggest that the LPIF be used to stimulate communities to find their own solutions through a matching expenditure formula.

8006   And the following are just a few ideas which I think, you know, over a longer process could be explored in more depth.

8007   Just a bit of a review. The community tier in Canada has historically been able to produce many times the volume of programming for the same budget as a private or public channel.

8008   So, for example, in a city the size of Calgary in the heyday of volunteer-driven television six to 10 paid employees might produce 35 to 40 hours of new programming per week with the help of a couple hundred volunteers. In smaller communities the ratios were similar, but scaled down. So, for example, one or two employees with the help of a few dozen volunteers might produce five or six hours of new programming per week.

8009   The programming produced included every conceivable genre over time, depending on the interest of volunteer producers. It wasn't uncommon to see in a single programming week mobile sports productions, kids' programs, interactive studio phone-in talk shows, seniors' shows, entertainment music programs, even drama with the help of local film and video-making cooperatives.

8010   However, few community channels in the world produce dense, high-impact, daily news. Many anchor their programming weeks with a news magazine program, however, with slightly longer segments and a typically professionally produced news program about community affairs and personalities rather than ambulance chasing.

8011   Volunteers produce what they want to produce on their own schedules. Many will over the course of a week or month be interested in producing community news segments, but delivery tends to be haphazard and most would rather produce a more in-depth segment of a topic of interest to them than a typical news hit. So if you are going to go to the trouble of borrowing a camera and spending an afternoon shooting something, most volunteers would rather produce more in-depth coverage.

8012   The result is that many such channels, often with very loyal local audiences, will produce a news wheel that repeats over the programming week that is updated with new material as it becomes available, often played at the top of the program so that regular viewers can quickly see what is new without watching the whole wheel.

8013   So this is the natural pattern of volunteer local production when guided by staff and with adequate training and facilities and it is achievable in Canada. It was common prior to 1997 when the community tier was deregulated and it is still common where community access channels are adequately funded, such as in parts of Quebec and at cable cooperatives on the Prairies, such as Access Communications and Westman Cable in Manitoba.

8014   This pattern could be successfully augmented to produce more specifically news-type content with the collaboration of two other important community organizations, and this is where I talk about stimulating community infrastructure that already exists from the LPIF. So first, media training organizations.

8015   Although you can't order volunteers to produce according to a news editorial board's direction and schedule, it is more feasible to achieve regular production commitments from students.

8016   THE SECRETARY: Ms Edwards, I am sorry to interrupt, could you please slow down just a little bit, it seems like the interpreters have a little bit of difficulty following you.

8017   MS EDWARDS: Okay, sure.

8018   THE SECRETARY: Thank you.

8019   MS EDWARDS: Close collaboration between community television channels and media arts training programs at high schools, colleges and universities could result in the addition of several more regular segments per day than could be relied upon by community volunteers on their own.

8020   So, for example, a university media department might be asked to produce news in regular categories such as political coverage or the weather. Volunteers could produce community news which reflects their particular interest at the time, typically things like arts and entertainment, local authors, businesses, personalities.

8021   As incentive, the LPIF could be used to match budgets provided by educational institutions for this news-like production. Many media training programs currently produce campus closed-circuit news already and would welcome the chance to reach larger audiences and produce for the town or city at large.

8022   The second big untapped resource in communities that exists already is municipalities. Although it is common for municipalities in other countries, and especially in the U.S., to produce programming for local audiences via a community channel, it has never been common in Canada, except for coverage of city council meetings and the odd dallier MP program.

8023   Despite the intention of the original community channel policy, there should be a feedback device between local government and residents. In the U.S. this is accomplished by giving some of the BDU levy for community programming directly to municipalities for the purposes of producing local content about the municipality and its programs and services.

8024   Some municipalities also contribute to the programming budget. In Canada, regular segments about municipal issues could be produced to contribute to the news wheel. As with university media training programs, perhaps municipalities could be funded from the LPIF to match their own contributions.

8025   Other forms of hybrid local channels could be explored and exist in other countries. For example, could CBC or private sector TV channels be kept open in smaller communities if they were willing to work with the assistance of volunteers?

8026   Volunteers in this setting would be more likely to be guided in producing local news as a format than they might be for a pure community access channel because of the prestige of working for a professional channel and the possibility of getting paying jobs at professional channels in larger centres.

8027   Professional channels in Fredericton and Thunder Bay currently use segments produced by universities and non-professionals. This model could be rewarded by training or equipment subsidies to such smaller channels from the LPIF.

8028   And finally, community channels in very small communities such as CHCT-TV in St. Andrews, it is a population of about 1,500, could contribute local news segments to regional, private or public sector channels and they could be paid per story from the LPIF. For example, St. Andrews might prepare a story that would then air on a Fredericton regional broadcast. If even one or two stories flowed from any small community channels per week to larger regional professional channels, regional daily news programs might be maintained.

8029   Monetary incentives might have a secondary but equally beneficial effect of stimulating more and higher quality segments from volunteers at the community channels.

8030   So these are just a few ideas. And while they may seem more complex to stimulate and get going in the first place than the relatively simple expenditure matching approach that has been proposed, it is the view of CACTUS that real-world solutions that are sustainable usually are.

8031   That is, more complex and have to be carefully thought through and planned ahead, and they need to come from the ground up. Infrastructure needs to be built within the communities themselves, rather than throwing more money at national companies that have shown little inclination to invest in those same communities in the past.

8032   Finally, CACTUS would like to observe that the paradigm of news as a daily half hour or hour of densely edited highlights tends to be a large market paradigm where audiences can't be assumed to personally know the subjects of the stories, they therefore seem to want to see only the highlights.

8033   It is CACTUS' experience, both in Canada and around the world, that the smaller the community the more there is an appetite for longer segments that go into more depth.

8034   Therefore, while it might be impossible for a few volunteers who can be drawn from the population base in small communities to produce a high-impact, dense daily news program with segments in multiple categories like sports, politics, weather, arts and entertainment, those volunteers are quite likely to produce full programs in those genres over the course of a week or month.

8035   For example, full coverage of a little league game, a studio chat program with a local MP that lasts half an hour or a documentary profiling a local business. Audiences in smaller communities will watch this kind of programming and, for them, more is better.

8036   So we would like the caution the Commission not to assume that one solution, the expectation that everybody wants news according to a big city paradigm, necessarily fits all communities. And to realize that the great strength of the community access model has always been that it can adapt to fit the needs and tastes of each community regardless of size, its history, its language or socioeconomic makeup.

8037   News should be a minimal expectation and the community sector can typically produce much more than that.

8038   CACTUS welcomes the chance to discuss this or other ideas with you.

8039   THE CHAIRPERSON: Thank you very much for a very interesting presentation.

8040   You are a bit ahead of your time. You should really come to our community TV hearing this fall.

8041   MS EDWARDS: Oh, you can be sure I will be there.

8042   THE CHAIRPERSON: I would like to hear your ideas and explore them in-depth.

8043   A couple of questions. On page 2 you are talking about matching funds really might reward the inefficient, in particular CBC. Canwest, when they came before us, suggested that rather than doing this, we should do it on the basis of population and, you know, just divide the whole market and then decide how much each TV station serves and do the apportionment along those lines.

8044   What do you think about that?

8045   MS EDWARDS: Are we talking private broadcasters or public or both?

8046   THE CHAIRPERSON: Both. I mean, you just use the audience, you know, as a way --

8047   MS EDWARDS: I mean, I guess I think the problem is one of infrastructure. So I would rather see organizations that have been particularly efficient or won awards for programming or shown a prior commitment to doing local programming on their own be rewarded, rather than it just be a handout based on population.

8048   You know, I think you need to stimulate based on prior interest and commitment expressed. I think it is the same reason that BDUs have tended to regionalize community production recently. The bigger and bigger companies get the less they are interested in communities and, therefore, the money would be better spent on community organizations from the bottom up.

8049   THE CHAIRPERSON: Your pages aren't numbered -- on your second-last page you are talking about partnerships. And you point out that in Fredericton and Thunder Bay certain segments of professional TV are produced by universities and non-professionals.

8050   Let's take Thunder Bay as an example, what actually happens there?

8051   MS EDWARDS: University students are taken out with professional news crews. Like, sometimes they fill roles of camera people, editors and so, you know, their free labour is bulking up and enhancing the ability of those professional channels to deliver news. The professionals still fill the hosting positions and the overall producing positions, but students are routinely used to help those crews.

8052   THE CHAIRPERSON: I see. I get the feeling from your overall submission that you are really concentrating on small communities and especially your tail end, where you point out how small communities want longer stories, they don't want news and sort of anonymous...

8053   Do community channels also have a hold in large centres?

8054   MS EDWARDS: Absolutely. I mean, until 1997 there used to be 12 community channels in Vancouver. It is a picture of cities that isn't the city as one huge conglomerate. It is the picture of a city as made up of multiple communities, so it could be applied at any level.

8055   And the bigger the city gets the more likely you are to be able to organize volunteers to produce something that looks more and more like big city news. You know, the bigger volunteer pool you have and a bit more resources, the more you can approach that model.

8056   THE CHAIRPERSON: Okay.

8057   Peter.

8058   COMMISSIONER MENZIES: Thank you, Ms Edwards. And I would like to add also that it is refreshing and enjoyable to see new ideas thrown on the table.

8059   In addition to those thoughts, I just have a couple of areas I want to get into, one of them is regarding the use of volunteers. Now, if this sector grows and some of your ideas are taken up, first of all, aren't there inevitable labour issues that you might run into in terms of mixing professionals with volunteers in terms of that or, like your suggestion, that in remote areas the CBC be backed up by volunteers?

8060   MS EDWARDS: Well, there would. I mean, it is issues that would have to be taken up with the unions. But I guess this is why I think to try to solve a complicated long-term problem -- like, this is not new, the problem with local programming -- that we need to be able to step back from our paradigms and think, you know, maybe the expectation that we should have three different completely separate tiers in Canada when we have a small population and a huge geography was a mistake to start with.

8061   And maybe it only was a possible model 15 or 20 years ago that is no longer sustainable. So we have to start thinking outside the boxes and re-examining the way we are drying these definitions. That is what I am trying to throw onto the table.

8062   Because clearly, trying to keep CBC channels open in small communities, private broadcaster channels open in small communities and community channels isn't working, there isn't enough money in the system to do that. So how can we take the best from those three tiers and make them work together where the communities are small and can't support them all?

8063   COMMISSIONER MENZIES: Okay. One of the questions that might get thrown at you is in terms of one of the traditionally great things about commercial television and news is that commercial television needs to build audiences in order to make money.

8064   And the need to build audiences means that you must produce news that is relevant to the community, that is in touch with the community. If you are not, you won't build the audiences you need to draw advertising. And that demands a certain professional level of talent and it demands good research and knowledge of the community.

8065   When you talk about volunteers producing news, you talk about them sort of deciding what sort of news they want to produce. What I am trying to get at is, isn't there a little bit of a disconnect there between volunteers producing programming that they like versus others producing programming that the community likes?

8066   What disciplines a volunteer to be creating content that truly reflects the community and simply isn't just something they want to do?

8067   MS EDWARDS: I guess the best example right now is the Fédération des télévisions autonomes du Québec. That is the federation of 40 channels, independent community TV channels, currently operating in Quebec. Their volunteers routinely are producing local news that have really loyal audience figures. And they have submitted in past hearings independent studies that have been commissioned to show this. And some of them are partly supported by advertising dollars.

8068   I am not necessarily advocating an advertising-supported community tier, but it can be done. But what I am trying to say is that depending on the size of the community -- in big cities you don't need community tier to do news, you have private broadcasters that will do it, so it is not a concern there. So therefore, the community tier should be covering the smaller communities up to the point at which the private broadcasters takeover.

8069   I mean, there is a vacuum, and I feel that the community tier can fill that with adequate funding. And it is a funding model that is much more powerful than the professional model, because you are multiplying the programming you can do with volunteers.

8070   And the smaller the community is the less need for hardcore kind of political coverage or sensitive coverage that you might need in a big city. Like, you get into sort of community events at a smaller level where volunteers can meet that need.

8071   So there is a scale of professional production in big centres to volunteer production coached by professionals in smaller centres, and there is a scale all the way in between. And volunteers can meet that need at the bottom end. I mean, that is where we are saying that we are missing the local coverage at the moment.

8072   But I am also trying to get you to understand that news, as we think of it, as a really dense format where we send a whole production crew out and come back with three minutes on that topic, is extremely expensive and it is the sort of thing that people tend to want to consume in big markets anyway. Because we want to know everything that is going on in Toronto today without having to listen to 20 minutes on ever single thing.

8073   And actually, as you get into smaller and smaller communities your audiences will tolerate a lot more local coverage because they are desperate for any local coverage. So I am trying to say that this model, it will step into that gap, but you don't necessarily need high-impact dense daily news in a town of 50,000 is what I am trying to tell you.

8074   COMMISSIONER MENZIES: Okay. That could be a real important sort of part of the future, because we have had these discussions with the networks and that and they have made it quite clear that the current model at least simply can't sustain commercial networks in communities of that size. But we want to make sure there is broadcasting and local reflection and local content in those communities.

8075   Do you see in communities that size down the road, community television replacing some of these commercial networks? Do you see that happening or are you talking about building a new model of cooperating with them to assist them from the ground up?

8076   MS EDWARDS: I mean, I think that both should be explored. I mean, it depends what people have the will to want to do. I mean, if private broadcasters, if they don't feel they are going to make a buck in the small communities and they want to leave, I think that they won't do good programming anyway, they should leave. And we should focus funds that there are on organizations more fitted and interested to serve those communities. And they are typically ones that have a community base, where the people live in the community, let's face it.

8077   With organizations like the CBC, which has a mandate to be a public broadcaster and serve the public, maybe discussions about a possible hybrid model might be more fruitful.

8078   And it is interesting in the north, a lot of stations in the north feel CBC channels in the north, for example, or IBC, Inuit Broadcasting Corporation channels, feel a lot like community broadcasting channels, in that there is a lot of volunteer contribution or people that are working part-time or sort of for minimal freelance rates, because they are smaller communities and people are committed to get the stuff on the air even if they are not completely compensated.

8079   So I think that, you know, people in the smaller communities are willing to work on a hybrid model. So from the point of view of the big public and private broadcasters, if they are willing to work with those people and meet them part way, certainly the communities will, the communities want the coverage.

8080   COMMISSIONER MENZIES: Do you think people would be prepared for the change in the nature of the product? I mean, it would be significantly different from -- wouldn't it? I mean, I am making that assumption and you can correct me if it is a false assumption.

8081   From what people have been used to in terms of, you know, you talk about people that -- we hear lots about how important these stations are to the fabric of their communities and the cultural contribution they make and that sort of stuff. What are you views on that?

8082   MS EDWARDS: Well, I think Ian Morrisson's point about when you are looking at an empty glass versus a glass a third full, you will take the third.

8083   And I would also like to point out that before the community sector was deregulated 10 years ago -- so, for example, in most parts of the country held by Shaw and Rogers currently, and Videotron to some extent, they have hugely reduced the volume of production. They tend to go with a professional model as well.

8084   I was the volunteer coordinator in Calgary 10 years ago when Shaw decided they wanted to kick out all their volunteers and professionalize the channel. And overnight, we went from having 40 hours of local production week in all these different genres to having a one-hour news wheel everyday produced in a professional model.

8085   And the cable companies had been regionalizing their channels as well, limiting service in many of their smaller towns. Whereas there used to be 30 studios in New Brunswick, community television studios, and those are the only television services in those communities, now there are six. Rogers is offering community production professionally produced from Fredericton and that is it.

8086   So sorry, can you rephrase your question?

8087   COMMISSIONER MENZIES: Well --

8088   MS EDWARDS: I was preparing for your answer, so you get the context.

8089   COMMISSIONER MENZIES: No, I think you were putting it in the context. The context was, are people prepared --

8090   MS EDWARDS: Right.

8091   COMMISSIONER MENZIES: -- for the changes in these models, because what you were describing in your --

8092    MS EDWARDS: Right.

8093   COMMISSIONER MENZIES: -- in your experience in Calgary with Shaw and you were talking about Rogers in Fredericton I think. Sounds like something evolving.

8094   MS EDWARDS: Right.

8095   COMMISSIONER MENZIES: It is evolving away from volunteers and into professional, but it is something that is different from what --

8096   MS EDWARDS: Right, sorry. What I was trying to get at was in 1996, just before the community tier was deregulated and we started to see the shift toward professionalization within that tier, the CCTA did a market research survey and found that in small communities where there was no other television service, no professional service, either CBC or private, the community tier was very highly watched, and that was production by volunteers.

8097   And the channels tended to get lost in bigger cities because there were other competitive services that were professionally produced.

8098   So it is already demonstrated that they are well-watched in smaller communities. The smaller they are and the less other local news offerings the more people watch them because that is all there is.

8099   COMMISSIONER MENZIES: Okay, thank you very much.

8100   THE CHAIRPERSON: Candice?

8101   COMMISSIONER MOLNAR: Thank you.

8102   I just have one question when you are talking about community channels being the solution for small markets. As I am sure you are aware, in small markets satellite has a greater penetration than in the major markets. And the small markets, satellite has no community television. And so I am trying to square the solution with, you know, what is the reality today.

8103   If we rely solely on community television to serve these smaller communities and these small communities aren't able to access community television because they are 40 per cent using DTH solutions, how does that bring community television to these communities?

8104   MS EDWARDS: Well, starting in 2002 with 2002-61 CRTC Policy for LTFs over-the-air small broadcasters, we have seen independent community TV channels such as in St. Andrews licensed and they are broadcasting over-the-air. So it is not a conflict. So, for example, people in St. Andrews, it is a town of 1,500, yes, they can subscribe to satellite, but they can also get a free over-the-air community television service.

8105   The weakness with that policy is that there was no funding device put in place. So there is fewer than 10 of those licence holders across the country because they were just left to their own devices to try to find advertising. St. Andrews, many of the commissioners have heard St. Andrews' presentations, they survive on bake sales and things like that.

8106   There needs to be a move away from BDU-run community channels, which they have been shutting them in smaller communities anyway, and liberate the 2 per cent that is being spent on BDU community channels to these kinds of independent community television channels which can broadcast over-the-air and serve those communities.

8107   So right now we have got that $80 million spent in the community tier, as identified by the Lincoln Report, mostly tied up in BDU channels that are increasingly being professionalized and regionalized and not serving small communities anymore. So that is the answer, over-the-air.

8108   THE CHAIRPERSON: Okay, thank you very much for your presentation, and I hope to see you at the community television hearing.

8109   MS EDWARDS: Yes, look forward to it.

8110   THE CHAIRPERSON: Okay, thank you.

8111   We will take a 10-minute break before we listen to the next one.

--- Upon recessing at 1027

--- Upon resuming at 1040

8112   THE CHAIRPERSON: Madam Secretary, we are ready.

8113   THE SECRETARY: Thank you, Mr. Chairman.

8114   Our next presenter is the Documentary Organization of Canada. Madame Lisa Fitzgibbons comparaît pour DOC et nous présentera son collègue.

8115   Madame Fitzgibbons, vous avez 15 minutes pour votre présentation.

INTERVENTION

8116   MME FITZGIBBONS : Bonjour.

8117   Monsieur le Président, membres de la Commission, messieurs et mesdames du Conseil, merci beaucoup de nous avoir accordé l'occasion de participer à ces audiences.

8118   Je suis Lisa Fitzgibbons, la directrice générale de l'association des Documentaristes du Canada/Documentary Organization of Canada.

8119   Mon collègue est Monsieur Danijel Margetic, président du Comité de représentation et l'un des nombreux bénévoles sur lesquels dépend DOC en vue d'articuler les positions de notre association à l'égard de questions réglementaires ou autres touchant notre industrie.

8120   Je tiens à souligner cette contribution de la part de bénévoles car, de toute ma vie professionnelle, je n'ai jamais vu un organisme comme celui-ci, dont l'action est littéralement portée et amplifiée par l'énergie et l'investissement de ses bénévoles. La présentation qui suit est, d'ailleurs, le fruit du labeur de plusieurs membres, et il est essentiel de le relever.

8121   DOC parle au nom des documentaristes indépendants du Canada. L'organisme est dirigé par ses membres et appuie la promotion et le développement de l'art du documentaire.

8122   Association sans but lucratif à portée nationale, DOC défend la position de ses membres en vue de créer un environnement propice à la production de documentaires et cherche à renforcer le secteur au sein de l'ensemble de l'industrie du cinéma.

8123   DOC représente les réalisateurs, les producteurs et les artisans qui travaillent dans un type d'émission prioritaire largement sous-représentée et sous-financée dans le secteur privé de la télédiffusion conventionnelle.

8124   Comme le démontrera notre présentation, le documentaire a effectué un sérieux recul sur les ondes des chaînes de télévision conventionnelles.

8125   MR. MARGETIC: In the course of our research, it has been exceedingly difficult to ascertain the specific financial data regarding broadcaster expenditures on documentary production. Consequently, we would like to petition the Commission to consider providing specific details of financial expenditures on long-form documentaries (Category 2(b)).

8126   Currently they are aggregated with all Category 2, 3, 4 and 5 programming which means that long-form documentaries are accounted for along with analysis and interpretation, reporting and actualities, religion, formal education and pre-school and informal education, recreation and leisure.

8127   We see no reason, particularly from the perspective of data analysis, why this priority programming category is aggregated with other non-priority programming categories. Consequently, it should be noted that because there are no specific details on Category 2(b), we have had to infer spending levels through interpretation of CTF data.

8128   To contextualize our position, it is DOC's view that the current economic downturn is temporary. We therefore urge the Commission to carefully consider and weigh the impact of any measures currently being proposed by the broadcasters and other parties as they have the potential to dramatically impact the entire sector for years to come.

8129   It bears stating that over the last five years the overall financial trend has been a positive one, with broadcasters showing an overall 3.49 percent increase in revenues from 2004 to 2008. The revenues from advertising have also had a slight positive trend, increasing by 2.37 percent, all this in spite of the economic downturn experienced throughout 2008 and the growing popularity of other media platforms.

8130   We understand that at the same time, conventional broadcaster profits went from $111 million in 2004 to $96.4 million in losses in 2008, for a total decrease of $207 million. As a result, the conventional broadcasters have stated that the system is broken and that regulations are too onerous and are consequently asking for major regulatory concessions. It should be pointed out that during the same time period when profits were decreasing, broadcasters increased their expenditures on foreign programming by approximately the similar amount of $200 million.

8131   In light of the various broadcaster proposals and the recently announced Canada Media Fund, DOC and its members are particularly concerned about the future of independent production. In comparison to specialty channels, the conventional broadcasters currently commission a very low percentage of independently produced programming, and in the case of documentaries, that number is dismally low.

8132   In addition, the consolidation of ownership within the broadcasting sector and increased broadcaster demands for greater rights and of longer duration in licensing agreements has led to the virtual disappearance of second-window licence fees upon which independent producers have relied for revenue or, in the case of documentaries, depended on as part of their production financing model.

8133   In previous years a producer may have been able to get a second-window licence on specialty channels for their shows. Now, the broadcasters are paying a smaller licence fee and demanding rights for all platforms -- conventional, specialty, VOD, PPV, mobile, new media -- that form the part of their corporate group. They are also demanding rights for a wider territory and for longer periods, making it increasingly difficult for producers to monetize the production in other markets.

8134   When dealing with the independent producers, broadcasters have been adamant that their various platforms should be considered as a single entity, and therefore a licence fee from one of their various channels should entitle them to exploit content on all the platforms within their corporate group.

8135   We find it rather peculiar that in their request to the Commission and the government for significant regulatory concessions the broadcasters have been very clear that all of their channels should be treated as separate businesses. This approach is confusing and inconsistent at best, and intellectually dishonest at worst.

8136   As we have stated in our written submission, we find some merit in the proposals for reexamination of a fee for carriage and introduction of non-simultaneous substitution but such regimes would only be effective if they were coupled with expenditure requirements that would prevent broadcasters from simply injecting more money into the foreign market as opposed to investing in Canadian programming.

8137   We also support the Commission's proposal for 1:1 program spending ratio, and while we understand that a full implementation of such a regime would be undertaken gradually, we believe it would represent a step in the right direction and in the long run would be beneficial to the broadcasters.

8138   The following trends heighten DOC's concerns about the steady decline of documentary programming on the private conventional networks.

8139   Currently, the spending by the private networks on documentary programming is staggeringly low. For example, independently produced Category 2-5 programming, of which documentary is only a portion, represents only 2 percent of Canadian Content spending by CTV, Canada's largest private broadcaster. The actual spending on documentaries would be an even lower percentage.

8140   From 2004 to 2008 the increase in spending on independently produced Category 2-5 programming has increased by 6.19 percent, while the spending on all independently produced Cancon increased by 16.24 percent, outpacing Category 2-5 by 2.6 times.

8141   During the same period, the spending on affiliated Category 2-5 production has increased by 64.4 percent.

8142   The 6.19 percent increase in spending on independent Category 2-5 has not been consistent across the regions, with Quebec showing a spending decrease of 35 percent on independently produced Category 2-5, while the Atlantic region shows a decrease of 48.36 percent.

8143   The analysis of CTF data during the same period, 2005-2006 to 2009-2010, of broadcaster performance envelopes paints an even more alarming picture. The combined conventional broadcaster performance envelopes for documentary have decreased by 18.62 percent, while their total envelopes have remained effectively the same, showing only a small decrease of 2.2 percent.

8144   The private networks have effectively frozen commissioning of independent documentaries until the next fiscal year. Considering that some of them have dissolved their documentary commissioning departments it is unclear whether new independent documentary programming will return to conventional television.

8145   Given that documentaries were granted priority program status largely at the behest and support of the broadcasters themselves, we find it difficult to understand why funding to documentaries on the private networks has decreased.

8146   Several broadcasters have stated that licensing of independently produced programming is hampering their ability to stay profitable. They argue that they must have control of all rights in order to remain profitable. This is simply not true. Broadcasters pay a fraction of the costs of program production. In exchange for their contribution, the broadcasters receive the right to broadcast the program for a limited term.

8147   None of the broadcasters have provided specific numbers demonstrating that their lack of ownership over total rights has resulted in loss of potential revenue. Without specific figures, these arguments are simply conjecture.

8148   Considering that broadcasters only contribute a small fraction of the budget required to produce a successful show, DOC sees no rationale in the broadcasters' demand to control all of the rights and strongly opposes any such demand. However, our opposition will mean nothing to the broadcasters as long as established terms of trade are not in place.

8149   DOC has extensively consulted with CFTPA on the issues regarding terms of trade and we have materially contributed to the process. We support the terms of trade document presented by the CFTPA to the Commission.

8150   DOC opposes the notion by the broadcasters that the terms of trade should be a best practice document because such a document would be broad and non-specific and it would not have enforcement powers. Ultimately it would leave all the negotiation power in the hands of the broadcasters.

8151   DOC opposes the notion by the broadcasters that the CFTPA document is an attempt at a "Master Licence Agreement" that :

"would set prices ... for the licensing of independent production projects."

8152   DOC is of the view that the terms of trade document presented by the CFTPA is fair and balanced and outlines the basic minimum points in negotiating a licence agreement.

8153   DOC would like to point out that a different but similar terms of trade agreement exists in the U.K. and has been successful for both the broadcasters and independent producers precisely because it is specific and enforceable as well as sufficiently flexible.

8154   While proposing the complete elimination of priority programming and independent production requirements, the broadcasters have suggested that neither the CRTC nor the independent production community should be concerned because tangible benefit funds are in place that would somehow stand in for those requirements. DOC finds such proposals extremely dangerous not only to independent production but to Canadian content in general.

8155   As an example, with CTV tangible benefits expiring, CTV has effectively shut down its commissioning of independent docs.

8156   Rogers, in their application pertaining to OMNI channels, have clearly stated that they do not intend to invest in independently produced priority programming once their benefits package runs out.

8157   Canwest attempts to assuage fears by proposing that 50 percent of all of their Canadian programs, other than news, sports and current affairs, will be produced by independent producers. This proposal is irrelevant without a corresponding commitment to priority Canadian programming and Canadian content. This proposal simply raises the question: What is 50 percent of zero?

8158   If no priority programming requirements are in place, it is clear that broadcasters will not invest in it, and DOC opposes all the proposals by the broadcasters to abolish priority programming requirements.

8159   Rogers also stated that there are "already sufficient safeguards in place to ensure the continued health of the independent production sector" and cites the Canadian Television Fund and Rogers Telefund as examples.

8160   Any reduction in independent production requirements would have drastic consequences on the independent sector for the following reasons.

8161   Without set spending requirements, broadcasters will reduce their licensing of independently produced programs. Both CTF and Rogers Telefund require a broadcast licence to be in place in order to access the fund. Whether or not the funds exist would be irrelevant to independent producers if the broadcasters are not obligated to acquire original independent priority Canadian programming.

8162   The government recently announced that the CTF and the CNMF would be restructured and rebranded into the Canada Media Fund. The new fund would also be open to broadcaster in-house productions. If there are no requirements in place for broadcasters to acquire independent programming, the broadcasters could effectively completely shut out independent producers from the CMF.

8163   We understand that discussion of the Canada Media Fund falls outside of the scope of these hearings but DOC would like to register our concern of the potential impact of the announced fund on independent documentaries with the Commission.

8164   Firstly, based on the announcement by the Heritage Department the fund will put priority on drama, comedy and children's programming, while making no commitments to sustaining funding for documentaries.

8165   Secondly, the fund will expand access to affiliated productions and for the first time allow broadcasters to access financing for in-house productions. This is particularly disconcerting to DOC as we have already shown to the Commission that spending on in-house and affiliated productions has risen sharply, while the spending on independently produced documentaries has decreased. We are concerned that the CMF will only exacerbate this problem further.

8166   Lastly we are concerned about the fund's proposed governance. With cable companies nominating five of the seven board members and their affiliated broadcasters eligible to profit from the fund, we are afraid that conflict of interest may be inescapable.

8167   DOC would like to once again caution the Commission that any decisions made in order to resolve this short-term financial crisis will have a lasting impact on the Canadian broadcasting landscape and could have either a positive or deeply damaging impact on the independent production sector.

8168   We wish to thank you for the opportunity to present today and welcome questions.

8169   THE CHAIRPERSON: Thank you very much.

8170   First of all, your submission more or less suggests that the broadcasters are starving you and are slowly abandoning the field of documentaries. You even say that they have dissolved their commissioning department for documentaries.

8171   What is the market value of documentaries? Do you have any data or statistics of what people want to see by way of documentaries? I don't understand why the broadcasters would, according to you, more or less abandon this field if there is a market for it.

8172   MS FITZGIBBONS: I have a volume of production that was worth $440 million in 2005 and 2006. That is the latest figure that I have in Getting Real.

8173   THE CHAIRPERSON: Yes, but that is the demand side. I assume that broadcasters are men of business and they produce what the viewers want to watch and I always went on the assumption that viewers like documentaries, want to watch them, et cetera, and so therefore, as a broadcaster, if you don't have documentaries there is something missing in your line-up.

8174   That is my feeling, I have no idea whether that is right or wrong and I wonder if you have any statistical basis to say yes or no to that.

8175   MR. MARGETIC: We do not understand why and this is a problem that is endemic to the conventional side of the picture, because on the specialty side there has been an increased investment for documentaries. But on the conventional side there has been, based on the numbers, either a stagnation or a decrease.

8176   THE CHAIRPERSON: Secondly, you talk about terms of trade and you feel that what the broadcasters are offering is not enough and you want more than just the best practices or framework document. You want more but I am not quite sure what this more is.

8177   I have heard from the broadcasters here. They are all saying yes, we want to do, in effect, like a master contract and the negotiations are only about the rates and we do that but we don't want to get into a rate-setting exercise by way of terms of trade.

8178   What exactly do you feel has to be the minimum in the terms of trade agreement to be acceptable to you?

8179   MR. MARGETIC: I would defer on that point to the CFTPA because they are the ones who are actually doing the negotiating with the broadcasters.

8180   But I would volunteer from DOC's position some formal incremental compensation for the various platforms that they are acquiring rights for as opposed to what is currently in practice, which is the process in which they acquire rights for their entire corporate group.

8181   When, for example, a conventional broadcaster licenses something on their main network they immediately, without further compensation to the producer, also take the rights for all of the specialty channels in their group. They also demand rights to VOD, PPV, mobile, et cetera, and those rights are -- without actually getting into the point of this is how much we want, we feel that those rights should be compensated somehow.

8182   THE CHAIRPERSON: What is the difference if you say either I will pay you whatever -- let's make it very simple -- I will pay you 20 percent for the rights across all my platforms or I will pay you 10 percent for my OTA and 10 percent for my specialty or 5 percent for my specialty and 5 percent for VOD. At the end of the day it is a number which you hope you will gain or not gain. How you split it up, what difference does it make?

8183   MR. MARGETIC: Well, the problem right now is that they go and -- some broadcasters will also do it in the opposite direction, where the rights on a certain channel are worth more and rights on other channels are worth less, and they will commission programs on their channels that are usually giving smaller licence fees and then still acquire the programming rights for all their other channels.

8184   So for example, they could, at lower licence fees, license something for one of their specialty channels and they still take the rights for conventional.

8185   THE CHAIRPERSON: Yes. But at the end of the day, it just boils down to negotiation, right?

8186   MR. MARGETIC: Sorry?

8187   THE CHAIRPERSON: At the end of the day, it still just boils down to negotiation. If they ask for rights on all platforms and you say -- surely you as the negotiator then say, well, you are asking for this small -- it is a small fee for the specialty channel but you want the OTA rights too. The OTA rights are worth more, so therefore, the total has to be either lifted or else we have to split it up among various rights.

8188   I don't see how a terms of trade agreement helps you here unless you want to see a terms of trade agreement establishing base rates and you would just negotiate the incremental.

8189   MS FITZGIBBONS: If I may, I am not sure that we are interested in getting into base rates as much as recognizing basic principles of which the different platforms are different markets.

8190   One of the concerns that we have is that by agreeing, let's say, to Internet rights, for example --

8191   THE CHAIRPERSON: Yes.

8192   MS FITZGIBBONS: -- it actually closes out other markets for the producer.

8193   THE CHAIRPERSON: Okay, thank you. Candice, do you have some questions?

8194   COMMISSIONER MOLNAR: Yes, thank you.

8195   Welcome here this morning. I have read your submission and I followed your opening comments this morning and they are generally very similar to your submission but one of the things I just wanted to be clear about before I begin into my other questioning was in paragraph 7 of your opening remarks you speak of "the current economic downturn is temporary" and in your submission you suggest that the economy will recover, as will the advertising market and subsequently the profits of the conventional broadcasters.

8196   I would like to understand. We have sat in this room -- this is our second week now -- and heard many come before us and talk about some of the structural issues facing the conventional broadcasters, fragmentation of audience being one of the key elements.

8197   On what basis do you see that the profits of the conventional broadcasters will recover?

8198   MR. MARGETIC: Actually, we would like to modify that statement because as we look at the numbers we do see that their advertising has -- despite the downturn from 2007 to 2008, the overall trend is still positive.

8199   What we do see as a problem is that broadcasters are overspending themselves. So essentially their profitability will not return as long as they are overspending on foreign programming.

8200   COMMISSIONER MOLNAR: As I am sure you are very aware, they would argue that the foreign programming is what subsidizes their ability to show Canadian programming and documentaries and other, and so it is a necessary component of their business because it is what is providing the cross-subsidy.

8201   Now the reason I am asking these questions is fundamentally your submission is we need to, at a minimum, protect and potentially enhance the spending on documentary and drama within the system.

8202   It is quite a significant change of position from what the broadcasters are saying, which is, structurally the system has to change, we cannot afford to do what we have in the past.

8203   So I need to understand why we believe they can afford to do what they have in the past or in fact enhance from that baseline.

8204   MR. MARGETIC: The Commission will have had the opportunity to view the broadcasters' financial data in camera, something that we are not privy to, but it is our understanding that the broadcasters have engaged in a bidding war over the last five years, which has driven prices up, and in certain cases have also made purchases that have not made it to air, simply for the purpose of keeping it our of their competitors' hands. We do not have the numbers, since those numbers are private, in terms of what amount -- incremental increase that actually represents.

8205   And the question that we would like to pose: Considering that the number of programming hours within a 24-hour period and a seven-day week has not changed, what is driving up the price of the foreign programming? Between the bidding war and the need to take programs out of their competitors' hands, that is the answer that we have but the Commission may find other answers from the broadcasters.

8206   COMMISSIONER MOLNAR: So in your view fragmentation of markets, be it the specialty or be it the Internet, is not the issue, it is all about spending on foreign programming and if that is contained, the broadcasters will return to profitability? So -- go ahead.

8207   MR. MARGETIC: Yes. Once again, as we look at their numbers, overall revenues in the last five years have increased, as have revenues on advertising, both local and national. So the part of the puzzle that is driving down their profits and putting them into losses is the overspending on foreign.

8208   COMMISSIONER MOLNAR: Okay. I want to move on from that topic.

8209   You were speaking with the Chair about the licence fees and broadcasters demanding smaller licence fees and licence fees over multiple platforms and I was listening with interest, wondering if you would have some examples that you could share with us so that we don't speak just conceptually.

8210   Could you give me some examples of actual programming where in fact licence fees have declined and we have looked across multiple platforms?

8211   MR. MARGETIC: What we can do is go back to members and provide you with a historical perspective of how licensing agreements have changed and how increase in demand for rights has occurred, although we don't have those specific numbers with us at the moment.

8212   COMMISSIONER MOLNAR: Would you also be able to give concrete examples as well? You mentioned where, for example, they buy the lower licence fee for specialty and they take conventional with it. If you have some actual examples of that as well that would be interesting.

8213   MR. MARGETIC: Yes, we will get back to you on that.

8214   COMMISSIONER MOLNAR: Thank you.

8215   I just have one other subject I wanted to ask you about. In your submission, related to Canwest you said that you oppose Canwest's proposal for a drastic reduction of local programming obligations down to 10 hours per broadcast week and I wanted to understand better what particularly you oppose.

8216   Canwest, as you may know, their stations have significant fluctuation between some of the stations between the amount of programming that they are required to do or have made commitments to do in the past, some of them as high as 36 hours and some actually quite low.

8217   So do you agree with harmonizing at some level the amount of local programming or is it simply no reductions? I am just not sure where you are standing on that.

8218   MR. MARGETIC: Harmonizing at some level would not be a bad idea. We just feel that 10 hours per week is extremely low.

8219   COMMISSIONER MOLNAR: Do you have some sense as to what would be appropriate?

8220   They do say that the local programming is the most expensive, particularly local news, of their Canadian programming requirements. So, you know, the larger amount that we are requiring on local news and local programming, of course, is putting some more strains on the system. What would be your view as to what is appropriate?

8221   MR. MARGETIC: I don't think we have a specific answer for you on that particular matter at this time.

8222   COMMISSIONER MOLNAR: Okay, that is fine. Those are my questions, thank you.

8223   THE CHAIRPERSON: Thank you.

8224   Rita...?

8225   COMMISSIONER CUGINI: Thank you.

8226   Good morning. In reading your written submission it is very much focused on the levels of expenditures that the over-the-air broadcasters have made over the course of a number of years.

8227   Do you also track the number of hours? In other words, over the last five years, for example, have you tracked how many hours of the eight hours of priority are documentary hours?

8228   MS FITZGIBBONS: We have tried to do that with a survey that was done, a scheduling survey, and part of the issue was actually coming down to the aggregated data we couldn't extract out the documentary long-form figures. So we have had to extrapolate.

8229   So we have seen some decline. We have figures that show a decline and we can provide that. But certainly we encountered that difficulty, having to get to the hard data.

8230   COMMISSIONER CUGINI: I think whatever data you do have would be helpful so we can also see what the trend is in terms of how many hours are being dedicated to documentary.

8231   As you know, people have come before us and said, you know, perhaps some of the burden of priority programming should be shifted to the specialty services, and in response to the question that the Chairman asked you about demand for documentary, you did say that demand has in fact increased on specialty.

8232   So I guess my question is: Why shouldn't we take them up on the suggestion that the obligation for documentary programming be shifted to specialty, who are more profitable, the audience seems to be migrating more towards specialty, and wouldn't that be of greater benefit to documentary producers in this country? In other words, can we let over-the-air broadcasters off the hook?

8233   MR. MARGETIC: Well, if we were to do that, we believe that documentaries would lose an important portion of the audience, that portion of the audience that specifically accesses television through over-the-air channels, and regardless of the success of specialty channels, over-the-air television still has the widest reach in terms of audience.

8234   So if documentaries were completely eliminated from the over-the-air channels, essentially at the same time they would lose their presence in the Canadian market as such and in the Canadian consciousness.

8235   COMMISSIONER CUGINI: And you don't believe that you could get higher licence fees if it was only on one sector of the industry as opposed to the dilution of licence fees, as you say, because the broadcasters are asking for rights across all platforms?

8236   MR. MARGETIC: Well, the important question would be: Would the funds that the broadcasters who own specialty channels as well and are currently contributing to documentaries, would the funds incrementally increase on the side of their specialty channels if that were the case? And right now there is no answer on that point from the part of the broadcasters.

8237   COMMISSIONER CUGINI: Okay. Well thank you very much, those are my questions.

8238   THE CHAIRPERSON: Okay, thank you very much.

8239   Maître Dionne, il y a des engagements?

8240   Me DIONNE : Oui, merci.

8241   I have three undertakings.

8242   One is to file your historical perspective of licence fees regarding documentary programming and the demand that has occurred for other platforms.

8243   Second, provide examples of agreements that illustrate broadcaster strategy to license on specialty and then demand conventional rights.

8244   Third, provide how many hours of priority programming are dedicated to documentary programming.

8245   And I would ask that you file this information before or on May 13th, which is the deadline for final written submissions on policy issues.

8246   Thank you.

8247   THE CHAIRPERSON: Okay, thank you.

8248   MR. MARGETIC: If we can just request in terms of sending examples of licensing agreements that those be kept confidential.

8249   MS DIONNE: You may make a written request when you file the information.

8250   MR. MARGETIC: Thank you.

8251   LE PRÉSIDENT : O.K. Madame la Secrétaire, on progresse avec le prochain intervenant.

8252   LA SECRÉTAIRE : Oui. J'inviterais maintenant l'APFTQ à se présenter à la table.

--- Pause

8253   LA SECRÉTAIRE: Alors, nous avons donc madame Claire Samson qui comparaît pour l'Association des producteurs de films et de télévision du Québec.

8254   Veuillez nous présenter vos collègues, s'il vous plaît, et vous avez ensuite 15 minutes pour faire votre présentation.

INTERVENTION

8255   Mme SAMSON: Merci. Monsieur le président, monsieur le vice-président, mesdames messieurs les conseillers. M'accompagnent aujourd'hui madame Brigitte Doucet, à ma gauche, directrice générale adjointe de l'APFTQ et madame Suzanne D'Amours, consultante.

8256   Comme il était mentionné dans notre Mémoire, l'APFTQ appuie avec certaines réserves la demande de renouvellement des licences du Groupe TVA. Nous n'avons pas l'intention de répéter ici ce que nous avons énoncé dans notre Mémoire. Nous sommes convaincus que vous en avez pris connaissance et nous serons ravies de répondre à vos questions concernant le Mémoire que nous avons déposé.

8257   Tout d'abord, nous aimerions mentionner que nous appuyons entièrement la position de nos collègues producteurs du Canada anglais exprimée dans le Mémoire présenté par le CFTPA.

8258   Malgré le fait que nous demandions des conditions particulières pour les radiodiffuseurs qui opèrent dans le marché de langue française, il nous apparaît important que le Conseil juge différemment les demandes faites par les radiodiffuseurs conventionnels des deux marchés linguistiques.

8259   Ainsi, il n'est pas nécessaire d'exiger des requérantes qui opèrent dans le marché de la langue française que les dépenses de programmation canadienne soient au moins égales à celles des émissions étrangères. Au Québec, les dépenses de programmation canadienne chez les radiodiffuseurs conventionnels de langue française sont largement supérieures à celles consacrées à la programmation étrangère.

8260   Le succès des émissions de langue française au Québec n'est plus à démontrer et si l'on en croit une des requérantes qui se présente devant vous pour son renouvellement de licence, le Réseau TVA, il n'y a aucune raison pour que des émissions qui trouvent leur public ne se retrouvent pas à leur antenne.

8261   Nous sommes conscients que la conjoncture économique actuelle est inquiétante et peut avoir un impact négatif sur les résultats financiers des différentes entreprises qui évoluent dans le système de radiodiffusion canadien dont les producteurs indépendants. Personne n'est à l'abri des dégâts que pourrait causer cette conjoncture économique difficile.

8262   Cependant, nous ne sommes pas prêts à reconnaître que l'industrie de la radiodiffusion est en péril et qu'il faille retirer toutes les réglementations pour permettre aux marchés seuls de dicter les règles d'affaires de notre industrie.

8263   D'ailleurs, il n'y a pas si longtemps le CRTC a refusé aux entreprises de radiodiffusion conventionnes d'accéder à une redevance de distribution, une des raisons étant que ces entreprises ont été incapables de démontrer au Conseil leur engagement ferme envers une façon d'utiliser les tarifs pour améliorer le système canadien de radiodiffusion et, particulièrement, la programmation locale.

8264   LA SECRÉTAIRE: Madame Samson, je m'excuse de vous interrompre. Ce serait possible, s'il vous plaît, de ralentir un petit peu votre débit; c'est vraiment difficile pour les interprètes.

8265   Mme SAMSON: Ça va me faire plaisir et ça fait différent que de se faire dire: va donc plus vite. Merci.

8266   De plus, vous-même, monsieur le président, avez informé le Comité du Patrimoine pas plus tard que le 25 mars dernier, que vous aviez tenu compte du fait que les dernières années les revenus globaux des radiodiffuseurs conventionnels avaient été stables, mais que leurs dépenses en matière d'émissions étrangères ont connu une hausse constante.

8267   De même, vous avez spécifié que les radiodiffuseurs conventionnels venaient tout juste de conclure des transactions très importantes de plusieurs milliards de dollars, ce qui indiquait que les prêteurs avaient confiance en leur plan d'affaires. Nous partageons cette opinion.

8268   Lorsque nous lisons les demandes et écoutons les arguments des radiodiffuseurs conventionnels, force est de constater qu'ils réclament plus de souplesses, plus de droit sur les émissions pour exploiter toutes les plates-formes et moins de réglementation pour atteindre leurs objectifs.

8269   Devons-nous rappeler à ces entreprises qu'elles évoluent dans une industrie réglementée, que cette réglementation les a très bien servies et les sert encore, ne serait-ce que par leur droit à une distribution obligatoire et prioritaire ainsi qu'à la substitution simultanée.

8270   Nous nous attendons à ce que le Conseil les rappelle à l'ordre et exige qu'elles s'engagent minimalement envers la production canadienne, les émissions prioritaires et la production indépendante.

8271   À moins que son mandat n'ait été modifié dernièrement, le CRTC n'est pas une organisme d'approbation des plans d'affaires des entreprises de radiodiffusion, comme semblent le croire les radiodiffuseurs conventionnels.

8272   Avant de passer à la demande de renouvellement de licence de radiodiffusion du Réseau TVA, nous souhaitons nous pencher sur les enjeux liés aux politiques qui touchent non seulement les radiodiffuseurs conventionnels, mais l'ensemble de l'industrie, comme vous l'avez indiqué lors de votre discours d'ouverture.

8273   Vous comprendrez que nous désirons aborder la contribution des radiodiffuseurs conventionnels au titre des émissions canadiennes par l'entremise des émissions locales prioritaires et créées par des producteurs indépendants.

8274   De plus, comme vous l'avez aussi mentionné dans votre discours d'ouverture, nous sommes prêts à discuter avec vous des négociations en cours avec les radiodiffuseurs conventionnels. Ça ne risque pas d'être très long puisque, au Québec, nous avons uniquement deux radiodiffuseurs conventionnels privés de langue française: TQS qui peine à retrouver le chemin de la rentabilité et le Réseau TVA qui nous oppose une fin de non-recevoir.

8275   Nous y reviendrons lorsque nous discuterons du renouvellement de licence du Réseau TVA.

8276   Mme DOUCET: Les émissions canadiennes à l'antenne des radiodiffuseurs conventionnels.

8277   Le 19 février dernier, lors du Congrès annuel du CFTPA, monsieur le président, vous prononciez ces paroles:

8278   «J'aimerais vous rappeler ceci, quelle que soit la refonte que connaîtra notre système, celui-ci devra toujours arborer les traits distinctifs de la radiodiffusion canadienne.

8279   La prépondérance du contenu canadien, l'accès de tous les Canadiens au système à la fois comme participants et comme membres de l'auditoire, le reflet du caractère bilingue de notre pays et notre diversité tout à fait unique.

8280   À cela, nous ajoutons: dans le respect de la Loi sur la radiodiffusion.»

8281   Ces paroles, monsieur le président, nous voulons les voir appliquer concrètement. Ainsi, nous nous attendons à ce que les radiodiffuseurs conventionnels continuent de prendre des engagements spécifiques envers la programmation canadienne, qu'elle soit nationale ou locale parce que, quoi qu'on puisse en penser, les radiodiffuseurs conventionnels, du moins dans le marché francophone, demeurent encore la pierre angulaire du système de radiodiffusion canadien.

8282   La production indépendante.

8283   La production indépendante serait un mal nécessaire, selon certains radiodiffuseurs conventionnels qui voudraient bien d'un assouplissement de leurs obligations à cet égard quand ce n'est pas l'abolition totale de la réglementation.

8284   Le Conseil se questionne sur la pertinence de maintenir une obligation de 75 pour cent des émissions prioritaires qui doivent être réalisées par les sociétés de production indépendante.

8285   Avant de répondre à ces questions, permettez-nous de rappeler pourquoi cette production indépendante fait partie intégrante de l'industrie et de la radiodiffusion canadienne.

8286   Premièrement; la télévision s'est développe au Québec pendant les trois premières décennies sur la base d'une intégration verticale quasi complète des activités de production, de programmation et de diffusion. Le rôle de la production télévisuelles indépendante au cours de cette période, a donc été modeste, voire marginale.

8287   Deuxièmement; rappelons l'impasse à laquelle a conduit ce modèle d'intégration verticale des activités de production et de diffusion et le diagnostic sévère composé sur cette situation, deux commissions d'études indépendantes au début des années 80.

8288   En l'essence, celles-ci ont constaté une concentration indue des décisions de créations et de production aux moins de quelques-uns, une faible innovation, un essoufflement et une sclérose de la création, une baisse d'efficacité, de productivité et de compétitivité, un apport limité au développement de nouveaux talents et à la diversification des lieux d'idéation, de création et de production.

8289   Pour résoudre ces graves problèmes, les deux comités ont identifié la même solution. Obliger les télédiffuseurs à affecter une portion significative de leur budget de programmation canadienne, à l'acquisition d'émissions en provenance d'une diversité de producteurs indépendants.

8290   Les politiques de soutien à la production indépendante qui ont été adoptées dans la foulée de ces rapports poursuivaient les objectifs suivants:

8291   Accroître la disponibilité, la qualité, la créativité et le dynamisme de la programmation télévisuelle canadienne en diversifiant les sources d'idéation et de création au sein du système de radiodiffusion canadienne.

8292   Créer une saine émulation entre une multiplicité de maisons de productions et ainsi, augmenter la qualité et la diversité de l'offre d'émissions, tout en favorisant une concurrence, une productivité et une compétitivité accrue.

8293   Offrir de l'emploi et des occasions d'expression à une multitude d'auteurs, réalisateurs, producteurs, techniciens et scénographes pigistes qui trouvaient peu de débouchés à une époque et dans un univers où les télédiffuseurs réalisent à l'interne et le plus souvent avec du personnel permanent l'essentiel de leur programmation canadienne.

8294   Développer de nouveaux créneaux, de nouvelles formules, de nouveaux concepts d'émissions canadiennes que les télédiffuseurs n'avaient jamais vraiment exploités à l'interne ou qui s'étaient sclérosés au fil des ans.

8295   Stimuler le rayonnement international de la culture canadienne et québécoise a travers l'exportation de nos émissions, une dimension qui était quasi inexistante au cours des 30 années de situation d'intégration verticale quasi totale des fonctions de production et de programmation au sein des entreprises titulaires de licences de radiodiffusion.

8296   On peut certainement affirmer que la majorité de ces objectifs ont été atteints et que la production indépendante québécoise a changé radicalement le portrait de la télévision québécoise.

8297   Dans un univers où les modèles de production et d'exploitation évoluent, le processus de diversification des luttes de création et de production doit se poursuivre. Cet objectif transcende les intérêts propres du milieu de la production indépendante.

8298   Son atteinte est essentielle au maintien du dynamisme et de la compétitivité du système de la radiodiffusion dans son ensemble, de sa capacité de faire appel à tous les talents créateurs d'ici et de jouer adéquatement son rôle d'intermédiaire entre l'expression créatrice de nos auteurs, réalisateurs et artistes et les attentes des téléspectateurs d'ici et d'ailleurs.

8299   L'APFTQ tient aussi à rappeler les avantages considérables dont jouissent les diffuseurs producteurs intégrés qui découlent du privilège de détenir une licence dont, entre autres, le double pouvoir absolu et exclusif de déclencher la diffusion et le financement des émissions canadiennes, l'accès exclusif aux recettes publicitaires générées par la diffusion des émissions canadiennes et le contrôle sur leur grille de programmation.

8300   Une situation qui les place en situation de garde-barrière exerçant de facto un contrôle total sur l'accès des producteurs indépendants au système de la radiodiffusion canadienne comme, d'ailleurs, sur l'accès aux fonds et programmes privés et publics de soutien à la production télévisuelle.

8301   Si les pouvoirs publics jugent toujours essentiels comme nous de promouvoir l'existence d'une diversité de lieux de création, ils doivent être conséquents avec eux-mêmes et ne pas encourager le retour à la production interne et à la concentration des décisions de création aux mains de quelques grands joueurs, avec les conséquences négatives en terme de productivité, de compétitivité, de dynamisme, d'innovation et d'ouverture aux nouveaux talents qui ont déjà été constatés et analysés dans le passé.

8302   Mme SAMSON: Quant au renouvellement des licences du Réseau TVA et de ses stations reliées.

8303   Comme vous avez pu le constater en lisant notre Mémoire, l'APFTQ appuie le renouvellement des licences du Réseau TVA sous certaines réserves. Nous ne reviendrons pas sur chacune d'elles dans notre présentation verbale. Nous serons heureux d'en discuter avec le Conseil après cette présentation.

8304   Nous avons été très intéressées de constater que la comparution de la requérante... lors de la comparution de la requérante, que cette dernière souhaitait que le Conseil renonce à toute forme de réglementation concernant le contenu canadien, les émissions prioritaires ainsi que le recours à la production indépendante, rien de moins.

8305   Ainsi, elle serait dégagée de devoir remplir des rapports qu'elle juge aussi inutiles que fastidieux pour répondre à des exigences réglementaires tatillonnes alors qu'elle pourrait concentrer ses efforts à développer son plan d'affaires, intégrer les multi plates-formes.

8306   À chaque fois que le Conseil a demandé à la requérante de l'aider à établir des paramètres ou des balises pour lui permettre de s'assurer qu'elle respecterait un minimum d'exigence quant au contenu canadien, la requérante répondait que la réglementation nuisait à l'élaboration de son plan d'affaires.

8307   La requérante aurait-elle oublié que l'entreprise pour laquelle elle souhaite un renouvellement de licence est une entreprise de radiodiffusion qui évolue dans un environnement réglementé puisqu'elle lui permet, effectivement, d'obtenir un permis pour tirer profit d'un bien public.

8308   Par exemple, lorsque le président de TVA déclare vouloir faire plus de production locale dans la région de Québec alors qu'il souhaite une diminution de ses obligations pour sa station régionale de Québec, il y a de quoi être confondu.

8309   Monsieur Dion explique que l'intégration des plates-formes internet et de téléphonie mobile compléteront l'offre de programmation pour cette région. On devrait donc voir là une augmentation de l'ordre de programmation régionale, selon lui.

8310   Soyons clairs; la requérante ne souhaite pas de réglementation de l'internet, pas plus de réglementation pour le contenu pour la téléphonie mobile, mais n'hésite pas à comptabiliser son contenu canadien sur toutes ses plates-formes pour affirmer qu'elle dépassera largement ce qu'elle fait actuellement pour la programmation de contenu canadien.

8311   Dans la même foulée, la requérante ne désire plus d'obligation envers les émissions prioritaires. Elle déclare vouloir répondre aux demandes de sa clientèle et la servir comme elle le veut, là où elle le veut et donne en exemple le succès de la Télé-réalité, Star Académie.

8312   Il est vrai que le public adore cette émission qui a obtenu trois millions de téléspectateurs lors de la finale. Il est aussi vrai que ce type d'émission porté par la convergence a permis d'attendre son paroxysme commercial.

8313   Par ailleurs, dans un article signé Jean-Marc Léger pour le Journal de Montréal, le 15 avril dernier, un sondage démontre que les téléspectateurs préfèrent à 40 pour cent regarder un téléroman contre 15 pour cent pour une émission de télé-réalité.

8314   Il nous apparaît donc évident que le public souhaite voir des émissions dramatiques à l'antenne des diffuseurs conventionnels comme TVA.

8315   Puis ces deux types d'émissions qui sont des émissions prioritaires, ne l'oublions pas, obtiennent un si grand succès et que les téléspectateurs en demandent, pourquoi TVA n'est-il pas prêt à s'engager à diffuser un nombre minimum d'émission de ces catégories?

8316   L'exigence de diffusion de huit heures d'émissions prioritaires par semaine, comme c'est le cas actuellement, ne devrait pas être un problème pour TVA.

8317   Et que dire des intentions de la requérante envers la production indépendante. On comprend que TVA va continuer de recourir à la production indépendante à la condition que les entreprises se conforment à ses exigences contractuelles.

8318   Selon monsieur Dion, les négociations avec les producteurs indépendants de façon individuelle se passent très bien et il confirme que TVA n'a nullement l'intention de signer une entente cadre avec l'APFTQ.

8319   Une telle désinvolture nous sidère. L'APFTQ qui représente plus de 130 entreprises de productions indépendantes n'est quand même pas négligeable lorsqu'on veut prendre le pouls de l'industrie de la production au Québec.

8320   Nos membres ont mandaté l'APFTQ pour négocier les termes d'une entente commerciale qui établit des grands principes d'exploitation des droits d'émission de télévision. Nous sommes loin d'une position syndicale qui exigerait la négociation de clause spécifique et contraignante qui ne laisserait aucune place à l'établissement d'un modèle économique d'exploitation de droit sur des multi plates-formes.

8321   D'ailleurs, nous avons joint à notre Mémoire une copie de la proposition que nous avons fait parvenir à TVA.

8322   Force m'est de constater, monsieur le président, qu'il est peu probable que nous arrivions à une entente avec le Réseau TVA au moment où le CRTC a annoncé son intention de voir la mise en place de telles ententes, le CRTC avait offert son intervention dans l'éventualité où de telles ententes n'étaient pas conclus.

8323   Si l'invitation et si l'occasion est encore possible, nous saisirons l'opportunité de demander au CRTC de nous assister dans les prochaines étapes de négociation.

8324   Nous sommes d'avis que la requérante n'a pas démontré qu'elle avait de sérieux problèmes financiers qui nécessiteraient une modification importante de ses conditions de licence. C'est pourquoi, comme l'a suggéré le Conseil, l'APFTQ appuie un renouvellement de la licence du Réseau TVA et de ses stations affiliées pour une année.

8325   Étant donné que la requérante s'est dite prête à accepter les mêmes conditions de licence pour la prochaine année, nous demandons au Conseil de reconduire sa licence aux mêmes conditions pour cette année de transition.

8326   L'APFTQ supporte également la proposition du Conseil d'évaluer les demandes de renouvellement de licence en fonction des groupes de propriétés de l'année prochaine. Peut-être que de cette façon le Conseil trouvera une solution structurale systémique pour assurer la viabilité de l'ensemble de l'industrie canadienne de la télévision et ce, à long terme.

8327   Je vous remercie et nous sommes disponibles pour répondre à vos questions.

8328   LE PRÉSIDENT: Merci pour vos commentaires qui sont très spécifiques et très clairs et je suis heureux de voir que vous avez eu la même réaction à la présentation de Télébec à nous que la demande pour souplesse qu'ils ont exprimé un intérêt bien prouvé ou établi pourquoi cette souplesse est nécessaire.

8329   Maintenant, dites-moi, vous ne dites pas les choses ce matin sur la question des redevances, en anglais "fee-for-carriage".

8330   Quelle est votre position sur cet item-là?

8331   Mme SAMSON: Comme nous l'avons exprimé dans le passé au Conseil, l'APFTQ n'était pas opposée à une redevance pour les stations conventionnelles. Nous étions allés jusqu'à... et compte tenu du fait qu'elle était demandée par les diffuseurs à cause de l'effritement ou de l'érosion des revenus publicitaires, nous avions suggéré qu'une telle redevance soit redistribuée parmi les diffuseurs et ce, de façon indirectement proportionnelle à leurs revenus publicitaires.

8332   Donc, les stations conventionnelles qui assumeraient une plus grosse perte de revenus publicitaires liés au contexte économique pourrait retirer une meilleure redevance d'abonnement que les stations dont les revenus publicitaires sont moins affectés.

8333   LE PRÉSIDENT: Et quelles seront les exigences que l'on va demander ou quelles sont les obligations qu'ils doivent conformer, selon votre quiproquo pour une redevance de ce type?

8334   Mme SAMSON: Essentiellement, on pense qu'à partir du moment où tout le monde reçoit des redevances, il est évident que tous les radiodiffuseurs devraient se sentir très à l'aise dans l'avenir de renouveler leur licence de radiodiffusion avec des conditions à tout le moins similaires à celles qu'elles ont connues au cours des récentes années puisque cette redevance viendrait éponger ou absorber la perte potentielle de revenus publicitaires.

8335   LE PRÉSIDENT: Et vous dites ici, là, sur la page 2 de votre présentation ce matin et je suis complètement d'accord, une des raisons étant que ces entreprises ont été incapables de démontrer leur engagement ferme envers une façon d'utiliser les tarifs pour améliorer le système canadien de radiodiffusion et, particulièrement, la programmation locale.

8336   Ce que je demande: quel type de ferme engagement croyez-vous... est-ce que vous avez une idée spécifique? Est-ce qu'on doit se concentrer sur la programmation locale, la programmation prioritaire ou partie ou partie ou quoi? Est-ce que vous avez des idées?

8337   Mme SAMSON: Bien, Suzanne, tu peux peut-être me...

8338   Mme D'AMOURS: Oui. Si on se réfère à ce que l'APFTQ avait déjà dit dans un mémoire antérieur où le CRTC avait demandé l'avis des différents intervenants de l'industrie, à savoir si on devait accorder des redevances aux diffuseurs over-the-air, là, traditionnels.

8339   LE PRÉSIDENT: Oui.

8340   Mme D'AMOURS: L'APFTQ s'était démontrée intéressée à ce que le CRTC reconnaisse qu'il y a une possibilité de recevoir des redevances, pour un, de façon inversement proportionnelle, comme l'expliquait Claire tout à l'heure, mais que ces redevances-là devaient avoir un impact sur la programmation canadienne, la programmation locale aussi.

8341   Et la programmation locale, on n'avait pas à ce moment-là indiqué comment devait être reversées ces redevances-là parce qu'on parlait de verser des redevances à la tête d'un réseau qui, elle, devait retourner de ces redevances-là à la programmation locale.

8342   Cela dit, il est évident que quand les producteurs ont analysé la possibilité pour eux, pour que le Conseil accorde des redevances, c'était entendu que ça devait avoir un impact directe sur la programmation canadienne, aussi bien locale que nationale.

8343   LE PRÉSIDENT: Une de nos suggestions c'est... une de nos créations c'est ce programme d'amélioration de programmation locale et nous avons dit une façon, nous allons fixer une façon des revenus et la question que nous avons posée: est-ce que c'est suffisant pour cette année de crise ou est-ce qu'on devrait augmenter? Quelle est votre position?

8344   Mme SAMSON: Honnêtement, de ce que j'ai lu de la proposition de la suggestion du Conseil, c'est du moins un pas dans la bonne direction pour la programmation locale, pour les gens qui vivent en région que le système d'attribution ne soit basé que... que les sommes soient accordées en fonction de la part de marché n'est peut-être pas nécessairement le modèle que nous préférerions.

8345   Une station ou une tête de réseau qui souhaite offrir un contenu local plus important dans un marché qu'il opère ou dans un marché dans lequel il a une station affiliée devrait pouvoir le faire, indépendamment de quelle part de marché... à partir de quelle part de marché il part.

8346   LE PRÉSIDENT: O.k. Louise, tu as des questions?

8347   CONSEILLÈRE POIRIER: Oui. Merci, monsieur le président. Bonjour.

8348   J'espère que votre congrès s'est bien déroulé ici à Gatineau?

8349   Mme SAMSON: Oui, il s'est terminé hier soir, très bien passé. merci.

8350   CONSEILLÈRE POIRIER: Et on vous remercie d'être là. Donc, vous avez les idées fraîches de vos membres et c'est de ça dont vous voulez faire état aujourd'hui, pour compléter sûrement le document qui a été présenté.

8351   On va revenir au sujet clé qui vous intéresse; c'est-à-dire la production indépendante. Vous avez bien suivi, je pense, la position de TVA là-dessus. Vous avez ici répété et je pense que vous souhaitez que le Conseil joue un rôle prépondérant dans cette négociation-là.

8352   J'aimerais que vous précisiez davantage ce que vous souhaitez de la part du Conseil?

8353   Mme SAMSON: Nous avons acheminé aux membres du Conseil une copie de la proposition de grands principes que nous avons fait parvenir à TVA. Vous avez vu la réaction de TVA la semaine dernière; ils ne sont pas intéressés.

8354   Leur phrase, je pense, si je ne m'abuse, c'était: Ça n'arrivera pas. Alors, si la décision c'est que ça n'arrivera pas, peut-être que si le Conseil les encourageait à une rencontre... dans un premier temps à une rencontre conjointe, ce serait peut-être plus difficile de dire que ça n'arrivera pas et on pourrait partir de là parce que, de toute évidence, ça n'arrivera pas. Si le Conseil ne s'en même pas, ça n'arrivera pas.

8355   CONSEILLÈRE POIRIER: Je vous avoue que je suis un peu surprise parce que le Groupe TVA nous a dit avoir de bonnes relations avec les producteurs et je les cite ici. Ils disent: les producteurs s'en satisfont. Il faisait référence à leurs termes de références.

8356   Et ils nous disaient que vous sembliez... les producteurs semblent s'en satisfaire puisque nous ne rencontrons aucune difficulté à conclure nos ententes.

8357   Est-ce qu'il s'est passé quelque chose entre le moment où ils sont venus nous voir et votre position actuelle?

8358   Mme SAMSON: Pas que je sache. Il est évident qu'ils réussissent à conclure des ententes. Je n'ai pas accès aux différentes ententes nécessairement spécifiques qu'ils concluent.

8359   Nous ne sommes pas les agents traditionnellement de négociation des producteurs. Chaque maison de production est une entreprise indépendante et gère son plan d'affaires comme elle le veut.

8360   On sait que c'est parfois difficile. Certains producteurs se débrouillent mieux que d'autres, mais il n'en demeure pas moins que les producteurs se voient imposer un modèle d'affaires et si ça ne fait pas, bien, il n'y en a pas.

8361   CONSEILLÈRE POIRIER: Alors, j'aimerais ça que vous élaboriez davantage sur votre projet de modalité d'entente commerciale?

8362   Mme SAMSON: Ce sont des principes très larges qui, dans les faits, établissent quelques principes fondamentaux pour nous.

8363   Tout d'abord, le fait que le producteur conserve en tout temps, peu importe la ou les licences que le diffuseur veut acquérir, que le producteur conserve toujours le copyright de son émission, ce qui est un problème dans l'approche... de toute évidence, dans l'approche commerciale de TVA puisque celle-ci considère que la licence qu'elle paie n'est plus une licence, c'est un investissement et qu'elle détient donc, par conséquent, une partie de la propriété.

8364   Donc, nous souhaitons que soit établi le fait que les producteurs détiennent le copyright de leurs production.

8365   Deuxièmement, nous souhaitions par principe que chaque application ou chaque licence, chaque utilisation de l'oeuvre que veut faire un diffuseur, doit faire l'objet d'une acquisition distincte.

8366   On ne peut pas simplement rencontrer la licence seuil du Fonds canadien de télévision pour s'accaparer l'exploitation totale, complète et illimitée et advitam aeternam d'une production.

8367   CONSEILLÈRE POIRIER: À quel niveau est-ce que ça s'éloigne des termes de référence qu'eux ont proposés, que le Réseau TVA a proposés?

8368   Est-ce qu'il n'y a pas du recoupement dans ce qu'ils ont proposé en général à leurs producteurs privés et ce que vous demandez?

8369   Mme SAMSON: Dans les modèles que TVA nous a proposés comme étant les grands principes ou la base des contrats qu'ils signent avec les producteurs indépendants, nous sommes à des années-lumière. TVA considère que sa licence n'est pas une licence. C'est l'acquisition d'une partie de la propriété.

8370   CONSEILLÈRE POIRIER: Et peut-être une dernière question concernant ce sujet-là. Dans votre document, et on en a très peu parlé dans cette audience-ci, pourtant on en avait beaucoup parlé à l'audience sur les nouveaux médias, c'était le Use it or Lose it, O.k. Ça fait référence bien sûr a une durée d'exploitation des droits.

8371   Mme SAMSON: Oui.

8372   CONSEILLÈRE POIRIER: Et dans votre document il y a un endroit ou je vois la capacité d'exploiter à court terme. C'est à ça que vous faites référence.

8373   Mme SAMSON: Exactement, oui.

8374   CONSEILLÈRE POIRIER: Et vous faites référence à court terme, vous voulez dire?

8375   Mme SAMSON: On ne veut pas limiter. On a essayé d'être le moins contraignant possible et que le diffuseur et le producteur déterminent dans chaque cas et chaque programme étant spécifique, quel est le court terme qui sera raisonnable dans le cas d'une dramatique versus un variété ou...

8376   CONSEILLÈRE POIRIER: Il y a de l'ouverture de ce côté-là pour vous?

8377   Mme SAMSON: Il y a de l'ouverture de ce côté-là et nous ne sommes... nous n'avons jamais pris la position qu'à partir de maintenant le Réseau TVA allait venir négocier avec l'APFTQ les contrats spécifiques et individuels qu'ils négocient normalement avec nos membres.

8378   Loin de nous l'idée de nous glisser dans cette relation-là.

8379   CONSEILLÈRE POIRIER: Avant d'aborder d'autres sujets, je voudrais juste clarifier un point qui touche CBC et la SRC. Nous les avons reçus mercredi dernier et je veux juste citer monsieur Stursberd qui dit que : "As far as terms of trade are concerned, we have some conversion with the film and television producers about this and where we are right now is that we are doing a joint study with them that we have commissioned together, to be able to understand better the value of the various kinds of rights that are under discussion."

8380   Est-ce que vous faites partie de cette discussion-là? Est-ce que c'est une étude pour les anglais et les français ou c'est vraiment seulement une étude pour le milieu anglophone?

8381   Mme SAMSON: C'est une étude pour le milieu anglophone. L'APFTQ participe aux rencontres et aux discussions qui ont lieu entre le CFPTA et les diffuseurs anglophones du pays puisque les membres de l'APFTQ produisent également pour les diffuseurs canadiens-anglais au pays.

8382   Donc, nous collaborons avec le CFPTA. Je vous dirais que la dynamique entre l'approche du CFTPA et celle de l'APFTQ est complètement différente, ce sont des marchés totalement distincts et les processus d'affaires... d'ailleurs, d'emblée, je vous dirais que les processus d'affaires qu'ont adoptés la CBC sont totalement différents de l'approche d'affaires qu'a adoptée la Société Radio-Canada en français.

8383   Donc, l'étude qui est en route et qui se fait, c'est pour les émissions anglophones. Nous avons des discussions et nous sommes très avancés dans notre processus avec le SRC à Montréal et nous devrions réussir à nous entendre dans les prochaines semaines. Mais nous n'avons pas du tout la même approche.

8384   Le CFTPA a une approche beaucoup plus précise dans la façon d'acquérir les émissions avec les licences, les durées des licences, et cetera, et cetera. Nous ne sommes pas allés jusque là avec les diffuseurs francophones.

8385   CONSEILLÈRE POIRIER: Donc, est-ce que cette étude-là va être rendue publique? Le savez-vous?

8386   MME SAMSON: Je ne sais pas si elle sera rendue publique, mais j'imagine qu'on pourra la partager entre les gens qui l'ont financée, finalement, et qui vont la faire. Oui, nous y aurons accès certainement.

8387   CONSEILLÈRE POIRIER: Et vous êtes donc en accord avec ce que monsieur Lafrance a dit, que l'APFTQ, les discussions sont très positives?

8388   MME SAMSON: Ça va très bien. Oui.

8389   CONSEILLÈRE POIRIER: Bon. On continue maintenant avec les émissions prioritaires en grande heure d'écoute. Et revenons à TVA, si vous voulez.

8390   TVA, bon, vous avez bien résumé la position de TVA. TVA dépasse considérablement les attentes et les obligations. Ils veulent réduire, comme vous le manifestez aussi aujourd'hui, le temps passé par leur personnel à remplir des documents. Puis, ils nous disent qu'ils ne peuvent pas ne pas mettre du bon contenu canadien parce que c'est ce que son public demande. De votre côté, vous demandez le statu quo.

8391   Alors j'aimerais peut-être que vous élaboriez sur le fait que pourquoi on ne leur permettrait pas pendant un an de ne pas avoir des exigences en contenu prioritaire, en émissions prioritaires, comme on le faisait et de voir, après coup, s'ils livrent la marchandise malgré tout en leur laissant la latitude qu'ils demandent.

8392   MME SAMSON: Vous savez, madame, tout ça est un peu théorique quand on pense qu'on est rendu au mois de mai et que les réseaux de télévision, à partir de la semaine prochaine et pour le prochain mois, vont être en train de faire toutes les représentations nécessaires auprès des annonceurs pour vendre la publicité de leur grille de programmation de l'automne prochain.

8393   Donc, ça veut dire que la grille de l'automne prochain, dans les faits, elle est faite.

8394   CONSEILLÈRE POIRIER: En supposant -- d'abord on va faire une hypothèse. En supposant qu'on leur accorde une licence de trois ans ou de sept ans, tel qu'ils l'ont évoqué, quelle serait votre réaction, à ce moment-là, à ma question?

8395   MME SAMSON: Bien, nous pensons que tel qu'ils l'ont évoqué, le CRTC doit absolument maintenir les conditions de licence sur le contenu des émissions canadiennes, des émissions prioritaires et de la production indépendante.

8396   Quand on regarde la position... Puis je l'ai dit un peu, tantôt, TVA nous dit : Nos obligations... On va se servir d'Internet pour nous acquitter de nos conditions de licence, mais n'allez pas réglementer l'Internet.

8397   Ensuite, on nous dit, il faut qu'il y ait... Il y a urgence en la demeure puisque nos revenus publicitaires partent de notre exploitation traditionnelle vers l'Internet. Or, quand on arrive dans la réalité pour s'asseoir avec eux et discuter objectivement d'un partage de revenus sur les exploitations sur l'Internet, là, on se fait répondre : Il n'y en a pas, de revenus, sur les plateformes Internet.

8398   Alors, ou bien les revenus s'en vont sur l'Internet ou il n'y en a pas, mais ça peut difficilement être les deux. Et ce que ça nous fait dire, madame, c'est : Il y a donc urgence à ce que le CRTC réglemente ce qui servira ultimement de lieu et de place où on s'acquittera de ces obligations réglementaires. Et la question qu'il faut se poser c'est que si les revenus publicitaires ne vont pas bien, c'est curieux, c'est le bout de leur industrie qui n'est pas réglementé.

8399   Alors, est-ce que d'observer des diffuseurs qui vont recréer un modèle de diffusion sur des nouvelles plateformes non-réglementées et qui nous disent que jusqu'à maintenant leurs revenus traditionnels s'en vont là, ils ne sont pas capables de les récupérer.

8400   Est-ce que ce sont les bonnes personnes qui gèrent cet avenir si proche de nous? Est-ce que le plan d'affaires est si fort que ça?

8401   Si la projection qu'ils font c'est que tout leur argent s'en va là, que c'est ce qu'ils vont exploiter dans l'avenir, on va se retrouver dans cinq ans avec une industrie parallèle non-réglementée et une industrie réglementée qui va être devenue une peau de chagrin, où on diffusera ce qui est...

8402   Alors, le système, actuellement, tel qu'il est réglementé, a donné des résultats formidables. Nombre pays regardent le système canadien avec beaucoup d'envie. Est-ce qu'on sera témoin d'un système qui va s'appauvrir, muter vers un autre environnement ou un autre support, où à ce moment-là, l'expression de ce que nous sommes sera disparue.

8403   Et honnêtement, la démonstration n'a pas été faite, cette semaine, ou je n'ai pas tout lu (j'admets ne pas avoir tout vu, mais je pensais avoir tout lu) cette business-là ne va pas mal. Elle va bien. Je regarde les BAI des diffuseurs et des entreprises de distribution; je vous assure que s'il y a des maisons de production qui pouvaient afficher de tels résultats financiers, ce serait assez formidable. Peut-être que les redevances devraient aller aux producteurs.

--- Laughter

8404   MME SAMSON: C'est peut-être nous, les prochains qui vont vous demander des redevances parce qu'on n'y arrivera plus.

8405   CONSEILLÈRE POIRIER: On mettra ça sur la table en temps et lieu.

8406   On va discuter de --

8407   MME DOUCET: J'aimerais juste ajouter un petit point.

8408   CONSEILLÈRE POIRIER: Oui? Oui.

8409   MME DOUCET: Pour répondre à la question de « Est-ce qu'on devrait les laisser sans réglementation? » si on regarde le passé...

8410   Moi, je trouverais ça, en tout cas, très inquiétant. Parce que si on regarde le passé, déjà aujourd'hui, ils ont un certain nombre d'obligations à remplir pour avoir droit à la licence et ils sont... certaines obligations ne sont pas rencontrées, ne sont pas remplies. Et tout ce qu'ils font, c'est d'essayer d'expliquer pourquoi elles ne sont pas remplies et de demander de ne plus avoir ces conditions.

8411   Alors, moi, je trouverais ça extrêmement inquiétant si on enlève des obligations pour -- en plus, pour trois ou sept ans; c'est très long...

8412   Et puis, ce qui va se passer, c'est ça : ils vont arriver au bout de trois ou sept ans, en train de ne pas être pénalisés, de ne pas avoir rencontré les obligations et de juste expliquer pourquoi ce n'est pas rencontré.

8413   Parce que là, ils ne veulent pas d'obligation formelle, mais une obligation morale, en disant « Faites-nous confiance, on va le faire. » Et ça ne se fera pas.

8414   Alors, je trouve ça inquiétant.

8415   MME SAMSON: Je dois dire que nous avons été assez choqués de la réplique de TVA à l'endroit de la production pour les francophones hors Québec. Et je me sens à l'aise d'en parler, les producteurs hors Québec ne sont pas membres de l'APFTQ.

8416   Cependant, nous avions souvenir que le fait d'obtenir une licence nationale de radiodiffusion n'était pas une imposition du CRTC. Ce n'est pas une punition que le CRTC leur avait donnée, c'était en réponse à une demande de la requérante d'obtenir une licence nationale et qu'ils s'étaient engagés, par conséquent, à y contribuer quelque chose, à cette licence nationale-là.

8417   Il semblait, en tout cas, assez équitable et correct que quelqu'un puisse avoir une licence nationale (donc, la possibilité d'acquérir des propriétés nationales, commerciales, rentables et importantes) tout en retournant quelque chose à cette communauté-là.

8418   Alors là, on regarde et leur demande, c'est de la retirer. Alors, on veut garder le bénéfice potentiel qui peut découler d'une licence nationale, mais le retour pour cet accès à une propriété -- et je le répète, à un bien public -- disparaîtrait.

8419   Pourquoi? Dans le contexte actuel où leurs affaires vont bien, tout va bien. Pourquoi est-ce qu'on dirait « Il n'y a plus de contraintes, il n'y a plus de responsabilités »?

8420   CONSEILLÈRE POIRIER: Du côté de la production indépendante, on a entendu plusieurs fois TVA nous répéter -- et je cite monsieur Dion, concernant la règle du 75 pour-cent, qu'ils n'ont pas le monopole des bonnes idées et tant que les producteurs indépendants vont leur arriver avec de bonnes idées, ils vont les prendre, ils vont les utiliser, parce qu'ils sont bien conscients qu'ils ne peuvent pas, bien sûr, reproduire toutes ces bonnes émissions-là sans l'aide des producteurs indépendants.

8421   Alors, ils veulent aussi, de leur côté, faire en sorte que le Groupe TVA ne soit plus un simple diffuseur. Ils veulent participer à la création et ils veulent participer à la diffusion avec, entre autres, les groupes TVA Création et TVA Productions.

8422   J'aimerais vous entendre sur cette vocation et cette orientation qu'ils veulent prendre.

8423   MME SAMSON: Bien, TVA a toujours été un producteur et le sera pendant probablement encore très longtemps. Naturellement, les producteurs indépendants, ils vont continuer à y faire appel, dans la mesure où ceux-ci travailleront dans les conditions commerciales imposées par TVA (on s'entend, ils ont été clairs à ce chapitre-là aussi).

8424   Maintenant, ils ne veulent pas de conditions liées à la production indépendante. Et TVA, son plan d'affaires a une grande qualité : il est clair. Et que... il est évident que tout ce qui pourrait venir freiner la pleine dominance de TVA dans le marché québécois mérite d'être éliminé.

8425   Alors, c'est l'APFTQ qui est obsolète, c'est le CRTC qui est « tatillonneux » et dont la réglementation est obsolète, c'est le Fonds canadien de télévision qui n'est pas « tailor made » à leurs besoins. Donc, il faut qu'on l'élimine et qu'on fasse autre chose.

8426   C'est aussi les chaînes spécialisées dont ils ne sont pas propriétaires, puisque s'il y avait un vrai besoin pour ces chaînes-là, ils l'offriraient à leurs abonnés sans aucun problème. Alors, tout ce qui peut ralentir ou limiter la totale dominance doit être éliminé.

8427   Je dois dire que depuis que les audiences ont commencé, je vois que je me sens un peu moins « seule de ma gang ». Je vois que nous ne sommes pas les seuls à être éliminés, mais ce n'est pas rassurant. Et je dois vous dire que c'est excessivement triste, pour des gens qui ont ouvré pendant des années dans cette industrie-là, de voir que dans un marché aussi dynamique que le Québec, qu'un leader comme TVA soit perçu par tout le monde, sauf lui, comme un prédateur.

8428   CONSEILLÈRE POIRIER: Dernier sujet que je souhaitais aborder, c'est la production indépendante à Québec. Vous en avez parlé dans votre mémoire écrit. Peut-être nous expliquer votre position, c'est-à-dire de maintenir à 21 heures la production d'heures locales et nous expliquer quelle est la problématique qu'il y aurait entre TVA et la production indépendante, à Québec de façon plus spécifique.

8429   MME SAMSON: Nous croyons que TVA est capable de maintenir dans la région de Québec sa production locale. Il n'y a pas de raison évidente pour diminuer ses responsabilités dans ce marché-là.

8430   On pense qu'à Québec il y a là un potentiel et une capacité de produire par l'industrie indépendante, que TVA n'utilise pas à son maximum et à laquelle il pourrait faire appel de façon plus continue, pour des émissions qui sont et produites à Québec, qui pourraient être diffusées à Québec ou alors, sur l'ensemble de leur réseau.

8431   CONSEILLÈRE POIRIER: Alors, vous ne souscrivez pas à leur approche qui veut de diminuer le nombre d'heures, mais de faire en sorte d'être un peu plus visible sur l'ensemble des plateformes, de donner à Québec plus de visibilité, plutôt, sur l'ensemble des plateformes. Ils ont parlé de l'Internet, ils ont parlé de téléphonie, ils ont parlé de télé spécialisée et ainsi de suite.

8432   MME SAMSON: Il n'y a rien aujourd'hui qui les empêche de faire ça. Et qui va mesurer leur contribution à Québec sur la téléphonie et sur l'Internet? Qui va juger, ultimement, si c'est le bon contenu, si c'est adéquat; est-ce que ça rencontre les besoins? Qui sera en mesure d'évaluer tout ça... les auditoires?

8433   Qui va nous dire que ça rejoint effectivement le public de Québec, puisqu'en même temps, ils ne souhaitent surtout pas une réglementation sur ce qui sera la plateforme de diffusion de l'avenir. Alors, nous sommes assez sceptiques, à cet effet.

8434   CONSEILLÈRE POIRIER: Je vous remercie, Monsieur le Président. J'ai terminé.

8435   LE PRÉSIDENT: Merci.

8436   Michel, tu as des questions?

8437   CONSEILLER ARPIN: Merci.

8438   Dans la même foulée, de la production indépendante -- pas juste à Québec, mais dans les régions -- monsieur Dion, lors de leur comparution, nous a dit que ce n'était pas l'adresse du producteur indépendant qui était le déclencheur, c'était le concept et l'habilité du producteur de le réaliser.

8439   Donc, il voulait être libéré de quelque engagement ou attente que ce soit, parce que ce n'était pas des conditions de licence, mais... C'était soit des engagements ou des attentes à ce que TVA fasse affaire avec des producteurs indépendants autres que ceux qui ont pignon sur rue à Montréal.

8440   Je présume que les producteurs indépendants qui sont à Sherbrooke ou à Québec ou à Chicoutimi s'il y en a sont membres de l'APFTQ?

8441   MME SAMSON: Oui. Ils sont membres de l'APFTQ, règle générale. Il est évident, Monsieur le Vice-président, que quand on est un producteur indépendant, à Québec, à Sherbrooke, à Trois-Rivières ou à Matane ou à Chicoutimi, si la station locale, qui est opérée par une tête de réseau située à Montréal, n'a aucun budget d'acquisition, aucune facilités de production avec lesquelles il peut travailler, aucun investissement local...

8442   Imaginez-vous ce que c'est, pour un petit producteur indépendant de Rimouski, d'obtenir un rendez-vous avec le directeur ou la directrice général(e) ou la vice-présidence des programmes d'un réseau comme TVA à Montréal ou Radio-Canada à Montréal. C'est presque impossible; et ça rend...

8443   De ne venir faire... Simplement de venir faire sa présentation à Montréal, ça met en péril le financement de son émission, parce que ça va souvent lui coûter plus cher ses frais de représentation pour rencontrer quelqu'un qui va peut-être lui donner un créneau que ce qu'il va retirer comme honoraires de production dans la production qu'il va réussir à vendre.

8444   Donc, l'implication locale, ce n'est pas que pour le producteur indépendant local, c'est aussi pour les gens qui opèrent, qui gèrent, et qui sont sensés être... qui sont les représentants de la tête de réseau dans ces régions-là. Ces gens-là se retrouvent avec des postes de directeur général de station locale.

8445   Et puis, à part distribuer le courrier le matin, il n'y a plus beaucoup d'implication de la région. Et donc, essentiellement, s'il y a de la production qui s'acquiert d'un point de vue local, il est évident que ça contribue au dynamisme puis à la présence de la station; ce n'est pas contraire.

8446   CONSEILLER ARPIN: Mais ça, ça serait, de toute façon, tous réseaux confondus?

8447   MME SAMSON: Tous réseaux confondus.

8448   CONSEILLER ARPIN: Ce n'est pas spécifique à...

8449   MME SAMSON: À TVA, non.

8450   CONSEILLER ARPIN: ...à TVA?

8451   MME SAMSON: C'est tous réseaux confondus.

8452   MME DOUCET: Non. Puis je pense que pour la diversité, on soumet que la production indépendante permet la diversité de la création, des idées, des voix. Je pense que ça aussi, ça en fait partie, qu'il y ait des endroits différents et que tout ne soit pas concentré dans les centres.

8453   CONSEILLER ARPIN: Oui. Pour revenir aussi sur la présence de TVA à l'extérieur du Québec, comme vous avez vous-mêmes... de votre propre chef, par un élan du coeur, décidé de nous en parler, malgré le fait que les producteurs ne sont pas membres de l'APFTQ (ils ont leur propre petite association de producteurs hors Québec), qu'ils ne sont pas... ils sont participants par écrit à l'audience, mais pas... ils n'ont pas demandé à comparaître.

8454   Premièrement, TVA nous dit que comme BBM ne mesure pas l'écoute hors Québec, il n'a pas réussi à monnayer sa présence à l'extérieur du Québec. Et donc, tous les coûts de la présence nationale, du réseau national sont arrivés... ont des coûts nets sans jamais... sans autre compensation. Et c'est pour ça qu'il nous dit : Bon, le Conseil, même, avait une attente qu'on réinvestisse 43 pour-cent des revenus, mais 43 pour-cent de zéro, ça n'a pas fait de gros investissements.

8455   Et c'est pour ça qu'il nous dit : Bon, bien, on veut être libéré de la production de six épisodes annuels d'émissions spéciales, de l'émission hebdomadaire, pour créer un bureau -- pas DES bureaux, mais créer un bureau -- régional, avec journalistes et tout et que les coûts qui sont associés à un bureau de cette nature sont même supérieurs à ce que ça lui coûte présentement.

8456   Est-ce que vous êtes familiers avec les coûts de production, ces choses-là? Donc, est-ce que vous pensez... Je ne sais pas si vous pouvez partager une réflexion avec nous, là-dessus.

8457   MME SAMSON: Je pense, Monsieur le Vice-président, que vous l'avez eue, la réflexion, avant nous.

8458   Si leur demande s'est avérée un échec financier, est-ce qu'ils ont demandé de ne plus être un réseau national? Non. On va garder la qualité et les avantages du réseau national et le potentiel que ça peut représenter pour des propriétés nationales, mais on va enlever la responsabilité que ça incombe.

8459   Honnêtement, Monsieur le Vice-président, je ne sais pas ce que ça peut vouloir dire d'avoir un bureau régional quelque part. Ça va contribuer quoi, à l'ensemble des francophones hors Québec? Je l'ignore, je n'ai pas vu... je n'ai pas eu l'opportunité d'entendre leur présentation au complet; c'est peut-être extraordinaire, comme idée...

8460   CONSEILLER ARPIN: Bien, ils disaient... Comme on a un bureau de nouvelles à Washington et un à Paris, on pourrait en avoir un à Edmonton qui aurait la même fonction.

8461   MME SAMSON: Un correspondant...

8462   CONSEILLER ARPIN: Un correspondant.

8463   MME SAMSON: ...francophone hors Québec?

8464   CONSEILLER ARPIN: Qui aurait comme mandat de... Et qui serait aussi, pas uniquement à l'antenne de TVA, mais à celle de LCN et sur toutes les plateformes.

8465   MME SAMSON: Et la téléphonie et l'Internet...

8466   CONSEILLER ARPIN: Oui, oui... oui.

8467   MME SAMSON: ...que le Conseil ne réglementera jamais?

8468   CONSEILLER ARPIN: C'est ça.

8469   MME SAMSON: C'est ça.

8470   CONSEILLER ARPIN: Dernière question, et ça... TVA nous dit : Éliminez les obligations reliées aux émissions prioritaires parce que, effectivement, ça évolue dans le temps. Et l'importance des émissions prioritaires ne sont pas les mêmes.

8471   Et malheureusement, on a entendu les documentaristes parler, juste devant vous, disant que les réseaux qui ont été des grands... qui ont même été ceux qui ont demandé que les documentaires soient définis comme émissions prioritaires, aujourd'hui n'en commandent plus parce qu'effectivement, le documentaire, il s'est retrouvé beaucoup à la télévision spécialisée. Et donc, TVA nous dit : Ces choses-là ont été conçues à l'orée de l'an 2000, ça évolue, c'est morphologique.

8472   Si le Conseil voulait dire, bien, on va maintenir un concept d'émissions prioritaires, mais est-ce qu'il y aurait d'autres genres qui seraient aujourd'hui, dix ans plus tard, qui devraient être considérés comme des genres qui sont prioritaires, autres que la dramatique, le documentaire, les émissions de variétés, de musique et pour enfants?

8473   MME SAMSON: Rapidement, comme ça, Monsieur le Vice-président, je vous dirais : possiblement les émissions jeunesse. Ce sont nos jeunes qui sont sur l'Internet et qui évoluent vers les autres plateformes. Peut-être que la télévision aurait intérêt à aussi s'occuper un peu de cette partie de l'auditoire-là.

8474   Les documentaires font partie des catégories des émissions prioritaires, que je sache -- et Suzanne, tu me corriges? -- je pense que TVA n'en diffuse pas ou peu...

8475   CONSEILLER ARPIN: Mais je veux dire les mêmes... Ils ont eux aussi plutôt dit que CTV n'en diffusait pas, Canwest n'en diffusait pas, TQS n'en diffuse pas. Radio-Canada en diffuse un, une fois de temps en temps, CBC pareil...

8476   MME D'AMOURS: Effectivement, si je peux compléter l'information, c'est que quand on a regardé effectivement toutes les chaînes conventionnelles...

8477   Radio-Canada, je ne dirais pas ça; Radio-Canada a encore des émissions documentaires uniques, mais bien sûr, il y a certains genres qui ont été amenés vers les canaux spécialisés.

8478   Si on regarde par exemple, il y a sept ans, on peut dire que les télévisions conventionnelles programmaient des émissions pour enfants. Moins au Québec, parce que la publicité n'est pas permise, mais au Canada anglais, il y en avait; CTV, Global en avaient. Maintenant il n'y en a plus, c'est fini, c'est terminé.

8479   Les documentaires, effectivement, c'est un peu plus difficile. Moi, je ne les ai pas regardés individuellement, pour les chaînes de langue anglaise. Mais pour savoir quelles sont les émissions de documentaires qui sont considérées comme prioritaires et qui sont calculées comme émissions prioritaires, c'est très difficile de le savoir parce qu'il faut regarder toutes les programmations annuelles par saison pour déterminer s'il s'agit d'un documentaire de catégorie prioritaire. Est-ce qu'il est... bon, en heure de grande écoute, et cetera....?

8480   Alors, c'est sûr que pour TVA, il n'y en avait pas. J'ai regardé toutes les émissions prioritaires. Mais ces émissions de documentaires-là ont toujours été considérées comme étant des documentaires... c'était surtout des documentaire de point de vue. C'est pour ça qu'on avait considéré que ces émissions-là étaient sous-représentées à l'antenne des radiodiffuseurs. On appelle ça maintenant des émissions prioritaires, mais c'était des émissions sous-représentées.

8481   Et je pense que même du côté anglais, la dramatique canadienne reste encore une catégorie sous-représentée. Bon, c'est sûr que du côté du Québec, pour les émissions de langue française, ce n'est pas des catégories sous-représentées. Cela dit, on s'aperçoit de plus en plus qu'il y a une érosion des grosses séries, qui sont devenues des moyennes séries, qui sont devenues des téléromans.

8482   Et maintenant, on voit de plus en plus à l'antenne des diffuseurs, aussi bien conventionnels, privés que publics, un apport nouveau de productions américaines qui sont des dramatiques et des séries dramatiques, pour toutes les raisons qu'on connaît. Et ça coûte un peu moins cher que des émission canadienne.

8483   Alors, la question que vous posez à savoir est-ce qu'il y a d'autres émissions qui devraient être considérées comme prioritaires, je pense qu'il n'a pas été démontré que d'enlever des émissions prioritaires aurait un impact positif sur la production canadienne qu'on veut voir à notre antenne et qui permet l'accès des créateurs au système de radiodiffusion.

8484   C'est bien évident qu'on pourrait décider de mettre que des émissions de télé-réalité. C'est en demande, les gens aiment ça et les écoutent. Les émissions de télé-réalité, qui sont parfois très bonnes, ne font pas appel à la création, ne font pas appel non plus à des comédiens, à des acteurs, ne font pas appel à des auteurs. Alors, à ce moment-là, on pourrait décider que ce n'est que ce genre d'émissions-là.

8485   Il y a une protection, huit heures, et qui est considérée en plus, qui est plus facile à remplir, compte tenu que quand c'est de la dramatique, on a du 150 pour-cent. Je pense que ça reste encore très dangereux d'enlever ces émissions prioritaires, d'exiger qu'il y ait un minimum d'émissions prioritaires.

8486   Mais le documentaire, effectivement, est un problème.

8487   LE PRÉSIDENT: Madame, je crois que vous avez répondu à la question. S'il vous plaît, soyons précis.

8488   CONSEILLER ARPIN: Bien, merci pour ce...

8489   Et puis en terminant... et puis je ne demanderai même pas de réponse, mais je note dans votre présentation en page 7 que vous citez Jean-Marc Léger pour un sondage qui dit que 40 pour-cent des téléspectateurs préfèrent les téléromans contre 15 pour-cent pour les émissions de télé-réalité. Mais Jean-Marc Léger est au Conseil d'administration de TVA; j'espère qu'il partage ses résultats de sondage avec les membres du Conseil.

8490   MME SAMSON: Je ne sais pas, monsieur le Président. Je n'ai pas vu son contrat d'acquisition des résultats de ses recherches.

--- Laughter

8491   CONSEILLER ARPIN: Merci.

8492   MME SAMSON: merci.

8493   LE PRÉSIDENT: Madame Samson, pendant que vous avez parlé avec mes collègues, j'ai regardé l'annexe que vous nous avez présentée. À première vue, mais ça semble assez raisonnable. Qu'est-ce qu'a été la réaction de TQS et SRC?

8494   MME SAMSON: Radio-Canada, ça va très bien. TQS, nous avons amorcé une première discussion avec eux. Et j'ai convenu, pas plus tard qu'hier après-midi, avec monsieur Rémillard, qui était présent à notre congrès, qu'on se verrait en début de semaine prochaine. Nous allons discuter de tout ça, nous allons discuter des principes.

8495   Je ne prévois pas de difficulté, aucune, ni avec Radio-Canada ni avec TQS.

8496   LE PRÉSIDENT: Et si je comprends bien, TVA n'est pas préparé à avoir des discussions avec vous sur la base de cette annexe?

8497   MME SAMSON: Aux dernières nouvelles, Monsieur le Président -- et je les ai, mes dernières nouvelles, je les tiens d'ici, où il a dit la semaine dernière : Ça n'arrivera pas.

8498   LE PRÉSIDENT: O.K. Maintenant, si je la regarde, la première page vous avez des principes principaux. Et par exemple, à la clause 9.10 :

« La société de production indépendante peut consentir à un droit de première négociation, mais en aucun cas elle n'accordera un droit de dernier refus. » (Tel que lu)

8499   Étant donné que cet accord est signé, est-ce qu'un membre de votre association pourrait faire une exception à cette clause-là ou ça va être obligatoire dans tous les contrats que vos membres font avec TVA, disons?

8500   MME SAMSON: Je vous dirais, Monsieur le Président, que nous souhaitons que ces principes-là inspirent les deux parties, dans l'élaboration des ententes et des contrats qu'ils vont faire.

8501   Chaque membre de l'APFTQ est une entité qui est libre de ses actions et nous ne serons pas la police des producteurs. Un homme d'affaires qui voudra vendre ou accorder un tel privilège à une entreprise de radiodiffusion pourra toujours le faire et nous n'exigerons pas de nos membres qu'ils nous déposent leurs contrats pour que nous les bénissions. Puis on peut imaginer la paperasse que ça créerait...

8502   Alors, non. Ça n'est pas le cas, mais on souhaite vraiment que cela inspire et on souhaite aussi discuter avec les diffuseurs, dans l'éventualité où un producteur se sentait forcé à aller dans une voie contraire aux principes émis dans l'entente, que ce producteur-là puisse se sentir à l'aise de faire appel à l'APFTQ pour engager des discussions avec le diffuseur en question pour tenter de trouver des pistes de solution. On veut bien être un peu médiateurs, mais on ne sera pas négociateurs des contrats individuels.

8503   MME DOUCET: Je pense qu'il est important de rappeler la perspective qui était de peut-être rééquilibrer les pouvoirs de négociation entre les gros joueurs et les producteurs. Quand un joueur comme TVA dit que les producteurs sont tous heureux, on peut se questionner parce que ce n'est pas certain que l'équilibre de pouvoir est assez « équilibré » (je ne vois pas d'autre mot) pour permettre à quelqu'un d'aller de façon différente, de négocier de façon différente.

8504   LE PRÉSIDENT: O.K. Merci de nous avoir fourni cet exemple-là. Comme je l'ai dit, je le trouve très raisonnable. Je vous félicite de votre approche. J'espère que vous aurez du succès à long terme. Merci.

8505   Maître Dionne, quels sont les engagements?

8506   MS DIONNE: Sir, I just mist the last one. I had no undertakings before that, so... It was "Provide an example..."

8507   LE PRÉSIDENT: Est-ce que vous avez fait des engagements dans les documents que vous nous fournirez dans le futur?

8508   MME SAMSON: Non.

8509   MS DIONNE: No. I hear there are no untertakings, Mr. Chair. Thank you.

8510   THE CHAIRPERSON: Okay, then.

8511   Thank you very much, we will take lunch, now and we will resume at...?

8512   THE SECRETARY: One-thirty, Mr. Chairman... 1:30.

8513   THE CHAIRPERSON: One-thirty. O.K.

--- Upon recessing at 1214

--- Upon resuming at 1333

8514   LE PRÉSIDENT: Nous commençons, madame la secrétaire?

8515   LA SECRÉTAIRE: Merci, monsieur le président.

8516   Our next presenter is the New Canada Institute and appearing for them is Mr. Andrew Cardozo.

8517   Please introduce your colleague and you will then have 15 minutes.

INTERVENTION

8518   MR. CARDOZO: Thank you, Madam Secretary.

8519   Good afternoon, Mr. Chair, and Commissioners.

8520   My name is Andrew Cardozo. I am the volunteer chair of the New Canada Institute and with me is Sharon Fernandez, a board member of the institute. She is also in the rest of her life a cultural consultant and owner of a small business, a teashop in downtown Ottawa.

8521   What we would like to do today is just talk about reflecting cultural diversity in mainstream English and French television. There are a lot of aspects of cultural diversity that you, the Commission, deal with, ethnic broadcasting, for example, being one of the other key items but what we will talk about is reflecting diversity in English and French television.

8522   I have put before you the presentation in the form of six slides and we will just address those briefly and then I would be happy to take your questions.

8523   With regards to cultural diversity and why it's important, quite simply I don't think I need to -- I don't think I need to explain this here but certainly we see the importance of cultural diversity on television as being a reflection of the society we live in. Television is and continues to be the most powerful medium that describes our society to us that makes and maintains attitudes about who we are, so reflecting the diversity of television, diversity of society on television is just important as all the reasons you attend to Canadian content.

8524   Let me move to the third slide and share with you some reflections of mine. I would suggest that in terms of the movement of diversity on television I could look at it in three phases. At first in the 1990s there was a gradual increase of minorities on screen, both in terms of news and drama programming. There was a more pronounced increase over the period 2000 to 2005 and the survey that I had done back in 2004 which is exactly five years ago in the spring of 2004, which is appended to my written submission, set out a number of -- will just demonstrate to the large number of minorities that were in mainstream English and French television at that time.

8525   I would suggest to you that since 2005 there has been a plateauing of those numbers and possibly a decrease. If you look through those, the names that are in that study, that survey, you will find a lot of those people have left and they haven't necessarily been replaced. In fact, some of our best stars have gone to the U.S. So for example Ali Velshi who is the chief business correspondent at CNN came from a

8526   Canadian station, as did Ravi Baichwal who is an anchor with ABC in Chicago.

8527   So we have done well in terms of exporting a lot of cultural people to the United States through Hollywood. We have certainly also exported some of our racial minority anchors who have gone to bigger and better things -- or I don't know about bigger or better but certainly -- I don't know about better but certainly bigger things. Being on CNN is certainly a major step for Ali Velshi.

8528   In terms of reflecting -- in terms of diversity and the reflection of minorities, I would suggest to you that we have had some progress in English news, not as much in French news, a little progress in English drama, less in French drama, even less progress in aboriginal reflection. And certainly you will be aware of the CAB report on cultural diversity was that -- or they reflected an observation. One of the people who appeared before them said there were more aliens on Canadian television than there were aboriginal people and regretfully I don't know that that has changed a whole lot since then.

8529   The real progress is in the U.S. I think if you look at their top-rated shows such as ER, Grey's Anatomy, they have a great deal of reflection of diversity in the mainstream and I would suggest that the top shows do a good of reflecting a variety and diversity and, again, some of those are Canadians such as Sandra Oh who is on one of those shows in the U.S.

8530   I will now turn to Sharon.

8531   MS FERNANDEZ: Mr. Chair and Commissioners, I will address the last two slides.

8532   In my view, including diversity in mainstream television is not necessarily a cost item. It involves steps like ensuring that you hire people from various backgrounds. It means you ensure that you commission drama from a variety of producers who tell a variety of stories that are the essence of modern day Canada.

8533   Canadians like diverse cultural product. You only have to look at the diversity of Canadian authors who get top Canadian awards and are on our bestseller lists like Rohinton Mistry.

8534   Some years ago I was the diversity coordinator for the Canada Council for the Arts and while we began with some targeted programs, our whole approach and goal was to work towards a situation where minority artists have the credentials and full access to the Canada Council support programs.

8535   Another low-cost item is the use of advisory committees. Some of our members have been active on the local community advisory committee of CTV Ottawa and have found this to be a sound mechanism to create closer links between media and community which is effective and is also of minimal cost.

8536   Lastly, we want to acknowledge that most broadcasters and the CAB have been making efforts in the field of diversity, some more than others. Some success has waxed and waned, as Andrew just pointed out. However, in this economic storm we want to make sure that for the benefit of a harmonious Canadian society neither you; the Commission, nor the broadcasters lose sight of the work that has yet to be done.

8537   Thank you. And we are pleased to take any questions.

8538   THE CHAIRPERSON: Thank you for your intervention.

8539   Mr. Cardozo, you mentioned Ali Velshi, and I'm not too sure that I look at it the same way as you. There is a huge number of Canadian broadcasters who have been successful in Canada and migrated to the States. I mean, it's a fact of life that you can earn more money there and get more exposure than you can here, and you know, I don't have to name people who --

8540   You mention Ali Velshi. It seems to me he just follows a well established past. The fact that he happens to be a visible minority does show that, you know, the same rules apply for visible minorities as for non-visible minorities, but I don't think that I would see this necessarily as a failure of our system. Presumably, he learned his craft and his art here. He is trained and he has qualities that are so appealing that CNN hired him.

8541   MR. CARDOZO: I agree, Mr. Chair. I don't want to suggest he is a failure of our system. I think he is one of the shining examples that, as you said -- well, we don't want to be just a training ground but we do produce the best and the brightest and they go on to a worldwide system like CNN.

8542   My concern is that there aren't enough people coming on behind him in terms of minorities.

8543   THE CHAIRPERSON: In your written submission you are talking about Canwest Montreal and you suggested they should be required to move to a 70/30 ratio. We had Canwest before us and we had an in camera session where we saw the data for all the individual stations. For instance, we saw the individual stations of the OMNI network and see how they are doing and then we saw the figures for Canwest. And I can't disclose you the figures, obviously because they are in confidence, but the station is not making money and it's in dire straits.

8544   So is there something special about the Montreal market or something, because contrary to OMNI who have slowly started an improvement and are now -- in a network world this station is clearly moving in the opposite direction.

8545   MR. CARDOZO: I agree. What we have written here was certainly before the hearing and of course we haven't had access to all the figures, but I certainly have been following the hearing and heard Canwest's case that they put before you.

8546   I would suggest that for the three OMNI, the 70/30 model which they have in OMNI.2 in Toronto, is a good model for, I think, the other two OMNI stations.

8547   You know we would like to see the station in Montreal move to that at some point. I would certainly have to concede that this wouldn't be the time to do that.

8548   THE CHAIRPERSON: Okay.

8549   Rita, you have some questions?

8550   COMMISSIONER CUGINI: Thank you, yes.

8551   Good afternoon, Mr. Cardozo, always a pleasure.

8552   MR. CARDOZO: Thank you.

8553   COMMISSIONER CUGINI: Ms Fernandez, hello.

8554   I'm just going to -- I just have a couple of questions of clarification with regard to your written submission and in paragraph two, and you repeat it again later in your submission, you speak about analysis of the reports that are filed with the broadcasters and you say that there has been no analysis and therefore it's difficult to ascertain the success of the policy. I'm just wondering what your suggestions are in terms of what kind of analysis you would like to see done on these reports filed annually by the broadcasters.

8555   MR. CARDOZO: Thank you for that question, Commissioner. You certainly have a long history with this issue, going back to the CAB taskforce.

8556   The kind of analysis -- I have had a chance to look at some of the reports individually as they are filed and the Commission was very -- Commission staff were very helpful in directing me to the precise documents within everything else on the website. So for a person looking for the reports, you know, one can find them.

8557   The analysis, I guess, I would suggest is to look at progress over time. So if you took the reports year by year and look at, I guess, a longitudinal approach and say whether progress has been made from year to the next and also from one -- between one broadcaster and the next would be ways of doing some analysis.

8558   I will be happy to share with you a paper. I teach a fourth-year course in media policy at Carleton and managed to convince or force one of my students in doing an analysis, which was the first time I have seen an analysis being done. You know, it's a student who knows communication policy, has approached the issue for the first time and it's a nice piece. And I would be glad to share that with you because she has certainly made it available to the institute for sharing. I didn't file it because it was provided to me after the deadline date of this hearing.

8559   But that's the kind of thing I would like to see happen, whether it's academics or whether you do the analysis. With any kind of work you do, as you have heard earlier today on some of the other aspects of Canadian content or local news, various people have done analysis and we are hoping to do some of that as well.

8560   COMMISSIONER CUGINI: Because where you say that progress from 2005 to the present has plateaued or decreasing, does this conclusion come from analysis that you have done?

8561   MR. CARDOZO: No. This is coming from a relatively unscientific anecdotal observation on my part. So I would be very pleased to be proved wrong of those. Unfortunately, I --

8562   COMMISSIONER CUGINI: So would we.

8563   MR. CARDOZO: Yeah.

8564   COMMISSIONER CUGINI: And then paragraph 24 of your submission you said:

"The Commission also has a social responsibility to guide broadcasters."

8565   COMMISSIONER CUGINI: How do you suggest that we guide broadcasters? Is there something in addition to what we already require of broadcasters in the area of cultural diversity?

8566   MR. CARDOZO: Good question. I wish I had a more detailed answer to you.

8567   I think that what the Commission has done to date, starting with the work of the CAB that you were involved in, I think, is a kind of role that you have taken. I think if you combine that with the previous issue you raised which is analysis then I think we would all have an idea as to where progress can be made.

8568   In my discussions with some of the broadcasters who have really been trying, you know, I don't know if it is a lack of progress as to a lack of trying, necessarily. Everybody is busy and the downtimes and the crisis that has been faced now, has been happening slowly for the last little while, but of course it's major in the last six months.

8569   I think if we had a better idea of where the problems are that you and then the broadcasters and groups like ours could focus in on probably areas where we can make progress.

8570   But I think that the Commission has done a great job in the last few years of raising the issue, raising the awareness. And we have got lots of examples of success both in Canada and the U.S. that we are not making up something. Sometimes it's, you know, reflecting reality.

8571   I would love to see a television program that did crazy things like had people who were, oh, maybe a governor general who was non-white or a premier of B.C. who was non-white or the head of a cable company who was non-white. I mean, this wouldn't -- this might be crazy on television but it's Canadian reality and we don't see -- in a sense, Canadian television is in some ways behind what's happening in society.

8572   COMMISSIONER CUGINI: You know, because I think of shows like -- well, the first year that CTV produced So You Think You Can Dance Canada, and one of the things that they truly focused on was not only ensuring that the participants in that show were from various visible minorities but that even the music presented on the show was reflective of different ethnic groups in Canada. And it was truly positioned as one of the key differences between the Canadian version of the show and of course the U.S. version of the show where it originated.

8573   MR. CARDOZO: Right.

8574   COMMISSIONER CUGINI: And they certainly didn't need any guidance from us to do that kind of thing.

8575   MR. CARDOZO: Yes.

8576   COMMISSIONER CUGINI: As you say, it makes good business sense because it would have widened their audience. So that's why the question too in terms of how we could guide them.

8577   MR. CARDOZO: As you just mentioned, part of guidance is sharing best practices; reminding people of that because in a show like that the demographic that is watching that show is in that music scene as well. So if it didn't reflect that diverse reality --

8578   COMMISSIONER CUGINI: And it's key to capture that audience at that time.

8579   MR. CARDOZO: Exactly.

8580   COMMISSIONER CUGINI: My final question is in relation to paragraph 26. Year over year -- and it is an extension of the analysis question but you say:

"Year over year in comparison to each other and in comparison to targets that the Commission sets..."

8581   COMMISSIONER CUGINI: Are you suggesting here that the Commission should set quotas for visible minority presence on television, which we haven't done?

8582   MR. CARDOZO: Yeah.

8583   No. I am not totally against quotas. I mean the Commission has all sorts of quotas in terms of Canadian content and various other aspects. So the notion of quotas is not foreign to the Commission. I think one of the neat things to do would be to have broadcasters set their targets that you could then adopt as their target.

8584   COMMISSIONER CUGINI: Okay. Well, thank you very much. Those are my questions, Mr. Chair.

8585   THE CHAIRPERSON: Louise, questions?

8586   COMMISSIONER POIRIER: Yes.

8587   Thank you very much for coming this afternoon, Mr. Cardozo and Mrs. Fernandez. I really do appreciate your short and very concise presentation. It's clear, short and sweet as we say. And I tend to agree with all your conclusions.

8588   I wonder -- I have a question on slide number four. I wonder, okay, when I read:

"Some progress in English news, not in French news and little progress in English drama, less in French drama." (As read)

8589   COMMISSIONER POIRIER: I wonder, and it's only a question of information. If you take into account the proportion of immigrants who decide to live in the English Canada compared to the French Canada, and if you take also into account the countries from where they originate because I think in Quebec their policy is to have -- to have more immigrants that come from, let's say, north of Africa and the east country in Europe. So how do you take into account those facts?

8590   MR. CARDOZO: I think the challenge is different in the French market than the English market. You are correct.

8591   I think there have been some wonderful stars in the French language system. I think of Mikael Jean, of Normand Braithwaite, Gregory Charles, Luc Melville who are still -- well, I mean the Governor General is now the Governor General but the others are still active in the broadcasting system. I think of other reporters like Maxime Bertrand, Mariana Meura who have been on and aren't on at the moment as I understand.

8592   I think the system has produced some really topnotch broadcasters. And, again, I would go back to what I was saying earlier in terms of they become role models for other broadcasters but role models for young people. And I think as we have, you know, diverse societies especially in the Greater Montreal area, it's good for minorities in Quebec to see a Mikael Jean or Luc Melville or people like that on TV and aspire to be more prominent.

8593   COMMISSIONER POIRIER: What about aboriginal? Are there any aboriginal persons in the French-language programming?

8594   MR. CARDOZO: There is certainly less. There is -- certainly the Cree from northern Quebec are more Francophone than Anglophone. So there are certainly examples of people who can be in French television.

8595   COMMISSIONER POIRIER: Yeah, the challenges are different.

8596   MR. CARDOZO: Yeah.

8597   COMMISSIONER POIRIER: Thank you very much, Mr. Chair.

8598   THE CHAIRPERSON: Okay, thank you very much. Those are our questions for you.

8599   MR. CARDOZO: Thank you very much.

8600   LE PRÉSIDENT : Madame la Secrétaire, qui est le prochain intervenant?

8601   LA SECRÉTAIRE : Oui. Merci, Monsieur le Président.

8602   J'inviterais maintenant the Canadian Conference of the Arts to come forward to the presentation table

--- Pause

8603   LA SECRÉTAIRE : Alors, monsieur Alain Pineau comparaît pour la Conférence canadienne des arts. Monsieur Pineau, vous disposez de 15 minutes.

INTERVENTION

8604   M. PINEAU : Merci, Madame la Secrétaire.

8605   Bonjour, Monsieur le Président. Bonjour, mesdames et messieurs les commissaires.

8606   Mon nom est Alain Pineau, je suis directeur général de la Conférence canadienne des arts, et je tiens à vous remercier de me donner l'occasion de comparaître encore une fois devant vous, parce que, encore une fois, vous traitez de sujets fort importants qui nous tiennent à coeur.

8607   La Conférence canadienne des arts est la plus ancienne et, à ce jour, encore la plus vaste organisation au sein de laquelle se retrouve la majeure partie du secteur arts et culture au Canada. Depuis plus de 63 ans, la CCA se préoccupe, au niveau national, de la vitalité de cet important secteur au sein de la société canadienne.

8608   Compte tenu de l'importance de la Loi de la radiodiffusion dans l'écologie du secteur en général, la CCA est intervenue à intervalles réguliers devant la Commission pour y présenter l'intérêt commun promulgué par le Parlement et dont vous êtes les gardiens. Nos interventions sont devenues plus nombreuses ces deux dernières années alors que s'accélère la mutation du secteur audiovisuel sous l'impact des technologies et de la mondialisation.

8609   Vous aurez entendu au cours de cette audience un grand nombre de parties intéressées par des changements qui nécessitent, de toute évidence, une solution globale. Plusieurs de ces intervenants sont membres de la CCA et plus aptes à apporter des commentaires plus pointus sur divers aspects du débat.

8610   Compte tenu du mandat de la CCA, je m'en tiendrai donc à des considérations d'ordre général.

8611   There has been much talk here, in front of the Standing Committee on Heritage and in the press about the crisis facing over-the-air traditional television in general and local television in particular. There is a broadening consensus that the model is broken and that the current economic downturn has only exacerbated what is fundamentally a systemic or structural crisis.

8612   The CCA largely agrees with this assessment but would extend it much beyond the boundaries of traditional broadcasting or local television. As we have been saying over the past three years, along with several others, it is the whole broadcasting system which is under mutation and must be the object of global rethinking.

8613   I would go as far as saying that the very licensing system is itself based on a premise that is no longer valid, namely the scarcity of spectrum, and that we need to rethink why and on what basis we still have a need to regulate the audiovisual sector in Canada.

8614   To answer the various questions that you are dealing with currently, the CCA suggests it is crucial to keep going back to the social and cultural objectives Parliamentarians have set in the Broadcasting Act, and more specifically in section 3(1), a section which, if I may suggest without sounding insolent, every Commissioner should read at least once a day, particularly in these confused and challenging times.

8615   The goal at the heart of this Act is to maintain Canada's cultural fabric, thereby strengthening its economic, political and social structures.

8616   Many paragraphs of section 3 would be worth quoting but for the purpose of the current hearing I will simply refer to paragraphs e and f, which state respectively that:

"...each element of the Canadian broadcasting system shall contribute in an appropriate manner to the creation and presentation of Canadian programming and each broadcasting undertaking shall make maximum use, and in no case less than predominant use, of Canadian creative and other resources in the creation and presentation of programming."

8617   Broadcasting, or more appropriately, the audiovisual production and distribution system provide the most widely consumed form of cultural expression and their importance in defining who we are as Canadians must never be underestimated.

8618   La CCA se réjouit de l'intérêt de la Commission dans la santé de la production d'émissions canadiennes dans les catégories prioritaires et au niveau local. Comme tant d'autres, nous sommes particulièrement préoccupés par la production d'émissions dramatiques de qualité dans les deux langues officielles, et nous appuyons les efforts de la Commission de garder une perspective globale dans une économie temporairement à la baisse, mais un univers, qui, lui, est en rapide transformation.

8619   Comme vous l'avez dit, Monsieur le Président, à la conférence de la CFTPA en février dernier :

"It's time to stop the piecemeal fixes; we need a structural solution as we look into the future."

8620   This rethinking must, amongst other things, take into account the reality of large ownership groups controlling both conventional and discretionary broadcasting services, with some of them also being major distribution undertakings.

8621   Accordingly, the CCA welcomes the Commission's intent to design a framework for licensing broadcasters, both conventional and specialty, on the basis of these ownership groups, not on the basis of the type of service they deliver. But we will take the opportunity to say once again that that approach would still require the disclosure of more financial data than is currently available, as well as a review of the CRTC's 30-year-old Rules of Procedure.

8622   As I was saying earlier, it is in close reference to the objectives of the Broadcasting Act that you must view the present hearing and the related ones which are soon to follow. Why do we need private broadcasters if not to provide us with a reflection of who we are through local programming and through the production of Canadian programming in a variety of genres?

8623   If their sole raison d'être is to make money through the simultaneous substitution in foreign, i.e. American programming, we don't need them as all Canadians can now have access directly to major American networks and super stations.

8624   We therefore urge you to resist opportunistic pressures to reduce programming obligations, pressures which aim simply at improving private profitability at the expense of public interest.

8625   The CCA is with all those who over the years have been saying that there is ample and clear evidence that regulation must be strengthened and applied to all components of the system according to their specificity, but from the global perspective provided by the Broadcasting Act.

8626   The CRTC's regulatory approach for specialty TV services has shown that a combination of exhibition and expenditure -- as a percentage of gross revenues -- requirements is a proven winning formula for Canadian content.

8627   CCA believes that both exhibition and some form of expenditure requirements are necessary to ensure appropriate levels of support for Canadian programming. The Commission needs to bring this successful approach back to the over-the-air television environment.

8628   There is much controversy about the causes of the crisis facing traditional broadcasters and even more controversy about the solutions to it. The CCA is one of the several parties estimating that the problems facing English private broadcasters are largely of their own making.

8629   Despite limited financial information having been made available, we know how they have overspent on foreign (U.S.) programming and/or have incurred enormous debts to finance acquisition of specialty services -- which, by the way, are doing very well financially despite the fact that they have stricter regulation concerning the production of Canadian content.

8630   Depuis 20 ans déjà, la Commission a permis fusions et acquisitions dans le secteur de la radiodiffusion. Tous ceux qui recherchaient votre bénédiction disaient que dans un univers en mouvement, la consolidation était une condition économique sine qua non pour assurer la production d'émissions canadiennes.

8631   Depuis 2000, en particulier, certains consortiums ont payé un total de plus de cinq milliards de dollars pour acquérir leurs compétiteurs et consolider leur situation dans le marché. Il est totalement inacceptable aujourd'hui de voir les mêmes compagnies défiler devant vous et rendre la réglementation appuyant la création de contenu canadien et local responsable de leurs difficultés financières et chercher à obtenir un soulagement de leurs obligations.

8632   Comme nous le disions précédemment, à quoi nous servent les radiodiffuseurs privés si ce n'est pour contribuer à la production d'émissions canadiennes et locales?

8633   Finalement, nous ne croyons pas à l'argument traditionnel voulant que la programmation canadienne -- en tout cas, en milieu anglophone -- est automatiquement un poste déficitaire dans les opérations du secteur privé ou public.

8634   Si on accordait suffisamment de ressources et d'attention à la production, la promotion et la mise à l'horaire de programmes de qualité, les émissions canadiennes ont, avec les possibilités de diffusion actuelle sur plusieurs plateformes appartenant souvent au même groupe, autant de potentiel à couvrir leurs coûts et même enregistrer des profits.

8635   Le Conseil doit garder à l'esprit qu'en dépit de la crise économique actuelle, les groupes qui contrô1ent actuellement le système de radiodiffusion canadien restent globalement en excellente santé financière, même dans le cas de Canwest. La CCA croit fermement que ces groupes survivront à la récession actuelle, et s'ils pensent qu'i1s ne le peuvent pas, que leurs licences aillent à d'autres : les événements des derniers jours indiquent que certains semblent prêts à prendre la relève.

8636   Having said that, there is a recognized need for more investment in local programming and the production of Canadian content. This is why we welcome the CRTC decision to create the Local Programming Improvement Fund and support the view that access rules should be widened and the money levied be augmented.

8637   On the issue of fee for carriage, the CCA is already on record as supporting the notion under strict, enforceable and enforced conditions of licence to make sure that all the money thus collected be dedicated to improved Canadian and local programming.

8638   There remains to be determined whether public broadcasters, the CBC included, should have access to either of these new sources of financing. I am sure that all five provincial networks and the CBC would commit to spending any new such revenue on the production of Canadian programs.

8639   As for the CBC as such, it is our position that this is an issue which can be resolved if and when the government finally decides to review the mandate of the public broadcaster and the resources at its disposal. In that respect, the CCA is fully supportive of the recommendations made by the Standing Committee on Heritage in its February 2008 report on the mandate of the CBC.

8640   Finally, CCA applauds the Commission for recognizing that something needs to be done to curb English-language private broadcasters' ever-increasing spending on foreign programming compared to Canadian programming.

8641   CCA finds merit in the 1:1 spending ratio proposal. However, in keeping with the Broadcasting Act's provision that "each element of the Canadian broadcasting system shall contribute in an appropriate manner to the creation and presentation of Canadian programming," we support this proposal only if it is limited to over-the-air television broadcasters and does not consider the programming expenditures related to any affiliated specialty television holdings.

8642   Specialty television services currently spend three times more on Canadian programming than on foreign programming. As CFTPA has argued in its brief, the introduction of a 1:1 spending ratio across corporate broadcast groups could actually reduce spending on Canadian production by specialty services. CCA shares the view that this would be a major step backwards for the Canadian broadcasting system and would be contrary to the provisions of the Act.

8643   To conclude, Mr. Chairman, we certainly realize that all regulated companies want to reduce the regulatory burden since this increases their profit but the CCA urges the Commission not to make any rash wholesale changes to the regulatory regime for over-the-air television, even within the context of a one-year renewal, especially those aspects related to priority programming, local production requirements and independent production expectations. Those changes could very well have long-term negative and perhaps irreversible implications for the Canadian broadcasting system.

8644   Therefore, CCA strongly recommends that the Commission extend licences for one year only but under the same requirements concerning Canadian content and local programming. The process put in place by the Commission over the next year will give all stakeholders an opportunity to address the importance of strengthening regulation with regards to the production and exhibition of Canadian priority and local programming, while not putting the existence of traditional television broadcasters in jeopardy.

8645   We support the concept of a reasonable fee for carriage for over-the-air broadcast undertakings on condition that the proceeds be channelled towards more and better Canadian quality programming, based on enforceable and enforced conditions of licence.

8646   Je vous remercie de votre attention et je suis prêt à répondre à vos questions.

8647   THE CHAIRPERSON: Thank you.

8648   On page 5, second paragraph, you make the following assertion:

« Si on accordait suffisamment de ressources et d'attention à la production, la promotion et la mise à l'horaire de programmes de qualité, les émissions canadiennes ont, avec les possibilités de diffusion actuelle sur plusieurs plateformes appartenant souvent au même groupe, autant de potentiel à couvrir leurs coûts et même enregistrer des profits. »

8649   This is absolutely contrary to all the evidence I have heard over the last two weeks. What makes you say this?

8650   MR. PINEAU: What makes me say that is that if, indeed, there was the support, particularly for the promotion, and if the scheduling were done accordingly, of quality programs, why would quality Canadian programs not be as successful?

8651   You just have to turn to the French sector. I mean the ecology there is different. There is a star system, there is a lot of good creation there, and those programs, some of them are really, you know -- what I think they call des productions lourdes are probably more difficult to make money out of and particularly in the French market.

8652   But I believe that if we had this same approach on the English side, with the proper promotion -- and there are some examples showing it. I mean "Corner Gas" is one of them, obviously, that we have heard a lot about recently and over the past few years. And I believe that other forms of drama productions, for example, through the CBC, have the same potential.

8653   The problem is that I don't think we put the right amount of money behind those programs because it has been traditionally, particularly in the anglophone market, relying on the promotions by American networks of American productions and we have never created a proper star system in English Canada.

8654   But there is nothing, in my mind, that would prevent this from being the case. I mean we could have good local Canadian programs, as I said, if we invest enough in those three components, particularly with the production and the promotion.

8655   THE CHAIRPERSON: As I pointed out, not a single broadcaster who has appeared before us agrees with this. They all say that whether we want to or not, by necessity, we, in effect, have to subsidize the Canadian content with the profits we gain from American because the costs are the same but the market is so much smaller and therefore you cannot get the return.

8656   Obviously, I don't know what the answer is but I find it surprising that you feel very strongly about this and obviously believe it could be done. Why has nobody tried this? Why, for instance, CBC couldn't flourish on that model? There must be more to it than just that everybody is tied to a proven model.

8657   MR. PINEAU: Yes. First of all, it is difficult to prove something that has never been tried.

8658   THE CHAIRPERSON: Yes.

8659   MR. PINEAU: So, you know, it is easier to prove that it has failed over the past several years than it would be for me to prove that it would work. I think though, without having the evidence at hand to provide you with, it is more anecdotal.

8660   But I mean there are -- when the CBC has been making efforts to promote their programs and good scheduling, I mean there are some success stories there obviously that we could look at. But as I said, I don't have the evidence at hand, I am sorry.

8661   THE CHAIRPERSON: Secondly, you suggest that notwithstanding the present economic crisis, which is the most severe that we have had in probably 80 years or something like that, we do not change any of the conditions in terms of independent production, priority programming or local production.

8662   Do we not run into the problem here that if we do that that in effect some people may not survive? I mean we have suggested only one year. I agree with you absolutely, doing it for longer than that could cause long-term damage.

8663   But on the other hand, if we do nothing, don't we risk the possibility that some of these major networks will not be there when the economy has recovered?

8664   MR. PINEAU: I am afraid I am not competent to answer that question from the financial point of view.

8665   I guess it is the expression of a fear that if we give a break on these now, it will never be -- if you tell me that there are ways where the Commission could really make sure that the door is locked before the horse gets out of the barn, then yes.

8666   With all the evidence that you have in front of you, you are better positioned than I am to decide whether it is possible to not throw the baby out with the bath water. The concern here is that every time we have opened the door, it has been almost impossible to close it.

8667   THE CHAIRPERSON: Okay, thank you.

8668   Candice, you have some questions?

8669   COMMISSIONER MOLNAR: Yes, thank you, Mr. Chair, and welcome, Mr. Pineau.

8670   Sorry, I have to take those off or I get echo.

8671   I wanted to begin to ensure I understood your submission and some of the comments you made today about the state of the industry and broadcasters' recovery from this current economic crisis. You note that you agree there is a crisis.

8672   MR. PINEAU: Yes.

8673   COMMISSIONER MOLNAR: But I note within your submission at least you state that:

"The CCA is confident that broadcasters can and will get through the current downturn of the economy." (As read)

8674   So how is it you perceive that the broadcasters can and will get through this? Absent changes to regulations or otherwise, you see that they can and will get through this?

8675   MR. PINEAU: Yes. I really believe that, you know, this is an important economic crisis, there is no doubt about this and it is not only one of. We agree with the assessment that there has been an increasingly difficult context for over-the-air traditional television and some systemic changes have got to be made about that. We agree with that.

8676   That is why we support some ideas like fee for carriage should really be looked at if they really are aimed at the cultural objectives of the Act essentially and not just at the bottom line.

8677   But, you know, I was reading press clippings last week from even Canwest. I mean, you know, the basic business is not bad. The basic business is still -- if you break it down by individual markets, it is easy to say, you know, this one doesn't work, this one doesn't work, but the idea should be to look at the whole picture, the full company.

8678   I know there have been arguments here as to whether it would be appropriate, for example, for specialty services, which have different shareholders, to subsidize the main networks. That is indeed a very interesting and tricky question.

8679   But it seems to me, if memory serves me right, that all those acquisitions have always been justified by the fact that it would give a healthy broadcasting system which could then fulfil the objectives of the Act and meet the conditions of licence and requirements of private broadcasters.

8680   It is funny now to hear that because, you know, there is a downturn of, what, 18 -- I don't know, I don't have a crystal ball how long the crisis will go on. There are apparently, according to the latest news, some signs that it will not be all that long after all.

8681   As I said, when you look at the broadcasting, for example, aspect of Canwest, they are not doing all that badly. I mean, yes, they have lost some profitability but who hasn't and why cry wolf to the extent that they do now?

8682   Crying wolf has been something that this Commission has heard many people do over the years. You know, the Death Stars and cable and importing foreign signals and all of that was always supposed to be the end of the road for traditional broadcasters.

8683   This time, yes, it is more severe but I have some trouble believing that in two years time we will not see that profitability has come back, and as I was saying earlier, I hope we will not open the door or cut down on obligations forever. I think we would all lose if that were the case.

8684   COMMISSIONER MOLNAR: Okay. And I believe you have already answered, I just want to make sure I understand that in your view when you say profitability will come back, you are saying come back to the broadcast group, not necessarily to conventional television as it exists today but back to the broadcast group?

8685   MR. PINEAU: Well, I mean, you know, there are some people who do believe that it will even come back to over-the-air as the economy picks up. Whether that is true or not I am really not competent to decide but it is certainly opinions that are about also in the dissenting circles currently.

8686   COMMISSIONER MOLNAR: M'hmm. I think it becomes very important, in our deliberations at least, to understand whether and to what extent it will come back to the broadcast group versus come back to conventional as a separate and distinct business unit, for the points you made earlier that some would argue specialty is separate, they compete in a different market against different players, there are different ownership structures and so on.

8687   I think it is also important when we look at what sorts of regulations are in place for the different sectors and that takes me to my next question.

8688   On the last page of your comments today, you talk about the 1:1 spending ratio and you say:

"...we support this proposal only if it is limited to OTA television broadcasters and does not consider the programming expenditures related to any affiliated specialty television holdings."

8689   So that statement, when I read it, implies that we should be looking at conventional in and of itself and that it needs to be healthy and sustainable in and of itself, and its regulations, therefore, are separate and distinct from a broadcast group. Like I don't know how we can do both.

8690   MR. PINEAU: No, I hear you. In a sense there is something problematic there in that position. The issue here is, is it possible to find a solution that would -- if the 1:1 were applied, how to make sure that the end result is not less than what we have now and I am afraid I don't have an answer to that question. But you are right, there is a difficulty there. Sorry I can't be more helpful.

8691   COMMISSIONER MOLNAR: So essentially just don't decrease the overall versus look at 1:1 within any group?

8692   MR. PINEAU: Yes. I mean, I think the caveat that CFTPA has flagged is important because we may risk affecting overall the production of Canadian content if we were to apply it across the board.

8693   And there is a bit of a challenge, indeed, in having a regulation that is -- I am not sure whether conceptually it is impossible to do that though, to have a regulation that is specific to each component of a group while at the same time looking at the profitability of the whole. Is it necessarily contradictory? That is something that I would have to think more about.

8694   COMMISSIONER MOLNAR: As do I.

8695   MR. PINEAU: Sorry.

8696   COMMISSIONER MOLNAR: All of us, I think, have to think more about that.

8697   MR. PINEAU: Yes.

8698   COMMISSIONER MOLNAR: And the good news is that there is another opportunity as we move into the second part of these.

8699   I have one more question for you related to the 1:1 spending ratio. In your submission you mention that:

"We believe that a phased-in approach, whether a 1:1 spending rule or another model, is prudent given the broadcasters' flexibility and opportunity to adjust to the new reality." (As read)

8700   In speaking of a phased-in approach, I wondered if you could give us more information as to what might be a phased-in approach to address this issue.

8701   MR. PINEAU: Oh! I think the point that I was trying to make there is that you cannot do that overnight because there are already a number of commitments. And even if the Commission decided to go for 1:1 now, I think it has been mentioned on several occasions here that it could not happen within the next year or so, it would take some time to build into the system. That is what I was trying to say there.

8702   COMMISSIONER MOLNAR: Okay. When I read it, for example, I was thinking, well, if we want to consider the fact that there is a current economic recession, slowdown, whatever, and it will take some time to recover, whether approaches that might be linking changes or some of these sort of further restrictions, if you will, to things such as increasing revenue or increasing PBIT or something so that we are linking the change in obligations to a recovery to the financial position, would something like that make sense?

8703   MR. PINEAU: I must say I hadn't thought of it that way. Now that you mention it, I think it is worth considering but that is not what we had in mind.

8704   COMMISSIONER MOLNAR: Okay. Thank you, those are my questions.

8705   THE CHAIRPERSON: Okay, I think those are our questions. Mr. Pineau, thank you for your appearance.

8706   MR. PINEAU: Thank you.

8707   THE CHAIRPERSON: Let's take a five-minute break before we deal with the last intervenor.

--- Upon recessing at 1422

--- Upon resuming at 1430

8708   THE CHAIRPERSON: Good afternoon, Mr. East. You're in your usual place, at the end of the day. It seems to be your role in life.

--- Laughter

8709   MR. EAST: Well, I'm beginning to think that you see me as a bit of a headline act, so...

--- Laughter

8710   LE PRÉSIDENT: Madame la secrétaire?

8711   LA SECRÉTAIRE: Our next presenter is the Canadian Association of Film Distributors and Exporters. Appearing for them is Mr. Ted East.

8712   You have 15 minutes.

INTERVENTION

8713   MR. EAST: Mr. Chairman, Vice-chairs, and Commissioners, I thank you for the opportunity to appear before you today.

8714   My name is Ted East and I am president of the Canadian Association of Film Distributors and Exporters, or CAFDE.

8715   CAFDE is a non-profit trade association that represents the interests of Canadian owned and controlled feature film distributors and exporters. Our members include Alliance Films, Equinoxe Films, Maple Pictures, Mongrel Media, E 1 Films/Seville Pictures, and TVA Films.

8716   CAFDE members distribute over 90 percent of the non-studio and Canadian films released theatrically in Canada every year. CAFDE members distribute films in Canada from all over the world and in the widest range of genres and budgets.

8717   Most of the groups and individuals that have appeared and will appear before you during these hearings are in the full-time business of creating television programming, broadcasting television programming, or distributing television programming via satellite and cable.

8718   CAFDE members are unique among them in that their business is a distribution of feature films, which typically begin their life in movie theatres and then home video and DVD, prior to ending up on television.

8719   So television is not our main business. As a consequence, it would be easy to dismiss film distributors as peripheral players in these hearings or indeed in any hearings in the future.

8720   However, television broadcasts are a critical component in the life of a feature film.

8721   We have appeared before you in the past several years to bring to your attention our concerns about the decreasing appetite for feature films among broadcasters in this country.

8722   The situation has now reached a critical point. Several CAFDE members have revealed to me that as a result of the declining revenue from television sales, they are currently offering advances for Canadian films that are 25 percent less of what they were 5 years ago for similar films. This makes most Canadian films harder to finance and places a greater burden on public financing sources.

8723   Does the Commission have a role to play in helping to build a strong domestic feature film industry? CAFDE believes very strongly that it does.

8724   As mentioned in our written intervention, a recent study by Peter Grant and Michel Houle, commissioned by Telefilm Canada, points out the connection between a successful indigenous feature film industry and strong broadcaster support for its films.

8725   In the European countries studied, this broadcaster support was part of the regulatory framework of those countries.

8726   While The Broadcasting Act does not reference feature films specifically it does state that:

"the Canadian broadcasting system should encourage the development of Canadian expression by providing a wide range of programming that reflects Canadian attitudes, opinions, ideas, values and artistic creativity, by displaying Canadian talent in entertainment programming"

8727   Feature films are a material part of the cultural fabric of most nations and needs to be included in the "wide range of programming" the Canadian broadcasting system is required to support.

8728   Because feature films begin their commercial life in movie theatres it is possible that the Commission does not fully understand the intricacies of the film industry and the role that broadcasters play. The Grant/Houle report noted that in the UK the average person sees 78 films a year, 56 of which are viewed on television. That statistic alone points to the critical role broadcasters play in reaching audiences.

8729   One of the recommendations of the Grant/Houle report was for Telefilm Canada to approach the CRTC and the Department of Canadian Heritage to establish an inter-agency working group on feature film policy. We fully support this recommendation and believe that examining the Canadian feature film industry in detail and outside of the context of a hearing, will give the Commission a greater appreciation of the role that broadcasters need to play in building a strong industry.

8730   Last week we met with Heritage Minister James Moore. Among the topics we discussed was the current crisis facing film distributors because of the declining support from broadcasters. We hope to meet him again in the near future to discuss the situation in greater detail with a larger group including producers, directors and actors.

8731   In the context of these hearings we are limiting our comments to CityTV and its new owner Rogers Communications.

8732   CityTV has, for many years, been the only over-the-air broadcaster that consistently supported Canadian feature films. Since the approval of the acquisition by Rogers, City has all but ceased to purchase new Canadian films. In fact a number of CAFDE members report that they were informed by Rogers' executives prior to the approval of the purchase or immediately after, that CityTV would not continue to support Canadian films. It seems possible that Rogers never had any intention of living up to this condition of license. And yet in their brief to the Commission at the 2007 hearings to approve the purchase, Rogers wrote:

"Citytv stations have played an important role in the creation and promotion of Canadian film. They have long been recognized by the feature film community for their commitment and support to Canadian filmmaking. CityTV has certainly been the primary broadcast supporter of new and emerging Canadian producers, directors and writers, helping them develop their ideas and making script and concept funds available for worthy treatments, outlines, ideas and first draft scripts. Citytv has also been a tireless promoter of Canadian film, whether through awards or special programs at festivals, or specific station program productions.
   At Rogers, we share that same commitment to Canadian filmmakers, Reflecting the commitment to Canadian films, CityTV will broadcast just about every available, suitable Canadian film produced. In fact, the CityTV stations in Toronto and Vancouver have conditions of licence which require them to broadcast a minimum of 100 hours per broadcast year of Canadian long-form features during peak viewing periods.
   Should our application be approved, we will continue to fulfil these important commitments to the broadcast and promotion of Canadian features." (As read)

8733   CAFDE finds it outrageous that, not even two years later, Rogers is now asking to be relieved of this condition of license, writing:

"CityTV's commitments to Canadian feature films were made at a time when CityTV's brand and image was closely associated with foreign feature films -- when CityTV was considered 'the movie station'.
   However, in today's media environment where movies are widely available and offered by a number of OTA, specialty, pay and VOD services, a focus on feature films is no longer a viable programming strategy for CityTV. For these reasons, we do not intend to make formal commitments to the broadcast of Canadian Feature Films." (As read)

8734   In our written intervention we have pointed out that programming of feature films by broadcasters has dropped dramatically over the past five years. This is particularly true for Canadian films.

8735   A survey of CAFDE members reveals that they have over three dozen Canadian films ready to go to air that currently do not have a sale to an over-the-air or premium cable broadcaster.

8736   So, in conclusion, CAFDE is strongly urging the Commission to force Rogers to live up to CityTV's condition of license with respect to Canadian films.

8737   Thank you for your attention, and I;m happy to answer any questions.

8738   THE CHAIRPERSON: Thank you for your intervention.

8739   In paragraph 8 of your original submission, you say:

"Over the Air (OTA) broadcast remains the most lucrative (in terms of revenue and audience) television window for feature films."

8740   I must say, I was astounded by that. I would have thought that with OTA, specialty channels, et cetera, that OTA would not be the most lucrative, both in terms of revenue or audience.

8741   Have you got any figures to back this up?

8742   MR. EAST: I probably should have, when I wrote that statement -- it used to be. It no longer is.

8743   The volume is there because CityTV is gone, because CBC has been inconsistent. But the potential is there. I think that's what I really should have written.

8744   THE CHAIRPERSON: But still, do you have any figures, let's say for the year 2007 or 2008, what they actually were?

8745   MR. EAST: No. I can certainly get those for you.

8746   In fact, the meeting that we are trying to organize, in the context of Telefilm Canada, we will certainly be providing much more detail in terms of the revenues and the specific genres and the specific broadcasters, whether they are over the air, cable, whatever.

8747   THE CHAIRPERSON: You mentioned the Telefilm report by Grant and Houle, which was commissioned by Telefilm, that the working group -- I gather the report suggests that Telefilm Canada contact Heritage and ask to set up a working group.

8748   MR. EAST: Yes.

8749   THE CHAIRPERSON: Why has there been no follow-up on that?

8750   MR. EAST: There will be. There's a Telefilm working group meeting, I think, in a couple of weeks and, certainly, CAFDE has been urging them and lobbying the other associations that are part of the working group to get this going.

8751   It is certainly not because of lack of interest from us.

8752   THE CHAIRPERSON: I mean, this is the first I've heard about this, from reading you submissions, so that's why I'm somewhat surprised. We will hear in due course from Telefilm, you're telling me?

8753   MR. EAST: Right.

8754   Well, I'll certainly mention that when we go to the next working group meeting.

8755   THE CHAIRPERSON: Now, you're zeroing in Rogers here and -- first of all, where were you when we approved the City acquisition by Rogers?

8756   MR. EAST: We were here.

8757   THE CHAIRPERSON: And did you support it?

8758   MR. EAST: We supported it, but on the provision that they continue to support Canadian feature films, which in their submission, they said that they would, as I pointed out here.

8759   THE CHAIRPERSON: Why is City the only TV station with that kind of commitment? Do you know? Have you ever asked any of the other stations to make that or have you intervened at any licence hearings and asked us to impose anything like this on CBC or CTV or something?

8760   MR. EAST: well, we've never had an opportunity to do that for the CBC, but we certainly will when their licence renewal --

8761   THE CHAIRPERSON: What do you mean? how long have you been around?

8762   MR. EAST: CAFDE?

8763   THE CHAIRPERSON: Yes.

8764   MR. EAST: I'm talking about recent history here. I mean, CBC's last licence renewal was, I think, close to 10 years ago.

8765   THE CHAIRPERSON: Seven years ago.

8766   MR. EAST: Seventeen years ago?

8767   THE CHAIRPERSON: Seven.

8768   MR. EAST: Seven years ago. No, it was 2000, was it not?

8769   THE CHAIRPERSON: Okay.

8770   MR. EAST: But at the 2000 licence hearing, we supported the CBC, I believe, in their promised to -- I think they said they were going to spend $30 million over 5 years to support feature films. It was not made a condition of licence, which I think was a mistake, in hindsight, because they never came close to that figure.

8771   THE CHAIRPERSON: We seem to be hearing a contradiction. You think we should do this, it makes good sense, and it would make a lot of money.

8772   Obviously, Rogers feels that this would be a loser, that's why they want to be relieved of this commitment. I don't quite understand, I don't know on what basis to judge.

8773   MR. EAST: Well, how could they come to you 18 months ago and say "we think this is a winning strategy, this is one of the reasons we bought the station", and promising to live up to these conditions of licence and now come to say that it's too expensive and we don't see that it works any more.

8774   I mean, if it's 5 years down the road, and they've given it the good college try, I suppose they have an argument.

8775   THE CHAIRPERSON: City gave it a good college try during its ownership prior to Rogers.

8776   MR. EAST: Yes.

8777   THE CHAIRPERSON: Do we have -- you don't know whether this was something they did because they believed in it or if it was something that was lucrative for them.

8778   MR. EAST: I think it was both.

8779   THE CHAIRPERSON: Well, if -- I don't know, but if it's lucrative, I'm asking you, why would Rogers want to abandon it? That just doesn't make sense to me.

8780   MR. EAST: Well, I don't work for Rogers, I can't answer that. I think Rogers has a different strategy; they want to focus on cheaper styles of programming, less expensive. But at the same time, they purchased these series of stations that have this very specific condition of licence, that they promised that they would live up to, and they're in no economic peril, I mean, they're not in the same situation as CanWest, for sure.

8781   And they want, sort of, immediate relief from this. I mean, I think the primary focus here is protecting Canadian priority programming, and I don't see any real reason why Rogers should not be --

8782   THE CHAIRPERSON: But, you see, I assume that people have a rational basis for their decisions. If they're making from showing Canadian films, et cetera. They want relief on all sorts of fronts; why ask for relief on a front where you're making money? That doesn't make sense to me.

8783   MR. EAST: Well, it's not just about making money, it's about living up to the conditions of the Broadcast Act, and I think, in Rogers' case, the reason that they gave was there are movies everywhere; everybody's playing movies, when that's absolutely not true at all, particularly for Canadian films.

8784   I would defy Rogers to point out where all the Canadian films are that they feel that has clouded the marketplace.

8785   THE CHAIRPERSON: I'm trying to look at it from Rogers' -- if I'm Rogers, I'm showing films pursuant to commitment, and I make money, why am I asking to be relieved of that commitment?

8786   It's a very cheap way of saying to the Commission "I'm a good citizen, I have this commitment and I'm living up to it" and you make money to boot.

8787   They are being asked to be relieved from it. Can only be because it's not making money.

8788   MR. EAST: No, it probably means that there's a better way to make more money.

8789   THE CHAIRPERSON: Okay. Well, Rogers has a chance to make a written submission in response to interveners like you.

8790   MR. EAST: Okay.

8791   THE CHAIRPERSON: It will be interesting to see what they have to say on this point.

8792   MR. EAST: Okay.

8793   THE CHAIRPERSON: Now, what about specialty channels? Do any of them have an obligation to show feature films like Citytv has?

8794   MR. EAST: They have not specific feature films, it's drama commitments which include feature films.

8795   THE CHAIRPERSON: And the VODs?

8796   MR. EAST: The VODs --

8797   THE CHAIRPERSON: And the movie channels, they have --

8798   MR. EAST: Yes.

8799   THE CHAIRPERSON: They are committed to --

8800   MR. EAST: Digital cable do.

8801   THE CHAIRPERSON: Yes. And are those working to your satisfaction?

8802   MR. EAST: They're working but they're not -- they don't have huge audiences and they don't create huge sources of revenue quite yet.

8803   I mean, VOD is growing, but the digital cable, they're a welcome source of revenue but they don't amount to that much in truth.

8804   THE CHAIRPERSON: Does your membership have any figures us showing how much money they make from OTA, how much money they make from VOD, how much money they make from movie channels and so on?

8805   MR. EAST: In terms of breakdown?

8806   THE CHAIRPERSON: Yes.

8807   MR. EAST: We could certainly get that for you.

8808   THE CHAIRPERSON: Okay. I think that would be helpful, just to --

8809   MR. EAST: Okay.

8810   THE CHAIRPERSON: You are telling me that OTA is still the biggest, or was the biggest most lucrative part --

8811   MR. EAST: Yes.

8812   THE CHAIRPERSON: -- of your distribution on television. Anything to back that up would be helpful.

8813   MR. EAST: Okay.

8814   THE CHAIRPERSON: Now, you make reference here to the fact that in the U.K. on average a person sees 78 films, 56 are viewed on television. That's the U.K.

8815   Do you know what the figures are for Canada?

8816   MR. EAST: We don't know. Actually the Minister asked us that very same thing last week and I wish we had those statistics.

8817   I suspect they will be lower just because there's not that many movies on TV, the same proportion doesn't exist in the U.K.

8818   But what it speaks to is the huge consumer demand that still exists to watch movies on television, much greater than DVD and certainly much greater than theatrical.

8819   And you can understand why television broadcast is so important to the feature film industry.

8820   THE CHAIRPERSON: Yes. Now, on page 2 of your submission you say:

"The situation has now reached a critical point." (As read)

8821   THE CHAIRPERSON: I presume you're talking primarily about City.

8822   If we, contrary to your pleading, would not accede to your wishes and allow City to not having to renew the commitment for feature films, what would be the impact on your industry?

8823   MR. EAST: If they stopped --

8824   THE CHAIRPERSON: In effect, they showed --

8825   MR. EAST: I think it's starting to happen. I think, as I pointed out, the minimum guarantees of distributors for films are dropping, they've dropped by, some estimates, as much as 25 percent.

8826   THE CHAIRPERSON: But they're still living under that licence commitment, that condition of licence. Their licence has not -- the one that we granted them at the time of take over by Rogers still exists at this moment. So, presumably at this point in time they're still living up to their hundred films per --

8827   MR. EAST: Yes, but they had a lot -- when they acquired the stations, they had a lot of films already under contract.

8828   THE CHAIRPERSON: I see.

8829   MR. EAST: I think I have two movies -- my members report that two movies have been sold. It might be two or four.

8830   THE CHAIRPERSON: Yes.

8831   MR. EAST: I could only find two examples of new purchases by City.

8832   So, what distributors are doing is they're looking into the future. Executives at City are saying, we're not in the movie business any more, so when they're negotiating with producers to put up the minimum guarantee for the film, they're assuming that Citytv licences are not going to be there.

8833   They know that CBC is maybe doing two or three a year and they know that other premium cable stations, like Showcase and History, have stopped buying in the volumes that they have.

8834   So, they're looking at their numbers and they're going, well, we can't afford to offer you what we were offering you before because the television revenues are not there any more.

8835   THE CHAIRPERSON: Okay. Thank you.

8836   Do any of my colleagues have any questions?

8837   Okay. Well, thank you very much.

8838   MR. EAST: Thank you.

8839   THE CHAIRPERSON: And let Maître Dionne just review the undertaking, please.

8840   MS DIONNE: Yes, thank you, Mr. Chairman.

8841   I have two undertakings. To provide data of the 2007 and 2008 figures as asked by the Chairman demonstrating that over-the-air remains the most lucrative window for feature films.

8842   Also, provide a breakdown of the film revenues on OTA, specialty pay and VOD.

8843   I would ask that you provide the information before or on May 11th, copying Rogers. They will have until May 13th to reply to that information.

8844   Thank you.

8845   THE CHAIRPERSON: Okay, thank you.

8846   I think that ends our session for today, Madam Roy.

8847   THE SECRETARY: Yes. I would just add for the record, Mr. Chairman, that Mr. Aaron Goldman and Alberto Patella who were scheduled today will not be appearing today. This panel has been rescheduled to tomorrow and will be last appearance of the day.

8848   Thank you.

8849   And we'll resume the hearing tomorrow 9:00 a.m.

--- Whereupon the hearing adjourned at 1450, to resume on Thursday, May 7, 2009 at 0900

   REPORTERS

____________________      ____________________

Johanne Morin         Monique Mahoney

____________________      ____________________

Madeleine Matte         Beverley Dillabough

Date modified:

2009-05-07