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 7, 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 7, 2009

- iv -

TABLE OF CONTENTS

   PAGE / PARA

INTERVENTION BY:

Writers Guild of Canada   1600 / 8857

Directors Guild of Canada   1612 / 8925

Canadian Film & Television Production Association   1667 / 9251

Fédération des communautés francophones et acadienne   1734 / 9591

English Language Arts Network   1786 / 9881

Canadian Media Guild   1818 /10076

Aaron Goldman / Alberto S. Patella   1860 /10323

   Gatineau, Quebec

--- Upon resuming on Thursday, May 7, 2009 at 0900

8850   THE CHAIRPERSON: Good morning. Bonjour.

8851   Madame la Secrétaire, commençons.

8852   LA SECRÉTAIRE : Bonjour, Monsieur le Président.

8853   Before we start, for the record I would like to inform you that the Asian Television Network, which is item 56 on the Agenda, has indicated they will not be appearing at this hearing.

8854   Également aux fins du dossier, le Conseil de la Culture de l'Abitibi, article 20 à l'Ordre du jour, a indiqué également qu'il ne comparaîtra pas à cette audience.

8855   I would now invite Writers Guild of Canada and Directors Guild of Canada to appear as a panel and make their presentations.

8856   We will start with Writers Guild of Canada. Please introduce yourselves and you have 15 minutes to make your presentation.

INTERVENTION

8857   MS PARKER: Good morning. My name is Maureen Parker and I am the Executive Director of the Writers Guild of Canada, a national association representing 2,000 professional screenwriters.

8858   To my left is Rebecca Schechter, an award-winning screenwriter and our President, and to my right, Cal Coons, screenwriter and show winner of the television series, "Murdoch Mysteries" broadcast by Citytv.

8859   Also with us today is Kelly Lynne Ashton our Director of Policy.

8860   The WGC has been preparing for standard licence renewal hearings for years. I'll bet you never thought you'd hear us say this, but we agree that you made the right decision to have a restricted licence hearing for short-term licences in light of the current global financial crisis.

8861   But, as this hearing has progressed, we have heard the broadcasters and the Commission discuss many policy issues such as fee for carriage, definitions of priority programming and conventional broadcaster and more.

8862   So, we have found ourselves over the course of the hearing throwing out our previously prepared comments on the one-year renewal and, instead, looking at some of the larger policy issues.

8863   Given the scope of the ongoing discussions, we urge the Commission not to make any policy changes, even on a short-term basis, which could have an unforeseen impact on the Canadian broadcasting system.

8864   The discussions seem to suggest that there is a problem in local television -- local broadcasting. If that is the case, we encourage the Commission to deal with that matter through simple fixes such as an enhanced LPIF or harmonization of exhibition requirements that will target and have an immediate impact on local programming and local stations.

8865   If the CRTC wants to provide new revenue streams for local programming, then the broadcasters must make clear commitments to spend it on Canadian programming.

8866   If, however, the problem is the structure of conventional television and how it fits with specialty television, simple fixes will not suffice. Those issues need to be postponed until we have a policy hearing.

8867   In the interim perhaps the Commission could renew the private conventional licences on a short-term basis without any substantive changes.

8868   Rebecca?

8869   MS SCHECHTER: Thank you.

8870   The WGC and our colleagues in the creative community feel that we are the only ones appearing before you who put Canadian content first. We don't answer to shareholders, but to Canadian audiences. These audiences, as demonstrated by a Harris/Decima poll, feel that it's important to have television programming that:

"...reflects Canadian society, values and perspectives." (As read)

8871   MS SCHECHTER: Prior to the 1999 policy, broadcasters had conditions of licence related to both expenditure and exhibition of under served categories of Canadian programming; namely, drama, variety and documentary. These conditions of licence were imposed by the CRTC because broadcasters repeatedly failed to meet their licence application promises or the Commission's expectations.

8872   By the late 90s this regulation had created a thriving Canadian television industry with high audience numbers. Then came the '99 Policy decision which decimated our industry by eliminating specific expenditure and exhibition requirements for drama.

8873   Now the private conventional broadcasters are looking to the CRTC to help them with new revenue streams and reduced Canadian content obligations in order to rescue what they claim is a failed business model.

8874   So, are we in the middle of a short-term economic crisis, or suffering from a long-term structural failure, or is it both?

8875   From our view, the Canadian broadcasting industry is healthy. In 2008 $2-billion was spent on Canadian television, French and English production, which created 58,000 direct jobs. These were highly skilled jobs based in a knowledge economy.

8876   Private conventional broadcasters earned revenues of over $2-billion in 2008, specialty broadcasters earned a combined ad and subscriber revenue of $2.9-billion and cable and satellite companies had revenues of $8.2-billion.

8877   Until this year all elements of the broadcasting system were forecasting growth. Now, due to the global recession, ad revenues are threatened and broadcasters are facing losses.

8878   The broadcasters' solutions require policy changes. Although we do not agree that this is the proper time for a policy discussion, we feel that we need to address some of the policy issues raised.

8879   On the role of conventional television, the Chair has asked broadcasters what distinguishes conventional television from specialties.

8880   Our vision of conventional is that its method of delivery and its revenue streams are not what distinguish it from specialty services. Conventional is and always has been a mass market audience pleaser, while specialty services have reached out to niche audiences.

8881   It's the same in the U.S. where network television still targets mass audiences and cable channels target niche audiences. That's because audiences continue to want a variety of experience on their television.

8882   Therefore, specific regulation appropriate to whether the service is mass market or niche is required. This could mean a minimum CPE for all services with specific exhibition requirements and/or priority programming requirements for conventional mass market broadcasters.

8883   Cal?

8884   MR. COONS: Priority programming.

8885   The CRTC Over-The-Air Policy decision in 1999 expanded support to priority programming. Priority programming was intended to both reward broadcasters for their drama successes, like "Road to Avonlea" and "Due South", while also extending support to more under serviced categories.

8886   What was the result? Broadcasters got the flexibility they asked for and spending on Canadian drama plummeted from five percent of ad revenue in 1999 to a low of two percent in 2007, even including spending on benefit packages.

8887   Now, the broadcasters are asking for even more flexibility. In our experience, flexibility is a code word for cheap, Canadian programming.

8888   They already have a huge amount of flexibility inherent in the definition of priority programming. Let's remember that priority programming is only eight hours out of a possible 168 broadcast hours per week.

8889   Foreign to domestic spending ratio.

8890   The Commission is right to draw attention to rising expenditures on foreign programming. To be clear, the problem isn't foreign news or information programming, the real problem is broadcasters competing to get the latest big budget drama from Hollywood.

8891   Last year English-language private broadcasters spent $490-million on foreign drama but only $54-million on Canadian drama. The explosion in foreign spending started three years ago, right after these newly consolidated businesses gave broadcasters deep enough pockets to have bidding wars in Hollywood.

8892   But broadcasters keep telling you that they need to spend more and more on U.S. programming because they need to subsidize Canadian programming. In fact, they say that Canadian programming cannot and will never make them money.

8893   In response, along with our colleagues at the CFTPA, ACTRA and DGC, we commissioned a study by Nordicity entitled "Analysis of the Economics of Canadian Television Programming" to address these claims.

8894   The study was released this morning. After interviews with advertising executives and studies of CAVCO and CRTC data, the study generated a well-developed estimate of advertising revenue earned by both original and repeat broadcasts of Canadian one-hour and one-half-hour drama programs.

8895   The bottom line is that Canadian drama programs are broadcast over multiple services owned by the same company and regularly earn more than the broadcaster's investment in licence fees, promotion and administration costs.

8896   Canadian drama may not earn as much as American drama programs, but committing to Canadian drama is not a financial burden.

8897   Further, Canadian drama needs to be protected on conventional and specialty airwaves. In Canada we must never allow our own stories to become a niche product. There already isn't enough Canadian drama on conventional television. Any policy that tries to address foreign to domestic spending ratio must not put Canadian drama on conventional television in a worse position.

8898   We applaud the Commission for recognizing the imbalance between the foreign and the domestic spend with the 1:1 ratio, but we do not think that it will solve the real problem, which is clearly drama.

8899   Policies to reduce the excessive spend in Hollywood should target the specific problem; i.e., the conventional expenditure on foreign drama.

8900   It may be possible to look at spending on a station group basis as realistically programming and administration costs are amortized across the station groups. The CRTC could, therefore, set expenditure requirements across station groups, provided that there are different sub quotas on conventionals and specialties for drama or maximum targets for foreign drama.

8901   It may actually be more equitable to return to the CCAU's proposed expenditure requirement for drama of seven percent of conventional ad revenue.

8902   We urge the Commission to require conventional broadcasters to maintain spending on priority programming at current levels for the length of any renewal term.

8903   We look forward to addressing the imbalance at a full policy hearing next year.

8904   MS PARKER: We will now turn to the specific renewal applications.

8905   We only have brief comments as we were not provided with historical data per broadcaster or projections for more than one year.

8906   CTV applied for an administrative renewal with no changes to their conditions of licence. If the CRTC decides to grant one-year administrative renewal, then we have no comments. Administrative renewal means no change and we can live with that.

8907   We would, however, object to the CRTC making any changes to CTV's conditions of licence or extending the renewal past one year.

8908   Canwest has asked for the most concessions. Our biggest concern is the request to eliminate priority programming on the basis that it generates only 10 percent of prime time audience.

8909   This is a self-serving argument. If you do what they do now and schedule priority programming on weekends and other fringe time slots, if you only commission low-budget programming, if you use up to 2.5 hours per week of your schedule on entertainment magazine shows with little Canadian, then of course your audiences for priority programming will be lower than those for shows like "House" and "24".

8910   Allowing Canwest to eliminate priority programming under their circumstances is rewarding them for defying the spirit of the Broadcasting Act.

8911   Rogers has also asked for elimination of priority programming but for different reasons. They believe that the Citytv stations are local stations.

8912   If priority programming is eliminated, how will Rogers fill their prime time schedule? They will still have overall Canadian content programming obligations, but the schedule will be full of inexpensive Canadian lifestyle and reality shows surrounded by foreign programming.

8913   We urge the Commission not to agree to this.

8914   To conclude, we want to bring this discussion back to the heart of the matter, Canadian content.

8915   If the CRTC agrees with the broadcasters that a structural policy review is required, then we ask you to raise the question: Why should Canadian conventional broadcasters exist if they won't do Canadian content?

8916   We need to start talking about opening up the Canadian broadcasting system to foreign competition licensed with enforceable Canadian content obligations. The Broadcasting Act promises Canadians that they will have broadcasters who:

"...provide through its programming a public service essential to the maintenance and enhancement of national identity and cultural sovereignty." (As read)

8917   MS PARKER: If they don't want to do that, maybe NBC or CBS will.

8918   We recommend that the Commission provide one-year administrative renewals to each of the conventional applicants and schedule a full policy hearing for the next year to give all of the stakeholders time to properly prepare.

8919   This is a sacrifice to the artistic community, but one that we're willing to make under the current financial circumstances. Following the policy hearing, we need group licensing.

8920   We are concerned, however, that the scope of those hearings will be so complex as to make effective participation for small groups such as ourselves extremely difficult. We ask you to please take into account the creative community when you're structuring these hearings.

8921   We thank you and we'd be happy to answer any questions you may have.

8922   THE SECRETARY: Thank you very much for your presentation.

8923   We will now proceed with the Directors Guild of Canada.

8924   Please introduce yourselves and you have 15 minutes.

INTERVENTION

8925   MR. ANTHONY: Thank you.

8926   Good morning, Mr. Chairman, Commissioners and Commission Staff.

8927   My name is Brian Anthony and I am the National Executive Director and CEO of the Directors Guild of Canada. The DGC is a national labour organization representing key personnel in the film, television and digital media industry with over 3,800 individual members.

8928   With me today is Grant Buchanan of McCarthy Tetrault LLP, our outside counsel.

8929   We are very pleased to appear before you to provide our comments in this important public hearing. Normally a licence renewal process like this is a time for the Commission to take stock of what the licensee has done over the last licence term and to set out new conditions of licence for the ensuing term.

8930   In this case, we understand that the current economic conditions make it difficult to set the terms for seven-year licences.

8931   Accordingly, even though the DGC feels strongly that certain conditions of licence need to be tightened, not loosened, in our written submission we have concurred with the Commission's notion of the short-term licence renewals for all of the Rogers, Canwest and CTV stations -- with no changes to priority programming or to the independent production rules.

8932   That would allow all parties, both the broadcasters who want the rules relaxed, and the interveners, like the DGC, who want them tightened, to have a detailed and appropriate policy discussion.

8933   While this may seem like a straight forward enough recommendation, there are two caveats. First, we only recommended a freeze with respect to the priority programming rules and on the independent production rules. We are generally expressing no opinion on the remaining rules.

8934   And, second, if the DGC had understood that the Commission were considering a renewal longer than one year, we would not have taken this position. We have been waiting a decade to get the Canadian drama dilemma fixed and we do not wish to postpone that discussion for another two years if we do not have to.

8935   However, we have been trying to keep up with these proceedings, and if the Commission were to prefer a two-year renewal rather than a one-year renewal, then the DGC would reluctantly go along with it. But, in that case, there needs to be some kind of floor set for spending on Canadian drama over the two-year licence period. This is especially true given that it appears impossible to institute any sort of 1:1 ratio as originally contemplated.

8936   Since we are midway through the 2009 year, we suggest using the spending on Canadian drama for 2008, the last year for which data are available. That amount should become the floor for 2010 and 2011 if the Commission opts for a two-year renewal.

8937   And, to be fair, the figures should fluctuate up or down based on the increases or decreases in broadcasters' revenue. We would just ignore 2009.

8938   That brings me to the Commission's first subject area where you asked interveners for their thoughts with respect to, and I quote:

"The appropriate contributions to Canadian programming (local, priority and independently-produced programming), given the current economic conditions." (As read)

8939   MR. ANTHONY: The applicants say they want lower numbers of hours and a broader definition of priority programming if it is to continue to exist at all.

8940   The Directors Guild does not agree.

8941   If we rewind to 1999, the Commission widened the definition of priority programming significantly. I was going to say that they allowed everything except the kitchen sink, but even the kitchen sink would be okay if it were produced outside of Vancouver, Montreal or Toronto.

8942   In addition to drama, the new rules also allowed entertainment magazine shows, regional production and so on and had no limit on repeats. The Commission said in its Public Notice in 1999:

"The Commission has defined a framework which, with the economic realities of a competitive environment as a starting point, maximizes flexibility for broadcasters." (As read)

8943   MR. ANTHONY: You apparently didn't maximize the flexibility the way they would like because they're back looking for even more and they would like to air fewer than the eight hours a week they are currently obliged to do.

8944   In the DGC's view, this is the wrong approach.

8945   Moreover, they have asked to have reality shows included as priority programming. Let us recall that priority programming superseded what was referred to as the under-represented categories. These were the difficult to finance forms of Canadian content that were deemed to have a special importance under the Broadcasting Act but which would otherwise not be produced or aired by OTA broadcasters.

8946   Will reality shows really not be made unless they become priority programs? Regrettably, the broadcasters are now seeking a regime with no expenditure rules and watered down exhibition requirements.

8947   Let us recall that in the past the Commission has had no problem with requiring both exhibition and expenditure requirements.

8948   In 1999 the Commission's decision to abandon expenditure requirements was a significant victory for conventional broadcasters. They no longer had any spending requirement and their chief remaining regulatory obligation was to air eight hours of Canadian programming a week in prime time. Even then, as noted, there was no limit on repeats and a very broad definition of priority programming.

8949   The Commission believed the broadcasters when they said that economics would compel them to air top quality Canadian programming because every minute of the schedule was important.

8950   Within three years, however, expenditures on Canadian drama had fallen significantly. The Commission was so concerned that it called a special process to deal with it. The Commission stated in 2003 that, and I quote:

"Canadian drama should be the cornerstone of the Canadian broadcasting system." (As read)

8951   MR. ANTHONY: Whatever happened to that idea?

8952   Although some interveners argued for the reinstatement of the expenditure rule, the Commission opted instead for a carrot rather than a stick approach by offering broadcasters extra advertising minutes in exchange for more Canadian drama.

8953   The Drama Incentive Plan of 2004 was unsuccessful and by 2007 the Commission had lifted the advertising limits for OTA broadcasters. The unsatisfactory state of Canadian drama, and the lack of broadcaster support for it, has been well documented.

8954   If this were a normal licence renewal, we would have brought forward studies that we are preparing for the policy hearing for the seven-year renewal process. We would also have required access to the financial projections for the full term in order to properly prepare our intervention.

8955   But since this is only a hearing relating to a very short term, and since the Commission has not required such financials to be provided, the DGC is requesting a status quo period with respect to priority programming, spending on Canadian drama and the independent producer rules.

8956   Refraining from seeking additional requirements is viewed as a significant concession within our community, given that our members view the current rules as allowing an unacceptable situation to persist. But we are realistic and we have gone along with this short-term idea.

8957   We are also very concerned about granting any temporary flexibility in this particular area. It was a wise man who once remarked that, "There is nothing more permanent than a temporary situation in Ottawa".

8958   And I will remind you that income tax was introduced in the early 1900s as a temporary measure.

8959   I hope we have been clear with respect to drama and priority programming. We seek no definitional changes, a floor on Canadian drama spending and the shortest practicable renewals.

8960   Within the priority programming area, the Commission also asked for comments relating to independent production. The current requirement is that 75 percent of the priority program hours must be acquired from independent producers.

8961   It seems obvious to us that if you consider the broadcasters asked to have the priority program rules rejigged, and then add to it the desire to eliminate the independent producer, you can paint yourselves a pretty clear picture of the race to the bottom that would ensue.

8962   Independent producers add a valuable element of diversity to the system, and handing the production of priority programming over to the broadcasters so they can produce it in-house is not the right solution.

8963   Let me turn to another area where the Commission asked for thoughts; namely, the 1:1 ratio between spending on U.S. versus Canadian programming.

8964   You are not the first Commission to be concerned. In fact, in a 1986 Commission decision renewing the Global licence, the Commission said, and I quote:

"There is a growing imbalance between what the licensee spends on Canadian programming on the one hand and on foreign product on the other." (As read)

8965   MR. ANTHONY: The Commission of the day made sure that they had both exhibition and expenditure requirements which helped to mitigate that imbalance.

8966   But with the removal of expenditure requirements in 1999, OTA broadcasters have constricted their spending on Canadian drama and have significantly increased their spending on U.S. drama.

8967   We agree with the Commission that this is a cause for concern. But we also understand and agree with the broadcasters that this is a big ship that cannot be turned around in the short term that is under discussion at this hearing.

8968   That said, we do not agree with some of the concerns that have been expressed with respect to your proposal to move to a 1:1 ratio. It has been done before by the Commission.

8969   In fact, in the 1980s, pay television had a 60:40 Canadian:U.S. spending rule and the American studios did not behave in a retaliatory manner. And the suggestion that if you implement such a rule the studios would do things like eliminating geo-blocking and allowing their product to be accessed over the Internet in response, seems an unlikely proposition from where we sit.

8970   All last week you were told again that the revenues from U.S. programs drive Canadian production. But, more to the point, it is the profits, not the revenues, from those programs that matter. And if broadcasters are spending far too much, then the profits are smaller than they should be and, therefore, the alchemy to which they allude is not maximized.

8971   Let us be clear. Given a choice between having a direct expenditure requirement on Canadian drama and relying on broadcasters to funnel profits from U.S. programming into a genre in which there is no requirement to do so, you can guess where we stand.

8972   But we would recommend that if you go this route, you clearly separate conventional television from specialty services. The latter already spend a significant percentage of their programming budget on Canadian programs.

8973   If you blend the over-the-air services with specialty services in calculating the 1:1 ratio, you end up with the same predicament we have now and nothing is accomplished.

8974   The proof of this became evident when last week Canwest acknowledged that they are about 1:1 now as a company even with their sub-standard spending on Canadian drama on the OTA side.

8975   One final suggestion before leaving this issue is to repeat the recommendation we made in our written submission that you obtain copies, in confidence, of the broadcasters' studio deals and satisfy yourselves as to their multi-year nature and rollover provisions.

8976   Mr. Chairman, you and Mr. Fecan had an exchange last week where both of you acknowledged that part of the current problem with conventional broadcasting was structural and part of it was cyclical and you indicated that:

"I guess I have trouble figuring out which is which." (As read)

8977   MR. ANTHONY: We agree that this situation is confusing. Moreover, we think everyone would agree that we are passing through a particularly opaque period. Nobody knows for sure where we are going.

8978   Indeed, when the Commission wrote to the DGC denying us access to certain financial data that we wanted in order to intervene more effectively, we were told that, and I quote:

"Given the prospect of group-based licence renewals in 2010, it is difficult for broadcasters at this time to provide reliable financial projections without knowing with certainty the regulatory framework under which they will be renewed. Therefore, the Commission does not consider that the public interest will best be served at this time by focusing on projected data for the 2010 broadcast year or beyond." (As read)

8979   MR. ANTHONY: Fair enough. But if we're going to be talking about a longer period, then we want to be able to analyze the financial data.

8980   Our concern with a longer period is that it would provide the opportunity for the broadcasters to significantly cut spending on Canadian programming which may be difficult to reinstate later on.

8981   That explains, at least in part, the need for a minimum spending requirement on Canadian drama.

8982   Before I conclude, you asked about two other things. First, the LPIF. That's not our area of expertise, but we wanted to remind you that the additional one percent of BDU revenues was our idea, our idea years ago and we wanted it directed into Canadian dramatic production.

8983   We are pleased that we were able to convince you at least that the one percent was affordable and useful for Canadian production of some sort, although we still have the drama problem to resolve.

8984   Late last week this discussion took an unpredicted and, in the DGC's view, unacceptable twist. There has been a discussion about increasing the one percent LPIF to a larger amount, even as high as three percent. The Bell submission actually proposed, as part of the Freesat proposal, to divert two percent of the four percent that it currently contributes to the CTF into the LPIF instead.

8985   This element of the Freesat proposal is completely unacceptable to the DGC.

8986   Second, conversion to digital. We are in favour of any scheme that avoids wasting valuable resources on unnecessary transmitters. Whether it's a version of Freesat, the hybrid model, the Canadian Media Guild's concept or some other proposal, the idea should be to spend as little as possible on infrastructure and as much as possible on Canadian programming.

8987   We have some thoughts on solving the OTA dilemma and, before closing, we would like to add that there seems to be quite a number of ways to get money into the hands of OTA broadcasters if you and/or the government of the day feel inclined to do so.

8988   Some of these have been mooted here and at the Heritage Committee over the last couple of weeks and include:

8989   Expanding the quantum of the LPIF and re-definition of incremental;

8990   Elimination of Part II fees for OTA broadcasters and refunding the monies currently the subject of litigation;

8991   The institution of some variant of fee for carriage;

8992   The introduction of some variant of Bell's Freesat, but not one that diverts funds from the CTF;

8993   The arbitration of the distant signal discussion and the avoidance of linkage with other issues;

8994   Shrinking and harmonizing the local programming requirements;

8995   The introduction of the Sarkozy Model - and I do not refer to Carla Bruni - and getting the CBC out of advertising; and

8996   Elimination of the need for new transmitters in the digital transition.

8997   There may be more, such as solving the pharmaceutical advertising issue. But surely shrinking Canadian content programming obligations should be at the very bottom, the very bottom of anyone's list of methods of restoring the health of Canadian OTA television broadcasters, if indeed the Commission were to determine that it should do so.

8998   In particular, as noted previously, it was only a few years ago that the Commission indicated that:

"Canadian drama should be the cornerstone of the Canadian broadcasting system." (As read)

8999   MR. ANTHONY: We need to work on that problem in a serious way and any solution that might effect changes in the drama area or contributions to the CTF, even a solution that is envisaged as a temporary solution, ought to be rejected out of hand. We think a short-term renewal with no changes to the priority programming definition or the independent production requirements, coupled with a floor on Canadian drama spending in 2010, and 2011 if necessary, is the way to go.

9000   And we stand ready to participate in the next process as soon as the Commission's calendar permits.

9001   That concludes our oral remarks and we would be happy, Mr. Chairman, to respond to any questions you might have.

9002   Thank you.

9003   THE CHAIRPERSON: Thank you for your submissions.

9004   Ms Parker, I'm somewhat surprised by your opening, sort of slightly negative comments on the process and that we discussed policy issues.

9005   I thought that our Notice of April 15th clearly said the hearing will be conducted in two parts. The first part will deal with broad sectoral issues and the second part will address issues specific to individual licence renewal applications.

9006   I don't think we could have been clearer about the fact that we were going to discuss policy issues.

9007   Why do you take issue with the fact that this hearing addresses policy issues as well as licence renewal issues?

9008   MS PARKER: I take the point, Mr. Chair.

9009   I think because we felt that we've been working with one hand behind our back. We don't have access to financial data, the data that was filed, particularly CTV. We don't have projections. We don't have past historical data. It is very difficult for us to go into policy review without the ability to examine all of the facts and figures.

9010   We are surprised by the scope of the hearing. We are surprised in terms of -- I beg your pardon? Please join me, yes.

9011   MS ASHTON: We thought that part of your notice was to restrict the scope to a manageable number of issues so that we -- because we were only talking about a limited term, whether it is one year or two years, and the conversations that have been taking place in the last week or so have been very wide-ranging, such as what is the nature of conventional television.

9012   So we feel that this is taking us to a much broader level of discussion than originally anticipated.

9013   THE CHAIRPERSON: Okay. I don't see how we can discuss policy issues without being broad, how you can talk about such issues as we enumerated in our notice, when talking about the LPIF, which clearly is only eligible for conventional broadcasters, without going into what is the definition of conventional broadcaster.

9014   Be that as it may, you mentioned that you have a study by Nordicity which suggests that Canadian programming, while not as profitable as U.S. programming, is profitable. Are you going to introduce that to this hearing?

9015   MS PARKER: Yes, we are actually. Our colleagues at the CFTPA --

9016   THE CHAIRPERSON: Would you do that right now, please? Would you do it right now so we can put it on the record, so it is part of the record?

9017   MS PARKER: Unfortunately, the final copy is with the CFTPA, who will be here after the break. So we will get it to you as soon as --

9018   THE CHAIRPERSON: Yes, but I mean the deadline for people making submissions is on Monday, so the sooner we can put your study on the record --

9019   MS PARKER: It will be here today, Mr. Chair.

9020   THE CHAIRPERSON: Okay. Now, what exactly -- because I have spent two weeks now, and as you know, we had in camera sessions and we looked at the actual financial data of the broadcasters. We saw the figures of how much they spent on U.S. programming, how much revenue those programmings generate. We saw the same for Canadian. And the evidence without fail suggested that U.S. programming was profitable and Canadian programming was not.

9021   You say it is the opposite. You say it is profitable, not as healthy as Canadian, but it is not a financial burden. Have you got some figures on a ballpark average or whatever?

9022   MS PARKER: Yes, Mr. Chair. When you get a copy of the study, you will see that there is a model for profitability.

9023   Canadian programming does require a number of runs, both on conventional and specialty, in order for it to go into profit but anyone who watches Canadian television knows that our broadcasters run Canadian programming endlessly, both on specialties and conventional. They also amortize the costs and expenses across their entire station group.

9024   It is a particular business model that really can't fail. Does it generate the instant profits that the U.S. programs do? No, but this is the gift that keeps on giving.

9025   And just as an aside --

9026   THE CHAIRPERSON: We must have some bottom line.

9027   MS PARKER: I beg your pardon?

9028   THE CHAIRPERSON: We must have some bottom line.

9029   MS PARKER: There is a bottom line, the line is it is profitable.

9030   THE CHAIRPERSON: Profitable is a very loose word. It can mean you earn more than zero or it can mean that you have a profitability of 8 percent per year or whatever. Have you got some figures?

9031   MS ASHTON: We just got the final today. Do you have yours here?

9032   MS PARKER: This study is looking at different models of program. So what we looked at was a typical one-hour drama or typical half-hour drama and under what circumstance would that particular kind of program earn a profit for the broadcaster. So it is not an overall sector, Canadian programming makes X percent of profit.

9033   But given a typical scenario of this kind of a licence fee, standard administration costs, standard runs, and then we looked at advertising rates, so the average advertising rates for Canadian programming, what they would normally earn, discounted by repeat airings.

9034   So looking at that model, if you take a typical successful Canadian program, a one-hour drama, it is in profit on the first broadcast. A medium Canadian one-hour drama would take seven runs on conventional to be in profit but even a half-hour drama which is less successful, once it has had a number of runs on specialty after the conventional, it too can earn profit.

9035   They won't all earn profit but neither do all the American programs earn profit. Quite often they are cancelled after a couple of episodes.

9036   THE CHAIRPERSON: Okay, I am not going to get a number out of you.

9037   Going to 1:1 you suggested applying it would be difficult and wouldn't resolve the drama problem, which is your particular concern.

9038   Would a 1:1 restricted purely to drama make sense?

9039   MS PARKER: Yes, that would make sense, 1:1 to drama. And are you talking about across all of the station groups?

9040   THE CHAIRPERSON: Well, yes, each station obviously -- each network basically. I mean you are saying 1:1 doesn't make sense because drama would suffer. Since you are focused on drama, I am just wondering, a 1:1 purely focusing on drama, would that be, for instance, as helpful as your favourite idea of 7 percent of conventional revenue?

--- Laughter

9041   MS PARKER: We have put out other ideas. In fact, we are in the midst of working on a study that we are preparing for a policy hearing on alternative financing for Canadian drama with the DGC, our colleagues, and ACTRA.

9042   Going back to your first question, we have two concerns about the 1:1.

9043   The 1:1, when you look at it on its face, it addresses areas of foreign to domestic spend that are not the issue. The issue, for example, of foreign news, last year there was a $5,000 foreign spend on news. Now you put that in comparison to $490 million on foreign drama, you can see where the problem is. It is not with news, it is not with sports. The overall imbalance is between dramatic programming, foreign and domestic.

9044   Our other concern is what will happen with the CPE, the Canadian Programming Expenditure requirements. Those work for our industry and we wouldn't be in favour of any system where we would be giving up a CPE in exchange for 1:1 across all station groups unless we could absolutely verify the numbers, look at the formula.

9045   I mean we all listened to Ms Williams say last week that she believes they are already at a 1:1 and as our colleagues at the DGC mentioned in their presentation, that is not acceptable. That is ingraining a very bad status quo for us right now.

9046   THE CHAIRPERSON: Mr. Anthony, on page 7 of your presentation when you talk about conversion to digital, you talk about the Canadian Media Guild concept. I am not familiar with the Canadian Media Guild concept. What are you referring to?

9047   MR. ANTHONY: I will ask my colleague to speak to that, if I may.

9048   MR. BUCHANAN: This was simply -- their numbers are always significantly lower than the broadcasters' in terms of what they need in order to convert -- to do the conversion to digital.

9049   I don't know if they are going to be appearing in front of you but certainly we could dig up whatever it was and put it onto this process if it is not already there but they always have lower numbers and recommendations for you as to methods of --

9050   THE CHAIRPERSON: Okay. Lower numbers I understand but you said concept here, so I thought that was a different idea. No, it is okay.

9051   Secondly, on the LPIF, you make some comments on it and I agree with you, the discussion on the LPIF got totally out of hand and moved into other areas but one thing we did hear is that in effect directors and producers did not have much interest in local programming because it is short, it doesn't give you the recognition.

9052   What is your position on local programming? Is it true that Canadian producers and directors really focus on drama and that local programming is of relative little interest to them?

9053   MR. ANTHONY: Well, in terms of local stations, we want as many eyeballs as possible viewing the programs that we are involved in producing.

9054   There is a sort of affinity between local programming, especially local news, and creation of dramatic productions in that both are expensive to produce and both of them are sort of being offered up as being susceptible and both of them are worthy of discussion. The difference is that local programming tends to be ephemeral and dramatic production lives on and on and on.

9055   THE CHAIRPERSON: Yes, but you are saying drama should be the cornerstone of Canadian programming.

9056   MR. ANTHONY: Yes.

9057   THE CHAIRPERSON: Most of the conventionals say local programming should be the cornerstone of conventional TV. Those are not necessarily contradictory but --

9058   MR. ANTHONY: No.

9059   THE CHAIRPERSON: -- I wonder whether you support the idea that local programming has to be the cornerstone of conventional TV.

9060   MR. ANTHONY: I don't think we would agree with that. Do you?

9061   MR. BUCHANAN: (Off microphone)

9062   THE CHAIRPERSON: For the record, was that a no or a yes?

9063   MR. BUCHANAN: Well, we would like to say yes to both.

9064   THE CHAIRPERSON: Okay.

9065   Rita, over to you.

9066   COMMISSIONER CUGINI: Thank you, Mr. Chairman.

9067   Mr. Anthony, I think you used the term "you hope that you have been clear." I don't think you could have been more clear and the same of course for the Writers Guild because your positions are essentially: Do what CTV has asked us to do, renew administratively, absolutely no changes to anything, forget what Canwest has said, forget what Rogers has said, just renew administratively; correct, essentially?

9068   MS PARKER: Yes.

9069   COMMISSIONER CUGINI: You acknowledge, Ms Parker, in your submission that if they need new revenue streams, the LPIF is one; as well, you also support advancing the distant signal regime that we outlined in decision 2008-100. And that is it, that is really the bottom line of what you are asking us to do in this one-year renewal.

9070   So the big question there is: How do you feel that that is going to give any relief to the over-the-air broadcasters, given the economic situation in which the world finds itself, in the short term?

9071   MR. ANTHONY: I can speak to that if you would like.

9072   COMMISSIONER CUGINI: Please. Either one. These questions are directed to both of you because obviously your positions are similar.

9073   MR. ANTHONY: Similar. I think it buys us a bit of time. The Chairman and Mr. Fecan agree that it is difficult to know at this time whether the OTA problems are cyclical or structural and if we buy ourselves a year or two, we are hoping that it will become clearer.

9074   The economic tsunami will have passed and it will become clearer and clearer as we move out the other side of it, in better condition, we hope, which problems are structural --

9075   THE CHAIRPERSON: Can I quote you on that, that the economic tsunami will pass very quickly?

--- Laughter

9076   MR. ANTHONY: I did say hopefully. And so we are basically just treading water until we get out the other side and then we will be in a better position to speak to this.

9077   My colleague did have one point of clarification, Commissioner, to make on your earlier remarks.

9078   MR. BUCHANAN: It was simply that you stated correctly the position if it is only a one-year renewal and I think that is how you ended up that sentence. If it is longer than one year, then you have got to deal with the expenditures on drama.

9079   COMMISSIONER CUGINI: No, I understand that.

9080   MR. BUCHANAN: Okay.

9081   COMMISSIONER CUGINI: And as well, CTV's position is that if we were to deal with longer than a one-year renewal, they would come back to us and ask for different things.

9082   MR. BUCHANAN: I think everybody who thought it was a one-year stated their positions out on that and if it is going to be longer, people will want to reconsider.

9083   COMMISSIONER CUGINI: We get that.

9084   MS PARKER: If I may just add to that answer. I do hear what you are saying, Commissioner Cugini, it is a big ship to turn around. That is why we are asking for additional time to consider all of the ramifications of making any changes to priority programming.

9085   Our basic position is we don't think that Canadian content is the problem. These are consolidated businesses. We have all agreed -- we were all at these hearings in these rooms many times over the last couple of years -- to allow these entities to purchase specialty channels so they could amortize costs and expenses.

9086   The specialties are doing well and we do have to look at these as single entity businesses. Certainly, I think we all run our home -- I might lose money in one area but I have it in another, it is up to me to keep the books balanced.

9087   Canwest, we do appreciate that they have a difficult financial situation but the problem is not broadcasting. According to their own data, the problem is in the newspaper sector.

9088   While we empathize with them, it is not up to the Canadian taxpayer, the Canadian consumer or the Canadian audience to foot the bill for their mistakes. If they are against the wall, which we certainly see with the car companies, they have assets that they can sell.

9089   We have also brought forward a couple of ideas. We know that you are considering fee for carriage. We are not raising that as one of the issues that we are supporting, nor are we against it. We are going to leave that in your very good hands. You have all the data, you have the information.

9090   Our only position on fee for carriage is that we have to ensure that Canadians get something for it, and status quo is not acceptable.

9091   COMMISSIONER CUGINI: And that brings me to page 3 of your oral presentation this morning. You say:

"...simple fixes such as an enhanced LPIF or harmonization ... will ... have an immediate impact on local programming and local stations. If the CRTC wants to provide new revenue streams for local programming then the broadcasters must make clear commitments to spend it on Canadian programming."

9092   I don't quite understand that sentence. Are you saying that if we provide these new revenue streams that a commitment must -- to what must the commitment be made, to local programming or to Canadian programming, because isn't local programming Canadian?

9093   MS PARKER: Oh, absolutely! In fact, we are being generous in saying local programming. You know, it depends on what you decide to do with the LPIF. If you do decide to increase it from 1 to 3 percent, then there is certainly money in there for dramatic programming. If it is a 1-percent fund, then we do understand that that now has to go to local programming. So that is what we are saying, Commissioner Cugini.

9094   COMMISSIONER CUGINI: Okay, thank you.

9095   Ms Schechter, you said:

"...the only ones appearing before you who put Canadian content first."

9096   That was on page 3. On page 5, you say:

"In 2008, $2 billion dollars was spent on Canadian television production, which created 58,000 direct jobs."

9097   I see a disconnect in those two statements.

9098   MS SCHECHTER: I take your point there but I think that what we are meaning to say when we say we are the ones who care about content, it is that as the creators of the content, we are the ground of the system. The whole broadcasting system is there basically to put on air the things that we write and direct and act in. So really our primary concern is getting that to the audience.

9099   The broadcasters and the BDUs who come before you, although they are totally dependent on us, seem to have a different set of interests that are bigger in their mind, which is their bottom line. Undertandably, they are businesses but I think that their perspective on content is different from the people who create it.

9100   Yes, there is a lot of money being spent in this country in our sector and we think that is a wonderful thing and I think we also believe a lot of that is being made because of the regulations that you make to require broadcasters to spend it.

9101   COMMISSIONER CUGINI: We have had this conversation before but it begs repeating.

9102   The only way to achieve all that you wish to accomplish is with over-the-air broadcasters. In other words, this Commission should not in any way look to transferring part of or all of the responsibility of priority programming to specialty. Although you do acknowledge that the specialty model works, there is high penetration of certainly a number of specialty services, and part of the problem is that the audience is moving to specialty.

9103   MS PARKER: May I just say that I think we dealt with this in our presentation because we have been listening to your discussions and we think that conventional television has a different role. It appeals to mass market. It is mass market programming, mass audience. It will never go out of style. You have to make programming that attracts mass audiences and that is obviously the challenge around that but that is here to stay.

9104   You know, there are certainly shows in the U.S., "Southland," a new cop show on Thursday nights, that is mass audience programming and we have to offer the same. Specialty is niche programming. The Canadian shows that are on niche programming like Showcase and others are quite different than what you would make and broadcast for conventional.

9105   They are two different beasts and in no way, shape or form should we say that conventional should be off the hook from making priority programming. They are still the largest -- they draw the largest number of eyeballs, the largest audience ratings, and they can certainly afford to put Canadian on the air.

9106   MR. ANTHONY: Commissioner, if I could add to that, I would just like to support what my colleague has said.

9107   We believe that conventional broadcasters are not going to disappear overnight and we feel that their obligations should be strengthened, and indeed, we look forward to returning to those discussions with you when you get to the policy discussions and the renewal of their licences on a longer-term basis.

9108   But that is where the eyeballs are, as Maureen as mentioned. That is where the advertising revenues go now and for the foreseeable future and that is where the money comes from to create Canadian programming and we don't think that they should be relieved now, or ever for that matter, of their obligations.

9109   Indeed, we feel -- and we will say this before the Commission when the time comes -- that their obligations should be more stringent.

9110   COMMISSIONER CUGINI: One of the -- well, the major theme for the CTV position is that they have multiyear deals not only with their U.S. program suppliers but as well with Canadian producers and so there is no point in changing any of those rules for the short term.

9111   Canwest and Rogers came before us and essentially said the same thing but pointed out that they would rather deploy their resources in the short term to local programming, and the resources being the compliance office and the measurement office and what it takes in order to prove that they have done their eight hours of priority programming and that 75 percent of that has been with independent producers, that it is not likely that in the short term there won't be eight hours of priority programming and, of that, 75 percent will be from independent producers.

9112   Do you not trust that this is true for both Canwest and Rogers? They also cite, of course, the fact that they will continue to spend the tangible benefits money, most of which is committed to independent producers and to priority programming.

9113   MS SCHECHTER: Commissioner, can you just recap that question?

9114   COMMISSIONER CUGINI: Essentially, the Rogers and Canwest position is: We are still going to do priority programming in the short term; 75 percent of that is going to come from independent producers. What we need is the flexibility to deploy the resources that we currently have that monitor compliance to other areas such as enhancing local programming.

9115   MS PARKER: You know, as one of the people, and I don't think I am alone, who actually sat through the '99 hearing and listened to Canwest -- they were different executives at that time but it is all in the transcripts -- they used the word "flexibility" a lot in 1999 as well and we lost, we lost as a creative community and I believe that Canadian consumers lost as well.

9116   You know, quite frankly, they said then they needed flexibility. We made the move to priority programming. You know the numbers, you know the story, you have heard us talk about it for 10 years, it is in my colleague's presentation.

9117   Whenever we give broadcasters flexibility, they do less Canadian content, and for us that is a fact. And we see that very much as the role and the priority of the Commission and the Broadcasting Act, to ensure that our broadcasters are making Canadian content.

9118   We are quite serious when we say maybe we need to open up foreign ownership and have a discussion about that because, you know, we are here, we have been here 10 years, more, we have the same discussion every time and it is not just disheartening, I think it is futile.

9119   You know, either they are going to make Canadian content and do it right or they should make the decision to get out of the business and maybe let someone else do it.

9120   MR. ANTHONY: Commissioner, if I may. I am a proud Canadian but when it comes to believing the OTAs' promises about doing all the right things, I am from Missouri, the show me State where seeing is believing, and we have seen them time and time again, as Maureen has said, make all these promises and not deliver.

9121   They will only do what you oblige them to do and that is why we are looking forward to coming back to the longer-term licence renewal hearings to talk about that because if you just take them at their word, they will do as little as possible, right down to doing nothing if they can get away with it.

9122   MS PARKER: Commissioner Cugini, we lived though the "Train 48" years, and that is not to say that that isn't a worthy program in many of its aspects but it is a very, very low-budget program, approximately $40,000 an episode, and that was the only drama Canwest made for two years.

9123   COMMISSIONER CUGINI: Mr. Anthony, just one final question for you because you do raise it in your oral presentation and that is the conversion to digital, although I appreciate it might not be the DGC's area of expertise.

9124   Ass you know if you have been following the hearing, even the hybrid model could mean that 8-9 percent of Canadians will lose over-the-air reception and I would hope that that is a concern for you because that loss of audience to the drama programming on over-the-air would have a significant impact, would it not?

9125   MR. ANTHONY: Well, without a close look at this -- and we are not convinced that it would have a significant impact. I will ask Grant to speak to that if I may.

9126   MR. BUCHANAN: It doesn't mean that we are oblivious to the social policy issue, it is just that we have heard a number of comments over the period.

9127   The Rogers folks seem to suggest that at 9 percent that we are not getting served by the traditional BDUs in Canada. There is a significant number who have unhooked and embraced the U.S. alternative, the black market and grey market. So it may not be 9 percent.

9128   There were some figures -- by the way --

9129   COMMISSIONER CUGINI: It could therefore be higher?

9130   MR. BUCHANAN: Pardon me?

9131   COMMISSIONER CUGINI: It could therefore be higher?

9132   MR. BUCHANAN: If there were 9 percent of Canadians not hooked up to Canadian BDUs, no, you would have 9 percent but if 5 percent of the 9 percent --

9133   COMMISSIONER CUGINI: I see.

9134   MR. BUCHANAN: -- were embracing the U.S. alternative you are not getting them back.

9135   COMMISSIONER CUGINI: Okay.

9136   MR. BUCHANAN: At least that would be the assumption.

9137   The other interesting thing that I haven't seen any numbers on here is tuning, because it may be that 91 percent of Canadians don't have service from a BDU but when we looked at it -- the last time I looked at it in Vancouver the percentage of tuning as compared to the percentage of penetration of BDUs was much smaller. People who didn't have cable or satellite carriage didn't watch TV or didn't watch very much of it.

9138   Now, that number is readily available and I think the Commission is still a subscriber to BBM. That is filled out on a ballot, so you can figure out quite easily by adding the French and English how much tuning is happening to people who do not get their service by BDU.

9139   All we are saying is it may not be 9 percent but any number is of concern to the Guild, I mean losing any subscribers, as it appears to be to the Commission, especially when it gets that large.

9140   I do remember when Cancom, when we switched the satellites, the decryption technology, we lost about 40,000 subscribers back then by switching and people found other alternatives and found a way home but this would be a larger number if indeed it is 9 percent.

9141   The immediate concern is it is poor people who can't afford cable and can't afford satellite and you are disenfranchising Canadians, a very legitimate public policy concern.

9142   I don't know that I have seen the evidence as to these other factors I am talking about, what percentage of that is black market, what percentage of tuning does that represent, and those other issues.

9143   COMMISSIONER CUGINI: Okay. Well, thank you very much.

9144   Those are my questions, Mr. Chair.

9145   THE CHAIRPERSON: Peter...?

9146   COMMISSIONER MENZIES: I just have a couple of questions along the lines of what I asked broadcasters, trying to figure out how much stake everybody has in this when they are talking and I think it is probably helpful and appropriate for the public record.

9147   What has the impact of the current economic downturn been on the directors and on the writers? How much pain have they been feeling over the last six months?

9148   MS SCHECHTER: We have been feeling pain since 1999 or about 2001.

9149   COMMISSIONER MENZIES: I don't want to talk about 1999.

9150   MS SCHECHTER: I know. I am just saying our business got cut in half then and it has come back a bit and now it is holding. It is holding below where it was before then. So in general, we have shows in production and they are still in production, and so there hasn't been an immediate effect from the downturn, although there are situations that are extreme, that are different.

9151   MS PARKER: Our statistical numbers are down, how many shows are going into production, absolutely, because, you know, the broadcasters provide the employment to our members. So absolutely, the number of production is down. We have seen a shift in the type of production from movies of the week, mini-series, into series. Now that is a taste and they are obviously looking for audiences.

9152   COMMISSIONER MENZIES: I am trying to get a sense of economic loss, job loss.

9153   MS PARKER: Job loss, it is very difficult for us to say that because we have a freelance workforce and so at any point in the equation people are unemployed for long periods of time.

9154   COMMISSIONER MENZIES: Okay. What would the average writer's earnings be annually?

9155   MS PARKER: Well, basically, we have -- I think our average -- and it's interesting. We just did these stats for our annual meeting -- $50,000 and below.

9156   COMMISSIONER MENZIES: That would be the average?

9157   MS PARKER: Yes.

9158   COMMISSIONER MENZIES: Okay, thank you, and the directors?

9159   MR. ANTHONY: Well, thank you for the question, Commissioner.

9160   Last year was what somebody has called a perfect storm. You should appreciate that our members work both in domestic production and in foreign service production. Nationally, the average is about a 50-50 blend. In parts of the country like B.C. it's over 80 percent and in Ontario it's 60 percent domestic, 40 percent foreign.

9161   Last year, in Ontario it was the domestic production activity that kept us alive and employed although it must be said that many of our members in Ontario were unemployed for six and eight months at a time. As we move towards the end of the year, the downturn in the economy had an effect on domestic production. The rise of the American dollar over the last year scared away a lot of service production.

9162   We have gone into the New Year with some signs of a dip in the Canadian dollar, some signs of recovery but this week we have seen the Canadian dollar creep back up over 85 cents, 86 cents and when you get to about 88 cents that's the kind of point at which foreign producers, American producers are scared away. So there is a lot of concern, sure.

9163   COMMISSIONER MENZIES: I understand. I'm just trying to get a sense of, like, are there more or less directors working now than there were six months ago generally?

9164   MR. ANTHONY: Less.

9165   COMMISSIONER MENZIES: Less. And what would the average director's annual earnings be?

9166   MR. ANTHONY: I don't have those data for you. I'm sorry.

9167   COMMISSIONER MENZIES: Can you get it? Is it possible to get it?

9168   MR. ANTHONY: I can try my best, yes.

9169   COMMISSIONER MENZIES: Because it's just helpful to understand what everybody's stake is.

9170   MS PARKER: Sir, can I just add something because I did bring my production sheets with me.

9171   COMMISSIONER MENZIES: Sure.

9172   MS PARKER: You know, one of the things we track are broadcast hours, you know, because we like to keep basically a spreadsheet so we can see how much employment in terms of hours we had in the last 10 years.

9173   So right now, and just as a point of comparison, in 2008 we had 628 hours of basically broadcast hours, employment for our members. Right now, we are projecting 421 for this year. So you can see that that's a loss of about 200 hours.

9174   COMMISSIONER MENZIES: Okay.

9175   MS PARKER: Writers are contracted and paid based on hours of production. They write a script, a one-hour script. They get paid for a one-hour script.

9176   COMMISSIONER MENZIES: Sure.

9177   MS PARKER: I guess, you know, that's just how we keep track. And, unlike directors, Canadians only -- Canadian writers, members of the Writers Guild, only work on Canadian production. All of the foreign production that is shot in Canada is written by our colleagues at the Writers Guild of America, American writers.

9178   COMMISSIONER MENZIES: Right, okay. Thank you.

9179   There is a point at which you confused me and this is on an entirely different topic. When you talk about you want to view the OTA sector, the conventional sector entirely separate from the specialties, but in the report that you talked about being released this morning you used the money that Canadian content earned on specialty to support the argument that Canadian content does indeed make money.

9180   That doesn't make sense to me. I don't understand how you can argue the specialty on one side and argue the separation on the other. I mean, they are either separate or they are not, right?

9181   You can't use -- you can't use specialty to support one argument and then dismiss it in the other argument.

9182   MS PARKER: Well, I think that --

9183   COMMISSIONER MENZIES: It's not whether the argument is good or not. It's that it's inconsistent and it confuses --

9184   MS PARKER: I understand the point you are making. I don't think that that's what we are saying. I think, with respect to the study, what we are saying is that there are two markets. There are two distinct markets. And the study does demonstrate that you need a certain number of runs on conventional before it goes to an afterlife on specialty.

9185   You know, that's how the Canadian broadcasting system works. You know you produce something. It's going to appear both on a specialty and on a conventional.

9186   Generally, things made for the conventional market air there first. That's what we are saying. That's why you need priority programming. That's mass market programming. It draws more eyeballs. It's generally bigger budget.

9187   Speciality programming is niche programming, less of a budget and with a very specific target and focus.

9188   But do they have to run on both in order to make money; certainly. That's how the business operates. When a producer licences their production to a broadcaster you know it is part of the deal that they are going to have both a conventional and a specialty run.

9189   COMMISSIONER MENZIES: Okay. And the last thing is something that made me raise my eyebrows, was your comments about foreign ownership which were interesting. But the impression I got from it was that the relationship between you and the major broadcasters is one of the things that might be broken.

9190   It sounded to me -- and I want to give you the opportunity to correct me or confirm -- that the assumptions about your value and your assumptions about their view of your value are long entrenched. And what you are saying is you would just as soon work for Rupert Murdoch as for another -- as what you have got in front of me.

9191   And that seems to be -- could you just tell me. I mean is this a professional -- or are there cultural aspects that are deeply entrenched here within the relationships that should be of concern to us?

9192   MS PARKER: I think that our position on this is that -- and certainly it's our full membership position. It's nothing that we concoct on the fly. We discuss this at length.

9193   Our position is that as creators we feel betrayed. And we feel betrayed because we have helped create businesses. Again, we believe the only reason that they have to exist is because of content and Canadian content.

9194   We are listening with great interest to the conventional broadcasters talk about their programs, their American programs and that they want exclusive rights for their American programs in their market. They are not their programs. They are American programs made in the U.S. by American studios. They purchase rights to distribute them and they use that as part of their business model. Their programs are what they create, and that's Canadian content.

9195   And imagine after you know 10 years or more -- and this isn't new as our colleagues at the DGC pointed out. It's been an ongoing issue for the last 50 years. You know, the reluctance --

9196   COMMISSIONER MENZIES: Sorry, did you say 50, five-zero?

9197   MS PARKER: 50, five-zero. Well, I shouldn't say that. I know. I have read the Peter Grant paper. I believe it is back to the seventies, the 1970s, late sixties -- we are also working on.

9198   COMMISSIONER MENZIES: Can I take this as a yes?

--- Laughter

9199   MS PARKER: Yes, I guess that would be 50 years. I guess you are right, yikes.

9200   I guess the point --

9201   COMMISSIONER MENZIES: Because I don't want to talk about the last 50 years. I just wanted to know --

9202   MS PARKER: No, we know.

9203   COMMISSIONER MENZIES: -- was I right to assume there is issues here?

9204   MS PARKER: Yes.

9205   COMMISSIONER MENZIES: Okay.

9206   MS PARKER: There are issues here. You know, again, what we need is to be able to work together. We want broadcasters to say we want to make Canadian content. We want to make the best Canadian content and we want to work together to get audiences.

9207   COMMISSIONER MENZIES: Yeah, I understand. Mr. Anthony, do you have a quick --

9208   MR. ANTHONY: Yes, Commissioner.

9209   Yes, sir, my colleague had a question or a point of clarification and I had a quick question for you.

9210   MR. BUCHANAN: This was on your earlier question about 1:1 not being in harmony with the study where you include specialties for certain places and don't -- it was actually when the Commission came out with the 1:1 ratio it did not include specialities.

9211   COMMISSIONER MENZIES: Okay.

9212   MR. BUCHANAN: So if you were going to include specialties you would have to change the ratio or, as the Chair suggested, maybe make it more targeted, maybe just look at drama.

9213   COMMISSIONER MENZIES: Okay.

9214   MR. BUCHANAN: But it was that 1:1 which would need adjusting.

9215   COMMISSIONER MENZIES: Okay.

9216   MR. ANTHONY: And the question I had for you, Commissioner, was regarding salary figures for directors. The Directors Guild has a membership that includes some 47 occupational classifications from directors; first, second and third ADs; program managers, program coordinators, production accountants, right down to what we call coneheads, the --

9217   COMMISSIONER MENZIES: Sure. I don't want to know about your administration and that. I wanted to know what --

9218   MR. ANTHONY: No, no, but I wanted to know was did you want to go after directors only or did you want data --

9219   COMMISSIONER MENZIES: Directors.

9220   MR. ANTHONY: Directors.

9221   COMMISSIONER MENZIES: Directors only, and do you share the writers' view on foreign ownership?

9222   MR. ANTHONY: I don't think -- you know, in terms of getting rid of the Canadian broadcasters and allowing --

9223   COMMISSIONER MENZIES: Oh, you would rather deal with people other than the ones you have been dealing with?

9224   MR. ANTHONY: No, no, not at all. Some of our best friends are Canadian broadcasters.

--- Laughter

9225   COMMISSIONER MENZIES: Thank you. That's all.

9226   THE CHAIRPERSON: Anyway, foreign ownership is not part of the agenda for this hearing, just to make it absolutely clear. It's not part of the agenda for this hearing.

9227   Louise.

9228   COMMISSIONER POIRIER: Yeah, I only have one question and it's to Mrs. Parker because in the last part of your document you say that -- well, I think you support a one year renewal. If the Commission goes in that direction it means that we will have a group licensing renewal in less than a year, and in between we will have also a policy hearing.

9229   And you say at the end of your document today that it will be so complex, as to make effective participation to small groups such as ourselves extremely difficult; please take the creativity community into account when you are structuring these hearings.

9230   So it's difficult to understand what you really mean by this, because if you support a one year renewal it means we will have to go through all those steps within a year. So what is your clear message?

9231   MS PARKER: Yes, that is the case. I guess what we want to ensure is that when we have a full policy hearing that we have the financial data in advance so that we can commission studies that we -- you know, we look at these things.

9232   We analysed this. This is serious stuff for us as well and we need time. We also don't have, you know, 10, 20, 30 people working in the executive office. This is it and, you know, we have to have time in order to analyze that data. We do not come in with huge rows of employees and staff.

9233   Also, with respect to scheduling, you know, if we are going to be intervening as we would, I imagine, on the various specialities, it would depend on how they are scheduled, can we afford to be in Ottawa for a two-week period? You know, all of those things have to be taken into consideration for, I would say, the creative community.

9234   COMMISSIONER POIRIER: Thank you.

9235   THE CHAIRPERSON: Okay, thank you. Those are your questions.

9236   Before I let you go, Mrs. Parker, I wanted to say I read your comments before the Heritage Committee yesterday. I am delighted to see that you support certain improvements to the Broadcasting Act, which clearly we would like to see too. The tenor of your comments is appreciated.

9237   Okay, thank you. We will take a 10-minute break now before we go --

9238   MR. MILLINGTON: Now, Mr. Chair, we have one undertaking.

9239   THE CHAIRPERSON: Oh, yeah. Go ahead.

9240   MR. MILLINGTON: And it was in response to Commissioner Menzies' question for the directors' average annual income. And I wasn't sure if that was for more than one year.

9241   COMMISSIONER MENZIES: Last year would be fine.

9242   MR. MILLINGTON: Just last year.

9243   And we could have that response --

9244   COMMISSIONER MENZIES: Or the most -- whatever you have that's the most recent. I don't want it to be a big --

9245   MR. MILLINGTON: And could we have that answer by May 13th, please?

--- Upon recessing at 1012

--- Upon resuming at 1029

9246   THE SECRETARY: Order, please. À l'ordre, s'il vous plaît.

9247   LE PRÉSIDENT : Commençons, Madame.

9248   LA SECRÉTAIRE : Merci, Monsieur le Président.

9249   We would now invite the Canadian Film and Television Production Association to make its presentation. Appearing for CFTPA is Norm Bolen.

9250   Please introduce your colleagues and you will then have 15 minutes.

INTERVENTION

9251   MR. BOLEN: Thank you.

9252   Good morning, Mr. Chair, Vice-Chairs, Commissioners and CRTC staff. My name is Norm Bolen and I'm delighted to be before the Commission as the new President and CEO of the CFTPA.

9253   The Association is here today to bring reasonable and constructive solutions to the table in this proceeding.

9254   I'm pleased to have with me today the heads of four of Canada's leading independent production companies.

9255   To my immediate right is Sandra Cunningham, President of Strada Films and Chair of the CFTPA Board of Directors. She is the co-producer of such Canadian feature films as The Statement, Being Julia, Where the Truth Lies and Fugitive Pieces.

9256   To Sandra's right is Tom Cox, President of Seven24 Films of Calgary and a member of our broadcast relations committee. Tom is co-executive producer of popular family drama series, Heartland, TV movies: Myer Thorpe, Waking Up Wally and the Sheldon Kennedy story and the Canada/U.K. co-production mini-series Burn Up.

9257   Also, Seven24 Films sister company, Alberta Film Entertainment, has co-ventured on many American movies, including Brokeback Mountain and The Assassination of Jesse James.

9258   To Tom's right is Mark Bishop, Partner and Producer of Marblemedia, an award-winning multi-platform content creation company. In 2008, Marblemedia received the "Company of the Year" award and Mark was named "Producer of the Year" as part of the Canadian New Media Awards.

9259   Marblemedia is the producer of such well-known and innovative multi-platform projects as This is Daniel Cook, This is Emily Yeung and deafplanet.com, the world's first television and online series in American Sign Language.

9260   To Mark's right is Ira Levy, Founder and Executive Producer of Breakthrough Films & Television, and co-Chair of our Broadcast Relations Committee. Among programs Ira has executive produced are children's programs, Atomic Betty and The Adventures of Dudley the Dragon; the half-hour drama/comedy program Less than Kind, and the documentary series Little Miracles and King & Country.

9261   CFTPA staff with us today are to my left, John Barrack, National Executive Vice-President and counsel; and to John's left, Mario Mota, Vice-President, Broadcasting Policy & Regulatory Affairs.

9262   Before we begin our presentation, we'd like to play a short video to give you a snapshot of what independent producers bring to Canadian broadcasting. Please roll the clip.

--- Video Presentation

9263   MR. BOLEN: The CFTPA recognizes the difficult choices the Commission must make in this proceeding. It is a balancing act of competing interests and differing interpretations of the Broadcasting Act. We believe that the Commission should be guided by what you, Mr. Chairman, have stated are the two overriding objectives of the Broadcasting Act, Canadian content and access to the system.

9264   Canadian content is the cornerstone of the Canadian broadcasting system and over-the-air television remains a crucial vehicle for the production and exhibition of quality Canadian content for Canadians. Over-the-air television continues to attract mass audiences and rumours of its demise are vastly overstated.

9265   Broadcasters say the business model for over-the-air television is broken. We disagree. It may be under strain locally but it is not broken overall.

9266   We are not blind to the fact that the over-the-air television faces challenges: audience fragmentation, on-demand technologies, and digital transition.

9267   The most immediate financial challenges broadcasters face are cyclical in nature. Advertising revenues are down because the economy is hurting. How much of their challenges are systemic and how much are cyclical? The answer is not clear.

9268   A big part of the problem is massive spending on foreign programming. Growth in foreign spending is outstripping growth in revenue by a wide margin. Last year alone, private over-the-air television broadcasters spent 7.4 percent more -- 7.4 percent more on foreign programming, while revenues decreased by 1.5 percent.

9269   Some broadcasters say a solution is to do less Canadian priority and independent production. This is absolutely the wrong approach. Reducing priority programming and independent production runs contrary to the policy objectives of the Broadcasting Act.

9270   We do not want to create a new status quo; a weakening of the framework the Commission has carefully built over the years, a framework that continues to serve Canadians well.

9271   Sandra.

9272   MS CUNNINGHAM: Thank you, Norm.

9273   Why are independent producers important to the system?

9274   First, independent producers provide a diversity of ideas and voices. Highly consolidated and centralized broadcasters do not. We are a key access point to the creative community; writers, directors, actors. With them we develop ideas. We innovate; we create.

9275   Second, producers live and work in all regions of Canada. And we ensure that Canadian programming reflects all of Canada.

9276   Third, independent production companies are innovative small and medium-sized businesses. They are a key important driver in the new economy, creating and sustaining jobs. We have the talent, business acumen and entrepreneurial spirit to lead content creation across all platforms.

9277   Fourth, we build important international relationships with partners around the globe. We take Canadian programming to international markets and bring foreign funds to Canadian program financing.

9278   We bring Canada to the world and bring the world back to Canada.

9279   That success abroad requires success at home. Three decades of policy support for independent production fuels that success.

9280   But the current independent production rules are key -- and they are modest. They are a mere six hours in primetime per week. That's 21 percent. Put another way, six hours represents less than 5 percent of the broadcast day. As the Commission stated in its Diversity of Voices notice:

"This is not an onerous obligation."

9281   MS CUNNINGHAM: As well, reducing or eliminating independent production obligations doesn't relieve over-the-air television challenges. Canwest acknowledged that last week. But it would devastate the production sector; it would erode diversity and it would limit programming choices for Canadians, all the while reducing the number of Canadian jobs.

9282   Tom.

9283   MR. COX: Thank you, Sandra.

9284   Another issue for the over-the-air television broadcasters is Canadian priority programming. Not all broadcasters want to reduce priority programming requirements but all of them argue that priority programming is a burden. They say the existing approach does not provide them with enough flexibility. To us, that's an extraordinary assertion. It completely ignores the fact that priority programming rules were put in place to give them more flexibility.

9285   Travel documentaries and in-house entertainment magazine programs count as priority programming. In fact, almost every Canadian program category can qualify as priority programming - except for news, information, and sports.

9286   Think about that for a minute. It means that reality shows, magazine shows documentaries, and drama of any quality or cost level can count as priority programming. The requirements are modest; only 8 hours on average per week in primetime. That's less than 30 percent of primetime, or 6 percent of the broadcast day. And they have the added flexibility to average over the entire broadcast year. This is hardly a burden.

9287   The CFTPA continues to believe in the need for higher levels of priority programming. We believe in a greater emphasis on drama. Remember, drama is the most popular genre. But, in light of the current challenges faced by broadcasters1 we are not asking for more at this time. But we certainly don't think the Commission should reduce priority programming levels.

9288   In return for continuing to acquire and simulcast U.S. programming, it is only reasonable to require minimal obligations to license and broadcast the same types of Canadian programming. Canadians have every right to expect and receive no less.

9289   In fact, we wonder why we're even talking about the possibility of eliminating priority programming requirements. For the first time in years, U.S. broadcasters are licensing independent Canadian dramas. And they're airing them, or will air them, in primetime.

9290   Canadian broadcasters are actually starting to get reverse simulcasts. The examples include:

9291   Flashpoint, the first Canadian drama series since Due South, to air in network primetime both here and south of the border. It airs on CTV in Canada and CBS in the U.S.;

9292   The Listener will premiere in June on CTV and NBC;

9293   The Bridge will air on CTV and CBS;

9294   And Copper will be broadcast on Global and ABC.

9295   Also, The Guard, The Border, and Being Erica are broadcast in Canada on Global and the CBC, and on smaller U.S. networks.

9296   Each of these programs were developed and financed by independent producers. Now is not the time to take a step backwards.

9297   Mark.

9298   MR. BISHOP: Thank you, Tom.

9299   Some of the broadcasters say Canadian priority programs are simply too costly. They say Canadian programs generally do not make them money.

9300   We take a different view. Yes, Canadians will always want to watch U.S. programming and, yes, it's important to keep the revenue and profits from top U.S. shows in Canada. But that doesn't mean Canadian programming can't succeed with Canadian audiences and generate profits. In fact, specialty television has shown us that it can.

9301   A study commissioned by the CFTPA, along with its union and guild partners, which we released this morning, confirms that generally Canadian programming does not lose money. The study recognizes that broadcasters now pay minimal licence fees but receive unlimited plays on multiple channels and platforms and that creates a revenue stream for up to seven years and sometimes much longer.

9302   The CFTPA believes that both exhibition and expenditure requirements of some kind are necessary to ensure appropriate levels of support for Canadian priority programming. Market forces alone will not ensure that this key objective of the Broadcasting Act is met.

9303   Spending on foreign programming is another key element in the equation. The Commission has noted one way to address the imbalance between Canadian and foreign spending, a 1:1 spending ratio. It's one option and it's worth modelling.

9304   Another approach is a combination of exhibition and expenditure requirements. We support a move to a corporate group, CPE. A CPE approach is a proven winning formula for Canadian content. They would provide broadcasters with additional flexibility while bringing discipline to foreign spending. We look forward to filing concrete proposals about corporate groups CPE later this summer that could help set the scope for the group-based licence renewals.

9305   Ira.

9306   MR. LEVY: Thank you, Mark.

9307   Over-the-air television broadcasters are not the only ones facing significant economic challenges. Consolidation over the past number of years has tilted the balance of power. There are fewer doors to knock on and the large corporate broadcast and distribution groups now dictate terms to independent producers.

9308   Broadcasters have told you that -- the delta between distributors and broadcasters and the resulting imbalance of power. Well, that delta is even wider between broadcasters and producers.

9309   Let's look at the state of the production industry for a moment. The 2009 industry profile reveals Canadian independent production volume of $2.3 billion in 2007-2008. The CFTPA's best estimate is that 2008-2009 will end 15 percent down. If current trends continue, and the rules are allowed to be relaxed, 2009-2010 could see a further 25-30 percent drop. That would reduce production volume to levels not seen since the mid-1980s; that would be catastrophic for Canadian programming.

9310   The relationship between broadcasters and independent producers should be one of a partnership but we need leverage to have a real partnership. We're asking the Commission to help us get it, just as the broadcasters asked for in negotiating with BDUs.

9311   Equitable terms of trade is the tool to restore the balance in the broadcaster/producer relationship.

9312   Mr. Chairman, as you have stated several times, terms of trade agreements will provide the stability and clarity necessary to exploit content across all platforms. Independent producers are the copyright owners and we should be in control of how these rights are exploited, either with broadcasters or in other ways.

9313   However, increasingly, broadcasters are taking rights without fair compensation. We participated in seven terms of trade negotiating sessions with the combined groups of CTVglobemedia, Canwest and Rogers. We tried hard to negotiate specific terms, things you can measure. We wanted more than general principles. Why specific terms? Because if you can't measure it, it doesn't mean anything.

9314   We asked for a use it or lose it provision for new media rights. The broadcasters said it was too specific. We asked for revenue share on digital platforms. The broadcasters said that was too specific. We asked for a time limit on licence terms. Again, they said it was too specific.

9315   To us, these are completely reasonable and appropriate provisions. How can we find middle ground when the broadcasters refuse a real negotiation? We need to break this impasse and we are asking the Commission staff to either mediate our negotiations or the Commission to take such other actions necessary to move this file along.

9316   To be clear, we are not asking the Commission to set rates, we are asking it to help define limits. Our mutual goal should be to have a deal completed long before the corporate group renewal hearings.

9317   Norm.

9318   MR. BOLEN: Thank you, Ira.

9319   In closing, Mr. Chairman and Commissioners, the CFTPA appreciates that the Commission's job is to strike a reasonable balance. All players in the Canadian broadcasting system requires certainty and stability. We believe that keeping the current licence terms and conditions, with some flexibility and support for local programming, is reasonable for now.

9320   Currently, there is a chill on development and production. There is a significant uncertainty in the Canadian independent production sector. Any reduction in priority programming or independent production would turn the current chill into a deepfreeze.

9321   These are difficult times, but our focus has to be on solutions. We are optimistic about the ability of the Canadian broadcasting industry to adapt and to be successful. To achieve that success, Canadian broadcasting needs independent producers; our ideas, our creativity, our risk-taking and our diversity.

9322   Thank you for your attention, and we welcome any questions you may have.

9323   THE CHAIRPERSON: Thank you for your presentation.

9324   The study, are you going to introduce it?

9325   MR. BOLEN: We have provided Commission staff with copies of the study, yes.

9326   THE CHAIRPERSON: Good. Now, you heard my questions to the interveners before you, we have spent the last two weeks listening to broadcasters, we asked them to give us specific data, we held in camera hearings for the first time, we really want to get to the bottom of this. We saw their figures, not only for last year, but for over several years.

9327   We saw their revenues, the expenditures they spent on U.S. programs and the revenues they garnered from them. And without exception, all of them showed that they are making the money on the American programming that they buy and that the Canadian, in some cases breaks even, in most cases is a loss.

9328   Now, I gather your study says the opposite? Explain to me your study in sort of general overview.

9329   MR. BOLEN: Well, you will get a chance of course to look at it in more detail, and I can't do justice to everything in the study, But what I can say is in the absence of the broadcaster information, which we understand we can't get for competitive reasons, we tried to do the best modelling we could.

9330   We looked at a one-hour drama, we looked at a half-hour comedy, and we looked at a drama with international presale. We talked to advertising agencies and we looked at CAVCO and CRTC information and we tried to determine as best we could the kind of revenue that those programs can generate over their lifetime, given that now broadcasters are acquiring long-term multichannel rights for what used to be just a licence fee for just one channel.

9331   And when we modelled that we found that programs do not lose money. They do not make significant money in aggregate, but they do not lose money. And, you know, as a former broadcaster, what I would say is I bought American shows that lost money and I bought American shows that made money. I made Canadian shows that did very very well and I made some Canadian shows that didn't do very very well.

9332   But I will say, you know, given the accounting rules that broadcasters operate under and the Canadian content reporting obligations and the flexibility within those obligations, it is very possible to allocate your costs in a variety of ways and to put costs on different services, on one service or another service, and put profits on one service or another service, and I think there is a lot of flexibility in there.

9333   And I think our study will give you pause to probe perhaps a little more deeply and ask some of the questions about how they amortize those costs and those revenues across their different properties in the consolidated world.

9334   THE CHAIRPERSON: But you are talking about the lifetime of the programs. The reality is you work on a fiscal year and you make quarterly -- especially if you are a publicly listed broadcaster, et cetera. If you look on that basis, which they look on, say for 2007 or 2008, they spent X number on American programs, they earned Y, they spent so much on, A, Canadian programs, they made B. On that basis, does Canadian programming make money or not?

9335   MR. BOLEN: I can't speak to the specifics of that, because I don't understand exactly what the numbers are. But what I can say is I think it is reasonable to look at it over the context of the life of the program. If you are paying a licence fee for a program and you are exploiting it over seven years and you are getting all sorts of ancillary rights and you are getting potential backend, what is the total revenue stream that that program is generating.

9336   To look at it in a short-term way doesn't give you the whole picture. And if that is the way it is being presented to you, that is a distortion of the total value of that Canadian content.

9337   THE CHAIRPERSON: And is seven years the right time period to --

9338   MR. BOLEN: Well, I will let John, who has been working on our terms of trade negotiations, speak to this. But what I would say, increasingly what we have been seeing on the Canadian side is longer and longer licence terms, more onerous licensing conditions put on us by the broadcasters. As we have said in our presentation, we don't have leverage.

9339   And I would actually like Ira and a couple of the other producers to talk about their experience in that regard and what has happened over the recent years in terms of their ability to exploit their own content. We used to have second-window rights. We used to be able to actually sell off rights after two or three years to second and third windows and generate revenue to capitalize our independent production companies.

9340   That has all disappeared because the broadcasters, using their leverage, are effectively vacuuming up or gillnetting every single right they can get, paying only the licence fee they previously paid for one service and for limited rights.

9341   THE CHAIRPERSON: Well, we will come to terms of trade in a moment.

9342   MR. BOLEN: No, I really want to refer to terms of trade.

9343   THE CHAIRPERSON: I asked you a specific question, Mr. Bolen, is seven years a right term, a right timeframe to value the worth of a program or should it be five or should it be 10? I don't know, you are working in this industry, you tell me.

9344   MR. BARRACK: I can tell you with the broadcasters on a television series, Mr. Chairman, a typical licence term now is six or seven years. And there is an additional provision that is put on there called a co-terminus provision, which effectively means that the first year of a series, effectively, the clock doesn't run until the last year of the series is run, so that seven-year licence becomes effectively at 12-year licence if the series were to run five years.

9345   So at a minimum, seven years is the term. And I would suggest, at a minimum, that that is how we should look at the amortization. Because if the broadcasters are seeking to acquire that seven years minimum and up to 12 years, presumably they see it as having value over that life cycle.

9346   THE CHAIRPERSON: Okay. I don't want to put words into your mouth, so you tell me if I got it wrong. But I have your study and it is essentially based on a seven-year amortization. So right now we are doing only one-year annual, but next spring when we do seven-year annuals I should actually ask, for the in camera part of that hearing, the networks furnish me the revenues and the expenses on U.S. programming on a seven-year basis so that I can compare apples with apples?

9347   MR. BARRACK: If I may, Mr. Chairman, I think that the licensing terms for the acquisition of U.S. program are much shorter and much more specific than are the licensing terms for the Canadian programs.

9348   In other words, when you acquire a U.S. program you are taking it for a much shorter period and for a limited number of plays. In this context, if I might, the questions you need to ask them is: What is the amortized value in that one-year window of that Canadian program? What is the amortized value in that one-year window of the American program? Similarly, in a seven-year licence term, what is the value over the life of that seven-year of the program you require?

9349   THE CHAIRPERSON: Okay, thank. That is very helpful. I am sure my staff took note of that.

9350   Then we sent you out a whole list of issues we want to concentrate on and we will go to them. But yesterday, Mr. Alain Pineau from the Canadian Conference of the Arts was here. And he made the following statement, he made it in French and I will try to sort of loosely translate it.

9351   He says, "If you would accord sufficient resources and attention to the production and promotion and the timetable in terms of quality, Canadian programs would have, and given the same possibility of exposure on platforms of all groups, they have just as much potential to be profitable as American."

9352   Basically, he made the assertion, it is a lack of attention, it is a lack of will, a lack of promotion to Canadian programming. If there was that, if Canadian broadcasters would spend as much time, energy, promotion and attention to Canadian programming as U.S. programming, they would be just as profitable -- I said, have you anything to prove that? This is an assertion, it is interesting. He said, I can't prove a negative, nobody has ever done it.

--- Laughter

9353   THE CHAIRPERSON: So I ask you to comment on this: a) do you agree; b) do you have anything to support that assertion?

9354   MR. BOLEN: Well, actually, I am glad you asked that question, Mr. Chairman, because it is core to the proposal we make about corporate CPE and group licensing renewal. And it is based on the specialty model where I worked for 15 years. And the specialty model, because we had a CPE, we looked at our whole business proposition differently.

9355   We didn't see Canadian content at Alliance Atlantis as a tax, as a liability. It is something that had to be subsidized, because it was a fixed part of our business, mandated by the Commission, we had to spend a regulated amount of money on that.

9356   We saw it as an opportunity to grow audiences, and it has been a success strategy on specialty where Canadian programs are doing extremely well. And at Alliance Atlantis we had five or six of the top programs on one channel, Canadian programs.

9357   Now, why is that? It is because of a number of things. It puts a break on your foreign spending. Let me talk about that for a minute. I think it is important for the Commission to understand how this works from a former broadcaster's perspective.

9358   I start my year putting a budget together and a strategic plan as a content buyer. I bought and created all the content with the independent sector for those channels. I know that I start off with a fixed cost on my CanCon. I have a projection of my revenue from all sources and I have information from the previous year on my revenue from all sources, I know how much my Canadian content spending nut is. Okay, put that aside, that is now a fixed cost.

9359   I then have to take into account my fixed overhead, corporate overhead and other costs, that is a nut. I then look at how much profit do I need to satisfy my shareholders? Of course, about as much profit as they can get, I set that aside.

9360   What I have left is what I can put into foreign programming, no more, that is all I can do.

9361   So it acts as a break on my foreign spend, but it also motivates me to make my Canadian content perform. It means I am going to schedule it properly. And, of course, I don't have to schedule it in a simulcast model, where the American studios, American broadcasters, are effectively scheduling my primetime.

9362   But I'm scheduling it appropriately, I am marketing effectively, I am cross-promoting it on all my properties, I am giving it attention, I am trying to get as much press as I can, I am trying to create a star system around my talent, and I am working very very hard with the independent sector to make Canadian content a winner.

9363   When you have no spending requirement you lose that motivation. When your motivation is to get the most audience and the most profits out of American programming, the American programming becomes like crack cocaine, it is basically something you can't get off of. You just must continue spending more and more and more on it, and it doesn't solve your problem.

9364   They have been spending more and more on American and it isn't solving the problem of Canadian broadcasting. So I see a completely different approach. Canadian content should be championed as an asset, not as a liability.

9365   THE CHAIRPERSON: So the corollary of this is if we would impose spending requirements on conventional as we have done on speciality, this would engender the sort of thinking you just outlined, and it is prevalent in speciality but it is absent in conventional?

9366   MR. BOLEN: I am sorry, Mr. Chairman, I didn't exactly understand your question.

9367   THE CHAIRPERSON: You told me what you did in speciality. Now, I assume the corollary of this is if we, the Commission, impose spending requirements on conventional it would engender a mindset change in conventional and conventional would operate like you just described and would see Canadian programming not as a burden, but as an asset to be nurtured and maximized?

9368   MR. BOLEN: That is precisely our assertion.

9369   THE CHAIRPERSON: Okay. Now, part of conventional is of course local programming. How is conventional different from specialty? And I asked people what is the essence of conventional, and I heard essentially the same in different words from everybody: number one, it is local; number two, it brings people together; and, number three, it is the one way to reach mass audiences across Canada. You can even go further and say it is an instrument of national unity, as Mr. Fecan did.

9370   Is that your view of conventional television too?

9371   MR. BOLEN: Yes. It is still a tool for reaching mass audiences, it is still very very attractive to advertisers and generates significant revenue because of its reach, it provides an opportunity for diversity because of its reach, and local programming has a particular value that it adds to the equation that specialty television doesn't add. So there is no question that those are still important aspects of over-the-air television.

9372   THE CHAIRPERSON: It is also clear that local programming in Canada suffers, that by and large it does not make money and it needs some help. We recognized that in our BDU hearing last year and we created the LPIF and we set it at 1 per cent of BDU revenue.

9373   Additional questions that we ask, do you think that is enough? Number two, who should be eligible and on what basis should we distribute it? Let's just concentrate on those two. First one, is 1 per cent enough? It is around $68 million. As you know, we have said it would be eligible to broadcasters who broadcast over-the-air incentives of less than one million people.

9374   MR. BOLEN: Right. We are not really in a position to judge whether 1 per cent is enough. I think that is a judgment we would leave to the Commission, you have more information on this and more insights than we would have.

9375   But I do think it is obvious that there is a disconnect in local markets. The old local advertising model does not generate the kind of profits it used to generate, particularly in small markets. I think in larger markets local still is a success story, perhaps not as successful as it once was, but it still is a success story.

9376   And I think we have heard our colleagues this morning, many people suggest the various mechanisms you have at your disposal to address that problem, to inject some kind of financial support into the local television business. And I think, in your wisdom, you will find the right path for that. And I don't think anyone is opposed to putting more resources into local television.

9377   But we do not want it to be at the expense of priority programming or independent production. We do not think that the problems in local television are huge structural problems for the whole over-the-air broadcasting system that requires some kind of retrenchment from the fundamental building blocks of that system. We think that is a gross over-exaggeration and it is kind of a strange tactic and it is almost a kind of hysteria and it is just overblown, we don't see it.

9378   THE CHAIRPERSON: When I asked Mr. Fecan whether the problems were cyclical or structural, and as I said I have difficulty distinguishing, he was more or less clear, they are structural or systemic and not just cyclical.

9379   I gather you feel they are more cyclical? I wonder on what basis you say that, because having looked at their figures over several years, I find it very hard to see. There is no doubt there is a declining trend. So what makes you think it is only cyclical?

9380   MR. BOLEN: There is a structural component, we grant that. But I don't think we have any sense of what the magnitude of that is.

9381   And when I was in conventional broadcasting, running local stations a long time ago, we went through a couple of recessions and, at the time, we saw dramatic drops in advertising revenue.

9382   And we are seeing a deeper recession now than we have ever seen, this is unprecedented. All around us we see the effects of that. So it is not unusual that the cyclical downturn in advertising spending is deeper than it has been in previous recessions, but it is the same pattern. In previous recessions there were very significant drops in revenue and then after the recessions ended there was an acceleration of spending in advertising.

9383   In fact, the advertising industry is one of the leading indicators of a turnaround. When people start spending money the advertisers start advertising. And the first place that advertising goes, even given fragmentation, even given the promulgation of online and so on, it still goes to the mass market tool with the biggest reach and that is conventional television. And I think they will see a very very significant return to their revenue stream.

9384   I am not saying that it is going to go back to where it was before, there are structural issues in television. That is why a year from now you will be looking at those structural issues in a broader context. I think that is wise on the part of the Commission. You will be looking at broadcasters on a group basis, you will be looking at how they run their entire businesses and how we regulate that for the future. You will be integrating sort of into the impact of digital, that is good.

9385   But, for now, I really don't think any of us has a crystal ball that can parse out what is structural and what is cyclical. And I think it is a bit odd, because up until a year and a half ago, I was sitting on panels where this was being discussed and the conventional broadcasters of that time were saying, yeah, we are having a little bit of trouble, but the future is bright, everything is going to be great, we don't see a structural problem.

9386   And all of a sudden, with the economic downturn, it is all structural, structural, structural. So I really think it is exaggerated and I think others have said that. There is a lot of doubt about the motivation for being so extreme about how much of this is structural, and we just don't buy it. We are not saying there isn't a component that is structural, and it is largely local we think.

9387   THE CHAIRPERSON: Now you support our going on a group basis licensing. When we had the broadcasters here, the conventionals, they basically said that is fine if that is what you want to do. But the fact is conventional is one of our lines of business, and if you don't help us and we don't change it, we can't make money, we will just discontinue it. You know, we don't want to, but...

9388   Is this just an empty threat or is there any reality? I always went on the assumption that if you are a broadcaster you want to stay with both, you want to have a conventional and a specialty, because you cross-promote and you exploit on many platforms. If you actually went out of conventional it would be to your disbenefit.

9389   On the other hand, it was said several times, and with considerable conviction, so I would appreciate you, as of now, head of the independent production, but a former broadcaster, if you can shed your views on this.

9390   MR. BOLEN: I can't take seriously the suggestion that they would close down over-the-air broadcasting and just run their speciality assets. I do think they are going to continue to be profitable businesses when the recession's over, as I have said.

9391   But if you own significant specialty assets, you want to have a conventional broadcaster attached to that for a bunch of reasons. One, it gives you incredible leverage in the marketplace when it comes to program buying. You can buy at cross-multiple platforms. It lets you share that programming across cross-multiple channels. That is a huge benefit.

9392   There is still no greater bullhorn in the world than conventional television. Television is the strongest bullhorn in the world. And they use that bullhorn to drive viewers to their specialty services and they use it to drive advertisers to their speciality services. That is the way the model works. There are many other benefits in terms of sharing overhead costs, the so-called synergies.

9393   It is interesting, the broadcasters when they come to argue in favour of consolidation, talk about all the synergies they get from consolidation. And now they are saying they want to unconsolidate one of their most valuable assets, if I can use that word. It seems like there is a kind of disconnect between these two views of reality.

9394   And I think the reason they assert they would close over-the-air television is because it is leverage that they can apply to you in order to try to convince you that you should relieve them of many or all of their broadcasting obligations to Canadian content.

9395   And I go back to what other people said, what is the point of having a broadcasting system if it doesn't put its focus on Canadian content and the diversity that independent producers bring to that?

9396   THE CHAIRPERSON: Okay. We suggested a one-to-one ratio for conventional TV purchase of foreign versus domestic programming. We have heard from all sorts of people saying you can't do it because it is multi-year programming. You are going to have reaction from Hollywood, very negative, they will just stop selling to conventionals and to be video-on-demand or speciality, et cetera.

9397   We have heard saying that if you do it on a group basis you are going to have an unintended effect, that in fact even less is going to spend on Canadian programming and they will just shift it all to specialty.

9398   I would just like your views on two things. One, does one-to-one make sense in any form? Because obviously, we thought it would give them maximum flexibility, while yet ensuring that they don't spend all their money in Hollywood. And secondly, if it is not, what in your view is the most efficient or the most effective way of restraining this imbalance that we have between spending on Canadian and foreign?

9399   MR. BOLEN: As we said in our presentation, we think one-to-one is an interesting idea, first of all, because it is addressing what everyone recognizes is a significant problem, the escalation on foreign spending. So we need a solution to that problem, we can't continue to see this continue.

9400   So one-to-one is worth modelling. And I think it is possible for Commission staff in using research and some consultation to look at those objections that have been put forward by the broadcasters and determine whether they actually make sense or whether they are red herrings.

9401   I can't here, just on the face of it, give you any conclusive, you know, recommendation on whether those things are true or not. But I think they bear significant investigation. You need to model one-to-one and look at the possible benefits of one-to-one and look at any possible downside.

9402   The core problem is the spending on foreign. We have proposed the other method, the CPE method combined with certain exhibition requirements. Priority programming requirements must remain in place to provide shelf space, because spending on its own doesn't solve the problem, you need to have shelf space, that is what the priority programming rules are there for. We think our model is proven already and we think it is also worth modelling and looking at more carefully.

9403   Which one the Commission chooses, if they chose to select one or the other, it is not for me to say right now because I don't think we have accumulated enough data information and modelling around that. But the work could be done, it should be done, because the problem is real.

9404   THE CHAIRPERSON: I noticed you said you were going to file some models for the next hearing, and I look forward to that.

9405   But when you say CPE, what exactly do you have in mind? I mean, you have heard, I think it was the Writers Guild, who think it should be 7.5 per cent of revenues. Do you see it as a fixed amount, a percentage of revenue, a percentage of spending, et cetera? And over what period would it be, year to year or would it be on a three-year period with averaging, or what kind of CPE model do you have in mind?

9406   MR. BOLEN: We haven't done all that work yet, and we will provide the Commission with further information about some precision on that. But right now, what we think is appropriate, in a macro sense, is to look at Canadian content spending as a percentage of gross revenue.

9407   That has worked very well in specialty, it is something that is very simple to quantify, it is not open to a lot of accounting interpretation, it is basically straightforward; this is how much money we brought in and this is the percentage of it that is going to be spent on Canadian content.

9408   What that percentage should be has to be determined in the context of all the other factors that the Commission looks at in the group context. I couldn't give you a number, I would be just pulling something out of the air. But it has to be significant and it has to be able to support the kind of Canadian content that the Commission wants to see in primetime on the over-the-air channels. And we have to make sure we still have exhibition requirements on over-the-air.

9409   For instance, here is one flaw in this potentially; you have a group CPE, but then all of it gets spent on one or two specialty channels and none of it gets spent on over-the-air. That doesn't work for us.

9410   THE CHAIRPERSON: No, but a percentage of revenue would engender this sort of change in mindset that you spoke earlier about regarding Canadian programming I guess, which is what we want to ensure, that you don't look at it as a burden, but as an opportunity as you put it forward.

9411   MR. BOLEN: If you know you are spending a significant amount of money on Canadian content and you are going to have to spend that money on Canadian content, you are going to look at it differently. It changes the psychology of the broadcasters' planning process, it changes the psychology of how you look at your services.

9412   As I said, you no longer think of it as a tax, as a subsidy, as a loss leader, as something you shuttle to the side, it becomes core to your business.

9413   THE CHAIRPERSON: I got your point, you don't have to repeat it.

9414   MR. BOLEN: I am sorry.

--- Laughter

9415   MR. BOLEN: I am very passionate about this, because it has driven a big part of my career and, frankly, a big part of my success.

9416   Alliance Atlantis, if I could say, applied this model over a long period of time very successfully, and consistently beat or competitors in the marketplace in aggregate on our revenues and profits, because people watch Canadian shows.

9417   THE CHAIRPERSON: Now, did I understand it correctly? That when you talked about priority you said you need the spending requirement, CPE, and you need exhibition requirement or priority programming, but you are not happy with the definition of priority programming as we have it right now, you think it is too wide? If I read correctly between the lines. Because you suggest everything, even reality shows, count as Canadian.

9418   MR. BOLEN: We have absolutely no objection to the definition to priority programming. My only point was to say that broadcasters have lots of flexibility, priority programming rules are not onerous, they are very very flexible, and to suggest that they are a huge burden is, again, an overstatement.

9419   We have no problem with the way they are defined now and we would be happy to see them continue to be defined that way. But as long as we continue to put emphasis on drama.

9420   THE CHAIRPERSON: Well, that's just my next question. Given that you just said you are happy with the definition, how then do I place a greater emphasis on drama, because the definition includes drama but it doesn't focus on drama, it doesn't focus on documentaries, it just puts them all together.

9421   So, it seems to me you are trying to have your cake and eat it too. Either you have the existing definition or you tighten it.

9422   MS CUNNINGHAM: Well, I think it's fair that we believe that there should be flexibility for the broadcasters. And, in that spirit, the definition that provides that currently is acceptable to us, particularly right now in this climate.

9423   We have always in the past, and we would continue to look for more shelf space across all channels. And, so, in the number -- you know, we feel that five percent of the broadcast day is really not onerous in the terms of independent broadcasting, six percent in prime time.

9424   So, perhaps one of -- you know, I don't know if anybody has anything to add, but we've always wanted more shelf space which would be more hours that could be targeted to drama and documentaries and other formats.

9425   MR. BARRACK: And, if I may, Mr. Chairman, working within that existing definition, it would be very possible for the Commission to put certain percentage limits or to put certain floors in respect of drama and what you've heard from us and others in that respect.

9426   So, maintaining a general definition, but putting some percentage limitations or floors in respect of drama in there as a limitation on that definition.

9427   THE CHAIRPERSON: But that means creating sub-categories, it means you're changing the definition.

9428   Mr. Bolen just said he's happy with the definition. I'm trying to figure out what you want?

9429   MR. BOLEN: My staff, who know more than me, I've only been in this job for three weeks, are putting me in my place and correcting me.

9430   MR. BARRACK: And I'm fired.

--- Laughter

9431   MR. BOLEN: No, she's my boss. Maybe I'm fired.

9432   THE CHAIRPERSON: Okay. Because she said the same as you. I think you're safe.

9433   Okay. Then let's go to terms of trade.

9434   I don't know whether you followed the discussions yesterday. We had your Quebec counterparts here who talked about terms of trade, and who feel quite confident they're going to have a deal with CBC and TQS who run a complete roadblock with territory, says there will not be agreement.

9435   They actually filed with us their draft agreement which -- and looked at it, and it's basically -- have you seen it, first of all?

9436   MR. BARRACK: Yes, Mr. Chairman, we have seen what the Commission has seen.

9437   THE CHAIRPERSON: Okay.

9438   MR. BARRACK: A loose translation of it.

9439   THE CHAIRPERSON: And you can see what they've done is they basically established sort of 12 general principles and then they go through what a terms of trade agreement would be, and they basically break it down in the category of rights, whether it is prime time, repeat, whether it's Internet or specialty or VOD, et cetera, and each time then they suggest there's a rate, there's a term and there's three categories.

9440   And then they think on the basis of this each broadcaster will sit down with the independent producer and says, here are the principles that govern us and here are the rights and now let's negotiate what they should be.

9441   Is that the same approach that you are following?

9442   MR. BARRACK: No, it's not.

9443   THE CHAIRPERSON: Okay. In what way do you differ?

9444   MR. BARRACK: Substantially. I think what you saw -- and if I take some time in answering this question, I apologize in advance.

9445   What you saw filed with you at the top sheet of that fundamental principles document was very similar to a document that we filed with the broadcasters as our opening position as to what should be the subject areas and the topic headings for terms of trade discussion.

9446   So, in that respect we have a very similar starting point.

9447   But what our suggestion is, is that there needs to be -- and as Mr. Levy suggested -- a greater level of specificity.

9448   And when we said in our opening statement what we're looking for the Commission to do is not to set price but to instead define limits, that's really what we're talking about.

9449   I think what the APFTQ was speaking to yesterday, if I understood what Ms Samson was saying, was that she sees negotiations being much more individualized and not necessarily these as being as enforceable and perhaps something that can, in fact, be waived by an individual producer.

9450   THE CHAIRPERSON: Yes.

9451   MR. BARRACK: We have a very different mandate from our members, if I might, Mr. Chairman.

9452   Our view is, you start from the very basic assumption, what types of programming are covered by terms of trade? And what we say aren't covered by terms of trade are any programming that is not primarily intended for the Canadian market.

9453   We do have a number of our members who produce content that may have a minor licence arrangement to trigger tax credits in the Canadian market.

9454   But what we're not -- if the program's primary intended market is outside Canada, outside of terms of trade. If we're talking about resales of Canadian content, outside of terms of trade.

9455   Once you're inside the terms of trade box, if I might, the definition of what's covered by the scope of the agreement, then that agreement becomes a floor.

9456   And you'll recall in previous submissions we have said to you what's necessary is to have terms of trade which are enforceable and binding.

9457   Because in our other agreements, for example, with the CBC that are some years old now, they weren't enforceable and binding and at the end they weren't adhered to.

9458   So, it's about the degree of specificity that's required, it's about enforcement.

9459   And what you heard Mr. Levy say, for example, we're not looking -- as I say, we're not asking -- we're not asking the Commission to set price, what we're saying is -- let me give you a very concrete example, there should be a revenue share arrangement with respect to certain new media rights.

9460   The Commission has said and has inferred I believe -- and please tell me if we've gotten this wrong -- but that what you want to do is you want to see a mechanism to get the rights into the hands of broadcasters so they can make maximum use of that programming.

9461   And we have taken that as our signal to say, terms of trade should be a mechanism that allows for broadcasters to acquire all of the rights that they need in order to best exploit the program to make it -- give it the greatest likelihood of success.

9462   And if we are able to use terms of trade to say, here's the mechanism by which if a broadcaster wishes to acquire certain rights they can, but they must make sure that they're not, for example, just taking these rights for no additional compensation.

9463   There needs to be limits with respect, for example, to the length of licence term. We talked a little bit in the context of the licence term. That term has gone, just finite, from a one-year term 10 years ago with a limited number of plays, to this seven to 12-year situation with an unlimited number of plays across all platforms. The second window has died.

9464   And at the risk of just chewing up time here, we have filed with the Commission on a confidential basis our proposal that was tabled with the broadcasters. You have that.

9465   In putting that proposal together, it was vetted by a number of former broadcasters, including some who may be at this table now, and it was -- the determination we made is we needed to be reasonable, rational and fair in putting that proposal together because we knew that the knock that the broadcasters would bring us, the knocks they brought. They're trying to be too specific, they're trying to micro manage, they're trying to say what every contract doesn't look like. We know those are going to be the criticisms.

9466   And what we came to was, no, what we need to do is set more than a framework, more than mile high principles, something that is enforceable and meaningful and it can't be under cut.

9467   Because what have we seen at the CTF? The CTF set guidelines in respect of new media and it said, you can't negotiate new media rights, there has to be a two-week cooling off period unless you sign a waiver. Well, guess what? Every single producer signed a waiver. Why? Because the broadcaster said, sign the waiver or I've got 10 more producers down the hall who will.

9468   THE CHAIRPERSON: First of all, you're putting words in my mouth that I never said.

9469   MR. BARRACK: Okay. I apologize.

9470   THE CHAIRPERSON: Okay. No, no, I'm not -- I'm sure you didn't do it in order to misrepresent, but you said that we suggested we wanted to maximize the rights of independent producers. We never stated something like that. What we thought is that it would be very helpful to have a terms of trade agreement so you all know what you're talking about.

9471   MR. BARRACK: Yes.

9472   THE CHAIRPERSON: And that you could concentrate on what is reasonable on the dollars, not on the form, on what rights there are and how they're going, et cetera.

9473   MR. BARRACK: Yeah.

9474   THE CHAIRPERSON: You want to establish a floor, obviously that's up to you if you can get it from the broadcasters, that's fine.

9475   I actually have the document here now from your Quebec -- they have these principles up front, there are 12 actually and then they have specific ones.

9476   Like you, I was somewhat surprised by the answer that I got when I said, can an individual producer waive one of the principles, because if you waive the principle it's sort of a questionable point. It is really nothing more than an exhortation.

9477   I thought that these are the unnegotiables basically and then let's negotiate a bottom.

9478   But they say for instance, Internet, they define it, and video-on-demand, they say:

"Transmission by cable, satellite or...duration of three years. What is the territory?
Transmission by Internet. Duration of..." (As read)

9479   THE CHAIRPERSON: For instance:

"How long will these rights be? What will be the territory..." (As read)

9480   THE CHAIRPERSON: Et cetera, then:

"Mobile, telephony." (As read)

9481   THE CHAIRPERSON: Again:

"What is the duration of the rights and what will be the territory?" (As read)

9482   THE CHAIRPERSON: All of these to negotiate.

9483   It struck me, you know, as really a relatively sensible approach. You're more ambitious and, you know, if you can get it -- but wouldn't getting what the Quebec parties put forward, subject to as I say the principles not being negotiable, already advance your position an awful lot from where you are right now?

9484   MR. BARRACK: I'd like to take just a second to answer that. I think the answer to the question is no.

9485   And the reason I say that is that, you heard CTV in its opening statement to you in making reference to its relationship with the BDUs talk about the ever-widening delta.

9486   And they said to you, to elaborate, the integrity -- well, paragraph 72 of their opening statement:

"To elaborate, the integrity of our local program rights was given away. Distant signals were allowed, transfer of benefits for distributors were abolished, cable rates were deregulated and, finally, distributors were allowed to vertically integrate and own first conventional and then specialty channels. Each of these decisions may have made sense in isolation, but the cumulative impact has been a massive shift in power to the BDUs along with an enormous transfer of wealth. Today the distributors are strong with record profits of tens of billions of revenue from multiple streams, while conventional broadcasters are losing money with only one revenue stream of advertising. Look, I'm not saying we're against profit, what I am saying is that things are seriously out of balance when for five years running the system produces continuous growth for one sector and continues to decline for another with an ever-widening delta." (As read)

9487   MR. BARRACK: Now, if I were to take that exact same logic and apply it to the relationship between independent producers and broadcasters, that is precisely times ten what we have experienced.

9488   And I guess, to answer your question very specifically, we're asking you to set some limits on that ever-widening delta.

9489   And, so, in order to do that, there needs to be specificity and enforceability. If there's an opt out, then there will be enough -- the imbalance of power will lead to producers having no choice but to opt out.

9490   MR. BOLEN: If I could, Mr. Chair, I think it would be worthwhile for a couple of minutes for you and the Commissioners to hear exactly why this is so important to our members.

9491   Our members have lived this and they're businesses, they're small business people and they're living with this on an ongoing basis and I think some of their experience is very illustrative of why this is so important to us.

9492   If I could, Ira and perhaps Mark.

9493   MR. LEVY: Sure. Thank you, Norm.

9494   About 15 years ago we did a show called "The Adventures of Dudley the Dragon". It was a kids show, it was a very popular show and we did it with TVOntario. We ended up doing 65 episodes of that show.

9495   And the interesting thing about the rights regime back then is that what we did is we would licence to TVOntario and all the other educational broadcasters and it was a four-year licence and they had 10 plsys and that was it, that was the licence agreement with that particular broadcaster.

9496   What that allowed us to do to help build our company is to sell second windows, which we did, to YTV and we sold a third window to Showcase and we sold a fourth window to APTN. And that's because we controlled the rights on that particular show in Canada.

9497   We were also very successful in selling the show internationally and, in terms of recouping money, not only from sales, we also had the licensing and merchandising program that was marginally successful and we were able to pay back Telefilm Canada who was the equity investor on that particular program.

9498   So, that was the regime then.

9499   If you sort of flash forward to what's been happening over the last five years, there's been an incredible erosion of rights with independent producers.

9500   You've seen terms go from five years to seven years to 10 years, you've seen plays go from 10 plays to 20 plays to unlimited, and all the time licence fees have just remained relatively flat.

9501   Of course, additional rights have been scooped up, "gillnetted" as Mr. Bolen said, and basically you're forced to be able to -- you're forced to do that in order to get the actual production order.

9502   Mark, maybe you can illustrate something.

9503   MR. BISHOP: Sure. Thanks, Ira.

9504   Just to give you an example of something that's happened in the past few years. A series that we produced, "This is Daniel Cook", that was mentioned earlier, we produced the first season of that show approximately five years ago with a Canadian broadcast partner.

9505   Within a few months it became a hit, was sold internationally, now it's in over a hundred countries.

9506   When we produced that initial series we were able to hold on to the majority of our rights. Now, on web, mobile, DVD, those are rights that we, as a small independent company, were able to exploit, often in partnership with the broadcasters or with other third parties.

9507   By the time -- within 24 months after that fact, we had a spin-off series with a little girl, same broadcaster, same partners, but suddenly within that 24-month period the landscape had completely shifted.

9508   By that point the licence term had gone from five to seven years, as Ira mentioned, co-terminus clauses, VOD, mobile, non-linear platforms, airline platforms, all of those had been scooped up by the broadcaster for no additional compensation.

9509   And those are the deals that are being presented before independent producers today, just to give you that example of how quick that landscape has really shifted.

9510   MR. COX: And I won't add any more specifics, I think those are very eloquent examples, but I will just say that from the standpoint of a group, it's especially important that we be able to address these problems through a regulatory system because we are all small and, at best, medium size companies. We simply don't have the clout that the Alliance Atlantises used to have.

9511   We, in trying to negotiate these rights independently, find ourselves against a brick well, and it's only through regulation that we believe we will be at all successful in maintaining any kind of sustainability as companies.

9512   THE CHAIRPERSON: I remember at your convention where you had a panel on this issue and your spokesman, Gordon Ritchie, said, basically we have no leverage, we only have the leverage that the CRTC will give us.

9513   And you say here you want us to mediate your negotiation, or take such other action as necessary to move this farther along.

9514   What is the other action that you have in mind?

9515   MR. BARRACK: I think I would take them in reverse. I would think we may need you to mediate at some point, but perhaps it is as simple as using your good offices to get the right people in the room.

9516   This is a business discussion and it has unfortunately been, to some extent, treated as a regulatory discussion by some of the folks who are present in that negotiating process, effectively using the sort of regulatory process as a roadblock to the negotiations.

9517   So, I would suggest that through the Commission, through the Commission Staff, there's an opportunity to try to motivate what I would call a process.

9518   If that is unsuccessful -- and I think, you know, that hopefully if you give everyone a nudge maybe it will be, but if it's unsuccessful, then I would think mediation would be the logical next step.

9519   THE CHAIRPERSON: But as I understand it, are you meeting right now in a group with the broadcasters, or are you doing it individually?

9520   MR. BARRACK: No, be very clear. As Mr. Levy said in his opening statement, we've had -- we've agreed to negotiate with the conventionals as a group on a without prejudice basis to the position that ultimately there would need to be individualized finalized terms of trade.

9521   So, we're quite content to take the process as a group as far as we can take it, because we understand, in the transcripts we've seen the concerns about favoured nations and we're sensitive to that.

9522   THE CHAIRPERSON: Okay. Well, we'll see where that goes. I must say, I'm not in a mode with the idea of mediating. I think this is a commercial issue that you should work out among yourselves.

9523   I mean, I have no problem prodding and I think we're on record saying it would be very desirable to have this, et cetera, but mediation means something which is essentially, you know, assessing the value of your production which you and the broadcasters are in a far better position than us. It strikes me as not being very useful activity for a regulator.

9524   MR. BARRACK: If I might, Mr. Chairman. I appreciate what you're saying and I appreciate your lack of appetite to immerse yourself in strict commercial details, I do, and I think we all do.

9525   But I really do go back to what we call this ever-widening delta. If there is not seen to be the motivation for the broadcasters to come to the table, they won't.

9526   THE CHAIRPERSON: No, I understand that.

9527   MR. BARRACK: And if I might again, I really want to emphasize this notion of, as I say, defining limits. We're not asking you to set price, to put it in your old world speech.

9528   THE CHAIRPERSON: Okay. We understood that exactly. Setting the limits I think is a good way of describing it.

9529   MR. BARRACK: Thank you.

9530   THE CHAIRPERSON: Let me go to the last point which is a one-year term or is that enough?

9531   We've heard different suggestions from different people because there are several big issues at play, you know, there is digital transition, there is the whole issue of group licensing, how do you do that so that you don't have unintended consequences, and there's also the fact that we don't even have the LPIF in place yet and yet people are asking for it to be increased.

9532   There's this whole issue of fee for carriage hanging over everybody's head and the broadcasters very much wanting us to revisit that issue, the question of -- and this year has been an exceptional year because of the severity of the recession that nobody predicted.

9533   And so we asked the logical question, is one year enough or do we need longer. And I've heard answers all over the place.

9534   So, where are you on this?

9535   MR. BOLEN: We don't have a firm view on whether it should be one year or two, but it should be soon enough, and it has to be holistic.

9536   I mean, we can't go on with the current uncertainty about the overall architecture of the system for much more than a year or two, we really do need to take a holistic look at it, we need to find mechanisms to stop the deterioration, particularly with regard to independent production and downturn in independent production.

9537   So, one year, two year, but beyond that I think we would be into a very difficult situation.

9538   And, Sandra?

9539   MS CUNNINGHAM: Well, I'd just like to add, and this is probably already clear, obviously for us that -- it's very important that there is no deterioration of the current obligations in any window, whether it's one year or two.

9540   THE CHAIRPERSON: You've been clear on that.

9541   Okay. Do any of my colleagues have any questions?

9542   Len?

9543   COMMISSIONER KATZ: I'm going to come back to page 8 of your remarks this morning where you talked about the CFTPA study that you commissioned, which we still don't have a copy of.

9544   But I'm going to focus on that third line where it says:

"Generally Canadian programming does not lose money." (As read)

9545   COMMISSIONER KATZ: Does the word generally there give you more comfort, because if we said to you, overall Canadian programming does not make money, would that be a correct statement from your perspective?

9546   MR. BOLEN: That's a hard thing for me to answer. I think the correct way we'd put the results of the study is, Canadian programming overall generally does not lose money.

9547   It makes a very -- based on our study, which is very conservative, it makes a very small amount of money, not a significant amount of money.

9548   So, it's almost a zero sum game, but it's not losing money and it's certainly not a dramatic drain to the extent that we're hearing at these hearings from so many broadcasters.

9549   COMMISSIONER KATZ: I guess where there's an incongruence in my mind is that overall the industry last year virtually broke, even based on the results that we filed on behalf of all the OTA for 07-08, and just this morning I read somewhere that Torstar announced the results and in there there was a reference to the fact that CTV, their investors did not do very well as well and lost money in the second quarter.

9550   So, overall CTV has lost money, overall we're seeing the industry not doing very well, and based on some information that we saw in confidence earlier last week and later last week as well, it appears as though foreign programming seems to be carrying its own weight and making a contribution as well.

9551   So, you come to the conclusion at the end of it that if local programming is making money and foreign programming is making money, where's the problem?

9552   But the bottom line results are, it ain't there. And, so there's a disconnect in my mind.

9553   And notwithstanding the fact that you said there may be a long tail in Canadian programming that hasn't been considered, and if I make the assumption there is a long tail in Canadian programming, and I'll grant you there's no long tail at all in foreign programming, at the end of the day we've looked over results over the last five, six years and we don't see any profit over the entire period of time on a net/net basis.

9554   So, something's missing.

9555   MS CUNNINGHAM: There are a couple of things. I think we can -- in terms of evaluating the profit, I mean, I don't think we can necessarily dream to have the 150 or 200 percent profit margins that some of the foreign programming provides.

9556   The fact that it should be making a contribution to the over-the-air as a whole and contribute to Canadian programming I think is perfectly reasonable.

9557   If we're looking at whether -- I think one of the questions we're certainly asking as we go forward and I think it's something to be part of the overall group hearings, can Canadian programming make money, not just does it lose money or does it make money?

9558   We've cited and I know Tom Cox in our verbal pointed out some of the encouraging signs of partnerships between independent Canadian producers, Canadian broadcasters and U.S. broadcasters in this case -- there can be others internationally -- where we're going to see over the next year and a half some interesting reverse simulcast opportunities where I think you'll start to see, and we've seen already with "Flashpoint", huge audiences -- Canadian audiences being attracted to decidedly Canadian programming with the clear advantage of the simulcast effect.

9559   I think that's something we'll want to take a look at as another -- you know, in order to answer that question, can Canadian programming make money?

9560   COMMISSIONER KATZ: I'm using the numbers in front of me basically and trying to be as conservative as possible in saying, huge long tail in Canadian, no long tail in American. So, the numbers still don't bear it out, is my concern, so...

9561   MR. BARRACK: One of the difficulties I guess why we're struggling with the question a little bit is you're -- we're not fully aware of what you have had in front of you in terms of those numbers, and I apologize, I don't want to not answer your question.

9562   Because I guess what we're saying to you is, it's a complex matrix, it's a very complex matrix and there are a number of what do we know -- when I say, what do we know -- we don't have the benefit of those numbers.

9563   We know that the amount of spend on U.S. is up, we know that there is a challenge currently in the advertising market -- we don't deny that -- and we know that there are number of other challenges in there, but to suggest that the spend on Canadian is the source of the problem -- which I don't know if that's what you're asking -- I can't see that.

9564   Even this study that has been put in front of you, albeit very recently, didn't look at any of those long-tail inputs in terms of the profitability, in fact it specifically cut those out.

9565   That is a business model, Mr. Bolen can tell you, is emerging. Broadcasters are making money in that area. They're not making huge amounts, but it's growing year over year, it's doubling.

9566   MR. BOLEN: And I go back to what we were talking about a little earlier and, that is, if Canadian content isn't performing as well as it should or could, you have to look at how the over-the-air television broadcasters deal with their Canadian content.

9567   It doesn't get pride of place in their schedules, it doesn't get the kind of marketing and promotion that American programming gets, it doesn't get the star attention that the American programming gets because it is harder to make Canadian content as successful as it could or should be, it takes work, it takes focus, it takes emphasis.

9568   Of course when all the emphasis is on spending on foreign programming, promoting foreign programming, celebrating foreign programming, scheduling it in the heart of prime time based on what the schedulers in New York and Los Angeles say, of course it's going to do much better than Canadian programming.

9569   When you just see it as attacks -- I talked to a senior programmer for one of the over-the-air broadcasters who said to me, Canadian content, it just can't work, it doesn't work, it doesn't work on over-the-air, it's never going to work.

9570   That's a defeatist attitude and I think the defeatist attitude has contributed to the relative lower performance of Canadian programming.

9571   If you look at specialty, again, where Canadian programming has been scheduled differently, has been promoted differently, marketed differently and treated differently, you've seen huge success.

9572   And I don't think we can ignore that, I think we have to pay attention to that. I think there's a message in that. And it's all too easy to just say, you know, Canadian content, uh, doesn't work, let's just do more American.

9573   Then what is the point of having a broadcasting system? What is the point of having a Broadcasting Act, if that is the long-term roll-out of our broadcasting system, it just means the logical conclusion is forget Canadian content, let's just do foreign content and that point's been raised by others.

9574   We wouldn't go so far as to suggest you just bring in the foreign broadcasters, I think that's a little extreme, but you should make sure that the Canadian broadcasters are motivated through regulation to put more emphasis and more resources and more focus on Canadian programming.

9575   Of course, it's a kind of -- it's a tautology, it's a self-defeating situation. They're creating it.

9576   COMMISSIONER KATZ: Thank you. Thank you very much.

9577   THE CHAIRPERSON: Okay. Thank you very much. Those are our questions for you.

9578   Maître Dionne, do we have any undertakings?

9579   MS DIONNE: No, Mr. Chair. Thank you.

9580   THE CHAIRPERSON: Okay. Thank you very much then.

9581   MR. BOLEN: Thank you very much. We appreciate it.

9582   THE CHAIRPERSON: I think, Madame la Secrétaire, we are breaking now for lunch, if I understand correctly.

9583   THE SECRETARY: Yes, we're breaking for lunch. One o'clock, Mr. Chairman.

9584   THE CHAIRPERSON: One o'clock. Okay. We'll be back here at one o'clock.

9585   Thank you.

--- Upon recessing at 1143

--- Upon resuming at 1303

9586   LE PRÉSIDENT: Bon, Madame la Secrétaire, commençons.

9587   LA SECRÉTAIRE: Merci, Monsieur le Président.

9588   Bon après-midi à tous.

9589   J'inviterais maintenant la Fédération des communautés francophones et acadiennes et l'Alliance des producteurs francophones du Canada à faire leurs présentations en panel.

9590   Nous débuterons avec la Fédération des communautés francophones et acadiennes. Madame Lise Routhier-Boudreau comparait pour la Fédération et nous présentera ses collègues. Vous disposerez ensuite de 15 minutes pour faire votre présentation.

INTERVENTION

9591   MME ROUTHIER-BOUDREAU: Merci.

9592   Bon après-midi, Monsieur le Président, Messieurs les Vice-présidents, Mesdames et Messieurs les Conseillers. Merci d'abord de nous avoir invités à comparaître aujourd'hui.

9593   Je m'appelle Lise Routhier-Boudreau. Je suis la présidente de la Fédération des communautés francophones et acadiennes du Canada et je suis accompagnée aujourd'hui de monsieur Serge Quinty, notre directeur des communications.

9594   Nous sommes par ailleurs très heureux de partager ce panel avec l'Alliance des producteurs francophones du Canada et je tiens à vous dire que nous appuyons entièrement leur mémoire et leur intervention.

9595   À l'origine, notre intervention portait uniquement sur le renouvellement de la licence du Groupe TVA qui, comme vous le savez, est diffusé à l'échelle nationale. Cependant, je dois vous admettre que les développements des dernières semaines nous ont beaucoup donné à réfléchir sur l'enjeu de la télévision à caractère généraliste au Canada. Et vous me permettrez d'apporter quelques considérations sur certains des enjeux horizontaux qui font partie de la présente instance.

9596   Quand on parle de télévision généraliste, pour les communautés francophones et acadiennes, c'est souvent d'une télévision de premier service, voire même le seul service, qu'il s'agit. Pour les francophones en milieu minoritaire, c'est la télévision généraliste de langue française qui fournit le rendez-vous des informations locales en français à chaque jour, et c'est la télévision généraliste qui fournit les émissions qui reflètent les réalités locales.

9597   Depuis le début de ces audiences publiques, on dit que le modèle d'affaires de la télévision généraliste ne fonctionne plus et qu'il faut trouver une solution à long terme à cette situation. Notre propos n'est pas de conjecturer sur les causes, mais plutôt de vous parler des impacts.

9598   Dans les dernières semaines, Radio-Canada a été obligée de procéder à des coupures difficiles, et si, en ce qui concerne nos communautés, l'essentiel a été préservé, nous avons quand même vu une diminution de services en région. Et ce qui nous préoccupe, c'est l'idée que ça pourrait ne pas s'arrêter là, et que la situation financière pourrait forcer la société d'État à faire des choix encore plus dramatiques l'an prochain.

9599   Nous sommes donc très sensibles aux difficultés que vit la télévision généraliste actuellement, et nous sommes surtout très sensibles à l'impact que ces difficultés pourraient avoir sur l'accès de nos communautés à des contenus locaux de langue française.

9600   Nous encourageons définitivement le CRTC à identifier rapidement des solutions. Nous notons qu'une avenue qui semble revenir souvent est l'accès des télédiffuseurs généralistes aux droits de distribution, au même titre que les services spécialisés. Sans vouloir se prononcer sur les tenants et les aboutissants financiers d'une telle mesure, nous croyons qu'il faut lui apporter la considération sérieuse qui s'impose, puisqu'il s'agit ici ni plus ni moins de préserver le ref1et de l'expérience canadienne là où elle se vit avec le plus de vivacité : et c'est au niveau local.

9601   Je laisserai à l'Alliance des producteurs francophones du Canada le soin de vous parler du Fonds d'amélioration de la programmation locale et du Fonds des médias, mais puisqu'il est question ici des problématiques de la télévision généraliste, j'aimerais vous parler également de l'enjeu des signaux régionaux distribués par les EDR et par les SRD.

9602   D'abord, comme nous l'avons indiqué lors de notre intervention du mois de janvier, il y a en Ontario deux stations de langue française de Radio-Canada. Et étant donné l'ampleur de la communauté francophone dans cette province, il serait normal que le CRTC ordonne aux entreprises satellitaires de distribuer les deux et non une seule.

9603   À cet égard, nous savons que le Conseil a noté cette question dans son rapport du 30 mars sur les services de langues anglaise et française offerts aux communautés en situation minoritaire. Plus précisément, le Conseil y suggère aux EDR et à la SRC d'entreprendre des discussions à cet égard. Nous soumettons respectueusement au Conseil qu'étant donné les limites de bande passantes, des dispositions réglementaires seraient davantage en mesure de garantir la distribution des deux stations ontariennes de Radio-Canada.

9604   Par ailleurs, le groupe Inter-Rives a comparu devant vous la semaine dernière et vous n'êtes pas sans savoir que les stations CHAU et CIMT-TV possèdent un auditoire considérable dans le nord du Nouveau-Brunswick et elles produisent d'ailleurs plusieurs contenus à l'image de la communauté acadienne. Nous sommes au courant des enjeux auxquels font face CHAU et CIMT, au niveau de la distribution et nous tenons à souligner que nous verrons d'un bon oeil des mesures réglementaires qui viseraient à assurer le maintien ou l'accroissement de la distribution de ces deux stations sur les EDR terrestres et par SRD au Nouveau-Brunswick.

9605   Certaines options s'offrent au Conseil, à cet égard. Nous pensons notamment au fait que dans l'avis de radiodiffusion 2008-100, le Conseil a réservé sa décision concernant la distribution des stations locales indépendantes par les SRD pour les provinces atlantiques.

9606   Je passe maintenant à la question de la demande renouvellement de licence du Groupe TVA.

9607   Je tiens à le souligner d'emblée : nous reconnaissons pleinement que la présence de TVA au service de base à l'extérieur du Québec demeure pour nous une valeur ajoutée et contribue à une plus grande variété de l'offre télévisuelle de langue française en milieu minoritaire. Cela étant dit, lorsque nous avons appuyé, il y a 11 ans la demande de TVA en vue de l'obtention d'une distribution obligatoire au service de base, nous avons déclaré (et je cite) :

« Si un réseau de langue française obtient le privilège d'être diffusé sur l'ensemble du territoire canadien, il se doit de desservir par une portion de sa programmation l'ensemble de son auditoire. » (Tel que lu)

9608   Le CRTC a aussi reconnu ce fait en imposant à TVA les conditions de licence qui visent notamment la diffusion hebdomadaire d'une émission de 30 minutes sur la vie francophone à l'extérieur du Québec. Ces conditions de licence sont d'ailleurs, admettons-le, assez minimales, considérant le privilège que représente une diffusion au service de base sur l'ensemble du territoire canadien.

9609   Or, TVA propose de remplacer ces conditions de licence par des actions volontaires. Et, bien que nous appréciions l'idée de créer un poste de correspondant dans l'Ouest canadien, ce qui est proposé est insuffisant, je vous dirais, nettement insuffisant.

9610   Mesdames et Messieurs du Conseil.

9611   Quatorze pour-cent des francophones du pays habitent à l'extérieur du Québec. Il y a 2,5 millions de francophones et de francophiles à l'extérieur du Québec. Ce n'est pas rien. Et nous avons du mal à comprendre de quelle manière un réseau, qui dispose d'une distribution obligatoire à la grandeur du pays, pourrait sérieusement prétendre refléter adéquatement la réalité de ces francophones en se limitant à des actions volontaires qui ne comportent aucune obligation de résultat.

9612   Les communautés francophones et acadiennes ne peuvent se contenter d'une telle approche où rien ne garantit ce qui sera diffusé, ni quand, ni comment. C'est pourquoi nous avons écrit dans notre mémoire que nous ne voyons aucun avantage, pour les communautés que nous représentons, à l'élimination des engagements et conditions de licence actuelles de TVA en ce qui a trait au reflet des réalités des francophones vivant à l'extérieur du Québec. Au contraire, nous y voyons un risque sérieux de perte d'acquis.

9613   Le reflet de nos réalités à l'antenne de TVA doit donc continuer à être garanti par condition de licence. Toutefois, comme TVA, nous voulons que les contenus qui découlent de ces conditions de licence et des attentes formulées par le CRTC rencontrent le plus grand succès possible dans nos communautés et au Québec. C'est pourquoi nous réitérons que nous sommes prêts à travailler avec TVA pour définir le mieux possible les attentes des communautés et la meilleure façon d'y répondre. Nous aurions d'ailleurs trouvé normal, trouvé intéressant, que TVA approche la FCFA, la Fédération culturelle canadienne-française ou l'APFC en préparation à la présente instance.

9614   C'est pourquoi nous avons recommandé au CRTC, dans nos observations écrites, non seulement de maintenir les obligations de licence actuelles du Groupe TVA, contenues au paragraphe 16 de la décision 2001-385, mais bien de les étendre, notamment, en formalisant par condition de licence la mise sur pied d'un mécanisme de consultation chargé d'aviser TVA sur les besoins et les attentes des communautés francophones et acadiennes.

9615   Mesdames et Messieurs du Conseil, comme nous avons déjà eu l'occasion de le souligner devant vous, les forces du marché à elles seules ne peuvent pas assurer aux francophones un accès équitable à des services de radiodiffusion dans leur langue. Confier strictement au jeu de l'offre et de la demande le reflet des 2,5 millions de parlants français qui vivent à l'extérieur du Québec, sans obligation aucune, reviendrait non seulement à un risque d'effacement total de notre réalité à l'écran, cela reviendrait à dire qu'une distribution obligatoire à la grandeur du pays n'est plus un privilège mais un droit.

9616   Je vous remercie et je passe la parole à mes collègues, à monsieur Chatel.

9617   M. CHATEL : Merci, Lise.

9618   Monsieur le Président du Conseil, Mesdames et Messieurs les Conseillers, bonjour.

9619   Mon nom est Mark Chatel, président de l'Alliance des producteurs francophones du Canada.

9620   À ma droite se trouve Annabelle Cloutier, directrice générale de notre regroupement.

9621   Nous vous remercions de nous permettre de comparaître devant vous au sujet de la demande de renouvellement de licence du Groupe TVA.

9622   Les positions et recommandations de la FCFA reçoivent tout notre appui, et nous sommes heureux de comparaître aujourd'hui à leurs côtés.

9623   Comme vous le savez, nous représentons les producteurs indépendants francophones hors-Québec.

9624   Notre mandat est de veiller à ce que les radiodiffuseurs présentent la réalité des francophones vivant en milieu minoritaire, telle que véhiculée par nos producteurs.

9625   Leurs histoires sont riches, belles, différentes, empreintes du lieu où ils habitent.

9626   D'Est en Ouest, nos producteurs sont des créateurs d'un contenu que nul autre producteur canadien ne peut offrir.

9627   Nous venons devant vous aujourd'hui pour veiller à ce que ce reflet, cette réalité, trouve sa place à l'antenne du Groupe TVA.

9628   Mais avant d'aborder spécifiquement ce point, nous aimerions profiter de la présente audience pour nous prononcer au sujet des grands enjeux horizontaux, soit le Fonds d'amélioration de la programmation locale, la question des redevances et l'accessibilité des signaux régionaux.

9629   Lorsque vous avez proposé un Fonds d'amélioration à la programmation locale, nous avons applaudi cette mesure, qui se préoccupe des petits marchés.

9630   Nos communautés se trouvent toutes dans des petits marchés ou des marchés minoritaires.

9631   Nous croyons qu'il est important que Radio-Canada y ait accès, car elle est la seule, avec TFO, qui possède des stations régionales francophones qui desservent nos communautés.

9632   Le FAPL lui donnera les moyens d'augmenter le contenu original et les nouvelles locales s'adressant aux auditeurs francophones de partout au pays.

9633   Comme vous le savez, TFO, la télévision éducative provinciale de l'Ontario, est aussi un diffuseur de choix pour les communautés francophones et acadiennes.

9634   Elle collabore beaucoup avec nous, les producteurs indépendants hors-Québec.

9635   Nous aimerions que le Conseil révise sa décision de ne pas lui donner accès au Fonds d'amélioration à la programmation locale.

9636   Bien que son siège social soit à Toronto, elle diffuse dans un contexte minoritaire et devrait se qualifier pour ce fonds.

9637   Les francophones de l'Ontario sont environ un demi-million, donc, bien moins que le seuil d'un million que vous avez fixé.

9638   J'espère que vous prendrez le temps de revoir à nouveau ce point.

9639   Et comme le propose ELAN (English Language Art Network), un groupe qui comparaîtra devant vous aujourd'hui, nous croyons que les producteurs indépendants en milieu linguistique minoritaire, devraient pouvoir contribuer à la programmation locale grâce, entre autres, aux documentaires qu'ils proposent aux stations locales.

9640   Ainsi, nous voulons nous assurer que les sommes investies dans le FAPL serviront bel et bien à de la programmation locale.

9641   En plus de viser les nouvelles locales et régionales, le fonds devrait permettre, voire inciter les radiodiffuseurs à investir un pourcentage important dans la production indépendante d'émissions d'intérêts pour la communauté desservie par la station.

9642   Autrement dit, l'argent du FAPL pourrait permettre aux stations régionales de payer des licences de diffusion pour acquérir des émissions, de la programmation, produite par le secteur indépendant.

9643   Un autre élément abordé dans cette audience par les télévisions généralistes est la possibilité pour elles de recevoir des redevances des EDR au même titre que les chaînes spécialisées.

9644   Nous croyons que les arguments et les faits justifiant cette demande sont à prendre au sérieux par le Conseil.

9645   Les télévisions généralistes sont celles qui produisent la grande majorité du contenu canadien original, dont les producteurs indépendants sont souvent les créateurs.

9646   L'APFC soutient leur demande d'obtenir ces redevances de distribution par les câblos et satellitaires.

9647   Enfin, toujours sur les grands enjeux horizontaux, nous voudrions que le Conseil trouve un moyen d'assurer une augmentation de l'accessibilité des signaux régionaux distribués par les satellitaires.

9648   Trop souvent, nos productions ne peuvent être vues par l'auditoire qu'elles ciblent, principalement en Ontario.

9649   Encore récemment, nous avions une série diffusée sur Radio-Canada, dans la région d'Ottawa/Gatineau, intitulée « La croisée des chemins ». Or, les abonnés de Shaw Direct et de Bell Télé de la région ne pouvaient la voir.

9650   C'est une perte d'auditoire qui est regrettable, tant pour Radio-Canada, que pour nous.

9651   Nous espérons que le CRTC prendra les mesures qui s'imposent pour rectifier cette incohérence.

9652   Maintenant, passons au sujet principal de notre intervention, la demande de renouvellement de licence du Groupe TVA.

9653   Comme vous le savez, depuis que TVA a une licence de distribution nationale sous 9 1)h), soit depuis 11 ans, le Conseil s'est assuré que ce radiodiffuseur allait prendre des actions concrètes pour refléter notre réalité à son antenne.

9654   De ces conditions de licence, nous retenons l'émission hebdomadaire Via TVA, diffusée le samedi à 12 h 30, ainsi que les six grands événements annuels.

9655   Le Groupe TVA a bel et bien rencontré ces conditions de licence.

9656   Mais pour ce qui touche le rapport annuel, nous n'avons jamais pu savoir si le pourcentage des montants à être investis hors-Québec l'a bel et bien été.

9657   Le Conseil avait aussi inclus des engagements à la licence du Groupe TVA.

9658   Nous pouvons ici affirmer qu'ils n'ont pas été remplis, à notre grande déception.

9659   Entre autres, nous n'avons jamais été sollicités par un comité consultatif, et nous croyons que si ça avait été le cas, notre collaboration avec le Groupe TVA en aurait grandement bénéficié.

9660   Ils auraient gagné à mieux nous connaître.

9661   Lorsque nous avons lu les intentions du radiodiffuseur quant à sa demande de licence, nous avons été vraiment choqués.

9662   Les mesures du Groupe TVA envers les communautés francophones du pays se résumeraient à ceci : poster un journaliste dans l'Ouest et le reste se fera par des actions volontaires.

9663   C'est nettement insuffisant.

9664   Comme vient de le mentionner la FCFA dans son allocution, ce ne peut être accepté par le Conseil, surtout que ce radiodiffuseur a un privilège de distribution nationale obligatoire.

9665   Nous nous permettons ici de citer un extrait de votre rapport sur les services de radiodiffusion aux communautés de langue officielle en situation minoritaire, déposé le 30 mars dernier :

« Le Conseil estime que la représentation des communautés à l'écran est essentielle en vue d'assurer une offre de services convenable.
Le Conseil entend étudier cette question, parmi d'autres et lorsqu'elle sera pertinente, dans le cadre du renouvellement des licences des services canadiens de langue française et de langue anglaise, et plus particulièrement, des licences de la SRC et des grands groupes de radiodiffuseurs canadiens. »

9666   M. CHATEL : Nous y voilà justement.

9667   Cette affirmation du Conseil trouve aujourd'hui son application.

9668   Notre interprétation de ces passages est que, si le Groupe TVA souhaite toujours obtenir une licence sous l'article 9 1)h), il doit obligatoirement inclure le reflet de la francophonie canadienne à son antenne.

9669   Ce n'est pas négociable.

9670   Et une base volontaire est loin d'être une garantie. Ce n'est qu'un voeu pieu, qui ne se matérialisera probablement pas.

9671   Nous demandons donc au Conseil de maintenir des conditions de licence concrètes qui touchent le reflet des communautés francophones du pays à l'antenne de TVA.

9672   C'est un minimum.

9673   Les conditions actuelles, soit une émission hebdomadaire et la couverture d'événements spéciaux, sont à la satisfaction des communautés, faute de mieux, et devraient être reprises dans la nouvelle licence.

9674   Et pour faire suite à la recommandation de l'APFTQ, qui dit qu'un montant minimal de 20 millions de dollars devrait être investi en production indépendante par TVA, nous ajoutons que 15 pour cent de cette somme devrait être investi dans la production indépendante à l'extérieur du Québec.

9675   Cette mesure donnerait une certaine souplesse de programmation au radiodiffuseur, tout en nous assurant qu'il fera appel à la production indépendante à l'extérieur du Québec pour offrir une réelle image de ce qui se passe un peu partout au pays.

9676   Souvenez-vous de l'exemple d'ARTV, qui dans ses conditions de licence doit dépenser 15 pour cent de ses budgets de production dans le secteur indépendant hors-Québec.

9677   Ça fonctionne très bien. Ça donne des résultats à l'écran.

9678   Et parlant d'image, en préparation de ces audiences, nous avons eu une vision que nous voudrions partager avec vous.

9679   Imaginez si la convergence des différentes plateformes qui entourent le Groupe TVA offrait une place, aussi mince soit-elle, à ce qui se passe à l'extérieur du Québec.

9680   Imaginez le Groupe TVA, la chaîne LCN, le site Canoë, le service Illico et les journaux propriétés du Groupe Québécor faisant l'effort pour couvrir et montrer ce qui se vit dans nos communautés.

9681   Les francophones hors-Québec verraient leur réalité véhiculée, et ils existeraient aux yeux de nombreux téléspectateurs, auditeurs, lecteurs, internautes du Québec.

9682   Imaginez toute cette convergence au profit, entre autres, de la francophonie canadienne.

9683   Et pourquoi pas ?

9684   Or, nous sommes loin de là.

9685   Le 15 pour cent de la population francophone du pays qui vit hors-Québec est quasi-absent du réseau média francophone qui a le plus de cotes d'écoute au pays.

9686   À la place, nous devons intervenir dans cette audience pour simplement conserver le peu de place que TVA nous a laissé à son antenne depuis 11 ans.

9687   Au sujet des arguments soumis par TVA pour demander l'exclusion de ses conditions de licence envers les francophones hors-Québec, permettez-nous de mettre en doute le fait que les initiatives du Groupe TVA soient déficitaires de 800 000 dollars.

9688   Les émissions comme Via TVA et Destination Nor'Ouest, produites par des membres de l'APFC, jouissent de cotes d'écoute enviables et apportent certainement un placement publicitaire qui est rentable.

9689   Et comme dans toute exploitation d'une entreprise, il existe parfois des coûts associés à des obligations.

9690   Le Groupe TVA ne peut se détourner de nous dès que nous ne sommes plus « rentables ».

9691   Il y a 11 ans, il est venu solliciter notre appui, celui des francophones hors-Québec, pour obtenir une obligation de distribution nationale.

9692   Maintenant qu'il n'a plus besoin de nous pour augmenter ses cotes d'écoute et ses revenus, ou parce que nous lui « coûtons » trop cher, il nous met de côté ? Nous nous opposons à cette logique.

9693   D'ailleurs, cette question des cotes d'écoute est un sujet de plus en plus problématique pour les francophones vivant à l'extérieur du Québec.

9694   Puisque BBM et Nielsen ne comptabilisent pas l'auditoire hors-Québec des chaînes francophones, notre audimat ne peut être chiffré et ainsi n'est pas une plus-value dans le placement publicitaire offert par les radiodiffuseurs.

9695   Nous en faisons aujourd'hui les frais.

9696   TFO rencontre aussi ce problème d'absence de cotes d'écoute de son auditoire.

9697   Cela lui occasionne des soucis. Notamment pour le calcul de son enveloppe de rendement au Fonds canadien de télévision, qui a chuté de plus d'un million de dollars cette année.

9698   Ceci a un impact direct sur la réduction de production indépendante hors-Québec à l'écran.

9699   Nous voulions apporter ce point à votre attention et allons nous attaquer à ce dossier prochainement.

9700   En somme, nous venons ici vous exhorter de maintenir des conditions de licences qui assureront que la programmation de contenu original canadien aux heures de grande écoute et ailleurs dans la grille du Groupe TVA inclura, de façon obligatoire, un contenu réalisé par les producteurs indépendants de l'extérieur du Québec.

9701   Il en va de la crédibilité de l'actuelle distribution nationale dont jouit le Groupe TVA, tel qu'accordé par vous.

9702   Bien, voilà, Monsieur le Président, Mesdames et Messieurs les conseillers, je vous remercie d'avoir pris la peine d'écouter nos observations.

9703    Et la FCFA et l'APFC sont maintenant prêts à répondre à vos questions.

9704   LE PRÉSIDENT : Merci pour votre présentation.

9705   Madame Routhier-Boudreau, dans votre présentation, sur la première page, au troisième paragraphe, vous dites :

« Pour les francophones en milieu minoritaire, c'est la télévision généraliste de langue française qui fournit le rendez-vous des informations locales en français à chaque jour, et d'est la télévision généraliste qui fournit les émissions qui reflètent les réalités locales. »

9706   LE PRÉSIDENT : Quand nous avons eu l'audience sur les langues officielles minoritaires, je croyais que c'était l'opinion de la majorité des milieux linguistiques minoritaires, spécialement les francophones, que ce n'est pas le cas, que leur réalité n'est pas reflétée.

9707   Il y a un peu d'émissions, la majorité à SRC, mais vraiment, que vous trouvez que la radio et la télévision minoritaires ne reflètent pas votre vie locale.

9708   MME ROUTHIER-BOUDREAU : Vous avez tout-à-fait raison de dire que le reflet des communautés francophones et acadienne à l'extérieur du Québec dans la télévision généraliste est nettement insuffisant.

9709   Mais ce que nous avons, c'est tout ce que nous avons. Alors, on veut --

9710   LE PRÉSIDENT : Et vous voulez le préserver. Je comprends ça.

9711   MME ROUTHIER-BOUDREAU : Tout-à-fait. Et bonifier, bien sûr.

9712   Mais le médium de la télévision généraliste est le seul moyen que nous avons présentement.

9713   LE PRÉSIDENT : OK.

9714   Et Monsieur Chatel, dans votre présentation, à la dernière page, vous dites que :

« ... BBM et Nielsen ne comptabilisent pas l'auditoire hors-Québec des chaînes francophones ... »

9715   LE PRÉSIDENT : Nous avons eu une présentation -- pas de BBM ou Nielsen -- mais d'un autre bureau. Michel, peut-être que tu rappelles qui c'était.

9716   Ils nous ont démontré qu'on a des petits appareils que les personnes portent sur elles dans la maison et ils vont enregistrer ce qu'on écoute soit à la télévision et à la radio. Le signal va identifier quelle est la station, et cetera, et on comptabilise ces résultats chaque mois.

9717   De cette façon, on sait exactement quelle est la radio et la télévision qui ont été écoutées dans chaque maison.

9718   Comme ce système existe, ils ne comptabilisent pas les émissions françaises ?

9719   M. CHATEL : Je vais laisser Annabelle Cloutier répondre à cette question, mais chose certaine, c'est que, dans l'échantillon qui a été préparé par ces firmes de sondage, il y a très, très peu de francophones dans le groupe, dans le bassin de population.

9720   TFO nous a dit qu'il y avait cinq francophones sur 5 000 dans le bassin de population qui est sondé en échantillonnage.

9721   Alors, on n'arrive pas à des résultats probants avec ce genre de faible groupe.

9722   Et c'est la raison pour laquelle TFO ne peut pas fournir des statistiques de cotes d'écoute au Fonds canadien de télévision, et ça les pénalise directement lorsque vient le temps de calculer leur enveloppe de rendement.

9723   Et c'est la raison pour laquelle cette année ils ont été coupés, entre autres, de plus de un million de dollars. Et ça, ça a un impact directement, donc, parce qu'au départ il n'y a pas eu la possibilité de sonder correctement les francophones à l'extérieur du Québec.

9724   Et le Groupe TVA, je pense qu'ils vous ont dit que le fait de rejoindre plus de francophones à l'extérieur du Québec n'était pas un réel avantage au niveau des ventes publicitaires. Mais s'il y avait des réels chiffres et des meilleures façons de sonder cet auditoire francophone hors Québec, bien, je pense qu'on réaliserait que tout d'un coup oui, il y a des avantages financiers d'avoir accès à cette population qui écoute le Groupe TVA.

9725   LE PRÉSIDENT: O.K. Merci.

9726   Louise, tu as des questions?

9727   CONSEILLÈRE POIRIER: Oui, j'ai des questions.

9728   Merci pour vos excellentes présentations qui sont claires et simples et qui donnent vraiment une position précise au Conseil. Je l'apprécie énormément.

9729   Puisque le président vient de parler des BBM -- et effectivement il y a lacune là, dans ce sens qu'on ne peut pas vraiment évaluer quel est l'auditoire francophone hors Québec pour la station de TVA, entre autres, et pour d'autres stations aussi, mais je me demandais...

9730   Parce que la semaine dernière on a entendu parler d'une étude qui a été faite par la chaire de recherches, une étude acadienne à l'Université de Moncton et qui faisait état du peu de présence de la nouvelle hors Québec sur les bulletins de nouvelles de Radio-Canada.

9731   ... je me demandais si, de votre côté, vous avez évalué le taux de satisfaction des francophones hors Québec, quant à la couverture qui est faite, que ce soit par TVA ou n'importe quel autre réseau.

9732   MME ROUTHIER-BOUDREAU: Bien, je pense que quand on fait allusion à l'étude qui a été faite en Acadie... Depuis longtemps... ça fait depuis longtemps qu'on dit que le Téléjournal ne reflète pas suffisamment la réalité de nos communautés francophones et acadiennes. Je vous dirais même que les régions du Québec vous diraient peut-être la même chose par rapport au Téléjournal.

9733   Mais le Téléjournal, c'est loin d'être la seule émission. Ce qui est important pour nous, ce qui est prioritaire pour nous à ce moment-ci, c'est vraiment les productions au niveau local. Si on veut assurer d'avoir un Téléjournal qui reflète bien les communautés francophones et acadiennes, il faut s'assurer d'abord et avant tout qu'il y a des productions qui se font au niveau local et au niveau régional.

9734   Et c'est comme ça qu'on va assurer de pouvoir diffuser plus largement la réalité et le reflet des communautés francophones et acadiennes.

9735   M. QUINTY: Est-ce que je peux « faire du pouce » sur votre intervention, Madame la Présidente?

9736   MME ROUTHIER-BOUDREAU: Oui.

9737   M. QUINTY: Dans le cas des deux réseaux, je crois, également, TVA et Radio-Canada, les francophones font souvent la part des choses entre les services régionaux et l'antenne nationale. Je crois que l'insatisfaction majeure des francophones, par rapport aux deux réseaux, et c'est un dénominateur commun, je crois, est à l'égard de l'antenne nationale.

9738   Généralement, en particulier dans l'Ouest, je vous dirais, les gens, les francophones ont des relations quand même assez... ont des liens très intéressants avec leur station régionale de Radio-Canada qui joue un rôle très important pour elles. Et je vous dirais même que groupe Inter-Rives ont paru la semaine dernière... TVA détient 47 pour-cent du groupe Inter-Rives. CHAU et CIMT diffusent TVA, et ce sont des stations qui sont extrêmement écoutées dans le nord du Nouveau-Brunswick.

9739   Donc, encore là, il y a une distinction à faire entre les services locaux et l'antenne nationale.

9740   CONSEILLÈRE POIRIER: Et dans ce sens-là, Télé Inter-Rives nous a dit qu'il y aurait un journaliste maintenant, qui serait disponible, vraiment, sur place, semble-t-il, pour le Nouveau-Brunswick. Et ça, ça vous satisfait, vous trouvez ça intéressant comme débouché?

9741   MME ROUTHIER-BOUDREAU: Tout service additionnel, tout service qui est bonifié, qui peut mieux refléter la réalité des communautés est grandement apprécié.

9742   CONSEILLÈRE POIRIER: Parfait. Ça sera à Edmundston, monsieur Arpin me spécifie.

9743   Alors, si je regarde bien tout ce que vous obtenez -- et je pourrais peut-être dire « le peu que vous obtenez » comme diffusion nationale, c'est « La croisée des chemins », c'est « Destination Nord-Ouest » et « Via TVA ». C'est à peu près tout ce qu'un Québécois pourrait voir des francophones hors Québec et, inversement, que les francophones hors Québec peuvent voir d'eux à la télévision nationale?

9744   M. CHATEL: En fait, « La croisée des chemins », ça, c'était à Radio-Canada. Ce n'était pas au Groupe TVA, c'était...

9745   CONSEILLÈRE POIRIER: Non, non. Ça, je le sais.

9746   M. CHATEL: O.K.

9747   CONSEILLÈRE POIRIER: Mais je parle...

9748   M. CHATEL: Ah! Non... Non, non.

9749   CONSEILLÈRE POIRIER: ...d'une vitrine nationale.

9750   M. CHATEL: Ah! O.K. Dans l'ensemble des chaînes de télévision?

9751   CONSEILLÈRE POIRIER: Oui.

9752   M. CHATEL: Non. Il y a d'autres... Tous les membres de notre alliance produisent des émissions qui peuvent être vues sur différentes chaînes, au Groupe TVA, à Radio-Canada, à TFO, à Canal D, ARTV, TV5.

9753   Donc, il y a quand même une offre qui est dispersée sur l'ensemble de ses chaînes-là. Mais si on parle spécifiquement du Groupe TVA, il y a effectivement (depuis qu'ils ont leur licence), il y a eu « Destination Nord-Ouest » à deux reprises (il y a eu deux séries) et cette émission, « Via TVA », qui existe depuis plusieurs années, qui était le magazine hebdomadaire le samedi à 12 h 30. Et certains événements spéciaux... « Salut, Bonjour! », par exemple, avec une émission qui a été faite en Acadie, ou ce genre de...

9754   C'est principalement ça qui a été fait.

9755   CONSEILLÈRE POIRIER: Dans les documents que vous avez présentés avant aujourd'hui, vous dites qu'un journaliste dans l'Ouest, c'est bien beau, mais il en faudrait ailleurs. Pouvez-vous nous dire où vous voudriez, aussi, au minimum, avoir des journalistes pour être sur TVA national?

9756   MME ROUTHIER-BOUDREAU: Moi, je vous dirais: au minimum, en Ontario, compte tenu du bassin important de population de francophones. Et en Acadie, bien sûr (on parle du Nouveau-Brunswick, au minimum).

9757   CONSEILLÈRE POIRIER: Est-ce que vous avez eu des rencontres formelles ou informelles avec TVA pour créer ce lien-là et exprimer vos besoins?

9758   MME ROUTHIER-BOUDREAU: Bien, c'est ce qu'on déplore... c'est ce qu'on trouve regrettable. Il y avait évidemment... Selon les conditions qui étaient associées à la licence, il y avait ce concept de créer un comité consultatif.

9759   À ma connaissance, on n'a pas été interpellé à participer à ce comité-là. Et d'ailleurs, dans la préparation des travaux qui ont précédé justement cette comparution, aucune nouvelle non plus de la part de TVA, à savoir quelles sont nos réactions ou nos préoccupations par rapport à vouloir abandonner les francophones hors Québec.

9760   Il n'y a vraiment pas eu, à notre connaissance, d'efforts de faits à ce niveau-là.

9761   CONSEILLÈRE POIRIER: Depuis 11 ans, aucun effort? Ou récemment seulement?

9762   MME ROUTHIER-BOUDREAU: Moi, je vous dirais, depuis la demande d'appui il y a 11 ans, de les soutenir dans la demande de licence.

9763   M. CHATEL: Puis, au niveau du secteur de la production indépendante, je peux vous dire aussi que les rapports sont très, très limités entre le Groupe TVA et les producteurs indépendants. D'ailleurs TVA ne fait affaire qu'avec deux des boîtes de production sur les 14 boîtes de production que nous représentons.

9764   Et c'est pour ça aussi qu'on dit que s'ils ont une obligation de licence, par exemple de 15 pour-cent de leur budget de production, destiné à la production indépendante hors Québec, à ce moment-là, il y a vraiment ce rapport de forces qui est établi, où ils doivent communiquer avec nous et entrer en relation d'affaires avec nous, ce qui n'est pas le cas actuellement.

9765   CONSEILLÈRE POIRIER: En faisant le bilan de ce que vous nous dites, est-ce que vous pensez que vous pourriez être mieux servis par un autre radiodiffuseur au niveau national?

9766   MME CLOUTIER: Bien, on s'entend que Radio-Canada fait le travail -- en tant que société d'État -- d'être le diffuseur national privilégié, pour les communautés.

9767   Ce qu'on déplore, c'est qu'au fond, Groupe TVA est celui qui a les plus grosses cotes d'écoute, les plus grosses parts de marché, le plus grand taux de popularité, si on peut dire. Et on pourrait s'attendre à ce qu'une chaîne comme celle-là, qui a un énorme pouvoir d'attraction en même temps, fasse un peu plus d'efforts envers nos communautés.

9768   Donc, ça se trouve à être Radio-Canada et TFO qui font le travail de se rapprocher des communautés, de leur offrir... Mais la chaîne qui elle a les plus grandes parts de marché ne fait pas cet effort-là et se cantonne à faire ce qui était minimalement demandé par la condition de licence.

9769   Et il y avait les avantages tangibles qui ont fait qu'ils ont aussi investi une part. Mais une fois que les avantages tangibles sont terminés, on a l'impression que ça va être encore moins, à moins qu'il y ait des conditions de licence très fermes.

9770   CONSEILLÈRE POIRIER: Est-ce que parce que TVA est la station francophone, justement la plus populaire -- sur laquelle on voit, bon, « Star Académie » et bien d'autres émissions très populaires... Est-ce que c'est une chaîne dont vous ne souhaitez pas vous passer, mais il y aurait les conditions qui sont celles que vous avez exprimées dans vos documents, c'est-à-dire: maintenir les conditions actuelles, ajouter des journalistes plus largement, à travers tout le Canada, et obtenir par condition de licence qu'il y ait des obligations de rencontres avec TVA?

9771   M. QUINTY: Ce que je souhaiterais vous dire là-dessus, du point de vue de la FCFA, c'est qu'on ne voudrait pas jeter le bébé avec l'eau du bain, c'est-à-dire que bien sûr, la présence de TVA, comme on l'a mentionné dans... et comme Madame la Présidente l'a mentionné dans son allocution est bien sûr une valeur ajoutée.

9772   Ce qu'on veut faire, c'est miser et bâtir sur ce qu'on a en ce moment pour aller chercher vraiment le reflet de la francophonie canadienne, que TVA s'était engagé à nous donner.

9773   MME ROUTHIER-BOUDREAU: Et juste rajouter... TVA est essentiel pour nous. C'est important, on veut les garder avec nous, on veut travailler avec eux. C'est important pour les communautés, mais je vous dirais que c'est important aussi pour les citoyens et les citoyennes au Québec, parce que c'est une façon exceptionnelle, pour les Québécois, de mieux apprendre à nous connaître aussi, à l'extérieur du Québec.

9774   Et je pense que tout le monde est gagnant avec une association qui est productive.

9775   M. CHATEL: Et j'espère que vous avez pris note de cette vision que nous avons exposée aujourd'hui, dans cette convergence du Groupe TVA, qui pourrait tellement être mise à profit, donc, de la francophonie canadienne.

9776   Donc, on s'imagine tout ce qu'ils pourraient faire s'ils mettaient autant d'efforts qu'à « Star Académie » dans toutes leurs plateformes par rapport à la francophonie canadienne (on ne demande pas autant, mais pourquoi pas). Je me dis, on pourrait faire des gains très importants, puis faire tellement mieux connaître la réalité francophone à l'extérieur du Québec à tous les auditeurs, lecteurs, téléspectateurs de ce grand groupe qu'est TVA.

9777   CONSEILLÈRE POIRIER: Bien, TVA nous a dit vouloir le faire, en tout cas, avec la ville de Québec et la région de Québec. On verra s'ils peuvent aussi s'engager à le faire au niveau des communautés hors Québec.

9778   Et lorsqu'on les a rencontrés, on leur a posé la question à l'effet de savoir s'ils étaient intéressés à ouvrir le dialogue avec les communautés hors Québec et ils nous ont répondu oui, dans les discussions à huis clos. Alors, je pense que de ce côté-là au moins, on a eu une réponse partielle.

9779   Du côté de l'Alliance, j'aimerais savoir si vous savez combien d'argent TVA a investi dans la production indépendante hors Québec.

9780   MME CLOUTIER: Je vous avoue que je n'ai pas mon rapport de chiffres. Si je me souviens bien... En licence ou en budget de production? Et sur quelle période? Je pourrais vous --

9781   CONSEILLÈRE POIRIER: Oui, vous pourriez nous acheminer le tout.

9782   MME CLOUTIER: Je vais vous fournir les chiffres parce que... Environ, pour nous, ça représente en ce moment sept pour-cent de notre production, qui est avec TVA. Si on compare, TFO, en ce moment, représente 40 pour-cent; Radio-Canada, à peu près 37, de notre marché pour... Après ça, il y a ARTV, suivi de TVA.

9783   TVA est le quatrième groupe, en termes de budget de production et de licence avec lequel on travail.

9784   Mais les montants, je vais vous les fournir exactement. On a des statistiques depuis 2003 qu'on tient annuellement sur les budgets de production et de licence avec ces diffuseurs-là.

9785   M. CHATEL: Est-ce que je peux juste compléter, ici?

9786   CONSEILLÈRE POIRIER: Oui.

9787   M. CHATEL: C'est que je vous dirais aussi que le problème, peut-être, c'est que tous les fonds vont vers une... pratiquement une seule production. Et s'il y avait plus de productions faites avec l'argent que dépense TVA, il y aurait beaucoup plus d'opportunité de visibilité à leur antenne. Tout l'argent est mis, finalement, dans une excellente série qui est « Destination Nord-Ouest », puis on est très content que cette série-là soit faite, mais c'est un rendez-vous dans l'année, de quelques émissions et c'est tout.

9788   Donc, si cet argent-là était distribué à plusieurs autres productions et que TVA travaillait avec plusieurs producteurs, et que toutes ces émissions-là, finalement, se retrouvaient un peu partout dans la grille horaire, je pense que les francophones à l'extérieur du Québec se reconnaîtraient beaucoup plus que juste pendant six semaines ou dix semaines, un soir semaine et c'est tout.

9789   CONSEILLÈRE POIRIER: Dans votre document d'aujourd'hui, vous dites que le Groupe TVA... bon, vous doutez du fait que le Groupe TVA soit déficitaire de 800 000 $. Sur quoi vous vous basez pour faire cette affirmation-là et qu'est-ce qu'on pourrait demander à TVA, pour obtenir les informations plus précises qui nous permettraient savoir exactement ce qu'il en est?

9790   MME CLOUTIER: Dans les conditions de licence, il était dit justement qu'il devait y avoir un rapport sur l'état des dépenses et revenus hors Québec, de même qu'ils devaient investir, je crois, 47 pour-cent de l'excédent des revenus... 43 pour-cent de l'excédent des revenus. Et ça, on n'a jamais eu, nous, les données. Peut-être que c'est à huis clos et que ces données-là, vous, vous les avez. Mais nous, on n'a aucune statistique.

9791   Mais finalement, ils viennent dire que c'est à perte qu'ils travaillent avec nous, alors que les projets comme « Via TVA » ou « Destination Nord-Ouest »... « Destination Nord-Ouest » jouit d'un bon financement du Fonds canadien de télévision. La licence de TVA, je ne pense pas qu'elle est...

9792   Et en même temps, il y a un placement publicitaire, là. C'est en heure de grande écoute que cette émission-là est diffusée. Donc, probablement que... je ne sais pas qu'est-ce qu'ils comptabilisent, mais du côté de nos membres on émettait un doute sur ce chiffre-là.

9793   Je vous avoue, oui, on n'a pas les données pour... étant donné que ce sont eux, mais qu'est-ce qu'ils incluent pour dire finalement que c'est à perte qu'ils diffusent hors Québec, on...

9794   M. CHATEL: Parce que si on regarde juste sur le plan, pardon, de ces émissions-là et une émission comme Destination Nor'Ouest qui va chercher 800 000 de côte d'écoute, il y a de la difficulté à croire que c'est déficitaire, là.

9795   Ça dépend qu'est-ce qu'on inclut dans leur calcul. On n'a pas le détail du calcul pour comment ils arrivent à dire que c'est 800 000 $ déficitaire, c'est difficile pour nous de commenter ça.

9796   CONSEILLÈRE POIRIER: Une question peut-être plus générale. Vous demandez le statu quo sur les conditions de licence pour TVA puis les entreprises, elles, nous disent de leur côté qu'elles veulent avoir plus de flexibilité parce qu'il y a comme un «tsunami», pour prendre l'expression qui a été avancée par monsieur Antony ce matin au niveau des radiodiffuseurs en général à cause de la crise économique.

9797   Alors, comment est-ce que votre position dans laquelle vous exigez le minimum et même davantage pourrait leur donner un peu de flexibilité, du moins pour une année de licence?

9798   Mme CLOUTIER: Je pense qu'en ayant justement... bon, en ce moment, les conditions de licence sont par rapport à des émissions précises.

9799   VIA-TVA, pour nous c'est un beau rendez-vous. C'est vrai que c'est une belle occasion, on s'assure que c'est... pendant 30 minutes on parle de la réalité hors Québec.

9800   Peut-être que d'y aller davantage avec une formule justement ou un pourcentage de la production indépendante qui serait investie à l'extérieur du Québec, nous, on propose dans deux des quatre genres déjà financés par le Fonds canadien de télévision pour quand même peut-être faire une variété.

9801   On croit qu'un moyen de développer avec eux, de leur proposer des projets qui vont répondre à leurs priorités, leur grille, donc je pense qu'on pourrait s'asseoir et peut-être au lieu de fixer tel type d'émission de temps d'antenne ou de telle durée, plutôt de parler d'un pourcentage en investissement de la production indépendante et, là, bien, c'est un partenariat d'affaires gagnant-gagnant.

9802   CONSEILLÈRE POIRIER: Alors, si je comprends bien, avec le même argent TVA pourrait faire autrement pour répondre à vos attentes en général en vous consultant?

9803   M. CHATEL: Absolument. Dans le fond, on ne demande pas plus d'argent... de l'argent disponible. C'est juste qu'ils le redistribuent différemment puis qu'ils tiennent compte davantage de la production indépendante hors Québec avec un pourcentage tel que celui que nous suggérons aujourd'hui.

9804   CONSEILLÈRE POIRIER: J'ai une dernière question, monsieur le président.

9805   On a eu une présentation qui a été faite par Bell Canada concernant le Free Sat, comme on dit, et dans cette présentation-là, malheureusement, les exemples ne touchent pas nécessairement des communautés minoritaires francophones hors Québec, mais s'adressent vraiment à un des problèmes que vous visez qui est celui de la distribution, s'assurer que vous êtes distribué un peu partout.

9806   Et souvent, bon, le satellite peut être une bonne avenue, si je comprends bien, pour l'ensemble de vos communautés.

9807   Est-ce que vous avez regardé ce document-là? Est-ce que vous pensez que la solution qui est présentée pourrait vous aider à rejoindre un peu plus les francophones et sinon, est-ce que vous voulez nous présenter dans les prochains jours peut-être votre opinion là-dessus?

9808   Mme ROUTHIER-BOUDREAU: Moi, je n'ai pas eu l'occasion de voir le document, mais on peut certainement vous faire part de nos commentaires suite à ce qu'on en a pris connaissance.

9809   CONSEILLÈRE POIRIER: Parfait. Alors, j'aurais terminé, monsieur le président.

9810   LE PRÉSIDENT: Michel?

9811   CONSEILLER ARPIN: Merci. Le document, il est disponible au secrétariat. J'ai une série de questions qui ne seront pas nécessairement ordonnées, là, mais j'ai peut-être... Dans sa demande, c'est parce que la question va... je vais en poser une autre. C'est parce que ma question s'adressait à vous. Alors, dans sa demande, à l'Annexe 1, TVA a écrit que 43 pour cent de zéro, ça donne rien à réinvestir et, ça, c'est dans leur Annexe 1. Alors, je ne sais pas si...

9812   Maintenant, ce qu'il disent: ne pas pouvoir monnayer la distribution du signal hors... hors Québec ou, du moins, hors des confins du Canada français parce que RNC puis Télé Inter-Rives le monnayent certainement, mais pas le Groupe TVA.

9813   Mme CLOUTIER: Bien, déjà c'est pour ça qu'on appuie la question des redevances. Si TVA avait la question des redevances pour les télés généralistes, donc les abonnés qu'ils auraient à l'extérieur du Québec, ça deviendrait monnayable ce public-là.

9814   L'autre chose qu'il y a, c'est la question de BBM Nielsen, étant donné qu'on n'est pas chiffré, on ne tombe pas dans un auditoire, une plus-value, moi, que j'appelle, dans le sens où ils peuvent offrir beaucoup plus d'auditeurs, emplacements publicitaires à leurs partenaires.

9815   Donc, en ce moment c'est problématique et je peux comprendre de leur côté qu'ils n'y trouvent peut-être pas leur gain actuellement à rejoindre ce public-là. Mais en même temps, ils veulent continuer à être distribués nationalement, sauf erreur. Donc, ils doivent quand même y avoir un avantage de distribution obligatoire nationale.

9816   CONSEILLER ARPIN: Enfin, ils nous ont aussi dit que... parce que la question leur a été posée, à savoir: est-ce qu'on devrait maintenir votre statut 91H et ils nous disent que c'est un handicap d'avoir un statut de 91H pour être capable de négocier avec les distributeurs pour un frais de distribution.

9817   Et, jusqu'à un certain point, ils nous ont laissé entendre relativement clairement que le statut 91H, peut-être qu'ils s'en passeraient aisément.

9818   Alors, ma question, c'est: quel serait l'impact basé sur votre connaissance du milieu hors Québec, quel serait l'impact si le Conseil relevait Groupe TVA de son statut 91H, comment se comporteraient les distributeurs par rapport à la distribution du signal de TVA?

9819   M. QUINTY: C'est une bonne question parce que TVA a indiqué lundi au Conseil qu'il avait l'intention de se prévaloir de la nouvelle règle qui leur permet de négocier le tarif de distribution de leurs signaux éloignés.

9820   Maintenant, l'idéal d'avoir une distribution au service de base, c'est que... et ça, on l'a mentionné en janvier, c'est que les francophones n'ont pas besoin de s'abonner à 56 000 forfaits pour avoir une espèce de bouquets décent, là, de service de langue française.

9821   Donc, c'est sûr et certain que nous autres, au niveau de la variété qui est présentement en ondes, on y verrait un recul.

9822   CONSEILLER ARPIN: Parce que vous êtes convaincu qu'il y a un auditoire pour TVA chez les francophones hors Québec. Pas nécessairement dans la région ici parce qu'il y en a un, on le voit par la... parce qu'il est mesuré celui-là, mais dans l'ouest ou voire même à Toronto...

9823   M. QUINTY: Oui. Moi, je vous dirais que, définitivement... Écoutez, lorsque TVA sont venus nous voir il y a 10 ou 11 ans pour obtenir justement cette désignation 91H là, les groupes francophones ont fait la file devant vous pour appuyer cette demande-là puis je pense qu'il y avait quand même un besoin là.

9824   Et je crois que, effectivement, les gens sont contents dans nos régions d'avoir une certaine variété, d'avoir un certain choix au service de base en terme de service francophone.

9825   CONSEILLER ARPIN: Maintenant, quand les représentants de TVA vous ont rencontré, je crois que ce ne sont pas les mêmes qui sont présentement des exploitants de TVA, hein! Il y a eu un changement de la garde, tant au niveau de la propriété que de la gestion.

9826   Maintenant, vous parlez, monsieur Chatel, de VIA-TVA et puis des émissions spéciales qui émanent... qui ont émané.

9827   Avez-vous déjà mesuré l'impact de VIA-TVA et de ses émissions spéciales auprès de l'auditoire québécois? Quel est l'intérêt que les québécois ont pour ces émissions? Est-ce que c'est quelque chose que vous avez déjà cherché à mesurer, chercher à comprendre? Parce qu'il y a une espèce de contre-partie là.

9828   TVA se trouve à vous céder du temps d'antenne qui pour... et pour des émissions qui permettent une fenêtre, mais est-ce que...

9829   M. CHATEL: Bien, il y a des cotes d'écoute, hein! qui existent pour cette émission-là puis ça oscille entre 200 et 300 000 personnes donc, qui écoutent le samedi après-midi, à midi trente en fait, c'est évident, québécois.

9830   CONSEILLER ARPIN: Oui, sauf que l'antenne de TVA est tellement forte que 200 000 personnes c'est probablement... je ne veux pas être facétieux là...

9831   M. CHATEL: Non, mais à cette heure-là... à cette heure-là c'est tout à fait respectable et tout à fait dans les normes et donc, il y a un intérêt quand même tout à fait appréciable à cette heure-là à TVA pour cette émission-là, écoutée par des québécois.

9832   Et puis je sais aussi que la plate-forme internet qu'ils ont développée autour de la série VIA-TVA est très populaire aussi puis avec des contenus très intéressants qui portent sur l'ensemble des communautés francophones, mais c'est consulté.

9833   CONSEILLER ARPIN: Et ils sont consultés par des québécois?

9834   M. CHATEL: Oui, tout à fait.

9835   CONSEILLER ARPIN: Et?

9836   M. CHATEL: Et aussi les francophones hors Québec.

9837   CONSEILLER ARPIN: Non, non, mais ça, je n'en doute pas parce que c'est une fenêtre comme...

9838   M. CHATEL: Mais on a moins les statistiques pour l'utilisation du site internet là, à savoir si c'est des québécois et tout, mais on sait que c'est un site qui est consulté pas mal.

9839   Mais à la télévision, les cotes d'écoute ce sont des québécois qui sont sondés. Alors, oui, il y a un public.

9840   CONSEILLER ARPIN: Puis ils se sont maintenus dans le temps?

9841   M. CHATEL: Tout à fait.

9842   CONSEILLER ARPIN: Parce que Destination Nor'Ouest, ça, je peux comprendre que ça... parce que c'est une télé-réalité qui est bien faite, là, mais qui... qui a beaucoup d'information à caractère historique et puis...

9843   M. CHATEL: Mais encore là, c'est la... puis le groupe de l'ACFTPA plus tôt en parlait aussi, c'est tout l'effort de promotion qui est mis derrière les émissions, hein! qui donne aussi un succès donc.

9844   Imaginez donc encore cette convergence mise à profit d'une série comme VIA-TVA où on en parlait beaucoup plus souvent puis dans leur magazine puis sur canoë puis ainsi de suite. Je pense qu'il y aurait une conscientisation beaucoup plus forte et un intérêt encore accru des québécois pour cette réalité francophone hors Québec.

9845   Mais quand c'est logé à 12 h 30 un samedi après-midi quand il fait soleil dehors, bien c'est sûr qu'il y a moins de gens qui découvrent l'existence de cette réalité-là.

9846   CONSEILLER ARPIN: Mais ils l'ont fait pour Destination Nor'Ouest.

9847   M. CHATEL: Oui, parce que c'est un genre d'émission aussi qui frôle, bon, la télé-réalité, qui est dans l'air du temps, c'est à la mode puis c'est un concept qui est intéressant au départ. L'idée frappe l'imaginaire, je pense, des téléspectateurs de revivre comme les pionniers à l'époque et remonter en canot d'écorce, c'est sûr que ça frappe l'imaginaire, donc à ce niveau-là, on ne s'étonne pas du succès.

9848   CONSEILLER ARPIN: Et diffusé dans de très bonnes heures de prime time.

9849   M. CHATEL: Écoutez, à 21 h 00 le jeudi soir, c'est sûr que c'est un des meilleurs créneaux horaires avec la promotion. Quand on regarde leurs annonces publicitaires avec la programmation d'été à TVA, on voit des images de Destination Nor'Ouest dans le montage d'une minute.

9850   Alors, tout ça fait que, oui, il y a des succès lorsqu'il y a de la promotion.

9851   CONSEILLER ARPIN: Donc, au plan promotionnel, ils ont quand même consenti les efforts et puis les moyens qui étaient nécessaires pour soutenir l'intérêt des téléspectateurs, avec des résultats d'écoute qui sont intéressants.

9852   M. CHATEL: Quand il y a de la volonté, il y a des résultats.

9853   CONSEILLER ARPIN: Écoutez...

9854   Mme ROUTHIER-BOUDREAU: Juste ajouter, monsieur, si vous le permettez. J'ai l'occasion de sillonner le pays assez fréquemment et je peux vous dire que de vive voix j'ai entendu en Saskatchewan, à Edmonton comme à Toronto des collègues parler de Star Académie et de Salut Bonjours et ça, plus d'une fois.

9855   Alors, oui, il y a des auditeurs, des téléspectateurs à la grandeur du pays. Mais il me semble qu'au-delà de ça, il me semble que quand on a le privilège d'être un diffuseur national, ça doit venir aussi avec les responsabilités de bien desservir les populations dans les deux langues officielles.

9856   CONSEILLER ARPIN: Est-ce que le producteur de VIA-TVA a, lui, des retours de québécois qui lui demandent de... outre le site internet, est-ce que lui a des retours?

9857   Si vous n'avez pas nécessairement la réponse aujourd'hui, mais peut-être vérifier avec lui voir si... quelle sorte de retour qu'il a de l'auditoire québécois par rapport à VIA-TVA parce que, ça, au moins d'est une continuité. Ce n'est pas juste un événement spécifique; c'est hebdomadaire et depuis quelques années, donc...

9858   M. CHATEL: Oui, on peut vérifier auprès du producteur Louis Paquin des Productions Rivard, effectivement, s'il y a des échos du Québec. Je sais que son émission a beaucoup évolué aussi au fil des ans et tout le packaging, si vous me permettez l'expression, de cette émission-là s'est beaucoup amélioré avec le temps et puis avec des rendez-vous dans les trois régions hors Québec, par émission, le contenu est très solide aussi.

9859   Donc, je pense qu'il y a eu un genre d'habitude là, des communautés de voir cette émission-là à l'antenne, puis avec des échos jusqu'à un certain point donc du Québec. On va vérifier quand même pour être certain.

9860   CONSEILLER ARPIN: D'accord. Merci, monsieur le président. C'était mes questions.

9861   LE PRÉSIDENT: O.k. Merci. Ce sont nos questions pour vous. Maître Dion, est-ce que vous avez des engagements?

9862   COMMISSIONER MENZIES: I have one. I just have one question.

9863   THE CHAIRMAN: Excuse me.

9864   COMMISSIONER MENZIES: Just one quick question. I need to know where you get the number of 2.5 million francophones outside of Quebec from, just because -- or how you are calculating that because on the Statistics Canada website, it only has 600,000 people who speak French inside the home outside of Quebec? That's a big difference.

9865   M. QUINTY: That's a very good question and the statistics, especially with the census is there are a lot of categories that we use. The 2.5 million that we've taken in this instance is the number of people who know how -- who have knowledge of French. We are taking this number today in this presentation because I personally know a good number of francophiles who listen to some French programming in TVA and Radio-Canada.

9866   As for the number regarding the number of French -- the number of people who speak French most often at home, we tend not to use that a lot any more because you never know what kind of context the person is living in.

9867   I mean, my fiancee is American. So, I speak English most often at home, but I'm a francophone. I work for the Fédération des communautés francophones et acadiennes. So, that's why we use that data less.

9868   Usually the data we are also going to use to define who is a francophone is first official language spoken, which is a composite data that is calculated by Statistics Canada that measures notwithstanding mother tongue and so on, who really does speak French, use French most often in daily life. And by that calculation, we have about, I would tell you, 1,050,000 people outside of Quebec.

9869   COMMISSIONER MENZIES: Okay. Thank you very much.

9870   LE PRÉSIDENT: Okay. Maître Dion, les engagements?

9871   Mme DION: Oui. Merci, monsieur le président. J'ai deux engagements: une plus spécifique à l'Alliance des producteurs francophones du Canada qui est de nous fournir les tarifs de licence payés par TVA en comparaison avec ceux payés par d'autres radiodiffuseurs.

9872   Je vous demanderais de déposer cette information pour le 11 mai en copiant TVA qui aura jusqu'au 13 mai pour répliquer.

9873   L'autre engagement, c'est pour les deux intervenants qui est de nous fournir des commentaires sur la proposition de Bell Free Sat. Vous avez jusqu'au 13 mai qui est la date limite pour le dépôt des commentaires finaux sur les questions de la politique.

9874   Merci, monsieur le président.

9875   CONSEILLER ARPIN: Il y en a un troisième engagement, c'est de vérifier auprès du producteur de VIA-TVA l'intérêt de l'auditoire québécois pour cette émission.

9876   Mme DION: Parfait. Et je vous demanderais de déposer cet engagement pour le 13 mai. Merci.

9877   LE PRÉSIDENT: Okay. Merci. Madame la secrétaire, je crois qu'on va progresser avec le prochain intervenant avant la pause.

9878   THE SECRETARY: Yes. I would now invite the English Language Arts Network to come forward to the presentation table, please.

--- Pause

9879   THE SECRETARY: Appearing for the English-Language Arts Network is Mr. Kirwan Cox.

9880   Mr. Cox, when you are ready, you have 15 minutes to make your presentation.

INTERVENTION

9881   MR. COX: Good afternoon. Chairman von Finckenstein and members of the panel, I want to thank you for giving ELAN an opportunity to speak at this important hearing.

9882   My name is Kirwan Cox and I am here representing the English-language Arts Network of Quebec. ELAN has over 1,700 members, including nearly 200 in the film and television industry in Quebec.

9883   We have heard these past 10 days from the broadcasters that their business model is broken. They are right, it is broken, and they are largely responsible for breaking it.

9884   Of course, they cannot be blamed for the fragmentation of their audience, which was an inevitable result of technological transformation, just as television transformed the film industry half a century ago. Nor can they be blamed for the recession which has ravaged advertising-based industries.

9885   They probably shouldn't be blamed for the branch plant economy, colonial mentality, cultural inferiority complex, American spillover media or whatever it is that causes advertisers to spend only $100 per capita on TV ads in Canada versus $211 in the U.S.

9886   However, the English-language broadcasters can be blamed for profligate spending in the Hollywood auction over the past 10 years.

9887   Minimum Cancon expenditure rules once controlled foreign overspending but the CRTC eliminated those rules in its 1999 TV policy. As a result of this decision, English off-air broadcaster spending on Cancon declined from about 53 percent of total program dollars to roughly 38 percent today. At this rate, they will soon be spending only one-third on Canadian programming even if the recession temporarily slows this upward trend in foreign purchases.

9888   We estimate that this decline has meant a loss of $800 million in Canadian licence fees over the last decade, representing about $3.4 billion in lost programming. That is over $500 million lost in production in English-Quebec. We have actually seen CAVCO certified English-Quebec production fall by one-third during this decade.

9889   How can these suddenly bankrupt broadcasters afford to increase spending on American programming by hundreds of millions of dollars, paying among the highest per capita licence fees in the world?

9890   Well, the answer is they are cross-subsidizing these costs from other sources of revenue. One source is the simultaneous substitution rule, which provides broadcasters with a benefit of about $200 million in ad revenues. Unfortunately, simulcasting has a pernicious and unintended side effect. This regulation pushes Cancon to the fringes of peak viewing time on private English-language networks and that reduces audiences for Canadian programs.

9891   Another reason broadcasters can afford to spend wildly in Hollywood is taxpayer support for their Canadian programming. Tax credits, CTF and other public sources pay about 40 percent of their independent production. They only have to pay 23 percent of the total budget and that is the lowest average licence fee among English-language broadcasters in the world. English-Canadian commercial broadcasters then spend these tax-subsidized dollars in Los Angeles, not in Canada.

9892   So you have them spending the lowest licence fees for independent production and then paying the highest licence fees for American production and the gap between that is the broken model.

9893   As Chairman von Finckenstein said to the CFTPA on February the 19th this year:

"The Broadcasting Act calls for no less than the predominant use of Canadian creative and other resources in the creation and presentation of programming, so this is a matter of concern for us. At first blush, we are inclined to introduce a condition of licence for English-language broadcasters requiring a l-to-l ratio between Canadian and non-Canadian programming expenditures."

9894   At first blush, at second blush and at third blush, we couldn't agree more. We support the 1:1 ratio condition of licence, which would help save the broadcasters from themselves and their broken business model.

9895   It would reduce their overall expenditure on American programming without reducing access to that programming. It would increase the profit these broadcasters derive from foreign programs by capping their cost. This would help the private broadcasters balance their books just as the salary cap on hockey players helps the NHL team owners survive their self-destructive tendency to overpay top talent.

9896   We also believe that an alternative to the current simultaneous substitution rule is needed. Perhaps a "non-simultaneous substitution" rule should be tried. This would substitute Canadian ads at any time the American program is broadcast within the copyright period owned by the Canadian broadcaster.

9897   Some people seem to think the Local Programming Improvement Fund (LPIF) is the "broadcaster bailout fund." If so, then the end result will be more money leaving Canada to buy the same American programs at even higher prices.

9898   Instead, the LPIF needs to remain focused on local programming but redesigned to also support official language minority production.

9899   Let me start with the frequently forgotten quarter-million Anglophones who live "off-island" in small and isolated communities in an area half the size of Europe. These communities are so small that they cannot support off-air local broadcasters who would benefit from the LPIF as it is currently proposed.

9900   We get our television from CBC rebroadcast transmitters or satellite and cable services. We may be well served in American English but underserved in local news or regional reflection. We know the local problems of Los Angeles and get the news from Burlington, Plattsburgh and Montreal. These are cities that may be more than one day's drive away, assuming you drive very fast, providing the only local news available in English.

9901   BDUs in Quebec spend $46 million on community channels and $25.6 million on local expression. Even with these expenditures, their profit margin is 30 percent before interest and taxes. Yet, these community channels and regional expressions do not exist in English. While 90 percent of Quebec Anglophones are served by Videotron, Videotron has no English-language local services, not even in Montreal.

9902   On the other hand, Francophones in communities outside of Quebec have TFO, the French-language educational channel in Ontario. TFO has a programming budget of $17 million and is part of TVO, with a total budget of $81 million.

9903   Télé-Québec has a total budget of $76 million and programming costs of $40 million. However, there is no English-language educational broadcaster in Quebec. It is unrealistic to think there ever will be an English Télé-Québec equivalent to TFO.

9904   Yet, increasingly, a broadcast trigger is needed to arrange production funding and an educational channel is extremely important for official language minority production.

9905   For example, Francophone producers outside Quebec have received 40 percent of their licence fees for all their production over the last five years from TFO. Radio-Canada has provided 36 percent and ARTV 11 percent.

9906   This year there are only 40 documentary -- I shouldn't say only -- there are 40 documentary applications for SODEC funding. Only four come from English-language producers and only one has a broadcast funder. That is CBC for a project set in Alberta. Of the 36 French projects, 10 are supported by Télé-Québec, 9 by Radio-Canada, 3 by ARTV.

9907   The official language minority in Quebec needs an equivalent to Télé-Québec or TFO. We think the LPIF offers a solution to this problem.

9908   First, the CBC should be eligible for LPIF funding. The public broadcaster is essential to official language minority communities and we hope its budget will be increased so it can again serve these communities as it once did.

9909   Second, Montreal broadcasters should be eligible for LPIF funding because its Anglophone population is much less than one million. According to the 2006 census, the English-speaking population of greater Montreal is 700,000 defined as "first official language spoken." The CRTC's own Brynaert report uses this definition.

9910   The Commissioner of Official Languages uses either "first official language spoken" or "language spoken at home," which would be 337,000. The Quebec Government uses the definition "mother tongue," of which there are 212,000 Anglophones in Montreal. The Anglophone population of greater Montreal is well under one million by any of these standards.

9911   The only measurement where there might be a million English speakers is "knowledge of" English, which includes hundreds of thousands of Francophones, who don't watch English TV, many of them. That is not a definition used by any other agency or government and it should not be used by the CRTC. The Commission may say it needs to consider the size of Montreal as a broadcast market, not simply a linguistic population.

9912   Using BBM data for TV viewing hours per week, we see that French Montreal is the second largest TV market, with 96 million viewing hours per week. Next is Vancouver, then Edmonton, Calgary, Quebec City, Kitchener and Winnipeg. English Montreal is the 9th largest TV market, with 18 million hours, and English Ottawa-Gatineau is 10th largest, with a little bit less, 18 million hours.

9913   Your LPIF decision 2008-100 makes Quebec City, Kitchener and Winnipeg eligible for funding and eliminates the smaller TV markets in English Montreal and English Ottawa-Gatineau. There seems to be a double standard used to eliminate these markets and we ask that LPIF eligibility rules be corrected.

9914   Third, we ask that the CRTC make documentaries a priority for LPIF, along with news and public affairs. This means assuring the eligibility of independent production, which would make it easier to reflect smaller communities outside the reach of an off-air broadcaster.

9915   While you are making these changes, please revise your 15 genre categories so there is a documentary category that is clearly separate from reality TV and human interest programs. The documentary filmmakers have been asking for a documentary category in your statistics for about 35 years. I just thought I would mention it again.

9916   Finally, we ask that the official language minority community in Quebec be given a regional channel equivalent to TFO and funded largely by the LPIF. We envision a Category 1 digital service costing about $20 million and producing a significant amount of original local programming by independent producers. It would be available throughout the province via cable or satellite.

9917   To fund it, we would suggest that the LPIF be increased to 2 percent of BDU revenues, raising about $140 million per year. The CRTC should then include an "official language minority envelope" within this expanded LPIF that would fund both English and French minority productions in TV, radio or new media.

9918   Francophones outside Quebec might prefer funding for new independent productions on TFO rather than a new channel and this official language minority community envelope should be flexible enough to support that.

9919   Anglophones inside Quebec are badly served in local programming. We need a regional Quebec TV channel with a program budget big enough to make a difference to all our underserved communities. It is time that we saw ourselves on television. Thank you.

9920   THE CHAIRPERSON: Thank you for your presentation. Tell me, you say on page 3:

"...Videotron has no English-language local services, not even in Montreal."

9921   How is that possible? The English over-the-air stations in Montreal, they have to be carried by Videotron.

9922   MR. COX: I don't mean CFCF. I am talking about community channels.

9923   THE CHAIRPERSON: Okay, fine.

9924   MR. COX: I found --

9925   THE CHAIRPERSON: That is fine.

9926   MR. COX: Okay.

9927   THE CHAIRPERSON: Now you are the first one to raise the subject of non-simultaneous substitution. Exactly what do you mean by that expression? How would it work?

9928   MR. COX: Well, what it means is that the simultaneous substitution rules that are now in effect so that advertising or the entire program which is being broadcast at the same time as an American channel that has been purchased by a Canadian channel like CTV generates, as you know, a huge amount of advertising revenue for CTV.

9929   Now, the problem is that that locks the Canadian schedules, prime time schedules to the American schedule and that pushes original programming by and large outside of prime time.

9930   So if CTV, for example, could get the benefit of playing its American program -- I am trying to think of one -- "24" is generally on Global. So let's say Global shows "24" at a different time from the American broadcast of "24," maybe by an hour or two hours or maybe longer, then it should still be able to substitute its signal -- that is the point I am making there -- within the copyright period that it has purchased the rights.

9931   THE CHAIRPERSON: So, to take your example, "24" is shown at 7:00 by NBC or whoever does it. Global doesn't show it at 7:00 but shows it at 9:00 when it shows its signal. What happens at 7:00? You substitute simultaneous substitution, right?

9932   MR. COX: What I am saying is that in the case of a -- as I understand simultaneous substitution, you are showing the signal at the same time and your signal is substituted by the cable company.

9933   THE CHAIRPERSON: Yes.

9934   MR. COX: And so I am saying that there should be more flexibility because my understanding of the reason that Canadian programs have such a tough time breaking into peak viewing period with the commercial broadcasters is because they are locking in their schedules basically to the American schedule to benefit the most from simultaneous substitution.

9935   THE CHAIRPERSON: I am trying to figure out the mechanics of what you are saying and I have a problem. Take my scenario. NBC shows "24" at 7:00 p.m. What happens in Canada at 7:00 p.m.? You don't want to have simultaneous substitution, you want non-simultaneous substitution. So at 7:00 p.m. Global shows another show?

9936   MR. COX: Yes.

9937   THE CHAIRPERSON: Right. And then it shows its own "24" at 9:00. What do you do with the U.S. signal that is being distributed by the BDU at 7:00 p.m.?

9938   MR. COX: All right. Well, you substitute the Global signal which hasn't been broadcast yet. Global says, okay, this is the signal that we are going to run at 10:00 or 9:00, whenever it is, and they tell the cable company, substitute this, and they move it by two hours. Then they run, let's say for the sake of argument, a Canadian program at 7:00. So the cable channel --

9939   THE CHAIRPERSON: That means in that scenario the BDU has to take the Global schedule which will show the show at 9:00, pre-record it and then substitute it at 7:00 for the NBC show?

9940   MR. COX: That is right.

9941   THE CHAIRPERSON: Is that technically feasible?

9942   MR. COX: If Global provides them with the tape, I don't see why not.

9943   THE CHAIRPERSON: Is that done anywhere? Does anybody know -- has anyone who has ever tried it calculated both the technical problems and the financial impact?

9944   MR. COX: The cable companies said that technically it would be too expensive to do simultaneous substitution and it wasn't. So I don't see why doing something like this -- I mean if you want, I will explore it and come back to you with technical details.

9945   THE CHAIRPERSON: I doubt that you can do that between now and Monday, so I am not going to ask. I mean there is no working model that you know of?

9946   MR. COX: There is no working model for the Canadian broadcasting system anywhere in the world.

9947   THE CHAIRPERSON: Right. I mean, everybody throws around this term, "non-simultaneous substitution." I have never understood how it would actually work and I would like to see some specifics, both in terms of technical and financial. So I guess we will have to do our own research on it.

9948   But you think that would free -- are you thinking of it in terms of the first set of 4+1s or also the second set of 4+1s?

9949   MR. COX: Obviously, the 4+1 is the priority and they have the biggest impact. The problem clearly is that Canadian programs don't have access to the television sets when most people are watching. Therefore, on average the ratings tend to be lower and so then the broadcasters use that as an excuse to say, well, the ratings are lower because Canadians don't want to watch them and you have this downward spiral. So I think it is time to break that spiral.

9950   THE CHAIRPERSON: I just had always heard the expression "non-simultaneous substitution" with respect to a second set of 4+1, which is usually shown in a different time zone, of course.

9951   So you have the Buffalo signal and you also have the Seattle signal. You can receive either one over the BDU. The first one is simultaneously substituted, the second one isn't, and I thought non-simultaneous substitution generally applied to the second set of 4+1.

9952   Your scenario is basically, let's make sure our schedule is not driven by the American because of simultaneous substitution?

9953   MR. COX: That is right.

9954   THE CHAIRPERSON: Okay, thank you.

9955   Len...?

9956   COMMISSIONER KATZ: Thank you, Mr. Chairman, and good afternoon, Mr. Cox. I am going to take you through your document. I have a couple of questions, I need some clarifications.

9957   On the top of page 2, you make reference to the fact that the broadcasters in Canada are paying among the highest per capita licence fees in the world. Do you have any statistics that support that?

9958   MR. COX: Yes. Do you want them?

9959   COMMISSIONER KATZ: You certainly can file them.

9960   MR. COX: About five years ago, I did a study that was partly funded by the CRTC and I looked at the licence fees of all of the English-language broadcasters in Australia, the U.K., Canada and the U.S. and I found out that the licence fees being paid by the English-language broadcasters in Canada were the lowest among those four countries. I have got a copy of that study and I can send it to you.

9961   COMMISSIONER KATZ: Could you make it available? I would appreciate it.

9962   MR. COX: Absolutely! It is available right now but I will send it to you.

9963   COMMISSIONER KATZ: Great! Well, I am sure the folks here will provide you with an undertaking officially.

9964   The next paragraph -- and maybe I got it wrong here but the next paragraph says:

"...they are cross-subsidizing these costs from other sources of revenue [and ] One source is the 'simultaneous substitution'..."

9965   My interpretation, unless I am missing something, is what they are doing is coming up with a forecast of revenues that can be generated, and those revenues are due to the simultaneous substitution flexibility they have, and are going to Hollywood and buying their programs based on what they think they can generate in the way of revenue and make a profit. I am not sure I would call it cross-subsidization, unless I am missing something.

9966   MR. COX: I am just simply saying that the business model of the English-language broadcasters depends on a number of subsidies -- and if you want to put that word in quotation marks that is fine with me -- one of which is the simultaneous substitution rules, that give them a lot of money because of the thing we have just been describing, in addition to which they get a lot of tax money in ways that you know, through the tax credit, Canadian Television Fund and so forth, and that what they have done with these benefits is to spend it in Los Angeles instead of spending it according to the way the Broadcasting Act says they should spend it, which is on domestic programming.

9967   COMMISSIONER KATZ: Okay. So they have the flexibility of generating more revenue by virtue of the simultaneous substitution -- I understand that -- and they may be, from your perspective, going to Hollywood and spending the money.

9968   But then you say in the next paragraph -- and that is where you mentioned after you read the paragraph about the broken model. You say:

"Tax credits, CTF, and other public sources pay [roughly] 40% of their ... production [and] They only have to pay 23%..."

9969   And therefore they can take the rest of the money and go to Hollywood and spend it.

9970   Is the alternative we should raise taxes so that they don't have that money to go to Hollywood and buy it?

9971   MR. COX: No, that is not the alternative. The alternative is that they are getting -- it is their independent production that gets the 40 percent benefit.

9972   COMMISSION KATZ: Right.

9973   MR. COX: Their independent production is being highly subsidized and all independent production in this country is being highly subsidized for cultural reasons, and, unfortunately, the end result is upside down, which is we end up paying Hollywood huge amounts of money instead of spending the money that that tax credit is giving to make better quality domestic productions.

9974   So I am not saying taxes have to be raised or people have to be flogged or anything like that. I am saying that there was an objective when those tax credits were put in place, there was an objective when the Canadian Television Fund was established, there was an objective to all of these policies, including simultaneous substitution, and it wasn't to make people in Los Angeles richer.

9975   COMMISSIONER KATZ: Yes, and I guess they would argue -- and I welcome your comment -- they would argue that they take whatever flexibility is in the system in Canada, go down to the States and buy some programming that their board of directors authorizes them to buy on the assumption that it will turn a profit and make a contribution.

9976   MR. COX: Yes, and the problem that I am raising, the reason I am saying that they are responsible for their broken model is that they are overpaying for it and they are not generating as much of a profit as they could be generating from that programming because they are overpaying for it and they have to be protected from themselves.

9977   They have to be protected from themselves just like cocaine addicts have to be protected and go into rehab or something. You know, you can't let these people loose in Los Angeles with money because they go wild, they go nuts. They just, you know, go into a hotel and they are stripped by these people and then they come back to Canada and say, well, we are businessmen and we did the best job possible. Well, I think they could do a better job.

9978   COMMISSIONER KATZ: But one would hope they have an independent board of directors that would control them since they are shareholders behind it as well.

9979   MR. COX: And you would think that all the hockey teams in Canada and the United States would have an independent board of directors that would control them as well and it hasn't worked for them. It is not working for the English-language broadcasters.

9980   If you look at -- look, in 1999 or 2000 they were spending 53 percent of their total programming money on Canadian programming and they were spending 47 percent on basically American programming and their board of directors were overseeing it and they were all trying to make as much money as possible.

9981   Now they are spending -- well, they are spending about 60 percent or more on American programming and I am just saying that is not consistent with the Broadcasting Act.

9982   Your Broadcasting Act is a bit like an anti-gravity machine and I therefore am very empathetic with your problem, which is -- if you read the Broadcasting Act, it says the world is supposed to work a certain way and there is no gravity but when you look at the economics of the broadcasting system there is a hell of a lot of gravity and it is all going to Los Angeles.

9983   And this panel right here is put in between the gravity and the "Anti-Gravity Act" and so you have got to find a balance between that, and so far the balance has been going two-way in one direction, which is gravity. So I would like to see a little more levitation.

--- Laughter

9984   COMMISSIONER KATZ: Okay. Very colourful.

9985   On page 3, you talk in the middle about BDUs in Quebec spending $46 million on community channels and $25.6 million of which is for local expression. And then you say:

"Even with these expenditures, their profit margin is 30% PBIT."

9986   Are you suggesting that on the community channel they are generating a 30 percent PBIT?

9987   MR. COX: No, of course not, I am saying on their entire system.

9988   COMMISSIONER KATZ: Okay.

9989   MR. COX: I am using the BDU summaries that you introduced.

9990   COMMISSIONER KATZ: Okay. But the PBIT is not -- the 30 percent margin is not attributable to the money they had to invest in the community channel?

9991   MR. COX: No, that's the profit margin for all of Quebec BDUs.

9992   COMMISSIONER KATZ: Okay.

9993   MR. COX: And they have -- and I'm sure if they could avoid spending any of it on community channels, they would be happy to not spend it on community channels and then the 30 percent would go up.

9994   COMMISSIONER KATZ: Yes.

9995   MR. COX: You know. You can ask them, but I think that was what they would say.

9996   COMMISSIONER KATZ: Okay. And then you come to your ultimate conclusion at the end suggesting that the CRTC consider increasing the LPIF from one percent to two percent, which basically jacks it up by about $70-million and part of that money can then be used to create multiple envelopes or different envelopes.

9997   How did you come up with the two percent from one percent?

9998   MR. COX: I doubled it.

9999   COMMISSIONER KATZ: Yes. Okay.

10000   Do you see the 70 --

--- Laughter

10001   COMMISSIONER KATZ: Do you see the $70-million that you doubled it to be redistributed into official language minority?

10002   MR. COX: To be honest with you, I'm not sure how much money should be set aside for official language minorities and I mean in both English and French.

10003   I would say 70 percent (sic) might be a bit high given the overall balances of the system.

10004   Obviously what I'm saying is that the Anglophones in Quebec would like 20-million for the purposes that I mentioned, but there might be other expenditures elsewhere.

10005   I think that the Chairman has mentioned the two percent in some of his comments that are public. So, therefore, I know it's a thought that's running around in the CRTC.

10006   The other thing is, and the 30 percent PBIT for the Quebec BDUs is just one example, that's the healthiest part of the system. That's the part of the system that's making a lot of money right now.

10007   So, in terms of cross-subsidization, I think it is not a problem for the BDUs to be cross-subsidizing the production end of the system as long as it's Canadian production and not American production.

10008   COMMISSIONER KATZ: Okay. If we follow through with the 1:1 and we hold them back from their own problems so to speak, as you put it, you still believe there's a need to increase the LPIF as well in order to provide the support that they claim they need for local expression, local programming and priority programming?

10009   MR. COX: The point is that if you have a 1:1 ratio, that solves a number of significant and absolutely essential problems, but it doesn't give us a TFO equivalent channel.

10010   And the only way that I can see us getting anything like that within the lifetime of my grandchildren is if we get it through the LPIF, so...

10011   And my other feeling is that you can't have too much programming money. I do kind of believe Robert Fowler in the first sentence of his 1965 report saying that programming is everything and all the rest is housekeeping. Mind you, housekeeping is important but, you know, I do agree with him.

10012   COMMISSIONER KATZ: I guess the only comment I'm making in the summary is, if there is a need for a regional channel like TFO in Quebec, one would think that one would start with a business plan and a strategy and ultimately there'd be an application either in Quebec or before the CRTC for a licence for such a channel.

10013   I mean, we don't sort of come up with money for things that people don't formally apply to us for an application for.

10014   MR. COX: By the time an application was put together the LPIF would be set in stone and then you'd say, well, if you had only come to us and told us about this whole thing a little earlier then we might have been able to re-design the LPIF, but we can't re-design it and so, therefore, go away.

10015   So, I'm trying to go along with things according to your schedule.

10016   COMMISSIONER KATZ: Okay. Those are my questions, Mr. Chairman.

10017   THE CHAIRPERSON: Peter?

10018   MR. COX: If you want an application, just tell me.

10019   COMMISSIONER KATZ: It's not what I want, it's what the people that decide they'd like to see.

10020   THE CHAIRPERSON: Peter?

10021   COMMISSIONER MENZIES: I just wanted a quick clarification on what you were suggesting in terms of simultaneous substitution, that you were suggesting that instead of following the lead of the American programmers and lining up and broadcasting simultaneously that the Canadian broadcasters basically have the rights to black out or --

10022   MR. COX: Replace, yeah.

10023   COMMISSIONER MENZIES: Replace, so they would take -- let me take it this way. If "24" is put on at nine o'clock on Monday nights by Fox, then Global can put it on -- can put one of their, whatever they would prefer to have on on Monday nights?

10024   MR. COX: No, no, no. They can put on their version of "24" with the Canadian ads.

10025   COMMISSIONER MENZIES: Right. Well, that's what they do right now.

10026   MR. COX: Well, my understanding is they have to run it simultaneously with the American "24".

10027   COMMISSIONER MENZIES: Right.

10028   MR. COX: Okay. I'm saying that if they would -- whenever American "24" runs, whatever time, supposing that it would be nice to have a Canadian hour-long drama into that slot on Global. So, you allow --

10029   COMMISSIONER MENZIES: They could just pick something from their Canadian --

10030   MR. COX: Right.

10031   COMMISSIONER MENZIES: -- off their canadian shelf and say, you show it there, we'll show "24" Tuesday night or Wednesday night, or whenever we want.

10032   MR. COX: Yeah, that's right.

10033   COMMISSIONER MENZIES: Okay, thanks.

10034   THE CHAIRPERSON: Michel?

10035   COMMISSIONER ARPIN: Thank you.

10036   Mr. Cox, in your oral presentation today there is not even the names of CFCF and CKMI.

10037   Since we are contemplating renewing the licences of both CTV and Global, do you have any comments to make regarding the local programming of these two television broadcasters towards the Anglophone population of Quebec?

10038   MR. COX: I think that their local programming is insufficient. They would -- in the case of CFCF, they have to spend 15.5 hours a week with local reflection which, as you can imagine, is as cheaply done as possible. They have a $50,000 development fund and anything else they send you to Toronto.

10039   And, so, they used to have a person located in Montreal paid for out of the Bell tangible benefits money to try and direct people to Toronto. That job is no longer -- no longer exists.

10040   So, it's -- CFCF is, I would say, probably a cash cow, but we don't see the programming results unless we go directly to Toronto and, you know, go through the process and are broadcast on CFCF as part of the CTV system.

10041   I'm not -- I didn't do an analysis in detail of their programming and of everything.

10042   COMMISSIONER ARPIN: You're claiming that -- so was the Francophone Association earlier -- that CFCF and CKMI should benefit from the LPIF.

10043   What you're telling me here is that at the end of the day they're a cash cow.

10044   MR. COX: I'm not calling CK --

10045   COMMISSIONER ARPIN: MI.

10046   MR. COX: -- MI a cash cow, that's a starved cow and if Jim Shaw were to offer a dollar, I wouldn't be surprised if he could pick it up.

10047   The point I'm making is, CFCF is a different animal. But the point I'm getting at is that Montreal is a small market when you look at the English-speaking market and it should be eligible for the LPIF as the CRTC has defined the LPIF in 2008-100.

10048   And, so, that's point number one, it should be eligible and those broadcasters should be able to get whatever the benefit is.

10049   Number two, it has to be an incremental benefit. You shouldn't just -- it shouldn't be a bail-out fund, you shouldn't say to them, as they're saying, give us the money and don't ask us to do anything for it. Of course they have to do more, and I think that that $50,000 should be higher and a whole bunch of other things should happen.

10050   But you defined the LPIF as strictly news, first of all, news and public affairs and I think it should be broader than that. I think it should be a bigger fund and I think that Ottawa, believe it or not, as well as Montreal, should be eligible if you look at any statistical reason for size market.

10051   COMMISSIONER ARPIN: Okay. Thank you very much.

10052   MR. COX: You're welcome.

10053   THE CHAIRPERSON: Louise.

10054   COMMISSIONER POIRIER: Just to continue on Mr. Arpin's topic, because you're saying Anglophones inside Quebec are badly under served in local programming, and you have many under served communities.

10055   So, if I understand well what you're saying is, you say Montreal and Quebec are poorly served?

10056   MR. COX: Yes.

10057   COMMISSIONER POIRIER: Both? Okay.

10058   MR. COX: I would say that -- yes, yes, yes.

10059   COMMISSIONER POIRIER: Okay. And the rest of Quebec, the English-speaking people who live in the rest of Quebec are not served at all?

10060   MR. COX: Yes.

10061   COMMISSIONER POIRIER: Okay. And you say the solution is a regional Quebec TV channel, but what about CBC and what about community channels?

10062   MR. COX: Well, first of all, there are no English-language community channels in Quebec, so therefore we're under served in them.

10063   Secondly, at the last cut-backs of the CBC, they decided to save money by not buying winter tires, they only bought four season tires. Their union said they wouldn't cross the bridges of Montreal in the winter on four season tires; so consequently the entire news crews of the CBC in the Province of Quebec were limited to the Island of Montreal in the winter and so, therefore, we were under served.

10064   COMMISSIONER POIRIER: Thank you.

10065   MR. COX: I wouldn't mind if the present government were to increase the CBC budget, but i didn't want to mention that.

10066   THE CHAIRPERSON: Okay. Thank you.

10067   Counsel Millington, do you have any undertakings?

10068   MR. MILLINGTON: Yes, Mr. Chair, we have one.

10069   We'd like you to provide the study that shows that Canadian broadcasters pay the lowest average licence fees in the world, and we'd like that filed by May 13th, if that's okay. Thanks.

10070   THE CHAIRPERSON: Thank you. Those are our questions for you. We will take a 10-minute break.

10071   MR. COX: Thank you.

--- Upon recessing at 1440

--- Upon resuming at 1450

10072   THE CHAIRPERSON: Madame la secrétaire.

10073   Thank you, Mr. Chair.

10074   I would now invite the Canadian Media Guild to make its presentation.

10075   And appearing for the Canadian Media Guild is Madam Lise Lareau. Please introduce your colleagues and you will then have 15 minutes.

INTERVENTION

10076   MS LAREAU: Thank you.

10077   Thank you, Mr. Chair and CRTC Panelists. Thank you for the opportunity to present before you today.

10078   My name is Lise Lareau and I am President of the Canadian Media Guild. We represent 6,000 media workers across Canada. Our biggest group of members work at the CBC and Radio Canada outside of Quebec.

10079   I'm joined today by Karen Wirsig who does our communications and policy development for the Guild, and by Brian Olsen of Olsen Enterprises, whom we engaged to do research options for the move to digital television in Canada.

10080   We will be using most of our time today to describe a cost-effective and viable option for ensuring that Canadians continue to have free access to local TV.

10081   We see our proposal as an attractive alternative to the Freesat option that's been presented at this hearing and we've come here because we really think that our proposal can help you in this study.

10082   Local stations, as you know, are the very cornerstone of the Canadian TV system. They provide the original programming that connects people to what's going on in their communities. You've heard the same from many presenters during these hearings.

10083   For all the hand wringing about the end of television, there's no evidence to support the diagnosis that viewers have fled for newer distractions.

10084   In fact, a report from the U.S. Council for Research Excellence in March suggests quite the opposite.

10085   The Council discovered that American 18-24 year olds spend on average about three and a half hours per day watching live television. That's quite a bit more than the two hours and 49.5 minutes total they spend in front of a computer screen on an average day.

10086   We recognize that the Canadian TV system is a bit different from the one in the U.S., but we know that what people want from TV on both sides of the border is not very different.

10087   If we make it more difficult for people to watch and we take away the local and live programming that they can't get from any other source, we will help kill television in this country.

10088   The U.S. networks are way ahead of ours in making sure they connect with their local viewers. They've invested in digital TV and in communicating the facts and benefits of the changes with their viewers, and they're doing the opposite of what Canadian TV executives are begging you to allow them to do. U.S. stations are boosting local news and reducing their reliance on syndicated programming.

10089   The Bloomberg News Service recently reported that instead of paying for reruns of "Seinfeld" at 11:00 p.m. and "Access Hollywood" at 4:30, News Corp.'s WJBK-TV Detroit decided to air more local news.

10090   Since making the changes last year, the Fox station's "Late Night News" have been attracting 65 percent more viewers between the ages of 18 and 49, those viewers most sought by marketers according to Nielsen data. The morning newscast is up 33 percent.

10091   Now, continuing to quote Bloomberg:

"TV station owners facing a record drop in advertising are pushing their news crews to fill expanded schedules allowing programmers to eliminate more costly syndicated programs such as "Dr. Phil". In LA and San Francisco, stations are adding as much as 12 hours of news a week to schedules." (As read)

10092   MS LAREAU: The piece goes on to say that:

"Local news advertising has held up, partly because people watch news live instead of using digital recorders that skip commercials." (As read)

10093   MS LAREAU: The CRTC is on the right track with your focus on providing direct support for local programming, as you propose to do with the Local Program Improvement Fund, and on finding a solution to preserve free access to local TV for Canadians.

10094   Canadian Media Guild's been calling for a broadcaster fund since 2006, financed from cable and satellite revenues and we're very pleased to see that you've introduced such a fund for local news last October.

10095   You've been asking other witnesses about increasing the size of the LPIF and we're fully in support, if it further allows the Fund to fulfil its stated purpose of enhancing local programming.

10096   We think the government should match the LPIF funding coming from cable and satellite revenues, in fact.

10097   We also urge you to do everything you can to use the LPIF to support innovative proposals such as the one being developed by CHCH employees, whom we don't represent by the way, and the civic leaders in Hamilton.

10098   The CHCH initiative is important on a couple of levels. First, success by a station devoted to local programming could serve as a model to re-invigorate local TV in other smaller markets across Canada, the ones that have been hardest hit by the cuts at newspapers and TV and radio stations where some 3,000 jobs have been lost in the last year.

10099   Second, without CHCH nearly one-million people in Hamilton/Niagara would be left without a single TV station to tell local stories. That would be a travesty.

10100   As Globe and Mail columnist John Doyle pointed out last week:

"Local TV news ensures that key social needs are met. The news is about your community, not some distant city. The weather forecast is for your area, not an entire province. What's really soul destroying is the feeling that your town, your community doesn't matter." (As read)

10101   MS LAREAU: Now, finally, and I draw your attention to the CTV and Shaw ads that were placed next to each other earlier this month in the Globe and Mail, or last month in the Globe and Mail:

"It's time to stop using local stations along with their employees and their viewers as pawns in a game about who's going to pay for broadcasting." (As read)

10102   MS LAREAU: I will now turn it over to Karen Wirsig to explain our proposal for digital over-the-air TV.

10103   MS WIRSIG: Thank you.

10104   The Guild is concerned about the broadcasters' so-called hybrid plan for the transition to digital TV. We believe it undermines the local television system, denies equitable access to Canadian programming and is a short-sighted business decision. After all, free over-the-air TV is not some dinosaur from a prehistoric era.

10105   The survey conducted by the Strategic Council for the Industry Working Group reveals that the largest group of respondents who watch TV over-the-air is made up of people between the ages of 18 and 34 and nearly two-thirds of the OTA respondents watch audio/visual content over the Internet.

10106   If you make it more difficult for the Internet-surfing crowd to watch live television, you might well lose them altogether and for good.

10107   A number that gets used often is that nine percent of Canadians will be left out of the digital transition and at least one broadcast executive said he can live with that.

10108   But we've not seen detailed research anywhere about how many viewers and TV sets in Canada currently get signals over-the-air. Our estimate from our written submission is that some nine to 12-million Canadians would no longer be able to receive local TV over the public airwaves.

10109   That means one-third of Canadians, the ones who lived in the so-called virtual contour areas would be disenfranchised. Those who watch over-the-air would obviously simply be shut off.

10110   Those who do pay monthly fees for television service right now would no longer have the choice that Lise's family here is about to make and, that is, to get rid of the monthly bills and watch the digital and analog TV signals available for free at their Toronto home.

10111   Last week Commissioner Arpin quoted TVO as saying that:

"Some 22 percent of their audience share comes from over-the-air viewing. Why would a broadcaster want to deliver their most faithful audience into the 500-channel universe?" (As read)

10112   MS WIRSIG: Broadcasters in the U.S. have been much more forward thinking. CARTT.ca reported recently that broadcasters discovered during the transition that one-third of American cable and satellite subscribers had at least one TV connected to an OTA antenna.

10113   As CART pointed out:

"34.5-million Americans relied on off-air TV in their kitchens, bedrooms or elsewhere in their homes. Should Canadians with TVs there simply disconnect and replace them with laptops, or would we rather they keep watching TV in their kitchens?" (As read)

10114   MS WIRSIG: The idea of a conventional genre, specialty channel, is not something that instills a lot of confidence in us for the future of local TV. If you change the rules to allow national networks to have virtual local stations, local programming will become even more of an after thought than it is right now and it would be more difficult for a truly local new entrant to succeed.

10115   We estimate that the broadcasters' hybrid plan would leave 977 communities behind in the digital transition. And I have the list here, we appended it again to our oral remarks today so you can see it.

10116   Of those 977, 202 of those communities have at least three OTA stations and a further 216 currently have two. A full 80 percent of transmitters in those two plus locations are already sharing sites.

10117   So, what do we think should happen? We believe multiplexing is the solution and at least these 418 communities that currently have more than one transmitter that would otherwise go dark during the transition.

10118   Broadcasters could share infrastructure and costs and even improve on what is currently available for free over-the-air in those communities.

10119   Our solution is in line with the Freesat model proposed last week in that that involves providing multiple local and regional services at standard definition.

10120   However, ours is a local solution, responsive to local needs and interests, leaving control over the signal in the broadcaster's hands and preserving a local frequency for broadcast purposes.

10121   In a city such as Kamloops, our model would involve the installation of a single transmitter to serve the three existing broadcasters, which are the Pattison E! affiliate, Global B.C. and Radio Canada. Three more, for example, CBC, Knowledge Network and CTV could be invited to join and share the capital and reduced operating costs.

10122   The cost to viewers with analog sets, meanwhile, is merely $60 for a digital converter box, and not a $500 satellite dish and set-top box.

10123   The incremental cost to OTA viewers with a new digital TV set is nil and there's no monthly fees after that.

10124   With a 50 percent increase in free available channels, we believe you would find new converts to OTA viewing in a city such as Kamloops.

10125   And how would this smaller market transition be funded? Our government stands to raise billions of dollars when it auctions off the freed up spectrum after the transition. Part of this one-time windfall should be used to support the transition in smaller markets.

10126   The U.S. Government set aside funds to assist broadcasters in smaller markets and to help viewers get the equipment they needed, why shouldn't the Canadian Government do the same?

10127   I now turn it over to Brian to deal with some of the technical and cost issues related to our proposal.

10128   MR. OLSEN: Thank you.

10129   The proposal for which I provided the research in Appendix 1 of the Guild's submission is based on the process known as multiplexing that is practised around the world in connection with OTA digital transmission.

10130   It involves transmitting several channels over a single frequency using a single transmitter equipped with a multiplexer. In fact, multiplexing is widely used by broadcasters in the U.S. right now.

10131   In the U.S. case, broadcasters who multiplex each use their allotted frequency and their single transmitter to broadcast multiple channels.

10132   Multiplexing is even being used right now in Ottawa by the Sun station which currently provides both an HD and an SD signal from its digital transmitter.

10133   With this $60 box, I can pick up the two Sun channels as well as CBC and Radio Canada digital channels from my Ottawa home. I am impressed by the quality of the converted signal on my analog TV.

10134   Living in Toronto, Lise and Karen, pick up many more digital stations. Karen, using a box like the one I have here on her analog set, and Lise using a new TV with a digital receiver.

10135   There is a significant list of digital channels already available in Toronto, a list that grows substantially for households with a roof-top antenna that can pick up the Buffalo stations.

10136   In Buffalo, 13 U.S. broadcasters are using multiplexing to provide 24 channels for free over-the-air.

10137   In Detroit, there are 20 channels available from 12 OTA broadcasters.

10138   In Seattle, there are 34 channels available from 13 OTA broadcasters. We have attached the program guides to our remarks for your reference.

10139   Of course, Canadian viewers along the border are also able to receive these signals for free. Furthermore, U.S. viewers are able to receive free Canadian signals in the border area, signals that are threatened to be taken away from one-third of Canadian viewers after the switch to digital.

10140   In Europe, multiplexing has been used a bit differently. In the U.K., for example, multiplexing was used to transmit signals from a variety of broadcasters to provide an impressive amount of free digital television.

10141   In the U.K., they started out with standard definition and are now adding transmitters to provide HD over-the-air.

10142   Our proposal for the small markets in Canada could also be modular and scalable. Current technology allows the multiplexing of up to six standard definition channels, or two high definition channels on a single frequency and transmitter.

10143   As you can see in the U.S. case, it allows for the blending of HD and SD.

10144   What we're proposing for smaller markets is multiplexed SD signals to begin, that allows for more signals on less equipment and, therefore, lower per broadcaster costs.

10145   However, as we see in the U.K. case, it would be possible for broadcasters to add transmitters in any location and shift to HD signals as it becomes economically feasible.

10146   We have researched the cost related to upgrading transmitters in 977 communities to be left behind by the hybrid plan. Our costing estimates, based on bids from suppliers, come in a bit lower than the cost estimates in the Spectrum Expert report commissioned by the CRTC.

10147   We estimated that the average cost of upgrading the 977 sites is $156,000, including the cost of the multiplexer. Their estimate is $253,000. We use slightly different assumptions, we did not include a full 25 percent contingency for all sites, nor did we budget for building and power modifications, but we are comfortable with their estimates.

10148   To give you an example of what we believe the transition process would entail from an infrastructure standpoint, I will walk you through our assumptions for upgrading Kamloops which currently has three analog signals.

10149   We originally estimated a cost of $88,000 based on the frequency and power of the existing transmitters. We have revised that estimate to bring it in line with the assumptions made by Spectrum Expert and believe the Kamloops upgrade could be done for $159,000.

10150   The revised estimate covers the cost of equipment as well as engineering studies, shipping, project management, installation, travel and accommodation for the installers.

10151   This compares with the Spectrum estimate for Kamloops of $235,000.

10152   The costing assumes a hot cut-over from analog to digital and might involve an interruption of TV service ranging from a few hours to a day or two.

10153   Assuming six broadcasters participated, under our estimate the per broadcaster capital cost would be around $26,500. Under the Spectrum estimate, it would be $39,200,

10154   Even if only three existing broadcasters in Kamloops participated, the cost for each would be somewhere in the $53,000 to $79,000 range.

10155   These estimates are well below the cost of $1-million per transmitter cited in the Industry Working Group submission and Kamloops OTA viewers would now enjoy up to six good quality SD TV signals, all providing original Canadian programming free of charge.

10156   We would be now pleased to take your questions.

10157   THE CHAIRPERSON: Thank you for your presentation.

10158   You've heard people appearing before us and suggesting that SD is just a transitional stage to HD and basically by doing that we would be locking into a second grade standard and not being where the industry is going and where the big networks are going.

10159   What's your comment on that?

10160   MR. OLSEN: Well, if we look first of all around the world, other than the U.S., almost everybody's started to HD and is progressing to HD.

10161   I think the plan we're putting forward, if we're in a financial crisis now, should look at an economical way of getting good digital television signals to households and there is a definite upgrade path in this particular model to HD.

10162   THE CHAIRPERSON: M'hmm.

10163   MR. OLSEN: I mean, if anybody has ever had the opportunity to look at an analog down converted HD or SD, they're very good and, I mean, it's hard -- in Ottawa, for instance, if you look at the Sun channel, it's hard to differentiate on an analog set anyway the difference between the two.

10164   So, I don't disagree, there is a difference but, you know, a good digital SD signal versus no signal at all doesn't seem like a good option to me either.

10165   THE CHAIRPERSON: Secondly, is this --

10166   MS WIRSIG: Can I add just one quick thing, because where we're talking about having SD, it's really a choice between SD and nothing.

10167   For people who want HD, they can get compressed HD either over cable or satellite. We're talking about those people who won't have cable and satellite.

10168   So, initially we're really not talking --

10169   THE CHAIRPERSON: This statement is contradicting itself. You say you want HD you can get it by cable or satellite, you're talking about people who have no access to cable. So, that's all I'm talking about, I'm talking about the people who have no cable or satellite, your solution gives them SD.

10170   MS WIRSIG: That's right, or versus nothing. It's not an HD/SD decision that they're making, it's SD versus nothing, which we note is also what the Freesat option would be offering them.

10171   THE CHAIRPERSON: But the difference with the Freesat option is that there is no cost to the broadcaster, while here the cost is -- it's 136K or 253K depending whether I take your estimates or our consultant's estimates.

10172   And I don't know which one is right or wrong, that doesn't matter, but it's a considerable cost.

10173   MR. OLSEN: Yes. I don't think we're far away between -- I guess the Spectrum Expert report and our report is quite a ways away from the broadcaster.

10174   THE CHAIRPERSON: Right.

10175   MR. OLSEN: However, what we're proposing is, yes, there is a cost to the broadcaster where there isn't one in the Freesat option on this hand; on the other hand, at the consumer level, it's $60 versus $500, so...

10176   THE CHAIRPERSON: Okay. But my problem is, you know, I can't force people to operate a station.

10177   MR. OLSEN: No.

10178   THE CHAIRPERSON: And the broadcasters have told us -- take a small city like Prince Albert, there's one local station, there's a TV signal, it doesn't make sense for them to convert, it's losing money anyway, to throw 200,000 or whatever at it makes no sense, they'd rather go off air and then we'll have however many people in that city who are not on cable cut off.

10179   So, I see your solution as being very good for Kamloops or so where you have several ones who by pooling can bring the cost down and can do it, but for the small stations which are not profitable to begin with, I don't see how this would be an answer.

10180   MS WIRSIG: Can I -- I think the problem to us, in our minds, the cost of the infrastructure is a small drop in the bucket of the overall costs of running the station.

10181   So, if they can't keep their stations open, the cost of putting up a transmitter is not going to sink them, I don't think. There's a bigger structural problem that we're all talking about these days.

10182   So, obviously if we think it's good public policy to keep those stations going in this country, and I hope that is what we think, then there need to be other solutions like the Local Program Improvement Fund, and what we're suggesting, which is some infrastructure money to those smaller stations, from the government, the kind of infrastructure money that was available to the smaller -- or I think is continually available to the smaller stations in the U.S. from that government.

10183   This is about communications policy in Canada. So, I don't -- I mean, I agree with you that it's maybe not your problem, but I just worry in the Freesat solution, those smaller stations might end up getting lost in the mix as well.

10184   Because really if they can't reach their local viewers on their own, and a Freesat, whatever happens in the future they don't get carried, they're finished. There's no other way they would have to reach their viewers once all the viewers have migrated to either no television sets or cable and satellite.

10185   So, what we're trying to do is keep that path of dedicated Canadian programming open that's local, that's directed -- that has that direct connection between the broadcasters themselves and the viewers in the community.

10186   And you're right, there may be a size cut-off at some point.

10187   THE CHAIRPERSON: On page 7 in your third paragraph you're using the City of Kamloops and you're saying the existing three broadcasters, and then you finish off, and CBC, Knowledge Network and CTV for example could be invited to join and share the capital and reduce operating costs.

10188   MS WIRSIG: M'hmm.

10189   THE CHAIRPERSON: But they're also going to share in that case the available advertising markets and bite very much into the market of the already existing licensees.

10190   MR. OLSEN: No, I thought what we were proposing was similar to what Bell proposed in FreeSat in that, for instance, in Thunder Bay the two local stations would be put up and then they would bring in regional stations and offer them to the local community. So I saw our --

10191   THE CHAIRPERSON: I see that is what you have market, okay. Thank you.

10192   Rita...?

10193   COMMISSIONER CUGINI: Thank you, Mr. Chairman.

10194   Good afternoon. Just a couple more questions for you and one of them is to deal with your support for the LPIF and CH.

10195   We don't know what is going to happen to CH. So my question to you is this: Is your support for CH and what the employees there are doing dependent on it maintaining its current levels of local programming?

10196   Because, as you know, Canwest was here and they have asked for local programming commitments to be harmonized, and, if my memory serves me correctly, Hamilton would, under their plan, now have five hours of local programming. But according to our LPIF criteria, it would still qualify for LPIF money. So I just wanted clarity on what your position is.

10197   MS LAREAU: I think a city the size of Hamilton deserves more than five hours a week. What is exciting about the Hamilton proposal is that it would be community ownership of local news, and to us, in so much of what is going on in the media, that is the solution, rather than the conglomerate model, which has not served local news well. We believe the future is in any way, shape or form ensuring that local communities own local stations.

10198   COMMISSIONER CUGINI: Okay, thank you.

10199   And one question, again, of clarification on the appendix that you did add to your oral presentation.

10200   Mr. Olsen, just so I understand correctly, where you say there are currently transmitters -- and not surprisingly, the first place I went to was Ontario -- so all of the areas listed in Ontario have at least one transmitter now is what this chart is showing me?

10201   MR. OLSEN: All the ones on that chart. The ones at the start of the chart have one. It is progressive. And then as you go to the end of Ontario, you will see two and three and four. Yes.

10202   COMMISSIONER CUGINI: So where I see that TVO, for example, has -- well, I will ask the question. In Val Rita -- which I didn't know existed up until this afternoon -- you have TVO listed here with two transmitters and under sharing, you say yes.

10203   MR. OLSEN: Yes.

10204   COMMISSIONER CUGINI: So who are they sharing those with because they are the only one --

10205   MR. OLSEN: That is TVO English and TVO French. They are sharing amongst themselves.

10206   COMMISSIONER CUGINI: I see, okay. And they seem to be the only ones -- well no, I don't know that.

10207   In other areas where there are more, like Kapuskasing -- you have got CBC English, CBC French and CTV -- are all three of them sharing?

10208   MR. OLSEN: I will have to --

10209   COMMISSIONER CUGINI: I am just citing it as an example just so I understand.

10210   MR. OLSEN: It would say sharing in the last column. I don't have that right in front of me.

10211   COMMISSIONER CUGINI: Yes, it does say yes.

10212   MR. OLSEN: Yes. So the sharing there, when we looked at it in the Industry Canada database, that would mean either two of the three or all three were sharing.

10213   COMMISSIONER CUGINI: I see.

10214   MR. OLSEN: I thought it was just a little too much to try and tie them all together and make a simple report out of it.

10215   COMMISSIONER CUGINI: Okay. Like I said, it was just so I could understand this more clearly.

10216   MR. OLSEN: Yes.

10217   COMMISSIONER CUGINI: And if your proposal is adopted wholeheartedly, just to confirm, that means that there would be no community in this country without over-the-air television?

10218   MR. OLSEN: That had an existing transmitter today, yes.

10219   COMMISSIONER CUGINI: Okay, thank you.

10220   I believe my colleague Vice-Chairman Arpin has more questions for you on this. Thank you.

10221   COMMISSIONER ARPIN: Thank you very much, Rita.

10222   Obviously, you have already covered a lot of ground in your oral presentation and in answering the questions of both the Chairman and Commissioner Cugini. However, your proposal is a full replacement of the existing transmitting sites and you are saying that there are 977 of them. Currently, from the data that I can recall, there are 164 over-the-air local stations with local service in their community. So that makes a difference of 813 locations.

10223   If I add them all up, one after the other, at the end of the day the cost of the transition is becoming fairly significant for the broadcasters. If you add those 813 at $56,000 apiece, I didn't make the calculation but it appears to be fairly meaningful for an industry that claims that they are broken and they can't afford to pay for the whole transition.

10224   MS WIRSIG: Well, I think what we would say is ideally all of those 977 should be replaced. However, where we really think -- and perhaps we are looking at a hybrid FreeSat/multiplexing solution. Where we think there is a real shot for this is in the places that currently have more than one broadcaster operating.

10225   And so we have identified 418 sites where there are already two broadcasters operating and in 80 percent of those there is already sharing of sites. So the broadcasters are already working together in 80 percent of those 418 sites.

10226   So at some point there may be -- I think what you have already talked about in the transition is that analog transmitters in the more remote locations could stay up beyond 2011.

10227   What we are maybe looking at is a more phased approach to upgrading transmitters community by community, just to put that out there, and perhaps if there is some question about whether viewers would adopt this, some communities could be selected for a trial run.

10228   We think, in particular, of the communities that the broadcasters themselves have already surveyed in their report, and I believe that is Red Deer, Kelowna -- no, Red Deer, Kamloops, sorry, Timmins, Rouyn-Noranda and Sydney, perhaps a dry run could be done there. It would be a fairly simple cost. It is perhaps something that the government might want to consider for the smaller communities because we know it would also involve, as it has in the U.S., a lot of communications with viewers.

10229   I mean anything that is going to happen now is going to involve a lot of communications with viewers and what would you rather be telling them? You know, in a year, you either get rid of your television, you buy a $500 satellite dish or you subscribe to cable and satellite. You want to be telling them that or do we want to -- that is what our question was when we heard about this happening. We thought, ugh, that is pretty ugly for one-third of the Canadian population.

10230   So we think it could be phased in and perhaps we want to start with a few communities to see how it works.

10231   COMMISSIONER ARPIN: Now, you are a union, you are representing employees of broadcasters, significantly, CBC/Radio-Canada outside of Quebec but also members in the private sector.

10232   Through your membership, have you had a discussion with these broadcasters about your plan?

10233   MS LAREAU: We have had a discussion with the CBC about the plan and TVO.

10234   I should say that, you know, we are a union, you are right, and we started looking at this initially because we represent transmission technicians among our members but I can tell you that as we started doing the research, it went way beyond our representation of transmission technicians.

10235   When we heard that the CBC, for example, was moving to the hybrid system and eliminating and cutting off so many communities, it piqued our interest really on a social policy level more than on a union level.

10236   COMMISSIONER ARPIN: And what was their reaction?

10237   MS LAREAU: Well, the CBC --

10238   COMMISSIONER ARPIN: Because actually the CBC says there is no second-class citizen, it is full HD or nothing.

10239   MS LAREAU: Right. And two points on that.

10240   The CBC, as you well know, is very worried about its funding, I mean this year more than ever, and it is paralyzed about dealing with anything that might require it to spend money or to take money away from programming. And we do not want to further paralyze it. We have said to them: This is what we want to explore but we really believe the money should come from other sources. That is number one.

10241   In my view -- and the Chair has also mentioned this sort of HD/SD split. As you saw here, two HD signals can split a single transmitter. So I don't believe this is about an HD/SD, you know, parallel universe. I don't think it needs to be that. If two broadcasters split one multiplexer, you can still serve them in HD. So I don't think that is the issue.

10242   And by the way, the technology on HD and SD and digital transmission, the whole digital technology is changing year after year and I am sure that a couple of years from now we will be able to transmit more in a multiplexed environment than we can now.

10243   So I would not concentrate on the HD/SD split.

10244   COMMISSIONER ARPIN: And I think Mr. Olsen will confirm that as soon as you set the standard and you start building, then even if the algorithms change, it is totally unavailable that you can do it.

10245   Look at Bell ExpressVu, they can now implement MPEG-4 but they have an MPEG-2 platform. The MPEG-4 algorithm is now available but because of costs -- because they will have to change all the decoders, they will have to change so many things, they can't afford to move from one technology to the other.

10246   MR. OLSEN: A comment on that point. I saw a news item this week that there is a broadcaster with a -- I think it is Gray in the U.S. who went live for the first time with two HDs and one SD over the air. So I mean it is -- as Lise said, year after year the technology is improving. When the standard was set, and I was involved back then, I mean all we could do was 1 HD signal in one channel and we have come a long way.

10247   COMMISSIONER ARPIN: Well, I hope people have been listening to your suggestion because it is worth it to study it.

10248   MS LAREAU: Thank you.

10249   COMMISSIONER ARPIN: Those are my comments.

10250   THE CHAIRPERSON: What exactly do you want from us? I am not quite sure I understand because there is nothing preventing any broadcaster right now from adopting a multiplex model, that I understand. They have chosen a hybrid model for whatever their internal financial reasons but I don't think there is anything preventing CBC today from embracing the multiplexer, or any other broadcaster.

10251   So what do you see us doing, given your presentation?

10252   MS WIRSIG: Well, I think you have more power than you think because broadcasters -- you asked us before if we talked to our -- or Commissioner Arpin asked us if we talked to our employers about this. We have tried and until last fall they didn't even want to hear the word "digital over-the-air." They only wanted to talk about hybrid.

10253   And I think it was your comment saying, listen, we have to pull our stuff together and get planning on it. They were suddenly a little bit more interested and you set up the working group and they started thinking about it.

10254   Somebody needs to take leadership on this in this country and nobody is doing it. Nobody. And that is one of the reasons in our written submission we called for a hearing. Now, we heard you plainly that there would be no time for a hearing in the next, I don't know, decade. It seems like you have got hearings stacked up from here until the end of time but somebody needs to take leadership on this and get Canadians talking about it.

10255   The broadcasters, frankly and unfortunately, are kind of burying their heads in the sand and that is why we have made the comparison with the U.S.

10256   In the U.S. -- I was at the Canadian Association of Broadcasters Conference in the fall. Somebody from NBC -- Glen Wrightmeyer(ph), I think his name was -- said: This is just a cost of doing business. We recognized that, we set aside the money, we moved ahead. We are doing multiplexing and, frankly, we are looking at multiplexing as a way of also delivering our signals directly to new mobile devices without having to go through a middleman.

10257   This is all kind -- you know, they are actually forward-thinking. They are staying connected to their viewers. But we are a little worried that no one in this country is really talking seriously about this.

10258   So I guess if you could do one thing, it is to really force the broadcasters to think more clearly and think harder about what their future is on this front.

10259   THE CHAIRPERSON: Okay.

10260   Louise...?

10261   COMMISSIONER POIRIER: That was exactly the purpose of my question, and my question is to you and also to the panel.

10262   I wonder if we shouldn't ask all the broadcasters to give us their written opinion on your proposition by May 13th.

10263   MS WIRSIG: Please.

10264   COMMISSIONER POIRIER: Is it what you are asking?

10265   MS WIRSIG: I mean I hate to load more stuff on everybody but I think it is worth asking them. We may not like their answers but it is at least worth it to force them to think about it.

10266   COMMISSIONER POIRIER: This is what I understood.

10267   Mr. Chair, I have only one other question, and it is related to your text on page 5. Your estimate from your written submission is that some 9 million to 12 million Canadians would no longer be able to receive local TV and you mentioned in the paragraph prior to this one that:

"...we have not seen detailed research anywhere..."

10268   So I wonder how you got to that number.

10269   MR. OLSEN: I got to it. When I was researching the 977, I looked at the record in terms of what CBC and the various broadcasters, what communities they said they would be serving. So I took all of those away, Toronto, Montreal, Ottawa and so on, and what I was left over with, 977. So then I took that list of communities that I assumed were going to have a digital transmitter, went to Stats Canada 2006, added up all the population and there were 9-12 million people that would not be served. So that is my proxy for the 977 communities.

10270   The reason there is a range of 9-12 million is so far, prior to this hearing and even in this hearing, it isn't exactly clear from all the broadcasters as to which transmitters they are going to replace. So I tried to capture as best I could how many people would not have access in their community to an over-the-air transmitter. So I kind of worked backwards from who was to who wasn't and that is how I got a range of 9-12 million.

10271   COMMISSIONER POIRIER: And my final question. At the end of your presentation you mention that probably you think the solution would be hybrid FreeSat and multiplexing, and in the document I have read you don't deal with that. I wonder if you could give us more information right now or written information.

10272   MR. OLSEN: Well, I was hoping to get a chance to comment on that today. When I had done this report last year, FreeSat wasn't on the table. So my only option at the time to figure out how are we going to provide digital television to these communities was the multiplexing option that is in the report.

10273   Of course, this week we see a very wholesome FreeSat proposal. I think, as has been mentioned in our presentation today, the 418 communities that have multiple transmitters would probably be better suited in our multiplex model and the other very small single-transmitter communities might be better served by FreeSat.

10274   So as, I think, Karen mentioned earlier, we have our own hybrid model now: multiplexing and FreeSat.

10275   COMMISSIONER POIRIER: I wonder, could you provide us with more written information on that --

10276   MR. OLSEN: Yes, I could do that.

10277   COMMISSIONER POIRIER: -- by the 13th of May?

10278   MR. OLSEN: Yes.

10279   COMMISSIONER POIRIER: Yes?

10280   MR. OLSEN: Yes.

10281   COMMISSIONER POIRIER: Thank you very much.

10282   I am done, Mr. Chair.

10283   THE CHAIRPERSON: Thank you.

10284   Candice...?

10285   COMMISSIONER MOLNAR: Thank you.

10286   Commissioner Poirier asked a number of the questions -- I was also interested in the 9-12 million and how that came about.

10287   If I extrapolate where I am going with this, you talked about potential sources of funding other than the broadcasters to address the cost of putting in place this system and compared it to $500 per customer if we were to go with a FreeSat sort of model.

10288   If I look at the 9-12 million that would not be able to receive local over-the-air, potentially as much as 90 percent of those are served today by cable or via satellite solution and so the number of customers who would be without service is the number I would be interested in seeing, you know, what we truly estimate is the amount, and you have done great work here in looking at every location to see what truly may be going dark but to understand what is the actual number of Canadians who may not have a signal if they move to the hybrid.

10289   I would also be interested if you would be willing to do this math, to compare the cost from a systems perspective of putting in your transmitter solution where it is a cost to put in the transmitters in comparison to the cost of that FreeSat sort of model where the cost is in the customer premise equipment in large part.

10290   Is that something that would make sense to be able to supply us?

10291   MS WIRSIG: I will let Brian answer most of that. The only thing I wanted to add, with the FreeSat, there would also be a diversion from the LPIF money, as I understand it. So there is a bit of an additional cost beyond the $500 boxes. I just want to make that clear because it is not entirely free to broadcasters either.

10292   COMMISSIONER MOLNAR: I think that you wouldn't likely be able to measure what that diversion is but you did speak to us earlier about, you know, where comparing the cost, the structural cost of this transmission to the $500 per customer. So if we could understand how those two compare, that would be very useful.

10293   MR. OLSEN: I think we could do some more now that that other option is on the table and it certainly wasn't there when I did this report and this analysis initially. So I think we can provide some insight.

10294   I think Karen just mentioned there is one other -- you know, if we want to get the total cost of the solution here, Bell ExpressVu are indicating that they are going to incur some costs that they want reimbursed from the LPIF to cover the million dollars toward the cost of the space segment plus some of their operating cost.

10295   There is another cost that I will take a look at. I am not sure that I can get a firm handle on it in that in their model each of the broadcasters is going to have to pay for a terrestrial backhaul to get that signal to Toronto.

10296   So they have -- in the FreeSat model the costs are so much for every subscriber, the TV station has to pay for a backhaul, and ExpressVu is going to recover some of its costs, both the cost for the space segment and their operating cost to turn customers on and off and pay for that out of the LPIF.

10297   COMMISSIONER MOLNAR: That is right and thank you. It would be excellent if in the time frames that were provided you could lay out the two scenarios.

10298   MR. OLSEN: I can try and do that. I have thought a lot about this topic.

10299   COMMISSIONER MOLNAR: Yes. You clearly have a lot of details and if you lay it out and show us that would be excellent.

10300   Thank you, those are my questions.

10301   MS WIRSIG: Can I just add one more answer to that though, because the one problem we are going to have, that everybody in the country is going to have, is that we don't think enough detailed research has been done on which TVs are currently hooked up to an aerial antenna and we note in the U.S. during the transition this became an issue.

10302   Broadcasters realized, and I think I quoted it in my part of the oral remarks, 34 million people, yes, were cable and satellite subscribers but had other TVs hooked up to another aerial antenna to receive local signals or because there wasn't a satellite hookup in their house.

10303   So we don't think anybody in Canada has a very good handle on how many TVs would go dark if the broadcaster hybrid plan were to come to be. I don't think we would be prepared to give a global number because we don't have that number and we don't have any means to do that kind of research. I mean that is research that should be done here. We can't obviously do that. That is big research to do.

10304   But giving a global number like that, I don't think you would be that comfortable to do it, would you?

10305   THE CHAIRPERSON: You can do the best you can on numbers available. Nobody is asking you to do major research. And I would be very leery using U.S. numbers and making analogies because there are all sorts of other factors in the U.S. that influence it.

10306   Okay, thank you very much.

10307   Counsel, what are the undertakings?

10308   MS DIONNE: Yes, thank you, Mr. Chairman. I have two undertakings and after I have another comment.

10309   So file your comments on the Bell FreeSat proposal in light of your over-the-air multiplexing model and also if you could file the number of Canadians who may not have a signal if we move to the hybrid model.

10310   And file the costing information as required by Commissioner Molnar to compare the cost of your proposal versus the proposed FreeSat model.

10311   So these are your undertakings that I would ask that you file by May 13th.

10312   Also, I would like to make a comment for the public record. We would ask all the interested parties and applicants to file comments on the Canadian Media Guild's --

10313   THE CHAIRPERSON: There was no panel decision on that.

10314   MS DIONNE: Okay, thank you. Those are my comments.

10315   THE CHAIRPERSON: Thank you.

10316   I think that you wanted a five-minute break.

10317   THE SECRETARY: Our next presenters will be via videoconference, so we need a five-minute break, please.

10318   THE CHAIRPERSON: Thank you.

--- Upon recessing at 1539

--- Upon resuming at 1556

10319   THE CHAIRPERSON: Bon. Madame la Secrétaire, nous commençons.

10320   THE SECRETARY: Merci, Monsieur le Président.

10321   Our next presenter is Mr. Aaron Goldman. And he is appearing on his behalf and on behalf as well as Mr. Alberto Patella. Mr. Goldman will make his presentation and then will read Mr. Patella's presentation into the record.

10322   Mr. Goldman, you can proceed now.

INTERVENTION

10323   MR. GOLDMAN: Thank you.

10324   Mr. Chair, Commissioners, Ms Dionne and Commission staff, thank you for the opportunity to appear before you today and for your staff's assistance in arranging for this videoconference.

10325   I am the director and, in some cases, the executive producer of Rez Bluez and some other programs the CRTC would know about from reviewing Sun TV's application for renewal. I will not take up the time of the Commission at this hearing on my own particular concerns with the conduct of the licensee in my specific case.

10326   Relative to the commercial disputes mentioned in my initial intervention letter to the Commission, I am not before the Commission seeking a remedy that only the courts can provide. I have put my numerous and valid complaints about Sun TV on the record of this proceeding and all of the producers and companies affected by Sun's inappropriate actions fully intend to pursue their claims as required in other places.

10327   Before doing so, however, we all thought it best to make the Commission fully aware of Sun TV's pattern of conduct by putting my comments and others on the record prior to such core proceedings.

10328   I am before the Commission today because a company that is required to work with independent producers and has obtained regulatory approvals based on its promises of working with independent producers to licence and deliver certain forms of content, should be able to satisfy the Commission that it is working with independent producers in basic good faith and that it has been able to meet its promises of performance while doing so.

10329   The power imbalance between independent producers and broadcasters in Canada is enormous and appears to be growing rapidly with the increasing concentration of ownership that has occurred in the broadcasting sphere over the last several years. This problem is only enhanced where those owners are controlled by or affiliated with carriers and BDUs who have the financial resources to easily overpower most producers in the Canadian independent production sector. Such is obviously the case with Sun TV.

10330   The Commission is already familiar with my views and those of some of my colleagues with regard to the need for mechanisms to counteract this systemic imbalance of power as these concerns and some proposals to help address them were conveyed in early February of last year in the hearings before this Commission regarding the Canadian Television Fund.

10331   My views and those of my colleagues can be found in the transcripts of those hearings from February 4th, 2008 where my concerns as well as those of producers Brian Sutherland, Sanderson Layng, Mutt Gerard and Tara Lee Gerhards were expressed to the Commission in some detail, highlighting the need for mechanisms to be put in place to offset what is otherwise in most cases an insurmountable imbalance of power in favour of broadcasters; an imbalance that often puts independent producers in dire and patently unjust positions.

10332   The broadcaster alluded to when those concerns were being expressed to the Commission was not mentioned at the time, because the broadcaster and the CTF had advised that good faith efforts were being made to resolve the issues in a just and expeditious manner. Given those assurances, my colleagues and I thought that pointing out the imbalance of power we had experienced and making constructive suggestions for the improvement of the system in a way that would address that issue was the appropriate approach at the time.

10333   Sadly, the good faith efforts we were promised, as has been the pattern with Sun TV in dealing with a number of independent producers, were not followed through on.

10334   The Commission, clearly, must take many factors into account when it issues a licence or a renewal of a licence. One of those factors should be the nature and quality of the interface between the licensee and the Canadian independent production sector.

10335   If, during the balance of these hearings and/or the renewal period, this licensee is the subject of further complaints of the nature I have already put on the record of this proceeding, I would think that the Commission should approach those complaints with the knowledge that there is a pattern of conduct which has been manifesting itself over a period of time, one which should reasonably be taken into consideration in reflecting on the commitments made by the licensee regarding the independent production sector.

10336   Myself, and a growing group of other independent producers are also raising these issues with the Canadian Film and Television Producers Association and the majority of us will also be pursuing our particular complaints in the courts, as I have mentioned.

10337   As a result of our efforts to make the Commission aware of this pattern in Sun's dealings with independent producers, and our pursuit of these issues in courts, we hope there are no further examples of the same attitudes and conduct myself and a number of other independent producers have faced at the hands of Sun TV.

10338   Until and unless Sun and Quebecor Media are required to submit to CRTC-imposed terms of trade, or some other externally-imposed and enforced form of accountability for their pattern of dealing with independent producers and other suppliers in the independent production sector, we truly expect that you will be hearing about this issue again and again in the years to come.

10339   It is, however, also possible that you will hear nothing from anyone else due to the enormous imbalance of power that already exists between the majority of independent producers and broadcasters in Canada who are becoming more powerful as the ownership of licensees in Canada moves toward ever greater consolidation and concentration.

10340   I have regard for the Commission's role and the Commission should not, in my view, be put in the position of renewing licences for a company without any knowledge of the problems being systematically created by that company and their consistent efforts to disrupt and undermine the strength of the independent production sector in Canada.

10341   The concerns of some of my colleagues are expressed in letters that some have addressed to the attention of the Secretary General of the Commission and which they asked me to enter into the record today before these letters are forwarded to the CFTPA who we expect will take up the handling of this pattern of conduct by Sun TV with the broadcaster and, perhaps in the near future, with the Commission.

10342   The issues that these producers and I have had with Sun TV have been so harmful as to make it financially impractical for these producers to afford membership in the CFTPA and, in many cases, to continue their careers in television. But we do hope that that will not prevent the CFTPA from taking this issue up with Sun TV and, as necessary, bringing it back to the Commission if this proves to be necessary.

10343   I am personally aware of at least four other independent producers who have been dealt with in an unethical fashion by Sun TV but to date they have been unwilling to come forward as it is seen by most producers to be biting the hand that feeds to complain about inappropriate behaviours by any broadcaster.

10344   Perhaps people would be more willing to make such complaints if there were an ombudsperson who could take in such complaints and keep them private so that independent producers could voice such complaints without fear of reprisals from parties who clearly hold the power when it comes to television production for broadcast in Canada.

10345   I would ask the Commission to consider establishing an ombudsperson for this purpose, outside the CFTPA, so that those who are truly inhibited by the fear of reprisals can still have a place where legitimate issues can safely be aired.

10346   I am extremely concerned as well with Sun TV's claims that their access to the CTF is limited due to the nature of that fund's criterion. Sun TV is the author of its own destiny with regard to the rapid disintegration of its access to funding from the CTF and it should not be given reduced requirements for quality Canadian programming simply because it has hampered its own access to the Canadian Television Fund through failures to follow through on contracts it entered into with various independent producers.

10347   I would suggest that Sun TV's licences be renewed with the same conditions of licence as were originally taken on by Toronto One, but with the additional requirement that Sun TV and Quebecor Media submit to strict terms of trade in their dealings with the independent production sector, ideally brokered through the CFTPA in the months to come, or as the result of CRTC-imposed terms of trade for all Canadian broadcasters, which I fully support.

10348   I understand that my colleague, independent producer Alberto Patella, is unable to attend today as he is tending to the care of his wife who has just had surgery, but he has asked me to read his written submission into the record.

10349   With the Commission's permission prior to doing that, I would like to also provide letters from independent producers related to the negative experience they have also had with Sun TV, all of which point to a pattern of conduct which I think needs to be curtailed. If the Commission wishes, I can also read these letters into the record.

10350   THE CHAIRPERSON: Thank you. I had a quick gander at the letter. It seems to be -- are you talking about the letter from Mr. Patella?

10351   MR. GOLDMAN: No, there are -- there were three other letters that were provided to the Commission from independent producers.

10352   THE CHAIRPERSON: I have in front of me one from Elaine Bomberry, one from Sanderson Layng and a third one from TLG, Tara Lee Gerhards. Are those the letters you are talking about?

10353   MR. GOLDMAN: Yes.

10354   THE CHAIRPERSON: No, I don't think we should read them in the record. These are personal complaints that people have with Sun TV. It's not our job to regulate that.

10355   Tell me, paragraph 11 of your letter -- of your submission you say that:

"I would think that the Commission should approach complaints with the knowledge that there is a pattern of conduct which has been manifesting itself over a period of time but should reasonably be taken into consideration in reflecting on the commitments made by these licensees regarding the independent production sector..."

10356   THE CHAIRPERSON: Sun TV committed to 75 percent independent production. Are they in breach of that commitment?

10357   MR. GOLDMAN: I am sorry. I'm not sure which paragraph you were referring to -- paragraph 11?

10358   THE CHAIRPERSON: Paragraph 11 of your submission of this -- which you just read to me.

--- Pause

10359   THE CHAIRPERSON: Last sentence.

10360   MR. GOLDMAN: Okay, yeah, I got it. Thank you.

10361   I don't have access to Sun TV's statistics. What I can say is there are programs that are mentioned in their assertion that they have met the conditions of licence which we know haven't been followed through on because they haven't even been delivered. So if they haven't been delivered they can't have been aired, which would suggest that they are taking credit for productions that haven't been aired.

10362   I cannot attest to whether they have met the criterion directly, but I think it would be questionable given what I have read in their application.

10363   THE CHAIRPERSON: My point is, well, how can I take something into consideration if it doesn't relate -- if they are not in breach of their commitments? Their commitment is quite clear. Their condition of licence said 75 percent of your Canadian production has to be purchased from independent producers.

10364   I don't know. Do you have any knowledge whether they have done that or not?

10365   MR. GOLDMAN: Again, I don't have their statistics. But I can attest to the fact that they did not follow through on purchases which they indicate in their application they did follow through on. So I would find most of their submissions to be questionable because of that fact.

10366   THE CHAIRPERSON: I see, okay. Thank you.

10367   Peter, do you have some questions?

10368   COMMISSIONER MENZIES: I just had one question on that.

10369   And that was, what were those programs that were mentioned that you said weren't followed up on?

10370   MR. GOLDMAN: There are two -- three minimum. The Canadian Music Week in 2007 was contracted and not followed through on.

10371   There was a documentary called DK Dibomecca(ph) -- documentary -- which was not followed through on.

10372   There is another variety show, Canadian Radio Music Awards which was verbally contracted, committed to, participated in by the head of independent production at Sun TV and not followed through on.

10373   Fourth, there was a large TV series that was committed to, not just to the series itself but there was another commitment to APTN. That series is called Rez Toonz and that commitment wasn't followed through on.

10374   As far as the ones that are mentioned in their application, the Canadian Music Week is mentioned as if it actually occurred. They didn't follow through on it.

10375   I don't have their application in front of me but I seem to recall that that occurred on more than one occasion within their application.

10376   COMMISSIONER MENZIES: Okay. As the Chairman mentioned, we really can't get too involved in these commercial disputes.

10377   MR. GOLDMAN: Of course.

10378   COMMISSIONER MENZIES: Your comments have been duly noted. Thank you for making your presentation. They are on the record, and thank you.

10379   THE CHAIRPERSON: You indicated that -- basically, you made an allegation of misrepresentation that Sun in its licence application alleges to have shown certain independently-produced shows that they have not; if I understood you correctly.

10380   MR. GOLDMAN: Yes. Specifically, Canadian Music Week 2007 is mentioned in their application. I do recall that specifically and that show absolutely has not been delivered and it could not have been aired. So it's mentioned as if it was, and it didn't.

10381   And they also allude to difficulties with Canadian Television Fund access which they created by not following through on that and other shows.

10382   THE CHAIRPERSON: I am only interested in specific issues of misrepresentation. If you know either of shows which they in their application allege to have shown and they did not, as you suggest, then I suggest you send us a list of those prior to the close of submissions.

10383   MR. GOLDMAN: I will be happy to do that.

10384   I also have Mr. Patella's submission.

10385   THE CHAIRPERSON: Mr. Patella's submissions really are not relevant. Those are individual complaints.

10386   THE SECRETARY: No, Mr. Chair, I believe he wants to read into the record Mr. Patella's presentation. That's what it is.

10387   THE CHAIRPERSON: Oh, okay. Well, go ahead. Read Mr. Patella's -- I don't have it in front of me.

--- Pause

10388   THE CHAIRPERSON: I'm sorry. I have to interrupt you. This is not anything generic about Sun TV. This is an individual complaint that Mr. Patella has with Sun TV. He should take it up in the appropriate forum but this is not the right forum for that.

10389   So let's not put it on the record because it doesn't belong there. Thank you.

10390   THE SECRETARY: All right.

10391   Thank you, Mr. Chair.

10392   THE CHAIRPERSON: Any undertakings, Madame Dionne?

10393   MS DIONNE: Yes, Mr. Chairman. I have one undertaking for Mr. Goldman; to provide a list of television shows Sun TV mentioned they would have aired and that you believe were not aired.

10394   I would ask that you provide information before or on May 11, copying Sun TV. They will have until May 13 to reply.

10395   Thank you, Mr. Chairman.

10396   THE CHAIRPERSON: Okay, thank you.

10397   That, I think, ends our hearing for today.

10398   THE SECRETARY: I also have two announcements for the record, Mr. Chair.

10399   On April 31 and 4th of May, 2009 the panel conducted in camera sessions with the applicants CTV, Canwest, Rogers and TVA. The Commission has reviewed the transcripts of these sessions, taking into account the confidentiality requested of the applicants, and will place abridged versions of these transcripts on the public record early tomorrow morning.

10400   Appearing intervenors will have until Monday, 11 May, 2009 to provide written comments on the contents of these transcripts, copying the applicant.

10401   The applicants will then have until Wednesday, 13 May, 2009 to provide their written reply to these comments.

10402   We would note that because of security concerns, these transcripts are only available electronically in PDF format.

10403   In order to avoid confusion, we would note that there was a paragraph numbering error in the excerpt of the transcripts provided to Rogers Broadcasting Inc. for its review. Therefore, the paragraph numbers referenced in the letter dated May 5th, 2009 requesting confidentiality actually refer to the previous paragraphs in the official transcript being placed on the public record, except for paragraph 1342.

10404   As well for the record, Mr. Chair, the applicants TVA, CTV, Canwest, Rogers, RNC, Télé Inter-Rives and Sun TV who have appeared as part of this hearing have opted to provide their final reply in writing. These replies will be submitted with the Commission on May 11, 2009.

10405   This concludes the hearing for today, Mr. Chair.

10406   We will resume tomorrow morning, nine a.m.

--- Whereupon the hearing adjourned at 1606, to resume on Friday, May 8, 2009 at 0900

   REPORTERS

____________________      ____________________

Johanne Morin         Monique Mahoney

____________________      ____________________

Madeleine Matte         Beverley Dillabough

Date modified:

2009-05-08