ARCHIVED - Transcript, Hearing 17 April 2012

Volume 2, 17 April 2012

TRANSCRIPTION OF PROCEEDINGS BEFORE THE CANADIAN RADIO-TELEVISION AND TELECOMMUNICATIONS COMMISSION

SUBJECT:

Review of the Local Programming Improvement Fund - Broadcasting Notice of Consultation CRTC 2011-788, 2011-788-1 and 2011-788-2

HELD AT:

Outaouais Room

Conference Centre

140 Promenade du Portage

Gatineau, Quebec

17 April 2012

Transcription

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

Transcription

Review of the Local Programming Improvement Fund - Broadcasting Notice of Consultation CRTC 2011-788, 2011-788-1 and 2011-788-2

BEFORE:

ALSO PRESENT:

HELD AT:

Outaouais Room

Conference Centre

140 Promenade du Portage

Gatineau, Quebec

17 April 2012

- iv -

TABLE OF CONTENTS

PAGE / PARA

APPEARING ITEMS

PHASE I

PRESENTATIONS

APPEARING INDIVIDUALLY

PANEL OF INTERVENERS

PANEL OF INTERVENERS

- vi -

UNDERTAKINGS

PAGE / PARA

Gatineau, Quebec

--- Upon resuming on Tuesday, April 17, 2012 at 0903

2152   THE SECRETARY: Please take your seats.

2153   THE CHAIRPERSON: Good morning.

2154   Madam Secretary, any opening remarks?

2155   LA SECRÉTAIRE : Oui.

2156   THE CHAIRPERSON: Away you go.

2157   THE SECRETARY: Introducing CBC.

2158   We will begin today with the presentation by CBC/Radio-Canada.

2159   S'il vous plaît vous présenter et présenter vos collègues. Vous avez 10 minutes pour votre présentation. Merci.

PRESENTATION

2160   M. GUITON : Merci beaucoup.

2161   Good morning, Mr. Chairman, Vice-Chairman, Commissioners and staff. My name is Steven Guiton and I am Vice-President and Chief Regulatory Officer with CBC/Radio-Canada.

2162   With me today are:

2163   - Louis Lalande, Executive Vice-President, French Services;

2164   - Kirstine Stewart, Executive Vice-President, English Services;

2165   - Patricia Pleszczynska, General Manager, Regional Services;

2166   - Christine Wilson, Executive Director, Content Planning.

2167   And in the back row:

2168   - Bev Kirshenblatt, Senior Director, Regulatory Affairs;

2169   - Liz Hughes, Director of News;

2170   - Diane Laflamme, Chief of Planning, Regional Services; and

2171   - Stan Staple, Senior Director, Research and Strategic Analysis.

2172   As you can see, we have brought a full complement of people from our two television networks. This reflects our extensive activities in both the English- and French-language markets across Canada and the importance we place on the current proceeding. Hopefully, we will be able to answer any questions you may have.

2173   I would like to begin by bringing you back to BPN 2008-100 where the Commission established the LPIF.

2174   In that ruling, the Commission made three key findings that I would like to quote.

2175   First:

"In the Commission's view, it is in the public interest for the Canadian broadcasting system to include healthy local stations that will enrich the diversity of information and editorial points of view. In particular, it is in the public interest that viewers in French-language markets are not disadvantaged by the smaller size of those markets."

2176   Secondly, you said:

"In light of the objectives of the Act, and the objectives for the LPIF, the Commission determines that public, as well as private, licensees should be entitled to receive the LPIF funding, as long as they broadcast original local news programming."

2177   Finally, the same decision said:

"Additional resources allocated to both private and public local stations will serve the same objective - improved local service and a better, more accurate reflection of all Canadians."

2178   The first quote establishes and reconfirms the importance of local TV programming in the Canadian system.

2179   Your second quote reconfirms the key role of both public and private local broadcasters in fulfilling the objectives of the Canadian broadcasting system.

2180   And finally, the third and perhaps most important quote establishes that the beneficiaries of the Fund are to be viewers. The LPIF's clear and overriding goal was, and is today, to improve the local TV product in smaller markets for the benefit of all Canadian TV viewers.

2181   The LPIF has been a tremendous success in each of these ways.

2182   The availability of LPIF funding has stabilized the financial position of local television stations and significantly boosted the level and quality of local programming on the television services of CBC, Radio-Canada, and many other television stations.

2183   Before I turn things over to my colleagues to highlight what we have done with the LPIF monies that we have received I would briefly like to address three issues that were raised yesterday.

2184   First, it was suggested that the Corporation receives a lot of LPIF money but does very little with it. This is simply wrong. CBC and Radio-Canada have given local viewers significant amounts of high quality news and non-news programming, programming that requires major investments and that no other broadcasters are providing.

2185   Second, there was a lot of talk about efficiency and incentives for efficiency. The fact of the matter is that the Corporation is always seeking ways to be more efficient. For example, yesterday Bell mentioned automated technologies. Well, our television services adopted such technologies, like Overdrive, many years ago. The resulting savings have permitted us to continue to expand our local services. The private broadcasters can pursue efficiencies in the same way if they so choose.

2186   Third, Halifax was mentioned multiple times yesterday morning. CBC Halifax is a regional centre producing terrific programming. We will be more than happy to discuss with you what we have been doing in Halifax.

2187   I would now like to turn things over to Kirstine and then to Louis to tell you about what CBC Television and la Télévision de Radio-Canada have done with their LPIF funds.

2188   Kirstine.

2189   MS STEWART: Thank you, Steven.

2190   CBC Television is grateful to have received LPIF funding over the last two and a half years and are extremely proud of the quality programming coming out of our investments in local regions across the country.

2191   We have increased the local news provided to viewers in our LPIF-eligible markets by more than 30 percent as compared to pre-LPIF levels.

2192   Our supper hour news shows have been bumped up from 1 hour to 1.5 hours in seven of eight LPIF-eligible markets.

2193   We have added new late-night newscasts in all eligible markets and enhanced statutory holiday newscasts in seven out of eight markets.

2194   We have enhanced our coverage of special events, elections, breaking news, weather and local sports, and increased the presence of local news on the national network.

2195   We have also introduced a Weekend newscast in Winnipeg and St. John's, with plans for more locations before the end of 2012.

2196   Thanks to LPIF in St. John's we've been able to add "On Point," a weekly 25-minute political affairs program that started during the provincial election and is continuing as a regular feature.

2197   And it isn't just a question of quantity. LPIF also feeds the quality of our journalism. In Winnipeg we have created a small investigative unit called "I TEAM," the only investigative unit in the market. They've had a big impact. Recently they broke the story of how pesticides are turning up in advertised pesticide-free organic fruits and vegetables and how that was kept secret. That story made headlines across the country.

2198   Overall, our local news coverage has been recognized for its quality journalism, awards like the Excellence in Journalism Award from the Canadian Journalism Foundation in 2011 and multiple Gemini Awards, including for Best Small Market Newscasts and Best Breaking News and In-Depth Investigative Feature.

2199   We have also provided significantly more non-news programming such as the East Coast's "Land and Sea" and almost 50 local documentaries, children's and arts programs that LPIF has helped fund. These shows provide viewers with locally made programming they simply could not get anywhere else.

2200   CBC is extremely proud of these accomplishments and we look forward to building on them in the coming years with continued LPIF support.

2201   Louis.

2202   MR. LALANDE: Thank you, Kirstine.

2203   Comme nos collègues de CBC Television, nous, à Radio-Canada, sommes immensément fiers de ce que les fonds du FAPL nous ont permis d'accomplir pour les auditoires francophones des petits marchés en région.

2204   Cette année, les douze stations de Radio-Canada admissibles au FAPL diffusent collectivement plus de 5 000 heures de programmation locale, soit une hausse de 23 pour cent par rapport au nombre d'heures de diffusion avant l'instauration du Fonds.

2205   En effet, nous présentons désormais des bulletins d'information locale sept jours sur sept dans la plupart des marchés bénéficiant du Fonds, au lieu de cinq jours, comme c'était le cas avant.

2206   En semaine, nous avons doublé la durée du bulletin de début de soirée à Sherbrooke, Trois-Rivières et Saguenay, faisant ainsi passer tous les bulletins diffusés sur les stations de Radio-Canada au format d'une heure.

2207   Nous avons repris la production de bulletins de nouvelles locales les jours fériés dans tous les marchés admissibles, ajouté des reportages fouillés, des forums publics sur des enjeux locaux, des documentaires et affaires publiques, un magazine culturel dans chacune des 12 régions et des émissions spéciales pour souligner des événements locaux importants qui ont un effet rassembleur et identitaire sur les populations francophones.

2208   En tout, les émissions d'information telles que les nouvelles, documentaires et affaires publiques représentent près de 88 pour cent de toutes les émissions locales diffusées par ces stations.

2209   Les 12 pour cent restants sont constitués d'émissions comme " La Revue acadienne " ou des émissions pour les jeunes comme " Classe sportive " à Québec et " ONIVA! " dans l'ouest, qui présentent aux téléspectateurs des contenus locaux sans pareils dans la programmation des autres télédiffuseurs.

2210   Tout comme CBC Television, Radio-Canada s'est réjouie de pouvoir faire connaître à tous les Canadiens un certain nombre de ses émissions produites localement, comme les documentaires régionaux de la série " Tout le monde en parlait " qui revisitent des événements marquants de ses communautés et des spéciales comme La Fête du 15 août en Acadie.

2211   L'excellence de nos productions régionales a récemment été soulignée. L'équipe de Sherbrooke a reçu une mention spéciale du Jury aux prix Communications et Société 2012 pour le Forum public sur l'intimidation chez les jeunes, et le reportage sur la première mosquée à Inuvik réalisé au Manitoba se méritera le 24 avril prochain un des quatre prix au Festival international WorldFest de Houston.

2212   En terminant, je tiens à vous rappeler que, plus souvent qu'autrement, Radio-Canada est une des seules sources de programmation locale en français dans les petits marchés, notamment les communautés francophones en milieu minoritaire. Le paradoxe aujourd'hui, c'est qu'un francophone vivant à St-Boniface ou Moncton peut avoir accès à des centaines de chaînes de télévision, des milliers de radios et de sites Web venant de partout dans le monde, mais sans jamais vraiment s'y reconnaître.

2213   Radio-Canada est la mieux placée pour offrir aux Canadiens francophones une programmation qui raconte leurs histoires et qui parle des enjeux qui les touchent de près. Grâce au FAPL, nous avons pu élargir notre offre de programmation comme jamais auparavant afin de mieux refléter ces dimensions.

2214   MR. GUITON: In conclusion, we would like to emphasize just a couple of points.

2215   First, the Commission got it right in 2008 when it recognized the importance of local programming to the broadcasting system. Polls and surveys consistently show that Canadians place a very high value on local programming, especially their local news. That has not changed in last four years.

2216   Second, the Commission also recognized in 2008 that the economics of the Canadian broadcasting system have shifted over the past decade or more, so that BDUs are getting more and more of the revenues and profits, while the financial model for local television has become ever more difficult.

2217   Finally, the LPIF has been a tremendous success. It has helped to stabilise local television stations during the recession and it has enabled CBC/Radio-Canada and other broadcasters to strengthen and enhance their local programming offer in smaller markets.

2218   Given these three facts, we believe the only sound policy decision is for the Commission to continue the LPIF, subject only to relatively minor adjustments.

2219   Thank you for giving us this opportunity to present our views today and we would be happy to answer any questions you may have.

2220   THE CHAIRPERSON: Thank you very much.

2221   I would ask Tom Pentefountas, our Vice-Chair of Broadcasting, to lead the questioning.

2222   COMMISSIONER PENTEFOUNTAS: Thank you, Mr. Chairman.

2223   Maybe to sort of start where we left off at the end of the day yesterday -- it was a long day, we finished up it was past 6:00 and we had a gentleman from Windsor on video who was quite complimentary of your efforts and appreciates the programming in Windsor and the fact that they are very, very close to an American market, I mean closer than probably any other major metropolitan area in the country. It would be the equivalent of sort of Gatineau/Ottawa.

2224   His questioning was as to the transparency of the CBC and the way they spend their LPIF funds.

2225   It had come to his attention that CBC Windsor receives $1.4 million and he wanted to know how that money was being used and where that money was going. I will quote him here. He says:

"... the CBC will not tell me its annual budget for CBC Windsor (ergo) I cannot assess whether the $1.4 million it received under the LPIF ..."

2226   -- is a significant amount of their total budget.

2227   Maybe to sort of ask this gentleman's query first and foremost and maybe answer that question, why can't we know what the total budget is and how much of that is going to LPIF and what percentage of that represents for him?

2228   MR. GUITON: Well, certainly I will ask Kirstine and Christine to provide you information on what is going on in Windsor and how we have used the LPIF money there.

2229   If the question -- and I'm sorry, I missed the exchange yesterday that you were referring to.

2230   If it was a question of access to information, we have released all our LPIF monies. We are one of the three broadcasters that have done so. As to other station-specific information, we provide that to the Commission, it is released as part of the financial summaries. That's as much information as we provide currently and that is as much as required.

2231   If the point is that we should be providing more information, certainly we will take that under advisement, I'm not aware of that.

2232   But I will pass over --

2233   COMMISSIONER PENTEFOUNTAS: No, but he came in, he was very complimentary --

2234   MR. GUITON: Yes.

2235   COMMISSIONER PENTEFOUNTAS: He thanked the CBC for their efforts in Windsor --

2236   MR. GUITON: Right.

2237   COMMISSIONER PENTEFOUNTAS:  -- and he underlined the importance of the contribution that CBC made in the Windsor market --

2238   MR. GUITON: Right.

2239   COMMISSIONER PENTEFOUNTAS:  -- but he would like to know of that $1.4 million it receives in LPIF, how much of a percentage is that on the overall budget to help him understand whether the loss of that would make significant impact on Windsor's ability to serve the community.

2240   MS STEWART: I think it's safe to say that Windsor is actually one of the cases where the LPIF money has very much strongly been felt and in fact was a major factor in making sure that the station stayed open.

2241   I can pass it to Christine to give you some examples of what we are doing in Windsor.

2242   MS WILSON: Thank you.

2243   So the allocation in Windsor of $1.4 million is around 40 percent of the total program expenditure in that market.

2244   COMMISSIONER PENTEFOUNTAS: Can you maybe approach the microphone? I'm having a hard time hearing you.

2245   MS WILSON: I'm not known as being soft-spoken, thank you very much. Sorry.

2246   So the 1.4 million that's spent in Windsor is about 40 percent I believe, give or take, of the total program expenditure in that market.

2247   COMMISSIONER PENTEFOUNTAS: Forty percent, okay. Because he had asked and they refused that information so he will be happy to hear that.

2248   MS WILSON: No, that's on the record.

2249   COMMISSIONER PENTEFOUNTAS: He is undoubtedly listening.

2250   Okay, great.

2251   MS WILSON: If you would like some examples, though, I meant Windsor is a really specific case for us because it is a market that was destined to be closed after the 2009 cuts and because of LPIF the station stayed open and we are now doing full one-hour newscasts there on a daily basis. We have been able to institute late-night news there, we are very proud of that, and really, you know, get involved in the community in a way that would never have been possible without LPIF.

2252   COMMISSIONER PENTEFOUNTAS: Okay. Great.

2253   J'ai écouté votre présentation. C'est grandement apprécié. Vos efforts et votre programmation est louable, mais revenons un petit peu sur la raison d'être du Fonds comme tel.

2254   Je commence avec le premier paragraphe de votre soumission qui date de plus tôt cette année, où vous parlez du Fonds et que le Fonds a été créé dans une période économique très difficile -- et nous savons tous ça -- pour survivre la récession mondiale. C'était la fin du monde tel qu'on l'avait connu à l'époque. Tout le monde s'inquiétait. On pensait que le ciel était pour nous tomber sur la tête. Heureusement, ça n'a pas été le cas.

2255   Mais on ne peut pas dire, trois ans plus tard, qu'on se trouve dans la même situation économique qu'on se trouvait à cette époque-là. Alors, est-ce que le Fonds n'a pas perdu en quelque sorte sa raison d'être, compte tenu du fait que la fin du monde n'a pas eu lieu en 2008 et n'aura pas lieu en 2012, 2013, 2014?

2256   M. GUITON : En effet, Monsieur Vice-Chairman, je ne suis pas d'accord avec la caractérisation que vous venez de dire. Ce n'était pas à cause de la récession que le FAPL a été créé, pas du tout. Même quand je regarde la décision 2008-100, le mot " récession " n'est pas dedans. Et j'ai vérifié toutes les transcriptions de ces audiences-là. Il y a un mot seulement " recession " là-dedans.

2257   Ce n'était pas à cause ça. C'était vraiment à cause de... Le CRTC a regardé les 10 ans avant. Ils ont vérifié pour les radiodiffuseurs publics et privés. Il y a un problème dans le marché, les petits marchés locaux.

2258   Évidemment et clairement, ce n'est pas à cause de la crise économique. Il y avait un problème et on veut augmenter la qualité et quantité de programmation locale. C'est ça la décision 2008-100.

2259   Après ça, un an après, c'est vrai qu'il y avait une crise économique, et vous avez changé un peu les paramètres, mais ce n'était pas relié du tout, du tout, du tout à la raison pour laquelle vous avez établi le Fonds.

2260   CONSEILLER PENTEFOUNTAS : Vous ne voyez pas que le Conseil avait clairement laissé entendre que le FAPL était pour être une initiative ponctuelle? Ce n'était pas votre lecture à l'époque?

2261   M. GUITON : Ponctuelle? Je ne comprends pas exactement ce que vous voulez dire.

2262   COMMISSIONER PENTEFOUNTAS: It was to be a temporary measure.

2263   MR. GUITON: Oh! Okay.

2264   COMMISSIONER PENTEFOUNTAS: It was to be a measure that was punctual.

2265   MR. GUITON: So in 2008-100, my reading of that ruling, there is no mention of this thing is going to last for a temporary period only to get through the economic crisis.

2266   What was established in that decision was the idea that the Commission looked at local markets, small local markets, they saw a problem. And they saw a problem -- the thing you did identify, the reason for creating the fund, the specific thing, was not a temporary phenomenon at all, it was the fragmentation that was going on in the marketplace. As a result of the fragmentation it was clear to you that small markets were not economically sound.

2267   COMMISSIONER PENTEFOUNTAS: If we follow that logic then, at the very least the fund should be scaled back to 1 percent?

2268   MR. GUITON: The .5 percent I agree with you, that was added as a result of the recessionary phenomenon and I would agree with you that you might say now that it looks like we are over the worst of it -- although I don't really know, to be honest -- but that might be correct.

2269   The only thing I would add to that is that there was a second element when you created the fund. It wasn't just that you saw that there is the economic problem in local markets from fragmentation, et cetera, the second element was that you looked at BDUs size and profitability and you said: You know what, we think that the BDUs in the marketplace should make a contribution that is larger than the 5 percent they are making, they should make a contribution that is commensurate with their size and profitability and for that reason you established 1 percent to begin with and then you went up to 1.5.

2270   I would argue, and we would argue, that that second reasoning still exists today and gives you good justification to maintain the 1.5.

2271   MS STEWART: To put some context around the advertising market presently in Canada -- and I will let Louis speak about what's going on in French services -- but in the English-language markets we find ourselves -- at the time of 2008 our revenues were about $253 million in the advertising market; in 2011 we are not back up to those numbers yet, we are only at $246 million.

2272   So for context, regardless of, as Steve was saying, the fact that the Local Program Investment Fund was to support, as the CRTC does in many different ways, the inequities of local markets, if the question is: Is the recession over, I think with regards television markets we are showing that we are still not back up to 2008 levels as well.

2273   COMMISSIONER PENTEFOUNTAS: People understand the importance of local programming and you mentioned that there are polls and studies that you have done and others have commissioned that show that people appreciate local programming. If they appreciate it they watch it, do they not?

2274   You have seen a marked increase in your ratings in small markets; is that correct?

2275   MS STEWART: The benefit of the LPIF fund has been to obviously create more programming for viewers. They have been watching and it has been great how they have been responding across the country. We have seen a marked increase in not just the volume of hours that we now give to people over the supper hour, which increased from one to one and a half hours, but the number of people coming to those hours has increased.

2276   Christine has some specifics around what that looks like.

2277   MS WILSON: I'm sorry, is your question about the increase in audience --

2278   COMMISSIONER PENTEFOUNTAS: Yes.

2279   MS WILSON:  -- or the increase in advertising?

2280   COMMISSIONER PENTEFOUNTAS: Audience for the time being. We will get to advertising.

2281   MS WILSON: Audience for the time being, thank you.

2282   So obviously we have increased the footprint of our supper hour program from 60 to 90 minutes and, thankfully, we have seen a huge increase from our audiences in terms of their response to it. The hours tuned to CBC supper hour programming has increased by two-thirds and our reach has increased by 45 percent.

2283   Are you interested in more information? I'll ask Stan to provide more.

2284   COMMISSIONER PENTEFOUNTAS: But if people are watching, why aren't the advertising dollars following?

2285   MS WILSON: Sorry. Advertising dollars do follow and, in fact, our ad revenues have increased for those supper hour shows by $1.1 million and we are very happy and thankful about that. But we spent $15 million to get there.

2286   That $15 million was LPIF money that we spent to make $1.1 million. So it's fabulous but it's not a recipe to get rich.

2287   MS STEWART: I think, to the point of the Commission, the subsidization through the LPIF Fund actually gives you the opportunity to give programming in markets where it's not financially feasible. You know that is the point of, you know, many different benefits that we attribute across the country.

2288   I think this is proof positive that regardless of the increase in audiences the advertising dollars don't necessarily follow.

2289   COMMISSIONER PENTEFOUNTAS: But irrespective of the Fund, is it not CBC's responsibility to serve small markets, to serve the regions, to serve minority-language communities?

2290   Isn't that part of your mandate and shouldn't you be in the regions and serving those markets, serving the people that can't get served by private broadcasters?

2291   MR. GUITON: Certainly, we have a mandate, a specific mandate and it includes doing a lot of different things. We do our best given our government appropriations to try and meet all of those objectives.

2292   As the Commission has recognized on numerous occasions our funding and our objectives sometimes don't match and so the Commission, for example, has permitted us to put advertising on some of our services. They have permitted us to participate in certain programs in order to enhance our ability to meet the objectives that we have. For the same reason the government allows us to participate in the CMF.

2293   Of course we have a mandate. We are trying to achieve it. We have to balance objectives but we also have to balance the reality that we don't have the finances to do necessarily everything as well as we like.

2294   I would just -- I'll pass this to Louis but --

2295   COMMISSIONER PENTEFOUNTAS: My question is this: Shouldn't you prioritize the regions? Shouldn't you prioritize minority language services?

2296   Shouldn't you concentrate on the regions where the private broadcasters don't have an economic incentive to broadcast? Shouldn't that be at the heart of what you do?

2297   MR. GUITON: Well, I know Louis wants --

2298   COMMISSIONER PENTEFOUNTAS: And isn't that the quid pro quo at the end of the day for the state funding? Isn't that part of the deal?

2299   MR. GUITON: I think there is a lot of things I disagree with the characterization you made just now.

2300   But the first thing I would say is the Broadcasting Act doesn't say CBC is only going to go where the privates don't go. The Broadcasting Act establishes that the system is made up of different components and all of them are going to be there. It doesn't say one has got priority and the other doesn't. They have all got priority.

2301   COMMISSIONER PENTEFOUNTAS: But is your priority to compete against private broadcasters or is your priority to serve the people that are not served by private broadcasters?

2302   MR. GUITON: Mr. Vice Chairman, what we are doing is exactly what the LPIF identifies. We are serving viewers. It's not about taking money from the privates or taking money away from the BDUs, other private broadcasters.

2303   The idea was that everybody benefits because everybody can do better in enhanced programming. And that's what we are doing.

2304   COMMISSIONER PENTEFOUNTAS: M'hmm.

2305   But if LPIF -- I mean even before LPIF came into play you were still serving these regions and small markets, were you not?

2306   MR. GUITON: Yes, we were.

2307   COMMISSIONER PENTEFOUNTAS: And you have continued to do so.

2308   MR. GUITON: We were certainly serving them. And when you looked at it in 2008-100 you weren't that happy with what we were doing and you weren't that happy with what the privates were doing either.

2309   You said in your decision, you know what? We think that there is a problem here. Both privates and public have a problem. We would like them to do more and we want to figure out a way that they can do it. We are going to setup the LPIF to help them both out to the benefit of viewers, not to the benefit of that broadcaster or that one, to the benefit of viewers.

2310   And that's what you did. You saw the --

2311   COMMISSIONER PENTEFOUNTAS: I am not picking broadcasters and I'm not putting you up against the privates.

2312   I'm simply asking a mandate question. And do you see your role given that you are a state-funded broadcaster, to serve the people that would be ill-served by an economic model that doesn't work in small markets?

2313   MR. GUITON: The Broadcasting Act establishes that we have a mandate to go into local and it establishes that as a priority. We are trying to do that. We have stations in all the regions across the country to do that.

2314   And when we are trying to do that at the same time we are trying to meet our other objectives which is to provide drama programming, documentary programming on the network. We are trying to provide radio services.

2315   We do all of those kind of things and we have to balance the financial reality with those objectives.

2316   MS STEWART: I think too, it is important to remember that the mandate is to serve all Canadians and the purpose of the LPIF Fund is obviously to support those areas which can't actually be supported by any kind of business case, particularly obviously the privates have had difficulty in that area.

2317   We have the same difficulty. We face the same market realities that we do in those smaller markets.

2318   The serving of all Canadians is an important point because whether a market has been served already by a private broadcaster they still as a community ask the CBC to come in. We have known this through our recent expansions into markets that we haven't been in the past which already are presently served by private broadcasters.

2319   Yet, because of the quality of journalism, because of our independence because we are not part of a larger vertically-integrated company, they know that our quality journalism actually stands out in a way different from the private broadcasters. So I think it's important. You can see from the example I gave in Winnipeg.

2320   Winnipeg is obviously a market served by multiple broadcasters in terms of local news. However, we have the only investigative news team in Winnipeg. It's that investment in the in-depth investigation and the kind of quality journalism that we do that calls those communities to ask for us regardless of whether they have been served by others. They want to be served by the CBC.

2321   CONSEILLER PENTEFOUNTAS : Monsieur Lalande?

2322   M. LALANDE : Je vais expliquer un petit peu ce qui se passe dans le marché francophone.

2323   Il y a 12 stations. À travers l'histoire de Radio-Canada, Radio-Canada n'a jamais fermé de station de télévision, malgré toutes les difficultés qu'elle a rencontrées dans sa carrière... dans son existence. Donc, oui, pour revenir au mandat, c'est important. Les stations de Radio-Canada sont là.

2324   Par ailleurs, si on regarde la situation avant l'introduction du FAPL et après, on peut constater une chose. Je vais vous donner l'exemple de nos stations en milieu minoritaire. Les 12 stations qu'on a, il y en a sept qui sont dans un milieu minoritaire.

2325   Je vais vous donner l'exemple des stations de l'Ouest canadien, les quatre stations qu'on a dans l'Ouest canadien. On a maintenant des émissions d'information en français, un grand rendez-vous d'informations quotidien d'une heure, et on a aussi maintenant une présence le week-end.

2326   Je me promène beaucoup, puis je peux vous dire une chose, la mesure qui a eu le plus d'impact dans l'Ouest, c'est l'introduction des nouvelles le week-end en français, des nouvelles locales. C'est très simple. La station... Bien sûr, on servait notre monde, mais la station était ouverte cinq jours. Là, elle est ouverte sept jours. C'est important. Les gens nous le rappellent quotidiennement à quel point cette mesure-là est importante.

2327   Ce n'est pas une question de mandat, c'est une question de balancer l'argent qui est disponible. Alors, là-dessus, chapeau au Fonds, qui nous permet de faire des choses importantes pour les citoyens. Et ça, c'est une réalité qu'on a à vivre et que les citoyens ont à vivre.

2328   Vous savez comment c'est important quand on vit en milieu minoritaire, quand on passe notre journée dans un environnement anglophone, quand on revient chez soi ou quand on revient le week-end, c'est là où on a besoin de se retrouver avec notre langue, et, à ce moment-là, le fait d'avoir des émissions à notre station de télévision qui reflètent qui on est, dans lesquelles on voit nos politiciens, dans lesquelles on voit nos leaders économiques, culturels et sociaux, c'est vraiment essentiel et vraiment... Ce que le Fonds amène, c'est vraiment une capacité d'améliorer cette présence-là.

2329   CONSEILLER PENTEFOUNTAS : Mais, Monsieur Lalande, je suis entièrement d'accord avec vous, d'abord. Pour avoir voyagé dans l'Ouest, je trouve ça très agréable de pouvoir écouter les nouvelles en français, surtout les nouvelles locales en français.

2330   Mais ça rentre dans le cadre de votre mandat. Il me semble que ça doit être la priorité de Radio-Canada/CBC de servir les communautés linguistiques minoritaires. Ça ne doit pas faire partie... Ça ne doit pas dépendre sur le Fonds. Vous ne seriez pas d'accord avec moi?

2331   Mais qu'il y ait un Fonds ou non, c'est votre priorité, une des priorités principales, je dirais, de la Société.

2332   MR. GUITON: If I could just go back, I understand what you're saying and it is important for us to be spending money on local programming. We have that all --

2333   COMMISSIONER PENTEFOUNTAS: No, but on minority programming, listen.

2334   MR. GUITON: Yes.

2335   COMMISSIONER PENTEFOUNTAS: The privates are not going to spend money on a French broadcast doing local news in Calgary.

2336   MR. GUITON: Yes.

2337   COMMISSIONER PENTEFOUNTAS: The economic model is not there. So the state gives you certain funds to provide those services to continue to allow people in a minority situation to enjoy one of the two official languages.

2338   MR. GUITON: Yeah. Mr. Vice Chairman, we do that and it's great and it's fantastic and we're doing the best we can.

2339   You looked at that situation and you said, "We think you could do better by -- a priority for the system in local programming. We think that the overall system needs to be improved by setting up the LPIF".

2340   And I think if what you're saying is we should be doing the level that we are able to do with the LPIF on our own, we can't. And I guarantee you if we lose the LPIF we will be taking $40 million -- you will be taking $40 million out of our regional expenditures and we don't have $40 million to replace it.

2341   So I think that's where actually you are coming from. There is a notion that it's an unlimited amount of money that the public broadcaster has and can put it everywhere and maintain the service.

2342   COMMISSIONER PENTEFOUNTAS: That's not what I said. I said you have to make choices.

2343   MR. GUITON: No, I understand we do have to make choices.

2344   COMMISSIONER PENTEFOUNTAS: You have to prioritize.

2345   MR. GUITON: But that's what we have done and when you did -- when we had the hearing for 2008-100 you looked at what we were doing and you said, you know what? We would like to help you do more because it is a priority for the system for the benefit of viewers. And that's what we're doing.

2346   MS PLESZCZYNSKA: And that's essentially what the LPIF has allowed us to do, is we have been able to go from a service to Francophone communities across the country that was in response to our obligations before the CRTC to enhance that service.

2347   And we have been able to go from a minimum amount of local content, local segments as we were discussing; as you were discussing yesterday, within our newscasts to double that amount of local segments within the local newscasts. We have been able to go from a third of local segments to two-thirds of local segments. That's a lot of coverage of local communities.

2348   We have been able to go from five hours a week of local newscasts on Téléjournal to add a weekend program, which has allowed, as Louis was explaining, for communities to see themselves on the weekend, where predominantly the cultural activity takes place.

2349   So those have been critical additional hours.

2350   We have been able to enhance the kind of coverage and the kind of journalism that's allowed for debate, that's allowed for documentary, that's allowed for public affairs.

2351   I will give you examples of some of the programming that we have been able to do in Manitoba specifically.

2352   We talked about the increase in local segments within the local newscasts, five days a week, that were already there, but with a minimal amount of local content. We added the weekends.

2353   We now bring our local newscasts out into the community, so that francophones from different communities can see themselves reflected. So 11 times our local newscast has gone out into various communities.

2354   We were able to do exhaustive coverage of the flooding in Manitoba, especially in those communities that are francophone that were affected by those floods -- St. Laurent, St. Martin. That's where the flooding affected francophone communities. Our local broadcasts, because of LPIF, were able to go out there.

2355   We were able to do a cultural show throughout the summer that brought us out into every single festival around the province, and we were able to convey that cultural activity in those festivals.

2356   We were able to do, for ten days, special programming around Festival du Voyageur, that included une émission «tapis rouge» un spectacle -- and the first talk show to feature the star system in Manitoba.

2357   We talk a lot about the star system in Quebec; well, Manitoba has one also. So Radio-Canada was able to put that forward.

2358   So, yes, our obligation has always been to be there in minority markets, but what the LPIF has been able to do is to enhance the service, and to improve the service to audiences, because of the kind of programming that we have been able to do, both in terms of quantity and in terms of quality, and in terms of the diversity of programming that we have been able to provide.

2359   COMMISSIONER PENTEFOUNTAS: I appreciate that.

2360   You mentioned studies, and you have a study in your document that you deposited a while back. Did you ask a question as to how much people are willing to and prepared to pay for local programming directly?

2361   MR. GUITON: I am going to check, but I don't think we asked that question. Although, as part of the -- we did two studies that we filed. We did a focus group report, where we went across the country, francophone markets and anglophone markets, and we invited people to give us their thoughts on local programming, et cetera, and we know that, within those focus groups, it was discussed how much the LPIF was costing -- costing them, okay -- and they were prepared to pay that or more, I know the response was.

2362   In terms of the national survey that we did, I don't think we asked about what they would be willing to pay, but I am going to check, if I could have just one second.

2363   COMMISSIONER PENTEFOUNTAS: Okay, sure.

2364   MR. STAPLE: No, we didn't ask that question, but what we did find out, particularly through the focus groups, was that most people actually weren't aware that they were paying for local programming, and when they found out that they were, they indicated that they would be quite pleased to continue paying whatever they were paying now.

2365   COMMISSIONER PENTEFOUNTAS: Not knowing what they were paying.

2366   MR. STAPLE: Excuse me?

2367   COMMISSIONER PENTEFOUNTAS: Not knowing what they were paying, though.

2368   MR. STAPLE: They were told that it represented 1.5 percent --

2369   COMMISSIONER PENTEFOUNTAS: Of their cable bill.

2370   MR. STAPLE:  -- of their cable bill, yes.

2371   COMMISSIONER PENTEFOUNTAS: Wouldn't it be more economically honest to just charge them directly?

2372   MR. GUITON: I'm sorry, I'm not following.

2373   COMMISSIONER PENTEFOUNTAS: Say: "Local programming costs..."

2374   Isn't there some other formula that we can use besides the LPIF that would more clearly indicate that you are paying for that local programming?

2375   Your own study mentions that people didn't even know they were paying for it.

2376   MR. GUITON: Yes.

2377   Well, I think the way -- you know, the system is set up so that different people contribute to the broadcasting system, and one way of making the contribution for something as important as local programming is through BDUs.

2378   You recognized that there was a complete imbalance in the system, and that's why you have asked BDUs to contribute. We understand that.

2379   You have also said, though, that it is not just people in LPIF markets that benefit. All Canadians benefit through the LPIF, because even people in larger markets that are not LPIF markets get to see what is going on in the smaller areas. Some of that programming makes it to the network.

2380   I think you identified, also, a second reason in your decision about -- it allows a talent pool to grow. It allows for people in smaller markets to get access to improved investments in local programming, which benefits the larger markets.

2381   So, overall, I think what you are suggesting is: Why don't we just tax the people who are benefiting. Well, I think that the Commission said: Everybody benefits, and given the imbalance that is in the system, a good way of making this work is through BDUs.

2382   COMMISSIONER PENTEFOUNTAS: Do you have any information, any data to support the contention that the local stories are getting picked up nationally?

2383   MR. GUITON: I believe we do. I think that we do file information with respect to that as part of our LPIF reports.

2384   I will ask my colleagues to give you more information.

2385   MS WILSON: In terms of news programming, I would like to turn it over to our Director of News, who can speak to that very specifically.

2386   MS HUGHES: I will just give you a couple of examples, but we do file that information. It is all filed, as well.

2387   Here is an example of a story in Regina that grew out of a news story about Aboriginal fathers, and how difficult it is to be a real father and a great parent when there are no good role models in the community.

2388   This turned into an hour-long documentary called "Blind Spot", that ran locally, and that we ran as part of a series of public forums in Regina, with an incredible community turnout, and an incredible community reaction, too.

2389   But the documentary also ran on the network, and received exposure across the country, again with great impact.

2390   Even our "Land and Seas" programs that we do in the Maritimes, and in Newfoundland and Labrador, are designed primarily to be for local audiences, but they do resonate across the country. They both run -- those series run on the network, and again with astounding audiences.

2391   MS WILSON: If I could just jump in here with an example specifically around non-news programming, because of LPIF we were able to establish time slots specifically for non-news programs in the regions, where they would carry their own local documentaries, or their comedy shows, or their music shows or whatever. Some of these were so good that we established a slot so that the best of them could play for the network, so that people in different regions could see the documentaries, or comedy shows or whatever, from somewhere else, and it was very popular, as well.

2392   So I think it works on both the news and the non-news side.

2393   CONSEILLER PENTEFOUNTAS : Est-ce qu'il y a des synergies dans vos bureaux de nouvelles, Monsieur Lalande, à Toronto et dans l'Ouest? Les bureaux sont dans le même bureau.

2394   Et est-ce qu'il y a des synergies à l'effet que des fonds issus du FAPL sont utilisés, ou ont un impact également sur vos nouvelles de langue anglaise?

2395   M. LALANDE : Bon, une première chose que je voulais dire, quand on est en couverture, puis quand une station est active, forcément elle reflète ce qui se passe dans son milieu.

2396   Donc, forcément, elle multiplie ses chances que, dans le fond, une histoire qui a un intérêt important soit reflétée sur le réseau.

2397   Alors c'est comme ça que ça marche. Puis, plus il y a de gens sur le terrain comme on dit, plus t'as de chance d'avoir des histoires.

2398   Il y a plusieurs éléments qui se passent. Puis, je vais laisser Patricia, vous...

2399   MME PLESZCZYNSKA : Ah oui! J'ai plusieurs...

2400   M. LALANDE : ... donner quelques exemples.

2401   MME PLESZCZYNSKA : J'ai de beaux exemples.

2402   M. LALANDE : Oui.

2403   MME PLESZCZYNSKA : J'ai une douzaine d'exemples, des centaines d'exemples. Mais un en particulier, en Mauricie, justement récemment, une enquête, un reportage de près de 20 minutes sur l'entente que la ville de Shawinigan a avec son équipe de hockey junior les Cataractes.

2404   Et l'équipe a récemment aménagé au centre Bionest, c'est un nouvel amphithéâtre qui a coûté 28 millions aux contribuables.

2405   CONSEILLER PENTEFOUNTAS : Mm-hmm.

2406   MME PLESZCZYNSKA : Ça vous fait peut-être penser à d'autres histoires semblables.

2407   CONSEILLER PENTEFOUNTAS : Tout un débat dans l'Hôtel de Ville...

2408   MME PLESZCZYNSKA : Exactement.

2409   CONSEILLER PENTEFOUNTAS : À propos de ces dépenses.

2410   MME PLESZCZYNSKA : Exactement.

2411   CONSEILLER PENTEFOUNTAS : Oui.

2412   MME PLESZCZYNSKA : Et c'est vraiment une question de partenariat public/privé où le privé reçoit les bénéfices et le public prend tous les risques.

2413   Alors, c'est un travail qui a été fait dans notre station de la Mauricie, qui a pu être fait, parce qu'on a pu augmenter le nombre et la qualité et l'expérience des journalistes et qui a été repris à l'émission «Enquête».

2414   Alors, ça fait partie d'un des exemples.

2415   Plusieurs autres, une série qui existe déjà au réseau français que vous connaissez peut-être, la série documentaire «Tout le monde en parlait».

2416   CONSEILLER PENTEFOUNTAS : Mm-hmm.

2417   MME PLESZCZYNSKA : Alors, cette série-là, c'est une série qui relate... qui relate un fait d'importance dans la vie d'une communauté ou d'une ville et qui reprend, et qui va chercher des entrevues ou des points de vue contemporains sur ce qui s'est passé il y a 10, 20 ou 30 ans.

2418   Alors, un exemple de ces documentaires-là, dans la région-même ici à Ottawa, un documentaire sous le format«Tout le monde en parlait» où on révisait un événement marquant dans l'histoire, justement, de Gatineau. C'est l'expropriation du Vieux-Hull.

2419   Des centaines de famille dans la région-même qui est occupée par cet édifice, qui avait été expropriées dans les années '70.

2420   Et à travers une bataille politique, financière, économique, des centaines de familles et une communauté entière qui a été déplacée.

2421   Alors quand on a diffusé cette... avant même de diffuser ce documentaire-là, on avait fait une avant-première. Cinq cents personnes se sont déplacées, des gens qui s'étaient pas vus depuis 30 - 40 ans, des familles entières qui se sont retrouvées.

2422   Ça, c'est le genre de documentaire qu'on a pu faire grâce au FAPL et c'est un documentaire qui a été diffusé dans la série «Réseau». Et les gens étaient tellement heureux que leur histoire ait été racontée, a été entendue à travers le pays.

2423   Alors, ça fait partie des choses que le FAPL a permis de faire localement, mais qui a eu un reflet, après ça, au réseau.

2424   MR. GUITON: Mr. Vice-Chairman, I believe you had another question, which we haven't yet responded to, regarding --

2425   COMMISSIONER PENTEFOUNTAS: On synergies.

2426   MR. GUITON:  -- synergies.

2427   COMMISSIONER PENTEFOUNTAS: Yes, if you could speak to that issue...

2428   MR. GUITON: We heard some of that mentioned yesterday.

2429   COMMISSIONER PENTEFOUNTAS: Yes.

2430   MR. GUITON: And there are accounting rules. The LPIF also has rules for how to record these costs, and we follow those both with respect to the English-French separation, as well as service-specific separation -- TV, radio, internet, et cetera.

2431   They are lengthy and they are not very pretty to look at, but I would be happy to file those with you and show you exactly how we separate our businesses, to make sure that only the station-specific costs are actually being used under the LPIF, as per the rules.

2432   COMMISSIONER PENTEFOUNTAS: Okay. That's great.

Undertaking

2433   CONSEILLER PENTEFOUNTAS : Messieurs, dames, voulez-vous rajouter quelque chose?

2434   M. LALANDE : Bien oui, bien c'est sûr qu'il y en a, des synergies. Il me revient un exemple, lors des inondations au Manitoba.

2435   Le weekend, vous savez, quand la digue a été ouverte, c'était un samedi matin très tôt.

2436   M. GUITON : Oui.

2437   CONSEILLER PENTEFOUNTAS : Et effectivement, à cause de la présence maintenant du weekend, autant des services anglais que des services français, on a pu faire une couverture très tôt le matin avec vraiment les premières images qui montraient du haut du ciel l'ensemble de l'opération qui était une vaste opération. C'était une première au Canada.

2438   Puis, bien c'est sûr que là, t'avais un effort combiné. Des services anglais, des services français de Winnipeg et du FAPL le weekend.

2439   MME PLESZCZYNSKA : Surtout qu'à ce moment-là, il y avait pas d'émission de weekend à Winnipeg encore pour CBC. Il y en avait une pour Radio-Canada, mais il y en avait pas une encore pour CBC à ce moment-là.

2440   CONSEILLER PENTEFOUNTAS : O.K.

2441   J'ai mes collègues qui ont sans doute des questions. Mais, il me semble que la question fondamentale, c'est que, pourquoi devrait-elle - les EDR - en quelque sorte, subventionner l'industrie de la télévision, incluant la société d'État, et se substituer à l'État qui cherche lui-même à vivre selon ses moyens.

2442   Parce que vous avez parlé du fait que le EDR vit une meilleure situation économique. Mais ils sont également des investissements massifs à faire.

2443   M. GUITON : Oui.

2444   CONSEILLER PENTEFOUNTAS : Et rien ne nous assure que dans les deux, trois, quatre prochaines années que leur sort ne changera pas.

2445   Alors, sur la question fondamentale à imposer l'obligation de subvenir à vos besoins. Je vous donne la chance de répondre; c'est la question que les gens se posent. Et voilà votre chance d'y répondre.

2446   MR. GUITON: I am going to just say this in English, because I want to make sure that I have the right definition.

2447   COMMISSIONER PENTEFOUNTAS: Sure.

2448   MR. GUITON: You have used the expression a couple of times that we are a state-funded broadcaster, or a state broadcaster. We are not actually that at all, we are a public broadcaster, and there is an important difference.

2449   COMMISSIONER PENTEFOUNTAS: You are a public broadcaster that is funded by the state.

2450   MR. GUITON: We are a public broadcaster, that's correct.

2451   In terms of our ability to participate in the LPIF, I can only say to you that the purpose is for the benefit of viewers, as I think Bell made very clear to you yesterday when they provided their explanation as to why the CBC should be included, Radio-Canada should be included in this.

2452   This is not about choosing who receives the money, it's about whether or not you, the Commission, in your wisdom, see that there is a public policy need to do a better job in small local markets, and you have decided that that is what the public policy need is, and the way to do it is for all broadcasters to do a better job.

2453   COMMISSIONER PENTEFOUNTAS: By asking BDUs to subsidize that job.

2454   I am not excluding -- I am not specifically concentrating on the CBC, it's the entire concept of the fund --

2455   MR. GUITON: Right.

2456   COMMISSIONER PENTEFOUNTAS:  -- and the idea that BDUs should sort of subsidize local programming.

2457   MR. GUITON: Yes.

2458   COMMISSIONER PENTEFOUNTAS: That's one aspect. The other aspect is that you have a different mandate, different obligations, than private broadcasters do.

2459   I don't think you would disagree with me on that.

2460   MR. GUITON: We have a specific mandate, that's absolutely true.

2461   COMMISSIONER PENTEFOUNTAS: Right. They are strictly beholden to their shareholders, for the most part, and your obligations are toward Canadians and toward serving Canadians.

2462   My other question is, isn't there a way of transferring the funds that you would spend in Toronto, Montreal and Vancouver to serve these regions?

2463   It's 2 or 3 percent of your overall budget.

2464   MR. GUITON: There are about three questions that you have asked in a row, and I am just going to try to deal with them.

2465   COMMISSIONER PENTEFOUNTAS: But they all go to your mandate, and they all go to the difference between yourself and private broadcasters.

2466   MR. GUITON: So, just going back to your first question, it actually wasn't about public or private broadcasters. Your first question was: Is it smart to be having the BDUs subsidize certain activities in the system.

2467   The Canadian broadcasting system works as a whole. There are contributions across the system, and that's the way it is set up. We have that model under the CMF. We have that model under the LPIF. It is not considered to be a tax or a subsidy, it is considered to be a contribution to the system, in recognition of certain benefits that BDUs have.

2468   And we all know, every one of us here, because a lot of people have filed that information on the record, that the BDUs are extremely dominant in the entire system, and they are that way thanks to the way the system works. The system is set up, and it benefits them, and as a result of those benefits, they, in turn, contribute to the system.

2469   Currently -- and I am sure you have seen the data -- 97 percent of the share of operating income in this industry is in the BDU and specialty area -- 97 percent. No one else is making operating income in this industry but them. So, the return for that is, they make a contribution.

2470   That's the first thing. It is not a subsidization, as if it's some sort of unfair burden, it's a contribution in recognition of the benefits they get through the system.

2471   The second thing, as to our mandate, I can only say, yes, we have the mandate. We do our best to balance our needs -- our financial needs versus our mandate -- and, again, I can only reiterate that you have, through the LPIF, seen that you would like to see us do more. You would like to see us do more local programming, and I am happy to say that we have done more.

2472   COMMISSIONER PENTEFOUNTAS: Could you do more by concentrating your efforts in the regions a little bit more, and spending fewer of your resources in the major metropolitan areas that are already well served by private broadcasters?

2473   MR. GUITON: I am going to let Louis and Kirstine give you some specifics about Toronto, Montreal, and moving our resources around.

2474   Certainly we operate a network. Certainly we create a lot of programming, and for that reason we have centres in Toronto and Montreal, and there are efficiencies from having big production centres.

2475   As you know, we spend a lot on Canadian content. We create a lot of Canadian content, and I know that we do that through our Toronto and Montreal offices, so I assume that there are certain advantages to locating that in certain places.

2476   But I am going to pass it to my colleagues to help you understand a bit why we are doing the best we can in managing LPIF-centred stations, as well as non-LPIF-centred stations.

2477   M. LALANDE : C'est comme être dans un magasin de porcelaine. On a toujours une délicate balance à offrir.

2478   Juste rappeler deux éléments.

2479   Dans les dernières années, dans les cinq dernières années, Radio-Canada a été confronté à deux périodes difficiles: celle qu'on vient de passer qui a été annoncée il y a deux semaines et une période, il y a trois ans, où on a eu des manques à gagner ou des coupures assez importantes.

2480   Dans les deux cas, 80 pour cent des coupures ont été effectuées au niveau du réseau et 20 pour cent au niveau des régions dans les deux occasions.

2481   Ce qui démontre qu'au niveau de la balance de respecter nos engagements, c'est ce qu'on fait quotidiennement, s'assurer de maintenir une balance qui est équitable en fonction du mandat et d'assurer notre présence partout.

2482   CONSEILLER PENTEFOUNTAS : C'est la question... c'est la réponse que je cherchais à ma question, Monsieur Lalande. Merci.

2483   Voulez-vous rajouter quelque chose, Monsieur Guiton? Puis après ça, on va céder la parole à d'autres?

2484   M. GUITON : Non, non. Merci beaucoup. C'est juste que je m'excuse pour avoir... pas passé à Louis tout de suite pour la réponse.

2485   Merci.

2486   THE CHAIRPERSON: Thank you, and good morning. I think we all have a couple of questions to ask you; let me start.

2487   I heard a lot about advertising revenue, and you just talked about it again with the Vice-Chair. I don't know if you listened to some of the discussion yesterday, but it is my opinion -- and I will leave it to be my opinion -- that the reason LPIF was created was as revenue augmentation, because of fragmentation in the market, and because the economic recession that we had in 2009 sort of added to that.

2488   So the whole issue was: if the market was robust, and revenues were growing, there wouldn't be a need for this.

2489   The issue of providing more cost offsets in order to promote more local, and everything else, as well, is a by-product of the fact that the revenues haven't been growing.

2490   So, to me, it is all driven by revenues and business opportunity.

2491   The basic question I have is -- and I think, Ms Stewart, you mentioned the fact that revenues haven't recovered in the last three or four years. Can you share with us what your advertising revenues have been over the last four years, pre-LPIF and post-LPIF?

2492   Also, you just completed your five-year plan, which your Board approved, as well. Can you share with us the revenue forecasts that you have for the next five years?

2493   I don't need it now, obviously.

2494   MR. GUITON: Right. We would be glad to provide you with that.

2495   I would only add that we do know a couple of facts, in terms of our revenue. As Kirstine was saying earlier, our revenues in 2011 were only just back to the 2008 levels. In real terms they are down.

2496   And when you look at the period that the Commission was looking at when it established the LPIF, the last ten years, the last decade or so, over that period our advertising revenues for the whole company were down, in real terms, by 11 percent.

2497   But we would be happy to provide you with a more detailed, year-by-year, picture.

Undertaking

2498   THE CHAIRPERSON: Okay. Now, if you can do that, can you also do the next step; that is, break it down between local advertising revenue and national advertising revenue?

2499   MR. GUITON: Yes.

Undertaking

2500   THE CHAIRPERSON: And can you also break it down by market?

2501   MR. GUITON: Yes.

Undertaking

2502   THE CHAIRPERSON: Okay. Because that will give us an indication -- particularly with the discussion that you had with the Vice-Chair a minute ago -- about the major markets versus the smaller markets; and if you deflect investment into the regional markets and offset the major markets, as well, what would that do to your revenues.

2503   So having an indication of what the revenues are in the major markets would be beneficial, as well.

2504   MR. GUITON: Mr. Chairman, I just want to confirm exactly what we are finding for you. It is, for every one of our 27 stations, both non-LPIF and LPIF, national/local advertising for every of the past six years?

2505   THE CHAIRPERSON: Go back to two years prior to --

2506   MR. GUITON: 2007?

2507   THE CHAIRPERSON: 2006, 2007. If you have 2006, great; if not, I will take 2007.

2508   MR. GUITON: Okay. Thank you.

2509   THE CHAIRPERSON: So `07 and `08 and forward, to the five-year plan that you already have.

2510   That would be very beneficial for me.

2511   MR. GUITON: I'm sorry, do you mean forward as in forecasts into the future?

2512   THE CHAIRPERSON: Yes, the projections that you have as part of your five-year plan.

2513   MR. GUITON: We do have projections, but I am not sure that they are broken down by market, nor by local/national.

2514   THE CHAIRPERSON: Okay. We will see what you have. If you any more we will take what you have.

2515   MR. GUITON: Thank you.

2516   THE CHAIRPERSON: I don't want you to necessarily do any extra work at this point in time.

2517   My second question is something again you touched on earlier. One of you said that LPIF has allowed stations to stay open and I think you, Mr. Guiton, said if LPIF is modified in any way and if we take $40 million out of the regional markets we can't replace it.

2518   So my question is, first of all, what do you do in the way of evaluating your business before you make a strategic decision? I think I heard you say you have never closed a market, but what are the things you do before you make the ultimate decision to reduce viewership?

2519   I guess my second question, just part of that, is: What is your contingency? I'm sure before you came in here you thought about what happens if the CRTC modifies the LPIF program that's out there today, what would you do?

2520   MR. GUITON: So in terms of your first question I'm going to pass off to my colleagues.

2521   In terms of your second question, in terms of a contingency plan, we know that we don't have -- depending on how quickly -- if you were to change the LPIF in any means, reduce it in size or get rid of it in total, it would depend for us on how quickly you did that and by how much you did that.

2522   So if the LPIF does sadly go away immediately, we would immediately have to reduce -- of course you would see it in hours, we would have to reduce the hours, we would have to cut back on expenditures. For all the things that we have now managed to do through LPIF, those would have to roll back.

2523   But I would only say that the way we would do that would depend. It would be a function of how quickly you rolled back the LPIF and by how much. We wouldn't necessarily -- well, we just have to have a strategic look at it and see how we would do it and which markets and at what speed, et cetera, and in what way. Would it be the non-news first, the news second? We would just have to look at the whole thing together.

2524   THE CHAIRPERSON: You have heard -- and I'm sure you have read -- some of the various scenarios that have been put forward about reducing it, about transitioning it out, about keeping it alive as well. Obviously keeping it alive, you have your business plan going forward.

2525   Can you, as part of an undertaking, provide us with -- I will give you three scenarios.

2526   One of them is a three year transition to the end of the LPIF program;

2527   One of them is a flash cut cancellation of the LPIF program; and

2528   One of them is a reduction by 50 percent in the LPIF program.

2529   MR. GUITON: A flash cut would be effective what date?

2530   THE CHAIRPERSON: The end of -- September 1, 2012.

2531   MR. GUITON: Certainly we can do those.

Undertaking

2532   THE CHAIRPERSON: Okay.

2533   My last question, it's something that you actually put into your submissions when you filed, it was with regard to supporting Shaw Media's request to include English-language stations in Montreal in linguistic markets.

2534   I will caveat it, because I'm sure the Shaw folks are listening, their first priority is to not have an LPIF so I want to make that clear as well. I'm not accepting the fact that they are taking this as their position, but you said you support it as well. Perhaps you have had a chance to digest the Commission's official languages submission as well.

2535   Can you let us know what your views are with regard to modifying the eligibility to include Montreal English language?

2536   MR. GUITON: Well, certainly we would support that, as we said in our submission.

2537   But are you asking what exactly we would do in those markets -- in that market?

2538   THE CHAIRPERSON: What you would do and how would it impact your operations, yes.

2539   MR. GUITON: Okay.

2540   MS WILSON: Well, the first thing we do is we do what we tend to do whenever we expand in a market, which is we would go to the people who are in the market who might be interested in using the service and find out from them what it is they would need from us. So that's number one. What are the holes in terms of the coverage that they are currently getting now that they would want.

2541   The kinds of things that we would look for would be things like more feet on the street so we could do more in-depth journalism. We might look at expanding, for example, into areas that are currently outside of Montreal where Anglophones live.

2542   If you are interested in more information I can ask Liz, who is involved in news, to provide more detail.

2543   THE CHAIRPERSON: Yes, please.

2544   MS HUGHES: So Christine is right, we have only one reporter in our Quebec English operation who is outside of Montreal and that's our Assembly reporter in Quebec City. We would try to put more reporters, as she says, into the Anglophone community.

2545   Our Montreal newsroom is not a huge newsroom with a very large territory to cover, so more feet on the street, more reporters, more cameramen would be a wonderful thing and would really enhance the service to the viewers in the city and in the province.

2546   THE CHAIRPERSON: Have you been able to quantify what the impact on your overall LPIF allocation would be if in fact English-language Montreal was added in?

2547   MR. GUITON: No.

2548   THE CHAIRPERSON: Do you know if it would be a net benefit to CBC or a net cost, given their reallocation and the fact that there are other Montreal stations that are English-language as well?

2549   MR. GUITON: So we haven't done that exercise, but actually it raises a very good point. The amount of money that any one broadcaster received through the LPIF for the purposes of enhancing their local programming depends of course on what other broadcasters are doing. So to the extent that others are not investing in local programming and we are, that looks good for us.

2550   So if the LPIF goes forward and some of the broadcasters who in the past little while haven't been doing a good job investing in local programming decide to invest in local programming, we would get less as a proportion.

2551   So it's a moving target. It would be hard for us to -- we would have to make some assumptions about what the other broadcasters are doing in order to arrive at the answer to that question.

2552   THE CHAIRPERSON: Okay. Thank you.

2553   Those are my questions. I will pass you on to Louise Poirier.

2554   COMMISSIONER POIRIER: Thank you, Mr. Chair. Merci.

2555   I will start from a specific question and then I will move on to maybe a general question.

2556   I had the pleasure to read the Canadian Media Guild report and they mentioned that Yellowknife is not included in CBC reports to the Commission on the LPIF.

2557   Is that right and what have you been doing in Yellowknife?

2558   MR. GUITON: I think I'm going to pass to Christine, but just to be clear, the reason why Yellowknife was not included from the get-go is that it was not classified as a station. It's an old establishment, we have been doing programming there for a very long time, it has been doing a lot of good stuff, but it had a particular administrative anomaly, that it was called a --

2559   MS KIRSHENBLATT: It wasn't a conventional licensed station, it wasn't eligible until 2011 so our first report was for the last year covering the six month period in which the Commission determined it was eligible.

2560   So the short answer is, we have been filing LPIF reports for Yellowknife as long as it has been eligible for LPIF funding.

2561   COMMISSIONER POIRIER: What have you been doing there exactly?

2562   MS KIRSHENBLATT: I'm going to pass that to --

2563   COMMISSIONER POIRIER: Make it short, please, though.

2564   MS WILSON: We do a 60-minute newscast there every night, plus there is a 30-minute aboriginal language cast as well.

2565   COMMISSIONER POIRIER: Okay. And it's because of the LPIF?

2566   MS WILSON: LPIF contributes to that, absolutely.

2567   COMMISSIONER POIRIER: Okay. Thank you.

2568   Merci.

2569   Concernant le sondage, maintenant, qui a été fait, je me demandais si lorsque vous avez sondé les gens vous leur avez demandé s'ils préféraient avoir des nouvelles locales, de la vraie nouvelle, ou s'ils souhaitaient aussi inclure de la programmation plus générale traitant de d'autres sujets que la nouvelle.

2570   M. GUITON : En termes de nos... On avait deux sortes de recherches devant vous qu'on a déposés. Un, c'était, comme je l'ai expliqué avant, le « focus group ». Et en termes de « focus group », on avait identifié seulement les nouvelles. Mais on a fait ça par exprès parce qu'on voulait avoir un standard de discussion entre tous les gens, dans chaque ville.

2571   Alors, on a décidé d'identifier « nouvelles » pour que tout le monde, ça soit très clair dans leur tête de quoi on parle, au lieu de dire « les documentaires » ou « quelque chose de local ». Peut-être ils ne savaient pas qu'est-ce que ça veut dire.

2572   Mais vous aviez une deuxième question... J'ai oublié, excusez-moi.

2573   CONSEILLÈRE POIRIER : Oui. Bien, ma question est de savoir si, dans l'intérêt de vos auditeurs, vous considérez important de garder dans le FAPL l'inclusion autant de nouvelles que de reportages d'intérêt général qui sont de la programmation locale.

2574   M. LALANDE : Oui, tout à fait. C'est important.

2575   Je vais vous rappeler une chose. Lors de l'introduction du FAPL, moi, j'ai fait quelques tournées dans certaines régions. Je me rappelle très bien d'une rencontre où j'avais invité une quinzaine de représentants de la communauté francophone du Manitoba à Winnipeg.

2576   Et, bien sûr, la première chose que les gens souhaitaient, que la communauté souhaitait, c'était une amélioration du service d'information (donc, le fameux sept jours), mais rapidement, on est tombé sur l'ensemble des autres possibilités de programmation, qui étaient absolument importantes pour la communauté, afin de mieux refléter, dans le fond, l'ensemble des dimensions dans lesquelles ils vivent. Donc, d'améliorer les programmations autres que nouvelles, programmation culturelle, programmation sociale, vraiment, d'être... vraiment, de profiter de toutes les occasions pour refléter la fibre particulière de la communauté francophone du Manitoba.

2577   Et j'ai fait le même exercice aussi en Acadie. Alors, ça a donné aussi des petits, ce qui a fait qu'on a élargi et diversifié notre programmation.

2578   MME WILSON : Les gens nous disent aussi que même dans chacune de nos stations, chacune de nos régions, les communautés, les auditeurs, les téléspectateurs s'attendent à avoir la même variété de programmation, la même diversité de programmation locale que ce qu'ils peuvent percevoir au réseau, avec ses particularités et ses propres attraits.

2579   CONSEILLÈRE POIRIER : Parfait.

2580   Alors, si on veut revenir à l'essence du fonds... Au début, on visait l'augmentation de la production locale, et dans votre mémoire, je pense que vous parlez d'un critère qui serait d'augmenter d'une heure, par rapport aux conditions de licence de base de chacun des récipiendaires du FAPL.

2581   Hier, on sait que Bell nous a dit « Un des critères, ça devrait être les cotes d'écoute. » J'aimerais, dans un premier temps, que vous nous disiez ce que vous pensez de la proposition de Bell sur les cotes d'écoute et, dans un deuxième temps, que vous expliquiez brièvement pourquoi vous souhaitez qu'on augmente d'une heure, par rapport aux conditions de licence, la programmation locale.

2582   M. GUITON : Merci beaucoup, j'ai bien compris.

2583   Je vais commencer avec la proposition de Bell. Et puis, on n'est pas complètement d'accord, mais on n'est pas d'accord du tout avec leur proposition pour les raisons suivantes...

2584   Et si ça ne vous dérange pas, je vais changer en anglais, pour être sûr que ...

2585   COMMISSIONER POIRIER: No problem.

2586   MR. GUITON: The reason we have some problems with it is that it's kind of sold to you as an efficiency model and a viewership model, and we don't think that's what it is at all. I'll explain to you why, if I could.

2587   First of all, I should also say that a similar population model, it's really a population model and the population model that the Commission looked at before and was rejected by the Commission before. So the problems with it are the following.

2588   If there's only one broadcaster in the marketplace and a large number of output stations have that problem, it's not a viewership model at all because there's no comparison of viewing with anyone else. No matter what your viewership is, you're going to get all the money based on population. It's a population model. That's our first problem.

2589   The second problem we have is that for small markets, and particularly minority markets, we don't have a good measure of viewership in those markets, as you know. The other problem is, of course, that for those minority markets, the francophone population or the anglophone population in those minority markets are very small so, to begin with, if you're measuring on that basis the population, you're dealing with very, very small populations and the amount of money that would be allocated to those markets is miniscule.

2590   For example, in Regina the francophone population in Regina as a percentage of the total eligible LPIF francophone market is, I believe, .15 per cent. That amounts for that market to about $50,000.So if you go that kind of a route, you're effectively saying you're not going to be supporting minority markets through the LPIF.

2591   The third thing I would point out on this is, in terms of efficiency, the logical conclusion of that is that it's only an efficiency model when there's more than one broadcaster, so then you're comparing viewership. But in that case our argument would be that that's the same thing, you get the same efficiency, benefits or incentives as you do under your current system of expenditures. If you've got two broadcasters in the marketplace and they're both eligible for expenditure based LPIF funding, of course they want to do the best that they can, because they want to have a good product, they want always, to praise the vice-chairman's words, competing with each other, providing different options and helping the community see different things.

2592   In our view, it amounts to expenditure or viewership being both the same in those cases and they have the same efficiencies. But the problem with the Bell proposal, and I'll just go back to the single broadcaster markets, what happens with the money? Do you get rewarded for investing in local programming? What do you do with the money? What incentives do you have to actually do more? You're going to get the money either way.

2593   We don't know if there's an expenditure reporting requirement with that model. We don't know. I haven't seen the details of that model, but to our mind it's not an efficiency model, no more so than the current expenditure model and it does lead to the conclusion that you don't want to support monetary markets through the LPIF.

2594   COMMISSIONER POIRIER: Okay. But if we decide that we keep the LPIF, don't you agree that we need to improve the criteria we are using and the efficiency of the LPIF?

2595   MR. GUITON: Well, as I was just saying, I think in terms of the multiple broadcaster model, the expenditure based criteria works just fine. People have an incentive to use it. And the way you've set it up is incentive-based. You're basing it on expenditures.

2596   The more you spend in local programming, the more you're going to receive through the LPIF. That's the incentive. If you want to spend money in local programming to improve the quality of your local program or the hours, you're going to be rewarded.

2597   I know you wanted us to be brief, Madame Poirier, but I'd just like to say one thing. There was a curious statistic raised to you yesterday from Shaw about the fact that we seem to be getting more than our share of the growth in the LPIF. Well, there's a good reason for that: We're using the money for local programming, and a good chunk of the industry is not.

2598   The way the LPIF works, if you invest in local programming, you're rewarded. If Shaw and every other broadcaster had invested the same way we have, which is taking all that money and trying to put it back in, the proportions wouldn't have changed from the beginning. Nothing would have changed, because you're rewarded by how much you invest vis-à-vis proportionally what everyone else is investing. So the only reason we're getting more than they're getting over time is that they are not investing.

2599   CONSEILLÈRE POIRIER : Et c'est très bien que vous ameniez ça, parc que ça mène à mon avant-dernière question, monsieur le Président.

2600   Justement, plusieurs de parties disent que vous avez la plus grosse part du gâteau, que vous recevez beaucoup d'argent et que par la nature même de votre service, vous êtes partout, vous servez les communautés linguistiques minoritaires, donc, c'est facile pour vous de dépenser plus et de faire en sorte que vous allez en chercher encore plus dans le LPIF.

2601   À ce moment-là, est-ce qu'il ne serait pas raisonnable à un moment donné de mettre une sorte de plafond pour faire en sorte de dire que Radio-Canada, oui, par la nature de son service, va chercher de l'argent, mais puisqu'il est celui qui pourra en profiter le plus quoi qu'il arrive, parce que c'est lui qui dessert le plus le marché local, un plafond ne serait pas à un moment donné une limite à fixer à Radio-Canada pour éviter que ça continue à augmenter la part du gâteau que vous allez chercher?

2602   MR. GUITON: I will begin this if I could et encore une fois je m'excuse, parce que je m'exprime mieux en anglais.

2603   I think there are two things going on here when people have that argument. First, the argument is that CBC is getting more because their costs are bigger. As both Kirstine and Louis have explained, we invest a lot in local programming. In news programming, we pride ourselves on perhaps a higher cost type of programming. We're getting people into the markets. We're doing a lot of non-news programming that's high quality. Well, in order to do that stuff, it costs more, and we're not apologetic about it.

2604   We believe we're spending the money to provide programming that people want. It may be different, it may not be the cheapest. I don't think an objective of the LPIF is that everybody do cookie-cutter, cheapest programming in order to get money.

2605   We're starting, even from before the LPIF. Yes, we had large stations, expensive stations, doing very expensive products. Once the LPIF started, any changes in that proportion were not related to anything we've done necessarily. It's, as I said before, what has everyone else done? If everyone else had invested their LPIF money to produce more and better programming, nothing would have changed from the beginning of the fund.

2606   COMMISSIONER POIRIER: So you wouldn't be supportive of a ceiling for CBC?

2607   MR. GUITON: We definitely would not be supportive.

2608   COMMISSIONER POIRIER: Okay.

2609   MR. GUITON: Because I think you would lose the incentive aspect of what I just explained.

2610   COMMISSIONER POIRIER: Okay. My last question: What would happen to CBC and SRC if CBC and SRC were excluded from the LPIF?

2611   MR. GUITON: As we explained to the Chairman, certainly financially we can't replace the LPIF money if it were to go away, so we would have to take -- whatever amount you took away from us, we would have to take that out of our program expenditure. How would that manifest itself would depend on the amount and over time how quickly you did it.

2612   COMMISSIONER POIRIER: Would it go as far as closing some stations that you've opened because of the LPIF money, mostly in the east, in Quebec? Would it go that far?

2613   M. LALANDE : Moi, je vous dirais, vous avez le rapport de tout ce qui a été fait par FAPL, prenez-le et mettez-le aux poubelles. C'est ça.

2614   CONSEILLÈRE POIRIER : Mettez-le et ...?

2615   M. LALANDE : Mettez-le aux poubelles. Ces choses-là vont disparaître.

2616   CONSEILLÈRE POIRIER : Okay. Et l'ouverture de stations, ça irait jusque là? Vous allez vers Rimouski, vous avez modifié au Saguenay ...

2617   M. LALANDE : Comme j'ai dit, souvent, Radio-Canada doit être présent dans les régions, va continuer à l'être quelle que soit sa situation financière. Ce que je dis est que le FAPL nous a permis d'avoir une couverture diversifiée de très grande qualité qui reflète les intérêts et les enjeux locaux de chacune des régions dans lesquelles nous sommes présents et ce, de façon constante, en augmentant le nombre d'heures.

2618   Ça, c'est le résultat net du FAPL au niveau de l'augmentation, le la diversité et de la qualité de la programmation.

2619   S'il n'y a plus de FAPL, il va y avoir moins de qualité, il va y avoir moins de quantité, il va y avoir moins de diversité. Le rapport qu'on a déposé démontre clairement les bénéfices qui ont été apportés à l'ensemble du système et à l'ensemble des téléspectateurs à travers le pays dans les stations régionales. Enlevez ça, vous enlevez ces bénéfices-là.

2620   CONSEILLÈRE POIRIER : Merci, monsieur le Président.

2621   THE CHAIRPERSON: As I indicated to the Shaw group yesterday, you as well are a very popular intervenor. A lot of commissioners want to ask questions.

2622   We will take a 10-minute break at this time. Thank you.

2623   MR. GUITON: Thank you.

--- Upon recessing at 1022

--- Upon resuming at 1036

2624   THE CHAIRPERSON: Okay, we will resume and we will move on to Commissioner Patrone.

2625   COMMISSIONER PATRONE: Thank you, Mr. Chairman, and good morning.

2626   I just have one or maybe two questions regarding your presentation today specifically having to do with your spending priorities, because I did note that you told the Vice-Chairman that if we take $40 million out of the LPIF you don't have $40 million to replace it, right, meaning that that money is gone full stop; is that right?

2627   MR. GUITON: Yeah. As we said, the $40 million has allowed us to do more local programming and better local programming. If the $40 million goes away we don't have another 40 somewhere that we can replace it.

2628   COMMISSIONER PATRONE: You are currently spending presumably millions of dollars on services outside of the regulated system, is that right, like a music downloading system that you launched recently. You spend millions more on foreign programming.

2629   I guess my question is, if you have money for American game shows why do you need another hand out to do a news coverage of, say, flooding in Manitoba?

2630   MR. GUITON: So I'll start and then perhaps Kirstine can jump in a little bit with the strategy in terms of the game shows.

2631   The Commission released some information last week, not as part of the LPIF but I mean just financial information that you released as part of your regular financials.

2632   What you noted in those releases was a release for all conventional broadcasters. You noted that we spent last year in our conventional television business $760 million on programming. 95 percent of that you also noted was on Canadian programming.

2633   That amount of Canadian programming, $720 million or $730 whatever the calculation is, is $200 million more than the entire private conventional industry spends on Canadian programming. So we think we have got our priorities right.

2634   But in terms of how we use the game show that you're referring to in order to leverage viewership to more Canadian programming I'm going to pass to Kirstine, please.

2635   MS STEWART: Well, as the Commission knows, there has always been an allotment for foreign programming within our condition of licence. We have actually been grinding down that amount. We report well under that amount currently. I'll pass to Christine for more information.

2636   But the judicious use of foreign programming actually is something that we have been scrutinizing quite heavily and we can see that in our Strategy 2015 document where we have been prioritizing Canadian programming first. We know that when we make Canadian programming and the way that we make it whether with our own talent or whether we do it in partnership with --

2637   COMMISSIONER PATRONE: Where do the game shows -- where does foreign programming and foreign dramas and movies, where does that fit into your prioritizing of Canadian programming?

2638   MS STEWART: It can be in support of it but that's why it's actually been diminished. It has diminished over time and, in fact, our licence ends with those particular game shows next year and they are not being replaced by foreign programming.

2639   COMMISSIONER PATRONE: My problem is that you're still spending money outside the system. You're spending money on unregulated services, music downloading services, foreign programming.

2640   Just help me understand how it is that you can now appear before us with your hand out saying, "We need more money so we can do more local programming" and, yet, you have tens of millions of dollars to spend elsewhere. Help me understand that.

2641   MR. GUITON: So, first of all, we were included in the LPIF to benefit Canadian viewers. When we are talking about a hand out, we don't take the LPIF money and we don't put it in our pockets. It goes to provide viewership -- sorry, better quality programming.

2642   COMMISSIONER PATRONE: I am not saying you're putting it in your pocket. I mean, you may very well be spending it on local --

2643   MR. GUITON: No, but the only reason I'm saying that, Commissioner Patrone, is that when you say we have got out hand out looking for LPIF money, if you decide to take the LPIF money away from us, yeah, we wouldn't like that. But the real harm would be to Canadian viewers.

2644   Let's be clear. We are going to do less. That's the problem.

2645   Now, in terms of the idea, well, that we are spending a lot more money doing other things, currently our -- and you referenced our music online services -- we're trying to get -- that's the goal of our five year plan, to get our digital spending up to 5 percent. In today's world that's not very much given what a media company needs to be doing online. And most of what those people are getting in our online services is Canadian programming.

2646   So the fact that it's outside the regulated system actually that's the way the media are going. We are keeping up with that. Canadians go there. They want to see and hear Canadian music, Canadian videos. We put them up there for them and it's only -- you know our goal is to go to 5 percent. We're not at 5 percent yet but we hope to be by the end of the five year plan.

2647   We don't know if that's something that the Commission would tell us not to do but we certainly know that as part of our mandate we have to be where Canadians are, and that's where Canadians are.

2648   COMMISSIONER PATRONE: But my question was about priorities, Mr. Guiton, right? At the end of the day if you lose that $40 million in LPIF what suffers is not the music downloading service. What suffers is not, you know, money you're spending on foreign programming. What suffers is local programming.

2649   You are unique among the conventionals because you're getting parliamentary appropriation of over a billion dollars a year. They are not getting that. So help me to understand why we should continue this Fund in light of what I have just said.

2650   MR. GUITON: So I will return to what I was saying to the Vice-Chairman.

2651   We have to balance our priorities. We do have a priority for local programming. We do have a priority for drama. We do have a priority for kids. We do have a priority for lots of different programming and we try to meet that the best we can.

2652   And prior to the establishment of the LPIF those priorities led us to do the local programming levels and quality that we were doing. It was the best we could do with the money that we had.

2653   It didn't mean that we weren't putting in local as a priority. We were. But to give more to local would have been to sacrifice something else. And as a public broadcaster with a broad mandate to inform, enlighten and entertain we have got to do a broad range of programming.

2654   COMMISSIONER PATRONE: So you would rather spend money on game shows than you would covering local news.

2655   MS WILSON: Sorry. Could I speak specifically to game shows because I know there is a lot of misunderstanding about that?

2656   COMMISSIONER PATRONE: I guess there is.

2657   MS WILSON: Thank you.

2658   The role of foreign programming in our schedule, and specifically the game shows, was to support Canadian programming. That foreign programming makes money.

2659   The reason we would be interested in buying it was because it would have a positive margin associated with it that would help out other shows beyond any kind of margin. And that would be, you know, one of the reasons why we would pick up foreign programming.

2660   The other one is, is because we were launching when we picked up Wheel of Fortune and Jeopardy, which is what you're referring to, we were launching a whole new list of Canadian programs at eight o'clock and we had no mechanisms to promote them.

2661   So what we were looking for was we were looking for a regular way to bring a million people a night into our schedule between seven and eight o'clock that we could say, hey, guess what's coming up at eight o'clock? Rick Mercer is coming up. Hey, guess what's coming up. Mosque is coming up. Hey, guess what's coming up? Nature Things is coming up.

2662   COMMISSIONER PATRONE: Fair enough. You're talking about advertising and you're saying it is revenue positive, is what you're saying.

2663   MS WILSON: And we increased -- and it is audience positive for our Canadian programs. We increased the audience to those Canadian programs we estimate by 20 percent because of the lead-in that was offered to them from those game shows.

2664   Now, we are happy to say that our Canadian programs now have grown. They are on their own two feet now. We don't need American game shows to support them at eight o'clock so we're not going to be renewing those particular contracts.

2665   COMMISSIONER PATRONE: But your local news programs those are not on their own feet.

2666   MS WILSON: Correct.

2667   COMMISSIONER PATRONE: I am slightly confused.

2668   MS WILSON: If by on their own feet -- if by on their --

2669   COMMISSIONER PATRONE: Fair enough. Is the downloading service, is that revenue positive? Is that generating revenues for you or is that free?

2670   MS STEWART: As Steve had explained, the spend that we do in digital is an investment into the future of broadcasting.

2671   We know that other public broadcasters around the world including BBC, PBS have a marker of about 5 to 10 percent of their overall budget spend on digital programming. Something like our music service is one of them.

2672   And the interesting thing about the music service in light of the conversation around local today, it isn't obviously -- it can't access the LPIF funding nor does it, nor are we suggesting that it should. But the interesting part of the service that we provide through the music downloading is there is a lot of local music that has actually been uploaded into that system which is now available to Canadians all across the country.

2673   It is a huge supporter. When there was an outcry about whether we should be doing this from certain competitors. It's actually the people who came with their comments and said if it weren't for this I wouldn't have heard this music from this other place in Canada.

2674   So it's in support of the larger --

2675   THE CHAIRPERSON: I am going to interrupt because this is a discussion for a different time. There is an application before the Commission and this is not the place to argue that issue, please.

2676   COMMISSIONER PATRONE: Well, with respect, Mr. Chairman, I was just asking about their funding priorities which I think is a subject for this.

2677   But I'm satisfied with the answer. Thank you.

2678   THE CHAIRPERSON: Thank you.

2679   We will proceed with Commissioner Molnar.

2680   COMMISSIONER MOLNAR: Good morning. I have to take those off.

2681   I want to begin by saying that from my perspective I think that you folks have done a good job in spending the money that you were allocated in the spirit of the initial Decision that came out. So my question isn't about how you spent the money or whether, you know, you met the objectives that were initially established.

2682   But I was struck by the fact that you said that you spent $15 million to make $1 million in additional revenue which says to me that ultimately this would be a subsidy with no end. If we wanted to continue to deliver the amount of local programming that you have it will always require a subsidy.

2683   And I note in your comments you address some of the statements that were made yesterday as it regards different arguments including the argument of efficiency and that in fact this subsidy does not inhibit efficiency or that efficiencies can occur even within the subsidy as it is set up today.

2684   But one of the other comments made yesterday was that it does inhibit as most subsidies. Subsidies distort the natural evolutions and you want to ensure that it's in the public benefit to make those distortions. One of the statements made yesterday, one of the arguments was that it distorts and it inhibits innovation and investments.

2685   There was a statement by Shaw, for example, that they would have an interest in doing local programming but on different platforms, whether it's you know over-the-top platforms, whether it's specialty or others, but it's not simply conventional television. And this fund, as it is established right now, supports conventional television, and what I am hearing here is that it should continue to support conventional television forever after, as the platform for this local programming, which is a little bit concerning, because I think there is a danger that what we are doing is, we are, in fact, distorting the natural evolution of how local programming might naturally occur in the future.

2686   You just had a little bit of a conversation about your move to new platforms, and I would like your thoughts on whether, as this fund is designed, there is a danger that what we are doing is that we are inhibiting the natural evolution.

2687   MR. GUITON: Thank you very much. I guess there are a couple of questions there. In our view, you are asking how long should this fund last.

2688   I think that local programming continues to be a priority for the system, so that is certainly important.

2689   There is certainly a market failure in the system, so that's out there.

2690   So as long as those two things are there, we see the fund going along.

2691   In terms of how --

2692   COMMISSIONER MOLNAR: But let me just clarify my question --

2693   MR. GUITON: Yes, I am going to get to the evolution part.

2694   COMMISSIONER MOLNAR: There is a market failure in the delivery of programming on conventional television.

2695   MR. GUITON: Yes, you are absolutely right. I was just going to get there, sorry.

2696   When we looked at our research and we talked to people about whether local TV, conventional TV programming, was important to them, what we saw was that, currently, they say, "Yes, it is."

2697   And in the LPIF markets, for the supper-hour news, 50 percent of the viewing public is watching conventional TV right now. That is the current kind of technology that we have right now.

2698   But you are right, it may evolve over time. As it does, then I think that maybe what will happen, when you say that you will keep this fund going and do another three-year review, is that you may start to see that local conventional TV, just the standalone thing that you are describing, isn't as important to people as it once was, and it is becoming more of a digital or hybrid offer, at which point we could see you changing the rules somewhat.

2699   But, currently, based on the evidence that we have from our survey, based on the evidence that we have seen in terms of the impact that our investments have had, in terms of improving reach, as Kirstine was talking about before -- certainly it is valuable right now, and what we are working with is today.

2700   Definitely it has been useful. Can it evolve in the future? Absolutely, and we would expect the Commission to adapt.

2701   MS STEWART: I think, too, it's important to remember that the talents and the skills that go into journalism are something that we have invested in in each of the smaller communities. That talent and skill is a transferable skill. It is one right now that is being used in the conventional form. That is how they do the news gathering, and we know that, in the future, as things start to evolve into different forms of distribution of news, the gathering of news and the investment in understanding the journalism behind how to do that properly and best, it still comes from the same base.

2702   So that investment that we are now imparting across the country into these different towns and communities is actually a good way to support the future into evolving platforms.

2703   COMMISSIONER MOLNAR: I have just one follow-up, because what troubles me is that you say that in three years we will review and see if there has been an evolution in audiences, but aren't we distorting the potential evolution of audiences by targeting this money to a specific platform?

2704   If we put all of the money into having this local programming on conventional television, two years from now, three years from now, you are going to come forward and say, "Fifty percent of our audience is still watching conventional --" well, because we have artificially put the money there to support it on that platform.

2705   That is my concern, that we are not allowing audiences and markets to evolve as they should by having this targeted this way.

2706   MS STEWART: I think, to the point of the question that was asked earlier about the money that we spend in unregulated areas, a good example of that in our digital area is Hamilton.

2707   Hamilton is a centre over which we now have invested in a digital news platform. So the lack of an LPIF fund in that area didn't stop us from deciding that there was an important priority to innovate, and actually it is now going to be the model for a number of communities across the country, which we might not have been able to serve if it weren't for the digital platform and the way in which we are doing it in Hamilton.

2708   So the two do coexist, and I think that it would be short-sighted to think that, because you are supporting something that is traditional and which a number of the audiences still depend on, that in any way limits your opportunity to, as we have, invest in something like Hamilton, which is quite innovative, and I think it will be something that will be a marker for the rest of the country.

2709   MR. LALANDE: I just want to point out to you that the investment is in the community. Okay? It encourages journalists, technicians, artists, outside productions companies, and it really has an economic impact on the community.

2710   The investment is in the community, it is not anywhere else but the community.

2711   COMMISSIONER MOLNAR: I understand that.

2712   I just have one follow-up, and then I will pass it on to the other Commissioners.

2713   You just used Hamilton as an example of where there is not LPIF funding available, so you have moved to an alternate platform, and you are delivering local programming, news and other local programming, on an alternate platform.

2714   So if LPIF were removed, would you see using that strategy in other communities?

2715   MS STEWART: Hamilton is a special case, because we face the challenge not only of how do we expand into new markets, but how do we expand into a market where frequencies are not available.

2716   I know that the Hamilton market would have preferred if we had invested in a traditional radio frequency, for example. One was not available to us, so this was our alternative.

2717   I think, again, that you have to strike a balance between what you do to support traditional means of news consumption -- which is still a basic form that a lot of communities across the country depend on.

2718   There are, obviously, differences in the distribution and availability of bandwidth in other areas that we have to be very cautious of.

2719   I think that the opportunity to go into digital is important, but it could not be the only way by which you would distribute news and reach the number of Canadians that we are expected to reach right now.

2720   THE CHAIRPERSON: Thank you.

2721   Commissioner Duncan...

2722   COMMISSIONER DUNCAN: Thank you, Mr. Chairman. I have just two questions.

2723   First of all, since Halifax was getting much mention yesterday, which is unusual, I just wanted to explore the numbers there a bit, and I did confirm that the 5.7 million that was mentioned was for the Halifax market, but you also received moneys for Fredericton and Moncton, Charlottetown, and Saint John's, but that is Atlantic Canada, so just speaking about the --

2724   Actually, I think you did, Mr. Guiton, refer to it as regional funding.

2725   So the 5.7 was for Halifax. Am I correct in that? And these others were in addition?

2726   MR. GUITON: I am going to pass you over to the experts on this.

2727   MS STEWART: In terms of Halifax, it is important to remember what Halifax is for us. It is, actually, a large production centre, which produces not only a large amount of news programming, but also non-news programming.

2728   So the number invested in Halifax alone is reflective of that. It has a longstanding legacy as a producer of great programming, both news and non-news, and I will pass it to Kirstine to talk about the different things that are made in that centre.

2729   MS WILSON: Commissioner Duncan, is there a particular area about Halifax that you wanted to explore, or a general --

2730   COMMISSIONER DUNCAN: No, actually, I simply wanted to confirm, because the 5.7 million sounded like a large number to start with.

2731   I was just wondering if that was for the whole region, and I have satisfied myself that it's not. But, then, Mr. Guiton this morning mentioned that it was a regional centre. But I guess you were just explaining, Ms Stewart, that that is because the production is intended for the region.

2732   So I think I am satisfied.

2733   MS WILSON: It's about fifty-fifty, non-news and news.

2734   COMMISSIONER DUNCAN: What I observe, I think, as do my fellow Commissioners, is that the money you have received you have spent, as intended, on programming. So, as Commissioner Molnar commented, I think that is certainly commendable, and we do see the results.

2735   I am just wondering, you started off by talking about how the fund evolved, and the Commission's observation that BDUs had been contributing 5 percent to the CMF, and that that hadn't changed, if my memory serves me correctly, since the mid-nineties perhaps, so the Commission decided that they could afford to spend another 1 percent. That was in the initial decision, and that's what you picked up on this morning.

2736   But the suggestion that the BDUs subsidize this is not really accurate, is it? Because, with the exception of Shaw, who says that they didn't pass the increase on -- although it's hard to say now, because the rates aren't regulated -- it's not the BDUs --

2737   I don't know that we have actually -- have we actually accomplished what we were after? It's the subscribers that are paying for this.

2738   MR. GUITON: I think that's right in all cases, whether it's on the bill or not. As you point out, the rates are deregulated for cable companies and DTH providers, so subscribers are paying for the CMF. Even though it's not on the bill, it's in the rate.

2739   COMMISSIONER DUNCAN: It's a cost and it's passed on.

2740   MR. GUITON: It's passed through somehow, and that's true for the LPIF, as well. It's a transfer from the BDUs' operations, basically, via subscribers, to a public policy goal.

2741   That's correct.

2742   COMMISSIONER DUNCAN: I think, when we first discussed it, the anticipation was that they could afford to give this away, but there was no giving away, it was an extra add-on, and then it was passed on.

2743   MR. GUITON: Okay. I think I understand where you are coming from now.

2744   My understanding of where the Commission came out on this, in terms of going up from 5 percent to 6 percent, was, in part, not just this notion of who is actually paying, but it was based on the profitability of the BDUs.

2745   So the idea was, given their profitability, given their large size, you originally decided that a 5 percent contribution was commensurate with that profitability. The profitability kept growing, the size kept growing -- they have operating margins of over 40 percent, which is quite spectacular -- and you thought, in terms of a benefit/contribution kind of argument, that there should be a bigger contribution made based on that profitability.

2746   COMMISSIONER DUNCAN: I think we are saying the same thing.

2747   MR. GUITON: Yes, I think we are, too, and I'm sorry --

2748   COMMISSIONER DUNCAN: I am just giving you an opportunity to reinforce that that is, in effect, what happened, consumers paid.

2749   MR. GUITON: Excuse me.

2750   COMMISSIONER DUNCAN: No, that's fine.

2751   Thank you very much, Mr. Chairman, those are my questions.

2752   THE CHAIRPERSON: Thank you.

2753   Commissioner Menzies...

2754   COMMISSIONER MENZIES: Thank you.

2755   I just want to touch on a couple of points that Commissioner Molnar raised.

2756   In 2008-100, the Commission estimated -- to be fair, the original idea was incremental spending, which you have done. Nobody else seemed very interested in it at the time and then it was amended in light of the recession to go to 1.5, et cetera, and it became a different type of fund. So that's probably where some of the confusion.

2757   In paragraph 364 of 2008-100 it said:

"The assumed impact would be a 46 percent increase in spending in local and French markets and 33 percent in English." (As read)

2758   The total in English, near as I can tell, was 4 percent, not 46, and the total in French is 17.8 percent, which is closer but sort of not there.

2759   Regardless of that, the whole idea behind this was to give people information, right? And so the first question is: How much of local programming costs are tied to bricks and mortar as opposed to strictly journalists when you assess your local programming costs?

2760   MR. GUITON: I'm going to ask Kirstine or Louis to help me out on that. I don't know if it's a number we have off the top of our head, but if we don't --

2761   COMMISSIONER MENZIES: You don't have to do it right now. I mean if you --

2762   MR. GUITON: Oh, okay. Sure.

2763   COMMISSIONER MENZIES: Because really what I'm trying to get to is -- I would like to hear back, and you don't have to answer right now -- because I share some of the concerns Commissioner Molnar pointed out.

2764   Because if information is what matters and you're going to subsidize something, it should be a way of subsidizing information and the flow of information to people, not necessarily parking lots or property taxes or those sorts of things.

2765   And I also have a concern -- and maybe you can address that.

2766   In 2008-100 it is noted that the reason the Commission desired incrementality was because spending on local news had been flat since 1998. Now, this is 2012 and without LPIF -- with the exception of you, without LPIF, or even with LPIF, it's still pretty flat.

2767   And I'm thinking that if people aren't putting money into something they don't think there's much of a future in it under its current structure. And if there isn't much of a future in it under its current structure, why would we subsidize that structure and not look at ways to stimulate innovation and help people develop new structures, as many of you are, outside of this?

2768   I'm looking for some feedback from you on how, if a fund were to continue, it might be actually helpful in building something for the future rather than sustaining something from the past that might be past its best-before date.

2769   MR. GUITON: If this is satisfactory to you, I think we would love to undertake to come back either in our final reply or through an undertaking to explain how we think the Fund could evolve or be made more modern, if that's what you're looking for.

2770   The only other point, I would mention on that, though, that -- which is a bit funny, I think. Yesterday we heard a lot of comments from even the Shaw panel, which says that the Fund should go away. At the same time they said that these small local stations are extremely important to them and they support local TV. They did say they were going to look at other technologies as well, but they supported local TV.

2771   So what's confusing a bit to us is that they seem to be saying that conventional TV is extremely important in small markets -- that's why they bought Global -- but they don't seem to have used the money to support that. In other words, they didn't take the LPIF money and support that goal.

2772   We have survey research that says people really value this. We think people really value this. We've heard from some of the BDUs/private conventionals that they think it's really important.

2773   So the Fund is serving certainly a good need and we would be happy to discuss with you in written format -- or put on a written format some ideas we have for how it could evolve, if that's what you're looking for.

Undertaking

2774   COMMISSIONER MENZIES: Sure. And I think we can agree that nobody is going to say that money is a bad idea.

2775   THE CHAIRPERSON: Can I suggest you do it as an undertaking so that other parties have an opportunity to reply?

2776   COMMISSIONER MENZIES: Thank you.

2777   The other thing is if the choice were to be to end the Fund, would it be better to do it quickly or slowly?

2778   MR. GUITON: Well, it would take some time to unwind. There's the unwinding of all that we've done. So that, I guess, would speak to slowing it.

2779   Of course, I don't want to sound like the Shaw panel reiterating it's not our position.

2780   COMMISSIONER MENZIES: Fair enough. Fair enough.

--- Laughter

2781   COMMISSIONER MENZIES: You can say, No comment, if you wish.

2782   MR. GUITON: No, but I -- look, let's be honest, if it's the Commission's goal to unwind the Fund, certainly we've made some commitments right now for the upcoming broadcast year, so that would be a problem for us if you took it away September 2012. So certainly we would like some time to unwind, no doubt about it.

2783   Are we talking two to three years? I don't have a particular view on that, but again, that's not our position.

2784   COMMISSIONER MENZIES: Thank you.

2785   THE CHAIRPERSON: Just to repeat, whatever you're going to file, do it as an undertaking so other parties have ample opportunity to reply to your proposals.

2786   MR. GUITON: Thank you.

2787   THE CHAIRPERSON: Okay.

2788   Commissioner Morin?

2789   CONSEILLER MORIN : Merci, Monsieur le Président.

2790   Évidemment, administrer, c'est toujours l'art du possible. Vous le savez mieux que nous peut-être, c'est de faire des choix. Si je prends mon exemple, en tout cas, je ne suis pas un programmeur, je suis un régulateur. C'est vous qui êtes les champions de la programmation. Ce n'est certainement pas moi.

2791   On est à la recherche d'un 40 millions de dollars dans l'éventualité où le Fonds pourrait être aboli.

2792   D'abord, j'aimerais vous demander quelques chiffres que j'aimerais que vous déposiez au dossier public.

2793   On n'a vos chiffres, comme vous le savez, que depuis 2009. Jusqu'à 2009, vous étiez très secrets. Contrairement à toutes les entreprises privées, on n'avait pas vos chiffres dans le détail. Et quand je regarde les chiffres qu'on a, on ne les a pas encore dans le détail.

2794   De 2009 à 2011, les revenus publicitaires qui étaient en péril, semble-t-il, avec la crise économique -- à laquelle monsieur Pentefountas faisait allusion un peu plus tôt et à laquelle vous avez répondu, vous-même -- vos revenus publicitaires étaient de 296 millions de dollars. Ils sont passés en 2010 à 338 millions de dollars et en 2011 à 370 millions de dollars, ce qui fait bien une augmentation de vos revenus publicitaires de 74 millions de dollars.

2795   J'aimerais que vous nous donniez au dossier public l'évolution de vos revenus publicitaires au cours des trois dernières années, et pour le marché francophone et pour le marché anglophone. Donc, sur la période, ça fait quand même une très sérieuse augmentation.

2796   M. GUITON : Certainement, on peut faire ça.

Undertaking

2797   M. GUITON : Et juste pour réitérer, Monsieur Morin, c'est vrai qu'on a eu une augmentation en 2009, 2010 -- 2010, 2011, et avec l'augmentation, on est maintenant exactement où on était en 2008.

2798   CONSEILLER MORIN : J'aimerais aussi, en ce qui concerne les coûts administratifs... Je prends l'exemple du réseau français. Vous avez à peu près un budget de 450 millions de dollars, à moins que je m'éprenne. Pardon?

2799   M. LALANDE : À peu près, oui.

2800   CONSEILLER MORIN : Oui. Et vous avez des frais administratifs de près de 100 millions de dollars. Je pense que les mauvaises langues disent que vous avez des frais administratifs beaucoup, beaucoup plus élevés que l'entreprise privée. Et quand je parle de beaucoup, c'est beaucoup.

2801   Alors, j'aimerais, pour qu'on comprenne exactement ce qui se passe, que vous nous donniez les mêmes chiffres, pour le réseau anglais et pour le réseau français, de l'évolution -- je suis toujours à la recherche d'un 40 millions de dollars -- de l'évolution de vos dépenses administratives depuis 2009.

2802   Si vous voulez nous les donner avant, libre à vous. Comme on le sait, c'est depuis 2009, à cause justement du FAPL, que vous avez été plus transparent en ce qui concerne l'ensemble des données.

2803   M. GUITON : Oui. Est-ce que je peux juste avoir une clarification? Les coûts administratifs pour la télévision conventionnelle?

2804   CONSEILLER MORIN : Oui. Alors, j'aimerais avoir, très précisément, l'administration et les frais généraux, et je vous donne un chiffre là... Disons que mes informations -- mais ce n'est pas à moi à faire la démonstration, c'est à vous -- c'est autour de 100 millions de dollars, pour qu'on se comprenne bien.

2805   M. LALANDE : C'est votre...

2806   CONSEILLER MORIN : Non, mais c'est vous qui allez nous donner les chiffres. D'accord?

2807   M. LALANDE : Oui, mais clarifions. Sur la télé conventionnelle?

2808   CONSEILLER MORIN : Oui.

2809   M. LALANDE : D'accord.

Undertaking

2810   CONSEILLER MORIN : Maintenant, vous savez qu'on a lancé ce Fonds-là de 106 millions de dollars, aux derniers chiffres, sans savoir exactement ce que sont les nouvelles locales, et la preuve de ça, c'est que le CRTC, le personnel est à la recherche d'une nouvelle définition, une définition -- je reprends les termes -- une définition pratique des émissions de nouvelles locales.

2811   Comme les choses évoluent, j'aimerais savoir... Déjà, j'ai fait allusion hier à Astral, Bell, Corus, Vidéotron, Rogers et Shaw, qui avaient présenté une définition des nouvelles locales. J'aimerais savoir si la vôtre est évolutive, s'il y a eu un développement à ce niveau-là, qu'est-ce que vous entendez très exactement comme des nouvelles locales.

2812   Et si je vous pose la question, c'est que la Commission... ce n'est pas une décision qui est prise par la Commission. La Commission, ou enfin, le Conseil, plus exactement en français, pourrait être amené à établir un seuil obligatoire à franchir pour avoir accès au FALP dans l'éventualité évidemment où le FALP serait maintenu.

2813   Donc, en quelques mots, est-ce que vous pourriez nous dire ce que la CBC et la SRC entendent par «nouvelles locales»?

2814   Parce que, comme je l'ai dit hier, il faut surtout pas confondre entre la programmation locale, des mots qu'on entend, et ne pas faire l'amalgame avec les nouvelles locales.

2815   Donc, en une phrase, qu'est-ce que c'est que les nouvelles locales pour vous?

Undertaking

2816   M. GUITON : Je vais juste demander à madame Kirshenblatt de répondre à votre question, Monsieur Morin.

2817   MS KIRSHENBLATT: So in terms of a definition of local news progress, which isn't currently defined by the Commission, based on the information that we have provided to the Commission, as well as other broadcasters, the information that we have provided, and the summary that we have provided, we would be comfortable with local news programs being -- consisting predominantly of local new segments.

2818   CONSEILLER MORIN : Très bien. Alors, je pense que dans les données que vous avez fait parvenir au CRTC, dans l'enquête, la première du genre qui ait été déclenchée dans l'histoire du CRTC pour savoir quels étaient les segments locaux auxquels vous vous référez, j'ai produit hier la pièce numéro1 qui est déjà sur le site internet, et je n'avais pas moi-même les chiffres. Mais le personnel les a agrégés.

2819   Et dans les marchés du FALP, j'ai l'impression, ma foi, qu'on est en face de deux réseaux publics ayant la même tête, mais qui produisent des résultats très différents.

2820   La CBC fait - et c'est remarquable - six heures de nouvelles locales par semaine.

2821   La SRC, deux fois moins: trois heures de nouvelles locales et je veux pas m'étendre sur le sujet.

2822   Mais tout à l'heure, monsieur Lalande faisait allusion à toutes sortes d'émission: revues acadiennes, classes sportives, on y va, comme si on pouvait tirer dans toutes les directions.

2823   L'intention est très bonne.

2824   Mais je comprends mal que vous n'ayez pas la même production. C'est comme si les Francophones étaient beaucoup moins intéressés - en tout cas, c'est le jugement que vous portez - par les nouvelles locales, que les Anglophones.

2825   M. LALANDE : Je pense que pour un Francophone, puis c'est ce que les Francophones nous disent, particulièrement en milieu minoritaire, c'est que l'identité n'est pas juste reliée à de l'information et des nouvelles. L'identité est reliée à toutes les composantes de la vie.

2826   L'exemple de «Oniva », Monsieur Morin, c'est la seule émission jeunesse au pays qui fait et qui entend et qui écoute et qui fait parler des jeunes Francophones en-dehors du Québec. C'est important pour les Francophones à l'extérieur du Québec, c'est important pour les téléspectateurs.

2827   La même chose pour l'humour. Quand la revue acadienne et les gens du Nouveau-Brunswick nous l'ont dit haut et fort, ils étaient très fiers d'avoir un «Bye bye» cette année qui leur ressemble, parce qu'ils faisaient la revue de l'année selon la perspective acadienne.

2828   Et ça, pour eux, c'est très important, puis, ils nous l'ont dit haut et fort.

2829   Alors, c'est la seule réponse que je peux vous donner.

2830   Les dimensions dans la question de l'identité des Francophones dépassent la stricte perspective des nouvelles.

2831   Et je vous disais tantôt que c'est une balance qu'il faut effectivement toujours travailler. Et on le fait avec les communautés en les écoutant et au fur et à mesure des actions qu'on peut poser.

2832   CONSEILLER MORIN : Est-ce que je dois comprendre de votre réponse qu'il n'est nullement dans votre intention de rattraper le niveau de nouvelles que les Anglophones, auquel les Anglophones ont, c'est-à-dire six heures par semaine, même si le fonds est prolongé?

2833   MME PLESZCZYNSKA : Je pense qu'une des choses qu'il faut remarquer, c'est que l'augmentation des heures de production n'est pas le seul indicateur, comme vous le savez. Et pour nous, l'augmentation des contenus des segments de nouvelles a déjà doublé avec l'investissement du FAPL qu'on a pu faire partout en région.

2834   Alors, on est passé d'une situation où nos téléjournaux d'une heure donnaient à peu près, 30 pour cent du contenu était local. Et maintenant, si vous avez vu, vous avez remarqué les pourcentages. La demande que vous nous avez faite du 20 au 18 février, le spot check, ça passe de 55 à 84 pour cent dans certains marchés, de contenu local.

2835   Alors, il est certain que pour nous, le contenu local est un élément essentiel du service aux téléspectateurs dans ces localités-là. Et le FAPL nous permet justement de mettre des journalistes sur le terrain pour augmenter ce contenu local-là et de le maintenir à un niveau prioritaire et de beaucoup, comme vous pouvez le voir.

2836   CONSEILLER MORIN : Est-ce que vous pensez que des programmations locales comme celles auquel on a fait allusion, sont un produit d'ancrage équivalent à des nouvelles qu'on peut voir tous les jours?

2837   Et, vous avez même prolongé la diffusion des nouvelles les fins de semaine.

2838   Autrement dit, est-ce que la priorité, ce serait pas d'avoir un sacré bon bulletin de nouvelles, aussi bon que la CBC en termes d'heures en tout cas, aussi bon que les entreprises intégrées du côté anglophone qui réussissent à faire cinq heures de nouvelles par semaine, de segments locaux.

2839   Et les indépendants qui sont venus hier pour nous dire que dans leur marché, dans l'Ouest canadien à Hamilton, ils réussissent à faire 11 heures de nouvelles. Vous n'en êtes qu'à trois.

2840   MME PLESZCZYNSKA : Je pourrais vous dire, d'une part, que 88 pour cent de notre programmation est en nouvelles.

2841   Alors, bien que, comme disait monsieur Lalande...

2842   CONSEILLER MORIN : Je parle d'un score, ici.

2843   MME PLESZCZYNSKA : Mais c'est le pourcentage de programmation que nous faisons en région est déjà de 88 pour cent en nouvelles.

2844   Le 12 pour cent qui n'est pas nouvelles va chercher justement ce besoin-là de programmation diversifiée, de qualité de programmation autre qui répond aux autres besoins des téléspectateurs.

2845   Alors 88 pour cent, c'est déjà la moyenne de programmation en nouvelles que nous offrons maintenant et qui a augmenté avec l'arrivée du FAPL.

2846   Et comme vous l'avez dit, on a augmenté les fins de semaine. On a augmenté les heures dans certains marchés, qui étaient à 30 minutes, qui sont maintenant à 60.

2847   On a augmenté dans certains marchés où on n'était pas pleine saison, où on l'est maintenant, des jours fériés.

2848   Alors, c'est sûr que pour nous, le reflet à travers les nouvelles est essentiel. Et c'est démontré par le pourcentage de programmation que nous faisons dans ce type-là de programmation.

2849   M. LALANDE : J'aimerais ajouter, Monsieur Morin, que, prenons l'exemple, si vous voulez faire des comparaisons avec les indépendants, la programmation de Radio-Canada, encore là, est assez différente.

2850   On parle des émissions du matin. Radio-Canada est le seul diffuseur conventionnel à diffuser des émissions jeunesse le matin, justement, en respectant son mandat et en offrant une diversité de programmation, donc, quand d'autres font de l'information locale.

2851   Alors, je répète encore. L'idée, c'est d'avoir une balance qui soit le plus approprié. Je pense qu'il est assez facile de comprendre l'amélioration qui s'est faite au niveau de la couverture strictement locale, donc, avec des gens locaux, un investissement qui s'est fait dans chacune des raisons et qui capte les réalités et la fibre propre à chacune de ces régions-là.

2852   M. GUITON : Est-ce que je peux juste ajouter, Monsieur Morin, juste une question.

2853   On a essayé hier soir de reproduire, de recalculer les chiffres que vous avez présentés devant nous. Et on...

2854   CONSEILLER MORIN : Ce ne sont pas mes chiffres. Ce sont les vôtres, tels que colligés par le personnel.

2855   M. GUITON : D'accord. C'est sûr qu'on ne voit pas exactement les mêmes chiffres dans ce qu'on a déposé. C'est ça qu'on avait une question hier soir, juste... C'est selon les choses qu'on a déposé. C'est ça?

2856   CONSEILLER MORIN : Absolument. C'est... il y a tout un paragraphe qui explique la démarche.

2857   M. GUITON : Ça va.

2858   CONSEILLER MORIN : Ce sont là mes questions. Merci.

2859   LE PRÉSIDENT : Thank you. Merci. Commissionner Lamarre?

2860   CONSEILLÈRE LAMARRE : Merci, Monsieur le Président.

2861   Quelques points de clarification.

2862   Dans votre soumission, vous proposez que les critères d'augmentation des émissions de nouvelles devraient être rétablis pour être éligibles au fonds.

2863   Et vous proposez une formule qui est quand même assez simple. Vous dites, pour être éligible au fonds, il faudrait qu'un radiodiffuseur diffuse au moins de plus par semaine, de nouvelles et d'émission d'affaires publiques.

2864   Pourquoi est-ce qu'on serait pas tenté de plutôt exiger des heures supplémentaires par rapport à ce qui s'est fait dans les années précédentes?

2865   En d'autres mots, il y a des bons élèves dans le système de radiodiffusion qui font effectivement plus que ce que les conditions de licence exigent d'eux.

2866   On vise à toujours améliorer le système. Et, on s'attend toujours à mieux des meilleurs.

2867   À ce moment-là, vous, est-ce que vous avez considéré cette option-là?

2868   M. GUITON : Oui, on avait considéré l'option de... avec les coûts aussi. On avait considéré les deux côtés.

2869   Le problème avec ce modèle, c'est qu'il faut toujours grandir. Chaque année, après année. Si vous faites plus que l'année passée, ça veut dire que l'année après, il faut faire plus aussi.

2870   Le fonds augmente pas au même niveau que ça chaque année, par année, par année. Et ça arrête jamais. C'est comme un modèle où chaque année, il fait faire mieux, plus et plus et plus.

2871   Et c'est pourquoi on a établi, essentiellement, Madame Lamarre. On avait essayé de construire un modèle avec les coûts qui donnent une façon pour les gens investir plus, plus chaque année.

2872   Mais tout à coup, on a réalité, il y a un problème. Ils peuvent pas continuer d'augmenter, augmenter chaque année avec les coûts à un certain point. Tu n'as pas l'argent de faire ça. Et tu peux pas.

2873   C'est pourquoi on avait essayé de mettre un modèle très simple, une heure. C'est une proposition; peut-être c'est deux heures, peut-être c'est trois heures, je ne sais pas. C'est juste l'idée: avec un minimum de quantité d'heures qui est plus haut que le minimum pour la licence, vous allez être certains que le FAPL a contribué plus que le minimum.

2874   C'est sûr que vous allez avoir plus d'heures d'informations, de nouvelles que vous allez avoir si tout le monde retourne jusqu'au minimum de licence. C'est ça le modèle.

2875   CONSEILLÈRE LAMARRE: O.K.

2876   M. GUITON: C'est très difficile d'avoir un système où ça augmente chaque année.

2877   CONSEILLÈRE LAMARRE: À moins d'y fixer éventuellement un plafond. Mais là, comme vous le faites remarquer, c'est que ça complique l'équation et ça peut être plus difficile à gérer.

2878   M. GUITON: Oui... C'est ça.

2879   CONSEILLÈRE LAMARRE: Bon. Je note votre réponse.

2880   Quand on lit l'ensemble des interventions qui ont été déposées, on note clairement que les communautés linguistiques en situation minoritaire reconnaissent parfaitement l'ajout que Radio-Canada a fait à la programmation. Ils en sont très, très heureux, comme l'ont souligné mes collègues. De toute évidence, vous avez dépensé l'argent pour les fins qu'on prévoyait.

2881   Il y a une toute petite note discordante, quand même, et qui a été présentée par l'APFTQ au sujet de ce que l'APFTQ présentait comme étant de la programmation délocalisée et non pas de la programmation locale ou régionale. Et l'exemple qui était utilisé, c'était la série «Les chefs», qui était, oui, produite en région.

2882   Et personne ne vous reproche de faire appel à des producteurs en région, mais le sentiment était que ce n'était pas ce qui était prévu comme étant de la programmation locale, dans la définition qu'on avait faite initialement, et que de deux choses l'une: ou bien on mettait fin à l'anomalie, en acceptant plus ces dépenses-là comme étant des dépenses de programmation locale, ou bien on acceptait cette situation-là et on acceptait d'ajouter des bénéficiaires au FAPL, c'est-à-dire les autres diffuseurs conventionnels qui ont aussi un mandat régional (par exemple, Télé-Québec ou TFO.

2883   J'aimerais savoir qu'est-ce que vous avez à répondre à ces arguments-là.

2884   M. GUITON: Juste la dernière partie que vous avez mentionnée, je n'avais pas compris exactement... TVO et Télé-Québec, c'est quoi la différence avec eux, ce qu'ils font et ce que vous avez décrit, quand...

2885   CONSEILLÈRE LAMARRE: C'est qu'ils ont un mandat régional. Ils ont un mandat aussi de refléter les régions à leur antenne et ils ont des ententes régionales.

2886   M. GUITON: D'accord. O.K., je comprends bien.

2887   Alors, juste en termes de FAPL, c'est... quand on parle des «Chefs», c'est pas les chefs qui reçoivent l'argent, c'est la station. La station reçoit l'argent. C'est toute la production à l'intérieur des stations qui est impliquée dans le FAPL. Ça, c'est la première chose...

2888   CONSEILLÈRE LAMARRE: Mais si je peux me permettre d'ajouter ici--

2889   M. GUITON: Oui.

2890   CONSEILLÈRE LAMARRE: Je pense que ce qui était reproché, c'est le fait que ce genre de séries là...

2891   M. GUITON: Oui.

2892   CONSEILLÈRE LAMARRE: ...oui, même si c'est la station qui reçoit l'argent et que l'argent est dépensé en région, ce n'est pas une programmation qui est ciblée spécifiquement pour le marché de cette station-là.

2893   M. GUITON: Oui.

2894   M. LALANDE : Mais j'ajouterais là-dessus une chose. Je pense que tout le monde reconnaît que «Les chefs»... et que ce concept d'émission là met en valeur une des caractéristiques importantes de la ville de Québec, c'est-à-dire sa culture culinaire...

2895   CONSEILLÈRE LAMARRE: Je ne conteste pas ça.

2896   M. LALANDE : Sa culture culinaire.

2897   CONSEILLÈRE LAMARRE: Je ne conteste pas ça.

2898   M. LALANDE : Deuxièmement, l'infrastructure. Ça bénéficie à l'infrastructure de production, non seulement de la station, mais de tout l'ensemble de la production de Québec. Donc, c'est un apport important et il faut...

2899   Je parlais des gens de Québec. Il faut s'apercevoir que les gens sont très fiers qu'une émission de cette envergure (parce qu'elle a pris une envergure beaucoup plus grande à cause de son succès) soit non seulement tournée à Québec, mais utilise des gens de Québec. Le coanimateur est un des chefs réputés de Québec, le juge principal est un chef important de Québec. Les gagnants des deux premières années sont des assistants-cuisiniers de restaurants de Québec.

2900   Donc, là-dessus, j'ai des nuances, face à ce que je lisais du rapport de l'APFTQ. Quant à la--

2901   CONSEILLÈRE LAMARRE: Donc, votre réponse à ma question, c'est que vous estimez que c'est valable de considérer les dépenses pour ce type d'émissions là (particulièrement celle-là) comme étant des dépenses pour de la programmation locale?

2902   M. LALANDE : Oui.

2903   CONSEILLÈRE LAMARRE: O.K.

2904   Donc, maintenant qu'on est d'accord... Bien, «qu'on est d'accord»... que je comprends votre réponse... Compte tenu de ça, est-ce qu'à ce moment-là, si on accepte de continuer à financer ce genre d'émissions là avec le FAPL, est-ce qu'on ne devrait pas, pour être équitable, aussi permettre un accès au fonds à d'autres radiodiffuseurs conventionnels qui, eux aussi, ont un mandat de refléter les régions à leurs antennes et à leur réseau.

2905   M. LALANDE : Bien, alors, je ne peux pas être d'accord avec cette proposition-là, pour la raison suivante. C'est qu'il y a une espèce de «disconnecte», là, tout simplement parce que la station est à Québec.

2906   Télé-Québec a une station à Montréal, TVO a une station à Toronto. Donc, ce ne sont pas des stations qui oeuvrent dans le domaine régional. Ils peuvent passer de la programmation qui est faite en région, mais ils n'oeuvrent pas, et l'essentiel de leurs dépenses de programmation n'est pas fait dans les régions et dans une station régionale.

2907   Et à mon avis, là-dessus, quand l'APFTQ parle de délocalisation, ça serait un exemple extraordinaire de délocalisation d'encourager ce type de production, ce qui est très différent du type de production qui se fait, comme «Les chefs», une très grande production, qui est faite à Québec, par la station de Québec.

2908   CONSEILLÈRE LAMARRE: Merci.

2909   Ma dernière question: au moment de certaines discussions que vous avez eues, Monsieur Guiton, vous avez fait remarquer que selon vous, le fonds (attendez, je le prends)... le fonds servait entre autres à faire face à l'échec de certaines forces du marché (là, je résume un peu ce que vous avez dit) et on imagine facilement que les endroits où il n'y a pas de force de marché, ou il y a un échec des forces des marchés, c'est un endroit où est-ce qu'il n'y a pas une multitude de radiodiffuseurs qui sont prêts à offrir de la programmation locale.

2910   Alors, pour qu'on puisse bien évaluer ça, est-ce que vous seriez en mesure de nous fournir une liste des marchés francophones et anglophones dans lesquels Radio-Canada bénéficie du FAPL, et où vous êtes le seul radiodiffuseur en ville, «you are the only game in town»?

2911   M. GUITON: On peut faire ça facilement.

2912   CONSEILLÈRE LAMARRE: S'il vous plaît.

2913   Merci, ce sont toutes mes questions, Monsieur le Président.

Undertaking

2914   THE CHAIRPERSON: Thank you.

2915   I believe there is a follow-up question by the Vice-Chair of Broadcasting.

2916   COMMISSIONER PENTEFOUNTAS: Very quickly, Mr. Chairman. Thank you very much.

2917   Alors, merci beaucoup d'avoir pris le temps d'être parmi nous aujourd'hui. C'est grandement apprécié.

2918   Ceci étant, moi, j'étais frappé... Ça a été mentionné facilement par monsieur Lalande, qui n'eut été du 40 millions que vous recevez, vous êtes prêts à mettre tous vos efforts dans le domaine du FAPL, dans le domaine de la programmation locale, dans la poubelle. Et ça a été en quelque sorte souligné par monsieur Guiton.

2919   Moi, je suis dérangé, troublé, estomaqué, flabbergasté (si vous voulez utiliser une expression qui est commune au Québec présentement) de voir que vous êtes prêts à mettre quelque chose qui est si important à la population canadienne, la programmation locale supportée, appuyée par vos sondages et vos «focus groups» avant de regarder vos coûts de la main-d'oeuvre, vos coûts de la production, sans nuire à la qualité de la production, vos dépenses dans le domaine numérique, vos dépenses dans les grands centres régionaux et avant de regarder toutes ces dépenses-là, vous êtes prêts à mettre les dépenses de la programmation locale dans la poubelle pour un fonds qui dure depuis deux ans.

2920   À quelque part, il me semble -- et ça se peut que je me trompe, royalement -- ça se peut que je suis complètement dans les patates, mais j'ai l'impression que vous avez perdu le nord et que vous commencez à vous comporter comme un diffuseur privé. Vous voulez concurrencer contre les privés, sur leur terrain, et vous ignorez ceux et celles qui n'ont pas le service disponible d'offert par les privés.

2921   Est-ce que je me trompe, Monsieur Lalande?

2922   M. LALANDE : Radio-Canada vient de perdre 67 millions de dollars, actuellement, dans son appropriation. Je dois vivre avec ça, maintenir des services.

2923   Tout ce que je dis... Tout ce que je dis: Radio-Canada va continuer à être présent en région... pas de la même façon si le FAPL disparaît. On va continuer à être présent en région d'une façon différente, c'est tout ce que je dis. Mais actuellement, il y a des réalités financières qui sont incontournables, qui sont dictées par toutes sortes de facteurs. Et on va composer puis on va faire de notre mieux, comme on a toujours fait.

2924   CONSEILLER PENTEFOUNTAS: En réalisant que votre priorité doit être de servir ceux et celles qui sont mal servis par les privés. C'est en quelque sorte la raison pour laquelle vous êtes des récipiendaires d'une allocation, ça peut être un milliard, ça peut être plus, ça peut être moins.

2925   M. LALANDE : Le mandat de Radio-Canada est vaste.

2926   CONSEILLER PENTEFOUNTAS: Oui.

2927   M. LALANDE : Il y a plusieurs aspects à ça.

2928   CONSEILLER PENTEFOUNTAS: Oui.

2929   M. LALANDE : Steve l'a mentionné: informer, éclairer, divertir, dans toutes ses dimensions, une population qui est dispersée à travers le pays, dans les deux langues. C'est un défi quotidien.

2930   CONSEILLER PENTEFOUNTAS: Avec une priorité, il me semble -- je l'espère -- dans l'intérêt de la culture et l'identité canadienne, de bien servir les CLOSM, d'abord, et de bien servir les régions qui peuvent être mal servies par le privé.

2931   M. LALANDE : Comme on l'a toujours fait et on va le continuer à le faire.

2932   CONSEILLER PENTEFOUNTAS: Si on peut mettre une priorité sur ces deux tableaux-là, je pense que les gens apprécieraient et penseraient que leur argent est bien dépensé, si on s'occupe de ceux et celles qui sont mal servis.

2933   Il me semble que ça fait partie de votre raison d'être. C'est de bien servir ces communautés-là, avant de servir Toronto, Montréal et Vancouver et les dépenses dans le numérique.

2934   MR. GUITON: If I could only just add an important point in all of this.

2935   COMMISSIONER PENTEFOUNTAS: Sure.

2936   MR. GUITON: You mentioned it just now and you mentioned it earlier in your cross-examination, the notion that we should be in places where the privates aren't.

2937   An important policy goal of the Commission -- and you have just had a recent proceeding, I think last year or the year before -- was diversity of voices and you will note when you look at our survey that we did Canadians, one of the things they like is having a different source of local news. So I just have a problem with the idea that you are starting from the basis of saying we should only be where the privates are not. That's not in the system.

2938   COMMISSIONER PENTEFOUNTAS: No, but it's important to be in small markets, to provide local news in small markets --

2939   MR. GUITON: Right.

2940   COMMISSIONER PENTEFOUNTAS:  -- and to provide local news and services in minority communities.

2941   MR. GUITON: You are absolutely right and we take that as a priority.

2942   We also take it as a priority --

2943   COMMISSIONER PENTEFOUTAS: And don't tell me you're going to flush that in the toilet --

2944   MR. GUITON: No, but hold on.

2945   COMMISSIONER PENTEFOUNTAS:  -- because we are cutting $40 million on a fund that's only been around for two years.

2946   MR. GUITON: All we are saying, Mr. Vice-Chairman, we have priorities, we have multiple priorities, one of them is Canadian drama. We have all sorts of surveys that tell us Canadians want Canadian drama, so we put money there. We have surveys that tell us people want local programming, we put money there.

2947   All we are saying to you in terms of the $40 million, we are not going to leave local programming, but we don't have another $40 million, so if you take that $40 million away it will mean that we will have to make do with what we can in terms of balancing our existing finances to go after drama, because people tell us that we need drama. The Act tells us we need to do drama.

2948   We will do, like we were doing before, a balanced offering.

2949   COMMISSIONER PENTEFOUNTAS: Never losing sight of serving the people that cannot be served by private broadcasters. I think that's fundamental to your very existence as a publicly funded broadcaster.

2950   MS STEWART: I think as the basis of when you heard our 2015 plan, every one every way, I think we do understand that Canadians across the country have an interest to be served. Whether they are also in a market that is served by other competing broadcasters, they still want us to be there as the CBC representing them as an independent, and that's the same whether you are in a community which is heavily populated or one that is more remote.

2951   We will always be there in the ones that are more remote, it's the affordability of it, how we get there and can we properly serve them, because there is a difference between not serving and under serving. We took that quite seriously when we looked at expanding into new local markets, there was a difference between being completely vacant and being more present in the way that we think the local public deserves and that's what we did with the LPIF file.

2952   COMMISSIONER PENTEFOUNTAS: I agree with you. This is a two year fund, you have been around for 75 years.

2953   MS PLESZCZYNSKA: We were there before, we improved our service. The $20 million has allowed us to increase and improve our service. If the $20 million is no longer there, that improvement is in jeopardy.

2954   COMMISSIONER PENTEFOUNTAS: There may be other sources and there may be other ways of running your business more effectively and more efficiently.

2955   THE CHAIRPERSON: Thank you.

2956   Can I ask counsel to wrap up if you have any questions?

2957   MR. McCALLUM: Yes. Just two very quick things.

2958   If the LPIF were continued, would I take it that CBC would have no problem if it were a condition of eligibility that the amount received from LPIF for each individual LPIF eligible station is publicly disclosed.

2959   MR. GUITON: No problem.

2960   MR. McCALLUM: Thank you.

2961   In the contingency plan that Mr. Katz gave you earlier with three scenarios, I wonder if you could say, in responding to that undertaking, how the CBC-SRC would continue to meet the needs of the official language minority communities in each of those three scenarios, which is the three year transition, the flash cut and reduction by 50 percent?

2962   MR. GUITON: We will certainly indicate the impact on minority markets.

Undertaking

2963   MR. McCALLUM: Thank you.

2964   Thank you, Mr. Chair.

2965   THE CHAIRPERSON: Thank you. That completes our examination of CBC-SRC. We will take a five minute break and we will resume with Cogeco before lunch.

2966   MR. GUITON: Thank you very much.

--- Upon recessing at 1139

--- Upon resuming at 1148

2967   THE SECRETARY: Please, take your seats.

--- Pause

2968   THE CHAIRPERSON: Madam Secretary...?

2969   LA SECRÉTAIRE: Nous entendrons maintenant la présentation de Cogeco Câble inc.

2970   S'il vous plaît faire votre présentation et vous présenter, et vous avez 10 minutes. Merci.

PRESENTATION

2971   MR. MAYRAND: Merci. Good morning, Mr. Chairman and Commissioners. Thank you for giving us the opportunity to present the point of view of Cogeco Cable as part of this public hearing on the review of the LPIF.

2972   My name is Yves Mayrand, I am Vice-President Corporate Affairs at Cogeco Cable. To my right is Caroline Dignard, Senior Director Legal Affairs and Chief Privacy Officer.

2973   Our remarks today will be brief and to the point. This proceeding is about assessing a cross subsidy scheme that was clearly established from the outset as a temporary measure.

2974   It is very revealing that some beneficiaries of the cross subsidies obtained through this program want to turn it into a permanent fixture of the regulatory framework for broadcasting.

2975   Second, the proponents of making this program permanent do not agree on how to split the honey pot and want to tweak the criteria to their own commercial advantage.

2976   Third, television broadcasters who have been excluded from this program for the first three years now want to share the honey pot going forward.

2977   As we pointed out in our short written submission, Cogeco Cable considers that the LPIF scheme was established in 2008 by majority decision only, without clear prior notice and without sufficient and convincing evidence respecting the issue to be addressed or the appropriate means for addressing that issue.

2978   Caroline...?

2979   MS DIGNARD: The LPIF scheme was originally designed to generate an increase in local television programming. That fundamental objective was subsequently abandoned and the programs assessment base was increased, turning into a measure to simply transfer money by regulatory fiat from one element of the Canadian broadcasting system and its customers to another element of that system during a recession.

2980   In our view, the real effectiveness of this program to date cannot be convincingly demonstrated because the causal relationship between the cross subsidy and the actual maintenance of local television programming on certain local television broadcasting outlets cannot be based on objective comparisons.

2981   Indeed, the corresponding element of the comparison is simply an assumption that local television broadcasters in the markets concerned would have actually permanently called their existing local programming or closed their local broadcasting stations without the cross subsidy.

2982   The first three years of the LPIF scheme are, however, water under the bridge. It is not very useful in the circumstances to focus on the past effectiveness of the program. It is far more relevant to consider whether the need for this program, which was clearly and unequivocally set up as a temporary stopgap measure to prevent the announced death of local television programming during the last recession, can still be convincingly demonstrated for the indefinite future and why it should now be turned into a permanent feature of the regulatory framework for Canadian broadcasting.

2983   It is clear that we are no longer in a recession, that advertising revenue has picked up considerably for television programming based on the Commission's latest financial statistics for the sector and that over-the-air television is now controlled almost entirely by four very large fully integrated and wealthy private broadcasting groups under group licensing, and one very large already heavily subsidized public broadcaster.

2984   First let us look at the very large vertically integrated broadcasters.

2985   Three of the four vertically integrated entities, mainly Shaw, Rogers and Quebecor, recognize that the LPIF is no longer relevant and that it should be eliminated. There is one notable holdout and it is Bell.

2986   While one can easily understand why Bell has completely reversed its position on the LPIF since acquiring CTV, one must wonder why the biggest communications company in Canada, with $20 billion of revenue annually, and the largest and most profitable portfolio of conventional and specialty television licenses actually needs a cross subsidy from all Canadian cable and satellite customers to produce and broadcast its local television programs.

2987   MR. MAYRAND: In paragraph 22 of Bell's own written submission Bell makes the following unequivocal statement.

"Viewers in smaller markets crave local news and programming and they are currently well served in this regard. As such, it is unnecessary to provide more local programming to satisfy consumers' interests." (As read)

2988   Well, if that is the case, why should this multi-billion dollar communications juggernaut get any cross subsidy from cable and satellite consumers across Canada to meet the craving of its local television station audiences in the future.

2989   As it turns out, figures placed by the Commission on the public file last Friday show that past use of the LPIF cross subsidy by Bell has resulted in a minute and a half more local news per week on average and 15 minutes less of local programming other than use per week on average.

2990   Yet Bell wants a bigger share of the honey pot through a change of criteria for the variable portion of the LPIF allocation. I note that yesterday morning they withdrew their request that the CBC be excluded from eligibility of the LPIF. However, I must say, I have trouble understanding the reason that they quoted for doing that because at paragraph 32 of their statement they say the following:

"But as we have discussed today, the future of local TV continues to be troubled and we are increasingly concerned that private sector station closures are likely." (As read)

2991   I suppose that this means that no matter what happens to the LPIF closure of local stations in the private sector are likely.

2992   There is of course not a single word in Bell's submission on the many billions of dollars that it invariably finds to swallow up other players in the Canadian broadcasting system, from CTV to Maple Leaf Sports and Entertainment to Astral Media. Bell has no qualms arguing, in paragraph 42 of its written submission, that:

"Using corporate structure as the basis for establishing LPIF eligibility could also see industry participants gravitate towards a structure that they felt offered regulatory advantages." (As read)

2993   Or in paragraph 44 of its written submission that:

"If the BDUs 1.5 percent contribution were to be discontinued, then the Commission has no policy basis for continuing to tax BDUs for some other purpose." (As read)

2994   The Commission may rest assured. Bell will not undue its extensive vertical integration in the absence of the LPIF. The BDU contribution to local expression has been around for much longer than the temporary increment to fund the LPIF.

2995   Based on our understanding of the public record, Bell is alone in claiming that it should be all or nothing for BDU contributions to local expression. Cogeco Cable is definitely not calling for an end to all BDU contributions to local expression.

2996   We must be blunt here. Bells' position in this review proceeding is an egregious example of unjustifiable corporate welfare at the expense of Canadian consumers.

2997   Turning now to the CBC, we stated clearly our view that it is also untenable from a public policy perspective that all Canadian wireline and satellite distribution customers should end up paying a growing subsidy for the local television programming activities of the CBC, since the CBC is already largely subsidized by taxpayer money and that its subsidies are determined by Parliament.

2998   The fundamental issue here is whether it is appropriate for the CRTC, under the Broadcasting Act, to mandate a direct cross subsidy from the private to the public sector of the Canadian broadcasting system and whether the CRT should supplement the role of Parliament in assessing the funding requirements of the CBC.

2999   Without getting into a detailed legal argument, the Commission should, in our respectful submission, specifically look at whether there is any explicit or implicit support for such a cross subsidy in the Broadcasting Act, and consider as well the effect of subsection 47(1) which provides that the CBC is an agent of Her Majesty, and section 59 which provides for the ability of the Minister of Canadian Heritage and the Minister of Finance, with the approval of the Governor in Council, to direct the CBC to pay to the Receiver General such amounts that the Ministers consider to be in excess of the amounts required for the purposes of the CBC.

3000   Thank you for hearing us today. We will be pleased to answer your questions.

3001   THE CHAIRPERSON: Thank you.

3002   I would ask Commissioner Morin to lead the questioning.

3003   CONSEILLER MORIN : Merci, Monsieur le Président.

3004   Si on regarde la contribution que vous faites, c'est bien la contribution des consommateurs, ce n'est pas la vôtre; on est d'accord là-dessus?

3005   M. MAYRAND : Nous sommes parfaitement d'accord là-dessus, Monsieur Morin. Nous avons pris, Cogeco Câble -- comme d'ailleurs ça a été le cas pour tous les autres grands distributeurs.

3006   Nous avons pris la position que les sommes qui devaient être remises pour fins de financer le Fonds d'amélioration à la programmation locale devrait être clairement identifié, connu de nos consommateurs et reporté en tant que tel, spécifiquement sur leur facture et c'est ce que nous faisons.

3007   CONSEILLER MORIN : Je veux pas ouvrir un débat ici. Mais vous le faites pas pour la télévision communautaire et vous profitez vous-même du système sans le dévoiler, sans dévoiler le coût aux consommateurs.

3008   M. MAYRAND : Monsieur Morin, je pense que nous avons déjà eu une discussion assez détaillée lors d'une autre audience, justement sur la politique de télévision communautaire.

3009   Et je pense me souvenir que je vous ai expliqué que dans le cas de la TVC, nous avons, je crois, 37 canaux distincts de télévision communautaire à l'intérieur de nos zones de dessertes au Québec et en Ontario.

3010   Ce qui veut dire que pour effectuer le même résultat que vous suggérez, c'est-à-dire d'identifier certaines contributions spécifiques au regard de la télévision communautaire, il faudrait le faire dans 37 modalités différentes et avoir un système de gestion pour faire ça que nous n'avons pas à l'heure actuelle.

3011   Alors, je pense qu'on avait eu cette discussion-là et je vous rappelle de nouveau qu'il y a un petit problème de logistique et de coût pour arriver à ce résultat-là.

3012   CONSEILLER MORIN : Est-ce que le Fonds pour vous, quand même, c'est dans des marchés locaux. C'est là où vous êtes principalement. Vous êtes pas nécessairement dans les grands marchés.

3013   Est-ce que ce serait bon que le CRTC, si on devait pas suivre votre avis, si on devait maintenir le Fonds, qu'on établisse un seuil minimal de programmation ou de nouvelles locales - j'insiste sur les nouvelles locales - plutôt que la situation avec laquelle on vit actuellement, où ça peut être beaucoup de choses comme on l'a démontré avec Radio-Canada ce matin?

3014   Est-ce ça ferait du sens, selon vous, pour desservir vos marchés, que le radiodiffuseur qui profite du FALP ait un seuil à partir duquel il pourrait être subventionné alors qu'actuellement, on vogue, enfin on navigue avec les dépenses uniquement?

3015   M. MAYRAND : Monsieur Morin, je dois revenir à notre présentation, et vous dire qu'à notre point de vue, le besoin de subvention - parce qu'on parle d'une subvention, en fait d'un inter financement prélevé du secteur privé de la distribution de la radiodiffusion vers la télévision conventionnelle, que cet inter financement n'est pas justifié dans le cas d'entreprises telles que PCE.

3016   Il n'est pas justifié non plus dans le cas de la Société Radio-Canada.

3017   Alors évidemment, dans ce contexte-là, je ne serai certainement pas celui qui va vous dire, on devrait envisager telle ou telle modalité ou l'augmentation, par exemple, spécifique de certaines heures de nouvelles dans les marchés éligibles.

3018   Parce que d'après nous, le besoin d'une structure permanente d'inter financement n'a pas été établi et n'est pas souhaitable non plus. Maintenant, si vous me dites, permettez-moi de terminer rapidement.

3019   Si vous me dites, y aurait-il lieu que le CRTC revienne en fait à son modèle original qui était basé sur des augmentations mesurables de programmation locale, qu'il le cible encore plus en le mettant au niveau des nouvelles locales, qu'il adopte une définition plus restrictive de nouvelles locales.

3020   Je pense, c'est à vous de considérer ça en ce qui concerne Cogeco Câble. Mais en ce qui concerne nos abonnés, les consommateurs qui prennent nos services et qui paient les contributions au FAPL, d'après nous, il n'y a pas lieu de maintenir ce programme.

3021   CONSEILLER MORIN : Et je comprends qu'il y a lieu de maintenir le 2 pour cent, ça a été l'objet d'un autre débat.

3022   Est-ce que ce 1.5 pour cent dont on parle n'est pas complémentaire à l'offre?

3023   Je pense qu'en ce qui concerne la télévision communautaire, vous êtes un exemple dans le système canadien pour tout le sérieux que vous apportez à la télévision communautaire, mais aussi, en contrepartie sur la base des mêmes chiffres.

3024   Est-ce que le 1.5 pour cent qui est moins que 2 pour cent n'est pas une offre qui est vraiment complémentaire et utile dans la mesure où ce sont des nouvelles, où justement la télévision communautaire fait toutes sortes de programmations. Vous vous en occupez, vous êtes un exemple.

3025   Mais les nouvelles, c'est quelque chose de différent que vous ne faites pas vraiment.

3026   M. MAYRAND : Bien, vous vous souviendrez peut-être, Monsieur Morin, que nous avions soulevé à l'époque, en 2009, lorsque le Conseil a tenu une audience sur le niveau approprié que devrait avoir la contribution pour financer le FAPL, nous avions indiqué que c'était difficile pour nous de concevoir pourquoi certains types d'émissions locales et dans certains cas chez nous ça inclut des nouvelles locales.

3027   On vous a donné l'exemple précis de North Bay où nous faisons de la nouvelle locale.

3028   On vous avait indiqué que, d'après nous, il y avait pas de raison conceptuelle pour laquelle ce genre de contribution à la programmation locale devrait être à priori exclue des bénéfices du FAPL.

3029   Le Conseil en a décidé autrement.

3030   Je constate à la lecture du dossier public des groupes communautaires soulèvent à nouveau la question, dans ce cas-là, des groupes de production communautaire indépendants.

3031   Il y a bien sûr d'autres radiodiffuseurs qui se disent, bien, pourquoi pas moi aussi?

3032   Il y a Télé-Québec qui dit, les critères devraient être élargis pour nous permettre nous aussi de partager les subventions qui sont disponibles.

3033   Il y a ZoomerMedia qui vous dit, nous aussi on voudrait être de la partie.

3034   Alors, il y a plusieurs exemples de groupes de radiodiffusions qui vous disent, si ça va être... ce fonds va être une... comment dire, une caractéristique durable, voire même permanente du cadre de réglementation, bien, on veut être inclus nous aussi.

3035   CONSEILLER MORIN : Je suis tout à fait d'accord.

3036   Mais justement, dans le dossier qui nous occupe, est-ce que c'est pas le temps de mettre... de procéder dans l'ordre avec le bon gouvernement?

3037   Comme vous - mais vous êtes pas un exemple - North Bay, c'est pas un exemple pour l'ensemble de la télévision communautaire, comme généralement la télévision communautaire n'est pas équipée pour faire des nouvelles avec des salles permanentes et des employés permanents dans la mesure où ça repose principalement sur le bénévolat.

3038   On peut faire plein de reportages, des documentaires, des choses d'intérêt local.

3039   D'autres télédiffuseurs comme, par exemple, Télé-Québec, font également tout, sauf des nouvelles, est-ce que c'est pas le temps - je sais que même si vous êtes pas d'accord avec le principe même de l'inter financement dont on parle - est-ce que pour le CRTC, en tant que régulateur, on devrait pas profiter de cette audience-là pour restreindre le mandat, le mandat du FALP à la production uniquement de nouvelles.

3040   Et dans la foulée, établir un seuil qui pourrait être - espérons-le, si le Fonds, bien sûr, était prolongé - servir l'intérêt de vos abonnés à la hauteur de 1.5 pour cent.

3041   Autrement dit, est-ce qu'il n'est pas temps de mettre un terme, selon vous, à cette espèce de fourre-tout qu'est actuellement le FALP où on peut mettre toutes sortes de choses, sauf des nouvelles?

3042   M. MAYRAND : Écoutez. D'après nous, le problème que nous avons ici, c'est de... je pense que c'est un peu implicite dans votre question précédente.

3043   Le problème que nous avons, c'est le lien de causalité direct et entier entre la subvention et l'accroissement de l'offre.

3044   Je pense que vous avez utilisé le terme «accroissement de l'offre».

3045   Une des difficultés que nous avons, nous, observateurs, je veux dire objectifs, puisque nous recevons aucune contribution du FAPL, une des difficultés que nous avons avec le système actuel du FAPL, c'est qu'il est très difficile pour nous, en tout cas, nous, on n'a pas été capable sur la base des pièces disponibles sur le dossier public, d'établir qu'il y a effectivement une corrélation claire, limpide et complète entre l'attribution de fonds venant du FAPL et, comme vous le dites, l'accroissement de l'offre, notamment en nouvelles locales.

3046   Alors, et certainement pas, semble-t-il que la corrélation soit la même selon les radiodiffuseurs en cause.

3047   Mais c'est vous qui avez toutes les données. En fait, vous pouvez les avoir station par station.

3048   Et dans une série de données année après année, et vous êtes en mesure beaucoup mieux que nous, d'évaluer ce qui se passe vraiment et dans quelle mesure il pourrait y avoir cette corrélation.

3049   Mais je reviens à notre point fondamental qui est que, vous savez, il s'agit toujours à la base, d'une subvention et d'une subvention par une partie du système de radiodiffusion privée à une autre partie de radiodiffusion.

3050   Et la question, lorsqu'il s'agit d'une subvention, c'est de savoir, la subvention va-t-elle devenir intégrée au système? Va-t-elle devenir une condition sine qua non?

3051   Va-t-elle rendre impossible toute variation de la forme de financement autrement que par une hausse de la ladite subvention. C'est notre grande préoccupation.

3052   Particulièrement, évidemment à cause du fait que vous avez dit que c'était une mesure temporaire.

3053   On a commencé à 1 pour cent. On a monté à 1.5. Puis là, on semble dire, ah, bien pour l'instant, on va rester à 1.5.

3054   C'était une mesure temporaire.

3055   Que se passera-t-il, Monsieur Morin, lors de la prochaine récession? Parce que selon la vie des cycles économiques, il est probable qu'il y en aura d'autres.

3056   Alors là, la prochaine récession, qu'est-ce qu'on viendra vous demander du côté des radiodiffuseurs? Est-ce qu'on viendra vous dire, ah bien là, il faut doubler le 1.5 pour cent pour arriver, parce que nos revenus publicitaires sont en baisse cyclique et on n'est pas capables de boucler les deux bouts.

3057   Vous voyez, c'est un cercle vicieux. Ça n'a pas plus de fins.

3058   Et honnêtement, je pense que ça pose la question et c'est à vous d'y répondre, vous le Conseil, ça pose la question de savoir dans quelle mesure votre rôle est, en fait, de taxer certains éléments du système pour compenser ou assister ou améliorer la position de certains autres éléments du système, et particulièrement dans le cas du secteur privé par rapport au secteur public.

3059   Et ce que j'ai indiqué dans notre présentation, moi, je ne lis pas dans la Loi d'autorité pour le CRTC, en fait, de suppléer au parlement canadien dans l'attribution des ressources qui sont disponibles par prélèvement auprès des contribuables, que ce soit des entreprises ou des individus, pour soutenir le secteur public.

3060   Peut-être avez-vous une autre lecture, mais, en tout cas, tout ce que je lis depuis 2008 et l'avis 2008-100, je n'ai vu aucune analyse cohérente, précise de ce problème-là.

3061   CONSEILLER MORIN : Dernière question.

3062   Il reste que, hier, on a eu des témoignages non seulement de Bell qui nous dit qu'il y a peut-être 6 des 19 stations de télévision qui sont à risque, mais on a vu aussi les indépendants... et vous connaissez ça, les indépendants, vous en êtes. Vous êtes un petit joueur relativement aux plus gros dans le système.

3063   Mais surtout du côté des indépendants, on a vu que les choses s'amélioraient, qu'on n'était pas loin d'une situation où, finalement, la rentabilité atteindrait des seuils intéressants, et caetera, tout en faisant, je vous fais remarquer le tableau que j'ai produit, 11 heures en moyenne du côté anglophone -- je ne parle pas du côté francophone -- 11 heures en moyenne par semaine.

3064   C'est un atout du système, et nous, on est intéressé, enfin le Conseil, par le système. On veut qu'il fonctionne. On veut qu'il livre, qu'il donne des produits.

3065   Et vous comme distributeur avec des produits de nouvelles, vous ancrez davantage le système, vous le différenciez par rapport au système américain. Comme vous savez, 90 pour cent des Canadiens vivent à moins de 160 kilomètres de la frontière américaine. C'est important quelque part.

3066   Alors, compte tenu... Je sais qu'il n'y a rien de plus dangereux qu'un fonds temporaire. C'est l'histoire qui nous dit que des fonds temporaires deviennent vite permanents.

3067   Mais nonobstant ça, le Conseil pourrait peut-être prendre en compte que les choses évoluent dans le bon sens, que les indépendants prennent du coffre, et que, finalement, même si monsieur le président ne veut pas en parler et je ne veux pas en parler, il y a la valeur du signal qui s'en vient peut-être.

3068   Alors, dans la situation actuelle, est-ce qu'il ne serait pas opportun de ne pas mettre fin -- c'est la même position que vous avez que Shaw -- ne pas mettre fin au Fonds tout de suite?

3069   M. MAYRAND : Écoutez, nous, tout ce qu'on constate, c'est que dans le fonctionnement actuel de ce FAPL, ce que nous observons depuis trois ans, c'est qu'il y a deux grands bénéficiaires du Fonds, qui sont... Les plus grands bénéficiaires, clairement, ne sont pas les diffuseurs indépendants que vous mentionnez. Ce sont Radio-Canada/CBC et Bell. Ça, ce sont les grands bénéficiaires.

3070   Alors, si vous parlez de continuer dans la trajectoire du Fonds, de le maintenir en place avec probablement une modification de son fonctionnement et des critères d'éligibilité, j'imagine que vous parlez de le faire pas en gardant les mêmes contributions à ces mêmes joueurs pour lesquels nous voyons un sérieux problème quant à l'application et l'utilisation des fonds et quant au besoin de recevoir une subvention.

3071   Je vous rappelle, encore une fois, que pour nous, la possibilité qu'une entreprise de la taille de BCE reçoive une subvention de tous et chacun des abonnés du câble et du satellite au Canada pour faire de la programmation locale, alors qu'elle a acheté des stations de télévision locales en toute connaissance de cause et qu'elle n'est pas en mesure de vous dire qu'elle va les garder ouvertes -- parce qu'ils se gardent bien de vous dire ça -- d'après nous, c'est un non-sens, et, d'après nous, ce n'est pas justifiable et ce n'est pas raisonnable.

3072   Alors, si vous nous dites, bien, le Conseil est strictement préoccupé par la situation des diffuseurs indépendants et il y a lieu de maintenir un Fonds remanié et, je dirais, allégé pour continuer à encourager les indépendants à faire mieux, je pourrais comprendre votre raisonnement.

3073   Si le raisonnement, c'est de dire, non, non, on va continuer à avoir essentiellement la même formule où les indépendants recevront la partie congrue des fonds disponibles, puis c'est les gros joueurs qui en ont le moins besoin qui vont en avoir, puis leur part va augmenter aussi, la façon dont les critères sont faits, là, je ne suis pas d'accord.

3074   CONSEILLER MORIN : Merci de vos réponses. C'est tout, Monsieur le Président.

3075   LE PRÉSIDENT : Merci. Thank you.

3076   I have one or two questions.

3077   You state in your opening remarks, in the second paragraph:

"This proceeding is about assessing a cross-subsidy scheme that was clearly established from the outset as a temporary measure."

3078   Can you direct me where in our decisions was it clearly established that it was temporary?

3079   MR. MAYRAND: Well, I think that from the outset in 2008-100 it was clearly stated that the LPIF would be a program that would be reviewed in three years. So I read that to say that certainly it wasn't seen as a permanent fixture.

3080   Now, that is interesting and I noted Mr. Guiton going back to 2008-100 and saying that clearly, you know, there wasn't an indication at the time that this was driven by the recession.

3081   However, you know very well -- I think that the Commission a few months later -- and we're talking literally a few months -- I think, out of memory, the Commission looked at the LPIF situation again probably, I think, four months -- you issued your decision in October 2008, 2008-100, a public notice, and in February or March of 2009 the Commission then clearly took notice of the recessionary environment and issued additional notices, which led to a public hearing and a policy determination on July 6, 2009. I think we're agreed on that.

3082   And I think that your statements in July 2009 certainly indicated that you not only increased the required tax base -- if you allow me to call it that way -- from 1 percent to 1.5 percent of broadcast revenues, but you said that, there again, it would be appropriate to review this in light of group-based licensing and that you might revert to the original criteria set out in 2008-100.

3083   THE CHAIRPERSON: All those things said, so far you have yet to convince me that this Commission has clearly established that it was temporary from the outset, but I will leave it to you. If you can find evidence of that in your research, you can put it into your final reply comments or file it as an undertaking, to be more specific. But I'm looking for the specific --

3084   MR. MAYRAND: Fair enough. We will do. We will do that and I will gladly extract from the public record, including transcripts, all the statements that were made to that effect.

Undertaking

3085   THE CHAIRPERSON: We're looking for Commission findings, a Commission decision that this is a temporary measure. I'm not looking for all the other parties that may have said what they said. I'm looking for the Commission's findings in this regard.

3086   MR. MAYRAND: Okay.

3087   THE CHAIRPERSON: Okay? I want to be very specific so you don't spend a lot of time looking for things that I'm not interested in.

3088   I think you indicated or someone indicated that Cogeco does include a line item on the bill, on your bill for customers on LPIF.

3089   MR. MAYRAND: Yes, we do.

3090   THE CHAIRPERSON: Okay. If we were to modify in any way, shape or form those allocations, how would you deal with it with your customers' bill?

3091   MR. MAYRAND: Well clearly, we would have no other alternative but to adjust the line item to reflect the absence of a contribution should the Commission end the LPIF program or the reduced contribution should the Commission vary the contribution. I assume, given the record, that the Commission is not contemplating increasing it.

3092   You see, I was kind of amused mildly at the discussion you had with Bell yesterday on what would happen in their case because they do pass the LPIF charge specifically to their customers.

3093   To us, it's not very complicated. The reason why we think it is appropriate to make it a specific line item is for customers to know exactly what charges they are paying under a specific subsidy program.

3094   And it goes without saying that it would not be amenable to Cogeco to keep on charging any part of a subsidy that is no longer payable to the payee, i.e. the LPIF.

3095   THE CHAIRPERSON: Thank you.

3096   I am going to pass it on now to Commissioner Poirier.

3097   CONSEILLÈRE POIRIER : Bonjour, Monsieur Mayrand. Je suis contente que le président ait soulevé ces deux questions-là. Ce sont les deux que je voulais soulever, mais je veux aller un petit peu plus loin si vous me permettez.

3098   Est-ce que ça veut dire que le montant que vous collectez de vos abonnés, vous allez le remettre entièrement aux abonnés ou est-ce que vous allez garder une portion de cet argent-là pour des augmentations qui sont dues à des croissances dans votre compagnie au niveau des frais?

3099   M. MAYRAND : Non. Alors, on est d'accord, nous sommes dans un environnement de tarifs de détail non réglementés. Je vais vous dire que la raison pour laquelle nous sommes dans un environnement de tarifs de détail non réglementés, c'est que nous sommes en concurrence avec d'autres distributeurs et principalement, au premier chez, nos bons amis de BCE, qui ont la distribution.

3100   CONSEILLÈRE POIRIER : J'en avais compris le sens.

3101   M. MAYRAND : Alors, inutile de vous dire que nous ne sommes pas les leaders de prix dans le marché. C'est très facile de le démontrer.

3102   CONSEILLÈRE POIRIER : Mais vous chargez combien présentement sur la facture?

3103   M. MAYRAND : Les tarifs varient selon les systèmes. Je n'ai pas la grille tarifaire, mais ils sont tous publiés sur notre site Web.

3104   CONSEILLÈRE POIRIER : Mais donnez-moi un ordre de grandeur, Monsieur Mayrand. Vous chargez combien par client chez vous, à peu près là quel montant?

3105   M. MAYRAND: Pour le service de base actuel c'est... Écoutez, je me souviens plus des...

3106   Caroline? Ça varie par système, hein?

3107   MME DIGNARD: Ça varie par système. Ça varie en fonction de si le service est combiné avec un autre service. Alors, il y a une grille tarifaire qui peut être assez compliquée.

3108   CONSEILLÈRE POIRIER: Vidéotron me charge 0,54¢. Est-ce que c'est autour de ça?

3109   MME DIGNARD: Bien c'est... c'est un pourcentage, en fait. C'est un pourcentage.

3110   M. MAYRAND: Ah! Je comprends votre question. Vous ditespour le FAPL spécifiquement?

3111   CONSEILLÈRE POIRIER: Oui... Oui, oui. Oui le FAPL. Pour le... Je suis dans l'audience du FAPL.

3112   M. MAYRAND: Je comprends.

3113   Là encore, le montant qui est chargé au client correspond à l'application du 1.5 pour cent sur les services de radiodiffusion du client.

3114   CONSEILLÈRE POIRIER: Alors, ça varie de combien à combien, chez vous, pour un client?

3115   MME DIGNARD: Ça va varier en fonction du nombre des services obtenus par le client.

3116   CONSEILLÈRE POIRIER: Le minimum et le maximum, à peu près, juste avoir une idée...?

3117   MME DIGNARD: Je dirais quelque part entre 24$, 25$ et ça peut aller--

3118   M. MAYRAND: Écoutez, Madame Poirier, j'en prends l'engagement, on va vous déposer la gamme exacte...

3119   MME DIGNARD: O.K.

3120   M. MAYRAND: ...réseau par réseau, si vous voulez, du minimum et du maximum que nous avons dans nos systèmes comptables.

3121   CONSEILLÈRE POIRIER: Oui.

3122   M. MAYRAND: Aucun problème.

3123   CONSEILLÈRE POIRIER: Juste une idée, de ça. Et j'aimerais savoir quel pourcentage vous êtes à peu près prêts à remettre au consommateur, dans le cadre... en supposant que le FAPL disparaîtrait, parce que beaucoup d'intervenants se sont questionnés sur le fait que les distributeurs pourraient, même si on abandonne le FAPL, décider de garder cet argent-là complètement pour eux. Et au lieu tout simplement d'être profitable aux radiodiffuseurs, ça pourrait devenir profitable aux distributeurs.

3124   Alors, nous, on est pris dans ça. On regarde cela aller et on aimerait savoir combien les distributeurs sont prêts à retourner aux consommateurs.

Undertaking

3125   M. MAYRAND: Bien, dans notre cas, je puis vous dire qu'à partir du moment où la contribution au FAPL est effectivement abolie, que nous devrons... Je pense que nous avons l'obligation d'éliminer complètement cette charge-là, ce qui veut dire que le tarif effectivement chargé au total à nos abonnés, qui varie selon la configuration de services que chacun reçoit, sera crédité d'autant que ce qui apparaissait sur la ligne pour le FAPL.

3126   Bon. Maintenant, si vous nous dites, «Bien, est-ce que vous ne varierez plus jamais, à l'avenir, vos frais pour vos services de radiodiffusion?» Je peux évidemment pas vous dire ça. Nous avons des augmentations de coûts qui surviennent pour l'exploitation de nos réseaux, pour le développement des services, et caetera, et nous avons un marché compétitif où nous nous mesurons par rapport à d'autres diffuseurs, d'autres distributeurs sur ce que nous pouvons charger à nos clients.

3127   Alors, je ne peux pas vous dire qu'il y aura plus jamais d'augmentation de nos tarifs de base à l'issue de ce changement. Évidemment, je ne peux pas vous dire ça, mais je peux vous dire, par exemple, que le montant applicable qui apparaît distinctement sur la facture sera... devra être crédité aux abonnés. D'après moi, si nous ne le faisons pas, nous nous exposerons à des difficultés d'ordre juridique qui ne sont pas de votre ressort, mais qui sont non moins contraignantes.

3128   CONSEILLÈRE POIRIER: Parfait.

3129   Je suis aussi contente que le président ait parlé de «temporaire», parce que je n'étais pas du panel qui a participé à la création du FAPL et quand je lis les avis publics, tout ce que je vois... Ce n'est pas un engagement d'être temporaire, c'est écrit «le Conseil décidera si le FAPL doit conserver sa forme initiale, être modifié ou abandonné.»

3130   Bon. «Abandonné» peut vouloir dire que ça va être temporaire, mais ça ne veut pas dire que c'est temporaire. Et je trouve qu'on répète souvent ce mot-là, dans l'audience, et à force de le répéter, on finit par croire quelque chose qu'on n'a pas décidé comme étant temporaire.

3131   Alors, j'ai bien hâte de voir ce que vous allez nous dire pour expliquer qu'on a précisé que la création, dans son essence, du fonds, était temporaire.

3132   Cela étant dit, il y a beaucoup de fonds qui ont été créés. Ce n'est pas le seul qui a été créé. Il y a le fonds pour la radio communautaire, il y a le fonds pour les stations dans les petits marchés. Il y a même le Fonds canadien des médias qui a été créé.

3133   Et je ne veux pas prendre ici une position, mais je veux simplement exprimer un fait. Il n'y a rien de mal à ce qu'un fonds devienne permanent, si le fonds est capable d'évoluer en fonction des besoins d'un marché. Par exemple, le Fonds canadien des médias a décidé de s'adapter à la réalité des nouveaux médias en octroyant de l'argent aux nouveaux médias. Pourquoi un fonds sur la programmation locale ne pourrait pas, puisqu'il dessert un intérêt des citoyens à avoir des nouvelles locales et que les nouvelles locales font partie de la Loi sur la radiodiffusion, à la limite, évoluer, changer, innover, ne pas rester un fonds sur une obligation passée et une télévision passée, mais orienté vers une télévision du futur, mais s'assurant qu'on offre de la nouvelle locale.

3134   Alors, pourquoi un fonds comme ce fonds-là ne pourrait pas devenir un fonds permanent, tout comme d'autres fonds qui ont été créés sont devenus permanents, mais en s'adaptant?

3135   M. MAYRAND: Je pense que, ce à quoi on fait face ici, c'est la question de savoir quel est le besoin, primo; et secundo, quelle est la façon (la meilleure façon, en fait) de remplir ce besoin. Et troisièmement, tertio, quelles sont les balises que permet la loi pour le faire.

3136   Alors, la difficulté que nous avons spécifiquement avec le FAPL, par opposition à d'autres fonds...

3137   Et j'ai bien indiqué dans notre présentation que nous ne sommes aucunement d'avis que les contributions à l'expression locale devraient être éliminées, bien au contraire.

3138   Spécifiquement pour le FAPL et le 1.5 pour cent additionnel qui a été ajouté au prélèvement que nous devons faire pour encourager différentes initiatives, nous, les distributeurs, je vous soumets que le problème se pose des moyens et de l'autorité que vous avez pour maintenir ce genre de programmes là.

3139   Alors, quant aux moyens, est-il correct, est-il juste, est-il équitable, est-il conforme à votre mandat et aux paramètres de la loi d'imposer une charge, que d'aucuns décriraient comme étant de la nature d'une taxe, une charge spécifique à des contribuables (à savoir des entreprises de distribution et des consommateurs) pour subventionner le secteur public de la radiodiffusion? Vous avez cette question-là; j'imagine que vous allez en traiter explicitement dans votre révision, mais c'est une question, excusez-moi, mais légitime.

3140   Bon. Deuxième--

3141   CONSEILLÈRE POIRIER: Vous ne l'avez pas contesté, à date, au niveau de différents processus qui sont possibles pour vous de dire, bien, on a dépassé nos juridictions. Vous n'avez pas décidé de le contester, à date?

3142   M. MAYRAND : Je vous concède que Cogeco Cable n'a pas pris sur elle de tenter une révision en cour fédérale ou autrement. Je ne vous concéderai pas que nous avons jamais accepté que le fonds était justifiable et que ces prémisses de base étaient bien fondées. Au contraire, nous avons dit exactement le contraire.

3143   Alors, c'est pas en l'absence de contestation judiciaire que vous n'avez pas nécessairement un problème de politique publique, puis un problème à gérer selon les paramètres de votre loi organique.

3144   Bon. Maintenant, le deuxième volet que je veux vous faire valoir, c'est que dans le cas d'une entreprise comme Bell Canada, vous savez, la question se pose là aussi. Si une entreprise vous dit, bien «Nous allons beaucoup intégrer de ce qu'il y a comme activités de radiodiffusion, y compris en distribution et en télévision, et notre façon d'allouer nos fonds en capital et en dépenses d'exploitation -- je pense que monsieur Bibic vous a dit ça hier -- c'est au niveau du groupe corporatif, ce n'est pas au niveau individuel des... les opérations individuelles et des stations.» J'ai relu la transcription, c'est ce qu'il vous a dit hier.

3145   Bien, je pose la question au Conseil, je vous pose la question collectivement: est-il justifiable et est-il correct et est-il raisonnable de prévoir là aussi un prélèvement sur certains éléments du système pour encourager une telle entreprise, nonobstant le fait qu'elle peut toujours moduler, limiter, réduire, fermer les opérations de certaines stations locales?

3146   Est-il raisonnable de prévoir que cette entreprise devrait continuer à recevoir une subvention?

3147   Alors, ce sont les deux points essentiels de notre présentation de ce matin.

3148   CONSEILLÈRE POIRIER: Merci beaucoup. Merci beaucoup, Monsieur Mayrand. Merci, Monsieur le Président.

3149   Et c'est certain que votre réponse vise en particulier Bell. J'aurais aimé avoir les nuances par rapport à d'autres qui reçoivent aussi le fonds, mais je laisserai ça pour une autre fois, pour laisser mes amis poser des questions. Merci!

3150   THE CHAIRPERSON: Thank you. Vice Chairman Pentefountas?

3151   CONSEILLER PENTEFOUNTAS: Merci, Monsieur le Président.

3152   Très brièvement, Monsieur Mayrand, ai-je bien compris que vous avez laissé la porte ouverte à une espèce de FAPL-I(ph), c'est-à-dire un fonds dédié aux indépendants? Y a-t-il justification pour ce genre de fonds?

3153   M. MAYRAND : Si le Conseil décidait dans sa sagesse qu'il ne s'agissait pas d'un fonds temporaire, nonobstant le fait qu'on a bien dit qu'il pourrait être aboli après trois ans...

3154   Vous savez, si vous cherchez exactement le mot «temporaire», peut-être n'y est-il pas, mais dans l'esprit, je pense que ça revient à ça. Mais enfin, sans faire un débat de sémantique, si le Conseil dans sa sagesse décidait qu'il y a un réel besoin de maintenir un interfinancement pour les entreprises privées indépendantes qui n'arrivent pas ou n'arriveraient pas à offrir leur complément de nouvelles locales autrement que par ce mécanisme, je pense que la décision vous appartient et je pense que la décision est beaucoup moins discutable que la situation actuelle qui voit en fait deux grands groupes recevoir la plus grande partie de la subvention et, d'après nous, dans une situation où le besoin n'est clairement pas établi.

3155   CONSEILLER PENTEFOUNTAS : Mais sur quelle base peut-on accorder ce genre de fonds ou ce genre de prélèvement à des indépendants, strictement le fait qu'ils ne sont pas intégrés verticalement?

3156   M. MAYRAND : Bien, écoutez, si une station est indépendante, je pense que ça veut dire qu'il s'agit vraiment de petit marché ou il y a un radiodiffuseur qui n'est pas intégré à un grand groupe.

3157   Vous avez déjà défini quels sont les groupes intégrés verticalement. Il y en a quatre, hein! Il y a Bell, il y a Rogers, il y a Shaw, et il y a QMI. Alors, vous les avez déjà définis.

3158   CONSEILLER PENTEFOUNTAS : Oui. Mais par le simple fait qu'ils sont dans des petits marchés et qu'ils ne sont pas intégrés verticalement, c'est les deux seuls critères qui vont nous permettre d'accorder ce Fonds à ces stations-là ou est-ce qu'il y a d'autres arguments que vous voudriez apporter?

3159   M. MAYRAND : Je poursuis dans votre pensée. Vous dites, si on devait le restreindre à des entreprises indépendantes, comment le ferait-on? J'imagine que vous songeriez logiquement à ces critères-là. Y en a-t-il d'autres? Y a-t-il d'autres modulations que vous voulez apporter à ce que serait la nouvelle série de critères?

3160   Franchement, vous savez, on n'a pas fait d'exercice détaillé de toutes les itérations possibles là. Nous, notre position, c'est que, de façon claire et limpide, d'après nous, il n'y a plus le besoin, s'il a déjà existé, pour ce Fonds en particulier.

3161   Mais si le Conseil, dans sa sagesse, décide autrement pour les stations indépendantes, je présume qu'elle aura une définition acceptable de ce qu'est une station indépendante.

3162   CONSEILLER PENTEFOUNTAS : Et là, ce sera juste et équitable. J'utilise vos paroles.

3163   Comment justifier d'accorder ces sommes à des indépendants et non pas aux autres?

3164   M. MAYRAND : Bien, d'après nous, ça pose une question de justification. Vous pouvez clairement les distinguer. C'est pourquoi notre position, nous, de base, c'est de dire, ce programme-là a vécu ses trois ans, et le temps est venu de s'en retirer.

3165   CONSEILLER PENTEFOUNTAS : Nonobstant votre position de base, est-ce défendable de l'accorder à des indépendants?

3166   M. MAYRAND : Écoutez, vous allez entendre des indépendants. Ce n'est pas à moi de me prononcer pour les indépendants. Nous n'avons aucun intérêt en télédiffusion indépendante.

3167   CONSEILLER PENTEFOUNTAS : Je soulève la question parce qu'il me semble que j'ai entendu une ouverture à cet égard.

3168   M. MAYRAND : Je vous ai répondu que si le Conseil, dans sa sagesse, estime qu'il y a lieu de recentrer le FAPL sur les indépendants, que ce sera votre décision, et je présume que vous le ferez non seulement en modifiant les critères d'admissibilité au dit programme, mais qu'en plus vous constaterez et indiquerez clairement que la même enveloppe globale n'est plus nécessaire. Autrement dit, ça ne serait plus 106 millions et l'inflation qui va avec.

3169   CONSEILLER PENTEFOUNTAS : Ça va de soi. Merci, Monsieur Mayrand.

3170   LE PRÉSIDENT : Merci.

3171   Commissioner Duncan.

3172   COMMISSIONER DUNCAN: I just have one quick question, Mr. Mayrand.

3173   I'm just wondering, on your invoices, and I know you undertook to submit some information, but is your billing system flexible enough that it actually calculates the 1.5 percent on the services I have this month that are subject to the fee as compared to the ones next month if I change?

3174   MR. MAYRAND: Yes. That is my understanding. It is built into the parameters of the billing system.

3175   COMMISSIONER DUNCAN: Thank you very much. Thanks.

3176   THE CHAIRPERSON: Thank you.

3177   Commissioner Lamarre.

3178   COMMISSIONER LAMARRE: I don't have any questions. Thank you. Ça arrive.

3179   THE CHAIRPERSON: Counsel?

3180   MR. McCALLUM: No questions, Mr. Chair.

3181   THE CHAIRPERSON: Okay. I think that concludes our examination of Cogeco. I want to thank you very much.

3182   Before we break for lunch, I would like to make an announcement.

3183   The Commission is putting on the public file a document called "Coalition of Small Market Independent Television Stations Aggregate Financial Information - 21 Stations." This will become Exhibit number 2.

3184   As noted at the bottom of that document, the aggregate financial information is derived from financial information from the 21 small market independent television stations that have been filed and those that receive LPIF funds as well as those that receive Small Market Local Production funds. This document includes financial information from both the English-language and the French-language stations.

3185   We're releasing it at this time and wish to advise the SMITS Coalition that we intend to ask some questions to their members later today when they appear before the Commission.

3186   Please also note that the data aggregates the figures for both French-language and English-language stations. Releasing figures separately for French-language and English-language would raise issues of confidentiality given the small number of French-language operators.

3187   So it will be made available very shortly if it already hasn't.

3188   That is all I have to say.

3189   Madam Secretary?

3190   THE SECRETARY: Copies are being made in the examination room. So if you want copies, you can go directly there.

3191   We will reconvene at 1:45.

--- Upon recessing at 1241

--- Upon resuming at 1344

3192   THE CHAIRPERSON: Just before we begin I was reminded over lunch that in reading in the remarks about the document that the Commission filed just at lunch I may have mentioned the word telephone instead of the word television so I sit corrected and I apologize for those that still think I'm wearing a telecom hat.

--- Laughter

3193   THE CHAIRPERSON: Madam Secretary?

3194   THE SECRETARY: Thank you.

3195   We will now proceed with a presentation by Corus Entertainment. Please introduce yourselves and you have 10 minutes for your presentation.

PRESENTATION

3196   MR. ELLIS: Thank you very much.

3197   Good morning Mr. Chair, Commissioners and Commission staff. My name is Bryan Ellis and I am Vice President of Content Management at Corus Entertainment.

3198   Before we begin, I would like to introduce the members of the Corus team who are here with me today:

3199   - To my immediate right is Michael Harris, General Manager of CHEX-TV Peterborough, CKWS-TV Kingston and CHEX-TV-2 Oshawa.

3200   - To Michael's right is Brenda O'Brien, General Sales Manager, CHEX-TV Peterborough.

3201   - Beside Brenda is John Aonso, Vice-President, Airtime Television Sales. John has been involved in national advertising sales in small and large markets for the past 30 years.

3202   - To my immediate left is Sylvie Courtemanche, Vice-President, Government Relations for Corus Entertainment.

3203   - To Sylvie's left is Judy Carswell, Program Manager for CHEX-TV, CKWS-TV and CHEX-TV-2.

3204   Mr. Chair, Corus operates three independent, over-the-air television stations in small Ontario markets, each of which is eligible for funding from the LPIF. Our stations are all CBC affiliates serving viewers largely in rural areas of south-eastern Ontario.

3205   Operating in Canada's smallest television markets is a significant challenge, given the myriad television choices and the high DTH penetration levels we contend with. We also wrestle with the market fragmentation created by digital media, as well as the high capital costs of making the HD transition. In this environment, our on-going investment in local programming, which for our stations means local news, is vital to our sustainability.

3206   In our written submission, Corus addressed the three questions raised by the Commission in its letter of March 21st.

3207   In our oral remarks, we will focus on the issues raised during the hearing to date, and in particular, those issues that pertain to small market independent stations.

3208   MR. AONSO: Corus' three television stations are the only local stations licensed to serve their markets. As such, they compete for advertising revenue against large regional and national networks.

3209   Yesterday, you heard that small television markets are being bypassed by national advertisers. We can confirm that this is happening at an alarming rate. We have seen first-hand that advertising agencies can achieve their small market objectives by buying advertising on specialty channels and on regional and national networks.

3210   As a result, small market stations are experiencing dramatic declines in national advertising revenue. We expect this trend to continue for the foreseeable future.

3211   MS O'BRIEN: With less national advertising revenue available, our stations must find ways to grow local advertising sales and we have done so. This growth in local advertising revenue has not, and in our case cannot, make up for the decline in national advertising revenue.

3212   Last year, we renewed our CBC affiliation agreement. Under the terms of this new agreement, the amount of local advertising inventory at our disposal has decreased by half. This significantly reduces our ability to grow our revenue.

3213   MR. HARRIS: Yesterday, the Commission voiced its concerns regarding LPIF funds being available for profitable stations. As you are aware, our three stations are all profitable. This is a function of innovation and efficiency, and we are proud of that.

3214   The fact that our stations have been profitable, however, doesn't tell the whole story. It fails to take the following key elements into account.

3215   First, under our old agreement with the CBC, we had greater access to advertising inventory. That's not true anymore.

3216   Second, our profitability does not reflect under the line costs such as the capital investments we have made. Last year, for example, we made $1.3 million in capital expenditures.

3217   And third, small-scale operations like ours are more susceptible than ever to even the most minor market fluctuations.

3218   Finally, we have determined that without funding from sources other than advertising revenue, our stations would have only been marginally profitable. This is the reality for television stations operating in small markets.

3219   MS CARSWELL: Another concern raised by the Commission is whether the LPIF recipients should, in the future, be required to demonstrate incremental spending on local programming. Since receiving LPIF funds, we have met this requirement from both a quantitative and qualitative perspective. Our qualitative reports demonstrate this.

3220   Corus supports the notion of incrementality, but not on fixed terms. We believe that the incrementality requirement should take into account the unique circumstances of each market. In some instances, incrementality may be demonstrated in terms of quantity and in others, in terms of quality.

3221   MR. ELLIS: Finally, there has been much discussion about how long the LPIF should remain in place. We understand the Commission's reluctance to establish a permanent subsidy. For the following reasons, we believe that the Commission should continue to operate the LPIF for at least three years before making a determination with regards to its ultimate duration.

3222   First, the national advertising market has changed fundamentally, and we don't believe that in our markets we will ever see growth in that revenue stream again. Therefore, we need time to develop new revenue strategies.

3223   Second, as the Pattison Group mentioned, value for signal will not represent a significant source of revenue for our small market stations. Nor will we be able to monetize our signals into distant markets.

3224   Third, although we have invested over $2 million dollars to date towards HD conversion, we need more time to complete it.

3225   Fourth, we are tied to a CBC affiliation agreement for the next four years, which constrains our ability to sell advertising. More importantly, we have been told that the CBC will not be renewing this agreement at the end of the term.

3226   Therefore, one of the most significant challenges going forward will be to find relevant and compelling programming to support our local program offering.

3227   Given these circumstances, we believe it is reasonable for the LPIF to be continued for a period of three years, and to be re-evaluated at that time. Bell and Shaw, for example, have both agreed to extending the LPIF for no less than two years.

3228   This concludes our presentation. We thank you for your time and consideration, and will be happy to answer any of your questions today.

3229   THE CHAIRPERSON: Thank you very much. I would ask Commissioner Duncan to lead the questioning.

3230   COMMISSIONER DUNCAN: Good afternoon.

3231   I think probably a lot of my questions will revolve around the financial aspect of the LPIF. I think you have addressed quite a few things in your comments which are interesting.

3232   First of all, I'm just wondering and perhaps I already know the answer.

3233   You understood that the LPIF was going to be reviewed in three years and there was a possibility it would be discontinued. So I'm just curious to know what provisions you have put in place in the event it was discontinued September or is discontinued September 1st of this year.

3234   MR. ELLIS: There are a number of initiatives that we have undertaken and I'll ask the team to contribute here.

3235   But, first of all, we have been investing from a capital standpoint in terms of getting HD-ready so that we are at a better competitive footing in the markets.

3236   Secondly, we have expanded our news offering as we have indicated in the submission. And I think through those initiatives we have created an environment that leaves us better prepared to fight the fight should those funds be eliminated, decreased, re-evaluated.

3237   Michael or Judy...?

3238   MR. HARRIS: The only thing I would add to that is we have expanded our program offering in Kingston and Peterborough by an extra half-hour day. We have refocused our Oshawa programming.

3239   We are committed to that and we will continue with those programs but perhaps not funded to quite the same level they are now but we will maintain our offering in terms of the footprint and what we are putting on air.

3240   MS COURTEMANCHE: In specific answer to your question, Commissioner Duncan, I think it's safe to say that we didn't you know formulate a formal plan B.

3241   I think that, you know -- but we are in a position to at least sustain what we're doing and what will be impacted at the end of the day will probably be the level of improvements or incremental-type program we could do as well as impact our capital expenditure rollout. So I think that's where we would probably adjust ourselves.

3242   But I think what we're trying to say today is that we believe the local programming initiatives that we have supported through LPIF should be sustained regardless of what happens.

3243   COMMISSIONER DUNCAN: And they are sustainable if it's not accepted?

3244   MS COURTEMANCHE: Well, what's sustainable in the sense that, you know, would we continue to grow it at the same level that we have done? I think that would be reviewed.

3245   So I think when we say sustainability there has been some growth in the past, some significant growth. I don't think that that would happen.

3246   But, you know, as far as maintaining, at least staying the course, I think that would be the objective.

3247   COMMISSIONER DUNCAN: Okay.

3248   MR. ELLIS: We haven't stepped off a cliff.

3249   COMMISSIONER DUNCAN: Pardon?

3250   MR. ELLIS: We haven't stepped off a cliff in terms of what we are doing.

3251   COMMISSIONER DUNCAN: No. Good, I am glad.

3252   So you indicate that formal incrementality -- I think incrementality obligation is not necessary. I guess I'm just concerned when I look at the amount of monies that some of the companies have gotten and there doesn't seem to be a corresponding increase in expenditures.

3253   So I'm just wondering in light of the fact that the amount of money that you received from LPIF continues as it is and it is going to continue to increase because it's tied to BDU revenues which we would expect they would increase. So automatically you have an increase.

3254   So I'm just wondering, the recession has subsided, what argument there would be for not requiring an incrementality aspect or what that should look like even.

3255   MS COURTEMANCHE: I'll talk about the incrementality but I think you raised an interesting point, Commissioner Duncan. You said the recession is over.

3256   The recession may be over but I can tell you that 2012 is turning out to be a very different year than 2011, and that's why we brought John Aonso here. With your permission, we would just like to sort of paint you a little picture as to what's happening from an advertising revenue perspective.

3257   COMMISSIONER DUNCAN: Sure.

3258   MS COURTEMANCHE: And then I will put on the record our incrementality because it has changed.

3259   We did say you didn't need incrementality and I think this morning what we accepted is the fact that there should be or there could be an incrementality component to LPIF, but we have a problem with a one size fits all given unique circumstances. But let me go to that afterwards.

3260   And I'll just pass it over to John Aonso so he could just explain to you what's happening from an advertising revenue perspective in our markets.

3261   MR. AONSO: Nationally I took a look at the stations that were on the list that you provided before lunch and we represent nine of them and all of them nationally are down, some quite significantly.

3262   We found that 2011 the spring started very strong and then it kind of got very, very soft. Some of the big people who normally spend the government's federal and provincial have cut back at lot. People have cut back a lot.

3263   So with the advent of some more specialty coming on board and the networks gobbling up more of the money the small markets are really under siege from a national revenue standpoint and will be reflected in the remainder of 2012.

3264   MS COURTEMANCHE: Right, and in our particular circumstances given the new dynamic that we are living in, we have a decreased ad inventory in which to monetize and make up that loss. We are doubly challenged and that's only started in 2012.

3265   So the old ad inventory applied to 2011. So in our world things changed dramatically this year.

3266   Now, to get back to your incrementality, what we said with respect to incrementality we were speaking from a small market perspective. We didn't think you needed to do that because we did it already. And our submission, I don't want to repeat what we said, we have demonstrated what were the increases we have done, the percentage, and we have detailed it. We are happy to expand if you would like to.

3267   But we thought you don't need to force it on us. We are doing it already and we understand that it's important to do. So we didn't think you had to have a requirement.

3268   But in the discussion yesterday things evolved and we can understand why on a going forward basis the Commission might want to go back to 2008-100 and say, you know what? We really wanted to grow local programming.

3269   But how you grow it in each market, you have to recognize that we operate under different circumstances.

3270   So for us, increasing the total number of hours is going to be difficult for the next four years. That doesn't mean we can't increase our expenditures and, you know, improve the quality and do things that are absolutely relevant and employ more people and news reporters and so on and so forth. But if your incrementality is purely tied to hours, that's going to be a problem for us.

3271   So what I was saying is that you know on your incrementality have a level of flexibility there that will allow for the unique circumstances of, you know, our markets to adapt to that incrementality.

3272   That's what we were trying to say. So we're not against it. We think it's a valid point but just don't make it one type of rule because one rule may not fit all.

3273   MR. HARRIS: Just to put a concrete example, our CBC contract, they control our schedule from noon till five and from eight until eleven. So we couldn't do any incremental programming in there except in Oshawa.

3274   So probably in Peterborough and Kingston our incrementality would be in improving the programming that we have on air, and in Oshawa we may well look at expanding the programming that we are doing.

3275   COMMISSIONER DUNCAN: Just so that I understand, when they control the programming in those hours, they get all of the advertising revenue from that; you don't?

3276   MR. ELLIS: We get approximately 20 percent of the inventory. That is down from about 39, 40 percent last year.

3277   COMMISSIONER DUNCAN: Just looking at your local and national sales, what impact would that have percentage-wise?

3278   I am looking at 2006 to 2011, but what kind of a percentage drop would you anticipate because of that new agreement?

3279   MR. ELLIS: Just looking at fiscal `12, we are anticipating a drop in revenue on the national side of anywhere from about 20 to 25 percent; whereas, on the local side, we have been able to maintain, and in some cases, because of a re-shifting of inventory, we have actually been able to increase it by 1 or 2 percent, but it's not a significant number in terms of dollar amount.

3280   COMMISSIONER DUNCAN: I guess what I see, when I look at it, is if companies are able to increase their PBIT margins as a result of getting the LPIF -- I mean, we see the LPIF is there, so I think it's a fair statement to say that it's as a result of it. One of the groups suggested that a company with a PBIT of larger than 15 percent, maybe, should be excluded from the LPIF.

3281   Actually, my thought, in looking at the model, was that maybe that's a bit high, and that party probably didn't have access to all of the information that I am looking at.

3282   I am just interested in your reaction to that.

3283   MR. ELLIS: There are a number of points that we would like to make in regard to that question.

3284   First of all, the issue for us is scale. For example, while the margin may seem large, the actual dollar amount is not.

3285   Our cost, for example, for a camera, or for a traffic system, or for overdrive, which we have in our stations, is the same as the station that is earning considerably more. That is the first area that we wanted to cover.

3286   Secondly, Sylvie, do you want to talk about margins and...

3287   MS COURTEMANCHE: The issue is, when you look at healthy margins -- and, yes, we do have healthy margins. Like we said in our opening statement, we are an efficient and innovative group, and we are proud of that. But in a market like ours, if you lose 25 percent of your revenue, that margin is going to go away very quickly.

3288   So the point we are making is, yes, it seems like a very healthy margin, but it would be very easy for that margin to be compressed to nothing very easily, because in absolute dollar terms it's not something huge. We are not in a $100 million market, we are in very much smaller markets.

3289   So if we lose 25 percent of our national revenues, and we are not able to grow our local revenues, in one year that margin could take us down to something that puts us, you know, in a very difficult position, as far as growing the company.

3290   The more you do better, the more you grow, and the more you, hopefully, invest.

3291   But I do understand the Commission's dilemma in deciding when is it too much, and I don't think we have decided what that too much should be. I think that we need to sort of confer a little bit more.

3292   But I just think that the Commission should remember that scale is important, and in smaller markets, events such as -- you know, if a major industry in our town shuts down, it has a greater impact than if you are in Toronto.

3293   So, yeah, you could be doing well, but if there is an employer of 500 people in a small community, that is going to dramatically change your economic outlook. I just think that the swings are so much different.

3294   But we are going to give it some thought, and there may be some options to the Commission.

3295   One of the things I was thinking about -- and I haven't talked to my team members, so they are probably going to hit me afterwards -- is to say that maybe you don't cut them off, but maybe you get a reduced amount. That's an option. You don't have to necessarily cut somebody off, especially in the smaller markets, where things are so volatile.

3296   So, if you have a profitability level above X, well, your eligibility goes down 50 percent or something.

3297   There are ways of working around that.

3298   COMMISSIONER DUNCAN: Do you think, as the Chairman mentioned this morning, that you could give us some of those suggestions?

3299   MS COURTEMANCHE: It was our intent to do that, but we were hoping --

3300   COMMISSIONER DUNCAN: We would like to have it sooner, so that other people could comment.

3301   MS COURTEMANCHE: Oh, sooner. Okay.

3302   COMMISSIONER DUNCAN: We will give you the dates, or whatever, if that is possible.

3303   MS COURTEMANCHE: Okay. We will certainly try.

3304   But what I was just saying was that I would hope there would be a little bit more flexibility. Just as we were talking about incrementality, I think that the Commission needs to be flexible in some hard rules, because cut-offs aren't necessarily good.

Undertaking

3305   MR. ELLIS: Just a concluding point in that regard, the PBIT levels are a snapshot in time, and I think we have spoken already about the fact that our situation, at least, is changing dramatically this fiscal. So we need a system or a regime that enables us to react with flexibility to those situations.

3306   MS COURTEMANCHE: For instance, if we had a good year last year, and then we were automatically caught, we would be cut-off.

3307   Let's say that we lost 50 percent of our LPIF, but then the next year you are having a very difficult year. Then that would make your following year even more difficult. You would have to look at some kind of a rolling average or something.

3308   You are getting into -- by its nature, once you start creating these types of rules, you are going to introduce a level of complexity, because if you don't, it won't be, necessarily, fair. Right?

3309   You know, hard and fast rules could be hard and not necessarily fair.

3310   COMMISSIONER DUNCAN: I guess we are introducing a dependency on this subsidy.

3311   MS COURTEMANCHE: Oh, I understand. You are trying to achieve two objectives. You are trying to make sure that we continue to have local reflection in markets, but at the same time you want the stations that are able to perform to stand on their own --

3312   COMMISSIONER DUNCAN: Yes.

3313   MS COURTEMANCHE:  -- and move toward that model, and we don't disagree with that. We just think that the transition should reflect the fact that we are not 100 percent -- we haven't recovered 100 percent, and it should reflect the fact that there are still economic uncertainties going forward.

3314   COMMISSIONER DUNCAN: When I look at your revenue lines, local and national, it looks like you have recovered, in absolute dollars in any event. But I understand now that you are faced with the CBC issue.

3315   Did that come as a complete surprise? Obviously you must have known that you had to renew your contract, but the position they took?

3316   MR. ELLIS: This contract actually took us about a year to negotiate, so...

3317   COMMISSIONER DUNCAN: It took...?

3318   MR. ELLIS: A year to negotiate.

3319   MS COURTEMANCHE: And it wasn't easy, to say the least.

3320   COMMISSIONER DUNCAN: The other thing that we have been asking is whether the percentage should decrease from 1.5 percent to 1 percent, because the half percent was in a very unique situation.

3321   MS COURTEMANCHE: There are a number of ways that you could do this, because the universe -- at one point, 5 percent included, you know, a number of players, and what we advocated in our written submission was that, regardless of what you do as far as decreasing the 1.5 to 1, or whatever, if you could sustain in absolute dollar terms what is happening to the small market stations, that would be helpful.

3322   Understanding your concern about growth, I think that one of the options you have is to say: Well, we will cap the amount.

3323   So regardless of whether there is growth or not, the opportunity is to cap that contribution.

3324   So if that is your concern, that is one way you can look at it.

3325   COMMISSIONER DUNCAN: The only problem I have there -- and you might want to give it some thought -- is that it doesn't -- I don't see, necessarily, that the LPIF received reflects itself in your increased expenses.

3326   MS COURTEMANCHE: If there was an element of incrementality, then there would be. Right?

3327   COMMISSIONER DUNCAN: There would be, yes.

3328   MS COURTEMANCHE: What I am saying is, if you do that, and you include incrementality, you achieve your objective. Right?

3329   COMMISSIONER DUNCAN: Okay.

3330   MS COURTEMANCHE: Which we have said we are okay with.

3331   COMMISSIONER DUNCAN: Okay. So if you are going to submit something, that would be great. Then others can have a look at it.

3332   You will give it some thought and...

3333   MR. HARRIS: The other thing I would like to add is that I think we should give John a little more time here, because I think that what is going on structurally with the national advertising piece is largely irreversible.

3334   The way that people are buying, the rating points have changed, and that is happening right now.

3335   MR. AONSO: We find nationally that the big players -- CTV, Global, CBC and Shaw -- they are not getting weaker. They are getting the first crack at the great shows, and there is evidence that Rogers is now allowing advertisers to buy specific shows across the country, to make it very easy to buy.

3336   At the end of the day, once that is purchased and specialty is purchased, there is very little left to go into these minor markets.

3337   And from a specialty standpoint, what we find is that they have their models, and a lot of the time the minor markets are the ones that are shown to be very cost-efficient in the way that our audience is transacted, on a cost per rating point basis, and when we come back in to kind of pick up the scraps, our costs are so far out of line, a lot of the time they go back and say: We are not going to achieve these markets.

3338   So by the time we get a kick at the can, it's almost completely done.

3339   And as more advertisers come into the national game, they want to buy network. They find that, you know, the agencies are consolidating. They are rationalizing their costs, and they don't have market specialists any more, it's buy specialty, buy network.

3340   Agencies are telling us: We don't like to buy the minor markets because -- you know, it's either too hard, or we don't have the manpower to do it. You know, we have to do it as efficiently as possible.

3341   COMMISSIONER DUNCAN: I think, probably just to be very frank, the concern that I have is that the fund was set up, as you know, to improve the quantity and quality of local programming. It wasn't set up to compensate for the fact that businesses might experience other problems, for example, the CBC contract renewal, or the fact that ad agencies are buying advertising spots in a more efficient manner. For them, I suppose, that is the motivation, but...

3342   It wasn't set up for that purpose, so that's --

3343   MS COURTEMANCHE: We understand that, and that's why we are saying that, at the end of the day, we still think -- the reason why we are bringing up these issues is that there seems to be an assumption that we have recovered and we are fine, and going forward we are going to grow revenues, and everything is just going to be wonderful.

3344   That's why we are raising that. I think that's the point we want to make.

3345   On the other issue, we have heard you, and we said: You know what, you're right. This was meant to contribute something more to the system, and you do that through incrementality.

3346   So we understand that.

3347   But, as far as changing the dynamics in the market -- Brian is just going to add one more thing. We know that, you know, you might find this not exactly directly relevant, but it is directly relevant because, when you are coming up with a policy, it has to be done within our operational realities. That's why we want you to understand our operational realities, so that you understand how that policy will fit in.

3348   MR. ELLIS: Briefly, one of the reasons why the CBC insisted that the number of avails we had be reduced was because they wanted to be able to sell regionally in these markets. They felt that they were at a competitive disadvantage against the other major players.

3349   COMMISSIONER DUNCAN: I understand. I think there will be more discussion on this when the SMITS group comes up, as well.

3350   The fourth objective that you supported being added to the objectives of the fund, I just wondered what you saw as the purpose for that.

3351   MS COURTEMANCHE: It was just to recognize the fact that small market stations have a unique operational circumstance that you won't find with a national network or in a large metropolitan.

3352   And the Commission has done it, and we cited the number of times. Since 2003, since the establishment of the DTH fund, the Commission has been recognizing the unique circumstances of small market independent television operators, and we just thought that that should be recognized expressly in the LPIF.

3353   But, do you have to have it? No, but we just thought, you know, that you have recognized it for almost ten years, so we thought it was reasonable to add that.

3354   COMMISSIONER DUNCAN: Okay. The other common question that we have been asking here is, if you were required to present greater detail on the expenses that you have made, and the receipts that you have gotten from the fund, do you have any objection to that?

3355   MS COURTEMANCHE: We have no problems. We do that on the Small Market Local Program Fund, as you know. We only get SMLPF for two of our stations. That's on the record. If you divide it in half, you know what we are getting per station.

3356   So that is not an issue, absolutely.

3357   COMMISSIONER DUNCAN: Okay. Thank you very much.

3358   Mr. Chairman, those are my questions. Thanks.

3359   THE CHAIRPERSON: Thank you.

3360   I have a couple of questions, as well.

3361   First of all, are you now carried on all of the satellites?

3362   MR. HARRIS: Kingston and Peterborough are carried in standard definition on all of the satellites. Oshawa is not yet carried, but we anticipate that it will be carried as of next year at this time.

3363   MR. ELLIS: And we are carried in HD on Cogeco.

3364   THE CHAIRPERSON: I want to reiterate, I guess, in looking at your financials, that notwithstanding the fact that you have said this afternoon and in your evidence that national advertising is eroding, and the way people buy is changing, when I look at your financials, I see nothing wrong with your national sales growth.

3365   And, yeah, you might be correct that somewhere out in the future things are softening, but at the end of the day there is no evidence of it.

3366   I hear that the first quarter may have been soft in 2012. I just read at noon today that Carney, the Governor of the Bank of Canada, has talked about strengthening in the Canadian market, as well. The markets are up, things are doing much better. He is anticipating perhaps sending more signals out there with interest rates going up. So our economy is strengthening.

3367   Quarter-to-quarter, things change. Day-to-day things change, as well. You see that, day-to-day, in your operations.

3368   We in the Commission have to make a decision; not on a day-to-day basis, but looking out and trying to anticipate these things, and there are going to be some hills and some valleys along the way, and we have to smooth it out.

3369   That is the job that, I guess, we have.

3370   The notion of -- I think it was a comment that, Ms Courtemanche, you said: It seems like a healthy margin, but it's very easy to compress it.

3371   The reality is, one of the reasons why this Commission is here is to be, to some extent, an insurance policy when issues related to public good, democracy, vertical integration, may cause Canadians to be less able to get information, utilize information, access information, than otherwise.

3372   But that's why we are here.

3373   We sensed something was wrong several years ago and we created the LPIF. I look at your financials, and with or without the LPIF, they are very healthy.

3374   I understand you are now suggesting that we go to incrementality. I can easily argue, as well, that maybe we just don't need it any more. Incrementality may be something that is good for the public, but it wasn't there three years ago when we introduced it, it was there as a stop-gap measure to deal with the situation at the time.

3375   It has been resolved. The health of your particular stations, anyways, has been resolved, which is great for the public, for yourselves, for your shareholders, and for us, as well, because the model worked.

3376   But maybe it's time to end it for those types of programmers out there, broadcasters out there, that have actually seen a recovery.

3377   Yes, something may happen in another year or two years from now, and if it does, I guess we are still here, unless something else changes.

3378   But at this point in time one can only anticipate that we will still be here, and as a result of that, one can still seek remedies that may be necessary.

3379   But to prolong something while the returns that you are getting are what we see here, it just begs the question: It has served its purpose. Why can't it end?

3380   MR. ELLIS: I would like to attempt to answer the first part of the question, and I think we can bring some certainty to the argument.

3381   First of all, our inventory levels are half of what they were in fiscal 2011, which is the number that you have before you. So it is a completely different situation.

3382   MS COURTEMANCHE: Yes, I would agree if our circumstances had not fundamentally changed in 2012. When you lose half of your inventory, you know, that has to have an impact going forward.

3383   But to your other question, which is, you know, how much is enough, I think that's why we believe that we need to come back to you with a proposal on profitability, to say, you know, who does need it and who really doesn't need it, and how do you wean people off.

3384   That's why we were trying to be helpful.

3385   So, having heard you, absolutely, we would like to make a proposal in that regard, but we just want you to recognize that it looks good, next year -- and that's a new reality for the next four years. For us, that decrease in inventory is not going to increase next year, Commissioner Katz, it is going to stay at that level for the next four years.

3386   And, in four years' time, we are being told that we lose 60 percent of our schedule, and we are going to have to find programming to replace that.

3387   So our transition is not going to be as necessarily easy as it might seem.

3388   THE CHAIRPERSON: But that was a decision that you negotiated with the CBC, in a market-oriented environment, and either chose to accept it or negotiated to the best of your ability, and that's what the market result was, notwithstanding your financials.

3389   And, obviously, the CBC didn't have this data, as well. I am sure that it would have been radically different if they had.

3390   But you were negotiating from your knowledge, they negotiated from their knowledge. You guys came to a mutual understanding, and that's how markets normally work.

3391   Yes, you may end up with a different inventory capability, but you also will change the way you operate your business as a result of it, I would imagine, because if you gave on one hand, you sure got something back on the other, if you are good, prudent negotiators.

3392   So, yeah, revenues may come down, but my guess is that some costs may come down, as well, on the other side, that we don't know about -- and I don't want to get into your negotiations. That's not the intent here.

3393   The intent here is to look at what is here, look at what the landscape is, look at why we are actually here today, and that is to look at the success and future of the LPIF.

3394   And, like I said, I look at your --

3395   MS COURTEMANCHE: We think that it has been successful, and it has translated in our markets to increased expenditures and better programming.

3396   But, having said that, we understand what you are saying, and that's why we are coming back with a proposal.

3397   THE CHAIRPERSON: I would also ask you, when you come back with a proposal, to include in there the benefits that you derive from the small market fund.

3398   It has a different purpose, obviously, but that's also why I asked the question whether you have been carried -- maybe not to the extent that you should be everywhere yet, but one of the reasons for the small market fund, as well, was for that purpose, to augment the lack of carriage in some areas, which you are now getting.

3399   All I am saying is, when you come back to us with something -- albeit it may not be on the public record in total, but when you come back to us, take a look at the --

3400   I used the word here -- I didn't want to call it a subsidy, but I wrote down the word somewhere.

3401   Take a look at the funding that you are getting that is not sales and marketing driven by your own organization, but what comes through the system. When I take a look at it, it is in the 20, 30 percent range, and the question is: Is that a reasonable amount of funding to get from the general public, from other BDUs, in order to sustain your business.

3402   MS COURTEMANCHE: Right.

3403   Could I just make a comment, though?

3404   And I appreciate everything that you are saying, Commissioner Katz, and I don't necessarily disagree, but I have to take exception when it comes to the small -- qualifying it as a subsidy. The Commission --

3405   THE CHAIRPERSON: I didn't say that it was a subsidy. I said that it's funding that comes from other than businesses that you run yourself through sales and marketing. That's why I chose my words carefully.

3406   MS COURTEMANCHE: Okay. But other people have used it, as you know, during the course of this hearing.

3407   I guess what I am trying to do is correct the record as to how people have couched the Small Market Local Programming Fund.

3408   The Commission was directed by the federal government back in 1995 to create an environment where there would be competition in the distribution business, and they thought the best way to do that was through satellite.

3409   And what happened, as you know, with satellite, is that the importation of distant signals that didn't happen in a cable environment, started occurring on a widespread basis, and it was not only the carriage -- or the non-carriage on the DTH satellite, it was also the fact that all of these signals coming in from other time frameworks -- or time shifting -- was taking eyeballs away from our programming.

3410   And let's remember that at least two of our three stations had to be carried since 2003. So even though we were carried, the Commission recognized that we were losing advertising revenues as a result of the importation of all of these distant signals.

3411   So, you know, we didn't do anything. We didn't ask for these distant signals to come in, but it was deemed public policy to have competition in distribution.

3412   So it wasn't because we weren't being an efficient operator. It doesn't mean that we weren't doing good local programming. Because of none of those issues, we were losing advertising dollars, and that's why the fund was created.

3413   So I just think that the premise of the LPIF and the premise of the Small Local Programming Fund are fundamentally different; they don't collide. As far as I'm concerned, they're two separate things and they shouldn't be -- you know, we didn't do anything wrong. The system changed and it hurt our business case to the point where, you know, it would have put us in peril.

3414   Having said that, on the LPIF, that's different altogether. So we're happy to --

3415   THE CHAIRPERSON: All I am saying is that the number that I quoted, the 25-35 per cent, is funding that is arriving at your front door that isn't driven by your own business strategy and business execution. That is all I am saying.

3416   MS COURTEMANCHE: Right. But my point is that part of that part of that funding arrived at our door was because of the fact that there was an erosion of our revenues and we couldn't repatriate it even if we tried to go out and sell it and do something about it. That's what I'm saying, that --

3417   THE CHAIRPERSON: So then I am missing something, because when I look at your financials between 2006 and 2011, your national sales revenue went up 25 per cent, so it has grown by 25 per cent over five years, 5 per cent a year, compounded, and maybe it could have gone up more than that, I am not disputing that. But notwithstanding what it has grown by and what your PBIT results are and the funding that you are getting through the various media, I sit back and go, at some point in time should all Canadian consumers of cable services be funding the LPIF portion now?

3418   MS COURTEMANCHE: Oh, I'm talking now -- and I don't disagree with the LPIF. The only reason I'm taking exception is that I just hope that the Commission draws a line between the funding that comes from the small market Local Programming Fund and treat the two separately --

3419   THE CHAIRPERSON: We are not here right now to debate the small market. All I am saying is that when you respond, take a look at what else is coming in the front door and rationalize it is all I am saying, as part of the --

3420   MS COURTEMANCHE: Right, and my rationalization will be that I understand what you're saying on the local programming fund, but I'm just saying that on the small local programming fund the rationalization is that there was a public policy reason this occurred and I don't see why that has changed. That's the rationalization I don't get.

3421   I can rationalize the LPIF, but I'm not sure what you are expecting me to do on the small local programming --

3422   THE CHAIRPERSON: But when I asked you whether the carriage, whether you are now getting carriage to offset --

3423   MS COURTEMANCHE: Well, I have been carried since 2003 but, you know, the world has changed and now I am not carried in HD and the eyeballs are now going to HD, so --

3424   THE CHAIRPERSON: But you weren't carried on satellite at all even in analog up until one or two years ago.

3425   MS COURTEMANCHE: No, no, we were carried --

3426   THE CHAIRPERSON: All the way through?

3427   MS COURTEMANCHE: Yes, that is what I was saying. Not on both systems, but we have been carried for almost ten years on at least one of the systems.

3428   THE CHAIRPERSON: I won't debate it here, but you know what my point is and I know what your point is.

3429   MS COURTEMANCHE: The carriage didn't occur last year is what I am trying to tell you, so it's not an absolute, you know.

3430   THE CHAIRPERSON: Okay.

3431   Any other questions? Commissioner Morin?

3432   CONSEILLER MORIN : Merci, monsieur le Président.

3433   Hier, comme vous le savez, j'ai déposé un document et j'ai demandé la question au groupe Pattison et au groupe de Channel Zero. Je leur ai demandé, par semaine, quel serait le seuil de nombre d'heures par semaine de nouvelles vraiment locales, segments locaux?

3434   Je voudrais aujourd'hui amener un autre élément. Supposons que les indépendants ne sont pas aussi confortables que le groupe Pattison ou l'autre groupe, Channel Zero, avec 10 heures de segments locaux par semaine. Est-ce que l'élément de progressivité pourrait être intéressant pour vous ou pour d'autres, dans le sens suivant.

3435   Le CRTC pourrait très bien dire, oui, on a un seuil de nouvelles vraiment locales. On veut s'assurer que les fonds seront bien dépensés en nouvelles locales. C'est une décision qui pourrait venir de la Commission. Je le répète encore, ce n'est pas une décision de la Commission pour le moment, mais supposons que vous êtes plus confortable avec six heures comme programmeur. Si vous aviez six heures, pour prendre un exemple très simple, vous auriez accès à peut-être 75 pour cent du montant que quelqu'un qui ferait 10 heures, comme le groupe Pattison ou le groupe Channel Zero.

3436   Est-ce que cet élément de progressivité rendrait la tâche plus facile pour le Conseil si, et je dis «si», si le Conseil décidait d'aller de l'avant avec un contenu de nouvelles locales, locales, pour accéder au fonds?

3437   MME COURTEMANCHE : Juste pour bien comprendre, monsieur le conseiller Morin, parce que là on a parlé d'un seuil qui serait relié à la profitabilité. Alors, si je comprends bien, c'est que le Conseil n'utiliserait pas un seuil de profitabilité et donc -

3438   CONSEILLER MORIN : Non. Ma question est plus limitée que ça. Elle porte uniquement sur ...

3439   MME COURTEMANCHE : Oui, oui, mais c'est parce qu'il faut que je comprenne le contexte, conseiller Morin. C'est toujours très important.

3440   Si vous me dites qu'il y a deux seuils, il y a un seuil de profitabilité et un seuil de minimum de nouvelles locales, ça change ma réponse. C'est pour ça que je vous dis ça.

3441   ONSEILLER MORIN : Prenez les deux hypothèses.

3442   MME COURTEMANCHE : Je prends les deux hypothèses. Alors moi je vais dire, s'il n'y a pas un seuil de profitabilité, on parle seulement au niveau de ...

3443   CONSEILLER MORIN : Du produit.

3444   MME COURTEMANCHE : Du produit. Je peux vous dire que dans nos marchés, on a fait la validation hier soir et les segments qui sont locaux, locaux, dans deux des marchés c'est 94 pour cent du bulletin de nouvelles et dans l'autre marché c'est 90 pour cent.

3445   CONSEILLER MORIN : Mais c'est combien d'heures par semaine?

3446   MME COURTEMANCHE : Oui, ça j'en conviens. Dans deux des marchés c'est 13,4 heures par semaine et dans l'autre marché c'est seulement 2,5 heures, mais dans ce marché-là c'est un répéteur dans lequel on a seulement un petit pourcentage dans lequel on peut monnayer la programmation locale. Ce n'est pas tout à fait une pleine citation, il faut se comprendre.

3447   Alors ce que je vous dis c'est que nous autres, on va réfléchir à ce que vous avez dit et on va revenir avec une proposition plus ferme. Mais ce que je peux vous dire c'est que j'aurais de la difficulté s'il y avait deux seuils, si on parle d'un seuil de profitabilité et un seuil - là on se complique la vie pas mal parce que là, si on est moins profitable ça va être bien plus difficile de se commettre à des seuils de pures nouvelles locales. Un a un impact sur l'autre, si vous comprenez ce que je vous dis.

3448   Alors on vous reviendra avec une proposition plus ferme.

Undertaking

3449   CONSEILLER MORIN : Je vous remercie. Ce sont mes questions, Monsieur le Président.

3450   LE PRÉSIDENT: Merci.

3451   Commissionner Lamarre?

3452   CONSEILLÈRE LAMARRE: Merci, Monsieur le Président.

3453   Radio-Canada a proposé qu'on réinstaure la question d'ajout de programmation locale n'exigeant que les stations qui étaient bénéficiaires du fonds fassent une heure de plus de programmation locale par semaine que ce que leurs conditions de licence exigent.

3454   Moi ce que je me demande c'est, dans le contexte du contrat d'affiliation que vous avez, avez-vous une heure de plus sur votre grille horaire pour faire la programmation locale?

3455   MME COURTEMANCHE : Dans deux des marchés, non, et dans un des marchés, oui.

3456   CONSEILLÈRE LAMARRE : OK. Une fois qu'il n'y aurait plus d'entente d'affiliation, ce serait autre chose, vous avez toute la grille horaire pour vous.

3457   MME COURTEMANCHE : Oui. Là, par exemple ...

3458   CONSEILLÈRE LAMARRE : Là c'est ouvert.

3459   MME COURTEMANCHE : Oui.

3460   CONSEILLÈRE LAMARRE : Mais jusqu'à ce que votre contrat d'affiliation avec Radio-Canada se termine, vous me dites que dans deux marchés vous pourriez rajouter une heure -

3461   MME COURTEMANCHE : C'est le contraire. Dans deux marchés on ne pourrait pas.

3462   CONSEILLÈRE LAMARRE : Et dans l'autre marché, vous pourriez, oui, rajouter une heure.

3463   MME COURTEMANCHE: Oui.

3464   CONSEILLÈRE LAMARRE: Et qu'est-ce que vous en pensez de cette idée-là?

3465   MME COURTEMANCHE : Moi, je pense que l'idée de dire que tout le monde fait une heure de plus ne reconnaît pas que ... est-ce que j'ai bien saisi que la recommandation est que, admettons que c'est harmonisé et que notre marché c'est sept heures, on est éligible en autant qu'on fasse huit heures. Est-ce que c'est ça la proposition?

3466   CONSEILLÈRE LAMARRE : C'est ça.

3467   MME COURTEMANCHE : Nous autres, en principe, dans deux des marchés ça fonctionne mais l'autre marché ce serait plus difficile, ça fait qu'on aurait de la difficulté dans un de nos marchés. Ça nous exclurait dans un de nos marchés.

3468   CONSEILLÈRE LAMARRE : Je vous remercie. C'est tout.

3469   LE PRÉSIDENT: Merci bien.

3470   Any other questions? Counsel? No?

3471   Thank you very much. That completes our examination of Corus.

3472   We will take a five-minute break.

--- Upon recessing at 1434

--- Upon resuming at 1443

3473   THE SECRETARY: We will now proceed with the presentation Newfoundland Broadcasting Company Limited.

3474   Please introduce yourselves and you have 10 minutes for your presentation.

PRESENTATION

3475   MR. NEAL: Good afternoon, Mr. Chairman, Mr. Vice-Chair, Commissioners, members of the Commission staff.

3476   My name is Douglas Neal and with me today are Mr. Scott Stirling, President of Newfoundland Broadcasting; and Mr. Fred Hutton next to him, Director of News and Current Affairs for NTV; and Mr. Greg Stirling at the end, a Director of Newfoundland Broadcasting.

3477   We come before you today to provide some additional insight into some of the challenges that NTV faces.

3478   Mr. Stirling...É

3479   MR. SCOTT STIRLING: Good afternoon, Chairman, Vice-Chair, Commissioners and staff.

3480   Every month on many Canadian cable bills the LPIF charges are shown at the bottom of the bill. It is added on and therefore not coming out of cable revenues. On a $100 cable bill the fee is $1.50 and on a $50 cable bill the charge is $0.75. Most viewers would pay $0.75 a month to receive their local stations with improved local programming in addition to other convention stations available to them.

3481   Since Canada allows specialty channels to receive subscription fees in addition to advertising in most cases, the LPIF helps balance the fact that conventional stations are not paid for the retransmission of their signals and programs. In comparison, cable companies in major U.S. markets charge around $18 a month for a package of local channels as part of retransmission consent fees.

3482   NTV's advertising revenues this year will end up around $1 million behind last year. For our industry the financial crisis is not over. The industry as a whole is losing money. So this is not the time to end the LPIF, but instead to recognize the incredible contribution this fund is making to our Canadian broadcasting system.

3483   The backbone to our system is local programming. The vast majority of local viewers watch their news on local conventional television. To pull the plug out from under these viewers and their local stations would have a disastrous effect on stations like NTV. The loss of jobs and the loss of the quality programming affected would greatly diminish the value of traditional broadcast television in Canada.

3484   NTV's local programming gives Newfoundlanders and Labradoreans a perspective on our culture, our music, the arts, local sports, news, politics, community events and so much more.

3485   Local television helps us identify with our community, our province and our country.

3486   NTV is in the majority of LPIF recipients who are not vertically integrated. We survive through ratings and advertising revenue. With so much audience and revenue fragmentation by ever-increasing numbers of specialty channels, the Internet, Netflix, pay-per-view and so on, it is a challenge for conventional television to compete solely with advertising revenue. Without retransmission fees for our signals being sold to viewers by cable and satellite companies, the LPIF is a lifeline that is rightly focused on the production of local programming for the benefit of local viewers everywhere in Canada.

3487   Strong viewer supported conventional television helps everyone, including viewers, broadcasters and the distribution services themselves which sell our signals. Consider for example that NTV and other Atlantic conventional stations represent the majority of all cable viewing hours in our market. Many viewers would simply drop cable and satellite if not for the presence of their local stations. With so many other options, local programming makes cable and satellite must-have service for many local and regional viewers.

3488   Regarding the LPIF, we should be going forward, not backwards. The fund should be reformed and made permanent.

3489   Thank you.

3490   MR. NEAL: We would now like to play you a short video presentation we have prepared, which highlights some of the things that we have been able to accomplish over the past few years, largely because of LPIF funding.

--- Video presentation

3491   MR. HUTTON: Mr. Commissioner, Mr. Vice-Commissioner, members of the Commission, thank you for your attention and time. You have just watched a video that's actually just a small sample of some of the things NTV news does on a daily basis. In addition to that, our production crew, we have put out programming about Royal visits, provincial budgets, Christmas parades, live New Years Eve celebrations. At NTV we exclusively do that, the other broadcaster in the area does not. Teen pageants, just to mention a few.

3492   Once again, thank you for your time. If you have any questions further about any of the programming we have done, I would be happy to answer them.

3493   MR. NEAL: NTV has spent millions of dollars to make itself competitive through the implementation of HD upgrades at our studio and transmitter facilities in St. John's.

3494   We were the first station in Atlantic Canada to provide HD transmission. On August 3, 2011, just in time for NTV's live local coverage of the Royal St. John's Regatta, we began broadcasting in HD.

3495   Cable companies operating in Atlantic Canada responded by providing the NTV signal in HD to their customers almost immediately. However, DTH providers have not. To date, neither DTH provider has given us any indication that they intend to carry NTV's signal. As a result, many cable companies outside of the Maritimes are also not carrying NTV's signal in HD. We suspect they may be using the DTH providers SRDU services as their source.

3496   Today HD the de facto standard for television in Canada. The recently announced closure of CBC's analog service in July 2012 now helps to underscore that.

3497   We have heard from customers of many of the services not carrying NTV in HD asking why we are not delivered in HD. We have no answers for them. As a result, these customers are disadvantaged, while valuable simulcast opportunities for NTV are lost. We have heard time and time again that once people start viewing in HD, they typically watch only HD channels. The longer we are not carried in HD, the more audience numbers inside, and also outside, Newfoundland are diminished and therefore so is our revenue.

3498   NTV has also been removed from Rogers cable systems in Ontario. Program duplication was given as the reason. NTV news and public affairs programming is not duplication.

3499   Ongoing expenses related to the provision of equipment for the production of local news and programming also concern us. Since changing to digital, we have discovered that early obsolescence seems to be the hallmark of digital equipment. Our experience has been that the useful life of digital equipment is much shorter than its analog predecessors. These devices are computer-like or computer-driven and frequent software changes dictate early hardware obsolescence. I have seen the lifespan of many software-driven devices as short as three years, while the analog units they replaced had life spans of at least 10 to 15 years.

3500   Maintaining this pace of capital replacement requires ongoing expenditure at a time when many forces beyond our control limit our ability to generate the revenue necessary to operate day-to-day.

3501   Indirectly, the LPIF helps to rebalance these shortfalls.

3502   That's our presentation and we would be happy to answer any questions.

3503   THE CHAIRPERSON: Thank you.

3504   Commissioner Patrone will lead the questioning.

3505   COMMISSIONER PATRONE: Thank you, Mr. Chairman.

3506   I appreciate your presentation this afternoon and your video. That's a pretty impressive set, by the way, that he was in front of there.

3507   Off the top of your presentation you say that most viewers would pay $0.75 a month to get their local station with improved local news and I'm wondering how you came to that conclusion because whenever I ask people about their cable bills they usually say those bills are high enough. How did you come up with that? Did you do some surveys?

3508   MR. SCOTT STIRLING: We have done surveys, but I guess probably the best one is that if you looked at the conventional stations in Atlantic Canada they represent the majority viewing on the cable system, the cable hours. I mean if you look probably -- I haven't done this, but if you looked at the cable hours nationally I think that conventional stations are probably if not in the majority certainly close to it. So half the hours that people are watching television on cable and satellite are conventional stations, and especially local stations.

3509   NTV, for example, is somewhere between 20 and 15 percent of all viewing hours in Newfoundland on the cable system. So based on that, if you are spending $50 for that viewing and the station you are watching 25 percent of the time is $0.75 of the $50, I think it's pretty clear.

3510   COMMISSIONER PATRONE: You say that the LPIF offsets the absence of retransmission regime.

3511   Without going too far down that rabbit hole, are you saying that if there are changes in that area going forward that you would then deem the LPIF to be unnecessary?

3512   MR. SCOTT STIRLING: Well, there is probably about 80,000 households in Newfoundland and they are either mostly with either cable or satellite, and if they all paid one dollar a month, $12 a year, that would equal the LPIF fund that we are getting. And that's just in Newfoundland itself.

3513   COMMISSIONER PATRONE: It's interesting that you raised the issue of Netflix in your presentation because there are BDUs whom you refer who are making the case that they need subsidies to decline so that they can better compete with over-the-top services.

3514   Isn't it time to give the consumers a break?

3515   MR. SCOTT STIRLING: Well, I totally agree with you it's time to give consumers a break. I mean I think consumers should pay for the signals they want to watch for one thing. Why should they have to buy a bundle of services for channels they don't watch? I have seen a survey where most people watch 10 channels.

3516   COMMISSIONER PATRONE: I suspect they would be blaming us for that probably.

--- Laughter

3517   MR. SCOTT STIRLING: I don't know who they blame, but I agree that consumers need a break.

3518   COMMISSIONER PATRONE: NTV has been around since 1955.

3519   MR. SCOTT STIRLING: That's right.

3520   COMMISSIONER PATRONE: Do you believe that ending the LPIF would jeopardize the future of NTV?

3521   MR. SCOTT STIRLING: I really honestly do.

3522   As I said, our revenues this year are down a 1 million dollars compared to last year and that's really how we live is advertising revenue. And we are a small station in a small province, so a 1 million dollars represents a huge percentage. And to drop that -- from one year to the other -- and that equals basically the LPIF, so that would be a second million dollars if that was withdrawn starting in September, and we are facing a lot of competition. You know, you have licensed a lot of specialty channels and every time a channel comes on that's another fragmentation, not just with viewers but also with advertising revenues.

3523   So there is no question that we -- for example, just today Doug, Senior Vice-President, Chief of Engineering, was showing me a vehicle, because we now have two vehicles that have satellite uplink and microwave capability, and we are huge land mass and to try to cover life news around the province, you know, so we went ahead with a second vehicle because of this fund and now the first vehicle is reaching the end of its life. We have a Hummer that's about 10 years old and starting to break down, so he's showing me potential new vehicles that we can replace the Hummer with and I'm saying we have to wait, I don't know if we go forward.

3524   COMMISSIONER PATRONE: I can appreciate that ad revenues are still suffering as a result of the downturn, but there is an argument that subsidies foster a sense of dependency. You have heard this argument, that they kill innovation and that they stymie the development of new economic approaches to doing what you do.

3525   MR. SCOTT STIRLING: I totally agree with that.

3526   COMMISSIONER PATRONE: But if you say that now is not the time to end it, when would that time be?

3527   MR. SCOTT STIRLING: Well, I don't think it's a subsidy. That's our whole presentation.

3528   If you are taking something that's costing us millions of dollars of product, it's costing millions of dollars to create and you are taking it and you are selling it and you are making money on it and you are not paying anything for it --

3529   COMMISSIONER PATRONE: Well, we are not selling it.

--- Laughter

3530   MR. SCOTT STIRLING: You are not. Where's the cable guys, I will look at them.

3531   COMMISSIONER PATRONE: You are charging your advertisers presumably --

3532   MR. SCOTT STIRLING: Pardon me?

3533   COMMISSIONER PATRONE: You are charging your advertisers. You say your ratings are up, you say that people are --

3534   MR. SCOTT STIRLING: The ratings are up for our news, but the ratings are not up in general. There is more and more fragmentation.

3535   COMMISSIONER PATRONE: Well, I mean either people want local news or they don't. I mean you have made the argument that what you are doing is a key part of what Newfoundlanders appreciate. That being the case, why would fragmentation matter? I mean you are giving them something unique, are you not?

3536   MR. SCOTT STIRLING: Well, no. What I just said was our news is not down, our news has gone up and that's really what keeps us in the game is our news, but there is fragmentation. We are not a 24-hour news station so in terms of our other programming it is eroding dramatically really year-to-year.

3537   COMMISSIONER PATRONE: But if you say the vast majority of local viewers watch their news on local conventional TV, shouldn't you be able to monetize those ratings numbers so that your local news pays for itself without the need for the LPIF?

3538   MR. SCOTT STIRLING: Our local news pays for itself.

3539   COMMISSIONER PATRONE: What do you need an LPIF for then?

3540   MR. SCOTT STIRLING: Because the station itself requires more than just local news. I mean we have to broadcast, we have -- like I just said, the news will suffer if we can't afford to go forward. But the fragmentation is something that is critical.

3541   The other thing I would like to mention is that in the last few years -- and I don't think I have heard this in these discussions the last few days -- but the Commission has relaxed the regulations on broadcasters to have more advertising minutes per hour. That has made a difference. That has helped, but again it's not the answer that's going to resolve everything in the future.

3542   In a sense, we believe that conventional television can hurt itself by having too many commercials, so we don't actually use all the minutes available that we could. We have checkpoints, we have news checkpoints, we have weather checkpoints, we show the highways with live cameras.

3543   COMMISSIONER PATRONE: Are you saying that you have cut back on your advertising because you have access to LPIF?

3544   MR. SCOTT STIRLING: No. No.

3545   COMMISSIONER PATRONE: I'm sorry, I thought you said --

3546   MR. SCOTT STIRLING: I'm talking about -- I'm talking about --

3547   COMMISSIONER PATRONE: I thought you said you're not using all the advertising minutes that you are able to use because people don't like advertising.

3548   MR. SCOTT STIRLING: No, I'm saying --

3549   COMMISSIONER PATRONE: Did I not hear you correctly?

3550   MR. SCOTT STIRLING: You are putting words in my mouth and I appreciate the fact that I have a chance to speak back to it.

3551   We feel that the brand is important, that the image, that the brand, that the local connection with our viewers is very important and so when you relaxed -- and in America they have a 38-minute hour show, so you have 22 minutes of commercials and many Canadian broadcasters are filling 22 minutes with commercials. But we have made that conscious decision that if you lose your brand -- which is a local identity, so if you are watching a show, an American show that happens to be on NTV, or another show, we don't want to have 22 minutes of commercials in a 60 minute show, we would rather have at least some kind of local presence, a checkpoint talking about local conditions and weather, and so on.

3552   COMMISSIONER PATRONE: You have spoken a little bit, Mr. Stirling, about capital upgrades and the need to upgrade the equipment that you use and how expensive it is, and I can appreciate that.

3553   In paragraph 12 of your written submission you say your screen weather presentation was enhanced with more features.

3554   As you know, the fund is not intended for capital upgrades, the funds in the LPIF are supposed to be delegated entirely towards local programming improvements, like the hiring of reporters, which I believe you have done.

3555   Can you assure this Panel that you are not diverting these funds towards equipment upgrades that would normally be considered just part of the cost of doing business?

3556   MR. SCOTT STIRLING: No, we are not charging the fund for graphics that have to do with weather, but we have two weather services and one is a mainland service that does provide graphics, but that's not part of it.

3557   But to have a local component where we can actually have a meteorologist if there is a big storm, so we have a partnership with a local weather service as well. So we have made that decision to have a local component to weather and to be able to have a meteorologist come in when it's warranted and talk about the weather.

3558   COMMISSIONER PATRONE: One of the criticisms of the fund is that there has not been the level of accountability or reporting back as some would like. Were we to continue the fund, would you agree to tighter criteria as far as reporting back on how those funds are used?

3559   MR. SCOTT STIRLING: I absolutely would. We would have no problem justifying that.

3560   I would be interested to see how CBC would justify it because they are getting 2 1/2 times more from the fund in Newfoundland itself than we are, and yet we produce three times more local programming per week, our ratings are double them. So when I heard this fund was being set up three years ago, that was my first concern, was that, well, they are inefficient, they have three times our staff and yet produce just a fraction of what we produce so they are going to be rewarded for their inefficiency.

3561   So I think that is a big component in this. I'm not saying the CBC should not be part of the fund, but yes, there should be more criteria. That's what I mean when I use the word "reform".

3562   COMMISSIONER PATRONE: By that rationale, though, were we to drop the fund you would have more to spend relative to your main competitor in, say, St. John's, or elsewhere in Newfoundland, because they would presumably be taking a bigger hit than NTV would.

3563   MR. SCOTT STIRLING: Well, they get almost $20 million a year from the taxpayer and we don't get that, plus they get -- they have advertising. They undercut us.

3564   You know, my father 20 years ago made this argument about CBC local selling. Maybe that's the answer for the LPIF, is take CBC out of local selling, in the smaller markets especially. Maybe that will balance it.

3565   COMMISSIONER PATRONE: Maybe a future proceeding might look at that one, Mr. Stirling.

3566   Could you talk a little bit about where you did spend the money, a little bit about the personnel.

3567   You hired reporters, is that correct? You talked a little bit about --

3568   MR. SCOTT STIRLING: I think our News Director would speak much more clearly than me about that.

3569   MR. HUTTON: Thank you, Commissioner.

3570   Just by way of a quick history, I started at NTV in 1990 as a reporter, I have been anchoring the news there as well since 1992, became Assistant News Director in 2001 and the News Director in 2008, in September of 2008.

3571   Just for an example, in about a five year span leading up to 2009 we had talked about expanding our 6 o'clock newscast, which is our flagship program, 6:00 to 7:00, to a 90-minute program, modeling it after other stations across Canada which do that. They have a half-hour sort of current affairs lead in.

3572   It was on the table, but was never even entertained because of the cost associated with it. Because if you put 30 minutes out there you have to be able to put good quality reporting in there, not just stripped from other places or take away from your viewers at 6 o'clock.

3573   As soon as the LPIF was announced, within a year we had launched that program, that 30 minute program.

3574   COMMISSIONER PATRONE: Did that involve the hiring of personnel?

3575   MR. HUTTON: It did indeed. Yes, sir. It involved taking somebody who was already working in our 6 o'clock show, moving him to 5:30 to anchor that solely, taking him out of reporting from 5:30, but then we also hired three more support staff for that program so that he could anchor that program and not take away from the 6 o'clock show.

3576   COMMISSIONER PATRONE: So you hired three more people just for that show?

3577   MR. HUTTON: Yes.

3578   COMMISSIONER PATRONE: Do you know offhand in total how many people you hired once the LPIF -- that was it?

3579   MR. HUTTON: That was it. And we had one reporter who left, but we hired two more, so we were up actually -- that was the fourth person.

3580   COMMISSIONER PATRONE: Because I'm looking at the figures in front of me -- and they are protected so obviously they are not going to be made public -- but I'm trying to reconcile the hiring of three people with the amount of LPIF funding that you received and I'm trying to understand what -- I have a pretty good idea of what you are paying your personnel in that newsroom --

3581   MR. HUTTON: Yes.

3582   COMMISSIONER PATRONE: Where did the rest of it go?

3583   MR. HUTTON: Well, if you look at, I think it's Appendix D that is with our submission, it shows over the last three years the number of special programs that we have done.

3584   One of the things I highlighted in the video there was the debate, the first provincial live Leaders Debate from the Legislature outside a television studio. We had to hire an entire lighting crew to go in. We brought all our equipment over there, I mean it just cost tens and tens of thousands of dollars to just do one half hour of programming, as you know I'm sure.

3585   Our federal election coverage, there was 30 people involved in that. We were the only local TV station to mount any federal election coverage whatsoever in conjunction with CTV, but we had our three hours that we could put together.

3586   COMMISSIONER PATRONE: And congratulations on the award that you received for that.

3587   MR. HUTTON: Thank you very much.

3588   Again, provincial election coverage, same thing, 30 people across the entire province.

3589   It's a Herculean event to try to mount that kind of -- with the resources that we have and the trucks to try to get live remotes from those places. Thankfully technology has changed.

3590   We have increased our travel budget to allow people in our station to travel just within the province, which is expensive. To fly to Labrador, just to go up and back is about $1200 or $1300.

3591   COMMISSIONER PATRONE: Yes, understood. You have a Bureau in Corner Brook, do you?

3592   MR. HUTTON: We do indeed, sir, but it's still expensive to fly from Deer Lake.

3593   COMMISSIONER PATRONE: And Gander?

3594   MR. HUTTON: And Grand Falls, Windsor.

3595   COMMISSIONER PATRONE: Yeah.

3596   MR. HUTTON: They are permanent bureaus. We have expanded our stringer budget by almost 50 percent which would allow me to call on someone on the tip of the northern peninsula to cover some spot news or some event that's taking place out there.

3597   COMMISSIONER PATRONE: Fair enough.

3598   Yeah, I want to get moving because I know my colleagues want to pipe in, I'm sure.

3599   But you said that the Fund should be reformed. Did I hear you correctly, Mr. Stirling?

3600   And you spoke a little bit about your ideas regarding that. Do you want to elaborate?

3601   MR. SCOTT STIRLING: Well, CBC is taking almost half the Fund. I mean $41 million out of $100 million is 41 percent and that was up from $32 million. So they are on a plane, you know, to get to half.

3602   As I said, if they're getting $20 million in Newfoundland and their capital is outside of that and their programming is outside of that which we have to absorb only through advertising, plus they have advertising, so there needs to be some serious reform if they are going to be part of it at all.

3603   COMMISSIONER PATRONE: You are talking about reforming the entire system, though.

3604   MR. SCOTT STIRLING: Well, the criteria -- maybe it's the criteria. Maybe they should not qualify. Maybe they should. Maybe it should be based on something other than just how much they spend, especially if you're going to count the taxpayer money that they are getting and the grant they are getting. Maybe you should look at their advertising revenue and how much of that is going to local.

3605   I mean I don't know exactly how you do it but you know the vertical integration networks as well, you know, that are owned by the distributors, they don't seem to feel that the Fund is worthwhile so perhaps they shouldn't participate.

3606   COMMISSIONER PATRONE: Well, Bell has come out in favour of it.

3607   MR. SCOTT STIRLING: Pardon?

3608   COMMISSIONER PATRONE: Bell has come out in favour of it.

3609   MR. SCOTT STIRLING: Bell was in favour, yes, but the cable companies.

3610   So perhaps if they didn't pay their own conventional stations and they could reduce that 1.5 percent.

3611   COMMISSIONER PATRONE: Thank you.

3612   MR. SCOTT STIRLING: Yeah, okay.

3613   COMMISSIONER PATRONE: I just have two final questions, sir.

3614   If we dramatically reduce the size of the Fund but restricted it to independent operators like yours, what would you think of that idea going forward?

3615   MR. SCOTT STIRLING: I mean it would make sense in the way that we don't have other sources of revenue. You know obviously Global has other sources of revenue. CTV has other sources of revenue. CBC has other sources of revenue.

3616   So if you're talking about the big networks and not putting them into this Fund, obviously I'm not going to argue against that.

3617   COMMISSIONER PATRONE: I didn't think you would. There have been other proposals put before us, including a two or three-year phase out of the Fund.

3618   - Another suggestion that we allow independents like yours to maintain the Fund for a couple of years before we ended it altogether.

3619   - And a proposal by Bell which would address, I suppose, some of the concerns you raised about rewarding viewership and in the sense rewarding success in ratings rather than simply rewarding expenditures.

3620   Do you want to comment on those proposals for me?

--- Laughter

3621   MR. SCOTT STIRLING: What was the first part of --

--- Laughter

3622   COMMISSIONER PATRONE: There was a proposal to end the Fund after a two to three-year period.

3623   One proposal that I had heard involved basically saving it for the independents for a couple of years and then ending it, just to kind of give you a period to adapt to the new world order before cutting it off.

3624   Then the other proposal which is the Bell model which you may be familiar with, which is geared more towards directing funds towards based on viewership based on -- so it would reward success. So presumably you are number one in your market, I believe, in the way of ratings.

3625   MR. SCOTT STIRLING: We are. Well, I think the Fund should continue indefinitely; really, in fact, permanently. I mean if there is not going to be retransmission for our signal.

3626   If it costs us millions of dollars to create a product that then is being sold by another party that's not paying us anything for it, then at least if the local Fund for production is there, that helps obviously.

3627   So I don't see it as a subsidy. I certainly don't see it as a tax. It's a compensation. It's a limited compensation.

3628   So I think it should be permanent until some other resolution takes place.

3629   But, you know, it helps -- as I said, it helps the cable companies and the satellites to have local stations because all viewers are local viewers. Wherever they live they are a local viewer. They want to see their community reflected on television. So they will pay for that service to get that.

3630   I mean if you took Bell and said, "You just carry CTV" and you take Shaw and you say, "You just carry Global" and you take Rogers and say, "You just carry the Citytv" well, then what's going to happen? CTV is top rated. So suddenly, their satellite subscriptions are going to go up. So they are all kind of not charging each other. I mean at some point they may decide they have to charge each other.

3631   But I think the Fund should continue. And I think certainly for small stations and independent stations that have no other source of income. And looking down the road with the fragmentation -- there is going to be more and more fragmentations if there is another six specialty channels licenced this summer. That takes not just viewers but also revenue.

3632   And then of course the internet is coming along. There is more and more television shows on the internet which I don't totally agree with as a broadcaster. It makes perfect sense if I'm a distributor and I have a mobile phone and so I want people to use the mobile phone and watch for an hour a TV show so that now their data plan is really high. I mean it makes perfect sense.

3633   Maybe down the road there is not going to be fibre optic cables. It's all going to be on the internet maybe 10, 15 years down the road. So maybe they are thinking that far down the road. Why wouldn't they and say, well, you know if we buy these networks we own the programs so no one else can come along and create a subscription website that can do this.

3634   So you know for the independent television broadcaster that has no other source of revenue this Fund really is a lifeline.

3635   COMMISSIONER PATRONE: Okay.

3636   MR. SCOTT STIRLING: And it's a bridge to somehow getting some kind of compensation for our signal. If I come and take gas out of your car and sell it tomorrow and you say to me, "I want some money for that" and I'm going to say, "Oh, that's a tax. You want me to subsidize you".

3637   COMMISSIONER PATRONE: Yes. The Fund wasn't intended as compensation for the absence of --

3638   COMMISSIONER PATRONE: I understand that but it has been a lifeline.

3639   MR. SCOTT STIRLING: Yeah.

3640   THE CHAIRPERSON: Okay. Thank you very much for your comments.

3641   MR. SCOTT STIRLING: Thank you.

3642   THE CHAIRPERSON: Thank you.

3643   Commissioner Lamarre...?

3644   COMMISSIONER LAMARRE: No.

3645   THE CHAIRPERSDON: Commissioner Poirier...?

3646   COMMISSIONER POIRIER: Yes. Well, the question has been addressed.

3647   But just to continue on the fact that you support the Fund should become permanent you are probably the only one saying that. Up to now they have all said maybe two or three years would be --

3648   MR. SCOTT STIRLING: So we all come back here in two years and have all this discussion again.

3649   COMMISSIONER POIRIER: And repeat everything, okay.

3650   MR. SCOTT STIRLING: Well, I'm enjoying myself so much.

3651   COMMISSIONER POIRIER: It will occupy us, yes.

3652   MR. SCOTT STIRLING: I would like to do that. I'll keep it in mind.

3653   COMMISSIONER POIRIER: Okay. We have nothing else to do at the CRTC; so it is going to keep us occupied.

3654   No, but I wonder how could you make this Fund worthwhile to become permanent? And what I mean is viewers are looking for their local news elsewhere than TV more and more. I don't know what's going on in St. John's but elsewhere in the world and specifically in Canada the young people are looking for their local news elsewhere than TV.

3655   So how would you make this Fund evolve so it would become worthwhile making it permanent?

3656   MR. SCOTT STIRLING: I think that newspapers really kill themselves by putting their content online for free. So if we were going to put our news online we would have a subscription service.

3657   CBC has done that. They have their entire newscast in St. John's online. We don't do that. You can go on and you can see clips and you can read stories and you can interact but to have our entire newscast on how -- suddenly someone says, well, I can watch that on my computer at eight o'clock. I don't have to watch it at six o'clock.

3658   So I think that newspapers really hurt themselves by putting their content for free and now the genie is out of the bottle. They can't -- they have tried. The Wall Street Journal has tried to have a subscription service and so far it's failed.

3659   So once people have their content for free -- and there are so many other websites that are now duplicating everybody's content in taking the content and putting it on their own website and making it look like they have given the story out. We will break a story. There was an accident in such and such and suddenly it's on another website saying that.

3660   So you know we are broadcasters. We are dedicated. Like you said, we started in 1955, you know, so we are one of the originals and we still have that model.

3661   COMMISSIONER POIRIER: So, just as a follow-up -- and I am going to finish, Mr. Chair -- would it be a good idea to put some kind of a condition in the accessibility to the Fund that you tried to offer your local news on new media?

3662   MR. SCOTT STIRLING: That we should try to put it on --

3663   COMMISSIONER POIRIER: Yes, you should put them.

3664   MR. SCOTT STIRLING: Yeah.

3665   COMMISSIONER POIRIER: And for free.

--- Laughter

3666   MR. SCOTT STIRLING: Well, we do now in the sense of the clips. For example we are using this Fund to go out and, as Fred has said, and we have pages and pages of all the specials.

3667   I mean the thing about news is that it's live. It happens. So we can't just schedule it and say, "Here is what we're going to do and, yes, we only added four people in there. Oh, my goodness. We're giving you all this money".

3668   I mean things happen and we have got to get the satellite on the road and we have got to get out there and we have got to be there. That's the nature of news.

3669   So we bring those clips back. We'll put them on our website and people can go on the website and they can see that story.

3670   COMMISSIONER POIRIER: So you already do it?

3671   MR. SCOTT STIRLING: We do that.

3672   COMMISSIONER POIRIER: Okay.

3673   MR. SCOTT STIRLING: But we don't put the show on the web.

3674   COMMISSIONER POIRIER: Okay, but it could become a goal for this Fund?

3675   MR. SCOTT STIRLING: Well, the Fund is creating content. It's news content and much of that content is getting on the web right now.

3676   COMMISSIONER POIRIER: And we have to make it accessible, the more accessible possible.

3677   MR. SCOTT STIRLING: Yes, it's free right now. You can go on and see the benefits of the Fund right now online.

3678   COMMISSIONER POIRIER: Thank you. Thank you.

3679   MR. HUTTON: Could I add something to that?

3680   MR. SCOTT STIRLING: Please.

3681   MR. HUTTON: Further to what Mr. Stirling was saying, we have a section on our website which is called our "video vault" whereby if a certain current affairs program or a special airs like the 9/11 feature that would be put on our video vault so that people could find a link to that.

3682   You know one of the strengths that we have is that we have been on satellite for over a decade. There is an old expression that there is about two million people from Newfoundland who don't live in Newfoundland. They had to leave to find work elsewhere. They have set down their roots everywhere.

3683   I get the comments. I get the calls and the emails that people want to see their local news and they want to see it from unique areas of the province where it's very difficult for them to get any local news from whatsoever that we bring to them now through the use of extended stringers.

3684   Our budget there, our travel budget all because of the LPIF, places we would not have gone to in the past. This then gets on our web page as a small video and if a grandmother who is now living in Mississauga or in Fort McMurray gets to see her child doing something in Newfoundland that's priceless to them. That's the service that we are providing and it is free.

3685   THE CHAIRPERSON: Thank you.

3686   Commissioner Duncan...?

3687   COMMISSIONER DUNCAN: Good afternoon.

3688   I just have a quick question, I guess. First of all, sir, you are the only television station in Newfoundland, right? There is no private, just CBC.

3689   MR. SCOTT STIRLING: Private.

3690   COMMISSIONER DUNCAN: So your programming is bought from Global or CTV or both?

3691   MR. SCOTT STIRLING: Everybody, actually.

3692   COMMISSIONER DUNCAN: Yeah.

3693   MR. SCOTT STIRLING: Actually, we buy programming from CTV and Global and the studios directly and independently and syndicators.

3694   COMMISSIONER DUNCAN: Just I notice in looking at your financial summary and as Commissioner Patrone said, it's protected information, but it looks to me like you have reinvested all your LPIF funds in the business and even though there wasn't a requirement for incrementality it's, I think, noteworthy that that is what you have done.

3695   Was that your objective? It sounds in listening to you that you saw there is this opportunity. You were going to grow your business by reinvesting these funds in the business.

3696   MR. SCOTT STIRLING: Yes, I mean, we don't see it just as a business. You know some businesses are just to make money but we are in the second, third generation now so we really are -- we really believe in our province. We really try to do the best we can.

3697   COMMISSIONER DUNCAN: I notice that your national time sales have actually increased. I just wonder would you attribute that to the improvements you have made as a result of the LPIF.

3698   We had heard different accounts about national sales and of course I realize Newfoundland are in a different position maybe than some of the other provinces where they are buying national ads. But is there a particular reason that your national sales are up?

3699   MR. SCOTT STIRLING: I think it's because you are comparing it to after the financial crisis and so there was a rebound but I would really like to emphasize that our revenues are substantially down this year. Most of that shortfall is national. The majority of our revenue is national revenue.

3700   COMMISSIONER DUNCAN: You are talking about the '11-'12 year, are you?

3701   MR. SCOTT STIRLING: I am talking about the '11-'12, this current year.

3702   COMMISSIONER DUNCAN: Current year rent, yeah.

3703   MR. SCOTT STIRLING: It's a three year LPIF Fund. We are in the third year.

3704   And I know you're looking at figures that make everything look great after '08-'09 but there is really, really more than a softening. A softening means any growth is -- I mean we are in a free fall right now.

3705   And I heard the previous groups say the same exact thing.

3706   COMMISSIONER DUNCAN: So you are in that same position then?

3707   MR. SCOTT STIRLING: Yes, we are.

3708   COMMISSIONER DUNCAN: That's great. Thank you very much.

3709   MR. SCOTT STIRLING: Thank you.

3710   COMMISSIONER DUNCAN: Thank you, Mr. Chair.

3711   THE CHAIRPERSON: Thank you.

3712   And lastly, Commissioner Menzies...?

3713   COMMISSIONER MENZIES: How much of that national sales decline is linked to local production, because it would seem to me that your local production and your local news would be primarily local time sales.

3714   Newfoundland's economy is -- I mean it's -- next to Saskatchewan probably the fastest growing in the country. I think you had a GDP growth of 4 percent last year or something like that.

3715   So if you are losing nationally and you are down a million then are you losing locally too in an economy like that and, if so, what's going on with the local economy that that's happened?

3716   MR. SCOTT STIRLING: We are doing better locally. We are closer to our targets in terms of our budget this year but agency business locally is down. It's off budget. And retail is off budget.

3717   And nationally is way off. They do buy our news, the national advertisers, but there is a lot of fragmentation. We have had a lot of erosion of our ratings. And because we have had more minutes to sell we have been able to kind of keep up with that.

3718   But last month, March, we were -- it was a crisis to try to find any minutes at all. We had to -- you know we were scrambling. We were writing things on the log. I mean it was overtime for our traffic department to try to figure out how we could get through that month and not have to turn business back.

3719   So we are maxing out as best we can.

3720   In terms of the question, while the economy seems to be good in Newfoundland why is your retail business not hitting or your agency business? And it's just a trend that's right across the country this year.

3721   COMMISSIONER MENZIES: Thank you.

3722   THE CHAIRPERSON: Counsel?

3723   MR. McCALLUM: Thank you.

3724   If the LPIF is continued would you have any difficulty with a condition of eligibility that the amount received for your LPIF-eligible station be publicly disclosed?

3725   MR. SCOTT STIRLING: You know, up until yesterday or today I would have had a problem with that because it's based on your costs and therefore someone could figure out our costs. We are a small company so all of that competitive information is relevant to somebody being able to compete against us.

3726   But in view of the fact that so many others have come out and started to talk about this and especially with a comparison to CBC where they are getting two and a half times what we are getting and doing one-third the local -- I mean you know what was the Fund created for? It was for local production. So I think we have to continue to try to make that argument.

3727   So I would not have a problem with that.

3728   MR. McCALLUM: Thank you.

3729   THE CHAIRPERSON: Thank you. That completes our examination.

3730   MR. SCOTT STIRLING: Thank you.

3731   THE CHAIRPERSON: Thank you very much for coming up.

3732   We'll take a 15-minute break and resume with the next group.

--- Upon recessing at 1530

--- Upon resuming at 1543

3733   THE SECRETARY: We will now proceed with the presentation by the Coalition of Small Market Independent Television Stations.

3734   Please introduce yourselves and you have 10 minutes for your presentation.

PRESENTATION

3735   MR. ARNISH: Thank you, Madam Secretary.

3736   Good afternoon, Mr. Chairman, Commissioners and Commission staff. My name is Rick Arnish, President of the Jim Pattison Broadcast Group Limited Partnership. Today, I am appearing with my colleagues before you as the Chair of the Coalition of Small Market Independent Television Stations.

3737   I am pleased to be joined this afternoon by five other members from the SMITS Coalition:

3738   - to my immediate right is Marc Simard, President of Télé Inter-Rives;

3739   - to Marc's right is Don Caron, Vice-President and General Manager of Thunder Bay Electronics Limited;

3740   - to my immediate left is Glenda Spenrath, Vice President, Operations and Regulatory Affairs for Newcap Inc.;

3741   - to Glenda's left is Pierre Brosseau, Executive Chairman of RNC MEDIA Inc.; and finally,

3742   - to my far left, Sylvie Courtemanche, Vice President, Government Relations, for Corus Entertainment Inc.

3743   I would now like to ask Glenda to begin our presentation.

3744   MS SPENRATH: Mr. Chairman, members of the SMITS Coalition operate local television stations in Canada's smallest television markets. Sustaining a viable business in these markets is a daunting challenge.

3745   We face unprecedented competition from hundreds of Canadian and foreign television services, both regulated and unregulated.

3746   We also must deal with the BDU importation of distant signals that duplicate much of our programming, and a host of new media platforms that compete for the time and attention of consumers.

3747   To compete, SMITS operators must provide locally produced content that responds to the needs and interests of our viewers -- content that they can get nowhere else.

3748   This is not an easy task. It is why LPIF has been so important to our ability to provide compelling, high-quality local programming.

3749   Small independent stations, unlike the major broadcast groups, do not get DTH distribution of their HD signals. We cannot monetize or otherwise benefit from the distribution of our signals in distant markets.

3750   We will not be able to negotiate compensation under a "value-for-signal" model if and when that regime is introduced. And, unlike the major groups, we do not have access to the type of broader corporate support that could otherwise allow us to sustain service in non-profitable markets.

3751   Given that environment, our message today is a simple one. LPIF funding should be continued for small market independent stations for three more years. The Commission could conduct a further review at that time to determine whether it should continue past that date.

3752   Mr. Chairman, you have our written intervention. Today, we are focusing our presentation on the three specific questions that the Commission has asked parties to address in its letter of March 21st, 2012.

3753   M. SIMARD : Dans sa première question le Conseil sollicite des réponses sur la manière dont le FAPL a servi à produire de la programmation locale, tout particulièrement les émissions de nouvelles locales sur les ondes de nos stations.

3754   Nous sommes d'avis que les membres individuels de la Coalition des stations indépendantes de télévision des petits marchés, familièrement appelées les " SMITS ", qui comparaîtront devant vous cette semaine sont probablement les mieux placés pour aborder les détails de cette question. Nous pouvons cependant vous donner une réponse générale du point de vue de l'ensemble de nos membres.

3755   Au cours des deux dernières années, les membres de la Coalition ont augmenté la quantité de programmation locale qu'ils produisent de près de 800 heures par an, soit une hausse de 9,1 pour cent. Pour ainsi dire, la totalité de cette augmentation est attribuable aux nouvelles locales, lesquelles représentent près de 90 pour cent du total de nos heures collectives de programmation locale.

3756   Je signale tout particulièrement le fait que nous avons augmenté les heures consacrées aux nouvelles locales d'environ 10,4 pour cent par rapport au niveau atteint avant l'adoption du FAPL.

3757   En même temps que nous avons augmenté le nombre d'heures de programmation locale, nous avons amélioré la qualité de nos productions locales en consacrant à ce contenu une quantité notable de ressources supplémentaires.

3758   On constatera, à la lecture des rapports sur le FAPL remis par les stations membres individuelles, qu'elles ont ajouté du personnel affecté à l'information, augmenté leurs budgets de programmation, ouvert des bureaux de nouvelles et veillé à l'accroissement du traitement du personnel de la programmation afin d'attirer des gens hautement qualifiés.

3759   De plus, les fonds consentis par le FAPL a permis à un nombre important de stations en bénéficiant de sous-titrer 100 pour cent de leur programmation locale, et aux autres d'y tendre.

3760   Ensemble, les membres de la Coalition ont augmenté leurs budgets pour la programmation locale d'environ 32 pour cent grâce à l'appui que leur apporte le FAPL.

3761   Tout cela n'aurait pas été possible sans l'apport du FAPL. En fait, c'est l'inverse qui se serait produit dans ce sens que nous aurions disposé de moins de ressources à consacrer à la production locale.

3762   La deuxième question que le Conseil nous pose se rapporte à la mesure dont le consommateur a bénéficié du FAPL.

3763   Nos téléspectateurs ont réagi de façon fort positive aux améliorations apportées à la couverture locale qu'ils voient au petit écran. Cette réaction tient non seulement à l'augmentation des heures de programmation locale, mais aussi à la meilleure qualité de la couverture approfondie dans les reportages, aux fortes valeurs de production, à l'allure améliorée de nos plateaux et décors, en somme, l'intégrale des nombreux facteurs individuels qui permettent de réaliser un produit audiovisuel de haute qualité.

3764   Quoique certains de nos membres aient effectué des sondages auprès de leur auditoire dans le but de mesurer leur satisfaction face aux améliorations apportées à la programmation locale, les exploitants des SMITS ne disposent pas collectivement des ressources nécessaires pour effectuer régulièrement de tel sondage. Nous pouvons cependant vous dire que la rétroaction de la part des téléspectateurs est très enthousiaste et que cela a confirmé le bien-fondé des améliorations que nous avons apportées avec l'aide du Fonds.

3765   MR. CARON: The third question that the Commission has asked us to address is the following: If LPIF is eliminated, what impact would this have on the amount and type of local programming produced and what other methods or incentives are available to ensure that local programming will continue to be produced?

3766   Mr. Chairman, I think we have already provided our response to that question. If LPIF is eliminated, we will not be able to continue improving our local programming. Budgets and staff will likely be cut and quality will inevitably suffer. This is simply a business reality.

3767   This will start a downward spiral. A reduction in the quality of our news coverage due to fewer resources being available translates into loss of audience as our local programming becomes less relevant to viewers. With the loss of viewers comes loss of revenues, and the cycle repeats.

3768   As to whether other methods or incentives could ensure the continued production of local programming, the reality is that the fundamental business model for small market television is very different than the model for large markets. Therefore, an incentive-based regime cannot cause local programming to be produced.

3769   Our incentive to produce local programming is already provided by the marketplace -- we must produce relevant and compelling local programming if we expect to compete successfully for the attention of our viewers. The issue is not incentives, it is the lack of resources. Without LPIF, local independent voices will be affected.

3770   In addition, our stations need HD carriage so that all of our viewers can fully benefit from the LPIF investments we are making. This is because LPIF funding has allowed SMITS members to invest in HD upgrades without compromising local programming budgets.

3771   Yet, having made these significant investments, we now find that in many cases BDUs down convert our HD signals to standard definition only. In these situations, local viewers who rely on BDU delivery cannot receive our stations in HD, not even those stations that have over-the-air transmitters broadcasting in HD. This puts us at a significant competitive disadvantage.

3772   We appreciate that this issue is currently under review as part of the renewal proceeding for the DTH licensees, but it is important to appreciate how much this problem affects our business in the context of this LPIF proceeding.

3773   MR. ARNISH: Mr. Chairman, we are grateful that the Commission has recognized the unique challenges faced by small market independent television broadcasters. In several proceedings over the past few years you have noted the important role we play in providing local programming outside of major markets and in contributing to the objectives of the Broadcasting Act.

3774   Whatever your decisions on the other issues being debated at this hearing, we urge you to extend the support provided by LPIF to independent small market broadcasters for the next three years so that we can continue to improve the service we offer to our viewers.

3775   That completes our presentation. We thank you for our attention and we would be pleased to respond to any questions.

3776   THE CHAIRPERSON: Thank you very much.

3777   I would ask Commissioner Menzies to lead the questioning.

3778   COMMISSIONER MENZIES: Thank you.

3779   One of the things I've noticed in terms of this is there hasn't been much discussion about criteria and I would like to know why you think the current criteria for the Fund are fair when there's nothing to distinguish between profitability of a station or levels of actual local news coverage.

3780   And I would like you to comment too on earlier discussions around how LPIF has distorted the market by providing greater funding to some broadcasters and markets and less for others, based on spending alone.

3781   MS SPENRATH: If I might begin, I guess I'll address the issue of whether we think the criteria is fair.

3782   From our own perspective, you know, we felt that -- we were looking at the criteria, of the fact that the Fund is put in place for the purpose of increasing and improving the local programming for the small market television stations because this is really what sets us apart from the other plethora of programming on TV, is the local programming.

3783   So from that perspective, you know, we believe that that criteria is fair, that it has to go into local programming.

3784   COMMISSIONER MENZIES: Okay, thank you.

3785   In terms of your group, how much has the issue of DTH carriage changed in recent years? Is it still -- my expectation is that it's not the same problem it was, but I would like you to address that.

3786   MS SPENRATH: Again, I think I could speak to that because, as you're probably all aware, the market that we operate in has the highest satellite penetration in Canada and it's been consistently since the beginning. We run at about 70 percent satellite penetration, 70, and so it's been very significant for us.

3787   I've been with the station for 25 years, so I've seen all of the goings on and I would say that, you know, when it first came in, of course, it crept upon us and it reached a tipping point.

3788   And once it reached that tipping point, that's when we started, I guess, discussing with the Commission, discussing amongst ourselves how we might survive in that new environment, in that new universe, and that was, I guess, the birth of the Small Market Local Programming Fund and the DTH arrangement.

3789   Since that time it has -- having those procedures put in place arrested some of the erosion and the haemorrhaging that was happening at that time. And I think now, 10 years hence -- at the time we weren't sure if this was permanent damage or it was temporary damage. I think we can clearly say 10 years later that it has been permanent damage, and the Fund was put in place for that purpose, which is, you know, separate from why we're here today.

3790   COMMISSIONER MENZIES: Do more of your members have DTH carriage today than 2007?

3791   MS SPENRATH: Pardon me?

3792   COMMISSIONER MENZIES: Do more of your members have DTH carriage now than four years ago?

3793   MS SPENRATH: No. They were only ever required --

3794   COMMISSIONER MENZIES: Okay, thanks. That's all I needed.

3795   MS SPENRATH: Okay.

3796   COMMISSIONER MENZIES: I would like to ask about -- it doesn't seem -- well, it seems worth questioning at least that LPIF would apply to a market in which there are two sticks by a single owner. I'm not quite sure why the Fund should fund both of those sticks in a single market.

3797   There are a couple examples of those. One of them is yours, Ms Spenrath. But I'm not sure why it makes sense to fund two stations with a single owner in a single market.

3798   MS SPENRATH: Again, I think you have to look at our evolution and why there are two stations in the smallest market in Canada, why we're in a market of only 90,000 people and yet we have two stations.

3799   To go back, we originally -- 50 years ago, 50 plus years ago, we were granted a CBC affiliate licence and at that time we operated until 1976 as a standalone station.

3800   Then along came CTV. They wanted to grow their presence in markets and there were certain markets where it clearly did not make financial sense to have two markets but they still wanted a presence, and at that time that's when the twin sticks were born.

3801   CBC affiliates were granted a sub-affiliate relationship to take on the CTV stick, knowing that the market itself really couldn't support two stations but it gave CTV a presence there.

3802   So really, we operate two stations with the full costs of two stations, with the revenue of one station.

3803   COMMISSIONER MENZIES: Which didn't really answer my question. If the market isn't big enough to sustain two stations, why should we eternally subsidize two stations in a single market like that?

3804   I understand the history and I don't need the history over again, but it simply makes no economic sense to be spending money on two stations in a market that can't sustain two stations when maybe the money could be better used elsewhere.

3805   MS SPENRATH: Well, I guess my response to that would be that we would -- without the LPIF then, would we be allowed to have the harmonized rate of one station? Because right now we're producing -- we were at 10, we're at 12, by the end of 2012 we'll be at 14 to 15 hours of programming, local programming, primarily news. So we are producing at the level of two stations.

3806   MR. CARON: If I could comment also.

3807   We are the other twin stick obviously that you're referring to in Thunder Bay. We run two completely separate stations, separate staff, in most cases separate programming. We have Global on one and we have CBC on the other. We incur the -- as my fellow attendee here said, we incur double the cost.

3808   We produce -- at this particular point our licence hasn't been renewed since 2004. So we're one of the ones that are still sitting out there. It's been extended and extended. But we have to produce 10 hours and 47 minutes at this point. So we're required to produce on the basis of two stations.

3809   So I'm not sure why just because we're in the same market -- in our market the two stations are sustainable. So I'm not sure why we would be penalized by producing two entirely different stations with different products, different news, different everything on it, because we happen to be in the same market. We do have the viewers to support both stations, and our BBM numbers support that.

3810   MS SPENRATH: I might add that on the CBC side, with our affiliate agreement, 70 to 80 percent of our inventory goes back to the network. So we don't have the ability to sell that portion of our inventory, yet we are producing the programming.

3811   So we don't have the revenue capability, or the inventory capability.

3812   MR. CARON: I think you are going to find that all of us that are CBC affiliates have signed this particular agreement, and one of the reasons we signed it was, we had no other option. We either signed it under the terms that they enforced on us, or we basically had to give up the licence, because we didn't have any other option at that particular point.

3813   So it was a "take it or not take it" type of scenario that we were faced with, and we do have five years in which to resolve that, but at that particular point in time we had no time and we had to sign the contract. That was our particular scenario.

3814   COMMISSIONER MENZIES: That's helpful. They seem to be inclined to provide some --

3815   MR. SIMARD: Mr. Menzies, could I add something?

3816   COMMISSIONER MENZIES: Please.

3817   M. SIMARD : Écoutez, il est sûr, si on regarde les années passées, je sais que vous le dites, mais il serait très important de mentionner que lorsque le deuxième service de télévision de langue française a dû s'étendre au Québec, le CRTC nous a demandé, étant l'opérateur de la première station de Radio-Canada... parce que partout au Canada, les premières stations qui sont apparues, les affiliés sont apparus comme affiliés de la société d'état. Le CRTC nous a demandé de donner... de prendre les mesures nécessaires pour que le deuxième service de langue française soit étendu dans notre région.

3818   La même chose s'est produite lorsque le deuxième service de télévision de langue française privé au Québec est arrivé. Le CRTC nous a dit : Vous avez la priorité de donner le service du deuxième service de télévision de langue française privé parce que, dans des petits marchés comme les vôtres, la compétition est impossible.

3819   Et le résultat est qu'aujourd'hui, nos marchés sont des marchés obligatoires, nos stations opèrent des émetteurs pour chacune de ses stations, nos stations opèrent des studios différents dans le cas de deux stations, complètement différents avec des bulletins de nouvelles différents, donc, une variété, une diversité des voix différentes.

3820   COMMISSIONER MENZIES: Thank you, that explains a lot.

3821   I didn't see in your submissions, written or oral, that you thought the fund should distinguish between independents and vertically integrated companies, and I would like to know why you didn't touch on that.

3822   MS COURTEMANCHE: As a group, we decided that we weren't going to take a position on what the Commission should do with either the CBC or the vertically integrated companies. We thought that we would just come to you and speak about our realities and what we think is best for us, and we thought we would leave it to those players to sort of figure out what the position should or should not be.

3823   COMMISSIONER MENZIES: Okay, thanks.

3824   If the Commission were to decide to put this fund to bed, or reshape it in some way, wouldn't it be better to address your needs through a revamp of the small market fund, rather than --

3825   For instance, I will just pose a possible scenario where the LPIF gets put to bed, either immediately or gradually, and where you have extra needs in terms of your small markets, they would be addressed through a revamped small market fund.

3826   MS SPENRATH: I may let Sylvie answer some of that, but part of the difference there is, with the Small Market Local Programming Fund, it is only the DTH companies that contribute, and with the LPIF it is both cable and satellite.

3827   COMMISSIONER MENZIES: I know. I am not saying the small market fund as it exists now, I am saying that if there was a review of the small market fund at some point in the future, there might be other ways to --

3828   MS COURTEMANCHE: Just so I understand what your proposal is, or what you are suggesting -- I am not sure that I am entirely clear.

3829   COMMISSIONER MENZIES: I am saying, what about having one fund instead of two?

3830   MS COURTEMANCHE: Right. But one fund -- just to be clear, one fund was established to deal with the erosion of advertising revenues because of the importation of distant signals. The other fund was created for the purposes of stimulating local production. So they are two very distinct --

3831   COMMISSIONER MENZIES: Okay. Let me put it this way. How about we get rid of both of them and start a new one?

3832   MS COURTEMANCHE: Okay. I guess what I would say to you is, if that new fund were to say that it would deal with those issues --

3833   What I am trying to say is, the new fund needs to recognize that the loss of ad revenues -- that is something that we actually, absolutely, have to have.

3834   And I guess the other component would be, it would be a fund that would have a dual purpose. It would also have to promote and ensure a continuation and improvement to local programming.

3835   Is that how it would work?

3836   I am just trying to figure out what the proposal is.

3837   COMMISSIONER MENZIES: There isn't one.

3838   MS COURTEMANCHE: Oh, okay.

3839   COMMISSIONER MENZIES: I was just trying to find out if you had given it any thought --

3840   MS COURTEMANCHE: We didn't give it any thought --

3841   COMMISSIONER MENZIES:  -- because, I mean, you can have funds that were invented -- I mean, income tax was invented to fund the First World War, right?

3842   MS COURTEMANCHE: Oh, absolutely.

3843   COMMISSIONER MENZIES: That doesn't mean that you can't change it.

3844   MS COURTEMANCHE: No, and I am not saying that we wouldn't think that you can't change it. Our only issue is that, in changing it, we need to recognize that the purpose of the first fund needs to be continued in the second fund.

3845   COMMISSIONER MENZIES: We are not going to do it without talking to you, if we did it. It is purely hypothetical.

--- Laughter

3846   MS COURTEMANCHE: Thanks.

3847   COMMISSIONER MENZIES: I had a couple of other questions on the particulars of "Why nots", but I think I will skip through them because you have kind of addressed those already.

3848   In your written submission -- and you mentioned it briefly in your oral submission, as well -- you mention how the fund assisted, not directly -- you concede that, but it assisted you with capital upgrades.

3849   And it kind of caught my eye that, you know, maybe capital upgrades should be just part of normal business procedures. But your point was that you were able to do capital upgrades while still spending money on local programming that you might not have done otherwise, and I am not sure that was our intent, so I would like you to address that.

3850   MS SPENRATH: I think I will begin, and feel free to jump in, colleagues, if you want.

3851   If you look at our margins pre-LPIF, 12 percent, approximately, in 2009, that doesn't leave a lot of room to both rapidly grow your programming menu and invest in capital, especially when you have digital conversion and you have the high-def conversion to do.

3852   With those kinds of margins, it is really difficult to do both simultaneously.

3853   And, as you can see, if we hadn't had LPIF, it would have -- it has been declining, and I can tell you that in 2012 -- we heard from Sylvie and we heard from the other group that 2012 has softened. It has softened for us, as well, on the national front.

3854   So we would be looking at being flat.

3855   MS COURTEMANCHE: The only thing I would add is that, normally, when you do capital expenditures in a business, you usually tie it to some type of revenue growth, and in this particular case we are doing capital expenditures and there is actually no tie-in to revenue growth.

3856   That's the proviso that I would put in. Otherwise -- you know, that is normally the quid pro quo, you invest because you think it's going to earn you money.

3857   In these types of situations, we are not earning money by doing the HD upgrade.

3858   COMMISSIONER MENZIES: The other point that perhaps you could comment on, because it struck me in both of the presentations, is that --

3859   And you are not the only ones to have said it. You say that it is vital to your business to have strong local programming, but without subsidy -- if LPIF goes away, you will stop investing in the core purpose of your business.

3860   I don't understand that. It seems a very short-term view to me. If you know that your long-term survival is dependent on the strength of your local identity and programming, why would you cease investing in it, unless you were just going year-to-year, to make sure that everybody made their targets, et cetera, et cetera?

3861   It seems a very short-term business view that you would not wish to invest in something that you identify yourself as being vital to your existence.

3862   MR. ARNISH: That's an excellent question, Commissioner Menzies. Maybe I will start, and my colleagues can jump in.

3863   I don't think you will get a different answer than what I am going to provide to you here. I think that all of us here with the SMITS coalition know how important local programming is, and I think that there has been talk at the Commission hearing over the last couple of days about whether the fund should be eliminated, whether it should be reduced, whether it should stay the same.

3864   I think that it would be very difficult for us to continue to maintain the amount of local programming that we have if the fund was totally eliminated. I guess if the fund was reduced by a certain percentage -- we have talked about that amongst ourselves, and I mentioned it yesterday. To be relevant in today's world that we live in, we have to continue to make major commitments to local Canadian content programming.

3865   And as our record speaks for the SMITS coalition, I think that is something we can be very proud of, and I hope the Commission is, as well.

3866   I would ask any of my other colleagues if they would like to comment.

3867   MR. CARON: If I might, our local news is the lifeblood of our particular station, and it would not be our intention to reduce any parts of local news.

3868   And I am only speaking for our station at this particular point in time.

3869   With the LPIF, we have been able to enhance the quality of the staff, we have added a morning newscast during the week, we have added a weekend cast, we have added a number of other specialty programs, and it would not be our intention, even if you reduced -- and hopefully not eliminated -- the LPIF, that we would continue to do that.

3870   We would look at other areas of our operation, in our particular case, because we are an isolated community. The only distinguishing factor to identify us from the guys that are coming in from the birds up in the sky is our local products, particularly our local news.

3871   When we look at our revenue generation, our local news is one of our better generators of our revenue.

3872   So the LPIF has allowed us to enhance that product, which is the purpose of our station.

3873   MS SPENRATH: I think, if you look at the handout that you have provided for us, showing the PBIT without LPIF, it would be very difficult at 7 percent, 4 percent, likely zero percent for 2012, to continue to grow our local programming, with no profitability.

3874   COMMISSIONER MENZIES: Sure. Thanks for the segue, because in terms of that handout sheet, on the bottom line, where it says "Total Funding as a Percentage of Total Revenue", you have gone from 7.9 percent of your total revenue in 2006 being funding provided to you -- call it public funding if you want -- to 27.5 percent last year.

3875   You are five years away from becoming a public broadcaster at that pace.

3876   Why does that make any sense, to go down that road in the future, and be spending millions and millions of dollars of other people's money on something that doesn't seem to have a future as a private enterprise?

3877   Why wouldn't we just take that money out, if we are going to have public broadcasters, give it to another public broadcaster and have them do it?

3878   I don't understand the long-term sustainability of a business model that is 27.5 percent dependent on subsidy.

3879   MS SPENRATH: I understand that this is a fair question and that you need to be able to reconcile this in your mind. I think that the reverse way of saying this is: Do Canadians in smaller markets deserve access to local reflection if it doesn't make financial sense?

3880   I think that's what you are asking, and I think that's a bit of a --

3881   COMMISSIONER MENZIES: That wasn't what I was asking. I was asking whether it made any sense at all to gradually turn you into public broadcasters, when we already have public broadcasters.

3882   I mean, people are having jobs and that sort of stuff, but we are not an economic development agency, we are here to make sure that there is a sustainable broadcasting system, as a system, right?

3883   It's a matter for debate, and there would be different views on it, but some might argue that we are not here to sustain broadcasting, in whatever shape and form, in whatever market, in whatever -- in a 20th Century model, at a time when times are changing. Right?

3884   MS SPENRATH: But I don't see --

3885   COMMISSIONER MENZIES: I mean, is this going to go on for, like, what, 50, 100 years? I mean, when is --

3886   MS SPENRATH: But if we were to become, in effect, a public broadcaster, or if we were to close our doors in lieu of that, I don't see the CBC coming in and taking our place.

3887   I don't see them in any markets of our size doing that.

3888   So Lloydminster, for example, would have no local TV in that circumstance.

3889   COMMISSIONER MENZIES: People might do it via the internet. That was my point.

3890   MS SPENRATH: But where is the local content then?

3891   COMMISSIONER MENZIES: They create local content and they put it on the internet, and people watch it.

3892   MR. CARON: I think that one of the issues, though --

3893   COMMISSIONER MENZIES: Let me make the point more clearly, because I don't want to make it an argument.

3894   At what point do you see this turning around, so that the growth of subsidy ends and the subsidies begin shrinking, and these private enterprises end up being viable private enterprises?

3895   Because I don't see anybody investing in OTA TV right now.

3896   MS SPENRATH: No, and I don't think you will in the future.

3897   I think that when national dollars start flowing back to small markets is when you would see that, and that may never happen.

3898   COMMISSIONER MENZIES: Thank you.

3899   While we are on the numbers, I have some other questions.

3900   Your revenues have been essentially flat on this chart, sort of from 2006 to 2007, basically. I mean, local time sales, obviously, in five years, six years, have gone up 100 bucks.

3901   This is the aggregate of the group you represent.

3902   National time sales -- very little.

3903   But what has happened, of course, is that your PBIT margin has moved from 14.8 percent in 2006 to 22.9 -- 23 percent, let's call it, in 2010, and 20 percent in 2011.

3904   And, as you pointed out, even after LPIF is taken out, you were still 7 percent last year and 4.1 percent.

3905   Now, I am not saying that you hold a parade on 7 percent or 4.1 percent, but I do know car dealers who would kill for it.

3906   That is a sustainable business.

3907   MR. CARON: Could I comment on that?

3908   COMMISSIONER MENZIES: Sure, yes.

3909   It looks, to the casual eye, that we are sustaining your profits, not your viability.

3910   MR. CARON: The first thing that you have to realize is that the 4.1 percent is PBITA, so that is pre-interest and taxes, but even at 4.1 percent, that is only $4.2 million, based on all of the gross revenue that we are talking about.

3911   There are 21 stations in the 4.1 percent. That averages out, because we are using averages here, to just $200,000 a station.

3912   COMMISSIONER MENZIES: Yes, I mean, there is no --

3913   So? It's $200,000 --

3914   MR. CARON: But the point is --

3915   COMMISSIONER MENZIES: It's in the black, not the red.

3916   MR. CARON: Yes, it is, but you can't go then and spend $1 million on capital conversion and have a PBITA of $200,000.

3917   COMMISSIONER MENZIES: Okay. So what would be the PBIT that would allow you to do capital conversion and exist?

3918   What would be the sustainable levels?

3919   Like I said, if we are taking money from other people and giving it to you, they are not going to understand how your profitability went from 14.8 percent to 20 percent, let's call it, and that they are sustaining a business model rather than profits.

3920   All they know is that they have less money and you have more.

3921   MR. CARON: I guess my point, Mr. Commissioner, would be, do they have less profit?

3922   Because I have listened to all of the hearings --

3923   COMMISSIONER MENZIES: Oh, no, I am not talking about businesses, I am talking about the average cable subscriber.

3924   MR. CARON: Okay. I was talking about businesses, I'm sorry.

3925   COMMISSIONER MENZIES: Yes, I can understand that.

3926   But it does appear to be -- like I said, you don't need to hold a parade for 7 and 4, but this is even after --

3927   Just to continue on, your program and production expenses were $26 million in 2006, and that stayed pretty flat. In 2008 it went up. In 2009 it went up.

3928   These are just inflationary increases.

3929   And in 2010 it went up by over $1 million, and 2011 was another $3 million on top of that.

3930   So you have invested more, as a group, in program and production, but even with having invested more, when you take LPIF out, you are still positive.

3931   I am just thinking, I don't think it's fair to anybody to be sustaining a group at a 20 percent PBIT.

3932   And I know how PBIT works, that people might have different interest rates and that sort of stuff, and after taxes -- et cetera, et cetera -- but it doesn't seem fair.

3933   MS SPENRATH: No, I understand what you are saying. In the first year of the fund, many people like ourselves spent the first few months, basically, building up infrastructure on stuff that -- expenses that weren't necessarily LPIF-eligible. So ours started once your infrastructure -- once you built edit suites, got news-gathering vehicles, hired more staff, and got all of those things in place.

3934   But I think what you are going to see in 2012 is that we have gone from 22.9 to 20 -- we are going to be down to, maybe, 18, 17, or something like that, because all of us have been ramping up our programming over the past two years, and you will see in 2012 a more representative sample of a full year's worth of --

3935   COMMISSIONER MENZIES: That is going to be because your programming costs have gone up by another couple of million dollars?

3936   MS SPENRATH: In our case it will be, because our programming has gone up. We started out at 10 hours, and we are going to be at 15 hours by the time we get to the end of 2012.

3937   COMMISSIONER MENZIES: Okay. I am still trying to get to the point of what is a fair level, because there are obviously some people in here who are losing money -- right -- which means that some people are making more -- right --

3938   MS SPENRATH: Yeah.

3939   COMMISSIONER MENZIES:  -- and I am not getting the fairness out of that.

3940   MS SPENRATH: Seven and 4 wouldn't fly with very many shareholders, I don't think, because in addition to this you have your capital upgrades -- and this doesn't include interest and taxes either.

3941   So by the time you back interest and taxes out, you are down to next to nothing for capital.

3942   And, then, for us to turn around and spend half a million dollars for the digital transition, and $750,000 to go high-def -- I mean, you can't do those kinds of increases unless you have some kind of bottom line.

3943   COMMISSIONER MENZIES: Okay. What is the number? If there is a cut-off number that --

3944   MS SPENRATH: We would like to confer --

3945   COMMISSIONER MENZIES: Because we are not here -- I mean, my main point is, we are not here to build a fund that will subsidize higher than required profit levels. Many people would say that is just simply not fair.

3946   If there is going to be a fund that sustains people in the marketplace for certain social purposes, and that sort of stuff, that may be fair, but somebody in here is making 30 percent and somebody is losing 10, and that is not making any sense.

3947   So how do we fix that?

3948   MS COURTEMANCHE: I think we would like to sit down and confer and have an opportunity -- because now we understand what your concern is.

3949   So we would like to undertake and come back and say: Okay, here is what we think is reasonable profitability, given the objectives of the fund, and given the fact that it is a straight subsidy and is meant to achieve certain purposes, but, beyond that, you know, we don't think it is legitimate to continue.

Undertaking

3950   COMMISSIONER MENZIES: Okay. A quick question. I noticed that the revenue had dipped, but it seemed to be back up slightly in the last year. I mean, not great, but it was showing some improvement.

3951   Is that a sign that market trends are improving?

3952   MS SPENRATH: Are you talking about the total revenue, or is there a specific revenue line?

3953   COMMISSIONER MENZIES: It was, actually --

3954   I'm sorry, I will get --

3955   MS SPENRATH: Because if it's up $1 million, half of that is in the other category, which is the small market fund.

3956   COMMISSIONER MENZIES: No, it was actually your sales that seemed to be up slightly, seemed to be trending --

3957   I mean, they had been at 25 -- almost 26 in 2008, and then they were down to 24 in 2009, and then down again, and they seem to have popped back up to 24.

3958   Is that just a dead cat bounce?

3959   MS SPENRATH: I am pretty sure that you will see the national line go down in 2012. I mean, we are all experiencing that.

3960   MS COURTEMANCHE: I think the point is, we had a good year last year, but it is not trending that way this year.

3961   MR. CARON: I think, Mr. Commissioner, if you look at the numbers of local and national combined, they are up $120,000 this year, which is .27 percent. So, in other words, non-existent --

3962   COMMISSIONER MENZIES: Yes, I wasn't going to go out and invest based on this exciting economic news, but it did seem to be changing direction.

3963   Another question on this list is under "Expenses: Sales and Promo". It is pretty much -- it has gone down since LPIF went in, and I can understand a little bit that sales costs might be down --

3964   It's gone down, overall, $700,000. I can understand that sales costs might be down a little bit if revenue is down because you would be paying less commissions, but national and local sales didn't seem to be done that much and I was just wondering with the increased subsidy if you had decided that there wasn't a need to promote this heavily or if this decrease can be attributed to lower commissions due to lower sales.

3965   MR. CARON: In our case, Mr. Commissioner, we have the same sales force we had two years ago. We have not varied in that particular sales force.

3966   We do have a variable commission rate with our national representatives. Once they hit certain targets it goes up. There are actually three of those or four of those moves that happens. So depending upon the level of achievement they get different rates so it depends upon how much our national reps sell for us.

3967   And in our case, we cut back on some of the travel and other things of that nature. So our sales expense didn't vary that significantly, but our sales force stayed the same.

3968   COMMISSIONER MENZIES: Okay. I will just check on one more thing. I think I covered the questions that I had, others may have some, but I do look forward to your response regarding appropriate levels of sustainability in terms of -- yes, like I said, your total funding as a percentage of revenue has grown to 27.5 percent and your PBIT has grown to 20 percent and it points to an inconsistency in the purpose of the fund.

3969   Thank you.

3970   THE CHAIRPERSON: Thank you.

3971   I have a couple of questions on the same page, just to stay on topic.

3972   I want to focus on the repeated comments I heard about HD upgrades and CAPEX and everything else.

3973   I'm not a CA, but I do have some experience in financials and when you capitalize something it's reflected in depreciation or expense. So when I look at this chart and I look at the depreciation line, it actually shows that the depreciation has been declining and not going up. There was one blip in the last year, but over the last five years depreciation has been going down and your admin in general for the most part, which are expense items, which is where I would think you would either capture it or else in programming and production or technical, has not seen the upside to the extent that there is 21 stations, you are upgrading to HD across the board, it's costing -- I think what I heard before was $750,000 a pop and you multiply that by the number of players that are up in front of us here, I don't know where the money is.

3974   MS SPENRATH: Well, it isn't there yet because the digital conversion we would have done in August of 2011 so the depreciation would really come September so you will see it in the 2012 numbers.

3975   The HD conversion we did this past winter as well, so it will show up in 2012.

3976   THE CHAIRPERSON: So none of the numbers are in 2010 or 2011?

3977   MS SPENRATH: No. The requirement to go digital was to be August 31st of 2011.

3978   THE CHAIRPERSON: Okay. And the fact that you got the LPIF in 2010 and there was $15 in 2010 and $15 million in 2011, there was no reinvestment in either one of those two years. The $30 million, as Commissioner Menzies said, there is a small blip in program and production in 2011 over 2010, but it's marginal.

3979   So there is $30 million that came out of the LPIF fund and I guess I'm trying to understand where it went.

3980   MS SPENRATH: I can't speak for the other stations, I know that ours went up significantly, like 50 percent in 2010. SO I guess I would leave it up to the rest of them. There is, I think, one group, that isn't with us today, the Astral stations.

3981   MR. CARON: Mr. Chair, if I could respond to that, too?

3982   In our case, we spent $754,000 in '10; $941,000 in '11 and we are on the trend to spend almost $1 million this year in our capital conversion. Our capital conversion is going to cost us about $3 million so we will be completed in that this year.

3983   So we did spend $754,000 in '10.

3984   MME COURTEMANCHE : We spent $2 million so I'm not exactly sure why it didn't show up. But we have done $2 million in studio upgrades and all kinds of stuff so I'm not sure why it's not showing up.

3985   THE CHAIRPERSON: Maybe I can ask you, given that the data is confidential, we have the data rolled up as well, but when you file your final reply argument if you can explain to us based on the financials we have for each one of you -- and you can file it in confidence if you would like -- just explain to us where the LPIF dollars went, which line items for what purpose, just so we have an understanding as to how that money was deployed as well?

3986   MS SPENRATH: Yes, we can do that.

Undertaking

3987   THE CHAIRPERSON: That would be useful.

3988   The only other comment that I have is, on page 5 of your remarks this afternoon you say, in the third paragraph:

"Our incentive to produce local programming is already provided by the marketplace -- we must produce relevant and compelling local programming if we expect to compete successfully for the attention of our viewers."

3989   So you are linking, obviously, the content of local programming with your viewers, but to the extent that there still is market fragmentation, and to the extent that there still is, in your view, a softening of the marketplace, all this means is you have less and less money to put into local programming, which comes back to I guess Commissioner Menzies comment that in five years from now you will be no different than the CBC, you will be a public broadcaster because you will be coming back to us saying, we are less and less relevant unless we find some funds in order to provide better programming to become more relevant.

3990   MS SPENRATH: Well, I will tell you what would really help would be hi-def carriage, because right now we are all carried -- not all of us I guess, but I know our stations are carried in standard def and we are up against competing stations, Edmonton, Calgary, that are hi-def and it's taking viewers away from us.

3991   And it's difficult to sell to your advertisers when there is no requirement to simulcast a standard def signal over top of a higher quality hi-def signal, so we lose simulcast so we can no longer go to our advertisers and say, okay, we can deliver this audience from our own market, plus we can deliver the audience that we are getting on simulcast on Calgary and Edmonton stations for similar programming.

3992   When you think that 94 percent of our market is on either satellite or cable, that is really significant, not being able to be in hi-def. That is becoming a tough sell, especially when you get a program like hockey where sports are so much better in hi-def.

3993   So something like that, if we were there, you know, there is something that could very well help our cause and get us off this situation that you are discussing.

3994   THE CHAIRPERSON: Those are my questions.

3995   I think Commissioner Duncan -- oh!

3996   M. SIMARD : Est-ce que je pourrais rajouter quelque chose?

3997   LE PRÉSIDENT : Oui, bien sûr. Oui.

3998   M. SIMARD: Écoutez, d'abord, pour ce qui est de la question tout à l'heure, j'aimerais revenir sur le point du 27 pour cent. C'est-à-dire que monsieur Menzies nous a dit : Écoutez, il semblerait que vous pourriez devenir un petit radiodiffuseur public parce que vous auriez 27 pour cent de subventions.

3999   D'abord, il faut quand même toujours séparer les deux Fonds parce que... Je pense que je me dois de le rappeler, Monsieur le Président.

4000   C'est que le premier Fonds des petits marchés, si demain matin toutes nos stations étaient distribuées sur les satellites, toutes nos stations étaient distribuées en HD, la substitution simultanée et non simultanée qui laisse entrer une vingtaine de stations identiques à la nôtre dans nos marchés, si ces conditions-là étaient toutes réunies, si le problème des codes postaux, dont les DTH utilisent pour laisser entrer ou faire la substitution dans nos marchés, si ce problème-là était réglé, on vous dirait, on n'a pas besoin du Fonds pour les petits marchés, le problème est réglé, on a une distribution parfaite, il ne pénétrera plus d'autres stations éloignées dans nos marchés parce que les problèmes techniques ont été réglés.

4001   Voilà la raison pour laquelle ce petit Fonds-là a été créé, et il existe encore et on peut présumer qu'il va exister encore pendant longtemps, parce que lorsqu'on regarde la réponse des deux grandes compagnies de satellite lors de nos renouvellements, suite aux interventions que l'on a faites, Shaw nous a dit : Écoutez, bravo, oui, on reconnaît que les petits radiodiffuseurs devraient être diffusés en HD, mais, vous savez, on ne pourra pas le faire avant l'expiration de notre licence, soit un terme probablement de sept ans.

4002   Alors, on ne peut pas s'attendre dans les sept prochaines années que nos stations auraient la chance du moins -- à moins peut-être d'une selon la décision que le Conseil rendra prochainement -- espérer que nos stations sont distribuées en HD.

4003   Donc, qu'est-ce qui se passe actuellement depuis deux ans dans nos marchés, Radio-Canada est distribuée en HD, Radio-Canada de Montréal; la station V de Montréal est distribuée en HD; la station TVA est distribuée en HD.

4004   Donc, cet argent-là, qu'on l'appelle subvention, je pense que ce n'est peut-être pas le vrai terme. Il faudrait dire que c'est une aide... c'est l'argent qui nous est dû parce que ce sont des sommes de publicité que nous perdons à cause de ce problème-là.

4005   Alors, de ce côté-là, je pense que si on corrige ça, donc, la subvention, comme on dit, n'est plus de 27 pour cent. Il faut donc enlever ce Fonds, qui, selon les conditions, tel que je viens de l'expliquer, pourrait disparaître si toutes les conditions étaient remplies.

4006   L'autre point, c'est que, vous savez, au Québec, par exemple, si l'on regarde les chiffres qui ont été publiés par le Conseil au cours des dernières semaines et derniers mois, la publicité locale au Québec est en diminution importante, la publicité réseau est en diminution importante.

4007   Donc, le réseau, dans nos stations du Québec du moins, représente 70 pour cent de nos revenus. C'est certain que lorsque... Par exemple, vous avez entendu au mois de décembre le président d'un grand réseau francophone, soit le réseau TVA, venir vous dire : Écoutez, on prévoit dans les prochaines années que la part de marché du réseau TVA devrait continuer à diminuer légèrement, peut-être pour se situer autour de 20-22 pour cent. Si je me souviens bien là, c'est ce qui a été dit. Et on ajoute que : Une chance que le réseau TVA a demandé au fil des ans d'opérer des canaux spécialisés. C'est ça qui va faire que le Groupe TVA dans son ensemble pourra progresser.

4008   Alors, évidemment, nous, on n'a pas cette chance-là et, donc, on se doit dans l'avenir, lorsqu'on a parlé beaucoup dans cette audience-ci des... lorsqu'on a parlé beaucoup des revenus, de la situation économique actuelle, le Fonds, lorsqu'il a été créé, monsieur le président, et vous l'aviez bien dit, ce n'était pas à cause de la mauvaise situation précise, c'était à cause d'une condition structurale dans notre industrie.

4009   Le gouvernement, le CRTC a décidé au fil des nombreuses années que, au Canada, dans un grand pays comme le nôtre où il y a peu de population, que plusieurs services devaient exister.

4010   On accepte ce point de vue-là et je pense que les Canadiens sont servis d'une façon extraordinaire... extraordinaire, mais, évidemment, l'impact de cette décision-là sur la télévision conventionnelle a malheureusement été négatif et malheureusement, et ce n'est pas de votre faute ni la nôtre, c'est que le résultat, c'est que la télévision conventionnelle qui à tous les jours est la seule au Canada qui offre des services de nouvelles quotidiens, la télévision conventionnelle sera toujours dans une situation qui ne sera plus jamais comme avant.

4011   Alors, est-ce qu'on peut faire quelque chose? Est-ce que... le Conseil a dit à maintes et maintes reprises au fil des dernières années, dans toutes les décisions, la télévision locale au Canada est importante.

4012   Alors, on a peut-être un petit peu de misère lorsque, par exemple, monsieur Menzies, vous nous dites: Écoutez, bien, là, la télévision locale, peut-être qu'elle pourrait disparaître.

4013   Écoutez, vous avez dit à plusieurs reprises, puis on en est très heureux lorsque vous dites ça, que la télévision locale conventionnelle est encore l'assise du système canadien de radiodiffusion.

4014   Alors, si c'est ça qu'on veut, il faut trouver un moyen pour nous aider; c'est-à-dire, nous aider, c'est-à-dire que si demain matin vous gardez le Fonds pour les petits marchés lequel on vous demande, écoutez, le Fonds pour des petits marchés, la FAPL, ça pourrait aussi être la "value for signal" parce que quelle différence qu'il y aura entre la "value for signal" dans l'avenir puis le Fonds des petits marchés?

4015   Alors, écoutez, c'est sensiblement la même chose. C'est de l'argent que les distributeurs vont nous donner. Si ce n'est pas par le "value for signal", ça sera possiblement, si cela arrive, par les négociations.

4016   Alors, là, c'est nous qu'on vous dit, écoutez... et, d'ailleurs, pour vous dire à quel point et pour quelle raison qu'on rejette le processus de négociation, parce qu'étant tellement petit, lorsque vous voyez, par exemple, que les principaux BDU vous ont dit: Écoutez, nous, on est contre le FAPL, non seulement on est contre le FAPL, mais aujourd'hui, on est même en Cour Suprême pour vous dire à vous, le CRTC: Écoutez, vous n'avez même pas le droit de décider...

4017   THE CHAIRPERSON: Mr. Simard, I'm sorry, the value for signal is not discussed in here, please.

4018   M. SIMARD: O.k. O.k. O.k. So, je veux dire... alors, absolument, merci, monsieur le président, mais je voulais simplement souligner le fait que la FAPL ou le "value for signal" pourrait... pourrait être... sont des choses identiques pour nous.

4019   LE PRÉSIDENT: Est-ce que monsieur...

4020   CONSEILLER PENTEFOUNTAS: Justement, monsieur Simard, juste pour répondre à la question du conseiller Menzies, en fin de compte la question était: Est-ce que vous exigez aujourd'hui que le FAPL devienne... pour assurer votre rentabilité à long terme, ça doit devenir une espèce de fonds permanent?

4021   M. SIMARD: Bien, écoutez...

4022   CONSEILLER PENTEFOUNTAS: C'est la question.

4023   M. SIMARD: Oui.

4024   CONSEILLER PENTEFOUNTAS: Enlevons les deux fonds et séparons les deux fonds.

4025   M. SIMARD: Oui, oui, oui.

4026   CONSEILLER PENTEFOUNTAS: Et écartons pour l'instant la valeur du signal.

4027   M. SIMARD: Bien, écoutez, je ne voudrais pas vous donner une réponse qui serait à l'inverse de ce que mes collègues pensent, mais je pense fondamentalement notre réponse c'est oui.

4028   Oui, parce que le Fonds pour les petits marchés, qu'il soit transformé en négociation pour la valeur du signal, bien ce qu'on vous dit tout de suite, d'avance, on prend déjà les devants, on sait qu'on ne sera pas capable de négocier, nous, les petits marchés, avec les joueurs, les gros joueurs qui sont actuellement au Canada. Alors, c'est ça notre crainte.

4029   CONSEILLER PENTEFOUNTAS: Je comprends tout ça, mais jusqu'à il y a deux ans, tout le monde... vous êtes en affaires depuis plusieurs décennies?

4030   M. SIMARD: Oui, absolument.

4031   CONSEILLER PENTEFOUNTAS: Il y avait Terre-Neuve qui était ici il y a quelques minutes et ils sont en affaires depuis 55 ans. Là, vous êtes en train de nous dire que sans le FAPL, vous êtes en pleine route vers la disparition?

4032   M. SIMARD: Bien, écoutez, je vous ai dit...

4033   CONSEILLER PENTEFOUNTAS: Et jusqu'ici vous avez survécu puis, là, compte tenu du fait que ce Fonds existe depuis deux ans bien, suite à ça, ça sera la fin du monde pour vous autres?

4034   M. SIMARD: Non. Écoutez, monsieur Tom, excusez de vous couper, c'est que ce qu'on vous dit c'est que... je pense que ce que les petits radiodiffuseurs veulent dire, c'est que ce soit le FAPL ou que ce soit la valeur du signal qui, en soi, est extraordinaire que le Conseil ait décidé d'enfin au Canada, après avoir passé pendant 50 ans... donné des services de télévision, on puisse avoir droit, compte tenu de la quantité de CU qu'il y a...

4035   CONSEILLER PENTEFOUNTAS: Monsieur Simard, valeur du signal, là...

4036   M. SIMARD: Oui.

4037   CONSEILLER PENTEFOUNTAS: ... d'abord, il faut pas qu'on parle de ça.

4038   M. SIMARD: Non, je sais.

4039   CONSEILLER PENTEFOUNTAS: Puis, deuxièmement, si on suit la logique et les présentations des indépendants jusqu'ici, ce n'est pas un enjeu important pour vous parce que, compte tenu de votre taille, ça serait impossible pour vous autres d'en profiter de la valeur du signal.

4040   Alors, écartons ça pour l'instant.

4041   M. SIMARD: Oui, parfait.

4042   CONSEILLER PENTEFOUNTAS: Restons sur le FAPL.

4043   M. SIMARD: Oui.

4044   CONSEILLER PENTEFOUNTAS: Alors, jusqu'à il y a deux ans, vous étiez capable de rester en affaires pendant plusieurs décennies.

4045   M. SIMARD: Oui.

4046   CONSEILLER PENTEFOUNTAS: Et, là, vous nous dites que vous ne serez plus capable... vous ne serez plus en mesure de rester en affaires.

4047   M. SIMARD: Bien, monsieur le président...

4048   CONSEILLER PENTEFOUNTAS: En pratique?

4049   M. SIMARD: Écoutez, on vous dit que si on veut maintenir une qualité de programmation, si on veut maintenir l'écoute que les petites stations conventionnelles là pour essayer de maintenir nos revenus, oui, le Fonds est indispensable parce que les revenus qu'on anticipe des ventes locales et des ventes réseau, qui sont les grandes ventes qui se font dont la grande majorité de nos revenus, ne seront plus en augmentation.

4050   CONSEILLER PENTEFOUNTAS: Et, nous, par l'entremise DEDR, nous avons la responsabilité de vous garder en vie.

4051   M. SIMARD: Bien oui, parce que je pense que monsieur Tom, avec... Écoutez, ayant passé 45 années de ma vie en radiodiffusion, je veux dire, voyant le système canadien qui a évolué, je veux dire, mon père qui avait 88 ans qui est décédé il y a quelques années me disait quand j'avais 15 ans: «Un citoyen canadien qui détient une licence de radiodiffusion est in citoyen privilégié.»

4052   Vous avez, pour toutes sortes de bonnes raisons, vous, le Conseil, donné à quelques personnes au Canada une quantité de licences innombrable. Je veux dire, on n'est pas contre ça, ça a aidé le système, alors on a vécu toutes les raisons, mais, donc, ces grands systèmes-là redoivent à la communauté.

4053   Je pense qu'ils ont non seulement un devoir réglementaire, je pense qu'il y a aussi un devoir moral d'aider le système pour que nous puissions continuer à donner de la promotion locale.

4054   CONSEILLER PENTEFOUNTAS: Merci.

4055   MS SPENRATH: If I might just have one comment to that. I think that to go back to our presentation, you know, if -- we may be a lot wiser in three years of the plan if the LPIF were to continue for three more years and if, you know, we were able to get high dept carriage we might see more of a light at the end of the tunnel and we all might be wiser if we sat down again in three years.

4056   THE CHAIRPERSON: Commissioner Duncan.

4057   COMMISSIONER DUNCAN: I have, I guess, my same question. I'll just try to make it maybe clearer. We have the same objective. You want better programming for viewers and we want to see better programming for viewers, that's what we understand viewers want.

4058   So, help me here right now. You, of course, were not required to comply with an incrementality. You have satisfied an incrementality requirement.

4059   But if I looked out here to 2012, 2013, and 2014, I would feel good if I could see that that whole $15 million dollars that I am looking at here was expended in expenses related to programming and that they didn't show up on the bottom line.

4060   That's what is troubling me. That's what the money was for. And so -- and I understand, I take your point, Ms Spenrath, that you've just spent some of this money, your programs are getting on board.

4061   So, can you tell us maybe in your reply, in your additional information you're going to give us what those lines will look like in the next three or four years, so that we can see that if you continue to get this money, it will be reinvested in operations to produce programming, not capital equipment, not going to shareholders, not covering interest, for the purpose it was intended, then I think, you know, we would be satisfied. That is doing what we intended.

4062   MS SPENRATH: Yes, we can. Yes, we can provide that information subsequently.

4063   MR. ARNISH: If I can just also echo the concern from the Vice Chair about would we all be in business if there wasn't an LPIF Fund. I obviously can't speak for everyone here, we are all independent stations and ownership groups, but I guess a comment I could make is that we are not sure about the future when it comes to our advertising levels, which we -- that's what we depend on and we have certainly publicly many times thanked the Commission for the Small Market Local Programming Fund, it has done absolute wonders for us.

4064   The LPIF also has done that and Commissioner Duncan, I understand where you are coming from I think -- personally, I think we can do a better job and I'll just speak for myself, Mr. Vice Chairm that if LPIF disappeared, I would be disappointed, but I think we would still have business model going forward.

4065   It is for all the reasons that you heard here about carriage and HD and all that. We have all these situations that are confronting us and concerning us in the future and I am not sure that they are going to go away, but I think all of us here can give you an assurance and hope all my compatriots here at this table would agree with that, that we're in the business for the long hall, we are licensed to serve our communities and I think we do a very good job of that and we want to continue to do that in the future.

4066   COMMISSIONER PENTEFOUNTAS: We go about justifying to consumers the responsibility that we have... selon les dires de monsieur Simard puis je change un petit peu vos paroles, mais d'assurer un bail de 20 pour cent, comment est-ce qu'on peut justifier ça aux consommateurs qui paient la note tous les mois?

4067   M. SIMARD: Oui. Monsieur le vice-président, écoutez, je ne peux pas répondre au nom du groupe. Je pense que chaque entreprise individuelle a sa marge. Peut-être que ça pourrait être discuté individuellement avec chacun.

4068   Mais une chose est certaine, c'est que... une chose est certaine c'est que la profitabilité des stations va graduellement diminuer parce que lorsqu'on regarde en 2009 lorsque vous avez accepté de former le FAPL, le CRTC était au courant que la marge était de 11,4 pour cent à ce moment-là.

4069   Alors, évidemment, elle aurait été excessivement basse s'il n'y avait pas eu FAPL, mais je pense que l'orientation que l'on doit prendre, et là-dessus, monsieur le vice-président, il faudrait avoir les chiffres de la dernière année -- mais je pense que, vraiment, après l'ajustement du Fonds qui va graduellement... où chaque station va graduellement implanter des dépenses additionnelles, c'est certain, avec les revenus qui vont stagner, c'est certain que la profitabilité va diminuer.

4070   Mais je dois vous dire, monsieur le vice-président, que cet argent-là a été du moins... en tout cas, puis encore là, je pense que ça devrait être des réponses individuelles comme monsieur le président l'a demandé tantôt, c'est que... écoutez, simplement de notre part, nous avons investi $5 millions au cours des deux dernières années, alors...

4071   THE CHAIRPERSON: Like I've said earlier, you will all get an opportunity to comment individually on this as well.

4072   I think I just want to comment on a comment you've made, Mr. Arnish, about the future and no one has a crystal ball. I don't think there is a business in this country that doesn't go to sleep at night worrying about what the future will bring and what I've said earlier I think to the CORUS team when they were here, one of the reasons the Commission is here is to protect the public interest and to protect businesses that are required to sustain a democratic and open government and country and that's what we're here for as well.

4073   So, the insurance policy is here at the end of the day as well. The question is whether we are going to continue to support things that have actually resulted in bearing fruits in the last couple of years and I hear you saying that you're not sure what the future will bring. But like I've said, that's why we're here in the future.

4074   MR. ARNISH: We understand that.

4075   THE CHAIRPERSON: Counsel?

4076   MR. McCALLUM: Thank you. I think one question was left over from yesterday and it dealt with you felt if we were to be continued, what would you say about a condition of eligibility that the amount received from each eligible station is publicly disclosed?

4077   I think that question was asked to Mr. Arnish yesterday and left over and I wonder if there could be a response, not only from him, but also from the group?

4078   MS SPENRATH: Again, we have discussed that one question and, you know, we operate in very small markets, we're independent, some of us are private companies, so we would be reluctant to have that information disclosed and if it must be, it must be, but you know, our choice would be to not have it disclosed.

4079   MR. McCALLUM: Right, okay. So, the answer is: "If it must be, it must be"?

4080   MS SPENRATH: Yes.

4081   MR. McCALLUM: Thank you. Thank you very much. That concludes our examination.

4082   THE CHAIRPERSON: Thank you very much for your candid comments and we appreciate you all being here as well. Let's take a 10-minute break. Thank you.

--- Upon recessing at 1650

--- Upon resuming at 1703

4083   LA SECRÉTAIRE: Nous entendrons maintenant les présentations de Bellefeuille Production Ltée, Ciné Atlantik Studios et Productions du Milieu Inc.

4084   Nous commencerons avec la présentation de Bellefeuille Production Ltée. S'il vous plaît vous présenter. Vous avez 10 minutes pour votre présentation. Merci!

PRESENTATION

4085   M. BELLEFEUILLE : Merci beaucoup. Monsieur le Président, mesdames et messieurs les Conseillers, membres du personnel, je tiens à vous remercier de me permettre de comparaître devant vous aujourd'hui afin de partager mes points de vue concernant le fond d'amélioration de la programmation locale.

4086   Je suis producteur indépendant au Nouveau-Brunswick depuis 1986, à Moncton. Au début des années '80, après ma sortie d'université, j'ai passé les cinq premières années dans une entreprise de câblodistribution à la direction des programmes de la télévision communautaire. Alors, je suis familier avec ce médium.

4087   Je considère que depuis, j'ai acquis une assez bonne connaissance de la production francophone en milieu minoritaire, alors, presque une trentaine d'années.

4088   En tant que producteur indépendant, je tiens à réitérer mon appui à cette excellente initiative de la part du CRTC qu'est le FAPL, afin de pourvoir les régions d'un outil permettant un engagement réel au sein des communautés desservies par les stations régionales au pays et plus particulièrement sur nos petits marchés, soit Radio-Canada Acadie, CFTF-TV (réseau affilié à V) et Chau-TV (réseau affilié à TVA).

4089   Pour moi, une télévision locale ou régionale est vitale. Nos communautés ont besoin de connecter, de se voir, de savoir qu'elles existent, et ce, dans un environnement linguistique constamment menacé par l'assimilation.

4090   Il y a longtemps que le Canada se préoccupe des disparités régionales et met de l'avant des mesures pour satisfaire des Canadiens situés à l'extérieur des grands centres urbains. L'esprit même du FAPL devrait, selon moi, rester intègre et favoriser l'accessibilité des régions à une programmation qui reflète leurs milieux de vie qui, trop souvent, leur sont manquants sur les grandes chaînes urbaines canadiennes.

4091   Je suis ici aujourd'hui pour appuyer nos partenaires diffuseurs (Radio-Canada Acadie, Télé Inter-Rives et tous ses télédiffuseurs associés) qui ont bénéficié du FAPL depuis son instauration. Les argents qu'ils ont reçus leur ont permis de passer au travers de périodes difficiles, comme nous l'avons entendu au cours des deux dernières journées et comme diffuseurs conventionnels également. Et ils ont pu maintenir et améliorer, dans certains cas, la qualité de leur programmation en nouvelles et en heures de production d'émissions et d'information s'adressant directement à nos communautés, et ce, dans une diversité des genres.

4092   Comme producteur indépendant, il serait difficile sinon impossible de porter nos histoires au petit écran. Les exemples sont nombreux et cités dans les rapports de nos télédiffuseurs concernant le FAPL.

4093   J'aimerais vous rappeler également que je suis membre fondateur de l'Alliance des producteurs francophones du Canada et également, en fait, partie du conseil d'administration (et l'organisme vous a présenté, d'ailleurs, ses observations et un mémoire hier).

4094   Les consommateurs ont bénéficié à leur tour de plus d'heures locales et régionales, d'une plus grande couverture médiatique en nombre d'heures (bulletins d'informations sept jours sur sept) et d'une variété d'émissions qui ont été produites dans leurs milieux et auxquelles ils peuvent directement s'associer.

4095   Selon moi, sans le FAPL, nos diffuseurs auraient sans doute beaucoup de difficulté à atteindre les mêmes objectifs comme ils l'ont fait lors des trois dernières années, et ce, en déclenchant plusieurs projets régionaux.

4096   Messieurs, Mesdames, je vous remercie.

4097   LA SECRÉTAIRE: Merci.

4098   Nous entendrons maintenant la présentation de Ciné Atlantik Studios. Vous avez dix minutes. S'il vous plaît vous présenter.

PRESENTATION

4099   M. GAUTREAU : Oui, merci. Mon nom des Daniel Gautreau. Je suis le producteur principal chez Ciné Atlantik Studios et directeur général. Je vais vous présenter l'entreprise. Ciné Atlantik Studios, le CAS, a été fondé il y a quatre ans par un groupe de visionnaires qui croyaient aux talents locaux et au potentiel artistique.

4100   C'est à Tracadie-Sheila dans la péninsule acadienne, au nord du Nouveau-Brunswick qu'a été construit le seul studio de cinéma et de télévision haute définition à l'est de Québec. Les investisseurs du domaine privé ont cru au projet et ont tout fait pour que ce beau rêve se concrétise. Les objectifs de départ étaient sans équivoque: munir la province d'un centre de production télévisuelle et cinématographique à la fine pointe de la technologie. Étant donné le manque de précédent, il a fallu tracer les normes et user d'imagination.

4101   Comme vous le savez sûrement, la santé de la production en région est précaire. En avril 2011, le gouvernement provincial de David Elward a décidé, dans une vague de coupures aveugle, de faire table rase des crédits d'impôts destinés à la production télévisuelle cinématographique au Nouveau-Brunswick.

4102   Devant une levée de boucliers générale et des pressions venant de l'industrie, il décide de faire marche arrière et, en plus, de mettre des dispositifs d'aide à la production. En novembre de la même année, il décide d'améliorer ce même programme.

4103   Tout ça pour vous dire qu'en région, la fragilité de l'industrie est notable. La moindre modification aux programmes d'aide, aux structures financières provoque des tsunamis, en région, d'autant plus chez les francophones résidant à l'extérieur du Québec. Nous travaillons déjà dans la précarité.

4104   Les marges de manoeuvre sont moindres et les risques d'erreur ramenés à leur plus simple expression. Le cinéma et la télévision sont des créneaux d'expression qui se démocratisent de plus en plus. Les modes de production lourd et coûteux d'il y a 20 ans sont maintenant allégés et les plateformes de diffusion multipliées.

4105   Ces deux tangentes amènent un axe prévisible: la production comme mode d'expression populaire. De démystifier le domaine, tout en présentant le résultat, créé un intérêt et donne aux futurs créateurs la possibilité d'envisager un avenir dans le domaine. Les talents ne manquent pas et c'est l'opportunité qui créé cette demande.

4106   En résumé, notre situation est telle qu'une décision défavorable de votre part se répercute sur l'ensemble du tableau de nos projections et compromet sérieusement notre viabilité. Selon nous, le financement du FAPL devrait être maintenu à un niveau actuel et même, augmenté. La télévision locale francophone en région et les producteurs indépendants ont prouvé qu'il était possible de produire des émissions de qualité, enregistrer des succès d'écoute qui sont remarquables.

4107   Je vous remercie de votre attention et espère avoir trouvé les mots justes pour mettre en relief l'importance du FAPL au développement des productions en régions. Merci!

4108   LA SECRÉTAIRE: Merci. Nous entendrons maintenant la présentation de Productions du Milieu Inc. S'il vous plaît vous présenter. Vous avez dix minutes.

PRESENTATION

4109   M. SAVOIE: Bonjour. Mon nom est René Savoie. Je suis le président de Productions du Milieu.

4110   Alors, Monsieur le Président, Mesdames et Messieurs les conseillers, membres du personnel.

4111   Il me fait plaisir de venir vous présenter mon point de vue dans le cadre de l'examen du Fonds pour l'amélioration de la programmation locale (FAPL) en tant que producteur télévisuel et cinématographique indépendant opérant dans un milieu minoritaire francophone au Nouveau-Brunswick.

4112   Télé Inter-Rives, titulaire des stations CIMT-CHAU-TVA et la Société Radio-Canada, titulaire de CBAFT Moncton sont des partenaires principaux de Productions du Milieu.

4113   Ces deux partenaires profitent du FAPL et s'en servent pour produire du contenu local diversifié additionnel avec des producteurs indépendants de chez nous.

4114   Les productions francophones indépendantes en milieu minoritaire au Canada profitent du Fonds des Médias du Canada et, sans le déclenchement de licence de diffuseurs locaux, cette industrie en région est appelée à disparaître. Sans production locale indépendante, nous allons devoir nous tourner vers les diffuseurs dans les grands centres urbains.

4115   Il est évident que les nouvelles locales, produites par les diffuseurs sont la base pour une saine programmation locale. Mais les actualisés qui suscitent un grand intérêt ne reflètent pas tout le bagage culturel dont la population est en droit de recevoir.

4116   Les Acadiens sont un peuple vibrant qui est fier de son héritage et de sa culture et très actif dans la diffusion de celle-ci.

4117   Les Acadiens aiment se voir et s'entendre au cinéma et à la télé. Mais, ils sont désavantagés par leur situation démographique et géographique.

4118   Les possibilités qui s'offrent à eux sont souvent grâce aux plateformes de diffusion québécoise. On qu'à penser à Wilfred LeBouthillier et plus récemment à Jean-Marc Couture à Star Académie.

4119   Les diffuseurs locaux qui oeuvrent dans notre région n'ont que de petits segments dans la grille de programmation, car ils sont à la merci du réseau national qui diffuse la majorité de la programmation à partir de Montréal.

4120   Il est donc facile de comprendre que la quantité d'émissions qu'ils peuvent produire est limitée par les réseaux nationaux.

4121   Les chiffres proposés hier par monsieur Morin doivent prendre en considération cet état de fait.

4122   Les diffuseurs qui reçoivent des fonds du FAPL en région n'ont pas de temps d'antenne et de situation démographique qui permettent d'augmenter leur volume de nouvelles locales (local) comme d'autres diffuseurs qui ont plus de libertés et qui fonctionnent proches de centres urbains.

4123   Voici un exemple pour démontrer la problématique des diffuseurs régionaux qui diffuse un réseau national.

4124   Nous avons dû changer le jour de diffusion des trois derniers épisodes lors de la présentation de notre série dramatique «Rural.com» dans la grille horaire de CHAU-CIMT TVA, à l'automne denier.

4125   Nous sommes passés du jeudi soir pendant les sept premières semaines, au dimanche soir pour les trois dernières. Il fallait faire place à une nouvelle série américaine traduite pour le compte du réseau national TVA.

4126   Nous avons une industrie florissante en Acadie qui est prête à faire des sacrifices pour survivre.

4127   Nous produisons souvent à moindres coûts pour permettre aux travailleurs de rester et de continuer à travailler chez nous.

4128   Le FAPL, en plus de permettre des bulletins de nouvelles qui offrent une plus grande couverture du territoire, a permis de produire des émissions de variétés où les artistes de l'Acadie ont une plateforme, des séries documentaires qui montrent nos bâtisseurs et nos réalisations et des séries dramatiques avec des accents et des expressions qui nous ressemblent.

4129   Nous continuons à suivre le trafic du pont Jacques-Cartier à Montréal et la manifestation des étudiants au Québec sur une base régulière.

4130   Mais nous avons aussi des segments de nouvelles régionales qui montrent également les inondations à Kedgwick et la politique municipale de Caraquet.

4131   Nous suivons le développement du prochain Congrès Mondial Acadien prévu en 2014. Cette méga rencontre qui aura lieu au nord-ouest du Nouveau-Brunswick au Témiscouata dans le Québec et au Nord-est de l'État du Maine, mérite d'être diffusée aux bulletins de nouvelles et en programmation diversifiée.

4132   L'apport du FAPL est essentiel à de telles productions.

4133   Je crois qu'en plus d'avoir aidé à conserver les diffuseurs régionaux, le FAPL a permis le raffermissement de l'identité des populations en région et la diffusion des cultures qui autrement, tout comme les diffuseurs régionaux, seraient appelés à être anéantis par les géants qui s'agglomèrent à coups de milliards.

4134   Je remercie le CRTC d'avoir, dans a grande sagesse, sauvé les stations en détresse.

4135   Je comprends que ce Fonds a été mis en place comme mesure temporaire. Mais après quasiment trois ans, le Conseil doit voir les vrais enjeux et doit continuer à maintenir ce Fonds en place, spécialement pour les marchés qui autrement ne pourraient être desservis adéquatement par les stations locales.

4136   Les enjeux ne sont pas tous les mêmes pour chaque diffuseur et je comprends le défi auquel vous êtes confrontés afin d'élaborer les mécanismes qui vont empêcher les abus, comptabiliser les retombées et mettre en place un processus d'examen afin de rester objectif et juste, à l'égard de ceux qui payent la note.

4137   J'aimerais terminer en réitérant, qu'en plus d'une amélioration aux nouvelles locales, les stations qui reçoivent des fonds du FAPL soient obligées à un pourcentage de programmation additionnelle diversifiée et que les licences soient données à des producteurs indépendants. Ainsi, nous contribuons à la culture régionale et au développement de l'industrie ailleurs que dans les grands centres.

4138   Je suis confiant que le Conseil tiendra compte de ces recommandations et maintiendra le Fonds d'amélioration à la programmation locale.

4139   Merci beaucoup.

4140   LE PRÉSIDENT : Merci, Madame Poirier, s'il vous plaît.

4141   CONSEILLÈRE POIRIER : Merci beaucoup, Messieurs. Vous êtes parmi les derniers à passer. Je tiens à dire que c'est pas parce qu'on est les derniers que le point de vue perd de son importance.

4142   Au contraire, vous êtes parmi les seuls producteurs privés que nous recevrons qui vient de communautés linguistiques minoritaires, en milieu minoritaire.

4143   Alors, votre point de vue est très important pour nous.

4144   Peut-être, Monsieur Savoie, que vous n'étiez pas là ce matin quand je suis intervenue, de même que monsieur le Président pour dire que jamais le mot «temporaire» n'était dans l'avis public que nous avons donné.

4145   C'était écrit qu'on décidera si le FAPL doit se conserver dans sa forme initiale, être modifié ou abandonné.

4146   Mais «temporaire», c'est un mot que beaucoup ont utilisé, mais il ne fait pas partie de notre réglementation comme telle.

4147   Mes questions, je vous demanderais, si vous avez quelque chose à ajouter, vous les faites. Mais si vous êtes en accord, vous n'avez qu'à dire que vous êtes en accord avec Claude (ph).

4148   Parce que ça pourrait parfois être trop long, si vous voulez vous répéter. Et j'espère qu'on ne le fera pas.

4149   Donc, et est-ce que quelqu'un veut me dire, d'après vous, le Fonds a vraiment atteint ses objectifs surtout en milieu minoritaire comme les vôtres?

4150   Il a atteint tous ses objectifs?

4151   M. SAVOIE : D'après moi, ce qu'on a vu dans l'industrie à partir de Télé Inter-Rives et de Radio-Canada Acadie, c'est qu'il y a eu beaucoup de production qui a été faite, supplémentaire.

4152   Pour moi, ça, c'était l'objectif d'augmenter la production. Donc, ça a été fait.

4153   CONSEILLÈRE POIRIER : Et de faire en sorte que les gens de votre coin de pays se voient à l'écran entendre parler de leurs nouvelles.

4154   M. SAVOIE : Absolument.

4155   CONSEILLÈRE POIRIER : Bon. De ce côté-là...oui?

4156   M. GAUTREAU : Oui, je pourrais même ajouter aussi que chez nous, en plus de produire, le Fonds a servi aussi à de la formation et à garder des emplois chez nous.

4157   Fait que ça, c'est peut-être un aspect qu'on parle le moins, mais c'est un aspect économique qui est très, très, très important chez nous.

4158   CONSEILLÈRE POIRIER : Parfait.

4159   On a beaucoup parlé ces derniers jours de l'importance de distinguer entre les nouvelles et de la programmation générale.

4160   Certains disent, il faut qu'il y ait des nouvelles seulement, et le Fonds n'est là que pour ça.

4161   Alors que dans sa création, il inclut aussi une programmation locale diversifiée.

4162   Vous, vous êtes en train de nous dire qu'il faut garder la programmation locale diversifiée.

4163   J'aimerais que vous nous expliquiez pourquoi et que vous tentiez de convaincre les gens ici qu'on doit le faire, si jamais, à la limite, le Fonds était entre autres réduit, il y aurait peut-être encore moins d'argent.

4164   Pourquoi est-ce qu'on doit garder des émissions comme Rural.com ou d'autres émissions que vous avez produites en onde?

4165   M. SAVOIE : Pour moi, la culture, comme je viens de le dire dans mon allocution, la culture c'est pas seulement l'actualité.

4166   L'actualité, qu'est-ce qu'on a dans les nouvelles, c'est très important. Les gens s'identifient. On apprend ce qui se passe sur le terrain, sur les situations politiques, économiques, etc.

4167   Mais la culture acadienne, c'est plus que ça. La culture acadienne, c'est des accents, c'est une façon de parler, c'est une façon de chanter, puis c'est des choses comme ça qu'on se doit, autant au niveau des réalisations qu'on ne voit pas dans les nouvelles, les réalisations qui se passent ailleurs que dans l'actualité.

4168   Alors, les grandes réalisations doivent être montrées dans des documentaires. Qu'est-ce qui se passe au niveau de la variété, au niveau de la dramatique? Pour moi, c'est toutes des choses qui sont essentielles à la survie d'une culture.

4169   La culture, c'est pas juste des nouvelles. Les nouvelles, c'est très important pour la vie, pour ce qu'on vit ensemble.

4170   Mais la culture d'une minorité, on est 235000 Acadiens au Nouveau-Brunswick sur un total de plus de 765000 personnes au Nouveau-Brunswick.

4171   On est la seule province bilingue. Donc, les Acadiens se sont défendu toute leur vie pour rester une culture vivante.

4172   Et je crois que c'est très important pour nous que cette culture-là puisse être.

4173   CONSEILLÈRE POIRIER : Parfait. Donc, pour ne pas entrer dans les détails, parce que vous pourriez chacun me donner un exemple.

4174   Est-ce qu'un des deux autres producteurs pourrait me donner l'exemple d'une émission qui a été faite grâce au FAPL qui n'est pas de la nouvelle et qui, à votre avis, ce serait difficile de le produire avec les argents disponibles dans d'autres fonds.

4175   Parce qu'on sait qu'il y a le Fonds canadien des médias. Il existe d'autres fonds. Et on pourrait vous dire, bien, il y a d'autres fonds pour aller chercher de l'argent pour produire de telles productions.

4176   Est-ce que vous pourriez nous donner un exemple?

4177   M. GAUTREAU : Oui. Moi j'ai deux exemples concrets. C'est-à-dire qu'il y a une série qui a été faite chez nous ça fait trois ans, deux, trois ans «La famille Basque» dont vous avez probablement jamais entendu parler ou très peu.

4178   Mais c'était très local, ça a levé de bonnes cotes d'écoute. Puis sans l'aide du FAPL, il était hors de question. Les gens auraient jamais pu le produire.

4179   CONSEILLÈRE POIRIER : Et il y a pas d'autres fonds qui auraient pu vous aider?

4180   M. GAUTREAU : Non.

4181   CONSEILLÈRE POIRIER : Il y a aucun autre financement que vous auriez pu trouver dans votre coin pour faire une telle émission?

4182   M. GAUTREAU : Pas à ma connaissance. Mais à l'époque, j'étais pas au studio. On parle de trois ans passés.

4183   CONSEILLÈRE POIRIER : Monsieur Bellefeuille?

4184   M. BELLEFEUILLE : Oui, Madame Poirier. Tout récemment, avec Télé Inter-Rives, nous avons produit une série, huit road movies à travers l'Atlantique, de Moncton, Memramcook au Nouveau-Brunswick, Chétican, L'Ile-du-Prince-Édouard, les Iles-de-la-Madeleine, Caraquet également, la Gaspésie, Grande-Vallée.

4185   Et directement, c'est que le diffuseur, parce qu'il faut savoir que dans le système de production indépendante qui mène au Fonds des médias du Canada, le diffuseur doit contribuer.

4186   Alors, on dit que le diffuseur fait foi de tout, déclenche, est le déclencheur.

4187   Si le diffuseur ne déclenche pas, il n'y a pas de projet.

4188   CONSEILLÈRE POIRIER : Et donc, sans le FAPL, il ne pourrait pas déclencher le tout.

4189   M. BELLEFEUILLE : Alors, dans nos discussions, et traditionnellement les téléviseurs de petit marché - parce qu'on sait qu'on travaillait traditionnellement, ça fait presque 25 ans que je collabore de différentes façons avec la Société Radio-Canada à titre d'indépendant, et bien ça a permis justement aux petits diffuseurs qui touchent directement nos marchés, qui touchent les gens, et de diversifier cette grille-là, parce que nécessairement, Radio-Canada n'est pas nécessairement intéressé à un type de projet particulier.

4190   Même si le projet peut être excellent et pertinent pour la communauté acadienne, la communauté francophone.

4191   CONSEILLÈRE POIRIER : Donc, il préfère avoir, garder ses accès au Fonds pour des productions qui vont être au réseau plutôt que des productions qui vont être détachées de la chaîne.

4192   M. BELLEFEUILLE : Écoutez, c'est possible effectivement. Mais lorsqu'on regarde les contrats, ils se réservent toujours dans les contrats de toute façon, l'accès d'une diffusion au réseau, même quand le projet est déclenché de façon régionale.

4193   CONSEILLÈRE POIRIER : Oui. Vous voulez ajouter, Monsieur Savoie, brièvement?

4194   M. SAVOIE : Oui, j'aimerais ajouter que Télé Inter-Rives, CHAU-TV, c'est eux qui ont fait «La famille Basque» il y a sept ans, sept ans, ça a commencé - c'est avant le FAPL - avait des petits montants. Ils mettaient des petits montants pour la production locale.

4195   À partir du moment qu'ils ont eu le FAPL, on a vu une augmentation certaine. Monsieur Bellefeuille en a profité. Moi, j'ai pu faire une série de variétés, une série de dramatiques.

4196   Donc, les montants ont augmenté. Ils ont donné plus de licences.

4197   CONSEILLÈRE POIRIER : Donc, on a pu augmenter le nombre, peut-être, d'émissions ou la qualité des émissions.

4198   On pourrait en parler longtemps, briev...

4199   M. GAUTREAU : Juste en terminant. C'est que tout à l'heure, j'ai commis un impair. C'est pas «La famille Basque», mais «Tout le monde à bord» qui est une émission de variétés. Je m'excuse.

4200   CONSEILLÈRE POIRIER : O.K.

4201   M. GAUTREAU : Mais aussi, c'est que, de dire que nous, on a deux projets de déposés à CHAU-TV, et que c'est conditionnel à...

4202   CONSEILLÈRE POIRIER : Au renouvellement du Fonds.

4203   M. GAUTREAU : Oui. Absolument.

4204   CONSEILLÈRE POIRIER : Monsieur Savoie, vous dites que vous aimeriez qu'il y ait un pourcentage du Fonds qui soit dédié aux productions indépendantes.

4205   Est-ce que vous voulez nous préciser un petit peu plus votre idée? Ça serait quoi le pourcentage et qu'est-ce que vous voudriez?

4206   M. SAVOIE : Bien, le pourcentage, d'après moi, ça a pas besoin... parce qu'il y a beaucoup d'argent qui va aux nouvelles.

4207   Alors, on sait pas nous, c'est quoi le pourcentage qui va aux nouvelles.

4208   Ensuite, ils reçoivent l'argent du FAPL, disons Radio-Canada Acadie ou CHAU.

4209   Bien, s'ils sont obligés de donner à des producteurs locaux, c'est certain qu'on va avoir, nous, un bénéfice pour remettre dans l'industrie.

4210   Sinon, s'ils peuvent décider de mettre tout dans les nouvelles, puis là, c'est fini. Nous, on n'existe plus pour eux-autres.

4211   CONSEILLÈRE POIRIER : Mais, vous avez pas de pourcentage particulier à nous suggérer de ce côté-là?

4212   M. SAVOIE : Bien, on sait que c'est 80 pour cent à 90 pour cent des fonds du FAPL va aux nouvelles.

4213   Donc, au moins, qu'ils soient obligés de mettre un 15 pour cent en licence avec des producteurs indépendants. Ça serait intéressant.

4214   CONSEILLÈRE POIRIER : Parfait.

4215   Vous savez que le FAPL, on le regarde très activement, parce que ce sont, grosso modo, les citoyens qui payent pour avoir plus de programmation locale dans les régions.

4216   Il va falloir absolument resserrer les critères.

4217   Est-ce que, de ce côté-là, pour s'assurer que le fond est efficace, vous avez pensé à des critères qu'on devrait exiger si jamais on décide de renouveler le Fonds pour faire en sorte que les citoyens canadiens en auront vraiment pour leur argent.

4218   M. BELLEFEUILLE : Bien moi, je suis absolument d'accord. Et de toute façon, je crois que ce qui est important, c'est que pour nous à la production, au départ, je crois que c'est un peu nébuleux, le concept.

4219   On avait compris, on nous avait bien expliqué au niveau de la production, l'augmentation en nouvelles. Mais au niveau de la diversification et autres contenus dans de petits marchés.

4220   Alors, effectivement, même nous qui avions bénéficié, ne savions pas que nous avions bénéficié du FAPL.

4221   CONSEILLÈRE POIRIER : Alors, vous êtes pour plus de transparence.

4222   M. BELLEFEUILLE : Bien, effectivement. Plus de transparence.

4223   Puis à ce moment-là, il y a la réédition des comptes qui est importante.

4224   Et je dois vous dire, c'est surprenant parce qu'on entend des chiffres. J'écoutais monsieur Lalande ce matin, puis bon, effectivement, nous, dans les petits marchés, nous sommes totalement tributaires. Et dans notre cas, de Radio-Canada et d'Inter-Rives.

4225   Alors effectivement les circonstances présentes nous effraient un peu quant à l'avenir.

4226   CONSEILLÈRE POIRIER : Je ne veux pas mal vous interpréter, Monsieur Bellefeuille. Mais êtes-vous en train de nous dire que pour qu'une station puisse avoir accès au FAPL, on devrait exiger d'eux qu'ils répondent à un rapport détaillé de ce qu'ils font avec les argents du FAPL et s'ils ne sont pas prêts à le faire, ils n'auront pas d'argent.

4227   M. BELLEFEUILLE : Bien écoutez, au Fonds des médias du Canada, les diffuseurs sont redevables. Et les statistiques sont importantes, le montant de licence, on les retrouve.

4228   Alors, je pense que c'est normal qu'il y ait ce suivi-là et qu'on voit de retombées concrètes au niveau de qualité.

4229   On a parlé beaucoup de qualité, mais également de quantité d'heures qui doit absolument augmenter.

4230   CONSEILLÈRE POIRIER : Est-ce qu'il y a d'autres critères ou autres choses à ajouter, Messieurs?

4231   M. SAVOIE : Oui, moi j'aimerais rajouter que - premièrement, quand un diffuseur donne une licence à un producteur privé, ça me permet moi d'aller chercher une grosse partie du budget dans les crédits d'impôt ou dans le Fonds des médias.

4232   Alors, à ce moment-là, le diffuseur, ça lui coûte beaucoup moins cher de faire une production à l'externe que de faire une production à l'interne.

4233   De là, mon dire qu'on devrait donner, obliger ceux qui reçoivent du FAPL de donner la production à l'extérieur.

4234   Ce que Jean-Claude disait aussi au niveau de ce que le Fonds, on sait pas où l'argent va, on sait pas. Puis que nous, avec le Fonds des médias, ils sont obligés. Mais il y a toujours une confidentialité.

4235   On entendait les médias ici qui ont peur de donner leurs données. Ça devient un problème concurrentiel.

4236   Alors à ce moment-là, si les données sont restées confidentielles à l'intérieur du FAPL, pour que vous analysiez si les critères sont bien suivis, cette objection-là des médias, des diffuseurs de donner leurs chiffres pourrait peut-être être amoindrie.

4237   CONSEILLÈRE POIRIER : Monsieur Bellefeuille, vous avez parlé d'une période difficile.

4238   Nous, on pense que la période difficile est à peu près terminée partout. Mais peut-être que la réalité est autre dans l'est du pays.

4239   Est-ce qu'il y a toujours des périodes difficiles au Nouveau-Brunswick, en Acadie ou est-ce qu'elle n'est pas terminée comme elle semble être terminée partout ailleurs au Canada?

4240   Et ce qui justifiait, je tiens à le dire, l'augmentation de 1 à 1.5 pour cent.

4241   M. BELLEFEUILLE : Mm-hmm. Oui, mais nous ne serions pas en désaccord également au fait d'une répartition ou d'une diminution.

4242   Ce que nous disons, c'est que dans certains coins, puis même nous en Acadie, que ce soit au niveau des pêches, que ce soit au niveau des mines, on sait que dans le coin de Bathurst, le Brunswick Mining va fermer ses portes.

4243   Il y a 3000 emplois qui seront perdus sur une communauté peut-être une agglomération d'un peu plus de 100000, c'est beaucoup.

4244   Alors, c'est important, effectivement. Et également dans le réseau télévisuel, de bien maintenir cette connexion, ces contacts-là. Parce que les gens ont besoin d'être informés.

4245   Vous savez, quand je suis arrivé au Nouveau-Brunswick en '77, on vivait à peine cinq jours par semaine. Alors, on ouvrait le lundi matin, on fermait le vendredi. Et le samedi et le dimanche, bien en français, au niveau de l'information, au niveau d'émissions il y avait absolument rien.

4246   Alors aujourd'hui, on a fait un grand pas. Et on a vu, et quand j'étais en câblodistribution également, quand les signaux de Cancom et d'autres signaux francophones sont arrivés, c'était la bienvenue.

4247   Nous, on s'est dit, on croyait avec les nouvelles technologies qu'on pourrait justement pouvoir profiter - parce qu'autrefois, ça se faisait plutôt de façon analogue, et par cassette - profiter des signaux et pouvoir ajouter, complémenter une programmation locale et plus régionale.

4248   Sinon, c'est impossible dans notre cas de pouvoir remplir. Parce que nous n'avons pas de diffuseur privé sur notre territoire.

4249   CONSEILLÈRE POIRIER : Ma dernière question, et ensuite, je laisse les autres conseillers aller de l'avant.

4250   Si le FAPL était arrêté, si on disait non, on décide de ne pas faire, de poursuivre dans cette avenue-là, quel serait l'impact dans des communautés linguistiques minoritaires comme les vôtres?

4251   Est-ce que c'est encore plus grand? Est-ce que c'est pareil comme ailleurs? Est-ce que ce serait différent comme impact et combien de temps faudrait-il se donner avant de mettre fin au FAPL?

4252   M. BELLEFEUILLE : Écoutez, on a parlé de diversification des genres. Vous savez qu'au Nouveau-Brunswick, René le mentionnait, si on parle de 235000 250000 francophones. Nous ne sommes pas dans tous les genres.

4253   Dernièrement, effectivement, nous avons eu l'opportunité d'avoir une dramatique, la Société d'État a déclenché une dramatique, Belle-Baie.

4254   Nous n'avons aucune émission à la Petite enfance. Alors, présentement, le groupe Inter-Rives a déclenché un projet en développement, potentiellement.

4255   Alors je pense que ça c'est important de nous doter des outils. Nous sommes très obligés de consommer le produit francophone, souvent, qui vient du Québec. Parce que, l'offre télévisuelle n'est pas disponible.

4256   Alors c'est sûr que les modèles - et ça, c'est important. J'ai eu l'opportunité pendant neuf ans de faire un magasine économique qui s'appelle «Temps d'affaires» sur les ondes de Radio-Canada Atlantiques dans les années '80 pour neuf ans, qui était diffusé à TV5 et qui était diffusé à RDI également.

4257   Mais c'était une émission à encrage régional qui a dressé la région pour créer justement un sentiment, un esprit entrepreneurial. Et également de voir qu'on pouvait justement se développer, et tenter d'être créatif.

4258   Et ça, c'est ces incitatifs-là qui sont importants.

4259   Alors, je pense qu'on a besoin d'exister, non pas seulement de vivre. Et la télévision est un moyen. Parce que la masse média, si on dit, puis les normes de la télévision - et on a retiré la publicité à la télévision pour dire qu'elle influençait les enfants. Bien effectivement, elle influence énormément.

4260   CONSEILLÈRE POIRIER : Un dernier point à ajouter, Monsieur?

4261   M. SAVOIE : Oui, mais si on enlève le FAPL, pour répondre à votre question, je crois qu'on va voir une grande diminution de licences octroyées à des producteurs indépendants.

4262   On va se retrouver avec l'information, même chez Télé Inter-Rives ont rajouté des journalistes au Nouveau-Brunswick depuis l'avènement du FAPL.

4263   Ils ont ouvert un bureau à Edmundston, ils ont refermé celui de Caraquet.

4264   Donc, tout le nord du Nouveau-Brunswick a été beaucoup mieux desservi au niveau des nouvelles locales.

4265   Je crois que ça, ça va avoir un impact. Parce qu'ils ont augmenté grâce au FAPL. S'ils n'y ont pas ce financement-là, j'ai l'impression qu'on va revenir où on était, parce qu'ils l'ont pas, l'argent. Elle tombe pas de nulle part.

4266   CONSEILLÈRE POIRIER : Oui, très brièvement, Monsieur Bellefeuille.

4267   M. BELLEFEUILLE : Vous savez, c'est un effet de levier. En fin de compte, ce qu'on a besoin, c'est un effet de levier.

4268   Ça, est-ce que ça c'est assez clair?

4269   CONSEILLÈRE POIRIER : Oui.

4270   M. BELLEFEUILLE : Je vous remercie.

4271   CONSEILLÈRE POIRIER : Je vous remercie. Je vous laisse, Monsieur le Président.

4272   LE PRÉSIDENT : Merci.

4273   Est-ce qu'il y a d'autres questions? Non. O.K.

4274   Merci bien.

4275   M. BELLEFEUILLE : Merci beaucoup de nous avoir permis de nous présenter devant vous.

4276   LA SECRÉTAIRE : Merci.

4277   We will now proceed with the presentations by Ian Gailer and Steven James May.

4278   Please come to the presentation table.

--- Pause

4279   THE SECRETARY: We will begin with the presentation -- nous commencerons avec la présentation de monsieur Gailer.

4280   Vous pouvez commencer. Merci.

PRESENTATION

4281   M. GAILER : Bonjour. Merci de nous recevoir. Je serai bref.

4282   J'avais fait une présentation plus détaillée, mais, bon, je pense qu'il y a beaucoup de choses qui ont été dites aujourd'hui, puis je pense que ce n'est pas nécessaire de les redire encore. Je vais tenter, encore une fois, de pouvoir bien les circonscrire.

4283   Je viens de Saguenay, donc, de Chicoutimi. J'y habite depuis huit ans. J'ai, bon, fait plusieurs études. J'ai fait art et technologie des médias en téléradio. Après ça, j'ai fait administration. J'ai fait de la production nationale, entre autres, à Historia. Puis ensuite, je suis allé en région. J'ai fait le tour des nouvelles à travailler là-bas comme technicien. Puis j'ai pris la direction de Regard sur les courts métrages au Saguenay et la présidence du Conseil des Arts de Saguenay.

4284   Alors, je pense que pour un portrait de la production locale, je suis, somme toute, assez au fait, mais surtout de son impact. En fait, souvent, on entend parler au courant de la journée d'identité, et plutôt, moi, je vous dirais que ça nous permet surtout d'exister.

4285   Il y a un enjeu particulier qui a été répété, mais je vais essayer de le circonscrire en ce sens que l'on reçoit les nouvelles d'ailleurs, mais lorsque l'on est -- par exemple, je prends notre cas -- un événement d'envergure nationale, on est le Festival de court métrages du Québec, on se promène beaucoup, on programme pour partout, plusieurs festivals dans le monde, et je vous dirais que si on a un entrefilet dans " La Presse ", c'est exceptionnel. Si on a un entrefilet dans les nouvelles nationales aussi.

4286   Il a fallu au fil des années que l'on puisse gagner nos galons, et puis, bon, de fil en aiguille, on a pu développer une expertise, développer des médias pour qu'on puisse être couvert de façon, somme toute, raisonnable.

4287   Ceci dit, tous n'ont pas notre chance. Que ce soit des pièces de théâtre qui sont montées en région, que ce soit des initiatives communautaires ou politiques, je serais très heureux de pouvoir suivre nationalement ce qui se passe dans les autres régions pour être au fait aussi de ce qui se passe au niveau... Je parle au niveau québécois et aussi au niveau national.

4288   Bon, bien entendu, il y a toujours le pouvoir politique, le pouvoir communautaire, puis le pouvoir culturel, et de pouvoir exister, ça se transmet de cette façon-là, donc, de pouvoir éventuellement être mis de l'avant en tant que manifestation, communauté ou groupe politique ou d'idée.

4289   Mais aussi, vos décisions stratégiques ont des incidences, je vous dirais, opérationnelles très importantes pour nous. C'est que ça crée un milieu, et ça l'entretient.

4290   Probablement au cours de votre longue expérience, vous avez probablement vu des productions locales, des publicités locales, un environnement local, et puis souvent, on en regarde certaines, pas toutes, mais certaines avec un sourire en coin. Ceci dit, c'est un problème parfois d'expertise, de temps ou de ressources.

4291   Lorsque l'on offre comme le Fonds -- vous l'avez fait, il y a quelques années -- une possibilité de pouvoir développer une expertise, eh bien, pour les gens en région, ça l'a une valeur qui est inestimable parce que ça crée un milieu et ça développe cette expertise-là.

4292   Et cette expertise que nous, on peut témoigner au Festival, un Festival de courts métrages au Saguenay, c'est quand même un... mais il y a un milieu quand même très intéressant, et c'est représentatif de quelque chose.

4293   Ceci dit, ces compétences-là demeurent et nous permettent, encore une fois, de pouvoir, nous d'une part, bien rayonner, mais aussi de pouvoir bien présenter ce qui se fait au niveau culturel dans la région et de pouvoir présenter ce qui se fait aussi au niveau politique et au niveau communautaire, et, bien entendu, ça améliore le produit.

4294   Et donc, lorsqu'on améliore le produit, c'est une certaine forme de valorisation, parce que, encore une fois, de voir le reflet de nous-mêmes sur la télévision, les grands médias et autres, sont quand même ça, et que ce soit fait, bon, comme je vous l'ai dit, d'une certaine façon avec un sourire en coin, eh bien, ce n'est pas l'idéal.

4295   Alors, de pouvoir justement avoir ce type d'initiative là qui n'est pas que ça. On ne doit pas, je pense, en tant que région du Canada ou du Québec, se fonder entièrement là-dessus, mais que ça soit un outil supplémentaire dans notre portefeuille, je pense que c'est fondamental. La façon dont vous l'orienterez, je ne suis pas un stratège et je ne peux pas prendre de décision à vos places.

4296   Ceci dit, je vous demande de considérer cet impact-là et cette influence-là que vous pouvez avoir sur des milieux télévisuels et cinématographiques dans les différentes régions du Canada.

4297   Et encore une fois, je voudrais terminer avec l'importance de la qualité de diffusion.

4298   On a parlé, bon, encore une fois, de l'initiative de " Belle-Baie " et des autres choses comme ça. C'est une source de fierté. Et ça, c'est difficilement monnayable, sauf lorsque l'on vit dans des régions comme Saguenay, comme en Atlantique tout à l'heure, et ça, pour des groupes, des régions, des artistes, c'est très important. Je vous remercie.

4299   LA SECRÉTAIRE : Merci.

4300   We will now hear the presentation of Mr. Steven James May.

4301   Mr. May, you may begin. You have five minutes for your presentation.

PRESENTATION

4302   M. MAY : Merci.

4303   Mr. Chairman, Mr. Vice-Chairman, Commissioners, CRTC staff and fellow Canadians out there, my name is Steven James May.

4304   As you might be able to tell, I'm an over-the-air television advocate. I'm also a PhD candidate in Communication and Culture at York and Ryerson universities in Toronto.

4305   I have here -- this is my antenna from home. It's a $45 antenna I ordered online from the United States. It's also on a broken shovel handle that was free. And along with a $100 digital-to-analog converter box that I purchased in Napanee, Ontario, this antenna, this lovely object, allows me to pull in free-to-air digital over-the-air television signals in my student apartment in Toronto. As a graduate student paying $900 a month in rent, I truly appreciate the signals that this antenna provides me.

4306   In the interest of time, it's been a long day, I'll move forward.

4307   I would like you to keep this antenna in mind when considering the LPIF objective of ensuring that Canadians in smaller Canadian markets continue to receive a diversity of local programming, particularly local news programming.

4308   I will be focusing on the receiving part of this LPIF objective.

4309   I'm interested in ensuring that Canada's television broadcasting system serves all Canadians. I feel the best way to do this is to deliver television signals to our citizens in the most affordable and accessible fashion.

4310   Over-the-air television broadcasting, specifically digital high definition over-the-air television broadcasting, is a clear 21st century winner in terms of delivering local television programming to Canadians in an affordable and accessible manner.

4311   In response to your question, should the LPIF be eliminated, my answer is no. As for the impact this would have on the amount and type of local programming produced, I'm confident, especially based on what I've heard today and yesterday at the hearing, that the current state of the television broadcasting system in Canada, while it may be improving, it sounds like from what we've heard from CHCH and others that they're not quite out of the woods and I feel that the elimination of the LPIF Fund would indeed impact the amount and type of local programming produced.

4312   In terms of methods or incentives available to ensure that local programming will continue to be produced -- this is perhaps where my intervention gets a bit radical -- I feel that LPIF should be temporarily increased to 2 percent of BDU gross revenues for a period of five years, with a minimum of 0.5 percent of LPIF funds being earmarked solely for the purchase and installation of digital television transmitters by broadcasters. So a .5 percent bonus, shall we say, to be spent specifically on transmitters, which I know to date hasn't been part of the Fund specifically.

4313   The reason I'm suggesting this is that the Government of Canada decided long ago that switching from analog to digital over-the-air television broadcast system in Canada would be in the best interest of Canadians.

4314   Continuing to deliver local television programming will rely in part on the purchase and installation of more digital television transmitters so that local programming can be received by Canadians. It's for this reason that I propose a temporary increase in the LPIF, with a particular portion earmarked for digital transmitters.

4315   Now clearly, I'm well served in terms of over-the-air in Toronto, but I have friends and family who live in non-mandatory digital television markets across this country that have already lost or stand to lose access to local television due to a lack of local digital transmitters. My LPIF bonus, if you will, seeks to remedy this problem.

4316   I have some other comments, but to wrap up, prior to coming here today, I was talking about the hearing on Twitter and I got some really great feedback from a gentleman in Toronto, Mike Vormiteg(ph), and he sort of modified my proposal, which is part of the magic of social media, I suppose.

4317   He suggested that the amount of funds that a broadcaster could receive for LPIF-eligible stations in Canada would depend on how much of their broadcast system has been shifted to digital, not just in mandatory markets. So I thought that was a pretty good idea.

4318   That's all for now. Thank you for the time.

4319   THE CHAIRPERSON: Thank you both very much.

4320   Any questions from -- Commissioner Lamarre.

4321   CONSEILLÈRE LAMARRE : Merci, Monsieur le Président.

4322   Monsieur Gailer... Je prononce bien votre nom?

4323   M. GAILER : Oui.

4324   CONSEILLÈRE LAMARRE : Merci. Vous parliez de, au fond, la visibilité que vous pouviez avoir à l'extérieur de votre propre marché, vu que vous êtes région. Je note qu'il y a quand même eu un bel article le 14 mars dans " Le Devoir " là au sujet du Festival Regard sur les courts métrages. Alors, quand même là, vous avez bien fait.

4325   M. GAILER : Merci. Mais, en fait, c'est... Comme j'ai dit, ce n'est pas tout le monde qui a notre chance. Qu'on soit dans le Nord canadien, dans les provinces de l'Est ou de l'Ouest, je pense qu'on a une chance, nous, de pouvoir bien travailler les médias. Mais d'abord, ça s'est gagné de façon locale.

4326   Et si on n'avait pas eu l'appui local des médias, la connaissance des gens de notre manifestation dans la localité et puis appuyé, justement, bon, encore cette année par une émission spéciale aussi faite en collaboration avec Radio-Canada, c'est toutes ces petites initiatives-là qui permettent à des manifestations de se «crédibiliser» à l'extérieur parce que je vous mentirais de dire que lorsqu'on part de la région et qu'on arrive dans les grands centres, on part avec deux prises.

4327   C'est normal et ça fait partie de la game, «Loin des yeux, loin du coeur», c'est correct, mais ceci dit, lorsque ces initiatives-là existent, je vais vous sensibiliser à l'importance de l'impact que ça peut avoir sur le milieu au niveau médiatique, d'une part, et aussi pour les jeunes qui y travaillent, parce que ça forme une expertise et puis, ça, c'est fondamental.

4328   CONSEILLÈRE LAMARRE: Et ce que je retiens, et c'est là-dessus que je vais élaborer un petit peu plus avec vous, dans votre mémoire écrit que vous nous avez soumis au mois de janvier, vous faites part de l'importance du FAPL comme bougie d'allumage de la production locale.

4329   Vous êtes à Chicoutimi, je me permets d'utiliser l'expression parce que c'est ce que vous avez écrit sur votre lettre, que ça venait de Chicoutimi, et à Chicoutimi vous avez une station de Radio-Canada, vous avez une station de TVA, vous avez une station de V.

4330   Le FAPL est en place et ces trois réseaux-là en bénéficient, bénéficient du Fonds depuis le début. Pouvez-vous me dire, vous, dans votre expérience de tous les jours, si vous avez une... qu'est-ce que vous avez noté comme amélioration de la programmation locale?

4331   M. GAILER: Bien, en fait, c'est sûr que c'est sporadique pour les gros projets. Je parle de l'émission «Tout le monde en parlait» qu'ils ont fait sur Saint-Jean-Vianney, mais aussi du Téléjournal, Radio-Canada, je crois, sous toute réserve, qui a su bénéficier de tout ça aussi avec une couverture qui est de fin de semaine.

4332   Encore une fois, ce n'est parce qu'on est à Chicoutimi ou qu'on est à Caraquet que la fin de semaine la boule arrête de tourner et de pouvoir avoir cette couverture-là ça permet... et surtout je parle au niveau culturel parce que c'est ce que je connais le plus, de pouvoir avoir cette couverture-là.

4333   Il se passe des choses en région le week-end, alors pourquoi est-ce qu'on n'a pas le droit à cette couverture-là? Alors, pourquoi est-ce que nos pairs, les citoyens, ne peuvent voir ce qui se passe live? Alors, pourquoi encore une fois, pour exister, il faudrait qu'on fasse un événement le jeudi soir? Ce serait un peu faux de penser ça.

4334   Alors, de pouvoir avoir cette opportunité-là encore une fois je pense, qui est complémentaire à d'autres sortes d'enveloppe, mais en région, ceci est fondamental.

4335   Les gens tout à l'heure du canal de Nouvelles en ont parlé, pour nous à Saguenay, c'est un beau début et j'espère que ça pourra se développer encore plus. Je comprends que ça prend des sous, mais encore une fois lorsque c'est normé et lorsque vos stratégies pourront être orientées en ce sens-là en pensant à cet impact-là envers les régions, je pense que, ça, ça sera fondamental.

4336   Et vous pourrez être surpris des répercussions parce que plus on fait travailler des gens, ça crée un milieu et ce milieu-là est de plus en plus professionnel, peut faire des films en ce qui me concerne, parce qu'on le voit, mais peuvent aussi faire des vidéos corporatifs de meilleure qualité. Ils peuvent faire des publicités de meilleure qualité. On a tous vu des choses particulières.

4337   Alors, bon, c'est une boule qui tourne et puis je pense que le FAPL, dans le sens de bougie d'allumage, c'était ce que je voulais exprimer.

4338   CONSEILLÈRE LAMARRE: Et si on devait resserrer certains critères.

4339   Présentement, l'argent du Fonds peut être dépensé pour la production locale, principalement c'est dépensé pour des nouvelles, mais ça peut, pour l'instant, être dépensé pour des productions culturelles aussi locales.

4340   C'est parce que je comprends de votre intervention, vous, vous estimez que cette portion-là doit pouvoir demeurer, même si on resserre les critères?

4341   M. GAILER: Oui. Mais aussi on a parlé de valeur des fictions, mais encore une fois des fictions ça demande une autre sorte de milieu. Ça demande des producteurs en région et ce n'est pas toutes les régions qui peuvent en bénéficier.

4342   Et lorsqu'on déplace des productions en région, bien ils ont tous ce qu'on appelle les «critères des syndicats, alors, on a les primes d'éloignement, les per diem. Alors, ça aussi, stratégiquement -- puis, là, on s'éloigne, mais je veux pas... je veux quand même vous mettre au courant -- lorsqu'on s'éloigne il y a des coûts supplémentaires.

4343   Alors, si on parle de business pourquoi est-ce que j'irais tourner dans un loft à Chicoutimi à une fois trois quarts le prix quand je peux tourner dans le même loft dans la zone artiste.

4344   CONSEILLÈRE LAMARRE: Merci, monsieur Gailer, de vous êtes déplacé si loin, d'avoir été si patient toute la journée et d'avoir répondu à mes questions. C'est tout, monsieur le président.

4345   THE CHAIRPERSON: Commissioner Molnar?

4346   COMMISSIONER MOLNAR: Thank you. I have a couple of questions for Mr. May.

4347   First of all, I note that you are a PhD candidate in Communication and Culture, so you have been close and I think I heard that you have been following this hearing this week. Is that true?

4348   MR. MAY: Yes.

4349   COMMISSIONER MOLNAR: So, you're close to these issues?

4350   MR. MAY: Yes.

4351   COMMISSIONER MOLNAR: You understand the objectives of the LPIF as it was established?

4352   MR. MAY: Yes.

4353   COMMISSIONER MOLNAR: And I am going to start with your second proposal and that's the increase of the LPIF to support over-the-air television, which I believe when you initially put in your submission, that was really what you wanted to advocate when you were here and I am struggling with this frankly.

4354   You are one of the only who have proposed any sort of increase and I'm really struggling with the fairness of what you have proposed, where you would suggest that customers of BDU systems who should actually pay for those who don't choose to use the BDU systems, to get greater access for those who choose not to use the BDU system.

4355   So, how does that work? How is that fair to put a charge on to customers who choose to get their signals over a cable or other BDU system to pay for those who choose to get their signals and services over-the-air?

4356   MR. MAY: It's a good question and I think it's as fair as the original LPIF is, as intended. It is interesting that when the Commission decided to implement the LPAF that it was determined that broadcast or BDUS would be contributing to it.

4357   So, my proposal is that it should continue and in the short term I feel be a value to the country to have this digital transmitter bonus.

4358   But I feel it's as fair as the original Fund and how fair is the original Fund, that could be a good discussion.

4359   COMMISSIONER MOLNAR: But you are supportive of the original Fund, you've said it should be maintained.

4360   MR. MAY: Yes.

4361   COMMISSIONER MOLNAR: And you believe there is value and that's the other thing I thought was interesting. You're obviously a young innovative user of communications and technology and it was a brief conversation I had with CBC actually and that I worried that if we were to continue with subsidizing the creation of programming for conventional television for local programming on conventional television, we might stay for innovation or investments and the natural evolution of the broadcasting system in forms of, you know, platforms for local content. You don't have any of those concerns.

4362   Do you think the proper place for us to be focused is on conventional television?

4363   MR. MAY: Well, obviously, I have my own preferences. Does Canada have a unnatural broadcast system? Yes. There are many incentives and subsidies for a cultural and safety reasons in terms of mandates, you know, as specifics outlined in the Broadcasting Act.

4364   So, I think LPIF is part of that, you know, milieu of subsidies that Canadians feel is important or half historically and it tends here a question. I don't see a fund like LPIF and innovation as somehow competing against each other. I don't think that having an LPIF would necessarily stifle innovation.

4365   Yes, it could create a false sort of economy, I guess the topic again Halifax where I have lived for many years in the past, perhaps all of the LPIF Funds going to CBC in Halifax is creating an artificially beneficial broadcaster for a period.

4366   Does that mean other broadcasters aren't going to innovate? Does that mean CBC isn't go to innovate? I don't believe so. And I still think the end goes that Canadians in the end are benefiting from a fund like the LPIF.

4367   COMMISSIONER MOLNAR: Thank you. Those are my questions and thank you for coming here today.

4368   THE CHAIRPERSON: Any other questions from the panel? No? Thank you very much.

4369   Merci beaucoup.

4370   MR. MAY: Merci.

4371   THE SECRETARY: Thank you. We will reconvene tomorrow morning at 9:00 with TELUS.

--- Whereupon the hearing adjourned at 1758, to resume on Wednesday, April 18, 2012 at 0900

REPORTERS

Johanne Morin

Karen Paré

Jean Desaulniers

Monique Mahoney

Date modified:

2012-04-17