ARCHIVED - Transcript, Hearing January 27, 2016

Volume: 3
Location: Gatineau, Quebec
Date: January 27, 2016
© Copyright Reserved

Attendees and Location

Held at:

Outaouais Room
Conference Centre
140 Promenade du Portage
Gatineau, Québec

Attendees:

• Chairman: Jean-Pierre Blais
  
• Members: Candice Molnar, Yves Dupras, Stephen Simpson, Christopher MacDonald
  
• Legal Counsel: Shari Fisher
  
• Secretary: Jade Roy
  
• Hearing Managers: Guillaume Castonguay, Jean-Pierre Lefebvre
  

Transcript

Gatineau, Québec

--- Upon resuming on Wednesday, January 27, 2016 at 9:02 a.m.

3433 LE PRÉSIDENT: À l'ordre, s'il vous plait.

3434 Madame la secrétaire.

3435 LA SECRÉTAIRE: Merci. Nous commencerons la journée avec la présentation de Cogeco Cable. S’il vous plait vous présenter et présenter vos collègues. Vous avez 10 minutes.

PRESENTATION

3436 Mme DORVAL: Merci, Madame la secrétaire. Bonjour, Monsieur le président, madame et messieurs les membres du Conseil.

3437 Permettez-moi de vous présenter les membres de notre équipe. Je suis Natalie Dorval, Vice-présidente, Affaires réglementaires et droit d’auteur de Cogeco. À ma gauche, Johanne Hinse, Vice-présidente de -- pardon, Johanne Hinse, Vice-présidente, Marchés résidentiel CogecoTV et relations avec les communautés de Cogeco Connexion, et anciennement connu sous le nom de Cogeco Cable Canada. À sa gauche, Tim Caddigan, Directeur principal, Programmation et relations avec les communautés pour l’Ontario; et à sa gauche, Daniel Picard, Directeur principal, Programmation et relations avec les communautés pour le Québec. À ma droite, Yves Mayrand, Consultant.

3438 Nous vous remercions de l’occasion que vous nous donnez de comparaitre lors de cette audience publique cruciale pour l’avenir de la télévision locale et communautaire. Notre intervention écrite est au dossier, et nous comptons donc utiliser les 10 minutes qui nous sont allouées pour cette allocation afin de traiter de deux initiatives que vous avez mises de l’avant dans votre avis public de consultations supplémentaires publié pour fin de discussion le 12 janvier dernier.

3439 We are pleased to see that the Commission has decided to put forward for discussion an initiative that dovetails on a proposal that we made on the occasion of the previous review of community television policy, with a view to having terrestrial BDUs step up to the plate for local news and information in those communities where broadcasters have no physical presence to offer local television programming service.

3440 Over the last two weeks, Cogeco Connexion management and staff have spent considerable time and effort to develop a specific plan of action in line with your proposed Initiative B. in order to develop that plan, we have benefitted from our own experience in providing local television news and information programing on our community television service in North Bay, Ontario after CTV decided to shut down its local television station in that market several years ago.

3441 Johanne.

3442 Mme HINSE: Nous avons travaillé à l’intérieur des paramètres que vous avez énoncé dans votre avis supplémentaire du 12 janvier. Notre plan vise conséquemment à fournir des nouvelles et informations locales à plusieurs communautés additionnelles situées dans notre zone de desserre par câble, tant en Ontario qu’au Québec, et qui sont présentement dépourvues de tout service de nouvelles et d’informations locales télévisées, en utilisant les ressources financières provenant des revenus tirés de nos activités de radiodiffusion qui peuvent être dirigées vers le soutien à l’expression locale, et en présumant que vous accueillerez favorablement la demande que nous avons faite dans notre intervention écrite, de revenir à un plein 2 pour cent de ces revenus pour cette même fin.

3443 Pour ce qui est de l’utilisation de fonds disponibles, nous proposons également de rediriger notre contribution annuelle facultative attribuée à un fonds indépendant, et actuellement versé aux Fonds Cogeco de développement d’émissions, afin de rendre notre plan soutenable financièrement.

3444 Enfin, comme nous le mentionnons dans notre intervention écrite, nous présumons que le Conseil nous donnera la flexibilité de répartir tous ces fonds disponibles au sein de CogecoTV, considéré comme un groupe de propriétés, plutôt que sur une base de système par système.

3445 En résumé, notre plan selon l’initiative B, fournira une émission de nouvelles et d’informations locales télévisée cinq jours par semaine, en semaine, dans sept petits marchés en Ontario, y compris North Bay, et sept petits marchés au Québec.

3446 Notre plan prévoit l’ébauche -- l’embauche d’un journaliste professionnel supplémentaire, tant en Ontario qu’au Québec, afin de soutenir cette nouvelle programmation. D’autre part, notre plan présume que 30 pour cent de la programmation de CogecoTV continuera de se qualifier comme programmation d’accès, et que nous continuerons de financer au niveau actuel, les corporations de télévision communautaire autonome que nous supportons par l’entremise de CogecoTV.

3447 MR. CADDIGAN: Our plan has the following advantages: first, it will deliver additional and much needed local television news and information to small markets within our cable footprint, where the traditional OTA broadcast platform and model has demonstrably failed.

3448 Second, it will keep the money coming from our cable customers and earmarked for local expression, at work within the community sector, for the direct benefit of the communities we serve, and that are totally deprived of any local television news and information.

3449 Third, it will refocus, but continue to support access programming on CogecoTV, as contemplated in your January 12^th notice. Fourth, it will not take anything away from the broadcasters in the public and private sectors. And fifth, it will not take anything away from that part of the mandatory contribution coming from our cable customers that we must remit to the Canada Media Fund.

3450 We have attached our detailed plan to our oral presentation notes for your consideration. With your permission, we propose to make it part of the public record of this proceeding.

3451 The Commission must clearly understand that for Cogeco, our plan under Initiative B is incompatible with any other plan that the Commission may wish to consider under Initiative A, as described in your notice of January 12^th.

3452 M. PICARD: Nous nous opposons fermement à l’initiative A, car elle aurait pour effet de dépouiller tout le secteur communautaire, sans apporter d’économies en dépenses de capital ou d’exploitations prouvées, ou de solutions durables aux problèmes économiques et financiers des stations locales traditionnelles de télévision hertzienne.

3453 Les interventions soumises par une gamme d’intervenants, notamment UNIFOR, SMITS et Bell Media, le reconnaissent d’ailleurs. La mathématique ne fonctionne tout simplement pas. Dans le cas précis de Cogeco, affaiblir, voir abattre le secteur communautaire, affecterait de vraies personnes en chair et en os, ainsi que employés dévoués qui travaillent maintenant pour CogecoTV, et qui font un boulot remarquable pour soutenir toute la programmation communautaire, dont les émissions d’accès sur nos canaux communautaires.

3454 Quelle est la raison qui explique que l’initiative A ne puisse fonctionner et qu’elle soit vouée à l’échec? Ce sont les changements structurels fondamentaux qui affectent le système canadien de radiodiffusion à l’ère du numérique.

3455 Premièrement, le glissement des auditoires et des placements publicitaires de la radiodiffusion hertzienne traditionnelle vers les plateformes en ligne, vers les services payants et spécialisés, et les services par contournement.

3456 Deuxièmement, le glissement de l'auditoire de la programmation télévisée linéaire vers la programmation télévisée sur demande. Troisièmement, l’utilisation de plateformes multiples pour le visionnement partout, sans égard aux frontières géographiques traditionnelles des marchés de la télévision.

3457 Quatrièmement, un système de radiodiffusion à deux vitesses comportant un élément non-réglementé en croissance rapide, qui n’est pas obligé de contribuer financièrement à la production et à la diffusion d’émissions canadiennes, et un élément réglementé en décroissance qu’y est au contraire obligé de contribuer. Et cinquièmement, une intégration verticale massive au sein de l’industrie canadienne de la radiodiffusion.

3458 MS. DORVAL: As a result of these fundamental structural changes, which are graphically demonstrated in the tables and figures of your latest communication monitoring report, the revenue streams available respectively to the public, private and community sectors of the Canadian broadcasting system already are, and will likely be constrained further going forward. And will likely be increasingly funneled to the handful of vertically integrated entities that already dominate the system, and have an incentive to maximize profits by cutting back on local Canadian programming, particularly news and information. No amount of regulatory intervention can overcome or reverse these fundamental structural changes.

3459 In the circumstances, any attempt to simply force a reallocation of revenue streams between the three pillars of the Canadian broadcasting system through regulatory means, will only cause further concentration of available funding sources for Canadian programming in the hands of the four Canadian VI entities, and further reduce diversity of local programming sources, while continuing to deprive many small size markets from any local television service.

3460 Robbing Peter to pay Paul, particularly when both Peter and Paul and increasingly losing customers and money to Uncle Sam, is neither an effective nor a fair public policy option.

3461 Nor should the Commission decide that the survival of the community sector should be threatened so that a part of the private sector may survive in the short term.

3462 In addition to Initiative B put forward by the Commission for discussion at this public hearing, what else can be done to address further the supply side for local news and information within the regulated component of the Canadian broadcasting system?

3463 We submit that local news and information program production and exhibition must not only be allowed but also be encouraged to first shift freely from the traditional OTA local station broadcast platform to the other more cost-effective platforms, i.e. public and private specialty news and information services, VOD services, community television services and online platform.

3464 Second, be allowed to vary in terms of quantity, content, means of production and delivery in relation to the size and local characteristics and preferences of each local community served.

3465 And third, not be predicated on any direct or indirect cross-subsidization for the benefit of the VI entities and their respective broadcasting services.

3466 The VI entities have been allowed an unprecedented level of dominance in the Canadian broadcasting system based on a fundamental regulatory bargain, the benefits of economies of scale and scope, with added flexibility on required Canadian programming expenditures and exhibition requirements within their extensive portfolio of broadcasting properties, in return, for continued support of Canadian programming production and exhibition.

3467 This regulatory bargain clearly extended to local news and other local television programming.

3468 The latest communication monitoring report demonstrates that the VI entities who operate on all platforms, both regulated and unregulated, enjoy growing revenues and more than healthy profit margins overall. They must live up to their end of the regulatory bargain without resorting to new cross-subsidies from the other participants in the regulated Canadian broadcasting system who still provide added diversity and local relevance without the benefit of the same privileges and wealth that the VI entities already enjoy.

3469 Près de 1 000 intervenants ont déposé des interventions qui démontrent le besoin, l’importance et la pertinence de Cogeco TV, ainsi que la feuille de route exemplaire de Cogeco TV pour ce qui est d’assurer un service voué aux intérêts des communautés locales desservies par Cogeco, tant au Québec qu’en Ontario.

3470 Le Conseil devrait noter que Cogeco TV constitue un vecteur essentiel pour soutenir les activités de plus de 1 300 groupes communautaires pour lesquels il n’y a aucune alternative dans les secteurs publics et privés du système canadien de radiodiffusion.

3471 Merci de nous avoir entendus et il nous fera plaisir maintenant de répondre à vos questions.

3472 LE PRÉSIDENT: Merci à vous tous et bienvenue.

3473 Si je vois bien dans votre soumission écrite, Cogeco opère des systèmes pour à peu près 765 000 abonnés approximativement, c’est ça? Vous avez à peu près 765 000 abonnés?

3474 Mme HINSE: De base télé.

3475 LE PRÉSIDENT: À peu près, oui, c’est ça?

3476 Mme HINSE: Oui.

3477 LE PRÉSIDENT: Parmi ces abonnés, il y en a combien qui sont francophones?

3478 Mme HINSE: Je dirais une répartition d’à peu près 70 pourcent anglophone, 30 pourcent francophone.

3479 LE PRÉSIDENT: Donc le 30 pourcent, j’imagine, reçoivent leur communication de la part de Cogeco en français?

3480 Mme HINSE: Oui, la majorité. Certains qui nous…

3481 LE PRÉSIDENT: C’est combien, à peu près, de personnes, ça? Donc 30 pourcent à peu près au-delà de 250 000 abonnés?

3482 Mme HINSE: M’hm. En français, certaines communications peuvent être envoyées en anglais si on spécifie la langue du client.

3483 LE PRÉSIDENT: Si je ne m’abuse, Cogeco a déposé son intervention écrite en anglais.

3484 Est-ce que, Madame Dorval, vous vouliez juste pratiquer votre anglais?

3485 Mme DORVAL: Nous avons déposé notre intervention effectivement en anglais puisqu’on a des gens aussi dans notre équipe qui sont unilingue anglophones. Et je dois vous dire, toutefois, qu’on la traduite et qu’elle n’a pas été déposée au dossier public mais qu’elle a été distribuée à l’ensemble de nos équipes et des gens dans les communautés à fins de référence.

3486 LE PRÉSIDENT: Puisque vous l’aviez traduite, vous auriez pu la mettre au dossier public?

3487 Mme DORVAL: Ça nous ferait plaisir de la déposer au dossier public.

3488 LE PRÉSIDENT: Parce qu’en bout de ligne, c’est les abonnés qu’on dessert, n’est-ce pas?

3489 Mme DORVAL: Tout à fait.

3490 LE PRÉSIDENT: J’aimerais mieux comprendre, dans vos -- par rapport à vos canaux communautaires, au niveau de votre présence physique, donc dans un endroit donné où vous avez des canaux communautaires, vous avez des employés à temps plein. Est-ce que c’est correct? C’est juste?

3491 Mme HINSE: Oui, tout à fait. Dans chacun des endroits où nous avons une station, nous avons des employés à temps plein.

3492 LE PRÉSIDENT: Et ils sont souvent dans un lieu physique?

3493 Mme HINSE: Oui, tout à fait.

3494 LE PRÉSIDENT: Vous en avez combien, à peu près, d’employés qui sont voués à travailler dans le domaine du canal communautaire globalement pour desservir les 765 000 abonnés?

3495 MR. CADDIGAN: Approximately, without having that right in front of me, probably about 170 across the two provinces.

3496 THE CHAIRPERSON: And in terms of the distribution of those 170 employees, would you say it’s evenly distributed? Could you come up with a ratio of employees to number of subscribers, and but for plus or minus one, it would be evenly distributed across the systems?

3497 MR. CADDIGAN: If you’re asking me to do the ratio in my head at 9 o’clock, no, I can’t, but certainly, yes, we can provide that. I think in Ontario there’s between 80 and 90 and the remainder in Quebec.

3498 We are challenged, of course, in both provinces by a degree of geography, and in Quebec certainly we have major challenges with geography, so we have to staff based on the fact that we can’t have people driving two hours to produce programming.

3499 THE CHAIRPERSON: So would you say that in smaller centres you have more full-time employees in terms of ratios of number of subscribers to employees than you would have in the major centres?

3500 MR. CADDIGAN: Certainly that would be the case in some centres. I wouldn’t want to say on the record that that’s the case in every centre, but yes, that would be the case in some. It’s because of necessity. To try to accommodate the number of requests we get and to produce enough programming to be relevant, it’s necessary in some cases for that ratio to be a little higher in smaller communities.

3501 THE CHAIRPERSON: Is this what is at the basis of your request to be able to move -- to almost take a group approach?

3502 MS. DORVAL: Yes, actually, the group approach is to allow us more flexibility with regards to having a spending envelope where we could allocate funds in regards to the various needs of the markets that we serve.

3503 The Commission has moved in this direction for OTA, pay and specialty a few years ago to allow them more flexibility, and it’s really something that could be used and beneficial for the communities that we serve.

3504 LE PRÉSIDENT: Quelle serait votre réaction si le Conseil proposerait une certaine flexibilité mais que l’argent ne pourrait être déplacé que des grands centres vers les petits centres?

3505 MS. DORVAL: Well, in the proposal that we have submitted, obviously we operate in small centres, so it’s a bit difficult to relate to our own operations.

3506 THE CHAIRPERSON: You see, I want to know whether you’re wanting flexibility to move money from large centres to small centres, or the other way around?

3507 MR. CADDIGAN: So the definition of a large centre, for us, is much smaller than it is for the bulk of the industry, but certainly we’re not looking at taking resources out of a small system to move them to a larger system.

3508 Our experience in North Bay is that it requires -- for a similar sized system, it requires more resources, period. So we’ve actually moved resources into North Bay, which is a fairly small community compared to some of the ones that we operate.

3509 THE CHAIRPERSON: So building on that, if you wanted flexibility, inspired from the group approach, to move the deduction you’re otherwise allowed to apply, if we were to say, “Yes, that’s okay as long as the money goes from large centres to small centres,” would you be opposed to that?

3510 MS. DORVAL: We wouldn’t be opposed to that, but I would like, just for precision, to explain that we do not disserve any large centres.

3511 So when you look at the definition of the Commission for small markets, they are less than 300,000 subs. Most of our market are less than 100,000 subs. So it’s difficult to see, you know, the flexibility that we would be allowed to get in that sense.

3512 THE CHAIRPERSON: You see ---

3513 MS. DORVAL: I guess the definition would need to fit ---

3514 THE CHAIRPERSON: Right.

3515 MS. DORVAL: --- our reality as well.

3516 THE CHAIRPERSON: See, the risk I see is that a flexibility of groups means with the realities of competition that you will move your resources away from smaller centers to larger centers.

3517 MR. MAYRAND: If I may add to this, Mr. Chair. I think that the competitive reality of independent distributors such as Cogeco Cable pervade pretty well the whole cable footprint that they serve.

3518 So Cogeco has found ways, despite the competition, to very actively support small to very small communities within their footprint and in many cases above the call of duty.

3519 So I think the Commission has to note that there’s really no incentive really or a real opportunity for Cogeco to play some kind of game between large communities and small communities. The flexibility requested is really to allow actually for communities that are much smaller to get more resources without adding to the overall financial contribution that must be expended towards that end.

3520 THE CHAIRPERSON: Fair enough from Cogeco’s perspective, but when we do policies they’re applied to other players across the system and we have to be careful.

3521 Are you saying that others would not be in the position to want to favour movement of money from larger -- from smaller centers to larger centers?

3522 MR. MAYRAND: Obviously Cogeco cannot speak for other players. I think that what is becoming more and more apparent in these proceedings, certainly looking at the first few days of it and what’s on the public record, it seems quite apparent that, you know, the Commission is into a new paradigm in terms of not just local and community television policy but a number of other policy frameworks.

3523 You are now dealing with a system that involves a handful -- in fact, less than a handful of very large horizontally and integrated entities who actually control well over 80 percent of the overall activities and resources in the regulated sector without taking into account what they do on their unregulated side, which is fine, and I think the Commission cannot, in the circumstances, come up with a cookie cutter rule that will ensure that there is no gaming in all circumstances. It has to be looked group by group.

3524 And certainly, I gather then in the case of Cogeco Cable, there is absolutely no intention nor desire to do any gaming.

3525 Now, please, Commission, remember that Cogeco is not in Montreal, it is not in Toronto, it is not in Quebec City, it is not in Calgary, Edmonton, Winnipeg, Regina, Vancouver or any other of the major centers. So certainly there are some, I think, issues that the Commission has to look into in terms of ensuring that there is no gaming where groups are involved in these very large markets, which obviously are by a mile the most resourceful and the most affluent.

3526 THE CHAIRPERSON: And that’s why the Commission normally does exceptions to its general rules by condition of licence so there is no -- there is an opportunity to check that there is no gaming. Would you agree with that?

3527 MR. MAYRAND: Well, conditions of licence are one tool. However, I think the Commission should be mindful of the fact that when regulations are involved the tendency then is to have general rules and applying exceptions strictly by way of conditions of licence ---

3528 THE CHAIRPERSON: That’s what I’m talking about.

3529 MR. MAYRAND: --- can be complicated.

3530 THE CHAIRPERSON: Yes, if you think that the general applicable rules don’t fit your reality and you might want to move money around from certain centers to the others we could deal with that by condition of licence rather than creating a general rule that might be an open door for abuse.

3531 MR. MAYRAND: No matter what the means the Commission would look at, in terms of, you know, reflecting this fundamental reality that there are essentially four very large groups out there with their own dynamic and their own very large portfolio services, and others who are independents and that that should be dealt by specific conditions of licence, excluding the time effect of applying for conditions and getting them implemented, I think it’s certainly the Commission’s privilege to look at that.

3532 LE PRÉSIDENT: Je reviens maintenant aux 170 employés que vous me dites que vous avez. Ils sont à temps plein, j’imagine, largement?

3533 Mme HINSE: Il y a un mixte de temps plein et de temps partiel, mais majoritairement du temps plein.

3534 LE PRÉSIDENT: Syndiqués ou non?

3535 Mme HINSE: Québec, syndiqués; Ontario, non-syndiqués.

3536 LE PRÉSIDENT: Et puis la différence c’est pour des raisons historiques ou vous les traitez mieux au Québec ou en Ontario?

3537 Mme HINSE: Je dirais que c’est historique.

3538 LE PRÉSIDENT: Et est-ce que ces 170 employés sont parfois affectés à des activités autres que le canal communautaire parce que vous êtes actifs dans plusieurs autres domaines, la radio, la câblodistribution autre que le canal communautaire, la télécommunication?

3539 Mme HINSE: Non, les employés qui sont sous l’entité CogecoTV sont uniquement utilisés dans cette entité-là.

3540 LE PRÉSIDENT: Et on leur demande jamais de participer à des activités autres que le canal communautaire?

3541 Mme HINSE: Non.

3542 LE PRÉSIDENT: Mais vous ne pouvez pas m’affirmer que c’est la même approche que les autres câblodistributeurs? Vous n’avez pas de connaissance à ce niveau-là?

3543 Mme HINSE: Non.

3544 LE PRÉSIDENT: Qu’en est-il de certaines ressources partagées, tels les comptables, le côté réglementaire? Est-ce que vous faites une allocation des coûts de leurs salaires aux dépenses du canal communautaire?

3545 Mme DORVAL: Ce serait à vérifier, Monsieur le président. Si on peut s’engager à vous fournir l’information à une date ultérieure ou à la fin de cette audience même, à la fin de notre comparution?

3546 LE PRÉSIDENT: C’est normalement -- c’est pour le 5 février normalement qu’on vous demanderait de déposer.

3547 Je vais vous donner l’exemple. Les frais réglementaires de vos services ou même le contrat de M. Mayrand -- Me Mayrand -- je ne sais pas s’il est encore membre du barreau -- donc M. Mayrand alors -- est-ce qu’il y a une attribution de certaines dépenses vers le 2 pourcent, je crois dans votre cas, que vous avez le droit de déduire de votre contribution au contenu canadien?

3548 Mme DORVAL: Donc vous parlez bien des dépenses d’administration générale?

3549 LE PRÉSIDENT: Notamment, parce que vous m’avez dit des employés qui ne travaillaient ailleurs, mais je me pose la question dans le sens inverse; est-ce qu’il y a des gens qui sont normalement à l’extérieur du canal communautaire? Est-ce qu’il y a des dépenses associées à leurs activités qui sont attribuées sur le plan comptable à la comptabilité du canal communautaire?

3550 Mme DORVAL: Parfait. Alors pour m’assurer de vous fournir la bonne réponse, on va le déposer par écrit.

3551 Undertaking

3552 LE PRÉSIDENT: La politique du Conseil vous permet d’attribuer jusqu’à 40 pourcent -- je l’ai en anglais ici -- 40 percent of the local reflection contribution to indirect costs.

3553 And I guess it’s a variation on the question or the area I was just asking about is exactly what indirect costs are you attributing to the community channel?

3554 MS. DORVAL: Tim, please.

3555 MR. CADDIGAN: There are some indirect costs. I don’t think I can quote the exact number. We could provide that as well. But certainly there are direct costs.

3556 The difference between our model and some of our -- some of the earlier presenters is we have bricks and mortar in the buildings -- or in the communities that we’re in. We have the support of management and some degree of marketing and that sort of thing.

3557 THE CHAIRPERSON: So bricks and mortar -- give me a community, for instance, so we ---

3558 MR. CADDIGAN: Cobourg.

3559 THE CHAIRPERSON: Cobourg. So in Cobourg you’ve got a bricks and mortar facility that is used as a studio for the community channel?

3560 MR. CADDIGAN: Correct.

3561 THE CHAIRPERSON: And does that brick and mortar facility also go to house people that are involved in the cable activity, technicians or whatever?

3562 MR. CADDIGAN: No, it does not.

3563 THE CHAIRPERSON: Any of that brick and mortar used to support the telecommunication activities of Cogeco.

3564 MR. CADDIGAN: M’hm. Zero.

3565 THE CHAIRPERSON: Is that true in every brick and mortar facility you have?

3566 MR. CADDIGAN: No it is not.

3567 So some of them are along with other technical operations or other office locations, but we have distinct areas within those buildings that are set aside for studio operations and production staff.

3568 THE CHAIRPERSON: So give me an example where that is occurring, where there’s shared facilities?

3569 MR. CADDIGAN: Burlington.

3570 THE CHAIRPERSON: Burlington? So in Burlington you share the facilities between the community channel activity and others?

3571 So from an accounting perspective, how do you attribute the costs to those indirect costs for facilities and equipment that you’re allowed to up to 40 percent? What are the accounting rules that you use there?

3572 MR. CADDIGAN: And I think that’s the document that we’ll have to provide before the end of the hearing.

3573 THE CHAIRPERSON: To your knowledge is there an accounting manual that defines how those allocations are done?

3574 MR. CADDIGAN: There certainly are procedures and policies that our finance group uses, yes.

3575 THE CHAIRPERSON: Do you think they’re documented?

3576 MR. CADDIGAN: I don’t know the answer to that, but we can get back to you on that as well.

3577 THE CHAIRPERSON: Okay, so you’re undertaking to confirm whether or not you have a documented allocation manual for shared facilities?

3578 MR. CADDIGAN: Indeed.

3579 THE CHAIRPERSON: And if you do have a documented manual, do you undertake to provide us a copy?

3580 MS. DORVAL: Will do.

3581 THE CHAIRPERSON: Thank you.

3582 Undertaking

3583 THE CHAIRPERSON: That would cover things, for instance, if there was I don’t know, shared depreciation costs, that sort of thing; right?

3584 That you would then allocate between telecommunications, cable, general, writ large, other than community channel. That’s what we’re looking at.

3585 MS. DORVAL: Okay.

3586 THE CHAIRPERSON: How you attribute those costs.

3587 MS. DORVAL: Okay.

3588 THE CHAIRPERSON: In your written presentation, more particularly at page 18, there’s a comment there:

3589 “Cogeco submits that under the

current trend of decreasing BDU revenues, diverting the limited funding available to community television in order to support other sectors of the Canadian Broadcasting System should not be considered as consistent with the objectives of the statutory obligation.”

3590 I think you’re referring to section 3.1(b) of the Broadcasting Act; is that correct?

3591 MS. DORVAL: Excuse-me, Mr. Chair. So you were referring to paragraph ---?

3592 THE CHAIRPERSON: Eighteen (18), page 7, bottom of that paragraph.

3593 I see there an argument, I think, and I -- maybe I’m wrong, that you’re suggesting that perhaps we do not have the jurisdiction to do certain things.

3594 MR. MAYRAND: Yes, if I understand your question correctly, I think you’re referring really to the end part of paragraph 18.

3595 THE CHAIRPERSON: Yes, that’s what I quoted.

3596 MR. MAYRAND: And I think what we’re saying is first there’s a mathematical reality involved here.

3597 The trend, well documented, is that certainly for terrestrial cable BDU undertakings there is an attrition of basic subscribers and of discretionary services being taken by those subscribers.

3598 And I think there’s a pretty well wide consensus that this trend will endure for the foreseeable future.

3599 So this paragraph says that given that trend, we don’t see how, you know, one can -- on the one hand say well there’s a diminishing pool of revenues over all in hands of the percentage of revenues that goes to the community sector, from these terrestrial BDUs, and at the same time that the shrinking pool of money that results just from the pure mathematical operation of this trend, you know, should be now split two, or three ways, or four ways, or for more ends than was the case while the pie was expanding.

3600 So I think that’s really what we were saying there. Now ---

3601 THE CHAIRPERSON: Because I -- when I read it I see a discussion of the three elements of the broadcasting system, the community, private and public aspects.

3602 And I read a comment saying that, you know, diverting a limited funding available to community television in order to support other sectors, therefore other sectors would -- I think you’re equating those with the elements, would somehow be going against our legislative mandate?

3603 MR. MAYRAND: I think ---

3604 THE CHAIRPERSON: Am I over-reading what you’ve written?

3605 MR. MAYRAND: I think that -- I think that the -- over and above the actual pure dollar mathematics of the equation.

3606 There is a question that the Commission may want to consider and that is to what extent does the broadcasting -- Canadian broadcasting policy require the Commission to, you know, by regulatory intervention displace funds and actually prescribe cross-subsidization from one element to the other.

3607 THE CHAIRPERSON: Would you agree with me that the community element is composed of more than community television?

3608 MS. DORVAL: Do you mean having the component of access programming?

3609 THE CHAIRPERSON: No, community radio.

3610 In your -- in your paragraph here you’ve equated the community element of the broadcasting system --

3611 MS. DORVAL: Yes.

3612 THE CHAIRPERSON: -- with community television and I put it to you that the community element of the broadcasting system includes community radio in the licence sphere and probably some unlicensed activity that’s also broadcasting.

3613 One could strongly argue that YouTube, for instance, although unlicensed, may very well be seen as a community element to the extent that people can broadcast themselves.

3614 MR. MAYRAND: Well I would -- I would tend to agree with you, Mr. Chair, that the community element, which if I recall correctly but I’m getting old, is not precisely defined in the Act.

3615 That that is in reality somewhat broader than just the community television channels that are comprised in the system right now.

3616 However, I think it clearly does not include over the air local television stations from the private sector.

3617 Obviously, because the Act specifies that there are three distinct elements, the public, the private and the community element.

3618 Now with respect to the notion that perhaps YouTube is part of the community element of the broadcasting system, I’ll leave that to the Commission, but it sounds a little bit odd that, you know, platforms controlled outside of the Canadian space could be considered as part of the community element, but I’ll leave that to you.

3619 THE CHAIRPERSON: You see and maybe your difficulty of seeing that is based on -- and you’ve repeated a number of occasions in your oral representation of always referring to the unlicensed element of the broadcasting system as unregulated, as opposed to what it really is and that is unlicensed.

3620 MR. MAYRAND: Well I take your point, Mr. Chair, but in practice let’s look at the hard facts.

3621 You know, some elements or businesses operating in the broadcasting system space in Canada may be unregulated, because the Commission has decided that they are not having a meaningful impact on the system overall.

3622 THE CHAIRPERSON: Unlicensed. You -- you meant unlicensed, I believe.

3623 MR. MAYRAND: Yes, unlicensed. However, quite a number of these players or outlets or businesses, would not be licensable under the Act, should they ever be considered to have a material impact on the system overall --

3624 THE CHAIRPERSON: Why?

3625 MR. MAYRAND: -- and require a licence.

3626 THE CHAIRPERSON: Why would that be?

3627 MR. MAYRAND: Because they don’t meet Canadian controller requirements.

3628 THE CHAIRPERSON: And they -- that -- the Canadian control requirement doesn’t flow from the Act, it flows from the policy direction of the ownership direction.

3629 MR. MAYRAND: Yes, that is correct, but pursuant to, as I understand a specific policy objective in the Canadian broadcasting policy in the broadcasting manual.

3630 THE CHAIRPERSON: That says the system as a whole must be Canadian.

3631 MR. MAYRAND: Yes, yes.

3632 THE CHAIRPERSON: Not individual elements of it. In fact that’s why the Commission has created exemption undertakings that don’t have to meet the ownership requirements well before the media exemption order.

3633 MR. MAYRAND: Mr. Chairman I totally understand the architecture.

3634 THE CHAIRPERSON: And in fact there’s a Federal Court of Appeal -- Federal Court Trial Division that actually says that that particular provision relates to the system and not to the individual elements.

3635 MR. MAYRAND: Point well taken. I think what we’re saying, though, is we all know, despite this overall architecture of dealing with licensing, licensing exemption, and whether the system overall is controlled or not by Canadians that, in fact, there are a lot of people out there subscribing month after month to services for a fee and -- that are not required because the way the architecture works to contribute anything specifically to the support of Canadian programming production, much less local news programming.

3636 THE CHAIRPERSON: But to close on this issue, I’m -- should not see in paragraph 18 of your written submission the starts of an argument that we do not have jurisdiction.

3637 MR. MAYRAND: As I mentioned earlier Mr. Chair, I certainly don’t want to Commission to feel that we’re getting ready for a challenge; I don’t think that Cogeco has ever intended to suggest that.

3638 All that we’re saying is that there is a trend, backed by statistics, showing that the revenue pool overall of the broadcasting system that is still regulated is diminishing. Certainly in the case of ---

3639 THE CHAIRPERSON: I would say licence but go ahead ---

3640 MR. MAYRAND: Licensed -- certainly licensed players within the system which happens to be -- to include Cogeco Cable.

3641 THE CHAIRPERSON: You may have seen the conversation we had with folks at Eastlink, and I just want to make sure that we’re on the same page with respect to the 2 percent; that it is not a cap, it is capped in terms of how much you can get a deduction against the amount of money you could otherwise -- you are otherwise obligated to contribute to Canadian programming. Do you agree with that?

3642 MS. DORVAL: We fully understand that, yes.

3643 THE CHAIRPERSON: So again at paragraph 26 you may have overstated that the amount is a cap?

3644 MS. DORVAL: Point taken.

3645 THE CHAIRPERSON: I don’t want to pick on people but, frankly, we’re being a bit loose with some of our definitions here and frankly if people come to our hearings and say it’s -- you know, local programming on the community channel is the greatest thing but then they turn around and says but we’re only allowed to attribute 2 percent or 1.5, depending on their case, to deduct it against it, I think we have to make the point that it is not a cap; that if you think it’s such a great business opportunity you could do more.

3646 MR. MAYRAND: Well, we’re getting, I think, into a whole discussion that you had on Monday with the Eastlink people, and, you know, we readily admit that you are -- you would welcome with open hands that distributors, including independent distributors that are not integrated in to the programming side of things, for over-the-air specialty pay, et cetera, that they would be welcome to devote more money on their own from their own pocket to support activities such as community television activities even though they are still being required to contribute the same amount and the percentage, overall a 5 percent of all their broadcasting revenues to other ends.

3647 Now, historically let’s not forget that the community channel was created, if I remember well, around 1974 and that the cable operators -- it was a voluntary initiative which progressively got regulated, and more and more regulated and in a more granular way. I’m not saying that’s bad, but I’m saying that essentially the initiative came from the terrestrial BDUs and, you know, the funds that were budgeted for that end were progressively extended to meet other public policy needs.

3648 Now, the question is, I think, very clearly for you, Commission, to what extent is realistic to push the envelope and say to particularly terrestrial BDU operators such as Cogeco Connection now, you must still contribute the whole 5 percent for any other number of valuable public policy objectives, and then you are perfectly free and in fact we would love you invest more on top of that 5 percent of your overall revenues to support, essentially, some of the same things that you’re doing right now. And, by the way, if you do so we’re also going to apply certain requirements in terms of access programming, budget allocation, et cetera.

3649 I mean if the Commission’s perspective is really to in fact implement some kind of straight cross-subsidy more or less, for 5 percent of the overall revenues of BDUs derived from broadcasting activities, you know, what is the logic of continuing to regulate that sector anymore?

3650 THE CHAIRPERSON: My point was it’s not a cap.

3651 MR. MAYRAND: Point well taken, Mr. Chair.

3652 LE PRÉSIDENT: Dans votre présentation aujourd’hui et je crois ailleurs, vous parlez du modèle de la télévision conventionnelle qui -- puis là c’est en anglais -- “has demonstrably failed”.

3653 À votre avis, est-ce que c’est un problème d’un manque d’auditoire ou un problème d’une difficulté de convertir des auditoires qui sont peut-être encore au rendez-vous mais qui ne semblent pas attirer les annonceurs?

3654 Bell nous a dit plus tôt cette semaine que leurs bulletins de nouvelles sont encore extrêmement populaires, sauf que les annonceurs ont tendance à déplacer -- souvent des annonceurs ou des agences avec des -- une présence internationale, ont tendance à déplacer leur budget de publicité pour la programmation de divertissement ou des nouvelles sur d’autres plateformes.

3655 Mme DORVAL: Écoutez, tout comme vous, on a entendu les interventions de nos prédécesseurs et, comme vous savez, Cogeco n’est pas dans la nouvelle locale à l’exception de la région de North Bay et on ne tire pas de revenus de la publicité locale commerciale.

3656 Donc basé sur notre compréhension du marché, notre expérience, ce qu’on comprend c’est que c’est plutôt -- c’est pas une question d’auditoire mais c’est plutôt une question d’être capable d’attirer les…

3657 LE PRÉSIDENT: Les annonceurs.

3658 Mme DORVAL: …les annonceurs.

3659 LE PRÉSIDENT: Je suis intéressé à en savoir plus, par exemple -- here I’ll go to English because I think that’ll be easier for you -- your experience in North Bay and how you stepped in to fill what you saw was a gap. How did you come to that decision?

3660 MR. CADDIGAN: Well, I think when CTV exited the community there’s always -- whenever a OTA leaves a community or consolidates its operations to a regional centre I think the community feels that, especially a smaller community. I think communities have a sense of ownership over their local broadcasting stations, as they do with their daily newspapers.

3661 So we saw that as, you know, something we could put back in to that community. We hired some staff, one individual in particular from the CTV news desk to come over to our operation. The Commission has talked about its desire for professional news; we take that very seriously as well. So we brought in somebody who is more of a journalist than a broadcaster, and that’s how the inspiration started.

3662 THE CHAIRPERSON: Would you be looking for -- and currently I guess the economic model that supports that initiative is obviously the amount you're allowed to otherwise deduct from the 5 percent, are you looking for the potential of advertising to also support that model?

3663 MR. CADDIGAN: We’ve done a very preliminary analysis, we really only had a couple of weeks to address that. And so in our preliminary analysis, we don’t think that there's enough advertising revenue to support the requirements of the news operation in some of the small communities. Again, we’re talking fairly small ---

3664 THE CHAIRPERSON: M'hm.

3665 MR. CADDIGAN: --- cities here in both Ontario and Quebec. So I think it -- in my opinion, I think it’s probably time to look at the policies that are around sponsorship on the community channels, certainly they are probably due to be reviewed, given the restrictions that they have. But I think in the end, they might augment budgets, but I don’t think they're going to save or be the inspiration to get us through financing these operations.

3666 THE CHAIRPERSON: And would the loosening of the rules around sponsorship, in your view, have a material impact on the advertising marketplace?

3667 MR. CADDIGAN: I don’t think so, no.

3668 THE CHAIRPERSON: And you speak of that as a group that also has interests in radio for instance? MS. DORVAL: Well, these are two different entities, but if we can -- if I may circle back to the funding in Schedule A that we have attached to our presentation, we provide the mechanism for funding our proposal.

3669 THE CHAIRPERSON: M'hm.

3670 MS. DORVAL: And as Tim said, commercial local advertising is not part of this for the reason he has expressed. But what we were really asking is to reinstate the full 2 percent of terrestrial BDU revenues, and allocate -- reallocate the .6 percent that is currently going to independent funds, and that we currently provide to the Cogeco fund to be able to support the business model that we are proposing today. As part of that ---

3671 THE CHAIRPERSON: I understand what your proposal is, but I’m trying to get -- develop the record on the notion of, as you raised, loosening of the sponsorship model. And I want to get a sense of whether you believe that -- and others may have different views -- that that would not -- or would it have an impact on the advertising market?

3672 MS. DORVAL: So we don’t think it would have a large impact on the advertising market.

3673 THE CHAIRPERSON: Other than anecdotal evidence, which is still valid, but I was wondering if you had, for the North Bay experience, a little bit more solid information on how you're reaching the viewership, how popular?

3674 MR. CADDIGAN: Well, clearly with the budget that we have, we don’t have numeris or BBM, but we do conduct a study every year in our markets through Environics Research, which is a very reputable firm. They are -- they were in the market in January, so we’ve asked for the results of just North Bay news, the rest of our results won't be out until sometime in February, so these are hot off the press.

3675 The question was asked, “Have you watched Cogeco North Bay news in the past...” -- and there's a period of time, I believe it’s two weeks. The response was that 78 percent of the respondents watched it; 22 percent did not. And from a satisfaction point of view, 34 percent indicated they were very satisfied with the product; 62 percent indicated they were satisfied; and only 4 percent indicated they were not satisfied.

3676 THE CHAIRPERSON: Do you track viewing through your set-top box, do you have that capability?

3677 MS. DORVAL: We don’t, Mr. Chair, and as you know, there is ---

3678 THE CHAIRPERSON: So you don’t have the capability, therefore that’s why you don’t do it?

3679 MS. DORVAL: That’s exactly right.

3680 THE CHAIRPERSON: Okay. Is that true across your systems? Would there be -- some of your systems where you could have the ability through the set-top box to have viewership information?

3681 MS. DORVAL: We are currently testing that through a test with numeris and it's an industry-wide test, so I guess that within three months we’ll be able to report back to you on this.

3682 THE CHAIRPERSON: But currently, none -- so you're just testing it, so it’s not -- you wouldn’t describe that as reliable, even if it's a small test; is that correct?

3683 MS. DORVAL: That I -- can you repeat that, please?

3684 THE CHAIRPERSON: If I were to ask you what does the test indicate in terms of set-top box ---

3685 MS. DORVAL: It will be ---

3686 THE CHAIRPERSON: --- data currently?

3687 MS. DORVAL: It will be able to allow us to better understand what kind of data can be retrieved from these set-top box, and whether they can be joined with current numeris data to see ---

3688 THE CHAIRPERSON: Okay.

3689 MS. DORVAL: --- to provide a better measurement -- measurement system.

3690 THE CHAIRPERSON: But there's no measurements going on currently in your system for community channel viewing?

3691 MS. DORVAL: There are not.

3692 THE CHAIRPERSON: Okay. So hence, relying on public opinion surveys like Environics, I believe you mentioned?

3693 MR. CADDIGAN: Environics in Toronto and we have a separate company in Quebec.

3694 M. PICARD: It’s Cible recherche au Québec.

3695 LE PRÉSIDENT: Merci. Vous avez fait valoir dans vos présentations que les compagnies intégrées verticalement ont probablement pas besoin d’aide. Que une des raisons pour laquelle elles sont venues et ont obtenu certaines permissions pour être des sociétés plus importantes dans le panorama audiovisuel canadien, était basée en partie sur des argumentaires disant qu’ils vont continuer à faire des -- du service public. Peut-être je résume un peu trop votre pensée, mais c'est un peu votre argument. Est-ce que j’ai raison?

3696 Mme DORVAL: Oui, certainement. Quand on dit qu’on a pas besoin d’aide, on se ferme pas les yeux pour se dire qu’elles ne vivent aucun problème avec le mix d’actifs qu’elles gèrent et qu’elles ont.

3697 Le point étant plutôt que la consolidation était censée les aider à utiliser leur portfolio de services spécialisés payants et les revenus qui sont souvent plus intéressants de ce côté-là, pour aider leur actifs qu’y étaient moins performants.

3698 Or, on peut voir que quand on regarde la demande de Bell par exemple, c'est pas -- c'est pas -- leur proposition est pas du tout de regarder pour réallouer les sommes et les revenus qu’ils ont au sein même de leur portfolio pour supporter des actifs qui performent moins.

3699 Donc c'est dans ce sens-là que -- on est pas en train de se dire qu’y a aucun -- qu’elles ne vivent aucun problème, mais on dit que la solution est certainement pas de venir demander une réallocation de fonds en provenance de services indépendants qu’y ont pas les mêmes avantages, pour les envoyer vers des services intégrés.

3700 LE PRÉSIDENT: Et à votre avis -- puis vous n’avez -- vous donnez l’exemple là d’une couple de marchés où vous en avez fait encore plus en terme de fourniture locale, vous nous dites en ce qu’y a trait aux câblodistributeurs non-intégrés verticalement, tout va très bien, Madame la marquise, ne touchez pas ce que nous faisons, et puis même on est prêt à en faire un peu plus si vous nous donnez de la flexibilité.

3701 If that’s the case, what would your reaction be if our going forward policy framework was based on a firm distinction between VIs and non-VIs? In other words, perhaps lessing -- letting those like yourself, and I guess that goes with Eastlink was saying earlier this week, to continue more or less under the current model, but perhaps focusing our attention on the VIs who, by the way also are the ones that seem to own to OTAs?

3702 MS. DORVAL: No, not only would that be welcome, I really do think it’s a necessity. There is such a big difference now between the ownership groups that are vertically integrated and those that are independent, that they don’t live the same reality.

3703 And as for our proposal, I would just like to circle back and say that we’re not saying everything is fine, we’re not proposing to do anything. Actually, I think we have before you a very interesting proposal where we would engage in the provision of news and local programming. So -- but with regards to looking at both -- different types of ownership groups distinctly, I think that’s a necessity.

3704 MR. CADDIGAN: Mr. Chair, if I may just add to Natalie’s comment, the difference in reality in ownership groups is one thing, but the other thing is the difference in reality of community served. And the communities that are served by Cogeco are distinctively different than those in those large metropolitan areas, as Mr. Mayrand mentioned earlier in the presentation. So I think we need to be aware of the fact that what we’re servicing in Quebec and Ontario, and the size of those communities, the reality is very different.

3705 THE CHAIRPERSON: If the Commission were to come up with a policy model that would be fundamentally different for different realities, should it be based on a distinction between VIs and non-VIs, or small and large communities, or do they end up being the same?

3706 MR. MAYRAND: I was going to say, Mr. Chair, that the two are, you know, I think inextricably intertwined, because -- of course essentially less than a handful of VIs control essentially well over four-fifths of the overall system and resources that are within the system.

3707 And it so happens that most of that -- I don’t have the exact ratio and I don’t think it’s available in your publicly disclosed stats, but most of that clearly comes from the large metropolitan centres which are all pretty well dominated by the same groups.

3708 THE CHAIRPERSON: Could you envisage a model where Initiative B, for instance, would be the one applied to non-VIs and A to VIs?

3709 MR. MAYRAND: As I think we hinted in our oral presentation this morning, I think Cogeco Connection is very much aware of the fact that the proposal that you have in front of you and more detailed in the appendix to our oral presentation is really specific to Cogeco Cable, which is a non-integrated player.

3710 Now, whether other non-integrated players would wish to develop a similar model, somehow be inspired by our initiative, remains to be seen.

3711 However, I think that the reason why Cogeco Connection can come up with this proposal and thinks that it is duty bound to do so is that in order to respond to needs within the communities that it serves, this is the way to go.

3712 And it is not the way to go, we think, for VI groups.

3713 THE CHAIRPERSON: And I understand you’re taking the position based on your vision and your realities. So what do we do for VI groups, before I turn it to my other colleagues?

3714 MS. DORVAL: I think that your proposal is something that we could support.

3715 THE CHAIRPERSON: That ---

3716 MS. DORVAL: That Initiative B for non-VIs and Initiative A for VIs.

3717 THE CHAIRPERSON: And your view is that that would be sufficient for VIs?

3718 MR. MAYRAND: We think that certainly looking at what we can see by way of publicly available data, the VIs do have the ample resources to allocate money towards Canadian programming on all platforms and certainly allocate money to local news.

3719 Now, whether this should always be on a defined bucket for over-the-air television given the structural changes that we have heard about and which are very real -- the shifting of advertising dollars, you know, is a matter certainly for the Commission to consider, but the pool of resources is there. And I would submit to you that it would seem intuitively counterproductive to set up, you know, with all the complications that are involved and all the public policy issues involved in having a government-initiated support fund dedicated to the production of news programming.

3720 Why go into all these complexities and set up yet another fund when the pool of money is right there within the VIs’ grasp and within their control? There’s no need to create a disintermediation there. I think you have to just look at the groups within themselves.

3721 LE PRÉSIDENT: Je vous inviterais, dans les prochaines phases, de ne pas seulement commenter sur ce qui est bon pour vous. Ça nous aiderait à mieux comprendre ce qui se passe pour les autres parce que tout le monde vient à nos audiences en défendant leur position, qui est correcte, mais qui semble manquer l’opportunité de commenter sur les propositions des autres.

3722 Mme DORVAL: Monsieur le président, évidemment la proposition qu’on a faite est une proposition qui s’exporterait très bien à tous les EDR terrestres indépendantes au Canada.

3723 LE PRÉSIDENT: Je comprends. Je comprends, oui.

3724 Mme DORVAL: Donc en ce sens-là, c’est pas un modèle qui est spécifique à Cogeco mais franchement un modèle qui pourrait s’exporter auprès des autres qui sont dans la même situation de propriété que nous.

3725 LE PRÉSIDENT: Merci.

3726 Je vais voir si mes collègues ont des questions.

3727 Conseiller Dupras?

3728 COMMISSAIRE DUPRAS: Bonjour. Bon matin.

3729 Pour ce qui est de la programmation d’accès, vous demandez à ce que ce soit réduit à 30 pourcent.

3730 Pourquoi vous avez choisi la programmation d’accès comme programmation retranchée?

3731 Mme DORVAL: La raison en est que cette demande-là n’était pas dans notre proposition initiale. Elle est liée avec notre proposition révisée qu’on vous présente aujourd’hui et dû au fait qu’on veut s’engager plus avant dans l’approvisionnement de nouvelles locales et d’informations locales et que la plupart de cette programmation-là devrait être produite ou serait produite par les employés et les journalistes professionnels de Cogeco.

3732 COMMISSAIRE DUPRAS: Alors on remplacerait peut-être quoi, comme une quinzaine d’heures de programmation d’accès par deux heures et demi de nouvelles par semaine?

3733 Mme DORVAL: Alors notre proposition ne comprend pas deux heures et demi mais bien 30 minutes de nouvelles, cinq jours semaine. En fait, je dis nouvelles, mais dans nouvelles je dis nouvelles, informations, tout ce qui est dans Catégorie 1, 2(a) et 3.

3734 COMMISSAIRE DUPRAS: Je veux dire, 30 minutes c’est quoi, 150 minutes par semaine?

3735 MS. DORVAL: Tim, do you want to ---

3736 MR. CADDIGAN: En anglais.

3737 Of course, the news, that’s first run, but the news is also repeated through the day based on when viewers want to see it. So our concern -- to be clear, we’re not suggesting doing less access; it’s the ratio that’s the issue.

3738 COMMISSAIRE DUPRAS: Et hormis la programmation de nouvelles et informations, avec la flexibilité que vous demandez, est-ce qu’il est de votre intention de faire autres choses que des nouvelles et de l’information? Y a-t’il une programmation autre que vous voudriez faire avec -- pour les stations où plus de ressources sont nécessaires?

3739 Mme DORVAL: En fait, la programmation qu’on présente déjà ne serait pas affectée principalement, mais ce qu’on demande c’est d’avoir la chance de rentrer dans l’approvisionnement de nouvelles et d’informations locales.

3740 Johanne, tu peux peut-être compléter?

3741 Mme HINSE: En fait, notre contenu actuel est vraiment bien réparti entre l’accès et le non-accès et notre volonté c’est de continuer à donner de la programmation, de permettre aux gens du milieu de venir travailler avec Cogeco, d’apprendre et de contribuer à leur communauté.

3742 Alors notre but ce n’est pas de réduire ça. C’est pas de prendre un focus ailleurs. C’est vraiment de maintenir tout et d’ajouter au-dessus les nouvelles et l’information locale qu’on veut faire.

3743 COMMISSAIRE DUPRAS: Une station typique de petits marchés, êtes-vous capables de me donner une idée de ce que la grille-horaire a l’air durant une journée?

3744 Mme HINSE: En fait, c’est un mélange de programmation d’accès et de non-accès.

3745 COMMISSAIRE DUPRAS: À l’écran ça apparait comment? Il y a de l’alphanumérique?

3746 Mme HINSE: Oui, il y a de l’alphanumérique et…

3747 COMMISSAIRE DUPRAS: Ça prend quel pourcentage de la grille ça?

3748 M. PICARD: En pourcentage, je ne l’ai pas calculé, mais disons qu’on a quatre grands blocs qui seraient d’environ quatre heures le matin, quatre heures le midi, quatre heures le soir de programmation régulière. Donc entre ça on pourrait insérer le babillard, qu’on appelle dans notre jargon.

3749 COMMISSAIRE DUPRAS: Et là avec les changements que vous proposez, comment est-ce que la grille va être affectée?

3750 M. PICARD: Elle va être bonifiée d’un autre 30 minutes par jour.

3751 Mme HINSE: En fait, c’est sûr que la…

3752 COMMISSAIRE DUPRAS: Donc il n’y aura pas de programmation existante qui va disparaître pour faire place aux nouvelles?

3753 M. PICARD: Non.

3754 Mme HINSE: Non. En fait, on va réorganiser l’horaire parce qu’on veut que les nouvelles arrivent à un temps où les gens sont là pour l’écouter, donc assurément entre 5h30 et 6h00, puis il y a une répétition dans la journée. Mais c’est clair qu’on ne veut pas enlever des programmations existantes.

3755 M. PICARD: C’est certain que la grille bouge dans le temps et avec les saisons.

3756 COMMISSAIRE DUPRAS: Est-ce qu’on peut avoir une idée de qu’est-ce que ça coûte une programmation d’émission -- c’est-à-dire la production d’une émission non-locale versus une émission d’accès? Est-ce que vous êtes capables de nous donner un coup moyen?

3757 M. PICARD: Comme vous le savez, en fait, les coûts sont très variables. Alors d’une émission à l’autre, c’est certain que dépendant de la nature de l’émission elle-même, les coûts vont varier. J’ai pas d’exemple à vous donner, mais si on peut se permettre de vous fournir une information supplémentaire, il nous fera plaisir de le faire sur peut-être une émission spécifique.

3758 CONSEILLER DUPRAS: En général, est-ce qu’une émission non-locale qui est produite par l’EDR ou qui est achetée par l’EDR est plus couteuse qu’une émission d’accès?

3759 M. PICARD: En fait, j’ai pas -- je pourrais vous fournir cette information-là, mais je pense que l’émission d’accès est normalement une émission qui devrait nous coûter moins cher.

3760 MR. CADDIGAN: If I might, Commissioner, just so I can be clear, are you suggesting that we’re doing non-local programs? Because that is our mission to do local programs, so we can’t ---

3761 COMMISSIONER DUPRAS: No, no, I mean, it’s -- well, there’s a 40 percent that it would need to be community ---

3762 MR. CADDIGAN: Correct, but the other remaining piece is still community programming.

3763 COMMISSIONER DUPRAS: No, I understand.

3764 MR. CADDIGAN: It’s still produced ---

3765 COMMISSIONER DUPRAS: But I’m talking about the cost of a non-local versus a community access program.

3766 MR. CADDIGAN: Okay. So access versus licensee. Okay, I just needed to be clear on that.

3767 COMMISSIONER DUPRAS: Okay. Well that’s it for me. Thank you.

3768 THE CHAIRPERSON: Commissioner Molnar?

3769 COMMISSIONER MOLNAR: Thank you.

3770 Could you tell me how many markets you serve in total? You said you have 765 subs. You don’t have to be exact.

3771 Mme HINSE: Si on parle en termes de zones, on dessert 32 zones totales. We are serving 32 zones in our markets, Ontario and Quebec, and the total of licence exempt and BDUs without -- or with the Cogeco TV is around 135.

3772 COMMISSIONER MOLNAR: So is 32 zones in Quebec is that 32 small markets?

3773 MS. HINSE: No, it’s 32 zones in Quebec and Ontario that serves around 80 communities.

3774 COMMISSIONER MOLNAR: So you serve 80 communities. You propose here to provide local news and information in 14 -- to 14 of those communities.

3775 Just for clarity, where you have requested access programming be lowered from a level of 50 percent to a level of 30 percent, is that in the 14 communities or is that in the 80 communities?

3776 MS. DORVAL: Many of these communities -- well, many -- some of them are exempt, and where they’re exempt the threshold is already at 30 percent of access programming.

3777 COMMISSIONER MOLNAR: Okay. So how many non-exempt systems do you have or markets are you serving?

3778 MS. DORVAL: You mean in our proposal or you mean at large within the BDUs serving Cogeco?

3779 Those that are ---

3780 COMMISSIONER MOLNAR: Well, could ---

3781 MS. DORVAL: --- affected by our proposal or at large?

3782 COMMISSIONER MOLNAR: Sure. Could you tell me both? I’d like to understand ---

3783 MS. DORVAL: Okay.

3784 COMMISSIONER MOLNAR: --- who is in and who is out.

3785 MS. DORVAL: Okay. So in our proposal in Schedule A in Quebec we would serve two licenced communities and five exempt, and in Ontario we would serve with additional news and local programming four licence and three exempt.

3786 COMMISSIONER MOLNAR: And I -- just so I’m understanding well, you said you serve 80 communities.

3787 MS. DORVAL: Yes, but we’re not proposing to provide local news and information in the 80 communities.

3788 COMMISSIONER MOLNAR: Right. Are you ---

3789 MS. DORVAL: We are only proposing to do so in the markets that we have described in Schedule A.

3790 COMMISSIONER MOLNAR: Right. And of those 80 communities, some are exempt, some are subject to licence, and where they’re subject to licence today they have a requirement of 50 percent access programming and you’re proposing to reduce it.

3791 So are you ---

3792 MS. DORVAL: That’s correct.

3793 COMMISSIONER MOLNAR: --- proposing to reduce the 50 percent access programming across all your licence systems?

3794 I’m trying to understand your proposal.

3795 MR. CADDIGAN: No, I would suggest where we’re not going to be doing news in a licensed area the requirement for access would remain the same.

3796 COMMISSIONER MOLNAR: Okay. You may be aware that one of your subscribers is coming forward this afternoon who lives in Oakville. So I was looking at your proposal and saying well what are you proposing and how does this relate to a community such as Oakville.

3797 MR. CADDIGAN: So the area of Oakville falls into the region of Halton and we would be doing a newscast in that area. It’s Burloak. It’s the second on the Ontario list.

3798 COMMISSIONER MOLNAR: Okay.

3799 MS. HINSE: Burloak include Burlington and Oakville.

3800 COMMISSIONER MOLNAR: Oh, Burloak is Burlington/Oakville. So that’s not a particularly small community then.

3801 MR. CADDINGTON: But it’s a community. It’s my community. And it’s a community without a local OTA. It’s a community without a daily newspaper. It’s a huge community, Burlington and Oakville beside each other, because we do have some mixed identity there, without any radio stations. So there’s definitely a need.

3802 When I moved to that area very recently I’d ask my neighbours what their local newspaper was, they’d say the National Post. I think there’s a problem with that when you’re talking local.

3803 COMMISSIONER MOLNAR: M’hm. Okay. Thank you.

3804 I think my other question when you’re talking your community -- we’ll use that as the example -- who else is operating?

3805 So what other -- obviously there’s satellite, but you have terrestrial distribution competitors in that marketplace? You have options?

3806 MR. CADDINGTON: Not really. There might be very small players. But no, it’s the satellite that are the -- and Bell Fibe.

3807 COMMISSIONER MOLNAR: Oh, and Bell Fibe. So you have ---

3808 MR. CADDINTON: Yes, that’s correct.

3809 COMMISSIONER MOLNAR: --- terrestrial competitors.

3810 So your proposal would create a local news program available to your -- to people within the Cogeco system. Is there any way that other members of the community who are on different systems would be able to access or see that programming?

3811 MS. HINSE: Like we presented in our document, we are looking to upgrade or enhance the multi-platform offering to be able to offer the TV, the local news and information to customers that are the people that are not customers with Cogeco. For sure it’s an objective that we have to extend our multi-platform offer to be able to serve or offer it to many customers.

3812 COMMISSIONER MOLNAR: Right. Do you already have your multi-platform vision and this would just be extended?

3813 MS. HINSE: Currently we have our Cogeco TV website and we are in some social media and we are looking and we plan to enhance the offer that we have currently.

3814 COMMISSIONER MOLNAR: Okay. Thank you. Those are my questions.

3815 THE CHAIRPERSON: Thank you.

3816 Commissioner Simpson?

3817 COMMISSIONER SIMPSON: Morning.

3818 May I circle back on a technology line of questions? Earlier you mentioned to the Chair that your data gathering capabilities regarding viewership habits is something that you’re experimenting with right now. But does your existing system have the ability to discriminate content to zones as it comes out from you?

3819 MS. DORVAL: Honestly, I would like -- I would have to check that to make sure I give you the right answers.

3820 COMMISSIONER SIMPSON: Why I’m ---

3821 MS. DORVAL: I would think that some of the decoders now have the ability but that older decoders in the park of decoders wouldn’t be able to provide that.

3822 COMMISSIONER SIMPSON: Why I’m asking you in particular is that unlike the VI’s who have awoken to the opportunities of understanding more about viewer habits because they’re in the television game, you know, with a variety of platforms, both television distribution and others, you know, what seems to be eating the lunch of a lot of the cable systems is the internet’s ability to discriminate to an IP address and if I’m looking for a new car I start getting Toyota ads in my Google searches.

3823 And as I look at what Pelmorex has been trying to deal with in terms of emergency alerting, they’re able to discriminate by zone for emergency purposes. And I’m thinking about the smaller communities where there’s no economic rationale to be able to deliver local content. Even falling back on alpha numeric content would be of value. And I’m trying to understand whether the cable systems as they’re currently configured have that capability.

3824 MS. DORVAL: So we can look into it and get back to you in writing to provide you that information if ---

3825 COMMISSIONER SIMPSON: Yes, I’d be very interested. Thanks.

3826 MS. DORVAL: Okay, we’ll do that.

3827 Undertaking

3828 LE PRÉSIDENT: Ça c’est pour le 5 février, s’il vous plait.

3829 MR. MAYRAND: Parfait.

3830 LE PRÉSIDENT: Merci. Le Contentieux?

3831 MS. FISHER: Merci. In respect of the questions contained in Exhibit 1, which was placed on the record on Monday, we ask that you undertake to provide responses as applicable by February 15th.

3832 MS. DORVAL: Will do.

3833 Undertaking

3834 MS. FISHER: Thank you. And all of the other undertakings that were given to the panel will be due by the 5th.

3835 MS. DORVAL: Okay.

3836 COMMISSIONER FISHER: Thank you.

3837 MS. DORVAL: Thank you.

3838 LE PRÉSIDENT: Merci beaucoup. J’espère que je vous ai pas trop brassé, mais notre -- our objective here is not to just take what you say at face value, but to challenge it and I always chuckle when people, commentators that aren’t even in the hearing room have views about our processes. Our job is to challenge. It’s not to take at face value.

3839 MS. DORVAL: We fully understand that.

3840 THE CHAIRPERSON: Thank you.

3841 MS. DORVAL: Thank you.

3842 LE PRÉSIDENT: Madame la secrétaire?

3843 THE SECRETARY: I would now ask the Small Market Independent Television Station Coalition to come to presentation table.

(SHORT PAUSE)

3844 LE PRÉSIDENT: À l’ordre s’il vous plait. In the back of the room, please. Madame la secrétaire?

3845 LA SECRÉTAIRE: Merci. Please introduce yourself and your panel and you have 10 minutes.

PRESENTATION

3846 MR. ARNISH: Thank you very much, Madame secretary. Good morning, Mr. Chair, commissioners and staff.

3847 For the record my name is Rick Arnish, Chair of the Jim Pattison Broadcast Group; with three stations, two in British Columbia and one in Alberta.

3848 I’m pleased to be here as Chair of the Small Market Independent Television Stations or SMITS Coalition.

3849 Before you this morning are representatives of seven of the nine member companies of SMITS, including on my left, your right, Glenda Spenrath from Newcap, two stations in Alberta.

3850 Next to Glenda, Robert Ranger of RNC Media, three stations in Quebec; next to Robert, Rob Germain of CHEK-TV in Victoria.

3851 On my right, to your left, Marc Simard of Télé Inter-Rives, four stations in Quebec; next to Marc, Don Caron of Thunder Bay Electronics, two stations in Thunder Bay; and next to Don is Jeff Thiessen of the Miracle Channel in Lethbridge.

3852 I wish to note that Corus and Newfoundland Broadcasting participated in all aspects of our submission and except where otherwise noted, have confirmed that they endorse the positions of the SMITS Coalition.

3853 We’re also pleased to have with us this morning, in the back row, our experts Debra McLaughlin, who prepared a revised report on small market realities; Ken Goldstein who prepared a report on structural challenges facing SMITS and Peter Miller our counsel.

3854 Mr. Chair, we’re thankful for this opportunity to appear before you on this morning of the third day of an eight day hearing.

3855 We have a better sense of your questions and concerns by virtue of hearing at least some of what has happened over the past few days.

3856 We will divide our presentation into three parts. First we will talk about why we believe local television remains important and where present the best vehicle to deliver local programming, particularly local news.

3857 Second, given limited and decreasing resources in the system, we will talk about priorities. Priorities as between local T.V. and community T.V. and within local T.V., small market versus large, independent versus vertically integrated.

3858 And third and last we will talk about some of the models to support local T.V. and local programming that are before you and what we believe to be some of their more positive and negative aspects and what we recommend at this point.

3859 MR. ARNISH: We appear before you today at a time when the future of local T.V. in Canada and particularly small market local independent television is very precarious.

3860 As we said 18 months ago, there are three unequivocal facts about this situation. Number one, as the Commission itself has recognized, Canadians care about local T.V.

3861 They rely on it almost daily for local news and information programming. In the small markets we serve local news typically earns the number one rated slot.

3862 It’s not replaceable by larger groups or other types of media.

3863 Two, if the Commission does not act and act soon, local television and a number of small and even medium sized market, including any one of those represented by the people around this table, will no longer be there as early as this fall.

3864 And three, there is a reasonable way of rebalancing funding in the system to create a more sustainable model for local T.V.

3865 One that will not cost Canadians any more money and will not see them lose the local programming they really value.

3866 MR. THIESSEN: The precarious state -- financial state of small market television is well known to you. As pointed out in our submission, national ad sales are down significantly and continue to plummet. Indeed as a group, were it not for previous funding and our ability to significantly grow local retail sales over the past few years, we would have been in the red long before now.

3867 Sadly as a group we are well there now. Our 2015 financials, as reflected in our annual returns, now put us squarely in the red.

3868 Your statistics on SMITS issued earlier in the process confirm that, but actually did not represent the financials of the SMITS coalition before you today.

3869 Mr. Goldstein would be happy to explain this in Q&A if you’re interested. Without your help, some member stations will be start going dark and soon.

3870 MR. GERMAIN: So who cares if our stations go dark? Well your own survey show 8 out of 10 people care. Canadian Broadcasting System is an act of political will.

3871 It exists because we collectively believe it’s important and in smaller markets local T.V. is even more vital, because other sources of local news are disappearing.

3872 On Vancouver Island, where I’m from, the Nanaimo Daily News is set to print its last paper on Friday. Where will people turn if their T.V. station closes too?

3873 Digital-only news gathering in small markets has proven mostly unsustainable. The most credible sources online are journalists still paid by traditional media.

3874 So if local T.V. is important to Canadians, how are we going to protect it and why are the local channels, the service Canadians value most, the only ones that don’t receive some form of funding through the BDUs.

3875 Specialty channels, U.S. cable networks and yes community access T.V. all receive funding. Tax credits and CMF funding support some network programming but not local.

3876 Asking ourselves whether we need local television is like asking ourselves whether we need a Canadian Broadcasting System at all.

3877 As yourself, Mr. Chair, has said local T.V. is a pillar that supports our democracy. Of course we need local T.V. The vast majority of Canadians agree including, we suspect, every politician in the country, be they municipal, provincial or federal.

3878 MR. SIMARD: So assuming the CRTC is prepared to support local T.V., what are the priorities? First we think that it’s important to draw some kind of distinction between independent and vertically integrated local T.V. stations.

3879 The good news is that SMITS generally operate most cost effectively than larger corporate group. Being usually of and from the communities we serve, we know how to get things done efficiently and we can accept lower margin over the long term.

3880 Generally speaking, our members do not have the ability to achieve corporate economies of scale from profitable speciality or BDU operation to change the way we amortize fixed programming costs to reduce expenses or to withstand indefinite loss.

3881 We can lose and some of us have lost money for a little while, which is -- which many of us are still even now hanging in, but the reality is that unless we have a -- regular framework that supports small independent local station, very soon we will not all have the ability to sustain operations.

3882 MR. CARON: It’s easy to characterize the proceedings as a battle between local T.V. and community T.V. In some ways it may seem so, but we think that as a false characterization. We don’t believe this hearing should be about a choice between local TV and community TV at all. We think it should be about supporting both so both can contribute to the maximum extent in today’s emerging broadcast environment.

3883 And we think that means, one, giving priority to supporting community TV where no local TV stations signal exists; and, two, giving priority to local TV stations where they exist, particularly in small and medium markets where no local TV station would exist without support.

3884 It’s simple but sensible; there is no question where local TV exists is ubiquitous, more effective, and more efficient vehicle for citizen engagement than community TV.

3885 MS. SPENRATH: As we did 18 months ago at the Lets Talk TV hearings, the SMITS Coalition continues to recommend the establishment of a new, private, local television fund from the current BDU 5 percent contributions to support local programming, incremental to the small market local programming fund. We suggested that any decision you make to support other independent or medium market stations be separate and apart from support for small market stations.

3886 We continue to believe that this is the right approach. Whether you decide to maintain the SMLPF as a distinct fund or not, the separate and specific needs of small market independent stations remain, there can be no one-size-fits-all solution.

3887 Our recommendation is that you preserve and increase, through our direct contribution from cable, the funding of small market independent stations and introduce whatever funding you feel appropriate for a broader array of services that provide local news and reflection.

3888 Bell’s proposal has many positive elements in this regard, particularly the preserving and enhancing of the SMLPF. That said as it stands, our French language members do not believe the Bell model has been designed to meet the needs of French television broadcasters, and as a group we are concerned that the quantum of available to SMITS may not ultimately be sufficient to preserve and enhance local programming in small markets.

3889 Group V media has put a proposal on the table to support non-metropolitan market independent local TV stations. It’s very similar to one of the alternative options we filed at the Lets Talk TV proceeding.

3890 Depending on eligibility rules under this approach, we estimate that SMITS could receive between 40 and 60 percent of funds, or between 18 and 27 million dollars annually. Without the SMLPF the lower end of this range would not be sufficient.

3891 Without the SMLPF or SMITS envelope within a new fund we are concerned that whatever allocation math formula is chosen, a broader list of fund participants will have a significantly dilutive effect on SMITS stations and hence provide insufficient funding.

3892 The Bell news fund is another case in point. Based on Bell’s number without the enhanced SMLPF, SMITS would receive only 6 percent of funding. That is out of one big local news fund, SMITS would receive approximately $5 million.

3893 In short, having a separate SMLPF or SMITS envelope within a new fund for the smallest of the small is a must. Based on our analysis, and of Mr. Goldstein, we believe the target increment should be an additional $20 million on top of current SMLPF funding.

3894 Only such an approach would ensure that those most in need receive adequate funding, not impacted by local programming decisions of the larger participants over which we have no control.

3895 MR. ARNISH: Mr. Chair, Panel Members, in conclusion you have made it clear that the Commission is open to considering intervenors proposals to establish fund that would provide incremental support for the production and broadcast of local news and information programs.

3896 We believe that local TV and small markets across Canada have done a stellar job of providing local reflection that would not otherwise be replaced in our absence, and is worth saving. We think over a million and a half Canadians living in some of the sparsest parts of this country deserve to continue to have access to local news and information. We have attached to this presentation the principles that should guide your decision in how to fund local television reflection.

3897 We hope we have given you some reasonable suggestions in what can be done to ensure that happens. We ask that you move quickly to put a new funding in place by September 1st, 2016.

3898 Thank you for allowing us to appear in front of you this morning and we’re open for any questions you may have.

3899 THE CHAIRPERSON: Well, thank you for you presentation.

3900 Rather than start and stop, what we’re going to do is take our morning break at this point and then have questions afterwards.

3901 So we’re adjourned until 10:50. Thank you.

--- Upon recessing at 10:35 a.m.

--- Upon resuming at 10:53 a.m.

3902 LE PRÉSIDENT: Alors, s’il vous plait.

3903 So Commissioner Molnar will start us off.

3904 COMMISSIONER MOLNAR: Good morning, everyone.

3905 Now, before I start I just have to ask because, Mr. Arnish, I feel certain I’ve read an email that said you had retired a couple of months ago at least, so...

3906 MR. ARNISH: I love to be here in Ottawa with the CRTC and be at a hearing but Sunday is my last day.

3907 COMMISSIONER MOLNAR: Oh, Sunday.

3908 MR. ARNISH: Yes it is.

3909 COMMISSIONER MOLNAR: Well ---

3910 MR. ARNISH: I saved the best to last.

3911 COMMISSIONER MOLNAR: That’s for sure, that’s for sure. Enjoy Monday.

3912 THE CHAIRPERSON: Rick Arnish goes dark.

3913 COMMISSIONER MOLNAR: I want to ask, before I get in to the questions related to your submission; as I read through your submission and heard you folks here today, you talk sometimes small markets and then you talk -- I -- for example on page 6 you say that:

3914 “We suggest any decision you make to

support other than independent or medium market stations be separate and apart from support for small market stations.”

3915 So sometimes you’re talking small markets and sometimes you’re talking independent stations, and I just want to maybe begin by clarifying that. So would you agree with an objective that would say that all Canadians should have access to local news and information reflective of their communities of interest in all parts of Canada; small markets, medium markets, large markets, regardless of who delivers -- who would be responsible for delivering, from an ownership perspective?

3916 MR. ARNISH: We would agree with that yes.

3917 COMMISSIONER MOLNAR: Right. So one element we want to look at is the communities in the -- the communities; I mean the citizens where they’re living in all communities, irrespective of who might be delivering that, but the regulatory interventions or tools that might be used to enable that might be different based on the ownership. Does that make sense?

3918 MR. ARNISH: Yes, it does.

3919 COMMISSIONER MOLNAR: Okay. So is it your view that small markets are at risk or the most sensitive to need, regardless of the ownership?

3920 MR. ARNISH: Yes, I’ll start and my colleagues can certainly join in.

3921 Without a doubt we would categorically agree with that a hundred percent. The smallest markets which are appearing before you today are at a crossroads and we’ve said that in other hearings and we said that in our intervention when we sent in the document for this hearing, and obviously in our presentation this morning, that if something isn’t done to assist small market stations that we all represent across the country from coast to coast, and it’s from Victoria to St. John, Newfoundland. You know, we -- some of us in front of you this morning are not going to be able to continue in the broadcasting industry as ---

3922 COMMISSIONER MOLNAR: Right. But, again, I want to separate the ownership and delivery from the content, from the objective of providing local news and reflection within a community. I mean, there’s many small markets you folks don’t serve.

3923 MR. ARNISH: That’s true.

3924 MR. GERMAIN: I would like to also add, though, I think it’s important we preserve local voices and independent voices in the broadcast system; not just in small markets but in small and medium-size markets independent voices are important. And independent voices are at a disadvantage, of course, because we don’t enjoy the economies of scale. Like our station is a standalone station and we have to compete with ---

3925 COMMISSIONER MOLNAR: I’m fully prepared to have a discussion ---

3926 MR. GERMAIN: Okay.

3927 COMMISSIONER MOLNAR: --- of ownership in scale. I’m just trying to separate, once again, communities; serving a community from who is serving that community. So small markets should be a focus, whether they’re served ---

3928 MS. SPENRATH: Yes.

3929 COMMISSIONER MOLNAR: --- some of them today are served through BDU community. Some are served by you. Some are served by vertically integrated.

3930 So regardless of who serves it, it is important and perhaps an appropriate focus that we be focused on small markets.

3931 MS. SPENRATH: Yes, absolutely. And if I might just jump in too. The factor small markets contend with every day is the eroding national dollars and the spill and detracting dollars away to large markets, regardless of whether they are independent or vertically integrated.

3932 That is something that’s specific to small markets.

3933 M. SIMARD: Je pourrais ajouter, Madame Molnar, qu’on croit que tous les marchés au Canada, peu importe qu’ils soient desservis par les grands groupes, par d’autres groupes indépendants, le service de nouvelles dans chacun de ces marchés-là doit être soutenu de quelque façon que ce soit.

3934 Notre position en tant que groupe c’est que non seulement les petits marchés indépendants comme les-nôtres mais aussi les marchés qui sont desservis par d’autres groupes indépendants ou par des grandes entreprises verticalement intégrées, qui desservent des petits ou des marchés médiums, doivent aussi bénéficier de l’aide d’un fond pour poursuivre les nouvelles locales dans notre pays.

3935 COMMISSIONER MOLNAR: Okay. Thank you.

3936 I want to make reference to a comment the Chair noted with the last intervenor, and that is our responsibility is to ask questions and sometimes they sound like hard questions or harsh questions.

3937 It’s not a reflection of the outcome, it’s a reflection of the process. And you’ve come with a pretty big ask, so I think it’s only fair that perhaps there be some hard and harsh questions.

3938 MR. ARNISH: Absolutely, we understand that.

3939 COMMISSIONER MOLNAR: Okay. Thank you.

3940 So one of the things I wanted to cover off, and I’m referencing the submission you made perhaps more than the comments you’ve made here today but the submission that you filed, where you spoke of structural issues facing SMITS that are different than exist.

3941 Again, you say large markets and VIs. I’m going to say, looking at these issues, they’re perhaps issues related to your ownership versus the market.

3942 And one of the things you reference in the financial situation you’re in today relates to DTH coverage. Has that issue been solved?

3943 MR. ARNISH: I can ask our other colleagues to jump in here. I don’t know that it has totally been resolved. Some of our stations, when we talk about DTH coverage, I guess most of us if not all are in SD.

3944 People nowadays have certainly gravitated to the HD platform. And I know in our particular case not all of our stations are carried in HD with the DTH providers in our marketplaces.

3945 M. SIMARD: Non, Madame, la réponse c’est non. Parce que tout d’abord les deux grandes compagnies de DTH ont accepté de distribuer pour chaque groupe deux stations en HD. Nos autres stations sont distribuées en SD.

3946 Alors à ce moment-là, des stations extérieures donnant la même programmation sont aussi données. Parce que nos stations -- pour compléter la programmation, nos stations qui sont données en SD.

3947 Donc, si vous avez le choix d’écouter les nouvelles de Radio-Canada sur notre station SKRT ou sur Radio-Canada provenant de Montréal en HD, il est certain que vous allez l’écouter en HD. Ça, c’est la première partie.

3948 La deuxième partie c’est que la substitution que le Conseil nous a accordée ne peut pas être appliquée avec perfection sur les systèmes de DTH parce que ceux-ci utilisent les codes postaux.

3949 Alors à ce moment-là, ça crée la situation, par exemple je vais donner l’exemple du marché du Québec, qu’il y a exactement un million d’heures écoute encore aujourd’hui qui entrent dans nos marchés mais dont les heures écoute sont attribuées aux stations de Montréal.

3950 L’autre point aussi c’est qu’évidemment la substitution ne se fait pas sur les canaux qui sont à des heures différentes. Alors, à ce moment-là, prenons l’exemple de Radio-Canada encore. Radio-Canada Ouest, TVA Ouest sont distribués dans nos marchés sans substitution.

3951 Alors c’est la raison pour laquelle encore aujourd’hui plus d’un million d’heures écoute, chaque semaine, vont aux stations de Montréal.

3952 COMMISSIONER MOLNAR: Okay. Thank you for that, and I think we’ll get back into that a little more.

3953 But really, what I’m trying to understand, in saying that the stations are at risk, there are financial risk of closure, you’ve made notes that there are structural issues facing your markets that are separate and distinct from those in larger markets and VIs. I guess you’ve made the two separately.

3954 You’ve also made the statement that there’s no evidence that TV audiences have materially declined of late in SMITS markets but what has occurred is material revenue declines.

3955 So what I really want to do is I want to understand what have been the changes that have caused your revenue to decline that are materially different than those that occur in other markets?

3956 So while your entire, you know, status quo, your situation today is important, I’m also trying to understand what has caused the rapid revenue decline. While your audiences have stayed, there have been changes that have occurred over the last few years, if I understand your argument, that have caused your financial situation to decline.

3957 So one of the ones you brought up was the lack of DTH carriage, and you made the point now that while you may now be carried, not everybody is yet in HD. And that affects your -- I don’t know, you say your audience has not changed. So that’s a little bit of a confusing statement. One would have thought that would affect your audience.

3958 MR. ARNISH: Well, it has and it’s a great question. I think we have to go back to 1997 or 1998.

3959 COMMISSIONER MOLNAR: No, you don’t.

(LAUGHTER)

3960 MR. ARNISH: I know, but I have to.

3961 COMMISSIONER MOLNAR: You’re making an argument here that you have had a material decline in your revenues ---

3962 MR. ARNISH: Yes, but I think ---

3963 COMMISSIONER MOLNAR: --- over the last few years.

3964 MR. ARNISH: I think, yes, but I’m going to have to go back to 1998, Madam Commissioner, because we could see in 1998 that there was starting to be a serious change in the way that the advertising community was looking at small market stations like ours in front of you this morning; and in particular in national advertising and, to a degree, in regional advertising.

3965 And that started out, we could see that sort of plateauing in 1998 and then it was starting to decline over the great numbers of years right through until 2015, where over the last seven or eight years in particular, it has been exacerbated even more.

3966 And a lot of that, you know, we appreciate the Commission going back many, many years ago and allowing us to work with the DGH companies to be able to get our signals on satellite across the country. And they were in SD and it took a lot of time and a lot of challenge to get there. But we needed that to try and keep the viewership in our markets, not only in the cities that we’re licensed in but areas outside of the cities that we also have re-broadcasters in, in our particular case, to be able to continue to have those folks watching our local television station.

3967 But national advertising over the last few years has really declined significantly because of many issues. One major one was the fact that the cable companies, the DGH companies are allowed under regulation to bring in distant signals into the marketplace.

3968 So the advertising community can certainly buy around stations like ours in front of you this morning, by getting spill into the marketplace through distant signals. And that’s in cable and satellite.

3969 The marketplace itself is changing because, as we know, new media has come into play as well and you can, like Commissioner Simpson said this morning already, you can go on Google and you’ll have Google ads come up for that particular marketplace.

3970 So they’re -- they are buying around us that way as well, as they are buying around radio in that particular case as well.

3971 The system itself has worked well in the

3972 local marketplaces where categorically all the stations here in front of you have been able to either hold or even grow to a degree their local advertising and that’s because we’re heavily committed in the marketplaces that we’re in.

3973 Not just to local news, even though that’s about 90 percent of what we do nowadays, but it’s because of everything else that we do in the communities that we serve.

3974 And we’re able to go out of those communities and be loud and proud and be able to say look your local television station is here, we provide a conduit to the local viewership.

3975 We still continue to tell the folks in the morning how to dress their kids on a winter day or cover floods, or fires, or whatever, and hard news as well.

3976 And the advertising community likes hat, the viewership likes that and it’s been fairly stable in that particular area.

3977 COMMISSIONER MOLNAR: Okay I’m going to try and understand this again. You’ve made the statement that T.V. audience, “there’s no evidence T.V. audience has declined”; you agree with that statement? It is your statement?

3978 MR. ARNISH: I think it has declined, even though we -- you know, we have said that, but I think it’s become the precipitous that the audiences will continue to decline as there is more opportunities.

3979 There’s -- or sorry, there’s more fragmentation that’s taking place with social media, for example. People are not able to -- can now get a lot of news through social media.

3980 They can’t get the professional news that we produce on a daily basis that way, but certainly a lot of folks are getting their news from YouTube and I think we all know that and that certainly takes away eyeballs from our television audiences as well.

3981 COMMISSIONER MOLNAR: M'hm.

3982 M. SIMARD: Est-ce que je pourrais peut-être donner un exemple, Mme Molnar? Voici écoutez ---

3983 La principale partie de nos revenus qui a diminué ce sont les ventes nationales. Ça c’est -- ça l’a aucun doute.

3984 Alors, par exemple, dans nos entreprises de l’Inter-Rives, nous avions auparavant environ peut-être 1$ million de revenu de vente nationale sélective.

3985 Alors ce qui s’est produit au cours des dernières années, c’est que graduellement les ventes nationales sélectives, malgré le fait que les cotes d’écoutes étaient quand même très bonne --- au Québec je pense qu’on a -- les grands réseaux on quand même des cotes d’écoutes exceptionnelle.

3986 C’est que l’argent a été déplacé des petits marchés vers les canaux spécialisés par exemple.

3987 Alors parce que les grands agents ce sont -- ce sont aperçus que par les canaux spécialisés ils pouvaient rejoindre aussi nos marchés.

3988 Alors c’est une principale raison pour lequel nos revenus sont en baisses.

3989 MR. ARNISH: I’m going to ask --

3990 COMMISSIONER MOLNAR: Thank you. No ---

3991 MR. ARNISH: -- Debra McLaughlin to weigh in on this.

3992 COMMISSIONER MOLNAR: Can I -- I want to -- I want to go back to my question one more time.

3993 You’ve said that SMITS are qualitatively different from larger market and multimarket television group. You’ve said there’s no evidence that T.V. audiences have materially declined within your markets, so -- and then you’ve highlighted some of the differences that have caused your revenue decline.

3994 “What has occurred is a material

revenues declines.”

3995 So I appreciate -- I don’t dispute for a minute that specialty services and the buy on specialty services has impacted your revenue.

3996 I don’t dispute that but I don’t see that as something that is qualitatively different from large market and multimarket television groups, the move to special advertising on specialty.

3997 I’m trying to understand your evidence. So your evidence says your audience hasn’t decline. I think now you’ve acknowledged that the audience has declined.

3998 MR. ARNISH: May I ---?

3999 COMMISSIONER MOLNAR: And has declined, I expect, for not something -- when you talk about multimedia new sources probably not something that is qualitatively or quantitatively different for small independent market stations; would you agree?

4000 MR. ARNISH: I would, yes.

4001 COMMISSIONER MOLNAR: Okay. So that’s not particular. The issue of DTH carriage is particular for -- for you folks, if I understand.

4002 And what I think I’ve heard you say is it’s not been resolved entirely since you’re sitting on SD. What I want to, I think, try and get at here is what is -- what is unique to your independent group or the independents versus all small markets.

4003 And what of this should be addressed through perhaps the need for some sort of funding versus there may be other regulatory tools.

4004 If the issue is a carriage issue it’s hard to understand why it should be addressed through a funding issue.

4005 MS. SPENRATH: If I could just jump in, just on the pure carriage part of this. When we talk about damage, there’s two components to that.

4006 There is the permanent long term and then there is the current and ongoing and the erosion of national revenues.

4007 Back when we originally got carriage, some of us were at 50 percent satellite penetration at that point in time, which meant that 50 percent of our audience could not even tune in to our stations.

4008 So some of that -- and then when we did have carriage, we didn’t get all that audience back as the results since then would tell you.

4009 So -- and that is something that’s very specific to this group of stations, is the fact that there is historic and ongoing issues around the revenue retention and re-attraction of previous revenues.

4010 MR. GOLDSTEIN: Commissioner Molnar, if I could pick up as well?

4011 The reasons we identified those two matters as materially different, is it’s only in small markets and medium markets that you have the effect of the buying around.

4012 So the dilution of conventional advertising, that’s true. That’s across all market sizing -- sizes. But the buying around of local stations, that’s particular to small and medium size market stations.

4013 And on the DTH side, you made a comment about compensation. I think it’s important to realize that the SMLPF was setup as compensation in lieu of carriage and because of the damage done by DTH.

4014 So that damage was done when DTH came in and essentially part of the problem is many of these stations never recovered from it.

4015 They lost audience shares back then; they’re still not on an equal basis with other stations on DTH.

4016 So that is a very big qualitative difference, but Debra should comment on the viewing trends, because, you know, it’s better to talk about the numbers.

4017 MS. McLAUGHLIN: Well in actually fact the ---

4018 COMMISSIONER MOLNAR: Perhaps -- perhaps you could just confirm whether or not there is evidence that T.V. audiences have materially declined?

4019 MS. McLAUGHLIN: For SMITS or generally? I’ll put it in context. Generally ---

4020 COMMISSIONER MOLNAR: Well it’s your evidence.

4021 MS. McLAUGHLIN: Yes.

4022 COMMISSIONER MOLNAR: What were you talking about SMITS or all small markets?

4023 MS. McLAUGHLIN: The audience has declined relative to the 1997 for SMITS, but in the past few years the audience for SMITS stations has been stronger than conventional as a whole.

4024 The losses in the core demographics of 18-49 and 25-54 are greater for conventional and lesser for SMITS, which speaks to the demand for local T.V. So that’s why it would be not a material change.

4025 MR. MILLER: Commissioner, if I might add a couple of numbers that I think helped to put this in focus, because although one might be maintaining a local news audience in a local market, Peter’s point about the buying around is shown very clearly if you look -- this is in our report.

4026 We did an aggregation of the eight largest markets in Canada with 65 percent of the Canadian population and 80 percent of the revenue of private conventional television.

4027 And the rest of the markets, all the rest of the markets, smaller than the largest eight, 35 percent of the population, 20 percent of the revenue.

4028 Which means if you were to do an index, as is often done in the industry, the large markets are indexing at 120 or 125 and the small markets are indexing at 55.

4029 And that is baked into our system that was always a factor for years and years and years. I won’t go back to ’97. I can go back to ’67.

4030 But the fact is that it’s getting worse and it’s the buying around, it’s the using of the specialty, it’s the -- and I believe the Chair made this remark on Monday about the fact that you’re now looking at people able to buy ads on Google and not bother with any of this.

4031 So I think if you just think about those two numbers, 65 percent of the population makes 80 percent of the advertising revenue in private conventional, 35 percent of the population makes 20 percent.

4032 COMMISSIONER MOLNAR: Okay. Once again I just want to focus my questions on your statement that there are important differences between the economic challenges facing SMITS, which is an independent television system, then those facing larger market stations.

4033 So one is DTH coverage, and I appreciate the fact that the fund had initially been in to compensate for lack of carriage, and you’ve achieved carriage, not perfectly equivalent carriage but you have achieved carriage since that fund has been put in place.

4034 I want to go on to another one of the points you brought forward, and that’s under what you call increased regulatory costs, and you speak of the new distance signals policy made effective in 2012.

4035 Can you just elaborate on what regulatory -- what was the regulatory cost associated there and where it’s landed?

4036 MS. SPENRATH: Sure. At the same time as the whole LPIF and masked by it because of that were the new harmonized local programming also brought in which in some people’s case -- in our case caused us to increase our local programming by 50 percent to get to the harmonized levels.

4037 There was -- in 2009 ---

4038 COMMISSIONER MOLNAR: Sorry, distance signal policy I’m asking about.

4039 MS. SPENRATH: Oh, distance signal policy. Okay, I may refer to either Debra or Ken on that question.

4040 MR. GOLDSTEIN: Let me start. We did provide and Debra studied the financials for SMITS. And I’m sorry; I don’t have it in front of me. But you’ll see that the revenue from distance signals has declined very materially and that’s because the policy change was such that before there was an obligation to compensate in lieu of -- in order to get agreement of the stations and afterwards that requirement was eliminated and it was just a general policy of there being agreements. And I think what’s happened is most of the agreements that were in place have expired.

4041 But Debra might have a bit more information on that.

4042 COMMISSIONER MOLNAR: Particularly what is said here is well to date compensation has grown through to 2015. There’s no guarantee it will continue. Indeed a decline of one million is forecast. So I’m just asking about that.

4043 You’ve said increased regulatory costs have caused the financial situation you’re in today. I’m just trying to understand that issue.

4044 MS. SPENRATH: Again -- if I might jump in -- the extra regulatory cost was the harmonized levels. It was stuff like descriptive video. It was, you know, closed captioning. Those are all extra costs that we were bound by regulation to put in place. And there are more coming in 2017. We’ve got closed captioning for PSA’s promos and commercials.

4045 To answer the other question on the DTH, on the revenue side of the equation the SNLPF it has reduced. It’s dropped by about $1 million. And what they were talking about was the U.S. four plus one. That distance signal regime where we got 20 to 25 cents a sub that is on its way out and has been declining and there isn’t a whole lot left in it for us.

4046 COMMISSIONER MOLNAR: So compensation has grown through to 2015 and this year it is declining and that’s from a regulatory intervention caused that to occur?

4047 MS. SPENRATH: Well, the regulatory didn’t cause the -- well, it did on the U.S. four plus one because they sought relief from it, the BDU, so that they wouldn’t have to pay it. So -- and were granted. So that’s what caused the four plus one to go down.

4048 What caused the regular DTH to go down is decreasing subscription.

4049 COMMISSIONER MOLNAR: Okay. You mentioned the harmonized levels of local programming and mentioned that increased hours and costs by up to 50 percent for some SMITS members. So that was when the local programming improvement fund was put in place.

4050 MS. SPENRATH: Yes, that’s correct. And it was only because of those funds that we could even achieve that. Now that’s gone and we’re left at an unsustainable programming level basically.

4051 COMMISSIONER MOLNAR: Have you -- you don’t propose here to return to pre-LPIF levels of local programming commitments. Have you considered that?

4052 MS. SPENRATH: Well, we can’t because now the condition of licence is that you have to be at -- well, for us it’s 14 because we have two stations, but you’re saying we have to be at seven hours per station. We were at nine hours 20 minutes for two stations combined before.

4053 COMMISSIONER MOLNAR: Right.

4054 MS. SPENRATH: So we’re not able to.

4055 COMMISSIONER MOLNAR: Just to be clear, you have come in here suggesting changes from status quo. All I’m asking, have you considered other changes versus funding? Have you considered would that be part of a solution to put you to a sustainable level?

4056 MS. SPENRATH: I think ---

4057 COMMISSIONER MOLNAR: I mean, you were there before the LPIF returning. Would that ---

4058 MS. SPENRATH: Well, I mean, if you would really relax regulations on closed captioning and harmonized levels, but I don’t really think that’s where you’re suggesting we go. Because those are ---

4059 COMMISSIONER MOLNAR: We’re not suggesting. We are seeking input.

4060 MR. ARNISH: I’ll jump in here. I think it’s ---

4061 COMMISSIONER MOLNAR: Just to be fair, you’ve put forward the fact your audience has remained, your financial situation has deteriorated and part of the reason is increased regulatory costs.

4062 MR. ARNISH: Well, that’s part of it. That is part of it. There’s no doubt about that. But we have ---

4063 COMMISSIONER MOLNAR: You’ve put DTH carriage as one of the reasons as well. Well, in fact, the regulator has worked to provide you improved DTH carriage over the last few years not reduced your DTH carriage.

4064 MR. ARNISH: Right. And we totally appreciate that without a doubt, Commissioner Molnar. And the harmonized levels are one thing, the DTH is another.

4065 But, you know, back to your point, would we -- I can’t speak for everyone in front of us -- in front of you this morning, but I believe, from discussions that we’ve all had with the SMITS group, that we can’t go backwards on local programming. If we went backwards in the number of hours of local programming that we’re all currently doing right now why would anyone even watch us in the first place.

4066 And I think, you know, the levels -- I mean, we do about, on average, over 200 hours a week of local programming, and it’s excellent programming. Many of the stations in front of you this morning have won national awards from the RTNDA or the RTDNEA, whatever it is now, the digital organization, but -- and those are national and regional. It shows you the quality of the programming in those marketplaces.

4067 And I’ve got to say that for the BDUs, whether it’s satellite or cable, in my opinion, because we do provide excellent local programming of that calibre, that people will continue to subscribe to cable and to satellite or TELUS Optik TV out in the west, as we’re involved in, because they want to see the reflection of their local community. And we do a really good job and we’re very proud of that.

4068 COMMISSIONER MOLNAR: Okay. Fair enough.

4069 MR. CARON: If I could comment just briefly from Thunder Bay television point of view, about 30 percent of our revenue comes from our news flavour, and we increased our -- when the LPIF came in we increased our news from 10 hours and 47 minutes to 14 hours, and that -- we spent an extra $600,000 doing that.

4070 If we went back to the 10 hours again because such a large percentage of our revenue comes from the news, if we cut back our news obviously our revenue will reduce proportionately to that so that there would be probably a loss as opposed to a gain by cutting back the number of hours.

4071 COMMISSIONER MOLNAR: So would it be fair to say then that the regulatory cost of harmonized levels of local programming is not, in fact, the reason for your financial situation then; that, in fact, that level of local programming is assisting your financial situation and not causing your financial situation?

4072 MR. CARON: One of our -- in our particular case, one of the major issues -- and it’s been suggested already by a number of people here -- is the fact that we’re in the, if I can call it the golden horseshoe timeframe, and we’re competing against the big stations in Toronto who supply the same programs at the same time, and what’s happening is the agencies are buying around the small markets. They’re buying the networks and they’re not buying us anymore. In the last two years we’ve lost a half-dozen of big national buys to get into our market that we’ve had for years, and years, and years that were in excess of a million dollars to our revenues. So -- that’s -- in our case, that’s one of the major issues that have hit us hard and the fact they're buying around now, and we ---

4073 COMMISSIONER MOLNAR: Right.

4074 MR. CARON: --- taken by the network and it comes into our area, so ---

4075 COMMISSIONER MOLNAR: Right. I'm going to go on, but you know, what you just said about advertising and buying around which is a structural issue. We heard them buying specialty, we’ve heard, you know, buying around into major markets. So the two pages identifying the regulatory reasons that you're in financial -- financial -- a particular financial crunch, are perhaps not really why you're in the particular financial crunch. And the reason is ---

4076 MR. GOLDSTEIN: Commissioner Molnar, I mean we identified a lot of reasons, there's two sections in our brief. One was the differences between us and the larger markets, and we’ve now dissected that. We’ve talked about DTH, we talked about carriage, we’ve talked about the quality of carriage, we’ve talked about simultaneous substitution, we’ve talked about buying around. So those are qualitative difference.

4077 We also identified some increased regulatory costs. We have never asserted that the increased regulatory costs are responsible for the financial state of the SMITS stations. We wanted to paint the picture for you, and we believe we’ve done that accurately, and are happy to continue answering any questions ---

4078 COMMISSIONER MOLNAR: I’m going to move on, but you know, I just read what's been provided to me and it says:

4079 “Adding to economic challenges are a

number of regulatory obligations that have been imposed over the last few years and created disproportionate burden for SMITS, and one is harmonized levels of local programming hours. And the operators of these systems have said that local programming is in fact adding to their revenue, it's an important advantage. And the fact that they’ve been harmonized or increased is in fact not what has caused the burden on SMITS, but it’s their advantage and that's in fact what's generating the revenues.”

4080 So I’m going to move on.

4081 MR. ARNISH: But can I -- I just have to jump in to make it very clear that the revenues may have increased in the SMITS group as a whole, but it’s local. We’re not talking about -- I’ve got to say that national and regional advertising is in a virtual freefall. And because of our local commitments, we’ve been able to maintain the local revenue in those marketplaces. But it can't replace the drop, the precipitous drop in national advertising revenues, and that’s going to continue, in our opinion.

4082 M. SIMARD: Est-ce que ---

4083 COMMISSIONER MOLNAR: Thank you.

4084 M. SIMARD: Est-ce que je pourrais peut-être juste répondre à quelque chose pour peut-être essayer de répondre à votre question. C'est que par exemple, vous nous -- lorsque le dernier fonds, pour pas le nommer, avait été octroyé, vous nous aviez demandé, « Est-ce que vous pourriez augmenter à 100 pour cent le sous-titrage? » Alors on a dit, « Oui, avec le nouveau fonds on va augmenter notre sous-titrage pour atteindre presque 100 pour cent. »

4085 Alors voici une obligation créée par le Conseil, qui maintenant évidemment compte-tenu que le fonds n'est plus là, nous cause des dépenses additionnelles.

4086 COMMISSIONER MOLNAR: That’s right. And I didn’t ask about close captioning because I do acknowledge and understand how that would be considered a regulatory cost, it was less clear to me the others.

4087 I just want to ask -- my question here -- and a very bold question I’ve asked here is, who is a SMIT? So you folks have a little bit -- as you come before me today, the make-up of your group has maybe been transitioning a little bit over time, as I think maybe continues to, so would you consider that the issues you speak of for independent relate to all independent stations, small market independent stations, just the members who sit before us?

4088 MR. ARNISH: I don’t know if that -- if I can -- if I can answer that clearly. I think there is an impact certainly to probably all media quite frankly, with the change in the social media environment that's happening worldwide, and particularly in North America.

4089 I mean, from our perspective, if you look at the costs of being an independent television broadcaster versus a vertically integrated company that has many platforms to amortize costs so on and so forth, they may be able to, you know, hold off closing their doors because they have many other sources of revenue coming in to their company. We can't afford to do that, our television stations stand on their own two feet.

4090 COMMISSIONER MOLNAR: Fair enough. And for example CHCH was in front of us saying that they should be considered for, you know, for any kind of particular funds or assistance that is provided. So small market independent, that defines you, both of those are in your view, would you say critical to defining what ---

4091 MR. ARNISH: Who we are?

4092 COMMISSIONER MOLNAR: --- requires the kind of assistance here, you must be both serving a small market and independent from the vertically integrated groups?

4093 MR. ARNISH: Yes, absolutely.

4094 COMMISSIONER MOLNAR: So those are the two characteristics ---

4095 MR. ARNISH: Yes, and ---

4096 COMMISSIONER MOLNAR: --- regardless of whether or not it’s part of this -- I mean, Corus ---

4097 MR. ARNISH: Yeah.

4098 COMMISSIONER MOLNAR: --- was here, they're not sitting here.

4099 MR. ARNISH: Right.

4100 COMMISSIONER MOLNAR: So, small market ---

4101 MR. ARNISH: Yes.

4102 COMMISSIONER MOLNAR: --- and independent?

4103 MR. ARNISH: Yes, yes, indeed. You know, because we do think that the threshold of 300,000 does apply. CHEK-TV in Victoria is a little higher than that, but we understand the reasons why they were allowed into the SMITS group, and that’s fine at the end of the day.

4104 But larger enterprises such as CHCH in Hamilton, maybe the V network in Montreal and Quebec, you know, we look at those companies, yes, they are independent, but they serve large markets as well, in our opinion.

4105 MS. SPENRATH: And I just want to add while we have CHCH on the topic, they did present a funding model. However, with their model it was suggesting that a pool of funds would be available based on the subscribers in your particular market, and that's what you would benefit by, or that’s the funding you would receive is related specifically to the subscribers in your market.

4106 However, a fund like that -- the fallacy is it skews heavily to the large markets. So it would benefit the largest markets in least of need and -- not them, but the smaller markets most in need.

4107 MR. RANGER: If I may add, we have three station in a small market, and two station in a medium market, all our property face the same challenges. And we see the declining revenues in national advertising, we see the local advertising topping off because in smaller market, there's not more retail commerce.

4108 Most of the time the retail choices are going down in a smaller market, because Walmart is getting in there and other big chains are getting in there. So we have the same challenge in the medium market.

4109 What we’re saying on this table is that the urgency is in the small market. We opened the door in our exposé to medium market or other markets, but we’re just asking the CRTC to adjust the fund, if you decide to include more station.

4110 COMMISSIONER MOLNAR: Okay. And thank you for that, it’s a very good segway. So you -- in the submission you made earlier in this proceeding, you didn’t give us a number as to how much support you felt was required, and I see you gave us a number here today.

4111 Before I get into the content or the quantum of that number, you say you serve both medium market and small market, so is the amount that you’ve requested here today simply to support small market stations, or is it to support the members of your group, including those serving medium markets? Would it be used to support medium market stations or simply the small market stations within?

4112 MR. RANGER: The amount of 20 million is only for the small station of the SMITS group, not including my medium station.

4113 COMMISSIONER MOLNAR: Not including your medium, okay, thank you.

4114 So today the amount was identified as an additional 20 million on top of current small market, what, LPF? I sometimes forget, what is that again?

4115 MR. ARNISH: Small market local programming fund.

4116 COMMISSIONER MOLNAR: Local programming fund.

4117 MR. ARNISH: Yes.

4118 COMMISSIONER MOLNAR: So that was intent essentially the carriage fund. That was compensation for carriage.

4119 MR. ARNISH: Yes.

4120 COMMISSIONER MOLNAR: And about 10 million?

4121 MS. SPENRATH: Nine this year.

4122 MR. ARNISH: Yeah. It’s been above 10 million but it’s down to 9 million now.

4123 COMMISSIONER MOLNAR: And now your view is an additional incremental 20 million?

4124 MS. SPENRATH: Yes, that’s correct.

4125 COMMISSIONER MOLNAR: Okay. Have you filed some evidence to support that number?

4126 MS. SPENRATH: We’ve talk about what we would need -- we know what we need that for. We certainly can file subsequent to this presentation, if you would prefer.

4127 COMMISSIONER MOLNAR: The background as to how you determine that number.

4128 MS. SPENRATH: Yes, absolutely, we can do that.

4129 COMMISSIONER MOLNAR: Okay. And I think that’s probably more efficient than us going through and trying to sort it out here. So if you could undertake to file your supporting documents for that but maybe here you could just tell me what would be the outcomes; what would be achieved with 20 million?

4130 MS. SPENRATH: The success that we’re talking of with that would be, in our opinion, to maintain the level of service of providing to all of our markets because, as you know by our financials, where we’re at now isn’t at a sustainable level. So that’s what success looks like for us, is serving the people that we’re serving -- the Canadians that we’re serving, the million and a half of them in the markets that we cover today going on in to the future.

4131 COMMISSIONER MOLNAR: So it would be nothing more than what’s delivered into the communities; it would be maintaining what’s being delivered to those communities today?

4132 MR. ARNISH: I would say yes to that but I think all of us here -- you know, we’re very responsive to the needs of our local communities that we’re proudly licensed to serve. And I know that talk’s cheap but I think we’ve proven that by the number of hours weekly that we put into our local marketplaces. And I don’t want to regurgitate that but I ---

4133 COMMISSIONNER MOLNAR: Let me -- I don’t dispute that but really I’m almost asking you a mathematical question here. There were assumptions built in to creating your ask.

4134 MR. ARNISH: M’hm.

4135 COMMISSIONER MOLNAR: What did you assume? Maintain service; improve service; increase local reflection; what was the assumption going into that number?

4136 Mr. ARNISH: Well, I think the assumption’s all of that. I think certainly number one it’s ---

4137 COMMISSIONER MOLNAR: Well, no, the assumption is one of them.

4138 MR. ARNISH: Well, it is maintaining. It is maintaining what we do now. Hopefully, some of us can even continue to increase the amount of local programming that is beyond regulatory policies.

4139 MS. SPENRATH: Or enhancing the existing programming.

4140 COMMISSIONER MOLNAR: It assumes a reasonable return, a reasonable sort of PBIT kind of thing?

4141 MR. ARNISH: I guess, I ---

4142 COMMISSIONER MOLNAR: An amount ---

4143 MR. ARNISH: It would at the end of the day. But, I mean, the big question here, Commissioner Molnar, is whether we’re going to stay in business or whether we’re not, and that’s what it’s coming down to. Quite openly, if we didn’t have the small market local programming fund that’s in existence today, probably everyone in front of you -- I can’t speak for everyone, but a vast majority of stations in front of you this morning would’ve -- would be negative.

4144 MS. SPENRATH: And it could provide more PBIT but it might not. I mean, if you look at our numbers we’ve presented in the -- one of the reports, our national revenue’s dropped from 84 million to 78 million in one year so to say that that would give us a reasonable PBIT, we don’t know what the answer to that question is at this point in time; we hope it would be yes.

4145 COMMISSIONER MOLNAR: You hope so. We understand -- I think all of us understand that any time you make projections they’re subject to the assumptions you put into them. And, really, at this point I’m asking you; what are the assumptions? Your assumption is that this would allow you maintain service, keep the lights on, maintain your levels of local involvement, local reflection.

4146 MS. SPENRATH: Yes, all of that.

4147 MR. ARNISH: Yes, that correct.

4148 COMMISSIONER MOLNAR: All of that would generate an adequate return?

4149 MS. SPENRATH: Again, hope adequate return but I wouldn’t have predicted two years ago that our nationals would’ve fallen as far as they have. So some return would be a success.

4150 M. SIMARD: Mme Molnar, est-ce que je pourrais ajouter que ---

4151 THE CHAIRPERSON: Some of us would not have predicted oil prices what they are. I mean, that’s the light -- that’s the reality of running businesses, isn’t it?

4152 MS. SPENRATH: Yes.

4153 M. SIMARD: Est-ce que je pourrais peut-être ajouter, Madame Molnar, pour répondre à votre question, c’est que la situation financière à l’intérieur de certaines stations de nos groupes, il y a des stations qui sont encore profitables. Il y a des stations qui sont déficitaires.

4154 Alors évidemment le premier but du fonds pour nos stations qui sont déficitaires va être plutôt de maintenir.

4155 Évidemment, je ne voudrais pas devancer notre parution francophone qui aura lieu jeudi, mais d’une façon générale, nous projetons non seulement de maintenir nos conditions de licence mais de maintenir le même taux de programmation de nouvelles en excès de nos conditions de licence que nous faisons maintenant et d’améliorer la qualité, si possible, et de faire plus de programmation locale, de nouvelles locales principalement, selon la situation financière de chacune de nos entreprises.

4156 COMMISSIONER MOLNAR: I appreciate you hope to do that. Really, my question was you’ve come before us requesting 20 million and what is it that we could expect? What commitments are you making as a -- you know, should there be tools or avenues available to redirect some additional funds to small market independent stations and -- but say just for argument’s sake, you know, we said, “Okay, you asked for 20 million extra. Here it is.” What are your commitments back? And a lot of hopes are not commitments, so really what I’m asking is what would the system get for that 20 million? The light’s on and hopes -- you know, your promise that you’ll try hard, I mean ---

4157 M. SIMARD: Écoutez, Madame Molnar, je pourrais pas me prononcer spécifiquement pour chacun de mes collègues, mais ce que je peux vous dire, du côté francophone, ce n’est pas juste un espoir. Nous vous disons -- nous nous engageons à maintenir le même niveau de programmation en excès de nos conditions de licence. C’est ce que nous vous dirons jeudi.

4158 Alors nous sommes disposés non seulement à respecter nos conditions de licence mais à maintenir le dépassement de nos conditions de licence que nous produisons encore maintenant. C’est un engagement que l’on veut prendre.

4159 MR. GERMAIN: Commissioner Molnar, if I can speak?

4160 I think that the employee/ owners at CHEK have proven their dedication to delivering service to the community and the money that we’re talking about would come close to what we were getting under LPIF when we formed the company and became independent in 2009. Since then we’ve lost the LPIF and we’ve had to cut back our programming in half, our local news programming in half; we’ve had to lay off staff, and even this week we’ve had to ask for volunteer reductions in hours because of our national sales that are dropping dramatically. And so, you know, the Commissioner opened the hearings by asking about is there need for viability in local TV and, yes, there is. We need to be viable and that’s what the money would make; it would make it viable. And if we can do more we certainly will do more and we’ve proven that.

4161 COMMISSIONER MOLNAR: So if I could just to sum up what some of our colleagues have said; for some of us success would be not turning the lights out tomorrow. For some of us success would be maintaining; for some success would be increasing the amount of programming that they’re currently doing.

4162 So as much as we have common interests and common challenges, we’re not necessarily a homogenous group, but we certainly understand that there needs to be accountability and that we need to put the funds to good use and it needs to go into the system to support local programming for our audiences, and some of those audiences may not have that service much longer going forward.

4163 COMMISSIONER MOLNAR: Maybe I could ask that you go away and you come up with what you would suggest are the commitments that you would make either individually or as a group?

4164 MS. SPENRATH: Yes, we can accept that undertaking.

4165 COMMISSIONER MOLNAR: In requesting this money, what would come back to the system, and hope and stretch targets probably aren’t what we’re looking for here. We’re looking for the fundamentals.

4166 MS. SPENRATH: Okay.

4167 Undertaking

4168 COMMISSIONER MOLNAR: So I have a couple of tough questions, but they need to be asked.

4169 You know, in speaking about small market and independent, it’s hard to not acknowledge that there’s at least a couple of your members who have pretty well-financed owners with other broadcasting assets.

4170 You know, Mr. Arnish, you’re leaving Sunday, but right now you’re part of a pretty large group of companies.

4171 MR. ARNISH: I’m very proud of that group too.

4172 COMMISSIONER MOLNAR: M’hm. You know, we speak often about economies of scale, horizontal or, you know, benefits of being groups. Certainly there is some benefits to having radio and television properties within a same market.

4173 Have you incorporated that within your consideration of speaking as a small independent operator?

4174 MR. ARNISH: We have always looked at our radio assets separate from our television assets. We always believed that, you know, the licensed stations need to stand on their own two feet.

4175 Now, having said that, with our combined radio operations in certain markets, in Prince George and Kamloops and Medicine Hat, I mean, we obviously have the opportunity to assist when station revenues are dropping. We’ve prided ourselves in trying not to get into any layoff situations with our employees in our company and have certainly done -- had reductions happen with people leaving our company.

4176 But yes, I guess you could say clearly that the Pattison Group, as a whole, it’s a very large organization -- everybody knows that -- but every division is run independently of the other, even though we’re in a group, and they have to stand on their own two feet.

4177 COMMISSIONER MOLNAR: And would you say that of every market?

4178 MR. ARNISH: Absolutely.

4179 COMMISSIONER MOLNAR: So every market, every division ---

4180 MR. ARNISH: Are you talking about the SMITS markets here, the SMITS Group or our own markets?

4181 COMMISSIONER MOLNAR: Like one television market, Kelowna versus -- tell me the name of your other ---

4182 MR. ARNISH: Right.

4183 COMMISSIONER MOLNAR: Medicine Hat.

4184 MR. ARNISH: Well, Kelowna -- we’re supporting Kelowna, without a doubt. Right now, the market in Kelowna is awful. It’s the worst -- probably the worst radio market in Canada. I know we’re talking about television, but it’s probably the worst radio market in Canada and we don’t see it coming back anytime soon.

4185 I think, like vertically-integrated companies, you know, they support stations that aren’t doing as well also, and we, as a larger broadcast group, certainly support the company as a whole.

4186 COMMISSIONER MOLNAR: So you assess the viability on the basis of all television?

4187 MR. ARNISH: No, we ---

4188 COMMISSIONER MOLNAR: Or on the basis of a market?

4189 MR. ARNISH: No, we -- that’s an excellent question.

4190 COMMISSIONER MOLNAR: What is standing alone?

4191 MR. ARNISH: Well, one of our stations this year, even with SMLPF, in 2015, lost money for the first time in I don’t know how many years.

4192 One of our other television stations in a smaller market, with SMLPF, is marginally profitable.

4193 Another station is a little bit profitable.

4194 And I never thought I’d ever hear myself say this, but if something doesn’t happen down the road, I’m not sure that we’ll continue to be in the TV business. And I think that says a lot for everybody in front of you this morning.

4195 You know, it’s not -- we’re not -- I don’t think we’re crying wolf here or crying foul. You know, we’re just talking about realities, and they have to stand on their own two feet. Obviously, that would be a terrible shame for the communities that we’re all licensed to serve because, as I said earlier, this SMITS group, it’s a small group of independents. We all come together for the common goodwill of the industry, not just for our own companies, but everybody here in front of you today is here because we are committed to continuing to provide local and relevant programming that people in our marketplaces desire and want, and we’re the professionals in those marketplaces that we serve. We’ve been in the business, for the most part, over 60 years -- just about every station in front of you -- and we want to continue to be in that business.

4196 COMMISSIONER MOLNAR: Thank you.

4197 So every market and every undertaking should stand on its own under your corporate philosophy?

4198 MR. ARNISH: Yes, it should, but obviously as a larger broadcast group, you know, we have the resources to help stem the tide in some cases, and Kelowna would be that particular case. But again, we question how long that’s going to happen. The market is over-licensed and something’s got to happen, and it will.

4199 COMMISSIONER MOLNAR: Speaking of markets, the other question that I have to ask, for many of you, you have more than one station in a single small market, and that becomes -- well, there’s no question of that when it’s a commercial undertaking. I think it is deserving of question when it becomes something that’s subject to subsidy to keep the lights on.

4200 So why is it necessary or appropriate to consider funding twin sticks, or perhaps some of you have even more than twin sticks in a single small market?

4201 MR. CARON: In the case of Thunder Bay Electronics, we are twin stick. The economics of running a twin stick is the reason why we would continue to operate both of them. If I shut down one of the stations, I cannot cut out an equal amount of costs or 50 percent of the costs. I still need administration. I still need sales. I still need master controls.

4202 So we’ve looked at it and we’ve considered it over a number of times where we would take one of the stations and shut it down, but economically, we would lose more money by doing that.

4203 So unfortunately it’s not an option. It’s either both or none is what it comes down to.

4204 MS. SPENRATH: Realistically, to drop down from two stations to one, you would probably still carry 80 percent of your costs, and in the current funding model, a certain portion is given per market regardless of the number of stations you have. So double stations doesn’t mean double the funding. A certain portion is just by market, period.

4205 M. SIMARD: Je pourrais rajouter, Madame Molnar, que le fait, par exemple, au Québec, deux marchés francophones, on a même trois antennes, mais la problématique fondamentale c’est que même avec les trois antennes, les revenus nationaux ont diminué, peu importe qu’on en ait deux ou qu’on en ait trois. Alors c’est ça le principal problème que l’on confronte.

4206 Évidemment, entre nos stations, on s’entraide. Évidemment que l’une de nos stations est déficitaire depuis trois ans, alors on s’est servi des autres stations pour nous aider et puis pour la maintenir et puis pour continuer à donner le service que le CRTC nous a demandé.

4207 Parce qui son possède trois antennes dans des petits, petits marchés ou deux antennes, c’est parce que les licences de radiodiffusion nous ont été octroyées par le Conseil à la lumière de la situation financière, la capacité financière des petits marchés d’absorber trois services de télévision.

4208 À titre d’exemple, lorsque le Conseil a décidé, en ’85, qu’il devait y avoir au Québec un troisième réseau de télévision francophone -- deuxième réseau de télévision francophone privé, la population de la province de Québec était peut-être pas, je veux dire, suffisante pour supporter un autre réseau comme celui-là.

4209 Alors imaginez-vous si dans les grands centres, dans les petits marchés comme les nôtres, le CRTC nous aurait pas autorisé à détenir trois licences, évidemment ça aurait été impossible.

4210 On a donné, par exemple, le service du réseau TQS, qui est maintenant le réseau V, qui a comparu hier devant vous -- on a donné ce service-là pendant depuis près de 25 ans sans pratiquement avoir aucune rentabilité mais pour donner un service fondamental à la population, parce que nous sommes fondamentalement des radiodiffuseurs.

4211 COMMISSIONER MOLNAR: First, Mr. Caron, do I understand you said that operating two at a loss creates less of a loss than operating one?

4212 MR. CARON: There’s the economy of scale, Madam Chair. Yes, we have ---

4213 COMMISSIONER MOLNAR: Your loss is less because one of them if profitable?

4214 MR. CARON: No, the fact that we have ---

4215 COMMISSIONER MOLNAR: They’re both -- go ahead.

4216 MR. CARON: We have reduced costs because we’re running two stations with one of each. So we have on general manager. We have one sales manager. If we got rid of one of the stations, I can’t get rid of the general -- well, they can get rid of, that’s me -- but they can get rid ---

4217 COMMISSIONER MOLNAR: But, I mean, there’s fixed costs. There’s variable costs. Your total cost and thus your total loss within Thunder Bay would be more or less with one station?

4218 MR. CARON: With one station our loss would be greater.

4219 COMMISSIONER MOLNAR: Your loss would be greater?

4220 MR. CARON: Yes, because we have the additional revenue from the second station which helps to offset the cost -- the common costs of running the combined operation. So if you get rid of one of the stations, we don’t get rid of all the costs; we get rid of, as Glenda said, perhaps 20 percent of our costs. And the other 80 percent stays. The fixed costs stay the same. We have the same building. We have the same hydro. We have the same taxes. We have the same insurance.

4221 COMMISSIONER MOLNAR: It’s just a bit confusing to me if revenues do not cover costs, more of them doesn’t normally cause the overall cost to be less.

4222 MR. CARON: But if you -- the reason that our loss is reduced by running two is because, as I say, it’s an economy of scale. We don’t need all the services if we’re -- or we need all the services to run both or we need all the services to run one. So by getting rid of the revenue form the second station, you’ve got less revenue to cover the existing variable, fixed and other costs.

4223 So the word is economy of scale. That’s exactly what it is.

4224 COMMISSIONER MOLNAR: Well ---

4225 MR. CARON: It’s the reverse to what you’re thinking.

4226 COMMISSIONER MOLNAR: --- you know, I promise you I understand well the concept of economies of scale, but economies of scale tend to not work so well in an environment where revenue does not cover costs.

4227 So I mean, so your revenue covers your variable costs ---

4228 MR. CARON: Yes, absolutely.

4229 COMMISSIONER MOLNAR: --- on both stations and it’s your fixed costs, and so that’s what you’re saying? Absent any subsidy, revenues cover variable costs. It’s simply your fixed costs?

4230 MS. SPENRATH: Yeah, it’s your fixed costs that you can’t pro rata cut when you cut a station. So if you cut a station and your revenue drops by 40 percent, that doesn’t mean that your fixed costs dropped by 40 percent.

4231 COMMISSIONER MOLNAR: Would it be fair to ask as an undertaking that you look at what would happen to that 20 million if there was a limit of one presence, one station per small market that you serve?

4232 MS. SPENRATH: Yes, we can look at that as an undertaking.

4233 MR. CARON: Commissioner Molnar, we haven’t talked about allocation formula. Obviously there’s many different ways we could propose allocation formulas. So depending on the allocation formula, it may or may not be a material impact. So we can try different formulas, if you like, but there’s not going to be a set answer to that question.

4234 M. SIMARD: Madame Molnar, est-ce que je pourrais simplement rajouter un exemple pratique? Prenons la salle des nouvelles. Actuellement, notre organisation a 34 personnes qui travaillent uniquement à la salle des nouvelles. Les nouvellistes, le réalisateur, les caméramans. Si, demain matin, nous n’avions qu’une seule station, pour continuer à donner une qualité de services journalistiques, de produire un bulletin de nouvelles, possiblement que nous pourrions peut-être avoir 30 personnes. Nous devrions diminuer peut-être juste de quatre à cinq personnes et conserver au moins une trentaine de personnes pour continuer à donner la même qualité, la même couverture de nouvelles que nous couvrons actuellement.

4235 COMMISSIONER MOLNAR: The funny thing about how the broadcast system exists today is it’s obviously evolved over time, and so there’s some markets that have a lot of service, some that don’t, some that arguably have very little. We heard of Oakville and wanting to put a BDU news program into Oakville, quite a large community. It certainly isn’t served by three local stations and 39 news reporters.

4236 So there’s a lot of differences, and I don’t discount that there are consequences to moving to one, but there’s a subsidy being requested and that changes the nature of service.

4237 So anyway, if you could do the undertaking I would appreciate that.

4238 MR. ARNISH: We will. Thank you.

4239 Undertaking

4240 COMMISSIONER MOLNAR: Thank you.

4241 I want to just speak a bit about community programming. In the comments you provided to us, you took quite a hard line about community, and I believe when I read your opening remarks you’ve pretty much maintained that position.

4242 You said in your submission that where local TV stations exist, community stations should not be subsidized. What do you mean by subsidy?

4243 MR. ARNISH: Well, we believe that the subsidy is what the parent company -- if it’s a cable company, for example -- receives through the 2 percent of the 5 percent of the subscription fees that go into the local community channel.

4244 COMMISSIONER MOLNAR: Okay. So it should not be funded?

4245 MR. ARNISH: Well, I don’t think we’re necessarily saying it shouldn’t be funded, but I guess there’s a question to be made as well. Do community channels continue to serve the community like they once did?

4246 Personally, I don’t really know. I watch our local community channel from time to time and it isn’t the same community channel that it used to be many, many years ago. Yes, we’re doing things different as well as a conventional small market TV station, but our conduit to the community is not, as I said earlier, just not local news and reflection. It’s everything else that we do in the community, and we’re saying that the envelope that’s there -- and may be at the end of the day there will be no envelopes or maybe they’ll be two or three different envelopes. You know, we don’t know. But we’re suggesting that through that 2 percent, if we can have access to what we’re calling a sustainability fund to continue to provide the local programming in our marketplaces, you know, I mean we are the conduits for the communities for many, many reasons.

4247 And I think that the vertically integrated companies, my own personal opinion of cutback in smaller markets, have centralized a lot of their operations in a major market and have produced a lot of really good programming in those markets that’s fed out to the regions.

4248 COMMISSIONER MOLNAR: CHCH, when they were here earlier, they spoke of a long-term solution where broadcasters could actually play a greater role in community access and reflection. I don’t know if you were able to hear their intervention or see their intervention. Yes, no?

4249 MR. ARNISH: Sorry, I wasn’t here. I don’t know if anybody has any comments on that.

4250 COMMISSIONER MOLNAR: Okay. Well, I would encourage you to look at what they suggested. It might be a longer term, that there might be a way to partner together conventional local market stations and community access in a way that you could serve the needs of the -- of the local community both for access programming as well as your, you know, traditional news and professional programming provided through the conventional.

4251 So rather than me asking you questions about something you aren’t aware of, maybe I’ll just encourage you to take a look at that and address it in your replies or final comments.

4252 MR. GERMAIN: I would suggest that we would be prepared to look at that proposal and particularly in communities like Nanaimo and Courtenay, where we have bureaus but also Victoria.

4253 Undertaking

4254 M. SIMARD: Madame Molnar, est-ce que je pourrais ajouter une réflexion?

4255 Tout d’abord, il y a un point qui est extrêmement important. Dans des régions comme l’est du Québec, la cablodistribution rejoint à peu près 55 pour cent de l’auditoire.

4256 Donc déjà, on a de 40 à 45 pour cent de l’auditoire qui ne reçoit aucun canal communautaire, parce qu’ils ne sont pas distribués sur les DTH, parce qu’ils ne sont pas distribués sur certains cablo-IP et parce que, évidemment, ils n’ont pas de signal off-air.

4257 Lorsque vous nous demandiez -- vous parliez du montant que nous réclamons, le 20 million, tous ensemble, les SMITS, on a fait un travail suivant. On a calculé à chaque semaine, à chaque mois quelles périodes de temps disponibles nous laissaient les réseaux de télévision.

4258 Dans une semaine de radiodiffusion, il y a une disponibilité de 33 heures -- en dehors de la programmation, il y a une disponibilité de 33 heures de minutes disponibles par station. Si on estime qu’il y a 12 minutes à l’heure de publicité, on a 33 heures de disponibles pour diffuser notre publicité.

4259 On peut dire que du moins dans les marchés du Québec, environ 70, 65 -- 60, 65, 70 pour cent selon les temps de l’année sont utilisés pour diffuser de la publicité.

4260 Il reste 12 heures à chaque semaine de temps disponible pour diffuser des messages communautaires. Tous ensemble, c’est ce que nous faisons.

4261 Lorsque nous n’avons pas de publicité, nous utilisons notre temps commercial pour diffuser toutes les sortes de messages communautaires à la population gratuites.

4262 En mettant le prix d’une annonce normale, locale, nous avons estimé que tous ensemble, les SMITS, on donnait à la communauté 20 million, que l’on donne gratuitement dans nos temps disponibles à l’ensemble de notre population.

4263 Ces messages sont particulièrement des messages communautaires; des gens qui veulent ramasser de l’argent pour agrandir l’aréna; d’autres personnes qui veulent agrandir la patinoire. Pour toutes sortes de raisons.

4264 Alors la somme d’argent que nous vous demandons comme par hasard est redonnée -- pour nous aider à produire nos nouvelles, le 20 million est compensé par la même somme d’argent que tous ensemble on redonne à la communauté gratuitement avec des messages non seulement le jour mais en heure de grande écoute, ce qui apporte à nos communautés une exposition extraordinaire.

4265 À titre d’exemple, un groupe communautaire peut vouloir essayer de trouver de l’argent pour aider des personnes démunies juste avant le Téléjournal de Radio-Canada, juste avant les Nouvelles TVA. Si on a un espace disponible, on le met gratuitement à la disponibilité de la communauté.

4266 On a toujours fait ça. C’est ce qu’on fait régulièrement. C’est peut-être pour ça que les communautés, les gens dans les petits marchés se sentent si proches de nos stations. C’est peut-être pour ça qu’on est peut-être en réalité aussi un peu une station commerciale mais je dirais aussi avec -- on pourrait la qualifier de communautaire, compte tenu de tous les services gratuits, quotidiens que l’on diffuse sur nos ondes.

4267 COMMISSIONER MOLNAR: Thank you.

4268 I appreciate your comments and I encourage you in your final comments, you know, to do that. And I know that some of my questions were harsh and my intent wasn’t to, in any way, diminish the contributions you make in your communities.

4269 So those are my questions.

4270 THE CHAIRPERSON: Thank you.

4271 Just to be clear, I’ve counted at least three, but there may be a few more, undertakings that you took with Commissioner Molnar. Just to be clear that those will be due for the 5th of February. We can look at the transcript to see how many there are but certainly the detailed calculation, the 20 million; how each of you -- what’s your commitment, is it to maintain or increase your commitments to local; and thirdly, what happens to the -- do the hypothesis of only a single stick in each market.

4272 And there may be others but those are the three I picked up. So that’s for the 5th of February.

4273 I believe those are the questions from Commissioners, and mine is not so much a question as an invitation in your final reply before I pass it to legal.

4274 You know, we have a parliamentary mandate, a legislative mandate, and I would ask you to reflect on are we here, on the one hand, to guarantee your business model or the return on your investment or are we not more properly here to be concerned about an outcome for Canadians?

4275 And sometimes I wonder if we’re not trying to dance on two things when we should really be focusing on one.

4276 Legal?

4277 MS. FISHER: Thank you, Mr. Chair.

4278 My question again with respect to Exhibit 1 that was placed on the record on Monday, and I need this undertaking for each of the parties that’s represented here.

4279 So if we could maybe start with, I believe it’s Rob at the far end and just confirm the undertaking as we go across.

4280 So we ask that you’d undertake to provide responses, as applicable to that Exhibit for your undertaking by the 15th of February.

4281 MR. GERMAIN: Yes.

4282 MS. FISHER: We’ll work our way across the table.

4283 MR. RANGER: Yes.

4284 MS. SPENRATH: Yes, I do.

4285 MR. ARNISH: Yes.

4286 MR. SIMARD: Yes.

4287 MR. CARON: Yes.

4288 MR. THIESSEN: And yes.

4289 Undertaking

4290 MS. FISHER: And the back row.

4291 M. SIMARD: Monsieur le président, est-ce que je pourrais prendre 30 secondes.

4292 THE CHAIRPERSON: I don’t think there are any undertakings sitting in the back row. So we’re okay on that.

4293 MS. FISHER: Oh, none in the back. Okay, good.

4294 THE CHAIRPERSON: That I can tell unless -- well, they can obviously help as consultants the people who’ve just answered “yes” in the front row.

4295 Okay.

4296 MS. FISHER: Thank you.

4297 THE CHAIRPERSON: That’s it?

4298 MS. FISHER: Yes.

4299 LE PRÉSIDENT: Oui, Monsieur Simard?

4300 M. SIMARD: Monsieur le président, écoutez, vous avez en avant de vous, ici, les représentants des deux grandes communautés linguistiques du Canada représentées par nos amis anglophones et Robert et moi du côté francophone.

4301 On a travaillé presque 15 ans ensemble. Ça été une expérience enrichissante mais j’aimerais souligner principalement notre président, Rick Arnish, qui a été un ardent défenseur des petites stations locales, en ardent défenseur des nouvelles locales.

4302 Et là-dessus, je voudrais simplement vous dire, Monsieur le président, qu’on considère Rick comme un vrai Canadien, un grand Canadien.

4303 Merci.

4304 THE CHAIRPERSON: Well, as Commissioner Molnar pointed out upfront, we are of course surprised to see Mr. Arnish at our hearing because we, including myself, had thought that he had in fact retired. We were happy to see him and certainly do agree with you, Monsieur Simard, of his contribution to Canadian broadcasting. So thank you.

4305 That doesn’t mean we put more weight on your evidence than anybody else.

(LAUGHTER)

4306 MR. ARNISH: Absolutely. Thank you for your kind words and thank you, Marc Simard, I’m very humbled.

4307 THE CHAIRPERSON: So our next presenter was actually -- because he’s the local fire chief called away to a fire, so -- it may be a news opportunity for some of you.

(LAUGHTER)

4308 MR. ARNISH: Mr. Chair, just before you go there, Mr. Caron would like to have just a couple of moments if that’s possible.

4309 THE CHAIRPERSON: Ah, sure. Okay.

4310 MR. CARON: Thank you for listening to me, Mr. Chair. I just want to comment on Thunder Bay Electronics, just for the record, so you understand the complexity that I face in the next short while.

4311 We’ve been in business over 60 years, and our owner was very, very proud of the station that he ran, and unfortunately he passed away on August 12th of last year.

4312 But our scenario is such that it’s -- probably we’re the most desperate of the stations that are sitting here in front of you at this point. We have no other revenue to support us. Yes, we have radio, I mean I will comment on that in a second, but we have reached the point where our -- because of the state of our national revenue and the fact that we are so closely tied to the -- to the mark that we cannot compete against.

4313 We’re in a position where we, at present, are operating on the profits of the radio station which we are directing towards television. Television, by the way, covers an area bigger than the size of France. We’re the only broadcaster that provides television for North Western Ontario.

4314 The reason that we’re still in business and we’re still operating, is the fact that we unfortunately had a general manager and an owner who passed away in the last year, and the company had a fairly significant life policies on them. And the reason we’re still operating is that we’re burning those non-broadcast assets to stay in business awaiting to see if there's some way we can work out -- and the Commission can hear our plight of angst, if you will.

4315 And I just want to make it aware that I’m struggling to stay in the business till September, and if it goes beyond that, then I really have no choice but consider shutting the whole place down, which will blackened Northern Ontario. And I’m not doing that as a threat, I’m telling you the realities of the financial scenario we face at this point.

4316 So I just wanted you to be aware that we are the smallest of the small, and when something goes soft like it does, we have no way of subsidizing it except through non-broadcast assets, which we’re not prepared -- the owner, his wife who is now the owner, is not prepared to let me keep spending that money forever.

4317 THE CHAIRPERSON: Okay. Well, we have access to your confidential numbers, so we’re well aware of the situation, Monsieur Caron, and I appreciate that.

4318 MR. CARON: Thank you very much.

4319 THE CHAIRPERSON: And any other comments you wish to make, you’ll have further reply stages to do that.

4320 Right now, I want to adjourn this morning session till 1:30. And at that point we will hear from Independent Community Television. And because as I said, Mr. Sabulsky has been called to a fire, so there we go. Thank you.

4321 Nous sommes ajournés.

--- Upon recessing at 12:21 p.m.

--- Upon resuming at 1:32 p.m.

4322 LE PRÉSIDENT: À l'ordre, s'il vous plait.

4323 Madame la secrétaire.

4324 LA SECRÉTAIRE: Merci. We’ll now hear the presentation of the Independent Community Television, ICTV Montreal. Please introduce yourself and your colleagues, and you have 10 minutes.

4325 LE PRÉSIDENT: Juste avant que vous commencez, je veux -- puisque j’ai eu la chance de regarder les documents qui vont être la base de votre présentation, je veux juste vous prévenir qu’on est -- nous ne sommes pas ici pour instruire une instance sur la conformité ou la non-conformité d’une EDR en particulier. On est ici pour avoir une discussion de politique publique plus large en équité pour les parties, donc le dossier est pas complété. Donc faites attention de ce côté-là, parce que je -- va falloir que je vous remettre à l’ordre.

4326 Et puisque vous êtes des experts en communication, vous savez qu’on a des lois sur la diffamation au pays aussi. Donc je vous invite de faire attention et de bien peser vos mots dans votre -- dans votre présentation, parce que le Conseil pourra pas vous protéger d’action en diffamation. Donc vous êtes maître et responsable de vos commentaires.

4327 Alors allez-y, s’il vous plait.

PRESENTATION

4328 M. COUTURE: Bonjour, good day. Mon nom est Stéphane Couture, je suis secrétaire-trésorier pour la télévision communautaire indépendante de Montréal, et je représente les institutions d’enseignement au sein du conseil d’administration. Je suis docteur en communication, actuellement chercheur dans ce domaine à l’Université McGill. Mes recherches portent de manière générale sur l’usage des technologies et des médias numériques, en particulier par les groupes de la société civile, autant au Québec qu’ailleurs dans le monde. J’ai notamment publié en 2008 l’ouvrage “L’action communautaire québécoise à l’ère du numérique” qu’y a été publié aux Presses de l’Université du Québec.

4329 Mme GUAY: Mon nom est Lorraine Guay, je suis membre du Conseil d’administration de TV communautaire indépendante. Je suis une infirmière récemment retraitée. Je suis issue et représente les milieux communautaires et syndicaux. Entre autre, parce que j’ai travaillé presque toute ma vie dans des milieux communautaires, entre autre à la Clinique communautaire de Pointe-Saint-Charles, un quartier ouvrier de Montréal qu’y est à l’origine d’ailleurs des CLSC de la base du système de santé québécois, et aussi à l’Institut de réadaptation.

4330 J’ai travaillé en particulier dans le regroupement avec les ressources alternatives en santé mentale du Québec, et avec un ensemble de regroupement -- une coalition de regroupements provinciaux communautaires et bénévoles au Québec. Je milite aussi depuis une vingtaine d’années, compte-tenu de mon grand âge, à la Fédération des femmes du Québec, et dans de nombreux mouvements de solidarité internationale.

4331 Je rappelle simplement aussi que le milieu communautaire au Québec, milieu communautaire autonome et milieu communautaire « at large », il y a quand même un mouvement très, très multiple, très pluriel et très organisé aussi. On compte environ tout près de 10 000 organisations communautaires au Québec.

4332 M. KHAN: Bonjour, commissaires, je m’appelle Jooneed Khan et je suis membre du Conseil de TVCI au Québec. Après des études universitaires au Canada, grâce à une bourse du Commonwealth de ‘64 à ‘68, j’ai immigré au Canada en ‘70 et j’ai fait toute ma carrière dans le domaine du journalisme, avec des activités parallèles dans le monde de l’enseignement universitaire.

4333 J’ai d’abord travaillé pour le département Nouvelles Télé-Radio de l’agence Presse canadienne, PC, avant de passer au quotidien La Presse en ‘74, où j’ai exercé comme chroniqueur de politique internationale depuis ‘76 jusqu’à ma retraite en 2009.

4334 À ce titre, j’ai effectué des reportages de guerre et de crise dans une soixantaine de pays. Employé attitré du groupe de presse Gesca, j’ai aussi collaboré bénévolement avec les radios communautaires et universitaires de Montréal, ce que je continue de faire dans ma retraite, tout en écrivant comme journaliste pour des publications et des webzines, et tout en travaillant sur des projets de livres.

4335 MR. BERTRAND: Hi, my name is Stephane Bertrand. I am the Vice-President on the Board

4336 of ICTV representing disability community. I am the founder of the Avalanche at CKUT, and the disability-only news program on the FM dial in Montreal. I’m the Equity Officer member of the NCRA Campus Community Radio Association and on the board, where I created a handbook to making community media more accessible.

4337 I’m here today to tell the Commissioners TV -- community TV should stay with the community.

4338 MR. MAROUF: Bonjour, hello. I’m Laith Marouf, and I’m the Policy Consultant and Project

4339 Coordinator for ICTV Montreal. I’m also an award-winning Community Television and Radio producer, who has worked with the community sector for over 15 years.

4340 Good day, Chairman Blais and Commissioners Molnar, Simpson, Dupras and MacDonald. Before we begin our presentation, let us acknowledge that we are speaking today on Algonquin territory. We emphasize that it is our collective responsibility as media producers and regulators, to acknowledge this history and the ongoing struggles of Indigenous peoples to be heard.

4341 M. KHAN: La TVCI est une organisation sans but lucratif vouée à la promotion de la télévision communautaire au Québec, et à l’obtention d’une licence d’opération pour une station sans but lucratif de télévision communautaire multiculturelle et multilingue desservant la région de Montréal.

4342 En tenant à l’esprit la précision du Commissaire président, je voudrais simplement souligner que si je parle ici, j’insiste sur cet aspect de notre demande, c’est que nous considérons que la télévision communautaire mérite certainement meilleur traitement, un meilleur respect dans le cadre de la législation canadienne et des règlements du CRTC et nous ne demandons qu’à faire notre part pour promouvoir cela et c’est pour cette raison que nous insistons sur cet aspect de la télévision communautaire multiculturelle, multilingue, pour Montréal.

4343 Nous avons le soutien de centaines de communautés dans toute la province et nous avons un conseil d’administration qui représente divers secteurs de la société et qui est composé de leaders communautaires, de créateurs médiatiques et d’organisateurs parmi les plus en vue au Québec.

4344 Quand TVCI a déposé une plainte de non-conformité contre MAtv Montréal en 2015, le CRTC a confirmé notre évaluation de la situation. La Commission a alors accordé à MAtv Montréal un délai pour se mettre en conformité, délai que le canal n’a pas respecté.

4345 TVCI a institué depuis un recours collectif au nom de consommateurs de Vidéotron pour réclamer des fonds mal utilisés et faire valoir les droits brimés des communautés linguistiques, ethniques et autochtones reconnues par la Charte.

4346 TVCI a aussi déposé, en novembre 2015, une plainte contre MAtv dans huit des neuf zones qu’il dessert. Cette plainte a découlé d’une analyse faite à l’échelle du Québec qui a démontré que tous les canaux de MAtv, sauf un, étaient en non-conformité avec la réglementation relative à la TV communautaire.

4347 Nous estimons que la Commission va trouver que Vidéotron est une fois de plus en situation de non-conformité et nous espérons que cette fois, le CRTC appliquera la clause de sauvegarde dans le cas d’une entreprise de distribution de radiodiffusion qui exploite une station d’accès en non-conformité avec ses directives en octroyant la licence et le financement à une organisation sans but lucratif qui opèrera la station en totale conformité avec ses règlements.

4348 MR. MAROUF: We are here today because the Commission is reviewing community television regulation along with local content production needs.

4349 ICTV understands that the Commission is interested in delivering on the findings of Let’s Talk TV which indicated that the Canadian public wants more local news, which is the most watched Canadian content.

4350 ICTV is alarmed at the atmosphere surrounding these hearings. The CRTC framed the review as emanating from the 2014 Let’s Talk TV consultations. At the consultations, the television providers, BDUs, suggested that they are losing customers and revenues to internet and cellular providers.

4351 BDUs have already successfully lobbied the CRTC to remove mandatory funding to local Canadian content and during Let’s Talk TV they complained they do not have enough money to fund this content.

4352 This comes at the tail of eliminating over-the-air free television for most Canadians in 2012.

4353 Let’s Talk TV was unfortunately tainted with this false argument of failing revenues caused by the rise of the Netflix era.

4354 In reality, the same BDUs who own cable and satellite distributors also own the internet and cellular providers. Canadian consumers are still watching television. Around half are now consuming it on a new platform and paying the same distributors who own all platforms, exuberant amounts for content that they used to receive sometimes for free.

4355 Canadians pay one of the highest prices for some of the worst internet and cellular services in the world. BDUs are having their cake and eating it too. BDUs have pushed Canadian consumers off over-the-air television and then cut contributions for local content, minimizing the distinctness of this programming and reducing the appeal to Canadian consumers. They then watched consumers migrate to the internet for content and laughed as they gauged the prices.

4356 ICTV is especially concerned about the prospect that community television contributions could be diverted to the production of local news and programming at stations under the control of BDUs.

4357 Last November, the Superior Court in Quebec ruled on a class action lawsuit against Videotron for defrauding the consumers and the Commission in regards to contributions collected for the Local Programming Improvements Fund levied between 2009 and 2014.

4358 The Court found that Videotron had overcharged customers, underreported to the Commission and pocketed the difference for its own benefit.

4359 ICTV believes that our class action in regards to the community content contributions will also find the same has been happening in regards to that.

4360 Videotron is not an anomaly; it is the standard in the BDU landscape. For decades, BDUs have been accustomed to collecting funds and distributing them at will, with no one watching or verifying their actual claims. We have seen in the case of Videotron v. ICTV that they have been purposefully misreporting the programming on their community access channel, MATV, and we have no way to verify their financial expenditures claimed.

4361 For all we know, Videontron could be pocketing the majority of funds collected for community television and only spending a fraction of it while claiming compliance.

4362 ICTV believes that a repeated offender of law and defrauder of the consumers and the Commission cannot be expected to behave differently if they have yet to be held accountable for their violations.

4363 Throwing more money at them now will only embolden them to commit more theft and fraud.

4364 Mme GUAY: Si le CRTC est vraiment intéressé à la bonne santé de la production médiatique canadienne, nous pensons que cet organisme doit maintenir tous les niveaux d’exigence de financement envers les entreprises de distribution de radiodiffusion pour ce qui est de la télévision communautaire, qu’il doit aussi rétablir les contributions obligatoires en ce qui concerne le contenu local des émissions, de même qu’étendre ces exigences à internet et aux fournisseurs de cellulaires.

4365 C’est seulement en obligeant toutes les plateformes télévisuelles à contribuer à la création d’un contenu canadien, local et communautaire, que nous pourrons maintenir notre identité distincte et la santé de notre démocratie en cette ère de mondialisation des médias par rapport aux plateformes numériques comme internet.

4366 Nous pensons aussi que le CRTC doit mettre fin à cette mascarade que constitue le contrôle des entreprises de diffusion de radiodiffusion -- pour nous c’est Vidéotron -- sur la télévision communautaire.

4367 Non seulement ces entreprises n’ont-elles pas respecté les règles en vigueur dans le secteur, mais elles ont dilapidé d’immenses montants d’argent affectés au bien public. Plus de 150 millions sont, soit disant, alloués annuellement par ces entreprises à la télévision communautaire.

4368 Or, nous ne pouvons rendre compte d’aucun impact de cet argent sur la participation citoyenne à la télévision. Nous ne pouvons même pas vérifier que cet argent a été dépensé correctement, compte tenu que ces entreprises ne sont pas tenues de présenter des rapports financiers vérifiés des budgets de leurs canaux communautaires.

4369 La situation de non-conformité de ces entreprises qui perdure depuis très longtemps concernant les exigences de programmation locale et de programmation d’accès jouxtés à l’absence d’une programmation de télévision communautaire qui reflète adéquatement la composition linguistique, ethnique et autochtone des communautés qu’elles desservent, sont des faits qui minent, selon nous, la crédibilité du CRTC et l’histoire sociale de ce pays dont les obligations en matière de radiodiffusion ont été définies dans la Loi sur la radiodiffusion qui date déjà depuis 1991.

4370 MR. MAROUF: It is our understanding that the Commission is interested in guaranteeing the availability of local news to Canadian viewers. We believe that non-profit controlled community television can provide local news that would be popular and can even outperform the private sector and BDU community television.

4371 Case in point is the 2012 Quebec Spring live broadcast by Concordia University television, CUTV. The community station produced hundreds of hours of high quality live broadcast from the streets of the Quebec Spring. Over 100,000 viewers streamed the broadcasts per day and academic studies proved that the station had more influence on viewer opinions than all the mainstream television news producers combined in Quebec.

4372 At one point in 2012, most private and public stations stole the feed of CUTV and ran it with no compensation for or credit to the station. After BBC, CNN and Al Jazeera did the same, CUTV requested financial compensation and only received it from CBC/RDI. Corporate and foreign broadcasters refused to pay for the use of the community’s copyrighted content.

4373 Another example of how community television news content produced by and for the community can outperform the private sector also comes from the case of CUTV. At the end of the Maple Spring, as it was called, and the fall of the Charest government in the province, CUTV aired the first-ever all-women -- all-female candidate debate in the history of Quebec. The broadcast was organized in collaboration with the Fédération des Femmes du Québec. And a few days later the station aired the only English-language candidate debate in the most important Quebec election in 20 years.

4374 In both cases the broadcasts guaranteed tens of thousands of simultaneous viewers online -- garnered -- and would have had even more viewership if CUTV was carried on-air and on BDUs as a non-profit community station.

4375 M. COUTURE: En s’appuyant sur ces expériences au Québec, notre groupe, TVCI, recommande les modifications règlementaires suivantes.

4376 D’abord, en demandant une simple auto-évaluation annuelle et une revue de la licence à tous les sept ans, la CTRC n’est actuellement pas en mesure de surveiller adéquatement la conformité des entreprises de distribution de radiodiffusion vis-à-vis la politique de télévision communautaire.

4377 Par exemple, pour certaines EDR, comme Vidéotron au Québec, la révision de la licence a été retardée de presque cinq ans. De plus, c’est actuellement au public que revient le fardeau de surveiller et éventuellement se plaindre des performances problématiques des EDR en matière de télévision communautaire. Et même dans les cas où des groupes du public ou communautaires investissent temps et argent pour déposer une plainte et prouver la conformité d’une EDR, comme ce fût le cas de TVCI contre MAtv, le CRTC échoue à reconnaître la valeur d’une télévision gérée de manière non-lucrative.

4378 La politique révisée devrait mandater le transfert d’une licence de télévision communautaire pour toute EDR qui échoue à répondre aux exigences du CRTC en la matière.

4379 De plus, les faiblesses de la politique actuelle en ce qui concerne sa mise en application et l’imputabilité, permettent une culture de non-conformité dans le paysage des canaux d’accès communautaires des EDR. Plusieurs millions de dollars du public qui sont dédiés annuellement pour le contenu d’accès communautaire ont été mal utilisés depuis des décennies par les EDR.

4380 Jusqu’à présent, cependant, le CRTC ne s’est pas montré disposé à rendre quiconque imputable de cette situation. Nous espérons que la révision de la politique ne conduira pas à récompenser les EDR pour leur incapacité à respecter la politique de la télévision communautaire. TVCI est opposé à laisser les EDR dépenser de l’argent public dédié à la télévision communautaire ou à la production de contenu local si la communauté n’a ni pouvoir, ni aucun mot à dire pour vérifier ses dépenses ou de s’assurer que les décisions prises soient imputables.

4381 TVCI réitère finalement l’importance des nouvelles locale et d’une programmation communautaire pour satisfaire la Loi sur la radiodiffusion. Cette loi, rappelons-le, affirme que la santé de notre démocratie dépend de trois secteurs distincts et pérennes des médias, soit les diffuseurs publics, privés et communautaires.

4382 La télévision communautaire est supposée permettre d’offrir une plateforme pour les communautés pour développer des compétences en production tout en créant du contenu qui les représente. Les meilleures pratiques en matière de télévision communautaire permettent d'offrir un contrepoids à la fois aux visions gouvernementales diffusées dans les médias publics et celles des pouvoirs corporatifs diffusés dans les médias privés. Si le financement de la télévision communautaire cesse ou diminue en même temps que les EDR continuent d’utiliser cette argent à des fins communautaires, les communautés à travers le Canada n’auront plus accès au système de radiodiffusion pour exprimer leur voix et leur version de l’histoire.

4383 MR. MAROUF: We thank you for listening to ICTV’s oral presentation and for your work examining our intervention and we look forward to your questions and to continuing the conversations today.

4384 LE PRÉSIDENT: Merci beaucoup.

4385 Et à l’instaure de votre présentation dans les deux langues officielles, je vais, moi aussi, aller d’une langue à l’autre, mais sentez-vous à l’aise de répondre dans la langue que vous préférez -- bien, dans une des langues officielles du pays que vous préférez utiliser. Si on va au-delà de ça, je ne pourrai pas vous suivre.

4386 Would it be fair to summarize your position -- and I’m looking at paragraph 21 of your presentation, for instance, this afternoon where you say -- vous recommandez les modifications réglementaires suivantes.

4387 But when I read them carefully, it seems to me that you’re not so much requesting changes in the existing policy, but what you are looking for is perhaps more rigour in terms of enforcement.

4388 En autres termes, ce que vous cherchez plus c’est la mise en application plutôt que des changements dans la politique comme telle. J’imagine qu’on peut dire que c’est un changement à la politique, mais c’est pas les normes réglementaires qui changeraient, à votre avis. Est-ce que c’est juste?

4389 MR. MAROUF: In our submission, maybe if it’s not clear here, in our submission we requested that community television licences be given to non-profits.

4390 Currently the main problem is that BDUs have first dibs over the community television licence and there’s practically never been any BDU that’s been held responsible for their non-compliance in terms of the community television.

4391 And so it is -- it stands out as if it is impossible to hold a BDU accountable. We know that from the community radio sector, for instance, the CRTC, whenever a community radio station violates the policy of community radio, is very quick on delicensing a non-compliance station.

4392 THE CHAIRPERSON: I’m not sure about the “very quick”. But anyhow, I take your point.

4393 MR. MAROUF: We have the case of CKLN in Toronto, which was one of the oldest community radio stations that lost its station within nine months of it being found in non-compliance.

4394 So now we have in this ---

4395 THE CHAIRPERSON: There was a lot of history before that.

4396 MR. MAROUF: Yes, but we have also a history of 20 years of BDUs standing in violations of the regulation and not delivering on compliance.

4397 So when does it -- how long and how many generations does it take to hold these BDUs in compliance?

4398 So what’s -- the easiest solution is to actually stand for the word “community” and give communities the control of their stations in order to be able to deliver on the Act -- the Broadcast Act which says that community broadcasters are one of the three pillars.

4399 You cannot have a complete Broadcast Act and/or real democracy if there is no separation between community broadcasters and private broadcasters who already have the biggest piece of the cake in terms of our air space and numbers of channels.

4400 So the community has only one channel and at this moment is hostage to the BDUs who are -- have been wasting the money and not delivering on the actual targets of what a community television station is supposed to do.

4401 LE PRÉSIDENT: Oui, Madame?

4402 Mme GUAY: Si je peux me permettre, peut-être qu’il y a une compréhension différente de ce qu’est le secteur communautaire aussi. Ça, c’est quand même assez important dans le sens où nous ne sommes pas du secteur privé. Nous ne le serons jamais. Nous ne sommes pas du secteur public non plus. Nous ne le serons pas. Nous sommes d’un secteur communautaire qui est d’intérêt public par ailleurs -- intérêt public, mais qui est un secteur où a émergé dans les 20-30 dernières années, des générations de jeunes citoyens pour qui la démocratie participative c’est une valeur fondamentale, dans tous les aspects de leur vie.

4403 Donc pas juste une démocratie de représentation ou d’experts qui parle en notre nom, mais qui vient chercher les savoirs de ces communautés-là, de ce secteur communautaire dans lequel y’existe de véritable expertises, de véritable savoir, des types d’organisations, des pratiques, des fonctionnements.

4404 Quand je disais tout à l’heure au Québec, y’a près de 10,000 organisations communautaires de cet ordre-là, qui sont dans ce que certains appelle le tiers secteur, justement, qui n’est ni privé, ni public, mais qui a un potentiel extraordinaire ou -- de capacité d’organisation.

4405 Alors pour nous de confier ce -- les médias qui relèveraient de ce secteur-là au secteur privé, y’a là comme une contradiction, comme une non-reconnaissance à tout le moins, de l’expertise réelle, aussi professionnelle que des autres secteurs et qui peut très bien être exploré par des télévisions communautaires à but non-lucratifs inclusive, démocratique, et cetera, et qui répondent aux besoins des groupes en question.

4406 LE PRÉSIDENT: Merci pour ces précisions parce que j’avais lu votre soumission écrite, puis je voyais d’emphase dans votre soumission verbale ce matin -- c’est après-midi, pardon.

4407 Et vous savez nos instances sont évolutives, des fois les parties prennent des positions au début puis y’ont changé.

4408 Donc je voulais juste m’assurer que ce que j’avais bien compris était votre position, même si vous ne l’avez pas souligné ici dans votre présentation, ça demeure quand même -- vous demandez quand même un changement assez important à la politique.

4409 C’est-à-dire que en premier lieu les fournisseurs d’un canal communautaire devraient être issus de la communauté dont vous représenté. Une portion, c’est ça?

4410 MR. KHAN: With your permission, let me say I have worked both for the corporate media and for community media.

4411 And from inside I can assure you and I’m sure you know that already, the corporate media has resources, has tools, has filters to present news, commentary, in its way.

4412 And the corporate media can try its level best, it will never present community news and community thought and community ideas in the way that the community would want to present.

4413 And this is especially true now that we have almost reached the end of the first fifth of the 21st century. There are movements worldwide of citizen awakening and citizen participation, accessibility to myriads and myriads of news sources.

4414 The public is not hostage anymore to the corporate media as it was when I was a professional journalist in my heyday.

4415 When you had to get your newspaper in the morning to know what was happening in the world. Where you had to be sitting at six o’clock in front of your T.V. to know what had happened in the day.

4416 Now thanks to the internet and all other form of cellular, Wi-Fi, instant communication, people can be informed much better. In some cases maybe there is a lack of information. There is not sometimes enough preparation to sift the grain from the chaff.

4417 That is also a reality, but the point is that the community, I think, needs to speak for itself, and to run its own media and train its own personnel.

4418 And for a city like Montreal, where we are well, well beyond bilingualism in terms of everyday reality, I would say as a professional journalist and somebody who is active in community media as well, I think it is more than time.

4419 I think the CRTC could give great push forward to the whole concept of community media of which I am told by a well-informed colleagues that Canada has been a leader in the world, globally, since 30-40 years ago. Thank you.

4420 THE CHAIRPERSON: Well thank you. So in that spirit of maybe making more space for the community voice in our policies, I take it therefore that you’re not -- you don’t think that the access portion meets the policy objectives that you want to achieve.

4421 I was wondering whether you would support broadly the position of CACTUS in their vision of community voices? Broad strokes; you may have disagreements with specifics, but broad strokes.

4422 MR. MAROUF: CACTUS is putting forward a good concept of number one a safeguarding that this money stays within the non-profit sector.

4423 And -- and they are mixing it with the reality that most media right now is multimedia. There is obviously -- in different places there is different organisations that are ready to serve that goal of providing a multimedia production and broadcast hub.

4424 So in cities that have already a very strong community radio station it is very easy to expand on that and, you know, give the training and skill sharing for a television production and go on air from there.

4425 I -- in other places that don’t have that, obviously there should be found some other solutions. But the point is the idea that needs to be made sure is that we cannot have a strong third pillar of the broadcast act when it is not independent in the hands of community non-profits.

4426 Where that money could be traced and the actual results of it could be quantified. You know, for instance right now, the community television policy allows community stations to have 15 percent in third languages.

4427 We know that in Videotron case across 187 T.V. shows that it airs in Quebec in its 9 stations, there is 0 content for, by or about, the aboriginal communities, indigenous communities and/or in their languages.

4428 There’s also zero content in third languages for the immigrant communities, new immigrant communities, and we live in a reality where we know that for the past year or so, one of the biggest stories in our society here is how can we absorb and integrate this huge amount of refugees that we want to help.

4429 And community television is -- and community media is one of the best tools for integration.

4430 So when we have a broadcaster like Videotron, who their parent company owns 85 percent of private news outlets in the province of Quebec, that also controls the community television station, and for decades refused to produce anything English until recently and still refuses to produce anything in third languages.

4431 And out of all, again, 187, 0 indigenous content and -- only 4 shows that deal with issues of new immigrant or a visible minorities, that’s a disgraceful record.

4432 And that is clear example of why this -- nobody wants to watch MAtv. When you have a huge budget of $23 million dollars, at least, being spent on MAtv in Québec, and they only have less than 1 percent of the market. That’s a huge expenditure on every viewer, and it tells you clearly that the viewers, the communities don’t see themselves reflected in that station.

4433 We know that if that station, that financing was given to actual non-profits that were connected to the communities, the response would be much different. Viewership would actually be significant and the expenditures in terms of their results for giving training and knowledge and integrating communities together, let alone the educational value of the content that would be aired, would be tens of times more.

4434 THE CHAIRPERSON: Building on that, assuming we accept your recommendation and go down the road of more community-operated not-for-profit community channels, and we come back to evaluate the policy five years after it is implemented and we find out that -- you talk about viewership -- that viewership isn’t as you predict it will be, what should the Commission do at that point?

4435 I mean one of the questions we’ve asked in this proceeding is how do you evaluate the policy?

4436 Are you saying that ability to reach audiences is something that we should also apply to the community sector?

4437 MR. COUTURE: Sorry, I didn’t understand your last sentence.

4438 LE PRÉSIDENT: Monsieur disait que, à son avis, si on adoptait le modèle proposé, il y aurait beaucoup plus d’écoute pour cette nouvelle station communautaire, qui est la propriété -- pas la propriété, ce n’est pas le bon terme mais qui est opérée par le secteur communautaire sur une base sans profit.

4439 Une des questions qu’on a posée dans l’instance, c’est l’évaluation de notre politique.

4440 Donc, je pose la question si, une fois qu’on met en vigueur le modèle hypothétiquement que vous préconisez, dans cinq ans, si on s’aperçoit qu’il n’y a pas d’écoute, est-ce qu’on devrait donc abandonner même votre modèle? Est-ce que les cotes d’écoute est une évaluation appropriée pour le secteur communautaire?

4441 Mme GUAY: Si je peux me permettre, je ne suis pas une experte du tout de ces questions-là.

4442 Ce que je peux vous dire c’est qu’il y a des pratiques d’évaluation dans les mouvements communautaires extrêmement rigoureuses et qui peuvent garantir l’atteinte de résultats; en particulier, la qualité des services offerts, la compliance avec les objectifs du programme.

4443 Quand vous disiez tout à l’heure, dans le fond, on ne remet pas en question les piliers sur lesquels la réglementation du CRTC pour le secteur communautaire. On trouve que ce qui est là, les exigences qui sont exigées, la participation citoyenne, l’accès, les langues officielles, la représentativité dans les groupes ethniques et aborigènes, en particulier, dans le contexte actuel. Tout ça, ce sont ce qu’on pourrait appeler des indicateurs d’évaluation aussi.

4444 Et là, ce qu’il y aurait à mettre en place avec un conseil d’administration -- comme dans tous les organismes communautaires, les conseils d’administration ont des politiques d’évaluation. La télévision communautaire indépendante de Montréal en aurait aussi en conformité, probablement, en partenariat avec le CRTC pour bien s’assurer qu’on est compliant par rapport aux objectifs.

4445 Deuxièmement, si je me fie sur les lettres d’appui qu’on a reçues, je vous donne juste quelques exemples. Par exemple, la Ligue des Noirs du Québec, qui dit nos réalités et nos histoires à nous ne sont pas reflétées à l’heure actuelle, ni dans les médias conventionnels, ni dans les médias communautaires.

4446 Ça va être des puissants vigiles, si on veut, pour surveiller ce type d’affaire-là.

4447 La Maison d’Haïti, la coordonnatrice et le conseil d’administration dit, on ne se retrouve pas dans ce qui passe à la soi-disant télévision communautaire. Et même leur conseil dit, « C’est l’indépendance totale de la télévision communautaire par rapport aux intérêts corporatifs qui serait la meilleure garantie que l’esprit et la lettre du CRTC seraient respectés. »

4448 Puis bon, je pourrais aller à la Fédération des Femmes du Québec aussi.

4449 LE PRÉSIDENT: Je comprends qu’il y aurait peut-être d’autres facteurs pour évaluer le rendement ---

4450 Mme GUAY : Oui ---

4451 LE PRÉSIDENT: --- d’une télévision communautaire. La question plus précise que je vous pose, est-ce que les auditoires, les cotes d’écoute devraient faire partie de cette évaluation?

4452 Mme GUAY: Certainement. C’est un -- c’est un des indicateurs mais pas le seul.

4453 LE PRÉSIDENT: Je comprends.

4454 Mme GUAY: Pas le seul.

4455 MR. MAROUF: I mean currently the CRTC asks the BDUs to report on the numbers of volunteers. They have the numbers of hours of original programming they aired and how much of it is access, and so on.

4456 And you know, to go back to the case of a university television station, CUTV, in 2012, they had more volunteers coming to these two rooms to learn the skills and produce the content, than MAtv across all of the Province of Québec has ever reported.

4457 And they had more followership on Twitter and Facebook, if you are interested in the new media and the impact of it, than MAtv across of all of the Province, all of its presence on the internet.

4458 So that tells you that with a small budget of $200 000 -- that was the budget of this student television station -- and its ability to deliver on one interest group that is not having service in the other two sectors, had that huge impact.

4459 Imagine if you have a natural community television station that is really connected to the community because it has to answer to the community through a general assembly of non-profit, and has to connect to those communities and represent them.

4460 So yes, we can measure through the impact of how many people get the skills transferred to them, how many producers end up volunteering and how many shows end up on air.

4461 It is a shame to see the numbers of access programming supposedly being produced by MAtv on air for the amounts of -- huge amounts of money that are being spent on this station.

4462 And even though that they have still, under the regulation, 50 percent of -- the ability to do 50 percent local content that is not access, they are still failing on delivering on the access requirements.

4463 So those are things that indicate to us that it’s not working right now and it will not work if it continues -- community television will not work and will not be relevant as long as it’s under the tutelage of the BDUs.

4464 THE CHAIRPERSON: Okay.

4465 Other than -- oui, je vous en prie.

4466 M. COUTURE: Je voulais réagir avant que vous commenciez.

4467 LE PRÉSIDENT: Oui, je vous en prie.

4468 M. COUTURE: Oui. En fait, bien d’abord je voulais un peu aborder ce qui a déjà été dit par mes collègues qu’il y a d’autres indicateurs que l’auditoire mais je pense votre question concernait surtout l’auditoire.

4469 Moi, je pense qu’il faut d’abord prendre comme a priori et c’est d’ailleurs de ce que je comprends dans la Loi sur les télécommunications, que le secteur communautaire est important et qu’il doit être constitué et qu’il doit être reconnu comme un des médias.

4470 Si l’auditoire n’est pas satisfaisant après les changements de la politique, c’est certain que c’est problématique mais il faut se questionner aussi pourquoi l’auditoire n’est pas à la hauteur.

4471 Une des raisons c’est justement peut-être que le financement ou les ressources ne sont pas suffisamment appropriées pour les groupes communautaires.

4472 Si on demande aux groupes communautaires de former seulement des bénévoles qui n’ont pas d’espace de travail et pas d’équipement de produire une émission de qualité, la même qualité que Radio-Canada par exemple, c’est un peu problématique.

4473 Donc une des choses qu’on fait ressortir dans notre document c’est que les fonds qui sont dédiés -- il semble que les fonds qui sont dédiés aux télévisions communautaires sont plutôt utilisés pour des télévisions un peu, bien comme MAtv, en tout cas des télévisions dont on ne sait pas trop -- leur caractère communautaire n’est pas clair.

4474 Je pense qu’il faut vraiment mettre ces fonds-là pour la télévision communautaire afin que ce soit du contenu de qualité qui est produit qui rejoint les gens; et évidemment aussi qui permet aux citoyens de participer, qui est un aspect important en fait de la culture communautaire, qui n’est pas seulement orientée sur le résultat mais aussi sur la participation citoyenne.

4475 LE PRÉSIDENT: Merci.

4476 Je comprends que l’accès à des sommes d’argent est important dans votre position. Mais outre l’accès à des sommes, le financement, quels sont les autres obstacles ou barrières à l’implantation de votre vision pour un canal communautaire plus communautaire?

4477 MR. MAROUF: I mean, obviously the money is very important. You cannot have a ---

4478 THE CHAIRPERSON: Well, let’s take that as a given.

4479 MR. MAROUF: Yes.

4480 THE CHAIRPERSON: So what else?

4481 MR. MAROUF: What else? Obviously the licence to broadcast on as many platforms as possible.

4482 You know, currently, a community access channel is only aired on the BDU that it’s getting the finances from. So for instance, MAtv, it can only be watched by customers of Videotron. So that means that the rest of the community that doesn’t have access -- is either on a different platform or doesn’t have cable television will not be able to benefit from the educational content and the content that is produced on this station.

4483 So it is very important that a community station is actually there for the community, and that can only be possible when community stations are carried on all platforms. So in the case of ICTV, if it’s licensed, it should be carried by all distributors in that zone of that licence, above and beyond just the one BDU. It’s very important to have a space -- an actual studio space where people from all walks of life can come together and learn the skills and interact and rub against each other and learn from each other the differences that we have in our society.

4484 This is one the most important, also, aspects of community media. It’s not only what comes out and airs on the station but the process of bringing people from different walks of life and getting them to know each other’s values and histories as they are producing this content collectively.

4485 Those experiences are part and parcel of the community media strategy usually.

4486 THE CHAIRPERSON: When ---

4487 Mme GUAY: Si je peux me permettre?

4488 LE PRÉSIDENT: Oui, je vous en prie.

4489 Mme GUAY: Si je peux me permettre aussi à rajouter à ce que mon collègue dit, c’est que les milieux communautaires, les citoyens/citoyennes qui sont dans ça appartiennent très souvent à des communautés vulnérables et ont été tenus à l’écart des grands médias.

4490 Donc réinstaller une culture de participation à un espace médiatique mais qui leur appartiendrait d’une certain façon, ça aiderait à briser cette espèce de rupture qui s’est installée, en particulier pour les peuples autochtones. Quand on dit aucun programme à ce niveau-là, c’est grave dans la situation actuelle, même chose pour les personnes assistés social, même chose pour les femmes, même chose pour les personnes avec certains handicaps, et cetera.

4491 Donc il y a une culture à bâtir de participation démocratique et de création dans un nouvel espace médiatique et qui va rejoindre des gens qui ne sont pas rejoints par les deux autres types: corporatifs et publics de médias.

4492 LE PRÉSIDENT: Je comprends bien que votre, pour dire le moindre, que votre expérience avec Vidéotron n’a pas été une expérience heureuse à vos yeux, mais je me demandais si vous avez eu à interagir avec d’autres EDR? Parce que je regarde, par exemple -- je pense que c’est à la page -- c’est au paragraphe 13 -- vous parlez -- vous décrivez les EDR comme c’est toutes des EDR qui sont intégrées verticalement, qui ont des intérêts dans la télévision conventionnelle traditionnelle, réseaux spécialisés. C’est peut-être le cas de Vidéotron, mais c’est peut-être pas le cas de toutes les EDR.

4493 Donc je voulais savoir si votre position découle d’une interaction avec d’autres EDR qui ont été de la même nature que votre interaction, à vos yeux, loin d’être idéale avec Vidéotron?

4494 MR. MAROUF: In Quebec in general -- well, at least in Montreal, it is Videotron or Bell. In the rest of Quebec there’s Cogeco. Bell already has its own community access channel and in Montreal it’s TV Frontenac that fills -- which is an independent non-profit that fills that air time.

4495 So we don’t have much of an experience with other BDUs. It’s very clear that in Quebec the majority of viewers are on the Videontron platform. It is the biggest provider of television in the province. So if there is to be any impact, because of the restrictions right now where an access channel is only carried on the BDU that funds it, it means that Frontenac, for instance, doesn’t have much viewership probably in comparison even to MAtv because of that restriction.

4496 So the reason we have community television is for the impact of it, to have a different voice other than the financial centres of our society that control the private sector which are guaranteed that right and the voices of our governments and in our -- in the public sector.

4497 So we’re supposed to have a third balance, and unfortunately currently that doesn’t happen if -- in Quebec specifically it’s even scarier in a situation where the owner of Quebecor, the mother organization of Videotron, Pierre-Karl Péladeau is in politics, running -- is the chief of a political party. So you have a chief of a political party that runs 85 percent of the private media, in control also of the community television station and, if elected, as the Premier of the province, could have control of the ---

4498 THE CHAIRPERSON: But the short answer to my question is your experience is mostly with Videotron?

4499 MR. MAROUF: Exactly. It’s because it is the only valid -- valuable actual community station that is there in the market.

4500 Mme GUAY: Si je peux me permettre aussi, oui, effectivement, notre expérience est plus concentrée autour de Vidéotron à cause de ce que mon collègue vient de dire, mais il y a aussi une position de principe, comme on l’a expliqué tout à l’heure dans ça, parce qu’il y a une culture du privé, comme il y a une culture du public et il y a une culture du communautaire qui ont des pratiques complètement différentes.

4501 LE PRÉSIDENT: Oui, je comprends bien. Mais je voulais savoir, pratico pratique, si vous aviez eu à interagir avec d’autres?

4502 Mme GUAY: Si vous me demandez s’il y a des bons privés qui pourraient aider le communautaire, et cetera, je vous dirais non, pas sur un plan moral, mais parce que les cultures sont complètement différentes, les intérêts sont différents et la façon de fonctionner sont différentes.

4503 Si vous me permettez -- je ne sais pas si j’enfreins votre règle du début -- la présentation qui nous a précédé, les présentateurs de la présentation antérieure ont bien mentionné qu’ils se faisaient une fierté de pouvoir donné au communautaire du temps d’antenne pour qu’on fasse nos messages, et cetera. C’est une façon pour le privé, si on veut, de dire “On aide le communautaire.” On est à des lieux de différences entre ce qui est proposé comme façon de gérer soi-même, de gérer nous-mêmes l’espace plutôt que de quêter des espaces qui nous ---

4504 LE PRÉSIDENT: Je comprends bien, mais ma question était très précise à savoir si vous aviez de l’expérience avec d’autres EDR. C’était le seul but de ma question.

4505 Je comprends qu’il y a tout un plus large contexte politique.

4506 Ma dernière question, and I’ll address it to Mr. Bertrand. You spoke in English. Your name sounds French, so I’m going to assume that I should ---

4507 MR. BERTRAND: It’s because I have an intellectual disability ---

4508 THE CHAIRPERSON: Okay.

4509 MR. BERTRAND: --- and I have -- my father was French and my mother’s English.

4510 THE CHAIRPERSON: That’s fine. So I’ll ask my question in English and either you or other colleagues on your panel can help.

4511 My question is what particular needs are there for the disability community that we should have in mind when we look at the policy going forward for community television?

4512 MR. BERTRAND: The thing is, I do a show called the Avalanche, which is produced by a lot of people like me with disability and I did some interviews with the disability community and I just wanted to say the people that are disability likes to be interviewed by another disability so the person could understand, like, how to be from a person’s point of view.

4513 I think a guy in a wheelchair likes to be interviewed by another guy in a wheelchair which he’ll understand his thing. That’s what it is.

4514 THE CHAIRPERSON: All right.

4515 So it’s not -- it's access as well to the on-camera journalist type rule as well as being part of the community governance?

4516 MR. BERTRAND: And another thing too, is people with disabilities like me, like our life stops at high school, and we do volunteer work all the time. I'm on social assistance and -- like to get this opportunity CKUT gave me, was the greatest opportunity, because I can't go to university like most of you did, because I can't get a journalist degree because it stops there. So CKUT -- I applaud CKUT, let me do this and it will be nice to see community TV for the -- from the community.

4517 Like Videotron, they will think it’s an embarrassment to have a disability doing it like that. And it’s like I’ve seen this all through my life like that and -- like that. And another thing also too is like I think -- so that’s it. The -- this last past year, we brought ASL to the radio, and we’re doing for a while, and it’s going really great. Like we did -- we broadcast on the internet and like that, so it’s that great.

4518 THE CHAIRPERSON: Okay, I appreciate it, thank you. Thank you very much for ---

4519 MR. BERTRAND: Thank you.

4520 THE CHAIRPERSON: --- answering my question.

4521 I believe -- I’ll look at my colleagues if they have questions. No. Nor does legal? No.

4522 So thank you very much for your participating. Merci beaucoup pour votre participation.

4523 Madame la secrétaire, le prochain intervenant, s’il vous plait.

4524 THE SECRETARY: Thank you. We will now connect via Skype. Hi, Mr. Sabulsky.

4525 MR. SABULSKY: Yes, that’s right.

4526 THE SECRETARY: How are you?

4527 MR. SABULSKY: Oh, pretty good.

4528 THE SECRETARY: Perfect. So you can start your presentation when you are ready. You have 10 minutes.

PRESENTATION

4529 MR. SABULSKY: Okay, I can start right now and if you have my presentation in front of you, I’ll start.

4530 My name is Leo Sabulsky. I am the Fire Chief and Emergency Coordinator for the District of Chetwynd, and the Director in charge of Community TV & Radio for the Chetwynd Communications Society.

4531 We are an independent society registered in the Province of British Columbia, and are in good standing with the Societies Act of B.C. We are a member of CACTUS. Our mission is to broadcast emergency bulletins, news, weather, sports, and local events from Council meetings, Aboriginal days to local amateur music concerts and sports events.

4532 We are also committed to recording history, and have a vast library of interviews with pioneers. Recently, we recorded a memorial service of the last Aboriginal veteran of World War Two in our region, who was nearly 101 years old.

4533 We are the only organization that does this in our community, and we invite you to watch us on satellite television, or Bell 655 or on our website, peacefm.ca, or via YouTube.

4534 We started broadcasting in 1998. Her Excellency Adrienne Clarkson officially opened our radio and TV offices to commemorate that we were one of the first community-owned TV and radio stations in Canada.

4535 We are supported by the District of Chetwynd and the Peace River Regional District with a tax allocation, by selling advertisements, and by Canada Summer Student grants.

4536 Peace FM broadcasts original radio content from 6:00 a.m. to 6:00 p.m. weekdays, eight hours a day on weekend shifts, and we have 12 volunteer shows throughout the week. We broadcast from a tower we own in Chetwynd, and a leased tower in Dawson Creek, 100 kilometres away.

4537 CHET TV program starts at 6:00 a.m. and continues to midnight with 97 percent local programs. From midnight to 6:00 a.m., we broadcast a bulletin board. Our TV signals are broadcast from two towers we own in the region, and we cover about 80 kilometres of territory.

4538 An understanding of our location and our history is critical to understanding the need for community radio and TV. For that reason, I’ve included three maps and you have copies of them.

4539 The first map shows our location in Canada and our distance from Ottawa. And the reason I’ve included this map is that many people think that we’re always on the West Coast, we’re not, we are in the corner. Map 2 shows our northeast corner of the province, and, Map 3 shows that we are dependent on Highway 97.

4540 So, if you look at the map -- and I have supplied maps to you -- when Highway 97 is closed due to an accident or a spill or a natural catastrophe, our communities are cut off from the rest of British Columbia.

4541 Emergency notices and news stories have been a major service to the community, and news stories have included: Incident a) in 2000, over 6,000 barrels of crude oil escaped into the Pine River and our water supply was compromised. We did emergency bulletins for over 90 days.

4542 Incident b) in 2007, Emergency Social Service teams processed over 1,800 residents who were evacuated to Chetwynd from Tumbler Ridge, due to a forest fire. Our TV bulletins updated evacuees as they stayed in community halls throughout the event.

4543 Incident c) from 2008 and 2011, we had two avalanches, a landslide, two bus accidents, a dangerous goods spill, and five fatal accidents which shut down the highway from the south, and TV staff went into emergency mode. Bulletins and news stories kept our communities informed of road closures and subsequent openings.

4544 In 2011, Highway 97 was closed for over two months as a flood caused multiple landslides in the Pine Pass. CHET TV covered the events for 140 days, and a young TV summer student was recognized by CBC and CTV for outstanding filming of the progress of the cleanup.

4545 Incident e) in 2013 and 2014, CHET TV assisted one community in its total evacuation, and notified two First Nations communities that they were under an alert. Elders congratulated staff and TV volunteers at the station for their updates.

4546 Incident f) in 2015, we had six road closures due to fatal motor vehicle accidents, one natural gas leak which resulted in the evacuation of a school. We covered the stories with emergency bulletins and as news stories.

4547 Fortunately, in 2016, we have not had any emergency bulletins or announcements.

4548 Where were the major news agencies during these events and where are they now? Major news agencies are located in Prince George, Vancouver, Edmonton or Toronto. They rely on our resources. Why?

4549 The population base is not here to sustain a major news center. Our region has been and is one of the least-populated regions in Canada with a population of about 72,600 people over an area of 500 square miles.

4550 We directly serve the District of Chetwynd, two First Nations communities, and an eighty-kilometre rural region of the Regional District. Chetwynd itself has a population of about 3,000 people, and serves a rural region of about 6,700 people.

4551 Demographically, 40 percent of our populations are Aboriginal and about 60 percent are non‐Aboriginal. Recent Census data shows that this is 1.6 percent of the population of B.C.

4552 We may be isolated and have a small population, but we are one of the fastest-growing regions, thanks to rapid development in the energy sector. We may not be important in terms of the media corporations of Canada because of our low population, but we are king when it comes to dollars, and sometimes disasters.

4553 As we speak, a gigantic hydroelectric dam, multiple pipelines, refineries and LNG projects are being planned, or in the process of being built within 100 kilometre of us.

4554 Disasters, natural and manmade, will definitely befall us, especially with the fracking at gas sites causing earthquakes, incredible increases in traffic, and possible industrial spills and releases.

4555 Fortunately, community radio and TV will be waiting to broadcast emergency bulletins to inform and to educate residents, and to report news items to the world. This is our mandate.

4556 Many now subscribe to us on Bell TV on Channel 655, and have been from March 5th, 2013. Some watch us on Channel 4 on Eastlink Cable TV. Some continue to watch us from our towers. We do not know how many subscribers either Bell or Eastlink have in our area.

4557 We do receive daily emails and calls from viewers who have seen our program on Bell throughout Canada and congratulate us on our bulletins, news stories and recordings of events.

4558 Our bulletins, news, weather, documentaries and special programs originate in the community and make up 97 percent of our programming. The other three percent are northern and aboriginal programming purchased from the NFB through an arrangement brokered by CACTUS.

4559 Our two full-time employees are graduates of Canadian Broadcast journalist programs. They produce programs and train three to five volunteers annually and are now working with classes from two high schools.

4560 We are a training ground for men and women who start professional careers in broadcasting and for young men and women who need role models. We tend to attract youth who have an interest in filming, music and journalism.

4561 We are grateful to Bell for covering the costs of uploading and distributing our signal. It ensures the safety of everyone in the region who is beyond our broadcast footprint and the rest of Eastlink’s cable system. We are not, however, carried on Shaw, which leaves Shaw Direct customers without a local emergency news service. Many have asked for Shaw to partner with us but have been told that it’s not required.

4562 Eastlink carries CHET TV on channel 40. They have recently given us a direct contact number when the signal fails in their communication building. Previous outages have left Eastlink customers without service for days sometimes before a technician is sent out from Dawson Creek 100 kilometres away. So this is a big step forward.

4563 We are a vital communication service in our part of Canada and not hobby TV. Our pleas are as follows.

4564 That Shaw Direct carry CHET TV so their customers here in Chetwynd, nearby communities such as Fort St. John, Dawson Creek and Tumbler Ridge would then benefit from our bulletins.

4565 That BELL add our channel to commercial and industrial corporation lists as part and parcel of their offerings so that apartment buildings, camps, hotels and service outlets may receive our bulletins, news and programs. Many construction workers live in temporary facilities. Bell only offers our service on Bell Xpress View at the present time.

4566 We plead that satellite and cable networks in our region give us financial consideration since we deliver local content and they do not. They take $50 to $100 per subscriber from our community and they do not return any benefit to us other than carriage. Most of their technicians live in other towns so the economic benefit to us is zero.

4567 In checking with the District of Chetwynd, I discovered that Eastlink, Bell and Shaw do not even pay a business license in the municipality, nor contribute to the road maintenance to their towers. The municipality and our society pay for road maintenance.

4568 We plead that Eastlink in Hudson’s Hope, 60 kilometres away, and Tumbler Ridge, 99 kilometres away, carry our channel so that our bulletins and newscasts are seen in their communities because our stories impact their residents.

4569 We note that CACTUS’ proposals to mandate carriage of community signals on all satellite carriers, in combination with the adjustments to the community licensing process so that we could define our community of interest for cable carriage at the time of licensing, even if that carriage exceeds our broadcast footprint would meet these needs.

4570 We pride ourselves on reporting from “ground zero” in our region. We are the hub of the community.

4571 Commercial stations which appear on satellite and cable television also benefit from advertisements from major box store corporations, energy companies, car companies and national governments and political parties. CHET TV cannot, because these advertisers are not interested in dealing with small rural channels.

4572 In the recent election we were told that the political parties advertise only with the major networks.

4573 Possibly the CRTC can recommend that every independent community TV station be given financial and technical assistance in lieu of national advertising to balance the playing field for small stations that serve rural areas without the presence of other broadcasters.

4574 CACTUS’ proposal for a community access media fund would meet this end since our communities fall below the minimum size that would require Eastlink to contribute to our maintenance. Possibly the CRTC can recommend the federal government also buy community TV ads.

4575 Our mission to cover local events to the best of our abilities benefits our communities and also the cable and satellite companies which carry us.

4576 Thank you for the opportunity to participate in this proceeding. I look forward to your questions, as represent an opportunity for you to understand the different reality in remote areas such as ours.

4577 THE CHAIRPERSON: Thank you, Chief.

4578 Commissioner MacDonald will start off the questions for us.

4579 COMMISSIONER MacDONALD: Good afternoon and thank you for being able to join us today. I hope the emergency that took you away wasn’t too serious and we’re glad you were able to make it back.

4580 I had the opportunity to look at your website and some of the videos, and before we get started I just wanted to complement you on the excellent work you’re doing in your region.

4581 And I’d like to start off by sort of learning a little bit more about your station and getting some clarity on a couple of points just so I can understand exactly where your challenges are.

4582 My first question is with respect to the population base that you serve. When you were speaking today you mentioned about 72,000 people. Does your station reach that entire area that encompasses those 72,000?

4583 MR. SABULSKY: In terms of TV, the potential yes, with Bell 655 and Eastlink. It would 100 percent if we had Shaw in our fold -- if they covered us. So potentially, yes.

4584 I do not know how many people get CHET TV on Eastlink or on Shaw, but that is the entire population of our wedge in the province.

4585 So potentially, yes. In actuality, I don’t know precisely.

4586 COMMISSIONER MacDONALD: And there are no other TV service providers in your area other than those three; correct?

4587 MR. SABULSKY: That’s right. Bell Television in Fort St. John and it covers Fort St. John and Dawson Creek. So we’re the only community TV station per se.

4588 COMMISSIONER MacDONALD: And I know you’re the only one sort of in your area. I assume you’re not also getting broadcasts from any other community stations that operate in sort of nearby communities?

4589 MR. SABULSKY: No. The closest station that’s broadcast by Bell is in Valemount but it’s not in our region and it’s not applicable. Valemount has a TV station.

4590 COMMISSIONER MacDONALD: I guess I’d sort of like to ask sort of how you spend your day and how your team spends their day. Obviously a percentage of it goes to local programming. You have to do additional fund raising to help support your operations, and producing ads and attracting volunteers and activities of that nature. How much -- how many hours in a day or what percentage of your time are you actually able to dedicate to television programming?

4591 MR. SABULSKY: Well, two employees who are grads from broadcast colleges, they spend basically eight to 10 hours a day doing original new programming every day. We cover the District of Chetwynd council meetings. We do news twice a week and it’s quite extensive. And the people that anchor the news, weather, the emergency bulletins and everything else are the community radio people. So we work very hard. Some days they will exceed eight hours, they’ll go 12 hours, 14 hours.

4592 To date, I have the two TV people at the south end of Site C dam getting a story with one of our volunteers about the protest and the movement at Site C. Later this week they will be interviewing BC Hydro officials.

4593 So, in a nutshell, we try to garner as many minutes, half hours, hours of original new programming every day.

4594 So this week it’s going to be substantial. We’ll probably have six to eight hours of new programming. Most weeks, though, we are at four to five hours.

4595 COMMISSIONER MacDONALD: Okay. Thank you for that.

4596 And when I was on your website you had a week’s worth of programming, and I was noting the amount of local news, the CHET TV news program that you do four times a day.

4597 MR. SABULSKY: Yes.

4598 COMMISSIONER MacDONALD: I was just wondering, what format is that news program? Is that an original broadcast that you’re doing or is that a video-recording of the news programming that you do on your radio station?

4599 MR. SABULSKY: No, that’s original T.V. It’s totally different and the reason is our T.V. people assist the radio and we go back and forth basically. That is original.

4600 And so the T.V. people take as many stories as we can that are relevant at the time. So when you’re watching it you rarely just go and videotape a radio person doing a news broadcast.

4601 COMMISSIONER MacDONALD: Okay and a couple of days ago, earlier in this hearing, we had another person that was taking part in the hearing and they expressed some doubt as to whether community stations would be able to produce a quality news program.

4602 And I noticed in your statements today you have two individuals who have a journalism background. So I was just wondering if -- what your thoughts might be as to how you might want to dispel anyone’s doubt that community T.V. can’t do news.

4603 MR. SABULSKY: Well what we’re finding and we’ve been at this for many years, is that our young broadcasters, young journalists are very keen. They do an incredibly good job.

4604 And I really thank you for watching our newscast, because they come in and they want to make a name for themselves and so our programs meet or exceed any other news broadcast in Canada.

4605 And if a person comes in and sort of wants to minimize it, I think they should be able to see our program and see what we do.

4606 The journalist’s career is very, very competitive and our men and women that have joined us over the years, they want to get their feet wet and as I said in the presentation we are a training ground.

4607 COMMISSIONER MacDONALD: Obviously you’re already producing local news and other than just funding, are there any other things the Commission could do to encourage you to keep doing news or perhaps even do more news content then you’re doing today?

4608 MR. SABULSKY: One of the big things that I find is that we only have two work stations.

4609 So when we are doing work and we only have two licences for editing it is really cumbersome. So when we do have people that are volunteers, we have to work 24 hours a day and it would be very nice to have a person be able to train volunteers and new people, to have their own workstation.

4610 That’s one of the barriers we have. We don’t have a lot of money to purchase new workstations, new technology and we work with it as best we can and I think that is an obstacle we can overcome and we’re working towards it.

4611 COMMISSIONER MacDONALD: You’re a member of CACTUS and support the proposals that they’ve made.

4612 We actually just heard from them yesterday and one of the things that they were suggesting the Commission do is allocate funding to create about 170 community media centers across the country.

4613 And I’m just wondering if you have any thoughts on how that might benefit you and your operations.

4614 MR. SABULSKY: Well if you look at an incubator model, I think we are serving at the present time as such a model, because we are doing that.

4615 So in the event of any type of crisis or just a human interest story or progress, we’re doing that now.

4616 So we’re an incubator center for a media center and we have radio, T.V., we participate in Facebook, Twitter, have websites.

4617 So we’re sort of what, I think, CACTUS envisions in a way. We’re kind of a model.

4618 COMMISSIONER MacDONALD: When I was on your website I noticed that you post a lot of your content online.

4619 Do you post everything online? Do you have your own YouTube channel? What are you doing in the online space?

4620 MR. SABULSKY: Well we do a lot on Facebook. One of our problems is we are working towards high speed internet in Chetwynd. We don’t have it.

4621 We’re working towards it and so we would like -- we do have our Chet TV, a YouTube channel, but until we get high speed internet it’s really cumbersome because it slows down the whole community if we get in there and start downloading all our YouTube videos.

4622 COMMISSIONER MacDONALD: So you would think you’d be doing more of that once, sort of, coverage and connectivity challenges are resolved.

4623 MR. SABULSKY: Yes, if we had more bandwidth it would be easier for us to do. It wouldn’t be such a burden.

4624 One of the things that we find -- and I’ve been in Chetwynd since 1977, so I’ve been here a long time, that when people come to Chetwynd they use Chet TV on Bell 655.

4625 People, relatives throughout Canada, watch us. We get these bizarre compliments and requests that grandma in Newfoundland wants to see their grandchild in the garden contest and we actually do it.

4626 We also cover a seniors dance which is called “Let ‘Er Rip” and we do about 18 hours of broadcasting seniors’ dancing and old fashioned music.

4627 And we get requests constantly from across Canada for “Let ‘Er Rip” DVDs and the group that hires us to videotape it they sell the DVDs. So it’s really promoting entrepreneurs in our little corner of the province.

4628 There’s certain niche things that we do that no one else can do. Like we appreciate gardening than people in the south and in the east, in areas where stuff grows.

4629 And so our garden contest we’re up to now 600 contestants. I hope people don’t move away because we won’t have any more contestants in the next year, after year.

4630 And it’s something we do, the garden contest, the chainsaw sculpture. We have 158 chainsaw sculptures; we covered that. Media agencies in other places don’t.

4631 We go to Dawson, we go to Port St-John and we like local musicians, artists, poets. We’ll go and cover their shows.

4632 Next week we’ll be doing a piano recital and it’ll be in Dawson Creek and we’ll have lots of fans requesting to see their grandchildren and adult grandchildren play.

4633 Yes, we’re promoter of the arts and then bizarre things like mud races and stuff. We’re out there and, no pun intended, like a dirty shirt.

4634 COMMISSIONER MacDONALD: You touched on your facility just a few minutes ago and we’ve sort of been told over the course of this proceeding that many operators spend about 40 percent of their allowable budget, you know, maintaining the facility and paying overhead and about 60 percent goes to programming.

4635 Would you say that 40-60 split is about accurate in your circumstance or would it be a little bit different?

4636 MR. SABULSKY: I think it’s very representative. Whenever you get really comfortable that you think you’re down to about 30 percent on overhead you get hit in the head with a major breakdown and then it’s up to 40 percent.

4637 Yes, I think that’s very reasonable. One of the things we encounter that possibly in the south and the east you may not realize is when we have anything happen we have to call on technicians and engineers that are in Edmonton, that are 10-12 hours away or in Vancouver which is 1250 kilometres.

4638 So our costs are exceedingly higher than in the south where you can just phone someone and they can drive within a couple hours to operations.

4639 We were in this situation where a cold truck pulled all our lines down and we experienced an incredible power surge that blew our computers apart and we had to have fundraising like crazy.

4640 But the technicians who came to repair it came from Edmonton and what should have been a $5,000 repair ended up being substantially higher.

4641 And then when you have to buy stuff and the freights and stuff came to almost $25,000 and we subsequently sued the company. We never recovered very much of it.

4642 COMMISSIONER MacDONALD: Okay and just one final question, you stated that you produce television commercials for area businesses? You produce them you don’t air them; is that correct?

4643 MR. SABULSKY: Yes, we do. We produce them and air them. We just had a new hotel open. We produced them, we put them on. We also -- If you know anyone who wishes to buy a golf course, we’re showing a golf course ad. Its a man who’s in his seventies, he started a golf course and he wishes to retire so any money in the CRTC who wants to come and visit us and buy a golf course, one is waiting for you right now.

4644 COMMISSIONER MacDONALD: Well, sadly if you’d ever seen me golf you’d know that I probably haven’t spent much time on the golf course, but I will pass that around.

4645 Those are my questions for today, thank you very much for being able to join us.

4646 MR. SABULSKY: Thank you.

4647 COMMMISSIONER MacDONALD: I’ll hand it back over to the Chair.

4648 THE CHAIRPERSON: Thank you very much. I believe those are all our questions. I really do want to thank you for having participated in our hearing. It’s really good to have a different perspective from the ones we sometimes get directly here in our hearing rooms and that you were able to participate from your locality, so thank you very much.

4649 MR. SABULSKY: Thank you very much.

4650 THE CHAIRPERSON: Thanks.

4651 MR. SABULSKY: Okay, bye-bye.

4652 THE CHAIRPERSON: I think it’s probably the right point to take a short break, about 10 minutes. So let’s come back about 3:15 and hear the final two interveners for today.

4653 Thank you.

--- Upon recessing at 3:00 p.m.

--- Upon resuming at 3:15 p.m.

4654 LE PRÉSIDENT: À l’ordre, s’il vous plait. Madame la Secrétaire.

4655 THE SECRETARY: Thank you.

4656 We’ll now hear the presentation of Healthy Fam. Please introduce yourself, and you have 10 minutes.

PRESENTATION

4657 MS. HANNA: Sorry; here we go. Strictly off the record if I could say as a chef and restaurateur my only criticism of these hearings is we ---

4658 THE CHAIRPERSON: Sorry; nothing is off the record, so if you say it, it’s on the record.

4659 MS. HANNA: Well, then we should have food and wine here, so maybe that should go on the record.

4660 THE CHAIRPERSON: There you go.

4661 MS. HANNA: But anyway, officially, good afternoon Mr. Chair and members of the Commission.

4662 My name is Julia Hanna and I am the founder of Healthy Fam, a not-for-profit organization that aims to educate children, seniors, and families on the benefits of healthy eating. I would like to thank all of you for inviting me to participate in these most important hearings on the future of local television and community television in Canadian markets such as mine in Oakville.

4663 When Healthy Fam began we partnered with locals, a local grocer. We teach at-risk teens, single moms, seniors, and families what we call kitchen literacy.

4664 My personal mission in life is to get people, families, to sit down together once again and talk and share their stories over a meal. Our lives are so fragmented now it has affected how we eat; we look for fast and convenient which often means no time around the table. All of us at Healthy Fam would like to change that.

4665 I think that an important part of our wellbeing is being connected to our families and loved ones; and what better way to do that than over a healthy meal. I think that our relationship with food tells a story about how we feel about ourselves.

4666 Now in Oakville, my community, we have very little in the way of media. We reside in the shadow of the big City of Toronto and unless something big or tragic happens we get very little coverage. We have no broadcast television station, no radio, and no daily newspaper. This is where my local community television station came in to play. I proposed a program called “Return to the Table”; the series is centred around interesting people from the community with a story to tell, putting together some good wholesome food and by doing so we talk about family and our outlooks on life.

4667 Now, this concept might not garner interest from media outlets such as CTV or Vice because it is just too local; however, at my local channel, Cogecco TV, it did.

4668 Now, I am not saying by any means that the show isn’t good enough or entertaining. I am just saying that it doesn’t belong on the public or private sector; it belongs to the community sector, which I truly believe is of equal value.

4669 Cogeco TV is a perfect fit. They have spent countless hours patiently teaching me how to host a program; how to present my point to an audience that is represented by camera lenses. The show has evolved, it is now shot in my own kitchen, I drive the content, the guests, and really everything about the program other than technical aspects, and we can all be grateful for that.

4670 In reality, the show wouldn’t exist if the technical aspects were left to me. In fact, to your question if the community channel was not physically present in my community, then Return to the Table would, quite frankly, be off the table.

4671 So why is this important? I want to give you some examples to show you why.

4672 On one episode we featured the Halton Poverty Round Table. So in spite of the fact that in Halton -- the Halton region is one of the most affluent regions in Canada, there are still 14,000 who live below the line of poverty. Our guest on the show was a remarkable woman who did everything right but because of devastating unforeseen circumstances -- and that, by the way, could happen to anyone of us -- was left living in poverty. Her ability to share her story in order to remove the stigma was moving beyond words.

4673 In another episode we featured Adapt, a group that works with young adults dealing with addiction. These young people shared their heartfelt pain and journey to wellness. Their willingness to do so was to reach others who were feeling alone and in pain.

4674 And then, of course, there’s Dr. Catherine Morrison who heads a clinic at McMaster University Children’s Hospital that aids children dealing with obesity. She has seen firsthand the impact obesity has on their physical and on their mental health. Her compassion for their struggle was seen in her tears as she spoke of the emotional toll it takes on the children.

4675 These are the voices that would not be heard if not for community television. These are the stories that connect the community.

4676 I appreciate that the Commission is grappling with an issue much much bigger than Return to the Table, or my Town of Oakville, but I’m here to ask you not to give up on the community channel. There has never been a time in history that we have needed a sense of community more, and the community channel is one of the best ways to achieve this.

4677 I cannot speak to other operators but I know how the community channel runs at Cogeco. Those who have appeared before you arguing that the channels would survive with less funding are not being honest about the potential damage to the community channel if funding is redirected. They only have advocate for regional or even national interests. Those who argue that they could do better with the money that funds community television perhaps have no track record in doing so, and those who argue that community channel is simply amateur has never met the professional staff who work with volunteers like me to teach them TV. This is why many other professional practitioners have gone into the community television sector and not the broadcaster private sector, the added role and incentive to be a mentor or a teacher. Isn’t making television available to non-professional Canadians one of the tenets of community television? And isn’t it our role as Canadians to protect the community aspect in television? I know my answer to that and I truly look forward to yours and I would be thrilled to answer any questions.

4678 THE CHAIRPERSON: Thank you very much for that presentation. And I’m -- see what the transcript says tomorrow as your opening remarks, but Commissioner Molnar will start us off.

4679 MS. HANNA: Sure.

4680 COMMISSIONER MOLNAR: Good afternoon, and I appreciate you came here from Oakville today.

4681 MS. HANNA: Thank you. It is truly my pleasure. And I am truly in awe for how lucky we are to live in this country where such an esteemed group of people can invest this type of time and energy in something as important as community television. So I had my eyes opened, so it was a good thing.

4682 COMMISSIONER MOLNAR: Well, thank you.

4683 You know, one of the things about community is it is very local, hyper-local, and it is what is about what is of interest to folks and so it’s good to have some examples.

4684 MS. HANNA: Thank you.

4685 COMMISSIONER MOLNAR: And a lot of people speak policy and broad concepts and, you know, this is grounding to see a program in a community and, frankly, not a lot of folks at this hearing to date have spoke with much support for the system and for the community channels as they exist today. So your -- you know, it’s good that you came.

4686 So let me just ask a couple things if I can about your program.

4687 MS. HANNA: Sure.

4688 COMMISSIONER MOLNAR: You said that you proposed a program called “Return to the Table.”

4689 MS. HANNA: Yes.

4690 COMMISSIONER MOLNAR: So can you tell me; like, what was the process to have your program placed onto the Cogeco ---

4691 MS. HANNA: The process was facilitated -- I have done network television, and believe me, the difference between doing community and network television if profound. And all of it, as far as I’m concerned, after six seasons now of the show with TV Cogecco has been positive. They -- to be able to work in the environment where you're not under the pressure, that the message is what is the most important aspect of what you're doing, is unlike anything you're ever going to have in any other type of programming.

4692 The support, I approached Tim Caddigan and Ben Lyman from TV Cogeco, and they were on board. And we were fortunate to -- we partnered with very good sponsors that help with the program. And it took no time to all to get the program on air, and if it wasn’t for that kind of support -- and we know things like that don’t happen in other networks.

4693 COMMISSIONER MOLNAR: So your background is professional?

4694 MS. HANNA: I am a chef and restauranteur for 34 years and I survived, I’m here.

4695 COMMISSIONER MOLNAR: And this is your first experience as ---

4696 MS. HANNA: No, I’ve done network television, and I’ve had commercials on -- across Canada, and this is the first time with community television and like -- and I can't say enough about the positive experience it has been.

4697 COMMISSIONER MOLNAR: M'hm. And it’s shot in your kitchen ---

4698 MS. HANNA: Yes.

4699 COMMISSIONER MOLNAR: --- who’s filming? Is it ---

4700 MS. HANNA: TV Cogeco, they are the experts that come in and make sure that I, you know, I know about food and I know how to get the guest out to the show, but without TV Cogeco, their expertise, this wouldn’t be happening.

4701 COMMISSIONER MOLNAR: So you have professional ---

4702 MS. HANNA: And volunteers.

4703 COMMISSIONER MOLNAR: --- and volunteers?

4704 MS. HANNA: Yes, many, many volunteers. And I like to believe it’s because they like my company, but I think it’s something to do with the food perhaps. But we do have an amazing number of volunteers who come every season to help.

4705 COMMISSIONER MOLNAR: M'hm.

4706 MS. HANNA: And to train and to be mentored by the professional crew.

4707 COMMISSIONER MOLNAR: It’s obvious you have a lot of passion for your programs.

4708 MS. HANNA: Yes.

4709 COMMISSIONER MOLNAR: Could you tell me how would you define how successful your program is?

4710 MS. HANNA: It’s -- we’ve been blessed, we have incredible sponsorship, including Trillium and including Longos, and a multitude of great sponsors, and Metroland Media, and of course Cogeco as a sponsor of the program.

4711 We have assisted over 2,100 participants in our program. We work with people that are at-risk, I hate using that terminology, but it’s unfortunate. If I can find or anyone can find a better way to describe the groups we deal with, I would love to use the terminology, because these are people that -- who grow in an environment of acceptance. And giving them a life skill -- knowing how to feed yourself is a life skill.

4712 And you know, when you're economically marginalized or you're dealing with other issues, that is a skill that you need more than ever. And we work with groups and -- that do not pay for any of the programming, it is all covered by sponsors.

4713 COMMISSIONER MOLNAR: And do you have any sense as to how many people might view your program?

4714 MS. HANNA: By the fact that I am also -- my mother is -- has been on the show a few times, and I know that enough people have stopped me on the streets to tell me that my mother is amazing because she tells me as a grown adult woman what to do still. Yes, a lot of people do watch the show. I -- the sense that I get over the years is just the recognition from on the street level of the number of people who have watched.

4715 COMMISSIONER MOLNAR: But Cogeco has not provided you any information as to how many ---

4716 MS. HANNA: Folks watching.

4717 COMMISSIONER MOLNAR: --- you have no way of measuring ---

4718 MS. HANNA: No.

4719 COMMISSIONER MOLNAR: No?

4720 MS. HANNA: No.

4721 COMMISSIONER MOLNAR: Okay, thanks.

4722 MS. HANNA: Okay.

4723 COMMISSIONER MOLNAR: I have actually just one more question, and I think I saw you sitting with the folks from Cogeco ---

4724 MS. HANNA: Yes.

4725 COMMISSIONER MOLNAR: --- so you’ve probably had the conversation with them, they were up earlier today.

4726 MS. HANNA: Yes.

4727 COMMISSIONER MOLNAR: And they're proposing to actually reduce the amount of funding or they're -- I shouldn’t say that, they're proposing to reduce their obligation, their regulatory requirement to what's called Access Programming, which would be what your program falls into, in order to provide a professional news service in the ---

4728 MS. HANNA: Right.

4729 COMMISSIONER MOLNAR: --- Burlington/Oakville area. Were you aware of that?

4730 MS. HANNA: Yes, and I can understand what a difficult decision that must be for Cogeco, because I would not attempt to say that -- the news is important, because again, if we talk about community programming, we want to know what's in our community, and the way to do that is through news. And as we described earlier, we do not have any other media, so it would be invaluable to have better coverage in news.

4731 So I would think it would be a very difficult decision to make, and I think that -- but I do believe that Cogeco still understands the importance of access television, absolutely.

4732 COMMISSIONER MOLNAR: So you're not concerned that by increasing their commitment to providing professional local news, it might impair your ability to access that?

4733 MS. HANNA: No.

4734 COMMISSIONER MOLNAR: No? Perhaps some other folks on the system?

4735 MS. HANNA: You know, when I say I’m not concerned, of course I would be, you know, that -- and I don’t want to be misleading in that answer. Of course I'm going to be concerned. Of course I would hate to see the show not exist because the message is so important. And to be able to have a vehicle like that to get the message out of the mental health surrounding, getting around a table and sitting together with people that care for you. Of course I’d be affected, and of course I don’t want to see that happen.

4736 But again, you know, it’s -- in business and in life there are difficult decisions that have to be made, and I do not have the expertise to fully understand them. I have a little bit of a taste of what's -- the difficult decision all of you have just by the short period of time I've been sitting here. But of course I wouldn’t like to see anyone lose. If I had a perfect world, I would wave my wand and I would make sure that everybody got their wish.

4737 COMMISSIONER MOLNAR: Yeah, me too.

4738 MS. HANNA: Yeah, wouldn’t that be, yeah. We will figure out, maybe we can get together ---

4739 COMMISSIONER MOLNAR: We would all want to not have to make choices ---

4740 MS. HANNA: That’s right, difficult choices.

4741 COMMISSIONER MOLNAR: --- amongst important priorities.

4742 MS. HANNA: Right.

4743 COMMISSIONER MOLNAR: But I think I heard you say -- and I don’t want to put words ---

4744 MS. HANNA: Yes.

4745 COMMISSIONER MOLNAR: --- in your mouth -- so I’m going to ---

4746 MS. HANNA: Absolutely.

4747 COMMISSIONER MOLNAR: --- allow -- allow you to clarify that you felt that local news within your community wasn’t important.

4748 MS. HANNA: Yes, of course, of course, because again, anything that connects us -- as a restauranteur and chef for 33 years, I do my study of people, because I am with people from all walks of life every day of my life, and I have never seen in the history of all my years -- and I've asked my children, “Is it just because I’m getting older and maybe perhaps a little cynical, or is there really something happening out here where we’re disconnecting?”

4749 Well we are, and I could see it in the angst and the anxiety in my guests that come through the door. So anything that makes us feel that we’re connected to each other and could tell a story that is not going to be heard anywhere else, that to me is worth fighting for and preserving at all cost, because I know we need it. And we don’t want to lose it and find out that once it's gone, how intrical and how important it was to our quality of life.

4750 COMMISSIONER MOLNAR: Thank you. Those are my questions and thanks again for making the journey.

4751 MS. HANNA: Thank you to all of you too, thank you.

4752 THE CHAIRPERSON: I believe those are our questions. Just checking my colleagues. Yes, they are.

4753 Thank you very much ---

4754 MS. HANNA: Thank you.

4755 THE CHAIRPERSON: --- for travelling to our hearing, it’s very much appreciated. Thank you. Good travel back, thanks.

4756 Madame la secrétaire.

4757 THE SECRETARY: I would now ask Quebec English-Language Production Council to come to presentation table. Please introduce yourself and you have 10 minutes.

PRESENTATION

4758 MR. COX: These long hearings are quite an educational experience. Chairman Blais and Commissioners, my name is Kirwan Cox and I’m the Executive Director of the Quebec English-language Production Council.

4759 We want to thank the Commission for its recent decisions supporting official language minority production. Your decisions have helped break a 15-year decline in English Quebec production, and have made a difference to our vitality. We sincerely thank you.

4760 Now, let’s look at the bigger picture.

4761 As everyone in this room knows ---

(LAUGHTER)

4762 MR. COX: --- the digital revolution is disrupting the analogue broadcasting system. Canadian content is the victim. Some say discoverability is the solution, but viewers cannot discover what isn’t produced. Even if discovered, no one will watch programs that are not competitive.

4763 We have a crisis in broadcast revenues. Conventional Canadian television advertising peaked in 2011 at $1.9 billion. By 2014, it had fallen to 1.6 billion. BDU cable and satellite subscription revenues peaked in 2011 at 8.1 billion. They fell to $7.6 billion in 2014. That’s a loss of $800 million in three years from these traditional funding sources.

4764 We have a crisis in program funding. The regulated Canadian broadcasting system spent 4.2 billion on programming last year. That number has not grown in the last three years. This 4.2 billion includes 1.2 billion spent on foreign programs, mostly American drama. About 3 billion is spent on Canadian content.

4765 Some say that 3 billion is more than enough money to fund Canadian content. More than enough compared to what?

4766 Netflix will spend $8.6 billion on content this year. The BBC spent $4 billion in 2014. HBO spent 2.8 billion, Amazon 1.8 billion.

4767 Our total national budget for drama and docs by all broadcasters in both languages is only $630 million. We are not competitive in the world of high-end television production.

4768 Netflix and other foreign internet distributors are not regulated and have no Cancon obligations. Their Canadian revenues are unknown, but they are at least $500 million. Most of this money is coming out of the regulated system and leaving the country. It is coming out of Canadian content funding.

4769 CRTC has exempted Canadian internet competitors Shomi and Crave from Cancon requirements to help them compete with the foreign OTTs. We fear we are seeing a race to the bottom, and Cancon obligations will become a thing of the past.

4770 We believe these numbers are clear. We have hit peak production funding within the current system, and face a production funding crisis. The crisis is greatest for English production, but the French market is not immune to these forces.

4771 Either we increase production funding throughout the system or we give up any hope of producing competitive Cancon, and must accept second or third class status within our own country.

4772 Now let’s look at the smaller picture.

4773 Private broadcasters lost $100 million on local TV in each of the last two years.

4774 We can see that OLMC markets are more vulnerable. While the national losses for local TV are about 22 percent, English Montreal stations face average losses closer to 50 percent. We do not think local TV is now sustainable, especially for one or more of the three private stations in Montreal.

4775 However, a reduction in the number of local OLMC broadcasters in Montreal will leave some local programming, nonetheless.

4776 That is not the case for the 250,000 anglophones outside Montreal. Some live in very isolated communities. If you live on the lower north shore, you must travel for two days via Newfoundland to visit Montreal, and then take two days to return. The cost is immense; about $2,000 roundtrip.

4777 They need local reflection in their own language to deal with their isolation, but without a local station, they’re not eligible for the Small Market Local Programming Fund. The broadcasting system has failed this official language minority. We think technology, funding, and this policy review will finally give them a chance to see themselves on their TV sets.

4778 How?

4779 One option might be to increase the CBC budget so the CBC can establish local or regional OLMC news throughout Quebec. Another option might be to provide funding to Vidéotron so it can take up its OLMC community channel licence for MyTV on a provincial basis.

4780 And where is the money to come from?

4781 Your working paper suggests a local news fund would be paid from community TV revenues, and community TV compensated by advertising revenues. I know you’ve heard this before but does robbing Peter to pay Paul solve the larger funding crisis? We think it doesn’t and this is a band-aid solution given the scale of the problem.

4782 We hope you agree that no local TV funding can come from CMF or other current production sources. We need new funding on a scale sufficient to deal with all our Cancon challenges, and we need it sooner than later.

4783 Bell has taken the CRTC to federal court arguing that mobile TV is broadcasting and not telecom. Regardless of the merits of that case, it is apparent the silos are breaking down. We watch movies on our telephones. We talk to our automobiles, and they talk back to us.

4784 It is time that Cancon funding is extended to a percentage of revenues from all communications services, and not only broadcasting services. A 1 percent tax or levy on all $63.2 billion in communications services would raise 632 million in new production funding. With production funding on that scale, we can begin dealing with our production funding crisis at the local, national, and international levels.

4785 Thank you.

4786 THE CHAIRPERSON: Thank you.

4787 And it’s not because your comments aren’t important, I think the room is empty. It’s just unfortunately CPAC is streaming it and we are as well, and so I think people are watching it from other venues.

4788 MR. COX: I understand that the members of my board said they would be watching closely.

4789 THE CHAIRPERSON: Okay, there you go.

4790 So I am going to pass you on to Commissioner MacDonald for some questions.

4791 COMMISSIONER MacDONALD: Good afternoon. Thank you for being here.

4792 I would just like to start off by learning a little bit more about your association and its members, what they do produce in the form of content and sort of where it finds its way into the system.

4793 MR. COX: We have producer members and we have union members. Our union members are the local chapters of ACTRA and the Directors Guild, and there are about 3,000 of them and they work in professional content.

4794 We also have producer members that range in size from Muse, which is one of the largest production companies in Canada along with Cinoflex and other of our members, down to one-person operations.

4795 And so the kind of stuff that we do or our members do ranges from international co-productions with fairly large budgets in the tens of millions of dollars -- one of our members does the English version of “19-2” for example -- down to documentaries and various things that would be at the small-end scale.

4796 One of our members is also EyeSteelFilm, who does feature-length documentaries that are very popular, and they’re seen in theatres as well as on television.

4797 COMMISSIONER MacDONALD: And do any of your producers produce any content that in any way makes it into a news program, like a short exposé on a particular community or a particular subject of interest?

4798 MR. COX: I would say no. They produce documentaries, more or less traditional documentaries and I’m sure that some are producing some kind of reality TV or who knows what. But by and large, they’re independent producers who are producing all kinds of programming for the regular conventional television system.

4799 COMMISSIONER MacDONALD: And obviously this would depend on the producer in question but do you have any sense, sort of on the whole, how much of that content is produced and viewed just in Québec versus outside the province or outside the country?

4800 MR. COX: I would say very little of it is viewed just in Québec. It’s in English. There’s a fairly substantial Anglophone market around the world. The funding to produce high-end programming can’t really be done inside the Québec market alone.

4801 COMMISSIONER MacDONALD: So your producers aren’t working closely with, you know, Vidéotron or the BDUs in Québec or in Canada to view that content? They’re looking elsewhere; it’s more broad in scope?

4802 MR. COX: Yes, I would say that.

4803 Some of our members do things like Aboriginal television, which is on APTN, for example. “Mohawk Girls” is an example, which just won a lot of award nominations by the way. And so APTN is a national network, and they have a partner company which does games and online stuff.

4804 So people are moving into various areas, but I would say our members are not the people that go to Vidéotron and put stuff on MAtv.

4805 COMMISSIONER MacDONALD: Okay, thank you.

4806 You mentioned in your submission that community TV provides an opportunity for media production on the part of your members, and there may be a potential for community TV to also sell some of their programming to local stations.

4807 And I just want to sort of get clarity, currently are your producers selling anything to community television? Is there any sort of relationship there that exists today?

4808 MR. COX: To my knowledge, not. And I’ll try to briefly explain why.

4809 The people that would provide stuff to MAtv can’t afford our dues.

4810 COMMISSIONER MacDONALD: Okay.

4811 MR. COX: And the people that we have who are members can’t afford our dues either by the way.

4812 COMMISSIONER MacDONALD: Okay.

4813 You note that some of the reasons that the system is under strain is because of ad dollars moving away from traditional television stations and going online.

4814 And I just want to get your thoughts. Is this because people in general are viewing more content online than ever before or do you think it’s more reflective of the programming that they can get on their traditional linear station, not being of interest or being reflective of what they would like to see?

4815 MR. COX: I’ll say I’m not an expert in this area, but my impression is that the ad dollars are going down faster than the viewers are.

4816 It’s true, obviously, that viewers are shifting from conventional TV to online platforms. That’s obvious. And some of them are shifting to streaming services like Netflix and others are going to YouTube or going to all kinds of places.

4817 But the loss of viewers is exceeded by the loss of money, because advertisers are not always rational people. They sometimes have a herd instinct similar to investors in a stock market and they know that there’s a disaster going on in conventional TV, they know the ratings are down, and they’re going to leave and they’re going to get modern, and they’re going to go vice, and they’re going to do all kinds of wonderful things, and then it’s hard to convince them, wait a minute, you’re not being rational.

4818 I mean, I remember for years having arguments with various advertisers who were paying less for a Canadian program that, let’s say, had an audience of a million then for American program that had an audience of a million, and I’d say well, why are you paying more for the same audience and they couldn’t come up with a rational explanation except they just knew in their gut that the American program was watched by more people or that people paid more attention or something like that.

4819 So it’s not an entirely mathematical equation all of this.

4820 And the other factor that I think is important is that people tell me that an analogue dollar translates into a digital penny and that a lot of people are saving money by shifting from one to the other and maybe spreading their money out in so many different directions because they’re not sure what to do and that that is a part of the problem.

4821 So it’s now harder to find a particular buyer who can put in the same kind of money that traditional broadcasters could once do.

4822 COMMISSIONER MacDONALD: Okay. So you comment in your submission that all community channel content should be available to everyone, not just subscribers of a particular BDU ---

4823 MR. COX: Yeah.

4824 COMMISSIONER MacDONALD: --- especially official language minority communities as quickly as possible.

4825 Do you believe the same is also true of local stations, or do you feel that those that run some of the local stations are maybe failing to put enough of their content online today?

4826 MR. COX: I suppose what I’m getting at, or what I would like to say is, as a lot of people have told you, the broadcasting says there are three pillars to the broadcasting system, public, private and community.

4827 Since day one -- or before day one, the community sector has been under receivership to the private sector and the private sector has controlled it, run it. And at the very beginning I know that was because Pierre Juneau is fearful of the chaos of all these crazy people, of whom I was one, you know, being in charge of anything, and so therefore he thought okay, we’re going to give it to businessmen to manage and then it will all be okay and he’ll at least get, you know, reports annually and will have somebody to complain to if there’s a complaint.

4828 In those days there were hundreds of cable stations and cable services. Now there are three or four major ones, as you know. And so now everything is concentrated. These are BDU branded channels. They’re not really community channels.

4829 And so we think it’s time, number one, that the community in some fashion be put back in charge of this resource. We think it should be professionally managed, no chaos but a little democracy. And that there should be a board of directors which represents the community, hopefully without knives or anything when they’re organized, then professional people, managers and what have you, will make sure that there’s an annual report and that everything is done properly, and some arms-length distance -- it doesn’t have to be total independent but some arms-length distance from the BDUs.

4830 I’m not sure if I’ve answered your question.

4831 COMMISSIONER MacDONALD: No, that’s very helpful. And I guess what I’m -- what I’m trying to think of if it is time for such a significant paradigm shift in the way the system operates today is, is linear TV still the best method to get that content out to Canadians.

4832 Should -- you know, if more and more people are getting their news online, if more and more people are viewing their content online, should we be looking to either Video on Demand or online platforms like YouTube to house all of that content on a go-forward basis versus the traditional model of operating a station.

4833 MR. COX: I think the traditional model is symptomatic of the fact that the same people have been in charge of these channels for an awfully long time, like about 40 years. And so this is -- they know how to do this, this is how they do it, and it functions fairly well within certain parameters.

4834 If one were to open up this whole thing, community TV, if one were to say you know, let 100 flowers bloom -- although Myles said let 1,000 but I’m not that ambitious -- let 100 flowers bloom -- let experimentation and innovation happen really. Let’s see. Maybe one channel will be VOD, another will be linear. Maybe one will do it one way, another, another. What are the best practices? What can we each learn from each other?

4835 I mean, listening to this hearing, both at CPAC and coming in here, I learn a great deal, as I know you do, and it’s fascinating. And I would like to see some of the people who come here and say, you know, something should be done differently to be given a chance and some of them not. But I would like to certainly see opportunities for a new way of looking at things.

4836 I don’t think we should take the $151 million, cut it in half, give half of it to the BDUs, and then take the other half and say to the people that are left that are still in receivership, you know, do your best and you’ve got half as much money. I would rather say leave the $150 million, organize the whole damn thing differently, make sure it’s professionally managed, make sure there are annual reports and transparency, and then see what happens.

4837 And as for the amount of money that people are losing, you need new sources of money, you really do. And just simply saying we have enough money, we know we have enough money, let’s not talk about new money, now let’s talk about how to reorganize the existing money. In the amount of time you’ve had between Let’s Talk TV and this hearing you see that you’re losing ground.

4838 A lot of people come here and say “Gee whiz, remember LPIF” and your predecessors -- and I emphasize your predecessors -- made a decision that a lot of people felt was short-sighted, let’s get rid of that $100 million in programming money.

4839 Whether it was being spent correctly or organized correctly is a secondary point, but every time you give up programming dollars you give up something extremely precious and that’s hard to reclaim.

4840 And that’s why we’re suggesting a one percent tax, call it what you will, but across the entire board, you know, absolutely everything. And then start to worry about how do you spend that money, is it too much, should these private enterprise guys get a free pass from the rigorous, you know, world of Adam Smith and all of that kind of thing. I think those are things for discussion, how to organize it, and what to do, and who benefits and who doesn’t.

4841 But we need enough money so that we can actually function in this country by seeing ourselves at all levels, at the top level with, you know, high end drama on down to, you know, access programming. And I think we shouldn’t be afraid of experimentation. We shouldn’t be afraid of radical options as long as there’s an accountant in the background.

4842 COMMISSIONER MacDONALD: That’s actually an excellent segue because I wanted to discuss funding actually next.

4843 And in the last paragraph of your oral presentation today you mention the one percent tax or one percent levy, and I just wanted to make sure I’m clear on that proposal. So you’re suggesting that all services that are offered by a company that it applies to the total revenue of that company regardless of whether it comes from television subscriptions or telecommunications revenue or what have you. Is that accurate?

4844 MR. COX: I closely read your communications monitoring report -- and congratulations, by the way, it’s, you know, next to the bible, it’s on my bed stand -- and somewhere in that report it says that all communications revenues in Canada are $63.2 billion in 2014 I think. And so I’m looking at that number.

4845 Now, if Jim Pattison owns a car company I don’t think that’s included in the 63.2 billion but I think cellphones are and I think all other kinds of communications are.

4846 So all I’m saying is we are going to keep coming back to you and to your successors trying to fix the Band-Aid again. If you keep saying well we’re going to not, you know, do too much and we’re going to keep this.

4847 A lot of the ideas that you’re receiving and that you’ve encouraged are increases in vertical funding, if I can use that, from five percent to 5.5 percent and 6.25 percent and so forth, within the same parameters of the broadcasting system. What I’m suggesting is rather than keep piling up on a system that is declining, spread it out horizontally as widely as you can which allows you to go to a lower percentage and raise more money. By the way I keep the 5 percent; don’t let those guys get away with too much. But I’d just spread the 1 percent out as far as possible so that the system has the strength of the entire communications system. And I don’t think that’s an inappropriate, because as I said, you now watch a movie on your cellphone, you know, and God knows what’s going to happen to your car.

4848 THE CHAIRPERSON: Thank you for that clarity on that proposal. Can you comment on statements that were made earlier this week, I think it was on Monday, by Mr. Bragg from Eastlink. He was talking about increases in funding, and a lot of these companies they have shareholders that they need to ---

4849 MR. COX: Satisfy.

4850 THE CHAIRPERSON: --- that they need to satisfy. They also have wide variety of demands on their capital budgets and they need to weigh priorities between building a new cellphone tower in this community or additional funding for this community station versus, you know, other services, higher bandwidth services that their customers may want and demand. And I’m just wondering what your thoughts are if they are operating within a fixed revenue pie, albeit a $63 billion revenue pie, do you think it’s appropriate to reallocate funds from other areas like cellphone towers, like increases in bandwidth, to a suggestion like you’ve proposed to support the broadcast system?

4851 MR. COX: I didn’t hear Mr. Bragg; however, the answer is yes. I feel that content, Canadian content is one of the foundations of this country and to the degree we don’t have it, we’re not going to have a country. And I firmly believe that Graham Sprye was correct when he said in 1932 to a similar group like this the state -- the United States, the government of the day did not accept his position; and, anyway, we have a hybrid model.

4852 So figuring out in a hybrid model how you deal with private enterprise, private revenues, private investment and responsibilities versus public obligations, and Chairman Blais referred to that, I think, earlier today; you know, these two skateboards that you’re skating on and how do you do that, and it’s difficult. I’m not going to pretend it’s not difficult.

4853 I just feel that when it comes to priorities, the priority is that we have to have our own content, given our geography, given especially the fact that we don’t have a language barrier in one of our official languages and we’re not protected by an ocean like Australian and Britain is, we’re an accent like they are.

4854 So we really have to work harder in order to have Canadian content. And in order to do it, and that’s always been the case, there’s never been a successful private enterprise model of production in Canada. But in order to have that we really have to have cross-subsidization.

4855 If you watch an American movie through whatever platform, then a percentage of whatever it is you paid to watch it, even if it’s half a penny, has to go to help support Canadian production. That cross-subsidization is the principle upon which all broadcasting in this country has been based. It is now being disrupted by the internet, Netflix, and all the things you’re aware of. And now the challenge that you face is how to get that basic fundamental principle back in to the system.

4856 You have -- you know, you’re not the government, you can’t rewrite the Broadcasting Act and so you’re hobbled in a lot of ways. You now have a new government which seems to be open to new ideas. I hope that you will, if you feel it’s necessary, write a letter to the Governor in Council saying, “Oh, by the way, if you guys are going to start consulting about things here, we think these are some of the issues that we’re concerned about in terms of our mandate, in terms of the limitations of our mandate.” Not that I’m suggesting you do that but, you never know, you might want to.

4857 COMMISSIONER MaCDONALD: Okay thank you very much, those are my questions for the day.

4858 THE CHAIRPERSON: Thank you. It’s true the room is slightly empty; I’m actually more concerned that the media table is completely empty.

4859 MR. COX: You heard I was coming.

4860 THE CHAIRPERSON: No, I don’t think it’s you. I think that the media attention is only as active as short-term issues can get. And certainly your views are legitimate; I understand you believe them -- fundamentally, that we should get contributions from a wider group of people.

4861 What I’m more concerned about is that there are some Cassandra-like actors out there that go on all the media platforms, talk about all these imminent closures of TV stations, and then quietly come to the hearing and say, “And, by the way, we should fund it by getting extra levies from those that supply cellphones, internet, telephony.”

4862 Fair enough, that is a public policy option. But those Cassandra figures never, ever, ever are transparent on those public platforms with the mainstream media that they’re coming to our hearings to ask for what essentially will be increases to cellphones, internet, telephony bills, and they never come with any evidence suggesting that; in fact, that raises social consensus for that.

4863 I understand this may be a valid option. I don’t want to target you personally but there have been others that come to this and they say, well, you should be financing all this by taxing or getting levies or getting a contribution, whatever word we say from individual subscriber but in the end there’s only one person paying and whether we put the taxpayer hat on or the subscriber hat, it’s the same person.

4864 Fair enough option, but where’s the evidence that Canadians accept that? And I have yet to see it. In fact, I think the overwhelming evidence is that they don’t want to be paying more, and so what are we to do with this?

4865 MR. COX: A lot of people without children don’t want to pay for public education.

4866 THE CHAIRPERSON: Indeed.

4867 MR. COX: But they do, because at some level they understand it’s a public good and they understand it’s in the public interest.

4868 I know a lot of people who don’t want to pay for the military under any circumstances, but they do; some don’t. I would like to call the CBC, the Department of National Defence, I would like to give it the Defence budget which, I don’t know, is at 15 billion; I forget. I would like to give the Department of National Defence the CBC’s budget. Tell them, you know check the border, east, west and north; don’t bother south because if they invade us no one’s going to stop them. And, by the way, if you see a bunch of canoes coming over from Greenland we’re being invaded; speed dial the Pentagon and they’ll take care of it whether we like it or not. And I think that would be a better way of dividing our public resources, to be honest with you.

4869 Because if we have a very strong sense of ourselves, and whether that’s local or national or English, French; however you want to call it, if we have a very strong sense of ourselves then we have a country with a future.

4870 If we don’t have a strong sense of ourselves we can have the best communication system in the world and it’ll be a communication system that simply delivers more American product up here.

4871 So if you put the question in a certain way, you’ll get a certain response. If you say, “Do you want to pay higher taxes?” Everyone will say, “No.” If you say, “Do you want to have a country?” Well, then some people might say, “Yes.”

4872 And if you say something else like, “Okay, we’re faced with a problem. Do you want to have a station in Thunder Bay or not?” I don’t know what the people in Thunder Bay would say; they’d probably say, “Yes, we want to keep it. And if you say, “Okay, well you’re going to have to pay more money in your cellphone or anything else,” okay put it to them.

4873 You’re the one that told us 81, percent of people that you surveyed want local news. They’re losing local news whether they know it or no, and you’re saying, “Okay, we’ve got a solution; steal from community TV, because no one’s watching it, and give it to local news.” Okay, so subsidize the private sector, you know, the stations that are producing the local news. Well, maybe I don’t want to do that. You know, I, taxpayer. But those are the options that you’re providing.

4874 I’m saying there are other options as well, and I think you should look at all the options because we’re all in the same pickle and we’re all in trouble.

4875 And whether or not you want to say, “I don’t want to bail out Bell or BCE. That’s ridiculous; they have enough money they can hang themselves.” But regardless of how you design it, regardless of whether Bell survives or Bragg or somebody in Thunder Bay, however -- whatever rules you put in place and they are difficult and I really say that. I know they are difficult. The end result is I want a country to give to my son and I’m doing it this way.

4876 THE CHAIRPERSON: Well, fair enough. Although, you know, don’t put words in our mouths. We never talked about stealing from A to B. What we said is put out options for comments for discussion purposes.

4877 MR. COX: So am I.

4878 THE CHAIRPERSON: Well I think if you look at the transcript you’ve said that we said “stealing from A to B”.

4879 MR. COX: No, no, I meant I’m putting out options too.

4880 THE CHAIRPERSON: Okay.

4881 And frankly the examples -- and frankly this notion of taking, you know, from Paul -- stealing Paul and giving to Peter or whatever they -- those who have used this, frankly in the end it’s the subscribers dollars.

4882 And what I’m saying to you is I have yet to see anyone coming with evidence that clearly goes just beyond the stations will be closing and actually have put any clear, transparent, evidence based way that because of this, we intend to get extra money out of you the subscribers’ pockets to pay for this.

4883 It may be a valid choice. You give the example of schools; that’s been voted in Canada at a Provincial level. That’s how school taxes work.

4884 The Defense Department has been voted in a parliament, when people have sent their elected officials.

4885 We just had an election on this, on a variety of issues in Canada, and I did not see your proposal in anybody’s platform.

4886 MR. COX: I saw 150 million increase -- not increase, but recovery of money for the CBC.

4887 THE CHAIRPERSON: Fair enough.

4888 MR. COX: And --

4889 THE CHAIRPERSON: But that was transparent, people knew what they were voting for.

4890 MR. COX: -- and parliament has decided on the Broadcasting Act and parliament’s decided on the Official Languages Act and so forth, and all those things, and that’s up to parliament.

4891 THE CHAIRPERSON: M'hm.

4892 MR. COX: And you have your mandate which is limited. And I know that you can’t do some things that some people would like you to do.

4893 But I’ll tell you, if you setup a local news fund and you say that the first thing that has to happen for anybody to become eligible to access it is to go on their local news station, tell their audience we want access to local news fund and in order to get it we’re going to increase your rates, you’re going to get your taxes increased, whatever, I’m sure they would do it.

4894 THE CHAIRPERSON: Except, Mr. Cox, you’ve come here and suggested a one percent levy on cell phones, internet, cable?

4895 MR. COX: Right.

4896 THE CHAIRPERSON: I’m not sure Canadians are expecting that as the outcome in this hearing.

4897 MR. COX: I am saying that Netflix is taking money out of this country and not putting in what they need to put into it for the amount they’re taking out, same with Amazon, same with a lot of people; that you’re very much aware of.

4898 And what are we going to do about that? That’s internet. Okay, I say tax the internet as far as you can and if you, you know, catch those guys great and if the government changes the Broadcasting Act or the Telecom Act to catch them, also great, but that’s that.

4899 If I’m watching a movie on my cell phone, you know, I’m saying oh wow, you know, this is free or this is on YouTube or who -- whatever, I just got a bonus, because I got it for free.

4900 And if you say oh but your bill’s going to go up $0.10 at the end of the month, I don’t think people are going to scream and say okay, you know, I’m not going to pay that.

4901 THE CHAIRPERSON: They may not scream but at least they should know about it.

4902 MR. COX: I couldn’t agree more; all in favour of transparency and democracy.

4903 THE CHAIRPERSON: Right, well I think the debate you should have with -- across the river, in our parliament, if that’s the sort of event -- because I’m not sure we necessarily have the legitimacy to do what you’re putting forward.

4904 MR. COX: You could always take a look at it and see --

4905 THE CHAIRPERSON: Yes.

4906 MR. COX: -- and then you could write in your decision ‘we looked at it and for the following legal reasons we can’t do this’.

4907 THE CHAIRPERSON: Fair enough. Well thank you very much.

4908 MR. COX: Thank you.

4909 THE CHAIRPERSON: Thank you.

4910 MR. COX: Have an early evening.

4911 THE CHAIRPERSON: Yes, well there’s other work at the office working -- waiting for us, so thank you very much.

4912 So we’re adjourned until 9:00 o’clock tomorrow morning. Merci.

--- Upon adjourning at 4:07 p.m.

REPORTERS

Sean Prouse

Nadia Rainville

Marie Rainville

Debbie Di Vetta

Lise Baril

Lucie Morin-Brock

Renée Vaive

Nancy Ewing

Mathieu Philippe

Date modified:

2016-01-27