Transcript, Hearing 20 November 2023

Attendees and Location

Held at:

Conference Centre
Portage IV
140 Promenade du Portage
Gatineau, Quebec

Attendees:

• Chairperson: Vicky Eatrides
• Members: Alicia Barin, Vice Chairperson, Broadcasting
  Adam Scott, Vice Chairperson, Telecommunications
  Nirmala Naidoo, Commissioner, Alberta and the Northwest Territories
  Joanne T. Levy, Commissioner, Manitoba and Saskatchewan
• Legal Counsel: Valérie Dionne
  Bianka Lauzon
• Secretary: Jade Roy
• Hearing Managers: Courtney Fitzpatrick
  Marie Lyse Lavallée

Table of Contents

Presentations

47 Québecor Média, au nom de Vidéotron ltée et de Groupe TVA inc

146 Canada Media Fund

322 FilmOntario

337 Toronto International Film Festival

423 CMPA 83

571 Motion Picture Association-Canada

Transcript

Gatineau, Quebec
20 November 2023
Opening of Hearing at 9:01 a.m.

Gatineau, Québec

‑‑‑ Upon commencing on Monday, November 20, 2023 at 9:01 a.m.

1 LA SECRÉTAIRE : Bon matin.

2 Madame la Présidente, nous pouvons débuter.

3 LA PRÉSIDENTE : Merci beaucoup.

4 Bonjour, tout le monde. Bon matin.

5 I would like to begin by acknowledging that we are gathered here in Gatineau on the traditional unceded territory of the Algonquin Anishinaabeg people. I know that we have many participants joining us virtually and I would encourage everyone to think about the traditional lands that you are on and to pay respect to the Indigenous peoples and their Elders.

6 Let me just start by thanking everyone. Thank you for being here in person and virtually, thank you for taking the time to review the public record, and thank you for the effort that you have put into making your submissions. We know how much work is involved in preparing for these hearings and we want to recognize how important this work is because we need a wide range of perspectives, honest feedback and informed debate to make decisions in the public interest. The fact that so many people are participating in this hearing is a reminder of how critical it is to get this right.

7 As part of this consultation, we received over 360 submissions and we will hear from over 120 presenters over the next three weeks.

8 I know that we are all eager to get started, but before we do, let me just quickly touch on three things: first, some context; second, our approach to modernizing the broadcasting framework; and finally, the questions that we will focus on during this hearing.

9 So, starting with some context. Since joining the CRTC earlier this year, I've had the privilege of meeting with a broad range of stakeholders from across the country. Throughout these meetings, some common themes have emerged. The pace of change is accelerating, business models are under pressure and, above all, the CRTC needs to make decisions and to move forward.

10 We've also heard that Canadians love the content that they have, but some worry that certain types of programming won't be made or will be less available in the future because some content will not be funded by market forces alone. We know that things are changing and we know that the future will bring more change. This is our chance to get ready for it together.

11 To meet this challenge, Parliament has given the CRTC a mandate through the Online Streaming Act to create a modern broadcasting framework, and in the Policy Direction that was issued to us last week the government provided direction to the CRTC on implementing the Act.

12 Le CRTC dispose donc d'outils, d'un mandat et d'une orientation. Cela m'amène à parler de notre approche relative à la modernisation du cadre.

13 Comme nous le savons, les changements nécessaires à la mise en œuvre de la Loi sur la radiodiffusion modernisée sont importants et ils sont complexes. De nombreux enjeux doivent être abordés. Nous avons donc adopté une approche progressive. Depuis le printemps, nous avons organisé quatre consultations concernant le nouveau cadre. Nous avons publié deux décisions, l'une sur les conditions de base des services et l'autre sur l'enregistrement.

14 Dans les mois à venir, nous prévoyons rendre une décision sur la troisième ‑‑ cette décision concerne notre régime de redevances qui couvre les coûts de réglementation du secteur par le CRTC ‑‑ et la quatrième sur les contributions et la raison pour laquelle nous sommes ici aujourd'hui.

15 Au cours des trois prochaines semaines, nous examinerons comment nous pouvons commencer à intégrer les services de diffusion continue dans le système de radiodiffusion. Nous savons que ces services peuvent finir par contribuer de différentes manières, et nous allons aborder la question des contributions générales par étape, mais pour commencer, nous étudions la possibilité de demander aux services de diffusion continue d'apporter une contribution initiale, ce que nous appelons une contribution de base au système de contenu canadien.

16 Nous souhaitons examiner si les services de diffusion continue devraient effectuer ce paiement pour le contenu canadien et si cela contribuerait à uniformiser les règles du jeu avec les entreprises canadiennes qui sont déjà tenues de soutenir le contenu canadien. S'il leur est demandé de verser une mise de fonds, nous voulons connaître leur avis sur le lieu où la mise de fonds devrait être dirigée. Les fonds existent déjà. La contribution de base doit‑elle aller là, ailleurs ou être estimée d'une manière complètement différente, et ces contributions pourraient‑elles être utilisées pour créer un système qui permet à un plus grand nombre de personnes issues de différentes communautés de s'exprimer?

17 To help answer some of these questions during the hearing, we will focus on four specific topics:

18 First, should streaming services make base contributions and, if so, how much should they be asked to contribute?

19 Second, if they do, which services specifically should be asked to make these contributions?

20 Third, if there are new contributions, where should they be directed so that they can best benefit the broadcasting system?

21 And finally, how can our modernized framework ensure support for diverse and accessible content?

22 We look forward to hearing everybody's views on these topics, so let me turn things over to our Hearing Secretary Jade Roy to introduce our team and to explain the procedure that we will be following.

23 Madam Secretary, let's get started.

24 LA SECRÉTAIRE : Merci, et bonjour à tous.

25 The Panel for this hearing consists of:

26 ‑ Vicky Eatrides, Chairperson of the CRTC;

27 ‑ Alicia Barin, Vice‑Chair of Broadcasting;

28 ‑ Adam Scott, Vice‑Chair of Telecommunications;

29 ‑ Nirmala Naidoo, Commissioner, Alberta and the North West Territories; and

30 ‑ Joanne Levy, Commissioner, Manitoba and Saskatchewan.

31 The Commission staff assisting us include:

32 ‑ Courtney Fitzpatrick and Marie‑Lyse Lavallée, Hearing Managers;

33 ‑ Valérie Dionne and Bianka Lauzon, Legal Counsel; and

34 ‑ myself, Jade Roy, Hearing Secretary.

35 Before we start, I would like to go over a few housekeeping matters to ensure the proper conduct of this hearing.

36 Une transcription des comparutions sera affichée quotidiennement sur le site Internet du Conseil le jour suivant.

37 Veuillez noter que les documents seront disponibles sur Twitter, sur le compte du Conseil @CRTCaudiences en utilisant le mot‑clic #CRTC.

38 Just a reminder that pursuant to section 41 of the Rules of Practice and Procedures, you must not submit evidence at the hearing unless it supports statements already on the public record. If you wish to introduce new evidence as an exception to this rule, you must ask permission of the Panel of the hearing before you do so.

39 Please note that if parties undertake to file information with the Commission in response to questioning by the Panel, these undertakings will be confirmed on the record through the transcript of the hearing.

40 The hearing is expected to last 15 days. We will advise you of any scheduling changes as they occur.

41 Participants are reminded that they must be ready to present on the day they are scheduled.

42 Also, when you are in the room, we would ask that you take the time to familiarize yourself with the emergency exits.

43 Please make sure to speak clearly in your microphone, and if you are not speaking, put your microphone on mute.

44 Finally, for the record, we would like to announce that there may be requests for information sent to some interveners after the hearing and that there will be a final submission period providing an opportunity for parties to file brief final written comments that will be announced at a later date.

45 Maintenant, Madame la Présidente, nous commencerons avec la présentation de Québecor Média, au nom de Vidéotron ltée et de Groupe TVA inc.

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

PRÉSENTATION / PRESENTATION

47 M. PÉLADEAU : Merci, Madame.

48 Madame la Présidente, Madame la Vice‑présidente, Monsieur le Vice‑président, Mesdames les Conseillères, nous sommes très honorés d'être les premiers intervenants dans cette importante audience.

49 Permettez‑moi de vous présenter mes collègues.

50 À ma droite, Mme Peggy Tabet, qui est responsable des Affaires réglementaires et environnementales; Yann Paquet, qui est responsable de Québecor Contenu; et

51 À ma gauche, Mme Marjorie Daoust, qui est vice‑présidente, Finances de TVA; et Jean‑François Lescadres, qui est vice‑président, Finances de Vidéotron.

52 Alors, vous me permettrez, Madame la Président, de commencer par une déclaration :

    « À moins de réagir rapidement en outillant adéquatement les entreprises de radiodiffusion et de distribution canadiennes, le Conseil assistera à la naissance d’un cercle vicieux inéluctable : plus la concurrence des Netflix de ce monde se fera vive sur notre territoire, plus les clients des distributeurs comme Vidéotron se désabonneront, plus les contributions de ces distributeurs au financement de la programmation canadienne via le Fonds canadien des médias et d’autres fonds d’investissement diminueront, plus l’auditoire des diffuseurs comme TVA se fera rare et plus les revenus des entreprises locales chuteront. En d’autres termes, c’est l’existence même de nos industries culturelles qui est mise en péril. »

53 Alors, cette déclaration, Madame la Présidente, je l'ai faite devant le Conseil le 20 juin 2011. Malheureusement, 12 ans plus tard, force est de constater qu’absolument rien n’a changé et que les enjeux ne sont qu’exacerbés. Au lieu de déréglementer les entreprises locales et d’alléger leur fardeau réglementaire, la Commission, malheureusement, n’a fait qu’en rajouter.

54 Ce faisant, aujourd’hui, l’existence même de nos industries culturelles est grandement menacée. Dans cette chronique d’une crise annoncée, les entreprises de programmation privées subissent plus que jamais le déclin de leurs auditoires et de leurs revenus publicitaires et d’abonnements, ainsi que l’augmentation des droits de diffusion.

55 En 2022, pour la dixième année consécutive, les stations généralistes privées présentaient un BAIIA négatif, avec des pertes 50 pour cent plus importantes qu’en 2021 et un déficit de 151 M de dollars par rapport à 2016, avec une baisse significative de leurs revenus publicitaires de l’ordre de 157 M.

56 En ce qui concerne le Réseau TVA, de 2016 à 2022, son BAIIA a chuté de 52 M. Les résultats financiers du troisième trimestre de Groupe TVA, annoncés le 2 novembre dernier, confirment ces constats et illustrent davantage les effets dramatiques de cette concurrence sur ses revenus, avec un déficit cumulé de près de 13 M pour son secteur de télédiffusion depuis janvier, contre 1,6 M à pareille date l’année dernière.

57 Rappelons que la publicité, source de revenus principale et unique pour la télévision généraliste, est aujourd’hui l’apanage des plateformes numériques. En 2022, 80 pour cent des revenus publicitaires sur Internet étaient accaparés par Facebook et Google, pour un total de plus de 11 milliards de dollars.

58 Depuis plus d’un an maintenant, cette situation est également aggravée par la multiplication des offres avec publicité proposées par les services en ligne étrangers à l’image de Netflix, Disney+, et prochainement Amazon Prime Video ainsi que Paramount+, ainsi que les offres non réglementées FAST (Free Ad‑Supported Television), comme Pluto TV et Roku Channel, qui offrent des chaînes linéaires gratuites dont le modèle d’affaires est basé sur la vente de publicité et qui n’ont aucune exigence de distribution de chaînes obligatoires à la base.

59 D’ailleurs, Netflix a annoncé l’augmentation de ses prix pour les offres sans publicité, favorisant ainsi son forfait avec publicité qui attire déjà 30 pour cent de ses nouveaux abonnés. En quelques mois seulement, grâce aux revenus publicitaires, ce forfait lui a procuré une marge bénéficiaire supplémentaire de 50 pour cent qui s’additionne à ses revenus d’abonnements.

60 Selon une étude récente, 63 pour cent des utilisateurs de plateformes en ligne regarderont des contenus sur un service de Vidéo Sur Demande Financé par la Publicité (VSDFP) dans la prochaine année. Si nous croyions que la situation était grave aujourd’hui, osons imaginer ce qu’il en sera demain alors que ces services en ligne étrangers accroissent jour après jour les déboires de nos entreprises locales et menacent indubitablement leur pérennité.

61 C’est donc pour assurer son avenir dans le contexte de cette crise sans précédent que le 2 novembre dernier Groupe TVA a, malheureusement, dû annoncer son plan de réorganisation majeur axé sur le resserrement de sa mission de diffuseur et une restructuration de son secteur de l’information, entraînant malheureusement la suppression de 547 postes, soit 31 pour cent de son effectif. Ce plan est essentiel à la survie de TVA, qui est dorénavant poussée dans ses derniers retranchements pour tenter de continuer à proposer aux Québécois et aux Québécoises des contenus locaux de divertissement et de l’information de qualité, tout en continuant de contribuer à l’écosystème de la production indépendante au Québec qui est si importante.

62 Par ailleurs, la situation est toute aussi préoccupante du côté des télédistributeurs canadiens qui, année après année, subissent une baisse de leurs abonnements au profit des services en ligne étrangers. De 2016 à 2022, ils ont ainsi perdu plus de 1,4 million d’abonnés au Canada. Au Québec, en 2021, un important point de bascule a été atteint lorsque les foyers abonnés à un service payant de visionnement en ligne ont dépassé ceux abonnés à un service réglementé de télédistribution.

63 Quant à Vidéotron, de 2016 à 2022, l’entreprise de télédistribution a perdu près de 20 pour cent de sa base d’abonnés. Cette tendance lourde au débranchement, à la réduction des services ou à l’absence totale d’abonnement, les cord never, elle s’intensifie, comme le démontre une récente étude indiquant que 24 pour cent des Canadiens visionnant du contenu en ligne entendent annuler ou réduire leur abonnement au câble dans les 12 prochains mois, soit une perte catastrophique de plus de 2,3 millions d’abonnés.

64 La décroissance importante des revenus des télédistributeurs ne fera que s’accentuer, impactant toujours davantage leur capacité à contribuer au contenu canadien. De 2016 à 2023, les rapports financiers du Fonds des médias démontrent que les contributions des EDR ont diminué de 21 pour cent, passant de 216 M à 171 M. Là encore, si nous pensions que la situation était grave, elle le sera encore plus dans un avenir très rapproché.

65 Cette crise majeure résulte en partie du fardeau réglementaire et financier très lourd et archaïque qui prive nos entreprises d’une flexibilité dont elles ont cruellement besoin pour maintenir leur compétitivité et assurer leur survie. Sans un carcan réglementaire qui nous exige un service de base obligatoire, avec des chaînes à distribution obligatoire, des quotas de diffusion et de programmation, des rapports pardessus rapports, et la liste continue, nos entreprises auraient peut‑être eu de meilleures chances pour innover et se réinventer. Sans cette réglementation désuète qui nous oblige aussi de maintenir la distribution de nos services de programmation malgré qu’ils ne soient pas rémunérés à leur juste valeur marchande, les chaînes de TVA auraient sans doute aujourd’hui, de la part de Bell comme distributeur, des redevances à la hauteur de leur popularité.

66 Ainsi, en terminant, Madame la Présidente, sans une révision en profondeur et un allégement important du cadre réglementaire, la bataille que nous livrons à armes inégales contre les services en ligne étrangers aura raison des entreprises de radiodiffusion d’ici, et cela, je crois bien sincèrement, au détriment complet de l’intérêt public.

67 Merci de votre attention, Madame la Présidente.

68 À la lumière de ce triste portrait, et puisque le gouvernement et le CRTC ont choisi de réglementer l’irréglementable ‑‑ et nous l’avons récemment constaté avec Meta qui a tout simplement bloqué les sites de nouvelles au Canada et avec Google qui menace de suivre la parade ‑‑ nous sommes fermement convaincus que, malheureusement, les entreprises en ligne étrangères ne se conformeront à aucune contribution obligatoire. Il aura fallu des années avant que le Québec instaure en 2019 la taxe de vente sur les services en ligne étrangers et un autre trois ans pour que le gouvernement fédéral impose à son tour cette même taxe, en 2021.

69 Ainsi, le congé réglementaire dont bénéficient les entreprises en ligne étrangères depuis des années risque tout simplement de se poursuivre.

70 D’ailleurs, les plateformes étrangères continuent de proposer au CRTC des obligations de dépenses en émissions canadiennes, tout en voulant en modifier la définition, ayant pour seul objectif de servir leurs propres intérêts, au détriment d’une réelle contribution à l’ensemble du système canadien de radiodiffusion. Faut‑il rappeler le fiasco de l’entente de 500 millions de dollars conclue entre Netflix et Patrimoine canadien qui ne fut que de la poudre aux yeux, sans aucune reddition de compte? Gardons‑nous de tomber deux fois dans le même piège.

71 La seule et unique solution sur laquelle le CRTC peut exercer une réelle emprise afin d’assurer la pérennité de nos entreprises est, à notre avis, un allégement important et immédiat du fardeau réglementaire et financier des entreprises traditionnelles canadiennes.

72 D’ailleurs, une autre solution qui aurait dû être adoptée il y a plusieurs années est la suppression de la publicité sur toutes les plateformes de la Société Radio‑Canada, qui continue à ne pas respecter son mandat public en concurrençant de façon déloyale les entreprises privées.

73 Donc, en conclusion, en réelle conclusion, conséquemment et considérant le contexte extrêmement difficile dans lequel nous évoluons, nous souhaitons que le Conseil agisse immédiatement. Les entreprises canadiennes ne peuvent plus attendre la fin du long processus de mise en œuvre de la nouvelle loi sur la radiodiffusion. Nos médias sont exsangues et notre démocratie est en jeu. Nous avons pris les mesures qui s’imposaient pour adapter nos modèles d’affaires et tenter de remédier à cette crise. C’est maintenant à la Commission d’agir sans plus attendre.

74 Merci de votre attention. Nous sommes maintenant prêts à répondre à vos questions.

75 LA PRÉSIDENTE : Merci beaucoup, monsieur Péladeau, pour la présentation et d’avoir été le premier à présenter ce matin. Alors, moi, je vais passer la parole à votre vice‑présidente de la radiodiffusion, madame Barin, pour commencer avec les questions.

76 VICE‑PRÉSIDENTE BARIN : Merci beaucoup, Madame la Présidente. Bienvenue, monsieur Péladeau, à vous et votre équipe, et merci pour votre présentation de ce matin. Vos perspectives sont notées.

77 Je vais poser des questions qui sont en lien avec les propositions que vous avez faites dans vos interventions écrites dans ce processus, où, entre autres, on a demandé des commentaires sur une contribution de base imposée sur les plateformes en ligne. Vous avez proposé un seuil de contribution de 20 pour cent pour les entreprises en ligne et 5 pour cent pour les EDR virtuelles.

78 J’aimerais savoir pourquoi vous pensez que le Conseil devrait imposer des seuils de contribution différente selon le type d’entreprise et qu’est‑ce que vous comprenez par les EDR versus les services de programmation en ligne? Alors, selon vous, c’est quoi la différence? Peut‑être que vous pouvez nous fournir des exemples.

79 M. PÉLADEAU : Merci, Madame la Vice‑présidente. Je vais demander à madame Tabet, donc, effectivement, donc, de pouvoir procurer la nuance qui est celle à laquelle vous faisiez référence.

80 Mais en même temps également aussi, je tiens en démarrant ou en débutant, si vous préférez, de nouveau peut‑être insister sur le fait que, vous le savez, donc, ces entreprises ont un rayonnement mondial. Leur marché est mondial. Leur marché n’est pas national et d’aucune façon ils ont considéré... Et d’ailleurs, la preuve est là pour le prouver, qu’aucune licence ne leur était nécessaire pour entamer l’exercice dans lequel ils ont été entraînés ou dans lequel ils ont entraîné les différents pays sur lesquels aujourd’hui ils règnent presque en rois et maîtres et qu’ils viennent déclasser, donc, les entreprises conventionnelles ou historiques.

81 C’est vrai pour le Canada, mais c’est vrai également aussi pour tous les autres pays occidentaux. Alors, la raison pour laquelle nous intervenons, dans le fond, si vous êtes en mesure de pouvoir imposer une réglementation, nous le souhaitons, mais nous sommes dubitatifs de votre capacité réglementaire ou législative de le faire. Et nous avons vu à ce jour la façon dont ces entreprises se comportent à l’égard des offices de réglementation des différents pays.

82 Et c’est la raison pour laquelle nous sommes hautement dubitatifs en ce qui concerne la suite. Et c’est pour cette raison également aussi que nous considérons que, si une absence de législation ou de réglementation devait s’imposer, la meilleure réplique, c’est de faire en sorte que nos entreprises conventionnelles puissent avoir les coudées franches pour faire en sorte de les affronter parce qu’il s’agit véritablement d’un affrontement. Donc, je vais laisser à madame Tabet, donc, l’occasion de répondre plus en détail à votre question, Madame la Vice‑présidente.

83 MME TABET : Merci, Madame la Vice‑présidente. Donc, pour répondre à la question, la différence entre le 20 pour cent et le 5 pour cent, pour commencer, on considère que les entreprises en ligne, comme Netflix, les Amazon ne sont pas des entreprises de programmation ni des entreprises de télédistribution. Donc, même la Loi sur la radiodiffusion leur reconnaît une catégorie distincte.

84 Ce faisant, elles produisent et acquièrent du contenu, comme une entreprise de programmation, mais elles ont aussi une relation directe avec le consommateur, comme une entreprise de distribution. Ce faisant, elles ne sont ni l’une ni l’autre, elles sont une catégorie à part, d’où le 20 pour cent qu’on propose de leurs revenus bruts.

85 Pour les EDR virtuelles, on reconnaît qu’il n’y en a pas encore beaucoup. C’est pas... il y a YouTube TV, mais que je pense qu’il n’est même pas accessible encore au Canada. Donc, c’est pour le futur. Si jamais il y en a, ce serait à 5 pour cent. Évidemment, elle se prête plus à une EDR... à la façon qu’une EDR traditionnelle, malgré qu’elles ne sont non réglementées, d’où le 5 pour cent. Et, ça, on parle de contribution initiale. On verra par la suite comment à la phase 2 le CRTC va voir les contributions et va alléger le fardeau réglementaire. Donc...

86 Et tout ça, dans les faits, ce pourcentage‑là est basé sur des estimations qu’on a. On n’a même pas les vrais chiffres de ce que les revenus représentent de ces entreprises‑là. Donc, c’est comme ça qu’on le voit.

87 VICE‑PRÉSIDENTE BARIN : Alors, si je comprends bien, advenant le cas que les EDR en ligne ne sont pas encore, disons, des entreprises concrètes, si le Conseil était pour imposer un seuil unique, selon vous, ce serait le 20 pour cent pour les...

88 MME TABET : Tout à fait, oui.

89 VICE‑PRÉSIDENTE BARIN : Alors, ma deuxième question, peut‑être... bien, n’est pas nécessairement en ligne avec un seuil de 20 pour cent, mais j’aimerais vous demander si vous avez lu l’intervention de Rogers, j’aimerais savoir ce que vous pensez de la proposition de Rogers à l’effet que les contributions de base soient fixées à 2 pour cent des revenus bruts de radiodiffusion de l’année.

90 M. PÉLADEAU : Comme vous savez, nous avons beaucoup de respect pour nos amis chez Rogers, une belle et grande entreprise canadienne. Nous devons quand même constater que le périmètre de radiodiffusion est différent de celui dans lequel Québecor est engagé maintenant depuis, donc, une vingtaine d’années. Je crois également aussi qu’il est important de souligner la contribution remarquable du Groupe TVA, donc télévision privée à l’intérieur de notre écosystème culturel et également aussi la promotion de la langue française, qui peut d’une certaine façon donc orienter différemment notre position versus celle de commenter sur cette considération que nous trouvons plutôt étonnante d’ailleurs.

91 MME TABET : Oui, effectivement. C’est étonnant, en fait, que Rogers propose seulement 2 pour cent. Si on veut vraiment faire une différence puis vraiment aider les entreprises d’ici, 2 pour cent nous semble très, très bas. D’ailleurs, ça se chiffre à quelques millions de dollars. Donc, je ne comprends pas comment on peut vraiment faire une différence, aider les entreprises d’ici et remédier à la crise actuelle avec seulement un 2 pour cent, d’où notre proposition de 20 pour cent pour vraiment amener un montant substantiel, de l’argent neuf pour vraiment effectuer une réelle différence puis remédier à la crise actuelle des médias.

92 VICE‑PRÉSIDENTE BARIN : Merci. Alors, avez‑vous une position par rapport à la proportion de la contribution de base qui devrait être allouée au marché francophone versus le marché anglophone?

93 MME TABET : Oui, bien, je pourrais commencer. Puis peut‑être, Yann, tu peux compléter pour le marché francophone. En fait, nous, ce qu’on propose, c’est 60 pour cent des 20 pour cent vont à des fonds de production pour le contenu canadien, comme le Fonds des médias et les FP qui sont déjà en place; 30 pour cent pour la production de nouvelles; et 10 pour cent pour les services obligatoires et d’autres politiques sociales, mais surtout pour les services obligatoires, encore une fois pour alléger notre fardeau réglementaire.

94 Pour ce qui est de la division franco/anglo, je vais laisser Yann compléter la réponse.

95 M. PAQUET : Oui, en fait, c’est essentiel qu’il y ait de l’argent qui soit réservé pour le marché francophone. C’est déjà dans les règles du FMC. Donc, je pense que c’est la poursuite de ce qu’on retrouve actuellement dans la façon de fonctionner. Ça représente à peu près le tiers du budget du FMC qui est alloué au projet francophone. On parle depuis plusieurs années d’augmenter ce pourcentage‑là à 40 pour cent, qui devrait, à notre avis, être vraiment un minimum.

96 On a besoin que ce changement‑là se fasse de façon le plus rapidement possible parce qu’il y a actuellement un déséquilibre important entre les marchés francophones et anglophones. Dans le marché francophone, le contenu local est au cœur de notre offre sur l’ensemble de nos plateformes. Ça fait partie de la culture. C’est très, très important. Ça fait partie du ciment de notre culture francophone.

97 Et, quand on regarde la façon dont le FMC contribue du côté francophone et anglophone, on peut voir que le financement dans une production, en moyenne, le financement du côté francophone qui provient des diffuseurs représente 50 pour cent des budgets de production alors qu’il représente environ 20 pour cent des budgets de production du côté anglophone. Donc, il y a clairement un déséquilibre à ce niveau‑là et il faut certainement pouvoir compenser ça en réajustant les pourcentages du côté du contenu francophone.

98 VICE‑PRÉSIDENTE BARIN : Merci pour votre réponse, monsieur Paquet. Alors, je vais poursuivre sur des questions en lien avec ce troisième volet de votre proposition pour un nouveau fonds destiné au soutien des services à la distribution obligatoire, les 9(1)h). Est‑ce que, selon vous, ce fonds serait pour pouvoir retirer, en fait, le tarif de gros actuel ou bien... De quelle façon ce fonds appuierait les services 9(1)h)?

99 MME TABET : Vous savez, Madame la Vice‑présidente, nous, ça fait des années qu’on dit que les services 9(1)h) devraient être financés par le gouvernement, que ça ne devrait pas être financé par les services... les entreprises de télédistribution.

100 Ce fonds, comment il fonctionnerait, nous, on continue à distribuer les services obligatoires à la base puisqu’on a une obligation de service de base. Par contre, on ne veut plus les financer. Et puisque le gouvernement ne semble pas vouloir les financer plus, donc, on a proposé la création de ce fonds‑là. Idéalement, évidemment, il financerait la totalité de tous les services obligatoires 9(1)h) de tous les télédistributeurs, ne sachant pas combien ça pourrait représenter, le 10 pour cent, parce qu’on n’a pas exactement... on a juste des estimations en ce moment. Donc, idéalement, ça financerait tous les 9(1)h).

101 Maintenant, si ça finance une partie, ça sera déjà ça. Mais, idéalement, ça serait... tous les 9(1)h) seraient financés par ce fonds‑là. J.‑F., je ne sais pas si tu veux ajouter quelque chose.

102 M. LESCADRES : Oui, si je peux me permettre d’ajouter à madame Tabet, lorsqu’on regarde un peu ce que Québecor contribue au 9(1)h) via Vidéotron sur une base annuelle, on parle d’environ 25 millions de dollars qui est amené et qui, d’une part, continue à être soumise aux pressions sur la télédistribution. Donc, évidemment, les sommes en raison du nombre d’abonnés qui diminue, on a parlé dans l’allocution de monsieur Péladeau d’une baisse de presque 20 pour cent du nombre d’abonnés de télédistribution dans un mouvement qui ne se limite certainement pas au Canada.

103 Lorsqu’on regarde ce qui se passe aux États‑Unis, on voyait les résultats récents tels Comcast, qui présente une baisse de ses abonnés de télédistribution de 12 pour cent sur un an, on voit un peu bien souvent ce qui se passe aux États‑Unis être un précurseur de ce qui s’en vient.

104 On voit certainement un enjeu potentiel en avant de nous sur le financement de ces chaînes‑là auquel on est soumis et qui se... auquel s’ajoutent des obligations supplémentaires notamment avec l’introduction de nouvelles chaînes, comme celle de Natyf, qui a été annoncée qu’il y a quelques mois, qui ajoute un poids en réalité sur les gens, les gens qui choisissent la télédistribution. Parce que, évidemment, oui, ce sont nous qui les distribuons. Mais ces frais‑là s’ajoutent à la structure de coût que nous devons supporter et qui sont donc financés par un nombre de moins en moins élevé de consommateurs.

105 VICE‑PRÉSIDENTE BARIN : Alors, si je comprends bien, quand vous dites financer les services 9(1)h), effectivement, ça serait de compenser pour le tarif en gros qui est actuellement payé par les EDR.

106 MME TABET : Oui.

107 VICE‑PRÉSIDENTE BARIN : Alors, ma question pour vous, c’est si ce fonds vise à soutenir essentiellement des services, comment vous voyez que ça répond aux objectifs de la Loi sur la radiodiffusion qui vise à soutenir les producteurs, incluant les producteurs des groupes en quête d’équité, les producteurs autochtones? Alors, selon vous, ce financement devrait‑il être orienté en priorité vers les producteurs et non les radiodiffuseurs, c’est‑à‑dire, ce financement devrait‑il servir à financer les productions, la programmation et non de compenser le tarif en gros?

108 M. PÉLADEAU : C’est intéressant, donc, évidemment, ce que vous dites, Madame la Vice‑présidente, là. Mais le résultat des courses (ph), comme malheureusement trop souvent lorsque le fardeau est trop important sur les distributeurs, c’est que tout le monde est perdant, dont notamment les radiodiffuseurs et les producteurs parce que nous ne sommes plus en mesure de pouvoir consacrer, donc, les sommes nécessaires pour justement avoir une programmation de qualité avec tous les intervenants, ceux et celles qui composent notre paysage audiovisuel.

109 Nous sommes d’avis et probablement et également aussi que l’État, par le biais de la Loi sur la radiodiffusion, a une mission d’intérêt public. Et c’est celle qui notamment est celle de distribuer et les chaînes que le législateur ou que la Commission considère être d’importance pour l’intérêt public ou l’intérêt national, ce à quoi, évidemment, d’aucune façon nous nous opposons.

110 La problématique est la suivante. C’est celle de l’obligation du financement qui vient peser sur la capacité de pouvoir proposer des solutions ou des offres qui vont être à la hauteur des phénomènes auxquels la distribution, malheureusement, est confrontée, c’est‑à‑dire celle du cord shaving, du cord never. Excusez‑moi les expressions, mais vous êtes familière avec ça, pour enfin rétablir une proposition qui va être concurrentielle ou compétitive avec, donc, les distributeurs en ligne étrangers qui, eux, décident quelles vont être leurs propositions, leurs promotions, avec ou sans publicité. C’est ce que nous voyons aujourd’hui.

111 Quelles vont être les prochaines évolutions commerciales ou technologiques qu’ils vont proposer aux Canadiens comme ils vont proposer également aussi, t’sais, à la planète tout entière? Nous ne le savons pas pour l’instant. Mais, ce que nous savons, c’est que ces entreprises rayonnent sur le marché mondial et ont une superficie financière absolument invraisemblable.

112 T’sais, même, pour certaines d’entre d’elles... Jean‑François parlait de Comcast, qui est le plus important télédistributeur américain, bien, ils sont loin d’avoir la capitalisation boursière de Netflix et d’Amazon ou d’Apple, qui, dans le fond, quelquefois, on peut considérer donc leurs aventures... Peut‑être pas Netflix parce que c’est la mission principale. Mais pour Apple puis Amazon, un outil presque anecdotique servant à la promotion de leurs autres services. Ce qui, évidemment, n’est pas la nature profonde d’un radiodiffuseur canadien ou d’un distributeur canadien.

113 MME TABET : Je peux peut‑être compléter les propos de monsieur Péladeau et de répondre plus précisément à la question. En fait, les producteurs autochtones, les producteurs de communautés en quête d’équité et de groupes ethnoculturels sont déjà servis dans le Fonds des médias. Et, tout récemment, le CRTC a accepté en fait de nouveaux fonds indépendants, dont le Bureau de l’écran noir et le Bureau de l’écran autochtone.

114 Ce faisant, dans le 60 pour cent, cet objectif‑là que vous recherchez est déjà atteint et sera atteint. Le 10 pour cent, lui, il va aussi atteindre les objectifs de la loi parce que c’est des services exceptionnels, comme la loi les a qualifiés. Donc, c’est normal que la contribution pour des services exceptionnels atteigne aussi les objectifs de la loi.

115 Mais tous les objectifs dont vous avez parlé vont être atteints dans le 60 pour cent.

116 VICE‑PRÉSIDENTE BARIN : Merci. Alors, je pense que j’ai bien compris maintenant le fonctionnement que vous prévoyez pour ce deuxième fonds que vous proposez. Je vais maintenant me tourner vers les fonds de production indépendants certifiés. Selon vous, les entreprises en ligne étrangères ne devraient pas être autorisées à créer des fonds de production indépendants certifiés.

117 Est‑ce que votre position serait différente si le Conseil modifiait sa politique relative aux Fonds de production indépendants certifiés? Autrement dit, est‑ce qu’il y a selon vous une situation ou des conditions ou des critères qui font en sorte que les services étrangers pourront en avoir accès?

118 MME TABET : Donc, notre position, c’est que, non, ils ne devraient pas avoir accès. Le but des contributions, c’est d’aider le système canadien dans son ensemble de radiodiffusion. Si on donne accès à ces entreprises‑là, ce sera un cercle. Ils vont donner de l’argent pour le retirer. Et on ne voit pas comment ça pourrait aider le système. Ce faisant, ce n’est pas un prérequis parce qu’on contribue à un fonds de retirer de ce fonds‑là. Les entreprises de télédistribution depuis des lunes contribuent au Fonds des médias et ne retirent pas de ce fonds des médias.

119 Donc, nous, notre position, c’est que, non, elles ne devraient pas retirer si on veut vraiment faire une vraie différence dans le système et adresser la crise des médias, les entreprises étrangères devraient contribuer. Elles n’ont contribué... On a contribué pendant des années, Madame la Présidente. C’est à leur tour maintenant de contribuer.

120 VICE‑PRÉSIDENTE BARIN : Je comprends. Merci beaucoup, madame Tabet. Alors, à ce point‑ci, ça fait le tour de mes questions. Je vais repasser la parole à la présidente et voir s’il y a d’autres questions des membres du panel. Merci beaucoup pour votre survol aussi de la situation actuelle.

121 LA PRÉSIDENTE : Merci beaucoup. Peut‑être on peut continuer avec un autre membre, Levy. Merci.

122 COMMISSIONER LEVY: Good morning. I am interested in the fact that you have been predicting the predicament that we seem to be in so many years ago. How have you responded over that time to the new realities and the new players in the system?

123 MR. PÉLADEAU: Well, you know what, we anticipated that, you know, this kind of environment will arrive. And we start by doing certain things. And those things today I think could be and should be considered by the fact that, you know, we've been investing even more money in local production.

124 We started our own streaming service, Club illico, and more recently, you know, Club illico is now nine years, 10 years old, for which, you know, we proposed to our audience some very strong local content, local content that was pretty expensive because sometimes, and unfortunately, you know, you would be able, you know, to have good results according to the amount of money that you will be ready to invest.

125 And I think that, you know, we were, you know, “visionary” in a certain word or certain sense, because there were no such a thing, you know, in Canada before. And we're continuing doing so.

126 But unfortunately, again, it's a matter of the capacity that you have to invest money. And regarding, you know, the landscape I described earlier, it's unfortunate that we do not have the same capacity or power we had before to consider that we will invest more and compete against the huge programming that Amazon, Apple and Netflix and proposing. Even more today, you probably know that sports, which was something that we had a kind of exclusivity in Canada, is now challenged by the fact that, for instance, Amazon broadcasts football games on Thursday. As a broadcaster, TVA Sports lost the MLS, the Major League Soccer, to Apple, and that will continue. This is something that we are facing right now and will again scramble the way that we were doing things before.

127 COMMISSIONER LEVY: You have responded to the challenges within your ability. Looking ahead, you have talked about a deregulated system in Canada. What would that look like?

128 MR. PÉLADEAU: Well, you know, unfortunately, sometimes when we're talking about this ‑‑ it's not unfortunate, but, you know, we will be forced to do it. And I'm not going to say that, you know, the devil is in the details, but somewhere it is the matter.

129 Regulation is of importance in terms of what we need to produce, in terms of what we need to finance, in terms of what we need to consider, facing the Commission that regulates the business or the industry forever and, unfortunately, and Jean‑François was referring to that, instead of going in this direction, which at a certain point ‑‑ well, maybe I should say that with reservation because we recently heard that the Commission was ready to consider reviewing certain things, you know, with what's happening with Corus right now, an announcement you made maybe two‑three weeks ago.

130 But on the other side of the equation, and this is what Jean‑François was referring to, we have an additional 9(1)(h). So how we are going to be able to deal with those kinds of situations, this, we don't know, but we certainly consider deeply that a move in deregulation ‑‑ it's not because we like deregulation, it is what it is, the effect is that regulation is not as powerful and is not as efficient as it used to be when Canada was kind of isolated, where Canada, if you want to be a broadcaster or a distributor, you need a licence. Now, globalization makes countries irrelevant. It's unfortunate to say that, but it's the reality.

131 COMMISSIONER LEVY: Where is the role of cultural sovereignty in that ecosystem and how can we ensure it, especially given the unique challenges that we have in Canada or unique opportunities, I would say? Because I think the French fact in Canada has contributed enormously, especially in your business. You are the most successful in Canada, really, when it comes to the French audiovisual industry. But cultural sovereignty is important. How do we ensure it?

132 MR. PÉLADEAU: You're right, Commissioner. We take this very seriously and I think that, you know ‑‑ I mentioned the kind of unfortunate situation that we were meeting. On the other side of the equation, we also have positive aspects. The positive aspect is that we know more than those global companies what Québec is all about, what the French culture, what the French broadcasting business is all about. We have the capacity to understand, which for them will probably not be the same because they think globally and that is the way their business is. This is why I think that we are in the right position to continue what we have been doing in the past, with the reservation I mentioned to you that we need to have more of a free hand and more financial capacity of meeting what we consider to be the protection of our sovereign industry and culture.

133 COMMISSIONER LEVY: Thank you.

134 LA PRÉSIDENTE : D'accord. Alors, moi j'ai quelques questions qui sont vraiment reliées, qui sont des questions de plus haut niveau.

135 Alors, s'il y a une chose dans votre présentation qu'on devrait retenir, c'est quoi? Relié à ça, c'est quoi la chose la plus importante ou peut‑être la priorité pour nous le Conseil quand on prend notre décision? Et de même, quelle est la seule chose qu'on ne devrait pas faire? Alors, ce sont trois questions qui sont vraiment reliées.

136 M. PÉLADEAU : Oui, Madame la Présidente. Je vais essayer de résumer, bien que je pense que quand même mon intervention était... à moins qu'elle soit confuse. En même temps aussi, je suis un peu mal à l'aise de répéter depuis les 10 dernières années ou presque la même chanson.

137 Mais at the end of the day, as we say, la situation est grave et c'est la raison pour laquelle aujourd'hui des gestes doivent être posés pour que toute notre industrie, que ce soit les radiodiffuseurs ou nos distributeurs, qui contribuent de façon égale ou de façon concomitante à la protection de notre industrie culturelle, parce que nous savons fort bien que c'est un vecteur, la distribution et la radiodiffusion c'est un vecteur important, comme le disait madame la conseillère Levy, de notre souveraineté culturelle, de notre souveraineté nationale, que nous nous engagions très sérieusement dans la déréglementation qui va permettre à ces industries d'avoir des capacités financières plus importantes et faire en sorte d'affronter ‑‑ je répète ‑‑ d'affronter la situation extrêmement compétitive, extrêmement concurrentielle à laquelle elle est confrontée en raison de la technologie et en raison de la mondialisation.

138 Alors, donnons‑nous les moyens les plus efficaces, les plus puissants possibles, bien que, toute proportion gardée, évidemment, nos moyens sont bien moins considérables que ceux auxquels nous sommes également... nous devons faire face, mais au moins, à ce moment‑là, on va avoir des moyens supplémentaires. Et avec, ce que je disais à madame la commissaire également aussi, cette sensibilité que nous avons de notre marché, qui est un écosystème assez solide, avec les comédiens, avec les auteurs, avec les techniciens, tous ceux et celles donc qui travaillent dans cette industrie sont en mesure, et ils l'ont fait dans le passé, de contribuer de façon extrêmement importante justement à ce vecteur de la protection de notre souveraineté culturelle.

139 LA PRÉSIDENTE : Merci. Alors, je regarde s'il y a d'autres questions. Peut‑être je peux vous donner le dernier mot. Est‑ce que vous avez quelque chose à ajouter?

140 M. PÉLADEAU : Honnêtement, Madame la Présidente, nous vous remercions encore une fois de nous avoir donné l'occasion de venir devant vous faire état de nos inquiétudes, mais en même temps, également aussi, de notre volonté et notre détermination à faire en sorte que ce que nous avons bâti au Canada et au Québec depuis des décennies puisse se poursuivre, puisse se poursuivre pour justement faire en sorte que nous continuions d'avoir notre identité, et, à cet égard, vous êtes certainement les mieux placés pour vous assurer qu'il en sera ainsi. Merci beaucoup.

141 LA PRÉSIDENTE : Merci beaucoup.

142 LA SECRÉTAIRE : Merci.

143 Nous prendrons une pause de 15 minutes. De retour à 10 h 15. Merci.

‑‑‑ Upon recessing at 9:57 a.m.

‑‑‑ Upon resuming at 10:15 a.m.

144 THE SECRETARY: We will now hear the presentation of Canada Media Fund.

145 Please introduce yourself and your colleagues, and you have 10 minutes. Thank you.

PRESENTATION / PRÉSENTATION

146 MS. CREIGHTON: Good morning and bonjour Madam Chair, Vice‑Chairs, and Commissioners.

147 Je suis Valerie Creighton, présidente et chef de la direction du Fonds des médias du Canada. With me today are Nathalie Clermont and Rod Butler from our Content team, Trent Locke and Richard Koo from our Finance‑Research team, Mathieu Chantelois and Kyle O'Byrne from our Public Affairs team, and Marcia Douglas from our Growth and Inclusion team.

148 We are extremely honoured to appear before you at this critical hearing, as we believe the issues you have outlined for this proceeding are vital to the sustainability and continued success of Canada's audiovisual industry. The magnitude and impact of your decisions offers a historic opportunity for change to the very fabric of content creation, broadcasting, and distribution for the benefit of the Canadian public.

149 Content is the CMF's true North Star. Our passion is supporting Canada's diverse storytellers for audiences in Canada and around the world, and your decisions will change how Canadians discover and tell more diverse stories that reflect our unique perspective, from coast to coast to coast, that shape who we are, enhance our reputation, and take our identity to the world. This is history in the making, and it offers an opportunity for all of us to build a promising future together.

150 Online undertakings have fundamentally and permanently disrupted the way content is created, distributed, and consumed by Canadians. As the Commission notes in paragraph 48 of the Notice of Consultation, the purpose of the CMF is:

    “to ensure stable and significant funding of quality Canadian content.”

151 The disruption from online undertakings ‑‑ and the corresponding decline in BDU contributions ‑‑ has impacted this purpose. This proceeding is an opportunity to ensure that we can continue to invest in the Canadian industry in this dynamic environment.

152 Paragraph 26 of the notice states that because online undertakings have such a significant impact on the Canadian broadcasting system, initial base contributions are:

    “an important early step to ensure continued support for Canadian and Indigenous programming and creators.”

153 Well, the Commission is a hundred per cent correct in this. There is a pressing need for new financial resources as soon as possible. BDU contributions declined by 21 per cent over the last seven years. And this decline is expected to accelerate between six and eight per cent annually over the next three years, reflecting the real urgency for resources into the system.

154 The new Act offers all of us, legacy and new players, a tremendous opportunity to work together to grow the industry, to bring new resources to the system, and to increase the benefit for Canadian and Indigenous storytellers and audiences.

155 The stakes are high and will require bold leadership from the Commission, but from all participants in this process. We can either reinforce the status quo or use this disruption to form a new and sustainable contribution framework that leverages the success of Canadian and Indigenous storytellers to continue to create content that remains domestically relevant and globally competitive.

156 In recognition of the need for the urgent injection of funds to invest in content, we support the Commission's intent to frame this discussion in this public hearing around three immediate issues related to initial base contributions: Who should pay? How much? And which funds should be recipients?

157 The CMF's positions on the first two issues are set out in our written submission and are, briefly, in line with the CRTC's recent decision. We believe the new contribution framework should apply to regulated online undertakings with annual Canadian gross revenues of $10 million or higher that must register with the CRTC.

158 In addition, we suggested that an appropriate level of initial base contributions for all audiovisual online undertakings ‑‑ Canadian and foreign‑owned ‑‑ would be a percentage of annual broadcasting revenues that would be comparable to the existing contribution from the BDUs.

159 Our comments today will focus on the third issue, where we feel we can best support the Commission in its efforts to determine how to most effectively allocate initial base contributions from online undertakings.

160 The CMF believes that to ensure these contributions can be put to work for creators as soon as possible, simplicity and administrative efficiency in step one are of primary importance. For this reason, with the exception of supporting a requirement for directed contributions to the Indigenous Screen Office, we believe initial base contributions devoted to programming should be allocated in the current 80:20 proportion. As stated in our written submissions, the CMF and Canadian Independent Production Fund regime has proven it can work in an effective and complementary manner to support the objectives of the Act.

161 In support of our submission to apply the existing 80:20 allocation, we would like to briefly highlight the CMF's track record in effectiveness, efficiency, and evolution in response to these new challenges and opportunities.

162 Nathalie?

163 MME CLERMONT : Le FMC est efficace. Créé par le Gouvernement du Canada et les EDR canadiennes, le FMC est le plus important organisme de financement dans le secteur audiovisuel au pays. Lors de l'exercice 2022‑2023, chaque dollar investi par le FMC a généré 5,79 $ en volume de production. C'est donc plus de 1,6 milliard de dollars en activités de production télévisuelles à travers le pays.

164 Si le FMC a été un vecteur de financement pour plus de 8 000 projets depuis l'année de sa création en 2010, l'organisme qui nous a précédé, lui, a soutenu le contenu canadien pendant des décennies.

165 Nous mettons cette expérience et cette expertise institutionnelle collective à profit pour faire en sorte que le contenu canadien s'exporte dans d'innombrables pays et territoires dans le monde entier, qu'il remporte une multitude de prix, et qu'il génère des milliards de visionnement. Nous soutenons des projets d'un océan à l'autre, qui sont regardés partout et sur tous les écrans du plus petit au plus grand.

166 Environ le tiers de notre financement est voué au marché francophone et le deux tiers au marché anglophone. Nous offrons également des programmes et des mesures incitatives ciblés aux femmes, aux communautés autochtones, afro‑descendantes, racisées, 2SLGBTQ+, ethnoculturelles et de langues officielles en milieu minoritaire, ainsi qu'aux créateurs en situation d'handicap, et ce, dans toutes les régions du pays.

167 Nous investissons dans des projets partout au pays, comme dans le documentaire manitobain « Going Native », l'émission pour enfants « La Famille Magique » produite ici à Gatineau, et la série « Kuluk », une série autochtone réalisée au Nunavut, l'émission de variété « Tout simplement country » filmée en Nouvelle‑Écosse, et les dramatiques et comédies, « Heartland », « Pour toi Flora », « Diggstown », « À propos d'Antoine », « Sort Of », pour n'en nommer que quelques‑unes.

168 Le FMC finance des projets qui sont produits par des Canadiens, détenus par des Canadiens, réalisés pour les publics canadiens, et qui sont vus partout à travers le monde.

169 Le FMC est efficient. Nous offrons plus de soutien financier direct que tout autre organisme de financement au pays, et ce, pour un vaste éventail de contenus destinés à une gamme diversifiée de communautés.

170 Grâce à notre taille, au volume de notre financement dont nous sommes responsables, et à l'échelle de nos opérations, nous allouons notre financement de façon optimale, et nous faisons cela de manière transparente, sans parti pris, et de façon efficace sur le plan administratif.

171 Notre fonctionnement opérationnel, rigoureux mais agile, assure que plus de 94 pour cent de nos revenus sont consacrés à l'avancement des histoires de chez nous et au soutien de l'industrie. C'est donc moins de 6 pour cent de nos revenus qui sont utilisés pour nos dépenses administratives.

172 En plus d'offrir des ressources importants pour financer une variété de contenus, nous établissons des partenariats stratégiques, autant ici qu'à l'étranger, afin de permettre aux producteurs d'accéder à des fonds supplémentaires et de maximiser les occasions d'affaires pour faire rayonner leurs histoires.

173 Nous recueillons et publions des données, et nous consultons régulièrement avec les joueurs de l'industrie pour faire face efficacement à un écosystème en pleine mutation.

174 Nos décisions de financement sont guidées par des critères d'admissibilité accessibles à tous, et des processus transparents de résolution de problèmes sont en place.

175 Nos orientations stratégiques et nos opérations sont publiques, et nos rapports d'activités ont été reconnus par le CRTC comme étant exemplaires.

176 Nous sommes un organisme de financement neutre et transparent qui met à profit ses compétences opérationnelles au plus grand bénéfice des créateurs canadiens.

177 MS. CREIGHTON: The CMF does continue to evolve and we recognize that new tools are critical to respond to this growing, dynamic industry. We are currently working with Canadian Heritage to implement new flexibilities they have provided that will allow the CMF to modernize its programs and better serve the industry.

178 Consultation is in the CMF's DNA, and we have been meeting with industry and community organizations to communicate these new parameters, and we will integrate this feedback to progressively implement the beginning of a modernized program model in April 2024. Stakeholder consultations will be the focus of our work through the coming year in order to fully implement changes in the following 2025‑2026 fiscal.

179 The new model will provide creators with more ways to unlock and access CMF funds and create greater opportunities for high‑quality content for audiences at home and abroad. It is a continuation of how the CMF adapts to respond to the needs of the industry.

180 In conclusion, we emphasize our strong support of the Commission's goal of addressing the urgent need for new resources to support a dynamic Canadian broadcasting system. With experience, expertise, and the new tools at our disposal, the CMF is well positioned to receive and distribute a share of initial base contributions. These contributions will flow through the CMF effectively and efficiently in service of an evolving audiovisual sector to the ultimate benefit of who we consider to be our shareholder: the Canadian public.

181 Thank you, Madam Chair and Commissioners, for inviting us to appear before you in this very historic and critical challenge you face. Bon courage and we look forward to your questions.

182 THE CHAIRPERSON: Thank you very much to the CMF for your presentation this morning and also for your submissions.

183 I will turn things over to our colleague Commissioner Levy to kick things off. Thank you.

184 COMMISSIONER LEVY: Good morning.

185 Let's just start with a few really short clarifications, if you like, before we get into the meat of things. And then hopefully we can have more of a discussion in the time allotted to us.

186 In your intervention, you're one of the few who took on the definition of social media service. You defined it as the public being both an audience member and a content provider. Would you like to elaborate on what else might be defining aspects? And also your definition is very close to ‑‑ similar to what access programming is defined as, correct, so could you adjust the definition to ensure that access programming doesn't fall under the definition, the similar definition to social media.

187 MS. CREIGHTON: Thank you, Commissioner Levy.

188 I wouldn't characterize what we said in our intervention as an actual definition of social media. I think that's something that is evolving in our country. It's something that plays an important part in terms of content creation.

189 What we did look at, as you may be aware, a couple of weeks ago we launched a program for digital first creators, which is to focus on professional content. And I think it's next week we're about to launch another initiative. So I will just turn to Nathalie and then Mathieu to elaborate on those two things. And then I have a clarification for you as well.

190 MS. CLERMONT: Yes, so in fact, we have launched a couple of weeks ago, in fact, a digital first creator program. It's called a pilot program for digital creators. And this program is really designed to support the growth trajectory of mid‑carrier professional and active Canadian digital content creators who are producing short‑form video exclusively for the digital social media platforms like Instagram, YouTube, TikTok, and Facebook.

191 There's no need for a broadcaster in this program, obviously, since it's content produced for the platforms. And we want the applicants or the recipients of this program to be able to grow their expertise, create their own content as they usually do, and make sure they are able to market it in a great ‑‑ the best way by hiring a social media manager, for example, and having legal or accounting services, and grow their following bases.

192 So details of the guide, the program are available in our guidelines. If you are even interested at some point, we can send them to you. And we will learn a lot, in fact, through this initiative. Like many of us here today, we are starting to learn about this side of the content creation in Canada. We don't pretend we know everything. It will be a learning experience, and we will adapt as we better know what they are doing, how they are doing it, and it will be a good test for the future, we think.

193 We have another initiative that we have undertaken to the Made/Nous campaign that will launch this week.

194 And Mathieu, can you talk, please, about it?

195 MR. CHANTELOIS: Thank you, Nathalie.

196 Good morning. One of the mandates of the CMF is also to promote Canadian content and Indigenous content. And we've been doing this with a campaign called Made in English, Nous in French for the last five years. But more and more what we were seeing is that our campaigns were just reaching the older crowd that were going to movies or to watch TV. So we decided to launch a big casting call coast to coast to coast to find six young creators, ambassadors for Made/Nous that are already big on TikTok, Instagram, on YouTube. And we got hundreds of applications. We found six incredible folks, a Ukrainian young guy living in Saskatchewan that just moved here, a wondering Indigenous person as well, very wonderful folks. And with them, for the last month, we've been preparing to send them on red carpet for Canadian films, to movie sets of TV shows as well. They will go to try Canadian videogames and so on.

197 So basically, we are trying to bridge a gap between the mostly younger folks that are not on traditional platforms and the great content that is produced for the broadcasting system and on television as well. So this can be launched in a few days. And we can wait to see what they're going to bring.

198 MS. CREIGHTON: So Commissioner Levy, I think the important point in all of this is the programs that we're working with social media creators are really focused on the content and how to better help them support and market that content.

199 But I just wanted to make sure I was clear. When you mentioned “access programming,” are you referring to community ‑‑ okay, that's what I thought. So no, this has nothing to do with that at all. It really is focused on that new emerging group of talent. Those communities are rife with incredible talent. Many have come from the linear traditional broadcast system and now are working on their own creative efforts. And that's what we're going to pilot, experiment with into the future.

200 COMMISSIONER LEVY: Now, those pilots and so forth, the regime that we're contemplating would not necessarily fund those because social media is off limits to us. So you know, I don't want to get into questions right now of how you're going to support that, given that the regime will not necessarily do that.

201 So I want to move on to submissions of foreign online undertakings. They've said they shouldn't be required to contribute to an amount that's identical to broadcasting distribution undertakings and programming undertakings, because they believe they are a separate and unique type of undertaking under the Broadcasting Act that requires a distinct approach. how do you feel about that?

202 MS. CREIGHTON: Well, it's true that while it's the case CMF must ensure stable and significant funding for the Canadian and Indigenous content system, we would respectfully suggest that this issue, this discussion as has been suggested by many is not about making the current system or in fact the CMF whole. It really is about in part exactly what you said. It's about recognizing that online undertakings play a very distinct and different role in our country. They benefit from operating in the country. And our view is they therefore should contribute in an appropriate and corresponding manner.

203 We have recommended in our intervention that it be comparable to the current five per cent allocation from BDUs. We respectfully leave that decision to the Panel and the Commission as you struggle with all of the competing interests that you're facing in this hearing.

204 But we do believe their contributions will build a strong collaboration amongst all players in the system in support of unique and authentic storytelling from Canada that does resonate with the world.

205 COMMISSIONER LEVY: You've submitted that all audiovisual online undertakings, all Canadian and foreign‑owned, should contribute a percentage of their annual revenues and that these contributions should flow according to the same proportions as we just discussed. In light of this, should all online undertakings, foreign or domestic, have access to funds from the Canada Media Fund and the certified independent production funds? And you know, I appreciate that it's not the broadcasters of the online undertakings ‑‑ your system works so that the money flows through to the producers rather than directly. So with that proviso, should the online entities, the new ones, have access through producers to the funds?

206 MS. CREIGHTON: Just so I’m clear, are you referring, Madam Levy, to the foreign online undertakings or ‑‑

207 COMMISSIONER LEVY: Yes.

208 MS. CREIGHTON: Okay. Well, I think it depends what the criteria for access might be. Clearly, if the criteria is simply that they want to set up their own funds and should access those while they are in the country, they do make content now, so that wouldn’t really change anything.

209 I think the important part of whether or not they access is how that contribution might flow and for what purpose. And I’m glad you mentioned the confusion sometimes about where the money goes because often in the current system with the CMF, many believe that it’s the broadcasters who get the money when, in fact, it is not. It is the production that gets the money.

210 In terms of online contributions, this would be the same principle. And as we heard this morning, the Canadian broadcasting system contributes and they do support, certainly, for the CMF the lion’s share of our money remains to be a trigger from the Canadian broadcaster.

211 So I think it would depend how those funds or how their contribution would be set up, what the criteria would be. As you’re aware, I’m sure, the CMF remains to be a fund that commonly is called 10 out of 10. Really, what it is, is we maximize the use of Canadian talent right from the creators to the production community.

212 So whether or not they access, I think there’s criteria that has to be considered and looked at, but if their funds are going to be the same as how they engage in the Canadian system now, it really doesn’t change much.

213 I think the other question around that would be, is there a need to do that simply for access because there are very ‑‑ the CMF and others, the CPIFs you mentioned, have demonstrated their ability to support the Canadian system through these resources and, again, remembering that money is really tough and it’s getting harder and harder out there for content makers to find resources to make that content. So whatever we land in what you’re considering, all of those financial resources go to the making of the content. That’s our focus.

214 COMMISSIONER LEVY: You support an initial base contribution to the Broadcast Participation Fund, but you’ve cautioned that we should not divert substantial amounts of funding away from the funding of Canadian programs, and that’s certainly in line with the policy directive that has made very clear that we’re to concentrate on making sure that the money ends up on screen.

215 So what level do you believe would be adequate for Broadcast Participation Fund without reducing financing to others?

216 MS. CREIGHTON: I don't think that I can give you a hard and solid number on that answer. I think it really depends the magnitude of additional resources that you’re considering may come into the system. I think those organizations and funds that come literally off the top of the current 80/20 regime are important functions within the broadcasting system for sure, and they should continue to be supported. But I’m a little uncomfortable, Commissioner Levy, to give you a hard and solid number on that. We’re kind of operating in a vacuum as to how much money may come in to the new system.

217 COMMISSIONER LEVY: You’ve also mentioned in your intervention that you work with the Indigenous Screen Office. In your view, what’s the role of other targeted funds for the equity‑seeking groups such as the Black Screen Office and the Canadian Independent Screen Fund in supporting these communities as compared to the CMF? How do you work with them and how do you support them?

218 MS. CREIGHTON: Right. Well, I’ll start with maybe the reason why we identified the Indigenous Screen Office as having directed funds, as we know Indigenous people are sovereign in the country of Canada. They have nation‑to‑nation relationships with the federal government.

219 Canada has signed on to UNDRIP, most recently. Their role as the third pillar with French, English and now Indigenous languages and Indigenous content is identified in the Act.

220 The CMF, in ’26‑27 (sic), perhaps it was ‑‑ I’ve kind of forgotten the year, was instrumental in bringing together all of the federal agencies, APTN and the CMPA to consider how better to support Indigenous content‑making in the country.

221 So I think our recommendation that the Indigenous Screen Office have directed funds follows in line with our previous policy and understanding and recognition of the importance of that content and its success to audiences around the world.

222 The reason we suggested that we don’t really split a lot of funds to a lot of different places is twofold. First of all, the other organizations in the black, racialized and other communities, the content that is made there is critically important to the country of Canada. It represents who and what we are as a nation.

223 We just look at some of the awards and success of Brother and The Porter, which cleaned up at the Canadian Screen Awards. Both were financed by Telefilm and the CMF.

224 So there’s no question about the importance of that kind of content.

225 How we work with those communities is in several ways. We’ve had advisory groups from those communities back as far as 2019 and accelerated that process with the Industry Leaders Black Group in 2020. We have a continued racial advisory community and we have a number of programs that support that content.

226 I will ask Marcia to speak to those in just a moment, but really, what was fascinating was when COVID hit and the Government of Canada provided money into content makers that have had barriers to access that have remained under‑served in our system. We were very fortunate to be able to allow a significant amount of money to flow to many of those organizations who support their members to make that content.

227 So I’ll ask Marcia to speak a little bit to just give you a quick overview of how we engage with them.

228 Marcia.

229 MS. DOUGLAS: So I think a piece for us in our work in equity and diversity and inclusion and accessibility continues to evolve, but the CMF has undertaken work since its inception in 2010 and its commitments to a variety of communities. When the fund first launched, we had programs for Indigenous content, we had funds for regions and official language minority communities, and we have continued to build on that, and certainly in response to the social reckoning in 2020 and with the help of additional funds that came from the federal government.

230 We ‑‑ I think all of our programs actually have some sort of initiatives, incentives, requirements in many cases. And so part of the distinction, I think, in ‑‑ to amplify what Valerie has said around the distinction of Indigenous content, Indigenous support, that’s one piece. We actually collaborate with a number of the other CIPFs, and Nathalie and Rod could tell you more about that on the content side. But ‑‑ and we would be very open to working and collaborating with these other new funds, but when we look at equity and inclusion work, we address a broader set of communities in our work, too, and in the work that we hope to advance in the industry.

231 So we support Indigenous, black and racialized communities, but you know, as we said in our opening remarks, we also are looking at other communities such as 2SLGBTQ, persons with disabilities and continuing to have a focus on stories from every region.

232 We’ve worked with the CRTC on gender and gender equity work, the official languages, minority communities. We have programs for communities and people in the north.

233 So this is evolving.

234 And in addition, we actually also established a sector development program that started in 2019, but we’ve really built on that with those additional funds from government.

235 So since even that short amount of time, we’ve spent another seven million in projects working with communities for training and market access and capacity building for over 95 projects, and we work directly with communities on that.

236 COMMISSIONER LEVY: Thank you very much for that.

237 Among your identified initiatives, you’ve talked about your persona ID self‑identification tool. And I’d like just a quick elaboration on how that data supports your decision‑making for production projects and how you ‑‑

238 MS. CREIGHTON: Thanks, Commissioner Levy. And I’m going to turn to Richard Koo, who manages the persona ID.

239 Richard.

240 MR. KOO: Thank you, Commissioner Levy.

241 So with respect to persona ID, a persona ID is a system we’ve developed with the industry and also with community groups to help drive our commitment to evidence‑based data‑driven decision‑making throughout the CMF.

242 It is intended to be used as a way for us to understand and track and trend representation of communities in the industry. It’s used specifically in a number of ways.

243 First of all, it is used as an eligibility screen for targeted initiatives to support our inclusion and diversity programs. I might add, the persona ID initiative started a number of years ago. It actually started in 2020 when we convened a number of working groups and consultations with industry and diverse communities to understand how to best develop a system that would assist us to be able to receive and understand this data of representation.

244 It was really important for us to acknowledge that data in communities, in diverse communities has historically been used in some ways as persecution, and what we wanted to make sure we were doing is ensuring that communities joined with us, that we had the trust of their community in collecting this data and that we could be able to demonstrate how this would be of benefit.

245 COMMISSIONER LEVY: So those benefits I’m interested in. Do you see that the ‑‑ is there a role for it beyond the CMF’s decision‑making?

246 MR. KOO: Certainly. I think one of the overall challenges of data collection at the CMF has been that we know very well what we do in terms of CMF programs, but it is within the universe of the CMF. There is a wider role for us to understand how representation is impacted in the wider industry, and I think there is an opportunity, certainly, for collaboration in order to get that broader universe.

247 One of the important things that we started with this consultation, acknowledging that it might be quite difficult to actually have the universe developed at the very, very beginning of this process, was for each of the interested agencies to discuss common terminology.

248 This common terminology would then lead to common reporting standards, and that’s one of the ways we’re trying to focus on greater collaboration so that there is a broader understanding of representation in the industry.

249 COMMISSIONER LEVY: Thank you very much.

250 Finally, just, you know, our ‑‑ the policy directive also asks us to use tools like incentives and outcomes. And the CMF has, over the years, experimented and has probably written the book on incentives and outcomes, so I wonder if, as I close my questioning, you’d like to make some remarks about how you see incentives working in this new environment.

251 MS. CREIGHTON: I think, generally speaking, I would say we prefer incentives over disincentives or we prefer carrots over baseball bats. You know, you don’t really work very collaboratively with people if you’re forcing them to do things.

252 I think our ‑‑ I would just point to, and I will ask Richard to fill in, our experience with the gender question a few years ago was a very interesting one because we were really trying to figure out how to incentivize the industry to bring more women into the high‑level positions within that sector. And we debated long and hard how the broadcasters, in fact, might react to this and, in fact, they embraced it. In fact, I think because it was an incentive and there were enhancements that they could benefit from within that, the numbers are pretty good as far as the positions. We don’t need to get into that today, but we’re happy, certainly, to provide you with that information if you’re curious about how that one worked.

253 So it’s continually ‑‑ as we consult with our industry widely and broadly, it certainly is, Madam Levy, something that we have our eye on the ball. I think incentives are far more effective if we can within the context of our funding than another way to approach it.

254 Richard, do you have anything to add?

255 MR. KOO: Thanks, Val.

256 Commissioner, I might just add that we did start low in this process in terms of gender incentives. We’re now up to 50 percent in terms of reaching those targets.

257 On the persona ID piece, just to bring it back to that, one of the aspects of the data collection we have is to be able to understand not only diverse communities, but also gender, and this is an important part of our data collection piece.

258 COMMISSIONER LEVY: Thank you very much. I’ll turn it back to the Chair.

259 THE CHAIRPERSON: Thank you so much, Commissioner Levy.

260 I will turn things over to Commission Naidoo.

261 COMMISSIONER NAIDOO: Hi. The CMF funds support audio‑visual content and you do not support the creation of new funds. What about supporting the local news? What’s your take on that?

262 MS. CREIGHTON: Wow. Okay. Let me give that a shot.

263 You know, over the last ‑‑ I’ve been with the CMF since 2006, and the question of the importance of news in the country of Canada and, in particular, local news has often come up.

264 There have been times when parties have asked us if we would entertain that.

265 All I could really say, Commissioner Naidoo, and thank you for the very interesting question, is fundamentally we believe in the importance of local news in the country. We will adapt and amend what our program is about based on not just the outcome of this hearing, but any further direction from government.

266 If you’re asking me should we do that, I don’t really have a clear answer. I think that’s part of what the Commission is debating, is the pressure on local news and where it should be financed.

267 But the CMF is adaptable. We’re efficient. I think we’ve demonstrated that. And if that were to come to us, we would certainly have to work with those communities to figure out what to do.

268 Whether or not we’re the most appropriate place to do that, I think, remains in question.

269 COMMISSIONER NAIDOO: Thank you.

270 THE CHAIRPERSON: Thank you.

271 I have a couple of questions so maybe I’ll just jump in at this point.

272 You started your presentation talking about the decline in resources and the need for more resources and I think you said “pressing need” are the words that you used. You’ve seen on the record some intervenors have said there ‑‑ what’s the rush. There is no urgency here, take your time. Do this right. You have a couple of years.

273 Could I get your reaction to that?

274 MS. CREIGHTON: Well, sure. Thank you for that.

275 We’ve been hearing through our country‑wide industry consultations not quite as long as Mr. Péladeau, but since we really beefed those up in 2017 about the urgency for change. And part of that change is financial resources.

276 Since then, the acceleration and downward pressure on our broadcast system has become evident. It’s very dire what’s happening to the Canadian broadcasting system. They have been and continue to be important players in the overall distribution of content, especially, I would say, in markets like Quebec where the cultural imperative is so important.

277 We’ve survived the pandemic and we saw huge impacts to the industry through that time. We at the CMF have certainly embraced our ‑‑ reducing barriers to communities from black, racialized and others who have not had access to the system and have embraced supporting those.

278 So there’s two parts to this. One is a vast expansion of our mandate to support all those important priorities, and the second piece is, it’s been 10 years that we’ve been talking to our industry about the need for resources and change, and I think with what we see, as I mentioned, the majority of our funding is triggered by a Canadian broadcast licence. In terms of our modernization, we are expanding that possibility. But I think urgency ‑‑ I think you said in your opening remarks at Banff, Madam Chair, we were going to go fast and go together.

279 And I think fast is not always the answer. Certainly a thorough contemplation of the right thing to do. But I would still reinforce that the urgency is critical.

280 THE CHAIRPERSON: Thank you for that.

281 I will give you the opportunity to share any sort of closing thoughts, but perhaps I can squeeze in one other question.

282 The other thing that you have spoken about and that you have put in your submissions is about how the CMF is evolving. You talked about new flexibilities to modernize and sort of what’s coming in terms of the new model in April 2024.

283 One of the things that we’ve seen on the record and you have seen this, no doubt, is, you know, reference to legacy funds and why are we focused on legacy funds, let’s look forward. Let’s do things differently. Let’s innovate.

284 Can you talk to us a little bit more about this innovation about this new model?

285 MS. CREIGHTON: I would be happy to.

286 The first thing I would say is that we have received the new program authorities from the federal government through Canadian Heritage. We’re delighted at the flexibility that they’ve provided.

287 We’ve started a discussion with our industry in, I believe it was, September to sensitize them to what these new changes and innovations might be.

288 I would just say that at this juncture, nothing is carved in stone, nothing is certain. We are listening very carefully and very closely to the industry we serve as to how we can best unfold these new authorities.

289 So we’re actively working with government to make sure we understand the policy intent behind these flexibilities they’ve given us, and maybe the best thing, I’ll just give you some examples of what’s in the new authorities, if that suits.

290 So one of the things that we are considering is an expansion of the triggers to include Canadian distributors. So we hope that this will allow to take ‑‑ perhaps, if there’s good partnerships between distributors and broadcasters, allow to take some pressure off the broadcast system as co‑licensing would be possible if the distributors are triggering the CMF and come into the financing system.

291 We’re so happy to eliminate the words of “convergent” and “experimental”, which everybody complained about since the day they were brought down to us in the Cabinet decision, and we are really going to refocus the programs we do on ideation, which is essentially the development of ideas, innovation and new things, creation, which would be essentially the production arm to get the content made, and a focus on industry, which is where the programs like sector development, our support in the markets and the international arena would all take place.

292 We’re looking at a different way to work with the Indigenous Screen Office and enhance our support to Indigenous creators. We still have a large program, I believe the largest in the country, for support to Indigenous content, and we are not able to just write the cheque to the Indigenous Screen Office, but like we do with many others in the equity community, we turn to those communities for advice on the program guidelines to review those guidelines and amend them as required and certainly we use juries from those communities that are appropriate to make those decisions, people who have that lived experience who can comment and provide advice on which projects should get funded.

293 So we’re looking at a very exciting move, I believe. It’ll be a pilot, and it will focus on content creators from the circumpolar region. We currently have an agreement with Nunavut and the Sámi Film Institute to allow Indigenous creators that are living in Nunavut to be able to work with Greenland or Norway because those countries, they do work across the north, not in a north‑south relationship, to make their content and if they have similar to co‑production, producers and content makers from those countries, they will be able to trigger the CMF.

294 The other aspect of what we really want to focus on this year are our genres that we feel are fragile and critical to the nature of content‑making in the country in the documentary field and in children’s and youth.

295 And we know ‑‑ I’ll just speak very briefly to those two imperatives. I have doc makers all the time who call me up and say they’re 10 out of 10, they’re Canadian, they have broadcast licence from ZDF and Arte. Why can’t they trigger the CMF? And it’s a perfectly reasonable and legitimate question because we know our content, our documentary content is very successful worldwide.

296 We had a northern incentive that actually ‑‑ I won’t use the word ‑‑ let’s see. It worked around the current contribution requirements in our contribution agreement to allow one of the provincial funding agencies and the northern broadcaster and the CMF to collaborate to support documentary film‑making. And out of that came 14 very strong documentaries out of the north that travelled the world, so that’s just one example.

297 On children’s and youth, as we’ve been advised by those content makers, it’s not a genre, it’s an audience, and we know that kids are not primarily on linear TV.

298 We started with the Shaw Rocket Fund about five years ago, very important CPIF in terms of the country, and we now have done a tremendous amount of very stellar content for kids on that.

299 One example is a little show called “Dennis and Me”, and it has 31 million views ‑‑ did I get that right ‑‑ on YouTube. So we really, really want to focus in 2024. You’d never get those kind of numbers for a kids’ show in our current system.

300 So for us, though, it’s about the content and where people are watching that content.

301 So this year, coming up in 2024, we will have a very extensive consultation process that goes very deep with all aspects of our industry and stakeholders, and there’s a multitude of them, to look at some of these issues and start to modernize in April 2024 with as many of these elements as possible.

302 THE CHAIRPERSON: Thank you for that.

303 So perhaps I can just ask two final related questions, and I’ll share them both at the same time.

304 So the first is, of all of your written submissions, what you’ve spoken with us about today, what is the key thing that you hope that this Panel takes away from your various submissions?

305 And then the last thing is really just to offer an opportunity if there’s anything you wanted to add that you didn’t have a chance to cover.

306 MS. CREIGHTON: Thank you.

307 On the first thing, please keep your eye on the content. All of this is about the content. All of this is about getting these compelling stories made for audiences at home and worldwide however and wherever you land in the complexity of what you’re facing. So that would be where we are. It is our true north star. That’s why we’re here.

308 And I would just conclude, we had mentioned earlier in our submission that we have the three Es that we’re abiding by, effective, efficient and evolving. So under the effective point, content is our north star. We’re the largest audio‑visual funder in Canada with decades of experience and expertise.

309 Our investment of nearly five billion since 2010 has generated 20 billion in economic activity for Canada. We’ve funded more than 8,000 projects in English, French and dozens of Indigenous languages and diverse languages which represent the fabric of Canada.

310 We are efficient in size and scale and can distribute funds efficiently. We strategically partner and collaborate with industry and other funds to amplify and maximize benefits to Canadian content producers, industry and audiences.

311 We’re neutral and transparent, with very low administrative costs. We’re evolving to adapt to changing the industry and the diverse needs of Canadian Indigenous content creators and audiences. We’re excited to use our new authorities to better respond to the industry needs.

312 Consultation and collaboration is what we do. We’ve proven we have the ability to align with the CRTC’s evolving framework and objectives.

313 And I’d leave you with one more E that we didn’t talk about, which is enthusiasm. We are extremely enthusiastic about the future of Canadian content and the talent and creativity of our creators. There is no problem in Canada with creativity and innovation. None whatsoever. We are over subscribed on every program. The volume is fantastic and what we’re seeing coming out of the Indigenous community and creators of colour, black, racialized and others is absolutely phenomenal.

314 So we’re eager to work with you. Thank you very much.

315 THE CHAIRPERSON: I think enthusiasm is a good note to end on for the presentation, so thank you. Thank you for your submissions. Thank you for being here. Thank you for your enthusiasm.

316 MS. CREIGHTON: Thank you.

317 THE CHAIRPERSON: I will turn things back over to the hearing secretary.

318 THE SECRETARY: Thank you.

319 We’ll just take a short five‑minute break so we can switch the panel. Thank you.

‑‑‑ Upon recessing at 11:02 a.m.

‑‑‑ Upon resuming at 11:08 a.m.

320 THE SECRETARY: Welcome back. We will now hear the next participants, FilmOntario and Toronto International Film Festival. We will hear each presentation which will then be followed by questions by the Commissioners to all participants.

321 We will begin with the presentation by FilmOntario. Please introduce yourself, and you may begin.

PRESENTATION / PRÉSENTATION

322 MS. LYNCH: Thank you, Chair, Vice‑Chairs and Commissioners. I am Cynthia Lynch, Managing Director and Counsel at FilmOntario. We are an industry‑funded consortium representing Ontario‑based film and television production companies, unions, studios, equipment suppliers, and other industry organizations.

323 I am here today to highlight the importance of Ontario’s production sector and the role it plays in the health of the Canadian industry overall. As such, my remarks will focus on how the Commission should direct the financial contributions to the system that will result from this proceeding.

324 The Ontario film and television sector plays a unique role at the centre of the Canadian industry. Thirty‑three percent of all the production that took place in the country in fiscal 2021, ‘22 happened in Ontario, adding up to almost four billion dollars. The ecosystem that has developed around in‑house broadcaster production, the production of original IP by Ontario‑based companies, and foreign service production, is a stable cornerstone of the Canadian industry.

325 Like all ecosystems, the different parts of our industry are interrelated, and any harm done to one part of the system has the potential to cause negative impacts across the system as a whole. It is therefore very important that any new funding framework that comes out of the current proceeding maintain funding levels for Canadian content. Any other outcome would be harmful to the domestic production sector in Ontario, and that negative impact will ripple across Canada.

326 FilmOntario believes in the basic principle that parties that benefit from access to Canadian audiences should be required to make fair and equitable contributions to support Canadian production. Ideally, the sum total of these contributions, both existing and new, will result in more funding available to everyone.

327 We would like to commend your recent decision to certify the Indigenous Screen Office and the Black Screen Office as CIPFs. We noted in our submission that is it important that you work directly with Indigenous content creators, as well as with creators from Black and other equity‑deserving groups, to determine how to best support the creation and promotion of content by those creators. Granting CIPF certification to the ISO and BSO is an important first step in this work.

328 As you consider how to direct financial contributions to the system, we would like to take a moment to address regional considerations. Ontario’s film and television ecosystem is the largest in the country. It is important that Ontario’s creators be able to take full advantage of any new funds or initiatives that come out of this proceeding, including any targeted at regional development and support. Ontario’s storytellers come from a diverse range of backgrounds and life experiences. The production hubs, the co‑location of services, and the critical mass that the Ontario industry represents are extremely important to our continued success as a global leader.

329 We therefore ask that in developing the new contribution framework, you keep in mind the benefits production hubs such as Ontario bring to the country’s industry as a whole, and the importance of keeping the centre strong so the entire system can flourish. We have built a fully rounded, globally competitive centre of excellence in Ontario and it should be a public policy goal to build on that.

330 Finally, we would like to state our opposition to the proposal by certain organizations who suggest that 40 percent of contributions be directed to support for French‑language content. These proposals will have a negative impact on Ontario producers and the successful ecosystem which exists in the province.

331 We are of course in favour of the overall goal of supporting French‑language content, and in particular French‑language content produced outside of Québec. However, we see no reason to modify the current two‑thirds English, one‑third French formula.

332 As noted by the CMPA, modifying this formula would mean that tens of millions of dollars of existing funding would be redirected, increasing the pressure felt by programs that are already oversubscribed. This will undermine these programs’ ability to support the domestic production sector and to address specific needs in the industry. Since Ontario produces the most English‑language domestic content in the country, such a change in the formula would have the most devastating impact in our province, putting our entire ecosystem at risk.

333 The proceeding we are all engaged in today speaks to the foundation of Ontario’s domestic production sector, and the importance of supporting the creation and promotion of Canadian content at home and on the world stage. At the same time, we need to maintain a balanced ecosystem that includes international partners and incorporates them into the system in a fair and equitable way. We hope that this proceeding results in a stronger, healthier, and larger ecosystem for everyone ‑‑ one that is poised for success for many years to come.

334 I would like to thank you for your time today, and look forward to your questions once Cameron has finished.

335 THE SECRETARY: Thank you. We will now hear the presentation of Toronto International Film Festival.

336 Please introduce yourself, and you may begin. Please open your mic, just by pushing, yes. Thank you.

PRESENTATION / PRÉSENTATION

337 MR. BAILEY: Good morning, Madam Chair, Vice Chairs, and Commissioners. I am Cameron Bailey, the CEO of TIFF.

338 For 48 years, we have been presenting the Toronto International Film Festival, and I'm here to give you more information on how Canada’s screen industries benefit from TIFF’s work, and the opportunities that this particular moment presents for all of us.

339 Maybe you know our Festival mostly from media reports of Hollywood stars landing in Canada every September to premiere their latest movies. That does happen. We are proud that TIFF has built this platform in Canada not just for Hollywood, but for generations of Canadian screen storytellers, and for the artists and industry members from more than 70 countries who visit every year. It is TIFF's platform that helps keep Canada on the global map.

340 TIFF’s platform is also one driver behind the 13.7 billion dollars that movies and series produced in Canada contributed to our GDP in fiscal 2021, 2022 ‑‑ that, and also 240,000 jobs.

341 And that’s not TIFF generating all of that economic activity, of course. But TIFF is a key link in the chain of developing, producing, promoting, distributing and exhibiting what entertains and enlightens Canadians on our big and small screens, every day. We play a leading, global role in promotion, an important national role in exhibition, and an increasingly important role in the development of Canada's screen storytellers.

342 This past March, when Sarah Polley stepped onto the Oscar stage to collect her Academy Award for writing the film Women Talking, it came after 30 years of TIFF shining a light on Sarah Polley's work. This coming March, when Denis Villeneuve releases Dune: Part Two, it will mark 27 years of TIFF presenting and supporting this brilliant Québec filmmaker.

343 And that's our job ‑‑ identifying, supporting and showcasing Canadian screen talent at every stage of their careers, connecting them to the global screen industry. When you watch Maitreyi Ramakrishnan as the lead in Never Have I Ever, or Shamier Anderson fight Keanu Reeves in John Wick: Part Four, you are watching TIFF talent alumni.

344 But there’s more, because as TIFF grew, we found more ways to contribute. In addition to the over 600,000 attendees at our Festival in September, we present events and screenings to hundreds of thousands more all year round at TIFF Bell Lightbox in Toronto. And every time we bring people out of their homes and off their phones to share a cultural experience, we’re building social cohesion.

345 And we do it nationally, too. The TIFF Film Circuit network of one hundred community film clubs from Campbell River on Vancouver Island to Newfoundland and Labrador’s Fogo Island ‑‑ those screenings and events, often of Canadian films by people like Vancouver's Mina Shum or Montreal's Tracey Deer, help gather local communities together, and strengthen our national fabric.

346 Back in Toronto, we host the world’s largest Indigenous media festival ‑‑ imagineNATIVE ‑‑ at our Lightbox cinemas. We also host Hot Docs, which is North America’s largest documentary festival, and a lot more, as well. We support the work of national organizations devoted to expanding and diversifying Canadian screens: the Indigenous Screen Office, the Black Screen Office, the Disability Screen Office, and the Canadian Independent Screen Fund.

347 We know Canadian film talent competes at a high level. And they do that best when there’s a strong, Canadian film ecosystem to find that talent early and bring them into the world’s spotlight.

348 The last thing I want to share with you is the power of bringing Canada to the world through TIFF. Over the past decade, in a kind of a no‑fuss, Canadian way, we have built up the business side of the Toronto Film Festival. We now have over 5,000 Industry delegates attending every year, buying and selling new films, news series, and projects seeking financing. Every year, meetings and screenings that happen during our Festival generate between 50 and 100 million dollars in sales. We call that a good start.

349 Our goal is to seize the opportunity for much more market activity during those September days when the attention of the world’s screen industry is focused on Canada. Our 50th anniversary year is coming up in 2025, and by then, we want to offer a bigger, more robust platform for Canada’s producers, filmmakers and on‑screen talent to meet their international peers. There’s a gap in the marketplace that we can fill, if we have appropriate resources. And we need those resources.

350 And so, there’s so much more we can do. As we recover from the pandemic and the setback of this year’s actors’ strike south of the border, we want to keep pushing the Canadian agenda. We want to navigate these new screen technologies, business models and audience behaviours we’re all swimming in now, to keep the Canadian advantage. What is that advantage? Our creativity, which has been spoken about already this morning; where we are situated; the languages we work in; the stability of our financial sector; and our openness to the world.

351 There is no better place to do the business of films and series than Canada. And as Canada’s biggest platform for that business, TIFF is here to help.

352 Thank you.

353 THE CHAIRPERSON: Thank you very much to Film Ontario and to TIFF for your submissions and for coming to speak with us today.

354 I will turn things over to our colleague, Commissioner Naidoo, to start off the questioning for the Commission. Thank you.

355 COMMISSIONER NAIDOO: Hi. Thank you so much for being here today. I have read your submissions thoroughly. I want to thank you for them.

356 I know that many intervenors ‑‑ I’m sure that you have read the submissions as well ‑‑ want new funds to be created, but I’d like to start by discussing existing funds. So, let’s talk about money for specific funds. Should the Commission require that a certain percentage or proportion of the initial base contributions be directed to existing production funds that support feature films?

357 MR. BAILEY: I will speak to that. I will defer to the CRTC in terms of the exact distribution of funds, but what I can say is that the feature film industry in Canada is a distinct one ‑‑ distinct from the very successful TV and series industry, and I think it does deserve unique support. So many of our greatest artists on screen came first from making independent films with the support of the existing funds that are there.

358 That’s where we find new talent. That talent often goes on to do much bigger things. The borders between films and series have blurred, but until you give those artists and those creators the chance to express their voices and tell their own stories often through feature films and connect with that industry, I think you don’t fully know what they are capable of and what they can go on to.

359 MS. LYNCH: I would echo what Cameron said about the importance that feature film plays in the system, and also copy him a little bit in saying we don’t have a specific amount or percentage that we would say should be directed to feature film.

360 But I would emphasize that it is very important that feature film be considered part of the system, not just because we have many fabulous Canadian filmmakers who produce their work in Ontario, but also because many Canadians access these films through wonderful events like TIFF but also through online streaming services, both domestic and foreign, and this is a major point of access for Canadian audiences for feature films. So, as they are a part of the system, they should be funded appropriately.

361 COMMISSIONER NAIDOO: Do you have an opinion on what proportion? Have you given any thought to that?

362 MS. LYNCH: We don’t have an opinion on the proportion, thank you.

363 COMMISSIONER NAIDOO: Okay. So, we have talked about the money. I would like to talk a little bit about structure right now. Do you have any concrete ideas about how the current funds can be changed to include funding to certain organizations that weren’t previously eligible for such funding?

364 MS. LYNCH: Can I ask a question of clarification? Do you mean eligible or had difficulty accessing?

365 COMMISSIONER NAIDOO: Basically, that weren’t eligible before. And do you have any concrete ideas about how we can change current funds to include certain organizations that ‑‑ to include them when they weren’t eligible previously?

366 MS. LYNCH: So, in terms of concrete ideas no, I am sorry, we don’t. We would just stick to the principle that consultation with all groups, including those who have traditionally been excluded from the system, should be first and foremost, and I was very pleased to hear in the Chair’s opening remarks how many of those people are participating in this hearing. I think that’s an opportunity both for the Commission to look to those groups in ways to best support them, but also for existing funds, to hear what they have to say and take some of that impact back to their own operations.

367 MR. BAILEY: I would just add, I am old enough to remember when there wasn’t an Indigenous Screen Office or a Black Screen Office or a Canadian Screen Fund, Disability Screen Office, et cetera. I remember coming to Ottawa many years ago to try to get the Canada Council for the Arts to actually acknowledge the diversity of this country’s artists. So, a lot of progress has been made. We have certainly all seen, I think, how that has transformed what creativity looks like and the stories that are told in this country now. And I think whenever those organizations that have been set up to support that kind of creation have the support they need ‑‑ I think that’s always going to be very helpful.

368 COMMISSIONER NAIDOO: Both of you have made it extremely clear in your submissions that you want more support for feature films and the feature film industry. Why do you think it’s so important that Canadian broadcasters ‑‑ the broadcasting system ‑‑ support feature film in particular?

369 MR. BAILEY: I will start by saying there is a kind of freedom that comes in independent feature films that I think is harder to achieve in traditional broadcasting anyhow. The traditional feature films at the early stages of an artist’s career ‑‑ take an artist like Denis Villeneuve, for instance ‑‑ are often the creation of an individual creative spirit, and I think what you get there is you get artists who are exploring stories that maybe wouldn’t fit within a conventional, say, TV series, genre or mold.

370 And from that development, you get the ability to progress as artists, and we’ve certainly seen that with the case of Denis Villeneuve, and so many others as well, whose beginning was in feature films. Sometimes they stay there and sometimes they continue doing that, both in Canada and internationally, but then also, their ability to experiment and create and evolve allows them to do so many more things. We’ve seen Sarah Polley do not just Away from Her and Stories We Tell, which is a documentary, but also the Margaret Atwood series that she did, as well.

371 And so, there are so many opportunities to develop and evolve as artists that I think feature films offer.

372 And also, audiences are still going out to theatres and seeing feature films, and I think we’ve seen that for our Film Circuit across the country as well ‑‑ that there is a kind of community that comes from gathering together, watching a film, and discussing it ‑‑ something that is completely original and innovative, and I think that needs to be protected.

373 COMMISSIONER NAIDOO: Thank you for that.

374 Cameron, I know that you were asking ‑‑ in your submission, you asked for a portion of the contributions to go towards festivals. That was pretty heavily weighted in your submission. We’ve heard you on that. That matter is something that’s more for further down the road, not necessarily part of this proceeding, but it does lead me to ask you a little bit about discoverability. It is the one topic that just keeps coming up over and over and over again ‑‑ discoverability of Canadian content.

375 What has been your experience with streaming services who participate with TIFF?

376 MR. BAILEY: We have had a very good experience, over many years, working with all of the major streaming services in terms of being one of the places that they launch films, and also in terms of talent development of Canadian talent. We work with anyone who is willing to bring us, you know, great work, whether that’s an existing platform or Canadian distributors and many others, as well.

377 But I think what’s important when it comes to festivals is that this is the place ‑‑ festivals by their nature curate. We distill what we think is some of the strongest work that is out there, and that is really important because there are just ‑‑ there is just too much to see. There are tens of thousands of films made around the world every year. There are over 300 feature films made just in Canada every year. And festivals allow everyone ‑‑ both within the industry, and I think audiences and viewers especially, to focus on what is maybe the work that might be of most interest to them.

378 COMMISSIONER NAIDOO: Cynthia, did you want to discuss discoverability?

379 MS. LYNCH: I don’t think that I could add a lot to what Cameron said, but streaming services obviously bring a lot to that discoverability portion, and as well as film festivals like Cameron’s, and the work that TIFF does year‑round. So, he already talked about how great Film Circuit is in bringing Canadian films to Canadian audiences who can’t make it down to King Street, and I think those types of things, and the buzz that they generate in our communities here at home, are tremendously important to stepping up the discoverability of Canadian film.

380 COMMISSIONER NAIDOO: You had mentioned the Canadian advantage in your opening remarks today. Do you think that streaming services actually embrace or get or understand the Canadian advantage?

381 MR. BAILEY: I think if you spend any time in Canada at all, you can’t miss the Canadian advantage. It’s a unique country. I think we all know that, and that’s ‑‑ that’s part of why we are all able to do what we do.

382 The combination of things that make this country so strong in the content world, if you want to use that term, I think are evident. We are working in two of the most popular global languages, at least. We are working in an increasing variety of languages. There are now Canadian films and series being made in Hindi, in Inuktitut, and in many other languages, as well, and that’s ‑‑ that’s also a reflection of who we are ‑‑ the fact that we are right next door to the biggest screen industry in the world but we are not in it. That’s also important. All of those things help give us an advantage that no other country has.

383 In Toronto and at TIFF, we also have the advantage of having built over almost 50 years one of the largest business platforms for the screen industry, as well. The sales that are done every year at our festival, the industry coming to town from Hollywood, from Bollywood, from all over the world ‑‑ all of those things really add up to an advantage that I think exists uniquely here.

384 COMMISSIONER NAIDOO: Cynthia, did you want to talk about the Canadian advantage? I am sure that you have got an opinion on that.

385 MS. LYNCH: Well, again I can’t disagree with Cameron about the framing of the Canadian advantage. I feel it behooves me to also promote the Ontario advantage.

386 So, we, in addition to all the things that Cameron mentioned, offer an extremely competitive jurisdiction when it comes to getting things made, and that combines our production, our domestic producers who focus on what is traditionally considered ‘Can con’, as well as our foreign partners who bring their productions to Ontario.

387 And this ecosystem has been allowed to flourish and give us that advantage because we have a beautiful province with excellent locations; we have highly trained workforces; and we have attractive incentives for everyone. So, that is what adds up to our Ontario advantage and allows us to be such a cornerstone of the Canadian industry.

388 COMMISSIONER NAIDOO: Thank you to you both. I know my colleagues have some questions, so I will hand it back to the Chair.

389 MR. BAILEY: Thank you.

390 THE CHAIRPERSON: Thank you, Commissioner Naidoo. We will go over to Vice Chair Scott.

391 VICE‑CHAIRPERSON SCOTT: Good morning.

392 MR. BAILEY: Good morning.

393 VICE‑CHAIRPERSON SCOTT: So, the record of the proceeding covers extensively both the impact that online undertakings are having on traditional broadcasting, but the online undertakings also discuss to a great extent the investments that they are making in Canada. I would be really interested in the views of Ontario producers with regards to the net impact of online undertakings, given kind of both halves of that equation.

394 MS. LYNCH: Thank you for the question, Mr. Vice‑Chair. I think that the impact overall has served, in Ontario at least, to build up ‑‑ I keep using the word ‘ecosystem’, but the ecosystem that we have in the province. When a big service production comes to the province, they employ people; they rent equipment; they create a market for our equipment suppliers to invest in cutting‑edge equipment such as cameras or battery‑powered generators to reduce our carbon footprint; and once those investments have been made, they are there in the province for our domestic producers to us.

395 So, it also provides training opportunities for our wonderful crew, and if there is more production overall, then it provides more stable opportunities. As you know, this can be a gig to gig industry, and when there is more production, employment is more stable for people and it allows us to build our workforce out that way, as well. And that is on top, of course, of just the benefits that film and television production bring to the economy as a whole across the province.

396 MR. BAILEY: I think Cynthia answered it perfectly. I have nothing to add.

397 THE CHAIRPERSON: Let’s go over to Commissioner Levy. Thank you.

398 COMMISSIONER LEVY: Thank you for being here. Interesting perspective. You know, I think it’s often overlooked that Canada, as it relates to foreign‑location shooting, is probably the ‑‑ we don’t have all of the correct data, but it’s the probably third‑largest, you know, business partner with the foreign streamers. You know, they like the quality and the stability of our labour force; our tax credits; our low dollar; our great locations; and all of the rest of it.

399 But we are in a global industry. So, we can’t take it for granted, and I know that there is at least one intervenor coming up in future days who raises the possibility that we could sort of diminish the participation of the foreign streamers if we continue to insist on levels of contribution that they do not feel are appropriate.

400 I would be interested in your views on whether this is in fact a major consideration. Thank you.

401 MR. BAILEY: I will again defer to the CRTC in terms of what percentage, what proportion, what level of contribution is the appropriate one, but what I can say is, because we are on the side of Canadian talent, that Canadian talent wants every opportunity they can find to create their work and get it out to the world. And that’s what we try to do. We try to identify that talent early; we are often working with people many years before they begin working outside of Canada’s borders, but it’s that really critical time of developing their talent that then allows them to be seen and engaged in work with by foreign companies.

402 So, that critical time of developing the talent is really important, and that’s what we want to do more to support. And then also, we want to bring the industry to Canada. And in our case, we have the vehicle of the Toronto Film Festival every year. We were one of the first international festivals to present films by streaming companies alongside Canadian distributors and others as well, because we were following the talent. Again, and that’s always the most important ‑‑ where we think there are strong stories being told, directors, writers, actors ‑‑ that’s what we will follow. And I think that’s really our role, is to help identify and nurture and support that talent.

403 COMMISSIONER LEVY: What would you do with extra funds to assist with promotion essentially? I mean, you can wrap yourself in promotion and discoverability. So, how would you see using those funds?

404 MR. BAILEY: Well, I will say that the combined hits of the pandemic and the actors' strike were hard on TIFF, and I think they were hard on the screen sector generally. So although we are recovering and we've had some support from the Federal and the Ontario government in doing that, we're not recovered yet. So I think that's part of it. We need to get back to the strength that we've had.

405 And on top of that, we're now building the possibility of a much bigger market presence. We have grown that over the last decade or more to the point where, as I said, we're generating roughly between $50 million and $100 million in sales every year. We think there's a much bigger ceiling on that. Our industry delegates at our festival number about 5,000. At the Cannes Film Festival's market, there are about 14,000, so there's a big way that we could go to really compete on an international level.

406 And there is a gap in the marketplace because there isn't a North American market that's presenting the kind of quality work we are for sale around the world. We're connected to the Asian film industries, to the Latin American, the European film industries. And what we would do with additional funds is significantly grow that market presence and the ability to actually make what we present discoverable to a lot more people at a much higher level.

407 THE CHAIRPERSON: Thank you, Commissioner Levy.

408 Vice‑Chair Barin ...?

409 VICE‑CHAIRPERSON BARIN: Thank you very much.

410 So I have a question that is specific to Ms. Lynch's position on the split between the funds going to French‑language versus English‑language production. And given that you are in the film sector specifically, what would you suggest is the appropriate split?

411 MS. LYNCH: So just a point of clarification, in spite of our name, our members do both work in the film and the television spaces. And but the principle is the same across both sectors.

412 We see no reason to change the existing one third/two third split. It has served both French and English producers well, including French‑language producers who operate in Ontario. And changing that split would necessarily mean a reduction in the amount of money available to English‑language Ontario‑based producers and have a detrimental impact on the industry in Ontario.

413 THE CHAIRPERSON: Okay. Thank you very much.

414 So perhaps I could ask what we have been asking other participants in the proceeding, which is what do you hope ‑‑ and perhaps you can each take a turn answering ‑‑ but what do you hope is the key takeaway that this Panel takes away from your written submissions, from your presentations this morning, and also is there anything else that you'd like to add that we haven't had a chance to cover today?

415 MS. LYNCH: So at the risk of sounding repetitive, just we hope that the key takeaway from our presentation today is that this proceeding results in more support in the system for Ontario‑based domestic content producers, but in such a way that remains fair and equitable for all players in the system, and that the sum total of those contributions go up and helping us capitalize on some of the enthusiasm we heard from the CMF and continue to build a strong sector for many years to come.

416 MR. BAILEY: Thank you for the opportunity. I would say that, if I can put it simply, loving Canadian stories is a habit and it needs to be built. We're not necessarily born with it. And we are, as we know, inundated with stories from outside of Canada.

417 What we do at our festival, year‑round at our screenings at the Lightbox, and across the country through Film Circuit is build that habit, grow that habit of seeing our own stories up on screen, talking about them, sharing them, making them our own and absorbing them. And we want the opportunity to do more of that because we think there's something critical at stake. We think we have a culture, an identity as Canadians only when we know and we love our own stories. So that's the main thing.

418 One other piece which I think is also important: we spent 48 years building one of the world's most important platforms for film and one of the world's most important markets for the buying and selling of film. It's right here in Canada already. So we encourage this process and whatever comes from it to use us, use that vehicle to help get Canadian stories out to the world more.

419 THE CHAIRPERSON: Thank you so much for your answers. Thank you to Film Ontario, thank you to TIFF for joining us today.

420 MR. BAILEY: Thank you.

421 MS. LYNCH: Thank you very much.

422 THE SECRETARY: Thank you. I will now ask CMPA to come to the presentation table. So when you are ready, please introduce yourself and your colleagues. And you have 10 minutes for your presentation.

PRESENTATION / PRÉSENTATION

423 MR. MASTIN: Good morning, Chairperson Eatrides, Commissioners, Commission staff. My name is Reynolds Mastin, and I'm the CEO of the Canadian Media Producers Association. With me to my right is Damon D'Oliveira, co‑founder of Conquering Lion Pictures and chair of the CMPA's board of directors; and to my left, Alain Strati, CMPA's senior vice‑president Industry, Policy, and general counsel; and next to Alain, Lisa Broadfoot, vice‑president of Industry and Business Affairs.

424 As you know, the CMPA represents Canadian independent producers of English‑language content for domestic and global audiences. Producers are the hub of Canadian production. They develop the project, raise the financing, and arrange for its sale and distribution around the world. They make it all happen.

425 Because they wear multiple hats, producers closely collaborate with other stakeholders, including creators, crew, funding agencies, broadcasters, streamers and distributors. Producers value a strong and balanced Canadian broadcasting system. Every part of it has a unique and important role to play, and all need to be successful in order for producers to be successful.

426 That system has undergone a fundamental transformation over the past decade. Online undertakings have grown exponentially in Canada. Consumer demand has shifted rapidly, as online services and platforms now generate billions of dollars a year. But this hasn't resulted in more domestic production, even as Canadians are paying for subscriptions, watching advertising, and buying or renting content from online services. A gap has been created.

427 The new framework of the Commission must fill that gap by delivering meaningful, additive contributions to Canadian programming. We need more Canadian stories created, developed, produced, and owned by Canadians, increasing our participation and representation in the broadcasting system.

428 The Commission's proposal for a base contribution recognizes the indispensable role the Canada Media Fund and Canadian Independent Production Funds play in the creation and production of Canadian programming as well as the importance of implementing these contributions as soon as possible.

429 This hearing is not about the application of an outdated regulatory framework. It's not about 1991 or highly prescriptive elements in Commission regulation. These elements are long gone. Commission regulation has evolved, whether it be group licensing, pick and pay distribution, or expenditure requirements themselves.

430 The Commission's new framework is another step in that evolutionary process. From our perspective, the framework is straightforward, flexible, and has the potential to be effective.

431 Damon ...?

432 MR. D'OLIVEIRA: Our production company, Conquering Lion Pictures, has collaborated on many Canadian projects. Our most recent feature film, Brother, tells the uniquely Canadian story of first‑generation Jamaican Canadian siblings raised by their single mother during hip hop's rise in the early '90s. Set in Scarborough ‑‑ where I grew up ‑‑ Brother, at its heart, is about the survival of diasporic communities as they make their mark in Canada. These are the stories we need to tell.

433 Programming provided by the Canadian broadcasting system must include a significant contribution from the Canadian independent production sector. For me, the uniqueness of that contribution is our diversity. Most Canadian producers are small‑ and medium‑sized businesses operating in communities across the country. We are from many communities, with different experiences, bringing a diversity of voices and creating a wide variety of content for television, cinema, and digital platforms.

434 Being a producer is not easy. Having been in the industry for almost 30 years, our company has a successful track record and a robust portfolio of content. But I think of the new and emerging talent in this country. How will they succeed in such a challenging environment?

435 Fortunately, the Act now includes objectives relating specifically to the participation and representation of under‑represented voices in the broadcasting system. While these amendments took significant effort, so far they are still words on a page. I know. I'm a producer, and that's where it all starts. Now we must work together to bring these words to life. That is the real challenge ahead.

436 Alain ...?

437 MR. STRATI: We are proposing a base contribution requirement of no less than five per cent of revenues, in part to address two considerations. For one, we believe contributions at that level will ensure production funds can maintain their role as sustainable financing options for Canadian programming. We are also cognizant of the Commission's stated intent that these base funding contributions would ultimately form part of overall contributions. As the framework is further developed, other pieces will be added, with limited disruption to funding structures or available resources.

438 As we discussed in our written submissions, the Commission's base contribution should recognize specific priorities to which funding should first be allocated, with the remainder then being distributed between the CMF and certain CIPFs.

439 Based on an estimated total funding contribution of $250 million, we are proposing that a minimum of $50 million, or 20 per cent, be directed off the top to registered funds that support Indigenous and equity‑seeking communities as well as other public policy objectives. These funds include the Indigenous Screen Office Fund, the Canadian Independent Screen Fund, and the Black Screen Office Fund, as well as the Broadcasting Accessibility Fund and the Broadcasting Participation Fund.

440 Once this mandated off‑the‑top contribution has been made, 80 per cent of the remaining funding should flow to the CMF, with the remaining 20 per cent available to other CIPFs. But of that 20 per cent, we are also proposing a minimum contribution of $20 million to the independent CIPF operated by Telefilm Canada.

441 Lisa ...?

442 MS. BROADFOOT: The CMF and the various CIPFs are critical supports in the development and production of Canadian programs. Financing a production in Canada is a complex business; it is an interplay of licence fees, tax credits, distribution advances, foreign pre‑sales, and contributions from these funds. In many cases, the programs would simply not be made without these funds. They can make or break a project.

443 Many of the funding mechanisms available to Canadian producers are triggered by broadcasters. The majority of funding distributed by the CMF comes through the broadcaster envelopes. While these funds are accessed by the producer, the funding decision is ultimately at the discretion of the broadcaster. They hold the key to access the funds.

444 To counterbalance this disproportionate negotiating power, the CMF has put in place rules limiting the rights that broadcasters may acquire. It imposes maximum licence terms and limits the types of rights a broadcaster can acquire for its licence fee.

445 The CIPFs should also have requirements to ensure that a Canadian producer is the central decision‑maker in the production; key creative positions are filled by Canadians; and the Canadian producer has beneficial ownership in the production and retains the ability to derive revenue from its exploitation on an ongoing basis. Base contributions must only go to funds that maintain these requirements, at least until codes of practice between producers, broadcasters and streamers have been put in place.

446 Reynolds ...?

447 MR. MASTIN: With these foundational pieces, Canadian independent producers will be better positioned to make their best possible contribution to the Canadian broadcasting system. It's a contribution that must, first and foremost, provide Canadians with a wide variety of programming that reflects, sustains, and showcases the extraordinary diversity and deep creative talent of our country.

448 But that is by no means the only contribution. Producers have always fulfilled a range of obligations in exchange for the privilege of being participants in our system. Whether it's developing the next generation of Canadian talent, whether it's collaborating with Canadian creators on their next project or ensuring that the wider ecosystem ‑‑ such as our crews, our animators, and post‑production personnel ‑‑ can have meaningful careers in their own country, producers embrace these and other responsibilities as living up to their part of the regulatory bargain.

449 We recognize that bargain will likely evolve through your implementation of Bill C‑11, not only for the independent production sector, but for all elements of the system. We look forward to participating in the conversation, both today and in the months to come, about how we can build a stronger, more inclusive broadcasting system where everyone has a role to play.

450 We thank you for your time and welcome any questions you may have.

451 THE CHAIRPERSON: Thank you very much, CMPA, for your presentation.

452 I will turn things over to Vice‑Chair Scott.

453 VICE‑CHAIRPERSON SCOTT: Good morning.

454 So I think I will start with the three priorities that you identified in your written submission, and the first being one that you've discussed considerably this morning, being the production of content by Indigenous, Black, or other racialized persons. So there you give a very detailed breakdown of at least the size of an initial contribution that would be required. But you've also identified priorities such as feature film and the Broadcasting Participation Fund. Have you done the math on those to kind of assess the scale of the need on those priorities as well?

455 MR. STRATI: I'll start with the Broadcasting Participation Fund just because, if you looked the last couple of years, there have I think it's about just short of $500,000 in terms of the use of the fund. So we're looking at the use of the fund over the last ‑‑ those years. The Broadcasting Accessibility Fund also has grants, a grant process which they are now ‑‑ both those funds have been in place for some time and are looking for new funding. I think it was 7 million or 8 million over a couple, like five years. So it's about a million or so or a million and a little bit. And the rest we're looking at for the funds that we've identified in really for Indigenous content, Indigenous communities as well as Black and racialized communities and other objectives you might have.

456 The $50 million is, I mean, this is sort of a ‑‑ it's, you know, we hesitate looking at numbers and trying to assess where we are. We roughly look at the Commission information that it has with the digital media survey. There's Omni and others that have sort of estimates. So there is an estimate of ‑‑ we took an estimate of $5 billion in terms of the revenue in the industry in the audiovisual sector and applied the five per cent. So it may be an estimate, but we're trying to put something, attach something to some numbers of discuss them.

457 VICE‑CHAIRPERSON SCOTT: Right. I think there is a lot of value in people trying to put numbers behind things, both either looking at a total number and calculating a percentage or, frankly, from the bottom up and looking at assessing it. In any event, both are valuable exercises.

458 Is there room in your math for support for local news as well?

459 MR. STRATI: So, you know, we have heard some comments this morning about local news. I certainly read the many interventions.

460 I think being from the producer side, we're looking at the funding for underrepresented categories of programming and really focusing on that. I think our position is no less than five per cent to have to those funding elements of the system.

461 So others have recommended perhaps money for news. News is important. We understand there's a policy direction which talks about an overall support from the broadcasting system. I guess what we're saying is not to carve it out from the five per cent. We're focusing on the five per cent.

462 There could be an opportunity for on top of or addition to that looks at the funding for news separately and specifically. I think that's a valuable exercise, as opposed to, you know, carving pieces of it.

463 So I think that's ‑‑ we're coming here to talk to you about the funding and production sector. I think there's an opportunity for them to mention. I think it was Unifor, I think there might have been other participants who mentioned this exactly, this sort of notion as to say is ‑‑ there's different opportunities and different parallel streams for funding different initiatives.

464 VICE‑CHAIRPERSON SCOTT: Thank you.

465 I am going to shift gears now. You also raised concerns about the company‑branded independent production funds. Could you speak a little bit more about that and the value in de‑branding them? If you have any concrete examples of where that's been problematic, having the branded funds, that would be helpful as well.

466 MR. MASTIN: We were coming at it from a perspective of how to be equitable in treatment of the funds. So those funds that are branded, there is a certain value that accrues to the brand that is associated with those funds. And so, you know, from almost a principle perspective, if you are going to allow that on a go‑forward basis, then it raises questions like should other funds then be certified that are also branded by, for example, the new players that'll be entering into the system. That's, you know, one way of looking at it.

467 Another way of looking at it is to say, you know, the market has evolved. The needs of the industry and of the system have changed, and therefore, perhaps on a go‑forward basis, we should be looking at disassociating those brands from those funds that already exist, and maybe even look at being more directive ‑‑ you being more directive in terms of how the initial base contribution flows and in what proportion as opposed to it being as discretionary as it is today.

468 VICE‑CHAIRPERSON SCOTT: Right. I always appreciate when you answer the questions I haven't quite asked. So that's perfect.

469 And I don't want to put words in your mouth, but would you say, then, that if there's an issue of bias or advantage, it's in the accrued good will? Or is there something more endemic in the operation of the branded funds than that?

470 MR. STRATI: No, it's not ‑‑ it's sort of ‑‑ Commissioner Scott, it's really the independence part. The independence part in the CIPF is governance. It is clearly governed separately and differently. That's not an issue. The question is it really an independent CIPF, which is the way to look at it saying there is ‑‑ there are now new ‑‑ there have been ‑‑ there are legacy contributors which have done work with the CIPFs and have done great work with the CIPFs. But they are culled of the contributor CIPFs. So going forward, you have new contributors. So when we look at equity and we look, there are many partnerships in the industry where, I mean, we heard from TIFF, others who come forward and their support is acknowledged. So I think the equity and to have that is that the support should be acknowledged either not at all or it should be acknowledged across the board or more across the board.

471 VICE‑CHAIRPERSON SCOTT: And in terms of access to the funds, I believe your submission was in support of foreign online undertakings having access to the funds in some configuration.

472 Could you speak about the net benefit to the Canadian ecosystem in giving foreign players access to those funds?

473 MR. MASTIN: We were also looking at that issue in terms of both how does this new framework get set up in an equitable way and also, hopefully, in doing so facilitate a smoother transition to that system, number one, but number two, does it also provide opportunity for new forms of partnership and open up opportunities for the commissioning of content, of Canadian content that may today may not exist to the same degree as would be optimal.

474 And so it was really looked at from both of those angles in terms of our proposal to allow them, subject to certain eligibility criteria.

475 Valerie Creighton spoke to that, the importance of that. There are existing eligibility criteria with respect to accessing CMF funds now. Lisa outlined the key ones from a producer perspective in our opening remarks. And our expectation would be that similar criteria would also be applied in a scenario where those foreign streaming services were accessing funding and commissioning projects from independent producers.

476 VICE‑CHAIRPERSON SCOTT: One of the notable aspects of your submission was that it put a fair bit of emphasis on the impact on Canadians. I think you had the phrase “Canadians pay more for television services and, in return, they expect more Canadian content”.

477 Because you did reference specifically the impact on Canadians and the cost to Canadians, could you share some more thoughts about that and how can we design a system that’s not going to have a negative impact on the pocketbooks of Canadians?

478 MR. STRATI: It’s an interesting question, and it's an interesting question that is not in any way unique to our discussion. That discussion has been a discussion in the broadcasting system for quite some time. It’s certainly been in the telecom system for quite some times, and I think it’s in other industries as well.

479 I’m ‑‑ and I’m not trying to sort of, you know, bypass the question, but I think organizations, industries adjust and the market adjusts to that, and I think the key element of that when we’ve talked about more programming is that there’s a significant benefit, and that benefit has been significant revenue generated by online undertakings in Canada.

480 And it’s not just foreign online undertakings; it’s also Canadian online.

481 So that ability and the marketplace and the regulatory bargain is to have that as a contribution to contribute a portion of what the benefit is to you.

482 So there’s been a significant benefit for quite some time and certainly been discussed this morning, and other jurisdictions are dealing with this issue as well and have looked at this issue and I think there are opportunities ‑‑ and, you know, France is one example, and there are others where their investments are then made, adjustments are made by the entities in that industry to try and, as much as possible, take advantage of those.

483 Now, for Canadians in terms of the content for Canadians, we talk about discoverability. Discoverability starts with the content. It can’t be discoverable if you don’t have the content. So we have to start with the content.

484 So we talk about more Canadian content is the demand and the interest to have more content inside of so much other content that’s available, so when you have that content, when you have those investments, then people will find the content and they’ll consume the content as they do other sources.

485 MR. MASTIN: If I just may add, I became particularly sensitive to this issue this morning when I got a notification from Apple that my Apple+ subscription is going from 8.99 to 12.99 in one fell swoop. And of course, we’ve seen similar increases from other streaming services.

486 So this is something they appear to be comfortable with doing when it makes sense from a business perspective to do it, but if the underlying premise is that the cost of these services should go up because streaming services, who are already producing at record levels in this jurisdiction because it is so cost effective to do so, I would question the economic basis for that kind of an assertion.

487 VICE‑CHAIRPERSON SCOTT: Thank you for those answers.

488 And I’ll close out my questioning before passing the microphone back on the issue of the threshold for contribution.

489 So your submission recommended a relatively low, I think you wanted to capture the vast majority of online undertakings. I’d be interested in your thoughts given the massive scale of the largest online undertakings ‑‑ we’ve heard or read in the written record arguments that virtually everyone else could be considered nascent, right. If you’re not one of the bigs, then you are, in fact, very little.

490 How do you response to the arguments that including some of those smaller players could have a negative impact on innovation?

491 MR. STRATI: It’s interesting. I think I’d say two things.

492 I think $10 million is not a small number, and many of these undertakings have ‑‑ are in multiple sort of territories, so there’s multiple opportunities. And I think if you look at this ‑‑ you know, the types of services available now in Canada, if you look at $10 million thresholds for revenues, there are a lot of services in Canada that are ‑‑ and I think it's highlighted in the Commission’s decision, which I ‑‑ decisions, which I know is about registrations and not contributions, but recognizes the fact that there are ‑‑ it’s not just the big service with the big revenue for the big content because you also have niche services, you also have ‑‑ you know, in areas whether it's language, content or different things where they fall within that and there’s an opportunity for them to contribute in terms of the Canadian program that’s available to Canadians as well.

493 So I think, you know, that’s part of the threshold and I think what we’re trying to say is, is there can be different contributions as there has been in the system given the size of the service. But for a service of $10 million would seem to us to be threshold in which to start having the conversation about that contribution that should be made.

494 Just like it is currently now, size and scale of a service can have a different contribution, but it is to participate and contribute in the system.

495 VICE‑CHAIRPERSON SCOTT: Thank you very much. Those are my questions, Madam Chair.

496 THE CHAIRPERSON: Thank you. And thank you, Vice‑Chair Scott.

497 Let's go over to Commissioner Levy.

498 COMMISSIONER LEVY: Morning. I’m interested again in our policy directive that talks about incentives and outcomes.

499 Given that some of the foreign online streamers have made it clear that they are not thrilled with the notion of contributing a base amount to the system, what do you think that ‑‑ what do you think would incentivize a more collaborative approach? Is it your notion that they should have access to the system through the ‑‑ in the Canadian independent producers, for instance?

500 MR. MASTIN: That appears to us, Commissioner Levy, to be a fair and equitable approach. If they are going to be contributing on a go‑forward basis, there should be an opportunity as well to access those funds subject to funding criteria such as what we’ve outlined.

501 COMMISSIONER LEVY: And I heard from Valerie Creighton this morning that they’re now talking in terms of having distributors included as gatekeepers in the system, and I wondered how our resident distributor on the panel feels about that possibility.

502 MR. D’OLIVEIRA: Well, I don’t claim to be a distributor. I am an independent producer. I work with distributors a lot, as I do with broadcasters.

503 I do think that it’s a moment where we haven’t really looked at our Broadcasting Act in 30 years and the industry has evolved. So I think it’s a worthwhile investigation to go down a road to look at other alternate ways of raising finance because it has been difficult.

504 There is an anemic quality to the independent production sector in Canada and I welcome always of increasing the revenues that are available to us because there is a demand for independent Canadian content, to see more of it.

505 COMMISSIONER LEVY: Which leads me to my final question, and that is, how are Canadian audiences going to be able to say that in terms of outcomes, they can see what the result is of changes to the system? What do you see as the outcomes?

506 MR. MASTIN: One very tangible outcome would be to see on their screens on whatever services they subscribe to their own country reflected back to them in a way, arguably, it has not fully been to date. And that is why ‑‑ and we’ve been sort of talking about this internally as super priority, that the super priority for this first phase of implementation of the new framework by you should be to ensure that real resources are directed to funds that will ensure that diverse creators and Indigenous creators get to tell their own stories. And it’s also why we’re proposing those same eligibility criteria for funding also apply to those funds so as to ensure that when they have a hit on their hands that they also actually get to benefit from the success of that show.

507 I think that would be a very tangible, you know, five years ago, five years from now, visual actual real difference in what our system looks like and how it’s serving Canadians.

508 MR. D’OLIVEIRA: If I may add a benefit to Canada, I can speak to an example of my recent film, Brother, where after having a nationwide theatrical release and then recently released on Crave, we had, through social media, a reach‑out from a young man that’s 16 years old, black, living in the Jane‑Finch corridor who happened to see the film and said, “I have never seen that reflection of my experience growing up in Canada on screen”.

509 So that’s where I would welcome the support as we put forward for the various diversity funds that allow us to continue to tell these stories.

510 THE CHAIRPERSON: Thank you.

511 And thank you, Commissioner Levy. I will turn things over to Vice‑Chair Barin to continue.

512 VICE‑CHAIRPERSON BARIN: Thank you.

513 So I have a question on new and emerging talent, which is something that you touched on in your presentation.

514 So how do you propose ‑‑ and I know you’ve talked about prioritizing funds and ‑‑ how do you propose that the Commission ensure that funds get to that talent, so beyond the productions to the actual artists and creatives that are sort of up and coming? Do you have any proposals?

515 MR. D’OLIVEIRA: I think there are already initiatives in place that allow that. There are a number of initiatives that are currently in place through Telefilm Canada and through the CMF for emerging voices.

516 I think with the instigation of an ISO fund, a BSO fund and the CISF, that would only open the doors to a wider range of talent and voices who are able to come up into the system.

517 MR. STRATI: And just a quick add‑on to that, I think it’s something the Commission has done with tangible benefits and other policy sort of priorities to say I understand about new and emerging, but also that a significant portion of the funding goes to production, production ‑‑ on the screen sort of production. There’s flexibility for other sectoral development and other initiatives, which are great, but also that it is to work with that talent for the production of the content.

518 VICE‑CHAIRPERSON BARIN: Thank you very much.

519 THE CHAIRPERSON: You said in your remarks this morning that funding is needed as soon as possible, to quote you. Can you talk to us about the urgency?

520 MS. BROADFOOT: Certainly. I can speak to that.

521 Over the years, these funds have provided incredible support to Canadian producers, but we have seen the base of that funding decline was broadcaster revenues has declined, so we need to see more funding coming into that system so that producers can continue to make the content that they create.

522 Some of these funds, the CIPFs provide additional flexibility for producers to work with different kinds of content. Some of them promote digital content, short form content. Kids’ programming is especially important to access these funds.

523 So we think that increasing the base will help producers increase their access to these funds and ability to make new content.

524 THE CHAIRPERSON: Thank you.

525 And coming back to the question of this gap that you’ve talked about because one of the things that we’ve seen is, you know, there’s ‑‑ and this is on the record from certain intervenors. There’s a lot of money being put into the system through online undertakings, but you talked about a gap.

526 Can you elaborate on that further? Money’s going there. Can you talk about the gap a little bit more?

527 MR. MASTIN: Well, I think it’s important in the conversation about this to, first of all, clearly define the terms and distinguish what we’re talking about.

528 So we have in Canada ‑‑ we have built in Canada as an industry an incredibly competitive foreign service location industry, and the success we’ve enjoyed working together ‑‑ and I do mean the entire industry at the moment. We may have different views in this room, but the moment we leave this room, we as an industry, one of our key areas of focus is how do we remain as globally competitive as a manufacturing platform for the cultural content of those players. When they bring their IP from Los Angeles here, how do we maintain that competitive edge?

529 And thankfully, up to now, we have been able to do that and we continue to do that. And the reason why we’ve been successful is because it is a good business proposition for those players. We bring value to the table and they come in and they employ a whole bunch of people and help sustain the industry. It's wonderful. It’s good business.

530 When we talk about the gap, we’re referring to the incredible pressure that domestic Canadian production has been experiencing over a number of years, ironically in part because of the entrance of these new players into the system and the competition that, for example, Mr. Péladeau was talking about and the fact that, as a result, revenues in the regulated market as we’ve known it today have also come under pressure. And that, of course, directly impacts the entire ecosystem all the way through down to production.

531 So from our perspective, the core purpose of ‑‑ one of the core purposes of modernizing the regulatory framework is to strengthen and reinforce that domestic production sector working in partnership with those streaming services because our members work with them all the time. They bring all kinds of things to the table that are unique to them, including that global perspective.

532 And do you want to speak to that a little bit, Lisa?

533 MS. BROADFOOT: Sure. Most of our members do a combination of domestic content production and service work. It creates a virtuous cycle where they produce service work and they train their crews, it provides them with crucial cash flow and then that, again, goes back to feed their own development of their own content production. And together, we have built an incredibly strong industry.

534 However, as Reynold said, as these foreign location services have cornered the market in production in this country, domestic production has not kept pace. And in order for domestic production to continue to grow, we need new funding in the system so that producers can access that funding and, again, crate that virtuous cycle where producers own their IP, they develop the property, they produce the property and they sell the property around the world and that money gets funneled back into their companies to do this all over again.

535 And within that, it’s perfectly reasonable and perfectly acceptable for producers to continue to work on foreign location service work. It all works together in an ecosystem.

536 THE CHAIRPERSON: Thank you for that.

537 So maybe just to conclude, could you share with us what CMPA's key takeaway is for the Commission? And if there’s anything else that you’d like to get on the public record this morning, then I’d invite you to share that with us as well.

538 Thank you.

539 MR. MASTIN: Well, one thing that we were struck by, Chairperson Eatrides, when you did your opening remarks was you identified four core questions for the purposes of this proceeding, and three of them might describe the sort of mechanics of the implementation of an initial base contribution and then the last one, you were identifying, from our perspective, a key priority, which is how do we ensure a truly diverse representation in the Canadian broadcasting system through this proceeding and the ones that are going to follow.

540 And we sort of looked at each other and went, well, we are perfectly aligned because that is the core of our proposal to you here today in terms of the $50 million that we are proposing that be directed to the Indigenous Screen Office and the other production funds that support diverse communities.

541 And maybe it’s worth saying the reason why we specifically identified a dollar amount and not just a percentage was that we were told by our stakeholder partners that that is what they needed in hard dollars in order to best serve their communities. So we thought it was important for us to just put that on the table, that specific amount.

542 And then, of course, to ensure that once those funds are flowing that the producers and creators who work on that shows ‑‑ those shows are able to actually share in the success of those shows by having eligibility criteria in place that apply across the board.

543 So that would be, for us, the takeaways.

544 In terms of perhaps the one thing that we haven't talked about, it’s the one thing we actually, at this table, would hugely prefer not to talk about, but because it has been proposed and it’s already been discussed this morning, we feel somewhat duty bound to talk about, and that is the proposal to transition, I’ll call it, the funding formula from one‑third, two‑third French‑English to 40 percent French, 60 percent English.

545 And it’s the topic we would prefer not to talk about because one of the things that we hugely value at the CMPA is our close collaboration with our stakeholder partners who represent the French language communities in our industry, and it’s something we’ve worked very hard on collectively, all of us. We even have the Chair of the AQPM, Josette Normandeau, on our Board because we want to have that close an access of collaboration on as many issues as possible.

546 But we have a proposal on the table, so this is the fun part of the job.

547 So just in relation to that, I would say a couple of things.

548 The first is, we have to be mindful of the current context, which is we have these new giant entrants ‑‑ not so new, in the past 10 years ‑‑ but new to our system from a regulatory perspective who have been in our market, both English language and French language, for many years now and who, to date, have not made, I’ll call them, significant investments in original French language programming. Those investments to date, I think, can be fairly described as modest. I’m not offering any colour commentary, but they’re low.

549 And our assumption is that one of the things that you are going to ensure happens through this and subsequent proceedings is that there is, in fact, additional significant investment in original French language content. If we recognize that, we support that. The question is the mechanism by which that is achieved.

550 So that funding formula we should bear in mind actually originates with the Department of Canadian Heritage and it exists as the formula that is applied to, for our purposes, the CMF’s and Telefilm Canada’s distribution of funding.

551 And so you know, there’s a whole other conversation that is and should be going on over there and, in our view, that probably is the best place to have that conversation because it is their formula that they developed and is still, you know, very much at play in our system.

552 The second thing we would just also say is that this is an opportunity for the system to be strengthened for the tide to rise and all boats to rise, and there is no need to do it by making adjustments to the system where literally you would be transferring very important resources from one part of our production community to the other, which can only be disruptive, which can only be divisive and, in our view, there are ways to achieve the objectives that have been reinforced and affirmed in the modernized Broadcasting Act without having to go down that divisive road, which we are very anxious to avoid doing, both because of the impact on our members and because we wanted to maintain these very strong relationships with our French language stakeholder partners.

553 I’m also going to just turn it over to Alain because certain numbers were put on the table earlier this morning in this regard and I think it’s important for those to be contextualized.

554 So over to you, Alain.

555 MR. STRATI: Thanks.

556 So part ‑‑ I heard this morning from TVA and it ‑‑ you know, the financing model in profile, we have sort of a couple of ‑‑ and many others do too in terms of the financing structures that go into content. So when you look at those ‑‑ some of those financing structures, you often find kind of, you know, key differences or elements that are a bit different which add, I think, nuance and additional ingredients to the conversation. And I think when you look at a gap in ‑‑ for example, in budgets, a lot of that gap is because of the inputs in the financing.

557 So the input in financing for English language production, there’s significant input for international distribution and pre‑sales, so basically international market in that investment, which are not there for French language content. That is a difference.

558 In the French language context, there’s more licence fees paid proportionately in the budget than English language fees, but also, when you look at the different types of content, there’s over‑indexing in the French market in lifestyle and in variety in performing arts. So that is more of a broadcaster investing in that kind of content as opposed to content that has the international distribution sort of element to it.

559 So just to say that in those discussions, there’s nuance and other pieces to the puzzle which talk about and provide perspectives on the different financing pieces and the differences in content.

560 MR. MASTIN: If I may just add one last thing on this.

561 We just concluded a national member consultation to talk about the implementation of Bill C‑11, and so one of the things we felt we had to inform our members about was this proposal, which came as a shock at members, I think I can fairly say. And one member said to me because I think it just contextualizes it, “How am I going to get my show made? I’ve already invested all of my producer fees and tax credits just like my French language producer counterparts have to do. It’s undeniable it’s the case across the board. The Canadian broadcaster is not going to raise their licence fee. Every year they lower the licence fee and tell me I have to go out into the international marketplace and somehow fill the gap. How am I going to fill that gap?”.

562 And we did not have a useful answer to that question in that scenario, and that’s why we’re hoping to avoid that scenario if we can while still achieving the objective of ensuring significant additional investment in original French language production.

563 THE CHAIRPERSON: Thank you very much for that.

564 Thank you to the CMPA for your submissions. Thank you for being with us this morning, turning into this afternoon. We really appreciate it.

565 I will turn things back over to the hearing secretary.

566 THE SECRETARY: Thank you.

567 We will take an hour for lunch, so we will be back at 1:30.

‑‑‑ Upon recessing at 12:28 p.m.

‑‑‑ Upon resuming at 1:30 p.m.

568 LA SECRÉTAIRE : Bon après‑midi. Good afternoon.

569 We will begin this afternoon with the presentation of Motion Picture Association of Canada.

570 Please introduce yourself and your colleagues, and you have 10 minutes for your presentation.

PRESENTATION / PRÉSENTATION

571 MS. NOSS: Good afternoon, Madam Chair, Commissioners and Commission staff. Thank you for inviting us to offer the shared policy perspective of the members of the Motion Picture Association‑Canada. My name is Wendy Noss and I am the President of MPA‑Canada.

572 On our panel with me today, starting on my right, are Stéphane Cardin, Director, Public Policy, Canada for Netflix; Martha Heller, Vice President, Government Relations and Regulatory Counsel for Paramount Global; also with Paramount Global, Keith Murphy, Senior Vice President, Government Relations and Regulatory Counsel. To my left are David Fares, Vice President, Global Public Policy for The Walt Disney Company; and Monique McAlister, our counsel from Goodmans.

573 MPA‑Canada is the Canadian affiliate of the global Motion Picture Association, the leading advocate of the major international producers and distributors of film, television and streaming content for audiences around the world. The studios we represent include The Walt Disney Company, Netflix and Paramount Global, who are here with me today, in addition to NBCUniversal, Sony Pictures Entertainment and Warner Bros. Discovery.

574 Throughout the development of Bill C‑11, we have endeavoured to be constructive participants in the policy‑making process and we hope to continue to play a positive role in helping you develop innovative and effective broadcasting policy for the future.

575 Let me start with some essential facts. The MPA‑affiliated studios and streaming services are major investors in the Canadian creative economy. Last year global producers spent more than $7.5 billion across the country, accounting for 59 percent of all the jobs for production workers in Canada, and more than 85 percent of the total growth in production investment in Canada over the last decade.

576 While some refer to these productions as “foreign”, we think it’s time to put dated designations to one side and look at the reality.

577 We found that on average over 97 percent of the cast, crew and production personnel working to create our world‑class productions here in Canada are Canadians. In 2021 alone, our projects also supported more than 42,000 Canadian businesses providing goods and services across the country.

578 Last year, global studios and streaming services also provided more funding for new Canadian‑owned productions than either the CBC or the Canada Media Fund. Global investors were the source of 13 percent of the total production investment in Canadian‑owned productions, an amount similar to that of the private regulated broadcasters in Canada, which provided 15 percent of the total.

579 In addition to financing new productions, global streaming services also provide revenue and opportunity for library productions that are Canadian‑owned to reach new global audiences.

580 We are proud of our many partnerships with a broad range of Canadian broadcasters, producers and creatives; our commitment to advancing equity, diversity and representation in front of and behind the camera, amplifying underrepresented voices and untold stories; and our partnerships with Canadian cultural organizations that help train, advance and support the next generation of Canada’s creative workers.

581 Our members offer Canadians both subscriber and free‑to‑consumer streaming services, ranging from the Disney brand favourites found on Disney+, the mountain of entertainment on Paramount+, Paramount's free Pluto TV, the much‑loved originals of Netflix, to the best in Japanese anime on Sony’s Crunchyroll. These streaming services bring more of Canada to the world and more of the world to Canadians.

582 Our members compete with each other daily, but they are united in their agreement with the Commission’s stated approach to establish broadcasting policy for the future, to explore new models to achieve an outcomes‑based approach that permits broadcasting undertakings to design their contributions in a way that best reflects their business models and provides them with flexibility over how they can best contribute to the Canadian broadcasting system.

583 Contribution requirements should flow from a well‑defined desired outcome and embrace the principles of proportionality, fairness and flexibility. That is why we believe the Commission should reject both the proposal to order foreign online undertakings to make a mandatory initial base contribution to the legacy production funds and the idea that this initial contribution should then roll into a mandatory base contribution as part of the overall contribution framework that has yet to be decided. We think such an approach would deliver less, not more, value to Canadians, including Canadian creative workers.

584 In our submission, we offer further details on why, including:

585 ‑ The rationale for ordering an initial base contribution is based on the false premise that Canadian broadcasting undertakings are the only ones currently contributing to the Canadian broadcasting system. This couldn’t be further from the truth, which is that global online undertakings are now and have for years made significant contributions that benefit the Canadian broadcasting system and the Canadians working within it.

586 ‑ There is simply no urgency to establish a mandatory initial base contribution before this Commission can fully consider and establish an overall contribution framework in the months ahead.

587 ‑ Ordering a mandatory initial base contribution at this interim stage will prevent the Commission from reaching its goal of adapting to the evolving regulatory environment. It will limit the Commission’s flexibility in designing a holistic contribution framework with the benefit of the evidence, analyses and perspectives that will be gained from the next steps of this proceeding.

588 ‑ There are too many unknowns to establish a mandatory initial contribution to a specific legacy fund. In providing the Commission with two years to fully implement a new regulatory framework, the government directed that one of the priorities was for the Commission to determine a new modernized definition of a Canadian program. That determination has not yet been made. In addition, it is not yet known what the contribution requirements of traditional broadcasters and BDUs should or will be in the future.

589 ‑ Making such an interim order seems inconsistent with the Commission’s goal for equitable access to production funds by Canadian and global services. Canadian control requirements for existing legacy production funds deny global streaming services equitable access to those funds. It is simply not known when or whether the rules that require Canadian control to qualify as either a “Canadian program” or “Canadian broadcaster” could be changed to be non‑discriminatory in the future.

590 ‑ A mandatory initial contribution would run counter to the Commission’s objective for a flexible, outcomes‑based approach to contributions. A new overall framework should provide broadcasting undertakings with the option to contribute to a wide variety of funds as part of a range of options available that meet new broadcasting policy objectives.

591 ‑ A mandatory contribution to a legacy fund could end up redirecting monies that would otherwise be invested directly with Canadian creatives or on the creation, production and presentation of Canadian programming. Global economic conditions, shifting market and consumer behaviour, and rising production costs have created financial challenges across the entertainment industry as a whole. While each streaming service has its own unique business model, content strategy and a plan to grow its audience, industry experts concur on the overall global shift toward decreased content spending, lower production budgets and fewer original titles.

592 Global studios and streaming services want to continue as key partners in Canada’s creative economy, creating opportunities for Canadian talent to stay in Canada, develop their skills and work at the top of their craft on stories that resonate with audiences in Canada and around the world.

593 We urge the Commission to reject calls to try and force square pegs into the round holes created many decades ago and set aside dated ideas of how old contribution models will produce desired outcomes for Canada.

594 Instead, we urge you to allow us to work with you to innovate and build a renewed and modernized contribution framework. We know that we can use our strengths to contribute to the cultural, public policy and economic goals of Canada’s new Broadcasting Act, and we agree that the time is right to explore new models and transformative ideas on how each player can best contribute.

595 Thank you for your attention. We appreciate the opportunity to appear today and look forward to taking your questions.

596 THE CHAIRPERSON: Thank you very much to the Motion Picture Association of Canada.

597 I will start the questioning for the Commission and then I will turn it over to colleagues.

598 I had a few sort of higher‑level questions and then I was hoping to get into the three topics that we are exploring, so applicability, contributions and funds.

599 So just to start out, you used the word “equitable” quite a bit throughout your submissions and you used that again today. Could you talk to us a little bit more about what you mean when you are talking about equity vis‑à‑vis traditional broadcasters and then the global online services?

600 MS. NOSS: Thank you for the question.

601 First, I think it's important to go back to the Act. In terms of the development of the new Broadcasting Act, it was clear that the government's intention was to ensure that there are equitable, not equal contributions. We heard that over and over in the development of the Act, and that is reflected in both the Broadcasting Policy and regulatory policy objectives. In particular in section 3 there is, as you know, a bifurcated section that has and establishes the ways in which foreign online undertakings can best contribute in an equitable manner.

602 It was the Commission itself that as far back as 1998 recognized the fact that there is a difference between foreign undertakings and Canadian undertakings and how they can best contribute to the system.

603 Again, this idea of equitable contributions with foreign online undertakings contributing in the way that makes sense for their business model, their content strategy, the fact they make content for the world and not for the closed Canadian market has been recognized not just throughout the development of the legislation but Senator Gold in the Senate made it very clear that it was simply unrealistic for the expectation that global business models would contribute in the same way.

604 What is important, though, is the fact that foreign online undertakings or global undertakings are already contributing, and the way in which they contribute is different than Canadian broadcasters. But in terms of how they can play to their strengths, it is really ensuring that there is an outcomes‑based approach that will look at these new players and not simply try and replicate legal regulatory policies that were designed for cable companies and how cable companies could best contribute.

605 So I think when we look at equitable contribution, we look at an outcomes‑based framework that will allow each different streaming service, and they are very different in their content mix, in their framing of Commission content, in their business models, whether it's subscriber or FAST, each will contribute equitably but it will not be the same as Canadian broadcasters.

606 I think when we talk about equity, we also talk about there isn't equitable access to the legacy funds. So those funds have rules that limit Canadian control, Canadian broadcasters, and that means that at present there is no equitable access for streaming services, foreign streaming services to those funds.

607 THE CHAIRPERSON: Okay, great, thank you. I would like to come back to some of that, but maybe we can just move into what the global streaming services get from being in Canada. We obviously know that there is increased presence in Canada in terms of global service production. What are the benefits to the global streaming services of being in Canada?

608 MS. NOSS: Keith.

609 MR. MURPHY: Thank you, Madam Chairwoman. I'm with Paramount Global, Keith Murphy.

610 We have been in the market in Canada for more than 75 years now. Our streaming services Paramount+ and Pluto TV are newer to the market, launched in just the last two years, but we have a long experience in Canada. So we are familiar with the quality of the creative worker in Canada. It's one of the reasons we locate so much of our global production in Canada. We have about a billion dollars annually that we invest in Canada in production. We of course are taking that content and then promoting it to the world and using crews on many of those service productions that are 95‑97 percent Canadians.

611 Now that we are here in a different capacity as a streaming company, we have an even greater demand for content created by Canadians for Canadians and we are investing in original Canadian content to meet that need. We're doing that before the Act required it and before we knew that we would be appearing before you.

612 We are licensing Canadian content for those services and we are becoming not a Canadian service but a global service that has appeal to Canadians. We know that Canadians want to see Canadian stories, but, frankly, they know Paramount Global and hopefully they know Pluto TV for the great global content that we bring.

613 So we think there is a tremendous opportunity here. We are seeing very encouraging growth even though we are one of the later entrants in the streaming market. We really see it as a partnership. That's why we've been supportive of Bill C‑11 and why we are eager to come talk to you and take account of the contributions that we are making, have made and will make.

614 Frankly, with the hearing starting on the question of initial contribution, it was a bit surprising to us because we feel as though we haven't had a chance to demonstrate to you and have the Commission assess the totality of our contributions. The proposal around an initial base contribution seems to presume that there aren't any and that there has been free riding of some sort, and we don't think that that is the case.

615 MR. CARDIN: If I may, I would just like to add to my colleague Mr. Murphy’s remarks, essentially to emphasize that I think what we get out of the Canadian system, if that is the term, is really the ability to work with great Canadian creators, because that is what we are looking for ‑‑ primarily is the best in Canadian stories that we will be able to present to our members both in Canada and globally.

616 So, while we do ‑‑ yes, we are involved in service production activity across the country, and I think that the statistics that my colleague Ms. Noss put forward are compelling and demonstrate, you know, the significant contributions of service productions to Canada.

617 We are also making several original Canadian content productions that qualify even under existing definitions in English and in French, working with a multitude of Canadian content producers on shows for which they retain the rights, working with most of Canada’s English and French language broadcasters, public and private, on co‑licensing models like the recently announced Arctic comedy series that we will be starting to shoot in Nunavut in the spring, which is a co‑license model between ourselves the public broadcaster CBC, and APTN. And it’s a comedy series from two Inuit creators and is, quite frankly, a first in the Canadian broadcasting landscape.

618 So, working with great creators and taking those stories to the world is, I think, what we are primarily getting out of Canada.

619 Thank you.

620 MR. FARES: Thank you. If I might add from Disney’s perspective, we, like our colleagues at the table, Paramount and Netflix, have also done a significant amount of production for decades in Canada. We spend approximately, in normal years, about a billion dollars in production; 2022 was actually 1.5 billion dollars.

621 But we don’t just engage in service production. We actually have boots on the ground, and we build businesses in Canada. I’ll give you two examples: Industrial Light and Magic, which is a wholly owned subsidiary of Lucas Film, which is a subsidiary of the Walt Disney Company, has one of its six offices in Vancouver. In 2022, they actually built their state‑of‑the‑art stagecraft stage in Vancouver, which is a virtual production stage. So, we contribute by hiring at least 700 people at any given time in a year, but we are also ensuring by the infrastructure investments that we are making here and the skills development that we are doing, that Canada remains a centre of excellence for VFX production.

622 Then, in 2022 as well, Disney Animation Studios opened its office in Vancouver. It has since then hired over 300 people. They are continuing to engage in a robust recruitment campaign and they plan on continuing to grow there. So, it will be a centre for our animation production because there has been so much going on in L.A. that we needed to find another location, and Canada, being a great place to do business ‑‑ it’s one of our top four production markets in the world ‑‑ we invested here.

623 So, it’s not just service production; it’s investment in infrastructure, it’s investment in skills development, and it’s a long‑term commitment to the market. So, I know one of the theses behind Bill C‑11, which is if you benefit from Canada, you should contribute to Canada ‑‑ we didn’t wait for Bill C‑11; we’ve been contributing for a very long time and we look forward to working with you to develop a regulatory framework that simply enhances the investments that we can make and contribute to Canada.

624 Thank you.

625 MS. HELLER: Madam Chair, may I just add one final point before you move to your next question? Which is that, while we very much benefit from working with Canadian creatives directly, one thing that we’ve learned very much recently is that this is very much a symbiotic relationship and that Canadian creatives really appreciate working with us directly as well.

626 And, in particular, we have been recently for Paramount+ Canada working on an original development slate, and through that process, told by our executives that we hear every day from Canadian creatives and companies that are interested in working with us in that process, that they very much appreciate another opportunity to work directly with a company like ours.

627 THE CHAIRPERSON: Thank you very much for that.

628 So, we have heard about the significant investments that you’ve talked about and you have included in your submissions, and you talked about the 7.5 billion dollars this morning. We have seen on the record, and you have read this and I know it’s a hefty record, but, you know, we have seen ‑‑ and it was talked about this morning ‑‑ that, you know, there continues to be a gap, that the necessary resources are going down, and that more needs to be invested into funds. And we can have a discussion around that as well.

629 What would be your response to the fact that there is still this existing gap?

630 MS. NOSS: Thank you for the question, Madam Chair. And if I can just break it down into ‑‑ because I think all of those themes were reflected, but from various different perspectives, in what you heard this morning. So, let’s talk about what each of these players in the system said: the broadcasters, the Canadian producers, and the funding organization.

631 The broadcaster said that the need for a mandatory initial‑based contribution was because foreign players had not been making such mandatory contributions. But none of what was said bore that out, because what the broadcasters talked about was the changing market conditions, with more consumers migrating online and, as you heard from Mr. Péladeau, 80 percent of ad revenue now going to Facebook and Google. None of that is going to be solved by imposing a mandatory initial‑based contribution on global streaming services.

632 The traditional broadcasters have argued that their existing contribution framework is stifling their creativity and they are being forced to compete with one hand tied behind their back. They have said that they’ve been asking for a change of conditions imposed on them since 2011. That is before the streaming services were in the market in the way they are today, including the range of streaming services not just offered by MPA members but obviously a number of ad‑supported and subscription‑based streaming services that you are going to hear from in the weeks ahead.

633 So, the problems that the traditional broadcasters have brought to you as problems that they are facing are no doubt acute and real, but none of those problems are going to be solved by imposing a mandatory initial‑based contribution to a legacy fund that is going to stifle the creativity and the ability to work directly with Canadian creatives that all of these streamers have right now. The regulatory requirements regarding expenditures they have characterized as dated regulation ‑‑ regulatory squeeze that does not allow them to succeed. So, with respect, I fail to see how it would help them succeed to impose those same regulations on foreign online undertakings.

634 The Canadian Association of Broadcasters panel in 1998 said it was incumbent upon Canadian broadcasters to stop relying on foreign programming to make money and, quote,

    “to make Canadian programming pay for itself rather than regarding it as a cost of doing business. Canadian programming has been a cost of doing business, and I think it is in everyone’s best interest to turn it into a bs that makes money, not just a costing business ‑‑ just keep throwing money at it and then you make your money on the foreign stuff, and everyone is happy.”

635 I am quoting, by the way. Those are not my words.

636 So, the point in sharing this with you is this is from a 1998 Canadian television policy review. Again, the problems that the broadcasters have are acute and important, but they are not going to be solved by having foreign streamers pay a mandatory initial‑based contribution.

637 Next, you heard from Canadian producers, and they indicated to you that the funding levels from CMF were dropping because there is a drop in the use of the Canadian broadcasting system. But what there haven’t been is a drop in Canadian content production or Canadian television production.

638 So, the profile report, which I assume you are all familiar with, is the report put out by the CMPA every year, and it confirms that since 2017, 2018 to 2021, ‘22, which is the last year of the report, there has been a 31 percent increase overall in Canadian content production. The English average year‑over‑year is 6.4 percent. The French average year‑over‑year is 15 percent. The overall average year‑over‑year is 8.7 percent. And in fact, last year there was a 38 percent increase in Canadian content production.

639 Now, granted some of that was making up for the CPE issues that happened over the pandemic, but as the statistics I have just quoted you demonstrate, there have been increasing, record levels of Canadian content production since 2017, ‘18. They have not been increasing with the same pace as the investment from foreign streamers, and that is true, but the increased investment from foreign streamers is a good thing for the Canadian creative market. It is not a bad thing.

640 There has been an increase year‑over‑year from foreign streamer services that has allowed Canadian creative talent to achieve success on the world stage. You heard Cameron talk passionately this morning about Canadian creative talent like Maitreyi Ramakrishnan, about Denis Villeneuve, about Shamier Anderson. All of those folks have achieved their success working with global producers and streamers.

641 Then, we turn to the Funding agency, the Canadian Media Fund. Again, you heard that you should be ordering a mandatory initial‑based contribution now because monies to that fund have been decreasing. But at the end of the day, what these streaming services bring in terms of their strengths is working with Canadian creatives directly, offering direct commissioning, financing at the front end, acquisition at the back end ‑‑ a whole range of business models and ways in which they can contribute.

642 So, with respect, there are of course challenges with the Canadian Media Fund, but these folks can best contribute by partnering directly with creatives and continuing to create with Canadian producers, broadcasters, and creatives on content that can be showcased here and around the world.

643

644 THE CHAIRPERSON: Thank you for that, and maybe I can just add to that. So, you spoke about what we heard and what we’ve seen on the public record in terms of the need, and we’ve seen this ‑‑ it’s out there ‑‑ the need for additional resources to be put towards these funds.

645 We have heard about the urgency, which is what I wanted to ask you about. You know, we even heard words this morning like ‘pressing need’, ‘as soon as possible’. So, we’ve heard that there is urgency and you have said in your submissions that there isn’t this sense of urgency that we should take the time ‑‑ and I recognize a lot of the words of the blank sheet of paper in your submissions ‑‑ we should take the time to look ahead and do things differently.

646 Can you talk to us a little bit about, maybe sort of respond or react to the urgency that we’ve been hearing about and reading about on the public record?

647 MR. MURPHY: I can take that, to start at least, Madam Chairwoman.

648 We heard a lot this morning, and we have seen in other submissions, as you mentioned, that there is a sense of urgency, although that urgency seems to be around the funding of CMF. And if the purpose of funding CMF is to promote expenditure and creation of Canadian programming, we don’t see urgency around that. Instead, we see growth in that. We see that before even Bill C‑11 was passed. And you have before you a panel of folks who are bringing new investment to original Canadian programming and were able to do that directly in a way that our partners in Canada tell us is a more efficient path. We bring a special expertise that allows them to go beyond just Canada and promote themselves to the world, to do that in a collaborative way with us.

649 So, we think there is speed to our participation in the market. And frankly, there are consequences, I think, that you need to take into account as you assess urgency. And for us, as a company that is new to this market, that is in essentially start‑up mode, we have a budget to spend on Canadian programming, and if we are faced with redirecting those funds to the CMF, that necessarily has to come at a cost. And for us, that is the cost of our own investments in Canadian programming.

650 And we hope to convince you ‑‑ you will see us in a week again, Madam Chairwoman and Commissioners ‑‑ about the value of the investments that we are making in Canadian programming and the stories that we are telling and promoting to the world. And if those matter to the Commission, I think it is important that you understand that there are tradeoffs.

651 And we are not objecting absolutely to the concept of contribution, but rather that the initial contribution be determined now. When we have those funds invested, we are in development with a number of projects ‑‑ Paramount is today ‑‑ and we hope not to choose between those and making a contribution.

652 MR. CARDIN: And if I may add again to what my colleague Mr. Murphy said, it was interesting to hear the Canada Media Fund this morning talking about the new program authorities that it has unlocked, saying that it would be consulting broadly with the industry in 2024 and what I understand would be perhaps having new guidelines perhaps starting in April 2025.

653 The challenge ‑‑ you know, every player in the system has an important role to play. The CMF has an important role, for sure, but the CMF has also ‑‑ and I think the team even made reference to it this morning ‑‑ been straddled with a contribution agreement from the Department of Canadian Heritage that imposes very strict limitations on its program guidelines and how it has to allocate its program budget.

654 So, again we are in a hearing right now to talk about the Canadian broadcasting framework in which we have been integrated, and currently, and I heard, you know, Valerie Creighton mention that they were probably going to do away with the experimental stream versus the convergent stream, which is ‑‑ I can tell you something, it is ‑‑ you know, the CMF has wanted for a long time.

655 But the CMF is going to continue to invest in digital content. So, according to its last program budget allocation, it is 13 cents out of every dollar that is going to the production of videogames, AR/VR content, and other, you know, digital first content that is outside of the regulated broadcasting system. If you add the admin fees, which were over 15 cents, that’s going outside of the system.

656 The second limitation is that the CMF remains a 10 out of 10 fund, whereas, you know, criteria both at CAVCO and the CRTC allow productions and have 6 out of 10 points to qualify as Canadian.

657 Third, the CMF only supports four genres: drama, documentary, children’s programming, and variety and performing arts. Several of our streaming services here produce content in other genres ‑‑ in unscripted, for example, with quiz programs, competitions like the four seasons of Blown Away that we’ve been doing with Marble Media ‑‑ and are not things that qualify for CMF funding. So, you know, there are a number of limitations with that fund. It’s good news that apparently flexibility is coming, but that flexibility is coming in 2025.

658 THE CHAIRPERSON: Okay, thank you for that.

659 Maybe we can just quickly touch on applicability thresholds? So, you’ve said in your submissions that the minimum 10 million dollar registration threshold ‑‑ it should be higher than that. I think you’ve said that 50 million might be too high. Some have suggested 25 million. Can you talk a little bit more about the applicability threshold?

660 MS. NOSS: Sure, and I will ask Monique to weigh in in just a moment. But I think what is important is fundamentally, when I talked about the range of global streaming services, we also submit that there should be an applicability threshold with respect to thematic services. The Commission should look at exempting thematic services when you are satisfied that ‑‑ due to the nature, size, scale, and theme, or other unique attribute ‑‑ imposing obligations on services like Sony’s Crunchyroll or Sony’s SonyLIV, that is just Hindi and Urdu content, is not going to have a material impact on the Canadian broadcasting system.

661 The broadcasting policy in section 3 says very clearly that smaller niche services like those services or others serve the needs, preferences, and interests of Canadian audiences, and that is also reflected in the policy direction which directs the Commission to support flexibility and adaptability by minimizing the regulatory burden and respecting audience choice where possible, to increase the options available.

662 So, regardless of the monetary threshold ‑‑ I understand the Commission has already set a threshold for registration, and it’s understandable that the Commission wants a mechanism to gather information at a lower threshold, and obviously there are benefits to that ‑‑ but in terms of applying a contribution framework, regardless of the dollar figure, we submit that there should be an exemption for these thematic services.

663 MS. McALISTER: As Wendy indicated, and as Madam Chair acknowledged, we did not put a number on the record for the threshold, partly because we believe it is premature at this point to establish a threshold for an initial‑based contribution, or any contribution, until the entirety of the contribution framework is looked at on a holistic basis.

664 As we set out in our submissions, we believe it is premature at this point to have services such as these take positions that could potentially be prejudicial to their interests when there are so many things that are not yet decided, and we are at a very preliminary stage at this proceeding and these parties do not yet know the case that they have to meet when we are not aware of what a Canadian program will be, going forward; if there is an initial‑based contribution, which funds would be the recipient of the initial‑based contribution.

665 As we heard this morning from the CMF, many of those funds are still reviewing their rules. We don’t know what those rules are. We don’t know whether any of the services before you would have access to those funds, whether there would be equitable access. As the Commission has said, it was just an objective and is contained in the policy direction, as well as section 3 objectives of the Act. And fundamentally, we don’t know what the contribution levels will be for the legacy broadcasters.

666 And I think that has caused frustration, as you have seen from many of their submissions. They don’t know what they are facing, going forward. They are also seeking relief. So, understandably, they are taking positions that tend to weigh more favourably on putting the burden on foreign streaming services. So, you have seen some very low threshold numbers ‑‑ 10 million or even less than 10 million. And we believe that the Commission needs to take a very holistic view of everything and to make an informed decision with the full benefit of the record of not only these step one proceedings, but the step two proceedings as well.

667 THE CHAIRPERSON: Okay, thank you for that.

668 Maybe I can ask a couple of further questions on contributions and then funds, and then I will turn it over to my colleagues.

669 With respect to the current contributions that you enumerate in your submissions, and also you've talked about this today, you said they should be factored into the contribution framework. Can you talk a little bit about how those contributions directly contribute to meeting the objectives of the Act? Could you talk a little bit about sort of specific objectives, how those contributions support them?

670 MR. MURPHY: Certainly. So as I mentioned earlier, we ‑‑ we're in discussions in the development of Canadian programming, which means we're working directly with Canadian producers. Some of those are Indigenous and Black and other racialized community producers.

671 We are, as I mentioned, we have about a billion dollars in service production, which is supportive of Canadian workers. And you know, we also, as both a video‑on‑demand service, which is Paramount Plus, and Pluto TV ‑‑ which is a free ad‑supported television and the guide to it looks more like a traditional cable guide, but it's entirely free and available on your devices ‑‑ provides unique opportunities around promotion and discoverability of Canadian content, which is another goal we know of the Act. And you know, we're able to sort of collect and highlight Canadian programming by creating channels specifically for and about Canadians and Canadian stories. And you know, the sum total of these is, we think, quite impressive, particularly given for our services we're only here a year or two. And we're scaling those up.

672 Pluto has about a hundred channels on it today. Forty per cent of those are Canadian‑owned. We plan to announce more before the end of the year, and even more of those will be Canadian‑owned. You know, we're meeting the goals of the Act, we think, in a variety of ways.

673 And you know, the principle that instead we should start with a discussion around the company writing a cheque and taking, you know, its dollar, which we think is much more valuable in our hands when we invest it in Canadian programming, and sharing that with the CMF we think is a missed opportunity for the Commission and will cause you to miss some of your goals and not meet some of your goals. You know, frankly, we think that dollar is worth more than a dollar ‑‑ maybe it's worth 10; maybe it's worth a hundred ‑‑ in our hands.

674 It's certainly within your discretion and your authority to compel us to turn over that money to the CMF, but there's no guarantee that what comes out of that dollar from CMF will be something that we would choose to include on our service. And we won't have had, if we're not eligible to participate and receive the funds from the CMF, to have provided our unique expertise to that, and again, to take that programming to the world, which we think also serves the goals of the Act.

675 MR. CARDIN: If I may, I would add again to what my colleague Mr. Murphy said and completely agree with the ‑‑ how we are supporting Canadian production.

676 But I'd also like to point out how we are supporting Canadian creators directly. So at Netflix, we have over 20 partnerships with industry organizations where we've been advancing the careers of Canadian creators, mostly emerging and mid‑career producers, screenwriters, and directors with a focus on creators from ethnocultural and equity‑seeking backgrounds. And we've been doing this for a number of years and have had significant impacts with all of our partners, over 1,300 creators that we have supported.

677 We were the first private funder of the Indigenous Screen Office. We announced a partnership with the ISO as well as imagineNATIVE and Wapikoni in Quebec in June of 2019. And we've been a steadfast partner with the ISO, for example, with their two programs. Both Alethea Arnaquq‑Baril and Stacey Aglok MacDonald, the creators of the Arctic comedy series that I mentioned before, are graduates of that program. Ariane Louis‑Seize, who has had tremendous success recently with her feature film Vampire humaniste cherche suicidaire consentant is a graduate of both Quebec Cinema's La Forge program that we support as well as the Pitch Premières Œuvres du Festival du nouveau cinéma. You know, in that respect, you know, we're seeing very, very positive outcomes.

678 And one thing I'd like to emphasize, because you are considering whether to create new funds or whether only contributions through CIPFs should be recognized, is that our partners, our current partners tell us how much they value having the opportunity to work with us directly. They appreciate how quickly we make decisions. They appreciate how committed we are to their objectives. And with the small staffs that they have, they don't necessarily, you know, would not necessarily prefer having to apply to a third party fund to receive support versus continuing to work with us directly. Thank you.

679 MS. NOSS: If I may, so I think what you have just heard from here is really just the tip of the iceberg, because across our members, they not only work with so many union skills, institutes, academies, Canadian Film Centre, National Screen Institute across the geographies of Canada representing a variety of ethnocultural and equity‑seeking groups and Indigenous creatives and communities, but even again when you heard from Cameron this morning about the importance of the Toronto International Film Festival, it is absolutely true: our members already work with and partner with 20 different film festivals across Canada.

680 So when we talk about the limitations of only looking at an old regulatory structure that was very limited and focused, the world we live in now has a broad range of associations, organizations that are dedicated to training, promoting, marketing the next wave of Canadian creative partners, Canadian Film Centre among them. And the way in which these services can work directly with those partners that work in those communities is something that is a benefit that is unique to them. And it is really appreciated by the Canadians creatives who benefit from those partnerships.

681 MR. FARES: And if you don't mind, if I may add just a few other objectives, we're telling Canadian stories and displaying Canadian artistic creativity and talent. And if I could just give a few examples from the Walt Disney Company there first, Peter Pan and Wendy, one of our most recent feature films that was produced in Canada, has cast an Alberta‑born Indigenous actor starring as Tiger Lily. And she brought much of her Bigstone Cree First Nation heritage to the role, including her language in speaking Cree throughout the film.

682 Turning Red was created and directed by Domee Shi, an Asian Canadian award‑winning director.

683 So we're bringing the stories and the talent of Canadians not just to Canada but to the world. And exporting was another important objective in the Bill C‑11.

684 But I'll just give you three examples of Canadian stories that we've produced. Barkskins was produced by National Geographic in Quebec, and it tells a unique story about two families that move to Quebec to work in the timber and fur trade and it tracked them over 300 years. And we worked very closely with the Wendat Nation to ensure accurate depiction and history.

685 And also Turning Red, which is the story that was produced by Domee Shi, the award‑winning Canadian director. It's a love story about a young girl growing up in Toronto, and it's a beautiful story that reflects Toronto, reflects the diversity of Canadian culture.

686 And then third is Washington Black. It is a series that's based on a book by a Canadian author, first‑generation Canadian of Ghanaian descent. It's set in the 19th century. It recounts the voyage of a young protégé, George Washington Black, from slavery to freedom.

687 I mentioned those three examples because they are three stories that tell a unique Canadian perspective and authentic story but they don't count as Canadian content today under the Act because Walt Disney Company would own the IP.

688 THE CHAIRPERSON: Okay. Thank you very much for that and for the examples.

689 I just have two more questions, and then I will turn things over to my colleagues.

690 One of them is to build on something that Monsieur Cardin was talking about with respect to some of the initiatives from Netflix. Obviously, the French‑language market has its own needs with respect to audiovisual programming. Could you talk a little bit about how your members invest in French‑language content?

691 MS. NOSS: Thank you for the question. I will let Stéphane add, but at the outset, it's critically important, of course, that all of the new objectives of the Broadcasting Act that have been identified by the government as priority issues, as you implement this new modern and flexible framework that takes into account the diversity of services, will be considered.

692 Each of the streaming services offers a different content mix and a different business model. And I think that's important because each will have different ways in which they can best contribute to these new important objectives that have been identified as priorities, including official language minority communities, ethnocultural and equity‑seeking groups, and collaboration with Indigenous persons, creatives, and communities.

693 The Commission has already indicated its intention to prioritize those issues in the coming months ahead, and we are willing participants in those consultations and engagements as we move forward. But as Vice‑Chair Barin has suggested earlier this year, prioritizing public policy goals does not necessarily mean the same tools should always be used for the same outcomes sought. But it does suggest we discuss what we really want to achieve and then focus on how to achieve it. That is exactly what we'd like to do in the months ahead as you consider the overall contribution framework and how each service could best support these new objectives.

694 MR. CARDIN: So I'd add to that that I look forward to our content team being here with you on the 30th of November to tell you in great detail about everything that they're working on. But I will just provide a few more recent examples of our engagement in Quebec.

695 You may have read that last week we announced a first‑look deal with one of Montreal's leading production companies, Attraction Media, for the production of feature films. And we very much look forward to working with the team at Attraction.

696 We also are licensing more recent content, like the series À propos d'Antoine, produced by ComediHa! in Quebec City. And it has gone on to win several prizes, not just here in Canada, but internationally as well. And that will be airing on our service in the spring of 2024. So that's originally a TVA program.

697 And we also, you know, bring new opportunity for older programming. Great example I'd like to highlight is currently, if one of you go to your top 10 in Canada on your phone on Netflix, you'll see that one of the top 10 series in Canada is Fugueuse, which is again an independently produced series from Quebec that, you know, was first launched in 2018. And now we're giving it new life both here and, you know, to our members across Canada.

698 In addition to that, I mentioned but will repeat that within the 20 partner organizations that we support and the creators that they in turn support, you know, nine of those are in Quebec. And one of them also supports French‑language producers outside of Quebec, the Élan program, on which we partner with l'Alliance des producteurs francophones du Canada.

699 So we're committed to investing more in Quebec because we want to provide our members ‑‑ well, I should say in Quebec and the rest of Canada ‑‑ original French‑language stories because we want to grow our membership throughout Canada, including our francophone members.

700 MS. HELLER: Yes. To add to that for Paramount, certainly, we recognize that original French‑language programming is a very objective ‑‑ important objective under the Act.

701 Our services here in Canada, well, are relatively new, as you've heard. And they're also designed as English‑language services. That's what our audiences expect, especially with respect to Paramount Plus here in Canada. We also have Pluto Television, which also is primarily an English‑language service, although that is a great platform for showcasing a wide variety of different niche services that serve a wide variety of interests. So while we don't have any original French‑language programming on Pluto TV today, it's certainly something that could be a possibility in the future.

702 So I guess what I would say on behalf of Paramount with respect to this objective that it seems like a key one where there should be flexibility for us in determining how we would best comply with it and what would make the most sense as a way to contribute that aligns with the business that we have here in Canada and the benefits that we bring to the Canadian system.

703 THE CHAIRPERSON: Thank you for that.

704 So just for my last question, maybe I will build on that idea of flexibility. You have been very clear throughout your submissions that you are not in favour of an initial base contribution. Would you be more willing, I guess is the word, to provide for an initial base contribution if there was that flexibility and it was not necessarily to existing funds?

705 MS. NOSS: Thank you, Madam Chair. I would just say at the outset we are really focused on helping communicate what the benefits are of working with all of these streaming services directly and that those are unique to these streaming services that can offer different benefits to Canadian creatives and to the objectives under the Broadcasting Act. One of those key objectives, of course, is showcasing Canadian creative talent to the world and building on the export capabilities.

706 So I would say ‑‑ I'll open it up to the individual services, but you know, what we have tried to really help the Commission focus on is how each of these streaming services can best contribute and what are the opportunities they can bring. And quite frankly, the opportunities they can bring are working with the creative community directly, working with the creative partners they have directly, and doing so in a way that is serving the objectives of the Broadcasting Act.

707 MR. MURPHY: Madam Chair, I suppose if the initial contribution we were to make was Canadian programming expenditure, that aligns perfectly I think with what you've heard from us and with what Wendy has just said.

708 It doesn't solve the issue you've presented today around how to fund the media funds. But I think with respect to our companies, perhaps we're not best suited, perhaps we're not the right pile of money, frankly, to share with those funds. Because the expenditures that we make we just think are more valuable when made directly with Canadian producers.

709 And you know, we are engaged in that today. We will talk quite a lot about that on the 28th when we come to see you again. And so I don't think there's any question about the sincerity or the credibility of our engagement there. And it's happening now and today. It's not sort of off in the future. It's part of our business model today.

710 We want to continue to do that. We think that aligns with your goals. It certainly aligns with ours. And the principle of an initial contribution that is writing a cheque is a diversion of that.

711 You've suggested that maybe there are alternative ways that we can contribute on an initial basis. And I would say we're willing to discuss those with you and present to you some ways that we're already doing that, and perhaps the Commission can take account of those.

712 THE CHAIRPERSON: Thank you very much for your answers.

713 I will turn things over to Commissioner Levy.

714 COMMISSIONER LEVY: Good afternoon.

715 It's quite clear that your services are very much appreciated by Canadians. Canadians subscribe in great numbers. They appreciate the programming. They may not know from one time to the next whether what they're watching is primarily Canadian or not for various reasons, as you've outlined.

716 And I represent two provinces that are somewhat on different scales when it comes to working with you ‑‑ Saskatchewan on the one hand, and then Manitoba on the other, which of course has a burgeoning audiovisual industry in large part thanks to your work.

717 But I have to ask about the entire Canadian ecosystem. We have Canadian broadcasters who for years have been, you know, paying licence fees for Canadian programming and supporting Canadian creative for years, plus all of their other obligations in the system to provide news and information that's critical to our democracy and our cultural sovereignty.

718 And yet you're not prepared to make some base contributions to at least in some way create some equitability when it comes not so much to what you spend in the system but the obligations that you take on. Because the Canadian broadcasters have been carrying the freight for a long time. And they're looking and saying, We have all of these obligations because we are Canadian citizens. You know, this is not only an industry, but it's who we are.

719 So why shouldn't you make at least a base contribution to in an equitable way recognize what the totality of the system is and to create some equity in the system between you and the existing broadcasters? Thank you.

720 MS. NOSS: Thank you for the question, Commissioner.

721 If I can at the outset just make a comment on your, you know, you represent two provinces that have very different footprints in this industry. I think that is a really excellent example of how incentives lead to good results. Because you have Manitoba that has for many years used an incentives‑based approach to attract the film industry and the investment and all of the creative opportunity that has brought. And Saskatchewan has taken another path. And Manitoba has seen incredible success for a jurisdiction of its size in this sector.

722 So if I may, I do think that is an excellent illustration of how incentives lead to outcomes as opposed to obligations leading to outcomes.

723 COMMISSIONER LEVY: So just to pick up on that, so incentives, then, because as I have said earlier with others this morning, the policy direction asks us to use tools like incentives and outcomes. So what would you suggest in terms of incentives, then, to try to create the end goal, the outcome, which is equity in the system?

724 MS. NOSS: So I think equity in the ‑‑ I’m going to go back to Vice‑Chair Barin's comment, which is achieving the public policy goals doesn’t necessarily mean that each player does the same thing. And so when you were just framing your question about, you know, not making a base contribution, I would say all of these folks make contributions. They’re just not contributions to the CMF that are the same as cable companies do.

725 That’s the ‑‑ you know, it’s an important distinction and in ‑‑ there was a lot of attention paid in the legislative process to section 3(1) and (f.1) ‑‑ (f) and (f.1) which talked about a different use of creative and other human resources, establishing a standard for Canadian broadcasters to ensure they continue to use a maximum use and as opposed to foreign online undertakings which were greatest practicable use. But what is often missed in that legislative framing is the contribution in an equitable manner to strongly support the creation, production and presentation of Canadian programming.

726 That is the standard that all of the streaming services will be held to, but they simply ‑‑ if we’re looking at equity, they are not the same as Canadian broadcasters. Canadian broadcasters operate in a closed market. They get a whole host of regulatory and statutory benefits that these streaming services do not.

727 They are protected from competition. They are allowed simultaneous substitution, which was intended by the Commission as a policy tool many years ago to build up the system, and it did. They have a whole bunch of privileges and protections that these folks just don’t.

728 So again, when we talk about making equitable contributions, I don’t think you have any dispute with anyone on this panel here. They are eager to make equitable contributions. They already are contributing. And as we get to these next phases when the Commission will take the renewed approach to what’s a Canadian program, are you telling a Canadian story, does it have a Canadian setting, does it use Canadian creative talent, are 97 percent of the people working on it Canadians, we hope that all of those contributions will be taken into account.

729 All you’re hearing from us today is we don’t think a mandatory initial base contribution to a legacy fund is the best way for these folks to contribute, and they certainly will not address the broadcasters who have themselves suggested that those obligations they have do not allow them to contribute in the best way that they can.

730 THE CHAIRPERSON: Thank you very much.

731 Let's go over to Commissioner Naidoo.

732 COMMISSIONER NAIDOO: Hi there. Thank you.

733 How would you conceptualize equity between online and traditional players?

734 MS. NOSS: Commissioner Naidoo, thank you for the question.

735 As I was saying, I think the equitable contribution really is about how each player can best contribute, and so when we get to these overall contribution frameworks ‑‑ and I understand there’s some 60 objectives that you now have to implement in the Broadcasting Act, and that is certainly a challenge. But what you have here are folks who are contributing, who are ‑‑ whose equitable contribution will look different than regulated broadcasters.

736 They got the benefits of this regulatory bargain. In exchange for that, obligations were put on those broadcasters, and that is the bargain that was made 30, 40 years ago.

737 We are now in a new future with a whole host of different models even across the streaming services here today and, in addition, the ones who are going to appear before you over the next number of weeks, you’ll see a lot of different content offerings, a lot of different commissioning structures, a lot of different content mixes and they will all have different ways they can best contribute. They will contribute equitably, but equitably does not mean equal. And that is something that the Minister in the context of the legislative development made clear over and over again.

738 So we embrace equitable contributions as a principle, but that means that each player in the system will have different ways to equitably contribute. And again, for these folks here, it is the direct relationship with the creative community that can bring the most benefit.

739 THE CHAIRPERSON: Thank you very much.

740 Vice‑Chair Barin.

741 VICE‑CHAIRPERSON BARIN: Thank you very much.

742 So I have a general question and then I have some more, a couple of pointed, more technical questions.

743 So I want to really understand your positioning on the initial base contribution because this is Phase 1 of a process and then we’re going into Phase 2 where we’re looking at the kinds of things that I hear you talking about, which is more tailored custom type obligations.

744 So when sort of we look at why the Broadcasting Act is in place in the first place, it was because there was market failure in the cultural industries that we’re talking about. And so the objectives that we find in the Broadcasting Act in many cases address areas that are not ‑‑ you know, that don’t make economic sense. We’re talking about support for PNI, programming of national interest, Indigenous programming, local news, programming that is, you know, for accessibility issues.

745 So while I understand that your position is that we should not have a base contribution, how do you then propose to address these areas of programming where we see market failure?

746 And I hear you say that it’s going to happen organically and that you would rather that these contributions be self‑directed. And so please elaborate on how that will happen because certainly it hasn’t happened in the last 50 years.

747 MR. MURPHY: I can start. Thank you, Vice‑Chair.

748 I think the principle that there is a failure in the creation of Canadian programming is not something that we’re seeing. You know, our team has hosted hundreds ‑‑ 1,200 meetings with Canadian producers, many of them from under‑served communities, pitching ideas, eager to work with us and get the benefits of the global platform that we bring.

749 So I’m not sure that there is a breakdown in the production of Canadian programming. There may be a breakdown in the media fund approach to funding that programming, and I understand that the need that they all feel to make sure that they have a sustainable source of funding. I’m not sure that’s exactly aligned with the goals of the Act, though.

750 And we have so many foundational questions that need to be addressed in the second step and we’re certainly not objecting in totality to the principle of a base contribution. We’re hoping to have flexibility that if a base contribution is the most valuable way that we can contribute that we have the option to do that.

751 I think what’s on the table before us now is both the mandatory nature of it, the fact that it seems to be premised on urgency that we don’t see, at least with respect to the creation of programming. As I mentioned, we are in direct discussions and developing programming with a lot of those communities with which the Commission is most concerned, and that is not done for vanity. It’s not done to impress the Commission. It’s because it is central to our mission, it aligns with our business strategy. We’re deploying capital to that.

752 We want to continue to do that. We’re hearing from those communities that you’re eager to support that they want to work directly with us, and we want to do that. It’s faster. It’s more efficient. It results in better outcomes for both sides.

753 And so when faced with the question of, well, why don’t you redirect that into an initial base contribution, you know, that really involves trade‑offs that we don’t think the Commission really wants to make, we don’t think that those communities really want to make.

754 And we hope we don’t appear insensitive to the need you’re trying to fill. I think what we’re saying is we have a better way to help you and we hope you can trust us in that because it isn’t just a series of promises about what we may do. It’s what we’re doing now, it’s what we have been doing and we can go into detail even more than we have in our initial submission to convince you that we’re sincere in this and we can help.

755 MS. HELLER: Thank you for the question. I also just maybe wanted to say what my colleague Keith said in a slightly different way, which is, you know, you asked about these genres of programming that don’t necessarily make economic sense.

756 And what we hear from our executives is a lot of enthusiasm about flipping that on its head and taking genres of content, including some of the ones that you mentioned, and making them make economic sense. And that’s what we really bring to the table, I think, is our ability to do that.

757 So if you give us criteria for what kinds of content that means as we go through this process, we believe that we can bring that to the table and that if we can do that, if we can take these, you know, genres and criteria for Canadian programming that are important to serve the goals of the Act, that the system will be certainly served overall better if we can do that, if we can bring that economic piece to it.

758 MR. FARES: If I may just add, while I’m here in Canada today, I live in the United Kingdom and I actually cover Europe, Middle East and Africa, so I have an experience ‑‑ I have experience around the implementation of the audio‑visual media services directive, which is often referenced in the context of the discussions around financial contributions.

759 I think it’s really important ‑‑ I’d like to offer my experience to you. I’ve worked with almost all of the member states that have implemented financial contributions ‑‑ less than half of them have in the first instance ‑‑ but in no case did a member state of the European Union implement any sort of interim contribution. We worked with those governments to identify what the ultimate objectives that they were trying to accomplish by imposing a financial contribution, and then ‑‑ we didn’t always agree on all of those objectives ‑‑ but I would say they waited until they had defined all those objectives, and then they imposed an obligation in a system that was designed to meet the ultimate objectives that they defined for themselves

760 MS. NOSS: If I may, Vice‑Chair.

761 I want to just ‑‑ there were two things you said that I just want to pick up on.

762 You said, well, you know, there are important objectives that relate to specific either accessibility or indigenous persons, or all of these other priority objectives that have been set for you. We are not saying “trust us”; what we are saying is, we want to work with you as you make these determinations in the next stage of the proceedings, about how each service can best contribute to those.

763 But that is not the stage we are at now. We are at a very different point in time. The Commission has not had the opportunity to hear from, to consider all of the market information, analysis, and perspectives. When we are looking at an overall contribution framework, the definition of indigenous programs has not been determined; the definition of Canadian programs has not been determined. So what we are saying is not necessarily “trust us”, but we want to work with you. We want to work with you to achieve the outcomes that you've expressed for this new flexible framework that will allow us to meet each of those objectives.

764 It may be that different services do partner with different funds as a way to achieve some of the very specific objectives you identify ultimately in terms of the overall contribution framework because that is one of many, many ways in which they can meet it. But it may also be more than just production funds. It may be partnering with film festivals, or training institutes, or academies, or our union and guild partners, or a range of other ways that support and nurture Canadian creative talent and support your Broadcasting Act objectives.

765 So I would say to your notion about a range of different objectives and how those can be met, that will be part of what you will determine in the overall contribution discussions. And it may well be that a wide variety of those funds, institutions, or organizations will help these streaming services achieve them in different ways.

766 VICE‑CHAIRPERSON BARIN: Thank you. I appreciate the breadth of the response.

767 So, speaking of funds, I have a technical question on a couple of funds that are not necessarily programming funds.

768 So, at paragraph 34 of your intervention, you mentioned that you do support a list of eligible funds, including new and existing funds, that would support public interest groups and accessibility. And you cite specifically the Broadcasting Accessibility Fund and the Broadcasting Participation Fund.

769 Would you then, from what I'm hearing, be open to allocate a portion of an initial base contribution to these funds?

770 MS. McALISTER: I won't repeat our original position because I'm sure you are well aware that we don't think an initial base contribution is necessary. But if the commission were to impose an initial base contribution, you know, our position, as we set out in the paragraph that you were referring to and the ones surrounding it is that we think it should be flexible in terms of the types of funds that should be able to be recipients of those contributions, and not just one or two legacy funds.

771 I think the Commission has heard from many other parties that there's a real need in the system for funding. There are various equity‑seeking groups that are well‑deserving, including the Broadcasting Participation Fund, the Broadcasting Accessibility Fund.

772 So, you know, we would implore the commission that, if you do adopt an initial base contribution, you make it open and flexible so that funds, such as the ones you have named, can also be eligible recipients for contributions.

773 VICE‑CHAIRPERSON BARIN: Thank you.

774 My last question relates to a bit of what you mentioned on legislation in other jurisdictions. You indicated in your reply that the Commission should reject a proposal to adopt contribution levels similar to those that have been adopted in France. You also indicate that Spain, which has adopted a flexible 5% investment obligation, has achieved excellent comparative results.

775 So, maybe you can comment on what the impact would be of imposing similar contribution levels in Canada?

776 MR. FARES: So, if I may start, let me give a little more background, if I could, at the beginning on the AVMS directive.

777 First of all, the AVMS directive in Europe allows, but does not require, member states to implement the financial contribution. Of the 27 member states, only 12 of them have implemented any sort ‑‑ any form of financial contribution regime. And of those 12, only 5 have mandated some sort of contribution to a fund. When they have mandated some sort of contribution to a fund, France, which is generally an outlier in the percentages that they apply, is at 5.15%. Portugal is at the lowest level of 1%. And when you look at the average of those five countries that require participation by a mandate contribution to a fund, it's less than 2.5%.

778 So in a comparative analysis, even in Europe, the rates are in the low single digits for the most part, and the average again is less than 2.5%. And again, there was no member state that actually required an initial base contribution. They developed the entirety of their framework based on the principles and outcomes that they were seeking to achieve.

779 Oh, and you also asked about effects. I think there ‑‑ we warned to some member states in Europe about some unintended consequences. We're often seeing production inflation rising rapidly. We are seeing the skilled workforce stretched to an extreme. And if you apply artificially high obligations, that simply exacerbates the challenges that are already present in the marketplace.

780 There have been two recent studies that have looked at this, one by the International Center of Law and Economics, which they outlined at some point there's a diminishing return whereby your efforts to support the creation of local content is overtaken by the inflationary impact that it imposes on the system.

781 There was also a Swedish study by IFAST that talked about the challenges that artificially high investment obligations or contributions can impose.

782 I'll give you one example in Italy. Italy has a high investment obligation regime. What we have found is the Italian broadcasters have now begun lobbying to seek relief for the international streamers because of the inflationary impact it is having on them as broadcasters when they're having to produce local Italian content, because they produce a lot more of it, because, as we said, they're focused on delivering their service to Italian consumers when we provide our service globally around the world.

783 So this inflationary impact is actually materializing in Italy. The Italian regulator actually issued an opinion to the government raising this issue and raising this concern and called on the government to revisit the very high investment obligation that's been imposed. And there's actually a conversation that industry writ large is having with the government right now to revisit the investment obligation.

784 Then finally, you mentioned Spain. Spain has an investment obligation of 5%, unlike France, which has a 20 to 25%. But Spain has also implemented a very robust incentive regime. They've created this system called The AV Hub, where they've invested in skills, they've invested in infrastructure, they've enhanced their incentive regime, and that's why you're seeing massive growth in Spain vis‑à‑vis Italy and France, which have much higher obligations.

785 So, an incentive regime is actually organically driven investment into that market compared to these other markets that have artificially high obligations which aren’t seeing nearly as much growth.

786 MR. MURPHY: Vice‑chair, if I may, just one small comment on the issue of inflation.

787 I think, to bring it back to the central question of whether to contribute to a fund, if those contributions cause that inflation, then our one dollar of investment in production is worth less. It could be worth 50 cents rather than a dollar, which means we buy less good Canadian production. Which means you may be coming back to us to say, “Well, gee, we need even more money into that fund,” and you end up in sort of an unvirtuous cycle.

788 MR. FARES: I was remiss in highlighting one other point, and that is, when there is a mandate to contribute to a fund, the law requires that it be non‑discriminatory access to those funds.

789 So, if we contribute, we have to be able to access that fund.

790 VICE‑CHAIRPERSON BARIN: I appreciate the very fulsome response. Thank you.

791 THE CHAIRPERSON: Thank you very much.

792 We'll go to Vice‑chair Scott for the last question, and then we'll turn things back over to you for the final word.

793 VICE‑CHAIRPERSON SCOTT: Thank you.

794 So, when you go last, there's always a significant risk that your question will be redundant. But I'm going to try to pull together some key themes that capture much of what you’ve spoken about with my colleagues.

795 So you referenced the complexity of the objective set which we're tasked with achieving. You spoke with sincerity and credibility about the efforts that you make in the contributions that you make in various forms, and you reiterated that, in your view, equity features the principle that parties contribute according to their strength so that they can maximize the impact of the dollars that they spend.

796 The angle I'd like to add: what's the role for a coordination and planning function? So, all well‑intentioned parties, left to their own devices, contributing, even if it's large amounts, towards those objectives, how do we ensure that the full breadth of the objectives are met and that we don't have redundancy, duplication, or overlap in some areas, while others remain neglected?

797 And a bit of an add‑on to that: isn't there a role for a constellation of funds to ensure that money comes in, gets distributed broadly so we've got broad coverage, and then, beyond that, whatever bespoke solutions continue to apply, whether that's as a result of economic drivers or altruistic intentions?

798 Thank you.

799 MS. NOSS: So, thank you also for the excellent summary; I really appreciate it.

800 So let’s talk about the outcomes‑based question you had at the front end. I think that's what the Commission has itself set to have happen in the months ahead, which is, you're going to have an approach that you set out to determine what's the best way for each of the players to contribute, and you're going to have these flexible requirements that will be tailored to each service. I see that in the step two, or step three, or phases that we have ahead. So, we're eager to have that conversation, we're eager to be part of that solution, but that's not where we're at now. So, I hope you didn't hear there any ‑‑ hear here anything other than complete enthusiasm to working with you, to have those outcomes measured, to have those outcomes evaluated, and how each service can best contribute.

801 And again, I want to just underlie that, because it's important. There are different content strategies, there are different ways the streaming services operate, and all of those things, we think, bring different abilities to benefit the system based on those differences.

802 And that leads to the second part of your question, which is a broad array of funds. You'll see reflected in our submission, we indicate there should be a broad array of associations, organizations, funding agencies that these folks will all want to partner with. We embrace that. But a production fund, and the legacy production fund that you are working with today, is quite different than that. So you're working with a legacy production fund that was, again, has served a very important purpose and works with the various players in the system, but it is not something that is designed to bring the most benefit to Canadians.

803 But these folks do work in creatively. If you ask creative Canadians what they want to do, they want to have a first look deal with Netflix or Paramount. They want to work to commission content with Disney. They want to work on “The Last of Us” in Alberta, where they can be nominated ‑‑ we have eight Canadians nominated for Emmy awards. And so, that is the kind of content, when you're collaborating with global studios, that they are offering that kind of opportunity to Canadian creatives.

804 We often hear one of the challenges is ensuring that Canadians who achieve success will stay in Canada, and that's what having these folks contribute can do. You have opportunity for people to be working on world‑class productions here in Canada that speak to audiences in Canada and around the world.

805 So I do think there's space for not only a constellation of funds, but a constellation of all the kinds of partnerships that Stéphane mentioned, that I know Paramount has that, Disney has in its Training Academy with Industrial Light & Magic and others. So all of these things are part of the conversation we hope to have with you in the months ahead.

806 But where we are now is about legacy production funds that are built for an entirely different purpose, and, as we heard this morning, are not even set up to initiate the changes they want until 2024, 2025, or 2026.

807 I think it's important, the point that Mr. Fares raised, in terms of equitable access to those funds and how those funds work, because they are not set up to make content globally with the restrictions they have. They are not set up to allow access for anything other than a Canadian broadcast trigger and Canadian control. So again, it's very limited in terms of what it can do for Canadian creatives versus the opportunity that working with global creators brings.

808 THE CHAIRPERSON: Okay, thank you very much for that. So I will turn things back over to you for the final word, if you wanted to add anything or sum up.

809 MS. NOSS: I'll say I’ll be brief; how’s that?

‑‑‑ Laughter

810 MS. NOSS: Thank you for the opportunity, Madam Chair. Foreign online undertakings are providing new, unparalleled opportunities to Canadian creatives, the entirety of the Canadian creative ecosystem, and importantly, the objectives under the Broadcasting Act. We couldn't have put it better than you, Madam Chair: A new, modernized framework that recognizes the new perspectives and opportunities that online undertakings will bring, and ensures flexibility and adaptability.

811 Because of that objective outcomes‑based approach that embraces new opportunities, the Commission should reject the calls for you to put square pegs into round holes. We look forward to working with you in the months ahead to use our strengths to continue to contribute to cultural public policy goals, now and in the future.

812 Thank you very much for this opportunity.

813 THE CHAIRPERSON: Thank you very much. Thank you to all of you. I know we’ll be seeing some of you again over the next few weeks. So thank you for being here.

814 Merci beaucoup à tout le monde qui a participé aujourd'hui. On a vraiment hâte de continuer la discussion demain. Je vais passer la parole à notre secrétaire d'audience, merci.

815 THE SECRETARY: Merci. The hearing is adjourned until tomorrow, and we'll start at 9 a.m. tomorrow morning. Have a nice evening.

‑‑‑ Whereupon the hearing adjourned at 3:06 p.m., to resume on Tuesday, November 21, 2023 at 9:00 a.m.

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