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TRANSCRIPT OF PROCEEDINGS FOR THE CANADIAN RADIO-TELEVISION AND TELECOMMUNICATIONS COMMISSION TRANSCRIPTION DES AUDIENCES DU CONSEIL DE LA RADIODIFFUSION ET DES TÉLÉCOMMUNICATIONS CANADIENNES SUBJECT / SUJET: CANADIAN TELEVISION POLICY REVIEW / EXAMEN DES POLITIQUES DU CONSEIL RELATIVES À LA TÉLÉVISION CANADIENNE HELD AT: TENUE À: Conference Centre Centre des conférences Outaouais Room Salle Outaouais Place du Portage Place du Portage Phase IV Phase IV Hull, Quebec Hull (Québec) September 26, 1998 26 septembre 1998 Volume 4 StenoTran Transcripts In order to meet the requirements of the Official Languages Act, transcripts of proceedings before the Commission will be bilingual as to their covers, the listing of the CRTC members and staff attending the public hearings, and the Table of Contents. However, the aforementioned publication is the recorded verbatim transcript and, as such, is taped and transcribed in either of the official languages, depending on the language spoken by the participant at the public hearing. Transcription Afin de rencontrer les exigences de la Loi sur les langues officielles, les procès-verbaux pour le Conseil seront bilingues en ce qui a trait à la page couverture, la liste des membres et du personnel du CRTC participant à l'audience publique ainsi que la table des matières. Toutefois, la publication susmentionnée est un compte rendu textuel des délibérations et, en tant que tel, est enregistrée et transcrite dans l'une ou l'autre des deux langues officielles, compte tenu de la langue utilisée par le participant à l'audience publique. StenoTran Canadian Radio-television and Telecommunications Commission Conseil de la radiodiffusion et des télécommunications canadiennes Transcript / Transcription Public Hearing / Audience publique Canadian Television Policy Review / Examen des politiques du Conseil relatives à la télévision canadienne BEFORE / DEVANT: Andrée Wylie Chairperson / Présidente Vice-Chairperson, Radio- television / Vice- présidente, Radiodiffusion Joan Pennefather Commissioner / Conseillère Andrew Cardozo Commissioner / Conseiller Martha Wilson Commissioner / Conseillère David McKendry Commissioner / Conseiller ALSO PRESENT / AUSSI PRÉSENTS: Jean-Pierre Blais Commission Counsel / Avocat du Conseil Margot Patterson Articling Student / Stagiaire Carole Bénard / Secretaries/Secrétaires Diane Santerre Nick Ketchum Hearing Manager / Gérant de l'audience HELD AT: TENUE À: Conference Centre Centre des conférences Outaouais Room Salle Outaouais Place du Portage Place du Portage Phase IV Phase IV Hull, Quebec Hull (Québec) September 26, 1998 26 septembre 1998 Volume 4 StenoTran TABLE OF CONTENTS / TABLE DES MATIÈRES PAGE Presentation by / Présentation par: CDTV, Canadian Digital TV 967 CIFVF, Canadian Independent Film and Video Fund / FCFVI, Fonds canadien du film et de la vidéo indépendants 1022 Manitoba Film & Sound 1067 Alberta Motion Picture Industries Association 1093 Vision TV 1112 Canadian Independent Film Caucus 1161 Independent Film & Video Alliance / Alliance de la vidéo et du cinéma indépendants 1203 StenoTran ERRATA Volume 3 September 25, 1998 / Le 25 septembre 1998 Page Line / Ligne 946 3 "COMMISSIONER McKENDRY: Unless" should read / devrait se lire "MR. LUND: Unless" StenoTran 967 1 Hull, Quebec/Hull (Québec) 2 --- Upon resuming on Saturday, September 26, 1998 3 at 0901/L'audience débute le vendredi 4 26 septembre 1998 à 0901 5 4315 THE CHAIRPERSON: Good morning. 6 4316 Madam Secretary, would you please 7 call the next participant? 8 4317 MS BÉNARD: Thank you, Madam Chair. 9 The next presentation will be by Canadian Digital TV, 10 Mr. Michael McEwen. 11 4318 THE CHAIRPERSON: Good morning, Mr. 12 McEwen, and thank you for coming back this morning at 13 such an early time for Saturday. 14 4319 MR. McEWEN: My pleasure. I hope you 15 all had a good rest. 16 4320 THE CHAIRPERSON: Yes, of course. 17 Proceed when you are ready. 18 PRESENTATION / PRÉSENTATION 19 4321 MR. McEWEN: Thank you, Madam Chair 20 and Commissioners. Canadian Digital Television, CDTV, 21 appreciates the opportunity of appearing today and 22 elaborating on our written submission. Just for the 23 record, I think I know you all, but my name is Michael 24 McEwen. 25 4322 Over the past couple of years the StenoTran 968 1 television industry has worked hard to lay out the 2 framework for a transition plan from analog to digital 3 TV. The results were a comprehensive set of 4 recommendations from the Minister's Task Force on the 5 Implementation of Digital Television and the setting up 6 of an industry "not for profit" company to guide the 7 transition. We have made a good beginning. It is now 8 time for government to play its role and you, the CRTC, 9 to play yours. 10 4323 Perhaps this morning I could begin by 11 bringing you up to date on the recent establishment of 12 CDTV. The Board authorized a start-up period of three 13 months, June through August of this year, to prepare a 14 business plan and detailed work activity for the coming 15 year. We formed four working groups: technical, 16 communications policy and regulation, economic and 17 marketing, and production and training. 18 4324 Each group met and began to define 19 the work ahead. Numerous subcommittees were formed and 20 by early September a detailed business plan was 21 prepared and tabled for Board consideration on 22 September the 8th. The Board met and considered the 23 plan, required budget, mission statement and governance 24 issues, the result an approved plan and budget for the 25 fiscal period, September through August of next year, StenoTran 969 1 an ambitious plan that includes a test transmitter, 2 launching a newsletter, web page, economic modelling, 3 market research and consumer education. 4 4325 Our Board includes three members each 5 from broadcasters and cable, and one each from pay and 6 specialty, manufacturers, and satellite. Our Chair is 7 Jim Sward, President and CEO of the Global Television 8 Network, who is here with us today, and just as an 9 aside, it is in part his vision and leadership, along 10 with our Treasurer Richard Stursberg, President and CEO 11 of the Canadian Cable Television Association, that this 12 group has come together. 13 4326 An important point to consider is 14 that all members of the Board confirmed that all 15 parties in CDTV are committed to a coordinated roll-out 16 of digital television and will work together to that 17 end. Given the difficult nature of a transition that 18 digital TV presents, this is a significant industry 19 achievement. We now need to be joined by our 20 government and CRTC partners. Our current membership 21 is at 24 and expanding. We have set up offices here in 22 Ottawa and, as I speak, our work begins. 23 4327 Ten days ago in New York City William 24 Kennard, Chairman of the FCC, spoke to a meeting of the 25 International Radio and Television Society. He said, StenoTran 970 1 and I quote: 2 "When it comes to digital TV, 3 some may have doubts, but there 4 should be no doubt about this: 5 Digital is the future of TV... 6 Develop your business plans. 7 Make your investments. And be 8 confident, as I am, that what 9 lies ahead is a bright future." 10 4328 These remarks were made in the 11 context of 28 stations signing on digital services in 12 the top ten American markets in November. Seventeen 13 stations in other markets will sign on at the same 14 time. By the way, Detroit and Seattle border stations 15 are signing on in November. The rest of the top ten 16 will be on the air by May of next year and by the end 17 of 1999 the top 20 markets will be on the air. Well 18 over 50 per cent of the American population will be 19 able to receive digital terrestrial signals within 15 20 months. 21 4329 All U.S. broadcasters should be on 22 the air by 2003 and shut down of analog is projected 23 for 2006, an ambitious transition strategy to be sure 24 and one that may be subject to change, but they have a 25 plan. The United States have committed their future to StenoTran 971 1 digital services: wide-screen television pictures, HDTV 2 and eventual multi-media applications. 3 4330 For the Canadian industry the impact 4 is equally clear: Make the transition in a timely 5 manner or face irrelevance in the wake of American 6 competition. That transition will be challenging for 7 broadcasters, cable operators, satellite services, pay 8 and specialty providers and program producers. We 9 don't know all the costs yet. That will be our job 10 over the coming months, to define with more precision 11 and create the economic models that work best for the 12 industry. 13 4331 But what we do know is a bit 14 daunting. For over-the-air broadcasters the cost of 15 building a DTV transmission system is about $500 16 million. Depending on how many HDTV channels they 17 carry, the cost to cable could be between $800 million 18 to $1 billion and a half. These costs don't reflect a 19 myriad of other issues, like equipment upgrades for 20 wide-screen and eventual full HDTV studio and master 21 control upgrades, and the list goes on. Some of this 22 can be handled with normal replacement procedures, but 23 a great deal will be incremental to currently planned 24 expenditures. 25 4332 These are investments that must be StenoTran 972 1 made just to keep the Canadian broadcasting system 2 competitive and, some would argue, just to keep it. 3 Yet there is no return on investment beyond staying in 4 business in the short to mid term. Down the road 5 service enhancements may provide the kind of value 6 added services that viewers will want to buy, but those 7 service ideas are still in their infancy today. 8 4333 It has been suggested that if 9 Canadians aren't exposed to wide-screen digital TV, 10 they won't miss what they don't see. I'm afraid that 11 just isn't realistic. Digital video discs are taking 12 the market by storm and they will be capable of feeding 13 new HDTV wide-screen receivers directly. DVDs will 14 provide consumer incentive to purchase HDTV displays. 15 4334 Publicity associated with a U.S. DTV 16 launch will certainly stimulate public interest in 17 Canada. Canadian viewers will expect domestic TV 18 services to be able to provide services comparable to 19 U.S. broadcasts. Historically, Canadians have opted 20 for media services from the U.S. if they are not 21 available in Canada. 22 4335 It has also been suggested that the 23 costs of sets will be outrageously high. Yes, they 24 will be expensive, but if you allow for inflation, the 25 cost of the first colour sets were close to $7,000 and StenoTran 973 1 those prices tumbled as most consumer electronic 2 products do after their initial market launch. Already 3 we are seeing major reductions in the market price and 4 in many cases the TV sets aren't even on the store 5 shelves yet. 6 4336 The challenges facing program 7 production are equally complex. Initially, wide-screen 8 HDTV will be more expensive to produce. Some estimates 9 are in the 20 to 25 per cent range. Some producers I 10 have talked to say, "No problem, it's just the cost of 11 doing business and when the time is right, we will do 12 it." Fair enough, but where does the money come from? 13 4337 There are only a finite number of 14 sources, the production fund, licence fees and program 15 sales, probably export. These sources are already 16 being pushed to the limit and you have to wonder what 17 the impact will be to the quantity and quality of 18 Canadian programming, and this at the very moment when 19 we are going to need a lot of wide-screen digital 20 product to ensure that Canadian viewers have 21 competitive Canadian programming alternatives. 22 4338 The U.S. has no shortage of HDTV 23 products since most of their prime time programs are 24 produced in easily convertible 35 millimetre film. 25 Unfortunately, Canadian program libraries are not in StenoTran 974 1 the same shape. This means the Americans will have an 2 inexhaustible source of wide-screen programming that 3 can be recycled and made available to the global 4 marketplace. 5 4339 The challenge for our industry is to 6 create wide-screen digital product first for Canadian 7 viewers and then seize the opportunities in the global 8 marketplace. The world will rapidly move to wide- 9 screen digital TV. Europe, Australia, Japan, Korea, 10 Taiwan have already announced firm plans for a digital 11 transition. There will be a shortage of product to 12 begin with and it's that shortage which may provide our 13 producers with a real opportunity. To exploit the 14 circumstances, they should now be planning for wide- 15 screen digital production. Otherwise, the market will 16 be even more dominated than it is now by American 17 program sources. 18 4340 We need to think through how we 19 exploit the technology to the benefit of the viewer and 20 the marketplace. There are real synergies building 21 between broadcasters, distributors, software suppliers 22 and producers to create multimedia digital platforms 23 that are much more than just a picture. In the long 24 term this is where the real benefit of moving to 25 digital lies. It is not merely a transition, it is a StenoTran 975 1 revolution. 2 4341 And we are at the very beginning of 3 change, but change in the "bit and byte" digital world 4 tends to accelerate almost uncontrollably. Given 5 events in both the U.S. and Europe, it is time we get 6 Canada's strategy in place, understand our direction 7 and begin dealing with our issues. 8 4342 We are already 18 months to two years 9 behind the U.S. Our plan contemplated this time lag, 10 but it will be dangerous to fall much farther behind. 11 Just as we lost viewers to American signals when they 12 moved to colour, we will lose viewers to their digital 13 programming if we are not offering our own. It is both 14 an economic and cultural threat to the Canadian 15 broadcasting system which must be met with action. 16 0915 17 4343 We now need a transition plan, and 18 you have a role in creating the regulatory framework 19 that provides the benchmarks for that plan. Once a 20 transition plan is in place, industry has the base from 21 which it can make business plans and begin the 22 transition. Then, together, we can monitor and adjust 23 that transition plan as appropriate. 24 4344 As I noted in my written 25 intervention: StenoTran 976 1 "A successful transition to a 2 digital world and wide screen 3 TV, improved picture quality and 4 the opportunity for multimedia 5 services will ensure the health 6 of the Canadian Broadcast System 7 and into the 21st century. A 8 healthy and competitive system 9 will respond to Canadians who to 10 see themselves, their 11 communities and culture on TV." 12 4345 Thank you for your attention. Of 13 course, I would be pleased to answer any questions. 14 4346 THE CHAIRPERSON: Thank you, Mr. 15 McEwen. 16 4347 Commissioner McKendry? 17 4348 COMMISSIONER McKENDRY: Thank you, 18 Madam Chair. 19 4349 Good morning, Mr. McEwen. 20 4350 MR. McEWEN: Good morning. 21 4351 COMMISSIONER McKENDRY: You say in 22 your oral comments to us that we are already 18 months 23 to two years behind the U.S. Does that mean, given 24 that digital TV signals will be commercially available 25 in the U.S. in November, that there will be two years StenoTran 977 1 of American digital signals spilling into Canada before 2 I as a consumer can receive Canadian digital signals? 3 4352 MR. McEWEN: That is the assumption I 4 am making, and let me explain why. 5 4353 In December of 1996 the Americans 6 adopted the A53 standard, the transmission standard, 7 and four months later, or three months later -- I think 8 it was the 1st of April, 1997 -- the FCC made its rule- 9 making decisions and laid out the framework for 10 transition. 11 4354 So if you take those dates from the 12 time that that plan was actually issued and out, 18 13 months later they are on the air and beginning their 14 transition. We have yet to build a test transmitter 15 and test some of our allotments and various issues. 16 4355 We are assuming that if we get a plan 17 in place that all the parties have agreed to, it will 18 be an 18-month to two-year time lag. If we start 19 today, we can roll it out that way. 20 4356 COMMISSIONER McKENDRY: And do you 21 think we will start today? 22 4357 MR. McEWEN: I certainly hope so. 23 4358 COMMISSIONER McKENDRY: I know you 24 hope so. But realistically, is that your assessment of 25 the situation; that we are on top of this? StenoTran 978 1 4359 MR. McEWEN: I am concerned that we 2 have not had the kind of response to the Task Force 3 Report -- the industry is concerned. What we want is 4 some recognition of direction here. Are we moving to 5 the digital world or not? We think we are. 6 4360 Industry Canada has published a 7 transmission standard. There is an allotment plan out 8 there. 9 4361 What we need is confirmation that we 10 are actually going to move from analog to digital and 11 that there is a framework by which the industry can 12 start to make some plans. 13 4362 We are going ahead through CDTV and 14 starting to solve some of the issues right now. For 15 example, there is now a proposal for a test 16 transmitter. It has been approved by the board, and we 17 are going to go around and see whether we can raise the 18 resources for that from the various sector parties, 19 including government. We hope to have that on the air 20 within six to seven months. 21 4363 We can take that initiative, but 22 initiative is kind of in a vacuum without the policy 23 framework and regulatory framework in place. 24 4364 COMMISSIONER McKENDRY: In the United 25 States the FCC has in fact, as you pointed out to us, StenoTran 979 1 said we are going to digital, end of story. 2 4365 Are you looking to the CRTC to make a 3 similar statement? 4 4366 MR. McEWEN: What I am looking for 5 from the CRTC -- because the nuts and bolts of a 6 transition plan are there. I assume since the FCC is 7 both a government and regulator -- it is more than just 8 a regulator; it has some policy application with 9 Congress as well. 10 4367 I think government has to indicate 11 the policy framework of removing, and I think it is up 12 to you folks to work with us to build the framework for 13 that move. 14 4368 COMMISSIONER McKENDRY: So the first 15 step is an indication from the government that we are 16 going to digital, if in fact the government wants to 17 take that initiative. 18 4369 MR. McEWEN: Yes. 19 4370 COMMISSIONER McKENDRY: And then you 20 see the Commission's role, following on that statement 21 from the government, to be what? 22 4371 MR. McEWEN: Well, to sit down and 23 map out all the elements of a transition plan. 24 4372 For example, there are a number of 25 recommendations in the Task Force Report. Every over- StenoTran 980 1 the-air broadcaster who holds a licence now, the 2 recommendation was, should be granted a digital licence 3 for a period of time during the simulcast transition. 4 That needs to be confirmed -- the process for going at 5 it. 6 4373 You have had some experience in this 7 before with digital radio. The CRTC also sat as 8 observers on the task force, so probably has a great 9 deal of knowledge on these issues. 10 4374 There are timetable issues. There 11 are monitoring issues. There are experimentation 12 issues. Outside of simulcast, how many hours of 13 experimental television could happen? What is the 14 transition timeframe in Canada, and how do we monitor 15 that to ensure that the industry and Canadians are 16 making the transition in the most economic and timely 17 manner? 18 4375 COMMISSIONER McKENDRY: Rather than 19 waiting for the government to give the green light and 20 the Commission to set up a framework for the nuts and 21 bolts, what prevents a broadcaster today from saying to 22 his or her shareholders: "Digital has arrived. We 23 have to go digital now." 24 4376 What is to prevent the broadcaster 25 from taking that step? StenoTran 981 1 4377 MR. McEWEN: In theory, nothing. 2 This is a huge, huge undertaking. And the investments, 3 as I tried to indicate to you, are in the billions of 4 dollars without ROI. We have had a history in this 5 country of coordinating these kinds of changes. 6 4378 Frankly, in the absence of government 7 policy and the proper transition framework that creates 8 a transition plan, everybody is left out there swinging 9 in the breeze. 10 4379 Even in the United States, in theory 11 the freest market in the world, they at least have a 12 framework; they have a plan. 13 4380 Right now we have a suggested plan on 14 the table, and the benchmarks are pretty good, I think. 15 The industry feels fairly comfortable about it as a 16 base. I think that the industry deserves the 17 assurance, if they are going to make the investment, 18 that this is in fact Canada's intent. 19 4381 COMMISSIONER McKENDRY: We earlier in 20 the hearing had a panel of program producers appear 21 before us, large and small ones, from across the 22 country. I discussed with them their views on the 23 evolution to digital. 24 4382 One of them, a Ms Schuyler, said -- 25 and I will quote from the transcript: StenoTran 982 1 "I now have, own, or the bank 2 owns, a hundred thousand square 3 feet of digital square feet in 4 Toronto. It's a huge operation 5 there." 6 4383 The point she was making is that they 7 are not waiting around; they are going ahead. She has 8 done it, presumably without the government giving the 9 thumbs up or the Commission initiating any proceedings 10 in this area. 11 4384 That is what led me to my question: 12 Why can't a broadcaster start the ball rolling? 13 4385 MR. McEWEN: Well, if a broadcaster 14 came to you for a licence right now, it would be an 15 experimental licence. It would not be a real licence; 16 it would be an experimental licence. 17 4386 COMMISSIONER McKENDRY: Yes. 18 4387 MR. McEWEN: So you are going to give 19 out what -- 100 experimental licences? 20 4388 COMMISSIONER McKENDRY: I don't know, 21 because nobody has come to us and asked us for 22 anything. As a regulator, I cannot say what we are 23 going to do until somebody asks us to do something. 24 4389 My point is that the production 25 industry -- we are quite clear that, yes, digital is StenoTran 983 1 here. We are doing something about it. 2 4390 My sensing is that the broadcasters 3 are saying: Yes, digital is here but we are going to 4 wait until the government does something about it. 5 4391 MR. McEWEN: No, I don't -- 6 4392 THE CHAIRPERSON: You don't want an 7 experimental licence, Mr. Sward. 8 4393 MR. SWARD: If you had one. I was 9 just asking Michael to pick one up for us. 10 4394 COMMISSIONER McKENDRY: Please feel 11 free to join us up here, if you would like to. 12 4395 Perhaps you could identify yourself 13 for the record. 14 4396 MR. SWARD: My name is Jim Sward. I 15 have the pleasure to be the Chairman of CBTV. 16 4397 The reason Ms Schuyler has made this 17 investment, this courageous investment, is because she 18 has opportunities to sell programs to the United States 19 and is anticipating, as Michael said, that there is 20 going to be a real market for this kind of product. 21 4398 She is getting her business ready to 22 move on that market. It is a good business move and a 23 courageous move. 24 4399 As broadcasters, about 80 percent of 25 our distribution is through cable. That is unlike the StenoTran 984 1 United States where it is about 50 percent. They still 2 have a very powerful influence with their over-the-air 3 signal. If they put out a digital over-the-air signal 4 that gets wide screen, and that becomes popular, then 5 they are able to use that to lever the cable industry 6 to get with the program and deliver their signal wide 7 screen. 8 4400 In Canada, we don't have that kind of 9 leverage, do we, Michael? 10 4401 MR. McEWEN: No. 11 4402 MR. SWARD: We are up to 80-85 12 percent, and in some markets over 90 percent. We don't 13 have enough of an off-air market to be able to use that 14 to lever the rest in a private market sense, in a 15 competitive market sense; to lever them to come along 16 and get with the program. 17 4403 We have to sit down and work out a 18 plan that involves them. That has been the art and the 19 work in this whole exercise; to get all the pieces 20 committed to spending the billions that it is going to 21 cost, in a logical order, so that when we turn on the 22 switch, folks with cable, who have just bought their 23 new monitor, will be able to plug it in and have it 24 light up. 25 4404 That is why it does not make a lot of StenoTran 985 1 sense for us to go right now. In most cases, we would 2 be just running a high def, envelope sized picture, 3 into the cable company and they would crunch it back 4 into good old analog, the way it is now. 5 4405 Sorry to interrupt. 6 4406 COMMISSIONER McKENDRY: No. That is 7 very helpful. Please feel free to interrupt. 8 4407 Assuming that it is acceptable to Mr. 9 McEwen, please feel free. 10 4408 MR. McEWEN: I actually asked him to 11 come up and sit with me. 12 4409 COMMISSIONER McKENDRY: Part of the 13 dilemma that is chasing at your heels, or nipping at 14 your heels, is the spillover from your U.S. competitors 15 over this two-year period. You have to trade off the 16 potential loss of viewers to your U.S. competitors with 17 your ability to get the system here moving in the 18 direction you want it to move in. 19 4410 Is that the dilemma you are facing as 20 a broadcaster? 21 4411 MR. SWARD: I think the lag is going 22 to be getting reasonable priced high def TVs on the 23 shelves of stores, that consumers can afford in a 24 meaningful number that it starts to affect your 25 audience levels. StenoTran 986 1 0925 2 4412 What we are seeing coming out of 3 manufacturers is that people will be buying high 4 definition not unlike the way we buy audio equipment 5 and components and you will be matching up, you know, 6 different pieces and so on and so forth. 7 4413 It will be quite a different world. 8 There is a grace period on the consumer level. 9 Although at our last meeting, I thought the grace 10 period was going to be from -- well, the first one Sony 11 told us they had was $10,000. I think they were going 12 to bring it to the CNE or something. That was about 13 the only place they were going to bring it. 14 4414 I understand now Toshiba have hit the 15 market with a $1,500 monitor which kind of surprised 16 them all and they are all scrambling to react, so this 17 curve down could be a lot faster than we are thinking. 18 That's where we will get the grace period, Commissioner 19 McKendry, on the consumer side. 20 4415 It could be three years, four years, 21 but I think we are pushing it if we wait much longer 22 than that to get our act together after the Americans 23 light up. 24 4416 COMMISSIONER McKENDRY: That leaves 25 me a question that I wanted to ask about consumers and StenoTran 987 1 the new digital TV sets. In the written submission at 2 paragraph 11, you said and I quote: 3 "Spectrum auctions and the hope 4 of more money for the US 5 Treasury, along with the dream 6 of better TV pictures and a 7 renewed manufacturing/retail 8 sector is fuelling the American 9 roll out." 10 4417 The only part of this fuel, it seems 11 to me, that is relevant to consumers is the dream of 12 better TV pictures. Unlike the U.S. Treasury and the 13 consumer products industry, we are going to get more 14 money out of this. 15 4418 Consumers are going to have less 16 money out of this, but presumably the hope is that they 17 will see great value in a digital TV set, a better 18 picture, and that it will be worth having less money in 19 order to get this better picture. 20 4419 My question to you is, and you have 21 made some comments about that, what evidence exists 22 that a significant number of consumers are prepared to 23 buy a new TV set for a better picture? 24 4420 MR. McEWEN: Let me give you, and 25 this is more anecdotal because we need to do, and StenoTran 988 1 that's one of the things that we are going to do, some 2 market research and some survey work over the coming 3 year. 4 4421 The biggest growth in television has 5 been at the high end, the home entertainment set. 6 These are sets now that are in the $4,000 to $5,000 7 range. The market share has really grown. I think 8 it's now 15 to 20 per cent of all televisions sold are 9 that high end. 10 4422 If you look at that, what do they 11 want? They want better sound, better pictures and as 12 much flexibility as those equipment sets give them. 13 That will be the initial target, 60 inches, good sound 14 and that's the market initially that people will go 15 after. 16 4423 For example, one of the Toshiba 17 models is a 60 inch -- just a monitor. It's capable of 18 taking both an analog signal and then line doubling to 19 go 1080-I full high definition interlaced with a 20 digital box to be added later. Some manufacturers are 21 putting a strategy in place. 22 4424 The next step is to bring that set 23 down to 36 inches wide screen and maybe release it for, 24 as Jim said, $1,500 or $999 maybe in a year and a half. 25 As those pictures come out and as the high end StenoTran 989 1 consumers take the initial shock of the dollar, because 2 they are already spending it, the sets will get 3 cheaper. 4 4425 It will also be fuelled by, I 5 believe, DVDs. Last year I think in this country, and 6 that would have to be confirmed by the Retail 7 Association, but I think there was about 25,000 or 8 30,000 DVDs sold in Canada. This year they are up well 9 over 200,000. 10 4426 A DVD wide screen picture, just at 11 standard resolution, is absolutely fabulous. When you 12 go to full high definition, it's a remarkable 13 experience. 14 4427 Some anecdotal evidence. We will 15 have harder evidence which we will be glad to share 16 with you when we do the market surveys we are planning 17 to do and some of the focus work, but our sense of it 18 is, and certainly the manufacturers' and the retail 19 sense is, it's a product i.e. if the program services 20 are there, the television sets will be there and they 21 will be picked up quickly. 22 4428 COMMISSIONER McKENDRY: You mentioned 23 the close relationship between broadcasters and the 24 cable industry in Canada in terms of delivering your 25 signals into households. StenoTran 990 1 4429 What about the scenario that in a DTV 2 world you might not need cable just as much as you need 3 them now? You could broadcast over the air as you do 4 today your DTV signal which, I understand, can be 5 received by either rabbit ears or the ordinary roof-top 6 antenna. 7 4430 Presumably you can transmit a lot 8 more signals as well as your conventional over the free 9 signal. I assume you could transmit TSN if you wanted 10 to and TSN wanted you to. 11 4431 Will you become a competitor to cable 12 systems in the DTV world? Will it make you less 13 dependent on cable? 14 4432 MR. McEWEN: Well, perhaps I could 15 answer by suggesting that when spectrum is made 16 available to a broadcaster, as they have in the United 17 States, six megahertz of spectrum for a digital signal, 18 if you want to go full high definition, you have to use 19 almost all of that six megahertz. In other words, you 20 can't get another signal in there. 21 4433 If you don't want to go full high 22 definition and you decide just to stay on standard 23 resolution, you could probably get four or five signals 24 out. 25 4434 At present what we have said in StenoTran 991 1 Canada is that spectrum made available for broadcasters 2 should be used to bring the best possible picture to 3 the viewer. That's full high definition. We won't be 4 full high definition on day one, but eventually that's 5 the goal, to have some day parts of the schedule in 6 full high definition. 7 4435 If the marketplace, and that's why we 8 have to monitor very carefully what's going on in the 9 United States, if the marketplace really doesn't have 10 an appetite for full high definition, then it may 11 change the nature of how we would want to use that 12 spectrum, but then that also becomes a public policy 13 issue as well. 14 4436 COMMISSIONER McKENDRY: I understand 15 in the U.S. the FCC has been quite clear that they 16 expect or anticipate that over-the-air broadcasters 17 will provide subscription services, data services and 18 so on. 19 4437 The Canadian Association of 20 Broadcasters, when they appeared, talked about the 21 convergence of the Internet and the television set and 22 the computer, I suppose, and the television set and 23 that would be an opportunity for broadcasters. That's 24 what's leading me to my question. 25 4438 Will you be able to wean yourself StenoTran 992 1 from cable by becoming in effect carriers of more 2 signals, broadcasting them into the air into people's 3 homes on a subscription basis? 4 4439 MR. McEWEN: I think we should 5 understand that, you know, you can run -- let me back 6 up and say that the FCC has contemplated some parts of 7 the day being able to be carried multiple signals, but 8 Congress and the Chair of the Communications Group in 9 Congress has made it very clear that they expect 10 broadcasters to use the full spectrum to bring high 11 definition to viewers and that if the broadcasters 12 aren't prepared to do that, then Congress better have 13 another look at how much spectrum they have been given. 14 4440 Having said that, with a full high 15 definition signal you can still bring a lot of data 16 into Internet and multimedia services with it. There's 17 still that capacity, but there's not enough capacity 18 with full high definition to bring, you know, another 19 television signal. 20 4441 COMMISSIONER McKENDRY: One of the 21 current issues for us and for others is the limited 22 capacity on cable systems in relationship to the 23 demands that are being placed on the cable system for 24 carriage. 25 4442 When digital arrives here in Canada, StenoTran 993 1 I am assuming that there will be dual carriage of 2 signals or you would like dual carriage of signals for 3 some sort of transition period so that the over-the-air 4 broadcaster will have the conventional analog signal 5 coming over the cable and would also like a channel for 6 the digital signal, in effect doubling the space 7 required. Is that right? 8 0935 9 4443 MR. McEWEN: Well, that's certainly 10 what we are talking about and that's certainly the goal 11 and that's one of the issues that we are trying to work 12 on inside, to see how that can happen. 13 4444 But, yes -- I mean look at the 14 situation in Vancouver, BCTV, and which you had WIC up 15 yesterday. My understanding is that 93 or 94 per cent 16 of their audience is delivered by cable. So, for them 17 to light up a transmitter in Vancouver that does not 18 have that signal duplicated on cable is frankly not 19 delivering any product to anybody and it is very 20 difficult to get viewers to move from one delivery 21 medium to another. 22 4445 I think we have to be realistic about 23 that and so our goal as a group is to have the 24 broadcasters and the cable distributors and the 25 satellite distributors work out a co-ordinated roll-out StenoTran 994 1 that there may be some compromises in that roll-out 2 because of capacity problems or whatever, but to work 3 it out in a way that works best for the delivery of the 4 signal and best for the viewer and tries not to disrupt 5 the viewers' patterns because that's a very 6 challenging, challenging situation. 7 4446 COMMISSIONER McKENDRY: If we are 8 talking about a two year roll-out or a roll-out within 9 two years of digital TV in Canada, at least we hope or 10 you hope to see that happen, I understand that the 11 digital set top box, the second generation is probably 12 a couple of years away too, the impression I get from 13 reading literature and so on. And as I understand, I 14 think it was in your submission that the cable industry 15 is looking at a billion dollar upgrade to their 16 network. Are we going to be in the position of having 17 to decide who gets bumped to carry duplicate signals? 18 4447 MR. McEWEN: Well, you know the 19 debate in the United States and we are hoping to avoid 20 that debate in Canada by coming up with an industry 21 solution. 22 4448 Obviously, if the industry can't 23 provide a solution itself it may fall into somebody 24 else's lap and it could be yours. 25 4449 MR. SWARD: I think, Commissioner StenoTran 995 1 McKendry, that it is not a two year roll-out. It is 2 sort of two years until the gun goes off and the sound 3 of the gun is the broadcaster being the first link in 4 the chain investing their capital because nothing can 5 happen until the broadcaster transmits a high- 6 definition signal. 7 4450 When that happens cable can receive 8 it. If they are ready to go they can put it through 9 and the consumer can receive it. It's the broadcaster 10 that has to put the money on the table. We think the 11 first money will go on the table in the next couple of 12 years. 13 4451 So, over a period of time it will 14 probably cost the broadcasters, maybe the following two 15 years, the better part of $400 million or $500 million 16 is our guestimate right now for all of us, including 17 CBC, to do it. 18 4452 We want a deal with cable because we 19 are so dependent on them, but they first have to get on 20 the platform of bits and bites themselves. They have 21 got to get on ones and zeroes and the $800 million that 22 we are talking about in this presentation is 23 incremental to the change that is already under way to 24 digital. 25 4453 However, when they get a digital StenoTran 996 1 plant in place that they have an enormous bump up in 2 their capacity and we should be able to co-ordinate say 3 a five to seven-year transition plan, where the 4 conventional broadcasters broadcast dual analog over 5 cable and dual -- two channels, one for each -- or two 6 for each service. By the time we can start to shut 7 down analog and turn those channels back over to the 8 cable industry, that will be another generation, but I 9 am sure there will be lots more ideas at that time for 10 Canadian enterprise ideas on how to fill those channels 11 up, but they first have to make their step to digital. 12 4454 COMMISSIONER McKENDRY: If the gun 13 goes off in two years are you -- I don't know how quite 14 to frame this question properly, but what I would like 15 to know, if you have it, is an estimate of how many 16 viewers in Canada you expect will turn their TV sets 17 towards the U.S. for digital signals. In your mind 18 will there be a significant shift of Canadian viewers 19 to American over-the-air stations in the next two 20 years? 21 4455 MR. McEWEN: Not significant -- well, 22 it depends on what you call significant. I mean is 23 200,000 to 300,000 grey markets significant for DTH. 24 4456 Detroit will be on the air and that 25 will take in Windsor, probably up to Chatham, in that StenoTran 997 1 area. Seattle will be on the air and that beamed 2 straight across to Victoria on Vancouver Island and 3 will get probably North and West Van, up the side of 4 the mountain in Vancouver. 5 4457 There is discussion that Buffalo may 6 go on the air sometime towards the end of next year and 7 that would bring a signal into Toronto and depending on 8 which stations go, either all of the GTA is covered or 9 parts of it and, of course, then down the lake towards 10 the border with Buffalo. That's the potential 11 audience. 12 4458 Now, how many within that audience 13 without our own digital signals and what not on the air 14 will have those television sets within a couple of 15 years, maybe 50,000, maybe 100,000. 16 4459 The danger is that if you fall 17 farther behind than that, the acceleration in this area 18 I think is going to be very quickly developed. You are 19 going to see kind of a take-off rate that will just go 20 like that. We would like to be at that start of the 21 curve, not that start. 22 4460 As one of our members said in a 23 committee meeting when we were preparing our business 24 plans, a grey market of 200,000 or 300,000 was probably 25 a mistake. A grey market of 3 million or 4 million is StenoTran 998 1 a disaster and that's what we would worry about if we 2 were not positioned properly. 3 4461 COMMISSIONER McKENDRY: Am I right 4 that in the United States digital TV in the early days 5 isn't just commercial broadcasters. I understand some 6 PBS stations are converting now or will be shortly. 7 4462 MR. McEWEN: Yes. Out of the five 8 that -- what are the figures -- 28 and 17 in November, 9 so that's 45 stations that will be on the air in 10 November and out of the 45 I believe five are PBS 11 stations. 12 4463 COMMISSIONER McKENDRY: As a final 13 question, coming out of this policy review that we are 14 undertaking what would you like to see in our decision 15 from your perspective? 16 4464 MR. McEWEN: I would like, and I 17 think the industry would like to see the Commission be 18 sensitive to the issues of the transition, the costs, 19 the challenges and the opportunities and be proactive 20 about working with the industry to create the 21 regulatory framework that is going to be required to 22 roll it out. 23 4465 COMMISSIONER McKENDRY: When you say 24 you would like us to be sensitive what does that 25 mean -- sensitive to the costs? StenoTran 999 1 4466 MR. McEWEN: Aware of the costs. I 2 mean there is a massive amount of investment that is 3 going to be put in here with initially no other revenue 4 opportunities. 5 4467 COMMISSIONER McKENDRY: Does that 6 mean we should go easy in terms of asking for more 7 expenditures on Canadian content because of the 8 expenditures on digital? Is that what sensitive means? 9 4468 MR. SWARD: Yes. 10 4469 MR. McEWEN: Yes, I think so. 11 4470 I always like to hear the Chair say 12 that. 13 4471 COMMISSIONER McKENDRY: Thank you. 14 4472 Those are my questions, Madam Chair. 15 4473 THE CHAIRPERSON: Commissioner 16 Pennefather. 17 4474 COMMISSIONER PENNEFATHER: Thank you. 18 4475 Good morning. 19 4476 MR. McEWEN: Good morning. 20 4477 COMMISSIONER PENNEFATHER: In effect, 21 I would like to go back to this question of Canadian 22 content. I am pleased that you raised the issue of 23 programming in your paper this morning. I would just 24 like to be clear on what you mean by the market will be 25 even more dominated than it is by American program StenoTran 1000 1 sources. 2 4478 I am assuming, and correct me if I am 3 wrong, is folly, and forgive me if this is too 4 simplistic, at some point in time Canadian viewers will 5 have the sets and they will be watching American 6 signals. Maybe some Canadian producers have had the 7 courage to move forward and their programs will be part 8 of that menu. 9 4479 However, unless we move, you are 10 saying they will not be watching Canadian television in 11 digital. Let's assume they are watching Canadian 12 television in digital. Will they be watching any 13 Canadian programs in digital or will they be watching 14 American programs because, as you point out, the supply 15 at least at first is plentiful because of 35 millimetre 16 programming, et cetera. Could you take me forward on 17 that and just get the timing clear and what you feel we 18 should do in that effect? 19 0945 20 4480 MR. McEWEN: Thank you for your 21 question, because I think it is fundamental, and 22 perhaps in the kinds of issues that you are dealing 23 with in this policy hearing it is perhaps the most 24 fundamental issue of all. 25 4481 Our libraries are basically not 35- StenoTran 1001 1 millimetre. the NFB has some 35-millimetre, the CBC 2 has and some of the large independent producers have 3 some 35-millimetre product, but most of our libraries 4 are less than super 16 and they just don't convert to 5 wide screen digital. So any product that is there 6 probably in our libraries, less than 10 per cent is 7 convertible to wide screen digital. 8 4482 That may change with technology 9 changes, but that's the way it is right now, whereas 10 probably in the United States 90 per cent of what they 11 have produced over the last 10, 20 years can be 12 converted to wide screen digital television. So you 13 can think about strip programs, whatever, just go back 14 in there and they can convert and market during the 15 transition as product available and ready for wide 16 screen digital television. 17 4483 Now, in Canada, my own view is -- and 18 this is my own view after a lot of discussion with 19 others -- some of our big players have the capacity to 20 start producing now. Some, like Linda, have been quite 21 courageous, but it was done as an experiment, with a 22 lot of support from Sony and the CBC and others in that 23 project. 24 4484 There is not systematic production 25 taking place in Canada of wide screen digital product, StenoTran 1002 1 or even 35-millimetre convertible product. Most of our 2 medium and small independent producers are not 3 producing in that. Therefore, we have a product lag; 4 we just don't have anything on the shelf that we can 5 convert and put on the air. 6 4485 So what we are suggesting is that 7 producers should be producing now and down-converting 8 back to analog; in other words, producing in digital or 9 35-millimetre and down-converting back to analog. It 10 is a little more expensive, but they have product on 11 the shelf, and in the long term they are going to get 12 more revenue from it. But that has to be part of an 13 industry strategy. 14 4486 COMMISSIONER PENNEFATHER: Indeed, 15 and I assume then you mean that continuing the 16 preparation of Canadian product for this new digital 17 era should also be part of our regulatory framework and 18 part of the broadcasters' responsibilities as well. 19 4487 MR. SWARD: Commissioner Pennefather, 20 at the task force level, an important component of that 21 was representatives of the independent producers and 22 filmmakers, and one of City-tv's tasks or missions is 23 to get information. The big players know what is going 24 on and are sort of on top of it, but there is a lot of 25 smaller producers that really don't have a handle on StenoTran 1003 1 what this means to them and how to get there. 2 4488 The first green light we need to get, 3 as Michael said, is from the Minister of Heritage, 4 because there is a fully developed plan sitting on the 5 desk over there that I understand has been very well 6 received; we just don't have the green light on it. 7 Part of that plan is a whole preparedness program to 8 assist the production industry in getting into this 9 mode. 10 4489 If we can get going, I don't think we 11 are going to have any trouble with our Canadian product 12 standing up -- the new stuff, the new product, the 13 fresh episodes, the new ones. We do have some library 14 issues, and that's going to affect broadcasters and 15 others to go back into old repertoire, who use that as 16 a programming instrument. But the fresh stuff, the new 17 stuff, should be there if we put this plan in and we 18 put it in the way it is tabled right now. 19 4490 COMMISSIONER PENNEFATHER: I agree, I 20 do hope so, and I hope, as Mr. McEwen said, that this 21 is an opportunity for Canadian television, not just a 22 challenge, which must be supported through the 23 government, but that you will move forward and prepare 24 this country for some of the best digital programming 25 in the world, because I think we have to remember this StenoTran 1004 1 is also not just an issue of Canada and the United 2 States, this is an issue of world programming and our 3 capacity to meet that demand and to present the quality 4 we are capable of. 5 4491 I think this is an area we should 6 keep top of mind; as Commissioner McKendry put it, it 7 is more than just a pretty picture that will make 8 Canadians interested. If all our surveys and 9 everything else prove that Canadians will watch 10 Canadian programming, then they will watch digital 11 programming, but the quality has to be there and it is 12 more than just a pretty picture. 13 4492 MR. McEWEN: May I just follow on 14 that point, Commissioner? A little vision for you. 15 4493 The CBC, as you are probably aware, 16 are shooting People's History of Canada, and they are 17 shooting it in, I understand, both analog and wide 18 screen digital because they see it as a library for 19 future generations. With it they are also doing a 20 number of multimedia-related things -- CD Roms, they 21 are publishing diaries, research material on the 22 Internet, on their website and whatnot, which I think 23 is a great idea because it becomes a real teaching 24 tool, whether you are doing the expulsion of the 25 Acadians or the settling of the west or the rebellion StenoTran 1005 1 or whatever, and it will be a tremendous resource for 2 our children. 3 4494 But what really interests me is, ten 4 years from now that program is going to be on the air 5 in wide screen and we are going to have the capacity to 6 download that material, that reference material, off 7 the television into the home while the program is on 8 the air, or scrolling the bottom of it, or finding out 9 where you can get the CD for the Acadian music of the 10 period, or maybe even downloading the music for a fee. 11 4495 My point is that it is going to 12 change over the next generation how people use 13 television, and there will be a degree of convergence 14 there. That's the opportunity for Canadian 15 programmers, if they start thinking about that, down 16 that road, and starting to build product that lends 17 itself to that kind of experience. 18 4496 COMMISSIONER PENNEFATHER: Just one 19 final comment. I think you were both here yesterday 20 when Mr. Stark was with us, and he as well mentioned 21 the digital world may also provide greater 22 opportunities for access to information and to all 23 kinds of media. 24 4497 So I would hope in your planning, in 25 the industry framework that you are putting together, StenoTran 1006 1 you would consider those opportunities as well for the 2 disabled and for all citizens of this country to have 3 access to the information coming through these 4 beautiful systems. 5 4498 MR. McEWEN: Of course. Thank you. 6 4499 THE CHAIRPERSON: Thank you. 7 4500 Commissioner Cardozo. 8 4501 COMMISSIONER CARDOZO: I just want to 9 carry on a couple of issues that have been raised by 10 Commissioner McKendry and Commissioner Pennefather. 11 4502 I am still not clear why you need 12 government and the CRTC to be making the kinds of 13 statements you are looking for if you have the economic 14 and the compelling case, unless it is that you need 15 financial support from government, direct or 16 indirect -- and I guess you have now indicated that you 17 do need the issue of the Canadian content; that has 18 been hinted at in other presentations and I think that 19 has come out clearly. 20 4503 MR. McEWEN: First of all, as a 21 reference -- and I don't know whether you have seen it, 22 but the task force report is fairly explicit in laying 23 out the reasons why -- I mean, the Minister actually 24 commissioned the task force to come up with a set of 25 recommendations to advise government about what action StenoTran 1007 1 should be taken. That was the Minister's own 2 initiative. 3 4504 The industry responded to that 4 initiative by coming up with a task force report with a 5 number of recommendations. It would be the industry's 6 expectation that it would be responded to. That's 7 point No. 1. And in there you will see for example 8 production recommendations and our concern about 9 producing product and how we think that we can 10 stimulate that, and there are some other issues in 11 there like that. 12 4505 I want to kind of broaden the thought 13 out. Some of you may be aware that I also work in the 14 digital radio side. I am working with an international 15 group called the World Digital Audio Broadcast Forum, 16 and I had the opportunity of chairing a panel in 17 Amsterdam about 10 days ago. 18 0955 19 4506 Part of the discussion focused on the 20 roll-out of new technologies and how can you be 21 successful in rolling out new technologies when it's 22 replacing something as ubiquitous as analog radio or 23 you could put analog television, because it's a real 24 challenge. The ingredients that panellists from the 25 United Kingdom, Germany, France and the United States StenoTran 1008 1 indicated were the following, and I buy this argument. 2 4507 There is a commitment from the 3 country through a proper policy and regulatory 4 framework that the service-providers then will provide 5 the services, the program producers will program and 6 the manufacturers will be there with the equipment. 7 It's in that kind of order. Any successful transition 8 will have those ingredients to it. 9 4508 I look to the United Kingdom in both 10 radio and television. They have just announced the 11 launch -- the commercial and public broadcasters have 12 launched digital radio. They have 70 per cent of the 13 country covered with transmitters, government has fully 14 endorsed it, and they are rolling out digital 15 television. Again government endorsed a plan, made 16 spectrum available, they built out the country to 90 17 per cent and they are launching in six months. 18 4509 Other countries have not done so well 19 because they haven't had the general kind of policy and 20 regulatory framework. Germany were digital radio 21 technology and in the case of television digital video 22 broadcasting and terrestrial technology was developed. 23 It's a mess because they don't have a coordinated 24 policy or regulatory framework. Now they are starting 25 to get their act together. So, the ingredients are StenoTran 1009 1 policy and regulation. The broadcasters are there 2 broadcasting those services, program-makers are making 3 the programs and the manufacturers are there. Those 4 are the elements. 5 4510 COMMISSIONER CARDOZO: One other 6 question in terms of the different parts of this whole 7 deal, and this is obviously a naive question. Is it 8 possible that, say, five or ten years down the road we 9 will have parts of this and not others? I am thinking 10 digital in terms of capacity because we need more 11 capacity. There is demand for that, but perhaps not 12 the wide screen part of things. Is it possible that 13 for cost reasons or whatever, we go with part of the 14 package and not the other or is it just going to 15 happen, period, and we should stop questioning it? 16 4511 MR. McEWEN: No, it's a fair point. 17 I think a lot of it will depend on the success of the 18 roll-out in the United States to the degree that we go 19 fully wide screen digital high definition. We will 20 have to watch that and be very mindful of it. 21 4512 In Europe, they are taking a 22 different course. Some of their services will be wide 23 screen and others will be in 4 by 3. The problem is 24 you create a letterbox format and I'm not sure that in 25 the long run that's a very good strategy. My own view StenoTran 1010 1 is that in ten years it will all be wide screen. 2 4513 COMMISSIONER CARDOZO: You would like 3 to see it that way, but is it possible? 4 4514 MR. McEWEN: It's always a 5 possibility. In the end, the marketplace will decide. 6 But when you see the take-up of DVDs the way they are 7 coming into the market and you see a DVD picture on a 8 wide screen television as opposed to a 4 by 3, why 9 would you ever do that? Why would you stay with 4 by 10 3? Gradually you would start to replace your 11 televisions and that will happen over a 10 to 15-year 12 time frame. Maybe the next new television that the 13 family would get a year or two from now would be wide 14 screen, but they would still have two or three others. 15 I think the average home has two televisions now. 16 4515 MR. SWARD: But you are right, 17 Commissioner Cardozo, that it may not be a wide screen 18 TV in everybody's home. I'm not sure everybody has 19 rooms big enough for those big wide screen TVs to get 20 back far enough to be able to watch it on the big ones 21 and when they get down small, the value of the 22 definition may start to dissipate. 23 4516 COMMISSIONER CARDOZO: Thanks. I 24 wish you had told me this six months ago. I just moved 25 into a new house over the summer. StenoTran 1011 1 4517 MR. SWARD: Did you buy a screening 2 room with the house? You will need a screening room, a 3 big basement. 4 4518 COMMISSIONER CARDOZO: In good time, 5 I guess. 6 4519 MR. SWARD: Where we have positioned 7 Canada in this regard is on what I will call a fast- 8 following strategy. We are not the gung ho 9 cheerleaders on this technology. It doesn't mean we 10 don't want to go there, it's just that our resources 11 are limited enough that we can only afford to up the 12 money on the table once and to get it right. We can't 13 afford any crashes along the way or a couple of billion 14 dollars tracked down after the wrong strategy. 15 4520 So, we have effectively tried to 16 organize all the components and said to our government, 17 "Here is the policy that we need and this is a fast 18 following." It's designed to just sit in the 19 slipstream enough and say, "Okay, that works", boom, 20 and get us there and count on the lag on the consumer 21 front to be able to give us the flexibility to do it. 22 4521 But this is going to land in your 23 lap; not right away, but this is going to land in your 24 lap if we do go ahead on things, like the issue of what 25 the broadcasters do with the second channel. Is it StenoTran 1012 1 just a full redo or is it just a complete repeat or can 2 they try some different stuff on it? Folks will have a 3 lot to say about that, pro and con. So, the whole 4 governance of this policy will make your world once 5 again and ours more complex and more interesting, with 6 a lot more opportunity. 7 4522 COMMISSIONER CARDOZO: Thanks. 8 4523 Thanks, Madam Chair. 9 4524 MR. McEWEN: By the way, just one 10 point on wide screen. Europe introduced wide screen 11 about a year and a half ago, as I understand, and the 12 take-up rate in France -- half the television sets sold 13 in France this past year have been wide screen. They 14 are not 60-inch wide screens, we are talking 30 to 36- 15 inch wide screen. So, that's an interesting 16 observation. I don't know, it may be an indication. 17 4525 THE CHAIRPERSON: But that would only 18 be helpful if we knew how many new television sets were 19 sold. 20 4526 MR. McEWEN: We could find out, 21 but -- 22 4527 THE CHAIRPERSON: Because it's the 23 replacement that becomes a problem. To say half of the 24 television sets sold in a year is only relevant if you 25 can also tell me what the proportion of that is to the StenoTran 1013 1 total number of television sets in France. 2 4528 MR. McEWEN: I don't know what the 3 market is in France. 4 4529 THE CHAIRPERSON: Wouldn't you agree, 5 though? 6 4530 MR. McEWEN: Yes. 7 4531 THE CHAIRPERSON: Because presumably 8 you could have sold 100 and 50 of them wide screen. 9 4532 MR. McEWEN: Well, they probably sell 10 about a million television sets. 11 4533 THE CHAIRPERSON: I am being 12 facetious. 13 4534 MR. McEWEN: A fair point. 14 4535 MR. SWARD: Vice-Chair, there are no 15 standards that we can apply to this. It took 30 years 16 to get a million Canadians to get a telephone in their 17 home and it took 13 years for a million Canadians to 18 sign up for cable. These bags under my eyes are a 19 testimonial to my brief stint in the cellular telephone 20 business where it took 18 months for a million 21 Canadians to acquire cellular telephones. 22 4536 We have seen technologies be 23 introduced at such varying different rates. If one of 24 these wide screens lands on my street in my 25 neighbourhood and it is enough of a change, as much as StenoTran 1014 1 colour was a change from black and white, if it's 2 enough of a change, whoosh, it will go like wildfire up 3 and down the block. If it's not, it will remain the 4 toy of the wealthy or those kinds of things. 5 4537 We don't have those answers yet, but 6 there is a -- the TV that is downstairs in our rec room 7 is 20 years old and it still works. That won't get 8 changed until it breaks or there is a new alternative. 9 You won't be able to take the analog trade-out and the 10 average of a television -- we did this, didn't we, in a 11 committee? 12 4538 MR. McEWEN: Yes. 13 4539 MR. SWARD: The average life of a 14 television set -- it really hasn't changed a lot in the 15 last 20 years -- is the better part of 12 years. 16 4540 MR. McEWEN: That's right. 17 4541 MR. SWARD: So, there is quite a long 18 life. So, you think it will take 12 years to swap out 19 to the new technology. It won't go that way. It could 20 catch fire and be all over in three or four years. 21 That's what the American plan counts on because they 22 really are seemingly quite serious about turning analog 23 black. That means all of those analog sets won't work 24 in 2006 in the United States. That depends on who 25 wants votes and what the circumstances are at the time. StenoTran 1015 1 4542 THE CHAIRPERSON: Commissioner 2 McKendry? 3 4543 COMMISSIONER McKENDRY: I just had a 4 follow-up question on a matter I guess I had raised 5 with you and then Commissioner Cardozo brought it up 6 again. The report you are referring to, I think, is 7 the report of the government, the Digital Era Report. 8 I am getting the impression you are saying: We can't 9 move until we get a response. You have moved on a 10 couple of things in here, I think. For example, the 11 organization that you are heading up was one of the 12 recommendations. Some of the standard stuff, I think, 13 has moved ahead or is moving ahead. 14 4544 What specific recommendations are you 15 actually waiting for? Is it the one that says that the 16 government should provide an additional $50 million 17 annually? 18 4545 MR. McEWEN: We would certainly like 19 to hear about that one for the production community. 20 Jim referred to that. That was the recommendation. 21 Whether it's $50 million or whether it's additional 22 incentives for producing in digital or whatever, but 23 something to prime the pump and get things going there, 24 yes, we would like to hear on that. 25 4546 We would like to hear from the StenoTran 1016 1 government that they actually agree that we should move 2 from analog to digital, which is the whole philosophy 3 of the report. We would also like to make sure that 4 broadcasters have access to licences for a simulcast 5 period. We would like to understand and work in some 6 kind of overall transition strategy. 7 4547 There is 17 recommendations. I think 8 about ten of them are strategic and about seven of them 9 are implementation recommendations. We would like to 10 hear back from government, from a task force that it 11 commissioned, to get the best advice it could from the 12 industry, what they think about that. 13 4548 COMMISSIONER McKENDRY: Are you 14 saying that the federal government is holding up the 15 evolution of digital television in Canada by not 16 responding to this report? 17 4549 MR. McEWEN: No, I'm just saying we 18 haven't heard from them yet. 19 4550 MR. SWARD: Commissioner McKendry, we 20 are moving this forward and we are going to continue to 21 move it forward. It would be nice to have and at one 22 point or another it's important that they set the 23 policy because, as I say, this is going to move into 24 your area when people start coming forward with these 25 things that are a by-product of this transition, StenoTran 1017 1 whether it's the use of another channel or those kinds 2 of things. 3 4551 But I don't think there is any doubt 4 that to the degree -- I don't think there is any doubt 5 that there is going to be an endorsement for that 6 policy or a policy that is very similar to that. I 7 think it's just a matter of time, isn't it, Michael? 8 4552 MR. McEWEN: Yes. My view is that we 9 should probably hear from them within the next couple 10 of months. There has been a lot of work done. 11 4553 MR. SWARD: We have got wheels under 12 this and we are moving it because we have to as an 13 industry between broadcasters and cable and the 14 production community and the consumer products group. 15 4554 COMMISSIONER McKENDRY: Thank you 16 very much. 17 4555 Thank you, Madam Chair. 18 4556 THE CHAIRPERSON: You are now, of 19 course, appearing before the broadcast regulator and I 20 think it's fair for us to be aware of what's going on, 21 but also to see what our role is. From the 22 conversation this morning, I would see a number of 23 groups involved in this. As Ms Schuyler has pointed 24 out, there may be an advantage to the producer if it's 25 large enough to go ahead and produce in digital, StenoTran 1018 1 anyway, because it can sell where digital is already 2 occurring. 3 4557 We have the broadcasters who say they 4 will have to spend a lot of money, so we should be very 5 conscious of that when we regulate, and then we have 6 the cable industry on which the broadcasters are very 7 dependent in Canada. My suspicion is the broadcasters 8 are not going to spend a whole lot of money on this 9 until the cable operators are in the game, too. 10 4558 MR. SWARD: You are absolutely right. 11 4559 THE CHAIRPERSON: Then you have the 12 consumer at the end, who has to see a price for the TV 13 set that seems to be warranted according to what 14 quality he is getting, which, in turn, requires very 15 high definition. You have mentioned black and white. 16 I often tell the story of how, when I brought up my 17 children, we still had a black and white TV and the 18 peacock would come on the screen and the kids would run 19 into the kitchen and say, "Mommy, Mommy, this is so 20 neat. This one is going to be in colour. They just 21 said this would be living colour." 22 4560 So, if there isn't sufficient 23 difference, even if your screen is house-trained, and 24 then if the cable operators are not -- my children may 25 have been, albeit, a bit slow. Then if the consumer StenoTran 1019 1 has to spend $7,000 on a set at the beginning and all 2 he can do is somehow capture the over-the-air signals 3 depending on where you live, he is hardly going to do 4 that. I suspect that's what you mean by the grey 5 market. They are certainly not going to do it in 6 Sudbury if the cable operators are not in the game. 7 4561 If the broadcasters are telling us 8 today that one of the ways we could help is by reducing 9 our requirement on Canadian content, I don't see how 10 that helps the producers get into the digital game 11 because they are here telling us that they have to have 12 the broadcasters give them more shelf and more money 13 and more exhibition and so on. So, it's a chain that 14 makes me ask myself to what extent in this particular 15 context, this particular hearing, do we regulate by 16 reference to changes in technology that may or may not 17 come in the chain the proper time. 18 4562 We have had a recent history of doing 19 that, of saying, "You have to diminish your demands 20 here because we have to do this, which will be better 21 for the system in the end." So, it seems to me in this 22 chain that our responsibility is to look at it from the 23 perspective that we are charged with, which is 24 regulation. I suspect what I heard this morning is: 25 Don't ask as much content from us because we are going StenoTran 1020 1 to spend a lot on technology. 2 4563 MR. SWARD: I was trying to offer a 3 brief answer for a change when I said "yes". This is 4 just one of the many inputs, Vice-Chair, that you will 5 receive throughout this three or four weeks about the 6 environment that you are regulating into. It's 7 important to us and to our board that this be an input 8 that you have, that when you sit down and say, "Okay, 9 what are we going to do here, we have all of these 10 different ideas", that when you make those decisions 11 you have an understanding of what the industry is 12 facing, what they have ahead of them, and that you have 13 some kind of an idea of their capacity. 14 4564 Is conventional television the 15 smokestack sector or the communications industry? Is 16 it the AM radio of television with all of the new 17 alternatives, especially specialty? Those are 18 decisions that you are going to have to make and all we 19 are trying to do with this and other folks that are 20 here on these environmental issues is more or less give 21 you as much information as you are interested in 22 receiving about what lies ahead for the industry and 23 then, on that basis, we are hopeful that you will take 24 those factors into consideration as you decide how you 25 are going to change it. StenoTran 1021 1 4565 There is lots of change going on 2 around us and change in regulation is another change 3 for us to deal with. So, if you decide at this point 4 it's time to move the platform a bit in that area, 5 that's fine. We just want to ensure that you 6 understand the context and the environment that you are 7 doing that in. 8 4566 THE CHAIRPERSON: We are grateful for 9 your appearance, Mr. McEwen, so early on Saturday 10 morning. Of course, the more we know, the better 11 decision we are likely to be able to make in the 12 reference framework that informs our decision. 13 4567 MR. McEWEN: Thank you very much. 14 4568 THE CHAIRPERSON: Thank you to both 15 of you. 16 4569 MR. SWARD: Thank you for allowing me 17 this rude intrusion. 18 4570 THE CHAIRPERSON: The more the 19 merrier. We need to be kept informed. Thank you very 20 much. 21 4571 Madam Secretary, would you call the 22 next presenter, please? 23 4572 MS BÉNARD: Thank you, Madam Chair. 24 The next presentation will be by the Canadian 25 Independent Film and Video Fund and I would invite them StenoTran 1022 1 to please come forward. 2 4573 THE CHAIRPERSON: Good morning, Madam 3 and sir. Go ahead when you are ready. 4 PRESENTATION / PRÉSENTATION 5 4574 MS JACKSON: Thank you, Madam Chair, 6 good morning. Good morning, Commissioners and CRTC 7 staff. My name is Robin Jackson. I am the Executive 8 Director of the Canadian Independent Film and Video 9 Fund, also known as the CIFVF. With me today is 10 Richard Elson, Treasurer of the CIFVF and an 11 independent producer from Montreal and President of the 12 company Imageries. 13 4575 The Canadian Independent Film and 14 Video Fund is a private sector, non-profit organization 15 dedicated to supporting the development of the non- 16 theatrical industry through the creation of films, 17 videos and new media projects which promote lifelong 18 learning and are produced by Canadian independent 19 producers. In addition, we administer the Stentor New 20 Media Fund and the Fundy Communications Production 21 Fund. 22 1015 23 4576 The CIFVF has made a number of 24 submissions to the CRTC over the years, specifically in 25 response to P.N. 1993-105 on the structure and mandate StenoTran 1023 1 of the proposed Production Fund for Canadian 2 Programming; Public Notice 1993-137 and 74 and 1994-10 3 regarding the creation of the Cable Production Fund; 4 Public Notice 1996-69 concerning the regulation of 5 broadcasting distribution undertakings; and Public 6 Notice 1997-27 on the contributions by BDUs to the 7 CTCPF wherein we suggested that the underrepresented 8 category be expanded to include educational and 9 information programming, and that BDUs should have the 10 option to direct contributions to existing 11 independently-administered production Funds. 12 4577 MR. ELSON: The CIFVF is the only 13 national funding organization in Canada working to 14 support the program production sector that specializes 15 in Canadian lifelong learning programming. Our 16 clientele base comprises 2,800 producers from all parts 17 of Canada. 18 4578 CIFVF supported programming is 19 educational or informational in nature, deals with any 20 subject matter, is geared to specific audiences, may be 21 distributed in schools, universities and colleges, 22 libraries, health institutions, on educational and 23 specialty television, CDROMs and over the Internet; has 24 budgets in the range of $70,000 to $750,000; may have a 25 variety of funders, such as government, corporations, StenoTran 1024 1 provincial funding agencies, other private funding 2 agencies, broadcast licences, Telefilm Canada, tax 3 credits, Canada Council or the NFB, and producers' 4 deferrals; and is produced by Canadian independent 5 producers and adds to Canadians' understanding. 6 4579 The CIFVF has responded to only some 7 of the questions raised by the Commission that most 8 concern our organization. 9 4580 The CIFVF is of the opinion that 10 government must continue with policies that ensure 11 funding sources for Canadian programming. While we 12 realize that this is not totally within your 13 jurisdiction, through your policies and the regulatory 14 framework, the Commission does influence the type and 15 diversity of programs that are produced. 16 4581 The CIFVF was challenged three years 17 ago to become self-financing. We took this challenge 18 very seriously, hired fund raisers, appealed to various 19 levels of government, approached corporations in the 20 private sector in the communications area, as well as 21 non-communications companies, and have achieved only 22 small success. 23 4582 We can tell you from this time- 24 consuming, expensive and difficult process how 25 difficult it is to attract private investment. Based StenoTran 1025 1 on these efforts in this area, we have come to the 2 realization that government must continue with policies 3 that ensure various funding sources for Canadian 4 programming. 5 4583 MS JACKSON: We emphasize that 6 Canadian content requirements for broadcasters, as 7 contained in the existing regulations, remain an 8 effective mechanism for achieving the objectives of the 9 Broadcasting Act. 10 4584 In this respect, we are of the 11 opinion the Canadian content requirements, coupled with 12 the variety of funding programs available in this 13 country, are an effective means of ensuring that 14 Canadian television appropriately reflects Canada's 15 diversity. 16 4585 To this end, through the programming 17 that it funds, the DIFVF helps to advance and profile 18 Canada's diversity in all its forms, from cultural, 19 regional and linguistic diversity, to diversity of 20 access, of subject matter and funding partners. 21 4586 Examples of programming that we have 22 funded which we think embody the many facets of 23 diversity include: "Tierre madre", produced in 24 Spanish, English and French, on human rights and land 25 distribution in Guatemala; "Ne me fais pas rougir", StenoTran 1026 1 which deals with the problem of pressure ulcers for 2 handicapped people; "Saputi", which chronicles the 3 daily lives of the Inuit people in the Igloolik area; 4 "Teen Rebel, Teen Mom", which follows four single 5 teenage mothers who are struggling to find their 6 identity through parenting. 7 4587 We would emphasize that it is 8 important not to sacrifice Canadian programming 9 diversity at the expense of commercial viability and 10 international exportability. In this respect, the 11 CIFVF feels that the CRTC should not overlook the 12 equally important emphasis on high quality Canadian 13 programming that is geared to smaller or more 14 specialized localized audiences. 15 4588 As we said in our brief, the strong 16 emphasis on generating large audiences and ensuring 17 export potential which the CIFVF senses underlies 18 sections of Public Notice 1998-44, if privileged in 19 CRTC policy-making, could result in a Canadian 20 television system that promotes only pragmatic 21 pluralism, or those forms of diversity that are likely 22 to be solely commercially viable. 23 4589 We should also point out that in the 24 context of the discussion about Canadian viewers, 25 programs financed by the CIFVF have a strong StenoTran 1027 1 identification with their viewers. Each project funded 2 by the CIFVF has identified its target audience, 3 provides an assessment of the viewer or end user's 4 needs and has letters of support from its potential end 5 users. 6 4590 One may not be able to judge our 7 programs by the Nielsen ratings but, rather, by the 8 impact and empowerment that they bring to the lives of 9 Canadians. 10 4591 MR. ELSON: We would like to speak to 11 the issue of the underrepresented category of 12 programming. 13 4592 The CIFVF feels that the term 14 "underrepresented" should be re-examined and revamped. 15 The reason that we raise this point is that there is a 16 definite need for what we have termed lifelong learning 17 materials or educational/informational programming and 18 a glaring lack of funding for it. 19 4593 With the proliferation of specialty 20 channels, the need for this type of programming has 21 grown exponentially. We also feel that this type of 22 programming is not any less "Canadian" than dramatic 23 programming. 24 4594 On a related issue, in response to 25 item 30 in Public Notice 1998-44, the CIFVF would StenoTran 1028 1 suggest that the Commission needs to place a greater 2 emphasis on documentary programs, not only in their 3 scheduling but in treating them on a "level playing 4 field" with entertainment programming. 5 4595 Documentaries provide viewers with 6 distinctly Canadian programming which have rich and 7 varied styles of presentation. They give expression to 8 a great variety of voices from across the country to 9 contribute critical and thoughtful reflections on a 10 broad range of subjects. 11 4596 One way of encouraging this would be 12 to increase time credit to 150 percent. 13 4597 MS JACKSON: We are in agreement with 14 the Association for Tele-Education in Canada (ATEC) 15 which states that thee is a need for funding for 16 Canadian programming designed for lifelong learning. 17 4598 As they mention, although non- 18 broadcasting technologies are also used to extend 19 educational programs, television remains the most 20 effective medium for creating and reinforcing a 21 Canadian learning culture. With the proliferation of 22 educational and specialty channels, there is more than 23 ever a need for this type of programming. 24 4599 MR. ELSON: The Commission is quite 25 correct in its statement in Public Notice 1998-44 that StenoTran 1029 1 the Canadian independent production sector has 2 significantly increased in strength throughout the 3 country. 4 4600 This is due, in part, to incentives 5 and funding programs instituted by federal and 6 provincial governments and to indirect support from the 7 Commission through its policies of requiring BDUs to 8 contribute to production funds and requiring 9 significant public benefits when the ownership or 10 control of a television programming undertaking is 11 transferred. 12 4601 We would like to state that these 13 policies of the Commission must remain in place. 14 4602 The reason we state this is that what 15 attracts audiences to television is the programming 16 (and not the advertising). In order to have the 17 diversity of programming that is necessary and that is 18 still an objective of the Broadcasting Act, money is 19 required to feed the program production machine so that 20 it can deliver this programming to broadcasters. 21 4603 In this respect, it seems that there 22 is never enough money with which to produce Canadian 23 programming. 24 4604 We strongly disagree with the 25 Production Company Study done by CTV/Baton that StenoTran 1030 1 concluded that there is no need for further policy and 2 regulatory initiatives to support the independent 3 production sector. The study's conclusion is based on 4 the examination of the financial performance of the top 5 five publicly traded Canadian production companies in 6 comparison to the private television broadcasting 7 industry which found that the revenue for these five 8 companies is almost half the revenues of the entire 9 private TV broadcasting industry. 10 4605 While the revenue figures reported in 11 the study may be true, these five companies do not 12 speak to the overall health of the smaller and medium 13 size production companies which constitute the bulk of 14 the program production industry. 15 4606 In fact, with the recent round of 16 takeovers and consolidations -- 17 4607 MS BÉNARD: Mr. Elson, could you slow 18 down, please. Our translators are having trouble 19 following you. 20 4608 MR. ELSON: In fact, with the recent 21 round of takeovers and consolidations, we fear more 22 than ever that the smaller size producers and 23 production companies that we deal with, and who ensure 24 the diversity in programming we were talking about, 25 will not be able to continue to access funding to make StenoTran 1031 1 programming and get it broadcast. 2 4609 MS JACKSON: Now is not the time for 3 the government or the CRTC or broadcasters to back off 4 from their commitments to ensure that thee are 5 mechanisms to assist Canadian programming, and in 6 particular CIFVF programming, to get produced. 7 4610 We would like to say that while the 8 CRTC's decision in Public Notice 1997-98 was a welcome 9 one in that the Commission now allows up to 20 percent 10 of the monies for the creation of Canadian programming 11 to be directed by a broadcast distribution undertaking 12 (BDU) to new or existing independently-administered 13 funds, other than the CTF, that with the exception of 14 Fundy Communications and another DTH company that is in 15 discussions with us, not many of the BDUs have taken up 16 the option. 17 4611 We think that because the Commission 18 has placed such a strong emphasis on programming 19 category 7 and feeding the CTF and other funds to 20 finance this category, that funds like ours lose out. 21 4612 In conclusion, we would like to 22 reiterate our main points: 23 4613 (1) Educational and informational 24 programming should be considered as "underrepresented" 25 programming. StenoTran 1032 1 4614 (2) The CRTC should encourage BDUs 2 to contribute to independently-administered funds such 3 as the CIFVF. 4 4615 (3) The diversity of programming 5 produced by our 2,800 producers may not always be 6 exportable but is important to be produced and funded. 7 4616 The CIFVF is convinced that it is 8 doing its part to assist in the creation of programming 9 content that Canadians need and demand. To this end, 10 we remain active in looking for long-term solutions to 11 the challenge of assisting Canadian independent 12 producers to produce the best programming possible. 13 4617 We thank you for this opportunity and 14 will answer any questions. 15 4618 THE CHAIRPERSON: Thank you. 16 Commissioner Pennefather? 17 4619 COMMISSIONER PENNEFATHER: Good 18 morning. Thank you for that presentation, which raises 19 a number of very important points in relation to this 20 hearing and brings to the discussion the role of broad 21 sector of the production community. 22 4620 In that regard, I would like to 23 begin, if it is all right with you, to talk about the 24 fund itself and clarify a few points concerning the 25 kinds of productions that we are talking about here; StenoTran 1033 1 the fund and how it works; and then go on to discuss 2 some of the policy issues and your concerns as you have 3 raised them this morning and in your written 4 submission. 5 4621 As you explained, this fund emerged 6 from the Non Theatrical Production Fund, or the DSS 7 Fund, as it was once called. The term "non theatrical" 8 -- which you have reiterated again this morning -- 9 covers quite a wide range of programming. 10 4622 What I would like you to do, if you 11 would, is clarify what kinds of products you are 12 supporting, for what audiences, and how they are 13 distributed. 14 4623 The reason I want to do this is to be 15 very clear about the definition of "informational 16 educational programming" vis-à-vis, for example, 17 documentary, just to be clear on what it is we are 18 talking about. 19 4624 Could we start with that, and then we 20 will go on with some other questions on the nature of 21 the product you are dealing with through the fund. 22 4625 MS JACKSON: As you said, the Non 23 Theatrical Fund was created in 1988, had some ups and 24 downs, and eventually was rolled out to the private 25 sector in 1991 when the Canadian Independent Film and StenoTran 1034 1 Video Fund was established. 2 4626 It started out, as you stated, as a 3 non theatrical market fund, which was literally not 4 television and not commercial film for the theatres. 5 It was only for product designed for schools, 6 universities and public libraries. 7 4627 When the Independent Film and Video 8 Fund was established, life had evolved, things had 9 changed, technologies had changed, and it was decided 10 by our board of directors that the term "non 11 theatrical" was not entirely comprehensive and needed 12 to be expanded. 13 4628 To that end, it was expanded to 14 include not only -- all non-theatrical products go to 15 schools, universities and public libraries. But it has 16 been expanded to include educational and specialty 17 television primarily, the business area, home video, 18 community associations, social service agencies and 19 multimedia. 20 4629 As time has gone on, the definition 21 has become larger and larger. 22 4630 COMMISSIONER PENNEFATHER: Just 23 generally, where are these products distributed and how 24 are they distributed: through the television system or 25 direct to schools through video? StenoTran 1035 1 4631 How is that handled now? 2 4632 MR. ELSON: In a number of ways. For 3 a short answer, both. 4 4633 What has happened is with the 5 explosion of the specialty channels, there is an 6 increased demand. We clearly are seeing specialty as 7 being a new distribution vehicle for educational 8 materials. 9 4634 At the same time, the same products 10 can go to a specialty channel, they can go to schools, 11 they can be used within specific institutions. So it 12 very much depends on the product. 13 4635 But it can be a number of ways. It 14 can also be to a relatively small audience through 15 specialty. One of the things that is happening with 16 the exposure to specialty is that it can go on a 17 specialty channel to what we are clearly defining as 18 niche programming. Niche programming can be 10,000, 19 20,000 people, but it can reach them very easily 20 compared to old systems of distribution through 21 specialty. 22 4636 COMMISSIONER PENNEFATHER: We can say 23 that, though, generally about a lot of documentary 24 programming on air for niche audiences. What makes it 25 educational programming? StenoTran 1036 1 4637 MS JACKSON: I think educational 2 programming -- documentaries are documentaries, I 3 guess. 4 4638 Educational, for us, may be things 5 that don't have a definite point of view. For example, 6 "Paradigms of Performance" is for management training, 7 looking at concepts for management. I don't think you 8 could define that as a documentary. It is specifically 9 for training people in various sectors of businesses 10 primarily, but could be used in universities, et 11 cetera. 12 4639 COMMISSIONER PENNEFATHER: So the 13 "how to" as opposed to the 30-minute documentary. 14 4640 MS JACKSON: Yes, "how to's". 15 4641 COMMISSIONER PENNEFATHER: Which of 16 the two do you call the lifelong learning materials? 17 4642 MS JACKSON: I would include it all. 18 I think the documentaries inform us and enlighten us. 19 I think that educational programming does the same. 20 And informational programming, which we think is a 21 separate category which is not being dealt with -- 22 things like we assisted a program to be produced on 23 scams for senior citizens. I would say that is 24 information programming on how seniors could deal with 25 telemarketers, things that involve scamming. I would StenoTran 1037 1 say that is informational, and I would say that that is 2 also educational. 3 4643 COMMISSIONER PENNEFATHER: So that we 4 start defining clearly in terms of what is working out 5 there, what are the needs, and what the production 6 community you are really representing see as the bulk 7 of the work they are doing, in that regard, I assume 8 from your submission that you fund new media products. 9 4644 What proportion of the funding that 10 you are putting into products -- which averages about 11 $18,000 per project, I think -- is new media products? 12 4645 MS JACKSON: In our last round, we 13 had $500,000 for funding. We work by deadlines. We 14 received about 160 applications, and we allocated 15 $100,000 to new media. 16 4646 Because as we started the majority of 17 our board is focused on film and video -- although we 18 are trying to move into the area and help our producers 19 to do so -- we have limited resources and are spending 20 a much smaller amount. 21 4647 Our main focus has been film and 22 video, and we are spending a smaller amount on new 23 media. So $100,000 was spent of the $500,000 on new 24 media in the last round. 25 4648 COMMISSIONER PENNEFATHER: Is it your StenoTran 1038 1 observation that the independent production community 2 we are talking about here is in a position to really 3 provide the Canadian materials to the educational 4 systems, be they direct to schools, be they through the 5 Internet, be they through specialty television or 6 educational television? 7 4649 MR. ELSON: Yes, definitely. There 8 is an enormous capacity by small producers across the 9 country, a desire to produce programming. 10 4650 One of the things that perhaps is 11 very different in terms of CIFVF is that we represent 12 mainly small producers who are locally oriented. So 13 they will produce lots of programming this coming from 14 their communities. 15 4651 We are also very broadly based across 16 the country. 17 4652 In relation to your last question, I 18 think there is an enormous potential and desire to link 19 film and television programming to new media. We have 20 seen an enormous demand for that, and yet still to now 21 there are very limited funds to make that available for 22 these kinds of producers to produce that kind of 23 programming. 24 4653 But yes, definitely, to your 25 question. StenoTran 1039 1 4654 COMMISSIONER PENNEFATHER: What is 2 the relationship of the fund with the various 3 educational broadcasters, including Télé-Québec? 4 4655 MS JACKSON: I am not sure how you 5 are defining "relationship". 6 4656 In most of our projects I would say 7 that the educational broadcasters, particularly SCN, 8 put in a very small amount, but they are usually always 9 there. Vision Television is a very constant partner in 10 our projects. ACCESS and Knowledge Network are quite 11 often in our projects, for smaller amounts because they 12 obviously don't have the required resources. 13 4657 I would say that we have a very 14 dependent relationship with them. 15 4658 COMMISSIONER PENNEFATHER: In the 16 mix, you mentioned quite a few different co-financiers 17 and projects. 18 4659 Is the educational broadcaster a 19 major component vis-à-vis Telefilm, vis-à-vis CTF, as 20 we now call it, vis-à-vis others? Or does it vary? 21 1035 22 4660 MS JACKSON: I would say it does 23 vary, but they are usually always there. They are 24 usually in the position of the second window. As you 25 know, that's a very necessary role that they fulfil. StenoTran 1040 1 4661 COMMISSIONER PENNEFATHER: I should 2 say to you that when SCN was here, they claimed that 3 there were no funds coming from your fund into 4 Saskatchewan. I'm not saying you should answer that 5 now. It's just a question of perhaps explaining how, 6 since you are covering the country and you do call 7 yourselves in your paper or your written submission a 8 cultural institution in this country, how you deal with 9 this important but often challenging aspect of 10 distributing funds across the country. 11 4662 MS JACKSON: I think you have used 12 the right word, challenging. I think we often feel 13 that it's Jesus and the loaves of bread trying to make 14 things go and be duplicated as far as we can. It's a 15 very difficult situation. 16 4663 Since our inception in 1991, we have 17 received close to 1,700 applications. I would think we 18 probably received more applications than any other 19 funding agency on a per deadline basis. 20 4664 We have an earmarking or a targeting 21 system that we try and do. Up to 1996 it was based on 22 one fifth going to the west, one fifth to Ontario, one 23 fifth to Quebec, one fifth to the maritimes and one 24 fifth to projects of merit, which was fairly loose. 25 4665 In response to some of the prairie StenoTran 1041 1 provinces, we decided to try and revamp that. We took 2 the merit category of one fifth and now we spend one 3 fifth on the prairie provinces, which includes 4 Saskatchewan, Alberta and Manitoba. I have to tell you 5 in the last deadline we could only provide money with 6 our allocations to two projects from the prairies. 7 4666 COMMISSIONER PENNEFATHER: From the 8 prairies. 9 4667 MS JACKSON: To the prairies. 10 4668 COMMISSIONER PENNEFATHER: So that's 11 the three provinces. 12 4669 MS JACKSON: That's right. 13 4670 COMMISSIONER PENNEFATHER: Okay. On 14 that score, in your submission you note that government 15 funding of the CIFVF -- are you going to shorten that? 16 It's now down to CTF, so this is the CIFVF. You are 17 scheduled to have your funding terminate in March 1999, 18 I think. 19 4671 Your organization has taken on the 20 role of administering other private funds. I think 21 that's a point that is key to your submission too. The 22 funds are the Stentor New Media Fund, Funding 23 Communications Production Fund and Star Choice 24 Specialty Fund. 25 4672 If your funding is not extended past StenoTran 1042 1 March 1999, will the CIFVF be able to continue as an 2 organization on the basis of these new administrative 3 functions? 4 4673 MR. ELSON: We are making a major 5 effort to encourage government to continue funding and 6 increase funding. We feel that there's an enormous 7 demand. We compare our funding ratio to the other 8 major funding institutions, whether it's Telephone 9 Canada or Canada Council, and find that we are funding 10 one out of seven compared to one our of three 11 applications when our peer juries are indicating that 12 perhaps 67 per cent of the applications ought to be 13 funded. 14 4674 What we are finding is that we are 15 funding a much lower level in terms of in relationship 16 to the projects submitted than the other funds. We are 17 asking government, following the efforts that we made 18 in the last few years to find private sector funding, 19 to not only continue to fund, but increase funding. 20 4675 As well with that, we would ask the 21 Commission to encourage and promote the possibility 22 that the broadcast institution undertakings use the 20 23 per cent initiative that was allowed and perhaps even 24 increase that so that increased funding from private 25 sector sources will allow the fund to continue. StenoTran 1043 1 4676 COMMISSIONER PENNEFATHER: But should 2 the government funding not continue, do you think that 3 this function of administering the other funds will 4 work? 5 4677 MR. ELSON: Not unless through your 6 efforts and decisions on BDU's part to increase their 7 use of the 20 per cent initiative and your allowance 8 that the 5 per cent that's allowed for administration 9 be increased, no. That 5 per cent, for instance, on 10 the part of BDU's undertakings, if it's a small amount, 11 becomes not enough to hire a part time administrator. 12 4678 Clearly those are two areas if 13 government should not continue and increase funding 14 that we would need to see a large increase in to 15 continue. 16 4679 COMMISSIONER PENNEFATHER: So this 17 brings us to your recommendation in fact that benefits 18 packages for BDUs should continue to be a requirement 19 and should build on public notice 9798 which determined 20 that BDUs may allocate 20 per cent of the amounts for 21 the creation of Canadian programming to independently 22 administered production funds. 23 4680 Let's keep going on this point a 24 little bit longer. You raised it this morning as well. 25 If you could clarify or elaborate on this statement StenoTran 1044 1 that the 20 per cent initiative could be further 2 developed by the CRTC. Could you just explain that a 3 little bit more? 4 4681 MR. ELSON: One element that is very 5 clear in how funding has been encouraged through 6 various means is that there has been in the last few 7 years enormous emphasis on drama through regulation and 8 through orientation in terms of the funds. 9 4682 Whether it is the CTCPF, now the CTF, 10 or through the allocation of 20 per cent, 80 per cent, 11 we clearly think that in terms of production, both 12 documentary and educational information programs are 13 not only equally valid but play a role in terms about 14 quality and in terms of interest for the Canadian 15 viewers, that there has been a disproportionate 16 emphasis on drama. 17 4683 We would encourage you to think about 18 further promoting and encouraging the use of the 20 per 19 cent. One of the problems that has happened with the 20 CTF is it's just much simpler for BDUs to put all the 21 money there, not to use the 20 per cent initiative. I 22 would throw it to you to say what could be done in 23 terms of encouraging broadcast distribution 24 undertakings to fund a fund like ours through the 20 25 per cent initiative which would then balance the StenoTran 1045 1 funding that is going to drama. 2 4684 If you look at the CTF also within 3 that, 80 per cent of the funds of the CTF are 4 designated for drama, which means that the remaining 20 5 per cent covers documentary, children's programming and 6 variety. That is very limiting. 7 4685 COMMISSIONER PENNEFATHER: So you say 8 what you mean by further developed is that we find ways 9 to encourage this to happen, that funds go to other 10 funds, other kinds of funds. Any suggestions? Any 11 more specific suggestions in that regard in terms of 12 encouragement? You said that we should encourage. 13 4686 MS JACKSON: The only other thing 14 that I can add is while it's written in your public 15 notice, I'm not sure that that is enough endorsement 16 perhaps from the Commission. I mean, I guess we need 17 the stamp of Good Housekeeping in a way from you to 18 promote that and show the BDUs that in fact you do 19 actively support that option. 20 4687 COMMISSIONER PENNEFATHER: This 21 somewhat explains the reason for my questioning about 22 the kind of programming we are talking about because it 23 is important to understand that you are covering quite 24 a broad range of programming. I am assuming that you 25 are making this recommendation and that you are also StenoTran 1046 1 recommending that, for example, we revise the 2 definition of under-representing programming to include 3 educational and informational programming. 4 4688 That documentaries should be included 5 in under-represented programming; greater emphasis on 6 documentary programming, not only in their scheduling 7 but in treating them on a level playing field with 8 entertainment programming. 9 4689 In addition to your recommendation 10 vis-a-vis the 20 per cent, you are also looking at the 11 current policies and suggesting some change there. 12 4690 In the first instance, if we look at 13 the definition of under-represented programming, is 14 there not a danger of diluting the effectiveness of the 15 related regulatory provisions if virtually all types of 16 programming are called under-represented? 17 4691 MR. ELSON: It goes back to your 18 opening remarks, the definition of educational 19 informational. I mean I think you have to be very 20 careful about that. I think we can talk a little bit 21 more about that. 22 4692 One of the things we are looking at 23 is in terms of the kinds of proposals that are coming 24 to us. Remember, it's not the fund that decides the 25 programming, it's the producers and they come up with StenoTran 1047 1 ideas. They are looking at the marketplace and seeing 2 what's going on. 3 4693 We are getting a lot of what are 4 called segment informational programming, educational 5 material that is hosted, documentaries that are hosted, 6 things that do not qualify under Canadian Television 7 Fund definitions of documentary, for instance, and 8 series programming. 9 4694 A lot of this has been driven by 10 demand from specialty broadcasters. We have been 11 unable, except in exceptional cases, chiefly in 12 development, to respond to that need. We funded mainly 13 documentary, but we are seeing that the demand is there 14 and the producers coming up with those projects. 15 4695 What we are looking at, and I don't 16 know that I have specific examples, but Robin may be 17 able to add to that, is the kind of program where you 18 have a magazine educational program and we have 19 segments that are not eligible for our funding, but has 20 as well as documentary long term value that will have 21 long shelf life, that will have interest on a long term 22 basis, but can definitely meet a need for certain 23 educational needs and be broadcast on an education 24 broadcaster or specialty broadcaster. 25 4696 I agree with you, you have to be StenoTran 1048 1 careful of the definition. We are saying that kind of 2 programming needs to be supported and needs to be 3 produced by Canadian producers so that that need is met 4 in terms of what is being demanded and that we are 5 seeing long term what is going on in society keeps 6 holding from what we are seeing, that people are going 7 to be looking at a long term process of education and 8 that the educational broadcasters can be trying to meet 9 that need. 10 4697 It's going to be difficult to do so 11 with Canadian programming unless we find sources of 12 funding for it. If we don't, clearly it is going to be 13 met by other sources. That's true for educational 14 broadcasters. It's also true for schools' use in terms 15 of educational institutions or public health 16 institutions. 17 4698 We are saying yes, we need to change 18 things. We do not need to open up all the way, but we 19 need to come up with perhaps a new definition of 20 educational informational programming that has long 21 term value, that's not going to just have short term 22 use, and support that as well as other kinds of 23 programming like drama for Canadian producers to be 24 able to produce that on a competitive basis. 25 4699 COMMISSIONER PENNEFATHER: In StenoTran 1049 1 addition to that definition then, you addressed the 2 exhibition side in terms of documentary and you also 3 addressed the expenditure side, saying that the 4 regulatory emphasis in terms of stipulation on 5 expenditures for entertainment should be expanded to 6 include documentary. 7 4700 It has been suggested in today's 8 competitive and broadcasting environment that 9 expenditures requirements are no longer necessary. 10 What is your position on this issue? Do you think 11 expenditure requirements are still necessary? If they 12 were eliminated, are there other ways to promote the 13 production and exhibition of documentary programming? 14 4701 MR. ELSON: We would feel that 15 expenditure requirements are absolutely necessary. I 16 mean, history tells us that if they are not there, this 17 kind of programming will not be supported, especially 18 by private producers -- private broadcasters. 19 4702 We underline one element that we hope 20 will encourage that which is creating a level playing 21 field in terms of classifying documentary programming, 22 specifically for documentary programming in the 23 entertainment sector, so that we will get a 150 per 24 cent time credit which we would hope then would 25 encourage private broadcasters and broadcasters who are StenoTran 1050 1 not programming that kind of production as well as, if 2 you will, benefit those broadcasters who are already 3 doing so and, therefore, allow them to put more 4 resources into that area. 5 4703 It's twofold, if you will. It's both 6 by encouraging funding and at the same point 7 encouraging benefits by putting that in prime broadcast 8 time. I think they are both necessary. 9 4704 You asked the other question, what do 10 you do if you don't have that. I think it's a very 11 good question. I'm not sure that this kind of 12 programming, although we think we will reach audience 13 does reach audience, is exportable, travels perhaps 14 much better than drama, would get the first dollars if 15 there was an expenditure requirement. 16 4705 COMMISSIONER PENNEFATHER: You 17 yourself make the point about this programming travels 18 well, it's exportable. In fact, I think the gentleman 19 from ACCESS talked about important U.S. markets for the 20 educational programming they are producing. 21 Historically we know this has been the case. 22 4706 We are also entering into new 23 environment where there may be other vehicles such as 24 the Internet and the digital universe to assure market 25 for the educational product we are talking about, be it StenoTran 1051 1 a documentary, be it an educational CD, be it some 2 other form of producing a lifelong learning product. 3 4707 Are you saying there may be other 4 options besides spending requirements in broadcast 5 television? 6 4708 MR. ELSON: We are not seeing those 7 yet. I think those potential markets are there, but 8 they are still potential. I mean, the actual number of 9 these kinds of productions that see those kinds of 10 dollars related to their production costs is very low. 11 4709 Even with, you know, maximum export 12 we don't meet costs of production. I don't think 13 there's anything that is going to be even close to 14 that. What it is it becomes complementary and 15 encourages small production companies therefore to 16 continue to exist, to reinvest in new products, to 17 develop exports of Canadian programming to Canadian 18 values, but to think that that can replace expenditure 19 requirements I think is totally unrealistic. 20 4710 COMMISSIONER PENNEFATHER: I have a 21 question. I wasn't sure I understood a comment on page 22 16 of your written submission. If you could explain it 23 to me. It says to the effect that the definition of 24 peak viewing times should be redefined in a way that 25 reflects the evolving context of specialty services and StenoTran 1052 1 a broadcasting environment that is increasingly 2 providing services "on demand". 3 4711 Could you just explain that to me? 4 4712 MR. ELSON: I can start and Robin may 5 be able to continue. 6 4713 It has to do, I think, with the 7 broadcasting cycle, especially services, that the 8 programming is on, not just in peak viewing hours from 9 six to midnight, but on a 24 hour basis and that is 10 recycled at different times when people may be more 11 available to watch it. You may be reaching an audience 12 -- one of the things specialty broadcasters demand is 13 multiple if not unlimited broadcast rights compared to 14 the traditional broadcaster in the past who would say 15 I'm going to take three broadcasts in, you know -- 16 major conventional broadcasters still say three or four 17 broadcasts in a four year period. A specialty 18 broadcaster may broadcast 50 times in a five year 19 period or 20 times, depending on the broadcaster and 20 depending on their programming cycle. 21 4714 What you have done is change by 22 nature of what the specialty broadcasters are doing the 23 nature of prime time viewing. When people are 24 available, television is much more now providing it to 25 them at the hours they want, especially specialty StenoTran 1053 1 broadcasting, rather than defining the hours when 2 people have to watch. 3 4715 Is that clear? 4 4716 COMMISSIONER PENNEFATHER: I think 5 so. I just want to be sure that I understand. For 6 example, some of the conventional broadcasters have 7 argued for greater flexibility in their scheduling. 8 Are you saying you are comfortable with Canadian 9 programming being assessed as available to Canadians 10 throughout the broadcast day in terms of your kind of 11 product and your kind of audience. 12 4717 MR. ELSON: In terms of the 13 educational informational programming, yes, not 14 necessarily in terms of the documentary program. 15 There's an overlap. There's a difference between a 16 documentary and educational informational. 17 4718 COMMISSIONER PENNEFATHER: That's 18 what I was getting at at the beginning. 19 4719 MR. ELSON: Yes. 20 4720 COMMISSIONER PENNEFATHER: So when 21 you recommend documentary as being included in 22 under-represented, it is one thing. When you recommend 23 educational informational programming, it's another 24 thing. 25 4721 MR. ELSON: Well, documentary is StenoTran 1054 1 already in under-represented. It's just not 2 necessarily given priority in under-represented. What 3 we are saying very strongly is that educational 4 informational programming of a specific nature should 5 be added to the under-represented category. 6 4722 COMMISSIONER PENNEFATHER: This leads 7 me to ask you what you think of the CAB's 8 recommendation regarding the establishment of goals 9 with respect to viewing levels for Canadian 10 programming. What do you think of that recommendation? 11 What would be the impact on the kind of products we 12 have been talking about today and that you fund? 13 4723 MR. ELSON: The basic question is how 14 do you measure that and on what basis. I mean, that 15 gives you the answer. I mean I think very much how you 16 define the measurement of that is going to define the 17 answer you get. 18 4724 I have only been aware for a couple 19 of days since they presented their position on it, but 20 I, you know, find it very questionable. I find, you 21 know, how you measure audience difficult and on what 22 basis. One of the things that is very clear for us is 23 it's not just numbers, it's the impact of programming. 24 It's how viewers' lives are changed, how they are 25 empowered by programming and how people look at StenoTran 1055 1 programming, how long programming lasts. 2 4725 If you look at when the United States 3 or most recently, you know, certain videotapes were 4 submitted to, you know, to broadcast, I mean clearly 5 you can get a wide audience. You know, if there's a 6 major event, news event, you can get a wide audience. 7 4726 How you define audience and what an 8 audience means to us I think is very important. How 9 programming impacts on people's lives, how long it 10 lasts, you know, the influence of that programming are 11 other ways of measuring it. That's very difficult to 12 measure compared to pure numbers. 13 4727 Even when you are measuring pure 14 numbers, what those numbers mean and on what basis, you 15 know, how people are viewing, are they walking by a 16 television set that's open in a room. It makes me 17 question enormously that you could base programming 18 requirements on audience. 19 1055 20 4728 COMMISSIONER PENNEFATHER: Finally, I 21 think we did touch on the digital universe and its 22 impact on the kinds of programming we have been talking 23 about -- namely, educational, informational and 24 documentary. Do you have any further comments on the 25 opportunities that digital programming, digital StenoTran 1056 1 carriage offer to the community which you are dealing 2 with, both in terms of producers and in terms of 3 audiences or, as you call them, end users? 4 4729 MR. ELSON: I will speak a little bit 5 and I would like Robin to speak a little bit also. 6 4730 It is an enormous opportunity, but it 7 is also even more a challenge, The small producers 8 haven't really been included in this discussion very 9 much so far. The costs of going to high definition are 10 very significant. I don't think any small producers 11 are going to be doing that until clearly that is 12 established as the broadcast format and the demand is 13 there. I mean we don't even have a demand for 14 television for wide screen. You can't really produce 15 anything in 16 by 9 for Canadian broadcasters because 16 there is no outlet for it, chiefly not in terms of 17 major broadcasters, so we are all still producing it 4 18 by 3, even though there might be a demand 19 internationally for 16 by 9. 20 4731 What is very interesting I think for 21 the kinds of producers that the fund grants funding to 22 is the interrelationship between the potential in terms 23 of digital and all the kinds of information and 24 research that is accumulated in terms of educational, 25 informational and documentary programming that could be StenoTran 1057 1 made available by digital system. 2 4732 We have numerous producers wanting to 3 create programming related to the internet, related to 4 CDROMs based on this kind of film and television 5 production. You can imagine the kind of scenario we 6 were hearing just earlier about a digital system that 7 allowed people to access additional information on 8 specific topics that would give them access to 9 documentation immediately through a television system. 10 Clearly, that would be of great interest for the kind 11 of programming we are talking about. 12 4733 I don't think it is proven in the 13 immediate past in terms of the efforts to make 14 interactive programming, seen from a different point of 15 view in a drama program, maybe in a hockey game, but 16 even then it is not what viewers are really interested 17 in. But saying in this program there was this item and 18 I really needed to know more and I can just access it 19 very quickly and get further references and further 20 information and download it, either in a text format or 21 in a CDROM format or have it simultaneously, clearly 22 would be of great interest to the kind of programming 23 that the producers we represent -- the programming they 24 do. 25 4734 How you create the means for them to StenoTran 1058 1 do that is a good question. I think again that's a 2 funding question, the relationship between the funding 3 of new media which is already in place before the 4 digital system comes into effect and traditional film 5 and television programming is an area where it can be 6 helped immediately in terms of funding for new media. 7 So that when we have a digital system, if it allows for 8 that there can be a merging of those two. 9 4735 COMMISSIONER PENNEFATHER: Thank you. 10 4736 One last point before I leave you, 11 just a factual question and if you can answer it now 12 fine, if not, get back to me. I have noticed we have 13 talked and I have noticed in your submission that you 14 refer to the use of the fund by Canadian specialty 15 service. If you could give us an indication of 16 approximately how much money and/or how many programs 17 the CIFVF allocated to specialty services last year and 18 what proportion of your annual budget this funding 19 represents? 20 4737 MS JACKSON: I don't have those 21 figures with me. I would be pleased to provide them to 22 you at a later date. 23 4738 COMMISSIONER PENNEFATHER: Thank you. 24 4739 That completes my questions, Madam 25 Chair. StenoTran 1059 1 4740 THE CHAIRPERSON: Commissioner 2 Cardozo. 3 4741 COMMISSIONER CARDOZO: Thank you, 4 Madam Chair. 5 4742 I have one question I wanted to ask 6 about. It is regarding a comment in your oral 7 presentation, page 2, point No. 2, you say: 8 "...we are of the opinion the 9 Canadian content requirements 10 coupled with the variety of 11 funding programs available in 12 this country are an effective 13 means of ensuring that Canadian 14 television appropriately 15 reflects Canada's diversity." 16 4743 I wonder if you could tell us a 17 little more about that in terms of what drives you to 18 consider the issue of cultural diversity and whether 19 you have had to, or the different types of linguistic 20 diversity and other aspects that you have described in 21 that section and whether you have had to make any extra 22 efforts, any different types of outreach, whether you 23 have had to look at your funding criteria? I notice 24 that you have done stuff in various languages too, so 25 did that require a change at any point? StenoTran 1060 1 4744 MS JACKSON: There was no change 2 required. It came from the producers themselves. They 3 said they were going to do that. We considered it and 4 agreed that that was fine by us. 5 4745 I am not quite sure -- in the 6 discussion about diversity, I don't know if you have 7 had other previous people talk about this. I find the 8 whole question of diversity -- we tried to respond to 9 what we think diversity is. I am not sure we are all 10 talking about the same thing about diversity. I am a 11 little confused about is there an operating definition 12 of diversity? 13 4746 COMMISSIONER CARDOZO: There are a 14 lot of different things. I think we are talking on one 15 hand of the diversity of programming, which means a 16 different kind of format, diversity of music, different 17 kinds of genres. 18 4747 If one is talking about cultural 19 diversity, then I think you are talking about different 20 cultural diversities, such as the things you have 21 talked about here, a program in Spanish, a program 22 regarding Inuit people, so there are different aspects 23 of that. 24 4748 I am wondering in terms of the 25 programs that you supported, whether you are seeing the StenoTran 1061 1 various aspects of the cultural, racial, religious 2 diversity of the country. Are there producers coming 3 to you with those sorts of projects and are they 4 looking to you as a source of support? 5 4749 MS JACKSON: Yes, they are. Because 6 we represent -- we don't represent, we have so many 7 producers -- we are not an association, but because we 8 have so many clients that come to us for funding and 9 these people are spread across the country in large 10 centres, as well as small centres. It is Canadians 11 that are coming to us with production ideas. They are 12 not our ideas. I think I am continually amazed by the 13 type of projects that we are getting and the diversity 14 of them. 15 4750 We have no restriction on any subject 16 matter because it is all lifelong learning for us. Did 17 I answer the question? 18 4751 COMMISSIONER CARDOZO: Thank you. 19 4752 THE CHAIRPERSON: Ms Jackson, you 20 referred to the concern you have that not enough cable 21 operators take advantage of the flexibility they have 22 with regard to who they direct their fund money to, the 23 80/20. What have been your efforts or that of 24 producers to pressure or educate or request that 25 particular flexibility be taken advantage of, so that StenoTran 1062 1 organizations such as yours have the opportunity to 2 have more funds? 3 4753 MS JACKSON: Are you speaking in 4 general of what we have done? 5 4754 THE CHAIRPERSON: Yes, because you 6 say it's your view that distributors who may not be 7 aware or may not bother or what we said in the Public 8 Notice wasn't sufficient, we should make better efforts 9 to endorse that. So, I am curious to see what efforts 10 you have made or your clients have made vis-à-vis the 11 cable operators, so that more money is funnelled 12 towards organizations such as yours. 13 4755 MS JACKSON: We have approached a 14 number of the BDUs. We have been following the 15 wireless cable situation. We have approached various 16 companies, such as Alpha Star and we thought we had a 17 deal with them before they went bankrupt. 18 4756 We approached Power Tel. We had we 19 thought a deal with them, but they didn't get a 20 licence. 21 4757 We have approached Star Choice and we 22 are still in discussions with them and we are hopeful 23 we get a portion of their 20 per cent. It does not 24 appear that we will get it all. 25 4758 We have been following the LMCS StenoTran 1063 1 people and we have been courting them, if I can use 2 that crass word, but I think they are a bit way down 3 the road. 4 4759 We have written the Canadian Cable 5 Systems Alliance, which I believe is 80 or so 6 companies. We have been working with Fundy 7 Communications who has had the belief in us to put 8 their 20 per cent with us and we have been working with 9 and we have been working with them to approach some of 10 the individual cable operators. 11 4760 We have not made any attempts to the 12 larger cable operators because we feel that they 13 started the Cable Production Fund and that's sacrosanct 14 for them, that we could not -- it would be offensive to 15 approach them. 16 4761 THE CHAIRPERSON: That's interesting 17 because some of them operate regionally. It's 18 interesting to know that you have made these efforts. 19 You are not aware of what the producers themselves who 20 come to you for funds are doing because I would have 21 thought that even for the large cable operators that 22 the production industry in the region where they 23 operate could put some pressure on them in that regard 24 because your clients are across Canada. Correct? 25 4762 We have this morning a number of StenoTran 1064 1 organizations that are regionally based and the 2 producers they represent I suppose could exercise some 3 pressure. It's an interesting aspect of it. 4 4763 Once the Commission has decided that 5 it is a valuable thing to do to split it 80/20, when it 6 had started at 100 percent, beyond that I think the 7 industry itself and their representatives and their 8 organizations should put pressure on because we have 9 said that's what we thought was in the public interest, 10 so to speak, or in the interest of the industries 11 concerned. So then the ball is in the court of those 12 who would like to see these funds used in that fashion. 13 4764 MR. ELSON: If I can just add a 14 couple of items. I think in terms of the major cable 15 operators one of the problems is clear identification 16 and desire for identification with the Cable Production 17 Fund, now the CTF. 18 4765 The other element is even there there 19 is not enough money. So when that fund is being 20 drained on almost an immediate basis, it is difficult 21 for us to say, "take 20 per cent of it." 22 4766 But the other element I was -- 23 4767 THE CHAIRPERSON: It is, though, a 24 reallocation that you are saying would be -- so no 25 matter what the size of the money is, if it is not in StenoTran 1065 1 the fund but it is somewhere else, it doesn't matter 2 how many people line up for it, only 80 per cent of it 3 will disappear. 4 4768 MR. ELSON: But clearly it is going 5 to different kinds of productions. You have let them 6 know that you would like them to do that, but what we 7 are saying is we would like you to let them know that 8 much more clearly and more definitively, that there is 9 other areas of programming that this 20 per cent could 10 go to and that it ought to go there. 11 4769 THE CHAIRPERSON: It is good to know 12 that organizations such as yours are putting some 13 pressure on them or reminding them that that's a 14 flexibility that has been endorsed. 15 4770 Counsel. 16 4771 MR. BLAIS: As the Commission moves 17 forward in this process and considers various 18 submissions, it might need to have a sense of 19 definitions. I was wondering whether when it comes to 20 documentaries you generally accept the definition used 21 by the Telefilm CTCPF? 22 4772 MS JACKSON: Yes, we do accept it. 23 4773 MR. BLAIS: You have used the phrase 24 "educational/informational programming." First of all, 25 is that the same thing to you and, if it isn't, would StenoTran 1066 1 it be possible for you to give us a sense of a 2 definition of that category of programming? It doesn't 3 have to be today, but if you could get that on the 4 record by the 15th of October we would appreciate that. 5 4774 MS JACKSON: Yes, we would be pleased 6 to do that. 7 4775 MR. BLAIS: Thank you. 8 4776 Those are my questions. 9 4777 THE CHAIRPERSON: Thank you. 10 4778 Thank you very much for appearing 11 this morning. That was most interesting. 12 4779 We will now take a well needed and 13 well-deserved 15-minute break. We will be back at 25 14 minutes after eleven. 15 4780 Thank you. 16 --- Short recess at 1110 / Courte suspension à 1110 17 --- Upon resuming at 1130 / Reprise à 1130 18 4781 THE CHAIRPERSON: Good morning. 19 4782 We apologize for the delay. 20 Apparently there was a bee in my microphone that was 21 buzzing. So, we are back now and you may proceed when 22 you are ready. 23 4783 Perhaps Madam Secretary should 24 officially call you for the record, excuse me. 25 4784 MS PÉNARD: Thank you, Madam Chair. StenoTran 1067 1 4785 The next presentation is by Manitoba 2 Film & Sound. I would invite Ms Vivier to introduce 3 her colleague. 4 PRESENTATION / PRÉSENTATION 5 4786 MS VIVIER: Thank you. 6 4787 Good morning, Madam Chair, members of 7 the Commission and staff. 8 4788 We are very pleased to appear before 9 you today representing Manitoba Film & Sound Recording 10 Development Corporation. My name is Carole Vivier and 11 I am the President and CEO of Manitoba Film & Sound. 12 With me today is Susan Brinton, who is a western based 13 media consultant with many years' experience in the 14 western Canadian broadcasting and production 15 industries. 16 4789 Manitoba Film & Sound is the 17 provincial funding agency whose mandate is to develop 18 the infrastructure and the promotion and marketing of 19 Manitoba's film, television and sound recording 20 industries. We are funded by the provincial Department 21 of Culture, Heritage and Citizenship. 22 4790 Our purpose in appearing before you 23 today is to elaborate on our written brief. We wish to 24 address issues relating to access to screen time and 25 diversity of programming in the Canadian broadcasting StenoTran 1068 1 system. Specifically, we are concerned about regional 2 diversity as it pertains to the western provinces. 3 While Manitoba Film & Sound is a provincial agency, we 4 are here to discuss the broader issues as they relate 5 to both Manitoba and the western provinces as a region. 6 4791 We support the Commission's goals for 7 this Television Policy Review Hearing, specifically: 8 to further the development of a strong and viable 9 programming industry; to ensure that Canadians receive 10 a wide range of attractive and distinctive Canadian 11 program choices; to ensure that the Canadian 12 broadcasting system meets the needs of Canadian viewers 13 and reflects their values; and to implement the public 14 interest objectives of the Broadcasting Act. 15 4792 It is our position that in order to 16 meet these goals, the Canadian broadcasting system must 17 continue to incorporate the unique contributions of the 18 western based production community. Regionally 19 produced Canadian-content programming is a key 20 component to ensuring that Canadians receive a wide 21 range of distinctive Canadian programming that reflects 22 regional perspectives and values, thereby supporting 23 the public interest objectives of the Act. 24 4793 For the purposes of this discussion, 25 when we refer to western regional production we mean StenoTran 1069 1 English language Canadian content television 2 programming produced and developed by western 3 independent producers. 4 4794 Additionally, we wish to discuss the 5 implications of a recently released Department of 6 Canadian Heritage, from the Prairies and Northwest 7 Territories Region, document entitled "Western 8 Television Production Study. I will now ask Susan to 9 elaborate on the conclusions of the study as she was 10 the consultant commissioned by Canadian Heritage, 11 Prairie Region, to undertake the study. 12 4795 MS BRINTON: Thank you. 13 4796 Attached to our oral brief are 14 highlights from "Western Television Production Study." 15 The basis for the study was to determine whether 16 western independently produced Canadian content 17 television programming was on the decline. The source 18 for this study was Telefilm Canada and is based on 19 Canadian-content projects that received Telefilm 20 financing from 1993-94 to fiscal 1997-98. The study 21 concludes that indeed in the west, Canadian content 22 independent television production has declined over the 23 past five years, and that this is a direct result of 24 the decrease in conventional broadcaster licensing of 25 western Canadian-content productions. StenoTran 1070 1 4797 Some of the specific findings 2 regarding broadcaster licensing in the west are as 3 follows: 4 4798 CBC's financing of western Canadian 5 independent television production dropped 51 per cent 6 between 1993-94 and 1997-98, while dropping only 25 per 7 cent for their total English language Canadian content 8 independent production across the same five years. 9 4799 Total private conventional 10 broadcaster financing of western independent production 11 dropped 32 per cent from 1993-94 to 1997-98, while 12 decreasing less than 4 per cent for total Canadian 13 English language independent television production 14 during the same period. 15 4800 Of the private broadcasters, CTV and 16 affiliates in 1997-98 were financing Canadian-content 17 production in the west at almost exactly the same 18 levels as five years previously. However, in the 19 middle years of the study, from 1994-95 to 1996-97, 20 their numbers dropped to less than half their levels. 21 4801 CanWest Global posted a steady 22 decline in their Canadian-content independent 23 production financing in the west over the five years of 24 the study, to hit zero by 1997-98. 25 4802 The Other Private broadcaster StenoTran 1071 1 category in the study showed an increase in independent 2 production financing over the four years from 1993-94 3 to 1996-97, but again with a drop in 1997-98. The 4 majority of this broadcaster financing was attributable 5 to WIC Western International Communications. 6 4803 The pay and specialty broadcasters 7 significantly increased their financing of western 8 television from the 1993-94 to 1997-98 period, 9 primarily in documentary and children's production. 10 4804 By genre, western Canadian prime time 11 drama production budgets licensed by conventional 12 broadcasters showed the most significant decrease of 13 almost $11 million, or more than 20 per cent, from 14 1993-94 to 1997-98. In comparison, the numbers for 15 Canadian prime time English language drama production 16 increased 36 per cent. Notably, documentary and 17 children's programming triggered by pay and specialty 18 broadcasters increased significantly across the five 19 years. 20 1135 21 4805 The study concludes: 22 4806 One, broadcaster licence fees are the 23 key to triggering western Canadian content independent 24 television production, and subsequent access to federal 25 funding such as Telefilm Canada and the Canadian StenoTran 1072 1 Television Fund. In general, the overall drop in 2 conventional broadcaster financing of western Canadian 3 content production from 1993-94 to 1997-98 resulted in 4 a corresponding decrease in total western production 5 levels, especially in prime time drama production. 6 4807 Overall, with the pending breakup of 7 WIC as a western conventional broadcaster, the future 8 of western Canadian content television production, and 9 particularly prime time drama production, is 10 predominantly in the hands of the CBC, CanWest Global 11 and CTV/Baton. Unless these conventional broadcasters 12 make ongoing commitments to western Canadian content 13 production, total western production levels may well 14 continue to decline. 15 4808 Carole. 16 4809 MS VIVIER: As the Broadcasting Act 17 states, programming provided by the Canadian 18 broadcasting system should "be drawn from local, 19 regional, national and international sources" and 20 should "encourage the development of Canadian 21 expression by providing a wide range of programming 22 that reflects Canadian attitudes, opinions, ideas, 23 values and artistic creativity... (and) through its 24 programming and the employment opportunities arising 25 out of its operations, serve the needs and interests, StenoTran 1073 1 and reflect the circumstances and aspirations, of 2 Canadian men, women and children..." 3 4810 Regional production and the 4 development of western Canadian stories for Canadian 5 television screens is an inherent public interest 6 objective of the Broadcasting Act. The Commission has 7 an obligation to consider that diversity not only 8 includes issues revolving around linguistic duality and 9 the multiracial and multicultural nature of Canadian 10 society, but its regional make-up as well. Therefore, 11 the Commission needs to recognize the importance of 12 regional diversity in Canadian television programming. 13 4811 We feel this also includes an 14 obligation by all broadcasters, and particularly the 15 CBC as our public broadcaster, to participate in the 16 development of emerging talent, including writers, 17 actors, directors and producers in the west, and to 18 offer existing western talent the opportunity to 19 continue to grow within the Canadian broadcasting 20 system. 21 4812 Western Canadian television 22 production has benefited over the past number of years 23 from the various transfer of ownership benefits and new 24 licensing commitments of private conventional 25 broadcasters in the west. Without these commitments it StenoTran 1074 1 has become evident that private broadcasters have less 2 incentive to develop and produce in western Canada. 3 4813 CanWest Global in the early 1990s had 4 a benefit commitment to produce Canadian content 5 programming in the west. This commitment expired by 6 the mid-1990s and, as a result, CanWest Global 7 triggered zero Canadian content independent production 8 in the west last year. 9 4814 Baton as a station group triggered 10 very little independent production in western Canada 11 until the Commission awarded Baton the much-coveted new 12 Vancouver licence. 13 4815 Craig Broadcasting, until it was 14 awarded the Alberta licences, triggered minimal 15 production in the west, including Manitoba, its home 16 province. 17 4816 To quote one broadcaster on the first 18 day of this hearing, "If it gets measured, it gets 19 done". We would counter, "If it doesn't get measured, 20 it doesn't get done". 21 4817 In particular in Manitoba, I find it 22 interesting to note that, although the head offices of 23 CanWest Global and Craig Broadcasting are located in 24 Manitoba, over the past few years Manitoba producers 25 have failed to significantly benefit from this. StenoTran 1075 1 Additionally, the CTV affiliate in Winnipeg is not 2 owned by Baton but by Moffat Communications, and 3 therefore Manitoba has not benefitted from the 4 Baton/CTV commitments. In fact, Baton's flagship prime 5 time Canadian drama series "Cold Squad" is not 6 televised in the Winnipeg market. 7 4818 CBC has also not been active player, 8 evidenced by the fact that they only licensed one low- 9 budget documentary in Manitoba last year. 10 4819 Manitoba-based companies have been 11 forced to look to foreign service production to 12 survive. I am certain Manitoba producers would like 13 more opportunities to tell their stories to Canadian 14 audiences. 15 4820 In conclusion, our overall 16 recommendation is that the Commission must include 17 requirements for all broadcasters, and specifically 18 conventional broadcasters, to commit to ongoing 19 regional development and production, and that these 20 commitments should be reviewed at the corporate 21 licensing renewal level. The future of the western 22 independent production community depends on it. How do 23 broadcasters know they are getting the best if they are 24 not actively looking for the best in Canadian 25 programming by spending time and resources in the StenoTran 1076 1 regions and in particular western Canada? 2 4821 Thank you for the opportunity to 3 present our views, and we are now prepared to answer 4 any questions that you may have. 5 4822 Thank you. 6 4823 THE CHAIRPERSON: Thank you, ladies. 7 4824 Commissioner Wilson. 8 4825 COMMISSIONER WILSON: Good morning. 9 4826 I wonder if, before I start asking 10 some specific questions, you could just tell me a 11 little bit more about the fund, how much money is in 12 it, how do producers access it, how long has it been -- 13 I think you said it has been in existence since 1987. 14 Is that when it started? 15 4827 MS VIVIER: The provincial fund in 16 Manitoba? 17 4828 COMMISSIONER WILSON: The provincial 18 fund, yes. 19 4829 MS VIVIER: Our funds have been -- 20 1985-86 was the first fiscal year. We have equity 21 money, we have development money and we now also have a 22 tax credit, and we have a special loan program, which 23 really acts as an interim financing fund. 24 4830 It is for any genre of production, 25 whether it be feature films, television movies, StenoTran 1077 1 documentaries, children's and, like most funds in 2 Canada, including Telefilm, a critical trigger is a 3 broadcaster. It is investment money, and there is no 4 point in investing if they don't have a market or 5 viewership. So the broadcasters are a very key 6 component to this. 7 4831 What I have been noticing over the 8 last couple of years is the drop-off of Telefilm and 9 the CTCPF money that we are accessing. And it is not 10 that Telefilm is turning down projects, or the CTCPF -- 11 or, I guess, CTF Fund, I don't know; all these 12 acronyms -- but that in fact the broadcasters are not 13 being triggered. Hence our presentation today. 14 4832 COMMISSIONER WILSON: How much is 15 your fund worth? 16 4833 MS VIVIER: The tax credit this year 17 is probably going to represent about $4 million. We 18 have $1 million interim loan and we have $1.2 million 19 for equity on an annual basis. 20 4834 COMMISSIONER WILSON: Great. 21 4835 Do you work with the Canadian 22 Television Fund? Are you in contact with them? Do you 23 monitor their activities? I am just wondering if there 24 is any kind of relationship between the provincial 25 funding organizations and the Canadian Television Fund. StenoTran 1078 1 4836 MS VIVIER: Yes, absolutely. 2 Actually, the Canadian provincial agencies, we are an 3 association and we have regular meetings with the Cable 4 Fund and the Canadian Television Fund and with 5 Telefilm, and these are concerns across the country, 6 actually, the access to funding. 7 4837 We understand the funding is limited, 8 there is never going to be enough money to go around 9 for everybody, and people are doing other things to do 10 production, whether it be service production or co- 11 productions. I just have to come back to, if I feel 12 that broadcasters -- even us, as the Canadian viewer, 13 are not out actively looking into the independent 14 community across the country, looking for the best. 15 How do we know we are getting it on television? And I 16 feel the Canadian content funds and broadcasters have a 17 responsibility to reflect the country. 18 4838 COMMISSIONER WILSON: In your 19 submission, on pages 1 and 2 of your written 20 submission, you talk about the development of the 21 Manitoba independent production sector and state that 22 it was significantly stimulated by various transfer of 23 ownership benefits put forward by private broadcasters 24 in the early 1990s. You talk, in the written 25 submission and again today in your oral submission, StenoTran 1079 1 about the noticeable drop in levels of regionally 2 developed and produced television production activity 3 across the west and about the fact that the benefits 4 expire mid-nineties, and some of them coming up. 5 4839 Are you suggesting that -- well, I 6 guess you are suggesting that there be some kind of 7 extended expenditure requirement for these broadcasters 8 with a specific regional focus. 9 4840 MS VIVIER: I don't know that I am 10 actually asking for an expenditure. Again, I think 11 they have to be accountable that they are responding to 12 the regions of this country, that they are not just 13 working in certain sectors and that true, honest effort 14 is made to go out and meet the creative talent in the 15 country to again maintain that they are getting the 16 best production. 17 4841 So, you know, I don't want to be 18 politically correct and say they have to do, you know, 19 a television movie here and a television movie there. 20 It really should be based on the quality of the 21 project, but you don't know that you are getting the 22 quality of projects unless you are actively searching. 23 4842 COMMISSIONER WILSON: I am just 24 wondering what you think the best way is of encouraging 25 them to do that. Is it through some regulatory StenoTran 1080 1 mechanism or -- 2 4843 MS VIVIER: I think, when they come 3 back up for renewals, it is really -- look at a history 4 of what they have done in the time coming up and after 5 their commitments expired. I think that is quite 6 telling. Our experience is they performed when the 7 commitment was there, and when the commitment expired 8 it dropped off. 9 4844 So I think the CRTC, the Commission, 10 can be looking at that at time of renewals. 11 4845 MS BRINTON: Just in general, 12 underlying the whole submission, it is not that we are 13 requiring or asking the CRTC to do specific regulatory 14 incentives in terms of spending or hours or allocations 15 to the regions. What we are asking for is, the CRTC is 16 in a position where they can make it clear to the 17 broadcasters that one of the things they will be 18 looking at at licence renewals, and particularly if you 19 move to group licensing renewals, is that regional 20 production and diversity in their programming and the 21 programming that they license from the independent 22 production sector will be reflective of the country, it 23 will not all be based in one region or the other. 24 4846 So once broadcasters I think are 25 served notice that they will be accountable at some StenoTran 1081 1 point in the renewal process in terms of regional 2 production, I think they will then make an effort to go 3 forward in future endeavours to ensure that they have a 4 regional balance. 5 4847 COMMISSIONER WILSON: Some of the 6 educational broadcasters that we have heard from this 7 week have suggested that a portion of the Canadian 8 Television Fund be allocated for the educational 9 programming genre. I think you also talked about 10 documentaries in your submission. I think they also 11 suggested that there be some regional requirements 12 attached to that. 13 4848 I am just wondering -- I would just 14 like to pick your brains a bit -- what your views are 15 on that approach. Do you think that that would help 16 your goals if there were a portion of the fund that was 17 set aside specifically for regional programming? 18 4849 MS VIVIER: I think objectives and 19 targets should definitely be set by the funds, whether 20 it be Telefilm or the Canadian Television Fund, for 21 outside of the centre of Canada for production. I 22 don't think that's an unreasonable thing to expect. 23 4850 I think they attempt to do that 24 somewhat now. Again, it is not so much their funding, 25 it is the difficulty in triggering the broadcasting to StenoTran 1082 1 get their funding in the first place. It is hard to 2 measure without having the triggers. 3 4851 COMMISSIONER WILSON: I guess the 4 next thing that I want to do with you is just sort of 5 explore the whole notion of regional, because you are 6 from Manitoba Film & Sound, we will talk to Alberta 7 later today, and then the study that you submitted as 8 part of your submission is a regional study, the 9 Prairies and the Northwest Territories. 10 4852 I am wondering if you think that 11 taking a regional approach -- I am sort of thinking 12 this through as I go. Should we be looking at taking a 13 regional approach where we would take into 14 consideration the level of productions that are done in 15 a region like Manitoba, Saskatchewan, Alberta and the 16 Northwest Territories? 17 4853 We have had a couple of definitions 18 of "region" offered to us. I think the Friends of 19 Canadian Broadcasting suggested that eastern Ontario 20 was a region and the Golden Horseshoe is a region. 21 Then we look to you, and three provinces and a 22 territory are a region. 23 4854 What is going to help us decide how 24 much should go where? 25 4855 MS BRINTON: Just for the record, the StenoTran 1083 1 study itself, although it was triggered by the Prairies 2 and Northwest Territories Region of the Department of 3 Canadian Heritage, covers the four western provinces 4 only: British Columbia, Alberta, Manitoba and 5 Saskatchewan, all four western provinces. For the 6 purposes of this debate, we are discussing the four 7 western provinces as a region. 8 4856 Additionally is a comment I think -- 9 I mean, you can split hairs infinitely in terms of what 10 is a region and what isn't, but I think there is a lot 11 of logic in terms of looking at the west as a region. 12 It is historically a region. So I think there is 13 validity in determining that there is a difference of 14 opinion that exists in the west versus central Canada 15 versus eastern Canada. 16 4857 I don't think we are advocating here 17 that you split Manitoba, Saskatchewan, Alberta and 18 British Columbia separately as little mini regions 19 within that. We just have the position that, overall, 20 we would like to see the Commission include regional 21 diversity as a component of diversity in the Canadian 22 broadcasting system and that at some point broadcasters 23 should be made accountable for their regional 24 diversity. 25 4858 We are not advocating it only has to StenoTran 1084 1 be the west; it is just we don't want to see, and 2 particularly in the study, prime time drama produced 3 only out of central Ontario or only where broadcasters 4 have conditions of licence to do that kind of drama. 5 We would like to see a little more balanced approach by 6 broadcasters in terms of how they reflect Canadians to 7 themselves, especially the larger multistation 8 ownership groups; in fact you have two private sector 9 networks now that should be expected to rise to that 10 challenge. 11 4859 COMMISSIONER WILSON: When you were 12 doing the study, did you disaggregate the numbers? Did 13 you go province by province? Because, of course, there 14 is a huge level of production in British Columbia which 15 would skew the figures away from the results in the 16 other three provinces. 17 4860 MS BRINTON: Absolutely. There were 18 a couple of interesting dynamics in the study. The 19 overall first part of the study was to look at the west 20 as a group in comparison to Canada, and the first 21 couple of charts that are attached to the oral 22 presentation show the west as a percentage or Canada. 23 4861 The second part of the study was to 24 simply look at the west as a component and say, okay, 25 in western Canada, look at the genres by drama, StenoTran 1085 1 documentation, music, variety and children's see where 2 the production is falling off, and also to look at it 3 by province, which province is benefitting, which one 4 isn't. 5 4862 In terms of provincial requirements, 6 British Columbia started at a high in 1993-1994, 7 dropped enormously during the middle years, and at the 8 end, in 1997-98, reached another plateau. That plateau 9 is directly attributable to Baton having the new 10 licence in Vancouver and the production of "Cold Squad" 11 there. 12 4863 Alberta, with the demise of the MPDC 13 a few years ago, their production levels went straight 14 down the tubes. They lost "North of 60" and they lost 15 "Jake and the Kid", two big prime time drama series. 16 So they went significantly down. 17 4864 Manitoba and Saskatchewan both 18 operated at a level of less than $10 million, and it 19 was very sporadic. But neither one of them have had a 20 significant prime time drama series produced in their 21 province, and that has a tendency to keep their numbers 22 down. It was one-offs or children's series or that 23 kind of thing. 24 4865 So, individually, those are how the 25 provinces kind of stack up. StenoTran 1086 1 4866 The private broadcasters as well as a 2 group skewed differently. CTV did a loop like this at 3 the beginning of 1993-94, primarily the CTV affiliates 4 in Alberta, Electrohome and various assorted 5 ownerships, during that time period up, before they 6 were ultimately Baton. 7 4867 So the independent CTV affiliates in 8 Alberta played a larger role at the beginning and 9 dropped off. Baton had no significant involvement in 10 the west again until 1997-98 with the development from 11 the Vancouver station. 12 4868 CanWest Global, with their conditions 13 of licence in 1993-94, primarily their Vancouver 14 station, had a production level that started high and 15 then dropped to zero by 1997-98. 16 4869 The private broadcasters, the other 17 category, the general one, kind of did a blip in the 18 middle, and that was primarily WIC and probably 19 attributable a bit to the problems that they had in the 20 middle years of the study, so they went like this. 21 4870 So overall the private broadcaster 22 category is flat. While they increased overall in 23 Canada in their spending, it stayed flat as a total 24 category of conventional broadcasters across the 25 Prairies. But, if you look at them individually, some StenoTran 1087 1 went up, some went down and some dipped in the middle 2 just to make it flat. 3 4871 Is that clear? Have I confused the 4 issue? I would be happy to answer written questions to 5 this afterwards. 6 4872 COMMISSIONER WILSON: Could you file 7 a copy of the entire study with all of the 8 disaggregated numbers? 9 4873 MS BRINTON: Absolutely, yes. 10 4874 COMMISSIONER WILSON: That would 11 probably help. 12 4875 MS BRINTON: Okay. 13 4876 COMMISSIONER WILSON: That's great. 14 4877 I want to ask you a couple of 15 questions, actually, with respect to -- I don't know if 16 you have read the Alberta Motion Picture Industry 17 Association's paper, but they have a suggestion here 18 that says: 19 "We recommend that regional 20 productions be given a 50 per 21 cent bonus when the CRTC 22 calculates the hours of Canadian 23 programming in the under- 24 represented categories 25 broadcasted by a Canadian StenoTran 1088 1 broadcaster towards a condition 2 of licence." (As read) 3 4878 Do you think that would be an 4 effective mechanism for triggering more regional 5 production? 6 4879 MS BRINTON: I think it would be 7 useful. Certainly, anything that provides an incentive 8 makes a difference. So 150 per cent credit regional 9 component -- I know Great North Productions, who is 10 coming up before you towards the end of the hearing, 11 has offered a kind of regional 50 per cent credit 12 within the 150 per cent -- all these percentages 13 rolling. But I think that anything that provides an 14 incentive to broadcasters to increase or at least to 15 look at the regions as a viable source of programming 16 is useful. 17 1155 18 4880 COMMISSIONER WILSON: I think those 19 are all of my questions for you this morning. I don't 20 know if any of my colleagues have questions. 21 4881 THE CHAIRPERSON: Commissioner 22 Cardozo? 23 4882 COMMISSIONER CARDOZO: Thanks very 24 much, Madam Chair. 25 4883 Thank you very much for your StenoTran 1089 1 presentation. The message you bring about regional 2 diversity and seeing more of the regions on our screen 3 is one that we have heard quite a bit about. So, you 4 are in a lot of company and we are hearing the message 5 quite clearly. 6 4884 Commissioner Wylie and myself were at 7 the round table in Winnipeg in June and certainly heard 8 the message from your fellow citizens there, as we have 9 elsewhere. Earlier this week we heard from 10 representatives from Saskatchewan and British Columbia 11 as well on that, so I think we are hearing quite well 12 and I guess what we are looking for is what do we do 13 about it. We appreciate some of the suggestions you 14 have made in terms of goals and objectives, providing 15 incentives, if you don't count it, it won't happen, the 16 Commission should require it, and so forth. 17 4885 But I do want to ask you about the 18 issues of cultural diversity as well with regards to 19 Manitoba and ask for some sense about whether this sort 20 of approach has worked looking at diversity. I am 21 thinking of the population of Manitoba, which probably 22 has as dynamic a diversity as any in this country where 23 you have a significant francophone population, you have 24 a significant aboriginal population especially growing 25 in the cities and you have a multicultural population StenoTran 1090 1 that goes back a century, as well as with older groups, 2 like people from Ukraine and Germany, and then newer 3 groups like Filipinos in more recent times. 4 4886 Have you looked at how you reflect 5 those aspects of diversity, francophones, aboriginal 6 people and other ethnic and cultural diversity, and 7 have you done any setting of targets or counting of how 8 much you have done? 9 4887 MS VIVIER: It's an interesting 10 question. We are not the producers, so again we rely 11 on the production community, but we have done outreach 12 programs. We do work with aboriginal filmmakers, 13 francophone filmmakers, and I think the programming 14 that has been produced in Manitoba has been quite 15 diverse. It's interesting that you are raising the 16 francophone filmmakers because they have difficulty, 17 which will come up at the CBC's renewal, I believe, 18 with Radio-Canada in getting licences for their French- 19 language projects. That's another hearing, but that is 20 an issue for them as well. 21 4888 We are currently undertaking a 22 francophone documentary series and we have done a few 23 co-productions with Quebec. So, yes, that's very 24 important. We have other facilities in Winnipeg, the 25 Winnipeg Film Group and Video Pool. The National StenoTran 1091 1 Screen Institute has now emerged into Winnipeg -- 2 expanded into Winnipeg as well and through their 3 student programs and even drama prize, again those are 4 opportunities to reach into the more diverse 5 communities to have an entry level in to start to 6 develop a program and we are also, through the NCI, 7 looking to work with schools more to also develop the 8 talent. 9 4889 COMMISSIONER CARDOZO: So, in terms 10 of outreach, you are going out and talking to fledgling 11 producers and that type of thing? 12 4890 MR. VIVIER: Yes, we do hold forums 13 and the Producers Association also does a lot of that 14 themselves, MMPIA and the National Screen Institute. 15 It's coming from various directions, but we do attend 16 the college when they have the high school -- what do 17 they call that -- the school week in the winter for 18 kids to look for different careers. We do attend that 19 and make sure our information is getting out there as 20 well. 21 4891 COMMISSIONER CARDOZO: The projects 22 that you fund there, they are eligible for CTF funding 23 as well? 24 4892 MS VIVIER: Yes. 25 4893 COMMISSIONER CARDOZO: Are you aware StenoTran 1092 1 of the aboriginal program within CTF? 2 4894 MS VIVIER: Yes, I am. 3 4895 COMMISSIONER CARDOZO: I believe they 4 set aside $1 million. 5 4896 MS VIVIER: Yes. 6 4897 COMMISSIONER CARDOZO: Do you know if 7 any of your recipients have been able to access that 8 fund? 9 4898 MS VIVIER: We have one project right 10 now which we are in development with that should be 11 able to move on and access that. So, we are tracking 12 right now. 13 4899 COMMISSIONER CARDOZO: Okay, thanks 14 very much. 15 4900 MS VIVIER: Thank you. 16 4901 COMMISSIONER CARDOZO: Thank you, 17 Madam Chair. 18 4902 THE CHAIRPERSON: Thank you very much 19 and we hope you have a good trip back. 20 4903 Madam Secretary, would you invite the 21 next participant, please? 22 4904 MS BÉNARD: Thank you, Madam Chair. 23 The next presentation will be by Alberta Motion Picture 24 Industries Association and I would invite them to come 25 forward. StenoTran 1093 1 4905 THE CHAIRPERSON: Good morning, Ms 2 Edwards. Go ahead when you are ready. 3 PRESENTATION / PRÉSENTATION 4 4906 MS EDWARDS: Good morning, Madam 5 Chair, Commissioners, ladies and gentlemen. I would 6 like to start with a little anecdote for you. Late one 7 winter's evening last year when the big Canada-Czech 8 hockey game was being played, my teenage son came down 9 and approached me and asked to stay up to watch the 10 game on television. I am a mom, so I reminded him that 11 school was on in the morning and suggested that he 12 should get some sleep. But I turned on the set and I 13 settled in upstairs to watch the game. 14 4907 When Canada scored the tying goal 15 late in the third period, I let out a whoop and somehow 16 in the back of my head I had this niggling mother's 17 instinct and I thought I had better check on my boy 18 downstairs. Sure enough, there was a light shining 19 from underneath his door and I could hear the 20 television. I opened the door and, to my surprise, 21 there he was doing the dance of joy wrapped in the 22 Canadian flag. I looked at him and said, "Matt, what 23 are you doing?" He said, "Mom, I am proud to be a 24 Canadian." 25 4908 I am also very proud to be a Canadian StenoTran 1094 1 and I appear before you today as an independent 2 producer to represent the Alberta Motion Picture 3 Industry Association. AMPIA has represented 4 independent producers in this province for the past 26 5 years. The mandate of the Association is to ensure the 6 growth and development of the independent production 7 industry. Central to this mandate is maintaining an 8 environment in which producers can initiate, develop 9 and produce films over which they have creative 10 control. 11 4909 AMPIA membership eligibility has now 12 been widened to include Alberta broadcasters, 13 exhibitors, cable companies, public agencies, 14 foundations, guilds, associations, unions, performers, 15 writers, directors, service providers, craftspeople, 16 distributors, support staff, arts/co-op associations, 17 training institutions and students. In all, there are 18 over 260 organizations and individuals who are members 19 of AMPIA. 20 4910 I would like to speak about Canadian 21 programming and shelf space for Alberta programming. 22 We submit that Canadians want to view Canadian 23 television programming. We believe that our Alberta 24 voice plays an important part in reflecting the 25 cultural diversity and variety of this country. StenoTran 1095 1 4911 Alberta must continue to have a 2 strong voice in the telling of Alberta's stories, 3 crafted and controlled by Alberta talent. The 4 endurance of programs like "North of 60" and the 5 popularity of "Jake and the Kid", "Mentors", "Bye Bye 6 Blues", "The Orange Seed Myth" and others provide proof 7 that the Canadian public enjoys the stories that we 8 have to tell. 9 4912 Earlier this year we randomly chose a 10 week and checked through the local television guide for 11 Canadian programs during prime time. Not only is there 12 a limited amount of Canadian programming during prime 13 time on all the Canadian channels, but Alberta programs 14 in national broadcast slots are either rare or non- 15 existent. This did not, unfortunately, come as a 16 surprise to us, that finding shelf space for Alberta 17 programs on a national level is a challenge. 18 4913 It is becoming increasingly difficult 19 in Alberta as there is an increase in multi-station 20 ownership headquartered outside of Alberta. 21 Programming decisions are no longer being made in our 22 province. Our voices and our stories are in danger of 23 being lost. An Alberta award-winning documentary has 24 trouble receiving shelf space on a national level. 25 4914 Further, in Alberta we currently face StenoTran 1096 1 a situation where at some stations the only air time 2 that is available for our programs is the back half- 3 hour of the news hour every statutory holiday. We 4 despair that soon we will have nothing but rebroadcast 5 stations and we do not believe that this meets the 6 spirit of public interest under the Broadcast Act and 7 certainly does not reflect the federal nature of this 8 country. 9 4915 We have a recommendation. To 10 stimulate a more balanced view on our television 11 screens in addition to the regional bonuses currently 12 available to producers under the Canadian Television 13 Fund, which really makes a difference to us in Alberta, 14 we recommend that regional productions be given a 50 15 per cent bonus when the CRTC calculates the hours of 16 Canadian programming in the under-represented 17 categories broadcast by a Canadian broadcaster toward 18 their condition of licence. 19 4916 We move on to promotion of Canadian 20 programming. So, how do we encourage Canadians to 21 watch our programs? Unlike our counterparts in the 22 United States, there is little or no budget for 23 producers to promote a Canadian program once it is 24 made. All the resources go into the successful 25 completion of the program. We submit that broadcasters StenoTran 1097 1 should be encouraged to commit to seriously promote 2 Canadian programming through more than just five-second 3 bumpers. 4 4917 Our broadcasters have long maintained 5 that Canadian programming does not generate the kind of 6 revenues or viewership that American programming does. 7 At the end of the day, it is how many viewers they can 8 deliver and the ranking in the BBMs that will dictate 9 the price they can ask for advertising space. We 10 submit that if Canadian and further regional 11 programming were properly promoted by the broadcasters, 12 viewership should increase, resulting in increased 13 advertising revenue from the commercial slots that 14 surround Canadian programming. We submit that we can 15 help the broadcasters achieve their goals by providing 16 world class, international award-winning programming 17 for their viewers. 18 4918 According to Statistics Canada, in 19 1996 in Alberta $182 million were generated by the 20 broadcasters in advertising revenues. As the 21 headquarter ownership of Alberta stations moves out of 22 Alberta and there is a dramatic increase in multi- 23 station ownership, so go the profits out of Alberta. 24 At the same time, broadcasters are required to allocate 25 certain formula-based expenditures on Canadian StenoTran 1098 1 programming without having to necessarily invest any of 2 those expenditures in Alberta where they operate and 3 collect major advertising revenues. AMPIA supports 4 completely a formula-based approach. We submit that it 5 could be strengthened to enhance the broadcast of 6 programs from the regions and to put production dollars 7 back into the communities which are contributing major 8 advertising revenues. 9 4919 Recommendation number two. We 10 recommend that the CRTC strengthen its formula-based 11 Canadian programming expenditure requirements by 12 requiring that broadcasters commit a significant 13 percentage to the purchase of prime time Canadian 14 programming from the market in which they are deriving 15 advertising revenue -- in our case, Alberta -- and 16 purchase this programming from the independent 17 production sector. This should be in addition to the 18 incentives that the broadcasters give to independent 19 producers in Schedule F of the CRTC application. 20 4920 We further recommend that in return 21 for the promotion of Canadian programs on a national 22 basis broadcasters be permitted to count one-half hour 23 of promotional programming, programming that promotes 24 Canadian programs, towards meeting their 10 hours per 25 week of under-represented program categories and that StenoTran 1099 1 the spending on that promotion count as Canadian 2 program expenditures. 3 4921 We applaud the Commission for 4 initiating this process and thank you for allowing us 5 the opportunity to participate in this very important 6 consultation. 7 4922 THE CHAIRPERSON: Ms Edwards, 8 although your organization refers to motion pictures, I 9 see from your presentation this morning that the 10 membership eligibility is very expanded. Does it 11 remain, however, focused on motion pictures in the 12 traditional sense or any type of programming? 13 4923 MS EDWARDS: I'm sorry, I am not sure 14 I quite understand. 15 4924 THE CHAIRPERSON: You are called the 16 Alberta Motion Picture Industries Association. 17 4925 MS EDWARDS: Yes. 18 4926 THE CHAIRPERSON: So, I suspect you 19 have been focusing on motion pictures in the 20 traditional sense -- 21 4927 MS EDWARDS: Yes. 22 4928 THE CHAIRPERSON: -- or any type of 23 programming. Long-form motion pictures? 24 4929 MS EDWARDS: Long form and 25 television. StenoTran 1100 1 4930 THE CHAIRPERSON: But motion pictures 2 rather than short programming or series or -- 3 4931 MS EDWARDS: No, we cover all the 4 sectors. 5 4932 THE CHAIRPERSON: You cover all? 6 4933 MS EDWARDS: Yes, we do. 7 4934 THE CHAIRPERSON: Because the name is 8 somewhat misleading. You are using "motion picture" as 9 very generic, not a special forum. 10 4935 MS EDWARDS: Yes. 11 4936 THE CHAIRPERSON: And it has been 12 emphasized clearer than it was in your written 13 presentation because you have expanded technically the 14 membership possibility to represent 260 organizations 15 and individuals who are now members. 16 4937 MS EDWARDS: Yes. We predominantly 17 still -- most of our members are producer members, 18 independent producer members. 19 4938 THE CHAIRPERSON: You are focusing on 20 prime time regional product and at the end of your 21 presentation this morning you referred to the 10 hours 22 per week. I suspect that you are endorsing the CFPTA's 23 10/10/10 formula. Where did you get the 10 hours, from 24 the CFPTA's submission? 25 4939 MS EDWARDS: We certainly read that StenoTran 1101 1 submission and incorporated that particular part into 2 our recommendation. We are very intent on stimulating, 3 as you can tell, Alberta representation on a 4 national -- 5 4940 THE CHAIRPERSON: So, you feel that 6 the first step is to stimulate the under-represented 7 categories. Are you also endorsing the peak time 8 aspect of that 10 hours, that 10/10/10 formula that was 9 put forward? 10 4941 MS EDWARDS: In terms of the -- 11 4942 THE CHAIRPERSON: Well, if you 12 recall, they recommended 10 per cent of the revenues of 13 the previous year, 10 hours per week, plus three for 14 children, and all of that in peak time, if I recall 15 properly, defined as 7:00 to 11:00. 16 4943 MS EDWARDS: Certainly, we would be 17 in agreement with the 7:00 to 11:00. I would have to 18 consult with my colleagues. I'm sorry, our Executive 19 Director was not able to come. 20 4944 THE CHAIRPERSON: As to whether you 21 also think it has to be within a particular time period 22 over and above the exhibition. 23 4945 MS EDWARDS: I believe we would 24 support the 7:00 to 11:00, yes. 25 4946 THE CHAIRPERSON: What was I going to StenoTran 1102 1 ask you? You also refer to a bonus instead of using a 2 credit, Recommendation 1. How would this work? Would 3 the 50 per cent bonus, in your view, be tantamount to a 4 200 per cent credit? Is it like if you did one hour of 5 Canadian programming in the under-represented 6 categories that came from a region, that would count as 7 though you had done two hours? Is that how it would 8 work? 9 4947 MS EDWARDS: No, I think that would 10 be an hour and a half. 11 4948 THE CHAIRPERSON: So, it would be 12 more like the 150 per cent credit because it's 13 addressed from the bonus rather than the credit. 14 4949 MS EDWARDS: Yes. 15 4950 THE CHAIRPERSON: That bonus would be 16 by reference to who the producer is -- 17 4951 MS EDWARDS: Yes. 18 4952 THE CHAIRPERSON: -- whether he or 19 she is an Alberta producer operating in Alberta? 20 4953 MS EDWARDS: Yes. 21 4954 THE CHAIRPERSON: You also emphasize 22 promotion and so have a number of parties. You endorse 23 the half hour, which appears to be the CFPTA -- the 24 half-hour promotional program a week that could go 25 towards being Canadian. Do you have any comments on StenoTran 1103 1 how one would define what's an acceptable or eligible 2 promotional half hour? 3 4955 MS EDWARDS: I think in that instance 4 I would like to take that back and present a written 5 answer to that question, if I could consult with my 6 colleagues on that. 7 4956 THE CHAIRPERSON: You don't recall 8 discussing some of the other CAB promotional proposals 9 which would go to exempting from the definition of 10 "advertising" certain promotional efforts? 11 4957 MS EDWARDS: We have not thoroughly 12 discussed that. 13 4958 THE CHAIRPERSON: You didn't. You 14 obviously would have -- well, let me rephrase this. 15 Would you have a concern that promotional programming, 16 if it were more than one-half hour and also the bonus, 17 would have the effect of reducing the amount of actual 18 produced product or programming? 19 4959 MS EDWARDS: That certainly would be 20 a concern. I think our larger concern at this point is 21 stimulating getting our programming out onto a national 22 basis and attracting viewership promoting that 23 programming. So, perhaps this could be the first step 24 toward achieving that goal. 25 4960 THE CHAIRPERSON: Your concern is StenoTran 1104 1 more what is the ratio of money or exhibition hours 2 that goes to Alberta producers or the shelf life given 3 for exhibition of Alberta products than the actual 4 amount. So, obviously, if it's a ratio, the more is 5 required in terms of Canadian content, the more Alberta 6 producers could benefit from it. 7 4961 MS EDWARDS: Yes. 8 4962 THE CHAIRPERSON: Has your 9 organization tried to pressure broadcasters? Do you 10 have an organized public relations attempt to get 11 Alberta broadcasters to invest more in Alberta 12 production? I see in your oral presentation you say: 13 "...broadcasters are required to 14 allocate certain formula-based 15 expenditures on Canadian 16 programming without having to 17 necessarily invest any of those 18 expenditures in Alberta where 19 they operate and collect major 20 advertising revenues." 21 1215 22 4963 I suspect what you are saying is that 23 you are making your money in Alberta. It does not 24 matter where your headquarters are, because you appear 25 to be concerned about the movement of ownership, as StenoTran 1105 1 well. 2 4964 MS EDWARDS: Yes, we are concerned 3 about that. 4 4965 THE CHAIRPERSON: Have you tried to 5 say: "This is how much money you are making out of 6 Alberta. How much money are you putting back into 7 Alberta?" 8 4966 MS EDWARDS: We are currently doing 9 studies on that issue. Through our written 10 presentation, we make note of the various production 11 and development funds that are available through the 12 various broadcasters. 13 4967 However, it is just not enough to 14 stimulate the kind of programming we believe can be 15 coming out of our province. And it does not 16 necessarily guarantee us national play. 17 4968 That is the biggest point that we are 18 trying to emphasize. 19 4969 THE CHAIRPERSON: You want money put 20 into Alberta production that will have national play. 21 4970 MS EDWARDS: Yes. As my colleagues 22 in Manitoba were saying, it is important for the 23 broadcasters to move across the country and see who the 24 other players are across the country. We believe we 25 have very talented award-winning people in Alberta and StenoTran 1106 1 believe we have very strong stories to tell that would 2 reflect a part of Canada to Canadians. We want to be 3 given the opportunity to produce that kind of 4 programming; and further to just producing the 5 programming, have it be seen on a national basis. 6 4971 THE CHAIRPERSON: In that sense, do 7 you think that concentration of ownership, instead of 8 being a problem, may be a help? 9 4972 If you want regional productions -- I 10 see some of your Manitoba colleagues raising their 11 eyebrows here -- in the sense that if you want national 12 play but you want it produced by Alberta producers, 13 isn't it easier with fewer ownership groups to get 14 national exposure? 15 4973 MS EDWARDS: It should be. I don't 16 believe that that is necessarily the case. 17 4974 THE CHAIRPERSON: Why not? For 18 example, if somebody from anywhere in Canada owns 19 stations in a number of places, but you can convince 20 them that because a ratio of their advertising revenues 21 is as a result of broadcasting in a particular region, 22 you could still pass on the regional argument. But 23 wouldn't it be easier to get the national exposure? 24 4975 MS EDWARDS: In theory, yes. That 25 certainly has not been our experience. That was a StenoTran 1107 1 concern that we raised about some of the time slots 2 that are available to us. They are just not there. 3 4976 THE CHAIRPERSON: For example, if you 4 managed to convince the CBC that they should spend 5 money in the regions, you would have a better chance of 6 having national exposure because of the fact that they 7 are broadcasting across the country. 8 4977 MS EDWARDS: If the national -- 9 4978 THE CHAIRPERSON: If that happened, 10 yes. 11 4979 MS EDWARDS: -- broadcaster agrees 12 that our program will fit into their programming 13 schedule. That is the difficulty. 14 4980 THE CHAIRPERSON: And many factors 15 come into it here. I was just addressing your comment 16 about when an undertaking's ownership moves out of the 17 province; that that is a disadvantage. 18 4981 It could be turned into an advantage 19 is what we will hear, I am sure, from those parties. 20 4982 MS EDWARDS: Yes. And certainly we 21 will be there making that representation. 22 4983 It is not always as easy as that. 23 The broadcasters obviously have their own desires and 24 needs, and we are certainly vocal in expressing what we 25 would like to see. StenoTran 1108 1 4984 THE CHAIRPERSON: You would have to 2 twist their arm or help the Commission to do so when 3 these occur. 4 4985 I don't know if you want your 5 Manitoba colleagues to return and answer this question. 6 They seem to be quite animated. 7 4986 Is that okay with you, Ms Edwards? 8 4987 MS EDWARDS: That would be fine. 9 4988 THE CHAIRPERSON: Ms Vivier, it is 10 this particular question of how you relate regional 11 participation and ownership, especially when your aim 12 is not to have local programming but nationwide 13 exposure. 14 4989 MS VIVIER: One would think, with the 15 broadcasters getting larger, that you would benefit 16 from that. Clearly, we have not. 17 4990 I think by what we stated -- even 18 having the head offices of the major broadcasters in 19 the province, I am told all the time: "You guys are 20 okay in Manitoba. You have the head office of Canswest 21 Global and you have Moffat Communications and Craig." 22 And I laugh and say: "That doesn't help us at all." 23 4991 As far as efforts go, it is not like 24 we sit on our hands and have not tried to have this 25 conversation with the broadcasters. There have been StenoTran 1109 1 many conversations with broadcasters on these issues 2 and also dealing with Canwest. 3 4992 When Canwest had a condition of 4 licence in Vancouver, at CKVU, there was wonderful 5 programming going on for the four western provinces. 6 They were licensing high end documentaries. "The Curse 7 of the Viking Grave", a television movie that was made 8 in Manitoba, a Canadian movie, was up for an Emmy 9 award. 10 4993 There was wonderful programming being 11 produced. At that time, I was more than happy to 12 provide a letter of intervention for Canwest at the 13 CRTC hearings. Well, I certainly would not provide a 14 letter for them now. 15 4994 I think the transfer of ownership is 16 a major issue, and that is when you can get them and 17 make them come up to the table. Canwest Global is one 18 of the most profitable companies, and I think it is 19 quite shameful that they have not spent one penny on 20 western Canadian independent production in 1997-98. 21 4995 THE CHAIRPERSON: We will leave it at 22 that. It is easy to go down the slippery slope of 23 going beyond the purpose of this hearing, although 24 sometimes it is very difficult to discuss issues 25 without getting into specifics. StenoTran 1110 1 4996 We did say at the beginning of the 2 hearing that we would try to keep the processes 3 separate. 4 4997 I am sure that legal counsel will be 5 raising his eyebrows at me and will get animated if we 6 go beyond that. 7 4998 We thank all of you. 8 4999 Ms Edwards, I don't know if you have 9 anything to add -- 10 5000 First of all, I believe there is 11 question from legal counsel. 12 5001 MR. BLAIS: Just a question of 13 clarification, Ms Edwards, concerning your proposal for 14 this 50 percent credit for regional production. 15 5002 I realize that you might not be able 16 to do that right now. When we move forward in this 17 process and we consider options, sometimes we face the 18 problem, in having recommendations that we need to put 19 into place, that we need to have some definitions. 20 5003 I wonder if you might be able to 21 offer us some ideas on how to define "regional 22 production" for the purposes of your recommendation. 23 5004 I don't know if you have some 24 thoughts now or would like to do that in writing 25 between now and the 15th of October. StenoTran 1111 1 5005 MS EDWARDS: I would like to submit 2 that to you in writing. 3 5006 MR. BLAIS: Thank you for that. 4 5007 The other aspect that raises an issue 5 is: Are you meaning that this 50 percent credit would 6 only apply -- for instance, if the region were defined 7 as the west, would the credit only apply for 8 broadcasters located in the west? Or would you suggest 9 that, for instance, a broadcaster in Halifax would also 10 benefit from this additional credit? 11 5008 MS EDWARDS: I think the intent was 12 that any broadcaster would benefit. We are thinking 13 specifically, of course, on a national level. So a 14 broadcaster that has a national window. 15 5009 MR. BLAIS: You are seeing this as an 16 incentive that would help create a window throughout, 17 not just broadcasters in the region from which the 18 regional programming to be defined comes from? 19 5010 MS EDWARDS: Yes. Our purpose is in 20 getting our programs seen by a national audience. 21 5011 MR. BLAIS: As you now, at present we 22 have a 150 percent credit for drama. I take it, then, 23 that this would be above and beyond the existing 150 24 percent credit for drama -- or maybe not. 25 5012 MS EDWARDS: I am sorry, I would have StenoTran 1112 1 to get back to you on that. 2 5013 MR. BLAIS: That is fine. 3 5014 Thank you very much. Those are my 4 questions. 5 5015 THE CHAIRPERSON: Thank you, Ms 6 Edwards. I hope you also have a good trip back home. 7 5016 We will adjourn for lunch now and 8 resume at 1:30. 9 5017 Nous reprendrons à une heure et 10 demie. 11 --- Recess at 1230 / Suspension à 1230 12 --- Upon resuming at 1335 / Reprise à 1335 13 5018 THE CHAIRPERSON: Good afternoon, and 14 welcome back. 15 5019 Madam Secretary, would you invite the 16 next participant, please. 17 5020 MS BÉNARD: Thank you, Madam Chair. 18 5021 The next presentation will be by 19 Vision TV. I would invite Mr. Fraser to introduce his 20 colleagues. 21 PRESENTATION / PRÉSENTATION 22 5022 MR. FRASER: Thank you very much. 23 Good afternoon; bonne après midi. 24 5023 My name is Fil Fraser. I have the 25 honour to be the President and Chief Executive Officer StenoTran 1113 1 of Vision TV. 2 5024 We took these hearings to be of great 3 importance, and we wanted to be well represented. That 4 is why I am pleased to introduce my colleagues, each of 5 whom in their own way helps us to fill a very special 6 mandate. 7 5025 On my left is Rita Deverell, our Vice 8 President of Production and Presentation, one of the 9 founders of Vision TV, and the producer of our flagship 10 daily human affairs program "Skylight". 11 5026 On my right is Jim Hanley, President 12 of Sleeping Giant Productions, an independent 13 production company with credits, including the widely 14 distributed series the "Originals", "TVTV", and many 15 series produced for us, including "Tom Harpur's Life 16 After Death", and the 26-part series "Spiritual 17 Literacy: Reading the Sacred and Everyday Life", which 18 is now in production. 19 5027 Next to him is Paul De Silva, our 20 Executive Producer of Independent Production, whose 21 ability to work effectively with independent producers 22 comes from his own experience as producer of, among 23 other things, a Gemini award winning drama anthology 24 series "Inside Stories". 25 5028 On my extreme right is Bruce Smith, StenoTran 1114 1 the Chair of Vision's Mosaic Program Management Group, 2 an advisory group representing the more than 60 faith 3 and religious organizations who broadcast on Vision TV. 4 5029 Behind me, from left to right, are 5 Alberta Nokes, a seasoned communications executive, and 6 our newest staff member, our Director of 7 Communications. 8 5030 Next to her is David Cole, who is 9 President of Specialized Media Sales, an agency which, 10 since we were licensed a decade ago, has provided 11 Vision TV with high quality audience research and data, 12 and which has had the unique mandate to sell Vision 13 TV's air time to faith groups and advertisers. 14 5031 Next to him is Jeannette Loakman, an 15 independent documentary filmmaker. Her Canadian 16 documentary "Mothers of Re-invention" -- a look at how 17 women are reshaping the new South Africa -- aired on 18 Vision last spring. 19 5032 Next to her is Stephen Zolf, of 20 Heenan Blaikie, our new legal counsel. 21 5033 Next to Stephen is Gretchen Jordon- 22 Bastow, an independent producer from Vancouver, who 23 produces and directs social issues documentaries, 24 including "Through the Lens", a six-hour media literacy 25 series about the films and filmmakers of western StenoTran 1115 1 Canada. 2 5034 We are pleased to be here, and to 3 tell you that Vision TV is Canada's unique, not-for- 4 profit, national specialty channel. Our programming 5 reflects the multifaith and multicultural diversity of 6 Canada and seeks to build bridges of understanding by 7 illuminating all faiths and cultures in our country. 8 5035 Not only that, Vision is a well-run, 9 successful business. Last fall's Nielsen ratings 10 ranked Vision third among Canadian English specialty 11 channels for weekday prime time viewing. 12 5036 This is our tenth anniversary, in 13 1998. We enter our second decade with no debt and a 14 reasonable surplus. Our operating budget is about $13 15 million -- small in broadcasting terms. Our subscriber 16 fee is a modest 8 cents; yet over the last four years 17 we have invested 51 percent of our revenues into 18 Canadian programming -- that is almost $24 million -- 19 and 63 percent of our total schedule is Canadian in 20 content. 21 5037 Vision TV embodies the CRTC's 22 Religious Broadcasting Policy by providing balanced 23 access to the full mosaic of faiths -- from Anglicans 24 to Zoroastrians literally -- which reflect the 25 religious diversity of Canada with more than 60 groups StenoTran 1116 1 broadcasting on Vision. 2 5038 We fulfil our mandate through 3 programming, which includes documentaries, feature 4 films, comedy, music and performance. We have a 5 special interest in documentaries focusing on matters 6 of the spirit, which comprise roughly 25 percent of our 7 prime time programming. 8 5039 Of the 34 documentaries funded last 9 year by Telefilm Canada, 14 had broadcast licences from 10 Vision TV. Our 1997 investment of approximately $1.4 11 million in documentaries that accessed the CTV, as it 12 is now called, generated total production budgets of 13 $7.7 million and produced 62 hours of new Canadian 14 documentary programming. 15 5040 MS DEVERELL: Vision TV makes a 16 contribution beyond its size to the system. We are a 17 small player in a world where broadcasters are getting 18 bigger through consolidation, which means more of the 19 same on more channels. To provide the diverse voices 20 that is Canada's diversity, we need to have a system 21 where big and small players must make an equitable 22 contribution to the goals of the Act. 23 5041 It is important to remember that 24 little guys can do a lot. We bring new ideas and a 25 kind of programming to the system which others cannot StenoTran 1117 1 afford to risk. 2 5042 Vision TV takes the lead in 3 addressing critical and fundamental human issues which 4 fall outside the core interests of the mainstream, 5 profit-driven broadcasters. We produce and present 6 programs which no one else does and which matter to a 7 significant number of Canadians, largely through 8 working with independent producers from coast to coast 9 -- and we do it on a limited budget. 10 5043 What may be considered moderate 11 audiences for conventional broadcasters are significant 12 audiences for specialty channels, which super-serve 13 niches of interest. In the context of building 14 Canadian culture, the audiences of such programs as 15 "Images of Love", "Words of Hope", "Conversations with 16 Jean Vanier", "Let's Sing Again", "Dad's Under 17 Construction", "Callwood's National Treasures" and 18 Vision's daily prime time human affairs magazine 19 "Skylight" -- which I produce -- are significant 20 audiences. 21 5044 "Skylight" reaches over 30,000 22 viewers from Monday to Friday. It features many 23 documentaries from across Canada and on international 24 issues of concern to Canadians, such as the story of 25 the genocide foretold in Rwanda which we broke to StenoTran 1118 1 international attention last year. 2 5045 Canadian peacekeepers, faith 3 communities and social justice groups played a major 4 role in addressing and reporting on the plight of 5 Rwanda. 6 5046 Vision TV brought the story home in a 7 fuller, more meaningful way than larger broadcasters 8 and other international media who later accessed our 9 documentary footage for their reports. And the program 10 reached 100,000 viewers. 11 5047 With our small budget, we produce and 12 present quality programs which have won awards and 13 nominations, including the B'nai Brith Human Rights 14 Award, the international Gabriel Certificate for 15 "station of the year", and this year's Gemini 16 nominations for Best Information Segment and Best 17 Documentary Series. 18 5048 This week you have heard about large 19 enterprises and large sums. It is important to 20 remember that smaller sums in the hands of smaller 21 players go a long way to bringing more quality programs 22 to Canadian audiences. 23 5049 As a small but vital player, Vision 24 TV contributes to the goals of the Broadcasting Act by 25 providing a diversity of programming truly reflective StenoTran 1119 1 of the multicultural nature of Canada. Yet, the full 2 impact of this contribution could be more fully 3 realized if Vision were not played on a channel 4 inaccessible to many viewers in the country's largest 5 cable market. 6 5050 For us to continue to provide this 7 diversity in the system, people have to be able to see 8 us, whether they have the latest high tech gizmo or a 9 36-channel converter. 10 5051 To ensure that Canadians can receive 11 a predominance of Canadian programming, we have 12 recommended a hierarchy of access approach. This would 13 ensure that Canadian services that best meet public 14 policy objectives are given pride of place. 15 5052 MR. FRASER: Now we would like to 16 address the definition of Canadian programming which 17 you asked us to respond to in 1998-59. 18 5053 In our written brief we suggested 19 that a Canadian program is one that is made by 20 Canadians, primarily for Canadian audiences -- 21 primarily for Canadian audiences. This includes 22 programs on universal subjects seen from a Canadian 23 perspective. 24 5054 Jim Hanley will elaborate. 25 5055 MR. HANLEY: My company, Sleeping StenoTran 1120 1 Giant, has produced 448 hours of documentary programs 2 and series over the last ten years, about 50 percent in 3 partnership with Vision TV. All of these have been 4 distributed internationally. More than 2 million 5 Canadian viewers alone have tuned in to "Life After 6 Death with Tom Harpur", our most successful series to 7 date. 8 5056 Broadcasters, particulary specialty 9 channels, increasingly rely on documentaries to provide 10 engaging, entertaining and cost effective Canadian 11 content in their schedules. As a producer, it is great 12 to see this rise in demand. 13 5057 But the demand is not being met. The 14 pressures on the funding envelope for documentaries has 15 increased dramatically, and because of the resulting 16 triage, eligibility is narrowing. 17 5058 This year we wanted to follow the 18 success of several series with journalist and 19 theologian Tom Harpur, a bone fide Canadian star by any 20 measure, with a new project. Even though "Tom Harpur's 21 The Believers", a series featuring this great 22 Canadian's unique take on the founders of the world's 23 major spiritual movement, was Vision TV's first choice 24 to propose to the CTF, I was forced to withdraw it. 25 5059 It was clear that it would not be StenoTran 1121 1 deemed Canadian enough to fit the Fund's "distinctively 2 Canadian" criteria. Yet, what could be more 3 distinctively Canadian than a Tom Harpur project? 4 1340 5 5060 MR. FRASER: What indeed. The 20 per 6 cent funding envelope for genres other than drama must 7 be shared by music and dance, variety and 8 documentaries. This is, we submit, an inadequate sum 9 given the demand for programming needed by specialty 10 services which the Commission has licensed. 11 5061 To deal with this increased demand 12 for funding, the bar for eligibility has been raised. 13 The CTF's distinctively Canadian criteria, originally 14 intended as a way to give productions in a variety of 15 genres bonus funding, is now being used as the criteria 16 by which to evaluate documentaries. This is a serious 17 problem. 18 5062 We suggest that the criteria for 19 distinctively Canadian programs need to be redrawn to 20 better reflect the realities of Canadian documentaries 21 and documentary makers. This is made more urgent as 22 the CTF is advancing quickly to announce new criteria 23 as early as December. This hearing, we believe, is a 24 valuable opportunity for input into this process. 25 5063 We trust that the CTF will be paying StenoTran 1122 1 close attention to the issues raised here. Like most 2 participants in these proceedings, Vision TV believes 3 that documentaries should be included in the 4 under-represented categories used to satisfy 5 conventional broadcasters' conditions of licence. This 6 would drive, we believe, the establishment of dedicated 7 funding for this category. 8 5064 Higher priority and dedicated funding 9 are the key to enabling this uniquely Canadian genre to 10 survive and prosper. Documentaries should be treated 11 with no less favour than drama as they also tell our 12 stories. 13 5065 Vision TV recommends that specific 14 funding allocations are needed to support 15 documentaries. These essential cultural products are 16 motivated primarily from an impulse to tell rather than 17 to sell a story. They need public funding to exist. 18 5066 Documentaries are an excellent and 19 cost effective investment by Canadian taxpayers in 20 developing and maintaining our national culture. 21 5067 We thank you for the opportunity to 22 participate. We look forward to your questions which 23 any one of us on the panel are prepared to answer. 24 5068 Thank you very much. 25 5069 THE CHAIRPERSON: Welcome and thank StenoTran 1123 1 you, ladies and gentlemen. 2 5070 Commissioner Pennefather, please. 3 5071 COMMISSIONER PENNEFATHER: Good 4 afternoon. 5 5072 MR. FRASER: Good afternoon. 6 5073 COMMISSIONER PENNEFATHER: Thank you 7 for that presentation, for your submission and for 8 everyone coming here from Toronto and elsewhere. We 9 appreciate your contributing to the diversity of the 10 attendees at this hearing. 11 5074 MR. FRASER: Thank you. 12 5075 COMMISSIONER PENNEFATHER: I would 13 like to ask you a number of questions. Actually they 14 are more points that I hope we can elaborate on a 15 little bit more because I think you have made some 16 important contributions to discussions, some of which 17 we were having earlier today. 18 5076 First, though, I do note that a 19 significant part of your written submission, and you 20 have included in your comments today, particularly 21 Rita's comments, your concerns relating to access and 22 carriage issues. I want to be sure that you are aware 23 that the Commission has now decided to hold a policy 24 process in the new year with respect to a licensing 25 framework for the specialty services. I am sure this StenoTran 1124 1 will provide an opportunity for you and other parties 2 to discuss this issue at greater length. 3 5077 MR. FRASER: We are gratefully 4 encouraged, Madam Commissioner, by the Commission's 5 move in this direction. We, as you know, are part of 6 the SPTV Industry Association. We are one of the 7 founding members. We have advocated this and we are 8 pleased with the response. 9 5078 COMMISSIONER PENNEFATHER: Good. Not 10 surprisingly then, I would like to turn to 11 documentaries. If you could, I would appreciate if you 12 would bring together for us your various 13 recommendations in this regard. 14 5079 You discussed in your oral 15 presentation criteria to evaluate documentaries and 16 your concern about the way documentaries are defined at 17 the moment. You have also added to this a comment 18 about how to describe what the definition is of a 19 Canadian program, so I would like to hear a little bit 20 more about that. 21 5080 Secondly, you have several 22 recommendations regarding greater support to 23 documentaries by funding agencies and support to 24 documentaries through inclusion in the 25 under-represented categories. StenoTran 1125 1 5081 If we look at those three points, we 2 may be able to get a clearer picture on how you put all 3 these pieces together to assure the future of 4 documentaries in the Canadian system. 5 5082 Then I would like to talk about what 6 all this means for Vision in particular. If you start 7 then by your criteria, could you be just a little 8 clearer on what is your concern about current criteria 9 used to evaluate documentaries. 10 5083 MR. FRASER: I would like to invite 11 some of my documentary producer colleagues to respond 12 to this. Let me set the stage by suggesting that we 13 think that the documentary is, among many other things, 14 a very important carrier of Canadian culture. It's an 15 effective way of telling Canadian stories. 16 5084 Documentaries are not just a series 17 of people talking about some issue. They are 18 structured events with beginnings, middles and ends 19 that are an art form. Because of the nature of the 20 country, which is becoming increasingly diverse, a 21 documentary someone said earlier, and I will just steal 22 this from you, Paul, a flood in Bangladesh 10 or 15 23 years ago was a foreign story. Today it's a story that 24 affects your neighbour. 25 5085 We think in our definition of StenoTran 1126 1 documentaries that we need to cast a wide lens, a wide 2 net, that allows for Canadians' perspectives not just 3 on things going on within our borders, but things going 4 on anywhere in the world that affect our citizens. 5 5086 We define documentary as meaning by 6 Canadians and I think this is a key point for us. The 7 intent which the documentary maker or the film maker 8 brings to the exercise, and the broadcaster as well, is 9 that it is intended to tell these stories to Canadian 10 audiences. 11 5087 You can have in some circumstances 12 programs that meet all the criteria for Canadian or 13 super-Canadian, ten out of ten, hundred out of a 14 hundred, if you like, and they may simply be fronts for 15 other kinds of programs that really aren't primarily 16 intended to tell Canadian stories to Canadians. 17 5088 I better stop now because I might get 18 carried away. 19 5089 I pass to Jim Hanley who might want 20 to add to that. 21 5090 MR. HANLEY: In terms of the criteria 22 for Canadian documentaries, we have no problem 23 whatsoever. I'm talking for Sleeping Giant Productions 24 here as an independent producer. I have no problem 25 whatsoever with the criteria set down by the Canadian StenoTran 1127 1 Television Fund or Telefilm Canada. They have a list 2 of those criteria. They're fine. 3 5091 When you come to the point system, 4 ten out of ten, absolutely no problem whatsoever. We 5 are prepared in virtually every circumstance to meet 6 that. If we don't, if we are involved as we are 7 currently in conjunction with Vision and 8 Italian-Canadian co-production where there are foreign 9 elements, they are not eligible for CTF moneys, but we 10 are proceeding with this. Everything's fine. There's 11 no problem. 12 5092 Where there's a problem or where 13 there has been a problem is in this super-Canadian or 14 distinctively Canadian business that has now been added 15 to everything is a content question. The points are 16 fine. The criteria for a documentary are fine, but now 17 the people are saying what the content has to be. 18 5093 COMMISSIONER PENNEFATHER: Who is 19 saying? Who are the people? 20 5094 MR. HANLEY: Well, in the issue of 21 the Canadian Television Fund, there was strong 22 suggestion that the content would have to be Canadian. 23 It would have to be a story set -- I mean, now I am 24 bandying because nobody ever has said this directly to 25 me, but the interpretation would be that the story StenoTran 1128 1 would be set in Swift Current, Saskatchewan, or 2 whatever, as opposed to in the case of the Tom Harpur 3 question, this major figure who is approaching his take 4 on the founders of the world's great spiritual 5 movements, all of whom have adherents in this country 6 of ours, is deemed not Canadian enough to fit that 7 super-Canadian status. 8 5095 That I take great odds with because I 9 think that that would mean in order to finance these 10 kinds of narrowly defined Canadian documentaries, in 11 order to achieve that kind of funding it would have to 12 be financed almost entirely within the Canadian system 13 and you would have no opportunity to leverage the money 14 with any kind of international distribution. 15 5096 MR. FRASER: I wonder, Commissioner, 16 if I can ask Paul De Silva to add to that. I may be 17 getting ahead of ourselves, but we all saw the letter 18 from the fund which appeared magically yesterday. It 19 advances a definition which I think you may want to 20 comment on. 21 5097 MR. DE SILVA: Thanks, Fil. 22 5098 I think the concern as expressed by 23 Jim is that there may be times, and this is one 24 specific situation, when a documentary program, in this 25 case a series, that may have all qualifier ten out of StenoTran 1129 1 ten points but may have some subject matter that is 2 beyond our borders and that because the demand is so 3 great on the fund that as the demand increases, they 4 increase the screens, as they put it, in terms of how 5 they evaluate a project. 6 5099 The greater the demand, the higher 7 the screens go so that eventually something that 8 doesn't have complete 100 per cent subject matter, for 9 instance, and in this case it may be Tom Harpur's 10 perspective on Buddha or Hildegarde or Bingham or Joan 11 of Arc or something like that. I hope I am using the 12 right examples here. These are part of the series. 13 5100 COMMISSIONER PENNEFATHER: Joan of 14 Arc is fine. 15 5101 MR. DE SILVA: Joan of Arc. That was 16 inadvertent. 17 5102 COMMISSIONER PENNEFATHER: That was 18 really a heroine of mine. 19 5103 MR. DE SILVA: So I will repeat Joan 20 of Arc, I guess. 21 5104 As those go up higher in the screen 22 process, it could be eliminated. I think in general is 23 that we support the idea of distinctively Canadian. We 24 know why it's there. The ten out of ten is fine, but 25 there has to be flexibility in the system. StenoTran 1130 1 5105 We are not suggesting here the 2 language to do that because I think that has to be 3 under consultation with the CTF, but to leave the 4 opportunities and the openings there for these kinds of 5 programs. 6 5106 MR. FRASER: The Canadian Television 7 Fund letter, and I will stop quickly, it says, and I 8 quote: 9 "It will support only those 10 projects which are based on a 11 Canadian point of view and 12 reflect Canadian themes, stories 13 and events." 14 5107 We want to make sure that as this 15 process winds through and the decisions are made that 16 Canadian themes, stories and events reach out across 17 the world. 18 5108 COMMISSIONER PENNEFATHER: Which 19 brings me exactly to my next point, and there are many 20 different avenues we could take. I appreciate and 21 thank you for this discussion on distinctively 22 Canadian. We hear the phrase "Canadian stories" over 23 and over again and it always raises this debate. 24 5109 I guess under certain criteria the 25 films boards universe wouldn't apply then. It's a StenoTran 1131 1 little out of our borders. 2 5110 MR. FRASER: Absolutely. 3 5111 COMMISSIONER PENNEFATHER: Speaking 4 of outside our borders, there has been discussion here 5 and certainly elsewhere about exportability. I am 6 largely coming at this and now we will move into the 7 financing questions. 8 5112 What do you think about the Council 9 of Canadians' comment that a framework, a regulatory 10 framework which is geared towards supporting the 11 exportability of programming would work against our 12 objectives to increase Canadian programming, 13 particularly local programming? That was the context 14 of the discussion. 15 5113 If you could speak to that and help 16 us clarify at what point you remain Canadian while 17 being exportable. It's a very important question in 18 terms of, obviously, financing. It's interesting that 19 yesterday ACCESS raised the fact that they had 20 important U.S. markets for their educational materials. 21 We spoke this morning about educational informational 22 programming and lifelong learning materials produced by 23 Canadians. 24 5114 A learning culture about just 25 Canadian subjects is another angle at this point, but StenoTran 1132 1 let's be specific about documentaries, their 2 exportability as a funding mechanism. In so doing, do 3 they become then increasingly less Canadian? 4 5115 MR. FRASER: I'm sure Jim is itching 5 to speak to that. 6 5116 We hold to our position that it may 7 be easier to say than to do, although I think it can be 8 done, that the primary audience intended for the 9 program should be a governing factor, should be a 10 determining factor. 11 5117 There's quite a significant 12 difference between -- in the case of the Tom Harpur 13 project, Tom Harpur's believers of looking through his 14 eyes, his knowledge, his experience at the great 15 spiritual leaders of the world and someone else coming 16 along from another country and having a production that 17 goes somewhat along the lines in saying well, we can 18 get some points in Canada if we hire Tom Harpur to 19 stand up in front of the camera and say a few words. 20 5118 I think we can figure out which is 21 which and tell the difference. 22 5119 We also in our various submissions 23 have talked about a two tiered approach to funding. We 24 have been priming the pump in this country for a long 25 time, going back to the CFTC days when I was StenoTran 1133 1 foolhardedly making feature films. 2 5120 I think it worked. We now have a 3 healthy production industry that can stand on its own, 4 that makes products for the international marketplace 5 that is very successful. There are companies that do 6 both. Some of them are publicly traded huge 7 enterprises that make distinctively Canadian programs 8 and make programs for the export market. 9 5121 We think that those programs that are 10 made for the world market principally, they couldn't 11 happen unless they had funding from other countries, 12 are in a different envelope from those programs that 13 are driven by cultural imperatives and are made 14 primarily for Canadian audiences, although we hope that 15 others would like to see them as well. 16 5122 We have suggested that there be two 17 kinds of -- two approaches to this kind of funding. We 18 know that we have made some progress in that direction 19 and in many ways it's happening and it's happened in 20 some respects, but we think that this is a very good 21 way of making a division and answering your question as 22 to who gets what. 23 5123 If the objectives are to get more 24 Canadian programming for Canadian audiences on our 25 screens, we know that programs substantially won't be StenoTran 1134 1 made without funding from public sources whereas the 2 other kinds of programs, documentaries included some of 3 them, are playing in a different ball park. 4 5124 COMMISSIONER PENNEFATHER: But one of 5 your proposals, I think, is that broadcasters rather 6 than funding agencies should determine which programs 7 receive funding. Perhaps you should explain how that 8 would be accomplished and in whose hands we place 9 perhaps that kind of decision. 10 5125 MR. FRASER: The question caveats, 11 the broad issue we believe is that that creators, 12 producers and broadcasters who agree to exhibit those 13 products should make the decisions as to what gets 14 broadcast and what gets funded. This is in some ways a 15 reaction to the industrial strategy which we have seen 16 all of the funds go through where they looked at and 17 made decisions about funding based on the exportability 18 and the international marketing potential of those 19 programs and they tended to favour programs with 20 international marketing potential. 21 5126 We think that has succeeded. That's 22 one caveat. The other important caveat is that we need 23 to be mindful, as the Commission has been reminded 24 several times here this week, of the fact that there 25 needs to be rules put in place that safeguard the StenoTran 1135 1 situation when a broadcaster is also a producer or 2 vice-versa to avoid the potential possibility of 3 self-dealing so that all producers have a fair chance 4 of getting their product exhibited. 5 5127 COMMISSIONER PENNEFATHER: So what 6 this means is that producers should have access to 7 production funds directly. 8 5128 MR. FRASER: Yes. 9 5129 COMMISSIONER PENNEFATHER: With 10 safeguards. 11 5130 MR. FRASER: Yes. 12 5131 COMMISSIONER PENNEFATHER: This is 13 your proposal. 14 5132 On page 6, again a funding question, 15 of your written submission, could you just explain what 16 it means, paragraph 4.1, the last sentence: 17 "We recommend, therefore, that 18 the support for documentaries be 19 continued and increased by 20 allocation of a greater and 21 specially dedicated share of the 22 total funding envelope to 23 documentary producers." 24 5133 Just to be clear, which envelope are 25 you referring to, the 20 per cent or a portion or the StenoTran 1136 1 20 per cent? What envelope is that? 2 5134 MR. FRASER: We think that there 3 ought to be a new envelope created for documentaries, a 4 new category for documentaries, and the documentaries 5 shouldn't be included in the 6, 7 and 8 or 7, 8 and 9 6 category -- 7 and 8 I suppose is where they presently 7 fit -- that documentaries are such an important way of 8 telling Canadian stories that they should have their 9 own category in terms of the Commission's set of 10 categories and with that their own funding envelope. 11 5135 Now, we know that the Commission 12 doesn't set the funding parameters. 13 5136 COMMISSIONER PENNEFATHER: Yes. 14 5137 MR. FRASER: But we do know as well 15 that the Commission can determine that documentaries 16 play a larger role in prime time exhibition. Were that 17 the case, if broadcasters were required to broadcast 18 more documentaries in prime time, that would drive the 19 funding to that category, to that envelope. 20 1400 21 5138 We don't want to take money away from 22 anybody else. We think drama is important and so are 23 the other categories. We feel that documentaries are 24 getting short shrift in the present environment. 25 5139 COMMISSIONER PENNEFATHER: So I am StenoTran 1137 1 clear, documentaries should be included in under- 2 represented categories or documentaries should be their 3 own category? 4 5140 MR. FRASER: Well, they certainly 5 should be represented in the underrepresented category, 6 but better still would be to have a category of their 7 own which was given a high priority. 8 5141 COMMISSIONER PENNEFATHER: And where 9 is this funding mechanism, at CTF or where? 10 5142 MR. FRASER: Well, it would be a 11 rebalancing of the funds as they now exist if we create 12 a new category for documentaries. 13 5143 COMMISSIONER PENNEFATHER: This 14 morning we spoke with the Canadian Independent Film and 15 Video Fund, with whom I am sure you have been working 16 on some projects and they have been talking about the 17 possibility of BDU putting a portion of their benefit 18 contribution into other funds other than CTF. Is this 19 something that you -- 20 5144 MR. FRASER: We would support that. 21 5145 COMMISSIONER PENNEFATHER: You would 22 support that. 23 5146 Speaking of support or non-support, I 24 was interested in your position on the CAB's approach 25 to focus on establishing goals for viewing levels for StenoTran 1138 1 Canadian programming. What is your comment on this 2 proposal? What would it mean for Vision and for 3 documentaries? 4 5147 MR. FRASER: Did we take a position 5 on the CAB's -- 6 5148 COMMISSIONER PENNEFATHER: I am 7 asking you what you think it is. 8 5149 MR. FRASER: You are asking for a 9 position? 10 5150 COMMISSIONER PENNEFATHER: Yes. 11 5151 MR. FRASER: I suppose, as others 12 have said, if we made numbers the chief criterion for 13 determining what kind of things -- what gets broadcast, 14 I suppose we could do very well by creating a Canadian 15 Jerry Springer or a Canadian Bill Clinton and just 16 broadcasting it wall to wall. We would certainly get 17 the viewers. 18 5152 As many have said, it is not just 19 numbers, it's quality. It is what it does for the 20 audience. It's perceived value by the audience. 21 5153 One of the things that is special 22 about our viewers, which are not huge in number as 23 everyone knows, is the loyalty that they have to what 24 we produce and broadcast because it means something in 25 their lives. StenoTran 1139 1 5154 So, we are not enthralled with the 2 idea of -- it's a bit like the wag the dog kind of 3 phenomenon. We are not enthraled with the idea of the 4 largest number of viewers, the lowest common 5 denominator driving the system. 6 5155 MS DEVERELL: Could I add something 7 to that? On the other hand, since I am one of the 8 people who mentioned numbers, numbers are not 9 inconsequential. We have been in business for 10 years 10 and one of the ways that we stay in business is by 11 having sufficient numbers, but it is a kind of a 12 balancing act. I think that we all -- all of the 13 participants in the system have a responsibility to 14 engage in that balancing act. You have your programs 15 that drive the schedule and that allows you a certain 16 margin of risk for things that have fewer numbers. And 17 if you stick with those things they may do extremely 18 well. 19 5156 We have a show that draws frequently 20 more than 100,000 that some people said would never get 21 flies because it is just a bunch of people sitting 22 around the parlour piano, but we believed -- and it is 23 produced in Victoria. We believed that was a viable 24 concept and we stuck with it until it has substantial 25 audiences. StenoTran 1140 1 5157 So, I think it is incumbent on all of 2 us to do that balancing act. It is not that things 3 must have huge numbers or they must have puny numbers. 4 It's a balancing act. 5 5158 MR. COLE: If I could just add to the 6 numbers there. The numbers quite often for that 7 program exceed 100,000 viewers on a regular basis. It 8 is one of our top-rated programs. 9 5159 COMMISSIONER PENNEFATHER: Thank you 10 very much. 11 5160 I have two other questions. The 12 first is, if you consider the recommendations you have 13 brought to us there is a mix of issues that we can deal 14 with directly as the CFTC and which remain with funding 15 agencies. In the end, what would you like to see us 16 come out with at the end of this hearing, the CFTC? 17 What are you looking for from us? 18 5161 MR. FRASER: Three things. One, that 19 you continue to stay in the game of regulation for some 20 considerable time. One could foresee a future in which 21 in a digital universe where access is not an issue that 22 regulation can relax quite a bit. In fact, we have 23 recommended that there be a different regulatory regime 24 for systems in which access is not an issue, as 25 compared to those in which it is. StenoTran 1141 1 5162 So, one is to stay in the game and, 2 two, is access, which is still in a limited universe of 3 carriage capacity of great importance. All channels 4 are not equal and I don't think I need to labour that 5 point. 6 5163 And, three, to find ways of making 7 documentaries a more important part of the Canadian 8 broadcasting mainstream. 9 5164 COMMISSIONER PENNEFATHER: Very 10 quickly, if in fact we pursue that so the documentaries 11 are an important part of the conventional mainstream, 12 how will this affect your business? 13 5165 MR. FRASER: We don't call ourselves 14 a documentary channel. We do many things, but the 15 documentaries that we do -- and I will ask Jeanette 16 Loakman to talk about the documentary she did -- come 17 from independent producers across the country. 18 5166 Our mandate is to reflect the 19 spiritual and cultural diversity of Canada. We find 20 that the best way of doing that is to go to independent 21 documentary producers who are trying to tell, not sell 22 their stories, who are working out of passion. 23 5167 Jeanette Loakman made a documentary 24 in which she just -- she couldn't get anybody to 25 support her. She just did it because she had to do it. StenoTran 1142 1 Many of our documentaries are made by people who just 2 have to tell those stories. They are important. They 3 are passionate and more often than not they touch very, 4 very deeply on spiritual values and that's our mandate. 5 5168 So, as it turns out -- and the 6 documentary is a very important part of what we do. 7 5169 May I ask Jeanette to tell her story? 8 5170 MS LOAKMAN: I think what Vision 9 enabled me to do was to be able to tell the story, not 10 sell the story. I never got any funding for it, apart 11 from monies from them to be able to finish it. 12 5171 The story is very important. It is 13 about women reshaping the new South Africa. Back in 14 1995 after the elections, South Africa had a chance to 15 reinvent itself and many of the stories coming at that 16 time were from journalists looking for conflicts, 17 whether it be tribal war or rugby. 18 5172 I wanted to find out really what was 19 happening. So I went down there, shot the film, came 20 back and I found a lot of great stories of women doing 21 stuff at the community level and actually making change 22 in their country. 23 5173 If I had not gone and shot that 24 nobody would have given me the money to do it. I think 25 the story was relevant to people and women in Canada StenoTran 1143 1 because South Africa mirrors a lot of what Canada has. 2 We are a country where a lot of immigrants come to. In 3 fact, we are mostly immigrants if you think about it. 4 5174 The story was relevant to Canadians 5 and as a storyteller and this is one part going back to 6 what is Canadian or not, as a film-maker I had a 7 distinct advantage in that Canada is well known for 8 peacekeeping. Canada is well known for not colonizing 9 anybody and I was given a lot of access that I wouldn't 10 have had otherwise. 11 5175 Going back to the points that we are 12 trying to make here which I haven't forgotten -- 13 5176 COMMISSIONER PENNEFATHER: You have 14 made it very well. That's fine. Nothing speaks 15 stronger than the film itself, than the creative 16 artist. 17 5177 MS LOAKMAN: I think the more 18 opportunity we have to tell stories, the more that 19 people will understand what is going on in the world 20 and also what is going on in the world around them. 21 5178 COMMISSIONER PENNEFATHER: This 22 brings me to where I would like to stop my questions to 23 all of you. Perhaps Mr. Fraser can take the lead. I 24 think Ms Loakman has started us off well. 25 5179 Yes, Vision has led the way in terms StenoTran 1144 1 of diversity in programming, in staffing, in financing 2 of projects in this country, but I would ask you to use 3 the word "vision" a little differently now and speak to 4 a broader vision in terms of the broadcasting system in 5 this country. Do you have some comments for us on how 6 to assure greater diversity within the system as a 7 whole? What are the steps that should be taken in that 8 regard? I think we have some challenges ahead and in 9 the midst of all of these discussions about 10 programming, Canadian programming and other questions 11 we have had, how should we address the issue of 12 diversity in the conventional broadcasting system? 13 5180 MR. FRASER: I think, first of all, 14 we have demonstrated and so have others that niche 15 broadcasting works -- it meets real needs of real 16 people and is successful and can thrive. There are 17 access issues involved. 18 5181 I remember a discussion back when I 19 was on the Broadcasting Task Force 10 or 12 years ago 20 about how to deal with the private sector of 21 broadcasting. There was an argument being advanced at 22 that time that why don't we just let them do what they 23 like, run American programs wall to wall and just tax 24 them and give the money to the CBC and to TVO and other 25 Canadian provincial not for profit broadcasters. StenoTran 1145 1 5182 Wisely, we didn't make that 2 recommendation. We agreed that the whole system should 3 meet the needs of the country, all of the parts of the 4 system, public, private, not for profit needs to make a 5 contribution to the Broadcasting Act's goals of having 6 Canada reflected to Canadians. So, a very important 7 element in terms of the documentary which we feel very 8 passionately about, as I think you might have gathered 9 by now, is simply the matter of shelf space. 10 5183 Many people have said you can't 11 succeed in getting audiences for programs if you don't 12 put the programs where the audiences are. You can have 13 wonderful programs and put them in shoulder times or 14 day parts or late night parts and they might do 15 reasonably well, but they are not doing anywhere near 16 what they ought to do. 17 5184 So, if the Commission and I think it 18 is within your mandate can make judgments about the 19 access to shelf space where the audiences are for 20 documentaries, we don't want to affect or close down or 21 in any way negatively impact all of the good work that 22 is being done in drama and other forms. We think that 23 the documentary as a peculiarly Canadian form developed 24 in this country is underrepresented in a very serious 25 way because we know that the response that we get to StenoTran 1146 1 our documentaries is remarkable. It is passionate and 2 it's intense. 3 5185 If some of those kinds of 4 programmings could become part of the mainstream I 5 think that they would have a tremendous impact. 6 5186 COMMISSIONER PENNEFATHER: Thank you. 7 5187 MR. HANLEY: I wonder if I could just 8 say that in terms of the conventional broadcasters 9 running documentaries, one of the things that I have 10 always believed in because many years ago before I was 11 an independent producer, producing primarily for 12 specialty channels -- they didn't even use the term 13 then -- broadcaster. I was the General Manager of 14 Programming at TVOntario some 25 years ago. 15 5188 I realized then that it was multiple 16 viewings of these kinds of programs that gave a program 17 its career. So, in fact, if the conventional 18 broadcaster is regulated and has to show some 19 documentaries, I don't think it will hurt the specialty 20 channel business at all. The second window is there, 21 the third window, the fourth window. 22 5189 As a matter of fact, when we talk 23 about exportability and so on of Canadian 24 documentaries, we currently this year are in production 25 of 42.5 hours of documentary programming. The total StenoTran 1147 1 budget involved is $4.5 million, roughly $100,000 an 2 hour is what we are doing currently and 35 per cent of 3 that is public money. Sixty-five per cent of it we 4 have raised through licences in Canada, multiple 5 licences. Many of these projects are Vision. 6 Sometimes Vision is the second window, sometimes even 7 the third window, but we have sometimes four or five 8 windows in Canada and in each instance, or in almost 9 every instance substantial distribution advances from 10 international distributors or foreign sales. 11 5190 These are documentaries that in no 12 way have been compromised in their Canadian integrity 13 at all because in many instances they are based on 14 serious Canadian work, like a Tom Harper book, or in 15 another case a curriculum out of the University of 16 Alberta or the University of Guelph and we are doing 17 that kind of stuff. 18 5191 But when you go to the table with an 19 international partner or distributor and you say you 20 have got 50 or 60 per cent of your budget together, or 21 even 50 per cent is enough for you to say, "you come in 22 with this." You control that project. 23 5192 COMMISSIONER PENNEFATHER: Thank you 24 very much. 25 5193 That completes my questions, Madam StenoTran 1148 1 Chair. 2 5194 THE CHAIRPERSON: Commissioner 3 Cardozo. 4 5195 COMMISSIONER CARDOZO: Thank you, 5 Madam Chair. 6 5196 Before I start, I wanted to ask Rita 7 Deverell a bit more about your program "Skylight." If 8 you could tell us a little bit about how you see -- you 9 refer to it as a human affairs program and how you see 10 that as something that contributes to the overall what 11 we see on television that you would do with Vision that 12 others would not do for whatever reason or would not 13 consider doing. 14 5197 MS DEVERELL: The term "human 15 affairs," interestingly enough, came from Jim Hanley in 16 our first year. We use it as a distinction between 17 human affairs and current affairs, although "Skylight" 18 is a daily magazine with an ethical perspective on 19 current issues. 20 5198 But what we attempt to do with the 21 show is to go to the depth and ethical dimension of 22 those current issues, the human critical dimension far 23 more than the news dimension. So, that's the 24 distinction. 25 5199 The other thing that we attempt to do StenoTran 1149 1 with that is not to be making a string of "ain't it 2 awful" programs. The first focus statement that we 3 drew up for the genre was Canadians in their multi- 4 faith, multicultural and geographic diversity who are 5 finding some solutions to big problems. 6 5200 MS NOLES: I think it is also 7 important to remember there the size of the audience 8 that this program is getting because it is clearly 9 providing something that people are looking for in the 10 television schedule. 11 5201 I think that Dave Cole has the 12 numbers for it, but we have drawn, as Rita noted, 13 audiences of around 100,000 for specific specials and 14 regularly draw 30,000 viewers Monday to Friday. 15 5202 MR. COLE: If I could just give a 16 number to that. The first show, the Rwandan Special, 17 had a total reach of 127,000 people and an average 18 minute audience of 97,000, so it's very high numbers. 19 5203 COMMISSIONER CARDOZO: Thank you. 20 5204 I want to ask the two producers you 21 have brought in your group, Jeanette Loakman and 22 Gretchen Jordan-Bastow, if you can just give us a 23 thumbnail sketch. Don't tell us any stories out of 24 school necessarily, but how you developed a 25 relationship with Vision in terms of at what point did StenoTran 1150 1 you go to them and at what point did they kick in some 2 cash, who else supports the project, just in a fairly 3 generic way without telling us too many secrets. 4 5205 MS JORDAN-BASTOW: I will speak to 5 that first if Jeanette doesn't mind. Vision has -- 6 because of the nature of my work Vision has acquired 7 and been involved in numerous of my projects. But a 8 very good example to bring to this hearing is the 9 difficulty of putting together the six-hour series 10 which showcased films and film-makers of western 11 Canada. 12 5206 I use that as an example because the 13 whole reason I did that was to create a venue, so that 14 these people could be seen and these talents that never 15 got shown could be shown. No one was interested. It 16 took six years to put that project together. It did 17 its job because now almost every broadcaster is showing 18 Canadian independent films. Eight years ago that was 19 not the case. 20 5207 In order to put that together and get 21 the cable fund and meet the criteria for the 22 percentage, I had to have a coalition of five 23 broadcasters, including a national window and Vision 24 was very, very approachable and very easy to work with 25 and they helped make that happen. In fact, they have StenoTran 1151 1 on numerous occasions, with myself and other producers, 2 shared windows with other broadcasters and in some 3 cases doing a launch in unison to make it work. They 4 have been very helpful to myself and many of the 5 producers in going an extra mile to help get our 6 programs on air and help us navigate a very difficult 7 jungle of obstacles. 8 5208 I wanted to add very quickly that two 9 years ago when "Through the Lens" first aired, I 10 personally had 32 calls on the first viewing, saying, 11 "My God, I had no idea of the talent and the volume of 12 films." This was with episode one. 13 1420 14 5209 The point that I am trying to make is 15 that there is a huge wealth of Canadian talent, 16 Canadian stories, and it is not being shown and it 17 would not be shown if we didn't have the specialty 18 channels and shows like Vision because we are pretty 19 much blocked from the main broadcasters and the bigger 20 licence fees that Global could generate, that CBC 21 generates, et cetera. 22 5210 That would help a lot to have those 23 open, but I really applaud Vision for their consistent 24 partnership -- and I say "partnership" -- with the 25 independent producers because they really are our StenoTran 1152 1 allies and in many cases, if it weren't for Vision, we 2 wouldn't get our programs on air. 3 5211 Thank you. 4 5212 MS LOAKMAN: I would like to also 5 back up what Gretchen says. In fact, in my case, it 6 wasn't a case of selling a story, it was a case of 7 telling a story. I went out of my way, I financed 8 shooting the story myself. I came back with the 9 footage. I managed to finish it, Part I of it, through 10 a grant from the National Film Board, and by meeting 11 Paul de Silva, who backed me, at least giving me enough 12 money to finish the film; without that, it would still 13 be lying around in tapes underneath my bed or 14 something. 15 5213 So Vision needs to be there, 16 especially for the younger, for the independent, for 17 the people who still have the passion to go out without 18 worrying about trying to bring in various elements in 19 order to satisfy various cultural/financing 20 opportunities. 21 5214 Vision is needed. Vision works for 22 me. 23 5215 MR. HANLEY: Vision also urges 24 mentoring kinds of programs. Often, a young filmmaker 25 will come with an idea or a program maker will come StenoTran 1153 1 with an idea to Vision, and maybe Vision feels that 2 they might need a little bit of guidance. In many 3 instances, one in particular, a huge success last year 4 for us steered them our way -- because we are a little 5 more established company. We are still a small 6 production company, but we do have some facilities and 7 some experience. So we were able to help this person, 8 with the assistance of Vision, make their film. We 9 certainly didn't make any money on it at all, but we 10 helped her make her film, and it was an extremely good 11 one. 12 5216 So Vision goes way out of its way to 13 do that kind of thing. 14 5217 COMMISSIONER CARDOZO: Paul deSilva, 15 did you want to add anything in terms of your role as 16 the head hon-cho in terms of dealing with independent 17 producers? 18 5218 MR. deSILVA: Just to clarify, I am 19 the head hon-cho of a very small area, but I have a lot 20 of help in that, and I think this is very key, we have 21 representatives on the east coast and the west coast. 22 So the access point is, you know, very accessible, if I 23 can say that, as well as the fact that the very ethos 24 of Vision is to reflect and develop diverse voices. In 25 fact, if I can get a plug in for our Gemini StenoTran 1154 1 nomination -- 2 5219 COMMISSIONER CARDOZO: You guys have 3 taken a lot of plugs in the last few minutes, but go 4 ahead; what's one more. 5 5220 MR. deSILVA: One quick one. 6 5221 It is illustrative of the fact that 7 the strand that is nominated is called "Voices". It is 8 a Tuesday night strand. We have a theme on every 9 night. So that's the strand that produced several 10 documentaries that have gotten recognition for that. 11 5222 I think what is key to this is the 12 ability to be able to take risks and the ability to 13 work whatever we can in terms of the system, in terms 14 of funding. I think Commissioner Penneafather's 15 question about our documentary -- I think it is a very 16 important thing for us to reinforce. 17 5223 Very quickly, the example of 18 Jeannette's film, Jeannette had shot it, she had to go 19 through the whole process of going to the Cable Fund, 20 to Telefilm, to CIFV, to tax credits, the usual game, 21 the dance that is so debilitating for producers. The 22 film was shot. With some money from us she was able to 23 finish it and produced a terrific film. 24 5224 So, for me, one, I am helping 25 Jeannette, yes, but it is also a very good deal for us StenoTran 1155 1 because very often what we do is take a big risk when 2 we extend a licence fee to somebody because we never 3 know if that film is going to get financed, because 4 they still have to go to Cable Fund, Telefilm, tax 5 credits, et cetera. So we may want desperately to have 6 that film in our schedule for the next season, but if 7 the funding isn't there, it ain't going to happen. 8 5225 So that's a reinforcement in terms of 9 establishing envelopes for documentary and increasing 10 the value of documentary in the system. 11 5226 MS LOAKMAN: May I also just go back 12 to the subject of Vision -- 13 5227 COMMISSIONER CARDOZO: Sure. 14 5228 MS LOAKMAN: -- and how it helps me 15 as a producer? 16 5229 One of the things about Vision is 17 that it does have quite an open programming mandate. 18 It is about matters of spirituality. It doesn't have a 19 defined strand. 20 5230 In the world of producing 21 documentaries, one often has to fit into the mandate of 22 a strand, and Vision is very open with that. It is not 23 that I have to suddenly put a scientific spin on it to 24 sell it somewhere. I don't have to suddenly put a 25 historic spin to sell it somewhere. I can tell the StenoTran 1156 1 story that I found or the story that I want to tell. 2 5231 COMMISSIONER CARDOZO: Thanks very 3 much. 4 5232 Lastly, I just want to come back to 5 Fil Fraser and follow up on a question that 6 Commissioner Pennefather had asked at the end with 7 regards to diversity. That's one of the issues we are 8 looking at, is how the broadcasting system and 9 broadcasters, conventional broadcasters, should reflect 10 the cultural diversity of the country. You seem to do 11 it fairly well through your operation. 12 5233 Do you have recommendations as to how 13 others could do that, or would you rather they didn't, 14 so that it was your forte? 15 5234 MR. FRASER: Ten years ago, in March 16 of 1988 -- I think you were there -- I chaired the 17 National Forum on Multiculturalism in Broadcasting in 18 Toronto, funded by what was then the Department of 19 Communications. We had representatives of all of the 20 major broadcasting groups, English and French, in 21 Canada come and talk about their plans for having their 22 organizations both on air and off air to reflect the 23 reality of the country we live in. 24 5235 I think that we have made some 25 progress since then, but I think that we have a long StenoTran 1157 1 way to go. 2 5236 COMMISSIONER CARDOZO: Is it really a 3 big deal? Does it cost a lot? Is it impossible to do? 4 You seem to be able to do this stuff -- 5 5237 MR. FRASER: For us, it is no issue. 6 We don't think about it. It just happens that way 7 because our doors are open. 8 5238 In my perception, it is not what you 9 do as much as what you fail to do. We just don't 10 exclude any ideas or any possibilities or any people. 11 I think that it is not unreasonable to suggest that in 12 some cases people are, by one means or another, 13 excluded from being in the game. 14 5239 Now, Commissioner Cardozo, you are 15 asking me to go down a very slippery road here because 16 the Commission has tools and it is in your mandate to 17 require that broadcasters reflect diversity. We think 18 that that's an area of your mandate that perhaps needs 19 some attention, and I think that occasional statements 20 from the Commission addressing those issues will have 21 an impact. I think that they could be a little more 22 frequent and a little more powerful. 23 5240 Let me stop and invite Rita Deverell, 24 who has been there at Vision certainly all along, to 25 bring a perspective on this that I may not have. StenoTran 1158 1 5241 MS DEVERELL: I think also, in 2 Commissioner Pennefather's earlier question, there was 3 buried the notion that if conventional broadcasters got 4 heavily into the documentary business, would that put 5 us out of business, and I think the answer is "no". 6 5242 There is a significant place for all 7 of the parts of the system to work together on this 8 issue. The Commission does have the tools to steer 9 conventional broadcasters that way. But clearly, when 10 we are talking about large budget documentary series, 11 that's the territory of conventional broadcasters. 12 When we are talking about series, that's the territory 13 of conventional broadcasters. 14 5243 As you have heard, we are very good 15 at the one-off, labour-intensive, the-door-is-open, 16 Victoria-to-Yarmouth -- this is where are two regional 17 offices are. That's very hard for conventional 18 broadcasters to do. And the more they do that job, the 19 more we can do our job, which is our niche, 20 spirituality, and people come to us, filmmakers come to 21 us with those projects because they are dead on their 22 mandate. 23 5244 That small format -- and by "small", 24 I don't mean "insignificant", as we have kept saying, 25 but there is room for everybody as long as the tools StenoTran 1159 1 are in place to do that job. 2 5245 COMMISSIONER CARDOZO: Thanks. 3 5246 MR. deSILVA: May I add a very quick 4 addition to that -- and no plugs, I promise, in this 5 comment. 6 5247 Rita's comment about it being our job 7 I think is very, very important here because I think 8 this question of reflecting diversity, which also goes 9 back to Commissioner Pennefather's earlier question and 10 yours, Commissione Cardozo, is that in the broader 11 system I believe it is at the moment nobody's job, 12 quite frankly. No one is charged with that to reflect 13 diversity. There is I think in principle support for 14 the idea, but I think a phrase was used earlier, "if it 15 can't be measured it is not there", and I think the 16 other phrase is, if it is everybody's job, it is 17 nobody's job I think in the system. 18 5248 The examples I think it may be worth, 19 just for the record, to have perhaps examined are the 20 establishment of particular departments for cultural 21 diversity in Channel 4, for instance, the BBC, SBS in 22 Australia. When Channel 4 established its Department 23 of Cultural Diversity and Multiculturalism, there was a 24 fear that it would ghettoize those programs, that all 25 programs that had a cultural diversity aspect to them StenoTran 1160 1 would only be sent to that department. But the actual 2 truth of the matter, the result was that when it 3 started to attract audience, the BBC decided that it 4 had to get into the game as well. That netted in a 5 tremendous increase in terms of work for producers from 6 diverse backgrounds, subject matter that wound up on 7 the network and a general increase in the diversity of 8 the system. 9 5249 I put forward that as a suggestion to 10 be examined for increasing diversity in the system as a 11 whole. 12 5250 THE CHAIRPERSON: Counsel. 13 5251 MS PATTERSON: Thank you, Madam 14 Chair. 15 5252 It would be useful to know, if as you 16 propose the Commission were to establish documentaries 17 as a separate category, would you be willing to accept 18 the definition used by Telefilm Canada as a working 19 definitionfor that category? 20 5253 MR. FRASER: Yes. 21 5254 MS PATTERSON: Thank you. 22 5255 Also, I believe it was Mr. Hanley who 23 first mentioned the letter recently received by you 24 from the Canadian Television Fund. Would you be 25 prepared to file that with the Commission by the 15th StenoTran 1161 1 of October? 2 5256 MR. FRASER: I certainly would be 3 happy to do that. I have a copy right here. We have 4 many copies. I had the impression you might have had 5 it already, but I will walk it right across the room. 6 5257 MS PATTERSON: Excellent, thank you. 7 5258 Thank you, Madam Chair. 8 5259 THE CHAIRPERSON: Thank you. 9 5260 Thank you, ladies and gentlemen, for 10 your patience and waiting for us till after lunch. 11 5261 MR. FRASER: We thank you, and thank 12 you for giving us good attention. Merci. 13 5262 THE CHAIRPERSON: Madam Secretary, 14 would you invite the next participant, please. 15 5263 MS BÉNARD: Thank you, Madam Chair. 16 5264 The next presentation will be from 17 the Canadian Independent Film Caucus. 18 5265 THE CHAIRPERSON: Good afternoon, 19 madam, sir. Proceed when you are ready. 20 PRESENTATION / PRÉSENTATION 21 5266 MS COHEN: Good afternoon, and thank 22 you for inviting the Canadian Independent Film Caucus 23 to address you at these important hearings. 24 5267 My name is Barri Cohen. I am a 25 longstanding member of the Canadian Independent Film StenoTran 1162 1 Caucus and I am on the National Board and part of the 2 Policy Subcommittee. My colleague with me today is 3 Geoff Bowie, who is also a longstanding member, 4 National Board member and on the Policy Committee, and 5 I must say also primarily responsible for the bulk of 6 the research and development of the brief that you 7 would have read and that we submitted to you. 8 5268 I am going to speak for a few moments 9 and then I will pass it on to Geoff; and then, if there 10 is time, hopefully I could summarize some of the 11 recommendations that you would have before you. 12 5269 The Canadian Independent Film Caucus 13 is a not-for-profit association of more than 300 14 filmmakers and producers from across Canada, in 15 chapters from Vancouver to Halifax, whose primary 16 production activity is documentary. It was founded in 17 1983 by 14 filmmakers, newly independent from the 18 National Film Board of Canada, who came together to 19 fight the policy at Telefilm's new Broadcast Fund at 20 that time that excluded documentary programs from any 21 investment funding. 22 5270 It took us two years, but we fought 23 and won that battle, the first of many. Indeed, since 24 then, on our watch, a happy coincidence shall we say 25 has occurred: the growth in documentary form, its StenoTran 1163 1 diversity, the growth in windows here and abroad -- 2 also, I must say that I take some personal pleasure in 3 this sort of documentary day today before the 4 Commission. Having been a participant in a number of 5 interventions since 1993, I must say this is probably 6 the first time I have come across even the mention of 7 the word in so many briefs across the industry. So I 8 am quite pleased about that personally. 9 5271 Our members, many of whom are indeed 10 also members of the CFTPA, are not publicly-traded 11 companies, as you probably could gather, they are not 12 vertically integrated; they are small- and medium-sized 13 artists and entrepreneurs of a very broad range. Some 14 are indeed mini studios who make a mix of documentary, 15 one-offs, miniseries, documentary, light fare, magazine 16 shows, to dramas for prime time, movies of the week, 17 current affairs and educational programs. But the 18 majority are filmmakers who will spend, as you have 19 probably gathered from what you have heard already 20 today and from some of the case studies in our brief, 21 anywhere from two to five years or more in some cases, 22 almost single-handedly researching, fundraising, 23 filming and delivering their programs to broadcasters. 24 5272 Indeed, one of jobs has been arguing 25 for and defending a style of documentary, or shall I StenoTran 1164 1 say a representation of documentary in prime time that 2 has only in recent years made its appearance. 3 5273 For us, the definition of 4 "documentary" -- and we always know these things when 5 we see them, but I will take a stab at it. We have 6 circulated for a number of years and we have had 7 tremendous input into the Canadian Television Fund's 8 definition, both the one used by the Cable Fund 9 previously and Telefilm Canada, and that is -- so I am 10 amending; it is not amending that, I am adding to that: 11 "an entertaining and politically 12 and intellectually challenging 13 storytelling form where story, 14 dramatic structure, character, 15 theme, in a singular vision or 16 filmmaking style, are in myriad 17 ways as every bit as complex, in 18 construction and form, as drama 19 and features." (As read) 20 If you sat and edited for six months, you would know 21 that, that you are basically constructing a story, 22 almost ex nihilo in some cases. 23 5274 Our subject matters are drawn from 24 filmmakers' personal, political and aesthetic 25 commitments and passions. This means addressing human StenoTran 1165 1 issues, as Ms Deverell put it, about the world and 2 about Canada with a rooted Canadian perspective that, 3 in many cases, is and should be made explicit. People 4 talk about the Canadian perspective to programming; it 5 is one that should be made explicit within the course 6 of the program. 7 5275 The core of our recommendation to 8 you, as echoed by various interveners, is something we 9 have tried for almost three years to draw to your 10 attention, and that is the inclusion of documentary as 11 an eligible content category under Option B in the 12 exhibition requirements; in other words, as 13 entertainment in the prime time schedule. 14 1440 15 5276 We have noted that this has been 16 supported by, among others, the DGC, the CFTPA, the 17 Canadian Association of Broadcasters and others. I 18 think Alliance and Craig as well. The intent is to 19 bring these films, obviously, to Canadian audiences. 20 5277 Now, before I turn it over to Geoff, 21 I just want to say a few other remarks. If the goal of 22 the system is to increase the amount of high-quality 23 Canadian content and cultural content available in 24 broadcasters' peak period schedules and if a key 25 problem is how to afford this now and into the future, StenoTran 1166 1 then it's our position that the relatively low cost and 2 high quality of documentaries is not the solution, but 3 one very viable solution. 4 5278 Now, rather than list the many points 5 we support in the interventions, particularly of the 6 Director's Guild of Canada, the CFTPA and others at 7 this point, I would like to turn over to Geoff now, who 8 will share with you an e-mail that we received recently 9 from a fellow documentary filmmaker from Quyon, Quebec, 10 not far from here, actually, who is a member of our 11 organization. While perhaps this e-mail is a bit 12 lacking in sophistication, we appreciated his honesty 13 and his fresh perspective and we hope you do, too, and 14 take it in the spirit in which it was intended and also 15 to demonstrate that we are not just a dry bunch of 16 filmmakers. 17 5279 Geoff? 18 5280 MR. BOWIE: This letter came through 19 the e-mail the other day. I will skip the introductory 20 paragraph. It comes in: 21 "When my wife and I take stock 22 of everything the Canadian 23 Association of Broadcasters is 24 recommending, a strangely skewed 25 upside-down picture takes shape. StenoTran 1167 1 It's worse than our farm house. 2 The corners don't meet, the 3 proportions are all off and it 4 shouldn't even stand up. 5 First, the CAB really thinks 6 the private broadcasters should 7 carry less Canadian programming. 8 They want a 200 per cent time 9 credit at night for anything 10 that appears to be Canadian. 11 This effectively cuts the number 12 of shows by half. Then they 13 want an additional 150 per cent 14 time credit in the day, plus 15 they want to eliminate 2.5 hours 16 of daytime Canadian content for 17 every additional half hour of 18 identifiably Canadian 200 per 19 cent time credit entertainment 20 programming, they add in prime 21 time and they want infomercials 22 to count as part of their Cancon 23 obligations. It makes you want 24 to shake your head. 25 They ask for this ability to StenoTran 1168 1 reduce the amount of Canadian 2 programming at a time when more 3 than 75 per cent of their peak 4 period entertainment programming 5 right now is filled with 6 American programming. They 7 reason this reduction of 8 available Canadian content will 9 somehow result in more Canadians 10 watching Canadian shows. This 11 really made the house spin. 12 It's like we are living in a 13 Buster Keaton movie. 14 When the CAB dreams at 15 night, they must see the largest 16 Canadian television stations 17 broadcasting one really great 18 expensive Canadian show and the 19 whole national watching and for 20 maybe an hour a day we all 21 remember who we are and where we 22 are and take pride in our 23 feeling of community. It's like 24 that line about washing. We 25 take a bath twice a year whether StenoTran 1169 1 we need it or not. 2 Did I say expensive? Yes, 3 that Mountie show is expensive 4 and the stockbroker show. They 5 are both pretty dear, I bet, but 6 not for the private 7 broadcasters. They would pay 8 less for their super-Canadian 9 Mounties and stockbrokers. They 10 don't want their licence fees to 11 nudge a decimal point above 20 12 per cent of the cost of the show 13 and they sure want to continue 14 their free money deal at the CTF 15 where the licence fee top-up 16 paid by the CTF counts as part 17 of their Canadian program 18 spending obligations. That's a 19 good one. 20 Then with those licences 21 low, they want to invest equity 22 and they want that to be 23 deducted from their Canadian 24 program expenditure 25 requirements, too. Pretty StenoTran 1170 1 risky. Then there is promotion. 2 If they spend anything on 3 promotion on their Canadian 4 shows, even those don't worry 5 there is no sign they are 6 Canadian Canadian shows, they 7 want that to be excluded from 8 their allowable hourly 9 advertising time, count toward 10 their expenditure obligations -- 11 and the wife went crazy over 12 this one -- count towards their 13 Cancon exhibition requirements, 14 too, and they do it with a 15 straight face. 16 Don't forget now, from the 17 way I read the Commission's 18 figures, the private guys are 19 asking for these expense-saving 20 measures while their profits 21 have climbed by 52 per cent over 22 the last five years, thank you 23 very much, and their investment 24 in Canadian entertainment 25 programs in that time increased StenoTran 1171 1 by, get this, one per cent. 2 I know the Broadcasting Act 3 has a phrase about maintaining 4 strong and economically viable 5 private broadcasting interests, 6 but what about all those other 7 phrases, cultural sovereignty, 8 national identity, the airwaves 9 as a national public resource, 10 the importance of a strong 11 independent production sector, 12 and I don't mean just a few big 13 companies publicly traded and 14 vertically integrated, but a 15 strong sector in all of its bio- 16 diversity made up of all kinds 17 of companies, including mine. 18 Hello. The Commission's job 19 is more than improving the 20 bottom line of the private 21 broadcasters and their corporate 22 expansion. That's right, 23 corporate expansion. Despite 24 the success of the independent 25 production sector and the StenoTran 1172 1 private broadcaster's chronic 2 allergy to produce Canadian 3 appearing entertainment 4 programming, they now imply the 5 only way to make successful 6 distinctly Canadian programming 7 is if they produce and 8 distribute it themselves. If 9 they get their hands on public 10 money to make their own 11 television shows, independent 12 filmmakers might as well take up 13 cod fishing. A lopsided, loopy 14 picture, indeed. That's the way 15 I see it, anyway. 16 I hope this is of some help. 17 Good luck." 18 5281 That was the letter we got. 19 5282 MS COHEN: Thank you, Geoff. We 20 promised anonymity. I hope you understand why. 21 5283 Just to bring our remarks here to a 22 conclusion, the outcome of this Canadian television 23 policy review has to, obviously, lay a strong and solid 24 structural foundation for the broadcaster, the BDUs, 25 technology providers and the independent production StenoTran 1173 1 sector players to move into the future as equal 2 partners, rather than warring combatants. This cannot 3 be achieved by following the American model of 4 encouraging greater and greater consolidation and 5 vertical integration. This is a losing game for Canada 6 as even our biggest only become their smallest. This 7 approach will lead to the further Disneyfication of the 8 world and withering away of the diversity and 9 distinctiveness of Canadian cultural expression. 10 5284 Now, with that in mind, just to 11 briefly summarize our conclusions, if I can just find 12 them here, one certainly that we mentioned was the core 13 of including documentaries in Option B -- I think it's 14 the 7:00 to 9:00 categories -- and having either a 15 separate category, as Vision recommended. Certainly, I 16 think that's the way to go. That was in the brief. 17 5285 The other thing is that private 18 broadcasters exhibit 50 per cent Canadian content and 19 cultural content during peak hours and that news 20 essentially not be included in that time frame. So, 21 from 6:00 to 7:00 the time credits that they are 22 getting, and from 10:00 11:00, that should be seriously 23 rethought at the very least. 24 5286 Licence fees. You have heard a lot 25 about licence fees. No doubt you will continue to hear StenoTran 1174 1 a lot about licence fees in large part because you have 2 provided the evidence for us to make these arguments 3 that the licence fees, the overall expenditures, even 4 in the disaggregate form or the undisaggregate form, is 5 not adequate proportional to profits. We need this 6 kind of investment today and in the future, both to 7 meet new technology challenges and also to maintain the 8 diversity in the system and that the exhibition 9 requirements should be primarily supplied by 10 independent producers. 11 5287 In terms of access to the funds, 12 these broadcasters should not have direct access to 13 these funds; in other words, that only public and 14 private continue to be accessed through us. We would 15 also say that we wish to maintain the benefits package 16 on the transfer of ownership. This has been really 17 crucial for us in the past. 18 5288 Certainly, to take a very obvious 19 example, the creation of the Rogers Documentary Fund, 20 which, as you will see at least in one of our case 21 studies, if not in a few of them, was pretty important 22 in supplementing funding. I think also this money can 23 be used to help in the transition to digital, something 24 that you have raised earlier in the day, and that there 25 needs to be some kind of accountability in the system; StenoTran 1175 1 for example, the situation of Vision TV being moved up 2 sort of on the dial. I think we speak for most 3 Canadians and most consumers that there seemed to be no 4 accountability around that manoeuvre. 5 5289 I think I will stop there at this 6 point and turn it over to you for questions. Thank 7 you. 8 5290 THE CHAIRPERSON: Thank you, Ms. 9 Cohen and Mr. Bowie and the gentleman from Quyon. 10 5291 Commissioner McKendry? 11 5292 COMMISSIONER McKENDRY: Thank you, 12 Madam Chair. 13 5293 Good afternoon and thank you for 14 spending your Saturday afternoon with us. We 15 appreciate you taking the time. 16 5294 You mentioned your cases studies and 17 you tied the case studies to the Rogers fund that 18 exists for documentaries. I wanted to start off by 19 asking you about the cases. I found them interesting 20 and you do make the point that they suggest a number of 21 points for us and I guess you just provided me with one 22 of those points. 23 5295 I am just wondering if you can take a 24 couple of minutes and review those case studies. Are 25 there any other points? For example, I don't think the StenoTran 1176 1 Rogers Fund is explicitly mentioned in your written 2 brief. Is there anything out of those case studies in 3 particular that you want to bring to our attention? 4 5296 MR. BOWIE: I think one of the points 5 about the case studies is that kind of mix of funding 6 elements that are there, that are necessary. None of 7 the films get made simply. Shelley Saywell's film has 8 two broadcasters, one Canadian, the CBC, and one 9 Finnish TV. Telefilm is involved, LFP is involved, the 10 Rogers Fund is involved and CBC had equity in the 11 project. 12 5297 The neverending referendum had three 13 broadcasters involved, the National Film Board, 14 Telefilm, Cable Fund. There is really a blend of 15 public and private, but the public money that is there 16 is just crucial to every case study. I think anything 17 we can do to streamline and make it easier to finance 18 these shows without having quite so many sources will 19 certainly be more efficient. 20 5298 Now often a lot of time goes into the 21 financing of the project and then the creative part 22 gets squeezed down. As soon as the financing is in 23 place, you have to deliver the show fairly quickly. 24 So, I would say that I emphasize the importance of 25 public money being available for this kind of StenoTran 1177 1 production. 2 5299 In the case studies there is sort of 3 a variety of how attractive the documentaries are for 4 the international market. I think you spoke earlier 5 with Vision about distinctively Canadian shows and the 6 super-Canadian emphasis and how do we make shows for a 7 Canadian audience that also appealed to an 8 international audience because you might need a large 9 funding base drawing on international partners in order 10 to get the show done. 11 5300 There is no easy solution to that, 12 but I think that we should be as Canadian as we can be 13 and that's what we have to contribute to the 14 international scene as the Canadian perspective. It's 15 not like Canadian subjects will not interest anybody in 16 other countries. I think Canada, even the fact that we 17 know more about the United States than anywhere else in 18 the world is probably a valuable contribution to make 19 to the rest of the world. 20 5301 I don't know if I have answered your 21 question. 22 5302 MS COHEN: I would just like to add 23 to that that it underscores, I think, symptomatically 24 one of the recommendations that we have, which is that 25 licence fees are too low excluding equity, but if you StenoTran 1178 1 have a larger player, then you are not necessarily 2 chasing $5,000 from SCN or $8,000 from this educational 3 broadcaster and juggling your different windows. 4 That's sort of endemic to the system to a certain 5 degree, but, yes, they can be rationalized to a certain 6 extent. 7 5303 Higher licence fees is one way to do 8 it, but it also will have other, I think, implications, 9 which is that if there can be a concomitant lowering of 10 contributions from the Canadian Television Fund, then 11 you have more funds available for hopefully more 12 productions. We know the pie is a limited pie, but one 13 of the ways in which, I think, to make the most of it 14 is to make the broadcasters carry their fair weight 15 with respect to what other broadcasters in the world 16 are paying with similar markets. So, that's certainly 17 one thing. 18 5304 COMMISSIONER McKENDRY: You mentioned 19 streamlining the number of sources, which I take it to 20 be reducing the number of sources because it's complex 21 and time-consuming to put together a package. What 22 would be the key recommendation you have with respect 23 to streamlining? 24 5305 MR. BOWIE: I would say that higher 25 licence fees is the biggest part. Certainly I think StenoTran 1179 1 our position is the best way for a broadcaster to 2 prioritize their project at any of the funds is by 3 giving it a higher licence fee and that way it's easier 4 to fund and it will be funded more quickly and they can 5 guarantee their show will be done if they boost the 6 licence fee. I would say that would be the first and 7 foremost recommendation. 8 5306 COMMISSIONER McKENDRY: Thank you. 9 5307 Now I want to pick up on a point you 10 made where you said that your documentary should be as 11 Canadian as we can be. I was a bit perplexed and I am 12 going to ask you to help me with page xvii of your 13 submission. I want to make sure that I understand this 14 correctly taking into account the comments you have 15 made. I am looking at paragraph 77, the last sentence, 16 and I will quote it: 17 "But with documentaries, 18 agencies should not restrict the 19 definition of Canadian content 20 to programs that are exclusively 21 shot in Canada, and limited to 22 Canadian subjects." (As read) 23 5308 To use an extreme example to make my 24 point, I take that to mean that it would be possible 25 that a Canadian could go to Australia, the Canadian StenoTran 1180 1 could shoot a documentary about the impact of 2 deforestation of eucalyptus trees and koalas and then 3 have the documentary recognized as Canadian content. 4 Under your recommendation, in fact, it would qualify as 5 150 per cent Canadian content. 6 5309 Now, I have two questions flowing out 7 of that. Just above making that statement you 8 criticize "Nikita" and "Sci Factor" as not being 9 distinctively Canadian. My first question is: How do 10 you reconcile your position on documentaries taking 11 into account the example I gave you with your position 12 on the documentaries such as "Nikita" and so on? 13 5310 MS COHEN: I think there is always 14 going to be judgment calls on these things and while we 15 have received assurance from the Canadian Television 16 Fund -- informally received assurance that the same 17 criteria they have been using to show flexibility 18 around the definition of "documentary", they do intend, 19 they have said again informally, to extend that for us 20 so that there will be an understanding that a Canadian 21 crew that is interested in, say, something that is of 22 broad international importance of some kind would be 23 considered Canadian. 24 5311 I think the problem with what I call 25 the AmeriCancon, the "Sci Factors" and the femme StenoTran 1181 1 "Nikitas" and so on, apart from the fact that it has 2 allowed at least one company to be enormously 3 capitalized on our dollars and while it has had 4 tremendous benefit keeping an industry going and 5 keeping people skilled and all of that, it hasn't 6 really added anything to our sort of general sense of 7 ourselves. What I think we want to move towards with a 8 definition of a Canadian documentary is one in which 9 the filmmaker's point of view and perspective as a 10 Canadian -- I don't care what kind of hyphenated 11 Canadian, but as a Canadian is brought to bear on the 12 subject matter. 13 5312 Now, with respect to your example in 14 Australia, the question that would have to be asked, 15 even in a so-called market-driven fund -- it's not 16 going to be adding up a bunch of points really, but the 17 question that would have to be asked is: Does that 18 issue or story have international relevance? Does it 19 have relevance for Canadians? Do we have our own 20 deforestation issues that have to be dealt with? What 21 are the links between deforestation in Australia and 22 deforestation in B.C.? Those are the kinds of links. 23 5313 I am not saying necessarily following 24 a story in B.C., although that may be a perfect thing 25 to do. Some of the constraints of the system can StenoTran 1182 1 create creative solutions. First of all, I don't know 2 why a broadcaster would be interested in deforestation 3 in Australia solely or the depletion of cod fishery in 4 Portugal when we have our own tragedy to talk about, 5 unless it's a comparison and an inclusion. 6 1500 7 5314 I think it would not be difficult to 8 make these distinctions. There will always be 9 challenges. There will always be a film or a program 10 that will push against the envelope, especially if it 11 is produced by high profile producers. 12 5315 There is the politics of this system 13 which has to do with the higher profile producers who 14 get to traipse across the world and do as they wish 15 because they win the awards, they get the dough, and 16 all of that. Whereas the up and comers and maybe the 17 Jeannette Loakmans don't because she does not have that 18 kind of profile. 19 5316 I must say that that does enter into 20 the overall ecology of the system. 21 5317 MR. BOWIE: I want to add that if you 22 imagined a "Nikita" or a "psi Factor" not being shot in 23 Canada, then what do you have? You have no benefit. 24 5318 The difference in production 25 logistics -- you have a small documentary crew that can StenoTran 1183 1 go away to a foreign country and shoot something from a 2 Canadian perspective. I support what Barrie said about 3 if it is Australian deforestation, then it had better 4 be connected. The Canadian perspective has to be there 5 in some way or else it is not a Canadian documentary. 6 5319 COMMISSIONER McKENDRY: So I take it 7 the criteria, in your minds, would not be quite as 8 stark as they are set out in paragraph 77. There would 9 be the Canadian perspective element that should be 10 taken into account. 11 5320 MR. BOWIE: Yes. I think we go on, 12 in paragraph 78, to clarify that those are the criteria 13 that we mean. 14 5321 I think the real intention of the 15 super-Canadian regulation is for the "psi Factors" and 16 the "Nikitas" to try to make the drama, which take the 17 lion's share of the money anyway, more relevant to 18 Canadians. They want them to be shot in Canada 19 clearly. Whereas I don't think that should just be, 20 holus bolus, applied to documentary. I think the 21 documentary tradition has certainly never been that 22 every documentary that gets made has to be shot in 23 Canada in order to be Canadian. 24 5322 COMMISSIONER McKENDRY: On this 25 point, if I understood Mr. Fraser in the previous StenoTran 1184 1 panel, clearly they were discussing the same situation 2 in the context of Canadian documentary makers being 3 able to go outside the country and shoot a film outside 4 the country and get recognition for it. 5 5323 I took it that his position was that 6 the criteria should be the primary audience. I think 7 he said the primary audience should be the determining 8 factor. 9 5324 I took from that that if the 10 filmmaker is going out and has in mind that the primary 11 audience will be Canadians, that that would be 12 sufficient. I hope I am not misinterpreting what he 13 said. 14 5325 Does that position have merit, in 15 your view? 16 5326 MR. BOWIE: Yes, it does. Again, we 17 run into the practical problems; that being that with 18 the licence fees as low as they are, if you want to do 19 a series that has a significant budget, it is very hard 20 to raise all the money in Canada. Then you are raising 21 money from U.S. Discovery, or you are raising the money 22 from Channel 4. And they often want to have the 23 subject dealt with from not just Canadian subjects; 24 they want to have a mix of Canadian with other 25 subjects. StenoTran 1185 1 5327 That is a practical problem that we 2 run into, and I guess it is going to be a subjective 3 decision by this board of the CTF, or anybody who is 4 jurying this stuff, to figure out if it is in or out. 5 5328 MS COHEN: It is also a judgment that 6 the filmmaker/producers have with broadcasters prior to 7 application. It is part of the initial story meetings, 8 if you will, about a particular project that a 9 broadcaster may be interested in. 10 5329 COMMISSIONER McKENDRY: You touched 11 on this in your oral comments, and I just want to make 12 sure that we are clear on this in terms of our record. 13 5330 We have been asking people who have 14 been coming before us talking about documentaries -- we 15 want to make sure we understand what they mean by 16 "documentary". 17 5331 As I say, I think you touched on that 18 in your oral comments. 19 5332 Are you happy with the definition 20 that the fund uses? Is that acceptable to you? 21 5333 MS COHEN: Yes, I think so. The 22 question needs to be asked -- how do I put this -- 23 whether it has been applied fully in all cases. That 24 is another issue. 25 5334 I think, in part because we had a lot StenoTran 1186 1 of input into that definition, it is one of the best 2 definitions going right now. So I think, on paper, we 3 are pretty pleased with it. 4 5335 MR. BOWIE: In our intervention we 5 have a footnote saying: 6 "Whenever 'documentary' is 7 referred to in this brief, we 8 mean long form documentary over 9 30 minutes in length. The CIFC 10 and the Canada Television Cable 11 Production Fund do not consider 12 newsmagazine shows, current 13 affairs programs, or extended 14 journalistic pieces under 30 15 minutes as documentaries. The 16 documentary is an art form where 17 story, dramatic structure, 18 character, theme, and filmmaking 19 style are every bit as important 20 as in the dramatic form." 21 5336 I think the fund definition -- I 22 don't think it is as clear as this, but it is saying 23 the same thing. 24 5337 COMMISSIONER McKENDRY: You mentioned 25 that the fund has not been applied fully. I was not StenoTran 1187 1 clear what you meant by that. 2 5338 MS COHEN: I would have to do a 3 proper analysis of that to be fair. 4 5339 But there have been perhaps one or 5 two cases where certain things that some people would 6 have not considered documentaries got funded. To talk 7 about one or two cases, I don't think is fair, because 8 overall it has been. It has been a fairly well applied 9 definition. 10 5340 There have been a few instances 11 wheren the nature of the production team and the 12 viability of the project I think outweighed any 13 concerns around definition. 14 5341 COMMISSIONER McKENDRY: So your 15 message is that the definition should be rigorously 16 adhered to by the people administering the fund. 17 5342 MS COHEN: Yes. 18 5343 COMMISSIONER McKENDRY: And then you 19 are happy with the definition, or at least you can live 20 with the definition as long as it is rigorously adhered 21 to. 22 5344 MS COHEN: Yes. 23 5345 COMMISSIONER McKENDRY: As I 24 mentioned, we have been asking people who come before 25 us how they define a documentary. You touched on this StenoTran 1188 1 in your opening comments; that you were pleased to see 2 that there were many more parties than you are 3 accustomed to talking about documentaries and being 4 supportive. 5 5346 What do you think is underlying this 6 wave -- I don't know how big this wave is, but this 7 wave of interest, I suppose, from a regulatory 8 perspective in documentaries? What has changed? 9 5347 MS COHEN: Apart from the fact that 10 it is a boom; that everyone is talking about a boom -- 11 5348 Geoff, do you want to step in here? 12 5349 MR. BOWIE: Yes. I think with the 13 development of specialty TV particularly here and in 14 the States, as well as in England, Channel 4, A&E, the 15 Learning Channel, the Discovery Channel, the History 16 Channel, as well as the CBC, TV Ontario and Vision, 17 they are all -- 18 5350 It is true that documentary people 19 work hard; they put a lot of effort into getting into 20 the subject in some depth, and they can do it 21 affordably. 22 5351 I think that makes a lot of sense for 23 a lot of broadcasters, and it is drawing audiences. I 24 think that is probably the main reason for this 25 increased interest. StenoTran 1189 1 5352 There is never enough money; so the 2 more you can get out it, the better. 3 5353 MS COHEN: I personally have not done 4 this analysis. I don't know if you thought through 5 this. 6 5354 But if you actually looked at the 7 amount of money spent and the kinds of audience 8 returns, I think it is probably not a bad bang for 9 buck, as the expression goes. 10 5355 You don't want to clearly overload 11 the system with it as a way of fulfilling Canadian 12 content, if that is the subtext of your question. 13 Clearly that would be a concern of fulfilling Canadian 14 content with nothing but documentaries. 15 5356 I doubt that is going to happen. It 16 would be nice, but I doubt that is going to happen. 17 There should be diversity. And it wouldn't be 18 appropriate either. 19 5357 But because we recommend also that 20 prime time nightly, three hours, goes to Canadian 21 production, what we are basically saying is: Increase 22 the window; increase the demand. There should be, 23 hopefully, enough to more or less go around of quality 24 -- not just anyone who wants to produce anything, but 25 of quality -- and create a healthy environment of StenoTran 1190 1 competition for that quality. 2 5358 As you know, the industry has grown 3 enormously, and that competition is there. 4 5359 The other thing I would say, though, 5 in terms of this boom is that it is a boom in a certain 6 type of documentary as well. There is some concern 7 about the longer form, more traditional Film Board 8 style documentary that was supported, which is still 9 what filmmakers wish to do. There is some pressure on 10 that because of downward pressure on licence fees and 11 because of, in some cases, not enough time being 12 devoted to research and development and getting into 13 the subject; and also some resistance, in a very 14 general sense, on the part of broadcasters allowing 15 some broadcasters -- certainly not Vision and TV 16 Ontario -- that distinctive Canadian, or shall I say 17 filmmaker perspective in the work. 18 5360 I am splitting hairs here about 19 genres, distinctions within the broader genre. 20 5361 Anyway, this boom is not here; it is 21 also elsewhere. It is in Europe as well. There is a 22 boom in nature programming, and it is driven by 23 specialty channels who have just done a tremendous 24 amount, particulary Discovery. 25 5362 MR. BOWIE: I want to add that the StenoTran 1191 1 biggest lack, which is fairly clear in our document, is 2 on the private conventional broadcasters. There is 3 practically no documentary. We don't know if there is 4 a barrier in the way that Option B has been worded up 5 until now; and if that can change, there is the 6 possibility that they will be more interested in 7 documentary. 8 5363 We certainly don't know if that is 9 the case. But at least if that barrier is removed, 10 then it is a level playing field. 11 5364 COMMISSIONER McKENDRY: It is your 12 view that if we only remove that barrier, that would 13 not be going as far as you would like us to go in terms 14 of what you hope we will do in this proceeding. 15 5365 MR. BOWIE: Yes. I think it is a key 16 thing; very simply, that documentary be included among 17 the entertainment categories. But also there are 18 licence fees, benefits packages, and the other 19 recommendations that we have made that I think will 20 help. 21 5366 MS COHEN: And increasing the window 22 in prime time. 23 5367 MR. BOWIE: The key thing we are 24 looking for with the CTF is that the documentary is no 25 longer in the 20 percent category but is part of the 80 StenoTran 1192 1 percent category. The broadcaster can decide what they 2 want to make. 3 5368 COMMISSIONER McKENDRY: The Canadian 4 Association of Broadcasters told us they are willing to 5 pay performance bonuses to producers whose programs 6 perform better than anticipated. 7 5369 Is that something that you would 8 support? 9 5370 MR. BOWIE: Yes, it is a very good 10 idea. 11 5371 COMMISSIONER McKENDRY: Would you 12 support the other side of the coin; that if they don't, 13 there is some sort of -- 14 5372 MS COHEN: No. That is the risk of 15 licensing something. 16 5373 What would they suggest? What would 17 the levy, the punishment be? 18 5374 COMMISSIONER McKENDRY: I don't think 19 they did suggest that. 20 5375 MR. BOWIE: No, they didn't. I think 21 rewarding success is a good idea. If you have too many 22 failures, then you are not going to be asked to do 23 anything else. 24 5376 MS COHEN: But all things being 25 equal. It depends on promotion. There are a lot of StenoTran 1193 1 complex factors in what is going to draw an audience. 2 5377 One thing that is true about the 3 private broadcasters is that once they make a 4 commitment to a documentary, the few times that Global 5 has, or the few times that CTV has -- the basic 6 conventional private broadcasters -- their promotion is 7 very good. 8 5378 I cannot say that about all of them. 9 And that is key. So all things being equal, 10 performance should be in tandem with promotion 11 performance too. Then let's see what kinds of rewards 12 accrue. 13 5379 COMMISSIONER McKENDRY: Thank you 14 very much. Those are the questions I have for you. 15 5380 Thank you, Madam Chair. 16 5381 THE CHAIRPERSON: My recollection is 17 that the CAB did suggest some type of negotiated 18 default. I assume that that is what you say; that you 19 have taken the risk by deciding ahead what you think 20 you are going to achieve with the program you license 21 and that should be sufficient. 22 5382 MS COHEN: It is a partnership. They 23 have been telling us that it is a partnership all the 24 way along, and the partnership should also extend to 25 reaching the broadest audience possible. StenoTran 1194 1 5383 THE CHAIRPERSON: I cannot find the 2 reference right now. 3 5384 COMMISSIONER McKENDRY: Madam Chair, 4 when it did come up on the record -- it may have come 5 up from the Canadian Association of Broadcasters, but 6 Mr. MacMillan from Alliance pointed out to us that he 7 in fact had entered into arrangements with broadcasters 8 where he had agreed to accept a lower fee if in fact it 9 did not perform as well as it should. 10 5385 At the same time, he said he had in 11 the same deals negotiated a performance bonus. 12 5386 I cannot really recall whether CAB -- 13 5387 MS COHEN: Hypothetically, if such a 14 thing were to be instituted -- I mean, it's one thing 15 to expect a very well-cushioned creature like AAC to 16 take such a thing. We are not well-cushioned that way. 17
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