ARCHIVÉ -  Transcription - Hull, QC - 2001/04/17

APPLICATION / APPLICATION

48 MR. FECAN: Monsieur le président, madame la vice-présidente, mesdames et messieurs les conseillers, personnel du conseil, mesdames et messieurs, bonjour.

49 Mon nom est Ivan Fecan et je suis président et chef de la direction de Bell Globemedia et chef de la direction de CTV.

50 Before we begin our presentation, I would like to introduce the best team in television anywhere, and one that I am very proud of serving with.

51 On my right is Trina McQueen, President and Chief Operating Officer of CTV;

52 On my left is Susanne Boyce, President, CTV Programming and Chair of the Media Group, CTV;

53 On my far right is Alain Gourd, Group Executive Vice-President, Corporate of Bell Globemedia.

54 Beside him is Kirk LaPointe, Senior Vice-President of News, CTV.

55 Behind me, starting on my left, is Robin Fillingham, Chief Financial Officer and Chief Administrative Officer of Bell Globemedia; Kathryn Robinson, Legal Counsel, Goodmans; Dawn Fell, Group Vice-President, Human Resources, Bell Globemedia; Elizabeth Duffy-MacLean, Vice-President, Strategic and Regulatory Affairs, CTV.

56 At the side panels, beginning on your left: Rich Lewchuk, Vice-President, Program Planning and Promotion, CTV; Bobby Culbert, Vice-President, Documentaries, CTV; Ed Robinson, Vice-President, Comedy and Variety Programming, CTV; Bill Mustos, Vice-President, Dramatic Programming, CTV; Johanna Lunn Montgomery, Head of Independent Productions for Atlantic Canada; CTV.

57 Beginning at the next side table: Louise Clark, Head of Western Independent Productions, CTV; Robert Hurst, Senior Vice-President, CTV and General Manager, VTV; Jim Macdonald, Consultant; Rita Fabian, Senior Vice-President, Sales and Marketing, CTV; and Allan Morris, Vice-President, Engineering at CTV.

58 In the audience here with us today from the CTV family are: Rick Brace, President of NetStar and Senior Vice-President of CTV Sports; Ken Murphy, President, Discovery Channel; Rob Dilworth, Vice-President, Research, CTV; and Barry Kiefl, Consultant.

59 We also have with us the CTV station managers from across the country, who will be more appropriately introduced to you on Friday during the local station presentation.

60 Commissioners, we sit before you with pride in what we have accomplished, with your help, over the last seven years: through the union of companies with illustrious traditions, such as Baton, Electrohome and NetStar; through acquisitions such as ATV in the east and CFCN Calgary in the west; through start-ups such as SportsNet -- which, regrettably, we are selling -- VTV, TalkTV, NewsNet, Comedy and Outdoor Life; and through the CTV television network, which itself has been transformed from a 40-hour-a-week fractious co-op to a truly national service.

61 Through this, under the banner of CTV, we have created one of Canada's great broadcasting companies. We are now backed with the stability of strong, public-minded shareholders, BCE and the Thomson family, who have recently made the largest benefits contribution in Canadian broadcast history, infusing $230 million into the broadcasting system.

62 It is a great story, a great adventure -- one in which you, the Commission, have played a role. We are grateful for that role and for your trust in our extended team. We have earned your trust and will continue to do so.

63 However, the adventure continues and while our story has a few plot twists ahead, we have a clear vision of how to achieve our goals. We have a sense of palpable excitement about the magnificent opportunities ahead for our audiences. As a company, one or our greatest strengths has been the ability to morph, to be flexible, to be agile, and to be nimble. This continues to serve us well.

64 We also have the humility to know there are daunting challenges ahead. Fragmentation and competition continue to increase while the economy cools, and there are concerns about the diminution of Canadian voices in an environment where trade and technology are eroding national cultural barriers and media mergers in canada and around the world are becoming commonplace.

65 We never could have imagined, when CTV sat before you at the last licence renewal hearing, what these past seven years would bring. It is equally hard to imagine what will happen during the next licence term.

66 Given the accelerating rate of change, what will the world of communications look like in 2008? Will the Internet mature into a defined medium in its own right? What other technological advances will come along and change everything again?

67 How can we harness whatever the digital era of convergence brings, and how can we as a company stay relevant and connected to our audiences? How can we continue to be one of the mirrors that reflects our country, its regions and its people to each other?

68 While it is impossible to foresee the future, we need to move forward with confidence, guided by our principles and beliefs, and backed by the resources to succeed. We at CTV believe in Canadian programming. We believe in editorial freedom. We believe in serving our communities. We believe in quality. We believe in our audience and their desire for intelligent and entertaining programs. And, as you know, we believe in taking risks on talent.

69 We try to put these beliefs into everyday practice, and we take our responsibility as leaders seriously. These beliefs and principles form the foundation for the CTV of the future.

70 Now, with this as our storyline, I would like to ask Trina McQueen to present our plan.

71 MS McQUEEN: Mr. Chairman and Commissioners, this episode of our great Canadian story has a starring role for a new player: the CRTC's Television Program Policy. That policy sets the stage for the next seven years and gives us all a part to play.

72 Our goal at CTV is simple, and it is difficult. We want more people to watch our Canadian programs. We want to erase the difference between good business and good popular culture. We want to produce and present high quality, high audience mainstream news and entertainment.

73 Notre vision est claire. CTV se distinguera par son excellence. L'avenir est plein de promesse; c'est à nous de saisir les occasions qui se présentent.

74 For us, those opportunities are in four particular program genres: news, both local and national; drama, especially movies; documentaries; and variety and comedy.

75 These are four genres that Canadians love to watch. They are four genres that CTV loves to do, and they are four genres in which we have a great track record and a talented team of programmers. And, very important, they are genres which can be produced anywhere across the country. And that is exactly what we are going to do.

76 Every licence renewal makes its own particular history. As you said, Mr. Chairman, this one starting today is the first opportunity for the Commission to evaluate the plans of the English station groups against its new policy.

77 CTV is not here to ask for changes, or relaxations, or tweaking, or a little bit different here or maybe a little less there. We are simply here to tell you how we will meet the objectives of the policy.

78 The policy was born from your thoughtful deliberation after an exhaustive hearing process, and the decision is a remarkable one. It breaks new ground.

79 For the first time in Canadian television history, each broadcaster can develop a vision and a style of its own, within a simple, but very challenging, regulatory framework.

80 We accept your challenges. We have reorganized our resources and our spending. We have built an infrastructure to support the CTV vision of a popular service based on news, drama, documentaries, comedy and variety.

81 We are planning for success. We ask only for some time and some consistency. We know that may be a lot to ask. Every special interest group in broadcasting in the country will be before you this week, each one wanting more in their own particular area of interest. Each of their goals is worthwhile.

82 In sum, they represent the complete rewriting of the policy and the abandoning of its central principles.

83 The Commission knows that the reality of the broadcast future and Canadian success in that future is complicated. Let's look at that complicated reality, set out in the slides on your monitors.

84 The first slide shows the great Canadian zero-sum game. For 40 years our broadcasting system has been adding new programs, new stations, new services. And for 40 years the percentage of viewing to Canadian programs has stayed remarkably, insistently, frustratingly the same.

85 There have been dramatic shifts in what people watch. In the last 25 years the original broadcasters have steadily lost viewers. The original five -- CBC, CTV and the three American networks -- used to have 90 per cent of the viewers and today they have 30 per cent.

86 By contrast, the newer conventionals and specialties started out with 10 per cent of the audience then and today they have 70. The lines have truly crossed and the fragmentation will continue. There will be more conventional stations and there is the big bang of the 50-plus digital channels coming this fall.

87 It's true that CTV and Global still have the largest individual shares on Canadian television, but our competition is intense and the competition is increasing. Even our considerable specialty assets do not provide the full answer. The combined CTV and Global families of services, conventional and specialty are very close.

88 CTV's specialty services bring us only slightly above Global with Prime and its second conventional network, Advantage. It would be wonderful if our specialty channels, which take so much viewing from our conventional, could bring all the advertising dollars with them, but unfortunately the market still discounts specialty, paying much less per view.

89 More competition is coming. More than half of Canadians are on the Internet now and they spend hours every week online. We think that online team will only grow. We do face also new technologies. Inventions like personal video recorders actually jeopardize the fundamental advertising model of television.

90 The evolution of technology is an opportunity, but it's also a threat. But all those bright new services and shiny new technologies are just pygmies beside our traditional competitor, which is American television. It is still the colossus and this chart shows how it describes Canadian programs.

91 Our programs, the ones in reds, do well at news times, but in prime time when the best U.S. network programming is available, Canadian programs face a daunting challenge. This chart shows the mountain that Canadian programs have to climb, but we are climbing that mountain.

92 The previous regulatory policies may not have developed all that we wanted in way of Canadian audiences, but they have been extraordinarily successful in developing a new generation of Canadian television talent and there is evidence that the talent and the new regulatory regime are starting to have an effect.

93 There has been a debate around this hearing about how much Canadian television Canadians watch -- not want but watch. Whatever that universe is, CTV is significant in it. In fact, CTV accounts for 40 per cent of the viewing to English Canadian television programs and more than 50 per cent in peak periods.

94 There has been a 14 per cent audience increase for our Canadian programming in the last 18 months and more than half of that has come in this program year, starting in fall 2000, the first year of the new regulatory framework. Coincidence? We think not.

95 This next chart is very important. It represents data that is more recent than that data released by the CRTC, namely the fall of the year 2000. Please note that this is Ontario data because that is the only way we can obtain comparable audiences.

96 With that background, CTV is pleased to announce that in this fall we have achieved the number one position in average audiences for Canadian drama and comedy, ahead of Global and ahead of CBC. Here's how we did it.

97 With high quality Canadian programs like this, programs whose numbers rival American television, this is an impressive list, but we are not pretending that the job is done. This achievement is fragile and the task is very difficult, but these are signs of hope.

98 CTV has four ways to build on that hope. We can build with a consistent application of the Canadian television program policy which allows us to focus on the audience. We can build with our strong and supportive new ownership. We can build with the powerful talents of Canadian producers, performers and journalists and we can build with the skilled and committed team of programmers at CTV.

99 Talking about skill, here is Susanne Boyce, President of CTV programming, to tell you more about building success.

100 MS BOYCE: Mr. Chairman, Commissioners, we have an incredible slate of programming in development to bring the TV policy to life.

101 Our vision includes a CTV that is not simply a buyer of priority programming. CTV sees itself as a creative partner in the process. We have a great team, some here and some unable to be here today. Our regional development offices, together with our Programming Department, play an important role in nurturing the success of each project.

102 In Toronto, it's people like Bill Mustos for dramatic programming, Ed Robinson for comedy and variety, Bob Culbert for documentaries, Rick Lewchuk for many things. In the Atlantic region, Johanna Lunn Montgomery and from western Canada, Louise Clark.

103 Louise and Johanna are well known to regional producers, supporting them and working with them every step of the way. In fact, this energetic team has made CTV the creative partner of choice. And, rather than just talk about it, we wanted to take you behind the scenes and share with you the individual stories of writers, directors and producers whose dreams became reality on CTV.

--- Video Presentation / Présentation vidéo

104 MS BOYCE: Sometimes we have to take risks and we believe in risks. Last year we commissioned a new animated children's series when a talented young producer knocked on our door --

--- Video Presentation / Présentation vidéo

105 MS BOYCE: We are also proud of our track record in bringing tough stories to our audience, often through supporting emerging producers. CTV is conscious of the need to reflect the diverse, multicultural fabric of Canada, a rich source for our past, present and future stories. One study story is "Island of Shadows", a documentary about racism.

--- Video Presentation / Présentation vidéo

106 MS BOYCE: New dramatic series are the hardest things to do in television. CTV and Bell Globemedia are avid supporters of the Canadian Film Centre's "Writers in Residence " program. We know that the investment in new talent will pay off, sometimes sooner rather than later.

--- Video Presentation / Présentation vidéo

107 MS BOYCE: These are wonderful examples of the creative partnership between CTV and the creative community. We intend to continue to build on our successes.

108 MS McQUEEN: Some of Susanne's creative building plans, Commissioners, include CTV's marvellous opportunities to combine the strengths of our various services. You asked us for information about those synergies and opportunities and we have good news to report. We are already creating innovative, new experiences for our viewers. We would like to give you a sneak preview of a big event we are planning this fall, when, in a way, we will go back to find the future.

--- Video Presentation / Présentation vidéo

109 MS McQUEEN: We are proud to be the broadcaster that "gets it". DeGrassi will be a major convergence event for us, and you will hear more about those plans in that respect in the next months. And we are even more confident about this approach since our great experience with the movie "Lucky Girl". "Lucky Girl" which we broadcast on April 8 was an emotionally-jarring, imaginative movie about a real-life problem -- teenage gambling. It was a big hit, with 1.4 million viewers. And we believe it was so successful because of our ability to make it a convergence event.

--- Video Presentation / Présentation vidéo

110 MS McQUEEN: So models of the future for CTV programming. And, on the journalistic side, with its distinguished record of past and present successes, there are new thoughts about that future too. Our Senior Vice-President of News, Kirk LaPointe, will share some of those thoughts with you.

111 MR. LaPOINTE: Thank you, Trina.

112 Mr. Chairman, Commissioners, CTV has become a leader in news programming, connecting with the viewers at both the national and local levels. Our leadership spot we feel is earned every day, all across the country, in the face of all kinds of intense competition for the loyalty and the time of our audience. But the new landscape means that every major news organization in the country plans to strengthen its news service; that many new Canadian and foreign news options have been introduced into the Canadian market with more plans in store, and that news sites on the web, both Canadian and foreign, are posing big competition.

113 In these challenging circumstances, CTV has to keep pace with changes in other major news organizations and with the new kids on the block. Indeed, as the number one source for news, we must be the leader in change and innovation. We have taken a number of measures that we think are doing that, giving Canadian news audiences more meaningful and more diverse news programming.

114 This past year, CTV launched its news website, ctvnews.com, with material and streaming video stories of both national and international interest with the ability for viewer to participate and offer feedback and to receive their news when it is convenient.

115 Last week we were pleased to announce five new international bureaus to open in the fall, bringing our international complement to ten, and that will be the largest number of any Canadian broadcaster. The new bureaus will be in Los Angeles, Mexico City, Nairobi, New Delhi and Sydney, with a price tag of $12 million.

116 We have also announced, under the BCE/CTV benefits package, plans to hire 15 journalists specializing in the important fields of health and science broadcasting, who will be placed in local newsrooms across the country.

117 In its news, CTV is committed to maintaining and strengthening diverse editorial voices. The editorial independence of each of our stations is a priority for us, in order to provide balanced, unbiased, sensitive and fair reporting of the news. Quite simply, editorial diversity is good for the communities we strengthen and the viewers that we serve.

118 The pace of daily events and the intense competition to break stories makes news a greater challenge than ever. But it is a challenge we will meet, protecting the integrity and diversity of voices as we do.

119 MS McQUEEN: Commissioners, now you have heard about our past, our present and our plans for the future. You have seen the stories that we are bringing to life; stories that make television an even more powerful way to connect with viewers.

120 The Television Policy gives us an opportunity to continue leading the way, and to bring more Canadian viewers to their home screens. We will continue to work with Canadian talent to be their creative partner of choice. We commit to you that we will present high quality programming that reflects Canadian diversity and all the Canadian regions. And we will do this with passion.

121 We started this presentation with a kind of light-hearted notion, some might call it corny, of ourselves as producers, making a story pitch to you as the chief development officers of Canadian television, and we could end with an appeal for you to green light our pitch, and give our production the go ahead.

122 But although we love stories, this is more than a story. It is intensely real. It is about creativity; it is about expression; it is about identity; it is about a better future. It is about true, clear desire of all of us in front of you to do just one thing: to make Canadian television better, so that more Canadians will watch it.

123 We thank you for your kind attention; and await your questions.

124 THE CHAIRPERSON: Good morning and thank you for your presentation, Mr. Fecan and Ms McQueen.

125 I won't say good morning to everyone by name, because you have clearly got us outnumbered here by at least four or five to one. It is the largest panel I have ever seen at one of these things. We would be here until the morning coffee break if we did that.

126 It makes one wonder who is actually running the business.

--- Laughter / Rires

127 THE CHAIRPERSON: I am going to start off with a few questions this morning and then I will hand off to my colleagues. I am going to cover, generally, group issues under group synergies. That is a word that is used a lot these days, synergies.

128 Some of the advertising issues -- I appreciate that some of you noted in your presentation that you are not seeking many changes or tinkering, but others have, so I would like to get your views on some of the advertising issues and where you think some of that is going over the next while.

129 We are talking about licence renewal for possibly seven years. A bit about vertical integration, and then perhaps a few questions with respect to the network.

130 I think you mentioned the term fractious in your opening comments. I recall a number of years ago when Doug Bassett defined a network as a group of people quarrelling. I guess I would like to get a sense, starting off with this group synergies issue, about what your views are.

131 I think your video outlined what some of your ideas were, but I would like to take it in pieces and talk about this notion of synergies and how you expect to get, I presume, from the whole, more than the sum of the individual parts.

132 Talk about it first in terms of the synergies with respect to the group and the television stations, and then perhaps expand that to the specialties, and then perhaps to other aspects of the business, being perhaps the Internet and other unregulated activities, newspapers and so on.

133 Just starting with the TV stations, because, as we have noted, this is the first time we have taken the approach about the group, and in the particular case of CTV in the past we have had the individual quarrellers, I suppose, coming forward with respect to the individual stations, sometimes at the same time, sometimes at different times, when the network itself was being renewed.

134 So I would like to get a sense from you about where you see the synergies; the advantage in terms of CTV, what we historically thought of as the network, and the individual stations -- and that is evolving as we speak, I guess.

135 So perhaps, Mr. Fecan, you could --

136 What I would like to do is have you focus on not just generalities, but specifically what that is going to mean in terms of the objectives and the policies in the Broadcasting Act, and specifically what it means to you over the next seven years.

137 MR. FECAN: Perhaps I could kick it off with a principle or two, and then Trina can focus in on the specifics that you ask for.

138 The key thing for us in terms of synergies is that we see it as an opportunity to enrich the experience for the viewer.

139 Yes, there is some back-office consolidation. I am not sure it is worthwhile having duplicate master control rooms in every television station we own. It is, I think, more productive for people in our regional and local stations to focus on serving their community, as opposed to doing a lot of the infrastructure stuff that may be better accomplished through digitization in one form or another. But the real benefit is how we can increase the experience, enrich the experience, make it more diverse for our viewers by pooling our resources and leveraging them. I think that the "Lucky Girl" example was a terrific example in the flesh, quite recent, of how all of the pieces can come together and I think create a much better whole than you could achieve any other way.

140 MS McQUEEN: If I may offer one principle -- and this is something we are going to be repeating because we think it is the central issue for us at this hearing -- and that is growing the audience. The reason we want to have the richer experience is because we believe that more viewers, and especially a wider cross-section of ages, diverse groups and regions, will produce those audiences if we can enrich the experience.

141 That is the central issue and problem. If we could grow our audiences, almost all of the things that people are talking about in this hearing would be solved. To us, the synergies involved in our various -- I don't know what the right word is. I hate the word assets, but the synergies involved in our various services. The chief one is the intellectual and creative capital that they produce. That is our major currency.

142 I think Ivan always says that CTV, in terms of assets -- the physical kind of assets -- it's like this. What BCE paid that big price for was the intellectual and creative capital that is contained in the broadcaster.

143 So we are still a bunch of people quarrelling, but hopefully what we are doing is quarrelling in a more creative and a more focused and a more constructive way. We believe the debate isn't about winning; it's about coming up with best ideas.

144 So when you ask about synergies, this isn't something we can quantify, but probably the most important synergy is to have the creative and intellectual capital to attack various kinds of issues and to do things better.

145 But there are specific examples, and everyone around this table has some examples of how our stations work together. Comedy probably has been one of the channels that is an example of that, and I would like to ask Mr. Robinson, who has the longest title in Canadian television, to talk about that.

146 THE CHAIRPERSON: Before we go to him, though -- I wanted to take this in pieces and just talk about --

147 MS McQUEEN: Sure.

148 THE CHAIRPERSON: The first part of it was to try to deal with the quarrelling by CTV as the owning -- I presume it was a very deliberate strategy on your part that CTV should own the stations across the country.

149 I wanted to get a sense from you about where you see the synergies at that level, first, in terms of the stations across the country. And then we can overlay on top of that where the specialities might contribute to that, and then perhaps overlay on top of that the Internet and newspapers and so on. But right now I would like you to focus on the stations.

150 MS McQUEEN: Okay. You want to do the broad picture, and we will try to do that broad picture with respect to CTV and its stations.

151 First of all, we have been able, I think, to eliminate the kind of duplication in effort that was part of the formerly -- the famous fractious group.

152 For example, Baton, when it was a service, had an almost complete news service, with reporters on Parliament Hill, with different people arranging American network -- cutting and duplicating American network programs and so on -- to CTV's news service. By being able to eliminate this duplication we were really able to strengthen the individual resources to each station to do their own original, essentially local, journalism.

153 We have been able to use our specialty services -- and I know you want to only talk about the network, but because CTV Inc. owns a sports service we were able to strengthen the sports programming on each of our local stations through that means.

154 We are able, because we now are one news organization, rather than being in individual news organizations, to improve the training of our journalists, to take on diversity goals, and do that across the system.

155 We are able to combine resources on a single issue or problem. There was one example of that where CFTO did its three-part series on teen gambling and sent it out to the regions. Another time it might be Vancouver who might do the series and send it out to the regions.

156 So we give our journalists the satisfaction of working on something a little more in depth, and our local journalists have the satisfaction of seeing their accomplishments across the country.

157 Kirk, would you like to talk a little more about the co-operation between the stations and the national news service?

158 MR. LaPOINTE: Sure. We see CTV news now as one team. It is not an Archipelago any more of various interests regionally. We have such formidable discussions, hour to hour, about the direction of news gathering, the kinds of resources that need to be applied to it to do the best job, and ultimately how it is that we are going to find the widest audience for each of those stories, and through our specialty channel, Newsnet, we have been able, I think, to massively diversify the number of stories that are seen region to region in our country, so that an Edmonton story can find its audience in the Atlantic region.

159 At a profound level we think that the synergies that exist in news gathering will permit greater and greater joint investigations among our various units, so that the Discovery Channel's expertise in science, when we have our own science team in place this fall, will yield, we think, some breathtaking Canadian programming that will be state of the art. We think that there are a number of areas in that way that are at the profound level, and at the practical level of just being able to share information hour to hour about our various outlooks.

160 MR. FECAN: You know, it is almost hard to imagine not being together, because some of the benefits are so profound. I mean the obvious ones, common scheduling -- being able, anywhere in the country, to have a common schedule and see a show at a particular time. Through common scheduling you have common promotion and marketing of those programs.

161 It is really difficult to say, "Watch `Lucky Girl' Sunday on CFTO", "next Wednesday in Ottawa", three days after that in Vancouver, and maybe the week after on some other station. How do you sell it? Part of why we are getting results now is because we are able to schedule common. We are able to promote market common. There is a common look so that people know when they are watching a CTV station.

162 There was all kinds of creative back and forth that was possible before, but it is a little strained if they are not part of the same family, as Kirk suggested.

163 There are development offices, which provide huge funnels of creativity, both within a particular region that the development groups cover, up to national, for a national platform.

164 All of these things, which we take for granted today, in a sense, were not really part of the 40-hour a week CTV service that existed before. I think these are all very important things.

165 So it kind of breaks down to two things. I think it is stronger creatively, and I think there are technological infrastructure savings that we have been able to leverage to pay for some of the stronger creative elements.

166 Again, it is like you take them for granted, because how was it possible before when you couldn't decide that you were going to launch a show -- "The Associates", "Cold Squad" or whatever -- and you couldn't even necessarily get coverage throughout the country for that program? It is very difficult to break through if you don't have these basic tools. That is why I think we take it for granted now. We think it is part of why we have been able to work in raising the quality of our programming and getting it seen more.

167 When you come to the other elements, the specialty elements, I think you will see that there is yet another level of benefit that accrues to us and to the system, and most importantly to the audience, when that gets added.

168 But forgive us if it is hard for us to imagine a world where that didn't exist.

169 MS McQUEEN: In fact, we still can imagine it, because in some places --

170 CTV used to be only 40 hours wide. That's all it was, 40 hours wide. In some places it still is 40 hours wide, and when we are dealing with that we can see the difference that Ivan talked about.

171 There are a couple of other synergies that I could mention. One is that, by having this group of stations, we are able -- and you will hear more about this on the local station side of it -- to make every station an on-ramp to CTV nationally, which means that every single station has development money and station managers who can provide hospitality, advice, counsel and access for the producers in their regions; the ones who want to do network.

172 So that is, I think, a very important synergy.

173 There is a paradoxical synergy, I think, which is that by providing the stations with a lot of what I would call the national and international (technical difficulties / difficultés techniques) we allow them to be more local. That is, they do not have to spend very many of their resources in doing anything else except reflecting their own communities. They have a very rich pool of material which they can dip in, so that their communities can each have a good sense of what is going on in the world and in the rest of the country, but with their own resources they can do that exclusively, local and regional jobs.

174 THE CHAIRPERSON: Well, taking that last point, then, and the development dollars, how does -- we will want to pursue these local issues in some detail later, but how does the advantage of the group help the local station be more local?

175 MS McQUEEN: Well, in the olden days each station probably had a reporter or two or a couple of editors -- this is a small example, but significant to every local station -- whose job it would be to monitor the various feeds that came in from services across the country to go into an editing room with an editor to cut down the Nova Scotia train wreck in Vancouver probably to a lot less than it would be in Ontario, for example, and to write an intro to that and to present it.

176 In a sense, because of the feeds we have now, the newsnet services that they have access to, not only do they not have to pay any charges for that material, a lot of it is handled for them. They can alter it if they want to for their own reasons, but in general you don't have to have that number of editors, reporters and technicians spending their time in the Russian controversy over the closing of the television station or the Halifax train wreck. They can do the stories in their own regions.

177 I hope I have made that clearer than it was before.

178 THE CHAIRPERSON: Most of the discussion on synergy has been around news. Are there non-news synergies to be gained here for the local stations across the country?

179 MR. FECAN: Of course there is common scheduling, common look, common marketing, coordinated selling, promotion. These are all very, very important elements in building a Canadian system that has resonance, it has impact. I think they can't be underestimated in terms of their importance of delivering audience.

180 THE CHAIRPERSON: I guess as a bit of an aside, it was a question I was going to put a little later on, but when you talk about common scheduling and promotion, I presume CTV still wants to have a separate network licence to deal with those stations who are not members of the group, who may or may not be quarrelling.

181 MS McQUEEN: I guess where we need, for legal reasons, a network licence between ourselves and one of our affiliates, we would like to apply for that, yes.

182 THE CHAIRPERSON: So where there still are affiliates. That is why, is it, to be able to have the control over the common scheduling and promotion?

183 MS McQUEEN: We don't get total control --

184 THE CHAIRPERSON: Maybe I should put the question: Why?

185 MS McQUEEN: We don't get total control over it, but we do get, with that 40 hours, an ability to say that (a) you must run the CTV news with Lloyd Robertson and you must run it at 11 o'clock. You must run "Lucky Girl" on April 8 between the hours we say. So for those 40 hours we can have a common program schedule. Without a network licence we would have no ability to do that at all with an affiliate.

186 MR. FECAN: But regrettably in some of those situations, as I guess we will probably get into when you wish, a large part of our schedule -- many of our programs are not seen or available to the Canadian public.

187 THE CHAIRPERSON: So going back to the synergy thing, I don't know whether I heard wrong or not, you used two examples, one being the train wreck, the other being the closing of a TV station.

188 When we look at this situation with the network and the CTV as a group of stations, from a financial point of view how do you view this operation -- or how should we view it: as one big operation where the more profitable operations can help subsidize the other ones or at the end of the day, Mr. Fecan, do you sit down and perhaps report to Mr. Monty that the television station in a certain market is not doing very well so we are going to have to cut back on that operation, or do you view this as one big operation where the more profitable centres can help in fact maintain the news office, perhaps development dollars in other parts of the country?

189 MR. FECAN: I think generally we look at it as by having this station group opportunity we can provide the eight hours of priority programming plus the additional amount of priority programming through the B.C. benefits, and we think that is something that we are able to do through leveraging the synergies in these kinds of positive directions.

190 Whether every market needs to support itself, well, at some point there is some cross-subsidization, but also at some point -- you know, we are in markets where CBC has long abandoned, Global has never been in, Timmins, North Bay, Sault Ste. Marie, Yorkton, Prince Albert. These are pretty tough markets. We have, we believe, good solutions for providing local coverage in those markets and we are proud of those solutions.

191 But at the end of the day, if it is really clear in some very small market that nobody else is able to serve and no one even, you know, tries to serve regionally let alone locally, that at some point you have to balance the local resources, the local appetite with how much we can put into it.

192 Yes, it is something we look at, but we try to look at it positively through finding ways of maintaining that service, but doing so on a cost-efficient basis. I think that is very much what our style has been over the years and what we intend to do in the future.

193 THE CHAIRPERSON: So when you reach that point, what are the factors that enter into the decision process?

194 MR. FECAN: I think the point -- we haven't reached it yet, but the point in some of these smaller communities is: How could we apply creative solutions such as the ATV solution that works so well in the maritimes? How can we apply the Northern Ontario solution? Can we apply that? Could we tweak it a bit? Could we apply it in Saskatchewan in some way?

195 Our strong preference is to find ways of continuing to do local service in those places and continuing to do it better, but occasionally we need to invent new models to make it work.

196 The day that a small town such as Prince Albert can afford a full-up television station with huge journalistic resources and infrastructure that comes to that, well, you know, that day isn't here. However, through our various news models we can still provide local journalism to the people of Prince Albert and do so in a cost-efficient way.

197 So with the help of the friends within our family, and with your help, we seek to continue to provide ways of being meaningful in those communities.

198 THE CHAIRPERSON: You used the term "small markets" and used Prince Albert as an example, but if you look at markets -- and you referred to the maritimes, but Halifax itself is somewhat problematic for you from a financial point of view -- we won't get into the details of the numbers -- and Ottawa, Saskatoon. Those aren't small markets.

199 MR. FECAN: No, they are not.

200 THE CHAIRPERSON: So how do you deal with this in terms of the profitability of those markets and say, "Well, are we going to keep a news operation or are we going to keep the station in Halifax going"? Or how should we look at that if we are going to look at this whole question of group synergies and say, "Well, we should look at CTV as a profitable operation"?

201 MR. FECAN: When we look at medium-sized markets such as those you have described, it is absolutely essential to us to not just be there as a rebroad but to be there in the community. Our style, our ethos is about being part of a community, reflecting that community back to itself. We think that makes the whole stronger, even if a few of those markets may be challenging from time to time.

202 So that is a completely different situation from our point of view. We really need to be there.

203 In the maritimes we are very proud of the solution. I'm not taking credit for it for this group, it has been there for 20 years, the ATV news solution in the maritimes where we have journalists in New Brunswick and in Cape Breton and Halifax and in other places all contributing to a regional newscast that really does have a lot of life. It's a great newscast. It's a great group of stations.

204 We feel those are very important to us when you combine the development office and everything. We feel those are very important to the fabric of CTV. So we look at that and say, "You know what, we will shoulder that load."

205 It is really important for us to be there and to be part of that community in every single way. So that for us, I have to say, is a no-brainer. It is really important.

206 MS McQUEEN: I guess the other thing that you are offering us kind of is this, that is: Is the whole thing to be considered as a whole or is it a bunch of individual parts? I guess the great Canadian answer is: It's in the middle.

207 In other words, yes, we do think it is really important for us as a large organization to help our local stations continue to exist. At the same time, we think there is a responsibility for those local stations to get the support of their community, including their community businesses, and make their own contribution.

208 In the two cases that you have talked about, Halifax and Ottawa, those stations both make an incredible contribution to the community, which is reflected in the kind of audiences they get.

209 So the profit numbers for those stations may not be wildly out of sight, but the contribution that they make because they are so strong and such news leaders in their community, so involved with the communities, that is something that they deliver to the CTV network besides the profit.

210 So I guess our suggestion to you is that if we see a station is doing a great job for its community, has news leadership, has large audiences, has local businesses who value it and support it, then we are pleased to make the central contribution in taking care of not insisting that everyone has to make a 30 per cent ROI.

211 THE CHAIRPERSON: Or none.

212 So we can expect, then, over the next licence term that the approach will be to view this as a group/network operation and that individual market stations will be maintained and perhaps even grow, given the strength of the entire operation here?

213 MS McQUEEN: That is certainly our intention and our hope that we will come out of this licence renewal with stronger stations and a stronger station group.

214 THE CHAIRPERSON: Regardless of the profitability of any individual station?

215 MS McQUEEN: As we say, if a station isn't valued in its community -- and I can't imagine that that will happen, but that is a caveat that we do have to point out -- that if every single other group is not in that community, and if even our efforts, whatever they are, don't seem to be valued or have resonance in that community, then you do have to make some tough decisions.

216 We aren't at that stage yet, but I don't want to pretend that we will go on forcing ourselves in a community where demonstrably there may not be an appetite for it.

217 MR. FECAN: In most, if not all, of these markets CTV is doing quite well from an audience point of view.

218 MS McQUEEN: That's correct.

219 THE CHAIRPERSON: So if we go on, then, you found it very difficult to resist when I asked about the station groups to talk about the specialty channels, TSN, NewsNet, Discovery and others. Now we overlay on top of that the individual stations, the synergies, and you talked about some of them in your presentation this morning with "Lucky Girl".

220 I don't know whether there is a lot more you want to add with respect to that, but again I guess one of the issues that we would be concerned about is: How should we be viewing this from the point of view of the profitability of the entire operation and the ability of those to enhance the CTV network and individual station operations?

221 MS McQUEEN: Well, first of all, each of our groups, whether it is the station group or the individual specialty channels, has its own separate and distinct set of commitments under its licence.

222 So there is a totality of obligations that we have as a station group and a totality of spending.

223 In fact, the spending on Canadian programming by our specialty channels is slightly higher than the spending on Canadian programming by our conventional channels. So CTV, plus its specialty channels, is double the spending on Canadian programming.

224 You were absolutely right to pick up on the fact that it is really hard for us to talk about synergies, even with the local stations, without talking about specialty channels, because the organizations have a great deal of back and forth contributions, sharing, quarrelling, all that kind of stuff.

225 I was just about to ask Mr. Robinson to talk a little bit about some of the debates and sharing and co-operation that you engage in.

226 MR. ROBINSON: Thank you. Good morning.

227 To step back a bit, Comedy Network has been on the air for just three and a half years. Earlier, comment was made that the administrative structure and the infrastructure have been helpful as an advantage from a synergy point of view for the specialties, and that is especially true for Comedy.

228 Administratively, we don't have to worry about things like office space and telephones and all that kind of thing. There is a support structure in place for us already.

229 If we move to things like our master control, we have two feeds for Comedy Network. In that same master control room, with one technician, is the master control feed for Outdoor Life, for Newsnet and now for Discovery. It is adjacent to the CTV master control, so there is an opportunity to go back and forth if there is a real problem.

230 Again, that is the structure that exists and is shared.

231 The cost to run that as a stand-alone for the Comedy Network would be hugely more expensive than what we currently incur. Beyond that, an area like promotions is very important for the Comedy Network and all the specialties. Although we have our dedicated promotion producers, they again have the structure to support them and their efforts through scheduling of edit suites and scheduling of editors, and the advantage of being able to trade off, if necessary, in points of peak periods.

232 All of that is a huge advantage.

233 If I add all those up, the number one thing that makes the synergy between the Comedy Network and CTV ring for me is the ability for the majority of our staff to spend time on what is the number one priority, which is creative.

234 Without that back-up, without that system in place, we would be nowhere to where we are now in the Comedy Network creative front. We were only beginning to walk, after crawling for a few years. But I know for a fact that we would not have had the ability to develop with talent in terms of performers, writers, directors, producers in our Comedy Network experience so far had we had to focus on all those other areas to getting that up and launched.

235 The other advantage that we can point to specifically to date is that we have had success in being able to take risks on certain shows in the Comedy Network that have crossed over to CTV.

236 "Open Mike" with Mike Bullard is the prime example. It runs both on Comedy and CTV Late Night. It started on the Comedy Network only. We had three months where there was less pressure in terms of launching the show and the ability to grow the show, and we made lots of mistakes in the first couple of months. It would not have been ready for prime time, and therefore conventional, had we not had the opportunity to make those mistakes.

237 After about three months of "Open Mike" we were able to present it on CTV, and it has stayed there as a staple at midnight now for the last almost three years.

238 Another example is we have a show called "Comedy Now", which is a stand-up comic series. We actually do two versions of the show. We have been in production with this particular series from the beginning, so we have done four seasons and are planning for our fifth.

239 We do a version for the Comedy Network that tends to be hour-long episodes. On CTV they are mostly half-hour episodes. The Comedy Network version is raunchier; the CTV version is more appropriate for conventional. But we have the advantage of being able to actually share the costs of that particular show across both the Comedy Network and CTV.

240 It is exposure that works for the talent in terms of performers, in terms of producers, in terms of writers.

241 I very much see the Comedy Network as the farm team. It is our chance to develop talent who have never really had exposure in television experience, and the creative momentum that has been gathered in the short three and a half years is staggering to me. It is only the beginning of what I expect to continue in the future.

242 MR. FECAN: I think Ed is being a little modest about the "Open Mike" thing when you consider the kind of difficulty we have had as a country in launching a late night program -- I think "Nightcap" is the last one that people would point to as being successful, and that was in the sixties; it was not quite the "Open Mike" format, but it was a late night program.

243 When you consider that it falls outside of the definitions of what prime time is, for a conventional group of stations, networks, call it what you will, it would be prohibitively expensive to do that as a stand-alone without a Comedy Network there.

244 What has been accomplished by having these two entities work together, the conventional and the specialty, is really greater than the sum of the parts, because neither one could have really done that for any length of time on its own.

245 Together we have been able to build an institution, I think one that fervently promotes Canadian talent and Canadian programs, and one that on a strict P&L basis probably would not exist on our conventional station because it falls outside of -- you are not going to make money at midnight with this show if you are paying for the whole thing, but you have a shot if you have a partner there. And it falls outside of the broadcast day per se in terms of the regs. It does not fit in the eight hours of priority programming because, by definition, it is a late night show.

246 Here is a marvellous opportunity of how these two things together I think can do something that I don't think would happen if they were apart.

247 MS McQUEEN: That is a model that I think is true for all these synergies; that they are exclusively about Canadian programming. It is interesting that our group of services give us no real leverage in buying international programming or doing any kind of American buy.

248 What we have in our group is the ability, because of our services, to do good Canadian programming.

249 I want to talk about structure, because one of the things that we think is that if you do not have what Susanne refers to always as the team, if you don't have the structure to deal with creativity, the creativity does not occur.

250 What we have done is synergize our executives. For example, Susanne is the President of CTV Programming. However, she chairs the Media Group at which, for instance, Rick Brace of Sports and Kirk LaPointe of News sit with the group, and that is how programs like "The Lucky Girl" event happens.

251 Rick Lewchuk, for example, provides the graphics and the look and the promotional advice for the general group of services. He rents that big jumbotron, if you have been in Toronto at Bloor and Yonge Street, and he can allocate a Comedy Network show or a Discovery Channel documentary time on that big CTV bulletin board.

252 Bob Culbert is Vice-President of Documentaries for CTV, but he officially works in the Discovery unit so that we can make sure that our documentary policies and procedures, and dealing with independent producers, is more creative and gives us possibilities for doing various things.

253 You have heard that Ed, besides doing Comedy, does talktv. He also does our variety programs on the network.

254 Bill Mustos -- perhaps Drama is the one exception, but certainly in programs like "Committed" he works with the Comedy channel to deliver.

255 Both Johanna and Louise think about the Specialty channels in the east and west when they are talking to producers. They can provide that access for all of the services.

256 Bob Hurst, as General Manager of VTV, also looks at the network programs and works with Louise.

257 So by reorienting the structure -- I should mention Ken Murphy, who is President of Discovery channel in his day job, but because he gets it he is also Senior Vice-President for CTV of Interactive.

258 Rick Brace, beside him, is Vice-President of CTV's Sports and President of NetStar.

259 So we have developed a structure that enables creative quarrelling to take place at defined times --

260 THE CHAIRPERSON: If you keep introducing all these people every time, we will be here for a long time.

--- Laughter / Rires

261 MR. FECAN: We are very proud of them.

262 THE CHAIRPERSON: Yes, I can tell.

263 One could expect that if we are having farm teams here, then at the end of the day or perhaps at the end of seven years CTV would have more high quality Canadian programming spread throughout the broadcast week than it otherwise would if it was the network of stations on its own.

264 MS McQUEEN: We think that we will have higher quality Canadian programming in the hours of Canadian programming. That, again, is our focus.

265 Our focus is really on how we can increase the audiences to the Canadian programming that we have. This is what the creative synergy gives us: an opportunity not just to do X number of hours of Canadian programming, but to make sure that people will actually watch that programming, find it rich and find it diverse.

266 THE CHAIRPERSON: If we go on beyond the specialties to the other elements of the BCE empire, the Internet and newspapers, where do you see these synergies coming from here?

267 MR. FECAN: I think those are early days. We are three months as a company, and we are exploring opportunities where the Internet sites -- I think you saw on "Lucky Girl" that there was some participation of Sympatico in co-ordinating websites and in providing different kinds of drilldown information that young people who choose the Internet as their medium of choice would use.

268 With the globe, I think the synergies are probably very different. In terms of journalism, both by hours and by dollars spent, the majority of our CTV journalism is local. We obviously have an important national newsroom. It is a populist national newsroom.

269 The Globe and Mail is a national newspaper. It is not a local newspaper. I think, to be fair, they would happily describe themselves as being an up market paper. It is not necessarily the same populace tone that CTV News has for itself.

270 So there may be opportunities for the Globe and Mail stringers and bureaus in various places around the country to learn more about what is going on in the country in that area on a timely basis than they would be able to otherwise.

271 I think through the various assignment editors talking to each other, they might be able to attach more resources to cover a particular story that both groups of assignment editors might be interested in than would otherwise be possible, which would provide a richer environment for viewers, readers and surfers.

272 It is still pretty early days. I think the most important principle for us there is to not just preserve, but to enrich the unique voices that each of these different editorial offerings have. At the end of the day, all they really have is their voice. The Globe and Mail doesn't own a printing press.

273 It's entire asset is an intellectual asset. So, anything that would homogenize that is, I think, very bad for business and bad for us as creative people. Our interest is in strengthening that diversity and making it richer for viewers, readers, surfers.

274 Early days, but with those as principles, that's the kind of explorations and discussions we are having.

275 THE CHAIRPERSON: Well, we can explore some of those issues a little later. I guess -- I picked up on one of the comments you made in your presentation this morning near the end. I think it was Ms McQueen saying:

"We're proud to be the broadcaster that `gets it'. DeGrassi will be a major convergence event for us. and you'll hear more about --"

those plans in the next months.

276 I presume those plans are not just with "DeGrassi" and "Lucky Girl". I guess we want to try and get a sense today -- you know as part of the licence application we get sort of a block program schedule for the next period of time, but we are here to issue a licence, possibly up to seven years, and try to get a sense of what all of this synergy means.

277 If we are four, five or seven years down the road and you are responding to Mr. Monty and to the Commission, to him, from there was a benefit to buying this operation and to us there is a commitment and a benefit to the broadcasting system in this country.

278 What's it going to look like? What are the synergies going to mean for the stations, for the specialty channels, for the Internet, for the newspapers? What can we expect this to look like down the road? I mean I take your point, it's early days, but you are in the job of planning this. Most of these people are on the day to day operations. I presume your responsibility is to be deciding where this is going to go beyond the early days.

279 What can we expect to see in five or six or seven years down the road on the screen to CTV because the specialty licences aren't up for renewal here, it's the CTV licence, so what's the benefit of all this going to be in a few years down the road on the screen?

280 MR. FECAN: I have to tell you that the honest answer is the simple one. We are here to do better Canadian programming and we are here to get the widest possible audiences for that programming. We are here to provide the richest possible viewing, reading, surfing experiences for Canadians.

281 We believe that through that kind of quality and through that kind of hard work the appropriate return on investment will flow. I don't think there's any magic to it. I think it's something you live day by day and you do day by day and you put into practice by selecting a team of this calibre who are dedicated to making that happen and who believe, you know, that quite over and above coming in every day, it might be a good thing to pick up your Starbucks and your pay cheque.

282 They actually want to have this happen. They want to have better programs. They want them to be part of the turnaround, the breakthrough that we talked about during the B.C. hearings when we can find ways of breaking that paradigm so that the programs make enormous audience and business sense.

283 We think we are on the cusp of that. That's what we are here to stand for and that's what I believe the only logical road going forward is because if it's not about programming, what's it about? It can't be about anything else. That's how we look at it.

284 MS McQUEEN: And the other thing I would say is that, you know, you laid all the responsibility for this on Ivan's shoulders and indeed he does carry it, but the fact is that his approach is to say to all the people in this room "What do you think?".

285 The one thing that we know about this new regime, and we know that you are a convergence sceptic, the one thing that we know about this new regime is that it ain't going to come from our generation. It's going to come from the younger generation.

286 That's why I think right now in Bell Globemedia, in CTV, we have most of our brightest people pondering the question that you gave to Ivan: What should this look like?

287 To a large extent, this is going to be a trickle-up to use something that would never happen on the Discovery Channel because I guess it's scientifically impossible, but it's a situation where the best ideas are going to be generated by guys wearing jeans, not by people wearing very nice suits.

288 THE CHAIRPERSON: But is that going to end up being on the Internet or are those people wearing jeans still watching TV?

289 MS McQUEEN: Yes, but you know, I think as dimly as I get it, what I think is that people don't think that way any more. The people of the generation that we are talking about don't think that way any more. They don't see the Internet and television and radio and print as absolutely separate discrete experiences.

290 I think many of you and many of us have children in that age group and they don't see these things as discrete. Kirk always tells the story of his --

291 MR. LaPOINTE: Yes, at the risk of embarrassing my children. It is true that most teenagers these days are very content to have headphones on, listening to rock music as they are chatting online on the Internet, watching "Who Wants to be a Millionaire" and trying to do their math homework all at the same time, you know, pretending to clean their room when I knock on the door.

292 It's a very different media literacy that is emerging. We have one experiment, for instance, at CTV news. We are using Christine Nielsen, who has been a distinguished international correspondent for us over the years, but we are now permitting her to create stories that are not only going to play in our conventional window at 11 o'clock with Lloyd Robertson's show, but also to create additional footage that will wind up on the Internet, that will permit people to see the entire interview that would be conducted on a particular piece.

293 They would see extra scenery, lots of other filming, her basic research package, to permit people to see the factual basis upon which she created the report, links to other Internet sites, links back to CTV to find other types of programming that would be relevant in that area and then at the end of the day also access to the newsmaker in the form of a chat.

294 It's an experiment we are doing and we don't really know if that's ultimately going to be the news gathering model, but being part of a large organization permits you that freedom to experiment. Whether we succeed or fail, we know at least that we have that environment and climate to experiment.

295 MR. FECAN: In other words, we want to be connected to our audience. We need to stay connected to that audience. We need to be available wherever they want us to be available. We need to give them the richness and diversity that perhaps a singular broadcasting station would not be able to give, but a collection of stations such as this might be able to give on a particular subject.

296 The more appetite they have for the programs and events that we work on, the more we can satisfy that, the more they will keep coming back and the deepening of that relationship -- the deeper that relationship gets.

297 It's our audience we want to stay with in any form. They are interested in participating and being connected with us. We just need to be with them.

298 MS McQUEEN: I think what we will see and what we are seeing now is there's maybe three basic instruments. There's going to be a monitor, there's going to be a computer and there's going to be a connecting line. I will still be sitting in front of my television watching programs, using those three instruments to do so.

299 My children will be doing different things with those three instruments and having a number of different kinds of experiences with those instruments. My grandchildren, I guess, will be doing even different and more magical things that we can't even think about now.

300 Yes, there will still be a schedule of television programs discretely which people can watch without having to worry about having online experiences or being interactive or doing any of those kinds of things. I will use television differently from a lot of other people and they will use television differently from all of us. I think that's what the basic idea is.

301 THE CHAIRPERSON: But in six or seven years time you and I will be a demographic that advertisers aren't very interested in buying whereas our children will be and are they still going to be watching CTV?

302 MS McQUEEN: They will be watching a screen and there will be CTV programs on it. What they will get out of that material and, in fact, what they will put into it will probably be very different.

303 Don't say that about demographics because the one thing that advertisers ignore is the enormous buying power that people in certain age groups have, and it's a shame they don't realize --

304 THE CHAIRPERSON: The fact is they don't, at least they don't appear to.

305 MR. FECAN: We have one service now, TalkTV, that very much is trying to experiment connecting with youth in ways that has been difficult for television. You know, they have got a program every night called "The Chat Room". It runs four or five hours, depending on the night.

306 A bunch of young people, instant messaging connection, chat room connection. Often when they bring in regular contributors, they do it through Internet cams. It's very interesting, it's very fresh and, yes, young people still are interested in this kind of television. We are really proud of this.

307 MS McQUEEN: But they are doing it differently. You can see that happening even when we don't have interactivity. I remember, Ken, when we did in Discovery the landing on Mars. It was absolutely evident that tens, maybe hundreds of thousands of people were watching, doing Internet -- enjoying the Internet experience and the television experience at the same time.

308 Rick can tell you of the same experiences when tsn.ca does a hockey contest based on having to watch the game at the same time you are on the Internet. It's already going on and happening, even without the connectivity or interactivity that's coming.

309 THE CHAIRPERSON: This might be a good time to take our morning break. I guess we are fairly rigid on time frames here. By the clock on the wall, it's about 20 to 11, so we will take a 20 minute break and reconvene at 11 o'clock.

--- Upon recessing at 1042 / Suspension à 1042

--- Upon resuming at 1100 / Reprise à 1100

310 THE CHAIRPERSON: Welcome back to our proceeding. We closed off just before the break briefly alluding to advertisers and advertising. I would like to switch to that for a minute.

311 I know you mentioned again in your opening remarks this morning you weren't looking for any changes. As you know, in a hearing recently in Montreal the issue was raised with respect to TVA and Global have raised the issue here. I guess in general one could say that it's somewhat uncertain at least as to what the future of advertising is going to be. There was a lot of hype around the Internet and banner ads only months ago. All of a sudden that has sort of fallen away

312 As a starting question on this, I would like to get a sense from you about this issue of the flexibility of the 12 minutes. You talked in your application as well about the fact that TSN has experimented with some of these virtual ads. I would like to get your sense of what is happening with that and what you expect to happen over the next while in terms of this whole notion of advertising, the availability of the inventory and what we are likely to see in terms of changing and this whole notion of advertising over the next while.

313 MS McQUEEN: Commissioner, I think that in advertising the fundamental things apply. More audience is the only thing that really builds more revenue. That is the critical problem for conventional television. It has been generating more audiences and thus its revenue has not grown.

314 We understand that the proposal to average the 12 minute is in front of you. We do have some comments about that. Rita Fabian, our head of marketing and sales, will be able to respond in a detailed manner to that.

315 I guess our concern, basically, is whether this favours one player in the system to the disadvantage of the other players, or whether this is something that will work well for the system. Our answer to that is that it will work well for only one player in the system, even if all the other players has it. The player it will work well for now is probably Global. In the future it might be us, but the benefits will go we think to only one players. Rita, could you talk more about that.

316 MS FABIAN: Yes. Thank you, Trina.

317 Mr. Chairman, we believe that the incremental revenue opportunity with the scheduling flexibility is primarily in top 20 programming. Currently, Global dominates in top 20 programming, so they clearly will have proportionately more chances to win.

318 However, one of our concerns is that moving forward Global's dominance in top 20 programming will only grow. This is because of their new twin stick operations. We feel that moving forward they will have more program purchasing clout and more program scheduling clout across their multiple stations, so that they will continue to dominate in top 20 programming.

319 So the way we see it, revenue will migrate from other stations to Global. Allowing this flexibility certainly would not bring you revenue into the conventional television market.

320 We are also a bit concerned because in order to try to compete with this we would have to maximize our commercials in all of our top shows. By doing so we would lose the opportunity to promote our priority programming. We are not very happy about that eventuality.

321 We also have some concerns about Global's statement in their reply to the interventions where they describe this opportunity as something they access six weeks in the fall and six weeks in the spring. We don't really see it that way. We think that it's really more of a 52-week opportunity with revenue implications that would be significantly higher.

322 Top-20 programming is an even more effective tool with which to compete in low demand times and when there is an economic downturn. What happens is that advertisers who otherwise could not get the top-20 inventory it may not be available or they may not be able to afford it, suddenly these doors are opened and top-20 programming continues to do well even in low-demand periods.

323 So I think that it would ultimately become sort of a 52-week proposition to shift inventory into that top-20 tier.

324 MS McQUEEN: I would like to ask Rick Lewchuk, if I may, to give you more information on the -- sorry, I didn't see you.

325 THE CHAIRPERSON: Have you estimated what the revenue impact would be on you assuming that same flexibility was accorded to you and others in the market?

326 MS FABIAN: We think at the end of the day we probably would be able to hold our own. There may be some incremental opportunity for us in the beginning, but as Global goes deeper and deeper into their top-20 programming we will end up competing head-to-head with them for those types of advertisers. At the end of the day it may be a wash for us. There may be some up-side.

327 THE CHAIRPERSON: I don't understand. I thought you said earlier that in your view there would be no new revenue.

328 MS FABIAN: Well, it would have to come at the expense of another players in conventional television for sure. The money would just shift around. I think in part it may come from the CHUM stations. It may come from the Craig's and I think some of it would ultimately have to come from us because Global would just have that much more top-20 programming than they currently do.

329 THE CHAIRPERSON: So you figure you could hold your own, but the smaller players would probably lose.

330 MS FABIAN: Suffer the most, absolutely.

331 THE CHAIRPERSON: Do you mean hold your own or do you mean you could gain some revenue at their expense?

332 MS FABIAN: At CHUM's expense or at Global's expense?

333 THE CHAIRPERSON: The smaller stations' expense, the smaller groups.

334 MS FABIAN: There is the possibility that we could gain at their expense.

335 THE CHAIRPERSON: Is it your view as well that in fact this would simply create an even greater incentive (technical difficulties / difficultés techniques) broadcast American programs?

336 MS FABIAN: A greater (technical difficult/ difficultés techniques).

337 MS McQUEEN: I don't think there could be (technical difficulties / difficultés techniques) now to have the top-20 programs. But I think what Global is trying to do is they have them, they want to maximize them. That's great for them. I don't know whether what Rita is telling you is that it probably isn't great for the entire system.

338 THE CHAIRPERSON: And would your view be the same if the 12 minutes was still averaged over prime time, over a week let's say?

339 MS FABIAN: Yes, our view would be the same because there is a great disparity within prime time between a low-rated show and a top-20 show. It can be five fold or more in terms of the rate. That imbalance would still be there. It's not really a prime versus non-prime issue. It's really the power and the revenue against the top-20 programming.

340 THE CHAIRPERSON: You wanted to add something else a minute ago.

341 MS McQUEEN: Thank you very much. I am sorry to have interrupted you.

342 I guess one of the things that we are concerned about because, obviously, if Global gets this competitively we are going to have to ask you to give it to us too. We can't do anything else but that.

343 If that happens what it means is that the CRTC's policy of allowing two extra minutes of time in programs for the promotion of Canadian programming, that probably would not be there unless you wanted to extend it even to the newly bulked up advertising programs, which would mean that you would have 18 minutes of commercials in an hour.

344 So the way we see this is that it defeats that opportunity to promote Canadian programs. I wanted Rick to tell you what CTV's policy is about using those minutes for the promotion and how important it is.

345 MR. LEWCHUK: It's hugely important to us. The biggest arsenal we have in getting viewers to come to Canadian program is to promote it in our own show. I will use the example of "The Associates" which we launched this year.

346 We were able to take the promotion for "The associates" and we put most of our money actually into doing on-air promotions and to put those promos into like minded programming like "Ally McBeal" and "Law and Order" and "ER" which happen to be top-20 programs. That gave us the ability to reach viewers with the message that we have a show that you will find interesting. It happens to be a Canadian show and it is going to be coming up. If we lose that ability it is going to be a huge dent in our ability to bring viewers in the neighbourhood of 1.2 million people to a show like "The Associates". I think that will be a huge concern to us.

347 THE CHAIRPERSON: One of the issues that has been a concern about this whole notion of clutter and the fact that from a viewer point of view it may well be quite annoying to viewers. I suppose it already is for some viewers, the amount of clutter that they see on the screen. From time to time it has been suggested that the CRTC should back away from any kind of quotas for advertising and just let the broadcasters do it and their judgment in terms of how far you can annoy viewers before you lose them would probably be a wise approach to take with respect to this thing.

348 Over the years there has been some suggestions to us by some parties that we should just do that, we should just get out of it and let broadcasters do what they may because if they annoy the viewers so bad they will go somewhere else.

349 I guess traditionally the view has been that we should keep this largely to protect the smaller television operations in the country, that the bigger ones can slug it out and may well behave quite rashly from the perspective of the viewer in not wanting to annoy them and thus lose them. What would your view be to the Commission simply stepping away from any kind of advertising restrictions?

350 MS McQUEEN: It is really hard for us to say no you shouldn't regulate, or --

--- Laughter / Rires

351 THE CHAIRPERSON: In certain things. There are certain elements of this that are really comfortable to have.

352 MS McQUEEN: You know, that would be a whole new and different approach, rather than the notion of averaging or the notion of doing anything. I think we would have to consider that.

353 One thing that it seems obvious to me is that the advertisers aren't crazy about that. Don Bastien, our Senior Vice-President of Sales in Montreal was just telling me that the Quebec media directors had recently expressed their dislike of this. I believe, am I right, Rita, that one of the advertising intervenors has also spoken against this.

354 I think we would have to really think about whether stepping away from advertising regulation is a great idea.

355 MR. FECAN: But you know, at the 60,000 foot level, which you asked the question at, TV policy is six months old. In practice I don't think we would advocate changing one part of it or another. I think we should give it a chance to work. To the degree that the thinking on advertising was part of a comprehensive policy taken as a whole, it should probably be allowed to develop. Once you start picking at one thing, then you can pick at another and then what have you? You have a new policy, basically.

356 So our view on balance would be a couple of years has been spent on a policy. We think it provides the consistency and the guidance for us to plan and to reach our objectives and your objectives. It should be given a chance to work and we shouldn't pick away at it bit by bit, as much as some of our free enterprise leanings might favour one thing or another.

357 THE CHAIRPERSON: Are there changes going on though that are (technical difficulties / difficultés techniques) that would appear at least to be outside of our control in any event? We heard a couple of weeks ago about small cows dancing across the television screen, superimposed over the program, or we have commercials perhaps embedded in the story line of the program itself, or at sports events we can have logos for major Canadian retail outlets superimposed on scoreboards or on the centre of a playing field or on a hockey rink or whatever.

358 You talked about having experimented with those sorts of things with TSN. What is your experience with that and where do you see this? It seems to be a growing phenomenon. Where maybe we are well beyond 12 minutes in effect in any event.

359 MS McQUEEN: I see that Bob Hurst is letting Rick Brace take the chair. Since it was one of his channels that actually did this experimenting, perhaps he could tell you about it.

360 MR. BRACE: Good morning. In truth, we have had kind of limited success with that. In practicality it can work, and certainly the technology is there and we have experimented with it in certain sports, but (technical difficulties / difficultés techniques) the issue of virtual advertising is certainly tied to all of the (technical difficulties / difficultés techniques) major leagues control that right very religiously. So that in terms of the (technical difficulties / difficultés techniques) success it would really mean that we would have to partner with the leagues in achieving that, and the teams in a lot of cases.

361 As I say, there has been some limited success. We have tried it, and CFL football has probably been our major application.

362 In truth, it really hasn't generated, I think, either the revenue or the acceptability that we had hoped. It is there, it is possible, but there is a lot of work to be done before we could ever suggest that it would be a major revenue stream for us.

363 MS McQUEEN: As to the other issues, product placement and so on, frankly, most of these benefit the studio that makes the program, rather than the broadcaster that airs it. So we would have some concern if, for example, one of our best advertisers, Coca-Cola, decided to do most of its advertising in product placement, because we would have very little control over any revenue that came from that. We wouldn't get it.

364 I guess, overall, the problem is that we don't have the audiences on conventional to generate the revenue, and I think what Global is trying to do is to solve that problem. And they are right; that is the critical problem.

365 What we are trying to do is figure out a way to build the audiences back for conventional television, because that sure works for everybody in the system. More audiences equal more satisfaction, equal more revenue. It seems to us that the objective for the system is to have more viewing to Canadian television.

366 THE CHAIRPERSON: But in your opening remarks today you talked about the audiences, and I presume that the advertising, as you suggest, goes with it. You say: Even our considerable specialty assets do not provide the full answer. The combined CTV and Global families of services, conventional and specialty, are very close.

367 CTV's specialty services bring us only slightly above Global with Prime. And I presume the point is that CTV is still the main engine here from an advertising point of view.

368 MS McQUEEN: I think it is not so much that CTV is the main engine, but the challenge for a conventional, basically, is -- I think a lot of people said, "You have conventional television, and sure the audiences are going down, but then you have all of these specialty assets, so surely there is an evening out." That is partly true, but not completely true. No company owns enough specialty assets to fully compensate for the loss to conventional viewers, plus, for some reason that we are not really able to figure out, advertisers do discount specialty television.

369 When the World Series was on TSN, it actually drew less revenue than the World Series on CBC. Go figure, but that seemed to be the rule of the advertising game.

370 In short, the problem is that the audience is going down, and there are a number of ways that are in front of you to solve that. Some people are acquiring more assets. Some people are acquiring more stations. All of those you are trying to re-aggregate -- and I think those are Global's terms -- re-aggregating the fragments.

371 Our approach is, how can we as programmers drive more audiences to conventional? Because we know that if you build it they will come. "Millionaire" rescued the fortunes -- one program rescued the fortunes of ABC in a year; "Survivor" on CBS.

372 If you can do the programs that will generate big Canadian audiences, then your revenue problems, to a certain extent, will go away. I guess that is the objective that we are looking at.

373 THE CHAIRPERSON: You mentioned that part of the problem was with the contracts with sports franchises, the NFL or the CFL, or the baseball leagues, I presume. One of the issues, again, that was raised in Montreal was the question that it is one thing if it is fairly powerful sports rights holders, but with some of the independent producers there was concern about the television network simply choosing to do this, because the particular contract they had with the program provider allowed them to superimpose cows promoting milk products, or whatever, in some cases over a program that probably wasn't particularly compatible with the sort of advertising that it was going over.

374 So I can understand where, in the case of the NFL, that might be somewhat problematic, but is that something you would see yourselves doing in the future?

375 Given the situation with audiences and advertisers, I presume you are going to be seeking other ways to maximize revenues, even if you kept the 12 minutes in place.

376 MS McQUEEN: I must admit that dancing cows is not big in our plan, although it sounds intriguing in some ways.

377 You were talking before about annoying the viewer, and it seems to me that that is the kind of thing that works because of its surprise value and its shock value, but if every time you sit down to watch a program an animal dances across the screen, I don't think you are going to be terribly attracted to watching that particular channel.

378 One of the things about the way we arrange advertising now -- people are annoyed by it, but at least it comes in discrete chunks that they can choose to enjoy or appreciate or not.

379 So I am not too certain about the future of that model.

380 THE CHAIRPERSON: In the case of the sports situation, how do you treat the revenues? Do you count that as advertising revenue?

381 MR. BRACE: In the case of virtual advertising?

382 THE CHAIRPERSON: Yes.

383 MR. BRACE: Yes, we would.

384 THE CHAIRPERSON: So for CTV, you have no plans for the next seven years to do any of this sort of virtual advertising, either superimposed on the program or, apparently, within the program itself?

385 MS McQUEEN: It is not part of our plan. Our plan is to do the conventional kind of advertising and build our audiences, but to say that we would never participate in advertising experiments or foreclose options to do so, if new technology provides ways to do effective advertising, we want to be there, sure. But at the moment we don't see a technology that promises significant benefits relative to the disruptive factors or the annoyance or the rights problems that it causes.

386 But if they come on the scene in the next seven years, Commissioner, sure, we want to be there.

387 THE CHAIRPERSON: Then I am struggling with how you would expect the Commission to deal with this issue. If you, as a result of having gone through the TV policy, looked at this issue and concluded that 12 minutes was probably the best way to manage this marketplace and ensure that everybody has their fair share and doesn't interrupt the other avails that are built within the programs to be able to use those avails to promote Canadian programs, and yet at the same time we are going to have this opportunity for you and other players to be able to do virtual advertising, which, in effect, ends up being more than the 12 minutes anyway, then how are we going to be expected to manage that?

388 MS McQUEEN: I think if you count it as advertising revenue and it goes into the advertising revenue projections that you will see, at least you will know whether it is successful or worthwhile or not.

389 But I am not able immediately to give you a good answer about how you do that. We could think about it for a while and try to come back with --

390 THE CHAIRPERSON: I would like you to do that, because just as we are not regulating expenditures, we are regulating hours, we don't regulate revenues either. We regulate the minutes. So if you end up selling another two, three or four minutes of advertising in a program, then we have through the back door been able to do what you didn't want us to do through the front door.

391 So I would appreciate you thinking about that.

392 MS McQUEEN: Absolutely. It is a question that we didn't expect. We don't really have an answer for you at this time.

393 THE CHAIRPERSON: We don't often get an opportunity to do that; ask questions that people don't expect.

394 MS McQUEEN: Oh, yes, you do!

--- Laughter / Rires

395 THE CHAIRPERSON: Just a few questions, then, on this issue of vertical integration and independent production.

396 You spent a fair bit of time this morning in your presentation talking about projects that you had undertaken with some independent producers. I am sure there are a couple of lawyers over here who are now contemplating getting into writing a law series or maybe a regulatory series.

--- Laughter / Rires

397 THE CHAIRPERSON: I would appreciate -- perhaps to use your phrase -- if you would start off at 60,000 feet. What is CTV's policy with respect to this whole notion of developing and producing and airing programs with independent producers?

398 Perhaps we can talk about it as sort of "independent-independent" and then independent with 30 per cent or 34 per cent, whichever cut you might want to take on it.

399 MR. FECAN: Our policy, if you will -- our philosophy -- is to work with the best people and the best creative resources we can find, and not provide advantage to something that we may have a piece of versus something that we don't.

400 It does not serve our overall objectives well to choose something that we may have some ownership in that doesn't do the job -- the main job of building audience for us.

401 We feel it is very important to be able to work with whoever the best are in a field, and whoever has the best idea at the time. That is kind of the guiding principle.

402 We are, of course, aware of the vertical integration concerns. I think that currently it is, in the drama field, a minuscule, if anything, amount that we do with anybody that we have an interest in. And I think our view is that the predominance, at least the majority of whatever we do, ought to be with independent producers.

403 It is not a hard commitment for us to make because we really want to work with whoever has the best idea.

404 So that is kind of the philosophical framework.

405 THE CHAIRPERSON: That is right now. What happens going down the road again?

406 Our struggle with all (technical difficulties / difficultés techniques) that are a ways down the road.

407 MR. FECAN: Ditto. (Technical difficulties / difficultés techniques) philosophy and the same commitment.

408 THE CHAIRPERSON: Can we (technical difficulties / difficultés techniques).

409 We discussed this at the BCE/CTV hearing, this notion about define independent, and independent is one that we own 30 --

410 There was some discussion around whether it was 30 per cent or 34 per cent.

411 You made a point, I guess, at the time that there are quite a lot of companies that you would have some small investment in and you wouldn't want to preclude --

412 MR. FECAN: There are a lot fewer of them out there today.

413 THE CHAIRPERSON: So when you talk about independent, do you mean it in the context of the 30 per cent figure, where you wouldn't have an interest of more than 30 per cent, or do you mean --

414 I take it that these two young fellows from Edmonton -- presumably at the time you had no interest in them; maybe you do now.

415 MR. FECAN: I think they are very genuine, and, yes, we have no interest in them whatsoever, except a strong interest in their success, because their success is our success.

416 So our preference would be to stick with the definitions that were developed over the last year or two.

417 At the end of the day, I have to tell you, though, I would suggest to you that if it is a seven year renewal and we are sitting here wiser and greyer --

418 THE CHAIRPERSON: It won't be me!

--- Laughter / Rires

419 THE CHAIRPERSON: I couldn't get any greyer anyway.

420 MR. FECAN: I think you will still find that the majority of our dramatic efforts still do come from "independent-independent" producers, but who knows what the future brings, and some flexibility is useful.

421 THE CHAIRPERSON: So when you say going forward into the future, then, and you say a majority, you mean more than 50 per cent?

422 MR. FECAN: More than 50 per cent for dramatic.

423 THE CHAIRPERSON: For dramatic.

424 In your application you talked about a preponderance of the priority programming would be produced by independent. A lot of the programming, I presume, that one would be looking at might be outside of the priority prime time schedule, perhaps would be smaller independents, maybe not the nature of the program that would be one that you would want to air in prime time but may well be quite developmental for some small production groups. Was that carefully chosen, that preponderance of the priority programming?

425 MS McQUEEN: It was chosen because we thought that that is what you would be interested in hearing about, mainly because you are right, those would be the big productions where most of the license fees would be paid so you might worry that we would have an interest in those programs.

426 I think in the smaller documentaries where you maybe have a smaller license fee and the independent producer is a new independent producer, it is not as likely that we would be going after a participation in that company.

427 THE CHAIRPERSON: Of course we are interested in the prime time schedule, but would you still be seeking independent productions for using the same --

428 MS McQUEEN: Absolutely.

429 THE CHAIRPERSON:  --the majority outside of prime time?

430 MS McQUEEN: Absolutely. That is where that kind of program comes from. It doesn't come from an in-house company usually, it comes from the smaller producer.

431 MR. FECAN: I think we have, over the last few years, been flirting a little with the idea of: Should we get more into dramatic production? Should we build our own in-house dramatic company or an association with someone?

432 I think, without limiting -- what the future opportunities may present ourselves, I think without limiting that, we have come to the conclusion that we are much better programmers and aggregators and marketers than we are producers of entertainment programming.

433 I think we are terrific news producers nationally and locally. I think we have strength in the documentary field and the 30 or 40-year tradition with "W5" in long form. We have traditions of producing sports and some of the low cost entertainment kind of magazines, but I'm not sure we, as a company, have the skillset or really that is our belief that that is who we are. I think we are much better developers working in partnership with creative people.

434 To the degree that we want some flexibility, I guess what we are thinking about, just to put it all on the table, is as large independent companies -- I mean, you know, there are fewer and fewer large productions companies in Canada and fortunately there is a lot of newer companies that are writer/producer companies much like the two chaps from Edmonton who kind of formed and started their own company.

435 We want to make sure that we are not disadvantaged as a large production company, then one day might become a large -- well, as they currently are, large specialty broadcasters and maybe one day make a sortie into conventional. We just kind of want to make sure that whatever the rules are they cut across everyone equally on that and we are not disadvantaged in any way in some unforeseen situation in the future.

436 To the degree we ask for some flexibility, that is really what it is about. It is not any -- we are not harbouring any intent to go into that business or buy one of those companies today or in the immediate future.

437 THE CHAIRPERSON: What is the status of -- there was some discussion again at the previous hearing about the terms of trade agreement with CFTPA. What is the status of those discussions?

438 MS McQUEEN: The latest on that is that we have committees set and working with the Producers' Association and CTV and beginning negotiation.

439 The head of the Producers' Association will be before you in the intervention procedure and she will probably be able to give you a full report on how that is progressing. My belief is that it is progressing well.

440 THE CHAIRPERSON: Okay.

441 Those are all my questions for now. Perhaps I will have some more towards the end of the hearing.

442 At this point I will turn it over to my colleague, Vice-Chair Andrée Wylie.

443 COMMISSIONER WYLIE: Thank you, Mr. Chairman.

444 Before I speak to you about peak time programming there is an area I want to go back to, if Mr. Chairman will allow.

445 Between the last hearing where BCE asked us to approve the transfer of CTV to them -- and this one is not long enough for us to get any more grey hair --

--- Laughter / Rires

446 COMMISSIONER WYLIE: At that time I asked Mr. Monty whether his plan was to maintain all the stations and all the rebroadcasters that he had purchased. If I recall, I used the example of the rebroadcaster of Bobcageon, Ontario and I think North Battleford, Saskatchewan, which wasn't so clever because I have since realized it was a CBC affiliate.

--- Laughter / Rires

447 COMMISSIONER WYLIE: So we will change that to Melford or Big River, which is a rebroad of the CTV affiliate, CIPA, although Mr. Monty also purchased the CBC affiliate.

448 Do you think that he would agree with your words of "you hope" and "it is your intention" to keep all these transmitters going as opposed to you are committed to keep them all going, considering his very quick response that of course all of this would be kept.

449 The conversation, if I recall, was in the context of the fact that the Commission has to be aware that 25 per cent of Canadians get their services over-the-air, for whatever reason, whether it is to brag that their children read instead of watching TV or it is because they don't want more sports in the house or MuchMusic, or whatever.

450 So is "hope", "intention" good enough?

451 In all of your applications every letter, I believe, in response to our deficiency question always has the list of all the transmitters and retransmitters and the same with the individual applications. Are you in fact applying for seven year renewal of all these transmitters and retransmitters?

452 MR. FECAN: Yes. Thank you, Madam Wylie, for giving -- if there is any confusion on that, thank you for giving me the opportunity to fix that with yourself and with Mr. Monty.

453 Clearly what I thought we were talking about in the earlier exchange was the degree of local service a particular originating station would do, but there is no question in our minds that what we are committing to is to run all of these transmitters, to keep them in good order, to keep the electricity going, and all of that.

454 It is an important system, it is a way of reaching people that aren't connected through cable, other wire or satellite or LOOK or whatever other forums may exist, and it is something that we intend on preserving and keeping in good order.

455 COMMISSIONER WYLIE: So your hesitation with Prince Albert, let's say, CIPA, would be that if it becomes impossible to keep the local programming you would reduce it or perhaps even make Prince Albert a rebroad of Saskatoon or Regina?

456 MR. FECAN: Prince Albert is a station that is close to my heart. It is the first place I worked in television, so thank you.

457 COMMISSIONER WYLIE: Let's use Bobcageon then.

--- Laughter / Rires

458 COMMISSIONER WYLIE: Unfair advantage.

459 MR. FECAN: But I think what we are saying is that through creative solutions like the ATV solution and creative solutions such as the ones we have worked with the Commission in Northern Ontario, we have found ways of maintaining local service and that is our hope in Saskatchewan to continue to be creative and find ways of keeping that going.

460 I don't profess to come from Prince Albert, but I did enjoy my first TV job there very much.

461 COMMISSIONER WYLIE: So that one will stay.

462 So if I am grey in seven years and listening to your renewal, you will -- so there -- so you will have all these broadcasters and rebroadcasters operable?

463 MR. FECAN: It is paramount for us to continue the coverage that currently is under our care.

464 COMMISSIONER WYLIE: I'm sure Mr. Monty will feel better now.

465 Priority programming. The numbers that we have show that listenership, or viewership rather, to Canadian programming in the last -- since 1997 has actually declined from 7.2 per cent in 1997 to 11.7 per cent in 1999. Viewership to Canadian dramas has increased from 7 per cent in 1997 to 8.9 per cent in 1999.

466 When we look at your programming mix, how have you taken into consideration your desire, which you expressed this morning, of increasing audiences. I think you said in your presentation "We want more people to watch our Canadian program."

467 So in the mix that you chose, which is 65 per cent drama; 12 per cent variety; entertainment magazine, 11 per cent; and documentaries 11 per cent, if I calculate on the basis of the block schedule -- which I understand may be a birdseye view in time but could vary -- how did you arrive at this mix, in light of your obvious passionate desire to increase audiences to Canadian programming?

468 MS McQUEEN: First of all, the way the way the priority works, as we understand it, is six months into the regime -- is that for us the big idea here is that the broadcaster can have a style, a philosophy, a particular way of connecting with the audience. So that we would not want -- and I know you are not looking at that schedule as this is going to be it for seven years and that the percentages that you have added up are a suggestion as the way it is always going to be.

469 We will always do eight hours of priority programming, but that mix may vary from year to year and it may vary for the very reason that you are talking about, Commissioner, which is our belief in what the audience wants and where the audience is going.

470 But the genres of programming that we have chosen to focus on are, we believe, the genres that most Canadians want to watch. When we talk about drama, I think -- and I see real professional researchers in the audience who can stand up and contradict me, but I think that most of the viewing to television -- most of the viewing to television is in the dramatic genre. That is what people love to see on television. I'm talking overall, not necessarily Canadian or American, but in general folks love a good story, they love an imaginary story and that is what they want from television.

471 We believe, obviously, that documentaries are becoming more and more interesting to Canadians. We have seen that as partly the specialty channels have developed that as a way of communicating with viewers that can draw large audiences.

472 So without going through each one, our mix is chosen on our belief of this is what the audience will respond to most.

473 COMMISSIONER WYLIE: Since the idea of branding, of course, comes into play with this new flexibility, we could expect, once you have made this decision, that the peak time programming will look the same for some period.

474 MS McQUEEN: I hesitate to disagree, but no.

475 Our brand is popular Canadian entertainment. That can be expressed one year through more series drama, another year with a number of comedy specials, another year with a stream of popular documentaries. So the brand that we want to have is that when you tune into CTV you will have a high quality populace entertainment or news experience.

476 COMMISSIONER WYLIE: Because drama is, of course, everybody tells us, expensive, more difficult to produce, but it is still, you expect, what people want and therefore will remain a big proportion of the mix for a reasonable future?

477 MS McQUEEN: Yes. And I don't want to be defensive about this because I know you are just asking for information, but I guess what I'm -- the defensiveness comes from, "Oh, my gosh, is she expecting us to have the same schedule for seven years and commit to that", and that is not --

478 COMMISSIONER WYLIE: Oh no, I'm not about to go back on the tier policy. The Chairman won't allow it.

479 MS McQUEEN: Okay.

--- Laughter / Rires

480 COMMISSIONER WYLIE: So you can't either.

481 MS McQUEEN: I think we said this at the BCE hearing: that if we could crack that issue, if we could present Canadian drama that was commercially viable, it would solve so many of the problems that you all have been wrestling with year after year after year.

482 We think we have the opportunity to do that. We think the time is right. But we also agree with you that it is very difficult.

483 If we don't pay attention to drama, if we don't commit to investigating that, we will be losing what I think is the critical chance in Canadian television today.

484 COMMISSIONER WYLIE: On page 17 of your supplementary brief you list a number of documentaries where you say a new generation of films heading into production for 2001-2002 -- the sentence says expanded commitment to documentary programming is already yielding results with a number of programs set for broadcast in the 2000 and 2001 season and a new generation of films.

485 This would be documentary films?

486 MS McQUEEN: Yes, indeed.

487 COMMISSIONER WYLIE: Would those all be seen in 2001-2002?

488 MS McQUEEN: Some of them would be. I am not sure whether they will all absolutely be ready or be scheduled in that year.

489 Susanne...?

490 MS BOYCE: Yes, they will.

491 COMMISSIONER WYLIE: Do you expect that would change the mix in the very next season of the percentage of your peak time programming or priority programming which is in the Documentary category?

492 MS McQUEEN: It will change the mix from what we have this program year that we are standing in now. But going forward, our notional vision of priority programming is that that will be part of the mix; that there will be a documentary stream.

493 COMMISSIONER WYLIE: You speak in your application of the success of ""W5"" and of course as the highest rated documentary series and the most trusted and your desire to continue it.

494 How do you account for its success? Is it scheduling? Is it promotion? Is it simply the quality of it; that you have hit the right nerve?

495 MS McQUEEN: I would describe it -- and I will let Kirk talk about it since it is in his jurisdiction (technical difficulties / difficultés techniques) as a combination of tradition plus innovation.

496 MR. LaPOINTE: Do I have to top that?

--- Laughter / Rires

497 MR. LaPOINTE: I think actually --

498 COMMISSIONER WYLIE: You speak like that to your coming grandchildren, Ms McQueen.

--- Laughter / Rires

499 MS McQUEEN: Do you have news for me?

500 COMMISSIONER WYLIE: I know your daughter just got married -- not that that has much to do with it.

501 Go on, Mr. LaPointe. It is a good thing that you are used to being interrupted.

502 MR. LaPOINTE: I have only been at CTV for about six months.

503 I think that "W5", growing up with it as a viewer, always had that great reputation for its investigative prowess. It has been able to secure a phenomenal reputation in the country for its ability to look into institutional matters, to tell a story compellingly and with a great deal of emotion, and to have that wonderful blend of human interest every time it explores even the institutional story.

504 I think we are seeing also, on both sides of the border lately, a very encouraging sign of a return of the audience for the long form journalism that in fact "W5" has occupied for decades where the audience is connecting very well with stories told at length. And they serve as a fine leadership in our business.

505 I think "W5" at the moment has a large audience because it is really appealing to people who have a great sense of story and people who in fact love the depth and the quality that it provides.

506 MS McQUEEN: I would add -- and by the way, Ivan got to tell his Prince Albert story. I am going to say that I was one of the hosts on the first edition of "W5".

507 The other thing that I think about, if we are talking about the reasons for success, is that the best journalists are attracted to doing that form. We have been very successful in attracting people of ideas, commitment and passion to that programming.

508 I would also say that Canadians -- and I think we have to give some credit to the CBC here -- have had a tradition of being attracted to long form factual and documentary programming from the Film Board and from the early days of the CBC.

509 So all of those factors go toward the success of that program.

510 COMMISSIONER WYLIE: Has it always been scheduled on the Sunday night?

511 MS McQUEEN: No. There is probably no hour of time which "W5" has not occupied.

512 Would you say so?

513 MS BOYCE: It has been everywhere. What Trina doesn't know is that her series, which she was hosting "W5", can now be seen on talktv several times a week.

514 COMMISSIONER WYLIE: That is not accounted for as original programming is, it?

515 MS BOYCE: No.

--- Laughter / Rires

516 COMMISSIONER WYLIE: We will give you a chance to come back.

517 This gets me into a scheduling issue. I notice that it is now scheduled or intended, at least from the block schedule, to be shown on Sunday night, which, according to the BBM fall numbers for all Canada, is the highest viewing by far to television programs on Sunday night.

518 To what extent does it help to have scheduling in the time frames or the days or evenings where there is the most TV watching and less disco, or whatever it is that people do on Saturday night?

519 MR. FECAN: Programming, as Susanne will tell you, is as much of an art as anything else. There are obvious opportunities to be where the most people are. There are also, at times, opportunities to be where the least competition is.

520 Her job and the job of the schedules that work with her is to continually balance those factors; to try and determine if being up on Sunday night where there is a lot of people but most of the competition is dramatic and there are really no opportunities for fictional programming, that may be a terrific opportunity for "W5". On the other hand, it may have a better opportunity on a different day when the competitive mix is more advantageous to it.

521 Every day they look at these schedules -- and the folks at Global do the same, as do the folks in every programming department and every network -- to run those balances to try and see where they can do the best with their programming.

522 Susanne...?

523 MS BOYCE: In the case of "W5", for example, a year ago -- this was last season -- it became a one-hour documentary program. We put it up against "NYPD Blue" on a Tuesday night. I think we started in January. It did very well.

524 I got maybe a little too wild and put it also on Sunday night against "The Practice" as an alternative program, where it does well but not as well as it did on Tuesdays.

525 These are the kinds of things we juggle.

526 Over the course of its 35-year history, "W5" has amorphed into -- it has been such an interesting program, with a mixture of documentary and also a magazine show when that seemed to work for it. You just cross your fingers and --

527 COMMISSIONER WYLIE: I am curious about this idea of scheduling. Something else we sometimes read in interventions or in speeches made by people involved in the industry, especially producers, criticizing the switch of Canadian programming too readily pre-empting it or changing it and how it is disadvantageous for the creation of an audience for that program and for creating some loyalty to it if it is easily pre-empted or changed too often.

528 Is that something you think is a legitimate complaint?

529 MS BOYCE: I think that is true of all of our programming. We are tied to the American net schedule changes which happen last minute and such as well. We try really hard not to do that.

530 It is, of course, a concern.

531 COMMISSIONER WYLIE: Scheduling is kind of an interesting area in that what we may end up with is saying: I am not going to program Canadian programming against Global's big American show. What's the point? Therefore, we will have American programs counterplay or shown against the other network's American programming.

532 For example, I refer to the BBMs. Saturday night is the very lowest viewership to television, Sunday night the highest. Following an intervenor doing this to your advantage the last time, we produced this little schedule, with the red squares which represent peak programming.

533 As you can see, the lowest viewing night has you showing priority programming completely in a block from 7:00 to 11:00. Sunday night of course -- and you do point in your application to the fact that you give Canadian films that high viewership night.

534 Then during the prime time between Monday and Friday, we have one and a half hours of the eight hours only; none at all on Monday, Wednesday and Thursday.

535 I find that raises some questions as to this going to the next step or next level with Canadian programming, building audiences.

536 In your supplementary brief at page 1 you speak of the need to develop the value of your schedule now that you have fewer constraints in presenting programs.

537 Is this type of scheduling likely to achieve your goal of selling programming, of getting a loyalty to, when it is scheduled on a night when there are fewer Canadians watching any TV?

538 MS BOYCE: Again, I am not sure I would call it an art, but programming is both wonderful and difficult.

539 I would say yes, to an extent.

540 For example, pick Saturday night. It has proven a very good night for Comedy for us. So to put Comedy now there and have it grow, as it has been doing, has been very successful.

541 That, to me, is a sign of success for that particular program.

542 We have, for example -- I can think of one case in its third season where we actually moved a program out of a very good time period where it worked very well, because the producer wanted that prime time slot. It got killed.

543 So would I take half a million on a Saturday or a hundred thousand on a Tuesday or a Wednesday at 10:00? I would take the half a million in order to encourage. And it does build.

544 You can probably go back a couple of years to a schedule in which we had "Power Play", a show we felt very strongly about. We had it on both a Wednesday night and a Thursday night. "Due South" was on Thursday night and did very well.

545 COMMISSIONER WYLIE: Although you discussed "The City" and "Power Play" in your supplementary brief at page 19, and you say that unfortunately neither have developed audiences sufficiently to continue producing it.

546 MS BOYCE: In the case of "Power Play", for example, which was for two seasons, that was a really difficult decision to make. The easy thing in a way would be to have allowed it to run for four years, say, because of funding and how hard it is to do these kinds of projects. So we agonized, and the result of the decision not to move "Power Play" forward because it did not hit an audience, we ended up with "The Associates", for example.

547 So there are endings and beginnings. Is scheduling part of that? We don't know. We just know that it did not connect with the audience.

548 MR. FECAN: Scheduling really is a black art. Fridays, which is the second lowest viewing night of the week, also has had the most success for dramatic soap kinds of programs. "Providence" is a very strong show. One of the CBC's strongest drama, "Street Legal" did incredibly well on Friday but did not do well on Wednesday.

549 COMMISSIONER WYLIE: I was speaking of Saturdays mostly.

550 MR. FECAN: Saturday is a great night for comedy, and we do well with comedy there. I would suggest that you take that show and put it up on a week night where the hub levels may be higher, and I think it would get killed.

551 Entertainment magazine shows tend to do well on the weekends.

552 There is no safe place in the schedule any more. You can put something when more people are watching. You are also going to get a lot more competition. You try to match the program to the audience, to the competitive factors, and to some degree as safe a harbour as you can for something that is particularly new, where you can allow it to grow and develop.

553 Friday is a great audience for drama. The fact is that these two shows, "Power Play" and the "City", that we really believed in and hoped would work, didn't despite our best efforts and promotion. We saw declines week to week, which is sort of the thing that tells you that you can get people to be aware of a show by promoting it. You can put it in a place where the competition may be fairly gentle. You may get the sampling in the first week or the second week. But if it doesn't work, that is between the show and the people.

554 You cannot ever insert yourself there. You cannot make somebody watch something. However, you can do everything to lead them to it and to put the right program in the appropriate slot.

555 There is no safe harbour any more. It is a very competitive environment out there. The slide showed when there were five networks -- three in the U.S. and two in Canada. There are seven now in the U.S. engaging in prime time stuff, and there are three or four network/systems in Canada. There is an awful lot of stuff out there vying for attention, and there is no safe place.

556 MS McQUEEN: The results of this complicated issue of scheduling, you pointed out in the data you have so far that there had been a small, but an increase in drama. This fall, according to the figures that we showed you, we have been able to generate, partly because of the quality of the programs, and surely partly because of the scheduling, the top average audiences to Canadian dram in the system.

557 So we think it is working.

558 We think another factor that will help it work is the more control we have of our schedules on our stations. One of the problems with our scheduling, as we said, is that CTV has been only 40 hours wide. Now we will have the complete prime time schedule in Vancouver. If you approve our proposed purchase of Winnipeg, we will have the complete prime time scheduling in Winnipeg as well.

559 So I think there is great opportunity to do better at scheduling and to provide a consistent schedule for our Canadian programs. That is absolutely what we want to do.

560 COMMISSIONER WYLIE: I know, for example, that "The Associates" and "Cold Squad" are the two programs which are successful during the week.

561 What you are saying is I believe "Twice in a Lifetime" is also a beginning series that you will schedule on Saturday night when there is the lowest viewing to conventional television. But hopefully it will do well, and then you will move it to a higher viewer pattern for Canadians?

562 MS BOYCE: Yes. We consider that all the time. One of the successes we have had and we are delighted, we have only been doing this I guess together as a team for three years. That's sort of "Movies of the Week" so that in fact our theatricals don't do as well, but we have been able to develop, whether it's Sheldon Kennedy or David Milgaard or the Swissair, a movie from across the country, those movies do well so we put those -- again, we are very comfortable putting those on in high viewing --

563 COMMISSIONER WYLIE: Yes, on Sunday night.

564 MS BOYCE: Yes.

565 COMMISSIONER WYLIE: You do say that you are giving them pride of place, but you are the schedulist, I guess, but I'm not sure that the Commission envisaged that during the week CTV would have two full days with -- between seven and eleven with no Canadian programming -- three, three -- and then I believe a half hour on Tuesday, right? "The Associates" is a half hour or an hour?

566 MR. FECAN: One hour.

567 COMMISSIONER WYLIE: Excuse me, one hour. What you are saying is we shouldn't worry about that, you shouldn't worry about something that looks like this when a BBM show -- that people don't tend to watch TV on Saturday night, that's unlikely to change.

568 MR. FECAN: What I think we should be worried about is the result and the result is that our average audiences for drama are going up and I think --

569 COMMISSIONER WYLIE: Yes, but you have some drama during the week.

570 MR. FECAN: Yes.

571 COMMISSIONER WYLIE: But the average viewing of Canadian programming overall is going down dramatically.

572 MS McQUEEN: The average viewing for Canadian programming in the system has decreased.

573 COMMISSIONER WYLIE: No, for you as well.

574 MS McQUEEN: There is a slight decrease. I will try to determine exactly where that decrease is.

575 One of our focuses has been on Canadian drama. If you ask me what you should worry about, I agree with Ivan. I think you should worry about the results. You are looking at the 1999-2000 figures, I think. You are always, unfortunately, a year behind.

576 COMMISSIONER WYLIE: Yes. I had a decrease to Canadian viewership on CTV between seven and eleven, going down from 17.2 per cent in 1997 up to 18.3 in 1998 and down to 11.7 per cent in 1999 and then, of course, I'm wondering -- I notice you focused on drama. Would "Twice in a Lifetime" become popular faster if it were not on Saturday night? Would your Comedy Network be, you know --

577 MS McQUEEN: May I say one thing about those figures. I don't want to open up an endless debate about the figures, but the figures that you have in front of you are figures from BBM and they are measured during what you will know are considered to be the sweet sweep in November and during those weeks the American networks put on the most powerful and most audience-attractive of all their programming.

578 We tend not to schedule our biggest Canadian events in those time periods. While your figures are absolutely accurate and we don't dispute them, I'm not sure that they tell the real story of Canadian programming because of the time periods in which they are taken, where the American programming is really dominant and most Canadian programmers do not put their big events up.

579 For example, we would not think of putting a big Canadian movie into those November sweeps. We would rather do that in the last half of the program year, in January or in April, when the competition from the Americans is so intense.

580 As I say, I think when you look at those figures, you have to be a little cautions about whether they reflect the absolute reality of how Canadian programs are doing. You can see year to year whether it goes up or down.

581 COMMISSIONER WYLIE: But you have no quarrel with my premise that Saturday night is the lowest viewing night of the week.

582 MS McQUEEN: I do, but --

583 COMMISSIONER WYLIE: You do have a quarrel with it?

584 MS McQUEEN: I do have no quarrel with it, but I do have, and I don't know whether we are permitted to have the kind of creative quarrelling with the Commission that we do at CTV --

585 COMMISSIONER WYLIE: Absolutely.

586 MS McQUEEN: The point is that there are programs. In spite of that low viewing level, it doesn't mean that nobody is watching television. The audience for television on Saturday night may be absolutely suited to a particular kind of programming, as Ivan says, to comedy programming.

587 You would be nuts to, you know, stuff all your Canadian programming, no matter what the type was, no matter what the intended audience was, into hot viewing levels which may be high because that's when the Americans have decided that they are going to put the toughest competition.

588 You are always doing that balancing act, as Susanne said, which is do you want to put your Canadian programming on the highest viewing levels where they will also have the highest American competition or do you want to start them in a place where you can promote them on a night that maybe doesn't count as big competition and you can establish some kind of viewing pattern.

589 COMMISSIONER WYLIE: So basically, Ms McQueen, what you are saying is leave the scheduling to us, we know best how to do it to achieve results and you look at the results.

590 MS McQUEEN: Well, you have --

591 COMMISSIONER WYLIE: If the results are not good in terms of viewership, then presumably you would look at whether scheduling is a problem, but you don't want us to -- you don't think there is any need for us or we don't have the knowledge to do that.

592 MS McQUEEN: Well, I think you have control of our schedule in some pretty dramatic ways. You have defined the highest viewing levels during the week of any given time.

593 COMMISSIONER WYLIE: Yes, but it remains that the flip side of my chart looks different.

594 MS McQUEEN: Right, but what I'm saying is that your control over the schedule is something that we have to keep in mind all the time.

595 COMMISSIONER WYLIE: And we shouldn't worry either that putting a lot of Canadian programs on Saturday night is related to quality. You see, what's happening now is we are not -- as a result of the TV policy -- we are not telling you exactly when to schedule anything, how much money to spend on it.

596 I think that the philosophy we discussed at the TV hearing policy, the hearing was if we tell the big broadcasters, the big groups, that they have to have eight hours of programming in prime time when people are watching, don't worry, they are not stupid, they are going to have good quality programming so they don't lose their audience.

597 That will be the incentive and the assurance for us. Let them decide, force it into prime time and they will do the right thing because there will be commercial imperatives forcing it. But when I find three days in a week without any Canadian priority, any Canadian programming between seven and eleven, I'm wondering if we made the right decision.

598 MS McQUEEN: Well, it would say to me that if you got three days a week without Canadian programming, you have got four days a week in which there is an abundance of Canadian programming.

599 COMMISSIONER WYLIE: Yes, except that I relate it to your comment passionately this morning that you want to have people watch Canadian programming and you choose the days when people don't watch TV as much.

600 MR. FECAN: You would agree that Monday is a good day.

601 COMMISSIONER WYLIE: It raises a question.

602 MR. FECAN: Would you agree that Monday is a good day, the second highest viewing night of the week by your chart?

603 COMMISSIONER WYLIE: It's the third.

604 MR. FECAN: Monday. Sunday and Monday I think is number one and number two.

605 COMMISSIONER WYLIE: Sunday. Next is Thursday. See, what I have is the micro BBM, all persons, two plus, all Canada.

606 MR. FECAN: For six weeks a year, which is what BBM records.

607 COMMISSIONER WYLIE: October 19 to 25 and November 2 to the 22nd.

608 MS McQUEEN: Yes.

609 MR. FECAN: Six weeks a year.

610 COMMISSIONER WYLIE: So that is you feel one of the reasons.

611 MR. FECAN: What I'm saying to you is on Monday, which I would agree with you is one of the three highest, last night you would have got zero because the Leafs were playing Ottawa, so it's a case by case thing and it shifts week by week, month by month, year by year.

612 COMMISSIONER WYLIE: So we may see some Canadian programming, we may see some red on those three days between now and -- especially if what you say is the result is what counts and the results aren't there. You may examine whether scheduling is a problem.

613 MR. FECAN: We are passionately committed to being successful with our Canadian programs. We will promote and move and develop and do whatever we possibly can to make it work.

614 You know the figures as well as we do of a hundred pilots, you know. Some number gets picked to series and of those -- I think in the U.S. 10 per cent succeed for the second year and 90 per cent fail. I mean it's a pretty high risk business.

615 I really hope that in some appropriate period in the licence term when we take stock, you and I and the --

616 COMMISSIONER WYLIE: Whether it is succeeding.

617 MR. FECAN: We see real progress there. That's what we are excited about in terms of this policy, that it allows us, it frees us to drive those audiences up.

618 COMMISSIONER WYLIE: So as broadcasters you are surprised by this question or this focusing on the scheduling.

619 MR. FECAN: No, I think --

620 COMMISSIONER WYLIE: You wouldn't have thought that it would be raised because of the underlying premise that led us to the TV policy, forced the broadcasters to put Canadian content when people are watching. They cannot afford to make a very big effort to make it work.

621 MS McQUEEN: Well, we think it's absolutely legitimate for you and we can perfectly understand that you look at a night that says "Tuesday night there is no Canadian programming on CTV". That's a legitimate question to ask.

622 I think the answer that we are trying to give you is that the programs schedule that you see is not a deliberate attempt to make Canadian programs fail by scheduling them on nights when there are no audiences. It is quite the reverse. It is a deliberate choice that Tuesday night in that particular set of weeks was not a good place for whatever reason to put our programs.

623 I guess what we are saying to you is the hot levels are important, but they are not the only determining factor of Canadian television success.

624 Finally, if there is anything that we have to do, it is increase the audiences for our Canadian programming. You have in effect taken control of one third of the highest audience time periods of our schedule. If we don't schedule programs that do well, that was the initial kind of cunning idea behind it, we won't do well, we can't do well.

625 As I say, I understand why you would say Tuesday night there is no Canadian programming.

626 COMMISSIONER WYLIE: No. Tuesday night there is.

627 MS McQUEEN: Sorry.

628 COMMISSIONER WYLIE: "The Associates" are on Tuesday night. There is none on Monday, on Wednesday, on Thursday in this particular block schedule.

629 MS McQUEEN: Absolutely.

630 COMMISSIONER WYLIE: And when you do it in this fashion, it becomes quite striking.

631 MS McQUEEN: Yes, absolutely.

632 COMMISSIONER WYLIE: You remember how this was done for your benefit the last time.

633 MS McQUEEN: Yes.

634 MR. FECAN: And before that for not -- not for the benefit --

635 MS McQUEEN: Absolutely. So what we are saying is yes, it is a legitimate question and it's striking. If you had asked me on the street if that were true, I would have been surprised a little bit myself, but if I look at that schedule in those weeks, what I would suggest is that Susanne could give you a very convincing reason that related to increasing the audiences for television programming, why there wasn't any on Monday night.

636 COMMISSIONER WYLIE: We appreciate the comment. Surely we wouldn't have spoken that long on the street, especially not in January in Ottawa.

637 In your peak programming, there is no program in the regional category other than -- in the regional category where only being a regional program makes it a priority program, is that likely to remain representative of your mix of priority programming?

638 MS McQUEEN: Absolutely not, and I think it's a conflict between the way we report the figures and some decisions we needed to make. At this point we do not have a program that qualifies as a regional priority programming in our prime time schedule.

639 What we have done is simply extrapolate our figures from what exists now through the whole seven years, so you will see we haven't changed the mix at all from this particular program year.

640 It was a difficult thing to do because we weren't sure what programs we would be doing or what kind of -- how many of them we would be doing or how much money we would spend on them. Rather than put down a totally imaginary set of figures in that line, we decided to group our spending as a simple extrapolation of what we are doing now.

641 We have what we hope will be a spinoff of the BCE benefits in that we have allotted $23 million, as you know, for just that category of benefits. We will start taking pitches for those benefits at Banff -- for the development of those benefits at Banff.

642 Our assumption is that there will be so many of those pitches that some of them will go into the BCE benefits, but a number of them will go into the regular eight hours of priority programming.

643 MR. FECAN: I would also just like to note that with the new policy, Vancouver ceased being a region. You know, we do have a lot of interest in Vancouver.

644 COMMISSIONER WYLIE: Would you be of the view that one other way to meet the Commission's desire to have the regions represented to each other on national programming, et cetera, that the involvement of the individual stations in the choice of the group or the network, if you want to call it that, of programming would be an alternative way of ensuring regional production. I would like to understand better the role of your regional development offices, as well as of the stations that have some monies and how that relates to the priority programming, whether or not these development offices have any say then in what at the end of the day is chosen to be put on the schedule as priority programming, or whether they are simply dispensing money to independent producers in the region?

645 MS McQUEEN: Susanne, would you like to start that off?

646 COMMISSIONER WYLIE: Do you know what I mean? Is there some type of control at the end, or it simply we have an office in Halifax, Toronto, Vancouver and we have certain stations that have a certain amount of money to develop programming? I think at one point you say right now there are 70 active projects in development, and you add at page 19 of your supplementary brief, "...while many are developed, few are ordered for production". What is the role of these regional offices and of these budgets in the choice at the end, or is that all chosen in Toronto?

647 MS BOYCE: It's definitely not chosen in Toronto. For us, and we have spoken about this, the team that you see here and others who are not here are critical to putting the best programs to air. Ideas are key to that. I think the best thing, I would like to throw to Louise and Johanna in our offices to explain how they see it from --

648 COMMISSIONER WYLIE: I want to emphasize another Commissioner will discuss with you the whole regional production area.

649 MS BOYCE: Right.

650 COMMISSIONER WYLIE: All I am looking at now is the peak-time programming. What is the relationship in the choice of what ends up being shown across the country?

651 MS BOYCE: Yes, understood. Perhaps, Louise, you could start and Johanna and also Bill.

652 MS CLARK: I think it takes us back a little bit to the quarrelling you heard about earlier. But I think it's a positive debate in that what we are looking for is the victory of the best idea or the best story.

653 We are autonomous in our pursuit of developing ideas, whether they are for national or less than national play. We bring these ideas to the table right across the country in a series of fairly informal, but fairly loud conversations on a very regular basis.

654 We try to make sure that as the development process goes on we become familiar with each other's projects. So that's a question of Johanna in Halifax getting to know what it is that I am doing in Vancouver, or both of us getting a better idea of what is being developed in Toronto and vice-versa.

655 I wouldn't say it's a perfect system, but it is certainly one where there is a great deal of will to make that communication work and has been very effective so far. There's a lot of debate. I think what you have before you here on this panel are a number of very committed people. We are opinionated and feel strongly about those shows that we invest in, whether it's just with money or with our time.

656 So, yes, we have a very good shot at getting our priorities on the priority schedule.

657 COMMISSIONER WYLIE: Is it too facile, Ms Boyce, to think that if that system works and Toronto doesn't always have the bigger end of the stick when you have these conversations that that may increase the regional input into what gets into the --

658 MS BOYCE: Yes, because what we do now and again, to go back to the movies of the week, for example we have a slate which Bill Mustos can speak to, of nine MOWs. Of those five, I believe, Bill, are from different parts of the country. That is sort of a natural almost a selection process for us because we go back to where the idea is.

659 In terms of it being say coded regional production, I guess it would not, but it's what we do on a day-to-day basis. Is that making sense?

660 For example, Johanna and Louise are -- Louise, for example, is very involved with "The Cold Squad" series. Our MOWs, I just looked at the list here, again to repeat, like "David Milgaard" which was done both as a documentary and a movie of the week, when we played it it was 1.5 million. When we replayed it it got 1 million. So in three years that's what we have started to develop. The series we haven't quite cracked yet, but to me that is really huge.

661 It is getting off topic I guess, but --

662 COMMISSIONER WYLIE: We will go back to regional programming per se. Mr. Fecan mentioned Vancouver is no longer a region, but it is in a sense in the choice of programming it probably is more likely that there will be a better cross-section of the country if there is some decision-making power in Vancouver as to what ends up on the peak time schedule.

663 MR. FECAN: Madam Wylie, my comment of course is just in terms of whether it gets reflected in that particular category.

664 COMMISSIONER WYLIE: Yes. In the categories that are not priority but for the fact that they are regional. Vancouver, for whatever reasons, which many parties didn't think was an intelligent way of cutting it, including some of us, but there it is, Vancouver is not a region for these other categories, but that doesn't include regional input into the choice of drama, documentaries, et cetera.

665 MR. FECAN: When you look at the body of work that is emerging in the last few years, and we hope you see a lot more of on the screen in the next few years, when you look at a movie like "Bless the Stranger" the Swissair thing and how it affected that community, that had to come from the east coast.

666 When you look at the "Sheldon Kennedy Story" the western development office was very much involved. It was an Alberta story. When you look at "Milgaard" we didn't even have a station in Manitoba and David Asper's star -- has a very great star turn in it, at least his character.

667 COMMISSIONER WYLIE: I hope you are paying him his royalties.

668 MR. FECAN: I think he has earned them. We are very interested in reflecting the different parts of the country. Part of having this kind of development grew and having the creative and positive debates that they have is these stories don't get pushed to some side cupboard, these advocates, and they are charged with being advocates for their area and for their stories take seriously the idea that they want to see their Canada on CTV.

669 I would point to the body of work that is demonstrating this, and regretfully not all of it is captured by some of the definitions, but it is certainly captured by the audiences.

670 COMMISSIONER WYLIE: Thank you for this. We will see tomorrow just how worried Global is about scheduling "Outer Limits" against "ER". Thank you.

671 Thank you, Mr. Chairman.

672 THE CHAIRPERSON: Thank you.

673 We will take our lunch break now and reconvene at two o'clock.

--- Upon recessing at 1230 / Suspension à 1230

--- Upon resuming at 1400 / Reprise à 1400

674 THE CHAIRPERSON: Good afternoon, ladies and gentlemen. We will return to our hearing reviewing CTV's application for its licence renewal. I will turn the questioning over to Commissioner Grauer.

675 COMMISSIONER GRAUER: Thank you.

676 I will be talking with you about the areas of regional programming and also some of your development activities. What I would like to do is pick up from where Commissioner Wylie left off this morning. I was going to add that I think part of the reason that Vancouver isn't a region has been a lot of the licensing and production activities of CTV in British Columbia is a result of commitments made when VTV was licensed.

677 You have provided an extensive description of your regional development activities and a break down of regional development funding over the next licence term, which is the Atlantic and western offices with $200,000 each annually, and the national office with $500,000 annually. Then some of your major stations will have $50,000 each to be made available to independent producers in your markets. I think the total works out to $1.2 million a year, which over seven years is $8.4 million.

678 What I would like to get a better understanding of is how the regional development offices work with their budgets vis-à-vis the national office in terms of the allocation of funds and what exactly is the role of those major stations which do have their own budgets and the stations managers vis-à-vis the development officers?

679 MS McQUEEN: First of all, Commissioner Grauer, you probably would like to get the information from the people who actually do this. I would ask Johanna and Louise if they could answer Commissioner Grauer.

--- Off microphone / Sans microphone

680 MS MONTGOMERY: ...in constant dialogue with each other and across the country trying to fulfil one set of programming priorities across the network. So the work I do in the east very much ties in to what you see on your screen. I guess that's in a short --

681 MS McQUEEN: Could you explain for instance --  I don't mean to translate between you, but how do you spend money and what kind of goals and guidelines and specifics do you have within your own area of responsibility.

682 MS MONTGOMERY: I think there are a number of things that you try to fulfil within the Atlantic development office and I think it's probably true for the west, but Louise can speak to that.

683 The first thing is access of regional producers, writers, directors to the network. In that regard we are on-ramp to CTV in the east.

684 The other is the development of new talent and giving them an opportunity to be seen on a national platform. For this we have so many examples. Just last Christmas we premiered a half hour Christmas special called "Little Buck" that was produced in Cape Breton. That was a wonderful opportunity to train five new animators. We had a brand new writer. We had a brand new producing team on that and they had two opportunities to garner audience for their show over the Christmas period.

685 So it is just one example of many, many where access for regional producers, directors and writers to a national platform comes into play. There is a great deal of autonomy in terms of how development funds are spent within the various offices. We are setting our own course and our own agenda from that point of view, but fulfilling a national set of priorities.

686 Then I think the other thing that we try very hard to do is present regional stories to a national audience. So it is not just the talent to the national platform, but also the stories themselves and for that there are many examples, as well as "Loyalties", which is a one-hour documentary about two women who met somewhat by chance, who it turns out, one black, one white, that they were related ancestrally as slaveholder and slave. This wonderful documentary has not only received all kinds of accolades within Canada, but was up against Ken Burns' "Baseball" to receive the American Film Institute's documentary award, which they didn't win. It was just a nomination, but it is a pretty nice place to be for a small story that has a big impact.

687 I would say that another one like that would be "Blessed Stranger", which is an MOW that looks at grief under the spotlight as a result of the Swissair crash. We premiered that last fall.

688 So these are great stories that reach out across the country and, in many cases, are going around the world.

689 COMMISSIONER GRAUER: The same question, and I guess also the extent to which you work with the national office and how those budgets are allocated, with the new share and --

690 MS CLARK: I think in any given year the demands go up and down. For the most part, we spend our $200,000 a year. In Vancouver, I think we have come up a bit short this year, partly because we do feel like we are in a transition. Those dollars will roll over. We keep them.

691 The other factor that I think is important to note about our development dollars is that the better we manage our development funds, the more development funds there are. Because, as you are aware, the programs that we develop, as they go into production, those dollars are returned to the funds. So we are looking forward, given a good track record over the last three years, to actually increasing the development funds right across the country. I would say that is fair to say.

692 In a situation where a network show is being discussed or a system-wide show is being discussed, and it may have come through a door other than my own, there will be a kind of negotiation that goes on. I will sit down and talk with Bill, or more likely over the phone or by e-mail, and we will talk about how much of my fund at the moment I have in drama, how much I have in kids, how much I have in documentary -- what is the best use of those dollars.

693 If we are getting close to the end of the year and all of us are getting a bit tight, we will do a bit of a negotiation. What won't be evident to you are the number of dollars out of the Toronto fund that are actually going to regional projects in addition to our own. I think that's a fair comment.

694 But, again, in terms of making final decisions, as Johanna said, those development funds -- we do have autonomy. I am happy to listen, always, because I respect so much the opinions of my colleagues, but when it comes down to the crunch in development, the decision is mine.

695 COMMISSIONER GRAUER: What about -- for instance, you were saying that this revolves, in particular with the situation vis-à-vis BTV, where there has been a specific licensing commitment for funds to be available that have to be spent -- what will happen?

696 There has been a discipline in there for you. I mean, money has to be spent, so it kind of focuses your mind; enormously I would imagine. But what happens when those funds disappear, as they will when the licensing commitments expire?

697 MS CLARK: To the best of my knowledge, there are no plans for these funds to disappear. The licence has already been amended, last July, around certain conditions of licence, and going forward the plans that have been tabled are to continue all of the development funds at the levels that --

698 COMMISSIONER GRAUER: Maybe I didn't make myself clear. What I was really talking about were the funds that have been committed to B.C. producers as a part of the licensing of BTV. Those will eventually expire; right? There will not be any longer dedicated funds for the productions.

699 What I am saying is, how is that going to change --

700 MS CLARK: I think I did understand your question, Commissioner Grauer, and I think the answer is that there are no plans at this point in time, because we are going forward with Vancouver Television under the new public policy -- the eight hours. So we are already one foot -- actually, we are almost knee deep in there now, and we are going forward with those funds intact.

701 COMMISSIONER GRAUER: Maybe we can come back to this.

702 Tell me, how does your relationship work with the major stations in western Canada which each have the $50,000 development budgets for independent producers in their markets?

703 MS CLARK: I will pass that to Bill, who looks over those funds.

704 MR. MUSTOS: The major stations that have development funds have complete autonomy. There is $50,000 a year in those funds, and that is administered by the station managers on an annual basis. It is really grassroots R & D that happens at the station level, and occasionally we find ourselves working on projects together, but not usually.

705 Most of the writing community that is working for CTV will gravitate to the Halifax, the Toronto or the Vancouver development offices. But occasionally there is overlap.

706 COMMISSIONER GRAUER: So if those development funds go to those station managers and they are completely autonomous, what kind of programming would they be likely to develop with that money?

707 MS McQUEEN: Many of our station managers are here.

708 Dennis Watson, from Kitchener, do you want to give us one example?

709 COMMISSIONER GRAUER: Maybe one example, and then it can be covered on individual stations.

710 MR. WATSON: Commissioners, our fund has been in existence for a number of years. In this licence term we have supported 16 different projects, the majority of which were local funds being granted to people from Waterloo, Kitchener, London, Parry Sound, Owen Sound, as far away as Calgary, and a couple from Toronto.

711 COMMISSIONER GRAUER: Thank you.

712 MS McQUEEN: In general, most of them are factual programs, although Dennis actually did put some money into a feature film that was produced in his Kitchener region. So it really is looking at the local producer, the possible talents, the project, and making the decision that this is a good project to support. But they don't have a set of rules from Toronto about what they are to support. It is specifically their knowledge of the community which guides their decision.

713 COMMISSIONER GRAUER: So really what we have, then, in terms of, say, national drama development -- the $200,000 for western Canada, the $200,000 for the maritimes, and then a $500,000 national budget --

714 MR. MUSTOS: If I could just clarify, the $200,000 that is in each of Halifax and Vancouver will go to drama, but will also go to a lot of documentary development, children's development and that sort of thing -- comedy.

715 COMMISSIONER GRAUER: What about the national budget? How do you allocate that? Do you have any internal guidelines with respect to how to spend that or target? Meaning where.

716 MR. MUSTOS: Meaning where, no.

717 We actually do get pitches from across the country. The Toronto development office doesn't just deal with, say, Ontario, or Ontario and Quebec writers and producers. We will get pitched ideas from Victoria to Cape Breton.

718 Usually when a project comes in to us from regional producers we will then hook up with Johanna or Louise to talk about the project together. Sometimes we will co-develop it together. Sometimes we will say: Can you now take it and run with it? Sometimes we will decide to take it and run with it. It is sort of a workload issue that we work out throughout the year.

719 But, generally speaking, the way those dollars are allocated is just sort of the best projects that come along to us from across the country we try to seek out, and then work in concert with the development offices.

720 To go back to an earlier point, you were asking about how we work together. Our practice is that the offices try to speak on a regular, bi-weekly conference call, where we talk about our objectives and what are the shows we want to do. We have the creative debates. But it keeps us on a fairly firm line, because we are in such regular contact that we are able to always be aware of what each other is doing.

721 COMMISSIONER GRAUER: Development money has been characterized as the research and development money of television; not just by you, but by a number of intervenors and others. I know that Ms McQueen talked this morning about how important -- the references were made this morning to pilots, the high rate of failure in the States, and just how important this development money is. Television is, you know, as you have described it, the most watched and important window for popular culture.

722 When we look at the funds for program development, it appears that they are decreasing for several stations in the upcoming licence term. For instance, Ottawa has had a budget of 115, which is going down to 50. MCTV stations are going from $100,000 to 50; Kitchener from 69 to 50; Edmonton from 1.2 million to 50; and the CFCN production fund, Calgary and Lethbridge, from 100 to 50.

723 I recognize that some of these may well be coming to an end of some benefits and licensing commitments, but I am just wondering if you can sort of elaborate on that. Is it part of a corporate strategy?

724 MS McQUEEN: Commissioner Grauer, when we are talking about this there is kind of an elephant in the room that we don't refer to. I don't know whether we are being too delicate or not, but there is a huge BCE benefit development fund that will come onstream that will replace the previous funds that you spoke about and augment them.

725 Our belief is that the weight of this funding, which dwarfs these commitments, is such that we think we will be able to accomplish a range of development that will enrich, obviously, the BCE benefit programming, but also have a big spinoff effect on the regular eight hours of priority programming.

726 The benefit money for development in that package is about five plus three, I think --

727 MR. MUSTOS: Five plus two.

728 MS McQUEEN: Five plus two. So $7 million. That is $1 million a year over the next seven years.

729 Frankly, spending that development money -- we can do it, but we have to do it judiciously and smartly, and I would say that at this point that is probably the amount of development money that we could spend without it being kind of standing on the street and giving away dollars. In other words, to handle the pitches, to do the creative work, to accept or turn down or ask for further work on $1 million worth of development projects is probably pretty close to the limit that we can handle.

730 COMMISSIONER GRAUER: As I understand it, the BCE -- all of those benefit moneys are meant to be incremental.

731 MS McQUEEN: And they will be incremental, but I think they are incremental both to the hours of priority programming that we have talked to you about -- so that they will primarily be directed at that.

732 But because, frankly, there is such a lot of money, we won't be able to restrict it to the number of hours of programming that we had thought about in our BCE benefits. Some of these development projects will go toward the priority programming. It is just inevitable. Most of them will go toward the BCE incremental hours of priority programming, but just because it is going to be the same drama department and the same variety department, and the same Louise and the same Johanna handling all of these development projects, there are two places where they can go, and one is into the BCE incremental hours, and one is into the eight hours.

733 I don't know if you would like to talk a bit more about the wide use of development dollars and spending that amount of money. It is great, and it sounds great, but there is an administrative burden and a creative burden that it creates, and I just don't know how much more we could handle.

734 MR. MUSTOS: There is that point. I mean, this is going to be a tremendous infusion of creative R&D into the country over the next seven years.

735 But I think another couple of points that are worth going over with you are, number one, we are continuing our plans for the development offices in Halifax and Vancouver even as those dollars could be sunsetting under previous licences or benefits.

736 Our plan over the course of the next seven years, if you should choose to grant us a licence for that long, is we will be continuing our commitment to those offices, both in terms of the $200,000 per year that goes out the door to the creative community in the west and in the east, but the expense of the offices themselves.

737 We are also committing to this $50,000 level at the local station level, which, to my mind, I think we are the only broadcaster in Canada that has that kind of grassroots R&D at the local station level. I think that is quite astonishing.

738 I want to underscore Louise's point about the re-infusion of the recouped development. That is a very big thing. If we are developing ten projects and we choose to order two or three of those, when we order those two or three that development money comes back to us, and rather than just putting it into the bottom line of CTV, we put it back into our development funds.

739 That has been a wonderful self-generator for development dollars, which has been a tremendous boon to all of us.

740 COMMISSIONER GRAUER: On the development money, this is for some stations. It is not all stations, as I understand. Is that correct?

741 MR. MUSTOS: That is right.

742 COMMISSIONER GRAUER: I think it is five stations?

743 MR. MUSTOS: That is correct.

744 COMMISSIONER GRAUER: It is interesting that you should suggest that you could be sunsetting these offices, and you have chosen not to. I question how you could reasonably expect to be identifying and developing and finding the talent to be getting the kind of quality programs you want without that.

745 The $200,000 that is allocated for western Canada and $200,000 for Atlantic Canada I would not think could be characterized as lavish spending on development. It is better than what we had five years ago. The BCE money, as I understand it, is not specifically allocated regionally.

746 MR. MUSTOS: When we add the five hundred in Toronto to the $200,000 and $230,000 in the east, we will also sometimes have to steal a little money out of the programming budget to enhance our development expenditures during a given year. That happens on a regular basis.

747 If you assume that there is about a million dollars that comes out currently from the three development offices and then you talk about another million dollars that is going to be added into that mix for the BCE benefits on an annual basis, that is a very significant amount of development money, particularly when you are regenerating that money through the development money that you recoup and put back into development.

748 COMMISSIONER GRAUER: What I will do is move on to some of the programming issues, because I think what this speaks to is something that certainly is important to me and important to the Commission and important to a lot of intervenors.

749 As you probably know, a number of them have spoken to us about the need to impose specific requirements for licensing and producing of programming which reflects the regional diversity of our country and ensures that Canadians from all parts of Canada have an opportunity to develop their creative talents.

750 The Broadcasting Act speaks to that and it has certainly been a priority of the Commission, as was identified in the TV Policy with respect to this hearing to explore with licensee.

751 Part of the rationale for these objectives is that the economic benefits should accrue to all Canadians from an industry that is essentially built on public property and generates revenues all across the country. It also benefits from funding from a variety of public sources all made possible by the contributions of Canadians.

752 Historically, I think what has been experienced in the west, which has been well documented -- and I expect it is true in Atlantic Canada, although it has not been as well documented -- is that these expenditures are made when and if there are benefits from a specific transaction or licensing commitments from a competitive process.

753 Historically, we have seen that when those commitments end, so in fact does the licensing activity. I had quite a long discussion with Global at the WIC hearing last year, and that is a lot of the reason for my wanting to explore all of these issues with you.

754 I appreciate that there may be money coming in from BCE that is meant to be incremental and is also not specifically designated.

755 I know that you have provided detailed peak time programming that you plan for the upcoming year that shows a regional balance, the programs that you have identified.

756 Many of those I think -- but I don't know for sure -- are as a result of old benefits, transactions and licensing commitments, whether it is from BTV. There is a carryover of expenditures, whether it is storytellers, or whatever.

757 I wonder if we could talk a bit about what are your plans for the coming licence terms, to ensure that you have that kind of diversity. I think that history has to be our guide, and the history is not very encouraging.

758 Perhaps you could elaborate on your plans for the licence term.

759 MS McQUEEN: If history is your guide, we think we have a pretty good history. I would like to talk about some of the areas in which we do priority programming which are not related to any benefits, and have a look at our track record.

760 For example, Susanne, could you talk about movies and the slate of movies that we have coming up.

761 MS BOYCE: Sure. We have nine MOWs, slated movies, coming up. Of those, I believe five are from different parts of the country.

762 As well, we consider a show like "Canadian Millionaire", for example, which I was going to say didn't count for anything in a programming or quota CRTC way, which was a program that in fact was so reflective of this country -- unlike the American Millionaire -- and 4 million Canadians tuned in each night to watch that show.

763 As a group, we feel very strongly -- and Ed and Bob, jump in in terms of examples -- about programming coming from across this country that we do it. The track record in the last three years that we have been around -- as I say, it has been three years and a bit -- will demonstrate that.

764 We have put on 575 hours of drama and another 70-1/2 hours outside of "W5" in documentary programming that comes from across Canada, but also is diverse within that as well. It is really kind of a programming philosophy and corporate philosophy handed down, and emerging talent is also key to us.

765 Bob, if you would like to jump in, that would be great.

766 MR. CULBERT: The numbers in the world of documentaries speak loudly to this. In the past three seasons there were more than 70 hours of documentaries prime time broadcast nationally on CTV, and more than 40 of those had been commissioned and were supervised by the regional offices.

767 Looking forward, the same sort of equation is the same. We have 33 hours currently in development already for broadcast; 20 of those hours were developed by the regional offices and are under the supervision of those offices.

768 Even looking down the road in the development projects that we have developed, of the 22, 13 are again developed through the regional offices and will be supervised by them. So there is a consistency.

769 In fact, we would not have the slate of documentaries that we have right now if it wasn't for the work of the offices in Halifax and Vancouver. We could not have that much being done out of what is being done in Toronto.

770 MS McQUEEN: My point is that most of this regional work is not related to a specific benefit that we had to undertake. Some of it is. For instance, some of the Vancouver documentaries came about because of a specific benefit commitment. But there is no benefit commitment regarding movies. There is no benefit commitment regarding documentaries from other parts of the country, except Alberta. There is no regulatory reason or stricture for doing a particular movie in Alberta.

771 I think one of the things that may give you some comfort is that if you build in a structure that makes access for all producers part of your daily work, then that is how it happens. It doesn't happen just because we are nice people committed to Canadian programming, and all those words.

772 We have an actual structure that gives equal access to producers from across the country. We have people in those offices who can make decisions, who can be strong advocates for their region and their programming.

773 So once you build that structure, things move through it.

774 I agree with you that the notion of having benefits that come and go, it is a good way to get some money into the system. But what the system needs is really a lasting structure that is based on delivering access for talent across the country.

775 As you see in some of the little vignettes that we did, what people in those vignettes and what people in the interventions talked about that they found important from CTV was not just the licence fee or not just the money, but the fact that they saw somebody who had authority and who was part of their creative activity.

776 You heard that over and over again, both in the videos and also in the interventions: that CTV has been a partner to regional producers through an established and autonomous structure. That is the best and continuing way that we think to develop regional production.

777 COMMISSIONER GRAUER: I didn't mean to suggest that you have not done a lot of these things. There is no question but that the licence commitments and the benefits that are in place are an added discipline, if I can put it that way, to be doing these things. Certainly the access structure is very important.

778 But I think when we look at a seven-year licence term, what you are saying is: trust us.

779 What I really want to know is -- I think the access is important, but what other goals or mechanisms do you have within the company to ensure that this kind of balance is met?

780 I understand that these things are cyclical, and I understand that that works. But as you know a number of intervenors, certainly all three of the film development organizations in western Canada and in fact even the CFTPA have proposed some specific measures that they would like to see put in place, which I will go over with you.

781 I think it is really important to try and explore the extent to which you -- and I appreciate that CTV is a new company, and I don't doubt your commitment to quality Canadian programming. But when those disciplines go away, what do you have in place that will really say we need to look a little harder?

782 There is no question but that the production industry in Ontario is older; it has been at it longer. It is in many cases larger; it is more sophisticated.

783 It is going to probably take a little more care and attention in Atlantic Canada and in the west to really develop and build that talent. But it is there.

784 I believe that if you want to find the best, you are going to find it everywhere and not just in one place. It is really a matter of finding the mechanisms and structures inside the company to ensure that that is happening.

785 Do you have targets or goals to do that?

786 MS McQUEEN: We don't have something written down that says there is a target or a goal that Z per cent of drama and Y per cent of documentaries will have to come from the regions.

787 There are certainly performance objectives for people that say, for example, one of Susanne's objectives is to develop regional programming from across the country. We haven't said she has to bring in X of Y flavour from Z region. But the regional production is part of her performance objective, and she passes that on to the Commissioners who in fact report to her.

788 It is part of her specific performance goal. It is part of the performance goals of the commissioning creative heads, and there is a structure in place to accomplish it.

789 One of the things that we have really tried to do, which has been identified as the biggest barrier to creative talent, is eliminate the famous $600 cup of coffee. I suppose it is $2,000 now on Air Canada.

790 Doing that has been a giant step forward, and putting that in place with creative people, part of whose job is to get regional production to us, are two important structural mechanisms and goals.

791 The one thing that the program policy allows us to do is to say that the best idea wins. There may be five great documentaries from Halifax and none from Vancouver in a given year. As you said, it is cyclical.

792 That is what worries us, frankly, about some of the proposals that come from the associations. Absolutely natural. That is what they are there for: to advocate the interests of their members.

793 When you put all of their advocacy, what you would really have is kind of a small checkerboard of you have to do this one from here; you have to do three from there. In the end, I don't know whether that is good for regional programming. I don't think it is.

794 I think when you see the delight of the young man who produced that documentary, he thought he did it on his own. He didn't think he did it because he was part of a check mark on some kind of quota.

795 I think that is important for creative talent: to feel that they have access, but also to feel that they got there because their idea was the best.

796 Producing is tough, and if you don't go in feeling that you are the best thing that ever happened and nobody can stop you from doing this, you are not going to be able to do it.

797 So we do have a concern about a lot of the proposals which suggest a much more micro regulated system of regional production. We think an overall structure, combined with performance objectives, is probably the way to produce good results.

798 We also think that that is part of the policy. You have given us incentives to do regional production. We think you should have the confidence in what I see as the coming of that policy; that although it looks very simple on the outside, when you look at what it imposes on broadcasters it gives them a lot of choice. It also gives them incentives and disincentives against the kind of behaviour that you are talking about.

799 COMMISSIONER GRAUER: Certainly the policy gives the flexibility. There was in fact a category, a programming created that was not meant to replace in any way the fact that the drama programming should reflect the country, but was a way to say "Well, maybe there's a way to incense some kinds of broader programming in parts of the country which didn't have a developed production industry".

800 The policy didn't say we weren't going to discuss with you what your plans were. I guess what I'm talking about today is that you have given us some specifics for years one and two, but nothing by way of commitments of how you are going to ensure that a regional balance is met over the course of the licence term, which is seven years, which is a long time.

801 MS McQUEEN: As I say, one of the things about the allocations or one of the things about the policy is during that seven years we will probably change our program mix, either marginally or perhaps dramatically. We have the flexibility to do that.

802 We are setting out with a clear vision, but it might not work. If it does not work, the genius of the policy is that we can switch to other ideas within your regulatory framework.

803 If you asked us to say now in year one what's going to happen by the time year three, four or five, six or seven comes along, we can say we think that we will be doing in the four genres that we talked about, but there is -- if that doesn't work, we are going to be doing something else.

804 As far as the regional balance goes, I think the way that we can best monitor it, as I have said before, is rather than say in year six we are going to do "X" per cent is to say that we give our executives performance objectives to maintain regional balance in our programs and we have structure that allows them to do that.

805 I'm not sure -- maybe you have some mechanisms -- I'm not sure what else we can do that doesn't get into what Bill Mustos calls regulating the magic, in other words taking over the creative decision-making and having us take three of something that we know are less good than two of something else.

806 I think that you have set out a policy that gives us incentives and disincentives. We have set out a couple of years of plans. We think we have in place structures and mechanisms to guarantee that regional production will be a component of that. For the rest of it, it will be the viewers that make the distinction and I think that's the essence of the policy, that we will do our best to meet the needs of Canadian viewers across the country.

807 I think that is another mechanism of regional production. We think that people want to see stories about their own regions. We know that, for example, "Flight 111, Blessed Stranger" had a higher audience in the maritime region than it did in the rest of the country, and that's terrific and we like that.

808 We know that people in Alberta were attracted to "After the Harvest", for example, so I think there is a viewer demand for these stories. If you put the viewer demand, our structures and your policy together, I think you do have assurances that you will get high quality, audience attractive and regionally diverse programs.

809 MR. FECAN: I think there's one other thing. That is -- you have sort of touched on it, Commissioner Grauer, and that is that you see a schedule or a lineup of the shows we are looking at over the next few years and I think you commented that it appeared on the surface to be appropriate, a good balance.

810 I think you would also see over the last few years there has been a fairly defined body of work emerging from this group of people. I think that's the other thing. You know, yes, your policy has incentives and disincentives, yes, it is part of Trina and her team's objectives as people that work at CTV to make this kind of thing happen and they are measured and in part compensated by the success they have in meeting their objectives.

811 But, yes, also that's what we want to do. That's what we have done. That's what we intend to do in the short term future that we can now see because we have got the stuff in development and orderly days of production. We kind of have a sense of where it's going.

812 I think -- you are sure it says this group of people intends to do that and have done that. We think that's the best way to reflect the country. If we are going to be a truly national system network, whatever we call it, we need to resonate in all parts of the country, not just through local news, but also through dramatic expression or comedic expression or all of the other forms of expression.

813 In order to do our jobs well, in order to be relevant, that's what we need to do. So that's why it's part of the objectives of the CTV team. You know it is in part there because that's what the policy asks for, but it's also largely there because we believe it's the right thing.

814 You know, that's kind of the structure and the incentive that is there, but even if you step back from that and you look at what this group of people have been responsible for as a body of work in the last year or two, what's in the pipe for the next year or two, that gives you a pretty good indication of who we are and what we want to do.

815 MS McQUEEN: If I can just elaborate on that. I know that fun and satisfaction is not a regulatory mechanism, but the fact is -- I think you can tell how great it is to be able to do something like "The Minor Leagues" and to take that guy who had never done a series before and feel in your heart that you have been part of making that happen.

816 The same thing with "Blessed Stranger". When Mike Elgie went to work the next day after that was on and got the compliments and the praise for doing that, that's a rush. That's our addiction, the great satisfaction that you have of making that happen. When you make it happen with a Canadian story, identifiably based in a region and people love it, there is no greater rush. You know, the bonus is nice if you do it, but I will tell you the creative rush is great.

817 COMMISSIONER GRAUER: We were talking about a seven year licence term. I don't doubt your enthusiasm and your commitment for what you are doing. You talked about the flexibility of the policy and how important this is to you, you should be able to make changes as you go through.

818 What happens if in year four -- maybe you are all there, maybe you are not all there -- someone decides that you own an independent producer and why are we giving all this business elsewhere when we can be doing it all for ourselves and owning our own product which raises two questions; first of all, the work going to independent producers at all but, secondly, there may well be powerful incentives for you to not be exploring and developing that talent all across the country and using it.

819 As I say, I think one intervenor put it very well. He said Canadians from across the country have a right to return in both economic and cultural terms on their investment in our broadcasting industries, so it's not just kind of good works. It's certainly a fairly serious matter for me and all of us here.

820 I just wondered if you could -- you know, we are looking for some greater satisfaction with respect to a seven year licence term and commitments to having a diverse production.

821 MR. FECAN: I think we have explained our view as best as we possibly can. I echo what Trina quoted Bill as saying. I think you have to be very careful about regulating magic. I think you need to give out the space to happen. I think your policy gives the incentives for it to take place. I think -- you never know what the future is going to hold, but there is one expression, but the other one is life is full of unrealized fears.

822 I can understand some of the fears, but as I understand the policy, you have as a Commission the opportunity to call us back and come before you and explain ourselves if it turns out that we have decided to buy an independent producer, not work with anybody else and completely disregard all the things that we in front of you believe as very important and serious as you do in terms of reflecting the country.

823 You know, to find that balance between "Here's a policy, here's the incentives, here's what we would like to see you do" and then say "Well, but, you know, now we are going to say it's got to be one of these, one of these, one of these". You know if it's not good, it will fit the pattern and, by the way, raise audiences while you are at it.

824 I think, you know, give us a few years here of room and let us show you our stuff.

825 COMMISSIONER GRAUER: You are familiar with the specific proposals by the Alberta Motion Pictures and these come, by the way, from the experiences I said earlier of all kinds of activity when there's a benefit through a licensing commitment that disappears when those end.

826 These are not  -- they come from experience. But the CFTPA has proposed something a little different, and that is that we introduce measures to provide an incentive to both you and Global to make ongoing enforceable commitments to regional production. They involve hours and spending with respect to the licence term as opposed to year by year.

827 We are not talking about you can't do this kind of programming or that kind of programming. It would be, you know, a very flexible mechanism to address some of these issues.

828 MS McQUEEN: Well, I guess what we would say to that is that the film producers generally, all the groups that you are talking about, appeared before you in the television program policy hearing and so did we.

829 We talked about a number of things that we thought should be in the policy and so did they. Some of the things that they wanted are in the policy and some of the things that we wanted are in the policy and vice-versa. Some of the things that we would have liked to see aren't in there and some of the things that producers would have liked to see aren't in there.

830 I guess what we have to say is that we are into this policy for seven months and the suggestion that we reimpose hours and spending commitments, even on the basis that you are talking about and you are quite right in pointing out to us that these are not yearly or bi-yearly commissioned, but I guess we have a concern that we thought we were going into a policy that built in some incentives and disincentives for us and we have a number of suggestions in front of us that don't kind of give us any room to move out of the policy, but restrict us more.

831 If we are going to change the hours and spending commitments, then we -- we didn't come before you with any changes to the policy. We accepted the policy as a whole. If you would like to change the policy, that is your power and you can do that, but we would kind of like to have a chance to suggest some changes that we might like in the policy as well at the same time --

832 COMMISSIONER GRAUER: I'm not sure that we would view some sort of over the licence period commitments from you as being necessarily a policy in that we wouldn't be talking about specific types of programming. All that flexibility would be there. It's mainly a matter of reflecting the regional diversity, but we will leave that for now.

833 Would you be willing to make annual reports to us on this kind of activity to us in terms of where your programming has originated and what is and isn't part of an existing benefit or licensing commitment?

834 MS McQUEEN: You know, we would really love to do that. On any basis that you want, we are willing to report to you because we believe that those reports will please you, convince you that you did the right thing in adopting those policies and also make a difference to the people who are concerned about it so, yes, absolutely, we would like to report and like to do so even if you wanted to in something -- in some form that would enable you to talk with us about how we are doing.

835 MR. FECAN: And we would want to add in any such annual report, not just the bare bones of, you know, "X" amount from this category and "Y" from that, but as you know, we are a small country and a relative small industry. Often producers from different parts of the country and writers and producers join up.

836 You saw the example of the two gentlemen from Edmonton who joined up with the story runner in Toronto do "The Associates". Now, that particular show was set in Toronto, so perhaps aside from talent development, it doesn't really contribute much regionally, although I think they would beg -- the two gentlemen would beg to differ.

837 Then there are other movies of the week where it might be a co-production between a couple of people and it might not actually fall into that specific category that is set up.

838 We would want to report to the categories, of course, but also tell you how we are serving the viewers in different parts of the country through programming that may be done with people from their area, but it is also specifically about things going on in that part of the country.

839 We would like to make it a little more fulsome than just the bare numbers.

840 COMMISSIONER GRAUER: I think that's it for me.

841 THE CHAIRPERSON: Thank you, Commissioner Grauer.

842 We will now turn to Commissioner Pennefather.

843 COMMISSIONER PENNEFATHER: Thank you.

844 Good afternoon. We are going to narrow the focus again. I have been looking at the screen here and I see "Canadian Challenge and Content", but in the backdrop I see the word "Opportunity and Focus". I would like to focus our attention on local programming.

845 What I am after here is to get from you a clearer understanding of your corporate strategy regarding local programming. As you know, we will be going through the individual stations to discuss elements of their plans for the coming licence period individually, but our focus now will be looking at local programming and is it an opportunity or not and where it fits in your strategy.

846 The backdrop, obviously, is the Broadcasting Act which as Commissioner Grauer took you through contains the important element of regional resources for programming, but also local resources for programming. And the TV policy which you have discussed today at length certainly brings our attention to the importance of local programming, both news and non-news and sets out clearly that we will discuss your plans in that regard at this licence renewal.

847 This morning, Mr. Fecan, you said "Being part of the community makes the whole stronger. We have to be there". What does that mean in terms of what we will see on television screens? Where does local programming fit in your strategy?

848 MR. FECAN: Let me start off and then I will pass on to Trina. What it means is everywhere we own a CTV station we are number one in news. That's important to us because there is competition out there, very good competition, and yet the viewers in those areas feel more connected to us than they do to others. We earn that every day.

849 So it means being there with regularity every day, talking about what's going on in the community. It means being there when there's something extraordinary going on and just pushing the schedule aside and whether it's a train wreck in Halifax or a flood somewhere else, just being there when it matters to be there.

850 It means being part of the community. We encourage our people, pretty well insist that all of our key people in communities take part in community events. We don't subscribe to the idea that our people should be separate from the community or judge the community in any way. We want them to take part in the fabric of the community.

851 It means working with the creative people in that community, whether it's the kind of development fund that you heard about earlier, a $50,000 fund for CKCO, or whether it's developing somebody through our development offices to go to that next step because while that's kind of regional or national, it's also local. They live there and they want to live there. So I think it's the totality of things. It's being part of it in every way possible.

852 The founding companies of CTV all were kind of of the community. That was very, very important to the fabric of those companies and that's very important to the fabric of the new CTV Inc. going forward. Those are traditions that we have very much wanted to embellish, to build on and in some places we have refocused them, to use your word a bit, so that they might be more effective in one instance or another.

853 But stepping back from it and looking at it, it means being there every day. It means a strong connection there. It means living and working with the people you cover. It means being there when you need to be there, when there's a crisis or some event that just requires you to just go wall-to-wall. It means giving back to the community through telethons, through other kinds of community events and it means nurturing the talent in that community.

854 MS McQUEEN: To sum up, there are three goals that we set for our local stations; one is to be a leader in providing highly local news. That's I guess the simplest and most obvious one, but we don't ask them to do newscasts that are a generalized picture of the world or even of Canada. We want those newscasts to live, breathe and smell like the community that they are in. They do that. That's why they are the leaders.

855 Number two is community relations, or community participation is I guess a better way of putting that. I would put at the top of the list there diversity. Most of our diversity objectives arise out of the activities of our local stations. When we get to the session we would like to be able to give you some of those examples because those are objectives that are set for those station managers. They have had some innovative and really interesting ways of reaching them.

856 So being part of your community means understanding the people who live there, reflecting the people who live there and make sure that you are with them.

857 The second part of that is community celebrations. When I was at the CBC, and this is something that I guess Ivan was alluding to, there was this notion that because you were a news organization that you couldn't celebrate and be there when the community was in a great mood, so to speak, because you were journalists and you had to keep a difference. One of the glorious things about CTV is they have been able to do great news, but they are really and truly involved in the major celebrations of every community. Whether it's the First Night New Year's Eve or whether it's boat races -- I'm sorry, I am not very good at thinking of examples of this, but that's what they do.

858 Raising the money, for example, to buy the turf for the football stadium in Regina -- what was the name of that campaign? I can't remember, but it had a cute name, "Defend our Turf". I know that whether it's Winterlude in Ottawa, for example, you will always see at a major celebration the CTV and the local station logo. So that's an important part.

859 A third part, obviously, is being there for the major events that disrupt or distress the community and to try to help the community. That might be, the most recent example, the transit strike in Vancouver and the extra news. I can see Bob just dying to tell you a little bit, so we will have to indulge him I think.

--- Laughter / Rires

860 COMMISSIONER PENNEFATHER: For the time being I guess I will pick the stories.

861 MS McQUEEN: All right.

862 COMMISSIONER PENNEFATHER: I will come back to that, but I wanted before we went a little further to make sure I have understood your description because we are staying at the corporate level. I do think we will have lots of time to go through all the details. In fact, reading through the Schedule 12s of all the individual stations, the story you are telling us and I don't have a problem using the term "story line" speaks to that. It speaks to community involvement, relationships with the community to covering major events. It speaks to news when it comes to the screen.

863 I think what I would have to say in questioning further on your strategy is of the three components one, strictly speaking, ends up on the screen, the television screen, that is news itself, not in any way undermining the important role of community involvement and the effect that can have on viewership and so on.

864 But if we look at what's on the screen from the point of view of you reflect a community back to itself and serve the needs of that community, what I haven't heard you discuss in detail is local non-news. In fact, if we look at the various programming schedules which you submitted with your applications, and we will go through this in more detail, there is very little non-news. Do you not feel that non-news programming, such as documentaries, fact shows which I think you just referred to previously, also can reflect a community and why is there so little of it in your program plans?

865 MS McQUEEN: Commissioner, first of all, the three legs of the stool, just so I make that clear for the record, one is news, one is community and the third one is bringing the regional level to the national, but set those aside and let me answer your question.

866 Our belief is that there was a time when non-news local programming was viable and important to viewers. We think that time in our history has frankly mostly passed, that the opportunities to schedule and to resource the kind of programming you are talking about at a local station level and to promote it and make it a part of people's appointments just isn't going to happen, unless we wanted to devote literally tens of millions of dollars to that.

867 We see now that people in their lives, in the community lives, have decided that they want a kind of appointment viewing. We try as a local station to be with them when they expect us to be there on a community level, which tends to be in the morning, at noon, six o'clock and late night.

868 So what we have tried to do is to expand the definition of news at those times to include the kind of local reflection that you are talking about, whether it's a mini-documentary, whether it's discussion programs, whether it's debates, whether it is arts, bulletin boards and the reflection -- interviews with local talent and promotion of entertainment events that are going on. We have expanded the definition of our news programming, so we can put that kind of local reflection inside.

869 That is particularly true I think in the morning and at noon. Our feeling is that this is the way the audience can relate to their community in a specific way, whether we can give a great deal of coverage to these subjects, and where the audience wants to be, quite frankly. That's our strategy is to make appointments with the community at specific times of days when we will always be there and to expand the definition of news so that you do get community reflection within those hours that are labelled, quote, "News".

870 MR. FECAN: But when we cut ahead to next Friday and when you have an opportunity to go through station-by-station I think you will see that there are an awful lot of exceptions by station to that rule, depending on the needs of that particular community. In some cases it's a scheduled program and in some cases it's the specials. It may be a fact-based issue, documentary. It depends according to what that particular community wants and the kind of feedback our station managers get.

871 We make it very clear to them and the centre is very much clear, that when this kind of thing comes up that room is to be made for it. But I think the best evidence of this will come to light as you talk one-by-one with each one of them and they can point to what they are doing over and above what Trina is discussing that may make a lot of sense at their particular circumstance. It is going to be different in each location.

872 COMMISSIONER PENNEFATHER: We will go through that, although I must say I do have trouble finding the numbers of hours you say are there in what we want to call local non-news which would not be within the news hour, but some other shows like "Regional Contact" or indigenous peoples out west.

873 But on your comment, as a corporate strategy, from what I am hearing you say, Ms McQueen, appointment television, therefore, does not include local appointments other than for news.

874 I am interested in that, and I am a little surprised by it, because some would say that in fact, in this day and age, the distinctiveness of the conventional television station is in fact to reflect this country, as you say on page 6 of your supplementary brief, not just to each other across the nation, but across the street, and yet all that does that is news, which comes with a particular format. Aren't you missing an opportunity to in fact distinguish yourselves from such things as specialty services, which are very national in their scope?

875 MS McQUEEN: We don't, frankly, think that the opportunity is there. We believe, with many exceptions, that when there is an event or a specific situation, the community across the street and around the block is truly best served by doing a lot of local programming. And, yes, we call it news, but I think it includes most of the dimensions of the kind of programming that you are talking about.

876 There is one specific example, again from Kitchener, where they used to do a local talk show, which was done well, with a good crew. It was scheduled regularly and it drew a total of 9,000 viewers.

877 Mr. Watson's decision was to integrate that talk show into his noon news block, and by doing that he, I believe, tripled the audience for that very same programming.

878 That is just one small demonstration of how trying to do local non-news reflection outside appointment hours is really, really tough. We believe strongly that we can have the same relationships with the community that you describe simply by saying that news isn't always a guy with a microphone or a woman with a microphone; it can include talk; it can include debate; it can include mini-documentaries; it can include entertainment options.

879 Again, on Friday, some of the station managers will talk about how they have actually integrated people singing and dancing into the news format.

880 So we really see that the best way to be neighbours, so to speak, with the community is to be there when people expect us and to give them a wide range of programming in those "news blocks".

881 COMMISSIONER PENNEFATHER: In making this decision, you mentioned station managers knowing their communities. Do you undertake specific research? Do you have community discussion? Do you have public fora which would allow you to consistently keep up to date on what the communities want, and that your approach is indeed achieving those ends?

882 Because, again, I refer back to the Broadcasting Act, and our responsibility is to assure that not only are you drawing from the local sources, but you are serving local communities, which means programs produced there for there.

883 MS McQUEEN: Again, that is what we do a minimum of 15 and a half hours a week.

884 Yes, we do deal with the community; not with a small poll or a focus group, but, as our station managers will tell you on Friday, each one of them has a long list of involvement in the community, where they meet community leaders, community activists, people who are involved with the community in every way, from the Sudbury film festival -- which I think, Scott, you are the chairman of -- to the United Way, to diversity groups and so on and so forth.

885 So, yes, their job is to keep in touch with the community, in all of its aspects; and the activists in the community, the people who make the community work and make the community happen. We do that regularly.

886 MR. FECAN: Again, one size doesn't fit all. Everybody does it differently.

887 In Vancouver there is a community counsel that regularly meets and provides feedback to Bob Hurst. But each one approaches it differently.

888 I would be neglecting the obvious if I didn't point out that the people vote every night with their clickers. If they didn't feel that we were doing an adequate job in reflecting across the street from them, somebody else -- and there is a lot of competition in most of these places -- somebody else would, and they would go over there.

889 I think you also have to take that into account as well; that maybe what traditionally has been a minute and 15 newscasts have been expanded into campfires. They do different things at different times. The noon show is a lot more expansive than the six o'clock show might be. The 11:30 may have a different kind of attitude and focus on different kinds of things.

890 There is a lot of content that is in there that gets out to the viewers in ways, I think, they like. I think the CKCO example is a great example. If the same interview gets three, four or five times more viewers because it is packaged in a news format that is part of a whole bunch of other stuff going around, in terms of what is going on in the community, that is how our audiences find it convenient, and they make that choice by making us the leader in "news" in that community. And I think we are doing something right there.

891 COMMISSIONER PENNEFATHER: So your corporate strategy and the model you have chosen, which we will go through in a moment, is based on competitive issues? This is the reason you have chosen this particular model, to compete?

892 MR. FECAN: The service issues and serving our audience is paramount. I think if we didn't serve our audience, if we didn't reflect what their interests were and what was going on in the community, they would go elsewhere.

893 I don't think you can disconnect it from the audience.

894 COMMISSIONER PENNEFATHER: Let me ask you now about the specific model you have proposed.

895 It is on page 9 of your supplementary brief, and it is also discussed in the deficiency letter of February 6.

896 If I understand it, then, there are 15 hours and 30 minutes a week for local news and reflection; correct?

897 I think in all cases you use the term "local news and reflection". Are we to understand from that that in that 15 and a half hours you include -- it's just news, but the news as you have described it, which would include elements you say are the local reflection component, but we are not to assume that there is anything but, essentially, the news as we know the category "news". That is 15 and a half hours of news a week for the major stations across the country.

898 MS McQUEEN: I'm sorry. I am not quite sure --

899 Is there a category thing here that I am not getting?

900 COMMISSIONER PENNEFATHER: No, I just want to be clear. I am discussing news and non-news programming. Non-news programming would be documentary, children and so on.

901 Your definition of the 15 and a half hour block says that it is to local news and reflection, so, strictly speaking, this is news that we are talking about.

902 MS McQUEEN: Strictly speaking, this is news. However, it is a very expansive definition of news.

903 For instance, you mentioned documentaries. It is entirely possible and relevant for us to do mini-documentaries within a news format. We wouldn't consider that to put the newscast into some other CRTC category.

904 If we have a debate or a talk, again, to us that is reasonable to have within a news program.

905 If we have a local singer come on and give a demonstration of what he is doing at the community theatre that night, again, we would regard that as part of reporting on community events.

906 So the notion of calling local reflection news or news local reflection -- I am not sure what the category is, but the kinds of things we do in it are the straight hard news -- the mayor said this; the court case ended this way; there is a pothole in the road; and the weather is going to be nice tomorrow; plus the reflection -- the more, I would guess --

907 How would you define that kind of news, Kirk?

908 MR. LaPOINTE: Softer. And it involves everything, in all of the categories, that we might now recognize as information. It can involve a business program on local entrepreneurs in either Edmonton or Ottawa. It can involve a program featuring the agricultural community in Saskatchewan, the indigenous community in British Columbia, and it can also feature well entrenched segments, like mini-documentaries, in parts of the ATV newscasts out of Halifax.

909 In a way, we see news as the launching pad for other opportunities, because we know that at those times of the day we have the attention of the community. We are trying to help them define their talking points, enhance their public affairs experience and generate discourse, and we can use that as a great opportunity to show them their arts scene, to show them their minor sports scene, to show them successful children, people who are budding entrepreneurs or inventors or innovators. It is not necessary to then hive that off into programming that would run at another time. We have the best opportunity, with the greatest audience, right there and then to hit that point hard.

910 COMMISSIONER PENNEFATHER: Let's go on with that a bit more.

911 The 15 and a half hour block which is news -- and I am listening carefully to your description thereof -- the first question: If we look through the Schedule 10s of all the different stations -- and, again, we will go through this individually -- generally speaking, what one notices is that for news, strictly speaking, in many cases the stations had news commitments and in many cases they surpassed those commitments in the delivery of news. In several instances that was more than 15 and a half hours.

912 Why have you chosen to reduce the amount of news on local stations?

913 MS McQUEEN: There will be no reduction in the amount of news on local stations; we simply put in the 15 and a half hours as a minimum expectation.

914 We have several very successful news formats, particularly in ATV, where there is more, and we will continue those.

915 The 15 and a half hours is our acceptance of the condition of licence.

916 COMMISSIONER PENNEFATHER: An acceptance of the condition of licence --

917 MS McQUEEN: That we do a minimum of that.

918 COMMISSIONER PENNEFATHER: A minimum of 15 and a half hours. But where in each case the station says they will do a minimum of that, but the record shows that they have in fact done more, are you saying that they will continue to do more than 15 and a half?

919 MS McQUEEN: That is certainly our plan.

920 Maybe you could talk about some of the stations where they --

921 MR. LaPOINTE: In some of the cases the documentation, I think, that is in the supplementary brief indicates what has been done in recent years. Some of that news programming would have involved special events, and those aren't always foreseeable.

922 ATV, for instance, went on the air for, I think, over seven hours on the night of the Swissair disaster, and would have done follow-up pieces on that for years afterward.

923 It is not necessarily something for which you plan, but when you are of the mindset of serving a community, those are the types of things you then find resources for: you apply your journalistic talent, your storytelling talent, and you get space in the schedule, by working with Susanne, in order to make sure that your local station can serve the community best.

924 But those are largely unforeseen events.

925 COMMISSIONER PENNEFATHER: If we, then, look at the past history of the different stations and look at the current schedules which you propose, we are correct in saying that there is the 15 and a half hour block, but other types of non-news programming which were there in the past are no longer there.

926 For Calgary and Vancouver, for example, there is no non-news local programming in the schedules as we have seen them.

927 In places like -- I think you mentioned CKCO where there was other kinds of programming apart from the news, which itself sometimes surpassed 15.5 hours. The stations themselves bring forward the point that they were able to. In fact in Vancouver, subject to condition of licence, they had a condition for 8 hours or 30 minutes of non-news. They surpassed that. And now there will be no non-news.

928 It is important because we are looking at this from a corporate level and looking at what you mean by "local programming". If that local programming concept becomes all-encompassing within the news the concept that you have defined to us and that that is 15.5 hours, it would appear that we are dropping the amount of local programming available in each of the stations across the country, both in terms of news in some cases, but certainly in the case of non-news.

929 By non-news we mean documentaries. We mean local shows, such as "Regional Contact" here in Ottawa, and others that we have noted, and the stations have rightly boasted about in their presentations.

930 They are not there now. Why is that?

931 MS McQUEEN: We have no intention of dropping any program that now exists in the schedule unless the viewers reject it. Whatever is in the schedule now, as long as it is supported by the viewers, it will continue.

932 Any non-news local programming that is still in the schedule is there because there is really a strong viewer demand, and we will not turn away from it.

933 In putting forth our commitment, we expressed it as a minimum rather than as a maximum of everything we are doing now.

934 MR. FECAN: I think we need to isolate Vancouver here for a second, for the obvious reasons. Vancouver has currently in the schedule a daily "Breakfast Show". When it becomes a CTV station, there is a conflict between a daily "Breakfast Show", of which there are two or three others in the market now, and "Canada AM", which would not be seen otherwise in the market.

935 As the system morphs, there are adjustments made. I think Vancouver is one where we need to, perhaps today or perhaps on Friday, as you wish, drill down to see why the changes are taking place. I think that may be an exception to the statement Trina just gave you.

936 COMMISSIONER PENNEFATHER: I recognize that there are two layers to that discussion. Let's take Saskatchewan as another discussion. It brings into focus a second model which I would like to discuss with you, that you mentioned earlier.

937 Here again, you have existing, as it is now, a way of presenting local news and one hour of non-news, which is the "Farmgate" and "Indigenous Circle", two half-hours.

938 Currently the four Saskatchewan stations -- CFQC, CKCK, CICC and CIPA -- offer 14.5 hours a week of news, plus the one hour of non-news. Now they will collectively offer 15.5 hours of local news and reflection.

939 This model that you referred to earlier -- I think you used it in the Halifax example -- is one which is really what you call a shared input model, I believe.

940 The first question about this model, which will be about 15.5 hours, is: How does it really stand up to the goal of presenting local programming which is of interest to the local communities of each of those stations? It is a model which you have described earlier as one that brings together regional components of all these stations and presents the same newscast to all with input from every station.

941 How does it really reflect the local needs of the communities concerned?

942 MR. LaPOINTE: I am sorry, Commissioner, did I hear you say that the four centres collectively create one newscast?

943 COMMISSIONER PENNEFATHER: Yes. I am talking about the proposal in Saskatchewan.

944 MR. LaPOINTE: My understanding is that it is two separate newscasts. There are two centres feeding each of the newscasts. They are distinct. The Regina and the Saskatoon newscasts, with Prince Albert and Yorkton providing material through them, are distinct newscasts.

945 COMMISSIONER PENNEFATHER: We will get back to that with the stations.

946 What I am interested in is the model you referred to in Halifax and in Saskatchewan as an approach, you were saying -- I think it was to assure the continuance of local programming.

947 Do we take that to mean that there is more of a regional package there rather than a local package?

948 How do you see that in your strategy?

949 MR. FECAN: I think experience is our guide here. That particular model has been in effect in ATV for a fairly long period of time. I will stand corrected, but I think for 10 or 20 years.

950 I think what we are saying is that the day is past when Sydney can have its own television station and its complete complement of journalists and studios and all of that. It makes no economic sense any more.

951 However, how can we continue to reflect Sydney back to itself?

952 I guess it was under the leadership of Fred Sheratt and the CHUM Group, where they came up with this particular model. It has worked really well.

953 I think the folks out there can probably attest to how well it works. We feel that that is an innovative solution for maintaining local service in areas of the country, in smaller towns where no one else can possibly think of providing local television service because economically it does not make sense.

954 Instead of saying we are going to shutter the place, go to rebroad, withdraw all the journalistic resource from a place like Sydney, or pick your spot, we are going to maintain the journalistic resource, and we are going to make sure that there are stories in each newscast that is possible that deal with something going on there.

955 We think that is a terrific Canadian compromise in giving service to those communities where otherwise you would be into a rebroad with nothing else.

956 That is why we are proud of what has been accomplished there. There is a different variation of it that is developing in northern Ontario, and there is yet a different variation of that kind of concept developing in Saskatchewan -- a province of a million people with seven or eight television stations. It is pretty thin pickings in terms of revenue, and yet we want to be there in those communities, to the degree that we can possibly be there.

957 COMMISSIONER PENNEFATHER: Thank you for that. I was interested in going further in this discussion, because you touched on this point this morning with Chairman Colville. I was a little concerned by the response you gave, because it would appear that this approach was largely based on -- and correct me if I am wrong -- the profitability of the stations and in fact a balance in discussing the synergies possible; balancing that profitability against what is best for the communities.

958 Really, it was more of an economic choice that was being made as opposed to a choice that meant service to the local communities.

959 Which is leading your choice in choosing this model?

960 MR. FECAN: Our objective is service, but there is an economic reality that all of us, no matter who we are and what walk of life we are in, need to balance.

961 Like you, we have to find the appropriate balance in things. Our objective is to continue providing service in cost-effective ways.

962 MS McQUEEN: Even the public broadcaster can no longer afford to deliver the same kind of local service that it used to deliver. It is, I guess, not surprising that a private broadcaster would be looking at ways that it can deliver the local service in an efficient way.

963 However, I have to say that because of the creativity of the people in the Atlantic region, if I can ever disagree with my boss, I don't think that is a compromise.

964 I think that is better than a compromise. What we see is that in every community where that news is presented, it does just as well as where it is anchored.

965 For example, I think it does better in New Brunswick than in Halifax even though it is anchored in Halifax. So you have a group of journalists there who really understand what links that community.

966 I don't know whether to call it a community, a locality or a region. But whatever it is, ATV is connecting with it, and connecting with it in a way that seems to satisfy large numbers of viewers.

967 COMMISSIONER PENNEFATHER: So that I am clear, then, we have looked at the model for 15.5 hours for the news, and we have a second model which in fact is an approach again with a 15.5-hour block but an input sharing model.

968 On the non-news side, I have a question. I think, Mr. Fecan, you said at the beginning of our conversation that the development money in the hands of the local station managers, which you discussed with Commissioner Grauer, could also support local programming.

969 Could you explain what you mean by that? Or did I misunderstand you?

970 MR. FECAN: No. I think what I mean to say -- and I apologize if I was not clear -- is that the idea that some of these station managers in some of the larger centres have amounts of money that they can work with their people using that money. I think that is a positive in terms of working with your community.

971 It may not appear on the screen, but if that gets a local documentary producer to first base on a concept development that may end up on our screen, may end up on CanWest's screen, may go nowhere at the end of the day, that is better than not having that at all. I think that is a good thing to have.

972 The Denis Watsons of the world get to have a connection with some of the writers and producers in their communities.

973 COMMISSIONER PENNEFATHER: Just a little bit more on that.

974 The TV policy does in fact include local programming -- not just regional but local programming -- as reflecting legitimate community interests.

975 It really is discussing that in terms of what could end up in peak viewing periods.

976 Am I to understand, then, that it is not going to be possible to have a program really developed for a local audience available to that local audience other than Sunday mornings, where I notice most of the non-news that currently exists is scheduled?

977 We are back a bit to the scheduling challenge, and I understand that. But I am still concerned not to see that in your overall strategy local non-news, over and above the programming which you have described within the news component, is not part of the lexicon of your thinking as far as local programming is concerned.

978 There may be some development, but there is not the space on the schedule. If there is, it is limited and it is on Sundays usually.

979 MS McQUEEN: You are absolutely correct, and we do it because we think this strategy is the best way that we can be part of our community.

980 I understand that there is a place in the policy for the kind of programming you are describing, but I guess also in the TV policy a broadcaster can decide what the vision is.

981 We want to be a strong part of the community. We believe we can be a much stronger part of the community by putting our local reflection into what we see are peak periods. The peakest periods that we have in our schedule are those local news periods.

982 If we put our local reflection, our community involvement, our coverage of the arts scene, our local issue debates, our community leaders, the victories and the losses of the community into what we consider the peak periods, that is the way CTV sees itself as being part of the community.

983 Yes, we do do some of the other small Sunday morning type programs, and they work on a certain kind of level. But we really don't see ourselves and, what is more important, don't see the community as reaching out for the kind of local non-news programming for different kinds of local non-news programming.

984 MR. FECAN: I know you are talking about non-news, but we do not hesitate to blow the schedule out when there is a community event -- and usually it is a news event. Sometimes it is a telethon -- that is not a news event -- or some other community event that is that important to the community.

985 We don't hesitate to blow the schedule out to make sure that that has a place, wherever the most appropriate time is. Usually, these things don't end up on Sunday morning. Usually they are in prime time.

986 It kind of depends on the need the community at a particular point.

987 COMMISSIONER PENNEFATHER: I have one last question then. The fifteen and a half hours a week, what would be your comment on that being a condition of licence?

988 MS McQUEEN: We would accept that as a condition of licence.

989 COMMISSIONER PENNEFATHER: Thank you.

990 Thank you, Mr. Chair.

991 THE CHAIRPERSON: Commissioner Wylie.

992 COMMISSIONER WYLIE: Ms McQueen, when you say that you don't see or hear the community reaching out or wanting non-news, local programming, you don't believe in this expressed idea often in literature that conventional television stations may be missing the boat by not being more local as the audience fragments into more appointment television on a national basis rather than a local one.

993 You don't believe that that's true, that that's one way in which conventional broadcasters can reinvent themselves into the changing landscape.

994 MS McQUEEN: Absolutely we do, Commissioner. I guess our way of expressing that intense local nature is through the fifteen and a half hours of local reflection that we call news, but we have no quarrel with that.

995 COMMISSIONER WYLIE: If there was any other -- you don't see any other demand. It has to be similar to -- it has to be information programming in your view, whether you are celebrating something happening in the community, whether it's a disaster or it's a celebration or mini-documentaries but about unplanned events.

996 You don't see the old, whatever it was, "On The Road Again" or "The Gatineau Clog" or any of that helping you to brand yourself and build a loyalty to the community. You think that that doesn't really work. I understood you to say that when you say "We don't believe there is any demand coming from the community for this type of programming".

997 I guess it disappears from the screen and who knows whether it's in demand or not? None of it is seen. No one knows what it's all about. You don't know whether it will succeed or not in getting a loyalty of the viewers in a new landscape.

998 You know, I keep thinking, because of my age, I guess, of radio was supposed to die when television was invented and it didn't. It reinvented itself and we have more and more stations and they are successful most of the time. There is no room for that for conventional television.

999 MS McQUEEN: Well, Commissioner, I guess what we have seen is that the viewers made that choice before the broadcasters did.

1000 COMMISSIONER WYLIE: Yes, but maybe it wasn't good quality. Maybe it wasn't appealing.

1001 MS McQUEEN: It probably -- I wouldn't want to denigrate the efforts of people who put their hearts into doing that kind of programming. I think the problem is a resource problem.

1002 You saw the chart that we presented at the beginning where in 1975 the big broadcasters, CBC and CTV, had 90 per cent of the viewers. That was the only opportunity for television that existed and people tended to have no alternatives. Now that there are a lot of alternatives, it seems for whatever reason they are choosing different alternatives.

1003 I guess there's another thing, and this is philosophical, that a great deal of the work that used to be done by programs like "On The Road Again" and what was the famous children's program that was here in Ottawa --

1004 COMMISSIONER WYLIE: "You Can't Do That on Television".

1005 MS McQUEEN: "You Can't Do That on Television". A great many of those have moved to specialty channels. When we look at our Comedy Network, we see ourselves all across the country at local entertainment. There was a Cafe Hibou I remember here in Ottawa that presented one kind of local standup --

1006 COMMISSIONER WYLIE: That club or something like that.

1007 MS McQUEEN: Yes.

1008 COMMISSIONER WYLIE: See, I have been around.

1009 MS McQUEEN: I don't doubt it. Most of that kind of programming now has been adopted and successfully adopted by specialty channels which presented Bravo!, not one of our stations, but has been very effective at going to local communities and presenting arts events and song events, music events. As I said, the Comedy Channel presents a number of regional comedic programs.

1010 There are the community channels which didn't exist at that time, presented by the local cable companies. They increasingly are more well funded and do more of the local programming.

1011 I think we are trying to find our place in a new kind of broadcasting system. I don't think that -- the interest in that kind of programming is still there, but I think it's being expressed in places other than the local stations.

1012 MR. FECAN: And really what Trina is pointing to is what our take is on this, what our beliefs are and what our choices are. There are others in the system that may well feel different.

1013 You know, I mean CityTV and the CHUM group has a claim to believing that the more intensely local, the better, although I would point out to you in prime time it's movies and "Friends", the "Friends" strips.

1014 I mean there's sort of a consistency of opinion emerging here, but all we can speak for is what our choices are as a group and what our beliefs are. You know, it's wide open. If another group, whether they are a system or not in your vernacular, feel that there is a great opportunity to reinvent themselves, and if they are right then they are smarter and the audience will follow them. I think that's part of what I think is, as Trina put it, the cunning of your policy.

1015 COMMISSIONER WYLIE: Well, for us regulators, when you talk about resources and well, maybe somebody else can do it, low power television or community channels, behind building these or allowing these big consolidations to take television to the next level or whatever it is you give as the reason why we should allow it, is also the ability financially to serve the public in every way possible, even when it may not be as remunerative as it could have been otherwise.

1016 Isn't that the idea of the conglomerates, to serve the public better and we stand to be convinced that the public is not better served if it doesn't have more local reflection rather than conventional TV slowly turning itself into a specialty service as well.

1017 It isn't quite as simple as saying resources are available. That's what we thought consolidation would give. It would counter this fragmentation without losing some of the broadcasting that we had before, local broadcasting.

1018 That's why presumably broadcasters are allowed to also have these appointment television services, but not to turn a conventional broadcaster into a specialty service as well by reducing over time the local which they are in a position to provide, but perhaps what we will get is eventually digital and Category 2 services of which we licence many, many that will do news.

1019 Surely there won't be enough train accidents to fill 24 hours and we will get many documentaries inside of those. You know what I mean? Listening to these conversations, there's give and take about big conglomerates wanting to do more, but not saying "Well, we can't make money with this kind of programming. Even if you think it's a good idea to do it, we won't because it's not sufficiently in demand or remunerative for us".

1020 MR. FECAN: Well, I think I just want to of course agree with you.

1021 COMMISSIONER WYLIE: Good idea.

1022 MR. FECAN: But just to add a shaving or two perhaps. It is about choices and you always have to find the balance and make choices.

1023 Through these consolidations we have been able to put more resources towards priority programming. I think that is a choice and you can see the resources being amassed there.

1024 I also want to say that fifteen and a half hours of news in large, medium and small communities is particularly news that connects as well as it does with our audiences, the ability of these stations to blow out the schedule and follow the story if it doesn't fit.

1025 If it's bigger than that, the involvement in communities, I don't really have any apologies about that because I don't see the CBC doing it. They are not in Prince Albert, they are not in Timmins, they are not even in Sudbury and they are barely in Toronto.

1026 You know, we are providing a really important service to that audience and in some cases, in Toronto we do well, in some cases in northern Ontario we might not do well, but we think it's important and nobody else is doing it. Global is doing it in some places and there are other broadcasters that as a result of the VU deal may well be station groups and come before you with such a forum that also do some of it.

1027 I think we are very proud of what these stations accomplish and the connections they have with their audiences. Sure, would you like to do more, could you do more here, could you do more there, that's always the tension in the system in terms of how do we best find the resources and where do we have the most impact and where is it most beneficial to the system and to our audiences.

1028 You know, we ultimately have to serve our people, all of us, in one form or another through different points of view. It's something we do think about a lot. It's not something we take lightly. What we presented to you is our best take on how we think we can serve those objectives best.

1029 We do debate it, we do think about it and we are very conscious of the points you make and the choices we make we don't make lightly.

1030 COMMISSIONER WYLIE: Thank you, Mr. Chairman.

1031 THE CHAIRPERSON: Thank you Vice-Chair Wylie.

1032 Just one question as a bit of a footnote on this issue. Ms McQueen, you talked about packaging the sort of non-news local programming with the news and calling it all news, the sorts of segments that all put together I presume form most of what is "Live at Five" and Halifax non-ATV.

1033 If the Commission were to have an expectation requirement, condition, whatever, that would separate out news from non-news, local, would the effect of that be to simply repackage what you are already doing as the harder news and then the non-news local?

1034 MS McQUEEN: You mean if we have just -- Commissioner, if I understand you correctly, we now have a program that we call "News" in Toronto from 12 to one o'clock. Are you saying that if you wanted us to separate it out, if we could do half an hour of something called news and then half an hour of something called Toronto Today or something like that, is that what --

1035 THE CHAIRPERSON: I'm just trying to go back to the discussion you had with Commissioner Pennefather --

1036 MS McQUEEN: Yes.

1037 THE CHAIRPERSON:  -- where you said a lot of the stuff that we do is non-news, it could be a talk show --

1038 MS McQUEEN: Right.

1039 THE CHAIRPERSON:  -- it could be what otherwise might otherwise have been characterized as a cooking show, I suppose.

1040 MS McQUEEN: Yes, there's some of that.

1041 THE CHAIRPERSON: A deep look at a peach fruitique in Bedford, Nova Scotia --

1042 MS McQUEEN: Yes.

1043 THE CHAIRPERSON: If the Commission were to separate out the non-news from the news as an expectation, would your approach to satisfying that be to simply say "Okay, well, if that's what you want, we will repackage this and now we won't call it news any more. We will just call it non-news", so the talk show and the cooking show and whatever else would end up just being not characterized as news any more. I'm not --

1044 MS McQUEEN: Well, we could do that.

1045 THE CHAIRPERSON:  -- trying to be devious.

1046 MS McQUEEN: That's a really good idea. We could do that. Would we do that? I don't know. I guess what we would hope is that you wouldn't turn your back on what seems to us to be a successful format of serving the community which the community demonstrates that it enjoys and supports.

1047 What we would do if you put an expectation on us is we would try honestly to meet that expectation.

1048 THE CHAIRPERSON: Okay. Thank you.

1049 We will take our afternoon break and reconvene in 20 minutes.

--- Upon recessing at 1555 / Suspension à 1555

--- Upon resuming at 1618 / Reprise à 1618

1050 THE CHAIRPERSON: I understand, Ms McQueen, you would like to clarify a statement you made this morning?

1051 MS McQUEEN: Yes. I had a conversation with a reporter after the break which made me wonder if I had been completely clear in what we said about our concern about the 12 minute advertising rule. During that we talked about, we thought, how our opposition was based in the notion it would benefit whoever the dominant player was at the time. We did not mean to give the impression that Global Television was always the dominant player in the top 20 programs. That does shift back and forth.

1052 We were a little stronger in the fall. They are a little stronger in the winter period. So I wondered if I had made that clear, that we were concerned not that it would be just to the advantage of Global, but whoever happened to be dominant with those top 20 programs would have the advantage. Thank you for allowing me to say that.

1053 THE CHAIRPERSON: No problem. Maybe we should let some of the media experts ask some of the questions.

1054 I will turn the questioning now to Commissioner Cardozo.

1055 COMMISSIONER CARDOZO: Thank you, Mr. Chair. Good afternoon.

1056 I will go through some questions, a number of questions on cultural diversity now and later on in the afternoon I will come back and do a couple of other areas. It's a long afternoon as you can tell.

1057 Let me just introduce the subject for the purpose of our discussion today by placing it in context. Indeed, the issue of cultural diversity on television I think one can say flows from the reality of the country, perhaps back to the beginning of time with aboriginal people and more recently the larger degree of immigration over the past half century. The Broadcasting Act requires us to look at how the system reflects diversity.

1058 In our TV policy hearings a couple of years ago we heard a lot about it and indeed our new policy refers to the need for diversity on television and asked conventional broadcasters to set forward specific initiatives.

1059 There is also the report of the Royal Commission on Aboriginal Peoples which talked about the need for the media to reflect aboriginal people. So those are sort of the social, cultural, national objectives, but I would suggest it goes beyond that and certainly beyond what some might say is a politically correct thing to do. It is also a business strategy. Some broadcasters have embraced reflecting diversity more than others, but you will also be familiar that in the United States it has become quite a hot topic. In the fall of 1999 your counterparts, the major networks in the United States, put forward the new fall schedule of 27 programs which had no minorities in leading roles.

1060 There was quite a backlash and the networks ended up over the following months signing agreements with a number of community groups, such as the NAACP, on what they were going to do, making very specific initiatives on how they would change programming to reflect American society, include people in their hiring practices, include stories of diversity. Over the past months you might have seen quite a bit of discussion in the American media about the changing demographics of the United States. Through the month of March the census figures came out, which really talked about the incredible growth of diversity in the United States and also the fact that immigration was the reason for the rejuvenation of a lot of American cities.

1061 I say all of that about the American case to make the point that for those of you who are interested in selling your wares and your programs in the United States, having programming that reflects diversity will probably help your export ability.

1062 What I would like to do over the course of this discussion is review what you have done so far and where we go from here, both your own corporation, but also what you think we should be doing as a commission.

1063 Our TV policy endorsed the idea of a task force made up of industry and community people interested in these issues, who would help to define the issues, conduct research, identify best practices. The issues that were put to us were in the area of raising awareness and in understanding of the needs and challenges, the perspectives, the opportunities, and looking at diversity in programming, including racial minorities in drama, such as you have done in a program like "The Associates," stories about minority experiences and documentaries, for example.

1064 What I want to do now is put some more meat on the bones of our 1999 policy. This is our first opportunity to be implementing it since the policy came out. We were, I should say, expecting a little more from both applicants in terms of the specific initiatives that you have been laying out. So this is certainly an opportunity for us to discuss how this aspect of our TV policy would work.

1065 I will go through the discussion in three segments. I will first talk about a corporate strategy; second to talk about inputs which would be training in human resources and community involvement or the input into the corporation, and then, third, the outputs which are the entertaining and news and public affairs stuff that you actually see on the screen at the end of the day.

1066 Perhaps you can talk about what you plan to do over the course of a seven year licence term if that's the route you were to go.

1067 Let me start by asking you an open question, how you would describe the CTV approach to cultural diversity?

1068 MS McQUEEN: I don't think we could say much more than you have said because a lot of your statements reflect what we think. One of the key elements for us at this hearing is talking about the Canadian audiences and building the Canadian audience. People like to watch programs that resonate particularly with them. They like to see people that they relate to and intrigue them. And because of our desire to grow the audience we have to do that kind of program, which leads us in a natural way to making sure that those programs are diverse and are reflective of Canadians society.

1069 Similar to the conversation we had with Commissioner Grauer, people really do gravitate toward programs to which they can feel a personal connection. I think that is why the advantage of diversity, as you said, is a good business strategy, not just to export our programs, but to make them attractive to Canadian audiences.

1070 So we accept that this is not just a good social goal, although that's very important and we don't deny that broadcasters should be responsible for good social goals, but also it fits into the key thing that we want to do and that we think Canadian television needs, which is a better connection with more Canadians.

1071 COMMISSIONER CARDOZO: Have you got an action plan that would take you from where you have gone to where you want to go over the next licence term? What I picked up is various things through the documentation, both in terms of your overall application and the individual stations. But could one say that you have an overall written strategy or something that you could share with us that gives you a sense of the different aspects of it, everything from programming to training to mentorship?

1072 MS McQUEEN: No, we don't have something succinct on a couple of pieces of paper like this as you suggested. But what we do have is initiatives in each of our areas and we could go through some of them. Some of them reflect hiring practices. Some of them reflect on-air reflection. Some of them are about alliances that we have made with groups in this area. Some of them have to do with training and there are initiatives in each of those areas.

1073 COMMISSIONER CARDOZO: You could either talk about them now or I will be coming to some of those areas and perhaps you can talk about them as we go through. Then when we get to the end if I haven't covered any areas we can then. But I am glad to say that I reflect your thoughts because I like to think that we learn well. If we learn well from the masters then we are doing well.

1074 One of the things we talked about was an industry community task force in our policy. This hasn't really happened. There is a rather short statement or guidelines that has been put forward by the CAB. I don't know if you have been part of that, but would you see yourselves having a task force that would address the issues, identify the issues, raise an understanding of these issues and develop a better understanding of best practices in a variety of the areas? It is still an issue that's of interest to the Commission. I wonder if you could tell us whether you would be prepared to participate in such a task force, perhaps help the participation of community groups, the non-industry groups, but certainly you will be participating in it yourself?

1075 MS McQUEEN: Yes, we would. Could I -- there are two people think who could make a further comment on that, our vice-president of human resources, Dawn Fell, and also Mr. Alain Gourd, our corporate executive vice-president. So I would ask both of them to fill you in.

1076 MS FELL: Thank you, Commissioner. We have indeed been involved in the development of the guidelines that the CAB has put out now on cultural diversity guidelines. We are involved in that task force and had a hand in the writing of the guidelines. Today there hasn't been a task force set up formally in terms of including producers and others from the industry, but if the industry felt that such a task force would be helpful and if the Commission found that such a task force would be helpful we would certainly be happy to participate in it.

1077 MR. GOURD: Thank you.

1078 Commissioner Cardozo, as we speak we are indeed discussing with representatives of the various multicultural groups in particularly one specific institute. Since we have not yet reached a full agreement, I could simply indicate to you the avenues we are pursuing and hopefully rather assume we would be able to be more detailed.

1079 But in terms of the first phases of what could be our journey in that area of diversity, we would focus on priority setting meetings across the land with the various persons interested in diversity, including representatives of the various groups.

1080 Once the broad priorities would have been established in common with these representatives relative to what should be on the screen, what should be adjusted on the screen, we would have phase 2, which could be round table on the specific ways to address these objectives.

1081 Then, thirdly, there could be a focus on professional development for programmers that could contribute to greater diversity on the screen.

1082 Professional development in a similar fashion pertaining to the news department.

1083 As a No. 5, we could have a study of best practices. While we are doing all that we would collect data and we would develop a diversity databank. Hopefully we will be able to achieve progress over the coming weeks and be able to present a more comprehensive plan in that regard.

1084 MS McQUEEN: Commissioner, we would say that there is a major regular meeting scheduled at the CAB, I believe May 3rd or 4th or 9th or 10th. We would commit to you now that as we complete our negotiations that we will on the agenda of the CAB meeting the kind of task force that you are suggesting and that CTV will lead the way in making that that's established.

1085 COMMISSIONER CARDOZO: Thank you. We have received the guidelines from the CAB and they sort of came to our attention when sort of put to us in the context of our TV policy. So we haven't really, as a Commission, passed judgment on them, but I would suggest that they strike me as -- perhaps I can put it this way -- a good starting point, as opposed to guidelines that would really achieve very much.

1086 There is one of the other members of the CAB who has gone a little bit further and has developed a more detailed set of guidelines in those areas. I think that is more along the lines that we have been talking about.

1087 Certainly I appreciate the spirit of what you are saying. It is not our intention to sort of push people beyond where they go or want to go, but my sense is that broadcasters -- we certainly found this at the hearing two years ago, we are very open to movement in this area. Perhaps I'm a tad disappointed that a whole lot has not happened in the course of the two years, but they say there is nothing like a hearing to focus the mind and force agreement and all sorts of things.

1088 Could you give us a bit of an update on the outcome of some of the benefits packages that have addressed these issues?

1089 As I recall, in the CTV NetStar deal I believe you set aside $1 million for APTN, or some figure, and $700,000 for what you call diversity initiatives, and from BCE/CTV there were various initiatives for diversity and news -- APTN aboriginal production at Capilano College. Are all of these under way?

1090 I recognize that you are not expected to be reporting on this at this point, but if you could give us a sense, in the context of this discussion --

1091 MS McQUEEN: First of all, Commissioner, on the NetStar $700,000 benefit, as you will recall, this was $100,000 to each of seven organizations who came to us with a plan for including a diversity initiative in their regular operations. So far we have heard from Canadian Women in Communications, which has put forward a plan to us; the Ryerson Writers Workshop, which has put forward a plan; the Banff Television Foundation, which also has put forward a diversity plan; and -- I'm sorry -- one other organization which came forward with a plan, and I will try to remember that while I am talking.

1092 So far there are three organizations that, mysteriously to us, have not responded to that offer, and our intention, if we don't hear from them within the next couple of months, is to suggest to the Commission a diversity initiative that would replace that and make sure that the $300,000 is used up.

1093 But we did send letters, six months ago, to all of those organizations, asking for a plan, and we want to make sure that that $300,000 is used, so we will be coming to you, probably within the next month, to suggest that those benefits be transferred to another diversity initiative.

1094 The APTN -- I would ask Kirk to report on the progress of that.

1095 MR. LaPOINTE: Commissioner Cardozo, the APTN Alliance, which CTV News has put initially under the NetStar benefits package, is very much on track. We also expect that over the coming number of months APTN will be able to expand its (inaudible) structure or its reporting structure.

1096 We have made it a mission at CTV News to also work much more strategically with APTN by trying to share even greater resources, and to work on issues of training and mentorship between the two respective organizations to make sure that APTN is successfully maturing as a news organization in the country. We think that it can make a highly valuable contribution to the broadcasting system.

1097 So we expect that we will start to see even more fruits of our labour there.

1098 MS McQUEEN: I would also ask Kirk to update you on the specific diversity initiative in the BCE benefits package.

1099 We have hired a company, and they did try to intervene to come here and talk specifically about their plans, but their letter was delayed, unfortunately, so they are not here. But, Kirk, if you could --

1100 COMMISSIONER CARDOZO: Before you do that, could I ask you to also talk a bit more about the initiative in terms of APTN?

1101 I have a question on that for you later on, but if you could give us a bit more information as to what it is you will be doing.

1102 I think I recall a reference to sharing news stories.

1103 MR. LaPOINTE: Yes. In some cases it is a matter of sharing news stories and working with APTN, so that it can help actually supply us, particularly on Newsnet, with news stories every day, and our local stations for their noon, six and 11:30 newscasts.

1104 We also hope that eventually we can work side by side to help arrange stories that would be provided to our 11:00 p.m. flagship newscast with Lloyd Robertson.

1105 In sum, though, the initiative as we are going forward will involve the expansion of APTN, I think, with an additional five or six bureaus, and that will mean a wider reporting and photographic force that is out in the country, with some funds for travel.

1106 We are also looking right now at sharing some costs off to the side of these benefits with APTN to try to station a reporter in the north.

1107 COMMISSIONER CARDOZO: Was there anything more that you wanted to add about the other --

1108 MR. LaPOINTE: Yes, I want to back up just a bit to say that we have spent some time in recent months, since being furnished with the BCE benefit -- which, as you know, has funds allocated for diversity training and for further activities around cultural diversity to permit our programming, for instance, to go to places of interest and of relevance to Canadians around the world. So we are looking forward to utilizing those funds in the years ahead.

1109 But more specifically and concretely, in the months ahead we will have a program that will roll out in our major centres to start, and then eventually our medium and smaller size centres within our news organization will, I think, once and for all, get some traction on this issue.

1110 As you know, I have worked in a lot of newsrooms over the last 20 years and I think that we have each had experiences that have been highly frustrating around this central issue, which is, how do we, in our representation in our newsrooms and in the way that we portray our country, fit within the CRTC's television policy, which suggests that Canadians should see themselves in the mirror in the system?

1111 We do believe that we have made great progress around issues of portrayal and story selection, and I think those are at the absolute front end of a lot of our initiatives, but we believe that the other parts of the initiatives have been slow in coming.

1112 I have been in other places where people have shrugged and thrown up their hands and said: It will take us 20 years to try to undo all of this and to try to get ourselves correctly on track.

1113 I think we have a plan, and I think the plan will take us several years, but it will effect some very quick and decisive measures that will include such things as the basic raising of awareness with each of our managers; recruitment processes that will widen the net and make newsrooms more inviting places for people who have to date not found them all that inviting -- have found them, in fact, a little intimidating.

1114 We think that we can broaden that. We can end up producing programming that will represent a greater reflection of modern Canada.

1115 Beyond that, though, we are going to be into a system of trying to widen not just our story selection, but the way in which we use sources and the way that we portray authority in this country, to make sure that, again, our database, our contact list, the community resources that we employ are broader. And we think that the company that will help us with this, Promedia, which is based in southern Ontario, will be able to raise our game considerably, as journalists first and foremost. Because we see this as fundamental to our journalism, and nothing else except that. There just is very good journalism to do this.

1116 COMMISSIONER CARDOZO: I am struck by a couple of things. One is the answer that you provided, and that Mr. Gourd provided, which certainly speaks to a lot of the things we were looking for in a plan. So had you provided this ahead of time, it would have saved quite a bit of time today. But I do appreciate what you have said.

1117 I am also struck, Mr. LaPointe, by your easy entry into the regulated world of television; your willingness to work with the regulator, having come from the free world of the newspaper. It is heartening. I guess this is how convergence can work.

1118 We will get you all, one by one.

--- Laughter / Rires

1119 COMMISSIONER CARDOZO: That was just a joke, by the way.

1120 Can I ask you about the CTV day-to-day initiatives and expenditures? Part of what Mr. LaPointe and Mr. Gourd have talked about, I gather, was more around the benefits, and I am wondering, do you go beyond those. Although, I think I do recognize the point you mentioned in terms of the aboriginal issues. You talked a bit about aside of the benefits.

1121 The point has been made quite often in the interventions, especially around programming, that there is all this stuff that you are doing because of the benefits that flow from the transactions, and this hearing is not about that, it is about your day-to-day stuff and your other profitability, and what you do for the system beyond the benefits.

1122 Your commitments in this area, do they go beyond the benefits packages?

1123 MS McQUEEN: Yes, they do.

1124 One thing, Commissioner, I hope, is that when we come back on Friday for the station group hearing you might ask the station managers that question specifically, because so much of our operation is at the local station level. I think they have some good stories that they would like to tell you, some stories that are tough stories, too, but I hope they will be able to add to this and that you will consider this answer incomplete until we have them at the table.

1125 We do have our national programmers at the table today and our vice-president of human resources. So if I could start with Dawn Fell, to give you an idea of what is a very important part of the day-to-day practices, which is the hiring and training situation, then I would ask Susanne and her team, and Kirk, to talk a bit about the day-to-day practices at CTV.

1126 MS FELL: Thank you. We do a lot on a day-to-day basis that doesn't have any relationship to the benefits. In fact, I am not sure that I got any of the benefit money, but we can review that later.

1127 At a corporate strategy level, as Trina said, a lot of the initiatives are grounded very much in the local stations, but we see our role at the corporate level to review the activities in the stations to ensure that they are complying with the spirit of the Employment Equity Act and with their own established guidelines. And also it is very important to share best practices.

1128 So we have a fairly regular forum with all of the HR staff in all of the stations where we share best practices in all areas of human resources, policies and procedures.

1129 We really see our role as being quite diverse in terms of responsibility in the diversity area.

1130 One of the things that we really focus on is trying to grow a pool of talent. That is a talent pool that we are trying to grow not just for ourselves, but also for the industry.

1131 So we focus a lot of energy and attention on working with community colleges, broadcast schools and journalism schools, to make sure that the curriculum they are developing will be a good fit with what we are going to need in the future, and also to ensure that we give opportunities to young journalism and technical students to get work experience that will then help them get the first job. Because we have found in talking to a lot of community outreach organizations that the biggest barrier is getting in; that getting a foot in the door is the most difficult thing to do. So we spend a lot of time on the employment side, trying to ensure that students and others trying to get into the industry have an opportunity to get some experience, which helps them get that first job, which may be with us or may be with someone else.

1132 We also spend a lot of time and effort trying to make sure that our recruitment opportunities and the employment opportunities within the larger CTV group of stations are accessible. We have done a number of things.

1133 We now put all of our job opportunities on the web. We also have a 1-800 job line, because we found in talking to organizations that not everybody has access to the Internet and has those resources, and the 1-800 number is very heavily used in terms of job opportunities. That one number will advertise jobs across the entire system. That certainly has been helpful.

1134 We have also established liaisons with a number of local community organizations across the country, and we will share job postings with them, as well, to make sure that our job vacancies and postings get the widest audience possible.

1135 In terms of everyday systems, we are also spending some effort now in doing another review of our employment systems. The aim of that is to try to identify any barriers to employment and then remove those barriers. This is what we are doing to try to ensure that we create and maintain an employment environment that is conducive to excellence.

1136 There is a lot rolled up into that, one of which is making sure that we reward and promote and recognize excellence and that paying promotion is based on merit, not seniority or time in job; and that work assignments are based on merit.

1137 Also, we will try to foster a talent system within our group of stations, where there are opportunities for staff to transfer and be promoted from one station to another, particularly with the news and on-air staff.

1138 COMMISSIONER CARDOZO: At some level are you looking at the overall picture beyond people entering the corporation? You are looking at where they end up being placed: on-air, off-air, various levels of management?

1139 MS FELL: Yes.

1140 COMMISSIONER CARDOZO: Susanne Boyce, did you want to add something?

1141 Your boss said you would, so I just want to make sure you have the opportunity.

1142 MS BOYCE: I think the key is belief and then action and follow-up. Follow-up is critical.

1143 For example, in Vancouver when we were opening the station, we started weekly -- we called them breakfast salons, in which diverse members of the Vancouver community particularly were invited to meet with usually four staff members from different parts of the organization. They told us about not just their community but what they were not seeing on television, what upset them, et cetera.

1144 That was an extraordinarily useful and helpful exercise, because we created it as a round table and everyone spoke. It was not a matter of just passively listening, or there were arguments. You would see the most interesting group of people coming to the station.

1145 Out of that we hired staff. That was not the intent. We also created programs.

1146 One show, "First Story", in its first year in its conception -- five or six of the staff members were of aboriginal background, and each of those five came from a different First Nation. So it is not just to embrace, but it is to understand and celebrate diversity differences. I believe that within that, there is diversity again.

1147 It is not this sort of nice thing of saying whoops, got one, and then moving on. You have to be active about it. You have to be annoying about it. It is very important -- and I think we have stated that before -- that it is not just about what is seen. But it is what is behind the face, behind the activity.

1148 Instead of my going on, we have several examples.

1149 Ed, if you would start and then just quickly go around, that would help.

1150 MR. ROBINSON: Thanks, Susanne.

1151 With respect to diversity -- and I think this conversation actually crosses over to some of Commissioner Grauer's earlier questions about regional -- it is about an attitude. It is about a consciousness, a belief system that this is part of what we do. And if we are going to talk to all areas of this country, we have to reflect all of the areas of this country.

1152 The specifics I hope will help explain how we have done that.

1153 With respect to "Comedy Now", which is our stand-up comedy showcase, we have had probably somewhere around 65 stand-up comics to date. They have come from all regions of the country, and they have come from different ethnic backgrounds.

1154 We have had small town northern Ontario and small town Saskatchewan tell about the experience of growing up in those communities and moving to larger cities and what that means.

1155 We have a young comic, who in my opinion is destined for stardom, named Shawn Majumder, who was born in St. John's, Newfoundland. His mother is originally from Newfoundland, and his father is East Indian. He speaks about that ethnic combination, plus growing up in St. John's. He has a lot to talk about, and a lot of it is quite funny.

1156 We have a comic originally from Nicaragua who emigrated to Montreal, named Martha Cheves(ph), who is bilingual in Montreal but originally from a foreign country, trying to make her way through life as a stand-up comic. She has a lot of stories to tell as well.

1157 It is a conscious thing that we look for.

1158 "Open Mike" with Mike Bullard has been an amazing platform in all kinds of ways. Established Canadian performers and up-and-coming Canadian performers have a showcase in which they are welcome to promote their latest movie, TV show, CD, book. Again from coast to coast we welcome those contributions, from whatever broadcaster may be carrying their show, from whatever record label may be supporting their efforts.

1159 Particularly in the music component of the show, it has been hugely connecting with audiences.

1160 We celebrated the 500th episode of "Open Mike" around the end of February. So we have done probably 525 shows by now, with at least 1,700 guests, most of which are Canadian; about a third of those have been musical acts from all kinds of musical disciplines.

1161 It is an open door welcome opportunity for Canadian artists to be seen by the nation. It is a belief system that we have established and will continue. For us, it is a very proud example of how we have welcomed people from regions and from different diverse backgrounds.

1162 I am going to pass to Bob, who can talk about documentaries.

1163 MR. CULBERT: In documentaries, the way we reflect diversity is in the stories we choose, in the stories we tell. We have a record in that regard that we are very proud of.

1164 Since 1978 in the past three television seasons we have broadcast 14 hours of documentaries that deal directly with cultural issues. Particularly we are very proud of the fact that three of those programs have won Gemini Awards, including two of the prestigious Canada Awards.

1165 Looking forward, we have seven hours of programs that are either about to be broadcast or are in production currently that also deal with cultural diversity issues.

1166 If time permits, I would like to tell you about those seven stories because they just don't touch on cultural diversity but diversity is the very heart of the kinds of joys and struggles of the people involved in those stories.

1167 Perhaps I could race through them for you.

1168 COMMISSIONER CARDOZO: I would love to hear all about them. Maybe you could race through two or three.

1169 MR. CULBERT: Maybe four, okay.

1170 One has already been mentioned, but it is one that is going to be broadcast very soon, and that is "The Island of Shadows", the leper colony documentary that you saw in our tape. It is a beautiful story, and we are very proud of that and would encourage everyone to see it.

1171 We have a story called "Soldier Boys", which is a story of a young Canadian woman who actually came to Canada having escaped from Africa where she was recruited to be a child soldier. We went back with her to her homeland, where she was sort of rehabilitated with her family. I think she had been in this country for 14 years, and we went back with her for a very powerful documentary.

1172 We have "Made in China", which is a story about the challenge facing Canadian families who are raising children adopted in China.

1173 I will do one more. We have "Say I Do", which is a very troubling story about mail order brides who were brought to this country.

1174 All of them, as you see, are very much about -- that is the central theme of each documentary. As I say, it is something we are very proud of.

1175 MS BOYCE: One?

1176 COMMISSIONER CARDOZO: Sure.

1177 MS BOYCE: Thanks.

1178 COMMISSIONER CARDOZO: She drives a hard bargain.

--- Laughter / Rires

1179 MR. MUSTOS: So as not to leave out drama, I want to lead in by saying this attitude of inclusiveness completely starts with Susanne Boyce. She has an attitude in the programming department that infects all of us.

1180 In the dramatic programming area it has led to stories like the half-hour drama that was done through Louise's office out of Vancouver, called "Smudge", which was based on a Downs Syndrome girl and her love for a little puppy by the name of Smudge. This project went on to win the Humanitas Award.

1181 We have tackled big movies like "Dr. Lucille". "Dr. Lucille", if you didn't have a chance to see it already, was about Dr. Lucille Teasdale, who was a Quebec doctor who dedicated her life to the sick and dying in Uganda. That movie was an incredibly powerful movie that won many, many Gemini awards. It was an opportunity for us to take a Quebec heroine and bring her to the rest of Canada.

1182 We have ordered two movies this year that we hope will be going into production this summer. One is called "Sleep Murder". It is a movie about a kind of collision between white man's justice and Inuit justice in a compelling, high stakes courtroom drama set in Nunavut.

1183 Another movie that we have ordered is called "Tagged", which deals with racism within teen gangs. It deals with teen violence, and it deals with the Young Offenders Act as it pertains specifically to the horrific beating and miraculous recovery of Jonathan Wambach.

1184 Those are a few examples of what we have been doing on the drama side.

1185 COMMISSIONER CARDOZO: Thanks for that information. They actually do cover some of the questions that I had later on. So we will not be behind time -- although I must tell you that every time you anticipate a question and answer it before I ask it, I lose points with my colleagues. We are sort of keeping score as to how many people have questions you did not anticipate, and so far I am not doing so well.

1186 So I would just remind you some time during the course of the next few minutes to say: "That's a good question. We didn't anticipate it."

--- Laughter / Rires

1187 COMMISSIONER CARDOZO: I have two more questions on human resources, since we have covered most of those issues.

1188 Ms Fell, could you give us a sense of where your numbers are in terms of employment equity. I recognize we don't monitor your employment equity, but for the purpose of this issue I would like a sense of how you are doing in terms of visible minorities and aboriginal peoples.

1189 MS FELL: Thank you, Commissioner.

1190 We do monitor the number station by station rather than aggregating the results. That was a conscious decision that we made a number of years ago, probably three or four years ago now, when we acquired some station groups that did actually aggregate the numbers. We found it very difficult then to tell how they were doing vis-à-vis their own local community.

1191 So we have disaggregated the results and now track them all station by station.

1192 The numbers are definitely improving. If you look at the total on-air employees aggregated for the stations for the entire country, 44.5 per cent of the total on-air workforce are female against 46.4 per cent of the Canadian workforce population.

1193 We are 2.4 per cent aboriginal against 2.1 per cent of the Canadian workforce. So we are doing not badly in that category.

1194 In terms of visible minorities, we are 9.5 per cent of the on-air staff against 10.3 per cent of the Canadian workforce population.

1195 As was noted in one of the interventions, in many areas we are approaching the Canadian workforce. In terms of persons with disability, 3.3 per cent of our on-air staff are persons with disability against 6.5 of the population.

1196 The numbers will vary a little bit station by station but are not dramatically inconsistent in any one station.

1197 COMMISSIONER CARDOZO: Thanks for that.

1198 The only other question I have -- and perhaps this is for you, Mr. Fecan -- is about where diversity at the senior management at CTV goes.

1199 You noted, with a lot of enthusiasm, that this is the best team in television anywhere, and I don't quibble with that -- although the people tomorrow may have a different view, and a couple of other networks might.

1200 It is certainly a darned good team, for which I have a lot of respect.

1201 With respect, you don't reflect among the 23 of you the diversity of your audience. Do you see that changing in the course of the next licence term?

1202 MR. FECAN: I hope so. I think there has been a pretty radical change on the diversity category, not as you are expressing it but in terms of women in management over the last seven years. That was a conscious effort on our part.

1203 I would hope over the next seven years, or whatever years it ends up being, you will see an equally conscious effort that will bear fruit with the kind of diversity that you are speaking of.

1204 It is like a lot of things we are talking about today. It is something we believe is right, for the social and broadcast and cultural reasons. It is something that we don't bring out every few years for a year, but it is something that we try to put into practice.

1205 The first way we try to put it into practice is on the air, because in a sense that is the most urgent: to have the mirror that we hold up be truer and truer to the communities and to Canada.

1206 I think, you know, we are probably trying to focus there first because I do believe that's the most urgent. As we develop more executives from various backgrounds that you speak of, it is an absolute priority of mine to broaden the team out and do the same thing.

1207 Over the next seven years, in the diversity you speak of, that we have accomplished over the last seven -- you know, seven years ago, if you had seen -- some of you would remember the licence hearings for various of our station groups. Without being pejorative, I guess I can say it because I am one, there was a lot of old white guys there.

1208 You know, we are a different group today and we are going to be a different -- we are going to continue to evolve and we are going to be a different group in a few years from now, hopefully as good or better group by virtue of having access to different experiences that some of us may currently have through the writers and producers that we are in contact with, but not necessarily on the executive team at the moment. So it's something we intend to live by.

1209 COMMISSIONER CARDOZO: And do you see this happening with your board as well?

1210 MR. FECAN: Well, I have to tell you that I am -- I have to duck that one a bit I suppose because the board really is the purview of the shareholders. It is not something that I feel qualified to speak on.

1211 I know it is a very strong interest of BCE to better reflect the country, but I really feel that -- and I think they are doing a good job and I think there's progress there, but I really feel that that is something that I have to leave for shareholders to discuss. I am not comfortable as a manager talking about, you know, what our shareholders choose to do in terms of representatives.

1212 In the areas that we directly control, it is certainly something that we put into practice and intend to do better on. I think that's probably true for BCE as well and the Thompsons, but I really feel that that's something that is theirs to address.

1213 COMMISSIONER CARDOZO: Although I would note that gender-wise and region-wise, it's not very diverse unless a whole bunch of people happen to have mailing addresses in Toronto and they tended to come from the Toronto area for the most part and are men for the most part, so to those who make those decisions, maybe you can transfer that sentiment.

1214 Let me ask a couple of questions about community involvement. In response to a deficiency, you noted in Vancouver and Regina there would be an ongoing relationships with community groups -- I believe the community council in one case, the community relations director in another. Are these mechanisms you have a lot of across the country and do they deal with diversity as well?

1215 MS McQUEEN: Again --

1216 COMMISSIONER CARDOZO: And have you looked at having a similar sourcing at a national level?

1217 MS McQUEEN: Again, I think it would be -- if that were a Friday question, it could be good because it varies from station to station. On the national level, we do speak to a number of groups regularly. There is no formal alliance with any single group.

1218 COMMISSIONER CARDOZO: Do you have an ongoing way of getting feedback on your programming? You know, you have talked about a number of the programs that you have got, the people you have got on there and, you know, they are good, they are high quality, one can feel good about them.

1219 What's your sense of -- do you have a mechanism of getting feedback from the public beyond the people who call or happen to write in?

1220 MS McQUEEN: Well, two things. First of all, our major mechanism is ratings which certainly can break down geographically and give us some indication as we said, that when we do a program that's resonant to a region, it will increase the audiences in that region, but of course they don't break down the ethnicity of the group, so in that kind of overall macro look at the audiences, that is not available.

1221 Kirk.

1222 MR. LaPOINTE: I think, having worked again in a lot of newsrooms, one of the quickest ways to find out if you are on the right track or the wrong track is to get a gauge of what the phone calls are like first thing in the morning and whether you have in fact hit the mark correctly with your story selection and your portrayal or whether you are off base.

1223 I can report back with great confidence that our newsrooms hear highly positive things about the tracks they are on right now in terms of demonstrable progress around portrayal.

1224 Of course we have, as we alluded to earlier, so many of our on-air people involved in the community night after night after night. Max Keeping in this area goes to about 200 events a year. Ken Shaw, our new anchor in Toronto, is going to try to outdo him, but he is only at around 115 or 120.

1225 They are tremendous sounding boards because when something is a little askew, they are in all part of the communities at all sorts of events with a rich diversity of appearances. They will hear it. It's a very quick sounding board.

1226 Then e-mail, an awful lot of things are very quick to tell us we are doing the right thing or the wrong thing.

1227 MS McQUEEN: We do use our websites regularly to solicit feedback on various programs and issues that have been presented.

1228 MR. FECAN: And, you know, it's easy to say that we encourage and really select our people in the community to make sure that they are part of the community, but it's not just -- I mean some of the numbers that Kirk just gave you, it's not just, you know, going to a telephone once a year or sitting on a hospital board.

1229 When you think about it, it's mind-boggling, 200 community events. I don't think that's an exaggeration for Max or whatever the number is Ken Shaw is currently doing and he will try and best Max.

1230 Those are the kinds of contacts where I think you maybe hear more truth than you might hear in a more formal setting. I mean people that really like something you do or really hate something you do tend to write or phone or e-mail, but when you really hear day to day from people that you have long term relationships with from all walks of life about how you are doing and when some of that is not on the big headlines, that you may have done great or poorly and people are motivated to write or phone, but when it's the little nudges, I don't think you can underestimate the value of that kind of thing. We certainly don't. That's why we push very, very hard to have people do that. We reward people for doing that because we think we hear a lot better that way than probably any other way.

1231 As I say, it's easy to say. You know, you sit on a hospital board or you go to a telethon and maybe that's it, no, that's not it. Two hundred is the mark to beat. I'm not saying that a hundred is not worthy. It's still pretty worthy.

1232 We really take that kind of thing seriously and we encourage and reward it. It's important to us. I think we hear from those gentle nudges maybe a little clearer than we hear from the times that we either really hit the home run or really transgress on something.

1233 COMMISSIONER CARDOZO: I can certainly vouch for that with regard to Max. I am sure there are days that I have seen him twice in one day. I live in this community. I'm not sure whether it's him following me or me following him some days.

1234 One other question on community. Have you done a demographic review of markets where you look at the composition of markets and look at the needs assessment?

1235 MS McQUEEN: Yes, we have.

1236 COMMISSIONER CARDOZO: And would that involve cultural ethnic aspects as well?

1237 MS McQUEEN: Our station managers regularly survey the data for their communities so they understand who is there.

1238 COMMISSIONER CARDOZO: A couple of questions on the outputs now with regard to portrayal and reflection. Susanne Boyce and Bill Mustos, you talked about some of the entertainment programming. I wonder if you can tell us -- one of the quotes from a fellow on your videos the moment they said they are hands-on engaged in a creative process.

1239 To what degree are you able to talk to your producers as they are developing their product about cultural issues, either where you feel there is a reasoned issue, be it something reflected or you feel there is some unnecessary stereotyping or offensive content or something? Do you have the ability to get stuff in or out when you are working with your producers?

1240 MR. MUSTOS: Absolutely. We are involved from the very first stage of any script idea, whether it's an episode or a movie or a half hour one off and we do exactly that every day in our jobs.

1241 We are also involved in suggesting casting ideas. We will go to colour-blind casting suggestions because that's what we do. I wrote a letter six months ago to a whole host of our producers encouraging them to use Susan Charness' talent agency, which is an agency that specializes with actors with disabilities just to have them aware of that agency and think about integrating some of those actors into roles that aren't necessarily written to be for characters with disabilities. It's absolutely what we do every day.

1242 COMMISSIONER CARDOZO: And what's your success on that particular perspective in terms of integrating actors with disabilities?

1243 MR. MUSTOS: We have had some success, limited success with "The Associates". We have made some positive movements there, but you know, we are about to enter a new production season. We are in pre-production now on our slate for next year and we will be starting that process all over again in the next few weeks. I hope that we will have more success with the upcoming year.

1244 COMMISSIONER CARDOZO: Can I just ask you this. It's somewhat stepping off the subject of diversity, but in terms of websites, recently I visited the websites of "The Associates" and one of their other programs, I think "Cold Squad". They weren't very interesting or --

--- Laughter / Rires

1245 COMMISSIONER CARDOZO:  -- or long or informative. My sense of it is that really broadcasters are talking a lot about interactive websites. You watch the show and you go to the website and talk to the characters. Was I looking at the wrong website or --

1246 MR. MUSTOS: I can tell you that we didn't anticipate this question.

--- Laughter / Rires

1247 COMMISSIONER CARDOZO: I hope my colleagues noticed that.

1248 MR. MUSTOS: I could now, I think.

1249 Some of our websites are better than others. I would suggest you check out "Lucky Girl". I think it's a more recent reflection of the standard that we are now setting for our websites that might not yet be reflected in the websites for "The Associates" and "Cold Squad".

1250 MR. FECAN: But I also hasten to point out that those particular websites that you named, we helped with them but they are the websites of the producers, Alliance Atlantis. You know, we work cooperatively with them, but they are not entirely within our control. We have influence, of course.

1251 I mean some producers are more interested in that. I think you saw from Linda Skyler that she's intensely interested in providing a full kind of scope of experience and others see it more just as a promotional vehicle without some of the richness that we would like to see on those sites.

1252 COMMISSIONER CARDOZO: Or even as a promotional vehicle. As you know, we don't regulate the Internet, as we say, but as a promotional vehicle, it was kind of a disappointment, I guess.

1253 Can I ask you if you have had many racial minority and aboriginal producers and whether you plan to -- whether this is an issue you plan to focus on during the course of the next licence? There was some allusion made to this.

1254 MS McQUEEN: I will let Kirk start with that.

1255 MR. LaPOINTE: Around our plan that starts with the Promedia involvement with our news operations we know that we are going to see some progress. We are at this point still a little fuzzy about how it is we are going to measure it appropriately, but we do know that we will be able almost overnight to begin to make our operations more interesting and inviting to a wider group in Canada, and that for whatever reasons there have been -- I don't think it has ever been anything like a barrier, but it has just been a little less than inviting.

1256 The approach that we are going to take with this program will be not to strengthen our numbers in the area of having a more diverse workforce. But more than that, I think it will be the programming and the story selection and the continued acceleration on that frontier.

1257 MS McQUEEN: Bill Mustos.

1258 MR. MUSTOS: I would like to ask Louise Clark to give us an answer.

1259 MS CLARK: Hi. Yes, we worked with a number. I don't know if the names are familiar to you or not, or how you would like it presented. I think one of the most talented is Annie Frazier Henry, who did "Legends: The Story of Siwash Rock" which was a contemporary retelling of an aboriginal legend. So, it was written, directed, produced, crude in many respects and cast entirely with aboriginal peoples.

1260 She's a very interesting talent that we have done some other work with. In fact, when another filmmaker came forward with a documentary on John Walkis-Green, who is another aboriginal artist from the west coast, who had been adopted by a white family and she wanted to tell his story, we married her up with Annie Fraser Henry in order to make sure all perspectives were covered off. It turned out to be a quite wonderful film as a result. That's one example.

1261 COMMISSIONER CARDOZO: I could list many more; Julia Kwan, Shan Tam.

1262 My sense of it and maybe you can verify this or not is that over the past 10 years or so there has been quite a growth in the number of producers from various minority communities, quite a growth who tell stories there, minority stories as well as not, but who have a hard time getting on air. That's an issue that I think needs addressing somewhere in the system.

1263 MS BOYCE: This is anecdotal, but it does give me great heart in a way. Our latest digital channel that we launched is called Talk-TV. We chose for hosts of that program people who had not done television and they are in their twenties, early thirties. And one of the areas of diversity or one of the areas of comment that has come back through focus testing generally is that you don't see on conventional particularly intergenerational. You don't see old and young or experienced and inexperienced people talking back and forth.

1264 So part of Talk was, of course, to change that. What I find so great when you tune in is that these people are just automatically booking guests who come from a variety of backgrounds. So whether it is cultural or people with disabilities, persons with disabilities, and it is just done. It's in a way I guess how some of us feel about being female and 15 years ago or maybe 10 years ago, I don't know, there would be two of us or maybe one in the room. So it's something that doesn't even get talked about. I hope we will see more of --

1265 MR. FECAN: You know, I sort of wanted to say something here. The progress you have seen isn't an accident. It is something we believe in.

1266 My own case perspective maybe is helpful here. I didn't speak English until I went to school. I never thought somebody from an ethnic background would be a vice-president of the CBC. It was difficult when I was growing up to imagine that. I don't think I could have ever imagined someone from an ethnic background running a WASP bastion such as Baton or sitting in the position I sit in here today. So that speaks to my sensitivity of the issue. I understand how the country has changed. I understand it in terms of when I was growing up and the only thing I really didn't know in high school was what a WASP was because there were none at Harbord Collegiate in Toronto.

1267 I think I am very sensitive about this issue. I think everyone on our team is. We know we have a job to do and I think we need to improve, but I also think there has been a concentrated improvement. We may not have written it down on a piece of paper and as good corporate citizens maybe we should be more succinct about it, but when you kind of look at the range of things under way and the progress under way, it's not an accident. It is something that we think has to happen and we want to be part of that solution.

1268 COMMISSIONER CARDOZO: Can I ask you in terms of the foreign programming that you had whether you look at it with a lens of does it either reflect diversity or is it not offensive and not stereotypical? Is that one of the issues you may be looking at when you are looking at buying foreign programming?

1269 MS BOYCE: Yes.

1270 COMMISSIONER CARDOZO: My next question, I just wanted to finish that one in terms of programming and come back to your comment, Mr. Fecan. I hear you.

1271 One of the interventions suggested that there has been an improvement in terms of the on air news people in the last couple of years. Is that a figure you would agree with in terms of visible minority announcers or journalists and people in that area?

1272 MR. FECAN: I think there has been an improvement, but I don't think we are done.

1273 COMMISSIONER CARDOZO: But do you see a movement in the last two years or so?

1274 MR. FECAN: I don't know if it's two years or what the appropriate time frame is, but certainly over the last licence term there has been a quantum improvement.

1275 COMMISSIONER CARDOZO: So when you say you are not done, my next question is: Is this a blip or a long-term approach? I take it it's the long-term approach. Thanks for anticipating my question again.

--- Laughter / Rires

1276 COMMISSIONER CARDOZO: Can I just ask about training of reporters. You mentioned work that you plan to do with Promedia I believe it is, and have you done work in that area before in terms of training your reporters in terms of reporting on diversity issues as well as training, mentoring minority reporters?

1277 MR. LaPOINTE: Yes, Commissioner, there has been some training before. It has been successful in raising awareness in finer story selection to reflect the community in using new sources as voices of authority in our reports. That is often as important as anything, that people in academic, professional and leadership roles are all reflected in our reports from all of our communities within the community.

1278 But our plan is far more ambitious over the next number of years. I think you will see us become a centre of excellence in this regard because I think we have now the resourcing to make it a clear mission. It is part of the benefits package, so it is earmarked very clearly and I think our news directors across the country are quite excited about the opportunities that it presents.

1279 Not to belabour this too much, but I think we all agree that somewhere about the late 1980s and early 1990s because of a lot of economic restraint around journalism that came in we lost the real momentum that might have been built at that point to start reflecting the country. We are only now catching up around certain of these issues. I think that is not something to be lost because many of us have workforces that are quite loyal and they don't move from newsroom to newsroom. In many cases correctly we respect our union contracts and so the ability to change your workforce over night is a difficult one.

1280 You can only move in small steps at times, but I think now we are on the correct track. I am quite confident. As you know, I have been around a lot of places in the last number of years. This is actually I think the first time I can speak with great confidence about the plan and the outlook because I know we are on the path to doing the right thing.

1281 COMMISSIONER CARDOZO: Although you are going to have to stick with the job a while longer.

1282 MR. LaPOINTE: Yes, you have a point there.

1283 COMMISSIONER CARDOZO: That's not part of what we regulate, just so you know about that part of what we do.

1284 I had a question on databases in terms of people you talk to in terms of news and minority actors and so forth. I understand from -- can I take that as a yes?

1285 MR. GOURD: Yes. It is part of our work planning and it is one of the key components of the approach. Hopefully, as I said earlier, we will be able to be more detailed about it. But, yes, it is absolutely part of the approach.

1286 COMMISSIONER CARDOZO: If I had a computer that was connected to Bell Sympatico I would have thought that you had gotten into my computer and got my questions ahead of time, but it's not a Bell Sympatico line I had. I appreciate your anticipation.

1287 A couple of just closing questions in this area. In terms of a plan, in terms of a strategic comprehensive plan could we ask you to submit one in say three to six months that would outline the range of initiatives you are looking at?

1288 MS McQUEEN: Yes.

1289 COMMISSIONER CARDOZO: Okay. Would you be prepared to report annually on the progress in this area?

1290 MS McQUEEN: Certainly.

1291 COMMISSIONER CARDOZO: Thank you very much.

1292 Thanks, Mr. Chair.

1293 THE CHAIRPERSON: Thank you, Commissioner Cardozo.

1294 I will now turn to Commissioner Pennefather.

1295 COMMISSIONER PENNEFATHER: Thank you, Mr. Chairman.

1296 I would like to discuss with you the audiences that -- through the day you have made a great point about the fact that that is core to your strategy. The component of that audience I would like to discuss with you are the Canadians who are visually impaired and how you are going to bring your services and programming to them.

1297 As you know, the TV policy states quite clearly that at licence renewal we will review your progress in this matter.

1298 You do bring this matter to the application in the sense of a response to question 4.4 and deficiency responses and your reply to interventions. Certainly one of the areas that always comes up when we discuss this, even though as you say, generally speaking, you would like to proceed with "describe video programming," I think you put it as, "we are interested in addressing service to the visually impaired, the whole issue of costs comes up".

1299 We discussed this in Montreal as well and you are aware of NBRS intervention where the problem is we have very wide varied opinions on what the capital costs are in terms of "describe video programming".

1300 So what I would like to do today is over and above your comments that things are technically challenging and the area is quite complex is to ask you to help us in fact a little further than that and talk about what in your estimation these costs really are.

1301 Secondly, the amount of DVS programming we could foresee available through CTV by the end of the seven-year term and perhaps some possible requirements that we might want to look at in that regard.

1302 In looking at this issue of costs what I would like to propose is that we look at the technical upgrades. I think your comment and certainly the benefits through the BCE transaction were directed at the preparation of the production side of things and we will touch on that, but I am looking at the capital cost component. What I would like to do is for you to assist us by looking at one market, only one, Toronto, and ask you if you could give us costs very specifically to that market on the steps involved, assuming production costs as well, but particularly the steps involved in bringing a digitally described program to the audience.

1303 For example, my first question: What are the additional costs to broadcast the DVS program over the Toronto transmitter?

1304 MS McQUEEN: I am going to say first that we take this issue of described video seriously. I think at first, like all broadcasters, it was a new idea and we reacted to it with the usual reluctance when somebody else has a good idea about what you should be doing. But since then I think we have had conversations that have made us understand the whole issue.

1305 Jim Macdonald, who will be well known to you as a distinguished broadcaster with long experience, in fact has been helping us with this issue, and I will ask him to talk about it, but, first, he said something that I think really resonated with me and with others about this service. It isn't only about being able to watch television if you have visual impairment; it is about a whole way of interacting with society. If you are not able to see the big hits or understand the "Lucky Girl" movie, if you haven't been able to partake in a real fashion in terms of something like "The Associates", you are kind of left out of a lot of conversations and a lot of the social interactions that go on, even in your own family.

1306 That was a way of putting it that Jim put to me that I thought was very resonant and very interesting. So I think we are slowly coming to an understanding of the objectives of this.

1307 But we believe that we have been leaders, certainly in our contributions to the NBRS, with the several million dollars we have given to them for the production of described videos.

1308 Our next task, as you said, is to try to conquer the technical issues.

1309 So I am going to ask Jim and Allan to take you through that, saying one thing: the way you posed the question with Toronto, that is kind of easy. We actually have a plan that Jim will talk about to roll that out. It is after Toronto that it gets interesting technically, so I hope you won't mind if we extend --

1310 COMMISSIONER PENNEFATHER: No, but I would appreciate them one step at a time, because that is exactly where we run into stumbling blocks and, frankly, in the application, we not only didn't have the fundamental philosophical point you made, we didn't have any costs on which to evaluate why no progress was being made on the actual presentation of the program.

1311 So I am pleased to hear that you have made that point.

1312 We were talking earlier about closed captioning and how it is not only somewhat taken for granted now, it has also become a profit centre. It started with the persistent attitude of those who were in need and who tried to convince us that television was more than just a medium for those who were not visually or hearing impaired.

1313 Having said that, we constantly find, though, the answer that says it is too costly.

1314 If we could also look at it from the Toronto market and what our costs would be, then we could move on to similar markets and see where we end up.

1315 Just to be clear, I think the key components are the transmitter, the studio, and the distribution link in the plant, as well, for the cable head end.

1316 MR. MACDONALD: Thank you very much, Commissioner Pennefather. I am going to leave the technical side to Allan Morris. What we have done is, we have gone through the entire system and looked at all of those aspects.

1317 But I think it is important to follow up what Trina was saying earlier about the leadership aspect. There has been a $2 million commitment to NBRS through the acquisition of CTV by BCE. There was another million dollars in the NetStar acquisition. We have seen ourselves as leaders in this role.

1318 As I think you have heard for most of the day today, CTV takes their commitments extremely seriously, so I want to make sure that I answer your last question first, which is: Why you didn't make a commitment earlier.

1319 We looked at the intervention from NBRS. We looked through the numbers very carefully. But we also recognized that there was a significant commitment, and it didn't just start with Toronto, it had to be across the entire CTV system.

1320 So we will go back and answer your specific question about Toronto, and then, after we get through the technical stuff, I would like to share with you what we propose, because this is one of those journeys that has to start with an unequivocal first step, and CTV would like to continue its leadership with that first step.

1321 Allan?

1322 MR. MORRIS: Good afternoon. On the technical costs, doing Toronto is fairly simply. We are looking at a cost of approximately $80,000.

1323 COMMISSIONER PENNEFATHER: Could you break that down for me?

1324 MR. MORRIS: That involves upgrades to our master controls, providing the SAP generation equipment at the transmitter, and upgrading --

1325 COMMISSIONER PENNEFATHER: So the transmitter is currently not SAP ready. You would provide that.

1326 MR. MORRIS: The transmitter is currently stereo, but to enable the SAP channel there is a box of approximately $10,000 that has to be installed. And then we have to enable our SAP to deal with the transmitter link, to provide that third channel of audio -- to deliver it to the transmitter.

1327 COMMISSIONER PENNEFATHER: So the studio upgrade is the master control?

1328 MR. MORRIS: The master control to provide for that additional audio channel, and to enable the additional audio channel to be played back from the tape machine or video server, whatever happens to carry the information.

1329 COMMISSIONER PENNEFATHER: Could you give us the cost of each of those elements? The total is $80,000, but could you give us each element costed out -- the master control and the transmitter?

1330 MR. MORRIS: Sure.

1331 MR. MACDONALD: Commissioner Pennefather, Allan can do this, but one thing I should point out, not being an engineer and trying to analyze it much the same way you are, is that there is no cookie cutter here. Each circumstance is different.

1332 I just want to point out that we can't sort of take Toronto and multiply it out.

1333 COMMISSIONER PENNEFATHER: No, and I appreciate that, but --

1334 MR. MACDONALD: Because each of the configurations is different. Some are mono, some are --

1335 COMMISSIONER PENNEFATHER: Of course. But I think that is where we got stuck constantly before, saying that it is all different, so we will have a large amount of money.

1336 But I appreciate, from our standing, that this ring is not an engineer's ring. It is more of a Celtic ring. I think there is only one engineer's ring at the table. But I do have a basic sense of the steps, and we would need to get a good feeling of what is involved through looking at the Toronto market.

1337 MR. MORRIS: All right. As we look at the way our master controls are configured, the upgrade to our master controls would be around $50,000 alone. That is to provide the electronics to deliver that third channel of audio, including what we call audio distribution.

1338 We then have to take into account the provision of the third channel of audio to the transmitter. That is about a $6,000 cost.

1339 Then, to actually put the SAP box at the transmitter, that is approximately $10,000.

1340 Then there are other incidentals involved.

1341 But this only delivers a signal to the transmitter. It doesn't enable it to be carried on cable or DTH. There are additional costs that have to be borne by those groups to enable it to get to the audience who is on cable.

1342 COMMISSIONER PENNEFATHER: Can you tell us what that cost would be regarding the cable head end?

1343 MR. MORRIS: It really varies from cable system to cable system. In Toronto it might be a few hundred or a thousand dollars on the Rogers system.

1344 In the case of DTH, it actually uses additional bandwidth on the satellite to enable that additional channel.

1345 The problem that DTH would probably argue is that every channel using SAP would eat into bandwidth that could potentially be used for additional video channels. If you add up all of the stations, it could chew up a lot of bandwidth.

1346 COMMISSIONER PENNEFATHER: So assuming that we have the transmitter cost to the cable head end, are you saying that in a big market like Toronto the cable head ends are not currently capable of carrying a full signal? Perhaps a minor upgrade?

1347 MR. MORRIS: I know for a fact that CFTO -- there is no SAP module in the Rogers cable system, because I have inquired about that information. So they would have to buy that. I know it is not very expensive, but that is only one market, one station.

1348 COMMISSIONER PENNEFATHER: Indeed.

1349 We are going to start with that. So in the market of Toronto it is not very expensive.

1350 MR. MORRIS: Correct.

1351 DTH is also a different matter because bandwidth is required for them to give up to enable that service -- again, only CFTO on, let's say, Star Choice and ExpressVu.

1352 COMMISSIONER PENNEFATHER: So now we have a situation where a DVS program to the Toronto audience over the transmitter -- $80,000.

1353 MR. MORRIS: Correct.

1354 COMMISSIONER PENNEFATHER: Plus a small amount to those audiences receiving the program through the cable system, and another amount should they be receiving it through a DTH connection. Is that correct?

1355 MR. MORRIS: Right.

1356 COMMISSIONER PENNEFATHER: And you can file all of those costs with us?

1357 MR. MORRIS: Yes.

1358 COMMISSIONER PENNEFATHER: So we are talking $80,000 for Toronto?

1359 MR. MORRIS: That's right.

1360 COMMISSIONER PENNEFATHER: The upgrade to the studio, just before I forget -- to the master control -- you said $50,000. Is all of that $50,000 related to just adding a third audio channel, or are there other components that you are upgrading at the same time? Or is it just related to the audio channel?

1361 MR. MORRIS: It's purely that channel.

1362 We have digital master controls that currently deliver stereo audio. So we have to buy additional hardware to provide that, really, third and fourth channel. We are getting another channel beyond that, but let's not talk about that.

1363 COMMISSIONER PENNEFATHER: That was my point. Wouldn't you be going through, over the next, say, three to five years, upgrades to the system anyway? So would this not be part of your ongoing plan?

1364 MR. MORRIS: No, these are fairly new installations, and they are, effectively, state of the art. We would have to add those additional channels, and they do come in pairs.

1365 And then there is an issue of -- we are fortunate that our digital VTRs do have four channels of audio; however, we would have to have them cabled or wired into the master control switches. So there would be an additional cost for that, as well, which is within those costs.

1366 COMMISSIONER PENNEFATHER: I'm sure, in tabling information, the specifics of what elements you have chosen to make up the $50,000 and any options you may have in there, if we are running into overall costs that are considered too high for some reason, that would be very interesting, too.

1367 I think the next step, as Mr. Macdonald also mentioned, is to look at the same breakdown in another major market to see if they are different, or vastly different, or the same.

1368 Let's say if we picked Montreal and Vancouver, what are we looking at to do the same steps to make the DVS program available through a transmitter and/or over cable?

1369 MR. MORRIS: As soon as we look at extending the service beyond Toronto we have to do a number of additional changes to our centralized master control because we deliver the CTV network across multiple time zones. So there is a much bigger infrastructure cost, which I estimate at probably a quarter of a million dollars in Toronto, to enable it to go to anywhere outside Toronto.

1370 As soon as you add Vancouver, we have to add a quarter of a million dollars -- it's actually about $260,000 -- to Toronto to enable that to happen.

1371 We have to convert our satellite delivery system to three channels of audio as well.

1372 COMMISSIONER PENNEFATHER: Can you table those costs with us as well?

1373 MR. MORRIS: Yes.

1374 COMMISSIONER PENNEFATHER: If I understand, you are talking about delivering the DVS program from Toronto across the network, or at least to Montreal via the network.

1375 MR. MORRIS: It is up on satellite at that point.

1376 COMMISSIONER PENNEFATHER: Just so I am clear, in Montreal itself -- and maybe this isn't a solution, so correct me if I am wrong, but I am curious to know if the costs specifically in the Montreal area, or Vancouver -- if the costs to the master control, costs to upgrade the transmitter, unless the transmitter is already SAP ready, and any other costs to the distribution links in the plant would be the same.

1377 MR. MORRIS: I estimate the cost for most other centres to be around $40,000.

1378 COMMISSIONER PENNEFATHER: So, individually, most other centres -- let's say Calgary, Ottawa -- they are all about $40,000?

1379 MR. MORRIS: Correct. As we get into smaller markets like Saskatoon, there is a much bigger cost, because the tape machines they have there do not support four channels of audio, so there are tape machines that have to be added.

1380 COMMISSIONER PENNEFATHER: Yes. We were assuming that that, in fact, may be the case; that the smaller markets would be more. So approximately what are we talking about?

1381 MR. MORRIS: Effectively, in Saskatoon, I estimate about $165,000.

1382 This is really because these markets not only pass the signal through that is delivered from the central master control in Toronto, but they may have to tape and delay it. So they need a device to capture that audio.

1383 COMMISSIONER PENNEFATHER: Right. So if I'm right then, the size of market where these costs really begin to change and mainly you need more studio upgrade or the transmitter is not SEP ready or the equipment is at a certain age, the size of market that we are talking about there is the Saskatoon size of market and others?

1384 MR. MORRIS: Saskatoon is really a hub master control for us. The costs let's say in Regina would be far less, as Regina originates from Saskatoon in many cases. There are a whole series of numbers, depending on the city that the service originates from.

1385 COMMISSIONER PENNEFATHER: If we step back then and look at very quickly we have drawn up a table of costs to at least begin in certain markets, and even perhaps include such markets as Saskatoon, which involve for example the upgrades to the studio that you mentioned. Wouldn't you acknowledge that most of this part at least, if not also including the transmitter upgrade could be done in a normal equipment replacement which would be done over the course of the next few years, whether we have DVS involved or not?

1386 MR. MORRIS: We would not necessarily provide the third channel of audio as we upgrade. Obviously, if we are doing DVS we will.

1387 Our master controls in Toronto, we have a number of them, they are all digital state of the art. They are only two channels because that was necessary at the time. The third channel would be an additional cost, as I said. So there might be some upgrades that you would do, as you say, in the normal course of events. This one option you may not.

1388 COMMISSIONER PENNEFATHER: But it would be interesting to put that in a game plan which really was and you can see what we are getting at here is what we said in the TV policy, which is a sensible, reasonable, but gradual implementation where as well some costs could be well planned within the upgrades that you would be bringing to the studio set-up any way, and there may be other, such as there was, I think mentioned in the FCC report, other incentives to add the other sound channel.

1389 MR. MORRIS: But all these costs are sensible costs. We are not looking at, as an example, Regina which is mostly a mono audio plant, a single channel audio. We are not anticipating converting the whole plant to stereo or three or four channel. The cost would be perhaps many hundreds of thousands or millions. This is really a method to most effectively get to delivered DVS through the system.

1390 The same applies to Toronto as well. We are not looking at a total plant rebuild because those numbers would be off the charts.

1391 MR. MACDONALD: Commissioner Pennefather, I think what you are really driving at is the reasonability of what this is all about. The sum total of the numbers you have just reviewed with Allan, we have looked at this and studied it reasonably carefully and gone through it on a plant-by-plant basis with each of the local engineers, and believe that this can be done at least on the technical side in around $1.5 million.

1392 COMMISSIONER PENNEFATHER: It is usually that figure of $1.5 million which comes up. It is just too much, but I think if we take it as a step by step there may be another approach.

1393 However, in getting at the $1.5 million and the costs that you have broken down it is the case that NBRS have a different analysis of the very same steps that you have described. Have you any comment on that and also the fact, as they say, the experience in the United States is that the upgrades that you are describing cost anywhere from $7,500 to $37,500 Canadian, as opposed to the figures you are quoting?

1394 It's important for us to try to get a sense of how to bring these numbers together, on the one hand very high figures and on the other hand not so high. Just give us a sense of why you feel that your numbers are fair?

1395 MR. MACDONALD: Well, when we started this analysis, Allan and I, I think I won't speak for Allan, but I think that what we were trying to do was to assess the reasonability of those numbers, but more importantly apply them specifically to the case at CTV.

1396 So the numbers that we are reviewing with you now are very specific to CTV, but we think that there is a basis where there is support for those numbers in a general broad sense. Allan.

1397 MR. MORRIS: I look at all the NBRS numbers. I agree with them all, but it is not the whole story. Again, as Jim said, it's specific to each location, each plant. The individual costs of some items I agree with and I have actually used those numbers, but there is more to it than that.

1398 COMMISSIONER PENNEFATHER: Well, on the more to it than that, I assume what you have tabled with us will give us some detail as to what you feel are the complexities that are now touched on and we can continue to debate that.

1399 Just leave that there for a moment in terms of the cost of the market served for the upgrades and look at the programming side and how much programming we could consider in a plan to in effect ramp up the amount of digital -- descriptive video programming.

1400 As you know, the FCC requires the four major networks in the top 25 markets to broadcast four hours per week DVS programming and this is also the NBRS proposal. We note that Global has proposed one hour a month.

1401 Just in looking at this and analyzing it do you agree with NBRS's estimate of $2,250 per hour for a DVS program in terms of production?

1402 MR. MACDONALD: Yes, we do. We were pretty fundamental in getting it to that number. The previous average was $5,000 plus and that was their real stumbling block because $5,000 was a significant percentage of the overall production in some cases. So, yes, we would agree with that and, as I said, it's CTV benefits it was largely responsible for being able to hire the people to reduce that rate to $2,250.

1403 COMMISSIONER PENNEFATHER: If we increase the hours what would be the additional costs if more DVS programming was transmitted: In other words, one hour a week instead of one hour a month, would the costs change?

1404 MR. MACDONALD: I think that -- we have had ongoing dialogue with NBRS. They have been working on a $5,000 budget. As I said, the CTV benefits have been able to cut that in half. I think there is probably additional volume savings that might be generated, but they are certainly not going to be anywhere close to that in terms of quantum. So our approach had been to cost it out using $1,150 per hour.

1405 COMMISSIONER PENNEFATHER: So once the capital costs are taken care of, the production costs essentially also with the grant to NBRS through benefits have considerably come down, and I guess we can consider a fair degree of DVS programming could actually be produced, ready for delivery within the system which has now been upgraded. So on a going forward basis and that's part of my question, to see as the amount of programming increases that the production becomes more viable. And also as we have noticed in closed captioning the whole matter is also and could also become a cost revenue producing operation. Have you any comments on the parallel with the sponsorship available for closed captioning and the potential sponsorship for DVS programming?

1406 MR. MACDONALD: Yes, Commissioner Pennefather, as good capitalists we looked at that possibility very quickly. But the fact of the matter is that closed captioning has, as you pointed out very correctly, developed as a secondary source of sponsorship.

1407 But when discussing this with the CTV sales guru, Rita Fabian, she reminded me that there is an inventory limitation and this gets back to the clutter issue. So, yes, we do believe that it could be a revenue source, but it is a revenue source that would probably happen at the expense of the closed captioning revenue.

1408 But we do think that it makes -- you know, we have looked at this as an overall plan. We have put together a roll-out proposal against the technological changes that you made. You referenced the FCC ruling and the four hours that will be coming from each of the top four networks in each of the top 25 markets. That will certainly produce a lot of programming. We expect that will be coming much like we receive programming captioned right now.

1409 The NBRS proposal focused on Canadian programming and specific commitments. We have reviewed the kinds of commitments that we think we could make, as I said in establishing that first step. We have looked at the current cycle of Canadian production and as much as we want to see 22 hour orders. The 13 episodes is more consistent and we have developed a starting point of two hours a week on a 50/50 split between originals and repeats, ramping up to three hours in year three and four hours in year five, in addition to of course the pass through that will be possible once the equipment is in the field.

1410 Our plan proposes Toronto immediately in year one, and at the same time undertaking some of the satellite upgrade that Allan talked to you about in anticipation of a further roll out to Ottawa and Vancouver in year two.

1411 You mentioned Montreal, which of course right now CTV does not own, but if that was to change then certainly I would hope that we would be able to see a roll out in year two of Montreal as well.

1412 In year three we are planning to look at Calgary, Edmonton, Lethbridge, Kitchener and environs. In year five we would handle the east coast and by the end of year seven we would have all of the CTV stations up and running and technologically capable of handling DVS.

1413 COMMISSIONER PENNEFATHER: In year five all stations would be ready to go? Sorry, I missed that last sentence.

1414 MR. MACDONALD: No. Year five would bring in all of ASN and ATV and by year seven we would have the balance of the stations would be comprised primarily of the north and parts of Saskatchewan.

1415 COMMISSIONER PENNEFATHER: And by year seven how many hours of programming because we are ramping markets and programming amounts at the same time here?

1416 MR. MACDONALD: We would be at a minimum of four hours on a 50/50 split, plus U.S.

1417 COMMISSIONER PENNEFATHER: Plus U.S.

1418 MR. MACDONALD: Plus U.S.

1419 COMMISSIONER PENNEFATHER: Just in passing, the cost of foreign programming or American programming, what's the cost of rebroadcasting U.S. programs in DVS?

1420 MR. MACDONALD: Well, I should defer to Allan on this, but our expectation on this is the cost will be borne on two sides. First of all, there is the technical side of this, which ones have got the equipment in place. There should be no further incremental costs.

1421 Now, there will be a cost to the producer to do it in the first place and we expect that that cost will be amortized really on a world basis, so it should really be a very minimum.

1422 COMMISSIONER PENNEFATHER: Speaking of audio channels, I keep losing this one.

1423 You agree that it is time to make a specific commitment to a level of service to the visually impaired?

1424 MR. MACDONALD: yes, we do. We spent a lot of time thinking about all the benefits that are proposed in these transactions and $2 million is a significant amount of money. I know that $230 million is a much more significant amount, but we thought about that long and hard. We made the commitment at the beginning, anticipating that we would be leaders in this and what we are trying to do is to continue that leadership.

1425 COMMISSIONER PENNEFATHER: And you have described a ramp up of both markets in which the DVS program would be available and the amount of programming. Could you table that with us in writing just to make sure that we have it?

1426 MR. MACDONALD: Yes, we would be happy to do that.

1427 COMMISSIONER PENNEFATHER: And what is your comment on that being a condition of licence?

1428 MR. MACDONALD: I really should defer to my boss on that.

1429 MS McQUEEN: We would accept the proposal that will be given to you as a condition of licence.

1430 COMMISSIONER PENNEFATHER: Thank you.

1431 You said one small step, but this a ways from what we had in front of us. I appreciate the information which I am sure we will want to examine in more detail amongst engineers, but also amongst all of the Commission and others who are looking at this not just from a technical point of view, but from getting started on providing services for all Canadians.

1432 You put it very well at the beginning, that we have I think a ways to go before we really understand the nature of television programming in the lives of all Canadians when we have only at this stage begun to actually take some steps.

1433 Thank you very much.

1434 THE CHAIRPERSON: Thank you, Commissioner Pennefather.

1435 By the sounds of it, the air conditioning might be winding down.

1436 I will turn back to Commissioner Cardozo, who has some questions -- and I have not been announcing this ahead of time, but I will do this because I want to say where we are and where we are going to be tomorrow -- with respect to the hearing impaired and some questions with respect to children's programming. That will end our day, following Commissioner Cardozo's questions.

1437 Tomorrow we will conclude the questioning of this panel, with a couple of questions with respect to the extension of service to the B.C. interior -- and I understand that you want to make a brief presentation in that respect before we do that -- and the issue of cross-media ownership, which will complete the questioning for this panel.

1438 With that, I will turn back to Commissioner Cardozo.

1439 COMMISSIONER CARDOZO: Thank you, Mr. Chair.

1440 As the Chairman mentioned, I will start with a few questions on closed captioning. It is really quite a pleasurable issue to discuss, because to me it is one of the success stories, both of the Commission and the industry, that we have reached where we are, more so in English language television than in French.

1441 What is really quite interesting about closed captioning is that while it started as something for the deaf and hard of hearing -- and that is our prime concern -- you will be aware that it is used widely in various noisy locations where perhaps hearing people are rendered hearing impaired.

1442 You find increasingly in places like health clubs, bars, restaurants, airports, and so forth, people are using televisions and are running with closed captioning. It is a good example of how one starts with a social policy objective and finds that it has a lot of other spinoffs well beyond that.

1443 I have a few fairly straightforward questions, more just to clarify your position. You have given us a lot of information to date.

1444 I want to clarify that what you have committed to is that all the licensees forming your station groups will meet the captioning levels set out in our Public Notice 1995-48, which would mean that each of the licensees being reviewed at this hearing will capture 90 per cent of the programming during the broadcast day in each year of the licence term, starting 2001 and 2002.

1445 MS McQUEEN: You are not going to believe this, but we didn't anticipate this question.

1446 COMMISSIONER CARDOZO: I was just going to say that you didn't have to say that any more. But thanks, anyhow. You get two points.

--- Laughter / Rires

1447 MS McQUEEN: I think it was pretty obvious because of all the fumbling around to find the information.

1448 The answer to your question, Commissioner, is yes.

1449 COMMISSIONER CARDOZO: I didn't anticipate such a short answer.

--- Laughter / Rires

1450 COMMISSIONER CARDOZO: I want to read out the questions, because the purpose here is to get your clear answers on the record.

1451 Each of the licensees will provide 100 per cent of the news programming, including all segments that will include local, regional and national programming.

1452 MS McQUEEN: The answer is yes.

1453 COMMISSIONER CARDOZO: I will be happy to read the yes into the record too if that --

1454 MS McQUEEN: Well, it would maybe solve a little bit of this stuff, but I think it would be useful if we went through it.

1455 COMMISSIONER CARDOZO: Let me get your view, then, on this. This is a not a question which will be in your notes, necessarily.

1456 As you know, the policy we have from 1995-48 has been staggered in terms of stations so that for stations earning more than $10 million a year, they are required to provide captioning; for those earning between $5 million and $10 million, they are expected; and those with less than $5 million are encouraged.

1457 A couple of questions on that.

1458 Do you think that staggering is a policy we should continue in general, but in terms of your station group, or whatever we are calling it these days, are you making that commitment for all of the stations?

1459 MS McQUEEN: Excuse me for a second.

1460 COMMISSIONER CARDOZO: Sure.

--- Pause / Pause

1461 MS McQUEEN: This is not a category in which we anticipated the question. Could you give us some time to give you a very clear and detailed answer on this?

1462 COMMISSIONER CARDOZO: Yes.

1463 MS McQUEEN: I am sure it will be satisfactory, but we just want to be absolutely sure.

1464 COMMISSIONER CARDOZO: You can come back to us later on that.

1465 Is the question clear? Essentially, you have a staggered process, but with CTV do we need to do that.

1466 MS McQUEEN: Yes, I understand.

1467 COMMISSIONER CARDOZO: My third question -- and this you might not have anticipated -- is with regard to the income that has come to broadcasters by sponsors of closed captioning.

1468 According to the information we put out that is public, the annual returns under Canadian programming expenditures suggests that in looking at the difference between the revenue and expenditures -- and I just want to say for the record that I have drawn these figures from the Canadian programming expenditures and also from a deficiency that you provided to us on the 14th of February -- there is an excess of revenue over expenditure in the last two years, which is fine.

1469 It was $1.4 million in 1999 and $5.5 million in the year 2000.

1470 You can either let me know now or later whether that is an accurate figure.

1471 MR. FILLINGHAM: The cost side of that equation really is measuring the incremental costs of moving to live captioning for the newscast. It would not pick up the investment in infrastructure and retooling all of the new systems throughout. Pretty well all the stations managed to move to new systems in their newsrooms that caught all the captioning of the scripted portions.

1472 I think, as the Commission is aware, one of the things that was missing was the live portions of each newscast.

1473 That actually became one of the big stumbling blocks for pretty well all the stations: to capture the full newscast on a live basis all the way through.

1474 There was an expectation that technology over the term of the licence would catch up on a form of voice recognition. That never occurred. So everyone pretty well moved to this incremental cost base to accomplish the 100 per cent captioning of a newscast.

1475 In a sense, it is an incremental cost, but it really does miss the investment that most broadcasters made in new systems in each station, which probably on an amortized basis would add another $2.5 million a year to that when you add up for each station in each market.

1476 COMMISSIONER CARDOZO: We are looking at $2.5 million. Is it fair to say for the year 2000 it was an excess of revenue over expenditure?

1477 MR. FILLINGHAM: Yes. What you probably have now has moved up to the revenue of captioning revenue now. There is a positive margin, but that would be it.

1478 COMMISSIONER CARDOZO: One of the issues that has been raised with regards to closed captioning in the English language television side -- and I keep drawing the distinction because the problems are still not overcome on the French language side, partly because more space is needed and partly because you don't have as much programming coming in from other countries which are already captioned.

1479 In terms of English language, there are still problems with regards to quality and accuracy of the captioning.

1480 What I would like to ask you is whether you could make a commitment, either now or during the course of this hearing at some point, that you could apply some of that profit to improving quality and accuracy.

1481 That is one issue that is brought up regularly to us, and I am sure to you, from people who are most concerned with captioning.

1482 MS McQUEEN: We understand that that is a problem, and we would like to come back to you with a whole set of information that you have requested on that.

1483 COMMISSIONER CARDOZO: Can we do that by next week?

1484 MS McQUEEN: Yes.

1485 COMMISSIONER CARDOZO: Good.

1486 I have a few questions on children's programming.

1487 I can tell you that I think indeed children are watching your program. Over Easter dinner the other night, I picked a random sample of young Canadians, who happened to be my two kids. They did verify to me that they knew these shows well -- I certainly know some of them -- and that they like them.

1488 I just want to get a sense from you about what your plans are over the licence term. We have had quite a bit of concern indicated to us after our TV policy, because have been more flexible again on this genre of programming.

1489 I gather from the information we have that you have something like this: 1.5 hours of children's programming, which I noticed on several stations: "The Minor Leagues", "Flying Rhino", "Junior High" and "Mythic Warriors".

1490 Then you have the "Disney Saturday Morning".

1491 Is "The Chat Room" more youth oriented programming?

1492 MS BOYCE: "The Chat Room" is our talktv part of our program.

1493 COMMISSIONER CARDOZO: So it is not a youth oriented thing necessarily.

1494 MS BOYCE: No, it is not.

1495 COMMISSIONER CARDOZO: How many hours of children's programming would you say you carry now and plan to carry over the licence term?

1496 MS McQUEEN: I think Susanne could handle this series of questions, Commissioner.

1497 COMMISSIONER CARDOZO: Thank you.

1498 MS BOYCE: In terms of hours, it will vary. What we are doing is we are running children's programming and then kind of family programming as well in prime and early, 7 o'clock time periods.

1499 In children's we will run on Saturdays and Sundays.

1500 Rick, do you have the numbers?

1501 MR. LEWCHUK: For Saturday morning, which is typically what you think of as the children's time period, the average over a year would be about 3 hours on Saturday morning. In addition to that, it would be programming that we would probably categorize more as family or youth programming. That will vary year by year.

1502 Things like "DeGrassi", which we have talked about, would fall into that category as well.

1503 COMMISSIONER CARDOZO: I am sorry, how much was the family and youth?

1504 MR. LEWCHUK: The family and youth, right now on the schedule we would be looking at probably an hour and a half in prime time.

1505 COMMISSIONER CARDOZO: Is it fair to say that the 3 and 1.5 is what you are planning more or less for the licence term?

1506 Again, if you want to come back to give us a clearer picture, that is fine with me.

1507 MS McQUEEN: Yes.

1508 COMMISSIONER CARDOZO: Some of the interventions reminded us that there is still a significant number of Canadians who don't get cable or don't get the tiers. Therefore, the tiers that we have talked about in terms of other avenues of children's programming are not available.

1509 Others have just said this is a core part of Canadian programming, and it should get on wherever it can. Certainly the conventionals are an important area.

1510 What should we say in terms of children's programming with regards to licence renewals?

1511 MS McQUEEN: The essence of your policy is to suggest that broadcasters become specialists. We believe very strongly that children's programming is indeed an area of specialization, where you do need people who understand developmental issues, who understand what programs are particularly attractive to children, who have a wide-ranging acquaintance and relationships with producers of children's programming.

1512 In our mind, CBC has rightly set itself the task of becoming an expert on providing programs for young children. They have converted their entire morning schedule to that area, so they have chosen that area of expertise.

1513 In terms of children, our interest is in being what we are, which is a family oriented broadcaster. We will provide and continue to provide a number of programs that are directed straight at children.

1514 Where we feel we can specialize is in programs that the whole family can watch together and also in providing programs for adults, mainly that deal with issues that affect children.

1515 For instance, "Lucky Girl", which we have mentioned many times I think during this proceeding was a program about an issue that related to teenagers, but in fact it was -- although it was appreciated by teenagers, it was important for parents to watch as well.

1516 We have other initiatives such as, for instance, CJOH in Ottawa has made it its particular mandate to be a source of information on children. They call this "Children First". In their story selection they make a conscious issue to deliver to parents and grandparents and others who are interested in children information about children.

1517 I think that's where we really see our area of specialization, not so much in programs that are directed directly to children, although we will have some of those, but in programs that the whole family can watch together and programs that feature issues involving children which again resonate with their parents.

1518 It's just a matter of how you specialize in the whole area of children and children's issues.

1519 Again, it goes back also to, you know, ideas. For example, there's a wonderful little show we started to develop called "Angela Anaconda". We wanted in the schedule programming also some programming that was kind of directed to young girls.

1520 Louise Clark developed this. It had some funding hitches. We carried on and at the same time "The Minor Leagues" came also at our door, so we developed that as well. "Angela Anaconda" went on to Teletoon, I believe, and YTV.

1521 We were really part of the development process and took great pride. It's elsewhere, which is fine. Then "The Minor Leagues", which we both developed and then produced, and ended up airing was an important one for us because it also on many occasions had higher numbers than our Disney lineup.

1522 We kind of again -- it goes back to what that ideas -- two ideas.

1523 COMMISSIONER CARDOZO: Have you noticed any change in ad revenues for children's programming over the years as other children focused channels have grown?

1524 MS McQUEEN: Indeed I think we have, but I would ask Rita if she could talk about advertising revenue and children's programming.

1525 MS FABIAN: Yes, Commissioner. It has certainly become more difficult to generate revenue from our children's programming, particularly because of the strength of YTV. You know, when we try to market children's programs we go head to head with them. It's just very difficult to compete. They have so much more of it to the degree they are able to sell it on a lower cost per thousand basis, so it has become quite challenging.

1526 COMMISSIONER CARDOZO: Do you think that might govern your decisions about continuing to carry children's programming?

1527 MS McQUEEN: Well, we intend to continue to carry children's programming. There is no doubt about that. We will do that. It is a service that we think we owe the Canadian public. What we are saying is that we don't think that we will become a specialist in children's programming the way we hope to be a specialist, for example, in documentaries.

1528 We think that the whole -- where we can provide the greatest service and the most specialized and focused service is in programs that attract a family audience. We think it's really important for the whole family to be able to sit together and watch programs and that the availability of programs that parents and children can watch together is as essential to the system as the availability of programs that are designed for children to watch on their own.

1529 COMMISSIONER CARDOZO: Okay. I'm not clear then in terms of what your plans are for what one might call children's programming. Is that a yes or a no in terms of your plans to continue it because if you think about family viewing, families with younger kids might tend to watch more as opposed to just the children.

1530 MS McQUEEN: Well, first of all, we will continue to air programs that are specifically directed at children.

1531 COMMISSIONER CARDOZO: Okay.

1532 MS McQUEEN: Secondly, when we look at our priority programming, our areas of specialization, we will continue to seek out, develop and air programs which explore issues related to childhood or programs that are attractive to families to watch with their children.

1533 COMMISSIONER CARDOZO: I think I'm getting it, to use your lingo. Is children's programming of a branding benefit to you?

1534 MS McQUEEN: I don't think it is because the brands that exist are so strong and, as Rita has pointed out, so entrenched and they do so much more of it that I don't think that we could compete as a children's brand.

1535 I think it is -- we kind of are squeamish about talking about children's programming as a brand, but if I can do so professionally, I do think it is a good brand, but like any other brand, you have to back it up with resources, action, specialization and understanding.

1536 For the CBC I think it's a perfect, absolutely perfect brand. For TV Ontario, absolutely perfect. YTV and Teletoon, that's what they do and they have made children's programming very much their brand.

1537 In the system, both conventional and specialty, there are a number of strong brands for children.

1538 COMMISSIONER CARDOZO: Okay. That covers my questions. Thanks very much.

1539 Thank you, Mr. Chair.

1540 THE CHAIRPERSON: Thank you Commissioner Cardozo.

1541 That's going to conclude our questioning for today. I just have a couple of points I want to raise just so there isn't one more question that you haven't anticipated.

1542 Vice-Chair Wylie I think wants to give you a bit of a heads-up on a point she will want to cover later on in the week, just to ensure that perhaps you will have the information at hand.

1543 COMMISSIONER WYLIE: Also to close the loop on CFCF, we have seen your news release. I assume that programming, the network programming, is currently being provided to CFCF --

1544 MR. FECAN: Yes.

1545 COMMISSIONER WYLIE:  -- under the network licence.

1546 MR. FECAN: I think it's important to -- we are very happy that an agreement has been reached, but there's another shoe to drop here and that is the case of DePoe has the right under their existing shareholders agreement to buy the whole thing at that price.

1547 COMMISSIONER WYLIE: So it's not finalized.

1548 MR. FECAN: It's not the final answer. CanWest has made a deal with us through the trustee and our lawyers. That in turn triggers a defined -- I think it's 30 day period where the case has three decisions to make.

1549 They can either sell alongside CanWest and we would be the owners of 100 per cent of CFCF, assuming you approve. Secondly, the case could decide to stay in, in which case we would have 70, they would have 30 and we would still -- by your rules it would still be a station we control. Third, they can say "You know, okay, we will take the whole thing at that price".

1550 COMMISSIONER WYLIE: Okay. Our interest, of course, is simply to make sure that service is provided in Montreal in some way or other, so we will hear further from you after the 30 days.

1551 MR. FECAN: And when we hear the case, then I think we know which way we go on this road.

1552 COMMISSIONER WYLIE: And then eventually this will be settled through some type of supply agreement --

1553 MR. FECAN: Yes.

1554 COMMISSIONER WYLIE:  -- or a network licence which I gather was the most likely scenario.

1555 MR. FECAN: If the case chooses to buy this channel, then I think we may be back where I started. I think we do have an application for a stand-alone station filed with you.

1556 COMMISSIONER WYLIE: Yes, I know. But in any event, if things develop in a happy fashion for you, we will hear as soon as possible as to how service will be provided in Montreal.

1557 I just have one question about local programming as a follow-up to this afternoon's discussion with Commissioner Pennefather.

1558 In each of your applications you say, and I quote:

"Each major station will have a 15 hours and 30 minute block each week dedicated to local programming unique and relevant to their communities." (As read)

1559 I don't want an elaboration on it today, but as the Chairman indicated, I don't want to spring a question on you, on Friday, when we look at the individual stations, without forewarning.

1560 When you do this calculation and we see a block called local news, is every kind of news in there, national, local, international?

1561 MS McQUEEN: Yes.

1562 COMMISSIONER WYLIE: So it would end up being calculated as the block dedicated to local programming, unique and relevant to the community.

1563 MS McQUEEN: Yes, but the selection of the national and international news is made locally based on the interests of that particular community. There are some obvious examples.

1564 If Premier Klein travels to China, that is a Canadian or international piece of news that might be run in Alberta, but the station in Ottawa may choose not to run it and so on. All the news is selected to meet the interests of the community.

1565 COMMISSIONER WYLIE: Would you be in a position when we -- we will start when we do your individual stations with the Ontario, southern Ontario stations, which I will look at, so CJOH, CFTO, CKCO. Would you be in a position to elaborate a little more with one station's example, let's say, as to just what is the percentage of news that is local programming unique and relevant to the community inside that block?

1566 MS McQUEEN: Well, our answer initially would be a hundred per cent, however, we will go through it with you. Would you like Toronto or Ottawa or --

1567 COMMISSIONER WYLIE: For example, would it have something on the Summit of the Americas?

1568 MS McQUEEN: Yes, but each station would decide how much and of what nature that coverage would be. For example, in Ottawa probably where people tend to be more politically aware, if I may characterize them in that way, there might be a larger block than in Saskatoon or Regina.

1569 There might be a situation in which some of the protesters or some had a local community relationship. All these things would go into the determination of what was relevant to the community or what wasn't.

1570 COMMISSIONER WYLIE: Yes.

1571 MS McQUEEN: But we would be happy to go through that with you.

1572 COMMISSIONER WYLIE: Just give us an example. What you are saying is the local manager chooses. Therefore, it's local programming unique and relevant to the community even if it has a level of importance such that every single one of your stations will have a concurrent tap of the news that is being shown.

1573 I'm just trying to relate it to this idea of are you doing enough for the local community.

1574 MS McQUEEN: I understand that and I think it would be in a way the same that you characterize a news broadcast like the 11 p.m. news with Lloyd Robertson as entirely Canadian, even though it might include foreign items on the basis that those items are chosen to reflect the interests of Canadians.

1575 COMMISSIONER WYLIE: Well, you wouldn't want to get into that now, would you, that someone is not Canadian of the national news.

1576 MS McQUEEN: I think the other issue is -- yes, I do want to get into it.

1577 THE CHAIRPERSON: No, we wouldn't want to get into that.

1578 MS McQUEEN: But we don't want to do it now.

1579 COMMISSIONER WYLIE: No, no, certainly not now. I'm sure you don't want to get into it tomorrow or Friday or Monday, but this is a different issue. I note the comparison is helpful as to what is being done to reflect the local community in the sense that in the national news when there is a break-in, at least there is in Ottawa, with Leigh Chappel and the local news, that is usually local as opposed to simply because everybody is interested in an issue that has occurred.

1580 Anyway, be prepared to look into -- you know, if there is something of not that great consequence occurring in Ottawa except to Ottawa people, whether it's taxation, municipal tax or whatever, that will be what will be on the local news, but you seem to have a much broader view of what's local, what's uniquely relevant to the community.

1581 Also, since you have a different line for the news costs, you know, how much money is being spent for the local community in that portion of the news? You know, at least for one station.

1582 Thank you.

1583 THE CHAIRPERSON: Maybe we will set aside Saturday.

1584 Just one final thing I want to raise today. In discussions -- looking at you Mr. Macdonald -- with Commissioner Pennefather, you mentioned that you would be prepared to file the information that was referred to on your DVS information and costing and the plan.

1585 I'm wondering whether you would be prepared to file that information tomorrow morning with a copy to the intervenors and in particular NDRS, the National Federation of the Blind and the other Joe Clark.

1586 MR. MACDONALD: Yes. We would be pleased to do that.

1587 THE CHAIRPERSON: Okay. Thank you very much.

1588 Well, that will conclude our proceeding for today. I thank you very much. It has been an interesting and informative day.

1589 We will reconvene tomorrow morning at 8:30.

--- Whereupon the hearing adjourned at 1830, to resume on Wednesday, April 18, 2001, at 0830 / L'audience est ajournée à 1830, pour reprendre le mercredi 18 avril 2001 à 0830