Transcription, Audience du 1er décembre 2023

Les participants et l'endroit

Tenue à :

Centre de Conférence
Portage IV
140, Promenade du Portage
Gatineau (Québec)

Participants :

• Présidente :Vicky Eatrides
• Membres : Alicia Barin, Vice présidente, Radiodiffusion
  Adam Scott, Vice président, Télécommunications
  Nirmala Naidoo, Territories/Conseillère, Alberta et Territoires du Nord Ouest
  Joanne T. Levy, Conseillère, Manitoba et Saskatchewan
• Conseillères juridiques : Valérie Dionne
  Bianka Lauzon
• Secrétaire : Jade Roy
• Gérantes d'audience : Courtney Fitzpatrick
  Marie Lyse Lavallée

Table des matières

Présentations

7416 Blue Ant Media Inc.

7555 WildBrain Ltd.

7628 Le Conseil provincial du secteur des communications du Syndicat canadien de la fonction publique

7761 Ballinran Entertainment

7785 Zellco Productions

7803 Alberta Media Production Industries Association

7820 Shaftesbury Inc.

7977 Canadian Race Relations Foundation

8034 Amazon

Engagements

8149 Engagement

Transcription

Gatineau (Québec)
1^er décembre 2023
Ouverture de l'audience à 9 h 00

Gatineau (Québec)

‑‑‑ L'audience débute le vendredi 1^er décembre 2023 à 9 h 00

7413 THE SECRETARY: Good morning, everyone.

7414 We will start with the presentation of Blue Ant Media.

7415 Please introduce yourself and your colleagues and you may begin.

Présentation

7416 MR. MacMILLAN: Thank you.

7417 Good morning, Madam Chair, Vice‑Chairs and Commissioners. My name is Michael MacMillan and I am the founder and CEO of Blue Ant Media.

7418 I am accompanied here by Jamie Schouela, President, Global Channels & Media; Mark Bishop, Co‑President, Blue Ant Studios; and Astrid Zimmer, Executive Vice President, Legal and Business Affairs.

7419 We would like to thank the Commission for the opportunity to be here today and express our views on the proposed contribution framework.

7420 So let’s get into it.

7421 First, under no circumstances should Canadian broadcasters be required to make any new or incremental contributions as they are already making significant contributions to the system, including via their CPE obligations.

7422 Second, we believe that foreign online services should begin to contribute to the Canadian system immediately and that those contributions are long overdue. We have heard other intervenors suggest 5 percent of revenues and that sounds reasonable to us. Our view is that online services should have the choice between a monetary contribution to a fund or via CPE, whichever is more fitting for their business model. The CRTC has indicated the intention to create a flexible yet equitable model suiting the individualized situations and business plans of each online service and ownership group. Allowing a choice of fund contribution or CPE would reflect that stated intention. Either way, the creation of Canadian content owned by Canadian companies would be stimulated. Blue Ant, for example, should not be required to pay money into a fund. The reasons for this and for why Blue Ant is in favour of CPE will become clearer to you later on in our presentation when we explain our business model.

7423 Third, for those entities opting for fund contributions, those contributions should be made to existing funds, such as the CMF and other private funds, with allocations supporting Indigenous creative communities, equity‑seeking members of society and news funds.

7424 Fourth, even more overdue and more urgent than requiring contributions from online services is the need for a change in the regulatory obligations of existing Canadian broadcasters to provide them with more flexibility, particularly as it relates to PNI.

7425 During these proceedings we know that you have heard from a lot of other intervenors about the current hardships and challenges in the Canadian television business and we certainly are not immune from any of these realities. The disruption has also created opportunities that we believe Canadian‑based media companies can capitalize on.

7426 As we all know, online streaming has completely disrupted the old programming model that most Canadian broadcasters have relied upon for decades. That old broadcast model was essentially to “rent” programming from U.S. companies to air on Canadian channels. That worked well in a walled‑garden environment supported by simultaneous substitution. But now, those U.S. companies are increasingly exploiting their programming over their own platforms directly to Canadian viewers. So, this old “renting” model is fundamentally challenged.

7427 Blue Ant is a Canadian‑owned and controlled domestic and international channel operator, a producer and an international programming exporter. Against the challenges to this old “renting” model, we saw an opportunity to combine our three business activities and become the “landlord” of television rights and not the “tenant”.

7428 Our Love Nature business is a perfect example of this. Love Nature started as a niche Canadian natural history specialty channel for which we rented much of the programming from U.S. and international suppliers. In 2015, with the goal of being the international landlord instead of just the Canadian tenant, we began creating an annual slate of nature shows that we could own and could exploit globally. Today, our channel Love Nature is available in over 145 countries around the world as either a standalone pay‑TV channel, a free ad‑supported channel or a branded block of programming shown by other broadcasters.

7429 Similarly, when free streaming channels or FAST channels emerged as a new distribution model a few years ago, Blue Ant was able to be an early mover in this space because we and other Canadian producers owned and controlled IP in several program genres to bring to market on this new platform. In the future there will likely be some other new distribution models that will emerge. The bottom line is that the most effective way to be ready to capitalize on these new models is to own and control use rights of television shows. This is our business strategy.

7430 So, our point here is that we think that investing in TV programming that we can use in Canada and internationally is a great opportunity and Blue Ant wants to do more of that. This is our central thesis and key to our business model. This is not to say that we don’t also “rent” programming from others, of course we do, but we do not depend solely on those rentals to sustain our business and we don’t see it as the basis for our future.

7431 In our opinion, this model of a Canadian‑based media company investing in and owning IP is the most plausible, and perhaps the only plausible, future strategy given the structural upheaval in the television industry.

7432 So, flowing from the key to our business model of being the “landlord” of TV rights and not the “tenant”, we now come back to the punchlines for this hearing.

7433 We agree that all players, online and traditional, should contribute, but new contribution obligations simply cannot result in increased financial obligations for Canadian broadcasters. To be clear, we are not here today looking to decrease our CPE obligation. As we have described, creating TV shows is the foundation of our business model. We want to invest in programming because that is how we think we can build value in our business. And we like to create television shows that our Canadian audiences enjoy.

7434 So, this is the punchline: We should not be asked to contribute a portion of our gross revenues into a fund. We need that revenue to invest in programming.

7435 Creating television shows may be central to the business model for other broadcasters and streamers as well, whether Canadian or foreign. It is for that reason that we think that all broadcasters should have the choice to contribute financially to a fund or via CPE, whichever is more fitting for their business model.

7436 In addition, there is an urgent need to loosen the regulatory obligations placed on Canadian broadcasters. This is most acutely evident in our lack of flexibility to invest in programming that meets audience demands due to our restrictive PNI requirements. Our current PNI obligations require us to overinvest in a very limited genre of TV shows that we don’t actually need, rather than investing in programming that our audiences are seeking. More flexibility to invest in genres we need and our audiences want is urgently required.

7437 And we know that this is not part of this particular hearing, but we would be remiss if we didn’t specify that when we propose contributions to CPE by online streamers, we mean CPE as currently defined, with the current definition of Canadian content and with Canadian‑owned and ‑controlled companies owning meaningful IP.

7438 Another point we wanted to raise was that the Commission asked us, through the Notice of Consultation, whether in creating an outcomes‑based system there were any objectives that were absent from the list in that Notice of Consultation. In our view, there is one significantly important objective absent from that list, and that is the goal of ensuring the ongoing and sustainable viability of Canadian broadcasters and Canadian producers in the system. This may sound like an industrial objective rather than a cultural one, but if we don’t focus on ensuring the continued existence, viability and success of Canadian broadcasters and Canadian producers, then there really won’t be any players in the system to support cultural expression. So, the future of Canadian broadcasters and producers needs to be added, in our view, as a specific outcome‑based focus of these proceedings.

7439 So, for Blue Ant, the bottom‑line message is that we are committed to investing in and creating television shows, and we are committed to monetizing those shows globally and bringing those profits back to Canada for the benefit of the Canadian economy, the Canadian industry and Canadian culture.

7440 But we are also asking the Commission: Please do not make our business harder than it is. Please do not make us pay more. Please do not make us pay money into a fund. And please let us use continue to make our contributions by investing in and making TV shows here in Canada.

7441 We would like to thank the Commission once more for this opportunity to present our thoughts today and we would be happy to attempt to answer questions that you might have. Thank you.

7442 THE CHAIRPERSON: Thank you so much to Blue Ant for being here today. Certainly, you've taken some innovative approaches. Thank you for sharing some of your secret thoughts with us in terms of how you have gone from tenant to landlord.

7443 I have some questions around sort of filling gaps because of some of the proposals that you've put forward, but perhaps we could just start with partnerships, because we've heard a lot about partnerships. We've certainly heard from the foreign online undertakings how important those partnerships are in Canada and how much weight we should put on those.

7444 You have partnerships with Canadian and foreign online undertakings. Can you talk to us a little bit about the importance of those?

7445 MR. MacMILLAN: Partnerships are absolutely critical and I think that both Mark and Jamie might want to wade in with some thoughts on that and perhaps even some examples.

7446 MR. BISHOP: Thank you and good morning.

7447 I think partnerships are actually critical to our success in Canada. That's not a new thing. That's something that I will say as ‑‑ before joining the Blue Ant team, I co‑founded a company 23 years ago called MarbleMedia. With my partner and I, we really built a strong business based in Canada on the production and distribution of content. And all of those projects that we produced were really about being able to make full Canadian 10‑out‑of‑10 content with partners from around the world investing in making that content.

7448 One of those most recent projects is actually a new series called Davey & Jonesie's Locker, which is actually a scripted comedy series, quite interestingly a full 10‑out‑of‑10 Canadian content production, co‑financed with Hulu in the US as a Hulu original and Amazon for both Canada and Australia as, again, an Amazon original for Canada. But of note, that particular example, full Canadian content production, full 10‑out‑of‑10, produced in Canada with rights retained for the rest of the world.

7449 Earlier this year in August, we merged our production and distribution business at MarbleMedia with Blue Ant Media in a really exciting venture of really coming together and bringing the opportunities to create, again, these global world‑class hits here in Canada. But the strength of that partnership, again, is really rooted in being able to attract other partners to work with us.

7450 One other note to mention is that last year 80 per cent at MarbleMedia, 80 per cent of our commissioning dollars came from the US. Of those, those were broadcasters and streamers. But I note every single one of those projects was a full Canadian content production and was fully owned by our company. It really creates an opportunity to, again, to partner internationally and to leverage those opportunities and make great content here at home.

7451 MR. SHOUELA: And I'll just ‑‑ good morning ‑‑ and I'll just echo what Mark said, taking a media lens to it. Partnerships have been critical to our success in every aspect. And if I think about the media side specifically, we partner with everybody. We partner with other Canadian broadcasters to co‑commission content. We have with APTN, with have with others all the time. We partner with Canadian distributors here for distribution and obviously for visibility on the traditional platform side.

7452 And where it comes to the foreign streamers, they have been critical partners for us, especially with our free streaming business that's been emerging. So we partner with Pluto here in Canada, Tubi, Samsung, Roku ‑‑ on distribution, on content. We've done that forever and it's really been critical for our success. We see it as one of the keys, I believe.

7453 THE CHAIRPERSON: Thank you so much for that.

7454 So getting to the question around where there are gaps, so you know, you've said where others see challenges and hardship, you see opportunity. And you know, you gave the example of Love Nature that, you know, has been quite successful.

7455 What about types of programming ‑‑ and I'm thinking local news, for example ‑‑ what about types of programming that don't lend themselves to what you've done, for example, with Love Nature? Like very kind of local content, community content that you can't just really package up and sell internationally?

7456 MR. MacMILLAN: That's true. And we figured in the TV world, much as in life, that you can't do everything. And having a business idea and a focused plan and trying to stick to one's knitting and do it well has a better chance of success than trying to do a bit of everything. So there are lots of things in the TV world that we don't do, including news.

7457 It is interesting to me that, look, news is one of the reasons why we need a Canadian broadcasting system. It's one of the reasons why it's important for Canadians to be able to consume TV through the lens of Canadian perspective. It's always been odd to me that news isn't part of PNI. Huh? Like if you talk about a program of national interest, it would be the news.

7458 And that is very hard to export. So you're right. Highly local programming, much of news is very difficult to export. And we are not the people to provide you with much useful insight in that except to underline of course the absolute essential role that news has to our broadcasting system and more importantly to Canadian society.

7459 THE CHAIRPERSON: Thank you for that. So part of the challenge is, you know, we are concerned about some of these gaps. And we've talked a lot about kind of market failure, about the gaps that may not be filled.

7460 So you know, part of your proposal is that online services should have the choice between a monetary contribution to a fund or via CPE, you know, that you should not be required to pay money into a fund. You know, you've talked as well about an aggregated fund and not having sort of this disaggregated model where there are very specific goal‑oriented funds. So with all of that, if we're not requiring companies to pay into a fund, how do we ensure that the content like local news, for example, continues to be made?

7461 MR. MacMILLAN: There's a handful of questions in that, so I'll try to remember them, and I may not, and my colleagues might also add in. But I'll maybe go in reverse order.

7462 In terms of in our July submission, we did refer just to the CMF. What we actually meant in that, we meant existing funds. We just said CMF then, but we actually think CMF or other existing funds. We just ‑‑ we're really trying to say we don't need to make new funds right now. So we sort of ‑‑ we could have been more specific and better word it in July. But so that's my reply to that part.

7463 But in terms of how do we make sure that news, for example, is supported if funds can't fully pay for it, not all of our social needs and social purposes can be or should be provided by private players in our society. That's probably why we have taxes, by the way. You know, and we're lucky to have a government that in important matters, including through the Department of Heritage, has made contributions or has created other rules to the system to support things that matter. You know, we have a Department of Finance, the Canada Tax Act. It's a very useful lever. We have other mechanisms ‑‑ interesting the success we read about the other day with Bell, CAT, and then Google. There are other aspects of how news can be supported apart from asking broadcast players who are not in the news business to help support that.

7464 So I would bring us back to the ‑‑ one of my thoughts is that private players in the system can't be and shouldn't be expected to be participating and contributing directly to every single solution, which doesn't mean that those solutions aren't needed, like the provision of local news. But there's more than one way to support them ‑‑ support news, I mean.

7465 THE CHAIRPERSON: Okay, thank you for that. I just have two more questions, because I know my colleagues have questions as well. You've talked a lot about the current regulatory burden. We've heard about that repeatedly. Can you just talk a little bit more about what the impact is of that regulatory burden on your business, on the broadcasting sector?

7466 MR. MacMILLAN: Sure. I'll ask Jamie to talk about this because he'll be happy to. And just to underline, we are not seeking a reduction in CPE. We like spending money on CPE.

7467 Jamie?

7468 MR. SHOUELA: Sure. So thank you for opening that line.

7469 For PNI for us, it really comes down to the nature of our channels. Our channels are mid‑size to small channels. PNI is very descriptive in that it's drama, kids, or documentary content. We are not big enough to commission drama. It sort of takes it off the table from that perspective. We are not in the kids business. We don't have platforms that support kids. And so because of that, we today run a series of documentary‑based channels and lifestyle and other more general entertainment channels.

7470 And the nature of hitting our PNI, we ‑‑ Blue Ant have what I believe is amongst the highest PNIs of the private broadcasters, at least that I'm aware of. We have a 13 and a half per cent PNI for our obligations today. And so just to hit that number, the problem today is that we are over‑commissioning documentary content to hit our PNI requirement and not to serve our audiences ultimately. We're being driven by regulation and making choices based on regulation, not audience desire.

7471 We want to make choices based on what our audiences want, both here in Canada and internationally. And so we're looking for some flexibility so we can create more lifestyle content, more reality content, other formats that our audiences want and our customers relate to, but ultimately our PNI doesn't allow us to today.

7472 So we like the streamers. The streamers have none of those requirements today. They create the content based on algorithms and what their audience are looking for. That is the right thing to be doing, ultimately, and we just want more flexibility to be able to create content that our audiences want.

7473 THE CHAIRPERSON: Thank you for that. I just have one final question before turning it over to my colleagues.

7474 You've said very respectfully that we have missed a goal in our consultation and that is the goal of ensuring the ongoing and sustainable viability of Canadian broadcasters and Canadian producers in the system.

7475 I can say unequivocally that we all want a healthy Canadian broadcasting industry. My question to you is how do we measure that?

7476 MR. MacMILLAN: And, thank you for the question. And it's not that we doubted the intention. But sometimes when one ‑‑ when I, at least, make a list of things to do, some of the most fundamental and most important things don't make the list because they are ‑‑ I just presume them to be the case. So it's sometimes useful to have even those overarching important goals listed there.

7477 Well, measure them. So, for example, when we talk about ‑‑ and Mark and Jamie and Astrid are probably going to want to chime in as well ‑‑ but one of the reasons why when we talk about the definition of what constitutes a Canadian program for these purposes, we talk about a program being produced by and owned by a Canadian producer. Not just a copyright being owned, which is completely irrelevant, but the actual economic value being owned and retained by the Canadian. That's one way how a production company can have ongoing revenue streams in future years and an ongoing connection out to the larger broadcasting industry internationally as opposed to being just paid for it, done, work for hire, and so on. So one of the reasons why we harp on that definition of Canadian programming is to help create the ongoing sustainability of Canadian producers.

7478 If, for example, we're worried if large contributions to funds or even CPE obligations from international streamers can ‑‑ all those monies might be used only for programs where Canadian creators, crew members, and yeah, actors worked on them, but the IP was not owned here, the distribution rights were not owned here, what would the role be for a Canadian broadcaster?

7479 When a dollar goes to ‑‑ when a Canadian dollar goes to a dollar five, and so the service industry isn't so viable as it is these days ‑‑ I've been around long enough to watch the dollar go up and down and see how things ebb and flow. When other conditions change, look, and when the next wave of technology change happens, we're not sure that everybody is going to be here in the same way that they are now. Thing do come and go.

7480 So you'd probably see it by the existence, the mere existence of ongoing Canadian production companies and Canadian broadcaster platforms that have the financial wherewithal, the marketing wherewithal, and the connection to their audiences that they are able daily or weekly to put out a new relevant product. But as they go out of business, as they lay off staff as they are these days, as they consolidate maybe into nothingness, as they pull out of local communities, those would all be very tangible examples of a reduction in the ongoing viability of broadcasting.

7481 But I'll shut up and invite Mark and Jamie to maybe add into this.

7482 MR. BISHOP: I'll just add to that. As Michael said and as I mentioned in the earlier question as well, it is doable to work with partners and ensure that Canadian producers can maintain ownership of that IP.

7483 And that IP is really critical, because that is really what we're talking about is the ability to tell Canadian stories where the value sits with Canadian companies, where the value in the production and in the ongoing participation moving forward in actually participating in those revenue streams and selling the content, as we do at Blue Ant. We represent all kinds of Canadian producers. We sell that content all around the world. We bring that money back to Canada; we share that money back with Canadian producers.

7484 But that is, again, all about a model of making sure the IP rests here. And for us, that is really the critical component to any part of the system is really making sure that it rests ‑‑ because that protects not just now, that protects the future. That protects a path to ensuring that Canadian creators can stay here in Canada, can own and control the content they're creating, and can really benefit from being able to share those stories with Canadians. Absence of IP resting here, we're not going to have an industry 10, 15 years from now.

7485 THE CHAIRPERSON: Thank you so much for that. Thank you for answering my questions.

7486 I will turn things over to Vice‑Chair Scott.

7487 VICE‑CHAIRPERSON SCOTT: Morning. So you came to us with a Canadian success story, which is always appreciated and nice to hear about. So specifically, your nature channel, Love Nature, so that's a success story that was achieved in a pretty difficult environment. Is that a repeatable model? Or has the environment changed so much that regulatory intervention is now necessary for that type of model to be employed? Like are you asking us to do something, or asking us to not do something?

7488 MR. MacMILLAN: Even though we were bragging about Love Nature in our remarks, we wouldn't want to leave you with the impression that it's not difficult out there. So this is a challenging industry. Digital disruption has really created a lot of upheaval. So even though we were very ‑‑ we are very proud to talk about Love Nature and our other activities, it's not to say it's not hard. But so just make sure I say that.

7489 Is it replicatable? This is a question we're asking ourselves aggressively now. And Jamie might want to add to this. We do have eight other channels that we're operating outside of Canada, in the US, throughout Europe, Lat. Am., much of Asia Pacific. They're not as big as Love Nature and they're newer and they currently have one revenue stream, not two. But we're working on that and we're seeing, so we hope very much that there is. These are not high‑priced drama channels. They're not cheap and cheerful either, but they're not, you know, two and a half million bucks an hour content.

7490 In the case of Love Nature, what actually made it happen when we decided to go from the tenant using ‑‑ just continuing with that metaphor ‑‑ the tenant to the landlord, we realized, gee, we need to invest a vast amount of effort, time, marketing, and capital into commissioning that annual slate of content of programming in order that we have it, we own it for the world, in order that we can convince 130 platforms in 145 countries to carry the darn thing. So what was required was capital.

7491 For us to have that capital meant that we needed to have a successful enough ongoing business spinning off enough cash every year to invest and reinvest and reinvest in programming and in marketing and so on.

7492 So it wasn't a regulatory fix that caused that in the first place. It was us dedicating resources into programming that actually finally broke through the barrier and got us carriage.

7493 But Jamie probably has more intelligent things to add.

7494 MR. SHOUELA: I think the question of is it repeatable, as Mike said, we think it is. But for us, it's about picking the lanes that we can compete in. Natural history was one genre that we saw travelled the world very well. The content's fairly evergreen. The translation is easy for animals as they travel around the world. So ultimately, that was one that we saw opportunity in. But there are others.

7495 But to Mike's point, we are thoughtful to try to pick the genres we, Blue Ant, can compete in for the size and scale we are in a global marketplace. We don't try to compete in scripted genres. Certainly not even against the larger Canadian broadcasters, let alone the global streamers. It's not a category we can compete in effectively. We think there are other genres.

7496 But part of our strategy is very tied to our Canadian cable specialty channel strategy. Most of the channels we started to operate around the world in the free streaming or FAST space that we operate in, to Mike's point, are cousins genre‑wise of our Canadian channels. So Love Nature is a Canadian cable channel here and an international FAST and pay TV channel.

7497 We run a channel here called T&E ‑‑ Travel & Escape, T&E. But ultimately, its focus is paranormal ghost content is what the focus of that channel is. We commission content here, CPE content, Canadian content for that channel and now think about its usage on a similar cousin platform we call Haunt TV right around the world.

7498 So the thematic alignment of our channels, it's the benefit, it's what we ‑‑ it's the thesis of our strategy of being Canadian‑based, having Canadian platforms to connect with Canadian audiences, but also finding use for them around the world, both for our own growing FAST platform distribution but also third‑party distribution sales and other partnerships. But leveraging those genres that we do in Canada are really a core part of that strategy.

7499 MS. ZIMMER: And just coming back to your question, which was, you know, what are you asking us to do or not to do to help, it is repeatable and we'd like to repeat that business model. I mean, it goes kind of back to Mike's opening remarks is we need the capital to invest in programming. That is what we need to do to pursue this model. So the idea is please don't make us pay into a fund so that we have that capital so that we can make shows. And also please allow us flexibility in the shows that we do make with that capital, going back to the PNI point. So I think, you know, just sort of going back to your question is I think it's really mainly those two things.

7500 VICE‑CHAIRPERSON SCOTT: Great. Thanks very much. I think those strategic insights on how you make decisions and what works are very useful to have on record. Thank you.

7501 THE CHAIRPERSON: Thank you so much. Let's go to Commissioner Levy next.

7502 COMMISSIONER LEVY: Welcome. Do you or your producers ever access any of the funds, the Canada Media Fund or the Independent Production Fund or any of the funds that are available in Canada right now?

7503 MR. MacMILLAN: Yes and yes and yes, but Jamie and Mark, I think, have things to say.

7504 MR. SHOUELA: Sure, this ‑‑ absolutely. We work with our production partners. And I'll let Mark take it. Both our in‑house now, our Blue Ant Studios production that Mark represents, but many third‑party Canadian producers as well. We receive an envelope from the CMF to help support that production. It's critical for us to get stuff greenlit and get it off the ground.

7505 We certainly have concerns. We've been vocal to the CMF about how allocations are made. We'd like to get a larger share. We think we should have a larger share of that envelope as it exists today. And there's different systemic reasons why we haven't qualified, and that's stuff we've addressed and are addressing with the CMF. But it's an important support engine for us to get shows off the ground. And I'll pass it to Mark.

7506 COMMISSIONER LEVY: So it would be helpful if there was more money in those funds?

7507 MR. SHOUELA: Absolutely.

7508 COMMISSIONER LEVY: Okay.

7509 MarbleMedia was one of the very first to take advantage of the Internet, as far as I recall, going back, way back. And now you've merged with a company that is taking us from the Internet ‑‑ well, is actually reintroducing what could be called traditional television back to the Internet in terms of FAST channels. So you've got a partnership now with Pluto TV that you have with Paramount. Can you tell us about the value to Canadian broadcasters, how they might benefit from featuring channels on the FAST channel track?

7510 MR. SHOUELA: Sure, I'm happy to. Pluto, like other US distribution platforms ‑‑ Roku, Samsung, Tubi, and others that have arrived here in Canada ‑‑ are distribution partners for us. They offer the same distribution value as Rogers and Bell and Eastlink have traditionally in the ecosystem, but they're allowing us to connect with new audiences via streaming and via free streaming.

7511 So they today carry numerous of ‑‑ three, four of our Canadian free streaming channels, and they've been a great partner for us to give us that distribution. And we share advertising off of that platform together. That's the basic model. It's a hundred per cent advertising‑driven. There's no subscription fee, as there is the dual revenue in traditional cable. And we and the specific platform share advertising revenue. That's the model.

7512 COMMISSIONER LEVY: Thank you. I look forward to your participation in phase two of these proceedings where we can really drill down into some of that. Thank you.

7513 THE CHAIRPERSON: That will be a totally uncontroversial phase. Okay.

7514 Let's go to Vice‑Chair Barin next. Thank you.

7515 VICE‑CHAIRPERSON BARIN: Thank you and welcome. I have two quick questions for you.

7516 First one touches on what Commissioner Levy started to broach on which is the partnership that you have with Paramount. So they appeared before us and I learned that the word “partnership” has multiple meanings, and the word “content” has multiple meanings. So I take it that your partnership with Paramount is a carriage deal. They mentioned content partnerships with Canadian companies, and I'm just wondering if it extends beyond that or if it is truly just a carriage deal?

7517 MR. SHOUELA: Today it's a carriage deal. But we're always looking to build on that. And I think Mark might want to think about different ways we work with Paramount and others as well. But today, where it comes to our channels on the Pluto platform that they represent, it's a distribution partnership.

7518 VICE‑CHAIRPERSON BARIN: Okay, so what would your view be? They're asking us to count this type of partnership as a contribution to the Canadian system. What would your view be?

7519 MR. SHOUELA: As much as we appreciate that distribution partnership, it's a different sort of ‑‑ it's the same as maybe marketing or carriage as we get from other platforms. It's not an investment in content, not the way that partnership is drafted or set up today.

7520 MR. MacMILLAN: We share ad revenue.

7521 VICE‑CHAIRPERSON BARIN: Okay. So ‑‑

7522 MR. BISHOP: And I'll just add on the content side as well, too, we know from conversations we’ve had on the studio side with them they have a real commitment to wanting to develop and produce Canadian content here in Canada with Canadian partners, so again, we look forward to that and look forward to seeing the potential outcome of that moving forward and being able to partner with them to produce that Canadian content.

7523 And we know that they are open to different models, so when I was talking before about the idea of different streamers potentially collaborating together on creating content, there’s a real openness, you know, with that team to creating content and we look forward to those opportunities.

7524 VICE‑CHAIRPERSON BARIN: Okay. Thank you.

7525 Next question is more a devil's advocate type, and it touches on what you mention in your opening remarks about how viability should potentially be one of the objectives of the Broadcasting Act.

7526 So Mr. MacMillan, you’ve been in the industry a long time. You’ve seen the Commission’s approach go from structural separation of carriage and content to vertical integration of those two elements, and now I see your landlord model is kind of integrating up the value chain from the producer to the broadcasting side.

7527 So the Broadcasting Act, as you mentioned, first and foremost is about cultural policy. And in the world where Canadian broadcasters were the gatekeepers of access to Canadian content, the beneficiaries were ultimately the producers, but the Canadian broadcasters had a very specific role in ensuring that the content got to Canadians.

7528 So now Canadian broadcasters are no longer the gatekeepers. We have Canadian broadcasters and we have foreign online streamers.

7529 So when you say that we should focus on the viability of Canadian broadcasters, what is your argument for putting that position forward?

7530 MR. MacMILLAN: That's a complex question and I'll try to come at it in two different ways, if I may.

7531 The first part was you’re quite right that, historically, Canadian broadcasters were sort of the gatekeepers and they had an especially privileged position. And for that, that privilege, they undertook all sorts of obligations to the system, to give Canadian programming a priority of place, to spend, to do all the things that we know about.

7532 Today, anybody can get a licence to be a Canadian broadcaster. In fact, the Commission’s new rules oblige it to issue a licence for a Canadian‑owned company who applies, unlike the old days where you had to, you know, get genre exclusivity or whatever it was. So it’s really easy to get a Canadian broadcast licence if you’re a Canadian citizen.

7533 The hard part ‑‑ so unlike the old days, the hard part is having that channel carried or packaged or marketed in any way through the distributors, either the traditional cable companies or the new online carriers, you know, Pluto or whatever.

7534 And it’s interesting ‑‑ I’ll get to the other part of your question in a moment, but it’s interesting that that’s why, back in the day, we spoke ‑‑ because those broadcasters had a lot of power and today they don’t because it’s actually the carriers who can influence the marketing and the packaging and whether they’re carried or not or how they are. That’s why the notion of an independent producer where the word “independent” sought to show a separation between a producer who was not affiliated with a broadcaster, that was there the word “independent” was being applied. That is no longer a relevance if you’re going to have independent is the broadcaster or producer independent from the carrier who can actually place it, who can market it, who can bundle it, who can set the pricing and all that kind of stuff.

7535 So the word “independent” producer is a weird concept today and doesn’t reflect the change of gatekeeping that broadcasters had 10, 20, 30 years ago, number one.

7536 And that was part of your question, sort of, but the other part was, well, it’s not only Canadian broadcasters any more, which I think was the real punchline, and you’re darn right; it isn’t. There are, happily, you know, non‑Canadian broadcasters ‑‑ when I say “broadcasters”, we mean streamers, too. We’re just using the same word interchangeably. You’re right.

7537 And the non‑Canadian owned broadcasters, streamers operating in Canada are adding to the system. They’re not going away. This is what happens when the internet comes along and disrupts everything.

7538 Our point is that we hope that some Canadian broadcaster streamers will still exist in five years and that there will be a choice and the ecosystem won’t only be made of non‑Canadian broadcaster streamers. So we’re not trying to exclude them. We welcome them. But we think that the Commission should have as one of its goals that, amongst the non‑Canadian producers, amongst the non‑Canadian owned broadcaster streamers, there are still Canadian owned producers and broadcasters who most likely will still be ‑‑ if they’re successful, a greater chance of remaining here, paying tax dollars here, employing Canadians here and when the circumstances shift, as I mentioned in my reply to an earlier question, will still be able to be here and invest.

7539 But we’re not saying that they’re the only ones. It’s a mixed economy today which also reinforces my first comment about the fact that the word “independent” producers is now a misnomer.

7540 VICE‑CHAIRPERSON BARIN: Thank you for that, Mr. MacMillan.

7541 Back to the Chair.

7542 THE CHAIRPERSON: Thanks very much. Thanks, Vice‑Chair Barin.

7543 We will turn things back over to you for any concluding remarks.

7544 MR. MacMILLAN: Well, I'll put my microphone on.

7545 We look forward, by the way, to step 2 and step 3 of this process. We well understanding that step 2 should be wonderfully complex and even this conversation and the matters that you’re dealing with today are very complex. It’s a real interwoven tapestry of issues and so we realize that you have a challenging task in front of you and we really appreciate the chance to contribute our points of view and hope that it’s helpful.

7546 And just sort of reiterate the points that we were trying to make, we were saying that we don’t think that as part of this the existing Canadian broadcaster should be required to contribute anything extra into the system. We’re already stretch. No mandatory fund contributions in addition to or even instead of CPE. We want to begin ‑‑ be able to continue to contribute through CPE. I think we said that five times, so got that across.

7547 There is some urgency around the flexibility on PNI. Our PNI is shockingly high. It’s almost two‑thirds of our total Canadian content spend. It’s tying us in knots.

7548 And finally, and as the question came up a few minutes ago, we are proposing, respectfully, that the Commission add an additional goal, and that is the pursuit of the ongoing success and sustainability of Canadian producers and Canadian broadcasters, and if we put that objective in and if the Commission is able to craft decisions in pursuit of that goal, we think we’ll have a wonderful opportunity for the Canadian industry and for Canadian citizens.

7549 Thank you.

7550 THE CHAIRPERSON: Thank you so much to Blue Ant for being here and thank you for your presentation this morning.

7551 MR. MacMILLAN: Appreciate it.

7552 THE SECRETARY: Thank you.

7553 I will now ask WildBrain Ltd. to come to the presentation table.

‑‑‑ Pause

7554 THE SECRETARY: When you are ready, please introduce yourself and your colleague and you may begin.

Présentation

7555 MR. SCHERBA: Thank you.

7556 Good morning, Chairperson, Vice‑Chairs and Commissioners. Thank you for this opportunity to speak today.

7557 My name is Josh Scherba, and I am the President and CEO of WildBrain. I am joined by James Bishop, Executive Vice‑President and General Counsel with WildBrain.

7558 WildBrain firmly supports the equitable inclusion of online services, including foreign services, into the Canadian broadcasting system. These services should play a significant role in supporting Canadian programming, coexisting harmoniously with our Canadian production and broadcasting ecosystem.

7559 At WildBrain, our expertise is in children’s and family programing. Canadian children's and family programming has always been and should continue to be a cornerstone of the production and broadcasting ecosystem. It has demonstrated its cultural and economic value, achieved global success, and it is vital that the funding framework acknowledge and provide substantial support for content to serve this important audience.

7560 Before delving deeper, allow me to provide a brief overview of WildBrain and our role in this ecosystem.

7561 WildBrain is a Canadian company with a rich library of over 500 titles comprising approximately 13,000 half‑hour episodes, featuring some of the most beloved children’s and family properties globally. These include the iconic names Caillou, Degrassi, Peanuts, Strawberry Shortcake, Teletubbies, Johnny Test and Inspector Gadget, many of which originated under the Canadian content production system. Our operations are organized into three pillars.

7562 First, Content Creation. We develop and produce high‑quality live‑action and animated content for children and families in our award‑winning studios in Toronto and Vancouver, employing between 700 and 1,300 professionals depending on our production slate. We have produced original content for many of today’s most popular children’s and family shows. We focus on diverse, equitable and inclusive representation on screen and we are committed to ensuring that these principles are integrated throughout each stage of development and production. We place a premium on ensuring that all children have the opportunity to see themselves reflected on screen.

7563 Our second pillar is Audience Engagement, which covers all forms of distribution channels to reach children and families with our high quality and diverse content around the world. This includes leadership in both linear and digital distribution, with our network on YouTube surpassing lifetime views of one trillion minutes watched last year.

7564 In Canada, we own four linear broadcast channels, with Family Channel serving as our flagship, engaging Canadian kids and families with high‑quality programming for over 35 years. Between 2021 and 2024, WildBrain Television triggered more than 200 hours of original Canadian children’s content with total budgets of approximately 275 million. Online and broadcast distribution are related but distinct and our broadcast channels are an important part of the Canadian children’s programming market.

7565 The third business pillar is Global Licensing, where we manage consumer products and licensing activities on our own and third‑party content and brands through more than 20 offices worldwide, reaching over 150 countries with our content and brands.

7566 WildBrain is uniquely positioned, not only in Canada, but also globally, as the only kids’ and family entertainment company not associated with a major U.S. studio to have this comprehensive suite of in‑house expertise across content creation, audience engagement and global licensing. Echoing the comments of Shaw Rocket Fund, the historically robust broadcasting and funding system supporting the children’s production sector was critical in building the foundation for this global success.

7567 MR. BISHOP: This system enabled WildBrain to retain ownership of our productions and global rights which, in turn, allowed us to build an international presence and grow long‑term revenue streams. Today in the international industry, WildBrain is recognized as a top independent player.

7568 It is worthwhile highlighting here the important distinction between proprietary and service production. The service production industry is indeed a significant contributor to the Canadian economy. It creates jobs and provides valuable revenue streams for Canadian production companies. But ultimately, under the service model, more value is derived by the commissioner of the content as the owner of the intellectual property in the project than by the service producer. More often than not, such commissioners are non‑Canadian.

7569 In comparison, the creation of Canadian programs and ownership of intellectual property by Canadians as fostered by our current production and broadcasting system is critical for Canadian companies and creators. It allows us to build value in our own content and in companies that we own and operate so that we can continue to invest, take our own risks, create and grow.

7570 Continued investment in and ongoing control of our own stories will drive a resilient, dynamic and prosperous Canadian industry led by strong Canadian companies and creators. That future is only achievable if those companies and creators own and control their original intellectual property. The contribution and funding model should be designed to achieve this outcome.

7571 Now, turning to the equitable contribution from online services, WildBrain supports the Commission’s proposed approach to integrate online services into the Canadian broadcasting system starting with an initial base contribution. As a broadcaster, WildBrain is required to make material contributions to Canadian programming, including broadcasting 35 percent Canadian content on our children’s services and significant spending on Canadian content and programming of national interest.

7572 Other parties before the Panel have submitted that the initial base contribution be set at five percent of Canadian broadcasting revenue. We agree with this proposal. The initial step is important for the immediate funding challenges and the long‑term integration of online services into our broadcasting system.

7573 Regarding funding allocation, directing contributions to existing third‑party production funds is a reasonable approach. Contributions should primarily support existing funds like the Canada Media Fund and certified independent production funds such as the Shaw Rocket Fund. These funding bodies have proven expertise in Canadian production and the Canadian system.

7574 We have heard as well the strong call for more diversity and participation in the Canadian system, which we are also fully supportive of, and we think targeted funds can respond to that call.

7575 As mentioned, the ownership of intellectual property by Canadian producers and creators is the foundation of our industry's success, both domestically and internationally. For this reason, funding should be directed exclusively to Canadian‑owned productions.

7576 MR. SCHERBA: Within the different possible funds, there is a separate need for specific and substantial allocations to support children’s content. We heard earlier that the CMF has identified children's content as a priority, and we agree with that approach.

7577 Children’s programming deserves particular attention and care. It is important for numerous reasons, including the well‑being of our kids, the opportunities it offers to our creative talent, the success of Canadian children’s content globally and, absolutely, its reflection of Canadian culture and diversity.

7578 Notwithstanding the many global success stories in Canadian children’s content, the industry is currently contracting and faces significant challenges. These challenges include the limited availability of sources of financing for productions, both domestically and abroad, and the changing technologies and forms of entertainment competing for kids' attention. It is now more critical than ever to support a healthy domestic children’s production and broadcasting sector to ensure the presence of high‑quality and diverse Canadian programming for Canadian kids.

7579 By recognizing the cultural and economic value of Canadian children's and family programming and directing funding appropriately, we can ensure that our content industry remains vibrant, diverse and reflective of our Canadian identity.

7580 In closing, ensuring online services make an equitable contribution to the Canadian broadcasting system is necessary to sustain our content ecosystem. Therefore, we support the Commission's proposal to require an initial contribution from online services to support Canadian programming.

7581 This contribution should be designed to sustain the Canadian system by supporting Canadian‑owned productions. IP ownership is the foundation for a strong and thriving Canadian production and broadcasting industry.

7582 The funding framework should also include support to programming targeted to the children's and family audience. It's an important part of our culture in all of its diversity, and it's an area Canada has succeeded globally.

7583 Thank you for your attention, and we look forward to working together to foster a robust and sustainable future for our content and broadcasting industry.

7584 THE CHAIRPERSON: Thank you very much. Thank you to WildBrain for being here and for participating in the proceedings.

7585 We will start with Commissioner Levy.

7586 COMMISSIONER LEVY: Good morning and welcome.

7587 I guess I have a question off the top looking for your assessment for the worldwide demand for children’s programming. You’ve touched on it a little bit in your opening remarks, but I’d like to just dig a little deeper into what’s happened because it seems to me Canadian children’s programming went through, it seems, a golden age where there was lots of it being produced. As Shaw Rocket Fund mentioned before, that was largely instigated by the demand within Canada itself that production then went internationally. That’s all shifted and changed, but Canadian children’s content is still very highly valued. But what’s happened to the worldwide demand for children’s content?

7588 MR. SCHERBA: Sure. Thank you for the question.

7589 So as happens, demand ebbs and flows over time. I think what we certainly saw a significant uptick internationally as the streamers moved around the globe launching services in individual markets and having a need and demand for children’s content. There continues to ‑‑ the content continues to be valued on the service of these foreign entities, but the reality is that they ‑‑ there are some financial constraints that are happening on a larger level within the media industry.

7590 So we’ve seen challenges with Warner Discovery. Disney has announced cutbacks. And even Netflix has actually rebalanced the number of kids’ shows that they’re producing in any even year.

7591 So this happens from time to time. If ‑‑ I would say from a library standpoint, if you’re the owner of IP, you have the opportunity to sustain yourself during these times because you can continue to license content, which is lower cost for these services, rather than commissioning new, but in a moment right now, getting new content commissioned is a real challenge from foreign players.

7592 COMMISSIONER LEVY: So you ‑‑ how does WildBrain envision that additional funding such as specific envelopes for children’s content ‑‑ how would that have an impact on the growth and quality of Canada’s children’s programming if there isn’t the same level of demand? Like what existing funds could make a difference in that?

7593 MR. SCHERBA: So again, I would say that the demand goes up and down over time. I would also mention that some of the growth we’ve seen within the Canadian industry has been attributable to service work, which we welcome. Again, it’s great for the economy and it’s great for our sector, but it can only form a portion of a healthy ecosystem.

7594 Over time, the ‑‑ we’ve seen pressures on the existing broadcast market. Even for ourselves as a broadcaster here in Canada, our ‑‑ you know, our CMF envelope has diminished over time. Our revenues have declined as a broadcaster and, therefore, our CPE has declined so there’s been fewer dollars going back into original Canadian content which is owned and controlled by Canadians so having additional funds go into these existing ‑‑ these existing mechanisms to commission Canadian content would be a boost for a sustainable industry.

7595 You know, I would mention, too, that the service work does go up and down over time. There’s been a number of these cycles over the years that are kind of subject to global economic impacts.

7596 I know I’ve been in the industry long enough to have seen in 2001 there was a downturn, 2009 great recession there was another downturn. But having a sustainable domestic market that continues to fund content owned by Canadians allows us to continue to keep the talent we need to succeed in the long term and really allows these long‑term revenue streams that stabilize the industry as a whole.

7597 COMMISSIONER LEVY: So, if there was more money put into the Certified Independent Production Funds, for instance, how could they be restructured with the goals of doing what you’re after, which is to better support Canadian children’s programming?

7598 MR. SCHERBA: I think it’s having more funds for these ‑‑ for Canadian productions. So, having more dollars in the system will help fund more productions overall, therefore making Canadian owners of the IP healthier long‑term and creating a more sustainable environment over all.

7599 MR. BISHOP: If I may, we’re not suggesting a restructuring necessarily. We think the existing funds are capable of administering additional funds into the system and are well placed to allocate appropriately to the kids and family space. So, it’s not a significant change to how they’re existing ‑‑ operating.

7600 COMMISSIONER LEVY: So, are you looking at more production of Canadian children’s content, or are you looking at increased monies in the funds that can help to fill the gaps by inflation and the higher costs of production?

7601 MR. SCHERBA: Yeah, again, I would make the point that the funding within the CFM, for example, for children’s has gone down over time. Again, speaking from our experience as a broadcaster, our revenues have declined. So, our ability to keep our CPE level at the same number has been challenged. Similar to Blue Ant, we love spending CPE; we’re not asking for that to be reduced. That’s a really critical part of our business, but overall, there’s less funding in the system for original Canadian content for children and family, and these additional funds coming into the system would be a help.

7602 COMMISSIONER LEVY: And finally, I want to talk a little bit about the trends and how children access programming. I wonder if you could tell us ‑‑ elaborate on the distinctions between the demand for content by domestic broadcasters and foreign streaming services which are, of course, very handy for children. They’ve learned how to access that material; they make no distinction between what’s television and what’s streaming. How do you meet that challenge?

7603 MR. SCHERBA: Yeah, it’s a great question. We need to meet kids where they are, which is on lots of emerging platforms around the world. But it starts with telling great stories, making great content, and then ensuring that we’ve got innovative ways to get the content to audiences around the world. I referenced our digital distribution capacities at the top. We are a leader in fast distribution and no‑YouTube AVOD. We have significant partnerships in the U.S. on that front, which has really been an emerging form of consumption for kids. I also mentioned YouTube and, you know, that social platform is an important way to keep audiences connected with our IP so that they can then watch it in longer forms on different platforms. So, we need to be in all of these places, which adds to the complexity, but it starts with having a health system to fund the content in the first place.

7604 COMMISSIONER LEVY: And your ability to monetize in whatever way you can find. That’s been a challenge as well; right?

7605 MR. SCHERBA: Yeah, correct. I mean, it continues to evolve. Again, I mentioned YouTube as an important place where we have a relationship with our viewers, where they can see their characters in different forms, but it’s not a great monetization platform for content creators. It’s challenged. But building that engagement with an audience ‑‑ there are other ways that you can ultimately monetize, through licensing to other platforms or through the world of consumer products. There are other ways, once you foster this affection for your brand, to be able to monetize, but we have to be in all of these areas to succeed.

7606 COMMISSIONER LEVY: Thank you very much.

7607 MR. SCHERBA: Thank you.

7608 THE CHAIRPERSON: Thank you. Thank you, Commissioner Levy.

7609 Let’s go to Commissioner Naidoo.

7610 COMMISSIONER NAIDOO: Hi, there. Thanks for being here today. You highlighted the importance of ensuring a fair contribution and also a fair role from foreign services, emphasizing that while it may not be exactly identical to Canadian services, they should be equitable, in your view. Could you provide further insights into how this principle might work in practice? And it’s kind of a two‑pronged question; in addition to that, what recommendations do you propose for the Commission to thoroughly assess the unique circumstances of each group in relation to achieving the broadcasting policy objectives?

7611 MR. SCHERBA: Thank you. Well, I think it starts with this initial base contribution. You know, these services have been in our market for many years now, and it only makes sense that they contribute to the system. You know, we feel the primary objective of those dollars should be into Canadian programming, and again, I will speak to the virtues of IP ownership staying within Canada and building a long‑term, sustainable business. So, I think that’s where this starts, and from that perspective, I think that’s a pretty straightforward argument.

7612 I think this next phase ‑‑ ‘phase two’, as has been alluded to ‑‑ is going to get more complex, and we look forward to that discussion when we get there. And we appreciate the complexity that the Commission is going to face at that point, and we will be here with you to discuss at that time. But for right now, we think this initial contribution is the best place to start.

7613 COMMISSIONER NAIDOO: All right. Thank you very much for that.

7614 THE CHAIRPERSON: Thank you. Thank you, Commissioner Naidoo.

7615 Let’s go to our Vice‑Chair for Broadcasting.

7616 VICE‑CHAIRPERSON BARIN: Thank you. Welcome, WildBrain. So, we touched on the content production part with the funds. I’d like to ask you a question that’s more, I think, based on distribution; we can call it ‘partnerships’ but really it’s distribution. And you have spoken about your success, both domestically and internationally, here this morning. Now, you have a certain scale in the niche area of children’s programming, and I guess I’m interested to know to what extent that is an element of your success. But a second question ‑‑ in terms of what allows you to have successful carriage, both domestically and abroad, do you see any barriers for smaller broadcasters?

7617 MR. SCHERBA: Yeah, thank you for the question. So, yes, our scale is important. When I was speaking to our success earlier, it was intended to brag. It was to really actually highlight how the Canadian system has allowed the growth of a company like ours, and that’s been through sustained support for Canadian content that, you know, one brick at a time, one show at a time we built a slate that we distributed internationally, we saw success, reinvested, grew the business, reinvested, grew the business ‑‑ is to where we landed today with the scale that we have. And yes, it is important, but I think the continuing support of the Canadian system is really important for the next WildBrain, for the next company that starts as an independent with one show and can build their business and reinvest over time. So, I would say that to the first part of your question.

7618 In terms of the second part of your question, yeah, look, we are ‑‑ on the Canadian broadcasting side, we’re in a world of giants, and we’re a relatively small independent as a Canadian broadcaster. And so, we do look to the Commission for continued support of independent broadcasters because there are challenges that we all collectively face as an indy.

7619 VICE‑CHAIRPERSON BARIN: Thank you very much. Back to the Chair.

7620 THE CHAIRPERSON: Thank you. Thank you, Vice‑Chair Barin.

7621 So, at this point, we would just like to turn it back over to you for any concluding thoughts.

7622 MR. SCHERBA: Well, thank you again for inviting us and allowing us to participate. We look forward to future hearings as well. And it really ‑‑ in conclusion, it’s just a couple of points that I wanted to reiterate. First is, again, the importance of children’s and family content. It’s a great story of Canadian export success, and we want to ensure that the foundation of that continues on so that we can have future success. And again, the importance of Canadian content being owned by Canadians. And not just ‑‑ it’s not about copyright, but it’s about the ongoing economics of Canadian content being held by Canadians is critical for a sustained system.

7623 Thank you very much.

7624 THE CHAIRPERSON: Thank you very much.

7625 LA SECRÉTAIRE : Merci beaucoup.

7626 Nous entendrons maintenant la présentation... J'aimerais que le Conseil provincial du secteur des communications du Syndicat canadien de la fonction publique s'avance à la table, s'il vous plaît.

‑‑‑ Pause

7627 LA SECRÉTAIRE : Lorsque vous êtes prêt, s'il vous plaît vous présenter et présenter vos collègues, et vous pouvez débuter.

Présentation

7628 M. VALIN‑LANDRY : Madame la Présidente, Madame la Vice‑présidente, Monsieur le Vice‑président, Mesdames les Conseillères, membres du personnel, merci de nous recevoir.

7629 Je m’appelle Tulsa Valin‑Landry et je suis le président du Conseil provincial du secteur des communications du Syndicat canadien de la fonction publique.

7630 Je suis accompagné, à ma droite, de madame Nathalie Blais, conseillère à la recherche au SCFP; à ma gauche, de monsieur Carl Beaudoin, vice‑président radio‑télé du CPSC, et de maître Steve Bargoné, conseiller syndical et coordonnateur du secteur des communications du SCFP‑Québec.

7631 Le CPSC représente des travailleuses et travailleurs qui sont en grande majorité à l’emploi de radiodiffuseurs ayant des activités traditionnelles et en ligne au Québec. Nos membres sont notamment représentés chez Groupe TVA, Bell Média, Global, RNC Media, Vidéotron et Cogeco.

7632 Le CPSC offre au CRTC une perspective unique sur le marché de langue française du Québec. Il réclame depuis des années l’inclusion des entreprises en ligne étrangères dans la réglementation canadienne afin qu’elles soient traitées équitablement par rapport aux diffuseurs canadiens.

7633 Nous saluons la volonté du Conseil de procéder par étapes à la révision réglementaire afin d’imposer rapidement des contributions initiales à ces entreprises qui n’ont eu aucune obligation réglementaire à acquitter depuis leur entrée dans le marché canadien. Il est plus que temps pour les entreprises en ligne multinationales qui font des affaires ici de contribuer à l’atteinte des objectifs de la politique canadienne de radiodiffusion, à l’instar des radiodiffuseurs traditionnels.

7634 Nous nous opposons fermement à toutes les positions ayant pour objectif de retarder la mise en place de la Phase 1 du cadre réglementaire prévoyant imposer des conditions initiales de base aux entreprises en ligne.

7635 Le Conseil a été mandaté par le parlement pour réglementer et surveiller tous les aspects du système canadien de radiodiffusion, y compris les entreprises en ligne étrangères exploitées au Canada. Il doit s’approprier ce nouveau pouvoir afin de mettre en place une réglementation juste et équitable permettant de réaliser les objectifs de la Loi, et ce, au bénéfice des Canadiennes et des Canadiens.

7636 Au cours des dix dernières années, les diffuseurs en ligne ont pris de l’expansion de façon fulgurante au Canada. Leurs revenus de radiodiffusion provenant des abonnements canadiens ont connu une croissance estimée à près de 500 pour cent depuis 2013.

7637 Pendant la même période, les revenus de la télévision et des EDR canadiennes réglementées ont baissé de 13 pour cent en raison du changement des habitudes de consommation de la télévision et de la baisse des abonnements au câble. Les entreprises en ligne comptent maintenant pour le tiers des revenus totaux de radiodiffusion audiovisuelle au Canada.

7638 Ces quelques données montrent à quel point il est essentiel de commencer à faire contribuer les diffuseurs en ligne au système canadien de radiodiffusion dès maintenant. Sans ces contributions, la mise en œuvre de certains objectifs de la Loi sera compromise.

7639 C’est le cas en information, où la diversité des sources de nouvelles, le reflet local et de nombreux emplois sont menacés par les demandes de révision de licences de Bell Média et Québecor Média. Les deux radiodiffuseurs souhaitent la disparition de toutes leurs obligations en matière de reflet local à la télévision en raison de la baisse de leurs revenus publicitaires. Or, depuis le dépôt des interventions initiales dans le cadre du processus actuel, la situation s’est encore détériorée.

7640 À la fin août, Québecor a annoncé la fermeture du canal communautaire MAtv à Montréal et a remercié 27 de ses travailleuses et travailleurs pour transférer le financement de Vidéotron vers les nouvelles locales produites par TVA.

7641 Cela n’a pas empêché le Groupe TVA d’annoncer, au début du mois de novembre, le licenciement de 547 personnes œuvrant majoritairement en production de divertissement et de nouvelles locales. Ainsi, dès le 22 février 2024 :

7642 ‑ toutes les équipes internes de production d’émissions de divertissement seront abolies et le travail transféré à des producteurs indépendants;

7643 ‑ entre 70 et 80 pour cent du personnel des stations régionales sera remercié à Sherbrooke, Trois‑Rivières, Rimouski et Saguenay;

7644 ‑ la production des bulletins de nouvelles locales de ces stations sera centralisée à Québec, car pratiquement tous les postes techniques et de chefs d’antenne en région seront supprimés.

7645 Ces compressions s’ajoutent à la disparition de 140 postes au printemps chez TVA.

7646 Bell Média, qui a licencié 1300 personnes en juin et qui a dit la semaine dernière vouloir continuer à faire de l’information locale, refuse de combler les deux seuls postes de journalistes de ses stations de radio à Gatineau. Le travail est effectué par des journalistes d’autres régions, principalement de Montréal.

7647 En septembre, Corus a gelé l’embauche ainsi que les dépenses de l’entreprise. Puis, en début de semaine, sa filiale Global a effectué des compressions dans l’équipe des nouvelles de l’émission du matin à Montréal : trois personnes perdent leurs emplois.

7648 Mardi, Cogeco a affirmé que des centaines de stations de radio pourraient fermer et des milliers d’emplois être supprimés en raison de la baisse des revenus publicitaires.

7649 Tous ces exemples mettent en péril la production de nouvelles locales originales par des radiodiffuseurs privés. Sans une intervention rapide du Conseil, il est possible que ces diffuseurs quittent les régions à court ou moyen terme, ce qui ne laisserait que la Société Radio‑Canada pour offrir des nouvelles locales à l’extérieur des grands centres. Cela priverait les citoyennes et citoyens d’une diversité d’informations fiables contribuant au maintien de la démocratie canadienne.

7650 Le CPSC estime que les contributions initiales de base des entreprises en ligne devraient aller en priorité à un fonds pour les nouvelles locales et communautaires, ainsi qu’à des fonds visant l’intérêt public, comme le Fonds pour la participation à la radiodiffusion.

7651 Le Fonds pour les nouvelles locales et communautaires offrirait du financement à toutes les stations de radio et de télévision commerciales, ainsi qu’aux stations et canaux communautaires produisant des nouvelles locales ou régionales.

7652 Les radiodiffuseurs n’ont droit à aucun financement réglementaire pour les nouvelles locales, hormis le Fonds pour les nouvelles locales indépendantes et les sommes provenant des canaux communautaires des EDR dans les groupes intégrés verticalement. Cela n’est plus suffisant dans un contexte de revenus décroissants où, en plus, Corus demande à accéder au FNLI depuis la transaction Rogers‑Shaw.

7653 Le Fonds pour les nouvelles locales et communautaires devrait toutefois comporter des conditions strictes, notamment le respect des conditions de service relatives aux nouvelles et le maintien ou l’augmentation du personnel dédié à l’information. Un mécanisme devrait également être mis en place afin que les bénéficiaires actuels du FNLI ne soient pas désavantagés par la formule de calcul en raison de leur taille.

7654 Afin de limiter les frais de gestion, nous proposons que ce soit l’Association canadienne des radiodiffuseurs qui en soit responsable. C’est d’ailleurs déjà l’ACR qui administre le FNLI.

7655 Seules les entreprises en ligne étrangères et les diffuseurs en ligne canadiens qui ne sont pas affiliés à un groupe de radiodiffusion auraient à y contribuer. Le même principe s’appliquerait à toute autre contribution de base initiale afin de rééquilibrer le fardeau financier à l’intérieur du système canadien de radiodiffusion.

7656 Le Fonds pour les nouvelles locales et communautaires ne pourrait financer plus de 49 pour cent des dépenses de nouvelles locales afin de préserver le caractère canadien du système et l’indépendance des radiodiffuseurs en matière de journalisme.

7657 Pour conclure, il est minuit moins une. Le Conseil doit rapidement déterminer et mettre en place les contributions de base des entreprises en ligne afin de :

7658 ‑ permettre à la télévision communautaire de remplir sa nouvelle mission et renverser les licenciements récents chez MAtv;

7659 ‑ éviter l’abolition de 547 postes chez TVA et la centralisation accrue de la production d’information locale;

7660 ‑ garantir la pérennité des nouvelles locales, sauvegarder les stations régionales, et renforcer la structure culturelle, politique, sociale et économique du Canada; et

7661 ‑ maintenir une diversité de sources d'information afin de préserver la démocratie canadienne dont nous sommes tous si fiers.

7662 Merci de votre attention. Il nous fera plaisir de répondre à vos questions.

7663 LA PRÉSIDENTE : Merci beaucoup pour votre présentation et aussi merci pour les chiffres que vous avez partagés sur l'écran.

7664 Alors, on va commencer avec notre vice‑présidente de la Radiodiffusion, madame Barin.

7665 VICE‑PRÉSIDENTE BARIN : Merci, Madame la Présidente.

7666 Bienvenue au CPSC. Vous avez parlé beaucoup de la situation des nouvelles et la production des nouvelles par les radiodiffuseurs québécois et particuliers en région. Alors, c'est là où je vais commencer mes questions.

7667 Alors, advenant que les contributions de base soient uniquement dirigées vers les fonds pour l'instant, quels fonds devraient être visés et dans quelle proportion si vous considérez qu'il existe un fonds de nouvelles tel que vous le proposez? Alors, quelles seraient les proportions de la contribution de base qui irait à chaque fonds?

7668 M. VALIN‑LANDRY : Bien, finalement, le fonds serait disponible autant pour la télévision et la radio. On mettrait 70 pour cent pour la télévision et 30 pour cent pour la radio. Ensuite, il y aurait des subdivisions. Je laisse ma collègue Nathalie y aller.

7669 MME BLAIS : Cette idée de consacrer 30 pour cent à la radio et 70 pour cent à la télé, ça vient des parts de revenus actuels de chacun des sous‑secteurs, et ce qu'on aimerait c'est que ce fonds‑là ait une comptabilité distincte dans trois volets : donc, un premier volet qui serait pour les entreprises intégrées verticalement qui produisent de l'information; un second pour les entreprises indépendantes; et un troisième pour les entreprises communautaires, ça fait que les télés communautaires.

7670 Parce qu'on veut s'assurer que les acteurs indépendants ne seront pas désavantagés par la formule qui va être retenue si celle‑ci est basée sur les revenus investis l'année précédente, comme c'est le cas présentement avec le FNLI.

7671 Si on intégrait, par exemple, Global dans le FNLI présentement, il y aurait 15 stations qui s'ajouteraient aux 19 bénéficiaires actuels, et même sans la formule de calcul, on peut voir très facilement qu'on se retrouverait avec des contributions du FNLI qui passeraient d'un million à peu près par station en moyenne à 500 000.

7672 Donc, on veut éviter ça, mais on souhaite également que les radiodiffuseurs intégrés verticalement, qui ont pratiquement tous demandé à diminuer leurs obligations en information locale, puissent avoir un certain soutien de ce côté‑là pour rééquilibrer les règles du jeu.

7673 VICE‑PRÉSIDENTE BARIN : O.K., parfait. Alors, ce fonds, qui serait séparé du FNLI, soutiendrait les nouvelles locales et régionales, à la fois des stations privées et des stations communautaires...

7674 MME BLAIS : Celles qui en font.

7675 VICE‑PRÉSIDENTE BARIN : Pardon?

7676 MME BLAIS : Pour celles qui en font, effectivement là, parce qu'il y en a qui axe leur programmation là‑dessus, particulièrement dans des régions où on a des déserts d'information.

7677 Donc, vous avez entendu cette semaine les gens de Vaudreuil‑Soulanges, par exemple. C'est un secteur où la télé locale de Montréal offre très, très peu de couverture. C'est uniquement lorsqu'il y a un très grand événement qu'on va se déplacer jusque là. Donc, ils remplissent vraiment une mission importante, et il y a des objectifs de la Loi qui sont beaucoup plus précis pour la télé communautaire maintenant. Donc, on pense que, en raison de cela, il faut s'assurer qu'on puisse également les soutenir pour la couverture hyperlocale.

7678 VICE‑PRÉSIDENTE BARIN : Parfait. Alors, dans quelles proportions vous voyez que ce fonds serait alloué entre les stations privées et les stations communautaires?

7679 MME BLAIS : On n'a pas fait de calcul. Je pense que vous allez avoir une bien meilleure vue d'ensemble que celle qu'on a.

7680 Mais présentement, il y a à peu près 70 stations, si je me souviens bien de mémoire, à peu près 70 stations commerciales de télévision si on parle uniquement de la télé, et il y a une vingtaine d'indépendants. En fait, il y aurait 35 indépendants avec Corus. Excusez‑moi, je pense que ça serait plutôt 60 stations commerciales, avec une trentaine d'indépendantes.

7681 Mais pour les stations communautaires, je n'ai pas fait le détail. Je n'ai pas le détail du nombre de stations qu'il faudrait desservir. Donc, c'est là où je ne peux pas vous donner de chiffre.

7682 VICE‑PRÉSIDENTE BARIN : Alors, j'ai entendu que votre proposition était basée sur des proportions qui reflètent des revenus qui proviennent de chaque secteur. Alors, pour le secteur communautaire, est‑ce que c'est encore cette même... Je sais que vous n'avez...

7683 MME BLAIS : Oui.

7684 VICE‑PRÉSIDENTE BARIN : ...pas fait de calcul, mais c'est la même méthodologie?

7685 MME BLAIS : Oui, exactement.

7686 VICE‑PRÉSIDENTE BARIN : Le secteur communautaire ne génère pas beaucoup de revenus.

7687 MME BLAIS : Oui, effectivement. On ne pourrait pas aller du côté des revenus pour le communautaire. Je pense que c'est plus l'intérêt public dans ce cas‑là qui devrait guider votre réflexion.

7688 VICE‑PRÉSIDENTE BARIN : C'est bien. Merci beaucoup.

7689 Alors, on parle des fonds de production indépendante, et certains intervenants ont proposé que la politique sur les fonds de production indépendants certifiés soit revue pour ajouter le critère qui vise à ce que les droits de propriété intellectuelle des productions qui sont éligibles au financement soient détenus par les producteurs canadiens. Que pensez‑vous de cette proposition?

7690 MME BLAIS : On n'a pas fait de réflexion collective sur cet aspect des choses, mais je comprends l'intention des groupes qui demandent ça. En fait, pour s'assurer que la production qu'on fait ici et qu'on finance puisse avoir un avenir, dans le fond que ce soit les Canadiens qui soient détenteurs des droits, ça permet ensuite de vendre ces émissions‑là, et je comprends tout à fait l'intérêt commercial derrière ça, et même l'intérêt culturel. Je pense que c'est une question aussi de souveraineté culturelle. Donc, ce n'est pas une proposition à laquelle on s'objecte.

7691 VICE‑PRÉSIDENTE BARIN : C'est bien. Merci beaucoup.

7692 J'ai une dernière question. C'est plutôt de clarifier votre proposition, celle qui était dans votre intervention écrite, où vous proposez que les contributions soient constituées de dépenses en émissions canadiennes directes, en plus de contributions à des fonds de production. Alors, est‑ce que vous pouvez élaborer sur les proportions ou comment vous voyez que dans la contribution initiale on ferait cette répartition?

7693 MME BLAIS : En fait, je vous dirais que la réflexion a un peu évolué depuis. Compte tenu de l'urgence de la situation et des événements de l'automne qui ont fait en sorte que, dans le fond, tout l'univers de l'information régionale au Québec risque d'être bouleversé à assez brève échéance, on n'est pas fermés à ce qu'il y ait une partie des contributions initiales de base qui aillent à d'autres fonds.

7694 Mais on limiterait les contributions initiales de base à des fonds... à un fonds pour les nouvelles locales et communautaires, et peut‑être à d'autres fonds, si vous le jugez indiqué, comme les fonds d'intérêt public et aussi les fonds qui s'adressent aux communautés en quête d'équité qui ne sont peut‑être pas assez bien servies actuellement par le système.

7695 Et on préférerait que ce soit uniquement des contributions monétaires à l'intérieur des fonds présentement et que, en Phase 2, vous puissiez alors déterminer... une fois que la définition du contenu canadien sera déterminée que vous puissiez déterminer les contributions en matière de dépenses en émissions canadiennes.

7696 VICE‑PRÉSIDENTE BARIN : C'est là où je m'en venais avec la question. Alors, merci beaucoup.

7697 Ça fait le tour de mes questions. Merci beaucoup. Je repasse la parole à la présidente.

7698 LA PRÉSIDENTE : Merci beaucoup. Merci, Madame la Vice‑présidente.

7699 On va continuer avec notre collègue la conseillère Levy. Merci.

7700 CONSEILLÈRE LEVY : Désolée, ma facilité en français n'est pas suffisante. Alors, je pose une question en anglais, s'il vous plaît.

7701 You believe that online undertakings should contribute to the fund supporting local news. However, the online undertakings that don't offer this type of content, which is most of them, including Paramount, believe they shouldn't have to contribute to such a fund if they don't offer news content and if they focus on entertainment content instead. In their view, while the Broadcasting Act requires the system to support news and information, the responsibility for supporting this type of content lies with the system as a whole, not with each individual element of the system.

7702 How do you respond to these intervenors?

7703 MME BLAIS : Concernant les entreprises en ligne qui ne veulent pas contribuer à un fonds spécifique aux nouvelles locales, je pense, en tout respect, que c'est plutôt là où... Parce qu'il y a des entreprises en ligne qui vous ont dit : « Nous ne voulons pas contribuer à un fonds, à aucun fonds parce que nous ne voulons pas financer nos concurrents. » Je commence par là.

7704 Donc, si on leur demande de contribuer à des fonds de production indépendants certifiés, par exemple, au FMC, ils vont avoir à investir dans des émissions de leurs concurrents, alors que si, pour une première étape, vous leur demandez des contributions de base dans un fonds pour les nouvelles locales et communautaires, ce n'est pas de la programmation que ces entreprises produisent, en majorité, et donc, ça ne favoriserait pas leurs concurrents, mais ça favoriserait vraiment l'intérêt public et ça permettrait d'équilibrer un peu le fardeau des contributions.

7705 La deuxième partie de votre question, je suis désolée, j'ai un peu oublié. Est‑ce que c'est possible de me rappeler la mémoire?

7706 COMMISSIONER LEVY: So, essentially you're saying they don't want to contribute to any fund because, on the one hand, they say they don't to contribute to competitors; on the other hand, if it's not within their sphere of content, they don't want to contribute to that either. So even in areas where they don't have direct competition, they don't want to contribute.

7707 That paints a certain picture, certainly, and I guess it goes to the sectioning and the siloing of what they want to contribute to the Canadian system. Should they be allowed to pick and choose, cherry‑pick the areas in which they would like to contribute?

7708 MME BLAIS : Absolument pas. Nous pensons que c'est le rôle du Conseil vraiment de déterminer ça. Vous avez une mission de mettre en œuvre les objectifs de la Loi, et je comprends que, avec la nouvelle version de cette Loi, il y a énormément d'objectifs concurrents, divergents. Certains sont convergents aussi. C'est un travail très important que vous aurez à faire, mais je voyais une voie de passage en imposant aux entreprises en ligne des contributions pour l'information puisque ce n'est pas un genre dans lequel ces entreprises‑là investissent.

7709 Et ça permet également de maintenir notre identité nationale, une souveraineté culturelle. Ça permet de renforcer aussi les régions, parce que je dois avouer ‑‑ puis je pense que mes collègues de TVA pourraient peut‑être renchérir là‑dessus ‑‑ il y a eu énormément de support pour les stations locales en région que les gens vont voir disparaître, et ils ne s'imaginent pas vraiment vivre sans avoir un reflet de leur réalité par ces stations.

7710 Carl, est‑ce que tu veux ajouter?

7711 M. BEAUDOIN : Bonjour. En fait, outre mes fonctions de vice‑président radio‑télé au sein du CPSC, je suis également président du Syndicat des employés de TVA.

7712 Québecor avait déclaré lors de sa comparution devant vous, entre autres le 20 novembre dernier, que TVA était dans ses derniers retranchements, entre autres, là. Pour moi, une licence ce n'est pas juste un droit, ce n'est pas seulement un droit pour faire des affaires, c'est un privilège. Ça vient aussi avec des obligations et des responsabilités.

7713 L'information locale, pour nous, c'est un poumon de la démocratie, particulièrement en région, et ces citoyens‑là en région ont vraiment l'impression d'être des citoyens seconde zone actuellement.

7714 Comme ma collègue Nathalie disait, des rassemblements ont eu lieu dans plusieurs villes du Québec pour sonner l'alarme de la perte de ces sources d'information fiables, rappelons‑le, dans un contexte pas évident aujourd'hui où il y a beaucoup de désinformation.

7715 Ça fait que laisser des grands groupes comme Québecor amputer ce poumon, entre autres, puis les autres businessmen qui iront peut‑être dans le même sens pour suivre le chemin, ça pourrait avoir un impact très négatif, malheureusement, puis sans ce poumon‑là, la démocratie, elle va commencer à s'éteindre, particulièrement en région. On ne peut pas accepter ça, puis je pense que vous, vous avez le pouvoir d'empêcher ça.

7716 Puis je peux vous affirmer ce matin, parce qu'on avait parlé aussi de déréglementation là‑dedans, que ce n'est vraiment pas la solution à envisager pour nous. Je ne serais pas ici devant vous, entre autres, si ce n'était pas des décisions antérieures que le CRTC a prises par le passé, entre autres.

7717 Voilà! Tu peux conclure.

7718 MME BLAIS : Est‑ce que je peux ajouter simplement que ce à quoi Carl vient de faire allusion, c'est que, avant, au début des années 2000, on en était à trois heures et quelque de programmation locale dans chaque station régionale, et on voyait la disparition de ces stations‑là arrivée, et ça pris plusieurs interventions, mais le Conseil a finalement augmenté la programmation locale à un cinq heures dans le marché de langue française, ce qui a permis vraiment de soutenir l'information qui est offerte en région et aussi les emplois que ça permet de créer.

7719 CONSEILLÈRE LEVY : Merci beaucoup.

7720 LA PRÉSIDENTE : Merci, Conseillère Levy.

7721 Alors, on continue avec la dernière question avec notre vice‑président des Télécommunications. Merci.

7722 VICE‑PRÉSIDENT SCOTT : Bonjour et bienvenue. Comme la présidente, j'apprécie toujours les présentateurs qui partagent les données. Alors, merci pour ça.

7723 On a entendu de certains radiodiffuseurs que les besoins en matière de soutien pour les nouvelles locales sont urgents et qu'il existe un déséquilibre pour les stations indépendantes dans les marchés français qui bénéficient présentement du Fonds pour les nouvelles locales indépendantes.

7724 Que pensez‑vous de l'urgence et du déséquilibre? Est‑ce que l'urgence est plus marquée dans les marchés francophones ou est‑ce que c'est vraiment la même dynamique qu'on voit partout?

7725 MME BLAIS : C'est une bonne question.

7726 Je pense que les marchés francophones sont un peu plus fragilisés, si on veut, parce que les obligations sont moins grandes. Quand vous regardez les budgets dans le marché de langue française, par exemple, un radiodiffuseur comme TVA dépense à peu près 27 millions de dollars par année pour les nouvelles locales dans ses six stations. Ça fait à peu près une moyenne de 4,5 [sic] millions par station. Mais dans le marché de langue anglaise, c'est beaucoup plus élevé. On a des dépenses totales... Je vais juste lire mes notes. Je vous reviens.

‑‑‑ Pause

7727 MME BLAIS : Par exemple, on parle de 70 stations pour 329 millions.

7728 Oui, je reviens sur ce que je vous ai dit, là. C'est plus 2,5 millions par station dans le marché de langue française. Donc, TVA, je pense que c'est bon, 4,5. Mais pour le marché québécois, c'est 2,5 millions par station en moyenne, et dans le marché à l'extérieur du Québec, c'est 4,5 millions en moyenne par station. Donc, c'est sûr que juste du fait de ces dépenses qui sont très différentes, il y a une plus grande menace du côté francophone que du côté anglophone.

7729 Il y a également des diffuseurs indépendants comme RNC Media qui sont présents au Québec et qui sont affiliés à TVA ou à Noovo. Donc, la question que je me pose, c'est si TVA réorganise, par exemple, toute son information en réduisant le nombre de personnes qui sont disponibles en région pour faire de l'information, en ayant plutôt des bureaux de correspondance que des stations, est‑ce que ça va avoir un impact sur la quantité de nouvelles que vont pouvoir présenter les affiliés à ce réseau‑là, parce que les... Je ne sais pas si le temps va être modifié. Est‑ce qu'on va faire moins d'information en ayant moins de personnel du côté du réseau? Donc, est‑ce qu'il y aura autant de temps pour les diffuseurs indépendants qui sont affiliés à ces grands réseaux? C'est une question qu'on se pose.

7730 VICE‑PRÉSIDENT SCOTT : Merci.

7731 M. BARGONÉ : Bonjour.

7732 Juste pour faire un petit peu de surf sur ce que Nathalie vient de dire.

7733 Actuellement, il faut aussi prendre en considération toute la grandeur du territoire québécois à couvrir. Je vais donner un exemple.

7734 Au Saguenay‑Lac‑Saint‑Jean actuellement, les journalistes qui sont présents sur le terrain se font déjà reprocher de ne pas couvrir le Lac‑Saint‑Jean, mettons, parce que c'est déjà quand même assez loin dans leur territoire. Et là, on parle, t'sais, d'une vingtaine d'employés qui va être réduit à quatre, cinq, six personnes, t'sais, pour couvrir encore tous ces mêmes espaces‑là.

7735 Même chose à Rimouski. Les gens se font reprocher de ne pas aller en Gaspésie, et cætera, alors que c'est sur leur territoire. Déjà, c'est difficile de couvrir l'information locale, alors que là, plutôt qu'être 25, on va être trois ou quatre personnes sur le terrain à avoir à couvrir tout ce territoire qui est immense.

7736 C'est ce qui se passe actuellement au niveau d'écoute, par exemple, parce que moi je suis conseiller et je représente tous les employés de TVA. C'est dramatique ce qui va se passer actuellement, là. Les populations régionales se soulèvent. On a fait des... Carl l'a dit, on a fait des rencontres avec les politiciens locaux, et cætera. Il y avait plein de monde qui étaient là puis qui n'acceptent pas de ne plus avoir accès à de l'info locale.

7737 Alors, il faut absolument... Moi, j'étais là pour dire ce matin : Trouvez des solutions, ça presse, parce qu'on est rendus vraiment, vraiment minuit moins une. Merci.

7738 VICE‑PRÉSIDENT SCOTT : Merci. J'apprécie votre perspective.

7739 MME BLAIS : Est‑ce que je peux simplement ajouter que les journalistes qui sont en région habituellement travaillent avec un caméraman. Donc, il y a un partage du travail technique et du travail journalistique.

7740 Mais dans le nouveau modèle qui va probablement émerger, on va avoir des journalistes, caméramans, monteurs qui vont faire eux‑mêmes la technique, qui vont probablement avoir aussi peut‑être à faire la diffusion... en fait, la transmission de leur reportage à distance. Donc ça vient aussi... ça l'a un impact aussi sur la qualité de l'information qui va pouvoir être produite.

7741 LA PRÉSIDENTE : Merci beaucoup.

7742 Alors, on vous cède la parole pour le dernier mot. Merci.

7743 M. BEAUDOIN : Merci.

7744 Juste pour renchérir un peu sur ce que monsieur Bargoné a dit, le fonds est essentiel pour nous. On ne peut plus financer peut‑être le volet « nouvelles » avec de la publicité, comme ça s'est toujours fait historiquement. C'est un modèle qui date, puis il faut peut‑être remettre ça en perspective aussi. Les nouvelles, malheureusement, à la télévision, ça l'a un coût, mais il ne faut pas perdre de vue non plus que c'est un service essentiel. Tous les paliers de gouvernement s'entendaient là‑dessus il n'y a pas si longtemps. Sans la force des médias régionaux, la crise de la COVID‑19, entre autres, n'aurait peut‑être pas pu être gérée aussi efficacement, là. Personne n'aurait pu instruire puis aviser la population, les populations locales, leur parler de l'évolution rapide de la propagation, de la marche à suivre, et cætera. Puis on parle ici d'histoire relativement récente.

7745 Humblement, nous croyons que c'est un peu notre rôle de vous donner une autre vision, Conseil, de faire valoir un peu le côté humain là‑dessus, de cette crise, et non pas juste des chiffres. Mais ultimement, je ne suis pas un expert, évidemment, mais je sais que vous avez la latitude de décider ça, et c'est aussi votre rôle de le faire, puis comme Steve a dit, on pense que ça presse, parce que c'est... on sent vraiment qu'on est en péril à ce niveau‑là.

7746 Et juste un petit clin d'œil. Le lendemain de la comparution de Québecor devant vous, il n'y a pas eu de diffusion de nouvelles locales en région, parce qu'on a privilégié le défilé de la Coupe Grey. Je me posais la question : Est‑ce que c'est de la pertinence locale, ça, ou ça sert seulement les intérêts financiers des entreprises? En tout respect, je pose la question. On défie déjà le Conseil en ne respectant pas les conditions de licence. On l'a vécu, entre autres, avec le retrait des nouvelles locales à Québec le week‑end.

7747 Ça fait que, en conclusion, pour moi, il est inacceptable que nos emplois soient sacrifiés au détriment de l'intérêt public et au nom des modèles d'affaires comme Québecor Média, comme Bell Média. La déréglementation, pour moi, n'est pas la solution, mais le fonds est vital pour nous. Voilà!

7748 M. VALIN‑LANDRY : Pour conclure, le CPSC souhaite attirer votre attention sur une préoccupation majeure qui affecte le sens même de la démocratie canadienne.

7749 La diversité de nos sources d'information est déterminée pas seulement pour l'intérêt public, mais aussi par des facteurs économiques. Cette réalité est inacceptable car elle a aussi un impact profond sur le marché du travail dans la radiodiffusion, où les employés subissent des licenciements massifs et sont contraints d'accepter de moins bonnes conditions de travail, tout cela dans le but d'assurer des profits.

7750 Dans ce contexte, le rôle du Conseil est plus que crucial. Le CRTC a le pouvoir, et je dirais le devoir, de tempérer les excès du capitalisme dans la radiodiffusion. Le CPSC soutient donc et encourage le CRTC dans sa mission de mettre en œuvre des contributions initiales de base pour les entreprises en ligne non affiliées aux radiodiffuseurs canadiens. Ces contributions devraient être monétaires et confiées en priorité à un fonds pour les nouvelles locales et communautaires et au financement des fonds servant l'intérêt public.

7751 Il faut préserver la diversité et l'indépendance de nos médias, valeurs essentielles pour la santé et la vitalité de notre démocratie et de notre identité, de même que les emplois offerts par le système canadien de radiodiffusion.

7752 Merci de votre écoute. Bonne journée.

7753 M. BEAUDOIN : Merci.

7754 M. BARGONÉ : Merci beaucoup.

7755 LA PRÉSIDENTE : Merci beaucoup. On apprécie les perspectives du CPSC. Merci.

7756 LA SECRÉTAIRE : Merci. Nous prendrons maintenant une pause et de retour at 11 h 00.

‑‑‑ Suspension à 10 h 45

‑‑‑ Reprise à 10 h 59

7757 THE SECRETARY: Welcome back. We will now hear the next participants: Ballinran Entertainment; Zellco Productions, appearing remotely; Alberta Media Production Industries Association; and Shaftesbury Inc. We will hear each presentation, which will then be followed by questions by the Commissioners to all participants. We will begin with the presentation by Ballinran Entertainment. Please introduce yourselves, and you may begin.

7758 MR. THOMPSON: Good morning, and thank you to the CRTC and the Commissioners for inviting us to appear today. My name is Craig Thompson and I am President and Executive Producer of Ballinran Entertainment.  And I’m here today with my colleague, streaming consultant Vernon Freedlander.

7759 MR. FREEDLANDER: Right. Good morning. I am the president of Grace Street Media. We are a Toronto‑based consultancy that focuses on the development of niche streaming services, and we have been working very closely with Craig on the Stageview.TV project.

7760 MR. THOMPSON: Thanks, Vern.

Présentation

7761 MR. THOMPSON: Ballinran Entertainment is a film and television production company based in Stratford, Ontario and we specialize in factual entertainment, documentary, and performing arts content for Canadian and international broadcasters and platforms.  We also distribute our own IP in, both Canada and internationally.  Our company will soon be marking its 30th anniversary and our longevity and success is thanks in great part to the Canadian film and television production ecosystem, with its regulatory framework, funding measures and Canadian content provisions.

7762 We are here today to present on behalf of Stageview.TV, a streaming platform that our company launched recently. Stageview.TV is a service dedicated exclusively to showcasing Canadian performing arts and cultural content. Our platform has the support of leading arts organizations in Canada and producers, including The National Ballet of Canada, the National Film Board of Canada, Mirvish Productions, White Pine Pictures, and many others.

7763 It is our position that the modernization of the Canadian broadcasting system must include recognition and support for public service niche streamers which provide programming of exceptional importance ‑‑ platforms like Stageview.TV. With its specific focus on the arts, Stageview.TV makes a valuable contribution to both Canadian screen culture and the Canadian performing arts sector.

7764 Canada has a remarkable pedigree in the world of performing arts.  Whether it’s theatre, classical music, dance, or opera ‑‑ and across our regional and cultural diversity, the arts define what it means to be Canadian. Through the decades, the Government of Canada, through the Broadcasting Act, has emphasized the arts and artistic creativity as essential elements of our national character and something Canadians should see reflected on their television screens.

7765 When people in this country first tuned into TV in the 1950s, what they saw, apart from American programming, was Canadian performing arts ‑‑ music, variety, comedy, and plays adapted for the small screen. Television needed content and the creative talent involved in performing arts were ready and willing to adapt to this new medium.  There was a synergy between stage and screen.

7766 Sadly, there is now a significant gap in funding for the arts on screen and no platform on which to share that content. Today, arts programming has diminished to the point where, apart from the occasional high‑profile production, it has all but disappeared from the broadcast schedule.

7767 Yet, there are still important Canadian stories to be told, diverse voices to be heard, cultures to be explored, and artistic creativity to be celebrated.

7768 Post‑pandemic, the arts continue to struggle.  With this proceeding, the Commission has an opportunity to support a re‑alignment between stage and screen, a move that will help revitalize both sectors and create new opportunities for collaboration between content creators in the screen industry and those in the performing arts.

7769 Vern.

7770 MR. FREEDLANDER: My consulting work in this area emerged out of my 2021 Master’s research thesis I conducted at Toronto Metropolitan University, formerly Ryerson University. I took a break from a career in broadcasting to return to university, to follow these pursuits. My academic research focused on the unique business challenges and opportunities faced by single‑genre, or single‑themed streaming services. I was interested in examining audience fragmentation and how the media industries were responding.

7771 As the media ecosystem rapidly shifts away from linear broadcast towards streaming, it is important to appreciate the rise of and the growing popularity of smaller niche services all over the world, and their ability to build and retain audiences. These services curate content around a specific genre or theme, and are directed towards a specific target audience, community, or fanbase, often appealing to micro audiences, but worldwide audiences.

7772 Stageview.TV, with its very specific arts‑focused content focus, is a part of this new media landscape where big streamers operate alongside the smaller, more specialized ones. This model serves as an important template for other potential Canadian niche streamers. Smaller, independently owned streaming services, especially those controlled by equity‑seeking groups, could establish much needed content distribution services, addressing underserved and underrepresented audiences, filling gaps while stimulating more content creation and distribution opportunities.

7773 To accomplish this, smaller Canadian streamers need the On‑Line Streaming Act and its regulatory framework to support access to additional funding sources, to generate original content and to develop their own distribution solutions. The aggregation and curation of niche content packaged into streamed services has the potential to not just operate domestically, but to be exported internationally. These uniquely Canadian channels would offer worldwide audiences a window into Canadian culture, and provide additional opportunities to showcase our screen talent.

7774 MR. THOMPSON: The fragmentation we witnessed in the arts market was so dramatic during the pandemic, we set out to establish a niche streaming service that would rekindle the relationship between stage and screen, acquiring existing content and eventually commissioning new, original programming. Our goal is to be the leading curator, aggregator, and distributor of Canadian arts and cultural programming.

7775 In October of this year, we received approval from CAVCO, the Canadian Audio Visual Certification Office at the Department of Canadian Heritage, granting Stageview.TV certification as an eligible digital platform for tax credits. We are grateful for the government’s support.  However, streaming platforms like ours are not licensed BDUs, and do not qualify as eligible triggers for funding from organizations like the Canada Media Fund.  While the CMF does support arts and cultural programming as part of its mandate, finding eligible broadcast triggers for arts content is next to impossible, creating a barrier to access that funding.

7776 While we support efforts to modernize the CMF funding model, we believe there is an urgent need to accelerate that timeline. Here is how we believe the CRTC can guide the future.

7777 We are asking the CRTC to identify arts and culture content as an essential component of the new Canadian broadcasting and on‑line streaming landscape. Arts and culture is universal and diverse, regardless of ethnicity, belief, geographic location, or gender identity.

7778 We also request that the Commission ensure that any new funding to support the Canadian production industry include an allocation of direct funding to enable the independent production industry to collaborate with arts organizations to produce content for the screen ‑‑ a fund we are calling The Stage to Screen Fund.

7779 The performing arts sector in Canada is in trouble. So, too, is the independent screen production industry. An alignment of these two pillars of Canadian culture should be an essential component of the On‑Line Streaming Act.

7780 With the CRTC’s direction and the support of additional funding in the sector, we believe that platforms like Stageview.TV can help fill the gap in arts programming in a meaningful way, which in turn will revitalize Canadian performing arts, increase its discoverability, and champion our enormous pool of creative talent around the world.

7781 Thank you for the opportunity to share our thoughts with the Commission, and we welcome your questions.

7782 THE SECRETARY: Thank you.

7783 We will now hear the presentation of Zellco Productions, appearing remotely. Please introduce yourself, and you may begin.

7784 MR. ZELLIS: Hi. My name is David Zellis, thank you.

Présentation

7785 MR. ZELLIS: I would like to thank the CRTC and the members of the hearing to allow me to speak today. I am a filmmaker and distributor based in Winnipeg. Our company, Zellco Production, focuses on releasing Canadian‑produced films regardless of genre or decade. I also myself dabble in online content creation, including creating YouTube channels, livestreaming gameplay on Twitch, and livestreaming on Bigo. I use online platforms and social media to heavily promote our films, and have made many contacts in the online space.

7786 Now that Bill C‑11 has gone into royal assent, the question is how to regulate it. I would urge the CRTC to come up with a process that is easily verifiable to prove something is Canadian content. In my experience, proving something as Canadian content can be an onerous experience. I would hate to see this continue in the online space, where creators have an ecosystem that benefits best from their ability to independently create content and monetize it.

7787 In 2014, I produced and co‑written a low budget horror film, Dark Forest. In 2015, it played theatrically across Western Canada. The film is now on physical media, including Blu‑ray and DVD, and over major platforms including Apple TV, The Roku Channel, Amazon Prime, and Tubi, all of which originate in America or internationally. Yet the film, which was made and produced by Canadians and shot in Canada, is not deemed Canadian by the system and has yet to be sold to a Canadian broadcaster or streamer.

7788 I would propose some form of verification for low‑budget productions. Dark Forest should be considered “Canadian”; it was produced through a Canadian company. However I am required to get verification from the majority of the cast and crew that worked on it. A lot of low‑budget producers that I work with don’t necessarily have the resources, or the time, or even the knowledge of how to go through this process. I believe a similar and simple approach should be taken towards YouTubers and online content creators to deem their content as Canadian if needed.

7789 Zellco Productions has restored a number of films and we made them publicly available. The Rainbow Boys is a 1973 film from filmmaker Gerald Potterton starring Donald Pleasence, Don Calfa and Kate Reid. It’s an adventure comedy about a mismatched trio that goes searching for gold. It was shot in the interior of the Fraser Valley in a place called Lytton, B.C., a place devastated by forest fires in 2021. Because of our efforts and working with our Partners at Canadian International Pictures, a Blu‑ray of The Rainbow Boys is now available for purchase on the Vinegar Syndrome website, a film that not only serves as a piece of entertainment, but also as an historical artifact documenting Lytton, B.C.

7790 It should be noted that for a period of about 30 years up until now, that film, The Rainbow Boys, was not earning any income. In my opinion, any and all Canadian content should be always available, giving content creators, filmmakers, rightsholders ‑‑ whatever the case may be ‑‑ the ability to earn income continuously.

7791 It would help if the CRTC could start to take a role in understanding, to start off with, then eventually moving to regulating, if need be, and scrutinizing, as needed, agreements Canadian rightsholders have with foreign distributors and broadcasters. It will help to ensure Canadian content does not get lost, as in the case of The Rainbow Boys, and that it can be protected, as well.

7792 I believe another way to help reach this goal would for major streamers to be required to have a certain percentage of Canadian content on their platforms. In my personal experience, when dealing with licensing departments who make the purchasing decisions for content, they are often based in America. It would be extremely helpful for these major streamers to have licensing departments that work here in Canada and are considering Canadian content to licence both domestically and internationally.

7793 The Nature of Nicholas was a 2002 slow‑burn horror film with 2SLGBTQ+ themes that we restored recently. We were very fortunate to get Cineplex to play it as part of their special event screening program in October. We were very grateful to get both financing from federal and provincial agencies for marketing. We got some amazing coverage for the film, including Letterboxd posting the trailer on their Instagram page getting close to 100,000 views on that trailer, a number of local news outlets providing stories about the screenings, whether that be radio interviews, TV spots, or newspaper articles. However, as there were very tight time windows to promote the film, the marketing wasn't effective as it could have been.

7794 It would be helpful if CRTC was able to regulate Canadian telecommunication companies to provide better advertising services for Canadian content at all levels, therefore effectively marketing Canadian content to a wider audience. The lack of proper marketing of Canadian films is something many Canadian filmmakers know has been an ongoing issue for years.

7795 Finally, I'd like to mention getting streamers to pay their fair share was verbiage used to tout the benefits of Bill C‑11. Under paragraph 3(1) of Bill C‑11, it states the following:

7796     “The Canadian broadcasting system shall be effectively owned and controlled by Canadians, and it is recognized that it includes foreign broadcasting undertakings that provide programming to Canadians.”

7797 This vaguely worded paragraph is free rein ‑‑ it feels like free rein for foreign broadcasters and companies to take advantage of our system, as they have been doing for years. You know, it could be something as simple as foreign companies using our generous tax credits to result in them taking a certain percentage of our content licensed at fair market value to play on their network and streaming services in their territories, or other reciprocal things that we could work together to do.

7798 It's highly important that the CRTC consider something such as this and actually act to enforce it as time goes on, as it means these streamers do and are paying their fair share. I can say trying to be a filmmaker and film distributor of explicit Canadian content has been extremely challenging.

7799 I'd like to close that I appreciate, admire, and am at times envious of online content creators in that they have the ability to earn a living and are not bogged down by overly complicated processes I have had to learn to deal with throughout the years.

7800 I thank you for your time and invite any questions the Panel might have for me.

7801 THE SECRETARY: Thank you very much. We will now hear the presentation of Alberta Media Production Industries Association. Please introduce yourself and you may begin.

7802 MS. EDWARDS: Thank you.

Présentation

7803 MS. EDWARDS: Good morning, Madam Chair, Commissioners, and staff. My name is Connie Edwards. I am a producer‑director‑writer based in Alberta. I am here today appearing on behalf of the Alberta Motion Picture Industry Association. Since 1973, AMPIA has represented independent producers involved in all aspects of creation of media content in Alberta, foreign and domestic.

7804 Over the last 20 years, we have experienced the impact of Canadian broadcasters shifting away from the West and centralizing back to Toronto. As a result, we have witnessed the disappearance of Alberta development and production support and the disappearance of regional decision‑makers in our province.

7805 Previously, regionally‑specific funds were earmarked by various Canadian broadcasters for development and licensing of content with Alberta producers. That was due to CRTC broadcaster benefits requirement. These funds were crucial to our producers and helped with the development and creation of Alberta stories. Most importantly, it allowed for diverse storytelling from our region to be viewed by fellow Canadians as well as connected with by audiences from around the world.

7806 In Alberta, the reality is we are not getting sufficient Canadian broadcast licence fees to trigger our projects, which limits our ability to access CMF funding among others.

7807 But today, we are here to look to the future. We want to work with the Commission to set our Alberta industry up for success, not on a temporary or limited basis, but for the long term. Therefore, central to our mandate is advocating for an outcome in which Alberta producers can access funding to develop and produce content, to ensure creative and financial control, to help build their companies, and to share their stories with Canadians and the world.

7808 We strongly believe that with online streamers contributing to the Canadian system, more funding should be accessible, allowing for growth and more production to happen across Canada.

7809 We respectfully suggest that the Commission first needs to consider the context, environment, and process in which these onstream revenues and allocations will be awarded. AMPIA will be pleased to offer input as this process moves forward.

7810 Overall, AMPIA agrees with the main hearing considerations as follows: that a base requirement for online undertakings similar in nature to that required of broadcast undertakings as an appropriate contribution for the production of original Canadian and Indigenous content in all genres; that a threshold level of $10 million in revenues is appropriate, but in any event contribution levels shouldn't equate to less than a five per cent expenditure level.

7811 We would also like to address the following issues.

7812 Our first point is that we encourage the Commission to not simply replace or top up the existing funding to the Canada Media Fund and other funds through this process. New revenue from online streamers into the Canadian regulatory system should be considered new funds coming into the system, which will enhance and increase production of Canadian programming.

7813 We need to consider a new ecosystem. Over the years, our industry has been having conversations about how to carve up the existing nine‑inch pie. I'm here today to say we would like a 12‑inch pie ‑‑ please!

7814 Secondly, we acknowledge that the Indigenous Screen Office and the Black Screen Office are now certified independent production funds. We support the offices in their undertakings as these organizations are in the best position to discern how to directly meet the needs of their members and community.

7815 AMPIA wishes to be a supportive, enthusiastic collaborator in the new opportunities that lay before us; therefore, we respectfully recommend that initially the Commission allocate all newly‑generated onstream revenues to a separate siloed fund strictly for streamers, to be managed by the CMF, until the content hearing has taken place and full discussion of the various options for funding more Canadian content and how that is defined has taken place.

7816 Finally, AMPIA recommends that a portion of these new funds be earmarked for development and licensing of new original and wholly owned content from the regions, specifically in our case Alberta.

7817 We sincerely appreciate the opportunity to speak with you today, and we look forward to any questions that you may have.

7818 THE SECRETARY: Thank you very much, we will now hear the presentation from Shaftesbury Inc.

7819 Please introduce yourself, and you may begin.

Présentation

7820 MR. GARVIE: Thank you very much.

7821 Good morning, Madam Chair, Vice‑Chairs, Commissioners, and Commission staff. Thank you very much for letting me be here today.

7822 I am Scott Garvie. I am a partner in Shaftesbury Films. We are a proud unabashedly Canadian production company based in Toronto that develops and produces Canadian content. We start with an original idea from a Canadian writer or a Canadian author such as Margaret Atwood, Carol Shields, Vincent Lam. We then take the financial risk and the significant cost in time and corporate resources to develop each project, mostly with Canadian writers. It won't surprise you that development periods are generally counted in years and not months. An extreme example is our show Hudson & Rex, which took 12 years before finding a home with Rogers in Canada. And I'm proud to say we have now produced that show in St John's, Newfoundland, for six seasons.

7823 We are extremely fortunate to work in Canada, where we have been given tremendous business tools in the form of tax credits, broadcaster regulation, funds like Telefilm, CMF, and the CIPFs, and from the various provinces that all support production in Canada. With that core financing secured from Canada, we are able to leverage the balance of financing for our shows.

7824 Our shows attract strong Canadian audiences and have been successful internationally. An example is our show Murdoch Mysteries that is a ratings success for CBC and airs in 120 countries, bringing our very Canadian story of mystery and mayhem in turn‑of‑the‑century Toronto to a global audience, with all Canadian writers, actors, directors, and producers.

7825 And importantly, these business tools have allowed Shaftesbury to own the IP in our shows, and in success, we have been able use the resulting working capital to fund further development and corporate infrastructure so that we always have a robust development slate generating new IP that we hope to produce.

7826 And this is the perspective that I come from today to offer some comments for your attention.

7827 We feel that it is important to remind ourselves that public policy in this area has been a true success: cooperatively invented, applied across federal and provincial governments and agencies, driven by the regulator. Today's CRTC stands on the shoulders of fearless, uniquely Canadian, and incredibly creative public policy measures, consistently applied for decades, and it has created a vibrant storytelling from all across our country.

7828 You guys face a very interesting puzzle in these hearings. How will Canada's broadcasting system manage through a fundamental technological transition? Will there be anything Canadian about that system when we're done? Change brings opportunities but also the real risk of unintended consequences.

7829 The American studios and streamers are here seeking rules that would give them access to the Canadian market with as few public obligations as they can talk you into. Watching the MPA presentation the other day, I was transported back to my grade 12 Canadian history class, and for a brief moment I thought that Canada remained a hewer of wood and drawer of water. That can't be the outcome under this modernized public policy: not partners in success, but a work for hire; no IP ownership; market revenues from success of these US‑led productions flowing to the finance departments in the studios and not being reinvested in the Canadian system.

7830 Canada is built beside one of the global cultural giants, but we are clearly different. Canada weaves together a thousand strands of culture, language, and history into an unique country with unique stories. It cannot be in the public interest to lose the creative spark that powers our country because we give our village square away to foreign giants and let them take ownership of our storytelling. Was that Parliament's intent in modernizing broadcast regulation? I suggest not.

7831 Private enterprises looking for access to the Canadian market should be required to commission a significant volume of Canadian programming from independent Canadian producers and creators and to pay into the system in an equitable and transparent manner. And those funds should be used to help capitalize a strong, diverse, Canadian‑driven production industry using Canadian talent in front and behind the camera that will continue to earn audiences in Canada and around the world. We know this can be done. My colleagues at Shaftesbury are doing exactly that.

7832 Let's write rules for digital that work for Canada and for Canadians. And as you turn to that, we have some specific suggestions.

7833 First, we applaud a base contribution model that triggers change now under existing CanCon rules rather than putting it off indefinitely. Let's build a system that gets new added money working effectively as soon as possible. It is disingenuous to say nothing can happen until the conclusion of this lengthy process. It is entirely possible that you may decide that the definition of what constitutes a Canadian program may not differ greatly from what it is now.

7834 Second, we would suggest that current delivery systems can be used in the first instance rather than creating new delivery systems from scratch.

7835 And finally, it is equitable that the new contributors should have access to these funds, but we do not believe it should be on a hundred‑per‑cent self‑directed basis. We look to the current CMF model that allows a 75‑25 split between independent producers and broadcaster‑affiliated as a fair model to duplicate. Treat the streamers the same as the Canadian broadcasters.

7836 Thank you. I would be happy to answer any questions.

7837 THE CHAIRPERSON: Thank you so much. Thank you for being here. And I know that some of you travelled as well, so thank you for joining us. Thank you for joining us virtually as well.

7838 I know that the Panel has a number of questions, so I will turn things over to my colleague Commissioner Naidoo to kick things off.

7839 COMMISSIONER NAIDOO: Yes. Thank you very much, and thank you for being here.

7840 I'm going to target my questions to each of you, because I have a lot of questions and I want to make sure we get a chance to go through them. You will have an opportunity at the end to comment on anything that you feel that was important that we didn't ‑‑ you didn't get a chance to mention.

7841 So I'm going to start off with ‑‑ I think I'm going to direct this question to Shaftesbury. In your view, what constitutes an acceptable base requirement for online undertakings? Should it be comparable to traditional broadcasting undertakings? And what about in the case of foreign versus domestic undertakings? If you could touch on all that.

7842 MR. GARVIE: I think I would repeat the presentation that was given the other day by the CMPA, who dug into the numbers a lot more than I have. I find it a bit complicated to think because we're talking percentages, we're not talking actual numbers. So it's still a bit of a mystery to me what is it we are actually talking about coming into the system.

7843 I do believe that the Canadian broadcasters are under duress, and they've talked to you about it. I don't believe that they should be ‑‑ have their rules of engagement changed until the end of this process. I do believe that the foreign streamers should be treated in an equitable way with the Canadian broadcasters.

7844 But I think the real thing that I want us to focus on is that you guys have been given an opportunity to regulate and supervise, and that means to me transparent, accountable, and directed. You have a basket of goals in the direction from the government to do a lot of fantastic, great things and to a very diverse and ‑‑ impossible way to carve all this up, and you guys are going to have to do that.

7845 And you have to direct these foreign streamers. This new money, some of it can be used for your own purposes, some of it has to be used for our purposes. And I think of a Venn diagram, you know. You have a circle that is what the streamers think they would like to do with that money, and they want to tell you what they want to do with that money. Then there's a separate circle that is all the good public policy things that you guys want to achieve. And in a perfect world, it would be a circle, one circle. But we know that's not going to be the case.

7846 So I think you have to look at each foreign service and look ‑‑ and I do have some sympathy for if there's things that they don't do. There's going to be money that you put into that they can deal with their audience, and there's things that have to go to the greater good.

7847 And I hope that is responsive.

7848 COMMISSIONER NAIDOO: Thank you very much for that.

7849 I wanted to go to AMPIA. I wanted to ask you about funding and whether you think that funding ‑‑ is funding the main propellant for regional production? Or do you think there are other forces such as synergies and access to labour, proximity to centres of production that fixate on production such as the big cities like Montreal, Toronto, Vancouver?

7850 MS. EDWARDS: Well, both, of course. Experience with others and synergies with others is definitely one of the tools.

7851 Everything starts with the creator. Everything starts with the writer, initially. And we move forward from there.

7852 If we do not have the funding to initiate that process in Alberta with the stories that our creators want to tell, we're at a loss. So a lot of our companies co‑produce, and a lot of us go to learn at different centres. We bring that all back to Alberta because our producers are, some of them, Emmy‑award‑winning. Some have been nominated for Oscars. Some of us have won Rosie awards. But it all starts where we live. And it's so important to reflect our sensibilities and the stories.

7853 So funding is important. And we've seen that as the development funding has gone away, we've just seen it's been harder and harder to get those stories out into the world. And we're not in the world of a $1,000 cup of coffee anymore. It's now a $2,000 cup of coffee, and it is the price of doing business. But it is the funding that really begins the entire process.

7854 COMMISSIONER NAIDOO: All right. I'm going to come back to you. I do have some other funding questions.

7855 But I just wanted to just go back to Shaftesbury for a second. I wanted to ask you about certified independent production funds and whether you think that they're the cure‑all for regional production or do you think there are other things that need to transpire within the system overall?

7856 MR. GARVIE: I think that the system that we've been using with CMF, Telefilm, regional supports, and the CIPFs have been useful. I think they do need to be refreshed to look at what their mandates are to modernize them with the goals that you are trying to achieve.

7857 I was thinking when I was flying in today about Netflix yesterday was a very interesting presentation. And I thought they made a really interesting distinction where they talked about there's service work that is being produced in Canada because it's such a great infrastructure, great crews, great talent. But it's shows that they're doing and they're coming here for production purposes only. So it's their creative idea. They're the top of the chain then; they decide what happens. And Stéphane said, And we're here; this is about CanCon, and this is how we are going to create funds and use our funds to meet the CanCon goals that the CRTC is setting out for us.

7858 And to me, that is always ‑‑ and whether it's regional or whether it's Toronto and Montreal, I think there's successful stories across the country and from public policy. Stories come from everywhere. And it's really how do you get people access and transparency that they can make those choices.

7859 But I think the CanCon model, the difference is, you know, owning the IP, it's just not owning the copyright and the revenue stream, it's also leading from the top up on the creative side and telling a creative story with a creative team, writers, directors, actors, as opposed to having somebody offshore saying, This is what we think it is, what we want to do for our audience.

7860 And so I think it's a really important nuance that they came up with. And I really appreciated that they did that. And I have to say that we have worked with a number of streamers on the development side, and there is a real respect for what we're trying to do in Canada and building the system and building the infrastructure.

7861 But I do think there needs to be some direction, because they can't just do what they want. They need direction from you saying, This is what needs help. And I take a little bit of umbrage on the market failures. To me, it's not a market failure; it's a market that's difficult to work with. But part of the ‑‑ if you're going to use the public airwaves and get money out of Canada, part of the contract, the social contract that we insist is that they're going to put money into these other aeras that are harder to fund.

7862 So and who knows where we're going to get the next Shaftesbury in 15 years? Like we want access. We want people to succeed across Canada. And in that success, we think they're going to keep on recycling the system in a very positive way.

7863 COMMISSIONER NAIDOO: Thank you very much for that.

7864 I'm going to go back to AMPIA. You had said in your intervention that you'd like to see new funds created, not just a top‑up of CMF. So why is that? And what are the barriers to you collecting funding from CMF?

7865 MS. EDWARDS: I think we'd like to see these new funds as truly new funds. And as my colleague said, the online streamers should have access. If they're going to put money in, they should be able to access those funds.

7866 I'm not sure that we've had trouble accessing CMF funds. I think we've been very successful. Sometimes I think there's just not enough money in the system to go around. You know, we see it with some of the ‑‑ like the regional bonus. There's always an oversubscription. But as far as I'm aware, certainly, our projects have moved forward. And the CMF has been such an integral part of our financing plan.

7867 And that's why we're suggesting a siloed fund that, for the moment, mirrors what is already working. Again, to my colleague's point at Shaftesbury, we don't need to necessarily reinvent the wheel. We just need to get a bigger pie. And we just need to refine that in order to make it work better for the system.

7868 We are all here ‑‑ I would say the broadcasters, the streamers, the producers ‑‑ we are here to encourage and work toward the success of the system as a whole. And I think if we are able to figure out that funding mechanism, I think we can start down that road.

7869 COMMISSIONER NAIDOO: All right, so I want to stick with funds. You talk about ‑‑ even this morning, you talked about new funds being set up for development of new content and wholly owned content from the regions, particularly with a focus on Alberta, for obvious reasons, because of your organization.

7870 But my question is that if all regions were drawing on a fund like that, would there be enough to go around? How would a new fund determine which region should get the most funding or, in your view, are you pitching that it be equally distributed and is that enough?

7871 MS. EDWARDS: I think that we would like to have a little bit more detail from the Commission in terms of what are your thoughts. It goes back to what is Cancon, you know, how should ‑‑ who should do what and how should they do it. So I feel it's a little bit premature to ‑‑ for me to give you some thoughts on that.

7872 Certainly we’re looking for equitable distribution of funding. I think that’s the most fair. But we would love to come back and we will come back with some very concrete ideas once you’ve had an opportunity to do the process you need to do.

7873 COMMISSIONER NAIDOO: Just a few things to figure out, right.

7874 MS. EDWARDS: Well, I've got all kinds of ideas, but I think it behooves us to speak about what is possible once you have determined what that framework looks like.

7875 COMMISSIONER NAIDOO: Thank you very much.

7876 I want to talk to Zellco now. You talk a lot in your intervention and in your comments this morning about ownership of content. And I’m wondering why this is so important under any new framework.

7877 MR. ZELLIS: Yeah, that's a great question, and thank you for that.

7878 Ownership of content is so important because ‑‑ you know, I don’t sit on these panels often. I’m just going to speak from my experiences. That’s all I can say, right.

7879 And so my experience as a filmmaker and working with filmmakers from all walks of life all across Canada and older, younger filmmakers, particularly the older filmmakers, is what will happen sometimes, and this is why ownership of content is important, is they’re not educated when they’re signing certain distribution contracts. And understand, I’m working with filmmakers that are making low budget, micro‑budget type films.

7880 So sometimes they’ll not be in a position to get a broadcast sale. They haven’t gone to the system so they’re looking to foreign distributors.

7881 And sometimes those contracts are not great. And what will happen sometimes with these distributors because sometimes these distributors can be bad actors, unfortunately, is they’ll sell their catalogue to another distributor, that film piece of content does like a volleyball around until that filmmaker no longer has access to their film and then they’re fighting to get it back.

7882 So that’s why ownership of content is important. I know it’s not something that has an easy solution to it. I certainly was struggling writing my comments out prior to this trying to present the CRTC with solutions that are actionable.

7883 I don’t know quite what they are yet. It’s always in the back of my mind. But it’s frustrating when you see a film that was made in the eighties, it’s a great film, and the filmmaker 20, 25 years later is embroiled in legal battles because they signed not a great contract. So that’s why ownership of content is so important so that filmmakers, whoever’s creating the content, they have the ability to earn a living.

7884 So that, to answer your question, to me is why the ownership of content is so important.

7885 COMMISSIONER NAIDOO: Thank you so much for answering that question.

7886 Ballinran Entertainment, I didn’t forget about you. I have a question for you.

7887 Besides funding, what other ways, in your view, can the Commission aid in the promotion of content from smaller, more niche streamers?

7888 MR. THOMPSON: Well, you may recall in the 1990s a channel called Bravo was licensed ‑‑ granted a licence by the CRTC and, along with that, there was a condition of licence called the Bravo Fact Fund. When the channel was sold in 2007, the fund continued and that fund was wound up in 2017.

7889 Many of the people who are in the screen industry today got their start because that little fund inspired individual content creators to create content. That, sadly, has disappeared.

7890 But to your question about what other measures other than funding, I think there has to be an emphasis that arts and artistic creativity, which is mentioned in the Broadcasting Act, is included just like other essential program requirements that Canadians seek to see on their television screens.

7891 MR. FREEDLANDER: And you know, I'd like to add that in addition to funding, I think general support for, let’s say, the export of these channels into other parts of the world, I think, would be very, very welcome. I think funding that could help develop the actual distribution platforms, marketing discoverability, so it’s not just content production, but it’s the marketing discoverability of that content and making that available to a worldwide audience, I think, would go a long way.

7892 COMMISSIONER NAIDOO: Thank you very much. Those are all my questions.

7893 Back to Madam Chair. Thanks.

7894 THE CHAIRPERSON: Thank you very much. Thank you, Commissioner Naidoo.

7895 We are going to go over to Commissioner Levy.

7896 COMMISSIONER LEVY: Thank you, and welcome. I have a question for AMPIA and Shaftesbury might want to weigh in as well.

7897 We’ve heard some of the Canadian broadcasters suggest that there’s no problem with the producers. Producers have never had it so good. And in Alberta, we’ve just seen the example of The Last of Us, big service production that shot for 17 months, put $140 million into the local economy and all of the rest of it.

7898 So with everything that this production does to improve crews, spur investment in resources like studios and editing and all of those sorts of resources and facilities that are fundamental, why haven’t you been able to make the kinds of relationships with some of the streamers that would allow you to tell the more ‑‑ you know, do your pitches to them while they’re in province and sell your stories to them?

7899 MS. EDWARDS: I think those productions are wonderful service productions and they do everything that you’ve noted to help our industry. I believe that there certainly have been some conversations, you know, and it will continue as we move forward.

7900 It is always the triggers. It is the development of product. It is the trigger, the getting the green light that puts the programs on the radar and gets them made, and that’s the trick. And I think that’s what we’re asking for in terms of the funding, is help us develop the stories that we have to tell.

7901 We will absolutely take care of building relationships. We need to get in front of people. We need to engage with the decision‑makers. And sometimes the decision‑makers don’t always come to set, so ‑‑ but we are in process and we think that these new funding opportunities will help us in that process because Alberta is wonderfully positioned and has done world‑class programming from Alberta by Albertans. And we just look forward to the next steps.

7902 MR. GARVIE: Thank you.

7903 I find that when broadcasters say that producers take no risk, I find that a little triggering. And you know, we’d had a thing called COVID that shut production down. We just had a strike that shut production down, service production, so we ‑‑ and I’m watching the interest reserve on our productions go out of control with interest rates. So we take a lot of risk and so that ‑‑ sorry. A little side note there.

7904 The ecosystem is really important and, you know, B.C., Ontario, Quebec to a large extent have very, very viable ecosystems that are a service foreign led and domestic, and it is really important and it builds crews, it builds talent in front and behind the camera. So I would never say that what is happening on the service side is a bad thing for Canada because I believe it’s a very positive thing. But I also think it’s really important for us to build strong Canadian companies that are telling Canadian stories from the top down and being sustainable and able to put money back in the system.

7905 So talk about at Shaftesbury, you know, we have been very lucky over the years to have shows that have been renewed and done very well around the world. With that, we feel a responsibility to keep on developing new shows, developing new talent. Murdoch Mysteries before it was a thing has ‑‑ for 20 years has been a 50‑50 gender parity on the writing and the directing side and we’ve now, in the last 10 years, even before it started being part of the CMF rules, we were filtering in the under‑represented to give people opportunities.

7906 We want to build a strong sustainable industry so we need ‑‑ but we can do that because we have four or five one‑hour shows that are going so we make some money, we make some money on the international sales because we own it and we then filter that through the system. And some of it goes back to pay for ‑‑ in success, people get a share of that. Others allow us to have a robust ‑‑ we spend about $1 million a year on development prior to having a broadcaster, prior to having a streamer just to try to get rights to books, get rights to ideas, start a process and then find the right home for it.

7907 And then we do have ‑‑ in Canada we have broadcasters that have been very helpful and very engaged in development, so we’d bring them in, but we have the ability to do something first so we know what it is before we go and ask people to do something. And then we could ‑‑ you know, I alluded to it in my notes. You know, we have such a great system here is that we have tax credits, we have financial support.

7908 We then go to a market and we can go to the UK or Germany or France or go to an international distributor, go to the U.S. and they don’t control. It’s not one shop shopping. It’s ‑‑ they’re a piece, maybe 15 percent, 20 percent, 25 percent. And we lever that off across the whole thing and Shaftesbury is leading that production and leading the creative control. So it’s an important thing.

7909 And I think I went off topic. Sorry.

7910 MS. EDWARDS: Commissioner ‑‑

7911 COMMISSIONER LEVY: We got a primer.

7912 MS. EDWARDS: Commissioner Levy, if I may just add to that also to your point about Alberta, I think it’s also very important for the new voices because some of the more established companies are able to have those relationships, but if we are looking for the new voices that really, you know, have more to bring to the table, sometimes the opportunities aren’t there and it is through the creation of their stories, maybe their first stories, sometimes, that that company will grow or that producer will grow in order to go and have those conversations with the streamers.

7913 I did want to just add that portion.

7914 COMMISSIONER LEVY: We've heard from individuals and groups that money should be directed to news, Canadian audio‑visual or music content and creators, Indigenous producers, equity‑deserving groups, accessibility and other public interest organizations and initiatives. There’s a huge demand.

7915 In your view, what types of funds or initiatives should get priority because they’re not all going to get the same attention?

7916 And I would ask that of, just very quickly, all of you.

7917 MR. GARVIE: I'll jump in.

7918 I like Michal MacMillan’s response to the news question this morning. I think it’s a valid point and there are other methods of getting money into that. And I absolutely agree with him completely that it needs to be supported and we need to ‑‑ it’s really important for our country to have a strong ‑‑ whether it's all from this money or whether it should be coming from other sources like government funding is ‑‑ I’ll leave for you guys to sort out.

7919 I do think that you’ve been given a laundry list and I didn’t realize what Madam Chair said the other day, 88 goals or ‑‑

7920 THE CHAIRPERSON: Over 80.

7921 MR. GARVIE: Over 80. So it is, you know, how do you do that and you’re going to have to make tough choices and there’s going to be ‑‑ people are going to have to manage their expectations because, depending how big the pot of money is, which we still don’t know, there are going to be winners and losers. And maybe that’s not the right way to phrase it, but you can’t do everything.

7922 My own penchant is for scripted drama, scripted kids, animation, that sort of story‑telling, but I know that I’ll have colleagues calling me as soon as I leave this room saying, “What the hell are you talking about?”.

7923 So there is great Canadian content across any number of genres and any support that we can give all those genres would be great and you guys are going to have to get the pencil out and figure out what is the split that makes sense and hits all the policies that you’re trying to achieve.

7924 COMMISSIONER LEVY: Perhaps our friend from Zellco would like to opine on the first priority.

7925 MR. ZELLIS: Yeah, I think it's all important. I don’t know how equipped I am to answer that. I’m not coming here looking for funding necessarily. I’m just saying this is grounds ‑‑ this is what I do and this is what I’m dealing with.

7926 But the one thing I would just kind of say, you know, the less barrier to entries to all groups, the better. The less rigid these funds could be, the better. You know, the simpler the process can be, the better. And that’s all I can really say.

7927 I think it’s all important. You know, all these groups need to be supported in somehow or some way and how to go about that is less barrier to entry so more stuff, whatever that is, gets created.

7928 MR. FREEDLANDER: You know, I would add to that I think the Commission has to ‑‑ there’s a return to the Broadcasting Act and the essence and the aspirational qualities of the Act and, from that, you know, make some decisions about what, indeed, are programs of national interest. And I think in our case, you know, we think the arts play such an incredible role in defining Canadian character, we think, you know, that should be a priority, especially at the time when performing arts groups, theatre groups are really struggling in this country post‑pandemic. And we think that the alignment between the screen industry and the performing arts industry can revitalize the performing arts industry and we think that should certainly be a priority and that I think by returning to the Broadcasting Act I think the Commission can really sort of appreciate what makes the Canadian character in terms of content and in terms of storytelling. And we think the arts is integral to that.

7929 MS. EDWARDS: I feel that you have such a monumental task ahead of you because, of course, we’re all here asking for something and we’re asking for something very specific to our communities. News, of course, is all about communities and should be supported.

7930 For all of the rest of the requests, I think I come back to the feeling that, you know, we need to look at what is equitable. And this is where the stakeholders really need to engage in discussions not just with you, but you know, with each other because how do you choose. All of it is important. And is it a percentage basis, is it, you know, who’s popular this week? You know, what is the right solution?

7931 I think that is part of the challenge that lays ahead of us.

7932 As you decide what the parameters are, what the factors are, I think we can come back with a little bit more of a defined answer for you, but I think it has to be equitable, it has to be diverse. It has to reflect Canadians from sea to sea to sea.

7933 I am wearing my red Canadian jacket today because I really believe in what we are trying to accomplish here to have that representation across the country. And so I have no easy answer for you, Commissioner Levy, but I just think it should be equitable and it needs to be diverse, and that should be the guidance as we make all of these hard decisions.

7934 COMMISSIONER LEVY: Thank you very much.

7935 THE CHAIRPERSON: Thank you. Thank you, Commissioner Levy.

7936 We are going to go over to our Vice‑Chair of Telecommunications.

7937 VICE‑CHAIRPERSON SCOTT: Thank you, Chair.

7938 So I'd like to follow up with Ballinran because I really appreciate that you highlighted the amazing Canadian performing arts talent that we have. You also highlighted one of the amazing things about the internet, which is that a niche service applied to a global market can actually do extremely well.

7939 So my question is, why isn’t Canadian arts plus internet a bankable formula without the need for a specific fund and what is the specific role of the fund in making that a viable path forward?

7940 MR. FREEDLANDER: Thank you for that question and thank you for recognizing that connection.

7941 You know, I think the problem is the audience is incredibly fragmented, right. We have audiences that are interested in the arts, but discoverability is a huge problem. And I think this came out of the pandemic especially when a lot of arts groups decided to create their own digital content and put it up on their own websites or their own YouTube channels and they were siloed and they were completely fragmented.

7942 And I think what’s required is someone to come along, and this is what Ballinran is proposing, is to be the national aggregator of that content to create one destination for arts content in Canada. And that’s something that’s lacking.

7943 There was a time when the broadcast industry was very much involved with putting the performing arts on air, but that doesn’t happen any more.

7944 So we think we can take advantage of that fragmentation in terms of bringing people together by aggregating content, by creating communities of arts fans not only across Canada, but internationally as well. And we think, you know, having a sole aggregator whose only job is to bring Canadian arts together on one destination, one streaming destination will go a long way to revitalize the arts and amalgamate that community of fans.

7945 MR. THOMPSON: One point to add to that, Vern, is that post‑pandemic a number of arts organizations have realized they now must invest most of their resources in attracting people back into the live experiences. And thanks to Canada Council and various other arts fundings, they were able to survive during the pandemic, but now funds are being diverted to actual in‑person experiences and we’re also facing a lot of global competition. There are some international platforms like Marquis TV, Medici TV, but they’re not ‑‑ they don’t have Canadian content as a priority. There is no Canadian voice internationally.

7946 And as Vern said earlier, we believe that an aggregator of Canadian arts content can also be an export voice for the industry in Canada.

7947 VICE‑CHAIRPERSON SCOTT: Great. Thank you very much.

7948 That was my question, Madam Chair.

7949 THE CHAIRPERSON: Thanks very much. Thank you, Vice‑Chair.

7950 So we will turn it back over to you. Perhaps everybody could just take a minute to offer any concluding remarks.

7951 MR. FREEDLANDER: Well, I'll start off.

7952 Well, you know, we want the Commission, I think, to appreciate that the future is made up of niche streamers, that as the audience gets more and more fragmented and gaps are created that the barriers to entry for AVOD, SVOD, fast channels has really come down dramatically, and this is an incredible opportunity to fill the gaps.

7953 I know the Commission often talks about the gaps that are out there, but because the barriers to entry have dropped, I think, so dramatically that it’s now possible for smaller independent streaming companies, especially those that are controlled by equity‑seeking groups, to launch their own solutions.

7954 And just building on the Blue Ant presentation, that idea of a hybrid company, that doesn’t have to just belong to the Blue Ants of the world. That can belong to all kinds of smaller independent operators, and these groups can be very effective at filling in the content gaps that are lacking but they need financial support not just to create content, but to actually launch those distribution solutions.

7955 MS. EDWARDS: Thank you.

7956 It's been wonderful to be here today, so thank you very much.

7957 Our takeaway that we would like you to take away is we are really looking for meaningful regional support for developing and licensing of programs from Alberta and for equitable support across the country. We think we have such an opportunity collaborate, to work toward the success of broadcasters, streamers and producers. The goal here is for everyone in our system to be successful. And in the end, we believe that the Canadian audience is going to be the winner, and that’s, I think, why we’re here today.

7958 Thank you.

7959 MR. GARVIE: I would just note that I’ve heard a lot during these hearings about flexibility and the greatest flexibility possible, and it always alarm bells going off. ‘Flexibility’ means they get to do what they want and not ‑‑ and I really am heartened to hear you, as a panel, talking about regulating and supervising and directing, to make sure that new contributions are used in a very meaningful way that makes a difference and will make a difference to the future generations of content creators in Canada, and is accountable.

7960 And you will make sure that it’s not just lip service; it’s not noblesse oblige, “We’re doing all these great things,” but they ‑‑ if they want to stay involved in Canada, they would need to have a real roadmap from you guys to make sure that they achieve the goals that we need them to achieve. And we welcome them here, but we do need them to participate in a meaningful way.

7961 Thank you. And thank you very much for the time today.

7962 MR. ZELLIS: Yeah, I guess, I don’t know if ‑‑ I’d just like to leave a final comment here. I’d like to thank the members of the Commission here for their time today, listening to me and hopefully going forward. They are sympathetic and understanding of filmmakers I typically work with who don’t necessarily have the time or resources or even understanding of the system. And finally, I’d just like to make recommendations. The Rainbow Boys will be playing on the Hollywood Suite this Monday. Go check it out. Thank you so much for your time.

7963 THE CHAIRPERSON: That was a nice pitch you just snuck in there at the end. Thank you very much. Thank you for being here and for sharing your perspectives with us. We really appreciate it.

7964 THE SECRETARY: Thank you very much.

7965 We will hear the next intervenor before lunch, Canadian Race Relations Foundation, appearing remotely. Can you hear me correctly?

7966 MS. HASSAN: Yes, I can.

7967 THE SECRETARY: Perfect.

7968 MS. HASSAN: Can you hear me?

7969 THE SECRETARY: Yes, we can. And we have your PowerPoint on screen, so just let us know when you want us to switch slides. You may begin. Please introduce yourself, and you may begin.

7970 MS. HASSAN: Okay. I’ll just make sure I can hear you properly. All right. So, hello, everyone. Well, first of all, can you see me? I’m not sure if you see my screen or you’re seeing me.

7971 THE SECRETARY: Right now, your video is not turned on. So, maybe just open your...

7972 MS. HASSAN: Okay, I can do that. I’m trying to turn it on and for some reason, it’s ‑‑

7973 THE SECRETARY: Oh.

7974 MS. HASSAN:  ‑‑ not happening. I think it’s suspended from your end? Okay? Right now?

7975 THE SECRETARY: Yeah, we can see you.

7976 MS. HASSAN: All right. Wonderful.

Présentation

7977 MS. HASSAN: Hello, everyone. My name is Fatma Hassan. I am the Director of Public Policy at the Canadian Race Relations Foundation, and I am here today to speak on behalf of the Canadian Race Relations Foundation. So, first and foremost, thank you for the opportunity to appear before you, and thank you for this invitation. So, I understand I have limited time, so I’m going to try to be very concise and quick.

7978 So, as you saw from the written submission, we do have a very focused two recommendations, which will form the majority of this presentation today. So, I would like to start by speaking about the barriers for racialized companies, with the highlight that many Black and racialized creators have spoken of the barriers they face to operate successfully and produce content that reflects the diversity of Canadians. These barriers can be systematic as well as operational, for example, lack of funds and industry support, limited funding sources and access, institutional barriers for smaller companies, systemic racism and bias.

7979 We can go to the next slide.

7980 So, as you can see before you, we have some statistics here. Before delving into them, I would like to say that these findings are confirmed by data from a 2021 Canadian Media Fund Summary Report on ‘The Profile of Recipients of COVID‑19 CMF Emergency Relief Funds’ ‑‑ that’s the title of it. This Summary Report focused exclusively on the experiences of companies that received the Black and people of colour allocation program of the CMF funding. So, according to the report, the stats that I show before you here note that 40 percent of the Black and racialized‑owned companies said they had worked on projects with a development budget under 50,000 as compared to the average across companies of 169,000; 40 percent of the companies had an operating budget of under $50,000; one‑third of the companies said they rely on six or more funding sources, wherein three‑quarters are self‑funded, followed by the CMF as the second‑largest fund, about 57 percent of them.

7981 The biggest barriers to funding are limited access to broadcasters, followed by systemic racism and bias, amongst other barriers. The data here reveals the wide range of barriers to the stability and success of companies owned by Black and racialized Canadians. Black and racialized‑owned companies make a conscious effort towards creating content that reflects the diversity of Canadians, as well as their stories on the screen. To encourage and support Black and racialized content creators and companies, representation in the industry behind the screen and on the screen must be increased, with greater funding that is not temporary or an emergency relief fund.

7982 We can go to the next slide.

7983 The biggest barriers to funding are limited access to broadcasters, followed by the system racism and bias. Lack of representation at the decision levels are also some of the biggest barriers, amongst others. The data reveals a wide range of barriers to the stability and success of companies owned by Black and racialized Canadians. So, to encourage and support Black and racialized content creators and companies, representation in the industry behind the screen and on the screen must be increased with greater funding, again, that is not temporary or an emergency relief fund.

7984 The following recommendations are the ones that we would like to put forward.

7985 The CRRF recommends the creation of a permanent fund dedicated to supporting Black and other racialized media companies. This fund would further broaden the CRTC’s portfolio of diverse stories that resonate with all Canadians. This fund could be housed under the Canadian Media Fund and the Canadian Music Fund. We acknowledge that the Media Fund has provided funding support to Black and racialized creators before; however, we recommend a permanent and much larger for this purpose. We recommend that a portion of base contributions from all undertakings be put towards this fund.

7986 And the last recommendation ‑‑ so, it would be the next slide.

7987 The fund should allocate funding for temporary costs support, emergency support, and development funding or grants to enable stability and consistency amongst Black and racialized small media companies. Eligibility for this fund should be tied to reporting requirements on two key factors: the content of the media being developed, and the content creators. The fund should be allocated for media companies that are entirely or in part led by Black and racialized creators. And the fund should also target content creation specifically for Black and racialized audiences.

7988 And that brings me to the end of my presentation and the recommendations.

7989 THE CHAIRPERSON: Thank you very much. Thank you for joining us remotely today. I know that the Canadian Race Relations Foundation is not necessarily a frequent flier before the CRTC, so ‑‑

7990 MS. HASSAN: Yes.

7991 THE CHAIRPERSON:  ‑‑ we really do ‑‑ we do appreciate your engagement in the proceedings.

7992 I will turn things over to my colleague, Commissioner Naidoo, to ask some questions.

7993 COMMISSIONER NAIDOO: Hi, there. Thank you so much for being here today. It was nice ‑‑

7994 MS. HASSAN: My pleasure.

7995 COMMISSIONER NAIDOO:  ‑‑ to have a PowerPoint, too.

‑‑‑ Rires

7996 MS. HASSAN: My pleasure.

7997 COMMISSIONER NAIDOO: In your intervention, you mentioned your concern for creators who create content in languages other than the official languages and Indigenous languages accessing available funds. I’m wondering if you can describe how existing funds ‑‑ or even news funds, for that matter ‑‑ could be improved to respond to that concern.

7998 MS. HASSAN: So, when we're speaking about different languages, it’s the fact that a lot of languages aside from the official languages ‑‑ English, French, and as there is support for Indigenous languages ‑‑ but many other languages that Canadians from coast to coast to coast speak that are not any of those languages are not ones that are finding sufficient support when it comes to funding, and therefore, it inhibits their ability to be able to provide content in those languages that can reach a broader audience.

7999 COMMISSIONER NAIDOO: Thank you for that. You also propose in your intervention a fund for BIPOC creators, and in addition to the CISF for BIPOC creators, the Commission has recently, as I am that sure you’re aware, certified two other independent funds to support Indigenous and Black creators, and those funds are the Indigenous Screen Office and the Black Screen Office. So, with that in mind, I’m wondering if you think that BIPOC creators are better supported or well supported, and should there be a specific BIPOC fund for audio creators, as well?

8000 MS. HASSAN: So, as ‑‑ so, thank you for that question. And as I noted in the PowerPoint presentation, although we recognize that there have been funding allocations targeting the communities that we are speaking about ‑‑ so, that’s BIPOC creators ‑‑ Black, Indigenous and racialized ‑‑ however, the funding, as I had mentioned in the PowerPoint ‑‑ the funding is either emergency relief funds or is very temporary, so it does not speak to some of the systematic barriers that are longstanding that hinder the ability of these creators to be able to engage in long, sustainable projects.

8001 And, as I had mentioned, many of them, based on that report from 2021, have six different sources of funding, meaning that there isn’t a centralized place where people are able to access funding that allows them to see a project from beginning to conclusion.

8002 COMMISSIONER NAIDOO: Okay. And what percentage of the initial base contribution, in your view, should be directed to funds that support racialized communities?

8003 MS. HASSAN: So, I don’t want to say a number that at this point in time can’t be substantiated, so I think I’ll refrain from providing a number at this point in time.

8004 COMMISSIONER NAIDOO: Sure, that’s fair enough. You talk about systemic racism and how there has to be some sort of funding in order to tackle that problem. Obviously, that’s a problem that’s been around for generations. It’s a problem that isn’t necessarily going to go away, needs some mitigation, but I’m wondering how you figure out what kind of funding you need to put towards education and fighting systematic racism. I mean, how do you quantify the amount of funding that you think needs to go towards something like that?

8005 MS. HASSAN: That’s a very good question. So, I think one way to start looking at it is, how much money is being allocated to it at the moment? What are the metrics being used to determine? Have some of the barriers that are systematic, which obviously, when we say ‘systematic’, that’s very abstract and very general; right? It’s important to be able to break it down and say, “What are we talking about when we’re saying ‘systemic barriers’?” As I mentioned in my PowerPoint presentation, one of those barriers includes, who are the people behind the screen as well as in front of the screen? Do we have representation when it comes to that? If the answer is ‘no’, which it is, so there needs to be funding towards that.

8006 Additionally, when it comes to the decision‑makers, who are the people that are sitting at the table to make the decisions? So, that speaks to also other aspects of decision‑making processes, and that is also funding that’s required to be able to have representation at decision‑making tables. So, the funding increase is across the board. So, it is, again, hard to be able to say, “This is the amount,” because, when we’re talking about systematic issues, they require systematic solutions, and that means funding all across the board. But that requires thoughtful engagement in terms of, what are the barriers that we’re trying to address? How are we going to measure their success? And how do we determine if we’ve been able to move the dial on these issues?

8007 COMMISSIONER NAIDOO: So, it sounds to me like you’re talking about data collection ‑‑ that there has to be better information gathering, reporting ‑‑ all of those things. I mean, that’s ‑‑ that seems to be, you know, the crux of how to measure it. Is that correct?

8008 MS. HASSAN: Definitely. Yes, you are correct.

8009 COMMISSIONER NAIDOO: Okay. You’ve probably heard ‑‑ I don’t know if you’ve been watching the hearings over the last few days ‑‑ you’ve probably seen that some online undertakings argue that they shouldn’t be paying into funds because they contribute to Canadian production expenditure. So, I’m wondering what your response is to that argument, with a lens on equity‑seeking groups and their needs.

8010 MS. HASSAN: So, when we’re speaking, I think I would answer perhaps with a question. When we’re saying Canadian production, well, who is it representing? And who is not part of ‑‑ of those productions? Who is not being represented? I think that’s one way to answer that question.

8011 COMMISSIONER NAIDOO: So, are you saying that it’s not enough that they are contributing to production expenditure; that there’s got to be some more oversight? Is that what you’re saying?

8012 MS. HASSAN: So, if the question is in terms of ‑‑ just to make sure I understood your question clearly, that there is funds towards production, right,...

8013 COMMISSIONER NAIDOO: They are producing content here, and therefore, they are creating platforms, and therefore, they don’t feel ‑‑ some have argued that they don’t feel they should be paying into funds because they are already supplying jobs and capacity‑building, and so on.

8014 MS. HASSAN: So, that is definitely not how, based on the statistics that I have shared, based on the report that actually cited by the CMF, that is not the experience of Black and racialized content creators. So, they are not seen as ‑‑ they are not being funded adequately. They are not getting base funding, and they are actually having to scramble all types of sources of funding to be able to engage in content creation. So, that does not in any sort of way accurately reflect what is being said in terms of the content being created. It does not reflect the experience of these groups.

8015 Additionally, as I noted earlier, access to broadcasters ‑‑ an overwhelming number have cited that as a serious barrier which limits their ability to be able to get the messaging across, to get the content across, because the broadcasters are not interested in what it is that they are creating.

8016 COMMISSIONER NAIDOO: Thank you for that. My last question before I hand it over to my colleagues is, are there things other than funding? We’ve been talking a lot about funding. Are there things other than funding that can help BIPOC creators, and how do you think we can incent greater funding to those types of productions?

8017 MS. HASSAN: So, I look at that as a two‑part question. Other than funding, yes, the answer to that is there are definitely many ways. One of the ways, which I cited also in the presentation, which is the decision‑making process, right, having more BIPOC individuals being part of that decision‑making process, which speaks to the issue of representation. That is one way that is from a non‑funding perspective.

8018 COMMISSIONER NAIDOO: All right. Thank you very much.

8019 MS. HASSAN: You’re welcome.

8020 THE CHAIRPERSON: Thank you very much for that. We do have one more question for you, and I am turning over to my colleague, Commissioner Levy. Thank you.

8021 COMMISSIONER LEVY: Thank you. Thank you very much for being here today. You know, what doesn’t get measured doesn’t get done. And measurement can take many different forms. You indicated reporting requirements are an efficient tool for incentivizing increased diversity and inclusion. Do you believe that a self‑identification system such as the CMF’s PERSONA‑ID could be standardized and could be helpful?

8022 MS. HASSAN: Yeah, I think it can definitely be very helpful.

8023 COMMISSIONER LEVY: Great. Good, short answer. Thank you very much.

‑‑‑ Rires

8024 COMMISSIONER LEVY: That’s all that’s required.

8025 MS. HASSAN: My pleasure. I like to keep it nice and concise.

8026 THE CHAIRPERSON: Excellent. Thank you so much. So, we would just like to turn it back to you for any concluding remarks, or if you’d like to add something that we may not have covered this afternoon.

8027 MS. HASSAN: No. I just wanted to say thank you for the opportunity. As you noted earlier, the CRRF is not a frequent flier in this type of engagement, so we appreciate the ability to be able to provide our input and our expertise into this important consultation process hearing. So, thank you very much.

8028 THE CHAIRPERSON: Thank you very much. We really do appreciate your participation.

8029 MS. HASSAN: My pleasure.

8030 THE SECRETARY: Thank you. We will take a lunch break and be back at 1:00 o’clock.

‑‑‑ Suspension à 12 h 18

‑‑‑ Reprise à 13 h 01

8031 THE SECRETARY: Welcome back.

8032 We will now hear the presentation of Amazon.

8033 Please introduce yourself and your colleagues and you may begin.

Présentation

8034 MS. GRACE: Good afternoon, Chair Eatrides, Vice‑Chair Barin, Vice‑Chair Scott, Commissioners, Commission staff and counsel. Happy Friday.

8035 My name is Magda Grace and I am the Head of Prime Video for Canada, Australia, and New Zealand.

8036 With me today is my colleague John Murphy, who is the Head of Amazon Music in Canada, and our colleagues Erin Langley from Prime Video Legal and Jon Cohen from Amazon Music Legal.

8037 Nous sommes heureux d’être ici aujourd’hui pour discuter de notre soutien au contenu audiovisuel et musical, canadien et autochtone, et pour présenter nos points de vue sur la façon de renforcer notre industrie et de la rendre plus compétitive au Canada.

8038 Today, we will walk you through the impact our services have had in Canada, provide recommendations to the Commission on this consultation and its way forward.

8039 Amazon’s mission is to be Earth’s most customer‑centric company. Our philosophy is rooted in working backwards from the customer and continuously innovating to provide a better customer experience. What this means to us in Canada is that we start with our Canadian customers first and work tirelessly to deliver the best possible experience.

8040 We believe a key part of that success in delivering on that vision is for our customers to see Canadian stories, and our track record supports this. For me as a born and raised Montrealer, Canada has personal importance. I moved back to Canada after having worked on the U.S. Prime Video business in Seattle, because I believe in the company's mission statement for Canada and in the role that we could play for the Canadian film and television community that we are a part of.

8041 Our contributions are diverse and significantly positive, impacting multiple areas across the sector and benefiting talent, creators, distributors and broadcasters alike. We film dozens of TV series and movies in Canada, including hits like The Boys, Reacher and Gen V.

8042 We have been making content in Canada for almost a decade, investing significantly in Canadian storytelling and global productions starting with The Man in the High Castle back in 2015 in Vancouver.

8043 Our global productions in Canada are key growth drivers for the sector, made with best‑in‑the‑world Canadian crews and production companies, supporting local talent while adding major economic benefit across the Canadian film and television industry.

8044 In a report we commissioned from Deloitte, it was estimated that Amazon’s more than 40 projects in Canada between 2021 and 2022 contributed $1.4 billion to Canada’s GDP and more than 13,000 jobs.

8045 We also produce and license content from Canadian storytellers for distribution not just to our Canadian customers but also our broader global audiences, titles like The Lake from the Canadian team at Amaze; Quebec‑based Three Pines from Left Bank Pictures; and the quintessentially Canadian story, Mr. Dressup: The Magic of Make‑Believe, our documentary produced by marblemedia, in association with Hawkeye Pictures and the CBC, which recently won the People’s Choice Award for Best Documentary at the Toronto International Film Festival, before being shown at film festivals across the country.

8046 We have also commissioned more French‑language TV productions in Canada than any other international streamer. We’ve announced the upcoming reboot of the popular series Nuit Blanche, and two new seasons of our smash‑hit LOL Qui rira le dernier, which was produced by Quebec‑based production company Attraction, and that is just naming a few projects.

8047 We’re actively working with many talented Quebecois artists, including Elisabeth Rioux, Patrick Huard and Yvon Deschamps, who have been vital to the success of these projects and the cultural industry in general.

8048 However, our productions are not the only part of what we do to support Canadian stories and the film and TV industry. We are distribution partners for many Canadian broadcasters, including Bell Media, Corus, Rogers, Blue Ant, OUTtv, Super Channel, Hollywood Suite, Wild Brain and Stingray.

8049 Through our Prime Video Channels business, we support Canadian broadcasters in extending their reach. Our contributions include providing the technological services to enable traditional broadcasters to immediately scale their reach to streaming audiences without platform and hosting costs and we provide marketing and promotional reach for these partners into almost every Canadian home. We are helping drive revenue to Canadian broadcasters and supporting them in evolving their businesses in a world that is shifting to streaming. I am proud that we are a best‑in‑class partner for Canadian broadcasting leaders and can generate value for them outside of traditional broadcast distribution.

8050 Prime Video’s contributions don’t end there. We believe it’s critical that our film, music and TV industries in Canada reflect the diversity of our country. This is why we recently launched the Reelworld Training Lab, an upskilling program for racially diverse and Indigenous producers and writers, alongside industry sector leader, the Reelworld Screen Institute. We also committed $1.3 million to the BIPOC Canadian TV and film production community via the Indigenous Screen Office and provided ten $10,000 grants to support creators who are Black, Indigenous and Persons of Colour.

8051 Amazon’s commitment to Canada runs deep and our local teams in the offices in Toronto for both Prime Video and Amazon Music are on the ground every single day working to serve Canadian artists, creators and the industry community.

8052 MR. MURPHY: Thank you, Magda.

8053 Good afternoon, Chair, Vice‑Chairs and Commissioners.

8054 At Amazon, we work hard to offer tremendous value to Canadian customers, including not only those who enjoy our services but the phenomenal Canadian talent that we work with every day.

8055 Take, for example, the work my team at Amazon Music does to promote Canadian musicians. We work hard to ensure that Canadian talent is discovered at home and globally by working with Canadian artists and songwriters and promoting their music through high impact advertising, content and placement.

8056 An example of this is with the Oakville‑raised band, Valley. My team in Canada has worked with Valley over the past year to promote their music here at home and through working with our colleagues at Amazon Music Japan to help them reach new audiences and build their fan base in Asia.

8057 Developing long‑term relationships with artists and songwriters at the early stages of their careers is also something that we are really proud of.

8058 Tate McRae, the pop superstar from Calgary, currently has one of the biggest songs in the world right now. We first met Tate in 2019 and created an Amazon Music Original with her in 2020, and that was two years before her debut album. To then support that album, we debuted live performances of her songs on a global livestream from our Amazon Music Twitch channel for fans around the world.

8059 We’re currently working with Walk Off The Earth, the Juno Award winning band from Burlington, Ontario, on a Holiday campaign where the band created an Amazon Music Original cover of Paul McCartney’s Christmas classic, Wonderful Christmastime. We are promoting this song widely through our out‑of‑home advertising in Times Square in New York, global playlisting and editorial support, and many other content initiatives to support their music.

8060 We also recently co‑hosted an Indigenous Song Camp with the SOCAN Foundation to explore new songwriting styles for up‑and‑coming artists. This was a four‑day camp with Indigenous creators from across Canada that included songwriting sessions, sharing opportunities for paid synchronization licences at Amazon, and the creation of an Amazon Music Original that will be released next year.

8061 After the camp, one artist wrote to us to say: “As a songwriter and an artist, I feel like you set us up to be successful and helped put real‑life, tangible opportunities in front of us.”

8062 Supporting artists early and unlocking global support is really important to us, but so is creating and curating content from across all parts of Canada. One way we've done this is through a “City by Artist” playlist series, where artists from across Canada curate their favourite music from their hometown. Sarahmée curated their best picks from Quebec City, FouKi selected his favourite songs from Montreal, and The Sheepdogs shared the music they love from Saskatoon.

8063 In addition to working directly with Canadian artists, we curate roughly 500 playlists to feature Canadian talent across all genres and interests, including Breakthrough Canada, Indigenous Voices, Canada Now, Rotation North, L’or et le rap, and Made in Canada. We know that Canadians want to hear Canadian music and we make these playlists easily discoverable by our Canadian audiences and promote them to our global customers.

8064 These are just some examples of the work our team in Canada does to amplify Canadian voices in music and it is critically important to us that as the Commission develops this modernized broadcasting framework, you consider the value of this kind of investment, which generates positive outcomes for Canadian creatives and is the future of the music industry.

8065 MS. GRACE: I will now turn to our recommendations for the Commission.

8066 It is our view that any contribution framework should be in line with the Minister’s Final Policy Direction to be flexible, adaptable and “use tools that are based on incentives and outcomes.”

8067 We encourage the CRTC not to apply any mandatory contributions until the full scope and scale of contributions made by online undertakings have been assessed, data‑driven outcomes have been set, and a flexible framework to recognize varied contributions and differentiated business models is built.

8068 Once that understanding is in place, we urge the Commission to allow undertakings to satisfy these requirements through at least in part their own direct investment. This will allow us to continue to invest in the areas we outlined for you today and which position us to best serve our customers in the long term.

8069 The allowance of direct investment to satisfy obligations under the new framework will also promote competition, diversification, affordability, and innovation in the online broadcasting space.

8070 We do not support the channeling of contributions to a small number of legacy funds. This will limit our ability to respond quickly to customer demand and interest and slow our creative process. What we've outlined today is proof that there are different ways of achieving the outcomes we believe the Commission is seeking, and we further encourage the Commission to evaluate whether legacy funds sufficiently support the diverse film, TV, and music talent of the future.

8071 Additionally, we believe it is inappropriate at this time to require contributions from revenues generated from unique transactions, or what we also call TVOD, and online content storefronts. These are low‑margin businesses, providing services with the bulk of the revenue already going to producers, distributors, and broadcasters and over which streamers have limited creative control. Just as the Commission did not extend its scope to brick‑and‑mortar video stores, it would be undue regulation to include these businesses for streamers. We need to foster the technological and new business opportunities that keep Canada competitive and delivering the most options for our customers.

8072 MR. MURPHY: To conclude, we share the Commission's goal of establishing a broadcasting system of the future that is outcomes‑based, flexible, adaptable, and equitable. The broadcasting sector and Canadian artists and creators need us to take the time to get this right and ensure that we have a dynamic and lasting broadcasting system for the future. We urge the Commission to give serious consideration to our recommendations.

8073 Thank you for listening, and we would be happy to answer the Commission's questions at this time.

8074 THE CHAIRPERSON: Thank you very much for Amazon's engagement in this proceeding more generally, and thank you for providing some of those concrete examples about some of your initiatives.

8075 I know that we have a lot of questions for you. Many of them will likely sound quite familiar. I will turn things over to our vice‑chair for telecommunications, Adam Scott.

8076 VICE‑CHAIRPERSON SCOTT: Good afternoon and happy Friday to you as well.

8077 So even within the Amazon portfolio, there is a diversity of business models. So maybe we can start there. And the question that I know everybody wants to know, when my cousin Jimmy pays his $79 Amazon Prime subscription fee, how much has he just paid for TV services versus music services versus free delivery? How does that get accounted for within Amazon?

8078 MR. MURPHY: Thank you for the question, Vice‑Chair. And also thank you to your cousin Jimmy for being a loyal Prime member. We do appreciate it.

8079 So on the music side of the business, and then I'll pass it to Magda to speak to video, we have three tiers of service. We have Amazon Music Unlimited, which is our main service, on‑demand functionality, all the songs. We have Prime. We also have a free tier.

8080 The revenue and subscribe numbers have been provided in the digital media survey that we've provided, so that would be the place to look for like a holistic view of the music business that we have at Amazon, and we view it as a separate stand‑alone business to, you know, the Prime membership.

8081 MS. GRACE: The Prime membership program, we hope, is a fantastic value for our customers. One of the reasons that we bundle so many benefits within a single membership program is because we know our customers value them and want to see them. And so they're all intrinsically tied into this one program.

8082 We also operate our businesses as distinct business lines. And as you've seen with the submissions that we've made, we've provided separate financial reporting for both of our business lines. So they are operated independently.

8083 The way that we split revenue or subscription revenues isn't something that we share broadly at this time as that's confidential information or company confidential information.

8084 VICE‑CHAIRPERSON SCOTT: Okay, that's fine. I think the important point was that Amazon is capable and does make such ‑‑

8085 MS. GRACE: Correct.

8086 VICE‑CHAIRPERSON SCOTT:  ‑‑ that data is available to us in a confidential basis. Is that correct? That's been filed in confidence already?

8087 MS. LANGLEY: Yes, yes. We can provide that confidentially to the Commission.

8088 VICE‑CHAIRPERSON SCOTT: Great, thank you. We'll look at what's already been filed, and maybe we can follow up with an RFI as necessary. Thank you.

8089 Yes, Spotify was before us earlier in the week, and they described their margins on music streaming as razor‑thin or negative. How would you describe your margins on the music business, and is it similar on TV?

8090 MR. MURPHY: Thank you for the question, Vice‑Chair. Yeah, I would echo the razor‑thin sentiment towards margins in music streaming. Music‑streaming services, essentially, we all have the same catalogue of songs. You know, we're not an exclusive‑driven business. We license the rights of those songs from the rights holders. So we're all operating in the same space where we've got the same content. We're offering, you know, consumer products and apps to services to go and engage and listen to music. So we're in the same world and reality of margins as are, you know, other services that are encountered too.

8091 MS. GRACE: As it comes to Prime Video, we've split out our businesses into our transactional businesses and our ASVOD or streaming businesses. On the transactional front and in our submission, we communicated that they are low‑margin businesses where a majority of the revenues, similar to the streaming music space, goes directly to the licensors and rights holders. And then a portion of the remaining revenue is for the management of the service, including hosting costs, customer service fees, things like that, billing costs. So they are low‑margin businesses. That's what we've called online content storefronts and one‑time transactions.

8092 VICE‑CHAIRPERSON SCOTT: Okay. And are the margins low because such a high proportion of the funds are going towards artists and creators? Because that's not the sense we've been getting from the artists and creators that have been appearing before us.

8093 MR. MURPHY: Yeah, thanks. So the deals we have in place with the rights holders, so that's the record labels and collecting societies on behalf of the songwriting community, so we don't make direct payments to artists. It goes through the rights holders that then, through their commercial arrangements, make payments to the artists and creators of the music works.

8094 Roughly 70 per cent of our revenues from customers are what goes through rights. And that left ‑‑ leaves, you know, 30 per cent, assuming, you know, we've passed the 70 per cent through to the rights holders, to manage the rest of the business, which also includes developing, you know, hopefully a world‑class product for Canadian customers to enjoy and discover new Canadian artists and music, local teams on the ground here in Canada. You know, we're really excited to be here to represent Canada. We have people, you know, from across the whole country that are like working day to day to go and build, you know, amazing and deep relationships with Canadian artists and creators.

8095 And then there's also, you know, other operational costs, customer service, credit card fraud. There's a long list of things that like eat into the remaining part of the, you know, pie, so to speak, from you know the revenue we make from customers.

8096 So yeah, it is, unlike traditional broadcasts, which I think the estimate is eight per cent, we've got 70 per cent of our revenues flowing through to the rights holders that then, you know, at their discretion, and that they always distribute to artists and songwriters on the music side.

8097 VICE‑CHAIRPERSON SCOTT: And on the AV side is it similar dynamics apply?

8098 MS. GRACE: I would say it's similar to on the music side. It is we're basically offering the service to pass through content on behalf of distributors to customers. We don't curate any of the content, own any of the content. It's effectively like we're a service offering that facilitates the distribution of that content to customers directly.

8099 The exact structure is obviously ‑‑ there's different societies, collecting societies and things like that on the AV side. But I would say from, you know, the pass‑through of revenue, it would be a generally similar structure.

8100 VICE‑CHAIRPERSON SCOTT: Okay. And then is there a portion of your business on the AV side that is different than that, like when it comes to the Netflix Canada ‑‑ or sorry, the Amazon Canada Originals? How does that side of the business operate, where you're not just a flow‑through?

8101 MS. GRACE: So we would, we have a basically Prime Video or the subscription offering that's included with a Prime membership program is a business where we acquire and produce a selection of content and then offer that to our customers. So from a revenue perspective, we take a portion of the Prime subscription revenue, as we were discussing before, and that's basically the foundation on which we would generate revenue for that business to offset the content costs and all other costs that we have against that business, including marketing and promotion, and then also, you know, investments in, you know, things like the Indigenous Screen Office and those organizations that I was mentioning before.

8102 There are also on the AV side additional costs to companies like SOCAN and, you know, billing, payment processing fees, all these things do exist, obviously, and then hosting costs for the content, so a myriad of operating costs as well.

8103 VICE‑CHAIRPERSON SCOTT: And are you always the rights holder in those instances for your own productions, or is that negotiable?

8104 MS. GRACE: We have a variety of deals. There's no one way to work with Amazon within the subscription video on demand side of our business. We have many different types of deals where we have wholly owned productions, we have co‑productions, we have licensed productions. No one deal looks the same.

8105 And the nature of the deal structure that we have will be depending on, you know, the creative control that we have in the program and the financial investment that we have in the program and also the distribution footprint that we're seeking for the program.

8106 And an example I could give, for example, is LOL : Qui rira le dernier ?, which is our Québécois production. It's a format that we have on a global basis, and so we exploit that content globally. And so that is a wholly owned production, whereas something like I referenced before, Mr. Dressup: The Magic of Make‑Believe, that's something with CBC and with other rights holders, and so that's not a wholly owned production. So really, it really, really depends.

8107 VICE‑CHAIRPERSON SCOTT: Thank you. Just one more question on how you offer and monetize services, and then I'll move on to contributions.

8108 So TVOD in particular, you made a point of emphasis in your submission that that is a different model and that it's much more akin to a blockbuster than a streaming service. But is it really? Like you've got a lot of different ways of packaging and monetizing the services that you offer. What is it about TVOD that makes it so distinct? And couldn't it be argued that it's just another way of packaging and selling, like, an online content?

8109 MS. GRACE: Simplifying TVOD, and maybe just for context, for everyone who's not super familiar with TVOD, content goes through a life cycle. Typically, TVOD in the film space will first go to theatrical distribution, and oftentimes it'll be alone just in theatres; you can't get it anywhere else. From there, typically content will then go into the TVOD and EST or electronic sell‑through window, which is a purchase‑and‑rental window, which is a window of time in which the content on a rights holder is able to monetize that content before it goes to television or streaming services.

8110 And so from our perspective, it is really a different business model than streaming because it's a different window and it's a different type of monetization, a different deal structure with the rights holders that's been established and kind of foundational framework on a global basis, similar to how you see with music. There are revenue splits. It's quite a globally ‑‑ fairly globally consistent structure on how it's monetized and packaged.

8111 Prior to TVOD existing, really, that window was after something went to theatres. You rented it at the DVD store and then it might go on TV. That was kind of ‑‑ so it is basically very similar to that model.

8112 VICE‑CHAIRPERSON SCOTT: So what's the distinguishing feature, then, of that? So I appreciate that it's a different model. Which feature of that model makes it so that it can't be included in a contribution, in a percentage‑based contribution regulatory framework?

8113 MS. GRACE: From our perspective, there are a few reasons. One is that it's a low‑margin business and that we're basically a service‑provider passing that on to our customers. A majority of the revenue goes directly to the content rights holders, and only a small portion remains with Amazon to operate the service. So we would be concerned if it was included in the calculations. And we've been, you know, happy to hear that the Commission is kind of considering this business model a little bit more deeply before making an assessment on when to include it because of the nature of the financials for this business and how it's distributed to end‑users.

8114 VICE‑CHAIRPERSON SCOTT: Great, thank you.

8115 So I'll turn now to contributions. And I'll start by saying so I've read the submission. I note the long list of contributions that you make, and I appreciate them and don't want to devalue them in any way.

8116 But I do want to turn our attention to what I'm calling the potluck problem. So you're one of many who's emphasized the importance of flexibility, that you can get, you know, more bang for your buck by investing in things that you do well. But where does that leave us for the policy objectives that don't fall within initiatives that you would pursue of your own volition? Like would you agree that there's two categories of things, you know, one being kind of the win‑win scenario where your business objectives are aligned with our policy objectives, and another category where we've got policy objectives that frankly don't touch on or don't form a part of your business model?

8117 MR. MURPHY: Thank you for the question, Vice‑Chair. I think that's why were here today and we're really keen to, you know, collaborate and work with you on this. And you know, I think that the thing that we care about at Amazon massively is the customer, the Canadian customers that we're engaging, the artists and the creators. So you know, we've built our services around building customers bases in Canada and working closely with what the needs of the industry is that we're working in require to go and, you know, connect the dots between both of the customers and the creator.

8118 So I think that, through this process, one thing we'd love to work with you on is identifying where there are gaps and then how can Amazon work to fulfill those gaps directly. Because we feel, you know, with the expertise from our Canadian teams, our experience in the industry, and you know a passion for working in music, TV, and film, you know, if there are gaps that come through a process that evaluate the current, you know, work that we're doing here across movies, TV, and music, then we would love to, you know, understand what they are and then work with you on how we can directly help close them and fulfill your objectives.

8119 VICE‑CHAIRPERSON SCOTT: Okay. So Netflix yesterday, sometime this week, so equally keen to work with us, which is great to hear. As part of their eagerness to work with us, they conceded that if we were to apply a contribution, a kind of a revenue‑based fee model, that two per cent would be within the realm of the acceptable based on kind of global trends.

8120 Are you feeling that cooperative?

8121 MR. MURPHY: Did you want to take it?

8122 MS. GRACE: Sure.

8123 Well, first, we will just reiterate our position that we wouldn't at this time support an initial base contribution until further analysis is done on the contributions made by streamers.

8124 We believe that streamers contribute more than by just looking at potential revenue base. Even looking at similar contributions to date, they're not easily quantifiable. So simply assigning this legacy model of base contributions is not the modernization of the system and doesn't necessarily achieve the objectives that the Act might be setting out.

8125 You know, we do recognize that if, after having done the assessment, that existing contributions made by streamers are not sufficient to achieve the objectives, then looking at revenue or revenue base could be a reasonable option. But as we spoke about previously, there are certain categories of revenue within our business lines that we believe should be exempted.

8126 With respect to the two per cent, you know, it's challenging for us at this time to be able to stipulate a number because we need to understand how our current contributions will be treated and also have resolution on the next stage of the consultation regarding the definition of Canadian content.

8127 VICE‑CHAIRPERSON SCOTT: Great. So I think I at least heard that, yes, there are different categories of problems and, yes, there might be different solutions required to address them. So there's some common ground there to work on.

8128 Do you have any data ‑‑ so the two per cent I think comes from their views on international comparable regulatory frameworks. Anything else we should be looking at to help inform a number, an appropriate number? So are you seeing global trends? Are you aware of other regulators applying similar frameworks? Where should we look if we do go looking for a number?

8129 MS. LANGLEY: Yeah, I'm happy to answer this. And it's great to be before you today and have an opportunity to talk about this issue.

8130 Really, there's only a small number of countries at this point that have levies or local financial contributions. In each of those scenarios, we've been pleased to collaborate with those regulators to find the right balance between industry, innovation, and what they're hoping to achieve that are important societal objectives.

8131 When we look at the regulations that have been passed so far, the ones that strike us as working best have been the ones that allow the greatest degree of flexibility. You've heard that theme. So when we think about those, I'd look at something like Denmark, like Spain, like the newly passed legislation in the Netherlands. And we look to these because these models provide flexibility either in fulfilling investment requirements directly, allowing industry participants to do that, and providing a choice between a levy or a direct financial contribution, or in allowing the levy to be offset in part at least by a direct financial contribution. The other thing that I'd point to in those regulations is that the eligibility criteria for the types of content that qualify for credit are broad and flexible.

8132 On the other side of things, where we've seen a higher percentage of contributions or a number of sub‑requirements, those are typically harder to comply with, and they've forced trade‑offs on some of the innovative work that we've done to serve local customers.

8133 MR. COHEN: And thank you, Vice‑Chair. On the music side, for music streaming, as I believe other participants in this consultation have told you already, we have not seen mandatory contribution laws in other countries. And to us, we think this makes it all the more important that the Commission gather key information about how streamers are already contributing to the Canadian broadcasting system before imposing an initial contribution requirement on the music side in particular.

8134 VICE‑CHAIRPERSON SCOTT: Great. Thanks. I'm going to stop my questions there. I think this has been very helpful in learning how your business works and how it can fit within the regulatory framework we're constructing.

8135 THE CHAIRPERSON: Thank you very much. Thank you, Vice‑Chair.

8136 Let's go over to Commissioner Naidoo.

8137 COMMISSIONER NAIDOO: Hi there, thanks for being here today.

8138 You mentioned that for your audio streaming service that 70 per cent of your revenues are paid in royalties. You said that these royalty payments, in your view, should be sufficient contribution for your audio services. But I guess I'm trying to get at isn't this just the result of your business model, meaning that this is the cost of running a legally licensed business in Canada which you benefit from?

8139 MR. MURPHY: Yes, so thank you for your question, Commissioner.

8140 So our view is that the rights and the percentage of our revenues that go to rights holders wouldn't count towards any, you know, framework or contribution, but they should be taken into consideration when evaluating our business. So in our view, those deals are direct with the industry that we work with, and then they have direct deals with, again, artists and songwriters, and that they shouldn't be counting towards any contribution that Amazon's currently making. But it should be taken into consideration when thinking about our business margins and the audio‑streaming landscape.

8141 COMMISSIONER NAIDOO: All right. Thanks for clarifying that. I appreciate it.

8142 Can you give us an idea ‑‑ I want to stick with that 70 per cent ‑‑ of what percentage of that 70 per cent goes specifically into the Canadian system? And if you could break it down into percentages, like what goes to the Canadian system versus the foreign ecosystem, what goes, you know, further within the Canadian system, what percentage goes to the record labels, what goes to SOCAN, what goes to the artists. That's kind of what I'm looking for.

8143 MR. MURPHY: Yeah, thanks. And to give you some context, roughly 55 per cent ‑‑ and again, not to get into specific commercial deals ‑‑ but 55 per cent is the rule of thumb for what goes to the record labels, 15 percent would go to the collecting societies for the songwriters, which makes up, you know, the 70 percent. And that’s kind of standard business deals that are across most streaming services, if not all of them.

8144 To get into the question about percentage of revenues that go through, first of all, that’s not something that we would track because, you know, we track the deals and the payments that we make to the rightsholders. Then they distribute to, you know, the Canadian songwriters and artists. And these can be like really complex arrangements, there could be, you know, a Canadian songwriter, an American songwriter on a song. They have different splits based on the composition of the song, so it’s not data that we have on track.

8145 We pay the rightsholders, then the rightsholders pay the appropriate bodies and, you know, the nationalities and where they’re from.

8146 To come back to your question about the Canadian system, the one thing that I would also highlight is, you know, our submission was based on revenues and subscriber numbers in Canada, but one of our key focuses as a team is supporting Canadian artists globally and significant promotion and investment outside of Canada.

8147 So as an example, there’s a, you know, Toronto‑based four‑piece girl group, The Beaches, that were in our London studio yesterday. They were recording a live performance video that we’re going to launch at the start of next year. To come with that is also going to come significant playlisting and promotion from the UK, so the UK’s business deals will then flow through, you know, ultimately into the hands of the rightsholders of The Beaches music.

8148 So this is something that we’re trying to do day in, day out to evangelize and grow artists’ careers outside of Canada so when we think about the revenue they’re making and their business, we look at it from a global perspective because that’s the feedback we hear from artists that we speak to every day. Like they want to come to work with Amazon Music because they know we have great relationships in India, a great team in Australia and the team that we have here in Canada also invests significantly in building those internal relationships because it really helps, you know, evangelize and export the great work that we see really close hand in Canada, you know, globally, basically.

8149 COMMISSIONER NAIDOO: Well, I really appreciate that answer, that clarification. And I’m just wondering, you said that you can’t, at this stage, break down according to percentages what goes into the Canadian system versus what goes into the foreign ecosystem. Is that something that could be quantified further down the road or it’s just impossible to do?

Engagement

8150 MR. COHEN: Thank you, Commissioner. We'll look into whether there's information we can provide on that.

8151 As my colleague said, we don’t have tons of information on the national origin of a lot of the music on our services, but it’s something that we will look into and follow up with the Commission if there is something we can provide.

8152 COMMISSIONER NAIDOO: Thank you very much. That's all I have.

8153 Thank you.

8154 THE CHAIRPERSON: Thank you very much. Thank you, Commissioner Naidoo.

8155 Let’s go over to our Vice‑Chair for Broadcasting, Lisa Barin.

8156 VICE‑CHAIRPERSON BARIN: Thank you very much and welcome, Amazon. I have a bunch of questions.

8157 I’m going to start by recognizing that Amazon does contribute to the Canadian broadcasting ecosystem and in the ‑‑ I know you highlighted the GDP impact of your activities in Canada, so I think we recognize that as well.

8158 Part of the exercise that we are undertaking is to not just look at the economic impacts, which aren’t necessarily under the Broadcasting Act, but at the cultural impacts and to see sort of how we can build a system where players can contribute to those activities that target the cultural imperatives in the Act.

8159 I want to start with TVOD, okay. So I know that you compared it to the video store. In a past life, I ran pay‑per‑view and VOD services and so I understand the split model. I understand the margins. They weren’t that slim at the time. Maybe the studios are asking for more these days. But the CRTC, in the past, never gave those services a break because they had low margins.

8160 So I guess my first question to you is, how is TVOD not like pay‑per‑view and VOD? What distinguishes that model today? Because in the past, it was under the Broadcasting Act.

8161 MS. GRACE: Thank you, Vice‑Chair, for your question.

8162 In my experience, the pay‑per‑view and the broadcast view on demand, or BVOD, model has different and less razor‑thin margins as TVOD and EST, so that would be a consideration to take.

8163 A lot of the deal structures that we have for these businesses are with major studios that operate on a global basis and so the revenue share agreements that we have are effectively pretty much global standard, and so we ‑‑ operating as a global business, we have to, you know, take into consideration that it’s difficult for us to negotiate Canadian‑specific or different revenue share arrangements as a result of these kind of global standards.

8164 VICE‑CHAIRPERSON BARIN: Okay. So the Commission has traditionally considered these transactional services, whether they are on the TVOD or VOD and pay‑per‑view model as broadcasting undertakings. How do you see the TVOD business, as a broadcasting business or as a distribution business?

8165 MS. GRACE: So we don't ‑‑ we don't control the ‑‑ we don't create content for TVOD as Prime Video, and so we have limited ability to control the volume or make content for that business as a stand‑alone. It is a rights window.

8166 So it is very different than, I would say, you know, traditional SVOD service where we have content budgets and we make decisions on what to produce and create.

8167 VICE‑CHAIRPERSON BARIN: Okay. So thank you.

8168 I'm going to move on to your position that contributions that you make to the Canadian system should be counted as part of the contribution that you bring forward. And so I start with the position that under our regulatory system all players that have broadcasting activities and are under the ambit of the Broadcasting Act contribute to the objectives of the Act. And the way our processes work, we have open proceedings and we establish standards on what counts as a contribution.

8169 Your position is that we should count the activities that you currently do as part of those, if you will, Canadian content contributions.

8170 I don’t think that ‑‑ well, first of all, it’s very difficult to have a sense of what it is that you would like the Commission to consider as a contribution and what the quantum of those contributions are and the categories of the contribution because I think from what I’ve heard so far a lot of these activities are not the traditional kinds of activities that the Commission has counted as Canadian content contributions.

8171 So I’m wondering if maybe you can speak to the quantum and maybe if there ‑‑ you don’t have enough information now, at some point file that in more detail as an RFI.

8172 MS. GRACE: Sure. I'm happy to speak to the contributions we make and then I’ll pass it on to John afterwards for the music space, if that’s part of the question.

8173 I mean, we do believe we’re making substantial contributions as both Prime Video and Amazon Music to Canada’s broadcasting sector. We film dozens of our global productions in Canada and leveraging amazing Canadian talent, crews, locations. We have a wide array of Canadian content which is Canadian stories featuring Canadian talent that we film that’s made for our Canadian customers and our global audiences.

8174 Our contributions don’t end there. As we mentioned in our opening statement, we’ve invested significantly in marketing our shows, movies and music not just in Canada across our websites and our touch points in Canada, but also in paid marketing. If you look, for example, Three Pines, we had billboards right near Times Square to support Three Pines, and so we believe that these are all valuable contributions.

8175 We’re also investing in the development of talent in the industry such as our contributions to the ISO and the Reelworld Screen Institute and then, of course, what we’re doing in the Prime Video channel space with supporting broadcasters and making their way into more homes.

8176 So we do believe that there are valuable ways that we’re contributing now.

8177 The challenge for us is we don’t track our libraries in the same way as defined by Cancon and the point system, and so there isn’t really a way for us to be able to say, okay, well, this is how much content we have that’s Canadian sitting side by side to a broadcaster or really even any other streamer because there’s no framework. And we would love to be able to work with you to say, okay, like what are the frameworks and the conditions for something to count as Canadian.

8178 We hope that to be part of the second part of the process so that we can come back and quantify that and so it looks more apples to apples.

8179 VICE‑CHAIRPERSON BARIN: I'm so happy to hear you say that, Ms. Grace, because that’s exactly what we’re trying to do.

8180 And I understand the position that you’re saying the Commission should not impose anything until we get to that point, but getting to that point requires in the way the Commission does things an open, public process to agree on whether these valuable contributions are going to be acceptable categories of contribution because ‑‑ and I hear you on wanting flexibility. Mr. Murphy, I heard you say “equitable”. But we need the ‑‑ in establishing the framework that we’re trying to build together, we want equity across the kinds of activities that the Commission should consider so that we can track and so we can then value them in a way that when we’re talking about an initial contribution, it’s easy to quantify.

8181 It’s not easy to quantify all of these contributions that you’re talking about today, and today we have an urgent public policy imperative to address.

8182 So having said that, I think I said to Netflix yesterday, it’s ‑‑ we have different phases in this process, but it’s iterative. So there are things that we can do now and there are things that we may be in a position to do later.

8183 So given that, I’d like to maybe ask you whether your position on an initial contribution at this stage in the process would change.

8184 MR. MURPHY: Yes. Thank you for the question, Vice‑Chair.

8185 We feel at this stage in the process it would be really early to come out with that outcome, and we feel like a really important step is to, you know, first work together to understand and help quantify the work that we’re doing week in, week out with Canadian artists and creators.

8186 And I think, you know, some of the innovation that music streaming has driven ‑‑ and again, going back to the two‑way conversation between our customers, you know, we’re putting content in front of them that we think they’ll like, they’re listening to things that we might not expect them to like and we’re calibrating and, you know, trying to find the right balance between what customers want and what the industry, you know, is delivering to us and that’s where our expertise comes in. And then how do we stand out from the crowd and everybody having the same set of songs, and that’s what’s forcing us in a really creative way, it’s an amazing part of the industry and time to be in, but we have to think outside the box. We have to think deep, we have to think broad across the whole country and not just, you know, through playlisting and out of home billboards.

8187 But for example, we have a program called “Your Voice is Power” that we’ve been working with Amazon Future Engineer and taking IT global with for the past two years which encourages coding skills within Indigenous communities in an eight‑part school curriculum to, again, learn coding skills through music that is a national competition and results in price winners that get the out‑of‑home billboards and support that we can also offer in addition to that.

8188 So these aren’t necessarily things that have been, you know, done before. We’re trying to innovate and do unique and impactful things at all levels grassroots all the way through to superstar artists that we work with. And that’s why we feel like the breadth of those initiatives and the complexity of them which, again, has come through the innovation of, you know, the music streaming landscape is why the ‑‑ it's really important to take the time to work with us and for us to work with you to help come up with a value for that so that we can start to understand how we’re contributing and, if needed, how we can do more to do more of the things that we’re doing.

8189 MS. GRACE: I might add, I understand and we recognize that some of our contributions are hard to value. It is true. But I think, you know, it was communicated in some of the other appearances that there are, though, some contributions that are not as hard to quantify.

8190 We keep track of our budgets, thank goodness. You know, we know what we spend generally on things, right, in Canadian content and production, in marketing investments. These are, you know, quantifiable by a dollar figure.

8191 The challenge for us is we just don’t have a shared language as between us and the broadcasters as to what Canadian is and what would count, so that’s what’s made it difficult for us. But I think that if we are able to achieve that, we should be able to work pretty quickly to come up with some numbers for you.

8192 VICE‑CHAIRPERSON BARIN: Thank you, yes. And I think part of the discussion with Netflix yesterday was on trying to quantify the activities that you do now based on the traditional categories that we have as a starting point, and those are fairly clear so we know what is acceptable as a direct expense, we know what is acceptable as a Canadian content program. And I think it provides a starting point, but I understand that the language is still ‑‑ or the definitions are still an issue.

8193 Okay. So you talked about international jurisdictions. And when I meet with international regulators, I want to say that we’re all aligned in terms of the direction, but we’re at different stages of our processes.

8194 So I understand that there’s ‑‑ there are regulators that aren’t imposing initial base contributions. Some may in the future. But there are some that are, and I’d like to touch on the French model.

8195 And I know that the MPA’s position was that it wasn’t a model that we should be looking at.

8196 First of all, I’d like to know or understand what your obligations are under the French requirements.

8197 MS. LANGLEY: I work really closely with my colleagues around the world with Prime Video legal, but unfortunately, I can’t speak to exactly what our French requirements are. What I can say is that it is extremely complex.

8198 The high percentages as well as the very specific buckets of different types of requirements that are included in it make it very, very challenging to comply with. And I think what it’s led to as well is high inflation in the creative industry. It's had impacts not just on streamers, but also on traditional broadcasters.

8199 And so yeah, I don’t know, Magda, if you have anything else to add on that.

8200 VICE‑CHAIRPERSON BARIN: No. Okay.

8201 I think our understanding is that there is an initial base contribution or a percentage and then there’s another layer, which is what you referred to as the complex layer, which has requirements that are targeted specifically to multiple areas.

8202 MS. LANGLEY: That's true.

8203 VICE‑CHAIRPERSON BARIN: Okay. So I have one last question. It's a general question, and it goes again to the task that we as a Commission have before us where we’re trying to achieve public policy objectives, some of which have no economic rationale because they’re not necessarily in areas that would generate any positive margins, let alone slim ones, and yet there’s a whole bunch of stuff that, as online streamers, you’re doing to contribute to the system, some of which we can consider under the current system that we have as real contributions and some of which are contributions that are different.

8204 And in ‑‑ I mean, we used to use this term in the past. Some of them are self‑serving. They really are in line with your business model, but ‑‑ and they make economic sense.

8205 So when you ask for flexibility, full flexibility on being able to count your contributions, are you taking into consideration this public policy set of activities that don’t make economic sense but which are really important and part of the mandate that we have under the Broadcasting Act to implement through our regulation?

8206 MR. MURPHY: Yeah. Thank you for the questions, Vice‑Chair.

8207 So obviously there's, you know, a number of objectives that you're trying to achieve and, you know, you’ve got a really difficult task on your hands, especially with everybody that you’re speaking to and lots of different voices from many different parts of the industry.

8208 You know, our view would be let’s work together and assess the contributions that we’re making and completely which ones and which objectives and criteria they’re meeting and then if there are any gaps and there are things that maybe are, as you mentioned, self‑serving and directly tied to an outcome for our business, this is where we’d love to work with you to see if that’s something that we can contribute towards directly where we feel like the expertise of our team, the speed at which we move, the data we get from customers who are using our services can help inform how best we can do that on behalf of, you know, Amazon Music and Prime Video.

8209 So that’s why I think the ‑‑ you know, this discussion is really important because there’s loads of great work that we’re doing, we all have the best interests of Canadian customers and creators at heart with our Canadian teams, so you know, we would love to get into detail about the work that we’re doing, how it’s meeting the objectives and then, if there are areas that there isn’t, you know, Amazon activity that’s doing so, let’s ‑‑ you know, give us a chance to see if we can do that and work with you on how we do it.

8210 VICE‑CHAIRPERSON BARIN: Great. No, go ahead.

8211 MS. GRACE: I was just going to say I support what John was saying and I do ‑‑ you know, we do make contributions to organizations like the Indigenous Screen Office, like Reelworld that we were mentioning before that aren’t investments to directly drive revenue back into our pocket, right. These are investments to help build and sustain the communities, the creative communities in Canada.

8212 So you know, we are supportive of taking activities that drive forward these broadcasting objectives that aren’t tied purely to revenue and I think one of the important things for us is, you know, we’ve also ‑‑ don’t think that revenue or revenue contributions is necessarily the best way for us to be able to participate or support the broadcasting policy.

8213 A good example of that is in news policy. I know that’s been a discussion over the last couple weeks.

8214 At Prime Video, we actually already use Prime Video to support Canadian newscasters and allow them to get their content into more homes. We offer multiple global news feeds as a part of the Prime membership program. We offer multiple city TV news feeds as part of the Prime membership program. And the reason we did that was, during COVID, we saw that customers wanted to hear more about what was going on in their communities and it was important for them for news, so you know ‑‑ and we continue that. We continue that to this day and customers really enjoy watching news on Prime Video.

8215 And so I think a contribution like that is an example of where having a little bit more visibility and understanding working together on how to value that within the system is an important part of the process for us.

8216 VICE‑CHAIRPERSON BARIN: Thank you very much for this discussion. I really appreciate it, and back to the Chair.

8217 THE CHAIRPERSON: Thank you very much. Thank you, Vice‑Chair.

8218 We will continue with Commissioner Levy.

8219 COMMISSIONER LEVY: Good afternoon. I have a couple of questions to just fill in the record to make sure that we’ve dotted our Is and crossed our Ts, and it flows a little bit from the discussion you’ve just had with Commissioner Barin.

8220 Other streaming services have said they would support initial base contributions going toward the Broadcasting Participation Fund and the Broadcasting Accessibility Fund. And I wonder whether you would be ‑‑ you know, I hear you when you say you don’t want anything to do with initial base contributions, but I just wanted to make sure that we’ve asked the question, whether you would support initial base contributions going towards these funds?

8221 MS. GRACE: We ‑‑ we don’t have perspectives right now on those specific funds. Of course, if it’s found that the base contributions can’t be made directly, if that doesn’t sufficiently satisfy the objectives of the policy, then we would definitely participate in evaluating what types of funds would be appropriate to contribute into, and would support the need to expand to a further and more diverse set of funds, certainly.

8222 COMMISSIONER LEVY: Following on that, what other funds do you think you would support?

8223 MS. GRACE: We’ve supported multiple organizations in Canada that, you know, support different diverse groups, BIPOC individuals, and so, we would be happy to work with you to help evaluate and share lists of funds that we’ve worked with, both on the Prime Video side and on the Music side, where we think that they can drive forward the objectives of the policy directive. And we would also look to you to help evaluate which funds would be most appropriate to do that, as well.

8224 COMMISSIONER LEVY: In your presentation, you highlighted some of the work you’re doing to amplify Canadian and Indigenous voices and music. Could you comment on whether Amazon would support a requirement that foreign online undertakings allocate a portion of their contributions to an audio fund supporting Indigenous music, or audio funds that support Indigenous music through their envelopes such as FACTOR and Musicaction?

8225 MR. MURPHY: Thank you for the question, Commissioner. So, we’re really proud of the work that we’ve done with Indigenous artists in the music industry. I think, you know, in the opening statement, the ‘Song Camp’ example, and then the ‘Your Voice is Power’ initiative that we’ve had are just sort of, you know, big examples that are great to speak to. But I also wanted just to highlight that we’re working to support Indigenous artists in the creative community, week‑in, week‑out. And in the homepage of the Amazon Music app, for example, we make sure that our Indigenous playlist is featured in a placement called ‘Featured This Week’. There’s allocation on our out‑of‑home billboards in Toronto, and many other ways that we work and support and create campaigns for the artists.

8226 So, the answer would be we are thinking and working with Indigenous artists, you know, in our day‑to‑day jobs, and I think we feel as though we’d be best placed to continue to do that, and work with you on the best ways to do that, before committing to whether, you know, there’s funds that need to be allocated from Amazon Music to do it. We feel that we are in a really good spot to go deeper and build relationships we’ve already been working with, and that would be where we would like to focus initially.

8227 COMMISSIONER LEVY: And finally, one of the directive is to lean in to best practices in other jurisdictions, and given that you have far‑flung responsibilities, for Canada, New Zealand, and Australia, which must be interesting, I wonder how you ‑‑ what the regimes in New Zealand and Australia are like, and how you participate in those jurisdictions.

8228 MS. LANGLEY: I actually support Magda in her work in Australia and New Zealand as well. I’ll say right now in Australia, they’re also ‑‑ they’re a little bit behind where you are in terms of they haven’t yet had legislation passed, but I think one of the things that we’ve really appreciated about that process is similar to this one ‑‑ it is open, we’ve had a lot of dialogue with regulators on this topic, there have been lots of roundtables, and so it’s the ability to be able to participate, collaborate, work on finding innovative solutions that meet the policy goals.

8229 COMMISSIONER LEVY: And you mentioned Denmark, Spain, and Netherlands as jurisdictions that have regimes that seem to mesh with your notion of how things could go forward here. I wonder what the chief characteristics are in those jurisdictions that you think that we should pay attention to.

8230 MS. LANGLEY: Yeah, absolutely, and I think it’s an important question, right, because each regulation has nuances. And so, the parts that I would draw your attention to, again, are really around the ability to either contribute to a levy or a direct financial contribution, to offset a portion of the levy with a direct financial contribution. And also, having a broad definition and broad eligibility criteria that’s very flexible, that allows different types of content and different types of contributions to be appropriately valued. I spoke with the Vice‑Chair about how we need to work on finding ways to value different sorts of contributions, and I do think that that’s incredibly important. It’s something that some of those have done very well. Thank you.

8231 COMMISSIONER LEVY: Thank you very much for your participation today.

8232 THE CHAIRPERSON: Okay. Thank you very much.

8233 So, perhaps I could just ask you to comment on something that we heard earlier this morning, and then I will turn it back over to you for any concluding remarks.

8234 So, maybe just to give a bit of context, and I think it sort of sums up what we’ve been talking about because my colleagues have asked a lot of questions about gaps and how to value contributions. So, we’re sitting before you, obviously, as the broadcasting and telecom regulator. We have been given a mandate by Parliament to put in place this new and modern broadcasting regulatory framework. You used the word ‘flexibility’. The Broadcasting Act tells us to regulate and supervise in a flexible way. We’ve used the words ‘flexible’, ‘flexibility’ more than a dozen times in the Notice of Consultation for this proceeding.

8235 But something that was said this morning that I’d just like you to react to. Somebody said, you know, flexibility cannot mean ‘do whatever you want’ when it comes to the regulatory regime. And I’m just wondering if you could respond to that?

8236 MR. MURPHY: Yeah, thanks. I think, you know, Amazon ‑‑ you know, the ‘do whatever you want’ ‑‑ we do what, you know, our customers drive us to do, based on, you know, how they interact with our services and how we work with the industry, and the things that they come to us as a, you know, key partner to support their music and their works, and we’re at the intersection of both of those things.

8237 So, you know, we would ask for flexibility to continue to be able to operate in a way that works closely with what our customers are telling us they love and they want to see from Amazon Music as a user, and also from the industry that we’re working with day‑in, day‑out as a ‑‑ you know, as I say, a key component of their campaigns and, you know, careers, hopefully. So, that would be a key piece for us, that that’s what, you know, ‘flexibility’ would mean to me, at least.

8238 MS. GRACE: I think one of the reasons that we’ve been encouraging the flexibility so much is we have a very different business model than the traditional broadcasters, and so it’s important for us to ensure that we can operate within the current business model that we have in the context of a regulated regime, and that’s why sometimes the contributions or the framework might look slightly different for different participants in the system, and they might contribute in different ways to different objectives, and so, I think those are the ‑‑ the key components of flexibility that we would be seeking that would be consistent with, I think, the ‑‑ with all the objectives that you’re seeking, as well.

8239 THE CHAIRPERSON: Okay. Thank you for those answers. I will turn things back over to you for any concluding remarks.

8240 MS. GRACE: Thank you again, Chair, Vice‑Chairs, and Commissioners, for having us here today. In closing, we wanted to reiterate five points. The first one, and maybe one of the ‑‑ the loudest, is that we do want to collaborate. We’d welcome the opportunity, together with the Commission, to work backwards from the outcomes that the Commission is seeking, to set those key metrics and develop a reporting mechanism that allows us to demonstrate the progress that we’re making together against your goals. We’re excited to create and innovate together. We’re committed to working together to identify new and innovate solutions that advance broadcasting policies.

8241 We believe that our services have value‑add to Canadian creators and broadcasters that go beyond direct financial contributions, like the work that we have done with Canadian broadcasters through Prime Video channels, and so, we would welcome the dialogue on how the Commission can fully utilize the opportunity that we bring to the table for the broadcast industry.

8242 We urge the Commission to take the time to set a flexible framework now that works in the long term. We’re in favour of an evidence‑based regulation, and believe it’s important that the Commission look closely at the investments and the programs that streamers have currently, and set the requirements to fill the gaps.

8243 And finally, we can’t stress enough how many benefits we see working with Canadian artists and creators. Our teams are really so privileged to work with incredible Canadian talent every single day, and we ‑‑ we want this momentum. And it’s our hope that this passion and commitment has come through to you today. And we look forward to sharing more about our process as we continue to work together on this. So, thank you.

8244 THE CHAIRPERSON: Thank you so much for your participation in the proceeding generally, for being here with us this afternoon, and for ending week two with us. So, thank you very much.

8245 THE SECRETARY: This concludes this week’s hearing. We will be back to‑‑ not tomorrow ‑‑ Monday.

‑‑‑ Rires

8246 THE SECRETARY: Monday at 9:00 a.m. Thank you.

‑‑‑ L'audience est ajournée à 14 h 11 pour reprendre le lundi 4 décembre 2023 à 9 h 00

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