Canadian Heritage Committee on Sept. 27th, 2006

[Richard Stursberg]

As I mentioned in my opening remarks, the thing that preoccupies me the most is that English Canada is the only country in the industrialized world that prefers other people's entertainment programming to their own, by an overwhelming margin. So all the things that English Canadians consume by way of drama, comedy, series, whatever, is American. That's what it is.

To my mind, this is the most fundamental cultural challenge in English Canada. English Canadians read English Canadian newspapers. They prefer English Canadian sporting events. But when it comes to entertainment programming, whether it's on television or in feature films, they overwhelmingly prefer the products of another country. It means that their imagination is completely preoccupied with other people's stories.

The CBC is the only big broadcaster in English Canada that is in any position to be able to deal with that effectively. The schedules of all the American--sorry--Canadian networks.... I called it the American networks because essentially that's what they are--whether it's CTV or whether it's Global or whether it's CHUM, they're completely populated in deep prime time, which is when Canadians are actually watching television, with U.S. shows. They can't get out of that. If they were to attempt to get out of that, they would completely destroy the economics of their business.

The CBC, as Bob pointed out, is the only broadcaster where deep prime time is actually available for Canadian shows. Having said that, the economics of this is brutal. To give you a very straight-up example, if I want to buy an hour of high-end dramatic programming right now, I can buy an American program that would cost $3 million to $4 million an hour to make, for $200,000. At $200,000, I can put it on TV and make $425,000 in revenue. A parallel Canadian program, even if I'm not even in the same ballpark--despite the fact that whether we like it or not, we will be judged by the same production standards as American programming--is going to cost me, say, $1 million to $1.5 million to $2 million an hour. What can I recover by way of revenue? Maybe $120,000 to $150,000, because of the relative performance of the programs. Big problem. Filling this financing gap is a huge, huge problem.

Back to your earlier question, then, to tie it back to sports. You asked earlier on, what is the composition of the revenues of English television? English television is now about $580 million in total, which includes Newsworld. Of that, about $275 million would come from the public subsidy, and about $305 million comes from earned revenue. In other words, about 55% of our total money is earned and about 45% actually comes from public subsidy. Of the earned revenue, approximately $200 million comes from advertising. And if you were to split that into pieces, about half of that would come from professional sport.

So if we're out of professional sport, the first problem is we have a huge hole. The second problem is, as Bob points out, you have hundreds of hours of programming that was previously filled with professional sport that you now have to fill with something else. But as I was saying, if you want to fill it with the stuff that really matters, whether it's documentaries or whether it's Canadian drama or Canadian comedy, it's enormously expensive to do that. So we face a double problem. One is the loss of revenue and the other is the costs of finding replacement programming.

You're absolutely right when you say that if this piece were to move out in a significant way, then the economics of English television would be challenged at the most fundamental level.

[The Chair, Conservative, Gary Schellenberger]

Thank you for that answer.

We're going to go on to another round, because I found both the questioning and the answers quite interesting.

Mr. Bélanger.

[Mauril Bélanger, Liberal, Ottawa—Vanier, ON]

I want to follow up on that.

When you described sports, what Mr. Abbott was referring to was Hockey Night in Canada. There are other sports. I gather you've secured World Cup soccer--I don't know for how long--and there may be others, so that's fine. If Hockey Night in Canada were to migrate, or even without it migrating, the notion of public television in this country has to be addressed in a rather straightforward manner because of the numbers you have just given, which I had heard before. At that time I thought it was 54%. Now it's 55% that's earned, roughly.

The question I think the country must come to grips with, and not just Parliament, is whether we want publicly funded public broadcasting or not. If we do, how much is it going to cost and how much are we prepared to pay?

Would you care to comment?

[Robert Rabinovitch]

I would like to circulate two sheets to the committee. One is on per capita public funding for public broadcasting for basically all countries, just so we can put it into context. On the second sheet, because on and off we ask what is a public broadcaster and what does a public broadcaster do, we've chosen BBC, ABC, RAI--I can't figure out this other one--and we look at the percentage of their schedule that goes into drama, sports, news. I give it to you for information purposes because if we're going to have a discussion and a debate, we should look at what other countries do and what Canada has done historically in order to decide exactly what the answer is. Quite frankly, that's why to me the mandate review was so important. I can't say I want to get out of this or that, but I can say I can't do this or that unless we're ready to put the money into it. So the mandate review is an opportunity to define what a public broadcaster is at this time.

[Mauril Bélanger, Liberal, Ottawa—Vanier, ON]

The common thing around this committee and with the resolutions that have been put forward and supported unanimously by the House, apart from the wish and the acceptance by the House of this committee having an opportunity to comment on the terms of reference of whatever mandate, is there's a distinct desire on the part of this committee that whatever mandate review structure is chosen must have very broad public consultations. I can't imagine CBC or Radio-Canada not supporting that.

Let's go beyond that a bit. If indeed we are at somewhat of a crossroads--and we've been coming to this crossroads with convergence, fragmentation, the standstill in and therefore proportionately declining public funding--couldn't CBC/Radio-Canada itself, since it has a wide access to or range with Canadians, use its own resources to engage Canadians in that debate to the benefit of public broadcasting in the country? Is it something that you have or would be prepared to consider?

[Robert Rabinovitch]

Monsieur Bélanger, it's something that we do on a regular basis. We have everything from focus groups to comprehensive surveys to discussions with leaders, but at the end of the day, it is the government that must decide what we should and shouldn't be doing.

[Mauril Bélanger, Liberal, Ottawa—Vanier, ON]

That's what scares me right now, honestly, because with all due respect, Mr. Abbott signed the minority report when he was in the opposition, commenting that perhaps we should commercialize English television. Those are realities and we have to face up to them. What you're talking about is not massive public consultation or involvement. I'm talking about using the tools of broadcasting, whether radio or television, to reach out, because my understanding is that over 90% of Canadians support public broadcasting and support paying for public broadcasting in this country. Let's see if that's there, let's see to what extent it's there, and let's see if indeed CBC is, or remains, the chosen vehicle for the public broadcasting. I can't imagine a country such of ours in which we wouldn't have public broadcasting à la CBC/Radio-Canada.

I'm trying to see here if perhaps Radio-Canada/CBC could be more actively engaging Canadians in that debate at this time.

[Robert Rabinovitch]

As you know, from time to time other bodies independent of us—because there's only so much we can do that's self-serving—have undertaken very significant surveys, and the numbers supporting the public broadcaster are extremely high. Some people want radio, some want TV, some want English, some want French. Almost all Canadians find something they like. And as you know, our Internet services are the most popular among the Canadian Internet services. So we have a lot to be proud of and we have a lot of voting by people actually using the service. But that doesn't translate, quite frankly, into the financial support that we need. As Jane said before, we have six million Canadians who do not have an English radio service that they can call their own, and our service is very local.

In fairness, I think the mandate review is a logical way to go about that in terms of deciding how and where and what we should be focusing on.

[The Chair, Conservative, Gary Schellenberger]

Before we go to Mr. Kotto for the next question, I am advising everyone that the bells will ring at 5:30. There is a vote this evening. After Mr. Kotto's question, if he can keep it relatively short and you folks can answer relatively briefly, once the bells ring we will adjourn this meeting.

[Robert Rabinovitch]

Thank you, sir. I think we have all enjoyed it. This is the type of discussion we must have with parliamentarians and with the public. At any time you wish, we will make ourselves available. If you want to focus on one service or another, we can do that. If you want to talk with us independently, we are more than willing.

[The Chair, Conservative, Gary Schellenberger]

Thank you.

I do have a few questions of my own, but being the chair I always come last. So if the bells ring I will forward my questions to you and hope for an answer.

Thank you.

Mr. Kotto.

[Maka Kotto, Bloc, Saint-Lambert, QC]

Thank you, Mr. Chair.

First of all, I would like to reassure my colleague, there were two motions. The first one of concern to us was about a project to redefine the mandate of the CBC and would have been an initiative of the Minister of Canadian Heritage and Status of Women. The second motion, which was adopted by this committee, asked that this committee review the mandates of crown corporations, including the CBC. We will therefore see each other again shortly, and we will have still more questions to ask you.

I would like to come back to the issue of the cultural and language duality, especially with regard to television. This is something we discussed during the review of the film policy that we conducted during the previous Parliament and which dealt with market differences.

It is an unfortunate fact that our anglophone friends in Canada share a common language with people in the United States. This is probably the source of the CBC's weakness. The film industry also suffers from this, with Canadian films garnering barely 1% of the market share, whereas Quebec films control close to 18%, or even 20% of market share.

In your view, given the rumours that public funding will be removed from the CBC, will this have an impact on the Société Radio-Canada?

[Sylvain Lafrance]

Naturally, there is a close connection, given that this is a single corporation. You are right that these two environments are different on a number of levels. I do not believe that it is only a question of language protection. There is the issue of history in Quebec, which has an impact not only on Radio-Canada/CBC, but also on a number of cultural industries. You talked about film; there is also music.

Quebec has a quite strong star system that has a great power of attraction. The Quebec television industry—I am not only talking about Radio-Canada—has met with enormous success, not only in society as a whole, but when compared to other television industries, also in the area of culture. I know very few cultural businesses that have such high retention rates. It can be easily estimated that, yesterday evening, 75% of Canadian francophones watched a French-language television program that was produced here. That is an enormous audience retention rate for a cultural industry, and that is important.

I believe that there is a consensus among Quebec broadcasters on the importance of the industry and the need to maintain this force, which is enormous. There is a convergence of views among independent producers as well as broadcasters on the importance of rallying around the major objectives in order to maintain this successful industry.

I am not sure if that answers your question.

[Maka Kotto, Bloc, Saint-Lambert, QC]

That answers my question perfectly and brings me to question my colleagues here today.

Certain facts are obvious and cannot be denied. Were the government to withdraw its financial support from the CBC, that would have an impact, but there would also be another one. The Canadian anglophone population would be condemned to an acculturation, to a cultural alienation, even as regards what comes from the United States.

Was the entire debate following the Lincoln report in vain? These are the kinds of questions that will have to be asked when we study the redefinition of the Radio-Canada/CBC mandate here. These two issues must be linked together, in this case the financial and the cultural issues.

[Richard Stursberg]

I have just one little comment. What you say is completely correct, and what Sylvain says is completely correct. We live in two different worlds, utterly different. Everything goes, frankly, very well in French: people watch Canadian television shows; they watch Canadian movies—it goes very well. In English, it goes very badly. And that is not a new problem; it is an historical problem, and we find ourselves struggling in very difficult circumstances.

To be honest with you, I would find it, as I understood the premise of your question—whether, if the government were to decide to withdraw from financing the CBC, that would have consequences for Radio-Canada.... The idea that the government would withdraw financing from the area that is having the greatest struggle to define itself and to define its culture, given the very reasons you've mentioned—the proximity of the United States and the sharing of a language.... To retire from there but continue to finance where it's going very well would seem to me a kind of bitter irony.

[Jim Abbott, Conservative, Kootenay—Columbia, BC]

I think it's very important to get on the record—

[The Chair, Conservative, Gary Schellenberger]

Mr. Abbott, excuse me. It's not your turn. We're not in a debate.

[Jim Abbott, Conservative, Kootenay—Columbia, BC]

I mean no disrespect, but I can't let Mr. Kotto's assertion go unchallenged.

[The Chair, Conservative, Gary Schellenberger]

Excuse me, but I think we have to. I think you can challenge Mr. Kotto in the hall. We have a format that we go by, sir, and I have to go by it.

[Jim Abbott, Conservative, Kootenay—Columbia, BC]

I'm sorry, but what Mr. Kotto has said is an absolute, complete fabrication, and I don't understand why he would have said it. The Government of Canada has no such intent, and I want to get that on the record of this committee.

[The Chair, Conservative, Gary Schellenberger]

It's on the record.

[Jim Abbott, Conservative, Kootenay—Columbia, BC]

Thank you.

[The Chair, Conservative, Gary Schellenberger]

I was going to relate to that, to say that I think it might be a fabrication. As the chair I'm impartial, but I have heard nothing from the government that has ever indicated anything like that.

[Maka Kotto, Bloc, Saint-Lambert, QC]

Mr. Chairman, I said it was a hypothesis.

[The Chair, Conservative, Gary Schellenberger]

Well, then, it's hypothetical. Fine.

With that, thank you very much for attending today. I appreciate it. I found it very interesting.

I now call this meeting adjourned. Thank you.