Canadian Heritage Committee on Feb. 8th, 2007

[Vincent Leduc]

There's something interesting in the whole thing, if you make it the fact that the fund is a public-private partnership and x amount of money comes from Heritage Canada, the Government of Canada, and x amount of money comes from the BDUs—or EDR—and that's 40-60, or whatever. The point I want to stress is that we're independent producers. Whether my show ends up on TVA, CBC, Astro, CTV, or Global, they're not all the same, but to me the important thing is that an independent producer produces it and that the diversity of creation is respected. That's what the fund does. I don't know what everybody has said, but CBC or SRC do not directly access the fund; it's always through independent producers. As we represent independent producers, I don't think we can be asked to change that.

[Charlie Angus, NDP, Timmins—James Bay, ON]

This will be my final question.

If we go back to the genesis of this fund, when the cable giants were allowed a massive bump-up in subscriber fees and deregulation to compete against the satellite competition, fundamentally they did not want to have to compete. They wanted their markets protected, so they were given a major bump-up in subscriber fees. Then, when the original cable production fund was initiated, the compromise was that they were allowed to keep 50% of the extra profit that they were given because of this, and the other share would go into television production. If now they want to renege on this compromise contribution, would it not be fair to say that they have made massive amounts of money over the last 10 to 12 years on the 50% share that they've kept as an extra profit?

[Guy Mayson]

I think it's fair to say that, yes.

[Charlie Angus, NDP, Timmins—James Bay, ON]

Okay, thank you very much.

[The Chair, Conservative, Gary Schellenberger]

Thank you.

Mr. Fast.

[Ed Fast, Conservative, Abbotsford, BC]

Thank you, Mr. Chair.

I want to follow up on what Mr. Angus just said.

I'm glad, Mr. Leduc and Mr. Mota, that you also touched on the history of this fund. So did Mr. Barrett before you. The fact is that the CTF was established originally, at least partly, because the BDUs wanted to increase their subscriber fees in order to, presumably, reinvest in their businesses. As a quid pro quo they were required to contribute to the original cable production fund.

As that morphed into the CTF, and the government poured $100 million per year into the program, that appeared to work well. If in fact there's a backpedalling right now on the part of Vidéotron and Shaw, it will be a very interesting discussion to see whether there's a re-establishment of more regulation, because ultimately, when you look at the history, that's what first birthed this particular fund.

I also wanted to correct some misinformation that came out at this table earlier from Ms. Fry. That was the suggestion that somehow Vidéotron and Shaw are presently in actual breach of the regulations or the law. My understanding is that there is some issue about the monthly payments that are required actually being a result of a circular issued by the CRTC, and not being a legally enforceable payment requirement. Ultimately, we know that at the end of the summer that funding period comes to an end, and we believe there is an obligation for those two corporations to fund the program.

The other suggestion was that the minister had not been doing her job. We've already heard from the CTF itself that in fact they have met with the minister. We know that the BDUs, Shaw and Vidéotron, have met with the minister. You've met with the minister. We also know the minister has just recently committed to continue the federal government funding over the next two years, to the tune of $200 million. That, to me, sounds like a minister who's actually engaged.

Arising out of the meetings that you've had with the minister, is there any indication from her or from anyone on our side, the Conservative side of this table, that we are not supportive of continuing that fund?

Mr. Mayson.

[Guy Mayson]

I'd like to comment on that just quickly, because I totally take your point and agree that particularly the announcement of the renewal and the time that it was made were an incredibly important signal to the industry. It was symbolic. We've been looking for this for some time, and we were very pleased to see it come at that time, because it was a very important reaffirmation of the fund. We wrote to the minister thanking her for the leadership she showed on that.

I think the reason this is perhaps difficult for her is simply that the immediate recourse here is really through regulation, through the regulator, and she's trying to get a handle simply on the implications of that. It's a very complicated issue, there's no question, but at the same time it looks to us like an assault on the regulation. Your original point was that these regulations are important, and probably it's important for the fund to be reaffirmed.

It is a public partnership. Mr. Kotto's comment about there being a war between the public and the private sector is very worrisome, I think. It's a public-private partnership, and it's important for the partners to get together again.

[The Chair, Conservative, Gary Schellenberger]

Mr. Warkentin, go ahead, please, for a very short minute.

[Chris Warkentin, Conservative, Peace River, AB]

Thank you, Mr. Chair.

I just wanted to follow up on that with regard to the legislation. You were under the understanding that the contributions to the CTF are not actually legislated in law, that it's simply a requirement of the regulator: It's regulated through that process; it's not actually something that's legislated into law, and therefore the minister actually doesn't have the power to enforce regulations. She can recommend to the arm's-length CRTC to enforce their regulations, but, really, the minister doesn't have the ability to strong-arm anything until the CRTC makes a decision independently of her. Is that your understanding as well?

[Guy Mayson]

I think she's trying to be respectful of the relationship with the commission. That's probably their first stop for this process, but I think there's some symbolic value in reaffirming the fund, the partnership, at the same time.

[Chris Warkentin, Conservative, Peace River, AB]

Yes, certainly, and I think the minister will continue her symbolic work to bring the people together. We do appreciate the work that you're continuing to do, even in this tough and difficult situation. Of course we are all very supportive of Canadian broadcasting and the development of production here, so we appreciate your work and will continue to work with you.

Thank you.

[Vincent Leduc]

I have no personal information, but we read in this morning's La Presse that the minister has asked the CRTC to look at the matter. I think I read that in La Presse.

[The Chair, Conservative, Gary Schellenberger]

Okay.

I must thank you. We have another committee that is to start shortly after us, so I thank you as witnesses for being here today, and may we all work together to bring a successful conclusion to this problem.

[Vincent Leduc]

We're counting on you, Mr. Chair.

[The Chair, Conservative, Gary Schellenberger]

Thank you.

The meeting is adjourned.