Canadian Heritage Committee on May 25th, 2007

[The Chair, Conservative, Gary Schellenberger]

Okay. You have first go.

[Marc Simard]

Monsieur le président, let me just say a few words in English.

My wife is English, by the way. She is from Sudbury, Ontario.

We understand certainly that it is perhaps difficult for you to pronounce our names, but it would be very difficult for us to pronounce your name.

[Some hon. members]

Oh, oh!

[The Chair, Conservative, Gary Schellenberger]

I am Gary Schellenberger.

Thank you.

[Marc Simard]

Mr. Chairman and committee members, my name is Marc Simard, and I am the President of CKRT-TV Ltée, which owns CKRT-TV, the CBC/Radio-Canada affiliate in Rivière-du-Loup for the past 45 years. I'm accompanied today by Raynald Brière, President and CEO of Radio-Nord communications, which owns CKRN-TV, the CBC/Radio-Canada affiliate founded almost 50 years ago in Rouyn-Noranda. Also with us is Pierre Harvey, Executive Vice-President of CKRT-TV.

We want to thank you for taking the time to listen to us here today. We feel that your committee's work is essential in order to orient CBC/Radio-Canada's future activities and to ensure that all Canadians have free access to this public service.

Our submission will not deal with all the issues raised in this investigation of the role of a public broadcaster in the twenty-first century. We will be talking about certain issues of particular concern to us as CBC/Radio-Canada affiliate television stations in Quebec operating primarily in the regions for almost 50 years.

On June 2, 1952, the first test pattern (an Indian head) appeared for the first time on television screens on CBFT-Montréal, which presented its first program a few weeks later, on July 25. At that time, the Government of Canada and CBC/Radio-Canada wanted to make the French-language and English-language television service available to all Canadians free of charge and as quickly as possible. For economic reasons, CBC/Radio-Canada television was established in the country's large cities.

To extend its services to the regions, CBC/Radio-Canada, which did not have the financial resources, would have to call on local individuals or companies who would set up the first private television stations in the region, as affiliates of CBC/Radio-Canada, thus giving the vast majority of Canadians the country's first French-language and English-language television service.

In Quebec in particular, the arrival of television in the regions was made possible by major amounts of local capital and a colossal effort by people who wanted to develop their community by giving it an unparallel means of communication and exchange, television. At the same time, they were responding to the government of the day's desire to give all Canadians access to television as quickly as possible. It is worth nothing that most of these families are still active in the communications field today and that their contribution to extending and maintaining CBC/Radio-Canada television in the regions, even today, is inestimable.

[Raynald Brière, Executive Director, Radio Nord Communications]

The development of television in small markets in Quebec was facilitated by flexible regulations and the desire of the CRTC to bring the maximum number of television services to the regions. Subsequently, because of the great fragility of the small markets, the CRTC encouraged the owners of the television stations to obtain licences to operate television stations affiliated to the other two French-language television networks in Quebec in order to provide local populations with additional television signals and local services.

Now more than ever, the operation of regional CBC/Radio-Canada affiliates represents an essential contribution to the viability or profitability of all the television services offered in our small markets.

The French-language CBC/Radio-Canada affiliates in Quebec currently serve 20% of CBC/Radio-Canada's audience in Quebec. The markets of Sherbrooke, Trois-Rivières, Saguenay, Rouyn-Noranda and Rivière-du-Loup represent a total population of 1.4 million people aged two or more.

Taken together, the affiliates represent an audience of 4,300,000 viewing hours/week out of a total of 20,700,000 viewing hours/week generated by all the programming presented by CBC/Radio-Canada. That represents a contribution of almost 21% of CBC/Radio-Canada's total viewership generated by the affiliates in Quebec.

The five CBC/Radio-Canada affiliates have local production commitments of 15 hours and five minutes a week, representing a minimum commitment of almost 800 hours of local programming content a year.

Local programs consist primarily of local news, interviews with local celebrities and community bulletin boards for the many communities we serve. The local reflection is thus continually present, hour after hour and day after day, through the free messages on local activities in our communities or the advertising offering services or products available from companies in our regions.

Point 2 of CBC/Radio-Canada's mandate, as mentioned in the study themes and questions suggested by your committee, says that CBC/Radio-Canada must reflect Canada and its regions to national and regional audiences, while serving the special needs of those regions.

We think that CBC/Radio-Canada has fulfilled this part of its mandate very well, thanks in particular to the affiliates that serve a number of Quebec regions. We think that it is extremely important that the affiliate stations continue to fulfil their role by ensuring a regular, daily presence.

[Marc Simard]

Point 7 of CBC/Radio-Canada's mandate mentions that it must be made available throughout Canada by the most appropriate and efficient means and resources as they become available for the purpose.

We feel that the best and most effective way of attaining this objective, which we consider fundamental, is to continue to broadcast CBC/Radio-Canada programs over the air to all Canadians without exception. Indeed, even with the arrival of HDTV and other distribution platforms, all the countries of the world have chosen to continue digital over-the-air broadcasting.

Even today, in 2007, certain households still cannot receive cable or high-speed Internet, because they live in regions too far away from telephone exchanges or in areas that the cable companies do not consider profitable to serve. Even in the medium term, it is highly likely that these areas will not benefit from high-speed Internet or cable because of the cost involved. Moreover, many Canadians, including lower-income Canadians, do not want to pay to subscribe to a television service when the free signals they receive over the air suit them perfectly.

Economically speaking, it will cost our industry less to implement HDTV in a few years than it did, comparatively, to implement analog television in the fifties and sixties for the following reasons: developed transmission sites and access routes already exist; and the infrastructure, such as towers, antennae and buildings, already exist.

Obviously, when we assess the overall cost of implementing HDTV, it may represent a significant amount. However, when we consider the cost of replacing obsolete analog broadcasting equipment, which will have to be replaced in any case, this cost seems more acceptable and justified to us, given that it will make the first public television service available, free of charge, to all Canadians.

We fell that CBC/Radio-Canada, as the public broadcaster, should exercise leadership in the field of digital over-the-air (HD) broadcasting in Canada and thus set an example for the country's private broadcasters.

Once again, we firmly believe that no new platform or new medium will ever replace conventional television around the world. Indeed, according to a number of experts and observers, conventional television will continue to occupy pride of place among consumers as a mass medium for years to come.

If it is possible for the affiliates to renew reasonable affiliation agreements with CBC/Radio-Canada, we plan to invest to convert our broadcasting equipment to HD in a few years in order to continue to properly service the entire population of our regions free of charge.

[Raynald Brière]

As to the question whether CBC/Radio-Canada is able to fulfil its legislative mandate with the parliamentary appropriations and revenues it currently has, we feel that CBC/Radio-Canada will no longer be able to count on an increase in its advertising revenues in order to maintain its current level of service. Indeed, in Canada, and Quebec in particular, there is a great deal of pressure on conventional television's revenues because of the ever-growing competition from specialty channels and the attraction that the Internet exercises for major advertisers.

The key therefore is not an increase in advertising revenues, particularly in Quebec, but rather adequate funding from the Government of Canada. Better government funding of CBC/Radio-Canada will give it the financial stability it needs to better fulfil its mandate as a public broadcaster and at the same time allow the two private broadcasters in Quebec to evolve in a less crowded advertising market.

[Marc Simard]

As for section C, on the challenges facing the various CBC/Radio-Canada services, we want to emphasize the following elements of the programming offered.

Given that CBC/Radio-Canada has significant human, technical and financial resources and a mandate as a public broadcaster serving the Canadian public, the programs produced or broadcast by CBC/Radio-Canada should always be of high quality and offered free or charge, by over-the-air broadcasting, to all Canadians without exception across Canada.

That will not stop CBC/Radio-Canada from positioning itself on new communication or information platforms as it is currently doing. However, the principle of free and accessible service from CBC/Radio-Canada, financed largely by public funds, should be maintained by using digital over-the-air (HD) broadcasting for the next few years.

In conclusion, Mr. Chairman, these are the elements of our presentation that we would particularly like the Committee on Canadian Heritage to remember.

The affiliates of CBC/Radio-Canada French-language network currently serve 20% of CBC/Radio-Canada's audience in Quebec.

Twenty-one percent of CBC/Radio-Canada's viewership in Quebec is generated by its affiliates.

For 50 years, our CBC/Radio-Canada affiliates have been broadcasting local content during the vast majority of its station breaks, six times an hour, 18 hours a day, seven days a week, 365 days a year.

Local television has allowed our regions to forge their own identities by preventing them from being flooded by messages from the major centres like Montreal and Quebec City.

If the affiliates can renew reasonable affiliation agreements with CBC/Radio-Canada, we plan to convert our equipment to HD broadcasting in a few years in order to continue adequately serving the entire populace in our regions.

No other distribution platform, including the Internet, will ever be able to equal the technical broadcasting quality offered by digital over-the-air (HD) transmitters.

According to a number of experts and observers, conventional television will continue to occupy pride of place among consumers as a mass medium for many years to come.

As a national public broadcaster, CBC/Radio-Canada should exercise leadership in over-the-air HD broadcasting, setting the example for the country's private broadcasters. CBC/Radio-Canada should provide high definition conventional television, free of charge, to all Canadians without exception.

Finally, Mr. Chairman, we would like to mention that, as an affiliate, we want to continue playing the role that we have played over the past 50 years.

[The Chair, Conservative, Gary Schellenberger]

Thank you for that.

Now we switch to Mr. Morin.

[Sylvio Morin, Spokeperson, Coalition pour la radiotélévision publique francophone]

Good morning, Mr. Chairman and committee members.

With me is François Lewis, who is a member of the coalition's steering committee and President of the Syndicat des techniciens et artisans du réseau français de Radio-Canada. He is an active member of the coalition. For my part, I am the coalition's spokesperson, although that is not how I earn my living. I am a contract employee of the Télé-Québec public network in Quebec. I am organizing a magnificent international competition called “La Dictée des Amériques”. I won't be telling you about the dictation today.

And I'm going to stick to the rules and keep my presentation short, so we have more time for questions.

The Coalition pour la radiotélévision publique francophone was established on December 14, 2005, on the initiative of the unions and associations that represent the employees of the French-language arm of the CBC/Radio-Canada—radio and television—as well as Télé-Québec. It is made up of individuals and organizations representing various sectors of Quebec and Canadian society that consider public broadcasting to be an essential service, an invaluable tool for democracy and social development.

Essentially, we want to argue in favour of the public radio and television broadcasting system consisting of the large CBC/Radio-Canada network as a whole and, to a lesser extent, Télé-Québec and, in Ontario, the small TFO network.

What are the coalition's objectives? The coalition wants to raise public awareness and put pressure on decision-makers so that: a stop is put to any weakening of French-language public broadcasting; a public debate is held on the future of French-language public broadcasting; French-language public broadcasting receives adequate and stable funding; public funding for private independent production is not done at the expense of French-language public broadcasters; the system of public funding for French-language television production is recognized so that the broadcasters have access to all available production grants; French-language public broadcasting has the means to promote distinctive in-house production, using its most valuable asset, the tradition and expertise of its craftspeople, in order to preserve our cultural heritage; residents of all regions, and all the various groups that make up Quebec and Canadian society, enjoy high-quality, pluralist services free of charge from public broadcasters.

On these points, I have just heard the words of my distinguished colleagues, and I believe we are quite in agreement.

In the coalition's view, the facts clearly show that general-interest public broadcasters are still the heart of the Canadian broadcasting system, and guarantee its uniqueness. The current system cannot continue without substantial involvement by government in its funding, whether through grant funds or general interest public broadcasters.

The regulatory framework for the Canadian broadcasting system should reflect this undeniable reality. More specifically, the coalition believes that general-interest public broadcasters must have the same access to grant funds, on the same conditions, as the so-called independent producers, which, incidentally, are not independent in the slightest because they are dependent on public funding. Moreover, today I'm going to make a statement that will surprise you, committee members: all television production in Canada, particularly in the Francophone community, with the exception of information and public affairs programs, is financed out of public funds.

When we hear Pierre Karl Péladeau say that it is unfair that CBC/Radio-Canada receives public funding and that is unfair competition, that's rubbish. Moreover, we saw what happened when Shaw Cable and Vidéotron decided not to pay their contribution to the Canadian Television Fund. Vidéotron pays $14 million into the Fund, but it gets $18 million back. So don't tell me that private television isn't receiving public money. That's an unmitigated lie.

In addition, the broadcasting rights for subsidized productions should belong to the institutions that provide the subsidies and assume the marketing risks, that is the grant funds and the general-interest public broadcasters. Technological developments have made it possible for productions funded by the government with commercial risk shouldered by the general-risk public broadcasters to cannibalize the Canadian broadcasting system if they are widely broadcast via unregulated media such as the Internet.

The coalition considers that the government must make recommendations, or impose requirements, for stable, multi-year public funding for general-interest public broadcasters. Situated as they are at the heart of the Canadian broadcasting system, the general-interest public broadcasters are trustees and guarantors of the public property represented by almost entirely subsidized production, which is the key characteristic of the Canadian audiovisual industry.

The coalition also considers that the CRTC must insist to the government and to the general-interest public broadcasters that the latter themselves produce a significant portion of the audiovisual content they broadcast in order to maintain a high level of competition and quality throughout the industry.

Thank you.

[The Chair, Conservative, Gary Schellenberger]

Thank you for that.

We're going to start the questioning with Mr. Angus this time.

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

Thank you.

I come from the Témiscaming region, in Ontario, and my riding is Timmins—James Bay. So I know CKRN in Rouyn-Noranda well.

This morning, I would like to talk about the necessity of a long-term plan for

the transmitters for HD. In particular, it's been raised that we have right now an analog system, we have analog towers, and we have to start the transition over.

I'm hearing from you that it is much more cost-effective to go to HD transmitters. Is that correct?

[Marc Simard]

Mr. Angus, the introduction of HD television through a system of transmitters definitely involves additional costs that the small stations in particular would have to pay if we headed toward that broadcasting method.

However, that is not the most economic system, and we admit it. But we think that the television programs of CBC/Radio-Canada, as the first French-language network in the case of Quebec, or Anglophone network in the other provinces, should be accessible free of charge to all citizens and that, in spite of everything, even if there are higher costs involved in converting our transmission equipment, that is the best system because CBC/Radio-Canada's mandate is to reach all Canadians, free of charge, if we, as small affiliates in our regions, are able to continue signing reasonable agreements with CBC/Radio-Canada.

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

Go ahead.

[Sylvio Morin]

I would like to give you a less technical point of view on that subject. The act governing CBC/Radio-Canada states that all Canadians must have access to the corporation's service. I'm talking about the Francophone side. The same is true for Anglophones in Canada as a whole. That reality also exists for Francophones outside Quebec.

We're now being told that not only will the over-the-air signal no longer be accessible, but it will be through a digital system, and thus by cable. All Canadians will therefore have to subscribe and pay cable fees. If they want to have access to other CBC/Radio-Canada services—for a number of years now, CBC/Radio-Canada, especially the French network, has moved toward convergence of new platforms, in both radio and television and with Internet sites—Canadian taxpayers, who are already paying taxes in order to have CBC/Radio-Canada services and programs produced by the private sector, but financed out of their taxes, will then have to pay even more, in particular through satellite and cable services, to get CBC/Radio-Canada service. No later than yesterday, I paid my Vidéotron bill. I paid $94 for high-speed Internet, digital television service and cable. If I want to watch Radio-Canada, I have to pay more. Under the act, unless it has been amended, Radio-Canada will have to find the financial or technological means to ensure that the signal and services are available free of charge to all Canadians.

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

Well, this raises the larger question that we're discussing in our hearings. If we're moving just to subscriber fees, where you have to have cable in order to access....

We have the situation in the west where if you're a francophone--and just over the last few years, Alberta has had 50,000 new francophones--you have to pay extra on your cable fee to get francophone services. They're up in the range of 300, 800, 900 channels. If we're looking at CRTC deregulation coming, we're looking at what impact that will have on how people access it.

So on this question of HD transmitters, I really want to get it clear. Industry Canada is promoting this. Is there a plan in place? Do you have a sense of the finances that will be necessary in order to ensure that anyone in this country can access, on channels 2 to 13 or whatever, francophone CBC services or anglophone CBC services over the air?

[Marc Simard]

That's somewhat what I'm saying, Mr. Angus. Even though we are required to pay additional costs, we think it is extremely important that CBC/Radio-Canada continue offering the service over the air.

Sometimes we think that the cost of introducing television by transmitter has been exaggerated. We're not talking about all the studios that will have to be set up in any case. We're just talking about over-the-air transmission using transmitters. The whole infrastructure is already in place: the towers, buildings and so on. That infrastructure is good and will remain. CBC/Radio-Canada owns a number of places. In a single tower, it has FM antennae; it rents space.

In many cases, the analog transmitters currently used should be replaced. Even if there were no transition to digital, in a number of cases, the transmitters would nevertheless have had to be replaced by new transmitters. Today, an HD digital transmitter costs the same as an analog transmitter. For the range of the CBC/Radio-Canada network, it would be important for over-the-air transmission to continue.

[The Chair, Conservative, Gary Schellenberger]

Thank you.

Mr. Scott.

[Andy Scott, Liberal, Fredericton, NB]

Thank you, Mr. Chairman, and thank you everyone.

I want to continue exploring. I should say I grew up on an affiliate, CHSJ in Saint John.

In recent years, resource restrictions have put great pressure on CBC in our part of Canada, in New Brunswick, and I just assumed that it had something to do with the fact that we were no longer being served by an affiliate. So I understand your arguments.

But I should say this: you're really the first to say--I think it was Monsieur Brière who said it--you believe CBC/Radio-Canada have fulfilled their mandate in terms of the regions. I think I heard you say that. Certainly that is not what we've heard—

[Raynald Brière]

That's not entirely what I said. Pardon me if I expressed myself poorly. I said that, as an affiliate, we are able to carry out the local programming mandate, better than Radio-Canada has done in the past. That's our business, that is our purpose. We serve the regions exclusively. We don't have any television stations in the major centres; we only have television stations in markets of 150,000 to 200,000 persons. The local programming and information mandate that CBC/Radio-Canada confers on us is thus clearly central to our business.

The difficulty we've been having for a number of years is that the agreements with Radio-Canada are increasingly hard to negotiate, and funding has been reduced. There's considerable pressure on us to cut services. The fact is that we have fewer resources than we did five years ago. The last negotiations that we had with CBC/Radio-Canada resulted in a 30% reduction in revenue for us.

Radio-Canada is faced with two choices: either it takes back its local stations and exploits them, or it hands them over to affiliated stations, while providing them with the necessary resources. I don't think there is any other solution apart from those two options.

[Andy Scott, Liberal, Fredericton, NB]

Mr. Simard, do you want to add something?

[Marc Simard]

It must be clearly understood that the amounts of money that are paid to us by CBC/Radio-Canada are ultimately only part of the revenues from network sales. In the Province of Quebec, as in the other provinces in Canada, CBC/Radio-Canada sells advertising for the entire province and remits only a portion of it to us. As affiliates, we broadcast that advertising sold by CBC/Radio-Canada and it remits a portion of the advertising revenues to us; it keeps a portion for itself. The amounts that we receive are already coming from advertising. Unfortunately, a few years ago, Radio-Canada reduced the portion of those revenues that it remitted to us.

Virtually everywhere in Canada, regional television may still remain a very strong essential component in providing good service to Canadians. We have been around for 50 years; we are established, and we know our market. We simply want to tell you about the importance of the role that we play and that we would like to continue playing.

[Andy Scott, Liberal, Fredericton, NB]

I think there's some dramatic irony there. It was probably just the timing. We lobbied for so long in New Brunswick to get the CBC studio and then got out of CHSJ. It happened just at a time when there was incredible pressure on the CBC. I guess, as we'd say en anglais, be careful what you wish for.

In any event, one of the concerns I have is with regard to the coexistence of over-the-air transmission and everything else that will be available. I think we're going to recommend to the national broadcaster that in order to be relevant and keep up and all of those other things, they have to be in that other space as well.

So at what point will it become a problem thinking about the intent of the service for everyone when the service is so different? As you bulk up on one side, do more and more on one side, when does that become stressful?

[Sylvio Morin]

Last week, the CRTC made an announcement on the issue of general-interest television stations, airwaves and the switch from the analog to the digital system by 2011. If I understood you correctly, Mr. Scott, you are saying that the Canadian Heritage Committee will tell the CRTC that what it has decided is no longer right and that we are going to maintain the over-the-air system. Last week, we were rejected in that respect. The CRTC decided that, starting in 2011, there would no longer be any obligation, for the CBC/Radio-Canada in particular, to maintain the over-the-air system. A little clause is added saying that, for the isolated regions, we'll see. Are you saying that the committee will reverse that decision. The decision was made by the CRTC no later than last Friday.