Canadian Heritage Committee on May 25th, 2007

[The Chair, Conservative, Gary Schellenberger]

Thank you for that.

We're going to try to keep the questions and answers short so that we can get all around the table.

Mr. Angus.

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

Thank you.

Thank you for your presentation. I believe that today's conversation will be profitable. Of course, we've been told that we had to increase funding, contribute to the development of television drama and variety shows, and we've listened to that message. However, today I would like to discuss the need to develop a plan for new media.

We have heard from our good friends at Vidéotron that they would like to change the CTF because they think they are being hampered in their ability to take programming and have it in all the multi-platforms because of the rights issue, and they would like to have all the ancillary rights.

There is another question we also have to raise. We've seen that the entire catalogue of the BBC can be viewed at any time of the day or night because the BBC has all its rights. Wherever you are in the world, you can watch BBC.

And yet we still have a system here in Canada in which we're paying for shows that may be shown two or three times, and then they sit in a vault. Clearly, our question has to be how we can be ready for the 21st century if we haven't addressed that issue. We've been trying to get an answer here about how we get our programs into every multi-viewing platform.

Some of the broadcasters blame the producers, and some of the producers blame the broadcasters.

We don't know what the financial value of online viewing is yet. It's all speculative. But is there not a simple percentage formula that can be worked out to ensure that a production, if it's independent, can be shown forever and a day, based on a percentage basis, or shown for 10 years, or five years, so that at least we can be assured that the product is available online wherever?

[Claire Samson]

I guess somewhere there is a solution. A year and a half ago, the APFTQ started working with a committee on new rights and new platforms. We've done our homework. We've had some research done and so on as to what the models in the world were and how they were working. We tried to look outside the box. We prepared a report that we submitted to all broadcasters in Quebec, and we had the opportunity to discuss this with them.

Of course, as you're saying--and you're quite right--the economic model is not known yet. Who's making money in all of these things, in YouTube and all of these other manifestations we see around the planet, we don't know yet. But of course we are open. The producers have clearly stated to the broadcasters that we are open to looking at the new economic model. We're willing to discuss this with the rights holders, who are the writers, comedians, directors, and so on. And we're willing to explore a model of sharing the revenues of those new platforms. But so far, no broadcaster has come back to us and said, all right, what would be a fair way to look at that? What should be left to the broadcasters? What should go to the rights holders? What should stay with the producers? So far the reality is that right now the broadcaster asks the producer for all of the rights forever.

We can't sell them. In the actual legal framework of labour relations in Quebec, it's not something we can sell because it's not something we have. All we have are licences to exploit a product on XYZ platform. That would means for us reopening the entire way of doing business that has been going on for the past 40 years. It's not going to happen soon. It's not something that can be done within weeks or months. It can only be envisaged if we feel somewhere that the broadcasters are willing to be a part of the discussion. We cannot determine that by ourselves. So far we have no signals from the broadcasters to do that.

We do feel that CBC/SRC should, as a matter of fact, exercise a certain leadership in that particular case. It's the public broadcaster. If CBC/SRC were to take the leadership as to how it's going to work in this new environment, it could certainly open the way for all of the other broadcasters, be they Vidéotron, COGECO, or Shaw.

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

This is my concern here, because through Parliament we support probably half a billion dollars a year in development of product. Again, I can't see why we're paying for product if people aren't going to be able to see it in this new world. It just seems like a complete waste.

So is it a necessity for government to step up to the plate through our funding agencies to insist on a percentage-based agreement, and to insist that if you're going to make a production, we're not going to have two shows, that it's going to be available if people want to watch it on their shoe phone?

Is there a model out there? We've heard a few thrown about. For example, we could have a standard distributor fee, whether it's CBC or TVA, and then a percentage that goes to the producers. Your obligation is then to pay your writers, the musicians, and everything else. Whether that show gets 2¢ of play from commercials or $10, we don't know. But should that percentage be written into the actual contracts with Telefilm, and CTF, and the video fund to ensure that through our investment as the people of Canada, we are making sure our cultural voice is being accessed? Is that a possible model?

[Claire Samson]

It's an option; of course it is an option. In the ideal world, the broadcasters, producers, and rights holders would be successful in establishing among themselves what they feel is fair treatment. If we start with the fact that everybody is reasonable and of good faith, fine. But to do that, we have to look at the whole economic...or at every step of the exploitation.

I'll give you an example. You talked about Vidéotron. We know this thing about Illico and so on and so forth. Let's say my producer produces a show for TVA, and TVA puts it on Illico, video on demand, but decides to charge nothing to the viewers at home for downloading the show. Viewers can watch the show he produced at any time of night or day, any day of the week. They're not charged anything.

So TVA tells my producer that TVA is not getting any revenue from it. But down the road they are. They're selling the technology and the machine. You pay $87 a month to get the machine at home so that you can download at any time of the day or night.

It's not true, then, that there are no revenues. A corporation is benefiting from that technology somewhere. It's the same thing with the Internet. That's why everybody in the industry is willing to reopen and revisit the whole system. Everybody just wants to make sure that it's not going to be the same thing as in the past 50 years. The major people who made the money in the past 50 years are broadcasters and film distributors. Unfortunately there's never been....

I have been a broadcaster. I have sold advertising to finance my programming. Never have I as a broadcaster called an independent producer and said to them: You know that show you sold me? I was expecting to make 600,000 viewers, but guess what--I made a million. I generated more advertising revenue than I expected, so I'm sending you a cheque; the performance went way above.

I've been in this business for 35 years, and I've never done that. I've never seen it.

[Vincent Leduc]

And you won't, either.

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

So there's no percentage base—

[Claire Samson]

None at all. Vincent can confirm this; I can produce a show that will generate a million viewers, and—

[Vincent Leduc]

But rightfully, the broadcaster will see that the opposite is true too. He may have expected a million viewers for my show and got only 500,000. He's not penalizing me for it. So we're not returning any money.

[Claire Samson]

That's true.

If we wanted to revisit the whole system, it would be a huge job. Who could arbitrate that for the next 10 years? I don't know. But it would be a huge challenge.

Everybody is quite open to revisiting it, but right now we're faced with a way of doing business that has not adapted to the new technology.

[Vincent Leduc]

And you're right, Mr. Angus, that it will have to be addressed very soon. Canadians pay a good part of that bill, and they're entitled to access the programs they finance.

[The Chair, Conservative, Gary Schellenberger]

Very short, Mr. Lefebvre.

[Jean-Pierre Lefebvre]

I agree with what's just been said. We are in a vicious circle. When producers say that broadcasters want all the rights, we can say that producers want all the rights. So, since everyone has to protect himself with all the rights, we don't have any more rights, on the one hand. On the other hand, in the confrontation, the federal government will have to make a rationalization effort between CBC/Radio-Canada and the National Film Board. These are two different models. Unfortunately, the National Film Board is doing too many things, as it has all the rights in everything it has produced since the beginning of time.

That's what I wanted to add.

[The Chair, Conservative, Gary Schellenberger]

Again, very short, please.

[Lise Lachapelle]

I'd like to go back to what Ms. Samson just said. In fact, the landscape has become much more complex, with the arrival of the Internet. It's no longer just a question of a given number of broadcasts, it has now become impossible to rely on the number of broadcasts. There's also the means whereby those programs are conveyed, which are not necessarily local Canadian properties. So the U.S. vehicles also make the issue more complex. In fact, there aren't just more people working more or less directly in the industry, they are also dealing with a lot more people.

[The Chair, Conservative, Gary Schellenberger]

Thank you for that.

Mr. Kotto.

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

Thank you, Mr. Chairman.

Good afternoon and welcome once again.

We are going to exchange remarks very quickly. I have a lot of questions to ask you, and I'm going to try to select a few that are essential and fundamental.

You talked about the need to provide CBC/Radio-Canada with adequate financial resources and necessary means for it to be able to cover the entire mandate that is conferred on it by the Broadcasting Act.

How do we go about doing that, when we rely on a single funding source, which furthermore is political, because it comes from the government, in order to ensure that it is independent of the government? How do you go about avoiding the moods resulting from a change in government? How do you avoid these sensitivities over content and programs when it is the sole source of funding?

[Claire Samson]

It's done, since it's always been done. To date, I believe Radio-Canada has largely managed to remain independent over the years. Perhaps there have been some attempts at influence, but, in the years when I worked there, we didn't feel any jolts internally, obviously.

However, that's part of CBC/Radio-Canada's history. The corporation has been cyclically called into question. Every five or six years, people wonder whether it should close or continue and what are the essential operational needs. I think that's the story of CBC/Radio-Canada, and that's the way it will always be. I imagine the same is true for any public television network. There are models around the world where we think that works quite well. All that is part of the spirit of an act. In any case, the government that decides to close CBC/Radio-Canada tomorrow morning would have to wage quite a battle with the Canadian public, at least a major national battle in Quebec.

In English Canada, however, people might be less inclined to support CBC/Radio-Canada, unfortunately, because they are more used to watching American programs and their stars are much more American than here in Quebec. So while people in Toronto look at Entertainment Tonight, in Quebec, they watch Flash, a program similar to Entertainment Tonight, but which focuses on Quebec stars. So there's an enormous difference between the two markets.

I think that a government that tried to abolish the CBC/Radio-Canada tomorrow morning would have quite a job of it in Quebec, at least in view of the public support for its public broadcaster.

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

I'm going to continue in the same vein. When the government enters the picture, with considerable subtlety—I won't name one as opposed to the other or anyone in particular—because it has the power to do so, to appoint to its head decision-makers whom it mandates to achieve such and such an objective with regard to the Crown corporation, and that mandate is never public, do you think there is any reason for us to ask ourselves some questions?

We were faced with that situation under the previous Liberal government, and, this time, under the Conservative government. We asked what the actual mandate was that was given to such and such a person appointed to an important decision-making position, but were never able to extract any information whatever. It was a total stonewall. That's why I asked you the first question, which wasn't an innocent question.

Normally, when someone is given a mandate to direct a corporation such as this one, it should be a transparent exercise, but it isn't in actual fact. That's what caused the fears over the proposal that the parliamentary appropriation for the Crown corporation should be increased.

Elsewhere, at the BBC, for example, or even in Australia, the public broadcaster is funded out of television fees, which makes it possible to maintain a certain degree of independence. In Australia, the public broadcaster's mandate even states that it must remain independent of political authority, which is not the case here. It isn't a public television network, but, without impugning anyone's motives, the facts, from a historical perspective, show us that it's a state television network, whether we like it or not.

In view of the fact that we are currently engaged in what can be characterized as group think, market logic, which applies even in public institutions with considerable finesse, where that logic would take over the Crown corporation, that is to say where the government would gradually reiterate its duty to support the CBC/Radio-Canada financially, in this case, what other types of funding should be considered, apart from advertising? This is anticipation; it's a scenario.

We know the consequences that can have on a public broadcaster. The more advertising there is, the more you acquire the profile of a private broadcaster and the more you cast off Canadian content, in this instance, and the more it loses its specific characteristics. So, apart from advertising, are there any other funding options, in your view?

[Vincent Leduc]

To answer the last question, I would say that the system, both in French and in English, operates on the basis of fees. The same is true in Australia. That has never been applied here because we have always relied on appropriations. I'm not up to date on my reading. I know that CBC/Radio-Canada had requested multi-year funding in order to provide against parliamentary and government moods, but I don't know whether that solution is still being contemplated. To my knowledge, since CBC/Radio-Canada's inception, that solution has never been approved by any government whatever, for either radio or television.

With all due respect, I would say, despite what you are putting forward, that the balance between government subsidies and independent revenues generated by advertising affords CBC/Radio-Canada a certain degree of independence.

Moreover, even though I don't have the text of CBC/Radio-Canada's enabling statute before me, I believe it is a creation of the act and that it is governed by it. Claire referred earlier to those who would like to abolish it. However, any significant structural change in governance and decision-making within CBC/Radio-Canada would have to be debated in Parliament under the act.

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

That's the theory.

[Vincent Leduc]

That's interesting, though.

[The Chair, Conservative, Gary Schellenberger]

Okay, give a very short response, sir.

[Jean-Pierre Lefebvre]

Every time you come to me, I have to be very short. Is that because I'm more intelligent?

Mr. Kotto, you raised a major question of political appointments and funding for culture in Canada. CBC/Radio-Canada is dealing with the same problem as the Canada Council for the Arts, Telefilm Canada and the National Film Board. Since Telefilm Canada has been waging the battle for a long time, we know that, at times, now for example, when the government categorically refuses to grant one cent more, we are in trouble. I dare believe that we are living in a democracy and that, if a government, whatever it might be, started maneuvering in order to influence an institution as important as CBC/Radio-Canada, there would be an angry outcry and people would fight hard, starting with people in government and citizens.

Was that short enough?

[The Chair, Conservative, Gary Schellenberger]

Yes, it was beautiful.

We came in at just the right time. I know we started a little late. I've extended this period a little bit, so we're trying to gain from everyone.

I'd like to say one thing. We are studying the role of the public broadcaster in the 21st century, and I have heard no indication that we are going to ever get rid of the CBC. I must say that there were drastic cuts a number of years ago, and I think that the CBC is a very vibrant part of our culture and our broadcasting system, because with those drastic cuts, they have still done a tremendous job. They're still here today for us to talk about how we're going to go forward in the 21st century.

Thank you very much for your presentations today, for answering the questions. Feel free, if you have any other questions or ideas that you would like to send forward to us, to please do that.

We will recess for a couple of minutes to change witnesses.