Information & Ethics Committee on Oct. 20th, 2011

[The Vice-Chair, Conservative, Patricia Davidson]

Thank you, Mr. Andrews. Your time is up.

We'll now go to Mr. Calkins for seven minutes, please.

[Blaine Calkins, Conservative, Wetaskiwin, AB]

Thank you, Madam Chair.

I appreciate the discussion here today. I want to just ask you, Mr. Péladeau, to elaborate a little bit more on some of these get-the-facts points that have been raised recently.

It says here, and we talked about it a little bit, that Quebecor has received more than half a billion dollars in direct and indirect subsidies and benefits from Canadian taxpayers over the past three years, yet it is not accountable to them. I've heard others come before this committee trying to make the argument that if an organization, a company, a business receives a tax credit, takes advantage of a tax incentive program—which obviously costs the federal coffers money, but not directly, as it's an indirect cost, simply money not collected on behalf—that would be similar to receiving a direct subsidy or a direct cash transfer from the Government of Canada, which of course CBC does get, to the tune of over $1 billion a year to provide a mandate for that investment.

Do you think it reasonable that section 68 of the access to information law would apply to every business that takes advantage of a tax credit, or a tax incentive policy, to have to publicly disclose information through the Information Commissioner if an access to information request were filed? Is that a reasonable thing to do? Because every car dealership, every gas station, everybody would then have to. If we followed through on that policy, someone hiring an employee, using the hiring tax credit, someone using a tax credit in their business, or even an individual using a tax credit to fix up their back yards during the home renovation tax credit would somehow suddenly be open to an access to information request. Do you think that's reasonable?

[Pierre Karl Péladeau]

I don't know what to answer to this. You're asking me if I find this natural or--

[Blaine Calkins, Conservative, Wetaskiwin, AB]

Yes, do you think that's a reasonable equivalency to--

[Pierre Karl Péladeau]

As I mentioned, I think it's pretty strange that they're dropping this kind of information a few hours before I'm in front of you. So I guess it's probably to be able to feed some of the friends of CBC/Radio-Canada. Again, you know, the information that has been mentioned in this web page I found completely unacceptable if it was to be approved by senior management of the CBC. Carrying that kind of false and malicious information I found completely unacceptable. I guess it's like confiscating public funds, the public airwaves or the public money. This is something unforeseen. I've never seen this. To accuse us, to try to taint our reputation, I find that completely unacceptable.

As I mentioned earlier, we're reviewing our options regarding our legal recourses.

[Blaine Calkins, Conservative, Wetaskiwin, AB]

Thank you very much for that.

You mentioned that until a few years ago the CBC did advertise with your media chains or through various aspects of your media outlets, and that has changed. You gave us some testimony in your opening remarks indicating that there seems to be a squeeze in play where various other media organizations are working in a manner that seems to be more cooperative, in an attempt to basically make a play in the marketplace. That would mean that the taxpayer-funded state broadcaster, the Canadian Broadcasting Corporation, is using taxpayer-funded dollars to do that and to basically try to corner a part of the marketplace, using taxpayers' dollars, in a free-enterprise open market.

I guess my question is, if that's the case, from a general principle of fairness most government purchases and expenditures go through a public process where we put out a tender and so on. I'm not saying that needs to happen here, but shouldn't it be fair, as a general principle, that a state-funded broadcaster should be using the entirety of the Canadian marketplace as fairly as possible?

[Pierre Karl Péladeau]

Again, I'm not a politician. I have my own opinion and I will keep it for me. But as a manager, I think what we've been seeing is that CBC/Radio-Canada have been using retaliation measures against us because we've been critical. The best evidence of that is that before they were using our newspapers to.... It's pretty simple. As I mentioned, le Journal de Montréal and le Journal de Québec, the two largest papers in their specific markets, have been seeing their readership growing, whereas our competitors, which are largely used by CBC/Radio-Canada, have been seeing their readership declining.

We saw le Journal de Montréal and le Journal de Québec working in tandem since their inception. We had a work stoppage at le Journal de Québec for a while, and they have been using le Journal de Montréal while they stopped using le Journal de Québec. We asked them why they would stop doing this. I have my own opinion, but the fact is that they stopped doing that.

The other way around happened a few months later. We had a work stoppage at le Journal de Montréal and le Journal de Québec was running. They asked us to be able to advertise in le Journal de Québec after the work stoppage was done. We never did anything illegal; we've been following the law. Then they asked us if they were able to advertise in le Journal de Québec and we said no. In solidarity with our members of management who were putting the paper out courageously every single day, we said no, we're not going to accept money that would discriminate le Journal de Montréal against le Journal de Québec.

[Blaine Calkins, Conservative, Wetaskiwin, AB]

So in the interests of competition and the fact that there's a bit of an unlevel playing field, section 68.1 has now become a pivotal point being used, in my opinion, for one organization to hide behind and to protect itself, and for maybe other organizations to use as a hammer to drive a wedge. But the bottom line is it's in the public's interest. It has to be in the public's best interest to follow where public-funded money is going.

I'm running out of time, so I'm simply going to ask you, do you think that the journalistic programming and creative activities under section 68.1 should also include any information that gives the Canadian Broadcasting Corporation a competitive advantage?

[Pierre Karl Péladeau]

I'm not a member of Parliament, so I will not make any comments on legislation. But as a member of senior executive of a media company--and I mentioned it in my presentation--everyone will say that media are a strong and probably unavoidable pillar of democracy.

I did a little bit of philosophy when I was at university. A guy by the name of Montesquieu said that we need to separate the different powers. He didn't mention media at that time because it didn't exist. But as the fourth pillar of democracy, newspapers need to be managed independently, as do all media companies. Protecting journalistic sources is certainly one of the most important assumptions to make sure that newspapers and media will continue to be that pillar supporting democracy in the end.

[The Vice-Chair, Conservative, Patricia Davidson]

Thank you very much, Mr. Péladeau.

We'll now go to Monsieur Boulerice, please, for five minutes.

[Alexandre Boulerice, NDP, Rosemont—La Petite-Patrie, QC]

Thank you, Madam Chair.

Mr. Péladeau, I was a bit surprised by the tone of your presentation. You came across as if you were under siege, a bit as if the rest of the world was ganging up on you. For a moment, I almost forgot that you were at the head of the largest media empire in Quebec and Canada, a media empire whose political stance is rather clear. It's an empire that is rarely subtle and visibly eager to please the current Conservative government. You presented a vision of things that is a bit Manichean in my opinion. It creates a contrast between the mean crown corporation, heavily subsidized by taxpayers, and a private company that is trying to do its work, information broadcasting, and is part of the forth pillar of democracy.

However, CBC is a public service and not a competitor. It's part of another category of stakeholders in the country's information and programming market. It has a specific mission that private broadcasters do not have, such as providing a service in English in Saguenay or in French in Saskatchewan, for instance. That's a role that I think private broadcasters don't have. The corporation has additional obligations in terms of services, but also in terms of programming content. Since 1952, CBC has had to draw at least 35% of its funding from market profits. I think that's what you take issue with. You see CBC as a competitor that steals your advertising dollars. You, on the other hand, are a real entrepreneur that is trying to do its job and carry out its private broadcasting mission.

For the benefit of the committee and those present, could you remind us what percentage of Quebeckers' savings was used to build Quebecor Media, which is the source of your empire's expansion? How involved in Quebecor Media is the Caisse de dépôt et placement du Québec?

[Pierre Karl Péladeau]

It accounts for 45% of the capital.

[Alexandre Boulerice, NDP, Rosemont—La Petite-Patrie, QC]

Thank you very much. So we are talking about 45%.

We know that, in 2010, $2.4 billion—

[Pierre Karl Péladeau]

That's a public piece of information known to almost everyone following this matter.

[Alexandre Boulerice, NDP, Rosemont—La Petite-Patrie, QC]

Yes, but I think it bears repeating. In 2010, $2.4 billion of public money, of Quebeckers' savings, made it possible for you to operate and run your media empire.

Earlier today, we heard Mr. Drapeau say that if you receive public funding, if you dip into the collective pocket of taxpayers, you must be transparent and held to account. That is something we agree on. The same goes for CBC/Radio-Canada, which should respond to access to information requests and show transparency in such matters. It has obligations of that nature.

What we are wondering is this: When you consider the $2.4 billion that Quebeckers have invested in Quebecor Media, do you not think that you have some obligations of your own to meet?

You withdrew from the Quebec Press Council, and what's more, the Fédération professionnelle des journalistes du Québec has pointed the finger at you because your company does not have any type of mechanism for people to file complaints and to have those complaints dealt with. What are your thoughts on that? As I see it, there is an imbalance between the requests you make and the accountability you are willing to show.

[Pierre Karl Péladeau]

We disclose our results every quarter. We are subject to disclosure rules. We have always fulfilled that obligation. Quebecor has been a public company since 1972. So, in that regard, I don't think we need anyone's advice. We have always done our job as far as accountability and disclosure are concerned, and we will continue to do so in the future.

[Alexandre Boulerice, NDP, Rosemont—La Petite-Patrie, QC]

I see things from a Quebecker's perspective, not a Canadian's—not yet, at least. We take no issue with the fact that you are holding CBC/Radio-Canada to account or the fact that your business is booming. What we do take issue with is that you, mostly in your newspapers but also on TV to some extent with Sun, seem to systematically attack CBC/Radio-Canada, the public broadcaster. And those attacks are not limited to ATI requests because this has turned into a commercial war. You seem to harbour a lot of aggression towards CBC/Radio-Canada.

As for transparency, do you not think that you have crossed the line and embarked on an all-out smear campaign? Whenever we read Le Journal de Montréal—because we also read it, at Tim Hortons—and we see, time and time again, articles in which CBC/Radio-Canada is being attacked, we get the sense that CBC/Radio-Canada is an enemy.

[Pierre Karl Péladeau]

Listen, I am a bit surprised here. That is your interpretation, and obviously, I don't quite share it. I am extremely surprised to hear all this talk of attacking CBC/Radio-Canada and running a smear campaign against them. The fact of the matter is that the broadcaster's Vice-President of French-language Services talked about me on air as though I were a hooligan, on three occasions. One reporter, who appeared a bit uncomfortable with the exchange, even told him that he had started a campaign against Quebecor regarding a matter that affected all Canadians at the time, the Canadian Television Fund. So, frankly, I don't need any advice from CBC/Radio-Canada on this.

That said, Sun Media reporters are doing their job. Once again, why would they refrain from investigating CBC/Radio-Canada, a crown corporation that spends more than $1 billion, simply because it may be a so-called competitor? Using that logic, no one could investigate CBC/Radio-Canada or make public information on CBC/Radio-Canada, as media information services and other crown corporations do. What is the reason behind the practice whereby Canadians are not informed of the exclusion set out in section 68.1 in order to protect journalistic sources? As I said in my presentation, we fully support that because we believe that the media needs to protect its journalistic sources. We have gone to court, at both the federal and the provincial levels, repeatedly to stand up for that very principle of protecting journalistic sources.

[Alexandre Boulerice, NDP, Rosemont—La Petite-Patrie, QC]

Unfortunately, I am out of time.

[The Vice-Chair, Conservative, Patricia Davidson]

Thank you, Mr. Péladeau.

We'll now go to Mr. Dreeshen for five minutes, please.

[Earl Dreeshen, Conservative, Red Deer, AB]

Thank you very much, Madam Chair.

Thank you, Mr. Péladeau, for being here today.

I want to talk about journalistic programming and creative activities that are part of section 68.1. Of course I was very interested in your comments earlier. I actually owned one of those 2007 Ford half-tons. I guess I must have had the base unit. I didn't have the stealth one, or whatever it was. That must have been similar to what the CBC felt they could release in the pages that were given there.

I really think there's a different set of rules that we have. You have accountability to your shareholders, and the CBC should have some accountability to taxpayers. I believe that is what we're talking about here.

I'd also like to address the issue that was just mentioned a few minutes ago about the $500 million from taxpayers that the CBC alleges you have received.

You've talked about potential legal recourse. I don't want to get into what you might want to look at in that area, but is this a situation where an ATI request could go to them to determine just where these accusations come from, or is that something that would be covered by journalistic privilege?

[Pierre Karl Péladeau]

Again, they've been trying to create a lot of confusion regarding what this public money is all about. How can you really compare a parliamentary credit of $1.1 billion with any other kind of public money that private companies would receive or be entitled to? There is no such thing as taking the money from somewhere; they've been trying to confuse what parliamentary credit is all about—subsidy and tax credits.

Yes, it's true that TVA, our broadcasting operation, indirectly received tax credits that had been awarded to private producers. This is how the system works in Canada. In fact when you're looking at what this tax credit is all about, you will find that the amount of money independent producers receive to broadcast their programming on CBC is very different; it is much larger than what private producers who are distributing their programs on TVA will receive.

I have an example, in fact, and I think it also shows what this business is all about. There is a large private producer in Montreal called La Presse télé, which is a subsidiary of Gesca Power Corporation. For the last six or seven years, or maybe more, they have received $150 million of tax credits. They're selling 80% of their programming to CBC/Radio-Canada—obviously more specifically to Radio-Canada, because this is French programming.

This is something that could also highlight that eventually there are not going to be a lot of media companies that will investigate on CBC/Radio-Canada. Basically they are in conflict of interest because they are receiving so much money. They are the state broadcaster, so you're not going to spit on the hands that are feeding you. This is what this business is all about.

On subsidies and tax credits, we are entitled to that, according to Canadian programs that exist. We're not taking more or less; we're taking the share as the one proposed to all other private companies. We're not the only one receiving this. We see Global, we see CTV, we see many other private broadcasters being entitled to those programs.

[Earl Dreeshen, Conservative, Red Deer, AB]

What perception do you think Canadians are left with when CBC refuses to provide information?

[Pierre Karl Péladeau]

I don't run a poll company. I would ask my friend Jean-Marc Léger, who sits on the board of fondation de l'entrepreneurship, which I'm chairing, but I'm not an expert there.

[Earl Dreeshen, Conservative, Red Deer, AB]

So you haven't contacted Vote Compass or anything like that to find out what is happening there.

Thank you.

The other--