Canadian Heritage Committee on Feb. 13th, 2007

[The Chair, Conservative, Gary Schellenberger]

Good morning, everyone, and welcome to the 34th meeting of the Standing Committee on Canadian Heritage. This morning, pursuant to Standing Order 108(2), we are pursuing a study on the future of the Canadian Television Fund.

We welcome here this morning the Honourable Bev Oda, Minister of Canadian Heritage and Status of Women, and her entourage. If you care to introduce your people and give a presentation, Minister, you're on.

Thank you.

[Bev Oda, Conservative, Minister of Canadian Heritage and Status of Women]

Thank you very much, Mr. Chair.

With me today are Judith LaRocque, the deputy minister for Canadian Heritage, and Amanda Cliff, the director general of broadcasting.

Mr. Chair, honourable members of the Standing Committee, thank you for giving me this opportunity to address you today. All of us in this room are aware of the seriousness and the complexity of the present situation.

First, let me emphasize that the production and the broadcasting of Canadian content is a key component of Canada's broadcasting policy and is important to our government. Canada has a broadcasting system it can be proud of. It has maintained its vitality, a wide range of choice, and quality of service that Canadians can depend on.

The system has been built in a highly competitive marketplace sitting beside the largest entertainment centre in the world, and it has been built on a sound foundation of government policy and regulatory supervision recognized internationally.

The Broadcasting Act requires that each element of the Canadian broadcasting system shall contribute to the creation and presentation of Canadian programming. The continued success of the Canadian broadcasting system requires that all players respect the rules and obligations that come with the privilege of holding a licence. That is why the body responsible for regulating the Canadian broadcasting system, the CRTC, must also be respected.

The actions taken have destabilized the broadcasting sector by introducing uncertainty to the production and to broadcasters in the short term. We know that the normal production cycle has key benchmarks—steps that must be taken each year to ensure continuity with the new system. This government expects everyone in the system to play by the rules.

So I am calling on all parties to immediately restore monthly payments to the CTF. To that end, I have written to Shaw and Vidéotron today asking them to resume their monthly payments immediately. This sign of good faith on their part will be necessary before we can consider proposals in support of Canadian production.

I again want to stress that this government is committed to Canadian production and Canadian content. Obviously, producers, broadcasters and distributors play a major role in providing this content to Canadians all over the country. We also know that without a healthy production sector, our broadcasting system would not have distributed rich and diversified Canadian programs to homes in all areas of the country.

These are some of the reasons why this government is committed to Canadian content, a production industry and a strong broadcasting system.

Through the CTF, private and public investments have generated significant results. Since 1996 the investments have helped sustain what is estimated to be more than 21,000 jobs in the television production sector. That is close to 50% of the jobs in that sector. They have triggered $7.45 billion in production budgets, contributed $2.2 billion in funding to the production of Canadian content, and generated more than 23,000 hours of new Canadian television productions in English, French, and aboriginal languages across genres such as drama, documentary, children's and youth, and variety and performing arts.

I want to make it clear that this government recognizes that this is a critical time and a serious situation for Canadian television production.

I noted that the CTF, through Mr. Barrett, put forward some proposals for possible changes to the structure and approach of the CTF model. This recognizes that any model or approach can be improved or updated, but these changes require input from all interested and affected parties, and public comment. For its part, the government has demonstrated its leadership, its support for the production sector, and its recognition of the situation.

First, I announced the renewal of the government's contribution of $200 million over two years. This $200 million commitment will help provide immediate stability for the sector. In fact, the chair of the CTF said during his appearance before you, and I quote:

...it's very much appreciated because in some previous years we've had to wait until the budget. We've been on tenterhooks waiting until the budget period, so we do appreciate very much the early announcement, and we very much appreciate the two years.

Mr. Mayson, from the Canadian Film and Television Production Association, said on that same day to you:

...we were extremely pleased with Minister Oda’s January 26 announcement of the government’s contribution of $200 million over two years to the CTF, and for confirming the government’s commitment to the Canadian television production industry and a strong broadcasting system.

I've also met with the affected parties. These include distributors, artists, producers, writers, broadcasters, and representatives from the television fund. What is clear from my meetings is that there is a shared commitment to invest in Canadian content, as well as support for our public policy objectives to ensure quality Canadian programming. However, there are fundamental differences between the parties on how investments can best be made. In fact, even those in support of the fund in the CTF itself have suggested there is room for improvement.

Our government, Mr. Chair, is committed to ensuring the production of high-quality Canadian television programming and to a strong broadcasting system with a view to the long term. I know I don't have to tell you that we have challenging work ahead of us, but in our work we should remember an important fact: the Canadian broadcasting system includes private, public, and community elements. All of these elements share responsibility for Canadians--it's their system, after all--and as such, all elements must contribute to achieving the goals of our public policy and act in the public interest. Your work and your committee can certainly contribute in this regard as a tool to help inform the government's ongoing deliberations. I know we all share a common goal for the sake of Canadian broadcasting and for the sake of Canadian culture.

The bottom line is clear. I am willing to listen to all parties, but respect for the rules comes first, to ensure the stability of this important sector.

I would now be pleased to take any questions you may have. Thank you.

[The Chair, Conservative, Gary Schellenberger]

Thank you, Madam Minister.

We're going to stay to five minutes. If you want to share time in those five minutes, it's five minutes for questions and answers.

We'll start with Ms. Keeper, please.

[Tina Keeper, Liberal, Churchill, MB]

Thank you Mr. Chair, and thank you to the minister for your information.

You made a very critical announcement this morning that you are going to ensure that everyone plays by the rules and that monthly payments would be restored immediately.

You gave a quote by one of the stakeholders, who said we've been on tenterhooks. Certainly the industry has felt that they are on tenterhooks. In fact, we have been repeatedly asking for this commitment to ensure that these monthly payments are returned.

Definitely we've heard from stakeholders that Canadian television industry production has been put in jeopardy, and currently we see that. We've heard from one stakeholder that an unknown number of stakeholders have been calling on the government to provide an interim loan to ensure production continues. As you mentioned, there are key benchmarks in production in Canada. They're on very tight schedules and very tight budgets. How will the minister ensure that the production industry is not destabilized by what has been happening recently with the Canadian Television Fund?

[Bev Oda, Conservative, Durham, ON]

Thank you, Ms. Keeper.

I want to reiterate that this is, as you can appreciate, a very complex situation. These are complex matters that we are looking at.

As I've indicated, we have looked at all the options available to the government. We have not, at this point, excluded any options. We recognize that ultimately our objective is to provide stability to the industry and to continue to support the Canadian production industry.

[Tina Keeper, Liberal, Churchill, MB]

Can we anticipate that there will be efforts to ensure the stability of the Canadian television industry?

[Bev Oda, Conservative, Durham, ON]

This government will do everything within its powers to ensure stability and to use the most effective and judicious options available to it.

[Tina Keeper, Liberal, Churchill, MB]

I have just one more question. You used the term “within your powers”. Last week you were quite clearly stating to many of the opposition parties that it wasn't within your power to make sure that the monthly payments would be restored immediately and that everyone played by the rules. How are we to take what you're saying today, in terms of the kind of effort you're going to make?

[Bev Oda, Conservative, Durham, ON]

Thank you for the opportunity to expand a little bit on the different responsibilities in the role.

As you know, the regulation that requires the contributions are a regulation of the CRTC. The CRTC is an independent agency. It has responsibilities that it must fulfill, and this government is in full support of and has full confidence in the CRTC regarding its responsibilities.

In order to look at the fund and its structure, etc., the government will have to work with the CTF, with the board of the television fund. The television fund is also an independent organization. It has its own board, and therefore we would be looking to their cooperation and to their suggestions. I read that the chair of the board had put some proposals forward as suggestions; it takes a joint effort.

As I explained, it's a complex issue. Each agency, as well as the government, has separate roles and separate responsibilities.

[Tina Keeper, Liberal, Churchill, MB]

Thank you.

[The Chair, Conservative, Gary Schellenberger]

There is about one minute left.

[Lucienne Robillard, Liberal, Westmount—Ville-Marie, QC]

Madam Minister, I do not think you really realize how urgent the situation is. You are trying to wash your hands of it and hiding behind the CRTC’s independence.

On the one hand, you say the CRTC is independent. On the other hand, you met with the cable operators who have stopped contributing to the CTF in order to hear their grievances.

It was the first time this morning that you asked Shaw Communications and Vidéotron to resume their payments to the CTF. You are appealing to them while saying at the same time that the CRTC is responsible.

Madam Minister, this doesn’t make sense. The situation is urgent. Production contracts are signed in February. The Broadcasting Act gives you specific powers. You are the minister responsible for this act. Section 7 enables you to immediately issue an order relating to regulation. You are not using this power. Why?

[Bev Oda, Conservative, Durham, ON]

I would say to you, first of all, that I think we have a responsibility to be as informed as possible. That's why I held the many meetings: to ensure that I met with every sector affected and every organization with a part to play in support of the Canadian production industry.

Madame, I also assure you that the responsibilities of the CRTC, as an independent agency, are clearly laid out in the Broadcasting Act. The responsibilities are clearly laid out in the Broadcasting Act. That is why I recognize that the CRTC is independent. It's an agency that has for years served the overall public interest of Canadians, ensuring that Canada has a broadcasting system that is independent of government, and there were very good reasons for that structure. We fully support the CRTC. We fully support that it will recognize its responsibilities, and it is very competent to do so.

The other thing is that they've also recognized and looked, in the Broadcasting Act, at the options available to government. We've also looked at the means--and the means available to government, Madame, I would suggest, are very clear and are limited.

[Lucienne Robillard, Liberal, Westmount—Ville-Marie, QC]

Mr. Chair, can I...?

[The Chair, Conservative, Gary Schellenberger]

No, you're way over time. There's going to be another round.

Mr. Kotto is next.

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

Good morning, Ms. Oda, Ms. LaRoque and Ms. Cliff. Thank for coming today to deal with a dying fund.

I am going to talk about the provisions of the act. In accordance with Section 7, the Governor in Council may issue to the Canadian Radio-television and Telecommunications Commission directions of general application on broad policy matters with respect to any of the objectives of the broadcasting policy set out in the act.

This is what your colleague Maxime Bernier did on December 14, 2006 when he issued policy directions asking the CRTC to rely as much as possible on market forces and, when required, to regulate so as to exert as little influence as possible on market forces.

When I read this information, which was sent by your colleague, I was dismayed and I thought that was probably what was going to happen next year in the area of broadcasting. Beyond the crisis that we are presently discussing, isn’t the government getting ready to deregulate broadcasting, in view of your wait-and-see attitude in the CTF file?

[Bev Oda, Conservative, Durham, ON]

Merci, Monsieur Kotto.

Monsieur Kotto, I think we have been doing the same thing--reading the Broadcasting Act thoroughly.

You're quite correct. Section 7 of the Broadcasting Act does give the government powers of direction. However, and I point to the exact wording of that section, it's “directions of general application on broad policy matters”. That is limiting to this government, as it not only has to be predetermined in consultation with the CRTC, but there is also the definition of “broad policy matters”. In this case, the specifics of the situation caused by the actions of certain companies would not allow--section 7 would not allow--addressing the specific situation that you've pointed to.

The act has been very carefully crafted to ensure that government sets broad policy matters for the broadcasting system and all the sectors. It also has been structured in such a way that government interference is limited and is carefully outlined.

Monsieur Bernier acts in the telecommunications area under a very different act. He acts under the Telecommunications Act. Within that act, he has very different powers and abilities to give direction to the commission.

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

Is there a provision in the act that requires Shaw and Vidéotron to make monthly payments to the CTF?

[Bev Oda, Conservative, Durham, ON]

As you know, section 3 of the Broadcasting Act sets out the broad policy objectives and goals of the broadcasting system as a whole. It asks that every element within the broadcasting system contribute to the Canadian character, as well as to the Canadian content of the system and of the broadcasters. It also recognizes that there is a role to be played in support of the Canadian production industry. Through that, and further on through the act, it gives the powers of the commission to establish regulations. Because the act does that, the commission creates and, through public process, establishes under its own authority and responsibility the regulations it deems necessary to promote the policy objectives of the Broadcasting Act.

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

So, nothing in the act requires payment of a monthly contribution?

[Bev Oda, Conservative, Durham, ON]

The monthly payment situation was outlined, as you know, by the commission through a circular. It is not part of the broadcast distribution regulations that refer to the contributions by the distribution sector towards the support of Canadian production. The actual monthly payments are outlined in a circular that was issued by the commission.

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

If I got that right, it means there is no requirement. How then can you justify your request to Shaw and Vidéotron to resume their monthly payments?

[Bev Oda, Conservative, Durham, ON]

The commission itself has the power, and it is the power of the commission. The commission has the power to enforce its regulations, and the commission has the responsibility and the power to assess any of its regulations, its actions, its practices, etc., in order to strengthen the support of the broadcasting system and any segment within the broadcasting system.

[The Chair, Conservative, Gary Schellenberger]

Thank you very much.

Mr. Angus is next.

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

Thank you, Mr. Chair.

Thank you, Madam Minister, for coming here this morning.

You speak of this as a complex issue, but I would suggest that what we're dealing with is actually something very simple. We're looking at a power play by industry, a very audacious power play. Shaw and Vidéotron made their move at a time when there was no leadership at the CRTC. Without leadership at that moment, it fell to you as the minister to stand up and speak very clearly. The message that should have been given then is the message you're attempting to give today, which is that they will give their monthly payments and other issues will be dealt with later.

Yet nothing was said at that time. We heard nothing really from your office, even after you met with Shaw and Vidéotron, and yet Shaw came out very publicly from that meeting. They were saying that their understanding after meeting you was that this fund was “dead, done, gone”. They gave a very clear public message, and still we did not hear anything from your office regarding the seriousness of this issue, and at that time, domestic and international financing deals for television were going up in smoke. We needed a clear voice.

You met with the CTF. Our understanding from those meetings was that you said you wanted to keep this out of the papers and you didn't want them using their powers to take legal action, so they were sidelined; the CRTC, you say now, has a mandate, but they were on the sidelines because you were at the same time saying you were looking into this matter. I think it would be inappropriate to suggest that the CRTC would be moving independently while you, as the minister, were saying you were looking into this matter.

Now we come to today, which is the moment when, in crisis management politics, the minister comes before committee and makes a dramatic announcement and everything is good. That's what we fully expected would happen this morning, yet yesterday afternoon Vidéotron pulled the rug out from under you and made a very clear announcement to the nation that this was not going to be, that the CTF was a finished body. They were going to dictate the terms of what they were going to put in, which is money to their own organization to produce their own shows and to help their own bottom line. They did that, I think by no accident, the night before this morning's meeting.

In light of this very clear power play by industry, what is your message to Vidéotron going to be? Are you going to ask them to continue their payments and then look favourably upon this move they're making, or are you going to say no, these are the terms of your licence, these are the terms that the CTF was set up by, and you must comply? What is going to be your answer to them?