Evidence of meeting #36 for Canadian Heritage in the 39th Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was programming.
A recording is available from Parliament.
NDP
Charlie Angus NDP Timmins—James Bay, ON
I will see, if my family will go along with my little experiment to see what happens, whether we get one of these calls from our customer service rep to see whether they can improve the programming. So we'll see.
Chief Executive Officer, Shaw Communications Inc.
What territory are you in, so that I know?
NDP
Charlie Angus NDP Timmins—James Bay, ON
I'm going into my second line of questioning, because my tough chair is going to cut me off momentarily.
I would like to go back to the original arrangement—this 50-50 that was the original cable television fund, and I recognize that it has changed since the early 1990s.
Mr. Stein, you were part of that original group that recommended that this was something that was a good deal, because the cable companies got to keep half the bump-up in fees, and the other half went into what was then the cable television fund. As far as I know, that bump-up has never been returned to subscribers, so it seems—There have been numbers put around that subscribers are owed maybe up to $900. I would think you've done pretty well from this arrangement.
You call this an unfair tax, yet you charge subscribers a fee for signals you get for free; you're protected from foreign competition from, say, DirecTv; you have a market value of over $9 billion; you have a seat on the CTF fund; you've been protected and pampered in the market by the CRTC. Now you come before this committee and ask what assurances we, as members of Parliament, are going to give you in order for you to feel that you should bother having to pay your share of what has been part of your licence. I simply don't understand any other business that can dictate terms like that.
Chief Executive Officer, Shaw Communications Inc.
First off, to tell you the truth, that probably was a bad deal, okay? And since then, I think Shaw has spent $4.4 billion building a network, carrying 13 mandated language channels, which we have to carry. Sometimes we don't have any subscribers for these 13 French channels. We have had to do more to promote digital, to promote Canadian access, than anyone. The burden on BDUs in Canada is just laborious, and that is why we're in front of the committee today to say you just can't load it up any more. I mean, it's just getting over the top.
So to think that we took advantage—I would go back and say, you know what? We could charge more. I mean, maybe we should charge more, because we have paid our fair share of the load and done our fair share of supporting everything, and all we're asking for is the production fund to do theirs.
Conservative
Ed Fast Conservative Abbotsford, BC
Thank you, Mr. Chair.
Thank you for coming, and I also appreciate the announcement you made that you're going to be restoring the funding. I just want to confirm that the funding you're restoring will be in accordance with the circular, so it's going to be on a monthly basis. Is that correct?
Conservative
Ed Fast Conservative Abbotsford, BC
Thank you.
Secondly, I think what we need to do as a committee is focus in on the concerns you have, rather than what's happened historically.
You've raised one issue, and this was that the CTF has really failed to deliver quality TV programs reflecting Canada's unique nature. I think that was paraphrasing what you said. Somewhere along the line I believe it was also communicated to the public as well as to this committee that you had a concern about some of the CTF funding going to the CBC. Could you expand on that?
Chief Executive Officer, Shaw Communications Inc.
Let me start, and I'm sure Ken has a bit of a point on this too. We think that diverting the funding through an indirect method to the CBC is the wrong way to approach that funding, and that the government or the committee or whoever decides to fund it should do it directly so that it's transparent across the board.
When we look at things, we see things such as there's never been an audited program from the group at the production fund; there's no auditing accountability; there's no ability for anyone to judge. My father was always big on saying that you can only judge what you can measure. You have to be able to measure something, and you have to be able to measure whether it's a success or it's not a success. Not everyone's going to say “great”, but I know other people have funds that return almost all of the money—now they maybe don't make a lot—but we don't return any of the money. If you're a producer and you get a program approved by the fund, you get a 20% kick. Well, I'd like to get a 20% kick too on everything Shaw does, but I don't. I just think there are some fundamental rules we have to get in place.
I also question the size of the board. When you have a board of 20 people, you'll have a hard time getting anything done. And what are the qualifications of that board? Have they delivered? If they haven't...as I said the other day, even I would get fired by my father.
Conservative
Ed Fast Conservative Abbotsford, BC
To follow up on that, when did you first make these concerns known to either the CRTC or to the CTF or the minister?
Senior Vice-President, Corporate and Regulatory Affairs, Shaw Communications Inc.
It's been a process that I would describe as, “Yes, we know about your concerns and we're going to take care of them”. That process has been going on for quite a period of time.
Senior Vice-President, Corporate and Regulatory Affairs, Shaw Communications Inc.
I would say over the past five years.
Conservative
Ed Fast Conservative Abbotsford, BC
And have these concerns been noted not only verbally but in writing?
February 20th, 2007 / 9:30 a.m.
Senior Vice-President, Corporate and Regulatory Affairs, Shaw Communications Inc.
I think Mr. Barrett indicated at the hearing when he appeared that he knew the BDUs had been unhappy for 10 years. I would say that's been the nature of our concern.
There have been various issues. We were concerned about audits, and then we were told the Auditor General was going to do a review, which the Auditor General did—a good review. We've been told that the issues identified by the Auditor General have been corrected, but we don't know how that's been done, or we don't know what the Auditor General's comments are.
Besides, the Auditor General is looking at it from a government point of view, not from a private sector partner point of view. The government has a right to a contribution agreement. We have no such agreement. The government had the right to do an audit. We have no such right. So we're contributing a fair portion into the fund, but it's not a public-private partnership when the government has all the rights and we don't.
Star Choice pays as much into the fund as Shaw Cable does, and over the past number of years—going back to 2004, I think—we've argued that DTH should have two seats on the board.
The board of the CTF—and I don't know what rights the board has to make their own decisions about who is on the board—made the decision that there would only be one DTH representative. Then I was told that they would prefer to have Bell on the board rather than Star Choice, because Shaw was already on the board.
We said Shaw isn't on the board, because our member has been told he can't represent Shaw; he represents the CCTA.
So over the past number of years there has been an ongoing variety of concerns going on, and none of them has been addressed.
Senior Vice-President, Corporate and Regulatory Affairs, Shaw Communications Inc.
None.
Liberal
Tina Keeper Liberal Churchill, MB
I'd like to thank you for being here today as well.
I have a question about the timing, I guess, of the decision. Mr. Stein, you said it has been a number of years that the CRTC is aware of your concerns. Could you tell us what attempts Shaw has made to deal with these issues and why it was mid-year, out of the blue, that we had this announcement from your company?
Chief Executive Officer, Shaw Communications Inc.
It would not be out of the blue. We appeared at a hearing, I think in—
Senior Vice-President, Corporate and Regulatory Affairs, Shaw Communications Inc.
October.
Chief Executive Officer, Shaw Communications Inc.
Was it October? Some time in October. We expressed our supreme dissatisfaction with this. We had had before that absolutely no attention from anyone on this issue.
We say this is a terrible waste of a Canadian asset, and that's why we took the action we did. We felt it is such a terrible waste of a Canadian asset. That's why.
Senior Vice-President, Corporate and Regulatory Affairs, Shaw Communications Inc.
I'll make two points. One is that we did address those issues at the CRTC hearing, and then when the CTF appeared we did not feel those issues were addressed. But we had made points in our interventions beforehand that were on the record about our concerns about the CTF.
As well, I think one of the significant issues was when our supposed board member was asked to remove himself from the discussions because we had acquired a cable system serving Kenora. We're very proud of the fact that we serve small communities. We may not serve Timmins, but we are very proud of the fact that we serve a number of small communities.
As part of that acquisition, we ended up owning a television station in Kenora, which offers a valuable service in that area. It's not a major station; it's a small broadcast station. It was just part of the acquisition of the cable company in that area.
Our member was then told he could not participate in the discussions because now we were a broadcaster. We owned one little station in Kenora, and we had to leave the room with CTV and Global and TVA. That's ridiculous.
Chief Executive Officer, Shaw Communications Inc.
To put it in context, we just finished the budget for that station, and it's going to earn all of $20,000 this year. We're hoping to expand it into Canada's first superstation, but it's not looking like it.
It's just that the stuff that comes out is crazy.
