Canadian Heritage Committee on Feb. 20th, 2007

[Luc Lavoie]

It's actually much bigger.

[Pierre Karl Péladeau]

I can't agree with the fact that Radio-Canada is our competitor. It is one of our competitors.

[Luc Lavoie]

To be more specific, at the moment, the latest numbers show that TVA's market share is 29, while the specialty channels put together are 39.

So the real competition is not Radio-Canada; it's the specialty channels and all of the other means of communication.

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

I would suggest—

[Pierre Karl Péladeau]

Mr. Angus, I invite you to look at the amount of Canadian content on specialty channels, especially the one in French. There's not so much.

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

Quebecor is a vertically integrated corporation, with newspapers, television, and cable. Now you are looking to move into new markets—video on demand and the Internet—which in terms of a business plan is the perfect direction to go, and I commend you for going there.

I would suggest, though, that this $30 million fund, which you're offering to set up, is something you would have done anyway because you're looking to move into that market.

I think the situation that was created with Mr. Shaw has simply provided an excuse for your company to blame the CTF for something that's really inconsequential to the larger picture, which is that you as a business—a very large, vertically integrated business—were going to move into those other sectors anyway. So you've used the excuse of the so-called crisis in the CTF to say, we don't want to pay into that fund anymore, which might in some way provide programming to one of our competitors; we want the money ourselves, so it'll be run by our own fund, and we can beef up our market share.

[Luc Lavoie]

I am totally sorry. With all due respect, sir, I totally disagree with your narrative.

First, we're not moving into this new business. We're right in the middle of it. Last year alone, with less than 700,000 subscribers to our digital service, we had 20 million orders on our video-on-demand service. We're one of the largest Internet operators in the country—

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

And you will continue to grow in that market.

[Luc Lavoie]

We will to continue to grow in that market.

The problem is not the way you describe it; the problem is that the Canadian Television Fund tells me, for instance, that video on demand is not a legitimate broadcaster, which should in itself trigger the funding for a program.

I'm saying—

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

It's completely separate from what you do with the Canadian Television Fund.

[Luc Lavoie]

I'm sorry, but if I may finish my point, the reality is that if the public broadcaster is to be strong, and we've expressed the wish quite openly and quite often that it remain strong.... We tell the Government of Canada, why don't you take the $100 million, put it where it belongs, and leave us to decide where we're going with our money? We're going to put it into a production, and we're going to allow the CRTC to be part of the board of the fund that we're proposing. So you'll be able to monitor what we're doing, but we're going to take into account the reality of the digital revolution that makes video on demand a reality, that makes Internet television a reality.

We're not going to be dictated by a technocratic structure that obviously denies today's reality.

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

Thank you.

[The Chair, Conservative, Gary Schellenberger]

Thank you.

Mr. Abbott.

[Jim Abbott, Conservative, Kootenay—Columbia, BC]

Recognizing that we are talking about two significantly different market realities and certainly two different corporations with two different corporate imperatives, nonetheless there is some commonality between you and Shaw Communications.

I wrote down your phase, that you were dealing with a total inertia and an absence of reaction to your concerns over the CTF. What period of time would you say this first became an issue? When did it start, and how long are we talking about?

[Pierre Karl Péladeau]

I mentioned in my presentation, Mr. Abbott, that we started ringing the issue many years ago. More specifically, we did it in writing to the CTF by a letter from our representative, Mr. Pierre Lampron. I think it was dated—

[Luc Lavoie]

May 2005.

[Pierre Karl Péladeau]

—May 2005. We have been seeing inertia all over, since the inception of this. I had the chance to be part of many public presentations from the industry. I had the chance to meet with CRTC officials, as I mentioned. It's not something that we raised yesterday morning, because we are concerned about our industry and we want to make sure that it will remain strong and viable in the future.

The point is we are all of a certain age. I am 45. There are not so many people who are 20 years old. Look how 20-year-old people watch entertainment, watch news. They're not reading newspapers anymore and they are not watching television as we've been watching it. They go on the Internet, to YouTube, MySpace. This is what their environment is all about, and if we are not able as Canadians to propose something that is based in Canada to provide those new channels, at the end of the day the industry will be killed—

[Jim Abbott, Conservative, Kootenay—Columbia, BC]

But you are —

[Pierre Karl Péladeau]

—with the exception of public money that will fund Radio-Canada or CBC, and those will be the only capabilities to withhold and build our Canadian industry.

[Jim Abbott, Conservative, Kootenay—Columbia, BC]

We are probably talking about the same thing Shaw Communications was talking about this morning—at least a five-year period when there was virtually inertia and an absence of reaction over the CTF.

I want to underscore the fact that to Minister Oda's credit, she sat down and listened, and we have now arrived, as of this morning, at an interim solution. When people are prepared to blame the minister, maybe they should also be prepared to praise the minister that we have reached a conclusion to something that started five years ago, well before our regime.

I'd like to take a look at the solution, because it's an interim solution. My concern is that when you talk about the total inertia and absence of reaction, what we really need—and perhaps this is what Ms. Fry was eluding to—is to get from you a sense of how we move forward. We've arrived at this interim solution. It's obviously fragile. In your judgment, where do we go from here? How do we open up the communication, and how do we create a situation where there can be good interaction and positive reaction?

[Pierre Karl Péladeau]

I think we have been loud and clear. We are committed to Canadian production. We're committed to this industry. We are ready to be under the microscope of the CRTC for the amount of money that we are committing to put in the system. This is, I think, our real solution. At the end of the day, we believe that because we are accountable to our shareholders, our auditors, and the population in general, we will be in a good position to talk and think about providing a decent solution for Canadians.

[Luc Lavoie]

If I may add, sir, you mentioned Minister Oda. She took a lot of beating for something that she did not deserve, because she obviously was open-minded about what was going on. She was obviously willing to listen. For once, someone was listening. The new chairman of the CRTC, when he issued a statement last week, also made it clear that it was time those issues were listened to. The board of the Canadian Television Fund is a board that's inefficient. It's a board that's not accountable, and I would go even so far as to say it's a board that may be conflicted in terms of conflict of interest.

Now that the minister has said what she has said and the chairman of the CRTC has said what he has said, we are going to wait and see what they think should be the next move, but in very good faith, we do believe that something is finally going to happen. It's about time, because if something does not happen, it's the whole Canadian broadcasting system that is in danger.

[The Chair, Conservative, Gary Schellenberger]

Thank you, and your time is up.

We have time for three questions.

You can have one short question, Mr. Scott.

[Andy Scott, Liberal, Fredericton, NB]

I think there's an ideological question here. There are those of us who would feel the public interest would be better served by a public entity. If you think the public entity is conflicted, as you give them a certain amount of money and they make decisions you question, then if you keep that money, I would suggest you're just as conflicted by investing it along with your own. That's welcomed and a good thing, but the bottom line here is whether there is any way you can imagine having an entity that is both public and private that would serve a public interest that is independent of your private interest. At the end of the day, that's who you are answerable to: not the Canadian public, like us, but your company. Consequently, is there no way you can see the coexistence of those two interests?

[Pierre Karl Péladeau]

This is what we've said. We are providing a solution, but where the CTF will end up, again, is not our decision, nor do we have the capacity to figure that out. It's a government issue.

I'd like to mention something. It's not because we're private that we are not servicing the public. We are delivering programming to our customers, to our auditors, to Canadians that is very successful and also that is making this industry very strong. This does not conflict with public policies—not at all.