Canadian Heritage Committee on March 29th, 2007

[The Chair, Conservative, Gary Schellenberger]

Good morning, everyone. I'm very pleased this morning to welcome everyone to our 46th meeting of the Standing Committee on Canadian Heritage.

This morning, pursuant to Standing Order 108(2), our topic is a full investigation of the role of a public broadcaster in the 21st century.

This morning, for the first hour, we have as an individual Anthony Manera, and from the Public Policy Forum we have Mr. Bill Neville. Welcome, gentlemen.

I'll let whoever wants to go first with their presentation go ahead, and then the second person can follow, and then we'll open it to questions.

[Anthony S. Manera, As an Individual]

Thank you, Mr. Chairman, and members of the committee.

We would like to express our appreciation to the committee for giving us this opportunity to present our ideas concerning the important task that you have undertaken, a review of the mandate of the Canadian Broadcasting Corporation—Société Radio-Canada. This is an opportunity for your committee to promote changes. In our opinion, these changes are important and urgent.

Canadians need a public broadcaster. This conclusion has been supported by several stakeholders your committee has already heard from, by every review of the Canadian public broadcasting system carried out since its creation in 1936 and by the Standing Committee on Canadian Heritage in its June 2003 report.

Therefore, the fundamental issue is not the necessity of having a public broadcaster, but rather what kinds of services CBC and Radio-Canada should offer their audience. With some limited but important exceptions, our focus will be on English television. This is not because the other services are without merit or problems, but because English television is the service with the most difficult challenges. For this reason, we are going to concentrate our comments on English television.

But as we acknowledge the problems facing English television, we should also point out that CBC as a whole remains a very powerful conveyer of our Canadian culture and cultural sovereignty. CBC's radio services remain second to none and, in survey after survey, are cited by Canadians as being of great importance to their sense of nationhood.

Today, we are going to make 10 specific and bold recommendations; perhaps subject to controversy, but necessary, responsible and doable. The time has come to act and you, the members of this committee, have the power and the responsibility to bring about the renewal of the Société Radio-Canada and the CBC.

Mr. Chairman, I will now give the floor to my collaborator, Mr. Bill Neville.

[Bill Neville, Senior Advisor to the President, Public Policy Forum]

Thank you, Tony.

Mr. Chairman and members, thank you for the opportunity to be here today.

I'd like to speak briefly to two specific issues. First is how the CBC is financed. Second is a question that I know is of interest to many MPs, and that is the CBC's legislative mandate to serve the needs of Canada's regions.

In terms of finances, as members know, CBC Television and Radio-Canada depend on commercial revenues to meet up to 40% to 50% of their operating budgets. The result of this reality means that raising those revenues becomes de facto the number one priority facing the corporation. If you don't get the advertising revenue, the entire budget collapses.

The impact of that on its programming is inevitable. That's why we have such a heavy reliance on professional sports. That's why we have commercials inserted into virtually every program, even into flagship newscasts--an unusual practice for a public broadcaster, in my experience. That's why, protestations to the contrary, much of the CBC is taken up with ratings chasing, because that's what advertisers are interested in and that's what the CBC feels it has to deliver.

The result of all of that is to end up with what someone has called a “subsidized commercial network”. In fact, Mr. Rabinovitch himself, at a speech in Toronto, said, “How can you call yourself a public broadcaster when over 50% of your budget comes from competing with the private sector?”

Members, and indeed Canadians, in my view, should be under no illusion. As long as CBC Television and Radio-Canada have this kind of dependency on commercial revenue, you're going to have what you have now--a subsidized commercial broadcaster.

But if you want a more genuine public broadcaster, one that meets the kind of definition the CBC itself offered in its brief to this committee last week, there's no alternative but to lessen that commercial dependency. And again, there's no use kidding ourselves. While in our brief we've suggested some ways that the CBC could add non-commercial revenues, in the end you're talking about increased public financing. That's the reality.

In that respect, I refer you to the Nordicity study that shows that compared with virtually all other countries that are in public broadcasting, we in Canada have not been known for our over-generosity in terms of support for public broadcasting.

In terms of regional programming, the corporation's mandate, as set forth in the Broadcasting Act, says that CBC programs should “reflect Canada and its regions to national and regional audiences, while serving the special needs of those regions”. If you ask the corporation about its regional responsibilities, invariably the answer comes back with something about local newscasts.

Over the years the CBC has tried various formats for these--Tony and I have lived through a number of them--all of which, frankly, have been failures in almost every market in the country, and for good reason. I think I can predict, without too much cynicism, that the latest version, which was mentioned to you last week, will meet with about that much success as well--and for good reason. In my judgment, it's because the basic policy is misguided.

First, local privately owned stations dominate the supper hour news shows for a reason. It is for them, in most cases, about the only original programming they invest in. They make major investments in it. They do a good job. And they dominate their markets, with few exceptions. Just look at CJOH's position in Ottawa. That's just one example. I know there are some exceptions to that, but they are exceptions.

Second, I think it's worth pointing out that the CBC is already the local broadcaster in most of these markets. It just happens to be in radio. Its early-morning shows and its drive-home shows are the places where citizens go in most of these communities to learn about what's going on in their cities and to hear discussion about them. If you look at the corporation as a whole, it seems to me that whatever local mandate it has is being served, in fact, through its radio, which can--as the CBC mentioned--and should be expanded.

Third, even if the CBC's local TV news shows were more successful, they would not address the act's mandate to reflect the national and regional audiences--that's not what they're about--and neither by the way, does originating things like new shows from Halifax and Calgary with content that does not reflect those locations, but could just as easily have been written in Toronto.

In my view, the corporation needs to rethink its whole approach to regional programming and to go back and look at what the mandate in the act is--to reflect the regions to the country and to the regions themselves. I'm not a programmer and I don't pretend to be one, but I think there are opportunities here for more imaginative approaches. In news and public affairs, for example, what about a series of regional weekly public affairs programs that give more attention than you get in a 90-second news spot to things that are of interest in a region; and if you had a series of five regional programs, you could take the best-produced in one region and show it to Canadians in the other regions. That's how you reflect one region to the other. It might have helped all of us understand the events of Monday night, for example, if in advance of that we'd had a good background on what was happening with the ADQ in Quebec.

Similarly, I'd like to know more about why the pine beetle infestation is in British Columbia. I read a bit about what P.E.I. is doing in wind power research. There are lots of opportunities there, but nobody is really taking the time in this current system to do this. The CBC can do it, and it would be reflecting the regions within them and it would give you an opportunity to reflect regions back to other regions.

In another area, in cultural programming, I think most people believe Canada has undergone a cultural explosion in recent years in terms of the development of regional performing arts groups. When I was doing my paper for the Public Policy Forum, I spoke to one senior arts executive who said to me that he hears evidence of this explosion on CBC Radio, but he doesn't see much of it on CBC Television.

I would suggest the corporation can be and should be a television showcase for these major regional groups, both within the region and to the country, and frankly they're doing very little of that at this point. Other people may have better ideas for programs than I have, but the point and my plea is this: I think it's time to move beyond this one-dimensional view of regional broadcasting as involving local newscasts or being focused on local newscasts. Look at what the act says and try to develop an approach and philosophy that's more in keeping with it.

Thank you.

[The Chair, Conservative, Gary Schellenberger]

Yes, Mr. Manera.

[Anthony S. Manera]

Mr. Chair, I promised at the beginning that we would make some very specific recommendations. We don't want to beat around the bush with platitudes. We want to see action.

So here's the very first one. It has to do with governance. Governance is not a very sexy subject, but it's important.

I have served, over my life, on over 25 different boards of directors in the private sector, in the public sector, in Canada, and in the U.S. Not a single one of those boards did not have the authority to hire and fire the president and chief executive officer. How can you hold a board accountable for the effectiveness of their corporation, the CBC, when the board has no say in the hiring, the evaluation, the compensation, and the firing of the CEO? It just doesn't make any sense from a governance point of view. Yet that's the reality. Not only that, if the office of chair of the board is empty, guess who gets to fill it? The president. I did that for nine months when Patrick Watson resigned. I didn't want to do it. I was very uncomfortable doing it. It wasn't my job, yet I had to do it because the legislation says you have to do it.

If you do nothing else on this committee, the one thing you can do is recommend that the government change the legislation, give the board the power to hire, compensate, evaluate, and terminate, if necessary, the CEO, and I think that will go a long way in terms of giving the board the tools it needs to really manage a corporation. Right now, the one most significant tool that a board needs to be effective, it doesn't have.

No one should interpret my remarks as a criticism of the current management or of the current board. They're locked into this model, and it's not their choice necessarily. I don't intend any criticism. I'm simply saying it's a systemic flaw.

So that's the first thing.

The second thing--and I strongly advocate this--is something that, if you had asked me 10 years ago, I would have been dead set against, but now I'm all for it. Why? Because I've learned from experience. Have two employees, elected by their own members, sit on the board. It's not to represent the interests of their members. No, that's the union's job. In fact, it would be illegal for them to try to represent the interests of their members. It's to provide the unique perspective that they have. In any large organization, if you really want to know what's going on, don't always talk to the top people; talk to the people right on the floor who do the work day in and day out. They know what's going on. They have a unique perspective. They understand what's going on. They have a realistic knowledge of what needs to be done. I think the role of the board would be strongly enhanced if it had the benefit of that perspective.

I know this requires a change in legislation, but if this committee supports it, and if the government supports it, it is quite possible to implement some of these ideas gradually without changing the legislation. One way would be through the government's commitment, when the time comes to appoint the next president, to do so from a list submitted by the board of directors. I see that as an interim step towards changing the legislation that could be taken right now.

As far as the employee representatives are concerned, again, ideally that requires a change in legislation, but that may take some time. In the interim--again if there is a consensus on that--the board itself could create the process of election of two employees, who could sit as observers, and allow them to participate but not give them the vote. I think the mere participation and involvement of those employees would add great value, even if they didn't have the vote immediately.

I learned this long ago, because I served on two boards--those of Algonquin College here in Ottawa, on which I was the chairman, and now the Ottawa Hospital. Both of those boards have employee representatives on them. I have to tell you, that's what changed my mind on this topic. If you had asked me 10 years ago, I would have said, “No, that's a bad idea”, but now I say it's a good idea, because I've experienced the tremendous value added by those people.

So this is a very specific recommendation, and we really feel the committee should act.

The second recommendation has to do with pro sports--hockey--and it looks as though we've been overtaken by events on that score. I have argued passionately in the past that pro hockey belongs in the CBC, and I still feel there's nothing wrong. The problem, however, is that it takes up so much of the resources of the corporation. Over 40% of the audience share in English television is from sports, which is a total distortion of what a public broadcaster should be.

Before this hockey deal was signed, we were saying either get out of it or maybe reuse your exposure in collaboration with the private sector so this dependence on pro sports...and not only for the audience share. If 40% of the audience is from sports, it's a distortion of the mandate. It also makes the CBC vulnerable. A couple of years ago when you had the lock-out of the NHL, look what happened. All of a sudden the CBC was left with several hours of programming it had to fill, plus it wasn't getting a lot of revenue. So it put in a lot of American shows, as if we didn't have enough of those already elsewhere. So that's the problem.

Now a deal has been signed. We don't know the details and we're unable to comment. But as a long-term strategy, we think the CBC should still seriously consider reusing its heavy reliance on pro sports. That goes along with Bill's point on the heavy dependence on commercial advertising that steers the corporation in a certain direction.

The other thing Bill talked about is this business about local television news. There's nothing in the act that gives the CBC a mandate to provide local services. It talks about regional service. The private sector in most cases--not all--is doing a reasonably good job of providing local television news, so why should the CBC try to do that? It can do that on radio. A dollar spent on radio goes five times further than a dollar spent on television, because radio is a less costly medium. It is also a better medium for local coverage.

There are savings the CBC could realize by getting out of local television news, with certain exceptions. There are markets in which it should still stay because there is insufficient or inadequate private sector coverage. We recognize that and acknowledge it would be an asymmetrical arrangement. But heck, asymmetry is part of Canada. We're not a symmetrical nation, so we'd better buy into asymmetry, because that's the reality. You can go a lot further in radio and do a much better job . There's a strong audience loyalty to radio. This is a redirection of funds within the corporation, and we think it makes a lot of sense.

[The Chair, Conservative, Gary Schellenberger]

Mr. Manera, could you come to a conclusion? I think there are a lot of questions around here, and we'll only have half an hour after that.

[Anthony S. Manera]

Absolutely.

I think the legislation needs to be amended to acknowledge the importance of new media. The CBC has to be a player. It is a player and is showing tremendous leadership. This should be acknowledged in the legislation so it can pursue this aggressively. There's a big future in digital. The future is Internet-based, and the CBC has to continue on that track.

Some of these things require more money, and that has to come from increased parliamentary appropriation. But we also feel there is an opportunity here to redirect money from the Canadian Television Fund to the CBC. It now only gets 37% of that fund indirectly through independent producers. A dollar from the Canadian Television Fund goes a lot further with the CBC than with private broadcasters, because the CBC gives those programs shelf space in prime time, when there is the largest audience. So we're recommending the 37% be jacked up substantially.

The cable companies like you to believe it's their money they're contributing to this fund. It's not their money; it's money they've collected from subscribers as a condition of licence, so it's taxpayers' money no matter how you look at it.

This is very precise and specific. I'm sorry, Mr. Chair, if I went on too long, but I think we've covered pretty well everything we wanted to cover. We're open to your questions.

Thank you very much.

[The Chair, Conservative, Gary Schellenberger]

Thank you. It was very interesting. We only have an hour, so I have to do this because I know there are questions.

Mr. Scott has the first one.

[Andy Scott, Liberal, Fredericton, NB]

Thank you, Mr. Chair.

Thank you very much. You are always informative and animated, and it's much appreciated.

I'm going to the brief. Let me just say that in terms of funding, in addition to the argumentation that offers comparisons to other jurisdictions, the point has to be made--and I'm sure you're aware of this, but I think it needs to be made on the record--that it is very expensive to offer broadcasting in a country as big and as sparsely populated as this one, so even those comparisons are generous to Canada. I think it's important for that point to be made.

Other than Hockey Night in Canada, when it says that some programming should be other than professional sports, is there anything else you were thinking about, other than maybe vacating some local news in some markets? It says “for instance”, and I'm just curious as to what other things you were thinking about when you said “for instance”.

[Anthony S. Manera]

No, those are the only two areas that we identified. There could be other areas, but those are the two that came to mind.

[Andy Scott, Liberal, Fredericton, NB]

I'm just thinking out loud here, but what about the possibility of using some of the very popular programs--I'll use Hockey Night in Canada as an example--to self-promote? One of the problems with this multi-channel universe is simply getting attention to what's available on the CBC. If you have a very popular program like Hockey Night in Canada, it seems to me to be a wonderful vehicle--perhaps not for commercial advertising, if that's what you're trying to avoid--to promote the CBC itself to an audience that is probably harder to get to. The people who are going to be watching CBC drama probably know where to find it, but it's not a big audience, and therefore this becomes an access issue. For what's it's worth, I've always thought that was part of the lost opportunity that's available to the CBC when they have a popular program like that.

I'm curious about governance. It is critically important, because I think we have to significantly increase public support, and concurrent with that public support come increases of confidence in the governance model. How do we go about the process of choosing the board for the CBC? I know you say that we would have some authority in this committee, but those of us who are members of the committee would, I think, appreciate and recognize that all committees have many more assignments and responsibilities than they really ever get to deal with thoroughly and fully. In theory, I suspect, people looking from the outside in would say that the heritage committee could look at those appointments. They would have a mental image of the thoroughness of that oversight exercise, but we know on the committee that we are four years behind on most things we're trying to do most of the time.

How could you style that process so that we could have some--I don't know what it would be--panel of experts? When we make judicial appointments, we have the Canadian Bar; we have other outside experts who could do this. Is there some way that you could propose, in addition to the oversight that we would offer? I think our oversight is critical, but I don't think it's enough to elevate the thinking about that board to the point that it is the kind of board I think you have in mind when you make that proposal.

[Bill Neville]

Having been involved in politics over the years myself, I think it's unrealistic to suggest that governments of the day are going to give up their ultimate right to make order in council appointments.

[Andy Scott, Liberal, Fredericton, NB]

Agreed.

[Bill Neville]

The question is whether we can get better quality than we sometimes do from within that system. I think we can. First of all, we need to have a process by which boards tell their government what their needs are and describe the kind of person they need, whether that's a regional need or a linguistic need or a gender need or a speciality need, so that the government gets a better profile. Then it would be to have some kind of vetting process for appointments, whether through these committees or whatever. I know the present government has looked at various models to it.

I can only speak for my own experience on the CBC board over more than eight years, but I think the quality of people on board overall was pretty good. Once in a while, as we all know, somebody's campaign manager slips in--not that campaign managers aren't qualified to be directors of the CBC, but--

[Andy Scott, Liberal, Fredericton, NB]

Present company included.

[Bill Neville]

Yes, exactly--if that's their only reason to be there. That's the issue. But I think we need a bigger role by boards to try to identify their needs. I think that is happening gradually. Then at least the government has some guidance, and at least then government appointments could be tested against that.

[Andy Scott, Liberal, Fredericton, NB]

On the question of local news, it will come as no surprise that in Fredericton and the entire Atlantic area, the reality is that there isn't a robust news industry in our part of the country.

As I said the other day before different witnesses, I would agree it has to be resourced, and that is in fact what we're talking about. But if the CBC didn't provide local news, I'd have to say there really wouldn't be much local news in Fredericton. We get both Global and ATV out of Halifax. I love my Nova Scotian neighbours, but I'm not that interested. My friends and I need to know what's going on in New Brunswick, and we wouldn't get it any other way.

I think our next witnesses will have something to say about it too.

Thanks.

[The Chair, Conservative, Gary Schellenberger]

Thank you.

Mr. Kotto.

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

Thank you, Mr. Chairman.

Thank you for your testimony, gentlemen. I have several questions to ask you; I will therefore do so quickly.

From your perspective, do you consider that the CBC is fulfilling its mandate?

[Anthony S. Manera]

Yes, but only partially. As my colleague Bill Neville emphasized, the regional aspect must be improved. We have a very interesting culture in all the regions of Canada. There is a certain creativity that exists outside of the major urban centres. Many of our Canadian stars launched their careers in the smaller cities across Canada.

Quebec, for example, has a cultural vitality that exists not only in Montreal but also outside of that city. Newfoundland and Labrador has a very particular culture. On the anglophone side, that province exhibits great creativity, with very interesting comedy. The creativity exists everywhere in Canada.

The opportunities that are available on CBC, in the regions, are not sufficient. What we are recommending today, when you talk about reducing local coverage, is a shift in direction in order to put more emphasis on the cultural contribution of all the regions of Canada.

In that sense, the answer to your question is “no”. I do not want to criticize CBC management, but the reality is that for all kinds of reasons, it is not currently meeting the regional challenge satisfactorily.

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

Should Radio-Canada/CBC not be brought back to the status of a basic broadcaster as some are demanding, that is to say limited to playing a complementary role instead of competing with the private sector, so that it can stay within its current budgetary envelope?

[Anthony S. Manera]

Ideally, there would be a very clear distinction made between the public and private sectors. But in practice, there is a grey zone. There will always be some overlap, because creativity cannot be demarcated so clearly.

Broadly speaking, a public broadcaster definitely must play a distinctive role. We are recommending a renewal that would ensure that CBC/Radio-Canada would distinguish itself from the private sector to such a degree that people would be able to recognize that distinction.

We are making some very specific recommendations so that the changes we are talking about can be made.

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

We have been asked several times to work on increasing the CBC's budget. In our opinion, it is an issue of transparency and of accountability details.

Do you have any comments on the subject, since you have worked on it?

[Anthony S. Manera]

Yes, and I believe that Bill Neville has something to add.

The CBC is subject to an annual audit by the Auditor General of Canada. The books are therefore audited, but it would be possible to improve transparency. In fact, the Auditor General recently pointed out in her report that certain improvements could be made in terms of transparency at the CBC. I agree with her recommendations.

One must also accept, when we are talking about certain aspects where CBC/Radio-Canada is in competition with the private sector, that there are limits to the information that can be made public. In a competitive environment, you have to be careful. I believe however that the transparency and accountability of the corporation could be improved upon, as the Auditor General has recommended.

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

The transparency cannot go beyond the current sensitive area, but could the information not be made available to parliamentarians, for example?