Canadian Heritage Committee on April 20th, 2007

[Diane Bourgeois, Bloc, Terrebonne—Blainville, QC]

From what I understood, there's also a partnership on broadcasting time.

[Sylvie Courtemanche]

Yes, and on advertising. So when it's our local programming, we sell the advertising, and when it's network programming, it's the air time of the CBC, which sells its advertising nationally.

[Diane Bourgeois, Bloc, Terrebonne—Blainville, QC]

Both of you put great emphasis on the quality of content.

Our committee has travelled in various regions and provinces, and people have told us that Canadian producers, both screenwriters and everyone in the Canadian entertainment industry, produce things of very high quality.

Does that mean that the CBC, which doesn't seem to be promoting the purchase of local Canadian productions, is now abandoning quality for the sake of cutting production costs? Is my question clear?

[Gary Maavara]

Let me start with the question of quality. We're quite proud at Corus of the fact that we think we're one of the best producers of Canadian children's programming in the world, and also that we really understand how to identify terrific independent production.

To give you an illustration of that, at the Banff festival last year, in their awards, the “Rockies”, Corus was the only Canadian company that won awards there. One of our children's programs, Jane and the Dragon, won as the best children's program, and one of the films that we financed won as the best motion picture.

As we're moving into this new world, quality is being defined in a lot of different ways. There's the high-end motion picture, which requires enormous resources. The kind of programming that we make requires one level down of that, but also considerable investment. And then, of course, the 15-year-old in his garage is creating something for YouTube, which is enormously entertaining as well.

With respect to the CBC, our position is that the CBC should be very biased towards acquiring Canadian and that in many ways there is not, we think, a compelling policy reason for it to be looking outside of Canada, because there's a lot of terrific stuff here.

[Diane Bourgeois, Bloc, Terrebonne—Blainville, QC]

If I correctly understood, you're telling me in veiled words that there are enough high-quality products here in Canada to favour local purchasing and that the CBC isn't currently favouring local quality.

[Gary Maavara]

I think the CBC—they're capable of defending themselves—are terrific creators of a market for Canadian programming, literally from coast to coast, and from both in-house and the independent community. One should also understand that if the CBC or anybody else is producing something in-house, it doesn't mean that the independent sector isn't involved. For example, a script may come from someone who sells it into the service. But my impression is that the CBC is buying programs from across the country and is doing quite well with it.

[The Chair, Conservative, Gary Schellenberger]

Thank you.

Mr. Angus.

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

Thank you.

Each presentation raises numerous questions that I think require follow-up, but we are limited to five minutes.

I'd like to begin with the advertisers, and get a sense from you. When we're looking at issues of major media consolidation—the CHUM merger is definitely gathering a lot of attention, but also in radio we've seen major consolidation in markets to one or two players, and often to one in some regions—the question involves the cultural argument on the loss of diversity of voice for independent producers, the loss of various potential buyers of their product. What pressure does it put on advertising?

[Robert Reaume]

We're on record as being in favour of competition in any market. As a matter of fact, we have some history of opposing, back four or five years ago, the Astral takeover of some of the Télémédia assets in Quebec, and the Competition Bureau actually required them to sell. That was a case in which a merger would have created almost 100% advertising market in some markets. That's the way we look at it. We need competition to keep rates fair in markets.

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

We've heard two very conflicting viewpoints about the role of advertising at CBC. On the one hand, we hear that because CBC is so ratings-driven, they're actually making mediocre shows because they're afraid to take chances, and they're not getting as many viewers. The other view we hear is that when they do have a success, that gives them more money that they can put into programming that they might not otherwise be able to produce.

What is your view of the financial impact of advertising in good times? If the CBC has a hit, what does that mean for the kinds of revenues that would be generated?

[Ronald Lund]

It would be very profitable for them. We've been on record on many things, and advertisers are relatively mercenary. We follow the eyeballs, and if the programs have the eyeballs, then we purchase the eyeballs. When you look at Little Mosque On the Prairie, I think that's a perfect example. It is a hit. It drives more advertising, which will produce more revenue to allow more programming.

The other thing—just as kind of a side comment to that, and it was just very lightly mentioned in a presentation—is that CBC—Our study hasn't been updated for a while, but I watch enough CBC to believe it would still be true, anecdotally. Commercial television is supposed to have 12 minutes of commercial time per hour. It's actually well over 15 minutes of commercial time when you have a U.S. program come in, because there's the time that has to be filled up and it's filled up with promos, etc. CBC in fact lives, we think, relatively close to the 12-minute rule. It provides a much higher-quality environment for us. So that's another thing we think CBC is good at.

The other thing is that big or small—because it's the same thing, for specialty channels, etc.—they do have an audience. So as long as the eyeballs and the cost of reaching those people are proportionate, then the CBC will still garner the advertising dollar. We think it's a great environment.

[Robert Reaume]

Might I just add something to that?

When you come right down to it, advertising on the CBC actually legitimizes the CBC, because if it couldn't attract advertising, you would be faced with the argument from everybody, why are we wasting money on programs no one's watching? With advertising, at least there's a correlation between what people want to see and what advertisers will pay for. So I would say it legitimizes the CBC.

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

I'd like to turn to the issue of documentaries on CBC. I found it disturbing to learn that The Passionate Eye is cutting back. I know many people who have tuned in because they've heard the buzz about certain documentary programming.

I'm going to ask two questions—and my time's running out. Number one is, out of Hot Docs, how many of these are going to appear on TV? Is there a general rule of thumb? How many might get picked up by CBC, or is it a completely different market?

Secondly, the issue we heard in western Canada was that people want to see regional programming telling their own stories—and telling the rest of the country. It seems to me that what they're talking about is either current affairs or documentaries, so that if we have a documentary about, say, life in The Pas, it would be fed into the larger chain so that people in the rest of the country could see it too. That was clearly articulated as a direction they thought CBC should go in.

Is that a direction you guys are going in or would want to go in, and how do you see that?

[Samantha Hodder]

I'll try to address them one at a time.

Regarding Hot Docs, I don't have the exact stats off the top of my head, but more than 80% of documentaries completed in Canada are completed with some form of broadcaster support; it's virtually impossible to finance a documentary without that. If you don't have the broadcaster on board, it's your credit cards funding it and your inheritance. And the other business model currently used is remortgaging your house—if you actually own one.

So how many of them will be picked up from Hot Docs? A couple perhaps. There are more than 130 films, I think, and I'm not sure if any of them—I haven't looked at the schedule closely enough. I would say that maybe one or two of them come as a result of CBC, and whether or not they pick up other ones as a result, I'm not sure. In the past they've picked up Super Size Me. They do attempt to pick up all of the big blockbusters and put them on board.

We support independent Canadian documentaries, but we're also generally supportive of the growth of audiences for documentaries, regardless of where the documentaries are from, because I think this helps feed everything. It's more of a nationalist argument. A good story is a good story; it doesn't really matter where it was made.

As for the idea of regional voices, it is interesting that current affairs programming, I would say, is done almost exclusively as an in-house exercise. We want to inform, entertain, enliven, and inspire Canadians. That doesn't necessarily support the independent sector per se. Regional voices are about having someone living in Cape Breton with a different view of the world from someone living in The Pas; so the way they tell a story will be reflective of the panorama of Canadian views and viewpoints. It helps to create different economic markets in different places and allows those who are essentially artists to live and work and participate in the world, if they don't live in Toronto or Montreal.

[The Chair, Conservative, Gary Schellenberger]

Thank you.

Mr. Fast.

[Ed Fast, Conservative, Abbotsford, BC]

Thank you, all six of you, for appearing before us.

First of all, I just have a quick question for either Mr. Lund or Mr. Reaume.

In your presentation, you referred to the fact that CBC operates in an environment that has less clutter. Is “clutter” the word you used? Could you just explain what you meant by that?

[Robert Reaume]

As Mr. Lund referred to a few moments ago, when U.S. programs come into this country and Canadian broadcasters simulcast them, the United States does not have restrictions on the number of commercial minutes they can run per hour. Believe it or not, in some of those daytime programs and other programs, fully one-third of an hour program—20 minutes out of 60 minutes—is commercials in U.S. programs. The U.S. producer of that program doesn't produce a different version for the Canadian broadcaster. The Canadian broadcaster has to fill up the difference between the 12 minutes he's allowed and the 20 minutes the Americans take; consequently, you have substantial numbers of commercials. You may find it odd that someone representing advertisers is complaining about the numbers of commercials on TV, but believe me, no advertiser wants to be one among 45; they would prefer to be one among 12, or one among 24.

Now, on the CBC, there's a lot of Canadian programming they produce themselves or purchase themselves. With Canadian programming, you don't have that border problem, and they can actually keep it to 12—or, of course, as they don't have to count promotion of Canadian programming, they can go to 13 or 14, but not to 20.

[Ed Fast, Conservative, Abbotsford, BC]

It lessens the value of the advertising, essentially.

[Robert Reaume]

Indeed.

[Ed Fast, Conservative, Abbotsford, BC]

Now I have a question for Mr. Maavara.

We've had a lot of discussion at this table, and we've heard from many witnesses about the kind of model that CBC should pursue. Some are suggesting it should continue along a more commercial course, in which it relies more on advertising revenues. I think the two of you would agree with that. There are others who are saying that CBC should have absolutely no advertising, more in the manner of Radio-Canada and CBC radio.

Do you believe that CBC should follow a commercial model or should become more of a pure public broadcaster?

I have some follow-up questions as well, so be as brief as you can.

[Gary Maavara]

Our view, clearly, is the CBC should continue to follow the model that it's following now--in other words, be commercial in some parts of its day and not so commercial in other parts of its day.

[Ed Fast, Conservative, Abbotsford, BC]

So you agree with the current status, which does rely relatively heavily on commercial revenues.

[Gary Maavara]

Yes.

[Ed Fast, Conservative, Abbotsford, BC]

Do you believe there is a role for a private broadcaster to play in supporting a robust public broadcaster?

[Gary Maavara]

We're quite proud of the fact that we do that in the local community by running a really popular local service that delivers viewers to the prime time CBC signal, so we do play a role in that, absolutely.