Canadian Heritage Committee on May 1st, 2008

[Hedy Fry, Liberal, Vancouver Centre, BC]

What about getting on platforms like iPod, etc.?

[Richard Stursberg]

I think you're right, but I think in terms of feature films it's still the case that the big experience runs off larger screens.

[The Chair, Conservative, Gary Schellenberger]

Mr. Malo.

[Luc Malo, Bloc, Verchères—Les Patriotes, QC]

Thank you, Mr. Chairman.

Thank you for being with us today.

I'd like to go back to the fees that you claim from cable operators for general interest television networks. Mr. Lafrance, in your comment earlier, you talked about the rebalancing of revenue sources. In my mind, that means that you take existing revenues and you redistribute them differently. Mr. Strusberg said instead that an additional amount was going to be required for public television services. However, as its cable operator will be redistributing services to its subscribers, I would like to know how much more that operation will cost the subscriber.

[Sylvain Lafrance]

I have the same answer to your question. We all have the same position. We're talking about two things. On the one hand, things have to be rebalanced between broadcasters, specialty and general interest networks. We also think that consumers should not have to absorb the costs. In our proposal, it's not the consumer who absorbs the costs. We're saying that there has to be a minimum basic service and we have to create greater free choice for consumers, which will mean that the overall cost to consumers will remain low and a rebalancing will occur between those that have to receive fees.

[Luc Malo, Bloc, Verchères—Les Patriotes, QC]

Isn't it unrealistic to think that ultimately it won't be the subscribers, citizens who will pay more?

[Sylvain Lafrance]

I get about 80 or 90 television channels at home. If I was asked to choose, honestly, I don't know whether I would receive that many. Perhaps my cost would go down. Moreover, most Canadians think they're probably paying for TVA, TQS, CTV and other channels, when they're not. And yet the general interest channels still attract the vast majority of television audiences in the country.

[Luc Malo, Bloc, Verchères—Les Patriotes, QC]

How much additional revenue does that represent for Radio-Canada or the CBC?

[Sylvain Lafrance]

We haven't proposed any specific revenue. We never specified an amount. We said that the day the principle of fees is recognized, it would be up to the CRTC to determine, through hearings and on proposals by broadcasters, what the amount should be.

If we at Radio-Canada wish to support Canadian drama, support the regional presence and increase our presence in international news, we develop a project and we request a fee of such and such an amount for that project. So we think that should be related to a proposal by broadcasters to improve television content.

[Luc Malo, Bloc, Verchères—Les Patriotes, QC]

Does that mean more dramas and high-cost series at Radio-Canada?

[Sylvain Lafrance]

That's probably what we would propose because we think that Canadian drama, at both the CBC and Radio-Canada, is a fundamental aspect of our role.

[Luc Malo, Bloc, Verchères—Les Patriotes, QC]

For example, we're talking about helping private general interest broadcasters by removing advertising from Radio-Canada. How much could that measure cost?

[Hubert T. Lacroix]

In the breakdown of our revenues, between $300 million and $350 million in advertising revenue is generated by our activities. That figure is in addition, among other things, to the millions of dollars invested by Canadian taxpayers.

[Luc Malo, Bloc, Verchères—Les Patriotes, QC]

And of that portion, product placement represents very little.

Thank you.

[The Chair, Conservative, Gary Schellenberger]

Thank you.

Mr. Siksay.

[Bill Siksay, NDP, Burnaby—Douglas, BC]

I want to come back to my first comment, Monsieur Lacroix, about your choice to use the word “company” in referring to the CBC. In the past, I'm sure we would have heard “corporation” or “public broadcaster” used more regularly.

I'd like to ask why you've chosen to use that terminology. Are you preparing us for a future privatization of the CBC by using that kind of language? I'm sure many of us might take that language as an indication of future direction.

[Hubert T. Lacroix]

Mr. Siksay, I apologize. My use of that word simply shows where I come from, my background before CBC. I could have and should have used “corporation”. I stand corrected. The word “company” is for me the environment in which we work every day, and that's the reason it was used. As a public broadcaster, I clearly understand where we're going. I do not have—nor do we have—an agenda to privatize your national public broadcaster.

[Bill Siksay, NDP, Burnaby—Douglas, BC]

It's interesting, Monsieur Lacroix. Did you write the statement yourself and go through the process of having colleagues look at it?

[Hubert T. Lacroix]

Absolutely. A number of people worked with me in delivering my remarks. The word “company” for me means the environment in which we work. We are a public broadcaster, but we are a corporation. Where I come from, “corporation” and “company” are synonyms.

[Bill Siksay, NDP, Burnaby—Douglas, BC]

Is driving Radio 2 into the ground also a direction to prepare for privatization of that service?

[Hubert T. Lacroix]

Mr. Siksay, with all respect, we are not driving Radio 2 into the ground.

[The Chair, Conservative, Gary Schellenberger]

Mr. Chong.

[Michael Chong, Conservative, Wellington—Halton Hills, ON]

I want to focus on the comments about generating cable fees, which I thought were quite interesting. I know that the British Broadcasting Corporation charges a licence fee of approximately £120 per household per year, which is $250 Canadian. This is mandated by the British government, and it generates about £3 billion in revenue. This is about $6 billion Canadian. With 60 million citizens in the United Kingdom, this works out to about $100 per capita in funding. I know that your public resources are approximately $1 billion Canadian. With 33 million Canadians, that works out to about $33 per capita.

Could some of the funding shortfalls you feel you face be addressed by this new carriage formula?

Secondly, we as members of Parliament get complaints about Radio 2 trying to diversify and the lack of expansion into the largest market in the country, the greater Golden Horseshoe, which includes Barrie, Kitchener, Waterloo, Hamilton. This is a market of almost 10 million, and will grow by three or four million in the next 25 years. How many of your problems are due to your not having access to greater revenues?

[Hubert T. Lacroix]

No doubt, sir.

In your report, one of the recommendations that came out of this committee was an increase from $33 to $40 per capita, which would have been an increase, if we use your numbers, of about $200 million for CBC/Radio-Canada. This obviously would be a welcome improvement.

When we look at the services we would agree upon—and I go back to the MOU—the MOU would then describe in this new contract with Canadians what we would do. We would then link the dollars and the extra money to these services in order to deliver them in the best possible way and also to a level of service that Canadians expect from their national public broadcaster.

It would obviously make a very big difference.

[Michael Chong, Conservative, Wellington—Halton Hills, ON]

Have you modelled the amount of additional revenue that could possibly come from these carriage fees?