Evidence of meeting #11 for Canadian Heritage in the 40th Parliament, 2nd 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
Yes, but you conveniently forget that you've never gone back on any decision you've made that has cut programming locally.
Conservative
The Chair Conservative Gary Schellenberger
Mr. Angus, please. We've come to the end.
We are going to split some time between Mr. Simms and Ms. Dhalla.
Whoever wants to go first....
Liberal
Scott Simms Liberal Bonavista—Gander—Grand Falls—Windsor, NL
God forbid I get in the middle of something good. I'll just pick up where he left off.
Liberal
Scott Simms Liberal Bonavista—Gander—Grand Falls—Windsor, NL
I'll go for it, sure.
With regard to the CRTC itself, in your October 2008 BDU policy, the following statement was in that report:
However, one of the consequences of consolidation appears to have been that the larger ownership groups have achieved operating synergies through concentrating production resources in major centres, at the expense of smaller local markets.
Are you saying, then, that your local improvement fund is the magic bullet by which you are going to fix this problem? Or is there something else in your thinking? Whether it's a fee for carriage or something else, is there something beyond that local improvement fund?
Second, I want to talk about new media for just a moment. You talked about having no illusions about regulating in the Internet. And it's true; you could spend six months looking at regulating content on the Internet and I could give my 14-year-old son 24 hours to get around it. So I agree with you on that point. But don't you think that you slowly become irrelevant by not...?
I don't make an appointment with my television anymore. I download my television. I live-stream it. That is going to be a big issue. Will that be addressed in the new media study?
Chair, Canadian Radio-television and Telecommunications Commission
I really can't talk about the new media decision until it's issued. You can appreciate that.
Obviously, one of the concerns exactly--it's why we started this--was that in 1999 we gave an exemption for new media. We said it's really a competitor to television, and let's see where this takes us, where this goes. Now, ten years later, we're looking at whether or not the exemption we granted makes sense; at whether we should alter it and put some conditions on it; at whether something should be done with new media.
But you will see it in due course. It's only a couple of months away from release. Really, it would be unfair of me to talk about it now.
I'm sorry, I forgot your first question.
Liberal
Scott Simms Liberal Bonavista—Gander—Grand Falls—Windsor, NL
I was just talking about the consolidation of the industry itself. You addressed it in your BDU policy. You used the expression, “at the expense of smaller local markets”.
Is this local improvement fund the only way to get around this? In other words, are you looking at an incentive or are you looking at a regulation? You don't want to micromanage, yet I get the impression you do.
Chair, Canadian Radio-television and Telecommunications Commission
On the contrary, I think what we're trying to do, in effect, is to provide a subsidy or a differential of some sort for local production, because Canadians want local production. It appears that somehow the present models do not generate enough funds to produce local programming. However, in the long run, the industry somehow has to change the business model and find new ways of doing it.
I'll give you one example. Two of your colleagues come from Manitoba. There's a radio group in Manitoba called Golden West Radio, which has really managed to figure out a way of making the local radio station the centre of the community. They have a website that reflects the radio station and everything else, and basically, the community becomes identified with it. The station is making a huge amount of money off their website. They use that to cross-subsidize the radio station's work. So they take the content and use it in two ways, both for radio and the website, very successfully.
Local TV will have to do the same, there's no question about it. The new media is here and you have to find ways to use it in a complementary way to make your business grow. You also need some revenues in the meantime, and that's what the local improvement fund is for.
Liberal
Liberal
Ruby Dhalla Liberal Brampton—Springdale, ON
That brings me to my next question in regard to the local improvement fund you're talking about, which you've mentioned in previous speeches. You talk about increasing it by $60 million.
Mr. Angus was probably correct in saying that Canwest was on “life support”, and CTV and CBC, and the list goes on and on of the broadcasters across the country who are on life support.
If there are only 72 eligible stations, wouldn't an extra $60 million barely be a band-aid solution to someone who is on life support? How is an extra $60 million commitment to the local improvement fund going to help these broadcasters?
Chair, Canadian Radio-television and Telecommunications Commission
First of all, it's not only the improvement fund, as I mentioned before; it is also the whole distance signal.
Second, if you take those figures and you take the total amount, I don't know for each station what causes these figures and what are the cost-cutting measures they are taking.
I have my numbers man here who can tell you our most recent numbers on this and what they show us.
Liberal
Chair, Canadian Radio-television and Telecommunications Commission
Stephen, can you explain exactly what I'm talking about?
Stephen Delaney Director, Industry Analysis, Canadian Radio-television and Telecommunications Commission
Right now, we clearly see that the operating expenses of conventional TV have been going up and the revenues have been relatively constant at the same time, so their challenge I think is twofold. One is, obviously, to find more revenue, but maybe there is an issue of what can be done for cost controls as well.
Liberal
Ruby Dhalla Liberal Brampton—Springdale, ON
Okay.
On another issue, I know the chair mentioned earlier that the broadcasters had stated they were not ready to commit to local programming if a fee for carriage were implemented. According to some of the transcripts I have read, Canwest and CTV in fact did commit to local programming if something of that sort were implemented.
How do you think that's going to play into the larger...?
Chair, Canadian Radio-television and Telecommunications Commission
At the hearing, right in front of me, were sitting Mr. Fecan and Mr. Asper, and I asked them that very question: if we implement a fee for carriage, are you willing to make commitments to local communities by using the fee for local programming? I got a resounding silence.
It's right there in the record, which you can check. I posed the question; I didn't get an answer.
Conservative
Conservative
Patrick Brown Conservative Barrie, ON
Thank you for your comments today. I'm very interested in the situation. Normally, I sit on the health committee, but I've subbed in today because I'm particularly concerned about the health of the A-Channel in my riding of Barrie. I think of my own family: we grew up watching the news, our local news, on the A-Channel, previously The New VR. They're going through a very difficult period right now. The A-Channel serves the broader Simcoe—Muskoka, which is not a metropolitan area. They have said that without an additional revenue stream they're not going to exist in the near future.
They already laid off, on March 3, a third of their staff. They've applied for a renewal of only one year, and it would be a tremendous setback for our community if local television like the A-Channel didn't exist. I think of the support they give local charities, and the service they provide simply by letting residents know what is happening around them, whether it's city council activities or local events. It would be a tremendous setback for our culture and for our identity if we lost local television in Canada.
As much as you say a fee for carriage isn't necessarily the solution, the status quo clearly isn't the solution. The status quo means no “local” in my community, and that is particularly concerning. One of the attractive elements that I heard about a fee for carriage was that it was an industry-to-industry solution. I think you're hearing comments around the table, regardless of partisan stripe, that we're all concerned about local television. You said that when a fee for carriage was rejected before, when the business cases were presented it wasn't shown that the finances of these companies were in a precarious position. You also mentioned that we couldn't have anticipated what's happened in the last six months, and you made reference to how the automotive industry is no longer funding advertising. I would suggest that if you looked at the finances of these companies right now, you would see that they are in a precarious situation. They are in a very fragile situation. You wouldn't be seeing local television stations in this country going under if the finances weren't incredibly difficult.
Ms. Dhalla referenced a few stations. I notice today we have with us Merv Tweed, who is the member for Brandon. They lost their station already. I don't want to be here a year from now and be someone sitting in the back because we've lost our station in Barrie.
My question is, if a fee for carriage isn't the solution, what is the solution to protect local television? I really hope this is an essential consideration when the CRTC meets, whether it's in the spring session or in the fall.
Chair, Canadian Radio-television and Telecommunications Commission
There is no silver bullet—that's the story. I'm not saying that a fee for carriage will not be part of the overall solution, but just putting a fee for carriage in right now will not fix the problem. That's not how it works, and that's what I tried to explain. A fee for carriage doesn't mean Barrie would survive. It's not as simple as that.
What I'm suggesting is this: we buy ourselves one year through various means and try to find extra sources of revenue so that the companies can survive. We have to rethink the system. It may very well be that a fee for carriage will be part of the solution, but it's not an industry-to-industry solution, as you call it. No doubt about it, a fee for carriage will be borne by the television and cable subscribers. They will pay for it, and it will cause a direct increase in their bill. These are the numbers I have. If we had accepted it last October, you would be paying $5 or $6 a month more and we would still have a local content problem. That's my point.
Conservative
Patrick Brown Conservative Barrie, ON
But aren't the rates going up regardless, if you look at the trajectory in the last six or seven years?
Chair, Canadian Radio-television and Telecommunications Commission
They are, yes. Undoubtedly, the cable companies will appear before you and they will tell you what they used the money for. Please ask them why they raised the fund and what they used it for.
Conservative
Patrick Brown Conservative Barrie, ON
You mentioned a potential increase under a fee for carriage of $6.50 in Toronto. Wouldn't the easy solution be caps, and didn't these groups already propose caps?
Chair, Canadian Radio-television and Telecommunications Commission
I'm sorry?