Canadian Heritage Committee on April 22nd, 2009

[The Chair, Conservative, Gary Schellenberger]

Thank you.

Madame Lavallée, please.

[Carole Lavallée, Bloc, Saint-Bruno—Saint-Hubert, QC]

Thank you, Mr. Chairman.

Good afternoon, and thank you for being here.

Unless I am mistaken, Shaw Communications Inc. does not provide any service in Quebec. Is that correct?

[Jean Brazeau, Senior Vice-President, Regulatory Affairs, Shaw Communications Inc.]

That is correct.

[Carole Lavallée, Bloc, Saint-Bruno—Saint-Hubert, QC]

So there is a good reason why I am not that familiar with your company.

[Peter Bissonnette]

Our satellite service does provide services in Quebec. What was Star Choice, which is now called Shaw Direct, provides services to all of Quebec.

[Carole Lavallée, Bloc, Saint-Bruno—Saint-Hubert, QC]

I see. So there is a good reason why I do not know you very well.

A document we were given states that you are “a diversified Canadian communications company whose core business is providing broadband cable television, high-speed Internet, digital phone, telecommunications services and satellite direct-to-home services to 3.2 million customers”.

[Peter Bissonnette]

Yes.

[Carole Lavallée, Bloc, Saint-Bruno—Saint-Hubert, QC]

I'm not clear on whether or not you do what is known as “general interest television”. Do you do television production?

[Peter Bissonnette]

No.

[Carole Lavallée, Bloc, Saint-Bruno—Saint-Hubert, QC]

Fine. So you are what is known as a distributor. I understand now why you...

[Peter Bissonnette]

That is correct.

[Carole Lavallée, Bloc, Saint-Bruno—Saint-Hubert, QC]

I have no problem with that, but I understand now why you did not talk about Canadian content: that is not an issue for you.

Although I am fairly sure what your answer will be, I will nevertheless ask you the same question I asked those who appeared earlier. Pierre Karl Péladeau, of Quebecor Media and its affiliate, TVA, appeared before the committee on Monday and suggested that the licence fees for satellite and cable distribution be better distributed, and that in future they be given not just to speciality channels but also to general interest channels.

You realize that this would not result in increased cost to consumers, but rather in a different distribution. I would like to know what you think of this idea. Is my question clear?

[Peter Bissonnette]

My gosh, I can visualize CTV and Canwest.... There are various owners of specialty services. Would they be prepared to share what they derive in their fees for specialty services amongst themselves?

[Ken Stein]

They can do that already.

[Peter Bissonnette]

They can do it right now. In fact, what we're suggesting with CTV is if you take CTV as a whole, they have conventional broadcasting, over-the-air broadcasting. They have specialty services. As a company, just as we may not have all of our divisions operating at the same level, they are still one and the same. They are Shaw. In the case of CTV, we believe their specialty services...which we thought they were very wise to be buying, because there was a change in the over-the-air business, it was diminishing somewhat, whereas the specialty services were increasing, so it gave them a hedge, if you will, against the kind of crisis you're talking about today. That hedge actually exists.

[Carole Lavallée, Bloc, Saint-Bruno—Saint-Hubert, QC]

I do not want to play the devil's advocate, or the advocate for Pierre Karl Péladeau, but his argument is that each component of a company must be profitable, and if some are not, a fair distribution must be sought.

[Peter Bissonnette]

I lost the translation there. I'm sorry.

[Ken Stein]

Well, we understand what they're saying, and it's the absolute truth that if you have entities that are subsidized, then you have to start looking at them as entities and doing something about it if they're not coming up to the mark.

Part of having this kind of synergy among services is that when one part of the business is not doing so well, you can sustain it by financing it, which is what we did with Star Choice. When we were losing $350 million, obviously that wasn't going to continue, and we went through a number of management changes and a number of investments that have put it on a financially sustainable basis. That's the objective.

When Mr. Asper announced the approval of his acquisition of Alliance Atlantis, he talked about the synergies and the energies that would be created between the television side and the specialty services. We think that's the ultimate objective.

Are you going to go through certain downfalls and certain little bumps in the road? You are, absolutely, but that's what a business is all about. It is all about dealing with those bumps in the road and then coming out at the end with everybody strengthened. We don't see it as being subsidies or cross-allocations or things like this, but certainly you have to look at the total company in terms of how they will get through a period of a downturn.

[The Chair, Conservative, Gary Schellenberger]

Okay. Thank you for that.

Mr. Masse is next.

[Brian Masse, NDP, Windsor West, ON]

Thank you, Mr. Chair, and thank you, gentlemen, for being here this afternoon.

I'm actually a customer of Star Choice. We have that in my office in Windsor.

I'd like to know specifically why you can have so many stations and slots for pay-per-view, pornography, and digital music, but you can't find a slot for A-Channel Windsor, which I had requested for a number of years. I'd like to hear the reason behind that. Is it simply because, once again, you went to a new business plan and wouldn't allow that A-Channel to go on the system, despite the fact that I could watch A-Channel news from London and A-Channel news from Ottawa? I couldn't, from my own office in Windsor, watch A-Channel Windsor, which literally was only basically a five-minute car ride away from my office.

[Peter Bissonnette]

Well, that's a great question. If we could be all things to all people and carry every service and have the capacity to do that, it would be in the best interests of our customers, but it really comes down to having to balance interests.

In our channel lineup on Star Choice, we've tried to balance our customers and original programming. If you go down our lineup, you'll see we have 12 CBCs all showing the same programming, another 10 of Canwest Global services, and four or five A-Channels, so we've provided sufficient reflection in the capacity we have.

Capacity is a limited resource. Right now there is not one channel we can add, unless we are able to have another satellite go up to give us more capacity. We've been using technological multiplexing methods to try to expand our capacity. We've dropped some services to accommodate news services. We've added high-definition services because customers are telling us they're buying new boxes and new high-definition televisions and they'd like to have some programming in the high-definition format--

[Brian Masse, NDP, Windsor West, ON]

You can have all this. Where I purchase as a customer, you have hundreds of channels. Why couldn't you drop a...?

You've come here and said that basically there is no problem. I heard that for the auto industry. Since 2002 I've been raising this issue about the crisis in the auto industry, and you come here and say there is no crisis. At the same time, the A-Channel is disappearing in my community right now, a community that stands in the shadow of the United States, and we've requested basically that the A-Channel be on a service that you provide. Tell me why we couldn't find one slot in all of that mix for local news programming. It's a responsibility for all of us

[Peter Bissonnette]

I understand that. If capacity were not an issue, we could be carrying 400 news services of duplicate programming from every community across the country. We've tried to balance that.

Ken, do you have any thoughts on that?

[Ken Stein]

It is a matter of making certain choices. There are also regulatory requirements in terms of obligations to carry a number of duplicate services, which we would love to--

[Brian Masse, NDP, Windsor West, ON]

The programming out of Windsor is not a duplicate service of A-Channel London, A-Channel Ottawa, and the other A-Channels we could get but could not get in Windsor.