Canadian Heritage Committee on April 22nd, 2009

[The Chair, Conservative, Gary Schellenberger]

Thank you.

Your time is up.

Mr. Pomerleau.

[Roger Pomerleau, Bloc, Drummond, QC]

Thank you, Mr. Chairman.

I would like to thank our witnesses for coming to meet with us today. I have just one question, but a long preamble.

The producers have told us generally that if they did not generate more revenue, they were going to have to cut certain services being offered at the moment. The distributors, including Rogers and yourselves, tell us that in the end, there is no problem, if we look at these companies overall, we see that they can afford to lose some money in specific areas, but that generally, their activities are extremely profitable. That is roughly what we are hearing from the various witnesses who appear before us.

You brought along with you a rather lengthy brief. Like the representatives from Rogers, you refer to a tremendous number of facts that tend to confirm very rationally what you are saying. The text is very well written. It states that these people are investing less and less in Canadian productions and more and more in foreign productions, particularly American ones. These people claim to be losing money, but this often refers to products they bought abroad and that have nothing to do with local distribution.

I confess that I have a favourable bias toward your point of view, but that does not mean that this could not change. I find it logical. However—and this is where I have some reservations—I am not an anglophone; I watch television in English from time to time, but I watch more television in French. And one thing seems clear to me. Most of the programs in English that I watch seem to be American in one way or another—whether they are imports or series or feature actors who are quite clearly American.

On the other hand, when I watch television in French, I never see or almost never see that type of thing. The news is really designed in Quebec for Quebeckers. Television series are made from A to Z by Quebeckers and for Quebeckers. There are very few American programs presented in translation. Variety shows—and here we are talking about Quebecor—such as Star Académie or others are produced in Quebec by Quebeckers. The same goes for advertising. People tried for a long time to use advertisements produced in Toronto to sell products here, but they had to stop, because people were simply not buying these products. The advertising has to be produced in Quebec if products are to sell.

Mr. Péladeau's company, Quebecor, seems to be dealing with problems that are totally different from the other companies. You say that the truth of the matter is that the companies have done nothing to promote Canadian programming. That is not true of Mr. Péladeau. All his programming is home grown, and he pays what it costs to do that. He is making money, or at least I hope he is, and I hope he will continue to do so like the other companies. In any case, his problems are totally different from those faced by other producers of television programs. I come now to my question.

If as a Member of Parliament I conclude that your comments are valid for the Canadian side of the market, that producers like CTV and Canwest really do not have any problems because they are producing fewer and fewer Canadian programs, but that this is not the case for Quebecor, do you think I would be justified in saying that a different solution should be applied to Quebecor, perhaps even as regards broadcast rates?

[Ken Stein]

We don't agree with fee-for-carriage on any basis because there's no justification for it. We serve as a delivery mechanism, and I'm sure it's the same in Quebec as it is in the rest of Canada. The whole way and nature in which the cable policies were structured over the last 40 years was essentially to recognize the need for Canadians to have access to a whole diversity of services. So we have worked hard.

If you look at the eighties, for example, when we started to launch pay and specialty services, a number of the French and English services failed. So we came up with solutions in the nineties to basically guarantee carriage, offer services and tiers, do them in the most customer-friendly way that we could--putting some of them on basic, some of them on tiers, giving people choices, doing packages, doing a whole balancing act. In the end, it resulted in a number of tremendous accomplishments that we have to recognize in the system.

The first accomplishment is that we now have hundreds of Canadian services. If you want Canadian content and interesting stories, you can find it; they are there. They may not be the ERs and the CSIs--which was a Canadian invention by the way--but that's a fact of life. I mean, Hollywood is a dominant influence on English Canada, whether it's in film or in television.

So what we did through the nineties and through this decade is to ask, given that situation, what can we do to ensure that Canadians' needs are met as Canadians--and that's news, sports. I get tremendously excited when I go to the ski races in Quebec and RDS is there. That didn't happen 10 or 15 years ago. So recognition of Canadian athletes, amateurs, all that sort of thing.... There's much more recognition of that now than there was 10 or 15 years ago. These are tremendous advantages.

Second, on the satellite side, people who live all across the country—aside from the problems that may exist with respect to Windsor—can get the same or a better level of services than in the city of Toronto. No other country can make that kind of statement.

[Peter Bissonnette]

Or Montreal.

[Ken Stein]

Right. So that's a tremendous accomplishment for the system. The second part of all this is that when this policy was worked out, cable was given a monopoly. That monopoly is gone. In Winnipeg you have a choice of five distribution television services. We have to compete, and we have to set our rates accordingly and put our packages together accordingly. These are tremendous accomplishments of the Canadian broadcasting system and we should be very proud of them.

Now people are saying there's a systemic issue and we need a short-term solution. Well, that's a contradiction. If there's a systemic problem it requires a longer-term look. It needs a good review of what the facts are. What it doesn't need is, “Oh, okay, let's panic; let's have fee-for-carriage and let's have it because the Americans have it.” Look, we ran systems in the United States. There is one single objective in the U.S. broadcasting system: profit. There are no content regulations. There are no cultural obligations. There's nothing. You produce and that's the objective. That kind of system isn't going to work in Canada. We're proud of the fact that we offer services in all of the smaller communities we serve, and that's what we will continue to do, and that's why we're proud of the Canadian broadcasting system.

[The Chair, Conservative, Gary Schellenberger]

We went a little overboard there, or a little long.

Mr. Uppal, and then we'll decide whether we have time for another round or not.

[Tim Uppal, Conservative, Edmonton—Sherwood Park, AB]

Thank you very much, Mr. Chair.

I'm going to give you a chance to expand further on something you were talking about in your introduction, some regulatory solutions. You mentioned something about advertising restrictions. If you could, start there and then talk about a couple of the other things you mentioned.

[Ken Stein]

Part of the issue is that there are certain availabilities we don't have access to. We've always wanted access to those. The commission is now reviewing that. We're saying, okay, rather than stopping people from increasing their advertising situation, we want to be able to use more local availabilities, to support local broadcasting and local community channels.

For example, we carried all of the WHL hockey games a few years ago. Alex can speak to that. In order to do that, we also had sponsorship messages. The commission slapped our hands and said, no, no, you can't do that; you've gone overboard. You can have corporate sponsorship, but you can't have corporate advertising.

We continue to offer the WHL, but we think there's a tremendous attraction for local services in local markets. I'm not totally sure, and I'm not going to comment on the nature of the national broadcasters' business, but what we've seen over the past decade is more and more a focus on national broadcasting. There's no more BCTV. Canwest is now a national service. All of those things have become consolidated. That, in itself, is a good thing, but if the local advertiser isn't being served, then the money is not going to flow to the local broadcaster.

What we're saying is, okay, maybe the broadcasters have a point in saying there are restrictions on what they can do in terms of advertising, etc. Maybe there are restrictions on others as well. It would be useful to remove those restrictions and basically try to develop the advertising market in a stronger way—not in a protectionist way, but more in terms of what are the advertising opportunities, whether on the Internet, whether on the local television channels, or whether on the community channels.

[Tim Uppal, Conservative, Edmonton—Sherwood Park, AB]

So there are restrictions right now put on you and on the broadcasters that restrict ad revenue. They're saying the main thing hurting their business is ad revenue, but there are other regulatory restrictions on those.

[Alex Park]

The restrictions fall into a couple of areas. One, very clearly, as Ken mentioned, is that our ability to actually interject advertising through a number of U.S. specialty services is highly limited in terms of the numbers of spots per minute we're allowed to actually sell, and also the type of advertising we're allowed to bring to that market.

We believe there's enormous untapped opportunity inside those services to create more and more revenue for the Canadian broadcasting system. We see it as an unused inventory opportunity that should really be expanded and developed. That would benefit not only us, but also the entire Canadian broadcasting system.

[Tim Uppal, Conservative, Edmonton—Sherwood Park, AB]

Are those regulations or restrictions put on by the CRTC?

[Alex Park]

Yes, that's correct.

[Tim Uppal, Conservative, Edmonton—Sherwood Park, AB]

Have there been discussions to try to change them?

[Peter Bissonnette]

At our last appearance before the commission we recommended that they in fact lift those restrictions in consideration of the plight broadcasters were expressing to the CRTC, and eliminate some of their costs as well—the part II fees.

I think the chairman was here. He talked about lifting the limitation on advertising drugs—or pharmaceuticals, actually. When I watch American TV now, I see every kind of drug that I use as I get older. None of that advertising is available in Canada. That would be another revenue stream for the broadcaster.

[Ken Stein]

Finally, in terms of, for example, the Canadian Television Fund—which is now the Canada Media Fund—the problems there were the inability of the board to embrace new platforms. For example, they would fund conventional television programming, but they would not fund or support other, alternative platforms, such as video on demand. So our ability to use video on demand in a positive way was limited not only by the commission—which had, in fact, been quite encouraging of video on demand—but also simply by what could be funded through the Canadian Television Fund process.

[Tim Uppal, Conservative, Edmonton—Sherwood Park, AB]

Good question.

Rod.

[The Chair, Conservative, Gary Schellenberger]

Be very short, please.

[Rod Bruinooge, Conservative, Winnipeg South, MB]

I appreciate that, Tim.

I just have a quick question, Mr. Bissonnette. If Canwest and CTV went out of business, do you see there being any impact on the number of subscribers you would have?

[Peter Bissonnette]

If they went out of business?

[Rod Bruinooge, Conservative, Winnipeg South, MB]

Yes, if they went out of business, would you lose any subscribers?

[Peter Bissonnette]

Well, I don't think so. I think someone would fill the void. In fact, if you look at CHCH in Hamilton, the local management there have a lot more confidence in the power of generating revenue from the local community than their actual corporate people do. They think if they bought that television station, they could actually make a go of it.

I was in Thunder Bay about 10 years ago when CTV shut down that station. We filled part of that void through our community channels, through all of the local programming we've been doing.

[Rod Bruinooge, Conservative, Winnipeg South, MB]

If CTV and Canwest were gone, your business wouldn't mind? It wouldn't be a big deal?

[Peter Bissonnette]

Somebody would fill the void. Most of the programming they carry is American programming.

[The Chair, Conservative, Gary Schellenberger]

Okay. I have to bring this part of the meeting to a close.

I thank our witnesses very much for your information and your candid answers to our questions from around the table. We will recess for about five minutes and try to restart for the next hour.

Thank you.

[The Chair, Conservative, Gary Schellenberger]

Welcome back to the third session here this afternoon.

Pursuant to Standing Order 108(2), we are continuing our study on the evolution of the television industry in Canada and its impact on local communities.

For this session we have Cogeco Cable Incorporated, Yves Mayrand and Maureen Tilson Dyment. From Canwest Media Incorporated, we have Peter Viner, president and chief executive officer of Canwest Television; and Charlotte Bell, senior vice-president, regulatory affairs. And from CHTV, we have Donna Skelly, co-host.

Welcome. Try to keep your messages close to 10 minutes, because I'm sure there will be some questions put to you from around the table.

Mr. Mayrand, please, to start off.