Evidence of meeting #16 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 cbc.
A recording is available from Parliament.
3:30 p.m.
Liberal
The Vice-Chair Liberal Pablo Rodriguez
Bonjour à tous. Welcome to all of you.
Before we start with the CBC, I've just received a motion that was sent by Ms. Dhalla last Friday, I understand.
Madam Dhalla.
3:30 p.m.
Liberal
Ruby Dhalla Liberal Brampton—Springdale, ON
Thank you very much, Mr. Chair.
I brought forward a motion on Friday for presentation before the committee today to request that the CRTC chairman, Mr. von Finckenstein, be brought before the committee. If the committee members recollect, a few weeks ago I brought forward this issue at a meeting after Mr. von Finckenstein first appeared before the committee, and I think everyone agreed in principle with having him called back.
When the chairman appeared before our committee he stated, when I questioned him about the positions of both CanWest and CTV on their commitment to local programming if fee-for-carriage were implemented.... When I looked at the CRTC transcripts for the session at which both CTV and CanWest appeared before the CRTC, they said they were committed to local programming if fee-for-carriage were implemented.
So there's a discrepancy between what was said by the chairman before our committee and what was said in those transcripts, and I think it needs to be clarified. I don't know if there was a misunderstanding. I think committee members will acknowledge that we've had both CanWest and CTV here, and they have stated there is a commitment. In our study we need to get to the bottom of this to find the truth so no one is under any type of false impression, and this confusion and misunderstanding can be cleared up.
As a caveat, the clerk has informed me that the CRTC chairman has been called to appear before our committee in May, so he will be coming forward. But I think it is important that we have the support of all members of this committee on this motion to ensure we can get to the bottom of the situation and have the truth brought forward. That way, when we provide our recommendations to government, we will have a clear perspective on where all parties are coming from.
3:30 p.m.
Liberal
The Vice-Chair Liberal Pablo Rodriguez
Thank you, Ms. Dhalla.
I believe by now everybody should have a copy of the motion in both languages.
Mr. Angus.
3:30 p.m.
NDP
Charlie Angus NDP Timmins—James Bay, ON
Thank you, Mr. Chair.
I appreciate my colleague bringing forward the motion, because we all have many questions. I'm concerned about bringing forward the motion at this time because when I heard the testimony from CanWest and CTV I was somewhat confused as to what their actual commitment was. I'm a little wary about calling Mr. von Finckenstein back at this time and focusing the light on him, because I think there are many questions we need answered from him before this report is done.
I totally support the spirit of the motion. He will be coming back. But we need to allow the picture to be drawn a little clearer so that, when he comes, we can make the most of his appearance. I suggest we hold the motion for now and bring him back when we're ready, because we'll have many questions to ask him at that time.
3:35 p.m.
Liberal
The Vice-Chair Liberal Pablo Rodriguez
Mr. Del Mastro. I don't want to spend too much time on this. We have Mr. Lacroix here with us.
3:35 p.m.
Conservative
Dean Del Mastro Conservative Peterborough, ON
I support what Mr. Angus just said. We will be looking forward to Mr. von Finckenstein reappearing before the committee, as scheduled, at the end of May. But I would like to allow all the witnesses we have scheduled between now and then to come in so we can ask him a wider range of questions.
Thank you.
3:35 p.m.
Liberal
Ruby Dhalla Liberal Brampton—Springdale, ON
The clerk informs me he is scheduled to appear before our committee on Monday, May 25. I could also make an amendment to the motion so it says “on Monday, May 25” instead of “as soon as possible”. I think it is important that the motion get the support of all committee members.
3:35 p.m.
Liberal
Ruby Dhalla Liberal Brampton—Springdale, ON
We can change the words “as soon as possible” to “Monday, May 25”, which is his scheduled time to appear.
3:35 p.m.
Liberal
The Vice-Chair Liberal Pablo Rodriguez
It is, but it's to discuss this among other things. Is that what you're saying?
3:35 p.m.
Liberal
The Vice-Chair Liberal Pablo Rodriguez
So that's really a friendly amendment from the person who brought it forward. Is that okay?
Madame Lavallée.
April 27th, 2009 / 3:35 p.m.
Bloc
Carole Lavallée Bloc Saint-Bruno—Saint-Hubert, QC
Thank you, Mr. Chair, for giving me the floor.
I have a little problem with this motion. Whether we adopt it or nor, the result will be exactly the same: the Chair of the CRTC will be appearing before us, and we will be able to ask him any questions we might have, including Ms. Dhalla's very legitimate questions.
I will therefore vote in favour of the motion, because he will be appearing in any case. I hope that clarifies the reason for my vote.
3:35 p.m.
Liberal
The Vice-Chair Liberal Pablo Rodriguez
OK, that is understood.
Could we amend it to include the date of May 25th?
Right? So we will amend it to put in the date of May 25 and leave the rest as is.
Mr. Angus.
3:35 p.m.
NDP
Charlie Angus NDP Timmins—James Bay, ON
I don't want to belabour this, because we have to get on with it. My only concern is that implicit in the motion is that it appears we thought Mr. von Finckenstein misled us. We're not sure what the answers are, so I would prefer to leave it open. He's coming here on May 25 and we can ask him any question we want then. To say he's coming back to answer that discrepancy, to me, raises a question that we at committee don't believe him. I have many questions to ask Mr. von Finckenstein.
I'll go with the will of the committee, but I'd prefer that we just leave it as is. He's coming, and if for some reason he doesn't want to come, then we can certainly have a strongly worded motion.
3:35 p.m.
Liberal
Ruby Dhalla Liberal Brampton—Springdale, ON
We can call the question right after this, because I know we have a witness before us, but there clearly is a discrepancy, Mr. Angus. I've taken a look at the CRTC transcripts very closely. I've taken a look at my questioning to him when he was before committee. I think that when it was first brought up just in conversation amongst all of us, there was an agreement that there was some confusion as to what his remarks were before this committee versus what was in the transcripts.
We do need to ensure that when he comes before us we are able to address this question, so I would request the support of all committee members that we have him come before us on May 25.
3:35 p.m.
Liberal
The Vice-Chair Liberal Pablo Rodriguez
So I think we're ready to deal with this. We have Mr. Lacroix here with us.
You suggested an amendment to the motion. Is it okay to change the amendment by putting the date of May 25 in it?
(Amendment negatived)
3:35 p.m.
Liberal
The Vice-Chair Liberal Pablo Rodriguez
So on the text of the motion, those in favour?
Who would like to call on the Chair of the CRTC to appear? We are voting on the motion.
Those against?
He's going to come anyway on May 25, so I think we'll be able to ask whatever question we want to ask him then.
(Motion agreed to)
3:35 p.m.
Liberal
The Vice-Chair Liberal Pablo Rodriguez
Mr. Lacroix, thank you for your patience and for appearing before us today.
Is it going to be very brief, Mr. Angus?
3:35 p.m.
NDP
Charlie Angus NDP Timmins—James Bay, ON
Yes, Chair.
I'm sorry to interrupt, because we do want to get down to business. This is a very important day for discussion on the CBC, its recent cutbacks, and where we're going, and so could I just ask that we have the full two rounds of questioning as opposed to ending just at the second round? I think all of us want to hear this because it's our one chance to deal with the issues of the CBC, so I'd like to ask that we have the full two hours.
3:35 p.m.
Liberal
The Vice-Chair Liberal Pablo Rodriguez
Yes, we'll take the full two hours. I think we should have that chance.
The fewer points of order I have, the more time we'll have for questions.
I heard Mr. Lacroix's text is a little longer than 10 minutes, and probably closer to 15, if members don't have any problems with that.
Monsieur Lacroix, c'est à vous.
3:40 p.m.
Hubert T. Lacroix President and Chief Executive Officer, CBC/Radio-Canada
Mr. Chairman, thank you very much.
I have many things to say. That why I'm going to be closer to 15 minutes than 10.
Mr. Chair, members of the committee, good afternoon.
It was almost a year ago that I appeared before your committee to tell you about CBC/Radio Canada's plans and priorities. In fact, I spoke about my three priorities, “my three Ps”: our people, our programs and our strategic planning.
Those priorities have not changed, but our environment has become substantially more complicated. The collapse in television advertising in the past six to eight months has taken a huge chunk out of the operating budgets of Canadian broadcasters, both private and public. CBC/Radio Canada is no exception.
The need for everyone to cut costs to face this reality is affecting the ability of broadcasters to continue to provide the levels of service Canadians have come to expect. This is especially true of local broadcasting.
I am not here to blackmail you this afternoon.
I'm not here this afternoon to blackmail you.
In fact, I rather like to start off with one of my deepest convictions: CBC/Radio Canada must remain firmly rooted in the regions.
We must, at CBC/Radio-Canada, remain deeply rooted in the regions.
We play a key role in the social, cultural and democratic life of this country, and we cannot do that unless we are in Canadian communities. This is how we ensure that the issues and challenges people face in one community are heard and shared by people living across the country. That identification with the lives of people in other communities is the very essence of a national identity, the very essence of our mandate. And it will remain a priority for us as long as I am president and CEO of CBC/Radio Canada. I am not here to threaten to pull out of the regions. I do want to say something loud and clear, however, so that you realize it: how effectively we deliver these services to Canadians across all the regions is determined in large part by our funding structure and the scope of our mandate. I am here to talk about that today.
How do we fund our mandate? Yes, CBC/Radio-Canada receives just over $1 billion a year from taxpayers. Every one of the broadcasting and cable company representatives who sat in these chairs over the last couple of weeks referred to it. Every time someone wants to challenge our access to additional government or CRTC funding initiatives or wants to throw rocks at our services, they start with our government appropriation.
However, these broadcasters and cable companies conveniently failed to remind you in their presentations that CBC/Radio-Canada also has a mandate directly out of the Broadcasting Act that no one else has: to provide an incredible range of programming and services to Canadians across the country, across six zones, and in two official languages. With a third of our total budget coming from commercial sources, we now have fewer dollars to fulfill this mandate than we did when I was last here, less than a year ago.
We've had to make some really hard choices at CBC/Radio-Canada over the past few months. I really don't like what I've had to do, but there was simply no way we could address a projected shortfall of $171 million without affecting all of our services, including our regional services.
You should know that as we tried to balance our budget, regional broadcasting was protected in disproportion to the rest of the corporation. For CBC, spending on regional services represents about 38% of the total budget, yet the regions are bearing 20% of the cuts. For Radio-Canada, regional services represent about 18% of the budget; they're bearing 14% of the cuts.
We kept our geographic footprint pretty much intact. To cut somewhat deeper at the network so that we could protect our regions as well as we could was a choice we actually made. Does that mean I'm happy about taking seven persons out of Sudbury or six out of Sydney or seven out of Windsor? Absolutely not. We are taking smart, dedicated, passionate employees out of these stations, and our services will be affected.
To give you just a small glimpse of what that impact will be, let me quote from an e-mail I received from one of our employees who works on the Information Morning show out of CBC Cape Breton. I think I can't say it better than she does, so I won't try. I'll simply read a couple of sentences from her e-mail:
My heart breaks for the CBC and the loss that Canada has not yet realized it will sustain. I'm so deeply saddened that I can see a day when no one will tell the story of the 10-year-old girl in a tiny community in Cape Breton who took it upon herself to clean up the garbage at a local picnic area because she was worried about the deer walking barefoot in the meadow. No one will then hold forums and generate discussions about issues that matter to communities that are bleeding people. No one will give the tiny cogs a voice.
If we had more resources, or if the measures we have taken generate some flexibility that can be sustained, or if our commercial revenues bounce back and hold, I would like to put people and dollars back into the regions. As I said, our connection to the regions of Canada is an important part of our mandate.
There have been a lot of rumours over the last few weeks that the government is considering some form of support for local broadcasters. I'm afraid I don't know much more about those rumours than you do, but I can tell you that we would welcome any immediate financial support from government so that we could reinvest in the regions.
There is a larger problem. The business model on which conventional TV, both public and private, is based is no longer working. You've heard a lot of information about this in the last days. It hasn't been working for several years. The current economic crisis has only accelerated what was already a steady decline in the value of television advertising. For CBC/Radio-Canada, the current economic challenges are particularly frustrating, as they come at a time when our services are enjoying tremendous growth in popularity among Canadians. We have more information on that in our submission, which was sent to you last week. These successes are increasingly at risk because of a funding model that is no longer sufficient to provide all the services Canadians want from their public broadcaster.
And so, what are the possible solutions? Part of the solution lies in support for things like first-run, prime-time Canadian programming that is original, of high-quality and broadcast on a whole host of platforms. These concerns are the focus of the recently announced Canada Media Fund. It will be important to stay on course with these directions throughout the fund's guideline development process.
Another part of the solution lies in allowing conventional broadcasters access to fee-for-carriage—the same subscriber fee revenue specialty channels have enjoyed for years. As we stated repeatedly to the CRTC, we believe that fee-for-carriage should be tied to specific priorities the Commission feels are a priority—like improved local services—and it should be included in a broadcaster's conditions of licence.
Finally, there is the CRTC's Local Programming Improvement Fund (LPIF). We believe that the LPIF will mean better local services if it remains focused on smaller markets and is based on each broadcaster's track record in investing in specific communities. For CBC/Radio-Canada, access to this fund is vital and will allow us to improve and enhance our local programming in 8 English-language and 12 French-language stations, according to the terms that have already been announced. Indeed, our 2009-2010 plans and budgets were established based on our access to the fund according to the terms that have already been announced. Any changes to the terms or our eligibility to access the fund would have a major impact on our plans.
These are solutions that would assist all conventional broadcasters, both public and private. However, for the public broadcaster there is something else. We need a new contract with Canadians. We need a memorandum of understanding that would clearly lay out Canadians' priorities for their public broadcaster and the resources necessary to fulfill those objectives. Without that clarity, we must focus on finding in the commercial markets the missing resources we need to operate all of our services. Without the financial flexibility available to other commercial broadcasters—and the current economic crisis has really demonstrated this problem—CBC/Radio-Canada has no access to capital markets or to commercial borrowing to manage its cashflows. In an economic downturn, that means we cannot use a simple line of credit to lessen the impact of the decline in revenue and smartly manage ourselves out of a slowdown. That means that for every dollar of revenue lost, the corporation must immediately cut a dollar somewhere in order to balance its budget in the same fiscal year.
By freezing spending and slashing costs, we were able to balance our books for the year ending March 31, but for 2009-10, facing an estimated $171 million shortfall, we simply couldn't balance our budget without making deep cuts. As you know, I announced a reduction of 800 positions across our corporation. In addition, we are proceeding with plans to try to generate $125 million of cash through the monetization and sale of some of our assets.
Selling assets to balance your budget, selling assets in fact to pay for your downsizing costs and your severance obligations, is not the best of management decisions, but we have no other choice.
Some programs therefore had to be eliminated; our staff in many stations has been reduced. As a backdrop to these cuts, we've attempted to protect certain key priorities as much as possible: including keeping radio advertising free, enhancing new media, protecting our regional footprint and maintaining our distinctive Canadian programming and our cross-cultural initiatives.
I'm not happy about what we've had to do, and I know that a lot of Canadians are worried about the effect of cuts on services in their respective communities. I must say that we have been working closely with our employees and unions to develop ideas to reduce the impact of these cuts on our services and our people. These past few months have shown me, once again, that our employees are the most important asset we have, and that we need to do everything in our power to keep them working for us. Each individual is important to us, and each of these people should receive credit for delivering distinctive, nation-building programming day after day in an unstable, shifting and difficult environment. Everyone of these people is deserving of our respect and support.
All of our decisions have been guided by three key principles. First, the corporation must continue to focus on becoming a content company rather than a simple broadcaster. Second, CBC/Radio-Canada will strive to remain the most important creator and distributor of Canadian content across all platforms that Canadians use. Third is the commitment I spoke of earlier—the desire to remain deeply rooted in Canada's regions.
We are no longer just a broadcaster with separate television, radio, and Internet media lines. We are moving to become, and in fact are becoming more and more, an integrated content company.
Let me give you just an example. During the last federal election, we broadcast election analysis, profiles, and reports on radio and television, but on the Internet Canadians could get much more, from streaming of video and audio to in-depth riding-level profiles and results from an interactive map. A reality check site put the candidates' promises and statements to the test. A voter tool kit provided specific information as to where and how Canadians could vote.
The Internet allowed the public broadcaster to really become the public forum. Thousands debated local issues in forums set up for every riding. There were over 10,000 comments posted in these areas of the site alone. En ligne, citoyens! linked francophones across the country in a political discussion about issues. Canadians asked questions directly to political candidates, and they posted thousands of their own photos and videos. We had over a quarter of a million postings to our sites as Canadians debated the issues. That's political engagement.
On election night, our websites were another source for up-to-the-minute election results. CBC.ca's Canada Votes website had close to four million page views on election day alone. Radio-Canada's website had the third heaviest traffic day in its history. That reach even extended beyond our borders, as over 10,000 people watched live streaming of our election coverage from outside of Canada.
All of this, in addition to our audiences on audio and television—
3:55 p.m.
Liberal
The Vice-Chair Liberal Pablo Rodriguez
I apologize, but you have one minute left to wrap up your opening remarks. Our members are looking forward to asking you questions.
3:55 p.m.
President and Chief Executive Officer, CBC/Radio-Canada
Avec plaisir.
But with the resources we have, we need to make some choices. We need to balance our priorities. How much out of these resources should be dedicated to regional programming? There are much larger strategic questions. In the current broadcast environment, is it a good time to consider eliminating advertising on CBC and Radio-Canada television? If so, where would the revenue necessary to replace advertising come from? What kind of long-term solution would the government then consider to ensure that we could still deliver the services Canadians want if we didn't have access to our commercial revenues?
I would be pleased to hear your thoughts about the challenges we face, and will try my best to answer your questions.
Thank you.