Canadian Heritage Committee on April 29th, 2009

[Maxime Rémillard]

And to New Brunswick, of course, I'm sorry—to the francophone market—

[Jean-Claude D'Amours, Liberal, Madawaska—Restigouche, NB]

You must never forget the other regions either.

[Maxime Rémillard]

Absolutely.

[Jean-Claude D'Amours, Liberal, Madawaska—Restigouche, NB]

Otherwise some people will be reminding you of that.

[Maxime Rémillard]

Absolutely, that was an oversight on my part.

[Jean-Claude D'Amours, Liberal, Madawaska—Restigouche, NB]

Furthermore, if you had additional funding other than advertising revenue, do you not think that if you improved your programming, then your traditional revenue from advertising might rise—one only has to think of those who purchase the advertising?

That is not an insignificant amount. You probably have to strike the right balance. But you must not forget your current customers, you have to keep them. If you lose them, then you'll have another problem. You would only have government funding or other regulatory sources of funds to pay for your operations. I don't think that's necessarily the direction you want to go in.

[Maxime Rémillard]

I'm sorry, I do not understand your question.

[Jean-Claude D'Amours, Liberal, Madawaska—Restigouche, NB]

You mentioned that if you receive additional funds, you will be able to improve your programming. My perception is that if you improve your programming, then your advertising revenue will go up.

[Maxime Rémillard]

I understand, but that's not how the market works. The market reality is that TQS is competing in a competitive market. We are competing head to head with networks that have two sources of revenue. That allows them to be much more dynamic, more competitive, with fewer obligations.

We currently have very costly commitments. TQS was a perfect example of the industry's structural problems when it was placed under the protection of the Companies' Creditors Arrangements Act in December.

We want a review of the rules of the game and the funding rules in order to ensure that they are fair for all players. The public will be the one to benefit because programming will be of even higher quality. That is what we are saying.

[Jean-Claude D'Amours, Liberal, Madawaska—Restigouche, NB]

When you acquired TQS and when the issue of court protection came up, there was however a shift in the type of programs being broadcast by TQS. In some cases it seemed to be a little more shaky, less local.

Is that simply because you're trying to focus on a different clientele? One mustn't forget local content. Some changes became apparent in your programming, which were not... I'm talking about day time programming.

[Maxime Rémillard]

That is your opinion Mr. D'Amours.

However, we still produce 10 hours of local programming in Quebec City, in other words, an hour more than the previous owners did. We continue to produce local programs and category 1 news in all regions.

Without a doubt, programming will change. The model had to change because the company would otherwise have had to shut down and all the jobs would have been lost. So, we developed a new business plan and are currently implementing it. But to do this there must be a level playing field in terms of rules and regulations for all players in the marketplace.

[The Chair, Conservative, Gary Schellenberger]

We went a little over time there.

Mr. Pomerleau, please, and then Mr. Petit.

[Roger Pomerleau, Bloc, Drummond, QC]

Thank you, Mr. Chairman.

Good day, Mr. Rémillard and Mr. Porrello.

I would like to start by commending you. Last week, we saw the film Polytechnique here, in Parliament, and that same week we had to vote on a motion regarding gun control. The film was useful in explaining to people what could result from a lack of gun control. I know you are involved in many films. We see your work quite frequently.

I also commend you for showing that culture can be profitable, something people do not seem to be very aware of. In fact, in Quebec, we use culture for that purpose; the Cirque du Soleil bears witness to this. I do not think we draw enough attention to this aspect of things. Investments are made in cement, bridges and a host of other things, but culture must at least be worth as much as a bridge. Your achievements have demonstrated this fact.

I know you were not originally in this industry, but rather a completely different one. What led you towards television? Obviously, TQS was available, which was the first condition.

[Maxime Rémillard]

It was a natural diversification of our operations. We were very active in the distribution and production of films, feature films. Distribution is a sort of broadcasting of content. We wanted to diversify our operations and the opportunity to acquire TQS arose. We also wanted to try a new business plan which would allow us to apply to television what we were trying to do in film. That is what we are trying to do at the moment.

[Roger Pomerleau, Bloc, Drummond, QC]

I see. In your presentation you referred to the fact that having new transmitters in the region was a non-profitable investment at first.

Do you believe that a second source of funding, like the fees for carriage would suffice to help you install the new transmission equipment?

[Maxime Rémillard]

It all depends on the source of income and the amounts. It is difficult for me to answer this question we know—

[Roger Pomerleau, Bloc, Drummond, QC]

For the same reason you explained earlier on.

[Maxime Rémillard]

Exactly. Digital transmitters are a major investment. We would have to see what the additional sources of income would be.

[Roger Pomerleau, Bloc, Drummond, QC]

If we decided to provide you with a second source of income, would you consider this option?

[Maxime Rémillard]

Obviously, a second source of income would help ensure our organization's survival and that of the television industry in Quebec and in Canada. It would help us to get started once again, comply with our obligations and continue providing local programming.

[Roger Pomerleau, Bloc, Drummond, QC]

Your seventh recommendation is to implement a tax credit program to support regional production as well as local and regional television news. We know that local production and culture are expensive. If you have problems, you need to seek funding elsewhere. However, if you are suggesting tax credits as well, it seems to imply that access to fee-for-carriage would not be sufficient to ensure the survival of regional television. You're opening the door to other sources of funding.

[Maxime Rémillard]

This source of funding would be an incentive to produce more than what our current obligations require. We think it could be an interesting adjunct not only for broadcasters but also for independent producers who want to produce local programs and news. The film industry has the advantage of a tax credit, as does television.

Why would those working in the news and local producers not be entitled to a tax credit?

[Roger Pomerleau, Bloc, Drummond, QC]

You are talking about doing more than what you are currently being asked to do, in other words increasing your commitments.

[Maxime Rémillard]

We are already doing that.

[Roger Pomerleau, Bloc, Drummond, QC]

You are currently having some difficulty fulfilling your commitments.