Canadian Heritage Committee on May 4th, 2009

[Rick Arnish]

I would say yes to that. But if the funding formulas the commission is talking about, the local programming improvement fund, were to come about, that may be able to rectify the situation in the small markets.

[Scott Simms, Liberal, Bonavista—Gander—Grand Falls—Windsor, NL]

I'm glad you said that.

[Rick Arnish]

But there's a distinct difference between what's going on in small market conventional television in Canada and what's going on with the large players that have small market stations.

[Scott Simms, Liberal, Bonavista—Gander—Grand Falls—Windsor, NL]

If there is to be an LPIF, which is for the sole purpose of...and let's keep the dollar figure out. We heard opinion on the $60 million. Put that aside for a moment. Let's talk about the principle of providing a funding mechanism or a revenue stream for a certain market size.

I'd like to open this up to anybody, but before I do, I have one quick point. You may have an answer, Mr. Sterling and Mr. Neal, to your question about total CBC, no commercials, because in France they just did that.

Am I out of time again?

[The Chair, Conservative, Gary Schellenberger]

You can finish your question.

[Scott Simms, Liberal, Bonavista—Gander—Grand Falls—Windsor, NL]

Recently in France, President Sarkozy said no more commercials and total content. So you may have an answer in a little while as to whether that works or not.

I just want to throw this out. The local fund that you can avail yourself of, how is that going to work for your station or your enterprise?

[Rick Arnish]

I'll be quick and let others jump in here.

It certainly will go a long way to allow us to continue to provide.... Collectively, our three stations do about 47.5 hours a week of local programming, as you heard in my presentation. And that, combined with the DTH small market local programming fund, goes a long way toward solidifying the future of those stations.

As I said in my presentation, right now the fact that national advertising--and to a degree, regional advertising--has really diminished over the last seven or eight years in particular has totally impacted small market television in this country. These funds would allow us, again, to continue to operate as a viable alternative to the national networks and the regional stations that come into our markets.

[The Chair, Conservative, Gary Schellenberger]

Thank you.

Make a quick response if you'd like, Mr. Sterling.

[Scott Sterling]

In terms of the local fund, it is a stopgap measure, I think. We have only one source of revenue, which is advertising. The CBC has multiple sources of revenue, so does cable, and so does everyone else. So it would help in the interim with local production at this point. But I think it's just a stopgap. There should be some other mechanism, specifically...and we don't like to call it fee-for-carriage, we like to call it fee-for-programming. Our news has a copyright at the end of the news every night, and it's being taken and sold, and we're not compensated. So it's fee-for-programming, not fee-for-carriage.

[The Chair, Conservative, Gary Schellenberger]

Thank you.

Ms. Lavallée, for a short question, please.

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

Thank you, Mr. Chair.

I would like to make a comment.

None of you has any services in Quebec. I note that to a certain degree, your concerns and problems are different from those of the Quebec television industry. I am astonished to hear that presenting Canadian content is a burden. In Quebec, this is not a burden, quite the contrary. The polls that Mr. Neal mentioned would be entirely different. Mr. Neal said that Canadians say that they want Canadian television, but they do not watch it.

In Quebec, the situation is entirely the opposite: our public is watching Quebec television. We love Quebec productions and we always want more of them. The audience ratings are very high, not only for private television, but also for Société Radio-Canada. I can tell you now that the Société Radio-Canada has huge importance. We, in Quebec, would not want to change it and we would not want to oblige it to broadcast only Canadian or only Quebec content. We want a varied content and we find that Radio-Canada is raising the general level of debate and information. We need Radio-Canada. To me, it seems simply impossible, unrealistic to deregulate and to ask Radio-Canada to present only Canadian content.

You said that you do not want any more regulations. I have some questions about this. For instance, Air Canada must offer service in French. It offers the service, but not sufficiently. However, I have never been able to speak to someone who speaks French at WestJet. I think that if television was deregulated, it would be all over, there would not be any Canadian content on television at all. In contrast, things would be different in Quebec.

Let me conclude—

[The Chair, Conservative, Gary Schellenberger]

Madame Lavallée, it was going to be a short comment.

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

I just want to finish one sentence.

Thank you.

Moreover, television broadcasters are not only businessmen who are only interested in making a profit. They must have some social conscience and they must take social and general interest into account. Thank you.

[The Chair, Conservative, Gary Schellenberger]

We'll go to Mr. Angus, and be short, please.

[Charlie Angus, NDP, Timmins—James Bay, ON]

Thank you.

Mr. Allard, I think your presentation to us today is one of the strongest I've heard, and that's not with any disrespect to anyone else.

We have seen the BDUs come before us and tell us that they would never in a million years have any kind of conflict of interest as businessmen. They're in this, number one, to make money, but they are there to protect the public interest, because they receive all the talent and all the risk that's been taken by private entrepreneurs like you. Yet your allegations today are of a complete conflict of interest. Not only are they controlling the cable pipes, they're selling in direct competition with you, and they have their service agents selling their product over yours.

The question is, how can we have set up a situation in which the CRTC created such a protective market for these cable giants, and pampered them all the way through, and then is completely toothless when it comes to making sure that they are not engaged in anti-competitive practices against companies like yours? Could you explain to me what you see in terms of the need for monetary penalties to hold these guys in line?

[Charles Allard]

Ofcom and the FCC, obviously, initiate penalties on an ongoing basis throughout an annual year.

I have to go back and stress the fact that there was one light with Rogers, and that was Ted Rogers. After six months of not getting a subscriber report, after waiting six months, I went down to see somebody, and they said, well, we've cancelled the meeting. I tried to arrange a meeting with Ted, Nadir, and Phil. I sent them a letter saying that we're having trouble. Ted got back and said that he was a broadcaster and we'd have our HD--they didn't carry our HD to start with. I think we got it in three weeks.

Ted came from a broadcaster background, so he had the heart and soul of a broadcaster, and that's the only reason we got HD with Rogers, even though we had mandatory carriage.

I'm not sure about AMP penalties. Maybe Richard has a better idea.

[Richard Paradis, Business Affairs and Government Relations, Allarco Entertainment Inc.]

I think you have to remember that one of the reasons the government favoured cable development in the early years was to ensure that Canadians, in subscribing to cable to get the American services, would be watching Canadian services. Over the years, the cable industry has grown because of that. Canadian consumers, now at 95%, either get their television through cable services or DTH.

What happened was that a certain number of companies realized that this was a real money-maker, and that's why we now have six groups that control over 91% of what people are watching on television. It's gotten out of hand. Even though originally we had rules that were there to favour the development of cable, cable has grown into something so big that they're now selling Internet, cellular service, and phone service. It's those three services that have become the priority for them in terms of sales. Broadcasting has become of hardly any interest to them. The margins are probably not there anymore.

We have to remember that the Broadcasting Act was put in place to favour Canadian broadcasting and Canadian content. What has happened is that the BDUs now control access to Canadian services and are doing what they want with them in terms of whether they're going to be available to the market. In a case like ours, we have to fight with them to have their CSRs--the people who are answering the phones when you call for service--offer our service, when they're supposed to, by regulation. They're offering their own services before ours. So there's a huge problem there, and that's why we suggested to you changes that could be considered by you at a later time in terms of changes to the Broadcasting Act.

[The Chair, Conservative, Gary Schellenberger]

Thank you.

I have a final question from Mrs. Glover, please.

[Shelly Glover, Conservative, Saint Boniface, MB]

I want to be very brief, but I want to thank you all very much for being so patient. It's been a very long day. Please allow me to make a couple of comments and then ask a question.

I would like to speak to Mr. LaRose for a minute.

I welcome you. We appreciate your comments very much.

You said APTN is a success story. I want you to know that I'm very familiar with it, and I want to congratulate you for it.

You made a couple of comments I want to bring up again. In your dissertation, I've highlighted that you indicated the BDUs will aggressively market the fee—we're talking about the fee for carriage—as a tax on consumers. We have heard that before, and I underline it in your dissertation, because in northern communities and in our aboriginal communities—as you pointed out very clearly, both aboriginal stations—cost is something that needs to be considered. These are communities sometimes affected largely by poverty and issues of poor economies. I bring this out again and want to reaffirm it because you mentioned it.

You also mentioned the made in Canada basic service package. I would like to know whether you could make this available to the committee. I take great interest in what you proposed to the CRTC in the past under that made in Canada basic service package and what the comments were that the CRTC made about the package you proposed. Can you clarify that for us or give us a few details about it?

[Jean LaRose]

What we had proposed to the CRTC was that, given the dynamic around the fee for carriage and all of the other issues being put forward, the new basic package be strictly a Canadian package, available at a lower rate, that could also possibly be used to provide subscriber fees not only for mandatory carriage but for all of the stations that would end up being carried under it. It would be inclusive, probably, of the local stations, but of the Canadian networks as well. That would be the basic package.

Right now we've seen the basic service being diluted by a mass of other services offered on it that clearly work against the Canadian broadcasting industry. If you have a package of American and a package of other services thrown in as well, as part of a basic package that has grown to anywhere from $40 to $50 as a basic fee, I think it's out of reach for a lot of people. For remote communities, such a fee, for communities living at the subsistence level, is probably something totally out of their reach.

I don't recall exactly what the comments of the CRTC were. I'd have to get back to you on that. Certainly, we had proposed this and are proposing it again, because we strongly believe it would be the way to ensure, in support of the Broadcasting Act, which is meant to support the broadcasting industry in Canada, that Canadian services be first and foremost on the basic service and that anything else be à la carte. You buy the other services you want, but your basic would have to be Canadian services.

[Shelly Glover, Conservative, Saint Boniface, MB]

Just very quickly, could you provide a copy of the package you submitted before?

[Jean LaRose]

Yes, I will. I will get it to the chair.

[The Chair, Conservative, Gary Schellenberger]

Send it through my clerk.

[Shelly Glover, Conservative, Saint Boniface, MB]

That would be wonderful. Excellent.

One last thing you mentioned, and bless you for mentioning it, was our Olympics and Paralympics and the fact that you are going to be presenting them in English, French, and eight aboriginal languages. I commend you for that. I'm hopeful that programming will also be available up in our northern communities through your television station So I would like to know, are you going to be able to do this, given that you've lost seven people—I think that's what you said—to the transfer from analog to digital? Are you going to encounter some problems with that, given your now reduced number of employees?

[Sophie Green, General Manager, Northern Native Broadcasting, Yukon]

Actually, we're hoping our past employees will take advantage of the employment opportunities. They have been calling for lots of camera people, and we have employed and trained lots of people in that industry, so they would fit in on that end of it. We are also selecting our linguists to begin the training, along with APTN, for the aboriginal translations back to our communities.