Historically the CRTC has protected the cultural interests of Canadians. They have done this even though they have been hampered by an inability to effectively enforce their own regulations. At the CRTC hearing, we've heard that several broadcasters are not in compliance with a number of the regulatory obligations, from hours of news to hours of Canadian content. Lack of compliance appears to go on year after year in some cases.
The CRTC asks stakeholders to assist by filing complaints. The WGC has done so on two occasions, with non-compliance by several broadcasters in the entertainment magazine show category, and we also filed a complaint regarding a specialty service contravening its nature of service definition. In both cases it took more than a year to resolve the issue, with letters back and forth before the commission was able to encourage the broadcasters to comply.
As a union, we know that rules are only respected if they can be enforced. That's why we think that the Broadcasting Act needs to be amended to provide the CRTC with a full range of tools to enforce compliance. The CRTC needs to be able to administer fines and other non-financial penalties on broadcasters so that they can ensure the integrity of the broadcasting system in a timely manner.
The penalties should fit the crime. Broadcasters seem to be spending less and less on Canadian programming so they can spend more and more on American programming. But let's be clear here: the problem isn't foreign news or foreign information programming, the real problem is broadcasters competing to get the latest big-budget drama from Hollywood. Last year English language private broadcasters spent $490 million on foreign drama but only $54 million on Canadian drama. It must be noted that the excessive spend has not been a slow creep over time. It was an explosion that happened three years ago, in 2006, after consolidation gave certain broadcasters deep enough pockets to try to outbid each other in Hollywood.
But broadcasters keep telling you that they need to spend more and more on U.S. programming because they need to subsidize Canadian programming. In fact, they say that Canadian programming cannot and will never make them money. We disagree. Tomorrow morning, along with our colleagues at the CFTPA, ACTRA, and the DGC, we will be releasing a new study by Nordicity entitled Analysis of the Economics of Canadian Television Programming, and we will be pleased to provide this committee with copies as soon as it's available. The bottom line of the report is that Canadian drama may not earn broadcasters as much as American drama does, but committing to Canadian drama is not the financial burden the broadcasters make it out to be. The increasingly excessive expenditure on foreign programming isn't necessary to cover the cost of Canadian programming.
Tomorrow we will be asking the CRTC to proceed with one-year administrative renewals, followed by a policy hearing for the more complex issues, and then group licensing renewal in a manageable way so that small stakeholders such as ourselves, SARTEC, DOC, and DOC Network can participate in a fair and meaningful fashion.
The Canadian broadcasting system needs policy changes from both the CRTC and Parliament. We would like to share with you the simple policy changes that could be implemented by the CRTC. We will be asking them to remove incrementality from the LPIF and advance the distance signal regime, both in favour of a clear commitment from broadcasters to spend that revenue on Canadian programming.
I'm sorry, I'm almost done. It's the summary.
In subsequent hearings our priorities for structural change will be some kind of expenditure requirement for Canadian programming, no weakening of priority programming definitions, and maintaining independent production quotas and access to funding. We look to this committee and Parliament to look after the legislative end of the framework that upholds the Canadian broadcasting system. We have a couple of recommendations that I'll read very quickly.
First, we urge the committee to recommend to the government that the Broadcasting Act be amended to give the CRTC the power to impose financial and other non-financial penalties.
Second, relax restrictions on pharmaceutical advertising, to bring more revenue into the system.
Third, support the CRTC chair's recommendation that government eliminate part II fees.
Fourth, for digital transition, government could pay to subsidize the cost of extending digital television service to smaller, underserved communities.
Fifth, ensure that the CBC receives the same concessions that the private conventional broadcasters receive.
And that's it. Thank you very much.
We would be pleased to take any questions.