Canadian Heritage Committee on May 25th, 2009

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

No, but here's the thing. You want to create a revenue steam by which these people can survive. I'm assuming that's what you'd like to do. But at the same time, as a committee, we're asking you to look at the value of Canadian content and the value of local programming.

So now if you are telling us that you don't like the fact that you're seeing increased spending on Hollywood programming, and you're seeing other things in there that you don't like and you'd like to see them reach a certain minimum of local programming, how are you going to make sure they do this? What are the sanctions by which you can conduct yourself? Sometimes I'm not sure if you can or are willing to do so.

[Konrad W. von Finckenstein]

Well, there are about five different questions, and you'll have to let me disentangle them.

What is our capacity? We can set a condition of the current licence. We can set time limits. We can say “I won't give you a licence unless you have an agreement, etc.” So I can make sure they do make an agreement and it gets implemented.

We have the capacity to review people if they violate the agreement. If we find there is a violation of the condition of licence, we can declare it and we can then take it to court because there's a violation of the licence.

So we do have some tools. They are very extreme tools, but we do have some tools.

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

Okay, they're extreme tools. There are times.... I'll give you an example. I look at some of these specialty channels: in the beginning they start out being something that resembles one thing, and two years later they resemble something completely and utterly different. So I'm not sure what kind of teeth you have to do this.

I'm concerned about the spending on Hollywood programming, like everybody else.

[Konrad W. von Finckenstein]

You say that, but unfortunately you're not borne out by the facts.

If they're outside their conditions of licence, we will call people to account. We've done it. We just did it to the CBC, for instance, with their Bold channel, which was supposed to reflect true reality. It didn't. We told them it didn't, and they came back and said they were applying for a new one because they agreed. They didn't contest our finding that they were outside their agreement.

So to say that we don't have teeth and we don't enforce--I just don't accept it.

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

Would you like to see more authority to sanction?

[Konrad W. von Finckenstein]

As I mentioned in regard to the previous question, I always thought it would be much more sensible if we had the capacity to administer a monetary penalty so that we would have some intermediate way of enforcing things.

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

That concern was brought up by several witnesses, and I think that's a valid point.

Let me turn to the local programming improvement fund that you talked about. On the pool by which that's created for programmers to take advantage of, does that include the public broadcaster, CBC?

[Konrad W. von Finckenstein]

Yes.

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

Okay.

I'm just going to change channels again here now. Do you look at some of the rules and regulations? Some of the witnesses were very concerned and are concerned still about the ruling that came down from you guys in 1999 about drama funding and how the fact that you relaxed the rules doesn't allow extra spending for independent producers and the like. Do you defend that today?

[Konrad W. von Finckenstein]

I wasn't there in 1999, so I have nothing to defend. What I pointed out in point 6 on the paper before you is that this is an issue that needs to be addressed if the artistic community really feels that this is out of whack. I've said that it remains to be determined whether this would by achieved by way of ratio, minimum expenditure requirements, or, for instance, by what a lot of the unions say, which is that it should be 7% of revenues earned the previous year. So if your revenues go down, you spend less; if your revenues go up, you spend more.

Now, I don't know where they got 7% from, but you can see how the system would work. Basically, the Broadcasting Act says we should have a system that's predominantly Canadian. The only way to be predominantly Canadian is that more than 50% of the time is Canadian programming. How do we have that Canadian programming? It has to be financed. If you spend all your money in Hollywood, you don't have the ability to do it here. Therefore, they suggested that. I don't know the right answer, but I have put it down on paper, saying that this is one of the issues we have to put to bed.

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

Yes, but I think what they were saying is that you're not doing any favours for Canadian content. You talk about creating local and national programming or programming of interest to the nation, and I think what they're arguing--

[Konrad W. von Finckenstein]

[Inaudible--Editor]

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

Would you consider changing these?

[The Chair, Conservative, Gary Schellenberger]

Make it very short, please.

[Konrad W. von Finckenstein]

Believe you me, if we put in that 7% of revenue has to be spent on Canadian programming, they'd love it. Personally, they have said to please do it. So if you were to say that it doesn't do anything for Canadian programming.... It would do a phenomenal amount for Canadian programming. Whether it's doable is a different issue, but that's what the artistic community is asking for.

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

Okay.

Do I have much time left?

[The Chair, Conservative, Gary Schellenberger]

No. We have to move on.

Mr. Pomerleau, please.

[Roger Pomerleau, Bloc, Drummond, QC]

Thank you very much.

Thank you, Mr. von Finckenstein, for appearing before the committee, along with your colleagues.

My question is along the same lines as the question that was just asked. I am very pleased with the seven points that you mentioned. These points are at the very heart of your structural reform, the reform that you claim you must carry out. Indeed, I think that the entire field needs to be put on a more rigorous footing. I do not think that you should overdo it and be too rigorous, but after hearing everything that I have heard, I have the impression that there needs to be a few more “teeth” than what we have seen so far — to use my colleague's expression.

He alluded to the many people who appeared before us and told us that if the CRTC had done its job properly when it came to local production, we would not find ourselves grappling with these problems. Why are these people, most of whom are producers, saying such things?

[Konrad W. von Finckenstein]

Mr. Arpin will answer your question.

[Michel Arpin]

Well, to answer your question, I will repeat...

We talked about what happened in 1999, but in 1998, the commission held a hearing on some structural aspect—and I too was not part of the commission at the time. Producers lobbied the commission to promote drama series. The commission then created priority hours and decided that eight hours per week would be considered “priority”.

In 1998 and 1999, the commission's rationale was the following: investing in dramatic programming and documentaries would be very profitable and would likely yield a greater return than previously.

Ten years later, we realize this did not exactly come to pass. It was not a failure from day one; things were stable for some time. In fact, recently we have noticed a marked increase in spending for foreign shows by English-language broadcasters.

So now producers are challenging the priority-based system. This upcoming summer and fall, we are going to try and see if we should not... Indeed, television broadcasters and producers are telling us to return to the investment-based system, to spending on Canadian shows based on a percentage of revenue.

[Roger Pomerleau, Bloc, Drummond, QC]

And you believe that this is possible?

[Michel Arpin]

It has already been done. It's a matter of returning...

[Roger Pomerleau, Bloc, Drummond, QC]

It must not have been too good...

[Michel Arpin]

Pardon me?

[Roger Pomerleau, Bloc, Drummond, QC]

It must not have been too good if they decided to change it.