Thank you, Mr. Chairman, members of the committee, and staff.
My name is Richard Paradis, and I am president and CEO of Le Groupe CIC, a communications and telecommunications consulting firm based in Montreal, with clients in broadcasting, telecommunications, and the cultural sector. At both the University of Montreal and HEC Montréal, I also teach courses on communications policy, social research methodology, and the history of media. During my career, I also worked at Bell Canada, the CRTC, the department of communications in Quebec City, and Heritage Canada here in Ottawa.
I’m going to cut out a bit of my text on the historical perspective just to save time.
Much has changed since the early days of Bell Canada in Canada, and we all have to recognize that the speed with which communications technology is evolving is quite amazing. Nonetheless, I am sure you will agree this speed of change in communications is more and more difficult to understand, both in terms of its impact on each of us, as individuals, and, more broadly, on our socio-economic and cultural well-being. The challenge for all of us is to determine as quickly as possible how we can harness all of these technological innovations in the interest of Canadian business, Canadian cultural industries, and Canadian consumers from coast to coast.
As the committee knows, communications is now at the core of just about everything we do, from waking up and checking the e-mail and cellphone calls in the morning, to listening to music on mobile phones and iPods, or watching the news and our favourite television show on our iPhone or iPad.
How fast is it moving? Well, as you've heard from many who have appeared before you, it’s moving at high speed, and not just in the fibre network that is getting closer and closer every day to your home.
But let's get down to what your committee is trying to grapple with through your current consultations. I will speak briefly on each of the questions raised in your terms of reference.
First, how are developments in emerging and digital media affecting Canadian cultural industries?
Well, I think a number of the groups that have preceded me, including the National Film Board earlier, recognize that emerging digital media offer great opportunities for the Canadian cultural sector; however, the most critical points to be considered in this context are how we are going to be able to ensure sufficient Canadian content and shelf space in this new electronic environment that seems to have no limits in terms of reach and depth.
Cultural industries have to scramble to adjust to technology, even more so today, when everyone is overwhelmed by the onslaught of different communication technologies, technologies that are front and centre in our economy and our way of life. The good news is the multiplication of windows or platforms available for cultural products to be distributed, but what is less evident is the capacity to maintain revenue streams for the cultural sector from each of the new distribution options.
Yes, technology is increasing opportunities to consume cultural products, but it is also fragmenting audiences, which can seriously affect the value of a cultural product from one platform to another and its overall economic value in the marketplace.
What can Canadian cultural industries do to benefit from developments in emerging and digital media? The short answer is that we have to ensure that we can continue to develop Canadian content, and, more critically, access the different platforms.
Is there a way of ensuring that creators of artistic and cultural content are compensated for their work? Yes, through long-awaited changes to the copyright regime in Canada to reflect what has been happening in Europe for a number of years.
As I often mention to my students at university, the important consideration to always keep in mind is to respect the rights of authors and creators. I explain to them how many individuals actually benefit from a cultural creation of a book author, a filmmaker, an author-composer of music, a choreographer. When a creator develops his or her work, a multiplier effect sets in, creating numerous jobs in the economy.
The bottom line is that we have to ensure that our copyright legislation provides for appropriate compensation to authors for their works that are available on multiple platforms, be it mobile, web, or conventional broadcasting.
What could be done to ensure that Canadians, including those working in the cultural industries, have the right skills? Well, I think we have a number of good academic programs across the country to develop creative talent and especially technically savvy individuals who can interpret creative ideas into productions.
However, we cannot expect to be able to do this by cutting funding to our film schools, the way the federal government did recently, seriously affecting the operations of L'INIS in Montreal and shutting down the Canadian Screen Training Centre in Ottawa, just to name two.
This is an example of what not to do in relation to technology change and the need to ensure that we can develop attractive programming choices for Canadians and, ultimately, a world audience.
What could be done to ensure that all Canadians, no matter where they live or what their socio-economic status is, have access to emerging technology?Well, we have to develop, as many have been asking for a number of months now, including the NFB this morning, a national digital strategy. One of the most important things we have to do is ensure that all Canadians have access to high-speed Internet. This has to become a national priority. Other countries--Britain, for instance, and the European Community--have recently developed a clear digital strategy. High-speed Internet has to be considered much like a public utility, a must-have for all Canadian households, no matter where they live and work.
High-speed Internet can be a key component to an effective economic and cultural development strategy in all regions in Canada, both in the cities and in rural areas. High-speed Internet will be, in many ways, more important to our regional and national socio-economic and cultural development than the train was in the early years of our great country. With high-speed Internet, local creative talent can be developed and have ready access to far away markets quickly via a multitude of digital platforms.
What policies could the federal government adopt? At some point in the near future, the government and Parliament will have to consider what is being looked at right now by the European Commission, and that is some financial contribution from Internet users toward supporting local cultural sectors to develop content for all of the digital media applications. Other than the United States, where the audiovisual sector is the country's biggest exporter, most economically developed countries of the world are struggling with how to finance the creation and distribution of local creative cultural content in a new digital universe.
What would be the impact of foreign ownership? Pretty disastrous. Our historic approach to Canadian ownership in this area is directly linked to the social, cultural, and economic development of the country, and in my view should not be handed over to foreign interests without some serious thinking about how we got to where we are, and, more importantly, where we want to go in the future.
Why are we thinking of opening the door to more foreign ownership? Are our telecommunication companies suffering from lack of investment funding? Are they seeing dwindling revenues and profits? The Canadian telecommunications industry revenues for 2008 were $40.3 billion, with a reported $6.3 billion EBITDA and a margin of 29.1% EBITDA. For the cable sector, which also comes up on occasion talking about foreign ownership, the latest industry data released by the CRTC saw revenue growth of 11.9% in 2009 with revenues of $11.4 billion, a PBIT of $2.3 billion and a PBIT margin of 25.1%. These aren't companies that are suffering from the difficulty of finding financing.
So why, after we have invested as a country for decades in developing one of the most impressive telecommunications and broadcasting sectors of the world, do we want to hand them over to others? More importantly, how will we ensure that we are getting the best out of our communications sector if its business decisions are taken in Dubai, Chicago, or Beijing? The ultimate decision factor is where is the most return on investment? Certainly not the priorities or social and cultural preoccupations of the host country.
But let's move on from there and look at the need for reviewing existing legislation, which was brought up earlier. I am one of those who strongly believe that in today's world of convergence, government should be taking seriously the numerous calls we are hearing to review the existing broadcasting and telecommunications legislation, in order to reflect the convergence we now have with large corporations, which not only have concentrated ownership but are also highly integrated both vertically and horizontally.
Whether we speak of Rogers, Shaw, Quebecor, Bell, or Telus, all of these companies deliver a variety of communications services to Canadian consumers. They are at times radio or television broadcasters, newspaper publishers, local telephone IP providers, offering mobile phone service and audiovisual content.
More importantly, these companies have become important gatekeepers between content providers and consumers. In some instances, they are also competitors at the content level. This ultimately places them in a conflict of interest with the power of life or death over new Canadian programming services.
Why should we be concerned? Because it represents a shift in the regulatory function, and even though the CRTC licenses services, the BDUs can ultimately decide the fate of a newly licensed service, and even decide to favour their own programming services, with little effective regulatory intervention under present rules. The chairman of the commission has been before this committee twice to ask for changes to the Broadcasting Act, and he recently repeated this plea before the industry committee.
This completes my presentation, Mr. Chair.