Evidence of meeting #11 for Canadian Heritage in the 40th Parliament, 3rd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was content.
A recording is available from Parliament.
11:55 a.m.
Liberal
Pablo Rodriguez Liberal Honoré-Mercier, QC
Would you like to add...
Do you want to add something to that, Mr. Kelso?
11:55 a.m.
President and Chief Executive Officer, Interactive Ontario, Canadian Interactive Alliance
I think it really comes down to looking at how we're able to capitalize our young people and their vision and the people who are working around it. Innovation in our industry happens at the edges, not in the centre. It generally doesn't come out of the big institutions, NFB perhaps excepted; they've done some very visionary things.
At the early stages of companies, I think it's giving access to the right capital for companies to take risks. I think it's creating the right kinds of tools. We have to look at not creating cycles of dependence. We don't have a walled garden anymore. We have to understand that the old system we had, where we could regulate and ensure there was a demand for--
11:55 a.m.
Liberal
Pablo Rodriguez Liberal Honoré-Mercier, QC
In conclusion, would you say that regulations have to be changed also? Is there for example a need to change framework acts such as the Telecommunications Act?
11:55 a.m.
Conservative
The Chair Conservative Gary Schellenberger
Sir, we're over time here.
That you can answer later, either directly or through the clerk, if you could, please.
We're just short of time here. I'm sorry about that.
Madame Lavallée.
11:55 a.m.
Bloc
Carole Lavallée Bloc Saint-Bruno—Saint-Hubert, QC
Thank you very much, Mr. Chairman.
First of all, thank you very much for your presentations. We see all of the thought that was put into this as well as the needs this thinking has brought to light.
Mr. Perlmutter, I think you put your finger on numerous immensely important challenges, including, among other things, the issue of isolation despite connectivity. I believe that this aspect should be looked at.
You also provided a lot of statistics, and there again, you are right. We are sensing that all of this digital technology is opening the door to activities that are not necessarily reflected in the statistics, but we also sense that new things are emerging and that at some point in time there will be a major and rapid breakthrough. Wireless, for example, comes to mind. You did not mention numbers, but in Quebec — you will understand that I am quite familiar with the statistics regarding Quebec —, only 13% of residents have a smart phone, despite all of the energy and creativity which is, rightly so, devoted to it. Among those who do have a smart phone, only 8% use it to surf the Net. So this reduces yet again the number of potential customers for that content.
We are presently experiencing a period that I would qualify as difficult and that other technologies have gone through in the past, among them television. We have reached a stage where we are asking ourselves if we should give priority to the container or the content. I believe that history has taught us that we must do both things at the same time — somewhat like a plough that removes snow; it must be removed from the sidewalk and from the road at the same time — in order that the entire population go along with the current.
Equally, there is a population challenge that you did not bring up either. We, seated around this table, get along well, understand each other well, all have a BlackBerry, all know what an application is, we have seen it, we have done it and we are asking for more. However, there is an entire population, namely 87% of Quebeckers, that does not understand us. I believe that this is a challenge that we also have to reflect upon. We must include these people so as to ensure that our society is fair and equal.
I apologize for taking this time to share my views with you. I will now come to the content. Indeed, you have an extremely interesting application for smart phones.
Noon
Government Film Commissioner and Chair, National Film Board
It is the iPad; it is coming.
Noon
Bloc
Carole Lavallée Bloc Saint-Bruno—Saint-Hubert, QC
Indeed. You stated earlier that you wanted to have more funding in order to digitize your collection. Is that what you stated?
Noon
Government Film Commissioner and Chair, National Film Board
I said that if more funding is forthcoming, that would be one of the priorities.
Noon
Bloc
Carole Lavallée Bloc Saint-Bruno—Saint-Hubert, QC
Very well.
At present, what we sense on the part of this government is a will to participate in the transition towards digitization, but there are in fact no policies, no global strategies. Furthermore, resources are being removed from the creation side to be given to Web casting, and the best example of this is the Canada Media Fund that had $280 million to which were added $40 million. All of the producers are at present complaining of the fact that they have less money to create and produce, because a good portion must be devoted to digital media.
Noon
Government Film Commissioner and Chair, National Film Board
Is there a question?
Noon
Bloc
Noon
Government Film Commissioner and Chair, National Film Board
I would like to make a comment on the first part. This information can be found in the annex to the document that we are going to provide to the clerk. We talk a lot about these challenges. For example, you just spoke about ensuring equality and fairness. That is really important. We somewhat did our share, with things such as e-cinema, and my colleague, Claude Jolicoeur, made a lot of efforts in order that there be an intervention in Acadia and to ensure the dissemination of a francophone culture. You are absolutely right.
As for the fund, we are in a transition process. We are caught up in a system that has been in place for 40 years. It is a regulations and protection system and we are working with the means at our disposal. I do not have the privilege of accessing all of the available funds, but our organization does have a considerable deficit. How can we go about making this transition? How can we go about doing what Ian has requested, most appropriately, while assuring the traditional companies and medias that we really can promote all of the new things, when they do not really get along that well amongst each other? It is a real challenge. The government must really take on this task, and all parliamentarians must also reflect on what has to be done for the good of our country.
12:05 p.m.
Conservative
The Chair Conservative Gary Schellenberger
Thank you.
We've gone a little bit over--again.
Mr. Martin, you have the next question, please.
12:05 p.m.
NDP
Pat Martin NDP Winnipeg Centre, MB
Thank you, Mr. Chair.
Thank you, witnesses. I'm not a regular member of this committee, so I think I can safely that I can give an ordinary Canadian's reaction to some of what you've told us today.
Tom especially, your presentation struck me like a....almost sounding the alarm, or serving notice at least, that we're in a situation where it could be either get on the bus or get run over by the bus. We're, at the very least, missing opportunities. It was a very sobering presentation for me. It strikes me that the smokestack industries and the resource-based industries and jobs are leaving us, but we're not jumping on the bandwagon of the next-century jobs. If we don't act quickly, we could be left in the dust.
This tipping point that you talked about really worries me. I wonder if you would elaborate on what leads you to say that we could be hitting this tipping point to where it would be very difficult to get on board.
12:05 p.m.
Government Film Commissioner and Chair, National Film Board
Part of it comes from looking at the history. We had Web 1.0, we had the dot-com bubble, and everybody thought that was it. Then everybody thought, “Oh, the plug's pulled. This isn't anything.” Then look at what happened, at how rapidly that whole situation just turned around.
Again, I go back to what's fundamental in all of this. It isn't purely technological. It's about what people want and need and how they feel. It's about that urge to control.
I think it's sobering, but on the other hand, as I think Ian pointed out as well, the NFB is a terrific example: what a great opportunity, what a chance.
Look, the NFB was hidden away. There were always the questions of whether it existed, and where you could see their films. And suddenly we have a direct connection with this audience. We've had a 1,000% growth in our younger audiences. They're connecting, not only to the NFB but to our country.
In Quebec, for Quebeckers, it is fundamental.
So the opportunities are there.
I think Ian was talking about the companies, the excitement, the talent, and the way that's going. Let's not lose the chance. That's what we're saying now.
12:05 p.m.
NDP
Pat Martin NDP Winnipeg Centre, MB
As a wealthy, developed nation, though, with an education system that's second to none, why aren't we at the leading edge? Why aren't we one of those top ten that you were talking about?
12:05 p.m.
Government Film Commissioner and Chair, National Film Board
Ian will probably be able to answer this, but technologically, some of it has to do with the fact that we let our infrastructure slip.
Madame Lavallée, for example, talked about--
12:05 p.m.
Government Film Commissioner and Chair, National Film Board
No, it's.... Take the bandwidth, for example. I talked about Singapore at one gigabit. We are at a fraction of those kinds of speeds. And speed here is a game changer. It allows you to do things; it's that ability.
Secondly, on the mobile front, because of the lack of competition we had a very static system, which was very expensive compared to most other jurisdictions. It meant that people didn't want to acquire; it meant that it was harder. The rates were probably a little bit more expensive here, so you weren't going to want to use it.
That was part of the problem in terms of the structure of mobile. I think that potentially will change.
Ian, you probably have more things to say about that.
12:05 p.m.
NDP
Pat Martin NDP Winnipeg Centre, MB
Yes, on the same issue, perhaps you could expand a bit, Ian.
What's holding us back?
12:05 p.m.
President and Chief Executive Officer, Interactive Ontario, Canadian Interactive Alliance
There are only two things that really matter in the industry. Really, at the end of the day, it always comes down to either talent or money. I think we've established ourselves as a leader in talent, and maybe despite ourselves; it really wasn't the plan to say, “Hey, we're going to be one of the world's best developers of video game content.” There were a few things that happened. There were some very progressive policies in Quebec to attract video game companies internationally, with some investment strategies, that started all of that.
We seem to get it in our schools. Very early on, right across Canada, our colleges and universities figured out how to train the best and the brightest in that industry. When it comes down to economics or talent, companies will always move towards talent. It's really those unique visions. It's having the unique ability to combine the creativity and the technological acumen.
Right now, as Tom said, I think there's a huge opportunity. We have this core competency that we've developed. It's a momentum that's going for us right now.
12:10 p.m.
Conservative
12:10 p.m.
NDP
Pat Martin NDP Winnipeg Centre, MB
Can Canadians take comfort that we are established and that we have that core competency that just needs to be incubated or cultivated and so on? Or do we need to be doing work at the grassroots in terms of building that core competency?
12:10 p.m.
President and Chief Executive Officer, Interactive Ontario, Canadian Interactive Alliance
There's always work to do at the grassroots, but I think we're firmly recognized internationally as leaders technologically, creatively, and business-wise. We have some great medium-sized companies, such as A2M in Montreal, under Rémi Racine, that came out of a flow of Internet companies that started with Megatunes, I believe, back in the nineties, and the Malofilm empire.
There are a number of companies at that stage, too, and there are a number of multinationals spinning out great business talent. You get to middle management and say, “I'm not going to work for the Man anymore. I have my own ideas about what makes a great game. I'm going to go and make my own.” We just need to support that independent company, that independent vision.
Right now there is a very limited amount of money, especially if you're looking at making very high-production-value content. The new media fund had been limited to $500,000 per project. The Canada Media Fund has now raised the bar to $1 million per project. But the average console video game costs $25 million to $30 million to make.