Canadian Heritage Committee on May 6th, 2010

[The Chair, Conservative, Gary Schellenberger]

I now call to order the thirteenth meeting of the Standing Committee on Canadian Heritage, pursuant to Standing Order 108(2), a study on the emerging and digital media, opportunities and challenges.

Just before we go to our first witnesses, it was brought to my attention that possibly next week we couldn't, as a committee, attend the Canada 3.0 digital conference in Stratford, but that we might send one of our analysts. We've come up with a little bit of a budget to send Marion for those two days, and he would bring a report back to the committee on the various workshops and what went on there.

We set a budget together of $1,873 to send Mr. Ménard to the conference.

Perhaps I could get a motion.

Mr. Del Mastro.

[Dean Del Mastro, Conservative, Peterborough, ON]

Thank you, Mr. Chair.

If you could just help me and I think the other members understand, I'd really like to get a grasp on the benefit of it, how you foresee that. Ultimately, it's the members around the table who have to have an understanding of what's going on there, if it's going to be useful, and I just want to understand how this was conceived and what you hope the outcome of it will be.

[The Chair, Conservative, Gary Schellenberger]

My idea was that we have someone there, because the whole committee couldn't go. I think it's a very important conference.

We have some time for the request that Ms. Dhalla had for the event going on in Toronto. My thinking is, if we had someone with the expertise, such as our analysts have, and that person could bring back a report to us, it would be just as though this committee were there.

Mr. Angus.

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

I looked at both conferences. It's too bad that we aren't going to the Stratford conference. I think there's a lot of stuff that's germane to our report.

I looked at Ms. Dhalla's request. I think it's more germane to the industry committee. We're looking more into telecommunications. They are already in a study, so I think it might be worth recommending that conference for their committee.

In terms of Mr. Ménard going, if he does go, I'd actually like, then, to take the time for him to present to us a bit. If I just get a paper, it isn't the same thing. It would be odd for us to question one of our analysts, but if he's going to go, I'd prefer that he come back and say, “These were the key recommendations, these were the key voices”, and then we could decide whether we need those witnesses or not.

[The Chair, Conservative, Gary Schellenberger]

Mr. Del Mastro.

[Dean Del Mastro, Conservative, Peterborough, ON]

Just to Charlie's point, ultimately, what we're doing here will culminate in a report, will culminate hopefully in a direction or a pathway that the committee would like to see the government undertake. To have recommendations or to have things in the report that, frankly, the committee never heard wouldn't be overly helpful towards us putting together recommendations.

I think, to Charlie's point, there has to be more than just having somebody attend the conference so that they get a grasp of what's going on, because, with due respect to the analysts, the analysts aren't the ones who are actually going to preside over what the report ultimately says.

It's very important that the people around the table, the elected individuals around the table, actually have an understanding or a comprehension of what's going on at it. So I'd like to make sure that if we're going to do that we have some kind of plan or rationale as to why, because, ultimately, if we're not getting the information, then it's of no value to us in the report.

[The Chair, Conservative, Gary Schellenberger]

Mr. Rodriguez.

[Pablo Rodriguez, Liberal, Honoré-Mercier, QC]

I agree with Mr. Del Mastro. If we are to send somebody to this conference, we expect that, when he came back, he would provide us with a presentation and tell us what he saw and discussed. That presentation would not necessarily result in a recommendation because not all of the committee is attending the conference. But the person who goes must at least provide us with a report. I agree, this is an important conference. We cannot all go, we will send someone there and then we should be briefed soon afterwards in order to get a full summary of the conference.

[Dean Del Mastro, Conservative, Peterborough, ON]

If we're good with that, that's fine.

[The Chair, Conservative, Gary Schellenberger]

Okay. Do I have a motion to accept the budget of $1,873?

[Dean Del Mastro, Conservative, Peterborough, ON]

So moved.

[The Chair, Conservative, Gary Schellenberger]

It is moved by Mr. Del Mastro and seconded by Mr. Rodriguez.

(Motion agreed to)

[Pablo Rodriguez, Liberal, Honoré-Mercier, QC]

On a point of information, are we discussing Mr. Angus' motion today or at the next meeting?

[The Chair, Conservative, Gary Schellenberger]

It would be at the next meeting, yes.

Madame Lavallée.

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

I would like Mr. Angus' motion to be put on the agenda, because, if we do not discuss it until the last five minutes, we will not have enough time to have a valid discussion.

Could we perhaps hear from fewer witnesses and spend 20 minutes on the motion? How much time would you like, Mr. Angus, half an hour? How much time do you think we need to debate your motion?

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

I think we'd need 20 minutes.

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

Would 20 minutes be okay?

[The Chair, Conservative, Gary Schellenberger]

I'm just going to have a little conference with my clerk here for a minute.

We'll leave it with our clerk to fit it in. We'll talk to some of the witnesses, and at one meeting we'll try to cut those from 60 minutes to 50 minutes. That would give us our 20 minutes. We'll work it out going on. It might not be the next meeting; it will be in the near future, though.

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

With all due respect, I'd prefer to have it on Tuesday, because it is coming up. We've given enough motions. Let's just deal with it then. There's no reason we can't go to 50 minutes. Mr. Chair, as long as you crack the whip--and I'll be watching you to make sure you do--then we could make it happen.

[The Chair, Conservative, Gary Schellenberger]

I will crack the whip. Already this morning, with the business we've done, we've taken time away from our witnesses.

[Dean Del Mastro, Conservative, Peterborough, ON]

Shame.

[The Chair, Conservative, Gary Schellenberger]

So with that, we're going to go forward.

Our witnesses are from the Canadian Film and Television Production Association and Nordicity Group Limited. I'm going to ask Mr. Séguin to introduce his people. Well, I can do it all.

Marc Séguin is the senior vice-president of policy and John Barrack is the chief operating officer and chief legal officer with the Canadian Film and Television Production Association. From Nordicity Group Limited we have Peter Lyman, a senior partner.

Mr. Séguin or Mr. Barrack, go ahead, please.

Excuse me. Yes, Mr. Galipeau.

[Royal Galipeau, Conservative, Ottawa—Orléans, ON]

Mr. Chair, I apologize for interrupting you. Do the representatives from the Canadian Film and Television Production Association have written presentations?

[Marc Séguin, Senior Vice-President, Policy, Canadian Film and Television Production Association]

No.

[The Chair, Conservative, Gary Schellenberger]

No. We're trying to keep our presentations.... It would be 10 minutes or less from each group.

No more interruptions.

Mr. Barrack.

[John Barrack, Chief Operating Officer and Chief Legal Officer, Canadian Film and Television Production Association]

Thank you, Mr. Chairman and members of the committee. Thank you for taking the time to hear us this morning.

The Canadian Film and Television Production Association, or CFTPA, welcomes the occasion to speak with you on the opportunities and challenges related to emerging and digital media. As was mentioned earlier, Mr. Séguin is with me here today. He's the association's senior vice-president of policy and I'm the association's chief operating officer and chief legal officer.

Our president, Norm Bolen, would have liked to be here, but he had a scheduling conflict as he is a board member of Hot Docs and his attendance was required at that festival.

As many of you know, the CFTPA is a national trade association that represents the most successful Canadian independent screen-based media production entrepreneurs working in the English language market in television, feature film, and interactive media. We have close to 400 members and they are located in every region of the country.

Together our members are responsible for a large majority of the more than $5 billion in production activity that occurs in this country each year, and the 130,000 jobs this work sustains. With a few exceptions, our members are virtually all small and medium-sized businesses.

We take this opportunity to congratulate the government for having committed this past March in the throne speech to launching a digital economy strategy for Canada. We understand, through media reports, that a national consultation process will be launched in the near future. The CFTPA and its members look forward to participating in that process.

We also applaud the standing committee for having initiated its own study on emerging and digital media. We believe it's important to have a broad and open discussion on this vital subject with as many decision-makers as possible participating in the dialogue.

Before addressing some of the specific questions outlined in this study's terms of reference, we will share with you our thoughts related to digital media in general and the national digital media strategy in particular.

Marc.

[Marc Séguin]

Who would have imagined ten years ago that one could access, online, a music store and legitimately download thousands of songs to a device so small you can clip it to your shirt collar, or read your daily newspaper on your cellphone, or access a program online that you may have missed when it was originally broadcast on traditional television?

The digital media innovations we have witnessed over the last decade are quite impressive, to say the least. And if you consider Moore's law, I think it's safe to say that ten years from now digital media will evolve to a point that is unimaginable today.

Indeed, in the not too distant future, a country's very prosperity and social vibrancy could very well be determined by its ongoing capacity to innovate and exploit the opportunities of the digital age. To be a globally competitive leader could mean a better standard of living for all Canadians; to fall behind could also mean a marked degree of uncertainty.

We believe that Canada can, and must, be a world leader in the digital age. All stakeholders owe it to the next generation of Canadians to work together to ensure that we do in fact succeed at being at the top of our international competitive game.

We think putting in place a national digital media strategy is a key element in the pursuit of this important goal. A number of other countries, like Great Britain, Australia, New Zealand, and France, have already done so. We must not fall further behind.

This national digital strategy must position Canada for both economic and cultural prosperity in the 21st century. It should seek to formalize key objectives and be supported by interconnected policies, strategies, and action plans, and it should span the public and private sectors.

To be successful, we believe this strategy needs to have four key underpinning objectives.

The first is to ensure that Canada possesses a broadband infrastructure that is second to none in the world. While perhaps simple in concept, we are not blind to the fact that there are many forces at play or the inherent cost of achieving and maintaining this objective. This goal is the modern-day equivalent of building the transcontinental railway or the Trans-Canada Highway.

As a second objective, we must guarantee that Canadians control this infrastructure that we build. While there is clearly a need to attract foreign private investment in the building of our broadband capacity, we do not believe the course of Canada's economic or cultural future should be charted by foreign interests.

Third, basic access should be a right. We believe that all Canadians should have an opportunity to participate in the digital age. There should be no geographic, economic, cultural, ethnic, linguistic, or even knowledge-based barriers to participating in the digital age. One of Canada's strengths has long been its diversity; ensuring that all Canadians can participate in the digital age will help promote and celebrate that diversity.

And lastly, our fourth objective is in many ways the most important, in our view. This objective relates to ensuring that professional content created by Canadians has priority on our broadband networks.

A national digital media strategy must clearly recognize that our broadband infrastructure is a key vehicle for achieving both economic and cultural goals. Few people ever question the potential of this broadband infrastructure to contribute to Canada's economic future, but the cultural sector is a very key component in that economy and certainly in the economy of tomorrow.

A 2008 report entitled Valuing Culture: Measuring and Understanding Canada’s Creative Economy, which was done by the Conference Board of Canada in partnership with the Department of Canadian Heritage, valued the cultural sector's economic footprint to be $84.6 billion in 2007, or roughly 7.4% of Canada's total real GDP. It contributed 1.1 million jobs to the economy. This is significant, to say the least.

In our view, broadband infrastructure should be recognized as a public service that is essential to the maintenance and enhancement of Canada's national identity and cultural sovereignty.

We also believe that each element of the system should contribute, in an appropriate manner, to the creation and presentation of professional Canadian content. To ensure we continue to promote diversity in this country, we also believe that a large majority of that content should be provided by the independent sector.

I will now pass the floor back to my colleague John, who will address some of the specific questions you asked in your terms of reference.

[John Barrack]

Over time, the production businesses in Canada has matured and has become increasingly well established. Nevertheless, production companies must now deal with significant changes to their traditional business models. Long gone are the days when a producer could conceive of a program for a single exhibition window, and the days are also past when they could secure the necessary financing to produce that show by licensing the rights for a multitude of individual television broadcasters in Canada and abroad.

Production companies have been thrust into a position where they must now produce a program concurrently for several platforms, and they must do so with fewer domestic and international sources of financing. This has led to significant financial challenges.

Consolidation in the Canadian television broadcast sector is a large part of our financing challenge. With only three large broadcast corporate groups now in English Canada, there are effectively few selling opportunities in the television market for our members. Increasingly, broadcasters also want to undertake their productions in-house. When they do decide to commission work from independent producers, it's typically because the projects are much riskier to produce. They are using, and some might even say abusing, their dominant position in the market to secure unreasonable terms from Canadian producers. They are demanding more rights, including all digital rights, and often paying very little or no additional money for these rights.

We highlight that a broadcaster is also the trigger to access financing from the Canada Media Fund and also one of the main triggers to access the Canadian film or video production tax credit. This puts them in a very strong bargaining position.

Independent producers are often faced with a very serious quandary. They either accept the take-it-or-leave-it deal offered by these large broadcasters to keep their business alive, or they turn down the terrible terms and face the prospect of putting their business on hold, or even closing their doors permanently.

This kind of behaviour by broadcasters undermines the sustainability of independent production companies and, by extension, the many thousands of jobs they support. This is why we have been pushing fiercely for equitable and enforceable terms of trade with broadcasters.

Thankfully, the CRTC has recognized this issue and has repeatedly stated its expectation that producers and broadcasters reach real and meaningful agreements by 2011. We remain hopeful that an agreement with teeth can be achieved.

In addition to this particular challenge, foreign financing to Canadian-certified productions has significantly decreased, dropping from $407 million to $196 million between 2001 and 2008. Our co-production activity has also experienced incredible declines, dropping by more than half to about $390 million through the same period.

In our view, these downward trends can be reversed by updating our international policies and programs. Canada's official co-production treaties and new export promotion programs could be invaluable tools in these areas.

Despite the formidable challenges faced by independent producers, they have nonetheless achieved success. Some have consistently been at the forefront of exploiting the unique potential of the Internet to deliver Canadian programming to audiences on new platforms and in new ways.

In a number of cases, independent producers have collaborated with broadcasters to extend the reach of existing successful Canadian television series over the Internet. In other cases, independent producers have used the Internet as a primary distribution platform for their content, either through self-distribution or by entering into revenue-sharing arrangements with distributors such as Joost, Babelgum, and Sling.

Critically acclaimed multi-platform programs like the award-winning regenesistv.com from Xenophile Media and Shaftesbury Films, and the cutting-edge new media components of Degrassi: The Next Generation, from Epitome Pictures, are some examples.

Another example is Marblemedia's, thisisdanielcook.com. It's the companion website to the television series, This is Daniel Cook, which is sold all over the world. It puts preschoolers in control with bright symbols, spoken instructions, and stimulating games and activities. Here's what's incredible: thisisdanielcook.com achieves an impressive 1.7 million page views per month. That's a Canadian program being taken to the world.

Another one of your questions addresses what producers can do to benefit from developments in the digital media and to prepare for the future. As I've noted, independent producers have been innovative and they continue to adapt to take advantage of new opportunities in digital media, and in the Internet more specifically.

Two days ago in Toronto we hosted a round table “kitchen cabinet” meeting to which were invited leading experts from several sectors, including independent producers, broadcasters, telecommunications and wireless representatives, web-based companies, as well as other industry organizations. We also invited a select group of regular Canadian consumers who are comfortable using digital media. The goal of this round table was to allow all of us to learn from consumers and identify their areas of common interest so that key stakeholders could work collaboratively on moving forward. We are organizing another similar round table in Ottawa with senior government officials from various departments.

No one has a crystal ball with which to predict with certainty the future of digital media, but there is one thing we do know. Having an environment in which all stakeholders collaborate is the only productive way of ensuring that we will achieve our shared goals to position Canada for prosperity in the 21st century.

You have asked what policies the federal government could implement to help Canadians and Canadian independent producers benefit from developments in emerging digital media. We conclude our presentation with our specific thoughts in this regard.

A national digital media strategy for Canada must be developed and implemented as quickly as possible. The strategy must recognize digital media as crucial to both the economic and the cultural future of Canada. It must deem broadband infrastructure as essential to the maintenance and enhancement of Canada's national identity and cultural sovereignty. It must enshrine the principle that each element of the broadband system must contribute in an appropriate manner to the creation and presentation of professional Canadian content and that a very large majority of that content should originate from independent sources.

Fourth, the strategy must recognize that the existence of meaningful terms of trade between independent producers and broadcasters is in the public interest and necessary to ensure equity and fairness in the system and promote diversity.

Fifth, the strategy must require that Canadians control broadband infrastructure, while also recognizing the need to attract greater private investment, both domestic and foreign, in our communications networks and in the creation of professional content.

Sixth, it must ensure basic access for all Canadians to broadband networks so that they may fully participate in the digital age.

Seventh, the strategy must renew the Canada Media Fund for five years. One- or two-year renewals create uncertainty and undermine the capacity for all stakeholders to develop long-term business plans.

Eighth, it must update existing support programs, like the Canadian film or video production tax credit or the Canada Media Fund to allow new distribution options to qualify a project for funding. Television broadcasters should no longer be the main gatekeepers for funding.

The strategy must revitalize CBC in light of the important role it plays in our system, and, last but not least, Canada's digital media strategy must incorporate a new export and co-production policy to stimulate the international segment of the independent production sector. The Canadian market alone is simply too small to stimulate any real growth, and therefore we must increasingly focus on opportunities in foreign markets. There is money there, I assure you.

That concludes our presentation. We would be happy to answer any questions you may have.

Thank you, Mr. Chairman.

[The Chair, Conservative, Gary Schellenberger]

Thank you.

We'll move now to Mr. Lyman, please.

[Peter Lyman, Senior Partner, Nordicity Group Ltd.]

My name is Peter Lyman. I'm the senior partner of Nordicity Group. I want to clarify that I'm here on behalf of Nordicity itself and not with the CFTPA. CFTPA is a valued client of ours, among other clients, but we just happen to be, by coincidence, packaged together for this session.

I think what they have said, though, actually goes quite far into offering some specifics about a national digital strategy that we had considered in our publication of last fall, an issues discussion paper on a national digital strategy.

Just to give you a bit of background, our firm has been in business for 25 years, and we work for the CRTC, Canadian Heritage, Telefilm, all the agencies, the provincial governments, and so on, plus the telecom side of things, auctions, and spectrum valuations.

We've had a pretty broad exposure to a lot of the issues you're dealing with. About two years ago, we said to ourselves--with a bit of hubris, I suppose--that we could sell ourselves to the U.K. There's a similar structure, and we've been quite creative in Canada with a lot of our policy and tax initiatives, and so on, whereas they were to some extent stumbling along. We always had an international practice, but it tended to be more in the third world countries.

But when we got there, of course, it's a double-edged sword, or a two-way street. They do lots of things that we can learn from. When we read all about Creative Britain, and then a year ago there was the appearance of Digital Britain itself, we just said to ourselves that this was really neat. They've gotten together and collected themselves. Then we looked at other countries and found that, lo and behold, some of our major trading partners and western-based countries also had gone through the route of the digital strategy.

We looked a bit further and found that in all cases, the agendas of these countries were quite different. They all had digital literacy as a topic and something to do about it. They tended to have broadband access to the home and established various target levels, but they all were emanations of their own particular national characteristics. So it occurred to us that for Canada, it wasn't a question of just having a cookie cutter national digital strategy, but rather one that was fashioned along the issues that are pertinent to us.

So we were first going to do an op-ed page thing, saying let's get on with it, but the more we got into it, the more we figured that the best thing was to think through what all the issues would be in three what we call “buckets” or categories of concern, the first one being in a telecom or ICT area, the second one being in the cultural domain, and the third in the human resources and training side of thing. We put together this issues discussion paper and published it last fall, and now we are going through a process leading up to Canada 3.0 and other conferences that are having these sorts of debates.

At the law society conference two weeks ago in Ottawa, we gave a bit of an update on how far we have come in the six or eight months since we published the discussion paper. But the way it was fashioned, that particular debate, was again, what should be the agenda. That got us thinking about doing a little bit more than an update, and I can give the update in response to questions. You can see it.

Unfortunately, this is only in English, not in French, but we can get copies of the conference report.

So that is the kind of thinking we had, as a result of doing that, that the government seems to be approaching the national digital strategy with a bit of an assumption that we have an ICT broadband approach to it. And there it comes to, how do you frame the debate? How do you carve out the agenda?

If you start with ICT or broadband, even there, information and communications technology gives you kind of an industrial push. A broadband strategy, such as the Americans have—they don't necessarily have an ICT one and they don't have a cultural one—takes you down a certain road.

If you say, well, we should have a broadband or ICT strategy but bring culture into it, and with all the things that John and Marc have been talking about in specific terms, do you just sort of attach that to it? If you do that, you might end up really talking more about regulation. When you try to streamline regulation—and some people would seek to integrate the Broadcasting Act with the Telecommunications Act to make a new communications act, and so on—that's an issue certainly for debate, but you're led down that path if you say, “Let's do ICT, broadband, and branch into culture”.

If you start with the cultural dimension alone, we found ourselves thinking that there you have to look at the world as it's evolving. We've all heard about interactivity and the Internet and so on. That's obviously a characteristic that we don't need to talk about anymore, but it does feed back to what our assumptions are of what we're doing in culture.

Over the last two and a half decades of working in the cultural industry, the way I look at it is simply that we've created an independent production sector that's fantastic in the course of that period through a variety of interventions. So we've really created the creative industries. Why have we done that? We've done it for those economic reasons that Marc alluded to, the amount of GDP and jobs that are created, but we've also done it because of the essential cultural imperative.

Our way of expressing that often is that we want to have the means to tell stories to ourselves about ourselves, and in the connotation of that is kind of a one-way connotation. You create a story, you publish a book, you make a broadcast, and you tell your story—and that's great. But the way I think you have to look at it now is that the cultural expression in media is much more a participatory two-way street. So if you want to have a cultural first digital strategy, I think you have to examine how you frame the question at the beginning about what cultural values you're aspiring to. I would submit that you would have to now add some sort of notion about active engagement in global issues and global communication as part of the cultural strategy, not just that we create something and push it out there.

I could get into the agenda that we set up and say how far we are going on it, but I think I'll stop my remarks now and let it come up in questions.

Thank you very much.

[The Chair, Conservative, Gary Schellenberger]

The first questioner is Mr. Rodriguez, please.

[Pablo Rodriguez, Liberal, Honoré-Mercier, QC]

Thank you, Mr. Chair.

Good morning to everyone, welcome.

How is co-production doing right now?

[Marc Séguin]

Over the past eight years, co-production has decreased a great deal. Approximately $390 million are being invested in co-production. In 2001, the figure was nearly $900 million. This sector has undergone a significant decline.

[Pablo Rodriguez, Liberal, Honoré-Mercier, QC]

How do you explain that?

[Marc Séguin]

There are several factors. First of all, our co-production treaties—many of them were signed a very long time ago—are no longer up-to-date. Secondly, in Europe, over the past few years, countries have signed co-production agreements amongst themselves. We have now reached a point where, as far as the Europeans are concerned, it is more advantageous for them to produce amongst themselves than with Canada.

[Pablo Rodriguez, Liberal, Honoré-Mercier, QC]

So we are no longer really competitive in this sector for internal reasons in Europe, but also for our own reasons. As far as our reasons are concerned, is it relatively easy or quick for the government to make changes, whether they be regulatory or legislative, which could in relatively short order enable you to enter into co-production agreements and attract investment again?

[Marc Séguin]

It seems to me that several proposals have been made by a number of groups in Canada over the past few months, if not years. To some extent, I think it always come back to the issue of financing. With co-productions, a Canadian producer has to bring something to put on the table. There is not a great deal of money in the system for feature films. It is tremendously difficult to fund a production.

With respect to what we could do, we obviously could update our treaties with other countries, we could establish some funding programs earmarked for co-production which, at the same time, would ease the pressure on already existing funds; we could do that type of thing. There are also some administrative things that we could do to speed up—

[Pablo Rodriguez, Liberal, Honoré-Mercier, QC]

So we have to update our regulations, our funding and our export programs.

[Marc Séguin]

Absolutely. Co-production obviously also depends to a great extent on the relations we develop with producers from other countries. It is not necessarily easy for a Canadian producer to go abroad—it is also expensive—in order to cultivate those relationships and develop projects.

[Pablo Rodriguez, Liberal, Honoré-Mercier, QC]

Please be very quick, Mr. Lyman.

[Peter Lyman]

There are probably other things. As you know, co-production treaties have been around for 30 or 40 years. We--government, etc.--have been trying to revise them and modernize them and update them. There are certain provisions in there that would make it easier for producers to engage in co-productions. Within the European context they've made some very small but important measures. As an example, a scriptwriter from a third country is permissible in certain co-production treaties, but not typically between Canada and those countries. What you run counter to immediately is on the creator's side; it's a bit at their expense.

I think there are also some fixes in terms of the ownership of the equity in a production. Suffice it to say that there are a couple of points.

[Pablo Rodriguez, Liberal, Honoré-Mercier, QC]

A little earlier, you mentioned that some people were talking about merging the Telecommunications Act and the Broadcasting Act, given that these two sectors are becoming more and more integrated, but you did not give your opinion. Can you tell me what it is?

[Peter Lyman]

I've sat in front of a panel of communications lawyers--and I'm not a lawyer--on the issue of whether fusion is a good idea or not. They all said, “Well, if you fused the two acts, you'd still have to create a broadcasting act within the same one, and they go through the legal and parliamentary system. It would take a few years before you'd get a fusion, so why don't we do some quick fixes?”

When people talk about a fusing of telecommunications and broadcasting, what they really mean is ripping out the broadcasting provisions so that we don't have to mess around when we're getting into these difficult areas of what constitutes broadcasting and what does not constitute broadcasting. That's a very messy area. An easy way to do it is to fuse the two--just have a telecommunications act and dispense with the Broadcasting Act--but I don't think this country is going in that direction.

[The Chair, Conservative, Gary Schellenberger]

Thank you.

Go ahead, Madame Lavallée, please.

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

I have some reservations about what you just said, Mr. Lyman. Merging the Telecommunications Act and the Broadcasting Act would also result in some extremely important advantages from the cultural perspective, which would include the ability to regulate wireless, which is already in play, and increasingly, the role of broadcasters. However, that is not what I want to talk about now.

I would like to talk about your excellent study entitled: "Towards a national digital strategy". This is the only study I personally am aware of that really gives an overview for a comprehensive strategy, but there are no doubt others as well. Canada needs a comprehensive strategy, but it does not have one yet. Of course, you discussed human capital, cultural issues and, naturally, the Copyright Act, consumer access to broadband service and digital television. After all, the digital television deadline is only one and a half years away, but we are not at all ready. No one seems to be thinking about it at all.

I would encourage everybody to read this study, particularly Conservative party members. I would encourage you to read this excellent study, because it will give you some good ideas about how to go about drafting a comprehensive strategy. I will now talk about the conclusions. You talked about the need to establish a high-calibre panel. I would like you to clarify what type of panel you mean and how it could work, so that we can achieve a comprehensive strategy as quickly as possible.

[Peter Lyman]

We got into the whole question of machinery in our paper because we felt you can't just say what the issues are; you have to sort of point to a way to resolve them. So you had on the table a suggestion of a royal commission from the CRTC chair at the time. We feel that's a little bit of an outdated concept for this.

We looked at the information highway task force that was in place a few years ago, and arguably it did its job of kind of educating Canadians and getting some initiatives under way, but we thought in this case, because things happen so quickly, and in view of particularly the British experience, where they managed to wrap the whole thing up within nine months.... They appointed somebody--and it all comes down to the key person you appoint to really lead it--who put a panel together and had deliberations. They used the media to get feedback from people, so everybody chimed in on it, had an interim report that got feedback, and they actually made a lot of changes, particularly related to the cultural area.

So we thought something of that kind could work, but there are many ways of making it work both within a system like Canada's and also within the particular circumstances of when our Parliament and government is in session. But that's the way we thought it had to be--nimble, quick, get in, expertise brought in--quite all-encompassing in it's purview, because all these issues are so interrelated. But at the same time we're not trying to boil the ocean. You know you can't, as we consultants say, try to do everything at once. But you had to set down what things you wanted to do immediately and what things were left to other processes. For example, you get traffic shaping or the net neutrality issue, which is.... We put it on the table, but since then it's largely been dealt with in Canada, to some considerable positive effect, from what most people think, and ahead of a lot of other countries.

So on that particular issue, we have to watch it, and there will be evolutions. As John was mentioning, you've got the gatekeeper question in there. That has to be--on the cultural side--looked at, but there are things that we could move on to. So a nimble, quick panel. That's how we recommend it.

[The Chair, Conservative, Gary Schellenberger]

Thank you very much.

Mr. Angus please.

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

Thank you.

I find this discussion fascinating. We tried to set up this hearing to look at the opportunities of how we can start to reshape where we're going culturally. In terms of national digital strategies, there are a number of models out there.

In Brazil, they've gone bottom up. The great Brazilian culture minister, Gilberto Gil.... In the barrios they put in all kinds of cultural digital stuff, and kids in the barrios are creating their own culture.

Another model is England, where they've taken it out of the BBC, a well-funded public broadcaster. They've paid good money for really strong productions, and they market it internationally.

In Canada, it seems our thing was always “let's just hold our own”. We have two or three markets to sell television to in English Canada and two in Quebec. As long as we managed to have some Canadian content, it seems that made politicians and the regulators happy. As Bruce Cockburn says, “The trouble with normal is it always gets worse.”

I'm thinking that for years we've seen this continual decline in terms of commitment from broadcasters and what they're willing to put out. They feel that as long as they have something Canadian on, we're happy.

But you talk about the possibilities with the foreign markets now, as independents. Can you explain to me how you see, in a digital age, instead of being on the defensive all the time, we can actually go on the offensive and get some of our great cultural products out there in a way that was never possible before?

[John Barrack]

Thank you very much for that question. That's really the essential question we're grappling with, as an association.

One of the things, quite frankly, we turned our minds to about a year ago was to consider how we could take Canada to the world. There are limits to the domestic market. Obviously, it's about quality. Obviously, it's about professional content.

We talked about this gatekeeper function again. Right now, so many of our structures, like the Canada Media Fund, for example, require a broadcaster to be involved to trigger anything from the tax credits on through to accessing moneys from the Canada Media Fund. We think that's a little wrong-headed, quite frankly, because we think if you want to take Canada to the world, if you really want to grab that market, Canada has a very unique opportunity to do so. Why is that? It's because we have been producing at price points and at quality points that make us very nimble. Back to Peter's point, it makes us very, very nimble as a production environment. We are an excellent production manufacturing environment. We can work with small and intermediate-sized budgets; we can turn around high-quality content; we have the talent; we have the crews; we have all of the infrastructural inputs to be able to do that. But we can't be hamstrung in our own country by having these gatekeepers effectively holding that money up in an environment where, frankly, there's a real constraint on shelf space.

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

So you're saying we should change the regulatory requirements in terms of independent production being able to access the tax credits to all the video funds, because right now you have to get the deal with the broadcaster. Once again, you have to go and live in the castle with the feudal lord and get what he gives you.

[John Barrack]

Who are you referring to, sir?

[Voices]

Oh, oh!

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

Oh, nobody in particular. Let's say, hypothetically, the feudal lords.

[Voices]

Oh, oh!

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

Are you telling us that as independents there is a business case to be made that we could actually have real cultural competition by allowing you the money to go out and find those markets in the digital realm, as opposed to having to go to a broadcaster?

[John Barrack]

Broadcasters are a very important part of this mix, absolutely. But I do think we could, and I think are.... Look at the Daniel Cook example that we mentioned here earlier. If we can take that culture of entrepreneurialism that exists among independent producers and free them to have that money to be able to create those jobs in Canada--of course, there have to be all those safeguards: it has to be made here, it has to use Canadian inputs--then, yes, I do believe that. I do believe we will be able to sell to the world and attract financing from around the world to really sell Canada internationally.

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

Thank you very much.

[Marc Séguin]

Could I add to that? I apologize for jumping in here.

I want to share a very quick example of how we've gotten a bit cuckoo in the system. We have a member who has a show and has almost entirely financed his show with international money. The only piece missing to close it all out is an agreement with a Canadian broadcaster, and he's not getting it. That agreement, which opens up doors to the tax credit to finish the financing, would trigger the production, and he can't go forward. These are thousands of jobs that are basically put on hold because we can't trigger in Canada. This is a bit odd, if you ask me.

[John Barrack]

That's not just one example. Particularly in areas like kids' programming, there is a demand for Canadian kids' programming around the world, but we can't sell this to Canadian broadcasters, and therefore those programs die and those jobs disappear.

[The Chair, Conservative, Gary Schellenberger]

Thank you.

Mr. Del Mastro.

[Dean Del Mastro, Conservative, Peterborough, ON]

Thank you, Mr. Chairman.

Thanks for the presentations today.

I just wanted to go back to the Canadian Film and Television Production Association, briefly.

You mentioned a couple of things. You talked about concentration in the broadcast industry and how that's leading to some deals that you think are offside or certainly one-sided. I will say that I'm happy to hear that in the purchase of CanWest, Shaw has committed to the $125 million of Canadian content investment over the next five years that CanWest had originally committed to. I think that's good news.

We had a broadcast study last year, and I do think it's incumbent on us—I agree with other comments at the table as well—that once we come up with our digital strategy, we're going to have to look at other things we've established, like the Broadcast Act, the CRTC, and see how they jive with our strategy to make sure everybody is pulling in the same direction, that we have a common directive. If we're going to invest more in the CBC, I think we need a performance review from the Auditor General to make sure this is all going in the same direction, so we can really be effective with every dollar we're putting in, regardless of how much it is. Then maybe we can make a case for more.

I'm really concerned. I wanted to mention this the other day, that in order for us to step up on Canadian production, and to encourage international markets of it, I think we need to start to value it more here. I'm not aware of any comments you may have made on the recent CRTC decision on value-for-signal or fee-for-carriage, but the decision, to me, is remarkable. The entire trump card on this is the ability to block out U.S. networks if you own the rights to U.S. shows. They also reduce Canadian content requirements.

Once we get beyond this current period where there are commitments for Canadian content, and understanding that over-the-air broadcasters are going to have to spend themselves into oblivion to buy U.S. shows so they've got the bargaining power, are you concerned at all that the new focus is all on foreign content—mostly U.S.—and that regardless of whether there's a fee or not, that fee is going to be determined by how much foreign content you've got? Ultimately, Canadian production is really going to suffer. It seems to me that it runs in a completely opposite direction to the CRTC's mandate.

I'm just wondering what your feelings are on that.

[John Barrack]

Obviously we have a view. What we would say is there are very many elements of the recent CRTC decision that we applaud, in the sense that they turned their minds to content in some ways that they hadn't in the past, for example, moving from an expectation to a condition of licence that 75% of programs of national interest be sourced from independent producers.

However, you're right on. I think that what was not in that decision was anything to put the brake on the foreign spend. That was a little surprising to us, to be honest. I think what we've seen, certainly with the Shaw acquisition and the price paid, is that these assets have incredible value. Particularly on the specialty side, these assets are incredibly robust.

So, yes, we think that television very much still has a place to play in terms of making sure those content obligations are met, and frankly as a platform to help selling to the world.

But I think your concern is a very valid one, and it's one that we would share.

[Dean Del Mastro, Conservative, Peterborough, ON]

It seems to be moving forward, and I think this is the Shaw approach. I don't want to put words in their mouth, but I think you're going to see duplication of this in other countries. We're seeing it in the United States as well. The approach is to own the product in order to monetize it. In order to get a value out of it with the platforms that are emerging, they really want to take the content from creation all the way through to final delivery, and to own all of the final delivery points on that.

If that's the model we're moving toward and if we're going to try to encourage the Canadian industry, don't these Canadian content restrictions become much more important?

[John Barrack]

I think what becomes important, to go back to the terms of trade discussion, is that no one in the independent production world is saying, we don't want you to have the content; they're saying, we just don't want you to abuse your dominant position. Effectively, it's no longer really independent, right? If you're able to put the thumb on someone to acquire digital rights for a dollar, for example, or a thousand dollars, you're not reflecting true value.

I think it's important for companies and broadcasters to be able to acquire rights because I think it's important to work with those broadcasters in partnership to best exploit that Canadian content across a multiplicity of platforms. That's what we want. We want to do those deals, but they have to be balanced and fair, and they must lead to the maintenance of what is a truly independent production sector.

I don't think Canadians want to see all decisions about what they view coming from what really is now less than a handful of broadcasters. If we really want to have that independent voice, no one is saying, don't sell those cultural products to those various broadcasters, but there has to be a balancing in there somewhere. That's really what we're seeking.

[Dean Del Mastro, Conservative, Peterborough, ON]

Thank you.

[The Chair, Conservative, Gary Schellenberger]

Thank you very much.

We don't have time for another full round at this particular time, so if anyone has any further questions for our presenters here this morning, you can either talk to the presenters directly or send the questions through me, the chair.

We will recess for five minutes and change witnesses.

Again, thank you very much for your presentations this morning.

[The Chair, Conservative, Gary Schellenberger]

Welcome back to the second part of our meeting here this morning.

We welcome as our next witnesses, from the National Campus and Community Radio Association, Shelley Robinson, executive director; and from Telefilm Canada, Carolle Brabant, executive director, and Dave Forget, director of contracts and certification.

Welcome. If you could keep your comments to about 10 minutes, then we can have time for two rounds of questions.

Go ahead, please, Ms. Robinson.

[Shelley Robinson, Executive Director, National Campus and Community Radio Association]

Good afternoon. I appreciate the opportunity to appear before you today.

The National Campus and Community Radio Association, l'Association nationale des radios etudiantes et communautaires, NCRA/Anrec, is a not-for-profit group of organizations and individuals committed to volunteer-driven, non-profit community-oriented radio across Canada. Many of you probably have these stations in your own communities. Our goals are to ensure stability and support for individual local stations and to promote the long-term growth and effectiveness of the sector.

Our particular organization represents 77 not-for-profit radio stations in nine provinces, not including P.E.I., and three territories. We are here today to ground community radio in the discussion of digital and emerging media. We also have some recommendations for how the federal government can help support this vital cultural industry as we continue to provide meaningful access to community media for Canadians in whatever ways they find most useful.

We have members who have been broadcasting for more than 35 years, including CKCU here in Ottawa, and some who have just been licensed this past year. Collectively, we have more than 6,000 volunteers; our signals reach at least 22 million Canadians; our content stretches everywhere else; and we broadcast in more than 63 languages.

Our stations are already serving as local multimedia hubs, albeit to different degrees. Almost all have a website that provides a live audio web stream, and many also have a downloadable on-demand version of their program archives or podcasts of some of their shows. A few are also streaming video from their broadcast studios. Facebook, Twitter, and live chats, especially for taking requests, abound. People add community events and local recipes to station blogs. One station is even working on an iPhone application.

Many members tweet about station and community activities, but CJSF-FM in Burnaby, B.C., also asked listeners to tweet updates live from events around the Olympics so they could then broadcast that information back to listeners. That station also maintains two web streams, one that duplicates their FM broadcast and another for longer-form special programming.

CJAS-FM in St. Augustine, Quebec, and CKDU-FM in Halifax, Nova Scotia, are examples of stations that also serve as CAP sites, an Industry Canada initiative to provide free local Internet access for community members to get online.

CJSR-FM in Edmonton has produced video countdowns of that station's most popular songs, including interviews with local musicians on that week's chart, and then posted them on YouTube.

CFRU-FM in Guelph has a program that links with stations in Los Angeles, Winnipeg, and Peterborough, using phone lines and a web stream interface to produce live, improvisational radio art.

Because of spectrum scarcity, meaning the lack of available FM frequencies, particularly in urban areas like Toronto, the Waterloo cluster, and around Vancouver, some of our stations can't obtain an FM broadcasting licence at all, and instead broadcast entirely online. For instance, Radio Laurier is the official campus station of Wilfrid Laurier University in Waterloo. It has a staff of 11 students and a roster of 25 live web streaming shows, all with accompanying blogs. They cover music, sports, campus activities, and current affairs. They even have a live concert series.

Many traditional FM stations in rural communities, such as CHES-FM in Erin, Ontario, use digital media to complement their programming. They stream programs but also have programmers from nearby Orangeville who produce daily shows from their homes, which they submit to the station using an FTP process. CHES also has some programmers who were going to produce an online-only version, but then they saw the value of using the station's studio space and aligning themselves with a recognized community broadcaster. The station also draws content from other community stations and our own online program exchange to round out their schedule.

Similarly, CJMQ-FM in Sherbrooke, Quebec, is trying to cover all of the Eastern Townships using a blend of technologies, including SHOUTcast and cellular Internet—which you just plug into your computer—to broadcast live from people's homes and local community events.

New media are also important for recruiting and retaining younger volunteers and listeners and for expanding listening audiences to other parts of Canada and other countries. This is especially the case for third language and specialty programming, a backbone of many of our stations.

Most campus and community radio stations operate on whatever funds they can raise from their communities. Canadian Heritage has funding available for every kind of community media—print, television, film, and new media—except community radio. This means there isn't a lot of money to adopt these new media technologies, to buy and maintain the necessary equipment, and to train the staff and volunteers to use it, even though it would expand audience access and the potential pool of volunteers. For instance, CKUW-FM in Winnipeg would love to be on iTunes' automatic list of campus stations, but their current web stream can only accept 12 listeners at a time, due to bandwidth limitations. They have insufficient funds to increase their station's bandwidth, and iTunes demands a bandwidth of at least 300.

Station staff--some stations don't have any--juggle a lot of responsibilities and often rely on volunteers for technical initiatives, which makes these projects inconsistent and vulnerable to disappearing when volunteers leave.

Further, there is great uncertainty about the copyright tariffs our stations might incur through their new media activities. Copyright collectives have been proposing new tariffs that may apply to our sector's activities, including digital storage of music, audio and video web streaming, and podcasting. Proposed tariffs can also apply retroactively, creating fear of an even larger future bill. For some stations this means it may not be worth taking the risk of using these new technologies, no matter how well they serve their communities.

It is also worth noting that our stations see new media as complementary to what they already do, not a replacement, so they don't want to cut back on current operations to fund new ones. Some listeners do not yet have reliable access to online media. These barriers may include poverty, lack of familiarity with technology, and remote locations without affordable access to high-speed Internet. These are some of the communities best served by our stations, and we wouldn't want to lose them.

The fact that our stations are in accessible physical locations in their communities is another important part of our service. To be entirely virtual is not the dream. Right now you can drop into the studio, receive training, and meet other community members at the station, regardless of how you access the content.

Based on everything I have just talked about, we have three main recommendations. The first one is inclusion. We recommend that community radio be recognized as part of the new media landscape and included in all discussions about its future, including funding initiatives like a potential ISP levy, and consultations on industry standards.

The second is copyright. We respect the right of producers to protect their material from unfair distribution or services that profit at their expense, but we feel that community radio and other non-profit community access media should be exempt from paying copyright tariffs. This is based on the fact that no profit is earned from the use of that copyrighted material, and significant exposure is gained by emerging Canadian artists on our stations.

This can be addressed by inserting provisions into the Copyright Act to exempt not-for-profit broadcasters from copyright tariffs, or fix a low annual flat rate for such tariffs. For example, paragraph 68.1(b) of the Copyright Act limits the neighbouring rights collective of Canada copyright tariff for community radio stations to $100 a year. We feel that's fair.

Third is financial support. Funding for community radio translates into support for community-based new media initiatives. In partnership with our colleagues at the francophone community radio associations, ARC du Canada and ARC du Quebec, we founded the Community Radio Fund of Canada, an independent organization that aims to support local community radio. We have strongly encouraged the CRTC to direct some mandatory Canadian content development contributions by commercial broadcasters to that fund. We further asked the CRTC--and today I ask you--to recommend to the Treasury Board that 1.5% of the part II licensing fees commercial broadcasters pay to the federal government also be directed to the Community Radio Fund. That works out to about $1.5 million annually. So the return on investment is huge.

Finally, we ask for the Department of Canadian Heritage to create a program that would direct roughly $4.2 million a year to the Community Radio Fund of Canada to help support our sector. We came up with that figure because there are roughly 140 stations across Canada, and $30,000 per station is roughly a full-time equivalent. We don't necessarily make a lot of money. This commitment would fit with the department's current efforts to help other types of community media. It would also mean that every station could increase their new media capacity, whether by training, hiring a dedicated staff person, or purchasing new equipment and software.

We are pleased for the opportunity to work with the government to ensure that Canadian cultural industries like community radio continue to thrive in the new media environment and that all Canadians have access to these emerging technologies.

Thank you.

[The Chair, Conservative, Gary Schellenberger]

Thank you very much.

We will now move to Telefilm Canada and Ms. Brabant.

[Carolle Brabant, Executive Director, Telefilm Canada]

Good morning, Mr. Schellenberger and honourable members of the committee. I am pleased to be here. Joining me today is Dave Forget.

Our cultural industries are undergoing one of the most important transformations since the invention of the printing press. The study you are conducting is critical to understanding our future as creators, producers, and cultural administrators in Canada and on the world stage. We are happy to be participating in this process and contributing to your work.

Telefilm Canada's mandate is to foster and promote the growth of the audiovisual industries. For over 40 years, Telefilm has helped develop the growth of a robust and sophisticated independent production sector in Canada. Led by passionate, highly skilled entrepreneurs, our industry is highly valued and appreciated around the world. Today this industry is part of a bigger engine. As Minister Moore often says, Canada's creative economy contributes $46 billion to our GDP.

Two of the most powerful drivers of growth in the cultural sector are digital technologies and expanding Internet use.

Today Telefilm manages programs worth approximately $450 million, of which $350 million is on behalf of the Canada Media Fund, and the rest is through the Canada Feature Film Fund and international activities.

This is my first appearance before this committee and I would like to leave you with three observations.

First of all, I am privileged to be the head of this agency at a pivotal time in the industry's evolution—a time of great upheaval, but which I prefer to think of as a time for inspired innovation.

In the words of British writer and former film and television executive John Newbigin, “with every passed cultural shift we may feel that we are in a state of anarchy and uncertainty about where all this is going. But we ought to draw some comfort from the fact that actually in the course of human history we have been in this situation many times before”.

And the constant has been our appetite for a good story. What changes is the form in which we want them to be told. In each of the cultural industries, established business models have unravelled at lighting speed—and just as the music industry was transformed by MP3 delivery so now the audiovisual industry is facing extraordinary challenges. Surprisingly, some of the largest players have seen their revenues tumble and entirely new companies have sprung up to redefine the playing field. YouTube, Netflix, iTunes and Hulu—are some of the new players in this space. Will they still be around five years from now?

Data's infinite mobility and the Internet's capacity for perfect and instantaneous reproduction without marginal costs have provoked cultural industries around the world to think differently about what they are selling. Is it the song, the book or the movie? Or is it the community experience, the live performance or access on demand? Companies must now consider what consumers want in a “people-driven economy” and learn to create new business opportunities out of disruption. Mobile Internet will only accelerate these trends.

In one month last year, 25% of Americans reported viewing a short video on their phone. Mobile reading has also taken off, with Kindle books making up 35% of sales at Amazon. Apple recently announced that it sold one million iPads in 28 days. It took 74 days to sell the same number of iPhones.

An feature film is not immune to these changes. Fifteen per cent of the world's modern cinema screens are now digitized, and 55% of those digital screens are also equipped with digital 3D.

Perhaps even more profound is the recent proliferation of downloadable movie sales. Today iTunes is the single largest seller of digital movie downloads in the world and Canadian films are among them. One Week, for example, made iTunes Canada's top ten. Will iPads be to movies what iPods were to music?

My second observation is that now more than ever we—the government, funding agencies, broadcasters and the industry—have to work together to ensure that Canadian culture thrives in the multiplatform reality.

Telefilm Canada has always worked closely with the industry anticipating change and helping the industry adapt. Twelve years ago, Telefilm had the foresight to launch a pilot program for interactive media, a precursor to the Canada New Media Fund. Just like we did then, we are pleased today to be administering the Canada Media Fund, a forward-looking initiative which will drive further innovation for the benefit of Canadian audiences. Telefilm's role is to ensure that Canadian producers are able to innovate and experiment in every way possible in order to reach and build audiences for their products—wherever those audiences may be.

It took radio broadcasters 38 years to reach an audience of 50 million, television 13 years, and the Internet just 4. And in less than 8 months last year, 100 million people joined Facebook. Ironically, it is easier than ever to access a large audience, but harder than ever to connect.

That's why we at Telefilm are focused on supporting Canadian companies to innovate in digital marketing and distribution. Earlier this year, Telefilm launched Web-Ciné 360 in Quebec, a pilot initiative that supports innovative web-based promotion of Canadian feature films in advance of their theatrical release. We want to help distributors develop Twitter, Facebook and other social media tools to build as much buzz around a film while it is still in production and right up to its release date.

Many questions remain with respect to how to construct deals so that creative projects have the greatest opportunities to connect with audiences at multiple points. There is no magic bullet but one thing is certain: Telefilm plays a critical role in helping producers navigate an increasingly complex environment.

We are also helping the industry leverage the power and reach of Canadian broadcast platforms. Canadian broadcasters continue to play a key role in aggregating audiences for Canadian feature films despite audience fragmentation. To this end, Telefilm has embarked on a series of partnerships with Canadian broadcasters including the CBC, Rogers, CTV and APTN. We are also committed to ensure that Canadian feature films are available on all exhibition platforms, including the broadcasting platforms regulated by the CRTC.

We cannot lose sight of the eventuality that gradually all content will probably be available online and on demand. We are encouraged by initiatives such as Quebecor's Éléphant: mémoire du cinéma québécois, Radio-Canada's TOU.TV and of course the NFB's online screening room. These initiatives make a treasure-trove of Canadian programs and films accessible to Canadians.

My third and final observation is that while digital technology has made the world smaller, more than ever, international relationships are critical for the financing and distribution of audiovisual products and the survival of our companies.

Telefilm Canada has a long and impressive track record assisting Canadian companies to exploit film and television markets internationally. Even in the online environment, Canadian companies must have access to foreign partners to leverage opportunities afforded by convergent markets abroad. There are many additional factors that need to be taken into account, and these include the basic economic costs of producing, pre-sales, film rights, and distribution.

Telefilm, along with our departmental and industry colleagues, is working to align the existing international co-production certification guidelines with current global realities. Furthermore, we are also undertaking a strategic review of our international programs and initiatives to ensure that we maximize the opportunities for Canadian companies to attract foreign partners, to penetrate new markets, and to exploit opportunities in an increasingly convergent digital marketplace.

In conclusion, we recognize that we are no longer in a world that is simply about the power of narratives at the cinema or on television; we are in a world of powerful interactive environments accessible on every conceivable and convenient device possible. In this dynamic environment, the variables are constantly changing. What we know for sure is that the power of great storytelling will not be enough by itself to sustain a vibrant, productive audiovisual sector. Hopefully, we have learned from the experience of the music industry and are ready to capitalize on the many digital media opportunities to connect with Canadians.

Thank you.

[The Chair, Conservative, Gary Schellenberger]

Thank you very much for that presentation.

We will move now to the first question, from Ms. Dhalla, please.

[Ruby Dhalla, Liberal, Brampton—Springdale, ON]

Thank you.

Thank you, to all of you, for coming before the committee today. Your presentations were extremely insightful and helpful to us.

I have a couple of questions, first of all, for Telefilm.

From the time you were created in 1967 until now, I know there have been a number of changes in terms of demographics and also your mandate, role, and vision.

When we take a look at StatsCan, some of the results that have come out are that two-thirds of Canada's population are going to be visible minorities in the next 20 years. What types of initiatives are you undertaking right now to prepare to reach out to the multicultural demographic of our country, and also to engage people from different ethnic communities to get involved in the process?

I know, having worked with Deepa Mehta, that she has had great support from Telefilm, from the Indian community in particular, to ensure that her films have a national and international platform. What other initiatives are under way to build those partnerships and bridges?

[Carolle Brabant]

Telefilm Canada has always been very present. This is one of its key features, in fact. Its mandate is to promote and develop the audiovisual cinematographic sector in Canada. Telefilm Canada has always had a very strong presence in the regions and in all of Canada's communities. We have always wanted to give a great deal of importance to the stories and reflections of Canadian society, in all of their aspects.

You gave the example of Ms. Mehta, a director and producer we have always encouraged. We have also launched some initiatives for Canada's aboriginal communities and we are funding products in Canada's official languages. Since we are really very well represented in the regions, I think that we can project the reflections of Canadian society with the products we fund.

[Ruby Dhalla, Liberal, Brampton—Springdale, ON]

In terms of the younger generation and the younger population within some of the ethnic communities, they feel that there are a number of barriers and challenges in getting to where they need to go to become the Deepa Mehtas of the world. Does Telefilm have any programs under way right now to help encourage them?

When we talk about the study this committee is taking a look at, we need to know from you what tools and resources we need to bridge that gap so that we can give these young kids hope that there is an opportunity for them to go out there to become the producers and directors that create the content we need.

[Carolle Brabant]

Even though we have programs that are designed for experienced producers, we also have programs for newcomers. It's very important, because with the tough decisions we're making in picking the projects we're going to be financing, we consider it important to encourage incoming talent. We also have programs designed to train them and help them, particularly in dealing with this industry. We have training programs. We have programs that are particularly designed for newcomers,as well.

[Ruby Dhalla, Liberal, Brampton—Springdale, ON]

Shelly, I know you mentioned some recommendations. And I want to congratulate you for making an excellent presentation.

I know that the work you're doing across the country is very well received by the communities. As I always say, as the demographics of the country are changing, people are no longer watching some of the mainstream channels. They're really listening to their radio programs in their own languages and they're reading newspapers in their respective languages, which they feel they can connect to. You guys are doing a great job on that.

What is one recommendation you would make to the committee, on all the issues you've discussed, on what government needs to do in terms of providing you with the resources and tools you really need to succeed?

[Shelley Robinson]

Do you mean beyond the ones I mentioned to you?

[Ruby Dhalla, Liberal, Brampton—Springdale, ON]

Out of all the ones you mentioned, what is the one thing you would like to focus on or highlight for us?

[Shelley Robinson]

I'm sure there are many community organizations that come. We all need the same thing, and that is funding. For Telefilm, but also for the other presenters, we're already doing a lot of the things you're looking for, as you said. What we need is the capacity to do them and to continue to do them without being at risk. Our stations are very vulnerable. The community stations rely on community support and also on local advertising. When the economy is going bad, it's harder for them to get local advertising. That local advertising is also a service to the community. We don't want to take away the fact that we rely on our communities for some of our support, but we need additional support so that we know that, okay, we can survive, and now we can grow and do more of these things.

[The Chair, Conservative, Gary Schellenberger]

Thank you.

We'll move on now.

We'll go to Madame Lavallée, please.

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

Thank you, Mr. Chair. First of all, I would like to make a brief comment to Ms. Robinson.

I was quite surprised by your suggestion that you be exempt from paying royalties, on the grounds that you are a not-for-profit organization. I must tell you that this suggestion makes me feel uncomfortable, because I sincerely believe that artists must be paid for their work, regardless of where it is exposed. I am quite concerned that, if you were ever to get such an exemption—something I hope will not happen—you would be cutting off your own oxygen supply, the content. I would suggest that you think about another way to deal with royalties.

Ms. Brabant, first and foremost, I would like to congratulate you on your appointment. We never have enough women of your calibre in key positions.

I was very pleased with your testimony. I have several questions that I am going to ask you all together. As you will see, my questions are of various kinds. You can put the focus where it suits you best.

[Some honourable members]

Ah, ah!

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

First of all, let us talk about your requirements and suggestions for a global digital strategy. What requirements does Telefilm Canada have? What suggestions is it making to the Canadian government? Does Telefilm Canada have everything it needs or does it require some assistance?

You said that the audiovisual sector is doing well. However, this week, Le Devoir reported that jobs in the cultural sector had been hard hit. The Institut de la statistique in Quebec showed that there had been a decline in jobs both in Quebec and Canada, specifically in the audiovisual sector.

My third question pertains to co-productions. Witnesses have told me that there is a problem with co-production. Setting two dates per year does not enable them to negotiate with international producers. They have to make these producers wait too long. For example, if a big French producer wanted to negotiate something today, you would have to tell him to wait until September. That is a problem.

You also said that the power of a good story is not enough. Earlier, during a meeting of the Standing Committee on Industry, Science and Technology, the person sitting where you are, a professor from Alberta, said that, when you have a good story, it always works. In his opinion, the cultural industry did not need assistance. I am, of course, summarizing what he said.

Finally, you did not make any mention whatsoever of foreign ownership. Yet this is something that concerns us a great deal. What impact does foreign ownership have on the telecommunication sector—which, we are told, is becoming increasingly more difficult to dissociate from broadcasting—or satellites?

I think that you have one minute to answer these questions.

[Some honourable members]

Ah, ah!

[Carolle Brabant]

I will begin by answering the question...

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

You have seen my interest.

[Carolle Brabant]

You are passionate.

First of all, I will answer your question about the comprehensive strategy. As participants who were here before me have said, in order to have a good strategy, you first need to have a vision and indicate the objectives of this strategy. In my opinion, this is what is essential in order to then be able to realign programs and resources to ensure that everybody is working in the same direction.

For me, the key in an environment that is so changeable and complex that we do not know where we are heading... We have all seen a host of changes, but the direction we take or the result of all these changes is not necessarily specific. Given that situation, it is very important that we work together, headed in the same direction. However, the strategy of establishing objectives and a direction so that we can all head the same way is extremely important.

In my comment about the power of a good story, I was not underestimating that power in any way. I think that is the key. When you look at all of the changes that have taken place in the audiovisual sector, and if we go back in time to the days of prehistoric cave drawings, we realize that we have always wanted to tell each other good stories. This is extremely important.

In such a changing universe, with distribution methods that too are changing and transforming so much, it is important that we give our producers—who are creative and inventive entrepreneurs, and who have brought the sector to the point where it is now—the tools so that they can take advantage of the opportunities provided by this environment.

[The Chair, Conservative, Gary Schellenberger]

Thank you.

Mr. Del Mastro, please.

[Dean Del Mastro, Conservative, Peterborough, ON]

Thank you, Mr. Chairman.

I want to thank the witnesses for appearing today.

I think this is a very important study. We're hearing some great testimony here today, as a matter of fact.

Ms. Robinson, you're the first witness to talk about radio. I think radio is true local content. One of the things that's actually coming out is that all platforms are merging. There's quite a bit of transformation going on. To your point about FM, I think that as we move forward, FM bands generally will become less of an issue because I don't think that's where people are going to listen to the radio in the future. I think it's all moving towards a converging platform. I think that's the future.

Where do you fit in, in the mix of digital platforms, and how do you see college radio or radio in general, if you feel so inclined to remark on that? How do you see that fitting into the new emerging platforms? Where do you think the opportunities are for radio? Where are the challenges?

[Shelley Robinson]

I'm going to limit my comments not to radio but to community and campus-based radio.

I think you could be right; FM might become less and less important. That being said, I think there is always going to be a need for community centres, where people can come together and produce content. I'm sure you haven't heard a lot about radio, but you probably have heard a lot about content. Basically we're all doing a version of that. You know there's this idea that with YouTube and with podcasting, why do we need community radio? We had these centres because people came there and it was because it was too expensive to have the equipment themselves.

In fact, there's that stereotype about the guy in his basement podcasting, and it's true. He's sending out something, but who is listening? When you have a community centre, that's where people can come to. I just think that where we're going is a version of where we're at, which is that we have a space where people know. It's a trusted, credible community access centre, whether or not we do it online or FM or continue to do both of those.

In terms of keeping FM, something that a lot of our smaller rural community stations are doing is emergency broadcasting, which is huge. Last year, CHLS, which is in Lillooet, got to do emergency broadcasting when the forest fire evacuations were happening.

It has happened in the States where Clear Channel bought up so many stations that people didn't know when there were emergencies in their own communities, because they were hearing a national broadcast. Our stations are grounded in their community, so whatever happens, they're going to be there to say this bridge is closed and don't go here, and all of those things. I think that's where we're going. We're not sure about what the content is, but we're sure about what we do and how we want to do it.

[Dean Del Mastro, Conservative, Peterborough, ON]

It's interesting. I couldn't agree with you more. It's the local part of radio that I think is really the draw in radio.

I can tell you, my wife had a new car with satellite radio in it, and it came with a year of free satellite radio. It was really great. You had great reception. If you drove for eight hours, you could listen to the same station. The problem was that I wasn't getting any of the local flavour of that back. I really think that's the missing component of it. I think that satellite radio will continue to struggle as long as that's the case.

Do you see an opportunity to bring that ability...? I know, for example, Apple has this with their iPhone. They have an application where you can digitally get local radio wherever you go, so you can listen to it if you're in.... In fact, I was listening to Pierre Bourque on 580 CFRA last week, and he was talking about being in Vancouver and listening to 580 CFRA. So he could keep up with what was going on in Ottawa. I mean, who doesn't want to listen to Lowell Green and the “Island of Sanity”? I think everybody would have to agree with that.

But I do think that's the missing component on satellite radio, and I think it's the opportunity for campus radio. I think the opportunity for radio is to look at these emerging platforms and be able to offer local content wherever you are.

[Shelley Robinson]

That doesn't ask us to change our model; it just asks us to maybe adapt our method of distribution. We're already doing a version of that. If we want to continue to do that, we need the funding to help make it happen--just to bring it back around.

[Dean Del Mastro, Conservative, Peterborough, ON]

Thank you very much.

For the record, there is nothing wrong with Charles Adler or John Oakley either, Mr. Chairman. I just want to make sure that's on the record.

[The Chair, Conservative, Gary Schellenberger]

It's on the record.

Thank you.

Mr. Simms, please.

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

You forgot to add, “I'm Dean Del Mastro and I approve this ad”.

I'm just kidding you, Dean.

CHEX is one of my favourites.

First off, I want to make a point that I am an alumnus of one of your stations.

[Shelley Robinson]

Which one?

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

CHMA, Mount Allison University. It actually started my career.

[Mike Wallace, Burlington, CPC]

What was your tag line for the show?

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

“I'm six-foot-six because I'm behind the mike.”

[Voices]

Oh, oh!

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

I would correct one thing. I never considered what I did there to be local radio; I would call it community radio.

When I started, though, it was more of a university thing. I got experience. My degree was in something entirely different from broadcasting, but I ended up getting a career in broadcasting because of that station. A lot of us did. I'm from the same station as...well, a whole bunch of broadcasters. I won't get into that, but it launched a lot of careers.

What was transitioning with this station was that it was becoming a station for community involvement, and more people from the community came in. Right now, this particular station that I mention is doing a community concert every year, which is very popular, called “Stereophonic”.

The whole point of it is this. You make some valid points, I think, about copyright, but it really comes down to the fact that you need that revenue. A lot of stations are in that position where they always relied solely upon the university, but now you're becoming much more than that. You seem to be filling a niche.

I like the examples you brought about how you're getting involved in digital media, but it's expensive to do.

For just a short answer, what are some of the best ways you've seen thus far to actually create revenue by what you do?

[Shelley Robinson]

To create revenue? It depends on the station. For campus stations, a major chunk of their funding is often by student levy—CHMA, for instance. This means that the students give so much out of their tuition towards it.

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

Yes, I understand that, but let's go beyond that now and see what in the community is available for them. Are they buying into this?

[Shelley Robinson]

Yes. We have funding drives. CHUO, here in town, had a funding drive, and they are almost at $40,000. CKCU, also in town, raised $108,000. CJSW, in Calgary, raised $200,000 from their community in 10 days—just people calling and saying, “Yes, I'll give you money.”

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

Okay, but I guess the biggest thing is that as you enter the digital age and you try to be as relevant in light of satellite radio and things like that, you really need a lot of your cost structures reduced. In other words, you need to put yourself in a different category than what standard commercial broadcasting is through satellite or other local radio. Would it be fair to say that?

[Shelley Robinson]

I'm not sure I totally understand your point. We need to be in a different category...?

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

In other words, you have to be put into an exemption status in certain areas.

[Shelley Robinson]

Oh, yes, that's true.

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

All right. Thank you.

You say:

Telefilm, along with our departmental and industry colleagues are working to align the existing international coproduction certification guidelines with current global realities.

I'm a fan of a lot of co-productions, particularly when it comes to the ones filmed in my area, which would be Newfoundland and Labrador. We've had a few successful ones. I'm also a fan of a current co-production television show, The Tudors. But I don't wait to see it on the television broadcaster on a certain night when it's considered a broadcast. I'm an e-caster. It shows up in my inbox the next day.

In regard to the certification process for co-productions, how involved are you in this, in distributing this material? If a producer or creator is worried only about a good story, it must be hard for him or her to grasp what digital realities are out there.

There are two questions in there. I apologize. The first one would be about the certification process; the second part is, how hands-on are you about distributing the material of a particular creator that you're involved with?

[Carolle Brabant]

At Telefilm, we are administering the certification process for the Department of Canadian Heritage. That's our involvement in the certification process. We're responsible for the guidelines, and we're responsible for recommending the decisions to the Department of Canadian Heritage on the co-production.

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

Tell me about a typical roadblock in the certification process.

[Carolle Brabant]

I will pass the microphone to Dave for that.

[Dave Forget, Director, Contracts and Certification, Telefilm Canada]

Essentially the 53 or so bilateral treaties that Canada has with other jurisdictions call for a certain balance between the creative contribution in front of and behind the camera and the financial contributions from the participants, and those can include third-party financing as well.

Essentially we're going back to the treaties and administering the guidelines to ensure eligibility vis-à-vis projects complying with those balances. So we're looking for a partnership between our Canadian producer and our international producer that respects the specifics of the treaty, depending on the country we're dealing with, vis-à-vis the balance between the financial contributions of both sides. For example, there are minimum contributions. To give a short answer to your question, in the U.K.-Canada treaty, the minimum would be 20%. So if the Canadian contribution were less than 20%, it would be offside. There's a balance between the financial and talent--call them contributions--on both sides, and that's essentially what we're looking at. That has to do with the key positions creatively. That has to do with the financing structure, and it has to do with making sure there's a genuine collaboration in partnership. The notion is that the partners combine to bring more to the project, whether that be more financing, more creative talent, or any of those things.

[The Chair, Conservative, Gary Schellenberger]

Thank you.

We've gone a little over time here. Mr. Simms always does that to me. He asks a big question right at the end.

Mr. Pomerleau, go ahead, please.

[Roger Pomerleau, Bloc, Drummond, QC]

Thank you, Mr. Chair.

Thank you all for coming and making your presentation today.

I would like to make a comment intended for you, Ms. Robinson. I share your love for community radio, I have community radio in my riding as do nearly all my colleagues here. I can see that these are hardworking people. They often learn a trade. They serve a clientele that cannot be served otherwise and they are always pulling their hair out when it comes to money. I am convinced that we need to deal with this issue. I am very sympathetic to the idea of providing all the stations in Canada with annual funding, but I am not the one making the decision.

However, when it comes to royalties, I really liked the example that my colleague gave when she talked about cutting off your own oxygen supply. Here, we must stick with the assumption that, that if we do not allow our creative people to make a living, if we cut off their source of revenue, which is not very big—most of them are more or less in the same situation as you are—they will all die. Unfortunately, this is not an option; we are going to have to come up with another solution, but I do not know what it is. That being said, I agree with you—we have to do something.

I have a question for Ms. Brabant or Mr. Forget.

Many groups have come here to discuss the problems they have in obtaining funding for their activities. I would like to hear your opinion and your suggestions on the subject. That is my only question.

[Carolle Brabant]

We have an environment that provides many opportunities. We have a very active industry. We have producers who are active entrepreneurs who have brought this industry to the point where it is now. So, right now—our colleagues from the CFTPA may have provided you with the exact number—a large number of producers in Canada engaged in significant activities. I am not surprised to hear you say that these people have come here to make their case that they do not have enough funding.

I would like to make one comment. At Telefilm, we are very pleased that, in the latest budget, the government has kept funding for organizations that work in the cultural sector, including Telefilm in particular. This is a very important issue for us.

As the Executive Director of Telefilm, I have a duty to ensure that I administer these funds as efficiently and effectively as possible. The key, in my opinion—and this is part of my priorities—is to try to find partners in order to do more with what we have, to be a better financial lever in order to seek out international partners, in particular, and national partners as well.

In fact, Telefilm is very active internationally in order to try and increase the number of co-productions. We have specific activities in the television market, for example, where we match Canadian producers with international ones in order to encourage new co-productions.

We always have ways to measure our involvement. Last year, every dollar invested internationally in the MIP market yielded $13 in sales internationally. I think that this really is one way to have better financial leverage.

[Roger Pomerleau, Bloc, Drummond, QC]

Thank you.

[The Chair, Conservative, Gary Schellenberger]

Last question, Mr. Wallace.

If you can you keep your questions short and concise, that would be great.

[Mike Wallace, Conservative, Burlington, ON]

I will be very quick because I know you're out of time. Thank you, Mr. Chair.

I'm not normally part of this committee. I'm filling in today. I'm normally on the industry and finance committees, and at the industry committee we're talking currently about opening up the telecom business to allow for foreign investment and so on, and there are some issues about culture and copyright and those kinds of things. There will be a copyright bill coming, I'm assuming to the industry committee, but it might be coming in conjunction with this committee. I'm not sure.

Can you just tell me now, as a not-for-profit radio station, how is copyright handled under the present system?

[Shelley Robinson]

Our stations pay SOCAN fees.

[Mike Wallace, Conservative, Burlington, ON]

Is that the full amount?

[Shelley Robinson]

I'm fairly confident that we have a reduced rate, but I would have to check.

[Mike Wallace, Conservative, Burlington, ON]

You don't know for sure? You know it's a reduced rate--

[Shelley Robinson]

This is my first week as executive director.

[Mike Wallace, Conservative, Burlington, ON]

Congratulations on your new job.

[Shelley Robinson]

That's why I know so much about the members because I used to be a membership coordinator.

I'm pretty sure we pay a reduced rate. They pay a Canadian Musical Reproduction Rights Agency, CMRRA, tariff, and that is a reduced rate. The NCCRA members negotiated a deal with them. There is SOCAN, CMRRA--I would have to get back to you.

[Mike Wallace, Conservative, Burlington, ON]

With my last 30 seconds, on the real purpose for your coming here.... I'm on the finance committee and I see 400 or 500 groups a year. I can give you, on one hand, who does not want more money. I understand that piece.

[Shelley Robinson]

I believe it.

[Mike Wallace, Conservative, Burlington, ON]

You're telling us today that to be able to take advantage of the new digital media that are there...and I actually listen to satellite radio, contrary to my friend here. It's a four-and-half-hour drive here, and I listen to seventies music and sing, so if you see somebody driving along and singing their heart out with the windows up so you can't hear it, that's me.

[Dean Del Mastro, Conservative, Peterborough, ON]

They have a place for people....

[Mike Wallace, Conservative, Burlington, ON]

Yes.

Is it because you can't afford the hardware, the systems to get on? Is it the expertise?

[Shelley Robinson]

It's the package, and in some cases people are coming up with cheap solutions. In fact, in general, on the text stuff, the actual physical stuff, a lot of our stations are pretty good at cobbling together unique solutions. What we don't have is the people power. As I said, those YouTube charts are amazing; they were really great and then they stopped, because the guy who did them left that station.

What would be great is to have the capacity to make sure that when we start something, we can continue that thing.

[Mike Wallace, Conservative, Burlington, ON]

Thank you.

Scotty, my friend was on CFRU. It was “Points of Inflection” with Stephen Fleck. It was very good.

I was hoping for something solid from you. Thank you very much.

[The Chair, Conservative, Gary Schellenberger]

Thank you very much for your presentations and your answers today.

The meeting is adjourned.