Canadian Heritage Committee on May 13th, 2010

[John Levy]

It's a belief in general. As I said, I've been hammered as a small cable guy. I've been hammered on both sides. We've lived that experience. We've struggled for access as a TV channel.

When I was a cable guy, I was able to put my own channel on channel 18, just like everybody else, but then, when you're not in that particular situation, you get channel placements, and we're becoming less and less significant, but.... So you just want to make sure that there's no preferential treatment, basically, and that's what we're talking about.

Quite frankly, our commission, the CRTC, is set up to make sure that stuff like that doesn't happen. Yes, there is some self-interest in this, clearly, but the reality is that I could be talking on behalf of everybody. It becomes more and more important as this universe opens up, because everybody can play in this universe now.

[The Chair, Conservative, Gary Schellenberger]

Thank you very much.

Mr. Del Mastro.

[Dean Del Mastro, Conservative, Peterborough, ON]

Thank you.

Thank you to both witnesses.

I've got to tell you that I listened intently to your presentations, and I thought it was the most interesting testimony I've heard on this since we had Jacob Glick here from Google. I think it's really important that we put this into the proper context. This is all about looking toward the future. It's not about where we are right now.

We really have to as a committee, I think, and certainly as a government, look to where things are going, not where things are. And where things are is in flux. Old models are looking for walls to be put up. They're looking for old systems to come to bear to maintain them. Frankly, new models are reaching well beyond Canada's borders, and that is really what's driving this enormous....

You talked about the long tail, which is something that Jacob Glick talks about. I've read the book on it, and I think there's no question that models need to be redesigned to look at where things are going. I think that ultimately if this committee is going to put something forward that will really benefit artists, really benefit Canada's cultural scene, and allow us to build more strength, then we're going to look to the kinds of suggestions that you're making here today.

Mr. Jenkins, you talked a little bit about the under-25 crowd. I don't know if you're finding this; with conventional formats, over-the-air television is still very strong, but the way that people are actually consuming over-the-air television is changing. People still read what reporters write in newspapers, but the way that they're reading it is changing.

Are you seeing any evidence that it's actually spreading beyond? It started with the under-25s, but I'm getting a little closer to 40 than I care for, and what I'm starting to find is that I'm using all these models now. They started with it, but it's actually spreading the other way. It's not top down, it's actually bottom up. The kids are using....

Yes, I'm under 40, Mr. Chair, thanks.

So I'm actually seeing evidence that people older are actually picking up on all this new stuff, and what we may see, quite differently from what we used to see, is this stuff spreading upward as it becomes easier to use and more accessible.

[Tom Jenkins]

I couldn't agree more with what you said. Let me relate some of the experiences we have had, because when we're not doing the cultural industries, we have to build knowledge systems for the BMWs and the Coca-Colas of the world. We do this for hundreds of millions of people.

I would strongly encourage the committee to have someone come in who has been studying this, because we are now seeing studies showing the behaviour changes in 25-year-olds. Their brains are different. The physicality of their brains is now different. Kids, or those under 25, do not have memory ability the way we did. Their short-term memory is much smaller, but their ability to aggregate five or six pieces of information and integrate those is better than ours is. Their brains are different now.

There's no question, what you say is true. It's impacting the consumption of media, and it is moving up, because to stay relevant in society, the older people have to keep up with the ability to assimilate information or we will not be as productive as the others are.

I would like to add something to the comment on Google. People should realize that the most used website in the world is now not Google. It's Facebook, as of three weeks ago. This is a brutally competitive area. It is in tremendous flux.

You'd do well, when you are considering the future, to think of this as an evolutionary process and not as a piece of legislation at a moment in time. If you think of it that way, you'll get it wrong, because it is changing so quickly.

I would add to and confirm something you said and that I've seen in other areas: this is a tremendously emotional topic. We hold the past very dear, and the things that we grew accustomed to. I like paper still. I like to read the newspaper. But the reality is that the models are changing, and we owe a service to the country to anticipate those model changes.

[Dean Del Mastro, Conservative, Peterborough, ON]

I appreciate that, and I'm going to say to my mother, who constantly tells me that she can't remember anything, that she's actually got the brain of an under-25-year-old. Her short-term memory is failing her because she's actually become an under-25er.

Could you recommend anybody who's doing these types of studies, or could you get back to us with that?

[Tom Jenkins]

Sure. I'll forward several for the committee to consider, absolutely.

[Dean Del Mastro, Conservative, Peterborough, ON]

That would be tremendous.

Mr. Levy, you talked about gatekeepers. This is really interesting stuff. In the past, we used gatekeepers for all sorts of things. The CRTC is a gatekeeper, right? It dictates what content is in Canada. It tells people how they can operate. It issues licences. It is a gatekeeper of the existing media platforms.

I'm not going to put words in your mouth, but you talked about the opportunity for Canadians, and for culture, and for companies such as yours to be able to operate in an open environment without gatekeepers. Can you talk a little bit about that? Can you expand on that?

[John Levy]

Just to clarify--

[The Chair, Conservative, Gary Schellenberger]

I don't want to interrupt, but you have about a minute and a half to answer, sir.

[John Levy]

Okay.

That's an important one, because I have to appear before those guys at the CRTC on a regular basis. When I'm talking about gatekeepers, I'm really referring more to people in business, the parties that are represented in front of the commission. The commission, the CRTC, is really struggling with these issues. They're trying to deal with how to manage the gatekeepers rather than being the gatekeepers.

The CRTC was just trying to establish policy and rules from within the Broadcasting Act and try to.... Quite frankly, if it weren't for the CRTC, we wouldn't be here today.

[Dean Del Mastro, Conservative, Peterborough, ON]

I actually think our next step as a committee beyond this is to take a look at the Broadcasting Act. I think we have to look at a 21st century model. As I've said before, the CRTC is kind of the king of the sandbox, but the sandbox is now in the middle of the beach, and it's becoming a little more difficult to police.

I have nothing further.

[The Chair, Conservative, Gary Schellenberger]

Okay. Thank you.

I have a few things to offer, and I will do that in my own due time. I have talked to various people over the last few days, and I have some ideas that I will be putting forward to my analysts, which I've put forward before.

Thank you so much for being here this morning and being our first witnesses today. Your testimony was of real value to this committee.

We will recess for five minutes to change witnesses.

[The Chair, Conservative, Gary Schellenberger]

We'll call our meeting back to order.

Yes, Mr. Rodriguez.

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

I just want to make sure that we reserve some time when we come back to see where we are in terms of our agenda. If possible, I'd like to have a list of witnesses in the next weeks and to see what's planned, because I think there are only eight meetings left, and two of those meetings are taken by Lionsgate. We have to decide if we want an interim report, because we have to give directions to our analysts.

[The Chair, Conservative, Gary Schellenberger]

Mr. Rodriguez, I've just been informed that during the break, the clerk will bring forward a document to let us know where we are and who's coming in the next while.

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

Okay.

[The Chair, Conservative, Gary Schellenberger]

Madame Lavallée.

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

I wouldn't have wanted to interrupt the committee, but since it's already done, I'd like to say two things.

First, it seems that Mr. Ménard, our analyst, was unable to go to the Canada 3.0 conference. I have a suggestion to make on how to obtain the information. Perhaps you have one, Mr. Chairman.

The second thing is that, on Thursday, May 27, there won't be a committee meeting—I imagine everyone knows that—as a result of the visit by the Mexican president. So we have to take that into consideration in our calendar.

[A voice]

Pardon me. When is that?

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

In the morning of Thursday, May 27, President Calderón of Mexico, will be coming here. The proceedings of the House normally do not start until 2:00 p.m. There won't be any committee meeting in the morning because the president will be appearing in the House in the morning. With that in mind, perhaps we should take 10 minutes at the end to consider all these matters.

[The Chair, Conservative, Gary Schellenberger]

I will say again that the clerk will be bringing forward a document, and we can go forward from there. I know we talked about an interim report, or something like that coming down the road. I think Mr. Jenkins did say here today that he would get those reports. So those reports from the 3.0 conference held in Stratford over the last two days are going to be available. When they come forward, I will personally try to keep in touch to make sure they get distributed to the group. We started a little late, I think, in getting Mr. Ménard to that conference. So next time, we'll start earlier.

Thank you.

I welcome our next witnesses. We have, from the Canadian Conference of the Arts, Alain Pineau; and from the Canadian Association of Community Television Users and Stations, or CACTUS, Catherine Edwards.

If you can keep your presentations to around 10 minutes, we would appreciate that.

We would ask Mr. Pineau to go first.

[Alain Pineau, National Director, Canadian Conference of the Arts]

Thank you, Mr. Chairman.

Members of the committee, my name is Alain Pineau. I am National Director of the Canadian Conference of the Arts, the oldest and biggest umbrella organization in the culture, arts and heritage sector in Canada.

The CCA's mandate is to foster informed debate on all federal policy and regulatory issues that concern this broad sector in one way or another. We are pleased to see that the debate on the need to develop a national digital strategy is at last being conducted in the public arena. We are concerned that it is focusing on not only economic, but also social and cultural issues as well.

The current debate too often focuses on infrastructure and its financing, and not enough on what is being conveyed by the new platforms, or on the interests of those who develop cultural and other content. We are therefore delighted that you, first, and the government, this week, have expanded the conversation and that you are looking into these fundamental aspects of the debate.

The advent of digital technologies has changed the way in which artists produce and the relationship that institutions have with their public. Interactivity is overturning business models and changing the ways in which cultural products are consumed.

The arts and culture sector wholeheartedly embraces the new possibilities created by digital technologies. Many individual artists have adopted them to produce performance arts and to otherwise meld technology with traditional artistic tools.

Beyond the use of digital technology in arts creation lies the impact of broadband, Internet, and wireless on its promotion and distribution. Individual artists, as well as galleries and museums, are able to digitally demonstrate the artists' creations. Some of the more innovative artists and institutions are reaching a far greater audience faster and more efficiently than before. The Internet offers new ways to engage the audience and to promote and process orders.

By the way, the democratization of production tools also raises interesting and fundamental questions about the professional status of artists and journalists. It is now relatively easier to produce a work of art and to make it accessible. Media outlets rely more and more on images and material provided by ordinary citizens, who report with mobile multi-tasking devices.

The upside of these new developments is that they encourage creation and participation. The downside is that they can debase the value of trained professionals' work, lead to the acceptance of lower standards, and, not to mention, threaten the livelihood of creators.

As many before us have said, the development of a Canadian digital strategy must be based on a new Copyright Act. There is an urgent need to acknowledge the importance of the intellectual property of those who develop content and to create a digital environment that encourages creation, distribution and protection of works. Our artists want to share their creations on the broadest possible platforms, but they must be able to do so in the assurance that they will receive fair compensation for their work, whether it be for online distribution or for transfer to other media instruments.

In this matter, we are in favour of extending the current private copy system. This isn't a tax, but rather a way as effective as possible to enable all Canadians to acquire the right to adopt the device of their choice to access legitimately acquired cultural products, while ensuring that the artist is compensated for his or her work. This is an important complementary measure to support the creation of content that, however, cannot replace the fundamental need for protection for the rights of creators through an update of the act.

Another aspect of the new reality is the fact that a number of users can take an artist's work and recreate new works. Once the work has entered the digital universe, it is possible to take it and make what's called a mash-up. It's important that, in developing a national digital strategy, the government include an innovative policy protecting copyright without discouraging the creativity that their works can in turn generate.

Let's now talk about training.

National Film Board commissioner Tom Perlmutter raised this issue very eloquently with you the other day, as part of his excellent call to action with regard to a national digital strategy. Artists and art administrators are more obligated to learn a diverse set of skills in order to compete on an open market. Those who have digital marketing skills and social media savvy will be able to promote, present, and professionalize their artistic practice. More attention must therefore be given to training young artists and creators, not only in digital skills but also in the basics of entrepreneurship.

A knowledge economy is a resource that will never run dry. Given the retiring cadre of professionals, we must invest in knowledge transfer programs, mentorships, and apprenticeships in cultural industries and in the arts.

Expanding digital literacy within the Canadian population is also an important part of a national digital strategy. This is why the CCA supports the creation of multimedia community centres, as proposed by the Canadian Association of Community Television Users and Stations.

I welcome the happenstance that we're together. It was not planned--on our side, anyway.

We view this as one of the pillars on which to build a truly democratic national digital strategy, and we urge you to include it in your report.

Canadians have a right to their culture, a fact recognized by years of public policy through government support of international agreements under the United Nations and UNESCO. Over the past 50 years, our governments have developed various support mechanisms to ensure Canadian cultural products and services are made available to Canadians and to the world at large.

In the new digital environment, such policies are more important than ever. The government must use all the tools at its disposal, whether through direct financial support, regulation, or tax incentives.

As mentioned by ACTRA and CFTPA in their presentations, it's important to expand and adapt previous policies to new realities. This is why we at the CCA continue to support increasing public investments in the creation of Canadian works, whether through existing institutions like the CBC, Telefilm, the National Film Board, the Canada Council, or through new instruments like the Canadian media fund. This is also why, for several years now, we've advocated extending the contribution regime in place for over-the-air broadcasters, cable and satellite operators, to the new distribution platforms like the Internet and wireless.

Finally, we insist that the government maintain in all trade negotiations its official position that cultural goods and services are not like other goods and services and must be kept off the table, lest our federal and provincial governments lose their capacity to adopt or modify the cultural policies that have led to the development of our arts and culture sector.

This leads me to my last point, which is foreign ownership.

For the past several decades, the operating principle in Canadian cultural policy has been that Canadian ownership and effective control of our cultural industries will ensure that more Canadian content is made available to Canadians. It's been deemed easier to regulate Canadian-owned companies than foreign-owned ones. Moreover, Canadians are more likely than non-Canadians to tell our own stories and to present our own views to the world based on our own values.

The absence of appropriate regulation in the movie industry is the best illustration of the negative impacts of foreign ownership and control of a cultural industry. Film distribution policy does not distinguish the distribution rights for the Canadian market from North American rights, for most of the largest distributors. As a consequence, foreign film distributors maintain a lock on the majority of the film screen distribution activity in Canada. Foreign films, namely U.S. movies, occupy over 98% of screen time in English Canada, while the situation is somewhat better in Quebec cinemas.

There is debate about the wisdom of opening up foreign investment and having eventual foreign control in telecommunications. The justification is that by bringing in more competition, we will achieve lower prices for consumers. It's difficult to be against this objective, but there are serious reasons to fear the consequences of the current backdoor approach to changing long-standing cultural policies.

The 2008 competition panel report recommended a liberalization of telecommunications and broadcasting investment restrictions “following a review of broadcasting and cultural policies including foreign investment”.

With due respect, we do not think that a handful of committee hearings here and at the Standing Committee on Industry, Science and Technology, where witnesses are limited to 10-minute presentations and questioning to five minutes, constitute an adequate review of broadcasting and cultural policies.

The chair of the CRTC recently stated before the Standing Committee on Industry, Science and Technology that:

any liberalized foreign ownership rules for telecom should give due consideration to the social and cultural objectives of the Broadcasting Act.... it is widely agreed that, given its economic importance

—and here I would add, its strategic and cultural importance—

control of the communications sector should remain in Canadian hands.

Foreign trade agreements may contribute to restricting Canada's capacity to adopt cultural policies. NAFTA's chapter 11 provides foreign investors with a right to sue the Canadian government and to seek compensation for foreign actions, including those of regulatory agencies like the CRTC, if they believe the decisions violate their rights under NAFTA. The CCA is very concerned with the fact that the Canadian government has tabled such a dispute resolution mechanism in the current comprehensive negotiations with the European Union.

Why are we concerned? First, in relation to NAFTA, the CCA would point out that the cultural exemption is limited in scope to the cultural industries that existed at the time NAFTA was created. Importantly, this does not include the new media sector, such as interactive television, computer games, etc.

Second, chapter 11 rights could potentially come into play in two ways in this matter. If the rules in telecommunications are changed, a foreign company investing in a Canadian cable company or broadcaster could structure a deal in a way that mirrors the new telecom's rules. If the CRTC were to prevent them from proceeding, they could launch a chapter 11 challenge on the basis that they have been treated unfairly in relation to a direct competitor operating in the same marketplace

Finally, if foreign companies are permitted entry, or force entry, into Canada's broadcasting system, existing rules and regulations relating to the production and distribution of Canadian content productions may be sustainable, since the foreign company will be entering a market where those rules exist. However, if the CRTC or the government were to try to update the rules to reflect a new environment, the foreign company might have a cause for action under chapter 11.

These are the reasons we're concerned about the link with foreign trade negotiations.

Thank you for your attention, and I'll now answer any questions you have.

[The Chair, Conservative, Gary Schellenberger]

Thank you very much.

Now we move to Ms. Edwards, please.

[Catherine Edwards, Spokesperson, Canadian Association of Community Television Users and Stations (CACTUS)]

Before I start, I sincerely apologize that our presentation is not available in French. We've been in intense consultations with the CRTC for the past three weeks. We are a small volunteer citizens organization, and it simply wasn't possible. However, I would be absolutely delighted to entertain your questions at the end in French, if you prefer, and to answer them in that same language.

I thank the Standing Committee on Canadian Heritage for inviting CACTUS today. I will address questions four through six in your terms of reference, which deal with accessibility to emerging and digital media.

Our proposal is the same--but shorter--as the one we made before the CRTC in its review of community TV two weeks ago. We appreciate the value you attributed to independent community TV in the motion that you passed on April 30. As that motion dealt with Quebec only, I welcome the opportunity to present our vision of independent community TV for all Canadians, and access to emerging and digital media via those organizations.

For those of you whom I haven't met before in person, the Canadian Association of Community Television Users and Stations represents community-owned and -operated television channels that distribute over the air, on cable, and on the Internet; the Canadians who use and watch them; and also the majority of Canadians who currently don’t have access to such a channel.

As you know, digital media are not really new. Computers have been common in Canadian homes since the 1980s, storing first text digitally, and then graphics and still pictures. The Internet as a means to share information developed in the 1990s, and digital formats to store audio and video became available at about the same time.

Perhaps what is new is the degree of convergence between computers and audiovisual technologies. It is this desire to share more bandwidth-intensive audiovisual information that is driving the demand for broadband access. The other big change on the horizon, of course, is the official switchover to digital television, which is driving production of HD content, purchases of digital television sets and set-top boxes, and the possible loss of free over-the-air TV for Canadian communities having fewer than 300,000 people.

With this switchover, the last distinction between previously analog and digital services will disappear. It is speculated that more and more television will be watched on the Internet, but no one really knows whether such demand can be accommodated, even with broadband.

With all the talk of bandwidth and distribution platforms, it's easy to lose sight of content. Media is still created in the same basic formats as in the 20th century: text, audio, still pictures, and moving pictures. New media platforms, such as the Internet, increase the possibilities to combine and interact with these media, but the basic media—and Canadians’ need for training to produce these media—remains the same.

“Media literacy” refers to the ability to interpret media and to create media for oneself. For example, we teach children not only to read, but also to write. Forward-thinking public policy-makers have always been concerned that the general public benefit from new media technologies, both as creators and as consumers of content. It’s widely acknowledged that the invention of the Gutenberg press drove the rise in written literacy in western culture. Public libraries became common, starting in the 19th century.

With the invention of audio and moving picture recording devices in the 20th century, forward-thinking governments and citizens sought access to radio and television. The first community radio channels began in the 1930s. The first community television channels opened in the 1970s, right here in Canada. Perhaps because the early video cameras broke down a lot, their maintenance and management of these channels were left in the hands of cable companies, who were building an infrastructure at the time for local TV distribution.

In all countries that followed our lead in the eighties and nineties, however, when television equipment had begun to drop in price and complexity, communities themselves own community channels. In Canada, there are only pockets of community-owned TV, including in Quebec, as referenced in your motion. There are also seven over-the-air community TV broadcasters scattered across the country and two cable co-ops on the prairies that offer local services--only a handful.

But radio and television are traditional media. What do they have to do with public access to new and digital media? Canadians need both the know-how to create media messages and the technology to reach their target audience, and there is a hierarchy of both skills and cost to obtain these forms of access.

Reading and writing are considered so essential that they’re taught in school. To create a radio program or audio message, you need to know not only how to write the script, but also how to interview guests, how to record sound, and how to edit. To create a television program or video message, you also need to understand such things as camera angles, lighting, and framing. And just as the skill level rises to produce text, audio, and video, so does the cost. Although digital cameras have fallen in cost, microphones, lighting, studio space, and transmission equipment have not.

So while anyone, it's true, can shoot raw footage with a camcorder and post it on YouTube, there are still multiple barriers for the average person in the new media environment. There are literacy barriers to produce effective messages. There are technological production barriers to capture civic or cultural events that require studios, lighting, multiple cameras, and crews. There are also technological distribution barriers to access audiences, especially local audiences, if the video is only available among the millions on YouTube. There may also be distribution or cost barriers if your target audience can't access or afford high-speed Internet.

Finally, as discussed by other presenters, there are legal barriers if you don't want to yield copyright to YouTube or other for-profit content aggregators.

There has been recognition by Canadian educators for almost 20 years that the definition of literacy must be expanded to include all media, including audio, video, and the Internet platform itself. Thanks to the Canadian Association of Media Education Organizations, or CAMEO, media literacy, including the rudiments of multimedia production, have been taught in the language arts curriculum across Canada since 2002.

Since the new media and digital tools will continue to evolve, however, there needs to be a resource in communities where Canadians of all ages--even if you're as old as 40--can both learn and use new media to distribute messages; a 21st century multimedia library and distribution hub, if you like.

In most parts of the country, the cable-managed model of community television still dominates and is unfortunately problematic. CRTC data revealed that more than 70% of the money cable subscribers pay for community expression is spent on cable-produced programs that promote their brand. More than two-thirds of the roughly 300 community channels that once existed have been closed. Consolidation in the cable industry has led to centralization of resources rather than the decentralization that is needed for an inclusive digital strategy. Rural Canadians are once more being excluded.

Finally, cable as a distribution platform has fallen from a penetration rate of over 80% a decade ago to just 60% today. So it's no longer universally accessible, especially in those same rural areas that have poor access to high-speed Internet and may soon lose free over-the-air TV.

Like libraries, the new multimedia training centres need to be publicly managed and accountable, freely accessible to the community, and to distribute content on all platforms.

So our vision of access by all Canadians to new and digital media is to build on and modernize the existing community television policy. The money Canadians already pay for community access could be directed to community-operated multimedia centres that would provide access to all media technologies as they become available.

By leveraging community manpower, they could generate the local content that has become so challenging to finance in the public and private sectors. They would distribute the content free over the air to cable and to the net and once communities have their own transmission infrastructures, and a couple of our members already do, they can offer retransmission of free OTA TV after the digital transmission if they choose, and other new media, including wireless Internet and mobile TV, as it becomes available.

The money collected from cable subscribers last year, which was more than $130 million, is enough to fund 250 such centres. That's at least one for every community over 10,000 people, additional neighbourhood offices in cities over 500,000, and about 50 centres in rural areas. They would be within reach of more than 90% of Canadians.

An important part of our strategy is to build on existing infrastructure. For example, you may have heard that there are already more than 3,000 free Internet portals countrywide--they're called “CAP” sites--that have been funded by Industry Canada since the 1990s. Many are located in libraries and community centres just as we envision, and they already teach some Internet skills, including multimedia. So our vision brings together many such organizations that have been heading in the same direction anyway as technologies have converged.

To conclude and respond to your question six, we specifically recommend, first, that the CRTC redirect the use of cable funds collected for local expression to community-owned and -operated multimedia centres by an arm's-length, fully transparent, and accountable fund.

Second, we recommend that one over-the-air frequency be reserved for community use in every market so that communities can benefit from new technologies for distribution as they become available. At present, it's not clear whether the CRTC, Industry Canada, or Heritage Canada could make this happen, and we request your assistance in obtaining clarification.

Third, over-the-air public and private broadcasters that elect to discontinue transmission in communities under 300,000 after August next year should be asked either to donate or give free access in perpetuity to their transmission towers and equipment so that communities that wish can step in to offer free over-the-air television, including a community TV service.

Again, I'd like to mention that two of our members currently already do this. They rebroadcast remote signals from the public and private sectors in addition to offering community service. So it's financially manageable for small communities. One of those communities has only 1,000 people.

I'd welcome your questions on behalf of CACTUS.

[The Chair, Conservative, Gary Schellenberger]

Thank you.

Again, we'll do one round of seven minutes.