Evidence of meeting #16 for Canadian Heritage in the 40th Parliament, 3rd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was magazines.
A recording is available from Parliament.
NDP
Charlie Angus NDP Timmins—James Bay, ON
But CRTC regulations aren't interfering with you making good product.
Vice-President and General Counsel, Corus Entertainment Inc.
Well, actually, one of the areas that we have some concerns about is the need to access our programming on a quota system from independent producers. The independent production system is a relatively new process, but let me get back to.... I mean, we are all spending a lot of money. Can we guarantee good quality? Absolutely not.
Vice-President and General Counsel, Corus Entertainment Inc.
And that is part of the problem, but in terms of public policy, we see it as a mix.
We're supporters of the public institutions that are creating programming, such as SRC/CBC and the National Film Board. We're supportive of agencies such as Telefilm and the Canada Media Fund. We're supportive of the tax credit system. That makes up for the challenges we have with respect to the size of our domestic market.
The flip side of it also is that the commission seems to be moving towards what we would see as a more strategic approach to regulation. We're really looking forward to the group licensing process, because the commission has seemed to indicate that in fact they will allow us to take that pot of money we spend and allocate it in the best way possible.
One of the examples we use is that we have a channel called Encore. It's a pay television channel. It runs programming that is 15 years old or later than that. Our view is, why should we have to spend a quota amount of funds to create old product? Why wouldn't we be able to take some of that money and use it to in fact create new programming?
The commission seems to be amenable to that. We'll see what happens. That is a really positive sign. As operators of a number of channels, each company can pick its spots and say, “That's what I'm going to invest in.” We think that's going to be a very positive development--if it happens.
NDP
Charlie Angus NDP Timmins—James Bay, ON
In terms of digital media, though, is it now possible to invest in fairly cheap experiments? I've seen many TV pictures that don't get out the door, because if you've got a limited amount of funds and it's going to cost you a lot for a pilot.... There's your Canadian Television Fund money, and if you blow it, a committee might be asking questions: why did you put that crazy show on the air?
You can do all that online without spending much money. Are you using that like seed experimentation now?
Vice-President and General Counsel, Corus Entertainment Inc.
We're doing a lot of that, but one of the mythologies of new media is that.... We all have these visions. And there's a kid in all our lives who's 14 years old, who's in the basement or in the garage, who's got a website, and it's terrific, and he's smart and he's going to do great things.
I was in a meeting last week with two enormously creative cartoonists who are looking to do a project. They had done some small things on YouTube, and it was great stuff and they asked us about it. We told them it was terrific. They asked us how much we thought it would cost. We said to do it right, for a kids' series, we're probably talking about $10 million, and they each fell off the chair. That's the challenge we have. Yes, you can do a website for $395 a year, but to make the really good stuff, the kinds of stuff that Astral and we put on the air....
By the way, we have just funded a group in downtown Toronto, inner city kids, and we are going to run their programming on air, on the big professional channel. This is 5- to 15-minute stuff they're doing. So we'll give them a window, but at the same time as we give those windows, we have to find a way to find that $10 million. That's the challenge we have in Canada, and a lot of that's going to come from foreign markets.
Conservative
Conservative
Dean Del Mastro Conservative Peterborough, ON
Thanks very much, Mr. Chairman.
Thank you to the presenters today. I think these are outstanding presentations. I really liked a number of the ideas that came forward, I have to be honest with you.
I want to talk a little bit about Astral. Madame Émond, you made a recommendation for the establishment of a new communications department to propose a new national policy on broadcasting. I think that is something that's overdue, frankly. I said last week a full review of the Broadcasting Act is something we should be looking at.
One of the things I really find remarkable is how often broadcasters are jumping through hoops to attend hearings and preparing presentations across the water. I would imagine there was probably a tremor in Gatineau when you made that recommendation here at the committee. They don't like such recommendations.
But talk to me a little bit about how you'd see that evolving, how you'd see that working.
Chairman of the Board, Astral Media Inc.
I think politically it will be difficult.
Chairman of the Board, Astral Media Inc.
We have been told by the incumbents over the years, not just the current ones, that to create a communication department, from a purely political point of view, is to create a small department; it will go from the industrial level to a small department, and that in itself is the first hurdle, to consider that.
The second is that while some people consider putting these three together--new media, telecom, and broadcast--will create some form of a cultural-artistic type of department, that's not the way of the future. That's not really an industrial approach.
I don't believe these things should be seriously considered when we think of the benefits that would result from having one common vision for our country. I think they must be taken care of in other ways and that there is a real opportunity for us to take the lead in the world again by doing something like that.
Conservative
Dean Del Mastro Conservative Peterborough, ON
Thank you.
I don't think it's impossible at all. I think it's something we need to undertake.
Mr. Maavara, I really like the Corus big six, but if I can cherry-pick one—and I'm going to—number four reads:
Recognize that private media enterprise success is what will lead to a stronger cultural system, not the current system of progressive fees, conditions and tariffs.
That is the establishment of our current system, isn't it? It's a system of fees; it's a system of tariffs. I'm told, for example, that Shaw's proposed takeover of CanWest could result in some $200-million-plus in transfer fees. If this were real estate, you'd call that a land transfer tax, but that's really what they're looking at, a transfer fee to the tune of hundreds of millions of dollars, which really discourages Canadian companies from even looking at building stronger enterprises by taking these things over.
I understand Shaw is making a commitment of over $150 million to Canadian content. They're keeping an agreement that was put in place by CanWest and moving that forward. Despite that, they're looking at a very significant transfer tax.
Is this something that enables or creates a stronger system, or, as you're saying, does this discourage innovation, discourage the strengthening of the Canadian broadcast system? It is discouraging enterprise success—to speak to your point four—isn't it?
Vice-President and General Counsel, Corus Entertainment Inc.
The short answer is yes. We understand the social contract that, as Canadian citizens and Canadian taxpayers, there are a bunch of things that we should and need to do. The difficulty, though, is that we take not only our own creative content but the creative content that's supplied to us by independents across the country and we create the value in that, and if we can't be successful as value creators, whether we do it on radio, in television, or on new media platforms, and build that, then notwithstanding the new access to the market that the new media bring, if we can't build that core of value, the system basically will not be successful.
So our view is, yes, indeed, we are prepared to step up with public benefits in a variety of different ways, but the trouble is that the system has gotten top-heavy.
On the question of benefits, we're not aware of what Shaw is proposing, but one of the recommendations we made was that the system now, as we get up to these high values, should be stepped in the same way as the income tax is, that you fill out the form every year and it steps up. Right now we are facing a situation in television where it's just 10%. That may have been fine 15 or 20 years ago, but today, as you said, it's a lot of money, and in many ways, one has to ask, have we missed the boat with this system we're in now?
Similarly in the area of copyright, the collective system was supposed to be efficient, and now we have a system that is enormously inefficient and we need to take a careful look at that.
Conservative
Dean Del Mastro Conservative Peterborough, ON
Thank you.
I'll ask my next question to both groups. I think it's really important that we allow our broadcasters and our cultural creators the opportunity to innovate. It seems you're spending an awful lot of time—in fact, I've really been taking note of it—providing testimony and witnesses and appearing at studies. There's always something going on, and it seems to be almost always the same folks who are appearing on different topics across the water.
How much time do you have to experiment, or how many resources are we losing in investment in this regard, when you're putting so many resources into this? I love the legal profession, but you guys have to be spending an awful lot of money on legal services and representation, and so forth, across the water, that you might be able to spend on content.
Conservative
Vice-President and General Counsel, Corus Entertainment Inc.
I have a really short answer on this. We have a big R and D department. We're really prepared to continue the commitment to that. But in terms of public policy development, at the Canada 3.0 conference in Stratford a couple weeks ago, one of the things that came across in a roomful of 2,500 people, ranging from high school students to doctors of physics and engineering, was that the policy-making team just had to do something.
Chairman of the Board, Astral Media Inc.
First of all, I don't know what you would be doing if we were not coming here, but—
Chairman of the Board, Astral Media Inc.
If, coming to a series of these hearings, one of our ideas is transformed into law, it's something positive.
The real issue here is that we appreciate the fact that in the multi-party types of meetings we have here, we can exchange with you and convey suggestions to you to make the system work better. That's really why we're here. It's not a question of cutting programming expenses. We do not only pay for programming. We do business with independent production, exclusively in our case, and we have a fund, the first private fund, created by Harold Greenberg. The Harold Greenberg Fund, which comes from Astral, has given $1.5 billion over the few years it has existed, to develop new programs and new types of producing ideas.
Conservative
The Chair Conservative Gary Schellenberger
Thank you.
I must say that I've always had this idea, and we did it in a couple of studies, to have a round table. I agree--and this is off the cuff; it's from the chair. I think if you put a lot of those people in a room with different ideas and lock the door and said no one gets out until we come up with a strategy, it would be good.
With that, thanks for attending today.
The meeting is adjourned.