Canadian Heritage Committee on Dec. 7th, 2010

[The Chair, Conservative, Michael Chong]

Welcome to the Standing Committee on Canadian Heritage. Welcome to our 35th meeting, on this Tuesday, December 7, 2010.

We are here pursuant to Standing Order 108(2) to study the impacts of private television ownership changes and the move towards new viewing platforms.

Welcome to our first panel. We have in front of us, representing CBC/Radio-Canada, Monsieur Lacroix, Monsieur Lafrance, and Madame Stewart.

Bienvenue. Welcome to all three of you. We'll begin with an opening statement.

[Hubert T. Lacroix, President and Chief Executive Officer, CBC/Radio-Canada]

Thank you, Mr. Chairman.

Members of the committee, good afternoon. On behalf of Kirstine Stewart and Sylvain Lafrance, I'd like to thank you for your invitation to talk about the changing media landscape and what it means to the public broadcaster.

Let's begin with new platforms. At CBC/Radio-Canada they are an opportunity. They enable us to reach more Canadians and engage with them in more meaningful ways than we ever could.

As we said in our submission to the government's digital economy consultation in July 2010, CBC/Radio-Canada is becoming a catalyst for both the creation and the consumption of Canadian digital content.

Today I could spend some time giving you big numbers, like 20 million hits to content on CBC/Radio-Canada's YouTube channel, or 7 million unique visitors to our digital platforms every month. But numbers don't really describe the actual transformation that's taking place.

CBC/Radio-Canada is becoming more than a broadcaster. We are now a meeting place. Every day our digital content is bringing Canadians together, creating new links between the public broadcaster and the public we serve.

Last month, for example, Canadians watched our Remembrance Day tribute to Canada's fallen soldiers in Afghanistan with the television documentary We Will Remember Them on our French and English networks. Canadians are still connecting with that program on our cbc.ca website, where each soldier has a web page put together by their families and friends, and audiences can add their thoughts on what that sacrifice has meant.

When we heard last year that the life expectancy of Canadians was declining, we decided to get involved. In January, CBC will be launching Live Right Now, a six-month, multi-platform initiative to help Canadians live healthier lives. We've created it in partnership with eight non-profit organizations like Breakfast for Learning, ParticipAction, and the Canadian Diabetes Association. It's built around a new online social network where Canadians can find advice and inspire each other to reach their goals.

They'll be able to sign up for the Million Pound Challenge, a group pledge to lose a million pounds by Canada Day.

Run Run Revolution will follow middle school students across the country training for a long-distance race.

In January, Village on a Diet will follow the residents of Taylor, British Columbia, who with the help of nutritionists and health experts inspire each other to get healthy.

That's how we're using multi-platforms these days to engage Canadians. But our success depends on that content being accessible. I believe this is where vertical integration poses some challenges.

CBC/Radio-Canada is now the only national broadcaster not owned by a cable or satellite company. We have concerns about the control and distribution of content by these integrated companies: how do we ensure Canadians will have equal access to a diverse range of Canadian content in this new environment?

That's part of the reason why we, at Radio-Canada, created TOU.TV last January. The video-on-demand platform is the only place where Canadians can find an incredible variety of dramas, documentaries, animation and websites from francophone public broadcasters the world over. TOU.TV is the new meeting place.

And the response to this initiative has been overwhelming: it has been critically acclaimed as the best website of the year and well received by Canadians who have watched over 18 million programs in 11 months.

Think about this: with the important exception of radio, virtually all Canadians now depend on cable, satellite, phone and Internet service providers for their information, enlightenment and entertainment.

And strangely, so do we. CBC/Radio-Canada depends on these companies to ensure that our content is available to Canadians. Of course, we've negotiated agreements with some distributors, such as Rogers, Quebecor and Bell, but we still have problems making our local programming available to Canadians.

Local stations are where our connection to communities is often the deepest. We think it is an essential part of our public broadcasting mandate. Yet satellite subscribers in Prince Edward Island can't watch their local Charlottetown CBC station because it's not offered by either Bell Expressvu or Shaw Direct. In Quebec, Radio-Canada has six local TV stations. Bell carries only three of them on satellite. Shaw carries just one.

A strange situation: it's frankly counter-productive when the CRTC is trying to increase the amount of local content through the Local Programming Improvement Fund, but subscribers can't see the content that's created. This is a completely ineffective system.

We know the CRTC is looking at this situation. We believe satellite carriage of these local stations should be guaranteed.

Even the success of TOU.TV depends on the streaming offer by Internet service providers. So what if an ISP feels online video is taking up too much bandwidth on the Internet and starts to throttle back the speed of content? How can one ensure that vertically integrated companies don't give preferential treatment to their own properties?

We believe the only way is through effective regulatory safeguards that ensure Canadians have access to Canadian content regardless of who owns the distribution network.

We understand why these companies are integrating. They are adapting in order to find their way in the digital environment. So are we. But we also have a statutory responsibility to provide a wide range of programming that informs, enlightens, and entertains Canadians. That's our public service mandate, and it influences everything we do, every decision we take.

We've told you before about the financial challenges we faced and managed. I won't dwell on those issues today. We need to look ahead and invest more of our resources in creating content on all media platforms, so that we can continue to build and nurture this public space where Canadians interact. In order to do that, we needed a road map to guide us in the digital environment. We'll be sharing our strategy with Canadians in the new year.

For now, I will simply tell you that three principles will guide our thinking. Number one, we will create and deliver more original, quality Canadian content. Number two, we will reinforce our presence in Canada's regions. And number three, we will expand how we use our online platforms to engage Canadians.

The bottom line is this: CBC/Radio-Canada is well positioned to be a powerful catalyst in the creation and consumption of Canadian digital content. To achieve this, we would appreciate your help in three areas. First, we require support for stability in our funding, particularly the $60-million envelope that is so crucial to our Canadian programming successes. Second, we would like guaranteed carriage of national and local television signals so that satellite subscribers have access to the local programming we offer. Lastly, we need effective regulatory safeguards to ensure that digital platforms bring Canadians more choice and diversity, not less.

Thank you for your time.

I will be pleased to take your questions.

[The Chair, Conservative, Michael Chong]

Thank you, Mr. Lacroix.

We have 50 minutes for questions and comments.

We'll begin with Ms. Crombie.

[Bonnie Crombie, Liberal, Mississauga—Streetsville, ON]

Thank you, Mr. Chairman.

Welcome, Monsieur Lacroix, Monsieur Lafrance, and Madame Stewart.

I'm a big fan of public broadcasting, the service you provide to remote and rural areas, and the commitment you make in particular to Canadian content.

I don't have a lot of time, and I have a lot of questions. Perhaps you would keep your answers really brief so that we can get some important material on the table.

First of all, can you clarify what are the benefits to having, and investing in, a public broadcasting company?

[Hubert T. Lacroix]

I'm sorry, the question is...?

[Bonnie Crombie, Liberal, Mississauga—Streetsville, ON]

What are the benefits to having, to investing in, a publicly funded broadcasting corporation?

[Hubert T. Lacroix]

So it's what we bring to the party in terms of the ecosystem in which we live.

[Bonnie Crombie, Liberal, Mississauga—Streetsville, ON]

Yes.

[Hubert T. Lacroix]

The public broadcaster, Madam Crombie, does many things that the private broadcasters just can't do.

[Bonnie Crombie, Liberal, Mississauga—Streetsville, ON]

Exactly.

[Hubert T. Lacroix]

That includes Canadian content in prime time; our services in the north of Canada; two networks, French and English, that have no advertising on them; putting more news and current affairs programming in prime time than anybody else in our environment.

[Bonnie Crombie, Liberal, Mississauga—Streetsville, ON]

Are the other networks subject to the same sort of Canadian content regulations that you are?

[Hubert T. Lacroix]

They have different levels of commitments in their licences. The answer is yes.

[Bonnie Crombie, Liberal, Mississauga—Streetsville, ON]

And what about during prime time, or in all timeframes?

[Hubert T. Lacroix]

They have different obligations with respect to that. We actually do more of that than anybody else: 80% or so of our programming on the English side, and 100% on Radio-Canada's side.

[Bonnie Crombie, Liberal, Mississauga—Streetsville, ON]

How can we better protect and promote Canadian content on television?

[Hubert T. Lacroix]

I think it's about ensuring that the public broadcaster can continue doing what it does. It's about stability of funding. It's about ensuring that the Canada Media Fund and the local programming improvement fund continue funding initiatives that are available to all.

[Bonnie Crombie, Liberal, Mississauga—Streetsville, ON]

Thank you.

I think we've all received the letter that Bill Chambers has sent around. Perhaps I could ask you some questions about that in particular.

[Hubert T. Lacroix]

Sure.

[Bonnie Crombie, Liberal, Mississauga—Streetsville, ON]

You've been in the midst of a court case with Quebecor. It's been getting some media attention. Some 1,200-plus ATIPs have been requested.

What do you think the rationale is? What are the underlying reasons for this dispute with Quebecor, and why the vast number of ATIPs?

[Hubert T. Lacroix]

First off, it's difficult for me to comment on a court case with Quebecor, because it involves Monsieur Lafrance and some of his comments. It's still in front of the court, so I'm not going to make comments on that.

With respect to the ATIP and the campaign that's been going on by the Sun Media newspaper and Quebecor with respect to what we do, there are two aspects. One is about accountability, and I think we've proven over and over again how transparent and accountable we are.

In the first three months or so of us becoming subject to the Access to Information Act, more than 400 requests came from people associated with Quebecor. They say that out of the 1,200 that we've received so far, more than 1,000 seemingly came from the same source.

To try to speculate on what the rationale behind their campaign is would be beyond my knowledge. I'm simply telling you what the facts are and how we're responding to it.

[Bonnie Crombie, Liberal, Mississauga—Streetsville, ON]

We know that court cases such as these can be quite costly. Can you tell us what you've spent in legal fees to date?

[Hubert T. Lacroix]

Regarding the court costs with Mr. Lafrance's situation, we've invested the dollars necessary to respond to the accusations. The legal action instituted by Quebecor is still ongoing.

[Bonnie Crombie, Liberal, Mississauga—Streetsville, ON]

Quebecor has taken out ads in their papers. Has this hurt you? I actually have a sample of one here—I don't know if I'm allowed to table it—and I've been reviewing it.

Do you feel that somehow it's given them an unfair advantage? Is this what we have to look forward to with further vertical integration into the sector?

[The Chair, Conservative, Michael Chong]

Madam Crombie, you can table it with the clerk. I'll have him translate into both languages and have it distributed to members of the committee.

Mr. Lacroix.