Canadian Heritage Committee on Dec. 7th, 2010

[The Chair, Conservative, Michael Chong]

Thank you, Ms. Lavallée.

Mr. Angus, go ahead, please.

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

Thank you. This has been an excellent session.

I want to begin by talking about getting access to data. I've been incredibly inspired by my colleagues Mr. Armstrong and Mr. Del Mastro, the Sun Media Conservative party, and their openness for government and their commitment.

You know, I just got an access to information request back from the Conservative government that I waited two years for. It's 150 blank pages--that they made me pay for. Now that I have colleagues who are going to get accountability for the taxpayer, I'm feeling inspired.

I ask this because they certainly have a dog on for the CBC and its accountability. But this past April Mr. von Finckenstein appeared at the industry committee. He stated a number of positions and speculated about raising or changing the foreign ownership requirement.

So I put in a freedom of information request to find out if he had any data. A man of such august stature, stating such an important opinion, would certainly have lots of data to back it up.

It turned out there was nada. There wasn't anything. And I was thinking, “How could this be that he makes policy pronouncements without holding data?”

Now I see, Mr. Murdoch and Madame Auer, in your presentation today....

The last time Mr. von Finckenstein came here, he said, hey, it's way too early to make any pronouncements about vertical integration, the jury's out. So I thought, well, then they must doing lots of data. They must be still crunching the numbers.

Yet you're telling us that they haven't done any integration impact on programming investment, they don't know how many broadcast news bureaux exist or how many reporters are working in broadcasting, they haven't measured diversity in news or the impact of diversity in voices.

Now, I distinctly remember Mr. von Finckenstein saying there's lots of diversity out there, and it's called the Internet.

What should we expect from a public regulator in terms of keeping data and being willing to share that data through access to information with the public?

[Peter Murdoch]

The data we gave you here is alarming, I think, there's no question about it. It certainly alarms us. In terms of the access to information, it took us months and months just to get the bylaws for the CRTC. So there's a problem there.

Let me refer to the statement by, I think, Mr. Harper on effective and efficient regulation, streamlining effective and efficient regulation. What we want to be assured is that if there is going to be deregulation, it will also be effective. So far, in this environment of deregulation from the CRTC, where we make it up as we go along, we don't have evidence to support it. And it's alarming, because it's affecting Canadian content, Canadian programming, in all varieties. So yes, it's a problem.

We think it's incumbent on you folks to.... We were talking about the need for perhaps another form of punishment to bring the broadcasters in line at times. Maybe there needs to be something to bring the CRTC in line.

[Monica Auer]

Perhaps I could add one thing.

There's no requirement, currently, in the Broadcasting Act for the CRTC to provide reasons in its decisions, which is why it's so difficult to tackle them. And when there's no requirement even to give reasons in policy statements, we have no way of knowing why things are happening.

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

I'm going to have to ask everyone this question.

I've been here since 2004, and long before I came along, the line we always heard was, “Give us this one massive merger and we're going to get you more investment and more content.” And every time I look at the data, I see more people getting fired. I see the same big players getting bigger and bigger. They were just here, and they said, “Oh, my God, you've got to give us deregulation. And filling out those forms about what we do for access to information and so on? That's red tape. Cut it.”

Now I'm learning that under this great vertically integrated system, where we're going to deliver lots of content, the CRTC's decided to cut CanCon from 60% to 55%. They were talking about doing that in the conditions of licence, which would have been appealable, and there might have been some talk about it. But they just put it into the regulations, so it's a fait accompli.

I'd like to ask what the impact is when the national regulator, which tells us that its prime directive is to not get involved, cuts CanCon from 60% to 55% without giving us reasons. What impact does that have on our production sector?

[Maureen Parker]

Charlie, just going back to a couple of your questions, one of the interesting things I heard this week, in terms of the Internet service providers who were appearing before this committee, was that they weren't just asking for deregulation. They were actually asking for some regulation over foreign entities, such as Netflix, which I find to be highly ironic considering their own services are not regulated. So I really do believe that the starting point is to ensure that the Canadian broadcasting system remains one system and that it's regulated on both digital platforms and broadcasting platforms.

On the CRTC issue and the new television policy, there are good things in the television policy. Certainly what you just referred to is one aspect of the policy, but there are other things in that policy that we believe will turn the system around to some extent. There is an expenditure requirement coming in for both the corporate holdings and the individual specialty channels. And there is now an overall 5% spend required for drama and documentary programming.

Quite frankly, we saw a lot of the Canadian content being dedicated to entertainment “light” programming. If that would go towards making up the 60%, maybe it's a better deal to have actual money spent on local programming, of course, and drama and documentary. Maybe that's a trade that had to be made.

You know, we're looking at the TV policy and we're feeling rather optimistic.

[The Chair, Conservative, Michael Chong]

Thank you very much, Madam Parker.

Briefly, we'll have Madam Deer.

[Joanne Deer]

Chair, I just wanted to make two quick points, one in reference to the reporting and the CRTC.

Absolutely, there are some problems. Trying to get some data when we're preparing for hearings into broadcaster spending is a nightmare. It's like pulling teeth. But some of that also goes back to the broadcasters and the fact that they're not giving the CRTC the data in the first place. They don't want to give it to them.

I mean, you heard Shaw whining on Thursday about the new forms they're going to have to fill out in terms of their online content. They claim that they don't know what's on their websites and that it's a new job if they're going to have to figure it out and report that.

That's just another challenge we face.

[The Chair, Conservative, Michael Chong]

Thank you, Madam Deer.

Thank you, Mr. Angus.

We'll go to Mr. Del Mastro.

[Dean Del Mastro, Conservative, Peterborough, ON]

Thank you very much, Mr. Chairman.

Thank you to the witnesses today. It's an interesting panel.

Thank you, Mr. Murdoch, for your support of my position. I didn't think anybody was listening to me.

[Voices]

Oh, oh!

[Dean Del Mastro, Conservative, Peterborough, ON]

I kept on saying it, but nobody was taking any note of it.

I actually believe that it's time that we review that document. It's time that we take a look at it to see what it is we're trying to achieve. I think in some ways, and I think some of the other witnesses have noted it, we may be straying from that in some if not in many regards. I think we should be looking to see what outcome we are trying to achieve.

My discussions with the CRTC indicate to me that they wouldn't mind getting some additional policy direction from Parliament either. So it might be a positive outcome.

A number of you talked about ownership shares, specifically telecom ownership. I just wanted to ask if there was a specific position. What do you think the ownership should be? Should it be 100% Canadian? Should it be 80%-20%? Should it be 51%-49%, with an all-Canadian board and Canadian control ensured? What should it be?

Go ahead, Ferne.

[Ferne Downey]

Our position is status quo. What we got is an appropriately balanced mix. That's ACTRA's position: no change.

[Peter Murdoch]

We think it's okay the way it is. I'm not sure we've seen a lot of evidence on what the current levels are in broadcasting. We've asked for them; we don't see them. Particularly in terms of debt, there are....

It's interesting; when I compare it to the newspapers, for instance, we have the old Southam newspapers, currently Canwest newspapers, and now 92% of those shares are owned by foreigners, despite parliamentary acts that....

Yes, it's alarming; 92% of those shares are owned by essentially hedge funds in the U.S.

[Dean Del Mastro, Conservative, Peterborough, ON]

To understand the government's position on it--and I don't know what your positions are--in order to attract increased competition, because there's a concern that prices in Canada....

It may not be a legitimate concern, but I do hear it. I hear it in the riding. I'm sure even some of your members would talk about the fact that they feel that wireless is expensive. Mobile phones are expensive. Data plans are expensive.

They think that perhaps by introducing additional competition...and it's very difficult to introduce competition in Canada, because the players are large and they're somewhat territorial, right? If you want to go in there, there's a good chance they're going to undertake a predatory practice.

I would. If I had a major share of the market and somebody wanted to come in and take it from me, I'd probably take them on. So it's an understandable process that they're going through.

Do you see any merit in that, that perhaps you could see lower bills for consumers, or do you think that...?

Do you agree with what the telecoms are saying--namely, that essentially we have a very competitive system in Canada, it's geographically difficult to supply service across Canada, and all in all they're delivering a pretty good service?

[Peter Murdoch]

We do have a pretty good system. Our union represents telecommunications workers across the country. It depends on what data you look at in terms of the cost of mobile in this country. Do you look at just local or long distance? Do they get a phone included? There are about 15 different ways of looking at this. When you start to drill deep into the OECD study, you'll see we are fairly competitive.

I think what's more interesting--and Europe, especially Spain, is a particularly good example of this--is where new competition has come into the market, it hasn't lasted very long. It hasn't been able to produce big, profitable numbers.

In a way, it drives down rates in the short term, but the competitors don't last. In some ways, it can be argued it creates a diversion for these larger companies. That's certainly their argument. But it's not necessarily a good thing in terms of the long process for those companies, or, by the way, the shareholders of those companies.

[Dean Del Mastro, Conservative, Peterborough, ON]

Thank you.

[Maureen Parker]

Can I just add one thing to that, Mr. Del Mastro?

We are concerned, too, about the increasing cost to consumers in terms of capping bandwidth, particularly consumers who want to download video content. Again, that's our feeling, that it must be a regulated broadcasting system for everything. For example, an ISP can't reduce their cable fees but hike up their bandwidth costs. It has to be regulated across the board to ensure fairness for all consumers.

[The Chair, Conservative, Michael Chong]

Thank you very much for your appearance and for your testimony. We appreciate it.

We must adjourn for the votes.

This meeting is adjourned.