Canadian Heritage Committee on Feb. 14th, 2011

[The Chair, Conservative, Michael Chong]

Thank you, Madam Stewart.

Mr. Wilfert.

[Bryon Wilfert, Liberal, Richmond Hill, ON]

Thank you, Mr. Chairman, and thank you for being here today. I'm not a regular on this committee, but I am a huge supporter of CBC/Radio-Canada. I have a few questions with regard to your new specialty channels, through you, Mr. Chairman.

The five-year strategy, “2015: Everyone, Every way”, has called for the company to expand its regional presence and also offer specialty programming, including such as the French language SENS, which will launch 2010-11, and websites such as TOU.TV. CBC will look at speciality options for kids, sports, and A and E.

First of all, what factors are considered when launching a new digital TV channel? How is this balance determined between them in terms of cost, reach, demand, existing supply, and alternatives? And then if I might also put on the table, Mr. Chairman, through you, considering the trend that the developed world has been moving toward a greater distribution of specialized content through the Internet, is it the most efficient use of CBC/Radio-Canada funds to be launching a new TV digital channel? Could the specialized interest of Canadians be better served if the CBC used new digital TV channels to offer content attractive to advertisers and use the funds raised to finance specialized programming available through the web? And is it necessary to have specialized content available through digital cable satellite rather then on demand through the web?

After that, I want to come back to this issue of a spillover cost, which may affect the core operations of the CBC, through you, Mr. Chairman.

[Hubert T. Lacroix]

All right. Let's talk about specialty channels.

First off, we think we bring a lot when we talk about specialty channels, because we have great brand, we have great content, and this is where, as I was saying a few minutes ago, there are some genres that would be particularly interesting for us to have in a partnership situation, whether that's kids or whether that's sports or whether that's, let's say, the use of our archives.

I'm going to ask Sylvain to tell you what his plans are for his new specialty channel, and then I'll ask Kirstine to give you an idea of how she sees specialty channels for the CBC.

[Sylvain Lafrance]

Let me first say that we agree with you that we are investing much more heavily in the digital arena than in new specialty channels, especially given that specialty channels more or less fund themselves. Radio-Canada's Artv model is self-financed through fees and advertising revenues. So the bulk of our investment goes into the digital platform, more specifically as it relates to regional, kids' and cultural services. We are trying hard to bring Canada into the digital age, something that is very important to us.

However, the current economic model does favour the creation of specialty channels a lot more. It is my belief that, in 5 to 10 years, the real economic model, the one that will allow us to strike a balance, will be based on specialty channels.

To create those specialty channels, Radio-Canada is capitalizing on each of the strengths of its main network. For example, information becomes RDI; culture becomes Artv; health, the environment, nature and topics covered by our science programs become S.E.N.S., which gives us an idea of what it will look like as a TV channel. And channels dedicated to other specific areas will eventually follow. We can assume that these will be extremely sound models in 5 to 10 years because that is already the case.

I would just add that if the shift to digital does take place, we will be totally ready to get on board, because we will have already developed models, such as TOU.TV, that will really help us make the transition quickly.

I wand to end by saying that television has a bright future; the television set, however, has some challenges ahead. So when a new television channel is launched, it will be broadcast on the appropriate medium. We are not concerned about whether or not that medium will be a television set, but we are concerned about launching that channel.

[Hubert T. Lacroix]

A few seconds perhaps from our friend from....

[Kirstine Stewart]

The strategy is very similar. The different forms of broadcasting, whether it's specialty on a digital platform or whether it's Internet platform, are actually both needed, because the reality of the situation is that the revenues have not yet migrated to the Internet platform where they can get sustained programming being made simply for the Internet. But at the same time, we know that this is a migration that's going to be happening, so we need to be present in both places. Where CBC TV is a little bit behind is in the opportunity to actually have a platform, which is viewed by many Canadians still in a more robust way than online, and to make sure we have the opportunity for diversity of programming, which we can't fit into a static linear channel that is CBC TV. So a CBC Two, a CBC Three, a CBC Four, like the BBC model, is something we are looking at.

[Bryon Wilfert, Liberal, Richmond Hill, ON]

So it would be the spillover effect of the cost on your...I obviously wouldn't want to see it negatively affect the traditional mandate of the CBC.

[Hubert T. Lacroix]

And that's why I think both Sylvain and Kirstine reminded the committee that this model of the specialty channel, where you can get advertising revenue and subscriber revenue, basically is a model that pays for itself over time. That's the purpose of having a specialty channel in your stable: you can actually have a motor there that supports the rest.

[The Chair, Conservative, Michael Chong]

Thank you very much.

Mr. Armstrong.

[Scott Armstrong, Conservative, Cumberland—Colchester—Musquodoboit Valley, NS]

Thank you very much for your presentation. I think you're taking a bold leap into the future.

I do have a couple of questions. This weekend, on a Friday night, the opening of the Canada Games was held in Halifax, and TSN2 had the coverage for that. There were many people questioning, in Nova Scotia in particular, where it was a local event, why the CBC didn't have it because TSN2 had it. They didn't understand. They don't really follow the media, but that was an event they wanted to watch.

Is there anything in this five-year plan—and you mentioned the partnership between NBC and CBS and the Olympics—that is going to allow you to have greater opportunity to have more broadcasting rights to certain events like this, which are really truly Canadian events?

[Hubert T. Lacroix]

That's the whole point of trying to make more connections, about being present in cultural events, and cultural events include sporting events across the country. That's what you read, and you read it well.

[Scott Armstrong, Conservative, Cumberland—Colchester—Musquodoboit Valley, NS]

Thank you.

The second question I have is this. You talked about one of the directions of your five-year plan being in the direction of accountability. The last time you were here, you'd already taken some steps in doing online expenses and other steps towards moving to accountability. You talked about how you were making attempts to work with the information commissioner to meet access to information requests. Can you update us on that? It's been 90 days since you've been here. Have you taken any steps forward in that area?

[Hubert T. Lacroix]

We continue to make more and more pages available on a website that is a specific website with respect to access to information requests. We have a very strong accountability regime, as you know here. We just filed our corporate plan at the end of the month of January with Parliament. We will be coming in a couple of months with our annual report. We keep appearing in front of different parliamentary committees. We're accountable to the CRTC. The annual regulatory report will be in a couple of months. We have a system by which we are transparent, and we welcome that opportunity at every single turn.

[Scott Armstrong, Conservative, Cumberland—Colchester—Musquodoboit Valley, NS]

Do you think you'll be totally compliant with the accountability legislation, with the access to information process? Is there a number of months for you to be totally compliant with that? Where are you at with that?

[Hubert T. Lacroix]

Since April 1, 2010, we have not had one single complaint for our turnaround time on ATIP requests. At first we were overwhelmed with the number of requests we got. That's why we had conversations with the ATIP commissioner. We're now working through that issue. As I said, on the turnaround times, there has been no complaint on time, which is important.

We still have issues with respect to section 68.1, which is the exclusion in the act, which I talked about in December, and that's being worked on. We have a court that will decide what section 68.1 is all about.

[Scott Armstrong, Conservative, Cumberland—Colchester—Musquodoboit Valley, NS]

Right. The last time you were here you suggested if that court case came back and they did not rule in your favour, you might take other steps, procedurally or legally, to again appeal that. Is that still the position of the CBC?

[Hubert T. Lacroix]

We'll see what that conclusion is and what the court of first instance decides, and we'll take it from there. But we will, obviously, comply and respect any decision of a court of law of last instance telling us how to interpret our act, for sure.

[Scott Armstrong, Conservative, Cumberland—Colchester—Musquodoboit Valley, NS]

Thank you.

[The Chair, Conservative, Michael Chong]

Thank you, Mr. Armstrong.

Mr. Angus.

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

Thank you.

A follow-up initially on a couple of questions my colleague asked. Is it possible for CBC to use some of your ATIP expertise to help the Conservative government? I had two years of waiting for documents and I got 40 pages blanked out, and they made me pay for it. It took two years. I thought, you guys are not having complaints on turnaround time, so maybe you could teach that government a little bit and we'd all be a lot happier.

I'll just leave that as a thought that you could put into your next five-year plan.

I'm interested in the issue of sports, because when you guys show the Vancouver Canucks on the Timmins television network, I get calls from people who are going to burn my office because they want to see the Habs. People look to CBC because of its sports. They just assume a great Canadian sporting event is going to be on CBC and they're going to watch it. But now we're in a completely different market, and especially with the dramatic change in the media landscape in the last year, where you are going up against massive conglomerates who are going to be bidding on big, big programs. My colleague says that if it's on TSN or that, people who just assume they're going to turn on their TV and watch are not necessarily going to see that.

How do you see the changing relationship where CBC has a relationship with a viewing public and they expect to watch it? Is it going to be through partnerships, or are we going to see some dramatic changes in the ability of Canadians to watch major sporting events?

[Hubert T. Lacroix]

I think sports is a very good genre that lends itself to partnerships, partnerships with different levels, because the cost of entering that game—if you'll pardon the pun—is extremely high. You will see more of that happening around us, and I think that's how we intend to continue being there for Canadians on important sporting events.

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

Thank you.

As politicians, we often hear that the sky is falling. We're always brought into an issue because it's a crisis. We have to do something. We often hear how beleaguered our cultural industries are, and yet it seems to me that we're in a golden age right now, in terms of our film, our television. I actually sit down and watch drama, where some years I might have done a pass. I feel that we're creating really excellent home-grown talent that we can promote.

I'd just like to go through some of the priorities you have, because you are dealing with a fixed budget. Drama is a big-ticket item. Then we expect—this is going back to being all things to all people—news and investigative journalism. That's a big ticket. Sports is a big ticket. We expect cultural right across the board, and then we have Radio One, Two, and Three, and podcasts. Those are all costing.... And then we have the local, regional, and you say hyper-local.

When you look at reinvesting, where is that reinvesting going to happen? We certainly took major hits on our local and regional programming last year when there was that major shortfall. How do you prioritize? Is it going to go into drama? How do we ensure that our local voices are going to have some restoration?

[Hubert T. Lacroix]

There are the three priorities you heard, including very distinctive Canadian programming. I'll ask Kirstine to come in and give you an idea of how she will make that priority operational under our plan.

The regional part is going to be done in different ways. With technology we can go places we never dreamed of going, in a different and much cheaper way. The apps and all that magic through which you connect and have a one-to-one conversation with us, that's going to be the third priority.

Everything we're doing right now will be focused on those three priorities. Kirstine can tell you how she will interpret over five years the first priority, the Canadian content piece in drama.

[Kirstine Stewart]

I think it's important to prioritize what we do. We have available to us things like the CMF, which incents us to make sure we're spending the right amount of money in scripted programming. The benefit of the CMF is that it has been set up along the lines of rewarding past success. The benefit of CBC's having a growing audience, which is unheard of with other conventional broadcasters, is that we have the opportunity to invest more in the programming, whether it's our revenue through advertising or through the access to these funds. With local programming, the shows that seem to be resonating best with Canadians are shows set in specific regions across the country. Whether it's Republic of Doyle, set in St. John's, or Heartland, set in Calgary, these specifically and unabashedly Canadian regional shows allow the location to become another character in the storyline. This helps us connect, and these shows have more viewership than ever before.

Rick Mercer, who goes across the country and showcases a different town every week, has in the last nine seasons never had such high impact—it's over 1.5 million viewers now. So we know there's a benefit to building on the strengths of local Canadian programs.

[The Chair, Conservative, Michael Chong]

Thank you, Mr. Angus.

Thank you, Madam Stewart.

Mr. Del Mastro.