Canadian Heritage Committee on Feb. 14th, 2011

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

That will start....

[Hubert T. Lacroix]

In the normal course of business, certain events have already been scheduled. They will air this coming season.

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

I want to come back to the matter of funding, if I may. There is no index adjustment, per se.

[Hubert T. Lacroix]

No index adjustment, correct.

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

I assume you have already negotiated pay increases with your employees.

[Hubert T. Lacroix]

The collective agreements have been signed.

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

Therefore, you are bound to respect those agreements.

Given that you have signed those agreements and that you are going to honour your commitments, in other words, pay what has been negotiated, you will have to make cuts elsewhere.

[Hubert T. Lacroix]

We make adjustments as needed based on the funding we get in order to meet our goals, as planned, and honour our commitments to our employees.

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

How much are we talking, about 1.5%?

[Hubert T. Lacroix]

Correct, 1.5%.

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

In an ideal world—once again, I am addressing my friends across the way—the funding would also be indexed so the organization could honour its commitments to its employees without having to make cuts elsewhere.

I digress, but should we revisit CBC/Radio-Canada's mandate based on....

[Hubert T. Lacroix]

Ever since I accepted this position, I have said that we would welcome a discussion of our mandate. We think our mandate is quite clear under the act: to provide a wide range of programming that informs, enlightens and entertains. No part of that has changed in 20 years.

What you have in front of you, Mr. Rodriguez, is our expression of that mandate based on who and what we are in 2011, against the backdrop of an ever-changing environment.

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

I think we heard that you wished to expand your service in select underserved markets. To conclude, could you elaborate on that?

[Hubert T. Lacroix]

Yes, of course. I will give you two examples because the realities of the English service and the French service are very different in that area.

Let's talk about CBC for a few moments. We saw that Canada's population had moved to different areas and that it was no longer concentrated where it was 20 or so years ago. As a result, we realized that nearly 7.5 million Canadians did not have access to our local service. Our goal is to try to serve 6 million more people over the next 5 years—I repeat, our plan covers 5 years—by opening new local stations. They will be multimedia stations, possibly combining radio service, and local and regional Web sites.

But the public broadcaster must be able to establish a presence and connect with Canadians in those regions.

[The Chair, Conservative, Michael Chong]

Thank you.

Now over to Ms. Lavallée.

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

Welcome everyone.

CBC/Radio-Canada's mandate has always been problematic. You said you would welcome a discussion on that, but there is another issue, as well. CBC/Radio-Canada seems to have a hybrid mandate, and that is inevitably reflected in its funding, which is also hybrid. And the result is that you have a public corporation that is not quite a public corporation, often having to rely on advertising revenue from private TV companies.

I know you are smart enough to know that this problem exists. Your funding problems, if you will, are reflected in how you carry out your mandate.

On page 2 of your plan, you say you want to address Canadians as citizens who want to be informed, challenged and entertained. You want to offer Canadian content, but you air too many American programs that come with a hefty price tag. The one that troubles me most is Beautés désespérées, originally Desperate Housewives, perhaps because of the location. It is a total depiction of American culture. Is it really your mandate to air American television shows? Is it really your mandate to create specialty channels? Is it really your mandate to offer reality TV? Do you not do these three things to generate revenue because of inadequate funding?

[Hubert T. Lacroix]

There are many parts to your question. I will split it up, if I may. Obviously, I will ask Sylvain to help me out with certain answers, especially in terms of his programming schedule. In a few moments, he will tell you what it looked like 15 years ago and how distinctive it is today. He can also confirm how proud we are of our schedule and the programs you see on Radio-Canada.

Let's start with the hybrid model, the CBC/Radio-Canada model. As I said earlier, we are very grateful for the $1.2 billion the government gives us to carry out a part of our mandate. But for years, both the government and the CRTC have been telling us that if we want to do anything else, we have to raise the money ourselves. That is why we have other funding, in the range of $700 million to $800 million, including $350 million or so in advertising revenue. We have to be able to balance our budget by airing the programs necessary to attract enough viewers, while continuing to offer distinctive quality programming.

I will now ask Sylvain to explain how our schedule has changed over the years and how distinctive it is today.

[Sylvain Lafrance, Executive Vice-President, French Services, CBC/Radio-Canada]

It is interesting, because historically, Radio-Canada's television programming has never been as distinctive as it is today, nor has it relied on American shows as little as it does today.

I am old enough to remember watching Docteur Marcus Welby (originally Marcus Welby, M.D.), Jinny (originally I dream of Jeannie), Ma soricère bien-aimée (originally Bewitched) and many other American shows in prime time. They have been replaced with Canadian dramas. Today, no American program is aired in prime time during the regular season. Some are aired Saturday evenings and during the summer.

I think we have made a huge effort on that front. This year, Radio-Canada aired 15 Canadian dramas, which is tremendous. Keep in mind that we are working to be even more independent under our plan. At the same time, however, I would not say our ultimate objective is to do away with foreign programming altogether. This is the 21^st century, and I think we still need to offer some foreign programming. But when we do, more and more, it will be in line with our programming choices. Historically speaking, I would say that television has never been as Canadian as it is today.

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

In exchange for predictable, long-term, stable and adequate funding from the government, would you be willing to give up advertising altogether or in part? If so, how much would you need?

[Hubert T. Lacroix]

We have already talked about that. It is inaccurate to say that one dollar in additional government funding is equivalent to one dollar of advertising revenue. Production and programming costs have to be taken into account. Substitutes have to be found. Every advertising dollar lost would represent between 1 and 1.5 times that amount in additional government funding. It will always be to our advantage to be very attuned to our Canadian audience, so we can deliver the programs they want, programs that inform, enlighten and entertain.

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

I want to make sure I understand you here. You said that in order to make up for the loss of $300 million in advertising revenue, you would actually need $450 million, not $300 million.

[Hubert T. Lacroix]

Absolutely, 1 to 1.5 times more.

[The Chair, Conservative, Michael Chong]

Merci.

Mr. Angus.

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

Thank you very much for coming today, and thank you for presenting us this five-year plan.

Three years ago this committee, with all party support, made a series of recommendations in order to ensure that CBC/Radio-Canada fulfills its mandate to the Canadian people. One of those recommendations was a longer-term commitment between CBC and the Government of Canada in the order of a five-year plan so that we would have stability and long-term planning. I don't know what happened in the meantime, but the government seems to have fallen offside with that commitment. So you've gone ahead, basically it seems, on your own to deliver to Canadians a plan, a vision, so that we can say where we're going to be.

You mentioned the need for stability in financial funding. How crucial is it, and how possible is it to maintain this plan at the current rate of financing you have?

[Hubert T. Lacroix]

We recognize the challenge right now that is affecting all of Canada, and that's why in my opening remarks, in every comment that I've made so far, you've heard us say that what we are looking for is stability of funding and not more.

We've assumed, to deliver what you have read today and what you've seen today, that we will have the same appropriation; that the $60 million will be available to us and that we will be considered by the different funds—the Canada Media Fund, for example—on an even playing field with all the other broadcasters, with all the same criteria applying to everyone; and that we will not be taken out or disqualified because of the funding we receive, remembering that this funding allows us to do things that nobody else wants to do, because the economic models of the privates simply don't work for things like Canadian programming in prime time and like serving the north. There's no business model for that.

So we are looking, Mr. Angus, for stability in the funding, and not having that will obviously influence the speed at which we can deliver this plan. But in the next years we are going to want to be more national, more regional, and more digital, as this plan says.