Canadian Heritage Committee on Oct. 4th, 2012

[The Chair, Conservative, Rob Moore]

I call the meeting to order.

Good afternoon, everybody. Welcome to the Standing Committee on Canadian Heritage.

In accordance with our schedule, we have a meeting today with the Canadian Radio-television and Telecommunications Commission's chairperson, Jean-Pierre Blais. Welcome to you, sir. Thank you for joining us.

Mr. Blais, the floor is yours. Welcome.

[Jean-Pierre Blais, Chairperson, Canadian Radio-television and Telecommunications Commission]

Thank you, Mr. Chair.

It's a pleasure to appear before you today and to help you carry out your important role.

I was honoured to be appointed chair of the CRTC, an important public duty that I take on with a heavy sense of responsibility and an excitement about what lies ahead over the next five years.

I want to thank the committee for having invited me to set out my views on the future and the mandate of the CRTC. This is not my first appearance in front of this committee, nor do I expect it to be my last.

I see a lot of new faces around the table, so please allow me to quickly introduce myself, Mr. Chair.

My interest in the communication industry goes back many years. After completing my university studies, I practised administrative, intellectual property and communication law in Montreal.

In 1994, I joined the CRTC's legal directorate. Five years later, I was appointed Executive Director of Broadcasting at the CRTC. In this capacity, I was responsible for the development and application of all regulatory policies related to broadcasting. As expected, in that role, I had the opportunity to appear before this committee on a number of occasions.

In 2002, I left the CRTC to pursue new challenges at the Department of Canadian Heritage. As Assistant Deputy Minister, first of International and Intergovernmental Affairs and then of Cultural Affairs, my responsibilities included the legislation, policies and programs related to cultural trade, sports, foreign investment, copyright, broadcasting, the cultural industries and the arts. In those positions as well, I had the opportunity to appear before the committee on a number of occasions.

I then served as Assistant Secretary of the Treasury Board Secretariat's Government Operations sector from September 2011 until my return to the CRTC this past June. Unfortunately, I did not have the opportunity to appear before a committee during that time because I was in the position only for a brief time.

It has now been a little over 100 days since I returned to the CRTC. I have been extremely busy. I've visited most regions of the country, all our regional offices, and met remarkable men and women who have the interests of the CRTC at heart. I also chaired a very important hearing in Montreal on the proposed BCE-Astral transaction.

The future of the communications sector rests mainly on rapidly changing technology, the dynamism and innovation of the industry, and the creativity of Canadians. The CRTC's role in the years ahead will be one of an enabler; that is, we mean to be instrumental in ensuring a world-class communication system for Canadians—as citizens, creators, and consumers.

I would like to explain how I view the different, complementary and interrelated needs of Canadians.

Canadians as citizens want to participate in the democratic and cultural life of their country. They do so by having access to news and public affairs programming within a communication system that is accessible to all Canadians, including those with disabilities. Citizens also expect their privacy to be respected by service providers and telemarketers.

Canadians as creators not only develop innovative content, but also ensure its delivery across all platforms—including television, radio, the Internet and mobile devices—for domestic and global audiences.

Producers, actors, directors, artisans, writers, technicians, broadcasters, broadband distributors, wireless service providers and digital media innovators create content that reflects Canada's rich regional, ethnocultural and linguistic diversity.

Finally, Canadians are also residential and business consumers. They want a choice of high-quality, reliable communication services at affordable prices that respond to their needs. Every year, the average Canadian family spends more than $2,100 on communication services. Given that this is the sixth highest expense for most households, it is only natural that Canadians would have high expectations of the industry and the CRTC.

At the end of August, I announced the creation of a new position at the CRTC, the chief consumer officer, because I saw a need for a heightened integration of consumer issues in all aspects of the CRTC's work. The chief consumer officer will ensure that the needs and interests of consumers are at the heart of our decision-making process, our research, and our outreach—basically everything we do.

I want to make sure that Canadians are at their centre of their communication system. I firmly believe that a well-functioning communication system requires a number of service providers that are able to compete fairly, but a healthy marketplace also requires an informed and empowered consumer. To this end, over the coming months we intend to proactively provide information and useful considerations to Canadians to help them make informed choices in an increasingly competitive and complex communication marketplace.

On September 6, we published our three-year plan. An electronic copy of this document was provided to each of your offices. The plan sets out the activities we expect to carry out between now and 2015 to ensure that Canadians have access to world-class communications system. They are grouped under three pillars: create, connect and protect.

“Create” refers to the activities that ensure Canadians have access to compelling creative content from diverse sources and on a variety of platforms. Among these activities are the development of policies for various broadcasting services and the licensing of radio stations and television channels.

“Connect” refers to the activities that ensure Canadians can connect to high-quality, innovative communication services at affordable prices. This includes services that facilitate access to the communications system by Canadians with disabilities.

“Protect” refers to activities that enhance the safety and interests of Canadians. For instance, the CRTC ensures that Canadians have access to emergency communication services such as 911 services. It also includes compliance with, and enforcement of, the CRTC's regulations relating to unsolicited communications.

As a regulatory body, we have a duty to inform the public of our intended areas of activity. It is my intention to update our three-year plan at least annually. To assist public participation in our proceedings, we published on September 4 our annual Communications Monitoring Report; perhaps you already had a chance to look at it. This public document is a source of authoritative data that enhances Canadians' informed involvement in our work. It provides Canadians with financial, pricing and other key indicators and trends.

Without the public's participation in our work, Mr. Chairman, we simply cannot serve the public interest.

As chairperson of the CRTC, I chair meetings of commissioners in support of the policy-making and regulatory process. However, I'm also the deputy head of this institution and, wearing that hat, I would like to share with the members of the committee my views on the future of the institution.

In 2017, I want to leave behind an institution that is more trusted by Canadians and that enables them to benefit fully from a world-class communication system. This is a high standard that we have to earn every day in every decision and in all our actions, whether we choose to regulate or to rely on market forces to achieve the public interest and the objectives set out by Parliament.

Moreover, the CRTC, like all public organizations, must hold itself to the highest standard of probity. Every dollar spent must provide value for Canadians. Every action taken must reinforce the integrity of our processes and our decisions.

Throughout my public service career, one of my core principles has been a commitment to management excellence, which I now bring with me to the CRTC. This will ensure that our conduct is grounded in the public service's values and ethics, that we are responsible stewards of public funds and that we report on our progress by measuring against well-established benchmarks.

To this end, the CRTC recently adopted its own code of conduct to inform employees of the values and behaviours that are expected of them. The code contains guidelines to frame how to appropriately interact with Canadians and representatives from the communication industry, providing them with an appropriate framework. At the same time, we have to be careful not to become detached decision-makers in an ivory tower. We need to understand the challenges and opportunities faced by the industry, just as we need to understand the concerns of Canadians. Conversations must take place in an environment that ensures the integrity of our processes and the public trust that has been placed in us.

To conclude, Mr. Chair, I have been proud to serve Canadians throughout my career in the public service, and am honoured to have been appointed as its chairman at this critical moment.

As usual, I'm happy to answer any of your questions, considering, however, that I've only been in the job about 100 days.

[The Chair, Conservative, Rob Moore]

Thank you for your opening remarks.

Now we'll move into our time for questions and answers. We'll start with Mr. Armstrong.

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

Well, it's interesting to hear you've only been here 100 days. Sir Charles Tupper was a prime minister of Canada from my riding. He only served for 93 days, and he was the prime minister. You can get a lot accomplished in 100 days, and you already have, sir.

With regard to the Bell-Astral merger, we understand you can't comment on the details of this particular merger or the decision that's upcoming, but can you please explain the general options that are on the table for reviewing mergers in general?

[Jean-Pierre Blais]

Indeed, I can't get into the details of it. It's still pending before us. We will, of course, try to deal with that matter as expeditiously as possible, because the matter involves two publicly traded companies.

As I said at the start of the hearing, the applicant has the burden of proof to establish that this is in the public interest. To be clear, all options are available to us. It is possible for the commission to approve the transaction as submitted. It's also possible for us to say no in its entirety. In between those two bookmarks there are a variety of options, from requiring some conditionality to the approval process.

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

You say you're going to do this very quickly. Do you have any timeline you can suggest to us?

[Jean-Pierre Blais]

The record only closed a few days ago. We will try to do it as quickly as we can, because they're publicly traded companies, but I'm not at liberty at this point to tell you exactly when we intend to issue our decision.

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

Thank you very much for that.

Previous chairs have come to us and have suggested we ought to merge the telecommunications and broadcasting acts, and I'm wondering what your position is on that particular proposal.

[Jean-Pierre Blais]

Perhaps it's because of my career in departments that I've always thought it's not the best thing for deputy heads to speculate on policy directions for the government.

The Broadcasting Act and the Telecommunications Act are very well-crafted documents. They are unique in that both of them have policy statements in the beginning that have allowed those objectives to evolve over time, with changes in technology and so forth.

If Parliament wishes to propose changes to the legislation, I'd be more than happy to react, but my job and my duty right now are to execute the acts as they are currently drafted. That's what we're doing—myself, my commissioners, and all the staff at the commission.

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

Unlike some previous chairs, you're not saying this should definitely be an option we should look at. You're waiting to see what we decide to do, and then you will react to our decision.

[Jean-Pierre Blais]

As you saw in my three-year plan, I think we're able to tell Canadians a story about what our work is under the pillars of “create, connect, and protect” without falling into the trap of trying to decide if it falls under the statute related to broadcasting or to telecom. That's our job. That's making sure that we're acting within our jurisdiction.

I think that distinction is not particularly important to most individual Canadians, particularly as everything converges to broadband networks.

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

Thank you for that.

As you know, being the chair of the CRTC is a difficult and daunting position. Can you tell us why you chose to accept this position?

[Jean-Pierre Blais]

Yes, sometimes I wonder about that.

To be honest, when the process first started and the headhunters approached me, I laughed it off. It really is a very, very daunting position, so I reflected a very long time. We have a situation of technology evolving extremely rapidly. What seems to be the future today simply changes tomorrow, and you can't keep up.

On the other hand—and I reflected on this when I said, “Okay, let me go through the process”—I have spent a great deal of time at the CRTC and in the Department of Canadian Heritage understanding how important the work of the commission is and what public service is, so I very much approach it in that light. Yes, it's daunting; yes, we have to make difficult decisions, about which everybody who owns a phone, a radio set, a television, or an Internet connection will have a view. It comes with the territory. However, we will try to do our very best every day.

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

As you know, our government is pushing a reduction of red tape for businesses. While the CRTC is not part of that reduction process, what are your plans to try to reduce the red tape at the CRTC?

[Jean-Pierre Blais]

On the telecommunications side, as you know, the government adopted the policy direction that already asks us to only regulate or adopt regulations when necessary to achieve the policy goals.

Similarly, section 52 of the Broadcasting Act requires us to be mindful of the burden of regulation on the entities we regulate, so in a sense it's already part of the DNA of the CRTC to think in those terms, but more so, earlier this week I asked a former colleague, Michael Presley, who is an assistant secretary at Treasury Board Secretariat, to come and talk to my employees about the red tap reduction so that we can embrace that philosophy. I think it's a valid one that just heightens what we're already doing under our legislation.

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

Chair, I'll turn my remaining time over to Mr. Young.

[The Chair, Conservative, Rob Moore]

Thank you.

Okay, there is one minute, Mr. Young.

[Terence Young, Conservative, Oakville, ON]

Thank you, Chair.

Maybe I'll start a question and we'll start an answer and I can continue later, or something creative like that.

Recently the CRTC fined two companies for violating the national do-not-call list, which many of my constituents in Oakville were very pleased to see. I want to provide you with the opportunity to take the committee through the general complaints investigation process in how the commission came to its decision in this specific case. Also, maybe you'll take some time in the second round to explain how you can enforce this law on foreign-based telemarketing companies.

[Jean-Pierre Blais]

First and foremost, the do-not-call list framework is there to protect Canadians, and it protects Canadians whether the telemarketers are operating in Canadian territory or offshore.

You can imagine that with technology, borders are easily crossed. Knowing this, we work in close cooperation with a number of our partners in other jurisdictions—the Americans, the Australians, the New Zealanders, and so forth—because it is an international cooperation.

In those particular cases, it was particularly egregious. Not only were they seemingly breaching our rules of not using the do-not-call list, which is the bailiwick of what we do under our legislation, but they were inciting people, for a fee, to put in malware, so there was a fraudulent activity on that side.

Now, that's not part of what we do, but there is an aspect of what their activities were. It is a lot about making sure that Canadians are protected in their privacy and are not bothered if they choose to be added to the do-not-call list.

[The Chair, Conservative, Rob Moore]

Thank you, Mr. Young.

Go ahead, Mr. Nantel, for seven minutes.

[Pierre Nantel, NDP, Longueuil—Pierre-Boucher, QC]

Thank you.

First of all, I would like to thank you for accepting the invitation to meet with us. Clearly, all the issues regulated by the CRTC are on everyone's lips these days. You must have been really busy in your first 100 days, certainly busier than the chairs appointed at the CRTC in previous years.

The mandate is very broad. Technology has changed a lot. It is safe to assume that, if you had been appointed 10 years ago, you would have had to deal with completely different issues. So I would like to go back to the second paragraph in your brief, where you describe the needs of Canadians.

We have seen a trend towards decentralization in terms of access to media, entertainment, news and anything that is broadcast over the air. Today, we see more media concentration. As a result, when you say that you want to ensure that all activities reflect Canada's rich regional, ethnocultural and linguistic diversity, I cannot help but think immediately about the Local Programming Improvement Fund, which, shockingly, was eliminated.

If memory serves, Commissioner Poirier, did not understand how we could hope that stations would invest in local programming without having any advertising revenue.

In your view, how can we expect local broadcasters to reinvest in local production, given that this program was cut?

[Jean-Pierre Blais]

The first time I was hired by the CRTC, a decision had just been made. More power had been given to the federal government in dealing with phone companies. I remember the regulatory framework at the time. There were monopolies, especially telephone companies, and then there were consumer groups. There was a balance between those two groups. As a result of the convergence and competition that ensued, the CRTC started to focus on the relationship between the companies, the former monopolies and the new competitors. I think that is why Canadians were perhaps left out of the equation. We are talking about balance at a number of key levels.

In terms of the Local Programming Improvement Fund, I was not part of the group who ruled on it. That decision was made before I came to the CRTC. That working group had a number of advisers. Some members expressed dissenting opinions, and that was their right. However, the majority of advisers assessed the information that was before them and they came to the conclusion that the fund had been set up to address the challenges with the transition from analog to digital television. Stations were incurring costs because of that.

In addition, at the time, we were dealing with an economic downturn, a recession, a financial crisis. The only source of funding for conventional television companies is advertising, which is in free fall. At the time, the idea was to make sure that we were helping local television companies outside major urban areas with their local production. An investment of about $106 million was made every year. But once the situation passed, the CRTC decided to gradually withdraw from the fund; the benefit was that money could go back to subscribers for the rate increases, given that some cable and satellite companies had simply passed on the costs to their subscribers.

[Pierre Nantel, NDP, Longueuil—Pierre-Boucher, QC]

So that is a bit worrisome, because no one has seen a cent of the $2 amount on the invoices of cable subscribers.

At CRTC, how do you hope to ensure that local content will not be lost if this program is no longer in existence?

[Jean-Pierre Blais]

In terms of what is happening with the companies that had passed on those costs to subscribers, the decision required them to submit a report on the reduced rates. I believe the report was due on September 17. We are in the process of studying the reports and doing the necessary follow-up.

As for the other companies, I would divide them into two categories. Some are large corporations that are interested in radio and telecommunications. We should not look at the financial health only through the perspective of those companies. Independent companies face a bigger challenge, but we are going to look at that when the time for renewal comes, since we are still reviewing licences.

In my view, one of the first obligations that a broadcaster should have has to do specifically with news and public information. The content of information is key and it should be one of the first things a broadcaster looks at. As a matter of fact, we will soon have to look at the licence renewal for CBC and that is one of the issues that we are going to discuss with them at that time.

[Pierre Nantel, NDP, Longueuil—Pierre-Boucher, QC]

The third paragraph deals with the needs of Canadians. It says that the sixth highest expense for households is communication services and that it is only natural that Canadians would have high expectations of the industry. You also talked about the invoicing practices of providers.

It is widely recognized that, in Canada, we pay a lot for cable, phone services, and so on. Do you have a restructuring plan or idea to try to bring the prices down in Canada?