Canadian Heritage Committee on March 9th, 2015

[John Weston, Conservative, West Vancouver—Sunshine Coast—Sea to Sky Country, BC]

But not TV.

[Richard Rapkowski]

Not TV, not OTT, not digital.

[John Weston, Conservative, West Vancouver—Sunshine Coast—Sea to Sky Country, BC]

Somebody said earlier on that most Canadians are now watching on TV, digital. Do we know the percentages?

[The Chair, Conservative, Gord Brown]

Mr. Weston, we're going to have to wrap up.

We're now going to move to Ms. Nash and Ms. Sitsabaiesan for up to seven minutes.

[Rathika Sitsabaiesan, NDP, Scarborough—Rouge River, ON]

Thank you.

Mr. Rapkowski, I know you had more notes that you wanted to read into the record, but if you could maybe send in your complete speaking notes to the clerk, we could have them entered in as evidence for the committee. Thank you. Anything else you do want to submit, if you send it in writing, we could also have that available for us to go through and to add to the report.

My question is maybe semantics related, I'm not sure. Mr. Rapkowski, you mentioned that you'd like to see enforcement of the 1988 distribution policy, and Mr. Prasad, you mentioned that you'd like to see it strengthened. I think we've had a little bit of a breakdown, and I don't want to call it protectionism, but really it's about protecting our local industry and allowing for the growth or our local, domestic distributors.

Is the piece that we've hammered in a little bit, what you're saying, Mr. Rapkowski, namely about the enforcement of the 1988 distribution policy? Mr. Prasad, you were saying you want to strengthen it. How?

Either one of you can answer.

[Naveen Prasad]

I don't necessarily have a solution here to present today.

[Rathika Sitsabaiesan, NDP, Scarborough—Rouge River, ON]

Not now? No? Okay, you can send it in by writing if you'd like.

[Naveen Prasad]

This is something that we've noticed happening over the past year, year and a half. It is a real concern because my company had tried to acquire the rights for these films that Richard was talking about—and I suspect Patrick's company was as well. We compete for films all the time. Then to be undermined by a U.S. studio outright, without even being able to have a discussion, is an issue.

It's my understanding that if the film distribution policy of 1988 were strengthened, we could go back to it so we could prevent this from happening. I'm not by any means a lawyer or legislator in any regard, so I can't tell you the steps taken.

[Rathika Sitsabaiesan, NDP, Scarborough—Rouge River, ON]

Exactly how, the minutiae of how....

[Naveen Prasad]

I can tell you that if it continues, it's going to put companies like mine in peril.

[Rathika Sitsabaiesan, NDP, Scarborough—Rouge River, ON]

When somebody asked about the number of jobs in the film distribution industry in Canada, I think Mr. Rapkowski said he could send that in. If you could send that number in, it would give us an idea of the number of jobs that are available in the industry today and what types of effects it could have if these large U.S. studios were allowed to continue to undermine the intent of the 1988 distribution policy.

I'll ask one more question. The rest of my time is for Peggy.

I want to ask about the technological change and the shift that's happened. I think it's been 10 years since the last study was done. You can talk about whatever timeline you'd like to.

How has that affected the work you're doing with respect to distribution? What type of legislative adjustments, if any, that you know of or can think of, need to happen to facilitate the work you're doing in distribution? If you'd like to, go on to content creators.

[Naveen Prasad]

Is that our turn to speak?

[Rathika Sitsabaiesan, NDP, Scarborough—Rouge River, ON]

Sure.

[Naveen Prasad]

Over the past 10 years, digital distribution has emerged in, I would say, two main forms, the first being transactional VOD and electronic sell through—that is, the likes of iTunes, Rogers on Demand, Bell IPTV or Bell Fibe—which has grown. This is a case in which consumers are renting or purchasing the right to own a movie. It has supplanted DVD revenue, but it hasn't grown to the point that it has taken over or by any means made up for it; there is a decline. So the decline in home video has continued and the rise of transactional has risen, but it doesn't look as though they will ever meet.

Then the coming of Netflix to Canada was probably one of the larger shifts. They are acquiring content on an SVOD or subscription VOD basis. I don't think anybody here is suggesting, by any means.... We work with Netflix. and they have been good buyers of both our foreign content and some Canadian content as well. But the advantage they have, as far as obligations are concerned, relates to the broadcasters.

[Richard Rapkowski]

If I can touch on a—

[The Chair, Conservative, Gord Brown]

Excuse me. Ms. Nash wanted to get in.

[Peggy Nash, NDP, Parkdale—High Park, ON]

I just want to get a couple of minutes to ask questions. I want to thank you, Mr. Rapkowski, for your explanation about the enforcement of the 1988 agreement and law. But I want to ask my question to Mr. Roy.

First of all, thank you for the role that Entertainment One plays in the Canadian market. I think your company plays a very valuable role for Canadian content and distribution.

I want to pursue the point you raised about Canadian content and TV broadcasters, that there should be a dedicated portion of Canadian content dedicated to Canadian feature film. That obviously is not happening now.

Can you describe what needs to change and what difference it would make to the industry?

[Patrick Roy]

I think what's important is that we make films in Canada. Heritage Canada is helping to finance these films with tax credits, with Telefilm Canada. Then we have the CRTC; they regulate the broadcasters. But it's as if there is no link between the two, and we need to have a link, because broadcasters should buy Canadian films and offer these films to the Canadian audience.

The impact we have seen in Quebec is that the more you see these films on TV, the more you're able to reach hundreds of thousands of people at the same time, and then these people discover what Canadian films are. They love these films; then they want to see more of them and they go into theatres after that to see the next ones.

[Peggy Nash, NDP, Parkdale—High Park, ON]

Can I ask you, is there a difference in Quebec?

[Patrick Roy]

Yes. In Quebec, we have really strong support from Radio-Canada.

[Peggy Nash, NDP, Parkdale—High Park, ON]

Ah. Okay.

[Patrick Roy]

They buy, I would say, almost 90% of the French-Canadian films. They're doing really well with these films. Many people are watching them, and that has an effect on the entire business. So that's what we—

[The Chair, Conservative, Gord Brown]

Thank you very much.

[Patrick Roy]

—would like to have in English Canada.

[The Chair, Conservative, Gord Brown]

We have to move on.

Mr. Dion, go ahead for seven minutes.