Canadian Heritage Committee on March 9th, 2015

[The Chair, Conservative, Gord Brown]

They'll have about 15 seconds each. Sorry.

[Ken Dhaliwal]

One of the funding sources—not tax credits—is Telefilm Canada, which funds a lot of movies over the course of the year. You could perhaps look at some of the rules and regulations of Telefilm and some of the metrics for success on how they advance money.

[Lui Petrollini]

[Inaudible—Editor] the thing is, Mr. Dhaliwal, making sure we review Telefilm Canada and their policies and making sure that we have an equitable distribution of funds across the country to assist producers.

[The Chair, Conservative, Gord Brown]

All right. Thank you very much.

We have about two minutes left, and we're going to go to Mr. Dykstra.

[Rick Dykstra, Conservative, St. Catharines, ON]

Thank you.

I'll go quickly and jump into this.

Mr. Joly, you mentioned a couple of times, and also based on the video we saw in terms of WolfCop.... In Saskatchewan, where they don't offer tax credits, what's the pull? What's the draw? It doesn't seem that it's necessarily the only thing that is going to carry the industry through in Canada. There are other pieces of this that need to be addressed. I just wonder if you could touch on that.

[J. Joly]

Yes, I'm going to go through it quickly. At the time we made WolfCop, there wasn't a tax credit and there wasn't a CreativeSask. We were in a really weird zone. That's where the entrepreneur in me came in.

You have to realize that WolfCop.... On the last round of voting, there were billboards being put up by private citizens in Regina. The government, again, gave us money so I didn't move it to Manitoba, because it was such a groundswell of their culture and their local thing. Again, the Saskatchewan government wanted to be in the business of WolfCop, just to be completely transparent. That's a marketing thing.

[Rick Dykstra, Conservative, St. Catharines, ON]

My son is a film studies major. He has graduated. There is one thing he kept talking about and has urged me to ask, so I will, of all three of you.

We have all these Canadian Cineplex Odeon theatres across the country that are used as a particular point of entry for all the high-revenue and obviously, hopefully, the big-hit wonders for those who invest at the cinemas, but there is a ton of off-time when the screens are black.

What do you guys think about the opportunity of using those screens or the potential of assisting those theatres in showing Canadian films in off-times, or at least times in which they could get some exposure they wouldn't potentially get now? It would obviously be in such a way that it wouldn't be that cost-prohibitive to do.

[Ken Dhaliwal]

If you could speak to Cineplex and find a way to make it work, I think it's a great idea.

[The Chair, Conservative, Gord Brown]

All right, on that note we're going to wrap up.

Thank you to our witnesses for their contributions.

If you have anything further that you would like to contribute, we'd appreciate that, as well.

We are going to briefly suspend.

[The Chair, Conservative, Gord Brown]

Good afternoon, everyone.

We are going to call meeting number 36 of the Standing Committee on Canadian Heritage back to order. We are continuing our study of the Canadian feature film industry.

We are going to hear from three witnesses in this second hour. We have Patrick Roy, president, Entertainment One Films Canada and Les Films Seville; Richard Rapkowski, from the Canadian Association of Film Distributors and Exporters; and Naveen Prasad, from Elevation Pictures, who is the executive vice-president and general manager.

Monsieur Roy, you have the floor for eight minutes.

[Patrick Roy, President, Entertainment One Films Canada and Les Films Seville, Entertainment One]

Thank you, Mr. Chair and members of the committee.

My name is Patrick Roy, and I am here representing Entertainment One and its Quebec-headquartered business, Les Films Séville. Thank you for the invitation to contribute to this study of our sector.

Kindly note that we are members of the CMPA, or the Canadian Media Production Association, and the CAFDE, the Canadian Association of Film Distributors and Exporters. Our remarks here today follow the spirit and substance of their respective submissions.

Headquartered in Toronto and Montreal, eOne and Les Films Seville are global entertainment leaders in independent content ownership and distribution of film, television, and music. eOne has 1,700 employees worldwide, including over 800 employees across Canada, with offices in eight countries.

In the most recent year, eOne invested more than $500 million in film and television content. Listed on the London Stock Exchange, we go to the open market and get investors' capital to make investments in Canadian content, and we have built a global content company headquartered here at home.

eOne believes that a strong production and broadcast environment is essential for the continued success of the Canadian television and film industry in its objective to create and produce compelling and diverse Canadian television, film, and non-linear digital programming that resonates with Canadians and can be successfully exported to the global marketplace.

In 2014, eOne invested $17.5 million in English- and French-language Canadian films, which amounted to $23.5 million in box office revenues in Canada. The company released over 200 feature films to theatres around the world. Many of those were Canadian films.

We also launched Séville International, a Montreal-based boutique international sales company, to source and secure English- and French-language Canadian films for worldwide distribution. Séville International helped many Canadian films gain global recognition. One example is Xavier Dolan's Mommy, which was sold in virtually every country in the world.

As you know, our industry is changing quickly. Distributors are at the heart of all those changes; consequently, we constantly have to reinvent ourselves. Theatrical movie going has decreased in recent years, and audiences can now discover movies on a variety of new platforms at home. Canadians today have access to a vast array of programming services and on-demand film and television content from all over the world, all competing for the viewers' time, attention and money.

These proceedings and all of the outcomes that influence the production, broadcast, distribution and export ecosystem for Canadian films are clearly of great interest and importance to us. Sustained access to U.S. and foreign films and the ability to distribute those films within our borders play a significant role in the Canadian film industry.

The box office in Canada largely belongs to American films, and while we have a world-class creative community in Canada, resources and reach are limited in the face of the 90% of North America that is the U.S.

A comprehensive distribution policy was effected in 1988 to support the objectives and preserve the integrity of the Canadian film industry as we mitigated the increasing risk of encroachment by new U.S. and foreign players not grandfathered within it. While the policy continues to shape how Canadian distributors operate within the Canadian ecosystem, non-enforcement of the policy is of growing concern.

We are seeing more and more cases where the distribution policy is being manipulated and loopholed in ways, we might suggest, it was never intended.

We understand that the committee is interested in hearing our thoughts about the effectiveness of government funding programs, ways to promote the value of the industry, the quality production services offered in Canada, the exceptional content that is created by our talented Canadians, and recommendations regarding support for the Canadian film industry.

I would like to take this opportunity to thank the Government of Canada, Minister Glover, and the Department of Canadian Heritage and Official Languages for their continuing partnerships across our business and their ongoing support.

Film production is a complex business that requires expertise and significant resources. In Canada, the funding to get a film made comes mainly from three source: distributors, who purchase the rights to sell the film to audiences at home and to other distributors abroad; government agencies, who fund the tax credits and Telefilm Canada; and broadcasters, who pre-licence TV rights. This trifecta—distribution, government, and television—ensures that films get made and have a post-theatrical home on television, where most Canadians access the majority of their filmed entertainment. The belief has long been that the taxpayers who contribute to the creation of the film should be able to access them as easily as they do U.S. and foreign films.

While we, as distributors, continue to find new and innovative ways to engage with audiences, the health—and the very existence—of our sector depends on support from broadcasters, exhibitors and government partners alike.

Telefilm Canada is an instrumental partner in our efforts to deliver great Canadian films. There are a number of areas where we can improve our partnership, many of which rely on Telefilm Canada having the necessary resources it needs to market and promote Canadian films.

In broadcast and exhibition, consolidation has limited our options for delivering Canadian films to Canadian audiences. This is particularly prevalent in English Canada, where fewer and fewer players are buying Canadian films and consolidation in theatrical exhibition has concentrated cinema ownership in the hands of one company.

In Quebec, our broadcasters often invest in our films. As a result of their support, films are getting made, marketed, and shown on television to hundreds of thousands of people at a time. The model in Quebec has enabled us to entertain audiences with great films and, in turn, they are excited about local productions and want more.

Broadcasters are the drivers, delivering access and creating demand. However, accessibility is only possible if we have a healthy production sector in Canada and we can invest in quality films for distribution across the country and around the world. The model is at risk without public support and public support is only possible if Canadians can see the variety of our quality films.

The film industry in Quebec is doing well, partially due to the fact that we get that full support from broadcasters, alongside the support of government and distributers. They are living up to their obligations to the CRTC and the public, and profiting from this. It's working because along with the world class talent and government support, which English Canada certainly has as well, we have broadcaster support.

In this golden age of scripted television, broadcasters in English Canada are focused on series and low-cost reality television, but they continue to enjoy a huge advantage: privileged access to public airwaves. They are protected. In exchange for their protected status, they have an important responsibility to showcase Canadian culture and invest in the industry that carries the dual function of telling our stories and creating economic opportunities for the tens of thousands of Canadians who work in filmed entertainment.

We recently spoke in front of the Standing Senate Committee on Transport and Communications, and among other recommendations regarding broadcaster mandates, we shared our belief that the CBC should aspire to be the home of Canadian films. National broadcasters around the world are the number one place for domestic audiences to see their stories, and our stories have never been better.

As distributors, we are fortunate to watch our homegrown talent from the front row seat. We work with creative and acting talent throughout the life cycle of our films, on all platforms.

Today, Canadian films are stronger than ever. eOne saw seven of our films exceed the $1-million box office mark in 2014. But even as the quality goes up, it remains nearly impossible to find those films on English-Canadian television.

Canadian writers and directors, who are finding major success on both sides of the border, want to work at home and make films that have not only Canadian sensibilities but feature real Canadian cities and stories.

They are doing it: Cronenberg, Egoyan, Vallée, Villeneuve, Dowse, and Falardeau, to name a few.

They are also finding success around the world, proving that Canadian films can be exported and the profits derived from them can be reinvested if ownership is kept in the hands of Canadians.

Xavier Dolan's Mommy was seen by over 1.2 million people in theatres so far in France. The Grand Seduction captivated audiences around the world, with over $300,000 in box office revenue in the U.K. alone.

Canadian films may not add zeros like simulcasting U.S. television programming does, or be as cheap as reality shows, but they are part of our cultural fabric. Even more they are an important part of the economic model. Importing content has no employment benefits and does nothing to tell the Canadian story at home or around the world. Every film made in Canada further defines our identity and employs hundreds of highly skilled Canadians. Today we are facing a new reality for the film industry, but working with an outdated model and playbook.

How do we move into the future? We must do everything we can to ensure the production of films that are aligned with market interests at home and abroad. We must own international sales companies that showcase our stories around the world. We must embrace new technologies. We must respect the digital consumer who wants to watch what they want, where they want, and make it available across all screens.

The government can play an important role by ensuring that Telefilm Canada has enough resources and support to help market and promote Canadian feature films. This would increase the demand, initiate more production, and ultimately create more jobs in our sector. The government can help us by enforcing the 1988 distribution policy and by ensuring that Canadian films are available to Canadians on television, where they play on a consistent basis for all Canadian audiences. In English Canada the increasing investment in, and popularity of, television content made film even less of a priority for broadcasters who remain privileged and protected, but are not living up to their requirements when it comes to film production.

The CRTC can support our sector by making a small change to the Canadian content regulations and adding a new category of programming for film, distinct from dramatic television series, that enshrines feature film in its own category with resources of its own.

Delivering Canadian films to audiences at home and around the world, while continuing to create quality jobs in Canada, is our shared opportunity. We are keen and available at any time to be involved in proceedings and discussions that impact our sector. Please do not hesitate to call on us.

Thank you very much for the opportunity to speak before the committee today. I am available to answer your questions.

[The Chair, Conservative, Gord Brown]

Thank you.

[Richard Rapkowski, Canadian Association of Film Distributors and Exporters]

Thank you.

I would like to thank the members of the committee for launching this review of the Canadian feature film industry. My name is Richard Rapkowski. I'm here today to represent the Canadian Association of Film Distributors and Exporters, otherwise known as CAFDE.

CAFDE is a non-profit trade organization that serves to represent the Canadian film distribution industry and its members on matters of national interest. Current membership includes D Films, Elevation Pictures, Entertainment One, Les Films Séville, IndieCan Entertainment, KinoSmith, Métropole Films, Mongrel Media, Pacific Northwest Pictures, and Search Engine Films.

Members of CAFDE are responsible for the vast majority of theatrical releases in Canada and are in fact responsible for two and half times more theatrical releases in Canada than the six major Hollywood studios combined.

In regard to the development, production, and distribution of Canadian films specifically, CAFDE members play an essential role. As distributors, we have a specialized understanding of the film market and consumer tastes, and we invest our private funds in the Canadian films that we believe have consumer appeal and commercial potential. Telefilm Canada relies on our investment decisions as a signal for which film projects merit the investment of public funds. As such, CAFDE members have a vested interest in the continued success of the Canadian film industry, and we follow all proceedings that can and will impact Canadian cinema with great interest.

We believe there are three main policy issues for the government to consider to support and strengthen the Canadian feature film industry: first, enforcement of the 1988 distribution policy; second, a reflection on such policy in light of the increased importance of ancillary windows in distribution; and third, the need for renewed broadcast support, especially from the CBC for Canadian feature films.

The first and arguably the most substantive policy issue is the critical need for the robust application of the 1988 distribution policy. As this committee knows, for much of the 20th century Canadian feature films struggled to get produced, and even when they did they faced an uphill battle in order to find a place on cinema screens. This was largely due to the unfettered domination of the major U.S. studios that paternalistically viewed Canada as an extension of the American domestic market.

However, in 1988, the Conservative government led a bold initiative to modernize the Canadian film industry by announcing a new film distribution policy. The purpose of the policy was to promote a dynamic and viable Canadian film industry by developing Canada as a separate distribution market and to support distributors who invest in and promote Canadian films in Canada.

At its root, the policy recognized the crucial role that distributors play in supporting Canadian culture and that a strong distribution sector is vital for the long-term success of the Canadian feature film industry. It reflected the market reality that Canadian distribution companies need access to foreign films to sustain businesses that can then afford to invest in Canadian films.

Flora MacDonald, the then minister of communications, introduced the film products importation bill to parliament, which would have afforded Canadian distributors fair access to film distribution rights in Canada and the necessary protections to fend off Hollywood studios that were increasingly encroaching on the Canadian film landscape and siphoning revenue from entertainment consumption out of the country. Unfortunately, however, due to the intense lobbying efforts of the Motion Picture Association of America representing the major studios, the bill never came to fruition.

Nevertheless, the spirit of the bill remains intact on a policy level. It created a distinct Canadian distribution market and required the theatrical and home video distribution of motion pictures in Canada to be carried out by Canadian owned and controlled distributors.

There are caveats to the policy. It only applies to non-proprietary product, which means those films that are not financed or owned by the company seeking to distribute in Canada, and the policy does not apply to the foreign-owned Hollywood studios, i.e., Universal, Paramount, Disney, 20th Century Fox, Sony, and Warner Bros. They were grandfathered in, allowing them to continue to distribute their films in Canada.

As Ms. MacDonald outlined at the time of tabling the initial bill, the government intention was that “foreign-owned film distributors will be able to import for distribution films in which they have a significant financial risk, and which we consider, for all intents and purposes, to be 'their' films”. The intent of the policy was not “to promote the personal well-being of Canadian film distributors...[but rather]...to enable them to earn a normal share of the Canadian film market, so as to encourage the re-channelling of funds back into the Canadian film industry”.

To accomplish that goal, the policy required that non-proprietary films be distributed in Canada by Canadian-owned and -controlled distribution companies. This policy was an unequivocal success, resulting in the strengthening of the Canadian distribution sector, which was now finally able to invest in new Canadian feature films that have the market strength to be distributed properly and sustainably. The government's achievement with the policy is evident: 2014 was one of the strongest years for critical acclaim of Canadian film in recent history. This past year at the international Cannes film festival, a record three Canadian films were in official competition. There we witnessed a standing ovation for Atom Egoyan's film The Captive, acting awards for Julianne Moore in David Cronenberg's Maps to the Stars, which went on to earn a Golden Globe nomination, and a jury prize for Xavier Dolan's film, Mommy.

Unfortunately, the hard-fought gains that Heritage Canada has made in the sector are threatened of late, with recent developments signalling a disturbing erosion of the policy and its intent, an erosion that will inevitably lead to a decline in the success that the sector and the government have worked so hard to achieve for close to three decades.

For example, Warner Bros. Entertainment Inc. released the film Transcendence in Canada in April 2014. Transcendence is not a proprietary film. Warner Bros. does not own or control world-wide rights. Rather, Warner Bros. simply acquired Canadian distribution rights on the open market as an add-on to its right to distribute the film in the United States. Warner Bros. did not produce the film, nor does it own or control any rights outside of North America.

Though Warner Bros. is a major U.S. studio and therefore arguably falls within the grandfathered exception contained in the film distribution policy, the intent of the policy was to create a distinct Canadian marketplace for this very type of independent film. When the policy was introduced in 1988, major U.S. studios did not acquire independent films for distribution in North America. The studios were solely in the business of distributing their own proprietary product on a world-wide basis, and so such exploitation would not have been contemplated as being captured by the grandfathered exception. Allowing the major studios to use their grandfathered status as a sword to distribute independent, non-proprietary films in Canada, instead of using it as a shield for proprietary content as intended, puts the entire policy at risk, and certainly the intent of the policy is not being met.

Another recent and even more disturbing example is provided by the film Story of Your Life. In this case, Paramount Pictures lumped Canadian distribution rights into its acquisition of U.S. distribution rights. Once again, Story of Your Life is not a proprietary film. In fact, a number of CAFDE members tried very hard to acquire Canadian rights to the film but were precluded when Paramount made Canadian rights a condition of its offer to distribute in the U.S.

What is particularly irksome about this example is that the film is being directed by Denis Villeneuve, one of Canada's most talented directors, whose career has been supported and nourished by Canadian distributors and Canadian funding agencies. His films Polytechnique, Incendies, and Enemy are all examples of Canadian films that have achieved both critical and commercial success in Canada and abroad. He is in many ways a byproduct of the success of the distribution policy. Although Story of Your Life is not a Canadian film, it is still a non-proprietary, independent film with a marketable Canadian director and cast, which Canadian distributors were unable to compete for, given the unfettered heft of the U.S. studios.

This has been followed by another more alarming example. Just recently, Sony Pictures has agreed to distribute a suite of films in Canada to which they do not even hold U.S. rights, in the most egregious violation of the policy to date. In that instance, all U.S. rights are owned by a company called Open Road Films, a U.S. distributor that cannot avail itself of the grandfathered exception to the policy. Rather than engage a Canadian-owned distribution company to handle the films in Canada, they licensed their slate to Sony. Once again, a number of our members sought to acquire this lucrative deal with Open Road Films.

This example demonstrates clearly the slippery slope of allowing the U.S. studios to fly in the face of the spirit and intent of the policy. The erosion of the policy's protections puts the gains that the sector and Heritage Canada have made to date in jeopardy. I can assure you that, if left unchecked, these activities will decimate the Canadian distribution sector.

Canadian distributors play a vital role in supporting Canadian culture. They help to finance Canadian feature films and implement the marketing strategies for their release to Canadian consumers. In fact, in the last decade alone, CAFDE members have invested upwards of $400 million in Canadian production. However, as I mentioned previously, the annual output of Canadian films is not in and of itself sufficient to sustain the business activities of Canadian-owned distributors. They rely on access to foreign independent films—i.e., foreign non-proprietary films—to generate sufficient returns from the marketplace across its entire portfolio of films. Canadian owned and controlled distribution companies hold a small share of the Canadian theatrical market compared to their foreign-owned Hollywood counterparts.

In order to demonstrate the dominance of the major Hollywood studios, let us consider the most recent complete data set from Rentrak Box Office Essentials, which shows a total Canadian box office revenue of approximately $970 million. Of that $748 million, or 77% of the market share, went to the six major U.S. studios. The independent studios meanwhile accounted for $223 million or 23% of the market share. Yet while enjoying the dominant share of the market, the major Hollywood studios do not invest in or distribute any Canadian films.

The film distribution policy addresses these facts and creates a profitable distribution sector, which is in a stronger position to invest in and market Canadian feature films. The government’s continued commitment to supporting the Canadian feature film industry and to upholding the film distribution policy is of paramount importance to CAFDE members who have built their businesses on the basis of this policy, as well as the indigenous feature film industry in Canada, which is of vital cultural and economic importance to Canada.

Allowing the foreign-owned studios to run roughshod over the intent of the policy will have dire consequences for the Canadian owned and controlled distribution sector and its continued ability to finance and market Canadian films. Additionally, in allowing these foreign-owned studios to intrude into the distinct Canadian film market it signals that the Government of Canada is no longer concerned about the cultural and economic considerations that engendered the policy and paves the way for the U.S. studios to bypass Canadian distributors and take an even greater share of profits from Canadian distribution out of Canada.

As I mentioned, CAFDE members’ commitment to financing and distributing Canadian content while sustaining business operations in this competitive marketplace is in large part contingent upon the government’s enforcement of the Canadian film distribution policy. Looking forward we think it will also require a willingness on the part of the government to modernize its application of the policy so that its intent is preserved in the face of a changing landscape.

Our second policy initiative focuses on this changing landscape.

[The Chair, Conservative, Gord Brown]

Excuse me, Mr. Rapkowski.

[Richard Rapkowski]

Yes.

[The Chair, Conservative, Gord Brown]

I'm trying to give time to our witnesses to make their presentations but yours is going way over time. Could you maybe wrap it up in about 10 or 15 seconds please.

[Naveen Prasad, Executive Vice-President and General Manager, Elevation Pictures]

If it's all right. Because CAFDE speaks on behalf of Elevation, I'm willing to shorten my talk.

[Richard Rapkowski]

I'll be very quick. Thank you, though. I do have a tendency to go on and on.

Our second policy initiative focuses on this changing landscape. In an era where increased ancillary exploitation such as digital and on-demand services are coupled with plateaued theatrical movie going, the film industry is facing major and complex challenges. Whereas Canadians used to enjoy films primarily on the theatrical screen, they are now increasingly opting for their television or mobile screens. While DVD sales once used to be a lucrative source for films, we are now seeing their ongoing decline, replaced by digital sales.

The 1988 film distribution policy is in many ways responsible for the success of the Canadian feature film industry. However, in light of the advent and the ubiquity of over the top services like Netflix, it is also out of date and out of step with the Canadian reality. Twenty-seven years ago it made sense to limit the scope of the distribution policy to theatrical releases and video sales, as those were the only two mediums that existed for audiences. That is no longer true today, as Canadian consumers are increasingly opting for digital media and television in order to watch feature films.

CAFDE recognizes that the issue of digital and OTT services is an incredibly complex one, but it is nevertheless a pressing matter that must be addressed. As it stands, OTT services like Netflix effectively operate beyond the bounds of the Canadian regulatory system, undermining many of the tenets that the film and television industries are based on.

CAFDE understands how multi-faceted and truly complex an issue this is. Without studying the matter further, any potential progress that could be made risks getting buried under unsubstantiated rhetoric. As such, we are of the opinion that this matter should be further studied in transparent and comprehensive consultation with all key stakeholders in order to come up with an innovative solution that will ensure a strong Canadian feature film industry.

I thank the committee for allowing me to speak today. I'm sorry for going overtime.

[The Chair, Conservative, Gord Brown]

Thank you very much.

We'll now move to Naveen Prasad from Elevation Pictures.

[Naveen Prasad]

Thank you very much.

Thank you, members of the committee, for the invitation to speak to you guys today.

I'm Naveen Prasad, executive vice-president and general manager of Elevation Pictures Corp. We're a private Canadian film and television company, based in Toronto, which launched just under a year and half ago. I myself have had the privilege of working in the Canadian content distribution industry and in partnership with this country's independent film and television production community for over 15 years. I echo the points made by Mr. Rapkowski and Monsieur Roy, and, therefore, I'll be a bit more brief than they were, but I'll provide further colour and thoughts based on my professional knowledge and by highlighting some of my company's current activities.

My company's business plan has us releasing about 20 theatrical releases per year, of which about five are certified Canadian content. Some of our upcoming Canadian film releases include Patricia Rozema's Into the Forest, starring Ellen Page; Room, based on a novel by fellow Canadian Emma Donoghue, which was a New York Times bestseller and was shortlisted for both the Booker Prize and the Governor General's Awards;Regression, a $20-million Canadian co-production with Spain, which has already secured a wide-release commitment stateside by the Weinstein Company; and Hyena Road, Paul Gross' upcoming epic about the Canadian military's efforts and sacrifices made during Afghanistan. Perhaps you saw the teaser trailer, which we were able to secure on the front of both The Imitation Game and American Sniper in theatres. If not, it would great if you guys could check it out. We're really pleased to get that type of awareness for a Canadian film like that.

I'm highlighting these titles as examples of what we, as an industry, are bringing to Canadian audiences. My friends here at eOne and the rest of the CAFDE company members have brought many other important, successful and culturally valued films to market, and while doing so have helped to foster various generations of talent. Collectively, we spend tens of millions of dollars annually supporting the production, distribution, and marketing of Canadian films. Now while about a quarter of my company's films are Canadian, we still rely on being able to secure many foreign films, the majority being non-studio Hollywood features. We require this mix of content and this number of overall titles to remain fiscally sound.

We are independent companies that have to compete with U.S. studios across all distribution windows. Those include theatrical, DVD, VOD, pay-per-view, television broadcasts, and over-the-top SVOD. Our slate of production and access thereto need to be competitive at all these levels of distribution. But in the end, we won't be able to compete with the leverage some of the studios have now begun exerting to acquire what are in fact non-studio films, some example of which Mr. Rapkowski just spoke.

To reiterate what was said earlier on, our ability to invest in bringing Canadian films to theatres and homes is directly tied to our ability to secure the rights to the non-studio fare. We are looking for this committee's support and resolve to further strengthen the film distribution policy of 1988 to help us in this effort.

To circle back to Canadian films, I'm very proud of how the overall industry has grown over the past few decades. The support of Telefilm Canada, broadcasters, and us film distributors has played an important role in advancing our nation's production industry and filmmaking community. I've often referred to it as the three-legged stool, but it's clear that some of the legs are now beginning to wobble. Telefilm Canada has been a great champion and key catalyst in getting Canadian films made. I realize, given Heritage's oversight of Telefilm, that what I'm saying is not new to you, but I'd be remiss if I did not at least mention how much we, as a distributor, value their partnership. The financial support they provide through the development, production, and marketing of films cannot be understated.

The 2013 Nordicity report, “The Economic Contribution of the Film and Television Sector in Canada”, in which Telefilm plays a large role, stated that in 2011 the industry provided over 260,000 full-time jobs; generated $12.8 billion in labour income, $20.4 billion in GDP, and $2.4 billion in exports; and returned $2.8 billion in federal taxes. These are fantastic figures. I kindly ask that this committee work to ensure that Telefilm's funding capabilities not only be maintained so that it can continue to help stimulate such continued economic success but also be further strengthened to the level it was at prior to the $10.6 million in funding cuts imposed on it back in 2012. To a business person, it seems penny wise and pound foolish to have scaled back on an investment that pays back so well.

While the goals of Heritage and the CRTC should be aligned, there has been—and I quote the Standing Committee on Canadian Heritage's previous statement back in 2005—an “absence of a broadcasting policy to support the promotion of Canadian feature films”. Sadly, that holds true a decade later: There are no broadcast regulatory requirements designed to truly support domestic feature films. Under the group-based licensing, as approved by the CRTC, feature film has no defined standing under any broadcaster's program expenditure requirements.

Nevertheless, the success of Canadian films is and will continue to be dependent on broadcast licences, at both the premium pay level and the post-pay windows of conventional and specialty. I ask that Heritage and the CRTC work together to set meaningful benchmarks for the programming of Canadian films across all broadcast windows.

Again, I appreciate this opportunity to speak before you guys today. I would be happy to answer any questions you may have.

[The Chair, Conservative, Gord Brown]

Thank you very much.

We're going to move to the questions and go to Mr. Weston for up to seven minutes.

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

If this succeeds today, then maybe the headline should be “Big save by Patrick Roy, this time in the film sector”.

Thank you. You have given us a lot of information, but you have done so very quickly.

Let me make sure, for the benefit of slow-thinking parliamentarians, that we're keeping up with what you told us.

Firstly, distribution is a big form of employment, as you said at the beginning, Mr. Roy, and you gave us a number for how many jobs depend on it.

[Patrick Roy]

No, I don't know how many jobs in Canada, but maybe Richard does.

[Richard Rapkowski]

I don't have that figure. We would be happy to provide that as a follow-up to our remarks.

[Patrick Roy]

The jobs I was talking about are at eOne.