Canadian Heritage Committee on March 23rd, 2015

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

Absolutely.

I realize that I forgot to thank you for being here, because clearly we have a big delegation, and you are representing totally our content providers for our Canadian identity and the very important shooting industry for movies for the United States. As well, I'm quite certain that if you have a steady job making these foreign films in Canada, you may bring on your weekends some support to some Canadian talent who wants to shoot a short film about something else, with all this technology and all these tools that are available.

Isn't all this foreign work bringing a kind of solidity to the milieu, bringing these special film festivals to Vancouver that wouldn't exist were it not for that much foreign shooting?

[Michael Hennessy]

It is an incredibly important element. I think the emergence of a foreign production industry in this country.... As I said, in most productions you're now talking about 90% or 95% Canadian talent they trust us so much to do a good job. That really keeps the doors open for the auteurs, for the Canadian producers, in between the projects they're on. It's incredibly important.

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

Thank you very much for your answer.

I'd like to talk about something else.

We all know that the goal of this study is to look at how quickly technologies have been developing. I'm thinking of the display devices, iPads and on-demand video, which go against the content quotas our government practices have promoted so far.

You have given us some recommendations, but do you think there are people we should meet with as a matter of urgency? Time is running out, and I'm worried that this study will not be as comprehensive as the previous one. Do you feel that certain issues are more crucial than others?

Times are changing. Last week, the CRTC made some changes in television. The same producers are often involved. The ways of doing business have been turned upside down. There used to be a framework that established how a producer should do business with a broadcaster. Are these changes positive or negative? I imagine it's very disturbing for you to see small producers being exposed to large broadcasting conglomerates.

[Jennifer Jonas]

You are asking a number of questions simultaneously.

[The Chair, Conservative, Gord Brown]

It will have to be a one-word answer.

[Voices]

Oh, oh!

[Michael Hennessy]

I will choose my words very carefully, because it's a very loaded question, one which I appreciate the opportunity to speak to.

You're quite right that the world is changing. I think the CRTC's decision and the government's direction to look at making things more on demand, more à la carte, more consumer focused, ensuring that your audiences are engaged and happy with the product you're producing, is the right way to go. Even though it is challenging, through that challenge I think we'll be better able to compete in what's becoming increasingly a global market. No problem there—

[The Chair, Conservative, Gord Brown]

Thank you. We're going to move on.

Mr. Dion, the floor is yours. You have seven minutes.

[Stéphane Dion, Liberal, Saint-Laurent—Cartierville, QC]

Thank you very much, Mr. Chair.

Thank you very much, madam and gentlemen, for your presentations and for being with us.

I identified seven recommendations and we have seven minutes. The first one you discussed a bit with Monsieur Nantel. It's your recommendation about the CBC. I just want to clarify something that gives me some concern. It's in regard to the way it is written, as follows:

...we would fully support a recommendation from this Committee that the CBC be given additional resources to carry out such an initiative to help develop, produce and showcase Canadian films, and especially English-language films.

Are you saying that you want the government to give more funding to the CBC than to Radio-Canada because Radio-Canada is already doing the job and the CBC is not, so fund the CBC instead of saying to the CBC, “Do like Radio-Canada does”? But don't penalize Radio-Canada in saying that Radio-Canada should not receive the funds because Radio-Canada is already doing the job.

Do you see my concern?

[Michael Hennessy]

Yes. That's a very good point, and it wasn't what we were intending to say.

[Stéphane Dion, Liberal, Saint-Laurent—Cartierville, QC]

Thank you.

Okay, I'm pleased with this one.

I will continue in French, because I read your presentation in French.

The second issue you talked about was programs of national interest. You also started talking about the CRTC. You say that you would prefer to start with the carrot than the stick. You say that you have a suggestion about the carrot, but can you tell us more about that?

[Michael Hennessy]

Sorry, on programs of national interest, the first thing that Mr. Séguin just described was in terms of incentives for the broadcasters to consider investing more in film rather than TV, because there's bonusing built into the Canada Media Fund.

[Stéphane Dion, Liberal, Saint-Laurent—Cartierville, QC]

That's what you meant by your proposition. Can you send this proposition to the committee? You mentioned that you presented it to the Canada Media Fund.

[Marc Séguin]

Absolutely.

[Stéphane Dion, Liberal, Saint-Laurent—Cartierville, QC]

Okay. Thanks.

Third, you recommend that Telefilm's parliamentary appropriation be increased, at the very least, to where it was before the reduction.

Can you give the committee a sense of how much money it represents? What was the investment before the cuts, and what would you like to see?

[Michael Hennessy]

I think it was approximately $10 million.

[Stéphane Dion, Liberal, Saint-Laurent—Cartierville, QC]

You would like $10 million?

[Michael Hennessy]

Yes. I think Telefilm has demonstrated, particularly when one looks at the performance at Cannes a couple of years ago and the movement of so many of our directors to Hollywood, that they're doing a bang-up job.

[Stéphane Dion, Liberal, Saint-Laurent—Cartierville, QC]

The fourth is the end, I understand, of the grind.

In French, you used the word “dilution”.

This committee has heard this request many times now, but we have been told that it may be costly for the government, and that it would be tricky, with the rules of....

[Michael Hennessy]

Yes. There are two things you can do. If you tried to do it all at once, it could be a significant number, as much as $100 million, so that's not going to happen. But about a quarter of that is really federal public assistance, primarily equity money from Telefilm and the CMF. The rest is provincial moneys. And sir, you know better than I about the federal-provincial challenges.

I think if we started looking at not grinding Telefilm equity, not grinding CMF equity, we would be able to better finance the kinds of shows and movies that you sell globally.

[Stéphane Dion, Liberal, Saint-Laurent—Cartierville, QC]

Again, do you have something that may feed us about that? Do you have something written that you would like us to start with?

[Michael Hennessy]

No, but we could, if you want us to write it up.

[Stéphane Dion, Liberal, Saint-Laurent—Cartierville, QC]

That would be a great help.

The fifth, which this committee has heard before as well, is the idea that because the tax credit comes at the end instead of at the outset, you have to borrow a lot of money, and when you borrow money, you lose money. You said we need to fix it, but then you said you don't know really how, so what is needed is a small group to think about this.

Do you not have an idea that you can share right now with this committee about how we can do that, have the money up front instead of at the end as a tax credit?

[Marc Séguin]

I'm happy to answer that, in terms of ideas of what we could do.

First of all, I'd say there are a lot of ideas, but to throw out a few right away, we could accelerate the payment. In other words, we could pay 80% or 85% up front, based on some kind of risk audit framework—very easy to do—then have a holdback, let's just say 15%, and then when the project is done, assuming it goes according to plan, file for the remaining 15%.

The idea is to accelerate the deployment of the capital so that you decrease interim financing costs. At the end of the day, it means more money on screen, or in companies, to build companies.

[Stéphane Dion, Liberal, Saint-Laurent—Cartierville, QC]

That's great. Again, each time you have ideas that you can send to this committee with more detail, it would be very much appreciated.

The sixth is red tape. We hate red tape, so if you have any ideas on how to cut red tape without creating problems of organization and coordination, that would be great. You don't have the time in your presentation to detail it, but could you give us examples of red tape that we should cut?