Evidence of meeting #45 for Canadian Heritage in the 41st Parliament, 2nd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was telefilm.

A recording is available from Parliament.

On the agenda

MPs speaking

Also speaking

Andrew Noble  President, Regroupement des distributeurs indépendants de films du Québec
Louis Dussault  Secretary, Regroupement des distributeurs indépendants de films du Québec
Virginia Thompson  President and Executive Producer, Vérité Film Inc.
Sophie Prégent  President, Union des Artistes
Daniel Charron  Union des Artistes
Jim Mirkopoulos  Vice-President, Cinespace Film Studios
Stephen Waddell  National Executive Director, Alliance of Canadian Cinema, Television and Radio Artists (ACTRA)
Sarah Gadon  Member, Alliance of Canadian Cinema, Television and Radio Artists (ACTRA)

3:30 p.m.

Conservative

The Chair (Mr. Gordon Brown (Leeds—Grenville, CPC)) Conservative Gord Brown

Good afternoon, everyone.

We're going to call meeting number 45 of the Standing Committee on Canadian Heritage to order. Today we are continuing our review of the Canadian feature film industry. In the first hour today, we have from the Regroupement des distributeurs indépendants de films du Québec, Andrew Noble, president, as well as Louis Dussault, secretary. From Vérité Films Inc., we have Virginia Thompson, president and executive producer. Via video conference from Montreal, Quebec, from the Union des Artistes, we have Sophie Prégent, president, as well as Daniel Charron.

Each of our three groups will have up to eight minutes and we will start with Mr. Noble.

You have the floor for up to eight minutes.

3:30 p.m.

Andrew Noble President, Regroupement des distributeurs indépendants de films du Québec

Hi. Thank you for receiving us.

The Regroupement des distributeurs indépendants de films du Québec has existed since 2008. It was established by independent distributors of Quebec films after the temporary closing of Cinéma Excentris—Cinéma Parallèle at the time—which created a crisis for Quebec distributors.

At that point, we realized that independent distributors had much in common and that they could hold discussions amongst themselves and with various levels of government, broadcasters and the industry in general.

We represent nine independent distributors in Quebec—in other words, the majority of Quebec distributors. We also release most of the Quebec films in the province.

Since our association was created, we have made headway on a number of issues. We have negotiated agreements with the Société de développement des entreprises culturelles—SODEC—in Quebec, and with Telefilm Canada at the federal level. We have met with representatives of the provincial government and other governments. We have proposed a number of agreements to those various governments.

We have also spent a lot of time discussing issues our industry is currently dealing with. Recently, the merger between Entertainment One and Alliance Films created the largest distributor in Canada—a huge company that controls most of the country's distribution activities. That is a major source of concern for us, especially since we do not consider it to be a Canadian company. It is based on Jersey Island and it is publicly traded in England. Entities outside Canada are controlling a significant portion of our industry.

The majority of films funded in Quebec are funded by that entity or its subsidiaries—Christal Films, Films Séville or eOne. They are all part of the same family.

Most of the public money is going to a company based in a tax shelter, and we all find that somewhat ironic. It has caused difficulties in terms of distribution work and the distribution economic model in Quebec for independent distributors, who are still behind many films.

I will give you a great example. Everyone is saying that eOne released Mommy, the Xavier Dolan film we are all very proud of. It has been seen around the world. However, let's not forget that Louis Dussault, my colleague from K-Films Amérique, distributed J'ai tué ma mère. Had he not distributed that film, Mommy would have never seen the light of day. That is a very important point.

Major changes are taking place in the industry when it comes to digital platforms, which have taken up a tremendous amount of space and changed the public consumption patterns. The public is no longer as bound to television. One of the main sources of revenue for distribution and film funding has historically been broadcasting—television licenses. The number of those licenses has decreased because of the important place taken up by platforms such as iTunes and Netflix. Those platforms are currently not managed by the CRTC, both when it comes to Canadian content and reinvestment in Canadian cinema. We think it is important to acknowledge those facts. In my opinion, the federal government has some work to do in that regard.

We prepared a brief that will be submitted to you later. We wrote in French, but it has to be translated into English before we give it to you, and that will be done soon. In the meantime, Louis will give you a summary.

3:35 p.m.

Louis Dussault Secretary, Regroupement des distributeurs indépendants de films du Québec

Thank you.

I would just like to add to Andrew's opening statement. It is in fact fairly ironic to see that Entertainment One, which merged three Quebec and Ontario film companies, controls 90% of public money, in addition to being a tax shelter. That company evades taxes. It is controlled by stockholders on the London Stock Exchange.

We are currently outside the control of Netflix, which has no specifications, does not pay taxes, has no obligations, does not reinvest its profits and prevents legal companies—which do pay their taxes—such as Super Écran from buying films because Netflix requires exclusivity.

Two types of companies are currently controlling our industry. In practice, they are tax shelters. That's a figure of speech.

I'm sorry to have to assign you reading.

The brief first provides a snapshot of the current situation. The landscape of film distribution, screening and broadcasting in Quebec has changed considerably over the past few years. The consolidation of major distribution companies—which we just talked about—through various mergers or acquisitions, as well as major technological changes, have sharply accelerated this phenomenon, which leaves less and less room for independent films.

Independent films represent Canada around the world. Xavier Dolan did not start with Mommy. He started with J'ai tué ma mère, which was a resounding success at the Cannes Festival in 2009. Without J'ai tué ma mère, there would have been no Mommy. Independent cinema, which the members of the Regroupement des distributeurs indépendants de films du Québec represent, is the cinema that represents Quebec and Canada around the world, now and in the years to come.

I could talk about a film that was just selected for a major festival, but since we are not allowed to discuss it, I cannot mention it before the first week of June. You will hear about it. It's an independent film, a first feature, funded by SODEC and Telefilm Canada. That is what we represent—films that promote Quebec and Canada around the world.

We do have some solutions, which we previously proposed to the Government of Quebec. We are now addressing you, since you represent the federal government. When it comes to federal jurisdiction, we would like a tax system to be implemented to fund the film industry and provide ways to support the capitalization of independent distributors with a 1% tax on the revenues of various telecommunications operators, through whom a growing part of the film offering goes—Internet service providers, cable companies and mobile operators.

Most telecommunications operators actually provide the three services separately or together. A portion of that amount of money must be set aside for capitalization funds for independent distributors. That fund would directly benefit the entire Quebec and Canadian film industry: better funding of advances to producers, better funding of marketing activities for theatrical releases—

3:40 p.m.

Conservative

The Chair Conservative Gord Brown

Thank you. I'm going to have to cut you off.

3:40 p.m.

Secretary, Regroupement des distributeurs indépendants de films du Québec

3:40 p.m.

Conservative

The Chair Conservative Gord Brown

You'll be able to expand on your comments during the question period.

3:40 p.m.

Secretary, Regroupement des distributeurs indépendants de films du Québec

3:40 p.m.

Conservative

The Chair Conservative Gord Brown

You're well past eight minutes.

3:40 p.m.

Secretary, Regroupement des distributeurs indépendants de films du Québec

Louis Dussault

I'm just reading now. I'm not expanding.

3:40 p.m.

Conservative

The Chair Conservative Gord Brown

You only have up to eight minutes. You'll be able to expand upon that during the questions.

3:40 p.m.

Secretary, Regroupement des distributeurs indépendants de films du Québec

3:40 p.m.

Conservative

The Chair Conservative Gord Brown

So, we're going to move to—

3:40 p.m.

Secretary, Regroupement des distributeurs indépendants de films du Québec

Louis Dussault

Can I finish?

3:40 p.m.

Conservative

The Chair Conservative Gord Brown

No. You're well past nine minutes. I try to be fair but—

3:40 p.m.

Secretary, Regroupement des distributeurs indépendants de films du Québec

Louis Dussault

I cannot finish?

3:40 p.m.

Conservative

The Chair Conservative Gord Brown

No. You'll be able to expand on it during the questions.

We're going to move to Virginia Thomson.

You have the floor for up to eight minutes.

3:40 p.m.

Virginia Thompson President and Executive Producer, Vérité Film Inc.

Hello everyone. My name is Virginia Thompson. I'm an independent producer. I'm well known for my television career and my first feature film, which I produced, distributed, and marketed. It was Corner Gas: The Movie. It went really well.

I want to get to the questions you asked me to answer today. First of all, concerning the effectiveness of government funding, it worked really well for Corner Gas: The Movie. The project was financed by Telefilm, the Canada Media Fund, Bell Media, federal and provincial tax credits, Tourism Saskatchewan, the Bell Fund, and Kickstarter crowdfunding.

The results were over-the-top. We sold out 100 theatres across the country. The film reached seven million Canadians through television. It made 220 million impressions online. It trended on Twitter nationally, both on the opening night in theatres and again during its broadcast premiere on television. It even trended worldwide. Over 55,000 DVD Blu-ray units have been sold to date, and they're still selling.

The next question was about how the film industry has changed since 2005. In response, I would echo my colleagues that everything has changed. In 2009 when Corner Gas the TV series wrapped, 3.2 million Canadians watched our show finale. It was the highest audience ever for a scripted show in English Canada on television. In 2009, online viewing and Facebook were new, and Twitter didn't exist. In just over five years we've moved from a linear world to a digital world. Viewers versus distributors are now in control of what they watch and their behaviour is clear. They'll watch films in a cinema, on television, on computers, on tablets and on phones. They'll pay to see films, find a way to watch films for free and share films illegally online. The good news is that they want to engage with films and the people who make them.

Let's talk about the success story again. In April 2009, when we were a TV show, our highest audience—and it's a record in Canada—was 3.2 million Canadians. But in December 2014 when we released the film, we more than doubled our audience in this new digital space. So there's some good news to be had, and I think there are ways of being successful in the future. The takeaway for me, and what I learned, is that today's world is all about engagement. If filmmakers engage with Canadians at home, their films will have a global reach. The paradigm shift for feature films is that the first screen, cinema box office revenue, has too much weight in measuring success. Today, from my perspective, the cinema screen is promotional and the real revenue is in the screens that follow it.

But let's go back to the effectiveness of government funding. It's an interesting story. I'll try to be quick.

In 2013, Corner Gas: The Movie was impossible to finance in Canada. In 2014, after listening to the market, I suggested a new approach to finance, promote and release the film with Carolle Brabant at Telefilm. Telefilm had to break their rules and create a pilot program for our film to move forward. It was a risk for all parties but it worked.

So, what happened in 2013, the bad year? We prepared our pitch. We were in a new world. The producers had a big audience engagement plan. We were going to refresh cornergas.com and launch a Facebook page and Twitter feed. We were going to use Brent Butt's 80,000 Twitter followers to get the word out. We were going to launch a quick Kickstarter crowdfunding campaign and get the audience involved, and we had a lot of different online things you saw play out this year.

We had a brand, a great story, and a great marketing plan. But what went wrong for us, first of all, was a lack of development dollars. We were first-time feature filmmakers. I'm very established in television but I had never made a feature film, and in the current system there was no money for me. That system was dry for us when we applied because the system gives established producers envelopes of money—and I agree with that—but there's very little money for the first-timer, or even people like us. We didn't fit within the system that was in place.

There are very few distributors in English Canada. eOne has a lot of power and it really was the core distributor that could handle a brand like ours. We did meet with some others as well. There was a problem with the movie from their perspective. It wasn't a niche picture and it was difficult to market, even though we said we wanted to market the film with them and we were willing to raise funding to do that for them. This was out-of-the-box thinking from their perspective and they offered us a third of the cash that we actually required to make the film.

We had a huge gap, so we went to CTV and they also said no. Why? Because they were not prepared to wait 18 months for a film to come to their network. That's how the system works. I asked what would happen if we did an event-based release in cinema and it went directly to all screens afterwards? They said, “We'd really like that, but it's never happened before in Canada”.

Then we went to Cineplex and we said that the movie Veronica Mars had just come out. It was event-based and it did very well. So we asked if they would do the same thing with Corner Gas. They agreed.

But we still had a big problem. We didn't have an eligible Canadian distributor. We now had Cineplex, we had the screens, we had the broadcaster, but we kind of broke a cardinal rule. I asked Telefilm and they gave us the opportunity to self-distribute the film. The film was a great success, as we all know.

Here are my recommendations, very quickly, if I have some more time.

Telefilm and the CMF are crucial and need to be bolstered in the digital age. There needs to be adequate development dollars available for producers with established track records that aren't feature film producers. Content creators are making content for all screens now, we all need to kind of.... Anyway, I can get into that.

Producers who have been turned down or are unable to access adequate funding from Canadian distributors but can demonstrate bona fide market support and credible financing for their films should be able to access Telefilm funding. We did that and it worked. It would be a huge help for producers if Telefilm had a small department to follow the cradle to grave creative financing, marketing, and distribution.

The government should look at the federal tax credit grind on new forms of funding like Kickstarter. We get grounds, so it's hardly worth going there, but we did it for marketing purposes.

During production, Telefilm should allow producers to be compensated for the marketing that they do because they must market while filming or they lose the huge opportunity to tell their stories to the audience when they're releasing a film.

I believe that marketing funding for Canadian distributors should be shared—sorry guys—between the distributor and the producer in order to reach audiences. Audiences want to speak to the creators. I believe in distribution, but I think we need to work together.

3:45 p.m.

Conservative

The Chair Conservative Gord Brown

We will now go by video conference to Montreal to hear from Sophie Prégent and Daniel Charron. You have the floor, for up to eight minutes.

May 6th, 2015 / 3:45 p.m.

Sophie Prégent President, Union des Artistes

Thank you, Mr. Chair.

Ladies and gentlemen members of the committee, on behalf of the Union des artistes, I want to thank you for inviting us to appear as you consider the Canadian feature film industry.

As the chair mentioned, I am the President of the Union des artistes, commonly known as UDA. UDA is a professional labour union representing artists working in French in Canada, and artists working in a language other than English or French in Quebec.

We represent 12,700 artists who work as actors, singers, hosts and dancers. Our members work in a number of disciplines, including feature film productions. For example, they are actors, stunt doubles, voice actors and dubbing directors.

UDA's role is to defend the social, economic and moral interests of its members, who are mostly self-employed workers. Negotiating minimum working conditions and artist compensation in our areas of responsibility is at the core of our activities. Our role is also to represent our members in political forums such as this one.

I want to begin by emphasizing the appropriateness of the study you have undertaken. The Canadian and Quebec film industry plays a key role in promoting our cultural identity, and it is now facing considerable challenges. As an actress working in the film industry, I could attest to that myself.

I know that a number of witnesses you have heard from so far have told you about the industry's challenges and put forward concrete solutions. That is why I would like to focus on a specific issue that has not been discussed up until now—the future of French-language dubbing of film and television works.

Dubbing plays a critical role in our film industry. It allows the public to view English Canadian and foreign films in a language close to them. Made-in-Canada dubbing provides Canadian francophones with a high-quality experience. In fact, the works dubbed here do a better job of taking into account the Canadian public's language and cultural sensitivities. Many other countries around the world also prefer dubbing as a language adaptation model.

In Quebec alone, about 800 professionals and artists are involved in dubbing. That includes actors and directors who are members of the Union des artistes, but also hundreds of artists and artisans such as technicians or adaptors—authors who translate from English to French.

The Association nationale des doubleurs professionnels, or ANDP, which represents the 14 biggest dubbing companies in Quebec, estimated the industry's revenues in 2012 at $23 million.

Today, I want to raise your awareness of the fact that the Quebec dubbing industry is currently experiencing a crisis. For a few months already, a slowdown has persisted in terms of activity, leading to a number of layoffs. UDA actually just renewed its collective agreement with ANDP and agreed to a decrease in artists' rates from 15% to 25%, depending on the type of production. This extraordinary measure shows how serious the current situation is.

We took a vote, and I will not hide the fact that the majority voted in favour of that reduction by a ratio of 5 to 1. Of course, it was unbelievable. Our union works on protecting our artists' quality of work, and we had to negotiate lower rates. That took a lot of courage from self-employed workers. They have all my admiration, sincerely, as those are families and self-employed workers who are already in a precarious situation. In their case, decreases of 15% to 25% are huge. I applaud them and admire their courage.

The Quebec government, which also knows that this crisis is threatening the industry's sustainability, reversed its 2014 decision to reduce the tax credit for dubbing by 20%. In fact, Quebec has reintroduced that tax credit in its March budget.

There are three main reasons behind the current crisis. First, the competition is increasing.

France is still our traditional competitor, but new players have joined the field such as Belgium, Spain, Italy and Morocco, which have entered the market with an extremely competitive offering.

Second, our dubbing sector finds itself in an uneven playing field. Several of the countries I just mentioned can provide more attractive rates and funding conditions for local and foreign producers. France also still has regulations that require feature films released in theatres to be dubbed in France. The difference in market size, market structure and funding conditions provided mean that, all too often, a film is dubbed overseas based on the idea that Canadian broadcasters will buy it anyway.

Third, the emergence of new virtual distribution models—which were discussed earlier—is also contributing to the current crisis. Theatrical releases still have the highest proportion of works dubbed in Canada. The industry tells us that about 80% of theatrical releases were dubbed here. They are usually foreign, mainly American, productions.

However, we are increasingly losing our grip on film productions not shown in theatres, such as DVDs, as well as television productions such as television series and virtual broadcasts. Here, I am thinking of Netflix, the Internet, as well as Illico, in Quebec. The shift in the public's viewing patterns toward virtual content—products that are not dubbed here—contributes to the current crisis.

The Union des artistes has long been thinking about and discussing these issues with its members and with various Quebec government agencies through forums and consultations. We think that now is the time to take action.

In concrete terms, here are our three main recommendations for the federal government.

First, we suggest that the Canada Media Fund—CMF—program for dubbing and subtitling be enhanced, to take into account the market's evolution and to better achieve its objective of increasing accessibility to the current programming. By improving, I mean simplifying and expanding access to the program, and its enhancement.

Second, we suggest that the government change its rules for awarding grants to Canadian producers of feature films and television content, so as to require Canadian producers to have their productions dubbed in Canada when they receive public funding. For example, we estimate that the dubbing of 25% of Canadian series fully funded in Canada is currently out of our reach. It is absurd that productions made in Canada, which are funded by our own government and which we want to make accessible to all Canadians, are giving business to our competitors.

Third, we suggest that rules related to Canadian content be revised, so that francophone television broadcasters prioritize Canadian dubbing when available and so that they have to increase the percentage of local dubbings across their programming schedule.

We are actually somewhat worried about the potential effects of the the CRTC's new broadcasting regulatory policy announced on March 12—

3:55 p.m.

Conservative

The Chair Conservative Gord Brown

Thank you.

We are now going to start questions from Mr. Weston.

It's up to Mr. Weston if he wants to give any of our witnesses some of his time for them to keep going.

3:55 p.m.

Conservative

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

Thank you for the hint, Mr. Chair.

3:55 p.m.

Conservative

The Chair Conservative Gord Brown

Don't forget our friends from Montreal.

3:55 p.m.

Conservative

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

Okay.

I will start with you, Ms. Prégent. I would like to hear the rest of your recommendations

I think that Mr. Dussault would also like to give us additional information.

Ms. Prégent, please continue.

3:55 p.m.

President, Union des Artistes

Sophie Prégent

Thank you.

I was talking about the CRTC's broadcasting regulations and the decision that was made on March 12, and I said we were concerned about it. The quotas for the percentage of Canadian programs broadcast during the day are going from 55% to 0%. So the rules on Canadian content will now apply only during prime time. That decision is meant to address challenges specific to the anglophone market, where Canadian series are facing U.S. competition during prime time.

We fully understand that, but the situation is completely different in a francophone market. Broadcasters broadcast more dubbed content outside prime time. Although the CRTC is increasing the credit given to productions dubbed in Canada, from 25% to 33%, that credit will apply to the programs broadcast at a time of the day when many Canadian productions are already on the air.

You will find more information about the nature of the challenges the dubbing industry is facing and about the validity of our recommendations in the brief we have submitted. I would also be pleased to answer any questions you may have.

Thank you.

4 p.m.

Conservative

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

You have said so much in so little time. Thank you.

Mr. Dussault, go ahead.